8-K/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment #2)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) April 12, 2012 (January 27, 2012)

CENTERSTATE BANKS, INC.

(Exact name of registrant as specified in its charter)

Florida	000-32017	59-3606741
(State or other jurisdiction of incorporation)	(Commission file number)	(IRS employer identification no.)
42745 U.S. Highway 27, Davenport, FL		33837
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (863) 419-7750

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

On January 30, 2012, CenterState Banks, Inc. (the “Company”) furnished a Current Report on Form 8-K (the “Original Report”) to report that the Company’s wholly owned subsidiary, CenterState Bank of Florida, N.A. (“CenterState”), had acquired substantially all the assets and assumed substantially all the deposits of First Guaranty Bank and Trust of Jacksonville (“FGB”) in Jacksonville, Florida through a purchase and assumption agreement, including loss-sharing (the “P&A Agreement”) with the Federal Deposit Insurance Corporation (“FDIC”) dated as of January 27, 2012. The final carrying values and the final list of the assets acquired and liabilities assumed remains subject to finalization by the FDIC and CenterState. The purchase of FGB’s assets and the assumption of its liabilities was effective on January 27, 2012.

On February 2, 2012, the Company furnished a Current Report on Form 8-K/A (the “First Amendment”) which amended and supplemented the disclosures provided in the Original Report. The Company reported that it anticipated it would further amend the Original Report and the First Amendment at a later date to the extent additional financial information is required by Item 9.01.

This Current Report on Form 8-K/A (the “Amendment #2”) amends and supplements the disclosures provided in Item 2.01 and 9.01 of the Original Report and the First Amendment. Except as otherwise provided herein, the other disclosures made in the Original Report and the First Amendment remain unchanged. The Company does not anticipate that it will further amend this Current Report.

Statements made in this Amendment, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the Company’s expectations concerning its financial condition, operating results, cash flows, liquidity and capital resources, including the effects of the FGB acquisition and the final determination of the assets and liabilities acquired and their respective valuations. A discussion of risks, uncertainties and other factors that could cause actual results to differ materially from management’s expectations is set forth under the captions “Business - Note about Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2.01 Completion of Acquisition or Disposition of Assets

The following discussion of assets acquired and liabilities assumed are presented at estimated fair value on the date of the P&A Agreement. The fair values of the assets acquired and liabilities assumed were determined as described in Note 3 to the Company’s statement of assets acquired and liabilities assumed, dated January 27, 2012, and the accompanying notes thereto, which is attached hereto as Exhibit 99.1 and incorporated herein by reference (the “Audited Statement”). These fair value estimates are based on the information available, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. CenterState and the FDIC are engaged in on-going discussions that may impact the assets acquired and liabilities assumed and/or the purchase price. In addition, the tax treatment of FDIC assisted acquisitions is complex and subject to interpretations that may result in future adjustments of deferred taxes as of the acquisition date. The disclosure set forth in this Item 2.01 reflects the status of these items to the best of management’s knowledge as of April 12, 2012.

2

The FGB acquisition consisted of assets with a fair value of approximately $363.7 million, including $172.9 million of loans, $15.3 million of repossessed real estate (“OREO”), $3.5 million of investment securities, $77.6 million of cash and cash equivalents, excluding the $0.5 million cash payment received from the FDIC pursuant to the terms of the P&A Agreement, $78.1 million related to the FDIC’s indemnification of the Company against certain future losses described below and $16.3 million of other assets which included $8.7 million of goodwill, $1.6 million in Trust intangible and $1.5 million in core deposit intangibles. Liabilities with a fair value of approximately $363.7 million were assumed, including $353.1 million of deposits, $10.1 million of FHLB advances and $0.5 million of other liabilities.

The Company also entered into loss sharing agreements with the FDIC that collectively cover legal unpaid principal balances of approximately $263.4 million of loans which include single family residential mortgage loans, commercial real estate loans, other commercial loans, construction/development/land loans and approximately $27.0 million of OREO (collectively, the “Covered Assets”). Management has estimated the fair value of the covered loans to approximate $171.9 million, and the estimated fair value of the OREO to approximate $15.3 million.

Pursuant to the terms of the loss sharing agreements, the FDIC’s obligation to reimburse the Company for losses with respect to Covered Assets begins with the first dollar of loss incurred. The FDIC will reimburse the Company for 80% of losses with respect to the Covered Assets. The Company will reimburse the FDIC for its share of recoveries with respect to losses for which the FDIC paid the Company a reimbursement under the loss sharing agreements. Certain other assets of FGB were acquired by the Company that are not covered by loss sharing agreements with the FDIC. These assets include $3.5 million of marketable securities purchased at fair market value, consumer loans with a fair value of $1.0 million at acquisition date, and other tangible assets.

The loss sharing agreements applicable to single family residential mortgage loans provide for FDIC loss sharing and Company reimbursement to the FDIC for recoveries for ten years. The loss sharing agreement applicable to commercial loans and other Covered Assets provides for FDIC loss sharing for five years and Company reimbursement to the FDIC for a total of eight years for recoveries.

The loss sharing agreements are subject to certain servicing procedures as specified in an agreement with the FDIC. The fair value of the loss sharing agreements was recorded as an indemnification asset at an estimated fair value of $78.1 million on the acquisition date.

The foregoing summary of the P&A Agreement, including the loss sharing agreements, is not complete and is qualified in its entirety by reference to the full text of the P&A Agreement and certain other exhibits attached to the P&A Agreement, which are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

Discussion

As set forth in Item 2.01 above, on January 27, 2012, the Company acquired certain assets and assumed substantially all of the deposits and liabilities of FGB pursuant to the P&A Agreement. A narrative description of the anticipated effects of the FGB acquisition (the “Acquisition”) on the Company’s financial condition, liquidity, capital resources and operating results is presented below. This discussion should be read in conjunction with the historical financial statements and the related notes of the Company, which have been filed with the Securities and Exchange Commission (the “Commission”) and the Audited Statement, which is attached hereto as Exhibit 99.1.

3

The Acquisition increased the Company’s total assets and total deposits by approximately 15.9% and 18.4%, respectively, as compared with the balances at December 31, 2011, and is expected to positively affect the Company’s operating results, to the extent the Company earns more from interest earned on its interest earning assets than it pays in interest on its interest bearing liabilities. The ability of the Company to successfully collect interest and principal on loans acquired and collect reimbursement from the FDIC on the related indemnification asset will also impact cash flows and operating results.

The Company estimated the acquisition-date fair value of the acquired assets and assumed liabilities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (ASC Topic 805) and ASC Topic 820, Fair Value Measurements. However, the amount that the Company realizes on these assets could differ materially from the carrying value reflected in the attached Audited Statement primarily as a result of changes in the timing and amount of collections on the acquired loans in future periods. Because of the loss sharing agreements with the FDIC on these assets, as described in Item 2.01 above, the Company does not expect to incur significant losses. To the extent the actual value realized for the acquired loans differ from the estimated amounts, the indemnification asset will generally be impacted in an offsetting manner due to the loss sharing support from the FDIC.

Financial Condition

In the Acquisition, the Company purchased $172.9 million of loans at fair value, net of $91.8 million, or 34.7%, estimated discount to the outstanding principal balance, representing approximately 13.5% of the Company’s total loans at December 31, 2011. The Company acquired $77.6 million in cash and cash equivalents, $15.3 million in OREO at fair value, and $3.5 million of marketable securities at fair value.

The following table presents information with respect to the fair value of certain acquired earning assets and loans, as well as their legal unpaid principal balance (“Book Balance”) at acquisition date, contractual term and average contractual yield.

Schedule of Earning Assets Acquired – January 27, 2012

in thousands of dollars:	FGB book balance		fair value		average months to maturity			average contractual interest rate			effective interest rate
Federal Home Loan Bank deposits	$	10,541	$	10,541		—			0.01	%		0.01	%
Federal Reserve Bank deposits	$	62,327	$	62,327		—			0.25	%		0.25	%
Investment securities		3,500		3,500		152	*		3.34	%*		3.34	%*
Loans:
Single family residential real estate		73,896		58,428		163			4.69	%		4.25	%
Commercial real estate		161,178		104,321		83			6.17	%		5.49	%
Construction, development and land		22,386		4,321		40			5.91	%		4.92	%
Commercial loans		5,930		4,879		53			5.75	%		5.31	%
Consumer and other loans		1,369		961		32			5.92	%		5.92	%
Total loans		264,759		172,910		101			5.73	%		5.06	%
Total earning assets	$	341,127	$	249,278

* There are two securities, one for $1,000 and the other is $2,500. Both are callable. The $1,000 was called on it’s February 24 call date. The $2,500 security is a step-up bond which is callable on a quarterly basis. The interest rate will increase to 3.5% at August 24, 2016, then to 4% at August 24, 2020, then 5% at August 24, 2023, then 6% at August 24, 2025 which remains fixed until its August 24, 2026 maturity date. The Company expects this bond to be called before maturity.

4

The following table reflects the scheduled maturities of the acquired loans at fair value at January 27, 2012:

in thousands of dollars:	single family residential real estate		commercial real estate		construction, development and land		commercial		consumer		total loans
Contractual maturities:
1 year or less	$	1,374	$	—	$	—	$	—	$	51	$	1,425
1 - 5 years		7,164		56,620		3,703		3,685		842		72,014
After 5 years		50,098		49,308		700		1,198		68		101,372
Total	$	58,636	$	105,928	$	4,403	$	4,883	$	961	$	174,811
Rate sensitivity:
Fixed	$	5,330	$	44,669	$	2,845	$	1,732	$	522	$	55,098
Variable		53,306		61,259		1,558		3,151		439		119,713
Total	$	58,636	$	105,928	$	4,403	$	4,883	$	961	$	174,811

In the Acquisition, the Company assumed $353.1 million in deposits at estimated fair value. The amount represents approximately 18.4% of the Company’s total deposits of $1,919.8 million at December 31, 2011. Demand and savings deposit accounts make up $80.2 million of these assumed deposits.

In its assumption of the deposit liabilities, the Company believed that the core deposits have an intangible value. The Company applied ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. The Company determined the estimated fair value of the core deposit intangible asset totaled $1.5 million, which will be amortized utilizing an accelerated amortization method over an estimated economic life not to exceed ten years. In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.

Included in its acquisition of FGB, the Company acquired the servicing of approximately $140 million of assets under Trust. The Company believed that these Trust assets have an intangible value. The Company applied ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets, in a business combination. The Company determined the estimated fair value of the Trust servicing assets totaled $1.6 million, which will be amortized utilizing an accelerated amortization method over an estimated economic life not to exceed ten years. In determining the valuation amount, the Company considered expected customer attrition rates, servicing revenue and the net maintenance cost attributable to customer Trust accounts.

Future amortization of these two intangible assets over the estimated life will decrease results of operations, net of any potential tax effect. Since amortization is a non cash item, it will have no effect upon future liquidity and cash flows. For the calculation of regulatory capital, these intangible assets are disallowed and are a reduction to equity capital. The Company expects that disallowing these intangible assets should not materially adversely affect the Company’s or CenterState’s regulatory capital ratios.

5

These intangible assets are subject to significant estimates by management of the Company related to the value and the life of the assets. These estimates could change over time. The Company will review the valuation of these assets periodically to ensure that no impairment has occurred. If any impairment is subsequently determined, the Company will record the impairment as an expense in its consolidated statement of operations.

In connection with the FGB acquisition, the fair value of the net liabilities assumed exceeded the payment received from the FDIC. Accordingly, goodwill of approximately $8,745,000 was recorded as a result of the acquisition. Goodwill is not an amortizable asset. The Company will review the valuation of this intangible asset periodically, no less than annually, for impairment. If any impairment is subsequently determined, the Company will record the impairment as an expense in its consolidated statement of operations.

Non performing loans

The Company acquired performing and non performing loans. The loans acquired included non accrual loans and loans past due greater than 90 days and accruing interest as listed below.

in thousands of dollars:	FGB book balance
Non accrual loans	$	89,841
Loans past due 90 days or more and still accruing interest		2,149
Total	$	91,990

Management identified loans that were either non accrual, past due greater than 60 days, TDRs (Troubled Debt Restructured loans), graded “special mention” or “substandard,” had six or more 30 day past due notices or had any 60 day or 90 day past due notices during the loan’s life to date. These loans have been identified as Type A loans, or loans with one or more specifically identified credit deficiency factor, and the Company is accounting for these loans pursuant to ASC Topic 310-30.

All remaining loans, those without specifically identified credit deficiency factors, or Type B loans, were grouped into pools with common risk characteristics. These loans were then evaluated to determine estimated fair value as of the acquisition date. Although no specific credit deficiencies are readily identifiable, management believes there is an element of risk as to whether all contractual cash flows will be eventually received. Factors that were considered included the poor economic environment both nationally and locally as well as the unfavorable real estate market particularly in Florida. In addition, these loans were acquired from a failed financial institution which implies poor, or at least questionable, underwriting. Based on management’s estimate of fair value, each of these pools was assigned a discount credit mark which reflects expected credit losses. The Company will apply ASC Topic 310-30 accounting treatment by analogy to Type B loans. The result is that all loans acquired from this failed financial institution will be accounted for under ASC Topic 310-30.

6

The table below summarizes those loans with one or more specifically identified credit deficiency factor (“Type A” loans) and all other loans (“Type B” loans), and compares the unpaid legal balance (“FGB Book Balance”) to fair value as of the January 27, 2011 acquisition date:

in thousands of dollars:	FGB book balance		fair value
Loans with one or more specifically identified credit deficiency factor (Type A loans)	$	91,990	$	39,295
All other loans (Type B loans)		172,769		133,615
Total loans	$	264,759	$	172,910

Operating results and cash flows

Management has from time to time become aware of acquisition opportunities and has performed various levels of review related to potential acquisitions in the past. This Acquisition was attractive to the Company for a variety of reasons including the following:

• attractiveness in the pricing of the acquired loan portfolios including the indemnification asset;

• ability to increase the Company’s market share in Duval County, Florida;

• attractiveness of core deposit customer relationships;

• opportunities to enhance income and efficiency due to duplications of effort and decentralized processes as the Company expects to enhance income by centralizing some duties and removing duplications of effort.

Based on these and other factors, including the level of FDIC support related to the acquired loans and OREO, the Company believes that the Acquisition will have a positive impact on its earnings.

The total assets acquired, approximately $363.7 million, represent approximately 15.9% of the Company’s $2,284.5 million of total assets as of December 31, 2011, and total deposits assumed, approximately $353.1 million, represent approximately 18.4% of the Company’s $1,919.8 million of total deposits reported as of December 31, 2011. The Company believes that the transaction will increase net interest income, as the Company expects to earn more from interest on the acquired loans and investments than it pays in interest on the acquired deposits.

The extent to which the Company’s operating results may be adversely affected by the acquired loans is largely offset by the loss sharing agreements and the related discounts reflected in the estimated fair value of these assets at the acquisition date. In accordance with the provisions of ASC Topic 310-30, the fair values of the acquired loans include an estimate of expected credit losses related to these assets. As a result, the Company’s operating results would only be adversely affected by loan losses to the extent that such losses exceed the expected credit losses reflected in the fair value of these assets at the acquisition date.

ASC Topic 310-30 applies to a loan with evidence of deterioration of credit quality since origination, for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. ASC Topic 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition for loans that fall under its scope. As described above under Non performing loans, the Company is accounting for all of the acquired loans pursuant to ASC Topic 310-30.

7

The loss sharing agreements will likely have a material impact on the cash flows and operating results of the Company in both the short-term and the long-term. In the short-term, as stated above, it is likely that there will be a significant amount of the covered assets that will experience deterioration in payment performance or will be determined to have inadequate collateral values to repay the loans. In such instances, the Company will likely no longer receive payments from the borrowers, which will impact cash flows. The loss sharing agreements will not fully offset the financial effects of such a situation. However, if a loan is subsequently charged off or charged down after the Company exhausts its best efforts at collection, the loss sharing agreements will cover 80% of the loss associated with the covered assets.

The long-term effects that the Company may experience will depend primarily on the ability of the borrowers under the various loans covered by the loss sharing agreements to make payments over time. As the loss sharing agreements cover up to a 10 year period (5 years for commercial loans and other assets), changing economic conditions will likely impact the timing of future charge-offs and the resulting reimbursements from the FDIC. The Company believes that any recapture of interest income and recognition of cash flows from the borrowers or received from the FDIC (as part of the FDIC indemnification asset) may be recognized unevenly over this period, as the Company exhausts its collection efforts under its normal practices. In addition, the Company recorded substantial discounts related to the purchase of these covered assets. A portion of these discounts will be accretable to income over the economic life of the loans and will be dependent upon the timing and success of the Company’s collection efforts on the covered assets.

Liquidity and capital resources

The Company acquired $77.6 million of cash and cash equivalents, excluding the $0.5 million payment from the FDIC pursuant to the P&A Agreement, as well as $3.5 million of marketable securities. These additions to the Company’s balance sheet represent additional liquidity. This addition along with the Company’s legacy liquidity position helped fund the subsequent return of the acquired internet time deposits.

Deposits in the amount of $353.1 million were also assumed. Of this amount, 37.5%, or $132.4 million, were in the form of core non time deposits. The time deposits comprised 62.5%, or $220.7 million.

Pursuant to the FDIC purchase and assumption agreement, CenterState has an option to reprice any deposit to current market rates. CenterState subsequently repriced all of the internet time deposits acquired, approximately $127.9 million, to market interest rates (approximately 0.05%), and all of these deposits were withdrawn by the customer. In addition, CenterState also repriced selected retail time deposits, approximately $10.7 million, to current retail market interest rates. If CenterState exercises this option to reprice, the customer as the option to withdraw their time deposit early without penalty.

8

At December 31, 2011 the Company and CenterState were considered “well-capitalized” based on calculations of relevant regulatory ratios. The Company and CenterState had the following capital ratios at December 31, 2011.

	regulatory guideline amounts to be considered			actual at December 31, 2011
	well capitalized			Company			CenterState
Tier 1 leverage ratio		5.0	%		10.5	%		8.4	%
Tier 1 risk base ratio		6.0	%		17.8	%		14.7	%
Total risk base ratio		10.0	%		19.1	%		15.9	%

The acquisition of FGB did not have a material adverse effect on the Company’s regulatory capital ratios. The Company and CenterState remain “well-capitalized” after taking into consideration the results of the FGB transaction.

Financial Statements

Attached hereto as Exhibit 99.1 and incorporated by reference into this Item 9.01(a) is an audited Statement of Assets Acquired and Liabilities Assumed by CenterState Bank of Florida, N.A. (a wholly owned subsidiary of CenterState Banks, Inc.) related to the acquisition of FGB at January 27, 2012 and the accompanying notes thereto.

Report of Independent Registered Public Accounting Firm

Statement of Assets Acquired and Liabilities Assumed at January 27, 2012

Notes to Statement of Assets Acquired and Liabilities Assumed

The Company has omitted certain financial information of FGB required by Rule 3-05 of Regulation S-X and the related pro forma financial information under Article 11 of Regulation S-X in accordance with a request for relief submitted to the Commission in accordance with the guidance provided in Staff Accounting Bulletin 1:K, Financial Statements of Acquired Troubled Financial Institutions (“SAB 1:K”). SAB 1:K provides relief from the requirements of Rule 3-05 in certain instances, such as a transaction where a registrant engages in an acquisition of a significant amount of assets of a troubled financial institution that involves pervasive federal assistance and audited financial statements of the troubled financial institution that are not reasonably available.

(d) Exhibits

2.1	Purchase and Assumption Agreement Whole Bank All Deposits, among the Federal Deposit Insurance Corporation, receiver of First Guaranty Bank and Trust Company of Jacksonville, Jacksonville, Florida, the Federal Deposit Insurance Corporation, and CenterState Bank of Florida, N.A., Winter Haven, Florida, dated as of January 27, 2012 (filed as Exhibit 2.1 to Form 8-K/A on February 2, 2012, and incorporated herein by reference).
23.1	Consent of Crowe Horwath LLP
99.1	Report of Independent Registered Public Accounting Firm Statement of Assets Acquired and Liabilities Assumed at January 27, 2012 Notes to Statement of Assets Acquired and Liabilities Assumed

9

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CENTERSTATE BANKS, INC.
By:	/s/ James J. Antal
	James J. Antal
	Senior Vice President and
	Chief Financial Officer

Date: April 12, 2012

10

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-62704, 333-62706, 333-117591, 333-135257, 333-135258, and 333-135259 on Forms S-8 of CenterState Banks, Inc. of our report dated April 12, 2012, with respect to the statement of assets acquired and liabilities assumed by CenterState Bank of Florida, N.A. (a wholly owned subsidiary of CenterState Banks, Inc.) pursuant to the Purchase and Assumption Agreement dated January 27, 2012, as amended in this Form 8-K/A.

/s/ Crowe Horwath LLP

Crowe Horwath LLP

Fort Lauderdale, Florida

April 12, 2012

EX-99.1

Exhibit 99.1

INDEX OF FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	13
Statement of Assets Acquired and Liabilities Assumed at January 27, 2012	14
Notes to Statement of Assets Acquired and Liabilities Assumed	15 – 23

12

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of CenterState Banks, Inc.

We have audited the accompanying statement of assets acquired and liabilities assumed by CenterState Bank of Florida, N.A. (a wholly owned subsidiary of CenterState Banks, Inc.) pursuant to the Purchase and Assumption Agreement dated January 27, 2012 (the Agreement). This statement of assets acquired and liabilities assumed is the responsibility of the Company’s management. Our responsibility is to express an opinion on this statement of assets acquired and liabilities assumed based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the account principals used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of assets acquired and liabilities assumed referred to above presents fairly, in all material respects, the assets acquired and liabilities assumed by CenterState Bank of Florida, N.A. (a wholly owned subsidiary of CenterState Banks, Inc.) pursuant to the Agreement, in conformity with U.S. generally accepted accounting principles.

/s/ Crowe Horwath LLP

Crowe Horwath LLP

Fort Lauderdale, Florida

April 12, 2012

13

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

	January 27, 2012
Cash and due from banks	$	4,774
Interest bearing deposits held at Federal Home Loan Bank (“FHLB”)		10,541
Interest bearing deposits held at Federal Reserve Bank		62,327
Investment securities available for sale		3,500
Covered loans		171,949
Consumer loans not covered by loss sharing agreement		961
Total loans		172,910
Covered other repossessed real estate owned (“OREO”)		15,318
FDIC indemnification asset		78,148
FHLB stock		1,627
Core deposit intangible		1,521
Trust intangible		1,580
Goodwill		8,745
Other assets		2,742
Total assets acquired	$	363,733
Deposits:
Non interest bearing demand accounts	$	57,845
Interest bearing checking accounts		21,347
Interest bearing savings accounts		53,213
Time deposits		220,694
Total Deposits		353,099
FHLB advances		10,060
Interest payable on deposits and FHLB advances		523
Other liabilities		51
Total liabilities assumed	$	363,733

The accompanying notes are an integral part of this financial statement

14

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Note 1: FDIC assisted acquisition of certain assets and liabilities of First Guaranty Bank and Trust Company of Jacksonville

On January 27, 2012, CenterState Bank of Florida, N.A. (“CenterState”), a wholly owned subsidiary of CenterState Banks, Inc. (the “Company”), entered into a purchase and assumption agreement that included certain loss share agreements (the “Agreements”) with the Federal Deposit Insurance Corporation (“FDIC”) and the FDIC as receiver, pursuant to which CenterState acquired certain assets and assumed deposits and certain liabilities of First Guaranty Bank and Trust Company of Jacksonville (“FGB”) located in Jacksonville, Florida.

FGB operated through eight branches in Duval County, Florida. CenterState assumed $353,099 of the deposits of FGB at estimated fair value. Additionally, CenterState acquired loans with an estimated fair value of $172,910 and an unpaid principal balance of $264,759, repossessed real estate (“OREO”) and investment securities with estimated fair values of $15,318 and $3,500, respectively. Approximately $263,390 of the $264,759 acquired loans and all of the acquired OREO (“Covered Assets”) are covered by loss sharing agreements between the FDIC and CenterState.

The assets acquired and liabilities assumed in the transaction are presented at estimated fair value on the date of the acquisition. The fair values of the assets acquired and liabilities assumed were determined as described in Note 3. The fair value estimates for acquired loans and OREO are considered preliminary primarily due to pending appraisals, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. CenterState and the FDIC are engaged in on-going discussions that may impact which assets and liabilities are ultimately acquired or assumed by CenterState and/or the purchase prices. In addition, the tax treatment of FDIC assisted acquisitions is complex and subject to interpretations that may result in future adjustments of deferred taxes as of the acquisition date.

Note 2: Loss sharing agreements and FDIC indemnification asset

As part of the Agreements, CenterState and the FDIC also entered into certain loss sharing agreements. Pursuant to the terms of these loss sharing agreements, the FDIC’s obligation to reimburse CenterState for losses with respect to certain loans begins with the first dollar of loss incurred. Approximately $290,408 of assets which include $263,390 of loans and $27,018 of OREO are covered under these agreements. The amounts covered by the loss sharing agreements are the pre-acquisition book values of the underlying assets and certain future net direct costs. The FDIC will reimburse CenterState for 80% of losses up to $232,326. CenterState will reimburse the FDIC for its share of recoveries with respect to losses for which the FDIC paid CenterState a reimbursement under the loss sharing agreements. Certain other assets of FGB were acquired by CenterState that are not covered by loss sharing agreements with the FDIC. These assets include consumer loans and investment securities purchased at fair market value and other tangible assets.

15

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

The following table summarizes the assets covered by the loss sharing agreements, the amount covered by the FDIC and the fair value:

	January 27, 2012
Assets subject to stated threshold:	Amount Covered		fair value
Loans	$	263,390	$	171,949
OREO		27,018		15,318
Total covered assets	$	290,408	$	187,267

The loss sharing agreements applicable to single family residential mortgage loans provides for FDIC loss sharing and Company reimbursement to the FDIC for recoveries for ten years. The loss sharing agreement applicable to commercial loans and other covered assets provides for FDIC loss sharing for five years and Company reimbursement to the FDIC for a total of eight years for recoveries.

The loss sharing agreements are subject to certain servicing procedures as specified in agreements with the FDIC. The expected reimbursements under the loss sharing agreements were recorded as an indemnification asset on the statement of assets acquired and liabilities assumed at the estimated fair value of $78,148. The FDIC loss share indemnification asset reflects the present value of the expected net cash reimbursement related to the loss sharing agreements described above.

Note 3: Basis of presentation

CenterState has determined that the acquisition of the net assets of FGB constitutes a business acquisition as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their estimated fair values as required by that topic.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. In some cases, the estimation of fair values requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. We describe below the methods used to determine the fair values of the significant assets acquired and liabilities assumed. ASC 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1:	Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date;
Level 2:	Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market date;
Level 3:	Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of the methods used to determine the fair values of significant assets and liabilities.

16

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Cash, due from banks and interest bearing deposits

The carrying amount of these assets is a reasonable estimate of fair value.

Investment securities available for sale

The fair value for securities available for sale was determined by inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability, specifically one of the securities was called subsequent to the acquisition date and management expects the other to be called prior to maturity (Level 3 inputs).

Loans

At the January 27, 2012 acquisition date, the Company estimated the fair value of the acquired loan portfolio at $172,910, which represents the expected cash flows from the portfolio discounted at a market-based rate. Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, risk classification, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates. Loans were grouped together according to similar characteristics and were valued in the aggregate when applying various valuation techniques. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. The discount rate does not include a factor for credit losses as that has been included in the estimated cash flows. Fair values are considered to be Level 3 pricing.

OREO

Fair values for OREO were determined using Level 3 inputs which include current and prior appraisals and estimated costs to sell. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

FDIC indemnification asset

These loss sharing assets are measured separately from the related covered assets as they are not contractually embedded in the assets and are not transferable with the assets should CenterState choose to dispose of them. Fair value was estimated using projected cash flows related to the loss sharing agreements based on the expected reimbursements for losses and the applicable loss sharing percentage. These expected reimbursements do not include reimbursable amounts related to future covered expenditures. These cash flows were discounted, using a rate of 2.78%, to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. Fair value is considered to be Level 3 pricing.

FHLB stock

It was not practicable to determine the fair value of Federal Home Loan Bank (“FHLB”) stock due to restrictions placed on its transferability, and as such has been recorded at its redeemable value.

Core deposit intangible

This intangible asset represents the intangible value of the acquired core deposits. The fair value of this intangible asset was estimated based on the discounted cash flow methodology that gave consideration to expected customer attrition rates, cost of the deposit base, reserve requirements and the net maintenance cost attributable to customer deposits. Fair value is considered to be Level 3 pricing.

17

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Trust intangible

This intangible asset represents the value of the Trust business (“Trust”) acquired from FGB. The fair value of this intangible asset was estimated based on the discounted cash flow methodology that gave consideration to expected customer attrition rates, servicing revenue and the net maintenance cost attributable to customer Trust accounts. Fair value is considered to be Level 3 pricing.

Goodwill

Goodwill represents the consideration paid in excess of the fair value of the net assets received pursuant to the FGB transaction.

Deposits

The fair values used for the checking and savings deposits that comprise the transaction accounts acquired, by definition equal the amount payable on demand at the reporting date. The fair values for time deposits was estimated using a discounted cash flow calculation that applies interest rates currently being offered to the interest rates embedded on such time deposits, and are considered to be Level 2 pricing. All of the internet time deposits ($127.9 million) and $10.7 of selected retail time deposits were repriced to current market rates and not included in the fair value calculation.

FHLB advances

Management’s intention as of the acquisition date was to prepay the FHLB advances acquired, which subsequently occurred. As such, management determined the fair value of the FHLB advances at the acquisition date was the $10,000 principal outstanding plus the prepayment penalty of approximately $60.

Use of estimates

Management made a number of significant estimates and assumptions relating to the reporting of assets and liabilities at the date of the statement of assets acquired and liabilities assumed. Management exercised significant judgment regarding assumptions about discount rates, future expected cash flows, including prepayments, default rates, market conditions and other future events that are highly subjective in nature, and subject to change, and all of which affected the estimation of fair values of the net assets acquired in the FGB acquisition. Actual results could differ from those estimates. Actual results that may vary significantly from the Company’s assumptions include loan prepayments, the rate of default, the severity of defaults, the estimated market values of collateral at disposition, the timing of such disposition and deposit attrition.

Note 4: Net assets acquired

Under the terms of the purchase and assumption agreements, the FDIC agreed to transfer to CenterState (1) certain assets subject to loss sharing agreements at book value, (2) certain assets that are not subject to the loss sharing agreements at a contractually specified purchase price, (3) certain assets at fair value, (4) certain liabilities at book value and (5) a cash payment of $523.

18

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Details related to the transfer at acquisition date, are as follows:

	January 27, 2012
Payment from FDIC per purchase and assumption agreements	$	(523	)
Net assets acquired per purchase and assumption agreements		13,972
Purchase accounting adjustments:
Loans		(91,849	)
OREO		(11,700	)
Other repossessed assets		(156	)
FDIC indemnification asset		78,148
Time deposits		(724	)
FHLB advances		(60	)
Trust intangible		1,580
Core deposit intangible		1,521
Fair value of net assets acquired per purchase and assumption agreements		(9,268	)
Payment from FDIC less the fair value of the net assets acquired (“goodwill”)	$	8,745

Note 5: Investment securities

The table below reflects the acquired investment securities at acquisition date:

	par value		fair value		weighted average maturity in months
Federal Farm Credit Bank (“FFCB”)- fixed	$	1,000	$	1,000		97
FNMA- step up	$	2,500	$	2,500		176
Total	$	3,500	$	3,500		153

The first security listed in the table above (FFCB) carries a fixed interest rate of 4.19%, has a maturity date of February 24, 2020, and is continuously callable effective February 24, 2012. The security was called on February 24, 2012. The second security in the table above (FNMA) is fixed at 3% until August 2016, then steps up to 3.5% until August 2020, then steps up to 4% until August 2023, then steps up to 5% until August 2025, then steps up to 6% until maturity in August 2026. The security is callable on a quarterly basis. Securities are measured at fair value on a recurring basis and fair value is considered to be level 3 pricing.

19

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Note 6: Loans

The composition of loans acquired at acquisition date is as follows:

	fair value
Covered loans:
Single family residential real estate	$	58,428
Commercial real estate		104,321
Construction, development and land		4,321
Total real estate loans		167,070
Commercial loans		4,879
Total covered loans		171,949
Loans not covered by loss sharing agreement:
Consumer and other loans		961
Total loans	$	172,910

The following table presents purchased loans accounted for under ASC Topic 310-30 at the January 27, 2012 acquisition date:

	loans with specifically identified credit deficiency factor (Type A loans)			loans with implied credit deficiency factor (Type B loans)			total loans
Contractually required principal and interest	$	100,292		$	208,370		$	308,662
Non-accretable difference		(58,913	)		(46,957	)		(105,870	)
Cash flows expected to be collected		41,379			161,413			202,792
Accretable yield		(2,084	)		(27,798	)		(29,882	)
Fair value of loans accounted for under ASC 310-30	$	39,295		$	133,615		$	172,910

Acquired loans that were non-accrual, 60 days or more past due, designated as Troubled Debt Restructured (“TDR”), graded “special mention” or “substandard,” had six or more 30 day past due notices or had any 60 day or 90 day past due notices during the loan term, were identified as Type A loans, that is, loans with specifically identified credit deficiency factor. The Company will account for Type A loans under ASC Topic 310-30.

All remaining loans, those without specifically identified credit deficiency factors, or Type B loans, were grouped into pools with common characteristics. These loans were then evaluated to determine estimated fair value as of the acquisition date. Although no specific credit deficiencies are easily identifiable, management believes there is an element of risk as to whether all contractual cash flows will be eventually received. Factors that were considered included the poor economic environment both nationally and locally as well as the unfavorable real estate market particularly in Florida. In addition, these loans were acquired from a failed financial institution which implies poor, or at least questionable, underwriting. Based on management’s estimate of fair value, each of these pools has a credit discount. The Company will apply ASC Topic 310-30 accounting treatment by analogy to Type B loans. The result is that all loans acquired from this failed financial institution will be accounted for under ASC Topic 310-30.

20

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Note 7: Goodwill and other intangible assets

The statement of assets acquired and liabilities assumed reflects a core deposit intangible asset of $1,521 at January 27, 2012 related to the FGB acquisition. The core deposit intangible asset will be amortized utilizing an accelerated amortization method over an estimated economic life not to exceed ten years. Estimated amortization expense for the remainder of 2012 and the five subsequent years thereafter is $216, $196, $166, $141, $133 and $132, respectively. The Company will review the valuation of this intangible asset periodically for impairment. If any impairment is subsequently determined, the Company will record the impairment as an expense in its consolidated statement of operations.

The statement of assets acquired and liabilities assumed reflects a Trust intangible asset of $1,580 at January 27, 2012 related to the FGB acquisition. The Trust acquisition intangible asset will be amortized utilizing an accelerated amortization method over an estimated economic life not to exceed ten years. Estimated amortization expense for the remainder of 2012 and the five subsequent years thereafter is $217, $225, $211, $196, $180 and $162, respectively. The Company will review the valuation of this intangible asset periodically for impairment. If any impairment is subsequently determined, the Company will record the impairment as an expense in its consolidated statement of operations.

In connection with the FGB acquisition, the fair value of the net liabilities assumed exceeded the payment received from the FDIC. Accordingly, goodwill of approximately $8,745 was recorded as a result of the acquisition. Goodwill is not an amortizable asset. The Company will review the valuation of this intangible asset periodically for impairment. If any impairment is subsequently determined, the Company will record the impairment as an expense in its consolidated statement of operations. These intangibles, including goodwill are deductible for federal income tax purposes over a fifteen year period.

This Acquisition was attractive to the Company for a variety of reasons including the following:

• attractiveness in the pricing of the acquired loan portfolios including the indemnification asset;

• ability to increase the Company’s market share in Duval County, Florida;

• attractiveness of core deposit customer relationships;

• opportunities to enhance income and efficiency due to duplications of effort and decentralized processes as the Company expects to enhance income by centralizing some duties and removing duplications of effort.

21

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

Note 8: Deposits

Deposits assumed are composed of the following at acquisition date:

	January 27, 2012 fair value
Non interest bearing checking accounts	$	57,845
Interest bearing checking accounts		21,347
Interest bearing savings deposits		53,213
Time deposits		220,694
Total	$	353,099

At acquisition date, the scheduled maturities and the weighted average interest rates of time deposits of more that $100 and less than $100 were as follows:

	January 27, 2012
	Total time deposits excluding internet deposits
	greater than $100					less than $100
	fair value		weighted average interest rate			fair value		weighted average interest rate
Less than 3 months	$	10,228		0.15	%	$	9,129		0.15	%
4 - 6 months		3,420		0.20	%		7,003		0.20	%
7 - 12 months		15,561		0.27	%		11,229		0.27	%
1 - 2 years		14,727		0.42	%		6,617		0.41	%
2 - 3 years		7,054		0.75	%		2,747		0.75	%
3 - 4 years		433		0.90	%		633		0.90	%
4 - 5 years		2,395		1.25	%		1,662		1.25	%
Total	$	53,818		0.40	%	$	39,020		0.34	%
	January 27, 2012
	Total internet time deposits
	greater than $100					less than $100
	fair value		weighted average interest rate			Fair Value		weighted average interest rate
Less than 3 months	$	9,029		0.05	%	$	9,158		0.05	%
4 - 6 months		14,128		0.05	%		3,475		0.05	%
7 - 12 months		40,769		0.05	%		6,375		0.05	%
1 - 2 years		23,990		0.05	%		5,647		0.05	%
2 - 3 years		10,440		0.05	%		1,317		0.05	%
3 - 4 years		3,255		0.05	%		273		0.05	%
Total	$	101,611		0.05	%	$	26,245		0.05	%

The Company did not assume any broker deposits but did assume $127,856 of internet time deposits. The Company exercised its option, pursuant to the FDIC purchase and assumption agreement, to immediately reprice this group of time deposits subsequent to the acquisition date to estimated market rates. The Company repriced all of these time deposits. Pursuant to the FDIC purchase and assumption agreement, if the Company chooses to reprice any time deposits, the customer has the

22

STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By CenterState Bank of Florida, N.A.

(a wholly owned subsidiary of CenterState Banks, Inc.)

(dollars are in thousands)

option of withdrawing their deposit any time prior to maturity without penalty. All of the internet time deposits have been withdrawn early. The Company also repriced approximately $10,673 of time deposits to current market rates subsequent to the acquisition date.

Note 9: Subsequent Events

Subsequent events are events and transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. The effects of subsequent events and transactions are recognized in the financial statements when they provide additional evidence about conditions that existed at the balance sheet date. Subsequent to the January 27, 2012 acquisition date, the Federal Farm Credit Bank security was called at its par value of $1,000. The $10,000 FHLB advances and the $60 prepayment penalty was paid subsequent to the acquisition date. The Company also exercised its option to reprice the internet time deposits it assumed pursuant to the acquisition and all of these deposits were redeemed early without penalty as discussed in Note 8 above. The Company also exercised its option to reprice certain other time deposits to current market rates subsequent to the acquisition date. The Company also has an option to purchase any of the branch real estate at fair value based on a current appraisal. The Company expects to purchase two branch locations.

23