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 27, 2022
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 27, 2022, Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the quarter ended September 30, 2022. A copy of the press release announcing Seacoast’s results for the quarter ended September 30, 2022 is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
On October 28, 2022, Seacoast will hold an investor conference call to discuss its financial results for the quarter ended September 30, 2022. 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, 2022, 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 datedOctober27, 2022, with respect to Seacoast's financial results for the quarter endedSeptember30, 2022 |
| 99.2 | Data on website containing information used in the conference call to be held onOctober28, 2022 |
| 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 Apollo Bancshares, Inc., Drummond Banking Company and Professional Holding Corp., 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 risk of economic recession; the adverse impact of COVID-19 (economic and otherwise) on the Company and its customers, counterparties, employees, and third-party service providers, and the adverse impacts to our business, financial position, results of operations and prospects; 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; 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 including as a result of the financial impact of COVID-19; changes in retail distribution strategies, customer preferences and behavior (including as a result of economic factors); 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 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, as well as the effect of a fall in stock market prices on our fee income from our brokerage and wealth management businesses; 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, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies; 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, including the impact of supply chain disruptions; reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy; the effects of war or other conflicts, including the impacts related to or resulting from Russia’s military action in Ukraine, 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 Paycheck Protection Program (“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 credit losses.
The risks relating to the mergers with Apollo Bancshares, Inc., Drummond Banking Company and Professional Holding Corp. includes, without limitation: the diversion of management's time on issues related to the mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that 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 expectations; the risks of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets.
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, 2021 and quarterly reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 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.
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 27, 2022 | /s/ Tracey L. Dexter |
|---|---|
| TRACEY L. DEXTER | |
| Chief Financial Officer |
q32022earningsrelease.htm
SEACOAST REPORTS THIRD QUARTER 2022 RESULTS
Significant Expansion in Net Interest Margin and Net Interest Income Highlight Q3 Results
Well-Positioned Balance Sheet with Strong Capital and Liquidity
STUART, Fla., October 27, 2022 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") (NASDAQ: SBCF) today reported net income in the third quarter of 2022 of $29.2 million, or $0.47 per diluted share. Third quarter 2022 net income decreased 11% compared to the second quarter of 2022 due to higher provision for credit losses resulting from changes in economic forecast factors, and additional coverage for estimated economic impacts from Hurricane Ian. Third quarter 2022 net income increased 27% compared to the third quarter of 2021. Adjusted net income1 for the third quarter of 2022 was $32.8 million, or $0.53 per diluted share. Third quarter 2022 adjusted net income1 decreased 10% compared to the second quarter of 2022 due to a higher provision for credit losses. Third quarter 2022 adjusted net income1 increased 12% compared to the third quarter of 2021. Pre-tax pre-provision earnings1 were $43.1 million in the third quarter of 2022, an increase of 1% compared to the second quarter of 2022 and 23% compared to the third quarter of 2021. Adjusted pre-tax pre-provision earnings1 were $49.0 million in the third quarter of 2022, an increase of 6% compared to the second quarter of 2022 and 12% compared to the third quarter of 2021.
At September 30, 2022, the ratio of tangible common equity to tangible assets increased to 9.79%, and tangible book value per share was $15.98. A decline in the value of the available for sale securities portfolio, driven by rising interest rates during the first three quarters of 2022, negatively impacted the ratio of tangible common equity to tangible assets by 159 basis points and negatively impacted tangible book value per share by $2.93 compared to December 31, 2021.
For the third quarter of 2022, return on average tangible assets was 1.17%, return on average tangible shareholders' equity was 11.53%, and the efficiency ratio was 57.13%, compared to 1.29%, 13.01%, and 56.22%, respectively, in the prior quarter, and 1.00%, 9.56%, and 59.55%, respectively, in the prior year quarter. Adjusted return on average tangible assets1 in the third quarter of 2022 was 1.27%, adjusted return on average tangible shareholders' equity1 was 12.48%, and the adjusted efficiency ratio1 was 53.28%, compared to 1.38%, 13.97%, and 53.15%, respectively, in the prior quarter, and 1.23%, 11.72%, and 51.50%, respectively, in the prior year quarter.
Charles M. Shaffer, Seacoast's Chairman and CEO, said, "Seacoast’s team delivered another solid quarter, highlighted by a significant increase in the net interest margin and net interest income, disciplined growth in loan outstandings, and continued strong asset quality metrics. In addition, quarter over quarter, adjusted pre-tax pre-provision earnings of $49.0 million improved 6%, driven by a material increase in net interest income."
Shaffer added, "We continue to operate the company with a robust balance sheet, fortified by a tangible common equity ratio of 9.79%, which increased over the prior quarter despite rising interest rates that impacted accumulated comprehensive income. We saw continued improvements in already strong credit quality metrics, and the allowance for credit losses totals $95.3 million, with an additional $19.1 million in purchase discount on acquired loans. This provides meaningful loss absorption capacity which, when aggregated, represents 1.71% of loans outstanding. Seacoast’s balance sheet is supported by one of the best customer franchises in the industry, delivering low-cost funding and liquidity. We closed the quarter with a loan to deposit ratio of 76% which, looking forward, allows remix of the balance sheet to higher-yielding earning assets to support continued growth in net interest income."
Shaffer concluded, "I would like to thank all Seacoast associates for focusing on quickly recovering from Hurricane Ian and assisting our customers after the storm passed. All Seacoast branch offices were open within a few days, and the team rapidly pivoted and completed the Apollo and Drummond acquisitions. The team showed remarkable commitment and resilience in the face of a significant weather event, and I am very proud of all involved."
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
Acquisitions Update
Seacoast’s balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit shareholders and expand the franchise across Florida.
On October 7, 2022, the Company completed the previously announced acquisition of Apollo Bancshares, Inc. (“Apollo”), which added approximately $718 million in loans and $857 million in deposits, and will provide expansion into Miami-Dade county, one of the fastest growing and most dynamic markets in the United States. System conversion activities were completed immediately after the closing of the transaction.
Also on October 7, 2022, the Company completed the previously announced acquisition of Drummond Banking Company (“Drummond”), providing Seacoast with an entry point into Gainesville, Ocala, and surrounding markets adding low-cost core deposits and diversified business lines. At the closing date, Drummond had approximately $590 million in loans and $882 million in deposits, providing a strong core deposit base, which highlights depository relationships that will provide a stable funding source for future loan growth and higher margins in a rising rate environment. Full integration and system conversion activities are expected to be completed in the first quarter of 2023.
On August 8, 2022, the Company announced its proposed acquisition of Professional Holding Corp. (“Professional”) (NASDAQ: PFHD), the sixth largest bank headquartered in South Florida. The transaction, which is expected to close in the first quarter of 2023, will increase market share in Miami-Dade, Broward, and Palm Beach counties. Full integration and system conversion activities are expected to be completed late in the second quarter of 2023.
In the first quarter of 2022, Seacoast completed the acquisitions of Sabal Palm Bancorp, Inc. (“Sabal Palm”) in Sarasota and Business Bank of Florida Corp. (“BBFC”) in Brevard County, which collectively added a combined $368 million in loans and $562 million in deposits. Integration activities, including system conversion, were completed in the first quarter of 2022 for BBFC and in the second quarter of 2022 for Sabal Palm.
Update on Hurricane Ian
In late September, communities across our corporate footprint were impacted by Hurricane Ian. We maintained uninterrupted digital and telephone access for our customers and, having experienced minimal impacts to our branch properties, we fully reopened to serve our communities shortly after the storm had passed. Recovery efforts in many areas continue and the full impacts on people and businesses in the most hard-hit regions are not fully known. In light of these uncertainties, the Company added $2.1 million to the provision for credit losses.
Financial Results
Income Statement
•Net income was $29.2 million, or $0.47 per diluted share, for the third quarter of 2022 compared to net income of $32.8 million, or $0.53 per diluted share, for the prior quarter, and $22.9 million, or $0.40 per diluted share, for the prior year quarter. For the nine months ended September 30, 2022, net income was $82.6 million, or $1.33 per diluted share, compared to $88.1 million, or $1.56 per diluted share, for the nine months ended September 30, 2021. The current year-to-date results included $12.1 million in provision for credit losses, including $5.1 million in the first quarter of 2022 recorded for loans acquired in the Sabal Palm and BBFC transactions, and additional coverage for potential impacts from Hurricane Ian. Prior year-to-date results included the reversal of provision for credit losses of $5.5 million, reflecting improvement at the time in post-COVID economic indicators. Adjusted net income1 for the third quarter of 2022 was $32.8 million, or $0.53 per diluted share. This compares to $36.3 million, or $0.59 per diluted share, for the prior quarter, and $29.4 million, or $0.51 per diluted share, for the prior year quarter. For the nine months ended September 30, 2022, adjusted net income1 was $96.2 million, or $1.56 per diluted share, compared to $98.1 million, or $1.74 per diluted share, for the nine months ended September 30, 2021.
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
•Net revenues were $104.4 million in the third quarter of 2022, an increase of $5.8 million, or 6%, compared to the prior quarter, and an increase of $14.0 million, or 16%, compared to the prior year quarter. For the nine months ended September 30, 2022, net revenues were $294.9 million, an increase of $39.1 million, or 15%, compared to the nine months ended September 30, 2021. Adjusted revenues1 were $104.7 million in the third quarter of 2022, an increase of $5.8 million, or 6%, compared to the prior quarter, and an increase of $14.4 million, or 16%, compared to the prior year quarter. For the nine months ended September 30, 2022, adjusted revenues1 were $296.0 million, an increase of $40.1 million, or 16%, compared to the nine months ended September 30, 2021.
•On an adjusted basis, pre-tax pre-provision earnings1 were $49.0 million, an increase of 6% compared to the second quarter of 2022 and an increase of 12% compared to the third quarter of 2021.
•Net interest income totaled $88.3 million in the third quarter of 2022, an increase of $6.6 million, or 8%, from the second quarter of 2022 and an increase of $17.0 million, or 24%, compared to the third quarter of 2021. For the nine months ended September 30, 2022, net interest income was $246.5 million, an increase of $42.7 million, or 21%, compared to the nine months ended September 30, 2021.
•Net interest margin increased 29 basis points to 3.67% in the third quarter of 2022 compared to 3.38% in the second quarter of 2022. Excluding the effects of PPP and accretion on acquired loans, net interest margin increased 33 basis points to 3.57% in the third quarter of 2022 from 3.24% in the second quarter of 2022. Securities yields increased 38 basis points to 2.36%, and loan yields increased 16 basis points to 4.45%. The effect on net interest margin of accretion of purchase discounts on acquired loans in the third quarter of 2022 was nine basis points. The cost of deposits increased three basis points to nine basis points for the third quarter of 2022 compared to six basis points in the prior quarter.
•Noninterest income totaled $16.1 million in the third quarter of 2022, a decrease of $0.9 million, or 5%, compared to the prior quarter, and a decrease of $2.9 million, or 15%, compared to the prior year quarter. For the nine months ended September 30, 2022, noninterest income was $48.4 million, a decrease of $3.6 million, or 7%, compared to the nine months ended September 30, 2021. Results for the third quarter of 2022 included the following:
•Service charges on deposits, which increased $0.1 million compared to the prior quarter and $1.0 million year over year, continue to benefit from growth in commercial deposit relationships.
•Despite the impact of market declines, the wealth management division has demonstrated continued success in building relationships, and during the third quarter of 2022, we transitioned $100.0 million in customer deposit outstandings to assets under management in our wealth division.
•Mortgage banking fees continue to be impacted by the overall slowdown attributed to significant increases in mortgage rates and low inventory levels, declining $0.5 million compared to the prior quarter.
•Other income increased by $0.2 million in the third quarter of 2022, compared to the prior quarter, with increases in SBIC investment income offset by lower loan-swap related income.
•The Company recognized $0.4 million in securities losses in the third quarter of 2022, compared to $0.3 million in the second quarter of 2022 and nominal losses in the third quarter of 2021. Losses in each period represent mark to market adjustment on the Company’s CRA-qualified mutual fund.
•The provision for credit losses was $4.7 million in the third quarter of 2022, compared to $0.8 million in the prior quarter. The increase reflects loan growth, along with changes in economic forecast factors, and losses that may result from the impact of Hurricane Ian on our borrowers.
•Noninterest expense was $61.4 million in the third quarter of 2022, an increase of $5.2 million, or 9%, compared to the prior quarter, and an increase of $6.1 million, or 11%, compared to the prior year quarter. Of the increase, $2.6 million was unique to the quarter, including the provision for unfunded commitments, recruiting, and project-related expenses that are not expected to recur. Noninterest expense was $176.4 million for the nine months ended September 30, 2022, compared to $147.2 million in the nine months ended September 30, 2021. Changes from the second quarter of 2022 included the following:
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
•Salaries and wages increased $0.4 million to $28.4 million in the third quarter of 2022. During the third quarter the Company had the opportunity to invest in a team of well-seasoned C&I focused commercial bankers, treasury officers, and credit officers in North Florida, complementing our acquisition of Drummond and further expanding our reach in Ocala and Gainesville. Additionally, we expanded our commercial banking team in West and Central Florida, adding a significant number of bankers in these markets. Lastly, we hired numerous support and treasury roles supporting the Company’s successful strategy of banking middle market operating companies.
•Outsourced data processing costs decreased by $0.7 million in the third quarter of 2022, primarily attributed to merger related conversion costs incurred in the second quarter of 2022.
•Occupancy costs increased quarter over quarter as a result of the Company acquiring two branch properties that it had previously leased. The resulting write-offs of lease assets of $0.9 million impacted occupancy expense during the quarter, with ongoing expected annual savings of $0.3 million in net occupancy expense on these branches.
•Legal and professional fees increased by $0.8 million to $3.8 million in the third quarter of 2022, reflecting higher merger-related expenses and professional fees on a project that was completed.
•The prior quarter included a $1.0 million gain on sale of an OREO property. No OREO sale activity occurred in the third quarter.
•Other expenses increased by $2.2 million, primarily reflecting higher merger-related expenses and higher recruiting costs.
•A $1.0 million provision for credit losses on unfunded commitments reflects modeled results of changes in economic factors.
•Seacoast recorded $9.1 million of income tax expense in the third quarter of 2022, compared to $8.9 million in the second quarter of 2022 and $7.0 million in the third quarter of 2021. The second quarter of 2022 included a $1.0 million refund of Florida corporate income tax paid in prior periods. Tax benefits related to stock-based compensation totaled $0.2 million in the third quarter of 2022, $0.4 million in the second quarter of 2022, and $0.3 million in the third quarter of 2021.
•The ratio of net adjusted noninterest expense1 to average tangible assets was 2.16% in the third quarter of 2022, compared to 2.00% in the second quarter of 2022 and 1.95% in the third quarter of 2021. The increase in the ratio was primarily driven by a decline in total assets from the prior quarter.
•The efficiency ratio was 57.13% in the third quarter of 2022, compared to 56.22% in the second quarter of 2022 and 59.55% in the prior year quarter. The adjusted efficiency ratio1 was 53.28% in the third quarter of 2022, compared to 53.15% in the second quarter of 2022 and 51.50% in the prior year quarter. The Company continues to remain keenly focused on disciplined expense control.
Balance Sheet
•At September 30, 2022, the Company had total assets of $10.3 billion and total shareholders' equity of $1.3 billion. Book value per share was $20.95 on September 30, 2022, compared to $21.65 on June 30, 2022, and $22.12 on September 30, 2021. Tangible book value per share totaled $15.98 on September 30, 2022 compared to $16.66 on June 30, 2022 and $17.52 on September 30, 2021. A continued decline in the value of the available for sale securities portfolio driven by rising interest rates negatively impacted tangible book value per share by $2.93 when compared to December 31, 2021.
•Debt securities totaled $2.6 billion on September 30, 2022, an increase of $39.9 million, or 2%, compared to June 30, 2022. Purchases during the third quarter of 2022 totaled $199.6 million, consisting primarily of agency-issued securities at an average yield of 3.81%. The Company continues to take a prudent and disciplined approach to reinvest its excess liquidity.
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
•Loans totaled $6.7 billion on September 30, 2022, an increase of $149.3 million compared to June 30, 2022. Excluding PPP, loans outstanding grew 10% on an annualized basis. The Company continues to exercise a disciplined approach to loan growth, carefully underwriting loans to strict underwriting guidelines.
•Loan originations were $554.7 million in the third quarter of 2022, a decrease of 24% compared to $734.0 million in the second quarter of 2022. The weighted average add-on rate for loan outstandings increased to 5.50% by the end of the third quarter.
•Commercial originations were $340.4 million during the third quarter of 2022, compared to $461.9 million in the second quarter of 2022, and $331.6 million in the third quarter of 2021.
•Consumer originations in the third quarter of 2022 were $128.6 million, compared to $126.5 million in the second quarter of 2022 and $66.4 million in the third quarter of 2021. The increase from the prior year is primarily the result of consumer lending teams that joined the Company in late 2021.
•Residential loans originated for sale in the secondary market totaled $16.4 million in the third quarter of 2022, compared to $42.7 million in the second quarter of 2022 and $95.1 million in the third quarter of 2021.
•Closed residential loans retained in the portfolio totaled $69.3 million in the third quarter of 2022, compared to $103.0 million in the second quarter of 2022, and $250.8 million in the third quarter of 2021.
•Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $641.4 million on September 30, 2022, an increase of 3% from June 30, 2022 and an increase of 34% from September 30, 2021.
•Commercial pipelines were $530.4 million as of September 30, 2022, an increase of 11% from $476.7 million at June 30, 2022, and an increase of 44% from $368.9 million at September 30, 2021. The Company continues to focus on generating disciplined growth in full relationships, including credit facilities, deposit relationships, and wealth opportunities.
•Consumer pipelines were $43.7 million as of September 30, 2022, a decrease of 42% from $75.5 million at June 30, 2022, and an increase of 41% from $31.0 million at September 30, 2021. The decline in the consumer pipeline is the result of higher rates slowing consumer loan demand.
•Residential saleable pipelines were $6.6 million as of September 30, 2022, compared to $14.7 million at June 30, 2022, and $42.8 million at September 30, 2021. Retained residential pipelines were $60.7 million as of September 30, 2022, compared to $53.1 million at June 30, 2022, and $35.4 million at September 30, 2021.
•Total deposits were $8.8 billion as of September 30, 2022, a decrease of $423.5 million, or 5%, compared to June 30, 2022, and an increase of $431.2 million, or 5%, compared to September 30, 2021. The decline in deposits from the prior quarter included $100 million in transfers to wealth AUM, a $110 million decline in public funds moving to the state’s investment program, a $41 million decline in time deposits, and a $25 million decline in brokered deposits. The Company has continued to manage deposit pricing lower than competitors, and with an average loan-to-deposit ratio of 74% during the quarter, has maintained balance sheet flexibility supporting expansion of the net interest margin.
•At September 30, 2022, the percentage of total transaction account balances to overall deposit funding increased to 65%, which continues to support the Company’s ability to maintain a consistently low cost of deposits.
•Average noninterest demand account balances increased from the second quarter of 2022, overcoming a typical summer seasonal decline.
•The overall cost of deposits increased three basis points from the prior quarter.
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
Asset Quality
•Credit metrics remain strong with charge-offs, non-accruals, and criticized assets at historically low levels. The Company remains diligent in its monitoring of these metrics, as well as changes in the broader economic environment.
•Nonperforming loans decreased by $5.0 million to $21.5 million at September 30, 2022. Nonperforming loans to total loans outstanding were 0.32% at September 30, 2022, 0.40% at June 30, 2022, and 0.55% at September 30, 2021.
•Nonperforming assets to total assets declined to 0.23% at September 30, 2022, compared to 0.27% at June 30, 2022, and 0.47% at September 30, 2021.
•The ratio of allowance for credit losses to total loans was 1.42% at September 30, 2022, 1.39% at June 30, 2022, and 1.49% at September 30, 2021. Excluding PPP loans, the ratio of allowance for credit losses to total loans at September 30, 2022 was 1.43%, compared to 1.39% at June 30, 2022, and 1.54% at September 30, 2021.
•Net charge-offs of $0.1 million for the third quarter of 2022 compared to net recoveries of $0.1 million in the second quarter of 2022 and net charge-offs of $1.4 million in the third quarter of 2021. Net charge-offs for the four most recent quarters averaged 0.01%.
•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. Seacoast's average commercial loan size is $589 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 30% and 191% of total bank-level risk-based capital, respectively, compared to 29% and 192% respectively, at June 30, 2022. On a consolidated basis, construction and land development and commercial real estate loans represent 28% and 175%, respectively, of total consolidated risk-based capital.
Capital and Liquidity
•The Company continues to operate with a fortress balance sheet, with a tier 1 capital ratio at September 30, 2022, of 16.5% compared to 16.8% at June 30, 2022, and 17.7% at September 30, 2021. The total capital ratio was 17.5% and the tier 1 leverage ratio was 12.1% at September 30, 2022.
•Cash and cash equivalents at September 30, 2022 totaled $218.6 million, with decreases from the prior quarter resulting from loan growth, more modest deployment of liquidity in investments in the securities portfolio, and deposit outflows.
•Tangible common equity to tangible assets was 9.79% at September 30, 2022, compared to 9.74% at June 30, 2022, and 10.62% at September 30, 2021. Declines in the value of available for sale securities due to rising interest rates in 2022 negatively impacted equity year to date by $180.2 million.
•At September 30, 2022, the Company had available unsecured lines of credit of $165.0 million and lines of credit under lendable collateral value of $2.1 billion. Additionally, $2.1 billion of debt securities and $959.3 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'22 | 2Q'22 | 1Q'22 | 4Q'21 | 3Q'21 | |||||||||||
| Selected balance sheet data: | |||||||||||||||
| Total assets | $ | 10,345,235 | $ | 10,811,704 | $ | 10,904,817 | $ | 9,681,433 | $ | 9,893,498 | |||||
| Gross loans | 6,690,845 | 6,541,548 | 6,451,217 | 5,925,029 | 5,905,884 | ||||||||||
| Total deposits | 8,765,414 | 9,188,953 | 9,243,768 | 8,067,589 | 8,334,172 | ||||||||||
| Performance measures: | |||||||||||||||
| Net income | $ | 29,237 | $ | 32,755 | $ | 20,588 | $ | 36,330 | $ | 22,944 | |||||
| Net interest margin | 3.67 | % | 3.38 | % | 3.25 | % | 3.16 | % | 3.22 | % | |||||
| Pre-tax pre-provision earnings1 | 43,143 | 42,580 | 33,095 | 40,855 | 35,215 | ||||||||||
| Average diluted shares outstanding | 61,961 | 61,923 | 61,704 | 59,016 | 57,645 | ||||||||||
| Diluted earnings per share (EPS) | $ | 0.47 | $ | 0.53 | $ | 0.33 | $ | 0.62 | $ | 0.40 | |||||
| Return on (annualized): | |||||||||||||||
| Average assets (ROA) | 1.10 | % | 1.21 | % | 0.79 | % | 1.43 | % | 0.93 | % | |||||
| Average tangible assets (ROTA)2 | 1.17 | 1.29 | 0.85 | 1.51 | 1.00 | ||||||||||
| Average tangible common equity (ROTCE)2 | 11.53 | 13.01 | 8.02 | 14.29 | 9.56 | ||||||||||
| Tangible common equity to tangible assets2 | 9.79 | 9.74 | 9.90 | 11.09 | 10.62 | ||||||||||
| Tangible book value per share2 | $ | 15.98 | $ | 16.66 | $ | 17.12 | $ | 17.84 | $ | 17.52 | |||||
| Efficiency ratio | 57.13 | % | 56.22 | % | 62.33 | % | 53.70 | % | 59.55 | % | |||||
| Adjusted operating measures1: | |||||||||||||||
| Adjusted net income | $ | 32,837 | $ | 36,327 | $ | 27,056 | $ | 36,854 | $ | 29,350 | |||||
| Adjusted pre-tax pre-provision earnings | $ | 48,989 | $ | 46,397 | $ | 41,737 | $ | 42,258 | $ | 43,901 | |||||
| Adjusted diluted EPS | 0.53 | 0.59 | 0.44 | 0.62 | 0.51 | ||||||||||
| Adjusted ROTA2 | 1.27 | % | 1.38 | % | 1.06 | % | 1.49 | % | 1.23 | % | |||||
| Adjusted ROTCE2 | 12.48 | 13.97 | 10.01 | 14.11 | 11.72 | ||||||||||
| Adjusted efficiency ratio | 53.28 | 53.15 | 54.86 | 53.43 | 51.50 | ||||||||||
| Net adjusted noninterest expense as a<br><br>percent of average tangible assets2 | 2.16 | 2.00 | 1.99 | 1.96 | 1.95 | ||||||||||
| Other data: | |||||||||||||||
| Market capitalization3 | $ | 1,858,429 | $ | 2,028,996 | $ | 2,144,586 | $ | 2,070,465 | $ | 1,972,784 | |||||
| Full-time equivalent employees | 1,156 | 1,095 | 1,066 | 989 | 995 | ||||||||||
| Number of ATMs | 79 | 79 | 79 | 75 | 72 | ||||||||||
| Full-service banking offices | 58 | 58 | 58 | 54 | 52 | ||||||||||
| 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 2022 Strategic Highlights
Capitalizing on Seacoast’s Commitment to Digital Transformation
•During the third quarter, Seacoast launched several new digital banking features by building an even more competitive digital experience while positioning the bank to scale across the state. The addition of an online account opening functionality streamlines account opening for customers and enhanced fraud protection tools for both businesses and consumers provides additional safeguards.
•Seacoast’s online banking features are now available in both English and Spanish, supporting customer preferences and enhancing our ability to bring relationship-based banking to markets across the state.
Driving Sustainable Growth and Expanding our Footprint
•As the Company continues its focus on building the leading commercial bank in Florida, Chris Rolle and Brannon Fitch, previously Regional Presidents in West and North Florida, respectively, have taken on new roles as South Group President and North Group President, responsible for leading the commercial banking teams in their respective markets.
•During the quarter, the Company recruited a well-seasoned and successful C&I focused commercial banking team in North Florida, complementing the Drummond acquisition, and expanding its reach into Ocala and Gainesville. The Company also expanded its commercial banking team in West and Central Florida. Additionally, well-seasoned successful treasury talent was added to the franchise in multiple markets, supporting the Company’s successful strategy of banking middle market operating companies.
•The Company completed the acquisition of Apollo Bancshares, Inc. on October 7, 2022, adding meaningful scale in Miami-Dade county and a growth-oriented team with deep local relationships. The technology conversion went extremely well, and the Miami-Dade county team is now fully focused on growing the franchise.
•Also on October 7, 2022, the Company completed the acquisition of Drummond Bancshares, Inc. Drummond is a 32 year-old institution with a seasoned, consistently profitable franchise. Its low-cost core deposits are driven by deep customer loyalty, and the acquisition adds presence in the rapidly growing North Florida market. As of September 30, 2022, Drummond’s demand deposits represented 78% of its total deposits.
•The upcoming acquisition of Professional Holding Corp. expands the Company’s presence in the tri-county South Florida area, with a relationship-driven team focused on local businesses. The acquisition will further enhance Seacoast’s branch network and add scarcity value in a robust banking market.
Scaling and Evolving Our Culture
•Seacoast has been recognized by the Human Rights Foundation for the third consecutive year, earning a perfect score for Workplace Equality in the 2022 Corporate Equality index.
•For the second year in a row, Seacoast is thrilled to be named one of the Orlando Business Journal's 2022 Best Places to Work, which highlights our commitment to employees’ well-being, as well as our numerous diversity and inclusion initiatives.
OTHER INFORMATION
Conference Call Information
Seacoast will host a conference call on October 28, 2022 at 10:00 a.m. (Eastern Time) to discuss the third quarter 2022 earnings results and business trends. Investors may call in (toll-free) by dialing (866) 374-5140 (passcode: 6944 8197#; 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 28, 2022, and can be accessed via a link at www.SeacoastBanking.com under the heading “Corporate Information,” using the passcode EV00136823.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located under the heading “Corporate Information.” Beginning late afternoon on October 28, 2022, 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 (NASDAQ: SBCF) is one of the largest community banks headquartered in Florida with approximately $10.3 billion in assets and $8.8 billion in deposits as of September 30, 2022. Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at over 50 full-service branches across Florida, and through advanced mobile and online banking solutions. Seacoast National Bank is the wholly-owned subsidiary bank of Seacoast Banking Corporation of Florida. For more information about Seacoast, visit 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 Professional Holding Corp. and Professional Bank with and into Seacoast and Seacoast National Bank, respectively. The registration statement in connection with the merger includes a proxy statement of Professional Holding Corp. 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 STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGERS OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors may obtain 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.
Professional Holding Corp. and Professional Bank, their directors, executive officers, 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 National Bank. Information regarding the participants in the proxy solicitation of Professional Holding 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.
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, including Apollo Bancshares, Inc. and Drummond Banking Company, or expects to acquire, including Professional Holding
Corp. 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 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 risk of economic recession; the adverse impact of COVID-19 (economic and otherwise) on the Company and its customers, counterparties, employees, and third-party service providers, and the adverse impacts to our business, financial position, results of operations and prospects; 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; 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 including as a result of the financial impact of COVID-19; changes in retail distribution strategies, customer preferences and behavior (including as a result of economic factors); 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 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, as well as the effect of a fall in stock market prices on our fee income from our brokerage and wealth management businesses; 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, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies; 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, including the impact of supply chain disruptions; reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy; the effects of war or other conflicts, including the impacts related to or resulting from Russia’s military action in Ukraine, 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 Paycheck Protection Program (“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 credit losses.
The risks relating to the mergers with Apollo Bancshares, Inc., Drummond Banking Company and Professional Holding Corp. includes, without limitation: the diversion of management's time on issues related to the mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that 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 expectations; the risks of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets.
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, 2021 and quarterly reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 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.
| 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'22 | 2Q'22 | 1Q'22 | 4Q'21 | 3Q'21 | 3Q'22 | 3Q'21 | ||||||||||||||
| Summary of Earnings | |||||||||||||||||||||
| Net income | $ | 29,237 | $ | 32,755 | $ | 20,588 | $ | 36,330 | $ | 22,944 | $ | 82,580 | $ | 88,073 | |||||||
| Adjusted net income1 | 32,837 | 36,327 | 27,056 | 36,854 | 29,350 | 96,220 | 98,098 | ||||||||||||||
| Net interest income2 | 88,399 | 81,764 | 76,639 | 72,412 | 71,455 | 246,802 | 204,129 | ||||||||||||||
| Net interest margin2,3 | 3.67 | % | 3.38 | % | 3.25 | % | 3.16 | % | 3.22 | % | 3.44 | % | 3.32 | % | |||||||
| Pre-tax pre-provision earnings1 | 43,143 | 42,580 | 33,095 | 40,855 | 35,215 | 118,818 | 108,978 | ||||||||||||||
| Adjusted pre-tax pre-provision earnings1 | 48,989 | 46,397 | 41,737 | 42,258 | 43,901 | 137,123 | 122,303 | ||||||||||||||
| Performance Ratios | |||||||||||||||||||||
| Return on average assets-GAAP basis3 | 1.10 | % | 1.21 | % | 0.79 | % | 1.43 | % | 0.93 | % | 1.03 | % | 1.29 | % | |||||||
| Return on average tangible assets-GAAP basis3,4 | 1.17 | 1.29 | 0.85 | 1.51 | 1.00 | 1.11 | 1.37 | ||||||||||||||
| Adjusted return on average tangible assets1,3,4 | 1.27 | 1.38 | 1.06 | 1.49 | 1.23 | 1.24 | 1.48 | ||||||||||||||
| Net adjusted noninterest expense to average tangible assets1,3,4 | 2.16 | 2.00 | 1.99 | 1.96 | 1.95 | 2.05 | 2.03 | ||||||||||||||
| Return on average shareholders' equity-GAAP basis3 | 8.60 | 9.73 | 5.96 | 11.06 | 7.29 | 8.08 | 9.93 | ||||||||||||||
| Return on average tangible common equity-GAAP basis3,4 | 11.53 | 13.01 | 8.02 | 14.29 | 9.56 | 10.82 | 12.89 | ||||||||||||||
| Adjusted return on average tangible common equity1,3,4 | 12.48 | 13.97 | 10.01 | 14.11 | 11.72 | 12.13 | 13.91 | ||||||||||||||
| Efficiency ratio5 | 57.13 | 56.22 | 62.33 | 53.70 | 59.55 | 58.45 | 55.99 | ||||||||||||||
| Adjusted efficiency ratio1 | 53.28 | 53.15 | 54.86 | 53.43 | 51.50 | 53.73 | 52.29 | ||||||||||||||
| Noninterest income to total revenue (excluding securities gains/losses) | 15.72 | 17.45 | 17.14 | 20.89 | 21.09 | 16.74 | 20.40 | ||||||||||||||
| Tangible common equity to tangible assets4 | 9.79 | 9.74 | 9.89 | 11.09 | 10.62 | 9.79 | 10.62 | ||||||||||||||
| Average loan-to-deposit ratio | 73.90 | 70.60 | 71.25 | 70.29 | 69.97 | 71.92 | 74.86 | ||||||||||||||
| End of period loan-to-deposit ratio | 76.35 | 71.34 | 70.01 | 73.84 | 71.46 | 76.35 | 71.46 | ||||||||||||||
| Per Share Data | |||||||||||||||||||||
| Net income diluted-GAAP basis | $ | 0.47 | $ | 0.53 | $ | 0.33 | $ | 0.62 | $ | 0.40 | $ | 1.33 | $ | 1.56 | |||||||
| Net income basic-GAAP basis | 0.48 | 0.53 | 0.34 | 0.62 | 0.40 | 1.35 | 1.57 | ||||||||||||||
| Adjusted earnings1 | 0.53 | 0.59 | 0.44 | 0.62 | 0.51 | 1.56 | 1.74 | ||||||||||||||
| Book value per share common | 20.95 | 21.65 | 22.15 | 22.40 | 22.12 | 20.95 | 22.12 | ||||||||||||||
| Tangible book value per share | 15.98 | 16.66 | 17.12 | 17.84 | 17.52 | 15.98 | 17.52 | ||||||||||||||
| Cash dividends declared | 0.17 | 0.17 | 0.13 | 0.13 | 0.13 | 0.47 | 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'22 | 2Q'22 | 1Q'22 | 4Q'21 | 3Q'21 | 3Q'22 | 3Q'21 | ||||||||||||||
| Interest on securities: | |||||||||||||||||||||
| Taxable | $ | 15,653 | $ | 12,387 | $ | 10,041 | $ | 8,574 | $ | 7,775 | $ | 38,081 | $ | 20,632 | |||||||
| Nontaxable | 138 | 138 | 140 | 139 | 143 | 416 | 438 | ||||||||||||||
| Fees on PPP loans | 295 | 676 | 1,373 | 3,011 | 5,218 | 2,344 | 14,485 | ||||||||||||||
| Interest on PPP loans | 25 | 65 | 150 | 341 | 699 | 240 | 3,446 | ||||||||||||||
| Interest and fees on loans - excluding PPP loans | 73,650 | 68,566 | 65,595 | 61,049 | 58,507 | 207,811 | 169,139 | ||||||||||||||
| Interest on federal funds sold and other investments | 1,643 | 1,917 | 933 | 828 | 867 | 4,493 | 2,162 | ||||||||||||||
| Total Interest Income | 91,404 | 83,749 | 78,232 | 73,942 | 73,209 | 253,385 | 210,302 | ||||||||||||||
| Interest on deposits | 1,623 | 994 | 767 | 711 | 849 | 3,384 | 2,894 | ||||||||||||||
| Interest on time certificates | 380 | 436 | 468 | 494 | 583 | 1,284 | 2,294 | ||||||||||||||
| Interest on borrowed money | 1,117 | 672 | 475 | 448 | 453 | 2,264 | 1,378 | ||||||||||||||
| Total Interest Expense | 3,120 | 2,102 | 1,710 | 1,653 | 1,885 | 6,932 | 6,566 | ||||||||||||||
| Net Interest Income | 88,284 | 81,647 | 76,522 | 72,289 | 71,324 | 246,453 | 203,736 | ||||||||||||||
| Provision for credit losses | 4,676 | 822 | 6,556 | (3,942) | 5,091 | 12,054 | (5,479) | ||||||||||||||
| Net Interest Income After Provision for Credit Losses | 83,608 | 80,825 | 69,966 | 76,231 | 66,233 | 234,399 | 209,215 | ||||||||||||||
| Noninterest income: | |||||||||||||||||||||
| Service charges on deposit accounts | 3,504 | 3,408 | 2,801 | 2,606 | 2,495 | 9,713 | 7,171 | ||||||||||||||
| Interchange income | 4,138 | 4,255 | 4,128 | 4,135 | 4,131 | 12,521 | 12,096 | ||||||||||||||
| Wealth management income | 2,732 | 2,774 | 2,659 | 2,356 | 2,562 | 8,165 | 7,272 | ||||||||||||||
| Mortgage banking fees | 434 | 932 | 1,686 | 2,030 | 2,550 | 3,052 | 9,752 | ||||||||||||||
| Marine finance fees | 209 | 312 | 191 | 147 | 152 | 712 | 518 | ||||||||||||||
| SBA gains | 108 | 473 | 156 | 200 | 812 | 737 | 1,331 | ||||||||||||||
| BOLI income | 1,363 | 1,349 | 1,334 | 1,295 | 1,128 | 4,046 | 2,859 | ||||||||||||||
| Other | 3,977 | 3,761 | 2,870 | 6,316 | 5,228 | 10,608 | 11,221 | ||||||||||||||
| 16,465 | 17,264 | 15,825 | 19,085 | 19,058 | 49,554 | 52,220 | |||||||||||||||
| Securities losses, net | (362) | (300) | (452) | (379) | (30) | (1,114) | (199) | ||||||||||||||
| Total Noninterest Income | 16,103 | 16,964 | 15,373 | 18,706 | 19,028 | 48,440 | 52,021 | ||||||||||||||
| Noninterest expenses: | |||||||||||||||||||||
| Salaries and wages | 28,420 | 28,056 | 28,219 | 25,005 | 27,919 | 84,695 | 72,278 | ||||||||||||||
| Employee benefits | 4,074 | 4,151 | 5,501 | 4,763 | 4,177 | 13,726 | 13,110 | ||||||||||||||
| Outsourced data processing costs | 5,393 | 6,043 | 6,156 | 5,165 | 5,610 | 17,592 | 14,754 | ||||||||||||||
| Telephone / data lines | 973 | 908 | 733 | 790 | 810 | 2,614 | 2,433 | ||||||||||||||
| Occupancy | 5,046 | 4,050 | 3,986 | 3,500 | 3,541 | 13,082 | 10,640 | ||||||||||||||
| Furniture and equipment | 1,462 | 1,588 | 1,426 | 1,403 | 1,567 | 4,476 | 3,987 | ||||||||||||||
| Marketing | 1,461 | 1,882 | 1,171 | 1,060 | 1,353 | 4,514 | 3,523 | ||||||||||||||
| Legal and professional fees | 3,794 | 2,946 | 4,789 | 2,461 | 4,151 | 11,529 | 8,915 | ||||||||||||||
| FDIC assessments | 760 | 699 | 789 | 713 | 651 | 2,248 | 1,692 | ||||||||||||||
| Amortization of intangibles | 1,446 | 1,446 | 1,446 | 1,304 | 1,306 | 4,338 | 3,729 | ||||||||||||||
| Foreclosed property expense and net (gain) loss on sale | 9 | (968) | (164) | (175) | 66 | (1,123) | (89) | ||||||||||||||
| Provision for credit losses on unfunded commitments | 1,015 | — | 142 | — | 133 | 1,157 | 133 | ||||||||||||||
| Other | 7,506 | 5,347 | 4,723 | 4,274 | 3,984 | 17,576 | 12,067 | ||||||||||||||
| Total Noninterest Expense | 61,359 | 56,148 | 58,917 | 50,263 | 55,268 | 176,424 | 147,172 | ||||||||||||||
| Income Before Income Taxes | 38,352 | 41,641 | 26,422 | 44,674 | 29,993 | 106,415 | 114,064 | ||||||||||||||
| Income taxes | 9,115 | 8,886 | 5,834 | 8,344 | 7,049 | 23,835 | 25,991 | ||||||||||||||
| Net Income | $ | 29,237 | $ | 32,755 | $ | 20,588 | $ | 36,330 | $ | 22,944 | $ | 82,580 | $ | 88,073 | |||||||
| Per share of common stock: | |||||||||||||||||||||
| Net income diluted | $ | 0.47 | $ | 0.53 | $ | 0.33 | $ | 0.62 | $ | 0.40 | $ | 1.33 | $ | 1.56 | |||||||
| Net income basic | 0.48 | 0.53 | 0.34 | 0.62 | 0.40 | 1.35 | 1.57 | ||||||||||||||
| Cash dividends declared | 0.17 | 0.17 | 0.13 | 0.13 | 0.13 | 0.47 | 0.26 | ||||||||||||||
| Average diluted shares outstanding | 61,961 | 61,923 | 61,704 | 59,016 | 57,645 | 61,867 | 56,441 | ||||||||||||||
| Average basic shares outstanding | 61,442 | 61,409 | 61,127 | 58,462 | 57,148 | 61,327 | 55,954 | ||||||||||||||
| 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) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||
| Assets | |||||||||||||||||||||
| Cash and due from banks | $ | 176,463 | $ | 363,343 | $ | 351,128 | $ | 238,750 | $ | 199,460 | |||||||||||
| Interest bearing deposits with other banks | 42,152 | 538,025 | 871,387 | 498,979 | 1,028,235 | ||||||||||||||||
| Total Cash and Cash Equivalents | 218,615 | 901,368 | 1,222,515 | 737,729 | 1,227,695 | ||||||||||||||||
| Time deposits with other banks | 4,481 | 4,730 | 5,975 | — | 750 | ||||||||||||||||
| Debt Securities: | |||||||||||||||||||||
| Available for sale (at fair value) | 1,860,734 | 1,800,791 | 1,706,619 | 1,644,319 | 1,546,155 | ||||||||||||||||
| Held to maturity (at amortized cost) | 774,706 | 794,785 | 747,004 | 638,640 | 526,502 | ||||||||||||||||
| Total Debt Securities | 2,635,440 | 2,595,576 | 2,453,623 | 2,282,959 | 2,072,657 | ||||||||||||||||
| Loans held for sale | 1,620 | 14,205 | 20,615 | 31,791 | 49,597 | ||||||||||||||||
| Loans | 6,690,845 | 6,541,548 | 6,451,217 | 5,925,029 | 5,905,884 | ||||||||||||||||
| Less: Allowance for credit losses | (95,329) | (90,769) | (89,838) | (83,315) | (87,823) | ||||||||||||||||
| Net Loans | 6,595,516 | 6,450,779 | 6,361,379 | 5,841,714 | 5,818,061 | ||||||||||||||||
| Bank premises and equipment, net | 81,648 | 74,784 | 74,617 | 72,404 | 71,250 | ||||||||||||||||
| Other real estate owned | 2,419 | 2,419 | 11,567 | 13,618 | 13,628 | ||||||||||||||||
| Goodwill | 286,606 | 286,606 | 286,606 | 252,154 | 252,154 | ||||||||||||||||
| Other intangible assets, net | 18,583 | 20,062 | 21,549 | 14,845 | 16,153 | ||||||||||||||||
| Bank owned life insurance | 209,087 | 207,724 | 206,375 | 205,041 | 193,747 | ||||||||||||||||
| Net deferred tax assets | 83,139 | 60,080 | 47,222 | 27,321 | 24,187 | ||||||||||||||||
| Other assets | 208,081 | 193,371 | 192,774 | 201,857 | 153,619 | ||||||||||||||||
| Total Assets | $ | 10,345,235 | $ | 10,811,704 | $ | 10,904,817 | $ | 9,681,433 | $ | 9,893,498 | |||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||
| Liabilities | |||||||||||||||||||||
| Deposits | |||||||||||||||||||||
| Noninterest demand | $ | 3,529,489 | $ | 3,593,201 | $ | 3,522,700 | $ | 3,075,534 | $ | 3,086,466 | |||||||||||
| Interest-bearing demand | 2,170,251 | 2,269,148 | 2,253,562 | 1,890,212 | 1,845,165 | ||||||||||||||||
| Savings | 938,081 | 946,738 | 937,839 | 895,019 | 834,309 | ||||||||||||||||
| Money market | 1,700,737 | 1,911,847 | 1,999,027 | 1,651,881 | 1,951,639 | ||||||||||||||||
| Other time certificates | 312,840 | 350,571 | 397,491 | 404,601 | 437,973 | ||||||||||||||||
| Brokered time certificates | — | — | — | — | 20,000 | ||||||||||||||||
| Time certificates of more than $250,000 | 114,016 | 117,448 | 133,149 | 150,342 | 158,620 | ||||||||||||||||
| Total Deposits | 8,765,414 | 9,188,953 | 9,243,768 | 8,067,589 | 8,334,172 | ||||||||||||||||
| Securities sold under agreements to repurchase | 94,191 | 110,578 | 120,922 | 121,565 | 105,548 | ||||||||||||||||
| Subordinated debt | 71,857 | 71,786 | 71,716 | 71,646 | 71,576 | ||||||||||||||||
| Other liabilities | 125,971 | 110,812 | 112,126 | 109,897 | 91,682 | ||||||||||||||||
| Total Liabilities | 9,057,433 | 9,482,129 | 9,548,532 | 8,370,697 | 8,602,978 | ||||||||||||||||
| Shareholders' Equity | |||||||||||||||||||||
| Common stock | 6,148 | 6,141 | 6,124 | 5,850 | 5,835 | ||||||||||||||||
| Additional paid in capital | 1,068,241 | 1,065,167 | 1,062,462 | 963,851 | 959,644 | ||||||||||||||||
| Retained earnings | 412,166 | 393,431 | 371,192 | 358,598 | 329,918 | ||||||||||||||||
| Treasury stock | (11,539) | (11,632) | (10,459) | (10,569) | (10,146) | ||||||||||||||||
| 1,475,016 | 1,453,107 | 1,429,319 | 1,317,730 | 1,285,251 | |||||||||||||||||
| Accumulated other comprehensive (loss) income, net | (187,214) | (123,532) | (73,034) | (6,994) | 5,269 | ||||||||||||||||
| Total Shareholders' Equity | 1,287,802 | 1,329,575 | 1,356,285 | 1,310,736 | 1,290,520 | ||||||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 10,345,235 | $ | 10,811,704 | $ | 10,904,817 | $ | 9,681,433 | $ | 9,893,498 | |||||||||||
| Common shares outstanding | 61,476 | 61,410 | 61,239 | 58,504 | 58,349 | ||||||||||||||||
| CONSOLIDATED QUARTERLY FINANCIAL DATA | (Unaudited) | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | |||||||||||||||||||||
| (Amounts in thousands) | 2Q'22 | 1Q'22 | 4Q'21 | 3Q'21 | |||||||||||||||||
| Credit Analysis | |||||||||||||||||||||
| Net charge-offs (recoveries) - non-acquired loans | 129 | $ | (75) | $ | 72 | $ | 541 | $ | 198 | ||||||||||||
| Net charge-offs (recoveries) - acquired loans | (49) | 7 | 29 | 1,234 | |||||||||||||||||
| Total Net Charge-offs (Recoveries) | (124) | 79 | 570 | 1,432 | |||||||||||||||||
| Net charge-offs (recoveries) to average loans - non-acquired loans | % | — | % | — | % | 0.04 | % | 0.01 | % | ||||||||||||
| Net charge-offs (recoveries) to average loans - acquired loans | — | — | — | 0.09 | |||||||||||||||||
| Total Net Charge-offs (Recoveries) to Average Loans | — | — | 0.04 | 0.10 | |||||||||||||||||
| Allowance for credit losses - non-acquired loans | 82,980 | $ | 70,215 | $ | 67,261 | $ | 64,710 | $ | 64,740 | ||||||||||||
| Allowance for credit losses - acquired loans | 20,554 | 22,577 | 18,605 | 23,083 | |||||||||||||||||
| Total Allowance for Credit Losses | 95,329 | $ | 90,769 | $ | 89,838 | $ | 83,315 | $ | 87,823 | ||||||||||||
| Non-acquired loans at end of period | 5,651,741 | $ | 5,389,405 | $ | 5,169,973 | $ | 4,860,171 | $ | 4,608,801 | ||||||||||||
| Acquired loans at end of period | 1,134,940 | 1,241,988 | 973,751 | 1,106,481 | |||||||||||||||||
| Paycheck Protection Program loans at end of period | 17,203 | 39,256 | 91,107 | 190,602 | |||||||||||||||||
| Total Loans | 6,690,845 | $ | 6,541,548 | $ | 6,451,217 | $ | 5,925,029 | $ | 5,905,884 | ||||||||||||
| Non-acquired loans allowance for credit losses to non-acquired loans at end of period | % | 1.30 | % | 1.30 | % | 1.33 | % | 1.40 | % | ||||||||||||
| Total allowance for credit losses to total loans at end of period | 1.39 | 1.39 | 1.41 | 1.49 | |||||||||||||||||
| Total allowance for credit losses to total loans, excluding PPP loans | 1.39 | 1.40 | 1.43 | 1.54 | |||||||||||||||||
| Purchase discount on acquired loans at end of period | 1.84 | 1.89 | 2.27 | 2.27 | |||||||||||||||||
| End of Period | |||||||||||||||||||||
| Nonperforming loans | 21,464 | $ | 26,442 | $ | 26,209 | $ | 30,598 | $ | 32,612 | ||||||||||||
| Other real estate owned | 109 | 9,256 | 12,223 | 11,843 | |||||||||||||||||
| Properties previously used in bank operations included in other real estate owned | 2,310 | 2,310 | 1,395 | 1,785 | |||||||||||||||||
| Total Nonperforming Assets | 23,883 | $ | 28,861 | $ | 37,775 | $ | 44,216 | $ | 46,240 | ||||||||||||
| Accruing troubled debt restructures (TDRs) | 4,149 | $ | 4,022 | $ | 4,454 | $ | 3,917 | $ | 4,047 | ||||||||||||
| Nonperforming Loans to Loans at End of Period | % | 0.40 | % | 0.41 | % | 0.52 | % | 0.55 | % | ||||||||||||
| Nonperforming Assets to Total Assets at End of Period | 0.27 | 0.35 | 0.46 | 0.47 | |||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||
| Loans | 2022 | 2022 | 2021 | 2021 | |||||||||||||||||
| Construction and land development | 361,913 | $ | 350,025 | $ | 259,421 | $ | 230,824 | $ | 227,459 | ||||||||||||
| Commercial real estate - owner occupied | 1,254,343 | 1,284,515 | 1,197,774 | 1,201,336 | |||||||||||||||||
| Commercial real estate - non-owner occupied 1 | 1,972,540 | 1,966,150 | 1,736,439 | 1,673,587 | |||||||||||||||||
| Residential real estate 1 | 1,647,465 | 1,599,645 | 1,425,354 | 1,467,329 | |||||||||||||||||
| Commercial and financial | 1,124,771 | 1,132,506 | 1,069,356 | 982,552 | |||||||||||||||||
| Consumer | 175,201 | 169,724 | 174,175 | 163,019 | |||||||||||||||||
| Paycheck Protection Program | 17,203 | 39,256 | 91,107 | 190,602 | |||||||||||||||||
| Total Loans | 6,690,845 | $ | 6,541,548 | $ | 6,451,217 | $ | 5,925,029 | $ | 5,905,884 | ||||||||||||
| 1 In 3Q'22, 100 million in loans to commercial borrowers collateralized by residential properties were reclassified from "Residential real estate" to "Commercial real estate - non-owner occupied." |
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'22 | 2Q'22 | 3Q'21 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||
| (Amounts in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||
| Assets | ||||||||||||||||||
| Earning assets: | ||||||||||||||||||
| Securities: | ||||||||||||||||||
| Taxable | $ | 2,665,104 | $ | 15,653 | 2.35 | % | $ | 2,517,879 | $ | 12,387 | 1.97 | % | $ | 1,971,520 | $ | 7,775 | 1.58 | % |
| Nontaxable | 22,064 | 174 | 3.15 | 22,443 | 175 | 3.12 | 25,311 | 181 | 2.86 | |||||||||
| Total Securities | 2,687,168 | 15,827 | 2.36 | 2,540,322 | 12,562 | 1.98 | 1,996,831 | 7,956 | 1.59 | |||||||||
| Federal funds sold | 203,815 | 1,062 | 2.07 | 644,144 | 1,281 | 0.80 | 1,056,691 | 406 | 0.15 | |||||||||
| Other investments | 45,193 | 581 | 5.10 | 46,257 | 636 | 5.51 | 35,306 | 461 | 5.18 | |||||||||
| Loans excluding PPP loans | 6,597,828 | 73,730 | 4.43 | 6,454,444 | 68,647 | 4.27 | 5,422,350 | 58,600 | 4.29 | |||||||||
| PPP loans | 10,114 | 320 | 12.54 | 26,322 | 741 | 11.29 | 281,724 | 5,917 | 8.33 | |||||||||
| Total Loans | 6,607,942 | 74,050 | 4.45 | 6,480,766 | 69,388 | 4.29 | 5,704,074 | 64,517 | 4.49 | |||||||||
| Total Earning Assets | 9,544,118 | 91,520 | 3.80 | 9,711,489 | 83,867 | 3.46 | 8,792,902 | 73,340 | 3.31 | |||||||||
| Allowance for credit losses | (91,348) | (90,242) | (88,412) | |||||||||||||||
| Cash and due from banks | 331,947 | 389,695 | 386,781 | |||||||||||||||
| Premises and equipment | 76,357 | 74,614 | 70,667 | |||||||||||||||
| Intangible assets | 305,935 | 307,411 | 254,980 | |||||||||||||||
| Bank owned life insurance | 208,193 | 206,839 | 164,879 | |||||||||||||||
| Other assets | 210,136 | 240,712 | 171,937 | |||||||||||||||
| Total Assets | $ | 10,585,338 | $ | 10,840,518 | $ | 9,753,734 | ||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing demand | $ | 2,215,899 | $ | 757 | 0.14 | % | $ | 2,262,408 | $ | 293 | 0.05 | % | $ | 1,891,092 | $ | 219 | 0.05 | % |
| Savings | 944,128 | 65 | 0.03 | 962,264 | 64 | 0.03 | 842,018 | 65 | 0.03 | |||||||||
| Money market | 1,806,014 | 802 | 0.18 | 1,938,421 | 637 | 0.13 | 1,860,386 | 565 | 0.12 | |||||||||
| Time deposits | 445,840 | 380 | 0.34 | 496,186 | 436 | 0.35 | 572,661 | 583 | 0.40 | |||||||||
| Securities sold under agreements to repurchase | 111,902 | 309 | 1.10 | 120,437 | 94 | 0.31 | 120,507 | 35 | 0.12 | |||||||||
| Other borrowings | 71,810 | 808 | 4.46 | 71,740 | 579 | 3.24 | 71,530 | 418 | 2.32 | |||||||||
| Total Interest-Bearing Liabilities | 5,595,593 | 3,121 | 0.22 | 5,851,456 | 2,103 | 0.14 | 5,358,194 | 1,885 | 0.14 | |||||||||
| Noninterest demand | 3,529,844 | 3,520,700 | 2,985,582 | |||||||||||||||
| Other liabilities | 110,426 | 117,794 | 161,411 | |||||||||||||||
| Total Liabilities | 9,235,863 | 9,489,950 | 8,505,187 | |||||||||||||||
| Shareholders' equity | 1,349,475 | 1,350,568 | 1,248,547 | |||||||||||||||
| Total Liabilities & Equity | $ | 10,585,338 | $ | 10,840,518 | $ | 9,753,734 | ||||||||||||
| Cost of deposits | 0.09 | % | 0.06 | % | 0.07 | % | ||||||||||||
| Interest expense as a % of earning assets | 0.13 | % | 0.09 | % | 0.09 | % | ||||||||||||
| Net interest income as a % of earning assets | $ | 88,399 | 3.67 | % | $ | 81,764 | 3.38 | % | $ | 71,455 | 3.22 | % | ||||||
| 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. | ||||||||||||||||||
| AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1 | (Unaudited) | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES | ||||||||||||||||||
| Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| (Amounts in thousands, except ratios) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||
| Assets | ||||||||||||||||||
| Earning assets: | ||||||||||||||||||
| Securities: | ||||||||||||||||||
| Taxable | $ | 2,530,742 | $ | 38,081 | 2.01 | % | $ | 1,718,671 | $ | 20,632 | 1.60 | % | ||||||
| Nontaxable | 22,842 | 526 | 3.07 | 25,606 | 554 | 2.88 | ||||||||||||
| Total Securities | 2,553,584 | 38,607 | 2.02 | 1,744,277 | 21,186 | 1.62 | ||||||||||||
| Federal funds sold | 526,890 | 2,693 | 0.68 | 725,013 | 706 | 0.13 | ||||||||||||
| Other investments | 45,483 | 1,800 | 5.29 | 75,826 | 1,456 | 2.57 | ||||||||||||
| Loans excluding PPP loans | 6,444,253 | 208,052 | 4.32 | 5,222,629 | 169,417 | 4.34 | ||||||||||||
| PPP loans | 32,597 | 2,584 | 10.60 | 464,397 | 17,930 | 5.16 | ||||||||||||
| Total Loans | 6,476,850 | 210,636 | 4.35 | 5,687,026 | 187,347 | 4.40 | ||||||||||||
| Total Earning Assets | 9,602,807 | 253,736 | 3.53 | 8,232,142 | 210,695 | 3.42 | ||||||||||||
| Allowance for credit losses | (89,700) | (88,717) | ||||||||||||||||
| Cash and due from banks | 362,369 | 323,693 | ||||||||||||||||
| Premises and equipment | 75,617 | 71,644 | ||||||||||||||||
| Intangible assets | 305,895 | 242,820 | ||||||||||||||||
| Bank owned life insurance | 206,854 | 143,601 | ||||||||||||||||
| Other assets | 220,790 | 167,775 | ||||||||||||||||
| Total Assets | $ | 10,684,632 | $ | 9,092,958 | ||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing demand | $ | 2,192,331 | $ | 1,240 | 0.08 | % | $ | 1,728,985 | $ | 712 | 0.06 | % | ||||||
| Savings | 943,982 | 194 | 0.03 | 785,447 | 320 | 0.05 | ||||||||||||
| Money market | 1,906,407 | 1,951 | 0.14 | 1,736,519 | 1,862 | 0.14 | ||||||||||||
| Time deposits | 500,482 | 1,284 | 0.34 | 605,269 | 2,294 | 0.51 | ||||||||||||
| Securities sold under agreements to repurchase | 116,805 | 442 | 0.51 | 116,304 | 112 | 0.13 | ||||||||||||
| Other borrowings | 71,741 | 1,823 | 3.40 | 71,460 | 1,266 | 2.37 | ||||||||||||
| Total Interest-Bearing Liabilities | 5,731,751 | 6,934 | 0.16 | 5,043,984 | 6,566 | 0.17 | ||||||||||||
| Noninterest demand | 3,462,931 | 2,741,115 | ||||||||||||||||
| Other liabilities | 123,279 | 122,329 | ||||||||||||||||
| Total Liabilities | 9,317,961 | 7,907,428 | ||||||||||||||||
| Shareholders' equity | 1,366,672 | 1,185,530 | ||||||||||||||||
| Total Liabilities & Equity | $ | 10,684,632 | $ | 9,092,958 | ||||||||||||||
| Cost of deposits | 0.07 | % | 0.09 | % | ||||||||||||||
| Interest expense as a % of earning assets | 0.10 | % | 0.11 | % | ||||||||||||||
| Net interest income as a % of earning assets | $ | 246,802 | 3.44 | % | $ | 204,129 | 3.32 | % | ||||||||||
| 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||
| Customer Relationship Funding | ||||||||||||||||||
| Noninterest demand | ||||||||||||||||||
| Commercial | $ | 2,827,591 | $ | 2,945,445 | $ | 2,939,595 | $ | 2,477,111 | $ | 2,535,922 | ||||||||
| Retail | 447,848 | 464,214 | 458,809 | 458,626 | 416,779 | |||||||||||||
| Public funds | 210,662 | 143,075 | 86,419 | 107,523 | 84,337 | |||||||||||||
| Other | 43,388 | 40,467 | 37,877 | 32,274 | 49,428 | |||||||||||||
| Total Noninterest Demand | 3,529,489 | 3,593,201 | 3,522,700 | 3,075,534 | 3,086,466 | |||||||||||||
| Interest-bearing demand | ||||||||||||||||||
| Commercial | 759,286 | 769,948 | 610,109 | 497,466 | 554,366 | |||||||||||||
| Retail | 1,199,112 | 1,207,698 | 1,392,490 | 1,144,635 | 1,069,668 | |||||||||||||
| Brokered | 81,799 | — | — | — | — | |||||||||||||
| Public funds | 130,054 | 291,502 | 250,963 | 248,111 | 221,131 | |||||||||||||
| Total Interest-Bearing Demand | 2,170,251 | 2,269,148 | 2,253,562 | 1,890,212 | 1,845,165 | |||||||||||||
| Total transaction accounts | ||||||||||||||||||
| Commercial | 3,586,877 | 3,715,393 | 3,549,704 | 2,974,577 | 3,090,288 | |||||||||||||
| Retail | 1,646,960 | 1,671,912 | 1,851,299 | 1,603,261 | 1,486,447 | |||||||||||||
| Public funds | 340,716 | 434,577 | 337,382 | 355,634 | 305,468 | |||||||||||||
| Other | 43,388 | 40,467 | 37,877 | 32,274 | 49,428 | |||||||||||||
| Total Transaction Accounts | 5,617,941 | 5,862,349 | 5,776,262 | 4,965,746 | 4,931,631 | |||||||||||||
| Savings | 938,081 | 946,738 | 937,839 | 895,019 | 834,309 | |||||||||||||
| Money market | ||||||||||||||||||
| Commercial | 788,009 | 819,452 | 856,117 | 732,639 | 827,901 | |||||||||||||
| Retail | 857,914 | 914,918 | 931,702 | 840,054 | 834,628 | |||||||||||||
| Brokered | — | 106,823 | 126,168 | 8,007 | 196,548 | |||||||||||||
| Public funds | 54,814 | 70,654 | 85,040 | 71,181 | 92,562 | |||||||||||||
| Total Money Market | 1,700,737 | 1,911,847 | 1,999,027 | 1,651,881 | 1,951,639 | |||||||||||||
| Brokered time certificates | — | — | — | — | 20,000 | |||||||||||||
| Other time certificates | 426,856 | 468,019 | 530,640 | 554,943 | 596,593 | |||||||||||||
| 426,856 | 468,019 | 530,640 | 554,943 | 616,593 | ||||||||||||||
| Total Deposits | $ | 8,683,615 | $ | 9,188,953 | $ | 9,243,768 | $ | 8,067,589 | $ | 8,334,172 | ||||||||
| Customer sweep accounts | $ | 94,191 | $ | 110,578 | $ | 120,922 | $ | 121,565 | $ | 105,548 |
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'22 | 2Q'22 | 1Q'22 | 4Q'21 | 3Q'21 | 3Q'22 | 3Q'21 | ||||||||||||||
| Net Income | $ | 29,237 | $ | 32,755 | $ | 20,588 | $ | 36,330 | $ | 22,944 | $ | 82,580 | $ | 88,073 | |||||||
| Total noninterest income | 16,103 | 16,964 | 15,373 | 18,706 | 19,028 | 48,440 | 52,021 | ||||||||||||||
| Securities losses (gains), net | 362 | 300 | 452 | 379 | 30 | 1,114 | 199 | ||||||||||||||
| Gain on sale of domain name (included in other income) | — | — | — | (755) | — | — | — | ||||||||||||||
| Total Adjustments to Noninterest Income | 362 | 300 | 452 | (376) | 30 | 1,114 | 199 | ||||||||||||||
| Total Adjusted Noninterest Income | 16,465 | 17,264 | 15,825 | 18,330 | 19,058 | 49,554 | 52,220 | ||||||||||||||
| Total noninterest expense | 61,359 | 56,148 | 58,917 | 50,263 | 55,268 | 176,424 | 147,172 | ||||||||||||||
| Merger related charges | (2,054) | (3,039) | (6,692) | (482) | (6,281) | (11,785) | (7,371) | ||||||||||||||
| Amortization of intangibles | (1,446) | (1,446) | (1,446) | (1,304) | (1,306) | (4,338) | (3,729) | ||||||||||||||
| Branch reductions and other expense initiatives | (960) | — | (74) | (168) | (870) | (1,034) | (1,982) | ||||||||||||||
| Total Adjustments to Noninterest Expense | (4,460) | (4,485) | (8,212) | (1,954) | (8,457) | (17,157) | (13,082) | ||||||||||||||
| Total Adjusted Noninterest Expense | 56,899 | 51,663 | 50,705 | 48,309 | 46,811 | 159,267 | 134,090 | ||||||||||||||
| Income Taxes | 9,115 | 8,886 | 5,834 | 8,344 | 7,049 | 23,835 | 25,991 | ||||||||||||||
| Tax effect of adjustments | 1,222 | 1,213 | 2,196 | 280 | 2,081 | 4,631 | 3,256 | ||||||||||||||
| Effect of change in corporate tax rate on deferred tax assets | — | — | — | 774 | — | — | — | ||||||||||||||
| Total Adjustments to Income Taxes | 1,222 | 1,213 | 2,196 | 1,054 | 2,081 | 4,631 | 3,256 | ||||||||||||||
| Adjusted Income Taxes | 10,337 | 10,099 | 8,030 | 9,398 | 9,130 | 28,466 | 29,247 | ||||||||||||||
| Adjusted Net Income | $ | 32,837 | $ | 36,327 | $ | 27,056 | $ | 36,854 | $ | 29,350 | $ | 96,220 | $ | 98,098 | |||||||
| Earnings per diluted share, as reported | $ | 0.47 | $ | 0.53 | $ | 0.33 | $ | 0.62 | $ | 0.40 | $ | 1.33 | $ | 1.56 | |||||||
| Adjusted Earnings per Diluted Share | 0.53 | 0.59 | 0.44 | 0.62 | 0.51 | 1.56 | 1.74 | ||||||||||||||
| Average diluted shares outstanding | 61,961 | 61,923 | 61,704 | 59,016 | 57,645 | 61,867 | 56,441 | ||||||||||||||
| Adjusted Noninterest Expense | $ | 56,899 | $ | 51,663 | $ | 50,705 | $ | 48,309 | $ | 46,811 | $ | 159,267 | $ | 134,090 | |||||||
| Provision for credit losses on unfunded commitments | (1,015) | — | (142) | — | (133) | (1,157) | (133) | ||||||||||||||
| Foreclosed property expense and net gain / (loss) on sale | (9) | 968 | 164 | 175 | (66) | 1,123 | 89 | ||||||||||||||
| Net Adjusted Noninterest Expense | $ | 55,875 | $ | 52,631 | $ | 50,727 | $ | 48,484 | $ | 46,612 | $ | 159,233 | $ | 134,046 | |||||||
| Revenue | $ | 104,387 | $ | 98,611 | $ | 91,895 | $ | 90,995 | $ | 90,352 | $ | 294,893 | $ | 255,757 | |||||||
| Total Adjustments to Revenue | 362 | 300 | 452 | (376) | 30 | 1,114 | 199 | ||||||||||||||
| Impact of FTE adjustment | 115 | 117 | 117 | 123 | 131 | 349 | 393 | ||||||||||||||
| Adjusted Revenue on a fully taxable equivalent basis | $ | 104,864 | $ | 99,028 | $ | 92,464 | $ | 90,742 | $ | 90,513 | $ | 296,356 | $ | 256,349 | |||||||
| Adjusted Efficiency Ratio | 53.28 | % | 53.15 | % | 54.86 | % | 53.43 | % | 51.50 | % | 53.73 | % | 52.29 | % | |||||||
| Net Interest Income | $ | 88,284 | $ | 81,647 | $ | 76,522 | $ | 72,289 | $ | 71,324 | $ | 246,453 | $ | 203,736 | |||||||
| Impact of FTE adjustment | 115 | 117 | 117 | 123 | 131 | 349 | 393 | ||||||||||||||
| Net Interest Income including FTE adjustment | $ | 88,399 | $ | 81,764 | $ | 76,639 | $ | 72,412 | $ | 71,455 | $ | 246,802 | $ | 204,129 | |||||||
| Total noninterest income | 16,103 | 16,964 | 15,373 | 18,706 | 19,028 | 48,440 | 52,021 | ||||||||||||||
| Total noninterest expense | 61,359 | 56,148 | 58,917 | 50,263 | 55,268 | 176,424 | 147,172 | ||||||||||||||
| Pre-Tax Pre-Provision Earnings | $ | 43,143 | $ | 42,580 | $ | 33,095 | $ | 40,855 | $ | 35,215 | $ | 118,818 | $ | 108,978 | |||||||
| Total Adjustments to Noninterest Income | 362 | 300 | 452 | (376) | 30 | 1,114 | 199 | ||||||||||||||
| Total Adjustments to Noninterest Expense | (5,484) | (3,517) | (8,190) | (1,779) | (8,656) | (17,191) | (13,126) | ||||||||||||||
| Adjusted Pre-Tax Pre-Provision Earnings | $ | 48,989 | $ | 46,397 | $ | 41,737 | $ | 42,258 | $ | 43,901 | $ | 137,123 | $ | 122,303 | |||||||
| Average Assets | $ | 10,585,338 | $ | 10,840,518 | $ | 10,628,516 | $ | 10,061,382 | $ | 9,753,734 | $ | 10,684,632 | $ | 9,092,958 | |||||||
| Less average goodwill and intangible assets | (305,935) | (307,411) | (304,321) | (267,692) | (254,980) | (305,895) | (242,820) | ||||||||||||||
| Average Tangible Assets | $ | 10,279,403 | $ | 10,533,107 | $ | 10,324,195 | $ | 9,793,690 | $ | 9,498,754 | $ | 10,378,737 | $ | 8,850,138 | |||||||
| Return on Average Assets (ROA) | 1.10 | % | 1.21 | % | 0.79 | % | 1.43 | % | 0.93 | % | 1.03 | % | 1.29 | % | |||||||
| Impact of removing average intangible assets and related amortization | 0.07 | 0.08 | 0.06 | 0.08 | 0.07 | 0.08 | 0.08 | ||||||||||||||
| Return on Average Tangible Assets (ROTA) | 1.17 | 1.29 | 0.85 | 1.51 | 1.00 | 1.11 | 1.37 | ||||||||||||||
| 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'22 | 2Q'22 | 1Q'22 | 4Q'21 | 3Q'21 | 3Q'22 | 3Q'21 | ||||||||||||||
| Impact of other adjustments for Adjusted Net Income | 0.10 | 0.09 | 0.21 | (0.02) | 0.23 | 0.13 | 0.11 | ||||||||||||||
| Adjusted Return on Average Tangible Assets | 1.27 | 1.38 | 1.06 | 1.49 | 1.23 | 1.24 | 1.48 | ||||||||||||||
| Average Shareholders' Equity | $ | 1,349,475 | $ | 1,350,568 | $ | 1,400,535 | $ | 1,303,686 | $ | 1,248,547 | $ | 1,366,672 | $ | 1,185,530 | |||||||
| Less average goodwill and intangible assets | (305,935) | (307,411) | (304,321) | (267,692) | (254,980) | (305,895) | (242,820) | ||||||||||||||
| Average Tangible Equity | $ | 1,043,540 | $ | 1,043,157 | $ | 1,096,214 | $ | 1,035,994 | $ | 993,567 | $ | 1,060,777 | $ | 942,710 | |||||||
| Return on Average Shareholders' Equity | 8.60 | % | 9.73 | % | 5.96 | % | 11.06 | % | 7.29 | % | 8.08 | % | 9.93 | % | |||||||
| Impact of removing average intangible assets and related amortization | 2.93 | 3.28 | 2.06 | 3.23 | 2.27 | 2.74 | 2.96 | ||||||||||||||
| Return on Average Tangible Common Equity (ROTCE) | 11.53 | 13.01 | 8.02 | 14.29 | 9.56 | 10.82 | 12.89 | ||||||||||||||
| Impact of other adjustments for Adjusted Net Income | 0.95 | 0.96 | 1.99 | (0.18) | 2.16 | 1.31 | 1.02 | ||||||||||||||
| Adjusted Return on Average Tangible Common Equity | 12.48 | 13.97 | 10.01 | 14.11 | 11.72 | 12.13 | 13.91 | ||||||||||||||
| Loan interest income1 | $ | 74,050 | $ | 69,388 | $ | 67,198 | $ | 64,487 | $ | 64,517 | $ | 210,636 | $ | 187,347 | |||||||
| Accretion on acquired loans | (2,242) | (2,720) | (3,717) | (3,520) | (3,483) | (8,679) | (9,237) | ||||||||||||||
| Interest and fees on PPP loans | (320) | (741) | (1,523) | (3,352) | (5,917) | (2,584) | (17,930) | ||||||||||||||
| Loan interest income excluding PPP and accretion on acquired loans | $ | 71,488 | $ | 65,927 | $ | 61,958 | $ | 57,615 | $ | 55,117 | $ | 199,373 | $ | 160,180 | |||||||
| Yield on loans1 | 4.45 | 4.29 | 4.30 | 4.31 | 4.49 | 4.35 | 4.40 | ||||||||||||||
| Impact of accretion on acquired loans | (0.14) | (0.16) | (0.24) | (0.24) | (0.24) | (0.18) | (0.21) | ||||||||||||||
| Impact of PPP loans | (0.01) | (0.03) | (0.06) | (0.13) | (0.22) | (0.03) | (0.09) | ||||||||||||||
| Yield on loans excluding PPP and accretion on acquired loans | 4.30 | % | 4.10 | % | 4.00 | % | 3.94 | % | 4.03 | % | 4.14 | % | 4.10 | % | |||||||
| Net Interest Income1 | $ | 88,399 | $ | 81,764 | $ | 76,639 | $ | 72,412 | $ | 71,455 | $ | 246,802 | $ | 204,129 | |||||||
| Accretion on acquired loans | (2,242) | (2,720) | (3,717) | (3,520) | (3,483) | (8,679) | (9,237) | ||||||||||||||
| Interest and fees on PPP loans | (320) | (741) | (1,523) | (3,352) | (5,917) | (2,584) | (17,930) | ||||||||||||||
| Net interest income excluding PPP and accretion on acquired loans | $ | 85,837 | $ | 78,303 | $ | 71,399 | $ | 65,540 | $ | 62,055 | $ | 235,539 | $ | 176,962 | |||||||
| Net Interest Margin | 3.67 | 3.38 | 3.25 | 3.16 | 3.22 | 3.44 | 3.32 | ||||||||||||||
| Impact of accretion on acquired loans | (0.09) | (0.12) | (0.15) | (0.15) | (0.15) | (0.12) | (0.15) | ||||||||||||||
| Impact of PPP loans | (0.01) | (0.02) | (0.05) | (0.10) | (0.18) | (0.03) | (0.12) | ||||||||||||||
| Net interest margin excluding PPP and accretion on acquired loans | 3.57 | % | 3.24 | % | 3.05 | % | 2.91 | % | 2.89 | % | 3.29 | % | 3.05 | % | |||||||
| Security interest income1 | $ | 15,827 | $ | 12,562 | $ | 10,218 | $ | 8,750 | $ | 7,956 | $ | 38,607 | $ | 21,186 | |||||||
| Tax equivalent adjustment on securities | (35) | (36) | (37) | (37) | (38) | (108) | (116) | ||||||||||||||
| Security interest income excluding tax equivalent adjustment | $ | 15,792 | $ | 12,526 | $ | 10,181 | $ | 8,713 | $ | 7,918 | $ | 38,499 | $ | 21,070 | |||||||
| Loan interest income1 | $ | 74,050 | $ | 69,388 | $ | 67,198 | $ | 64,487 | $ | 64,517 | $ | 210,636 | $ | 187,347 | |||||||
| Tax equivalent adjustment on loans | (80) | (81) | (80) | (86) | (93) | (241) | (277) | ||||||||||||||
| Loan interest income excluding tax equivalent adjustment | $ | 73,970 | $ | 69,307 | $ | 67,118 | $ | 64,401 | $ | 64,424 | $ | 210,395 | $ | 187,070 | |||||||
| Net Interest Income1 | $ | 88,399 | $ | 81,764 | $ | 76,639 | $ | 72,412 | $ | 71,455 | $ | 246,802 | $ | 204,129 | |||||||
| Tax equivalent adjustment on securities | (35) | (36) | (37) | (37) | (38) | (108) | (116) | ||||||||||||||
| Tax equivalent adjustment on loans | (80) | (81) | (80) | (86) | (93) | (241) | (277) | ||||||||||||||
| Net interest income excluding tax equivalent adjustment | $ | 88,284 | $ | 81,647 | $ | 76,522 | $ | 72,289 | $ | 71,324 | $ | 246,453 | $ | 203,736 | |||||||
| 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. |
sbcfpresentation
EARNINGS PRESENTATION THIRD QUARTER 2022 2022
2THIRD QUARTER 2022 EARNINGS PRESENTATION This presentation 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, including Apollo Bancshares, Inc., Drummond Banking Company, and Professional Holding Corp., 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 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; the adverse impact of COVID-19 (economic and otherwise) on the Company and its customers, counterparties, employees, and third-party service providers, and the adverse impacts to our business, financial position, results of operations and prospects; 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; 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 including as a result of the financial impact of COVID-19; changes in retail distribution strategies, customer preferences and behavior (including as a result of economic factors); 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 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, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies; 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, including the impact of supply chain disruptions; reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy; the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine, 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 Paycheck Protection Program (“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 credit losses. The risks relating to the mergers with Apollo Bancshares, Inc., Drummond Banking Company, and Professional Holding Corp. include, without limitation: the diversion of management's time on issues related to the mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that 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 expectations; the risks of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets. 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, 2021 and quarterly reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 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. Cautionary Notice Regarding Forward-Looking Statements
3THIRD QUARTER 2022 EARNINGS PRESENTATION • $10.3 billion in assets as of September 30, 2022, operating in the nation’s third-most populous state • Strong presence in Florida’s most attractive markets ▪ #1 Florida-based bank in Orlando MSA ▪ #1 market share in Port St. Lucie MSA ▪ #1 Florida-based bank in Palm Beach county ▪ #2 Florida-based bank in St. Petersburg • Among the largest publicly traded community banks headquartered in Florida • Market Cap: $1.9 billion as of September 30, 2022 • Strong liquidity position • Prudent capital position to support further organic growth and opportunistic acquisitions • Unique customer analytics capabilities drive value creation with new, acquired, and existing customers Jacksonville MSA West Palm Beach Fort Lauderdale Miami MSA Port St. Lucie MSA Orlando MSA Tampa St. Petersburg MSA Naples Fort Myers MSA Valuable Florida Franchise, Well-Positioned with Strong Capital and Liquidity SEACOAST BANK FOOTPRINT1 1 Reflects October 2022 acquisitions of Apollo Bank and Drummond Bank
4THIRD QUARTER 2022 EARNINGS PRESENTATION Attracted by Florida’s favorable business climate and lower taxes, individual and business migration to Florida has surged. The significant inflow of wealth is positively impacting the state’s fiscal and economic health. Sources: US Census data; The Florida Legislature Office of Economic & Demographic Research, FL Dept of Revenue, Wall Street Journal Florida’s Economic Strength is Evident Between 2010 and 2020, Florida’s population grew at twice the rate of overall U.S. population growth 14.6% Florida was the top state for net in-migration for the fifth consecutive year #1 States with the Largest Net Gains/Losses of Adjusted Gross Income from Migration, in Billions Florida Texas Arizona North Carolina South Carolina New York California Illinois Massachusetts New Jersey $(25)B $(20)B $(15)B $(10)B $(5)B $0B $5B $10B $15B $20B $25B $30B Domestic Wealth Migration, 2020 Florida $23.7 Billion For the second consecutive year, Florida’s corporate income tax collections exceeded the fiscal budgeted amount. As a result, the Florida Dept of Revenue refunded the excess to corporations in April 2022 Florida Announces Surplus of $21.8 Billion for Fiscal Year 2021-22
5THIRD QUARTER 2022 EARNINGS PRESENTATION • Net interest margin expanded 29 basis points to 3.67%. Excluding the effects of PPP and accretion on acquired loans, net interest margin expanded 33 basis points to 3.57%. • Asset sensitive balance sheet and ample liquidity support the opportunity for continued expansion of NIM in future periods. • Cost of deposits remains low at nine basis points. • Pre-tax pre-provision earnings increased 1% to $43.1 million. On an adjusted basis, pre-tax pre-provision earnings1 increased 6% to $49.0 million. • Disciplined organic loan growth of 10% on an annualized basis, ending the period with 76% loan to deposit ratio. • Strong commercial loan production and an 11% increase in commercial pipeline. • Excluding the effects of PPP and accretion on acquired loans, loan yields expanded 20 basis points to 4.30%. • Continued strong asset quality trends, with nonperforming loans declining to 0.32% of total loans. • Average noninterest demand account balances increased, overcoming a typical summer seasonal decline. • Continued success building wealth management relationships, and $100 million of deposit outstandings transitioned to wealth assets under management during the quarter. • Completed the acquisitions of Apollo Bancshares, Inc. and Drummond Banking Company on October 7, 2022. • Announced the proposed acquisition of Professional Holding Corp., the holding company of Professional Bank, expected to close in the first quarter of 2023. Third Quarter 2022 Highlights 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. Comparisons are to second quarter of 2022 unless otherwise stated
6THIRD QUARTER 2022 EARNINGS PRESENTATION Significant Expansion in Net Interest Margin and Net Interest Income ($ in th ou sa nd s) $71,455 $72,412 $76,639 $81,764 $88,399 3.22% 3.16% 3.25% 3.38% 3.67% 2.89% 2.91% 3.05% 3.24% 3.57% Net Interest Income Net Interest Margin NIM, excluding PPP and accretion on acquired loans 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 • Net interest income1 totaled $88.4 million, an increase of $6.6 million, or 8%, from the prior quarter. • Net interest margin expanded 29 basis points to 3.67% and, excluding the effects of PPP and accretion on acquired loans, net interest margin increased 33 basis points to 3.57%. • Securities yields expanded 38 basis points to 2.36%, reflecting the addition of higher yielding securities during the quarter. • Excluding the effects of PPP and accretion on acquired loans, loan yields expanded 20 basis points to 4.30%, benefiting from $554.7 million in loan originations during the third quarter of 2022. • Cost of deposits remains low at nine basis points. 1Calculated on a fully taxable equivalent basis using amortized cost.
7THIRD QUARTER 2022 EARNINGS PRESENTATION $19,058 $17,264 $16,465 $2,495 $3,408 $3,504 $4,131 $4,255 $4,138 $2,562 $2,774 $2,732 $2,550 $932 $434 $6,192 $4,546 $4,294 $1,128 $1,349 $1,363 Service Charges Interchange Income Wealth Management Mortgage Banking Other Income BOLI 3Q'21 2Q'22 3Q'22 $19,028 $16,964 $16,103 $2,495 $3,408 $3,504 $4,131 $4,255 $4,138 $2,562 $2,774 $2,732 $2,550 $932 $434 $6,162 $4,246 $3,932 $1,128 $1,349 $1,363 Service Charges Interchange Income Wealth Management Mortgage Banking Other Income BOLI 3Q'21 2Q'22 3Q'22 Adjusted Noninterest Income1 ($ in thousands) 2 3 Noninterest Income ($ in thousands) 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, SBA gains, marine finance fees, and other fees related to customer activity as well as securities losses of $30 thousand in 3Q’21, $300 thousand in 2Q'22 and $362 thousand in 3Q'22. 3Other Income on an adjusted basis includes income and gains on SBIC investments, SBA gains, marine finance fees, and other fees related to customer activity. Noninterest Income Noninterest income decreased $0.9 million from the prior quarter to $16.1 million, and adjusted noninterest income1 decreased $0.8 million to $16.5 million. Changes on an adjusted basis include: • Service charges on deposits, which increased $0.1 million compared to the prior quarter and increased $1.0 million compared to the prior year quarter, continue to benefit from growth in commercial deposit relationships. • Mortgage banking fees continue to be impacted by the rapid increase in mortgage rates and low inventory levels, declining $0.5 million compared to the prior quarter. • Despite the impact of market declines, the wealth management division has demonstrated continued success in building relationships, and $100 million of deposit outstandings transitioned to wealth assets under management in the third quarter of 2022. • Other income decreased by $0.3 million in the third quarter of 2022 to $4.3 million, with increases in SBIC investment income offset by lower SBA gains and lower loan-swap related income.
8THIRD QUARTER 2022 EARNINGS PRESENTATION $46,811 $51,663 $56,899 $28,691 $31,542 $32,488 $4,657 $5,623 $5,598 $133 $0 $1,015 $5,441 $6,347 $6,518 $2,131 $1,565 $2,003 $5,758 $6,586 $9,277 Other Expense Legal & Professional Occupancy & Telephone Provision for Unfunded Commitments Data Processing Cost Salaries & Benefits 3Q'21 2Q'22 3Q'22 $55,268 $56,148 $61,359 $32,096 $32,207 $32,494 $1,306 $1,446 $1,446 $5,610 $6,043 $5,393 $133 $0 $1,015 $5,918 $6,546 $7,481 $4,151 $2,946 $3,794 $6,054 $6,960 $9,736 Other Expense Legal & Professional Occupancy & Telephone Provision for Unfunded Commitments Data Processing Cost Amortization of Intangibles Salaries & Benefits 3Q'21 2Q'22 3Q'22 Adjusted Noninterest Expense1 ($ in thousands) 2 2 Noninterest Expense ($ in thousands) Noninterest expense increased $5.2 million on both a GAAP and adjusted basis. Of the increase, $2.6 million was unique to the quarter, including the provision for unfunded commitments, recruiting and project-related expenses that are not expected to recur. Changes quarter-over-quarter on an adjusted basis include: • Salaries and benefits increased $0.9 million to $32.5 million in the third quarter of 2022. During the third quarter, the Company continued building talent, adding a commercial banking team in North Florida, and expanding the team in West Florida. • Legal and professional fees increased $0.4 million as a result of non-recurring professional fees associated with projects completed during the quarter. • A $1.0 million provision for credit losses on unfunded commitments reflects modeled results of changes in economic factors. • Other expenses increased by $2.7 million, primarily as a result of recruiting fees associated with the Company’s expansion across Florida and a number of smaller nonrecurring items. The prior quarter included a $1.0 million gain on sale of OREO. 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, foreclosed property expense and net loss/(gain) on sale, and other expenses associated with ongoing business operations. Noninterest Expense
9THIRD QUARTER 2022 EARNINGS PRESENTATION Efficiency Ratio Trend - Continued Focus on Disciplined Expense Control 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 49% 48% 60% 50% 62% 48% 53% 55% 60% 54% 62% 56% 57% 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 2Q '22 3Q '22 49% 48% 54% 50% 55% 49% 52% 53% 51% 53% 55% 53% 53% 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 2Q '22 3Q '22 GAAP - Efficiency Adjusted - Efficiency1 • The efficiency ratio was 57.1% for the third quarter of 2022 compared to 56.2% in the prior quarter and 59.5% in the third quarter of 2021. • The adjusted efficiency ratio1 was 53.3% for the third quarter of 2022 compared to 53.1% in the prior quarter and 51.5% in the third quarter of 2021. 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. First Bank of the Palm Beaches Freedom Bank Legacy Bank of Florida Sabal Palm Bank and Florida Business Bank
10THIRD QUARTER 2022 EARNINGS PRESENTATION Commercial Real Estate - Owner Occupied $1,253,459 19% Construction and Land Development $361,913 5% Paycheck Protection Program $5,294 <1%Consumer $180,416 3% Commercial & Financial $1,182,384 18% Commercial Real Estate - Non-Owner Occupied $2,107,614 31% Residential Real Estate $1,599,765 24% At September 30, 2022 ($ in thousands) Seacoast's Lending Strategy Produced and Sustains a Diverse Loan Portfolio The Company remains focused and committed to its strict credit underwriting standards. Construction and land development and commercial real estate loans, as defined in regulatory guidance, represent 28% and 175%, respectively, of total consolidated risk based capital. Seacoast’s average commercial loan size is $589 thousand. 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 are broadly distributed. Construction & Land Development and CRE Loans to Total Risk Based Capital 266% 175% 62% 28% CRE Construction & Land Development Peers SBCF Peer Source: 2Q’22 S&P Capital
11THIRD QUARTER 2022 EARNINGS PRESENTATION $6,691 $5,906 $5,925 $6,451 $6,542 $5,715 $5,834 $191 $91 4.49% 4.31% 4.30% 4.29% 4.45% 4.03% 3.94% 4.00% 4.10% 4.30% Yield Excluding PPP and Accretion on Acquired Loans Reported Yield PPP Loans Loans Excluding PPP 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 Total Loans Outstanding ($ in millions) Disciplined Approach to Lending in a Strong Florida Economy Loans outstanding, excluding PPP, increased $161 million, or 10% annualized. Total loan originations were $555 million, including $340 million in commercial originations. The commercial loan pipeline increased 11% to $530 million. Loan yields excluding PPP and accretion on acquired loans expanded to 4.30% from 4.10%. The weighted average add-on rate for loan outstandings increased to 5.50% by the end of the third quarter. 1Total loans outstanding as of 3Q’22, 2Q’22, and 1Q’22 includes $5 million, $17 million, and $39 million in PPP loans, respectively. 1 1 1
12THIRD QUARTER 2022 EARNINGS PRESENTATION Investment Securities Performance and Composition Unrealized Loss in Securities as of September 30, 2022 (in thousands) Amortized Cost Fair Value Net Unrealized Loss Δ from 2Q’22 Available for Sale Government backed $ 5,398 $ 5,072 $ (326) $ (223) Agency mortgage backed 1,573,618 1,353,569 (220,049) (77,193) Private label MBS and CMOs 183,740 171,964 (11,776) (4,449) CLO 314,214 302,074 (12,140) (1,166) Municipal 30,167 28,055 (2,112) (959) Total Available for Sale $ 2,107,137 $ 1,860,734 $ (246,403) $ (83,990) Held to Maturity Agency mortgage backed $ 774,706 $ 645,439 $ (129,267) $ (40,652) Total Held to Maturity $ 774,706 $ 645,862 $ (128,844) $ (40,229) Total Securities $ 2,881,843 $ 2,506,596 $ (375,247) $ (124,219) ($ in m ill io ns ) $527 $639 $747 $795 $775 $1,546 $1,644 $1,707 $1,801 $1,861 1.59% 1.57% 1.68% 1.98% 2.36% HTM Securities AFS Securities Yield 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 • Portfolio yield increased 38 basis points to 2.36% from 1.98% in the prior quarter. • AFS securities ended the quarter with a net unrealized loss of $246.4 million compared to a net unrealized loss of $162.4 million at June 30, 2022, largely due to rising rates and widening spreads. • High quality portfolio consisting of 82% agency backed, with the remainder being high quality investment grade bonds. CLO portfolio is 61% AAA and 39% AA. • AFS portfolio duration of 3.48. • Portfolio yield increased 38 basis points to 2.36% from 1.98% in the prior quarter. • AFS securities ended the quarter with a net unrealized loss of $246.4 million compared to an unrealized loss of $9.3 million at December 31, 2021, largely due to the rise in short and medium term interest rates during the first quarter. • High quality portfolio consisting of 82% agency backed, with the remainder being high quality investment grade bonds. CLO portfolio is 61% AAA and 39% AA. • AFS portfolio duration of 3.19.
13THIRD QUARTER 2022 EARNINGS PRESENTATION 65% Deposits Outstanding ($ in millions) $8,334 $8,068 $9,244 $9,189 $8,684 $4,932 $4,966 $5,776 $5,862 $5,618 $2,785 $2,547 $2,937 $2,859 $2,639$617 $555 $531 $468 $427 0.25% 0.25% 0.50% 1.75% 3.25% 0.07% 0.06% 0.06% 0.06% 0.09% Transaction Accounts Savings & Money Market Time Deposits Fed Funds Cost of Deposits 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 Strong Deposit Franchise Supported by Attractive Markets Continued focus on organic growth and relationship- based funding, in combination with our innovative analytics platform, supports a well-diversified, low-cost deposit portfolio. Transaction accounts represent 65% of overall deposit funding. Cost of deposits remained low, increasing only three basis points to nine basis points. During the quarter, deposit outstandings declined $424 million, with $100 million moving to AUM, and much of the remainder associated with public funds, brokered and time deposits.
14THIRD QUARTER 2022 EARNINGS PRESENTATION Allowance for Credit Losses and Purchase Discount ($ in thousands) Loans Outstanding Allowance for Credit Losses % of Category Purchase Discount % of Category Construction and Land Development $ 361,913 $ 3,345 0.92 % $ 375 0.10 % Owner Occupied Commercial Real Estate 1,253,459 5,194 0.41 4,076 0.33 Commercial Real Estate 2,107,614 39,462 1.87 10,701 0.51 Residential Real Estate 1,599,765 26,037 1.63 308 0.02 Commercial & Financial 1,182,384 15,701 1.33 3,570 0.30 Consumer 180,416 5,590 3.10 56 0.03 Total Excluding PPP $ 6,685,551 $ 95,329 1.43 % $ 19,086 0.29 % Paycheck Protection Program $ 5,294 $ — — % $ — — % Total $ 6,690,845 $ 95,329 1.42 % $ 19,086 0.29 % The total allowance for credit losses of $95.3 million as of September 30, 2022 represents management’s estimate of lifetime expected credit losses. The remaining unrecognized discount on acquired loans of $19.1 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 $3.5 million is reflected within Other Liabilities.
15THIRD QUARTER 2022 EARNINGS PRESENTATION Net Charge-Offs (Recoveries) $1,432 $570 $79 $103 NCO NCO/Total Loans 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 ($ in thousands) Nonperforming Loans $32,612 $30,598 $26,209 $26,442 $21,464 0.55% 0.52% 0.41% 0.40% 0.32% NPL NPL/Total Loans 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 $87,823 $83,315 $89,838 $90,769 $95,329 1.54% 1.43% 1.40% 1.39% 1.43% 1.49% 1.41% 1.39% 1.39% 1.42% ACL ACL/Total Loans Excluding PPP ACL/Total Loans 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 10% 9% 8% 7% 7% 4% 4% 4% 2% 1% Classified Special Mention 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 Allowance for Credit Losses Criticized Loans as a % of Risk-Based Capital 0.10% 0.10% 0.04% Continued Strong Asset Quality Trends ($124)
16THIRD QUARTER 2022 EARNINGS PRESENTATION $17.52 $17.84 $17.12 $16.66 $15.98 $22.12 $22.40 $22.15 $21.65 $20.95 Tangible Book Value Per Share Book Value Per Share 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 10.6% 11.1% 9.9% 9.7% 9.8% 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 18.6% 18.2% 17.7% 17.7% 17.5%17.7% 17.4% 16.8% 16.8% 16.5% Total Risk Based Capital Tier 1 Ratio 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 9.6% 14.3% 8.0% 13.0% 11.5%11.7% 14.1% 10.0% 14.0% 12.5% GAAP - ROTCE Adjusted - ROTCE 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 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 Strong Capital Supporting a Fortress Balance Sheet
17THIRD QUARTER 2022 EARNINGS PRESENTATION $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 $17.84 $17.12 $16.66 $15.98 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 4Q'21 1Q'22 2Q'22 3Q'22 • The decline in tangible book value per share during the first nine months of 2022 was primarily attributed to the decrease in fair value of debt securities driven by the change in the rate environment. Excluding the year to date decrease in fair value of debt securities, tangible book value per share at September 30, 2022, would have been $18.92, or an increase of 8% year-over-year. • 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. • Increased dividend from $0.13 to $0.17 per share in second quarter of 2022, reflecting success of balanced growth strategy and strong balance sheet. Long Term Growth in Shareholder Value Compound annual growth rate of 8% in tangible book value per share since the first quarter of 2017. Excluding the 2022 year to date decline in fair value of debt securities driven by the interest rate environment, tangible book value per share has grown at a compound annual growth rate of 11% since the first quarter of 2017.
Tracey L. Dexter Executive Vice President Chief Financial Officer (772) 403-0461 INVESTOR RELATIONS NASDAQ: SBCF
19THIRD QUARTER 2022 EARNINGS PRESENTATION Appendix
20THIRD QUARTER 2022 EARNINGS PRESENTATION Low Historical Deposit Beta Coupled with Favorable Deposit Composition 0.25% 0.29% 0.50% 0.50% 0.50% 0.55% 1.00% 1.04% 1.25% 1.30% 1.53% 1.80% 2.01% 2.28% 2.50% 2.50% 0.13% 0.12% 0.13% 0.10% 0.15% 0.14% 0.14% 0.17% 0.22% 0.29% 0.33% 0.39% 0.43% 0.54% 0.67% 0.76% Fed Funds Rate Cost of Deposits 3Q’15 4Q’15 1Q’16 2Q’16 3Q’16 4Q’16 1Q’17 2Q’17 3Q’17 4Q’17 1Q’18 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 31.7% 40.6%10.5% 10.8%11.2% 4.0% 22.5% 25.0% 24.1% 19.6% Noninterest demand Savings Time Deposits Interest-bearing demand Money Market September 30, 2015 September 30, 2022 1Beta is calculated as the change in deposit costs divided by the change in Fed Funds Rate. Total 3Q15 to 2Q19 Deposit Beta1 equal to 28% Favorable deposit composition compared to prior start of rate cycle. Deposit Mix
21THIRD QUARTER 2022 EARNINGS PRESENTATION Interest Rate Sensitivity Change in Interest Rates 1-12 months 13-24 months +2.00% 9.6 % 13.4 % +1.00% 4.8 % 6.6 % Current — % — % -1.00% (5.9) % (9.2) % % Change in Projected Baseline Net Interest Income The table presents the projected impact of a change in interest rates on the projected baseline net interest income for the 12 and 24 month periods beginning on October 1, 2022, holding all balances on the balance sheet static. This change in interest rates assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve.
22THIRD QUARTER 2022 EARNINGS PRESENTATION Quarterly Trend Nine Months Ended (Amounts in thousands) 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 3Q'22 3Q'21 Commercial pipeline at period end $ 530,430 $ 476,693 $ 619,547 $ 397,822 $ 368,907 $ 530,430 $ 368,907 Commercial loan originations1 340,438 461,855 372,986 408,948 331,618 1,175,279 728,899 Residential pipeline-saleable at period end 6,563 14,700 25,745 30,102 42,847 6,563 42,847 Residential loans-sold 16,381 42,666 51,222 69,224 95,136 110,269 353,572 Residential pipeline-portfolio at period end 60,684 53,092 87,950 25,589 35,387 60,684 35,387 Residential loans-retained2 69,272 102,996 175,457 49,065 250,820 347,725 415,566 Consumer pipeline at period end 43,732 75,532 61,613 29,739 30,980 43,732 30,980 Consumer originations 128,601 126,479 79,010 72,626 66,400 334,090 176,847 PPP originations — — — — — — 256,007 Total Pipelines at Period End $ 641,409 $ 620,017 $ 794,855 $ 483,252 $ 478,121 $ 641,409 $ 478,121 Total Originations $ 554,692 $ 733,996 $ 678,675 $ 599,863 $ 743,974 $ 1,967,363 $ 1,930,891 1Includes purchases of $19.3 million in 4Q’21 and $17.1 million in 3Q’21. 2Includes purchases of $111.3 million in 1Q’22, $180.8 million in 3Q'21 and $38.4 million in 2Q’21. Loan Production and Pipeline Trend
23THIRD QUARTER 2022 EARNINGS PRESENTATION Transaction Value • $398 million fully diluted, $26.93 per PFHD common share1 Consideration • PFHD shareholders will receive 0.8909 shares of Seacoast common stock per share • Options are rolled over into Seacoast options based on an exchange ratio of 0.8909 Closing • Expected to close early first quarter 2023 Required Approvals • Regulatory authorities • PFHD shareholders Additional Details and Assumptions • PFHD shareholders to own approximately 15.3% of Seacoast following the transaction • 40%+ cost savings (61% realized in 2023; 100% realized in 2024 and thereafter) • Estimated core deposit intangibles of 2.00% amortized using straight-line method over 6 years • 2.01% / $40.2 million gross pre-tax credit mark on the loan portfolio • Mark-down on AFS securities portfolio of $14.2 million (which is inclusive of AOCI on PFHD’s balance sheet at June 30, 2022) • Other rate and fair value marks of a combined net ~$4.0 million of pre-tax purchase accounting marks representing a positive impact on equity at closing 1Based on Seacoast closing price of $30.23 on September 30, 2022 2023 Acquisition of Professional Holding Corp. (NASDAQ:PFHD)
24THIRD QUARTER 2022 EARNINGS PRESENTATION 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. Explanation of Certain Unaudited Non-GAAP Financial Measures
25THIRD QUARTER 2022 EARNINGS PRESENTATION Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 3Q'22 3Q'21 Net Income $ 29,237 $ 32,755 $ 20,588 $ 36,330 $ 22,944 $ 82,580 $ 88,073 Total noninterest income 16,103 16,964 15,373 18,706 19,028 48,440 52,021 Securities losses/(gains), net 362 300 452 379 30 1,114 199 Gain on sale of domain name (included in other income) — — — (755) — — — Total Adjustments to Noninterest Income 362 300 452 (376) 30 1,114 199 Total Adjusted Noninterest Income 16,465 17,264 15,825 18,330 19,058 49,554 52,220 Total noninterest expense 61,359 56,148 58,917 50,263 55,268 176,424 147,172 Merger related charges (2,054) (3,039) (6,692) (482) (6,281) (11,785) (7,371) Amortization of intangibles (1,446) (1,446) (1,446) (1,304) (1,306) (4,338) (3,729) Branch reductions and other expense initiatives (960) — (74) (168) (870) (1,034) (1,982) Total Adjustments to Noninterest Expense (4,460) (4,485) (8,212) (1,954) (8,457) (17,157) (13,082) Total Adjusted Noninterest Expense 56,899 51,663 50,705 48,309 46,811 159,267 134,090 Income Taxes 9,115 8,886 5,834 8,344 7,049 23,835 25,991 Tax effect of adjustments 1,222 1,213 2,196 280 2,081 4,631 3,256 Effect of change in corporate tax rate on deferred tax assets — — — 774 — — — Total Adjustments to Income Taxes 1,222 1,213 2,196 1,054 2,081 4,631 3,256 Adjusted Income Taxes 10,337 10,099 8,030 9,398 9,130 28,466 29,247 Adjusted Net Income $ 32,837 $ 36,327 $ 27,056 $ 36,854 $ 29,350 $ 96,220 $ 98,098 Earnings per diluted share, as reported $ 0.47 $ 0.53 $ 0.33 $ 0.62 $ 0.40 $ 1.33 $ 1.56 Adjusted Earnings per Diluted Share 0.53 0.59 0.44 0.62 0.51 1.56 1.74 Average diluted shares outstanding 61,961 61,923 61,704 59,016 57,645 61,867 56,441 GAAP to Non-GAAP Reconciliation
26THIRD QUARTER 2022 EARNINGS PRESENTATION Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 3Q'22 3Q'21 Adjusted Noninterest Expense $ 56,899 $ 51,663 $ 50,705 $ 48,309 $ 46,811 $ 159,267 $ 134,090 Foreclosed property expense and net (loss)/gain on sale (9) 968 164 175 (66) 1,123 89 Provision for unfunded commitments (1,015) — (142) — (133) (1,157) (133) Net Adjusted Noninterest Expense $ 55,875 $ 52,631 $ 50,727 $ 48,484 $ 46,612 $ 159,233 $ 134,046 Revenue $ 104,387 $ 98,611 $ 91,895 $ 90,995 $ 90,352 $ 294,893 $ 255,757 Total Adjustments to Revenue 362 300 452 (376) 30 1,114 199 Impact of FTE adjustment 115 117 117 123 131 349 393 Adjusted Revenue on a Fully Taxable Equivalent Basis $ 104,864 $ 99,028 $ 92,464 $ 90,742 $ 90,513 $ 296,356 $ 256,349 Adjusted Efficiency Ratio 53.28 % 53.15 % 54.86 % 53.43 % 51.50 % 53.73 % 52.29 % Net Interest Income $ 88,284 $ 81,647 $ 76,522 $ 72,289 $ 71,324 $ 246,453 $ 203,736 Impact of FTE adjustment 115 117 117 123 131 349 393 Net Interest Income including FTE adjustment $ 88,399 $ 81,764 $ 76,639 $ 72,412 $ 71,455 $ 246,802 $ 204,129 Total noninterest income 16,103 16,964 15,373 18,706 19,028 48,440 52,021 Total noninterest expense 61,359 56,148 58,917 50,263 55,268 176,424 147,172 Pre-Tax Pre-Provision Earnings $ 43,143 $ 42,580 $ 33,095 $ 40,855 $ 35,215 $ 118,818 $ 108,978 Total Adjustments to Noninterest Income 362 300 452 (376) 30 1,114 199 Total Adjustments to Noninterest Expense (5,484) (3,517) (8,190) (1,779) (8,656) (17,191) (13,126) Adjusted Pre-Tax Pre-Provision Earnings $ 48,989 $ 46,397 $ 41,737 $ 42,258 $ 43,901 $ 137,123 $ 122,303 Average Assets $ 10,585,338 $ 10,840,518 $ 10,628,516 $ 10,061,382 $ 9,753,734 $ 10,684,632 $ 9,092,958 Less average goodwill and intangible assets (305,935) (307,411) (304,321) (267,692) (254,980) (305,895) (242,820) Average Tangible Assets $ 10,279,403 $ 10,533,107 $ 10,324,195 $ 9,793,690 $ 9,498,754 $ 10,378,737 $ 8,850,138 GAAP to Non-GAAP Reconciliation
27THIRD QUARTER 2022 EARNINGS PRESENTATION Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 3Q'22 3Q'21 Return on Average Assets (ROA) 1.10 % 1.21 % 0.79 % 1.43 % 0.93 % 1.03 % 1.29 % Impact of removing average intangible assets and related amortization 0.07 0.08 0.06 0.08 0.07 0.08 0.08 Return on Average Tangible Assets (ROTA) 1.17 1.29 0.85 1.51 1.00 1.11 1.37 Impact of other adjustments for Adjusted Net Income 0.10 0.09 0.21 (0.02) 0.23 0.13 0.11 Adjusted Return on Average Tangible Assets 1.27 1.38 1.06 1.49 1.23 1.24 1.48 Average Shareholders' Equity $ 1,349,475 $ 1,350,568 $ 1,400,535 $ 1,303,686 $ 1,248,547 $ 1,366,672 $ 1,185,530 Less average goodwill and intangible assets (305,935) (307,411) (304,321) (267,692) (254,980) (305,895) (242,820) Average Tangible Equity $ 1,043,540 $ 1,043,157 $ 1,096,214 $ 1,035,994 $ 993,567 $ 1,060,777 $ 942,710 Return on Average Shareholders' Equity 8.60 % 9.73 % 5.96 % 11.06 % 7.29 % 8.08 % 9.93 % Impact of removing average intangible assets and related amortization 2.93 3.28 2.06 3.23 2.27 2.74 2.96 Return on Average Tangible Common Equity (ROTCE) 11.53 13.01 8.02 14.29 9.56 10.82 12.89 Impact of other adjustments for Adjusted Net Income 0.95 0.96 1.99 (0.18) 2.16 1.31 1.02 Adjusted Return on Average Tangible Common Equity 12.48 13.97 10.01 14.11 11.72 12.13 13.91 Loan Interest Income1 $ 74,050 $ 69,388 $ 67,198 $ 64,487 $ 64,517 $ 210,636 $ 187,347 Accretion on acquired loans (2,242) (2,720) (3,717) (3,520) (3,483) (8,679) (9,237) Interest and fees on PPP loans (320) (741) (1,523) (3,352) (5,917) (2,584) (17,930) Loan interest income excluding PPP and accretion on acquired loans $ 71,488 $ 65,927 $ 61,958 $ 57,615 $ 55,117 $ 199,373 $ 160,180 Yield on Loans1 4.45 % 4.29 % 4.30 % 4.31 % 4.49 % 4.35 % 4.40 % Impact of accretion on acquired loans (0.14) (0.16) (0.24) (0.24) (0.24) (0.18) (0.21) Impact of PPP loans (0.01) (0.03) (0.06) (0.13) (0.22) (0.03) (0.09) Yield on loans excluding PPP and accretion on acquired loans 4.30 % 4.10 % 4.00 % 3.94 % 4.03 % 4.14 % 4.10 % 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. GAAP to Non-GAAP Reconciliation
28THIRD QUARTER 2022 EARNINGS PRESENTATION Quarterly Trend Six Months Ended (Amounts in thousands except per share data) 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 3Q'22 3Q'21 Net Interest income1 $ 88,399 $ 81,764 $ 76,639 $ 72,412 $ 71,455 $ 246,802 $ 204,129 Accretion on acquired loans (2,242) (2,720) (3,717) (3,520) (3,483) (8,679) (9,237) Interest and fees on PPP loans (320) (741) (1,523) (3,352) (5,917) (2,584) (17,930) Net interest income excluding PPP and accretion on acquired loans $ 85,837 $ 78,303 $ 71,399 $ 65,540 $ 62,055 $ 235,539 $ 176,962 Net Interest Margin1 3.67 % 3.38 % 3.25 % 3.16 % 3.22 % 3.44 % 3.32 % Impact of accretion on acquired loans (0.09) (0.12) (0.15) (0.15) (0.15) (0.12) (0.15) Impact of PPP loans (0.01) (0.02) (0.05) (0.10) (0.18) (0.03) (0.12) Net interest margin excluding PPP and accretion on acquired loans 3.57 % 3.24 % 3.05 % 2.91 % 2.89 % 3.29 % 3.05 % Security Interest Income1 $ 15,827 $ 12,562 $ 10,218 $ 8,750 $ 7,956 $ 38,607 $ 21,186 Tax equivalent adjustment on securities (35) (36) (37) (37) (38) (108) (116) Security interest income excluding tax equivalent adjustment $ 15,792 $ 12,526 $ 10,181 $ 8,713 $ 7,918 $ 38,499 $ 21,070 Loan Interest Income1 $ 74,050 $ 69,388 $ 67,198 $ 64,487 $ 64,517 $ 210,636 $ 187,347 Tax equivalent adjustment on loans (80) (81) (80) (86) (93) (241) (277) Loan interest income excluding tax equivalent adjustment $ 73,970 $ 69,307 $ 67,118 $ 64,401 $ 64,424 $ 210,395 $ 187,070 Net Interest Income1 $ 88,399 $ 81,764 $ 76,639 $ 72,412 $ 71,455 $ 246,802 $ 204,129 Tax equivalent adjustment on securities (35) (36) (37) (37) (38) (108) (116) Tax equivalent adjustment on loans (80) (81) (80) (86) (93) (241) (277) Net interest income excluding tax equivalent adjustment $ 88,284 $ 81,647 $ 76,522 $ 72,289 $ 71,324 $ 246,453 $ 203,736 1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost. GAAP to Non-GAAP Reconciliation