BOARD OF GOVERNORS 

OF'THE 

FEOERAL RESERVE SYSTEM 

Judith Muncy, Esq. 

Barack F errazano Kirschbaum 

& Nagelberg LLP 

200 West Madison Street 

Suite 3900 

Chicago, Illinois 60606 

Dear Ms. Muncy: 

WASHINGTON, O. C. 20551 

March 2, 2010 

SCOTT G. ALVAREZ 

GENERAL COUNSEL 

This responds to your request for a determination that the following 

entities would not be deemed to control Three Shores Bancorporation, Inc. 

("Three Shores") and its wholly owned subsidiary, Seaside National Bank & 

Trust ("Bank"), both of Orlando, Florida, for purposes of the Bank Holding 

Company Act of 1956, as amended, as a result of their direct or indirect 

acquisition of up to 24.9 percent of the voting and total equity of Three 

Shores: PCAP Managers, LLC; Parthenon Investors III, L.P.; PCAP 

Partners III, LLC; PCAP Associates; PCAP III, LLC; PCAP AssociatesSNBT LLC; PCAP-SNBT LLC; J&R Advisors F.F., LLC; J&R Founders 

Fund II, L.P.; and J&R Founders-S~r:BT LLC; all of Boston, Massachusetts 

(collectively, "Parthenon"). 

Transaction Summary 

Parthenon submitted a notice to the Board pursuant to the Change in 

Bank Control Actl ("CIBCA") to acquire up to 24.9 percent of the 

outstanding shares of Three Shores through the purchase of Series D-1 

Preferred Stock ("Preferred Stock")? Preferred Stock is voting convertible 

1 12 U.S.C. 1817U). 

2 By letter dated November 24, 2009, the Federal Reserve Bank of Atlanta, 

acting pursuant to delegated authority, determined not to object to 

Parthenon's CIBCA notice. 
-2-

preferred stock that has the same voting rights as common stock. Preferred 

Stock would be convertible at any time by Parthenon into common stock. 

The Preferred Stock ranks senior to common stock with respect to rights on 

liquidation, dissolution and winding Up.3 

Under the Preferred Stock Purchase Agreement between Parthenon 

and Three Shores (the "Agreement"), on November 24,2009, Parthenon 

acquired Preferred Stock representing 23.15 percent of the voting equity of 

Three Shores. The Agreement also provides that Parthenon may provide 

additional equity financing in follow-on investments and grants preemptive 

rights if Three Shores or its subsidiaries offer to sell equity securities. The 

preemptive rights provision of the Agreement restricts Parthenon from 

acquiring additional equity securities if Parthenon would be deemed to own 

greater than 24.9 percent of the voting or total equity of Three Shores. In 

addition, Parthenon has represented that in no event would it acquire shares 

of any class of equity of Three Shores if such acquisition would cause 

Parthenon to own, control, or hold with power to vote more than 

24.9 percent of any class of Three Shores' voting securities. Parthenon also 

committed not to O\\iTI or control equity interests equal to or in excess of 

25 percent of the total equity capital of Three Shores or any of its 

subsidiaries. 

Under the Restated Articles of Incorporation of Three Shores, 

Parthenon has the right to elect one director to the boards of directors of both 

Three Shores and Bank. Parthenon has confirmed that each board will have 

a majority of directors that are independent from both management of the 

banking organization and any investor. Parthenon also will have the right to 

appoint a nonvoting observer to Bank's board of directors until such time as 

that board is reduced to seven members. In connection with its request, 

Parthenon has provided commitments that are similar to those on which the 

Board previously has relied to ensure that an investor is not able to exercise 

a controlling influence over a bank or bank holding company.4 

3 When dividends are paid to holders of common stock, the holders of 

Preferred Stock are entitled to dividends in an amount equal to that which 

they would have been entitled to receive had the Preferred Stock been 

converted into common stock. 

4 A copy of all the commitments made by Parthenon is attached as an 

appendix. 
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In addition to Parthenon, two other investors are purchasing shares of 

Three Shores. Each of Parthenon and the other investors represented that it 

conducted its own due diligence review and made an independent decision 

to invest in Three Shores. In addition, each of them represented that it is not 

an affiliate of any other investor and has not had any relationship with, or 

made any investments with, any other investor prior to the investment in 

Three Shores. Finally, Parthenon provided commitments to ensure that it is 

not associated with any other investor for purposes of the BHC Act.s 

Legal Framework; 

For purposes of the BHC Act, a company has control over another 

company if the first company (i) directly or indirectly or acting through one 

or more other persons owns, controls, or has power to vote 25 percent or 

more of any class of voting securities of the other company; (ii) controls in 

any manner the election of a majority of the directors of the other company; 

or (iii) directly or indirectly exercises a controlling influence over the 

management or policies of the other company.6 The Board's Regulation Y 

also sets forth a set of rebuttable presumptions of control.7 

Under the proposal, Parthenon would be deemed to control Three 

Shores for purposes of the BHC Act only if the Board were to find that 

Parthenon exercised a controlling influence over the management or policies 

of Three Shores. Parthenon would not own, control, or hold with power to 

vote 25 percent or more of any class of voting securities of, or control the 

election of a majority of the directors of, Three Shores. In addition, 

Parthenon would not trigger any of the rebuttable presumptions of control in 

Regulation Y with respect to Three Shores as a result of the transactions. 

Discussion and Analysis 

The size and nature of the equity investment by Parthenon in Three 

Shores, when combined with Parthenon's representation on the board of 

directors of Three Shores and Bank and its nonvoting observer of meetings 

5 Id. 

6 12 U.S.C. § 1841(a)(2); 12 CFR 225.2(e). 

7 See 12 CFR22S.31(d). 
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ofthe board of directors of Bank, raise the issue of whether Parthenon would 

exercise a controlling influence over the management or policies of Three 

Shores or Barlie 

Director Representation and Nonvoting Observer. In September 

2008, the Board issued a policy statement regarding equity investments in 

banks, bank holding companies, and nonbanking firms. 8 In its statement, the 

Board noted that a minority investor generally should be able to have a 

single representative on the board of directors of a nonbanking organization 

without acquiring a controlling influence over that organization's 

management or policies. The Policy Statement also noted that boards of 

directors of banking organizations typically have nine or ten members, and 

that attendance by a representative of a minority investor as an observer to 

allow the investor access to information and as a mechanism for providing 

advice to the banking organization generally would not permit the investor 

to exercise a controlling influence over the banking organization, as long as 

the observer does not have any right to vote at meetings of the board. 

As noted above, Parthenon will have one representative on the board 

of directors of Three Shores and Bank.9 Parthenon also proposes to have a 

nonvoting observer at the meetings of the board of directors of Bank but 

only until such time as that board is reduced to seven members. Three 

Shores represented that it would be increasing the board of directors of 

Three Shores from one to seven members and decreasing the board of 

directors of Bank from fourteen to seven members. 10 After these changes, 

the boards of directors at Three Shores and Bank will be substantially 

g 12 CFR 225.144 ("Policy Statement"). 

9 An investor group is considered to have one director representative where 

the boards of directors of the bank holding company and bank are 

substantially similar and the same director representative of the investor 

would serve as a member of each board. 

10 The changes to the size of the boards are due to the fact that the banking 

organization recently established Three Shores as a holding company above 

Bank and has an established plan to enlarge the board of Three Shores and 

streamline the size and composition of the board of Bank. Parthenon has 

represented that the changes to the sizes of the two boards were not a 

condition to Parthenon's investment, and staff does not consider that such 

changes reflect a controlling influence by Parthenon. 
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similar in composition: Also as noted above, the boards of directors of 

Three Shores and Bank will have a majority of directors that are independent 

from both management and any investor. Accordingly, Parthenon's director 

representation conforms to the Policy Statement. 

Equity Ownership. As noted above, Parthenon would not own, 

control, or hold with power to vote 25 percent or more of any class of voting 

securities or of the total equity of Three Shores, as required by the BHC Act 

and the Policy Statement. In addition, Parthenon has provided sufficient 

infonnation to demonstrate that it is not associated with any other investor, 

and therefore the equity investments of such other investors would not be 

attributable to Parthenon. 

Based on all the facts of record in this case, staff would not at this 

time recommend that the Board find that Parthenon exercises a controlling 

influence over the management or policies of Three Shores for purposes of 

the BHC Act. In reaching this detennination, staff relied on all the facts of 

record, including all the representations and commitments made by or on 

behalf of Parthenon and Three Shores (whether noted in this letter or 

otherwise contained in your correspondence with the Board). 

This opinion is specifically conditioned on compliance with all the 

commitments and conditions discussed in this letter. Any change in the facts 

presented could result in a different conclusion and should be reported 

immediately. If you have any questions about this matter, please contact 

Sebastian Astrada, Attorney (202-452-3594), or Pat Robinson, Assistant 

General Counsel (202-452-3005), of the Board's Legal Division. 

Sincerely, 
- 6 -

Appendix 

PCAP-SNBT, LLC, J&R Founders-SNBT LLC, PCAP Associates-SNBT 

LLC, Parthenon Investors III, L.P., J&R Founders Fund II, L.P., J&R 

Advisors F.F., LLC, PCAP Associates, PCAP Partners III, LLC PCAP 

Managers, LLC, and PCAP III, LLC, (collectively, "Acquirer"), all of 

Boston, Massachusetts, and their subsidiaries and affiliates (collectively, 

"Acquirer Groupn), will not, without the prior approval of the Board or its 

staff, directly or indirectly: 

1. Exercise or attempt to exercise a controlling influence over the 

management or policies of Three Shores Bancorporation ("Target"), 

Orlando, Florida, or any of its subsidiaries; 

2. Have or seek to have more than one representative of Acquirer Group 

serve on the board of directors of Target or any of its subsidiaries; 

3. Pennit any representative of the Acquirer Group who serves on the board 

of directors of Target or any of its subsidiaries to serve (i) as the 

chairman of the board of directors of Target or any of its subsidiaries, (ii) 

as the chainnan of any committee of the board of directors of Target or 

any of its subsidiaries, or (iii) serve as a member of any committee of the 

board of directors of Target or any of its subsidiaries if the Acquirer 

Group representative occupies more than 25 percent of the seats on the 

committee; 

4. Have or seek to have any employee or representative of the Acquirer 

Group serve as an officer, agent, or employee of Target or any of its 

subsidiaries; 

5. Take any action that would cause Target or any of its subsidiaries to 

become a subsidiary of Acquirer Group; 

6. Own, control, or hold with power to vote securities that (when 

aggregated with securities that the officers and directors of the Acquirer 

Group own, control, or hold with power to vote) represent 25 percent or 

more of any class of voting securities of Target or any of its subsidiaries; 

7. Own or control equity interests that would result in the combined voting 

and nonvoting equity interests of the Acquirer Group and its officers and 

directors to equal or exceed 25 percent of the total equity capital of 
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Target or any of its subsidiaries, except that, ifthe Acquirer Group owns, 

holds, or has the power to vote less than 15 percent of the outstanding 

shares of any classes of voting securities of Target, it may own or control 

equity interests greater than 25 percent, but in no case more than 33.3 

percent, of the total equity capital of Target or any of its subsidiaries; 

8. Propose a director or slate of directors in opposition to a nominee or slate 

of nominees proposed by the management or board of directors of Target 

or any of its subsidiaries; 

9. Enter into any agreement with Target or any of its subsidiaries that 

substantially limits the discretion of Target's management over major 

policies and decisions, including, but not limited to, policies or decisions 

about employing and compensating executive officers; engaging in new 

business lines; raising additional debt or equity capital; merging or 

consolidating with another firm; or acquiring, selling, leasing, 

transferring, or disposing of material assets, subsidiaries, or other entities; 

10. Solicit or participate in soliciting proxies with respect to any matter 

presented to the shareholders of Target or any of its subsidiaries; 

11. Dispose or threaten to dispose (explicitly or implicitly) of equity 

interests of Target or any of its subsidiaries in any manner as a condition 

or inducement of specific action or non-action by Target or any of its 

subsidiaries; or 

12. Enter into any other banking or nonbanking transactions with Target or 

any of its subsidiaries, except that the Acquirer Group may establish and 

maintain deposit accounts with Target, provided that the aggregate 

balance of all such deposit accounts does not exceed $500,000 and that 

the accounts are maintained on substantially the same terms as those 

prevailing for comparable accounts of persons unaffiliated with Target. 

Acquirer also certifies that: 

13. Acquirer is not an affiliate of any other investor in the proposed 

transaction (individually, each an "Investor," and, collectively, the 

"Investors"); 

14. Acquirer has reached its decision to invest in Target independently from 

the other Investors; 
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15. Acquirer is not managed or advised by an investment manager or 

investment advisor who performs the same services for any other 

Investor; 

16. Acquirer has not engaged and will not engage as part of a group 

consisting of substantially the same entities as the Investors, in 

substantially the same combination of interests, in any additional 

banking or nonbanking activities or business ventures in the United 

States without prior consultation with the Board; 

17. Acquirer has not and will not enter any agreements or understandings 

with any other Investor to act in concert for the purpose of exercising a 

controlling influence over Target or any of its subsidiaries, including, 

but not limited to, any agreements or understandings regarding the 

voting or transfer of shares of Target, other than the agreements 

considered by the Board for the proposed transaction; and 

18. Any director representing Acquirer will not collude or conspire with any 

other directors or shareholders of Target with respect to the exercise of 

any director's voting rights. Nothing in this commitment shall limit a 

director's ability to exercise their legitimate duties/rights as a director of 

Target, including the ability to consult with other directors and 

shareholders as appropriate. 

The terms used in these commitments have the same meanings as set forth in 

the Bank Holding Company Act of 1956, as amended, and the Board's 

Regulation Y. 

Acquirer understands that these commitments constitute conditions imposed 

in writing in connection with the Board's findings and decisions related to 

Acquirer's acquisition of up to 24.9 percent of voting shares of Target, 

including a determination that no filing under the Bank Holding Company 

Act is required for this transaction by Acquirer, and, as such, may be 

enforced in proceedings under applicable law.