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Press Release

Seacoast Q3 Net Income Rises More Than 48% Year-over-Year to $4.4 Million

Revenue Growth Propels Adjusted Net Income Up 96% to $6.4 million, Adjusted Diluted Earnings Per Common Share Increases 46% to $0.19

Company Release - 10/22/2015 4:05 PM ET

STUART, Fla., Oct. 22, 2015 /PRNewswire/ --

Third Quarter 2015 Earnings Highlights

  • Revenues increased $2.6 million to a record $37.1 million, or 7.5% compared to Q2 2015, and $13.7 million, or 59% compared to Q3 2014.
  • Net interest margin increased 58 basis points year-over-year to 3.75% and net interest income improved $11.8 million or 69%, reflecting organic growth and acquisition activity.
  • Adjusted net income excluding merger costs and other adjustments1 increased 96% to $6.4 million, or $ 0.19 per diluted share, compared to $3.3 million, or $0.13 per diluted share, in Q3 2014.

Third Quarter 2015 Growth Highlights

  • Loans increased $162 million or 8% compared to Q2 2015, and rose 51% year-over-year. Excluding acquisitions, loans increased $58 million or 3% compared to Q2 2015 and $227 million or 16% from Q3 2014.
  • Total households increased a strong 4% (not annualized) compared to Q2 2015 and 23% compared to Q3 2014. Excluding acquisition, household growth accelerated to 6% (annualized) over Q2 levels.
  • Seacoast closed the Grand Bankshares, Inc. acquisition and completed the conversion of Grand's customers over the July 17 weekend, adding approximately $188 million in deposits and $112 million in gross loans in the attractive Palm Beach market with minimal customer attrition.
Seacoast Banking Corporation of Florida

Seacoast Banking Corporation of Florida (NASDAQ: SBCF) today reported results for the third quarter of 2015.  Third quarter revenue rose $2.6 million, or 7.5%, to $37.1 million compared to $34.5 million in the prior quarter.  Net income increased $1.4 million, or 48%, to $4.4 million, compared to the third quarter of 2014, and adjusted net income1 increased $3.1 million or 96% from year-ago levels.  Diluted earnings per common share were $0.13 and adjusted diluted earnings per common share1 were $0.19 in the third quarter compared with $0.13 in the third quarter of 2014 and $0.19 in the second quarter of 2015.

Net income improved 123% to $16.1 million, or $0.48 per diluted common share, for the first three quarters of 2015 from $7.2 million, or $0.28 per diluted common share, for the first three quarters of 2014.

Dennis S. Hudson, III, Chairman and CEO said, "We continue to build momentum, growing our top-line and improving earnings and profitability while investing for the future and managing risk. Our balanced expansion strategy, combining strong organic growth with strategic acquisitions in attractive Florida markets, positions Seacoast for continued success."

"As we strengthen our franchise, we have invested for the future, especially in high quality employees.  This quarter's expenses reflect the first full quarter with our receivables funding team from First Growth Capital (FGC), nearly a full quarter of Grand Bankshares in Palm Beach, and new hires to support organic revenue initiatives," continued Hudson.  "We look forward to considerable positive impact from these investments in succeeding quarters." 

"In addition to successfully integrating Palm Beach-based Grand Bankshares during the third quarter," Hudson said, "we recently announced an agreement to purchase BMO Harris Bank's Orlando banking franchise, including retail and business banking employees and customers.  This acquisition builds on our 2014 acquisition of BankFIRST and makes us a Top-10 bank in the attractive Orlando market, adding nearly 8,500 additional households.  We look forward to welcoming these customers in early 2016."  

FINANCIAL HIGHLIGHTS


3Q15

2Q15

1Q15

4Q14

3Q14

(Dollars in thousands except per share data)














Total Assets


$3,378,108

$3,233,588

$3,231,956

$3,093,335

$2,361,813








Loans


2,099,447

1,937,399

1,854,487

1,821,885

1,391,082








Deposits


2,742,296

2,605,177

2,609,825

2,416,534

1,808,550








Net Income (Loss) Available to Common  Shareholders


4,441

5,805

5,859

(1,517)

2,996








Diluted Earnings Per Share   


0.13

0.18

0.18

(0.05)

0.12








Return on Average Assets


0.52 %

0.72 %

0.75 %

(0.20 %)

0.52 %








Net Interest Margin


3.75

3.50

3.62

3.56

3.17

Efficiency Ratio


76.3

68.6

68.3

104.5

82.8








Pretax, Pre-provision Income (1)


$8,126

$10,224

$9,832

($2,029)

$3,832

Average Diluted Shares

     Outstanding (000)


34,194

33,234

33,136

33,124

26,026

Adjusted Net Income (1)


$6,433

$6,172

$6,177

$4,179

$3,286

Adjusted Diluted Earnings  

     Per Share (1)


0.19

0.19

0.19

0.13

0.13








Adjusted Return on Average Assets (1)


0.76 %

0.77 %

0.79 %

0.55 %

0.57 %








Adjusted Efficiency Ratio (1)


68.2

67.5

67.5

74.8

79.6

Adjusted Pretax, Pre-provision Income (1)


$11,328

$10,815

$10,342

$7,464

$4,341








Annualized Adjusted Core
Operating Expenses as 
a Percent of Average
Assets (1)


3.03%

2.91%

2.88%

3.13%

3.21%
















Acquisitions Update
Hudson noted that, "Seacoast continued to benefit from acquisitions integrated during the last four quarters. Our acquisition of Grand Bankshares on July 17 doubled our existing share in the attractive Palm Beach County market and made us the third-largest Florida-based bank doing business there."

Nearly a year after completing our acquisition, customer metrics for Winter Park-based BankFIRST are extremely encouraging. Household growth for former BankFIRST customers was 7.5% annualized and cross-sell, the number of products used by each household, increased at a 9.4% annualized rate.

Florida Economic Update
"We continue to enjoy the tailwinds of a strong regional economy, with data showing that Florida is significantly outperforming the nation," said Hudson.

Wells Fargo's Economics Group, in its report titled "Florida's Economy Continues to See Solid Job Gains" stated, "On a year-over-year basis, nonfarm employment has risen a solid 3.3 percent throughout Florida, reflecting an increase of 261,500 jobs. The nation as a whole reported a gain of 2.1 percent over the year. Florida's year-to-year job gains have exceeded the nation every month since April 2012."  The report noted that Florida's unemployment rate dropped 0.2 percentage points to 5.3% in August with the steepest declines in areas hard hit by the housing slump and now recovering nicely.

The future also looks promising.  In its "Southeast Florida 3rd Quarter 2015 Market Outlook", PNC Financial Services Group stated that, "…Southeast Florida's economy will be an above-average performer in 2015 and 2016. A strengthening global economy will sustain trade and investment while rising real disposable income nationally will boost tourism."  The article continued, "Longer term, strong population growth, well-developed infrastructure and deep international linkages will give the region a higher trend rate of economic growth."

Income Statement Highlights

Core Loan Growth and Acquisition Fuel Net Interest Income and Margin Expansion
Net interest income for the quarter totaled $29.0 million, an $11.8 million or 68% increase from third quarter 2014 levels.  Net interest margin expanded to 3.75%, a 58 basis point, or an 18% increase from the prior year.  Year-over-year net interest income and margin increases reflect acquisition activity, core deposit and loan growth, and the strategic investment of excess liquidity.

Net interest income increased $3.3 million or 13% and net interest margin expanded 25 basis points or 7% from 3.50% in the prior quarter.  Linked quarter results reflect an improved balance sheet mix and acquisition activity.  In addition, net interest income benefited from excess purchased loan accretion recognized from early loan payoffs, contributing approximately 10 basis points in margin to the quarter. 

Noninterest Income
Noninterest income excluding security gains, totaled $8.1 million for the third quarter, an increase of $1.9 million or 31% from a year ago. Year-over-year growth in all categories of service fee income reflects strength in customer acquisition and cross sell, as well as benefits from acquisition activity. 

Noninterest income declined from the prior quarter's $8.8 million, the result of a $725,000 gain on a participated loan included in noninterest income in the second quarter.  Excluding the gain on the participated loan, noninterest income was down slightly.   A strong quarter for mortgage banking fees and wealth management was offset by seasonal volatility in marine lending fees.

Noninterest Expense Increases from Acquisition and Investments in Franchise
Noninterest expense increased $9.2 million or 46% from the third quarter 2014.  Year-over-year expense increases reflect the acquisitions of The BANKshares, FGC and Grand Bankshares, merger related expenses and other one-time expenses totaling $3.0 million in the third quarter compared to $0.6 million in the prior year, and additional investments to promote organic growth. 

Noninterest expense increased $4.8 million or 20% from the prior quarter.  Excluding merger related charges and other one-time items, noninterest expenses grew $2.1 million or 9%.  A significant amount of this increase is related to nearly a full quarter's operating expense impact from the Grand Bankshares acquisition. Other areas of investment in the franchise include: a full quarter's expense related to the acquisition of FGC during the second quarter 2015 which contributed approximately $309,000 in additional expense, production-driven commission and incentive expense which added approximately $352,000, core legal and professional fees that typically vary from quarter to quarter totaling $396,000, and marketing expense focused on customer acquisition and corporate brand awareness surrounding the Grand Bankshares Palm Beach footprint which contributed $133,000 to the increase.

Seacoast's efficiency ratio was 76.3%, improving from 82.8% in the prior year.  This decrease is related to improved operating leverage, as strong revenue growth outpaced expenses offset by a significant amount of merger related costs.  Seacoast's adjusted efficiency ratio1 was 68.2%, a 14% improvement from the 79.6% one year ago and a slight increase from 67.5% in the second quarter 2015. 

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

Balance Sheet Highlights

Deposit Growth Reflects Success of Core Customer Increase and Acquisitions
Total deposits increased 51.6% to $2.74 billion at September 30, 2015, from year ago levels.  Core customer funding increased to $2.58 billion at September 30, 2015, an $898.2 million increase from the third quarter of 2014.  Excluding acquisitions, core customer funding increased by $292.6 million or 17.4% from one year ago and total deposits increased $229.0 million or 12.7% from one year ago.  Excluding Grand Bankshares, core customer funding decreased $45.5 million compared to the prior quarter, entirely due to seasonal declines in public funds.

Noninterest demand deposits grew $61.4 million, or 7.6% from the second quarter and $347.9 million or 66.6% from the third quarter of 2014.  Noninterest demand deposits increased to 31.7% of total deposits, up from 28.9% one year ago. 

(Dollars in thousands)

Third

Quarter

2015


Second

Quarter

2015

First
 Quarter

2015


Fourth

Quarter

2014

Third

Quarter

2014


Customer Relationship Funding









      Noninterest demand  

$  869,877


$  808,429

$  793,336


$  725,238

$  522,001


      Interest-bearing demand

618,344


599,268

634,854


652,353

479,827


      Money market

660,632


621,973

596,600


450,172

344,726


      Savings

286,810


282,588

272,963


264,738

215,076


      Time certificates of deposit

306,633


292,919

312,072


324,033

246,920


            Total deposits

2,742,296


2,605,177

2,609,825


2,416,534

1,808,550


      Customer sweep accounts

148,607


157,676

170,023


153,640

124,436


      Total core customer funding (1)

$ 2,584,270


$ 2,469,934

$ 2,467,776


$ 2,246,141

$ 1,686,066


  Demand deposit mix

 (noninterest bearing)

31.7%


31.0%

30.4%


30.0%

28.9%


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

Loans Up Substantially from Acquisition and Strong Core Growth
Total loans were $2.10 billion at September 30, 2015, an increase of $708 million or 51% from a year ago.  Excluding acquired loans, loans increased $227 million or 16% from the prior year's third quarter.

Commercial loan originations for the quarter were $71.8 million with the commercial pipeline (in underwriting and approval or approved and not yet closed) totaling a strong $104.9 million at September 30, 2015 only slightly below second quarter levels and well in excess of recent history.  Consumer loan and small business originations (inclusive of lines of credit) totaled $51.1 million in the third quarter of 2015 compared to $55.3 million in the second quarter and $24.5 million one year ago.

Along with this strong loan growth, the portfolio continued to build granularity, with solid industry diversification.  The average commercial and small business loan originated in the first three quarters of 2015 totaled only $278,000.

Closed residential production totaled $74.0 million compared with $66.0 million a year ago, with a total residential pipeline of $38.0 million at September 30, 2015 versus a pipeline of $22.6 million one year ago.

(Dollars in thousands)


3Q 15

2Q 15

1Q15

4Q14

3Q14








Commercial pipeline


$104,915

$108,538

$82,143

$60,136

$45,534

Commercial loans closed


71,823

85,815

61,357

94,719

72,630

Total Commercial loan originations and pipeline


$176,738

$194,353

$143,500

$154,855

$118,164








Residential pipeline


$37,958

$53,902

$48,485

$21,351

$22,588

Residential loans retained


36,027

45,596

23,951

31,598

31,781

Residential loans sold


37,996

36,182

31,896

26,336

34,228

Total Residential loan originations and pipeline


$111,981

$135,680

$104,332

$79,285

$88,597

Other Highlights

Credit Quality Remains Stable with Growth Trends
The provision for loan losses increased to $987,000 for the third quarter of 2015, up from a $1.4 million recapture in the third quarter 2014 and a $132,000 or 15% increase from $855,000 recorded in the second quarter 2015.  The third quarter provision is attributable to loan growth during the quarter and was also impacted by $655,000 related to a single purchased credit impaired loan performing below our initial expectations.  The allowance for loan losses for non-acquired loans was 1.11% of total loans, compared to 1.10% in the second quarter 2015.

Additional highlights include:

  • Nonperforming loans to total loans outstanding at the end of the third quarter was 0.8%, down from 1.4% at September 30, 2014;
  • Nonperforming assets to total assets declined to 0.7%, compared to 1.0% a year ago.

Capital Ratios Continue to Improve from Earnings Momentum
Capital ratios remain healthy and well above regulatory requirements for well-capitalized institutions.  The common equity tier 1 capital ratio (CET1) is estimated at 12.9% and the total capital ratio is estimated at 15.5% at September 30, 2015.  The tier 1 leverage ratio is estimated at 10.6% at September 30, 2015 compared to 10.1% at June 30, 2015.

Tangible book value increased $0.31 per share to $9.18 and book value per share increased $0.36 to $10.20 at September 30, 2015, versus the prior quarter.  Average tangible common equity to assets was a strong 9.40% for the third quarter 2015. 

Conference Call Information
Seacoast will host a conference call on Friday, October 23, 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 October 23, 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 October 23, 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 $3.4 billion in assets and $2.7 billion in deposits as of September 30, 2015. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 43 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: 

https://www08.wellsfargomedia.com/downloads/pdf/com/insights/economics/regional-reports/FL_Employment_09182015.pdf
http://www.fsfoa.org/documents/PNCMarketOutlook.pdf

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)


Third Quarter

 2015

Second Quarter

 2015

First Quarter

 2015

Fourth Quarter

 2014

Third Quarter

 2014








  

Net income


$4,441

$5,805

$5,859

($1,517)

$2,996

Severance


98

29

12

478

328

Merger related charges


2,692

337

275

2,722

399

Branch closure charges and costs related to expense initiatives


121

0

0

4,261

68

Marketing and brand refresh expense


0

0

0

697

0

Stock compensation expense and other incentive costs related to improved outlook


0

0

0

1,213

0

Security (gains)


(160)

0

0

(108)

(344)

Miscellaneous losses (gains)


112

0

0

119

(45)

Recovery of nonaccrual loan interest


0

0

0

0

(192)

Net loss on OREO and repossessed assets


262

53

81

9

156

Asset dispositions expense


77

173

143

103

139

Effective tax rate on adjustments


(1,210)

(225)

(193)

(3,798)

(219)

Adjusted Net Income (1)


6,433

6,172

6,177

4,179

3,286

Provision (recapture) for loan losses


987

855

433

118

(1,425)

Income taxes


3,908

3,788

3,732

3,167

2,480

Adjusted pretax, pre-provision income (1)


$11,328

$10,815

$10,342

$7,464

$4,341

Adjusted earnings per diluted share (1)


$0.19

$0.19

$0.19

$0.13

$0.13

Average shares outstanding (000)


34,194

33,234

33,136

33,124

26,026




(1)   Non-GAAP measure

 

 


FINANCIAL  HIGHLIGHTS



(Unaudited)








SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES





















(Dollars in thousands, except share data)

Three Months Ended


Nine Months Ended



September 30,


June 30,


September 30,


September 30,


September 30,



2015


2015


2014


2015


2014


Summary of Earnings











Net income

$           4,441


$         5,805


$         2,996


$         16,105


$         7,213


Net interest income  (1)

29,130


25,788


17,282


80,752


50,338


Net interest margin  (1), (2)

3.75


3.50


3.17


3.62


3.11











.


Performance Ratios











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

0.52

%

0.72

%

0.52

%

0.66

%

0.42

%

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

5.05


7.13


4.97


6.49


4.09


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

5.94


8.20


5.19


7.50


4.31


Efficiency ratio (5)

76.29


68.57


82.78


71.23


85.49


Noninterest income to total revenue

21.79


25.63


26.30


23.16


25.97













Per Share Data











Net income diluted-GAAP basis

$             0.13


$            0.18


$            0.12


$             0.48


$            0.28


Net income basic-GAAP basis

0.13


0.18


0.12


0.48


0.28


Book value per share common

10.20


9.84


9.07


10.20


9.07


Tangible book value per share

9.18


8.87


9.06


9.18


9.06


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.

(4)  The Company defines tangible common equity 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

















September 30,


June 30,


September 30,


(Dollars in thousands, except share data)

2015


2015


2014









Selected Financial Data







Total assets

$     3,378,108


$  3,233,588


$    2,361,813


Securities available for sale (at fair value)

728,161


762,086


601,541


Securities held for investment (at amortized cost)

209,047


214,777


176,724


Net loans

2,080,119


1,918,608


1,373,511


Deposits

2,742,296


2,605,177


1,808,550


Total shareholders' equity 

350,280


326,856


235,955









Average Balances (Year-to-Date)







Total average assets

$     3,250,855


$  3,188,334


$    2,299,291


Less: intangible assets

32,879


31,707


428


Total average tangible assets

$     3,217,976


$  3,156,627


$    2,298,863









Total average equity

$        331,966


$     323,359


$       235,837


Less: intangible assets

32,879


31,707


428


Total average tangible equity

$        299,087


$     291,652


$       235,409









Credit Analysis







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

$              (854)


$           (621)


$          (1,107)


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

872


189


-


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

$                  18


$           (432)


$          (1,107)









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

(0.06)

%

(0.07)

%

(0.11)

%

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

0.06


0.02


-


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

0.00


(0.05)


(0.11)









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

$             1,415


$             563


$          (3,604)


Loan loss provision year-to-date - acquired loans

860


725


-


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

$             2,275


$         1,288


$          (3,604)









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

1.11

%

1.10

%

1.26

%

Discount to acquired loans at end of period

4.13


3.32


-









Nonperforming loans - non-acquired loans

$           14,474


$       15,054


$         18,942


Nonperforming loans - acquired loans

2,636


4,543


-


Other real estate owned - non-acquired

4,183


4,855


5,018


Other real estate owned - acquired

3,250


1,053


-


Total nonperforming assets

$           24,543


$       25,505


$         23,960









Restructured loans (accruing)

$           20,543


$       23,441


$         28,969









Purchased noncredit impaired loans

$        347,262


$     275,964


$                  -


Purchased credit impaired loans

12,673


6,562


-


Total acquired loans

$        359,935


$     282,526


$                  -









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

0.69

%

0.78

%

1.36

%

Nonperforming loans to loans at end of period - acquired loans

0.12


0.23


-


Total nonperforming loans to loans at end of period

0.81


1.01


1.36









Nonperforming assets to total assets - non-acquired

0.55

%

0.62

%

1.01

%

Nonperforming assets to total assets - acquired

0.18


0.17


-


Total nonperforming assets to total assets

0.73


0.79


1.01























 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)







SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

















Three Months Ended


Nine Months Ended



September 30,


September 30,

(Dollars in thousands, except per share data)


2015


2014


2015


2014










Interest on securities:









     Taxable


$           5,154


$          3,657


$      15,029


$          10,720

     Nontaxable


144


8


441


29

Interest and fees on loans


25,276


14,615


69,285


42,516

Interest on federal funds sold and other investments


249


211


747


725

         Total Interest Income


30,823


18,491


85,502


53,990










Interest on deposits


562


189


1,487


567

Interest on time certificates


295


370


963


1,163

Interest on borrowed money


955


704


2,665


2,086

         Total Interest Expense


1,812


1,263


5,115


3,816










         Net Interest Income


29,011


17,228


80,387


50,174

Provision (recapture) for loan losses


987


(1,425)


2,275


(3,604)

         Net Interest Income After Provision for Loan Losses

28,024


18,653


78,112


53,778










Noninterest income:









     Service charges on deposit accounts


2,217


1,753


6,334


4,744

     Trust fees


781


817


2,341


2,191

     Mortgage banking fees


1,177


825


3,297


2,341

     Brokerage commissions and fees


604


408


1,621


1,197

     Marine finance fees


258


281


947


875

     Interchange income


1,925


1,452


5,695


4,369

     Other deposit based EFT fees


88


70


298


251

     BOLI income


366


0


1,030


0

     Gain on participated loan


0


0


725


0

     Other


666


543


1,948


1,635



8,082


6,149


24,236


17,603

     Securities gains, net


160


344


160


361

         Total Noninterest Income


8,242


6,493


24,396


17,964










Noninterest expenses:









     Salaries and wages


11,850


8,064


29,940


23,456

     Employee benefits


2,430


2,049


7,386


6,312

     Outsourced data processing costs


3,277


1,769


7,695


5,275

     Telephone / data lines


446


313


1,385


912

     Occupancy


2,396


1,879


6,430


5,605

     Furniture and equipment


883


628


2,434


1,803

     Marketing


1,099


925


3,300


2,413

     Legal and professional fees


2,189


1,103


5,442


4,316

     FDIC assessments


552


387


1,661


1,184

     Amortization of intangibles


397


195


1,027


587

     Asset dispositions expense


77


139


393


385

     Net loss on other real estate owned and repossessed assets

262


156


396


301

     Other


3,269


2,282


9,112


6,806

         Total Noninterest Expenses


29,127


19,889


76,601


59,355










         Income Before Income Taxes


7,139


5,257


25,907


12,387

Income taxes


2,698


2,261


9,802


5,174










         Net Income


$           4,441


$          2,996


$      16,105


$            7,213










Per share of common stock:


















     Net income diluted


$             0.13


$            0.12


$           0.48


$              0.28

     Net income basic


0.13


0.12


0.48


0.28

     Cash dividends declared


0.00


0.00


0.00


0.00










Average diluted shares outstanding


34,193,540


26,025,693


33,524,718


25,894,881

Average basic shares outstanding


33,907,178


25,887,591


33,286,933


25,736,140



















 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)







SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES




















QUARTER


2015


2014

(Dollars in thousands)

Third


Second


First


Fourth


Third











Interest on securities:










     Taxable

$        5,154


$            4,977


$        4,898


$        4,728


$        3,657

     Nontaxable

144


147


150


182


8

Interest and fees on loans

25,276


21,988


22,021


21,070


14,615

Interest on federal funds sold and other investments

249


249


249


292


211

         Total Interest Income

30,823


27,361


27,318


26,272


18,491











Interest on deposits

562


524


401


297


189

Interest on time certificates

295


321


347


375


370

Interest on borrowed money

955


850


860


867


704

         Total Interest Expense

1,812


1,695


1,608


1,539


1,263











         Net Interest Income

29,011


25,666


25,710


24,733


17,228

Provision (recapture) for loan losses

987


855


433


118


(1,425)

         Net Interest Income After Provision for Loan Losses

28,024


24,811


25,277


24,615


18,653











Noninterest income:










     Service charges on deposit accounts

2,217


2,115


2,002


2,208


1,753

     Trust fees

781


759


801


795


817

     Mortgage banking fees

1,177


1,032


1,088


716


825

     Brokerage commissions and fees

604


576


441


417


408

     Marine finance fees

258


492


197


445


281

     Interchange income

1,925


2,033


1,737


1,603


1,452

     Other deposit based EFT fees

88


96


114


92


70

     BOLI income

366


334


330


252


0

     Gain on participated loan

0


725


0


0


0

     Other

666


684


598


613


543


8,082


8,846


7,308


7,141


6,149

     Securities gains, net

160


0


0


108


344

         Total Noninterest Income

8,242


8,846


7,308


7,249


6,493











Noninterest expenses:










     Salaries and wages

11,850


9,301


8,789


11,676


8,064

     Employee benefits

2,430


2,541


2,415


2,461


2,049

     Outsourced data processing costs

3,277


2,234


2,184


3,506


1,769

     Telephone / data lines

446


443


496


419


313

     Occupancy

2,396


2,011


2,023


2,325


1,879

     Furniture and equipment

883


819


732


732


628

     Marketing

1,099


1,226


975


1,163


925

     Legal and professional fees

2,189


1,590


1,663


2,555


1,103

     FDIC assessments

552


520


589


476


387

     Amortization of intangibles

397


315


315


446


195

     Asset dispositions expense

77


173


143


103


139

     Branch closures and branding

0


0


0


4,958


0

     Net loss on other real estate owned and repossessed assets

262


53


81


9


156

     Other

3,269


3,062


2,781


3,182


2,282

         Total Noninterest Expenses

29,127


24,288


23,186


34,011


19,889











         Income Before Income Taxes

7,139


9,369


9,399


(2,147)


5,257

Income taxes

2,698


3,564


3,540


(630)


2,261











         Net Income

$        4,441


$            5,805


$        5,859


$      (1,517)


$        2,996











Per share of common stock:




















     Net income diluted

$           0.13


$               0.18


$          0.18


$        (0.05)


$          0.12

     Net income basic

0.13


0.18


0.18


(0.05)


0.12

     Cash dividends declared

0.00


0.00


0.00


0.00


0.00











Average diluted shares outstanding

34,193,540


33,233,508


33,135,618


33,123,525


26,025,693

Average basic shares outstanding

33,907,178


32,978,006


32,971,444


32,888,612


25,887,591





















 

CONDENSED CONSOLIDATED BALANCE SHEETS         

(Unaudited)





SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES












September 30,


December 31,


September 30,

(Dollars in thousands, except share data)

2015


2014


2014








Assets







   Cash and due from banks


$               69,650


$               64,411


$              39,934

   Interest bearing deposits with other banks

30,991


36,128


18,962

            Total  Cash and Cash Equivalents

100,641


100,539


58,896








   Securities:







        Available for sale (at fair value)

728,161


741,375


601,541

        Held for investment (at amortized cost)

209,047


207,904


176,724

            Total Securities


937,208


949,279


778,265








   Loans available for sale


16,738


12,078


18,484








   Loans, net of deferred costs


2,099,447


1,821,885


1,391,082

   Less: Allowance for loan losses


(19,328)


(17,071)


(17,571)

            Net Loans


2,080,119


1,804,814


1,373,511








   Bank premises and equipment, net


54,900


45,086


34,809

   Other real estate owned


7,433


7,462


5,018

   Other intangible assets


8,991


7,454


130

   Goodwill


25,864


25,309


0

   Bank owned life insurance


43,251


35,679


0

   Other assets


102,963


105,635


92,700



$          3,378,108


$          3,093,335


$        2,361,813








Liabilities and Shareholders' Equity






Liabilities







   Deposits







        Noninterest demand


$             869,877


$             725,238


$            522,001

        Interest-bearing demand


618,344


652,353


479,827

        Savings


286,810


264,738


215,076

        Money market


660,632


450,172


344,726

        Other time certificates


163,028


173,247


138,595

        Brokered time certificates


8,323


7,034


7,025

        Time certificates of $100,000 or more

135,282


143,752


101,300

            Total Deposits


2,742,296


2,416,534


1,808,550








   Federal funds purchased and securities sold under






       agreements to repurchase, maturing within 30 days

148,607


233,640


204,436

    Borrowed funds


50,000


50,000


50,000

    Subordinated debt


69,891


64,583


53,610

    Other liabilities


17,034


15,927


9,262



3,027,828


2,780,684


2,125,858








Shareholders' Equity







    Common stock


3,435


3,300


2,600

    Additional paid in capital


398,067


379,249


302,346

    Accumulated deficit


(48,894)


(65,000)


(63,482)

    Treasury stock


(38)


(71)


(216)



352,570


317,478


241,248

    Accumulated other comprehensive (loss), net

(2,290)


(4,827)


(5,293)

            Total Shareholders' Equity


350,280


312,651


235,955



$          3,378,108


$          3,093,335


$        2,361,813








Common Shares Outstanding


34,346,456


33,136,592


26,027,634








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)

Third


Second


First


Fourth


Third


Net income (loss)

$                     4,441


$              5,805


$               5,859


$           (1,517)


$              2,996













Operating Ratios











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

0.52

%

0.72

%

0.75

%

(0.20)

%

0.52

%

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

0.56


0.75


0.79


(0.16)


0.54


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

5.05


7.13


7.42


(1.89)


4.97


   Efficiency ratio (5)

76.29


68.57


68.33


104.46


82.78


   Noninterest income to total revenue

21.79


25.63


22.13


22.40


26.30













   Net interest margin (1),(2)

3.75


3.50


3.62


3.56


3.17


   Average equity to average assets

10.34


10.12


10.17


10.51


10.37













Credit Analysis Excluding Acquired Loans











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

$                      (233)


$               (358)


$                 (263)


$                618


$               (856)


   Net charge-offs - acquired loans

683


143


46


-


-


   Total net charge-offs (recoveries)

$                        450


$               (215)


$                 (217)


$                618


$               (856)













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

(0.04)

%

(0.08)

%

(0.06)

%

0.14

%

(0.25)

%

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

0.12


0.03


0.01


-


-


   Total net charge-offs (recoveries) to average loans

0.08


(0.05)


(0.05)


0.14


(0.25)













   Loan loss provision (recapture) - non-acquired loans

$                        852


$                 271


$                   292


$                  54


$            (1,425)


   Loan loss provision (recapture) - acquired loans

135


584


141


64


-


   Total loan loss provision (recapture)

$                        987


$                 855


$                   433


$                118


$            (1,425)













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

1.11

%

1.10

%

1.13

%

1.14

%

1.26

%

   Discount for credit losses to acquired loans at end of period

4.13


3.32


3.56


3.56


-













   Nonperforming loans - non-acquired loans

$                  14,474


$            15,054


$             16,860


$          18,563


$           18,942


   Nonperforming loans - acquired loans

2,636


4,543


4,196


2,577


-


   Other real estate owned - non-acquired

4,183


4,855


4,738


5,567


5,018


   Other real estate owned - acquired

3,250


1,053


1,431


1,895


-


   Total nonperforming assets

$                  24,543


$            25,505


$             27,225


$          28,602


$           23,960













  Restructured loans (accruing)

$                  20,543


$            23,441


$             23,847


$          24,997


$           28,969













  Purchased noncredit impaired loans

$                347,262


$          275,964


$           296,839


$        326,066


$                    -


  Purchased credit impaired loans

12,673


6,562


7,119


7,814


-


  Total acquired loans

$                359,935


$          282,526


$           303,958


$        333,880


$                    -













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

0.69

%

0.78

%

0.91

%

1.02

%

1.36

%

   Nonperforming loans to loans at end of period - acquired loans

0.12


0.23


0.23


0.14


-


   Total nonperforming loans to loans at end of period

0.81


1.01


1.14


1.16


1.36













   Nonperforming assets to total assets - non-acquired

0.55

%

0.62

%

0.67

%

0.78

%

1.01

%

   Nonperforming assets to total assets - acquired

0.18


0.17


0.17


0.14


-


   Total nonperforming assets to total assets

0.73


0.79


0.84


0.92


1.01













Per Share Common Stock











   Net income (loss) diluted-GAAP basis

$                       0.13


$                0.18


$                  0.18


$             (0.05)


$                0.12


   Net income (loss) basic-GAAP basis

0.13


0.18


0.18


(0.05)


0.12













   Cash dividends declared

0.00


0.00


0.00


0.00


0.00


   Book value per share common

10.20


9.84


9.71


9.44


9.07













Average Balances











Total average assets

$             3,373,858


$      3,225,127


$        3,151,132


$     3,037,061


$      2,305,799


Less: Intangible assets

35,185


32,188


31,221


33,803


237


Total average tangible assets

$             3,338,673


$      3,192,939


$        3,119,911


$     3,003,258


$      2,305,562













Total average equity

$                348,901


$          326,338


$           320,346


$        319,233


$         239,031


Less: Intangible assets

35,185


32,188


31,221


33,803


237


Total average tangible equity

$                313,716


$          294,150


$           289,125


$        285,430


$         238,794













(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).











































September 30,


December 31,


September 30,


SECURITIES





2015


2014


2014













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





$               3,929


$            3,899


$                 100


Mortgage-backed





488,803


587,933


473,681


Collateralized loan obligations





123,447


125,225


121,500


Obligations of states and political subdivisions





33,037


24,318


6,260


Corporates





32,155


0


0


CMBS





39,027


0


0


Other





7,763


0


0


   Securities Available for Sale





728,161


741,375


601,541













Mortgage-backed





167,747


182,076


176,724


Collateralized loan obligations





41,300


25,828


0


   Securities Held for Investment





209,047


207,904


176,724


       Total Securities





$           937,208


$        949,279


$         778,265








































September 30,


December 31,


September 30,


LOANS





2015


2014


2014













Construction and land development





$             96,036


$          87,036


$           57,851


Real estate mortgage





1,714,120


1,524,044


1,193,924


Installment loans to individuals





78,472


52,897


47,645


Commercial and financial





210,335


157,396


91,300


Other loans





484


512


362


       Total Loans





$        2,099,447


$     1,821,885


$      1,391,082



































 

 

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


(Unaudited)











SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


































2015


2014


Third Quarter


Second Quarter


Third Quarter


Average




Yield/


Average




Yield/


Average




Yield/

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate

Assets


















Earning assets:


















    Securities:


















         Taxable

$         966,764


$        5,154


2.13%


$       957,374


$      4,977


2.08%


$      698,274


$    3,656


2.09%

         Nontaxable

14,982


220


5.87


15,311


225


5.87


742


13


7.01

                   Total Securities

981,746


5,374


2.19


972,685


5,202


2.14


699,016


3,669


2.10



















    Federal funds sold and other


















         investments

42,083


249


2.35


79,031


249


1.26


98,711


211


0.85



















    Loans,  net

2,060,326


25,319


4.88


1,904,011


22,032


4.64


1,365,978


14,665


4.26



















                  Total Earning Assets

3,084,155


30,942


3.98


2,955,727


27,483


3.73


2,163,705


18,545


3.40



















Allowance for loan losses

(19,294)






(18,247)






(17,972)





Cash and due from banks

70,292






71,858






44,172





Premises and equipment

54,436






49,275






34,717





Intangible assets

35,185






32,188






237





Bank owned life insurance

41,934






36,111






0





Other assets

107,150






98,215






80,940
























$      3,373,858






$    3,225,127






$   2,305,799























Liabilities and Shareholders' Equity


















Interest-bearing liabilities:


















      Interest-bearing demand

$         621,365


$           116


0.07%


$       612,433


$         110


0.07%


$      489,138


$          91


0.07%

      Savings

285,410


39


0.05


279,354


41


0.06


212,479


24


0.04

      Money market

637,840


407


0.25


607,271


373


0.25


339,937


74


0.09

      Time deposits

308,184


295


0.38


303,802


321


0.42


252,179


370


0.58

      Federal funds purchased and


















        other short term borrowings

183,494


112


0.24


168,068


77


0.18


153,696


69


0.18

      Other borrowings

118,961


843


2.81


114,649


773


2.70


103,610


635


2.43



















                     Total Interest-Bearing Liabilities

2,155,254


1,812


0.33


2,085,577


1,695


0.33


1,551,039


1,263


0.32



















Noninterest demand

849,468






795,707






506,478





Other liabilities

20,235






17,505






9,251





                     Total Liabilities

3,024,957






2,898,789






2,066,768























Shareholders' equity

348,901






326,338






239,031
























$      3,373,858






$    3,225,127






$   2,305,799























Interest expense as a % of earning assets 





0.23%






0.23%






0.23%

Net interest income as a % of earning assets 



$      29,130


3.75%




$    25,788


3.50%




$  17,282


3.17%





































(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)


Third Quarter


Second Quarter


First Quarter


Fourth Quarter


Third Quarter













Customer Relationship Funding (Period End)










      Noninterest demand












Commercial


$            619,960


$           561,742


$         546,876


$          481,327


$         301,630


Retail


182,381


180,484


191,262


190,120


162,392


Public funds


47,765


47,913


38,529


41,201


39,329


Other


19,771


18,290


16,669


12,590


18,650




869,877


808,429