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| 8-K - FORM 8-K - CenterState Bank Corp | d762032d8k.htm |
 KBW Community
Bank Investor
Conference
New York
July 29, 2014
Exhibit 99.1 |
 This
presentation contains forward-looking statements, as defined by Federal
Securities
Laws,
relating
to
present
or
future
trends
or
factors
affecting
the
operations, markets and products of CenterState Banks, Inc. (CSFL). These
statements
are
provided
to
assist
in
the
understanding
of
future
financial
performance. Any such statements are based on current expectations and involve
a
number
of
risks
and
uncertainties.
For
a
discussion
of
factors
that
may
cause
such forward-looking statements to differ materially from actual results, please
refer to CSFL’s most recent Form 10-Q and Form 10-K filed with the Securities
Exchange Commission.
CSFL undertakes no obligation to release revisions to these forward-looking
statements or reflect events or circumstances after the date of this presentation.
Forward Looking Statement
2
2 |
 Company Overview
Ernest S. Pinner
Chairman & CEO |
 Correspondent
Banking Market As of 6/30/14
•
Headquartered in Davenport, FL
$3.9 billion in assets ($3.7 billion)
$2.4 billion in loans
$3.3 billion in deposits ($3.1 billion)
•
Company formed: June 2000
1 Subsidiary Bank
68 Branch banking offices (58 branches)
Correspondent Banking Segment
Corporate Overview
4 |
 Florida
Trends 5
Source: U.S. Census Bureau and Bureau of Labor Statistics |
 6
Source:
Florida
Realtors
Monthly
Market
Detail
(May
2014)
–
Single
Family
Homes
Florida Real Estate –
Single Family Homes
6
2010
2011
2012
2013
2010
2011
2012
2013 |
 2
nd
Quarter
Financial
Summary
James J. Antal
Chief Financial Officer |
 8
2
nd
Quarter Summary of Financial Results
2Q14
1Q14
EPS
$0.03
$0.03
Operating EPS
$0.11
$0.13
•
1Q –
Gulfstream merger expenses
–
Efficiency initiatives
one time charges
•
2Q –
FSB merger expenses
•
TBV increases $0.73 per share
•
First Southern TBV accretion (6.3%)
•
Sold 5 branches and approx. $200M
deposits of acquired branches
•
10 of 17 FSB branches to be sold or
closed –
Sept 2014
•
FSB income effect –
3Q, 4Q
•
Correspondent & Capital Markets
revenue up 30%
Current Qtr take-aways |
 9
NIM Summary
1. Interest bearing deposits. Does not include non-interest bearing checking
accounts. 9
2Q14
1Q14
Average
Avg
Average
Avg
Balance
Rate
Balance
Rate
Loans
$1,723,242
4.77%
$1,513,060
4.75%
PCI loans
285,270
11.57%
251,587
13.27%
Securities
610,925
2.84%
532,046
3.04%
Fed funds sold and other
284,895
0.60%
197,915
0.49%
Total interest earning assets
$2,904,332
4.62%
$2,494,608
4.91%
Interest
bearing
deposits
1
$1,882,384
0.32%
$1,653,806
0.33%
All other
102,671
1.08%
94,340
1.08%
Total interest bearing liabilities
$1,985,055
0.37%
$1,748,146
0.37%
Net Interest Margin
4.37%
4.65% |
 10
10
ALLL –
excluding PCI Loans
Loan Balance
ALLL
Loans (Fas 5)
$1,240,084
$16,383
1.32%
Gulfstream loans
299,823
---
---
First Southern loans
474,979
---
---
Impaired Loans (Fas 114)
27,263
1,857
6.81%
Total Non-PCI Loans
$2,042,149
$18,240
0.89%
1.20%
1.40%
1.60%
1.80%
2.00%
2Q13
3Q13
4Q13
1Q14
2Q14
1.86%
1.57%
1.47%
1.39%
1.32%
0.70%
0.90%
1.10%
1.30%
1.50%
1.70%
1.90%
2Q13
3Q13
4Q13
1Q14
2Q14
1.85%
1.58%
1.58%
1.21%
0.89%
FAS 5 Component
(excluding Gulfstream and First Southern)
Total ALLL (excluding PCI loans)
as of June 30, 2014 |
 11
Relationship between PCI loans and FDIC indemnification asset (IA)
11
PCI Loans –
Average Yields
IA Amortization Expense
At 6/30/14 remaining projected IA to be amortized ($32M)
2Q14
Yield on PCI loans, ex FSB
12.30%
Yield on FSB PCI loans
7.10%
Yield on PCI loans
11.57%
Yield on Covered PCI loans, ex FSB
12.83%
12.03%
14.17%
13.00%
13.27%
11.57%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2Q13*
3Q13*
4Q13
1Q14
2Q14
$2.2
$3.3
$3.8
$4.5
$5.2
$5.0
$0.0
$2.0
$4.0
$6.0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
$8.7
$9.4
$6.3
$2.6
$2.0
$1.7
$1.1
$0.4
$0.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
6 mos
2014
2015
2016
2017
2018
2019
2020
2021
2022 |
 John C.
Corbett Executive Vice President &
CEO of Subsidiary Bank
Consolidation
and Integration |
 18
CSFL –
Best Positioned Florida Consolidator
Source: SNL Financial
Data as of MRQ available
13
Ocala National Bank (Jan 2009)
Olde Cypress Community Bank (July 2010)
Independent National Bank of Ocala (Aug 2010)
Community National Bank of Bartow (Aug 2010)
Central Florida State Bank (Jan 2012)
First Guaranty Bank & Trust Co. (Jan 2012)
Federal Trust Acquisition
from
The Hartford Insurance Company (Nov 2011)
TD Bank divesture in Putnam (Jan 2011)
Gulfstream Business Bank in Stuart (Jan 2014)
First Southern Bancorp (June 2014)
> $1.0 bn & Public
5 Banks
> $1.0 bn & Private
15 Banks
$500 mm -
$1.0 bn
19 Banks
$250 -
$500 mm
42 Banks
< $250 mm
88 Banks
FDIC Acquisitions
Non-FDIC Acquisitions |
 Gulfstream
Business Bank – Closed January 17, 2014
Offices:
4
Assets:
$585 million
Deposits:
$479 million
Loans:
$360 million
(1) At acquisition date
Gulfstream (4 branches)
CSFL (55 branches)
14
Port St. Lucie
Stuart
Jupiter
Delray Beach
Lake
Okeechobee
Vero Beach
Fort Pierce
Jacksonville
Orlando
Winter Haven
West Palm Beach
Tampa
(1)
Gulfstream
Highlights |
 (1)
At acquisition date
First
Southern
Highlights
(1)
Offices:
17
Assets:
$1,055 million
Deposits:
$856 million
Loans:
$600 million
First Southern Bancorp, Inc. –
Closed June 1, 2014
15
2Q14 Announcements
•
Sale of 5 branches (6 branches including
leased office) and $200 million deposits –
expected to close in Sept 2014
•
10 of the 17 branches acquired from FSB
expected to close in Sept 2014 through
consolidation or closure |
 16
Efficiency Initiatives –
announced January 2014
Total fully phased-in expense
reduction –
$6 million annually
Branch closures –
$2.7 million annually
Other restructuring and expense
reductions –
$3.3 million annually
8 branch closings in April 2014 |
 17
Loan Origination
Loan Production by Quarter
Loan Pipeline
$175
$150
$114
$140
$238
$0
$50
$100
$150
$200
$250
2Q13
3Q13
4Q13
1Q14
2Q14
$84
$82
$69
$59
$79
$106
$114
$84
$77
$99
$20
$50
$80
$110
2Q13
3Q13
4Q13
1Q14
2Q14
Funded loans
Total Loan Production |
 Value of
core deposits not fully realized in this low rate environment.
Approximately 142,668 total accounts -
$23,200 average balance per account
Approximately $186,000 of deposits
held for sale (under contract to close in
Sept. 2014)
Core deposits defined as non-time deposits.
Total Deposits
Number of Deposit Accounts (000’s)
Building Franchise Value with Core Deposits
Cost of Deposits
18
0.7
0.2
0.6
1.0
0.2
$0.0
$1.4
$2.1
$2.8
$3.5
2009
2010
2011
2012
2013
6/30/14
Time Deposits
MMDA
Savings
NOW
DDA
Deposit HFS
31%
18%
16%
7%
23%
5%
0.5
12
15
15
14
11
13
55
79
97
107
109
126
4
0
20
40
60
80
100
120
140
2009
2010
2011
2012
2013
6/30/14
Core Deposits
Time Deposits
Deposits HFS
0.27%
0.25%
0.24%
0.22%
0.22%
0.20%
0.22%
0.24%
0.26%
0.28%
2Q13
3Q13
4Q13
1Q14
2Q14
$0.7 |
 •
Real core deposit base –
25 year history
•
Intent focus on organic loan growth
•
Florida on the rebound
•
Growing TBV –
First Southern a jump start
•
Created a $3.9 billion Florida-based community bank
with scarcity value.
Summary
19 |
 Appendix |
 Appendix –
Loan Portfolio |
 Loan
Type No. of
Loans
Balance
Avg Loan
Balance
Residential Real
Estate
5,272
$ 563 MM
$106,800
CRE-Owner
Occupied
1,067
$ 428 MM
$401,100
CRE-Non Owner
Occupied
917
$ 664 MM
$724,100
Construction,
A&D, & Land
501
$ 78 MM
$155,700
Commercial &
Industrial
2,017
$ 252 MM
$124,900
Consumer & All
Other
3,016
$ 57 MM
$18,900
Total
12,790
$ 2,042 MM
$159,700
Total Loan Portfolio
Excluding purchased credit-impaired loans
22
as of June 30, 2014
Residential
Real Estate
28%
Comm RE -
Owner
Occupied
21%
Comm RE -
Non Owner
Occupied
32%
Construction,
A&D, & Land
4%
Commercial &
Industrial
12%
Consumer /
Other
3%
Total Loans by Type
Total Loans Detail |
 Loans, excluding
PCI loans Yields (TEY)
Average Balances
23
NPAs / Loans & OREO (%)
Source: SNL Financial, MRQ presented if current quarter not yet available
Nonperforming assets include loans 90 days or more past due, nonaccrual loans, and
OREO/ORA; and exclude FDIC covered assets Southeastern peers include ABCB, PNFP, RNST,
SCBT, UBSH and UCBI. Florida peers include all banks headquartered in Florida with total
assets between $500 million and $5 billion. $1,153
$1,193
$1,230
$1,513
$1,723
$1,000
$1,200
$1,400
$1,600
$1,800
2Q13
3Q13
4Q13
1Q14
2Q14
4.84%
4.70%
4.64%
4.75%
4.77%
4.50%
4.60%
4.70%
4.80%
4.90%
2Q13
3Q13
4Q13
1Q14
2Q14
2.04
2.68
5.18
0.00
2.00
4.00
6.00
8.00
10.00
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
CSFL
Southeastern Peers
Florida Peers |
 24
ALLL
–
PCI
loans
as
of
June
30,
2014
24
FDIC
Not
Total
% of
Covered
Covered
PCI Loans
Legal Bal
Legal Balance
$394,804
$59,298
$454,102
100%
Discount Balance
(86,873)
(13,359)
(100,232)
(22%)
Book Value
$307,931
$45,939
$353,870
78%
ALLL
(960)
---
(960)
Total, net of ALLL
$306,971
$45,939
$352,910 |
 25
25
FDIC
Indemnification
Asset
as
of
June
30,
2014
$32M
FDIC
Reimbursement
Write-Off
$40M
Collect from Borrower
(or sale of OREO)
Written off over the lesser of the remaining expected life of the related loan pool(s) or the
remaining term of the related loss share agreement(s).
Amortization
of
Indemnification
Asset
($32M)
$29M
Expected reimbursements from FDIC for 80% of expected losses
$32M
Previously expected reimbursements for previously expected losses no longer expected
$61M
Total indemnification assets
$8.7
$9.4
$6.3
$2.6
$2.0
$1.7
$1.1
$0.4
$0.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
6 mos
2014
2015
2016
2017
2018
2019
2020
2021
2022 |
 Appendix –
Deposit Portfolio |
 Total
Deposits by Type Total Deposits Detail
23
Total
Deposit
Portfolio
as
of
June
30,
2014
Deposit Type
No. of
Deposits
Balance
Avg Deposit
Balance
Demand
Deposits
49,397
$ 1,023 MM
$20,700
Now Accounts
52,083
$ 590 MM
$11,300
Savings
Deposits
16,928
$ 234 MM
$13,900
Money Market
7,392
$ 748 MM
$101,100
Certificates of
Deposits
12,734
$ 526 MM
$41,300
Deposits HFS
4,134
$ 186 MM
$44,900
Total
142,668
$ 3,307 MM
$23,200
27
Demand
Deposits
31%
NOW
Accounts
18%
Savings
7%
Money
23%
Certificates of
Deposits
16%
Deposits
HFS
5%
Accounts
Market |
 Appendix
–
Profitablity Metrics |
 EPS
– 6 years
Profitability Metrics
29
EPS & Operating EPS -
5 quarters
$0.09
$0.10
$0.06
$0.03
$0.03
$0.07
$0.11
$0.07
$0.13
$0.11
$0.00
$0.04
$0.08
$0.12
$0.16
2Q13
3Q13
4Q14
1Q14
2Q14
$0.26
($0.47)
($0.22)
$0.26
$0.33
$0.41
($0.60)
($0.40)
($0.20)
$0.00
$0.20
$0.40
$0.60
2008
2009
2010
2011
2012
2013 |
 10
Efficiency Ratio
Operating Efficiencies
*
Efficiency
Ratio
is
defined
as
follows:
[non-interest
expense
–
intangible
amortization
–
credit
related
expenses
–
merger
related
expenses
–
other
nonrecurring
expense]
/
[net
interest
income
(fully
tax
equivalent)
+
non-interest
income
–
gain
on
sale
of
AFS
securities
–
FDIC
indemnification
revenue
–
nonrecurring
income]
**Efficiency
Ratio,
excluding
Correspondent
Banking
is
defined
as
follows:
[non-interest
expense
–
Correspondent
Banking
non-
interest
expense
–
intangible
amortization
–
credit
related
expenses
–
merger
related
expenses
–
other
nonrecurring
expense]
/
[net
interest
income
(fully
tax
equivalent)
–
Correspondent
Banking
net
interest
income
+
non-interest
income
–
Correspondent
Banking
non-interest
income
–
gain
on
sale
of
AFS
securities
–
FDIC
indemnification
revenue
–
nonrecurring
income]
30
76%
78%
78%
81%
75%
75%
73%
74%
73%
75%
71%
73%
65%
70%
75%
80%
85%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Efficiency Ratio*
Efficiency ratio, excluding Correspondent Banking** |
 1.
Assumes 8% capital allocation.
†
Data presented on an annualized basis. Non-interest expense, ROA and ROE are based
on direct expenses and exclude corporate overhead allocations.
Correspondent Banking Income Analysis
31
Correspondent Earnings Ratios
2009
2010
2011
2012
2013
1Q14
2Q14
ROE
38.06%
59.07%
33.14%
58.80%
15.99%
4.72%
15.54%
ROA
3.04%
4.73%
2.65%
4.70%
1.28%
0.38%
1.24%
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2009
2010
2011
2012
2013
1Q14†
2Q14†
Net Capital Mkt Revenue
International
Clearing/Fed Funds
BA / SK
Asset Liability
Net Interest Income
Total Non
Interest Expense
1 |
 |