CenterState Banks (CSFL) in Davenport, Fla., is planning to merge its two subsidiary banks into a single bank as part of its ongoing effort to trim overhead and improve efficiency following its recent string of acquisitions.
Its chairman, president and chief executive, Ernest S. Pinner, said in an interview this week with the Wall Street Transcript that the company intends to merge its $186 million-asset Valrico State Bank into its lead bank, CenterState Bank, sometime "in the next few months." Valrico has operated as an independent subsidiary of CenterState Banks since CenterState bought it in 2006.
CenterState has roughly quadrupled its assets, to $2.5 billion, over the last three years with its acquisitions of seven banks, including six failed banks. That rapid growth has significantly added to its expense base, and now Pinner says the company needs to cut costs where it can. It closed four branches in the first quarter, including three it inherited from a failed bank it bought in January, and said in April that it intends to close at least two more this quarter.
Still, Pinner has no intention of slowing CenterState's growth. He believes community banks need scale to be able to compete with large and regional banks and his vision is to build CenterState into a $5 billion-asset company within three to five years .
"It's going to be very hard for a community bank that is not at least $500 million in size to be able to survive financially over the next few years," he said in the interview. "When you consider there are new costs being forced on us for compliance reasons, it is just going to be financially unrewarding to be a small bank."