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U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

For the quarterly period ended March 31, 2005

For the transition period from              to             

Commission file number 333-95087

CENTERSTATE BANKS OF FLORIDA, INC.

(Exact Name of Registrant as Specified in Its Charter)

1101 First Street South, Suite 202

Winter Haven, Florida 33880

(Address of Principal Executive Offices)

(863) 293-2600

(Issuer’s Telephone Number, Including Area Code)

Check whether the issuer: (1) filed all reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    YES  x    NO  ¨

Check whether the registrant is an accelerated filer (defined in Rule 12b-2 of the Exchange Act):    YES  x    NO  ¨

State the number of shares outstanding of each of the issuer’s classes of common Equity, as of the latest practicable date:

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CENTERSTATE BANKS OF FLORIDA, INC. AND SUBSIDIARIES

INDEX

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Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands of dollars)

See notes to the accompanying condensed consolidated financial statements

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Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)

(in thousands of dollars, except per share data)

See notes to the accompanying condensed consolidated financial statements.

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Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands of dollars)

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Centerstate Banks of Florida, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands of dollars)

(continued)

See notes to the accompanying condensed consolidated financial statements.

CenterState Banks of Florida, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: Holding company and subsidiaries background information

The consolidated financial statements of CenterState Banks of Florida, Inc. (the “Company”) include the accounts of CenterState Banks of Florida, Inc. (the “Parent Company”), its four wholly owned subsidiary banks and an 80% owned subsidiary, C. S. Processing.

The Company, through its subsidiary banks, operates through 25 locations in seven Counties throughout Central Florida, providing traditional deposit and lending products and services to its commercial and retail customers. C.S. Processing is an 80% owned subsidiary, which provides item processing services for the Company’s four subsidiary banks and the minority shareholder bank which owns the remaining 20%.

NOTE 2: Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. In the opinion of management, all adjustments, consisting primarily of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods have been made. The results of operations of the three month period ended March 31, 2005 are not necessarily indicative of the results expected for the full year.

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NOTE 3: Common stock outstanding and earnings per share data

Basic earnings per share is based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the periods and the further dilution from stock options using the treasury method. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the periods presented (dollars are in thousands, except per share data).

NOTE 4: Comprehensive income

Under Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income,” certain transactions and other economic events that bypass the statement of earnings must be displayed as other comprehensive income. The Company’s comprehensive income consists of net earnings and unrealized gains and losses on securities available-for-sale, net of deferred income taxes.

The table below sets forth the Company’s comprehensive income for the periods indicated below (in thousands of dollars).

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NOTE 5: Compensation programs

Substantially all of the Company’s employees are covered under the Company’s employee benefit plan. The expenses of providing these benefit plans are charged to income in the period the expenses are incurred. In addition, certain directors and key employees are covered under the Company’s stock option plans.

The Company applies Accounting Principle Board Opinion No. 25 and related interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized for its stock option plans. Had compensation cost for the Company’s stock-based compensation plan been determined consistent with Statement of Financial Accounting Standards (“SFAS”) No. 123, the Company’s net income would have been reduced to the pro forma amounts indicated below (amounts are in thousands of dollars except for per share data):

NOTE 6: Effect of new pronouncements

In March 2004, the SEC issued SAB No. 105, Application of Accounting Principles to Loan Commitments. This staff accounting bulletin summarizes the views of the staff regarding the application of generally accepted accounting principles to loan commitments accounted for as derivative instruments. In particular, this bulletin clarifies whether the entity can consider the expected future cash flows related to the associated servicing of the loan and adds additional disclosures to the annual financial statements. The adoption of this bulletin did not have a material effect on the financial statements of the Company.

FASB Statement No. 123R, Accounting for Stock-Based Compensation, requires all public companies to record compensation expense for stock options provided to employees in return for employee service. The expense is measured at the fair value of the options when granted, and is expensed over the employee service period, which is the vesting period of the options. This will apply to awards granted or modified beginning with the next fiscal year beginning after June 15, 2005. Compensation expense will also be recorded for prior option grants that vest after the date of adoption. The effect on

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results of operations will depend on the level of future option grants and the calculation of the fair value of the options granted at such future date, as well as the vesting periods provided, and so cannot currently be predicted. Existing options that will vest after adoption date are expected to result in additional compensation expense of approximately $433 in 2006 and $362 in 2007 (dollars are in thousands).

On September 30, 2004, the FASB voted unanimously to delay the effective date of EITF 03-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments. The delay applies to both debt and equity securities and specifically applies to impairments caused by interest rate and sector spreads. In addition, the provisions of EITF 03-1 that have been delayed relate to the requirements that a company declare its intent to hold the security to recovery and designate a recovery period in order to avoid recognizing an other-than-temporary impairment charge through earnings.

The FASB will be issuing implementation guidance related to this topic. The adoption of this Statement is not expected to have a material effect on the financial statements of the Company.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

COMPARISON OF BALANCE SHEETS AT MARCH 31, 2005 AND DECEMBER 31, 2004

Overview

Total assets of the Company were $789,813,000 as of March 31, 2005, compared to $753,779,000 at December 31, 2004, an increase of $36,034,000 or 4.8%. This increase was primarily the result of the Company’s internally generated loan growth funded by an increase in deposits.

Federal funds sold and money market accounts

Federal funds sold and money market accounts were $54,500,000 at March 31, 2005 (approximately 6.9% of total assets) as compared to $62,809,000 at December 31, 2004 (approximately 8.3% of total assets). Management uses its available-for-sale securities portfolio, as well as its federal funds sold and money market accounts for liquidity management and for investment yields. These accounts, as a group, will fluctuate as a function of loans and deposits outstanding (including other borrowing sources such as securities sold with agreements to repurchase, as discussed later). The loan to deposit ratio increased from 66.9% at December 31, 2004, to 67.8% at March 31, 2005, which is consistent with a decrease in the ratio of federal funds sold and money market accounts, and investment securities relative to total assets outstanding as of December 31, 2004 (33.7%) compared to the comparable ratio at March 31, 2005 (32.1%).

Investment securities

Securities available-for-sale, consisting primarily of U.S. Treasury and government agency securities, were $198,897,000 at March 31, 2005 (approximately 25% of total assets) compared to $191,400,000 at December 31, 2004 (approximately 25% of total assets). These securities have been recorded at fair value. The Company classifies its securities as “available-for-sale” to provide for greater flexibility to respond to changes in interest rates. Management uses its available-for-sale securities portfolio, as well as its federal funds sold and money market accounts for liquidity management and for investment yields. These accounts, as a group, will fluctuate as a function of loans and deposits outstanding as discussed above, under the caption “Federal funds sold and money market accounts.”

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Loans

Total gross loans were $462,268,000 at March 31, 2005, compared to $441,541,000 at December 31, 2004, an increase of $20,727,000 or 4.7%, during the three month period. During the same period, real estate loans increased by $18,918,000 or 5.7%, commercial loans decreased slightly by $73,000 or 0.1%, and all other loans including consumer loans increased by $1,882,000 or 4%. Total loans net of unearned fees and allowance for loan losses were $455,726,000 at March 31, 2005, compared to $435,320,000 at December 31, 2004, an increase of $20,406,000 or 4.7%.

The following table sets forth information concerning the loan portfolio by collateral types as of the dates indicated (dollars are in thousands).

Credit quality and allowance for loan losses

The Company’s allowance for loan losses represents management’s estimate of an amount adequate to provide for potential losses within the existing loan portfolio. Loans are charged against the allowance when management believes collection of the principal is unlikely. The allowance consists of amounts established for specific loans and is also based on historical loan loss experience, the volume and type of lending conducted by the Company, the amount of nonperforming loans, general economic conditions, particularly as they relate to the Company’s market areas, and other factors related to the collectibility of the Company’s loan portfolio. The specific reserve element is the result of a regular analysis of all loans and commitments based on credit rating classifications and other factors. At March 31, 2005, the allowance for loan losses was $5,941,000 or 1.29% of total loans outstanding, compared to $5,685,000 or 1.29%, at December 31, 2004.

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The following table sets forth information concerning the activity in the allowance for loan losses during the periods indicated (in thousands of dollars).

Nonperforming assets

Nonperforming assets include (1) non-accrual loans; (2) accruing loans that are 90 days or more delinquent that are deemed by management to be adequately secured and in the process of collection; (3) OREO (i.e. real estate acquired through foreclosure or deed in lieu of foreclosure); and (4) other repossessed assets (not real estate). All delinquent loans are reviewed on a regular basis and are placed on non-accrual status when, in the opinion of management, the possibility of collecting additional interest is deemed insufficient to warrant further accrual. As a matter of policy, interest is not accrued on loans past due 90 days or more unless the loan is both well secured and in the process of collection. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Additional interest income on such loans is recognized only when received.

The following table sets forth information regarding the components of nonperforming assets at the dates indicated (in thousands of dollars).

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Management is continually analyzing its loan portfolio in an effort to recognize and resolve its problem assets as quickly and efficiently as possible. As of March 31, 2005, management believes that its allowance for loan losses was adequate. However, management recognizes that many factors can adversely impact various segments of its market. Accordingly, there is no assurance that losses in excess of such reserves will not be incurred.

Bank premises and equipment

Bank premises and equipment was $26,875,000 at March 31, 2005 compared to $25,669,000 at December 31, 2004, an increase of $1,206,000 or 4.7%. The increase was the net result of purchases aggregating $1,620,000 (includes the purchase of land for approximately $1 million for a future branch site in Osceola County), less depreciation of $412,000 and the sale of a piece of equipment with a book value of $2,000.

Deposits

Total deposits were $680,506,000 at March 31, 2005, compared to $659,630,000 at December 31, 2004, an increase of $20,876,000 or 3.2%. During the three month period ended March 31, 2005, demand deposits increased by $8,039,000 (4.6%), NOW deposits increased by $934,000 (0.9%), savings and money market accounts decreased by $15,366,000 (9.0%), and time deposits increased by $27,269,000 (12.8%).

Securities sold under agreement to repurchase

The Company’s subsidiary banks enter into borrowing arrangements with their retail business customer by agreements to repurchase (“securities sold under agreements to repurchase”) under which the banks pledge investment securities owned and under their control as collateral against the one-day borrowing arrangement. These short-term borrowings totaled $34,070,000 at March 31, 2005 compared to $24,627,000 at December 31, 2004, resulting in an increase of $9,443,000, or 38%.

Corporate debenture

The Company formed CenterState Banks of Florida Statutory Trust I (the “Trust”) for the purpose of issuing trust preferred securities. On September 22, 2003, the Company issued a floating rate corporate debenture in the amount of $10 million. The Trust used the proceeds from the issuance of a trust preferred security to acquire the corporate debenture of the Company. The trust preferred security essentially mirrors the corporate debenture, carrying a cumulative preferred dividend at a variable rate equal to the interest rate on the corporate debenture (three month LIBOR plus 305 basis points). The corporate debenture and the trust preferred security each have 30-year lives. The trust preferred security and the corporate debenture are callable by the Company or the Trust, at their respective option after five years, and sooner in specific events, subject to prior approval by the Federal Reserve, if then required. Related loan origination costs of $188,000 were capitalized and are being amortized to interest expense over a five year period. The Company has treated the trust preferred security as Tier 1 capital up to the maximum amount allowed under the Federal Reserve guidelines, and the remainder as Tier 2 capital for federal regulatory purposes.

Other borrowings

At March 31, 2005, other borrowings consisted of federal funds purchased. It may also include Federal Home Loan Bank (“FHLB”) short-term advances from time to time. During the quarter FHLB advances were drawn upon, but there were no outstanding FHLB advances at March 31, 2005. Average FHLB advances during the quarter ending March 31, 2005 was less than $50,000.

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Stockholders’ equity

Shareholders’ equity at March 31, 2005, was $58,165,000, or 7.4% of total assets, compared to $57,664,000, or 7.6% of total assets at December 31, 2004. The increase in stockholders’ equity was due to year-to-date net income ($1,262,000), and employee stock options exercised ($130,000), less a net decrease in the market value of securities available for sale, net of deferred taxes ($647,000), and dividends paid ($244,000).

The Company paid quarterly dividends of $0.06 per share on March 31, 2005 to shareholders of record as of the close of business on March 15, 2005.

The federal bank regulatory agencies have established risk-based capital requirements for banks. These guidelines are intended to provide an additional measure of a bank’s capital adequacy by assigning weighted levels of risk to asset categories. Banks are also required to systematically maintain capital against such “off- balance sheet” activities as loans sold with recourse, loan commitments, guarantees and standby letters of credit. These guidelines are intended to strengthen the quality of capital by increasing the emphasis on common equity and restricting the amount of loan loss reserves and other forms of equity such as preferred stock that may be included in capital. As of March 31, 2005, each of the Company’s four subsidiary banks exceeded the minimum capital levels to be considered “Well Capitalized” under the terms of the guidelines.

Selected consolidated capital ratios at March 31, 2005 and December 31, 2004 are presented in the table below.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004

Overview

Net income for the three months ended March 31, 2005 was $1,262,000 or $0.31 per share basic and $0.30 per share diluted, compared to $1,753,000 or $0.52 per share basic and $0.51 per share diluted for the same period in 2004. Included in last year’s quarterly earnings was a $1,844,000 ($1,150,000 after tax) gain on sale from the sale of two branches. Excluding the gain on sale of branches, last year’s

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quarterly earnings would be $603,000 or $0.18 per share basic and diluted. A reconciliation between net income and net income excluding the branch sales is presented below.

Reconciliation between net income and pro-forma net income (i.e. excluding branch sales)

Amounts in thousands of dollars, except per share data

Net interest income/margin

Net interest income increased $1,368,000 or 28% to $6,273,000 during the three month period ended March 31, 2005 compared to $4,905,000 for the same period in 2004. The $1,368,000 increase was the result of a $1,993,000 increase in interest income less a $625,000 increase in interest expense.

Interest earning assets averaged $701,041,000 during the three month period ended March 31, 2005 as compared to $560,594,000 for the same period in 2004, an increase of $140,447,000, or 25%. The yield on average interest earning assets increased 0.18% to 4.96% during the three month period ended March 31, 2005, compared to 4.78% for the same period in 2004. The combined net effects of the $140,447,000 increase in average interest earning assets and the 0.18% increase in yield on average interest earning assets resulted in the $1,993,000 increase in interest income between the two periods.

Interest bearing liabilities averaged $529,862,000 during the three month period ended March 31, 2005 as compared to $451,935,000 for the same period in 2004, an increase of $77,927,000, or 17%. The cost of average interest bearing liabilities increased 0.24% to 1.82% during the three month period ended March 31, 2005, compared to 1.58% for the same period in 2004. The combined net effects of the $77,927,000 increase in average interest bearing liabilities and the 0.24% increase in cost on average interest bearing liabilities resulted in the $625,000 increase in interest expense between the two periods.

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The table below summarizes, the analysis of changes in interest income and interest expense for the three month periods ended March 31, 2005 and 2004 (in thousands of dollars).