First State Financial Corporation (FSTF-Nasdaq)
Interview with:
Mr. Corey J. Coughlin, President and CEO
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First State Bank, headquartered in Sarasota, FL, operates six offices, three in Sarasota County and three in Pinellas County.


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In three years First State Financial Corporation’s CEO, Corey J. Coughlin has been able to grow the bank’s business by changing the culture in the organization and strengthening the management team


First State Financial Corporation

22 S. Links Avenue
Sarasota, FL 34236
Phone: 941-929-9000

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Mr. Corey J. Coughlin
President and CEO

Lynn Fosse, Senior Editor
August 11, 2005

Corey J. Coughlin
Career Highlights

1971    First National Bank in St. Petersburg, Florida 

Completed comprehensive management training program
Trained as a commercial lender
Completed Graduate School of Banking at LSU, 1976
Complete Commercial Lending Graduate School at
University of Okalahoma, 1980

1987             SouthTrust Bank in West Florida

Promoted to Chief Operating Officer, 1990
Grew bank from $750 million to almost $5 billion internally
and through acquisition

1994             SouthTrust Bank Jacksonville, Florida

Chairman, President and CEO
Took over troubled bank and managed profitability from a loss
of $1 million/month to a profit of $1 million/month within three

Grew bank from $800 million to $2 billion

1997    First Bancshares, Inc. wholly owned subsidiary of First National Bank of

            Central Florida

President and CEO
Worked with OCC to eliminate regulator problems
Managed bank to profitability
Managed change of ownership/control process

1998    CNB National Bank

President and COO
Reorganized bank to achieve a 250% increase in profitability
Managed IPO process taking bank public

2002    First State Financial Corporation wholly owned subsidiary of First State Bank

President and CEO of First State Financial Corporation and First State Bank
Grew bank from $143 million to $287 million with 2 and 1/2 years
Managed profitability from marginal profit to 1% ROA
Managed highly successful IPO process in 2004

Have held and continues to hold, leadership positions in numerous community organizations and activities.

Company Profile:
First State Bank is a wholly owned subsidiary of First State Financial Corporation, headquartered in Sarasota, FL. First State Bank currently operates six offices, three in Sarasota County and three in Pinellas County.

CEOCFO: Mr. Coughlin, please tell us about your background with First State Financial Corporation?
Mr. Coughlin: “July 1st marks my three year anniversary at First State Financial Corporation.”

CEOCFO: What attracted you to the company?
Mr. Coughlin: “What attracted me was the opportunity, because the bank was not performing well and didn’t have the best reputation. The folks that I worked with in my banking consulting business, which were primarily the regulators, told me that First State Bank could possibly benefit from my service. Therefore, I chatted with the chairman of the board of the bank and directors of the holding company and we decided that it might be in the best interest of the bank to bring me onboard as CEO.”

CEOCFO: What was your vision when you came onboard and how has that developed?
Mr. Coughlin: “What has changed since I’ve come onboard is that we have become a very solid, profitable and growth oriented financial institution. What has changed consistent with my vision is that we operate as a team. We have offices in Sarasota and St. Petersburg, Florida, and these are two cities separated by Manatee county. It was very difficult early on and prior to my presence here for the folks to get together and operate the one bank in the two separate and distinct markets. So that was my first goal.”

CEOCFO: How did you accomplish that?
Mr. Coughlin: “I put together a management team based on the folks that were in place when I came here.  The first thing that I did was call for a staff meeting.  A good example of the need for a change of focus is the resistance to a group meeting.  I was told that we can’t have a staff meeting because the last teller closes out at 5:00 and some employees would have to drive to another county. On top of that it would be getting late and we have single parents who have to pick-up their kids. So there were geographic and other problems that prevented us from having a staff meeting and getting everybody in one place at one time. However, it is essential that you get everybody together at one time to make sure that you manage the focus of the organization. So I began to look at those problems, the first was the single parents that had to pick-up their kids and I suggested providing a baby sitter for them so they could bring their children with them. The next problem was the geographic problem, being 40 miles apart and if you have half of the staff coming over the skyway bridge there could be an accident. I told them that I understood that, so we’ll get a bus. The third thing to overcome was that the meeting would be late; during the dinner hour, so I said that we would feed everybody. Finally, we had our first staff meeting and now my folks look forward to it. We have our staff meetings quarterly; they are entertaining, informative and we require some type of training, which is done by a department or a branch and it is usually captivating.”

CEOCFO: So you instilled a can-do instead of a can’t-do.
Mr. Coughlin: “Absolutely! In addition, not only were we separated geographically but there was some emotional separation. We had folks that were part of the bank because of an acquisition and they got into some capital and earnings problems that resulted in problems with our regulators. They blamed First State Bank in Sarasota for that and there was clearly some ill-will on both sides of the bridge. Therefore, we had to eliminate that and we did.”

CEOCFO: Are you primarily commercial or consumer; what is the mix and would you like to see that change?
Mr. Coughlin: “The mix right now is better than it was three years ago, but it is still not where it needs to be. We are a commercially oriented bank and we are a loan driven bank. Residential loans we originate and sell on the aftermarket, so we don’t hold any residential loans that give us any kind of market or interest rate risk. What we do is primarily small businesses; professionals, doctors, lawyers and business owners. We try to be very responsive to their credit needs, but manufactures, distributors and wholesalers are where we make most of our money and develop our growth. Our average loan is in the 1 to $3 million range.”

CEOCFO: Why do customers come to First State Bank?
Mr. Coughlin: “They actually come to us after we come to them. We have about 9 or 10 lenders and we have a very extensive calling effort. We try to do probably 30 to 40% of the loan requests that we generate. Therefore, to do 1 you have to see 4 and to do 40 you have to see 100 and 1,000 to do 100 deals. So you have to be out; you can’t sit and wait for people to come into your office, because those deals have probably been turned down by somebody.”

CEOCFO: What’s changed since you became a public company in 04?
Mr. Coughlin: “We have been introduced to Sarbanes-Oxley and the related expenses. We knew that it would be a change and we knew that it would be a difficult situation, but we didn’t know that it would be that much of a change or that expensive. We projected about twice the expense that we had as a private company, but it’s been a little more than that. Then there is the SEC and the SEC reporting; hiring a bunch of folks that are in the back room as opposed to the front room is something that we had to do to make sure that we comply with all of the laws of the land, which we will. However, it is a little bit more of an effort than I expected it would be.”

CEOCFO: Tell us about the economy in the areas that your offices are located.
Mr. Coughlin: “We are really truly blessed to be where we are on the west coast of Florida. We have the Tampa and St. Petersburg economic engines that really run the whole west coast of Florida and make it vibrant. It is a wonderful place from Charlotte County up to Hernando County, all of which we include in our footprint. There are beautiful beaches and a lot of in-migration and tourism. The major business we have going here is construction, tourism, and to a smaller extent, agriculture. It keeps this economy going. Florida, with its in-migration also has a lot of transfer payments such as social security and other retirement income that just keeps our economy going now matter what happens outside of our area.”

CEOCFO: Are there services that are not being offered now that you would like to offer?
Mr. Coughlin: “We did not have any wealth management products, so we did a joint venture with a company called Global Financial Advisory, which was a boutique investment company in Sarasota and that has helped us in providing those products and services to our upscale customers. These products could also apply to customers right out of school or dental, law or medical school who really have the potential to make a lot of money but aren’t currently. They have a lot of school debt, so we sit down with a financial planner and plan out how they can prosper over time. For folks who are retired and have a tremendous amount of wealth who may have a small loan or a checking account with us, we can fill in the wealth management area that was lacking. Going forward I think we need to get a little bit sharper on our cash management products. We deal primarily with small businesses and cash is very dear to them, so making that cash work a little harder for them is a benefit to both of us.”

CEOCFO: Do you see new branches in the future?
Mr. Coughlin: “ Of course! Right now our presence in the Sarasota market is in the northern part of the County and there is a tremendous amount of business in the northern part of the County. There is also a tremendous amount of growth in the southern part of the county in areas like Venice and North Port. In Pinellas County two of our offices are in the South St. Petersburg area and one of our offices is in the Seminole area, west of St. Petersburg and up near the beaches. However, in the rest of Pinellas County, which is considerable, we have no presence, so we need to branch into those primary market areas where we are not presently operating. That would be in both Sarasota County and Pinellas County.”

CEOCFO: In closing, address potential investors; why should they be interested in First State Financial Corporation?
Mr. Coughlin: “First State Financial Corporation and First State Bank is really a terrific investment and the primary reason is that we have a wonderful management group in place. We also have a tremendous market and we are growing within our market. Further, our growth is actually greater than the growth of our market, but there is a tremendous opportunity with the market and we think that we have the people and the products to take advantage of that. We will get our share of the business and that will make First State Bank a more profitable, stronger and better bank.”


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“What has changed since I’ve come onboard is that we have become a very solid, profitable and growth oriented financial institution. What has changed consistent with my vision is that we operate as a team. We have offices in Sarasota and St. Petersburg, Florida, and these are two cities separated by Manatee county. It was very difficult early on and prior to my presence here for the folks to get together and operate the one bank in the two separate and distinct markets. So that was my first goal.” - Mr. Corey J. Coughlin


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