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Seacoast Reports Record Fourth Quarter and Full Year 2019 Results

Full Year 2019 Net Income Increased 47% to $98.7 million

Continued Improvements in Operating Leverage and Record Loan Originations
Highlight 4Q Results

STUART, Fla., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida (“Seacoast” or the "Company”) (SBCF) today reported fourth quarter 2019 net income of $27.2 million, or $0.52 per diluted share, an increase of 70%, or $11.2 million, year-over-year. For the full year 2019, net income was $98.7 million, or $1.90 per share, an increase of 47% year-over-year. Seacoast reported fourth quarter 2019 adjusted net income1 of $26.8 million, or $0.52 per diluted share, an increase of 12%, or $2.9 million, compared to the fourth quarter of 2018. For the full year 2019, adjusted net income1 was $104.6 million, or $2.01 per share, an increase of 32% year-over-year.

For the fourth quarter of 2019, return on average tangible assets was 1.66%, return on average tangible shareholders’ equity was 15.0%, and the efficiency ratio was 48.4%, compared to 1.05%, 10.9%, and 65.8%, respectively, in the fourth quarter of 2018. For the year ended December 31, 2019, return on average tangible assets was 1.56%, return on average tangible shareholders' equity was 14.7% and the efficiency ratio was 51.7% compared to 1.20%, 14.1% and 60.0% for the year ended December 31, 2018.

Adjusted return on average tangible assets1 was 1.57%, adjusted return on average tangible shareholders’ equity1 was 14.2%, and the adjusted efficiency ratio1 was 47.5% in the fourth quarter of 2019, compared to 1.49%, 15.4%, and 54.2%, respectively, in the fourth quarter of 2018. For the year ended December 31, 2019, adjusted return on average tangible assets1 was 1.58%, adjusted return on average tangible shareholders' equity1 was 14.9% and the adjusted efficiency ratio1 was 50.9%, compared to 1.35%, 14.1% and 56.1% for the year ended December 31, 2018.

Dennis S. Hudson, III, Seacoast’s Chairman and CEO, said, "The Seacoast team closed another record year with net income of $27.2 million for the fourth quarter and $98.7 million for the full year 2019. We continue to generate disciplined growth as reflected in record originations for the quarter of $587 million, while maintaining our strict underwriting guidelines and delivering continued improvements in operating leverage."

Hudson added, "During the quarter, we announced the upcoming acquisition of First Bank of the Palm Beaches. This acquisition builds upon our two previous Palm Beach County acquisitions and strengthens our presence in Florida's largest and the nation's seventh largest MSA. We are also excited to announce the acquisition of Fourth Street Banking Company, the holding company for Freedom Bank of St. Petersburg. This is an exceptional addition to our two previous acquisitions in the state's second largest MSA. The combination of this acquisition and the First Bank transaction will provide earnings per share accretion of more than 5% to 2021 and has minimal up front dilution to tangible book value per share, earned back in less than two years."

Charles M. Shaffer, Seacoast’s Chief Operating Officer and Chief Financial Officer, said, “We delivered another quarter of consistent growth in tangible book value per share, ending the period at $14.76, up 20% over the prior year. During the fourth quarter, net interest margin declined only 1 basis point excluding the impact of accretion of purchase discounts on acquired loans, demonstrating the exceptional quality of our balance sheet and customer franchise. This balance sheet is fortified with a robust capital base, strong asset quality and a prudent liquidity position. As the banking cycle continues to mature, Seacoast is committed to maintaining its fortress balance sheet, built on strong capital and strict credit underwriting.”

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.

Fourth Quarter 2019 Financial Highlights

Income Statement

  • Net income was $27.2 million, or $0.52 per diluted share, compared to $25.6 million, or $0.49, for the prior quarter and $16.0 million, or $0.31, for the fourth quarter of 2018. For the year ended December 31, 2019, net income was $98.7 million, or $1.90 per diluted share, compared to $67.3 million, or $1.38, for the year ended December 31, 2018. Adjusted net income1 was $26.8 million, or $0.52 per diluted share, compared to $27.7 million, or $0.53, for the prior quarter and $23.9 million, or $0.47, for the fourth quarter of 2018. For the year ended December 31, 2019, adjusted net income1 was $104.6 million, or $2.01 per diluted share, compared to $79.1 million, or $1.62, for the year ended December 31, 2018.

  • Net revenues were $78.1 million, an increase of $3.2 million, or 4%, compared to the prior quarter, and an increase of $5.4 million, or 7%, compared to the fourth quarter of 2018. For the year ended December 31, 2019, net revenues were $300.4 million, an increase of $38.8 million, or 15%, compared to the year ended December 31, 2018. Adjusted revenues1 were $75.6 million, an increase of $0.8 million, or 1%, from the prior quarter and an increase of $2.8 million, or 4%, from the fourth quarter of 2018. For the year ended December 31, 2019, adjusted revenues1 were $298.2 million, an increase of $36.3 million, or 14%, compared to the year ended December 31, 2018.

  • Net interest income totaled $61.8 million, an increase of $0.8 million, or 1%, from the prior quarter and an increase of $1.8 million, or 3%, from the fourth quarter of 2018. For the year ended December 31, 2019, net interest income was $243.6 million, an increase of $32.1 million, or 15%, compared to the year ended December 31, 2018.

  • Net interest margin was 3.84% in the fourth quarter of 2019, 3.89% in the third quarter of 2019 and 4.00% in the fourth quarter of 2018. Quarter-over-quarter, the yield on loans contracted 17 basis points, the yield on securities contracted 12 basis points, and the cost of deposits decreased 12 basis points. The impact on net interest margin from accretion of purchase discounts on acquired loans was 21 basis points in the fourth quarter of 2019, compared to 25 basis points in the prior quarter and 27 basis points in the fourth quarter of 2018. Excluding the impact of accretion, the net interest margin decreased only 1 basis point from the prior quarter and the yield on loans contracted 13 basis points. Decreases in the yield on both loans and securities reflect the impact of a lower interest rate environment, affecting variable-rate portfolios and resulting in lower add-on rates for new loans originated and securities purchased.

  • Noninterest income totaled $16.4 million, an increase of $2.4 million, or 17%, compared to the prior quarter and an increase of $3.7 million, or 29%, from the fourth quarter of 2018. For the year ended December 31, 2019, noninterest income was $56.7 million, an increase of $6.7 million, or 13%, compared to the year ended December 31, 2018. Changes in noninterest income consisted of the following:

    • After a record third quarter boosted by refinance activity, mortgage banking fees decreased $0.6 million in the fourth quarter to $1.5 million. For the full year, mortgage banking fees increased $1.8 million, or 39%, to $6.5 million compared to the prior year, reflecting our strategic focus on generating saleable volume.
    • Interchange income increased $0.2 million, or 6%, in the fourth quarter, and $1.1 million, or 9%, for the full year, the result of increased transaction activity across a growing customer base.
    • Lower other income in the fourth quarter reflects the $1.0 million BOLI death benefit recorded in the third quarter partially offset by swap fees of $0.6 million in the fourth quarter of 2019.
    • During the quarter, securities gains of $2.5 million resulted from the opportunistic sale of $79.8 million of longer duration bonds yielding 2.8% transacted when the 10-year treasury rate declined early in the quarter.
  • The provision for loan losses was $4.8 million compared to $2.3 million in the prior quarter and $2.3 million in the fourth quarter of 2018. The increase in provision primarily reflects strong loan growth in the fourth quarter of 2019 and a modestly higher increase in net charge-offs during the fourth quarter when compared to the third quarter of 2019. Looking back over the last four quarters, net charge offs were 0.16% of average loans outstanding, in line with our expectations and reflecting continued strong asset quality trends.
  • Noninterest expense was $38.1 million, a decrease of $0.5 million, or 1%, compared to the prior quarter and a decrease of $11.4 million, or 23%, from the fourth quarter of 2018. For the year ended December 31, 2019, noninterest expense was $160.7 million, a decrease of $1.5 million, or 1%, compared to the year ended December 31, 2018. Changes from the third quarter of 2019 in noninterest expense consisted of the following:

    • Salaries and benefits decreased $1.0 million on a combined basis, the result of lower incentive accruals and our continued proven success at focusing on cost control across the franchise.
    • Legal and professional fees increased $0.4 million, including $0.6 million incurred in the fourth quarter for merger related activities.
    • Other expenses increased $0.6 million, including increases of $0.3 million in lending-related costs to support increased production and $0.2 million in recruiting and supporting the onboarding of new sales talent. For the full year, other expenses are down $2.0 million compared to 2018, reflecting our continued focus on efficiency and streamlining operations.
    • During the third quarter of 2019, the FDIC announced the achievement of their target deposit insurance reserve ratio, resulting in our ability to offset FDIC assessments with previously awarded credits. The Company has remaining credits of $0.7 million, which will be applied to future assessments if the FDIC’s reserve ratio remains above the target threshold.
  • Seacoast recorded $8.1 million in income tax expense in the fourth quarter of 2019, compared to $8.5 million in the prior quarter and $4.9 million in the fourth quarter of 2018. The prior quarter included net additional income tax expense of $0.7 million resulting from the change in the Florida corporate income tax rate.

  • Year to date adjusted revenues1 increased 14% compared to prior year while adjusted noninterest expense1 increased 3%, generating 11% operating leverage.

  • The efficiency ratio was 48.4% compared to 48.6% in the prior quarter and 65.8% in the fourth quarter of 2018. The adjusted efficiency ratio1 was 47.5% compared to 49.0% in the prior quarter and 54.2% in the fourth quarter of 2018.

Balance Sheet

  • At December 31, 2019, the Company had total assets of $7.1 billion and total shareholders' equity of $985.6 million. Book value per share was $19.13 and tangible book value per share was $14.76, compared to $18.70 and $14.30, respectively, at September 30, 2019 and $16.83 and $12.33, respectively, at December 31, 2018. Year-over-year, tangible book value per share increased 20%.

  • Debt Securities totaled $1.2 billion at December 31, 2019, an increase of $13.8 million compared to September 30, 2019 and a decrease of $15.6 million from December 31, 2018. During the quarter, securities gains of $2.5 million resulted from the opportunistic sale of $79.8 million of longer duration bonds yielding 2.8% transacted when the 10-year treasury rate declined early in the quarter.

  • Loans totaled $5.2 billion at December 31, 2019, an increase of $212.1 million, or 4%, compared to September 30, 2019, and an increase of $373.2 million, or 8%, from December 31, 2018. Changes in total loans consisted of the following:

    • New loan originations of $587 million, compared to $488 million in the prior quarter, contributed to net loan growth in the quarter of 17% on an annualized basis. Excluding the $99.0 million residential mortgage portfolio purchased during the quarter, net loan growth was 9% on an annualized basis. Loans outstanding have grown 8% year-over-year.
    • Commercial originations during the fourth quarter of 2019 were $247.0 million, a decrease of $35.2 million, or 12%, compared to the third quarter of 2019. Excluding the purchase of a $52.1 million commercial real estate loan portfolio in the third quarter of 2019, commercial originations increased in the fourth quarter $16.8 million, or 7%. Compared to the fourth quarter of 2018, commercial originations increased $87.6 million, or 55%.
    • Residential loan originations were $225.1 million in the fourth quarter of 2019, compared to $103.1 million in the third quarter of 2019 and $104.7 million in the fourth quarter of 2018. Originations in the fourth quarter of 2019 include the opportunistic purchase of a $99.0 million residential mortgage portfolio. Excluding that purchase, residential loan originations increased $28.8 million, or 30%, compared to the third quarter of 2019, and $21.3 million, or 20%, compared to the fourth quarter of 2018.
    • Consumer and small business originations for the fourth quarter of 2019 were $115.0 million, an increase of 12% compared to the third quarter of 2019 and an increase of 1% compared to the fourth quarter of 2018.
    • The Company continues to prudently manage commercial real estate exposure. Construction and land development and commercial real estate loans remain well below regulatory guidance at 40% and 204% of total bank-level risk based capital, respectively, compared to 42% and 204%, respectively, in the third quarter of 2019. On a consolidated basis, construction and land development and commercial real estate loans represent 38% and 191%, respectively, of total consolidated risk based capital.
    • The funded balances of our top 10 and top 20 relationships represented 21% and 39%, respectively, of total consolidated risk based capital, compared to 22% and 37% in the fourth quarter of 2018 and 34% and 54% in the fourth quarter of 2016. Our average commercial loan size is $365,000.

  • Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $339.2 million at December 31, 2019.

    • Commercial pipelines were $256.0 million, an increase of 56% compared to December 31, 2018. The increase year-over-year reflects the successful addition of talent to our commercial banking team and better execution across the franchise.
    • Residential saleable pipelines were $19.0 million, an increase of 40% compared to December 31, 2018. The year-over-year increase reflects our continued strategic focus of generating saleable volume and the addition of talent across the franchise.
    • Retained residential pipelines were $19.1 million, a decrease of 37% compared to December 31, 2018. The year-over-year decrease reflects our continued strategic focus on generating saleable volume.
    • Consumer and small business pipelines were $45.1 million, a decrease of 16% compared to December 31, 2018.                                                                            
  • Total deposits were $5.6 billion as of December 31, 2019, a decrease of $88.4 million, or 2%, sequentially and an increase of $407.5 million, or 8%, from the prior year.
    • Overall cost of deposits declined to 61 basis points in the fourth quarter of 2019 from 73 basis points in the prior quarter, reflecting the impact of interest rate cuts in the second half of 2019 by the Federal Reserve. By keeping a targeted focus on customer acquisition and a relationship-driven strategy, the Company has successfully maintained discipline in deposit pricing.
    • Total transaction accounts increased 7% year-over-year, reflecting continued strong growth in core customer balances, and represent 50% of overall deposit funding.
    • Interest-bearing deposits (interest-bearing demand, savings and money market deposits) increased year-over-year $127.5 million, or 5%, to $2.8 billion, noninterest bearing demand deposits increased $20.9 million, or 1%, to $1.6 billion, and CDs (excluding brokered) increased $6.9 million, or 1%, to $712.2 million.
  • Fourth quarter return on average tangible assets (ROTA) was 1.66%, compared to 1.61% in the prior quarter and 1.05% in the fourth quarter of 2018. Adjusted ROTA1 was 1.57% compared to 1.67% in the prior quarter and 1.49% in the fourth quarter of 2018. The decline in adjusted ROTA1 in the current quarter reflects the impact of higher provision expense and substantial loan growth, partially offset by higher net interest income and lower noninterest expense.

Capital

  • Fourth quarter return on average tangible common equity (ROTCE) was 15.0%, compared to 14.7% in the prior quarter and 10.9% in the fourth quarter of 2018. Adjusted ROTCE1 was 14.2% compared to 15.3% in the prior quarter and 15.4% in the fourth quarter of 2018. The decline in adjusted ROTCE1 in the fourth quarter reflects the impact of a robust growing capital base.

  • The tier 1 capital ratio was 15.0%, total capital ratio was 15.7% and the tier 1 leverage ratio was 12.2% at December 31, 2019.

  • Tangible common equity to tangible assets was 11.1% at December 31, 2019, compared to 11.1% at September 30, 2019 and 9.7% at December 31, 2018.

Asset Quality

  • Nonperforming loans to total loans outstanding was 0.52% at December 31, 2019, 0.52% at September 30, 2019, and 0.55% at December 31, 2018.

  • Nonperforming assets to total assets was 0.55% at December 31, 2019, 0.58% at September 30, 2019 and 0.58% at December 31, 2018.

  • The ratio of allowance for loan losses to total loans was 0.68% at December 31, 2019, 0.67% at September 30, 2019, and 0.67% at December 31, 2018. The ratio of allowance for loan losses to non-acquired loans was 0.80% at December 31, 2019, 0.84% at September 30, 2019, and 0.89% at December 31, 2018.

  • Net charge-offs were $3.2 million, or 0.25%, of average loans for the fourth quarter of 2019 compared to $2.1 million, or 0.17%, of average loans in the third quarter of 2019 and $3.7 million, or 0.32% of average loans in the fourth quarter of 2018. Net charge-offs for the four most recent quarters averaged 0.16%, in line with our expectations for full year 2019.


FINANCIAL HIGHLIGHTS              
(Amounts in thousands except per share data) (Unaudited)
  Quarterly Trends
                   
  4Q'19   3Q'19   2Q'19   1Q'19   4Q'18
Selected Balance Sheet Data:                  
Total Assets $ 7,108,511     $ 6,890,645     $ 6,824,886     $ 6,783,389     $ 6,747,659  
Gross Loans 5,198,404     4,986,289     4,888,139     4,828,441     4,825,214  
Total Deposits 5,584,753     5,673,141     5,541,209     5,605,578     5,177,240  
                   
Performance Measures:                  
Net Income $ 27,176     $ 25,605     $ 23,253     $ 22,705     $ 15,962  
Net Interest Margin 3.84 %   3.89 %   3.94 %   4.02 %   4.00 %
Average Diluted Shares Outstanding 52,081     51,935     51,952     52,039     51,237  
Diluted Earnings Per Share (EPS) $ 0.52     $ 0.49     $ 0.45     $ 0.44     $ 0.31  
Return on (annualized):                  
Average Assets (ROA) 1.54 %   1.49 %   1.38 %   1.36 %   0.96 %
Average Tangible Assets (ROTA) 1.66     1.61     1.50     1.48     1.05  
Average Tangible Common Equity (ROTCE) 14.95     14.73     14.30     14.86     10.94  
Efficiency Ratio 48.36     48.62     53.48     56.55     65.76  
                   
Adjusted Operating Measures1:                  
Adjusted Net Income $ 26,837     $ 27,731     $ 25,818     $ 24,205     $ 23,893  
Adjusted Diluted EPS 0.52     0.53     0.50     0.47     0.47  
Adjusted ROTA 1.57 %   1.67 %   1.59 %   1.50 %   1.49 %
Adjusted ROTCE 14.19     15.30     15.17     15.11     15.44  
Adjusted Efficiency Ratio 47.52     48.96     51.44     55.81     54.19  
Adjusted Noninterest Expense as a
Percent of Average Tangible Assets
2.11     2.22     2.34     2.55     2.46  
                   
Other Data:                  
Market capitalization2 $ 1,574,775     $ 1,303,010     $ 1,309,158     $ 1,354,759     $ 1,336,415  
Full-time equivalent employees 867     867     852     902     902  
Number of ATMs 78     80     81     84     87  
Full service banking offices 48     48     49     50     51  
Registered online users 109,684     107,241     104,017     102,274     99,415  
Registered mobile devices 99,361     96,384     92,281     87,844     83,151  
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP
2Common shares outstanding multiplied by closing bid price on last day of each period
 

Vision 2020

Seacoast remains confident in the Company's ability to achieve Vision 2020 targets announced in February 2017.

    Vision 2020 Targets  
  Return on Tangible Assets 1.30% +  
  Return on Tangible Common Equity 16% +  
  Efficiency Ratio Below 50%  

Since announcing Vision 2020 targets in February 2017, the Company has achieved a compounded annual growth rate in tangible book value per share of 13%, steadily building shareholder value.

Fourth Quarter and Full Year 2019 Operating Highlights

Modernizing How Seacoast Sells

  • In 2019, interchange income increased by $1.1 million, or 9%, compared to the prior year as Seacoast’s debit card program surpassed $1 billion in retail sales. The Company’s debit card program consistently performs in the top quartile of Visa partner banks of similar size.

  • Seacoast Wealth Management added approximately $140 million in new assets under management in 2019, growing 27% year-over-year. Growth in assets under management, industry leading products and investments in sales and support teams throughout the footprint resulted in a 7% increase year-over-year in wealth related revenue.

  • Seacoast has partnered with a leading consumer insights firm to capture and analyze feedback from customers. Program implementation and launch were completed in the third quarter of 2019, with the objective of identifying additional customer opportunities.

Lowering Cost to Serve

  • Seacoast consolidated three banking center locations in 2019, achieving the Vision 2020 objective of reducing the footprint by 20% to meet evolving customer needs. At December 31, 2019, deposits per banking center exceeded $116 million compared to $102 million at December 31, 2018. 

Driving Improvements to Operations

  • In 2019, Seacoast's continued focus on efficiency and streamlining operations improved adjusted noninterest expenses1 as a percent of average tangible assets to 2.11% in the fourth quarter compared to 2.46% a year ago.

  • Earlier this year, Seacoast further enhanced the interactive voice response (IVR) system in the Florida-based Customer Support Center. The system provides customers with secure, self-serve options and expedites call routing processes. During the fourth quarter of 2019, more than 215,000 routine customer service calls were serviced solely by the IVR system. This represented 71% of total customer service calls received. This investment should continue to provide added scalability and elevate the customer experience in 2020.

  • Late in 2018, Seacoast launched a large-scale initiative to implement a fully digital loan origination platform across all business banking units. In the fourth quarter of 2019, this platform enabled record loan originations in the commercial banking team. The Company recognized $350,000 in annualized expense reductions as a result of this platform implementation. This investment should lead to further gains in operational efficiency and banker productivity in 2020 and beyond.

Scaling and Evolving Seacoast's Culture

  • Seacoast's balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit shareholders and provide new opportunities for associates. The pending acquisitions of First Bank of the Palm Beaches and Fourth Street Banking Company, subject to shareholder and regulatory approvals, will add experienced bankers in two growing markets and will further support the Company's sustainable and profitable growth.

OTHER INFORMATION

Conference Call Information
Seacoast will host a conference call on January 24, 2020 at 10:00 a.m. (Eastern Time) to discuss the fourth quarter and full year 2019 earnings results and business trends. Investors may call in (toll-free) by dialing (888) 517-2513 (passcode: 7556 513; host: Dennis S. Hudson). 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 of January 24, 2020 by dialing (888) 843-7419 (domestic) and using passcode: 7556 513#.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon of January 24, 2020, 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 (SBCF)
Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $7.1 billion in assets and $5.6 billion in deposits as of December 31, 2019. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 48 traditional branches of its locally-branded, wholly-owned subsidiary bank, Seacoast Bank. Offices stretch from Fort Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties. More information about the Company is available at www.SeacoastBanking.com.

Additional Information
Seacoast has filed a registration statement on Form S-4 with the United States Securities and Exchange Commission (the “SEC”) in connection with the proposed merger of First Bank of the Palm Beaches (“First Bank”) with and into Seacoast Bank and will file a registration statement on Form S-4 with the SEC in connection with the proposed merger of Fourth Street Banking Company (“Fourth Street”) with and into Seacoast and Freedom Bank with and into Seacoast Bank. The registration statement in connection with the First Bank merger includes a proxy statement of First Bank and a prospectus of Seacoast and the registration statement in connection with the Fourth Street merger will include a proxy statement of Fourth Street and a prospectus of Seacoast. A definitive proxy statement/prospectus will be mailed to shareholders of First Bank and Fourth Street.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.  WE URGE INVESTORS TO READ THE PROXY STATEMENTS/PROSPECTUSES AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGERS OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENTS/PROSPECTUSES BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Investors may obtain (when available) these documents free of charge at the SEC’s Web site (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.

First Bank and Fourth Street, their directors, and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed mergers of First Bank with and into Seacoast Bank and Fourth Street with and into Seacoast. Information regarding the participants in the proxy solicitation of First Bank and a description of their 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. Information regarding the participants in the proxy solicitation of Fourth Street and a description of their direct and indirect interests, by security holdings or otherwise, will be 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 our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that we have acquired, or expect to acquire, including First Bank, as well as statements with respect to Seacoast's objectives, strategic plans, including Vision 2020, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.

All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may", "will", "anticipate", "assume", "should", "support", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "further", "plan", "point to", "project", "could", "intend", "target" or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality; 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; changes in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; uncertainty related to the impact of LIBOR calculations on securities and loans; changes in borrower credit risks and payment behaviors; changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry; our concentration in commercial real estate loans; the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of our investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire desirable financial institutions; changes in technology or products that may be more difficult, costly, or less effective than anticipated; our ability to identify and address increased cybersecurity risks; inability of our risk management framework to manage risks associated with our business; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms; reduction in or the termination of our ability to use the mobile-based platform that is critical to our business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters or other catastrophic events that may affect general economic conditions; unexpected outcomes of, and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.

The risks relating to the proposed First Bank and Fourth Street mergers include, without limitation: the timing to consummate the proposed mergers; the risk that a condition to closing of the proposed mergers may not be satisfied; the risk that a regulatory approval that may be required for the proposed mergers is not obtained or is obtained subject to conditions that are not anticipated; the diversion of management time on issues related to the proposed mergers; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or 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 our annual report on Form 10-K for the year ended December 31, 2018, under "Special Cautionary Notice Regarding Forward-looking Statements" and "Risk Factors", and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at www.sec.gov.

 

FINANCIAL  HIGHLIGHTS (Unaudited)          
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES              
     
  Quarterly Trends   Twelve  Months Ended  
                             
(Amounts in thousands, except ratios and per share data) 4Q'19   3Q'19   2Q'19   1Q'19   4Q'18   4Q'19   4Q'18  
                             
Summary of Earnings                            
Net income $ 27,176     $ 25,605     $ 23,253     $ 22,705     $ 15,962     $ 98,739     $ 67,275    
Adjusted net income1 26,837     27,731     25,818     24,205     23,893     104,591     79,085    
Net interest income2 61,846     61,027     60,219     60,861     60,100     243,953     211,956    
Net interest margin2,3 3.84 %   3.89 %   3.94 %   4.02 %   4.00 %   3.92 %   3.85 %  
                             
Performance Ratios                            
Return on average assets-GAAP basis3 1.54 %   1.49 %   1.38 %   1.36 %   0.96 %   1.45 %   1.11 %  
Return on average tangible assets-GAAP basis3,4 1.66     1.61     1.50     1.48     1.05     1.56     1.20    
Adjusted return on average tangible assets1,3,4 1.57     1.67     1.59     1.50     1.49     1.58     1.35    
                             
Return on average shareholders' equity-GAAP basis3 11.04     10.73     10.23     10.47     7.65     10.63     9.08    
Return on average tangible common equity-GAAP basis3,4 14.95     14.73     14.30     14.86     10.94     14.72     12.54    
Adjusted return on average tangible common equity1,3,4 14.19     15.30     15.17     15.11     15.44     14.93     14.06    
Efficiency ratio5 48.36     48.62     53.48     56.55     65.76     51.71     59.98    
Adjusted efficiency ratio1 47.52     48.96     51.44     55.81     54.19     50.90     56.13    
Noninterest income to total revenue (excluding securities gains/losses) 18.30     19.53     18.93     17.45     17.97     18.56     19.32    
Tangible common equity to tangible assets4 11.05     11.05     10.65     10.18     9.72     11.05     9.72    
Average loan-to-deposit ratio 90.71     88.35     87.27     90.55     89.14     89.21     85.85    
End of period loan-to-deposit ratio 93.44     88.36     88.53     86.38     93.43     93.44     93.43    
                             
Per Share Data                            
Net income diluted-GAAP basis $ 0.52     $ 0.49     $ 0.45     $ 0.44     $ 0.31     $ 1.90     $ 1.38    
Net income basic-GAAP basis 0.53     0.50     0.45     0.44     0.32     1.92     1.40    
Adjusted earnings1 0.52     0.53     0.50     0.47     0.47     2.01     1.62    
                             
Book value per share common 19.13     18.70     18.08     17.44     16.83     19.13     16.83    
Tangible book value per share 14.76     14.30     13.65     12.98     12.33     14.76     12.33    
Cash dividends declared                            
                             
                             
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).      
       


CONDENSED CONSOLIDATED STATEMENTS OF INCOME   (Unaudited)              
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                  
     
  Quarterly Trends   Twelve  Months Ended  
                             
(Amounts in thousands, except per share data) 4Q'19   3Q'19   2Q'19   1Q'19   4Q'18   4Q'19   4Q'18  
                             
Interest on securities:                            
Taxable $ 8,500     $ 8,802     $ 8,933     $ 9,119     $ 9,528     $ 35,354     $ 37,860    
Nontaxable 130     131     143     151     200     555     884    
Interest and fees on loans 62,868     63,092     62,288     62,287     59,495     250,535     199,984    
Interest on federal funds sold and other investments 788     800     873     918     835     3,379     2,670    
Total Interest Income 72,286     72,825     72,237     72,475     70,058     289,823     241,398    
                             
Interest on deposits 3,589     4,334     4,825     3,873     3,140     16,621     8,763    
Interest on time certificates 5,084     6,009     5,724     4,959     3,901     21,776     11,684    
Interest on borrowed money 1,853     1,534     1,552     2,869     3,033     7,808     9,436    
Total Interest Expense 10,526     11,877     12,101     11,701     10,074     46,205     29,883    
                             
Net Interest Income 61,760     60,948     60,136     60,774     59,984     243,618     211,515    
Provision for loan losses 4,800     2,251     2,551     1,397     2,342     10,999     11,730    
Net Interest Income After Provision for Loan Losses 56,960     58,697     57,585     59,377     57,642     232,619     199,785    
                             
Noninterest income:                            
Service charges on deposit accounts 2,960     2,978     2,894     2,697     3,019     11,529     11,198    
Trust fees 1,096     1,183     1,147     1,017     1,040     4,443     4,183    
Mortgage banking fees 1,514     2,127     1,734     1,115     809     6,490     4,682    
Brokerage commissions and fees 483     449     541     436     468     1,909     1,732    
Marine finance fees 338     153     201     362     185     1,054     1,398    
Interchange income 3,387     3,206     3,405     3,401     3,198     13,399     12,335    
BOLI income 904     928     927     915     1,091     3,674     4,291    
SBA gains 576     569     691     636     519     2,472     2,474    
Other 2,579     3,197     2,503     2,266     2,810     10,545     8,352    
  13,837     14,790     14,043     12,845     13,139     55,515     50,645    
Securities gains/(losses), net 2,539     (847 )   (466 )   (9 )   (425 )   1,217     (623 )  
Total Noninterest Income 16,376     13,943     13,577     12,836     12,714     56,732     50,022    
                             
                             
Noninterest expenses:                            
Salaries and wages 17,263     18,640     19,420     18,506     22,172     73,829     71,111    
Employee benefits 3,323     2,973     3,195     4,206     3,625     13,697     12,945    
Outsourced data processing costs 3,645     3,711     3,876     3,845     5,809     15,077     16,374    
Telephone / data lines 651     603     893     811     602     2,958     2,481    
Occupancy 3,368     3,368     3,741     3,807     3,747     14,284     13,394    
Furniture and equipment 1,416     1,528     1,544     1,757     2,452     6,245     6,744    
Marketing 885     933     1,211     1,132     1,350     4,161     5,085    
Legal and professional fees 2,025     1,648     2,033     2,847     3,668     8,553     9,961    
FDIC assessments 0     56     337     488     571     881     2,195    
Amortization of intangibles 1,456     1,456     1,456     1,458     1,303     5,826     4,300    
Foreclosed property expense and net (gain)/loss on sale 3     262     (174 )   (40 )   0     51     461    
Other 4,022     3,405     3,468     4,282     4,165     15,177     17,222    
Total Noninterest Expense 38,057     38,583     41,000     43,099     49,464     160,739     162,273    
                             
Income Before Income Taxes 35,279     34,057     30,162     29,114     20,892     128,612     87,534    
Income taxes 8,103     8,452     6,909     6,409     4,930     29,873     20,259    
                             
Net Income $ 27,176     $ 25,605     $ 23,253     $ 22,705     $ 15,962     $ 98,739     $ 67,275    
                             
Per share of common stock:                            
                             
Net income diluted $ 0.52     $ 0.49     $ 0.45     $ 0.44     $ 0.31     $ 1.90     $ 1.38    
Net income basic 0.53     0.50     0.45     0.44     0.32     1.92     1.40    
Cash dividends declared                            
                             
Average diluted shares outstanding 52,081     51,935     51,952     52,039     51,237     52,029     48,748    
Average basic shares outstanding 51,517     51,473     51,446     51,359     50,523     51,449     47,969    
                             


CONDENSED CONSOLIDATED BALANCE SHEETS   (Unaudited)      
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES            
       
    December 31,   September 30,   June 30,   March 31,   December 31,  
(Amounts in thousands)   2019   2019   2019   2019   2018  
                       
Assets                      
Cash and due from banks   $ 89,843     $ 106,349     $ 97,792     $ 98,270     $ 92,242    
Interest bearing deposits with other banks   34,688     25,911     61,987     105,741     23,709    
Total Cash and Cash Equivalents   124,531     132,260     159,779     204,011     115,951    
                       
Time deposits with other banks   3,742     4,579     4,980     8,174     8,243    
                       
Debt Securities:                      
Available for sale (at fair value)   946,855     920,811     914,615     877,549     865,831    
Held to maturity (at amortized cost)   261,369     273,644     287,302     295,485     357,949    
Total Debt Securities   1,208,224     1,194,455     1,201,917     1,173,034     1,223,780    
                       
Loans held for sale   20,029     26,768     17,513     13,900     11,873    
                       
Loans   5,198,404     4,986,289     4,888,139     4,828,441     4,825,214    
Less: Allowance for loan losses   (35,154 )   (33,605 )   (33,505 )   (32,822 )   (32,423 )  
Net Loans   5,163,250     4,952,684     4,854,634     4,795,619     4,792,791    
                       
Bank premises and equipment, net   66,615     67,873     68,738     70,412     71,024    
Other real estate owned   12,390     13,593     11,043     11,921     12,802    
Goodwill   205,286     205,286     205,260     205,260     204,753    
Other intangible assets, net   20,066     21,318     22,672     23,959     25,977    
Bank owned life insurance   126,181     125,277     125,233     124,306     123,394    
Net deferred tax assets   16,457     17,168     19,353     24,647     28,954    
Other assets   141,740     129,384     133,764     128,146     128,117    
Total Assets   $ 7,108,511     $ 6,890,645     $ 6,824,886     $ 6,783,389     $ 6,747,659    
                       
Liabilities and Shareholders' Equity                      
Liabilities                      
Deposits                      
Noninterest demand   $ 1,590,493     $ 1,652,927     $ 1,669,804     $ 1,676,009     $ 1,569,602    
Interest-bearing demand   1,181,732     1,115,455     1,124,519     1,100,477     1,014,032    
Savings   519,152     528,214     519,732     508,320     493,807    
Money market   1,108,363     1,158,862     1,172,971     1,192,070     1,173,950    
Other time certificates   504,837     537,183     553,107     539,202     513,312    
Brokered time certificates   472,857     458,418     268,998     367,841     220,594    
Time certificates of more than $250,000   207,319     222,082     232,078     221,659     191,943    
Total Deposits   5,584,753     5,673,141     5,541,209     5,605,578     5,177,240    
                       
Securities sold under agreements to repurchase   86,121     70,414     82,015     148,005     214,323    
Federal Home Loan Bank borrowings   315,000     50,000     140,000     3,000     380,000    
Subordinated debt   71,085     71,014     70,944     70,874     70,804    
Other liabilities   65,913     63,398     60,479     59,508     41,025    
Total Liabilities   6,122,872     5,927,967     5,894,647     5,886,965     5,883,392    
                       
Shareholders' Equity                      
Common stock   5,151     5,148     5,146     5,141     5,136    
Additional paid in capital   786,242     784,661     782,928     780,680     778,501    
Retained earnings   195,813     168,637     143,032     119,779     97,074    
Treasury stock   (6,032 )   (6,079 )   (6,137 )   (4,959 )   (3,384 )  
    981,174     952,367     924,969     900,641     877,327    
Accumulated other comprehensive income/(loss), net   4,465     10,311     5,270     (4,217 )   (13,060 )  
Total Shareholders' Equity   985,639     962,678     930,239     896,424     864,267    
Total Liabilities & Shareholders' Equity   $ 7,108,511     $ 6,890,645     $ 6,824,886     $ 6,783,389     $ 6,747,659    
                       
Common shares outstanding   51,514     51,482     51,461     51,414     51,361    
                       


CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                
   
   
                   
(Amounts in thousands) 4Q'19   3Q'19   2Q'19   1Q'19   4Q'18
                   
Credit Analysis                  
Net charge-offs (recoveries) - non-acquired loans $ 2,930     $ 2,106     $ 1,621     $ 762     $ 3,693  
Net charge-offs (recoveries) - acquired loans 295     5     220     201     56  
Total Net Charge-offs (Recoveries) 3,225     2,111     1,841     963     3,749  
                   
TDR valuation adjustments $ 27     $ 40     $ 27     $ 35     $ 35  
                   
Net charge-offs (recoveries) to average loans - non-acquired loans 0.23 %   0.17 %   0.13 %   0.06 %   0.32 %
Net charge-offs (recoveries) to average loans - acquired loans 0.02         0.02     0.02      
Total Net Charge-offs (Recoveries) to Average Loans 0.25     0.17     0.15     0.08     0.32  
                   
Provision for loan losses - non-acquired loans $ 4,041     $ 2,241     $ 2,326     $ 1,709     $ 2,343  
Provision for (recapture of) loan losses - acquired loans 759     10     225     (312 )   (1 )
Total Provision for Loan Losses $ 4,800     $ 2,251     $ 2,551     $ 1,397     $ 2,342  
                   
Allowance for loan losses - non-acquired loans $ 34,573     $ 33,488     $ 33,393     $ 32,715     $ 31,803  
Allowance for loan losses - acquired loans 581     117     112     107     620  
Total Allowance for Loan Losses $ 35,154     $ 33,605     $ 33,505     $ 32,822     $ 32,423  
                   
Non-acquired loans at end of period $ 4,317,919     $ 4,010,299     $ 3,817,358     $ 3,667,221     $ 3,588,251  
Purchased noncredit impaired loans at end of period 867,819     962,609     1,057,200     1,147,432     1,222,529  
Purchased credit impaired loans at end of period 12,666     13,381     13,581     13,788     14,434  
Total Loans $ 5,198,404     $ 4,986,289     $ 4,888,139     $ 4,828,441     $ 4,825,214  
                   
Non-acquired loans allowance for loan losses to non-acquired loans at end of period 0.80 %   0.84 %   0.87 %   0.89 %   0.89 %
Total allowance for loan losses to total loans at end of period 0.68     0.67     0.69     0.68     0.67  
Purchase discount on acquired loans at end of period 3.83     3.76     3.76     3.80     3.86  
                   
End of Period                  
Nonperforming loans - non-acquired $ 20,990     $ 20,400     $ 15,810     $ 15,423     $ 15,783  
Nonperforming loans - acquired 5,965     5,644     6,986     6,990     10,693  
Other real estate owned - non-acquired 5,177     5,177     66     831     386  
Other real estate owned - acquired 372     1,574     1,612     1,725     3,020  
Bank branches closed included in other real estate owned 6,842     6,842     9,365     9,365     9,396  
Total Nonperforming Assets $ 39,346     $ 39,637     $ 33,839     $ 34,334     $ 39,278  
                   
Restructured loans (accruing) $ 11,100     $ 12,395     $ 14,534     $ 14,857     $ 13,346  
                   
Nonperforming loans to loans at end of period - non-acquired 0.49 %   0.51 %   0.41 %   0.42 %   0.44 %
Nonperforming loans to loans at end of period - acquired 0.68     0.58     0.65     0.60     0.86  
Total Nonperforming Loans to Loans at End of Period 0.52     0.52     0.47     0.46     0.55  
                   
Nonperforming assets to total assets - non-acquired 0.46 %   0.47 %   0.37 %   0.38 %   0.38 %
Nonperforming assets to total assets - acquired 0.09     0.11     0.13     0.13     0.20  
Total Nonperforming Assets to Total Assets 0.55     0.58     0.50     0.51     0.58  
                   
  December 31,   September 30,   June 30,   March 31,   December 31,
Loans 2019   2019   2019   2019   2018
                   
Construction and land development $ 325,113     $ 326,324     $ 379,991     $ 417,565     $ 443,568  
Commercial real estate - owner occupied 1,034,963     1,025,040     1,005,876     989,234     970,181  
Commercial real estate - non-owner occupied 1,344,008     1,285,327     1,184,409     1,173,183     1,161,885  
Residential real estate 1,507,863     1,409,946     1,400,184     1,329,166     1,324,377  
Consumer 208,205     217,366     215,932     206,414     202,881  
Commercial and financial 778,252     722,286     701,747     712,879     722,322  
Total Loans $ 5,198,404     $ 4,986,289     $ 4,888,139     $ 4,828,441     $ 4,825,214  
                   


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AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1 (Unaudited)              
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                          
                                     
                                     
  4Q'19   3Q'19   4Q'18  
  Average       Yield/   Average       Yield/   Average       Yield/  
(Amounts in thousands) Balance   Interest   Rate   Balance