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

 

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________

 

FORM 8-K

________________

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported) October 25, 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.  ¨

 

 

 

 

 

SEACOAST BANKING CORPORATION OF FLORIDA

 

 

Item 2.02Results of Operations and Financial Condition

 

On October 25, 2018, Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the quarter ended September 30, 2018.

 

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

 

Item 7.01Regulation FD Disclosure

 

On October 26, 2018, Seacoast held an investor conference call to discuss its financial results for the quarter ended September 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 September 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 October 25, 2018 with respect to Seacoast’s financial results for the quarter ended September 30, 2018
     
99.2   Transcript of Seacoast’s investor conference call held on October 26, 2018 to discuss the Company’s financial results for the quarter ended September 30, 2018
     
99.3   Data on website containing information used in the conference call held on October 26, 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.

 

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.

 

 

 

 

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:  October 31, 2018 By: /s/ Charles M. Shaffer  
    Charles M. Shaffer  
    Executive Vice President and Chief Financial Officer  

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.  

 

Description

 

99.1   Press Release dated October 25, 2018 with respect to Seacoast’s financial results for the quarter ended September 30, 2018
     
99.2   Transcript of Seacoast’s investor conference call held on October 26, 2018 to discuss the Company’s financial results for the quarter ended September 30, 2018
     
99.3   Data on website containing information used in the conference call held on October 26, 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

Chuck.Shaffer@seacoastbank.com

 

 

SEACOAST REPORTS THIRD QUARTER 2018 RESULTS

 

Net Income Increased 15% Year-Over-Year to $16.3 Million

 

Third Consecutive Quarter of Record Consumer and Small Business Loan Originations, up 45% Year-Over-Year

 

First Green Acquisition Completed

 

STUART, Fla., October 25, 2018 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida (“Seacoast” or “the Company”) (NASDAQ: SBCF) reported net income of $16.3 million, or $0.34 per share for the third quarter of 2018, up 15% or $2.1 million year-over-year. Seacoast reported adjusted net income1 of $17.6 million, or $0.37 per share, representing a 16% or $2.5 million increase year-over-year.

 

For the third quarter 2018, return on average tangible assets was 1.18%, return on average tangible shareholders’ equity was 12.0%, and the efficiency ratio was 57.0%, compared to 1.24%, 13.1% and 58.4%, respectively, in the prior quarter and 1.12%, 12.5%, and 58.9%, respectively, in the third quarter of 2017. Adjusted return on average tangible assets1 was 1.22%, adjusted return on average tangible shareholders’ equity1 was 12.4%, and the adjusted efficiency ratio1 was 56.3%, compared to 1.28%, 13.5%, and 57.3%, respectively, in the prior quarter, and 1.16%, 12.8%, and 57.7%, respectively, in the third quarter of 2017.

 

Dennis S. Hudson, III, Seacoast’s Chairman and CEO, said, “Our shareholders continue to benefit from Seacoast's balanced growth strategy, combining organic growth with value-creating acquisitions. Our data analytics and proprietary tools are generating strong growth and returns to our franchise, producing our third consecutive quarter of record consumer and small business originations. Our underlying fundamentals are robust, with increasing operating leverage, a strong balance sheet, and a low-cost deposit base, positioning us for continued growth and community banking leadership."

 

Hudson added, "Our acquisition of First Green Bancorp, completed on October 19, is exceeding our expectations and we fully expect to exceed the returns that we projected at the time of announcement."

 

Charles M. Shaffer, Seacoast’s Chief Financial Officer, said, “We maintained our disciplined approach to credit, liquidity, and expense management, while continuing to make investments in technology and talent, resulting in an increase in tangible book value per share to $12.01 at period end, situating us well to achieve our Vision 2020 goals. Our balance sheet continues to perform as expected, with the net interest margin expanding 5 basis points, loan yields expanding 10 basis points, securities yields expanding 15 basis points, and the cost of deposits only increasing 4 basis points. With a loan to deposit ratio of 86% and a ratio of tangible common equity to tangible assets of 9.8%, we have the resources to invest in our organic growth initiatives while maintaining the granularity and quality of our loan portfolio."

 

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

 

 

 

 

Notable Items Impacting the Third Quarter

 

Results for the third quarter were impacted by a $3.1 million increase in the reserve for a single impaired loan, originated in 2007, which we discussed last quarter upon moving to nonaccrual. The increase in this specific reserve impacted earnings per diluted share by 5 cents.

 

Completion of the Acquisition of First Green Bancorp

 

On October 19, 2018, we completed the acquisition of First Green Bancorp, Inc., headquartered in Orlando, Florida. First Green operated seven branches in the Orlando, Daytona and Ft. Lauderdale markets, with deposits of approximately $664 million and loans of $676 million at September 30, 2018. We expect the acquisition to have a tangible book value earn-back of less than one year using the cross over method and to provide an internal rate of return well over 25%. We are ahead of schedule on our expense consolidation efforts, and are confident we will exceed our announced returns and accretion targets.

 

"We welcome First Green's customers and associates to the Seacoast family, and look forward to working together as we build on our strengths and expand our franchise," Hudson added.

 

Third Quarter 2018 Financial Highlights

 

Income Statement

 

Net income was $16.3 million, or $0.34 per diluted share, compared to $17.0 million or $0.35 for the prior quarter and $14.2 million or $0.32 for the third quarter of 2017. For the nine months ended September 30, 2018, net income was $51.3 million compared to $29.8 million for the nine months ended September 30, 2017. Adjusted net income1 was $17.6 million, or $0.37 per diluted share, compared to $18.3 million or $0.38 for the prior quarter and $15.1 million or $0.35 for the third quarter of 2017. For the nine months ended September 30, 2018, adjusted net income1 was $55.2 million compared to $38.1 million for the nine months ended September 30, 2017.

 

Net revenues were $63.9 million, an increase of $0.9 million or 1% compared to the prior quarter, and an increase of $6.7 million or 12% compared to the third quarter of 2017. For the nine months ended September 30, 2018, net revenues were $188.8 million, an increase of $28.9 million or 18% compared to the nine months ended September 30, 2017. Adjusted revenues1 were $63.9 million, an increase of $0.9 million, or 1%, from the prior quarter and an increase of $6.7 million, or 12% from the third quarter of 2017. For the nine months ended September 30, 2018, adjusted revenues1 were $189.0 million, an increase of $29.1 million or 18% compared to the nine months ended September 30, 2017.

 

Net interest income totaled $51.6 million, an increase of $1.4 million or 3% from the prior quarter and an increase of $5.8 million or 13% from the third quarter of 2017. For the nine months ended September 30, 2018, net interest income totaled $151.5 million, an increase of $23.5 million or 18% compared to the nine months ended September 30, 2017.

 

Net interest margin was 3.82% in the current quarter compared to 3.77% in the prior quarter and 3.74% in the third quarter of 2017. Removing the impact of accretion of purchase discounts on acquired loans, the net interest margin was 3.64% in the current quarter, compared to 3.61% in the prior quarter and 3.54% in the third quarter of 2017. Quarter over quarter, the yield on loans expanded 10 basis points, the yield on securities expanded 15 basis points, and the cost of deposits increased 4 basis points.

 

Noninterest income totaled $12.3 million, a decrease of $0.4 million or 3% compared to the prior quarter and an increase of $0.9 million or 7% from the third quarter of 2017. For the nine months ended September 30, 2018, noninterest income totaled $37.3 million, 17% higher than the nine months ended September 30, 2017. Growth in deposits and increased customer engagement resulted in increases in the 2018 year to date period of $1.4 million in interchange income and $0.7 million in service charges on deposits when compared to the 2017 year to date period. Wealth management revenue, which includes trust and brokerage services, continues to benefit from prior investment in technology and talent, resulting in an increase of $0.6 million compared to the nine months ended September 30, 2017. Partially offsetting, mortgage banking fees decreased by $1.1 million during the nine months ended September 30, 2018. The prior year benefited from two larger portfolio sales over the last two quarters of 2017.

 

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

 

 

 

 

The provision for loan losses was $5.8 million, compared to $2.5 million in the prior quarter and $0.7 million in the third quarter of 2017, reflecting the effects of portfolio growth as well as an increase of $3.1 million in the reserve for a single impaired loan. This loan, which we discussed last quarter upon moving to nonaccrual, was originated in 2007. This increase in specific reserve added 9 basis points to the nonacquired loan allowance.

 

Noninterest expense was $37.4 million, a decrease of $0.8 million or 2% to the prior quarter and an increase of $3.0 million or 9% from the third quarter of 2017. Increases in salaries and wages and employee benefits of $0.9 million quarter-over-quarter was the result of investments in commercial bankers and talent to scale our organization. More than offsetting, expenses were well controlled during the quarter across other line items. For the nine months ended September 30, 2018, noninterest expense was $112.8 million compared to $110.7 million for the nine months ended September 30, 2017. Adjusted noninterest expense1 was $35.9 million compared to $36.5 million in the prior quarter, and $32.8 million in the third quarter of 2017. For the nine months ended September 30, 2018, adjusted noninterest expense1 was $108.2 million compared to $97.6 million for the nine months ended September 30, 2017. As a percentage of average tangible assets, adjusted noninterest expense in the current quarter was 2.48% compared to 2.57% for the prior quarter and 2.50% for the third quarter of 2017.

 

Seacoast recorded $4.4 million in income tax expense in the current quarter, compared to $5.2 million in the prior quarter and $7.9 million in the third quarter of 2017. Tax benefits related to stock-based compensation were $0.4 million in the current quarter compared to $0.2 million in the prior quarter.

 

Year to date adjusted revenues1 increased 18% compared to prior year while adjusted noninterest expense1 increased 10%, providing 8% operating leverage.

 

The efficiency ratio was 57.0% compared to 58.4% in the prior quarter and 58.9% in the third quarter of 2017. The adjusted efficiency ratio1 was 56.3% compared to 57.3% in the prior quarter and 57.7% in the third quarter of 2017.

 

Balance Sheet

 

At September 30, 2018, the Company had total assets of $5.9 billion and total shareholders' equity of $733 million.  Book value per share was $15.50 and tangible book value per share was $12.01, compared to $15.18 and $11.67, respectively, at June 30, 2018 and $13.66 and $10.95, respectively, at September 30, 2017.

 

Debt Securities totaled $1.3 billion at September 30, 2018, a decrease of $46 million compared to prior quarter and a decrease of $74 million from September 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 $4.0 billion at September 30, 2018, an increase of $80 million compared to prior quarter or 9% annualized in the current quarter, and an increase of $667 million or 20% from September 30, 2017. Excluding the impact of two acquisitions in the fourth quarter of 2017, loans increased $267 million or 8% from September 30, 2017. Loan production remains strong, supported by analytics and expansion markets of Tampa, Orlando, and South Florida.

 

For the third consecutive quarter, consumer and small business originations reached record highs, resulting in an increase of 20% from the prior quarter to $125.9 million.

 

Commercial originations were $131.0 million compared to $140.4 million in the prior quarter. Towards the end of the quarter, $16 million in production slid to fourth quarter, and was closed in October.

 

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 199% of total risk based capital, respectively.

 

Closed residential loans retained increased 5% quarter-over-quarter to $78.7 million.

 

Pipelines (loans in underwriting and approval or approved and not yet closed) remained strong, totaling $315.2 million.

 

Consumer and small business pipelines reached a new peak of $59.7 million, an increase of 13% sequentially and 27% compared to the prior year.

 

Commercial pipelines were $196.5 million, an increase of 1% sequentially and an increase of 26% compared to the prior year.

 

Residential pipelines were $58.9 million, down $4.8 million from the prior quarter.

 

Total deposits were $4.6 billion as of September 30, 2018, a decrease of $54 million sequentially and an increase of $531 million, or 13%, from the prior year.

 

Excluding acquired deposits, noninterest bearing deposits increased 8% while total deposits increased 4% compared to September 30, 2017.

 

Despite the impact of seasonal trends on overall deposits, year-over-year, interest bearing deposits (interest bearing demand, savings and money market deposits) increased $216 million, or 10%, to $2.4 billion, noninterest bearing demand deposits increased $205 million, or 16%, to $1.5 billion, and CDs increased $199 million, or 55%, to $561 million.

 

The Company’s balance sheet continues to be primarily core deposit funded. Core customer funding was $4.1 billion at September 30, 2018, flat compared to June 30, 2018 and an increase of 13% compared to September 30, 2017.

 

Overall cost of deposits remains low at 43 basis points, an increase of only 4 basis points from the prior quarter.

 

Third quarter return on average tangible assets (ROTA) was 1.18%, compared to 1.24% in the prior quarter and 1.12% in the third quarter of 2017. Adjusted ROTA1 was 1.22% compared to 1.28% in the prior quarter and 1.16% in the third quarter of 2017.

 

Capital

 

Third quarter return on average tangible common equity (ROTCE) was 12.04%, compared to 13.08% in the prior quarter and 12.45% in the third quarter of 2017. Adjusted ROTCE1 was 12.43% compared to 13.49% in the prior quarter and 12.80% in the third quarter of 2017.

 

The common equity tier 1 capital ratio (CET1) was 13.1%, total capital ratio was 15.5% and the tier 1 leverage ratio was 11.3% at September 30, 2018.

 

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

 

 

 

 

Tangible common equity to tangible assets was 9.85% at September 30, 2018, compared to 9.56% at June 30, 2018, and 9.13% at September 30, 2017.

 

Asset Quality

 

Nonperforming loans to total loans outstanding was 0.56% at September 30, 2018, 0.61% at June 30, 2018, and 0.38% at September 30, 2017.

 

Nonperforming assets to total assets was 0.52% at September 30, 2018, 0.58% at June 30, 2018 and 0.40% at September 30, 2017. Nonperforming assets decreased $3.8 million, the result of the sale of a single REO property. The remaining balance includes $3.1 million in closed branch properties held as REO.

 

The ratio of allowance for loan losses to total loans was 0.83% at September 30, 2018, 0.73% at June 30, 2018, and 0.77% at September 30, 2017. The ratio of allowance for loan losses to non-acquired loans was 0.98% at September 30, 2018, 0.88% at June 30, 2018, and 0.91% at September 30, 2017. The increase in coverage is primarily the result of a $3.1 million increase in the reserve for a single impaired loan.

 

Net charge-offs were $0.8 million or 0.08% for the current quarter compared to $1.7 million in the prior quarter. Net charge-offs for the four most recent quarters averaged 0.10%.

 

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

 

 

 

          

FINANCIAL HIGHLIGHTS      

(Amounts in thousands except per share data)

 

  (Unaudited)      

 

 
   Quarterly Trends 
                     
   3Q'18   2Q'18   1Q'18   4Q'17   3Q'17 
Selected Balance Sheet Data:                    
Total Assets  $5,930,934   $5,922,681    5,903,101   $5,810,129   $5,340,413 
Gross Loans   4,059,323    3,974,016    3,897,125    3,817,377    3,384,991 
Total Deposits   4,643,510    4,697,440    4,719,543    4,592,720    4,112,600 
                          
Performance Measures:                         
Net Income  $16,322   $16,964    18,027   $13,047   $14,216 
Net Interest Margin   3.82%   3.77%   3.80%   3.71%   3.74%
Average Diluted Shares Outstanding   48,029    47,974    47,688    46,473    43,792 
Diluted Earnings Per Share (EPS)  $0.34   $0.35    0.38   $0.28   $0.32 
Return on (annualized):                         
Average Assets (ROA)   1.10%   1.16%   1.25%   0.91%   1.06%
Average Return on Tangible Assets (ROTA)   1.18    1.24    1.34    0.97    1.12 
Average Tangible Common Equity (ROTCE)   12.04    13.08    14.41    10.69    12.45 
Efficiency Ratio   57.04    58.41    57.80    63.95    58.93 
                          
Adjusted Operating Measures1:                         
Adjusted Net Income  $17,626   $18,268    19,298   $17,261   $15,145 
Adjusted Diluted EPS   0.37    0.38    0.40    0.37    0.35 
Adjusted ROTA   1.22%   1.28%   1.38%   1.23%   1.16%
Adjusted ROTCE   12.43    13.49    14.82    13.49    12.80 
Adjusted Efficiency Ratio   56.29    57.31    57.05    52.55    57.69 
Adjusted Noninterest Expenses as a                         
Percent of Average Tangible Assets   2.48    2.57    2.55    2.24    2.50 
Other Data                         
Market capitalization2  $1,380,275   $1,489,411    1,243,644   $1,182,796   $1,039,506 
Full-time equivalent employees   835    826    814    805    762 
Number of ATMs   86    87    86    85    76 
Full service banking offices   49    49    49    51    45 
Registered online users   94,400    92,107    91,636    83,881    78,880 
Registered mobile devices   73,300    69,038    65,336    62,516    58,032 

 

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

 

 

 

 

Vision 2020

 

We remain confident in our ability to achieve our Vision 2020 targets announced early last year.

 

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

 

Third Quarter Strategic Highlights

 

Modernizing How We Sell

 

This quarter we saw record consumer and small business loan originations. The increase is attributable, in part, to our commitment to serving small businesses and the expansion of our Small Business Administration (SBA) program. On an organic basis, small businesses represent our fastest growing customer segment with 5% growth year-over year. This growth is supported by our proprietary Connections portal, which provides our teams with greater access and insight to customer service and sales opportunities to better meet customer needs.

 

Seacoast Wealth Management added almost $100 million in new assets under management year to date. On a net basis, assets under management have grown 21% year over year. 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.

 

Lowering Our Cost to Serve

 

We expect to consolidate five banking center locations in the fourth quarter in conjunction with the acquisition of First Green Bank and in alignment with our Vision 2020 objective of reducing our footprint to meet the evolving demands of our customers. Average deposits per branch are expected to surpass $100 million by year end.

 

New digital service enhancements launched in October include mobile approval capability for wire transfers, same day ACH, and card controls, providing even greater digital access for our customers.

 

We continue to aggressively move transactions from the branch network to digital, with 53% of transactions now originating through our digital channels.

 

Driving Improvements in How Our Business Operates

 

In the third quarter we launched a large-scale initiative to implement the fully digital loan origination platform across all business units. This follows our successful rollout of our fully digital mortgage banking origination platform. By investing in new technology, improving our digital offerings, and providing best in class analytics, we continue to create efficiency in our lending operations and increase the productivity of our Bankers.

 

Our expense control initiative launched at the end of the second quarter, designed to reduce overhead and help us become more streamlined in our approach, will continue into next year. We are targeting $7 million in expense reduction in 2019 which will be reinvested in expanding bankers in Tampa and South Florida, installation of fully digital loan origination platform, and development of digital direct fulfillment for small business lending. These investments will support growth and greater operating leverage into 2020.

 

 

 

 

Scaling and Evolving Our Culture

 

In August we announced Allen Brinkman as Market President and Head of Commercial Banking for the Tampa market. Brinkman brings senior leadership in a market that has significant opportunity for growth. Brinkman previously worked as President and CEO of SunTrust for the Tampa MSA.

 

On July 1, we implemented a $15 per hour minimum pay rate company-wide. Our associates are our most important strength, and paying nearly twice the state minimum wage supports our ability to attract and retain the best talent in the market.

 

OTHER INFORMATION

 

Conference Call Information

Seacoast will host a conference call on Friday, October 26, 2018 at 10:00 a.m. (Eastern Time) to discuss the earnings results. Investors may call in (toll-free) by dialing (888) 294-4838 (passcode: 7746 433). 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 October 26, 2018 by dialing (888) 843-7419 (domestic) and using passcode: 7746 433#.

 

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 October 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 $4.6 billion in deposits as of September 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   Nine Months Ended 
                             
   3Q'18   2Q'18   1Q'18   4Q'17   3Q'17   3Q'18   3Q'17 
Summary of Earnings                            
Net income  $16,322   $16,964   $18,027   $13,047   $14,216   $51,313   $29,818 
Adjusted net income (1)   17,626    18,268    19,298    17,261    15,145    55,192    38,080 
Net interest income  (2)   51,709    50,294    49,853    48,402    45,903    151,856    128,600 
Net interest margin  (2), (3)   3.82%   3.77%   3.80%   3.71%   3.74%   3.79%   3.74%
                                    
Performance Ratios                                   
Return on average assets-GAAP basis (3)   1.10%   1.16%   1.25%   0.91%   1.06%   1.17%   0.79%
Return on average tangible assets (3),(4)   1.18    1.24    1.34    0.97    1.12    1.25    0.85 
Adjusted return on average tangible assets (1), (3), (4)   1.22    1.28    1.38    1.23    1.16    1.29    1.03 
                                    
Return on average shareholders' equity-GAAP basis (3)   8.89    9.59    10.52    7.87    9.59    9.65    7.37 
Return on average tangible shareholders' equity-GAAP basis (3),(4)   12.04    13.08    14.41    10.69    12.45    13.14    9.57 
Adjusted return on average tangible common equity (1), (3), (4)   12.43    13.49    14.82    13.49    12.80    13.54    11.65 
Efficiency ratio (5)   57.04    58.41    57.80    63.95    58.93    57.75    67.70 
Adjusted efficiency ratio (1)   56.29    57.31    57.05    52.55    57.69    56.88    60.98 
Noninterest income to total revenue   19.31    20.28    19.95    35.49    20.06    19.84    19.92 
Tangible common equity to tangible assets   9.85    9.56    9.33    9.27    9.13    9.85    9.13 
Loan-to-deposit ratio   86.25    83.51    84.10    82.54    85.18    84.62    85.18 
                                    
Per Share Data                                   
Net income diluted-GAAP basis  $0.34   $0.35   $0.38   $0.28   $0.32   $1.07   $0.70 
Net income basic-GAAP basis   0.35    0.36    0.38    0.29    0.33    1.09    0.72 
Adjusted earnings (1)   0.37    0.38    0.40    0.37    0.35    1.15    0.90 
                                    
Book value per share common   15.50    15.18    14.94    14.70    13.66    15.50    13.66 
Tangible book value per share   12.01    11.67    11.39    11.15    10.95    12.01    10.95 
Cash dividends declared                            
                                    

(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).
(6) Common shares outstanding multiplied by closing bid price on last day of each period.

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)                  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES 
     
   Quarterly Trends   Nine Months Ended 
                             
(Dollars in thousands, except per share data)  3Q'18   2Q'18   1Q'18   4Q'17   3Q'17   3Q'18   3Q'17 
                             
Interest on securities:                            
Taxable  $9,582   $9,389   $9,361   $9,153   $8,823   $28,332   $25,289 
Nontaxable   225    216    243    231    189    684    682 
Interest and fees on loans   48,713    46,519    45,257    43,322    40,403    140,489    110,503 
Interest on federal funds sold and other investments   634    585    616    638    664    1,835    1,778 
Total Interest Income   59,154    56,709    55,477    53,344    50,079    171,340    138,252 
                                    
Interest on deposits   2,097    1,988    1,538    1,246    930    5,623    2,408 
Interest on time certificates   2,975    2,629    2,179    2,032    1,266    7,783    2,646 
Interest on borrowed money   2,520    1,885    1,998    1,840    2,134    6,403    5,128 
Total Interest Expense   7,592    6,502    5,715    5,118    4,330    19,809    10,182 
                                    
Net Interest Income   51,562    50,207    49,762    48,226    45,749    151,531    128,070 
Provision for loan losses   5,774    2,529    1,085    2,263    680    9,388    3,385 
Net Interest Income After Provision for Loan Losses   45,788    47,678    48,677    45,963    45,069    142,143    124,685 
                                    
Noninterest income:                                   
Service charges on deposit accounts   2,833    2,674    2,672    2,566    2,626    8,179    7,483 
Trust fees   1,083    1,039    1,021    941    967    3,143    2,764 
Mortgage banking fees   1,135    1,336    1,402    1,487    2,138    3,873    4,962 
Brokerage commissions and fees   444    461    359    273    351    1,264    1,079 
Marine finance fees   194    446    573    313    137    1,213    597 
Interchange income   3,119    3,076    2,942    2,836    2,582    9,137    7,747 
BOLI income   1,078    1,066    1,056    1,100    836    3,200    2,326 
Other   2,453    2,671    2,373    1,861    1,844    7,497    4,895 
    12,339    12,769    12,398    11,377    11,481    37,506    31,853 
Gain on sale of VISA stock               15,153             
Securities gains/(losses), net   (48)   (48)  (102)   112    (47)   (198)   (26)
Total Noninterest Income   12,291    12,721    12,296    26,642    11,434    37,308    31,827 
                                    
Noninterest expenses:                                   
Salaries and wages   17,129    16,429    15,381    16,321    15,627    48,939    49,371 
Employee benefits   3,205    3,034    3,081    2,812    2,917    9,320    8,920 
Outsourced data processing costs   3,493    3,393    3,679    4,160    3,231    10,565    9,956 
Telephone / data lines   624    643    612    538    573    1,879    1,753 
Occupancy   3,214    3,316    3,117    3,265    2,447    9,647    10,025 
Furniture and equipment   1,367    1,468    1,457    1,806    1,191    4,292    4,261 
Marketing   1,139    1,344    1,252    1,490    1,298    3,735    3,294 
Legal and professional fees   2,019    2,301    1,973    3,054    2,560    6,293    7,968 
FDIC assessments   431    595    598    558    548    1,624    1,768 
Amortization of intangibles   1,004    1,004    989    964    839    2,997    2,397 
Foreclosed property expense and net (gain)/loss on sale   (136)   405    192    (7)   (297)   461    (293)
Other   3,910    4,314    4,833    4,223    3,427    13,057    11,312 
Total Noninterest Expenses   37,399    38,246    37,164    39,184    34,361    112,809    110,732 
                                    
Income Before Income Taxes   20,680    22,153    23,809    33,421    22,142    66,642    45,780 
Income taxes   4,358    5,189    5,782    20,374    7,926    15,329    15,962 
                                    
Net Income  $16,322   $16,964   $18,027   $13,047   $14,216   $51,313   $29,818 
                                    
Per share of common stock:                                   
                                    
Net income diluted  $0.34   $0.35   $0.38   $0.28   $0.32   $1.07   $0.70 
Net income basic   0.35    0.36    0.38    0.29    0.33    1.09    0.72 
Cash dividends declared                            
                                    
Average diluted shares outstanding   48,029,330    47,974,118    47,688,388    46,472,538    43,792,108    47,903,093    42,298,136 
Average basic shares outstanding   47,205,383    47,164,909    46,951,829    45,541,099    43,151,248    47,108,302    41,626,356 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES  
     
   September 30,   June 30,   March 31,   December 31,   September 30, 
(Dollars in thousands, except share data)  2018   2018   2018   2017   2017 
                     
Assets                    
Cash and due from banks  $101,920   $123,927   $129,065   $104,039   $114,621 
Interest bearing deposits with other banks   3,174    7,594    6,794    5,465    10,657 
Total Cash and Cash Equivalents   105,094    131,521    135,859    109,504    125,278 
                          
Time deposits with other banks   9,813    10,562    12,553    12,553    14,591 
                          
Debt Securities:                         
Available for sale (at fair value)   923,206    954,906    982,958    949,460    990,299 
Held to maturity (at amortized cost)   367,387    382,137    400,647    416,863    374,773 
Total Debt Securities   1,290,593    1,337,043    1,383,605    1,366,323    1,365,072 
                          
Loans held for sale   16,172    14,707    20,887    24,306    29,447 
                          
Loans   4,059,323    3,974,016    3,897,125    3,817,377    3,384,991 
Less: Allowance for loan losses   (33,865)   (28,924)   (28,118)   (27,122)   (26,232)
Net Loans   4,025,458    3,945,092    3,869,007    3,790,255    3,358,759 
                          
Bank premises and equipment, net   63,531    63,991    64,577    66,883    57,092 
Other real estate owned   4,715    8,417    10,288    7,640    7,142 
Goodwill   148,555    148,555    148,555    147,578    101,747 
Other intangible assets, net   16,508    17,319    18,246    19,099    16,102 
Bank owned life insurance   122,561    121,602    120,654    123,981    118,762 
Net deferred tax assets   25,822    26,021    24,427    25,417    43,951 
Other assets   102,112    97,851    94,443    116,590    102,356 
Total Assets  $5,930,934   $5,922,681   $5,903,101   $5,810,129   $5,340,299 
                          
Liabilities and Shareholders' Equity                         
Liabilities                         
Deposits                         
Noninterest demand  $1,488,689   $1,463,652   $1,488,261   $1,400,227   $1,284,118 
Interest-bearing demand   912,891    976,281    1,015,054    1,050,755    935,097 
Savings   451,958    444,736    437,878    434,346    379,499 
Money market   1,036,940    1,023,170    1,035,531    931,458    870,788 
Other time certificates   411,208    413,643    410,108    414,277    288,398 
Brokered time certificates   192,182    228,602    184,405    217,385    281,551 
Time certificates of more than $250,000   149,642    147,356    148,306    144,272    73,149 
Total Deposits   4,643,510    4,697,440    4,719,543    4,592,720    4,112,600 
                          
Securities sold under agreements to repurchase   189,035    200,050    173,249    216,094    142,153 
Federal Home Loan Bank borrowings   261,000    205,000    208,000    211,000    389,000 
Subordinated debt   70,734    70,664    70,591    70,521    70,451 
Other liabilities   33,824    33,364    29,857    30,130    31,654 
Total Liabilities   5,198,103    5,206,518    5,201,240    5,120,465    4,745,858 
                          
Shareholders' Equity                         
Common stock   4,727    4,716    4,698    4,693    4,351 
Additional paid in capital   668,711    665,885    663,727    661,632    576,825 
Retained earnings   81,112    64,790    47,825    29,914    16,161 
Treasury stock   (2,854)   (2,884)   (2,279)   (2,359)   (1,730)
    751,696    732,507    713,971    693,880    595,607 
Accumulated other comprehensive loss, net   (18,865)   (16,344)   (12,110)   (4,216)   (1,166)
Total Shareholders' Equity   732,831    716,163    701,861    689,664    594,441 
Total Liabilities & Shareholders' Equity  $5,930,934   $5,922,681   $5,903,101   $5,810,129   $5,340,299 
                          
Common Shares Outstanding   47,269,692    47,163,109    46,983,165    46,917,735    43,512,179 

 

 

 

 

CONSOLIDATED QUARTERLY FINANCIAL  DATA   (Unaudited)  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES  
       
    Quarterly Trends  
       
(Dollars in thousands)   3Q'18     2Q'18     1Q'18     4Q'17     3Q'17  
Credit Analysis                              
Net charge-offs (recoveries) - non-acquired loans   $ 800     $ 1,715     $ 117     $ 1,475     $ 612  
Net charge-offs (recoveries) - acquired loans     (3 )     (25 )     (116 )     (139 )     (333 )
Total net charge-offs (recoveries)     797       1,690       1       1,336       279  
                                         
TDR valuation adjustments   $ 36     $ 33     $ 88     $ 37     $ 169  
                                         
Net charge-offs (recoveries) to average loans - non-acquired loans     0.08 %     0.17 %     0.01 %     0.16 %     0.07 %
Net charge-offs (recoveries) to average loans - acquired loans                 (0.01 )     (0.02 )     (0.04 )
Total net charge-offs (recoveries) to average loans     0.08       0.17       0.00       0.14       0.03  
                                         
Loan loss provision - non-acquired loans   $ 5,640     $ 2,591     $ 1,383     $ 2,053     $ 795  
Loan loss provision (recapture) - acquired loans     134       (62 )     (298 )     210       (115 )
Total loan loss provision   $ 5,774     $ 2,529     $ 1,085     $ 2,263     $ 680  
                                         
Allowance for loan losses - non-acquired loans   $ 33,188     $ 28,384     $ 27,541     $ 26,363     $ 25,822  
Allowance for loan losses - acquired loans     677       540       577       759       410  
Total allowance for loan losses   $ 33,865     $ 28,924     $ 28,118     $ 27,122     $ 26,232  
                                         
Non-acquired loans at end of period   $ 3,383,571     $ 3,221,569     $ 3,063,618     $ 2,922,609     $ 2,837,490  
Purchased noncredit impaired loans at end of period     662,701       739,232       819,814       877,351       537,057  
Purchased credit impaired loans at end of period     13,051       13,215       13,693       17,417       10,443  
Total loans   $ 4,059,323     $ 3,974,016     $ 3,897,125     $ 3,817,377     $ 3,384,990  
                                         
Non-acquired loans allowance for loan losses to non-acquired loans at end of period     0.98 %     0.88 %     0.90 %     0.90 %     0.91 %
Total allowance for loan losses to total loans at end of period     0.83       0.73       0.72       0.71       0.77  
Acquired loans allowance for loan losses to acquired loans at end of period     0.10       0.07       0.07       0.08       0.07  
Discount for credit losses to acquired loans at end of period     2.25       2.31       2.32       2.33       2.77  
                                         
End of Period                                        
Nonperforming loans - non-acquired   $ 18,998     $ 19,578     $ 12,628     $ 12,569     $ 10,877  
Nonperforming loans - acquired     7,142       6,624       6,711       6,955       3,498  
Other real estate owned - non-acquired     418       354       2,246       2,246       1,748  
Other real estate owned - acquired     1,203       4,969       4,969       1,632       1,632  
Bank branches closed included in other real estate owned     3,094       3,094       3,073       3,762       3,762  
Total nonperforming assets   $ 30,855     $ 34,619     $ 29,627     $ 27,164     $ 21,517  
                                         
Restructured loans (accruing)   $ 13,797     $ 14,241     $ 14,777     $ 15,559     $ 16,181  
                                         
Nonperforming loans to loans at end of period - non-acquired     0.56 %     0.61 %     0.41 %     0.43 %     0.38 %
Nonperforming loans to loans at end of period - acquired     1.06       0.88       0.81       0.78       0.64  
Total nonperforming loans to loans at end of period     0.64       0.66       0.50       0.51       0.42  
                                         
Nonperforming assets to total assets - non-acquired     0.38 %     0.39 %     0.30 %     0.32 %     0.30 %
Nonperforming assets to total assets - acquired     0.14       0.19       0.20       0.15       0.09  
Total nonperforming assets to total assets     0.52       0.58       0.50       0.47       0.40  
                                         
Average Balances                                        
Total average assets   $ 5,903,327     $ 5,878,035     $ 5,851,688     $ 5,716,230     $ 5,316,119  
Less: Intangible assets     165,534       166,393       167,136       149,432       118,364  
Total average tangible assets   $ 5,737,793     $ 5,711,642     $ 5,684,552     $ 5,566,798     $ 5,197,755  
                                         
Total average equity   $ 728,290     $ 709,674     $ 695,240     $ 657,100     $ 587,919  
Less: Intangible assets     165,534       166,393       167,136       149,432       118,364  
Total average tangible equity   $ 562,756     $ 543,281     $ 528,104     $ 507,668     $ 469,555  
                                         
    September 30,     June 30,     March 31,     December 31,     September 30,  
LOANS   2018     2018     2018     2017     2017  
Construction and land development   $ 376,257     $ 359,070     $ 374,244     $ 343,125     $ 245,151  
Commercial real estate - Owner Occupied     829,368       812,306       796,898       791,408       688,224  
Commercial real estate - Non-Owner Occupied     897,331       888,989       848,341       848,584       789,867  
Residential real estate     1,152,640       1,103,946       1,065,152       1,038,810       941,169  
Consumer     192,772       190,835       195,788       189,436       185,122  
Commercial and financial     610,955       618,870       616,702       606,014       535,457  
Total Loans   $ 4,059,323     $ 3,974,016     $ 3,897,125     $ 3,817,377     $ 3,384,990  
                                         

 

 

 

 

AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES (1) (Unaudited)              
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                                    

 

             
   3Q'18   2Q'18   3Q'17 
                         
   Average       Yield/   Average       Yield/   Average       Yield/ 
(Dollars in thousands)  Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate 
Assets                                    
Earning assets:                                    
Securities:                                    
Taxable  $1,284,774   $9,582    2.98%  $1,324,280   $9,389    2.84%  $1,356,276   $8,823    2.60%
Nontaxable   31,411    283    3.60    32,055    273    3.41    26,256    290    4.42 
Total Securities   1,316,185    9,865    3.00    1,356,335    9,662    2.85    1,382,532    9,113    2.64 
                                              
Federal funds sold and other investments   51,255    634    4.91    49,387    585    4.75    76,773    664    3.43 
                                              
Loans, net   4,008,527    48,802    4.83    3,948,460    46,549    4.73    3,407,376    40,456    4.70 
                                              
Total Earning Assets   5,375,967    59,301    4.38    5,354,182    56,796    4.25    4,866,681    50,233    4.10 
                                              
Allowance for loan losses   (29,259)             (29,234)             (26,299)          
Cash and due from banks   110,929              110,549              99,864           
Premises and equipment   63,771              64,445              57,023           
Intangible assets   165,534              166,393              118,364           
Bank owned life insurance   121,952              121,008              95,759           
Other assets   94,433              90,692              104,727           
                                              
Total Assets  $5,903,327             $5,878,035             $5,316,119           
                                              
Liabilities and Shareholders' Equity                                             
Interest-bearing liabilities:                                             
Interest-bearing demand  $939,527   $426    0.18%  $996,929   $492    0.20%  $927,278   $273    0.12%
Savings   444,935    170    0.15    439,691    118    0.11    377,729    52    0.05 
Money market   1,031,960    1,501    0.58    1,027,705    1,378    0.54    870,166    605    0.28 
Time deposits   779,608    2,975    1.51    790,404    2,629    1.33    548,092    1,266    0.92 
Federal funds purchased and securities                                             
sold under agreements to repurchase   204,097    463    0.90    179,540    334    0.75    165,160    204    0.49 
Federal Home Loan Bank borrowings   222,315    1,228    2.19    160,846    741    1.85    439,755    1,293    1.17 
Other borrowings   70,694    829    4.65    70,623    810    4.60    70,409    637    3.59 
                                              
Total Interest-Bearing Liabilities   3,693,136    7,592    0.82    3,665,738    6,502    0.71    3,398,589    4,330    0.51 
                                              
Noninterest demand   1,451,751              1,473,331              1,276,779           
Other liabilities   30,150              29,292              52,832           
Total Liabilities   5,175,037              5,168,361              4,728,200           
                                              
Shareholders' equity   728,290              709,674              587,919           
                                              
Total Liabilities & Equity  $5,903,327             $5,878,035             $5,316,119           
                                              
Cost of Deposits             0.43%             0.39%             0.22%
Interest expense as a % of earning assets             0.56%             0.49%             0.35%
Net interest income as a % of earning assets       $51,709    3.82%       $50,294    3.77%       $45,903    3.74%

 

(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.          

     

 

 

 

AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES (1) (Unaudited)              
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                                    

 

 

  

 Nine Months Ended September 30,

 

  Nine Months Ended September 30, 
   2018   2017 
   Average       Yield/   Average       Yield/ 
(Dollars in thousands)  Balance   Interest   Rate   Balance   Interest   Rate 
Assets                        
Earning assets:                        
Securities:                              
Taxable  $1,323,164   $28,332    2.85%  $1,299,128   $25,289    2.60%
Nontaxable   32,031    863    3.59    27,388    1,047    5.10 
Total Securities   1,355,195    29,195    2.87    1,326,516    26,336    2.65 
                               
Federal funds sold and other investments   52,253    1,835    4.70    68,766    1,778    3.46 
                               
Loans, net   3,943,617    140,635    4.77    3,199,408    110,668    4.62 
                               
Total Earning Assets   5,351,065    171,665    4.29    4,594,690    138,782    4.04 
                               
Allowance for loan losses   (28,660)             (25,211)          
Cash and due from banks   111,781              101,858           
Premises and equipment   64,708              58,401           
Intangible assets   166,348              104,079           
Bank owned life insurance   121,742              89,401           
Other assets   90,888              111,661           
                               
Total Assets  $5,877,872             $5,034,879           
0   0                          
Liabilities and Shareholders' Equity                              
Interest-bearing liabilities:                              
Interest-bearing demand  $979,148   $1,368    0.19%  $904,175   $698    0.10%
Savings   440,054    392    0.12    370,145    147    0.05 
Money market   1,012,259    3,863    0.51    847,705    1,563    0.25 
Time deposits   782,283    7,783    1.33    443,416    2,646    0.80 
Federal funds purchased and securities                              
sold under agreements to repurchase   186,643    1,071    0.77    173,601    551    0.42 
Federal Home Loan Bank borrowings   219,652    2,999    1.83    396,610    2,775    0.94 
Other borrowings   70,623    2,333    4.42    70,342    1,802    3.43 
                               
Total Interest-Bearing Liabilities   3,690,662    19,809    0.72    3,205,994    10,182    0.42 
                               
Noninterest demand   1,446,488              1,248,290           
Other liabilities   29,533              39,414           
Total Liabilities   5,166,683              4,493,698           
                               
Shareholders' equity   711,189              541,181           
                               
Total Liabilities & Equity  $5,877,872             $5,034,879           
                               
Cost of Deposits             0.38%             0.22%
Interest expense as a % of earning assets             0.49%             0.30%
Net interest income as a % of earning assets       $151,856    3.79%       $128,600    3.74%

 

(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  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

    (Unaudited)  
    September 30,     June 30,     March 31,     December 31,     September 30,  
(Dollars in thousands)   2018     2018     2018     2017     2017  
                               
Customer Relationship Funding                              
Noninterest demand                              
Commercial   $ 1,182,018     $ 1,154,225     $ 1,163,119     $ 1,073,539     $ 997,749  
Retail     233,472       236,838       252,055       253,454       217,809  
Public funds     42,474       44,182       49,014       50,837       43,686  
Other     30,725       28,407       24,073       22,397       24,874  
      1,488,689       1,463,652       1,488,261       1,400,227       1,284,118  
Interest-bearing demand                                        
Commercial     167,865       181,646       164,359       157,272       156,176  
Retail     655,429       681,615       700,262       702,616       670,705  
Public funds     89,597       113,020       150,433       190,867       108,216  
      912,891       976,281       1,015,054       1,050,755       935,097  
Total transaction accounts                                        
Commercial     1,349,883       1,335,871       1,327,478       1,230,811       1,153,925  
Retail     888,901       918,453       952,317       956,070       888,514  
Public funds     132,071       157,202       199,447       241,704       151,902  
Other     30,725       28,407       24,073       22,397       24,874  
      2,401,580       2,439,933       2,503,315       2,450,982       2,219,215  
                                         
Savings     451,958       444,736       437,878       434,346       379,499  
                                         
Money market                                        
Commercial     423,304       408,005       410,527       375,471       360,567  
Retail     524,415       522,783       522,882       471,086       431,325  
Public funds     89,221       92,382       102,122       84,901       78,896  
      1,036,940       1,023,170       1,035,531       931,458       870,788  
                                         
Brokered time certificates of deposit     192,182       228,602       184,405       217,385       281,551  
Other time certificates of deposit     560,850       560,999       558,414       558,549       361,547  
      753,032       789,601       742,819       775,934       643,098  
Total Deposits   $ 4,643,510     $ 4,697,440     $ 4,719,543     $ 4,592,720     $ 4,112,600  
                                         
Customer sweep accounts   $ 189,035     $ 200,050     $ 173,249     $ 216,094     $ 142,153  
                                         
Total core customer funding (1)   $ 4,079,513     $ 4,107,889     $ 4,149,973     $ 4,032,880     $ 3,611,655  

 

(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.

 

 

 

  

GAAP TO NON-GAAP RECONCILIATION                          
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES                      

 

   Quarterly Trends   Nine Months Ended 
         
(Dollars in thousands except per share data)  3Q'18   2Q'18   1Q'18   4Q'17   3Q'17   3Q'18   3Q'17 
                             
Net income  $16,322   $16,964   $18,027   $13,047   $14,216   $51,313   $29,818 
Gain on sale of VISA stock               (15,153)            
Securities (gains)/losses, net   48    48    102    (112)   47    198    26 
Total Adjustments to Revenue   48    48    102    (15,265)   47    198    26 
                                    
Merger related charges   482    695    470    6,817    491    1,647    6,105 
Amortization of intangibles   1,004    1,004    989    963    839    2,997    2,397 
Business continuity expenses - Hurricane Irma                   352        352 
Branch reductions and other expense initiatives                   (127)       4,321 
Total Adjustments to Noninterest Expense   1,486    1,699    1,459    7,780    1,555    4,644    13,175 
                                    
Effective tax rate on adjustments   (230)   (443)   (538)   3,147    (673)   (1,211)   (4,939)
Effect of change in corporate tax rate           248    8,552        248     
Adjusted Net Income  $17,626   $18,268   $19,298   $17,261   $15,145   $55,192   $38,080 
Earnings per diluted share, as reported   0.34    0.35    0.38    0.28    0.32    1.07    0.70 
Adjusted Earnings per Diluted Share   0.37    0.38    0.40    0.37    0.35    1.15    0.90 
Average shares outstanding (000)  $48,029   $47,974   $47,688   $46,473   $43,792   $47,903   $42,298 
Revenue   63,853    62,928    62,058    74,868    57,183    188,839    159,897 
Total Adjustments to Revenue   48    48    102    (15,265)   47    198    26 
Adjusted Revenue   63,901    62,976    62,160    59,603    57,230    189,037    159,923 
                                    
Noninterest Expense   37,399    38,246    37,164    39,184    34,361    112,809    110,732 
Total Adjustments to Noninterest Expense   1,486    1,699    1,459    7,780    1,555    4,644    13,175 
Adjusted Noninterest Expense   35,913    36,547    35,705    31,404    32,806    108,165    97,557 
                                    
Adjusted Noninterest Expense   35,913    36,547    35,705    31,404    32,806    108,165    97,557 
Foreclosed property expense and net (gain)/loss on sale   (137)   405    192    (7)   (298)   460    (294)
Net Adjusted Noninterest Expense   36,050    36,142    35,513    31,411    33,102    107,705    97,851 
                                    
Adjusted Revenue   63,901    62,976    62,160    59,603    57,230    189,037    159,923 
Impact of FTE adjustment   147    87    91    174    154    325    529 
Adjusted Revenue on a fully taxable equivalent basis   64,048    63,063    62,251    59,777    57,384    189,362    160,452 
Adjusted Efficiency Ratio   56.3%   57.3%