csfl-ex991

(all amounts are in thousands of dollars, except per share data, or unless otherwise noted)

WINTER HAVEN, FL. – July 25, 2017 - CenterState Banks, Inc. (Nasdaq: CSFL) reported net income of $15,233, or diluted earnings per share of $0.26, for the second quarter of 2017, as compared to net income of $16,600 for the first quarter of 2017. Other highlights for the second quarter of 2017 include the following:

Condensed consolidated income statements (unaudited) are shown below for the periods indicated.


	Three Months Ended															Six Months Ended
	June 30, 2017			Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Interest income
Loans	$	56,619		$	44,249		$	44,085		$	41,445		$	40,977		$	100,868		$	78,095
Investment securities		7,289			6,203			5,531			5,746			5,710			13,492			11,552
Federal Funds sold and other		836			651			539			512			622			1,487			1,160
Total interest income		64,744			51,103			50,155			47,703			47,309			115,847			90,807
Interest expense
Deposits		2,619			1,897			1,892			1,821			1,740			4,516			3,221
Securities sold under agreement to repurchase		47			30			23			25			28			77			55
Federal Funds purchased		728			537			393			240			250			1,265			521
Corporate debentures		333			318			313			298			294			651			538
Interest expense		3,727			2,782			2,621			2,384			2,312			6,509			4,335
Net interest income		61,017			48,321			47,534			45,319			44,997			109,338			86,472
Provision for loan losses		1,899			995			2,266			1,275			911			2,894			1,421
Net interest income after loan loss provision		59,118			47,326			45,268			44,044			44,086			106,444			85,051

Correspondent banking and capital markets division income		8,063			6,449			8,091			7,528			9,291			14,512			18,066
Gain on sale of securities available for sale		—			—			—			13			—			—			—
FDIC- IA (negative accretion) (1)		—			—			—			—			—			—			(1,166	)
FDIC- revenue (1)		—			—			—			—			—			—			96
Gain on early extinguishment of debt		—			—			—			—			—			—			308
All other non interest income		8,911			8,053			9,065			8,140			7,680			16,964			14,228
Total non interest income		16,974			14,502			17,156			15,681			16,971			31,476			31,532

Correspondent banking and capital markets division-expense		5,544			4,746			5,987			5,456			6,159			10,290			11,941
Credit related expenses		876			655			624			187			611			1,531			970
Merger related expenses		9,458			870			272			—			—			10,328			11,172
Termination of FDIC loss share agreements (1)		—			—			—			—			—			—			17,560
All other non interest expense		38,931			31,772			31,301			30,752			30,279			70,703			58,259
Total non interest expense		54,809			38,043			38,184			36,395			37,049			92,852			99,902

Income before income tax		21,283			23,785			24,240			23,330			24,008			45,068			16,681
Income tax provision		6,050			7,185			8,213			7,946			8,274			13,235			5,751
Net income	$	15,233		$	16,600		$	16,027		$	15,384		$	15,734		$	31,833		$	10,930
Net income allocated to common shares	$	15,200		$	16,559		$	15,970		$	15,324		$	15,672		$	31,759		$	10,887

Earnings per share – Basic	$	0.26		$	0.33		$	0.33		$	0.32		$	0.33		$	0.58		$	0.23
Earnings per share – Diluted	$	0.26		$	0.32		$	0.33		$	0.32		$	0.32		$	0.57		$	0.23
Dividends per share	$	0.06		$	0.06		$	0.04		$	0.04		$	0.04		$	0.12		$	0.08
Average common shares outstanding (basic)		58,307			50,632			47,870			47,821			47,782			54,490			46,968
Average common shares outstanding (diluted)		59,370			51,408			48,800			48,603			48,454			55,397			47,620
Common shares outstanding at period end		60,003			51,126			48,147			48,017			47,996			60,003			47,996
Effective tax rate		28.43	%		30.21	%		33.88	%		34.06	%		34.46	%		29.37	%		34.48	%

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

	Ending Balance
Condensed Consolidated Balance Sheets	June 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sept. 30, 2016	June 30, 2016
Assets
Cash and due from banks	$87,277	$65,114	$66,368	$37,460	$60,522
Fed funds sold and Fed Res Bank deposits	211,037	214,369	109,286	161,406	223,533
Trading securities	1,934	—	12,383	2,166	—
Investment securities, available for sale	868,334	819,352	740,702	761,648	744,575
Investment securities, held to maturity	238,798	243,812	250,543	263,692	267,082
Loans held for sale	8,959	2,637	2,285	2,333	4,329
Loans:
Originated loans	2,610,859	2,397,021	2,250,631	2,069,272	1,905,566
Acquired loans	1,856,310	946,925	993,192	1,027,922	1,072,542
PCI loans	179,364	176,058	185,924	197,288	216,859
Total gross loans	4,646,533	3,520,004	3,429,747	3,294,482	3,194,967
Allowance for loan losses	(30,132)	(27,819)	(27,041)	(25,499)	(24,172)
Loans, net of allowance	4,616,401	3,492,185	3,402,706	3,268,983	3,170,795
Premises and equipment, net	140,820	115,400	114,815	114,567	116,129
Goodwill	257,683	106,028	106,028	105,492	105,492
Core deposit intangible	26,217	14,785	15,510	16,267	17,023
Bank owned life insurance	115,234	99,065	98,424	97,767	97,109
OREO	6,422	7,201	7,090	9,005	12,311
Deferred income tax asset, net	58,841	56,792	63,208	58,614	62,774
Other assets	129,522	92,256	89,211	115,112	113,615
Total Assets	$6,767,479	$5,328,996	$5,078,559	$5,014,512	$4,995,289

Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing	$1,926,047	$1,585,963	$1,426,624	$1,406,030	$1,486,600
Interest bearing	990,242	893,945	917,004	814,123	763,614
Total checking accounts	2,916,289	2,479,908	2,343,628	2,220,153	2,250,214
Money market accounts	1,178,109	910,056	900,532	903,697	927,997
Savings deposits	519,964	384,202	362,947	352,547	347,631
Time deposits	861,093	522,957	545,437	579,537	606,294
Total deposits	$5,475,455	$4,297,123	$4,152,544	$4,055,934	$4,132,136
Federal funds purchased	256,611	268,377	261,986	258,329	174,116
Other borrowings	73,089	63,882	54,385	52,788	56,432
Other liabilities	72,066	65,213	57,187	94,690	94,634
Common stockholders’ equity	890,258	634,401	552,457	552,771	537,971
Total Liabilities and
Stockholders' Equity	$6,767,479	$5,328,996	$5,078,559	$5,014,512	$4,995,289

Total loans increased $103,705 during the quarter, for an annualized growth rate of approximately 12% excluding loans acquired in the Platinum and Gateway transactions. The acquisition date fair value of loans acquired from those two acquisitions totalled approximately $1,022,824. The loan to deposit ratio increased to 84.9% from 81.9% in the prior quarter, and from 77.3% in the same quarter in 2016.

The loan origination pipeline totalled approximately $548 million at June 30, 2017, compared to $460 million at March 31, 2017.

Total deposits decreased by $50,300, or approximately 5% on an annualized basis, during the current quarter, excluding deposit balances assumed in the Platinum and Gateway transactions. The acquisition date fair value of the deposits assumed from the two acquisitions totalled approximately $1,228,632. The decrease in deposits during the current quarter primarily represents non-interest bearing commercial checking accounts returning to more normalized levels after the large increase that occurred in the first quarter. Total checking account balances represent 53% of total deposits. The overall cost of total deposits (i.e. includes non-interest bearing checking accounts) during the current quarter totalled 0.20%, compared to 0.18% in the previous quarter.

	Three Months Ended										Six Months Ended
	June 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		June 30, 2016		June 30, 2017		June 30, 2016
Selected financial data
Return on average assets (annualized)		0.95%		1.29%		1.25%		1.22%		1.27%		1.10%		0.47%
Return on average equity (annualized)		7.27%		10.92%		11.51%		11.21%		11.96%		8.81%		4.28%
Return on average tangible equity (annualized) (Non-GAAP) (1)		10.99%		14.06%		15.26%		14.95%		16.14%		12.39%		11.65%
Efficiency ratio (tax equivalent) (Non-GAAP) (1)		68.9%		59.3%		58.1%		58.7%		59.0%		64.6%		69.1%
Dividend payout		23.1%		18.8%		12.1%		12.5%		12.5%		21.1%		34.8%
Loan / deposit ratio		84.9%		81.9%		82.6%		81.2%		77.3%
Stockholders’ equity (to total assets)		13.2%		11.9%		10.9%		11.0%		10.8%
Common equity per common share	$	14.84	$	12.41	$	11.47	$	11.51	$	11.21
Tangible common equity per common share (Non-GAAP) (1)	$	10.09	$	10.03	$	8.93	$	8.96	$	8.64
Common tangible equity (to total tangible assets) (Non-GAAP) (1)		9.3%		9.8%		8.7%		8.8%		8.5%
Tier 1 capital (to average assets)		10.0%		10.4%		9.1%		9.0%		8.7%

The Company’s NIM increased 10 basis points from 4.28% in the previous quarter to 4.38% during the current quarter, due to higher loan and securities yields with a stable cost of deposits of 0.20%. PCI accretion impacted the Company’s NIM by 43 basis points during the current quarter compared to 51 basis points in the prior quarter. The tax equivalent yield on new loan production, which increased by 26 basis points from 4.05% in the prior quarter to 4.31% during the current quarter, resulted in an increase in the loan yields. In addition, the increase in short term interest rates had a positive impact on the Company’s floating rate loans, which represent 31% of the total loan portfolio.

The table below summarizes yields and costs by various interest earning asset and interest bearing liability account types for the current quarter, the previous calendar quarter and the same quarter last year.

	Three Months Ended
	June 30, 2017			Mar. 31, 2017			June 30, 2016
	Average	Interest	Average	Average	Interest	Average	Average	Interest	Average
	Balance	Inc/Exp	Rate	Balance	Inc/Exp	Rate	Balance	Inc/Exp	Rate
Loans (1)	$4,235,557	$48,922	4.63%	$3,300,971	$36,474	4.48%	$2,949,651	$33,255	4.53%
PCI loans	181,207	8,559	18.95%	182,510	8,525	18.94%	225,584	8,047	14.35%
Taxable securities	977,856	5,961	2.45%	861,031	5,001	2.36%	879,774	4,767	2.18%
Tax -exempt securities (1)	155,550	1,975	5.09%	155,550	1,791	4.67%	121,737	1,423	4.70%
Fed funds sold and other	180,261	836	1.86%	204,125	651	1.29%	272,635	622	0.92%
Tot. interest earning assets (1)	$5,730,431	$66,253	4.64%	$4,704,187	$52,442	4.52%	$4,449,381	$48,114	4.35%

Non-interest earnings assets	726,950			511,328			532,867
Total Assets	$6,457,381			$5,215,515			$4,982,248

Interest bearing deposits	$3,324,382	$2,619	0.32%	$2,704,860	$1,897	0.28%	$2,626,668	$1,740	0.27%
Fed funds purchased	253,851	692	1.09%	259,831	537	0.84%	188,663	244	0.52%
Other borrowings	56,414	83	0.59%	34,612	30	0.35%	33,315	34	0.41%
Corporate debentures	26,045	333	5.13%	25,987	318	4.96%	25,811	294	4.58%
Total interest bearing liabilities	$3,660,692	$3,727	0.41%	$3,025,290	$2,782	0.37%	$2,874,457	$2,312	0.32%

Non-interest bearing deposits	1,891,968			1,508,058			1,506,762
All other liabilities	64,668			65,899			71,935
Shareholders' equity	840,053			616,268			529,094
Total liabilities and shareholders' equity	$6,457,381			$5,215,515			$4,982,248

Net Interest Spread (1)			4.23%			4.15%			4.03%
Net Interest Margin (1)			4.38%			4.28%			4.14%

Non-performing assets (“NPAs”) totalled $26,469 at June 30, 2017, compared to $24,888 at March 31, 2017. The net increase in NPAs resulted from additions to nonaccrual loans of approximately $2.3 million. The majority of the loans transferred to nonaccrual during the current quarter are loans in the process of being renewed. NPAs as a percentage of total assets declined to 0.39% at June 30, 2017, compared to 0.47% at March 31, 2017.

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

	Ending Balance
Non-Performing Assets (1)	June 30, 2017			Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			June 30, 2016
Non-accrual loans	$	19,916		$	17,569		$	19,003		$	19,704		$	25,035
Past due loans 90 days or more
and still accruing interest		—			—			—			—			—
Total non-performing loans (“NPLs”)		19,916			17,569			19,003			19,704			25,035
Other real estate owned (“OREO”)		6,422			7,201			7,090			9,005			12,311
Repossessed assets other than real estate	131			118			114			170			104
Total non-performing assets	$	26,469		$	24,888		$	26,207		$	28,879		$	37,450

	Three Months Ended																Six Months Ended
Asset Quality Ratios (1)	June 30, 2017			Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			June 30, 2016				June 30, 2017				June 30, 2016
Non-performing loans as percentage of total loans		0.45	%		0.53	%		0.59	%		0.64	%		0.84	%
Non-performing assets as percentage of total assets		0.39	%		0.47	%		0.52	%		0.58	%		0.75	%
Non-performing assets as percentage of loans and
OREO plus other repossessed assets		0.59	%		0.74	%		0.81	%		0.93	%		1.25	%
Loans past due 30 thru 89 days and accruing interest
as a percentage of total loans		0.27	%		0.47	%		0.58	%		0.36	%		0.41	%
Allowance for loan losses as percentage of NPLs		149	%		157	%		140	%		128	%		96	%
Net (recoveries) charge-offs	$	(349	)	$	217		$	724		$	(118	)	$	(139	)		$	(132	)		$	(487	)
Net (recoveries) charge-offs as a percentage of average
loans for the period on an annualized basis		(0.03	%)		0.03	%		0.09	%		(0.02	%)		(0.02	%	)		(0.01	%	)		(0.04	%)

The allowance for loan losses (“ALLL") totalled $30,132 at June 30, 2017, compared to $27,819 at March 31, 2017, an increase of $2,313 due to loan loss provision expense of $1,899 and net recoveries of $414. ALLL on originated loans increased $2,418 mainly due to the increase in loan balances. The ALLL on acquired loans declined 16 basis points due to the addition of loans acquired from Platinum and Gateway which equalled approximately $985,740, net of pay downs, at June 30, 2017. The loans acquired from these two transacations were recorded at estimated fair value on the dates of acquisition. As such, there is no allowance for loan losses associated with these loans as of June 30, 2017. The changes in the Company’s ALLL components between June 30, 2017 and March 31, 2017 are summarized in the table below (unaudited).

	June 30, 2017							March 31, 2017							Increase (Decrease)
	Loan		ALLL					Loan		ALLL					Loan		ALLL
	Balance		Balance		%			Balance		Balance		%			Balance		Balance
Originated loans	$	2,593,576	$	26,280		1.01	%	$	2,380,220	$	24,129		1.01	%	$	213,356	$	2,151		– bps
Impaired originated loans		17,283		850		4.92	%		16,801	583			3.47	%		482		267		145 bps
Total originated loans		2,610,859		27,130		1.04	%		2,397,021		24,712		1.03	%		213,838		2,418		1 bps

Acquired loans (2)		1,854,501		2,639		0.14	%		945,120		2,769		0.29	%		909,381		(130	)	(15) bps
Impaired acquired loans (1)		1,809		—		—			1,805	40			2.22	%		4		(40	)	(222) bps
Total acquired loans		1,856,310		2,639		0.14	%		946,925		2,809		0.30	%		909,385		(170	)	(16) bps

Total non-PCI loans		4,467,169		29,769					3,343,946		27,521					1,123,223		2,248
PCI loans		179,364		363					176,058	298						3,306		65
Total loans	$	4,646,533	$	30,132				$	3,520,004	$	27,819				$	1,126,529	$	2,313

Non interest income of $16,974 increased $2,472 in the second quarter, of which $1,614 was due to the increase in correspondent banking and capital markets division income. The table below summarizes the Company’s non-interest income for the periods indicated.

	Three Months Ended										Six Months Ended
	June 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		June 30, 2016		June 30, 2017		June 30, 2016
Correspondent banking and capital markets division (1)	$	6,868	$	5,376	$	7,016	$	6,381	$	8,049	$	12,244	$	15,420
Other correspondent banking related revenue (2)		1,195		1,073		1,075		1,147		1,242		2,268		2,646
Wealth management related revenue		891		893		815		892		795		1,784		1,530
Service charges on deposit accounts		3,822		3,575		3,729		3,770		3,329		7,397		6,065
Debit, prepaid, ATM and merchant card related fees		2,324		2,265		2,009		2,017		2,182		4,589		4,228
BOLI income		694		641		657		658		654		1,335		1,219
Gain on sale of bank properties held for sale		—		129		730		67	---			129		—
Other service charges and fees		1,180		550		1,125		736		720		1,730		1,186
Subtotal	$	16,974	$	14,502	$	17,156	$	15,668	$	16,971	$	31,476	$	32,294
Gain on sale of securities available for sale		—		—		—		13		—		—		—
Gain on early extinguishment of debt		—		—		—		—		—		—		308
FDIC indemnification asset – amortization		—		—		—		—		—		—		(1,166	)
FDIC indemnification income		—		—		—		—		—		—		96
Total Non Interest Income	$	16,974	$	14,502	$	17,156	$	15,681	$	16,971	$	31,476	$	31,532

Non interest expense increased $16,766 in the second quarter to $54,809 which is mainly attributed to the Platinum and Gateway transactions. The Company incurred $9,458 of merger-related expenses in the current quarter. In addition, the Company incurred increased salary and benefits expense, occupancy and depreciation expense, data processing expense and amortization of intangibles related to the acquired banks. The table below summarizes the Company’s non-interest expense for the periods indicated.

	Three Months Ended											Six Months Ended
	June 30, 2017		Mar. 31, 2017		Dec. 31, 2016		Sept. 30, 2016		June 30, 2016			June 30, 2017		June 30, 2016
Salaries, wages and employee benefits		28,317		22,882		24,049		22,418		22,959			51,199		44,414
Occupancy expense		3,069		2,749		2,767		2,414		2,477			5,818		4,624
Depreciation of premises and equipment		1,837		1,684		1,659		1,629		1,588			3,521		3,085
Supplies, stationary and printing		434		354		320		341		380			788		679
Marketing expenses		1,078		852		909		700		826			1,930		1,516
Data processing expenses		2,419		1,826		1,814		1,761		1,765			4,245		3,292
Legal, auditing and other professional fees		932		888		901		904		949			1,820		1,852
Bank regulatory related expenses		891		727		779		863		968			1,618		1,778
Postage and delivery		491		428		420		423		486			919		841
ATM and debit card related expenses		863		706		713		725		816			1,569		1,412
Credit related expenses		876		655		624		187		611			1,531		970
Amortization of intangibles		1,042		762		791		791		814			1,804		1,492
Internet and telephone banking		503		518		651		559		628			1,021		1,192
Impairment (recovery) on bank property held for sale		430		77		116		616		(38	)		507		418
Other expenses		2,169		2,065		1,399		2,064		1,820			4,234		3,605
Subtotal		45,351		37,173		37,912		36,395		37,049			82,524		71,170
Merger-related expenses		9,458		870		272		—		—			10,328		11,172
Termination of FDIC loss share agreements		—		—		—		—		—			—		17,560
Total Non Interest Expense		54,809	$	38,043	$	38,184	$	36,395	$	37,049		$	92,852	$	99,902

Note: Certain prior period amounts have been reclassified to conform to the current period presentation format.

The condensed quarterly results of the Company’s correspondent banking and capital markets segment are presented below.

Condensed Segment Information - Correspondent banking and capital markets division (unaudited)


	Three Months Ended															Six Months Ended
	June 30, 2017			Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Net interest income	$	1,918		$	2,095		$	1,850		$	1,625		$	1,555		$	4,013		$	3,357
Provision for loan losses		37			29			24			28			(24	)		66			(76	)
Total non-interest income (1)		8,062			6,449			8,091			7,528			9,291			14,511			18,066
Total non-interest expense (2)		(5,544	)		(4,746	)		(5,987	)		(5,456	)		(6,159	)		(10,290	)		(11,941	)
Income tax provision		(1,725	)		(1,476	)		(1,535	)		(1,437	)		(1,799	)		(3,201	)		(3,627	)
Net income	$	2,748		$	2,351		$	2,443		$	2,288		$	2,864		$	5,099		$	5,779
Contribution to diluted earnings per share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.06		$	0.09		$	0.12

Allocation of indirect expense net of
inter-company earnings credit, net of
income tax benefit (3)	$	(202	)	$	(227	)	$	(280	)	$	(244	)	$	(232	)	$	(429	)	$	(574	)
Contribution to diluted earnings per share after
deduction of allocated indirect expenses	$	0.04		$	0.04		$	0.04		$	0.04		$	0.05		$	0.08		$	0.11

This press release contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”), including adjusted net income, adjusted net income per share diluted, adjusted return on average assets, return on average tangible equity, adjusted return on average tangible equity, adjusted efficiency ratio, adjusted non-interest income, adjusted non-interest expense, adjusted net-interest income, tangible common equity, tangible common equity to tangible assets, common tangible equity per common share, tax equivalent yields on loans, securities and earning assets, and tax equivalent net interest spread and margin, which we refer to “Non-GAAP financial measures.” The tables below provide reconciliations between these Non-GAAP measures and net income, interest income, net interest income and tax equivalent basis interest income and net interest income, return on average assets, return on average equity, the efficiency ratio, total stockholders’ equity and tangible common equity, as applicable.

Management uses these Non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and enhance investors’ understanding of the Company’s core business and performance without the impact of merger-related expenses. Accordingly, management believes it is appropriate to exclude merger-related expenses because those costs are specific to each acquisition, vary based upon the size, complexity and other specifics of each acquisition, and are not indicative of the costs to operate the Company’s core business.

Non-GAAP measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. The Company provides reconciliations between GAAP and these Non-GAAP measures. These disclosures should not be considered an alternative to GAAP.

	Three months ended					Six months ended
	June 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sept. 30, 2016	June 30, 2016	June 30, 2017	June 30, 2016
Adjusted net income (Non-GAAP)
Net income (GAAP)	$15,233	$16,600	$16,027	$15,384	$15,734	$31,833	$10,930
Gain on sale of securities available for sale, net of tax	—	—	—	(9)	—	—	—
Gain on early extinguishment of debt, net of tax	—	—	—	—	—	—	(202)
Termination of FDIC loss share agreements, net of tax	—	—	—	—	—	—	11,514
Merger-related expenses, net of tax	6,769	607	180	—	—	7,295	7,325
Adjusted net income (Non-GAAP)	$22,002	$17,207	$16,207	$15,375	$15,734	$39,128	$29,567

Adjusted net income per share - Diluted
Earnings per share - Diluted (GAAP)	$0.26	$0.32	$0.33	$0.32	$0.32	$0.57	$0.23
Effect to adjust for securities available for sale	—	—	—	—	—	—	—
Effect to adjust for early extinguishment of debt	—	—	—	—	—	—	—
Effect to adjust for termination of FDIC loss share agreements	—	—	—	—	—	—	0.24
Effect to adjust for merger-related expenses	0.11	0.01	—	—	—	0.14	0.15
Adjusted net income per share - Diluted (Non-GAAP)	$0.37	$0.33	$0.33	$0.32	$0.32	$0.71	$0.62

Adjusted return on average assets (Non-GAAP)
Return on average assets (GAAP)	0.95%	1.29%	1.25%	1.22%	1.27%	1.10%	0.47%
Effect to adjust for securities available for sale	—	—	—	—	—	—	—
Effect to adjust for early extinguishment of debt	—	—	—	—	—	—	(0.01%)
Effect to adjust for termination of FDIC loss share agreements	—	—	—	—	—	—	0.50%
Effect to adjust for merger-related expenses	0.42%	0.05%	0.01%	—	—	0.26%	0.31%
Adjusted return on average assets (Non-GAAP)	1.37%	1.34%	1.26%	1.22%	1.27%	1.36%	1.27%

	Three months ended					Six months ended
	June 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sept. 30, 2016	June 30, 2016	June 30, 2017	June 30, 2016
Return on average tangible equity (non-GAAP)
Net income (GAAP)	$15,233	$16,600	$16,027	$15,384	$15,734	$31,833	$10,930
Gain on early extinguishment of debt, net of tax	—	—	—	—	—	—	(202)
Termination of FDIC loss share agreements, net of tax	—	—	—	—	—	—	11,514
Amortization of intangibles, net of tax	746	532	523	522	533	1,274	978
Adjusted net income for average tangible equity (Non-GAAP)	$15,979	$17,132	$16,550	$15,906	$16,267	$33,107	$23,220

Average stockholders' equity (GAAP)	$840,053	$616,268	$553,997	$546,023	$529,094	$728,779	$513,258
Average goodwill	(232,026)	(106,028)	(105,760)	(105,492)	(105,492)	(169,375)	(96,013)
Average core deposit intangible	(24,118)	(15,148)	(15,889)	(16,645)	(17,413)	(19,698)	(15,779)
Average other intangibles	(962)	(769)	(759)	(751)	(785)	(867)	(805)
Average tangible equity (Non-GAAP)	$582,947	$494,323	$431,589	$423,135	$405,404	$538,839	$400,661

Return on average tangible equity (annualized) (Non-GAAP)	10.99%	14.06%	15.26%	14.95%	16.14%	12.39%	11.65%

Adjusted return on average tangible equity (non-GAAP)
Return on average tangible equity (Non-GAAP)	10.99%	14.06%	15.26%	14.95%	16.14%	12.39%	11.65%
Effect to adjust for merger-related expenses	4.66%	0.50%	0.17%	—	—	2.73%	3.68%
Adjusted return on average tangible equity (Non-GAAP)	15.65%	14.56%	15.43%	14.95%	16.14%	15.12%	15.33%

Efficiency ratio (tax equivalent) (Non-GAAP)
Non interest income (GAAP)	$16,974	$14,502	$17,156	$15,681	$16,971	$31,476	$31,532
Gain on early extinguishment of debt	—	—	—	—	—	—	(308)
Adjusted non interest income (Non-GAAP)	$16,974	$14,502	$17,156	$15,681	$16,971	$31,476	$31,224

Net interest income before provision (GAAP)	$61,017	$48,321	$47,534	$45,319	$44,997	$109,338	$86,472
Total tax equivalent adjustment	1,509	1,339	1,036	949	805	2,848	1,480
Adjusted net interest income (Non-GAAP)	$62,526	$49,660	$48,570	$46,268	$45,802	$112,186	$87,952

Non interest expense (GAAP)	$54,809	$38,043	$38,184	$36,395	$37,049	$92,852	$99,902
Termination of FDIC loss share agreements	—	—	—	—	—	—	(17,560)
Adjusted non interest expense (Non-GAAP)	$54,809	$38,043	$38,184	$36,395	$37,049	$92,852	$82,342

Efficiency ratio (tax equivalent) (Non-GAAP)	68.9%	59.3%	58.1%	58.7%	59.0%	64.6%	69.1%
Effect to adjust for merger-related expenses	(11.9%)	(1.4%)	(0.4%)	—	—	(7.2%)	(9.4%)
Adjusted efficiency ratio (Non-GAAP)	57.0%	57.9%	57.7%	58.7%	59.0%	57.4%	59.7%

	Endng Balance
	June 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sept. 30, 2016	June 30, 2016
Tangible common equity (Non-GAAP)
Total stockholders' equity (GAAP)	$890,258	$634,401	$552,457	$552,771	$537,971
Goodwill	(257,683)	(106,028)	(106,028)	(105,492)	(105,492)
Core deposit intangible	(26,217)	(14,785)	(15,510)	(16,267)	(17,023)
Other intangibles	(1,011)	(754)	(784)	(733)	(768)
Tangible common equity (Non-GAAP)	$605,347	$512,834	$430,135	$430,279	$414,688

Total assets (GAAP)	$6,767,479	$5,328,996	$5,078,559	$5,014,512	$4,995,289
Goodwill	(257,683)	(106,028)	(106,028)	(105,492)	(105,492)
Core deposit intangible	(26,217)	(14,785)	(15,510)	(16,267)	(17,023)
Other intangibles	(1,011)	(754)	(784)	(733)	(768)
Total tangible assets (Non-GAAP)	$6,482,568	$5,207,429	$4,956,237	$4,892,020	$4,872,006

Tangible common equity to tangible assets (Non-GAAP)	9.3%	9.8%	8.7%	8.8%	8.5%
Common tangible equity per common share (Non-GAAP)	$10.09	$10.03	$8.93	$8.96	$8.64
Common shares outstanding at period end	60,003	51,126	48,147	48,017	47,996

	Three months ended
	June 30, 2017	Mar. 31, 2017	June 30, 2016
Tax equivalent yields (Non-GAAP)
Loans, excluding PCI loans	$48,060	$35,724	$32,930
PCI loans	8,559	8,525	8,047
Taxable securities	5,961	5,001	4,767
Tax -exempt securities	1,328	1,202	943
Fed funds sold and other	836	651	622
Interest income (GAAP)	$64,744	$51,103	$47,309
Tax equivalent adjustment for Non-PCI loans	862	750	325
Tax equivalent adjustment for tax-exempt securities	647	589	480
Tax equivalent adjustments	1,509	1,339	805
Interest income (tax equivalent) (Non-GAAP)	$66,253	$52,442	$48,114

Net interest income (GAAP)	$61,017	$48,321	$44,997
Tax equivalent adjustments	1,509	1,339	805
Net interest income (tax equivalent) (Non-GAAP)	$62,526	$49,660	$45,802

Yield on Non-PCI loans	4.55%	4.39%	4.49%
Effect from tax equivalent adjustment	0.08%	0.09%	0.04%
Yield on Non-PCI loans - tax equivalent (Non-GAAP)	4.63%	4.48%	4.53%

Yield on securities	2.58%	2.47%	2.29%
Effect from tax equivalent adjustment	0.23%	0.23%	0.19%
Yield on securities - tax equivalent (Non-GAAP)	2.81%	2.71%	2.49%

Yield on interest earning assets (GAAP)	4.53%	4.41%	4.28%
Effect from tax equivalent adjustments	0.11%	0.12%	0.07%
Yield on interest earning assets - tax equivalent (Non-GAAP)	4.64%	4.52%	4.35%

Net interest spread (GAAP)	4.12%	4.04%	3.96%
Effect for tax equivalent adjustments	0.11%	0.12%	0.07%
Net interest spread (Non-GAAP)	4.23%	4.15%	4.03%

Net interest margin (GAAP)	4.27%	4.17%	4.07%
Effect from tax equivalent adjustments	0.11%	0.12%	0.07%
Net interest margin - tax equivalent (Non-GAAP)	4.38%	4.28%	4.14%

The Company, headquartered in Winter Haven, Florida between Orlando and Tampa, is a financial holding company with one nationally chartered bank, CenterState Bank, N.A. Presently, the Company operates through its network of 78 branch banking offices located in 28 counties throughout Florida, providing traditional deposit and lending products and services to its commercial and retail customers. The Company also provides correspondent banking and capital market services to over 600 community banks nationwide.

For additional information contact John C. Corbett (CEO), Stephen D. Young (COO) or Jennifer L. Idell (CFO) at 863-293-4710.

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

This report contains forward-looking statements, within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements related to future events, other future financial and operating performance, costs, revenues, economic conditions in our markets, loan performance, credit risks, collateral values and credit conditions, or business strategies, including expansion and acquisition activities 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, and actual results may differ from those set forth in the forward looking statements.

Forward-looking statements, with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of the Company or the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2016, and otherwise in our SEC reports and filings.