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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] Annual Report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended Commission File DECEMBER 31, 2000 No. 0-13660
SEACOAST BANKING CORPORATION OF FLORIDA
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(Exact name of registrant as specified in its charter)
Florida 59-2260678
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(State or other jurisdiction of (IRS employer
incorporation or organization) identification number)
815 Colorado Avenue, Stuart, FL 34994
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(Address of principal executive offices) (Zip code)
(561) 287-4000
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(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (g) of the Act:
Class A Common Stock, Par Value $.10
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 7, 2001:
CLASS A COMMON STOCK, $.10 par value - $128,008,792 based upon the closing sale
price on March 7, 2001, using beneficial ownership stock rules adopted pursuant
to Section 13 of the Securities Exchange Act of 1934, to exclude voting stock
owned by directors and certain executive officers, some of whom may not be held
to be affiliates upon judicial determination.
CLASS B COMMON STOCK, $.10 par value - $10,559,526 based upon the closing sale
price on March 7, 2001, of the Class A Common Stock, $.10 par value, into which
each share of Class B Common Stock, $.10 par value, is immediately convertible
on a one-for-one basis, using beneficial ownership stock rules adopted pursuant
to Section 13 of the Securities Exchange Act of 1934, to exclude voting stock
owned by directors and certain executive officers, some of whom may not be held
to be affiliates upon judicial determination.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of March 7, 2001:
Class A Common Stock, $.10 Par Value - 4,348,494 shares
Class B Common Stock, $.10 Par Value - 358,710 shares
Documents Incorporated by Reference:
1. Certain portions of the registrant's 2001 Proxy Statement for the Annual
Meeting of Shareholders to be held April 19, 2001 ("2001 Proxy Statement")
are incorporated by reference into Part III, Items 10 through 13. Other
than those portions of the 2001 Proxy Statement specifically incorporated
by reference herein pursuant to Items 10 through 13, no other portions of
the 2001 Proxy Statement shall be deemed so incorporated.
2. Certain portions of the registrant's 2000 Annual Report to Shareholders
(the "2000 Annual Report") are incorporated by reference in Part II, Items
6 through 8 and Item 14. Other than these portions of the 2000 Annual
Report specifically incorporated by reference herein pursuant to Items 6
through 8 and Item 14, no other portions of the 2000 Annual Report shall
be deemed so incorporated.
FORM 10-K CROSS-REFERENCE INDEX
Page of
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Form Annual
10-K Report
Part I
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Item 1. Business 1-12 --
Item 2. Properties 12-17 --
Item 3. Legal Proceedings 16 --
Item 4. Submission of Matters to a
Vote of Security-Holders 16 --
Part II
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Item 5. Market Price of and Dividends on the
Registrant's Common Equity and
Related Stockholder Matters 17-18 29
Item 6. Selected Financial Data 18 3
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 18 16-28
Item 7A. Market Risk 19-20 25
Item 8. Financial Statements and 20 29-31
Supplementary Data & 33-47
Item 9. Changes in and Disagreements With
Accountants on Accounting and
Financial Disclosure 20 --
Page of
-------
Form
10-K Proxy
Part III
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Item 10. Directors and Executive Officers 21 3-8
of the Registrant
Item 11. Executive Compensation 21 8-16
Item 12. Security Ownership of Certain 21 3-7
Beneficial Owners and Management & 16-17
Item 13. Certain Relationships and Related 21 16-17
Transactions
Page of
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Form Annual
10-K Report
Part IV
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Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K
(a)(1) List of All Financial Statements 22
Consolidated Balance Sheets as
of December 31, 2000 and 1999 -- 35
Consolidated Statements of Income
for the years ended December 31,
2000, 1999 and 1998 -- 34
Consolidated Statements of Shareholders'
Equity for the years ended December 31,
2000, 1999 and 1998 -- 37
Consolidated Statements of Cash Flows
for the years ended December 31,
2000, 1999, and 1998 -- 36,46
Notes to Consolidated Financial
Statements -- 38-47
Report of Independent Certified
Public Accountants -- 33
(a)(2) List of Financial Statement Schedules 22 --
(a)(3) List of Exhibits 22-24 --
(b) Reports on Form 8-K 24 --
(c) Exhibits 24 --
(d) Financial Statement Schedules 24 --
SPECIAL CAUTIONARY NOTICE
REGARDING FORWARD LOOKING STATEMENTS
Certain of the statements made herein under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and elsewhere
herein or in any information incorporated herein by reference to other documents
are forward-looking statements for purposes of the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Seacoast Banking Corporation of Florida ("Seacoast" or the
"Company") to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. Such
forward-looking statements include statements using the words such as "may",
"will", "anticipate", "should", "would", "believe", "contemplate", "expect",
"estimate", "continue", "may", "intend" or other similar words and expressions
of the future.
These forward-looking statements involve risks and uncertainties, and may not be
realized due to a variety of factors, including, without limitation: the effects
of future economic conditions; governmental monetary and fiscal policies, as
well as legislative and regulatory changes; the risks of changes in interest
rates on the level and composition of deposits, loan demand, and the values of
loan collateral, securities, and interest sensitive assets and liabilities;
interest rate risks; 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 the Company's market area
and elsewhere, including institutions operating regionally, nationally and
internationally, together with such competitors offering banking products and
services by mail, telephone, computer and the Internet; and the failure of
assumptions underlying the establishment of reserves for possible loan losses.
All written or oral forward looking statements attributable to the Company are
expressly qualified in their entirety by this Cautionary Notice.
Part I
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Item 1. Business
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General
Seacoast is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended ("BHC Act"). Seacoast was incorporated
under the laws of the State of Florida on January 24, 1983, by the
management of its principal subsidiary, First National Bank and Trust
Company of the Treasure Coast (the "Bank"), for the purpose of becoming a
holding company for the Bank. On December 30, 1983, Seacoast acquired all
of the outstanding shares of the common stock of the Bank in exchange for
810,000 shares of its $.10 par value Class A common stock ("Class A Common
Stock") and 810,000 shares of its $.10 par value Class B common stock
("Class B Common Stock").
The Bank commenced operations in 1933 under the name "Citizens Bank of
Stuart" pursuant to a charter originally granted by the State of Florida in
1926. The Bank converted to a national banking association on August 29,
1958.
Through the Bank and its broker-dealer subsidiary, Seacoast offers a full
array of deposit accounts and retail banking services, engages in consumer
and commercial lending and provides a wide variety of trust and asset
management services, as well as securities and annuity products. Seacoast's
primary service area is the "Treasure Coast", which, as defined by
Seacoast, consists of the counties of Martin, St. Lucie and Indian River on
Florida's southeastern coast. The Bank operates banking offices in the
following cities: five in Stuart, two in Palm City, two in Jensen Beach,
two on Hutchinson Island, one in Hobe Sound, four in Vero Beach, two in
Sebastian, five in Port St. Lucie, and one in Ft. Pierce.
Most of the banking offices have one or more Automatic Teller Machines
(ATM) which provide customers with 24-hour access to their deposit
accounts. Seacoast is a member of the "Star System", the largest electronic
funds transfer organization in the United States, which permits banking
customers access to their accounts at over 180,000 locations throughout the
United States.
Customers can also use the Bank's "MoneyPhone" system to access information
on their loan or deposit account balances, to transfer funds between linked
accounts, to make loan payments, and to verify deposits or checks that may
have cleared. This service is accessible by phone 24 hours a day, seven
days a week.
In addition, customers may access information via the Bank's Telephone
Banking Center ("TBC"). From 7 A.M. to 7 P.M., Monday through Friday,
servicing personnel in the TBC are available to open accounts, take
applications for certain types of loans, resolve account problems and offer
information on other bank products and services to existing and potential
customers. The Company also offers PC/Internet banking for personal
computers.
In February 2000, the Bank opened a lending office for its newly formed
Seacoast Marine Finance division in Ft. Lauderdale, Florida. Seacoast
Marine Finance is staffed with seasoned, experienced marine lending
professionals with a marketing emphasis on marine loans of $200,000 and
greater. All loans outside of the Bank's primary service area are generally
sold.
Seacoast has four indirect subsidiaries. FNB Brokerage Services, Inc.
("FNB Brokerage") provides brokerage services. FNB Insurance Services, Inc.
("FNB Insurance") provides insurance services. South Branch Building, Inc.
is a general partner in a partnership which constructed a branch facility
of the Bank. Big O RV Resort, Inc. was formed to own and operate certain
properties acquired through foreclosure, but is currently inactive. The
operations of these subsidiaries contribute less than 10% of the
consolidated assets and revenues of Seacoast.
As a bank holding company, Seacoast is a legal entity separate and distinct
from its subsidiaries. Seacoast coordinates the financial resources of the
consolidated enterprise and maintains financial, operational and
administrative systems that allow centralized evaluation of subsidiary
operations and coordination of selected policies and activities. Seacoast's
operating revenues and net income are derived primarily from its
subsidiaries through dividends, fees for services performed and interest on
advances and loans. See "Supervision and Regulation".
As of December 31, 2000, Seacoast and its subsidiaries employed 340
full-time equivalent employees.
Expansion of Business
Seacoast has expanded its products and services to meet the changing needs
of the various segments of its market and it expects to continue this
strategy. Prior to 1991, Seacoast had expanded geographically primarily
through the addition of branches, including the acquisition of a thrift
branch in St. Lucie County.
Seacoast has from time to time acquired banks, bank branches and deposits,
and has opened new branches and facilities.
Florida law permits state-wide branching, and Seacoast has expanded, and
anticipates future expansion in its markets, by opening additional offices
and facilities. New banking facilities were opened in November 1994 in St.
Lucie West, a new community west of Port St. Lucie, and in May 1996 in a
WalMart superstore in Sebastian, which is located in northern Indian River
County. In January 1997, Seacoast opened a branch in Nettles Island, a
predominately modular home community on Hutchinson Island in southern St.
Lucie County. In May, June and July 1997, and in March 1998, four
additional branch offices were opened in Indian River County. In July 2000,
a new branch on U.S. 1 in northern Martin County near the St. Lucie County
line was opened; at the same time a branch in St. Lucie County
approximately one-half mile from the new branch was closed. See "Item 2.
Properties".
Seacoast regularly evaluates possible acquisitions and other expansion
opportunities.
Competition
Seacoast and its subsidiaries operate in the highly competitive markets of
Martin, St. Lucie and Indian River Counties in southeastern Florida. The
Bank not only competes with other banks in its markets, but it also
competes with various other types of financial institutions for deposits,
certain commercial, fiduciary and investment services and various types of
loans and certain other financial services. The Bank also competes for
interest-bearing funds with a number of other financial intermediaries and
investment alternatives, including mutual funds, brokerage and insurance
firms, governmental and corporate bonds, and other securities.
Seacoast and its subsidiaries compete not only with financial institutions
based in the State of Florida, but also with a number of large out-of-state
and foreign banks, bank holding companies and other financial institutions
which have an established market presence in the State of Florida, or which
offer products by mail, telephone or over the Internet. Many of Seacoast's
competitors are engaged in local, regional, national and international
operations and have greater assets, personnel and other resources than
Seacoast. Some of these competitors are subject to less regulation and/or
more favorable tax treatment than Seacoast.
Supervision and Regulation
Bank holding companies and banks are extensively regulated under federal
and state law. This discussion is qualified in its entirety by reference to
the particular statutory and regulatory provisions referred to below and is
not intended to be an exhaustive description of the status or regulations
applicable to the Company's and the Bank's business. Supervision,
regulation, and examination of the Company and the Bank and their
respective subsidiaries by the bank regulatory agencies are intended
primarily for the protection of depositors rather than holders of Company
capital stock. Any change in applicable law or regulation may have a
material effect on the Company's business.
Bank Holding Company Regulation
The Company, as a bank holding company, is subject to supervision and
regulation by the Board of Governors of the Federal Reserve System
("Federal Reserve") under the BHC Act. Bank holding companies are generally
limited to the business of banking, managing or controlling banks, and
other activities that the FRB determines to be so closely related to
banking or managing or controlling banks as to be a proper incident there-
to. The Company is required to file with the Federal Reserve periodic
reports and such other information as the Federal Reserve may request. The
Federal Reserve examines the Company, and may examine the Company's
Subsidiaries.
The BHC Act requires prior Federal Reserve approval for, among other
things, the acquisition by a bank holding company of direct or indirect
ownership or control of more than 5% of the voting shares or substantially
all the assets of any bank, or for a merger or consolidation of a bank
holding company with another bank holding company. With certain exceptions,
the BHC Act prohibits a bank holding company from acquiring direct or
indirect ownership or control of voting shares of any company which is not
a bank or bank holding company and from engaging directly or indirectly in
any activity other than banking or managing or controlling banks or
performing services for its authorized subsidiaries. A bank holding
company, may, however, engage in or acquire an interest in a company that
engages in activities which the Federal Reserve has determined by
regulation or order to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.
In November 1999, Congress enacted the Gramm-Leach-Bliley Act ("GLB")
which made substantial revisions to the statutory restrictions separating
banking activities from certain other financial activities. Under GLB, bank
holding companies that are "well-capitalized" and "well-managed", as
defined in Federal Reserve Regulation Y, which have and maintain "satisfac-
tory" Community Reinvestment Act ("CRA") ratings and meet certain other
conditions can elect to become "financial holding companies". As such, they
and their subsidiaries are permitted to acquire or engage in previously
impermissible activities such as insurance underwriting, securities
underwriting and distribution, travel agency activities, broad insurance
agency activities, merchant bank, and other activities that the Federal
Reserve determines to be financial in nature or complementary thereto. In
addition, under the merchant banking authority added by the GLB and Federal
Reserve regulations, financial holding companies are authorized to invest
in companies that engage in activities that are not financial in nature, as
long as the financial holding company makes its investment with the
intention of limiting the investment in duration, does not manage the
company on a day-to-day basis, and the invested company does not
cross-market with any of the financial holding company's controlled
depository institutions. Financial holding companies continue to be subject
to the overall oversight and supervision of the Federal Reserve, but GLB
applies the concept of functional regulation to the activities conducted by
subsidiaries. For example, insurance activities would be subject to super-
vision and regulation by state insurance authorities. While the Company has
not become a financial holding company, it may elect to do so in the future
in order to exercise the broader activity powers provided by GLB.
The Company is a legal entity separate and distinct from the Bank and its
other subsidiaries. Various legal limitations restrict the Bank from
lending or otherwise supplying funds to the Company or its non-bank
subsidiaries. The Company and the Bank are subject to Section 23A of the
Federal Reserve Act. Section 23A defines "covered transactions", which
include extensions of credit, and limits a bank's covered transactions with
any affiliate to 10% of such bank's capital and surplus. All covered and
exempt transactions between a bank and its affiliates must be on terms and
conditions consistent with safe and sound banking practices, and banks and
their subsidiaries are prohibited from purchasing low-quality assets from
the bank's affiliates. Finally, Section 23A requires that all of a bank's
extensions of credit to an affiliate be appropriately secured by acceptable
collateral, generally United States government or agency securities. The
Company and the Bank also are subject to Section 23B of the Federal Reserve
Act, which generally limits covered and other transactions among affiliates
to terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the bank or its
subsidiary as prevailing at the time for transactions with unaffiliated
companies.
The BHC Act, effective on September 29, 1995, repealed the prior
statutory restrictions on interstate acquisitions of banks by bank holding
companies, such that Seacoast and any other bank holding company located in
Florida may now acquire a bank located in any other state, and any bank
holding company located outside Florida may lawfully acquire any bank based
in another state, regardless of state law to the contrary, in either case
subject to certain deposit-percentage, age of bank charter requirements,
and other restrictions. Federal law also permits national and state-
chartered banks to branch interstate through acquisitions of banks in other
states. Florida has an Interstate Branching Act ("the Florida Branching
Act"), which permits interstate branching through merger transactions
under the Interstate Banking Act. Under the Florida Branching Act, with
the prior approval of the Florida Department of Banking and Finance, a
Florida bank may establish, maintain and operate one or more branches in
a state other than the State of Florida pursuant to a merger transaction in
which the Florida bank is the resulting bank. In addition, the Florida
Branching Act provides that one or more Florida banks may enter into a mer-
ger transaction with one or more out-of-state banks, and an out-of-state
bank resulting from such transaction may maintain and operate the branches
of the Florida bank that participated in such merger. An out-of-state
bank, however, is not permitted to acquire a Florida bank in a merger
transaction unless the Florida bank has been in existence and continuously
operated for more than three years.
Federal Reserve policy requires a bank holding company to act as a source
of financial strength and to take measures to preserve and protect bank
subsidiaries in situations where additional investments in a troubled bank
may not otherwise be warranted. In addition, under the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), where
a bank holding company has more than one bank or thrift subsidiary, each of
the bank holding company's subsidiary depository institutions are
responsible for any losses to the Federal Deposit Insurance Corporation
("FDIC") as a result of an affiliated depository institution's failure. As
a result, a bank holding company may be required to loan money to its
subsidiaries in the form of capital notes or other instruments which
qualify as capital under regulatory rules. However, any loans from the
holding company to such subsidiary banks likely will be unsecured and
subordinated to such bank's depositors and perhaps to other creditors of
the bank.
Bank and Bank Subsidiary Regulation
The Bank is subject to supervision, regulation, and examination by the
Office of the Comptroller of the Currency (the "OCC") which monitors all
areas of the operations of the Bank, including reserves, loans, mortgages,
issuances of securities, payment of dividends, establishment of branches,
capital adequacy, and compliance with laws. The Bank is a member of the
FDIC and, as such, its deposits are insured by the FDIC to the maximum
extent provided by law. See "FDIC Insurance Assessments".
Under present Florida law, the Bank may establish and operate branches
throughout the State of Florida, subject to the maintenance of adequate
capital for each branch and the receipt of OCC approval.
The OCC has adopted a series of revisions to its regulations, including
expanding the powers exercisable by operations subsidiaries. These changes
also modernize and streamline corporate governance, investment and
fiduciary powers.
The Federal Financial Institutions Examination Council's ("FFIEC") and the
OCC utilize the "Uniform Financial Institutions Rating System" ("UFIRS"),
effective January 1, 1997. UFIRS is an internal rating system to assess the
soundness of financial institutions on a uniform basis and for identifying
those institutions requiring special supervisory attention. Under prior
UFIRS, each financial institution was assigned a confidential composite
rating based on an evaluation and rating of five essential components of an
institution's financial condition and operations including Capital
adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to
market risk, as well as the quality of risk management practices. For most
institutions, the FFIEC has indicated that market risk primarily reflects
exposures to changes in interest rates. When regulators evaluate this
component, consideration is expected to be given to: manage- ment's ability
to identify, measure, monitor, and control market risk; the institution's
size; the nature and complexity of its activities and its risk profile, and
the adequacy of its capital and earnings in relation to its level of market
risk exposure. Market risk is rated based upon, but not limited to, an
assessment of the sensitivity of the financial institution's earnings or
the economic value of its capital to adverse changes in interest rates,
foreign exchange rates, commodity prices, or equity prices; management's
ability to identify, measure, monitor and control exposure to market risk;
and the nature and complexity of interest rate risk exposure arising from
nontrading positions.
GLB requires banks and their affiliated companies to adopt and disclose
privacy policies regarding the sharing of personal information they obtain
from their customers with third parties. GLB also permits banks to engage
in "financial activities" through subsidiaries similar to that permitted
financial holding companies. See the discussion regarding GLB in "Bank
Holding Company Regulation" above.
FNB Brokerage, a Bank subsidiary, is registered as a securities
broker-dealer under the Exchange Act and is regulated by the Securities and
Exchange Commission ("SEC"). As a member of the National Association of
Securities Dealers, Inc., it also is subject to examination and supervision
of its operations, personnel and accounts by NASD Regulation, Inc., a NASD
subsidiary. FNB Brokerage is a separate and distinct entity from the Bank,
and must maintain adequate capital under the SEC's net capital rule. The
net capital rule limits FNB Brokerage's ability to reduce capital by
payment of dividends or other distributions to the Bank. FNB Brokerage is
also authorized by the State of Florida to act as a securities dealer and
investment advisor pursuant to Chapter 517 of the Florida Statutes.
FNB Insurance, a Bank insurance agency subsidiary, is authorized by the
State of Florida to market insurance products. FNB Insurance is a separate
and distinct entity from the Bank and is subject to supervision and
regulation by state insurance authorities.
Community Reinvestment Act
The Company and the Bank are subject to the provisions of the Community
Reinvestment Act of 1977, as amended (the "CRA") and the federal banking
agencies' regulations thereunder. Under the CRA, all banks and thrifts have
a continuing and affirmative obligation, consistent with their safe and
sound operation to help meet the credit needs for their entire communities,
including low and moderate income neighborhoods. The CRA does not establish
specific lending requirements or programs for financial institutions, nor
does it limit an institution's discretion to develop the types of products
and services that it believes are best suited to its particular community,
consistent with the CRA. The CRA requires a depository institution's
primary federal regulator, in connection with its examination of the
institution, to assess the institution's record of assessing and meeting
the credit needs of the community served by that institution, including
low- and moderate-income neighborhoods. The regulatory agency's assessment
of the institution's record is made available to the public. Further, such
assessment is required of any institution which has applied to: (i) charter
a national bank; (ii) obtain deposit insurance coverage for a
newly-chartered institution; (iii) establish a new branch office that
accepts deposits; (iv) relocate an office; or (v) merge or consolidate
with, or acquire the assets or assume the liabilities of, a federally
regulated financial institution. In the case of a bank holding company
applying for approval to acquire a bank or other bank holding company, the
Federal Reserve will assess the records of each subsidiary depository
institution of the applicant bank holding company, and such records may be
the basis for denying the application. A less than satisfactory CRA rating
will slow, if not preclude expansion of banking activities and prevent a
company from becoming a financial holding company.
GLB and federal bank regulations make various changes to the CRA. Among
other CRA agreements with private parties must be disclosed and annual CRA
reports must be made to a bank's primary federal regulator. A bank holding
company will not be permitted to become a financial holding company and no
new activities authorized under GLB may be commenced by a holding company
or by a bank financial subsidiary if any of its bank subsidiaries received
less than a "satisfactory" CRA rating in its latest CRA examination.
The Bank is also subject to, among other things, the provisions of the
Equal Credit Opportunity Act (the "ECOA") and the Fair Housing Act (the
"FHA"), both of which prohibit discrimination based on race or color,
religion, national origin, sex, and familial status in any aspect of a
consumer or commercial credit or residential real estate transaction. Based
on recently heightened concerns that some prospective home buyers and other
borrowers may be experiencing discriminatory treatment in their efforts to
obtain loans, the Department of Housing and Urban Development, the
Department of Justice (the "DOJ"), and the federal banking agencies in
April 1994 issued an Interagency Policy Statement on Discrimination in
Lending in order to provide guidance to financial institutions in
determining whether discrimination exists, how the agencies will respond to
lending discrimination, and what steps lenders might take to prevent
discriminatory lending practices. The DOJ has also increased its efforts to
prosecute what it regards as violations of the ECOA and FHA.
Payment of Dividends
The Company is a legal entity separate and distinct from its banking and
other subsidiaries. The prior approval of the OCC is required if the total
of all dividends declared by a national bank (such as the Bank) in any
calendar year will exceed the sum of such bank's net profits for the year
and its retained net profits for the preceding two calendar years, less any
required transfers to surplus. Federal law also prohibits any national bank
from paying dividends that would be greater than such bank's undivided
profits after deducting statutory bad debt in excess of such bank's
allowance for loan losses.
In addition, the Company and the Bank are subject to various general
regulatory policies and requirements relating to the payment of dividends,
including requirements to maintain adequate capital above regulatory
minimums. The appropriate federal regulatory authority is authorized to
determine under certain circumstances relating to the financial condition
of a national or state member bank or a bank holding company that the
payment of dividends would be an unsafe or unsound practice and to prohibit
payment thereof. The OCC and the Federal Reserve have indicated that paying
dividends that deplete a national or state member bank's capital base to an
inadequate level would be an unsound and unsafe banking practice. The OCC
and the Federal Reserve have each indicated that depository institutions
and their holding companies should generally pay dividends only out of
current operating earnings.
Capital
The Federal Reserve and the OCC have risk-based capital guidelines for bank
holding companies and national banks, respectively. These guidelines
require a minimum ratio of capital to risk-weighted assets (including
certain off-balance- sheet activities, such as standby letters of credit)
of 8%. At least half of the total capital must consist of common equity,
retained earnings and a limited amount of qualifying preferred stock, less
goodwill and certain core deposit intangibles ("Tier 1 capital"). The
remainder may consist of non-qualifying preferred stock, qualifying
subordinated, perpetual, and/or mandatory convertible debt, term
subordinated debt and intermediate term preferred stock and up to 45% of
pretax unrealized holding gains on available for sale equity securities
with readily determinable market values that are prudently valued, and a
limited amount of any loan loss allowance and up to 45% of pretax ("Tier 2
capital" and, together with Tier 1 capital, "Total Capital").
In addition, the Federal Reserve and the OCC have established minimum
leverage ratio guidelines for bank holding companies and national banks,
which provide for a minimum leverage ratio of Tier 1 capital to adjusted
average quarterly assets ("leverage ratio") equal to 3%, plus an additional
cushion of 1.0% - 2.0%, if the institution has less than the highest
regulatory rating. The guidelines also provide that institutions
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Higher capital may be required in individual cases, and depending upon a
bank holding company's risk profile. All bank holding companies and banks
are expected to hold capital commensurate with the level and nature of
their risks including the volume and severity of their problem loans.
Lastly, the Federal Reserve's guidelines indicate that the Federal Reserve
will continue to consider a "tangible Tier 1 leverage ratio" (deducting all
intangibles) in evaluating proposals for expansion or new activity. The
Federal Reserve and OCC have not advised the Company or the Bank of any
specific minimum leverage ratio or tangible Tier 1 leverage ratio
applicable to them.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, requires the federal banking agencies to
take "prompt corrective action" regarding depository institutions that do
not meet minimum capital requirements. FDICIA establishes five capital
tiers: "well capitalized", "adequately capitalized", "undercapitalized",
"significantly undercapitalized", and "critically undercapitalized". A
depository institution's capital tier will depend upon how its capital
levels compare to various relevant capital measures and certain other
factors, as established by regulation.
All of the federal banking agencies have adopted regulations establishing
relevant capital measures and relevant capital levels. The relevant capital
measures are the Total Capital ratio, Tier 1 capital ratio, and the
leverage ratio. Under the regulations, a national bank will be (i) well
capitalized if it has a Total Capital ratio of 10% or greater, a Tier 1
capital ratio of 6% or greater, and is not subject to any written
agreement, order, capital directive, or prompt corrective action directive
by a federal bank regulatory agency to meet and maintain a specific capital
level for any capital measure, (ii) adequately capitalized if it has a
Total Capital ratio of 8% or greater, a Tier 1 capital ratio of 4% or
greater, and a leverage ratio of 4% or greater (3% in certain
circumstances), (iii) undercapitalized if it has a Total Capital ratio of
less than 8%, a Tier 1 capital ratio of less than 4% (3% in certain
circumstances), or (iv) critically undercapitalized if its tangible equity
is equal to or less than 2% of average quarterly tangible assets.
As of December 31, 2000, the consolidated capital ratios of the Company and
the Bank were as follows:
Regulatory
Minimum Company Bank
------- ------- ----
Tier 1 capital ratio 4.0% 11.2% 11.0%
Total capital ratio 8.0% 12.1% 12.0%
Leverage ratio 3.0-5.0% 7.4% 7.3%
FDICIA
FDICIA directs that each federal banking regulatory agency prescribe
standards for depository institutions and depository institution holding
companies relating to internal controls, information systems, internal
audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth compensation, a maximum ratio of classified assets
to capital, minimum earnings sufficient to absorb losses, a minimum ratio
of market value to book value for publicly traded shares, and such other
standards as the federal regulatory agencies deem appropriate.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee
to its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
growth limitations and are required to submit a capital restoration plan
for approval. For a capital restoration plan to be acceptable, the
depository institution's parent holding company must guarantee that the
institution comply with such capital restoration plan. The aggregate
liability of the parent holding company is limited to the lesser of 5% of
the depository institution's total assets at the time it became
undercapitalized and the amount necessary to bring the institution into
compliance with applicable capital standards. If a depository institution
fails to submit an acceptable plan, it is treated as if it is significantly
undercapitalized. If the controlling holding company fails to fulfill its
obligations under FDICIA and files (or has filed against it) a petition
under the federal Bankruptcy Code, the claim would be entitled to a
priority in such bankruptcy proceeding over third party creditors of the
bank holding company. Significantly undercapitalized depository
institutions may be subject to a number of requirements and restrictions,
including orders to sell sufficient voting stock to become adequately
capitalized, requirements to reduce total assets, and cessation of receipt
of deposits from correspondent banks. Critically undercapitalized
institutions are subject to the appointment of a receiver or conservator.
Because the Company and the Bank exceed applicable capital requirements,
the respective managements of the Company and the Bank do not believe that
the provisions of FDICIA have had any material impact on the Company and
the Bank or their respective operations.
FDICIA also contains a variety of other provisions that may affect the
operations of the Company and the Bank, including new reporting
requirements, regulatory standards for real estate lending, "truth in
savings" provisions, the requirement that a depository institution give 90
days' prior notice to customers and regulatory authorities before closing
any branch, and a prohibition on the acceptance or renewal of brokered
deposits by depository institutions that are not well capitalized or are
adequately capitalized and have not received a waiver from the FDIC. Under
regulations relating to brokered deposits, the Bank is well capitalized and
not restricted.
Enforcement Policies and Actions
The Federal Reserve and the OCC monitor compliance with laws and
regulations. Violations of laws and regulations, or other unsafe and
unsound practices, may result in these agencies imposing fines or
penalties, cease and desist orders, or taking other enforcement actions.
Under certain circumstances, these agencies may enforce these remedies
directly against officers, directors, employees and others participating in
the affairs of a bank or bank holding company.
Fiscal and Monetary Policy
Banking is a business which depends on interest rate differentials. In
general, the difference between the interest paid by a bank on its deposits
and its other borrowings, and the interest received by a bank on its loans
and securities holdings, constitutes the major portion of a bank's
earnings. Thus, the earnings and growth of Seacoast and the Bank are
subject to the influence of economic conditions generally, both domestic
and foreign, and also to the monetary and fiscal policies of the United
States and its agencies, particularly the Federal Reserve. The Federal
Reserve regulates the supply of money through various means, including open
market dealings in United States government securities, the discount rate
at which banks may borrow from the Federal Reserve, and the reserve
requirements on deposits. The nature and timing of any changes in such
policies and their effect on Seacoast and its subsidiaries cannot be
predicted.
FDIC Insurance Assessments
The Bank is subject to FDIC deposit insurance assessments. The Bank's
deposits are primarily insured by the FDIC's Bank Insurance Fund ("BIF").
The Bank is also a member of the Savings Association Insurance Fund
("SAIF") to the extent that the Bank holds deposits acquired in 1991 from
the RTC. The FDIC assesses deposits under a risk-based premium schedule.
Each financial institution is assigned to one of three capital groups,
"well capitalized," "adequately capitalized" or "undercapitalized," and
further assigned to one of three subgroups within a capital group, on the
basis of supervisory evaluations by the institution's primary federal and,
if applicable, state regulators and other information relevant to the
institution's financial condition and the risk posed to the applicable
insurance fund. The actual assessment rate applicable to a particular
institution, therefore, depends in part upon the risk assessment
classification so assigned to the institution by the FDIC. During the years
ended December 31, 2000, and 1999, the Bank paid no deposit premiums,
except for the Financing Corporation ("FICO") assessments of $184,000 and
$146,000, respectively.
The FDIC's Board of Directors has continued the 2000 BIF and SAIF
assessment schedule of zero to 27 basis points per annum for the first
semiannual period of 2001. The Deposit Insurance Funds Act of 1996 (the
"Funds Act") authorized FICO to levy assessments through the earlier of
December 31, 1999 or the merger of BIF and SAIF, on BIF-assessable deposits
at a rate equal to one-fifth of the FICO assessment rate applied to SAIF
deposits. As of January 1, 2001, the FICO assessment rate was equivalent
for BIF and SAIF-assessable deposits. The FICO assessments are set
quarterly and ranged from 2.12 basis points for BIF and SAIF, in the first
quarter of 2000, to 2.02 basis points in the last quarter of 2000. The
assessment rate rate is 1.96 basis points for BIF and SAIF-assesable
deposits in the first quarter of 2001.
Legislative and Regulatory Changes
Legislative and regulatory proposals regarding changes in banking, and the
regulation of banks, thrifts and other financial institutions and bank and
bank holding company powers are being considered by the executive branch of
the Federal government, Congress and various state governments, including
Florida. Among other items under consideration are the possible combination
of the BIF and SAIF, and reforming the deposit insurance system. The FDIC
also is considering possibly adding risk measures in determining deposit
insurance assessments. Certain of these proposals, if adopted, could
significantly change the regulation of banks and the financial services
industry. It cannot be predicted whether any of these proposals will be
adopted, and, if adopted, how these proposals will affect the Company and
the Bank.
New Accounting Pronouncements
Derivative Financial Instruments: In September 1998, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standards No. 133 (SFAS No. 133), "Accounting for Derivative Instruments
and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities on the balance sheet and measure those instruments at
fair value. In June of 1999, SFAS No. 133 was amended by Statement of
Financial Accounting Standards No. 137, which delays the effective date of
implementation until fiscal years beginning after June 15, 2000. In June of
2000, SFAS No. 133 was amended by Statement of Financial Accounting
Standards No. 138, which addresses issues related to implementation
difficulties. The Company will adopt SFAS No. 133 effective January 1,
2001. The Company has completed an in-depth analysis and determined it has
no derivative instruments as defined under SFAS No. 133.
Statistical Information
Certain statistical information (as required by Guide 3) is included in
response to Item 7 of this Annual Report on Form 10- K. Certain statistical
information is included in response to Item 6 and Item 8 of this Annual
Report on Form 10-K.
Item 2. Properties
Seacoast and the Bank's main office occupy approximately 62,000 square feet
of a 68,000 square foot building in Stuart, Florida. The building, together
with an adjacent 10-lane drive-in banking facility and an additional 27,000
square foot office building, are situated on approximately eight acres of
land in the center of Stuart zoned for commercial use. The building and
land are owned by the Bank, which leases out portions of the building not
utilized by Seacoast and the Bank to unaffiliated third parties.
Adjacent to the main office, the Bank leases approximately 21,400 square
feet of office space to house operational departments, consistly primarily
of information systems and retail support. The Bank owns its equipment,
which is used for servicing bank deposits and loan accounts as well as
on-line banking services, providing tellers and other customer service
personnel with access to customers' records.
In February, 2000 the Bank leased storefront space in Ft. Lauderdale,
Florida for a lending office for its newly formed Seacoast Marine Finance
division. The office occupies 1,913 square feet of space, with furniture
and equipment all owned by the Bank.
As of December 31, 2000, the net carrying value of branch offices
(excluding the main office) was approximately $9.0 million. Seacoast's
branch offices are described as follows:
Jensen Beach, opened in 1977, is a free-standing facility located in the
commercial district of a residential community contiguous to Stuart. The
1,920 square foot bank building and land are owned by the Bank.
Improvements include three drive-in teller lanes and one drive-up ATM as
well as a parking lot and landscaping.
East Ocean Boulevard, opened at its original location in 1978, was a 2,400
square foot building leased by the Bank. The acquisition of American Bank
provided an opportunity for the Bank to move to a new location in April
1995. It is still located on the main thoroughfare between downtown Stuart
and Hutchinson Island's beach-front residential developments. The first
three floors of a four story office condominium were acquired in the
acquisition. The 2,300 square foot branch area on the first floor has been
remodeled and operates as a full service branch including five drive-in
lanes and a drive-up ATM. The remaining 2,300 square feet on the ground
floor was sold in June 1996, the third floor was sold in December 1995, and
the second floor in December 1998.
Cove Road, opened in late 1983, is conveniently located close to housing
developments in the residential areas south of Stuart known as Port Salerno
and Hobe Sound. South Branch Building, Inc., a subsidiary of the Bank, is a
general partner in a partnership which entered into a long term land lease
for approximately four acres of property on which it constructed a 7,500
square foot building. The Bank leases the building and utilizes 3,450
square feet of the available space. The balance is sublet by the Bank to
other business tenants. The Bank has improved its premises with three
drive-in lanes, bank equipment, and furniture and fixtures, all of which
are owned by the Bank. A drive-up ATM was added in early 1997.
Hutchinson Island, opened on December 31, 1984, is in a shopping center
located on a coastal barrier island, close to numerous oceanfront
condominium developments. In 1993, the branch was expanded from 2,800
square feet to 4,000 square feet and is under a long term lease to the
Bank. The Bank has improved the premises with bank equipment, a walk-up ATM
and three drive-in lanes, all owned by the Bank.
Rivergate originally opened October 28, 1985 and occupied 1,700 square feet
of leased space in the Rivergate Shopping Center, Port St. Lucie, Florida.
The Bank moved to larger facilities in the shopping center in April of 1999
under a long term lease agreement. Furniture and bank equipment located in
the prior facilities were moved to the new facility, which occupies
approximately 3,400 square feet, with three drive-in lanes and a drive-up
ATM.
Northport was acquired on June 28, 1986 from Citizens Federal Savings &
Loan Association of Miami. This property consists of a storefront under
long term lease in the St. Lucie Plaza Shopping Center, Port St. Lucie, of
approximately 4,000 square feet. This office was closed March 31, 1994, and
the property is presently utilized by local community groups for meetings.
Wedgewood Commons, opened in April 1988, is located on an out-parcel under
long term lease in the Wedgewood Commons Shopping Center, south of Stuart
on U.S. Highway 1. The property consists of a 2,800 square foot building
which houses four drive-in lanes, a walk-up ATM and various bank equipment,
all of which are owned by the Bank and are located on the leased property.
Bayshore, opened on September 27, 1990, occupies 3,520 square feet of a
50,000 square foot shopping center located in Port St. Lucie. The Bank has
leased the premises under a long term lease agreement and has made
improvements to the premises, including the addition of three drive-in
lanes and a walk-up ATM, all of which are owned by the Bank. A second
location, acquired in the merger with Port St. Lucie National Holding
Company (PSHC), and in close proximity to this location, was closed on June
1, 1997 and subsequently sold in September 1997.
Hobe Sound, acquired from the Resolution Trust Company (RTC) on December
23, 1991, is a two story facility containing 8,000 square feet and is
centrally located in Hobe Sound. Improvements include two drive-in teller
lanes, a drive-up ATM, and equipment and furniture, all of which are owned
by the Bank.
Fort Pierce, acquired from the RTC on December 23, 1991, is a 2,895 square
foot facility located in the heart of Fort Pierce and has three drive-in
lanes and a drive-up ATM. Equipment and furniture are all owned by the
Bank.
Martin Downs, purchased from the RTC in February 1992, is a 3,960 square
foot bank building located at a high traffic intersection in Palm City, an
emerging commercial and residential community west of Stuart. Improvements
include three drive-in teller lanes, a drive-up ATM, equipment and
furniture.
Tiffany, purchased from the RTC in May 1992, is a two story facility which
contains 8,250 square feet and is located on a corner of U.S. Highway One
in Port St. Lucie offering excellent exposure in one of the fastest growing
residential areas in the region. The second story which contains 4,250
square feet is leased to tenants. Three drive-in teller lanes, a walk-up
ATM, equipment and furniture are utilized and owned by the Bank.
Vero Beach, purchased from the RTC in February 1993, is a 3,300 square foot
bank building located in Vero beach on U.S. Highway One and represents the
Bank's initial presence in this Indian River County market. A leasehold
interest in a long term land lease was acquired. Improvements include three
drive-in teller lanes, a walk-up ATM, equipment and furniture, all of which
are owned by the Bank.
Beachland, opened in February 1993, consists of 4,150 square feet of leased
space located in a three-story commercial building on Beachland Boulevard,
the main beachfront thoroughfare in Vero Beach, Florida. An additional
1,050 square feet were leased during 1996. This facility has 2 drive-in
teller lanes, a drive-up ATM, and furniture and equipment, all owned by the
Bank.
Sandhill Cove, opened in September 1993, is in an upscale life-care
retirement community. The 135 square foot office is located within the
community facilities which are located on a 36-acre development in Palm
City, Florida. This community contains approximately 168 private
residences.
St. Lucie West, opened in November 1994, was in a 3,600 square foot
building located at 1320 S.W. St. Lucie Blvd, Port St. Lucie. As a result
of the PSHC acquisition, this facility was closed in June 1997 and the
property was sold in September 1997. On June 1, 1997, the Bank moved its
St. Lucie West operations to the Renar Centre (previously occupied by
PSHC). The Bank leases 4,320 square feet on the first floor of this
facility and 2,468 square feet on the second floor. The facility includes
three drive-in teller lanes, a drive-up ATM, and furniture and equipment.
Mariner Square, acquired from American Bank in April 1995, is a 3,600
square foot leased space located on the ground floor of a three story
office building located on U.S.Highway 1 between Hobe Sound and Port
Salerno. Approximately 700 square feet of the space is sublet to a tenant.
The space occupied by the Bank has been improved to be a full service
branch with two drive-in lanes, one serving as a drive-up ATM lane as well
as a drive-in teller lane, all owned by the Bank.
Sebastian, opened in May 1996, is located within a 174,000 square foot
WalMart Superstore on U.S. 1 in northern Indian River County. The leased
space occupied by the Bank totals 865 square feet. The facility has a
walk-up ATM, owned by the Bank.
Nettles Island was opened in January 1997 in southern St. Lucie County on
Hutchinson Island. It occupies 350 square feet of leased space in a
predominantly modular home community. Furniture and equipment are owned. No
ATM or drive-in lanes are offered.
U.S. 1 and Port St. Lucie Boulevard office opened as a Bank location on
June 1, 1997, upon the merger with PSHC. At the date of the merger, the
leased space consisted of 5,188 square feet on the first floor and 1,200
square feet on the second floor. In October 1997, 1,800 square feet of the
leased space on the first floor and 1,200 square feet of leased space on
the second floor were assigned to another tenant, with the remaining space
occupied by the Bank totaling 3,388 square feet. The facility has two
drive-in lanes, a walk-up ATM, and furniture and equipment, all owned by
the Bank. This facility was closed in July 2000, coinciding with the
opening of a new, more visible office on a leased out-parcel in a new
shopping center approximately one-half mile south of the closed location on
U.S. 1.
South Vero Square opened in May 1997 in a 3,150 square foot building owned
by the Bank on South U.S. 1 in Vero Beach. The facility includes three
drive-in teller lanes, a drive-up ATM, and furniture and equipment, all
owned by the Bank.
Oak Point opened in June 1997. It occupies 12,000 square feet of leased
space on the first and second floor of a 19,700 square foot 3-story
building in Indian River County. The office is in close proximity to Indian
River Memorial Hospital and the peripheral medical community adjacent to
the hospital. The facility includes three drive-in teller lanes, a walk-up
ATM, and furniture and equipment, all owned by the Bank. Approximately
2,000 square feet of the second floor is sublet to tenants.
Route 60 Vero opened in July 1997. Similar to the Sebastian office, this
facility is housed in a WalMart Superstore in western Vero Beach in Indian
River County. The branch occupies 750 square feet of leased space and
includes a walk-up ATM.
Sebastian West opened in March 1998 in a 3,150 square foot building owned
by the Bank. It is located at the intersection of Fellsmere Road and
Roseland Road in Sebastian. The facility includes three drive-in teller
lanes, a drive-up ATM, and furniture and equipment, all owned by the Bank.
Jensen West, opened in July 2000, is located on an out-parcel under long
term lease on U.S. Highway 1 in northern Martin County. The facility
consists of a 3,930 square foot building, with four drive-up lanes, a drive
up ATM and furniture and equipment, all of which are owned by the Bank and
are located on the leased property. The opening of this office coincided
with the closing of the Bank's U.S. 1 and Port St. Lucie Boulevard office,
one-half mile north of this location.
For additional information, refer to Notes F and I of the Notes to
Consolidated Financial Statements in the 2000 Annual Report of Seacoast
incorporated herein by reference pursuant to Item 8 of this document.
Item 3. Legal Proceedings
The Company and its subsidiaries, because of the nature of their business,
are at times subject to numerous legal actions, threatened or filed, in the
normal course of their business. Although the amount of any ultimate
liability with respect to such matters cannot be determined, in the opinion
of management, after consultation with legal counsel, those claims and
lawsuits, when resolved, should not have a material adverse effect on the
consolidated results of operation or financial condition of Seacoast and
its subsidiaries.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
Part II
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Item 5 Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters
The Class A Common Stock is traded in the over-the-counter market and
quoted on the Nasdaq National Market System ("Nasdaq Stock Market"). There
is no established public trading market for the Class B Common Stock of
Seacoast. As of March 7, 2001, there were approximately 915 record holders
of the Class A Common Stock and 65 record holders of the Class B Common
Stock.
Seacoast Class A Stock is traded in the over-the-counter market and is
quoted on the Nasdaq Stock Market under the symbol "SBCFA". The following
table sets forth the high, low and last sale prices per share of Seacoast
Class A Stock on the Nasdaq Stock Market and the dividends paid per share
of Seacoast Class A Stock for the indicated periods.
Sale Price Per Annual Dividends
Share of Seacoast Declared Per Share
Class A Stock of Seacoast Class
------------------- A Stock
High Low ------------------
------ ------
2000
First Quarter . . . . . $28.75 $24.75 $0.26
Second Quarter. . . . . 27.25 25.00 0.26
Third Quarter. . . . . 27.125 25.50 0.26
Fourth Quarter. . . . . 26.625 24.25 0.28
1999
First Quarter................. $28.25 $26.125 $0.24
Second Quarter................ 34.50 26.375 0.24
Third Quarter................. 32.50 28.75 0.24
Fourth Quarter................ 30.375 27.50 0.26
Seacoast's Articles of Incorporation prohibit the declaration or payment of
cash dividends on Class B Common Stock unless cash dividends are declared
or paid on Class A Common Stock in an amount equal to at least 110% of any
cash dividend on Class B Common Stock. Dividends on Class A Common Stock
payable in shares of Class A Common Stock shall be paid to holders of Class
A Common and Class B Common Stock at the same time and on the same basis.
In 1998, cash dividends of $.90 per share of Class A Common Stock and $.818
per share of Class B Common Stock were paid. In 1999, cash dividends of
$.98 per share of Class A Common Stock and $.89 per share of Class B Common
Stock were paid. In 2000, cash dividends of $1.06 per share of Class A
Common Stock and $0.962 per share of Class B Common Stock were paid.
Dividends from the Bank are Seacoast's primary source of funds to pay
dividends on Seacoast capital stock. Under the National Bank Act, the Bank
may in any calendar year, without the approval of the OCC, pay dividends to
the extent of net profits for that year, plus retained net profits for the
preceding two years (less any required transfers to surplus). The need to
maintain adequate capital in the Bank also limits dividends that may be
paid to Seacoast. Information regarding a restriction on the ability of the
Bank to pay dividends to Seacoast is contained in Note B of the "Notes to
Consolidated Financial Statements" contained in Item 8 hereof. See
"Supervision and Regulation" contained in Item 1 of this document.
The OCC and Federal Reserve have the general authority to limit the
dividends paid by insured banks and bank holding companies, respectively,
if such payment may be deemed to constitute an unsafe or unsound practice.
If, in the particular circumstances, the OCC determines that the payment of
dividends would constitute an unsafe or unsound banking practice, the OCC
may, among other things, issue a cease and desist order prohibiting the
payment of dividends. This rule is not expected to adversely affect the
Bank's ability to pay dividends to Seacoast. See "Supervision and
Regulation" contained in Item 1 of this document.
Each share of Class B Common Stock is convertible by its holder into one
share of Class A Common Stock at any time prior to a vote of shareholders
authorizing a liquidation of Seacoast.
Item 6 Selected Financial Data
Selected financial data is incorporated herein by reference under the
caption "Financial Highlights" on page 1 of the 2000 Annual Report. See
Exhibit 13.
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of
Operations, under the caption "Financial Review - 2000 Management's
Discussion and Analysis", on pages 14 through 26 of the 2000 Annual Report
is incorporated herein by reference. See Exhibit 13.
Item 7A. Market Risk
Market risk is inherent to all industries and all financial institutions'
assets and liabilities are affected by market risks. The Company considers
credit risk to be the most significant of these risks; however, interest
rate risk is also significant. There are eight risks that must be
considered in managing the Company. These risks are listed below in order
of management's preceived level of risk imposed upon the Company. The
Company does not condut foreign exchange transactions which would expose
the Company to foreign exchange risk or trading activities which would
produce price risk. Therefore, these risks are not addressed in this
assessment. The Company has identified certain critical risks of the Bank.
Credit Risks
Credit risk is the risk to the Company's earnings or capital from the
potential of an obligator or related group of obligators failing to fulfill
its or their contractual commitments to the Bank. Credit risk is most
closely associated with a bank's lending. It encompasses the potential of
loss on a particular loan as well as the potential for loss from a group of
related loans, i.e., a credit concentration. Credit risk extends also to
less traditional bank activities. It includes the credit behind the Bank's
investment portfolio, the credit of counterparties to interest rate
contracts, and the credit of securities brokers holding the Bank's invest-
ment portfolio in street name.
Interest Rate Risk
Interest rate risk is the risk to earnings or market value of portfolio
equity (capital) from the potential movement in interest rates. The Company
uses model simulations to estimate and manage its interest rate
sensitivity. The Company has determined that an acceptable level of
interest rate risk would be for net interest income to fluctuate no more 6
percent, given a change in interest rates (up or down) of 200 basis points.
Based on the Company's most recent ALCO model simulations, the Company
believes that net interest income would decline approximately 1.8 percent
if interst rates would immediately rise 200 basis points. The Company is
willing to accept a change in the estimated market value of portfolio
equity of 5% given a 200 basis point increase in interest rates. At
December 31, 2000, the Company's most recent estimates indicate compliance
with this objective. However, these calculations incorporate the use of
many assumptions (which the Company believe to be reasonable) to estimate
the fair values of its assets and liabilities. In addition, seasonal
increases and decreases in the volume of the various financial instruments
can and do effect these calculations. Therefore, the Company monitors these
calculations on a quarterly basis and more frequently during periods of
interest rate volatility.
Liquidity Risk
Liquidity risk is the risk to earnings or capital from the Company's
inability to meet its obligations when they come due without incurring
unacceptable losses or costs such as when depositors withdraw their
deposits and the Bank does not have the liquid assets to fund the with-
drawals and to meet its loan funding obligations. The risk is particularly
great with brokered deposits, of which the Company currently has none.
Transaction Risk
Transaction risk is the risk to earnings or capital arising from problems
with service or product delivery or from failure in the Bank's operating
processes. It is a risk of failure in a bank's automation, its employee
integrity, or its internal controls.
Compliance Risk
Compliance risk is the risk to earnings or capital from noncompliance with
laws, rules and regulations.
Strategic Risk
Strategic risk is the risk to earnings or capital arising from adverse
business decisions or improper implementation of those decisions.
Reputation Risk
Reputation risk is the risk to earnings or capital from negative or other
unfavorable public opinion, including with respect to competitors.
Most of these risk are interrelated, and thus all must be considered by
management regardless of the implied risk. Management reviews performance
against these ranges on a quarterly basis.
Item 8 Financial Statements and Supplementary Data
The report of Arthur Andersen LLP, independent certified public
accountants, and the consolidated financial statements are included on
pages 31 through 45 of the 2000 Annual Report and are incorporated herein
by reference. "Selected Quarterly Information - Consolidated Quarterly
Average Balances, Yields & Rates" and Quarterly Consolidated Income
Statements" included on pages 27 through 29 of the 2000 Annual Report are
incorporated herein by reference. See Exhibit 13.
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
Part III
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Item 10. Directors and Executive Officers of the Registrant
Information concerning the directors and executive officers of Seacoast is
set forth under the headings "Proposal One - Election of Directors",
"Information About the Board of Directors and its Committees" and
"Executive Officers" on pages 3 through 8 as well as under the heading
"Section 16(a) Reporting" on page 20 in the 2001 Proxy Statement and is
incorporated herein by reference.
Item 11. Executive Compensation
Information set forth under the headings "Proposal One - Election of
Directors - Compensation of Executive Officers", "Salary and Benefits
Committee Report", "Summary Compensation Table", "Grants of Options/SARs in
2000", "Aggregated Options/SAR Exercises in 2000 and 2000 Year-End
Option/SAR Values", "Profit Sharing Plan", "Executive Deferred Compensation
Plan", "Performance Graph", and "Employment and Severance Agreements" on
pages 8 through 11 and pages 13 through 16 of the 2001 Proxy Statement is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information set forth under the headings, "Proposal One Election of
Directors - General" on pages 3 through 8, "Proposal One - Election of
Directors - Management Stock Ownership" on page 8, and "Principal
Shareholders" on page 18 to 19 in the 2001 Proxy Statement, relating to the
number of shares of Class A Common Stock and Class B Common Stock
beneficially owned by the directors of Seacoast, all such directors and
officers as a group and certain beneficial owners is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions
Information set forth under the heading "Proposal One - Election of
Directors - Salary and Benefits Committee Interlocks and Insider
Participation" and "Certain Transactions and Business Relationships" on
page 16 through 17 of the 2001 Proxy Statement is incorporated herein by
reference.
Part IV
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Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
a)(1) List of all financial statements
The following consolidated financial statements and report of independent
certified public accountants of Seacoast, included in the 2000 Annual
Report are incorporated by reference into Item 8 of this Annual Report on
Form 10-K.
Report of Independent Certified Public Accountants
Consolidated Balance Sheets as of December 31, 2000 and 1999
Consolidated Statements of Income for the years ended December 31, 2000,
1999 and 1998
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows for the years ended December 31,
2000, 1999 and 1998
Notes to Consolidated Financial Statements
a)(2) List of Financial Statement Schedules
Schedules to the consolidated financial statements required by Article 9 of
Regulation S-X are not required under the related instructions or are
inapplicable, and therefore have been omitted.
a)(3) Listing of Exhibits
The following Exhibits are filed as part of this report in Item 14 (c):
Exhibit 3.1 Amended and Restated Articles of Incorporation
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Incorporated herein by reference from registrant's Current Report on Form
8-K, File No. 0-13660, dated June 6, 1997
Exhibit 3.2 Amended and Restated By-laws of the Corporation
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Incorporated herein by reference from Exhibit 3.2 of Registrant's Current
Report on Form 8-K, File No. 0-13660, dated June 6, 1997
Exhibit 4.1 Specimen Class A Common Stock Certificate
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Incorporated herein by reference from Exhibit 4.1 of the Registrant's
Registration Statement on Form S-1, File No. 2-88829
Exhibit 4.2 Specimen Class B Common Stock Certificate
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Incorporated herein by reference from Exhibit 4.2 of registrant's
Registration Statement on Form S-1, File No. 2-88829
Exhibit 10.1 Profit Sharing Plan, as amended
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Incorporated herein by reference from registrants' Registration Statement
on Form S-8, File No. 33-22846, dated July 18, 1988, and as amended, from
Exhibit 10.1 of registrant's Annual Reports on Form 10-K, dated March 27,
1998.
Exhibit 10.2 Employee Stock Purchase Plan
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Incorporated herein by reference from registrant's Registration
Statement on Form S-8 File No. 33-25627, dated November 18, 1988
Exhibit 10.3 Amendment #1 to the Employee Stock Purchase Plan
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Incorporated herein by reference from registrant's Annual Reports on Form
10-K, dated March 29, 1991
Exhibit 10.4 Executive Employment Agreement
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Dated March 22, 1991 between A. Douglas Gilbert and the Bank, incorporated
herein by reference from registrant's Annual Reports on Form 10-K, dated
March 29, 1991
Exhibit 10.5 Executive Employment Agreement
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Dated January 18, 1994 between Dennis S. Hudson, III and the Bank,
incorporated herein by reference from registrant's Annual Reports on Form
10-K, dated March 28, 1995.
Exhibit 10.6 Executive Employment Agreement
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Dated July 31, 1995 between C. William Curtis, Jr. and the Bank,
incorporated herein by reference from registrant's Annual Reports
on Form 10-K, dated March 28, 1996.
Exhibit 10.8 1991 Stock Option & Stock Appreciation Rights Plan
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Incorporated herein by reference from registrant's Registration Statement
on Form S-8 File No. 33-61925, dated August 18, 1995.
Exhibit 10.9 1996 Long Term Incentive Plan
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Incorporated herein by reference from registrant's 1996 Proxy Statement,
dated March 21, 1996
Exhibit 10.10 Non-Employee Director Stock Compensation Plan
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Incorporated herein by reference from registrant's 1996 Registration
Statement on Form S-8 File No. 333-70399 dated January 11, 1999.
Exhibit 10.11 2000 Long Term Incentive Plan
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Incorporated herein by Reference from registrant's Registration Statement
on Form S-8 File No. 333-49972, dated November 15, 2000.
Exhibit 10.12 Executive Deferred Compensation Plan
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Dated October ____, 2000, but effective as of November 1, 2000.
Exhibit 13 2000 Annual Report
------------------------------
The following portions of the 2000 Annual Report are incorporated herein by
reference:
Financial Highlights
Financial Review - Management's Discussion and Analysis
Selected Quarterly Information - Quarterly Consolidated Income Statements
Selected Quarterly Information - Consolidated Quarterly Average Balances,
Yields & Rates
Financial Statements
Notes to Consolidated Financial Statements
Financial Statements - Report of Independent Certified Public Accountants
Exhibit 21 Subsidiaries of Registrant
--------------------------------------
Incorporated herein by reference from Exhibit 22 of Registrant's Annual
Report on Form 10-K, File No. 0-13660, dated March 17, 1992
Exhibit 23 Consent of Independent Certified Public Accountants
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b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of 2000.
c) Exhibits
The response to this portion of Item 14 is submitted as a separate section of
this report.
d) Financial Statement Schedules
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Stuart,
State of Florida, on the 28th day of March, 2001.
SEACOAST BANKING CORPORATION OF FLORIDA
(Registrant)
By: /s/ Dennis S. Hudson, III
--------------------------
Dennis S. Hudson, III
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date
/s/ Dale M. Hudson March 28, 2001
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Dale M. Hudson, Chairman of the Board
and Director
/s/ Dennis S. Hudson, III March 28, 2001
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Dennis S. Hudson, III, President,
Chief Executive Officer and Director
/s/ William R. Hahl March 28, 2001
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William R. Hahl, Executive Vice President and
Chief Financial Officer
/s/ Jeffrey C. Bruner March 28, 2001
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Jeffrey C. Bruner, Director
/s/ John H. Crane March 28, 2001
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John H. Crane, Director
/s/ Evans Crary, Jr. March 28, 2001
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Evans Crary, Jr., Director
/s/ Christopher E. Fogal March 28, 2001
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Christopher E. Fogal, Director
/s/ Jeffrey S. Furst March 28, 2001
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Jeffrey S. Furst, Director
/s/ Dennis S. Hudson, Jr. March 28, 2001
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Dennis S. Hudson, Jr., Director
__________________________________ March 28, 2001
John R. Santarsiero, Jr., Director
/s/ Thomas H. Thurlow, Jr. March 28, 2001
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Thomas H. Thurlow, Jr., Director