S-1 1 dp47814_s1.htm FORM S-1
 
 
As filed with the Securities and Exchange Commission on July 11, 2014
Registration No. 333-


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

C1 Financial, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
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)

 
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)

Copies to:
Manuel Garciadiaz
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
 
Mark Kanaly
Lesley H. Solomon
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309
(404) 881-7000
 
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
 
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
 
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
 
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
 
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
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
Amount To Be Registered(1)
Proposed Maximum Offering Price Per Unit(2)
Proposed Maximum Aggregate Offering Price(2)
Amount Of
Registration Fee
Common Stock, par value $1.00 per share
Shares
$
$50,000,000
$6,440
 
(1)
Includes   shares which the underwriters have the right to purchase to cover over-allotments.
(2)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457 under the Securities Act of 1933.
 
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.


 
 
 
 
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
 
SUBJECT TO COMPLETION, DATED      , 2014
 
IPO PRELIMINARY PROSPECTUS

 
Shares
 
C1 Financial, Inc.
 
Common Stock
$        per share

 
C1 Financial, Inc. is offering     shares of its common stock.
 
Prior to this offering, there has been no established public market for our common stock. It is currently estimated that the initial public offering price per share of our common stock will be between $  and $  per share. We have applied to list the common stock on the New York Stock Exchange under the symbol “BNK.”
 
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act and will therefore be subject to reduced reporting requirements.
 

Investing in our common stock involves risks. See “Risk Factors” beginning on page 14.

 
   
Per Share
   
Total
 
Initial public offering price
  $       $    
Underwriting discounts and commissions
  $       $    
Proceeds to C1 Financial, Inc., before expenses
  $       $    
 

C1 Financial, Inc. has granted the underwriters the right to purchase an additional     shares of common stock to cover over-allotments at the initial public offering price less the underwriting discount.
 
These securities are not deposits, savings accounts, or other obligations of any bank or savings association and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 
 
Keefe, Bruyette & Woods
A Stifel Company
 
Raymond James
 
The date of this prospectus is   , 2014
 
 
 

 


 
 

 


 
 

 



 
 

 
 

 
 
Page
Implications of Being an Emerging Growth Company

 
 
 
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.
 
 
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.
 
 
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
 

ii
 
 

 
 
·
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 March 31, 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
 
 


 
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 17th 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 March 31, 2014.
 
Why Do Our Clients Bank with Us?
 
 
1.
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.
 
 
2.
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 $33 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.
 
 
3.
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.
 
 
4.
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.
 
 
5.
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

 
 
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 Ft. 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 March 31, 2014, a compound annual growth rate of 49%;
 
 
·
growing non-interest-bearing deposits from $17 million at December 31, 2009 to $226 million at March 31, 2014, a compound annual growth rate of 83%, while growing overall deposits from $219 million to $1.1 billion during the same timeframe, with a compound annual growth rate of 47%;
 
 
·
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%, 165%, 20% 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 $30 million of additional capital (representing 19% of our current ownership) 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 April 30, 2014, after approximately three months of operation, our Wynwood location had $31 million in deposits and a cost of funds of just ten basis points, the lowest cost of funds of any banking center in our network;
 

 
·
attracting and retaining the best talent, including through 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 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 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, FL
    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.

 
 
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 almost 190,000 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 37 months as of March 31, 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
 

 
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 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 $6.4 million in the first quarter 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 March 31, 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


 

 
·
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.
 

 
 
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. 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 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 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.

 
 
 
The following table sets forth our summary consolidated financial data (i) as of and for the three-month period ended March 31, 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 three-month period ended March 31, 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                 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 3, 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 4, 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 Three-
Month Periods Ended March 31,
   
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
  $ 15,195     $ 9,619     $ 48,499     $ 38,201  
Interest expense
    2,049       1,349       6,650       6,127  
Net interest income
    13,146       8,270       41,849       32,074  
Provision for loan losses
    36       (104 )     1,218       2,358  
Bargain purchase gain
    41             13,462       6,235  
Gain (loss) on sale of securities
                305       3,035  
Total noninterest income
    2,040       1,174       21,648       15,051  
Total noninterest expense
    10,997       9,008       42,637       33,963  
Income before income taxes
    4,153       540       19,642       10,804  
Income tax expense (benefit)
    1,627       208       7,652       (2,304 )
Net income
    2,526       332       11,990       13,108  
Per Share Outstanding Data
                               
Net earnings (loss) per share
  $ 0.03     $ 0.00     $ 0.15     $ 0.18  
Diluted net earnings (loss) per share
    0.03       0.00       0.15       0.18  
Common shares outstanding at year or period end (000s)
    91,362       74,541       85,519       74,541  
Diluted shares outstanding (000s)
    91,362       74,806       85,629       74,806  
Book value per share
  $ 1.50     $ 1.30     $ 1.42     $ 1.29  
Tangible book value per share
    1.48       1.30       1.40       1.29  
Balance Sheet Data
                               
Cash and due from banks
  $ 240,261     $ 115,531     $ 143,452     $ 77,038  
Securities available for sale
    938       109,467             109,423  
Loans receivable, gross
    1,044,786       654,141       1,053,029       663,634  
Loans originated by C1 Bank (Nonacquired)
    629,616       310,801       614,613       301,858  
Loans acquired(1)
    415,170       343,340       438,416       361,776  
Total assets
    1,412,871       969,571       1,323,371       938,066  
Total deposits
    1,115,282       792,561       1,041,043       760,041  
Borrowings
    153,500       76,500       153,500       78,300  
Total liabilities
    1,275,955       872,419       1,201,557       841,619  
 

 


   
As of and for Three-
Month Periods Ended March 31,
   
As of and for Years
Ended December 31,
 
   
2014
   
2013
   
2013
   
2012
 
   
(in thousands, except per share data and ratios)
 
Total stockholders’ equity
    136,916       97,152       121,814       96,447  
Tangible stockholders’ equity
    135,336       96,622       120,080       95,828  
Capital Ratios
                               
Total capital to risk-weighted assets
    12.48 %     12.75 %     10.97 %     12.54 %
Tier 1 capital to risk-weighted assets
    12.10 %     12.21 %     10.62 %     12.03 %
Tier 1 capital to average assets
    9.79 %     9.99 %     9.36 %     10.18 %
Tier 1 leverage ratio
    9.80 %     10.01 %     9.36 %     10.21 %
Tangible Common Equity / Tangible Assets
    9.59 %     9.97 %     9.09 %     10.22 %
Equity / Assets
    9.69 %     10.02 %     9.20 %     10.28 %
Asset Quality Ratios
                               
Total non-performing loans to loans receivable
    2.08 %     3.05 %     2.26 %     3.51 %
Total non-performing assets to total assets
    4.24 %     4.17 %     4.90 %     4.51 %
Total allowance for loan losses to non-performing loans
    16.71 %     14.97 %     14.35 %     12.07 %
Net charge-offs (recoveries) to total loans
    (0.07 )%     (0.17 )%     0.08 %     0.88 %
Nonacquired net charge-offs (recoveries) to total nonacquired loans
    0.00 %     0.00 %     0.00 %     0.02 %
Allowance for loan losses to total loans
    0.35 %     0.46 %     0.32 %     0.42 %
Allowance for loan losses to nonacquired loans
    0.58 %     0.96 %     0.56 %     0.93 %
Nonperforming Assets
                               
Nonacquired non-performing assets
  $ 144     $ 47     $ 737     $ 47  
Nonaccrual loans
    100             693        
OREO(2)
    44       47       44       47  
Nonacquired restructured loans
                64        
Nonacquired non-performing assets to nonacquired loans plus OREO
    0.02 %     0.02 %     0.12 %     0.02 %
Acquired non-performing assets
  $ 59,797     $ 40,418     $ 64,094     $ 42,296  
Nonaccrual loans
    21,604       19,938       23,089       23,315  
OREO
    38,193       20,480       41,005       18,980  
Acquired restructured loans(3)
    927       1,310       916       2,124  
Acquired non-performing assets to acquired loans plus OREO
    13.19 %     11.11 %     13.37 %     11.11 %
Loan Composition
                               
Acquired loans by type:(1)
                               
Owner occupied CRE
  $ 123,677     $ 105,090     $ 132,834     $ 108,971  
Non owner occupied CRE
    106,250       64,547       111,989       67,643  
C&I
    30,243       25,651       29,707       29,719  
C&D
    21,745       18,008       24,049       22,097  
1-4 family
    114,420       105,942       119,846       108,058  
Multifamily
    8,673       11,610       9,212       12,326  
Consumer and other
    10,162       12,492       10,779       12,962  
Nonacquired Loans by Type
                               
Owner occupied CRE
    68,222       41,225       71,662       47,109  
Non owner occupied CRE
    266,063       134,216       263,712       127,163  
C&I
    50,433       39,443       55,804       37,109  
C&D
    71,144       44,306       66,925       37,322  
1-4 family
    86,877       41,342       76,392       43,592  
Multifamily
    51,125       3,144       46,829       3,219  
Consumer and other
    35,752       7,125       33,289       6,344  
 
 

 
   
As of and for Three-
Month Periods Ended March 31,
   
As of and for Years
Ended December 31,
 
   
2014
   
2013
   
2013
   
2012
 
   
(in thousands, except per share data and ratios)
 
New loan origination(4)
    44,611       22,050       417,567       202,189  
Yield on loans
    5.77 %     5.65 %     5.83 %     5.78 %
Adjusted yield on loans(5)
    5.54 %     5.45 %     5.59 %     5.44 %
Deposit Composition
                               
Demand
  $ 225,565     $ 131,118     $ 194,383     $ 108,862  
NOW
    144,648       145,365       138,765       131,562  
Money market and savings
    379,303       301,814       362,591       277,775  
Retail time
    336,358       195,608       319,780       218,108  
Jumbo time(6)
    29,408       18,656       25,524       23,734  
Cost of deposits
    0.55 %     0.57 %     0.55 %     0.70 %
Adjusted cost of deposits(7)
    0.57 %     0.66 %     0.59 %     0.80 %
Selected Performance Metrics
                               
ROAA
    0.74 %     0.14 %     1.08 %     1.50 %
ROAE
    8.03 %     1.38 %     11.43 %     15.63 %
Net interest margin (NIM)
    4.37 %     4.08 %     4.31 %     4.03 %
Adjusted NIM(8)
    4.12 %     3.77 %     4.02 %     3.60 %
Efficiency ratio
    72.40 %     95.40 %     67.50 %     76.90 %
Yield on loans
    5.77 %     5.65 %     5.83 %     5.78 %
Cost of deposits
    0.55 %     0.57 %     0.55 %     0.70 %

 
(1)
Loans not originated under C1 Bank (including loan 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.
 
 
·
“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. 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 Three-
Month Period Ended March 31,
   
As of and for Year
Ended December 31,
 
   
2014
   
2013
   
2013
   
2012
 
   
(in thousands, except per share data and ratios)
 
Reported yield on loans
    5.77 %     5.65 %     5.83 %     5.78 %
Effect of accretion income on acquired loans
    0.23 %     0.20 %     0.24 %     0.34 %
Adjusted yield on loans
    5.54 %     5.45 %     5.59 %     5.44 %
                                 
Reported cost of deposits
    0.55 %     0.57 %     0.55 %     0.70 %
Effect of premium amortization on acquired time deposits
    (0.02 %)     (0.09 %)     (0.04 %)     (0.10 %)
Adjusted cost of deposits
    0.57 %     0.66 %     0.59 %     0.80 %
                                 
Reported net interest margin
    4.37 %     4.08 %     4.31 %     4.03 %
Effect of accretion income on acquired loans
    0.20 %     0.16 %     0.19 %     0.26 %
Effect of premium amortization on acquired time deposits and borrowings
    0.05 %     0.15 %     0.10 %     0.17 %
Adjusted net interest margin
    4.12 %     3.77 %     4.02 %     3.60 %
                                 
Total stockholders’ equity
  $ 136,916     $ 97,152     $ 121,814     $ 96,447  
Less:
                               
Goodwill
    249       249       249       249  

 
   
 
As of and for Three-
Month Period Ended March 31,
   
 
As of and for Year
Ended December 31,
 
   
2014
   
2013
   
2013
   
2012
 
   
(in thousands, except per share data and ratios)
 
Other intangible assets
    1,331       281       1,485       370  
Tangible stockholders’ equity
    135,336       96,622       120,080       95,828  
Shares outstanding (000s)
    91,362       74,541       85,519       74,541  
Tangible book value per share
    1.48       1.30       1.40       1.29  
Average assets
    1,381,400       943,817       1,107,798       870,202  
Average equity
    127,529       97,301       104,919       83,624  
Average equity to average assets
    9.23 %     10.31 %     9.47 %     9.61 %
Average goodwill and other intangible assets
    1,669       580       972       459  
Tangible average equity to tangible average assets
    9.11 %     10.25 %     9.38 %     9.56 %
                                 
Efficiency ratio
                               
Noninterest expense
    10,997       9,008       42,637       33,963  
Net interest taxable equivalent income
    13,146       8,270       41,849       32,164  
Noninterest taxable equivalent income (loss)
    2,040       1,174       21,648       15,051  
Less gain (loss) on sale of securities
                305       3,035  
Adjusted operating revenue
    15,186       9,444       63,192       44,180  
Efficiency ratio
    72.4 %     95.4 %     67.5 %     76.9 %

 
 
 
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 March 31, 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;
 

 
 
·
the credit history of a particular borrower; and
 
 
·
changes in economic and industry conditions.
 
As of March 31, 2014, December 31, 2013 and December 31, 2012 the allowance for loan losses was $3.6 million, $3.4 million and $2.8 million, respectively. Non-performing loans totaled $21.7 million, $23.8 million and $23.3 million as of March 31, 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 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 loans losses is 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 our loans may be unseasoned, meaning that many of the loans were originated relatively recently. In particular, as of March 31, 2014, we had $1,045 million in loans outstanding. Approximately 60% of the loans, or $630 million, had been originated in the past four years. 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
 

 
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 100%. 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.
 

 
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 March 31, 2014, were $624.0 million, $201.3 million, $92.9 million, $80.7 million, and $45.9 million, respectively, or 59.7%, 19.3%, 8.9%, 7.7%, and 4.4%, respectively, of our total loans. We have a high concentration of commercial real estate loans that exceeds guidance by the bank regulators. At March 31, 2014, December 31, 2013 and December 31, 2012 our ratio for construction, development and other land loans to total capital was 67%, 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 328%, 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 March 31, 2014, December 31, 2013 and 2012 of $46.4 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 March 31, 2014, our ten largest loan relationships totaled over $196 million in loan exposure or 18.7% of the total loan portfolio. The concentration risk associated with having a small number of extremely large loan
 

 
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 $59.9 million at March 31, 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
 

 
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 March 31, 2014, the Bank’s legal lending limit for loans was approximately $33.9
 

 
million to any one borrower on a secured basis and $20.3 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.
 
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 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 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.
 
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 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 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 March 31, 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.
 

 
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 Bank Holding Company Act of 1956, as amended, or 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.
 

 
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.
 

 
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.
 

 
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, 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.
 

 
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, 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;
 

 
 
·
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
 

 
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 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.
 

 
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 March 31, 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
 

 
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.
 

 
 
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.
 

 
 
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 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.
 

 
 
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 shareholders 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 shareholders. 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.”
 

 
 
The following table sets forth our capitalization, including regulatory capital ratios, on a consolidated basis as of March 31, 2014:
 
 
·
on an actual basis; and
 
 
·
on an as adjusted basis to reflect (i) the         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 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 March 31, 2014
 
   
Actual
   
As Adjusted
 
   
(in thousands, except ratios)
 
Stockholders’ equity:
           
Common stock, par value $1.00 per share, 100,000,000 shares authorized, 91,362,127 shares outstanding actual and shares outstanding as adjusted
    91,362        
Additional paid-in capital
    27,226        
Retained earnings
    18,217        
Accumulated other comprehensive income
    111        
Total stockholders’ equity
  $ 136,916     $    
                 
Capital ratios:
               
Total capital to risk-weighted assets
    12.48 %        
Tier 1 Capital to risk-weighted assets
    12.10 %        
Tier 1 Capital to average assets
    9.80 %        


 
 
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 March 31, 2014 was $135.3 million, or $1.48 per share of common stock based on the 91,362,127 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         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 March 31, 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 March 31, 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 March 31, 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 March 31, 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 March 31, 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 March 31, 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 March 31, 2014, would be $   million, or $   per share, representing an immediate increase in as adjusted tangible book value to our existing stockholders over our historical March 31, 2014 book value per share of $   per share and immediate dilution to investors participating in this offering of $   per share.
 

 
 
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 three-month period ended March 31, 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 three-month period ended March 31, 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         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 Three-
Month Period Ended March 31,
   
As of and for Year Ended December 31,
 
   
2014
   
2013
   
2013
   
2012
   
2011
   
2010
 
   
(in thousands, except per share data and ratios)
 
Statement of Income Data:
                                   
Interest income
  $ 15,195     $ 9,619     $ 48,499     $ 38,201     $ 27,015     $ 11,220  
Interest expense
    2,049       1,349       6,650       6,127       5,815       4,976  
Net interest income
    13,146       8,270       41,849       32,074       21,200       6,244  
Provision for loan losses
    36       (104 )     1,218       2,358       2,846       1,426  
Bargain purchase gain
    41             13,462       6,235       1,114        
Gain (loss) on sale of securities
                305       3,035       294       292  
Total noninterest income
    2,040       1,174       21,648       15,051       5,238       1,783  
Total noninterest expense
    10,997       9,008       42,637       33,963       18,027       7,915  
Income before income taxes
    4,153       540       19,642       10,804       5,565       (1,314 )
Income tax expense (benefit)
    1,627       208       7,652       (2,304 )            
Net income
    2,526       332       11,990       13,108       5,565       (1,314 )
                                                 
Per Share Outstanding Data
                                               
Net earnings (loss) per share
  $ 0.03     $ 0.00     $ 0.15     $ 0.18     $ 0.11     $ (0.06 )
Diluted net earnings (loss) per share
    0.03       0.00       0.15       0.18       0.11       (0.06 )
Common shares outstanding at year or period end (000s)
    91,362       74,541       85,519       74,541       67,295       27,280  
Diluted shares outstanding (000s)
    91,362       74,806       85,629       74,806       67,295       27,280  
Book value per share
  $ 1.50     $ 1.30     $ 1.42     $ 1.29     $ 1.11     $ 1.10  
Tangible book value per share
    1.48       1.30       1.40       1.29       1.10       1.10  
                                                 
Balance Sheet Data
                                               
Cash and due from banks
  $ 240,261     $ 115,531     $ 143,452     $ 77,038     $ 13,250     $ 24,695  
Securities available for sale
    938       109,467             109,423       103,337       23,565  
Loans receivable, gross
    1,044,786       654,141       1,053,029       663,634       549,081       209,573  
Loans originated by C1 Bank (Nonacquired)
    629,616       310,801       614,613       301,858       169,227       66,038  
Loans acquired(1) 
    415,170       343,340       438,416       361,776       379,854       143,535  
Total assets
    1,412,871       969,571       1,323,371       938,066       729,277       276,101  
Total deposits
    1,115,282       792,561       1,041,043       760,041       557,701       225,601  
Borrowings
    153,500       76,500       153,500       78,300       94,313       19,300  
Total liabilities
    1,275,955       872,419       1,201,557       841,619       654,684       246,025  
Total stockholders’ equity
    136,916       97,152       121,814       96,447       74,593       30,076  
Tangible stockholders’ equity
    135,336       96,622       120,080       95,828       74,090       30,076  
                                                 
Capital Ratios
                                               
Total capital to risk-weighted assets
    12.48 %     12.75 %     10.97 %     12.54 %     12.89 %     14.84 %
Tier 1 capital to risk-weighted assets
    12.10 %     12.21 %     10.62 %     12.03 %     11.71 %     12.58 %
Tier 1 capital to average assets
    9.79 %     9.99 %     9.36 %     10.18 %     10.24 %     11.12 %
Tier 1 leverage ratio
    9.80 %     10.01 %     9.36 %     10.21 %     10.25 %     11.12 %
Tangible Common Equity / Tangible Assets
    9.59 %     9.97 %     9.09 %     10.22 %     10.17 %     10.89 %

 
   
As of and for Three-
Month Period Ended March 31,
   
As of and for Year Ended December 31,
 
   
2014
   
2013
   
2013
   
2012
   
2011
   
2010
 
   
(in thousands, except per share data and ratios)
 
Equity / Assets
    9.69 %     10.02 %     9.20 %     10.28 %     10.23 %     10.89 %
                                                 
Asset Quality Ratios
                                               
Total non-performing loans to loans receivable
    2.08 %     3.05 %     2.26 %     3.51 %     4.40 %     4.04 %
Total non-performing assets to total assets
    4.24 %     4.17 %     4.90 %     4.51 %     5.28 %     4.28 %
Total allowance for loan losses to non-performing loans
    16.71 %     14.97 %     14.35 %     12.07 %     23.95 %     47.05 %
Net charge-offs (recoveries) to total loans
    (0.07 )%     (0.17 )%     0.08 %     0.88 %     0.26 %     2.06 %
Nonacquired net charge-offs (recoveries) to total non-acquired loans
    0.00 %     0.00 %     0.00 %     0.02 %     0.03 %     0.00 %
Allowance for loan losses to total loans
    0.35 %     0.46 %     0.32 %     0.42 %     1.05 %     1.90 %
Allowance for loan losses to nonacquired loans
    0.58 %     0.96 %     0.56 %     0.93 %     3.42 %     6.03 %
                                                 
Nonperforming Assets
                                               
Nonacquired non-performing assets
  $ 144     $ 47     $ 737     $ 47     $ 97        
Nonaccrual loans
    100             693             97        
OREO(2) 
    44       47       44       47              
Nonacquired restructured loans
                64                    
Nonacquired non-performing assets to nonacquired loans plus OREO
    0.02 %     0.02 %     0.12 %     0.02 %     0.06 %     0.00 %
Acquired non-performing assets
  $ 59,797     $ 40,418     $ 64,094     $ 42,296     $ 38,428     $ 11,813  
Nonaccrual loans
    21,604       19,938       23,089       23,315       24,090       8,466  
OREO
    38,193       20,480       41,005       18,980       14,338       3,347  
Acquired restructured loans(3)
    927       1,310       916       2,124       2,952       3,743  
Acquired non-performing assets to acquired loans plus OREO
    13.19 %     11.11 %     13.37 %     11.11 %     9.75 %     8.04 %
                                                 
Loan Composition
                                               
Acquired loans by type:(1)