EFH Empire Financial Holding

Operating Income up 334% and Net Income up 138% on Revenue Increase of 48% LONGWOOD, Fla., May 9 /PRNewswire-FirstCall/ -- Empire Financial Holding Company (AMEX:EFH), a full service brokerage and investment banking firm serving retail and institutional clients, today reported sharply increased Operating Income and Net Income on higher Revenues in the first quarter ended March 31, 2006. Revenues for the First Quarter ended March 31, 2006 were $8,612,621, an increase of 48% for the same period in 2005. Operating Income rose 334% to $943,118 compared to $217,433 for the same period in 2005. Net income increased 138% to $548,865 from $230,834 for the same period in 2005 or $0.08 per share basic and $0.05 fully diluted in 2006, compared to $0.06 per share basic and fully diluted for the same period in 2005. Total shareholder equity of $8,691,666 at March 31, 2006 was more than $10,000,000 higher than the shareholders deficit reported at March 31, 2005. While Total Operating Expenses increased on higher revenues, they fell to 85% of Revenues from 96% of Revenues in 2005, reflecting a 101% increase in higher margin trading activities and the commencement, in late 2005, of investment banking activities, as well as cost containment programs adopted in late 2005. "First quarter results demonstrate the initial success of the revitalization and expansion plan put into place last year, as well as the benefits of the cost containment programs we adopted," said Donald A. Wojnowski Jr., Empire Financial Holding Company President and CEO. "All business segments showed improved results with institutional execution and market making activities making an even more significant contribution. Our newly instituted investment banking activities show promise. Looking forward we remain focused on executing our plan and expect to see further gains from investment banking and our new retail brokerage offices. Our sharply improved capital base opens up further expansion possibilities. We remain committed to continuing profitability and further balance sheet improvement." Lastly, Wojnowski commented, "We spent the last year assembling a team and making sure the infrastructure was in place to support a larger and more diverse business line. I am pleased to report that we have made significant progress on those fronts and are positioned for an excellent 2006." The company will host a conference call today at 4:30 PM EDT. The dial-in number is 1-800-531-3250 -- PIN-3689703. About Empire Financial Holding Company Empire Financial Holding Company, through its wholly owned subsidiary, Empire Financial Group, Inc., provides full-service retail brokerage services through its network of independently owned and independently operated offices. Through its market-making and trading division, the Company offers securities order execution services for unaffiliated broker dealers and makes markets in domestic and international securities. Empire Financial also provides Investment Banking services for clients as well as turn-key fee based investment advisory and registered investment advisor custodial services through its wholly owned subsidiary, Empire Investment Advisors, Inc. Forward-Looking Statement Disclaimer This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, without limitation, fluctuations in the volume of transactional services provided by the Company, competition with respect to financial services commission rates, the effect of general economic and market conditions, factors affecting the securities brokerage industry as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. EMPIRE FINANCIAL HOLDING COMPANY CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (Unaudited) March 31, 2006 Assets Cash and cash equivalents $2,242,855 Marketable securities owned, at market value 2,895,180 Securities not readily marketable, at estimated fair value 165,912 Commissions and other receivables from clearing organization 1,748,823 Deposits at clearing organization 1,077,382 Furniture and equipment, net 265,790 Prepaid expenses and other assets 465,904 Deferred tax asset 2,043,432 Cash in escrow 350,000 Notes receivable 2,880,973 Total assets 14,136,251 Liabilities and stockholders' equity Liabilities Line of credit payable 450,000 Accounts payable, accrued expenses and other liabilities 1,338,198 Due to clearing organization 1,949,985 Securities sold, but not yet purchased, at market value 763,169 Notes payable $641,667 Income taxes payable 301,566 Total liabilities $5,444,585 Commitments and Contingencies Stockholders' equity Convertible preferred stock, series B, C, D, E and F, $.01 par value 1,000,000 shares authorized 841,690 issued and outstanding $8,417 Common stock, $.01 par value 100,000,000 shares authorized 6,889,005 shares issued and outstanding 68,890 Additional paid-in capital 13,693,578 Accumulated deficit (5,079,218) Total stockholders' equity $8,691,666 Total liabilities and stockholders' equity $14,136,251 EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES (Unaudited) CONSOLIDATED STATEMENT OF OPERATIONS March 31, 2006 THREE MONTHS THREE MONTHS ENDED ENDED March 31, March 31, 2006 2005 Revenues Commissions and fees $4,577,496 $4,064,326 Trading income 3,500,125 1,745,901 Investment banking income 535,000 -- 8,612,621 5,810,227 Expenses Employee compensation and benefits 2,566,747 1,304,343 Commissions and clearing costs 4,109,684 3,572,373 General and administrative 924,674 626,835 Communications and data processing 68,399 89,243 7,669,503 5,592,794 Income from operations 943,118 217,433 Other income (expenses) Interest income 57,286 49,311 Interest expense (28,334) (29,160) 28,952 20,151 Income before income taxes 972,070 237,584 Less: Provision for Income taxes (375,164) -- Net income 596,906 237,584 Accrue preferred stock dividend (48,041) (6,750) Net income applicable to common shareholders $548,865 $230,834 Basic and diluted earnings per share applicable to common shareholders: Earnings per share-basic and diluted $0.08 $0.06 Earnings per share diluted $0.05 $0.06 Weighted average shares outstanding: Basic 6,853,561 3,559,877 Diluted 10,548,354 3,945,922 DATASOURCE: Empire Financial Holding Company CONTACT: Donald A. Wojnowski Jr., President of Empire Financial Holding Company, +1-407-774-1300, or Fax, +1-407-830-5078,

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