Southstate Bank Corporation · NYSE:SSB
Southstate Bank — SCBT Financial — Keefe, Bruyette & Woods Regional Bank Conference 2009
42 slides from Southstate Bank's conference presentation, Mar 5, 2009
Slide 1: SCBT Financial Corporation KBW Regional Bank Conference
SCBT Financial Corporation KEEFE, BRUYETTE, & WOODS Regional Bank Conference March 4 - 5, 2009
Slide 2: Forward-Looking Statements
2 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 public statements concerning matters herein. Such forward-
Slide 3: SCBT Financial Corporation
3 SCBT Financial Corporation Third largest independent commercial bank headquartered in South Carolina Serving the banking needs of customers within the Carolinas for 75 years Strong asset quality and credit underwriting remain the fundamentals of SCBT
Slide 4: Experienced Management Team
4 Experienced Management Team Years of Name Experience Current Position Robert R. Hill, Jr. 13/20 CEO John C. Pollok 13/20 COO & CFO Joe E. Burns 8/31 CCO Richard C. Mathis 9/26 CRO John F. Windley 6/32 President - SCBT Thomas S. Camp 10/33 President - SCBT of the Piedmont
Slide 5: Offices Opened in 2008
December 22, 2008—opened a full-service branch on James Island, South Carolina. December 8, 2008—opened a full-service branch in Irmo, South Carolina to replace the limited-service branch. Offices Opened in 2008
Slide 6: At A Glance
6 Closing Price as of 03-02-2009 $19.38 Price / Earnings (TTM) 12.76x Market Capitalization at 03-02-2009 ~$219MM (11,322,178 outstanding shares at 03-02-2009) Listed on the NASDAQ Global Select Market At A Glance SCBT Financial Corporation
Slide 7: Common Stock Raise (PIPE)
7 Common Stock Raise (PIPE) 7 Privately placed 1,010,000 shares at $28.00 per share Approximately 25 investors – both new and existing Closed on October 28, 2008 raising approximately $26.8 million in new capital, net of issuance cost Use of proceeds – for general corporate purposes, which may inclu
Slide 8: Capital Purchase Program (CPP)
8 Capital Purchase Program (CPP) 8 Effect of CPP Participation on Capital Levels **Actual Proforma of P/S issued to US Treasury $64.779 mm Total capital (to risk-weighted assets) 12.34% 15.27% Tier 1 capital (to risk-weighted assets) 10.42% 13.35% Tier 1 capital (to average assets) 8.54% 10.94% Tang
Slide 9: 2008 Accomplishments
9 2008 ACCOMPLISHMENTS Operating net earnings for 2008 of $22.9 million – Up 3.6% over 2007 of $22.1 million Asset quality remained solid 1. Net charge-offs – 0.26% bps vs. 0.13% 2. NPAs to total loans and OREO – 0.91% vs. 0.33% at the end of 2007 Solid loan growth – 11.2%, or $232.9 million for 200
Slide 10: Branch Footprint
10 BRANCH FOOTPRINT Columbia Charlotte Myrtle Beach Hilton Head Charlotte Greenville Columbia Myrtle Beach Lowcountry-Orangeburg Charleston Hilton Head SCBT Regions Charleston Greenville
Slide 11: South Carolina Deposit Market Share
11 Deposits Market Rank Institution ($000) Share Branches 1 Wachovia (NC) $11,692,108 17.57 % 152 2 Bank of America (NC) 7,512,671 11.29 123 3 BB&T (NC) 6,337,236 9.52 114 4 Carolina First Bank (SC) 5,521,614 8.30 82 5 First Citizens Bancorp (SC) 4,921,840 7.40 162 6 Synovus Financial (GA) 3,985,896
Slide 12: Charlotte MSA Deposit Market Share
12 Charlotte MSA Deposit Market Share SCBT Financial Corporation Deposits Market Rank Institution ($000) Share Branches 1 Wachovia (NC) $75,515,762 69.28 % 80 2 Bank of America (NC) 20,848,398 19.13 57 3 BB&T (NC) 3,438,361 3.15 55 4 Fifth Third Bank (TN) 1,846,996 1.69 34 5 SunTrust Bank (GA) 1,188
Slide 13: Unemployment Rates in SCBT Markets
13 Greenville Charlotte Myrtle Beach Hilton Head Charlotte Greenville Columbia Myrtle Beach Lowcountry-Orangeburg Charleston Hilton Head SCBT Regions 11.5% 8.2% 7.6% Unemployment Rates in SCBT Markets 9.9% 13.6% 6.9% 11.8% 6.5% 7.8% 11.8% 7.9% 7.0% 8.1% 15.5% 9.1% 8.3% Source: December 2008 Rates fr
Slide 14: S.C. Real Estate Markets
14 S.C. REAL ESTATE MARKETS Source: December 2008 Rates from S.C. Realtors MLS Stats. 2007 YTD 2008 YTD % Change 2007 2008 % Change 2007 YTD 2008 YTD % Change Beaufort 824 748 -9.2% 221 201 -9.0% 186 202 8.6% Charleston Trident 11,530 7,933 -31.2% 210 202 -3.8% 93 118 26.9% Coastal Carolinas 7,810 5
Slide 15: The South - 2009 Housing Outlook
15 THE SOUTH - 2009 HOUSING OUTLOOK Source: FORTUNE December 22, 2008 MARKET AREA 2008 Median House Price 2009 2010 MARKET AREA 2008 Median House Price 2009 2010 1 McAllen-Mission, Texas 66,630 $ 2.8% 8.0% 38 Knoxville, TN 149,730 -4.1% -0.2% 2 New Orleans 161,200 0.6% 4.2% 39 Memphis 117,590 -4.4%
Slide 16: How we measure success?
16 How we measure success ? Soundness Profitability Growth
Slide 17: Sound Balance Sheet
Sound Balance Sheet 17 YTD 12/31/08 YTD 09/30/08 Allowance at Beginning of Period $ 29,199 $ 28,760 Net Charge-Offs (Recoveries): Construction/Land Development 195 1,080 0.063% 0.073% Commercial Non-Owner Occupied 46 - 0.002% -0.001% Commercial Owner Occupied 150 - 0.002% 0.015% Consumer Owner Occup
Slide 18: Charge-offs by Region
Charge-offs by Region (dollars in thousands) YTD 12/31/08 YTD 09/30/08 Net Charge-Offs (Recoveries): Beaufort 389 $ 513 $ 0.056% 0.054% Charleston 154 37 0.009% 0.003% Grand Strand 56 634 0.040% 0.050% Low Country 464 504 0.056% 0.048% Midlands 233 67 0.030% 0.026% NCBT 7 122 0.006% 0.008% Orangebur
Slide 19: Days & Greater Delinquencies
30 Days & Greater Delinquencies 19 (dollars in thousands) Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Construction, development and land 3,088 $ 2,153 $ 3,901 $ 11,557 $ 11,919 $ Nonfarm non-residential 3,006 4,193 2,696 1,433 4,832 Multifamily residential real estate 509 1,502 1,608 980 962 Farmland 85 84 8
Slide 20: Loan Delinquencies
Loan Delinquencies 20 FDIC* Sep-08 Dec-08 Dec-08 30 to 89 Days Construction, development and land 0.79% 0.71% 2.80% Nonfarm non-residential 0.11% 0.48% 1.01% Multifamily residential real estate 0.00% 0.00% 1.41% Farmland 0.43% 0.00% 0.91% Home equity loans 0.23% 0.66% 0.93% Other 1-4 family resident
Slide 21: Non-Performing Assets Quarterly Trend
Non-Performing Assets Quarterly Trend 22 % of Total NPAs as of (dollars in thousands) Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Dec-08 Construction/Land Development 1,450 $ 1,145 $ 2,079 $ 7,214 $ 8,129 $ 38.48% Commercial Non-Owner Occupied 1,421 1,670 1,922 1,191 1,808 8.56% Commercial Owner Occupied 412
Slide 22: Non-Performing Assets by Regions
Non-Performing Assets by Regions 23 % of NPAs as of (dollars in thousands) Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Dec-08 Beaufort 2,038 $ 2,681 $ 2,421 $ 2,304 $ 2,876 $ 13.61% Charleston - 51 51 50 340 1.61% Grand Strand 285 221 124 3,728 7,392 34.99% Low Country 1,528 1,162 1,069 1,027 1,230 5.82% Mid
Slide 23: Problem Assets
Problem Assets 24 Dec-08 Sep-08 Non-accrual Loans 14,624 $ 11,564 $ Loans 90 Days or More Past Due/Accruing 293 796 Other Real Estate Owned 6,126 2,508 Other Non-performing Assets 84 172 Total 21,127 $ 15,040 $ Non-perfoming Assets/Total Assets 0.76% 0.54% Annualized Charge-offs/Average Loans 0.35%
Slide 24: Reasons For SCBT Asset Quality
25 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 Growth From Hiring Established
Slide 25: Reasons For SCBT Asset Quality (continued)
26 Reasons For SCBT Asset Quality (continued) Loan Administration Systems Built before Growth 1. Total staff of 25 led by experienced leadership team of 8 senior administrators with 207 total years of experience and 44.5 total years with SCBT 2. Robust Loan Committee and Credit Review Process 3. Cen
Slide 26: Securities Portfolio
Securities Portfolio Book Value Market Value Other Comprehensive Income (2) Other-Than- Temporary Impairment (2) AAA - A BBB BB or lower Not Rated US Agency Debentures $ 28,207 $ 28,672 $ 289 - $ $ 28,207 - $ - $ - $ Agency Mortgage-backed Securities - Fixed Rate 85,114 87,602 1,543 - - - - - Agency
Slide 27: Investment Portfolio Mix
Investment Portfolio Mix Fixed 96% Variable 4% Investment Portfolio (AFS & HTM) As of 12/31/08 Tax Equivalent Yield 5.56% Weighted Average Life 4.50 years Modified Duration 2.52 Total Carrying Value* 207,448 $ * Does not include FRB stock, FHLB stock, or investment in unconsolidated subsidiaries.
Slide 28: Net Charge-offs / Average Total Loans
29 Net Charge-offs / Average Total Loans SCBT Financial Corporation Source: BHC Performance Report. 0.17% 0.35% 0.41% 0.13% 0.16% 0.16% 0.47% 0.66% 0.24% 0.39% 0.24% 0.13% 0.15% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 2005 2006 2007 1Q '08 2Q '08 3Q '08 4Q'08 SCBTFC Peers
Slide 29: Profitability
30 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. Profitability $7,940 $10,533 $12,257 $13,834 $14,786 $14,016 $16,655 $19,805 $21,565 $
Slide 30: Net Interest Margin (TE)
31 Net Interest Margin (TE) Source: BHC Performance Report Peers are BHC with assets between $1 billion & $3 billion 3.85% 3.86% 3.91% 3.79% 3.81% 3.91% 4.04% 3.86% 3.99% 3.59% 4.07% 3.60% 3.63% 3.61% 3.78% 3.78% 3.50% 3.60% 3.70% 3.80% 3.90% 4.00% 4.10% 4.20% 4.30% 2005 2006 2007 4Q '07 1Q '08 2Q '
Slide 31: Fee Income By Type
32 Fee Income By Type SCBT Financial Corporation 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 2006 2007 2008 Service charges on deposit accounts 4,162 $ 3,805 $ 4,032 $ 4,157 $ 4,123 $ 13,377 $ 15,114 $ 16,117 $ Banckcard services income 1,070 1,156 1,276 1,247 1,153 3,422 4,136 4,832 Mortgage banking income (1) 6
Slide 32: Quality Growth – Total Assets
33 QUALITY GROWTH – TOTAL ASSETS 14.0% 8 yr CAGR (2000-2008) $970 $1,025 $1,145 $1,198 $1,439 $1,926 $2,178 $2,597 $2,767 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 (in Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 33: Loan Portfolio Summary
Loan Portfolio Summary 34 (dollars in thousands) Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Construction / land development 550,683 $ 591,139 $ 558,375 $ 558,261 $ 535,638 $ Commercial non-owner occupied 254,584 265,382 305,307 313,637 330,792 Consumer owner occupied 272,663 258,785 274,206 288,808 293,521
Slide 34: Loan Portfolio by Type
35 LOAN PORTFOLIO 35 at December 31, 2008 Loan Portfolio by Type Other Loans 1% Home Equity Loans 10% Other Income Producing Property 6% Consumer Owner Occupied 13% Commercial & Industrial 11% Commercial owner- occupied 18% Residential Lot Loans 5% All Other Construction/Land Development 18% Commerc
Slide 35: Loan Portfolio By Major Market
LOAN PORTFOLIO 36 at December 31, 2008 Loan Portfolio By Major Market Other 3% Grand Strand 7% Charleston 9% Beaufort 11% Midlands 11% Upstate 15% Piedmont - NCBT 22% Lowcountry 13% Orangeburg 9%
Slide 36: Growth - Total Deposits
37 GROWTH - Total Deposits 13.9% 8 YR CAGR (2000 – 2008) $758 $812 $898 $946 $1,174 $1,473 $1,707 $1,928 $2,153 $0 $300 $600 $900 $1,200 $1,500 $1,800 $2,100 (in Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 37: Growth – Core Deposits
38 GROWTH – Core Deposits 12.6% 7 YR CAGR (2000 – 2008) $638 $692 $749 $812 $1,012 $1,204 $1,335 $1,501 $1,643 $0 $300 $600 $900 $1,200 $1,500 $1,800 (in Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 38: Deposit Mix
39 DEPOSITS at December 31, 2008 Deposit Mix Savings 7% Interest-bearing Deposits 26% Demand Deposits 14% CDs < $100,000 24% CDs > $100,000 24% Brokered Deposits 5%
Slide 39: Deposits by Major Market
40 DEPOSITS at December 31, 2008 Deposits by Major Market Beaufort 10% Grand Strand 4% Midlands 9% Upstate 9% Piedmont - NCBT 20% Orangeburg 17% Lowcountry 22% Charleston 3% Other 6%
Slide 40: Operating Efficiency
41 OPERATING EFFICIENCY 41 45 50 50 62.95% 63.49% 64.01% 65.31% 30 35 40 45 50 55 60 2005 2006 2007 2008 30.00% 40.00% 50.00% 60.00% 70.00% Number of Branches Efficiency Ratio
Slide 41: Analyst Recommendations
42 Analyst Recommendations Analyst January 2009 Recommendation Keefe, Bruyette & Woods MARKET PERFORM FIG Partners OUTPERFORM SunTrust Robinson Humphrey BUY Sandler O’Neill + Partners HOLD Howe Barnes NEUTRAL (Feb. 2009)
Slide 42: Investor Contacts
43 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 Chief Risk Officer 520 Gervais Street Columbia, South Carolina 29201 803-771-2265 www
SCBT Financial — Keefe, Bruyette & Woods Regional Bank Conference 2009 on 6ix