8-K
SEACOAST BANKING CORP OF FLORIDA (SBCF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 28, 2021
SEACOAST BANKING CORPORATION OF FLORIDA
(Exact Name of Registrant as Specified in Charter)
| Florida | 000-13660 | 59-2260678 | |||||
|---|---|---|---|---|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) | 815 COLORADO AVENUE, | STUART | FL | 34994 | |
| --- | --- | --- | --- | ||||
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (772) 287-4000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.10 par value | SBCF | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
SEACOAST BANKING CORPORATION OF FLORIDA
Item 2.02 Results of Operations and Financial Condition
On October 28, 2021, Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the quarter ended September 30, 2021. A copy of the press release announcing Seacoast’s results for the quarter ended September 30, 2021 is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
On October 29, 2021, Seacoast will hold an investor conference call to discuss its financial results for the quarter ended September 30, 2021. Attached as Exhibit 99.2 are charts (available on the Company’s website at www.seacoastbanking.com) containing information used in the conference call and incorporated herein by reference. All information included in the charts is presented as of September 30, 2021, and the Company does not assume any obligation to correct or update said information in the future.
The information in Items 2.02 and 7.01, as well as Exhibits 99.1 and 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated October 28, 2021, with respect to Seacoast's financial results for the quarter ended September 30, 2021 |
| 99.2 | Data on website containing information used in the conference call to be held on October 29, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Exhibits 99.1 and 99.2 referenced herein, contain “forward-looking statements” within the meaning of Section 28A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that we have acquired, or expected to acquire, including Legacy Bank of Florida, Florida Business Bank and Sabal Palm Bank, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical facts, any of which may be impacted by the COVID-19 pandemic and related effects on the U.S.economy. Actual results may differ from those set forth in the forward-looking statements.
The press release contains "forward-looking statements" within the meaning, and protections, of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, loan growth, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that we have acquired, or expect to acquire, including Legacy Bank of Florida, Florida Business Bank and Sabal Palm Bank, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical
facts, any of which may be impacted by the COVID-19 pandemic and any variants thereof and related effects on the U.S. economy. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.
All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may", "will", "anticipate", "assume", "should", "support", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "further", "plan", "point to", "project", "could", "intend", "target" or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality and the adverse impact of COVID-19 (economic and otherwise); governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes, including those that impact the money supply and inflation; changes in accounting policies, rules and practices, including the impact of the adoption of CECL; our participation in the Paycheck Protection Program ("PPP"); the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; uncertainty related to the impact of LIBOR calculations on securities and loans; changes in borrower credit risks and payment behaviors; changing retail distribution strategies, customer preferences and behavior; changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry; our concentration in commercial real estate loans; inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of our investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire desirable financial institutions; changes in technology or products that may be more difficult, costly, or less effective than anticipated; our ability to identify and address increased cybersecurity risks; inability of our risk management framework to manage risks associated with our business; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms; reduction in or the termination of our ability to use the mobile-based platform that is critical to our business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.
The risks relating to the Sabal Palm Bancorp, Inc. and Business Bank of Florida, Corp. proposed mergers include, without limitation: the timing to consummate the proposed mergers; the risk that a condition to closing of the
proposed mergers may not be satisfied; the risk that either proposed merger is not completed at all; the diversion of management time on issues related to the proposed mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the mergers being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectation; the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures on solicitations of customers by competitors; as well as difficulties and risks inherent with entering new markets.
The risks relating to the Sabal Palm Bancorp, Inc. and Business Bank of Florida, Corp. proposed mergers include, without limitation: the timing to consummate the proposed mergers; the risk that a condition to closing of the proposed mergers may not be satisfied; the risk that either proposed merger is not completed at all; the diversion of management time on issues related to the proposed mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the mergers being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectation; the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures on solicitations of customers by competitors; as well as difficulties and risks inherent with entering new markets.
Actual results and capital and other financial conditions may differ materially from those included in these statements due to a variety of factors. These factors include, among others described above, macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the duration and severity of the impact on public health, the U.S. and global economies, financial markets and consumer and corporate customers and clients, including economic activity and employment, as well as the various actions taken in response by governments, central banks and others, including Seacoast, and the precautionary statements included in this release.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2020 and quarterly report on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 under "Special Cautionary Notice Regarding Forward-looking Statements" and "Risk Factors", and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at www.sec.gov.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SEACOAST BANKING CORPORATION OF FLORIDA
(Registrant)
| Dated: October 28, 2021 | /s/ Tracey L. Dexter |
|---|---|
| TRACEY L. DEXTER | |
| Chief Financial Officer |
SBCF 3Q2021 Earnings Release
SEACOAST REPORTS THIRD QUARTER 2021 RESULTS
Strong Quarter for Commercial Loan Originations and Pipeline Generation
Tangible Book Value Per Share Expands to $17.52, Up 13% from the Prior Year
STUART, Fla., October 28, 2021 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") (NASDAQ: SBCF) today reported net income in the third quarter of 2021 of $22.9 million, or $0.40 per diluted share, which includes merger related costs associated with acquisition activity during the quarter and an increase in the provision for loan losses associated with onboarding Legacy Bank of Florida. Third quarter 2021 results represent a decrease of 27% compared to the second quarter of 2021, and an increase of 1% compared to the third quarter of 2020. Adjusted net income1 for the third quarter of 2021 was $29.4 million, or $0.51 per diluted share, which includes an increase in the provision for loan losses associated with onboarding Legacy Bank of Florida. Third quarter 2021 adjusted results represent a decrease of 12% compared to the second quarter of 2021, and an increase of 7% compared to the third quarter of 2020. The ratio of tangible common equity to tangible assets was 10.62%, tangible book value per share increased to $17.52 and Tier 1 capital was 17.7%.
For the third quarter of 2021, return on average tangible assets was 1.00%, return on average tangible shareholders' equity was 9.56%, and the efficiency ratio was 59.55%, compared to 1.48%, 13.88%, and 54.93%, respectively, in the prior quarter, and 1.20%, 11.35%, and 61.65%, respectively, in the prior year quarter. Adjusted return on average tangible assets1 in the third quarter of 2021 was 1.23%, adjusted return on average tangible shareholders' equity1 was 11.72%, and the adjusted efficiency ratio1 was 51.50%, compared to 1.52%, 14.27%, and 53.49%, respectively, in the prior quarter, and 1.38%, 13.06%, and 54.82%, respectively, in the prior year quarter.
Charles M. Shaffer, Seacoast's President and CEO, said, “The Seacoast team delivered another impressive quarter, resulting in 13% year-over-year growth in tangible book value per share, ending the period at $17.52, despite the noise of acquisition related activity during the quarter. Additionally, pre-tax pre-provision adjusted earnings1 improved to a record $43.9 million, up from $37.8 million in the preceding quarter. We continue to see economic expansion in our markets and increasing demand for credit. With our recent investments in commercial banking leadership and technology, we are capitalizing on this growth, as evidenced in our growth in loan originations, increasing loan pipelines, new bankers, and solid recruiting pipelines. Additionally, growth in fee income quarter over quarter included new records in wealth management and Small Business Administration fees.”
Mr. Shaffer further commented, “I am also excited to welcome the Legacy Bank of Florida team and their customers to the Seacoast franchise. The team’s deep experience and extensive relationships in the important South Florida market provide a tremendous opportunity for growth in the coming periods. I am proud of both the Seacoast and Legacy teams’ effort to successfully integrate the bank while accelerating growth through the closing of the acquisition.”
Acquisition of Legacy Bank of Florida
In August 2021, the Company completed the acquisition of Legacy Bank of Florida (“Legacy Bank”), which added $477 million in loans, including $39 million in Paycheck Protection Program (“PPP”) loans, and $495 million in deposits. The acquisition strengthens the Company’s position in South Florida, one of the strongest and fastest growing markets in the country, and complements prior acquisitions in the market. Consolidation activities and related expenses are substantially complete.
Pending Acquisitions of Sabal Palm Bancorp, Inc. and Business Bank of Florida Corporation
During the third quarter, the Company announced the proposed acquisitions of Sabal Palm Bancorp, Inc, and Business Bank of Florida Corporation. The proposed transactions, which are expected to close in early 2022, will provide an entry into the desirable Sarasota market and deepen the Company’s presence in Brevard County. Sabal Palm Bank operates three branches across the Sarasota market with deposits of approximately $377 million and loans of $272 million as of June 30, 2021. Florida Business Bank, the banking subsidiary of Business Bank of Florida Corporation, operates with one branch in Melbourne with deposits of approximately $166 million and loans
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
of $136 million as of the same period. In total, the two transactions will add approximately $600 million in assets. The transactions in aggregate are expected to be 4% accretive to earnings per share in 2023, the first full year of combined operations, with limited tangible book value dilution.
Financial Results
Income Statement
•Net income was $22.9 million, or $0.40 per diluted share for the third quarter of 2021, which includes merger related costs associated with acquisition activity during the quarter, and an increase in the provision for loan losses associated with onboarding Legacy Bank of Florida. This compares to $31.4 million, or $0.56, for the prior quarter, and $22.6 million, or $0.42, for the prior year quarter. For the nine months ended September 30, 2021, net income was $88.1 million, or $1.56 per diluted share, compared to $48.4 million, or $0.91, for the nine months ended September 30, 2020. Adjusted net income1 was $29.4 million, or $0.51 per diluted share, which includes an increase in the provision for loan losses associated with onboarding Legacy Bank of Florida. This compares to $33.3 million, or $0.59, for the prior quarter, and $27.3 million, or $0.50, for the prior year quarter. For the nine months ended September 30, 2021, adjusted net income1 was $98.1 million, or $1.74 per diluted share, compared to $58.3 million, or $1.09, for the nine months ended September 30, 2020.
•Pre-tax pre-provision adjusted earnings1 were $43.9 million in the third quarter of 2021, an increase of $6.1 million, or 16%, compared to the prior quarter, and an increase of $7.5 million, or 21%, compared to the prior year quarter. For the nine months ended September 30, 2021, pre-tax pre-provision adjusted earnings1 were $122.3 million, an increase of $8.8 million, or 8%, compared to the nine months ended September 30, 2020.
•Net revenues were $90.4 million in the third quarter of 2021, an increase of $9.2 million, or 11%, compared to the prior quarter, and an increase of $9.9 million, or 12%, compared to the prior year quarter. For the nine months ended September 30, 2021, net revenues were $255.8 million, an increase of $15.2 million, or 6%, compared to the nine months ended September 30, 2020. Adjusted revenues1 were $90.4 million in the third quarter of 2021, an increase of $9.2 million, or 11%, from the prior quarter, and an increase of $9.9 million, or 12.4%, compared to the prior year quarter. For the nine months ended September 30, 2021, net revenues were $256.0 million, an increase of $16.6 million, or 7%, compared to the nine months ended September 30, 2020.
•Net interest income totaled $71.3 million in the third quarter of 2021, an increase of $5.5 million, or 8%, from the prior quarter, with increases including the addition of loans from the Legacy Bank acquisition, and higher recognition of fees from an increase in forgiveness of PPP loans. For the nine months ended September 30, 2021, net interest income was $203.7 million, an increase of $9.8 million, or 5%, compared to the nine months ended September 30, 2020. As of September 30, 2021, remaining deferred fees on PPP loans total $5.4 million, which will be recognized over the loans' remaining contractual maturity or earlier, as loans are forgiven.
•Net interest margin declined from 3.23% in the second quarter of 2021 to 3.22% in the third quarter of 2021, with continued high levels of liquidity and low interest rates. The excess liquidity has been partially deployed into purchases of securities and loans, with $451.1 million in securities purchases with a weighted average yield of 1.42% and $197.9 million in loan pool purchases with a weighted average yield of 2.68%. Securities yields declined by only four basis points to 1.59% in the third quarter of 2021, with lower rates partially offset by a $0.4 million (eight basis point) benefit from a contractual yield maintenance provision. Non-PPP loan yields declined seven basis points to 4.29% during the third quarter of 2021. Offsetting and favorable was the decline in the cost of interest bearing liabilities from 16 basis points to 14 basis points, which includes a decline in the cost of deposits from eight basis points in the second quarter of 2021 to seven basis points in the third quarter of 2021. The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 15 basis points in the third quarter compared to an increase of 14 basis points in the prior quarter. The effect on net interest margin of interest and fees on PPP loans was an increase of 18 basis points in the third quarter compared to an increase of six basis points in the prior quarter.
•Noninterest income totaled $19.0 million in the third quarter of 2021, an increase of $3.7 million, or 24%, compared to the prior quarter, and an increase of $2.1 million, or 12%, compared to the prior year quarter. For the nine months ended September 30, 2021, noninterest income was $52.0 million, an increase of $5.4 million,
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
or 12%, compared to the nine months ended September 30, 2020. Results for the third quarter of 2021 included the following:
•Interchange revenue was flat compared to the prior quarter at $4.1 million, reflecting stable transactional volume despite the impact of the COVID-19 delta variant on spending early in the quarter. Economic conditions in Florida remain strong, and indications of consumer confidence are high.
•Wealth management income increased to a record $2.6 million in the third quarter, compared to $2.4 million in the second quarter of 2021. With total assets under management of $1.2 billion, the wealth management team continues to successfully win business with commercial relationships and high net worth families across the Company’s footprint.
•Mortgage banking fees were $2.5 million, compared to $3.0 million in the prior quarter, due to slowing refinance activity and low housing inventory levels.
•SBA gains were a record $0.8 million, compared to $0.2 million in the prior quarter, reflecting a renewed focus on saleable lending activity as PPP activity winds down.
•The Company acquired $25 million in BOLI late in the second quarter of 2021, and $9.1 million in BOLI from Legacy Bank, contributing to an increase of $0.3 million in related income during the quarter. Late in the third quarter, the Company purchased an additional $25.0 million in BOLI.
•Other income increased by $3.0 million in the third quarter of 2021, attributed to gains on an SBIC investment during the quarter. These gains resulted from the liquidation of an investment made by the fund. The amounts recognized on SBIC investments will vary and are not expected to occur on a routine basis.
•The provision for credit losses was $5.1 million in the third quarter of 2021, an increase of $9.9 million when compared to the reversal of provision of $4.9 million in the prior quarter. The increase during the quarter reflects the impact of higher loans outstanding, including loans acquired in the Legacy Bank acquisition.
•Noninterest expense was $55.3 million in the third quarter of 2021, an increase of $9.5 million, or 21%, compared to the prior quarter, and an increase of $3.6 million, or 7%, compared to the prior year quarter. For the nine months ended September 30, 2021, noninterest expense was $147.2 million, an increase of $5.3 million, or 4%, compared to the nine months ended September 30, 2020. Changes from the second quarter of 2021 consisted of the following:
•Salaries and wages increased $5.0 million to $27.9 million, which includes $2.6 million in merger-related expenses, as well as increases relating to the addition of the Legacy Bank branch franchise, and increases resulting from investments in commercial banking talent.
•Outsourced data processing increased by $0.9 million, with the increase wholly attributable to the impact of merger-related costs.
•Occupancy and furniture and equipment costs increased collectively by $0.6 million, including costs associated with the addition of the Legacy Bank branch franchise and acquisition-related equipment disposals.
•Legal and professional fees increased by $2.0 million, including an increase of $1.5 million in merger-related expenses, and other increases primarily supporting technology initiatives.
•Seacoast recorded $7.0 million of income tax expense in the third quarter of 2021, compared to $8.8 million in the prior quarter and $7.0 million in the third quarter of 2020. A tax benefit related to stock-based compensation totaled $0.3 million in the third quarter of 2021, compared to a tax benefit of $0.6 million in the second quarter of 2021. The impact of stock-based compensation was nominal in the third quarter of 2020.
•The ratio of net adjusted noninterest expense1 to average tangible assets was 1.95% in the third quarter of 2021, compared to 1.98% in the prior quarter and 2.24% in the third quarter of 2020.
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
•The efficiency ratio was 59.55% compared to 54.93% in the prior quarter and 61.65% in the prior year quarter. The increase from the prior quarter reflects higher net interest income and higher non-interest income, which were more than offset by the impact of higher expenses, primarily resulting from the Legacy Bank acquisition during the third quarter of 2021. The adjusted efficiency ratio1 was 51.50% compared to 53.49% in the prior quarter and 54.82% in the prior year quarter. Without the positive impact of the SBIC investment gain, the adjusted efficiency ratio would have been 53.27% in the third quarter of 2021. The Company remains committed to efficiency through disciplined, proactive management of its cost structure.
Balance Sheet
•At September 30, 2021, the Company had total assets of $9.9 billion and total shareholders' equity of $1.3 billion. Book value per share increased to $22.12 on September 30, 2021 from $21.33 on June 30, 2021, and $19.91 on September 30, 2020. Tangible book value per share of $17.52 on September 30, 2021 increased 13% compared to September 30, 2020.
•Debt securities totaled $2.1 billion on September 30, 2021, an increase of $256.4 million, or 14%, compared to June 30, 2021. Purchases during the quarter consisted of agency-issued collateralized mortgage obligations and collateralized lending obligations with an average yield of 1.42% and a duration of 3.0 years. The Company continues to take a prudent and disciplined approach to reinvesting liquidity.
•Loans totaled $5.9 billion on September 30, 2021, an increase of $476.8 million, or 9%, compared to June 30, 2021, inclusive of PPP loans, which declined $173.5 million during the quarter. Growth in loans includes $438.6 million of non-PPP loans acquired from Legacy Bank, and an additional $26 million in commercial categories.
•Loan originations, excluding PPP, were $744.0 million in the third quarter of 2021, compared to $495.0 million in the second quarter of 2021, an increase of 50%.
•Commercial originations, excluding PPP, were $331.6 million during the third quarter of 2021, compared to $193.0 million in the second quarter of 2021 and $88.2 million in the third quarter of 2020. Recent investments in commercial banking talent contributed to the increase in production. During the quarter, the Company also purchased a $17.1 million single-tenant commercial real estate portfolio from a seller well known to Seacoast. The portfolio is comprised of loans made to high-quality borrowers on stabilized properties with credit tenant leases. The Company fully underwrote the loan portfolio prior to executing the transaction. The portfolio is comprised of loans with an average yield of 3.27%, made to high-quality borrowers on stabilized properties with credit tenant leases.
•Consumer originations in the third quarter of 2021 increased to $66.4 million from $63.7 million in the second quarter of 2021, and $62.3 million in the third quarter of 2020.
•Residential loans originated for sale in the secondary market totaled $95.1 million in the third quarter of 2021, compared to $120.1 million in the second quarter of 2021, and $162.5 million in the third quarter of 2020. While we expect to continue to see the benefit of the inflow of new residents and businesses into Florida, refinance activity has slowed and housing inventory remains low.
•Closed residential loans retained in the portfolio totaled $250.8 million in the third quarter of 2021, compared to $118.1 million in the second quarter of 2021, and $25.4 million in the third quarter of 2020. As an alternative to purchasing lower yielding bonds in the investment portfolio, the Company purchased $180.8 million in high-quality residential home mortgage loans during the quarter with an average yield of 2.62%.
•Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $478.1 million on September 30, 2021, an increase of 2% from June 30, 2021 and an increase of 5% from September 30, 2020.
•Commercial pipelines were $368.9 million as of September 30, 2021, an increase of 15% from $322.0 million at June 30, 2021 and an increase of 44% from $256.2 million at September 30, 2020. We
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
expect commercial production and pipelines to continue to grow, including as the result of success in recruiting high quality commercial bankers to the franchise in recent quarters.
•Consumer pipelines were $31.0 million as of September 30, 2021, compared to $31.7 million at June 30, 2021 and $17.1 million at September 30, 2020.
•Residential saleable pipelines were $42.8 million as of September 30, 2021, compared to $60.6 million at June 30, 2021 and $149.9 million at September 30, 2020. Retained residential pipelines were $35.4 million as of September 30, 2021, compared to $54.1 million at June 30, 2021 and $33.4 million at September 30, 2020.
•Total deposits were $8.3 billion as of September 30, 2021, an increase of $497.7 million, or 6%, compared to June 30, 2021.
•Deposits added through the acquisition of Legacy Bank totaled $494.9 million, driving the increase quarter-over-quarter. Excluding the impact of the acquisition and deposits held off balance sheet, deposits grew 5.5% on an annualized basis.
•The Company manages excess liquidity on the balance sheet through participation in programs with third-party deposit networks. Through these programs, the Company can offer its customers access to FDIC insurance on large balances with attractive terms, and the Company can retain or sell, on an overnight basis, the underlying deposits. At September 30, 2021, the Company had sold, on an overnight basis, $233 million in deposits compared to $116 million at June 30, 2021. These deposits are not included in the consolidated balance sheet.
•The overall cost of deposits declined to seven basis points in the third quarter of 2021 from eight basis points in the prior quarter.
•Total transaction account balances increased $215.6 million, or 5%, quarter-over-quarter, and at September 30, 2021 represent 59% of overall deposit funding. The increase includes $150.7 million from Legacy Bank.
•Interest-bearing deposits (interest-bearing demand, savings, and money market deposits) increased $248.5 million, or 6%, quarter-over-quarter to $4.6 billion, noninterest-bearing demand deposits increased $134.3 million, or 5%, to $3.1 billion, and CDs (excluding brokered) increased $114.9 million, or 24%, to $596.6 million. Increases from Legacy Bank include $189.1 million in interest-bearing deposits, $150.7 million in noninterest-bearing demand deposits, and $154.8 million in CDs.
•As of September 30, 2021, deposits per banking center were $165 million, compared to $138 million on September 30, 2020. The acquisition of Legacy Bank and the consolidation of one existing branch location added a net of four new branch locations during the third quarter of 2021.
Asset Quality
•Nonperforming loans decreased by $0.3 million to $32.6 million at September 30, 2021. Nonperforming loans to total loans outstanding were 0.55% at September 30, 2021, 0.61% at June 30, 2021, and 0.63% at September 30, 2020.
•Nonperforming assets to total assets were 0.47% at September 30, 2021, 0.49% at June 30, 2021, and 0.64% at September 30, 2020.
•The ratio of allowance for credit losses to total loans was 1.49% at September 30, 2021, 1.49% at June 30, 2021, and 1.60% at September 30, 2020. Excluding PPP loans, the ratio of allowance for credit losses to total loans at September 30, 2021, was 1.54%, compared to 1.60% at June 30, 2021 and 1.80% at September 30, 2020. The decline in coverage reflects continued improvement in the economic outlook.
•Net charge-offs were $1.4 million, or 0.10%, of average loans for the third quarter of 2021 compared to $0.7 million, or 0.05%, of average loans in the second quarter of 2021 and $1.7 million, or 0.12%, of average loans in the third quarter of 2020. Net charge-offs for the four most recent quarters averaged 0.10%.
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
•Portfolio diversification, in terms of asset mix, industry, and loan type, has been a critical element of the Company's lending strategy. Exposure across industries and collateral types is broadly distributed. Excluding PPP loans, Seacoast's average commercial loan size is $457 thousand, reflecting an ability to maintain granularity within the overall loan portfolio.
•Construction and land development and commercial real estate loans remain well below regulatory guidance at 21% and 175% of total bank-level risk-based capital, respectively, compared to 24% and 164% respectively, in the second quarter of 2021. On a consolidated basis, construction and land development and commercial real estate loans represent 19% and 160%, respectively, of total consolidated risk-based capital.
Capital and Liquidity
•The tier 1 capital ratio decreased to 17.7% from 18.3% at September 30, 2021, and 16.8% at September 30, 2020. The total capital ratio was 18.6% and the tier 1 leverage ratio was 11.7% at September 30, 2021.
•Cash and cash equivalents at September 30, 2021 totaled $1.2 billion, a decrease of $221.2 million, or 15%, from June 30, 2021, reflecting the impact of securities purchases, loan pool purchases and other cash management strategies.
•Tangible common equity to tangible assets was 10.62% at September 30, 2021, compared to 10.43% at June 30, 2021 and 10.67% at September 30, 2020.
•At September 30, 2021, the Company had available unsecured lines of credit of $165.0 million and lines of credit under lendable collateral value of $1.3 billion. Additionally, $1.7 billion of debt securities and $694.6 million of residential and commercial real estate loans are available as collateral for potential borrowings.
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
| FINANCIAL HIGHLIGHTS | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Amounts in thousands except per share data) | (Unaudited) | ||||||||||||||
| Quarterly Trends | |||||||||||||||
| 3Q'21 | 2Q'21 | 1Q'21 | 4Q'20 | 3Q'20 | |||||||||||
| Selected Balance Sheet Data: | |||||||||||||||
| Total Assets | $ | 9,893,498 | $ | 9,316,833 | $ | 8,811,820 | $ | 8,342,392 | $ | 8,287,840 | |||||
| Gross Loans | 5,905,884 | 5,437,049 | 5,661,492 | 5,735,349 | 5,858,029 | ||||||||||
| Total Deposits | 8,334,172 | 7,836,436 | 7,385,749 | 6,932,561 | 6,914,843 | ||||||||||
| Performance Measures: | |||||||||||||||
| Net Income | $ | 22,944 | $ | 31,410 | $ | 33,719 | $ | 29,347 | $ | 22,628 | |||||
| Net Interest Margin | 3.22 | % | 3.23 | % | 3.51 | % | 3.59 | % | 3.40 | % | |||||
| Average Diluted Shares Outstanding | 57,645 | 55,901 | 55,992 | 55,739 | 54,301 | ||||||||||
| Diluted Earnings Per Share (EPS) | $ | 0.40 | $ | 0.56 | $ | 0.60 | $ | 0.53 | $ | 0.42 | |||||
| Return on (annualized): | |||||||||||||||
| Average Assets (ROA) | 0.93 | % | 1.40 | % | 1.61 | % | 1.39 | % | 1.11 | % | |||||
| Average Tangible Assets (ROTA)2 | 1.00 | 1.48 | 1.70 | 1.49 | 1.20 | ||||||||||
| Average Tangible Common Equity (ROTCE)2 | 9.56 | 13.88 | 15.62 | 13.87 | 11.35 | ||||||||||
| Tangible Common Equity to Tangible Assets2 | 10.62 | 10.43 | 10.71 | 11.01 | 10.67 | ||||||||||
| Tangible Book Value Per Share2 | $ | 17.52 | $ | 17.08 | $ | 16.62 | $ | 16.16 | $ | 15.57 | |||||
| Efficiency Ratio | 59.55 | % | 54.93 | % | 53.21 | % | 48.23 | % | 61.65 | % | |||||
| Adjusted Operating Measures1: | |||||||||||||||
| Adjusted Net Income | $ | 29,350 | $ | 33,251 | $ | 35,497 | $ | 30,700 | $ | 27,336 | |||||
| Adjusted Diluted EPS | 0.51 | 0.59 | 0.63 | 0.55 | 0.50 | ||||||||||
| Adjusted ROTA2 | 1.23 | % | 1.52 | % | 1.75 | % | 1.50 | % | 1.38 | % | |||||
| Adjusted ROTCE2 | 11.72 | 14.27 | 16.01 | 14.00 | 13.06 | ||||||||||
| Adjusted Efficiency Ratio | 51.50 | 53.49 | 51.99 | 48.75 | 54.82 | ||||||||||
| Net Adjusted Noninterest Expense as a<br><br>Percent of Average Tangible Assets2 | 1.95 | 1.98 | 2.16 | 2.00 | 2.24 | ||||||||||
| Other Data: | |||||||||||||||
| Market capitalization3 | $ | 1,972,784 | $ | 1,893,141 | $ | 2,003,866 | $ | 1,626,913 | $ | 994,690 | |||||
| Full-time equivalent employees | 995 | 946 | 953 | 965 | 968 | ||||||||||
| Number of ATMs | 72 | 75 | 75 | 77 | 77 | ||||||||||
| Full-service banking offices | 52 | 48 | 48 | 51 | 51 | ||||||||||
| Registered online users | 133,977 | 129,568 | 126,352 | 123,615 | 121,620 | ||||||||||
| Registered mobile devices | 126,730 | 122,815 | 117,959 | 115,129 | 110,241 | ||||||||||
| 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. | |||||||||||||||
| 2The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets. | |||||||||||||||
| 3Common shares outstanding multiplied by closing bid price on last day of each period. |
Third Quarter Strategic Highlights
Capitalizing on Seacoast’s Early Commitment to Digital Transformation
•The Company continues to invest in providing a best-in-class customer experience across our branch network, call center, ATMs, and digital banking. We will introduce a fully upgraded online banking and mobile experience to both consumers and businesses in the first quarter of 2022. We believe investing in a leading data analytics practice, best-in-class digital offerings, exceptional branch services, and recruiting the highest quality commercial bankers in growth markets creates a unique and very competitive value proposition for customers across Florida.
•A large-scale initiative to upgrade all ATMs across the network through a third-party partnership is nearly complete, providing our customers with an improved ATM experience and offering even more convenience through access to the Allpoint network. Allpoint provides the world’s largest surcharge-free ATM network, granting Seacoast customers fee-free access at more than 55,000 Allpoint ATM locations, with more than 2,700 throughout Florida. Allpoint ATMs can be found at local and national retailers including Walgreens, CVS, Target, Costco and RaceTrac.
Driving Sustainable Growth and Expanding our Footprint
•Seacoast continues to make investments to expand its footprint organically across the state, including into northeast Florida and Naples/Ft. Myers, with key additions to its leadership and commercial banking team.
•Brannon Fitch joined the leadership team as executive vice president and regional president for Northeast Florida to lead the bank’s strategic expansion into the region. Fitch joins Seacoast after almost two decades of executive leadership experience at BB&T, and will lead Seacoast’s strategic expansion into this important and fast growing market.
•Additionally, Seacoast continues investing in expanding the footprint of its real estate lending division with the addition of Tim McLean as senior vice president of commercial real estate, who brings 33 years of commercial banking experience in the Naples market.
•The Company expects to support further organic growth with the opening of two de novo branch locations, in Naples and in Plantation (Broward County), in the coming quarters.
•Building on the recent expansion in commercial banking leadership, including the announcements in the prior quarter of James Norton, executive vice president and commercial real estate executive in Tampa, Chris Rolle, West Florida regional president, and Robert Hursh, Pinellas County market president, Seacoast has also continued building the commercial banking teams in its existing markets. This includes the addition of five commercial bankers across the franchise organically during the third quarter, and five additional bankers joining through the acquisition of Legacy Bank. These professionals all demonstrate a history of strong performance, generating growth through consistently winning new banking relationships and delivering exceptional customer experiences.
•The Company’s recruiting pipeline is robust entering the fourth quarter. We expect to continue to make announcements regarding talent additions in the coming quarters.
Scaling and Evolving Our Culture
•Seacoast Bank has been named among Forbes Magazine’s 2021 America’s Best-In-State Banks and Credit Unions. Seacoast has the distinction of being the only Florida-based community bank to make the list. Forbes partnered with market research firm Statista to survey nearly 25,000 people in the U.S. about their banking relationships. Banks and credit unions were rated on overall recommendations and satisfaction, consumer trust, terms and conditions, branch services, digital services, and financial advice. Only 2.7% of all banks made the list.
•In July, Seacoast Bank was named to the Orlando Business Journal’s 2021 Best Places to Work. This recognition reflects Seacoast’s commitment to employee well-being, as well as the Company’s numerous diversity and inclusion initiatives.
OTHER INFORMATION
Conference Call Information
Seacoast will host a conference call on October 29, 2021 at 10:00 a.m. (Eastern Time) to discuss the third quarter 2021 earnings results and business trends. Investors may call in (toll-free) by dialing (800) 774-6070 (passcode: 6626 535; host: Charles Shaffer). Charts will be used during the conference call and may be accessed at Seacoast's website at www.SeacoastBanking.com by selecting "Presentations" under the heading "News/Events." A replay of the call will be available for one month, beginning late afternoon on October 29, 2021, and can be accessed via a link at www.SeacoastBanking.com under the heading “Corporate Information,” using the passcode 50236528.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading “Corporate Information.” Beginning late afternoon on October 29, 2021, an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast will be available for one year.
About Seacoast Banking Corporation of Florida (NASDAQ: SBCF)
Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $9.9 billion in assets and $8.3 billion in deposits as of September 30, 2021. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 52 traditional branches of its locally-branded, wholly-owned subsidiary bank, Seacoast National Bank. Offices stretch from Fort Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties. More information about the Company is available at www.SeacoastBanking.com.
Additional Information
Seacoast has filed a registration statement on Form S-4 with the United States Securities and Exchange Commission (the "SEC") in connection with the proposed merger of Business Bank of Florida Corp. and Florida Business Bank with and into Seacoast and Seacoast Bank, respectively. Seacoast has also filed a registration statement on Form S-4 with the SEC in connection with the proposed merger of Sabal Palm Bancorp, Inc. and Sabal Palm Bank with and into Seacoast and Seacoast Bank, respectively. The registration statements in connection with the mergers include a proxy statement of Business Bank of Florida Corp. and Sabal Palm Bancorp, Inc., respectively, and a prospectus of Seacoast. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. WE URGE INVESTORS TO READ THE PROXY STATEMENTS/PROSPECTUSES AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGERS OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENTS/PROSPECTUSES BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors may obtain (when available) these documents free of charge at the SEC’s website (www.sec.gov). In addition, documents filed with the SEC by Seacoast will be available free of charge by contacting Investor Relations at (772) 288-6085.
Business Bank of Florida Corp. and Florida Business Bank, their directors, and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed mergers with and into Seacoast and Seacoast Bank. Information regarding the participants in the proxy solicitation of Business Bank of Florida Corp. and a description of its direct and indirect interests, by security holdings or otherwise, is contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC.
Sabal Palm Bancorp, Inc. and Sabal Palm Bank, their directors, and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed mergers with and into Seacoast and Seacoast Bank. Information regarding the participants in the proxy
solicitation of Sabal Palm Bancorp, Inc. and a description of its direct and indirect interests, by security holdings or otherwise, is contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning, and protections, of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, loan growth, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that we have acquired, or expect to acquire, including Legacy Bank of Florida, Florida Business Bank and Sabal Palm Bank, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical facts, any of which may be impacted by the COVID-19 pandemic and any variants thereof and related effects on the U.S. economy. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.
All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may", "will", "anticipate", "assume", "should", "support", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "further", "plan", "point to", "project", "could", "intend", "target" or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality and the adverse impact of COVID-19 (economic and otherwise); governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes, including those that impact the money supply and inflation; changes in accounting policies, rules and practices, including the impact of the adoption of CECL; our participation in the Paycheck Protection Program ("PPP"); the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; uncertainty related to the impact of LIBOR calculations on securities and loans; changes in borrower credit risks and payment behaviors; changing retail distribution strategies, customer preferences and behavior; changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry; our concentration in commercial real estate loans; inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of our investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire desirable financial institutions; changes in technology or products that may be more difficult, costly, or less effective than anticipated; our ability to identify and address increased cybersecurity risks; inability of our risk management framework to manage risks associated with our business; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms; reduction in or the termination of our ability to use the mobile-based platform that is critical to our business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory
proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.
The risks relating to the Sabal Palm Bancorp, Inc. and Business Bank of Florida, Corp. proposed mergers include, without limitation: the timing to consummate the proposed mergers; the risk that a condition to closing of the proposed mergers may not be satisfied; the risk that either proposed merger is not completed at all; the diversion of management time on issues related to the proposed mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the mergers being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectation; the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures on solicitations of customers by competitors; as well as difficulties and risks inherent with entering new markets.
Actual results and capital and other financial conditions may differ materially from those included in these statements due to a variety of factors. These factors include, among others described above, macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the duration and severity of the impact on public health, the U.S. and global economies, financial markets and consumer and corporate customers and clients, including economic activity and employment, as well as the various actions taken in response by governments, central banks and others, including Seacoast, and the precautionary statements included in this release.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2020 and quarterly report on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 under "Special Cautionary Notice Regarding Forward-looking Statements" and "Risk Factors", and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at www.sec.gov.
| FINANCIAL HIGHLIGHTS | (Unaudited) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| Quarterly Trends | Nine Months Ended | ||||||||||||||||||||
| (Amounts in thousands, except ratios and per share data) | 3Q'21 | 2Q'21 | 1Q'21 | 4Q'20 | 3Q'20 | 3Q'21 | 3Q'20 | ||||||||||||||
| Summary of Earnings | |||||||||||||||||||||
| Net income | $ | 22,944 | $ | 31,410 | $ | 33,719 | $ | 29,347 | $ | 22,628 | $ | 88,073 | $ | 48,417 | |||||||
| Adjusted net income1 | 29,350 | 33,251 | 35,497 | 30,700 | 27,336 | 98,098 | 58,250 | ||||||||||||||
| Net interest income2 | 71,455 | 65,933 | 66,741 | 68,903 | 63,621 | 204,129 | 194,300 | ||||||||||||||
| Net interest margin2,3 | 3.22 | % | 3.23 | % | 3.51 | % | 3.59 | % | 3.40 | % | 3.32 | % | 3.67 | % | |||||||
| Performance Ratios | |||||||||||||||||||||
| Return on average assets-GAAP basis3 | 0.93 | % | 1.40 | % | 1.61 | % | 1.39 | % | 1.11 | % | 1.29 | % | 0.84 | % | |||||||
| Return on average tangible assets-GAAP basis3,4 | 1.00 | 1.48 | 1.70 | 1.49 | 1.20 | 1.37 | 0.93 | ||||||||||||||
| Adjusted return on average tangible assets1,3,4 | 1.23 | 1.52 | 1.75 | 1.50 | 1.38 | 1.48 | 1.04 | ||||||||||||||
| Net adjusted noninterest expense to average tangible assets1,3,4 | 1.95 | 1.98 | 2.16 | 2.00 | 2.24 | 2.03 | 2.26 | ||||||||||||||
| Return on average shareholders' equity-GAAP basis3 | 7.29 | 10.76 | 12.03 | 10.51 | 8.48 | 9.93 | 6.32 | ||||||||||||||
| Return on average tangible common equity-GAAP basis3,4 | 9.56 | 13.88 | 15.62 | 13.87 | 11.35 | 12.89 | 8.71 | ||||||||||||||
| Adjusted return on average tangible common equity1,3,4 | 11.72 | 14.27 | 16.01 | 14.00 | 13.06 | 13.91 | 9.80 | ||||||||||||||
| Efficiency ratio5 | 59.55 | 54.93 | 53.21 | 48.23 | 61.65 | 55.99 | 57.15 | ||||||||||||||
| Adjusted efficiency ratio1 | 51.50 | 53.49 | 51.99 | 48.75 | 54.82 | 52.29 | 52.64 | ||||||||||||||
| Noninterest income to total revenue (excluding securities gains/losses) | 21.09 | 18.94 | 21.07 | 17.85 | 21.06 | 20.40 | 18.96 | ||||||||||||||
| Tangible common equity to tangible assets4 | 10.62 | 10.43 | 10.71 | 11.01 | 10.67 | 10.62 | 10.67 | ||||||||||||||
| Average loan-to-deposit ratio | 69.97 | 74.13 | 81.39 | 84.48 | 87.83 | 74.86 | 89.60 | ||||||||||||||
| End of period loan-to-deposit ratio | 71.46 | 69.93 | 77.48 | 83.72 | 85.77 | 71.46 | 85.77 | ||||||||||||||
| Per Share Data | |||||||||||||||||||||
| Net income diluted-GAAP basis | $ | 0.40 | $ | 0.56 | $ | 0.60 | $ | 0.53 | $ | 0.42 | $ | 1.56 | $ | 0.91 | |||||||
| Net income basic-GAAP basis | 0.40 | 0.57 | 0.61 | 0.53 | 0.42 | 1.57 | 0.91 | ||||||||||||||
| Adjusted earnings1 | 0.51 | 0.59 | 0.63 | 0.55 | 0.50 | 1.74 | 1.09 | ||||||||||||||
| Book value per share common | 22.12 | 21.33 | 20.89 | 20.46 | 19.91 | 22.12 | 19.91 | ||||||||||||||
| Tangible book value per share | 17.52 | 17.08 | 16.62 | 16.16 | 15.57 | 17.52 | 15.57 | ||||||||||||||
| Cash dividends declared | 0.13 | 0.13 | — | — | — | 0.26 | — | ||||||||||||||
| 1Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. | |||||||||||||||||||||
| 2Calculated on a fully taxable equivalent basis using amortized cost. | |||||||||||||||||||||
| 3These ratios are stated on an annualized basis and are not necessarily indicative of future periods. | |||||||||||||||||||||
| 4The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets. | |||||||||||||||||||||
| 5Defined as noninterest expense less amortization of intangibles and gains, losses, and expenses on foreclosed properties divided by net operating revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains and losses). | |||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | (Unaudited) | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| Quarterly Trends | Nine Months Ended | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | 3Q'21 | 2Q'21 | 1Q'21 | 4Q'20 | 3Q'20 | 3Q'21 | 3Q'20 | ||||||||||||||
| Interest on securities: | |||||||||||||||||||||
| Taxable | $ | 7,775 | $ | 6,559 | $ | 6,298 | $ | 6,477 | $ | 6,972 | $ | 20,632 | $ | 23,241 | |||||||
| Nontaxable | 143 | 147 | 148 | 86 | 125 | 438 | 368 | ||||||||||||||
| Fees on PPP loans | 5,218 | 3,877 | 5,390 | 3,603 | 161 | 14,485 | 4,171 | ||||||||||||||
| Interest on PPP loans | 699 | 1,251 | 1,496 | 1,585 | 1,558 | 3,446 | 2,616 | ||||||||||||||
| Interest and fees on loans - excluding PPP loans | 58,507 | 55,220 | 55,412 | 60,407 | 58,768 | 169,139 | 181,984 | ||||||||||||||
| Interest on federal funds sold and other investments | 867 | 709 | 586 | 523 | 556 | 2,162 | 1,974 | ||||||||||||||
| Total Interest Income | 73,209 | 67,763 | 69,330 | 72,681 | 68,140 | 210,302 | 214,354 | ||||||||||||||
| Interest on deposits | 849 | 980 | 1,065 | 1,228 | 1,299 | 2,894 | 5,692 | ||||||||||||||
| Interest on time certificates | 583 | 524 | 1,187 | 2,104 | 2,673 | 2,294 | 11,261 | ||||||||||||||
| Interest on borrowed money | 453 | 457 | 468 | 558 | 665 | 1,378 | 3,449 | ||||||||||||||
| Total Interest Expense | 1,885 | 1,961 | 2,720 | 3,890 | 4,637 | 6,566 | 20,402 | ||||||||||||||
| Net Interest Income | 71,324 | 65,802 | 66,610 | 68,791 | 63,503 | 203,736 | 193,952 | ||||||||||||||
| Provision for credit losses | 5,091 | (4,855) | (5,715) | 1,900 | (845) | (5,479) | 36,279 | ||||||||||||||
| Net Interest Income After Provision for Credit Losses | 66,233 | 70,657 | 72,325 | 66,891 | 64,348 | 209,215 | 157,673 | ||||||||||||||
| Noninterest income: | |||||||||||||||||||||
| Service charges on deposit accounts | 2,495 | 2,338 | 2,338 | 2,423 | 2,242 | 7,171 | 7,006 | ||||||||||||||
| Interchange income | 4,131 | 4,145 | 3,820 | 3,596 | 3,682 | 12,096 | 10,115 | ||||||||||||||
| Wealth management income | 2,562 | 2,387 | 2,323 | 1,949 | 1,972 | 7,272 | 5,558 | ||||||||||||||
| Mortgage banking fees | 2,550 | 2,977 | 4,225 | 3,646 | 5,283 | 9,752 | 11,050 | ||||||||||||||
| Marine finance fees | 152 | 177 | 189 | 145 | 242 | 518 | 545 | ||||||||||||||
| SBA gains | 812 | 232 | 287 | 113 | 252 | 1,331 | 572 | ||||||||||||||
| BOLI income | 1,128 | 872 | 859 | 889 | 899 | 2,859 | 2,672 | ||||||||||||||
| Other | 5,228 | 2,249 | 3,744 | 2,187 | 2,370 | 11,221 | 7,869 | ||||||||||||||
| 19,058 | 15,377 | 17,785 | 14,948 | 16,942 | 52,220 | 45,387 | |||||||||||||||
| Securities (losses) gains, net | (30) | (55) | (114) | (18) | 4 | (199) | 1,253 | ||||||||||||||
| Total Noninterest Income | 19,028 | 15,322 | 17,671 | 14,930 | 16,946 | 52,021 | 46,640 | ||||||||||||||
| Noninterest expenses: | |||||||||||||||||||||
| Salaries and wages | 27,919 | 22,966 | 21,393 | 21,490 | 23,125 | 72,278 | 67,049 | ||||||||||||||
| Employee benefits | 4,177 | 3,953 | 4,980 | 3,915 | 3,995 | 13,110 | 11,629 | ||||||||||||||
| Outsourced data processing costs | 5,610 | 4,676 | 4,468 | 4,233 | 6,128 | 14,754 | 14,820 | ||||||||||||||
| Telephone / data lines | 810 | 838 | 785 | 774 | 705 | 2,433 | 2,210 | ||||||||||||||
| Occupancy | 3,541 | 3,310 | 3,789 | 3,554 | 3,858 | 10,640 | 10,596 | ||||||||||||||
| Furniture and equipment | 1,567 | 1,166 | 1,254 | 1,317 | 1,576 | 3,987 | 4,557 | ||||||||||||||
| Marketing | 1,353 | 1,002 | 1,168 | 1,045 | 1,513 | 3,523 | 3,788 | ||||||||||||||
| Legal and professional fees | 4,151 | 2,182 | 2,582 | 509 | 3,018 | 8,915 | 8,658 | ||||||||||||||
| FDIC assessments | 651 | 515 | 526 | 528 | 474 | 1,692 | 740 | ||||||||||||||
| Amortization of intangibles | 1,306 | 1,212 | 1,211 | 1,421 | 1,497 | 3,729 | 4,436 | ||||||||||||||
| Foreclosed property expense and net (gain) loss on sale | 66 | (90) | (65) | 1,821 | 512 | (89) | 442 | ||||||||||||||
| Provision for credit losses on unfunded commitments | 133 | — | — | (795) | 756 | 133 | 980 | ||||||||||||||
| Other | 3,984 | 4,054 | 4,029 | 3,869 | 4,517 | 12,067 | 11,966 | ||||||||||||||
| Total Noninterest Expense | 55,268 | 45,784 | 46,120 | 43,681 | 51,674 | 147,172 | 141,871 | ||||||||||||||
| Income Before Income Taxes | 29,993 | 40,195 | 43,876 | 38,140 | 29,620 | 114,064 | 62,442 | ||||||||||||||
| Income taxes | 7,049 | 8,785 | 10,157 | 8,793 | 6,992 | 25,991 | 14,025 | ||||||||||||||
| Net Income | $ | 22,944 | $ | 31,410 | $ | 33,719 | $ | 29,347 | $ | 22,628 | $ | 88,073 | $ | 48,417 | |||||||
| Per share of common stock: | |||||||||||||||||||||
| Net income diluted | $ | 0.40 | $ | 0.56 | $ | 0.60 | $ | 0.53 | $ | 0.42 | $ | 1.56 | $ | 0.91 | |||||||
| Net income basic | 0.40 | 0.57 | 0.61 | 0.53 | 0.42 | 1.57 | 0.91 | ||||||||||||||
| Cash dividends declared | 0.13 | 0.13 | — | — | — | 0.26 | — | ||||||||||||||
| Average diluted shares outstanding | 57,645 | 55,901 | 55,992 | 55,739 | 54,301 | 56,441 | 53,325 | ||||||||||||||
| Average basic shares outstanding | 57,148 | 55,421 | 55,271 | 55,219 | 53,978 | 55,954 | 52,926 | ||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | (Unaudited) | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
| (Amounts in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||
| Assets | |||||||||||||||||||||
| Cash and due from banks | $ | 199,460 | $ | 97,468 | $ | 89,123 | $ | 86,630 | $ | 81,692 | |||||||||||
| Interest bearing deposits with other banks | 1,028,235 | 1,351,377 | 890,202 | 317,458 | 227,876 | ||||||||||||||||
| Total Cash and Cash Equivalents | 1,227,695 | 1,448,845 | 979,325 | 404,088 | 309,568 | ||||||||||||||||
| Time deposits with other banks | 750 | 750 | 750 | 750 | 2,247 | ||||||||||||||||
| Debt Securities: | |||||||||||||||||||||
| Available for sale (at fair value) | 1,546,155 | 1,322,776 | 1,051,396 | 1,398,157 | 1,286,858 | ||||||||||||||||
| Held to maturity (at amortized cost) | 526,502 | 493,467 | 512,307 | 184,484 | 207,376 | ||||||||||||||||
| Total Debt Securities | 2,072,657 | 1,816,243 | 1,563,703 | 1,582,641 | 1,494,234 | ||||||||||||||||
| Loans held for sale | 49,597 | 42,793 | 60,924 | 68,890 | 73,046 | ||||||||||||||||
| Loans | 5,905,884 | 5,437,049 | 5,661,492 | 5,735,349 | 5,858,029 | ||||||||||||||||
| Less: Allowance for credit losses | (87,823) | (81,127) | (86,643) | (92,733) | (94,013) | ||||||||||||||||
| Net Loans | 5,818,061 | 5,355,922 | 5,574,849 | 5,642,616 | 5,764,016 | ||||||||||||||||
| Bank premises and equipment, net | 71,250 | 69,392 | 70,385 | 75,117 | 76,393 | ||||||||||||||||
| Other real estate owned | 13,628 | 12,804 | 15,549 | 12,750 | 15,890 | ||||||||||||||||
| Goodwill | 252,154 | 221,176 | 221,176 | 221,176 | 221,176 | ||||||||||||||||
| Other intangible assets, net | 16,153 | 14,106 | 15,382 | 16,745 | 18,163 | ||||||||||||||||
| Bank owned life insurance | 193,747 | 158,506 | 132,634 | 131,776 | 130,887 | ||||||||||||||||
| Net deferred tax assets | 24,187 | 21,839 | 24,497 | 23,629 | 25,503 | ||||||||||||||||
| Other assets | 153,619 | 154,457 | 152,646 | 162,214 | 156,717 | ||||||||||||||||
| Total Assets | $ | 9,893,498 | $ | 9,316,833 | $ | 8,811,820 | $ | 8,342,392 | $ | 8,287,840 | |||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||
| Liabilities | |||||||||||||||||||||
| Deposits | |||||||||||||||||||||
| Noninterest demand | $ | 3,086,466 | $ | 2,952,160 | $ | 2,685,247 | $ | 2,289,787 | $ | 2,400,744 | |||||||||||
| Interest-bearing demand | 1,845,165 | 1,763,884 | 1,647,935 | 1,566,069 | 1,385,445 | ||||||||||||||||
| Savings | 834,309 | 811,516 | 768,362 | 689,179 | 655,072 | ||||||||||||||||
| Money market | 1,951,639 | 1,807,190 | 1,671,179 | 1,556,370 | 1,457,078 | ||||||||||||||||
| Other time certificates | 437,973 | 335,370 | 373,297 | 425,878 | 457,964 | ||||||||||||||||
| Brokered time certificates | 20,000 | 20,000 | 93,500 | 233,815 | 381,028 | ||||||||||||||||
| Time certificates of more than $250,000 | 158,620 | 146,316 | 146,229 | 171,463 | 177,512 | ||||||||||||||||
| Total Deposits | 8,334,172 | 7,836,436 | 7,385,749 | 6,932,561 | 6,914,843 | ||||||||||||||||
| Securities sold under agreements to repurchase | 105,548 | 119,973 | 109,171 | 119,609 | 89,508 | ||||||||||||||||
| Federal Home Loan Bank borrowings | — | — | — | — | 35,000 | ||||||||||||||||
| Subordinated debt | 71,576 | 71,506 | 71,436 | 71,365 | 71,295 | ||||||||||||||||
| Other liabilities | 91,682 | 106,571 | 90,115 | 88,455 | 78,853 | ||||||||||||||||
| Total Liabilities | 8,602,978 | 8,134,486 | 7,656,471 | 7,211,990 | 7,189,499 | ||||||||||||||||
| Shareholders' Equity | |||||||||||||||||||||
| Common stock | 5,835 | 5,544 | 5,529 | 5,524 | 5,517 | ||||||||||||||||
| Additional paid in capital | 959,644 | 862,598 | 858,688 | 856,092 | 854,188 | ||||||||||||||||
| Retained earnings | 329,918 | 314,584 | 290,420 | 256,701 | 227,354 | ||||||||||||||||
| Treasury stock | (10,146) | (10,180) | (8,693) | (8,285) | (7,941) | ||||||||||||||||
| 1,285,251 | 1,172,546 | 1,145,944 | 1,110,032 | 1,079,118 | |||||||||||||||||
| Accumulated other comprehensive income, net | 5,269 | 9,801 | 9,405 | 20,370 | 19,223 | ||||||||||||||||
| Total Shareholders' Equity | 1,290,520 | 1,182,347 | 1,155,349 | 1,130,402 | 1,098,341 | ||||||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 9,893,498 | $ | 9,316,833 | $ | 8,811,820 | $ | 8,342,392 | $ | 8,287,840 | |||||||||||
| Common shares outstanding | 58,349 | 55,436 | 55,294 | 55,243 | 55,169 | ||||||||||||||||
| CONSOLIDATED QUARTERLY FINANCIAL DATA | (Unaudited) | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| (Amounts in thousands) | 2Q'21 | 1Q'21 | 4Q'20 | 3Q'20 | |||||||||||||||||
| Credit Analysis | |||||||||||||||||||||
| Net charge-offs - non-acquired loans | 198 | $ | 214 | $ | 292 | $ | 3,028 | $ | 1,112 | ||||||||||||
| Net charge-offs - acquired loans | 441 | 78 | 99 | 624 | |||||||||||||||||
| Total Net Charge-offs | 655 | 370 | 3,127 | 1,736 | |||||||||||||||||
| Net charge-offs to average loans - non-acquired loans | % | 0.02 | % | 0.02 | % | 0.20 | % | 0.08 | % | ||||||||||||
| Net charge-offs to average loans - acquired loans | 0.03 | 0.01 | 0.01 | 0.04 | |||||||||||||||||
| Total Net Charge-offs to Average Loans | 0.05 | 0.03 | 0.21 | 0.12 | |||||||||||||||||
| Allowance for credit losses - non-acquired loans | 64,740 | $ | 64,525 | $ | 66,523 | $ | 69,786 | $ | 70,388 | ||||||||||||
| Allowance for credit losses - acquired loans | 16,602 | 20,120 | 22,947 | 23,625 | |||||||||||||||||
| Total Allowance for Credit Losses | 87,823 | $ | 81,127 | $ | 86,643 | $ | 92,733 | $ | 94,013 | ||||||||||||
| Non-acquired loans at end of period | 4,608,801 | $ | 4,290,622 | $ | 4,208,911 | $ | 4,196,205 | $ | 4,157,376 | ||||||||||||
| Acquired loans at end of period | 782,315 | 870,928 | 972,183 | 1,061,853 | |||||||||||||||||
| Paycheck Protection Program loans at end of period1 | 364,112 | 581,653 | 566,961 | 638,800 | |||||||||||||||||
| Total Loans | 5,905,884 | $ | 5,437,049 | $ | 5,661,492 | $ | 5,735,349 | $ | 5,858,029 | ||||||||||||
| Non-acquired loans allowance for credit losses to non-acquired loans at end of period | % | 1.50 | % | 1.58 | % | 1.66 | % | 1.69 | % | ||||||||||||
| Total allowance for credit losses to total loans at end of period | 1.49 | 1.53 | 1.62 | 1.60 | |||||||||||||||||
| Total allowance for credit losses to total loans, excluding PPP loans | 1.60 | 1.71 | 1.79 | 1.80 | |||||||||||||||||
| Purchase discount on acquired loans at end of period | 2.98 | 2.93 | 2.86 | 3.01 | |||||||||||||||||
| End of Period | |||||||||||||||||||||
| Nonperforming loans | 32,612 | $ | 32,920 | $ | 35,328 | $ | 36,110 | $ | 36,897 | ||||||||||||
| Other real estate owned | 11,019 | 10,836 | 10,182 | 12,299 | |||||||||||||||||
| Properties previously used in bank operations included in other real estate owned | 1,785 | 4,713 | 2,569 | 3,592 | |||||||||||||||||
| Total Nonperforming Assets | 46,240 | $ | 45,724 | $ | 50,877 | $ | 48,861 | $ | 52,788 | ||||||||||||
| Accruing troubled debt restructures (TDRs) | 4,047 | $ | 4,037 | $ | 4,067 | $ | 4,182 | $ | 10,190 | ||||||||||||
| Nonperforming Loans to Loans at End of Period | % | 0.61 | % | 0.62 | % | 0.63 | % | 0.63 | % | ||||||||||||
| Nonperforming Assets to Total Assets at End of Period | 0.49 | 0.58 | 0.59 | 0.64 | |||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||
| Loans | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||
| Construction and land development | 227,459 | $ | 234,347 | $ | 227,117 | $ | 245,108 | $ | 280,610 | ||||||||||||
| Commercial real estate - owner occupied | 1,127,640 | 1,133,085 | 1,141,310 | 1,125,460 | |||||||||||||||||
| Commercial real estate - non-owner occupied | 1,412,439 | 1,438,365 | 1,395,854 | 1,394,464 | |||||||||||||||||
| Residential real estate | 1,226,536 | 1,246,549 | 1,342,628 | 1,393,396 | |||||||||||||||||
| Commercial and financial | 900,206 | 860,813 | 854,753 | 833,083 | |||||||||||||||||
| Consumer | 171,769 | 173,910 | 188,735 | 192,216 | |||||||||||||||||
| Paycheck Protection Program | 364,112 | 581,653 | 566,961 | 638,800 | |||||||||||||||||
| Total Loans | 5,905,884 | $ | 5,437,049 | $ | 5,661,492 | $ | 5,735,349 | $ | 5,858,029 | ||||||||||||
| 13Q'21 includes 39 million in Paycheck Protection Program loans acquired from Legacy Bank and 3Q'20 includes 54 million acquired from Freedom Bank. |
All values are in US Dollars.
| AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1 | (Unaudited) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | ||||||||||||||||||
| 3Q'21 | 2Q'21 | 3Q'20 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||
| (Amounts in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||
| Assets | ||||||||||||||||||
| Earning assets: | ||||||||||||||||||
| Securities: | ||||||||||||||||||
| Taxable | $ | 1,971,520 | $ | 7,775 | 1.58 | % | $ | 1,629,410 | $ | 6,559 | 1.61 | % | $ | 1,322,160 | $ | 6,972 | 2.11 | % |
| Nontaxable | 25,311 | 181 | 2.86 | 25,581 | 186 | 2.90 | 23,570 | 157 | 2.67 | |||||||||
| Total Securities | 1,996,831 | 7,956 | 1.59 | 1,654,991 | 6,745 | 1.63 | 1,345,730 | 7,129 | 2.12 | |||||||||
| Federal funds sold and other investments | 1,091,997 | 867 | 0.31 | 925,323 | 709 | 0.31 | 239,511 | 556 | 0.92 | |||||||||
| Loans excluding PPP loans | 5,422,350 | 58,600 | 4.29 | 5,092,897 | 55,313 | 4.36 | 5,242,776 | 58,854 | 4.47 | |||||||||
| PPP loans | 281,724 | 5,917 | 8.33 | 505,339 | 5,127 | 4.07 | 618,088 | 1,719 | 1.11 | |||||||||
| Total Loans | 5,704,074 | 64,517 | 4.49 | 5,598,236 | 60,440 | 4.33 | 5,860,864 | 60,573 | 4.11 | |||||||||
| Total Earning Assets | 8,792,902 | 73,340 | 3.31 | 8,178,550 | 67,894 | 3.33 | 7,446,105 | 68,258 | 3.65 | |||||||||
| Allowance for credit losses | (88,412) | (86,042) | (92,151) | |||||||||||||||
| Cash and due from banks | 386,781 | 327,171 | 138,749 | |||||||||||||||
| Premises and equipment | 70,667 | 70,033 | 72,572 | |||||||||||||||
| Intangible assets | 254,980 | 235,964 | 228,801 | |||||||||||||||
| Bank owned life insurance | 164,879 | 133,484 | 129,156 | |||||||||||||||
| Other assets | 171,937 | 166,686 | 163,658 | |||||||||||||||
| Total Assets | $ | 9,753,734 | $ | 9,025,846 | $ | 8,086,890 | ||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing demand | $ | 1,891,092 | $ | 219 | 0.05 | % | $ | 1,692,178 | $ | 235 | 0.06 | % | $ | 1,364,947 | $ | 330 | 0.10 | % |
| Savings | 842,018 | 65 | 0.03 | 790,734 | 118 | 0.06 | 648,319 | 170 | 0.10 | |||||||||
| Money market | 1,860,386 | 565 | 0.12 | 1,736,481 | 627 | 0.14 | 1,328,931 | 799 | 0.24 | |||||||||
| Time deposits | 572,661 | 583 | 0.40 | 533,350 | 524 | 0.39 | 1,051,316 | 2,673 | 1.01 | |||||||||
| Securities sold under agreements to repurchase | 120,507 | 35 | 0.12 | 115,512 | 35 | 0.12 | 90,357 | 40 | 0.18 | |||||||||
| Federal Home Loan Bank borrowings | — | — | — | — | — | — | 93,913 | 181 | 0.77 | |||||||||
| Other borrowings | 71,530 | 418 | 2.32 | 71,460 | 422 | 2.37 | 71,258 | 444 | 2.48 | |||||||||
| Total Interest-Bearing Liabilities | 5,358,194 | 1,885 | 0.14 | 4,939,715 | 1,961 | 0.16 | 4,649,041 | 4,637 | 0.40 | |||||||||
| Noninterest demand | 2,985,582 | 2,799,643 | 2,279,584 | |||||||||||||||
| Other liabilities | 161,411 | 116,093 | 96,458 | |||||||||||||||
| Total Liabilities | 8,505,187 | 7,855,451 | 7,025,083 | |||||||||||||||
| Shareholders' equity | 1,248,547 | 1,170,395 | 1,061,807 | |||||||||||||||
| Total Liabilities & Equity | $ | 9,753,734 | $ | 9,025,846 | $ | 8,086,890 | ||||||||||||
| Cost of deposits | 0.07 | % | 0.08 | % | 0.24 | % | ||||||||||||
| Interest expense as a % of earning assets | 0.09 | % | 0.10 | % | 0.25 | % | ||||||||||||
| Net interest income as a % of earning assets | $ | 71,455 | 3.22 | % | $ | 65,933 | 3.23 | % | $ | 63,621 | 3.40 | % | ||||||
| 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. | ||||||||||||||||||
| Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances. | ||||||||||||||||||
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| (Amounts in thousands, except ratios) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||
| Assets | ||||||||||||||||||
| Earning assets: | ||||||||||||||||||
| Securities: | ||||||||||||||||||
| Taxable | $ | 1,718,671 | $ | 20,632 | 1.60 | % | $ | 1,203,877 | $ | 23,241 | 2.57 | % | ||||||
| Nontaxable | 25,606 | 554 | 2.88 | 20,895 | 461 | 2.94 | ||||||||||||
| Total Securities | 1,744,277 | 21,186 | 1.62 | 1,224,772 | 23,702 | 2.58 | ||||||||||||
| Federal funds sold and other investments | 800,839 | 2,162 | 0.36 | 253,635 | 1,974 | 1.04 | ||||||||||||
| Loans excluding PPP loans | 5,222,629 | 169,417 | 4.34 | 5,254,089 | 182,239 | 4.63 | ||||||||||||
| PPP loans | 464,397 | 17,930 | 5.16 | 348,407 | 6,787 | 2.60 | ||||||||||||
| Total Loans | 5,687,026 | 187,347 | 4.40 | 5,602,496 | 189,026 | 4.51 | ||||||||||||
| Total Earning Assets | 8,232,142 | 210,695 | 3.42 | 7,080,903 | 214,702 | 4.05 | ||||||||||||
| Allowance for credit losses | (88,717) | (78,067) | ||||||||||||||||
| Cash and due from banks | 323,693 | 111,019 | ||||||||||||||||
| Premises and equipment | 71,644 | 70,451 | ||||||||||||||||
| Intangible assets | 242,820 | 228,795 | ||||||||||||||||
| Bank owned life insurance | 143,601 | 127,683 | ||||||||||||||||
| Other assets | 167,775 | 145,827 | ||||||||||||||||
| Total Assets | $ | 9,092,958 | $ | 7,686,611 | ||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing demand | $ | 1,728,985 | $ | 712 | 0.06 | % | $ | 1,279,485 | $ | 1,461 | 0.15 | % | ||||||
| Savings | 785,447 | 320 | 0.05 | 588,913 | 683 | 0.15 | ||||||||||||
| Money market | 1,736,519 | 1,862 | 0.14 | 1,217,627 | 3,548 | 0.39 | ||||||||||||
| Time deposits | 605,269 | 2,294 | 0.51 | 1,165,194 | 11,261 | 1.29 | ||||||||||||
| Securities sold under agreements to repurchase | 116,304 | 112 | 0.13 | 78,755 | 241 | 0.41 | ||||||||||||
| Federal Home Loan Bank borrowings | — | — | — | 180,893 | 1,460 | 1.08 | ||||||||||||
| Other borrowings | 71,460 | 1,266 | 2.37 | 71,186 | 1,748 | 3.28 | ||||||||||||
| Total Interest-Bearing Liabilities | 5,043,984 | 6,566 | 0.17 | 4,582,053 | 20,402 | 0.59 | ||||||||||||
| Noninterest demand | 2,741,115 | 2,001,630 | ||||||||||||||||
| Other liabilities | 122,329 | 79,821 | ||||||||||||||||
| Total Liabilities | 7,907,428 | 6,663,504 | ||||||||||||||||
| Shareholders' equity | 1,185,530 | 1,023,107 | ||||||||||||||||
| Total Liabilities & Equity | $ | 9,092,958 | $ | 7,686,611 | ||||||||||||||
| Cost of deposits | 0.09 | % | 0.36 | % | ||||||||||||||
| Interest expense as a % of earning assets | 0.11 | % | 0.38 | % | ||||||||||||||
| Net interest income as a % of earning assets | $ | 204,129 | 3.32 | % | $ | 194,300 | 3.67 | % | ||||||||||
| 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. | ||||||||||||||||||
| Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances. | ||||||||||||||||||
| CONSOLIDATED QUARTERLY FINANCIAL DATA | (Unaudited) | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | ||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (Amounts in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||
| Customer Relationship Funding | ||||||||||||||||||
| Noninterest demand | ||||||||||||||||||
| Commercial | $ | 2,535,922 | $ | 2,431,928 | $ | 2,189,564 | $ | 1,821,361 | $ | 1,973,494 | ||||||||
| Retail | 416,779 | 401,988 | 379,257 | 350,783 | 322,559 | |||||||||||||
| Public funds | 84,337 | 88,057 | 83,315 | 90,973 | 70,371 | |||||||||||||
| Other | 49,428 | 30,187 | 33,111 | 26,670 | 34,320 | |||||||||||||
| Total Noninterest Demand | 3,086,466 | 2,952,160 | 2,685,247 | 2,289,787 | 2,400,744 | |||||||||||||
| Interest-bearing demand | ||||||||||||||||||
| Commercial | 554,366 | 545,797 | 497,047 | 454,909 | 413,513 | |||||||||||||
| Retail | 1,069,668 | 958,619 | 895,853 | 839,958 | 777,078 | |||||||||||||
| Public funds | 221,131 | 259,468 | 255,035 | 271,202 | 194,854 | |||||||||||||
| Total Interest-Bearing Demand | 1,845,165 | 1,763,884 | 1,647,935 | 1,566,069 | 1,385,445 | |||||||||||||
| Total transaction accounts | ||||||||||||||||||
| Commercial | 3,090,288 | 2,977,725 | 2,686,611 | 2,276,270 | 2,387,007 | |||||||||||||
| Retail | 1,486,447 | 1,360,607 | 1,275,110 | 1,190,741 | 1,099,637 | |||||||||||||
| Public funds | 305,468 | 347,525 | 338,350 | 362,175 | 265,225 | |||||||||||||
| Other | 49,428 | 30,187 | 33,111 | 26,670 | 34,320 | |||||||||||||
| Total Transaction Accounts | 4,931,631 | 4,716,044 | 4,333,182 | 3,855,856 | 3,786,189 | |||||||||||||
| Savings | 834,309 | 811,516 | 768,362 | 689,179 | 655,072 | |||||||||||||
| Money market | ||||||||||||||||||
| Commercial | 827,901 | 787,894 | 692,537 | 611,623 | 634,697 | |||||||||||||
| Retail | 834,628 | 737,554 | 701,453 | 661,311 | 613,532 | |||||||||||||
| Brokered | 196,548 | 187,023 | 197,389 | 196,616 | 141,808 | |||||||||||||
| Public funds | 92,562 | 94,719 | 79,800 | 86,820 | 67,041 | |||||||||||||
| Total Money Market | 1,951,639 | 1,807,190 | 1,671,179 | 1,556,370 | 1,457,078 | |||||||||||||
| Brokered time certificates | 20,000 | 20,000 | 93,500 | 233,815 | 381,028 | |||||||||||||
| Other time certificates | 596,593 | 481,686 | 519,526 | 597,341 | 635,476 | |||||||||||||
| 616,593 | 501,686 | 613,026 | 831,156 | 1,016,504 | ||||||||||||||
| Total Deposits | $ | 8,334,172 | $ | 7,836,436 | $ | 7,385,749 | $ | 6,932,561 | $ | 6,914,843 | ||||||||
| Customer sweep accounts | $ | 105,548 | $ | 119,973 | $ | 109,171 | $ | 119,609 | $ | 89,508 |
Explanation of Certain Unaudited Non-GAAP Financial Measures
This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’ understanding of the Company’s business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might define or calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.
| GAAP TO NON-GAAP RECONCILIATION | (Unaudited) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| Quarterly Trends | Nine Months Ended | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | 3Q'21 | 2Q'21 | 1Q'21 | 4Q'20 | 3Q'20 | 3Q'21 | 3Q'20 | ||||||||||||||
| Net Income | $ | 22,944 | $ | 31,410 | $ | 33,719 | $ | 29,347 | $ | 22,628 | $ | 88,073 | $ | 48,417 | |||||||
| Total noninterest income | 19,028 | 15,322 | 17,671 | 14,930 | 16,946 | 52,021 | 46,640 | ||||||||||||||
| Securities losses (gains), net | 30 | 55 | 114 | 18 | (4) | 199 | (1,253) | ||||||||||||||
| Total Adjustments to Noninterest Income | 30 | 55 | 114 | 18 | (4) | 199 | (1,253) | ||||||||||||||
| Total Adjusted Noninterest Income | 19,058 | 15,377 | 17,785 | 14,948 | 16,942 | 52,220 | 45,387 | ||||||||||||||
| Total noninterest expense | 55,268 | 45,784 | 46,120 | 43,681 | 51,674 | 147,172 | 141,871 | ||||||||||||||
| Merger related charges | (6,281) | (509) | (581) | — | (4,281) | (7,371) | (9,074) | ||||||||||||||
| Amortization of intangibles | (1,306) | (1,212) | (1,211) | (1,421) | (1,497) | (3,729) | (4,436) | ||||||||||||||
| Business continuity expenses | — | — | — | — | — | — | (307) | ||||||||||||||
| Branch reductions and other expense initiatives | (870) | (663) | (449) | (354) | (464) | (1,982) | (464) | ||||||||||||||
| Total Adjustments to Noninterest Expense | (8,457) | (2,384) | (2,241) | (1,775) | (6,242) | (13,082) | (14,281) | ||||||||||||||
| Total Adjusted Noninterest Expense | 46,811 | 43,400 | 43,879 | 41,906 | 45,432 | 134,090 | 127,590 | ||||||||||||||
| Income Taxes | 7,049 | 8,785 | 10,157 | 8,793 | 6,992 | 25,991 | 14,025 | ||||||||||||||
| Tax effect of adjustments | 2,081 | 598 | 577 | 440 | 1,530 | 3,256 | 3,195 | ||||||||||||||
| Total Adjustments to Income Taxes | 2,081 | 598 | 577 | 440 | 1,530 | 3,256 | 3,195 | ||||||||||||||
| Adjusted Income Taxes | 9,130 | 9,383 | 10,734 | 9,233 | 8,522 | 29,247 | 17,220 | ||||||||||||||
| Adjusted Net Income | $ | 29,350 | $ | 33,251 | $ | 35,497 | $ | 30,700 | $ | 27,336 | $ | 98,098 | $ | 58,250 | |||||||
| Earnings per diluted share, as reported | $ | 0.40 | $ | 0.56 | $ | 0.60 | $ | 0.53 | $ | 0.42 | $ | 1.56 | $ | 0.91 | |||||||
| Adjusted Earnings per Diluted Share | 0.51 | 0.59 | 0.63 | 0.55 | 0.50 | 1.74 | 1.09 | ||||||||||||||
| Average diluted shares outstanding | 57,645 | 55,901 | 55,992 | 55,739 | 54,301 | 56,441 | 53,325 | ||||||||||||||
| Adjusted Noninterest Expense | $ | 46,811 | $ | 43,400 | $ | 43,879 | $ | 41,906 | $ | 45,432 | $ | 134,090 | $ | 127,590 | |||||||
| Provision for credit losses on unfunded commitments | (133) | — | — | 795 | (756) | (133) | (980) | ||||||||||||||
| Foreclosed property expense and net gain / (loss) on sale | (66) | 90 | 65 | (1,821) | (512) | 89 | (442) | ||||||||||||||
| Net Adjusted Noninterest Expense | $ | 46,612 | $ | 43,490 | $ | 43,944 | $ | 40,880 | $ | 44,164 | $ | 134,046 | $ | 126,168 | |||||||
| Revenue | $ | 90,352 | $ | 81,124 | $ | 84,281 | $ | 83,721 | $ | 80,449 | $ | 255,757 | $ | 240,592 | |||||||
| Total Adjustments to Revenue | 30 | 55 | 114 | 18 | (4) | 199 | (1,253) | ||||||||||||||
| Impact of FTE adjustment | 131 | 131 | 131 | 112 | 118 | 393 | 348 | ||||||||||||||
| Adjusted Revenue on a fully taxable equivalent basis | $ | 90,513 | $ | 81,310 | $ | 84,526 | $ | 83,851 | $ | 80,563 | $ | 256,349 | $ | 239,687 | |||||||
| Adjusted Efficiency Ratio | 51.50 | % | 53.49 | % | 51.99 | % | 48.75 | % | 54.82 | % | 52.29 | % | 52.64 | % | |||||||
| Net Interest Income | $ | 71,324 | $ | 65,802 | $ | 66,610 | $ | 68,791 | $ | 63,503 | $ | 203,736 | $ | 193,952 | |||||||
| Impact of FTE adjustment | 131 | 131 | 131 | 112 | 118 | 393 | 348 | ||||||||||||||
| Net Interest Income including FTE adjustment | $ | 71,455 | $ | 65,933 | $ | 66,741 | $ | 68,903 | $ | 63,621 | $ | 204,129 | $ | 194,300 | |||||||
| Total noninterest income | 19,028 | 15,322 | 17,671 | 14,930 | 16,946 | 52,021 | 46,640 | ||||||||||||||
| Total noninterest expense | 55,268 | 45,784 | 46,120 | 43,681 | 51,674 | 147,172 | 141,871 | ||||||||||||||
| Pre-Tax Pre-Provision Earnings | $ | 35,215 | $ | 35,471 | $ | 38,292 | $ | 40,152 | $ | 28,893 | $ | 108,978 | $ | 99,069 | |||||||
| Total Adjustments to Noninterest Income | 30 | 55 | 114 | 18 | (4) | 199 | (1,253) | ||||||||||||||
| Total Adjustments to Noninterest Expense | (8,656) | (2,294) | (2,176) | (2,801) | (7,510) | (13,126) | (15,703) | ||||||||||||||
| Adjusted Pre-Tax Pre-Provision Earnings | $ | 43,901 | $ | 37,820 | $ | 40,582 | $ | 42,971 | $ | 36,399 | $ | 122,303 | $ | 113,519 | |||||||
| Average Assets | $ | 9,753,734 | $ | 9,025,846 | $ | 8,485,354 | $ | 8,376,396 | $ | 8,086,890 | $ | 9,092,958 | $ | 7,686,611 | |||||||
| Less average goodwill and intangible assets | (254,980) | (235,964) | (237,323) | (238,631) | (228,801) | (242,820) | (228,795) | ||||||||||||||
| Average Tangible Assets | $ | 9,498,754 | $ | 8,789,882 | $ | 8,248,031 | $ | 8,137,765 | $ | 7,858,089 | $ | 8,850,138 | $ | 7,457,816 | |||||||
| Return on Average Assets (ROA) | 0.93 | % | 1.40 | % | 1.61 | % | 1.39 | % | 1.11 | % | 1.29 | % | 0.84 | % | |||||||
| Impact of removing average intangible assets and related amortization | 0.07 | 0.08 | 0.09 | 0.10 | 0.09 | 0.08 | 0.09 | ||||||||||||||
| Return on Average Tangible Assets (ROTA) | 1.00 | 1.48 | 1.70 | 1.49 | 1.20 | 1.37 | 0.93 | ||||||||||||||
| Impact of other adjustments for Adjusted Net Income | 0.23 | 0.04 | 0.05 | 0.01 | 0.18 | 0.11 | 0.11 | ||||||||||||||
| Adjusted Return on Average Tangible Assets | 1.23 | 1.52 | 1.75 | 1.50 | 1.38 | 1.48 | 1.04 | ||||||||||||||
| GAAP TO NON-GAAP RECONCILIATION | (Unaudited) | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| Quarterly Trends | Nine Months Ended | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | 3Q'21 | 2Q'21 | 1Q'21 | 4Q'20 | 3Q'20 | 3Q'21 | 3Q'20 | ||||||||||||||
| Average Shareholders' Equity | $ | 1,248,547 | $ | 1,170,395 | $ | 1,136,416 | $ | 1,111,073 | $ | 1,061,807 | $ | 1,185,530 | $ | 1,023,107 | |||||||
| Less average goodwill and intangible assets | (254,980) | (235,964) | (237,323) | (238,631) | (228,801) | (242,820) | (228,795) | ||||||||||||||
| Average Tangible Equity | $ | 993,567 | $ | 934,431 | $ | 899,093 | $ | 872,442 | $ | 833,006 | $ | 942,710 | $ | 794,312 | |||||||
| Return on Average Shareholders' Equity | 7.29 | % | 10.76 | % | 12.03 | % | 10.51 | % | 8.48 | % | 9.93 | % | 6.32 | % | |||||||
| Impact of removing average intangible assets and related amortization | 2.27 | 3.12 | 3.59 | 3.36 | 2.87 | 2.96 | 2.39 | ||||||||||||||
| Return on Average Tangible Common Equity (ROTCE) | 9.56 | 13.88 | 15.62 | 13.87 | 11.35 | 12.89 | 8.71 | ||||||||||||||
| Impact of other adjustments for Adjusted Net Income | 2.16 | 0.39 | 0.39 | 0.13 | 1.71 | 1.02 | 1.09 | ||||||||||||||
| Adjusted Return on Average Tangible Common Equity | 11.72 | 14.27 | 16.01 | 14.00 | 13.06 | 13.91 | 9.80 | ||||||||||||||
| Loan interest income1 | $ | 64,517 | $ | 60,440 | $ | 62,390 | $ | 65,684 | $ | 60,573 | $ | 187,347 | $ | 189,026 | |||||||
| Accretion on acquired loans | (3,483) | (2,886) | (2,868) | (4,448) | (3,254) | (9,237) | (10,529) | ||||||||||||||
| Interest and fees on PPP loans | (5,917) | (5,127) | (6,886) | (5,187) | (1,719) | (17,930) | (6,787) | ||||||||||||||
| Loan interest income excluding PPP and accretion on acquired loans | $ | 55,117 | $ | 52,427 | $ | 52,636 | $ | 56,049 | $ | 55,600 | $ | 160,180 | $ | 171,710 | |||||||
| Yield on loans1 | 4.49 | 4.33 | 4.39 | 4.42 | 4.11 | 4.40 | 4.51 | ||||||||||||||
| Impact of accretion on acquired loans | (0.24) | (0.21) | (0.20) | (0.30) | (0.22) | (0.21) | (0.25) | ||||||||||||||
| Impact of PPP loans | (0.22) | 0.01 | (0.04) | 0.11 | 0.33 | (0.09) | 0.11 | ||||||||||||||
| Yield on loans excluding PPP and accretion on acquired loans | 4.03 | % | 4.13 | % | 4.15 | % | 4.23 | % | 4.22 | % | 4.10 | % | 4.37 | % | |||||||
| Net Interest Income1 | $ | 71,455 | $ | 65,933 | $ | 66,741 | $ | 68,903 | $ | 63,621 | $ | 204,129 | $ | 194,300 | |||||||
| Accretion on acquired loans | (3,483) | (2,886) | (2,868) | (4,448) | (3,254) | (9,237) | (10,529) | ||||||||||||||
| Interest and fees on PPP loans | (5,917) | (5,127) | (6,886) | (5,187) | (1,719) | (17,930) | (6,787) | ||||||||||||||
| Net interest income excluding PPP and accretion on acquired loans | $ | 62,055 | $ | 57,920 | $ | 56,987 | $ | 59,268 | $ | 58,648 | $ | 176,962 | $ | 176,984 | |||||||
| Net Interest Margin | 3.22 | 3.23 | 3.51 | 3.59 | 3.40 | 3.32 | 3.67 | ||||||||||||||
| Impact of accretion on acquired loans | (0.15) | (0.14) | (0.15) | (0.23) | (0.17) | (0.15) | (0.20) | ||||||||||||||
| Impact of PPP loans | (0.18) | (0.06) | (0.11) | 0.01 | 0.19 | (0.12) | 0.04 | ||||||||||||||
| Net interest margin excluding PPP and accretion on acquired loans | 2.89 | % | 3.03 | % | 3.25 | % | 3.37 | % | 3.42 | % | 3.05 | % | 3.51 | % | |||||||
| Security interest income1 | $ | 7,956 | $ | 6,745 | $ | 6,485 | $ | 6,586 | $ | 7,129 | $ | 21,186 | $ | 23,702 | |||||||
| Tax equivalent adjustment on securities | (38) | (39) | (39) | (23) | (32) | (116) | (93) | ||||||||||||||
| Security interest income excluding tax equivalent adjustment | $ | 7,918 | $ | 6,706 | $ | 6,446 | $ | 6,563 | $ | 7,097 | $ | 21,070 | $ | 23,609 | |||||||
| Loan interest income1 | $ | 64,517 | $ | 60,440 | $ | 62,390 | $ | 65,684 | $ | 60,573 | $ | 187,347 | $ | 189,026 | |||||||
| Tax equivalent adjustment on loans | (93) | (92) | (92) | (89) | (86) | (277) | (255) | ||||||||||||||
| Loan interest income excluding tax equivalent adjustment | $ | 64,424 | $ | 60,348 | $ | 62,298 | $ | 65,595 | $ | 60,487 | $ | 187,070 | $ | 188,771 | |||||||
| Net Interest Income1 | $ | 71,455 | $ | 65,933 | $ | 66,741 | $ | 68,903 | $ | 63,621 | $ | 204,129 | $ | 194,300 | |||||||
| Tax equivalent adjustment on securities | (38) | (39) | (39) | (23) | (32) | (116) | (93) | ||||||||||||||
| Tax equivalent adjustment on loans | (93) | (92) | (92) | (89) | (86) | (277) | (255) | ||||||||||||||
| Net interest income excluding tax equivalent adjustment | $ | 71,324 | $ | 65,802 | $ | 66,610 | $ | 68,791 | $ | 63,503 | $ | 203,736 | $ | 193,952 | |||||||
| 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. |
sbcf3q2021earningspresen
Earnings Presentation THIRD QUARTER 2021 RESULTS Contact: (email) Tracey.Dexter@SeacoastBank.com (phone) 772.403.0461 (web) www.SeacoastBanking.com
2 THIRD QUARTER 2021 EARNINGS PRESENTATION Cautionary Notice Regarding Forward-Looking Statements This press release contains “forward-looking statements” within the meaning, and protections, of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in the Company’s markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that the Company has acquired, or expects to acquire, Legacy Bank of Florida, Florida Business Bank and Sabal Palm Bank, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical facts, any of which may be impacted by the COVID-19 pandemic and related effects on the U.S. economy. Actual results may differ from those set forth in the forward-looking statements. Forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect the Company to update any forward-looking statements. All statements other than statements of historical fact could be forward-looking statements. You can identify these forward- looking statements through the use of words such as “may”, “will”, “anticipate”, “assume”, “should”, “support”, “indicate”, “would”, “believe”, “contemplate”, “expect”, “estimate”, “continue”, “further”, “plan”, “point to”, “project”, “could”, “intend”, “target” or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality and the adverse effects of COVID-19 (economic and otherwise); government or regulatory responses to the COVID-19 pandemic; governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes including those that impact the money supply and inflation; changes in accounting policies, rules and practices, including the impact of the adoption of the current expected credit losses (“CECL”) methodology; participation in the Paycheck Protection Program (“PPP”); the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest rate sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; uncertainty related to the impact of LIBOR calculations on securities, loans and debt; changes in borrower credit risks and payment behaviors; changes in retail distribution strategies, customer preferences and behavior; changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions; changes in the prices, values and sales volumes for residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect Seacoast or the banking industry; the Company's concentration in commercial real estate loans and in real estate collateral in Florida; inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of Seacoast’s investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including Seacoast’s ability to continue to identify acquisition targets and successfully acquire and integrate desirable financial institutions; changes in technology or products that may be more difficult, costly, or less effective than anticipated; the Company's ability to identify and address increased cybersecurity risks, including as a result of employees working remotely; inability of Seacoast’s risk management framework to manage risks associated with the Company's business; dependence on key suppliers or vendors to obtain equipment or services for the business on acceptable terms; reduction in or the termination of Seacoast’s ability to use the mobile-based platform that is critical to the Company's business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving the Company, including as a result of the Company’s participation in the PPP; Seacoast’s ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that deferred tax assets could be reduced if estimates of future taxable income from the Company's operations and tax planning strategies are less than currently estimated and sales of capital stock could trigger a reduction in the amount of net operating loss carryforwards that the Company may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, non-bank financial technology providers, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in the Company's market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; the failure of assumptions underlying the establishment of reserves for possible loan losses. The risks relating to the Sabal Palm Bancorp, Inc. and Business Bank of Florida, Corp. proposed mergers include, without limitation: the timing to consummate the proposed mergers; the risk that a condition to closing of the proposed mergers may not be satisfied; the risk that the proposed mergers are not completed at all; the diversion of management time on issues related to the proposed mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the mergers being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectation; the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures on solicitations of customers by competitors; as well as difficulties and risks inherent with entering new markets. Actual results and capital and other financial conditions may differ materially from those included in these statements due to a variety of factors. These factors include, among others described above, macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the duration and severity of the impact on public health, the U.S. and global economies, financial markets and consumer and corporate customers and clients, including economic activity and employment, as well as the various actions taken in response by governments, central banks and others, including Seacoast, and the precautionary statements included in this release. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in the Company’s annual report on Form 10-K for the year ended December 31, 2020 and quarterly reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 under “Special Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors”, and otherwise in the Company’s SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC’s Internet website at www.sec.gov.
3 THIRD QUARTER 2021 EARNINGS PRESENTATION • Highly disciplined credit portfolio • Strong liquidity position • Prudent capital position to support further organic growth and opportunistic acquisition • Steady increase in shareholder value with tangible book value per share increasing 13% year-over- year • Active board with a diverse range of experience and expertise Valuable Florida Franchise, Well Positioned for Growth with Strong Capital, Liquidity and Disciplined Credit Culture • $9.9 billion in assets as of September 30, 2021, operating in the nation’s third-most populous state • Strong presence in four of Florida’s most attractive markets ▪ #1 Florida-based bank in Orlando MSA ▪ #1 market share in Port St Lucie MSA ▪ #2 Florida-based bank in West Palm Beach/Fort Lauderdale ▪ #2 Florida-based bank in St. Petersburg • Market Cap: $2.0 billion as of September 30, 2021 Seacoast Customer Map
4 THIRD QUARTER 2021 EARNINGS PRESENTATION • Companies and individuals seeking real estate affordability, lower taxes, warmer weather, and easy flights back to the Northeast are migrating to Florida. • Florida's population grew 14.6% between 2010 and 2020. Double the rate of overall U.S. population growth. Source: US Census data • In March 2021, short-term population projections were increased reflecting stronger domestic net-migration trends supported by a shift in lifestyle preference away from more dense urban areas. Source: Office of Economic & Demographic Research – Florida’s population will surpass 23 million by late 2024 or 2025 (21.6 million at year-end 2020). – This increase is equivalent to adding a city larger than Orlando every year • Financial institutions and other major corporations have announced plans to relocate some or all of their operations to Florida in the near future: Florida’s Economic Growth Continues to Accelerate
5 THIRD QUARTER 2021 EARNINGS PRESENTATION Third Quarter 2021 Highlights • Net income of $22.9 million includes the impact of recording the provision for loan losses associated with the day 1 onboarding of Legacy Bank’s loan portfolio and merger-related expenses associated with Legacy Bank and with the two pending transactions. • Adjusted net income1 of $29.4 million includes the day 1 impact on provision for loan losses related to onboarding the Legacy Bank loan portfolio. • Pre-tax pre-provision adjusted earnings1 of $43.9 million, an increase of $6.1 million compared to the prior quarter, and an increase of $7.5 million compared to the prior year quarter. • Steadily building shareholder value through consistent growth in tangible book value per share, ending the period at $17.52, an increase of 13% over the prior year. • Commercial loan originations increased 72% over the prior quarter to $332 million. • Commercial pipeline has grown in each quarter of 2021, the result of continued investments in commercial banking talent and technology. • Continued strong asset quality trends, with nonperforming loans declining to 0.55% of total loans. • Cost of deposits improved to seven basis points. • Record wealth management revenue of $2.6 million and 47% AUM growth from September 30, 2020. • Record SBA income of $0.8 million, with a renewed focus on saleable lending activity as the Paycheck Protection Program (“PPP”) winds down. • Completed the acquisition of Legacy Bank of Florida on August 6, 2021, deepening South Florida presence. • Announced the proposed acquisitions of Sabal Palm Bank and Florida Business Bank, both expected to close in the first quarter of 2022. 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.
6 THIRD QUARTER 2021 EARNINGS PRESENTATION Net Interest Income and Margin • Net interest income1 totaled $71.5 million, an increase of $5.5 million, or 8%, from the prior quarter. This included interest and fees earned on PPP loans of $5.9 million compared to $5.1 million in the prior quarter. • Loan growth resulted in an increase in interest and fees on non-PPP loans by $3.3 million compared to the prior quarter, while non-PPP loan yields declined seven basis points to 4.29%. • The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 15 basis points compared to an increase of 14 basis points in the prior quarter. The effect on net interest margin of interest and fees on PPP loans was an increase of 18 basis points compared to an increase of six basis points in the prior quarter. • Securities income increased $1.2 million from the prior quarter due to higher investment balances and the benefit of a $0.4 million contractual yield maintenance provision. Yields declined four basis points to 1.59%. ($ in th ou sa nd s) $63,621 $68,903 $66,741 $65,933 $71,455 3.40% 3.59% 3.51% 3.23% 3.22%3.42% 3.37% 3.25% 3.03% 2.89% Net Interest Income Net Interest Margin NIM, excluding PPP and accretion on acquired loans 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 1Calculated on a fully taxable equivalent basis using amortized cost.
7 THIRD QUARTER 2021 EARNINGS PRESENTATION Noninterest income increased $3.7 million from the prior quarter to $19.0 million, and adjusted noninterest income1 increased $3.7 million to $19.1 million sequentially. Changes include: • Wealth management income increased to a record $2.6 million, compared to $2.4 million in the second quarter of 2021. With total assets under management of $1.2 billion, the team continues to successfully win business with commercial relationships and high net worth families across the Company’s footprint. • Mortgage banking fees were $2.5 million, compared to $3.0 million in the prior quarter, due to slowing refinance activity and low housing inventory levels. • SBA gains were a record $0.8 million, compared to $0.2 million in the prior quarter, reflecting a renewed focus on saleable lending activity as PPP winds down. • The Company acquired $25 million in BOLI late in the second quarter of 2021, and $9.1 million in BOLI from Legacy Bank, contributing to an increase of $0.3 million in related income during the quarter. Late in the third quarter, the Company purchased an additional $25.0 million in BOLI. • Other income increased by $3.0 million, attributed to gains on an SBIC investment. These gains resulted from the liquidation of an investment made by the fund. The amounts recognized on SBIC investments will vary and are not expected to occur on a routine basis. Continued Strength in Noninterest Income $16,942 $15,377 $19,058 $2,242 $2,338 $2,495 $3,682 $4,145 $4,131 $1,973 $2,386 $2,562 $5,283 $2,977 $2,550 $252 $232 $812 $2,611 $2,427 $5,380 $899 $872 $1,128 BOLI Other Income SBA Gains Mortgage Banking Wealth Management Interchange Income Service Charges 3Q'20 2Q'21 3Q'21 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. 2Other Income includes income and gains on SBIC investments, marine finance fees, and other fees related to customer activity as well as securities gains of $4 thousand in 3Q'20, losses of $0.1 million in 2Q'21 and losses of $30 thousand in 3Q'21. 3Other Income on an adjusted basis includes income and gains on SBIC investments, marine finance fees, and other fees related to customer activity. $16,946 $15,322 $19,028 $2,242 $2,338 $2,495 $3,682 $4,145 $4,131 $1,972 $2,387 $2,562 $5,283 $2,977 $2,550 $252 $232 $812 $2,616 $2,371 $5,350 $899 $872 $1,128 BOLI Other Income SBA Gains Mortgage Banking Wealth Management Interchange Income Service Charges 3Q'20 2Q'21 3Q'21 Adjusted Noninterest Income1 ($ in thousands) 2 3 Noninterest Income ($ in thousands)
8 THIRD QUARTER 2021 EARNINGS PRESENTATION Continued Focus on Disciplined Expense Control Noninterest expense increased $9.5 million and adjusted noninterest expense1 increased $3.4 million sequentially. The third quarter included $6.3 million in merger-related expenses and $0.9 million in costs associated with branch consolidation and other initiatives. Changes quarter-over-quarter on an adjusted basis include: • Salaries and benefits increased $2.3 million to $28.7 million resulting from increases relating to the addition of the Legacy Bank branch franchise, and increases resulting from investments in commercial banking talent. • Legal and professional fees increased by $0.5 million compared to the second quarter and includes support for technology initiatives. • Other Expense increased $0.4 million, which included $0.1 million in provision for credit losses on unfunded commitments acquired from Legacy Bank, and higher marketing expenses associated with the timing of campaigns. $45,432 $43,400 $46,811 $26,541 $26,364 $28,691 $4,207 $4,694 $4,657 $5,445 $5,217 $5,441$1,714 $1,677 $2,131 $7,525 $5,448 $5,891 Other Expense Legal & Professional Occupancy & Telephone Data Processing Cost Salaries & Benefits 3Q'20 2Q'21 3Q'21 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. 2Other Expense includes marketing expenses, provision for credit losses on unfunded commitments, foreclosed property expense and net loss/(gain) on sale, and other expenses associated with ongoing business operations. $51,674 $45,784 $55,268 $27,120 $26,919 $32,096 $1,497 $1,212 $1,306$6,128 $4,676 $5,610 $6,139 $5,314 $5,918$3,018 $2,182 $4,151 $7,772 $5,481 $6,187 Other Expense Legal & Professional Occupancy & Telephone Data Processing Cost Amortization of Intangibles Salaries & Benefits 3Q'20 2Q'21 3Q'21 2 Adjusted Noninterest Expense1 ($ in thousands) 2 Noninterest Expense ($ in thousands)
9 THIRD QUARTER 2021 EARNINGS PRESENTATION • The efficiency ratio was 59.5% for the third quarter of 2021 compared to 54.9% in the prior quarter and 61.6% in the third quarter of 2020. Increases in the third quarter reflect higher expenses resulting from the acquisition of Legacy Bank during the third quarter of 2021. • The adjusted efficiency ratio1 was 51.5% for the third quarter of 2021 compared to 53.5% in the prior quarter and 54.8% in the third quarter of 2020. Palm Beach Community Bank and North Star Bank Acquisitions Pa lm B ea ch C om m un ity a nd N or th S ta r Ba nk A cq ui si tio n Efficiency Ratio Trend 58% 66% 57% 53% 49% 48% 60% 50% 62% 48% 53% 55% 60% 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. 57% 54% 56% 51% 49% 48% 54% 50% 55% 49% 52% 53% 51% 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 GAAP - Efficiency Adjusted - Efficiency1 First Bank of the Palm Beaches First Green Bank Freedom Bank Legacy Bank of Florida
10 THIRD QUARTER 2021 EARNINGS PRESENTATION Disciplined Approach to Lending in an Expanding Florida Economy $5,858 $5,735 $5,661 $5,437 $5,906 $5,219 $5,168 $5,079 $5,073 $5,715$639 $567 $582 $364 $191 4.11% 4.42% 4.39% 4.33% 4.49% 4.22% 4.23% 4.15% 4.13% 4.03% Yield Excluding PPP and Accretion on Acquired Loans Reported Yield PPP Loans Loans Excluding PPP 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Total Loans Outstanding ($ in millions) • Loans outstanding, excluding PPP, increased $642 million quarter-over-quarter, including $439 million from the acquisition of Legacy Bank. • Commercial loan originations increased 72% to $332 million, and the commercial pipeline increased 15% to $369 million. • Total PPP loan forgiveness during the third quarter was $217 million, resulting in acceleration of fee income and an increase in overall loan yields to 4.49%. • The yield on non-PPP loans declined to 4.29% from 4.36% in the second quarter of 2021, and when further excluding accretion on acquired loans, declined to 4.03% from 4.13%. • The Company remains focused and committed to its strict credit underwriting standards.
11 THIRD QUARTER 2021 EARNINGS PRESENTATION Organic Growth in Commercial Loan Categories During the Quarter Loans by Segment Compared to the Prior Quarter (in thousands) Total Loans 9/30/2021 Legacy Bank Acquired Wholesale Loan Purchases 09/30/2021 Excl. Legacy Bank and Purchases Organic Δ from PQ Construction and Land Development $ 227,459 $ 36,651 — $ 190,808 $ (43,540) Owner Occupied CRE 1,201,336 35,363 — 1,165,973 38,332 Commercial Real Estate 1,673,587 237,091 17,077 1,419,419 6,992 Commercial and Financial 982,552 58,324 — 924,228 23,998 Residential Real Estate 1,467,329 70,541 180,801 1,215,987 (10,550) Consumer 163,019 647 — 162,372 (9,394) Total Loans Excl. PPP 5,715,282 438,617 197,878 5,078,787 5,838 PPP 190,602 38,598 — 152,004 (212,108) Total Loans $ 5,905,884 $ 477,215 $ 197,878 $ 5,230,791 $ (206,270) Excluding growth from the Legacy Bank acquisition and wholesale purchases: $6 million in organic net loan growth $26 million (3% annualized) commercial growth
12 THIRD QUARTER 2021 EARNINGS PRESENTATION Paycheck Protection Program Loans ($ in m ill io ns ) $576 $256 $39 ($675) $196 December 31, 2020 Originations Acquisitions Forgiveness September 30, 2021 PPP Fee Revenue Summary (in thousands) Fees earned from SBA to date (net of related costs) to originate PPP loans $ 27,641 Fees recognized in 2020 (7,774) Fees recognized to date in 2021 (14,485) Fees remaining to be recognized in future periods $ 5,382 5,169 loans $9.5 deferred fees 2,782 loans 6,259 loans 2,111 loans $5.4 deferred fees PPP Loans Rollforward As of September 30, 2021, $5.4 million in fees remain that will be recognized over the loans’ remaining contractual maturity, or earlier, as loans are forgiven. 419 loans
13 THIRD QUARTER 2021 EARNINGS PRESENTATION Unrealized Gain (Loss) in Securities as of September 30, 2021 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Available for Sale Government backed $ 6,785 $ 371 $ (2) $ 7,154 Agency mortgage backed 1,147,743 12,378 (9,450) 1,150,671 Private label MBS and CMOs 75,754 1,710 (236) 77,228 CLO 277,262 149 (105) 277,306 Municipal 32,016 1,837 (57) 33,796 Total Available for Sale $ 1,539,560 $ 16,445 $ (9,850) $ 1,546,155 Held to Maturity Agency mortgage backed $ 526,502 $ 4,702 $ (12,740) $ 518,464 Total Held to Maturity $ 526,502 $ 4,702 $ (12,740) $ 518,464 Total Securities $ 2,066,062 $ 21,147 $ (22,590) $ 2,064,619 ($ in m ill io ns ) $207 $493 $527 $1,287 $1,323 $1,546 2.12% 1.63% 1.59% HTM Securities AFS Securities Yield 3Q'20 2Q'21 3Q'21 Investment Securities Performance and Composition • Portfolio yield declined four basis points to 1.59% from 1.63% in the prior quarter, primarily due to lower yielding portfolio additions, partially offset by lower amortization from slower prepayments, and a contractual yield maintenance provision that positively impacted yield by eight basis points. • The net unrealized gain on AFS securities decreased from $12.4 million at June 30, 2021 to $6.6 million at September 30, 2021, largely due to the steepening of the yield curve during the quarter. • Net additions of approximately $256 million were primarily Agency CMOs with a weighted average duration of 3.0 and weighted average yield of 1.42%. • AFS portfolio duration declined to 3.16 from 3.22 in the prior quarter.
14 THIRD QUARTER 2021 EARNINGS PRESENTATION Strong Deposit Franchise Supported by Attractive Markets • Total deposits increased $498 million quarter- over-quarter, including $495 million from the Legacy Bank acquisition, and increased $1.4 billion, or 21%, compared to the third quarter of 2020. • Overall cost of deposits decreased to seven basis points from eight basis points in the prior quarter. • Transaction accounts increased 30% year-over- year and represent 59% of overall deposit funding. • At September 30, 2021, $233 million in customer deposits are being held off-balance sheet through programs with third-party deposit networks. This compares to $116 million at June 30, 2021. $6,915 $6,933 $7,386 $7,836 $8,334 $3,786 $3,856 $4,333 $4,716 $4,932 $2,112 $2,246 $2,440 $2,618 $2,785$1,017 $831 $613 $502 $617 Transaction Accounts Savings & Money Market Time Deposits 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 59% Deposits Outstanding ($ in millions)
15 THIRD QUARTER 2021 EARNINGS PRESENTATION Continued Branch Optimization While Maintaining Low Cost of Deposits • Seacoast's continued focus on organic growth and relationship-based funding, in combination with its innovative analytics platform, supports a well-diversified, low-cost deposit portfolio. • Cost of deposits declined one basis point quarter-over-quarter. Consistently low cost of deposits reflects the significant value of the deposit franchise. • Seacoast continues to evolve its branch footprint by redirecting capacity to attractive growth markets, and has consolidated 28% of branches since 2017. As of September 30, 2021, deposits per banking center were $165 million, compared to $138 million on September 30, 2020. ($ in m ill io ns ) Trended Cost of Deposits and Deposits per Branch $118 $116 $118 $135 $138 $138 $156 $166 $165 2.00% 1.75% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.73% 0.61% 0.57% 0.31% 0.24% 0.19% 0.13% 0.08% 0.07% Cost of Deposits Fed Funds Deposits per branch 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 1Includes customer deposits held off-balance sheet through programs with third-parties. 1
16 THIRD QUARTER 2021 EARNINGS PRESENTATION A Continued Focus on Building Wealth Management $653 $870 $1,161 4Q'19 4Q'20 3Q’21 Assets Under Management ($ in millions) • Assets under management totaled $1.2 billion at September 30, 2021 increasing 47% from September 30, 2020. This is a result of the wealth management team’s continuing success at winning business with commercial relationships and high net worth families across the footprint. • Wealth Management Income was $2.6 million in the third quarter of 2021, compared to $2.4 million in the prior quarter, and $2.0 million in the prior year quarter. • Since December 31, 2019, assets under management have increased at a compound annual growth rate (“CAGR”) of 34%. 34% CAG R
17 THIRD QUARTER 2021 EARNINGS PRESENTATION Allowance for Credit Losses and Purchase Discount ($ in thousands) Loans Outstanding Allowance for Credit Losses % of Category Purchase Discount % of Category Acquisition, Development & Construction $ 227,459 $ 2,603 1.14 % $ 724 0.32 % Owner Occupied Commercial Real Estate 1,201,336 8,653 0.72 4,513 0.38 Commercial Real Estate 1,673,587 40,085 2.40 15,344 0.92 Residential Real Estate 1,467,329 14,127 0.96 1,839 0.13 Commercial & Financial 982,552 19,524 1.99 4,064 0.41 Consumer 163,019 2,832 1.74 87 0.05 Total Excluding PPP $ 5,715,282 $ 87,823 1.54 % $ 26,571 0.46 % Paycheck Protection Program $ 190,602 $ — — % $ 25 0.01 % Total $ 5,905,884 $ 87,823 1.49 % $ 26,596 0.45 % • The acquisition of Legacy Bank resulted in the addition of $11.2 million in allowance for credit losses, of which $8.2 million is reflected in the third quarter provision for credit losses, and $3.0 million is recognized as an adjustment to the loans’ cost basis. An additional $6.0 million in purchase discount will be accreted through yield over the life of the loans. • The total allowance for credit losses of $87.8 million as of September 30, 2021 represents management’s estimate of lifetime expected credit losses. The remaining unrecognized discount on acquired loans of $26.6 million will be earned as an adjustment to yield over the life of the loans. Additionally, a reserve for potential credit losses on lending-related commitments of $2.3 million is reflected within Other Liabilities.
18 THIRD QUARTER 2021 EARNINGS PRESENTATION Continued Strong Asset Quality Trends Net Charge-Offs $1,736 $3,127 $370 $655 $1,432 0.12% 0.21% 0.03% 0.05% 0.10% NCO NCO/Total Loans 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Nonperforming Loans $36,897 $36,110 $35,328 $32,920 $32,612 0.63% 0.63% 0.62% 0.61% 0.55% NPL NPL/Total Loans 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 $94,013 $92,733 $86,643 $81,127 $87,823 1.80% 1.79% 1.71% 1.60% 1.54% 1.60% 1.62% 1.53% 1.49% 1.49% ACL ACL/Total Loans Excluding PPP ACL/Total Loans 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 10% 9% 9% 7% 10% 8% 7% 7% 6% 4% Classified Special Mention 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Allowance for Credit Losses ($ in thousands) Criticized Loans as a % of Risk-Based Capital
19 THIRD QUARTER 2021 EARNINGS PRESENTATION Strong Capital Supporting a Fortress Balance Sheet $15.57 $16.16 $16.62 $17.08 $17.52 $19.91 $20.46 $20.89 $21.33 $22.12 Tangible Book Value Per Share Book Value Per Share 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 10.7% 11.0% 10.7% 10.4% 10.6% 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 17.9% 18.5% 19.1% 19.2% 18.6% 16.8% 17.4% 18.1% 18.3% 17.7% Total Risk Based Capital Tier 1 Ratio 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 11.4% 13.9% 15.6% 13.9% 9.6% 13.1% 14.0% 16.0% 14.3% 11.7% GAAP - ROTCE Adjusted - ROTCE 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. 2FDICIA defines well capitalized as 10.0% for total risk based capital and 8.0% for Tier 1 ratio at a total Bank level. Tangible Book Value and Book Value Per Share Tangible Common Equity / Tangible Assets Total Risk Based and Tier 1 CapitalReturn on Tangible Common Equity 1 10.0%2 8.0%2
20 THIRD QUARTER 2021 EARNINGS PRESENTATION Steady Increase in Shareholder Value $10.41 $10.55 $10.95 $11.15 $11.39 $11.67 $12.01 $12.33 $12.98 $13.65 $14.30 $14.76 $14.42 $15.11 $15.57 $16.16 $16.62 $17.08 $17.52 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 • Compounded annual growth rate of 12% in tangible book value per share since 2017. • The decline in tangible book value per share during the first quarter of 2020 was primarily attributed to the Day-1 impact of the adoption of CECL. • Initiated a quarterly cash dividend of $0.13 in the second quarter of 2021.
21 THIRD QUARTER 2021 EARNINGS PRESENTATION Contact Details: Seacoast Banking Corporation of Florida Tracey L. Dexter Executive Vice President Chief Financial Officer (772) 403-0461 INVESTOR RELATIONS NASDAQ: SBCF
22 THIRD QUARTER 2021 EARNINGS PRESENTATION Appendix
23 THIRD QUARTER 2021 EARNINGS PRESENTATION Quarterly Trend Nine Months Ended (Amounts in thousands) 3Q'21 2Q'21 1Q'21 4Q'20 3Q'20 3Q'21 3Q'20 Commercial pipeline at period end $ 368,907 $ 322,014 $ 240,871 $ 166,735 $ 256,191 368,907 256,191 Commercial loan originations1 331,618 193,028 204,253 277,389 88,245 728,899 378,432 Residential pipeline-saleable at period end 42,847 60,585 92,141 92,017 149,896 42,847 149,896 Residential loans-sold 95,136 120,099 138,337 161,628 162,468 353,572 347,792 Residential pipeline-portfolio at period end 35,387 54,132 72,448 25,083 33,374 35,387 33,374 Residential loans-retained2 250,820 118,126 46,620 54,464 25,404 415,566 74,719 Consumer pipeline at period end 30,980 31,748 28,127 18,207 17,094 30,980 17,094 Consumer originations 66,400 63,702 46,745 47,529 62,293 176,847 171,765 PPP originations — 23,529 232,478 — 8,276 256,007 598,994 Total Pipelines at Period End $ 478,121 $ 468,479 $ 433,587 $ 302,042 $ 456,555 $ 478,121 $ 456,555 Total Originations $ 743,974 $ 518,484 $ 668,433 $ 541,010 $ 346,686 $ 1,930,891 $ 1,571,702 1Includes purchases of $17.1 million in 3Q’21 2Includes purchases of $180.8 million in 3Q'21 and $38.4 million in 2Q’21 Loan Production and Pipeline Trend
24 THIRD QUARTER 2021 EARNINGS PRESENTATION Expanding Seacoast’s Commercial Banking Presence Across Florida Investing in growth and transforming the experience for our bankers and customers Austen Carroll joins as Chief Lending Officer, previously Chief Banking Officer at Ameris Dan Hilken joins as Central FL Regional Market President with a 30 year career, most recently with Wells Fargo Ron York joins as Treasury Management Executive, previously with First Horizon Pam Notarantonio joins as Central FL Regional Credit Officer after 32 years with Wells Fargo Chris Rolle joins as West FL Regional Market President, formerly Director of Middle Market Banking at Synovus and Central FL Market President at BB&T 3Q 2021 James Norton joins as CRE Director, formerly Executive Director of Real Estate Banking at JPMorgan Chase 2Q 2021 Robert Hursh joins as Pinellas County (St. Pete) Market President, continuing a log career in market, formerly with Synovus and Regions 3Q 2020 4Q 2020 Brannon Fitch, formerly of BB&T, joins as Northeast FL Market President leading strategic geographic expansion Tim McLean joins as SVP Commercial Real Estate in Naples, formerly with BB&T 1Q 2021
25 THIRD QUARTER 2021 EARNINGS PRESENTATION Legacy Bank of Florida Acquisition Fair Value of Assets and Liabilities Acquired (Preliminary) (In thousands) August 6, 2021 Assets: Cash $ 98,101 Debt securities 992 Loans by segment: Construction and land development 36,651 Commercial real estate - owner-occupied 35,363 Commercial real estate - non owner-occupied 237,091 Residential Real Estate 70,541 Commercial and financial 58,324 Consumer 647 PPP loans 38,598 Total Loans 477,215 Fixed assets 2,577 Core deposit intangibles 3,454 Goodwill 30,978 Other assets 15,532 Totals $ 628,849 Liabilities: Deposits 494,921 Other liabilities 42,705 Totals $ 537,626 Loan Portfolio Valuation and CECL Impact Loans acquired of $477.2 million includes: • $5.3 million purchase discount on $381.3 million in non-PCD loans, to be accreted through yield over the life of the loans. • $3.8 million purchase discount on $66.4 million in PCD loans, of which $3.0 million is recorded as an allowance and $0.8 million will be accreted through yield over the life of the loans. • $38.6 million in PPP loans $11.2 million in allowance, or 2.3% of the acquired loan balance, recorded on day one: • $8.2 million on non-PCD loans recorded as provision expense through the income statement • $3.0 million on PCD loans recorded as an increase to the loans’ amortized cost basis. PCD Loan Identification Loans acquired were identified as PCD based on: • History of past due payments • Rating below "pass" • FICO < 640 • Also considered industries highly affected by COVID-19
26 THIRD QUARTER 2021 EARNINGS PRESENTATION Sabal Palm Bancorp, Inc. Transaction Summary Transaction Value • $53.9 million fully diluted, $6.96 per Sabal Palm Bancorp, Inc. common share1 Consideration • Shareholders will receive 0.2203 shares of Seacoast common stock • Options are rolled over into Seacoast options based on the positive difference between $6.96 and the exercise price Closing • Expected in first quarter of 2022 Required Approvals • Regulatory authorities • Sabal Palm shareholders Additional Details and Assumptions • Sabal Palm shareholders to own approximately 2.6% of Seacoast following the Sabal Palm Bancorp, Inc. and Business Bank of Florida Corporation transactions • Approximately 40% cost savings (58% realized in 2022 and 100% in 2023 and thereafter) • Estimated core deposit intangibles of 0.75% amortized using straight-line method over 6 years • 2.08% / $5.7 million total pre-tax mark to Sabal Palm’s loan book; includes (0.75%) interest rate mark, 1.33% credit discount mark relating to the non-PCD loans, and 1.50% CECL-related ALLL 1Based on Seacoast’s closing price of $31.58 as of August 20, 2021
27 THIRD QUARTER 2021 EARNINGS PRESENTATION Business Bank of Florida, Corp. Transaction Summary Transaction Value • $28.4 million fully diluted, $25.25 per Business Bank of Florida common share1 Consideration • Shareholders will receive 0.7997 shares of Seacoast common stock • Options are rolled over into Seacoast options based on the positive difference between $25.25 and the exercise price Closing • Expected in first quarter of 2022 Required Approvals • Regulatory authorities • Business Bank of Florida shareholders Additional Details and Assumptions • Business Bank of Florida shareholders to own approximately 1.5% of Seacoast following the Sabal Palm Bancorp, Inc. and Business Bank of Florida Corporation transactions • Approximately 50% cost savings (75% realized in 2022 and 100% in 2023 and thereafter). Seacoast branch located less than ½ mile will be consolidated • Estimated core deposit intangibles of 0.75% amortized using straight-line method over 6 years • 2.84% / $3.8 million total pre-tax mark to Business Bank of Florida’s loan book; includes (0.75%) interest rate mark, 1.71% credit discount mark relating to the non-PCD loans, and 1.87% CECL-related ALLL 1Based on Seacoast’s closing price of $31.58 as of August 20, 2021
28 THIRD QUARTER 2021 EARNINGS PRESENTATION Seacoast’s Integrated Delivery Model Supports Our Growth Strategy 59% % of consumer deposits completed outside of the branch 11% % increase in consumer online users $741MM PPP loan forgiveness to date supported by fully digital platform 27K Number of outreach calls triggered by Seacoast's proprietary Connections platform 24% % Residential sales originated from alternative delivery channels 46% % of business deposits completed outside of the branch Strong momentum in usage of digital tools and other non-branch delivery channels, and tools to equip our teams to outperform 8% % increase in business online users Open - Digital numbers to be provided. All metrics compare 3Q’21 to 3Q’20
29 THIRD QUARTER 2021 EARNINGS PRESENTATION Explanation of Certain Unaudited Non-GAAP Financial Measures This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). The financial highlights provide reconciliations between GAAP and adjusted financial measures including net income, noninterest income, noninterest expense, tax adjustments and other financial ratios. Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’ understanding of the Company’s business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might define or calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.
30 THIRD QUARTER 2021 EARNINGS PRESENTATION GAAP to Non-GAAP Reconciliation Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'21 2Q'21 1Q'21 4Q'20 3Q'20 3Q'21 3Q'20 Net Income $ 22,944 $ 31,410 $ 33,719 $ 29,347 $ 22,628 $ 88,073 $ 48,417 Total noninterest income 19,028 15,322 17,671 14,930 16,946 52,021 46,640 Securities losses/(gains), net 30 55 114 18 (4) 199 (1,253) Total Adjustments to Noninterest Income 30 55 114 18 (4) 199 (1,253) Total Adjusted Noninterest Income 19,058 15,377 17,785 14,948 16,942 52,220 45,387 Total noninterest expense 55,268 45,784 46,120 43,681 51,674 147,172 141,871 Merger related charges (6,281) (509) (581) — (4,281) (7,371) (9,074) Amortization of intangibles (1,306) (1,212) (1,211) (1,421) (1,497) (3,729) (4,436) Business continuity expenses — — — — — — (307) Branch reductions and other expense initiatives (870) (663) (449) (354) (464) (1,982) (464) Total Adjustments to Noninterest Expense (8,457) (2,384) (2,241) (1,775) (6,242) (13,082) (14,281) Total Adjusted Noninterest Expense 46,811 43,400 43,879 41,906 45,432 134,090 127,590 Income Taxes 7,049 8,785 10,157 8,793 6,992 25,991 14,025 Tax effect of adjustments 2,081 598 577 440 1,530 3,256 3,195 Total Adjustments to Income Taxes 2,081 598 577 440 1,530 3,256 3,195 Adjusted Income Taxes 9,130 9,383 10,734 9,233 8,522 29,247 17,220 Adjusted Net Income $ 29,350 $ 33,251 $ 35,497 $ 30,700 $ 27,336 $ 98,098 $ 58,250 Earnings per diluted share, as reported $ 0.40 $ 0.56 $ 0.60 $ 0.53 $ 0.42 $ 1.56 $ 0.91 Adjusted Earnings per Diluted Share 0.51 0.59 0.63 0.55 0.50 1.74 1.09 Average diluted shares outstanding 57,645 55,901 55,992 55,739 54,301 56,441 53,325
31 THIRD QUARTER 2021 EARNINGS PRESENTATION GAAP to Non-GAAP Reconciliation Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'21 2Q'21 1Q'21 4Q'20 3Q'20 3Q'21 3Q'20 Adjusted Noninterest Expense $ 46,811 $ 43,400 $ 43,879 $ 41,906 $ 45,432 $ 134,090 $ 127,590 Foreclosed property expense and net (loss)/gain on sale (66) 90 65 (1,821) (512) 89 (442) Provision for unfunded commitments (133) — — 795 (756) (133) (980) Net Adjusted Noninterest Expense $ 46,612 $ 43,490 $ 43,944 $ 40,880 $ 44,164 $ 134,046 $ 126,168 Revenue $ 90,352 $ 81,124 $ 84,281 $ 83,721 $ 80,449 $ 255,757 $ 240,592 Total Adjustments to Revenue 30 55 114 18 (4) 199 (1,253) Impact of FTE adjustment 131 131 131 112 118 393 348 Adjusted Revenue on a Fully Taxable Equivalent Basis $ 90,513 $ 81,310 $ 84,526 $ 83,851 $ 80,563 $ 256,349 $ 239,687 Adjusted Efficiency Ratio 51.50 % 53.49 % 51.99 % 48.75 % 54.82 % 52.29 % 52.64 % Net Interest Income $ 71,324 $ 65,802 $ 66,610 $ 68,791 $ 63,503 $ 203,736 $ 193,952 Impact of FTE adjustment 131 131 131 112 118 393 348 Net Interest Income including FTE adjustment $ 71,455 $ 65,933 $ 66,741 $ 68,903 $ 63,621 $ 204,129 $ 194,300 Total noninterest income 19,028 15,322 17,671 14,930 16,946 52,021 46,640 Total noninterest expense 55,268 45,784 46,120 43,681 51,674 147,172 141,871 Pre-Tax Pre-Provision Earnings $ 35,215 $ 35,471 $ 38,292 $ 40,152 $ 28,893 $ 108,978 $ 99,069 Total Adjustments to Noninterest Income 30 55 114 18 (4) 199 (1,253) Total Adjustments to Noninterest Expense (8,656) (2,294) (2,176) (2,801) (7,510) (13,126) (15,703) Adjusted Pre-Tax Pre-Provision Earnings $ 43,901 $ 37,820 $ 40,582 $ 42,971 $ 36,399 $ 122,303 $ 113,519 Average Assets $ 9,753,734 $ 9,025,846 $ 8,485,354 $ 8,376,396 $ 8,086,890 $ 9,092,958 $ 7,686,611 Less average goodwill and intangible assets (254,980) (235,964) (237,323) (238,631) (228,801) (242,820) (228,795) Average Tangible Assets $ 9,498,754 $ 8,789,882 $ 8,248,031 $ 8,137,765 $ 7,858,089 $ 8,850,138 $ 7,457,816 Return on Average Assets (ROA) 0.93 % 1.40 % 1.61 % 1.39 % 1.11 % 1.29 % 0.84 % Impact of removing average intangible assets and related amortization 0.07 0.08 0.09 0.10 0.09 0.08 0.09
32 THIRD QUARTER 2021 EARNINGS PRESENTATION GAAP to Non-GAAP Reconciliation Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'21 2Q'21 1Q'21 4Q'20 3Q'20 3Q'21 3Q'20 Return on Average Tangible Assets (ROTA) 1.00 1.48 1.70 1.49 1.20 1.37 0.93 Impact of other adjustments for Adjusted Net Income 0.23 0.04 0.05 0.01 0.18 0.11 0.11 Adjusted Return on Average Tangible Assets 1.23 1.52 1.75 1.50 1.38 1.48 1.04 Average Shareholders' Equity $ 1,248,547 $ 1,170,395 $ 1,136,416 $ 1,111,073 $ 1,061,807 $ 1,185,530 $ 1,023,107 Less average goodwill and intangible assets (254,980) (235,964) (237,323) (238,631) (228,801) (242,820) (228,795) Average Tangible Equity $ 993,567 $ 934,431 $ 899,093 $ 872,442 $ 833,006 $ 942,710 $ 794,312 Return on Average Shareholders' Equity 7.29 % 10.76 % 12.03 % 10.51 % 8.48 % 9.93 % 6.32 % Impact of removing average intangible assets and related amortization 2.27 3.12 3.59 3.36 2.87 2.96 2.39 Return on Average Tangible Common Equity (ROTCE) 9.56 13.88 15.62 13.87 11.35 12.89 8.71 Impact of other adjustments for Adjusted Net Income 2.16 0.39 0.39 0.13 1.71 1.02 1.09 Adjusted Return on Average Tangible Common Equity 11.72 14.27 16.01 14.00 13.06 13.91 9.80 Loan Interest Income1 $ 64,517 $ 60,440 $ 62,390 $ 65,684 $ 60,573 $ 187,347 $ 189,026 Accretion on acquired loans (3,483) (2,886) (2,868) (4,448) (3,254) (9,237) (10,529) Interest and fees on PPP loans (5,917) (5,127) (6,886) (5,187) (1,719) (17,930) (6,787) Loan interest income excluding PPP and accretion on acquired loans $ 55,117 $ 52,427 $ 52,636 $ 56,049 $ 55,600 $ 160,180 $ 171,710 Yield on Loans1 4.49 % 4.33 % 4.39 % 4.42 % 4.11 % 4.40 % 4.51 % Impact of accretion on acquired loans (0.24) (0.21) (0.20) (0.30) (0.22) (0.21) (0.25) Impact of PPP loans (0.22) 0.01 (0.04) 0.11 0.33 (0.09) 0.11 Yield on loans excluding PPP and accretion on acquired loans 4.03 % 4.13 % 4.15 % 4.23 % 4.22 % 4.10 % 4.37 % 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost.
33 THIRD QUARTER 2021 EARNINGS PRESENTATION Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'21 2Q'21 1Q'21 4Q'20 3Q'20 3Q'21 3Q'20 Net Interest income1 $ 71,455 $ 65,933 $ 66,741 $ 68,903 $ 63,621 $ 204,129 $ 194,300 Accretion on acquired loans (3,483) (2,886) (2,868) (4,448) (3,254) (9,237) (10,529) Interest and fees on PPP loans (5,917) (5,127) (6,886) (5,187) (1,719) (17,930) (6,787) Net interest income excluding PPP and accretion on acquired loans $ 62,055 $ 57,920 $ 56,987 $ 59,268 $ 58,648 $ 176,962 $ 176,984 Net Interest Margin1 3.22 % 3.23 % 3.51 % 3.59 % 3.40 % 3.32 % 3.67 % Impact of accretion on acquired loans (0.15) (0.14) (0.15) (0.23) (0.17) (0.15) (0.20) Impact of PPP loans (0.18) (0.06) (0.11) 0.01 0.19 (0.12) 0.04 Net interest margin excluding PPP and accretion on acquired loans 2.89 % 3.03 % 3.25 % 3.37 % 3.42 % 3.05 % 3.51 % Security Interest Income1 $ 7,956 $ 6,745 $ 6,485 $ 6,586 $ 7,129 $ 21,186 $ 23,702 Tax equivalent adjustment on securities (38) (39) (39) (23) (32) (116) (93) Security interest income excluding tax equivalent adjustment $ 7,918 $ 6,706 $ 6,446 $ 6,563 $ 7,097 $ 21,070 $ 23,609 Loan Interest Income1 $ 64,517 $ 60,440 $ 62,390 $ 65,684 $ 60,573 $ 187,347 $ 189,026 Tax equivalent adjustment on loans (93) (92) (92) (89) (86) (277) (255) Loan interest income excluding tax equivalent adjustment $ 64,424 $ 60,348 $ 62,298 $ 65,595 $ 60,487 $ 187,070 $ 188,771 Net Interest Income1 $ 71,455 $ 65,933 $ 66,741 $ 68,903 $ 63,621 $ 204,129 $ 194,300 Tax equivalent adjustment on securities (38) (39) (39) (23) (32) (116) (93) Tax equivalent adjustment on loans (93) (92) (92) (89) (86) (277) (255) Net interest income excluding tax equivalent adjustment $ 71,324 $ 65,802 $ 66,610 $ 68,791 $ 63,503 $ 203,736 $ 193,952 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. GAAP to Non-GAAP Reconciliation