Attached files
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| 8-K - FORM 8-K - Park Sterling Corp | c20579e8vk.htm |
Exhibit 99.1
| KBW Community Bank Investor Conference August 2-3, 2011 |
| Disclosures Forward Looking StatementsThis presentation contains, and Park Sterling and its management may make, certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words such as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," "goal," "target" and similar expressions. These forward-looking statements express management's current expectations, plans or forecasts of future events, results and condition, including expectations regarding the proposed merger with Community Capital Corporation ("Community Capital"), the general business strategy of engaging in bank mergers, organic growth and anticipated asset size, anticipated loan growth, refinement of the loan loss allowance methodology, recruiting of key leadership positions, decreases in construction and development loans and other changes in loan mix, changes in deposit mix, capital and liquidity levels, emerging regulatory expectations and measures, net interest income, credit trends and conditions, including loan losses, allowance, charge-offs, delinquency trends and nonperforming loan and asset levels, residential sales activity and other similar matters. These statements are not guarantees of future results or performance and by their nature involve certain risks and uncertainties that are based on management's beliefs and assumptions and on the information available to management at the time that these disclosures were prepared. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed in any of Park Sterling's filings with the SEC: failure of Community Capital's shareholders to approve the merger; failure to realize synergies and other financial benefits from the proposed merger within the expected time frame; increases in expected costs or difficulties related to integration of the Community Capital merger; inability to identify and successfully negotiate and complete additional combinations with potential merger partners or to successfully integrate such businesses into Park Sterling, including the company's ability to realize the benefits and cost savings from and limit any unexpected liabilities acquired as a result of any such business combination; the effects of negative economic conditions, including stress in the commercial real estate markets or delay or failure of recovery in the residential real estate markets; changes in consumer and investor confidence and the related impact on financial markets and institutions; changes in interest rates; failure of assumptions underlying the establishment of our allowance; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in our investment securities portfolio; legal and regulatory developments; increased competition from both banks and nonbanks; changes in accounting standards, rules and interpretations, inaccurate estimates or assumptions in accounting and the impact on Park Sterling's financial statements; Park Sterling's ability to attract new employees; and management's ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk. Forward-looking statements speak only as of the date they are made, and Park Sterling undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. Additional InformationCertain financial measures contained herein represent non-GAAP financial measures. For more information about these non-GAAP financial measures and the presentation of the most directly comparable financial measures calculated in accordance with GAAP and accompanying reconciliations, see the appendix in this presentation. In connection with the proposed merger between Park Sterling and Community Capital Corporation ("Community Capital"), Park Sterling has filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 that includes a preliminary Proxy Statement of Community Capital that also constitutes a Prospectus of Park Sterling, as well as other relevant documents concerning the proposed transaction. Once the Registration Statement is declared effective by the SEC, Community Capital will mail a definitive Proxy Statement/Prospectus to its shareholders. Shareholders are strongly urged to read the Registration Statement and the preliminary Proxy Statement/Prospectus regarding the proposed merger filed with the SEC, and other relevant documents that will be filed with the SEC, as well as any amendments or supplements to those documents (including the definitive Proxy Statement/Prospectus) as they become available, because they will contain important information regarding the proposed merger. A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Park Sterling and Community Capital, may be obtained after their filing at the SEC's Internet site (http://www.sec.gov). In addition, free copies of documents filed with the SEC may be obtained on the respective websites of Park Sterling and Community Capital at www.parksterlingbank.com and www.capitalbanksc.com. This communication does not constitute an offer to buy, or a solicitation to sell, shares of any security or the solicitation of any proxies from the shareholders of Park Sterling or Community Capital. Park Sterling and Community Capital and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Community Capital's shareholders in connection with the proposed merger. Information about the directors and executive officers of Park Sterling and Community Capital and information about other persons who may be deemed participants in this solicitation will be included in the Proxy Statement/Prospectus. Information about Park Sterling's executive officers and directors can be found in Park Sterling's definitive proxy statement in connection with its 2011 Annual Meeting of Shareholders filed with the SEC on April 12, 2011. Information about Community Capital's executive officers and directors can be found in Community Capital's Amendment No.1 to its Annual Report on Form 10-K/A filed with the SEC on April 26, 2011. 2 |
| Overview of Park Sterling 3 Business Highlights Formed in October 2006Largest de novo raise in NC history ($45 million)Experienced community and regional teamScalable Jack Henry Silverlake(r) platformPre-IPOGrew to $488 million in total assetsProfitable in fifth full quarter of operationsFDIC bid-eligible institutionInitial Public OfferingRaised gross proceeds of $150.2 millionSupplemented executive management teamReconstituted board of directorsEmbarked on regional growth strategyPost-IPOEnhancing governance and infrastructureRefining allowance methodology Reducing high risk exposuresAdvancing organic growth strategyAdvancing acquisition growth strategy (Unaudited, except 2010Q4 balance sheet; $ in thousands.) |
| Five Unique Characteristics 4 Vision Capital Structure Leadership Charleston Columbia Greenville/ Spartanburg Wilmington Charlotte Research Triangle Greensboro Richmond Hampton Roads Market Opportunity Strategy |
| Vision 5 Vision Capital Structure Leadership Market Opportunity Strategy Create an $8-10 billion regional bankFocused on Virginia and the CarolinasDiversified by geography and lines of businessCharacterized by a return to soundness, profitability and growthNoted for exceptional risk management, market management, relationship management and client service |
| Strategy 6 Vision Capital Structure Leadership Market Opportunity Strategy Focus on markets that are known well to managementUtilize community banking model successfully executed by teamPursue parallel, complimentary growth initiativesPursue M&A opportunities to acquire core deposits, product capabilities and clientsOpen de novo offices and recruit experienced in-market talent to accelerate organic growthDeliver exceptional client servicesEmbrace highest standards of corporate governance |
| Federal Reserve regulatory approvalState of South Carolina regulatory approvalShareholder approvalsTarget BHC merger closing 2011Q3*Applied for bank charter merger effective 2011Q4** 7 Merger Consummation Functional Area Target Design Line of Business Target Design "Day 1": Ensure core processes effective at close"Day 2": Position resources to support objectives (ongoing) Groups: Operations, IT, Risk Management, Finance, Compliance, Internal Audit, Human Resources "Day 1": Ensure businesses effective at close "Day 2": Position resources to serve customers, grow revenues and leverage new footprint and capabilities (ongoing) Groups: Retail, Commercial, Commercial Real Estate, ABL, Mortgage Banking, Cash Mgmt/ Treasury Services, Online Banking and Wealth Management S-4 Pro Forma Financial Information InProcess In Process (Unaudited, $ in thousands. Pro Forma Source; Park Sterling Corporation S-4 filings.)* Planned Third Quarter closing subject to customary closing conditions including approval by Community Capital shareholders. ** Planned Fourth Quarter closing subject to regulatory approval and BHC merger. Execution: Community Capital Merger |
| 8 Entered market 1st Quarter 2011Full branch office (June 2011)Fully staffed with three bankers, two CSRs, one underwriter Charleston, SC Opened July 2008Full branch officeFully staffed with four bankers, two CSRs Wilmington, NC Entered market 2nd Quarter 2011Loan production office (applying for full branch)Initially staffed with two bankers and one underwriter (anticipate additional hiring in 2011) Research Triangle, NC Opened October 2006Two branch officesFully staffed with thirteen bankers, three CSRs, four underwritersBase for all functional groups Charlotte, NC Entered market 2nd Quarter 2011Loan production office (applying for full branch)Initially staffed with two bankers (anticipate additional hiring in 2011) Greenville/Spartanburg , SC Hired 2nd Quarter 2011New product capabilityInitially staffed with banker, portfolio manager, collateral analyst and underwriter Asset Based Lending Execution: Organic Growth Initiatives New markets highlighted. |
| Leadership 9 Vision Capital Structure Leadership Market Opportunity Strategy Extraordinary leadership for institution of our size and aspirationDeep experience in target marketsComplete breadth of skillsUnusually deep bench for community bankAble to attract and retain exceptional talent |
| Executive Officers and Board James C. CherryChief Executive Officer 10 Bryan F. Kennedy, IIIPresident David L. GainesChief Financial Officer Nancy J. FosterChief Risk Officer Executive Officers 32 years of banking experience including Chief Executive Officer of Mid-Atlantic Banking, President of Virginia Banking, Head of Trust and Investment Management for Wachovia Bank. 30 years of banking experience including President North Carolina, Regions Bank and Executive Vice President, Park Meridian Bank. Helped organize Park Sterling in October 2006. 24 years of banking experience including Chief Risk Officer for Corporate and Investment Banking, Senior VP and Comptroller, and Co-Manager of integration office for Wachovia Corporation. 28 years of banking experience including Chief Risk Officer for CIT Group and Chief Credit Officer of Community Banking Group at LaSalle Bank. Independent Board Leslie M. (Bud) Baker, Jr.Chairman Retired Chairman of Wachovia Corporation. Also served as Chairman, President and Chief Executive Officer as well as President of the North Carolina Bank and Chief Credit Officer. Walter C. AyersDirector Retired President and Chief Executive Officer of the Virginia Bankers Association. Served as member of ABA's Communication Counsel, Government Relations Counsel and others. Larry W. CarrollDirector President and Chief Executive Officer of Carroll Financial Associates, Inc, a registered investment advisory firm. CPA background. Park Sterling organizer in October 2006. Jean E. DavisDirector Retired Executive and Head of Operations, Information Technology and e-Commerce at Wachovia Corporation. Also formerly Head of Human Resources, Head of Retail Banking. Thomas HensonDirector President of Henson-Tomlin Interest, LLC and Senior Managing Director of Southeastern Private Investment Fund. Helped organize Park Sterling in October 2006. M&A attorney by background. Jeffrey KaneDirector Retired Senior vice President in charge of Charlotte office of Federal Reserve Bank of Richmond. Also served as head of Banking Supervision and Regulation. |
| Market Opportunity 11 Vision Capital Structure Leadership Market Opportunity Strategy Attractive long-term economic and demographic characteristicsDearth of traditional regional banks (institutions with $5 to $10 billion in total assets)Large enough for product, geographic, and LOB diversitySmall enough to deliver through in-market relationship managersNatural merger partner for other community banks |
| Charleston Columbia Greenville Spartanburg Wilmington Charlotte Raleigh Greensboro Richmond Norfolk NorthernVirginia Target Market Demographics 12 National Avg.2010 Population 8.0 million (12th) Five Year Projected Growth 4.0% 3.9%2010 Median HHI $61,347 Five Year Projected Growth 14.4% 12.4% National Avg.2010 Population 9.6 million (10th) Five Year Projected Growth 8.3% 3.9%2010 Median HHI $50,887 Five Year Projected Growth 13.3% 12.4% National Avg.2010 Population 4.6 million (24th) Five Year Projected Growth 7.9% 3.9%2010 Median HHI $47,704 Five Year Projected Growth 12.5% 12.4% Source: SNL Financial.Demographic data as of June 30, 2009. Virginia North Carolina South Carolina Charlottesville |
| 13 Total Banks by Asset Size Source: SNL Financial and Company data as of March 31, 2011.(Dollars in thousands) Depository Landscape - NC, SC and VA # Banks: 95Assets: $85.3B # Banks: 273Assets: $144.2B "Sweet Spot" Banks by State "Sweet Spot" Characteristics Substantial opportunity set95 banks, $85.3B in total assetsDistributed across target marketNC - 40%; VA - 36%; SC - 24% Distributed by ownership profilePublic - 77%; Private - 23%Meaningful TARP overhang~ 30% still have outstanding positionsMeaningful asset quality overhang~ 40% still have NPAs/TA > 6.00%Challenging capitalization~ 60% have TCE/TA < 8.00%Depressed market valuations~ 60% trade < 80% TBV (public names) |
| Capital Structure 14 Vision Capital Structure Leadership Market Opportunity Strategy Existing capital for safety, soundness and growthExceptional institutional investor base for sizeLiquid currency for investors and partners |
| Attractive Capital and Market Liquidity 15 Median Trading Volume (Since Park Sterling IPO) Tangible Common Equity / Tangible Assets (%) Leverage Ratio (%) Summary Peer group percentiles include depository institutions headquartered in Virginia and the Carolinas with $750 million to $4 billion in total assets. (Source: SNL) (Unaudited, except 2010Q4 balance sheet; $ in thousands amounts.)Market volume source NASDAQ (August 13, 2010 to July 27, 2011) |
| Conclusions 16 Vision Capital Structure Leadership Market Opportunity Strategy Uniquely positioned ... Right time, right place, right team Creating a strong regional bank in the Carolinas and VirginiaUtilizing an established operating model Operated by a seasoned leadership teamFocused on attractive markets, well known to managementLeveraging existing capitalBuilding on established momentum Merger agreement with Community Capital CorporationNew market initiatives in Charleston, Upstate and Research TriangleNew product initiative with Asset Based Lending |
| Appendix: Second Quarter Highlights 17 Financial Results (Unaudited, except 2010Q4 balance sheet; $ in thousands, except per share amounts) Improving Risk Profile |
| 18 Appendix: Reconciliation of Non-GAAP Measures (1) (Unaudited; $ in thousands) (1) Tangible assets, tangible common equity, tangible book value and related ratios, as used throughout this presentation, are non-GAAP financial measures. "Tangible assets" equals period end total assets less intangible assets. "Tangible common equity" equals period end common shareholders' equity less intangible assets. "Tangible book value per share" equals period end tangible common equity divided by period end dilutive common shares issued and outstanding. Special Note As contemplated during equity raise, Park Sterling awarded certain performance-based restricted shares to officers and directors following formation of bank holding companyThese 568,260 shares vest one- third each when stock price per share reaches the following performance thresholds for 30 consecutive trading days125% of offer price ($8.13)140% of offer price ($9.10)160% of offer price ($10.40)These anti-dilutive restricted shares are issued (and thereby have voting rights), but are not included in EPS or TBV per share calculations until they vest (and thereby have economic rights) |