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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)     July 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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock SBCF Nasdaq Global Select Market

 

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.  ¨

 

SEACOAST BANKING CORPORATION OF FLORIDA

 

 

 

 

 

 

8-K – page 2 of 6

 

Item 2.02Results of Operations and Financial Condition

 

On July 25, 2019, Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the quarter ended June 30, 2019.

 

A copy of the press release announcing Seacoast’s results for the quarter ended June 30, 2019 is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 7.01Regulation FD Disclosure

 

On July 26, 2019, Seacoast will hold an investor conference call to discuss its financial results for the quarter ended June 30, 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 June 30, 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 July 25, 2019 with respect to Seacoast’s financial results for the quarter ended June 30, 2019
    
99.2  Data on website containing information used in the conference call to be held on July 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.

 

 

 

 

8-K – page 3 of 6

 

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.

 

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:  July 25, 2019 By:   /s/ Charles M. Shaffer
    Charles M. Shaffer
    Chief Operating Officer and Chief Financial Officer

 

 

 

 

8-K – page 6 of 6

 

EXHIBIT INDEX

 

 

Exhibit No.    Description
99.1   Press Release dated July 25, 2019 with respect to Seacoast’s financial results for the quarter ended June 30, 2019
     
99.2   Data on website containing information used in the conference call to be held on July 26, 2019

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

 

 

Charles M. Shaffer

Executive Vice President

Chief Operating Officer and

Chief Financial Officer

(772) 221-7003

[email protected]

 

SEACOAST REPORTS RECORD SECOND QUARTER 2019 EARNINGS RESULTS

 

Net Income Increased 37% Year-Over-Year to $23.3 Million

 

Improved Operating Leverage and Strong Noninterest Income Highlight Quarterly Results

 

STUART, Fla., July 25, 2019 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) (NASDAQ: SBCF) today reported second quarter 2019 net income of $23.3 million, or $0.45 per diluted share, up 37% or $6.3 million year-over-year. Seacoast reported second quarter 2019 adjusted net income1 of $25.8 million, or $0.50 per diluted share, an increase of 41% or $7.6 million compared to the second quarter of 2018.

 

For the second quarter of 2019, return on average tangible assets was 1.50%, return on average tangible shareholders’ equity was 14.3%, and the efficiency ratio was 53.5%, compared to 1.48%, 14.9% and 56.6%, respectively, in the prior quarter and 1.24%, 13.1%, and 58.4%, respectively, in the second quarter of 2018. Adjusted return on average tangible assets1 was 1.59%, adjusted return on average tangible shareholders’ equity1 was 15.2%, and the adjusted efficiency ratio1 was 51.4%, compared to 1.50%, 15.1%, and 55.8%, respectively, in the prior quarter, and 1.28%, 13.5%, and 57.3%, respectively, in the second quarter of 2018.

 

Dennis S. Hudson, III, Seacoast’s Chairman and CEO, said, “During the quarter, we achieved record earnings, resulting in a 41% year-over-year increase in adjusted net income1 and 17% year-over-year growth in tangible book value per share. We continue to build a very high quality balance sheet, fortified with a growing capital base, strong asset quality trends, and a well-managed liquidity position.”

 

Hudson added, “Highlights in the quarter included continued expansion of our business banking team in Tampa and South Florida, strong performance from our mortgage banking group, and completion of our $10 million annual expense reduction initiative, all resulting in an improvement in our adjusted efficiency ratio1, declining 4% from the prior quarter to 51.4%.”

 

Charles M. Shaffer, Seacoast’s Chief Operating Officer and Chief Financial Officer, said, “Our second quarter 2019 results demonstrate that our focus on strong financial performance, disciplined credit underwriting, and franchise expansion in robust markets continues to create value for shareholders. During the quarter, we continued to drive improved operating leverage while delivering a strictly underwritten credit portfolio that is well diversified in terms of asset mix and granularity. We have built a balance sheet that is supported by an excellent customer franchise, with an average loan to deposit ratio of 87.3%, providing ample room for expansion of loans. We ended the quarter with a tangible common equity ratio of 10.7% and healthy levels of liquidity, both of which should 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” for more information and for a reconciliation to GAAP

 

 

 

 

 

Second Quarter 2019 Financial Highlights

 

Income Statement

 

Net income was $23.3 million, or $0.45 per diluted share, compared to $22.7 million, or $0.44, for the prior quarter and $17.0 million, or $0.35, for the second quarter of 2018. For the six months ended June 30, 2019, net income was $46.0 million, or $0.88 per diluted share, compared to $35.0 million, or $0.73, for the six months ended June 30, 2018. Adjusted net income1 was $25.8 million, or $0.50 per diluted share, compared to $24.2 million, or $0.47, for the prior quarter and $18.3 million, or $0.38, for the second quarter of 2018. For the six months ended June 30, 2019, adjusted net income1 was $50.0 million, or $0.96 per diluted share, compared to $37.6 million, or $0.79, for the six months ended June 30, 2018.
Net revenues were $73.7 million, an increase of $0.1 million, compared to the prior quarter, and an increase of $10.8 million, or 17%, compared to the second quarter of 2018. For the six months ended June 30, 2019, net revenues were $147.3 million, an increase of $22.3 million, or 18%, compared to the six months ended June 30, 2018. Adjusted revenues1 were $74.2 million, an increase of $0.6 million, or 1%, from the prior quarter and an increase of $11.2 million, or 18%, from the second quarter of 2018. For the six months ended June 30, 2019, adjusted revenues1 were $147.8 million, an increase of $22.7 million, or 18%, compared to the six months ended June 30, 2018.
Net interest income totaled $60.1 million, a decrease of $0.6 million, or 1%, from the prior quarter and an increase of $9.9 million, or 20%, from the second quarter of 2018. For the six months ended June 30, 2019, net interest income was $120.9 million, an increase of $20.9 million, or 21%, compared to the six months ended June 30, 2018.
Net interest margin was 3.94% in the second quarter of 2019, 4.02% in the first quarter of 2019 and 3.77% in the second quarter of 2018. Quarter-over-quarter, the yield on loans contracted 6 basis points, the yield on securities contracted 2 basis points, and the cost of deposits increased 9 basis points. The impact on net interest margin from accretion of purchase discounts on acquired loans was 27 basis points in the second quarter of 2019, compared to 26 basis points in the prior quarter and 17 basis points in the second quarter of 2018. During the quarter, the yield curve declined across all points on the curve, affecting variable rate loans and securities, and reducing add-on rates for new loans originated. Of note, late in the quarter, deposit rate pressure began to abate.
Noninterest income totaled $13.6 million, an increase of $0.7 million, or 6%, compared to the prior quarter and an increase of $0.9 million, or 7%, from the second quarter of 2018. For the six months ended June 30, 2019, noninterest income was $26.4 million, an increase of $1.4 million, or 6%, compared to the six months ended June 30, 2018. Sequentially, noninterest income increased across nearly every category. Highlights include an increase of $0.6 million in mortgage banking fees, reflecting increasing success in generating saleable mortgage volume, a $0.2 million increase in wealth-related fees attributed to continued growth in assets under management, a $0.2 million increase in service charges on deposits, in part the result of increased revenue from treasury products, and a $0.2 million increase in other income, primarily attributed to higher swap fees. During the quarter, $38.2 million of securities were sold with an average yield of 1.85%, resulting in a loss of $0.6 million. These funds were reinvested at an average yield of 2.90%.
The provision for loan losses was $2.6 million compared to $1.4 million in the prior quarter and $2.5 million in the second quarter of 2018.

 

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

 

 

 

 

 

Noninterest expense was $41.0 million, a decrease of $2.1 million, or 5%, compared to the prior quarter and an increase of $2.8 million, or 7%, from the second quarter of 2018. For the six months ended June 30, 2019, noninterest expense was $84.1 million, an increase of $8.7 million, or 12%, compared to the six months ended June 30, 2018. Sequentially, changes from the first quarter of 2019 in noninterest expense consisted of the following:
Salaries and wages increased by $0.9 million, attributed to $1.1 million in severance costs associated with the reduction of 50 full time equivalent employees as previously announced. The full benefit of the reduction in force should be realized in the third quarter.
Employee benefits decreased $1.0 million attributed to the reduction in full time equivalent employees, lower seasonal payroll taxes and 401(k) plan contributions, and lower health insurance claims when compared to the first quarter of 2019.
Legal and professional fees decreased by $0.8 million primarily due to higher expenses incurred in the first quarter of 2019 on projects in risk management and lending operations, leading to the successful launch of our commercial digital origination platform.
Our continued focus on efficiency and streamlining operations resulted in decreases across several categories, most notably a decrease of $0.8 million in other expenses and $0.2 million in furniture and equipment.
During the quarter, we closed one banking center location, resulting in a $0.3 million one-time expense which is included in occupancy expense. We will close an additional banking center location in the third quarter.
Seacoast recorded $6.9 million in income tax expense in the second quarter of 2019, compared to $6.4 million in the prior quarter and $5.2 million in the second quarter of 2018. Tax benefits related to stock-based compensation were $0.1 million in the second quarter compared to $0.6 million in the prior quarter, during which a significant amount of previously granted awards vested. The quarter-over-quarter change unfavorably impacted earnings per share by one cent.
Year to date adjusted revenues1 increased 18% compared to prior year while adjusted noninterest expense1 increased 10%, generating 8% operating leverage.
The efficiency ratio was 53.5% compared to 56.6% in the prior quarter and 58.4% in the second quarter of 2018. The adjusted efficiency ratio1 was 51.4% compared to 55.8% in the prior quarter and 57.3% in the second quarter of 2018. The reduction in both ratios was the outcome of our continued focus on streamlining operations, in combination with driving top-line revenue improvements.

 

Balance Sheet

 

At June 30, 2019, the Company had total assets of $6.8 billion and total shareholders' equity of $930.2 million. Book value per share was $18.08 and tangible book value per share was $13.65, compared to $17.44 and $12.98, respectively, at March 31, 2019 and $15.18 and $11.67, respectively, at June 30, 2018. Year-over-year, tangible book value per share increased 17%.
Debt securities totaled $1.2 billion at June 30, 2019, an increase of $28.9 million compared to the prior quarter and a decrease of $135.1 million from June 30, 2018. During the quarter, $38.2 million of securities were sold, with an average yield of 1.85%, resulting in a loss of $0.6 million. Purchases of securities during the quarter totaled $87.4 million at an average yield of 2.90%.
Loans totaled $4.9 billion at June 30, 2019, an increase of $59.7 million, or 1.2%, compared to the prior quarter, and an increase of $914.1 million, or 23%, from June 30, 2018.

 

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

 

 

 

 

 

New loan originations of $407 million, compared to $310 million in the prior quarter, resulted in net loan growth in the quarter of 5% on an annualized basis, overcoming a $59 million increase in early loan payoffs when compared to the prior quarter. During the second quarter, we saw acceleration in commercial real estate loans being refinanced away with minimal or no covenants, limited or no guarantees, in combination with increasing leverage in projects. Additionally, we allowed a few higher risk loans to be refinanced away in categories such as marinas, hotels, and speculative construction. We remain patient and committed to our strict underwriting principles.
Consumer and small business originations for the second quarter of 2019 were a record $136.5 million, an increase of 15% compared to the first quarter of 2019 and an increase of 30% compared to the second quarter of 2018.
Commercial originations during the second quarter of 2019 were $157.0 million, an increase of 44% compared to the first quarter of 2019 and an increase of 12% compared to the second of quarter 2018.
Closed residential loans retained in the portfolio for the second quarter of 2019 were $51.8 million, up 4% from the first quarter of 2019 and down 31% from the second quarter of 2018. The decrease from prior year is consistent with the mortgage banking team's shift towards generating saleable volume and away from residential construction lending.
We continue to manage the Company's exposure to commercial real estate. Construction and land development and commercial real estate loans remain well below regulatory guidance at 51% and 205% of total bank-level risk based capital, respectively, down from 57% and 216%, respectively, in the first quarter of 2019. On a consolidated basis, inclusive of capital at the holding company, construction and land development and commercial real estate loans represent 48% and 192%, respectively, of total consolidated risk based capital.
Concentrations continue to be well managed with an average commercial loan size of approximately $350,000. The top 10 and top 20 relationships represented 19% and 34%, respectively, of total consolidated risk based capital, down from 25% and 42% compared to second quarter of 2018 and down from 29% and 48% compared to second quarter of 2016. Our largest committed exposure totals $29 million.
Pipelines (loans in underwriting and approval or approved and not yet closed) remained strong, totaling $377.6 million as of June 30, 2019.
Consumer and small business pipelines were $65.5 million, a decrease of 3% sequentially and an increase of 24% compared to the prior year.
Commercial pipelines were $261.6 million, an increase of 48% sequentially and 34% compared to the prior year.
Residential pipelines were $50.5 million, an increase of 11% sequentially and a decrease of 21% compared to the prior year, consistent with a shift in focus to generating saleable volume, which at June 30, 2019 represents 90% of the residential pipeline.
Total deposits were $5.5 billion as of June 30, 2019, a decrease of $64.4 million, or 1.1%, sequentially and an increase of $843.8 million, or 18%, from the prior year.
Total deposits grew 3% on an annualized basis quarter-over-quarter, excluding the impact of a $99 million reduction in brokered time deposits. The decrease in brokered time deposits was the result of a shift towards lower rate Federal Home Loan Bank advances in the second quarter.

 

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

 

 

 

 

 

During the second quarter, we accelerated the velocity of our commercial customer acquisition, with business checking balances growing 8% on an annualized basis overcoming seasonal pressure, the result of expansion of our business banking franchise in the Tampa and Fort Lauderdale markets.
Interest-bearing deposits (interest-bearing demand, savings and money market deposits) increased year-over-year $373.0 million, or 15%, to $2.8 billion, noninterest bearing demand deposits increased $206.2 million, or 14%, to $1.7 billion, and CDs increased $264.6 million, or 34%, to $1.1 billion.
Overall cost of deposits increased to 76 basis points. Of note, late in the quarter, deposit rate pressure began to abate.
Second quarter return on average tangible assets (ROTA) was 1.50%, compared to 1.48% in the prior quarter and 1.24% in the second quarter of 2018. Adjusted ROTA1 was 1.59% compared to 1.50% in the prior quarter and 1.28% in the second quarter of 2018.

 

Capital

 

Second quarter return on average tangible common equity (ROTCE) was 14.3%, compared to 14.9% in the prior quarter and 13.1% in the second quarter of 2018. Adjusted ROTCE1 was 15.2% compared to 15.1% in the prior quarter and 13.5% in the second quarter of 2018.
The tier 1 capital ratio was 14.6%, total capital ratio was 15.2% and the tier 1 leverage ratio was 11.7% at June 30, 2019.
Tangible common equity to tangible assets was 10.7% at June 30, 2019, compared to 10.2% at March 31, 2019 and 9.6% at June 30, 2018.

 

Asset Quality

 

Nonperforming loans to total loans outstanding was 0.47% at June 30, 2019, 0.46% at March 31, 2019, and 0.66% at June 30, 2018.
Nonperforming assets to total assets was 0.50% at June 30, 2019, 0.51% at March 31, 2019 and 0.58% at June 30, 2018. Nonperforming assets decreased by $0.5 million to $33.8 million in the second quarter of 2019.
The ratio of allowance for loan losses to total loans was 0.69% at June 30, 2019, 0.68% at March 31, 2019, and 0.73% at June 30, 2018. The ratio of allowance for loan losses to non-acquired loans was 0.87% at June 30, 2019, 0.89% at March 31, 2019, and 0.88% at June 30, 2018.
Net charge-offs were $1.8 million or 0.15% of average loans for the second quarter of 2019 compared to $1.0 million, or 0.08% of average loans in the prior quarter.

 

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

 

 

 

 

 

FINANCIAL HIGHLIGHTS   (Unaudited)  
(Amounts in thousands except per share data)                            
    Quarterly Trends  
       
    2Q'19     1Q'19     4Q'18     3Q'18     2Q'18  
Selected Balance Sheet Data:                                        
Total Assets   $ 6,824,886     $ 6,783,389     $ 6,747,659     $ 5,930,934     $ 5,922,681  
Gross Loans     4,888,139       4,828,441       4,825,214       4,059,323       3,974,016  
Total Deposits     5,541,209       5,605,578       5,177,240       4,643,510       4,697,440  
Performance Measures:                                        
                                         
Net Income   $ 23,253     $ 22,705     $ 15,962     $ 16,322     $ 16,964  
Net Interest Margin     3.94 %     4.02 %     4.00 %     3.82 %     3.77 %
Average Diluted Shares Outstanding     51,952       52,039       51,237       48,029       47,974  
Diluted Earnings Per Share (EPS)   $ 0.45     $ 0.44     $ 0.31     $ 0.34     $ 0.35  
Return on (annualized):                                        
Average Assets (ROA)     1.38 %     1.36 %     0.96 %     1.10 %     1.16 %
Average Tangible Assets (ROTA)     1.50       1.48       1.05       1.18       1.24  
Average Tangible Common Equity (ROTCE)     14.30       14.86       10.94       12.04       13.08  
Efficiency Ratio     53.48       56.55       65.76       57.04       58.41  
                                         
Adjusted Operating Measures1:                                        
Adjusted Net Income   $ 25,818     $ 24,205     $ 23,893     $ 17,626     $ 18,268  
Adjusted Diluted EPS     0.50       0.47       0.47       0.37       0.38  
Adjusted ROTA     1.59 %     1.50 %     1.49 %     1.22 %     1.28 %
Adjusted ROTCE     15.17       15.11       15.44       12.43       13.49  
Adjusted Efficiency Ratio     51.44       55.81       54.19       56.29       57.31  
Adjusted Noninterest Expenses as a                                        
Percent of Average Tangible Assets     2.34       2.55       2.46       2.48       2.57  
                                         
Other Data:                                        
Market capitalization2   $ 1,309,158     $ 1,354,759     $ 1,336,415     $ 1,380,275     $ 1,489,411  
Full-time equivalent employees     852       902       902       835       826  
Number of ATMs     81       84       87       86       87  
Full service banking offices     49       50       51       49       49  
Registered online users     104,017       102,274       99,415       94,400       92,107  
Registered mobile devices     92,281       87,844       83,151       73,300       69,038  

 

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

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

 

 

 

 

 

Vision 2020

 

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%

 

Second Quarter Operating Highlights

 

Modernizing How We Sell

 

After a successful pilot program early this year, we launched marketing efforts in the second quarter highlighting automated fulfillment for small business loan products. While currently limited to a select group of products, the platform offers digitized onboarding and should significantly reduce the cost to originate small business loans to current customers, while maintaining our strict underwriting principles.

 

Lowering Our Cost to Serve

 

We consolidated one banking center location in the second quarter of 2019 with an eight month payback period and one-time expense of $0.3 million. We have one remaining consolidation planned for the third quarter of 2019.
We’ve now achieved our Vision 2020 objective of reducing our footprint by 20% to meet the evolving needs of our customers. We were able to achieve this objective ahead of plan due to successful M&A and the repositioning of our banking center network in strategic growth markets.
At quarter end, average deposits per banking center exceeded $113 million, up from $96 million during the same period last year.
During the quarter, we completed our previously announced $10 million annual expense reduction initiative, which included reducing the full time equivalent employee count by 50, renegotiating key vendor contracts, and reducing expenses across a number of line items.

 

Driving Improvements in How Our Business Operates

 

Late last year we launched a large-scale initiative to implement a fully digital loan origination platform across all business banking units. In the second quarter, the implementation and launch were completed. This follows the successful rollout of our fully digital mortgage banking origination platform. This investment should lead to significant improvement in operational efficiency and banker productivity in 2020 and beyond.

 

Scaling and Evolving Our Culture

 

We continue to invest in business bankers. In the second quarter we on-boarded 5 new bankers, 15 year to date, in order to fully support the strong markets we serve. We have a robust pipeline of talent as we enter the third quarter of 2019 and will continue to opportunistically add top-tier bankers in the Tampa and Fort Lauderdale markets.

 

 

 

 

 

OTHER INFORMATION

 

Conference Call Information

 

Seacoast will host a conference call on July 26, 2019 at 10:00 a.m. (Eastern Time) to discuss the second quarter 2019 earnings results and business trends. Investors may call in (toll-free) by dialing (888) 517-2513 (passcode: 8644 001; host: Dennis S. Hudson). Charts will be used during the conference call and may be accessed at Seacoast's website at www.SeacoastBanking.com by selecting “Presentations” under the heading “News/Events” A replay of the call will be available for one month, beginning late afternoon of July 26, 2019 by dialing (888) 843-7419 (domestic) and using passcode: 8644 001#.

 

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection “Presentations” under the heading “Investor Services.” Beginning the afternoon of July 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 $5.5 billion in deposits as of June 30, 2019. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 49 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; uncertainty related to the impact of LIBOR calculations on securities and loans; changes in borrower credit risks and payment behaviors; changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry; our concentration in commercial real estate loans; the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of our investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire desirable financial institutions; changes in technology or products that may be more difficult, costly, or less effective than anticipated; our ability to identify and address increased cybersecurity risks; inability of our risk management framework to manage risks associated with our business; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms; reduction in or the termination of our ability to use the mobile-based platform that is critical to our business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters or other catastrophic events that may affect general economic conditions; unexpected outcomes of, and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.

 

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   Six Months Ended 
         
(Amounts in thousands, except ratios and per share data)  2Q'19   1Q'19   4Q'18   3Q'18   2Q'18   2Q'19   2Q'18 
                             
Summary of Earnings                                   
Net income  $23,253   $22,705   $15,962   $16,322   $16,964    45,958    34,991 
Adjusted net income1   25,818    24,205    23,893    17,626    18,268    50,023    37,566 
Net interest income2   60,219    60,861    60,100    51,709    50,294    121,080    100,147 
Net interest margin2,3   3.94%   4.02%   4.00%   3.82%   3.77%   3.98%   3.78%
                                    
Performance Ratios                                   
Return on average assets-GAAP basis3   1.38%   1.36%   0.96%   1.10%   1.16%   1.37%   1.20%
Return on average tangible assets-GAAP basis3,4   1.50    1.48    1.05    1.18    1.24    1.49    1.29 
Adjusted return on average tangible assets1,3,4   1.59    1.50    1.49    1.22    1.28    1.55    1.33 
                                    
Return on average shareholders' equity-GAAP basis3   10.23    10.47    7.65    8.89    9.59    10.35    10.04 
Return on average tangible common equity-GAAP basis3,4   14.30    14.86    10.94    12.04    13.08    14.57    13.73 
Adjusted return on average tangible common equity1,3,4   15.17    15.11    15.44    12.43    13.49    15.14    14.14 
Efficiency ratio5   53.48    56.55    65.76    57.04    58.41    55.01    58.11 
Adjusted efficiency ratio1   51.44    55.81    54.19    56.29    57.31    53.62    57.18 
Noninterest income to total revenue (excluding securities losses)   18.93    17.45    17.97    19.31    20.28    18.19    20.11 
Tangible common equity to tangible assets4   10.65    10.18    9.72    9.85    9.56    10.65    9.56 
Average loan-to-deposit ratio   87.27    90.55    89.14    86.25    83.51    88.87    83.80 
End of period loan-to-deposit ratio   88.53    86.38    93.43    87.77    84.91    88.53    84.91 
                                    
Per Share Data                                   
Net income diluted-GAAP basis  $0.45   $0.44   $0.31   $0.34   $0.35   $0.88   $0.73 
Net income basic-GAAP basis   0.45    0.44    0.32    0.35    0.36    0.89    0.74 
Adjusted earnings1   0.50    0.47    0.47    0.37    0.38    0.96    0.79 
                                    
Book value per share common   18.08    17.44    16.83    15.50    15.18    18.08    15.18 
Tangible book value per share   13.65    12.98    12.33    12.01    11.67    13.65    11.67 
Cash dividends declared                            
                                    

 

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

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

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

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

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

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME   (Unaudited)             
 SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                      
                      
   Quarterly Trends   Six Months Ended 
                             
(Amounts in thousands, except per share data)  2Q'19   1Q'19   4Q'18   3Q'18   2Q'18   2Q'19   2Q'18 
                             
Interest on securities:                                   
Taxable  $8,933   $9,119   $9,528   $9,582   $9,389   $18,052   $18,750 
Nontaxable   143    151    200    225    216    294    459 
Interest and fees on loans   62,288    62,287    59,495    48,713    46,519    124,575    91,776 
Interest on federal funds sold and other investments   873    918    835    634    585    1,791    1,201 
Total Interest Income   72,237    72,475    70,058    59,154    56,709    144,712    112,186 
                                    
Interest on deposits   4,825    3,873    3,140    2,097    1,988    8,698    3,526 
Interest on time certificates   5,724    4,959    3,901    2,975    2,629    10,683    4,808 
Interest on borrowed money   1,552    2,869    3,033    2,520    1,885    4,421    3,883 
Total Interest Expense   12,101    11,701    10,074    7,592    6,502    23,802    12,217 
                                    
Net Interest Income   60,136    60,774    59,984    51,562    50,207    120,910    99,969 
Provision for loan losses   2,551    1,397    2,342    5,774    2,529    3,948    3,614 
Net Interest Income After Provision for Loan Losses   57,585    59,377    57,642    45,788    47,678    116,962    96,355 
                                    
Noninterest income:                                   
Service charges on deposit accounts   2,894    2,697    3,019    2,833    2,674    5,591    5,346 
Trust fees   1,147    1,017    1,040    1,083    1,039    2,164    2,060 
Mortgage banking fees   1,734    1,115    809    1,135    1,336    2,849    2,738 
Brokerage commissions and fees   541    436    468    444    461    977    820 
Marine finance fees   201    362    185    194    446    563    1,019 
Interchange income   3,405    3,401    3,198    3,119    3,076    6,806    6,018 
BOLI income   927    915    1,091    1,078    1,066    1,842    2,122 
SBA gains   691    636    519    473    748    1,327    1,482 
Other   2,503    2,266    2,810    1,980    1,923    4,769    3,562 
    14,043    12,845    13,139    12,339    12,769    26,888    25,167 
Securities losses, net   (466)   (9)   (425)   (48)   (48)   (475)   (150)
Total Noninterest Income   13,577    12,836    12,714    12,291    12,721    26,413    25,017 
                                    
                                    
Noninterest expenses:                                   
Salaries and wages   19,420    18,506    22,172    17,129    16,429    37,926    31,810 
Employee benefits   3,195    4,206    3,625    3,205    3,034    7,401    6,115 
Outsourced data processing costs   3,876    3,845    5,809    3,493    3,393    7,721    7,072 
Telephone / data lines   893    811    602    624    643    1,704    1,255 
Occupancy   3,741    3,807    3,747    3,214    3,316    7,548    6,433 
Furniture and equipment   1,544    1,757    2,452    1,367    1,468    3,301    2,925 
Marketing   1,211    1,132    1,350    1,139    1,344    2,343    2,596 
Legal and professional fees   2,033    2,847    3,668    2,019    2,301    4,880    4,274 
FDIC assessments   337    488    571    431    595    825    1,193 
Amortization of intangibles   1,456    1,458    1,303    1,004    1,004    2,914    1,993 
Foreclosed property expense and net (gain)/loss on sale   (174)   (40)       (136)   405    (214)   597 
Other   3,468    4,282    4,165    3,910    4,314    7,750    9,147 
Total Noninterest Expense   41,000    43,099    49,464    37,399    38,246    84,099    75,410 
                                    
Income Before Income Taxes   30,162    29,114    20,892    20,680    22,153    59,276    45,962 
Income taxes   6,909    6,409    4,930    4,358    5,189    13,318    10,971 
                                    
Net Income  $23,253   $22,705   $15,962   $16,322   $16,964   $45,958   $34,991 
                                    
Per share of common stock:                                   
                                    
Net income diluted  $0.45   $0.44   $0.31   $0.34   $0.35   $0.88   $0.73 
Net income basic   0.45    0.44    0.32    0.35    0.36    0.89    0.74 
Cash dividends declared                            
                                    
Average diluted shares outstanding   51,952    52,039    51,237    48,029    47,974    51,998    47,828 
Average basic shares outstanding   51,446    51,359    50,523    47,205    47,165    51,403    47,059 
                                    

  

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS   (Unaudited)     
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES             
                     
   June 30,   March 31,   December 31,   September 30,   June 30, 
(Amounts in thousands)  2019   2019   2018   2018   2018 
                     
Assets                         
Cash and due from banks  $97,792   $98,270   $92,242   $101,920   $123,927 
Interest bearing deposits with other banks   61,987    105,741    23,709    3,174    7,594 
Total Cash and Cash Equivalents   159,779    204,011    115,951    105,094    131,521 
                          
Time deposits with other banks   4,980    8,174    8,243    9,813    10,562 
                          
Debt Securities:                         
Available for sale (at fair value)   914,615    877,549    865,831    923,206    954,906 
Held to maturity (at amortized cost)   287,302    295,485    357,949    367,387    382,137 
Total Debt Securities   1,201,917    1,173,034    1,223,780    1,290,593    1,337,043 
                          
Loans held for sale   17,513    13,900    11,873    16,172    14,707 
                          
Loans   4,888,139    4,828,441    4,825,214    4,059,323    3,974,016 
Less: Allowance for loan losses   (33,505)   (32,822)   (32,423)   (33,865)   (28,924)
Net Loans   4,854,634    4,795,619    4,792,791    4,025,458    3,945,092 
                          
Bank premises and equipment, net   68,738    70,412    71,024    63,531    63,991 
Other real estate owned   11,043    11,921    12,802    4,715    8,417 
Goodwill   205,260    205,260    204,753    148,555    148,555 
Other intangible assets, net   22,672    23,959    25,977    16,508    17,319 
Bank owned life insurance   125,233    124,306    123,394    122,561    121,602 
Net deferred tax assets   19,353    24,647    28,954    25,822    26,021 
Other assets   133,764    128,146    128,117    102,112    97,851 
Total Assets  $6,824,886   $6,783,389   $6,747,659   $5,930,934   $5,922,681 
                          
Liabilities and Shareholders' Equity                         
Liabilities                         
Deposits                         
Noninterest demand  $1,669,804   $1,676,009   $1,569,602   $1,488,689   $1,463,652 
Interest-bearing demand   1,124,519    1,100,477    1,014,032    912,891    976,281 
Savings   519,732    508,320    493,807    451,958    444,736 
Money market   1,172,971    1,192,070    1,173,950    1,036,940    1,023,170 
Other time certificates   553,107    539,202    513,312    411,208    413,643 
Brokered time certificates   268,998    367,841    220,594    192,182    228,602 
Time certificates of more than $250,000   232,078    221,659    191,943    149,642    147,356 
Total Deposits   5,541,209    5,605,578    5,177,240    4,643,510    4,697,440 
                          
Securities sold under agreements to repurchase   82,015    148,005    214,323    189,035    200,050 
Federal Home Loan Bank borrowings   140,000    3,000    380,000    261,000    205,000 
Subordinated debt   70,944    70,874    70,804    70,734    70,664 
Other liabilities   60,479    59,508    41,025    33,824    33,364 
Total Liabilities   5,894,647    5,886,965    5,883,392    5,198,103    5,206,518 
                          
Shareholders' Equity                         
Common stock   5,146    5,141    5,136    4,727    4,716 
Additional paid in capital   782,928    780,680    778,501    668,711    665,885 
Retained earnings   143,032    119,779    97,074    81,112    64,790 
Treasury stock   (6,137)   (4,959)   (3,384)   (2,854)   (2,884)
    924,969    900,641    877,327    751,696    732,507 
Accumulated other comprehensive income/(loss), net   5,270    (4,217)   (13,060)   (18,865)   (16,344)
Total Shareholders' Equity   930,239    896,424    864,267    732,831    716,163 
Total Liabilities & Shareholders' Equity  $6,824,886   $6,783,389   $6,747,659   $5,930,934   $5,922,681 
                          
Common shares outstanding   51,461    51,414    51,361    47,270    47,163 
                          

 

 

 

  

CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) 
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES              
                     
(Amounts in thousands)  2Q'19   1Q'19   4Q'18   3Q'18   2Q'18 
                     
Credit Analysis                         
Net charge-offs (recoveries) - non-acquired loans  $1,621   $762   $3,693   $800   $1,715 
Net charge-offs (recoveries) - acquired loans   220    201    56    (3)   (25)
Total Net Charge-offs (Recoveries)   1,841    963    3,749    797    1,690 
                          
TDR valuation adjustments  $27   $35   $35   $36   $33 
                          
Net charge-offs (recoveries) to average loans - non-acquired loans   0.13%   0.06%   0.32%   0.08%   0.17%
Net charge-offs (recoveries) to average loans - acquired loans   0.02    0.02             
Total Net Charge-offs (Recoveries) to Average Loans   0.15    0.08    0.32    0.08    0.17 
                          
Provision for loan losses - non-acquired loans  $2,326   $1,709   $2,343   $5,640   $2,591 
Provision for (recapture of) loan losses - acquired loans   225    (312)   (1)   134    (62)
Total Provision for Loan Losses  $2,551   $1,397   $2,342   $5,774   $2,529 
                          
Allowance for loan losses - non-acquired loans  $33,393   $32,715   $31,803   $33,188   $28,384 
Allowance for loan losses - acquired loans   112    107    620    677    540 
Total Allowance for Loan Losses  $33,505   $32,822   $32,423   $33,865   $28,924 
                          
Non-acquired loans at end of period  $3,817,358   $3,667,221   $3,588,251   $3,383,571   $3,221,569 
Purchased noncredit impaired loans at end of period   1,057,200    1,147,432    1,222,529    662,701    739,232 
Purchased credit impaired loans at end of period   13,581    13,788    14,434    13,051    13,215 
Total Loans  $4,888,139   $4,828,441   $4,825,214   $4,059,323   $3,974,016 
                          
Non-acquired loans allowance for loan losses to non-acquired loans at end of period   0.87%   0.89%   0.89%   0.98%   0.88%
Total allowance for loan losses to total loans at end of period   0.69    0.68    0.67    0.83    0.73 
Purchase discount on acquired loans at end of period   3.76    3.80    3.86    2.25    2.31 
                          
End of Period                         
Nonperforming loans - non-acquired  $15,810   $15,423   $15,783   $18,998   $19,578 
Nonperforming loans - acquired   6,986    6,990    10,693    7,142    6,624 
Other real estate owned - non-acquired   66    831    386    418    354 
Other real estate owned - acquired   1,612    1,725    3,020    1,203    4,969 
Bank branches closed included in other real estate owned   9,365    9,365    9,396    3,094    3,094 
Total Nonperforming Assets  $33,839   $34,334   $39,278   $30,855   $34,619 
                          
Restructured loans (accruing)  $14,534   $14,857   $13,346   $13,797   $14,241 
                          
Nonperforming loans to loans at end of period - non-acquired   0.41%   0.42%   0.44%   0.56%   0.61%
Nonperforming loans to loans at end of period - acquired   0.65    0.60    0.86    1.06    0.88 
Total Nonperforming Loans to Loans at End of Period   0.47    0.46    0.55    0.64    0.66 
                          
Nonperforming assets to total assets - non-acquired   0.37%   0.38%   0.38%   0.38%   0.39%
Nonperforming assets to total assets - acquired   0.13    0.13    0.20    0.14    0.19 
Total Nonperforming Assets to Total Assets   0.50    0.51    0.58    0.52    0.58 
                          
   June 30,   March 31,   December 31,   September 30,   June 30, 
Loans  2019   2019   2018   2018   2018 
                     
Construction and land development  $379,991   $417,565   $443,568   $376,257   $359,070 
Commercial real estate - owner occupied   1,005,876    989,234    970,181    829,368    812,306 
Commercial real estate - non-owner occupied   1,184,409    1,173,183    1,161,885    897,331    888,989 
Residential real estate   1,400,184    1,329,166    1,324,377    1,152,640    1,103,946 
Consumer   215,932    206,414    202,881    192,772    190,835 
Commercial and financial   701,747    712,879    722,322    610,955    618,870 
Total Loans  $4,888,139   $4,828,441   $4,825,214   $4,059,323   $3,974,016 
                          

 

 

 

 

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

 

   2Q'19   1Q'19   2Q'18 
   Average       Yield/   Average       Yield/   Average       Yield/ 
(Amounts in thousands)  Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate 
                                     
Assets                                             
Earning assets:                                             
Securities:                                             
Taxable  $1,169,891   $8,933    3.05%  $1,186,374   $9,119    3.07%  $1,324,280   $9,389    2.84%
Nontaxable   24,110    179    2.96    26,561    190    2.86    32,055    273    3.41 
Total Securities   1,194,001    9,112    3.05    1,212,935    9,309    3.07    1,356,335    9,662    2.85 
                                              
Federal funds sold and other investments   91,481    873    3.83    91,136    918    4.09    49,387    585    4.75 
                                              
Loans, net   4,841,751    62,335    5.16    4,839,046    62,335    5.22    3,948,460    46,549    4.73 
                                              
Total Earning Assets   6,127,233    72,320    4.73    6,143,117    72,562    4.79    5,354,182    56,796    4.25 
                                              
Allowance for loan losses   (32,806)             (32,966)             (29,234)          
Cash and due from banks   91,160              99,940              110,549           
Premises and equipment   69,890              70,938              64,445           
Intangible assets   228,706              230,066              166,393           
Bank owned life insurance   124,631              123,708              121,008           
Other assets   126,180              136,175              90,692           
                                              
Total Assets  $6,734,994             $6,770,978             $5,878,035           
                                              
Liabilities and Shareholders' Equity                                             
Interest-bearing liabilities:                                             
Interest-bearing demand  $1,118,703   $1,150    0.41%  $1,029,726   $839    0.33%  $996,929   $492    0.20%
Savings   513,773    586    0.46    500,347    477    0.39    439,691    118    0.11 
Money market   1,179,345    3,089    1.05    1,158,939    2,557    0.89    1,027,705    1,378    0.54 
Time deposits   1,089,020    5,724    2.11    1,042,346    4,959    1.93    790,404    2,629    1.33 
Federal funds purchased and securities sold under agreements to repurchase   91,614    355    1.55    185,032    550    1.21    179,540    334    0.75 
Federal Home Loan Bank borrowings   51,571    329    2.56    227,378    1,421    2.53    160,846    741    1.85 
Other borrowings   70,903    868    4.91    70,836    898    5.14    70,623    810    4.60 
                                              
Total Interest-Bearing Liabilities   4,114,929    12,101    1.18    4,214,604    11,701    1.13    3,665,738    6,502    0.71 
                                              
Noninterest demand   1,646,934              1,612,548              1,473,331           
Other liabilities   61,652              64,262              29,292           
Total Liabilities   5,823,515              5,891,414              5,168,361           
                                              
Shareholders' equity   911,479              879,564              709,674           
                                              
Total Liabilities & Equity  $6,734,994             $6,770,978             $5,878,035           
                                              
Cost of deposits             0.76%             0.67%             0.39%
Interest expense as a % of earning assets             0.79%             0.77%             0.49%
Net interest income as a % of earning assets       $60,219    3.94%       $60,861    4.02%       $50,294    3.77%

 

 

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

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

 

 

 

 

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

 

   Six Months Ended June 30, 2019   Six Months Ended June 30, 2018 
   Average       Yield/   Average       Yield/ 
(Amounts in thousands, except ratios)  Balance   Interest   Rate   Balance   Interest   Rate 
                         
Assets                              
Earning assets:                              
Securities:                              
Taxable  $1,178,087   $18,052    3.06%  $1,342,676   $18,750    2.79%
Nontaxable   25,329    368    2.91    32,346    580    3.59 
Total Securities   1,203,416    18,420    3.06    1,375,022    19,330    2.81 
                               
Federal funds sold and other investments   91,310    1,791    3.96    52,761    1,201    4.59 
                               
Loans, net   4,840,406    124,671    5.19    3,910,625    91,833    4.74 
                               
Total Earning Assets   6,135,132    144,882    4.76    5,338,408    112,364    4.24 
                               
Allowance for loan losses   (32,885)             (28,356)          
Cash and due from banks   95,526              112,215           
Premises and equipment   70,411              65,184           
Intangible assets   229,382              166,762           
Bank owned life insurance   124,172              121,635           
Other assets   131,148              89,086           
                               
Total Assets  $6,752,886             $5,864,934           
                               
Liabilities and Shareholders' Equity                              
Interest-bearing liabilities:                              
Interest-bearing demand  $1,074,460   $1,989    0.37%  $999,287   $942    0.19%
Savings   507,097    1,062    0.42    437,574    222    0.10 
Money market   1,169,198    5,647    0.97    1,002,243    2,362    0.48 
Time deposits   1,065,812    10,683    2.02    783,643    4,808    1.24 
Federal funds purchased and securities sold under agreements to repurchase   138,065    905    1.32    177,771    608    0.69 
Federal Home Loan Bank borrowings   138,989    1,750    2.54    218,298    1,771    1.64 
Other borrowings   70,870    1,766    5.03    70,587    1,504    4.30 
                               
Total Interest-Bearing Liabilities   4,164,491    23,802    1.15    3,689,403    12,217    0.67 
                               
Noninterest demand   1,629,836              1,443,813           
Other liabilities   62,949              29,221           
Total Liabilities   5,857,276              5,162,437           
                               
Shareholders' equity   895,610              702,497           
                               
Total Liabilities & Equity  $6,752,886             $5,864,934           
                               
Cost of deposits             0.72%             0.36%
Interest expense as a % of earning assets             0.78%             0.46%
Net interest income as a % of earning assets       $121,080    3.98%       $100,147    3.78%

 

 

 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  

 

   June 30,   March 31,   December 31,   September 30,   June 30, 
(Amounts in thousands)  2019   2019   2018   2018   2018 
                     
Customer Relationship Funding                         
Noninterest demand                         
Commercial  $1,323,743   $1,298,468   $1,217,842   $1,182,018   $1,154,225 
Retail   251,879    275,383    259,318    233,472    236,838 
Public funds   65,822    73,640    68,324    42,474    44,182 
Other   28,360    28,518    24,118    30,725    28,407 
Total Noninterest Demand   1,669,804    1,676,009    1,569,602    1,488,689    1,463,652 
                          
Interest-bearing demand                         
Commercial   323,818    289,544    211,879    167,865    181,646 
Retail   634,099    646,522    650,490    655,429    681,615 
Public funds   166,602    164,411    151,663    89,597    113,020 
Total Interest-Bearing Demand   1,124,519    1,100,477    1,014,032    912,891    976,281 
                          
Total transaction accounts                         
Commercial   1,647,561    1,588,012    1,429,721    1,349,883    1,335,871 
Retail   885,978    921,905    909,808    888,901    918,453 
Public funds   232,424    238,051    219,987    132,071    157,202 
Other   28,360    28,518    24,118    30,725    28,407 
Total Transaction Accounts   2,794,323    2,776,486    2,583,634    2,401,580    2,439,933 
                          
Savings   519,732    508,320    493,807    451,958    444,736 
                          
Money market                         
Commercial   517,041    500,649    459,380    423,304    408,005 
Retail   590,320    602,378    607,837    524,415    522,783 
Public funds   65,610    89,043    106,733    89,221    92,382 
Total Money Market   1,172,971    1,192,070    1,173,950    1,036,940    1,023,170 
                          
Brokered time certificates   268,998    367,841    220,594    192,182    228,602 
Other time certificates   785,185    760,861    705,255    560,850    560,999 
    1,054,183    1,128,702    925,849    753,032    789,601 
Total Deposits  $5,541,209   $5,605,578   $5,177,240   $4,643,510   $4,697,440 
                          
Customer sweep accounts  $82,015   $148,005   $214,323   $189,035   $200,050 

 

 

 

 

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 define or 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   Six  Months Ended 
                             
(Amounts in thousands, except per share data)  2Q'19   1Q'19   4Q'18   3Q'18   2Q'18   2Q'19   2Q'18 
                             
Net Income  $23,253   $22,705   $15,962   $16,322   $16,964   $45,958   $34,991 
                                    
Total noninterest income   13,577    12,836    12,714    12,291    12,721    26,413    25,017 
Securities losses, net   466    9    425    48    48    475    150 
BOLI benefits on death (included in other income)           (280)                
Total Adjustments to Noninterest Income   466    9    145    48    48    475    150 
Total Adjusted Noninterest Income   14,043    12,845    12,859    12,339    12,769    26,888    25,167 
                                    
Total noninterest expense   41,000    43,099    49,464    37,399    38,246    84,099    75,410 
Merger related charges       (335)   (8,034)   (482)   (695)   (335)   (1,165)
Amortization of intangibles   (1,456)   (1,458)   (1,303)   (1,004)   (1,004)   (2,914)   (1,993)
Branch reductions and other expense initiatives   (1,517)   (208)   (587)           (1,725)    
Total Adjustments to Noninterest Expense   (2,973)   (2,001)   (9,924)   (1,486)   (1,699)   (4,974)   (3,158)
Total Adjusted Noninterest Expense   38,027    41,098    39,540    35,913    36,547    79,125    72,252 
                                    
Income Taxes   6,909    6,409    4,930    4,358    5,189    13,318    10,971 
Tax effect of adjustments   874    510    2,623    230    443    1,384    981 
Taxes and tax penalties on acquisition-related BOLI redemption           (485)                
Effect of change in corporate tax rate                           (248)
Total Adjustments to Income Taxes   874    510    2,138    230    443    1,384    733 
Adjusted Income Taxes   7,783    6,919    7,068    4,588    5,632    14,702    11,704 
Adjusted Net Income  $25,818   $24,205   $23,893   $17,626   $18,268   $50,023   $37,566 
                                    
Earnings per diluted share, as reported  $0.45   $0.44   $0.31   $0.34   $0.35   $0.88   $0.73 
Adjusted Earnings per Diluted Share   0.50    0.47    0.47    0.37    0.38    0.96    0.79 
Average diluted shares outstanding   51,952    52,039    51,237    48,029    47,974    51,998    47,828 
                                    
Adjusted Noninterest Expense  $38,027   $41,098   $39,540   $35,913   $36,547   $79,125   $72,252 
Foreclosed property expense and net gain/(loss) on sale   174    40        137    (405)   214    (597)
Net Adjusted Noninterest Expense  $38,201   $41,138   $39,540   $36,050   $36,142   $79,339   $71,655 
                                    
Revenue  $73,713   $73,610   $72,698   $63,853   $62,928   $147,323   $124,986 
Total Adjustments to Revenue   466    9    145    48    48    475    150 
Impact of FTE adjustment   83    87    116    147    87    170    178 
Adjusted Revenue on a fully taxable equivalent basis  $74,262   $73,706   $72,959   $64,048   $63,063   $147,968   $125,314 
Adjusted Efficiency Ratio   51.44%   55.81%   54.19%   56.29%   57.31%   53.62%   57.18%
                                    
Average Assets  $6,734,994   $6,770,978   $6,589,870   $5,903,327   $5,878,035   $6,752,886   $5,864,934 
Less average goodwill and intangible assets   (228,706)   (230,066)   (213,713)   (165,534)   (166,393)   (229,382)   (166,762)
Average Tangible Assets  $6,506,288   $6,540,912   $6,376,157   $5,737,793   $5,711,642   $6,523,504   $5,698,172 
                                    
Return on Average Assets (ROA)   1.38%   1.36%   0.96%   1.10%   1.16%   1.37%   1.20%
Impact of removing average intangible assets and related amortization   0.12    0.12    0.09    0.08    0.08    0.12    0.09 
Return on Average Tangible Assets (ROTA)   1.50    1.48    1.05    1.18    1.24    1.49    1.29 
Impact of other adjustments for Adjusted Net Income   0.09    0.02    0.44    0.04    0.04    0.06    0.04 
Adjusted Return on Average Tangible Assets   1.59    1.50    1.49    1.22    1.28    1.55    1.33 
                                    
Average Shareholders' Equity  $911,479   $879,564   $827,759   $728,290   $709,674   $895,610   $702,497 
Less average goodwill and intangible assets   (228,706)   (230,066)   (213,713)   (165,534)   (166,393)   (229,382)   (166,762)
Average Tangible Equity  $682,773   $649,498   $614,046   $562,756   $543,281   $666,228   $535,735 
                                    
Return on Average Shareholders' Equity   10.23%   10.47%   7.65%   8.89%   9.59%   10.35%   10.04%
Impact of removing average intangible assets and related amortization   4.07    4.39    3.29    3.15    3.49    4.22    3.69 
Return on Average Tangible Common Equity (ROTCE)   14.30    14.86    10.94    12.04    13.08    14.57    13.73 
Impact of other adjustments for Adjusted Net Income   0.87    0.25    4.50    0.39    0.41    0.57    0.41 
Adjusted Return on Average Tangible Common Equity   15.17    15.11    15.44    12.43    13.49    15.14    14.14 
                                    
Loan interest income excluding accretion on acquired loans  $58,169   $58,397   $55,470   $46,349   $44,341   $116,568   $87,817 
Accretion on acquired loans   4,166    3,938    4,089    2,453    2,208    8,103    4,016 
Loan interest income  $62,335   $62,335   $59,559   $48,802   $46,549   $124,671   $91,833 

 

 

 

 

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

 

   Quarterly Trends   Six  Months Ended 
                             
(Amounts in thousands, except per share data)  2Q'19   1Q'19   4Q'18   3Q'18   2Q'18   2Q'19   2Q'18 
                             
Yield on loans excluding accretion on acquired loans   4.82%   4.89%   4.77%   4.59%   4.50%   4.86%   4.53%
Impact of accretion on acquired loans   0.34    0.33    0.35    0.24    0.23    0.33    0.21 
Yield on loans   5.16    5.22    5.12    4.83    4.73    5.19    4.74 
                                    
Net interest income excluding accretion on acquired loans  $56,053   $56,923   $56,011   $49,256   $48,086   $116,962