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Press Release

Seacoast Banking Reports First Quarter 2016 Results

Posts First Quarter Adjusted EPS of $0.19, Led by 4% Annualized Organic Household Growth, Increased Revenues, and Recent Acquisition Activity

Company Release - 4/28/2016 4:26 PM ET

STUART, Fla., April 28, 2016 /PRNewswire/ --

First Quarter 2016 Earnings Highlights

  • Adjusted revenues1 increased $5.9 million, or 18% year-over-year, to $38.9 million; and increased $2.0 million, or 5% (not annualized), from fourth quarter 2015 levels.
  • Net interest income improved $4.5 million, or 18% year-over-year, as organic loan growth was supplemented by successful acquisitions.
  • Net interest margin increased year-over-year and sequentially to 3.68%.
  • Adjusted net income1 increased 10% to $6.8 million compared to $6.2 million in the first quarter 2015.

First Quarter 2016 Growth Highlights

  • Integration of Floridian Financial Group, Inc. was successfully completed during March, 2016, adding 3,400 households and locations in the Orlando and Daytona Beach markets.
  • Seacoast continues to leverage organic growth capabilities in acquired franchises. BankFirst and Grand continue to show strong annualized growth of 7%, surpassing solid 4% growth rate for Seacoast's legacy franchise.
  • Core deposit growth continues to accelerate. Demand deposits grew 14% (not annualized) during the quarter, 7% excluding acquired deposits. Demand deposits represent more than 56% of total deposits and non-interest bearing checking accounts now comprise nearly 33% of deposits.

2016 Guidance

  • Seacoast reaffirms 2016 adjusted diluted EPS target of $1.00.

Seacoast Banking Corporation of Florida ("Seacoast" or "the Company") (NASDAQ: SBCF) today reported results for the first quarter of 2016. 

Seacoast Banking Corporation of Florida

Seacoast reported first quarter net income of $3.2 million, compared to $5.9 million in the first quarter last year. During the period, Seacoast closed the previously announced acquisition of Floridian Financial Group, Inc. and results for the quarter include $5.5 million in charges taken in conjunction with the acquisition.  Adjusted net income, including adjustments for Floridian expenses and other non-core items1 increased $605,000 to $6.8 million, a 10% increase from year-ago levels, and increased $262,000, or 4% (not annualized), from the prior quarter.  Diluted earnings per common share (EPS) were $0.09 and adjusted diluted EPS1 were $0.19, unchanged compared to the first quarter last year and the prior quarter. 

Dennis S. Hudson, III, Chairman and CEO said, "Our first quarter results demonstrate the impact of our digital transformation strategy, successful integration of recent acquisitions and disciplined loan growth. While our earnings were close to our expectations for the quarter, they do not fully reflect the profitability we expect over the balance of this year.  The near-term drivers for our anticipated improved earnings are cost reductions, primarily related to branch consolidations, as well as revenue improvement resulting from these acquisitions and continued strong organic growth. 

We expect to achieve a substantial portion of the cost savings from the integration of Floridian Bank and previously announced legacy branch consolidations during the second quarter.  The remaining cost savings from Floridian and substantially all of the synergies related to the BMO Harris integration will be realized during the third quarter. These in-market acquisitions, together with organic and acquisition-related revenue growth, are expected to drive substantial earnings improvements throughout the balance of the year.

At year end we anticipate that Seacoast's average deposits per branch network-wide will have increased to almost $80 million compared to $65 million at year end 2015.  This improvement in efficiency will be enabled, in part, by our ongoing digital transformation and is a meaningful part of our path to achieving our earnings target for 2016.

We will continue to implement our digital strategy, which is enabling us to add new households, both organically and in our recently acquired banks; driving cross sells of services to existing customers; and transforming our business model, by providing us with opportunities to reduce our more-expensive legacy cost structure.  Improvements this quarter include an increase in deposits made outside the branch to 31%, compared to 23% in the first quarter of 2015; an increase in consumer loans opened outside the branch to 19%, compared to 13% during the first quarter last year; and an increase in new deposit accounts opened outside the branch to 12%, compared to 5% in last year's first quarter. Customer satisfaction continued at high levels, showing our ability to move customers to lower-cost distribution channels while further building customer engagement," Hudson said. 

Hudson added, "We believe that continued execution of Seacoast's strategy, including investing in important initiatives, reducing expenses and executing on the right acquisition opportunities, will continue to produce improved results for shareholders.  We have affirmed our adjusted diluted earnings per share1 target of $1.00 for 2016."

 

FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share data)


1Q16

4Q15

3Q15

2Q15

1Q15








Total Assets


$4,000,543

$3,534,780

$3,378,108

$3,233,588

$3,231,956








Loans


2,455,214

2,156,330

2,099,447

1,937,399

1,854,487








Deposits


3,222,447

2,844,387

2,742,296

2,605,177

2,609,825








Net Income


3,186

6,036

4,441

5,805

5,859








Diluted Earnings Per Share   


0.09

0.18

0.13

0.18

0.18








Return on Average Assets (ROA)


0.36%

0.69%

0.52%

0.72%

0.75%

Return on Average Tangible
     
Common Equity (ROTCE)


4.2

7.8

5.9

8.2

8.5








Net Interest Margin


3.68

3.67

3.75

3.50

3.62

Efficiency Ratio


85.0

72.6

76.3

68.6

68.3








Pretax, Pre-provision Income (1)


$5,331

$10,130

$8,126

$10,224

$9,832

Average Diluted Shares
     Outstanding (000)


35,453

34,395

34,194

33,234

33,136

Adjusted Net Income (1)


$6,782

$6,520

$6,433

$6,172

$6,177

Adjusted Diluted Earnings
     
Per Share (1)


0.19

0.19

0.19

0.19

0.19








Adjusted ROA (1)


0.76%

0.75%

0.76%

0.77%

0.79%

Adjusted ROTCE (1)


8.5

8.4

8.5

8.7

9.0








Adjusted Efficiency Ratio (1)


69.9

69.1

68.2

67.5

67.5

Adjusted Pretax, Pre-provision
     
Income (1)


$11,120

$10,913

$11,328

$10,815

$10,342








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


3.08%

2.93%

3.03%

2.91%

2.88%








 

Acquisitions Update

Hudson noted, "We are pleased to have completed our acquisition and flawless conversion of Floridian late in the first quarter.  We now look forward to serving our new customers and expanded communities as we execute on savings opportunities, eliminating redundant functions and consolidating branch locations over the next six months.  Our customer service model, combining convenience with customer analytics technology, has enabled us to drive accelerated levels of cross sell and revenue while growing households at an even faster rate in our acquired markets.

"Our success in Orlando and Palm Beach counties, where we acquired BankFirst and Grand Bank, continues," Hudson stated.  "Household growth remains very strong and cross sell statistics outpace growth in our legacy markets.  Banking services for Grand and BankFirst customers increased at a 20% annualized rate compared to an 11% rate in our legacy franchise.

"As we welcome the new customers from Floridian, we look forward to completing our acquisition of BMO Harris' Orlando banking operations and welcoming more than 8,000 customers late in the second quarter of this year, subject to customary closing conditions.  This acquisition will further solidify our status in Orlando, propelling us to a top-10 position in this market," Hudson concluded.

Florida Economic Update

"The strong Florida economy continues to amplify our success," said Hudson.  "Florida's first quarter job growth, as reported by ADP, continues to outpace the nation.  Florida's job growth rate in the first quarter exceeded national growth rate by 50% (with Florida growing 3% vs. a 2% national rate), continuing recent strength in Florida job creation."

"Additionally, the Comerica Florida Economic Activity Index increased for the 22nd consecutive month in January. Almost all of the index components were positive for the month, indicating broad-based gains in the state economy. Only hotel occupancy dipped in January. The state economy is clearly accelerating and we expect to see ongoing growth for Florida over the remainder of this year…House prices and house construction are firming up. The state is also seeing increased net migration as baby boomer retirement increases. A recent Census Bureau report shows Florida metro areas among the fastest growing in the U.S."

First Quarter 2016 Income Statement Highlights

Organic Growth Drives Net Interest Income Increases, Merger Activity Portends Further Gains

Net interest income for the quarter totaled $30.3 million, a $4.5 million or 18% increase from first quarter 2015 levels.  Net interest margin expanded to 3.68%, a six basis point increase from the prior year.  Year-over-year net interest income and margin increases reflect successful organic growth combined with improved balance sheet mix.  Acquisition activity also contributed to net interest income gains as Seacoast welcomed customers from Floridian and continued to grow relationships with customers of other recent acquisitions.  These factors more than offset a decrease in excess purchased loan fee accretion recorded in the first quarter 2015 (approximately 9-10 basis points of excess margin).

Net interest income increased $1.1 million and net interest margin increased one basis point, from 3.67% in the prior quarter.  The improvement was built through continued growth and improved balance sheet mix, and offset the negative impact of a shorter number of days in the quarter.  Each day impacts net interest income by approximately $340,000.

Noninterest Income Growth Driven by Franchise Growth

Noninterest income excluding securities gains, totaled $8.6 million for the first quarter of 2016.  Included in this figure is $464,000 in unanticipated non-taxable income related to the Bank's investment in bank owned life insurance (BOLI). Excluding securities gains and unanticipated BOLI income, adjusted noninterest income1 was $8.2 million for the first quarter, an increase of $859,000 or 12% from the first quarter 2015.  Strong increases in interchange income and deposit service charges, up 28% and 6%, respectively, reflect intentional customer analytics-driven cross sell combined with strong household growth and customer engagement.  Analytics enabled cross sell has driven the number of households with debit cards from no growth in 2013 to more than 16% growth last year, excluding acquisitions.  Increases in trust and brokerage businesses offset decreases in marine and mortgage banking revenues.

Adjusted noninterest income increased $385,000 or 5% (not annualized) from fourth quarter 2015 levels.  Strength in interchange and trust and brokerage income contributed to this linked-quarter gain.    

Noninterest Expense Reflects Merger Activity and Other Investment in Seacoast Strategy

Noninterest expense increased $10.4 million from the first quarter of 2015, largely driven by $5.5 million in expense related to the acquisition of Floridian on March 11, 2016.  Adjusted noninterest expense1 increased $4.4 million from prior-year levels.  The year-over-year increase in adjusted expense reflects ongoing costs related to the 2015 acquisitions of FGC and Grand Bankshares.  Additionally, expenses reflect support of organic growth of and investment in the franchise.   Larger drivers include added salary and benefits related to additional headcount, largely from acquisition activity, decreased deferred loan origination costs and increased incentives.

Noninterest expense increased $6.4 million from the fourth quarter, 2015.  Excluding merger related charges and other one-time items, adjusted noninterest expense1 grew $1.3 million.  Increased salary and benefit costs ($1.4 million) were primarily related to the negative impact of typical first quarter seasonality, such as higher employer 401(k) matching costs, incentive-related costs and certain employer-paid taxes; as well as to decreased deferred origination costs.

Adjustments to expenses for the first quarter 2016 relate largely to the Floridian acquisition ($5.5 million) including plans to consolidate five locations over the next two quarters.  This acquisition will provide an IRR of near 20% or above and is immediately accretive to EPS, excluding transaction costs.  One time charges were also taken for the planned closing of four legacy Seacoast branches in slower-growth, central Florida ($0.7 million) which is expected to result in annual savings of approximately $1 million. 

First Quarter 2016 Balance Sheet Highlights

Strong Originations and Acquisition Activity Continue Loan Portfolio Build

Total loans were $2.46 billion at March 31, 2016, an increase of $601 million or 32% from a year ago.  Excluding acquired loans, loans increased $208 million or 11% from the prior year's first quarter.  Loans increased $299 million or 14% (not annualized) from fourth quarter levels.  Adjusted for the acquisition, loans increased $23 million or 1.9% from prior quarter levels, reflecting strong originations offset by sizable levels of pay downs during the first quarter.    

Despite a seasonally slow quarter, loan production continued a strong pace across all business lines.  Commercial loan originations for the quarter exceeded $67 million with the commercial pipeline (in underwriting and approval or approved and not yet closed) totaling $98 million at March 31, 2016, ahead of prior-year levels.  Consumer loan and small business originations (inclusive of lines of credit) totaled $53 million in the first quarter of 2016 compared to $39 million one year ago.

Closed residential production for the quarter totaled $67 million compared with $56 million during the first quarter 2015, with a total residential pipeline of $58 million at March 31, 2016 up from $49 million one year ago.

(Dollars in thousands)


1Q16

4Q15

3Q15

2Q15

1Q15








Commercial pipeline


$97,953

$105,556

$104,915

$108,538

$82,143

Commercial loans closed


67,252

80,003

71,823

85,815

61,357

Total Commercial loan originations and pipeline


$165,205

$185,559

$176,738

$194,353

$143,500








Residential pipeline


$57,739

$30,340

$37,958

$53,902

$48,485

Residential loans retained


36,335

24,905

36,027

45,596

23,951

Residential loans sold


30,345

35,278

37,996

36,182

31,896

Total Residential loan originations and pipeline


$124,419

$90,523

$111,981

$135,680

$104,332

 

Credit Quality Remains Stable and Strong

The provision for loan losses was $199,000 for the first quarter of 2016, down from $433,000 in the first quarter 2015 and $369,000 recorded in the fourth quarter 2015.  The decrease in provision was driven by strong credit metrics, including $397,000 in net recoveries collected during the quarter, partially offsetting the impact of continued loan growth. The ratio of allowance for loan losses to non-acquired loans rose to 1.04% as of March 31 2016, as slight increase from 1.03% as of December 31, 2015. 

Additional highlights include:

  • Nonperforming loans to total loans outstanding at the end of the first quarter decreased to 0.63%, down from 1.14% as of March 31, 2015;
  • Nonperforming assets to total assets also declined to 0.59%, compared to 0.84% one year ago.

Deposits Built on Core Customer Growth and Acquired Deposits and Reflect Seasonal Public Funds Trends

Total deposits increased 23% to $3.22 billion at March 31, 2016, from year ago levels.  Core customer funding increased to $3.06 billion at March 31, 2016, a $590 million, or 24% increase from the first quarter of 2015.  Excluding acquisitions, core customer funding increased by $176 million or 7% from one year ago and total deposits increased $100 million or 4% from one year ago.  Total deposits grew $378 million or 13% (not annualized) and core customer funding increased $336 million or 12% (not annualized) compared to the prior quarter.  Excluding acquired deposits, total deposits increased $54 million or 2% (not annualized) from fourth quarter levels.  First quarter 2016 deposit growth is impacted by a reduced focus on, and seasonal decreases in public fund balances, which decreased by $74 million during the quarter. 

Noninterest demand deposits grew $200 million or 23% from the fourth quarter of 2015 and $261 million or 33% from the first quarter of 2105.  Excluding acquired deposits, noninterest demand deposits increased $112 million, or 13% from the fourth quarter 2015.  Noninterest demand deposits increased to a strong 33% of total deposits.

(Dollars in thousands)


First

Quarter

2016

Fourth

Quarter

2015

Third
Quarter
2015

Second
Quarter

2015

First

Quarter

2015

Customer Relationship Funding







      Noninterest demand 


$  1,054,069

$  854,447

$  869,877

$  808,429

$  793,336

      Interest-bearing demand


750,904

734,749

618,344

599,268

634,854

      Money market


741,657

665,353

660,632

621,973

596,600

      Savings


313,179

295,851

286,810

282,588

272,963

      Time certificates of deposit


362,638

293,987

306,633

292,919

312,072

            Total deposits


$3,222,447

$2,844,387

$2,742,296

$2,605,177

$2,609,825

      Customer sweep accounts


$198,330

$172,005

$148,607

$157,676

$170,023

      Total core customer funding (2)


$ 3,058,139

$ 2,722,405

$ 2,584,270

$ 2,469,934

$ 2,467,776

  Demand deposit mix
     
(noninterest bearing)


32.7%

30.0%

31.7%

31.0%

30.4%

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

 

Other Highlights

Capital Ratios Remain Strong

Capital ratios remain healthy and well above regulatory requirements for well-capitalized institutions.  The common equity tier 1 capital ratio (CET1) is estimated at 12.0% and the total capital ratio is estimated at 14.6% at March 31, 2016.  The tier 1 leverage ratio is estimated at 10.9% at March 31, 2016.  Ratios are down slightly as earnings during the first quarter were offset by merger activity.

Tangible book value per share increased $0.41 to $9.15 while book value per share increased $1.18 to $10.89 compared to the first quarter of 2015.  Average tangible common equity to assets was a strong 9.4% at March 31, 2016. 

Conference Call Information 
Seacoast will host a conference call on Friday, April 29, 2016 at 10:00 a.m. (Eastern Time) to discuss the earnings results.  Investors may call in (toll-free) by dialing (800) 697-5978 (passcode: 7908 524). 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 April 29, by dialing (888) 843-7419 and using passcode: 7908 524.

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 April 29, 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.   

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

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 $4.0 billion in assets and $3.2 billion in deposits as of March 31, 2016. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 53 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 Daytona Beach area, into Orlando and Central Florida, and west to Okeechobee and surrounding counties. More information about the Company is available at SeacoastBanking.com.

Sources: 

http://blog.comerica.com/2016/03/29/comerica-banks-florida-index-sees-broad-based-gains/ 
http://www.adpemploymentreport.com

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,  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, or expect to acquire, 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, 2015, 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)

First Quarter

Fourth Quarter

Third Quarter

Second Quarter

First Quarter

2016

2015

2015

2015

2015








$3,186

$6,036

$4,441

$5,805

$5,859

Net income (loss)

Severance

306

187

98

29

12


5,307

1,043

2,692

337

275

Merger related charges

Bargain purchase gain

0

-416

0

0

0


691

0

0

0

0

Branch closure charges and costs related
to expense initiatives

Other

0

0

121

0

0

Security (gains)

-89

-1

-160

0

0

Miscellaneous losses

0

48

112

0

0

Net loss on OREO and repossessed assets

-51

-157

262

53

81

Asset dispositions expense

90

79

77

173

143

Boli Income

-464

0

0

0

0

Effective tax rate on adjustments

-2,194

-299

-1,210

-225

-193


6,782

6,520

6,433

6,172

6,177

Adjusted Net Income (1)

Provision for loan losses

199

369

987

855

433

Income taxes

4,139

4,024

3,908

3,788

3,732

Adjusted pretax, pre-provision income (1)

$11,120

$10,913

$11,328

$10,815

$10,342

Adjusted earnings per diluted share (1)

$0.19

$0.19

$0.19

$0.19

$0.19

Average shares outstanding (000)

35,453

34,395

34,194

33,234

33,136







 


 

FINANCIAL  HIGHLIGHTS 



(Unaudited)


04/26/16


SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES














(Dollars in thousands, except share data)

Three Months Ended



March 31,


December 31,


March 31,



2016


2015


2015


Summary of Earnings







Net income

$             3,186


$         6,036


$           5,859


Net interest income  (1)

30,349


29,216


25,834


Net interest margin  (1), (2)

3.68


3.67


3.62









Performance Ratios







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

0.36

%

0.69

%

0.75

%

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

3.46


6.78


7.42


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

4.19


7.83


8.51


Efficiency ratio (5)

84.98


72.57


68.33


Noninterest income to total revenue

22.21


21.10


22.13









Per Share Data







Net income diluted-GAAP basis

$0.09


$            0.18


$              0.18


Net income basic-GAAP basis

0.09


0.18


0.18


Book value per share common

10.89


10.29


9.71


Tangible book value per share

9.15


9.31


8.74


Cash dividends declared

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 and bargain purchase 

      gain, net).















FINANCIAL  HIGHLIGHTS 







SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES


















March 31,


December 31,


March 31,


(Dollars in thousands, except share data)

2016


2015


2015









Selected Financial Data







Total assets 

$     4,000,543


$  3,534,780


$    3,231,956


Securities available for sale (at fair value)

905,182


790,766


730,232


Securities held for investment (at amortized cost)

198,231


203,525


223,061


Net loans

2,435,490


2,137,202


1,836,766


Deposits 

3,222,447


2,844,387


2,609,825


Total shareholders' equity  

413,008


353,453


321,844









Average Balances (Year-to-Date)







Total average assets

$     3,601,381


$  3,304,397


$    3,151,132


Less: intangible assets

37,006


33,277


31,221


Total average tangible assets

$     3,564,375


$  3,271,120


$    3,119,911









Total average equity

$        370,816


$     337,367


$       320,346


Less: intangible assets

37,006


33,277


31,221


Total average tangible equity

$        333,810


$     304,090


$       289,125









Credit Analysis







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

$              (539)


$           (609)


$             (263)


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

142


1,196


46


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

$              (397)


$             587


$             (217)









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

(0.10)

%

(0.03)

%

(0.06)

%

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

0.03


0.06


0.01


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

(0.07)


0.03


(0.05)









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

$                (20)


$         1,375


$               292


Loan loss provision year-to-date - acquired loans

219


1,269


141


Total loan loss provision year-to-date

$                199


$         2,644


$               433









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

1.04

%

1.03

%

1.13

%

Discount for credit losses to acquired loans at end of period

3.79


4.24


3.56









Nonperforming loans - non-acquired loans

$           11,881


$       12,758


$         16,860


Nonperforming loans - acquired loans

3,707


4,628


4,196


Other real estate owned - non-acquired 

5,676


3,699


4,738


Other real estate owned - acquired 

2,415


3,340


1,431


Total nonperforming assets 

$           23,679


$       24,425


$         27,225









Restructured loans (accruing)

$           19,956


$       19,970


$         23,847









Purchased noncredit impaired loans

$        558,262


$     320,349


$       293,124


Purchased credit impaired loans

16,531


12,109


7,119


Total acquired loans

$        574,793


$     332,458


$       300,243









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

0.48

%

0.59

%

0.91

%

Nonperforming loans to loans at end of period - acquired loans

0.15


0.22


0.23


Total nonperforming loans to loans at end of period

0.63


0.81


1.14









Nonperforming assets to total assets - non-acquired 

0.44

%

0.47

%

0.67

%

Nonperforming assets to total assets - acquired 

0.15


0.22


0.17


Total nonperforming assets to total assets

0.59


0.69


0.84























 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)



SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES











Three Months Ended



March 31,

(Dollars in thousands, except per share data)


2016


2015






Interest on securities:





     Taxable


$           5,683


$          4,898

     Nontaxable


164


150

Interest and fees on loans


26,034


22,021

Interest on federal funds sold and other investments


290


249

         Total Interest Income


32,171


27,318






Interest on deposits


604


401

Interest on time certificates


313


347

Interest on borrowed money


1,032


860

         Total Interest Expense


1,949


1,608






         Net Interest Income


30,222


25,710

Provision for loan losses


199


433

         Net Interest Income After Provision for Loan Losses


30,023


25,277






Noninterest income:





     Service charges on deposit accounts


2,129


2,002

     Trust fees


806


801

     Mortgage banking fees


999


1,088

     Brokerage commissions and fees


631


441

     Marine finance fees


141


197

     Interchange income


2,217


1,737

     Other deposit based EFT fees


127


114

     BOLI income


841


330

     Other


739


598



8,630


7,308

     Securities gains, net


89


0

         Total Noninterest Income


8,719


7,308






Noninterest expenses:





     Salaries and wages


14,668


8,789

     Employee benefits


2,482


2,415

     Outsourced data processing costs


4,439


2,184

     Telephone / data lines


528


496

     Occupancy 


2,972


2,023

     Furniture and equipment 


998


732

     Marketing 


1,049


975

     Legal and professional fees


2,357


1,663

     FDIC assessments


544


589

     Amortization of intangibles


446


315

     Asset dispositions expense


90


143

     Net (gain)/loss on other real estate owned and repossessed assets


(51)


81

     Other 


3,088


2,781

         Total Noninterest Expenses


33,610


23,186






         Income Before Income Taxes


5,132


9,399

Income taxes


1,946


3,540






         Net Income


$           3,186


$          5,859






Per share of common stock:










     Net income diluted


$             0.09


$            0.18

     Net income basic


0.09


0.18

     Cash dividends declared


0.00


0.00






Average diluted shares outstanding


35,452,968


33,135,618

Average basic shares outstanding


34,848,875


32,971,444











 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)



SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
















QUARTER


2016


2015

(Dollars in thousands)

First


Fourth


Third


Second


First











Interest on securities:










     Taxable

$        5,683


$            5,312


$        5,154


$        4,977


$        4,898

     Nontaxable

164


144


144


147


150

Interest and fees on loans

26,034


25,184


25,276


21,988


22,021

Interest on federal funds sold and other investments

290


275


249


249


249

         Total Interest Income

32,171


30,915


30,823


27,361


27,318











Interest on deposits

604


598


562


524


401

Interest on time certificates

313


265


295


321


347

Interest on borrowed money

1,032


952


955


850


860

         Total Interest Expense

1,949


1,815


1,812


1,695


1,608











         Net Interest Income

30,222


29,100


29,011


25,666


25,710

Provision for loan losses

199


369


987


855


433

         Net Interest Income After Provision for Loan Losses

30,023


28,731


28,024


24,811


25,277











Noninterest income:










     Service charges on deposit accounts

2,129


2,229


2,217


2,115


2,002

     Trust fees

806


791


781


759


801

     Mortgage banking fees

999


955


1,177


1,032


1,088

     Brokerage commissions and fees

631


511


604


576


441

     Marine finance fees

141


205


258


492


197

     Interchange income

2,217


1,989


1,925


2,033


1,737

     Other deposit based EFT fees

127


99


88


96


114

     BOLI income

841


396


366


334


330

     Gain on participated loan

0


0


0


725


0

     Other

739


607


666


684


598


8,630


7,782


8,082


8,846


7,308

     Securities gains, net

89


1


160


0


0

     Bargain purchase gain, net

0


416


0


0


0

         Total Noninterest Income

8,719


8,199


8,242


8,846


7,308











Noninterest expenses:










     Salaries and wages

14,668


11,135


11,850


9,301


8,789

     Employee benefits

2,482


2,178


2,430


2,541


2,415

     Outsourced data processing costs

4,439


2,455


3,277


2,234


2,184

     Telephone / data lines

528


412


446


443


496

     Occupancy 

2,972


2,314


2,396


2,011


2,023

     Furniture and equipment 

998


1,000


883


819


732

     Marketing 

1,049


1,128


1,099


1,226


975

     Legal and professional fees

2,357


2,580


2,189


1,590


1,663

     FDIC assessments

544


551


552


520


589

     Amortization of intangibles

446


397


397


315


315

     Asset dispositions expense

90


79


77


173


143

     Net (gain)/loss on other real estate owned and repossessed assets

(51)


(157)


262


53


81

     Other 

3,088


3,097


3,269


3,062


2,781

         Total Noninterest Expenses

33,610


27,169


29,127


24,288


23,186











         Income Before Income Taxes

5,132


9,761


7,139


9,369


9,399

Income taxes

1,946


3,725


2,698


3,564


3,540











         Net Income

$        3,186


$            6,036


$        4,441


$        5,805


$        5,859











Per share of common stock:




















     Net income diluted

$           0.09


$               0.18


$          0.13


$          0.18


$          0.18

     Net income basic

0.09


0.18


0.13


0.18


0.18

     Cash dividends declared

0.00


0.00


0.00


0.00


0.00











Average diluted shares outstanding

35,452,968


34,395,373


34,193,540


33,233,508


33,135,618

Average basic shares outstanding

34,848,875


34,115,697


33,907,178


32,978,006


32,971,444





















 

CONDENSED CONSOLIDATED BALANCE SHEETS          


(Unaudited)



SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES














March 31,


December 31,


March 31,

(Dollars in thousands, except share data)

2016


2015


2015








Assets







   Cash and due from banks


$             113,178


$               81,216


$               65,097

   Interest bearing deposits with other banks

35,450


54,851


134,832

            Total  Cash and Cash Equivalents

148,628


136,067


199,929








   Securities:







        Available for sale (at fair value)

905,182


790,766


730,232

        Held for investment (at amortized cost)

198,231


203,525


223,061

            Total Securities 


1,103,413


994,291


953,293








   Loans held for sale


19,867


23,998


18,851








   Loans


2,455,214


2,156,330


1,854,487

   Less: Allowance for loan losses


(19,724)


(19,128)


(17,721)

            Net Loans


2,435,490


2,137,202


1,836,766








   Bank premises and equipment, net


61,416


54,579


48,189

   Other real estate owned


8,091


7,039


6,169

   Goodwill


54,416


25,211


25,222

   Other intangible assets


11,524


8,594


7,139

   Bank owned life insurance


43,417


43,579


35,983

   Net deferred tax assets


67,049


60,274


61,467

   Other assets


47,232


43,946


38,948



$          4,000,543


$          3,534,780


$          3,231,956








Liabilities and Shareholders' Equity






Liabilities







   Deposits







        Noninterest demand


$          1,054,069


$             854,447


$             793,336

        Interest-bearing demand


750,904


734,749


634,854

        Savings


313,179


295,851


272,963

        Money market


741,657


665,353


596,600

        Other time certificates


164,388


153,318


166,905

        Brokered time certificates


11,062


9,403


7,985

        Time certificates of $100,000 or more

187,188


131,266


137,182

            Total Deposits


3,222,447


2,844,387


2,609,825








   Federal funds purchased and securities sold under






       agreements to repurchase, maturing within 30 days

198,330


172,005


170,023

    Borrowed funds


50,000


50,000


50,000

    Subordinated debt


70,031


69,961


64,627

    Other liabilities


46,727


44,974


15,637



3,587,535


3,181,327


2,910,112








Shareholders' Equity







    Common stock


3,792


3,435


3,300

    Additional paid in capital


450,389


399,162


379,740

    Accumulated deficit


(39,672)


(42,858)


(59,140)

    Treasury stock


(88)


(73)


(83)



414,421


359,666


323,817

    Accumulated other comprehensive (loss), net

(1,413)


(6,213)


(1,973)

            Total Shareholders' Equity


413,008


353,453


321,844



$          4,000,543


$          3,534,780


$          3,231,956








Common Shares Outstanding


37,922,250


34,351,409


33,136,152








Note:  The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date.


 

CONSOLIDATED QUARTERLY FINANCIAL  DATA


(Unaudited)






SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES




















QUARTERS


2016


2015

(Dollars in thousands, except per share data)

First


Fourth


Third


Second


First


Net income

$                     3,186


$              6,036


$               4,441


$            5,805


$              5,859













Operating Ratios











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

0.36

%

0.69

%

0.52

%

0.72

%

0.75

%

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

0.39


0.73


0.56


0.75


0.79


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

3.46


6.78


5.05


7.13


7.42


   Efficiency ratio (5)

84.98


72.57


76.29


68.57


68.33


   Noninterest income to total revenue

22.21


21.10


21.79


25.63


22.13













   Net interest margin (1),(2)

3.68


3.67


3.75


3.50


3.62


   Average equity to average assets

10.30


10.20


10.34


10.12


10.17













Credit Analysis Excluding Acquired Loans











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

$                      (539)


$                 245


$                 (233)


$              (358)


$               (263)


   Net charge-offs - acquired loans

142


324


683


143


46


   Total net charge-offs (recoveries)

$                      (397)


$                 569


$                   450


$              (215)


$               (217)













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

(0.10)

%

0.05

%

(0.04)

%

(0.08)

%

(0.06)

%

   Net charge-offs to average loans - acquired loans

0.03


0.06


0.12


0.03


0.01


   Total net charge-offs (recoveries) to average loans

(0.07)


0.11


0.08


(0.05)


(0.05)













   Loan loss provision (recapture) - non-acquired loans

$                        (20)


$                  (40)


$                   852


$                271


$                 292


   Loan loss provision - acquired loans

219


409


135


584


141


   Total loan loss provision 

$                        199


$                 369


$                   987


$                855


$                 433













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

1.04

%

1.03

%

1.11

%

1.10

%

1.13

%

   Discount for credit losses to acquired loans at end of period

3.79


4.24


4.13


3.32


3.56













   Nonperforming loans - non-acquired loans

$                  11,881


$            12,758


$             14,474


$          15,054


$           16,860


   Nonperforming loans - acquired loans

3,707


4,628


2,636


4,543


4,196


   Other real estate owned - non-acquired

5,676


3,699


4,183


4,855


4,738


   Other real estate owned - acquired

2,415


3,340


3,250


1,053


1,431


   Total nonperforming assets

$                  23,679


$            24,425


$             24,543


$          25,505


$           27,225













  Restructured loans (accruing)

$                  19,956


$            19,970


$             20,543


$          23,441


$           23,847













  Purchased noncredit impaired loans

$                558,262


$          320,349


$           355,739


$        284,978


$         293,124


  Purchased credit impaired loans

16,531


12,109


12,673


6,562


7,119


  Total acquired loans

$                574,793


$          332,458


$           368,412


$        291,540


$         300,243













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

0.48

%

0.59

%

0.69

%

0.78

%

0.91

%

   Nonperforming loans to loans at end of period - acquired loans

0.15


0.22


0.12


0.23


0.23


   Total nonperforming loans to loans at end of period

0.63


0.81


0.81


1.01


1.14













   Nonperforming assets to total assets - non-acquired

0.44

%

0.47

%

0.55

%

0.62

%

0.67

%

   Nonperforming assets to total assets - acquired

0.15


0.22


0.18


0.17


0.17


   Total nonperforming assets to total assets

0.59


0.69


0.73


0.79


0.84













Per Share Common Stock











   Net income diluted-GAAP basis

$                       0.09


$                0.18


$                  0.13


$               0.18


$                0.18


   Net income basic-GAAP basis

0.09


0.18


0.13


0.18


0.18













   Cash dividends declared

0.00


0.00


0.00


0.00


0.00


   Book value per share common

10.89


10.29


10.20


9.84


9.71













Average Balances











Total average assets

$             3,601,381


$      3,463,277


$        3,373,858


$     3,225,127


$      3,151,132


Less: Intangible assets

37,006


34,457


35,185


32,188


31,221


Total average tangible assets

$             3,564,375


$      3,428,820


$        3,338,673


$     3,192,939


$      3,119,911













Total average equity

$                370,816


$          353,392


$           348,901


$        326,338


$         320,346


Less: Intangible assets

37,006


34,457


35,185


32,188


31,221


Total average tangible equity

$                333,810


$          318,935


$           313,716


$        294,150


$         289,125













(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 and bargain purchase gain, net).











































March 31,


December 31,


March 31,


SECURITIES 





2016


2015


2015













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





$                13,998


$            3,911


$                3,863


Mortgage-backed





620,840


539,688


575,905


Collateralized loan obligations





121,168


122,583


126,376


Obligations of states and political subdivisions





59,520


39,891


24,088


Corporate and other debt securities





46,172


44,273


0


Private commercial mortgage backed securities





43,484


40,420


0


   Securities Available for Sale





905,182


790,766


730,232













Mortgage-backed





156,842


162,225


181,762


Collateralized loan obligations





41,389


41,300


41,299


   Securities Held for Investment





198,231


203,525


223,061


       Total Securities





$          1,103,413


$        994,291


$          953,293








































March 31,


December 31,


March 31,


LOANS





2016


2015


2015













Construction and land development





$            147,594


$        108,787


$          100,341


Real estate mortgage





1,934,194


1,733,163


1,532,522


Installment loans to individuals





95,183


85,356


57,239


Commercial and financial





277,775


228,517


164,050


Other loans





468


507


335


       Total Loans





$         2,455,214


$     2,156,330


$       1,854,487
























 

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


(Unaudited)











SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


































2016


2015


First Quarter


Fourth Quarter


First Quarter


Average




Yield/


Average




Yield/


Average




Yield/

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate

Assets


















Earning assets:


















    Securities:


















         Taxable

$         996,301


$        5,683


2.28%


$       924,730


$      5,312


2.30%


$      939,015


$    4,898


2.09%

         Nontaxable 

17,929


251


5.60


14,932


220


5.89


15,617


230


5.89

                   Total Securities

1,014,230


5,934


2.34


939,662


5,532


2.35


954,632


5,128


2.15



















    Federal funds sold and other


















         investments

52,213


290


2.23


93,728


275


1.16


92,934


249


1.09



















    Loans,  net

2,246,773


26,074


4.67


2,121,053


25,224


4.72


1,848,965


22,065


4.84



















                  Total Earning Assets

3,313,216


32,298


3.92


3,154,442


31,031


3.90


2,896,531


27,442


3.84



















Allowance for loan losses

(19,558)






(19,940)






(17,385)





Cash and due from banks

81,947






85,951






63,689





Premises and equipment

57,062






55,139






46,605





Intangible assets

37,006






34,457






31,221





Bank owned life insurance

43,647






43,419






35,793





Other assets

88,061






109,809






94,678
























$      3,601,381






$    3,463,277






$   3,151,132























Liabilities and Shareholders' Equity


















Interest-bearing liabilities:


















      Interest-bearing demand

$         710,083


$           155


0.09%


$       666,640


$         129


0.08%


$      628,480


$        117


0.08%

      Savings

303,207


37


0.05


292,761


39


0.05


268,041


39


0.06

      Money market

667,466


412


0.25


664,512


430


0.26


519,526


245


0.19

      Time deposits

304,401


313


0.41


299,189


265


0.35


318,343


347


0.44

      Federal funds purchased and 


















        other short term borrowings

193,036


135


0.28


168,444


89


0.21


212,123


98


0.19

      Other borrowings

119,987


897


3.01


119,927


863


2.85


114,606


762


2.70



















                     Total Interest-Bearing Liabilities

2,298,180


1,949


0.34


2,211,473


1,815


0.33


2,061,119


1,608


0.32



















Noninterest demand

906,231






878,709






753,620





Other liabilities

26,154






19,703






16,047





                     Total Liabilities 

3,230,565






3,109,885






2,830,786























Shareholders' equity

370,816






353,392






320,346
























$      3,601,381






$    3,463,277






$   3,151,132























Interest expense as a % of earning assets  





0.24%






0.23%






0.23%

Net interest income as a % of earning assets  



$      30,349


3.68%




$    29,216


3.67%




$  25,834


3.62%





































(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






















2016


2015

(Dollars in thousands)


First Quarter


Fourth Quarter


Third Quarter


Second Quarter


First Quarter













Customer Relationship Funding (Period End)










      Noninterest demand












Commercial


$            768,890


$           592,621


$         619,960


$          561,742


$         546,876


Retail


212,367


198,077


182,381


180,484


191,262


Public funds


52,244


46,300


47,765


47,913


38,529


Other


20,568


17,449


19,771


18,290


16,669




1,054,069


854,447


869,877


808,429


793,336













      Interest-bearing demand












Commercial


101,767


77,500


69,037


60,411


66,532


Retail


496,846


479,056


443,022


410,601


416,766


Public funds


152,291


178,193


106,285


128,256


151,556




750,904


734,749


618,344


599,268


634,854













      Total transaction accounts












Commercial


870,657


670,121


688,997


622,153


613,408


Retail


709,213


677,133


625,403


591,085


608,028


Public funds


204,535


224,493


154,050


176,169


190,085


Other


20,568


17,449


19,771


18,290


16,669




1,804,973


1,589,196


1,488,221


1,407,697


1,428,190













      Savings


313,179


295,851


286,810


282,588


272,963













      Money market












Commercial


271,567


208,520


225,629


191,061


185,668


Retail


380,233


312,756


306,138


272,853


274,203


Public funds


89,857


144,077


128,865


158,059


136,729




741,657


665,353


660,632


621,973


596,600













      Time certificates of deposit


362,638


293,987


306,633


292,919


312,072

            Total Deposits


$         3,222,447


$        2,844,387


$      2,742,296


$       2,605,177


$      2,609,825













      Customer sweep accounts


$            198,330


$           172,005


$         148,607


$          157,676


$         170,023













      Total core customer funding (1)


$         3,058,139


$        2,722,405


$      2,584,270


$       2,469,934


$      2,467,776

























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

 

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SOURCE Seacoast Banking Corporation of Florida