Seacoast Reports Second Quarter 2020 Results

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Second Consecutive Quarter of Record Results in Mortgage Banking and Wealth Management

Well Positioned Balance Sheet with Strong Capital and Liquidity

STUART, Fla., July 23, 2020 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") (NASDAQ: SBCF) today reported net income in the second quarter of 2020 of $25.1 million, or $0.47 per diluted share, up 8% or $1.8 million year-over-year. The ratio of tangible common equity to tangible assets was 10.19%, tangible book value per share increased to $15.11 and Tier 1 capital increased to 16.4%.

For the second quarter of 2020, return on average tangible assets was 1.37%, return on average tangible shareholders' equity was 13.47%, and the efficiency ratio was 50.11%, compared to 0.11%, 0.95%, and 59.85%, respectively, in the prior quarter and 1.50%, 14.30%, and 53.48%, respectively, in the second quarter of 2019. Adjusted return on average tangible assets 1 was 1.33%, adjusted return on average tangible shareholders' equity 1 was 13.09%, and the adjusted efficiency ratio 1 was 49.81%, compared to 0.32%, 2.86%, and 53.61%, respectively, in the prior quarter and 1.59%, 15.17%, and 51.44%, respectively, in the second quarter of 2019.

Dennis S. Hudson, III, Seacoast's Chairman and CEO, said, "Maintaining support for our customers continues to be a top priority for us in this dynamic and challenging environment. Our branches remain open for drive-thru activity and lobby appointments only, and the significant majority of our non-retail associates are working effectively from home. We continue to maintain safety standards for both customers and associates, and I am grateful to the Seacoast associates for their continued dedication to serving our customers and communities in this unprecedented time."

Charles M. Shaffer, Seacoast's President and Chief Operating Officer said, "We have had a longstanding commitment to maintaining a fortress balance sheet and strong capital levels, positioning us with a solid foundation despite the uncertainty of the economic outlook. Seacoast is committed to supporting its communities while maintaining strict underwriting standards and a robust liquidity position. Our mortgage banking and wealth teams delivered another quarter of record results, and we delivered $591 million in Paycheck Protection Program funding to our business customers. We continue to grow tangible book value per share, ending the period at $15.11, up 11% over the prior year. As circumstances evolve, we will continue to manage our balance sheet carefully and will help support the economic recovery of our communities from a position of strength."

Paycheck Protection Program ("PPP") Loans

Seacoast worked with existing customers, and later with new customers, to help businesses access the Paycheck Protection Program. Through June 30, 2020, Seacoast has funded over 5,000 loans to companies totaling $591 million with an average loan size of $116,000 and a median loan size of $43,000. Fees earned by Seacoast, net of loan-specific costs, total $17 million and are deferred and recognized as an adjustment to yield over the expected life of the loans. Seacoast recognized net fees of $4.0 million and contractual interest of $1.1 million on PPP loans in the second quarter of 2020, resulting in a yield of 4.81%. There is significant uncertainty about how borrowers will seek and qualify for forgiveness, and therefore uncertainty about the expected life of these loans and the timing of recognition of the remaining $13 million in net fees.

Financial Results

Income Statement

  • Net income was $25.1 million, or $0.47 per diluted share, compared to $0.7 million, or $0.01, for the prior quarter and $23.3 million, or $0.45, for the second quarter of 2019. For the six months ended June 30, 2020, net income was $25.8 million, or $0.49 per diluted share, compared to $46.0 million, or $0.88 for the six months ended June 30, 2019. Adjusted net income 1 was $25.5 million, or $0.48 per diluted share, compared to $5.5 million, or $0.10, for the prior quarter and $25.8 million, or $0.50, for the second quarter of 2019. For the six months ended June 30, 2020, adjusted net income 1 was $30.9 million, or $0.59 per diluted share, compared to $50.0 million, or $0.96, for the six months ended June 30, 2019.

  • Net revenues were $82.3 million, an increase of $4.4 million, or 6%, compared to the prior quarter and an increase of $8.6 million, or 12%, compared to the second quarter of 2019. For the six months ended June 30, 2020, net revenues were $160.1 million, an increase of $12.8 million, or 9%, compared to the six months ended June 30, 2019. Adjusted revenues 1 were $81.0 million, an increase of $3.2 million, or 4%, from the prior quarter and an increase of $6.9 million, or 9%, from the second quarter of 2019. For the six months ended June 30, 2020, adjusted revenues 1 were $158.9 million, an increase of $11.1 million, or 8%, compared to the six months ended June 30, 2019.

  • Net interest income totaled $67.3 million, an increase of $4.1 million, or 6%, from the prior quarter and an increase of $7.1 million, or 12%, from the second quarter of 2019. For the six months ended June 30, 2020, net interest income was $130.4 million, an increase of $9.5 million, or 8%, compared to the six months ended June 30, 2019. During the second quarter of 2020, net interest income includes $5.1 million in interest and fees earned on PPP loans.

  • Net interest margin was 3.70% in the second quarter of 2020, 3.93% in the first quarter of 2020, and 3.94% in the second quarter of 2019. Compared to the first quarter of 2020, increased liquidity levels through higher cash and cash equivalent balances that position Seacoast conservatively for market uncertainty resulted in 17 basis points of margin compression. Accretion of purchase discounts on acquired loans increased net interest margin by 16 basis points in the second quarter of 2020, compared to 27 basis points in the first quarter of 2020 and 27 basis points in the second quarter of 2019, with the lower impact in the second quarter of 2020 resulting from lower levels of prepayments. The effect on net interest margin of interest and fees earned on PPP loans was 8 basis points in the second quarter of 2020. Excluding the impact of fee accretion on acquired loans and interest and fees earned on PPP loans, the yield on loans contracted 26 basis points, impacted by lower market rates. Reflecting Seacoast's continued attractive deposit franchise, the cost of deposits decreased 26 basis points to 0.31%, the result of higher deposit balances and lower rates paid on deposits.

  • Noninterest income totaled $15.0 million, an increase of $0.3 million, or 2%, compared to the prior quarter and an increase of $1.4 million, or 11%, compared to the second quarter of 2019. For the six months ended June 30, 2020, noninterest income was $29.7 million, an increase of $3.3 million, or 12%, compared to the six months ended June 30, 2019. Results for the second quarter of 2020 included the following:

    • Mortgage banking fees increased $1.4 million, or 61%, compared to the first quarter of 2020 to a record $3.6 million, reflecting continued strong demand in the residential refinance market and strength in the Florida housing market.

    • Interchange revenue declined in April but recovered to pre-pandemic levels by June, resulting in overall results consistent with the first quarter of 2020.

    • Service charges on deposits decreased $0.9 million compared to the first quarter of 2020 with lower NSF and overdraft fees resulting from higher customer deposit balances.

    • Seacoast's wealth management division reported a record-breaking quarter of new production in assets under management, with assets increasing $125.0 million in the quarter, resulting in AUM of $707.6 million. A majority of the new assets under management came late in the quarter, which should benefit revenue in future periods.

    • A decrease of $1.2 million in other income reflects the recognition of $0.9 million in revenue from SBIC investments in the first quarter of 2020 which did not recur in the second quarter of 2020, as well as fees waived to assist customers in the pandemic.

    • Gains on the sale of securities represented $1.2 million in the second quarter of 2020, compared to negligible activity in the first quarter of 2020 and losses of $0.5 million on securities sales in the second quarter of 2019. Activity in the second quarter of 2020 included prudent repositioning of investments in collateralized lending obligation ("CLO") securities, with "A" rated securities sold and replaced with "AAA" rated securities.

  • The provision for credit losses was $7.6 million compared to $29.5 million in the prior quarter and $2.6 million in the second quarter of 2019. In the first quarter of 2020, Seacoast adopted the new current expected credit losses ("CECL") methodology, which requires that the allowance for credit losses reflect an estimate of the full amount of expected credit losses in the portfolio as of the measurement date. On March 31, 2020, the ratio of allowance for credit losses to total loans was 1.61%. The estimate on June 30, 2020 which, excluding PPP loans, totals 1.76%, builds prudent additional reserves in response to ongoing economic uncertainty.

  • Noninterest expense was $42.4 million, a decrease of $5.4 million, or 11%, compared to the prior quarter and an increase of $1.4 million, or 3%, from the second quarter of 2019. For the six months ended June 30, 2020, noninterest expense was $90.2 million, an increase of $6.1 million, or 7%, compared to the six months ended June 30, 2019. Changes from the first quarter of 2020 consisted of the following:

    • Salaries and wages decreased by $3.5 million, or 15%. The first quarter of 2020 included $2.2 million in costs associated with the acquisition of First Bank of the Palm Beaches ("FBPB"), and $0.3 million in bonuses for retail associates who kept critical functions operating at full capacity through the early stages of the pandemic. In the second quarter, higher loan production driven by the PPP program resulted in higher deferrals of related salary costs, in accordance with ASC 310-20, lowering costs by $2.9 million. Offsetting increases resulted from the addition of staff from the FBPB acquisition, and temporary staffing in the customer support center to accommodate increased call volumes associated with the pandemic operating environment.

    • Employee benefits decreased by $0.9 million, or 21%, due to the seasonal impact on the first quarter of higher payroll taxes and 401(k) contributions, and lower health insurance costs in the second quarter of 2020.

    • Data processing costs decreased by $0.6 million. The first quarter of 2020 included merger-related costs of $0.8 million. In the second quarter of 2020, the Company incurred higher lending-related costs to support the administration of the PPP program.

    • Legal and professional fees reflect a decrease of $1.1 million attributed to merger-related costs incurred in the first quarter of 2020.

    • In the second quarter of 2020, the Company utilized the remainder of its previously issued FDIC small bank assessment credits to offset the current period expense. FDIC assessments expense is expected to be $0.5 million in each of the remaining quarters of 2020.

  • Seacoast recorded $7.2 million of income tax expense in the second quarter of 2020, compared to a tax benefit of $0.2 million in the prior quarter and income tax expense of $6.9 million in the second quarter of 2019. Tax expense related to stock-based compensation totaled $0.2 million in the second quarter of 2020, compared to a tax benefit of $0.3 million in the first quarter of 2020 and a tax benefit of $0.1 million in the second quarter of 2019.

  • Second quarter adjusted revenues 1 increased 4% compared to the prior quarter while adjusted noninterest expense 1 decreased 3%, generating 7% operating leverage.

  • The ratio of adjusted noninterest expense 1 to average tangible assets was 2.13% in the second quarter of 2020, compared to 2.44% in the prior quarter and 2.34% in the second quarter of 2019.

  • Continuing Seacoast's commitment to careful expense management, the efficiency ratio was 50.1% compared to 59.8% in the prior quarter and 53.5% in the second quarter of 2019. The adjusted efficiency ratio 1 was 49.8% compared to 53.6% in the previous quarter and 51.4% in the second quarter of 2019.

Balance Sheet

  • At June 30, 2020, the Company had total assets of $8.1 billion and total shareholders' equity of $1.0 billion. Book value per share was $19.45, and tangible book value per share was $15.11, compared to $18.82 and $14.42, respectively, on March 31, 2020, and $18.08 and $13.65, respectively, on June 30, 2019. This resulted in a year-over-year increase in tangible book value per share of 11%.

  • Debt securities totaled $1.2 billion on June 30, 2020, an increase of $40.4 million compared to March 31, 2020, and an increase of $1.2 million from June 30, 2019. During the quarter, $64.5 million of securities were sold resulting in a net gain of $1.2 million. Purchases of securities during the quarter totaled $165.0 million.

  • Loans totaled $5.8 billion on June 30, 2020, an increase of $454.8 million, or 9%, compared to March 31, 2020, and an increase of $883.9 million, or 18%, from June 30, 2019. Excluding PPP loans, loans outstanding declined by $121.6 million compared to March 31, 2020.

    • Seacoast originated over 5,000 loans totaling $590.7 million through the PPP program through June 30, 2020, with an average loan size of $116,000.

    • Other loan originations were $310.8 million in the second quarter of 2020, compared to $323.5 million in the first quarter of 2020 and $406.6 million in the second quarter of 2019.

      • As anticipated, and reflecting the economic impact of the pandemic, commercial originations during the second quarter of 2020 were $106.9 million, compared to $183.3 million in the first quarter of 2020 and $238.1 million in the second quarter of 2019.

      • Residential saleable loan originations were robust at $122.5 million in the second quarter of 2020, compared to $62.9 million in the first quarter of 2020 and $61.4 million in the second quarter of 2019.

      • Closed residential loans retained in the portfolio totaled $23.5 million in the second quarter of 2020, compared to $25.8 million in the first quarter of 2020 and $51.8 million in the second quarter of 2019.

      • Consumer originations in the second quarter of 2020 were $58.0 million, compared to $51.5 million in the first quarter of 2020 and $55.4 million in the second quarter of 2019.

    • Seacoast provided borrowers affected by the pandemic the ability to defer payments of loan principal and interest for periods ranging from three to six months. As of June 30, 2020, $1.1 billion in loans were in payment deferral status, 39% of which are scheduled to return to regular payments in the third quarter of 2020, and 61% in the fourth quarter of 2020. During the payment deferral period, Seacoast continues to recognize interest income.

  • Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $255.6 million on June 30, 2020. Seacoast remains committed to maintaining strict and careful underwriting, given the unknown impact of the pandemic on the economy.

    • Commercial pipelines were $117.0 million as of June 30, 2020, compared to $171.1 million as of the prior quarter end and $300.2 million as of June 30, 2019. The decline in the pipeline quarter over quarter was the result of a continued conservative approach on new credits given the uncertain economic outlook.

    • Residential saleable pipelines were $94.7 million as of June 30, 2020, compared to $75.2 million as of the prior quarter end and $46.7 million as of June 30, 2019. The increase reflects the impact of a vibrant refinance market and strength in the Florida housing market. Retained residential pipelines were $13.2 million as of June 30, 2020, compared to $11.8 million as of the prior quarter end and $3.8 million as of June 30, 2019.

    • Consumer pipelines were $30.6 million as of June 30, 2020, compared to $29.1 million as of the prior quarter-end and $26.9 million as of June 30, 2019.

  • Total deposits were $6.7 billion as of June 30, 2020, with Seacoast's strong deposit base showing an increase of $779.3 million, or 13%, sequentially and an increase of $1.1 billion, or 20%, from the prior year with increases in transaction and money market accounts partially offset by a decline in CDs, highlighting a continued attractive deposit mix. Increases in transaction and money market deposit accounts reflect customer growth, lower overall consumer spending levels, and the impact of government support programs enacted in the second quarter of 2020, including PPP and individual stimulus payments.

    • The overall cost of deposits declined to 31 basis points in the second quarter of 2020 from 57 basis points in the prior quarter, following rate cuts by the Federal Reserve in March 2020.

    • Total transaction accounts increased 30% quarter-over-quarter and, as a percentage of overall deposit funding, increased to 55% of overall deposit funding from 50% at March 31, 2020.

    • Interest-bearing deposits (interest-bearing demand, savings, and money market deposits) increased year-over-year $403.1 million, or 14%, to $3.2 billion, noninterest-bearing demand deposits increased $597.6 million, or 36%, to $2.3 billion, and CDs (excluding brokered) decreased $178.6 million, or 23%, to $606.6 million.

    • On June 30, 2020, deposits per banking center were $133 million, compared to $118 million on March 31, 2020, and $113 million on June 30, 2019.

Asset Quality

  • Nonperforming loans to total loans outstanding were 0.52% at June 30, 2020, 0.48% at March 31, 2020, and 0.47% at June 30, 2019.

  • Nonperforming assets to total assets were 0.57% at June 30, 2020, 0.55% at March 31, 2020 and 0.50% at June 30, 2019.

  • The ratio of allowance for credit losses to total loans was 1.58% at June 30, 2020, 1.61% at March 31, 2020, and 0.69% at June 30, 2019. The Company has assigned no allowance for credit losses to PPP loans, as the United States government contractually guarantees repayment. Excluding PPP loans, the ratio of allowance for credit losses to total loans at June 30, 2020, was 1.76%.

  • Net charge-offs were $1.8 million, or 0.12%, of average loans for the second quarter of 2020 compared to $1.0 million, or 0.07%, of average loans in the first quarter of 2020 and $1.8 million, or 0.15% of average loans in the second quarter of 2019. Net charge-offs for the four most recent quarters averaged 0.15%.

  • Portfolio diversification , in terms of asset mix, industry, and loan type, has been a critical element of the Company's lending strategy. Exposure across industries and collateral types is broadly distributed. Excluding PPP loans, Seacoast's average commercial loan size is $384,000, reflecting an ability to maintain granularity within the overall loan portfolio.

  • The Company does not have any purchased loan syndications, shared national credits, or mezzanine finance.

  • Since the outbreak of COVID-19, the Company has not experienced any material increase in consumer or commercial line utilization .

  • Construc tion and land development and commercial real estate loans remain well below regulatory guidance at 34% and 188% of total bank-level risk based capital, respectively, compared to 35% and 193% respectively, in the first quarter of 2020. On a consolidated basis, construction and land development and commercial real estate loans represent 32% and 176%, respectively, of total consolidated risk-based capital.

  • In this uncertain time, Seacoast will remain vigilant in maintaining its conservative credit posture.

Capital and Liquidity

  • The tier 1 capital ratio increased to 16.4% from 15.5% at March 31, 2020, and 14.6% June 30, 2019. The total capital ratio was 17.6% and the tier 1 leverage ratio was 11.4% at June 30, 2020.

  • Tangible common equity to tangible assets was 10.19% at June 30, 2020, compared to 10.68% at March 31, 2020 and 10.65% at June 30, 2019. The decrease in the second quarter of 2020 when compared to the prior quarter was due to growth in the balance sheet, the result of PPP loans and associated liquidity increasing total assets.

  • Cash and cash equivalents at June 30, 2020 totaled $524.3 million, an increase of $399.8 million from December 31, 2019, as Seacoast took a conservative stance at the outset of the pandemic.

  • At June 30, 2020, the Company had available unsecured lines of credit of $135.0 million and lines of credit under lendable collateral value of $1.4 billion. $881.7 million of debt securities and $764.1 million in residential and commercial real estate loans are available as collateral for potential borrowings.

1 Non-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

 

 

 

 

 

 

 

 

 

 

 

 

 

2Q'20

 

1Q'20

 

4Q'19

 

3Q'19

 

2Q'19

 

Selected Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

Total Assets

$

8,084,013 

 

 

$

7,352,894

 

 

$

7,108,511

 

 

$

6,890,645

 

 

$

6,824,886

 

 

Gross Loans

5,772,052 

 

 

5,317,208

 

 

5,198,404

 

 

4,986,289

 

 

4,888,139

 

 

Total Deposits

6,666,783 

 

 

5,887,499

 

 

5,584,753

 

 

5,673,141

 

 

5,541,209

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Measures:

 

 

 

 

 

 

 

 

 

 

Net Income

$

25,080 

 

 

$

709

 

 

$

27,176

 

 

$

25,605

 

 

$

23,253

 

 

Net Interest Margin

3.70 

%

 

3.93

%

 

3.84

%

 

3.89

%

 

3.94

%

 

Average Diluted Shares Outstanding

53,308 

 

 

52,284

 

 

52,081

 

 

51,935

 

 

51,952

 

 

Diluted Earnings Per Share (EPS)

$

0.47 

 

 

$

0.01

 

 

$

0.52

 

 

$

0.49

 

 

$

0.45

 

 

Return on (annualized):

 

 

 

 

 

 

 

 

 

 

Average Assets (ROA)

1.27 

%

 

0.04

%

 

1.54

%

 

1.49

%

 

1.38

%

 

Average Tangible Assets (ROTA)

1.37 

 

 

0.11

 

 

1.66

 

 

1.61

 

 

1.50

 

 

Average Tangible Common Equity (ROTCE)

13.47 

 

 

0.95

 

 

14.95

 

 

14.73

 

 

14.30

 

 

Tangible Common Equity to Tangible Assets 2

10.19 

 

 

10.68

 

 

11.05

 

 

11.05

 

 

10.65

 

 

Tangible Book Value Per Share

$

15.11 

 

 

$

14.42

 

 

$

14.76

 

 

$

14.30

 

 

$

13.65

 

 

Efficiency Ratio

50.11 

%

 

59.85

%

 

48.36

%

 

48.62

%

 

53.48

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Measures 1 :

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

$

25,452 

 

 

$

5,462

 

 

$

26,837

 

 

$

27,731

 

 

$

25,818

 

 

Adjusted Diluted EPS

0.48 

 

 

0.10

 

 

0.52

 

 

0.53

 

 

0.50

 

 

Adjusted ROTA

1.33 

%

 

0.32

%

 

1.57

%

 

1.67

%

 

1.59

%

 

Adjusted ROTCE

13.09 

 

 

2.86

 

 

14.19

 

 

15.30

 

 

15.17

 

 

Adjusted Efficiency Ratio

49.81 

 

 

53.61

 

 

47.52

 

 

48.96

 

 

51.44

 

 

Adjusted Noninterest Expense as a
Percent of Average Tangible Assets 2

2.13 

 

 

2.44

 

 

2.11

 

 

2.22

 

 

2.34

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

Market capitalization 3

$

1,081,009 

 

 

$

965,097

 

 

$

1,574,775

 

 

$

1,303,010

 

 

$

1,309,158

 

 

Full-time equivalent employees

924 

 

 

919

 

 

867

 

 

867

 

 

852

 

 

Number of ATMs

76 

 

 

76

 

 

78

 

 

80

 

 

81

 

 

Full-service banking offices

50 

 

 

50

 

 

48

 

 

48

 

 

49

 

 

Registered online users

117,273 

 

 

113,598

 

 

109,684

 

 

107,241

 

 

104,017

 

 

Registered mobile devices

108,062 

 

 

104,108

 

 

99,361

 

 

96,384

 

 

92,281

 

 

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

2 The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets.

3 Common shares outstanding multiplied by closing bid price on last day of each period.

Second Quarter Strategic Highlights

Capitalizing on Seacoast's Early Commitment to Digital Transformation

  • The COVID-19 pandemic has influenced how customers interact with Seacoast, accelerating the shift to digital for many customer segments. While branches remain open by drive-thru or lobby appointments, customers are also seeking the convenient security of mobile banking. Mobile banking logins have increased 11% compared to pre-pandemic periods, and have increased 20% compared to one year ago.

  • As the Paycheck Protection Program became available, Seacoast was able to adapt quickly to an automated solution with an existing technology partner to provide customers with faster access at the application stage. To support the forgiveness process, enhancements to the existing loan origination platform were rapidly developed, including a customer portal, which allows documents and loan information to be digitally uploaded directly onto the platform.

  • Substantially all non-branch staff have been working remotely since the beginning of the pandemic. In April of 2020, Seacoast conducted an associate survey, gaining feedback on the organization's response to the pandemic. Of the respondents who were working remotely, 95% stated that their productivity had increased or stayed the same as a result of working from home.

Driving Improvements to Operations

  • During the second quarter of 2020, Seacoast's website launched an artificial intelligence-enabled "chat-bot" tool that provides users with answers to frequently asked questions. This interactive self-service feature has facilitated nearly 10,000 interactions, giving customers quick access to the information they need while reducing call center volume and wait times.

  • Low interest rates fueling refinance demand combined with a strong Florida housing market have driven record levels of mortgage volume. In the first quarter of 2020, Seacoast introduced digital closing and notarization capabilities for residential mortgages and, in the second quarter, rolled out an end-to-end fully-electronic closing capability.

Fourth Street Banking Company Acquisition

  • Seacoast's acquisition of Fourth Street Banking Company, the holding company for Freedom Bank of St. Petersburg, is expected to be completed in August 2020, subject to shareholder approval and other customary closing conditions. Freedom Bank has also been supporting its customers in accessing the PPP program, with $55 million in PPP loans as of June 30, 2020. Loans on deferral represent 19% of Freedom Bank's total non-PPP loans outstanding. On June 30, 2020, Freedom Bank's total net loans were $312 million and total deposits were $359 million.

OTHER INFORMATION

Conference Call Information
Seacoast will host a conference call on July 24, 2020 at 10:00 a.m. (Eastern Time) to discuss the second quarter 2020 earnings results and business trends. Investors may call in (toll-free) by dialing (800) 774-6070 (passcode 6599 321#; 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 July 24, 2020, by clicking here and using passcode 49804232.

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 July 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 (NASDAQ: SBCF)
Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $8.1 billion in assets and $6.7 billion in deposits as of June 30, 2020. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 50 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, as amended, with the United States Securities and Exchange Commission (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 Fourth Street merger includes a proxy statement of Fourth Street and a prospectus of Seacoast. A definitive proxy statement/prospectus has been mailed to shareholders of 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 SECs 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.

Fourth Street, its directors, and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the merger of the proposed merger of Fourth Street with and into Seacoast. Information regarding the participants in the proxy solicitation of Fourth Street 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 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 FBPB and Fourth Street, 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, 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 our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.

All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may", "will", "anticipate", "assume", "should", "support", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "further", "plan", "point to", "project", "could", "intend", "target" or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality and the adverse impact of COVID-19 (economic and otherwise); governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes; changes in accounting policies, rules and practices, including the impact of the adoption of CECL; 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, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.

The risks relating to the FBPB merger and Fourth Street proposed merger include, without limitation: the timing to consummate the proposed merger; the risk that a condition to closing of the proposed merger may not be satisfied; the risk that the merger is not completed at all; the diversion of management time on issues related to the proposed merger; 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.

Given the many unknowns and risks being heavily weighted to the downside, our forward-looking statements are subject to the risk that conditions will be substantially different than we are currently expecting. If efforts to contain COVID-19 are unsuccessful and restrictions on movement last into the third quarter or beyond, the recession would be much longer and much more severe. Ineffective fiscal stimulus, or an extended delay in implementing it, are also major downside risks. The deeper the recession is, and the longer it lasts, the more it will damage consumer fundamentals and sentiment. This could both prolong the recession, and/or make any recovery weaker. Similarly, the recession could damage business fundamentals. And an extended global recession due to COVID-19 would weaken the U.S. recovery. As a result, the outbreak and its consequences, including responsive measures to manage it, have had and are likely to continue to have an adverse effect, possibly materially, on our business and financial performance by adversely affecting, possibly materially, the demand and profitability of our products and services, the valuation of assets and our ability to meet the needs of our customers.

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, 2019, and our quarterly report on Form 10-Q for the quarter ended March 31, 2020 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

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Amounts in thousands, except ratios and per share data)

2Q'20

 

1Q'20

 

4Q'19

 

3Q'19

 

2Q'19

 

2Q'20

 

2Q'19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

25,080

 

 

$

709

 

 

$

27,176

 

 

$

25,605

 

 

$

23,253

 

 

$

25,789

 

 

$

45,958

 

 

Adjusted net income 1

25,452

 

 

5,462

 

 

26,837

 

 

27,731

 

 

25,818

 

 

30,914

 

 

50,023

 

 

Net interest income 2

67,388

 

 

63,291

 

 

61,846

 

 

61,027

 

 

60,219

 

 

130,679

 

 

121,080

 

 

Net interest margin 2,3

3.70

%

 

3.93

%

 

3.84

%

 

3.89

%

 

3.94

%

 

3.81

%

 

3.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets-GAAP basis 3

1.27

%

 

0.04

%

 

1.54

%

 

1.49

%

 

1.38

%

 

0.69

%

 

1.37

%

 

Return on average tangible assets-GAAP basis 3,4

1.37

 

 

0.11

 

 

1.66

 

 

1.61

 

 

1.50

 

 

0.78

 

 

1.49

 

 

Adjusted return on average tangible assets 1,3,4

1.33

 

 

0.32

 

 

1.57

 

 

1.67

 

 

1.59

 

 

0.86

 

 

1.55

 

 

Adjusted noninterest expense to average tangible assets 1,3,4

2.13

 

 

2.44

 

 

2.11

 

 

2.22

 

 

2.34

 

 

2.26

 

 

2.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average shareholders' equity-GAAP basis 3

9.96

 

 

0.29

 

 

11.04

 

 

10.73

 

 

10.23

 

 

5.17

 

 

10.35

 

 

Return on average tangible common equity-GAAP basis 3,4

13.47

 

 

0.95

 

 

14.95

 

 

14.73

 

 

14.30

 

 

7.27

 

 

14.57

 

 

Adjusted return on average tangible common equity 1,3,4

13.09

 

 

2.86

 

 

14.19

 

 

15.30

 

 

15.17

 

 

8.02

 

 

15.14

 

 

Efficiency ratio 5

50.11

 

 

59.85

 

 

48.36

 

 

48.62

 

 

53.48

 

 

54.88

 

 

55.01

 

 

Adjusted efficiency ratio 1

49.81

 

 

53.61

 

 

47.52

 

 

48.96

 

 

51.44

 

 

51.68

 

 

53.62

 

 

Noninterest income to total revenue (excluding securities gains/losses)

17.00

 

 

18.84

 

 

18.30

 

 

19.53

 

 

18.93

 

 

17.90

 

 

18.19

 

 

Tangible common equity to tangible assets 4

10.19

 

 

10.68

 

 

11.05

 

 

11.05

 

 

10.65

 

 

10.19

 

 

10.65

 

 

Average loan-to-deposit ratio

88.48

 

 

93.02

 

 

90.71

 

 

88.35

 

 

87.27

 

 

90.59

 

 

88.87

 

 

End of period loan-to-deposit ratio

87.40

 

 

90.81

 

 

93.44

 

 

88.36

 

 

88.53

 

 

87.40

 

 

88.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income diluted-GAAP basis

$

0.47

 

 

$

0.01

 

 

$

0.52

 

 

$

0.49

 

 

$

0.45

 

 

$

0.49

 

 

$

0.88

 

 

Net income basic-GAAP basis

0.47

 

 

0.01

 

 

0.53

 

 

0.50

 

 

0.45

 

 

0.49

 

 

0.89

 

 

Adjusted earnings 1

0.48

 

 

0.10

 

 

0.52

 

 

0.53

 

 

0.50

 

 

0.59

 

 

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share common

19.45

 

 

18.82

 

 

19.13

 

 

18.70

 

 

18.08

 

 

19.45

 

 

18.08

 

 

Tangible book value per share

15.11

 

 

14.42

 

 

14.76

 

 

14.30

 

 

13.65

 

 

15.11

 

 

13.65

 

 

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

2 Calculated on a fully taxable equivalent basis using amortized cost.

3 These ratios are stated on an annualized basis and are not necessarily indicative of future periods.

4 The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets.

5 Defined 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

 

Six  Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Amounts in thousands, except per share data)

2Q'20

 

1Q'20

 

4Q'19

 

3Q'19

 

2Q'19

 

2Q'20

 

2Q'19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

7,573

 

$

8,696

 

 

$

8,500

 

$

8,802

 

 

$

8,933

 

 

$

16,269

 

 

$

18,052

 

 

Nontaxable

121

 

122

 

 

130

 

131

 

 

143

 

 

243

 

 

294

 

 

Interest and fees on loans

64,844

 

63,440

 

 

62,868

 

63,092

 

 

62,288

 

 

128,284

 

 

124,575

 

 

Interest on federal funds sold and other investments

684

 

734

 

 

788

 

800

 

 

873

 

 

1,418

 

 

1,791

 

 

Total Interest Income

73,222

 

72,992

 

 

72,286

 

72,825

 

 

72,237

 

 

146,214

 

 

144,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

1,203

 

3,190

 

 

3,589

 

4,334

 

 

4,825

 

 

4,393

 

 

8,698

 

 

Interest on time certificates

3,820

 

4,768

 

 

5,084

 

6,009

 

 

5,724

 

 

8,588

 

 

10,683

 

 

Interest on borrowed money

927

 

1,857

 

 

1,853

 

1,534

 

 

1,552

 

 

2,784

 

 

4,421

 

 

Total Interest Expense

5,950

 

9,815

 

 

10,526

 

11,877

 

 

12,101

 

 

15,765

 

 

23,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

67,272

 

63,177

 

 

61,760

 

60,948

 

 

60,136

 

 

130,449

 

 

120,910

 

 

Provision for credit losses

7,611

 

29,513

 

 

4,800

 

2,251

 

 

2,551

 

 

37,124

 

 

3,948

 

 

Net Interest Income After Provision for Credit Losses

59,661

 

33,664

 

 

56,960

 

58,697

 

 

57,585

 

 

93,325

 

 

116,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

1,939

 

2,825

 

 

2,960

 

2,978

 

 

2,894

 

 

4,764

 

 

5,591

 

 

Interchange income

3,187

 

3,246

 

 

3,387

 

3,206

 

 

3,405

 

 

6,433

 

 

6,806

 

 

Wealth management income

1,719

 

1,867

 

 

1,579

 

1,632

 

 

1,688

 

 

3,586

 

 

3,141

 

 

Mortgage banking fees

3,559

 

2,208

 

 

1,514

 

2,127

 

 

1,734

 

 

5,767

 

 

2,849

 

 

Marine finance fees

157

 

146

 

 

338

 

153

 

 

201

 

 

303

 

 

563

 

 

SBA gains

181

 

139

 

 

576

 

569

 

 

691

 

 

320

 

 

1,327

 

 

BOLI income

887

 

886

 

 

904

 

928

 

 

927

 

 

1,773

 

 

1,842

 

 

Other

2,147

 

3,352

 

 

2,579

 

3,197

 

 

2,503

 

 

5,499

 

 

4,769

 

 

 

13,776

 

14,669

 

 

13,837

 

14,790

 

 

14,043

 

 

28,445

 

 

26,888

 

 

Securities gains (losses), net

1,230

 

19

 

 

2,539

 

(847

)

 

(466

)

 

1,249

 

 

(475

)

 

Total Noninterest Income

15,006

 

14,688

 

 

16,376

 

13,943

 

 

13,577

 

 

29,694

 

 

26,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

20,226

 

23,698

 

 

17,263

 

18,640

 

 

19,420

 

 

43,924

 

 

37,926

 

 

Employee benefits

3,379

 

4,255

 

 

3,323

 

2,973

 

 

3,195

 

 

7,634

 

 

7,401

 

 

Outsourced data processing costs

4,059

 

4,633

 

 

3,645

 

3,711

 

 

3,876

 

 

8,692

 

 

7,721

 

 

Telephone / data lines

791

 

714

 

 

651

 

603

 

 

893

 

 

1,505

 

 

1,704

 

 

Occupancy

3,385

 

3,353

 

 

3,368

 

3,368

 

 

3,741

 

 

6,738

 

 

7,548

 

 

Furniture and equipment

1,358

 

1,623

 

 

1,416

 

1,528

 

 

1,544

 

 

2,981

 

 

3,301

 

 

Marketing

997

1,278 885 933 1,211 2,275 2,343 Legal and professional fees2,277 3,363 2,025 1,648 2,033 5,640 4,880 FDIC assessments266 — — 56 337 266 825 Amortization of intangibles1,483 1,456 1,456 1,456 1,456 2,939 2,914 Foreclosed property expense and net loss/(gain) on sale245 (315) 3 262 (174) (70) (214) Other3,933 3,740 4,022 3,405 3,468 7,673 7,750 Total Noninterest Expense42,399 47,798 38,057 38,583 41,000 90,197 84,099 Income Before Income Taxes32,268 554 35,279 34,057 30,162 32,822 59,276 Income taxes7,188 (155) 8,103 8,452 6,909 7,033 13,318 Net Income$25,080 $709 $27,176 $25,605 $23,253 $25,789 $45,958 Per share of common stock: Net income diluted$0.47 $0.01 $0.52 $0.49 $0.45 $0.49 $0.88 Net income basic0.47 0.01 0.53 0.50 0.45 0.49 0.89 Cash dividends declared — — — — — Average diluted shares outstanding53,308 52,284 52,081 51,935 51,952 52,807 51,998 Average basic shares outstanding52,985 51,803 51,517 51,473 51,446 52,394 51,403


CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

June 30,

March 31,

December 31,

September 30,

June 30,

(Amounts in thousands)

2020

2020

2019

2019

2019

Assets

Cash and due from banks

$

84,178

$

82,111

$

89,843

$

106,349

$

97,792

Interest bearing deposits with other banks

440,142

232,763

34,688

25,911

61,987

Total Cash and Cash Equivalents

524,320

314,874

124,531

132,260

159,779

Time deposits with other banks

2,496

3,742

3,742

4,579

4,980

Debt Securities:

Available for sale (at fair value)

976,025

910,311

946,855

920,811

914,615

Held to maturity (at amortized cost)

227,092

252,373

261,369

273,644

287,302

Total Debt Securities

1,203,117

1,162,684

1,208,224

1,194,455

1,201,917

Loans held for sale

54,943

29,281

20,029

26,768

17,513

Loans

5,772,052

5,317,208

5,198,404

4,986,289

4,888,139

Less: Allowance for credit losses

(91,250

)

(85,411

)

(35,154

)

(33,605

)

(33,505

)

Net Loans

5,680,802

5,231,797

5,163,250

4,952,684

4,854,634

Bank premises and equipment, net

69,041

71,540

66,615

67,873

68,738

Other real estate owned

15,847

14,640

12,390

13,593

11,043

Goodwill

212,146

212,085

205,286

205,286

205,260

Other intangible assets, net

17,950

19,461

20,066

21,318

22,672

Bank owned life insurance

127,954

127,067

126,181

125,277

125,233

Net deferred tax assets

21,404

19,766

16,457

17,168

19,353

Other assets

153,993

145,957

141,740

129,384

133,764

Total Assets

$

8,084,013

$

7,352,894

$

7,108,511

$

6,890,645

$

6,824,886

Liabilities and Shareholders' Equity

Liabilities

Deposits

Noninterest demand

$

2,267,435

$

1,703,628

$

1,590,493

$

1,652,927

$

1,669,804

Interest-bearing demand

1,368,146

1,234,193

1,181,732

1,115,455

1,124,519

Savings

619,251

554,836

519,152

528,214

519,732

Money market

1,232,892

1,124,378

1,108,363

1,158,862

1,172,971

Other time certificates

445,176

489,669

504,837

537,183

553,107

Brokered time certificates

572,465

597,715

472,857

458,418

268,998

Time certificates of more than $250,000

161,418

183,080

207,319

222,082

232,078

Total Deposits

6,666,783

5,887,499

5,584,753

5,673,141

5,541,209

Securities sold under agreements to repurchase

92,125

64,723

86,121

70,414

82,015

Federal Home Loan Bank borrowings

135,000

265,000

315,000

50,000

140,000

Subordinated debt

71,225

71,155

71,085

71,014

70,944

Other liabilities

88,277

72,730

65,913

63,398

60,479

Total Liabilities

7,053,410

6,361,107

6,122,872

5,927,967

5,894,647

Shareholders' Equity

Common stock

5,299

5,271

5,151

5,148

5,146

Additional paid in capital

811,328

809,533

786,242

784,661

782,928

Retained earnings

204,719

179,646

195,813

168,637

143,032

Treasury stock

(8,037

)

(7,422

)

(6,032

)

(6,079

)

(6,137

)

1,013,309

987,028

981,174

952,367

924,969

Accumulated other comprehensive income, net

17,294

4,759

4,465

10,311

5,270

Total Shareholders' Equity

1,030,603

991,787

985,639

962,678

930,239

Total Liabilities & Shareholders' Equity

$

8,084,013

$

7,352,894

$

7,108,511

$

6,890,645

$

6,824,886

Common shares outstanding

52,991

52,709

51,514

51,482

51,461


CONSOLIDATED QUARTERLY FINANCIAL DATA

(Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

(Amounts in thousands)

2Q'20

1Q'20

4Q'19

3Q'19

2Q'19

Credit Analysis

Net charge-offs - non-acquired loans

$

1,714

$

1,316

$

2,930

$

2,106

$

1,621

Net charge-offs (recoveries) - acquired loans

37

(343

)

295

5

220

Total Net Charge-offs

1,751

973

3,225

2,111

1,841

TDR valuation adjustments

$

21

$

24

$

27

$

40

$

27

Net charge-offs to average loans - non-acquired loans

0.12

%

0.10

%

0.23

%

0.17

%

0.13

%

Net charge-offs (recoveries) to average loans - acquired loans

(0.03

)

0.02

0.02

Total Net Charge-offs to Average Loans

0.12

0.07

0.25

0.17

0.15

Provision for credit losses - non-acquired loans

$

5,825

$

25,688

$

4,041

$

2,241

$

2,326

Provision for credit losses - acquired loans

1,786

3,825

759

10

225

Total Provision for Credit Losses

$

7,611

$

29,513

$

4,800

$

2,251

$

2,551

Allowance for credit losses - non-acquired loans

$

73,587

$

69,498

$

34,573

$

33,488

$

33,393

Allowance for credit losses - acquired loans

17,663

15,913

581

117

112

Total Allowance for Credit Losses

$

91,250

$

85,411

$

35,154

$

33,605

$

33,505

Non-acquired loans at end of period

$

4,315,892

$

4,373,378

$

4,317,919

$

4,010,299

$

3,817,358

Acquired loans at end of period

879,710

943,830

880,485

975,990

1,070,781

Paycheck Protection Program loans at end of period

576,450

Total Loans

$

5,772,052

$

5,317,208

$

5,198,404

$

4,986,289

$

4,888,139

Non-acquired loans allowance for credit losses to non-acquired loans at end of period

1.71

%

1.59

%

0.80

%

0.84

%

0.87

%

Total allowance for credit losses to total loans at end of period

1.58

1.61

0.68

0.67

0.69

Total allowance for credit losses to total loans, excluding PPP loans

1.76

1.61

0.68

0.67

0.69

Purchase discount on acquired loans at end of period

3.29

3.36

3.83

3.76

3.76

End of Period

Nonperforming loans - non-acquired

$

22,248

$

17,898

$

20,990

$

20,400

$

15,810

Nonperforming loans - acquired

7,803

7,684

5,965

5,644

6,986

Other real estate owned - non-acquired

10,836

10,676

5,177

5,177

66

Other real estate owned - acquired

131

372

372

1,574

1,612

Properties previously used in bank operations included in other real estate owned

4,880

3,592

6,842

6,842

9,365

Total Nonperforming Assets

$

45,898

$

40,222

$

39,346

$

39,637

$

33,839

Restructured loans (accruing)

$

10,338

$

10,833

$

11,100

$

12,395

$

14,534

Nonperforming loans to loans at end of period - non-acquired

0.52

%

0.41

%

0.49

%

0.51

%

0.41

%

Nonperforming loans to loans at end of period - acquired

0.89

0.81

0.68

0.58

0.65

Total Nonperforming Loans to Loans at End of Period

0.52

0.48

0.52

0.52

0.47

Nonperforming assets to total assets - non-acquired

0.47

%

0.44

%

0.46

%

0.47

%

0.37

%

Nonperforming assets to total assets - acquired

0.10

0.11

0.09

0.11

0.13

Total Nonperforming Assets to Total Assets

0.57

0.55

0.55

0.58

0.50

June 30,

March 31,

December 31,

September 30,

June 30,

Loans

2020

2020

2019

2019

2019

Construction and land development

$

298,835

$

295,405

$

325,113

$

326,324

$

379,991

Commercial real estate - owner occupied

1,076,650

1,082,893

1,034,963

1,025,040

1,005,876

Commercial real estate - non-owner occupied

1,392,787

1,381,096

1,344,008

1,285,327

1,184,409

Residential real estate

1,468,171

1,559,754

1,507,863

1,409,946

1,400,184

Commercial and financial

757,232

796,038

778,252

722,286

701,747

Consumer

201,927

202,022

208,205

217,366

215,932

Paycheck Protection Program

576,450

Total Loans

$

5,772,052

$

5,317,208

$

5,198,404

$

4,986,289

$

4,888,139


AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1

(Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

2Q'20

1Q'20

2Q'19

Average

Yield/

Average

Yield/

Average

Yield/

(Amounts in thousands)

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Earning assets:

Securities:

Taxable

$

1,135,698

$

7,573

2.67

%

$

1,152,473

$

8,696

3.02

%

$

1,169,891

$

8,933

3.05

%

Nontaxable

19,347

152

3.14

19,740

152

3.09

24,110

179

2.96

Total Securities

1,155,045

7,725

2.68

1,172,213

8,848

3.02

1,194,001

9,112

3.05

Federal funds sold and other investments

433,626

684

0.63

87,924

734

3.36

91,481

873

3.83

Loans excluding PPP loans

5,304,381

59,861

4.54

5,215,234

63,524

4.90

4,841,751

62,335

5.16

PPP loans

424,171

5,068

4.81

Total Loans

5,728,552

64,929

4.56

5,215,234

63,524

4.90

4,841,751

62,335

5.16

Total Earning Assets

7,317,223

73,338

4.03

6,475,371

73,106

4.54

6,127,233

72,320

4.73

Allowance for credit losses

(84,965

)

(56,931

)

(32,806

)

Cash and due from banks

103,919

90,084

91,160

Premises and equipment

71,173

67,585

69,890

Intangible assets

230,871

226,712

228,706

Bank owned life insurance

127,386

126,492

124,631

Other assets

147,395

126,230

126,180

Total Assets

$

7,913,002

$

7,055,543

$

6,734,994

Liabilities and Shareholders' Equity

Interest-bearing liabilities:

Interest-bearing demand

$

1,298,639

$

297

0.09

%

$

1,173,930

$

834

0.29

%

$

1,118,703

$

1,150

0.41

%

Savings

591,040

165

0.11

526,727

348

0.27

513,773

586

0.46

Money market

1,193,969

741

0.25

1,128,757

2,008

0.72

1,179,345

3,089

1.05

Time deposits

1,293,766

3,820

1.19

1,151,750

4,768

1.67

1,089,020

5,724

2.11

Securities sold under agreements to repurchase

74,717

34

0.18

71,065

167

0.95

91,614

355

1.55

Federal funds purchased and
Federal Home Loan Bank borrowings

199,698

312

0.63

250,022

968

1.56

51,571

329

2.56

Other borrowings

71,185

581

3.28

71,114

722

4.08

70,903

868

4.91

Total Interest-Bearing Liabilities

4,723,014

5,950

0.51

4,373,365

9,815

0.90

4,114,929

12,101

1.18

Noninterest demand

2,097,038

1,625,215

1,646,934

Other liabilities

79,855

62,970

61,652

Total Liabilities

6,899,907

6,061,550

5,823,515

Shareholders' equity

1,013,095

993,993

911,479

Total Liabilities & Equity

$

7,913,002

$

7,055,543

$

6,734,994

Cost of deposits

0.31

%

0.57

%

0.76

%

Interest expense as a % of earning assets

0.33

%

0.61

%

0.79

%

Net interest income as a % of earning assets

$

67,388

3.70

%

$

63,291

3.93

%

$

60,219

3.94

%

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

Six Months Ended June 30, 2020

Six Months Ended June 30, 2019

Average

Yield/

Average

Yield/

(Amounts in thousands, except ratios)

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Earning assets:

Securities:

Taxable

$

1,144,086

$

16,269

2.84

%

$

1,178,087

$

18,052

3.06

%

Nontaxable

19,544

304

3.11

25,329

369

2.91

Total Securities

1,163,630

16,573

2.85

1,203,416

18,421

3.06

Federal funds sold and other investments

260,775

1,418

1.09

91,310

1,791

3.96

Loans excluding PPP loans

5,259,808

123,385

4.72

4,840,406

124,670

5.19

PPP loans

212,085

5,068

4.81

Total Loans

5,471,893

128,453

4.72

4,840,406

124,670

5.19

Total Earning Assets

6,896,298

146,444

4.27

6,135,132

144,882

4.76

Allowance for credit losses

(70,948

)

(32,885

)

Cash and due from banks

97,002

95,526

Premises and equipment

69,379

70,411

Intangible assets

228,791

229,382

Bank owned life insurance

126,939

124,172

Other assets

136,811

131,148

Total Assets

$

7,484,272

$

6,752,886

Liabilities and Shareholders' Equity

Interest-bearing liabilities:

Interest-bearing demand

$

1,236,285

$

1,131

0.18

%

$

1,074,460

$

1,989

0.37

%

Savings

558,883

513

0.18

507,097

1,062

0.42

Money market

1,161,363

2,749

0.48

1,169,198

5,647

0.97

Time deposits

1,222,758

8,588

1.41

1,065,812

10,683

2.02

Securities sold under agreements to repurchase

72,891

201

0.55

138,065

905

1.32

Federal funds purchased and
Federal Home Loan Bank borrowings

224,860

1,279

1.14

138,989

1,750

2.54

Other borrowings

71,149

1,304

3.69

70,870

1,766

5.03

Total Interest-Bearing Liabilities

4,548,189

15,765

0.70

4,164,491

23,802

1.15