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In three years First State Financial Corporations CEO, Corey J.
Coughlin has been able to grow the banks business by changing the culture in the
organization and strengthening the management team
First State Financial Corporation
22 S. Links Avenue
Sarasota, FL 34236
Mr. Corey J. Coughlin
President and CEO
Lynn Fosse, Senior Editor
August 11, 2005
Corey J. Coughlin
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
SouthTrust Bank in West
Promoted to Chief Operating Officer, 1990
Grew bank from $750 million to almost $5 billion internally
and through acquisition
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
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.
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 didnt 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 Ive 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 cant 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 well 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 cant-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 dont 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 cant sit and wait for people to come into your office, because those deals
have probably been turned down by somebody.
CEOCFO: Whats changed since you became a public company
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 didnt 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
its 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 arent 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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