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Section 1: 8-K (FORM 8-K)

8-K – page 1 of 5

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________

 

FORM 8-K

________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported) July 26, 2018

 

    SEACOAST BANKING CORPORATION OF FLORIDA    

(Exact Name of Registrant as Specified in Charter)

 

Florida

0-13660

59-2260678

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number

(IRS Employer

Identification No.)

 

815 Colorado Avenue, Stuart, FL

34994

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code    (772) 287-4000   

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

 

 

 

8-K – page 2 of 5

 

SEACOAST BANKING CORPORATION OF FLORIDA

 

 

Item 2.02Results of Operations and Financial Condition

 

On July 26, 2018, Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the quarter ended June 30, 2018.

 

A copy of the press release announcing Seacoast’s results for the quarter ended June 30, 2018 is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 7.01Regulation FD Disclosure

 

On July 27, 2018, Seacoast held an investor conference call to discuss its financial results for the quarter ended June 30, 2018. A transcript of this conference call is attached hereto as Exhibit 99.2 and incorporated herein by reference. Also attached as Exhibit 99.3 are charts (available on the Company’s website at www.seacoastbanking.com) containing information used in the conference call and incorporated herein by reference. All information included in the transcript and the charts is presented as of June 30, 2018, and the Company does not assume any obligation to correct or update said information in the future.

 

The information in Items 2.02 and 7.01, as well as Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

 

Item 9.01Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.

Description

99.1  

Press Release dated July 26, 2018 with respect to Seacoast’s financial results for the quarter ended June 30, 2018

     
99.2  

Transcript of Seacoast’s investor conference call held on July 27, 2018 to discuss the Company’s financial results for the quarter ended June 30, 2018

     
99.3  

Data on website containing information used in the conference call held on July 27, 2018

 

Exhibits 99.1, 99.2 and 99.3 referenced herein contain “forward-looking statements” within the meaning of Section 28A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, ability to realized deferred tax assets, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast’s objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.

 

 

8-K – page 3 of 5

 

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, 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.

 

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”, “point to,” “project,” “could,” “intend” 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, 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; 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 of mergers and acquisitions, include, without limitation: 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 merger 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 disruption, 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, 2017 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 http://www.sec.gov.

 

 

8-K – page 4 of 5

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SEACOAST BANKING CORPORATION OF FLORIDA
  (Registrant)  
     
     
Date:  August 1, 2018 By: /s/ Charles M. Shaffer
    Charles M. Shaffer
    Executive Vice President and Chief Financial Officer

 

 

8-K – page 5 of 5

 

EXHIBIT INDEX

  

Exhibit No.  

Description

99.1  

Press Release dated July 26, 2018 with respect to Seacoast’s financial results for the quarter ended June 30, 2018

     
99.2  

Transcript of Seacoast’s investor conference call held on July 27, 2018 to discuss the Company’s financial results for the quarter ended June 30, 2018

     
99.3  

Data on website containing information used in the conference call held on July 27, 2018

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

 

Charles M. Shaffer

Executive Vice President

Chief Financial Officer

(772) 221-7003

[email protected]

 

 

SEACOAST REPORTS SECOND QUARTER 2018 RESULTS

 

Net Income Increases 121% Year-Over-Year to $17.0 Million

 

Record Consumer and Small Business Loan Originations, Record Commercial Pipeline Entering the Third Quarter

 

 

STUART, Fla., July 26, 2018 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida (“Seacoast” or “the Company”) (NASDAQ: SBCF) reported net income of $17.0 million, or $0.35 per share for the second quarter of 2018, a 121% or $9.3 million increase year-over-year. Seacoast reported adjusted net income1 of $18.3 million, or $0.38 per share, representing a 44% or $5.6 million increase year-over-year.

 

For the second quarter 2018, return on average tangible assets was 1.24%, return on average tangible shareholders’ equity was 13.1%, and the efficiency ratio was 58.4%, compared to 1.34%, 14.4% and 57.8%, respectively, in the prior quarter and 0.66%, 7.3%, and 73.9%, respectively, in the second quarter of 2017.  Adjusted return on average tangible assets1 was 1.28%, adjusted return on average tangible shareholders’ equity1 was 13.5%, and the adjusted efficiency ratio1 was 57.3%, compared to 1.38%, 14.8%, and 57.1%, respectively, in the prior quarter, and 1.02%, 11.2%, and 61.2%, respectively, in the second quarter of 2017.

 

Dennis S. Hudson, III, Seacoast’s Chairman and CEO, said “Seacoast’s balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit our shareholders. Consumer and small business loan originations reached record levels and we exited the quarter with our commercial loan pipeline at an all-time high. Looking ahead, we expect our total loan growth to accelerate, driven by the combination of a robust pipeline, investments we have made in proprietary commercial banking technologies, and expanding our commercial platform within the Tampa and South Florida markets. During the quarter we announced the acquisition of First Green Bancorp, Inc., which will introduce more than 10,000 new customers in central and south Florida to Seacoast’s innovative banking platforms and deepen our presence in Orlando, Florida’s third-largest metropolitan area. We expect this acquisition to close early in the fourth quarter.”

 

Charles M. Shaffer, Seacoast’s Chief Financial Officer, said, “We continue to balance a disciplined approach to credit, liquidity, and expense management, while making investments in technology and talent, resulting in an increase in tangible book value per share to $11.67 at period end and positioning us well to deliver the strong performance we outlined in our Vision 2020 plan. With a loan to deposit ratio of 84% and a ratio of tangible common equity to tangible assets of 9.6%, our balance sheet provides us with the resources to prudently fund our organic growth initiatives while continuing to make accretive acquisitions.”

 

 

 

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures”

 

 

 

Notable Items Impacting the Second Quarter

 

Several notable items in aggregate impacted the quarter by approximately $0.05 per share. These include a $0.5 million reduction in accretion of purchase discounts on acquired loans quarter over quarter, and higher prepayments on the nonacquired originated loan portfolio which reduced loan growth by 3%. Additionally, we recognized $1.7 million in net charge-offs and $0.3 million in losses on the sale of other real estate owned during the quarter.

 

Second Quarter 2018 Financial Highlights

 

Income Statement

 

Net income was $17.0 million, or $0.35 per diluted share, compared to $18.0 million or $0.38 for the prior quarter and $7.7 million or $0.18 for the second quarter of 2017. For the six months ended June 30, 2018, net income was $35.0 million compared to $15.6 million for the six months ended June 30, 2017. Adjusted net income1 was $18.3 million, or $0.38 per diluted share, compared to $19.3 million or $0.40 for the prior quarter and $12.7 million or $0.29 for the second quarter of 2017. For the six months ended June 30, 2018, adjusted net income1 was $37.6 million compared to $22.9 million for the six months ended June 30, 2017.

 

Net revenues were $62.9 million, an increase of $0.9 million or 1% compared to the prior quarter, and an increase of $8.3 million or 15% compared to the second quarter of 2017. For the six months ended June 30, 2018, net revenues were $125.0 million, an increase of $22.3 million or 22% compared to the six months ended June 30, 2017. Adjusted revenues1 were $63.0 million, an increase of $0.8 million, or 1%, from the prior quarter and an increase of $8.4 million, or 15% from the second quarter of 2017. For the six months ended June 30, 2018, adjusted revenues1 were $125.1 million, an increase of $22.4 million or 22% compared to the six months ended June 30, 2017.

 

Net interest income totaled $50.2 million, an increase of $0.4 million or 1% from the prior quarter and an increase of $6.1 million or 14% from the second quarter of 2017. For the six months ended June 30, 2018, net interest income totaled $100.0 million, an increase of $17.6 million or 21% compared to the six months ended June 30, 2017.

 

Net interest margin was 3.77% in the current quarter compared to 3.80% in the prior quarter and 3.84% in the second quarter of 2017. Removing the impact of accretion of purchase discounts on acquired loans the net interest margin was 3.61% in the current quarter, compared to 3.60% in the prior quarter and 3.59% in the second quarter of 2017. Quarter over quarter accretion on purchase discounts on acquired loans declined by $0.5 million, impacting the net interest margin by 4 basis points.

 

Noninterest income totaled $12.7 million, an increase of $0.4 million or 4% compared to the prior quarter and an increase of $2.2 million or 21% from the second quarter of 2017. For the six months ended June 30, 2018, noninterest income totaled $25.0 million, 23% higher than the six months ended June 30, 2017. Adjusted noninterest income1 totaled $12.8 million for the quarter, an increase of $0.4 million or 3% compared to prior quarter and an increase of $2.3 million or 22% from the second quarter of 2017. Following on the significant progress we made in the first quarter, second quarter results reflected growth across our businesses resulting in improvements in nearly every category. We continue to benefit from the investments we have made in Wealth Management and SBA lending.

 

 

 

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures”

 

 

 

The provision for loan losses was $2.5 million, compared to $1.1 million in the prior quarter and $1.4 million in the second quarter of 2017, reflecting the effect of portfolio growth as well as $1.7 million in net charge-offs in the current quarter.

 

Noninterest expense was $38.2 million compared to $37.2 million in the prior quarter and $41.6 million in the second quarter of 2017. For the six months ended June 30, 2018, noninterest expense was $75.4 million compared to $76.4 million for the six months ended June 30, 2017. In the current quarter, noninterest expense included $0.7 million in merger related expenses. Adjusted noninterest expense1 was $36.5 million compared to $35.7 million in the prior quarter, and $33.8 million in the second quarter of 2017. For the six months ended June 30, 2018, adjusted noninterest expense1 was $72.3 million compared to $64.8 million for the six months ended June 30, 2017. The increase in noninterest expense quarter over quarter was the result of continued investments in both talent and technology in the organization positioning Seacoast for continued robust profitability. We acquired two commercial banking team leaders, four commercial bankers, and made investments in talent to support scaling the organization prudently. During the second quarter, we granted 191,000 restricted shares, along with performance awards for up to an additional 356,000 shares upon meeting certain performance criteria. This investment for growth was granted deep into the organization, with the goal of providing meaningful value to our associates for achieving our performance objectives.

 

Seacoast recorded $5.2 million in income tax expense in the current quarter, compared to $5.8 million in the prior quarter and $3.9 million in the second quarter of 2017. The effective tax rate of 23.4% in the current quarter reflects the positive impact of the new lower corporate tax rate. Prior quarter included the effect of an additional $0.3 million write down of deferred tax assets arising from measurement period adjustments on a prior year bank acquisition. The write down of those assets in the prior quarter increased the effective tax rate by 1.1% to 24.3%.

 

Year to date adjusted revenues1 increased 22% compared to prior year while adjusted noninterest expense1 increased 12%, providing 10% operating leverage.

 

The efficiency ratio was 58.4% compared to 57.8% in the prior quarter and 73.9% in the second quarter of 2017. The adjusted efficiency ratio1 was 57.3% compared to 57.1% in the prior quarter and 61.2% in the second quarter of 2017.

 

Balance Sheet

 

At June 30, 2018, the Company had total assets of $5.9 billion and total shareholders' equity of $716 million.  Book value per share was $15.18 and tangible book value per share was $11.67, compared to $14.94 and $11.39, respectively, at March 31, 2018 and $13.29 and $10.55, respectively, at June 30, 2017.

 

Debt Securities totaled $1.3 billion at June 30, 2018, a decrease of $47 million compared to prior quarter and a decrease of $70 million from June 30, 2017. Given the current interest rate environment, the securities portfolio is being used as a liquidity source to fund loan growth.

 

 

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures”

 

 

 

 

Net loans totaled $3.9 billion at June 30, 2018, an increase of $76 million compared to prior quarter or 8% annualized in the current quarter, and an increase of $641 million or 19% from June 30, 2017. Excluding the impact of two acquisitions in the fourth quarter of 2017, loans increased $237 million or 7% from June 30, 2017.
During the current quarter, commercial originations were $140.4 million, consumer and small business originations for the quarter were a record $104.9 million and retained residential loans were $75.0 million.
Loan growth for the quarter was impacted by higher loan prepayments when compared to the prior quarter, impacting annualized loan growth by 3%.
We continue to prudently manage commercial real estate exposure. Construction and land development and commercial real estate loans remain well below regulatory guidance at 59% and 203% of total risk based capital, respectively.

 

Pipelines (loans in underwriting and approval or approved and not yet closed) are at a record high for second quarter. At June 30, 2018, total pipelines were $311.6 million, an increase of 28% over the prior quarter and 16% compared to prior year.
Commercial pipelines were $194.9 million, an increase of $72.2 million, or 59%, from prior quarter.
Consumer and small business pipelines were $52.9 million, an increase of $2.6 million, or 5%, compared to the prior quarter.
Residential pipelines were $63.7 million, decreasing by $7.0 million, or 10%, from prior quarter.

 

Total deposits were $4.7 billion as of June 30, 2018, a decrease of $22 million from prior quarter and an increase of $722 million, or 18%, from June 30, 2017. The quarter over quarter decline in deposit outstandings reflects a normal impact of the summer season in Florida.
Year-over-year, interest bearing deposits (interest bearing demand, savings and money market deposits) increased $271 million, or 12%, to $2.4 billion, noninterest bearing demand deposits increased $155 million, or 12%, to $1.5 billion, and CDs increased $295 million, or 60%, to $790 million.
Excluding acquired deposits, noninterest bearing deposits increased 4% while total deposits increased 5% compared to June 30, 2017.
The Company’s balance sheet continues to be primarily core deposit funded. Core customer funding was $4.1 billion at June 30, 2018, compared to $4.1 billion at March 31, 2018 and $3.6 billion at June 30, 2017.
Overall cost of deposits remains attractive at 39 basis points.

 

Second quarter return on average tangible assets (ROTA) was 1.24%, compared to 1.34% in the prior quarter and 0.66% in the second quarter of 2017. Adjusted ROTA1 was 1.28% compared to 1.38% in the prior quarter and 1.02% in the second quarter of 2017.

 

Capital

 

Second quarter return on average tangible common equity (ROTCE) was 13.08%, compared to 14.41% in the prior quarter and 7.25% in the second quarter of 2017. Adjusted ROTCE1 was 13.49% compared to 14.82% in the prior quarter and 11.22% in the second quarter of 2017.
The common equity tier 1 capital ratio (CET1) was 12.9%, total capital ratio was 15.2% and the tier 1 leverage ratio was 11.0% at June 30, 2018.
Tangible common equity to tangible assets was 9.56% at June 30, 2018, compared to 9.33% at March 31, 2018, and 8.88% at June 30, 2017.

 

 

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures”

 

 

 

Asset Quality

 

Nonperforming loans to total loans outstanding was 0.66% at June 30, 2018, 0.50% at March 31, 2018, and 0.52% at June 30, 2017. Nonperforming loans increased $7.0 million, the result of a transfer of a single credit to nonaccrual status.
Nonperforming assets to total assets was 0.58% at June 30, 2018, 0.50% at March 31, 2018 and 0.49% at June 30, 2017. The $34.6 million in nonperforming assets includes $3.1 million in closed branch properties held as REO.
The ratio of allowance for loan losses to total loans was 0.73% at June 30, 2018, 0.72% at March 31, 2018, and 0.78% at June 30, 2017.
The ratio of allowance for loan losses to non-acquired loans was 0.88% at June 30, 2018, 0.90% at March 31, 2018, and 0.95% at June 30, 2017.
Net charge-offs were $1.7 million or 0.17% for the current quarter compared to near zero in the prior quarter. Net charge-offs for the four most recent quarters averaged 0.09%.

 

 

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures”

 

 

 

FINANCIAL HIGHLIGHTS          (Unaudited)         
(Amounts in thousands except per share data)                
    Quarterly Trends 
                          
    2Q'18    1Q'18    4Q'17    3Q'17    2Q'17 
Selected Balance Sheet Data:                         
Total Assets  $5,922,681   $5,903,101   $5,810,129   $5,340,413   $5,281,295 
Gross Loans   3,974,016    3,897,125    3,817,377    3,384,991    3,330,075 
Total Deposits   4,697,440    4,719,543    4,592,720    4,112,600    3,975,458 
                          
Performance Measures:                         
Net Income  $16,964   $18,027   $13,047   $14,216   $7,676 
Net Interest Margin   3.77%   3.80%   3.71%   3.74%   3.84%
Average Diluted Shares Outstanding   47,974    47,688    46,473    43,792    43,556 
Diluted Earnings Per Share (EPS)  $0.35   $0.38   $0.28   $0.32   $0.18 
Return on (annualized):                         
Average Assets (ROA)   1.16%   1.25%   0.91%   1.06%   0.61%
Average Tangible Common Equity (ROTCE)   13.08    14.41    10.69    12.45    7.25 
Efficiency Ratio   58.41    57.80    63.95    58.93    73.90 
                          
Adjusted Operating Measures1:                         
Adjusted Net Income  $18,268   $19,298   $17,261   $15,145   $12,665 
Adjusted Diluted EPS   0.38    0.40    0.37    0.35    0.29 
Adjusted ROTA   1.28%   1.38%   1.23%   1.16%   1.02%
Adjusted ROTCE   13.49    14.82    13.49    12.80    11.22 
Adjusted Efficiency Ratio   57.31    57.05    52.55    57.69    61.20 
Adjusted Noninterest Expenses as a                         
  Percent of Average Tangible Assets   2.57    2.55    2.24    2.50    2.73 
Other Data:                         
Market capitalization2  $1,489,411   $1,243,644   $1,182,796   $1,039,506   $1,047,361 
Full-time equivalent employees   826    814    805    762    759 
Number of ATMs   87    86    85    76    76 
Full service banking offices   49    49    51    45    45 
Registered online users   92,107    91,636    83,881    78,880    75,394 
Registered mobile devices   69,038    65,336    62,516    58,032    55,013 

 

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures”

2Common shares outstanding multiplied by closing bid price on last day of each period

 

 

 

Acquisition of First Green Bancorp

 

On June 11, 2018 we announced the acquisition of First Green Bancorp, Inc., headquartered in Orlando, Florida, which we expect to close early in the fourth quarter. Pursuant to the terms of the merger agreement, First Green Bancorp, Inc. will be merged into Seacoast Banking Corporation, and First Green Bank will be merged into Seacoast Bank. Organized in 2009, First Green Bank has deposits of approximately $629 million and loans of $629 million. First Green operates seven branches in the Orlando, Daytona and Ft. Lauderdale markets. We expect the acquisition to be more than 10% accretive to earnings per share in 2019 excluding one-time transaction costs, and have a tangible book value earn-back of less than one year using the cross over method. The transaction is expected to provide an internal rate of return over 25%.

 

Vision 2020

 

We remain confident in our ability to achieve our Vision 2020 targets announced early last year. We continue to monitor the impact of the Tax Cuts and Jobs Act of 2017 and believe the impact of this important legislation will more fully materialize in the marketplace moving forward. Additionally, we announced the acquisition of First Green Bancorp, Inc., which is expected to close early in the fourth quarter. We believe both the Tax Cuts and Jobs Act of 2017 and the acquisition of First Green Bancorp, Inc. reinforce our ability to achieve these objectives.

 

 

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

 

 

Second Quarter Strategic Highlights

 

Modernizing How We Sell

 

Seacoast Wealth Management added $75.1 million in new fee-based assets under management year to date, 65% of which were the direct result of referrals from the commercial, small business, and retail teams.  The resulting trust and brokerage revenues continue to rise, with industry leading products including digital tools, and a growing sales and support team throughout the footprint.
We launched our proprietary Commercial Banking Portal in June, providing customized banker dashboards with key indicators and alerts. With the Portal, our bankers have real-time updates on how their customers use our products and services, allowing them to provide more meaningful guidance and advice. We believe this tool will provide our Bankers the ability to significantly expand relationships moving forward.
Other technology investments during the quarter included enhancements to our proprietary Connections portal, which provides our teams with greater access and insight to customer service and sales opportunities to better meet customer needs.

 

Lowering Our Cost to Serve

 

We continue to implement footprint-related expense reduction strategies, consolidating three banking center locations in the last twelve months. Our upcoming First Green acquisition further provides opportunity to reposition our footprint, as six out of seven First Green branches are located within three miles of a Seacoast branch.
An automated lending platform, currently in development with strategic technology partners, will create efficiencies by digitizing the onboarding journey with automation of underwriting activities and application of credit policies.
We are in early project planning to fully overhaul our commercial lending process, bringing in new technology that will allow for process automation and greater results from our bankers.

 

 

 

 

 

Driving Improvements in How Our Business Operates

 

Our 100% Florida-staffed call center provides 24/7 customer service, and in the second half of the year will implement a fully modernized software platform providing expanded self-serve options with additional security features.
Partnering with specialized providers, we have created greater scalability in mortgage fulfillment while maintaining cycle times.

 

Scaling and Evolving Our Culture

 

During the quarter we acquired new seasoned commercial banking leadership in the markets of Broward County and Tampa and added four new bankers to our team. Our goal is to add an additional ten commercial bankers before year end.

 

 

 

 

 

OTHER INFORMATION

 

Conference Call Information

 

Seacoast will host a conference call on Friday, July 27, 2018 at 10:00 a.m. (Eastern Time) to discuss the earnings results. Investors may call in (toll-free) by dialing (888) 466-9845 (passcode: 6353 188). Slides will be used during the conference call and may be accessed at Seacoast's website at SeacoastBanking.com by selecting "Presentations" under the heading "Investor Services." A replay of the call will be available for one month, beginning late afternoon of July 27, 2018 by dialing (888) 843-7419 and using passcode: 6353 188#.

 

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon of July 27, 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 $5.9 billion in assets and $4.7 billion in deposits as of June 30, 2018. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 49 traditional branches of its locally-branded wholly-owned subsidiary bank, Seacoast Bank, and seven commercial banking centers. Offices stretch from Ft. 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 http://www.Seacoastbanking.com/.

 

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, and for integration of banks that we have acquired, or expect to acquire, 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, estimates and intentions, 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.

 

 

 

 

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", "point to," "project," "could," "intend" 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, 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; 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 of mergers and acquisitions, include, without limitation: 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 merger 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 disruption, 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, 2017, 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 http://www.sec.gov.

 

 

 

 

FINANCIAL  HIGHLIGHTS (Unaudited)  

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

 

(Dollars in thousands, except per share data)  Quarterly Trends   Six Months Ended 
                             
    2Q'18    1Q'18    4Q'17    3Q'17    2Q'17    2Q'18    2Q'17 
Summary of Earnings                                   
Net income  $16,964   $18,027   $13,047   $14,216   $7,676   $34,991   $15,602 
Adjusted net income (1)   18,268    19,298    17,261    15,145    12,665    37,566    22,935 
Net interest income  (2)   50,294    49,853    48,402    45,903    44,320    100,147    82,697 
Net interest margin  (2), (3)   3.77%   3.80%   3.71%   3.74%   3.84%   3.78%   3.74%
                                    
Performance Ratios                                   
Return on average assets-GAAP basis (3)   1.16%   1.25%   0.91%   1.06%   0.61%   1.20%   0.64%
Return on average tangible assets (3),(4)   1.24    1.34    0.97    1.12    0.66    1.29    0.70 
Adjusted return on average tangible assets (1), (3), (4)   1.28    1.38    1.23    1.16    1.02    1.33    0.96 
                                    
Return on average shareholders' equity-GAAP basis (3)   9.59    10.52    7.87    9.59    5.43    10.04    6.08 
Return on average tangible shareholders' equity-GAAP basis (3),(4)   13.08    14.41    10.69    12.45    7.25    13.73    7.94 
Adjusted return on average tangible common equity (1), (3), (4)   13.49    14.82    13.49    12.80    11.22    14.14    11.00 
Efficiency ratio (5)   58.41    57.80    63.95    58.93    73.90    58.11    72.58 
Adjusted efficiency ratio (1)   57.31    57.05    52.55    57.69    61.20    57.18    62.82 
Noninterest income to total revenue   20.28    19.95    35.49    20.06    19.16    20.11    19.84 
Tangible common equity to tangible assets   9.56    9.33    9.27    9.13    8.88    9.56    8.88 
Loan-to-deposit ratio   83.51    84.10    82.54    85.18    83.48    83.51    83.48 
                                    
Per Share Data                                   
Net income diluted-GAAP basis  $0.35   $0.38   $0.28   $0.32   $0.18   $0.73   $0.38 
Net income basic-GAAP basis   0.36    0.38    0.29    0.33    0.18    0.74    0.38 
Adjusted earnings (1)   0.38    0.40    0.37    0.35    0.29    0.79    0.55 
                                    
Book value per share common   15.18    14.94    14.70    13.66    13.29    15.18    13.29 
Tangible book value per share   11.67    11.39    11.15    10.95    10.55    11.67    10.55 
Cash dividends declared   0.00    0.00    0.00    0.00    0.00    0.00    0.00 
                                    
                                    

(1)Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures."

 

(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).

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES  

 

   Quarterly Trends   YTD 
                 
(Dollars in thousands, except share and per share data)   2Q'18    1Q'18    4Q'17    3Q'17    2Q'17    2Q'18    2Q'17 
                                    
Interest on securities:                                   
     Taxable  $9,389   $9,361   $9,153   $8,823   $8,379   $18,750   $16,466 
     Nontaxable   216    243    231    189    206    459    493 
Interest and fees on loans   46,519    45,257    43,322    40,403    38,209    91,776    70,100 
Interest on federal funds sold and other investments   585    616    638    664    604    1,201    1,114 
         Total Interest Income   56,709    55,477    53,344    50,079    47,398    112,186    88,173 
                                    
Interest on deposits   1,988    1,538    1,246    930    854    3,526    1,478 
Interest on time certificates   2,629    2,179    2,032    1,266    814    4,808    1,380 
Interest on borrowed money   1,885    1,998    1,840    2,134    1,574    3,883    2,994 
         Total Interest Expense   6,502    5,715    5,118    4,330    3,242    12,217    5,852 
                                    
         Net Interest Income   50,207    49,762    48,226    45,749    44,156    99,969    82,321 
Provision for loan losses   2,529    1,085    2,263    680    1,401    3,614    2,705 
         Net Interest Income After Provision for Loan Losses   47,678    48,677    45,963    45,069    42,755    96,355    79,616 
                                    
Noninterest income:                                   
     Service charges on deposit accounts   2,674    2,672    2,566    2,626    2,435    5,346    4,857 
     Trust fees   1,039    1,021    941    967    917    2,060    1,797 
     Mortgage banking fees   1,336    1,402    1,487    2,138    1,272    2,738    2,824 
     Brokerage commissions and fees   461    359    273    351    351    820    728 
     Marine finance fees   446    573    313    137    326    1,019    460 
     Interchange income   3,076    2,942    2,836    2,582    2,671    6,018    5,419 
     BOLI income   1,066    1,056    1,100    836    757    2,122    1,490 
     Other   2,671    2,373    1,861    1,844    1,738    5,044    2,797 
    12,769    12,398    11,377    11,481    10,467    25,167    20,372 
     Gain on sale of VISA stock   0    0    15,153    0    0    0    0 
     Securities gains/(losses), net   (48)   (102)   112    (47)   21    (150)   21 
         Total Noninterest Income   12,721    12,296    26,642    11,434    10,488    25,017    20,393 
                                    
Noninterest expenses:                                   
     Salaries and wages   16,429    15,381    16,321    15,627    18,375    31,810    33,744 
     Employee benefits   3,034    3,081    2,812    2,917    2,935    6,115    6,003 
     Outsourced data processing costs   3,393    3,679    4,160    3,231    3,456    7,072    6,725 
     Telephone / data lines   643    612    538    573    648    1,255    1,180 
     Occupancy   3,316    3,117    3,265    2,447    4,421    6,433    7,578 
     Furniture and equipment   1,468    1,457    1,806    1,191    1,679    2,925    3,070 
     Marketing   1,344    1,252    1,490    1,298    1,074    2,596    1,996 
     Legal and professional fees   2,301    1,973    3,054    2,560    3,276    4,274    5,408 
     FDIC assessments   595    598    558    548    650    1,193    1,220 
     Amortization of intangibles   1,004    989    964    839    839    1,993    1,558 
     Foreclosed property expense and net (gain)/loss on sale   405    192    (7)   (296)   297    597    4 
     Other   4,314    4,833    4,223    3,427    3,975    9,147    7,885 
         Total Noninterest Expenses   38,246    37,164    39,184    34,361    41,625    75,410    76,371 
                                    
         Income Before Income Taxes   22,153    23,809    33,421    22,142    11,618    45,962    23,638 
Income taxes   5,189    5,782    20,374    7,926    3,942    10,971    8,036 
                                    
         Net Income  $16,964   $18,027   $13,047   $14,216   $7,676   $34,991   $15,602 
                                    
Per share of common stock:                                   
                                    
     Net income diluted  $0.35   $0.38   $0.28   $0.32   $0.18   $0.73   $0.38 
     Net income basic   0.36    0.38    0.29    0.33    0.18    0.74    0.38 
     Cash dividends declared   0.00    0.00    0.00    0.00    0.00    0.00    0.00 
                                    
Average diluted shares outstanding   47,974,118    47,688,388    46,472,538    43,792,108    43,556,285    47,827,646    41,538,769 
Average basic shares outstanding   47,164,909    46,951,829    45,541,099    43,151,248    42,841,152    47,058,958    40,851,273 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS 

  (Unaudited)  
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES      

 

   June 30,   March 31,   December 31,   September 30,   June 30, 
(Dollars in thousands, except share data)  2018   2018   2017   2017   2017 
                     
Assets                         
   Cash and due from banks  $123,927   $129,065   $104,039   $114,621   $88,133 
   Interest bearing deposits with other banks   7,594    6,794    5,465    10,657    20,064 
            Total Cash and Cash Equivalents   131,521    135,859    109,504    125,278    108,197 
                          
   Time deposits with other banks   10,562    12,553    12,553    14,591    16,426 
                          
   Debt Securities:                         
        Available for sale (at fair value)   954,906    982,958    949,460    990,299    1,010,244 
        Held to maturity (at amortized cost)   382,137    400,647    416,863    374,773    397,096 
            Total Debt Securities   1,337,043    1,383,605    1,366,323    1,365,072    1,407,340 
                          
   Loans held for sale   14,707    20,887    24,306    29,447    22,262 
                          
   Loans   3,974,016    3,897,125    3,817,377    3,384,991    3,330,075 
   Less: Allowance for loan losses   (28,924)   (28,118)   (27,122)   (26,232)   (26,000)
            Net Loans   3,945,092    3,869,007    3,790,255    3,358,759    3,304,075 
                          
   Bank premises and equipment, net   63,991    64,577    66,883    57,092    56,765 
   Other real estate owned   8,417    10,288    7,640    7,142    8,497 
   Goodwill   148,555    148,555    147,578    101,747    101,739 
   Other intangible assets, net   17,319    18,246    19,099    16,102    16,941 
   Bank owned life insurance   121,602    120,654    123,981    118,762    88,003 
   Net deferred tax assets   26,021    24,427    25,417    43,951    52,195 
   Other assets   97,851    94,443    116,590    102,356    98,855 
          Total Assets  $5,922,681   $5,903,101   $5,810,129   $5,340,299   $5,281,295 
                          
Liabilities and Shareholders' Equity                         
Liabilities                         
   Deposits                         
        Noninterest demand  $1,463,652   $1,488,261   $1,400,227   $1,284,118   $1,308,458 
        Interest-bearing demand   976,281    1,015,054    1,050,755    935,097    934,861 
        Savings   444,736    437,878    434,346    379,499    376,825 
        Money market   1,023,170    1,035,531    931,458    870,788    861,119 
        Other time certificates   413,643    410,108    414,277    288,398    278,890 
        Brokered time certificates   228,602    184,405    217,385    281,551    149,270 
        Time certificates of more than $250,000   147,356    148,306    144,272    73,149    66,035 
            Total Deposits   4,697,440    4,719,543    4,592,720    4,112,600    3,975,458 
                          
   Securities sold under agreements to repurchase   200,050    173,249    216,094    142,153    167,558 
   Federal Home Loan Bank borrowings   205,000    208,000    211,000    389,000    395,000 
   Subordinated debt   70,664    70,591    70,521    70,451    70,381 
   Other liabilities   33,364    29,857    30,130    31,654    95,521 
          Total Liabilities   5,206,518    5,201,240    5,120,465    4,745,858    4,703,918 
                          
Shareholders' Equity                         
   Common stock   4,716    4,698    4,693    4,351    4,339 
   Additional paid in capital   665,885    663,727    661,632    576,825    574,842 
   Retained earnings   64,790    47,825    29,914    16,161    1,945 
   Treasury stock   (2,884)   (2,279)   (2,359)   (1,730)   (1,768)
    732,507    713,971    693,880    595,607    579,358 
   Accumulated other comprehensive loss, net   (16,344)   (12,110)   (4,216)   (1,166)   (1,981)
          Total Shareholders' Equity   716,163    701,861    689,664    594,441    577,377 
          Total Liabilities & Shareholders' Equity  $5,922,681   $5,903,101   $5,810,129   $5,340,299   $5,281,295 
                          
Common Shares Outstanding   47,163,109    46,983,165    46,917,735    43,512,179    43,458,973 
                          
Note:  The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date.      

 

 

 

 

CONSOLIDATED QUARTERLY FINANCIAL  DATA   (Unaudited)  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES      

 

   Quarterly Trends 
         
(Dollars in thousands)   2Q'18    1Q'18    4Q'17    3Q'17    2Q'17 
                          
Credit Analysis                         
   Net charge-offs (recoveries) - non-acquired loans  $1,715   $117   $1,475   $612   $304 
   Net charge-offs (recoveries) - acquired loans   (25)   (116)   (139)   (333)   (405)
   Total net charge-offs (recoveries)  $1,690   $1   $1,336   $279   $(101)
                          
   TDR valuation adjustments  $33   $88   $37   $169   $64 
                          
   Net charge-offs (recoveries) to average loans - non-acquired loans   0.17%   0.01%   0.16%   0.07%   0.04%
   Net charge-offs (recoveries) to average loans - acquired loans   (0.00)   (0.01)   (0.02)   (0.04)   (0.05)
   Total net charge-offs (recoveries) to average loans   0.17    0.00    0.14    0.03    (0.01)
                          
   Loan loss provision - non-acquired loans  $2,591   $1,383   $2,053   $795   $1,690 
   Loan loss provision (recapture) - acquired loans   (62)   (298)   210    (115)   (289)
   Total loan loss provision  $2,529   $1,085   $2,263   $680   $1,401 
                          
   Allowance for loan losses - non-acquired loans  $28,384   $27,541   $26,363   $25,822   $25,809 
   Allowance for loan losses - acquired loans   540    577    759    410    191 
   Total allowance for loan losses  $28,924   $28,118   $27,122   $26,232   $26,000 
                          
   Non-acquired loans at end of period  $3,221,569   $3,063,618   $2,922,609   $2,837,490   $2,722,866 
   Purchased noncredit impaired loans at end of period   739,232    819,814    877,351    537,057    594,077 
   Purchased credit impaired loans at end of period   13,215    13,693    17,417    10,443    13,132 
   Total loans  $3,974,016   $3,897,125   $3,817,377   $3,384,990   $3,330,075 
                          
   Non-acquired loans allowance for loan losses to non-acquired loans at end of period   0.88%   0.90%   0.90%   0.91%   0.95%
   Total allowance for loan losses to total loans at end of period   0.73    0.72    0.71    0.77    0.78 
   Acquired loans allowance for loan losses to acquired loans at end of period   0.07    0.07    0.08    0.07    0.03 
   Discount for credit losses to acquired loans at end of period   2.31    2.32    2.33    2.77    3.37 
                          
End of Period                         
   Nonperforming loans - non-acquired  $19,578   $12,628   $12,569   $10,877   $10,541 
   Nonperforming loans - acquired   6,624    6,711    6,955    3,498    6,632 
   Other real estate owned - non-acquired   354    2,246    2,246    1,748    1,748 
   Other real estate owned - acquired   4,969    4,969    1,632    1,632    1,645 
   Bank branches closed included in other real estate owned   3,094    3,073    3,762    3,762    5,104 
   Total nonperforming assets  $34,619   $29,627   $27,164   $21,517   $25,670 
                          
   Restructured loans (accruing)  $14,241   $14,777   $15,559   $16,181   $16,941 
                          
   Nonperforming loans to loans at end of period - non-acquired   0.61%   0.41%   0.43%   0.38%   0.39%
   Nonperforming loans to loans at end of period - acquired   0.88    0.81    0.78    0.64    1.09 
   Allowance for loan losses to nonperforming loans - non-acquired   144.98    218.10    209.75    237.40    244.84 
   Total nonperforming loans to loans at end of period   0.66    0.50    0.51    0.42    0.52 
                          
   Nonperforming assets to total assets - non-acquired   0.39%   0.30%   0.32%   0.31%   0.33%
   Nonperforming assets to total assets - acquired   0.19    0.20    0.15    0.10    0.16 
   Total nonperforming assets to total assets   0.58    0.50    0.47    0.40    0.49 
                          
Average Balances                         
   Total average assets  $5,878,035   $5,851,688   $5,716,230   $5,316,119   $5,082,002 
   Less: Intangible assets   166,393    167,136    149,432    118,364    114,563 
   Total average tangible assets  $5,711,642   $5,684,552   $5,566,798   $5,197,755   $4,967,439 
                          
   Total average equity  $709,674   $695,240   $657,100   $587,919   $567,448 
   Less: Intangible assets   166,393    167,136    149,432    118,364    114,563 
   Total average tangible equity  $543,281   $528,104   $507,668   $469,555   $452,885 
                          
    June 30,    March 31,    December 31,    September 30,    June 30, 
LOANS   2018    2018    2017    2017    2017 
                          
Construction and land development  $359,070   $374,244   $343,125   $245,151   $230,574 
Commercial real estate - Owner Occupied   812,306    796,898    791,408    688,224    654,783 
Commercial real estate - Non-Owner Occupied   888,989    848,341    848,584    789,867    809,285 
Residential real estate   1,103,946    1,065,152    1,038,810    941,169    991,144 
Consumer   190,835    195,788    189,436    185,122    179,151 
Commercial and financial   618,870    616,702    606,014    535,457    465,138 
       Total Loans  $3,974,016   $3,897,125   $3,817,377   $3,384,990   $3,330,075 
                          

 

 

 

 

 

AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES (1)   (Unaudited)  

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES 

     

 

         
    2Q'18    1Q'18     2Q'17 
    Average         Yield/    Average         Yield/    Average         Yield/ 
(Dollars in thousands)   Balance    Interest    Rate    Balance    Interest    Rate    Balance    Interest    Rate 
Assets                                             
Earning assets:                                             
    Securities:                                             
         Taxable  $1,324,280   $9,389    2.84%  $1,361,277   $9,361    2.75%  $1,261,017   $8,379    2.66%
         Nontaxable   32,055    273    3.41    32,640    307    3.76    28,092    316    4.50 
                   Total Securities   1,356,335    9,662    2.85    1,393,917    9,668    2.77    1,289,109    8,695    2.70 
                                              
    Federal funds sold and other                                             
         investments   49,387    585    4.75    56,173    616    4.45    72,535    604    3.34 
                                              
    Loans, net   3,948,460    46,549    4.73    3,872,369    45,284    4.74    3,266,812    38,263    4.70 
                                              
                  Total Earning Assets   5,354,182    56,796    4.25    5,322,459    55,568    4.23    4,628,456    47,562    4.12 
                                              
Allowance for loan losses   (29,234)             (27,469)             (25,276)          
Cash and due from banks   110,549              113,899              99,974           
Premises and equipment   64,445              65,932              59,415           
Intangible assets   166,393              167,136              114,563           
Bank owned life insurance   121,008              122,268              87,514           
Other assets   90,692              87,463              117,356           
                                              
                  Total Assets  $5,878,035             $5,851,688             $5,082,002           
                                              
Liabilities and Shareholders' Equity                                             
Interest-bearing liabilities:                                             
      Interest-bearing demand  $996,929   $492    0.20   $1,001,672   $450    0.18   $949,981   $262    0.11 
      Savings   439,691    118    0.11    435,433    104    0.10    378,989    51    0.05 
      Money market   1,027,705    1,378    0.54    976,498    984    0.41    868,427    541    0.25 
      Time deposits   790,404    2,629    1.33    776,807    2,179    1.14    432,805    814    0.75 
      Federal funds purchased and                                             
        securities sold under agreements to repurchase   179,540    334    0.75    175,982    274    0.63    174,715    194    0.45 
      Federal Home Loan Bank borrowings   160,846    741    1.85    276,389    1,030    1.51    323,780    780    0.97 
      Other borrowings   70,623    810    4.60    70,550    694    3.99    70,343    600    3.42 
                                              
                     Total Interest-Bearing Liabilities   3,665,738    6,502    0.71    3,713,331    5,715    0.62    3,199,040    3,242    0.41 
                                              
Noninterest demand   1,473,331              1,413,967              1,283,255           
Other liabilities   29,292              29,150              32,259           
                     Total Liabilities   5,168,361              5,156,448              4,514,554           
                                              
Shareholders' equity   709,674              695,240              567,448           
                                              
                     Total Liabilities & Equity  $5,878,035             $5,851,688             $5,082,002           
                                              
Interest expense as a % of earning assets             0.49              0.44              0.28 
Net interest income as a % of earning assets       $50,294    3.77%       $49,853    3.80%       $44,320    3.84%
                                              
                                              

 

(1)On a fully taxable equivalent basis. All yields and rates have been computed on an annualized basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.

 

 

 

 

CONSOLIDATED QUARTERLY FINANCIAL DATA

  (Unaudited)  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES      

 

                     
   June 30,   March 31,   December 31,   September 30,   June 30, 
(Dollars in thousands)  2018   2018   2017   2017   2017 
                     
Customer Relationship Funding                         
Noninterest demand                         
Commercial  $1,154,225   $1,163,119   $1,073,539   $997,749   $995,720 
Retail   236,838    252,055    253,454    217,809    238,506 
Public funds   44,182    49,014    50,837    43,686    47,691 
Other   28,407    24,073    22,397    24,874    26,541 
    1,463,652    1,488,261    1,400,227    1,284,118    1,308,458 
                          
Interest-bearing demand                         
Commercial   181,646    164,359    157,272    156,176    155,178 
Retail   681,615    700,262    702,616    670,705    659,906 
Public funds   113,020    150,433    190,867    108,216    119,777 
    976,281    1,015,054    1,050,755    935,097    934,861 
                          
Total transaction accounts                         
Commercial   1,335,871    1,327,478    1,230,811    1,153,925    1,150,898 
Retail   918,453    952,317    956,070    888,514    898,412 
Public funds   157,202    199,447    241,704    151,902    167,468 
Other   28,407    24,073    22,397    24,874    26,541 
    2,439,933    2,503,315    2,450,982    2,219,215    2,243,319 
                          
Savings   444,736    437,878    434,346    379,499    376,825 
                          
Money market                         
Commercial   408,005    410,527    375,471    360,567    351,871 
Retail   522,783    522,882    471,086    431,325    427,575 
Public funds   92,382    102,122    84,901    78,896    81,673 
    1,023,170    1,035,531    931,458    870,788    861,119 
                          
Time certificates of deposit   789,601    742,819    775,934    643,098    494,195 
Total Deposits  $4,697,440   $4,719,543   $4,592,720   $4,112,600   $3,975,458 
                          
Customer sweep accounts  $200,050   $173,249   $216,094   $142,153   $167,558 
                          
Total core customer funding (1)  $4,107,889   $4,149,973   $4,032,880   $3,611,655   $3,648,821 
                          

 

(1)Total deposits and customer sweep accounts, excluding certificates of deposit.

 

 

 

 

Explanation of Certain Unaudited Non-GAAP Financial Measures

 

This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’ understanding of the Company’s business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.

 

 

 

 

                             
   Quarterly Trends   YTD 
                      June 30,   June 30, 
(Dollars in thousands except per share data)     2Q'18    1Q'18   4Q'17   3Q'17   2Q'17   2018   2017 
                             
Net income  $16,964   $18,027   $13,047   $14,216   $7,676   $34,991   $15,602 
                                    
Gain on sale of VISA stock   0    0    (15,153)   0    0    0    0 
Securities (gains)/losses, net   48    102    (112)   47    (21)   150    (21)
     Total Adjustments to Revenue   48    102    (15,265)   47    (21)   150    (21)
                                    
Merger related charges   695    470    6,817    491    5,081    1,165    5,614 
Amortization of intangibles   1,004    989    963    839    839    1,993    1,558 
Business continuity expenses - Hurricane Irma   0    0    0    352    0    0    0 
Branch reductions and other expense initiatives   0    0    0    (127)   1,876    0    4,448 
     Total Adjustments to Noninterest Expense   1,699    1,459    7,780    1,555    7,796    3,158    11,620 
                                    
Effective tax rate on adjustments   (443)   (538)   3,147    (673)   (2,786)   (981)   (4,266)
Effect of change in corporate tax rate   0    248    8,552    0    0    248    0 
     Adjusted Net Income  $18,268   $19,298   $17,261   $15,145   $12,665   $37,566   $22,935 
Earnings per diluted share, as reported   0.35    0.38    0.28    0.32    0.18    0.73    0.38 
     Adjusted Earnings per Diluted Share   0.38    0.40    0.37    0.35    0.29    0.79    0.55 
Average shares outstanding (000)   47,974    47,688    46,473    43,792    43,556    47,828    41,539 
                                    
Revenue  $62,928   $62,058   $74,868   $57,183   $54,644   $124,985   $102,714 
Total Adjustments to Revenue   48    102    (15,265)   47    (21)   150    (21)
     Adjusted Revenue   62,976    62,160    59,603    57,230    54,623    125,135    102,693 
                                    
Noninterest Expense   38,246    37,164    39,184    34,361    41,625    75,410    76,371 
Total Adjustments to Noninterest Expense   1,699    1,459    7,780    1,555    7,796    3,158    11,620 
     Adjusted Noninterest Expense   36,547    35,705    31,404    32,806    33,829    72,252    64,751 
                                    
Adjusted Noninterest Expense   36,547    35,705    31,404    32,806    33,829    72,252    64,751 
Foreclosed property expense and net (gain)/loss on sale   405    192    (7)   (296)   297    597    4 
Net Adjusted Noninterest Expense   36,142    35,513    31,411    33,102    33,532    71,655    64,747 
                                    
Adjusted Revenue   62,976    62,160    59,603    57,230    54,623    125,135    102,693 
Impact of FTE adjustment   87    91    174    154    164    178    375 
Adjusted Revenue on a fully taxable equivalent basis   63,063    62,251    59,777    57,384    54,787    125,313    103,068 
     Adjusted Efficiency Ratio   57.3%   57.1%   52.6%   57.7%   61.2%   57.2%   62.8%
                                    
Average Assets  $5,878,035   $5,851,688   $5,716,230   $5,316,119   $5,082,002   $5,864,934   $4,891,929 
Less average goodwill and intangible assets   (166,393)   (167,136)   (149,432)   (118,364)   (114,563)   (166,762)   (96,819)
Average Tangible Assets   5,711,642    5,684,552    5,566,798    5,197,755    4,967,439    5,698,172    4,795,110 
                                    
Return on Average Assets (ROA)   1.16%   1.25%   0.91%   1.06%   0.61%   1.20%   0.64%
Impact of removing average intangible assets and related amortization   0.08    0.09    0.06    0.06    0.05    0.09    0.06 
    Return on Tangible Average Assets (ROTA)   1.24    1.34    0.97    1.12    0.66    1.29    0.70 
Impact of other adjustments for Adjusted Net Income   0.04    0.04    0.26    0.04    0.36    0.04    0.26 
    Adjusted Return on Average Tangible Assets   1.28    1.38