CenterState Banks Inc. posted its first quarterly profit since mid-2011 because of bank acquisitions.
CenterState's fourth-quarter net income was $14.1 million, according to a filing Monday with the Securities and Exchange Commission. Previously, the Davenport, Fla., company posted back-to-back quarters in the red.
The turnaround was a result of a $46 million bargain purchase gain from buying the Federal Trust Corp. from Hartford Financial Services Group Inc. Net income was offset by a pretax loss of $12.4 million on acquisition expenses and loans sold in the wholesale market.
CenterState has bought one open-bank and six failed banks in Florida since 2009. In the past two weeks it has bought two failed banks: First Guaranty Bank & Trust Co. of Jacksonville and Central Florida State Bank in Belleview. CenterState said it expects Central Florida to add up to 3 cents a share in earnings and First Guaranty to lift net income by 9 cents to 11 cents a share.
Credit quality improved from a quarter earlier, but CenterState said it underestimated its credit problems. Total nonperforming assets were $49 million at Dec. 31, compared to the company's estimate of $45.7 million. CenterState said its estimate was off because of one residential land development loan that was downgraded to nonaccrual status. Still, nonperfoming assets fell to 2.16% of total assets at Dec. 31, compared to 3.53% at Sept. 30.
Net income was $7.9 million for 2011, compared to a loss of $5.5 million in 2010. CenterState said it expects to recognize $11 million in goodwill and some temporary book dilution from buying First Guaranty since it is a new market. The company said it should have $2.7 billion in assets with its latest acquisitions.