EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

FOR IMMEDIATE RELEASE

January 29, 2010

CenterState Banks, Inc. Announces

Fourth Quarter 2009 Operating Results

DAVENPORT, FL. – January 29, 2010 - CenterState Banks, Inc. (NASDAQ: CSFL) reported a net loss for the fourth quarter 2009 of $4,027,000 ($0.16 per share), which included a loan loss provision of $9,386,000, other OREO (“repossessed real estate”) and credit related costs of $1,583,000, an impairment charge of $939,000 related to land the Company was holding for future expansion and a core deposit intangible impairment charge of $1,200,000.

A summary of the fourth quarter highlights are as follows:

 

  •  

strong capital position – the Company has a Tier 1 Leverage Capital ratio of 11.4% and a Tangible Common Equity ratio of 11.3%, one of the strongest capitalized publicly traded community banks in Florida

 

  •  

strong and growing earnings excluding credit costs – pre-tax pre-provision and credit cost earnings (see table and notes below) was $6,451,000 during the current quarter compared to $5,749,000 during the previous quarter, and compared to $2,926,000 during the same quarter last year

 

  •  

the Company’s correspondent banking division (a reportable segment) continues to add incremental revenue – it reported $7,119,000 of gross commissions from bond sales during the quarter ($17,916,000 for the year) – the reportable segment contributed approximately $1,606,000 of after tax earnings during the current quarter

 

  •  

credit metrics – the Company’s non performing loans (“NPL”) ratio increased to 4.42% from 3.12% reported in the previous quarter, the non performing assets (“NPA”) ratio also increased to 3.05% from 2.20%, and the allowance for loan losses as a percentage of total loans increased to 2.43% compared to last quarter’s 1.85%. Allowance for loan losses as a percentage of NPLs was 55% which was comparable to last quarter’s 59% and an increase compared to the 45% reported in the second quarter.

 

  •  

net interest margin (“NIM”) compressed 15 basis points (“bps”) to 3.27% compared to 3.42% reported during the previous quarter. Although the Company’s average cost of interest bearing liabilities decreased 10bps during the current quarter, it was not enough to completely offset the 25bps decrease in the yield on average interest earnings assets. The yields on both loans and investments decreased. The Company’s loans were affected by the increase in non accruals and the investments were affected by the $71,899,000 of securities available for sale which were sold during the current quarter resulting in a gain of $1,538,000.

 

  •  

Core deposit intangible (“CDI”) impairment – the Company recorded a $1,200,000 impairment charge during the quarter relating to core deposits acquired pursuant to a March 2006 bank acquisition. The acquired deposits decayed significantly faster than originally contemplated in 2006. The Company does not expect any material impairment with the remaining deposits relating to this 2006 acquisition as well as any of the other intangibles currently included in the Company’s consolidated balance sheet.

 

  •  

Impairment of excess bank property – the Company has several parcels of property which have been made available for sale. Current accounting rules require the Company to record real estate held for sale at the lower of cost or market. Based on appraisals received during the current quarter, the Company marked the properties to fair market value, and recorded a charge of approximately $939,000.

 

4

  •  

FDIC assisted transactions – the Company is continuing to monitor FDIC assisted bank acquisition opportunities and expects to bid on one or more targeted institutions within Florida which the Company anticipates that the FDIC will eventually place on their bid list, although there is no assurance that any Company bid would be accepted.

All per share data is presented herein on a diluted basis, unless otherwise stated. Quarterly condensed consolidated income statements (unaudited) are shown below for the periods indicated.

 

Quarterly Condensed Consolidated Statements of Operations (unaudited)
Amounts in thousands of dollars (except per share data)

                               

For the quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Interest income

    $ 18,144      $ 18,847      $ 18,906      $ 18,047      $ 16,429   

Interest expense

      4,659        5,022        6,054        6,555        6,364   
                                        

Net interest income

      13,485        13,825        12,852        11,492        10,065   

Provision for loan losses

      (9,386 )      (8,682 )      (4,125 )      (1,703 )      (2,637 ) 
                                        

Net interest income after loan loss provision

      4,099        5,143        8,727        9,789        7,428   

Commission from bond sales

      7,119        5,630        2,610        2,557        1,412   

Gain on sale of securities available for sale

      1,538        257        303        418        426   

All other non interest income

      2,792        2,649        2,204        1,975        1,934   

Credit related expenses

      (1,583 )      (1,051 )      (1,058 )      (861 )      (445 ) 

Impairment of Core Deposit Intangible

      (1,200 )      —          —          —          —     

Impairment of bank real estate

      (939 )      —          —          —          —     

All other non interest expense

      (18,483 )      (16,612 )      (14,087 )      (12,840 )      (10,911 ) 
                                        

(Loss) income before income tax

      (6,657 )      (3,984 )      (1,301 )      1,038        (156 ) 

Income tax benefit (expense)

      2,630        1,754        569        (266 )      237   
                                        

NET (LOSS) INCOME

    $ (4,027 )    $ (2,230 )    $ (732 )    $ 772      $ 81   
                                        

Net (loss) income available to common shareholders

    $ (4,027 )    $ (3,569 )    $ (1,129 )    $ 376      $ (86 ) 
                                        

(Loss) earnings per share (basic)

    $ (0.16 )    $ (0.17 )    $ (0.09 )    $ 0.03      $ (0.01 ) 

(Loss) earnings per share (diluted)

    $ (0.16 )    $ (0.17 )    $ (0.09 )    $ 0.03      $ (0.01 ) 

Average common shares outstanding (basic)

      25,773,229        20,713,017        12,481,504        12,475,432        12,464,933   

Average common shares outstanding (diluted)

      25,773,229        20,713,017        12,481,504        12,575,424        12,617,383   

Common shares outstanding at period end

      25,773,229        25,773,229        12,481,719        12,481,019        12,474,315   

PTPP earnings (note 1)

    $ 6,451      $ 5,749      $ 3,882      $ 3,602      $ 2,926   

PTPP earnings per share (diluted) (note 2)

    $ 0.25      $ 0.28      $ 0.31      $ 0.29      $ 0 .23   

 

Note 1:   Pre-tax pre-provision earnings (“PTPP”) means income (loss) before income tax excluding provision for loan losses. In addition to excluding the provision for loan losses, the Company also excluded other credit related costs including losses on repossessed real estate and other assets, and other foreclosure related expenses of $1,583, $1,051, $1,058, $861 and $445 for 4Q09, 3Q09, 2Q09, 1Q09 and 4Q08, respectively. It also excludes the impairment charge on core deposit intangibles of $1,200 and bank real estate held for sale of $939 recognized during the fourth quarter of 2009.
Note 2:   PTPP earnings per share means, PTPP as defined in note 1 above divided by the average number of diluted common shares outstanding. This calculation does not include the effect of preferred dividends and related accretion resulting from the preferred stock issued pursuant to TARP which the Company redeemed on September 30, 2009.

 

5

Selected financial ratios (unaudited)

                               

As of or for the quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Return on average assets (annualized)

      (0.89 )%      (0.50 )%      (0.16 )%      0.19 %      0.03 % 

Return on average equity (annualized)

      (7.40 )%      (4.11 )%      (1.64 )%      1.74 %      0.19 % 

Yield on average loans (note 1)

      5.79 %      5.93 %      5.71 %      5.91 %      6.21 % 

Yield on average investments (note 1)

      2.59 %      2.96 %      3.22 %      3.50 %      4.12 % 

Yield on average interest earning assets

      4.35 %      4.60 %      4.56 %      4.90 %      5.67 % 

Yield on average interest earning assets (note 1)

      4.39 %      4.65 %      4.60 %      4.94 %      5.73 % 

Cost of average interest bearing deposits

      1.63 %      1.77 %      2.06 %      2.38 %      2.70 % 

Cost of average borrowings

      0.49 %      0.51 %      0.55 %      0.89 %      2.02 % 

Cost of average interest bearing liabilities (note 2)

      1.38 %      1.48 %      1.69 %      2.10 %      2.61 % 

Net interest margin (tax equivalent basis)

      3.27 %      3.42 %      3.14 %      3.16 %      3.54 % 

Loan / deposit ratio

      73.5 %      75.4 %      75.6 %      68.8 %      89.8 % 

Stockholders equity (to total assets)

      13.1 %      13.2 %      10.4 %      10.0 %      13.4 % 

Common tangible equity (to total tangible assets)

      11.3 %      11.4 %      6.9 %      6.6 %      9.2 % 

Tier 1 capital (to average assets)

      11.4 %      11.7 %      8.5 %      9.5 %      12.6 % 

Efficiency ratio

      88 %      79 %      84 %      83 %      82 % 

Common equity per common share

    $ 8.90      $ 9.14      $ 12.24      $ 12.33      $ 12.22   

Common tangible equity per common share

    $ 7.53      $ 7.72      $ 9.29      $ 9.32      $ 9.64   

 

Note 1:   Tax equivalent basis.
Note 2:   Does not include non interest bearing checking accounts.

Loan portfolio mix, credit quality and allowance for loan losses

Management continues to aggressively monitor credit risk and potential losses in the Company’s loan portfolio in light of the current real estate environment in Florida. During the current quarter, the Company took a charge of $9,386,000 to loan loss provision (expense) and charged-off (net of recoveries) $3,650,000, or 0.39% of average loans outstanding during the quarter (1.56% on an annualized basis). The Company’s allowance for loan losses was $23,289,000 at December 31, 2009 compared to $17,553,000 at September 30, 2009, an increase of $5,736,000 ($9,386,000 charge to loan loss expense less $3,650,000 net charge-offs equals $5,736,000 loan loss allowance increase during the fourth quarter 2009). This increase is the result of a $2,861,000 increase in our general loan loss allowance plus a $2,875,000 increase in our specific loan loss allowance. The increase in our general allowance is primarily due to changes in our historical charge-off rates, changes in our current environmental factors, changes in the loan portfolio mix, and the increase in our loan portfolio. Our specific allowance is the result of specific allowance analyses prepared for each of our impaired loans.

The allowance for loan losses as a percentage of loans outstanding was 2.43% as of December 31, 2009 compared to 1.85% as of September 30, 2009. Management believes the Company’s allowance for loan losses was adequate at December 31, 2009. However, management recognizes that many factors can adversely impact various segments of the Company’s market and customers, and therefore there is no assurance as to the amount of losses or probable losses which may develop in the future. The table below summarizes the changes in allowance for loan losses during the previous five quarters.

 

6

Allowance for loan losses (unaudited)

(amounts are in thousands $)

                               

as of or for the quarter ending

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Allowance at beginning of period

    $ 17,553      $ 16,409      $ 13,472      $ 13,335      $ 12,269   

Charge-offs

      (3,724 )      (7,554 )      (1,208 )      (1,597 )      (1,587 ) 

Recoveries

      74        16        20        31        16   
                                        

Net charge-offs

      (3,650 )      (7,538 )      (1,188 )      (1,566 )      (1,571 ) 

Provision for loan losses

      9,386        8,682        4,125        1,703        2,637   
                                        

Allowance at end of period

    $ 23,289      $ 17,553      $ 16,409      $ 13,472      $ 13,335   
                                        

Eighty-four percent (84%) of the Company’s loans are collateralized by real estate, 10% are commercial non real estate loans and the remaining 6% are consumer and other non real estate loans. The table below summarizes the Company’s loan mix over the most recent five quarter ends.

 

Loan mix (in thousands of dollars)

                               

At quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Real estate loans

           

Residential

    $ 251,634      $ 253,363      $ 260,060      $ 240,184      $ 223,290   

Commercial

      438,540        426,025        407,511        423,930        434,488   

Construction, development and land loans - (note 1)

      115,937        124,306        112,975        93,186        92,475   
                                        

Total real estate loans

      806,111        803,694        780,546        757,300        750,253   

Commercial

      98,273        88,116        89,889        91,403        80,523   

Consumer and other loans

      55,376        56,268        56,584        54,248        61,939   
                                        

Total loans before unearned fees and costs

      959,760        948,078        927,019        902,951        892,715   

Unearned fees and costs

      (739 )      (775 )      (748 )      (699 )      (714 ) 
                                        

Total loans

    $ 959,021      $ 947,303      $ 926,271      $ 902,252      $ 892,001   
                                        

 

note 1:   The increase in this category during the second quarter 2009 was due to several reclassifications from commercial real estate to land and land development loans at several of the Company’s banks and the increase during the third quarter 2009 was due to reclassifications of singly family lot loans from residential real estate to land and land development loans at one of the Company’s subsidiary banks.

The Company defines non performing loans as non accrual loans plus loans past due 90 days or more and still accruing interest. Non performing loans as a percentage of total loans were 4.42% at December 31, 2009 compared to 3.12% at September 30, 2009.

Non performing assets (which the Company defines as non performing loans, as defined above, plus (a) OREO (i.e. real estate acquired through foreclosure, in-substance foreclosure, or deed in lieu of foreclosure); and (b) other repossessed assets that are not real estate), were $53,452,000 at December 31, 2009, compared to $39,319,000 at September 30, 2009. Non performing assets as a percentage of total assets were 3.05% at December 31, 2009 compared to 2.20% at September 30, 2009.

 

7

The table below summarizes selected credit quality data for the periods indicated.

 

Selected credit quality ratios, dollars are in thousands (unaudited)

                               

As of or for the quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Non accrual loans

    $ 42,059      $ 29,519      $ 34,772      $ 20,819      $ 19,863   

Past due loans 90 days or more And still accruing interest

      282        27        1,752        1,304        50   
                                        

Total non performing loans (“NPLs”)

      42,341        29,546        36,524        22,123        19,913   

Other real estate owned (OREO)

      10,196        8,983        7,012        11,903        4,494   

Repossessed assets other than real estate

      915        790        776        416        428   
                                        

Total non performing assets (“NPAs”)

    $ 53,452      $ 39,319      $ 44,312      $ 34,442      $ 24,835   

Non performing loans as a percentage of total loans

      4.42 %      3.12 %      3.94 %      2.45 %      2.23 % 

Non performing assets as a percentage of total assets

      3.05 %      2.20 %      2.57 %      1.91 %      1.86 % 

Net charge-offs (recoveries)

    $ 3,650      $ 7,538      $ 1,188      $ 1,566      $ 1,571   

Net charge-offs as a percentage of average loans for the period

      0.39 %      0.82 %      0.13 %      0.18 %      0.18 % 

Net charge-offs as a percentage of average loans for the period on an annualized basis

      1.56 %      3.28 %      0.52 %      0.72 %      0.72 % 

Loans past due between 30 and 89 days and accruing interest as a percentage of total loans

      1.28 %      1.34 %      1.03 %      1.59 %      2.12 % 

Allowance for loan losses as percentage of NPLs

      55 %      59 %      45 %      61 %      67 % 

Trouble debt restructure (“TDRs”) note 1

    $ 26,499      $ 25,094      $ 18,564      $ 12,421      $ —     

Impaired loans that were not TDRs

      52,449        31,853        21,903        10,444        24,191   
                                        

Total impaired loans

    $ 78,948      $ 56,947      $ 40,467      $ 22,865      $ 24,191   

Total non impaired loans

      880,073        890,356        885,804        879,387        867,810   
                                        

Total loans

    $ 959,021      $ 947,303      $ 926,271      $ 902,252      $ 892,001   

Allowance for loan losses as a percentage of period end loans:

           

Impaired loans

      5.84 %      3.05 %      7.58 %      5.69 %      7.44 % 

Non impaired loans

      2.12 %      1.78 %      1.51 %      1.38 %      1.33 % 
                                        

Total loans

      2.43 %      1.85 %      1.77 %      1.49 %      1.49 % 

Note 1: In this current real estate crisis that the Nation in general and Florida in particular has been experiencing, it has become more common to restructure or modify the terms of certain loans under certain conditions (i.e. troubled debt restructure or “TDRs”). In those circumstances it may be beneficial to restructure the terms of a loan and work with the borrower for the benefit of both parties, versus forcing the property into foreclosure and having to dispose of it in an unfavorable and depressed real estate market. When we have modified the terms of a loan, we usually reduce the monthly payment for generally about twelve months. We have approximately $26,499 of TDRs. Of this amount $14,517 are performing pursuant to their modified terms, and $11,982 are not performing and have been placed on non accrual status and included in our non performing loans (“NPLs”). Current accounting standards require TDRs to be included in our impaired loans, whether they are performing or not performing. Only non performing TDRs are included in our NPLs.

 

8

As shown in the table above, the largest component of non performing loans is non accrual loans. As of December 31, 2009 the Company had reported total of 171 non accrual loans with an aggregate book value of $42,059,000, compared to September 30, 2009 when 123 non accrual loans with an aggregate book value of $29,519,000 were reported. The increase occurred primarily in residential real estate (net increase of 27 loans and $3,916,000) and commercial real estate (net increase of 12 loans and $7,911,000). This amount is further delineated by collateral category and number of loans in the table below (in thousands of dollars).

 

Collateral category

    Total amount
in thousands
of dollars		    Percentage
of total
non accrual
loans		     Number of
non accrual
loans in
category

Residential real estate loans

    $ 9,508    22 %    64

Commercial real estate loans

      21,178    50 %    43

Construction, development and land loans

      10,735    26 %    42

Non real estate commercial loans

      424    1 %    10

Non real estate consumer and other loans

      214    1 %    12
                 

Total non accrual loans at September 30, 2009

    $ 42,059    100 %    171
                 

There are no construction or development loans with national builders. The Company has historically done business with local builders and developers that have typically been long time customers. As indicated above, non accrual construction, acquisition and development, and land loans totaled $10,735,000 at December 31, 2009. Of this amount, approximately 15% is construction and the remaining 85% is developed lots and other land. The largest loan in this category is $2,250,000, which is collateralized by single family residential building lots. There are no other non accrual loans in the category in excess of $1,000,000. The Company believes that this is the loan category where the most risk is present. The category represents only 12% of the total loan portfolio, yet 26% of total non accrual loans are in this category. During the current quarter, the Company has charged off, net of recoveries, approximately $962,000 of the loans in this category. During the year ending December 31, 2009, the Company had total net charge offs, net of recoveries, of $13,345,000. Almost half ($6,401,000) came from this category.

The second largest component in non performing assets after non accrual loans is repossessed real estate, or OREO. OREO is carried at the lower of cost or market. Further declines in real estate values can affect the market value of these assets. Any further decline in market value beyond its cost basis is recorded as a current expense in the Company’s Statement of Operations. At December 31, 2009 OREO was $10,196,000, which is further delineated in the table below (in thousands of dollars).

 

Description of repossessed real estate

    estimated
market value
at Dec 31, 2009

21 single family homes

    $ 2,654

7 mobile homes with land

      276

10 commercial buildings

      3,283

Mixed (5 duplexes/ 1 single fam/ 3 vac lots)

      225

58 residential building lots

      1,927

Vacant land / various acreages

      1,693

Commercial lot

      138
      

Total

    $ 10,196

 

9

Deposit activity

During the current quarter, total deposits increased by $48,788,000, or 3.9%. Time deposits decreased by $14,970,000, or 2.6%, and non time deposits (i.e., core deposits) increased by $63,758,000, or 9.5%. With the purchase of an Ocala bank’s deposits from the FDIC in January 2009 and the correspondent banking activity, the Company believes it has excess liquidity, and has no incentive to aggressively price rate sensitive time deposits. Management continues to believe that core deposits and the number of customer relationships is the value of the franchise, and continues to incentivize employees to grow these accounts and relationships.

 

Deposit mix (in thousands of dollars)

                               

At quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Checking accounts

           

Non interest bearing

    $ 233,688      $ 218,509      $ 200,875      $ 209,906      $ 141,229   

Interest bearing

      193,527        168,486        170,574        160,227        143,510   

Savings deposits

      148,915        132,589        116,922        109,194        84,837   

Money market accounts

      158,598        151,386        148,422        152,736        137,530   

Time deposits

      570,308        585,278        588,012        679,621        486,694   
                                        

Total deposits

    $ 1,305,036      $ 1,256,248      $ 1,224,805      $ 1,311,684      $ 993,800   
                                        

Non time deposits as percentage of total deposits

      56 %      53 %      52 %      48 %      51 % 

Time deposits as percentage of total deposits

      44 %      47 %      48 %      52 %      49 % 
                                        

Total deposits

      100 %      100 %      100 %      100 %      100 % 
                                        

Presented below are condensed consolidated balance sheets and average balance sheets for the periods indicated.

 

Condensed Consolidated Balance Sheets (unaudited)                               

Amounts in thousands of dollars

                               

At quarter ended:

    12/31/2009     9/30/2009     6/30/2009     3/31/2009     12/31/2008  

Cash and due from banks

    $ 19,139      $ 23,081      $ 23,096      $ 27,693      $ 19,702   

Fed funds sold and Fed Res Bank deposits

      173,268        168,190        82,356        108,073        57,850   

Trading securities

      —          3,431        —          —          —     

Investments securities, available for sale

      463,186        508,290        549,870        617,790        252,080   

Loans

      959,021        947,303        926,271        902,252        892,001   

Allowance for loan losses

      (23,289 )      (17,553 )      (16,409 )      (13,472 )      (13,335 ) 

Premises and equipment, net

      62,368        64,716        63,135        64,401        61,343   

Goodwill

      32,840        32,840        32,840        33,377        28,118   

Core deposit intangible

      2,422        3,818        4,015        4,216        3,948   

Bank owned life insurance

      15,665        15,514        15,358        10,209        10,115   

Other assets

      46,679        34,193        42,333        49,485        21,321   
                                        

TOTAL ASSETS

    $ 1,751,299      $ 1,783,823      $ 1,722,865      $ 1,802,024      $ 1,333,143   
                                        

Deposits

    $ 1,305,036      $ 1,256,248      $ 1,224,805      $ 1,311,684      $ 993,800   

Federal funds purchased

      144,939        218,273        221,659        209,973        88,976   

Other borrowings

      63,062        62,828        82,300        72,356        64,707   

Other liabilities

      8,852        10,965        14,392        27,230        6,495   

Preferred stockholders equity

      —          —          26,879        26,830        26,787   

Common stockholders equity

      229,410        235,509        152,830        153,951        152,378   
                                        

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $ 1,751,299      $ 1,783,823      $ 1,722,865      $ 1,802,024      $ 1,333,143   
                                        

 

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Condensed Consolidated Average Balance Sheets (unaudited)                               

Amounts in thousands of dollars

                               

At quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Investments, fed funds, and other

    $ 723,519      $ 703,799      $ 743,683      $ 600,384      $ 262,666   

Loans

      931,681        921,405        920,434        894,676        889,367   

Allowance for loan losses

      (17,249 )      (15,785 )      (13,910 )      (13,188 )      (12,914 ) 

All other assets

      153,932        163,697        168,546        153,880        147,961   
                                        

TOTAL ASSETS

    $ 1,791,883      $ 1,773,116      $ 1,818,753      $ 1,635,752      $ 1,287,080   
                                        

Deposits- interest bearing

    $ 1,048,364      $ 1,036,896      $ 1,082,911      $ 1,029,330      $ 846,550   

Deposits- non interest bearing

      222,056        203,982        180,774        176,900        143,385   

Other borrowings

      293,729        311,972        352,673        237,386        122,620   

Other liabilities

      11,909        5,031        21,177        11,814        6,253   

Stockholders equity

      215,825        215,235        181,218        180,322        168,272   
                                        

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $ 1,791,883      $ 1,773,116      $ 1,818,753      $ 1,635,752      $ 1,287,080   
                                        

Non interest income and non interest expense

The table below summarizes the Company’s non interest income for the periods indicated.

 

Quarterly Condensed Consolidated Non Interest Income (unaudited)                         

Amounts in thousands of dollars

                         

For the quarter ended:

    12/31/09    9/30/09    6/30/09    3/31/09    12/31/08

Service charges on deposit accounts

    $ 1,612    $ 1,405    $ 1,300    $ 1,133    $ 1,255

Commissions from bond sales

      7,119      5,630      2,610      2,557      1,412

Commissions from mortgage broker activities

      39      30      52      8      30

Commissions from sale of mutual funds and annuities

      106      130      103      193      76

Debit card and ATM fees

      365      344      352      280      269

Loan related fees

      136      103      125      88      108

BOLI income

      152      156      148      94      95

Trading securities revenue

      115      312      —        —        —  

Gain on sale of securities available for sale

      1,538      257      303      418      426

Other service charges and fees

      267      169      124      179      101
                                  

Total non interest income

    $ 11,449    $ 8,536    $ 5,117    $ 4,950    $ 3,772

The revenue category “commissions from bond sales” listed in the table above is new for the Company beginning in the fourth quarter of 2008. This revenue source is related to the Company’s new correspondent banking division initiated in the fourth quarter of 2008 and expanded during the third quarter of 2009 with the addition of the team hired from the failed Silverton Bank in Atlanta, Georgia. This division, as well as the Ocala banking offices acquisition from the FDIC (January 30, 2009), is also the reason for the increase in “employee salaries and wages” category listed in our non interest expense table below, as well as various other non interest expense categories.

The revenue category “trading securities revenue” listed in the table above is new for the Company beginning in the third quarter of 2009. During July of 2009, the Company initiated a small trading securities portfolio at its lead subsidiary bank. Realized and unrealized gains and losses are included in trading securities revenue.

 

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We sold approximately $71,899,000 of securities available for sale during the forth quarter of 2009, recognizing a gain on sale of $1,538,000. All of these securities sales occurred at our lead subsidiary bank. The sales were a result of liquidity management and asset/liability management.

The table below summarizes the Company’s non interest expense for the periods indicated.

 

Quarterly Condensed Consolidated Non Interest Expense (unaudited)                               

Amounts in thousands of dollars

                               

For the quarter ended:

    12/31/09     9/30/09     6/30/09     3/31/09     12/31/08  

Employee salaries and wages

    $ 9,444      $ 8,496      $ 6,085      $ 5,879      $ 4,946   

Employee incentive/bonus compensation

      907        548        365        408        (29 ) 

Employee stock option and stock grant expense

      104        99        112        104        102   

Deferred compensation expense

      55        55        55        55        137   

Health insurance and other employee benefits

      776        367        346        393        383   

Payroll taxes

      450        451        389        440        325   

Other employee related expenses

      244        267        266        230        230   

Incremental direct cost of loan origination

      (170 )      (190 )      (197 )      (163 )      (192 ) 
                                        

Total salaries, wages and employee benefits

    $ 11,810      $ 10,093      $ 7,421      $ 7,346      $ 5,902   

Occupancy expense

      1,390        1,408        1,368        1,209        993   

Depreciation of premises and equipment

      722        728        681        751        778   

Supplies, stationary and printing

      218        210        233        187        206   

Marketing expenses

      560        464        444        442        447   

Data processing expenses

      642        621        607        547        261   

Legal, auditing and other professional fees

      815        602        488        449        342   

Bank regulatory related expenses

      660        612        1,349        493        579   

Postage and delivery

      102        113        110        100        99   

ATM and debit card related expenses

      290        264        284        222        190   

Amortization of CDI

      196        197        201        198        189   

CDI impairment

      1,200        —          —          —          —     

Excess bank property held for sale impairment

      939        —          —          —          —     

Loss on sale of repossessed real estate (“OREO”)

      308        175        209        80        29   

Valuation write down of repossessed real estate (“OREO”)

      801        482        511        394        219   

Loss on repossessed assets other than real estate

      100        176        54        214        48   

Foreclosure and repossession related expenses

      374        218        284        173        149   

Internet and telephone banking

      140        111        136        111        100   

Operational write-offs and losses

      63        85        44        33        105   

Correspondent account and Federal Reserve charges

      67        83        92        77        65   

Conferences, seminars, education and training

      98        122        81        92        37   

Director fees

      73        87        84        88        92   

Other expenses

      637        812        464        495        526   
                                        

Total non interest expense

    $ 22,205      $ 17,663      $ 15,145      $ 13,701      $ 11,356   

About CenterState Banks, Inc.

The Company is a multi bank holding company which operates through four wholly owned subsidiary banks with 38 locations in ten counties throughout Central Florida. The Company’s stock is listed on the NASDAQ Global Select Market under the symbol CSFL. Request for information regarding the purchase or sale of the common stock can be obtained from Troy Carlson, at Keefe, Bruyette &

 

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Woods (800-221-3246), Chris Cerniglia, at Stifel Nicolaus (866-780-7926), Michael Acampora, at Raymond James (800-363-9652), or Dudley Stephens, at Burke Capital Markets (404-446-1800). For additional information contact Ernest S. Pinner, CEO, or James J. Antal, CFO, at 863-419-7750.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

Some of the statements in this report constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These statements related to future events, other future financial performance or business strategies, and may be identified by terminology such as “may,” “will,” “should,” “expects,” “scheduled,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “potential,” or “continue” or the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should specifically consider the factors described throughout this report. We cannot assure you that future results, levels of activity, performance or goals will be achieved.

 

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