	Page
About this Prospectus	ii
Industry and Market Data	ii
Implications of Being an Emerging Growth Company	ii
Prospectus Summary		1
The Offering		7
Summary Consolidated Financial and Other Data		9
Risk Factors		14
Special Note Regarding Forward-Looking Statements		34
Use of Proceeds		35
Dividend Policy		36
Capitalization		37
Dilution		38
Selected Consolidated Financial Data		39
Management’s Discussion and Analysis of Financial Condition and Results of Operations		43
Business		72
Management		99
Executive Compensation		106
Relationships and Related Transactions		115
Principal Stockholders		116
Description of Capital Stock		118
Material U.S. Federal Income and Estate Tax Considerations for Non-U.S. Holders		122
Shares Eligible for Future Sale		124
Underwriting		126
Legal Matters		131
Experts		131
Where You Can Find More Information		131
Index to Consolidated Financial Statements		F-1

In this prospectus, unless the context suggests otherwise, references to “C1 Financial,” “C1 Financial, Inc.,” the “Company,” “we,” “us” and “our” refer to C1 Financial, Inc., its subsidiaries, including its wholly owned subsidiary, C1 Bank and its predecessor CBM Florida Holding Company, and the “Bank” refers to C1 Bank, formerly known as the Community Bank of Manatee through February 2011 and Community Bank & Co. through April 2012.

You should rely only on the information contained in this prospectus. We and the underwriters have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock.

This prospectus describes the specific details regarding this offering and the terms and conditions of the common stock being offered hereby and the risks of investing in our common stock. You should read this prospectus, any free writing prospectus and the additional information about us described in the section entitled “Where You Can Find More Information” before making your investment decision.

Neither we, nor any of our officers, directors, agents or representatives or underwriters, make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus or any free writing prospectus to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock.

“C1 Bank” and its logos and other trademarks referred to in this prospectus including, A Bank by Entrepreneurs for Entrepreneurs™, Clients 1st™ and Clients 1st. Community 1st™ belong to us. Solely for convenience, we refer to our trademarks in this prospectus without the ™ symbol, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our trademarks. Other service marks, trademarks and trade names referred to in this prospectus are the property of their respective owners.

INDUSTRY AND MARKET DATA

This prospectus includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys, filings of public companies in our industry and internal company surveys. These sources include government and industry sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the industry and market data to be reliable as of the date of this prospectus, this information could prove to be inaccurate. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein.

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

As a company with less than $1.0 billion in gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of reduced regulatory and reporting requirements that are otherwise generally applicable to public companies. As an emerging growth company:

we may present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus;

we are exempt from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;

we are permitted to provide less extensive disclosure about our executive compensation arrangements; and

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we are not required to hold non-binding advisory votes on executive compensation or golden parachute arrangements.

We may take advantage of these provisions for up to five years unless we earlier cease to be an emerging growth company. We will cease to be an emerging growth company if we have more than $1.0 billion in annual gross revenues, have more than $700.0 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt in a three-year period. We may choose to take advantage of some but not all of these reduced regulatory and reporting requirements. We have elected to adopt the reduced disclosure requirements described above for purposes of the registration statement of which this prospectus is a part.

Following this offering, we may continue to take advantage of some or all of the reduced regulatory, accounting and reporting requirements that will be available to us as long as we continue to qualify as an emerging growth company. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. While we have elected to retain the ability to delay adopting new or revised accounting standards in the future, at June 30, 2014, December 31, 2013 and December 31, 2012, we had adopted all new accounting standards that could affect the comparability of our financial statements to those of other public entities.

iii

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including the “Risk Factors” section and the consolidated financial statements and the notes to those statements.

C1 Bank

Our name expresses our ideals to put our Clients 1st and our Community 1st. We are focused on serving the needs of entrepreneurs, tailoring a wide range of relationship banking services to entrepreneurs and their families, including commercial loans and a full line of depository products. We are based in St. Petersburg, Florida and operate from 28 banking centers and one loan production office on the West Coast of Florida and in Miami-Dade and Orange Counties. Now the 20th largest bank in the state of Florida by assets and the 19th largest by equity, having grown both organically and through acquisitions, we are near the top 1% of the fastest growing banks in the country as measured by asset growth, increasing assets from $260 million at December 31, 2009 to $1.4 billion at June 30, 2014.

Why Do Our Clients Bank with Us?

We are a Bank by Entrepreneurs for Entrepreneurs. We believe our team is comprised of people with deep relationships in the communities we serve, with fundamental market and product knowledge and people who can provide sophisticated business advice to Florida’s entrepreneurs. We believe that we care more and that we try harder and that’s why businesses across the state of Florida are switching to C1 Bank. We invest in technology, developing applications to enhance our relationships with our clients and to make us more productive.

We believe we are great at making loans that satisfy the unique needs of our clients. In 2013, we made $418 million in new loan commitments with a focus on businesses and entrepreneurs across the state of Florida. From a $250,000 SBA loan to a $30 million commercial loan — we have the knowledge, sophistication and desire to get deals done quickly and tailored to meet the specific needs of businesses and entrepreneurs.

We believe our deposit accounts are simple and fair. We offer two types of checking accounts for businesses, depending on their needs. Same for families — two easy choices (plus special accounts for seniors and for students). We have 28 banking centers in eight counties as well as online and mobile banking. We believe our fees are fair when we charge them. We even pay clients $5 per month for the first year they bank with us as opposed to our regional and money-center competitors who often charge $5 per month for checking accounts.

We are committed to the communities we serve. We are the Bank of the Tampa Bay Buccaneers, the Bank of the Outback Bowl, the Bank of the Tampa Bay Rowdies and a corporate partner of the Miami HEAT. We volunteer, we give back, and we are committed to being a good corporate citizen. The design of our banking centers is deliberate – saying something about who we are — modern, technology forward and relevant to the communities we serve.

We believe we treat our people right. Our culture is based on passion — for our clients, for technology, for productivity and for being the best at what we do. Recently, we announced an industry leading initiative to pay a living wage and full benefits to all of our employees. We believe that we do the right thing by our employees and that this allows us to attract and retain who we believe to be the very best banking employees.

Our History

While the Bank’s charter dates back to 1995, the modern history of the Bank began in December 2009, in the midst of the recession, when four investors, including our CEO, Trevor Burgess, made a significant recapitalizing investment in Community Bank of Manatee, a small five-branch traditional community bank based in Bradenton, Florida. These investors led the turnaround and transformation of the Bank by instituting the entrepreneurial and

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service-based culture the Bank enjoys today, changing the name to C1 Bank, and making the following successful strategic acquisitions of challenged Florida banks:

First Community Bank of America. On May 31, 2011, we acquired First Community Bank of America, or FCBA, for $10 million in cash, adding approximately $475 million in assets and 11 banking centers, raising our total assets to approximately $750 million and expanding our footprint to 17 locations covering the entire Tampa Bay region.

The Palm Bank. On May 31, 2012, we acquired The Palm Bank for $5.5 million in cash, adding approximately $117 million in assets and three banking centers taking us to 21 total locations and expanding our footprint in Tampa.

First Community Bank of Southwest Florida. On August 2, 2013, we assumed approximately $247 million in assets and all of the approximately $244 million in deposits of the failed First Community Bank of Southwest Florida from the Federal Deposit Insurance Corporation, or FDIC, as receiver. This transaction raised our total assets to approximately $1.3 billion, total deposits to approximately $1 billion, and total loans to approximately $900 million. Additionally, we acquired all seven of First Community Bank of Southwest Florida’s banking centers to expand our footprint further south on the West Coast of Florida into Fort Myers, Cape Coral and Bonita Springs.

These acquisitions immediately increased our scale and geographic footprint. We have realized significant synergies as a result of our initiatives to rapidly manage and reduce levels of problem assets, consolidate and improve systems and technology, hire and train key personnel, institute improved uniform lending practices and import our entrepreneurial and service-based culture to drive growth and customer satisfaction. We believe all of these actions, along with material organic growth, have successfully driven stockholder value.

Making It Happen at C1 Bank

We have achieved a number of exciting milestones since December 2009, including:

growing our total assets from $260 million at December 31, 2009 to $1.4 billion at June 30, 2014, a compound annual growth rate of 46%;

growing non-interest-bearing deposits from $17 million at December 31, 2009 to $253 million at June 30, 2014, a compound annual growth rate of 81%, while growing overall deposits from $219 million to $1.1 billion during the same timeframe, with a compound annual growth rate of 44%;

growing new loan origination from $84 million in 2010 to $142 million in 2011 to $202 million in 2012 to $418 million in 2013, which, combined with acquisitions, allowed us to grow our loans by 12%, 162%, 21% and 59%, respectively, during these periods;

capitalizing on the investment of our four lead investors who have personally invested nearly $70 million and have attracted approximately $35 million of additional capital to support the growth of the Bank since December 2009;

ranking number one among local banks by number of SBA loans in the Tampa Bay region in 2013 by maximizing our use of the SBA program as a way to boost return on equity for as many owner-occupied loans as possible;

hiring a differentiated management team with diverse knowledge and prior experience not typically seen at a community bank;

expanding into Miami beginning in January 2013 with a loan production office and then, in January 2014, opening our highly publicized first flagship banking center in Miami’s Wynwood Arts District. As of June 30, 2014, after approximately six months of operation, our Wynwood location had $74 million in deposits and a cost of funds of just 17 basis points, the lowest cost of funds of any banking center in our network;

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attracting and retaining the best talent by initiatives such as the community-focused introduction of a living-wage rate of pay for all full-time employees;

highlighting the recognition of our CEO, Trevor Burgess, who was named the 2013 Ernst & Young Florida Entrepreneur of the Year in the Financial Services Category;

establishing C1 Labs, a technology innovation group within the Bank and filing seven patent applications for financial technology products, which help increase productivity and improve our relationships with our clients;

winning the Coolest Office Space in Tampa Bay by the Tampa Bay Business Journal in recognition of our open plan, productivity and technology focused headquarters; and

opening on Main Street in Sarasota by taking a foreclosed property and making it into a flagship, design relevant, banking center.

C1 Market Areas

Our banking operations are concentrated in three of the top six MSAs in the Southeast by population and the three largest business markets in Florida: Tampa Bay, Miami-Dade and Orlando. Our Florida market includes our headquarters in St. Petersburg and 28 banking centers and one loan production office which are located in Pinellas, Hillsborough, Lee, Manatee, Charlotte, Miami-Dade, Pasco, Sarasota and Orange counties. We have chosen to operate in these markets because we believe they will continue to exhibit higher growth rates than other markets across the state.

We have successfully executed our growth initiative through strategic acquisitions and organic growth. Our acquisitions of FCBA, The Palm Bank and First Community Bank of Southwest Florida strengthened our presence in our existing markets, while growing our franchise in surrounding counties. Our recent entry into the Miami-Dade market provides us a platform to further expand into this highly populated market, which is home to many small businesses and entrepreneurs. We entered the Miami-Dade market with a loan production office in January 2013 and were able to originate $154 million in loans in our first year. In January 2014, we closed the loan production office and opened our first Miami banking center with a highly differentiated look and feel in Miami’s Wynwood Arts District. We opened a loan production office in Orlando in June 2014 and hired our first full-time commercial lender focused on that market, aiming to replicate our successful Miami strategy.

The following table shows demographic information for our market areas and highlights Florida’s rapid growth compared to the United States as a whole.

Metropolitan Statistical Area	Total Population 2014 (Actual)		Population Change 2010-2014 (%)		Projected Population Change 2014-2019 (%)		Median Household Income 2014 ($)		Projected Household Income Change 2014-2019 (%)
Tampa-St Petersburg-Clearwater		2,886,350		3.70		5.05		43,838		5.22
Cape Coral-Fort Myers		664,763		7.44		8.09		45,237		5.10
North Port-Sarasota-Bradenton		735,292		4.70		5.92		44,770		3.22
Punta Gorda		167,264		4.55		5.82		40,945		2.79
Miami-Fort Lauderdale-West Palm Beach		5,860,668		5.32		6.44		44,967		4.10
Orlando-Kissimmee-Sanford		2,277,414		6.70		7.48		45,240		2.81
Florida		19,654,457		4.54		5.74		44,318		3.82
United States		317,199,353		2.74		3.50		51,579		4.05

Sources: SNL Financial; Bureau of Labor Statistics.

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Our Competitive Strengths

Entrepreneurial approach to banking. Entrepreneurial spirit is paramount to our culture. We focus on hiring and training sophisticated bankers who can be trusted advisors to our business clients in stark contrast to what we believe to be the impersonal, transactional approach of many of our competitors. We seek to establish long-term relationships with our clients so that we can customize loans to meet the needs of these entrepreneurs. Fast, local decision making and certainty of execution further differentiate our approach and give us the ability to charge a competitive, yet premium yield on our new loans. By focusing on entrepreneurial clients, we further refine our ability to provide sophisticated and tailored services, which many of our competitors are unable to match. We focus on growing core deposits from businesses and individuals through our extensive banking center network and via our new proprietary technologies, such as our iPad account opening software. At our headquarters we have no individual offices and no secretaries in order to emphasize the importance of productivity, collaboration, speed, the use of technology, and client focus. We have also developed a Management Associate Program in partnership with the University of South Florida to attract and develop the future leaders of the Bank.

Well positioned in a growing and attractive market. The state of Florida is the fourth fastest growing state in the United States. In 2013 alone, Florida’s population increased by over 230,000 people. Its population has grown from 12.9 million in 1990 to 19.2 million in 2013 and is expected to approach 21 million by 2020. This growth generates job creation, commercial development and housing starts. Our operations are focused in the Tampa Bay area with 27 banking centers in seven contiguous counties along the West Coast of Florida. In addition, we recently opened our first banking center in Miami-Dade, one of the fastest growing market in the state, and have three more banking centers planned to open in Miami-Dade by the end of 2015. We believe our demonstrated ability to successfully grow and our focus on entrepreneurs will give us a competitive advantage in these growing markets.

Differentiated brand positioning. We actively work to position our brand to attract entrepreneurs in four ways. First, we have been able to capture the press and the public’s attention through an aggressive public relations strategy. Second, we are deeply involved in the communities in which we serve, which increases our local market knowledge, grows our relationships with members of the local business community and increases awareness of our brand. Third, we use sports marketing to entertain thousands of existing and potential clients each year and to increase brand awareness and strengthen relationships with existing and potential clients. Fourth, we are focused on a highly differentiated modern and technology-forward design for our banking centers and our headquarters, which makes us stand out from our more traditional, mahogany-laden competitors.

Long-term risk mitigation focus. Our directors and management have invested a material portion of their net worth in the Bank and as a result are acutely focused on risk mitigation and cost discipline. Our experience of turning around four troubled banks was extremely valuable in developing broad risk-mitigation policies and procedures. Having foreclosed on hundreds of loans, we learned a lot about the mistakes made by banks in Florida. We make many decisions to benefit long-term risk reduction, even at the expense of short-term gain, such as:

we seek a lower risk profile by actively managing our assets and liabilities. We focus on limiting fixed-rate loans to five years or less and more than 60% of our loans have some variable rate component. We continue to grow core deposits and use Certificates of Deposit and Federal Home Loan Bank, or FHLB, borrowings to extend fixed-rate liabilities. For example, our FHLB borrowings have an average weighted maturity of 36 months as of June 30, 2014;

we primarily require properly margined real estate to secure our business loans;

we have a complete separation between the lending and credit departments with no individual lending authority at the Bank. All loans over $1 million require consensus of all members of our loan committee; and

we liquidated our securities portfolio in 2013 to eliminate mark-to-market interest rate risk in a rising rate environment. Our liquidity therefore largely consists of cash, greatly reducing risk while increasing flexibility to fund loan demand.

Innovative approach to technology. We established C1 Labs as a group of bank employees focused on developing proprietary technology to improve our productivity and enhance our client relationships. For example, our iPad account opening software allows our bankers to open accounts more quickly and accurately than the

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traditional branch-based method. This software and technology also enables us to open accounts at a client’s office or place of business, or at our banking centers, in under three minutes. In addition, we have an internal tool that empowers our client managers to price loans in real time, in field with a pre-approved, risk-adjusted return-on-equity calculator. With over 3,000 simulations run to date by lenders, this tool allows us to measure incremental risk-adjusted return on equity as well as more closely tie compensation to performance. We believe our technology offers our clients a unique and convenient banking experience that is not available at traditional community banks, which will help drive future loan and deposit growth in the markets we serve. Furthermore, we believe our investments in our technology infrastructure will enable us to support our future growth and reduce long-term operational costs.

We have filed seven non-provisional patent applications in the United States and intend to file additional patent applications on these technologies and others we have in development. We are also exploring the opportunity of licensing these technologies to third parties.

Our Business Strategy

Our strategy is to “care more and try harder.” We strive to enhance stockholder value by:

Growing organically to leverage our brand awareness and expand our loan and deposit market share in Florida, particularly in the high-growth Tampa Bay and Miami-Dade markets by:

growing relationships with new clients and enhancing existing relationships by hiring and retaining client managers with deep community ties, deep subject matter expertise and the sophistication to offer valuable business advice and creative solutions to meet the needs of our clients;

opening new banking centers including three in Miami-Dade and one on the West Coast of Florida by the end of 2015;

opening a loan production office in Orlando in June 2014, expanding into one of the fastest growing markets in Florida and the third largest business market after Miami-Dade and Tampa; and

hiring, training, and equipping best-in-class client managers to serve the needs of Florida’s entrepreneurs.

Increasing profitability and improving efficiency to increase our return on equity and return on assets by:

capitalizing on our established infrastructure to realize economies of scale. Our average assets per employee, for example, have grown from $4.6 million in 2012 to $6.6 million in the first half of 2014 (a metric we intend to continue to increase);

continuing to invest in technology to drive productivity; and

resolving problem loans and selling foreclosed-upon property from acquired banks to reduce costs and to allow those assets to be redeployed into profitable new loans. We work to maximize the outcome of these classified assets by focusing on the recovery of all amounts due under the law including through the collection of deficiency judgments.

Completing strategic acquisitions by building on our track record of successfully acquiring and integrating community banks as follows:

analyzing opportunities for acquisition, especially among the 141 Florida banks with less than $750 million in assets at June 30, 2014, 120 of which are located in our target markets outside of the panhandle. We believe these banks are good targets either because of scale or operational challenges, regulatory pressure, management succession issues or stockholder liquidity needs;

targeting community banks in our existing markets or in adjacent growth regions of Florida such as the I-4 corridor, Orlando and south Florida; and

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using the Wall Street experience and background of our CEO and fellow investors in negotiating and structuring acquisitions to increase the overall value of our franchise.

Risks to Consider

Before investing in our common stock, you should carefully consider all the information in this prospectus, including matters set forth under the heading “Risk Factors.” These risks include, among others, the following:

the geographic concentration of our markets makes our business highly susceptible to downturns in the local economies and depressed banking markets, which could be detrimental to our financial condition;

we are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance;

a return of recessionary conditions could result in increases in our level of nonperforming loans and/or reduce demand for our products and services, which could have an adverse effect on our results of operations;

we are currently exempt from certain corporate governance requirements since we are a “controlled company” within the meaning of NYSE rules and, as a result, you will not have the protections afforded by these corporate governance requirements;

we are subject to extensive state and federal financial regulation, and compliance with changing requirements may restrict our activities or have an adverse effect on our results of operations;

our financial performance will be negatively impacted if we are unable to execute our growth strategy; and

the loss of any member of our management team and our inability to make up for such loss with a qualified replacement could harm our business.

Corporate Information

We were incorporated in the state of Florida on July 2, 2013. On December 19, 2013, the Bank’s primary stockholder, CBM Florida Holding Company, or CBM, merged with the Company. Our operations are conducted through C1 Bank which was founded in 1995 under the name Community Bank of Manatee. Our principal executive offices are located at 100 5th Street South, St. Petersburg, Florida, 33701 and our telephone number is (877) 266-2265. We also maintain an Internet site at www.c1bank.com. Our website and the information contained therein or connected thereto is not incorporated into this prospectus or the registration statement of which it forms a part.

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THE OFFERING

Common stock offered	shares
Common stock to be outstanding after this offering	shares
Over-allotment option	shares
Voting rights	One vote per share
Use of proceeds	We estimate that the net proceeds to us from this offering will be approximately $ million, or approximately $ million if the underwriters exercise their over-allotment option in full, assuming an initial public offering price of $ per share (the midpoint of the range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses. Each $1 increase (decrease) in the initial public offering price per share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions, by $ million (assuming no exercise of the underwriters’ over-allotment option). We intend to use the net proceeds of this offering for working capital and other general corporate purposes, including to finance our expected growth, fund capital expenditures, or expand our existing business through investments in or acquisitions of other business, although at present we do not have any current plans, arrangements or understandings to make any material capital investments or make any material acquisitions.
Dividend policy	We currently do not intend to pay dividends on our common stock. We plan to retain any earnings for use in the operation of our business and to fund future growth. See “Dividend Policy.”
Directed share program	The underwriters have reserved for sale at the initial public offering price up to 5% of the common stock being offered by this prospectus for sale to certain of our employees, executive officers, directors, business associates and related persons who have expressed an interest in purchasing our common stock in the offering. Except as described under “Executive Compensation—IPO Bonuses”, we do not know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. See “Underwriting.”
NYSE listing	We have applied to list our common stock on the New York Stock Exchange under the trading symbol “BNK.”
Risk factors	Investing in our common stock involves risks. Please see the section entitled “Risk Factors” as well as

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other cautionary statements throughout this prospectus, before investing in shares of our common stock.

Unless we specifically state otherwise, the information in this prospectus does not take into account (i) the 7 for 1 reverse stock split that we intend to effectuate simultaneously upon the execution of an underwriting agreement in connection with this offering and (ii) the issuance of up to shares of common stock that the underwriters have the option to purchase from C1 Financial solely to cover over-allotments. If the underwriters exercise their over-allotment option in full, shares of common stock will be outstanding after this offering.

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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The following table sets forth our summary consolidated financial data (i) as of and for the six-month period ended June 30, 2014 and 2013 and (ii) as of and for the years ended December 31, 2013 and 2012. The summary consolidated financial data as of and for the years ended December 31, 2013 and 2012 has been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated financial data as of and for the six-month period ended June 30, 2014 and 2013 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The summary consolidated financial and other data does not reflect the 7 for 1 reverse stock split that we intend to effectuate simultaneously upon the execution of an underwriting agreement in connection with this offering. The unaudited consolidated financial statements include all of our accounts, including the accounts of the Bank, and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair presentation of our financial position, results of operations and cash flows for the dates and periods presented.

The Bank acquired FCBA, The Palm Bank and First Community Bank of Southwest Florida on May 31, 2011, May 31, 2012 and August 2, 2013, respectively. Our consolidated financial statements include the financial position, results of operations and cash flows of these acquired banks as of June 1, 2011, June 1, 2012 and August 3, 2013, respectively. Consequently, our results of operations for these periods are not fully comparable.

You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization,” “Management’s Discuss and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our historical consolidated financial data may not be indicative of our future performance.

	As of and for Six- Month Period Ended June 30,				As of and for Years Ended December 31,
	2014		2013		2013		2012
	(in thousands, except per share data and ratios)
Statement of Income Data
Interest income	$	30,907	$	19,857	$	48,499	$	38,201
Interest expense		4,164		2,857		6,650		6,127
Net interest income		26,743		17,000		41,849		32,074

Provision for loan losses		4,608		15		1,218		2,358
Bargain purchase gain		11		—		13,462		6,235
Gain (loss) on sale of securities		241		576		305		3,035
Total noninterest income		4,387		3,063		21,648		15,051
Total noninterest expense		21,947		18,555		42,637		33,963
Income before income taxes		4,575		1,493		19,642		10,804
Income tax expense (benefit)		1,819		567		7,652		(2,304	)
Net income		2,756		926		11,990		13,108

Per Share Outstanding Data
Net earnings (loss) per share	$	0.03	$	0.01	$	0.15	$	0.18
Diluted net earnings (loss) per share		0.03		0.01		0.15		0.18
Common shares outstanding at year or period end (000s)		93,379		78,299		85,519		74,541
Diluted shares outstanding (000s)		93,379		78,520		85,629		74,806
Book value per share	$	1.50	$	1.29	$	1.42	$	1.29
Tangible book value per share		1.49		1.28		1.40		1.29

Balance Sheet Data
Cash and due from banks	$	258,944	$	208,753	$	143,452	$	77,038
Securities available for sale		—		—		—		109,423
Loans receivable, gross		1,062,701		724,811		1,053,029		663,634
Loans originated by C1 Bank (Nonacquired)		665,615		400,365		614,613		301,858
Loans acquired(1)		397,086		324,446		438,416		361,776
Total assets		1,449,214		1,031,699		1,323,371		938,066
Total deposits		1,135,451		789,345		1,041,043		760,041
Borrowings		168,500		136,500		153,500		78,300

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	As of and for Six- Month Period Ended June 30,						As of and for Years Ended December 31,
	2014			2013			2013			2012
	(in thousands, except per share data and ratios)
Total liabilities		1,309,023			930,502			1,201,557			841,619
Total stockholders’ equity		140,191			101,197			121,814			96,447
Tangible stockholders’ equity		138,752			100,743			120,080			95,828

Capital Ratios
Total capital to risk-weighted assets		12.42	%		12.99	%		10.97	%		12.54	%
Tier 1 capital to risk-weighted assets		11.98	%		12.48	%		10.62	%		12.03	%
Tier 1 capital to average assets		9.72	%		9.92	%		9.36	%		10.18	%
Tier 1 leverage ratio		9.73	%		9.94	%		9.36	%		10.21	%
Tangible Common Equity / Tangible Assets		9.58	%		9.77	%		9.09	%		10.22	%
Equity / Assets		9.67	%		9.81	%		9.20	%		10.28	%

Asset Quality Ratios
Total non-performing loans to loans receivable		2.02	%		2.33	%		2.26	%		3.51	%
Total non-performing assets to total assets		3.98	%		3.58	%		4.90	%		4.51	%
Total allowance for loan losses to non-performing loans		21.41	%		16.54	%		14.35	%		12.07	%
Net charge-offs (recoveries) to total loans		0.65	%		0.01	%		0.08	%		0.88	%
Nonacquired net charge-offs (recoveries) to total nonacquired loans		1.27	%		0.00	%		0.00	%		0.02	%
Allowance for loan losses to total loans		0.43	%		0.39	%		0.32	%		0.42	%
Allowance for loan losses to nonacquired loans		0.69	%		0.70	%		0.56	%		0.93	%

Nonperforming Assets
Nonacquired non-performing assets	$	507		$	710		$	737		$	47
Nonaccrual loans		463			663			693			—
OREO(2)		44			47			44			47
Nonacquired restructured loans		—			—			64			—
Nonacquired non-performing assets to nonacquired loans plus OREO		0.08	%		0.18	%		0.12	%		0.02	%
Acquired non-performing assets	$	57,225		$	36,228		$	64,094		$	42,296
Nonaccrual loans		20,990			16,231			23,089			23,315
OREO		36,234			19,997			41,005			18,980
Acquired restructured loans(3)		921			948			916			2,124
Acquired non-performing assets to acquired loans plus OREO		13.21	%		10.52	%		13.37	%		11.11	%

Loan Composition
Acquired loans by type:(1)
Owner occupied CRE	$	118,854		$	102,662		$	132,834		$	108,971
Non owner occupied CRE		98,705			55,926			104,130			60,151
C&I		26,840			23,774			29,707			29,719
C&D		21,092			14,704			24,049			22,097
1-4 family		110,548			101,022			119,846			108,058
Multifamily		6,437			9,662			9,212			12,326
Secured by farmland		5,584			5,483			7,859			7,492
Consumer and other		9,026			11,213			10,779			12,962

Nonacquired Loans by Type
Owner occupied CRE		97,458			63,478			71,662			47,109
Non owner occupied CRE		240,886			130,167			201,225			112,987
C&I		55,031			72,313			55,804			37,109
C&D		52,238			28,089			66,925			37,322
1-4 family		94,675			42,026			76,392			43,592

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	As of and for Six- Month Period Ended June 30,						As of and for Years Ended December 31,
	2014			2013			2013			2012
	(in thousands, except per share data and ratios)
Multifamily		26,295			20,516			46,829			3,219
Secured by farmland		60,179			18,910			62,487			14,176
Consumer and other		38,853			24,866			33,289			6,344
New loan origination(4)		208,222			133,965			417,567			202,189
Yield on loans		5.80	%		5.67	%		5.83	%		5.78	%
Adjusted yield on loans(5)		5.60	%		5.50	%		5.59	%		5.44	%

Deposit Composition
Demand	$	253,148		$	145,265		$	194,383		$	108,862
NOW		140,939			124,469			138,765			131,562
Money market and savings		383,259			306,404			362,591			277,775
Retail time		330,832			195,793			319,780			218,108
Jumbo time(6)		27,273			17,414			25,524			23,734
Cost of deposits		0.55	%		0.56	%		0.55	%		0.70	%
Adjusted cost of deposits(7)		0.56	%		0.63	%		0.59	%		0.80	%

Selected Performance Metrics
ROAA		0.40	%		0.19	%		1.08	%		1.50	%
ROAE		4.14	%		1.90	%		11.43	%		15.63	%
Net interest margin (NIM)		4.31	%		4.06	%		4.31	%		4.03	%
Adjusted NIM(8)		4.10	%		3.79	%		4.02	%		3.60	%
Efficiency ratio		71.1	%		95.2	%		67.5	%		76.9	%
Yield on loans		5.80	%		5.67	%		5.83	%		5.78	%
Cost of deposits		0.55	%		0.56	%		0.55	%		0.70	%

(1)

Loans not originated under C1 Bank (including loans originated by Community Bank of Manatee before the recapitalization by the four investors in December 2009 and those acquired from First Community Bank of America, The Palm Bank and First Community Bank of Southwest Florida).

(2)

OREO means other real estate owned.

(3)

Restructured loans include accruing and nonaccrual troubled debt restructurings. Nonaccrual restructured loans are included in Nonaccrual loans. Acquired restructured loans include restructurings from Community Bank of Manatee only. Restructured loans acquired from First Community Bank of America, The Palm Bank and First Community Bank of Southwest Florida were considered Purchased Credit Impaired loans.

(4)

Represents new loan commitments during the periods presented.

(5)

Excludes loan accretion from the acquired loan portfolio.

(6)

Jumbo time deposits include deposits over $250 thousand.

(7)

Excludes amortization of premium for acquired time deposits.

(8)

Excludes loan accretion from the acquired loan portfolio and amortization of premiums for acquired time deposits and Federal Home Loan Bank advances.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

Some of the financial measures included in our selected consolidated financial and other data are not measures of financial performance recognized by GAAP. These non-GAAP financial measures include “adjusted yield on loans,” “adjusted cost of deposits,” “adjusted net interest margin,” “tangible stockholders’ equity,” “tangible book value per share,” “tangible common equity to tangible assets,” and “efficiency ratio.” Our management uses these non-GAAP financial measures in its analysis of our performance:

“Adjusted yield on loans” is our yield on loans after excluding loan accretion from our acquired loan portfolio. Our management uses this metric to better assess the impact on purchase accounting over yield on loans, as the effect of loan discounts accretion is expected to decrease as the acquired loans roll off of our balance sheet.

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“Adjusted cost of deposits” is our cost of deposits after excluding amortization of premium for acquired time deposits. Our management uses this metric to better assess the impact on purchase accounting over cost of deposits, as the effect of amortization of premium related to deposits is expected to decrease as the deposits mature or roll off of our balance sheet.

“Adjusted net interest margin” is net interest margin after excluding loan accretion from the acquired loan portfolio and amortization of premiums for acquired time deposits and Federal Home Loan Bank advances. Our management uses this metric to better assess the impact on purchase accounting over net interest margin, as the effect of loan discounts accretion and amortization of premium related to deposits or borrowing is expected to decrease as the acquired loans and deposits mature or roll off of our balance sheet.

“Tangible stockholders’ equity” is stockholders’ equity less goodwill and other intangible assets. We have not considered loan servicing rights as an intangible asset for purposes of this calculation.

“Tangible book value per share” is defined as total equity reduced by goodwill and other intangible assets divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets. We have not considered loan servicing rights as an intangible asset for purposes of this calculation.

“Tangible average equity to tangible average assets” is defined as the ratio of average stockholders’ equity less average goodwill and average other intangible assets, divided by average total assets less average goodwill and average other intangible assets. This measure is important to investors interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets. We have not considered average loan servicing rights as an intangible asset for purposes of this calculation.

“Efficiency ratio” is defined as total noninterest expense divided by the sum of net interest income and noninterest income. This measure is important to investors looking for a measure of efficiency in the Company’s productivity measured by the amount of revenue generated for each dollar spent.

We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. The following reconciliation table provides a more detailed analysis of these non-GAAP financial measures:

	As of and for Six-Month Period Ended June 30,						As of and for Years Ended December 31,
	2014			2013			2013			2012
	(in thousands, except per share data and ratios)
Reported yield on loans		5.80	%		5.67	%		5.83	%		5.78	%
Effect of accretion income on acquired loans		0.20	%		0.17	%		0.24	%		0.34	%
Adjusted yield on loans		5.60	%		5.50	%		5.59	%		5.44	%


Reported cost of deposits		0.55	%		0.56	%		0.55	%		0.70	%
Effect of premium amortization on acquired time deposits		(0.01	%)		(0.07	%)		(0.04	%)		(0.10	%)
Adjusted cost of deposits		0.56	%		0.63	%		0.59	%		0.80	%


Reported net interest margin		4.31	%		4.06	%		4.31	%		4.03	%
Effect of accretion income on acquired loans		0.16	%		0.14	%		0.19	%		0.26	%
Effect of premium amortization on acquired time deposits and borrowings		0.05	%		0.13	%		0.10	%		0.17	%
Adjusted net interest margin		4.10	%		3.79	%		4.02	%		3.60	%

Total stockholders’ equity	$	140,191		$	101,197		$	121,814		$	96,447

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	As of and for Six-Month Period Ended June 30,						As of and for Years Ended December 31,
	2014			2013			2013			2012
	(in thousands, except per share data and ratios)
Less:
Goodwill		249			249			249			249
Other intangible assets		1,190			205			1,485			370
Tangible stockholders’ equity		138,752			100,743			120,080			95,828
Shares outstanding (000s)		93,379			78,299			85,519			74,541
Tangible book value per share		1.49			1.28			1.40			1.29
Average assets		1,403,018			969,586			1,107,798			870,202
Average equity		134,127			98,293			104,919			83,624
Average equity to average assets		9.56	%		10.14	%		9.47	%		9.61	%
Average goodwill and other intangible assets		1,595			538			972			459
Tangible average equity to tangible average assets		9.46	%		10.09	%		9.38	%		9.56	%

Efficiency ratio
Noninterest expense		21,947			18,555			42,637			33,963
Net interest taxable equivalent income		26,743			17,000			41,849			32,164
Noninterest taxable equivalent income (loss)		4,387			3,063			21,648			15,051
Less gain (loss) on sale of securities		241			576			305			3,035
Adjusted operating revenue		30,889			19,487			63,192			44,180
Efficiency ratio		71.1	%		95.2	%		67.5	%		76.9	%

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RISK FACTORS

You should carefully consider the following risks and all of the other information set forth in this prospectus before deciding to invest in shares of our common stock. If any of the following risks actually occurs, our business, financial condition or results of operations would likely suffer. In such case, the trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

Risks Relating to Our Business

The geographic concentration of our markets makes our business highly susceptible to downturns in the local economies and depressed banking markets, which could be detrimental to our financial condition.

Unlike larger financial institutions that are more geographically diversified, we are a banking franchise concentrated in the state of Florida. As of June 30, 2014, approximately 91% of the loans in our loan portfolio were made to borrowers who live and/or conduct business in Florida. Deterioration in local economic conditions in the loan market or in the commercial or industrial real estate market could have a material adverse effect on the quality of our portfolio by eroding the loan-to-value ratio of our portfolio, the demand for our products and services, the ability of borrowers to timely repay loans, the value of the collateral securing loans and our financial condition, results of operations and future prospects. In addition, if the population or income growth in the region is slower than projected, income levels, deposits and real estate development could be adversely affected and could result in the curtailment of our expansion, growth and profitability. If any of these developments were to result in losses that materially and adversely affected the Bank’s capital, we might be subject to regulatory restrictions on operations and growth and to a requirement to raise additional capital.

We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.

We are a community bank, and our reputation is one of the most valuable components of our business. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates. If our reputation is negatively affected, by the actions of our employees or otherwise, our business and, therefore, our operating results may be materially adversely affected.

A return of recessionary conditions could result in increases in our level of nonperforming loans and/or reduced demand for our products and services, which could have an adverse effect on our results of operations.

Economic growth has been slow and uneven, and unemployment levels remain high. Recovery by many businesses has been impaired by lower consumer spending. A return to prolonged deteriorating economic conditions and/or continued negative developments in the domestic and international credit markets could significantly affect the ability of our customers to operate, the markets in which we do business, the value of our loans and investments, and our ongoing operations, costs and profitability. These events may cause us to incur losses and may adversely affect our financial condition and results of operations.

Our allowance for loan losses and fair value adjustments may prove to be insufficient to absorb losses for our loans that we originated or acquired.

Lending money is a substantial part of our business and each loan carries a certain risk that it will not be repaid in accordance with its terms or that any underlying collateral will not be sufficient to assure repayment. This risk is affected by, among other things:

cash flow of the borrower and/or the project being financed;

the changes and uncertainties as to the future value of the collateral, in the case of a collateralized loan;

the duration of the loan;

the discount on the loan at the time of acquisition, if acquired;

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the credit history of a particular borrower; and

changes in economic and industry conditions.

As of June 30, 2014, December 31, 2013 and December 31, 2012 the allowance for loan losses was $4.6 million, $3.4 million and $2.8 million, respectively. Non-performing loans totaled $21.5 million, $23.8 million and $23.3 million as of June 30, 2014, December 31, 2013 and December 31, 2012, respectively. This total is large for a bank of our size and is primarily the result of our acquisition of several troubled banks. The amount of our allowance for loan losses for these non-performing loans is determined by our management team through periodic reviews. As most non-performing loans are related to acquired banks, they were marked to market and recorded at fair value at acquisition with no carryover of the allowance for loan losses. Therefore, our allowance for loan losses mainly reflects the general component allowance for performing loans.

Like all banks, we have developed and applied a methodology for determining, based upon a number of factors – including, for example, historical loss rates and assumptions regarding future losses – the appropriate level of allowance to maintain in respect of possible loan losses. In applying this methodology and determining the appropriate level of the allowance, we inherently face a high degree of subjectivity and are required to make significant estimates of current credit risks and future trends, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans that we originate, identification of additional problem loans originated by us and other factors, both within and outside of our control, may require an increase in the allowance for loan losses. In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for probable loan losses or the recognition of further loan charge-offs, based on judgments different than those of management. In addition, if charge-offs in future periods exceed the allowance for loan losses, we will need additional provisions to increase the allowance for loan losses. Any increases in the allowance for loan losses will result in a decrease in net income and capital and may have a material adverse effect on our financial condition and results of operations. Furthermore, if our methodology or assumptions in determining our allowance for loan losses are not sound, then our allowance for loan losses will not be sufficient to cover our loan losses. See Note 1. Summary of Significant Accounting Policies and Note 5. Loans to our Consolidated Financial Statements for further information about this estimate and our methodology.

Given our limited history and significant portfolio growth, many of the loans originated by C1 Bank may be unseasoned, meaning that many of the loans were originated relatively recently. In particular, as of June 30, 2014, we had $1,063 million in loans outstanding. Approximately 63% of these loans, or $666 million, had been originated by C1 Bank since 2010. Our limited experience with these loans does not provide us with a significant payment history pattern with which to judge future collectability. As a result, it may be difficult to predict the future performance of our loan portfolio. These loans may have delinquency or charge-off levels above our expectations, which could negatively affect our performance.

Our financial performance will be negatively impacted if we are unable to execute our growth strategy.

Our current growth strategy is to grow organically and supplement that growth with select acquisitions. Our ability to grow organically depends primarily on generating loans and deposits of acceptable risk and expense, and we may not be successful in continuing this organic growth. Our ability to identify appropriate markets for expansion, recruit and retain qualified personnel, and fund growth at a reasonable cost, depends upon prevailing economic conditions, maintenance of sufficient capital, competitive factors and changes in banking laws, among other factors. Conversely, if we grow too quickly and are unable to control costs and maintain asset quality, such growth, whether organic or through select acquisitions, could materially and adversely affect our financial condition and results of operations.

The institutions we have acquired, and may acquire in the future, have high levels of distressed assets and we may not be able to realize the value we predict from these assets or accurately estimate the future write-downs taken in respect of these assets.

Delinquencies and losses in the loan portfolios and other assets of financial institutions that we have acquired, and may acquire in the future, may exceed our initial forecasts developed during the due diligence investigation prior to acquiring those institutions. Even if we conduct extensive due diligence on an entity we decide to acquire, this diligence may not reveal all material issues that may affect that particular entity. The diligence process in FDIC-assisted transactions is also expedited due to the short acquisition timeline that is typical for these depository

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institutions. If, during the diligence process, we fail to identify issues specific to an entity or the environment in which the entity operates, we may be forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in other reporting losses. Moreover, the process of resolving the problem assets that we have acquired takes a significant amount of time. Throughout this process, such problem assets are subject to regular reappraisals, which could lead to write-offs or require us to establish additional allowance for loan losses. Any of these events could adversely affect the financial condition, liquidity, capital position and value of institutions we acquire and of the Company as a whole.

Changes in interest rates could have significant adverse effects on our financial condition and results of operations.

Fluctuations in interest rates could have significant adverse effects on our financial condition and results of operations. We are unable to predict changes in market interest rates, which are affected by many factors beyond our control, including inflation, recession, unemployment, money supply, domestic and international events and changes in financial markets in the United States and in other countries. Our net interest income is affected not only by the level and direction of interest rates, but also by the shape of the yield curve and relationships between interest-sensitive instruments and key driver rates, as well as balance sheet growth, client loan and deposit preferences and the timing of changes in these variables. In an environment in which interest rates are increasing, our interest costs on liabilities may increase more rapidly than our income on interest-earning assets. This could result in a deterioration of our net interest margin.

Liquidity risk could impair our ability to fund operations and jeopardize our financial condition.

Liquidity is essential to our business. Our loan-to-deposit ratio, calculated by dividing our total loans by our total deposits, exceeds 90% at June 30, 2014. A higher loan-to-deposit ratio generally means that a financial institution might not have enough liquidity to cover any unforeseen requirements or that the institution is more reliant on borrowings that may no longer be available.

An inability to raise funds through deposits, borrowings, and other sources could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities on terms that are acceptable to us could be impaired by factors that affect us specifically, the financial services industry, or economy in general. Factors that could negatively impact our access to liquidity sources include a decrease of our business activity as a result of a downturn in the markets in which our loans are concentrated, adverse regulatory action against us, or our inability to attract and retain deposits. Our ability to borrow could be impaired by factors that are not specific to us, such as a disruption in the financial markets and diminished expectations or growth in the financial services industry.

Our funding sources may prove insufficient to replace deposits and support our future growth.

We rely on customer deposits, advances from the FHLB, nationally marketed CDs, brokered CDs and lines of credit at other financial institutions to fund our operations. Although we have historically been able to replace maturing deposits and advances if desired, we may not be able to replace such funds in the future if our financial condition, the financial condition of the FHLB or market conditions were to change. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates. Finally, if we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In this case, our profitability would be adversely affected.

FHLB borrowings and other current sources of liquidity may not be available or, if available, sufficient to provide adequate funding for operations. Furthermore, our own actions could result in a loss of adequate funding. For example, our availability at the FHLB could be reduced if we are deemed to have poor documentation or processes. Accordingly, we may seek additional higher-cost debt in the future to achieve our long-term business objectives. Additional borrowings, if sought, may not be available to us or, if available, may not be available on favorable terms. If additional financing sources are unavailable or are not available on reasonable terms, our growth and future prospects could be adversely affected.

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Our loan portfolio includes unsecured, commercial, real estate, consumer and other loans that may have higher risks, and we currently exceed the regulatory guidelines for commercial real estate loans.

Our commercial real estate, residential real estate, construction, commercial, and consumer and other loans at June 30, 2014, were $654.4 million, $205.2 million, $73.3 million, $81.9 million, and $47.9 million, respectively, or 61.6%, 19.3%, 6.9%, 7.7%, and 4.5%, respectively, of our total loans. We have a high concentration of commercial real estate loans that exceeds guidance by the bank regulators. At June 30, 2014, December 31, 2013 and December 31, 2012 our ratio for construction, development and other land loans to total capital was 51%, 73%, and 61% respectively, compared to the FDIC guideline of 100%, while the ratio for commercial real estate loans (including construction, development and other land loans and loans secured by multi-family and non-owner occupied nonfarm nonresidential property) to total capital was 310%, 365% and 254% respectively, compared to the FDIC guideline of 300%.

The increase at December 31, 2013 resulted from the acquisition of First Community Bank of Southwest Florida that was completed in August 2013. In 2013, our board of directors authorized us to operate at up to 400% of total risk-based capital for commercial real estate loans until December 2014, at which time we will analyze market conditions and likely extend this authorization.

Commercial loans and commercial real estate loans generally carry larger balances and can involve a greater degree of financial and credit risk than other loans. As a result, banking regulators continue to give greater scrutiny to lenders with a high concentration of commercial real estate loans in their portfolios, such as us, and such lenders are expected to implement stricter underwriting standards, internal controls, risk management policies, and portfolio stress testing, as well as higher capital levels and loss allowances. The increased financial and credit risk associated with these types of loans are a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the size of loan balances, the effects of general economic conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. During the recent economic downturn, financial institutions with high commercial real estate loan concentrations were more susceptible to failure. If we cannot effectively manage the risk associated with our high concentration of commercial real estate loans, our financial condition and results of operations may be adversely affected.

The nature of our commercial loan portfolio may expose us to increased lending risks.

We make both secured and unsecured commercial loans. Secured commercial loans are generally collateralized by real estate, accounts receivable, inventory, equipment or other assets owned by the borrower and include a personal guaranty of the business owner. Unsecured loans generally involve a higher degree of risk of loss than do secure loans because, without collateral, repayment is wholly dependent upon the success of the borrowers’ businesses. Because of this lack of collateral, we are limited in our ability to collect on defaulted unsecured loans.

We are subject to risks associated with loans to Brazilian companies.

We currently have four loans to three Brazilian borrowers, with aggregate outstanding balances at June 30, 2014, December 31, 2013 and 2012 of $46.5 million, $46.4 million and $22.7 million, respectively. The collateral for these loans is held in Brazil and consists primarily of real estate. Two of the loans are secured by a first lien on farmland appraised at $80.8 million, another loan is secured by a first lien on farmland appraised at $79.5 million and the last loan is secured by closely held stock. There is inherent country risk associated with this international business. International trade laws, U.S. relations with Brazil, foreign exchange volatility, the foreign nature of the Brazilian legal system and regulatory changes may inhibit our ability to collect payment, or claim collateral (if any) located in Brazil. Furthermore, we may experience loss due to unforeseen economic or social conditions that affect Brazilian markets and in particular the market for Brazilian agriculture products. The expense of collecting on defaulted loans may be higher than in the United States, which may reduce the size of any recovery. We are also subject to the risk that the value of any real estate collateral could decline, further harming our ability to fully collect on any defaulted loan. The substantial size of each of these individual relationships could, if unpaid, materially adversely affect our earnings and capital.

Our largest loan relationships currently make up a material percentage of our total loan portfolio.

As of June 30 2014, our ten largest loan relationships totaled over $218.0 million in loan exposure or 20.6% of the total loan portfolio. The concentration risk associated with having a small number of extremely large loan

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relationships is that if one or more of these relationships were to become delinquent or suffer default, we could be at serious risk of material losses. The allowance for loan losses may not be adequate to cover losses associated with any of these relationships and any loss or increase in the allowance would negatively affect our earnings and capital. Even if the loans are collateralized, the large increase in classified assets could harm our reputation with our regulators and inhibit our ability to execute our business plan.

Many of our investments are focused on long-term returns, are expensive and may not yield the expected returns to justify their cost.

Part of our business plan has been to make material investments into our infrastructure, technology, banking centers and personnel, with a focus on long-term results. However, many of these investments are expensive in the short term and rely heavily on their future success to remain financially justifiable. Examples include (i) we spend materially more than an average bank our size on sports marketing, the results of which are hard to measure and may not justify the cost; (ii) our management-training program is expensive and the graduates from this program may not produce superior results to employees from less expensive forms of hiring and training; (iii) our strategy to fund our liabilities with longer-duration, higher-cost funds that will only pay off if interest rates increase during their term; and (iv) we invest heavily in technology to increase our productivity and our relationships with our clients, yet the products are new and may not yield the desired results. These investments, especially if not successful, reduce earnings, capital and financial flexibility and if not successful in the long term will have not produced the desired returns.

We may realize future losses if our levels of non-performing assets increase and if the proceeds we receive upon liquidation of assets are less than the carrying value of such assets.

Non-performing assets (including non-accrual loans and other real estate owned, or OREO) totaled $57.7 million at June 30, 2014. These non-performing assets can adversely affect net income through reduced interest income, increased operating expenses incurred to maintain such assets or loss charges related to subsequent declines in the estimated fair value of foreclosed assets. Any decrease in real estate market prices may lead to OREO write-downs, with a corresponding expense in our income statement. We evaluate OREO properties periodically and write down the carrying value of the properties if the results of our evaluation require it. Holding OREO properties is expensive and negatively impacts our earnings and results of operations. The expenses associated with OREO and any further property write-downs, both expected and unexpected, could have a material adverse effect on our financial condition and results of operations.

Certain of our activities are restricted due to commitments entered into with the Federal Reserve by us and certain or our foreign national controlling stockholders.

Certain of our controlling stockholders are foreign nationals, and we and these controlling stockholders have entered into commitments with the Federal Reserve that restrict some of our activities. In particular, we are restricted from engaging in certain transactions with these controlling stockholders, their immediate family, any company controlled by the controlling stockholders, and any executive officer, director, or principal stockholder of a company controlled by these controlling stockholders. Such transactions include (i) extensions of credit, (ii) covered transactions described in sections 23A and 23B of the Federal Reserve Act and the Federal Reserve’s Regulation W, (iii) any other business transaction or relationship, without approval of the Federal Reserve, with any company controlled by such controlling stockholder, and (iv) restrictions on the amount of deposits held by the Bank of any company controlled by such controlling stockholders. We are also prohibited from incurring additional debt to any third party without prior approval from the Federal Reserve. Finally, we are restricted from directly accepting wires from or sending wires to foreign accounts, and we must instead use a correspondent bank when our clients need to send or receive such foreign wires. This makes the wire process more difficult for our clients and as a result may result in a loss of business from these clients.

The loss of any member of our management team and our inability to make up for such loss with a qualified replacement could harm our business.

Our success and future growth depend upon the continued success of our management team, in particular our Chief Executive Officer, Trevor Burgess, and other key employees. Competition for qualified management in our industry is intense. Many of the companies with which we compete for management personnel have greater financial and other resources than we do or are located in geographic areas which may be considered by some to be more

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desirable places to live. If we are not able to retain any of our key management personnel, our business could be harmed.

Our business is highly competitive. If we are unable to successfully implement our business strategy, we risk losing market share to current and future competitors.

Commercial and consumer banking is highly competitive. Our market contains not only a large number of community and regional banks, but also a significant presence of the country’s largest commercial banks. We compete with other state and national financial institutions as well as savings and loan associations, savings banks and credit unions for deposits and loans. In addition, we compete with financial intermediaries, such as consumer finance companies, mortgage banking companies, insurance companies, securities firms, mutual funds and several government agencies as well as major retailers, all actively engaged in providing various types of loans and other financial services. Some of these competitors may have a long history of successful operations in our markets, greater ties to local businesses and more expansive banking relationships, as well as better established depositor bases. Competitors with greater resources may possess an advantage by attracting our clients through very aggressive product pricing that we are unable to match, maintaining numerous banking locations in more convenient sites, operating more ATMs and conducting extensive promotional and advertising campaigns or operating a more developed Internet platform.

The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking. Increased competition among financial services companies due to the recent consolidation of certain competing financial institutions may adversely affect our ability to market our products and services. Also, technology has lowered barriers to entry and made it possible for banks to compete in our market without a retail footprint by offering competitive rates, as well making it possible for non-banks to offer products and services traditionally provided by banks. Many of our competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many competitors may offer a broader range of products and services as well as better pricing for certain products and services than we can offer. For example, in the current low interest rate environment, competitors with lower costs of capital may solicit our customers to refinance their loans with a lower interest rate.

Our ability to compete successfully depends on a number of factors, including:

our ability to develop, maintain and build upon long-term customer relationships based on quality service and high ethical standards;

our ability to attract and retain qualified employees to operate our business effectively;

our ability to expand our market position;

the scope, relevance and pricing of products and services that we offer to meet customer needs and demands;

the rate at which we introduce new products and services relative to our competitors;

customer satisfaction with our level of service; and

industry and general economic trends.

Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could harm our business, financial condition and results of operations.

The Bank’s lending limit per borrower will continue to be lower than many of our competitors, which may discourage potential clients and limit our loan growth.

The Bank’s legally mandated lending limit per borrower is lower than that of many of our larger competitors because we have less capital. At June 30, 2014, the Bank’s legal lending limit for loans was approximately $34.8

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million to any one borrower on a secured basis and $20.8 million on an unsecured basis. The Bank’s lower lending limit may discourage potential borrowers with loan needs that exceed our limit from doing business with us, which may restrict our ability to grow. In addition, on July 17, 2014, we established a $30.0 million “house limit” guideline for future relationships that may further impact our ability to lend to large borrowers and discourage these large borrowers from doing business with us.

We may be adversely affected by the lack of soundness of other financial institutions or market utilities.

Our ability to engage in routine funding and other transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial institutions are interrelated as a result of trading, clearing, counterparty or other relationships. Defaults by, or even rumors or questions about, one or more financial institutions or market utilities, or the financial services industry generally, may lead to market-wide liquidity problems and losses of depositor, creditor and counterparty confidence and could lead to losses or defaults by us or by other institutions.

Changes in accounting standards could materially impact our financial statements.

From time to time, the Financial Accounting Standards Board or the Securities and Exchange Commission, or the SEC, may change the financial accounting and reporting standards that govern the preparation of our financial statements. Such changes may result in us being subject to new or changing accounting and reporting standards. In addition, the bodies that interpret the accounting standards (such as banking regulators or outside auditors) may change their interpretations or positions on how these standards should be applied. These changes may be beyond our control, can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retrospectively, or apply an existing standard differently, also retrospectively, in each case resulting in our needing to revise or restate prior period financial statements.

We depend on the accuracy and completeness of information about customers and counterparties.

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information furnished to us by or on behalf of customers and counterparties, including financial statements and other financial information. We also may rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. In deciding whether to extend credit, we may rely upon our customers’ representations that their financial statements conform to GAAP and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer. We also may rely on customer representations and certifications, or other audit or accountants’ reports, with respect to the business and financial condition of our clients. Our financial condition, results of operations, financial reporting and reputation could be negatively affected if we rely on materially misleading, false, inaccurate or fraudulent information.

Our small to medium-sized business and entrepreneurial customers may have fewer financial resources than larger entities to weather a downturn in the economy, which may impair a borrower’s ability to repay a loan, and such impairment could adversely affect our results of operations and financial condition.

We focus our business development and marketing strategy primarily to serve the banking and financial services needs of small to medium-sized businesses and entrepreneurs. These small to medium-sized businesses and entrepreneurs may have fewer financial resources in terms of capital or borrowing capacity than larger entities. In general, if economic conditions negatively impact the Florida market generally and small to medium-sized businesses are adversely affected, our results of operations and financial condition may be negatively affected.

Our risk management framework may not be effective in mitigating risks and/or losses to us.

Our risk management framework is comprised of various processes, systems and strategies, and is designed to manage the types of risk to which we are subject, including, among others, credit, market, liquidity, interest rate and compliance. Our framework also includes financial or other modeling methodologies that involve management assumptions and judgment. Our risk management framework may not be effective under all circumstances or that it will adequately mitigate any risk or loss to us. If our framework is not effective, we could suffer unexpected losses

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and our business, financial condition, results of operations or prospects could be materially and adversely affected. We may also be subject to potentially adverse regulatory consequences.

If third parties infringe upon our intellectual property or if we were to infringe upon the intellectual property of third parties, we may expend significant resources enforcing or defending our rights or suffer competitive injury.

We rely on a combination of patent, copyright, trademark, trade secret laws and confidentiality provisions to establish and protect our proprietary rights, including those created by C1 Labs. If we fail to successfully maintain, protect and enforce our intellectual property rights, our competitive position could suffer. Similarly, if we were to infringe on the intellectual property rights of others, our competitive position could suffer. Third parties may challenge, invalidate, circumvent, infringe or misappropriate our intellectual property, or such intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm. We may also be required to spend significant resources to monitor and police our intellectual property rights. Others, including our competitors may independently develop similar technology, duplicate our products or services or design around our intellectual property, and in such cases we could not assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential or proprietary information. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which could be time-consuming and expensive, could cause a diversion of resources and may not prove successful. The loss of intellectual property protection or the inability to obtain rights with respect to third-party intellectual property could harm our business and ability to compete. In addition, because of the rapid pace of technological change in our industry, aspects of our business and our products and services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all.

In some instances, litigation may be necessary to enforce our intellectual property rights and protect our proprietary information, or to defend against claims by third parties that our products, services or technology infringe or otherwise violate their intellectual property or proprietary rights. Third parties may have, or may eventually be issued, patents that could be infringed by our products, services or technology. Any of these third parties could bring an infringement claim against us with respect to our products, services or technology. We may also be subject to third-party infringement, misappropriation, breach or other claims with respect to copyright, trademark, license usage or other intellectual property rights. In addition, in recent years, individuals and groups, including patent holding companies have been purchasing intellectual property assets in order to make claims of infringement and attempt to extract settlements from companies in the banking and financial services industry. Any litigation or claims brought by or against us, whether with or without merit, could result in substantial costs to us and divert the attention of our management, which could harm our business and results of operations. In addition, any intellectual property litigation or claims against us could result in the loss or compromise of our intellectual property and proprietary rights, subject us to significant liabilities including damage awards, result in an injunction prohibiting us from marketing or selling certain of our services, require us to redesign affected products or services, or require us to seek licenses which may only be available on unfavorable terms, if at all, any of which could harm our business and results of operations.

We are dependent on our information technology and telecommunications systems and third-party servicers, and systems failures, interruptions and security breaches could result in serious reputational harm to our business and have an adverse effect on our financial condition and results of operations.

Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party servicers. We outsource many of our major systems, such as data processing, loan servicing and deposit processing systems. In particular, we rely almost exclusively on FiServ, Inc. for our information management systems. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to process new and renewal loans or gather deposits and provide customer service, compromise our

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ability to operate effectively, result in potential noncompliance with applicable laws or regulations, damage our reputation, result in a loss of customer business and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.

Failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber-attacks, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses. As a financial institution, we depend on our ability to process, record and monitor a large number of customer transactions on a continuous basis. As customer, public and regulatory expectations regarding operational and information security have increased, our operational systems and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions and breakdowns. Our business, financial, accounting, data processing systems or other operating systems and facilities may stop operating properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control. For example, there could be sudden increases in customer transaction volume, electrical or telecommunications outages, natural disasters such as earthquakes, tornadoes, and hurricanes, disease pandemics, events arising from local or larger scale political or social matters, including terrorist acts and, as described below, cyber-attacks. Although we have business continuity plans and other safeguards in place, our business operations may be adversely affected by significant and widespread disruption to our physical infrastructure or operating systems that support our businesses and customers.

Information security risks for financial institutions have generally increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists, activists, and other external parties. As noted above, our operations rely on the secure processing, transmission and storage of confidential information in our computer systems and networks. In addition, to access our products and services, our customers may use personal smartphones, tablet PCs, and other mobile devices that are beyond our control systems. Our technologies, systems, networks, and our customers’ devices may become the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our customers’ confidential, proprietary and other information, or otherwise disrupt our or our customers’ or other third parties’ business operations. As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.

We are under continuous threat of loss due to hacking and cyber-attacks especially as we continue to expand customer capabilities to utilize internet and other remote channels to transact business. Two of the most significant cyber-attack risks that we face are e-fraud and loss of sensitive customer data. Loss from e-fraud occurs when cybercriminals breach and extract funds directly from customer or our accounts. The attempts to breach sensitive customer data, such as account numbers and social security numbers, are less frequent but could present significant reputational, legal and/or regulatory costs to us if successful. Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers. While we have not experienced any material losses relating to cyber-attacks or other information security breaches to date, we may suffer such losses in the future. The occurrence of any cyber-attack or information security breach could result in potential liability to clients, reputational damage, damage to our competitive position and the disruption of our operations, all of which could adversely affect our business, financial condition or results of operations.

We are subject to certain operational risks, including customer or employee fraud.

Employee error and employee and customer misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee error and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee error could also subject us to financial claims for negligence.

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If our internal controls fail to prevent or detect an occurrence, or if any resulting loss is not insured, exceeds applicable insurance limits or if insurance coverage is denied or not available, it could have a material adverse effect on our business, financial condition and results of operations.

We are subject to environmental liability risk associated with lending activities.

A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Although we have policies and procedures to perform an environmental review before initiating any foreclosure action on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations.

We may make future acquisitions, which may be restricted by applicable regulation, difficult to integrate, divert management resources, result in unanticipated costs, or dilute our stockholders.

Part of our continuing business strategy is to make acquisitions of, or investments in, companies that complement our current position or offer growth opportunities.

The Bank Holding Company Act of 1956, as amended, or the BHCA and federal and Florida state banking laws restrict the activities that the Company and the Bank may lawfully conduct, whether directly or indirectly through acquisitions, subsidiaries and certain interests in other companies. These laws also affect the ability to effect a change of control of the Company or another bank holding company, as discussed under “—There are substantial regulatory limitations on changes of control of bank holding companies.” These regulatory regimes are summarized in greater detail under “Business—Supervision and Regulation—Holding Company Regulation” and “Business—Supervision and Regulation—Bank Regulation.” Certain acquisitions may be subject to regulatory approval, and we may not receive timely regulatory approval for future acquisitions. Changes in the number or scope of permissible activities under applicable law could have an adverse effect on our ability to realize our strategic goals.

Furthermore, future acquisitions could pose numerous risks to our operations, including:

we may have difficulty integrating the purchased operations;

we may incur substantial unanticipated integration costs;

assimilating the acquired businesses may divert significant management attention and financial resources from our other operations and could disrupt our ongoing business;

acquisitions could result in the loss of key employees, particularly those of the acquired operations;

we may have difficulty retaining or developing the acquired businesses’ customers;

acquisitions could adversely affect our existing business relationships with customers;

we may be unable to effectively compete in the markets serviced by the acquired bank;

we may fail to realize the potential cost savings or other financial benefits and/or the strategic benefits of the acquisitions; and

we may incur liabilities from the acquired businesses and we may not be successful in seeking indemnification for such liabilities or claims.

In connection with these acquisitions or investments, we could incur debt, amortization expenses related to intangible assets or large and immediate write-offs, assume liabilities, or issue stock that would dilute our current

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stockholders’ percentage of ownership. We may not be able to complete acquisitions or integrate the operations, products or personnel gained through any such acquisition without a material adverse effect on our business, financial condition and results of operations.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.”

Following the completion of this offering, we will be required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us and could have a negative effect on our business, financial condition and results of operations.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and requirements of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act. We are inexperienced with these reporting and accounting requirements, and as such these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join our firm and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

As an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain temporary exemptions from various reporting requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. While at June 30, 2014, December 31, 2013 and December 31, 2012 we had adopted all new accounting standards that could affect the comparability of our financial statements to those of other public entities, we may elect to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies.

When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

Hurricanes or other adverse weather events would negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations.

Our market area is susceptible to natural disasters, such as hurricanes, tropical storms, other severe weather events and related flooding and wind damage. These natural disasters could negatively impact regional economic conditions, disrupt operations, cause a decline in the value or destruction of mortgaged properties and an increase in the risk of delinquencies, foreclosures or loss on loans originated by us, damage our banking facilities and offices, result in a decline in local loan demand and our loan originations and negatively impact our growth strategy. We cannot predict whether or to what extent damage that may be caused by future natural disasters will affect our operations or the economies in our current or future market areas. Our business or results of operations may be adversely affected by these and other negative effects of natural disasters.

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We are or may become involved from time to time in suits, legal proceedings, information-gathering requests, investigations and proceedings by governmental and self-regulatory agencies that may lead to adverse consequences.

Many aspects of our business involve substantial risk of legal liability. We have been named or threatened to be named as defendants in various lawsuits arising from our business activities (and in some cases from the activities of companies we have acquired). In addition, from time to time, we are, or may become, the subject of governmental and self-regulatory agency information-gathering requests, reviews, investigations and proceedings and other forms of regulatory inquiry, including by bank regulatory agencies, the SEC and law enforcement authorities. The results of such proceedings could lead to significant civil or criminal penalties, including monetary penalties, damages, adverse judgments, settlements, fines, injunctions, restrictions on the way in which we conduct our business, or reputational harm.

Although we establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, we do not have accruals for all legal proceedings where we face a risk of loss. In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not represent the ultimate loss to us from the legal proceedings in question. Thus, our ultimate losses may be higher, and possibly significantly so, than the amounts accrued for legal loss contingencies, which could adversely affect our financial condition and results of operations.

Risks Related to Our Regulatory Environment

We are subject to regulation, which increases the cost and expense of regulatory compliance and therefore reduces our net income and may restrict our growth and ability to acquire other financial institutions.

As a bank holding company under federal law, we are subject to regulation under the BHCA, and the examination and reporting requirements of the Federal Reserve. In addition to supervising and examining us, the Federal Reserve, through its adoption of regulations implementing the BHCA, places certain restrictions on the activities that are deemed permissible for bank holding companies to engage in. Changes in the number or scope of permissible activities could have an adverse effect on our ability to realize our strategic goals.

As a Florida state-chartered bank that is not a member of the Federal Reserve System, the Bank is separately subject to regulation by both the FDIC and the Florida Office of Financial Regulation, or OFR. The FDIC and OFR regulate numerous aspects of the Bank’s operations, including adequate capital and financial condition, permissible types and amounts of extensions of credit and investments, permissible non-banking activities and restrictions on dividend payments. The Bank may undergo periodic examinations by the FDIC and OFR. Following such examinations, the Bank may be required, among other things, to change its asset valuations or the amounts of required loan loss allowances or to restrict its operations, which could adversely affect our results of operations.

Supervision, regulation, and examination of the Company and the Bank by the bank regulatory agencies are intended primarily for the protection of consumers, bank depositors and the Deposit Insurance Fund of the FDIC, rather than holders of our common stock.

Particularly as a result of new regulations and regulatory agencies under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, we may be required to invest significant management attention and resources to evaluate and make any changes necessary to comply with applicable laws and regulations. This allocation of resources, as well as any failure to comply with applicable requirements, may negatively impact our results of operations and financial condition.

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Changes in laws, government regulation and monetary policy may have a material effect on our results of operations.

Financial institutions have been the subject of significant legislative and regulatory changes and may be the subject of further significant legislation or regulation in the future, none of which is within our control. Significant new laws or regulations or changes in, or repeals of, existing laws or regulations, including those with respect to federal and state taxation, may cause our results of operations to differ materially. In addition, the costs and burden of compliance could adversely affect our ability to operate profitably. Further, federal monetary policy significantly affects our credit conditions, as well as for our borrowers, particularly as implemented through the Federal Reserve System, primarily through open market operations in U.S. government securities, the discount rate for bank borrowings and reserve requirements. A material change in any of these conditions could have a material impact on us or our borrowers, and therefore on our results of operations.

The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 may have a material effect on our operations.

On July 21, 2010, President Obama signed into law the Dodd-Frank Act, which imposes significant regulatory and compliance changes. The key effects of the Dodd-Frank Act on our business are, or may include:

increases in regulatory capital requirements and additional restrictions on the types of instruments that may satisfy such requirements;

creation of new government regulatory agencies (particularly the Consumer Financial Protection Bureau, which will develop and enforce rules for bank and non-bank providers of consumer financial products);

changes to deposit insurance assessments;

regulation of debit interchange fees we earn;

changes in retail banking regulations, including potential limitations on certain fees we may charge;

changes in regulation of consumer mortgage loan origination and risk retention; and

changes in corporate governance requirements for public companies.

In addition, the Dodd-Frank Act restricts the ability of banks to engage in certain proprietary trading or to sponsor or invest in private equity or hedge funds. The Dodd-Frank Act also contains provisions designed to limit the ability of insured depository institutions, their holding companies and their affiliates to conduct certain swaps and derivatives activities and to take certain principal positions in financial instruments.

Some provisions of the Dodd-Frank Act became effective immediately upon its enactment. Many provisions, however, required or will require regulations to be promulgated by various federal agencies in order to be implemented, some of which have been enacted or proposed by the applicable federal agencies. The changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage requirements or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make any changes necessary to comply with new statutory and regulatory requirements. Failure to comply with the new requirements may negatively impact our results of operations and financial condition. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to investors in our common stock.

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As a result of the Dodd-Frank Act and recent rulemaking, we will become subject to more stringent capital requirements.

Pursuant to the Dodd-Frank Act, in July 2013, the federal banking agencies adopted final rules, or the U.S. Basel III Capital Rules, to update their general risk-based capital and leverage capital requirements to incorporate agreements reflected in the Third Basel Accord adopted by the Basel Committee on Banking Supervision, or Basel III Capital Standards, as well as the requirements of the Dodd-Frank Act. The U.S. Basel III Capital Rules are described in more detail in “Supervision and Regulation – Basel III.” While we are continuing to prepare for the impact of the U.S. Basel III Capital Rules, the U.S. Basel III Capital Rules may still have a material impact on our business, financial condition and results of operations. In addition, the failure to meet the established capital requirements could result in one or more of our regulators placing limitations or conditions on our activities or restricting the commencement of new activities, and such failure could subject us to a variety of enforcement remedies available to the federal regulatory authorities, including limiting our ability to pay dividends, issuing a directive to increase our capital and terminating our FDIC deposit insurance.

Our ability to raise additional capital, when and if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry and market condition, and governmental activities, many of which are outside our control, and on our financial condition and performance. Accordingly, we may not be able to raise additional capital if needed or on terms acceptable to us. If we fail to meet these capital and other regulatory requirements, our financial condition, liquidity and results of operations would be materially and adversely affected.

Our failure to meet applicable regulatory capital requirements, or to maintain appropriate capital levels in general, could affect customer and investor confidence, our ability to grow, our costs of funds and FDIC insurance costs, our ability to pay dividends on common stock, our ability to make acquisitions, and our business, results of operations and financial conditions, generally.

We may be required to contribute capital or assets to the Bank that could otherwise be invested or deployed more profitably elsewhere.

Federal law and regulatory policy impose a number of obligations on bank holding companies that are designed to reduce potential loss exposure to the depositors of insured depository subsidiaries and to the FDIC’s deposit insurance fund. For example, a bank holding company is required to serve as a source of financial strength to its insured depository subsidiaries and to commit financial resources to support such institutions where it might not do so otherwise, even if we would not ordinarily do so and even if such contribution is to our detriment or the detriment of our stockholders. These situations include guaranteeing the compliance of an “undercapitalized” bank with its obligations under a capital restoration plan, as described further under “Business — Bank Regulation — Capitalization Levels and Prompt Corrective Action.”

A capital injection may be required at times when we do not have the resources to provide it, and therefore we may be required to issue common stock or debt. Issuing additional shares of common stock would dilute our current stockholders’ percentage of ownership and could cause the price of our common stock to decline. If we are required to issue debt, and in the event of a bankruptcy by the Company, the bankruptcy trustee would assume any commitment by the Company to a federal bank regulatory agency to maintain the capital of the Bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the Company’s general unsecured creditors, including the holders of any note obligations. Thus, any borrowing that must be done by the Company in order to make the required capital injection becomes more difficult and expensive and would adversely impact the Company’s cash flows, financial condition, results of operations and prospects.

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New and future rulemaking by the Consumer Financial Protection Bureau and other regulators, as well as enforcement of existing consumer protection laws, may have a material effect on our operations and operating costs.

The Consumer Financial Protection Bureau, or the CFPB, has the authority to implement and enforce a variety of existing federal consumer protection statutes and to issue new regulations and, with respect to institutions of our size, has exclusive examination and primary enforcement authority with respect to such laws and regulations. In some cases, regulators such as the FTC and the Department of Justice also retain certain rulemaking or enforcement authority, and we also remain subject to certain state consumer protection laws. As an independent bureau within the Federal Reserve, the CFPB may impose requirements more severe than the previous bank regulatory agencies. The CFPB has placed significant emphasis on consumer complaint management and has established a public consumer complaint database to encourage consumers to file complaints they may have against financial institutions. We are expected to monitor and respond to these complaints, including those that we deem frivolous, and doing so may require management to reallocate resources away from more profitable endeavors.

Pursuant to the Dodd-Frank Act, the CFPB issued a series of final rules in January 2013 related to mortgage loan origination and mortgage loan servicing. These final rules, most provisions of which became effective January 10, 2014, prohibit creditors, such as the Bank, from extending mortgage loans without regard for the consumer’s ability to repay and add restrictions and requirements to mortgage origination and servicing practices. In addition, these rules restrict the application of prepayment penalties and compensation practices relating to mortgage loan underwriting. Compliance with these rules will likely increase our overall regulatory compliance costs and require us to change our underwriting practices. Moreover, these rules may adversely affect the volume of mortgage loans that we underwrite and may subject the Bank to increased potential liability related to its residential loan origination activities.

Banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we become subject as a result of such examinations could materially and adversely affect us.

Florida and federal banking agencies periodically conduct examinations of our business, including compliance with laws and regulations. Accommodating such examinations may require management to reallocate resources, which would otherwise be used in the day-to-day operation of other aspects of our business. If, as a result of an examination, a Florida or federal banking agency were to determine that the financial condition, capital resources, allowance for loan and lease losses, asset quality, earnings prospects, management, liquidity or other aspects of our operations had become unsatisfactory, or that the Company or its management was in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against us, our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance. If we become subject to such regulatory actions, we could be materially and adversely affected.

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Florida financial institutions face a higher risk of noncompliance and enforcement actions with respect to the Bank Secrecy Act and other anti-money laundering statutes and regulations.

Like all U.S. financial institutions, we are subject to monitoring requirements under federal law, including anti-money laundering, or AML, and Bank Secrecy Act, or BSA, matters. Since September 11, 2001, banking regulators have intensified their focus on AML and BSA compliance requirements, particularly the AML provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA PATRIOT Act. There is also increased scrutiny of compliance with the rules enforced by the U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC. Moreover, we operate in areas designated as High Intensity Financial Crime Areas and High Intensity Drug Trafficking Areas. Since 2004, federal banking regulators and examiners have been extremely aggressive in their supervision and examination of financial institutions located in the state of Florida with respect to institutions’ BSA and AML compliance. Consequently, a number of formal enforcement actions have been issued against Florida financial institutions. Although we have adopted policies, procedures and controls to comply with the BSA and other AML statutes and regulations, this aggressive supervision and examination and increased likelihood of enforcement actions may increase our operating costs, which could negatively affect our results of operation and reputation.

We are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties.

Federal and state fair lending laws and regulations, such as the Equal Credit Opportunity Act and the Fair Housing Act, impose nondiscriminatory lending requirements on financial institutions. The Department of Justice, Consumer Financial Protection Bureau and other federal and state agencies are responsible for enforcing these laws and regulations. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. A successful challenge to our performance under the fair lending laws and regulations could adversely impact our rating under the Community Reinvestment Act, or CRA, and result in a wide variety of sanctions, including the required payment of damages and civil money penalties, injunctive relief and imposition of restrictions on merger and acquisition activity and restrictions on expansion activity, which could negatively impact our reputation, business, financial condition and results of operations.

Risks Related to Our Common Stock and this Offering

There may not be an active, liquid trading market for our common stock.

Prior to this offering, there has been no public market for shares of our common stock. We cannot predict the extent to which investor interest in our company will lead to the development of a trading market on the New York Stock Exchange or how liquid that market may become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you purchase. The initial public offering price of shares of our common stock is, or will be, determined by negotiation between us and the underwriters and may not be indicative of prices that will prevail following the completion of this offering. The market price of shares of our common stock may decline below the initial public offering price, and you may not be able to resell your shares of our common stock at or above the initial public offering price.

We expect that our stock price will fluctuate significantly, and you may not be able to resell your shares at or above the initial public offering price.

The trading price of our common stock is likely to be volatile and subject to wide price fluctuations in response to various factors, including:

market conditions in the broader stock market in general, or in our industry in particular;

actual or anticipated fluctuations in our quarterly financial and operating results;

introduction of new products and services by us or our competitors;

issuance of new or changed securities analysts’ reports or recommendations;

sales of large blocks of our stock;

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additions or departures of key personnel;

regulatory developments;

litigation and governmental investigations; and

economic and political conditions or events.

These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business.

The trading market for our common stock will also be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our stock price could decline.

If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.

If our existing stockholders sell substantial amounts of our common stock in the public market following this offering, the market price of our common stock could decrease significantly. The perception in the public market that our existing stockholders might sell shares of common stock could also depress our market price. Upon completion of this offering, we will have shares of common stock outstanding. Our directors, executive officers and certain additional other holders of our common stock will be subject to the lock-up agreements described in “Underwriting” and the Rule 144 holding period requirements described in “Shares Eligible for Future Sale.” After all of the lock-up periods have expired, the holding periods have elapsed, additional shares will be eligible for sale in the public market. The market price of shares of our common stock may drop significantly when the restrictions on resale by our existing stockholders lapse. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.

Our management will have broad discretion as to the use of proceeds from this offering, and you may not agree with the manner in which we use the proceeds.

We intend to use the net proceeds of this offering for working capital and other general corporate purposes, including to finance our expected growth, fund capital expenditures, or expand our existing business through investments in or acquisitions of other businesses, although at present we do not have any current plans, arrangements or understandings to make any material capital investments or make any material acquisitions. The Company has not formally designated the amount of net proceeds that it will contribute to the Bank or that the Company will use for any particular purpose. Accordingly, our management will have broad discretion as to the application of the net proceeds of this offering and could use them for purposes other than those contemplated at the time of this offering. Our stockholders may not agree with the manner in which our management chooses to allocate and invest the net proceeds. We may not be successful in using the net proceeds from this offering to increase our profitability or market value, and we cannot predict whether the proceeds will be invested to yield a favorable return.

Our principal stockholders have historically controlled, and in the future will continue to control us.

Our principal stockholders (Marcelo Faria de Lima, Erwin Russel, Marcio Camargo and Trevor Burgess) will collectively own approximately % of the outstanding shares of our common stock after this offering. As a result, these stockholders, acting together, will be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other extraordinary transactions. Our principal stockholders are also business partners in business ventures in addition to our company. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to

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your interests. In addition, a dispute among these individuals in connection with the Company or another business venture could impact their relationship at the Company and, because of their prominence within the Company, the Company itself. The concentration of ownership may also have the effect of delaying, preventing or deterring a change of control of the Company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

There are substantial regulatory limitations on changes of control of bank holding companies.

With certain limited exceptions, federal regulations prohibit a person or company or a group of persons deemed to be “acting in concert” from, directly or indirectly, acquiring more than 10% (5% if the acquirer is a bank holding company) of any class of our voting stock or obtaining the ability to control in any manner the election of a majority of our directors or otherwise direct the management or policies of our company without prior notice or application to and the approval of the Federal Reserve. Accordingly, prospective investors need to be aware of and comply with these requirements, if applicable, in connection with any purchase of shares of our common stock. These provisions effectively inhibit certain mergers or other business combinations, which, in turn, could adversely affect the market price of our common stock.

We are currently exempt from certain corporate governance requirements since we are a “controlled company” within the meaning of NYSE rules and, as a result, you will not have the protections afforded by these corporate governance requirements.

Following the consummation of this offering, our principal stockholders (Marcelo Faria de Lima, Erwin Russel, Marcio Camargo and Trevor Burgess) will collectively hold a majority of our common stock. As a result, we will be considered a “controlled company” for the purposes of the listing requirements of the NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE, including the requirements that our board of directors, our executive compensation committee and our directors’ nominating and corporate governance committee meet the standard of independence established by those corporate governance requirements. We intend to avail ourselves of certain of these exemptions. The independence standards are intended to ensure that directors who meet the independence standard are free of any conflicting interest that could influence their actions as directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the exchange on which we will list our common stock.

We have the ability to incur debt and pledge our assets, including our stock in the Bank, to secure that debt.

We have the ability to incur debt and pledge our assets to secure that debt. Absent special and unusual circumstances, a holder of indebtedness for borrowed money has rights that are superior to those of holders of common stock. For example, interest must be paid to the lender before dividends can be paid to the stockholders, and loans must be paid off before any assets can be distributed to stockholders if we were to liquidate. Furthermore, we would have to make principal and interest payments on our indebtedness, which could reduce our profitability or result in net losses on a consolidated basis even if the Bank were profitable.

Shares of the Company’s common stock are not insured deposits and may lose value.

The shares of the Company’s common stock are not bank deposits and will not be insured or guaranteed by the FDIC or any other government agency.

The laws that regulate our operations are designed for the protection of depositors and the public, not our stockholders.

The federal and state laws and regulations applicable to our operations give regulatory authorities extensive discretion in connection with their supervisory and enforcement responsibilities, and generally have been promulgated to protect depositors and the FDIC’s Deposit Insurance Fund and not for the purpose of protecting stockholders. These laws and regulations can materially affect our future business. Laws and regulations now affecting us may be changed at any time, and the interpretation of such laws and regulations by bank regulatory authorities is also subject to change.

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Future changes in laws and regulations or changes in their interpretation may also adversely affect our business. Legislative and regulatory changes may increase our cost of doing business or otherwise adversely affect us and create competitive advantages for non-bank competitors.

Applicable laws and regulations restrict both the ability of the Bank to pay dividends to the Company and the ability of the Company to pay dividends to our stockholders.

Both the Company and the Bank are subject to various regulatory restrictions relating to the payment of dividends. In addition, the Federal Reserve has the authority to prohibit bank holding companies from engaging in unsafe or unsound practices in conducting their business. These federal and state laws, regulations and policies are described in greater detail in “Business—Bank Regulation—Bank Dividends” and “Business—Holding Company Regulation—Restriction on Bank Holding Company Dividends,” but generally look to factors such as previous results and net income, capital needs, asset quality, existence of enforcement or remediation proceedings, and overall financial condition.

For the foreseeable future, the majority, if not all, of the Company’s revenue will be from any dividends paid to the Company by the Bank. Accordingly, our ability to pay dividends also depends on the ability of the Bank to pay dividends to us. Furthermore, the present and future dividend policy of the Bank is subject to the discretion of its board of directors.

We cannot guarantee that the Company or the Bank will be permitted by financial condition or applicable regulatory restrictions to pay dividends, that the board of directors of the Bank will elect to pay dividends to us, nor can we guarantee the timing or amount of any dividend actually paid. See “Dividend Policy.”

Anti-takeover protections under the Florida Business Corporation Act, or the FBCA, and other factors will make it more difficult to realize the value of an investment in the Company.

In general, the three principal ways that the stockholders of any company can realize a return on their investment are (i) to receive distributions (i.e., dividends) from the company, (ii) to sell their individual ownership interests to a third party, or (iii) to participate in a company-wide transaction in which they are able to sell their ownership interests, or an “exit event,” regardless of whether the exit event is voluntary (such as a friendly merger) or involuntary (such as a hostile takeover). There are significant impediments to the ability of a stockholder of the Company to realize a return on his or her investment in any of those ways. As stated elsewhere in this prospectus, we do not intend to declare or pay dividends in the foreseeable future.

We do not anticipate paying any cash dividends in the foreseeable future.

We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development and growth of our business. We do not intend to pay any dividends to holders of our common stock. As a result, capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our common stock.

New investors in our common stock will experience immediate and substantial book value dilution after this offering.

The initial public offering price of our common stock will be substantially higher than the pro forma net tangible book value per share of the outstanding common stock immediately after the offering. Based on an assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover of this prospectus) and our net tangible book value as of June 30, 2014, if you purchase our common stock in this offering you will pay more for your shares than the amounts paid by our existing stockholders for their shares and you will suffer immediate dilution of approximately $ per share in pro forma net tangible book value. As a result of this dilution, investors purchasing stock in this offering may receive significantly less than the full purchase price that they paid for the shares purchased in this offering in the event of a liquidation.

Future equity issuances could result in dilution, which could cause our common stock price to decline.

We are generally not restricted from issuing additional shares of our common stock up to the 100 million shares authorized in our certificate of formation. We may issue additional shares of our common stock in the future pursuant to current or future employee stock option plans, upon exercise of warrants or in connection with future

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acquisitions or financings. If we choose to raise capital by selling shares of our common stock or securities convertible into common stock for any reason, the issuance would have a dilutive effect on the holders of our common stock and could have a material negative effect on the market price of our common stock.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

We are not currently required to comply with SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. We will be required to comply with these rules upon ceasing to be an “emerging growth company” as defined in the JOBS Act.

When evaluating our internal controls over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting, and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

As an “emerging growth company,” as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make our financial statements not comparable with those of another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period because of the potential differences in accounting standards used.

We cannot predict if investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made statements under the captions “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and in other sections of this prospectus that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or “may,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events.

Any or all of our forward-looking statements in this prospectus may turn out to be inaccurate. The inclusion of this forward-looking information should not be regarded as a representation by us, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

There are a number of potential factors, risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including, the following:

changes in general economic and financial market conditions;

changes in the regulatory environment, economic conditions generally and in the financial services industry;

changes in the economy affecting real estate values;

our ability to achieve loan and deposit growth;

projected population and income growth in our targeted market areas;

volatility and direction of market interest rates and a weakening of the economy which could materially impact credit quality trends and the ability to generate loans; and

those other factors and risks described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements to actual results or revised expectations.

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USE OF PROCEEDS

We estimate that the net proceeds to us from this offering will be approximately $ million, or approximately $ million if the underwriters exercise their over-allotment option in full, assuming an initial public offering price of $ per share (the midpoint of the range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses. Each $1 increase (decrease) in the initial public offering price per share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions, by $ million (assuming no exercise of the underwriters’ over-allotment option).

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DIVIDEND POLICY

We have not paid any dividends on our common stock since inception, and we currently anticipate that we will retain all available funds for use in the operation and expansion of our business, and do not anticipate paying any cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made by our board of directors and will depend on a number of factors, including our financial condition and results of operations, tax considerations, capital requirements, industry standards, and economic conditions.

As a bank holding company, we are subject to the Federal Reserve’s policy regarding dividends, which holds that a bank holding company should not declare or pay a cash dividend which would impose undue pressure on the capital of any bank subsidiary or would be funded only through borrowing or other arrangements that might adversely affect a bank holding company’s financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if:

its net income available to stockholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;

its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or

it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.

Should the Bank be “significantly undercapitalized” under the applicable federal bank capital ratios, or if the Bank is “undercapitalized” and has failed to submit an acceptable capital restoration plan or has materially failed to implement such a plan, the FDIC may choose to require prior Federal Reserve approval for any capital distribution by us as a bank holding company controlling the Bank. For more information, see “Business — Bank Regulation — Capitalization Levels and Prompt Corrective Action.”

In addition, since the Company is a legal entity separate and distinct from the Bank and does not conduct stand-alone operations, the Company’s ability to pay dividends depends on the ability of the Bank to pay dividends to the Company. The present and future dividend policy of the Bank is subject to the discretion of its board of directors.

Florida law places restrictions on the declaration of dividends by state chartered banks such as the Bank to their stockholders. Pursuant to the Florida Financial Institutions Code, the board of directors of state-chartered banks, after charging off bad debts, depreciation and other worthless assets, if any, and making provision for reasonably anticipated future losses on loans and other assets, may quarterly, semiannually or annually declare a dividend of up to the aggregate net profits of that period combined with the bank’s retained net profits for the preceding two years and, with the approval of the OFR, declare a dividend from retained net profits which accrued prior to the preceding two years. Before declaring such dividends, 20% of the net profits for the preceding period as is covered by the dividend must be transferred to the surplus fund of the bank until this fund becomes equal to the amount of the bank’s common stock then issued and outstanding. A state-chartered bank may not declare any dividend if (i) its net income (loss) from the current year combined with the retained net income (loss) for the preceding two years aggregates a loss or (ii) the payment of such dividend would cause the capital account of the bank to fall below the minimum amount required by law, regulation, order or any written agreement with the OFR or a federal regulatory agency. Also, under FDIC regulations, no bank may pay a dividend if, after the payment of the dividend, it would be “undercapitalized” within the meaning of the prompt corrective action laws. See ”Business——Supervision and Regulation——Bank Dividends” and “Business——Supervision and Regulation——Restrictions on Bank Holding Company Dividends.”

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CAPITALIZATION

The following table sets forth our capitalization, including regulatory capital ratios, on a consolidated basis as of June 30, 2014:

on an actual basis; and

on an as adjusted basis to reflect (i) the 7 for 1 reverse stock split that we intend to effectuate simultaneously upon the execution of an underwriting agreement in connection with this offering; and (ii) the sale by us of shares of common stock in this offering, at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. Each $1.00 increase (decrease) in the initial public offering price per share would increase (decrease) our total stockholders’ equity and total capitalization by $ million (assuming no exercise of the underwriters’ over-allotment option).

This table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto appearing elsewhere in this prospectus.

	As of June 30, 2014
	Actual			As Adjusted
	(in thousands, except ratios)
Stockholders’ equity:
Common stock, par value $1.00 per share, 100,000,000 shares authorized, 93,378,862 shares outstanding actual and shares outstanding as adjusted		93,379
Additional paid-in capital		28,365
Retained earnings		18,447
Accumulated other comprehensive income		—
Total stockholders’ equity	$	140,191		$

Capital ratios:
Total capital to risk-weighted assets		12.42	%
Tier 1 Capital to risk-weighted assets		11.98	%
Tier 1 leverage ratio		9.73	%

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DILUTION

If you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share and the as adjusted net tangible book value per share immediately following the offering. Our net tangible book value at June 30, 2014 was $138.8 million, or $1.49 per share of common stock based on the 93,378,862 shares issued and outstanding as of such date. Net tangible book value per share represents the book value of our total tangible assets less the book value of our total liabilities divided by the number of shares of common stock then issued and outstanding.

After giving effect to the 7 for 1 reverse stock split that we intend to effectuate simultaneously upon the execution of an underwriting agreement in connection with this offering and our sale of shares of common stock at an assumed initial public offering price of $ per share, the midpoint of the price range on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and offering expenses, our as adjusted net tangible book value at June 30, 2014 would have been $ , or $ per share. This amount represents an immediate increase in net tangible book value to our existing stockholders of $ per share and an immediate dilution to new investors of $ per share.

The following table illustrates this per share dilution:

Assumed initial public offering price per share		$
Net tangible book value per share at June 30, 2014	$
Increase in net tangible book value per share attributable to this offering
As adjusted net tangible book value per share after this offering
Dilution per share to new investors in this offering		$

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share of common stock would increase (decrease) our net tangible book value as of June 30, 2014 by approximately $ million, or approximately $ per share, and the pro forma dilution per share to new investors in this offering by approximately $ per share, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting estimated underwriting discounts and offering expenses payable by us. The number of shares offered by us in this offering may be increased or decreased from the number of shares on the cover page of this prospectus. Each increase (decrease) of 1.0 million shares in the number of shares offered by us, together with a $1.00 increase in the assumed offering price of $ per share, would increase (decrease) our net tangible book value as of June 30, 2014 by approximately $ million, or approximately $ per share, and the pro forma dilution per share to new investors in this offering by approximately $ per share, assuming the assumed initial public offering price per share of $ per share, the midpoint of the offering price range set forth on the cover of this prospectus, remains the same and after deducting estimated underwriting discounts and offering expenses. Similarly, a decrease of 1.0 million shares in the number of shares of common stock offered by us, together with a $1.00 decrease in the assumed public offering price of $ per share, would result in our net tangible book value, as of June 30, 2014, of approximately $ million, or approximately $ per share, and the pro forma dilution per share to investors in this offering would be approximately $ per share. The as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

The following table sets forth, on a pro forma basis, as of June 30, 2014, the number of shares of common stock purchased from C1 Financial, the total consideration paid, or to be paid, and the average price per share paid, or to be paid, by existing stockholders and by the new investors, at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and offering expenses payable by C1 Financial:

	Shares Purchased				Total Consideration
	Number	Percent			Amount	Percent			Average Price Per Share
Existing stockholders				%	$			%
New investors
Total			100	%	$		100	%

If the underwriters exercise in full their option to purchase additional shares in this offering, our as adjusted tangible common book value as of June 30, 2014, would be $ million, or $ per share, representing an immediate increase in as adjusted tangible book value to our existing stockholders over our historical June 30, 2014 book value per share of $ per share and immediate dilution to investors participating in this offering of $ per share.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data of C1 Financial should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included elsewhere in this prospectus.

The selected consolidated financial data as of and for the two years ended December 31, 2013 and 2012 are derived from, and qualified by reference to, the audited consolidated financial statements of C1 Financial included elsewhere in this prospectus and should be read in conjunction with those consolidated financial statements and notes thereto. The selected consolidated financial data as of and for the two years ended December 31, 2011 and 2010 are derived from, and qualified by reference to, the audited consolidated financial statements of C1 Financial not included in this prospectus. The selected consolidated financial data as of and for the six-month period ended June 30, 2014 and 2013 are derived from C1 Financial’s unaudited consolidated financial statements which, in our opinion, have been prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of C1 Financial’s results of operations and financial position. Results for the six-month period ended June 30, 2014 are not necessarily indicative of results that may be expected for the entire year. The selected consolidated financial data for all periods does not reflect the 7 for 1 reverse stock split that we intend to effectuate simultaneously upon the execution of an underwriting agreement in connection with this offering.

	As of and for Six-Month Period Ended June 30,						As of and for Years Ended December 31,
	2014			2013			2013			2012			2011			2010
	(in thousands, except per share data and ratios)
Statement of Income Data:
Interest income	$	30,907		$	19,857		$	48,499		$	38,201		$	27,015		$	11,220
Interest expense		4,164			2,857			6,650			6,127			5,815			4,976
Net interest income		26,743			17,000			41,849			32,074			21,200			6,244
Provision for loan losses		4,608			15			1,218			2,358			2,846			1,426
Bargain purchase gain		11			—			13,462			6,235			1,114			—
Gain (loss) on sale of securities		241			576			305			3,035			294			292
Total noninterest income		4,387			3,063			21,648			15,051			5,238			1,783
Total noninterest expense		21,947			18,555			42,637			33,963			18,027			7,915
Income before income taxes		4,575			1,493			19,642			10,804			5,565			(1,314	)
Income tax expense (benefit)		1,819			567			7,652			(2,304	)		—			—
Net income		2,756			926			11,990			13,108			5,565			(1,314	)

Per Share Outstanding Data
Net earnings (loss) per share	$	0.03		$	0.01		$	0.15		$	0.18		$	0.11		$	(0.06	)
Diluted net earnings (loss) per share		0.03			0.01			0.15			0.18			0.11			(0.06	)
Common shares outstanding at year or period end (000s)		93,379			78,299			85,519			74,541			67,295			27,280
Diluted shares outstanding (000s)		93,379			78,520			85,629			74,806			67,295			27,280
Book value per share	$	1.50		$	1.29		$	1.42		$	1.29		$	1.11		$	1.10
Tangible book value per share		1.49			1.28			1.40			1.29			1.10			1.10

Balance Sheet Data
Cash and due from banks	$	258,944		$	208,753		$	143,452		$	77,038		$	13,250		$	24,695
Securities available for sale		—			—			—			109,423			103,337			23,565
Loans receivable, gross		1,062,701			724,811			1,053,029			663,634			549,081			209,573
Loans originated by C1 Bank (Nonacquired)		665,615			400,365			614,613			301,858			169,227			66,038
Loans acquired(1)		397,086			324,446			438,416			361,776			379,854			143,535
Total assets		1,449,214			1,031,699			1,323,371			938,066			729,277			276,101
Total deposits		1,135,451			789,345			1,041,043			760,041			557,701			225,601
Borrowings		168,500			136,500			153,500			78,300			94,313			19,300
Total liabilities		1,309,023			930,502			1,201,557			841,619			654,684			246,025
Total stockholders’ equity		140,191			101,197			121,814			96,447			74,593			30,076
Tangible stockholders’ equity		138,752			100,743			120,080			95,828			74,090			30,076

Capital Ratios
Total capital to risk-weighted assets		12.42	%		12.99	%		10.97	%		12.54	%		12.89	%		14.84	%
Tier 1 capital to risk-weighted assets		11.98	%		12.48	%		10.62	%		12.03	%		11.71	%		12.58	%

C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

June 30, 2014 and December 31, 2013

(Dollars in thousands, except per share data)

(Balance Sheet data at December 31, 2013 is derived from audited financial statements)

	June 30,		December 31,
	2014		2013
ASSETS
Cash and cash equivalents	$	258,944	$	143,452
Federal Home Loan Bank stock, at cost		8,639		8,210
Loans receivable (net of allowance of $4,593 and $3,412		1,054,785		1,046,737
at June 30, 2014 and year end 2013 respectively)
Premises and equipment, net		62,938		57,284
Other real estate owned		36,278		41,049
Bank owned life insurance		8,825		8,748
Accrued interest receivable		3,015		3,013
Core deposit intangible		1,190		1,485
Prepaid expenses		4,792		2,071
Other assets		9,808		11,322
Total assets	$	1,449,214	$	1,323,371

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Non-interest bearing	$	253,148	$	194,383
Interest bearing		882,303		846,660
Total deposits		1,135,451		1,041,043

Federal Home Loan Bank advances		165,500		150,500
Other borrowings		3,000		3,000
Other liabilities		5,072		7,014
Total liabilities		1,309,023		1,201,557

Commitments and contingent liabilities (Note 8)

Stockholders’ equity
Common stock, par value $1.00;
100,000,000 shares authorized; 93,378,862 and 85,518,521
shares issued and outstanding at June 30, 2014, and
December 31, 2013		93,379		85,519
Additional paid-in capital		28,365		20,604
Retained earnings		18,447		15,691
Accumulated other comprehensive income		-		-
Total stockholders’ equity		140,191		121,814
Total liabilities and stockholders’ equity	$	1,449,214	$	1,323,371

See accompanying notes to condensed consolidated financial statements.

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C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)

(Dollars in thousands, except per share data)

	Three Months ended					Six Months ended
	June 30,			June 30,		June 30,		June 30,
	2014			2013		2014		2013
Interest income
Loans, including fees	$	15,468		$	9,885	$	30,453		19,081
Securities		29			256		57		624
Federal funds sold and other		215			97		397		152
Total interest income		15,712			10,238		30,907		19,857

Interest expense
Savings and interest bearing demand deposits		518			451		1,026		883
Time deposits		984			627		1,966		1,280
Federal Home Loan Bank advances		599			415		1,143		664
Other borrowings		14			15		29		30
Total interest expense		2,115			1,508		4,164		2,857

Net interest income		13,597			8,730		26,743		17,000

Provision for loan losses		4,572			119		4,608		15

Net interest income after provision for loan losses		9,025			8,611		22,135		16,985

Other income
Gain on sale of securities		241			576		241		576
Gain on sale of loans		804			317		1,548		371
Services charges and fees		538			392		1,132		771
Bargain purchase gain		(30	)		-		11		-
Gain on sale of other real estate, net		375			156		652		385
Bank owned life insurance		41			47		77		97
Mortgage banking fees		4			181		47		376
Other		374			220		679		487
Total other income	$	2,347		$	1,889	$	4,387	$	3,063

(Continued)

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C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)

(Dollars in thousands, except per share data)

	Three Months ended				Six Months ended
	June 30,		June 30,		June 30,		June 30,
	2014		2013		2014		2013

Other noninterest expenses
Salaries and employee benefits		4,282		3,989		8,749		8,191
Occupancy expense		1,109		760		2,172		1,537
Furniture and equipment		641		386		1,281		761
Regulatory assessments		355		257		705		482
Network services and data processing		940		785		1,791		1,524
Printing and office supplies		88		95		193		212
Postage and delivery		74		60		129		110
Advertising and promotion		939		781		1,822		1,531
Other real estate owned related expense		494		450		1,114		921
Other real estate owned – valuation allowance expense		185		175		564		198
Amortization of intangible assets		141		76		295		165
Professional fees		828		664		1,424		1,166
Loan collection expenses		175		168		323		413
Merger related expense		-		179		-		179
Other operating expense		699		722		1,385		1,165
Total other operating expenses	$	10,950	$	9,547	$	21,947	$	18,555

(Continued)

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C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)

(Dollars in thousands, except per share data)

	Three Months ended				Six Months ended
	June 30,		June 30,		June 30,		June 30,
	2014		2013		2014		2013

Income before income taxes	$	422	$	953	$	4,575	$	1,493

Income tax expense		192		359		1,819		567
Net income	$	230	$	594	$	2,756	$	926

Earnings per common share:
Basic	$	0.00	$	0.01	$	0.03	$	0.01
Diluted	$	0.00	$	0.01	$	0.03	$	0.01

See accompanying notes to condensed consolidated financial statements.

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C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands, except per share data)

	Three Months ended						Six Months ended
	June 30,			June 30,			June 30,			June 30,
	2014			2013			2014			2013

Net income	$	230		$	594		$	2,756		$	926

Other comprehensive income:
Unrealized gains/losses on available for sale securities:
Unrealized holding gain (loss) arising during the period		59			(100	)		241			499
Reclassification adjustments for gains included in net income		(241	)		(576	)		(241	)		(576	)

Tax effect		71			255			-			29

Total other comprehensive income, net of tax		(111	)		(421	)		-			(48	)

Comprehensive income	$	119		$	173		$	2,756		$	878

*Amounts for realized gains on available for sale securities are included in gain on sale of securities in the consolidated income statements. Income taxes associated with the reclassification adjustment for gains included in net income for the six months ended June 30, 2014, and 2013 were $0, and $29 respectively. The amounts related to income taxes on gains included in net income are included in income tax expense (benefit) in the consolidated income statements.

See accompanying notes to condensed consolidated financial statements.

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C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

Six months ended June 30, 2014

(Dollars in thousands)

	Preferred Stock Series E		Common Stock		Additional Paid in Capital		Retained Earnings (Deficit)		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total


Balance at January 1, 2014	$	−	$	85,519	$	20,604	$	15,691	$	−	$	−	$	121,814

Issuance of common stock, net of costs		−		7,860		7,761		−		−		−		15,621
Net income		−		−		−		2,756		−		−		2,756
Other comprehensive income		−		−		−		−		−		−		−

Balance at June 30, 2014	$	−	$	93,379	$	28,365	$	18,447	$	−	$	−	$	140,191

See accompanying notes to condensed consolidated financial statements.

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C1 FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six months ended June 30, 2014 and 2013

(Dollars in thousands)

	2014			2013
Cash flows from operating activities
Net income	$	2,756		$	926
Adjustments to reconcile net income to net cash from
operating activities:
Provision for loan losses		4,608			15
Depreciation		1,334			898
Net accretion of purchase accounting adjustments		(1,304	)		(1,115	)
Net amortization of securities		-			590
Amortization of loan premium		(137	)		(86	)
Amortization of other intangible assets		295			165
Increase in other real estate owned valuation allowance		564			198
Increase in cash surrender value of BOLI		(77	)		(97	)
Gain on sale of securities		(241	)		(576	)
Bargain purchase gain		(11	)		-
Deferred tax asset		71			28
Gain on sales of loans		(1,548	)		(371	)
Gain on sales of other real estate owned		(652	)		(385	)
Change in assets and liabilities:
Accrued interest receivable and other assets		(2,035	)		(2,704	)
Other liabilities		(1,726	)		1,673
Net cash from operating activities		1,897			(841	)
Cash flows used in investing activities
Loan originations, net of repayments		(10,640	)		(62,655	)
Proceeds from sale of foreclosed assets		5,545			2,423
Proceeds from sales, calls and maturities of securities		996			109,333
Purchase of Federal Home Loan Bank stock		(429	)		(2,619	)
Proceeds of sale of Federal Home Loan Bank stock		-			151
Payments for the purchase of equipment		(6,988	)		(5,721	)
Net cash transferred in bank acquisition		11			-
Net cash from investing activities		(11,505	)		40,912

Cash flows provided by financing activities
Net proceeds from issuance of common stock		15,621			3,872
Net change in deposits		94,479			29,572
Repayment of Federal Home Loan Bank advances		-			(1,800	)
Proceeds from Federal Home Loan Bank advances		15,000			60,000
Net cash provided by financing activities		125,100			91,644

Net change in cash and cash equivalents		115,492			131,715

Cash and cash equivalents at beginning of the period		143,452			77,038

Cash and cash equivalents at end of the period	$	258,944		$	208,753

Supplemental information:
Cash paid during the period for interest	$	4,368		$	3,259
Cash paid during the period for income taxes		5,170			-

Non-cash items:
Transfers from loans to other real estate owned		686			3,253

See accompanying notes to condensed consolidated financial statements.

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C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 1 – BASIS OF PRESENTATION

Nature of Operations and Principles of Consolidation: The consolidated financial statements as of and for the six months ended June 30, 2014 include C1 Financial, Inc. and its wholly owned subsidiary, C1 Bank, together referred to as “the Company”. The financial statements as of and for the six months ended June 30, 2013 only include C1 Bank because C1 Financial, Inc. became Parent Company of C1 Bank only after the share reorganization that took place in December 2013.

C1 Bank (the “Bank”) is a state chartered bank and is subject to the regulations of certain government agencies. During 2011, the Bank changed its name from Community Bank of Manatee to Community Bank & Company, and during 2012, the Bank changed its name to C1 Bank. The Bank provides a variety of banking services to individuals through its 28 offices and one loan production office located in 8 counties (Pinellas, Hillsborough, Manatee, Charlotte, Pasco, Lee, Miami-Dade and Orange). Its primary deposit products are checking, money market, savings, and term certificate accounts, and its primary lending products are commercial real estate loans, residential real estate loans, commercial loans, and consumer loans. Substantially all loans are secured by specific items of collateral including commercial and residential real estate, business assets and consumer assets. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the area.

As described in Note 2, on August 2, 2013, the Bank acquired First Community Bank of Southwest Florida through a FDIC assisted transaction, consolidating substantially all of its assets and assuming all of the deposits.

The consolidated financial information included herein as of and for the periods ended June 30, 2014 and 2013 is unaudited. Accordingly, it does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. However, such information reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the financial condition and results of operations for the interim periods. The December 31, 2013 consolidated balance sheet was derived from the Company’s December 31, 2013 audited Consolidated Financial Statements.

Earnings per share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share include the dilutive effect of additional potential common shares issuable under stock options and restricted stock. Earnings per common share is restated for all stock splits and stock dividends through the date of the issue of the financial statements.

NOTE 2 – BUSINESS COMBINATIONS

On August 2, 2013, the Bank acquired First Community Bank of Southwest Florida through the FDIC. First Community Bank of Southwest Florida operations are included in the Bank’s income statement beginning August 3, 2013. Acquisition-related costs of approximately $831 are included in the Bank’s income statement as non-interest expense for the year ended December 31, 2013. The total value of the consideration paid to the Bank by the FDIC was $23,494 in cash. The purchase was part of the Bank’s overall strategy to grow and expand its market presence in Southwest Florida. The acquisition resulted in a bargain purchase gain of $12,387 as of acquisition date, primarily as a result of the bid price being below the fair value of the net assets acquired. After measurement period adjustments, bargain purchase gain as of December 31, 2013 was $13,462.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 2 – BUSINESS COMBINATIONS (Continued)

The following table summarizes the consideration received for First Community Bank of Southwest Florida and the fair value of the assets acquired and liabilities assumed at the acquisition date:

	August 2,			Measurement		December 31,
	2013			Period		2013
Assets
Cash and cash equivalents	$	18,645		$	-	$	18,645
Securities available for sale		21,500			-		21,500
Restricted stock		926			-		926
Loans		164,965			578		165,543
Premises and equipment		5,630			-		5,630
Core deposit intangibles		1,549			-		1,549
Real estate owned		25,604			497		26,101
Other assets		905			-		905
Total assets acquired		239,724			1,075		240,799

Liabilities
Deposits		237,053			-		237,053
FHLB Advances		13,600			-		13,600
Other liabilities		178			-		178
Total liabilities assumed		250,831			-		250,831

Net assets acquired	$	(11,107	)	$	1,075	$	(10,032	)

Net cash received		23,494					23,494

Bargain purchase gain	$	12,387				$	13,462

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Both the purchased assets and liabilities assumed are recorded at their estimated fair values. Determining the fair values of assets and liabilities, especially the loan portfolio and foreclosed real estate, involves significant judgment and assumptions. Due primarily to the significant amount of fair value adjustments, troubled condition, and regulatory constraints, historical results of First Community Bank of Southwest Florida are not believed to be relevant to the Company’s results, and thus no pro forma information is presented.

NOTE 3 – INVESTMENT SECURITIES

C1 Financial, Inc.’s Directors Asset Liability Committee resolved in early 2013 that improving economic conditions could begin to put upward pressure on interest rates in 2013 and beyond, especially considering the fact that rates still remain at historically low levels. Given the concern relative to this economic and interest rate scenario, as well as the strength of the loan pipeline, the Committee made the decision to sell all marketable securities in the Bank’s portfolio. These actions, taken in June and August of 2013, eliminated the mark-to-market risk that holding the securities would have posed in a rising interest rate environment and allowed the excess funds to be redeployed into loans. As a result, the Bank had no securities available for sale as of June 30, 2014 and December 31, 2013.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 3 – INVESTMENT SECURITIES (Continued)

As of March 31, 2014, we carried $938 thousand of equity securities corresponding to a fund investment from an acquired bank, which was converted to equity shares as a result of a public offering. These shares were sold at a gain during the three months ended June 30, 2014.

Proceeds and gross gains and (losses) from the sale of securities available for sales for the three and six months ended June 30, 2014 and 2013, respectively, were as follows:

	Three Months ended		Six Months ended
	June 30, 2014		June 30, 2014

Proceeds from sale	$	996	$	996
Gross gain		241		241
Gross (loss)		-		-
Net gains (losses) on sales of securities		241		241

	Three Months ended		Six Months ended
	June 30, 2013		June 30, 2013

Proceeds from sale	$	109,116	$	109,116
Gross gain		576		576
Gross (loss)		-		-
Net gains (losses) on sales of securities		576		576

NOTE 4 – LOANS

Loans at June 30, 2014 and December 31, 2013 were as follows:

	June 30, 2014			December 31, 2013

Real estate
Residential	$	205,223		$	196,238
Commercial		654,398			636,238
Construction		73,330			90,974
		932,951			923,450
Commercial		81,871			85,511
Consumer		47,879			44,068
		1,062,701			1,053,029
Less
Net deferred loan fees		(3,323	)		(2,880	)
Allowance for loan losses		(4,593	)		(3,412	)
	$	1,054,785		$	1,046,737

The Bank has divided the loan portfolio into various portfolio segments, each with different risk characteristics and methodologies for assessing risk. The portfolio segments identified are as follows:

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

Commercial loans are primarily underwritten on the basis of the borrowers’ ability to service such debt from income. When possible, commercial loans are secured by real estate. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. As a general practice, collateral is taken as a security interest in any available real estate, equipment, or other chattel, although loans may also be made on an unsecured basis. Collateralized working capital loans typically are secured by short-term assets whereas long-term loans are primarily secured by long-term assets.

Residential real estate loans are typically secured by 1-4 family residential properties located mostly in Florida and are underwritten in accordance with policies set forth and approved by the Board of Directors, including repayment capacity and source, value of the underlying property, credit history and stability.

Repayment of residential real estate loans is primarily dependent upon the personal income or business income generated by the secured rental property of the borrowers (in the case of investment properties), which can be impacted by the economic conditions in their market area or in the case of loans to foreign borrowers, their country of origin in which their source of income originates from. Risk is mitigated by the fact that the properties securing the Bank’s residential real estate loan portfolio are diverse in type and spread over a large number of borrowers.

Construction loans to borrowers are extended for the purpose of financing the construction of owner occupied and non-owner occupied properties. These loans are categorized as construction loans during the construction period, later converting to commercial or residential real estate loans after the construction is complete and amortization of the loan begins. Construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and on an acceptable percentage of the appraised value of the property securing the loan. Construction loan funds are disbursed periodically based on the percentage of construction completed.

Commercial real estate loans are typically segmented into classes, such as, office buildings and condominiums, retail buildings and shopping centers, warehouse and other. Commercial real estate loans are secured by the subject property and are underwritten based upon standards set forth in the Bank’s policies approved by the Board of Directors. Such standards include, among other factors, loan to value limits, cash flow and debt service coverage and general creditworthiness of the obligors.

Consumer loans are extended for various purposes. This segment also includes home improvement loans, lines of credit, personal loans, and deposit account collateralized loans. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Loans to consumers are extended after a credit evaluation, including the creditworthiness of the borrower, the purpose of the credit, and the primary and secondary sources of repayment.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2014:

Three months ended June 30, 2014	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	413		$	2,012		$	217		$	624		$	360		$	3,626
Provision for loan losses		149			548			(157	)		3,898			134			4,572
Loans charged-off		(98	)		(47	)		-			(4,037	)		(236	)		(4,418	)
Recoveries		277			140			220			162			14			813
Ending balance	$	741		$	2,653		$	280		$	647		$	272		$	4,593

Six months ended June 30, 2014	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	439		$	1,860		$	241		$	537		$	335		$	3,412
Provision for loan losses		(37	)		768			(264	)		3,981			160			4,608
Loans charged-off		(98	)		(204	)		-			(4,046	)		(238	)		(4,586	)
Recoveries		437			229			303			175			15			1,159
Ending balance	$	741		$	2,653		$	280		$	647		$	272		$	4,593

On June 30, 2014 we charged-off in-full our only loan under the shared national credit program, or Shared National Credit, in the amount of $4.0 million. We deemed the loan to be uncollectible in June 2014 and the full loan was charged off as we believed that cash flow to repay the loan was collateral-dependent and other sources of repayment were no more than nominal. The value of the collateral, in this case closely held stock, was determined to be uncertain.

The related Shared National Credit made all scheduled payments through March 31, 2014 including on March 31, 2014. Additionally, the last regulatory Shared National Credit rating indicated a pass rating. A cash flow prediction for the underlying borrower received in the second quarter of 2014 showed imminent negative cash flows. The negative cash flow projections along with other events taking place in June 2014 led the Bank to believe that the outstanding balance would not be collected. The Bank holds no other Shared National Credits and has no existing plans to purchase any other Shared National Credits.

(Continued)

F-13

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2013:

Three months ended June 30, 2013	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	653		$	925		$	477		$	625		$	304		$	2,984
Provision for loan losses		(72	)		750			(411	)		132			(280	)		119
Loans charged-off		(161	)		(179	)		(2	)		(222	)		(57	)		(621	)
Recoveries		134			60			4			54			61			313
Ending balance	$	554		$	1,556		$	68		$	589		$	28		$	2,795

Six months ended June 30, 2013	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	523		$	1,337		$	251		$	399		$	304		$	2,814
Provision for loan losses		(45	)		347			(213	)		296			(370	)		15
Loans charged-off		(162	)		(200	)		(7	)		(222	)		(106	)		(697	)
Recoveries		238			72			37			116			200			663
Ending balance	$	554		$	1,556		$	68		$	589		$	28		$	2,795

(Continued)

F-14

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The allocation of the allowance for loan losses by portfolio segment at June 30, 2014:

	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Consumer		Total
Specific Reserves:
Impaired Loans		119		441		-		178		-		738
Purchase credit impaired loans		20		14		10		-		1		45
Total Specific Reserves		139		455		10		178		1		783
General Reserves		602		2,198		270		469		271		3,810
Total	$	741	$	2,653	$	280	$	647	$	272	$	4,593

Loans:
Individually evaluated for impairment		1,716		5,963		-		1,040		28		8,747
Purchase credit impaired loans		7,118		21,673		1,674		812		68		31,345
Collectively evaluated for impairment		196,389		626,762		71,656		80,019		47,783		1,022,609

Total ending loans balance	$	205,223	$	654,398	$	73,330	$	81,871	$	47,879	$	1,062,701

The allocation of the allowance for loan losses by portfolio segment at December 31, 2013:

	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Consumer		Total
Specific Reserves:
Impaired Loans		32		189		-		183		-		404
Purchase credit impaired loans		13		403		19		-		1		436
Total Specific Reserves		45		592		19		183		1		840
General Reserves		394		1,268		222		354		334		2,572
Total	$	439	$	1,860	$	241	$	537	$	335	$	3,412

Loans:
Individually evaluated for impairment		1,441		6,310		6		1,119		8		8,884
Purchase credit impaired loans		7,018		23,029		2,139		963		70		33,219
Collectively evaluated for impairment		187,779		606,899		88,829		83,429		43,990		1,010,926

Total ending loans balance	$	196,238	$	636,238	$	90,974	$	85,511	$	44,068	$	1,053,029

(Continued)

F-15

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The following table presents loans individually evaluated for impairment by class of loans as of and for the period ended June 30, 2014 and December 31, 2013, respectively:

	June 30, 2014						December 31, 2013
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated

With no related allowance recorded:
Residential real estate	$	1,057	$	1,023	$	-	$	1,596	$	1,384	$	-
Commercial real estate
Multifamily		-		-		-		10		6		-
Owner occupied		1,873		1,658		-		4,077		3,595		-
Non-owner occupied		617		583		-		491		306		-
Secured by Farmland		1,905		1,868		-		2,310		1,934		-
Construction		-		-		-		88		6		-
Commercial		277		266		-		388		372		-
Consumer		28		28		-		9		8		-
With allowance recorded:
Residential real estate		698		693		119		57		57		32
Commercial real estate
Multifamily		-		-		-		-		-		-
Owner occupied		1,703		1,650		440		509		469		189
Non-owner occupied		204		204		1		-		-		-
Secured by Farmland		-		-		-		-		-		-
Construction		-		-		-		-		-		-
Commercial		779		774		178		949		747		183
Consumer		-		-		-		-		-		-

Total	$	9,141	$	8,747	$	738	$	10,484	$	8,884	$	404

(Continued)

F-16

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

Average impaired loans and related interest income for three and six months ended June 30, 2014 and 2013, respectively, were as follows:

	Three months ended June 30, 2014						Six months ended June 30, 2014
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized

With no related allowance recorded:
Residential real estate	$	1,032	$	5	$	-	$	819	$	5	$	-
Commercial real estate
Multifamily		-		-		-		-		-		-
Owner occupied		1,855		-		-		2,806		13		-
Non-owner occupied		597		1		-		769		1		-
Secured by Farmland		1,893		8		-		1,914		8		-
Construction		-		-		-		3		-		-
Commercial		268		2		-		270		6		-
Consumer		28		-		-		54		-		-
With allowance recorded:
Residential real estate		695		4		-		466		6		-
Commercial real estate
Multifamily		-		-		-		-		-		-
Owner occupied		1,664		12		-		1,248		17		-
Non-owner occupied		204		-		-		102		-		-
Secured by Farmland		-		-		-		-		-		-
Construction		-		-		-		-		-		-
Commercial		781		4		-		815		7		-
Consumer		-		-		-		-		-		-

Total	$	9,017	$	36	$	-	$	9,266	$	63	$	-

(Continued)

F-17

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

	Three months ended June 30, 2013						Six months ended June 30, 2013
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized

With no related allowance recorded:
Residential real estate	$	972	$	-	$	-	$	1,352	$	3	$	-
Commercial real estate
Multifamily		7		-		-		235		8		-
Owner occupied		3,527		6		-		3,165		38		-
Non-owner occupied		329		-		-		330		2		-
Secured by Farmland		267		-		-		267		-		-
Construction		-		-		-		-		-		-
Commercial		500		1		-		351		5		-
Consumer		123		-		-		149		-		-
With allowance recorded:
Residential real estate		851		-		-		658		2		-
Commercial real estate
Multifamily		-		-		-		-		-		-
Owner occupied		872		-		-		933		15		-
Non-owner occupied		-		-		-		-		-		-
Secured by Farmland		-		-		-		-		-		-
Construction		-		-		-		-		-		-
Commercial		769		-		-		561		-		-
Consumer		-		-		-		479		3		-

Total	$	8,217	$	7	$	-	$	8,480	$	76	$	-

(Continued)

F-18

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2014:

			Loans Past Due Over
	Nonaccrual		90 Days Still Accruing

Residential real estate	$	3,858	$	-
Commercial real estate		15,964		-
Construction		222		-
Commercial		1,381		-
Consumer		28		-

Total	$	21,453	$	-

The reported amount includes $15,514 of nonaccrual purchase credit impaired loans. Loans are placed on nonaccrual and accounted for under the cost recovery method when repayment is expected through foreclosure or repossession of the collateral, and the timing of foreclosure or repossession cannot be estimated with reasonable certainty. These loans are measured for impairment under the Bank’s policy for measuring impairment on collateral dependent impaired loans that were originated by the Bank and included in impaired loans if there is a subsequent decline in the value of the collateral.

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2013:

			Loans Past Due Over
	Nonaccrual		90 Days Still Accruing

Residential real estate	$	4,127	$	-
Commercial real estate		17,159		-
Construction		864		-
Commercial		1,624		-
Consumer		8		-

Total	$	23,782	$	-

The reported amount includes $17,260 of nonaccrual purchase credit impaired loans. Loans are placed on nonaccrual and accounted for under the cost recovery method when repayment is expected through foreclosure or repossession of the collateral, and the timing of foreclosure or repossession cannot be estimated with reasonable certainty. These loans are measured for impairment under the Bank’s policy for measuring impairment on collateral dependent impaired loans that were originated by the Bank and included in impaired loans if there is a subsequent decline in the value of the collateral.

(Continued)

F-19

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The following table presents the aging of the recorded investment in past due loans as of June 30, 2014 by class of loans:

	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total

June 30, 2014
Residential real estate	$	676	$	191	$	3,858	$	4,725	$	200,498	$	205,223
Commercial Real Estate
Multifamily		-		-		-		-		32,732		32,732
Owner Occupied		515		-		8,623		9,138		207,174		216,312
Non-owner occupied		-		296		4,494		4,790		334,801		339,591
Secured by farmland		-		416		2,847		3,263		62,500		65,763
Construction		-		-		222		222		73,108		73,330
Commercial		31		139		1,381		1,551		80,320		81,871
Consumer		-		79		28		107		47,772		47,879
Total	$	1,222	$	1,121	$	21,453	$	23,796	$	1,038,905	$	1,062,701

The following table presents the aging of the recorded investment in past due loans as of December 31, 2013 by class of loans:

	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total

December 31, 2013
Residential real estate	$	1,794	$	63	$	4,127	$	5,984	$	190,254	$	196,238
Commercial Real Estate
Multifamily		-		-		6		6		56,035		56,041
Owner Occupied		176		251		10,191		10,618		193,878		204,496
Non-owner occupied		-		889		4,032		4,921		300,434		305,355
Secured by farmland		415		-		2,930		3,345		67,001		70,346
Construction		1,018		-		864		1,882		89,092		90,974
Commercial		195		-		1,624		1,819		83,692		85,511
Consumer		319		6		8		333		43,735		44,068
Total	$	3,917	$	1,209	$	23,782	$	28,908	$	1,024,121	$	1,053,029

(Continued)

F-20

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

Troubled Debt Restructurings:

The bank had no non-accruing troubled debt restructurings at June 30, 2014.

The following table is a summary of the troubled debt restructurings that are performing in accordance with the restructured terms at June 30, 2014.

	Number of Loans		Recorded Investment

Residential real estate		-	$	-
Commercial real estate
Multifamily		-		-
Owner Occupied		1		543
Non-owner Occupied		1		378
Secured by farmland		-		-
Construction		-		-
Commercial		-		-
Consumer		-		-
Total		2	$	921

The Bank was not committed to lend any additional amounts as of June 30, 2014 to customers with outstanding loans that are classified as troubled debt restructurings.

There were no loans modified as troubled debt restructurings during the six months ended June 30, 2014 and 2013.

The following table is a summary of troubled debt restructurings that are performing in accordance with the restructured terms at December 31, 2013:

	Number of Loans		Recorded Investment

Residential real estate		1	$	64
Commercial real estate
Multifamily		-		-
Owner Occupied		-		-
Non-owner Occupied		1		382
Secured by farmland		-		-
Construction		-		-
Commercial		-		-
Consumer		-		-
Total		2	$	446

(Continued)

F-21

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

The following table is a summary of non-accruing troubled debt restructurings at December 31, 2013:

	Number of Loans		Recorded Investment

Residential real estate		-	$	-
Commercial real estate
Multifamily		-		-
Owner Occupied		1		534
Non-owner Occupied		-		-
Secured by farmland		-		-
Construction		-		-
Commercial		-		-
Consumer		-		-
Total		1	$	534

The Bank was not committed to lend any additional amounts as of December 31, 2013 to customers with outstanding loans that are classified as troubled debt restructurings.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

Credit Quality Indicators:

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis is performed at least annually. The Bank uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans not meeting the criteria above include homogeneous loans, which includes residential real estate and consumer loans. The credit quality indicator used for loans not meeting the criteria above is payment status and historical payment experience. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(Continued)

F-22

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

			Special
	Pass		Mention		Substandard		Doubtful		Total

June 30, 2014
Residential real estate	$	195,762	$	3,297	$	6,164	$	-	$	205,223
Commercial real estate
Multifamily		32,492		240		-		-		32,732
Owner Occupied		190,324		12,447		13,541		-		216,312
Non-owner Occupied		328,342		6,478		4,771		-		339,591
Secured by farmland		61,407		415		3,941				65,763
Construction		70,918		1,596		816		-		73,330
Commercial		79,506		513		1,852		-		81,871
Consumer		47,705		146		28		-		47,879
Total	$	1,006,456	$	25,132	$	31,113	$	-	$	1,062,701

			Special
	Pass		Mention		Substandard		Doubtful		Total

December 31, 2013
Residential real estate	$	186,169	$	3,950	$	6,119	$	-	$	196,238
Commercial real estate
Multifamily		55,113		568		360		-		56,041
Owner Occupied		174,920		14,060		15,516		-		204,496
Non-owner Occupied		291,302		9,938		4,115		-		305,355
Secured by farmland		65,908		415		4,023		-		70,346
Construction		87,512		2,012		1,450		-		90,974
Commercial		82,860		569		2,082		-		85,511
Consumer		43,654		406		8		-		44,068
Total	$	987,438	$	31,918	$	33,673	$	-	$	1,053,029

The Bank acquired loans through the acquisitions of First Community Bank of America, The Palm Bank and First Community Bank of Southwest Florida, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans at June 30, 2014 and December 31, 2013 was approximately $31,300 and 32,783; respectively.

The Bank maintained an allowance for loan losses of $45 and $436 at June 30, 2014 and December 31, 2013; respectively, for loans acquired with deteriorated quality. During the six months ended June 30, 2014 and 2013 the company accreted $251 and $0 respectively into interest income on these loans. The remaining accretable discount was $2,835 at June 30, 2014.

(Continued)

F-23

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 4 – LOANS (Continued)

Loans related to the acquisition of First Community Bank of Southwest Florida for which it was probable at acquisition that all contractually required payments would not be collected were as follows:

	2013

Contractually required payments receivable of loans purchased during the year (assuming no prepayments)	$	35,650

Cash flows expected to be collected at acquisition	$	24,030
Fair value of acquired loans at acquisition	$	20,901

NOTE 5 – FAIR VALUES

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels that may be used to measure fair value:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

The fair value of other real estate owned and impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. For the commercial real estate impaired loans and other real estate owned, appraisers may use either a single valuation approach or a combination of approaches such as comparative sales, cost or the income approach. A significant unobservable input in the income approach is the estimated income capitalization rate for a given piece of collateral. At June 30, 2014 and December 31, 2013, the range of capitalization rates utilized to determine the fair value of the underlying collateral ranged from 8.0% to 12.0%. Adjustments to comparable sales may be made by the appraiser to reflect local market conditions or other economic factors and may result in changes in the

(Continued)

F-24

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 5 – FAIR VALUES (Continued)

fair value of a given asset over time. As such, the fair value of impaired loans and other real estate owned are considered a Level 3 in the fair value hierarchy.

The following table presents the material assets reported on the balance sheet at their fair value, by level within the fair value hierarchy. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Bank had no securities available for sale at June 30, 2014 and December 31, 2013.

The fair value of assets measured on a non-recurring basis were as follows:

	June 30, 2014 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Fair Value Measured on a Non-Recurring Basis:
Impaired Loans
Commercial	$	-	$	-	$	596
Commercial real estate		-		-		1,413
Residential real estate		-		-		574
Construction		-		-		-
Total Impaired Loans		-		-		2,583
Other real estate owned
Commercial		-		-		5,913
Residential		-		-		1,706
Total other real estate owned		-		-		7,619
Total	$	-	$	-	$	10,202

Impaired loans, which had a specific allowance for loan losses allocated, had a recorded investment of $3,321 with a valuation allowance of $738 at June 30, 2014, resulting in an additional provision for loan losses of $393 and $433 for the three and six month period ending June 30, 2014, respectively.

Other real estate owned which is measured at fair value less costs to sell, had a net carrying amount of $7,619, which is made up of the outstanding balance of $9,908, net of a valuation allowance of $2,289 at June 30, 2014, resulting in a write-down of $184 and $549 for the three and six month period ending June 30, 2014, respectively.

(Continued)

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Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 5 – FAIR VALUES (Continued)

	December 31, 2013 Using:
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Fair Value Measured on a Non-Recurring Basis:
Impaired Loans
Commercial	$	-	$	-	$	564
Commercial real estate		-		-		280
Residential real estate		-		-		25
Construction		-		-		-
Total Impaired Loans		-		-		869
Other real estate owned
Commercial		-		-		5,714
Residential		-		-		2,244
Total other real estate owned		-		-		7,958
Total	$	-	$	-	$	8,827

Impaired loans, which had a specific allowance for loan losses allocated, had a recorded investment of $1,273 with a valuation allowance of $404 at December 31, 2013, resulting in an additional provision for loan losses of $353 for the year ending December 31, 2013.

Other real estate owned which is measured at fair value less costs to sell, had a net carrying amount of $7,958, which is made up of the outstanding balance of $10,667, net of a valuation allowance of $2,709 at December 31, 2013, resulting in a write-down of $1,562 for the year ending December 31, 2013.

The estimated fair values and related carrying amounts of the Bank's financial instruments at June 30, 2014 and December 31, 2013 approximate as follows:

			Fair Value Measurements at
			June 30, 2014 Using:
	Carrying
	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	258,944	$	258,994	$	-	$	-
Federal Home Loan Bank stock		8,639		N/A		N/A		N/A
Loans, net		1,054,785		-		-		1,053,317
Accrued interest receivable		3,015		-		-		3,015

Financial liabilities
Deposits	$	1,135,451	$	-	$	-	$	1,118,203
FHLB advances		165,500		-		-		165,285
Subordinated debentures		3,000		-		-		3,000
Accrued interest payable		232		-		-		232

(Continued)

F-26

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 5 – FAIR VALUES (Continued)

			Fair Value Measurements at
			December 31, 2013 Using:
	Carrying
	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	143,452	$	143,452	$	-	$	-
Federal Home Loan Bank stock		8,210		N/A		N/A		N/A
Loans, net		1,046,737		-		-		1,049,286
Accrued interest receivable		3,013		-		-		3,013

Financial liabilities
Deposits	$	1,041,043	$	-	$	-	$	1,029,259
FHLB advances		150,500		-		-		150,905
Subordinated debentures		3,000		-		-		3,000
Accrued interest payable		181		-		-		181

Fair value methods and assumptions are periodically evaluated by the Bank. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents – For these short-term highly liquid instruments, the carrying amount is a reasonable estimate of fair value.

Investment securities – Fair values for investment securities, excluding FHLB and Independent Bankers’ Bank stock, are discussed above. It was not practicable to determine the fair value of FHLB and IBB stock due to restrictions placed on their transferability.

Loans – The fair value measurement of certain impaired loans is discussed above. For variable-rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for all other loans are estimated using discounted cash flow analyses, using the interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. An overall valuation adjustment was made for specific credit risks as well as general portfolio credit risk. The methods utilized to estimate the fair value do not necessarily represent an exit price.

Accrued interest receivable and payable – The carrying amount of accrued interest receivable and payable approximates fair value due to the short-term nature of these financial instruments.

Deposits – The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable upon demand at June 30, 2014 and December 31, 2013. The fair value of fixed-maturity

certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Short-term borrowings – Rates currently available to the Bank for borrowings with similar terms and remaining maturities are used to estimate fair value of existing borrowings by discounting future cash flows.

Long-term debt – Rates currently available to the Bank for debt with similar terms and remaining maturities are used to estimate fair value of existing debt by discounting future cash flows.

(Continued)

F-27

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 5 – FAIR VALUES (Continued)

Commitments to extend credit and standby letters of credit – The value of the unrecognized financial instruments is estimated based on the related deferred fee income associated with the commitments, which is not material to the Bank's financial statements at June 30, 2014 and December 31, 2013.

NOTE 6 – EARNINGS PER COMMON SHARE

Basic earnings per common share is net income divided by weighted average number of shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under stock options and restricted stock.

	Three months
	ended June 30,
	2014		2013
Basic
Net Income	$	230	$	594
Weighted average shares of common stock outstanding		92,625,063		76,275,731
Basic earnings per common share	$	0.00	$	0.01


Diluted
Net Income	$	230	$	594
Weighted average shares of common stock outstanding		92,625,063		76,275,731
Add: Dilutive effects of assumed exercises
of Stock options		-		176,805
Average shares and dilutive potential common shares		92,625,063		76,452,536
Diluted EPS	$	0.00	$	0.01

	Six months
	ended June 30,
	2014		2013
Basic
Net Income	$	2,756	$	926
Weighted average shares of common stock outstanding		90,076,305		75,413,219
Basic earnings per common share	$	0.03	$	0.01


Diluted
Net Income	$	2,756	$	926
Weighted average shares of common stock outstanding		90,076,305		75,413,291
Add: Dilutive effects of assumed exercises
of Stock options		-		221,006
Average shares and dilutive potential common shares		90,076,305		75,634,297
Diluted EPS	$	0.03	$	0.01

(Continued)

F-28

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 7 – REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Federal Deposit Insurance Corporation (FDIC). Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined).

To be categorized as well capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. As of June 30, 2014 and December 31, 2013 the Bank meets all capital adequacy requirements to be considered well capitalized. There are no conditions or events since quarter end that management believes have changed the Bank’s classification as well capitalized.

The Bank's actual and required capital ratios as of June 30, 2014 and December 31, 2013 are as follows:

						Required					Well Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provision
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2014
Total capital to risk weighted assets	$	143,934		12.42	%	$	92,677		8.0	%	$	115,847		10.0	%
Tier 1 capital to risk weighted assets		138,741		11.98	%		46,339		4.0	%		69,508		6.0	%
Tier 1 capital to average assets		138,741		9.73	%		57,024		4.0	%		71,280		5.0	%

						Required					Well Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provision
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2013
Total capital to risk weighted assets	$	124,020		10.97	%	$	90,407		8.0	%	$	113,008		10.0	%
Tier 1 capital to risk weighted assets		120,008		10.62	%		45,203		4.0	%		67,805		6.0	%
Tier 1 capital to average assets		120,008		9.36	%		51,292		4.0	%		64,115		5.0	%

The capital ratios for the holding company C1 Financial, Inc. are not presented since they were same as those presented for the Bank.

(Continued)

F-29

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2014 and 2013
(Dollars in thousands, except per share data)

NOTE 7 – REGULATORY MATTERS (Continued)

During 2014, until the date of issuance of the Financial Statements, the Holding Company raised an additional $15.6 million in capital through the issuance of common stock, which were all invested in the Bank during the six months ended June 30, 2014.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The financial statements do not reflect various commitments and contingent liabilities which arise in the normal course of business and which involve elements of credit risk, interest rate risk and liquidity risk. These commitments and contingent liabilities are commitments to extend credit and standby letters of credit. A summary of these commitments and contingent liabilities is as follows:

	June 30, 2014		December 31,
2013

Unused lines of credit	$	50,597	$	62,535
Standby letters of credit		1,605		1,976
Commitments to fund loans		106,355		46,575

There were no standby letters of credit to related parties at June 30, 2014 or December 31, 2013.

NOTE 9 – PARENT COMPANY ONLY FINANCIAL INFORMATION

At June 30, 2014 the only asset in the Parent Company’s balance sheet was the investment in its subsidiary C1 Bank, for a total of $140,191 and there were no liabilities. Shareholders’ equity of the Parent Company was $140,191 at June 30, 2014. There was no income or expenses at the Parent Company besides the Equity in undistributed subsidiary income from C1 Bank in the six months ended June 30, 2014.

F-30

Table of Contents

Crowe Horwath LLP

Independent Member Crowe Horwath International

Report of Independent Registered Public Accounting Firm

C1 Financial, Inc.

St. Petersburg, Florida

We have audited the accompanying consolidated balance sheets of C1 Financial, Inc. as of December 31, 2013 and 2012, and the related consolidated income statements, statements of comprehensive income, changes in stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

	/s/ Crowe Horwath LLP
	Crowe Horwath LLP

Fort Lauderdale, Florida

May 30, 2014

F-31

Table of Contents

C1 FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2013 and 2012

(Dollars in thousands, except per share data)

	2013		2012
ASSETS
Cash and cash equivalents	$	143,452	$	77,038
Time deposits in other financial institutions		-		249
Securities available for sale		-		109,423
Federal Home Loan Bank stock, at cost		8,210		4,664
Loans receivable (net of allowance of $3,412 and $2,814 at year ends 2013 and 2012, respectively)		1,046,737		659,989
Premises and equipment, net		57,284		38,894
Other real estate owned		41,049		19,027
Bank owned life insurance		8,748		8,575
Accrued interest receivable		3,013		2,963
Core deposit intangible		1,485		370
Deferred income taxes		-		4,980
Prepaid expenses		2,071		3,988
Other assets		11,322		7,906
Total assets	$	1,323,371	$	938,066

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Non-interest bearing	$	194,383	$	108,862
Interest bearing		846,660		651,179
Total deposits		1,041,043		760,041

Federal Home Loan Bank advances		150,500		75,300
Other borrowings		3,000		3,000
Other liabilities		7,014		3,278
Total liabilities		1,201,557		841,619
Commitments and contingent liabilities (Note10)

Stockholders’ equity
Series E Non-Cumulative Perpetual preferred stock;
par and liquidation value $1.00; 10,000,000 authorized;
7,233,344 issued and outstanding at December 31, 2012		-		7,233
Common stock, par value $1.00;
100,000,000 shares authorized; 85,518,521 and 67,310,404 shares issued and outstanding at December 31, 2013, and 2012		85,519		67,310
Additional paid-in capital		20,604		18,145
Treasury stock, at cost (2,479 shares at December 31, 2012)		-		(27	)
Retained earnings		15,691		3,738
Accumulated other comprehensive income		-		48
Total stockholders’ equity		121,814		96,447
Total liabilities and stockholders’ equity	$	1,323,371	$	938,066

See accompanying notes to the consolidated financial statements.

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C1 FINANCIAL, INC.

CONSOLIDATED INCOME STATEMENTS

Years ended December 31, 2013 and 2012

(Dollars in thousands, except per share data)

	2013		2012
Interest income
Loans, including fees	$	47,362	$	35,186
Securities		705		2,739
Federal funds sold and other		432		276
Total interest income		48,499		38,201

Interest expense
Savings and interest bearing demand deposits		1,889		1,653
Time deposits		2,948		3,212
Federal Home Loan Bank advances		1,753		1,196
Other borrowings		60		66
Total interest expense		6,650		6,127

Net interest income		41,849		32,074

Provision for loan losses		1,218		2,358

Net interest income after provision for loan losses		40,631		29,716

Other income
Gain on sale of securities		305		3,035
Gain on sale of loans		1,169		1,170
Services charges and fees		1,898		1,119
Bargain purchase gain		13,462		6,235
Gain on sale of other real estate, net		686		455
Bank owned life insurance		173		206
Mortgage banking fees		590		590
Other		3,365		2,241
Total other income		21,648		15,051

Other noninterest expenses
Salaries and employee benefits		17,015		14,281
Occupancy expense		3,630		2,590
Furniture and equipment		1,841		1,567
Regulatory assessments		1,096		798
Network services and data processing		3,402		2,027
Printing and office supplies		481		398
Postage and delivery		256		221
Advertising and promotion		3,422		2,830
Other real estate owned, net of rental income		2,163		1,495
Other real estate owned – valuation allowance expense		1,739		548
Amortization of intangible assets		434		404
Professional fees		2,785		3,106
Loan collection expenses		710		1,051
Merger related expense		1,010		905
Other operating expense		2,653		1,742
Total other operating expenses		42,637		33,963

See accompanying notes to the consolidated financial statements.

F-33

Table of Contents

C1 FINANCIAL, INC.

CONSOLIDATED INCOME STATEMENTS

Years ended December 31, 2013 and 2012

(Dollars in thousands, except per share data)

		2013		2012
Income before income taxes		19,642		10,804

Income tax expense (benefit)		7,652		(2,304	)

Net income	$	11,990	$	13,108

Earnings per common share:
Basic	$	0.15	$	0.18
Diluted	$	0.15	$	0.18

See accompanying notes to the consolidated financial statements.

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C1 FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2013 and 2012

(Dollars in thousands, except per share data)

	2013			2012

Net income	$	11,990		$	13,108

Other comprehensive income:
Unrealized gains/losses on available for sale securities:
Unrealized holding gain (loss) arising during the period		228			3,969
Reclassification adjustments for gains included in net income*		(305	)		(3,035	)
Tax effect		29			(29	)

Total other comprehensive income (loss), net of tax		(48	)		905

Comprehensive income	$	11,942		$	14,013

*Amounts for realized gains on available for sale securities are included in gain on sale of securities in the consolidated income statements. Income taxes associated with the reclassification adjustment for gains included in net income for the years ended December 31, 2013, and 2012 were $29, and ($29), respectively. The amounts related to income taxes on gains included in net income are included in income tax expense (benefit) in the consolidated income statements.

See accompanying notes to the consolidated financial statements.

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C1 FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Years ended December 31, 2013 and 2012

(Dollars in thousands, except per share data)

																		Accumulated
												Retained						Other
	Preferred Stock					Common			Additional			Earnings			Treasury			Comprehensive
	Series A,B,C		Series E			Stock			Paid in Capital			(Deficit)			Stock			Income (Loss)			Total

Balance at January 1, 2012	$	−	$	7,233		$	60,064		$	17,327		$	(9,147	)	$	(27	)	$	(857	)	$	74,593

Issuance of common stock, net of costs		−		−			7,246			818			−			−			−			8,064
Net income		−		−			−			−			13,108			−			−			13,108
Other		−		−			−			−			(223	)		−			−			(223	)
Other comprehensive income		−		−			−			−			−			−			905			905

Balance at December 31, 2012	$	−	$	7,233		$	67,310		$	18,145		$	3,738		$	(27	)	$	48		$	96,447

Issuance of common stock, net of costs		−		−			10,978			2,484			−			−			−			13,462
Conversion of preferred stock to common stock		−		(7,233	)		7,233			−			−			−			−			−
Retirement of treasury stock		−		−			(2	)		(25	)		−			27			−			−
Net income		−		−			−			−			11,990			−			−			11,990
Other		−		−			−			−			(37	)		−			−			(37	)
Other comprehensive loss		−		−			−			−			−			−			(48	)		(48	)

Balance at December 31, 2013	$	−	$	−		$	85,519		$	20,604		$	15,691		$	−		$	−		$	121,814

See accompanying notes to the consolidated financial statements.

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C1 FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2013 and 2012

(Dollars in thousands, except per share data)

	2013			2012
Cash flows from operating activities
Net income	$	11,990		$	13,108
Adjustments to reconcile net income to net cash from
operating activities:
Provision for loan losses		1,218			2,358
Depreciation		2,069			1,601
Net accretion of purchase accounting adjustments		(3,239	)		(2,703	)
Net amortization of securities		478			1,752
Amortization of other intangible assets		434			405
Increase in goodwill		-			(250	)
Increase in other real estate owned valuation allowance		1,739			548
Increase in cash surrender value of BOLI		(173	)		(206	)
Gain on sale of securities		(305	)		(3,035	)
Bargain purchase gain		(13,462	)		(6,235	)
Deferred tax asset		5,660			(2,304	)
Gain on sales of loans		(1,169	)		(1,170	)
Gain on sales of other real estate owned		(686	)		(455	)
Change in assets and liabilities:
Accrued interest receivable and other assets		(1,296	)		(2,809	)
Other liabilities		4,099			(221	)
Net cash from operating activities		7,357			384

Cash flows used in investing activities
Net change in time deposits in other financial institutions		249			918
Loan originations, net of repayments		(225,493	)		(65,665	)
Proceeds from sale of foreclosed assets		9,855			6,936
Purchase of securities available for sale		-			(149,727	)
Proceeds from sales, calls and maturities of securities		130,673			186,719
Purchase of Federal Home Loan Bank stock		(2,620	)		-
Proceeds of sale of Federal Home Loan Bank stock		-			8,394
Payments for the purchase of premises and equipment		(14,829	)		(9,363	)
Net cash transferred in bank acquisition		41,819			(3,822	)
Net cash used by investing activities		(60,346	)		(25,610	)

Cash flows provided by financing activities
Net proceeds from issuance of common stock		13,462			8,064
Net change in deposits		44,341			104,092
Net change in federal funds purchased and securities sold
under agreement to repurchase		-			(13	)
Repayment of Federal Home Loan Bank advances		(28,400	)		(23,129	)
Proceeds from Federal Home Loan Bank advances		90,000			-
Net cash provided by financing activities		119,403			89,014

Net change in cash and cash equivalents		66,414			63,788

Cash and cash equivalents at beginning of year		77,038			13,250

Cash and cash equivalents at end of year	$	143,452		$	77,038

Supplemental information:
Cash paid during the year for interest	$	6,626		$	6,127
Cash paid during the year for income taxes		155			−

Non-cash items:
Transfers from loans to other real estate owned		6,829			9,916

See accompanying notes to the consolidated financial statements.

F-37

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Principles of Consolidation: The consolidated financial statements as of and for the year ended December 31, 2013 include C1 Financial, Inc. and its wholly owned subsidiary, C1 Bank, together referred to as “the Company”. The financial statements as of and for the year ended December 31, 2012 only include C1 Bank because C1 Financial, Inc. became the parent company of C1 Bank only after the share reorganization that took place in December 2013.

C1 Financial, Inc. is the Parent Company for its wholly owned subsidiary, C1 Bank. C1 Financial, Inc. is a Bank Holding Company and a Florida Corporation organized in 2013, and C1 Bank became its wholly owned subsidiary after the share reorganization that took place on December 19, 2013, when 81,427,130 common shares of C1 Financial Inc. were issued to C1 Bank shareholders in exchange for their C1 Bank shares, with C1 Financial Inc. becoming the owner of all 81,427,130 outstanding common shares of C1 Bank as of that date.

After the reorganization and up to December 31, 2013, C1 Financial, Inc. raised $5,605 of new capital through the issuance of 4,091,391 common shares. All this capital was injected to C1 Bank resulting in C1 Financial, Inc. purchasing an additional 4,091,391 common shares of C1 Bank. At December 31, 2013, C1 Financial Inc. had 85,518,521 common shares outstanding and owned 85,518,521 common shares of C1 Bank.

C1 Bank (the "Bank") is a state chartered bank and is subject to the regulations of certain government agencies. During 2011, the Bank changed its name from Community Bank of Manatee to Community Bank & Company, and during 2012, the Bank changed its name to C1 Bank. The Bank provides a variety of banking services to individuals through its 27 offices located in 7 counties (Pinellas, Hillsborough, Manatee, Charlotte, Pasco, Lee and Miami-Dade). Its primary deposit products are checking, money market, savings, and term certificate accounts, and its primary lending products are commercial real estate loans, residential real estate loans, commercial loans, and consumer loans. Substantially all loans are secured by specific items of collateral including commercial and residential real estate, business assets and consumer assets. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the area.

As described in Note 2, on May 31, 2012, the Bank purchased The Palm Bank and acquired substantially all of the assets and assumed all of the deposits. On August 2, 2013, the Bank acquired First Community Bank of Southwest Florida through a FDIC assisted transaction, consolidating substantially all of its assets and assuming all of the deposits.

While the Company’s chief decision makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated into one reportable operating segment.

Reclassification: Certain account reclassifications have been made to the 2012 financial statements in order to conform to classifications used in the current year. Reclassifications had no effect on 2012 net income or stockholders’ equity.

Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for loan losses, fair value of other real estate owned, deferred tax assets, other intangible assets and fair values of financial instruments are particularly subject to change.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and Cash Equivalents: Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days, excess balances held at the Federal Reserve Bank of Atlanta, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, bank acquisitions, interest bearing deposits in other financial institutions, and other borrowings.

Securities Available for Sale: When purchased, securities are classified as available for sale when management intends to hold the securities for an indefinite period of time, or when the securities may be used for tactical asset/liability purposes and may be sold from time to time to effectively manage interest rate exposure, prepayment risk and liquidity needs.

Securities available for sale are carried at fair value with unrealized gains and losses reported in other comprehensive income, net of income tax. Realized gains (losses) on securities available for sale are included in other income. Gains and losses on sales of securities are determined on the specific identification method. Amortization of premiums and accretion of discounts, computed by the interest method over their contractual lives, is included in interest income.

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Preferred Stock: During 2010 the Bank issued 7,233,344 shares of Series E Non-Cumulative Preferred stock with a par value of $1.00. Holders of Class E Preferred stock participate in any dividends and other distributions declared on the Common Stock. During 2013, all Series E Non-Cumulative Perpetual preferred stock was converted to common stock. No dividends were paid during the period the Series E Non-Cumulative Perpetual preferred stock was outstanding.

Concentration of Credit Risk: Most of the Bank’s business activity is with customers located within Manatee, Pinellas, Sarasota, Pasco, Charlotte, Desoto, Lee, Hillsborough and Miami-Dade Counties. Therefore, the Bank’s exposure to credit risk is significantly affected by changes in the economy in these counties. The Bank has made commercial loans to Brazilian corporations, which at December 31, 2013 and 2012 exceeded 1% of total assets. These loans to Brazilian borrowers are secured by collateral outside of the U.S., and outstanding balances at December 31, 2013 and 2012 were $46,400 and $22,700, representing 3.5% and 2.4% of total assets, respectively.

Loans: Loans, excluding Purchased Credit Impaired loans which have shown evidence of deterioration since origination, which management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. The recorded investment in loans is the outstanding principal balance, net of partial charge offs. It does not include accrued interest receivable or net deferred loan fees due to immateriality.

A loan is considered a troubled debt restructured loan based on individual facts and circumstances. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. If the loan is prepaid, the remaining unamortized fees and costs are charged or credited to interest income.

A loan is moved to nonaccrual status in accordance with the Bank’s policy, typically after 90 days of non-payment, or less than 90 days of non-payment if management determines that the full timely collection of principal and interest becomes doubtful. Past due status is based on the contractual terms of the loan.

(Continued)

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Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer loans are typically charged off no later than 120 days past due.

Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on cost-recovery method with cash payments applied as principal reduction, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Credit Impaired Loans (PCI Loans): As part of business acquisitions (First Community Bank of America, The Palm Bank and First Community Bank of Southwest Florida), the Bank acquired loans that have evidence of credit deterioration since origination. These acquired loans are recorded at their fair value, such that there is no carryover of the allowance for loan losses.

Such purchased loans are accounted for individually or aggregated into pools of loans based on common risk characteristics. The Bank estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (non-accretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded through the allowance for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required for each loan portfolio segment using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

A loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

All substandard commercial, commercial real estate and construction loans are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, may be collectively evaluated for impairment, and accordingly, not separately identified for impairment disclosures.

(Continued)

F-40

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Bank determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Bank over the most recent two years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.

These economic factors include consideration of the following: levels of and trends in delinquencies and nonaccrual loans; trends in volume and terms of loans; changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; changes in the quality of the loan review system; changes in the underlying collateral; changes in competition, legal and regulatory environment; and effects of changes in credit concentrations.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost, less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 10 to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line (or accelerated) method with useful lives ranging from 3 to 10 years. Costs of major additions and improvements are capitalized. Maintenance, repairs and minor improvements are expensed as incurred. Gains and losses on dispositions are included in current operations.

Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Other Intangible Assets: Other intangible assets consist of core deposit intangible arising from the First Community Bank of America, The Palm Bank and First Community Bank of Southwest Florida acquisitions. These intangible assets are amortized on an accelerated method over their estimated useful life.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when funded.

Federal Home Loan Bank (FHLB) Stock: The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Other Real Estate Owned: Assets acquired through foreclosure or other proceedings are initially recorded at fair value at the date of foreclosure less estimated costs to sell, which establishes a new cost basis. After foreclosure, valuations are periodically performed by management and foreclosed assets held for sale are carried at the lower of cost or fair value less estimated costs of disposal. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for loan losses. Property is evaluated regularly to ensure the recorded amount is supported by its current fair value and valuation allowances are adjusted as necessary. Expenses from the operations of other real estate owned and changes in the valuation allowance are included in expenses from other real estate owned, net of rental income.

(Continued)

F-41

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Bank-Owned Life Insurance: As part of the acquisition of First Community Bank of America, the Bank acquired life insurance policies on certain executives of the acquired bank. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Income Taxes: Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. The deferred tax assets and liabilities represent the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Bank recognizes interest and/or penalties related to income tax matters in income tax expense.

Advertising Costs: Advertising costs are expensed as incurred, except for certain costs related to sports marketing contracts, which are initially capitalized and amortized during the expected time during which the Bank will benefit from the agreement.

Information Technology Costs: Information technology costs are expensed as incurred, except for software licenses which are capitalized and amortized during their expected useful life.

Intellectual Property Rights: The Information Technology team of the Bank develops information technology solutions for the benefit of the Bank. In some cases, the Bank files patents to protect the intellectual property. All related costs are expensed as incurred and the patents have no carrying value in the balance sheet.

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options.

Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Transfers and Servicing of Financial Assets: A transfer of financial assets is accounted for as a sale when control of the transferred asset is surrendered. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Bank, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Servicing rights and other retained interests in the sold assets are recorded at fair value at the date of transfer. The fair values of servicing rights and other retained interests are determined at the date of transfer using the present value of estimated future cash flows, using assumptions that market participants would use in their estimates of values.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters as of December 31, 2013 that will have a material effect on the financial statements.

(Continued)

F-42

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income (loss): Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, net of related income tax, which are also recognized as separate components of equity.

Restrictions on Cash: A portion of cash on hand is required to be maintained to meet regulatory reserve and clearing requirements.

Dividend Restriction: Banking regulations require maintaining certain capital levels and impose certain restrictions on the payment of dividends.

NOTE 2 – BUSINESS COMBINATIONS

The following table summarizes the consideration received for First Community Bank of Southwest Florida and the fair value of the assets acquired and liabilities assumed at the acquisition date:

	August 2,			Measurement		December 31,
	2013			Period		2013

Assets
Cash and cash equivalents	$	18,645		$	-	$	18,645
Securities available for sale		21,500			-		21,500
Restricted stock		926			-		926
Loans		164,965			578		165,543
Premises and equipment		5,630			-		5,630
Core deposit intangibles		1,549			-		1,549
Real estate owned		25,604			497		26,101
Other assets		905			-		905
Total assets acquired		239,724			1,075		240,799

Liabilities
Deposits		237,053			-		237,053
FHLB Advances		13,600			-		13,600
Other liabilities		178			-		178
Total liabilities assumed		250,831			-		250,831

Net assets acquired	$	(11,107	)	$	1,075	$	(10,032	)

Net cash received		23,494					23,494

Bargain purchase gain	$	12,387				$	13,462

(Continued)

F-43

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 2 – BUSINESS COMBINATIONS (Continued)

On May 31, 2012, the Bank acquired The Palm Bank in exchange for $5,496. The Palm Bank’s results of operations are included in the Bank’s income statement beginning June 1, 2012. Acquisition-related costs of approximately $217 are included in the Bank’s income statement as non-interest expense for the year ended December 31, 2012. The total value of the consideration paid to The Palm Bank shareholders was $5,496 in cash. The purchase was part of the Bank’s overall strategy to grow and expand its market presence in Tampa Bay. The acquisition resulted in a bargain purchase gain of $3,526 as of acquisition date, primarily as a result of the purchase price being less than the seller’s book value, and the fair value of the net assets acquired exceeding the seller’s book value. After measurement period adjustments, bargain purchase gain as of December 31, 2012 was $6,235.

The following table summarizes the consideration paid for The Palm Bank and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

	May 31, 2012			Measurement Period		December 31, 2012
Assets
Cash and cash equivalents	$	1,897		$	-	$	1,897
Securities available for sale		40,540			-		40,540
Restricted stock		7,744			-		7,744
Loans		60,029			178		60,207
Premises and equipment		2,465			-		2,465
Core deposit intangibles		272			-		272
Real estate owned		1,622			-		1,622
Accrued interest receivable		434			-		434
Deferred taxes		-			2,531		2,531
Other assets		888			-		888
Total assets acquired		115,891			2,709		118,600

Liabilities
Deposits		99,080			-		99,080
FHLB Advances		7,130			-		7,130
Other liabilities		659			-		659
Total liabilities assumed		106,869			-		106,869

Net assets acquired	$	9,022		$	2,709	$	11,731

Net cash paid		(5,496	)				(5,496	)

Bargain purchase gain	$	3,526				$	6,235

(Continued)

F-44

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 2 – BUSINESS COMBINATIONS (Continued)

The acquisitions were accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Both the purchased assets and liabilities assumed are recorded at their estimated fair values. Determining the fair values of assets and liabilities, especially the loan portfolio and foreclosed real estate, involves significant judgment and assumptions. Due primarily to the significant amount of fair value adjustments, troubled condition, and regulatory constraints, historical results of First Community Bank of Southwest Florida are not believed to be relevant to the Company’s results, and thus no pro forma information is presented.

NOTE 3 – INTANGIBLE ASSETS

Acquired intangible assets at December 31, 2013 and 2012 were as follows:

	2013					2012
	Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount
Amortized intangible assets:
Core deposit intangibles	$	(1,087	)	$	2,572	$	(653	)	$	1,023

Estimated amortization expense for each of the next five years is as follows:

2014	$	498
2015		288
2016		200
2017		143
2018		104

NOTE 4 – INVESTMENT SECURITIES

Proceeds and gross gains and (losses) from the sale of securities available for sale for the years ended December 31, 2013 and 2012, were as follows:

	2013			2012

Proceeds from sale of securities	$	130,091		$	173,828
Gross gain	$	576		$	3,092
Gross loss		(271	)		(57	)
Net gain on sales of securities	$	305		$	3,035

(Continued)

F-45

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 4 – INVESTMENT SECURITIES (Continued)

The amortized cost and estimated fair values of securities available-for-sale as of December 31, 2012 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
2012	Cost		Gains		Losses			Value
Securities available for sale:
U.S. Treasury	$	43,912	$	1	$	(1	)	$	43,912
Corporate bonds		65,434		159		(82	)		65,511
Total available for sale	$	109,346	$	160	$	(83	)	$	109,423

None of the securities with a gross unrealized loss have been in a continuous loss position for more than 12 months and no credit losses were recognized in operations during 2012 and 2013. There were no securities pledged to secure FHLB advances at December 31, 2012.

NOTE 5 – LOANS

Loans at year end were as follows:

	2013			2012
Real estate
Residential	$	196,238		$	151,650
Commercial		636,238			366,431
Construction		90,974			59,419
		923,450			577,500
Commercial		85,511			66,828
Consumer		44,068			19,306
		1,053,029			663,634
Less
Net deferred loan fees		(2,880	)		(831	)
Allowance for loan losses		(3,412	)		(2,814	)
	$	1,046,737		$	659,989

(Continued)

F-46

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 5 – LOANS (Continued)

The Bank acquired loans through the acquisitions of First Community Bank of America, The Palm Bank and First Community Bank of Southwest Florida. These acquired loans were recorded at their fair value, such that there was no carryover of the allowance for loan losses. This segment includes commercial, commercial real estate, residential real estate, construction and consumer loans, which have similar risk characteristics to those described above.

The Bank acquired loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans at December 31, 2013 and 2012 is as follows:

	2013		2012

Outstanding balance	$	44,171	$	24,716

Carrying amount, net of allowance of $436 and $410	$	32,783	$	19,010

Purchased loans for which it was probable at acquisition that all contractually required payments would not be collected are as follows:

	2013		2012

Contractually required payments receivable ofloans purchased during the year (assuming no prepayments)	$	35,650	$	11,667

Cash flows expected to be collected at acquisition	$	24,030	$	7,425
Fair value of acquired loans at acquisition	$	20,901	$	7,425

Accretable yield, or income expected to be collected was $3,087 at December 31, 2013. There was no accretable yield at December 31, 2012.

(Continued)

F-47

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 5 – LOANS (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending December 31, 2013:

	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	523		$	1,337		$	251		$	399		$	304		$	2,814
Provision for loan losses		(590	)		1,282			(207	)		726			7			1,218
Loans charged-off		(506	)		(940	)		(120	)		(918	)		(180	)		(2,664	)
Recoveries		1,012			181			317			330			204			2,044
Total ending allowance balance	$	439		$	1,860		$	241		$	537		$	335		$	3,412

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending December 31, 2012:

	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,455		$	1,969		$	1,233		$	885		$	250		$	5,792
Provision for loan losses		1,815			(148	)		359			124			208			2,358
Loans charged-off		(3,094	)		(752	)		(1,763	)		(965	)		(240	)		(6,814	)
Recoveries		347			268			422			355			86			1,478
Total ending allowance balance	$	523		$	1,337		$	251		$	399		$	304		$	2,814

(Continued)

F-48

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 5 – LOANS (Continued)

The allocation of the allowance for loan losses by portfolio segment at December 31, 2013:

	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Consumer		Total
Specific Reserves:
Impaired Loans		32		189		-		183		-		404
Purchase credit impaired loans		13		403		19		-		1		436
Total Specific Reserves		45		592		19		183		1		840
General Reserves		394		1,268		222		354		334		2,572
Total	$	439	$	1,860	$	241	$	537	$	335	$	3,412

Loans:
Individually evaluated for impairment		1,441		6,310		6		1,119		8		8,884
Purchase credit impaired loans		7,018		23,029		2,139		963		70		33,219
Collectively evaluated for impairment		187,779		606,899		88,829		83,429		43,990		1,010,926

Total ending loans balance	$	196,238	$	636,238	$	90,974	$	85,511	$	44,068	$	1,053,029

(Continued)

F-49

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 5 – LOANS (Continued)

The allocation of the allowance for loan losses by portfolio segment at December 31, 2012:

	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Consumer		Total
Specific Reserves:
Impaired Loans		59		265		168		283		-		775
Purchase credit impaired loans		28		377		5		-		-		410
Total Specific Reserves		87		642		173		283		-		1,185
General Reserves		436		695		78		116		304		1,629
Total	$	523	$	1,337	$	251	$	399	$	304	$	2,814

Loans:
Individually evaluated for impairment		2,825		4,791		1,816		930		167		10,529
Purchase credit impaired loans		4,705		11,367		2,200		1,064		84		19,420
Collectively evaluated for impairment		144,120		350,273		55,403		64,834		19,055		633,685

Total ending loans balance	$	151,650	$	366,431	$	59,419	$	66,828	$	19,306	$	663,634

(Continued)

F-50

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 5 – LOANS (Continued)

The following table presents loans individually evaluated for impairment by class of loans as of and for the period ended December 31, 2013:

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
December 31, 2013
With no related allowance recorded:
Residential real estate	$	1,596	$	1,384	$	-	$	1,604	$	23	$	--
Commercial real estate
Multifamily		10		6		-		10		-		-
Owner occupied		4,077		3,595		-		4,189		58		-
Non-owner occupied		2,801		2,240		-		2,813		76		-
Construction		88		6		-		88		4		-
Commercial		388		372		-		401		13		-
Consumer		9		8		-		9		-		-
With allowance recorded:
Residential real estate		57		57		32		58		1		-
Commercial real estate
Multifamily		-		-		-		-		-		-
Owner occupied		509		469		189		513		3		-
Non-owner occupied		-		-		-		-		-		-
Construction		-		-		-		-		-		-
Commercial		949		747		183		1,241		22		-
Consumer		-		-		-		-		-		- -

Total	$	10,484	$	8,884	$	404	$	10,926	$	200	$	-

(Continued)

F-51

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except per share data)

NOTE 5 – LOANS (Continued)

The following table presents loans individually evaluated for impairment by class of loans as of and for the period ended December 31, 2012:

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
December 31, 2012
With no related allowance recorded:
Residential real estate	$	2,834	$	2,359	$	-	$	3,168	$	38	$	-
Commercial real estate
Multifamily		466		463		-		236		22		-
Owner occupied		2,733		2,702		-		2,796		17		-
Non-owner occupied		712		543		-		827		15		-
Construction		1,422		1,248		-		1,260		6		-
Commercial		367		149		-		295		14		-
Consumer		192		167		-		181		9		-
With allowance recorded:
Residential real estate		466		466		59		469		10		-
Commercial real estate
Multifamily		-		-		-		-		-		-
Owner occupied		952		952		232		965		-		-
Non-owner occupied		131		131		33		131		-		-
Construction		1,711		568		168		543		11		-
Commercial		781		781		283		829		11		-
Consumer		-		-		-		-		-		-

Total	$	12,767	$	10,529	$	775	$	11,700	$	153	$	-

(Continued)

F-52

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 5 – LOANS (Continued)

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2013:

			Loans Past Due Over
	Nonaccrual		90 Days Still Accruing

Residential real estate	$	4,127	$	-
Commercial real estate		17,159		-
Construction		864		-
Commercial		1,624		-
Consumer		8		-

Total	$	23,782	$	-

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2012:

			Loans Past Due Over
	Nonaccrual		90 Days Still Accruing

Residential real estate	$	4,429	$	-
Commercial real estate		13,986		-
Construction		2,910		-
Commercial		1,758		-
Consumer		232		-

Total	$	23,315	$	-

The reported amount includes $13,502 of nonaccrual purchase credit impaired loans. Loans are placed on nonaccrual and accounted for under the cost recovery method when repayment is expected through foreclosure or repossession of the collateral, and the timing of foreclosure or repossession cannot be estimated with reasonable certainty. These loans are measured for impairment under the Bank’s policy for measuring impairment on collateral dependent impaired loans that were originated by the Bank and included in impaired loans if there is a subsequent decline in the value of the collateral.

The following table presents the aging of the recorded investment in past due loans as of December 31, 2013 by class of loans:

	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total

December 31, 2013
Residential real estate	$	1,794	$	63	$	4,127	$	5,984	$	190,254	$	196,238
Commercial Real Estate
Multifamily		-		-		6		6		56,035		56,041
Owner Occupied		176		251		10,191		10,618		193,878		204,496
Non-owner occupied		415		889		6,962		8,266		367,435		375,701
Construction		1,018		-		864		1,882		89,092		90,974
Commercial		195		-		1,624		1,819		83,692		85,511
Consumer		319		6		8		333		43,735		44,068
Total	$	3,917	$	1,209	$	23,782	$	28,908	$	1,024,121	$	1,053,029

(Continued)

F-53

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 5 – LOANS (Continued)

The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 by class of loans:

	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total

December 31, 2012
Residential real estate	$	625	$	22	$	4,429	$	5,076	$	146,574		151,650
Commercial Real Estate
Multifamily		220		-		1,008		1,228		14,317		15,545
Owner Occupied		1,406		243		5,372		7,021		149,059		156,080
Non-owner occupied		1,460		-		7,606		9,066		185,740		194,806
Construction		-		11		2,910		2,921		56,498		59,419
Commercial		629		-		1,758		2,387		64,441		66,828
Consumer		316		31		232		579		18,727		19,306
Total	$	4,656	$	307	$	23,315	$	28,278	$	635,356	$	663,634

Troubled Debt Restructurings:

During 2013, no loans were modified as troubled debt restructurings.

The following table is a summary of troubled debt restructurings that are performing in accordance with the restructured terms at December 31, 2013:

	Number of Loans		Recorded Investment
Residential real estate		1	$	64
Commercial real estate
Multifamily		-		-
Owner Occupied		-		-
Non-owner Occupied		1		382
Construction		-		-
Commercial		-		-
Consumer		-		-
Total		2	$	446

The following table is a summary of non-accruing troubled debt restructurings at December 31, 2013:

	Number of Loans		Recorded Investment

Residential real estate		-	$	-
Commercial real estate
Multifamily		-		-
Owner Occupied		1		534
Non-owner Occupied		-		-
Construction		-		-
Commercial		-		-
Consumer		-		-
Total		1	$	534

(Continued)

F-54

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 5 – LOANS (Continued)

There were no troubled debt restructurings that subsequently defaulted during the year ending December 31, 2013 within 12 months of modification. The Bank was not committed to lend any additional amounts as of December 31, 2013 to customers with outstanding loans that are classified as troubled debt restructurings.

The following table is a summary of troubled debt restructurings that are performing in accordance with the restructured terms at December 31, 2012:

	Number of Loans		Recorded Investment
Residential real estate		-	$	-
Commercial real estate
Multifamily		-		-
Owner Occupied		1		456
Non-owner Occupied		1		389
Construction		-		-
Commercial		1		341
Consumer		-		-
Total		3	$	1,186

The following table is a summary of non-accruing troubled debt restructurings at December 31, 2012:

	Number of Loans		Recorded Investment
Residential real estate		-	$	-
Commercial real estate
Multifamily		-		-
Owner Occupied		1		573
Non-owner Occupied		-		-
Construction		1		352
Commercial		1		13
Consumer		-		-
Total		3	$	938

There were no troubled debt restructurings that subsequently defaulted during the year ending December 31, 2012 within 12 months of modification. The Bank was not committed to lend any additional amounts as of December 31, 2012 to customers with outstanding loans that are classified as troubled debt restructurings.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. None of the TDRs in the table above experienced a payment default within the year ended December 31, 2013.

Credit Quality Indicators:

(Continued)

F-55

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 5 – LOANS (Continued)

			Special
	Pass		Mention		Substandard		Doubtful		Total

December 31, 2013
Residential real estate	$	186,169	$	3,950	$	6,119	$	-	$	196,238
Commercial real estate
Multifamily		55,113		568		360		-		56,041
Owner Occupied		174,920		14,060		15,516		-		204,496
Non-owner Occupied		357,210		10,353		8,138		-		375,701
Construction		87,512		2,012		1,450		-		90,974
Commercial		82,860		569		2,082		-		85,511
Consumer		43,654		406		8		-		44,068
Total	$	987,438	$	31,918	$	33,673	$	-	$	1,053,029

			Special
	Pass		Mention		Substandard		Doubtful		Total

December 31, 2012
Residential real estate	$	141,719	$	5,332	$	4,599	$	-	$	151,650
Commercial real estate
Multifamily		13,941		584		1,020		-		15,545
Owner Occupied		133,269		17,373		5,438		-		156,080
Non-owner Occupied		184,116		3,083		7,607		-		194,806
Construction		53,850		2,432		3,137		-		59,419
Commercial		63,032		1,877		1,919		-		66,828
Consumer		18,718		340		248		-		19,306
Total	$	608,645	$	31,021	$	23,968	$	-	$	663,634

(Continued)

F-56

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 5 – LOANS (Continued)

The Bank has entered into transactions with certain directors, officers, significant stockholders and their affiliates. The aggregate amount of loans to such related parties at December 31, 2013 and 2012 was $813 and $2,749, respectively.

NOTE 6 – REAL ESTATE OWNED

Real estate owned activity was as follows:

	2013			2012

Beginning balance	$	19,027		$	14,518
Acquired real estate owned		26,101			1,622
Loans transferred to real estate owned		6,829			9,916
Direct write-downs		(1,739	)		(548	)
Sales of real estate owned		(9,169	)		(6,481	)
End of year	$	41,049		$	19,027

Activity in the valuation allowance was as follows:

	2013			2012

Beginning of year	$	1,520		$	995
Additions charged to expense		1,739			548
Removals due to sales		(550	)		(23	)

End of year valuation allowance	$	2,709		$	1,520

Expenses related to foreclosed assets include:

	2013		2012

Increase in valuation allowance	$	1,739	$	548
Operating expenses – net of rental income		2,163		1,495

Other real estate owned expense	$	3,902	$	2,043

NOTE 7 – PREMISES AND EQUIPMENT

A summary of the Bank's premises and equipment and the total accumulated depreciation are as follows:

	2013			2012

Land	$	10,926		$	10,019
Buildings and improvements		29,258			20,926
Furniture, equipment and autos		10,213			7,606
Land acquired for future expansion		14,405			6,771
		64,802			45,322
Less accumulated depreciation		(7,518	)		(6,428	)

Net book value	$	57,284		$	38,894

(Continued)

F-57

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 7 – PREMISES AND EQUIPMENT (Continued)

At December 31, 2013, the Bank was obligated under non-cancelable operating leases for land and branch locations through the year 2030. These leases contain escalation clauses providing for increased rent based primarily on increases in real estate taxes, increases in the average consumer price index, or predetermined fixed rates. Rent expense, which is included in occupancy expenses, was $1,508 and $892 for the years ended December 31, 2013 and 2012, respectively.

The required minimum rental payments under the terms of the lease at December 31, 2013 are as follows:

Years ended December 31,
2014	$	1,287
2015		1,266
2016		989
2017		848
2018		802
Thereafter		11,807
	$	16,999

NOTE 8 – DEPOSITS

Deposit account balances are summarized as follows:

	2013		2012

Non-interest bearing demand	$	194,383	$	108,862
Interest-bearing demand		138,765		131,562
Money market and savings deposits		362,591		277,775
Certificates of deposits		345,304		241,842
	$	1,041,043	$	760,041

Certificates maturing in years ending after December 31, 2013 are as follows:

2014	$	120,693
2015		120,983
2016		76,339
2017		16,462
2018		6,613
Thereafter		4,214
	$	345,304

The aggregate amount of certificates of deposits that are $100 or more as of December 31, 2013 and 2012, were $196,154 and $100,493, respectively. At December 31, 2013 and 2012, officers and directors of the Bank and entities in which they hold a financial interest had approximately $4,903 and $6,532 in deposits respectively.

(Continued)

F-58

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 9 – INCOME TAX MATTERS

The income tax expense (benefit) included in operations consist of the following:

	2013		2012
Current Provision
Federal	$	1,685	$	174
State		307		-
Total		1,992		174

Deferred Provision
Federal		4,856		(1,855	)
State		804		(623	)
Total		5,660		(2,478	)

Total Provision
Federal		6,541		(1,681	)
State		1,111		(623	)
Income tax expense	$	7,652	$	(2,304	)

The net deferred tax asset (liability) consisted of the following:

	2013			2012

Deferred tax assets:
Net operating loss and credit carryforward	$	1,825		$	3,281
Allowance for loan losses		1,284			1,059
Fair value adjustments		112			724
Accrued expenses		19			75
Other real estate owned		1,171			723
Non-accrual loan interest		276			276
Other		32			66
		4,719			6,204

Deferred tax liabilities:
Bargain purchase gain		(2,693	)		-
Depreciation		(2,119	)		(762	)
Deferred loan costs		(333	)		(286	)
Unrealized gain on securities		-			(29	)
Others		(225	)		(147	)
		(5,370	)		(1,224	)

Net deferred tax asset (liability)	$	(651	)	$	4,980

At December 31, 2013, the Bank has federal and state net operating loss carryforwards of approximately $4,464 and $8,465 respectively. The federal carryforwards begin to expire in 2029 and the state carryforwards begin to expire in 2028. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax asset will not be realized. During 2012 management evaluated the positive and negative evidence and determined that the previously recognized valuation allowance was not necessary given the positive factors of recent profitability and growth and thus management believed it was more likely than not that the net deferred tax asset would be realized.

(Continued)

F-59

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 9 – INCOME TAX MATTERS (Continued)

Effective taxes differ from federal statutory rate of 34% applied to income before taxes due to the following:

	2013		2012
Federal statutory rate times
financial statement income	$	6,678	$	3,673
Effect of:
State taxes		733		202
Meals & entertainment		176		27
Bargain purchase gain		-		(2,120	)
Change in valuation allowance		-		(4,372	)
Other, net		65		286

Total	$	7,652	$	(2,304	)

At December 31, 2013, the Bank had no amounts recorded for uncertain tax positions and does not expect any material changes in uncertain tax benefits during the next 12 months. The Bank recognizes interest and penalties related to income tax matters in income tax expense. The Bank is subject to U.S. federal income tax as well as income tax of the state of Florida. The Bank is not subject to examination by taxing authorities for years prior to 2010.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

	2013		2012

Unused lines of credit	$	62,535	$	47,137
Standby letters of credit		1,976		440
Commitments to fund loans		46,575		27,920

There were no standby letters of credit to related parties at December 31, 2013 or 2012.

NOTE 11 – SUBORDINATED DEBENTURES

The Bank sold $3,000 of nonconvertible capital debentures to a single institution in 2005. The debentures have a stated maturity of ten years. The average interest rate paid on the debentures during 2013 was 2.0%. This rate was fixed for the first five years of the life of the debentures, and has a floating rate of 1.7% over the 3-month LIBOR for the final five years. The debentures are callable by the Bank after five years at par in whole or in part on any coupon date.

(Continued)

F-60

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 11 – SUBORDINATED DEBENTURES (Continued)

The debentures are unsecured and subordinate in right of payment to the Bank’s obligation to its depositors and to the Bank’s other obligations to its creditors. The Debentures are included in other borrowings on the balance sheet.

NOTE 12 – FEDERAL HOME LOAN BANK ADVANCES

Advances from the Federal Home Loan Bank (FHLB) at year end were as follows:

	2013		2012

Fixed rate credit advance, 3.54%, due January 2013	$	-	$	800
Fixed rate credit advance, 1.78%, due March 2013		-		1,000
Fixed rate credit advance, 1.31%, due July 2013		-		1,000
Fixed rate credit advance, 1.71%, due July 2014		1,500		1,500
Fixed rate hybrid advance, 1.94%, due July 2014		5,000		5,000
Convertible, 4.62%, due October 2016		5,000		5,000
Convertible, 2.92%, due December 2017		6,000		6,000
Convertible, 2.76%, due February 2015		5,000		5,000
Convertible, 2.92%, due February 2015		5,000		5,000
Convertible, 3.66%, due July 2015		3,000		3,000
Fixed rate hybrid advance, 0.98%, due September 2013		-		5,000
Fixed rate hybrid advance, 2.98%, due September 2014		5,000		5,000
Fixed rate hybrid advance, 1.19%, due September 2013		-		5,000
Fixed rate credit advance, 0.83%, due November 2013		-		3,000
Fixed rate credit advance, 1.20%, due November 2014		3,000		3,000
Fixed rate credit advance, 1.97%, due March 2015		1,000		1,000
Fixed rate credit advance, 1.87%, due May 2015		1,500		1,500
Fixed rate credit advance, 1.55%, due July 2015		1,000		1,000
Fixed rate hybrid advance, 1.58%, due October 2016		5,000		5,000
Fixed rate hybrid advance, 0.91%, due November 2014		7,500		7,500
Fixed rate credit advance, 1.42%, due December 2016		5,000		5,000
Fixed rate hybrid advance, 1.19%, due May 2018		20,000		-
Fixed rate hybrid advance, 2.70%, due May 2023		10,000		-
Fixed rate credit advance, 0.83%, due July 2016		1,000		-
Fixed rate hybrid advance, 1.78%, due September 2018		20,000		-
Fixed rate hybrid advance, 0.92%, due September 2016		10,000		-
Fixed rate hybrid advance, 0.44%, due December 2015		13,000		-
Fixed rate hybrid advance, 1.80%, due December 2018		5,000		-
Fixed rate hybrid advance, 1.34%, due December 2017		6,000		-
Fixed rate hybrid advance, 0.82%, due December 2016		6,000		-
	$	150,500	$	75,300

As of December 31, 2013, the option to convert from a fixed rate to variable rate remains for the convertible advance with a fixed interest rate of 2.92% and due December 2017. The convertible advances are callable by the FHLB. Hybrid advances offers symmetrical prepayment and a one-time option to embed an interest rate cap or floor.

The above advances were collateralized by $67,843 of first mortgage residential loans, $10,585 HELOC and second mortgage loans, $7,472 of multi-family real estate loans and $113,595 of commercial real estate mortgage loans. As of December 31, 2013, the Bank’s maximum borrowing capacity with the FHLB was approximately $322,100.

Schedule maturities of FHLB advances for the next five years are as follows:

2014	$	17,000
2015		34,500
2016		32,000
2017		12,000
2018		45,000
Thereafter		10,000
Total	$	150,500

(Continued)

F-61

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 13 – STOCK OPTIONS

Options to buy stock were permitted to be granted to directors, officers and employees under the 2011 Stock Option Plan (Equity Incentive Plan), which provided for the issue of up to 3,758,000 options. Under Employee Plan provisions, the exercise price was equal to the fair market value of the stock at the date of grant. The maximum option term was ten years and the options vest over a five year period.

The fair value of each option is estimated at the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based upon historical volatilities of an appropriate banking sector share-price index. The Bank has estimated option exercise and post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. There were no stock options granted during 2012 and 2013. During 2011, the Bank granted all 3,758,000 options to an employee. The grant price was $1.00 per share. The fair value of stock award at the grant date was $75. These options were immediately vested, and total compensation cost of $75 was recognized on the date of grant. These options had an exercise price of one dollar per option for the first six months and the exercise price increased a penny every six months until the expiration date in May of 2013.

The fair value of the options granted in 2011 was estimated with the following assumptions.

	2011

Risk-free interest rate		0.10	%
Expected term	2 years
Expected stock price volatility		6.07	%

The 3,758,000 stock options were exercised in May 20, 2013 and the Bank received proceeds of $3,877. The plan was subsequently terminated in June 20, 2013 and no stock options were outstanding as of December 31, 2013.

NOTE 14 – FAIR VALUES

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

(Continued)

F-62

Table of Contents

C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 14 – FAIR VALUES (Continued)

The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

The fair value of other real estate owned and impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. For the commercial real estate impaired loans and other real estate owned, appraisers may use either a single valuation approach or a combination of approaches such as comparative sales, cost or the income approach. A significant unobservable input in the income approach is the estimated income capitalization rate for a given piece of collateral. At December 31, 2012, the range of capitalization rates utilized to determine the fair value of the underlying collateral ranged from 8.5% to 9.0%. At December 31, 2013, the range of capitalization rates utilized to determine the fair value of the underlying collateral ranged from 8.0% to 12.0%. Adjustments to comparable sales may be made by the appraiser to reflect local market conditions or other economic factors and may result in changes in the fair value of a given asset over time. As such, the fair value of impaired loans and other real estate owned are considered a Level 3 in the fair value hierarchy.

Transfers of assets and liabilities between levels within the fair value hierarchy are recognized when an event or change in circumstances occurs. There were no transfers between fair value levels for December 31, 2013 and 2012, respectively.

			December 31, 2012 Using:
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Fair Value Measured on a Recurring Basis:
Securities available for sale:
U.S. Treasury	$	43,912	$	-	$	43,912	$	-
Corporate bonds		65,511		-		65,511		-
Total	$	109,423	$	-		109,423	$	-

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 14 – FAIR VALUES (Continued)

The fair value of assets measured on a non-recurring basis were as follows:

			December 31, 2013 Using:
	Significant Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Fair Value Measured on a Non-Recurring Basis:
Impaired Loans
Commercial	$	-	$	-	$	564
Commercial real estate		-		-		280
Residential real estate		-		-		25
Construction		-		-		-
Total Impaired Loans		-		-		869
Other real estate owned
Commercial		-		-		5,714
Residential		-		-		2,244
Total other real estate owned		-		-		7,958
Total	$	-	$	-	$	8,827

	Fair Value Measurements at
	December 31, 2012 Using:

	(Level 1)		(Level 2)		(Level 3)
Fair Value Measured on a Non-Recurring Basis:
Impaired Loans
Commercial	$	-	$	-	$	498
Commercial real estate		-		-		818
Residential real estate		-		-		407
Construction		-		-		400
Total Impaired Loans		-		-		2,123
Other real estate owned
Commercial		-		-		3,288
Residential		-		-		1,617
Total other real estate owned		-		-		4,905
Total	$	-	$	-	$	7,028

Impaired loans, which had a specific allowance for loan losses allocated, had a recorded investment of $2,898 with a valuation allowance of $775 at December 31, 2012, resulting in an additional provision for loan losses of $137 for the year ending December 31, 2012.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 14 – FAIR VALUES (Continued)

Other real estate owned which is measured at fair value less costs to sell, had a net carrying amount of $4,905, which is made up of the outstanding balance of $6,425, net of a valuation allowance of $1,520 at December 31, 2012, resulting in a write-down of $758 for the year ending December 31, 2012.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents – For these short-term highly liquid instruments, the carrying amount is a reasonable estimate of fair value.

Accrued interest receivable and payable – The carrying amount of accrued interest receivable and payable approximates fair value due to the short-term nature of these financial instruments.

Deposits – The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable upon demand at December 31, 2013 and 2012. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Long-term debt – Rates currently available to the Bank for debt with similar terms and remaining maturities are used to estimate fair value of existing debt by discounting future cash flows.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 14 – FAIR VALUES (Continued)

The estimated fair values and related carrying amounts of the Bank's financial instruments at December 31, 2013 and 2012 approximate as follows:

			Fair Value Measurements at
			December 31, 2013 Using:
	Carrying
	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	143,452	$	143,452	$	-	$	-
Federal Home Loan Bank stock		8,210		N/A		N/A		N/A
Loans, net		1,046,737		-		-		1,049,286
Accrued interest receivable		3,013		-		-		3,013

Financial liabilities
Deposits	$	1,041,043	$	-	$	-	$	1,029,259
FHLB advances		150,500		-		-		150,905
Subordinated debentures		3,000		-		-		3,000
Accrued interest payable		181		-		-		181

			Fair Value Measurements at
			December 31, 2012 Using:
	Carrying
	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	77,038	$	77,038	$	-	$	-
Investment securities available for sale		109,423		-		109,423		-
Federal Home Loan Bank stock		4,664		N/A		N/A		N/A
Loans, net		659,989		-		-		649,673
Accrued interest receivable		2,963		-		-		2,963

Financial liabilities
Deposits	$	760,041	$	-	$	-	$	754,887
FHLB advances		75,300		-		-		77,370
Subordinated debentures		3,000		-		-		3,076
Accrued interest payable		156		-		-		156

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 15 – EARNINGS PER COMMON SHARE

	Year ended December 31,
	2013		2012

Basic
Net Income	$	11,990	$	13,108
Weighted average shares of common stock outstanding		77,756,283		71,321,050
Basic earnings per common share	$	0.15	$	0.18

Diluted
Net Income	$	11,990	$	13,108
Weighted average shares of common stock outstanding		77,756,283		71,321,050
Add: Dilutive effects of assumed exercises of stock options		110,502		265,207
Average shares and dilutive potential common shares		77,866,785		71,586,257
Diluted EPS	$	0.15	$	0.18

NOTE 16 – REGULATORY MATTERS

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined).

To be categorized as well capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. Management believes as of December 31, 2013 and 2012, the Bank meets all capital adequacy requirements to which it is subject. There are no conditions or events since year end that management believes have changed the Bank’s classification as well capitalized.

(Continued)

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C1 FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2013 and 2012
(Dollars in thousands, except share data)

NOTE 16 – REGULATORY MATTERS (Continued)

The Bank's actual and required capital ratios are as follows:

						Required					Well Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provision
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2013
Total capital to risk
weighted assets	$	124,020		10.97	%	$	90,407		8.0	%	$	113,008		10.0	%
Tier 1 capital to risk
weighted assets		120,008		10.62	%		45,203		4.0	%		67,805		6.0	%
Tier 1 capital to average assets		120,008		9.36	%		51,292		4.0	%		64,115		5.0	%

						Required					Well Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provision
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2012
Total capital to risk
weighted assets	$	97,843		12.54	%	$	62,404		8.0	%	$	78,005		10.0	%
Tier 1 capital to risk
weighted assets		93,828		12.03	%		31,202		4.0	%		46,803		6.0	%
Tier 1 capital to average assets		93,828		10.21	%		36,773		4.0	%		45,966		5.0	%

The capital ratios for the holding company C1 Financial, Inc. are not presented as of December 31, 2013 since they were same as those presented for the Bank.

During 2014, until the date of issuance of the Financial Statements, the Bank raised an additional $14.9 million in capital through the issuance of common stock.

NOTE 17 – PARENT COMPANY ONLY FINANCIAL INFORMATION

At December 31, 2013 the only asset in the Parent Company’s balance sheet was the investment in its subsidiary C1 Bank, for a total of $121,814 and there were no liabilities. Shareholders’ equity of the Parent Company was $121,814 at December 31, 2013. There was no income or expenses at the Parent Company besides the equity in undistributed subsidiary income from C1 Bank in 2013.

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C1 FINANCIAL, INC.

2014 OMNIBUS INCENTIVE PLAN

Section 1. Purpose. The purpose of the C1 Financial, Inc. 2014 Omnibus Incentive Plan (the “Plan”) is to motivate and reward those employees and other individuals who are expected to contribute significantly to the success of C1 Financial, Inc. (together with its subsidiaries and any and all successor entities, the “Company”) to perform at the highest level and to further the best interests of the Company and its shareholders.

Section 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below:

(a) “Affiliate” means (i) any entity that, directly or indirectly, is controlled by the Company, (ii) any entity in which the Company, directly or indirectly, has a significant equity interest, in each case as determined by the Committee and (iii) any other company which the Committee determines should be treated as an “Affiliate.”

(b) “Award” means any Option, SAR, Restricted Stock, RSU, Performance Award, Deferred Award, Other Cash-Based Award or Other Share-Based Award granted under the Plan.

(c) “Award Agreement” means any agreement, contract or other instrument or document evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant.

(d) “Beneficial Owner” has the meaning ascribed to such term in Rule 13d-3 under the Exchange Act.

(e) “Beneficiary” means a Person entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event of the Participant’s death. If no such Person can be named or is named by the Participant, or if no Beneficiary designated by such Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s death, such Participant’s Beneficiary shall be such Participant’s estate.

(f) “Board” means the board of directors of the Company.

(g) “Change of Control” means the occurrence of any one or more of the following events, except as otherwise provided in the Participant’s Award Agreement:

(i) any Person, other than an employee benefit plan or trust maintained by the Company, becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 50% of the

combined voting power of the Company’s outstanding securities entitled to vote generally in the election of directors;

(ii) at any time during a period of 12 consecutive months, individuals who at the beginning of such period constituted the Board and any new member of the Board whose election or nomination for election was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was so approved, cease for any reason to constitute a majority of members of the Board; or

(iii) the consummation of (A) a merger or consolidation of the Company or any of its subsidiaries with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or, if applicable, the ultimate parent thereof) at least 50% of the combined voting power and total fair market value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation, or (B) any sale, lease, exchange or other transfer to any Person (other than any Affiliate) of assets of the Company and/or any of its subsidiaries, in one transaction or a series of related transactions, having an aggregate fair market value of more than 50% of the fair market value of the Company and its subsidiaries (the “Company Value”) immediately prior to such transaction(s), but only to the extent that, in connection with such transaction(s) or within a reasonable period thereafter, the Company’s shareholders receive distributions of cash and/or assets having a fair market value that is greater than 50% of the Company Value immediately prior to such transaction(s).

Notwithstanding the foregoing or any provision of any Award Agreement to the contrary, for any Award that provides for accelerated distribution on a Change of Control of amounts that constitute “deferred compensation” (as defined in Section 409A of the Code and the regulations thereunder), if the event that constitutes such Change of Control does not also constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets (in either case, as defined in Section 409A of the Code), such amount shall not be distributed on such Change of Control but instead shall vest as of the date of such Change of Control and shall be paid on the scheduled payment date specified in the applicable Award Agreement, except to the extent that earlier distribution would not result in the Participant who holds such Award incurring interest or additional tax under Section 409A of the Code.

(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Code shall include any successor provision thereto.

(i) “Committee” means the Executive Compensation Committee of the Board or such other committee as may be designated by the Board. If the Board does not designate the Committee, references herein to the “Committee” shall refer to the Board.

(j) “Consultant” means any individual, including an advisor, who is providing services to the Company or any Affiliate, other than as an Employee or non-employee Director, or who has accepted an offer of service or consultancy from the Company or any Affiliate.

(k) “Covered Employee” means an individual who is, for a given fiscal year of the Company, (i) a “covered employee” within the meaning of Section 162(m) of the Code or (ii) designated by the Committee by not later than 90 days following the start of such year (or such other time as may be required or permitted by Section 162(m) of the Code) as an individual whose compensation for such fiscal year may be subject to the limit on deductible compensation imposed by Section 162(m) of the Code.

(l) “Deferred Award” shall mean an Award granted pursuant to ‎Section 10.

(m) “Director” means any member of the Company’s Board.

(n) “Effective Date” means the effective date of the Company’s initial public offering.

(o) “Employee” means any individual, including any officer, employed by the Company or any Affiliate or any prospective employee or officer who has accepted an offer of employment from the Company or any Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Committee in its discretion, subject to any requirements of the Code or the applicable laws.

(p) “Employment Agreement” means any employment, severance, consulting or similar agreement (including any offer letter) between the Company or any Affiliate and the Participant.

(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.

(r) “Fair Market Value” means (i) with respect to Shares, the closing price of a Share on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock market or exchange on which the Shares are quoted or traded, or if Shares are not so quoted or traded, fair market value of a Share as determined by the Committee, and (ii) with respect to any property other than Shares, the fair

market value of such property determined by such methods or procedures as shall be established from time to time by the Committee.

(s) “Incentive Stock Option” means an option representing the right to purchase Shares from the Company, granted pursuant to the provisions of ‎Section 6, that meets the requirements of Section 422 of the Code.

(t) “Intrinsic Value” with respect to an Option or SAR Award means (i) the excess, if any, of the price or implied price per Share in a Change of Control or other event over (ii) the exercise or hurdle price of such Award multiplied by (iii) the number of Shares covered by such Award.

(u) “Non-Qualified Stock Option” means an option representing the right to purchase Shares from the Company, granted pursuant to ‎Section 6, that is not an Incentive Stock Option.

(v) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

(w) “Other Cash-Based Award” means a cash Award granted pursuant to ‎Section 11, including cash awarded as a bonus or upon the attainment of specified performance criteria or otherwise as permitted under the Plan.

(x) “Other Share-Based Award” means an Award granted pursuant to ‎Section 11 that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares or factors that may influence the value of Shares, including convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares, Awards with value and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Committee.

(y) “Participant” means the recipient of an Award granted under the Plan.

(z) “Performance Award” means an Award granted pursuant to ‎Section 9.

(aa) “Performance Period” means the period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are measured.

(bb) “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including “group” as defined in Section 13(d) thereof.

(cc) “Restricted Stock” means any Share granted pursuant to ‎Section 8.

(dd) “RSU” means a contractual right granted pursuant to ‎Section 8 that is denominated in Shares. Each RSU represents a right to receive the value of one Share (or a percentage of such value) in cash, Shares or a combination thereof. Awards of RSUs may include the right to receive dividend equivalents.

(ee) “SAR” means any right granted pursuant to ‎Section 7 to receive upon exercise by the Participant or settlement, in cash, Shares or a combination thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise or settlement over (ii) the exercise or hurdle price of the right on the date of grant, or if granted in connection with an Option, on the date of grant of the Option.

(ff) “SEC” means Securities and Exchange Commission.

(gg) “Section 162(m) Compensation” means “qualified performance-based compensation” under Section 162(m) of the Code.

(hh) “Shares” means shares of the Company’s common stock, $0.01 par value per Share.

(ii) “Substitute Award” means an Award granted in assumption of, or in substitution for, an outstanding award previously granted by a company or other business acquired by the Company or with which the Company combines.

Section 3. Eligibility.

(a) Any Employee, Consultant, non-employee Director of the Company or an Affiliate or any other individual who provides services to the Company or any Affiliate shall be eligible to be selected to receive an Award under the Plan, to the extent an offer of an Award or a receipt of such Award is permitted by applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations.

(b) Holders of options and other types of awards granted by a company acquired by the Company or with which the Company combines are eligible for grants of Substitute Awards under the Plan to the extent permitted under applicable regulations of any stock exchange on which the Company is listed.

Section 4. Administration.

(a) Administration of the Plan. The Plan shall be administered by the Committee, which shall be appointed by the Board. All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, its shareholders, Participants and any Beneficiaries thereof. The

Committee may issue rules and regulations for administration of the Plan. It shall meet at such times and places as it may determine.

(b) Composition of Committee. To the extent necessary or desirable to comply with applicable regulatory regimes, any action by the Committee shall require the approval of Committee members who are (i) independent, within the meaning of and to the extent required by applicable rulings and interpretations of the applicable stock market or exchange on which the Shares are quoted or traded; (ii) a non-employee Director within the meaning of Rule 16b-3 under the Exchange Act; and (iii) an outside Director pursuant to Section 162(m) of the Code. The Board may designate one or more Directors as alternate members of the Committee who may replace any absent or disqualified member at any meeting of the Committee. To the extent permitted by applicable law, the Committee may delegate to one or more officers of the Company the authority to grant Options and SARs or other Awards in the form of Share rights, except that such delegation shall not be applicable to any Award for a Person then covered by Section 16 of the Exchange Act, and the Committee may delegate to one or more committees of the Board (which may consist of solely one Director) the authority to grant all types of Awards, in accordance with applicable law.

(c) Authority of Committee. Subject to the terms of the Plan and applicable law, the Committee (or its delegate) shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards (including Substitute Awards) to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, Shares, other Awards, other property, net settlement, or any combination thereof, or canceled, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (vi) determine whether, to what extent and under what circumstances cash, Shares, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) amend terms or conditions of any outstanding Awards, including without limitation, to accelerate the time or times at which the Award becomes vested, unrestricted or may be exercised; (viii) correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award, in the manner and to the extent it shall deem desirable to carry the Plan into effect; (ix) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents, trustees, brokers, depositories and advisors and determine such terms of their engagement as it shall deem appropriate for the proper administration of the Plan and due compliance with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the

administration of the Plan and due compliance with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations. Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards or administer the Plan. In any such case, the Board shall have all of the authority and responsibility granted to the Committee herein.

Section 5. Shares Available for Awards.

(a) Subject to adjustment as provided in ‎Section 5(c) and except for Substitute Awards, the maximum number of Shares available for issuance under the Plan shall not exceed in the aggregate 1,000,000 Shares, and the maximum number of Shares available for issuance for Awards granted to non-employee Directors under the Plan shall not exceed in the aggregate 1,000,000 Shares.

(b) If any Award is forfeited, expires, terminates, otherwise lapses or is settled for cash, in whole or in part, without the delivery of Shares, then the Shares covered by such forfeited, expired, terminated or lapsed Award shall again be available for grant under the Plan. For the avoidance of doubt, the following will not again become available for issuance under the Plan: (i) any Shares withheld in respect of taxes and (ii) any Shares tendered or withheld to pay the exercise price of Options.

(c) In the event that the Committee determines that, as a result of any dividend or other distribution (whether in the form of cash, Shares or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, separation, rights offering, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, issuance of Shares pursuant to the anti-dilution provisions of securities of the Company, or other similar corporate transaction or event affecting the Shares, or of changes in applicable laws, regulations or accounting principles, an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, subject to compliance with Section 409A of the Code, adjust equitably (including, without limitation, by payment of cash) any or all of:

(i) the number and type of Shares (or other securities) which thereafter may be made the subject of Awards, including the aggregate limit specified in ‎Section 5(a) and the individual limit specified in ‎Section 5‎(e);

(ii) the number and type of Shares (or other securities) subject to outstanding Awards; and

(iii) the grant, purchase, exercise or hurdle price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award;

provided, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number.

(d) Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or Shares acquired by the Company.

(e) The following limits shall apply to the amount that may be awarded to any Participant during any calendar year, subject to adjustment as provided in ‎(c): (i) Options and SARs that relate to no more than 500,000 Shares; (ii) Restricted Stock and RSUs that relate to no more than 500,000 Shares, (iii) Performance Awards and Other Share-Based Awards that relate to no more than 500,000 Shares; (iv) Share-based Deferred Awards that relate to no more than 500,000 Shares; (v) cash-based Deferred Awards that relate to no more than $15,000,000; and (vi) Other Cash-Based Awards that relate to no more than $15,000,000.

Section 6. Options. The Committee is authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:

(a) The exercise price per Share under an Option shall be determined by the Committee at the time of grant; provided, however, that, except in the case of Substitute Awards, and subject to ‎Section 6(e), such exercise price shall not be less than the Fair Market Value of a Share on the date of grant of such Option;

(b) The term of each Option shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such Option; provided that the Committee may (but shall not be required to) provide in an Award Agreement for an extension of such 10-year term in the event the exercise of the Option would be prohibited by law on the expiration date;

(c) The Committee shall determine the time or times at which an Option becomes vested and exercisable in whole or in part;

(d) The Committee shall determine the method or methods by which, and the form or forms, including cash, Shares, other Awards, other property, net settlement, broker assisted cashless exercise or any combination thereof, having a Fair Market Value on the exercise date equal to the exercise price of the Shares as to which the Option shall be exercised, in which payment of the exercise price with respect thereto may be made or deemed to have been made;

(e) The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. Incentive Stock Options may be granted only to employees of the Company or of a parent or subsidiary corporation (as defined in Section 424(a) of the Code). Notwithstanding any designation as an Incentive Stock Option, to the extent that

the aggregate Fair Market Value of Shares subject to a Participant’s incentive stock options that become exercisable for the first time during any calendar year exceeds $100,000, such excess Options shall be treated as Non-Qualified Stock Options. For purposes of the foregoing, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the time of grant. No Incentive Stock Options may be issued more than ten years following the earlier of (i) the date of adoption or (ii) the most recent date of approval of this Plan by the Company’s shareholders. In the case of a 10% shareholder, the exercise price per Share under an Incentive Stock Option shall not be less than 110% of the Fair Market Value on the date of grant of such Incentive Stock Option and the term of such Inventive Stock Option shall not exceed five years from the date of grant of such Incentive Stock Option.

Section 7. Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:

(a) SARs may be granted under the Plan to Participants either alone (“freestanding”) or in addition to other Awards granted under the Plan (“tandem”) and may, but need not, relate to a specific Option granted under ‎Section 6.

(b) The exercise or hurdle price per Share under a SAR shall be determined by the Committee; provided, however, that, except in the case of Substitute Awards, such exercise or hurdle price shall not be less than the Fair Market Value of a Share on the date of grant of such SAR.

(c) The term of each SAR shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such SAR.

(d) The Committee shall determine the time or times at which a SAR may be exercised or settled in whole or in part.

(e) Upon the exercise of an SAR, the Company shall pay to the Participant an amount equal to the number of Shares subject to the SAR multiplied by the excess, if any, of the Fair Market Value of one Share on the exercise date over the exercise or hurdle price of such SAR. The Company shall pay such excess in cash, in Shares valued at Fair Market Value, or any combination thereof, as determined by the Committee.

Section 8. Restricted Stock and RSUs. The Committee is authorized to grant Awards of Restricted Stock and RSUs to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:

(a) The Award Agreement shall specify the vesting schedule and, with respect to RSUs, the delivery schedule (which may include deferred delivery later than the vesting date) and whether the Award of Restricted Stock or RSUs is entitled to dividends or dividend equivalents, voting rights or any other rights.

(b) Shares of Restricted Stock and RSUs shall be subject to such restrictions as the Committee may impose (including any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend, dividend equivalent or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate.

(c) Any Share of Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock.

(d) If, and to the extent the Committee intends that an Award granted under this ‎Section 8 shall constitute or give rise to Section 162(m) Compensation, such Award shall be structured in accordance with the requirements of ‎Section 9, including the performance criteria set forth therein and the Award limitation set forth in ‎Section 5(e), and any such Award shall be considered a Performance Award for purposes of the Plan.

(e) The Committee may provide in an Award Agreement that an Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Section 83(b) of the Code. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to an Award of Restricted Stock, the Participant shall be required to file promptly a copy of such election with the Company and the applicable Internal Revenue Service office.

(f) The Committee may determine the form or forms (including cash, Shares, other Awards, other property or any combination thereof) in which payment of the amount owing upon settlement of any RSU Award may be made.

Section 9. Performance Awards. The Committee is authorized to grant Performance Awards to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:

(a) Performance Awards may be denominated as a cash amount, number of Shares or a combination thereof and are Awards which may be earned upon achievement or satisfaction of performance conditions specified by the

Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions. Subject to the terms of the Plan, the performance goals to be achieved during any Performance Period, the length of any Performance Period, the amount of any Performance Award granted and the amount of any payment or transfer to be made pursuant to any Performance Award shall be determined by the Committee.

(b) If the Committee intends that a Performance Award should constitute Section 162(m) Compensation, such Performance Award shall include a pre-established formula, such that payment, retention or vesting of the Award is subject to the achievement during a Performance Period or Performance Periods, as determined by the Committee, of a level or levels of, or increases in, in each case as determined by the Committee, one or more of the following performance measures or any other performance measure reasonably determined by the Committee, with respect to the Company:

(i) return measures (including, but not limited to, total shareholder return; return on equity; return on tangible common equity; return on tier 1 common equity; return on assets or net assets; return on risk-weighted assets; and return on capital (including return on total capital or return on invested capital));

(ii) revenues (including, but not limited to, total revenue; gross revenue; net revenue; revenue growth; and net sales);

(iii) income/earnings measures (including, but not limited to, earnings per share; earnings or loss (including earnings before or after interest, taxes, depreciation and amortization); gross income; net income after cost of capital; net interest income; non-interest income; fee income; net interest margin; operating income (before or after taxes); pre-or after-tax income or loss (before or after allocation of corporate overhead and bonus); pre- or after-tax operating income; net earnings; net income or loss (before or after taxes); operating margin; gross margin; and adjusted net income);

(iv) expense measures (including, but not limited to, expenses; operating efficiencies; non-interest expense and operating/efficiency ratios; and improvement in or attainment of expense levels or working capital levels (including cash and accounts receivable));

(v) balance sheet/risk management measures (including, but not limited to, loans; deposits; assets; tangible equity; charge-offs; net

charge-offs; non-performing assets or loans; risk-weighted assets; classified assets; criticized assets; allowance for loans and lease losses; loan loss reserves; asset quality levels; year-end cash; investments; interest-sensitivity gap levels; regulatory compliance; satisfactory internal or external audits; financial ratings; shareholders’ equity; tier 1 capital; and liquidity);

(vi) cash flow measures (including, but not limited to, cash flow or cash flow per share (before or after dividends); and cash flow return on investment);

(vii) share price measures (including, but not limited to, share price; appreciation in and/or maintenance of share price; and market capitalization);

(viii) strategic objectives (including, but not limited to, market share; debt reduction; operating efficiencies; customer satisfaction; customer growth; employee satisfaction; research and development achievements; branding; mergers and acquisitions; succession management; people development; management retention; dynamic market response; expense reduction initiatives; reductions in costs; risk management; regulatory compliance and achievements; implementation, completion or attainment of measurable objectives with respect to research, development, commercialization, products or projects, production volume levels, acquisitions and divestitures; factoring transactions; and recruiting and maintaining personnel); and

(ix) other measures (including, but not limited to, economic value-added models or equivalent metrics; economic profit added; gross profits; economic profit; comparisons with various stock market indices; financial ratios (including those measuring liquidity, activity, profitability or leverage); cost of capital or assets under management; and financing and other capital raising transactions (including sales of the Company’s equity or debt securities; factoring transactions; sales or licenses of the Company’s assets, including its intellectual property, whether in a particular jurisdiction or territory or globally; or through partnering transactions)).

Performance criteria may be measured on an absolute (e.g., plan or budget) or relative basis, may be established on a corporate-wide basis or with respect to one or more business units, divisions, subsidiaries or business segments, may be based on a ratio or separate calculation of any performance criteria and may be made relative to an index or one or more of the performance goals themselves. Relative performance may be measured against a group of peer companies, a financial market index or other acceptable objective and quantifiable indices. Except in the case of an Award intended to qualify as Section 162(m) Compensation, if the Committee determines that a change in the business, operations, corporate

structure or capital structure of the Company, or the manner in which the Company conducts its business, or other events or circumstances render the performance objectives unsuitable, the Committee may modify the performance objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable. Performance measures may vary from Performance Award to Performance Award and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative. The Committee shall have the power to impose such other restrictions on Awards subject to this ‎Section 9(b) as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for Section 162(m) Compensation or requirements of any applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations. Notwithstanding any provision of the Plan to the contrary, with respect to any Award intended to be Section 162(m) Compensation, the Committee shall not be authorized to increase the amount payable under any Award to which this ‎Section 9(b) applies upon attainment of such pre-established formula. In order to ensure that any Performance Award that is intended to qualify as Section 162(m) Compensation so qualifies, no Participant may be granted in any calendar year Performance Awards denominated in cash that, taken collectively in the aggregate, could result in a future payout at maximum performance in excess of $15,000,000.

(c) Settlement of Performance Awards shall be in cash, Shares, other Awards, other property, net settlement, or any combination thereof, as determined in the discretion of the Committee. The Committee shall specify the circumstances in which, and the extent to which, Performance Awards shall be paid or forfeited in the event of a Participant’s Termination of Service.

(d) Performance Awards shall be settled only after the end of the relevant Performance Period. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with a Performance Award but, to the extent required by Section 162(m) of the Code, may not exercise discretion to increase any amount payable to a Covered Employee in respect of a Performance Award intended to qualify as Section 162(m) Compensation. Any settlement that changes the form of payment from that originally specified shall be implemented in a manner such that the Performance Award and other related Awards do not, solely for that reason, fail to qualify as Section 162(m) Compensation.

Section 10. Deferred Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants Deferred Awards, which maybe a right to receive Shares or cash under the Plan (either independently or as an element of or supplement to any other Award under the Plan), including, as may be required by any applicable law or regulations or determined by the Committee, in lieu of any annual bonus that may be payable to a Participant under any applicable bonus plan or arrangement. The Committee shall determine the terms and conditions of such Deferred Awards, including, without limitation, the method of converting the amount of annual bonus into a Deferred Award, if applicable, and the form, vesting, settlement, forfeiture

and cancellation provisions or any other criteria, if any, applicable to such Deferred Awards. Shares underlying a Share-denominated Deferred Award, which is subject to a vesting schedule or other conditions or criteria, including forfeiture or cancellation provisions, set by the Committee shall not be issued until on or following the date that those conditions and criteria have been satisfied. Deferred Awards shall be subject to such restrictions as the Committee may impose (including any limitation on the right to vote a Share underlying a Deferred Award or the right to receive any dividend, dividend equivalent or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. The Committee may determine the form or forms (including cash, Shares, other Awards, other property or any combination thereof) in which payment of the amount owing upon settlement of any Deferred Award may be made.

Section 11. Other Cash-Based Awards and Other Share-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants Other Cash-Based Awards (either independently or as an element of or supplement to any other Award under the Plan) and Other Share-Based Awards. The Committee shall determine the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of a purchase right granted under this ‎Section 10 shall be purchased for such consideration, paid for at such times, by such methods and in such forms, including cash, Shares, other Awards, other property, net settlement, broker-assisted cashless exercise or any combination thereof, as the Committee shall determine; provided that the purchase price therefore shall not be less than the Fair Market Value of such Shares on the date of grant of such right.

Section 12. Effect of Termination of Service or a Change of Control on Awards.

(a) The Committee may provide, by rule or regulation or in any applicable Award Agreement, or may determine in any individual case, the circumstances in which, and the extent to which, an Award may be exercised, settled, vested, paid or forfeited in the event of the Participant’s Termination of Service prior to the end of a Performance Period or vesting, exercise or settlement of such Award.

(b) In the event of a Change of Control, except as otherwise provided in an Award Agreement, the Committee may provide for: (i) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving corporation) or by the surviving corporation or its parent; (ii) substitution by the surviving corporation or its parent of awards with substantially the same terms and value for such outstanding Awards (in the case of an Option or SAR Award, the Intrinsic Value at grant of such Substitute Award shall equal the Intrinsic Value of the Award); (iii) acceleration of the vesting (including the lapse of any restrictions, with any performance criteria or other performance conditions deemed met at target) or right to exercise such outstanding Awards immediately prior to or as of the date of the Change of Control, and the expiration of such outstanding Awards to the extent not timely exercised by the date of the Change of Control or other date thereafter designated by the Committee; or (iv) in

the case of an Option or SAR Award, cancelation in consideration of a payment in cash or other consideration to the Participant who holds such Award in an amount equal to the Intrinsic Value of such Award (which may be equal to but not less than zero), which, if in excess of zero, shall be payable upon the effective date of such Change of Control. For the avoidance of doubt, in the event of a Change of Control, the Committee may, in its sole discretion, terminate any Option or SAR Awards for which the exercise or hurdle price is equal to or exceeds the per Share value of the consideration to be paid in the Change of Control transaction without payment of consideration therefor.

Section 13. General Provisions Applicable to Awards.

(a) Awards shall be granted for such cash or other consideration, if any, as the Committee determines; provided that in no event shall Awards be issued for less than such minimal consideration as may be required by applicable law.

(b) Awards may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award or any award granted under any other plan of the Company. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company, may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

(c) Subject to the terms of the Plan, payments or transfers to be made by the Company upon the grant, exercise or settlement of an Award may be made in the form of cash, Shares, other Awards, other property, net settlement, or any combination thereof, as determined by the Committee in its discretion at the time of grant, and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred payments.

(d) Except as may be permitted by the Committee (except with respect to Incentive Stock Options) or as specifically provided in an Award Agreement, (i) no Award and no right under any Award shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or pursuant to ‎Section 13(e) and (ii) during a Participant’s lifetime, each Award, and each right under any Award, shall be exercisable only by such Participant or, if permissible under applicable law, by such Participant’s guardian or legal representative. The provisions of this ‎Section 13(d) shall not apply to any Award that has been fully exercised or settled, as the case may be, and shall not preclude forfeiture of an Award in accordance with the terms thereof.

(e) A Participant may designate a Beneficiary or change a previous Beneficiary designation only at such times as prescribed by the Committee, in its sole discretion, and only by using forms and following procedures approved or accepted by the Committee for that purpose.

(f) All certificates for Shares and/or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the SEC, any stock market or exchange upon which such Shares or other securities are then quoted, traded or listed, and any applicable securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

(g) The Committee may impose restrictions on any Award with respect to non-competition, confidentiality and other restrictive covenants as it deems necessary or appropriate in its sole discretion.

Section 14. Amendments and Terminations.

(a) Amendment or Termination of the Plan. Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan, the Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval if such approval is required by applicable law or the rules of the stock market or exchange, if any, on which the Shares are principally quoted or traded or (ii) subject to ‎Section 5(c) and ‎Section 12, the consent of the affected Participant, if such action would materially adversely affect the rights of such Participant under any outstanding Award, except (x) to the extent any such amendment, alteration, suspension, discontinuance or termination is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations or (y) to impose any “clawback” or recoupment provisions on any Awards in accordance with ‎Section 18. Notwithstanding anything to the contrary in the Plan, the Committee may amend the Plan, or create sub-plans, in such manner as may be necessary to enable the Plan to achieve its stated purposes in any jurisdiction in a tax-efficient manner and in compliance with local rules and regulations.

(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Award shall terminate immediately prior to the consummation of such action, unless otherwise determined by the Committee.

(c) Terms of Awards. The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate any Award theretofore granted, prospectively or retroactively, without

the consent of any relevant Participant or holder or Beneficiary of an Award; provided, however, that, subject to ‎Section 5(c) and ‎Section 12, no such action shall materially adversely affect the rights of any affected Participant or holder or Beneficiary under any Award theretofore granted under the Plan, except (x) to the extent any such action is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, or (y) to impose any “clawback” or recoupment provisions on any Awards in accordance with ‎Section 18; provided further, that the Committee’s authority under this ‎Section 14(c) is limited in the case of Awards subject to ‎Section 9(b), as provided in ‎Section 9(b). Except as provided in ‎Section 9, the Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of events (including the events described in ‎Section 5(c)) affecting the Company, or the financial statements of the Company, or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

(d) No Repricing. Notwithstanding the foregoing, except as provided in ‎Section 5(d), no action shall directly or indirectly, through cancellation and regrant or any other method, reduce, or have the effect of reducing, the exercise or hurdle price of any Award established at the time of grant thereof without approval of the Company’s shareholders.

Section 15. Miscellaneous.

(a) No Employee, Consultant, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of employees, Participants or holders or Beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. Any Award granted under the Plan shall be a one-time Award that does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future grants under the Plan.

(b) The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide services to, the Company or any Affiliate. The receipt of any Award under the Plan is not intended to confer any rights on the receiving Participant except as set forth in the applicable Award Agreement.

(c) Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

(d) The Company shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to the Participant the amount (in cash, Shares, other Awards, other property, net settlement, or any combination thereof) of applicable withholding taxes due in respect of an Award, its exercise or settlement or any payment or transfer under such Award or under the Plan and to take such other action (including providing for elective payment of such amounts in cash or Shares by such Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes; provided that if the Committee allows the withholding or surrender of Shares to satisfy the Participant’s tax withholding obligations, the Company shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

(e) If any provision of the Plan or any Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award Agreement, such provision shall be stricken as to such jurisdiction, Person or Award, and the remainder of the Plan and any such Award Agreement shall remain in full force and effect.

(f) Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

(g) No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

Section 16. Date of Adoption, Approval by Shareholders and Effective Date of the Plan. The Plan was adopted by the Board on July 17, 2014 and shall be effective as of the Effective Date, subject to the approval by the shareholders of the Company.

Section 17. Term of the Plan. No Award shall be granted under the Plan after the earliest to occur of (i) the tenth-year anniversary of the Effective Date; provided that to the extent permitted by the listing rules of any stock exchange on which the Company is listed, such ten-year term may be extended indefinitely so long as the maximum number of Shares available for issuance under the Plan have not been issued; (ii) the maximum number of Shares available for issuance under the Plan have been issued; or

(iii) the Board terminates the Plan in accordance with ‎Section 14(a). However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date.

Section 18. Cancellation or “Clawback” of Awards. The Committee shall have full authority to implement any policies and procedures necessary to comply with Section 10D of the Exchange Act and any rules promulgated thereunder and any other regulatory regimes. Notwithstanding anything to the contrary contained herein, the Committee may, to the extent permitted by applicable law and stock exchange rules or by any applicable Company policy or arrangement, and shall, to the extent required, cancel or require reimbursement of any Awards granted to the Participant or any Shares issued or cash received upon vesting, exercise or settlement of any such Awards or sale of Shares underlying such Awards.

Section 19. Restrictive Covenants. The Committee may impose restrictions on any Award with respect to non-competition, confidentiality and other restrictive covenants as it deems necessary or appropriate in its sole discretion.

Section 20. Section 409A of the Code. With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code and the regulations thereunder, and the provisions of the Plan and any Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition shall be interpreted and deemed amended so as to avoid this conflict. Notwithstanding anything else in the Plan, if the Board considers a Participant to be a “specified employee” under Section 409A of the Code at the time of such Participant’s “separation from service” (as defined in Section 409A of the Code), and the amount hereunder is “deferred compensation” subject to Section 409A of the Code, any distribution that otherwise would be made to such Participant with respect to an Award as a result of such “separation from service” shall not be made until the date that is six months after such “separation from service,” except to the extent that earlier distribution would not result in such Participant’s incurring interest or additional tax under Section 409A of the Code. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment and if the Award includes “dividend equivalents” (within the meaning of Section 1.409A-3(e) of the Treasury Regulations), the Participant’s right to the dividend equivalents shall be treated separately from the right to other amounts under the Award. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan or any Award Agreement is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.

Section 21. Successors and Assigns. The terms of the Plan shall be binding upon and inure to the benefit of the Company and any successor entity, including any successor entity contemplated by ‎Section 12.

Section 22. Data Privacy. By participating in the Plan, the Participant consents to the holding and processing of personal information provided by the Participant to the Company or any subsidiary, trustee or third-party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to:

(i) administering and maintaining Participant records;

(ii) providing information to the Company, Subsidiaries, trustees of any employee benefit trust, registrars, brokers or third-party administrators of the Plan;

(iii) providing information to future purchasers or merger partners of the Company or any subsidiary, or the business in which the Participant works; and

(iv) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country.

Section 23. Governing Law. The Plan and each Award Agreement shall be governed by the laws of the State of Florida, without application of the conflicts of law principles thereof.

Section 24. Waiver of Jury Trial. EACH GRANTEE WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THE PLAN.

Section 25. Dispute Resolution. Any dispute or claim arising out of, under or in connection with the Plan or any Award Agreement shall be submitted to arbitration in Florida and shall be conducted in accordance with the rules of, but not necessarily under the auspices of, the American Arbitration Association rules in force when the notice of arbitration is submitted. The arbitration shall be conducted before an arbitration tribunal comprised of three individuals, one selected by the Company, one selected by the Participant, and the third selected by the first two. The Participant and the Company agree that such arbitration will be confidential and no details, descriptions, settlements or other facts concerning such arbitration shall be disclosed or released to any third party without the specific written consent of the other party, unless required by law or court order or in connection with enforcement of any decision in such arbitration. Any damages awarded in such arbitration shall be limited to the contract measure of damages, and shall not include punitive damages.

Florida	6022	46-4241720
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

	100 5th Street South St. Petersburg, Florida 33701 (877) 266-2265
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒ (Do not check if a smaller reporting company)	Smaller reporting company ☐

CALCULATION OF REGISTRATION FEE
Title Of Each Class Of Securities To Be Registered	Proposed Maximum Aggregate Offering Price(1)	Amount Of Registration Fee(2)
Common Stock, par value $1.00 per share	$ 50,000,000	$ 6,440

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds to C1 Financial, Inc., before expenses	$	$

	Year Ended December 31,
	2013							2012							2011
	Average Balances(1)		Income/ Expense		Yields/ Rates			Average Balances(1)		Income/ Expense		Yields/ Rates			Average Balances(1)		Income/ Expense		Yields/ Rates
	(in thousands)
Interest-earning assets:
Loans receivable(2)	$	812,905	$	47,362		5.83	%	$	609,006	$	35,186		5.78	%	$	402,590	$	25,341		6.29	%
Securities available for sale and other securities		45,379		698		1.54	%		116,307		2,722		2.34	%		69,543		1,546		2.22	%
Federal funds sold and balances at Federal Reserve Bank		105,944		268		0.25	%		65,424		162		0.25	%		28,480		86		0.30	%
Time deposits in other financial institutions		133		7		5.14	%		564		17		2.99	%		8,913		18		0.20	%
FHLB stock		6,305		164		2.60	%		5,304		114		2.15	%		3,620		25		0.68	%
Total interest-earning assets		970,666		48,499		5.00	%		796,605		38,201		4.80	%		513,146		27,016		5.26	%
Non-interest-earning assets:
Cash and due from banks		37,940		—					13,331		—					10,621		—
Other assets(3)		99,192		—					60,266		—					35,755		—

	Trevor R. Burgess Chief Executive Officer C1 Financial, Inc. 100 5th Street South St. Petersburg, Florida 33701 (877) 266-2265
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

	Six-month period ended June 30,
	2014							2013
	Average Balances(1)		Income/ Expense		Yields/ Rates			Average Balances(1)		Income/ Expense		Yields/ Rates
	(in thousands)
Interest-earning assets:
Loans receivable(2)	$	1,059,492	$	30,453		5.80	%	$	678,823	$	19,081		5.67	%
Securities available for sale and other securities		657		57		17.63	%		88,004		621		1.42	%
Federal funds sold and balances at Federal Reserve Bank		182,103		226		0.25	%		72,041		93		0.26	%
Time deposits in other financial institutions		—		—		0.00	%		249		3		2.60	%
FHLB stock		8,250		171		4.18	%		5,237		59		2.28	%
Total interest-earning assets		1,250,502		30,907		4.98	%		844,354		19,857		4.74	%
Non-interest-earning assets:
Cash and due from banks	$	42,763		—				$	42,915		—
Other assets(3)		109,753		—					82,317		—
Total non-interest-earning assets		152,516		—					125,232		—
Total assets		1,403,018		30,907					969,586		19,857

Interest-bearing liabilities:
Interest-bearing deposits:
Time deposits		366,247		1,966		1.08	%		218,807		1,280		1.18	%
Money market		337,181		713		0.43	%		266,772		587		0.44	%
Negotiable order of withdrawal accounts		144,432		270		0.38	%		139,877		263		0.38	%
Savings deposits		38,452		43		0.22	%		29,971		33		0.22	%
Total interest-bearing deposits		886,312		2,992		0.68	%		655,427		2,163		0.67	%
Other interest-bearing liabilities:
FHLB advances		155,147		1,143		1.49	%		90,258		664		1.48	%
Other borrowings		3,000		29		1.96	%		3,000		30		2.02	%
Other liabilities		—		—		0.00	%		—		—		0,00	%
Total interest-bearing liabilities		1,044,459		4,164		0.80	%		748,685		2,857		0.77	%
Non-interest-bearing liabilities and stockholders’ equity:
Demand deposits	$	219,557		—				$	120,903		—
Other liabilities		4,875		—					1,705		—
Stockholders’ equity		134,127		—					98,293		—
Total non-interest-bearing liabilities and stockholders’ equity		358,559		—					220,901		—
Total liabilities and stockholders’ equity	$	1,403,018		4,164				$	969,586		2,857
Interest rate spread (tax equivalent basis)						4.18	%						3.97	%
Net interest income (tax equivalent basis)			$	26,473						$	17,000
Net interest margin (tax equivalent basis)						4.31	%						4.06	%
Average interest-earning assets to average interest-bearing liabilities						119.7	%						112.8	%

	Six-month period ended June 30, 2014 Compared to Six-month period ended June 30, 2013 Due to Changes in
	Average Volume			Average Rate			Net Increase (Decrease)
				(in thousands)
Interest-earning assets:
Loans receivable(1)	$	10,932		$	440		$	11,372
Securities available for sale and other securities		(1,180	)		616			(564	)
Federal funds sold and balances at Federal Reserve Bank		137			(4	)		133
Time deposits in other financial institutions		(1	)		(2	)		(3	)
FHLB stock		46			66			112
Total interest income(2)	$	9,934		$	1,116		$	11,050
Interest expenses
Time deposits	$	799		$	(113	)	$	686
Money market		149			(23	)		126
Negotiable order of withdrawal accounts		8			(1	)		7
Savings deposits		10			—			10
FHLB advances		478			1			479
Other borrowings		—			(1	)		(1	)
Other liabilities		—			—			—
Total interest expense		1,444			(137	)		1,307
Change in net interest income	$	8,490		$	1,253		$	9,743

	Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 Due to Changes in
	Average Volume			Average Rate			Net Increase (Decrease)
				(in thousands)
Interest-earning assets:
Loans receivable(1)	$	11,877		$	299		$	12,176
Securities available for sale and other securities		(1,296	)		(728	)		(2,024	)
Federal funds sold and balances at Federal Reserve Bank		102			4			106
Time deposits in other financial institutions		(18	)		8			(10	)
FHLB stock		24			26			50
Total interest income(2)	$	10,689		$	(391	)	$	10,298
Interest expenses
Time deposits	$	142		$	(406	)	$	(264	)
Money market		323			(226	)		97
Negotiable order of withdrawal accounts		158			(26	)		132

	Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 Due to Changes in
	Average Volume			Average Rate			Net Increase (Decrease)
	(in thousands)
Interest-earning assets:
Loans receivable(1)	$	12,073		$	(2,228	)	$	9,845
Securities available for sale and other securities		1,090			86			1,176
Federal funds sold and balances at Federal Reserve Bank		94			(18	)		76
Time deposits in other financial institutions		(31	)		30			(1	)
FHLB stock		15			74			89
Total interest income(2)	$	13,241		$	(2,056	)	$	11,185
Interest expenses
Time deposits	$	608		$	(1,256	)	$	(648	)
Money market		469			(197	)		272
Negotiable order of withdrawal accounts		110			286			396
Savings deposits		41			(30	)		11
FHLB advances		416			(139	)		277
Other borrowings		(17	)		20			3
Other liabilities		—			—			—
Total interest expense		1,627			(1,316	)		311
Change in net interest income	$	11,614		$	(740	)	$	10,874

	Six-month periods ended June 30,
	2014		2013
	(in thousands)
Gain on sale of securities	$	241	$	576
Gain on sale of loans		1,548		371
Services charges and fees		1,132		771
Bargain purchase gain		11		—
Gain on sale of other real estate, net		652		385
Bank owned life insurance		77		97
Mortgage banking fees		47		376
Other		679		487
Total noninterest income	$	4,387	$	3,063

						As of December 31,
	As of June 30, 2014					2013					2012					2011					2010					2009
	Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total
	(in thousands, except %)
Loan Type
Real estate:
Residential	$	205,223			19.3	$	196,238			18.7	$	151,650			22.9	$	161,172			29.4	$	24,483			11.7	$	17,787			9.5
Commercial		654,398			61.6		636,238			60.4		366,431			55.1		281,451			51.3		143,398			68.4		128,160			68.7
Construction		73,330			6.9		90,974			8.6		59,419			9.0		30,992			5.6		14,373			6.9		22,631			12.1
Total real estate		932,951			87.8		923,450			87.7		577,500			87.0		473,615			86.3		182,254			87.0		168,578			90.3
Commercial		81,871			7.7		85,511			8.1		66,828			10.1		54,454			9.9		24,590			11.7		16,020			8.6
Consumer		47,879			4.5		44,068			4.2		19,306			2.9		21,012			3.8		2,729			1.3		2,064			1.1
Total loans		1,062,701			100.0		1,053,029			100.0		663,634			100.0		549,081			100.0		209,573			100.0		186,662			100.0
Less:
Net deferred loan fees		(3,323	)				(2,880	)				(831	)				(109	)				(97	)				(90	)
Allowance for loan losses		(4,593	)				(3,412	)				(2,814	)				(5,792	)				(3,984	)				(6,451	)
Loans receivable, net	$	1,054,785				$	1,046,737				$	659,989				$	543,180				$	205,492				$	180,121

	Due in 1 Year of Less		Due in 1 to 5 Years		Due After 5 Years		Total
	(in thousands)
Loan Type
As of June 30, 2014
Real estate:
Residential	$	15,514	$	67,945	$	121,764	$	205,223
Commercial		68,183		346,228		239,987		654,398
Construction		17,525		34,086		21,719		73,330
Total real estate		101,222		448,259		383,470		932,951
Commercial		17,192		43,897		20,782		81,871
Consumer		1,273		36,663		9,943		47,879
Total loans	$	119,687	$	528,819	$	414,195	$	1,062,701

	Fixed Interest Rate		Floating Interest Rate		Total
	(in thousands)
Loan Type
As of June 30, 2014
Real estate:
Residential	$	64,689	$	140,534	$	205,223
Commercial		278,817		375,581		654,398
Construction		13,180		60,150		73,330
Total real estate		356,686		576,265		932,951
Commercial		39,144		42,727		81,871
Consumer		10,146		37,733		47,879
Total loans	$	405,976	$	656,725	$	1,062,701

Loan Type
As of December 31, 2013
Real estate:
Residential	$	54,699	$	141,539	$	196,238
Commercial		275,697		360,541		636,238
Construction		18,487		72,487		90,974
Total real estate		348,883		574,567		923,450
Commercial		34,492		51,019		85,511
Consumer		15,877		28,191		44,068
Total loans	$	399,252	$	653,777	$	1,053,029

	Six-month period Ended June 30, 2014				Year Ended December 31, 2013
	Amount		% of Total		Amount		% of Total
	(in thousands, except %)
New originations by Loan Type
Real estate:
Residential	$	20,108		9.7	$	45,345		10.9
Commercial		96,229		46.2		209,063		50.1
Construction		66,012		31.7		75,683		18.1
Total real estate		182,349		87.6		330,091		79.1
Commercial		21,650		10.4		58,842		14.0
Consumer		4,223		2.0		28,634		I6.9
Total loans		208,222		100.0		417,567		100.0

Keefe, Bruyette & Woods	Raymond James
A Stifel Company

	Wunderlich Securities
	Hovde Group

	As of June 30, 2014
	Amount		% of Total
	(in thousands, except %)
Originating Bank
C1 Bank	$	665,615		62.6
Community Bank of Manatee		74,527		7.0
First Community Bank of America		157,078		14.9
The Palm Bank		30,229		2.8
First Community Bank of Southwest Florida		135,252		12.7
Total loans		1,062,701		100.0

	As of December 31, 2013
	Amount		% of Total
	(in thousands, except %)
Originating Bank
C1 Bank	$	614,613		58.4
Community Bank of Manatee		82,720		7.9
First Community Bank of America		169,149		16.0
The Palm Bank		37,578		3.6
First Community Bank of Southwest Florida		148,969		14.1
Total loans		1,053,029		100.0

	Pass		Special Mention		Substandard		Total
	(in thousands)
Loan Type
As of June 30, 2014
Real estate:
Residential	$	195,762	$	3,297	$	6,164	$	205,223
Commercial		612,565		19,580		22,253		654,398
Construction		70,918		1,596		816		73,330
Total real estate		879,245		24,473		29,233		932,951
Commercial		79,506		513		1,852		81,871
Consumer		47,705		146		28		47,879
Total loans	$	1,006,456	$	25,132	$	31,113	$	1,062,701

				Year Ended December 31,
	Six-month period ended June 30, 2014			2013			2012			2011			2010			2009
	(in thousands, except %)
Allowance for loan loss at beginning of period	$	3,412		$	2,814		$	5,792		$	3,984		$	6,451		$	5,114
Charge-offs:
Residential real estate		98			506			3,094			927			133			1,130
Commercial real estate		204			940			752			939			2,839			2,932
Construction real estate		—			120			1,763			29			1,000			5,749
Commercial		4,046			918			965			438			298			1,576
Consumer		238			180			240			179			18			55
Total charge-offs	$	4,586		$	2,664		$	6,814		$	2,512		$	4,288		$	11,442
Recoveries:
Residential real estate		437			1,012			347			547			42			5
Commercial real estate		229			181			268			394			23			27
Construction real estate		303			317			422			112			282			1
Commercial		175			330			355			352			48			14
Consumer		15			204			86			69			—			—
Total recoveries	$	1,159		$	2,044		$	1,478		$	1,474		$	395		$	47
Provision for loan loss charged to operations		4,608			1,218			2,358			2,846			1,426			12,732
Allowance for loan loss at the end of period	$	4,593		$	3,412		$	2,814		$	5,792		$	3,984		$	6,451
Ratio of net charge-offs (recoveries) during the period to average loans outstanding during the period		0.65	%		0.08	%		0.88	%		0.26	%		2.06	%		5.80	%
Allowance for loan loss as a percentage of total loans at end of period		0.43	%		0.32	%		0.42	%		1.05	%		1.90	%		3.46	%
Allowance of loan loss as a percentage of nonperforming loans		21.41	%		14.35	%		12.07	%		23.95	%		47.06	%		31.39	%

	As of June 30, 2014
(Dollars in thousands)	Time Deposits of $100 and Greater		Time Deposits of Less Than $100		Total
Months to maturity:
Three or less	$	14,040	$	13,999	$	28,039
Over Three to Six		13,349		18,465		31,814
Over Six to Twelve		81,105		43,682		124,787
Over Twelve		96,267		77,198		173,465
Total	$	204,761	$	153,344	$	358,105

	Actual					Required for Capital Adequacy Purposes				Well Capitalized Under Prompt Corrective Action Provision
	Amount		Ratio (%)			Amount		Ratio (%)		Amount		Ratio (%)
	(in thousands, except %)
June 30, 2014
Total capital to risk weighted assets	$	143,934		12.42	%	$	92,677		8.0	$	115,847		10.0
Tier 1 capital to risk weighted assets		138,741		11.98	%		46,339		4.0		69,508		6.0
Tier 1 leverage ratio		138,741		9.73	%		57,024		4.0		71,280		5.0
2013
Total capital to risk weighted assets	$	124,020		10.97		$	90,407		8.0	$	113,008		10.0
Tier 1 capital to risk weighted assets		120,008		10.62			45,203		4.0		67,805		6.0
Tier 1 leverage ratio		120,008		9.36			51,292		4.0		64,115		5.0
2012
Total capital to risk weighted assets	$	97,843		12.54		$	62,404		8.0	$	78,005		10.0
Tier 1 capital to risk weighted assets		93,828		12.03			31,202		4.0		46,803		6.0
Tier 1 leverage ratio		93,828		10.21			36,773		4.0		45,966		5.0

As of June 30, 2014
	Next 12 Months
Interest Rate	Net Interest Income		Economic Value of Equity
Change in Basis Points	$ Change	% Change	$ Change	% Change
	(in millions, except %)
(400)	(5.2)	(10.0)	(34.9)	(22.3)
(300)	(4.7)	(9.0)	(32.2)	(20.6)
(200)	(2.7)	(5.2)	(23.4)	(14.9)
(100)	(0.8)	(1.5)	(9.7)	(6.2)
0	—	—	—	—
100	2.5	4.8	6.1	3.9
200	5.3	10.3	10.8	6.9
300	8.1	15.6	14.7	9.4
400	10.9	21.0	18.0	11.5

	Amount of Commitment Expiration Per Period as of June 30, 2014
	Total Amounts Committed		One Year or Less		Over One Year Through Three Years		Over Three Years Through Five Years		Over Five Years
	(in thousands)
Off-balance sheet arrangements
Unused lines of credit	$	50,597	$	14,509	$	8,508	$	13,930	$	13,650
Standby letters of credit		1,605		1,512		93		—		—
Commitments to fund loans		106,355		2,960		44,946		45,994		12,455
Total	$	158,557	$	18,981	$	53,547	$	59,924	$	26,105

	As of December 31, 2013
	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
	(in thousands)
Contractual Obligations
Deposits without stated maturity	$	695,739	$	695,739	$	—	$	—	$	—
Time deposits		345,304		120,690		197,325		23,075		4,214
FHLB and other borrowings		153,500		17,000		69,500		57,000		10,000
Operating Lease Obligations		16,999		1,287		2,255		1,650		11,807
Total	$	1,211,542	$	834,716	$	269,080	$	81,725	$	26,021

Name	Age	Position
Trevor R. Burgess	41	Chief Executive Officer and Director
Kathryn B. Pemble	49	President, Chief Credit Officer, Director and Vice Chairman of the Board
Rita J. Lowman	61	Executive Vice President and Chief Operating Officer
Cristian Melej	36	Executive Vice President and Chief Financial Officer
William H. Sedgeman, Jr.	73	Senior Lender, West Florida Market Manager, Director and Chairman of the Board
Alan G. Randolph	46	Executive Vice President, Senior Lender and South Florida Market Manager
Marcio de Oliveira	35	Executive Vice President and Chief Information Officer
James Steiner	33	Executive Vice President and Chief Risk Officer

Name and Position Principal	Year	Salary ($)			Bonus(1) ($)		All Other Compensation(2) ($)		Total ($)
Trevor Burgess, Chief Executive Officer	2013		339,000.00	(3)		300,000.00		500.00		639,500.00
Kathryn Pemble, President and Chief Credit Officer	2013		233,400.00	(4)		80,000.00		500.00		313,900.00
Rita Lowman, Executive Vice President and Chief Operating Officer	2013		200,000.16	(5)		50,000.00		500.00		250,500.16

	Shares Beneficially Owned Before the Offering				Shares Beneficially Owned After the Offering (1)
Name and Address of Beneficial Owner	Number		Percent		Number		Percent
Marcelo Faria de Lima(2)		28,732,527		30.77		4,104,646
Erwin Russel(3)		15,327,765		16.41		2,189,680
Marcio Camargo(4)		12,551,628		13.44		1,793,089
Trevor R. Burgess(5)		8,863,263		9.49		1,266,180
Phillip L. Burghardt(6)		1,267,165		1.36		181,023
Rita J. Lowman(7)		867,114		*		123,873
Neil D. Grossman		750,000		*		107,142
Brian D. Burghardt(6)		646,781		*		92,397
Cristian Melej		532,000		*		76,000
Duane L. Moore		348,851		*		49,835
Ryan L. Snyder		342,422		*		48,917
Robert P. Glaser		200,000		*		28,571
Kathryn B. Pemble(8)		142,915		*		20,416
Adelaide Alexander Sink		36,619		*		5,231
William H. Sedgeman, Jr.(9)		30,387		*		4,341
All directors and executive officers as a group (13 persons)		42,760,044		45.79		6,108,572

Number of Shares		Date
		On the date of this prospectus.

		After 90 days from the date of this prospectus.

		After 180 days from the date of this prospectus (subject, in some cases, to volume limitations).

		At various times after 180 days from the date of this prospectus (subject, in some cases, to volume limitations).

Underwriter		Number of Shares
Keefe, Bruyette & Woods, Inc.
Raymond James & Associates, Inc.
Sandler O’Neill & Partners, L.P.
Wunderlich Securities, Inc.
Hovde Group, LLC
Monroe Financial Partners, Inc.
Total

	Page
Interim Financial Statements
Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2014 and December 31, 2013		F-2
Condensed Consolidated Income Statements (Unaudited) for the Three and Six Months Ended June 30, 2014 and 2013		F-3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2014 and 2013		F-6
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three and Six Months Ended June 30, 2014 and 2013		F-7
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six-Months Ended June 30, 2014 and 2013		F-8
Notes to Consolidated Financial Statements		F-9
Annual Financial Statements
Report of Independent Registered Public Accounting Firm		F-31
Consolidated Balance Sheets as of December 31, 2013 and 2012		F-32
Consolidated Income Statements for Years Ended December 31, 2013 and 2012		F-33
Consolidated Statements of Comprehensive Income for Years Ended December 31, 2013 and 2012		F-35
Consolidated Statements of Changes in Stockholders’ Equity for Years ended December 31, 2013 and 2012		F-36
Consolidated Statements of Cash Flows for Years Ended December 31, 2013 and 2012		F-37
Notes to Consolidated Financial Statements		F-38

	Amount to Be Paid
Registration fee	$	6,440
FINRA filing fee		8,000
NYSE listing fee		*
Transfer agent’s fees		*
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Miscellaneous		*

Total	$		*

Exhibit Number		Description
1		Form of Underwriting Agreement*
3.1		Form of Amended and Restated Articles of Incorporation
3.2		Form of Amended and Restated Bylaws
5		Opinion of Shutts & Bowen LLP*
10.1		C1 Financial, Inc. 2014 Omnibus Incentive Plan
10.2		C1 Bank Cash Incentive Plan
10.3		C1 Financial, Inc. 2014 Employee Stock Purchase Plan
21		Subsidiaries of the Registrant†
23.1		Consent of Crowe Horwath LLP
23.2		Consent of Shutts & Bowen LLP (included in Exhibit 5)*
24.1		Power of Attorney (included on signature page) †

C1 Financial, Inc.


By:	/s/ Trevor R. Burgess
	Name:	Trevor R. Burgess
	Title:	Chief Executive Officer

Signature	Title	Date

/s/ Trevor R. Burgess	Chief Executive Officer and Director (principal executive officer)	July 24, 2014
Trevor R. Burgess

*	Chief Financial Officer (principal financial and accounting officer)	July 24, 2014
Cristian A. Melej

*	Chairman and Director	July 24, 2014
William H. Sedgeman, Jr.

*	Director	July 24, 2014
Brian D. Burghardt

*	Director	July 24, 2014
Phillip L. Burghardt

*	Director	July 24, 2014
Marcelo Faria de Lima

*	Director	July 24, 2014
Robert P. Glaser

*	Director	July 24, 2014
Neil D. Grossman

*	Director	July 24, 2014
Duane L. Moore

*	Director	July 24, 2014
Kathryn B. Pemble

*	Director	July 24, 2014
Adelaide Alexander Sink

*	Director	July 24, 2014
Ryan L. Snyder

Name	Class
Brian D. Burghardt	Class I
Duane L. Moore	Class I
Kathryn B. Pemble	Class I
Alex Sink	Class I
Phillip L. Burghardt	Class II
Robert Glaser	Class II
Neil D. Grossman	Class II
William H. Sedgeman, Jr.	Class III
Trevor R. Burgess	Class III
Marcelo Faria de Lima	Class III
Ryan L. Snyder	Class III