CenterState Bank Corp - FORM 8-K - EX-99.2 - INVESTOR PRESENTATION

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8-K - FORM 8-K - CenterState Bank Corp	d665565d8k.htm
EX-99.1 - PRESS RELEASE - CenterState Bank Corp	d665565dex991.htm

Acquisition of

First Southern

Bancorp, Inc.

January 29, 2014

Exhibit 99.2

Disclosure Statement

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.

Transaction Rationale

Strategic

Rationale

•

Leverages CenterState’s current in-market leadership and infrastructure

•

Moves CenterState to the #2 Florida-based bank by deposit market share in

the Orlando MSA

•

Natural extension of Gulfstream acquisition along Florida’s East coast

•

Attractive high-growth and wealthy markets

•

Immediate tangible book value accretion

•

Significant EPS accretion

•

High teens internal rate of return

•

Accelerates profitability/efficiency metrics

•

Strong pro forma capital ratios

Low Risk

Profile

•

Predominantly in-market transaction with current market leadership in place

•

Thorough due diligence (82% of loans and 100% of OREO)

•

First Southern’s loss share agreements transfer

•

CenterState is an experienced acquiror with an experienced credit review team

Attractive

Financial

Returns

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:

Assets:

$4.0 billion

Deposits:

$3.4 billion

Loans:

$2.5 billion

Branch overlap consolidation

•

Merging 6 branches

•

Closing 4 branches

•

Represents

12%

FSOF

DDA

(2)

Significant Orlando and Jacksonville

MSA market share

South Florida extension

Pro Forma Highlights

(1)

CSFL Branches

CSFL & FSOF Branches

FSOF Branches

Strengthens Presence in Key Markets

Florida

June '13

Total

Market

Deposits

Rank

Institutions

($mm)

(%)

EverBank Financial

13,743

3.19

BankUnited Inc.

8,754

2.03

Bond Street Holdings Inc.

3,594

0.83

Pro Forma

3,328

0.77

Ocean Bankshares Inc.

2,956

0.69

CenterState Banks

2,464

0.57

Capital City Bank Group Inc.

1,757

0.41

Seacoast Banking Corp. of FL

1,741

0.40

Capital Bank Finl Corp

1,680

0.39

1st United Bancorp Inc.

1,485

0.34

Stonegate Bank

1,404

0.33

First Southern Bancorp Inc.

864

0.20

Totals

431,204

100.00

Orlando MSA

June '13

Total

Market

Deposits

Rank

Institutions

($mm)

(%)

Old Florida Bancshares Inc.

1,071

2.83

Pro Forma

595

1.57

Three Shores Bancorp. Inc.

497

1.31

Villages Bancorp. Inc.

475

1.25

CNLBancshares Inc.

464

1.22

CenterState Banks

339

0.89

UniSouth Inc.

326

0.86

HomeBancorp Inc.

321

0.85

BANKshares Inc.

294

0.78

First Southern Bancorp Inc.

257

0.68

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

largest Florida-based bank

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

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

(1)

Per CSFL Management (pro forma for Gulfstream merger)

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%

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

loans

$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

Cost Savings Assumptions

Source: CSFL Management, FSOF Management

Cost

2013

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

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

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

Concluding Thoughts

Complements our existing franchise and leadership teams

Financially beneficial to our shareholders with minimal risk

Immediately accretive to tangible book value and operating earnings

per share

Significant Orlando MSA presence with natural South Florida extension

Creates a $4 billion asset Florida-based community bank

Appendix

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 –

Company Highlights

Total

Assets

$1,093

million

Gross

Loans

$635

million

Total

Deposits

$883

million

Financial Highlights

•

West

Palm

Beach

–

Fort

Lauderdale

MSA

•

Orlando MSA

•

Jacksonville MSA

•

Headquarters in Boca Raton, FL

•

Branches in:

Pro Forma Loan Composition

(1)

Pro forma for Gulfstream acquisition excluding purchase accounting adjustments

(2)

Excludes purchase accounting adjustments

Source: CSFL Management, FSOF Management

CSFL Loan Composition

FSOF Loan Composition

Pro Forma Loan Composition

MRQ CSFL Yield on Loans: 5.79%

MRQ FSOF Yield on Loans: 5.41%

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

Pro Forma Deposit Composition

(1)

Pro forma for Gulfstream acquisition excluding purchase accounting adjustments

(2)

Excludes purchase accounting adjustments

Source: CSFL Management, FSOF Management

MRQ CSFL Cost of Deposits: 0.26%

CSFL Deposit Composition

FSOF Deposit Composition

MRQ FSOF Cost of Deposits: 0.47%

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

Non

Interest

Bearing

DDA

32%

NOW,

Money

Market,

and

Savings

49%

Time

Deposits

19%

Non

Interest

Bearing

DDA

23%

NOW,

Money

Market,

and

Savings

49%

Time

Deposits

28%

Non

Interest

Bearing

DDA

30%

NOW,

Money

Market,

and

Savings

49%

Time

Deposits

21%

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)

Note:

CSFL

pro

forma

for

Gulfstream

acquisition;

data

deposit

weighted

county

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

Median

HHI

Growth

(1)

Projected 2017 Median HHI

CSFL (52 branches)

FSOF (17 branches)

Investor Contacts

Ernie Pinner

Chairman & Chief Executive Officer

John Corbett

Executive Vice President /

Bank –

President & Chief Executive Officer

Jim Antal

Senior Vice President & Chief Financial Officer

Steve Young

Treasurer /

Bank –

Chief Operating Officer

Holding

Company

Headquarters

Davenport,

–

(863)

419-7775

Bank

Headquarters

Winter

Haven,

–

(863)

294-6383

CenterState Bank Corp - FORM 8-K - EX-99.2 - INVESTOR PRESENTATION - January 29, 2014

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CenterState Bank Corp Reports