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Press Release

Seacoast Q2 Net Income Rises More Than 200% Year-over-Year to $5.8 Million, or $0.18 per Share

Favorable Results Reflect Continued Revenue Growth from Accelerate Commercial Banking and Expanded Customer Acquisition, Cross-Selling and Efficiency Initiatives

Company Release - 7/23/2015 4:23 PM ET

STUART, Fla., July 23, 2015 /PRNewswire/ --

Second Quarter 2015 Earnings Highlights

  • Revenues increased $1.5 million, or 4.5%, linked quarter to $34.5 million, and $11.9 million, or 53%, compared to Q2 2014,
  • Fee income increased $1.5 million, or 21%, sequentially and $3.0 million, or 50%, year-over-year,
  • Net interest margin increased 40 basis points year-over-year to 3.50%, reflecting improved balance sheet mix particularly due to increased lending,
  • Adjusted net income excluding merger costs and other adjustments1 increased 106% to $6.2 million, or $ 0.19 per diluted share, compared to $3.0 million, or $0.12 per diluted share, in Q2 2014.

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

Second Quarter 2015 Growth Highlights

  • Loans increased $83 million or 18% annualized compared to Q1 2015, and rose 45% year-over-year.  Excluding the acquisition of The BANKshares, loans increased $238 million or 18% compared to Q2 2014,
  • Total households increased a strong 5%, annualized from Q1 and 20% compared to Q2 2014.  Excluding BANKshares customers, year-over-year household growth was 5.3%,
  • Achieved record levels of business and consumer lending during the quarter, reflecting success in Accelerate Commercial Banking, as well as digitally-enabled marketing and cross-selling initiatives,
  • Closed the Grand Bancshares, Inc. acquisition and completed the conversion of Grand's customers over the July 17 weekend, adding approximately $190 million in deposits and $121 million in gross loans in the attractive Palm Beach market.

Seacoast Banking Corporation of Florida (NASDAQ: SBCF) today reported results for the second quarter of 2015.  Second quarter revenue rose $1.5 million, or 4.5%, to $34.5 million compared to $33.0 million in the prior quarter.  Net income increased $3.9 million, or 203%, to $5.8 million, compared to the second quarter of 2014, and decreased slightly from $5.9 million in the first quarter 2015. The company reported $0.18 diluted net income per common share compared with $0.07 in the second quarter last year, and $0.18 sequentially in the first quarter of 2015.

Seacoast Banking Corporation of Florida

Net income improved 177% to $11.7 million, or $0.35 per diluted common share, for the first half of 2015 from $4.2 million, or $0.16 per diluted common share, for the first half of 2014.

"Our strategic focus on improving profitability, investing for growth and managing risk continues to yield consistent results, as demonstrated by our second quarter performance," said Dennis S. Hudson, III, Chairman and CEO.  "Investments to expand our Accelerate business banking platform, combined with increased digital marketing and cross sell efforts company-wide, are yielding strong results that demonstrate our value proposition and community bank approach are resonating in the marketplace."

"With our success comes additional expense, reflecting our growth and investment for the future," Hudson continued.  "These expenses include the addition of a receivables funding team from First Growth Capital (FGC), volume-related commissions, brand-based marketing in our Orlando markets and key senior management hires."

"We look forward to sustained growth as we leverage our recent acquisitions, most recently welcoming the customers and customer-serving associates from Grand Bancshares, Inc., which we successfully closed and integrated last week," Hudson concluded.

"Revenue increases drove the improvement in Seacoast's profitability and reflect significant organic growth, as well as benefits from acquisition activity," said Stephen A. Fowle, Executive Vice President and Chief Financial Officer.  "We continue to produce positive trends in loan production, fee income, and household growth, including record loan originations and record new household growth through the first half of the year.  During the quarter, we achieved outsized loan growth and strong fee income increases despite a seasonally slow quarter. Net interest income, taking into consideration an expected decrease in acquired loan accretion, also showed significant continued momentum."

FINANCIAL HIGHLIGHTS

(Dollars in thousands except per share data)


2Q15

1Q15

4Q14

3Q14

2Q14








Total Assets


$3,233,588

$3,231,956

$3,093,335

$2,361,813

$2,294,156








Loans


1,937,399

1,854,487

1,821,885

1,391,082

1,335,192








Deposits


2,605,177

2,609,825

2,416,534

1,808,550

1,805,537








Net Income (Loss) Available to Common  Shareholders


5,805

5,859

(1,517)

2,996

1,918








Diluted Earnings Per Share   


0.18

0.18

(0.05)

0.12

0.07








Return on Average Assets


0.72 %

0.75 %

(0.20 %)

0.52 %

0.33 %








Net Interest Margin


3.50

3.62

3.56

3.17

3.10

Efficiency Ratio


68.6

68.3

104.5

82.8

89.4








Pretax, Pre-provision Income (1)


$10,224

$9,832

($2,029)

$3,832

$1,938

 

Average Diluted Shares

     Outstanding (000)


33,234

33,136

33,124

26,026

25,998

Adjusted Net Income (1)


$6,172

$6,177

$4,179

$3,286

$2,990

Adjusted Diluted Earnings  

     Per Share (1)


0.19

0.19

0.13

0.13

0.12








Adjusted Return on Average Assets (1)


0.77 %

0.79 %

0.55 %

0.57 %

0.52 %








Adjusted Efficiency Ratio (1)


67.5

67.5

74.8

79.6

82.0

Adjusted Pretax, Pre-provision Income (1)


$10,815

$10,342

$7,464

$4,341

$3,821








Annualized Adjusted Core

     Operating Expenses as  

     a Percent of Average

     Assets (1)


2.91%

2.88%

3.13%

3.21%

3.24%
















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

 

Acquisitions Update
"Our 2014 acquisition of The BANKshares, continues to be a home run, opening the vibrant greater Orlando markets to us," said Hudson.  "Orlando remains one of the strongest markets in Florida, and we remain bullish on this area for growth and profitability."

"We are also excited to welcome the customers and customer-service team members from Grand Bancshares, Inc., which we successfully closed and integrated into our platform just last week," Hudson continued. "Our acquisition strategy is complementing our legacy banking business and is successfully adding new customers and opening new markets, fueling robust franchise growth."

Florida Economic Update
"Our Florida markets, spanning much of the central Atlantic coastline and the greater Orlando markets, are growing at very healthy rates," said Hudson.  According to the June 2015 American Banker Magazine, "Florida is once again outgrowing the rest of the country, and some of its thriving community banks are emerging as real contenders to be the next state flagship." 

"Nonfarm employment rose on a year-over-year basis in 23 of Florida's 24 metropolitan areas and was unchanged in one area, Homosassa Springs.  The largest gains continue to be in the Orlando (47,200 new jobs), Tampa-St Petersburg (32,900 jobs) and Miami (27,900 jobs) metropolitan areas.  Fort Lauderdale (27,300 jobs), West Palm Beach (15,900 jobs) and Jacksonville (15,100 jobs) round out Florida's big 6 metro areas," according to the U.S. Department of Labor and Wells Fargo Securities, LLC.

"Our move into Orlando is going very well, and is providing excellent opportunities for growth," Hudson continued.  According to the Orlando Business Journal, "It was another record quarter for Florida tourism numbers, as the Sunshine State welcomed 28.4 million visitors in the first quarter, an increase of 6.2% over the same period a year ago.  (May 15, 2015)   "Visit Orlando reports that more than 62 million people visited Orlando in 2014, marking an all-time new record for the U.S. travel industry." (April 9, 2015) As an additional indication of the Orlando market growth, Orlando Realtors.org reported, "A leap in "normal" transactions has boosted Orlando area home sales more than 21% over June 2014 and to its highest number --3,435-- since the Orlando Regional REALTOR® Association began recording sales. In addition to skyrocketing sales, the median price for existing homes sold in June increased 7.73%."

Income Statement Highlights

Net Interest Income and Margin, up 40 basis points from 2Q14, Normalizes as Expected from the First Quarter
Net interest income for the quarter totaled $25.8 million, a $9.0 million or 54% increase from second quarter 2014 levels.  Net interest income held flat with Q1 levels despite a significant amount of excess purchase loan accretion recognized in the first quarter.  Strong loan growth (a $55.0 million average balance increase) helped offset the impact of reduced purchased loan accretion.  Net interest margin increased 40 basis points from prior year levels to 3.50%.  Margin decreased twelve basis points sequentially, also related to purchased loan accretion.  Purchased loan accretion for the second quarter is near expected levels, although the timing of such loan accretion is expected to be unpredictable.   

Noninterest Income Boosted by New Account Growth
Noninterest income increased $3.0 million or 50% from a year ago to $8.8 million and $1.5 million or 21% above the first quarter of 2015.  Year-over-year growth in all categories of service fee income reflects strength in customer acquisition and cross sell, as well as benefits of the successful BANKshares customer integration.  Linked-quarter noninterest income improvement was fueled by continued household growth.  Service charges on deposit accounts increased $113,000 and interchange income grew $296,000 from the first quarter of 2015.  Marine finance fees also grew $295,000 or 150% from the first quarter.  Adjusting for the gain on a participated loan of $725,000 during the quarter, fee income increased $813,000 or 11%.  Accounting treatment for $725,000 of discount accreted from the participated loan required this income to be included in other operating income rather than taken through the margin. 

Noninterest Expense Increases from Core Growth and Acquisition
Seacoast's efficiency ratio improved to 68.6% in the second quarter of 2015 from 89.4% during the prior year.  This decrease is related to improved operating leverage, as strong revenue growth significantly outpaced expenses. 

Noninterest expense increased $3.6 million or 17% from prior year levels and $1.1 million or 5% from the first quarter 2015.  Year-over-year expense increases reflect the acquisition of The BANKshares, offset by planned expense reduction initiatives.  Linked quarter increases reflect investment in our franchise, and variable expenses related to a strong quarter of production. Notable increases include: the acquisition of FGC during the second quarter 2015 which contributed approximately $351,000 in expense; production-driven commission expense which added approximately $375,000; marketing expense focused on customer acquisition and for corporate branding in BANKshare's Orlando footprint which contributed $250,000 to the increase. 

Merger related expenses totaled $337,000 in the second quarter 2015 compared to $275,000 in the first quarter of 2015 and $1.2 million in the second quarter 2014.

Balance Sheet Highlights

Year-over-Year Deposit Growth Reflects Marketing Wins and Successful Acquisitions
Total deposits increased 44.3% to $2.61 billion at June 30, 2015, from year ago levels.  Core customer funding increased to $2.47 billion at June 30, 2015, a $781.0 million increase from the second quarter of 2014.  Noninterest demand deposits grew $15.1 million, or 1.9% from the first quarter and $298.6 million or 58.6% from the second quarter of 2014.  As a result, noninterest demand deposits increased to 31.0% of total deposits, up from 28.2% one year ago.  Excluding the acquisition, core customer funding increased by $333.6 million or 19.8% from one year ago and total deposits increased $283.3 million or 15.7% from one year ago.  A 5% linked quarter household growth rate was offset by seasonal deposit balance decreases.

 

(Dollars in thousands)

Second
Quarter

2015


First
Quarter

2015


Fourth
Quarter

2014

Third
Quarter

2014

Second
Quarter

2014


Customer Relationship Funding









      Noninterest demand  

$  808,429


$  793,336


$  725,238

$  522,001

$  509,798


      Interest-bearing demand

599,268


634,854


652,353

479,827

493,927


      Money market

621,973


596,600


450,172

344,726

335,246


      Savings

282,588


272,963


264,738

215,076

208,333


      Time certificates of deposit

292,919


312,072


324,033

246,920

258,233


            Total deposits

2,605,177


2,609,825


2,416,534

1,808,550

1,805,537


      Customer sweep accounts

157,676


170,023


153,640

124,436

141,662


      Total core customer funding (1)

2,469,934


2,467,776


2,246,141

1,686,066

1,688,966


  Demand deposit mix

 (noninterest bearing)

31.0%


30.4%


30.0%

28.9%

28.2%


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

 

Loan Growth and Pipelines at Trailing-Four-Quarter Highs
Total loans were $1.94 billion at June 30, 2015, up $602.2 million from a year ago.  Excluding loans acquired in the BANKshares transaction, loans increased $237.9 million or 17.8% from the prior year's second quarter.

Commercial loan originations for the quarter were a strong $85.8 million, increasing $24.5 million or 39.9% over the first quarter and $32.6 million or 61.2% over the second quarter 2014. The commercial pipeline (in underwriting and approval or approved and not yet closed) totaled $108.5 million at June 30, 2015, yet again the highest in the trailing four quarters.

Closed residential production totaled $81.8 million compared to $55.8 million in the first quarter and $61.2 million in the second quarter of 2014. The residential pipeline continued to climb, totaling $53.9 million at June 30, 2015 compared to $48.5 million at March 31, 2014 and $28.3 million one year ago. Consumer loan and small business originations (inclusive of lines of credit) totaled $55.3 million in the second quarter of 2015 compared to $38.9 in the first quarter and $18.0 million one year ago.

 

(Dollars in thousands)


2Q 15

1Q15

4Q14

3Q14

2Q14








Commercial pipeline


$108,538

$82,143

$60,136

$45,534

$58,168

Commercial loans closed


85,815

61,357

94,719

72,630

53,250

Total Commercial loan originations and pipeline


$194,353

$143,500

$154,855

$118,164

$111,418








Residential pipeline


$53,902

$48,485

$21,351

$22,588

$28,345

Residential loans retained


45,596

23,951

31,598

31,781

33,203

Residential loans sold


36,182

31,896

26,336

34,228

27,994

Total Residential loan originations and pipeline


$135,680

$104,332

$79,285

$88,597

$89,542

Other Highlights

Credit Quality Maintains Strong Trends
The provision for loan losses increased to $855,000 for the second quarter of 2015, up from a $1.4 million recapture in the second quarter 2014 and a $422,000 or 97% increase from $433,000 recorded in the first quarter 2015.  The second quarter provision is attributable to strong loan growth during the quarter.  The allowance for loan losses for non-acquired loans was 1.10% of total loans, compared to 1.13% in the first quarter 2015.

Additional highlights include:

  • Nonperforming loans to total loans outstanding at the end of the second quarter was 1.0%, down from 1.6% at June 30, 2014;
  • Nonperforming assets to total assets declined to 0.8%, compared to 1.2% a year ago.

Capital Ratios Continue to Improve from Earnings Momentum
Tangible book value and book value per share each increased by $0.13 per share from the prior quarter to $8.87 and $9.84, respectively at the end of the second quarter.  Average tangible common equity to assets was a strong 9.24% for the second quarter 2015.

Conference Call Information
Seacoast will host a conference call on Friday, July 24, 2015 at 1:00 p.m. (Eastern Time) to discuss the earnings results.  Investors may call in (toll-free) by dialing (888) 517-2513 (passcode: 7789246; host: Dennis S. Hudson). Slides will be used during the conference call and may be accessed at Seacoast's website at SeacoastBanking.com by selecting "Presentations" under the heading "Investor Services."  A replay of the call will be available for one month, beginning late afternoon of July 24, by dialing (888) 843-7419 (domestic), using the passcode 7789246.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon of July 24, 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 $3.2 billion in assets and $2.6 billion in deposits as of June 30, 2015. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 44 traditional branches of its locally-branded wholly-owned subsidiary bank, Seacoast Bank, and five commercial banking centers. Offices stretch from Ft. Lauderdale, Boca Raton and West Palm Beach north through the Space Coast of Florida, into Orlando and Central Florida, and west to Okeechobee and surrounding counties. More information about the Company is available at SeacoastBanking.com.

Sources: 

http://www.americanbanker.com/magazine/2015-06-01-1074530-1.html 

https://www08.wellsfargomedia.com/downloads/pdf/com/insights/economics/regional-reports/FL_Employment_07172015.pdf

http://www.floridatoday.com/story/news/local/2015/05/15/record-tourism-numbers-sunshine-state/27367565/

http://www.bizjournals.com/orlando/blog/2015/04/orlando-becomes-first-destination-to-surpass-60m.html

http://www.orlandorealtors.org/resource/resmgr/docs_market_pulse/MarketPulse072015.html       

Cautionary Notice Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning 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, ability to realized deferred tax assets, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast's objectives, expectations and intentions and other statements that are not historical facts.  Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements. 

You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "support", "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "further", "point to," "project," "could," "intend" or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality; governmental monetary and fiscal policies, as well as legislative, tax and regulatory changes; changes in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.  The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2014, under "Special Cautionary Notice Regarding Forward-looking Statements" and "Risk Factors", and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at  http://www.sec.gov.

Explanation of Certain Unaudited Non-GAAP Financial Measures 
This press release 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, pre-provision 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. 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. 

To better evaluate its earnings, the Company removes certain items to arrive at adjusted net income, Adjusted pretax, pre-provision income and Adjusted diluted earnings per share (non-GAAP measures) as detailed in the table below:

(Dollars in thousands except per share data)


Second Quarter

 2015

First Quarter

 2015

Fourth Quarter

 2014

Third Quarter

 2014

Second Quarter

 2014








  

Net income


$5,805

$5,859

($1,517)

$2,996

$1,918

Severance


29

12

478

328

181

 

Merger related charges


337

275

2,722

399

1,234

 

Branch closure charges and costs related to expense initiatives


0

0

4,261

68

114

Marketing and brand refresh expense


0

0

697

0

0

 

Stock compensation expense and other incentive costs related to improved outlook


0

0

1,213

0

0

Security (gains)


0

0

(108)

(344)

0

Miscellaneous losses (gains)


0

0

119

(45)

144

Recovery of nonaccrual loan interest


0

0

0

(192)

0

Net loss on OREO and repossessed assets


53

81

9

156

92

Asset dispositions expense


173

143

103

139

118

Effective tax rate on adjustments


(225)

(193)

(3,798)

(219)

(811)

 

Adjusted Net Income (1)


6,172

6,177

4,179

3,286

2,990

Provision (recapture) for loan losses


855

433

118

(1,425)

(1,444)

Income taxes


3,788

3,732

3,167

2,480

2,275

Adjusted pretax, pre-provision income (1)


$10,815

$10,342

$7,464

$4,341

$3,821

Adjusted earnings per diluted share (1)


$0.19

$0.19

$0.13

$0.13

$0.12

Average shares outstanding (000)


33,234

33,136

33,124

26,026

25,998

(1)     Non-GAAP measure

 

 

FINANCIAL  HIGHLIGHTS 



(Unaudited)








SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES















(Dollars in thousands, except share data)

Three Months Ended


Six Months Ended



June 30,


March 31,


June 30,


June 30,


June 30,



2015


2015


2014


2015


2014


Summary of Earnings











Net income (loss)

$             5,805


$         5,859


$           1,918


$           11,664


$           4,217


Net interest income  (1)

25,788


25,834


16,779


51,622


33,056


Net interest margin  (1), (2)

3.50


3.62


3.10


3.56


3.09











.


Performance Ratios











Return on average assets-GAAP basis (2), (3)

0.72

%

0.75

%

0.33

%

0.74

%

0.37

%

Return on average shareholders' equity-GAAP basis (2), (3)

7.13


7.42


3.25


7.27


3.63


Return on average tangible shareholders' equity-GAAP basis (2), (3), (4)

8.20


8.51


3.47


8.35


3.86


Efficiency ratio (5)

68.57


68.33


89.42


68.45


86.91


Noninterest income to total revenue

25.63


22.13


26.06


23.92


25.80













Per Share Data











Net income (loss) diluted-GAAP basis

$               0.18


$            0.18


$              0.07


$               0.35


$              0.16


Net income (loss) basic-GAAP basis

0.18


0.18


0.07


0.35


0.16


Book value per share common

9.84


9.71


9.02


9.84


9.02


Tangible book value per share

8.87


8.74


9.00


8.87


9.00


Cash dividends declared

0.00


0.00


0.00


0.00


0.00
























(1)  Calculated on a fully taxable equivalent basis using amortized cost.


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

(3)  The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses) because

the unrealized gains (losses) are not included in net income (loss).

(4)  Defined as total shareholder's equity less intangible assets.

(5) Defined as (noninterest expense less foreclosed property expense and amortization of intangibles) divided by net operating revenue

(net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains).









 

 

FINANCIAL  HIGHLIGHTS 








SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES














June 30,


March 31,


June 30,



(Dollars in thousands, except share data)

2015


2015


2014











Selected Financial Data








Total assets 

$     3,233,588


$  3,231,956


$    2,294,156



Securities available for sale (at fair value)

762,086


730,232


518,353



Securities held for investment (at amortized cost)

214,777


223,061


156,498



Net loans

1,918,608


1,836,766


1,317,052



Deposits 

2,605,177


2,609,825


1,805,537



Total shareholders' equity  

326,856


321,844


234,439











Average Balances (Year-to-Date)








Total average assets

$     3,188,334


$  3,151,132


$    2,295,983



Less: intangible assets

31,707


31,221


525



Total average tangible assets

$     3,156,627


$  3,119,911


$    2,295,458











Total average equity

$        323,359


$     320,346


$       234,214



Less: intangible assets

31,707


31,221


525



Total average tangible equity

$        291,652


$     289,125


$       233,689











Credit Analysis








Net charge-offs (recoveries) year-to-date - non-acquired loans

$              (621)


$           (263)


$             (251)



Net charge-offs year-to-date - acquired loans

189


46


-



Total net charge-offs (recoveries) year-to-date

$              (432)


$           (217)


$             (251)











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

(0.07)

%

(0.06)

%

(0.04)

%


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

0.02


0.01


-



Total net charge-offs (recoveries) to average loans (annualized)

(0.05)


(0.05)


(0.04)











Loan loss provision (recapture) year-to-date - non-acquired loans

$                563


$             292


$          (2,179)



Loan loss provision year-to-date - acquired loans

725


141


-



Total loan loss provision (recapture) year-to-date

$             1,288


$             433


$          (2,179)











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

1.10

%

1.13

%

1.36

%


Discount for credit losses to acquired loans at end of period

3.32


3.56


-











Nonperforming loans - non-acquired loans

$           15,054


$       16,860


$         21,745



Nonperforming loans - acquired loans

4,543


4,196


-



Other real estate owned - non-acquired 

4,855


4,738


6,198



Other real estate owned - acquired 

1,053


1,431


-



Total nonperforming assets 

$           25,505


$       27,225


$         27,943











Restructured loans (accruing)

$           23,441


$       23,847


$         28,157











Purchased noncredit impaired loans

$        275,964


$     296,839


$                  -



Purchased credit impaired loans

6,562


7,119


-



Total acquired loans

$        282,526


$     303,958


$                  -











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

0.78

%

0.91

%

1.63

%


Nonperforming loans to loans at end of period - acquired loans

0.23


0.23


-



Total nonperforming loans to loans at end of period

1.01


1.14


1.63











Nonperforming assets to total assets - non-acquired 

0.62

%

0.67

%

1.22

%


Nonperforming assets to total assets - acquired 

0.17


0.17


-



Total nonperforming assets to total assets

0.79


0.84


1.22



















 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)







SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES




















Three Months Ended


Six Months Ended



June 30,


June 30,

(Dollars in thousands, except per share data)


2015


2014


2015


2014










Interest on securities:









     Taxable


$           4,977


$          3,629


$        9,875


$            7,063

     Nontaxable


147


9


297


21

Interest and fees on loans


21,988


14,103


44,009


27,901

Interest on federal funds sold and other investments


249


246


498


514

         Total Interest Income


27,361


17,987


54,679


35,499










Interest on deposits


524


184


925


378

Interest on time certificates


321


386


668


793

Interest on borrowed money


850


692


1,710


1,382

         Total Interest Expense


1,695


1,262


3,303


2,553










         Net Interest Income


25,666


16,725


51,376


32,946

Provision (recapture) for loan losses


855


(1,444)


1,288


(2,179)

         Net Interest Income After Provision for Loan Losses


24,811


18,169


50,088


35,125










Noninterest income:









     Service charges on deposit accounts


2,115


1,484


4,117


2,991

     Trust fees


759


703


1,560


1,374

     Mortgage banking fees


1,032


855


2,120


1,516

     Brokerage commissions and fees


576


410


1,017


789

     Marine finance fees


492


340


689


594

     Interchange income


2,033


1,514


3,770


2,917

     Other deposit based EFT fees


96


83


210


181

     BOLI income


334


0


664


0

     Gain on participated loan


725


0


725


0

     Other


684


507


1,282


1,092



8,846


5,896


16,154


11,454

     Securities gains, net


0


0


0


17

         Total Noninterest Income


8,846


5,896


16,154


11,471










Noninterest expenses:









     Salaries and wages


9,301


7,768


18,090


15,392

     Employee benefits


2,541


2,081


4,956


4,263

     Outsourced data processing costs


2,234


1,811


4,418


3,506

     Telephone / data lines


443


306


939


599

     Occupancy 


2,011


1,888


4,034


3,726

     Furniture and equipment 


819


604


1,551


1,175

     Marketing 


1,226


675


2,201


1,488

     Legal and professional fees


1,590


2,272


3,253


3,213

     FDIC assessments


520


411


1,109


797

     Amortization of intangibles


315


196


630


392

     Asset dispositions expense


173


118


316


246

     Net loss on other real estate owned and repossessed assets


53


92


134


145

     Other 


3,062


2,461


5,843


4,524

         Total Noninterest Expenses


24,288


20,683


47,474


39,466










         Income Before Income Taxes


9,369


3,382


18,768


7,130

Income taxes


3,564


1,464


7,104


2,913










         Net Income


$           5,805


$          1,918


$      11,664


$            4,217










Per share of common stock:


















     Net income diluted


$             0.18


$            0.07


$           0.35


$              0.16

     Net income basic


0.18


0.07


0.35


0.16

     Cash dividends declared


0.00


0.00


0.00


0.00










Average diluted shares outstanding


33,233,508


25,998,121


33,184,764


25,828,391

Average basic shares outstanding


32,978,006


25,826,825


32,971,670


25,659,159










 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)







SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES




















QUARTER


2015


2014

(Dollars in thousands)

Second


First


Fourth


Third


Second











Interest on securities:










     Taxable

$        4,977


$            4,898


$        4,728


$        3,657


$        3,629

     Nontaxable

147


150


182


8


9

Interest and fees on loans

21,988


22,021


21,070


14,615


14,103

Interest on federal funds sold and other investments

249


249


292


211


246

         Total Interest Income

27,361


27,318


26,272


18,491


17,987











Interest on deposits

524


401


297


189


184

Interest on time certificates

321


347


375


370


386

Interest on borrowed money

850


860


867


704


692

         Total Interest Expense

1,695


1,608


1,539


1,263


1,262











         Net Interest Income

25,666


25,710


24,733


17,228


16,725

Provision (recapture) for loan losses

855


433


118


(1,425)


(1,444)

         Net Interest Income After Provision for Loan Losses

24,811


25,277


24,615


18,653


18,169











Noninterest income:










     Service charges on deposit accounts

2,115


2,002


2,208


1,753


1,484

     Trust fees

759


801


795


817


703

     Mortgage banking fees

1,032


1,088


716


825


855

     Brokerage commissions and fees

576


441


417


408


410

     Marine finance fees

492


197


445


281


340

     Interchange income

2,033


1,737


1,603


1,452


1,514

     Other deposit based EFT fees

96


114


92


70


83

     BOLI income

334


330


252


0


0

     Gain on participated loan

725


0


0


0


0

     Other

684


598


613


543


507


8,846


7,308


7,141


6,149


5,896

     Securities gains, net

0


0


108


344


0

         Total Noninterest Income

8,846


7,308


7,249


6,493


5,896











Noninterest expenses:










     Salaries and wages

9,301


8,789


11,676


8,064


7,768

     Employee benefits

2,541


2,415


2,461


2,049


2,081

     Outsourced data processing costs

2,234


2,184


3,506


1,769


1,811

     Telephone / data lines

443


496


419


313


306

     Occupancy 

2,011


2,023


2,325


1,879


1,888

     Furniture and equipment 

819


732


732


628


604

     Marketing 

1,226


975


1,163


925


675

     Legal and professional fees

1,590


1,663


2,555


1,103


2,272

     FDIC assessments

520


589


476


387


411

     Amortization of intangibles

315


315


446


195


196

     Asset dispositions expense

173


143


103


139


118

     Branch closures and new branding

0


0


4,958


0


0

     Net loss on other real estate owned and repossessed assets

53


81


9


156


92

     Other 

3,062


2,781


3,182


2,282


2,461

         Total Noninterest Expenses

24,288


23,186


34,011


19,889


20,683











         Income Before Income Taxes

9,369


9,399


(2,147)


5,257


3,382

Income taxes

3,564


3,540


(630)


2,261


1,464











         Net Income

$        5,805


$            5,859


$      (1,517)


$        2,996


$        1,918











Per share of common stock:




















     Net income diluted

$           0.18


$               0.18


$        (0.05)


$          0.12


$          0.07

     Net income basic

0.18


0.18


(0.05)


0.12


0.07

     Cash dividends declared

0.00


0.00


0.00


0.00


0.00











Average diluted shares outstanding

33,233,508


33,135,618


33,123,525


26,025,693


25,998,121

Average basic shares outstanding

32,978,006


32,971,444


32,888,612


25,887,591


25,826,825











 

 

CONDENSED CONSOLIDATED BALANCE SHEETS          

(Unaudited)





SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES














June 30,


December 31,


June 30,

(Dollars in thousands, except share data)

2015


2014


2014








Assets







   Cash and due from banks


$               86,904


$               64,411


$              40,175

   Interest bearing deposits with other banks

7,844


36,128


113,855

            Total  Cash and Cash Equivalents

94,748


100,539


154,030








   Securities:







        Available for sale (at fair value)

762,086


741,375


518,353

        Held for investment (at amortized cost)

214,777


207,904


156,498

            Total Securities 


976,863


949,279


674,851








   Loans available for sale


19,656


12,078


18,129








   Loans, net of deferred costs


1,937,399


1,821,885


1,335,192

   Less: Allowance for loan losses


(18,791)


(17,071)


(18,140)

            Net Loans


1,918,608


1,804,814


1,317,052








   Bank premises and equipment, net


50,028


45,086


34,653

   Other real estate owned


5,908


7,462


6,198

   Other intangible assets


6,824


7,454


326

   Goodwill


25,211


25,309


0

   Bank owned life insurance


36,291


35,679


0

   Other assets


99,451


105,635


88,917



$          3,233,588


$          3,093,335


$        2,294,156








Liabilities and Shareholders' Equity






Liabilities







   Deposits







        Noninterest demand


$             808,429


$             725,238


$            509,798

        Interest-bearing demand


599,268


652,353


493,927

        Savings


282,588


264,738


208,333

        Money market


621,973


450,172


335,246

        Other time certificates


158,091


173,247


144,001

        Brokered time certificates


8,237


7,034


8,040

        Time certificates of $100,000 or more

126,591


143,752


106,192

            Total Deposits


2,605,177


2,416,534


1,805,537








   Federal funds purchased and securities sold under






       agreements to repurchase, maturing within 30 days

172,676


233,640


141,662

    Borrowed funds


50,000


50,000


50,000

    Subordinated debt


64,670


64,583


53,610

    Other liabilities


14,209


15,927


8,908



2,906,732


2,780,684


2,059,717








Shareholders' Equity







    Common stock


3,300


3,300


2,599

    Additional paid in capital


380,553


379,249


302,088

    Accumulated deficit


(53,336)


(65,000)


(66,478)

    Treasury stock


(64)


(71)


(54)



330,453


317,478


238,155

    Accumulated other comprehensive (loss), net

(3,597)


(4,827)


(3,716)

            Total Shareholders' Equity


326,856


312,651


234,439



$          3,233,588


$          3,093,335


$        2,294,156








Common Shares Outstanding


33,220,511


33,136,592


25,998,823








Note:  The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date.


 

 

CONSOLIDATED QUARTERLY FINANCIAL  DATA





(Unaudited)






SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES






















QUARTERS


2015


2014


(Dollars in thousands, except per share data)

Second


First


Fourth


Third


Second


Net income (loss)

$                     5,805


$              5,859


$          (1,517)


$            2,996


$              1,918













Operating Ratios











   Return on average assets-GAAP basis (2),(3)

0.72

%

0.75

%

(0.20)

%

0.52

%

0.33

%

   Return on average tangible assets (2),(3),(4)

0.75


0.79


(0.16)


0.54


0.36


   Return on average shareholders' equity-GAAP basis (2),(3)

7.13


7.42


(1.89)


4.97


3.25


   Efficiency ratio (5)

68.57


68.33


104.46


82.78


89.42


   Noninterest income to total revenue

25.63


22.13


22.40


26.30


26.06













   Net interest margin (1),(2)

3.50


3.62


3.56


3.17


3.10


   Average equity to average assets

10.12


10.17


10.51


10.37


10.27













Credit Analysis Excluding Acquired Loans











   Net charge-offs (recoveries) - non-acquired loans

$                      (358)


$               (263)


$               618


$              (856)


$               (112)


   Net charge-offs - acquired loans

143


46


-


-


-


   Total net charge-offs (recoveries)

$                      (215)


$               (217)


$               618


$              (856)


$               (112)













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

(0.08)

%

(0.06)

%

0.14

%

(0.25)

%

(0.03)

%

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

0.03


0.01


-


-


-


   Total net charge-offs (recoveries) to average loans

(0.05)


(0.05)


0.14


(0.25)


(0.03)













   Loan loss provision (recapture) - non-acquired loans

$                        271


$                 292


$                 54


$           (1,425)


$            (1,444)


   Loan loss provision (recapture) - acquired loans

584


141


64


-


-


   Total loan loss provision (recapture)

$                        855


$                 433


$               118


$           (1,425)


$            (1,444)













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

1.10

%

1.13

%

1.14

%

1.26

%

1.36

%

   Discount for credit losses to acquired loans at end of period

3.32


3.56


3.56


-


-













   Nonperforming loans - non-acquired loans

$                  15,054


$            16,860


$         18,563


$          18,942


$           21,745


   Nonperforming loans - acquired loans

4,543


4,196


2,577


-


-


   Other real estate owned - non-acquired

4,855


4,738


5,567


5,018


6,198


   Other real estate owned - acquired

1,053


1,431


1,895


-


-


   Total nonperforming assets

$                  25,505


$            27,225


$         28,602


$          23,960


$           27,943













  Restructured loans (accruing)

$                  23,441


$            23,847


$         24,997


$          28,969


$           28,157













  Purchased noncredit impaired loans

$                275,964


$          296,839


$       326,066


$                   -


$                    -


  Purchased credit impaired loans

6,562


7,119


7,814


-


-


  Total acquired loans

$                282,526


$          303,958


$       333,880


$                   -


$                    -













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

0.78

%

0.91

%

1.02

%

1.36

%

1.63

%

   Nonperforming loans to loans at end of period - acquired loans

0.23


0.23


0.14


-


-


   Total nonperforming loans to loans at end of period

1.01


1.14


1.16


1.36


1.63













   Nonperforming assets to total assets - non-acquired

0.62

%

0.67

%

0.78

%

1.01

%

1.22

%

   Nonperforming assets to total assets - acquired

0.17


0.17


0.14


-


-


   Total nonperforming assets to total assets

0.79


0.84


0.92


1.01


1.22













Per Share Common Stock











   Net income (loss) diluted-GAAP basis

$                       0.18


$                0.18


$            (0.05)


$               0.12


$                0.07


   Net income (loss) basic-GAAP basis

0.18


0.18


(0.05)


0.12


0.07













   Cash dividends declared

0.00


0.00


0.00


0.00


0.00


   Book value per share common

9.84


9.71


9.44


9.07


9.02













Average Balances











Total average assets

$             3,225,127


$      3,151,132


$    3,037,061


$     2,305,799


$      2,304,870


Less: Intangible assets

32,188


31,221


33,803


237


422


Total average tangible assets

$             3,192,939


$      3,119,911


$    3,003,258


$     2,305,562


$      2,304,448













Total average equity

$                326,338


$          320,346


$       319,233


$        239,031


$         236,632


Less: Intangible assets

32,188


31,221


33,803


237


422


Total average tangible equity

$                294,150


$          289,125


$       285,430


$        238,794


$         236,210













(1) Calculated on a fully taxable equivalent basis using amortized cost.

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

(3) The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses), because the unrealized gains (losses) 

are not included in net income (loss).

(4) The Company believes that return on average assets and equity excluding the impacts of noncash amortization

expense on intangible assets is a better measurement of the Company's trend in earnings growth.

(5) Defined as (noninterest expense less foreclosed property expense and amortization of intangibles) divided by net operating revenue

(net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains).









 

 






June 30,


December 31,


June 30,


SECURITIES 





2015


2014


2014


U.S. Treasury and U.S. Government Agencies





$           3,843


$            3,899


$                 100


Mortgage-backed





558,561


587,933


479,720


Collateralized loan obligations





124,241


125,225


32,260


Obligations of states and political subdivisions





22,873


24,318


6,273


Corporates





24,213


0


0


CMBS





20,587


0


0


Other





7,768


0


0


   Securities Available for Sale





762,086


741,375


518,353













Mortgage-backed





173,477


182,076


156,498


Collateralized loan obligations





41,300


25,828


0


   Securities Held for Investment





214,777


207,904


156,498


       Total Securities





$       976,863


$        949,279


$         674,851













 

 

 






June 30,


December 31,


June 30,


LOANS





2015


2014


2014













Construction and land development





$         95,178


$          87,036


$           57,393


Real estate mortgage





1,588,105


1,524,044


1,145,013


Installment loans to individuals





62,913


52,897


45,241


Commercial and financial





190,325


157,396


87,285


Other loans





878


512


260


       Total Loans





$    1,937,399


$     1,821,885


$      1,335,192













 

 

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


(Unaudited)











SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


































2015


2014


Second Quarter


First Quarter


Second Quarter


Average




Yield/


Average




Yield/


Average




Yield/

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate

Assets


















Earning assets:


















    Securities:


















         Taxable

$         957,374


$        4,977


2.08%


$       939,015


$      4,898


2.09%


$      677,600


$    3,630


2.14%

         Nontaxable 

15,311


225


5.87


15,617


230


5.89


827


14


6.77

                   Total Securities

972,685


5,202


2.14


954,632


5,128


2.15


678,427


3,644


2.15



















    Federal funds sold and other


















         investments

79,031


249


1.26


92,934


249


1.09


153,410


246


0.64



















    Loans,  net

1,904,011


22,032


4.64


1,848,965


22,065


4.84


1,338,415


14,151


4.24



















                  Total Earning Assets

2,955,727


27,483


3.73


2,896,531


27,442


3.84


2,170,252


18,041


3.33



















Allowance for loan losses

(18,247)






(17,385)






(19,784)





Cash and due from banks

71,858






63,689






35,735





Premises and equipment

49,275






46,605






34,948





Intangible assets

32,188






31,221






422





Bank owned life insurance

36,111






35,793






0





Other assets

98,215






94,678






83,297
























$      3,225,127






$    3,151,132






$   2,304,870























Liabilities and Shareholders' Equity


















Interest-bearing liabilities:


















      Interest-bearing demand

$         612,433


$           110


0.07%


$       628,480


$         117


0.08%


$      498,285


$          94


0.08%

      Savings

279,354


41


0.06


268,041


39


0.06


205,686


23


0.04

      Money market

607,271


373


0.25


519,526


245


0.19


336,772


67


0.08

      Time deposits

303,802


321


0.42


318,343


347


0.44


259,325


386


0.60

      Federal funds purchased and 


















        other short term borrowings

168,068


77


0.18


212,123


98


0.19


150,108


65


0.17

      Other borrowings

114,649


773


2.70


114,606


762


2.70


103,610


627


2.43



















                Total Interest-Bearing Liabilities

2,085,577


1,695


0.33


2,061,119


1,608


0.32


1,553,786


1,262


0.33



















Noninterest demand

795,707






753,620






505,892





Other liabilities

17,505






16,047






8,560





                  Total Liabilities 

2,898,789






2,830,786






2,068,238























Shareholders' equity

326,338






320,346






236,632
























$      3,225,127






$    3,151,132






$   2,304,870























Interest expense as a % of earning assets  





0.23%






0.23%






0.23%

Net interest income as a % of earning assets  



$      25,788


3.50%




$    25,834


3.62%




$  16,779


3.10%





































(1) On a fully taxable equivalent basis.  All yields and rates have been computed on an annualized basis using amortized cost.









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





























 

 

 

CONSOLIDATED QUARTERLY FINANCIAL  DATA




(Unaudited)





SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES






















2015


2014

(Dollars in thousands)


Second Quarter


First Quarter


Fourth Quarter


Third Quarter


Second Quarter













Customer Relationship Funding (Period End)










      Noninterest demand












Commercial


$            561,742


$           546,876


$         481,327


$          301,630


$         293,515


Retail


180,484


191,262


190,120


162,392


167,172


Public funds


47,913


38,529


41,201


39,329


33,223


Other


18,290


16,669


12,590


18,650


15,888




808,429


793,336


725,238


522,001


509,798













      Interest-bearing demand












Commercial


60,411


66,532


58,173


41,131


41,423


Retail


410,601


416,766


407,653


324,690


327,762


Public funds


128,256


151,556


186,527


114,006


124,742




599,268


634,854


652,353


479,827


493,927













      Total transaction accounts












Commercial


622,153


613,408


539,500


342,761


334,938


Retail


591,085


608,028


597,773


487,082


494,934


Public funds


176,169


190,085


227,728


153,335


157,965


Other


18,290


16,669


12,590


18,650


15,888




1,407,697


1,428,190


1,377,591


1,001,828


1,003,725













      Savings


282,588


272,963


264,738


215,076


208,333













      Money market












Commercial


191,061


185,668


172,417


118,385


114,662


Retail


272,853


274,203


264,725


218,376


213,927


Public funds


158,059


136,729


13,030


7,965


6,657




621,973


596,600


450,172


344,726


335,246













      Time certificates of deposit


292,919


312,072


324,033


246,920


258,233

            Total Deposits


$         2,605,177


$        2,609,825


$      2,416,534


$       1,808,550


$      1,805,537













      Customer sweep accounts


$            157,676


$           170,023


$         153,640


$          124,436


$         141,662













      Total core customer funding (1)


$         2,469,934


$        2,467,776


$      2,246,141


$       1,686,066


$      1,688,966

























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







 

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SOURCE Seacoast Banking Corporation of Florida