KBW Boston Bank Conference February 26, 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 |
Correspondent Banking Market Pro forma for Gulfstream acquisition • Headquartered in Davenport, FL $3.0 billion in assets $1.9 billion in loans $2.5 billion in deposits • Company formed: June 2000 1 Subsidiary Bank Corporate Overview 4 |
18 CSFL – Best Positioned Florida Consolidator Source: SNL Financial Data as of MRQ available 5 Federal Trust Acquisition from The Hartford Insurance Company TD Bank divesture in Putnam Gulfstream Business Bank in Stuart First Southern Bancorp Ocala National Bank Olde Cypress Community Bank Independent National Bank of Ocala Community National Bank of Bartow Central Florida State Bank First Guaranty Bank & Trust Co. |
6 Source: Florida Realtors Monthly Market Detail (December 2013) – Single Family Homes Florida Real Estate – Single Family Homes 6 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 $190K $180K $170K $160K $150K $140K $130K $120K $110K 230,000 210,000 190,000 170,000 150,000 130,000 110,000 90,000 70,000 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D |
4 th Quarter Financial Summary |
8 4 th Quarter Summary of Financial Results 4Q 2013 3Q 2013 EPS $0.06 $0.10 • Lower loan loss provision $183 vs. ($1,273) • Higher IA amortization • Lower bond sales • Loan growth • Resilient NIM • 4.65% vs. 4.96% • Covered loan performance • Potential future ALLL release • Valuable core deposit franchise • Credit metrics continue to improve Current Qtr take-aways |
9 Non-Covered Loan Growth Loan Production by Quarter • Current Qtr annualized growth 9.3% • YTD annualized growth 9.4% • Avg yld funded loans 4.25% • 35% Resi • 28% CRE • 26% C&I • 11% all other • Loan pipeline: End of 4Q13: $114M End of 3Q13: $124M End of 2Q13: $150M End of 1Q13: $175M Current Quarter Loan Production |
Net Income Profitability Metrics – 6 Years 10 Net Interest Margin |
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] 11 |
12 Efficiency and Enhanced Profitability Initiatives |
Loan Portfolio |
Total Loans by Type Total Loans Detail Loan Type No. of Loans Balance Avg Loan Balance Residential Real Estate 3,798 $ 458 MM $120,600 CRE-Owner Occupied 743 $ 276 MM $371,500 CRE-Non Owner Occupied 531 $ 253 MM $476,500 Construction, A&D, & Land 438 $ 63 MM $143,800 Commercial & Industrial 1,344 $ 143 MM $106,400 Consumer & All Other 2,982 $ 51 MM $17,100 Total 9,836 $ 1,244 MM $126,500 Total Loan Portfolio as of December 31, 2013 Excluding FDIC covered assets 14 |
Non-Covered Loans Non-Covered Loans - Average Yields, FTE Non-Covered Loans – Average Balances New Loan Production New Loan Production – Average Yields ^ Adjusted for accelerated accretion related to noncovered ASC 310-10 loans 15 |
Covered Loans – Average Yields* Covered Loans – Average Balances* Covered Loans 16 * Adjusted for measurement period adjustment. ** Excluding accelerated accretion related to ASC 310-10 loans |
17 17 FDIC Indemnification Asset as of December 31, 2013 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). |
18 Indemnification Asset (“IA”) amortization and its relationship with FDIC covered loan interest income accretion 18 Interest Income and Amortization Expense Yields on Covered Loans and Indemnification Asset 8 Quarter Average = 4.93% |
Credit Trends 19 NPAs / Loans & OREO (%) NPA Inflows Source: SNL Financial 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. |
20 20 ALLL – Non-Covered Loans FAS 5 Component Total ALLL – Non-Covered Loans ALLL as a % of NPLs= 73% |
Deposit Portfolio |
Total Deposits by Type Total Deposits Detail 23 Total Deposit Portfolio as of December 31, 2013 Deposit Type No. of Deposits Balance Avg Deposit Balance Demand Deposits 38,188 $ 645 MM $16,900 Now Accounts 50,572 $ 484 MM $9,600 Savings Deposits 17,564 $ 233 MM $13,300 Money Market 3,045 $ 309 MM $101,700 Certificates of Deposits 11,017 $ 385 MM $34,900 Total 120,386 $ 2,056 MM $17,100 22 |
Value of core deposits not fully realized in this low rate environment. Approximately 120,386 total accounts - $17,080 average balance per account Core deposits defined as non-time deposits. Total Deposits Number of Deposit Accounts (000’s) Building Franchise Value with Core Deposits Cost of Deposits 23 |
Acquisition of First Southern Bancorp, Inc. |
25 Overview of Pro Forma Franchise (1) Based on financial data as of December 31, 2013 excluding purchase accounting adjustments; previously announced branch closings are excluded (2) Based on financial data as of November 30, 2013 Source: CSFL Management, FSOF Management Offices: 69 Assets: $4.0 billion Deposits: $3.4 billion Loans: $2.5 billion CSFL Branches CSFL & FSOF Branches FSOF Branches Branch overlap consolidation • Merging 6 branches • Closing 4 branches • Represents 12% of FSOF DDA (2) Significant Orlando and Jacksonville MSA market share South Florida extension |
26 Florida June '13 Total Market Deposits Share Rank Institutions ($mm) (%) 1 EverBank Financial 13,743 3.19 2 BankUnited Inc. 8,754 2.03 3 Bond Street Holdings Inc. 3,594 0.83 Pro Forma 3,328 0.77 4 Ocean Bankshares Inc. 2,956 0.69 5 CenterState Banks 2,464 0.57 6 Capital City Bank Group Inc. 1,757 0.41 7 Seacoast Banking Corp. of FL 1,741 0.40 8 Capital Bank Finl Corp 1,680 0.39 9 1st United Bancorp Inc. 1,485 0.34 10 Stonegate Bank 1,404 0.33 21 First Southern Bancorp Inc. 864 0.20 Totals 431,204 100.00 Orlando MSA June '13 Total Market Deposits Share Rank Institutions ($mm) (%) 1 Old Florida Bancshares Inc. 1,071 2.83 Pro Forma 595 1.57 2 Three Shores Bancorp. Inc. 497 1.31 3 Villages Bancorp. Inc. 475 1.25 4 CNLBancshares Inc. 464 1.22 5 CenterState Banks 339 0.89 6 UniSouth Inc. 326 0.86 7 HomeBancorp Inc. 321 0.85 8 BANKshares Inc. 294 0.78 9 First Southern Bancorp Inc. 257 0.68 10 Citizens Bancorp of Oviedo Inc 202 0.53 Totals 37,888 100.00 Note: Includes banks headquartered in Florida Deposit Data as of June 30, 2013 Source: SNL Financial LLC 4 th largest Florida-based bank 2 nd largest Florida-based bank Strengthens Presence in Key Markets |
27 Summary of Transaction Terms Acquiror: CenterState Banks, Inc. (NASDAQ: CSFL) Target: First Southern Bancorp, Inc. (OTCQB: FSOF) Transaction Value (1) : $189.5 million Consideration Mix (1) (2) : 50% Stock / 50% Cash Consideration Per Share (1) (2) : $6.00 Per Share Consideration: 0.3 shares of CSFL stock and $3.00 cash Price / Tangible Book Value (%) (1) (2) (3) : 96.2% Capital Raise: No additional capital required to complete the transaction Board Seats: None committed Required Approvals: Customary regulatory approval and approval of CSFL and FSOF shareholders Expected Closing: Q3 2014 Note: Financial data as of December 31, 2013 (1) Based on CSFL’s closing price of $10.00 ended January 29, 2014 (2) Based on 31.6 million FSOF fully diluted shares outstanding and full conversion of preferred shares (3) Assumes reversal of deferred tax asset |
28 Immediately Accretive to Tangible Book Value (1.4% Accretive) Low Double-Digit EPS Accretion Fully Phased-In (2015: 10.3% Accretive) High Teens Internal Rate of Return (19.5%) Strong Pro Forma Capital Ratios Transaction Impact Financial Impact Capital Ratios Pro Forma (1) Pro Forma at Close TCE / TA 8.7% 8.5% Tier 1 Leverage 9.5% 9.2% Total Risk-Based Ratio 16.4% 14.8% (1) Per CSFL Management (pro forma for Gulfstream merger) |
29 Transaction Assumptions Cost Savings: • 46% cost savings fully phased-in • $16.0 million in pre-tax savings in 2015 Merger Related Expenses (1) : • $4.6 million after-tax Credit mark (2) : • Gross credit mark to loans of $28.9 million (3) • 10.2% mark on covered loans • 2.5% mark on non-covered loans • Gross credit mark to OREO of $8.1 million • 25% mark to OREO Revenue Synergies: • None assumed Core Deposit Intangible: • 1.25% of transaction accounts amortized at 150% declining balance over 10 years First Southern Preferred Equity: • Assumes conversion of First Southern’s preferred equity into common stock prior to closing (1) CSFL’s merger related expenses assumed to be $4.6 million; total after-tax merger related expenses assumed to be $11.9 million (2) Based on financial data at November 30, 2013 (3) Gross credit mark on book balance |
30 Cost Cost 2013 Savings Savings ($mm) (%) ($mm) Salaries & Benefits $16.2 51% $8.2 Occupancy 4.1 66% 2.7 Professional & Legal 2.2 77% 1.7 Data Processing 2.1 48% 1.0 Credit 4.5 11% 0.5 Other 5.6 34% 1.9 Total Expenses $34.7 46% $16.0 Cost Savings Assumptions |
31 Comprehensive review process for First Southern’s loans and OREO portfolios • Credit team reviewed 82% of the dollar balance of First Southern’s loan portfolio • Completed due diligence on 28 banks since 2008 – all acquired banks are outperforming their initial marks 29% of First Southern’s portfolio is covered by loss share agreements and has already been marked • First Commercial purchased in January 2011 with day 1 mark of 32% • Haven Trust purchased in September 2010 with day 1 mark of 24% • CSFL is marking covered loans 10.2% ($19.3 million) and legacy loans 2.5% ($9.7 million) Diligence Highlights Credit Due Diligence Note: Financial data as of November 30, 2013 Source: CSFL Management, FSOF Management 13.8% 10.6% 9.3% 8.0% 5.2% 2.8% 1.1% 1.0% 0.4% 0.0% 5.0% 10.0% 15.0% Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Non-Covered Portfolio: NPAs / Loans + OREO |
32 First Southern Bancorp, Inc. Highlights Note: Data as of December 31, 2013; capital ratios assume conversion of preferred shares Source: FSOF Management and SNL Financial LLC Founded – 1987 Significant Excess Capital • 16.2% TCE / TA FDIC Acquisitions • Haven Trust Bank Florida • September 2010 • $115 million of loans • Loss Share Tranches: 70% - 0% - 70% • First Commercial Bank of Florida • January 2011 • $467 million of loans • Loss Share Tranches: 70% - 30% - 75% Branches – 17 • Headquarters in Boca Raton, FL • Branches in: • West Palm Beach – Fort Lauderdale MSA • Orlando MSA • Jacksonville MSA Company Highlights Total Assets - $1,093 million Gross Loans - $635 million Total Deposits - $883 million Financial Highlights |
33 Pro Forma Loan Composition (1) Pro forma for Gulfstream acquisition excluding purchase accounting adjustments (2) Excludes purchase accounting adjustments Source: CSFL Management, FSOF Management CRE 45% C&I 14% Resi RE 33% C&D 5% Consumer & Other 3% CSFL Loan Composition MRQ CSFL Yield on Loans: 5.79% CRE 79% C&I 4% Resi RE 12% C&D 5% Consumer & Other 0% FSOF Loan Composition MRQ FSOF Yield on Loans: 5.41% CRE 54% C&I 12% Resi RE 28% C&D 4% Consumer & Other 2% Pro Forma Loan Composition Dollars in thousands For the period ended December 31, 2013 Pro Forma CSFL (1) FSOF Pro Forma (2) Real Estate - Residential $613,500 33.2 % $77,826 12.2 % $691,326 27.8 % Real Estate - Commercial 833,185 45.0 502,095 79.0 1,335,280 53.7 Real Estate - Land, Development, & Construction 83,240 4.5 30,276 4.8 113,516 4.6 Commercial & Industrial 267,740 14.5 24,582 3.9 292,322 11.8 Consumer & Other 52,804 2.9 713 0.1 53,517 2.2 Gross Loans & Leases $1,850,468 100.0 % $635,492 100.0 % $2,485,960 100.0 % |
34 Pro Forma Deposit Composition (1) Pro forma for Gulfstream acquisition excluding purchase accounting adjustments (2) Excludes purchase accounting adjustments Source: CSFL Management, FSOF Management Non- Interest Bearing DDA 32% NOW, Money Market, and Savings 49% Time Deposits 19% MRQ CSFL Cost of Deposits: 0.26% CSFL Deposit Composition Non- Interest Bearing DDA 23% NOW, Money Market, and Savings 49% Time Deposits 28% FSOF Deposit Composition MRQ FSOF Cost of Deposits: 0.47% Non- Interest Bearing DDA 30% NOW, Money Market, and Savings 49% Time Deposits 21% Pro Forma Deposit Composition Dollars in thousands For the period ended December 31, 2013 Pro Forma CSFL (1) FSOF Pro Forma (2) Non-Interest Bearing DDA $815,590 32.3 % $204,639 23.2 % $1,020,229 29.9 % NOW, Money Market, and Savings 1,240,293 49.1 428,738 48.6 1,669,031 49.0 Time Deposits 469,294 18.6 249,355 28.2 718,649 21.1 Total Deposits $2,525,178 100.0 % $882,732 100.0 % $3,407,910 100.0 % |
35 Improving Market Demographics 17.1% 14.4% 16.4% 10.0% 12.5% 15.0% 17.5% 20.0% CSFL FSOF Pro Forma 3.38% 3.59% 3.44% 3.00% 3.25% 3.50% 3.75% CSFL FSOF Pro Forma Projected Population Growth (1) Projected Median HHI Growth (1) Note: CSFL pro forma for Gulfstream acquisition; data is deposit weighted by county as of June 30, 2013 (1) Projected growth from 2012 – 2017 Source: SNL Financial LLC $50,299 $56,409 $51,887 $45,000 $50,000 $55,000 $60,000 CSFL FSOF Pro Forma Projected 2017 Median HHI CSFL (52 branches) FSOF (17 branches) |