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| 8-K - FORM 8-K - PALMETTO BANCSHARES INC | d542886d8k.htm |
 Annual Meeting of Shareholders
May 16, 2013
1
Palmetto Bancshares, Inc.
Holding Company for
NASDAQ:
PLMT
Exhibit 99.1 |
 Informational Update to Shareholders:
Samuel L. Erwin, Chief Executive Officer
2
NASDAQ:
PLMT |
 Forward Looking Statements
Certain
statements
in
this
presentation
contain
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995,
such
as
statements
relating
to
future
plans
and
expectations,
and
are
thus
prospective.
Such
forward-looking
statements
are
identified
by
words
such
as
“believes,”
“expects,”
“anticipates,”
“estimates,”
“intends,”
“plans,”
“targets,”
and
“projects,”
as
well
as
similar
expressions.
Forward-looking
statements
are
subject
to
risks,
uncertainties,
and
other
factors
which
could
cause
actual
results
to
differ
materially
from
future
results
expressed
or
implied
by
such
forward-looking
statements.
Factors
which
could
cause
actual
results
to
differ
materially
from
the
anticipated
results
or
other
expectations
expressed
in
the
forward-looking
statements
include,
but
are
not
limited
to:
(1)
the
strength
of
the
United
States
economy
in
general
and
the
strength
of
the
local
economies
in
which
the
Company
conducts
its
operations
which
could
result
in,
among
other
things,
a
deterioration
in
the
credit
quality
or
a
reduced
demand
for
credit,
including
the
resultant
effect
on
our
loan
portfolio
and
allowance
for
loan
losses
and
the
rate
of
delinquencies
and
amounts
of
charge-offs,
or
adverse
changes
in
asset
quality
in
our
loan
portfolio,
which
may
result
in
increased
credit
risk-related
losses
and
expenses;
(2)
adverse
conditions
in
the
stock
market,
the
public
debt
market
and
other
capital
markets
(including
changes
in
interest
rate
conditions)
and
the
impact
of
such
conditions
on
the
Company,
and
the
timing
and
amount
of
future
capital
raising
activities
by
the
Company,
if
any;
and
(3)
actions
taken
by
banking
regulatory
agencies
related
to
the
banking
industry
in
general
and
the
Company
or
the
Bank
specifically.
The
assumptions
underlying
the
forward-looking
statements
could
prove
to
be
inaccurate.
Therefore,
we
can
give
no
assurance
that
the
results
contemplated
in
the
forward-looking
statements
will
be
realized.
The
inclusion
of
this
forward-looking
information
should
not
be
construed
as
a
representation
by
our
Company
or
any
person
that
the
future
events,
plans,
or
expectations
contemplated
by
our
Company
will
be
achieved.
Additional
factors
that
could
cause
our
results
to
differ
materially
from
those
described
in
the
forward-looking
statements
can
be
found
in
our
reports
(such
as
Annual
Reports
on
Form
10-K,
Quarterly
Reports
on
Form
10-Q
and
Current
Reports
on
Form
8-K)
filed
with
the
U.S.
Securities
and
Exchange
Commission
(the
“SEC”)
and
available
at
the
SEC’s
Internet
site
(http://www.sec.gov),
including
the
“Risk
Factors”
included
therein.
All
subsequent
written
and
oral
forward-looking
statements
concerning
the
Company
or
any
person
acting
on
its
behalf
is
expressly
qualified
in
its
entirety
by
the
cautionary
statements
above.
We
do
not
undertake
any
obligation
to
update
any
forward-looking
statement
to
reflect
changes
in
circumstances
or
events
that
occur
after
the
date
the
forward-looking
statements
are
made.
3
NASDAQ:
PLMT |
 Commitments to our Shareholders
1.
Communicate regularly
2.
Provide clear and transparent information
3.
Be accessible and visible
4.
Listen to concerns and suggestions
5.
Continue the rich legacy of our 106-year old
institution
6.
Protect the reputation of The Palmetto
Bank 7.
Work hard with dedication and perseverance to
recover and optimize shareholder value
4
NASDAQ:
PLMT |
 Economic, Industry and Market
Challenges Continue…
1.
Sluggish and slow growth economy
2.
Improving but uneven loan production
3.
Federal Reserve interest rate policy resulting in low
interest rate environment and net interest margin
compression
4.
Revenue pressures and increasing regulatory costs
5.
Highly competitive market in the Upstate of South
Carolina
6.
Ongoing industry consolidation (at 12/31/12, down
1,451
(17%)
from
8,534
at
12/31/07
and
down
8,075
(53%)
from
15,158
at
12/31/90)
5
NASDAQ:
PLMT |
 How is the Industry
Responding? 6
First
Quarter
2013
Bank
Earnings
Releases
–
Focus
on
Expenses
“Calling expense control a "major focus," BB&T Corp. Chairman, President and CEO
Kelly King said the U.S. economy will probably remain in a slow-growth mode for the next
two or three years, so the company needs to adjust its business strategies accordingly.” –
SNL 4/18/13
“Our relentless focus on capital, liquidity, and expense reduction…”
-
Bank of America First Quarter 2013 Earnings Release 4/17/13
“…expenses continued to decline as we improved efficiency across the
franchise…” -
Wells Fargo First Quarter 2013 Earnings Release 4/12/13
“…we remain committed to disciplined expense management over the course of the
year.” -
PNC First Quarter 2013 Earnings Release 4/17/13
“
The Company remains focused on strategic efficiency and addressing the ongoing
environmental impact to the banking industry of increased regulatory compliance costs,
revenue pressures on fee income, and net interest margin challenges…”
-
Earnings Release 4/24/13
NASDAQ:
PLMT |
 The
Palmetto Bank: Building Momentum…
7
NASDAQ:
PLMT |
 Sustained Profitability
1.
Three consecutive quarters of profitability
through March 31, 2013
2.
Expected to continue for the remainder of 2013
3.
Potential
quarterly
earnings
“lumpiness”
from
strategic quarterly resolution of the few
remaining problem assets
8
NASDAQ:
PLMT |
 Improving Asset Quality
9
NASDAQ:
PLMT
$92,532
$96,936
$113,181
$91,653
$90,773
$91,405
$85,099
$71,739
$75,007
$53,028
$45,544
$24,176
$19,879
$15,848
$17,106
$27,765
$28,014
$28,980
$26,627
$22,638
$20,087
$16,385
$15,334
$14,851
$27,824
$26,789
$14,746
$11,647
$10,991
$11,088
$120,297
$124,950
$142,161
$118,280
$113,411
$111,492
$101,484
$87,073
$89,858
$80,852
$72,333
$38,922
$31,526
$26,839
$28,194
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
3Q 2009
4Q 2009
1Q 2010
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
Nonaccrual loans
OREO and Repossessed Autos
NPA to total assets |
 Exited Consent Order
1.
Consent Order terminated in January 2013
2.
Continued favorable regulatory relations
3.
Positive feedback and confirmation of progress from
ongoing examinations
10
NASDAQ:
PLMT |
 New
Technology to Enhance the Client Experience
NASDAQ:
PLMT
11 |
 Winning in the Market, Including with Larger
and More Sophisticated Companies
NASDAQ:
PLMT
12 |
 Stock Price Trading at Premium
to Book Value
13
1.
2012 common stock increase of 70% (from
$5.05 to $8.58)
2.
Stock price as of May 15, 2013 = $13.90
(increase of 62% from December 31, 2012)
-
178% of Book Value as of March 31, 2013
NASDAQ:
PLMT
-
146% of Pro Forma* Book Value as of
March 31, 2013
Including projected partial recapture of the valuation allowance
on the deferred tax asset
* |
 The
Palmetto Bank: Looking Forward…
14
NASDAQ:
PLMT |
 Summary of Evolution of Focus
•
2009
–
Quantify depth of credit loss hole
–
Implement Strategic Project Plan
–
Prepare for regulatory agreement
•
2010
–
Raise capital ($114 million in
October 2010)
–
Process improvement
–
Change management
–
Consent Order
•
2011
–
Performance culture and talent
management
–
Infrastructure
–
Operating earnings
–
Client focus
•
2012
–
Return to profitability
–
Substantial resolution of
remaining problem assets
–
Expense reductions
–
Technology enhancements
–
Expanded niche lending
•
2013
Exit Consent Order
Sustained and predictable
earnings
“Final”
resolution of problem
assets
Value creation, including the
Client Experience and
Teammate Experience
NASDAQ:
PLMT
15 |
 Clear Focus on
Value Creation Strategy
16
NASDAQ:
PLMT
What actions do we need to take to increase
the Value of The Palmetto Bank Franchise
1.
2.
Are all of our actions contributing to an
enhanced Client Experience 3.
Are we cultivating a Teammate Experience
that inspires us to do our best and win? ?
? |
 Big
Picture Strategy – Line of Business Delineation
with Tailored Go-To-Market Strategies
1.
Retail
Banking,
including
consumer
banking
services
and
lending, Mortgage, Credit Cards and Indirect Auto
2.
Commercial
Banking,
including
Small
Business
Administration loans, Business Banking, Corporate Banking,
Treasury Management and Merchant Services
3.
Wealth
Management,
including
Trust,
Brokerage,
Insurance,
and Financial Planning (and potential addition of Private
Banking)
4.
Support
Groups:
enable
the
above
with
disciplined
expense
management and sound risk management
By line of business, tailored go-to-market strategies, products,
services, bundled offerings, expertise, technology,
infrastructure, marketing, etc.
17
NASDAQ:
PLMT |
 Summary Themes for Success in 2013
1.
Growth,
including
loans,
core
deposits,
households
and
revenues
2.
Client
Experience,
including
tailored
strategies
by
line
of
business and specialized operational support
3.
Continuous
improvement,
including
process,
systems
and
technology for seamless processing and operational
excellence
4.
Strategic
efficiency,
with
refined
processes
and
efficiency
for competitive advantage
5.
Capital
planning,
taking
into
consideration
organic
balance
sheet growth, evolving Basel III capital rules, dividend and
M&A preparation
6.
Teammate
Experience,
including
commitment
to
excellence
and a winning mindset
18
NASDAQ:
PLMT |
 Closing Thoughts
19
NASDAQ:
PLMT |
 Value of The Palmetto Bank
Franchise
1.
106 year legacy with excellent reputation and strong brand
recognition
2.
Historical high performing financial results, with history of
innovation and balanced and fair pricing to our clients
3.
Premier deposit-gathering franchise in an attractive and
vibrant banking market with strong deposit gathering
capability
a.
Greenville
mentioned
as
a
“booming
city”
in
a
recent
American Banker
article
4.
Heritage of deep client relationships and loyalty, with high
touch client service platform being leveraged for enhanced
sales culture
5.
Experienced, specialized and dedicated team committed to
excellence
Positive
momentum
and
outlook!
20
NASDAQ:
PLMT |
 Building Shareholder Value
Even with a 106 year history,
legacy is more about
what is in front of us
than what is behind us…
Someone’s sitting in the shade today
because someone planted a tree a long time ago.
--Warren Buffet
21
NASDAQ:
PLMT |
 Thank
you
for
your
support!
22
NASDAQ:
PLMT |