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Introduction

First Green Bancorp, Inc., parent company of First Green Bank, is proud of First Green Bank’s financial performance as well as the values performance it has achieved in the first five years of operation. First Green Bank is presently over $300 million in assets and operates five branches throughout Central Florida.

Background

My wife, Cindy, and I are life long Lake County residents, both being born in Eustis a week apart.  Our fathers were both born and raised here as well.  After graduating from FSU with a business degree, I worked in the banking industry for almost 10 years becoming the Senior Vice President and Senior Lender for SouthTrust Bank in Volusia County.  I left the industry and went to UF Law in 1990, graduated, practiced law, then went back into banking.  All that is to say that we are completely immersed in our community and pretty much know all the professionals in Central Florida.  We started our first bank, Florida Choice, in 1999 and sold it in 2006 for a record multiple to Alabama National Bank.  Eighteen months later, Alabama National sold to RBC.  Therefore, my initial investors returned about seven times their investment in seven years. After a cross-country trip which involved long periods of deep introspection – otherwise known as windshield time – I decided that I wanted my next endeavor to encompass a values proposition as well as provide a handsome return for investors.  We were granted the last bank charter in the State of Florida on December 22, 2008 and we opened for business February 17, 2009. However, that creates a very fortunate opportunity for us as we have very little competition.

2020 Vision

I want to extend a sincere thanks to all of our current shareholders for embarking on this endeavor with us.

Sincerely,

Ken LaRoe

Founder and CEO

Contact

Values Proposition

First Green Bank was the first bank on the East Coast of the United States with a stated values proposition. The Bank was asked to join the Global Alliance for Banking on Values (“GABV”) in 2012 and became the 22nd financial institution to join that organization. The GABV is an international and independent network of banks using finance to deliver sustainable development for unserved people, communities, and the environment. As a result of our evolving understanding of the meaning and implementation of our mission, we have embarked on multiple endeavors to influence and educate. The first and ongoing initiative was the formation and development of the First Green Foundation, a 501(c)(3) non-profit. The Foundation began offering grants for installation of solar photovoltaic (“PV”) and hot water systems. To date, $41,000 has been awarded for 214kW in PV and 28 hot water systems. In an attempt to encourage the use of renewable energy, the Bank created a loan product to provide 100% financing at affordable rates and terms for the purchase and installation of solar PV and hot water systems. To date, $470,740 has been closed in these loans and the bank is responsible for 125.802 kW in PV.

Additionally, virtually every aspect of the operation of the Bank has been evaluated and programs implemented to maximize the values proposition. A summary is as follows:

  • Paperless statements are strongly encouraged at account opening and are used by 83% of our customers
  • Remote Deposit Capture has been implemented and is being promoted to reduce trips to the bank.
  • All bank facilities are either built to or converted to the highest level of sustainability attainable. The headquarters building is LEED Platinum
    • the Orlando office is LEED Silver Interior
    • the Clermont office was upgraded and fitted with solar PV
    • the Ormond office was upgraded to reduce energy consumption
    • Winter Park office is pending LEED Gold
  • Electric vehicle charging stations at most locations
  • Strategic Plan, Budget and Goals and Objectives integrate values programs and measurement.
  • Exhaustive co-worker benefits

Accolades

Management of the Bank continues to rank in the top of the state in terms of performance of all banks and especially performance to peer. The team has proven its ability to accomplish exceptional performance while simultaneously pursuing its value proposition. Some of the awards and commendations the Bank has received are as listed below:

  • Bauer Financial 5 Star rated – The only bank in Lake County, and one of a select few banks in all of Florida, to receive this rating for eleven consecutive quarters
  • Bauer Financial 5 Star rated – The only bank in Lake County, and one of a select few banks in all of Florida, to receive this rating for eleven consecutive quarters
  • Peer Group Rankings – See below for the most recent results for 3rd Quarter 2013:
    • FIG Partners: #1 in Asset Quality in Central Florida as measured by the Texas Ratio
    • Hacker Johnson and Smith CPA:
      • #1 in Asset Quality in Central Florida as measured by Non-current Assets to Assets and tied for #1 in the state
      • #1 in Loan Growth in Central Florida and 9th in the state
      • #1 in Asset Growth in Central Florida, again achieved even with De Novo limits placed by the FDIC; and, Highest Net Interest Margin in Central Florida at 4.43
    • Hovde Group: #1 in Central Florida in: Non-performing Assets to Total Assets at .27
      • #1 in Texas Ratio
      • #1 in Central Florida and #9 in the state in Loan Growth
      • #1 in Central Florida and 6th in the state in Net Interest Margin at 4.43%.
    • Monroe Financial Partners: #1 in Asset Quality in Central Florida
  • 2010
    • Florida Trend Magazine – “Florida’s Best Companies to Work For”
  • 2011
    • Orlando Sentinel – “Top 100 Companies for Working Families”
    • US Green Building Council [Central Florida Chapter] – “2011 Business of the Year”
    • Florida Trend Magazine – “Florida’s Best Companies to Work For”
  • 2012
    • American Banker – “America’s Greenest Banks”
    • Investing Answers – One of “The 359 Safest Banks in America” based on Texas Ratios
    • One of “The 359 Safest Banks in America,” by Investing Answers in 2012 – based on Texas Ratios.
    • Outside Magazine – “Top 100 Best Places to Work”
    • Sustainable Florida – Best Practice Awards, “Small Business” and “Green Building”
    • Florida Trend Magazine – “Florida’s Best Companies to Work For”
    • Orlando Sentinel – “Top 100 Companies for Working Families”
  • 2013
    • Orlando Business Journal – “Fast 50”
    • Orlando Business Journal – “Florida Fast 100”
    • Grow Florida – “Florida Companies to Watch: Top 50 Winner”
    • American Banker – “Best Banks to Work For”
    • Orlando Business Journal’s Annual Reader’s Choice Award – “Company with the Best Green Business Practices”
    • Sustainable Florida – Best Practice Awards, “Small Business” and “Green Building”
    • Financial Brand – “Highest Facebook Engagement Rate of #100 global community banks and credit unions,” First Green Bank was named #50
    • Ernst and Young’s Entrepreneur of the Year Award, CEO Ken LaRoe was a finalist
    • Orlando Sentinel – “Top 100 Companies for Working Families”
    • Outside Magazine – “Top 100 Best Places to Work”
  • 2014
    • American Business Awards – Silver Stevie Award for “Company of the Year – Banking, Financial Services, and Insurance”
    • Orlando Business Journal’s C-Level Awards – Daniel Dean, Head Technology Officer
    • Orlando Sentinel – “Top 100 Companies for Working Families”
    • Orlando Business Journal – “Fast 50”
    • Orlando Business Journal – “Florida Fast 100”
    • Ernst and Young’s Entrepreneur of the Year Award, CEO Ken LaRoe was a finalist
    • Sustainable Florida – “Best Practice Awards for Large Business and Leadership”
    • Outside Magazine – “Best Companies to Work for”
    • American Banker – “Best Banks to Work”

Business Plan

As First Green Bank approaches 5 years in operation, the bank has perfectly executed its business plan while complying with all regulatory initiatives. Branching continues with the one branch per year strategy. The Bank’s Orlando branch opened in December 2012 and has been met with outstanding response as reflected in the October 31, 2013 month end footings of $17.3 million in loans and $21.5 million in deposits. The Winter Park branch opened April 1, 2014 and has been met with extraordinary response as well. This branch location is strategically situated on the highest trafficked corridor in the most affluent and influential market in Central Florida.

Audited Consolidated Financial Statements

2013 Consolidated Balance Sheets

Assets - ($ in thousands, except per share amounts)

  • At December 31,20132012
  • Cash and due from banks8,8516,369
  • Interest-earning demand deposits in other banks2500
  • Federal funds sold04,170
  • Total cash and equivalents9,10110,539
  • Securities available for sale21,34224,476
  • Loans, net of allowance for loan losses of $2,685 and $1,959198,908149,644
  • Premises and equipment, net13,08910,112
  • Federal Home Loan Bank stock, at cost510246
  • Accrued interest receivable924786
  • Deferred tax asset343481
  • Bank-owned life insurance3,8603,740
  • Other assets181163
  • Total assets$248,258200,187
  • Liabilities and Stockholders' Equity - ($ in thousands, except per share amounts)

  • Liabilities20132012
  • Noninterest-bearing demand deposits49,04537,721
  • Savings, NOW and money-market deposits64,12659,352
  • Time deposits97,19380,065
  • Total deposits210, 364177,138
  • Federal Home Loan Bank advances6,000-
  • Other liabilities1,7901,331
  • Total liabilities218,154178,469
  •  

  • Stockholders' Equity20132012
  • Senior Non-Cumulative Perpetual Preferred Stock4,7274,727
  • Common stock, $5 par value; $10,000,000 shares authorized11,8208,835
  • Additional paid-in capital13,9549,154
  • Retained earnings (accumulated other comprehensive (loss) income172(1,085)
  • Accumulated other comprehensive (loss) income(569)87
  • Total stockholders' equity30,10421,718
  • Total liabilities and stockholders' equity$248,258200,187
  • Consolidated Statements of Comprehensive Income 2013

    Change in unrealized gain on securities - (in thousands)

  • At December 31,20132012
  • Net Earnings$1,304856
  • Other Comprehensive Loss

  • At December 31,20132012
  • Unrealized (loss) gain arising during the year(1,133)64
  • Reclassification adjustment for realized loss (gains)81(360)
  • Net change in unrealized gain(1,052)(296)
  • Deferred income taxes on above change396111
  • Total other comprehensive loss(656)(185)
  • Comprehensive income$648671
  • Year to Date Financial Summary 2014

    Six Months Ended June 30, 2014

    Variance

    Net Interest MarginActualBudgetDollarPercent
    Earning Asset Yield5.35%5.19%84,4340.15%
    Cost of Funds0.72%0.76%-38,765-0.04%
    Net Interest Spread4.40%4.20%123,1990.20%
    Net Interest Margin4.63%4.46%123,1990.17%
    Value of 1 basis point, annualized23,70624,068-362-1.50%
    Income SummaryActualBudgetDollarPercent
    Net Interest Income5,446,3825,323,184123,1992.31%
    Provision for Loan Losses353,754297,00056,75419.11%
    Non-Interest Income360,509448,275-87,766-19.58%
    Non-Interest Expense4,118,6324,456,820-338,188-7.59%
    Earnings Before Taxes1,334,5061,017,638316,86731.14%
    Income Tax Expense454,920381,00073,92019.40%
    Net Income879,586636,638242,94838.16%
    Balance SheetActualBudgetDollarPercent
    Assets287,990,731280,765,5317,225,2002.57%
    Loans228,905,452223,740,8175,164,6352.31%
    Earning Assets253,999,720254,960,514-960,794-0.38%
    Deposits253,043,416246,292,2286,751,1872.74%
    FHLB Advances & Other Borrowings0000
    Stockholders' Equity33,233,09832,876,144356,9541.09%

    Year to Date Financial Summary 2013

    Five Months Ended June 30, 2013

    Variance

    Net Interest MarginActualDollarPercent
    Earning Asset Yield29.74%1,078,07824.39%
    Cost of Funds5.12%-28,315-4.40%
    Net Interest Spread23.13%1,106,393-18.73%
    Net Interest Margin24.79%1,106,393-20.16%
    Value of 1 basis point, annualized3,53120,175571.43%
    Income SummaryActualDollarPercent
    Net Interest Income4,339,9891,106,39325.49%
    Provision for Loan Losses498,246-144,492-29.00%
    Non-Interest Income329,94130,5689.26%
    Non-Interest Expense3,615,787502,84413.91%
    Earnings Before Taxes515,897778,609140.06%
    Income Tax Expense122,915332,005270.11%
    Net Income432,982446,604103.15%
    Balance SheetActualDollarPercent
    Assets234,875,57353,115,15822.61%
    Loans186,374,54042,530,91122.82%
    Earning Assets212,307,60941,692,11219.64%
    Deposits206,633,81946,409,59722.46%
    FHLB Advances & Other Borrowings000
    Stahekolders' Equity27,170,5966,062,50222.31%

    Peer Comparisons

    Hovde Group 6/30/2014

    BALANCE SHEETCentral FL (out of 28)Statewide (out of 186)
    Total Assets$287,979,0001181
    Loan Growth27.1%425
    Trans Dep / Total25.10%14127
    INCOME STATEMENT                                                               
    ROA0.67%959
    ROE5.85%1174
    NIM4.60%210
    Yield on Loans5.63%539
    Efficiency Ratio71.10%1049
    CREDIT QUALITY                                                                     
    NPA / Total Assets0.29%211
    Adj. NPA / Total Assets (YTD)0.00%11
    Adj. NPA / Total Assets (2013)0.00%11
    Reserves / Loans1.33%2355
    NCOs / Loans0.00%1352
    Texas Ratio0.0%11
    OREO0N/A
    CAPITAL                                                                     
    Equity / Assets11.549%649