Southstate Bank Corporation · NYSE:SSB
Southstate Bank — SCBT Financial — Q2 2009 Earnings Presentation
33 slides from Southstate Bank's earnings presentation, Jul 28, 2009
Slide 1: Robert R. Hill, Jr. Chief Executive Officer John C. Pollok Senior Executive Vice President
Robert R. Hill, Jr. Chief Executive Officer John C. Pollok Senior Executive Vice President and Chief Operating Officer and Chief Financial Officer
Slide 2: Forward-Looking Statements
We Believe In Our Communities 2 Forward-Looking Statements Statements contained in this presentation, which are not historical facts, are forward-looking statements. In addition, SCBT Financial Corporation (SCBT) through its senior management or directors may from time to time make forward-looking p
Slide 3: Background: Goals & Priorities
We Believe In Our Communities 4 BACKGROUND *added back preferred dividend and OTTI in 2Q09 in determining Pre-tax Pre-Provision Earn our way through the credit cycle Goals & Priorities Reduce overhead by $6.0 million Improve margin - rate floors & core funding Pre-tax Pre-provision *$13.3 mm vs. $12
Slide 4: Background: Protect our balance sheet
We Believe In Our Communities 5 BACKGROUND Protect our balance sheet Goals & Priorities Capital Raises – $56.0 million Increase ALLL - 1.45% Increase liquidity & reduce leverage Set in Fall 2008
Slide 5: Background: Prepare for the future
We Believe In Our Communities 6 BACKGROUND Prepare for the future Goals & Priorities Redeemed preferred stock & common stock warrant Increase core deposit base in all markets Enhance management depth Very selective on opportunities Bankers & teams Assisted transactions Whole bank acquisitions Set in
Slide 6: Branch Footprint
We Believe In Our Communities 7 Branch Footprint Columbia Charlotte Georgetown Hilton Head Charleston Greenville SCBT Regions Charlotte Greenville Columbia Georgetown Lowcountry-Orangeburg Charleston Hilton Head
Slide 7: S.C. Deposit Market Share
We Believe In Our Communities 8 S.C. Deposit Market Share Note: SCBT moved up from 8th per 6/30/07 FDIC Summary of Deposits Source: FDIC Summary of Deposits as of 6/30/2008. Rank Institution ($000) Deposits Share Market Branches 1 Wachovia (NC) $11,692,108 17.57% 152 2 Bank of America (NC) 7,512,671
Slide 8: Charlotte Deposit Market Share
We Believe In Our Communities 9 Charlotte Deposit Market Share Note: Ranked 8th in FDIC Summary of Deposits as of 6/30/07 as well. Source: FDIC Summary of Deposits as of 6/30/2008. Rank Institution ($000) Deposits Share Market Branches 1 Wachovia (NC) $75,515,762 69.28% 80 2 Bank of America (NC) 20,
Slide 9: Market Performance
We Believe In Our Communities 10 Market Performance Source: SNL Financial and Company filings. KRX is a composition of 50 regionally diversified mid- & small-cap banking institutions in the U.S. The index is calculated using an equal-weighted method and components comply with the GICS and ICS classi
Slide 10: Financial Condition
We Believe In Our Communities 11 Financial Condition Source: SNL Financial and Company filings. Date as of 3/31/09. KRX is a composition of 50 regionally diversified mid- & small-cap banking institutions in the U.S. The index is calculated using an equal-weighted method and components comply with th
Slide 11: Asset Quality
We Believe In Our Communities 12 Asset Quality Source: SNL Financial and Company filings. Data as of 3/31/09. Nonperforming assets include loans 90 days or more past due. Carolina’s include all publicly traded banks and thrifts in North and South Carolina with assets between $500 million and $10.0 b
Slide 12: Unemployment Rates in SCBT Markets
We Believe In Our Communities 13 Unemployment Rates in SCBT Markets Columbia Charlotte Georgetown Hilton Head Charleston Greenville SCBT Regions Charlotte Greenville Columbia Georgetown Lowcountry-Orangeburg Charleston Hilton Head 9.1% 11.3% 15.0% 11.2% 9.5% 18.5% 17.6% 10.9% 12.2% 12.1% 11.2% 10.1%
Slide 13: S.C. Real Estate Markets
We Believe In Our Communities 14 S.C. Real Estate Markets Source: June 2009 Rates from S.C. Realtors MLS Stats Beaufort 408 348 -14.7% 184 185 0.5% 204 193 -5.4% Charleston Trident 4,322 3,216 -25.6% 212 184 -13.2% 121 128 5.8% Coastal Carolinas 3,023 2,571 -15.0% 180 152 -15.6% 202 183 -9.4% Gr. Co
Slide 14: How Do We Measure Success?
We Believe In Our Communities 15 How Do We Measure Success? Soundness Profitability Growth
Slide 15: Sound Balance Sheet: Allowance for Loan Losses
We Believe In Our Communities 16 Sound Balance Sheet Allowance for Loan Losses (dollars in thousands) 3 Months Ended 6/30/09 3 Months Ended 3/31/09 QTD 6/30/09 QTD 3/31/09 Allowance at Beginning of Period $ 32,094 $ 31,525 Net Charge-Offs (Recoveries): Construction/Land Development 1,585 2,179 0.28%
Slide 16: Net Charge-offs by Markets
We Believe In Our Communities 17 Net Charge-offs by Markets (dollars in thousands) 3 Months Ended 6/30/09 3 Months Ended 3/31/09 QTD 6/30/09 QTD 3/31/09 Net Charge-Offs (Recoveries): 989 $ 812 $ 0.18% 0.14% 275 770 0.05% 0.13% 861 163 0.15% 0.03% 487 336 0.09% 0.06% 1,303 2,212 0.23% 0.39% 269 181 0
Slide 17: NPAs by Type
We Believe In Our Communities 18 NPAs by Type (dollars in thousands) Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Jun-09 Construction/Land Development 2,079 $ 7,214 $ 8,129 $ 11,611 $ 18,308 $ 46.8% Commercial Non-Owner Occupied 1,922 1,191 1,808 1,966 2,063 5.3% Commercial Owner Occupied 693 485 548 697 3,07
Slide 18: NPAs by Markets
We Believe In Our Communities 19 NPAs by Markets (dollars in thousands) Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Jun-09 Beaufort / Charleston 2,472 $ 2,354 $ 3,216 $ 8,235 $ 7,557 $ 19.33% Georgetown 124 3,728 7,392 5,387 8,990 22.99% Orangeburg / Low Country 1,564 1,939 2,044 3,998 7,388 18.89% Columbia
Slide 19: Reasons For SCBT Asset Quality
We Believe In Our Communities 20 Reasons For SCBT Asset Quality Markets did not get as overheated Credit Underwriting & Risk Selection 1. Small average loan size 2. Strong sponsors/guarantors 3. Active Pipeline Management 4. Team Approach – Joint Ownership of Portfolio by Line & Loan Administration
Slide 20: Sound Balance Sheet
We Believe In Our Communities 21 Sound Balance Sheet 2Q’08 3Q’08 4Q’08 1Q’09 2Q’09 Non-Performing Assets / Total Assets* 0.31% 0.54% 0.76% 1.09% 1.39% Non-Performing Assets / Total Loans & OREO* 0.39% 0.66% 0.91% 1.34% 1.74% Allow. Loan Losses / Total Loans* 1.28% 1.28% 1.36% 1.40% 1.45% Allow. Loan
Slide 21: Securities Portfolio
We Believe In Our Communities 22 Securities Portfolio At June 30, 2009 (Dollars in thousands) Includes held-to-maturity and available-for-sale municipal securities. (2) Net of tax effects at 35%. Note: All Agency MBS and CMOs carry the backing of the agency or GSE and have an implied AAA rating. Boo
Slide 22: Investment Portfolio Mix
We Believe In Our Communities 23 Tax Equivalent Yield 5.26% Weighted Average Life ** 5.63 years Modified Duration ** 3.39 Total Carrying Value* $175,999 Investment Portfolio Mix *Fair value for AFS securities; amortized/accreted cost for HTM securities. Does not include FRB stock, FHLB stock, or inv
Slide 23: Net Charge-Offs / Average Total Loans
We Believe In Our Communities 24 Net Charge-Offs / Average Total Loans Source: BHC Performance Report. Second Quarter 2009 not available. 0.17% 0.16% 0.13% 0.09% 0.35% 0.79% 0.41% 0.74% 0.13% 0.24% 0.24% 0.47% 0.39% 0.74% 0.66% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 2006 2007 1Q
Slide 24: Net Interest Margin (TE)
We Believe In Our Communities 25 Net Interest Margin (TE) Source: BHC Performance Report. Second Quarter 2009 not available. Peers are BHC with assets between $1 billion & $3 billion 3.81% 3.91% 3.85% 3.79% 3.86% 3.87% 3.86% 4.07% 3.99% 3.78% 3.59% 3.63% 3.61% 3.37% 3.60% 3.20% 3.30% 3.40% 3.50% 3.6
Slide 25: Profitability
We Believe In Our Communities 26 Profitability Per share data reflect a ten percent stock dividend distributed on December 6, 2002, a five percent stock dividend distributed on January 1, 2005 and a five percent stock dividend distributed on March 23, 2007. For 2008, the loss related to the disposal
Slide 26: Fee Income By Type
We Believe In Our Communities 27 Fee Income By Type 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 Service charges on deposit accounts 4,032 $ 4,157 $ 4,123 $ 3,585 $ 3,819 $ Banckcard services income 1,276 1,247 1,153 1,182 1,290 Mortgage banking income 1,240 507 678 1,261 2,134 Trust and investment services income
Slide 27: Loan Portfolio Summary - Type
We Believe In Our Communities 28 Loan Portfolio Summary - Type (dollars in thousands) Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Construction / land development 558,375 $ 558,261 $ 535,638 $ 519,689 $ 489,730 $ Commercial non-owner occupied 305,307 313,637 330,792 325,132 318,909 Consumer owner occupied 274
Slide 28: Loan Portfolio – Type & Market
We Believe In Our Communities 29 Loan Portfolio – Type & Market Loan Portfolio by Type at June 30, 2009 Commercial owner occupied 19% Commercial & Industrial 10% Consumer Owner Occupied 13% Other Income Producing Property 6% Home Equity Loans 11% Consumer 4% Other Loans 1% Commercial non-owner occup
Slide 29: Growth – Total & Core Deposits
We Believe In Our Communities 30 Growth – Total & Core Deposits 12.6% 8 YR CAGR (2000 – 2008) Growth – Total Deposits Growth – Core Deposits 13.9% 8 YR CAGR (2000 – 2008) Growth – Total Deposits $638 $692 $749 $812 $1,012 $1,204 $1,335 $1,501 $1,643 $1,657 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400
Slide 30: Deposits – Mix & Market
We Believe In Our Communities 31 Deposits – Mix & Market Deposits by Major Market at June 30, 2009 CDs < $100,000 23% CDs> $100,000 24% Brokered Deposits 0% Demand Deposits 15% Savings 7% Interest-bearing Deposits 31% Charlotte – NCBT 20% Georgetown 4% Beaufort 11% Other 3% Charleston 4% Lowcountry
Slide 31: Operating Efficiency
We Believe In Our Communities 32 Operating Efficiency 49 49 50 50 45 62.95% 65.33% 63.49% 62.41% 60.88% 30 35 40 45 50 55 60 2006 2007 2008 1Q09 2Q09 30% 35% 40% 45% 50% 55% 60% 65% 70% Number of Branches Efficiency Ratio
Slide 32: Analyst Recommendations
We Believe In Our Communities 33 Analyst Recommendations ANALYST Second Quarter 2009 RECOMMENDATION FIG Partners OUTPERFORM Keefe, Bruyette & Woods MARKET PERFORM SunTrust Robinson Humphrey BUY Howe Barnes Hoefer & Arnett, Inc. NEUTRAL Sandler O’Neill + Partners HOLD
Slide 33: Investor Contacts
We Believe In Our Communities 34 Investor Contacts Robert R. Hill, Jr. Chief Executive Officer John C. Pollok Senior Executive Vice President and Chief Operating Officer and Chief Financial Officer Richard C. Mathis Executive Vice President and Treasurer 520 Gervais Street Columbia, South Carolina 2