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THREE SHORES BANCORPORATION A N N U A L

R E P O R T

2019

ANNUAL REPORT

T H R E E

S H O R E S

B A N C O R P O R A T I O N


WE HONOR INTEGRIT Y AND ETHICAL BEHAVIOR.


TABLE OF CONTENTS

Letter from Gideon Haymaker

2

Letter from Philip Rich

5

CLIENT PROFILES BDO USA, LLP

8

Bowden Eye & Associates

10

Circus Arts Conservatory

12

CRM Companies Inc.

14

MedReceivables Advisor, LLC

16

AMUCO Inc.

18

Foundation for Foster Children

20

Software Resources, Inc.

22

Whitestone Construction Group, LLC

24

Sunday Cool

26

MSL CPA’s & Advisors

28

United Financial Group

30

RIP-IT 32

INVESTING IN OUR COMMUNITIES Pendana at West Lakes

36

Lift Orlando

37

Client Service Wheel

38

Products and Services

39

Consolidated Balance Sheets

40

Consolidated Statements of Earnings

41

Board and Senior Leadership

42

Advisory Boards

44

Locations 47 Values & Promise

48


LETTER FROM THE CEO

DEAR SHAREHOLDERS AND CLIENTS, The year 2019 marked our company’s 13th successful year of operation. In many ways, 2019 was a rollercoaster ride for Three Shores Bancorporation, Inc. (TSB), complete with market-driven, rapid ups and downs, and sharp turns along the way. Near the end of 2018, a sharp sell-off of equities occurred, driven by U.S.-China trade concerns, fear of slower economic growth, and low oil prices from a supply glut. This set the table going into 2019. Then the market sharply rebounded, supported by more policy from Central Banks around the world and optimism about a potential U.S.-China trade deal. Going into 2019, most economists were predicting higher levels of interest rates throughout the year. In fact, the Federal Reserve both raised and lowered the Fed Funds rate during the reporting period. We saw the Fed raise rates in December of 2018, then lowered them in July of 2019 for the first time in 11 years. Along the way, the yield curve inverted—which is often a sign, but no guarantee, of a recession. This produces a very difficult set of market conditions for bank balance sheet management. As of this writing, the yield curve is positive across future maturities, and optimism has generally returned to the equity markets with no indication of looming recession. In last year’s annual report, we stated that during 2019 we planned to strategically reposition our balance sheet to substantially lessen reliance on wholesale lending at the margin funded by more expensive wholesale deposits. We also had the goal of improving our net interest margin. We further stated that as a result of this strategy, we would slow our historic balance sheet growth trends, but overall make us a more valuable company. We were successful in each of these endeavors by reducing our shared national loan portfolio by nearly 40 percent, reducing our reliance on wholesale funding by a third, improving our net interest margin modestly, and substantially improving our tangible book value per share by $.91, or approximately 16 percent over the course of the year.

2

Continuing with the wild ride theme, we saw a rash of unexpected pay downs and payoffs within our loan portfolio as a handful of large companies sold or took advantage of looser terms from non-bank lending competition. Fortunately, our loan production was strong during the last half of the year, which quickly replaced the lost balances, but we experienced a year of heightened churn to be able to get back to roughly the same place at which we began the year. As a result, as of December 31, 2019, our consolidated balance sheet ended roughly flat at $1.87 billion, compared to $1.88 at the end of 2018. Loans, net of allowance, and deposits were both two percent lower, with a 2019 year end at $1.35 billion and


GIDEON T. HAYMAKER

$1.51 billion, respectively, compared to $1.38 billion and $1.55 billion as of end of year 2018. Shareholders’ equity increased by more than $24 million, or approximately 17 percent. Off balance sheet, during the year we improved the reporting metrics for our asset management business to more fully capture the entire scope of our operation. We now segregate our assets under management (AUM) for which we have full discretion to manage on behalf of our clients and add to that figure other assets on which we are paid a fee to custody or to otherwise provide advice. We then report the entire balance as assets under advisement (AUA). As of December 31, 2019, total AUM ended at $631.8 million, and total AUA was $936.2 million. AUM balances increased 16 percent, or $88.2 million over the 12-month comparison. Turning to the income statement, we were severely impacted by a significant fraud loss that was reported during the first quarter of 2019. We continue our efforts to recover that loss. For the full year 2019, TSB earned $14.7 million consolidated net after taxes, versus $17.2 million the year before. For the fourth quarter of 2019, TSB earned $5.1 million net after taxes, or 13 percent better than the $4.5 million net for the fourth quarter a year earlier. Our credit quality remains excellent as we are ever vigilant about lending deep into a long economic recovery and our enterprise-wide risk management processes are under constant evolution. Our allowance for loan losses to total loans grew nicely over the year, from 1.00 percent coverage as of year-end 2018 to 1.09 percent as of the end of 2019. Similarly, TSB’s capital ratios have improved through retained earnings to 8.65 percent tier one leverage and 12.31 percent total risk–based as of December 31, 2019, from 7.64 percent and 11.0 percent as of year-end 2018.

While we never know what the future may hold, the professionals at TSB are excited to get back on offense with new markets, more talent, and new capabilities, which are all on tap for 2020. Our universal client servicing model and advisory market approach—along with deeply experienced financial professionals to deliver them both—are what provides us a competitive advantage in the markets we serve. For some years now, we have had the honor and privilege to highlight in this report a small representative cross section of clients with whom we enjoy a strong business relationship and for whom we have the great pleasure of providing service and advice. Our clients come from diverse industries and backgrounds, but they all share the same ethics and demonstrate the personal traits to be successful in any endeavor they choose.

I hope 2020 brings you and your loved ones good health, prosperity, and high spirits. I also hope you enjoy reading this report and are as excited to be a part of this company as we are.

Sincerely,

Gideon T. Haymaker Founder and Chief Executive Officer

3


4


LETTER FROM THE CHIEF MARKET STR ATEGIST

THE FUTURE OF FORECASTING “The stock market has predicted nine of the last five recessions.” – Paul Samulson “Go ahead, make a prediction – just stick to what, forget about when.” - Unknown We are in the early innings of 2020, and in keeping with long tradition, Wall Street and other sources of infallible foresight are busy publishing their annual forecasts. Some are predicting the end of this long and generous expansion. After all, it is now the longest expansion in modern history. This prediction has an advantage—if it proves wrong it can always be recycled until it proves correct. Others, perhaps more cognizant of the challenge of making a buck off a frightened investor, are predicting continued good fortune and a rising index. Both arguments can find support in empirical measures. Manufacturing and agriculture are in full retreat; however, consumer spending remains bullish as ever. Just a few months ago, the yield curve briefly inverted. This has been one of the most reliable indicators of an impending recession since World War II. This time it may have sent out a false alarm. The yield curve has recovered a modest slope— the 10-year Treasury is yielding 29 basis points more than the 2-year—and no recession yet. The Conference Board publishes an index of Leading Economic Indicators. Its 11 components can each claim a logical relationship to the future direction of the economy, and thus, indirectly, to markets. Parts of it are a little circular. The shape of the yield curve and the direction of the stock market might be as much an effect of the economy as any cause of a change in its direction, but certainly readings on employment, manufacturing, and consumer sentiment are logical indicators of future activity. The LEI index has a remarkably good record of indicating future recessions and attendant downturns in the stock market. The problem with using it as a forecasting tool is twofold. Its lead time can be anywhere from immediate to 18 months, and it tends to deliver a lot of false positives. That neutralizes a lot of its utility as a forecasting tool. The Federal Reserve is one of the few parts of our government that is hugely profitable. It literally makes money. It remits its net profit to the U.S. Treasury each quarter. It can afford

to employ armies of very smart, thoroughly credentialed economists. One of the things these economists forecast is the future direction of interest rates. Since the Federal Reserve has some influence over the direction of interest rates, to some extent, they are predicting the future behavior of their own organization. How good are they at doing this? Not very. This pilot is no good at predicting his course. So, if our record at prediction is so lousy, why do we keep doing it? Well, it does help fill the 24-hour news cycle, not just in January, but whenever they need help filling it, and that’s no small feat. More constructively, a variety of forecasts may help us arrive at investment strategies that are not dependent on the reliability of any one forecast. To that end, we suggest a few tactics that may be well adapted to an unpredictable world. First, diversify. Hold risk assets (stocks) sufficient to drive the returns you need to meet future needs and risk mitigation assets (cash and bonds) sufficient to survive whatever slings and arrows our forecast might fail to foretell. Second, rebalance to your target allocation on a schedule that is quite independent of either the news or anybody else’s predictions. In the good times, you will take some profits; in the bad times, you will pick up some bargains. Finally, remain aware of the cost of investing both in fees and in taxes. These can be managed to the benefit of the investor without any reliance on our poor ability to predict anything. Do these consistently, and I can predict a much higher certainty of future success. Best wishes for a prosperous 2020. Sincerely,

Philip Rich Chief Market Strategist 5


CLIENT PROFILES

BDO USA, LLP

BOWDEN EYE & ASSOCIATES

Page 8

Page 10

CIRCUS ARTS CONSERVATORY

CRM COMPANIES INC.

Page 12

Page 14

MEDRECEIVABLES ADVISOR, LLC Page 16

6

AMUCO INC. Page 18


FOUNDATION FOR FOSTER CHILDREN

SOFTWARE RESOURCES, INC. Page 22

Page 20

WHITESTONE CONSTRUCTION GROUP, LLC

SUNDAY COOL Page 26

Page 24

MSL CPA’S & ADVISORS

UNITED FINANCIAL GROUP

Page 28

Page 30

RIP-IT Page 32

7


OUR FOCUS IS ON YOU

8


BDO USA, LLP “My Client Advisor handles all my needs as opposed to being passed around to multiple people. I have a genuine relationship with Seaside and don’t feel like just another customer.”

Richard Brock, Tax Partner

BDO delivers assurance, tax, and financial advisory services to clients throughout the country and around the globe. They offer numerous industry-specific practices, world-class resources, and an unparalleled commitment to meeting their clients’ needs. BDO currently serves more than 400 publicly traded domestic and international clients. BDO USA is a member of BDO International, the world’s fifth largest accounting network. 9


BOWDEN EYE & ASSOCIATES “Working with Seaside has been a refreshing experience. Their personalized and attentive service fits with the busy professional lifestyle. Everyone plays a role in today’s business and having a great banking relationship is on the top of the list.”

Dr. Frank W. Bowden, III, Founder and Owner

Dr. Frank W. Bowden, III, enjoyed a distinguished 12-year career in the military, serving as a battalion surgeon for the 1st Battalion, 4th Marines (REIN) in 29 Palms, California; a general medicine officer for the U.S. Marine Corps, also in 29 Palms; and a staff ophthalmologist for the U.S. Naval Service at Naval Hospital, Jacksonville. He was awarded the U.S. Navy Commendation Medal in 1982 and the U.S. Navy Achievement Medal in 1987. In 1988 he established a private ophthalmology practice. A couple years later he opened the Baptist Eye Institute, and then in 2001, he established Bowden Eye & Associates, which serves hundreds of patients with its seven physicians and six locations. 10


OUR FOCUS IS ON YOU

11


OUR FOCUS IS ON YOU

12


CIRCUS ARTS CONSERVATORY “Circus is Family and banking with Seaside expanded ours. Seaside services were, and remain, critical to our growth. In the process, Seaside became Family.”

Pedro Reis, Founder/President & CEO

The Circus Arts Conservatory was founded in 1997 and is a onering European-style circus that presents professional performances from around the globe. It is Florida’s only professional, not-for-profit circus and focuses on three strategic initiatives: educational outreach, community engagement, and the history and legacy of circus arts. Recognized for its leadership in both artistic programming, sound management, and fiscal practice, The Circus Arts Conservatory received the Greater Sarasota Chamber of Commerce’s Small Business Award in the Arts Organization of the Year category in 2005. In 2012 and 2015, the Chamber awarded The Circus Arts Conservatory with its Small Business Cultural Organization of the Year Award. 13


CRM COMPANIES INC. “Seaside has provided CRM Companies with a regional banking relationship that has assisted us in Tampa and throughout SW Florida. The personalized relationship with the regional presidents and local offices has been a notable and appreciated difference in our operations.�

Steve Calabrese, President

Greg Calabrese, Principal

CRM Companies is a full-service commercial/industrial real estate firm that specializes in appraisal, management, construction/ development, and design services with offices in Cleveland, Ohio, and Bonita Springs, Florida. CRM originated in 1976, and today is primarily involved in real estate investment, consulting, development, construction, and property management. They have extensive operational/management expertise and ownership in retail (suburban centers/specific use properties), office buildings, suburban/downtown high rises, apartments, industrial/flex product, hotels, and asset repositioning for a full complement of properties—including golf courses. 14


OUR FOCUS IS ON YOU

15


OUR FOCUS IS ON YOU

16


MEDRECEIVABLES ADVISOR, LLC “Seaside is the quintessential full-service private bank. They understand the needs of busy professional entrepreneurs and provide exceptional personalized service. I couldn’t operate my business without them.”

Donald T. Cohen, CPA, Chief Executive Officer

MedReceivables Advisor, LLC is a full-service outsourcing medical billing company that provides hospital-based physicians and physician groups the expert assistance they need to effectively bill for their services and maximize their profitability. As president and founder of MedReceivables and MedReceivables Advisor, Donald has 31 years of accounting experience related to the financial complexities facing Florida’s hospital-based medical practices. Donald began his career in 1980 as an Internal Revenue agent. In addition, he was managing partner of an accounting firm specializing in tax and financial planning for high net worth clients. He has focused on medical billing as well as built a Florida CPA practice offering tax and financial accounting services to physicians and physician groups. 17


AMUCO INC. “Seaside is a solid bank with exceptional customer service and financial experts. Their rates and conditions are very competitive. But above all, the customer service is the best by far. Seaside makes a huge effort to understand my business.�

Klaus Grau, President

AMUCO Inc. was founded more than 45 years ago and is well recognized throughout the world as an international chemical trading company that sources its chemicals worldwide. They are strategically located in South Florida, the gateway to the Americas, with an additional network of distributors and branches in Colombia, PanamĂĄ, Germany, and Asia. AMUCO Inc. has a highly trained and qualified staff, holding degrees in chemical, food, and mechanical engineering, as well as business and marketing. They work closely with suppliers around the world through tight personal contacts, constant visits to the factories and participation in seminars, fairs, and exhibitions. 18


OUR FOCUS IS ON YOU

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OUR FOCUS IS ON YOU

20


FOUNDATION FOR FOSTER CHILDREN “The Seaside team has gone beyond just our banking needs and has helped us get connected with other businesses in the community to better serve local at-risk youth. From the financial workshops they have hosted to personal visits, everything Seaside has done is genuine and supportive.�

Robert Newkirk, Executive Director

The Foundation for Foster Children (FFC) was formed to address the staggering statistics surrounding foster children in the greater Central Florida area. The mission of the Foundation for Foster Children is to create meaningful connections for children in foster care. FFC accomplishes its mission through three signature programs: Educate, Enrich, and Empower. The Educate program provides foster children the resources they need to achieve academic success. Enrich allows foster children to participate in activities that create normalcy in their lives like athletics and the arts; and Empower builds life skills in foster children and helps prepare them for adulthood. 21


SOFTWARE RESOURCES, INC. “We wanted a high-service, high-touch banking partner that cared about their clients, and we found it at Seaside. Whenever we have a question or need, our Client Advisor and his team are quick to respond and do everything to ensure we have what we need, when we need it.�

Tammy Giaimo, Chief Executive Officer

John Giaimo, President

Software Resources, Inc. (SRI) is a trusted recruiting and staffing services firm and women-owned business enterprise founded in 1992. Headquartered just outside Orlando in Lake Mary, Florida, SRI has branches and sales professionals across the United States, serving clients and job-seekers nationwide. They connect the right people to the right jobs. Specializing in technology (IT, creative, and marketing), finance, and accounting gives SRI access to the best candidates in these fields. 22


OUR FOCUS IS ON YOU

23


OUR FOCUS IS ON YOU

24


WHITESTONE CONSTRUCTION GROUP, LLC “Seaside is always there for us for all of our banking needs. Their support helps us to continue to grow and be successful!”

Mark Filburn, Owner

Since its inception, Whitestone Construction Group has retained its core value proposition and principles—creating, evolving, and maturing relationships with a select client base in specific sectors including multi-family, senior living facilities, and tax credit initiatives. With thousands of units delivered and an extensive roster of new projects under contract, Whitestone has acquired a leadership position in these uniquely demanding markets. From renovation to new construction, Whitestone’s capabilities are diverse. Projects are scrutinized from the ground up by each team member ensuring results meet or exceed the expectation. Whitestone’s accessibility to its core clients have resulted in the company establishing strategic offices in both Texas and Florida. 25


SUNDAY COOL “Seaside has helped us a great deal during our rapid growth. They offer the products we need, present creative solutions, and our Client Advisor provides us with exceptional service. As a retired banker, I believe Seaside meets the needs of the small business and its owners better than any other bank.”

Steve Hooper, President

Jeff Hooper, Chief Operating Officer

Sunday Cool is a custom apparel company located in Tavares, Florida, focused on the needs of churches, camps, and nonprofits across the country. The company offers its clients custom art solutions, soft to the touch, water-based screen printing, and the fastest turnaround times in the industry. Sunday Cool’s mission is to serve those who serve by offering a remarkable buying experience. 26


OUR FOCUS IS ON YOU

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OUR FOCUS IS ON YOU

28


MSL CPA’S & ADVISORS “Seaside shares our values. Seaside and MSL both have reputations for being nimble and easy to work with. We both cultivate high-touch, long-term relationships with our clients, and we both take pride in helping our clients make more money and keep more of what they’ve made.”

Daniel J. O’Keefe, CPA, CFE, MBA, Shareholder

Far more than just a CPA firm, MSL is a trusted business advisor in all phases of an organization’s growth. In addition to audit services and tax advice, MSL provides their clients with all levels of business consulting from development and start-up to maturity and expansion. With over 40 years of advising successful companies, they have valuable experience and benchmarking tools to help their clients identify their areas of opportunity whether they are operational, financial, or compliance. 29


UNITED FINANCIAL GROUP “During our 11 year relationship, Seaside has provided us with exemplary service. Our Client Advisor is easy to communicate with, has adapted to our needs, and goes above and beyond to meet any specific requirements our business might need.�

Howard Kaplan, Emeritus Chief Executive Officer

Andrew Kaplan, President

Established in 1981, United Financial Group is an independent, privately-owned, direct lender, specializing in heavy equipment leasing and financing. They provide lease-to-own financing, capital loans, refinances, and leasing programs for all types of industries. 30


OUR FOCUS IS ON YOU

31


OUR FOCUS IS ON YOU

32


RIP-IT “Seaside takes the time to understand the unique needs of our business and acts as a true partner, crafting solutions that fit those unique needs. Their empathetic approach to serving us has been instrumental in helping us achieve our goals.”

Matthew Polstein, President

Jason Polstein, Chief Executive Officer

Since its inception, RIP-IT’s mission has been to elevate the player experience through expertly designed, carefully crafted, highperformance softball gear—created exclusively with athletes who inspire them on and off the field. During the early years of RIP-IT, face guards were sold out of the family’s garage, but the company quickly outgrew the space and now operate out of a large distribution center located in Orlando. The demand for safe, stylish softball gear has never let up, and today, RIP-IT is the most trusted name in softball. 33


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IN VESTING IN OUR COMMUNITIES

AT SEASIDE NATIONAL BANK & TRUST, giving back to the communities we serve is part of who we are. Since 2006, we have consistently contributed our time, support, guidance and money to nonprofit organizations throughout the state of Florida. We pride ourselves on being good corporate citizens who encourage and support our professionals’ involvement in business, civic, and social activities. Taking part in community activities, as a representative of Seaside, is a direct reflection of our values. We encourage all Seaside professionals to hold leadership positions within the community, selecting organizations that are personally rewarding for them, and that are consistent with Seaside’s values and the needs within the community. Just a few of the many organizations where Seaside bankers volunteer their time: • A Gift for Teaching • Aspire Health Partners • Beaches Habitat for Humanity • Boys and Girls Clubs • Central Florida Women’s League Foundation • Florida Community Loan Fund • Florida United Methodist Children’s Home • Foundation for Foster Children • Goodwill Manasota • Habitat for Humanity Martin County • Habitat for Humanity Greater Orlando and Osceola • Heart of Florida United Way • JA of the Palm Beaches and Treasure Coast • JA of Central Florida • JA of North Florida • JA of SW Florida • Neighborhood Lending Partners • Salvation Army • Seniors First • Visiting Nurses Foundation • Winter Park Day Nursery

1,814 community service hours volunteered

$37.459 million in investment in our communities

35


IN VESTING IN OUR COMMUNITIES

PENDANA AT WEST LAKES In addition to volunteering our time, Seaside is committed to investing in our communities. We are proud of our substantial financial involvement in Pendana at West Lakes, which is part of a bold, transformative vision of Lift Orlando. Designed to uplift and support the people who call it home, Pendana is an affordable mixedincome apartment community just west of downtown Orlando. Pendana has made more than a few housing dreams come true, and no one is more proud and grateful than Charlene Caines and her family! A single mother of young boys, Ms. Caines was previously sharing a cramped two-bedroom apartment with her sister. She applied for a unit at Pendana and was ecstatic to have qualified for a three-bedroom space for her family at a rate she can afford. Now she and her boys love calling Pendana home, and she has taken full advantage of the many amenities Pendana has to offer, including the financial workshops and coaching provided to Pendana residents in cooperation with the West Lakes Financial Wellbeing Center.

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LIFT ORLANDO

partner in Pendana at West Lakes Lift Orlando is a nonprofit organization comprised of business leaders partnering with residents to accelerate community transformation. Lift Orlando’s holistic approach is inspired and informed by the highly successful model of Purpose Built Communities. This framework of holistic community revitalization includes a cradle-tocollege-to-career education pipeline, a mixedincome housing strategy, and community wellness through a rich network of community and support services. Visit LiftOrlando.org to learn more.

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SEASIDE NATIONAL BANK & TRUST

Investment Management Services

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F

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A

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V AT E W E A LT

H

O M

E

RC

SE

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PRI

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C

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Trust Services

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AN

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P R I VAT E

CLIENT

ASIDE

L B ANK

Private/Commercial Banking

38

G

EN

U L

LS ICE

Personal Lending

Brokerage Services

ER V

Commercial Real Estate Lending

M

Residential Lending

V AD

I

ING

Deposit Services

Insurance


PRODUCTS AND SERVICES

PRIVATE BANKING

COMMERCIAL BANKING

WEALTH MANAGEMENT

Checking Seaside Select Checking Savings Money Market Accounts Certificate of Deposit CDARs & ICS Individual Retirement Accounts Lines of Credit Loans

Credit Cards Residential Loans Safe Deposit Box Personal Internet Banking ATM Network Mobile Banking Digital Deposit Debit Cards HSA

Business Checking Business Select Checking Business Savings Business Money Market Certificate of Deposit CDARs & ICS Business Lines of Credit Business Loans Credit Cards Commercial Real Estate Loans SBA Financing Merchant Services Business Internet Banking Remote Deposit Capture

Purchasing Cards Business Online Payroll ACH Origination Wire Transfers Cash Vault Services Courier Services ACH Debit Block Positive Pay Mobile Banking Account Reconciliation Sweep Accounts Lockbox Foreign Exchange Debit Cards

Fiduciary Services Investment Management Financial Planning Estate Planning Estate Settlement Retirement Plans Investment Consultation

Insurance Capital Markets Custody Services Brokerage Services Bill Pay Services Annuities

39


CONSOLIDATED BAL ANCE SHEETS

AT D EC EM B ER 31

Three Shores Bancorporation, Inc. Consolidated Balance Sheets (in thousands)

2 019

2 018

2 017

$ 42,856

$ 42,455

$ 43,389

$ 2,000

$ 2,000

$ 5,425

Total Cash and Cash Equivalents

$ 44,856

$ 44,455

$ 48,814

Securities Available for Sale

$ 261,790

$ 294,624

$ 276,044

Securities Held to Maturity

$ 154,327

$ 124,014

$ 98,889

$ 165

$ –

$ –

$ 1,369,634

$ 1,396,679

$ 1,285,030

$ (14,868)

$ (13,940)

$ (12,759)

$ 6,820

$ 7,260

$ 5,775

ASSETS Cash and Due from Banks Federal Funds Sold

Loans Held for Sale Loans, Gross Allowance for Loan Losses Accrued Interest Receivable

$ 1,943

$ 2,183

$ 2,522

Right of Use Lease Assets

$ 21,524

$ –

$ –

Restricted Securities

$ 11,095

$ 10,894

$ 11,333

Premises and Equipment, Net

Deferred Income Taxes Other Assets

Total Assets

$ 6,117

$ 8,118

$ 7,036

$ 10,671

$ 8,951

$ 9,876

$ 1,874,074

$ 1,883,238

$ 1,732,560

$ 287,358

$ 293,744

$ 281,774

LIABILITIES Non-interest-bearing Demand Deposits NOW Deposits

$ 194,170

$ 233,163

$ 151,759

Money Market and Savings Deposits

$ 737,223

$ 793,347

$ 738,807

Time Deposits

$ 296,307

$ 232,376

$ 216,328

$ 1,515,058

$ 1,552,630

$ 1,388,668

$ 149,253

$ 170,280

$ 206,239

Total Deposits Other Borrowings Accrued Interest Payable

$ 1,339

$ 964

$ 833

Official Checks

$ 5,314

$ 6,696

$ 3,544

Right of Use Lease Liabilities

$ 22,280

$ –

$ –

Other Liabilities

$ 11,598

$ 7,579

$ 5,009

$ 1,704,842

$ 1,738,149

$ 1,604,293

$ 24,738

$ 24,738

$ 24,738

Common Stock and Additional Paid-in Capital

$ 113,901

$ 111,162

$ 108,744

Retained Earnings

$ 30,525

$ 15,776

$ (1,396)

$ 68

$ (6,587)

$ (3,819)

$ 169,232

$ 145,089

$ 128,267

$ 1,874,074

$ 1,883,238

$ 1,732,560

Total Liabilities

STOCKHOLDERS’ EQUITY Preferred Stock

Accumulated Other Comprehensive Income (Loss)

Total Stockholders’ Equity 40

Total Liabilities & Stockholders’ Equity


CONSOLIDATED STATEMENTS OF EARNINGS Three Shores Bancorporation, Inc. Consolidated Statements of Earnings (in thousands)

2 019

2 018

2 017

INCOME I N T ER E S T I N CO M E: Loans

$ 65,030

$ 61,779

$ 49,708

Securities

$ 11,528

$ 10,497

$ 9,108

$ 1,806

$ 1,639

$ 1,039

$ 78,364

$ 73,915

$ 59,855

$ 23,484

$ 18,273

$ 8,305

$ 4,724

$ 3,835

$ 3,009

$ 28,208

$ 22,108

$ 11,314

$ 50,156

$ 51,807

$ 48,541

$ 5,054

$ 1,499

$ 666

$ 45,102

$ 50,308

$ 47,875

Asset Advisory Services

$ 3,627

$ 3,209

$ 2,857

Insurance Income

$ 2,806

$ 2,388

$ 2,071

Service Charges on Deposit Accounts

$ 675

$ 682

$ 692

Gain on Sales of Loans Held for Sale

$ 141

$ 119

$ 359

$ 2,768

$ 2,549

$ 1,609

$ 10,017

$ 8,947

$ 7,588

Other

Total Interest Income I N T ER E S T E X PEN S E: Deposits Borrowings

Total Interest Expense Net Interest Income Provision for Loan Losses

Net Interest Income After Provision for Loan Losses N O N - I N T ER E S T I N CO M E:

Other

Total Non-interest Income N O N - I N T ER E S T E X PEN S E S:

$ 24,184

$ 23,612

$ 23,483

Occupancy and Equipment

$ 4,413

$ 4,373

$ 4,534

Data Processing

Salaries and Employee Benefits

$ 1,792

$ 1,797

$ 1,585

FDIC Insurance Premiums

$ 797

$ 1,544

$ 1,452

Professional Fees

$ 996

$ 989

$ 720

$ 295

$ 238

$ 193

Other General and Administrative

$ 3,975

$ 3,896

$ 3,555

Total Non-interest Expenses

$ 36,452

$ 36,449

$ 35,522

$ 18,667

$ 22,806

$ 19,941

$ 3,918

$ 5,634

$ 7,269

$ 14,749

$ 17,172

$ 12,672

Advertising

Earnings Before Income Taxes Income Taxes

Net Earnings Tax Law Impact1

$ 3,324

Net Earnings After Tax Law ImpactÂ

$ 9,348

1

Relates to write down of deferred income tax assets after the corporate federal tax rate was reduced from 35% to 21%

41


BOARD OF DIRECTORS

Thomas O’Shane* Chairman of the Board, Seaside National Bank & Trust

 harles “Chas” C Bailes III*

Chairman & CEO, ABC Fine Wine & Spirits

Gideon Haymaker* Steve Hayworth President & CEO, Seaside National Bank & Trust

Vice Chairman, Seaside National Bank & Trust

*Three Shores Board of Directors:

42

Thomas O’Shane, Chair

John Cochran

Gideon Haymaker

Rick Walsh

Charles “Chas” Bailes III

Brian Golson

John Cochran*

Glen Davis

Michael Fess

Brian Golson*

Toni Jennings

Jack Thompson

Ed Timberlake

Rick Walsh*

Principal, Lovell Minnick Partners LLC

Chairman of the Board, Jack Jennings & Sons

Former President & CEO, Schuff Steel-Atlantic, Inc.

Chief Executive Officer and Chief Investment Officer, Pawson Capital Management

Founder & Owner, Equity Partners, Inc.

Chairman, Seaside National Bank & Trust, Central Florida Board of Directors

Managing Partner, Parthenon Capital Partners’ San Francisco Office

President, KnobHill Group


SEASIDE NATIONAL BANK & TRUST

SENIOR LEADERSHIP

Gideon Haymaker

Nancy Elberg

Barry Griffiths

Steve Hayworth

Lara Lee

Tim Myers

Philip Rich

Dave Robinson

Kevin Rogers

Gary Young

President & CEO

Central Florida Regional President

Director of Human Capital

Chief Market Strategist

Chief Financial Officer

Chief Credit Officer

Vice Chair, Seaside National Bank & Trust

South Florida Regional President

Chief Marketing Officer

Mike McMullan

Coastal Florida Regional President

Chief Operations Officer

SEASIDE INSURANCE, INC.

Hardy Vaughn President, Seaside Insurance, Inc.

Cindi Johnston

Director of Group Benefits, Seaside Insurance, Inc.

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SEASIDE NATIONAL BANK & TRUST

CENTRAL FLORIDA ADVISORY BOARD

Christi Ashby

Founder & Owner, Orange Appeal Magazine

Mark Israel

President, Universal Engineering Sciences, Inc.

Rita Lowndes

Community Volunteer

Alex Martins

Chief Executive Officer, Orlando Magic

Tim Myers

Ed Timberlake

Price Schwenck

James B. Stallings, Jr. Charlie Weed

Larry Rice

Norman Taplin Esq.

President, Seaside National Bank & Trust, Central Florida

Chairman, Seaside National Bank & Trust, Central Florida Advisory Board

NORTH FLORIDA ADVISORY BOARD

Ernie Bono

Retired Vice President, Prudential Insurance

Richard Brock Tax Partner, BDO

Jim Francis CEO, Micro-Ant

Don Roberts

President & CEO, WEBSTAR Technology Group

Chairman, North Florida Advisory Board

CEO, PS27 Ventures

SOUTH FLORIDA ADVISORY BOARD

Don Cohen

CPA President and Founder of MedReceivables

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Frank Dolph

Founder, Dolph and Associates

Howard Goldstein, CPA

Roberto Pelaez

Banking and Financial Partner and Director Business Consultant, Miami and Entrepreneurial Services, Appelrouth Farah & Co., P.A.

Partner RVG and Company CPA’s

Taplin and Associates

Retired Banker


SOUTHWEST FLORIDA ADVISORY BOARD

Steve Calabrese Managing Director, CRM, Inc.

Jimmy Dascani

CEO, Landmark Hospital of SW Florida

Michael Frye

CCIM, CEO RE/MAX Realty Group

Todd Gates Chairman, Gates Construction

Edward Morton

Managing Director, Wasmer, Schroeder & Company

Deborah Russell Principal, Cummings & Lockwood, LLC

Aysegul Timur, Ph.D Dean, Johnson School of Business, Hodges University

WEST FLORIDA ADVISORY BOARD

Bill Klich

Chairman, Seaside National Bank & Trust West Florida Advisory Board

Janette Carey

Co-Founder & President, Client Legal Funding

Brett Herman President, MaintenX International

Paige LeMay

Chief Executive Officer, Coastal Orthopedics & Sports Medicine

Robert Stanell

Managing Principal, CS&L CPAs

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LOCATIONS

8

1

Boca Raton

2

Coral Gables

4

3

Fort Lauderdale

14

4

Lake Mary

5

Naples

6

Palm Beach

7

Palm Beach Gardens

8

Ponte Vedra Beach

9

Sarasota

10

Seaside Plaza — Downtown Orlando

11

Stuart

12

Tampa

13

Windermere

14

Winter Park

13

10

12

11

9

7 6 1 5

3 2

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SEASIDE NATIONAL BANK & TRUST

CULTURAL VALUES Seaside National Bank & Trust’s cultural values reflect our beliefs about how we conduct business. These values set the standard by which we work, but they also establish the perception of Seaside National Bank & Trust held by all of our constituents—clients, professionals, shareholders and the community.

CLIENT FOCUSED We honor integrity and ethical behavior. We provide innovative solutions. We maintain professional excellence and high performance standards. We recognize the value of the individual. We value individual participation and foster teamwork.

CLIENT PROMISE We will get to know you, your family and your business. After we understand your needs, goals and aspirations, we will recommend product-neutral solutions. As we understand your preferences, we’ll be able to create customized solutions, anticipate your future needs and periodically reassess your current requirements as changes dictate. With a compassionate sense of urgency, we’ll provide timely, attentive and friendly service. S E A S I D E B A N K . C O M

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Profile for Curtis 1000

Seaside Bank Annual Report 2019