Downtown Office CNL Center at City Commons 450 South Orange Avenue Orlando, FL tel: (407) fax: (407)

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1 cfinaldraft.qxd 3/4/ :29 PM Page 1 Downtown Office CNL Center at City Commons 450 South Orange Avenue Orlando, FL tel: (407) fax: (407) Mailing Address: CNLBank P.O. Box 1546 Orlando, FL CNLBank is a subsidiary of 2004 ANNUAL REPORT

2 cfinaldraft.qxd 3/4/ :30 PM Page 2 Total Assets (000s) 500, , , , , Mission Statement CNLBank will be positioned to become "Florida s Bank for Business". We will expand into the major metropolitan markets across the state serving the needs of small to midsize businesses, professionals, commercial real estate developers and homebuilders. We will deliver a full range of commercial banking services with a commitment to quality personal service. We will be regarded as a responsible corporate citizen, and above all, we will represent a superior investment for our shareholders. Mission Statement Net Earnings (000s) 2,500 2,000 1,500 1, Company Profile CNLBank is a state chartered commercial bank headquartered in Orlando, Florida. With offices in Orlando, Jacksonville, and Sarasota, the bank has assets in excess of $418 million. CNLBank offers a comprehensive range of business and personal financial products and services. Company Profile Our Commitment to You Respect the dignity of every individual Honor truth Our Commitment Value our tradition to serve Champion a long-term perspective Expanding Our Horizons Develop people and foster teamwork Encourage faithful stewardship 1 2

3 cfinaldraft.qxd 3/4/ :30 PM Page 3 A Message to Our Shareholders A Message to Our Shareholders The future never just happened. It was created. -- Will and Ariel Durant Every stage in the expansion of the American dream has seen unbounded vision and calculated risk - pioneers who were unafraid of the wilderness, scientists who were unafraid of the truth, businesspeople who were unafraid of failure, and dreamers who were unafraid of action. All of these Americans knew that a bigger and brighter future would never just happen. They would have to create it. A vision would get them started. Discipline and hard work would keep them going. Our Vision Over the past two years, we crystallized our vision to be the best business bank in Central Florida by investing our resources into several building blocks. Among these were recruiting the best bankers in the business, providing them with the tools to serve their clients, and most important, empowering them with the authority to make local decisions. We are pleased to report that our investments are continuing to pay off with superior results. Our growth in assets is still among the best in the entire state of Florida. In fact, we are doing so well in Central Florida that we have decided to expand our vision. Our new dream is to become Florida s Bank for Business. We believe that what has served us well in Orlando will also serve us in every major market across the state. Why? Because our market-based strategy is first and foremost directed to business customers who want a personal banking relationship with an experienced banker who has the authority to make decisions and the lending capability to meet their needs. Additionally, Florida continues to be one of the most dynamic and diverse markets in the country. For the past decade Florida has ranked in the top three states for both population and job growth. Projections through 2010 continue to show Florida growing jobs and population at twice the national average. Our Discipline To fulfill our vision to be Florida s bank for business we are disciplining ourselves to become the leading bank in multiple markets across the state. Fueled by both our track record and Florida s dynamic economy, we have made a first step toward expanding our horizons by opening an office, recruiting a team and applying for a new bank charter in Jacksonville. Additionally, during November 2004, we had a unique opportunity to attract a team of some of the finest mortgage bankers in the business. They have worked together as a group for ten years in the Sarasota market and we felt it was a compelling opportunity to expand our Residential Lending business in one of the best housing markets in the state. In 2005, we will start the planning process to enter the Fort Lauderdale/Palm Beach and Tampa Bay markets. Our disciple in 2004 was also seen in other significant results: Total assets increased 44% from $290 million to $418 million. Total loans outstanding grew 59% from $203.7 million to $320 million. Total deposits grew 33% from $265.7 million to $349 Million. Net income increased 215% to $2,000,000. Our Asset quality remains excellent with total non-performing loans at.13% of total assets, net charge offs of.01%, and only three past due accounts at year end. We also raised $11 million in capital to support our growth. Our Horizons It has been said that leaders keep their eyes on the horizon, not just the bottom line. Looking ahead to 2005, in addition to planning banks for new markets, we will continue to expand our operations in Orlando, not necessarily with offices, but with bankers. Our deepest commitment continues to be three simple words: banking is personal. That commitment requires that we recruit and keep good talent by giving our bankers the authority to do what they are trained to do. Our customers want to deal with bankers who make decisions, not institutions that make delays. Our commitment to personal banking is so strong that we will only enter new markets when we are confident that we have been able to recruit the best bankers for that market. In an earlier report to you, we shared that we wanted to build a four-legged stool of core competencies for CNLBank: commercial banking, mortgage banking, insurance and wealth management. The first three competencies are up and running and in 2005, we plan to move forward with strategic decisions that will put our wealth management program into full swing in Yes, the future doesn t just happen. It is created. In 2004, the people of CNLBank did precisely that, applying uncompromising vision and exceptional business discipline to expand our horizons to include the entire state of Florida. We know that the future is not a gift. It is an achievement. Thank you for your trust and support as we continue to move forward, unafraid of action and confident of our vision to be Florida s business bank. Sincerely, C. Michael Collins President & Chief Executive Officer James M. Seneff, Jr. Chairman of the Board pictured from left to right: C. Michael Collins, James M. Seneff, Jr. A Message to Our Shareholders 3 4

4 cfinaldraft.qxd 3/4/ :31 PM Page 4 Jacksonville CNLBank, First Coast (in organization) We are proud to announce the opening of Supporting the bank officers is a founding Board CNLBank, First Coast (in organization), the first of Directors with a history of local business success and long-term community involvement. The step in our statewide strategy to build Florida s Bank for Business. The selection of the members include: Jacksonville market is particularly important because it is one of the fastest growing urban John (Jay) Anderson, Managing Partner of markets in the state. The opportunity to attract Bott-Anderson Partners, Inc., an investment a team of experienced local banking veterans consulting firm in Jacksonville. He previously combined with the exciting demographic profile served as, Treasurer made this an easy decision. and Chief Financial Officer for American Heritage Life Investment Co. as well as CFO CNLBank, First Coast (in organization) is led for Baptist Health systems in Jacksonville. by former Barnett Bank executives, Jim Miller, President and CEO, Lee Hanna, Chairman of the Matt Kenyon, President of the Dana B. Kenyon Board, and Don Roberts Vice-Chairman. Company, a leading Jacksonville based construction company and third generation Combined they have over 60 years of banking experience, predominately in the Jacksonville Jacksonville native. market. Charles (Chuck) Newman, Partner at KGi Jim Miller is a Jacksonville native and a graduate Capital, Inc., and former Chief Financial of Bolles School and Florida State University. Officer for Barnett Banks, Inc. Don Roberts served 14 years at Barnett followed by six years as President and CEO of Florida Dan St. John, Chairman, CEO and co-founder Bank of Jacksonville. Lee Hanna s career of St. John & Partners, a top 100 advertising spanned 24 years with Barnett and was Chief and public relations firm headquartered in Retail Delivery Banking Executive and a member of the Management Operating Jacksonville. Committee. Jacksonville Lee Hanna Jim Miller Don Roberts 5 Jacksonville Office Chairman of the Board President & Chief Executive Officer Vice Chairman of the Board Deerwood Park Boulevard, Jacksonville, FL 32256

5 cfinaldraft.qxd 3/4/ :31 PM Page 5 Financials CONSOLIDATED BALANCE SHEETS ($ in thousands, except per share amounts) CONSOLIDATED STATEMENTS OF EARNINGS (In thousands) Financials at December 31, Assets Cash and due from banks $ 7,993 10,246 Interest-earning deposits 12, Federal funds sold 10,577 16,763 year ended December 31, Interest income: Loans $ 14,926 9,357 Securities 1, Other Cash and cash equivalents 31,134 27,920 Total interest income 17,093 10,479 Securities available for sale 53,457 51,763 Loans, net of allowance for loan losses of $3,419 in 2004 and $2,253 in , ,584 Loans held for sale Accrued interest receivable 1, Premises and equipment, net 4,921 3,931 Deferred tax asset 1, Federal Home Loan Bank stock 1, Cash surrender value of bank-owned life insurance 3,300 3,166 Other assets Total assets $ 418, ,975 Liabilities and Stockholders Equity Liabilities: Noninterest-bearing demand deposits 111,037 71,662 Money-market deposits 151, ,473 Savings and NOW deposits 31,484 19,769 Time deposits 54,651 51,128 Total deposits 348, ,032 Other borrowings 28,938 - Official checks 2,020 3,226 Accrued interest payable and other liabilities 2,490 1,620 Total liabilities 382, ,878 Interest expense: Deposits 2,500 1,944 Borrowings Total interest expense 2,717 2,056 Net interest income 14,376 8,423 Provision for loan losses 1, Net interest income after provision for loan losses 13,171 7,493 Noninterest income: Service charges on deposit accounts Gain on sale of loans held for sale Net earnings on bank-owned life insurance Other Total noninterest income 1, Noninterest expense: Salaries and employee benefits 6,507 3,657 Occupancy 2,362 1,852 Professional fees Data processing Printing and office supplies Other 1, Commitments and contingencies Stockholders equity: Common stock, $.01 par value, 5,000,000 shares authorized, 2,727,055 and 2,079,996 shares issued and outstanding Additional paid-in capital 33,414 22,450 Retained earnings 2, Accumulated other comprehensive loss (332) (84) Total noninterest expense 11,192 7,078 Earnings before income taxes 3, Income taxes 1, Net earnings $ 2, financials 7 8 Total stockholders equity 35,819 23,097 Total liabilities and stockholders equity $ 418, ,975 financials

6 cfinaldraft.qxd 3/4/ :32 PM Page 6 Board of Directors Senior Officers Board of Directors James M. Seneff, Jr. Chairman and Chief Executive Officer CNL Financial Group, Inc. Robert A. Bourne President & Treasurer CNL Financial Group, Inc. C. Michael Collins President & CEO Lee E. Hanna Vice Chairman Mitchell J. Laskey Chairman Life Star Response Corporation President & CEO Access Transport Senior Officers C. Michael Collins President & Chief Executive Officer Lee E. Hanna Vice Chairman Christopher S. Peacock Retail Banking Chirag J. Bhavsar & Chief Financial Officer Tim J. Little & Chief Credit Officer Mauro A. Harto CNL Mortgage Our Locations Downtown Office CNL Center at City Commons 450 South Orange Avenue Orlando, Florida Heathrow Office 1200 International Parkway South Heathrow, Florida Dr. Phillips Office 7625 Sand Lake Road Orlando, Florida Locations Rafael E. Martinez Partner McEwan Martinez & Dukes P.A. Evelyn D. Wilson Senior Vice President Director of Human Resources F. David McKinney President & CEO J. Rolfe Davis Insurance Kelley P. Mossburg Chief Operating Officer CNL Holdings, Inc. John A. Riley Principal Co-Advantage Holdings, Inc. Winter Park Office 200 East New England Avenue Winter Park, Florida Jacksonville Office Deerwood Park Boulevard Jacksonville, FL Sarasota Office 101 Arthur Andersen Parkway, Suite 320 Sarasota, Florida Andrew M. Thompson Executive Consultant Tracy F. Schmidt Chief Financial Officer CNL Holdings, Inc. locationslocations 9 10