Pursuant to the terms of the loss sharing agreements, the FDIC’s obligation to reimburse 1^st United Bank for losses with respect to Covered Assets begins with the first dollar of loss incurred. The FDIC will reimburse 1^st United Bank for 80% of losses with respect to Covered Assets. 1^st United Bank will reimburse the FDIC for 80% of recoveries with respect to losses for which the FDIC paid 1^st United Bank 80% reimbursement under the loss sharing agreements. The loss sharing agreement applicable to single-family residential mortgage loans provides for FDIC loss sharing and 1^st United Bank reimbursement to the FDIC, in each case as described above, for ten years. The loss sharing agreement applicable to commercial loans and other real estate owned provides for FDIC loss sharing for five years and 1^st United reimbursement for eight years on the same terms and conditions as described above.

The loss sharing agreements prohibit the assignment by 1^st United Bank of its rights under the loss sharing agreements and the sale or transfer of any subsidiary of 1^st United Bank holding title to Covered Assets without the prior written consent of the FDIC. An assignment would include (i) the merger or consolidation of 1^st United Bank with or into another bank, if the Registrant will own less than 66.66% of the equity of the resulting bank; (ii) the merger or consolidation of the Registrant with or into another company, if the shareholders of the Registrant will own less than 66.66% of the equity of the resulting company; (iii) the sale of all or substantially all of the assets of 1^st United Bank to another company or person; or (iv) a sale of shares by any one or more shareholders of the Registrant or 1^st United Bank that would effect a change in control of 1^st United Bank. 1^st United Bank’s rights under the loss sharing agreements will terminate if any assignment of the loss sharing agreements occurs without the prior written consent of the FDIC.

In addition, on February 14, 2021, 1^st United Bank will pay to the FDIC 50% of the excess, if any, of (1) $14,000,000 minus (2) the sum of (a) 25% of the asset discount bid made in connection with the Acquisition, (b) 20% of the Cumulative Shared-Loss Payments (as defined below) and (c) 3.5% of the total loans subject to loss sharing under the loss sharing agreements as specified in the schedules to the Agreement. For the purposes of the above calculation, Cumulative Shared-Loss Payments means (i) the aggregate of all of the payments made or payable to the Registrant under the loss sharing agreements minus (ii) the aggregate of all of the payments made or payable to the FDIC under the loss sharing agreements.

The above reimbursable losses and recoveries are based on the book value of the relevant loans and other assets as determined by the FDIC as of the effective date of the Acquisition. The amount that 1^st United Bank realizes on these assets could differ materially from the carrying value that will be reflected in any financial statements, based upon the timing and amount of collections and recoveries on the covered assets in future periods.

The foregoing summary of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement and certain exhibits attached thereto, a copy of which is attached hereto as Exhibit 2.1 and incorporated by reference herein.

Item 2.01. Completion of Acquisition or Disposition of Assets.

The information set forth under Item 1.01 “Entry into a Material Definitive Agreement” is incorporated by reference into this Item 2.01.