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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) April 25, 2019

 

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 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 6

 

SEACOAST BANKING CORPORATION OF FLORIDA

 

Item 2.02Results of Operations and Financial Condition

 

On April 25, 2019, Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the quarter ended March 31, 2019.

 

A copy of the press release announcing Seacoast’s results for the quarter ended March 31, 2019 is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 7.01Regulation FD Disclosure

 

On April 26, 2019, Seacoast will hold an investor conference call to discuss its financial results for the quarter ended March 31, 2019. Attached as Exhibit 99.2 are charts (available on the Company’s website at www.seacoastbanking.com) containing information used in the conference call and incorporated herein by reference. All information included in the charts is presented as of March 31, 2019, and the Company does not assume any obligation to correct or update said information in the future.

 

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

 

Item 9.01Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.   Description
99.1   Press Release dated April 25, 2019 with respect to Seacoast’s financial results for the quarter ended March 31, 2019
     
99.2   Data on website containing information used in the conference call to be held on April 26, 2019

 

Exhibits 99.1 and 99.2 referenced herein, contain “forward-looking statements” within the meaning of Section 28A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, 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.

 

 

 

 

8-K – page 3 of 6

 

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

 

 

 

 

8-K – page 4 of 6

 

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2018, under “Special Cautionary Notice Regarding Forward-looking Statements” and “Risk Factors”, and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at www.sec.gov.

 

 

 

 

8-K – page 5 of 6

 

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:  April 25, 2019 By:   /s/ Charles M. Shaffer
    Charles M. Shaffer
    Executive Vice President and Chief Financial Officer

 

 

 

 

8-K – page 6 of 6

 

EXHIBIT INDEX

 

Exhibit No.   Description
99.1   Press Release dated April 25, 2019 with respect to Seacoast’s financial results for the quarter ended March 31, 2019
     
99.2   Data on website containing information used in the conference call to be held on April 26, 2019

 

 

 

(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 FIRST QUARTER 2019 RESULTS

Net Income Increased 26% Year-Over-Year to $22.7 Million

Net Interest Margin Expands to 4.02%

27% Annualized Growth in Noninterest Bearing Demand Deposits

 

STUART, Fla., April 25, 2019 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida (“Seacoast” or “the Company”) (NASDAQ: SBCF) today reported first quarter 2019 net income of $22.7 million, or $0.44 per share, up 26% or $4.7 million year-over-year. Seacoast reported first quarter 2019 adjusted net income1 of $24.2 million, or $0.47 per share, an increase of $4.9 million compared to the first quarter of 2018. First quarter 2019 results reflect the acquisition of First Green Bancorp, Inc., which closed on October 19, 2018.

 

For the first quarter of 2019, return on average tangible assets was 1.48%, return on average tangible shareholders’ equity was 14.9%, and the efficiency ratio was 56.6%, compared to 1.05%, 10.9% and 65.8%, respectively, in the prior quarter and 1.34%, 14.4%, and 57.8%, respectively, in the first quarter of 2018. Adjusted return on average tangible assets1 was 1.50%, adjusted return on average tangible shareholders’ equity1 was 15.1%, and the adjusted efficiency ratio1 was 55.8%, compared to 1.49%, 15.4%, and 54.2%, respectively, in the prior quarter, and 1.38%, 14.8%, and 57.1%, respectively, in the first quarter of 2018.

 

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. We had an outstanding quarter of customer acquisition and deposit growth, with pipelines increasing in all loan categories, reflecting our strong fundamentals and position in attractive markets. The underlying strength of our customer franchise and the value of our unique combination of customer analytics, marketing automation, and experienced bankers in growing urban markets situates us well to deliver sustainable, profitable growth.”

 

Charles M. Shaffer, Seacoast’s Chief Financial Officer, said, “Our first quarter 2019 results demonstrate a continued focus on strong financial performance, disciplined credit underwriting, and increasing levels of liquidity. We continue to build a balance sheet that is supported by a robust customer franchise, with an ending loan to deposit ratio of 86%, providing ample room for expansion of loans which reinforces our net interest margin. We will also take proactive additional expense reduction measures during the second quarter of 2019 that we expect will result in an annual pre-tax expense reduction of approximately $10 million. These initiatives, our quarter-end tangible common equity ratio of 10.2%, increasing levels of liquidity and a healthy balance sheet support our ability to deploy capital for continued organic growth and disciplined opportunistic acquisitions."

  

 

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

 

 

 

 

 

 

First Quarter 2019 Financial Highlights

Income Statement

Net income was $22.7 million, or $0.44 per diluted share, compared to $16.0 million or $0.31 for the prior quarter and $18.0 million or $0.38 for the first quarter of 2018. Adjusted net income1 was $24.2 million, or $0.47 per diluted share, compared to $23.9 million or $0.47 for the prior quarter and $19.3 million or $0.40 for the first quarter of 2018.
Net revenues were $73.6 million, an increase of $0.9 million or 1% compared to the prior quarter, and an increase of $11.6 million or 19% compared to the first quarter of 2018. Adjusted revenues1 were $73.6 million, an increase of $0.8 million, or 1%, from the prior quarter and an increase of $11.5 million, or 18%, from the first quarter of 2018.
Net interest income totaled $60.8 million, an increase of $0.8 million or 1% from the prior quarter and an increase of $11.0 million or 22% from the first quarter of 2018. The increase quarter over quarter was despite a flattening yield curve and two fewer days in the quarter.
Net interest margin was 4.02% in the first quarter of 2019, 4.00% in the fourth quarter of 2018 and 3.80% in the first quarter of 2018. Quarter over quarter, the yield on loans expanded 10 basis points, the yield on securities contracted 4 basis points, and the cost of deposits increased 13 basis points. The impact on net interest margin from accretion of purchase discounts on acquired loans was 26 basis points in the first quarter of 2019, 1 basis point below the prior quarter. The net interest margin continues to benefit from positive remixing of earning assets as well as actions taken to reduce reliance on Federal Home Loan Bank advances and migrate funding towards lower rate deposit balances.
Noninterest income totaled $12.8 million, an increase of $0.1 million or 1% compared to the prior quarter and an increase of $0.5 million or 4% from the first quarter of 2018. Sequentially, service charges on deposits declined by $0.3 million, the result of fewer business days in the first quarter, which was offset by mortgage banking fees which increased $0.3 million, the result of a successful introduction of new saleable residential mortgage products and a focus on generating saleable volume. SBA and marine-related fees improved modestly, the result of higher volumes in both units. Interchange income increased $0.2 million, sequentially, while wealth-related fees were down modestly, the result of lower equity valuations. Other income declined primarily due to the prior quarter benefiting from a $0.3 million bank owned life insurance ("BOLI") payout. The decline in BOLI-related income was the result of the cancellation of low yielding policies acquired in the First Green acquisition. Finally, securities losses were lower by $0.4 million sequentially.
The provision for loan losses was $1.4 million compared to $2.3 million in the prior quarter and $1.1 million in the first quarter of 2018.
Noninterest expense was $43.1 million, a decrease of $6.4 million or 13% compared to the prior quarter and an increase of $5.9 million or 16% from the first quarter of 2018. During the fourth quarter of 2018, the Company integrated the operations of First Green, recording $8.0 million in merger related charges. Noninterest expense in the first quarter included:
Lower salaries and wage expenses were offset by increases in employee benefits associated with higher seasonal payroll taxes and 401(k) plan contributions, typical of the first quarter.
We hired 10 business bankers in Fort Lauderdale and Tampa, augmenting the 10 business bankers hired in the fourth quarter.

 

  

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

 

 

 

 

 

 

As required by existing accounting guidance, we defer the net costs of loan originations. Such deferrals were lower quarter over quarter due to lower loan production, resulting in higher noninterest expense.
Two previously ongoing projects in risk management and lending operations were accelerated that will support the scaling of our business, resulting in higher professional fees in the quarter. We launched our small business direct loan origination platform ahead of schedule and will launch our digital commercial origination platform in June.
The quarter included merger related charges of $0.3 million due to the First Green acquisition and one banking center consolidation charge totaling $0.2 million.
Looking forward, during the second quarter of 2019, our continued focus on efficiency and streamlining operations will result in a reduction of approximately 50 full time equivalent employees. While the Company will incur severance charges of approximately $1.5 million, this in combination with other expense initiatives, including two more banking center closures will result in approximately a $10 million annual pre-tax expense reduction.
Seacoast recorded $6.4 million in income tax expense in the first quarter of 2019, compared to $4.9 million in the prior quarter and $5.8 million in the first quarter of 2018. Tax benefits related to stock-based compensation were $0.6 million in the first quarter of 2019 and $0.4 million in the fourth quarter of 2018. Taxes in the fourth quarter of 2018 also included $0.5 million in additional expenses associated with the redemption of First Green's BOLI policies, which was removed from the presentation of adjusted results.
Adjusted revenues1 increased 18% compared to prior year while adjusted noninterest expense1 increased 15%, generating 3% operating leverage.
The efficiency ratio was 56.6% compared to 65.8% in the prior quarter and 57.8% in the first quarter of 2018. The adjusted efficiency ratio1 was 55.8% compared to 54.2% in the prior quarter and 57.1% in the first quarter of 2018. The increase quarter over quarter in the adjusted efficiency ratio, was primarily the result of a return of seasonal 401(k) and payroll tax expenses.

 

Balance Sheet

 

At March 31, 2019, the Company had total assets of $6.8 billion and total shareholders' equity of $896.4 million. Book value per share was $17.44 and tangible book value per share was $12.98, compared to $16.83 and $12.33, respectively, at December 31, 2018 and $14.94 and $11.39, respectively, at March 31, 2018. Year-over-year, tangible book value per share increased 14%.
Debt securities totaled $1.2 billion at March 31, 2019, a decrease of $50.7 million compared to the prior quarter and a decrease of $210.6 million from March 31, 2018. The decrease included the sale of $35.0 million of certain low yielding securities, which resulted in a loss of $0.1 million in the first quarter of 2019. In addition, in connection with the adoption of new accounting guidance in January 2019, the Company elected to transfer securities with an aggregate amortized cost basis of $53.5 million and fair value of $52.8 million from the held-to-maturity designation to available-for-sale.
Loans totaled $4.8 billion at March 31, 2019, an increase of $3.2 million compared to the prior quarter, and an increase of $931.3 million or 24% from March 31, 2018.
Consumer and small business originations for the first quarter of 2019 were $118.5 million, an increase of 4% compared to the fourth quarter of 2018 and an increase of 20% compared to the first quarter of 2018.

 

 

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

 

 

 

 

 

 

Commercial originations during the first quarter of 2019 were $109.1 million, a decrease of 32% compared to the fourth quarter of 2018 and 11% compared to the first of quarter 2018, largely a reflection of seasonal trends.
We continue to prudently manage commercial real estate exposure. Construction and land development and commercial real estate loans remain well below regulatory guidance at 57% and 216% of total risk based capital, respectively, down from 63% and 227%, respectively, in the fourth quarter of 2018.
Closed residential loans retained in the portfolio for the first quarter of 2019 were $49.6 million, down 32% from the fourth quarter of 2018 and down 37% from the first quarter of 2018. This is consistent with the Residential Lending team's emphasis on generating saleable volume.
Pipelines (loans in underwriting and approval or approved and not yet closed) remained strong, totaling $290.2 million.
Consumer and small business pipelines were $67.6 million, an increase of 26% sequentially and 34% compared to the prior year.
Commercial pipelines were $177.3 million, an increase of 8% sequentially and 44% compared to the prior year.
Residential pipelines were $45.3 million, an increase of 4% sequentially and a decrease of 36% compared to the prior year.
Total deposits were $5.6 billion as of March 31, 2019, an increase of $428.3 million, or 8%, sequentially and an increase of $886.0 million, or 19%, from the prior year.
Interest-bearing deposits (interest-bearing demand, savings and money market deposits) increased year-over-year $312.4 million, or 13%, to $2.8 billion, noninterest bearing demand deposits increased $187.7 million, or 13%, to $1.7 billion, and CDs increased $385.9 million, or 52%, to $1.1 billion.
Total deposits grew 16% on an annualized basis during the quarter, excluding the favorable impact of $76 million of customer sweep repurchase agreements migrating to interest-bearing deposits and the acquisition of $147 million of brokered CDs.
During the quarter, noninterest bearing demand deposits grew 27% on an annualized basis.
Overall cost of deposits increased to 67 basis points, due in part to a strategic shift in funding from FHLB advances to brokered deposits. This shift impacted the cost of deposits by 3 basis points, but reduced the overall cost of funding.
First quarter return on average tangible assets (ROTA) was 1.48%, compared to 1.05% in the prior quarter and 1.34% in the first quarter of 2018. Adjusted ROTA1 was 1.50% compared to 1.49% in the prior quarter and 1.38% in the first quarter of 2018.

 

Capital

 

First quarter return on average tangible common equity (ROTCE) was 14.86%, compared to 10.94% in the prior quarter and 14.41% in the first quarter of 2018. Adjusted ROTCE1 was 15.11% compared to 15.44% in the prior quarter and 14.82% in the first quarter of 2018.
The common equity tier 1 capital ratio (CET1) was 14.3%, total capital ratio was 15.0% and the tier 1 leverage ratio was 11.2% at March 31, 2019.

 

 

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

 

 

 

 

 

 

Tangible common equity to tangible assets was 10.18% at March 31, 2019, compared to 9.72% at December 31, 2018 and 9.33% at March 31, 2018.

 

Asset Quality

 

Nonperforming loans to total loans outstanding was 0.46% at March 31, 2019, 0.55% at December 31, 2018, and 0.50% at March 31, 2018.

Nonperforming assets to total assets was 0.51% at March 31, 2019, 0.58% at December 31, 2018 and 0.50% at March 31, 2018. Nonperforming assets decreased $4.9 million in the first quarter of 2019, attributed primarily to the payoff of a $3.0 million acquired residential real estate loan.
The ratio of allowance for loan losses to total loans was 0.68% at March 31, 2019, 0.67% at December 31, 2018, and 0.72% at March 31, 2018. The ratio of allowance for loan losses to non-acquired loans was 0.89% at March 31, 2019, 0.89% at December 31, 2018, and 0.90% at March 31, 2018.
Net charge-offs were $1.0 million or 0.08% of average loans for the first quarter of 2019 compared to $3.7 million in the prior quarter.

 

 

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

 

 

 

 

 

 

FINANCIAL HIGHLIGHTS          (Unaudited)         
(Amounts in thousands except per share data)                
   Quarterly Trends 
                     
   1Q'19   4Q'18   3Q'18   2Q'18   1Q'18 
Selected Balance Sheet Data:                         
Total Assets  $6,783,389   $6,747,659   $5,930,934   $5,922,681   $5,903,101 
Gross Loans   4,828,441    4,825,214    4,059,323    3,974,016    3,897,125 
Total Deposits   5,605,578    5,177,240    4,643,510    4,697,440    4,719,543 
                          
Performance Measures:                         
Net Income  $22,705   $15,962   $16,322   $16,964   $18,027 
Net Interest Margin   4.02%   4.00%   3.82%   3.77%   3.80%
Average Diluted Shares Outstanding   52,039    51,237    48,029    47,974    47,688 
Diluted Earnings Per Share (EPS)  $0.44   $0.31   $0.34   $0.35   $0.38 
Return on (annualized):                         
Average Assets (ROA)   1.36%   0.96%   1.10%   1.16%   1.25%
Average Return on Tangible Assets (ROTA)   1.48    1.05    1.18    1.24    1.34 
Average Tangible Common Equity (ROTCE)   14.86    10.94    12.04    13.08    14.41 
Efficiency Ratio   56.55    65.76    57.04    58.41    57.80 
                          
Adjusted Operating Measures1:                         
Adjusted Net Income  $24,205   $23,893   $17,626   $18,268   $19,298 
Adjusted Diluted EPS   0.47    0.47    0.37    0.38    0.40 
Adjusted ROTA   1.50%   1.49%   1.22%   1.28%   1.38%
Adjusted ROTCE   15.11    15.44    12.43    13.49    14.82 
Adjusted Efficiency Ratio   55.81    54.19    56.29    57.31    57.05 
Adjusted Noninterest Expenses as a                         
Percent of Average Tangible Assets   2.55    2.46    2.48    2.57    2.55 
                          
Other Data:                         
Market capitalization2  $1,354,759   $1,336,415   $1,380,275   $1,489,411   $1,243,644 
Full-time equivalent employees   902    902    835    826    814 
Number of ATMs   84    87    86    87    86 
Full service banking offices   50    51    49    49    49 
Registered online users   102,274    99,415    94,400    92,107    91,636 
Registered mobile devices   87,844    83,151    73,300    69,038    65,336 

 

 

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 in 2017.

 

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

 

First Quarter Operating Highlights

 

Modernizing How We Sell

 

In the first quarter, we completed a pilot program for automated fulfillment of small business loan products. The pilot was limited to a select group of products, and offers auto-decisioning and digitized onboarding. Once fully implemented, this technology will significantly reduce the cost to originate small business loans to current customers, while maintaining our strict credit underwriting culture.

 

Lowering Our Cost to Serve

 

We consolidated one banking center location in the first quarter of 2019 in alignment with our Vision 2020 objective of reducing our footprint to meet the evolving needs of our customers. We expect a six-month payback period, and recorded $0.2 million in associated expenses. We have two additional banking center consolidations planned in the second quarter of 2019. We expect negligible customer impact given the proximity to other banking centers and increased usage of digital channels by these customers.
At March 31, 2019, average deposits per banking center exceeded $112 million, up from $96 million at March 31, 2018.
During the second quarter of 2019, our continued focus on efficiency and streamlining operations will result in a reduction of approximately 50 full time equivalent employees. While the Company will incur severance charges of approximately $1.5 million, this in combination with other expense initiatives, including two more banking center closures will result in approximately a $10 million annual pre-tax expense reduction.

 

Driving Improvements in How Our Business Operates

 

Late in 2018, we launched a large-scale initiative to implement a fully digital loan origination platform across all business banking units. This follows the successful rollout of our fully digital mortgage banking origination platform. This investment should provide financial returns through a significant improvement in efficiency and banker productivity in 2020 and beyond.

 

Scaling and Evolving Our Culture

 

We continue to invest in business bankers. In the first quarter of 2019 we on-boarded 10 new business bankers in order to fully support the strong markets we serve and to advance our growth and operating leverage objectives. We have a robust pipeline of talent as we enter the second quarter of 2019 and will continue to opportunistically add top-tier bankers in both the Fort Lauderdale and Tampa markets.
In the first quarter of 2019, Seacoast Bank’s 401(k) plan was recognized as a Best in Class 401(k) Plan for 2019 by PLANSPONSOR magazine. Associate participation in the 401(k) plan and Seacoast's contribution match differentiates us from industry peers.

 

 

 

 

 

 

OTHER INFORMATION

 

Conference Call Information

Seacoast will host a conference call on April 26, 2019 at 10:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Investors may call in (toll-free) by dialing (888) 424-8151 (passcode: 6617 843; host: Dennis S. Hudson). Charts will be used during the conference call and may be accessed at Seacoast's website at www.SeacoastBanking.com by selecting "Presentations" under the heading "News/Events" A replay of the call will be available for one month, beginning late afternoon of April 26, 2019 by dialing (888) 843-7419 (domestic) and using passcode: 6617 843#.

 

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon of April 26, 2019, 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 $6.8 billion in assets and $5.6 billion in deposits as of March 31, 2019. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 50 traditional branches of its locally-branded wholly-owned subsidiary bank, Seacoast Bank. Offices stretch from Fort Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties. More information about the Company is available at www.SeacoastBanking.com.

 

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

 

 

 

 

 

 

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

 

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2018, under “Special Cautionary Notice Regarding Forward-looking Statements” and “Risk Factors”, and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at www.sec.gov.

 

 

 

 

FINANCIAL  HIGHLIGHTS  (Unaudited) 
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES    
     
   Quarterly Trends 
                     
(Amounts in thousands, except ratios and per share data)  1Q'19   4Q'18   3Q'18   2Q'18   1Q'18 
                     
Summary of Earnings                         
Net income  $22,705   $15,962   $16,322   $16,964   $18,027 
Adjusted net income1   24,205    23,893    17,626    18,268    19,298 
Net interest income2   60,861    60,100    51,709    50,294    49,853 
Net interest margin2,3   4.02%   4.00%   3.82%   3.77%   3.80%
                          
Performance Ratios                         
Return on average assets-GAAP basis3   1.36%   0.96%   1.10%   1.16%   1.25%
Return on average tangible assets-GAAP basis3,4   1.48    1.05    1.18    1.24    1.34 
Adjusted return on average tangible assets1,3,4   1.50    1.49    1.22    1.28    1.38 
                          
Return on average shareholders' equity-GAAP basis3   10.47    7.65    8.89    9.59    10.52 
Return on average tangible common equity-GAAP basis3,4   14.86    10.94    12.04    13.08    14.41 
Adjusted return on average tangible common equity1,3,4   15.11    15.44    12.43    13.49    14.82 
Efficiency ratio5   56.55    65.76    57.04    58.41    57.80 
Adjusted efficiency ratio1   55.81    54.19    56.29    57.31    57.05 
Noninterest income to total revenue   17.45    17.97    19.31    20.28    19.95 
Tangible common equity to tangible assets4   10.18    9.72    9.85    9.56    9.33 
Average loan-to-deposit ratio   90.55    89.14    86.25    83.51    84.10 
End of period loan-to-deposit ratio   86.38    93.43    87.77    84.91    83.02 
                          
Per Share Data                         
Net income diluted-GAAP basis  $0.44   $0.31   $0.34   $0.35   $0.38 
Net income basic-GAAP basis   0.44    0.32    0.35    0.36    0.38 
Adjusted earnings1   0.47    0.47    0.37    0.38    0.40 
                          
Book value per share common   17.44    16.83    15.50    15.18    14.94 
Tangible book value per share   12.98    12.33    12.01    11.67    11.39 
Cash dividends declared                    

 

 

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

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

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

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

5Defined as (noninterest expense less amortization of intangibles and gains, losses, and expenses on foreclosed properties) divided by net operating revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains).

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (Unaudited)     
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES        
     
   Quarterly Trends 
                     
(Amounts in thousands, except per share data)  1Q'19   4Q'18   3Q'18   2Q'18   1Q'18 
                     
Interest on securities:                         
Taxable  $9,119   $9,528   $9,582   $9,389   $9,361 
Nontaxable   151    200    225    216    243 
Interest and fees on loans   62,287    59,495    48,713    46,519    45,257 
Interest on federal funds sold and other investments   918    835    634    585    616 
Total Interest Income   72,475    70,058    59,154    56,709    55,477 
                          
Interest on deposits   3,873    3,140    2,097    1,988    1,538 
Interest on time certificates   4,959    3,901    2,975    2,629    2,179 
Interest on borrowed money   2,869    3,033    2,520    1,885    1,998 
Total Interest Expense   11,701    10,074    7,592    6,502    5,715 
                          
Net Interest Income   60,774    59,984    51,562    50,207    49,762 
Provision for loan losses   1,397    2,342    5,774    2,529    1,085 
Net Interest Income After Provision for Loan Losses   59,377    57,642    45,788    47,678    48,677 
                          
Noninterest income:                         
Service charges on deposit accounts   2,697    3,019    2,833    2,674    2,672 
Trust fees   1,017    1,040    1,083    1,039    1,021 
Mortgage banking fees   1,115    809    1,135    1,336    1,402 
Brokerage commissions and fees   436    468    444    461    359 
Marine finance fees   362    185    194    446    573 
Interchange income   3,401    3,198    3,119    3,076    2,942 
BOLI income   915    1,091    1,078    1,066    1,056 
SBA gains   636    519    473    748    734 
Other   2,266    2,810    1,980    1,923    1,639 
    12,845    13,139    12,339    12,769    12,398 
Securities losses, net   (9)   (425)   (48)   (48)   (102)
Total Noninterest Income   12,836    12,714    12,291    12,721    12,296 
                          
Noninterest expenses:                         
Salaries and wages   18,506    22,172    17,129    16,429    15,381 
Employee benefits   4,206    3,625    3,205    3,034    3,081 
Outsourced data processing costs   3,845    5,809    3,493    3,393    3,679 
Telephone / data lines   811    602    624    643    612 
Occupancy   3,807    3,747    3,214    3,316    3,117 
Furniture and equipment   1,757    2,452    1,367    1,468    1,457 
Marketing   1,132    1,350    1,139    1,344    1,252 
Legal and professional fees   2,847    3,668    2,019    2,301    1,973 
FDIC assessments   488    571    431    595    598 
Amortization of intangibles   1,458    1,303    1,004    1,004    989 
Foreclosed property expense and net (gain)/loss on sale   (40)       (136)   405    192 
Other   4,282    4,165    3,910    4,314    4,833 
Total Noninterest Expense   43,099    49,464    37,399    38,246    37,164 
                          
Income Before Income Taxes   29,114    20,892    20,680    22,153    23,809 
Income taxes   6,409    4,930    4,358    5,189    5,782 
                          
Net Income  $22,705   $15,962   $16,322   $16,964   $18,027 
                          
Per share of common stock:                         
                          
Net income diluted  $0.44   $0.31   $0.34   $0.35   $0.38 
Net income basic   0.44    0.32    0.35    0.36    0.38 
Cash dividends declared                    
                          
Average diluted shares outstanding   52,039    51,237    48,029    47,974    47,688 
Average basic shares outstanding   51,359    50,523    47,205    47,165    46,952 

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS  (Unaudited)     
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES            
     
   March 31,   December 31,   September 30,   June 30,   March 31, 
(Amounts in thousands)  2019   2018   2018   2018   2018 
                     
Assets                         
Cash and due from banks  $98,270   $92,242   $101,920   $123,927   $129,065 
Interest bearing deposits with other banks   105,741    23,709    3,174    7,594    6,794 
Total Cash and Cash Equivalents   204,011    115,951    105,094    131,521    135,859 
                          
Time deposits with other banks   8,174    8,243    9,813    10,562    12,553 
                          
Debt Securities:                         
Available for sale (at fair value)   877,549    865,831    923,206    954,906    982,958 
Held to maturity (at amortized cost)   295,485    357,949    367,387    382,137    400,647 
Total Debt Securities   1,173,034    1,223,780    1,290,593    1,337,043    1,383,605 
                          
Loans held for sale   13,900    11,873    16,172    14,707    20,887 
                          
Loans   4,828,441    4,825,214    4,059,323    3,974,016    3,897,125 
Less: Allowance for loan losses   (32,822)   (32,423)   (33,865)   (28,924)   (28,118)
Net Loans   4,795,619    4,792,791    4,025,458    3,945,092    3,869,007 
                          
Bank premises and equipment, net   70,412    71,024    63,531    63,991    64,577 
Other real estate owned   11,921    12,802    4,715    8,417    10,288 
Goodwill   205,260    204,753    148,555    148,555    148,555 
Other intangible assets, net   23,959    25,977    16,508    17,319    18,246 
Bank owned life insurance   124,306    123,394    122,561    121,602    120,654 
Net deferred tax assets   24,647    28,954    25,822    26,021    24,427 
Other assets   128,146    128,117    102,112    97,851    94,443 
Total Assets  $6,783,389   $6,747,659   $5,930,934   $5,922,681   $5,903,101 
                          
Liabilities and Shareholders' Equity                         
Liabilities                         
Deposits                         
Noninterest demand  $1,676,009   $1,569,602   $1,488,689   $1,463,652   $1,488,261 
Interest-bearing demand   1,100,477    1,014,032    912,891    976,281    1,015,054 
Savings   508,320    493,807    451,958    444,736    437,878 
Money market   1,192,070    1,173,950    1,036,940    1,023,170    1,035,531 
Other time certificates   539,202    513,312    411,208    413,643    410,108 
Brokered time certificates   367,841    220,594    192,182    228,602    184,405 
Time certificates of more than $250,000   221,659    191,943    149,642    147,356    148,306 
Total Deposits   5,605,578    5,177,240    4,643,510    4,697,440    4,719,543 
                          
Securities sold under agreements to repurchase   148,005    214,323    189,035    200,050    173,249 
Federal Home Loan Bank borrowings   3,000    380,000    261,000    205,000    208,000 
Subordinated debt   70,874    70,804    70,734    70,664    70,591 
Other liabilities   59,508    41,025    33,824    33,364    29,857 
Total Liabilities   5,886,965    5,883,392    5,198,103    5,206,518    5,201,240 
                          
Shareholders' Equity                         
Common stock   5,141    5,136    4,727    4,716    4,698 
Additional paid in capital   780,680    778,501    668,711    665,885    663,727 
Retained earnings   119,779    97,074    81,112    64,790    47,825 
Treasury stock   (4,959)   (3,384)   (2,854)   (2,884)   (2,279)
    900,641    877,327    751,696    732,507    713,971 
Accumulated other comprehensive loss, net   (4,217)   (13,060)   (18,865)   (16,344)   (12,110)
Total Shareholders' Equity   896,424    864,267    732,831    716,163    701,861 
Total Liabilities & Shareholders' Equity  $6,783,389   $6,747,659   $5,930,934   $5,922,681   $5,903,101 
                          
Common shares outstanding   51,414    51,361    47,270    47,163    46,983 

 

 

 

 

 

CONSOLIDATED QUARTERLY FINANCIAL DATA  (Unaudited) 
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                
                     
(Amounts in thousands)  1Q'19   4Q'18   3Q'18   2Q'18   1Q'18 
                     
Credit Analysis                         
Net charge-offs (recoveries) - non-acquired loans  $762   $3,693   $800   $1,715   $117 
Net charge-offs (recoveries) - acquired loans   201    56    (3)   (25)   (116)
Total Net Charge-offs (Recoveries)   963    3,749    797    1,690    1 
                          
TDR valuation adjustments  $35   $35   $36   $33   $88 
                          
Net charge-offs (recoveries) to average loans - non-acquired loans   0.06%   0.32%   0.08%   0.17%   0.01%
Net charge-offs (recoveries) to average loans - acquired loans   0.02                (0.01)
Total Net Charge-offs (Recoveries) to Average Loans   0.08    0.32    0.08    0.17     
                          
Provision for loan losses - non-acquired loans  $1,709   $2,343   $5,640   $2,591   $1,383 
Provision for (recapture of) loan losses - acquired loans   (312)   (1)   134    (62)   (298)
Total Provision for Loan Losses  $1,397   $2,342   $5,774   $2,529   $1,085 
                          
Allowance for loan losses - non-acquired loans  $32,715   $31,803   $33,188   $28,384   $27,541 
Allowance for loan losses - acquired loans   107    620    677    540    577 
Total Allowance for Loan Losses  $32,822   $32,423   $33,865   $28,924   $28,118 
                          
Non-acquired loans at end of period  $3,667,221   $3,588,251   $3,383,571   $3,221,569   $3,063,618 
Purchased noncredit impaired loans at end of period   1,147,432    1,222,529    662,701    739,232    819,814 
Purchased credit impaired loans at end of period   13,788    14,434    13,051    13,215    13,693 
Total Loans  $4,828,441   $4,825,214   $4,059,323   $3,974,016   $3,897,125 
                          
Non-acquired loans allowance for loan losses to non-acquired loans at end of period   0.89%   0.89%   0.98%   0.88%   0.90%
Total allowance for loan losses to total loans at end of period   0.68    0.67    0.83    0.73    0.72 
Purchase discount on acquired loans at end of period   3.80    3.86    2.25    2.31    2.32 
                          
End of Period                         
Nonperforming loans - non-acquired  $15,423   $15,783   $18,998   $19,578   $12,628 
Nonperforming loans - acquired   6,990    10,693    7,142    6,624    6,711 
Other real estate owned - non-acquired   831    386    418    354    2,246 
Other real estate owned - acquired   1,725    3,020    1,203    4,969    4,969 
Bank branches closed included in other real estate owned   9,365    9,396    3,094    3,094    3,073 
Total Nonperforming Assets  $34,334   $39,278   $30,855   $34,619   $29,627 
                          
Restructured loans (accruing)  $14,857   $13,346   $13,797   $14,241   $14,777 
                          
Nonperforming loans to loans at end of period - non-acquired   0.42%   0.44%   0.56%   0.61%   0.41%
Nonperforming loans to loans at end of period - acquired   0.60    0.86    1.06    0.88    0.81 
Total Nonperforming Loans to Loans at End of Period   0.46    0.55    0.64    0.66    0.50 
                          
Nonperforming assets to total assets - non-acquired   0.38%   0.38%   0.38%   0.39%   0.30%
Nonperforming assets to total assets - acquired   0.13    0.20    0.14    0.19    0.20 
Total Nonperforming Assets to Total Assets   0.51    0.58    0.52    0.58    0.50 
                     
   March 31,   December 31,   September 30,   June 30,   March 31, 
Loans  2019   2018   2018   2018   2018 
                     
Construction and land development  $417,565   $443,568   $376,257   $359,070   $374,244 
Commercial real estate - owner occupied   989,234    970,181    829,368    812,306    796,898 
Commercial real estate - non-owner occupied   1,173,183    1,161,885    897,331    888,989    848,341 
Residential real estate   1,329,166    1,324,377    1,152,640    1,103,946    1,065,152 
Consumer   206,414    202,881    192,772    190,835    195,788 
Commercial and financial   712,879    722,322    610,955    618,870    616,702 
Total Loans  $4,828,441   $4,825,214   $4,059,323   $3,974,016   $3,897,125 

 

 

 

  

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

 

   1Q'19   4Q'18   1Q'18 
   Average       Yield/   Average       Yield/   Average       Yield/ 
(Amounts in thousands)  Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate 
                                     
Assets                                             
Earning assets:                                             
Securities:                                             
Taxable  $1,186,374   $9,119    3.07%  $1,227,648   $9,528    3.10%  $1,361,277   $9,361    2.75%
Nontaxable   26,561    190    2.86    29,255    252    3.45    32,640    307    3.76 
Total Securities   1,212,935    9,309    3.07    1,256,903    9,780    3.11    1,393,917    9,668    2.77 
                                              
Federal funds sold and other                                             
investments   91,136    918    4.09    87,146    835    3.80    56,173    616    4.45 
                                              
Loans, net   4,839,046    62,335    5.22    4,611,691    59,559    5.12    3,872,369    45,284    4.74 
                                              
Total Earning Assets   6,143,117    72,562    4.79    5,955,740    70,174    4.67    5,322,459    55,568    4.23 
                                              
Allowance for loan losses   (32,966)             (33,864)             (27,469)          
Cash and due from banks   99,940              124,299              113,899           
Premises and equipment   70,938              75,120              65,932           
Intangible assets   230,066              213,713              167,136           
Bank owned life insurance   123,708              132,495              122,268           
Other assets   136,175              122,367              87,463           
Total Assets  $6,770,978             $6,589,870             $5,851,688           
                                              
Liabilities and Shareholders' Equity                                             
Interest-bearing liabilities:                                             
Interest-bearing demand  $1,029,726   $839    0.33%  $974,711   $515    0.21%  $1,001,672   $450    0.18%
Savings   500,347    477    0.39    509,434    418    0.33    435,433    104    0.10 
Money market   1,158,939    2,557    0.89    1,161,599    2,207    0.75    976,498    984    0.41 
Time deposits   1,042,346    4,959    1.93    899,153    3,901    1.72    776,807    2,179    1.14 
Federal funds purchased and securities                                             
sold under agreements to repurchase   185,032    550    1.21    242,963    732    1.20    175,982    274    0.63 
Federal Home Loan Bank borrowings   227,378    1,421    2.53    240,799    1,468    2.42    276,389    1,030    1.51 
Other borrowings   70,836    898    5.14    70,764    833    4.67    70,550    694    3.99 
                                              
Total Interest-Bearing Liabilities   4,214,604    11,701    1.13    4,099,423    10,074    0.97    3,713,331    5,715    0.62 
                                              
Noninterest demand   1,612,548              1,628,842              1,413,967           
Other liabilities   64,262              33,846              29,150           
Total Liabilities   5,891,414              5,762,111              5,156,448           
                                              
Shareholders' equity   879,564              827,759              695,240           
                                              
Total Liabilities & Equity  $6,770,978             $6,589,870             $5,851,688           
                                              
Cost of deposits             0.67%             0.54%             0.33%
Interest expense as a % of earning assets             0.77%             0.67%             0.44%
Net interest income as a % of earning assets       $60,861    4.02%       $60,100    4.00%       $49,853    3.80%

 

 

1On a fully taxable equivalent basis.  All yields and rates have been computed using amortized cost.

Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.          

 

 

 

 

CONSOLIDATED QUARTERLY FINANCIAL DATA      (Unaudited)         
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES            
     
   March 31,   December 31,   September 30,   June 30,   March 31, 
(Amounts in thousands)  2019   2018   2018   2018   2018 
                     
Customer Relationship Funding                         
Noninterest demand                         
Commercial  $1,298,468   $1,217,842   $1,182,018   $1,154,225   $1,163,119 
Retail   275,383    259,318    233,472    236,838    252,055 
Public funds   73,640    68,324    42,474    44,182    49,014 
Other   28,518    24,118    30,725    28,407    24,073 
Total Noninterest Demand   1,676,009    1,569,602    1,488,689    1,463,652    1,488,261 
                          
Interest-bearing demand                         
Commercial   289,544    211,879    167,865    181,646    164,359 
Retail   646,522    650,490    655,429    681,615    700,262 
Public funds   164,411    151,663    89,597    113,020    150,433 
Total Interest-Bearing Demand   1,100,477    1,014,032    912,891    976,281    1,015,054 
                          
Total transaction accounts                         
Commercial   1,588,012    1,429,721    1,349,883    1,335,871    1,327,478 
Retail   921,905    909,808    888,901    918,453    952,317 
Public funds   238,051    219,987    132,071    157,202    199,447 
Other   28,518    24,118    30,725    28,407    24,073 
Total Transaction Accounts   2,776,486    2,583,634    2,401,580    2,439,933    2,503,315 
                          
Savings   508,320    493,807    451,958    444,736    437,878 
                          
Money market                         
Commercial   500,649    459,380    423,304    408,005    410,527 
Retail   602,378    607,837    524,415    522,783    522,882 
Public funds   89,043    106,733    89,221    92,382    102,122 
Total Money Market   1,192,070    1,173,950    1,036,940    1,023,170    1,035,531 
                          
Brokered time certificates   367,841    220,594    192,182    228,602    184,405 
Other time certificates   760,861    705,255    560,850    560,999    558,414 
    1,128,702    925,849    753,032    789,601    742,819 
Total Deposits  $5,605,578   $5,177,240   $4,643,510   $4,697,440   $4,719,543 
                          
Customer sweep accounts  $148,005   $214,323   $189,035   $200,050   $173,249 

 

 

 

 

 

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 (Unaudited)
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES

 

   Quarterly Trends 
                     
(Amounts in thousands, except per share data)  1Q'19   4Q'18   3Q'18   2Q'18   1Q'18 
                     
Net Income  $22,705   $15,962   $16,322   $16,964   $18,027 
                          
Total noninterest income   12,836    12,714    12,291    12,721    12,296 
Securities losses, net   9    425    48    48    102 
BOLI benefits on death (included in other income)       (280)            
Total Adjustments to Noninterest Income   9    145    48    48    102 
Total Adjusted Noninterest Income   12,845    12,859    12,339    12,769    12,398 
                          
Total noninterest expense   43,099    49,464    37,399    38,246    37,164 
Merger related charges   (335)   (8,034)   (482)   (695)   (470)
Amortization of intangibles   (1,458)   (1,303)   (1,004)   (1,004)   (989)
Branch reductions and other expense initiatives   (208)   (587)            
Total Adjustments to Noninterest Expense   (2,001)   (9,924)   (1,486)   (1,699)   (1,459)
Total Adjusted Noninterest Expense   41,098    39,540    35,913    36,547    35,705 
                          
Income Taxes   6,409    4,930    4,358    5,189    5,782 
Tax effect of adjustments   510    2,623    230    443    538 
Taxes and tax penalties on acquisition-related BOLI redemption       (485)            
Effect of change in corporate tax rate                   (248)
Total Adjustments to Income Taxes   510    2,138    230    443    290 
Adjusted Income Taxes   6,919    7,068    4,588    5,632    6,072 
Adjusted Net Income  $24,205   $23,893   $17,626   $18,268   $19,298 
                          
Earnings per diluted share, as reported  $0.44   $0.31   $0.34   $0.35   $0.38 
Adjusted Earnings per Diluted Share   0.47    0.47    0.37    0.38    0.40 
Average diluted shares outstanding   52,039    51,237    48,029    47,974    47,688 
                          
Adjusted Noninterest Expense  $41,098   $39,540   $35,913   $36,547   $35,705 
Foreclosed property expense and net gain/(loss) on sale   40        137    (405)   (192)
Net Adjusted Noninterest Expense  $41,138   $39,540   $36,050   $36,142   $35,513 
                          
Revenue  $73,610   $72,698   $63,853   $62,928   $62,058 
Total Adjustments to Revenue   9    145    48    48    102 
Impact of FTE adjustment   87    116    147    87    91 
Adjusted Revenue on a fully taxable equivalent basis  $73,706   $72,959   $64,048   $63,063   $62,251 
Adjusted Efficiency Ratio   55.81%   54.19%   56.29%   57.31%   57.05%
                          
Average Assets  $6,770,978   $6,589,870   $5,903,327   $5,878,035   $5,851,688 
Less average goodwill and intangible assets   (230,066)   (213,713)   (165,534)   (166,393)   (167,136)
Average Tangible Assets  $6,540,912   $6,376,157   $5,737,793   $5,711,642   $5,684,552 
                          
Return on Average Assets (ROA)   1.36%   0.96%   1.10%   1.16%   1.25%
Impact of removing average intangible assets and related amortization   0.12    0.09    0.08    0.08    0.09 
Return on Average Tangible Assets (ROTA)   1.48    1.05    1.18    1.24    1.34 
Impact of other adjustments for Adjusted Net Income   0.02    0.44    0.04    0.04    0.04 
Adjusted Return on Average Tangible Assets   1.50    1.49    1.22    1.28    1.38 
                          
Average Shareholders' Equity  $879,564   $827,759   $728,290   $709,674   $695,240 
Less average goodwill and intangible assets   (230,066)   (213,713)   (165,534)   (166,393)   (167,136)
Average Tangible Equity  $649,498        $614,046   $562,756   $543,281 
                          
Return on Average Shareholders' Equity   10.47%   7.65%   8.89%   9.59%   10.52%
Impact of removing average intangible assets and related amortization   4.39    3.29    3.15    3.49    3.89 
Return on Average Tangible Common Equity (ROTCE)   14.86    10.94    12.04    13.08    14.41 
Impact of other adjustments for Adjusted Net Income   0.25    4.50    0.39    0.41    0.41 
Adjusted Return on Average Tangible Common Equity   15.11    15.44    12.43    13.49    14.82 

 

 

 

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

 

Exhibit 99.2

 

Earnings Presentation FIRST QUARTER 2019 RESULTS Contact: (email) [email protected] (phone) 772.221.7003 (web) www.SeacoastBanking.com

 

 

2 FIRST QUARTER 2019 EARNINGS PRESENTATION Cautionary Notice Regarding Forward - Looking Statements This press release contains “forward - looking statements” within the meaning, and protections, of Section 27 A of the Securities Act of 1933 and Section 21 E 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, assumptions, estimates and intentions about future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward - looking statements . You should not expect us to update any forward - looking statements . All statements other than statements of historical fact could be forward - looking statements . You can identify these forward - looking statements through our use of words such as “may”, “will”, “anticipate”, “assume”, “should”, “support”, “indicate”, “would”, “believe”, “contemplate”, “expect”, “estimate”, “continue”, “further”, “plan”, “point to”, “project”, “could”, “intend”, “target” or other similar words and expressions of the future . These forward - looking statements may not be realized due to a variety of factors, including, without limitation : the effects of future economic and market conditions, including seasonality ; governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes ; changes in accounting policies, rules and practices ; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities ; interest rate risks, sensitivities and the shape of the yield curve ; changes in borrower credit risks and payment behaviors ; changes in the availability and cost of credit and capital in the financial markets ; changes in the prices, values and sales volumes of residential and commercial real estate ; our ability to comply with any regulatory requirements ; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry ; our concentration in commercial real estate loans ; the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions ; the impact on the valuation of our investments due to market volatility or counterparty payment risk ; statutory and regulatory dividends restrictions ; increases in regulatory capital requirements for banking organizations generally ; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire desirable financial institutions ; changes in technology or products that may be more difficult, costly, or less effective than anticipated ; our ability to identify and address increased cybersecurity risks ; inability of our risk management framework to manage risks associated with our business ; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms ; reduction in or the termination of our ability to use the mobile - based platform that is critical to our business growth strategy ; the effects of war or other conflicts, acts of terrorism, natural disasters or other catastrophic events that may affect general economic conditions ; unexpected outcomes of, and the costs associated with, existing or new litigation involving us ; our ability to maintain adequate internal controls over financial reporting ; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions ; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes ; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet ; and the failure of assumptions underlying the establishment of reserves for possible loan losses . All written or oral forward - looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10 - K for the year ended December 31 , 2018 under “Special Cautionary Notice Regarding Forward - Looking Statements” and “Risk Factors”, and otherwise in our SEC reports and filings . Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC’s Internet website at www . sec . gov .

 

 

3 FIRST QUARTER 2019 EARNINGS PRESENTATION Seacoast Bank [NASDAQ: SBCF] Valuable Florida Franchise With Balanced Growth Strategy, Benefiting from Attractive Geography, Investments in Customer Analytics and Business Banking Platform, and Disciplined Acquisition Strategy • $ 6 . 8 billion in assets as of March 31 , 2019 , operating in the nation’s third - most populous state • Strong and growing presence in four of Florida’s most attractive MSAs ⦁ # 1 Florida - based bank in the Orlando MSA ⦁ Growing share in West Palm Beach ⦁ # 2 share in Port St Lucie MSA ⦁ Growing presence in Tampa MSA Seacoast Customer Map • Investing in business banking and innovative customer analytics • Growth - oriented culture, engaged associate base, strong customer advocacy • Active board with a diverse range of experience and expertise • Market Cap : $ 1 . 4 billion as of March 31 , 2019

 

 

4 FIRST QUARTER 2019 EARNINGS PRESENTATION First Quarter Highlights WITH A GROWING PRESENCE IN FLORIDA'S MOST ATTRACTIVE MARKETS, SEACOAST IS ONE OF FLORIDA'S TOP - PERFORMING BANKING FRANCHISES • Earnings per share totaled $ 0 . 44 on a GAAP basis and $ 0 . 47 on an adjusted basis 1 • On a GAAP basis, ended the quarter at 1 . 48 % Return on Tangible Assets (ROTA), 14 . 9 % Return on Average Tangible Common Equity, and 56 . 6 % efficiency ratio . On an adjusted basis, first quarter results were 1 . 50 % adjusted ROTA 1 , 15 . 1 % adjusted ROTCE 1 , and 55 . 8 % adjusted efficiency ratio 1 • Net interest margin increased to 4 . 02 % , up 2 basis points f r om the prior quarter . Removing accretion on acquired loans, the net interest margin expanded 3 basis points • Total deposits grew 16 % on an annualized basis when removing the favorable impact from additional brokered deposits acquired during the quarter totaling $ 147 million and customer sweep balances transferred to interest bearing deposits totaling $ 76 million • Noninterest bearing demand deposits grew 27 % on an annualized basis • Hired 10 business bankers, augmenting the 10 business bankers we hired in Q 4 , expanding distribution in the fast growing markets of Fort Lauderdale and Tampa 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures”

4 FIRST QUARTER 2019 EARNINGS PRESENTATION First Quarter Highlights WITH A GROWING PRESENCE IN FLORIDA'S MOST ATTRACTIVE MARKETS, SEACOAST IS ONE OF FLORIDA'S TOP - PERFORMING BANKING FRANCHISES • Earnings per share totaled $ 0 . 44 on a GAAP basis and $ 0 . 47 on an adjusted basis 1 • On a GAAP basis, ended the quarter at 1 . 48 % Return on Tangible Assets (ROTA), 14 . 9 % Return on Average Tangible Common Equity, and 56 . 6 % efficiency ratio . On an adjusted basis, first quarter results were 1 . 50 % adjusted ROTA 1 , 15 . 1 % adjusted ROTCE 1 , and 55 . 8 % adjusted efficiency ratio 1 • Net interest margin increased to 4 . 02 % , up 2 basis points form the prior quarter . Removing accretion on acquired loans, the net interest margin expanded 3 basis points • Total deposits grew 16 % on an annualized basis when removing the favorable impact from additional brokered deposits acquired during the quarter totaling $ 147 million and customer sweep balances transferred to interest bearing deposits totaling $ 76 million • Noninterest bearing demand deposits grew 27 % on an annualized basis • Hired 10 business bankers, augmenting the 10 business bankers we hired in Q 4 , expanding distribution in the fast growing markets of Fort Lauderdale and Tampa Bay 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures”

 

 

5 FIRST QUARTER 2019 EARNINGS PRESENTATION Net Interest Income and Margin • Net interest income 1 totaled $ 60 . 9 million, up $ 0 . 8 million or 1 % from the prior quarter and $ 11 . 0 million or 22 % from the prior year quarter . • Net interest margin 1 increased 2 basis points to 4 . 02 % quarter - over - quarter . Removing accretion on acquired loans, the net interest margin expanded 3 basis points . 1 Calculated on a fully taxable equivalent basis using amortized cost ($ In Thousands)

 

 

6 FIRST QUARTER 2019 EARNINGS PRESENTATION Adjusted Noninterest Income 1 • Adjusted noninterest income 1 totaled $ 12 . 8 million, flat sequentially and up $ 0 . 4 million compared to the prior year quarter . Quarter - over - quarter results include : ⦁ Service charges on deposits declined by $ 0 . 3 million, the result of fewer business days in the first quarter, which was offset by mortgage banking fees which increased $ 0 . 3 million, the result of a successful introduction of new saleable residential mortgage products and a focus on generating saleable volume . ⦁ Interchange income increased $ 0 . 2 million sequentially while wealth - related fees were down modestly, the result of lower equity valuations . ⦁ The decline in BOLI - related income was the result of the cancellation of low yielding policies acquired in the First Green acquisition . 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures” 2 Other income includes marine finance fees, swap related income and other fees related to customer activity.

 

 

7 FIRST QUARTER 2019 EARNINGS PRESENTATION Adjusted Noninterest Expense 1 • Adjusted noninterest expense in the first quarter includes : ⦁ Salaries and benefits included higher seasonal payroll taxes and 401 (k) plan contributions, typical of the first quarter . Additionally, we hired 10 business bankers in Tampa and Fort Lauderdale, augmenting the 10 business bankers hired in the fourth quarter . ⦁ As required by existing accounting guidance, we defer the net costs of loan originations . Such deferrals were lower quarter over quarter due to lower loan production, resulting in higher noninterest expense . ⦁ Two previously ongoing projects in risk management and lending operations were accelerated that will support the scaling of our business, resulting in higher professional fees in the quarter . ⦁ During the second quarter of 2019 , our continued focus on efficiency and streamlining operations will result in a reduction of approximately 50 full time equivalent employees . While the Company will incur severance charges of approximately $ 1 . 5 million , this in combination with other expense initiatives, including two more banking center closures will result in approximately a $ 10 million annual pre - tax expense reduction . 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures” 2 Other expense includes marketing expenses and other expenses associated with ongoing business operations.

7 FIRST QUARTER 2019 EARNINGS PRESENTATION Adjusted Noninterest Expense 1 • Adjusted noninterest expense in the first quarter includes : ⦁ Salaries and benefits included higher seasonal payroll taxes and 401 (k) plan contributions, typical of the first quarter . Additionally, we hired 10 business bankers in Tampa Bay and Fort Lauderdale, augmenting the 10 business bankers hired in the fourth quarter . ⦁ As required by existing accounting guidance, we defer the net costs of loan originations . Such deferrals were lower quarter over quarter due to lower loan production, resulting in higher noninterest expense . ⦁ Two previously ongoing projects in risk management and lending operations were accelerated that will support the scaling of our business, resulting in higher professional fees in the quarter . ⦁ During the second quarter of 2019 , our continued focus on efficiency and streamlining operations will result in a reduction of approximately 50 full time equivalent employees . While the Company will incur severance charges of approximately $ 1 . 5 million , this in combination with other expense initiatives, including two more banking center closures will result in approximately a $ 10 million annual pre - tax expense reduction . 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures” 2 Other expense includes marketing expenses and other expenses associated with ongoing business operations.

 

 

8 FIRST QUARTER 2019 EARNINGS PRESENTATION Efficiency Ratio • The efficiency ratio was 56 . 6 % compared to 65 . 8 % in the prior quarter and 57 . 8 % in the first quarter of 2018 . • The adjusted efficiency ratio 1 was 55 . 8 % compared to 54 . 2 % in the prior quarter and 57 . 1 % in the first quarter of 2018 . • The quarter over quarter increase in the adjusted efficiency ratio 1 was primarily the result of a return of seasonal 401 (k) and payroll taxes expenses 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures” GAAP - Efficiency Adjusted - Efficiency 1

 

 

9 FIRST QUARTER 2019 EARNINGS PRESENTATION Loan Growth Momentum Continues, Supported by a Strong Florida Economy, and Prudent Guardrails • First quarter loans totaled $ 4 . 8 billion, an increase of $ 0 . 9 billion or 24 % year - over - year . Adjusting for acquisitions, loans grew $ 300 million or 8 % year over year . • First quarter consumer and small business originations were $ 119 million, up 20 % compared to the prior year . • The increase in yield on loan outstandings quarter - over - quarter reflects the positive impact of increases in benchmark interest rates in late 2018 and higher add - on yields for new loan production . • Pipelines in all segments increased sequentially and exiting the first quarter of 2019 were $ 177 million in commercial, $ 68 million in consumer and small business, and $ 45 million in residential . Total Loans Outstanding ($ in millions) Accretion on Acquired Loans

 

 

10 FIRST QUARTER 2019 EARNINGS PRESENTATION Solid Deposit Growth Reflects Strong Franchise Fundamentals and Positioning in Attractive Markets • Interest - bearing deposits increased year - over - year by $ 312 . 4 million, or 13 % , to $ 2 . 8 billion . • Year - over - year noninterest demand deposits grew 13 % , to $ 1 . 7 billion, and time deposits increased $ 385 . 9 million, or 52 % , to $ 1 . 1 billion . • Total deposits grew 16 % on an annualized basis when removing the favorable impact from additional brokered deposits acquired during the quarter totaling $ 147 million and customer sweep balances transferred to interest bearing deposits totaling $ 76 million • During the quarter, non - interest - bearing demand deposits grew 27 % on an annualized basis . • Transaction accounts represented 50 % of total deposits and increased 11 % year - over - year . • Overall cost of deposits increased to 67 basis points, in part, the result of a strategic shift from FHLB advances to brokered time deposits . This shift impacted the cost of deposits by 3 basis points, but reduced the overall cost of funding . 50% Deposits Outstanding ($ in millions)

 

 

11 FIRST QUARTER 2019 EARNINGS PRESENTATION Average Deposit Balances and Cost Our focus on organic growth and relationship - based funding, in combination with our innovative analytics platform, supports a well - diversified low - cost deposit portfolio . Our deposit beta continues to outperform our peers . 0.33% 0.39% 0.43% 0.54% 0.67% Deposit Mix and Cost of Deposits Trended Cost of Deposits

 

 

12 FIRST QUARTER 2019 EARNINGS PRESENTATION Credit Quality Non - Acquired 1 1 Includes charge off of $3.0 million for a single impaired loan. Net Charge - Offs ($ in thousands) Nonperforming Loans ($ in thousands) Provision for Loan Losses ( $ in thousands) ALLL ($ in thousands)

 

 

13 FIRST QUARTER 2019 EARNINGS PRESENTATION Maintaining Strong Capital to Support Balanced Growth Opportunities 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures.” Tangible Book Value / Book Value Per Share Tangible Common Equity / Tangible Assets Total Risk Based and Tier 1 Capital Adjusted Return on Tangible Common Equity 1

 

 

14 FIRST QUARTER 2019 EARNINGS PRESENTATION On - track to Achieve Our Vision 2020 Objectives Vision 2020 Targets Return on Tangible Assets 1.30% + Return on Tangible Common Equity 16% + Efficiency Ratio Below 50%

 

 

15 FIRST QUARTER 2019 EARNINGS PRESENTATION Contact Details: Seacoast Banking Corporation of Florida Charles M. Shaffer Executive Vice President Chief Financial Officer (772) 221 - 7003 INVESTOR RELATIONS NASDAQ: SBCF

 

 

16 FIRST QUARTER 2019 EARNINGS PRESENTATION Explanation of Certain Unaudited Non - GAAP Financial Measures This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”) . The financial highlights provide reconciliations between GAAP net income and adjusted net income, GAAP income and adjusted pretax, preprovision income . 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 .

 

 

17 FIRST QUARTER 2019 EARNINGS PRESENTATION GAAP to Non - GAAP Reconciliation Quarterly Trend (Amounts in thousands except per share data) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Net Income $ 22,705 $ 15,962 $ 16,322 $ 16,964 $ 18,027 Total noninterest income $ 12,836 $ 12,714 $ 12,291 $ 12,721 $ 12,296 Securities losses, net 9 425 48 48 102 BOLI benefits on death (included in other income) — (280 ) — — — Total Adjustments to Noninterest Income 9 145 48 48 102 Total Adjusted Noninterest Income 12,845 12,859 12,339 12,769 12,398 Total noninterest expense $ 43,099 $ 49,464 $ 37,399 $ 38,246 $ 37,164 Merger related charges (335 ) (8,034 ) (482 ) (695 ) (470 ) Amortization of intangibles (1,458 ) (1,303 ) (1,004 ) (1,004 ) (989 ) Branch reductions and other expense initiatives (208 ) (587 ) — — — Total Adjustments to Noninterest Expense (2,001 ) (9,924 ) (1,486 ) (1,699 ) (1,459 ) Total Adjusted Noninterest Expense 41,098 39,540 35,913 36,547 35,705 Income Taxes $ 6,409 $ 4,930 $ 4,358 $ 5,189 $ 5,782 Tax effect of adjustments 510 2,623 230 443 538 Taxes and tax penalties on acquisition - related BOLI redemption — (485 ) — — — Effect of change in corporate tax rate — — — — (248 ) Total Adjustments to Income Taxes 510 2,138 230 443 290 Adjusted Income Taxes 6,919 7,068 4,588 5,632 6,072 Adjusted Net Income 24,205 23,893 17,626 18,268 19,298 Earnings per diluted share, as reported $ 0.44 $ 0.31 $ 0.34 $ 0.35 $ 0.38 Adjusted Earnings per Diluted Share 0.47 0.47 0.37 0.38 0.40 Average diluted shares outstanding 52,039 51,237 48,029 47,974 47,688

 

 

18 FIRST QUARTER 2019 EARNINGS PRESENTATION GAAP to Non - GAAP Reconciliation Quarterly Trend (Amounts in thousands except per share data) 1Q'19 4Q'18 3Q'18 2Q'18 1Q'18 Adjusted Noninterest Expense $ 41,098 $ 39,540 $ 35,913 $ 36,547 $ 35,705 Foreclosed property expense and net gain/(loss) on sale 40 — 137 (405 ) (192 ) Net Adjusted Noninterest Expense 41,138 39,540 36,050 36,142 35,513 Revenue $ 73,610 $ 72,698 $ 63,853 $ 62,928 $ 62,058 Total Adjustments to Revenue 9 145 48 48 102 Impact of FTE adjustment 87 116 147 87 91 Adjusted Revenue on a fully taxable equivalent basis 73,706 72,959 64,048 63,063 62,251 Adjusted Efficiency Ratio 55.81 % 54.19 % 56.29 % 57.31 % 57.05 % Average Assets $ 6,770,978 $ 6,589,870 $ 5,903,327 $ 5,878,035 $ 5,851,688 Less average goodwill and intangible assets (230,066 ) (213,713 ) (165,534 ) (166,393 ) (167,136 ) Average Tangible Assets 6,540,912 6,376,157 5,737,793 5,711,642 5,684,552 Return on Average Assets (ROA) 1.36 % 0.96 % 1.10 % 1.16 % 1.25 % Impact of removing average intangible assets and related amortization 0.12 0.09 0.08 0.08 0.09 Return on Average Tangible Assets (ROTA) 1.48 1.05 1.18 1.24 1.34 Impact of other adjustments for Adjusted Net Income 0.02 0.44 0.04 0.04 0.04 Adjusted Return on Average Tangible Assets 1.50 1.49 1.22 1.28 1.38 Average Shareholders' Equity $ 879,564 $ 827,759 $ 728,290 $ 709,674 $ 695,240 Less average goodwill and intangible assets (230,066 ) (213,713 ) (165,534 ) (166,393 ) (167,136 ) Average Tangible Equity 649,498 614,046 562,756 543,281 528,104 Return on Average Shareholders' Equity 10.47 % 7.65 % 8.89 % 9.59 % 10.52 % Impact of removing average intangible assets and related amortization 4.39 3.29 3.15 3.49 3.89 Return on Average Tangible Common Equity (ROTCE) 14.86 10.94 12.04 13.08 14.41 Impact of other adjustments for Adjusted Net Income 0.25 4.50 0.39 0.41 0.41 Adjusted Return on Average Tangible Common Equity 15.11 15.44 12.43 13.49 14.82

 

 

 

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