BANCO PINE S.A. 2014-09-08 T-18:38

Consolidate Financial Statements under IFRS for the Quarters Ended on June 30,
2014 and December 31, 2013 and Independent Auditor’s Report.

Banco Pine S.A.

PricewaterhouseCoopers Auditores Independentes

(A free translation of the original in Portuguese)

Report on review of interim
financial statements

To the Board of Directors and Shareholders
Banco Pine S.A

Introduction

We have reviewed the accompanying consolidated interim balance sheet of Banco Pine S.A and its
subsidiaries as at June 30, 2014 and the related consolidated statements ofincome and comprehensive
income for the quarter and six-month period then ended, and the consolidated statements of changes in
equity and cash flows for the six-month period then ended, and a summary of significant accounting
policies and other explanatory notes.

Management is responsible for the preparation and fair presentation of these parent company interim
financial statements in accordance with International Accounting Standard (IAS) 34 – Interim Financial
Reporting, of the International Accounting Standards Board (IASB). Our responsibility is to express a
conclusion on these interim financial statements based on our review.

Scope of review

We conducted our reviewin accordance with Brazilian and International Standards on Reviews of Interim
Financial Information (NBC TR 2410 – Review of Interim Financial Information Performed by the
Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by
the Independent Auditor of the Entity, respectively). A review of interim financial statements consists of
making inquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A reviewis substantially less in scope than an audit conducted in
accordance with Brazilian and International Standards on Auditing and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.

Banco Pine S.A

Conclusion on the consolidated
interim financial statements

Based on our review, nothing has come to our attention that causes us to believe that the accompanying
consolidated interim financial statements referred to above do not present fairly, in all material respects,
the financial position of Banco Pine S.A and its subsidiaries as at June 30, 2014, and their financial
performance for the quarter and six-month period then ended and their cash flows for the six-month
period then ended in accordance with the IAS 34.

Sáo Paulo, September 5, 2014

PricewaterhouseCoopers
Auditores Independentes
CRC 28P000160/0-5

Edison Arisa Pereira
Contador CRC 18P127241/0-0

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS AT JUNE 30, 2014 AND DECEMBER 31,2013

(In thousands of reais – R$)

2120:

ASSETS
Financial assets 9.821.691 9.516.866
Cash and cash equivalents 5 1.198.844 738.652
Financial assets at fair value 2.175.325 2.515.196
Financial assets held for trading 1.587.779 1.817.199
Debt instruments 7 1.031.897 1.300.274
Equity instruments 7 4.270 1.567
Derivative financial instruments 8 551.612 515.358
Available-for-sale financial assets 587.546 697.997
Debt instruments 7 587.546 697.997
Equity instruments 7 – –
Financial assets at amortized cost 6.447.522 6.263.018
Loans and receivables 6.447.522 6.263.018
Loans and advances to financial institutions 6 40.292 57.685
Loans and advances to customers 9 6.407.230 6.205.333
Other assets 586.456 678.553
Non-current assets held for sale 10 112.279 162.764
Other 474.177 515.789
Deposits in guarantee 11 214.576 207.809
Recoverable income tax 59.260 58.417
Other assets 12 200.341 249.563
Deferred tax assets 112.229 84.139
Deferred income tax and social contribution 39. d) 112.229 84.139
Investments 13 97.306 76.509
Property and equipment 14 19.935 25.619
Property and equipment in use 19.935 25.619
Intangible assets 15 1.304 1.663
Intangible assets 1.304 1.663
TOTAL ASSETS 10.638.921 10.383.349

The accompanying notes are an integral part of these consolidated financial statements.

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AS AT JUNE 30, 2014 AND DECEMBER 31,2013

(In thousands of reais – R$)

LIABILITIES AND EQUITY
Financial liabilities

Financial liabilities held for trading
Derivative financial instruments

Financial liabilities at amortized cost
Deposits from financial institutions
Deposits from customers
Funds obtained in the open market
Securities issued abroad
Borrowings and onlendings
Subordinated debt
Other financial liabilities

Provisions
Reserves for contingent liabilities, commitments and other provisions
Provisions for tax risks

Tax liabilities

Other liabilities
Correspondent banks
Other liabilities

TOTAL LIABILITIES

EQUITY
Capital – Local
Capital – Foreign
Capital reserves
Revenue reserves
(-) Treasury shares
Carrying value adjustments

TOTAL LIABILITIES AND EQUITY

16
17
18
19
20
21
22

23

24

25

26

27

9.211.304

248.304
248.304

8.963.000
79.729
3.980.985
469.751
692.049
3.332.382
338.832
69.272

31.059
30.682
377

36.482
94.017
3
94.014
9.372.862
1.266.059
981.692
130.567
191.383
(21.348)
(16.235)

10.638.921

8.978.914

190.833
190.833

8.788.081
89.718
3.785.522
508.792
1.014.860
2.964.320
356.370
68.499

32.458
31.735
723

4.353

89.651
25
89.626

9.105.376

1.277.973
979.805
132.454

14.032
188.617
(22.083)
(14.852)

10.383.349

The accompanying notes are an integral part of these consolidated financial statements.

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013
(In thousands of reais – R$, except net income per share)

PINE

30/6/2014

30/6/2013

pci!

2nd Quarter

Interest income and similar 28 224.209
Interest expense and similar 29 (378.310)
NET INTEREST INCOME (154.101)
Gains from (losses for) financial assets and liabilities (net) 242.390
Financial assets and liabilities held for trading 30.a) 43.546
Derivatives 30.b) 24.488
Debt instruments 30.c) 16.538
Equity Instruments – net income 2.520
Exchange variations (net) 33 198.844
Fee and commission income 31 20.236
Fee and commission expense 32 (1.963)
TOTAL INCOME 106.562
Administrative expenses (51.050)
Personnel expenses 35 (32.002)
Tax expenses (2.361)
Other administrative expenses 36 (16.687)
Other operating income (expenses) 34 1.954
Depreciation and amortization (867)
Provisions (net) 37 6.978
Impairment of financial assets 9.f) (19.444)
Loans and receivables (19.444)
Debt instruments –
Result from sale of assets 38 3.617
OPERATING INCOME BEFORE TAXES 47.750
Income tax and social contribution 39 (11.807)
CONSOLIDATED NET INCOME 35.943
Attributable to controlling stockholders 35.943

EARNINGS PER SHARE (R$)
Basic and diluted earnings per share (R$)

Common shares 0,30
Preferred shares 0,30
Net income attributable/diluted (R$)

Common shares 19.334
Preferred shares 16.609
Weighted average of shares issued – basic

Common shares 65.178.483
Preferred shares 55.993.541

Accumulated

443.347
(558.583)
(115.236)
297.146
85.291
36.388
39.190
9.713
211.855
32.546
(4.063)
210.393
(112.721)
(68.684)
(5.417)
(88.620)
2.196
(2.223)
12.795
(39.143)
(39.143)

9.121
80.418
(18.185)
62.233
62.233

0,51
0,51

33.475
28.758

65.178.483
55.993.541

2nd Quarter

179.923
(132.103)
47.820
22.685
26.749
39.864
(13.115)
(4.064)
22.637
(1.426)
91.716
(49.957)
(28.616)
(3.930)
(17.411)
3.557
(1.523)
9.888
(81.563)
(31.563)

1.229
23.347
10.789
34.136
34.136

0,31
0,31

17.999
16.137

58.444.889
52.397.424

321.099
(248.474)
72.625
113.773
113.777
103.921
9.856
(4)
32.686
(3.061)
216.023
(102.944)
(58.533)
(7.471)
(36.940)
4.738
(3.048)
11.880
(40.165)
(41.719)
1.554
2.478
88.962
(8.625)
80.337
80.337

0,72
0,72

42.360
37.977

58.444.889
52.397.424

The accompanying notes are an integral part of these consolidated financial statements.

(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED 30 JUNE, 2014 AND 2013

(In thousands of reais – R$, except net income per share)

Note

Consolidated net income for the period

Available-for-sale financial assets 27
Fair value variation

Income tax

Other

Cash flow hedges 27
Fair value variation

Income tax

Comprehensive net income

2ndQ

30/6/2014 30/6/2013

ter Accumulated Accumulated
35.943 62.233 34.136 80.337
4.408 (15.298) (6.937) (14.905)
5.010 (16.892) (11.562) (24.940)
(2.004) 6.757 4.625 9.976
1.402 (5.163) – 59
(3.075) (937) (307) 3.364
(5.125) (1.561) (511) 5.607
2.050 624 204 (2.243)
37.276 45.998 26.892 68.796

The accompanying notes are an integral part of these consolidated financial statements.

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013
(In thousands of reais – R$)

EAT Proposed

At December 31, 2012 935.683 – 11.685 303.695 (12.750) – – 11.049 1.249.362
Consolidated net income for the period – – – – – – 80.337 – 80.337
Other comprehensive income – – – – – – – (22.590) (22.590)
Available-for-sale financial assets – – – – – – – (386.624) (36.624)
Cash flow hedges – – – – – – – (1.017) (1.017)
Deferred income tax – – – – – – – 15.051 15.051
Other changes in equity 31.576 – (1.470) 22.597 (8.523) – (80.337) – (81.157)
Capital increase (Note 26) 31.576 – – – – – – – 31.576
Acquisition of treasury shares – – – – (3.523) – – – (8.523)
Recognition of share-based payment – Resolution no,
3.921 (Note 44.a) – – (1.470) – – – – – (1.470)
Legal reserve – – – 4.211 – – (4.211) – –
Statutory reserve – – – 16.126 – – (16.126) – –
Dividend payment – – – (18.559) – – – – (18.559)
Proposed dividend – – – 20.819 – – – – 20.819
Dividends (Note 26) – – – – – – (60.000) – (60.000)
At June 30, 2013 967.259 – 10.215 326.292 (16.273) > > (11541) 1.275.952
At December 31, 2013 1.112.259 – 14.032 188.617 (22.083) – – (14.852) 1.277.973
Consolidated net income for the period – – – – – – 62.233 – 62.233
Other comprehensive income – – – – – – – (1.383) (1.383)
Available-for-sale financial assets – – – – – – – 4.767 4.767
Cash flow hedges – – – – – – – (6.134) (6.134)
Deferred income tax – – – – – – – 547 547
Other comprehensive income – – – – – – – (563) (563)
Other changes in equity – – (14.032) 2.766 735 – (62.233) – (72.764)
Capital increase (Note 26) – – – – – – – – –
Acquisition of treasury shares – – – – (21.348) – – – (21.348)
Cancellation of treasury shares – – (14.032) (9.874) 22.083 – – – (1.823)
Recognition of share-based payment – Resolution no.
3.921 (Note 44.a) – – – – – – – – –
Legal reserve – – – 3.523 – – (3.523) – –
Statutory reserve – – – 18.710 – – (18.710) – –
Interest on equity – – – – – – (83.263) – (33.263)
Proposed dividend – – – (9.593) – – – – (9.593)
Dividends (Note 26) – – – – – – (6.737) – (6.737)
At June 30, 2014 1.112.259 – > 191.383 (21.348 – – (16.235) 1.266.059

“The accompanying notes are an integral part of these consolidated financial statements.

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (INDIRECT METHOD) FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013

(In thousands of reais – R$)

NO 30/06/2014 30/06/2013
OPERATING ACTIVITIES
Adjusted net income 86.465 93.050
Consolidated net income for the period 62.233 80.337
Effect of changes in exchange rates on cash and cash equivalents 10.804 (13.645)
Depreciation and amortization 2.223 3.048
Deferred taxes (16.631) (7.833)
Impairment of loans and receivables 39.143 41.719
Provisions for / Reversal of contingencies (net) 6 129
Net gains on sale of tangible assets, non-operating assets and investments 541 (10)
Market to market of property investment (11.854) (10.695)
Changes in operating assets and liabilities 476.424 12.012
(Increase) Decrease in loans and advances to financial institutions 17.393 (198.009)
(Increase) Decrease in debt instruments 378.828 1.417.363
(Increase) Decrease in equity instruments (4.086) (29.431)
(Increase) Decrease in derivatives(net) 21.216 44.296
(Increase) Decrease in loans and advances to customers (241.039) (452.935)
(Increase) Decrease in deferred income tax and social contribution (11.459) (7.582)
(Increase) Decrease in non-current assets held for sale 50.485 3.728
(Increase) Decrease in recoverable income tax (843) (9.001)
(Increase) Decrease in deposits in guarantee (6.767) (5.535)
(Increase) decrease in other assets 49.222 (149.901)
Increase (Decrease) in securities issued abroad (322.811) (10.302)
Increase (decrease) in deposits 185.473 (135.018)
Increase (decrease) in funds obtained in the open market (39.041) (587.352)
Increase (Decrease) in borrowings and onlendings 368.062 115.027
Increase (Decrease) in correspondent banks (22) 33
Increase (Decrease) in sale or transfer of financial assets – (250)
Increase (Decrease) in other financial liabilities 773 4.425
Increase (Decrease) in provisions (1.405) (17.009)
Increase (Decrease) in tax liabilities 32.130 (8.330)
Increase (Decrease) in other liabilities 315 37.795
Net cash provided by (used in) operating activities 562.889 105.062
INVESTING ACTIVITIES
(Acquisition) / Sale of property and equipment in use 3.265 (653)
(Acquisition) / Sale of intangible assets 14 (18)
Acquisition of property of investment (8.943) (55.000)
Net cash provided by (used in) investing activities (5.664) (55.671)
FINANCING ACTIVITIES
Capital increase – 31.576
Increase (Decrease) in subordinated debt (17.538) 24.834
Premium on subscription of shares – (1.470)
Sale / Acquisition of treasury shares (23.171) (3.523)
Dividends / interest to stockholders (45.520) (55.686)
Net cash provided by (used in) financing activities (86.229) (4.269)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 470.996 45.122
Cash and cash equivalents at the beginning of the period 5 738.652 432.076
Effect of changes in exchange rates on cash and cash equivalents (10.804) 13.645
Cash and cash equivalents at the end of the period 5 1.198.844 490.843
Additional information
Interest received 207.907 92.692
Interest paid 139.067 79.996

The accompanying notes are an integral part of these consolidated financial statements.

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

1. OPERATIONS

Banco Pine S.A. (the “Institution” or “Banco Pine”) is a corporation headquartered at Avenida das Nagóes Unidas, 8501, 29th floor – Pinheiros, Sáo Paulo, SP, listed on
the Sáo Paulo Stock, Commodities and Futures Exchange (BM8FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros), and authorized to operate commercial,
credit and financing and foreign exchange portfolios.

The Institution’s operations are conducted in the context of a group of institutions which act jointly, and certain transactions involve the co-participation or intermediation
of other member companies of the Pine Financial Group. The benefits from the intercompany services and the costs for the operating and administrative structures are
absorbed, either jointly or individually, by these companies as is most practicable and reasonable in the circumstances.

2. FINANCIAL STATEMENT PRESENTATION
a. Statement of Compliance
The Institution’s consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as from January 1, 2009, the

initial adoption date.

The parent company financial statements were prepared locally in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to
Operate by the Brazilian Central Bank (BACEN), with Brazilian corporation law and the regulations established by the Brazilian Securities Commission (CVM), hereinafter
referred to as “BRGAAP”, and is presented separately from these statements. Note 48 presents the reconciliation of equity to net income.

These Consolidated Financial Statements have been prepared in accordance with IAS 34 – Interim Financial Report with the option of presenting the Consolidated
Financial Statements Complete instead of the Condensed Consolidated Financial Statements.

The financial statements under IFRS include the standards issued by the International Accounting Standards Board (IASB) and the interpretations issued by the
International Financial Reporting Interpretation Committee (IFRIC) and their respective antecedent bodies, in compliance with all rules, whose application was
mandatory without exceptions.

In compliance with Resolution 505/06, of the Brazilian Securities Commission (CVM), the Consolidated Financial Statements, as at August 7, 2014, were authorized for
issue on June 30, 2014, by the Institution’s Board of Directors, among other matters.

b. Significant standards, amendments, changes and interpretations issued by IASB applicable for the period ended June 30, 2014:

+ IAS 19 – “Employee Benefits”. The main changes are as follows: (¡) elimination of the corridor approach (ii) recognition of actuarial gains and losses in other
comprehensive income as they occur, (ii) immediate recognition of past service costs in income, and (iv) replacement of the interest cost and expected return on plan
assets with a net interest amount, calculated by applying the discount rate to the net defined benefit asset (liability). This change had no significant impact on the
Consolidated Financial Statements.

+ 1FRS 7 – “Financial Instruments”. In December 2011, further amendments were published about the pronouncement requiring additional disclosures about the process
of offsetting was issued. This change did not generate significant impacts on the Consolidated Financial Statements;

IFRS 10 – “Consolidated Financial Statements” – The pronouncement changes the current principle by identifying the concept of control as a determinant factor for a
consolidated entity. The adoption of this pronouncement did not generate significant impacts on the Consolidated Financial Statements.

IFRS 11 – “Joint Arrangements”. The standard provides a more realistic approach to joint arangements by focusing on the rights and obligations of the arrangement,
rather than its legal form. There are two types of joint arrangements: (i) joint operations – which occurs when an operator has rights to the assets and obligations and
hence accounts for its share of the assets, liabilities, revenues and expenses, and (ii) joint ventures – occurs when an operator has rights to the net assets of the
arrangement and accounts for the investment using the equity method. The proportionate consolidation method is not allowed for joint control. This change generated
significant impacts on the Consolidated Financial Statements;

+ IFRS 12 – “Disclosure of Interests in Other Entities” addresses the disclosure requirements for all forms of interest in other entities, including joint arrangements,
associates, special purpose vehicles and other off balance sheet vehicles. This change had no significant impact on the Consolidated Financial Statements.

IFRS 13 – “Fair Value Measurement”, issued in May 2011. The objective of IFRS 13 is to improve consistency and reduce complexity of fair value measurement,
providing a more precise definition and a single source of fair value measurement and disclosure requirements for IFRS;

e. Significant standards, amendments, changes and interpretations issued by IASB but not yet in force:

The following new standards, amendments and interpretations were issued by IASB, but are not in force for the period ended June 30, 2014. The early adoption of these
standards, although encouraged by IASB, has not yet been authorized, in Brazil, by the Brazilian Accounting Pronouncements Committee (CPC) and CVM:

+ Amendment to IAS 32 – Financial Instruments: Presentation – This amendment was issued to clarify the requirements for offsetting financial instruments on the
balance sheet. Effective from January 1, 2014 with retrospective application. No significant impacts of this change on the consolidated financial statements have been
identified.

+ 1FRS 9 – “Financial instruments” addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November
2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be
classified into either of two categories: those measured at fair value and those measured at amortized cost. The assets are classified at the time of initial recognition
and their classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument.
For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is used for financial liabilities,
the portion of the change in the fair value resulting from an entity’s own credit risk is recognized in other comprehensive income rather than in the statement of income,
unless this creates an accounting mismatch. The full impact of IFRS 9 is under analysis by the Group. The standard is applicable as from January 1, 2015.

3. SIGNIFICANT ACCOUNTING PRACTICES

The accounting practices detailed below were applied for the reporting period covered by these Financial Statements and have been applied on a consistent basis by
Institution’s companies.

a. Basis of consolidation
The consolidated financial statements include the operations of Banco Pine S.A., including the Grand Cayman branch and Pine Securities, its subsidiaries, and those of

the special purpose entities, as well as the investment funds in which the Institution is the sole shareholder.

Transactions, balances and unrealized gains on transactions between group companies are eliminated. The unrealized losses are also eliminated unless the transaction
provides evidence of a loss (impairment) of the transferred asset.. The accounting practices of subsidiaries are changed, when necessary, to ensure that they are
consistent with the policies adopted by the Group.

(A free translation of the original in Portuguese)

PIN

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

We present below the entities included in the consolidated financial statements:

EA
ENE

31/12/2015

Overseas Branches and Subsidiaries

Grand Cayman Branch Overseas branch 100,000 100,000
Subsidiaries

Pine Securities USA LLC!” Broker Dealer 100,000 100,000
Pine Investimentos Distribuidora de Títulos e Valores Mobilários Ltda. Securities dealer 99,9998 99,9998
Pine Comercializadora de Energia Elétrca Ltda (91% Consulting 100,000 100,000
Pine Corretora de seguros Ltda. Insurance broker 9,9998 99,998
Pine Assessoría e Consultoria Ltda. Consulting 9,9998 99,9998
Pine Assessoria em Comerciaizagáo de Energia ‘”% Consulting 10,000 10,000
Pine Planejamento e Servigos Ltda Consulting 99,990 99,890
Special purpose entities

Pine Crédito Privado Fundo de Investimento em Direitos Creditórios Financeiros Receivables investment fund (FIDC) – –
IRE VII Desenvolvimento Imobilário S.A. Development of real state enterprise – .
Fundo de Investimento em Direitos Creditórios – FIDC Pine Agro ‘% Recelvables investment fund (FIDC) – –
Investment funds – sole shareholder

Pine High Yield Fundo de Investimento Mulimercado Crédito Privado Multimarket investment fund – –
Pine CM Fundo de Investimento Multimercado Crédito Privado Multimarket investment fund – –
Pine RB Capital Fundo de Investimento Mutimercado Credito Privado. Multimarkcet investment fund – –
Fundo de Investimento Pine Referenciado DI Crédito Privado, Investment fund – DI (nterbank deposit rate) – –
FIP Rio Corporate – Fundo de Investimentos em Participagóes * Private equity fund – .

‘% as contractual provided for on December 26, 2013, Ihe Pine Comerciaizadora de Energía reduced is capita from RS 77,400 to R $ 1,000.
* Pino Comercializadora de Energia Elática Ltda. hcids 90% of Pino Assosscria em Comerciaizagáo de Energía.

“LEIDO Pine Agro was constíuted cn Septembor 17, 2013 and ho nsttuion paid in 171.428,571 shares,

Subsidiaries

Companies over which the Institution exercises control, defined by the ability to govern their financial and operating policies in order to obtain the benefits of their
activities, are classified as subsidiaries. The Institutior’s subsidiaries are fully consolidated from the effective date of control up to the date that the control ceases. As a
result, all intercompany balances and transactions are eliminated upon consolidation.

Special purpose entity – Pine Crédito Privado Fundo de Investimento em Direitos Creditórios Financeiros (Pine Crédito Privado FIDC).
a) Pine Crédito Privado
In fact the control over receivables assigned to this receivables investment fund still lies with the Institution (receipt, transfer and collection) and, in essence, the

Institution is responsible for providing the guarantees to the FIDC’s investors as regards expected receivables and yield, management decided to consolidate the FIDC,
as provided for in IFRS 10

In accordance with IFRS 10, we present below the information on Pine Crédito Privado, considered in preparing the consolidated financial statements:

i) Name, nature, purpose and activities of the FIDC.
Pine Crédito Privado Fundo de Investimento em Direitos Creditórios Financeiros, managed by Citibank Distribuidora de Títulos e Valores Mobiliários S/A., was
constituted as a closed fund on December 7, 2010. Distribution commenced on March 28, 2011. The Fund offered 207,000 senior shares at the unit value of R$1. The
distribution period ended on April 6, 2011. The Fund will terminate its activities in up to 180 days from the date on which the Senior Shares outstanding are redeemed in
full (54 months subsequent to the Fund’s distribution date).

The purpose of the Fund is to increase shareholder value, exclusively through the acquisition of financial segment Credit Rights, on business loans (working capital),
originated and assigned by Pine, which meet the Qualifying Criteria, as well as the portfolio composition and diversification indices established in the Regulation. As an
additional activity, the Fund will also make investments in Other Assets.

Investment in the equity and results of the FIDC

In accordance with Article 24, section XV, of CVM Instruction 356, as amended by CVM Instruction 393, and Chapter 21 of the Fund Regulation, 69% of the Fund’s
equity will comprise senior shares and 31% will comprise subordinated shares. This ratio will be determined daily and shall be made available for consultation monthly
by the Fund’s shareholders.

Nature of the Institutior’s involvement with the FIDC and type of exposure to loss, if any, arising from this involvement.
Verification of whether the credit rights meet the assignment terms, pursuant to the assignment agreement, is the sole responsibility of the assignor (Banco Pine),
without limiting the assignee’s (Fund) right, either directly or through third parties, to also conduct such verification.

Non-compliance with any obligation originating from the credit rights and other active components of the Fund’s portfolio, is attributed to the subordinated shares up to
the limit corresponding to the sum of their total value. Once this total has been exceeded, the default of credit rights held by the Fund is attributed to the senior shares.
The subordinated shares do not have a profitability target, however, they may benefit from any surplus yield generated by the credit right portfolio.

In the event the percentage of subordinated shares falls below 31% of the Fund’s equity, the Institution shall have five business days to recoup this minimum ratio,
through the subscription of new subordinated shares, and if this does not occur, the management entity shall call an Evaluation Event under the terms of the Fund
regulations. In the event the subordinated shares comprise more than 31% of the Fund’s Equity, the management entity may partially amortize the subordinated shares
in the amount necessary to rebalance this ratio.

iv) Amount and nature of the receivables, payables, income and expenses between the Institution and the FIDC, assets transferred by the Institution and
rights of use over the FIDC assets.
No loans were assigned to the FIDC for the period ended June 31, 2014 and December 31, 2013.

b) IRE Vil Desenvolvimento Imobiliário S/A

Since it has control over the SPE’s activities, the Institution’s management decided to consolidate IRE VIl Desenvolvimento Imobiliário S/A, in accordance with the
provisions of CVM Instruction 408/04.

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

O)
i) Name, nature, purpose and activities of the SPE.

IRE VIII Desenvolvimento Imobiliário S/A was constituted as a corporation on December 9, 2010. Its main activities include the management, purchase, sale and rental
of properties owned by itself or by third parties; real estate development and investment in other companies as a partner or shareholder.

ii) Investment in the equity and results of the SPE
On May 16, 2013, through FIP Rio Corporate, the Institution acquired 100% of the shares of IRE VII Desenvolvimento Imobiliário Ltda.

€) FIDC Pine Agro

Due the fact that the Bank retains the risks and benefits of credits assigned to the Fund by acquiring 100% of the subordinated shares, the Bank’s management decided
to consolidate the FDIC Pine Agro, in accordance with CVM Circular No. 01 /07.

i) Name, nature, purpose and activities of the FDIC Agro.

The Credit Receivables Fund – FDIC Pine Agro , administered by Oliveira Trust Distributor Securities SA was set up in the form a private condominium on September
16, 2013 .. Its equity will consist of two classes of shares , senior shares and subordinated shares, in accordance with Article 12 of CVM Instruction 356 / 01 . The first
offer of senior shares of the fund will be held in accordance with Instruction 476 / 09 , and will be used by Qualified Investors only, acquiring a minimum amount of R$
1,000 (one million Reais ). The Fund has an undetermined life.

Santander Brazil SA has been entrusted by the Fund to be responsible for the provision of services to the Fund, controllership of Fund, qualified custody of assets in the
portfolio, custody of evidentiary documents and bookkeeping of quotas.

The objective of the Fund is to provide long term income to Shareholders by investing the Fund’s resources in the acquisition of credit rights from originating (i) loan
transactions originated and issued by the transferor, either exclusively or syndicated, to their customers in the sectors of activity, and (ii) debentures issued by clients,
active in sectors of activity, the title of the transferor, who may rely on warranties, guarantees among them, that meet the conditions of assignment and eligibility criteria,
subject to all composition indices and portfolio diversification established in the Funds Prospectus.

The Fund may purchase receivables originated and granted by the transferor in the following business segments : (¡ ) sugar and alcohol, (ii ) agriculture ( primary
production ),, (ii) retailers and distributors in the food industry, (iv ) animal protein ; (v ) grains (vi ) beverages (vii ) renewable energy (vil) trading .( ix ) agricultural raw
materials , (x ) pulp and paper , (xi ) value-added products.

) Participation in the equity and results of the FIDC.
In accordance with Article 24, item XV , of CVM . No. 356, as amended by CVM Instruction n . 393, and Chapter 21 of the Rules of the Fund , the relationship between
the value of the senior shares and shareholders’ equity of the Fund is 70%. This means that the Fund should have 30 % of its assets represented by subordinated
quotas . This ratio will be calculated daily and made available to the shareholders of the Fund monthly.

) Nature of involvement with the FIDC and type of exposure to losses , if any, arising from this involvement.

The verification framework for the conditions of receivables of assignment is in the form of the transfer agreement, the sole responsibility of the Custodian , subject to
the right of the assignee (the Fund), directly or through third parties , also to perform such verification

‘Non-compliance with any pecuniary obligation related to credit rights by the drawees and other assets arising from the components of the Fund’s portfolio is allocated to
the subordinated shares up to a limit equivalent to the sum of their total. Once this sum ¡s exceeded , default credit rights of the Fund are allocated to senior shares .
Subordinated shares do not have a profitability goal , but should benefit from any excess returns generated by the portfolio of receivables.

In the event of failure of a percentage of subordinated shares representing less than 30 % of the net assets of the Fund , the Bank , upon request of the Administrator ,
shall subscribe for new subordinated quotas within a maximum of 5 calendar days , in order to achieve a gearing ratio equivalent to the ratio warranty . If the non-
compliance is not remedied within the specified period of time, the Administrator shall call upon the General Meeting of Shareholders in order to resolves ( i ) the early
liquidation of the fund or (ii ) extraordinary amortization event.

iv) Amount and nature of receivables, liabilities , income and expenses between the company and the FIDC, assets transferred by the company and rights to
use assets from FIDC.

In the period ended June 30, 2014, the FIDC Pine Agro had assigned operations totalling R$220.098.
Investment funds – Sole shareholder

The investment funds in which Banco Pine is the sole shareholder were consolidated, since the Institution holds the majority of the risks and rewards of their operations.
b. Basis of valuation

The financial statements have been prepared under the historical cost convention, except for the financial instruments held for trading, available-for-sale financial
instruments, derivative financial instruments and financial instruments recognized and designated as hedged items in transactions which meet the qualifying criteria for
fair value hedge accounting.

e. Use of estimates and judgments

The Institution and its subsidiaries prepare the estimates based on assumptions which affect the amounts disclosed of the assets and liabilities for the following year. All
of the estimates and assumptions required in conformity with IFRS are estimates which, according to management, are adequate considering the Institution’s activities.
Estimates and judgments are reviewed continually, based on past experience and other factors, including future expectations. Actual results could differ from those
estimates.

The critical accounting estimates are as follows:

() Fair value measurement of certain financial instruments

The fair value of financial instruments with no active market, or whose prices are not available, is calculated using available valuation techniques. In these cases, fair
values are estimated using observable data in similar instruments or through templates. When observable market data is not available, they are estimated based on
assumptions deemed appropriate. When pricing techniques are used, these are validated and periodically reviewed in order to maintain their reliability.

In some situations it is necessary to include credit risk in the measurement of fair value. For this
necessarily requires management’s judgment.

The Institution determines that investments “available-for-sale” are impaired when there is a significant and prolonged decrease in the fair value of the asset below its
cost.

The determination of what is considered “significant” or “prolonged” requires judgment. To reach this judgment, the Institution evaluates among other factors, the price
volatility of the instruments. Additionally, the objective evidence of the impairment may be the deterioration in the company’s financial health, industry and sector
performance, changes in technology and in the operational and financial cash flows.

we use statistical techniques (correlation and volatility) which

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

(i) Impairment of loans and advance payments
The portfolio of loans and advance payments is tested for impairment monthly. The Institution uses judgments to verify the existence of evidence of impairment. This
evidence includes observable data indicating that there were adverse changes in the payment status of debtors classified in the same category, as well as in economic
conditions that could affect the book value of the assets. When the need to recognize an impairment loss is identified it must be recorded in the financial statements.

Management makes judgments based on the historical losses for assets with similar credit risk and objective evidence of impairment,
The methodology and assumptions used for calculating impairment are constantly reviewed.
(ii) Deferred taxes

Deferred tax assets are recognized as a result of temporary differences when it is likely that the Institution and its subsidiaries will have future taxable income against
which the deferred tax assets can be used.

The deferred tax assets and tax loss carryforwards are recognized when it is probable that there will be sufficient future taxable income to use them,

(iv) Contingent liabilities

The Institution periodically reviews its contingencies. These contingencies are evaluated based on Management’s best estimates, taking into account the opinion of its
legal counsel, when there is a probability that financial resources will be required to settle the obligations and the amount of the obligations may be reasonably
estimated.

Contingencies classified as Probable Losses are recognized in the Balance Sheet under “Provisions”.

The contingencies are measured using models and criteria which ensure that they are measured appropriately, despite uncertain deadlines and amounts, as detailed in
Notes 3.ac and 23.

d. Accrual basis

The Institution prepares its financial statements on the accrual basis of accounting.
e. Capital management

Regulatory capital management is based on an analysis of BACEN capital ratios.

. Foreign currency

Functional currency and reporting currency

Each company in the Group establishes its own functional currency in accordance with IAS 21 -“The Effects of Changes in Foreign Exchange Rates”. The items
included in the financial statements of each Group entity are measured using the currency of the primary economic environment in which the entity operates (functional
currency).

The Financial Statements are presented in reais (R$), which is the Institutior’s functional currency and that of its foreign branch.

Transactions and balances in foreign currency

Foreign currency transactions are those originally denominated or settled in a foreign currency. These transactions are translated into the functional currency using the
exchange rates effective on the transaction date or the valuation date, upon which the items are remeasured.

Exchange gains and losses related to cash and cash equivalents, loans and advances, other assets, securities issued abroad, deposits from customers, borrowings and
onlendings, correspondent banks and subordinated debt are presented in the Income Statement as income (expense) interest.

Translation from functional currency to reporting currency for overseas units
Considering that none of the units of the Group operates with a functional currency in a hyperinflationary economy, the results and financial position of Group entities
whose functional currency ¡is different from their reporting currency are translated as follows:

Assets and liabilities are translated based on the closing exchange rate on the Balance Sheet date;

Revenues and expenses are translated at the average rates for the determination period.
On consolidation, exchange differences arising from the translation of net investment in foreign entities are included in “other comprehensive income”.

In the case of a sale of all or part of an overseas unit, exchange differences are recognized in income as part of the gain (loss) on sale.
9. Interest

Interest income and expenses are recognized in the Income Statement using the effective interest rate method. The effective interest rate is the rate that exactly
discounts estimated future payments and receipts over the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the net carrying
amount of the financial asset or liability. The effective interest rate is established at the time of the initial recognition of the financial asset or liabilty, considering all the
contractual terms, but does not consider future credit losses.

The interest arising from the application of the effective rate is recorded under “Interest income and similar” in the Income Statement.

The calculation of the effective interest rate includes all fees and commissions, transaction costs, discounts and premiums which are paid or received and that are an
integral part of the effective interest rate. The transaction costs include the incremental costs which are directly attributable to the acquisition or issue of a financial asset
or liability.

Interest income and expenses presented in the Income Statement include the following:

+ Interest from financial assets and liabilities recorded at amortized cost, based on the effective interest rate;

+ Interest from available-for-sale investment assets, based on the effective interest rate;

+ The effective portion of qualified and designated hedge derivatives in a cash flow-hedge relationship, at the same time at which the hedged item is recorded in interest
income/expenses;

+ Changes in the fair value of qualified derivatives (including hedge ineffectiveness) and of the respective hedged items, when the interest rate risk is the risk protected.

Interest income and expenses from all financial assets and liabilities held for trading are deemed to be the result of the Institution’s trading operations and are presented
in an aggregate form together with all the changes in the fair value of assets and liabilities held for trading in “Income from financial assets and liabilities held for
trading”.

h. Cash and cash equivalents

Cash and cash equivalents comprise cash in local and foreign currencies, short-term financial investments and time deposits, with maturities at the original investment
date equal to or less than 90 days and which present an immaterial risk of change in fair value. These are used by the Institution to manage its short-term commitments.

i. Fees and commi

ns
Income and expenses related to fees and commissions that are an integral part of the effective interest rate of a financial asset or liability are included in the calculation
of the effective interest rate, and are recorded in “Fee and commission income”.

Other revenues and expenses in terms of fees and commissions are recognized, as and when the related services are provided, in the Income Statement in “Fee and
commission income”.

10

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

Olher expenses for fees and commissions mainly comprise amounis which are recognized in resulis as the services are received.
j. Results of financial instruments held for trading

Income from financial instruments held for trading consists of the net gains and losses related to assets and liabilities held for trading, and includes all realized and
unrealized changes in fair value, as well as interest, dividends and foreign exchange differences on these financial instruments, and are recorded in “Debt instruments”
and “Derivatives” in the Income Statement.

k. Results of other financial instruments recorded at fair value

Income from other financial instruments recorded at fair value refers to non-qualified derivatives maintained for risk management purposes and financial assets and
líabilities recorded at fair value, and includes all realized and unrealized changes in fair value, as well as interest, dividends and exchange differences on these financial
instruments.

1 Dividends

Dividend income ¡s recognized when the right to receive payment is established. Dividends are booked as a component of the Income from financial instruments held
for trading or Income from other financial instruments recorded at fair value in accordance with the classification of the equity instrument, and are recorded in “Equity
instruments”.

m. Income tax

Current income tax is the expectation of payment of taxes on the taxable income for the year, using current rates as of the balance sheet date, and any adjustment to
tax payable in relation to prior years.

Deferred income tax arises on the temporary differences between the accounting balances of assets and liabilities and the fiscal balances for tax computation purposes.
Tax credits related to tax loss carryfowards should only be recognized when there is an expectation that they will be realized with the generation of estimated taxable
profits. Tax credits are measured at the rates that are expected to be applied to the temporary differences when these are reversed, based on current laws as of the
balance sheet date.

Deferred tax assets are recognized to the extent that itis likely that future taxable profits will be generated enabling the credits to be utilized, and should be reviewed at
each balance sheet date, being decreased as and when its no longer likely that these tax benefits will be utlized.

Income tax expense includes taxes on current and deferred income, and is recognized in the Income Statement, recorded in “Income tax and social contribution” except
in those cases which refer to items that are recognized directly in equity.

n. Financial instruments (asset and liability)

¡ Definitions
“Financial instrument” is any contract that gives rise to a financial asset of the Institution and a financial liability or equity instrument of another entity.

“Equity instrument” means any contract representing a residual interest in the assets of an issuer after deducting all of its liabilities.

“Financial derivative” means the instrument whose value changes in response to the change in an observable market variable (e.g., interest rate, foreign exchange rate,
financial instrument price and market index).

Investments in subsidiaries, jointly-controlled entities and associates are not treated as financial instruments for accounting purposes.

ii. Recognition
Initially, the Institution recognizes loans and advances, deposits, securities issued and subordinated liabilities at the date on which they are originated. All other financial
assets and liabilities, including those designated at fair value through profit or loss, are initially recognized on the trade date on which the Institution becomes party to
the instrument’s contractual provisions.

Financial assets and liabilities are initially recognized at their fair value, plus (for instruments not subsequently valued at fair value through profit or loss) the transaction
costs that are directly attributable to their acquisition or issue.

Classification
Financial instruments are classified in one of the categories presented in the accounting practices 3(0), (p), (a) and (1).
iv. Derecognition
Financial assets are written off when the contractual rights over their cash flows expire, or when the rights to receive the contractual cash flows are transferred by means
of a transaction in which all the risks and rewards of ownership of the financial asset are substantially transferred. Any interest in transferred financial assets created or
retained by the Institution, is recognized as a separate asset or liability.
The Institution wrtes-off financial liabilities when their contractual obligations are extinguished, canceled or expired.
The Institution carries out transactions, whereby recognized financial assets are transferred, but all or the majority of the risks and rewards are retained by the Institution
and are not witten-off in the Balance Sheet. Transfers of assets with retention of all or the majority of the risks and rewards include, for instance, loan assignments with
co-obligation and sales of securities with repurchase agreements.
In the case of transactions where the Institution does not retain or substantially transfer all the risks and rewards of ownership of a financial asse!, the asset is written off
when the Institution ceases to exercise control over it. In the case of transfers where the Institution retains control over the asset, it continues to recognize the asset in
proportion to its involvement, which is determined by the duration for which it is exposed to the changes in the value of the transferred asset.
In certain transactions the Institution maintains the obligation to provide services in connection with the financial assets transferred. In this case the assets transferred
are written off in full provided that they meet the write-off criteria. The rights and obligations retained in transfer transactions are recognized separately as assets and
líabilities as is appropriate.
The Institution wrtes-off loans and advances to customers and credit institutions when these are overdue for more than 360 days.
v. Grouping of financial assets and liabilities

Financial assets and liabilities may be grouped and the net amount may be presented in the Balance Sheet when, and only when, the Institution has the legal right to
offset the amounts, and has the intention to settle them at their net amount or to simultaneously realize the assets and settle the liabi

vi. Regular acquisition of financial assets
Regular acquisitions of financial assets are recognized on the transaction date. Assets are reversed when the rights to receive cash flows expire or when the Institution
has substantially transferred all risks and reward of ownership.

vii. Measurement at amortized cost
The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is valued when it is initially recognized, less amortizations of the
principal, plus or minus the cumulative amortization utilizing the effective interest rate method for any differences between the initial amount recognized and the
redemption amount at maturity, subtracting any reductions for impairment or impossibility of collection.

Income from loans past due for more than 60 days, regardless of their risk level, is only recognized as revenue when effectively received. Income on loan assignments,
wáth or without coobligation, is recognized in results on the date on which the assignments are made.

1

(rs tarta ln Prtguee) 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

The “effective interest rate”is the discount rate which corresponds exactly to the initial amount of the financial instrument with respect to estimated total cash flows, of all
types, over its remaining useful life.

vil, Measurement at fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arms length transaction on the
balance sheet date.

When available, the Institution determines the fair value of financial instruments based on quoted prices in the active market for that instrument. A market is recognized
as active if the quoted prices are readily and regularly available and represent market transactions that are authentic and regular and which take place fairly on an arms
length basis.

AII derivatives are recognized in the Balance Sheet at fair value from the transaction date. When the fair value ¡s positive, derivatives are recognized as assets; when
negative, derivatives are recognized as liabilities. The changes in the fair value of derivatives from the transaction date are recognized under “Gains (losses) on
financial assets and liabilities” in the consolidated statement of income.

ix. Valuation techniques

a) Financial instruments measured at fair value

The financial instruments that are measured at fair value after the initial recognition should be grouped in Levels 1 to 3 based on the degree to which fair value is
observable.

Level 1 fair value measurements are obtained based on prices quoted (unadjusted) in active markets for identical assets and liabilities.

Level 2 fair value measurements are obtained based on variables other than the quoted prices included in Level 1, which are directly observable for an asset or a
liability (ie. prices) or indirectly observable (¡.e., based on prices).

Level 3 fair value measurements are obtained based on valuation techniques that include variables for an asset or a liability, but which are not based on observable
market data (unobservable inputs).

The table below provides a summary of the fair values of financial assets and liabilities for the periods ended June 30, 2014 and December 31, 2013, classified based
on the various measurement methods adopted by the Institution for fair value determination purposes:

ENTE

EE Ep Total EE E Total|
Financial assets held for trading 954.528 633.251 1.587.779 1.071.147 746.052 1.817.199
Avallable-for-sale financial assets 437.590 149.956 587.546 557.273 140.724 697.997
Financial labiities held for trading 143,298 106.006 248.304 58.197 132.636 190.833

Financial instruments at fair value, determined based on public price quotations in active markets (Level 1), include public debt securities, private debt securities and
shares of publicly held companies.

When observable price quotations are not available, Management, based on own internal models, makes its best market price estimate. In the majority of cases, these
models use observable market inputs as an important reference (Level 2). Various techniques are used to make these estimates, including the extrapolation of
observable market input and extrapolation techniques. The best evidence of the fair value of a financial instrument upon initial recognition is the transaction price,
unless the fair value of the instrument can be obtained based on other market transactions carried out with the same instrument or similar instruments or can be
measured by using a valuation technique in which the variables used include only observable market input, especially interest rates.

At June 30, 2014 and December 31, 2013, there were no transfers between levels 1 and 2. The Institution has no financial instruments classified as Level 3.

b) Financial instruments not measured at fair value

In accordance with IFRS 7 and CPC 40 – Financial Instruments -Disclosures, we present a comparison between the book values of financial assets and liabilities and
their corresponding fair values at the end of the period.

30/6/2014 3111212013 |

Fair value Book value Book value

Financial assets

Cash and cash equivalents 1.198.844 1.198.844 736.652 738.652
Loans and advances to financial institutions” 40.292 40.292 57.685 57.685
Loans and advances to customers ( 6.419.409 6.407.230 6475177 6.205.333
Total financial assets 7.558.545 7.646.366 7271514 7.001.570
Financial libilities

Deposits from financial institutions 79,729 19.729 89718 69718
Deposits from customers (% 3.942.285 3,980,985 3.683:150 3.785.522
Funds oblained in the open maricet(% 469,751 469.751 508.792 508.792
Securities issued abroad (% 692.001 692.049 1.017.184 1.014.860
Borrowings and onlending(% 3.326.266 3.392.382 2.954.185 2.964.320
Other financial habite. 69.272 69.272 68.499 68.499
Subordinated deba 343.875 338.892 359.298 356.370
Total financial liabilties 8.923.179 8.963.000 8.680.826 8.788.081

The methods and assumplions used to estimate fair value are defined below:

i) Fair values of cash and cash equivalents, debt instruments, equity instruments, derivative financial instruments and loans and advances to financial institutions reflect
their book values.

ii) Loans and advances to customers are measured net of the provision for impairment. The fair value of these operations represents the discounted value of the future
cash flows expected to be received. The expected cash flows are discounted at current market rates to determine their fair value.

iii) The estimated fair values of deposits from financial institutions, funds obtained in the open market, sale or transfer of financial assets and other financial liabilities
reflect their book values.

iv) The estimated fair value of deposits from customers and other borrowings with no quotation in an active market is based on discounted cash flows using interest
rates for new debts with similar maturities. The fair values of deposits with no specified maturity, which includes deposits with no interest rate, are substantially close to
their book values.

12

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

x. Purchase and sale commitments

Purchases (sales) of financial instruments based on a required resale (repurchase) agreement at a fixed price are recognized in the consolidated balance sheet as
financing granted (received), based on the nature of the debtor (creditor), under the heading “Debt instruments”.

xi. Impairment identification and measurement

On each balance sheet date, the Institution makes an assessment as to whether there ¡s objective evidence that the financial assets not recorded at fair value through
profit or loss are impaired. Financial assets are considered to be impaired when objective evidence shows that a loss has occurred after the asset’s initial recognition,
and that this loss represents an impact on the asset’s future cash flows that can be reliably estimated.

The Institution consider evidence of impairment both for specific assets as well as at the collective level. All the financial assets that are individually significant are
assessed in order to detect specific losses. Al the significant assets which the assessment fails to indicate as being specifically deteriorated are evaluated collectively
to detect any impairment that has incurred, but which has not yet been identified. Assets that are not individually significant are collectively assessed to detect
impairment by grouping together the financial assets (recorded at amortized cost) with similar risk characteristics.

Objective evidence that the financial assets (including equity instruments) show impairment may include default by the borrower, restructuring of financing, or advances,
by the Institution on terms that it would not accept in another situation, indications that the borrower or issuer will become bankrupt, the absence of an active market for
a security, or other observable data in relation to various assets, such as, adverse changes in the payment history of borrowers or issuers with the Institution, or
economic conditions that are correlated with defaults. In addition, for investments in equity instruments, a significant or prolonged loss in the fair value to below initial
cost is objective evidence of impairment.

Impairment losses on assets recorded at amortized cost are measured considering the risk classification, especially, for all customers with a given risk rating which is
lower than or equal to “D”, under the terms of Resolution 2682 of the National Monetary Council (CMN), as well as the default in payments past due for more than 90
days. The losses are recognized in results in the “Losses on impairment of financial assets” account. Interest from assets continues to be recognized as long as there is
an expectation that it will be received. When a subsequent event causes a decrease in the value of a previously recognized impairment loss, it is reversed against the
result for the period.

Losses for impairment on available for sale financial assets are recognized, transferring the difference between the amortized acquisition cost and the current fair value,
from equity to the result for the period. When a subsequent event reduces the value of a previously recognized impairment loss in available-for-sale financial assets, it
is reversed against the result for the period. However, any subsequent recoveries in the fair value available for sale financial instrument, which was previously adjusted
for a loss due to impairment, are recognized directly in equity. Changes in the provisions for impairment attributable to the time value are reflected as a component of
interest income.

o. Financial assets and liabilities held for trading

Assets and liabilties held for trading are initially recognized and measured at fair value, with the transaction costs recorded directly in results for the period. All changes
in fair value are recognized as a portion of the net revenue from trading in the Income Statement for the period. Assets and liabilities held for trading are not reclassified
after their initial recognition.

Derivatives, except for those designated as hedging instruments (hedge accounting), are classified into this sub-category.

p. Available for sale

Available-for-sale financial assets are non-derivatives which are classified in this category when they are initially recognized or which are not classified in other financial
asset categories.

Interest income is recognized in results using the effective interest rate method. Dividend revenue is recognized in results when the Institution acquires the right to
receive the dividends. Positive or negative foreign exchange rate variations on investments in financial assets classified as available for sale are recognized in results.

Other changes in the fair value are recognized directly in equity until the investment is sold or a loss on account of impairment is confirmed, at which time the balance of
the reserve in equity is transferred to results.

a. Held to maturity

Held-to-maturity financial assets are assets with fixed or determinable payments and fixed maturity that the Institution has the intention and the ability to hold to maturity.

Financial assets held to maturity are recorded at amortized cost using the effective interest rate method. Any sale or reclassification of a significant amount of
investments held to maturity which are not close to their maturity will result in the reclassification of all “held-to-maturity” financial assets to “available-for-sale”, and will
prevent the Institution from classifying the financial assets as “held-to-maturity” in the current fiscal year as well as for the following two years.

At June 30, 2014 and December 31, 2013, there were no operations classified as held to maturity.

r. Loans and receivables

Loan operations and advances are non-derivative financial assets with fixed or determinable payments, which are not quoted in an active market, and which the
Institution has no intention of selling either immediately or in the short term.

Loan operations and advances are initially measured at fair value plus the transaction costs that are directly attributable to the operation, and are subsequently valued
at amortized cost using the effective interest rate method.

s. Derivatives held for risk management

Derivatives held for risk management include all asset and liability derivatives that are classified as held for trading. These derivatives are measured at fair value.

All hedge ineffectiveness is recognized in results; recorded in “Other operating income (expenses).

Cash flow hedge

When a derivative is designated as a hedge of changes in cash flows attributable to a specific risk , associated with a recognized asset or liability that may affect the
Income Statement, the effective proportion of changes in fair value of the derivative is recognized immediately in equity. The amount recognized in equity is subtracted
and transferred to results in the same period as the hedged item. Any ineffective portion of changes in fair value of the derivative is recognized immediately in results.

If the derivative matures or is sold, canceled or realized and no longer complies with the criteria of cash flow hedge accounting, or its designation is revoked, it will
cease to be recorded as a fair value hedge and the amount recognized in equity remains recorded until such time as the anticipated transaction has an impact on the
result. If itis no longer probable that the anticipated transaction will occur, the cash flow hedge ceases to be recorded and the balance recorded in equity is subtracted
and transferred immediately to the result for the period.

t. Non-current assets held for sale

Non-current assets held for sale include the carrying amount of properties or other non-current assets received by the consolidated entities for purposes of full or partial
settlement of the payment obligations of their debtors through auctions which generally take place within one year. Non-current assets held for sale are generally
measured at the lower of the fair value less the cost of sale and the carrying amount on the date they were classified under this category. Non-current assets held for
sale are not depreciated, provided that they remain classified in this category.

1

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

u. Tangible assets

Fixed asset items correspond to those assets and rights related to physical assets used for the maintenance of activities or exercised for this purpose, including those
resulting from operations that transfer the risks, rewards and control of the entity’s assets.

i. Recognition and measurement

Tangible assets are valued at cost, less cumulative depreciation and losses on account of impairment.

The cost includes the expenses directly attributable to the asset’s acquisition. The costs of tangible assets constructed by the company include the cost of materials and
direct labor, any other directly attributable costs necessary to ensure that the asset is operational for its intended function, the removal costs of the items and the
recovery of the place where the assets are located. Software acquired that is integrated into the operation of a tangible asset is recorded as an integral part of that
tangible asset.

When the main components of a tangible asset have different useful lives, they are recorded as items that are separate from the tangible asset.

Depreciation
Depreciation is recognized under the straight-line method based on the estimated useful life of each portion of a tangible asset.
The estimated useful lives of tangible assets for current and prior years are as follows:

Vehicles 5 years
Software systems 5 years
Aircraft 10 years
Other items 10 years

v. Intangible assets

Intangible assets correspond to the rights acquired to non-physical assets which are used for maintaining the Institution’s business or exercised for this purpose. The
intangible assets with identifiable useful lives are generally amortized on the straight-line method over the estimated period of economic benefit

i. Use of software licenses

According to IFRS (IAS 38), expenses for software acquired and developed are classified in three distinct stages: 1. Project’s Preliminary Stage (expense); 2. Project’s
Implementation Stage (capitalization) 3. Projects Post-Implementation Stage (expense).

Software acquired by the Institution is recorded at cost, less cumulative amortization and losses on account of impairment.

The expense for developing in-house software is recognized as an asset when the Institution is able to demonstrate its intention and its ability to complete development,
measuring its cost and software utilization in a way that gives rise to future economic benefits. The capitalized costs of software developed in-house include all costs
that are directly attributable to development and are amortized over the software’s estimated useful life. Software developed in-house is recorded at its capitalized cost,
with deductions made for cumulative amortization and for losses on account of impairment.

Subsequent software expenses are only capitalized when they increase the future economic benefits of the specific asset to which they relate. All other expenses are
recorded directly in the result as and when they are incurred.

ii. Amortization
Amortization is recognized in the result using the straightline method over the software’s estimated useful life, beginning on the date at which it becomes available for
The estimated useful lives of tangible assets for current and prior years are as follows:

Software 5 years

ill. Other intangible assets
Other intangible assets with a useful life that are acquired by the Institution recorded at cost, with deductions made for cumulative amortization and for losses on
account of impairment.

Amortizations are recognized in results using the straight-line method over the estimated useful life of the assets.
x. Other assets

This includes the balance of all advances and any other assets which are not considered financial assets.

y. Investment property

In accordance to CPC 28 (IAS 40), the values recorded in investment property (land or building – or part of a building – or both) held to earn rentals or for capital
appreciation or for both.

To determine the value of the investment the entity may adopt the fair value method or the cost method. The Bank uses for all ¡ts investment property to fair value
method.

Other liabilities include the balance of all expenses recorded as a provision and deferred revenue from advances as well as the amount of any other obligations not
regarded as financial liabilities.

aa. Impairment de ativos náo-financeiros

According to IFRS (IAS 36), the impairment of non-financial assets is based on the recoverable amount of an asset or of a cash generating unit which is the greater of
the net sales value of an asset and its value in use. In general terms, impairment for IFRS purposes is tested based on the “recoverable amount”, which is the greater of
the fair value less the selling cost or the value in use which comprises the cash flow that is expected from the continued use of the asset, discounted to present value

ab. Deposits, securities issued, subordinated debt and funds obtained in the open market

Deposits, securities issued and subordinated debt are the sources used by the Institution to fund its operations.

Deposits, securities issued, subordinated debt and borrowings and onlendings are initially measured at fair value plus the incremental transaction costs that are directly
attributable to their issue, and are subsequently valued at their amortized cost utilizing the effective interest rate method, except in those cases where the Institution
designated the liabilities at fair value through profit or loss.

When the Institution sells a financial asset and simultaneously signs a repurchase agreement in relation to the asset (or a similar asset) at a fixed price or at a future
date (“sale with repurchase agreement” or “share loan”), the contract is recorded as a deposit received under a repurchase agreement and the underlying asset
continues to be recognized in the Institution’s financial statements.

ac. Provisions

A provision is recorded if, as a result of a past event, the Institution has a present obligation, which can be reliably estimated, and when it is likely that an outflow of
economic benefits will be required to settle the obligation.

14

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

ad. Contingent assets and liabilities and legal obligations

Contingent assets and liabilities and legal obligations (tax and social security) are recognized, measured and disclosed in accordance with IAS 37, as follows:
Contingent assets: are not recorded in the financial statements, except when there is evidence which assures a high degree of confidence that they will be
realized, generally through a final and unappealable court decision.

Provisions: the probability of any unfavorable judgments or results in relation to these lawsuits is determined, as well as the likely interval until the loss becomes
definite and when an outflow of resources to settle this loss is probable. The calculation of the provision needed for these contingencies is made after analyzing each
lawsuit and based on the opinions of the Institutior’s legal advisors. Contingency provisions are recorded for those lawsuits where it is considered that the possibility of
loss is probable. The provisions required for these lawsuits are subject to changes in the future depending on the progress of each case;

Provisions: the probability of any unfavorable judgments or results in relation to these lawsuits is determined, as well as the likely interval until the loss becomes
definite and when an outflow of resources to settle this loss is probable. The calculation of the provision needed for these contingencies is made after analyzing each
lawsuit and based on the opinions of the Institutior’s legal advisors. Contingency provisions are recorded for those lawsuits where it is considered that the possibility of

Legal obligations (tax and social security): these are administrative proceedings or lawsuits related to tax and social security obligations, the legality or
constitutionality of which is being contested, whose amounts, regardless of the related probability of success, are recorded at the full amount in dispute and adjusted in
accordance with the legislation in force.

ae. Finan

guarantees
Financial guarantees are defined as contracts by means of which an entity undertakes to make specific payments on behalf of a third party when said third-party fails to
do so, regardless of the various legal forms that these may take, such as guarantees, irrevocable documentary credits issued or confirmed by the entity, etc.

The Institution recognizes the present value of fees, commissions and interest receivable from the financial guarantees provided under “Other financial liabilities”.

Financial guarantees, regardless of the guarantor, the instrument or other circumstances, are periodically reviewed in order to determine the credit risk to which they are
exposed and, depending upon the case, in order to consider whether or not itis necessary to record a provision. The credit risk is determined by applying similar criteria
to those established for quantifying losses as a result of the non-recovery of loans and advances valued at amortized cost

The provisions recorded for these operations are recognized under the item “Provisions – Reserves for contingent liabilities, commitments and other provisions” in the
Consolidated Balance Sheet. No provision were recorded for these operations at June 30, 2014 and December 31, 2013.

af.

istribution of dividends and interest on own capital

The distribution of dividends and interest on own capital to the Institution’s stockholders is recorded as a liability in the period-end financial statements, in accordance
with the bylaws. Any amount above the required minimum distribution is only accrued on the date at which the dividend distribution is approved by the stockholders.

The tax benefit for interest on own capital is recognized in the Statement of Income.
ag. Capital stock and reserves

Incremental costs directly attributable to the issue of capital instruments are deducted from the initial valuation of the respective capital instruments issued.

ah. Treasury shares

Repurchased preferred and common shares are recorded in Equity as Treasury shares at the average purchase price.

The shares that are sold subsequently, for example, those sold to the beneficiaries of the Stock Options Plan, are recorded as a reduction of treasury stock, measured
at the average price of the shares held in treasury at that date.

The difference between the sale price and average price of treasury shares is recorded in a specific account in equity. The cancellation of shares held in treasury is
recorded as a reduction in treasury shares against the Reserves account in equity, at the average price of the treasury shares on the cancellation date.

ai. Earnings per share

The Institution presents information in terms of basic and diluted earnings per share for its common and preferred shares, separated by class. Basic eamings per share
are calculated by dividing the profit or loss attributable to the shareholders of the Institution’s common and preferred shares by the weighted average number of
common and preferred shares in free float during the period. Diluted eamings per common and preferred share are determined by adjusting the profit or loss attributable
to the holders of the common and preferred shares and the weighted average number of common and preferred shares in free float for the effects of all common and
preferred shares with potential dilution.

At June 30, 2014, the Institution has no instruments with potential for dilution.
aj. Consolidated statement of cash flows

The terms used in the Consolidated Statement of Cash Flows have the following meanings:
Cash flows: inflows and outflows of cash and cash equivalents.
Operating activities: the main revenue-generating activities of financial institutions and other activities, other than financing or investing activities.

Investing activities: acquisition and sale of long-term receivables and tangible assets.
Financing activities: activities resulting in changes in the amount and composition of equity and liabilities not related to operating activities.

4. OPERATING SEGMENTS

Pursuant to IFRS 8, an operating segment is a component of an entity:

– that engages in activities which will generate revenues and incur expenses (including revenues and expenses related to transactions with other components of the
same entity).

. whose operating income (loss) is regularly reviewed by the person in charge in the entity for making the operating decisions related to the allocation of funds to the
segment and the evaluation of its performance.

about which optional financial information is made available.
The Institution operates in Brazil and abroad through the Cayman branch and Pine Securities, with Brazilian customers and, therefore, is not geographically segmented.

The Institution has not identified reportable segments.

15

(rs tarta ln Prtguee) 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

5. CASH AND CASH EQUIVALENTS

30/6/2014 31/12/2013]

Cash 93.405 157.170
Loans and advances to financial institutions ‘” 1.105.439 581.482
Total cash and cash equivalents 1.198.844 738.652

“These are transactions with maturiies at he original date of investment equal to or less than 90 days.

6. LOANS AND ADVANCES TO FINANCIAL INSTITUTIONS

Loans and advances to financial institutions, at June 30, 2014 and December 31, 2013, are comprised as follows:

30/6/2014 31/12/2013

Classification:
Loans and receivables 40.292 57.685
Total 40.292 57.685
Type:

Interbank deposts 40.292 57.685
Total 40.292 57.685

7. DEBT AND EQUITY INSTRUMENTS

Debt and Equity instruments at June 30, 2014 and December 31, 2013, were comprised as follows:

30/06/2014
Atinterest a AL interest
adjustment rate curve
Classification:
Financial assets held for trading 1.036.167 1.206.986 (170.819) 1.301.841 1.303.958 (2417)
Avallable-for-sale financial assels. 587.546 424.058 163.488 697.997 718.315 (20.318)
Total 1.623.713 1.631.044 (7331) 1.999.838 2.022.273 (22.435)

ATAN

EEES TS
ES EOL E

Avallable-for-sale financial assets

Own portfolio:
National Treasury Bil (LTN) – – – – – – –
Federal Treasury Notes (NTN) 22970 – – – – 22970 23:91
Debentures – 40.483 36.277 33.503 – 110.273 38.192
Promissory Note 39.683 – – – – 39.683 39.586
Subtotal 62.653 40.483 36.277 33.503 – 172.926 100.969
Subject to guarantee:
NIN 51.851 49.880 152.280 50.693 – 304.704 323.089
Subtotal 51851 49.880 152.280 50.693 – 304.704 323.089
Subject to repurchase:
Debentures – 5.264 16.279 88.373 – 109.916 .
Subtotal – 5.264 16.279 88.373 – 109.916 .
Total Available-for-sale financial assets 114,504 95.637 204.836 172.569 – 587.546 424.058
– 13.001 – 134.016 72.765 219.782 219.782

National Treasury Bil (LTN) – 27.138 45m – – 31.709 31.659
Federal Treasury Notes (NTN) – 10.998 41.084 52.695 20219 124.996 131.143
Debentures 3.700 – 172715 15.469 – 191.884 161.551
Investment fund shares. 4270 – – . . 4.270 102.222
Eurobonds – – – –
Subtotal 7.970 51437 218.370 202.180 92.984 572.641 636.357
Subject to repurchase

commitments:
National Treasury Bil (LTN) – 190.339 70.325 – – 260.664 260.055
Federal Treasury Notes (NTN) 82303 – – – – 82.303 82831
Debentures 1425 – 19.643, 16.279 – 37.347 143.885
Eurobonds 10.140 – – – – 10.140 10.020,
co8 – – –
Subtotal 93.868 190.339 89.968 16.279 – 390.454 496.791
Subject to
guarantees:
National Treasury Bil (LTN) – 14,294 15.123 – – 29.417 29.343
Federal Treasury Notes (NTN) – 21.448 22207 – – 43.655 44.495
Subtotal – 35.742 37.330 – – 73.072 73.838
Total financial assets held

for trading 101.838 277.218 345.668 218.459 92.984 1.036.167 1.206.986
Total 216.342 372.855 550.504 391.028 92.984 1.623.713 1.531.044

16

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in thousands o resis RS, except net income por share)
ETE

PATA

O OS
AS En

Avallable-for-sale financial assets

Own portfolio:

National Treasury Bil (LTN) 89.966 – – – – 89.966 89.981
Federal Treasury Notes (NTN) – 73077 85.138 46.089 – 206.304 216.974
Debentures – 703 ma 31.397 63.225 96.038 968.062
Promissory Note – 44.686 – – – 44.686 44.459
Subtotal 89.906 118.466 85.851 79.486 63.225 436.994 449,476

Subject to guarantees:

Federal Treasury Notes (NTN) – – 109.579 – – 109.579 117.415
Subtotal . . 109.579 . – 109.579 117.415
Subject to repurchase commitments:

Debentures. – – 44.699 106.725 – 151.424 161.424
Subtotal . 44.699 106.725 – 151.424 151.424
Total available-for-sale financial 118.466 240.129 186.211 63.225 697.997. 718.315
Financial Treasury Notes (LFT) – – 30.070 8715 147.562 186.337 186.337
National Treasury Bills (LTN) 349.869 30.940 4.930 – – 385.739 385.916
Federal Treasury Notes (NTN) 8,125 46 33.107 37.788 8.305 87.971 89.758
Debentures. . 8720 130.426 87.154 – 226.300 221.105
Investment fund shares 1.567 – – – – 1.587. 1.567
Subtotal 359.561. 39.706 199.133 133.657 155.857 887.914 884.683
Subject to repurchase commitments:

National Treasury Bills (LTN) – 161.579 40.217 – – 201.796 202.421
Federal Treasury Notes (NTN) – 80.339 18.969 48.089 10.983 158.380 163.429
Debentures. – 1481 10.301 11.199 – 22.981 22.584
Eurobonds 223 198 2.686 – 22.878 25.985 25.985
co8 235 235 235
Subtotal 458 243.597 72173 59.288 33.861. 409.377 414.554
Subject to guarantees:

National Treasury Bills (LTN) – 1.074 – – – 1.074 1.079
Federal Treasury Notes (NTN) – – 3,476 – – 3.476 3.542
Subtotal . 1074 3476 . – 4.550 4.621
Total financial assets held!

for trading 360.019 284.377 274.182 192.945 189.718 1.301.841 1.303.958
Total 449.985 402.843 514.911 379.156 252.943 1.999.838 2.022.273

8. DERIVATIVES HELD FOR TRADING (ASSETS AND LIABILITIES)
a) Utilization policy

The growing level of company sophistication in a global market prompted an increase in the demand for derivative financial instruments to manage balance sheet
exposure to market risks, arising mainly from fluctuating interest and foreign exchange rates, the price of commodities and other asset prices. As a result, Banco Pine
offers its customers altematives for mitigating market risks through appropriate instruments, as well as to meet its own needs for managing these risks.

b) Management

The management of portfolio risks is controlled using techniques which include the following: VaR, sensitivity, liquidity risk and stress scenarios. Based on this
information, the necessary derivative financial instruments are contracted by the treasury department, pursuant to Management’s previously defined market and liquidity
risk policy. Derivative transactions carried out by Banco Pine with customers are neutralized to eliminate market risks.

The sale of derivative financial instruments to customers is subject to prior credit limit approval. The credit limit approval process also considers potential stress
scenarios.

Knowing the customer, their operating sector and their risk appetite profile, as well as being able to provide information on the risks involved in the transaction and in the
terms and conditions negotiated, ensures that the relationship between the parties is transparent and permits the Institution to offer customers the products which are
most appropriate to their specific needs.

The majority of the derivative contracts negotiated by the Institution with customers in Brazil comprise swaps, forward transactions, options and futures registered at
BM8FBovespa or CETIP S.A. – Balcáo Organizado de Ativos e Derivativos. The derivative contracts traded abroad comprise futures, forward transactions, options and
swaps mainly registered at the Chicago, New York and London exchanges. We stress that certain trades abroad are carried out over-the-counter (OTC), however, the
related risks are considered low in relation to the Institution’s total transactions.

The main market risk factors monitored by Banco Pine include exchange rates, local interest rate volatility (fixed, reference rate (TR), General Price Index – Market (IGP-

M) long-term interest rate (TJLP) and Extended Consumer Price Index (IPCA)), exchange coupon and commodities. The Institution adopts a conservative approach,
minimizing its exposure to risk factors and to the mismatching of portfolio terms.

c) Evaluation and measurement criteria, methods and assumptions used to determine fair value

The Institution uses the market reference rates disclosed principally by BM8FBovespa, Intercontinental Exchange (ICE) and Bloomberg to determine the fair value of
the derivative financial instruments. For derivatives whose prices are not directly disclosed by the exchanges, the fair values are obtained through pricing models that
use market information, determined based on the prices disclosed for assets with the greatest liquidity. Based on these prices, the Institution extracts the interest
curves and market volatilities which are used as entry data for the models. The OTC derivatives, forward contracts and securities with low liquidity are determined in this
way.

17

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

FR) PINE

d) Position of derivative financial instruments held for trading and hedging:

EA

ASSETS
Swap = difference receivable 169.882 136.846 200.728 82.034

Forward contracts- recelvable 288.956 13,644 302.600 72.953

Premiums on unexercised options 45.479 2.571 48,050 72389

*Transfered risk – 234 234

Total receivable 398.317 153.295 551.612 227.376

LIABILIMIES

Swap – difference payable (14.007) (62.135) (66.142) (62.138)
Forward contracts – payable (130.842) (6.626) (146.468) (68.043)
Premiums on written options (34.763) (931) (65.694) (60.172)
Total payable (188.612) (59.692) (248.304) (160.353)
Net amount 209.705 93.603 303.308 67.023

e) Notional values and fair values of derivatives held for trading and hedging:

CS

Swap”
Market risk

Asset position: 5.948.957 200.728
Interest 4.642.767 138,004
Currency 1.297.867 62.724
Variable income 8.323 –
Liability position: 5.948.957 –
Interest 2.346.257 –
Currency 3.602.700 –
Net amount 200.728

Cash flow hedges.

259.675 .
259.675 –
Liability position: 259.675 –
Interest 259.675 –
Net amount –
Forward contracts
“Asset position: 8.993.918 302.600
Interest 5.962.315 261.080
Currency 2.651.924 25.558
Commodities 379.679 16.962
Liability position: 8.993.918 –
Interest 2.387.733 –
Currency 6.513.380 –
Commodities 122.805 –
Net amount 302.600
Options
Premium on unexercised options: 1.826.686 48.050
Foreign currency risk 1.408.231 24.952
Commodities 418.455 23.098
Premiums on written options: 1.261.281 –
Foreign currency risk 820.872 –
Commodities 440.409 –
Net amount 48.050
Credit Derivatives
“Asset position: 11012 234
Currency 11.012 234
Liability position: 11012 –
Currency 11.012 –
Net amount 234
Total receivable (payable) and gain (loss) from derivatives 551.612

A AS

“Swap
Market risk
Asset position: 5.581.191 352.163
Interest 3.408.528 179.387
Currency 2.130.411 172.770
Variable income 42.252 56
Liability position: 5.581.191 –
Interest 3.533.561 –
Currency 2.047.630 –
Net amount 352.163
Forward contracts
“Asset posit 86.595.674 90.806
Interest 4.161.379 9.789
Currency 2.341.952 80.384.
Commodities 92.343 633
Liability position: 16.595.674 –
Interest 1.930.135 –
Currency 4.623.121 –
Commodities 42.418 –
Net amount 90.806
Options
Premium on unexercised options: 1.408.454 72.389
Currency 766.684 23.108
Commodities 641.770 49.281
Premiums on written options: 1.623.553 –
Currency 980.528 –
Commodities 643.025 –
Net amount 72.389
515.358

Total receivable (payable) and gain (loss) from derivatives

270.129
17.853

287.982

(25.464)
(4.219)
(197)
(50.480)

257.502

Amount payable

(18.090)
(18.898)
(12.998)

(145.458)
(120.910)
(24.620)
(938)
(145.468)

(5.504)
(13.379)
(22.315)
(65.594)

AS

(67.602)
(28.160)
(29.442)
(67.502)

(60.968)
(32.363)
(28.606)
(60.969)

(190.833)

352.163
90.806
72.369

515.358

(67.602)
(12.262)
(60.969)
(190.833)

324.525

Result

(86.000)

(6.362)

290.562

43.920

293.120

CA

230.856

(59.919)

48.163

239.100

18

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES

NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

1) Derivative financial instruments – futures contracts

Interbank market
Currency

Commodities

Future exchange coupon:
Exchange rate swap
Total

Interbank market
Currency

Commodities

Future exchange coupon:
Exchange rat swap
Total

9) Derivative financial instruments by maturity

Swaps
Forward contracts
Options

Futures
Derivative

Swaps
Forward contracts
Options

Futures

Total

h) Derivative financial instruments by trading market

EE

Up to 3 months. months
1.813.592 755.198

7.062.900 1.668.674

1.711.148 1.299.440

9.970.476 3.540.449

. 11.012

EE
MAS

1.458.593 2.014.047
4.306.823 1.998.371
1.888.484 1.136.623
6.672.138 9.180.127

14.326.038 14.329.168

AA

Purchas
2.046.626
3.033.201
167.313
532.682

5.779.822

Notional value

LENA

O

2.293.202
261.581
70,525
1.193.275

LEEN

OO

909-187
289.443
6.900
972.227
2.171.157

2.238.007
27.243
373.066
3.211.829
2.369.926
9.220.071

10.196.635

A

402.264
1.037

204.473
607.774

Daly

PON
receivable
(Payable)

14.473 (282.141)

PON
OS
(Payable)
ES
14.091
(22419)
9.418
1.375 (42.887)

TS

1116123 8.208.532
– 8.993.918

– 3.087.967
146.310 14.999.893
– 11.012

OS

797.100 5.581.191
– 6.595.574
. 3.032.007
186.112 17.215.077
983,212 32.423.949

At June 30, 2014 and December 31, 2013, the swaps, forward contracts and options, whose notional amount are recorded in a memorandum account are comprised as

follows:

Exchange
BMEFBOVESPA
Exchanges abroad
OTC

Financial institutions

Companies
Total

Exchange
BMEFBOVESPA
Exchanges abroad
OTC

Financial institutions

Companies
Total

i) Cash Flow Hedges

“Swaps’

5.135.715
6.208.632

Forwards
252.084

252.084
8741834
137.321
8.604.513
8.993.918

173.603
110.300
63.303
5.407.588
1.609.369
3.798.219
5.581.191

2.245.172
1.598.278
647.494
842.195
842.195
3.087.967

206.513
206.613
86.389.061
230.105
6.158.956
86.595.674

TS

14.999.893 –
14.463.128 .
536,765 .

– 1.012

– 11.012
14.999.893 11.012
3111212013]

Fut

1.929.544 17.187.
1.405.588 16.954.565
523.957. 232.773
1.102.463 27.739
– 27.739
1.102.463 .
3.032.007 17.215.077

On March 28, 2014 USD 115 million was acquired segregated into two parcels, through the Inter American Development Bank- IDB, converted at the exchange rate of
R$ 2.26/USD on that date, resulting in the loan amount of R$ 260 million. This loan has a grace period for the principal, having its settiement on February 15 and
August 15, 2019, respectively. The bank opted to protect its exposure to the risks arising from this transaction through a cash flow hedge.

The effectiveness of the hedge portfolio is in accordance with IAS 39 and the structure of hedge accounting has been established:

Hedge Accounting.
Total

NA

259.575
259.675

CTA
MTM adjustment

(5.362) 255.317
(5.362) 255.317

19

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FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

9. LOANS AND ADVANCES TO CUSTOMERS, GUARANTEES PROVIDED AND SECURITIES WITH CREDIT RISK:

a) Composition

30/6/2014 31/12/2013]

Loans and recelvables 6.407.230 6.205.333
Loans and recelvables at amortized cost 6.529.980 6.241.987
Provision for impairment (122.750) (136.654)
Loans and advances to customers, net 6.407.230 6.205.333

Securities with credit risk

Securiies wi crei risk het for trading 289.371 215266
Avallable-or-sale securtis with credí risk 250.872 292.148
Securities wi credit risk at amorized cost 30.238 30.240
Provision for impairment – –
Securities with credit risk, net 529.481 597.554,
Guarantees provided and responsibilties 2.945.301 2.960.409
“Total expanded portfolio, net of impairment 9.882.012 9.763.396
Total expanded portfolio 10.004.762 9.900.050
b) Types of loan

30/5IZ014 EZTN
Working capil 327.855 3229935
Resolution 3.844 (Ol Resolution n* 2.770) 37.736 40.142
Overcraft account 10.245 9.930
BNDES/FINAME ontending 1.054.117 1.068.369
Consigned Credit 5312 9.926
Foreign currency fnancing 561.346 393.554
Export financing 825.189 944241
Debtors for purchase of assets 200.555 132.713
Notes and credis recevable 60.286 114243
Advances on foreign exchange contrac and income receivabl 50.905 397.994
Surlies and trades 399 –
Total 6.529.980 6.341.987
Loans forimporis 4.23 51212
Guarantees provided 2.941.178 2.909.197
Guarantees provided and responsibiiti 2.945.301 2.360.409
Notes and credis recevable 20.238 30.240
Private debt instruments % 499.243 567.414
Securities with credit risk 529.481 597.554
Total expanded portfolio 10.004.762 9.500.050

(“Recorded in “Other assels” (Note 12).
Most debentues, promissory notes and receivables certicates in the Insutico’ debl instrument porto (Note 7

c) By business activity:

30/6/2014 31/12/2013

Civil construction. 1.323.919 1.357.699
Sugar and ethanol 1.216.546 1.395.441
Electric and renewable energy 1.169.235 891.931
Agriculture. 1.037.206 884.798
Bullding and engineering – Infrastructure. 788.272 853.056
“Transportation and logistios 506.314 484.293
Vehicles and parts 435.214 485.935
Specialized services 401.561 457.250
Metal products. 374.587 437.040
Telecommunications 348,651 358.236
Chemical and petrochemical 334.200 298.612
Foreign trade 313.093 273.740
Retail trade 301.796 236.893
Beverages and tobacco 242.486 208.102
Meat processing 191.069 192.990
Foodstutf 189.307 191.164
Construction material and decor 180.097 164.348
Steel products 117.297 128.015
Financial institution 76.841 107.629
Paper and pulp. 70.437 95.142
Leisure and tourism. 54.311 93.445
Information technology 45.739 47.185
Plastic and rubber 45.667 44.177
Mechanics 44.568 41576
Water and sanitation 38.734 40.455
Texiles and clohing 32214 39.407
Wholesale trade 28.238 26.332
Medical services. 28.056 18.086
Leather and footwear. 17.761 17.986
Pharmaceuticals and cosmetics 16.303 15331
Electroelectronios 15.896 10.565
Individuals 8.756 3,191
Communications and printing 6.273 .
Mining 4.148 –
Total expanded portfolio 10.004.762 9.900.050

20

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FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

018 eco
zo cono ao
ass ut PA

e) Non-recoverable assets – Impairment

30/6/2014 31/12/2013]

Loans and advances to customers
Operations with evidence of impairment – il

Gross balance 378.981 358.677
Provision for impairment (91.875) (106.141)
Carrying amount 287.306 252.536

Operations with impairment analysis – Other

Gross balance 6.146.851 5.975.648
Provision for impairment (60.488) (29.519)
Carrying amount 6.116.363 5.946.029

Operations with collective impairment analysis – Retail

Gross balance 4.148 7.662
Provision for impairment (587) (604)
Carrying amount 3.561 6.768

Securities with credit risk
Operations with evidence of impairment – individually significant

Gross balance 529.481 597.654
Provision for impairment – .

Carrying amount 529.481 597.554
Total net of impairment 6.936.711 6.802.987
Total (gros) 7.059.461 6.939.641

Interest accrued and unpaid from transactions evidencing impairment were reversed from the portfolio in the amount of R$7,986 (December 31, 2013 – R$7,373).

1) The details of the variations in the of financial assets ified as “Loans and – Loans and to and considered as

non-recoverable due to credit risk are as follows:

3111212013]
Opening balance. 136.554 115.288
Addiions/reversals, net 46.427 40.165

Assets written-ofí (52.746) (28.777)

Allowance – FIDC: (7.284) –

Exchange variation (601) 241
Closing balance 122.750 126.917

9) Credit Recovery

For the period ended June 30, 2014, credits previously written off as a loss were recovered in an amount of R$2,837 at the second quarter and R$4,848 at the semester
(at June 30, 2013, R$3,461 in the quarter and R$6,540 in the semester)

h) Renegotiation of contracts

At June 30, 2014, renegotiated contracts totalled R$151,511 (December 31, 2013 – R$163,543). The original ratings attributed to these contracts were maintained.

1) Loan assignments
In the period ended June 30, 2014, no loans were assigned without coobligation (June 30, 2013 – R$7,957). At June 30, 2013 these assignments generated a loss in
relation to their face value of R$6,805, without discounting the allowance for loan losses in the amount of R$6,758. The results of the assignments are recorded in the

“Other operating income/expenses” account. Additionally, contracts previously written off as a loss of R$26,242 were assigned. For the period ended June 30, 2013,
these assignments generated a gain of R$2,910 recorded in “Loan Operations”.

For the period ended June 30, 2014 were assigned operations for Pine Agro FIDC in the amount of R$220,198 (December 31, 2013 – R$181,081), in accordance with
note 3.c (iv).

10. NON-CURRENT ASSETS HELD FOR SALE

e a
ma Meer
11. DEPOSITS IN GUARANTEE

At June 30, 2014, these comprise judicial deposits related to tax matters, mainly PIS and COFINS in the amount of R$214,576 (December 31, 2013 – R$207,809).

21

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FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

12. OTHER ASSETS

30/6/2014 31/12/2013]

Reserves at the Brazllan Central Bank: E 621
Advances 9716 7.458
Notes and credits recelvable 30.237 30.240
Commission on sureties and guarantees 61.090 56.762
“Transactions in progress ‘% 80.772 138,031
Other recelvables 17.925 16.451
Total 200.341 249.563

“Ar December 31, 2013, refers lo the setlement of the purchase and sale of foreign exchange contracts.

13. INVESTMENT PROPERTY
a) Description of investment property

FIP RIO Corporate owns shares of IRE VII Real Estate Development SA, whose main asset ¡s the real estate development of Corporate Riachuelo 130, located at Rua
Riachuelo, 130, Lapa, Rio de Janeiro – RJ. Itis a commercial tower with approximately 11,700 m2 of area.

At June 30, 2014, Banco Pine has an amount of R$97,306 (R$76,509 on December 31, 2013) corresponding to the investment in a property for real estate
development, recorded in IRE VIl Desenvolvimento Imobiliário S/A.

b) the methods and significant assumptions applied in determining the fair value of investment property

To determine the value of the investment we use the method of discounted cash flow (DCF), which is to bring the present value of the estimated future cash flows,
applying it to a discount rate that is appropriate to the project.

The economic value of the project was evaluated through the hiring of independent, specialized values and approved by the FIP RIO Corporate Administrator, pursuant
to CVM. 438, of July 12, 2006.

14. PROPERTY AND EQUIPMENT IN USE

We present below the details, by category, of the property and equipment in use reported in the consolidated balance sheets:

Accumulated

depreciation DAS
Facilties 10575 110.235) 339
Furniture and equipment in use 3.196 (1841) 1.355
Communications system 1452 (903) 549
Data processing systems 1:61 (1.017) 144
Security systems 32 en 1
Alrcraft 16.293 (698) 15.595
“Transportation systems 2.731 (789) 1.942
At June 30, 2014 35.440 (25.505) 19.935

Accumulated

depreciation

Facilties 10.398 110-177) 210
Furniture and equipment in use 3210 (1701) 1.509
Communications system 1439 (648) 591
Data processing systems 1476 (971) 205
Security systems 32 en 1
Alrcraft 24.083, (6211) 20.872
Transportation systems 2.875 (663) 2012
At December 31, 2013 43.211 (17.592) 25.619

The changes in “Property and equipment in use” in the Consolidated Balance Sheets were as follows:

30/6/2014 31/12/2013

Cost:
Opening balance 43211 42.299
Additions 16.728 1.636
Amount written off (24.499) (724)
Closing balance 35.440 43.211
Accumulated depreciation

Opening balance. (17.592) (13.331)
Amount written off 3.964 (808)
Depreciation. (1.877) (6.458)
Closing balance (15.505) (17.592)
Property and equipment in use, net 19.935 25.619

15. INTANGIBLE ASSETS

30/6/2014

Accumulated Accumulated
Net amount

Software licenses. 10.273 1.304 10.288 (6.625) 1.663

Total 10.273 1.304 10.288 (6.625) 1.663

2

(rs tarta ln Prtguee) 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)
The changes in “Intangible Assets” in the Consolidated Balance Sheets were as follows:

oezoza — aunzrona
cost
Opening banca 20208 915
Acdions – an
Amount written off. (15) –
Closing balance 1021 10208
Accarmlated deprecatio
Opening balance (0525) 1)
mount ten 15 –
Deprecaion (59) (76
Cosing balance (0305) (2529
inangble sets net
16. DEPOSITS FROM FINANCIAL INSTITUTIONS

ocaoza – aunzrona
Cassiicaion

Financial at a amorizo ost mms sena

rota mms sm
By maturity
Upto30 days 7198 ua
From31iosodajs 6327 24400
From 6t 030 days 7 20722
Fran 91 o 180 aja se 21
From 1811060 days 297 15:08
Morera 60 ys 2 18083
Total mms sm

17. DEPOSITS FROM CUSTOMERS

e

E a tor 20000 ama
ma a
so

a amo
Cape e
a a
he as
By maturity

AA
a Ez En
a a
o ma
EA a
sa o e

18. FUNDS OBTAINED IN THE OPEN MARKET

30/6/2014 31/12/2013]

Carteira Própria

National Treasury Bills (LTN) 229.032 201.413
Federal Treasury Notes (NTN) 82274 118.007
Other securiles abroad 7.396 14.109
Subtotal 318.702 333.529
Unrestricted portfolio

Debentures. 141.922 175.263
Subtotal 141.922 175.263

Freely-traded portfolio

Other securilles abroad 9.127 .
Subtotal 9.127 .
Total funds obtained in the open market 469.751 508.792

19. SECURITIES

Local

30/6/2014 31/12/2013
Financial bils 451.907 738.367
Total 51.907 738.367

2

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES

FR PINE

NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

Overseas – Fixed Rates Notes

MUELAS

Interest

30/6/2014

31/12/2013

24.091 0% a.a + Libor Jun/2014 3.182
2.000 US$ – 1,85% az + Libor Nov/2014. 4416 9371
1.044 US$ 8,7% aa+Libor Jan/2017 2.397 2.551
39.333 US$ 30% aa+Libor Jan/2014 – 7.130
23.529 US$ 42%aa+Libor Abr/2022 52.277 105.250
20.000 US$ 4,20% az + Libor dez/2023 44.164 –
73.000 CLP 60% aa+Var.UF DezI2017. 136.888 149.009
Total 240.142 276.493

20. BORROWINGS AND ONLENDINGS

Local borroings – other instituions ‘” –

SEE

EAS

EEE
3 years

SEE Loa

5years O

735110 –

Local onlendings – official institutions 62708 384.963 392.470 122.126 124.045 1.086.310
Foreign onlendings 2.322 2.662 133.458 132.114 33.029 303.585
Foreign borrowings 555.605 639.469 220250 – 86.075 1.481.399
Total 620.633 1.027.094 772.156 689.350 223.149 3.332.382

SEE Loa
E EOS 3 years 5years O

Local borroings – other instituions ‘” 995 – 49.460 216.786 > “167.247

Local onlendings – official institutions 61.768 279.262 571.229 112.536 116.293 1.141.108

Foreign onlendings – 2.895 2.805 – – 5.700

Foreign borrowings 425331 620.396 234.260 – 70.278 1.350.265

Total 488.114 902.553 857.760 529.322 186.571 2.964.320

TJ A Jane 30, 2014, RS 451.522 (R8 456,863 on December 31, 2013) refers to the value of FDIC shares, comprised of RS 27,214 (R$ 43,087 on December 31, 2013) of FIDC Pine Crédito Privado and senior

shares of FIDC Agro in the amount of RS 424,338 (R$413,776 on December 31, 2013)
21. SUBORDINATED DEBT

We present below the details of the balance of “Subordinated debts”:

31/12/2013

Fixed rate notes Public 8/1/2017 US$125.000 – 8,75% per year 283.444 303.059
Financial bils Private 6/12/2021 RSA5.152 – 141,45% of CDI 55.388 53.311
Total 398.832 356.370

22. OTHER FINANCIAL LIABILITIES

30/6/2014 31/12/2013]

Deferred income – commission on guarantees
Total

23. PROVISIONS

a) Provisions for contingent liabi

30/6/2014 31/12/2013

les, tax risks, commitments and other provisions:

69.272
69.272

68.499
658.499

Labor contingencies 1.994 1.925
Civil contingencies. 8.230 9.997
Tax contingencies 377 723
Provision for personnel expenditure 18.809 19.068
Others Provisions 1272 745
Total 30.682 32.458

b) Contingent assets and liabilities and legal obligations

1) Adherence to installment programs and settlement of tax debts (REFIS/Amnesty Law n? 12.865/2013)

On June 30, 2014, considering the terms and benefits provided by the Federal Government tax amnesty program, through Law No. 12.865/13, the Bank’s management
together with its legal advisors reassessed the convenience of adhering to the program and consequentiy, it was decided to desist from certain proceedings and
immediately settle the related outstanding contingencies.

The balance of the proceedings totaled R$948 and the negative income generated was R$140 which was net of taxes of negative R$ 279, and are comprised primarily
of the PIS process for the year 1996 for Pine Bank, which is fully provisioned. This process was paid in full by judicial deposit in the amount of R$173 and for the
processes PIS for the year 1997 an amount of R$10, IRPJ (income tax) for the year 1996 an amount of R$10 and CSLL (social contribution) for the years 1997/98
amounting to R$571. For Pine Investimentos DTVM, there was no accrual. These proceedings were partially paid by judicial deposit in the amount of R$138.

Provision for tax risks

These are to judicial and administrative proceedings related to tax and social security obligations. The main processes are:

Pis: The Bank and Pine Investimentos filed an injunction in order to suspend the provision of Article 3, paragraph 1, of Law 9.718/98, which changed the calculation
basis of PIS and COFINS to be levied on all revenues of corporations. Prior to that standard, already cleared in several recent decisions of the Supreme Court, were
taxed only on revenues from services and sale of goods. The wit of mandamus filed by Banco Pine was partially favorable decision and the appeal was dismissed by
the Union. The final and unappealable decision of action occurred on 09/17/2013.

Supported by the opinion of its legal advisors and other supporters of the cause, the challange in the Supreme Court has ceased and there is no further resource
available to be brought by the National Treasury, the Bank reversed its corresponding provision for the liability for the period from May 2005 to October 2011. This
considers that the legal obligation is no longer considered probable, which therefore represents a recognition of Net Income totalling R$35,764 in the Consolidated on
2013, which was recognized in the “Other operational income” and “Legal Expense” lines.

24

(A free translation of the original in Portuguese) AR
4 A PIN

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

In this context, the Bank will file a credit clearance claim with the Brazilian Federal Revenue agency (RFB), for the value of PIS overpaid during the period from May
1999 to April 2005, which totalled R$ 3566 in the Consolidated, which when indexed by the SELIC up to and including June 30, 2014, amounted to R$ 8,620 in the
Consolidated. In view of the final decision and the basis of that administrative procedure by the RFB, the related tax credit was recognized and recorded in “Other
receivables – Tax recoverable”, with the correspondent income recognised in the “Other operating income” line.

COFINS: In November 2005, the Federal Supreme Court (STF) judged as unconstitutional Article 3, paragraph 1, of Law 9718/98, which introduced the new calculation
base for COFINS determination purposes from February 1999, broadening the concept of revenue. Accordingly, the calculation base of COFINS was decreased and
gave rise to the unquestionable right to recover the amount of overpaid tax. The injunction filed against the Federal Government by the Institution claiming the right to
offset the refund of the incorrectly paid amount of COFINS against other current taxes was successful.

Supported by the opinion of its legal advisors and responsible attomeys, according to whom the case is settled at the STF with no possibility of any further appeal by the
National Treasury, the Institution reversed the corresponding provision for contingencies, for the period from May 2005 to October 2011, considering that it no longer
consists of a legal obligation and no loss is probable, and recognized a net revenue in the total amount of R$151,357, for 2011, recorded in the “Other operating
income” account and in the “Tax expenses” account.

In this respect, the Institution will file a request for proof of claim at the Brazilian Federal Revenue Department (RFB) regarding COFINS which was overpaid during the
period from June 2000 to April 2005, in the historical amount of R$ 15,872, which adjusted for inflation based on the variation in the SELIC rate up to June 30, 2014,
totals R$39,010 (December 31, 2013 – R$38,188). Based on the final and unappealable decision and the administrative procedure at the RFB, a corresponding tax
credit was recorded in “Other receivables – Tax recoverable”, as a counter entry to the “Other operating income” account.

The amounts of the legal obligations and respective judicial deposits are presented as follows:

Ex

rr
ANA deposits. ENERO

Social integration program (PIS) – 34.361 (24361) – 23218 (83218)

Social contribution on revenues(COFINS) – 175.379 (175.379) – 169.862 (169.862)

Total . 209.740 (209.740) – 203.080 (203.080)

Contingencies classified as probable are regularly recorded as a provision and at June 30, 2014 and December 31, 2013 total the following:

30/6/2014

O
pS

Tax contingencies 377 1.798 (1421) 1.769 (1.046)

Labor contingencies 1.994 827 1.167 575 1.350,

Civil contingencies 8239 2211 6.028 2.385 712

Total 10.510 4.836 5774 . 4.729 7.916

iv) Changes in liability provisions

E

a A q : A
pc E a ES
a . A ma a
ac Aa os = se a
v) We present below the main suits and proceedings for which the likelihood of loss was deemed possible:

Labor: at June 30, 2014 and December 31, 2013, the Institution had no labor claims classified as possible.

Civil: at June 30, 2014 and December 31, 2013, the Institution had no civil claims classified as possible.

24. TAX LIABILITIES

NN NT
a. zz sn
ps Ss E
en AS

25. OTHER LIABILITIES

30/6/2014 EUA

“Taxes and contributions payable 6.769 9.757
Dividends and bonuses payable 5.906 6432
Lawyers” fees. 6.137 6.394
Payment orders in foreign currency 22.525 16.072
Securities trading and brokerage 22.244 39.922
Transactions in progress * 12.464 –

Other 17.969 12.049
Total 94.014 89.626

Ar June 30, 2014 refers to foreign exchange transactions pending settlement.
26. EQUITY
a) Capital

Pursuant to the by-laws, subscribed and paid-up capital totals R$ 1,112,259 and comprises 121,172,024 (December 31, 2013 – 123,612,756) registered shares, of
which 65,178,483(December 31, 2013 – 65,178,483) are common shares and 55,999,541 (December 31, 2013 – 58,434,273) are preferred shares with no par value.
The Institution is authorized to increase its capital, without the necessity of any amendment to the by-laws, by up to a further 100,000,000 common or preferred shares,
all of which shall be nominative, book-entry and with no par value, by decision of the Board of Directors.

As deliberated at a meeting of the Board of Directors held on October 15, 2013 and ratified by the Central Bank on December 23, 2013, capital was increased from R$
967,259 to R$ 1,112,259, through the incorporation of part of the balance of the legal reserve in the amount of R $ 17,429, and part of the balance of the statutory
reserves in the amount of R$ 125,571 amounting to R$ 145,000, through the issuance of 12,770,443 new nominative shares, of which 6,733,594 common shares and
6,036,849 preferred, passing total number from 110,842,313 to 123,612,756 nominative shares, being 65,178,483 common and 58,434,273 preferred shares.

25

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

As deliberated at a meeting of the Board of Directors held on February 4, 2013 and ratified by the Central Bank on April 19, 2013, capital was increased in the amount of
R$31,576, through the issuance of 2,211,213 nominative preferred shares, with 1,887,605 shares issued to PROPARCO – Société de Promotion et de Participation pour
la Coopération Economique – and 323,608 shares to other shareholders, from R$935,683 to R$967,259, comprising 110,842,313 nominative shares, of which
58,444,889 are common shares and 52,397,424 are preferred shares, with no par value. The amount of this capital increase is recorded in equity in the “Capital
increase” account.

b) Capital reserves
The capital reserve, pursuant to the provisions of Law 11638/07, may only be used to (¡) absorb losses which are in excess of retained earings and the revenue
reserves: (ii) increase capital; (ii) cancel treasury shares; and (iv) pay dividends on preferred shares provided that they are entitled to this benefit.

c) Revenue reserve

The Institution’s revenue reserve comprises the legal and statutory reserves. The balance of the revenue reserves may not exceed the Institution’s capital, and any
excess must be capitalized or distributed as dividends. The Institution has no other revenue reserves.

Legal reserve – Pursuant to Law 11638/07 and the bylaws, the Institution must appropriate 5% of its net income for each year to the legal reserve. The legal reserve
shall not exceed 20% of the Institution’s paid-up capital. However, the Institution may choose not to appropriate a portion of its net income to the legal reserve for the
year in which the balance of this reserve plus the capital reserves, exceeds 30% of its capital.

Statutory reserve – Pursuant to Law 11638/07, the by-laws may establish reserves, provided that determine its purpose, the percentage of net profits to be allocated to
these reserves and the maximum amount to be maintained in each statutory reserve. The allocation of funds for such reservations can not be approved subject to the
mandatory dividend. The Bank has a statutory reserve of 100% of net income, the amount of R$34,518, after deducting 5% legal reserve of R$3,523, the deduction of
interest payments on capital of R$33,263 and dividends of R$6,737, in order to maintain compatible with the development of lending operations of the Bank operating
margin.

d) Dividends and interest on own capital
Stockholders are entitled to a minimum dividend of 25% of annual net income, adjusted pursuant to Brazilian corporate legislation, subject to the approval of the
General Meeting of Stockholders.

In accordance with the provisions of Law 9,249/95, interest on own capital was accrued and declared, calculated based on the variation in the long-term interest rate
(TJLP) for the period. This interest on own capital decreased the expense for income tax and social contribution for the period ended June 30, 2014 by R$13,305 (June
30, 2013 – R$12,278).

We present below the dividends and interest on own capital related to income for the three-month period:

AE Amount per share.
SPA)
Interest on own capital 30/6/2014 – 17/7/2014 0,1414 16.733 0,1202 14.223
Interest on own capital 11412014 14/4/2014 0,1366 16.530 0,1161 14,051
Dividends 30/6/2014 17/7/2014 0,0276 3267 – .
Dividends 1/4/2014 14/4/2014 0,0287 3.470 – .

In accordance with ICPC 08, of the Brazilian Accounting Pronouncement Committee, the proposed additional dividend in excess of the minimum dividend, in the amount
of R$ 11,584 (June 30, 2013 – R$20,819) is classified in a specific equity account.

e) Treasury shares

At the Board of Directors’ Meeting held on March 27, 2014, the cancelation of 2,440,732 preferred shares held in treasury was approved, without a capital reduction,
thus reducing the goodwill reserves in the subscription of shares and statutory reserve. These shares were acquired through the share buyback program approved by
the Board of Directors, in accordance with CVM Instruction No. 10 at 02.14.1980, as amended by CVM Instruction No. 268, at 11.13.1997 and 390 at 07.08.2003

At the Board of Directors’ Meeting held on March 27, 2014, the authorization to acquire up to 852,883 of the Banco Pine’s own preferred shares was approved, to be
held in treasury and subsequently disposed of, as well as payment of variable remuneration for statutory directors of the Banco Pine pursuant to Resolution No.
3.921/10, without a capital reduction. There have already been 124,256 shares repurchased under this plan, in the amount of R$ 1,053 at an average cost of R$ 8,43.
This authorization will be valid until September 27, 2014.

On June 30, 2014 the Banco Pine had 2,799,421 held in treasury (1,918,045 at December 31, 2013) preferred shares issued by the Banco Pine in the amount of R$
21,348 (R$ 22,083 at December 31, 2013). The market value of these shares was R$ 21,052 (R$ 20,197 at December 31, 2013).

27. CARRYING VALUE ADJUSTMENTS

The balances of the “Carrying value adjustments” account include the amounts, net of the corresponding tax effect, of the adjustments to assets and liabilities
recognized temporarily in equity which are presented in the statement of changes in equity, and the income and expenses recognized until they are extinguished or
realized, when they are definitively recognized in the Consolidated Income Statement. The amounts generated by the subsidiaries are presented on a line by line basis,
under the appropriate headings depending on their nature.

The consolidated statement of comprehensive income includes the changes in the “carrying value adjustments” account.

31/12/2013

(21.659)

(21.659)
Cash flow hedges 2.744
Hedging instrument 4.573
Income taxon hedges (1.829)
Other (4.500)
Income tax 8.663
Total (14.852)

26

(Ate ario rial Pote 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in thousands ofress R$, except netincome per share)
When securities classified as available-for-sale are sold, or become impaired, the cumulative fair value adjustments, previously recognized in equity, are presented in
results,

During the period ended December 31, 2013, the Institution sold securities classified as available for sale. This transaction generated a loss of R$238 twhich was
transferred to results. In June 30, 2014 the bank has not recorded injury.

28. INTEREST INCOME AND SIMILAR

Interest income and similar in the Consolidated Income Statement consists of interest that has accumulated during the period on all of the financial assets, calculated
based on the effective interest rate method, regardless of the fair value measurement.

2nd Quarter/2014 ETE AS 1t Sem/2013
Loans and advances to financial institutions 179.443 350.750 1.667 3.179
Avallable-for-sale debt instruments 1.123 2.261 47.554 67.501
Loans and advances to customers. 49.643 90.346 130.702 250.419
Total 224.209 443.347 179.923 321.099

29. INTEREST EXPENSE AND SIMILAR

Interest expense and similar in the Consolidated Income Statement consist of interest that has accumulated during the period on all of the financial liabilities, calculated
based on the effective interest rate method, regardless of the fair value measurement.

2nd Quarter/2014 ETE AS 1t Sem/2013
Deposit from financial institutions 1.926 4.401 2.165 3.909
Deposit from customers 124.985 253.002 87114 169.199
Funds obtained in the open market (672) (672) 6449 6512
Borrowings and onlendings 219.643 249.900 16.070 32.043
Securities issued abroad 7.462 15.104 8,685 14,049
Subordinated debls. 20.240 27.674 7.503 19.732
Other interest 4.626 9.074 4.117 9.030
Total 378.310 558,583 132.103 248.474

30. NET GAINS FROM (LOSSES FOR) FINANCIAL ASSETS AND FINANCIAL LIABILITIES (NET) MEASURED AT FAIR VALUE

Gains from (losses for) financial assets and financial liabilities consist of the carrying value adjustments of financial instruments, except for those accrued as a result of
the application of the effective interest rate method and the gains or losses resulting from the sale or purchase of financial instruments.

a) Classification

ETE ETE TEE NETO
Financial assets and labities held for trading 13,546 25291 20.749 113.777
Total 43,546 85291 26.749 13.777
b) Financial assets held for trading – Derivatives
ETE ETE TEE NETO
Futures (132.625) (282.141) 11435 32.383
Options 6786 42.929 35.542 (2.087)
Suaps (21.169) (16.196) 45822 107.522
Forward contacts 181.263 290.562. (62.396) (27.897)
Credit deriatves 24 294 – –
Total 24.488 20.388 39.064 103.921
e) Financial assets held for trading – Debt instruments
ETT ETE TEE NETO
Debt instruments 16.598 39.190 (13-115) 9.856
16538 39.190 (13.15) 9.356

31. FEE AND COMMISSION INCOME

The “Fee and commission income” account consists of all fees and commissions accumulated in favor of the Institution and ¡ts subsidiaries during the period, except for
those that are part of the effective interest rate on financial instruments.

2nd Quarter/2014 1st Sem/2014 _ 2nd Quarter/2013 EN
Commission on guarantees. 11.570 21.669 10.185 18.160
Structuring fee 8.090 9.966 11.785 19.123
Customer account charges 117 273 528 1.081
Other 459 638 169 322
Total 20.236 32.546 22.637 32.686

32. FEE AND COMMISSION EXPENSES

The “Fee and commission expenses” account consists of all fees and commissions paid or payable by the Institution during the period, except for those which are part
of the effective interest rate on financial instruments.
We present below the breakdown of this account balance:

2nd Quarter/2014 ETE AS 1t Sem/2013
Commissions. 720 1.626 454 970
Banking services 411 812 233 458
Teleprocessing 545 1.126 523 1204
Other 287 499 216 429
Total 1.963 4.063 1426 3.061

33. FOREIGN EXCHANGE VARIATION (NET)

Foreign exchange variation mainly includes the gains and losses currency trading, changes arising from the translation of monetary items from foreign to functional
currency and the gains or losses disclosed for foreign-currency non-monetary assets at the sale transaction date. At June 30, 2014, the amount of the gain is R$211,855
(December 31, 2013 – loss of R$4).

27

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES

NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

FR PINE

34. OTHER OPERATING INCOME(EXPENSES)

2nd Quarter/2014

EEN

2nd Quarter/2013

1t Sem/2013

Recovery of expenses 185 781 329 759
Charges on credit assigned (” – – (1.295) (6811)
Rental income 854 2186 1.208 2:94
Provisin for FIDC – – (4.929) (4.929)
Other income (expense) 2451 E) 8244 19.525
Other provision (1.536) (1.760) . –
Total 1954 2.196 3.557 4.738

35. PERSONNEL EXPENSES

2nd Quarter/2014

EEN

2nd Quarter/2013

1t Sem/2013

Salaries 15.192 31.128 14.867 29.846
Benefis, training 2.326 4.606 2.209 4.483
Social charges 4,758 9.19 4.528 9.663
Profit sharing 9.726 23.036 7.912 14,541
Total 32.002 68.684. 28.616 58.533

36. OTHER ADMINISTRATIVE EXPENSES

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37. NET PROVISIONS

2nd Quarter/2014

EEN

2nd Quarter/2013

MEN

Indexation – asset 3511 6343 2.444 4.748
Reversal of / Provision for cv, labor and taxes proceedings 1.069 2.224 7.444 7.132
Other 2.398 3.728 – –
Total 6.978 12.795 9.888 11.880

38. RESULT OF SALE OF ASSETS

In the period ended June 30, 2014, the amount of R$9,121 (June 30, 2013 – R$2,478) corresponds mainly to the sale of assets received as payment in kind for the

settlement of loan operations.

39. INCOME TAX AND SOCIAL CONTRIBUTION

a) Reconciliation of expenses for income tax and social contribution on net income:

2nd Quarter/2014

15t Sem/2014

2nd Quarter/2013

EN

Income before taxes, net of profit sharing 47.750 80.418 23.347 85.962
Interest on own capital (16.733) (63.263) (15.719) (30.696)
Income before il 31.017 47.155 58.266
Rate (25% income tax and 15% social contribution) 40% 40% 40% 40%
Expected expense for IRP and CSLL, based on current tax rate (12.407) (18.862) (6.051) (23.306)
Income of the termination interest 72 3.006 – –
Other adjustments (29 (2.320) 13.840 14.681
Income tax and social contribution (11.807) (18.185) 10.789 (6.625)

b) Deferred taxes recognized in income

30/6/2014 30/612013|

Impairment. 49.592 79.224
Losses for loan operations not yet deducted 59.163, 19.830
Pravision for taxrisks and contingent lablties 4,243 19.691
Provision for equity abroad 3.901 4.400
Pravision for other assets – 3.983
Other IFRS adjustments. 11.710 (0.364)
Markto-market adjustment of derivative financial instruments (50.737) (43.002)
Other adjustments 26.976 4.875
Total 104.848 79.637

28

(rs tarta ln Prtguee) 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

e) Tax recognized in equity

30/6/2014 30/6/2015 |
‘Valuation of (fxed income) avallable-for-sale securities 7.341 9.976
‘Valuation of cash flow hedges (2.144) (2243)
Other IFRS adjustments. 1.584 66
Total 7.381 7.199
d) Changes in deferred taxes

2nd Quarter/2014 EEE EN

Opening balance 24.139 5020 72021
Debit (credito income 32197 27.170 23.752 7.892
Debt (credit) to equiy (855) E (4.520) 7,583
Closing balance 112.220 112.220 87436 87.436
e) Estimated realization

ENE
Upto 1 year 102.197
From 1102 years 24872
From 2103 years 15.520
From 3 104 years 5259
From 4105 years 6432
From 5 o 10 years. 9sm
Subtotal -Deferred tax assets 164.251
Upto 1 year 30.953
From 1102 years 7.504
From 2103 years 4.309
From 3 104 years 251
From 4105 years 358
From 5 o 10 years. asi
Subtotal -Deferred tax liablties 52022
Total 112.220

40.EMPLOYEE BENEFITS

The Institution makes monthly contributions to a private pension company for VGBL and PGBL plans, at the option of the participant, in an amount equivalent to 1% of
the employee’s gross salary, provided that the employee also contributes at least 1% of his/her gross salary, to supplement their social security benefits, as part of a
defined contribution plan, and this ¡s the sole responsibility of the Institution as sponsor.

For the period ended June 30, 2014, the amount of this contribution was R$192 (R$188 in the period ended in June 30, 2013).

41. PROFIT SHARING PROGRAM

Banco Pine has a profit sharing program (PPLR) ratified by the Bank Employees’ Trade Union, as defined in the Institution’s bylaws.

The general assumptions of this program are: (a) business unit performance; (b) establishment of a fund for distribution organization wide; and (c) skills assessment
and achievement of targets by the various support areas. These expenses were recorded in the “Personnel expenses” account.

42. OPERATING LIMITS
a) Basel ratio

Financial institutions are required to permanently maintain their Required Regulatory Capital (PRE) compatible with the risks of their activities. PRE is calculated
considering, at least, the sum of the portions of credit, market and operational risk.

In March 2013, the Brazilian Central Bank (BACEN) issued the standards relating to the definition of capital and regulatory capital requirements, for the purpose of
implementing the recommendations (Basel III) issued by the Basel Committee on Banking Supervision (BCBS) in Brazil. The main objectives are as follows: (i) improve
the ability of financial institutions to absorb shocks occurring in the financial system or in other economic sectors; (i) mitigate the risk of financial sector contagion
spreading to the real economy; (ii) assist in maintaining financial stability; and (iv) foster sustainable economic growh. The application of the new Basel II! rules will
commence from October 1, 2013.

At June 30, 2014, the Institution’s Basel ratio was 13,66% (14,14% December 31, 2013),calculated based on the Consolidated Financial Statements in BRGAAP, as
required by BACEN:

ET 30/6/2014 ETA
Regulatory Capital Level 1.255.861 1.220.519
Principal Capital 1.255.861 1.220.519
Equity 1.269.929 1.272:408
(-) Prudential Adjustments (14.068) (51.889)
Regulatory Capital Level Il 151.759 221.841
Subordinated debt 151.759 221841
Reference Equity – PR 1.407.620 1.442.360
RiskWeighted Assets – RWAC 10.303.345 10.203.251
Credit risk 9.336.628 9.311.739
Market risk 779.147 731.173
Operational risk 187.570 160.339
Basel Ratio – % 13,66% 14,10%
Capital Level 12,19% 11,96%
Principal Capital 12,19% 11,96%
Capital Level 1,47% 2,17%

11 From October 2013, the reference equity became determined based on Resolution No, 4.192/13 CMN which provides that the determination is based on “Consalidated Financial”.

1% Criteria used, from October 2013, according to Resolution No. 4.192/13 CMN;

29

(A free translation of the original in Portuguese)

PIN

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

b) Risk Management – Pillar 3
In October 2013, BACEN published the Circular no. 3,678, which disposed about the risk management information exposure, the amount of weighted assets

determination by the risk and the Reference Equity (PR) determination. The new circular take effects from June 30, 2014 on, when the Circular no. 3,477 turns revoked.
The new publish requirements incorporate to brazilian’s regulation pillar 3 requirements, present on Basel Il and, mainly, on Basel! II.

The content of our new Risk Management Report – Pillar 3 will be avaiable on the following website: www.pine.comír.
b) Equity to fixed-assets ratio

In accordance with BACEN Resolution 2286/96, the equity to fixed assets ratio is limited to 50.0%. At June 30, 2014 the equity to fixed assets ratio was 2,23% (6,22%
december 31, 2013).

43. GUARANTEES PROVIDED

The Institution offers a series of guarantees to help its customers improve their credit position and ability to compete. We present below all of the guarantees at June 30,
2014 and december 31, 2013:

30/6/2014 31/12/2013
Guarantees provided to financial institutions 23.923 13.208
Guarantees provided to individuals and corporations. 2.917.255 2.895.209
Lotters of credit 4123 51.212
Total 2.945.301 2.960.409

The Institution provides financial guarantees to its customers for third-party agreements. The Institution has the right to be reimbursed by these customers for any
amount that it has to pay on account of these guarantees. These contracts are subject to the same credit assessments that are carried out for loans.

44. RELATED PARTY TRANSACTIONS

a) Management compensation

In the first half of 2012, the Institution approved the new Compensation Plan which addresses the standards and guidelines for the payment of fixed and variable
compensation applicable to the members of the Board of Directors and statutory directors and, at the discretion of the specific committee, other executive officers with
important positions and functions, in accordance with the provisions of Resolution 3921/10, of the National Monetary Council

The new Plan has the following main objectives: (i) alignment of the Institution’s executive compensation practices with its risk management policy; (ii) prevention of
conduct that increases risk exposure to levels above those considered prudent in the short, medium and long-term strategies adopted by the Institution; (ii) creation of
an instrument designed to attract and retain talent for the Institution’s key positions; and (iv) adaptation of the compensation policy to meet the requirements of
Resolution 3921/10.

The compensation defined in the Plan takes the following into consideration: (¡) the Institution’s current and potential risks; (ii) the Institution’s overall result, in particular,
recurring realized income (net book income for the period adjusted based on unrealized results and excluding the effects of controllable non-recurring events); (ii)
capacity to generate cash flows; (iv) the economic environment in which the Institution operates and its related trends; (v) long-term sustainable financial bases and
adjustments to future payments, based on the risks assumed, fluctuation in capital costs and liquidity projections; (vi) the individual performance of the Directors based
on the target agreements entered into by each director as established in the PLR and filed at the Institutior’s head office; (vii) the performance of the business unit; and
(vii) the relation between the Directors’ individual performance, the business unit performance and the Institution’s overall performance.

Variable compensation is calculated as follows:
a) up to 50% of the amount established for variable compensation is paid in-kind, at the same time as payment of Profit Sharing (PLR),

b) the amount corresponding to 10% of that established for variable compensation will be paid in preferred shares of the Institution at the same time as PLR payment.

€) the amount corresponding to the remaining 40% of variable compensation will be paid in preferred shares of the Institution and will be granted to the employee at the
same time as the payment of the amount in kind. The right to dispose of these shares will be on a “Deferred” basis, increasing in line with the Directors level of
responsibility.

The delivery of the shares related to deferred variable compensation attributable to the Directors will only occur if none of the following is verified during the applicable
deferral period: (i) a significant decrease in realized recurring income;(i) loss in the Institution or business unit, or (ii) verification of errors in accounting and/or
administrative procedures which affect the results determined during the vesting period of the variable compensation.

The Institution’s Compensation Committee, constituted at the General Meeting held on January 16, 2012, will be responsible for (1) presenting proposals to the board of
directors regarding the various forms of fixed and variable compensation, as well as benefits and the special recruitment and termination programs; (ii) monitoring the
implementation and operation of the Institutior’s directors’ compensation policy; (ii) annually reviewing the Institution’s directors’ compensation policy, recommending
adjustments or improvements to the board of directors; (iv) recommending to the board of directors the total amount of the directors’ compensation to be submitted to
the General Meeting, in accordance with Article 152 of Brazilian Corporation Law; (v) evaluating future internal and external scenarios and their possible impact on the
Institution’s directors’ compensation policy, (vi) analyzing the Institution’s directors’ compensation policy in relation to market practices, to identify significant differences
as compared to peer companies, proposing necessary adjustments; (vii) ensuring that the directors’ compensation policy is permanently in line with the risk
management policy, the Institution’s current and expected financial position and the provisions of this resolution; and (viii) preparing annually, within a period of ninety
days from December 31, of each year, a Compensation Committee Report, as required by CMN Resolution 3921/10.

For period ended June 30, 2014 there was determination regarding variable remuneration in the amount of R$12.960 (R$ 13.116 June 30, 2013), and expense for the
year was R$5,516 (R$3,832 on June 30, 2013) according to the criteria defined in the new plan.

ctors and Executive Board EY 30/6/2013 |
Fixed compensation 5.768 2.364
Variable compensation 12.960 6.594
Shorterm benefits 2577 1.519
Total 21.305 12477

Short-term benefits paid to directors mainly comprise salaries and social security contributions, paid leave and sick pay, profit sharing and bonuses (when payable within
twelve months subsequent to the year-end) and non-monetary benefits (such as healthcare and free or subsidized goods or services).

30

(rs tarta ln Prtguee) 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

Stock-based compensation

Amount EN
ETT
STO) 9

PLANI 25/8/2012 14,18 319 146 8 164 06,66% 25/8/2014
100,00% 25/8/2015
33,33% 25/2/2014

PLAN IL 25/2/2013 14,25 335 163 10 162 06,66% 25/2/2015
100,00% 25/2/2016
33,33% 23/8/2014

PLAN IL 23/8/2013 10,24 441 86 – 354 06,66% 23/8/2015
100,00% 23/8/2016
33,33% 25/2/2015

PLANIV 25/2/2014 814 581 116 – 464 06,66% 25/2/2016
100,00% 25/2/2017

Total 1676 su 18 1.144

Employment agreement termination

The employment agreements are valid for an indefinite period. Officers are not entitled to any financial compensation when the employment relationship is terminated
either voluntarily or due to the non-ulfillment of their obligations. If the employment agreement is terminated by the Institution, the officer may receive indemnification.
In the quarter ended June 30, 2014 there were no payments to executives who left as compensation (R$ 23 in June 30, 2013).

b) Related parties
A]
EAT

Demand deposits
Directors and immediate family ‘” 21 73 – –
“Time deposits 11.723 19.083 en (058)

rectors and immediate family (% 11.723 13.083 67) (958)

Ti riese amount

nat consolidaed.

e) Capital ownership

The following table presents the direct investment in common and preferred shares, at June 30, 2014 and December 31, 2013 of stockholders with more than five
percent of total shares and of members of the Board of Directors and Executive Board.

Common Common Preferred DEE Total
shares shares(96) ev O) E)
Individuals 165.178.483 100,00 17.210.589 29,45 82.389.072. 66,65
Board of Directors – – 3.736.574 639 3.736.574 3,02
Executives – – 3.186.610 546 3.186.610 2,58
Total 65.178.483 100,00 24.133.773 41,30 89.312.256 7225

ee Preferred Ln Total
CTA shares E shares (9%) shares (9)

Individuals 58.444.889 100,00 15.410.863 29,41 73.855.782 06,63
Board of Directors – – 3.243.868 6:19 3.243.868 293
Executives. – – 3.103.532 592 3.103.532 2.80
Total 58.444.889 100,00 21.758.263,00 4152 80.203.152 72,36

45. OTHER DISCLOSURES
a) Insurance

The Institution’s insurance strategy is based mainly on both risk concentration and materiality, and policies are contracted at amounts established by Management,
considering the nature of its business and the advice of its insurance brokers. Insurance coverage at June 30, 2014 was as follows:

[5 Type of cover NTE
Directos and OfficrsLiablty (D8O) Management cv aby 20.000
Veni Pre, robbary and colision Tor 18 vehicles 2603
Bulángs, machines, fumiure and adas Any maleñal damage o facies, machine and equipment 12000
Banker Insurance Cash 300
AS AS En

46. RISK MANAGEMENT

a) Introduction and overview
Banco Pine is exposed to risks resulting from the use of financial instruments which are continuously measured and monitored and has an analysis structure comprising
a board of directors, a council and a committee that are responsible for assessing the following risks:

Credit risk

Liquidity risk

Market risk

Operational risk

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

Risk management framework

The Board of Directors is responsible for identifying and controlling risks; however, there are other independent areas which are also responsible for managing and
monitoring risks.

b) Credit risk

Definition

Credit risk is the exposure to loss in the case of the total or partial default of customers or counterparties in fulfiling their financial obligations with the Institution. Credit
risk management seeks to support the definition of strategies, in addition to establishing limits, including an analysis of exposure and trends, as well as the
effectiveness of the credit policy.

Credit risk measurement
Loans to customers and financial institutions
As a general rule, the measurable amount of the collateral is used to mitigate and decrease the percentage of Impairment to be applied, as well as when there is a

significant amortization of the loan or hen new significant facts justify a decrease in the percentage of Impairment.

Among the objective criteria used to establish the possible impairment of an asset, the Institution considers the risk classification, especially, for all customers with a
given risk rating which is equal to or lower than “D”, under the terms of CMN Resolution 2682, as well as the default in payments past due for more than 90 days,
presented below.

Calculation of impairment when evidenced

At least one of the borrower’s obligations with a financial institution is past due for more than ninety days
i. Operations without guarantees:
The percentage of potential credit risk is applied to the amount of the exposure presenting evidence of impairment not related to guarantees.

ii. Operations with guarantees:

The guarantees of exposures evidencing impairment will be used as a mitigating factor and accordingly, the application of the potential credit risk percentage is
unnecessary. The amount of the impairment will be the difference between the amount of the exposure and the present value of the guarantee associated with this
exposure. The present value of the guarantee ¡s calculated based on the Institution’s average funding cost over a three-year period.

Criteria for recording impairment in the case of unidentifiable risks

For the purpose of preventing possible losses with receivables which have not yet been identified, according to its criteria for objective evidence of impairment, the
Institution uses an evaluation of its historical losses as a basis for applying a generic percentage to the portfolio base.

Credit risk management

Duties:

+ Formulate Credit Policies with all of the Institutior’s units, including collateral requirements, credit assessment, risk rating and presentation of reports, legal and
documentary procedures, as well as compliance with regulatory and statutory requirements.

+ Establish the structure for approval and renewal of Credit lines. Limits are established and approved by the Credit Committee.

+ Review and assess credit risk. The Credit area evaluates all credit exposure which exceeds established limits, prior to the release of the credit lines to the customers
by the related business unit. Renewals and reviews of credit lines are subject to the same review process.

+ Limit concentration of exposure by counterparties, geographic regions and economic sectors, and by credit rating, market liquidity and country.

+ Develop and maintain the Institution’s risk classification to categorize exposure according to the degree of risk of financial loss and focus management on inherent
risk. The risk classification system is used to calculate credit exposure. The current risk classification structure includes degrees of credit risk and availability of
guarantees or other tools to mitigate credit risk.

+ Offer advice, guidance and specialized techniques to promote credit risk management best practices throughout the Institution.

Credit policy
Contains the guidelines and recommendations adopted by Banco Pine to apply and monitor credit granting. The policy establishes rules for the following:

+ Granting credit to Companies, Financial Institutions, Treasury Operations and Individuals, as well as monitoring performance according to normative features,
presenting restrictions to certain practices and concentrating on establishing minimum requirements that steer the activity;

+ Provide basic routines to all the areas involved in credit operations to ensure that the related professionals and executives have a complete understanding of the
policy rules and the importance of strict compliance with the required standards,

As a general rule, this policy is flexible and suggestions for its improvement are encouraged, and should be submitted to the Vice-President of the Credit Risk
Department and the Compliance Department, so that they can be properly analyzed and submitted to the Credit Committee.

Banco Pine’s credit policy is based on the risk classification of each customer and the risk of the transaction, respectively “Customer Rating” and “Operation Rating”.

The methodology used for classification is based on a model developed intermally, containing technical criteria consistent with an objective assessment based on the
company’s financial information and its credit history, as well as considering subjective aspects inherent to the customer’s operations which cannot be otherise
measured.

The criteria were developed, tested and applied by the Vice-President of Credit Risk Department for all of the Institution’s active customers, when implementing the
Credit Policy. After a thorough analysis and evaluation of the rating methodologies available on the market, Banco Pine acquired a license to use the Risk Analyst tool
from Moody’s Analytics. This methodology is used by the Institution as an additional parameter for rating customers

Credit risk assessment for derivatives is based on an assessment of the fractional risk, ¡.e., the potential for future adjustments that the operations may generate in the
Institution’s favor. Fractional risk is calculated based on the market price and rate volatilty of the derivatives in the portfolio,

The concept of credit approval will always be “Total Risk”, including the operations themselves and the risks presented thereby.

All credit lines should be analyzed based on the customer’s payment ability, as well as the guarantees they provide.

The sovereign risk of Brazilian goverment securities is considered free of credit risk.

Corporate bonds are analyzed in the same manner as the Institution’s other lending operations.

32

(Ate ario rial Pote 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

Maximum credit risk exposure
EMATTE

Cash equivalents 1.105.439 581.482
Debt instruments 1.031.897 1.300.274
Derivatives 551.612 515.358
Loans and recelvables 6.570.272 6.399.672
Guarantees provided 2.945.301 2.960.409

Quality of credit

We present below the segregation of loans, considering the following: loans falling due and loans past due with or without impairment:

Unexpired
Interna! classification (Rating O E

2682) AE impairment TS

AAC (Collective) 1.942 6.144.909 6.146.851 30.488
D-H (Individual analysis) 34,204 344.777 378,981 91.675
Retail 578 3.570 4.148 587
Securities with credit risk – 529.481 529.481 –
Total 36.724 7.022.737 7.059.461 122.750

Unexpired
Internal classification (Rating O E

2682) AE impairment TS

AAC (Collective) 33.878 5.941.772 5.975.648 29.619
D-H (Individual analysis) 16.567 342.110 358,577 106.141
Retail 1.270 6.392 7.662 80%
Securities with credit risk . 597.654 597.554 –
Total 51713 6.887.928 6.939.541 136.654

The risk concentration by sector of the portfolio of loans and advances to customers is presented in Note 9.
Mission of the Chief Risk Officer (CRO)

Credit analysis and granting

Assess the risks involved in transactions and the customers ability to settle their obligations according to the contracted terms.

Credit risk controls and management

Perform preventive monitoring of active customers designed to anticipate default in the portfolio of operations involving credit risk, support decisions and commercial
strategies and provide data that permits the Credit Committee and Executive Board to monitor compliance with Banco Pine’s Strategic Planning.

Market risk controls and management

Analyze, measure and control Banco Pine’s Market Risk and Liquidity Risk, calculate the Treasury Management Results and provide support for controlling the
Institution’s derivative credit risk, in both the managerial and regulatory environment.

CRO Composition – Chief Risk Officer

Credit analysis oversight board

Responsible for credit granting analysis and recommendation. Comprising 4 management areas, divided into regional business units. Represented by managers,
coordinators and credit analysts, all of whom are economic sector specialists.

Risk control oversight board

Responsible for credit risk control and management. Comprising an executive superintendent, managers, coordinators and credit, liquidity and market risk analysts.

Credit processing and approval

The Credit Process commences with the preparation of a credit proposal and the respective visit report by the commercial area. This credit proposal will be analyzed by
the Credit Analysis management (with the corresponding economic and financial analysis) by the commercial area and by the Credit Committee.

The Credit Committee has the following responsibilities:

+ Define the credit policy and respective changes;

+ Analyze, approve or refuse credit limits/lvans;

+ Monitor the ongoing utilization, designed to compare the approved parameters vs. actual utilization of the credit lines, avoiding excesses.
Voting Credit Committee members:

+ Chairman of the Board of Directors and Board Members;

+ CEO – Chief Executive Officer;

+ COO – Chief Operations Officer;

+ CAO – Chief Administrative Officer;
+ CRO – Chief Risk Officer.

Observations:

+ Unanimous approval;
+ The Credit Origination Executive Officer and Executive Superintendent participate in the Credit Committee meetings as observers;
+ The Credit Risk Superintendent participates in the Credit Committee meetings but without the right to vote.

+ The Credit Committee may convoke, as participants, the origination department executives.

Credit risk controls and management

In a broad concept, by analyzing all customers independent of the sectors in which they operate and focusing, in particular, on the intemal control structure, Banco
Pine’s Executive Board and Credit Risk Department decided, together, to create a separate cell within their structure’s hierarchy for credit control, called the Credit
Controls Board, reporting directly to the Risk Control Oversight Board, whose chief mission is to preventively monitor active customers, to anticipate default in the
portfolio of operations involving all types of credit risk, to support decisions and commercial strategies and to provide information that enables the Executive Committee
to monitor compliance with the Institution’s Strategic Planning.

33

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

It should be noted that Banco Pine has an integrated operating risk consolidation system that includes credit limits, collateral positions, types, terms and limits
contractually established with customers, decisions and recommendations of the Credit Committee, as well as the liability position of customers with the Institution and
information related to the above mentioned items.

In addition to the management tools provided chiefly to the Commercial Department, this instrument enables the consolidation of information essential to monitoring the
credit portfolio, creating an automatic link with the procedures adopted by the Processing Department and connected to operation processing.

As a result, when applied to the risk monitoring matrix determined for this stage of the process, the system can provide daily information on the closing positions and
indicate any exceptions.

Also under the standardized model, any of the pre-defined combinations of these exceptions will result in the issue of alert reports and, depending on the severity, in
blocking credit transactions and limits for customers.

Special Asset Management (Credit recovery department)

The Institution has a specific credit recovery area which is designed to support the areas involved in the collections process, and to identify and resolve potential risks to
the Institution, seeking agile and effective solutions to minimize possible losses, to be a source of information regarding payments which are overdue or which for some
reason are no longer certain, and to promote control over the risks which, pursuant to the policy established by the Institution, are managed by the Special Assets Area.

Recovery stages

This area operates in the prevention and recovery process which is divided into two stages: “Monitoring” and “Credit Recovery”.
The Monitoring activities are designed to minimize the impact of risks both in loans falling due and loans past due in their entirety.

In this sense, it seeks to provide Senior Management with information regarding risks that involve overdue operations, as well as positioning the Commercial Area as
regards the risks involved, so that ultimately decisions can be made in adequate time frames with the appropriate accuracy.

The “Special Asset Management – Credit Recovery” activities are designed to recommend the collection measures to be used in cases where the Institution’s customers
are in default and for which, from a commercial standpoint, there are no effective solutions for regularizing payment and which therefore require more effective collection
methods.

In terms of a preventive action, it seeks to adopt measures for risks that, in some manner, present indications of possible default, be they insufficient guarantees,
reduced liquidity of notes under collection, uncovered overdrafts or which have exceeded credit limits without due approval, operation successions or renewals, in
particular, working capital when there has not been a sizeable reduction of the balance payable or transactions which are incompatible with the operation type, order for
write-off of bonds in the portfolio, origination of direct credit funds from the customer, as well as when the customer is in poor financial health, and such information is
obtained in the market, from newspapers or magazines and which could place in doubt the certainty of the receipt of the funds loaned.

For objective evidence of Impairment, we adopt the following practices:
i. – Change in customer risk

Any economic/financial change related to a customer with whom the Institution maintains a relationship indicating an increase in the credit risk of that customer or
economic group.

Risks that, under some aspect, present some indication of a possibility of default that is detected through insufficient guarantees, reduced liquidity of securities in
collection, transactions incompatible with the type of operation, orders for write-off of notes in the portfolio, among others items.

For the purpose of this analysis, the Risk and Controls Oversight Board will observe said changes through the monitoring of the Institution’s active customers and
identifying any changes in the risk of any customer and assessing the necessity (or not) of impairment for that customer or group.

Impairment percentages to be practiced will consider guarantees provided in the operation and the financial analysis of the customer, among others, so as to justify any
percentage that may be applied to any specific customer or economic group.

As a general rule, the measurable amounts of the guarantees provided will be used to mitigate and decrease the impairment percentage to be applied, as well as when
there is a significant amortization of the loan or when new material facts justify decreasing the impairment percentage.

ii. Overdue operations

For the purpose of establishing of objective evidence of impairment, based on the evaluation of overdue payments and in order to consider material facts for
assessment and application of impairment, in addition to other aspects, the Institution has established that all customers with payments past due for more than ninety
days must be tested regarding the need or not to apply impairment.

The application of minimum percentages shall be subject to the assessment of each risk and may be increased or decreased, in particular, as a result of the
assessment of risk mitigating factors such as guarantees, financial conditions of the customer or economic group, among others.

As a general rule, the measurable amounts of the collateral provided will be used to mitigate and decrease the impairment percentage (recoverable value of the assets)
to be applied, as well as when there is a significant amortization of the loan or when new material facts justify decreasing the impairment percentage.

iii. “Renegotiated” operations

Firstiy, the definition of a “Renegotiated” operation is necessary to establish the criteria for objective evidence of impairment for said operations:

According to the rules established by the Brazilian Central Bank, in principle, a renegotiation is considered a debt composition, extension, renewal, granting of a new
loan for partial or full settlement of the prior operation, or any other type of agreement which entails a change in the maturity or payment terms originally contracted.

In relation to this preliminary definition and the stringency of certain regulations issued by the regulators of Financial Institutions, all concepts are generalized as
“agreements”.

Accordingly, within the nature of our commercial relationship with our customers, an “agreement” cannot be confused with a “renegotiation”, since the latter occurs when
our customer fails to meet their contractual obligations and we are obliged to formalize a pact to renegotiate the conditions of the operation and seek the solvency of the
credit.

Itis normal for financial institutions to change their current operations with contractual amendments stipulating term extensions and new rates, though not in the context
of “Renegotiation”, to retain their customers and business. Itis often necessary to seek a solution to maintain the relationship, such as, for example, collateral offered
with satisfactory performance, operations that involve guarantees and that require public instruments, registration and, as a consequence, additional costs in the event
of offering a new limit or opening a new operation.

Accordingly, for the purpose of defining “Renegotiated” operations and in line with the rules issued by the regulatory body, the Institution classifies and register in its
legacy system as “Renegotiated” all operations that, based on their specific characteristics, indicate a probability of loss and as a result whose contract terms are
renegotiated in the pursuit of solvency.

As a result, operations identified as “Renegotiated” will be treated similarly to other cases, that is, when such an operation ¡s identified and for the purposes of defining
the impairment percentage, guarantees provided in the operation and a financial analysis of the customer, among others, will be considered to justify any percentage to
be applied for a given customer or economic group.

34

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FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

As a general rule, the measurable amounts of the guarantees provided will be used to mitigate and decrease the impairment percentage to be applied, as well as when
there is a significant amortization of the loan or when new material facts justify decreasing the impairment percentage.

The following table presents an estimate of the fair value of the guarantees and other types of security held against financial assets.

Loans and advances to customers

ENE

Operations with impairment

Receivables 98.292 118.206
Pledge / sale of products, inventories and equipment 123.573 94.122
Mortgage / sale of real estate 99.714 20.089
Guarantees 23.726 –
Subtotal 345.305 232.417
Operations without impairment

Recevables 93.982 946.700
Pledge / sale of products, inventories and equipment 1.504.567 1.449.393
Financial investments 69.596 127.416
Mortgage / sale of real estate 1.733.487 1.749.423
Guarantees – 25.379
Subtotal 3.401.632 4.298.311
Total 3.746.937 4.530.728

Unidentifiable risks
For the purpose of preventing possible losses with receivables which have not yet been identified, according to ¡ts criteria for objective evidence of impairment, the
Institution uses an evaluation of its historical losses as a basis for applying a generic percentage to the portfolio base.

Accordingly, the Institution adopts an evaluation model for losses incurred for the previous three years, including the period under evaluation.

AII new customers are analyzed, as well as losses incurred with those customers, calculating the percentage of these losses in the customer base, by historical
amounts, not considering any changes in the credit volume over the commercial relationship maintained with these customers.

Once the loss percentage has been calculated for the period under analysis, this percentage is applied to customers who did not present evidence of impairment.
€) Liquidity risk

Definition

Liquidity risk is associated with possible difficulties that the Institution may face in meeting its obligations resulting from its financial liabilities.

Liquidity risk management

Liquidity risk management seeks to protect the Institution from possible market developments that generate liquidity issues. Accordingly, the Institution monitors its
portfolios with regards to maturities, volumes and the liquidity of its assets.

Daily control is carried out through reports in which the following items are monitored:

+ Maturity mismatches between payment and receipt flows Group wide.

+ Projection of liquidity stress scenarios defined by the Asset-Liability Committee (ALCO).

This information is checked against the Institution’s cash position each day and assessed each week by ALCO.

Liquidity is managed by the Market, Liquidity and PEL Risk Oversight Board, which reports to the Risk Control Oversight Board.

Balance Sheet by maturity

We present below the Balance Sheet by contractual maturity:

Ta ES More than
90 days 360 days 360 days
ASSETS
Financial assets 4.128.498 2.754.006 2.939.187 9.821.691
Cash and cash equivalents 5 1.198.844 – – 1.198.844
Financial assets held for trading 1.115.907 138.099 333.773 1.587.779
Debt instruments 7 851.419 – 180.478 1.031.897
Equity instruments 4.270 – – 4.270
Derivatives a 260.218 138.099 163.295 551612
Available-for-sale financial assets 114,505 95.636 377.405 587,546
Debt instruments 7 114.505 96.636 377.405 587.546
Loans and recelvables 1.699.242 2.520.271 2.226.009 6.447.522
Loans and advances to credit institutions 6 15.664 12.584 11.744 40.292
Loans and advances to customers. s 1.683.578 2.507.387 2.216.265 6.407.230
Other assets 332.529 26.842 339.314 698.585
Non-current assets held for sale 10 112.279 – – 112279
Other 220.250 26.842 339.314 586.406
Deposit in guarantes ” – – 214.576 214.576
Recoverable income tax: – – 59.260 59.260
Other assets. 12 108,021 26.842 65.478 200.341.
Deferred income tax and social contribution 39 112.229 – – 112.229
TOTAL ASSETS (1) 10.520.376
LIABILIMIES
Financial liabiities. 2.699.493 3.063.770 3.448.041 9.211.304
Derivatives a 131.580 57.082 59.692 248.304
Deposit from financial institutions 16 78.399 1.048 262 79.729
Deposit from customers 17 1.302.256 1.709.123 969.506 3.980.985
Funds obtained in the open market 18 453.409 – 16.342 469.751.
Securities issued abroad 19 20.779 271.755 399.515 692.049
Borrowings and onlendings 20 632.375 1.024.829 1.675.178 3.332.382
Other financia labios 2 69.272 – – 69.272
Subordinated debt 21 11.423 (17) 327.426 338.832
Provisions 23 10.402 9.750 10.907 31.059
Reserves for contingentliabilties, commitments and other provision 10.402 9.750 10.530 30.582
Reserve for tax contingencies – – 377 377
Tax liabilities 24 . 36.482 – 36.482
Other liabiities. 80.843 6.552 6.622 94,017
Other fiables 25 80.840 6.552 6.622 94.014
Correspondent banks 3 – – 3
TOTAL LIABILMIES 9.372.862

Dos notinclude total Ted asséts or intangible assets

35

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

31/12/2013

From S1to More than
360 days 360 days
ASSETS
Financial assets 3.650.381 2.543.787 3.322.698 9.516.866
Cash and cash equivalents 5 738.552 – – 738.552
Financial assets held for trading 1.386.825 112.697 317.677 1.817.199
Debt instruments 7 1.288.058 70 12.146 1.300.274
Equity Instruments 1.567 – – 1.567
Derivatives 8 97.200 112.627 305.591 515.358
Available-for-sale financial assets 89.966 127.763 490.268 697.997
Debt instruments 7 89.966 117.763 490.268 697.997
Loans and recelvables 1.434.938 2.313.327 2.514.753 6.263.018
Loans and advances to credit institutions 6 8.750 48.935 – 57.585
Loans and advances to customers. s 1.426.188 2.264.392 2.514.753 6.205.333
Other assets 227.961. 194.464 340.267 762.592
Non-current assets held for sale 10 53.216 109.548 – 162.764
Other 174,745 84.916 340.267 599.928
Deposits in guarantes ” – – 207.809 207.809
Recoverable income tax: 670 – 57.147 58.417
Other assets. 12 150.694 36.373 62.496 249,563
Deferred income tax and social contribution 39 23.381 48.543 12215 84.139
TOTAL ASSETS'” 10.279.558
LIABILIMIES
Financial labi 2.529.122 2.944.678 3.505.114 2.978.914
Derivatives a 107.071 53.282 30.480 190.833
Deposit from financial institutions 16 55.353 18.312 16.053 89.718
Deposit from customers 7 1.294.963 1.357.412 1.133.147 3.785.522
Funds obtained in the open market 18 494.682 – 14.110 508.792
Securities issued abroad 19 7.245 613.172 394.443 1.014.860
Borrowings and onlendings 20 487.160 902.512 1.574.648 2.964.320
Other financial labios 2 68.499 – – 65.499
Subordinated debt 21 14.149 (12) 342.233 356.370
Provisions 23 7.568 11.500 13:90 32.458
Reservas for contingentlibilties, commitments and other provisions 7.568 11.500 12.667 31735
Reserve for tax contingencies – – 723 723
Tax liabilities 24 (182) 5.135 – 4.353
tner nabies. zoo – 5396 eu.sÓL
Other fiables 25 83.230 – 6.396 89.626
Correspondent banks 25 – – 25
TOTAL LIABILMIES 9.105.376

“W Does notinclude total Ixed ass
Does not include tolal fixed assets or intangible assets.

d) Market risk
i) Definition

Market risks are related to possible monetary losses due to fluctuations in variables that impact market prices and rates. Oscillations of financial variables such as the
price of input material and end products, inftation, interest rates and foreign exchange rates have the potential for causing losses in almost all companies and, therefore,
represent financial risk factors.

The Market Risk to which an institution is exposed is mainly due to three factors: a) exposure – amount exposed to risk; b) sensitivity – the impact of price fluctuations;
and c) variation – the magnitude of price variations. We stress that, among these factors, exposure and sensitivity are controllable by the Institution as part of its
appetite for risk, while variation is a market characteristic and, accordingly, out of the Institutior’s control.

Market risks can be classified under different types, such as interest rate risk, foreign exchange risk, commodities price risk and share price risk. Each type represents
the risk of incurring losses due to oscillations in the respective variable.

Market risk management

Market risk is managed in a centralized manner by an area that is independent in relation to the trading desk and is chiefly responsible for monitoring and analyzing
market risk originating in positions assumed by the Institution vis-a-vis its appetite for risk as defined by ALCO and approved by the Board of Directors.

Market risk is managed daily by the Market, Liquidity and P8L Risk Oversight Department, which calculates the Value at Risk (VaR) and generates the Duration Gap of
the Primitive Risk Factor mismatches of assets in the Institution’s portfolio.

Amounts are compared daily to the Va limits, exposure by Primitive Risk and Stop Loss Factors established by ALCO and approved by the Institution’s Board of
Directors.

For stress tests, scenarios considering bear and bull markets on the Commodities and Futures Exchange, as well as changes to the interest rate curves, are used.
Scenarios generated by ALCO may also be used.

) Methodologies

Fair value

The purpose of marking to market (Fair Value) is to ensure that the pricing of assets and liabilities in the Institution’s portfolio is as transparent as possible for
shareholder protection.

Value at risk (VaR)
VaR measures the worst expected loss on a horizon given by normal market conditions in a given confidence level, that is, VaR provides a measure of market risk.
Market risk management uses VaR as a measure of the Group’s potential losses. For the calculations, the parameters used are the horizon of one day and a 99%

confidence interval. The calculation is based on closing market prices, taken from different sources (ANBIMA, BM8FBovespa, and the Brazilian Central Bank, among
others).

36

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PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

The VR analysis is performed by market, vertex and risk factors associated with the interest curve, share prices, foreign exchange and commodities. If the VaR limit is
surpassed, an evaluation of the operations will be performed and those that present a greater risk will be readjusted by Treasury in order to reduce risk and seek
alignment with the maximum exposure limit. Market liquidity will be evaluated as these operations are readjusted.

iv) Analyses
GAP Analysis
The mismatch between the maturities of asset and liability operations creates a Duration Gap, originating from the difference between the weighted average maturities

of both assets and liabilities. As a resul, it is a graphic representation by risk factor of cash flows expressed at market value, allocated on maturity dates, used to
assess risk exposure over a specific time horizon.

Sensitivity analysis for risk factors

This analysis is designed to evaluate the response of the market value variation of the portfolio to a minor variation in interest rate structures. The applied scenario is a
shift of 1 basis point (DVO1) in the interest rates included in the Institution’s portfolios. This analysis is important as it takes into account the maturity (duration) of the
assets in the Institution’s portfolios.

Stress tests

Stress tests, which are performed daily, are disclosed with the Institutior’s risk figures for each exposure (pre-fixed-interest, US dollar, inflation and shares) considering
the scenario disclosed by BM8FBOVESPA for each risk factor. Two increase and two decrease scenarios are considered.

v) Risks
Interest rate risk

Interest rate risk arises from the possibility that variations in interest rates will affect the future cash flows or the fair value of financial instruments.
Currency risk

Currency risk ¡s the risk of variation in the value of a financial instrument due to changes in exchange rates. The Board has established limits for positions in foreign
currencies. According to the Institution’s policies, positions are monitored daily and hedging strategies are used to keep the positions within the pre-established limits.

Share price risk

Share price risk is the risk that the fair value of shares will decrease as a result of the variations in share indexes or individual shares.
Commodities risk

Commodities risk is due to the oscillation of prices in physical products (agricultural products, oil, metals, etc.).

vi) Risk exposure

Portfolios held for trading

This portfolio consists only of the Institution’s trading operations, transacted with the intention of trading, resale, and obtaining benefit from the changes in prices or
arbitrage. Operations for hedging this portfolio may also be included.

Market risk exposure – Portfolios held for trading

We present below a summary of the VaR position of the Institution’s tradable portfolios for the periods ended June 30, 2014 and december 31, 2013 considering 99%
confidence interval and one-day holding period:

une 30, 2014
December 31, 2013

vii) Sensitivity analysis

Pursuant to CVM Instruction 475, of December 17, 2008, we present below the possible effects on the results arising from the sensitivity scenarios for all transactions
with financial instruments, which expose the Institution to risks arising from foreign exchange and interest rate variations or any other sources at June 30, 2014.

Sensitivity analysis]

Scenari

ET

Remote

Fixed interest rate (PRE) Fixed interest rate variaions 164 (29) (40)
¡General Market Price index (IGPM) IGPM coupon variations 240 (509) (1.018)
Price index (IPCA) IPCA coupon variations 252 (6.868) (19.737)
Long+term interest rate (TJLP) TALP variations. 16 1269 2.517

US dollar coupon rate Exchange coupon variation 6.750 (6:51) (7.302)
Other currency coupon rates. Exchange coupon variation 38 87 175

Ofíshore rates (LIBOR + other Offshore) Offshore rate variations 369 6.538 13,061

Currencies Change in exchange variation (15) (407) (614)
Total (uncorrelated sum)” (1.582) (19.385) (58.771)
Total (correlated sum)+= 7.814 (8541) (7.098)

ncorelated sum: sum 0
Corelated sum: the worst resulto he sum o he stress fet scenarios o al of e risk factors considering the coreation between them.

sul obtained in Ihe worst sress scenarios foreach sk factor.

37

(Ate ario rial Pote 3
FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in thousands o resis RS, except net income por share)

Scenario 1- Probable

Scenario comprising the variation in market factors between June 30, 2014 and July 11, 2014 (variation in the fixed rate from 10,91% to 10,92% on a 1-year curve and from.
11,68% to 11,61% in a 3-year curve, variation in the US dalla from 2,2025 to 2,2228 and in the exchange coupon from 0,65% to 1,27% on a 1 year curve)

Scenario Il- Possible 0

Scenario comprising a 25% shock to the market interest rate curve amounts (disclosed by BMBF), and to the closing prices (US dollar and equity), as in the folowing example:

Market rate “New market rate
Curve (A year) Shock (year)
Fixed interest rate (PRE) 10,91% 25% 13,53%
¡General Market Price index (IGPM) 547% 25% 584%
Price index (IPCA) 4,88% 25% 6,08%
Long+term interest rate (TJLP) 5,54% 25% 5.92%
US dollar coupon rate 0,65%. 25% 081%
Other currency coupon rate 1,02% 25% 1,28%
LIBOR – USD 0,55%. 25% 0,68%
LIBOR – USD Other currency 0,17%. 25% 021%
Currencies 2,2025 25% 2,7631

Scenario Il – Remote (?

Scenario comprising a 50% shock to the market interest rate curve values (disclosed by BMBF), and in the closing prices (US dollar and equity), as in the following example

Market rate New market rate
Curve (year) Shock (2 year)
Fixed interest rate (PRE) 10.31% 50% 16,30%
General Market Price index (IGPM) 547% 50% 821%
Price index (1PCA) 4,80% 50% 729%
Long-term interest rate (TJLP) 554% 50% 831%
US dolar coupon rate 0.55% 50% 097%
Other curency coupon rate 1,02% 50% 1,53%
LIBOR – USD 0,55% 50% 0.82%
IBOR – USD Other currency 0,17% 50% 026%
Currencies 22025 50% 33038
For Scenarios Wand , was considered he resultof he siress of high orlow in order o obtal a resul of higherlosses Tor he porto.
viii) Balance sheet by currency
ENT 31212013
ES Euro a US dollar En Other
ASSETS
Cash and cash equivalents 369.985 10975 603 500.214 3480 16.581
Loans and advances to customers 1278283 – – 1.101.044 – –
Debt instruments – – .
Other assets – – – 27243 – –
Total 1562268 10975 603 1528501 3480 116.581
LIABILMES
Deposit from customers 2.364 – – 2:80 – –
Securiies issued abroad 103.189 – 144,149 128.239 – 156.460
Borrowings and cnlendings 1.548.103 2788 111.117 1.110.499 – 17.113
Correspondent banks. 22.310 – – 15.071 – –
Subordinated debt 288.519 – – 306.978 – –
Other habits – – – 93.704 – –
Total 1964585 2788 255.256 1.550.665 – 213.573
Derivatives 200.987 (La) 255.522 27.568 (2.523) 156.890
GAP Analysis (6330) 7aa 959 (695) (14, (102)
ix) Balance Sheet by interest rate
30/6/2014
Ea a ETT E Other
ASSETS
Cash and Equivalents 150.061 694.284
Debt instruments 342.187 929.001 10.139 – – 35.888
Loans and advances to financial institutions 40.294 – – – – –
Loans and advances to customers 4.526.574 – 1.297.590 108.001 202399 301815
Total 5.150.115 1.523.285 1307.729 108.891 202.399 367.703
LIABILMES
Deposit from customers 3525:301 397.325 – – – .
Deposit from financial insttutions 79.729 – – – – 17491
Funds obtained in the open market 469.751 – – – – .
Securiies issued abroad 437.06 15.441 2397 – – 241.110
Borrowings and cnlendings – – 1.428.319 101.114 – –
Subordinated debt 48,327 7.060 286.561 – – .
Total 4.560.235 419.825 1717378 101114 – 250.501
Derivatives 409.289 (150.377) (61975) (254.089)
GAP Analysis 1008.70 1.049.082 (409.549) 1777 170.364 (154.987)

38

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FR PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

E
1PCA ET AAA ii
ASSETS
Debt instruments 1.302.410 633,400 25.985 – – 36.476
Loans and advances to financial institutions 57.685 – – – – .
Loans and advances to customers. 4.420.217 215.636 947.386 187.245 224.628 286.875
Other assets. 30.240 – – – – .
Total 5.810.552 909.036 973.371 187.245 224.628 323.351
LIABILIMIES
Deposit from customers 3.132.810 409.215 – – – 243.497
Deposit from financial institutions 89.718 – . – – .
Funds obtained in the open market 508.792 – . – – .
Securities issued abroad 704,539 19.427 127.484 – – 162.410
Sale or transfer of financial assets 1.378.666 – 1.263.472 105.815 216.359 8
Subordinated debt 46.572 6738 303.060 – – –
Total 5.861.097 435.380 1.694.016 105.815 216.359 406.915
Derivatives 919,527 (613.709) . – (292.351) (6.904)
GAP Analysis 358.982 159.947. (720.645) 81430 (284.082) (92.468)

e) Operational Risk Management
Definigáo

The possibility of losses resulting from failure, deficiency or inadequacy of intemal processes, people and systems, or from external events. Includes the legal risk
associated with inadequacy or deficiency in the agreements entered into by the Institution, as well as penalties as a result of non-compliance with legislation and
indemnities for damages to third parties arising from activities carried out. To mitigate this type of risk, the Institution adopts a structure to ensure continuous updating
and mapping of risks and controls as well as to capture information related to any operational failure.

39

(A free translation of the original in Portuguese)

PINE

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

Management and methodology

The Operational Risk Management area, which reports to the Risk Control Oversight Board, is responsible for centralizing operational risk management and
disseminating its methodology and the compliance focus points, acting in the Institution’s various activities, helping to promote a culture of compliance and risk control
across the Organization, designed to improve and enhance internal processes and reduce operating risks.

According to this methodology, periodic self-assessments of the area’s activities and processes are performed, which include the identification of inherent risks,
evaluation of the efficacy of the controls and recommendations for action plans to mitigate the identified risks and/or improve controls.

From June 2011, the Institution changed the methodology used to calculate the portion of required regulatory capital (PRE) related to operational risk (POPR) from the
Basic Indicator Approach (BIA) to the Simplified Alternative Standardized Approach (ASA II), in accordance with BACEN Circular 3383/08.

47. OTHER INFORMATION

a) Law no 12973

On May 14, 2014, the Law no. 12973 was published, conversion of the Provisional Mesure no. 627, which modifies the federal tax statute book about IRPJ, CSLL, PIS
and COFINS. The referred Law no. 12973/14 dispose, among other subjects, about

+ The revoke of Transition’s Tax Arrangements – RTT, instituted by the Law no. 11941, of May 27, 2009;

The legal entity domiciled in Brazil tax, with relation to the equity increase deriving from profits eamed abroad by foreign-based controlled and affiliate companies and
profits eamed by private individual resident in Brazil by intermediate of a legal abroad controlled entity.
We estimate that the referred Law no 12193/14 has no relevant accounting effects on the financial statements of Banco Pine and controlleds.

48. RECONCILIATION OF EQUITY TO NET INCOME (BRGAAP and IFRS)

In accordance with CVM Instruction 457 of July 13, 2007, we present below the reconciliation of equity and net income attributed to the parent company between
BRGAAP and IFRS for the related periods:

3 > 3olGlzo1a. 31/12/2013]
Consolidated equity under BRGAAP 1.269.929 1.272.408
Impairment loss on loans and receivables. a 28.115 41.615
Deferral of bank fees and commissions under the effective interest rate method b (29.275) (62.340)
Hedge accounting. f (3.174) .
Income tax and social contribution on IFRS adjustments e 464 (8710)
Equity under IFRS 1.266.059 1.277.973
3 30/6/2014 30/06/2013
Consolidated net income under BRGAAP. 70.468 84.216
Impairment loss on loans and receivables. a (13.500) (8.578)
Deferra of bank fees and commissions under the effective interest rate method b 3,065 (11.432)
Hedge accounting f 463 610
Transfer of category in securities 9 (2437) 7.517
Income tax and social contribution on IFRS adjustments e 4.174 8.004
Net income under IFRS 62.233 180.337

a) Impairment of loans and receivables
Under IFRS, based on the guidance in IAS 39 “Financial Instruments: Recognition and Measurement”, the Institution estimates the allowance for loan losses based on

its historical impairment and other circumstances known at the time of assessment. These criteria differ in certain aspects from the criteria under BRGAAP, which uses
certain regulatory limits defined by the Brazilian Central Bank to calculate the allowance for loan losses.

b) Deferral of bank charges and commissions under the effective interest rate method:

Under IFRS, in accordance with IAS 39 “Financial instruments: Recognition and Measurement”, inherent bank charges, commissions and financial costs that are
included in the effective interest rate of financial instruments calculated at a amortized cost are recognized in income during the period that the respective contracts are
in effect. Under BRGAAP, these fees and expenses are recognized directly in income when received or paid.

€) Transactions for the sale or transfer of financial assets:

The Institution wrote off assets related to credit assignments with substantial retention of risks and reward from January 1, 2004 and, in accordance with IFRS 1
requirements, the assets transferred with retention of risks and rewards were recomposed and recorded, and the liabilities related to the co-obligations in the credit
assignments were recorded on the IFRS transition date, and subsequently. Revenues (expenses) recorded at the time of the credit assignments are recognized in
income during the effective period of the respective agreements.

d) Derecognition of investments stated at cost:

On the date of transition, the Institution wrote off investments stated at cost, previously recorded in assets, as they did not meet the requirements for recognition of
assets under IFRS.

e) Income tax and social contribution on IFRS adjustments

In accordance with 1AS 12, deferred income tax and social contribution on taxable, or deductible, temporary differences must be recorded.
Adjustments to deferred income tax and social contribution, calculated on IFRS adjustments, were reflected in the reconciliation.

40

(A free translation of the original in Portuguese)

BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE IERS CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2014 AND DECEMBER 31, 2013

(in tnousands of resis RS, except nt income por share)

1) Hedge accounting

Under IFRS, in accordance with IAS 39 “Financial Instruments: Recognition and Measurement”, the portion of the gain or loss on the hedge instrument qualified for
hedge accounting of cash flow, which is determined as an effective hedge shall be recognized directly as other comprehensive income.

IAS 39 requires the discontinuation of the cash flows from hedge accounting, the cumulative gain or loss on the hedging instrument that remains recognized as
comprehensive income from the period from when the hedge was in effect shall remain separately recognized in equity until settlement of the hedge reference.

9) Transfer of category in securities

IAS 39 prohibits the reclassification of financial instruments between categories, accordingly, the financial assets available for sale may not be reclassified to other
categories or vice-versa.

41

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