Exhibit 99.1

 

	Charles M. Shaffer
	Executive Vice President
	Chief Financial Officer
	(772) 221-7003
	Chuck.Shaffer@seacoastbank.com

 

SEACOAST REPORTS FOURTH QUARTER AND FULL-YEAR 2017 RESULTS

 

Full-Year 2017 Net Income Increased 47% to $42.9 Million

 

Achieved 19% Growth in Year-Over-Year Tangible Book Value per Share

 

Fourth Quarter Net Income Increased 21% Over the Prior Year Quarter to $13.0 Million

 

STUART, Fla., January 25, 2018 /GLOBENewswire/ — Seacoast Banking Corporation of Florida (“Seacoast” or “the Company”) (NASDAQ: SBCF) today reported net income of $13.0 million, or $0.28 per share for the fourth quarter of 2017, a 21% or $2.3 million increase from the fourth quarter of 2016. The Company reported fourth quarter adjusted net income¹ of $17.3 million, or $0.37 per share, representing a 46% or $5.5 million increase from the fourth quarter of 2016. Full-year 2017 net income was $42.9 million, or $0.99 per share, a 47% or $13.7 million increase compared to prior year results. Full-year 2017 adjusted net income¹ was $55.3 million, or $1.28 per share, a 42% or $16.3 million increase compared to prior year results.

 

For the fourth quarter 2017, return on average tangible assets was 0.97%, return on average tangible shareholders’ equity was 10.7%, and the efficiency ratio was 64.0%, compared to 1.12%, 12.5% and 58.9%, respectively, in the prior quarter and 1.00%, 12.5%, and 62.4%, respectively, in the fourth quarter of 2016.  Adjusted return on average tangible assets¹ was 1.23%, adjusted return on average tangible shareholders’ equity¹ was 13.5%, and the adjusted efficiency ratio¹ was 52.6%, compared to 1.16%, 12.8%, and 57.7%, respectively, in the prior quarter, and 1.05%, 13.1%, and 60.8%, respectively, in the fourth quarter of 2016. 

 

Dennis S. Hudson, III, Seacoast’s Chairman and CEO, said “Seacoast’s 2017 performance demonstrated our ability to consistently grow our banking franchise through both organic initiatives and prudent acquisitions, while simultaneously delivering record shareholder returns, highlighted by a 23% year-over-year increase in adjusted earnings per share. As we navigated the near-term impact of Hurricane Irma, we continued to drive earnings expansion while retaining the quality of our loan portfolio and investing to support our long-term growth objectives.”

 

Hudson added, “We expect that the recently passed Tax Cuts and Jobs Act of 2017 will further strengthen economic fundamentals across Florida. Our expansion into South Florida, Orlando and Tampa positions Seacoast to capture this expected economic growth in the coming year as we provide a compelling value proposition for consumers and business customers living and operating in these markets.”

 

Hudson concluded, “The continued execution of our balanced growth strategy, combined with the additional financial resources provided by the tax cut, will enable Seacoast to accelerate investments in our franchise, deliver incremental value for all stakeholders, and further advance our momentum toward our Vision 2020 objectives, which we introduced at our investor day last year.”

 

Charles M. Shaffer, Seacoast’s Chief Financial Officer, said, “We have been successful in allocating capital throughout the year into accretive opportunities, offsetting the initial dilution from our share issuance in February 2017. We have increased our tangible book value per share from $9.37 per share at the start of the year to $11.15 at year end, representing 19% growth in tangible capital per share. We are exiting the year with a ratio of tangible common equity to tangible assets of 9.4% and a loan to deposit ratio of 83%, providing both capital and low-cost funding for accretive growth in 2018. Our low cost of funding and asset sensitive balance sheet position us well for continued earnings growth in 2018.”

 

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

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles.  Prior periods have been revised to conform with the current period presentation.

 

 

Update on Vision 2020 and the Tax Cuts and Jobs Act of 2017

 

We are confident in our ability to achieve our Vision 2020 targets announced at investor day in February of 2017. The enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017 should have a significant positive impact on the United States economy and growth in our Florida markets. This clearly creates an opportunity for us to accelerate the achievement of our Vision 2020 objectives, through increased growth and appropriate investments. As the impact of this new legislation on our operating markets materializes, we will provide further updates on our progress and updated objectives.

 

	Vision 2020 Targets
Return on Tangible Assets	1.30%+
Return on Tangible Common Equity	16%+
Efficiency Ratio	Below 50%

 

Notable Items Affecting Fourth Quarter 2017 Results; These Items are Excluded from the Presentation of Adjusted Results

 

·

Additional income tax expense of $8.6 million was recorded to write down the Company’s net deferred tax asset as a result of the Tax Cuts and Jobs Act of 2017. This estimate is subject to additional procedures which could result in further adjustments in future periods.

·

A $15.2 million gain on the sale of shares of Visa Class B stock was recorded in the fourth quarter. These shares were purchased in early 2017.

·

Merger and acquisition related charges associated with the purchase of Palm Beach Community Bank and NorthStar Banking Corporation totaled $6.8 million. These charges primarily represent change in control payments, legal and investment banking fees, and technology contract termination fees associated with the two acquisitions.

 

Update on Hurricane Impacts

 

·

The Company recorded a charge-off of $0.6 million related to a customer with a Caribbean export business which was severely impacted by the fall season hurricanes.

·

Loan pipelines and production across all business lines were disrupted by the storms, the result of business interruption over multiple weeks in the fourth quarter.

 

Fourth Quarter 2017 Financial Highlights

 

Income Statement

 

·

Net income was $13.0 million, or $0.28 per average common diluted share, compared to $14.2 million or $0.32 for the prior quarter and $10.8 million or $0.28 for the fourth quarter of 2016. For the year ended December 31, 2017, net income was $42.9 million, or $0.99 per average common diluted share, compared to $29.2 million or $0.78 for the year ended December 31, 2016. Adjusted net income1 was $17.3 million, or $0.37 per average common diluted share, compared to $15.1 million or $0.35 for the prior quarter and $11.8 million or $0.31 for the fourth quarter of 2016. For the year ended December 31, 2017, adjusted net income1 was $55.3 million, or $1.28 per average common diluted share, compared to $39.1 million or $1.04 for the year ended December 31, 2016.

 

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

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles.  Prior periods have been revised to conform with the current period presentation.

 

 

·

Net revenues were $74.9 million, an increase of $17.7 million or 31% compared to the prior quarter, and an increase of $27.5 million or 58% from the fourth quarter of 2016. For the year ended December 31, 2017, net revenues were $234.8 million, an increase of $57.4 million or 32% compared to the year ended December 31, 2016. Adjusted revenues1 were $59.6 million, an increase of $2.4 million, or 4%, from the prior quarter and an increase of $12.3 million, or 26% from the fourth quarter of 2016. For the year ended December 31, 2017, adjusted revenues1 were $219.5 million, an increase of $43.0 million or 24% compared to the year ended December 31, 2016.

 

·

Net interest income totaled $48.2 million, an increase of $2.5 million or 5% from the prior quarter and an increase of $10.8 million or 29% from the fourth quarter of 2016. For the year ended December 31, 2017, net interest income totaled $176.3 million, an increase of $36.7 million or 26% compared to the year ended December 31, 2016.

 

·

Noninterest income totaled $26.6 million, an increase of $15.2 million or 133% compared to the prior quarter and an increase of $16.7 million or 168% from the fourth quarter of 2016. For the year ended December 31, 2017, noninterest income totaled $58.5 million, an increase of $20.7 million or 55% compared to the year ended December 31, 2016. Adjusted noninterest income1 totaled $11.4 million for the quarter, in line with the prior quarter and an increase of $1.5 million or 15% from the fourth quarter of 2016. For the year ended December 31, 2017, adjusted noninterest income1 totaled $43.2 million, an increase of $6.3 million or 17% compared to the year ended December 31, 2016. During the quarter the Company sold $28.4 million of residential mortgages originated in prior quarters at a $477 thousand gross premium, recorded as mortgage banking fee income. Brokerage commissions and fees were impacted by a transition during the quarter to a new broker-dealer, and by the effects of Hurricane Irma. Looking forward, we expect the technology solution provided by the new broker-dealer to provide further opportunities for growth. A focus on spend stimulation in the quarter drove additional growth in debit interchange income.

 

·

Net interest margin was 3.71% in the current quarter compared to 3.74% in the prior quarter and 3.56% in the fourth quarter of 2016. For the year ended December 31, 2017, the net interest margin was 3.73% compared to 3.63% for the year ended December 31, 2016. The net interest margin was affected this quarter when compared to the prior quarter by higher rates on deposits and lower non-cash related loan accretion.

 

·

The provision for loan losses was $2.3 million compared to $0.7 million in the prior quarter and $1.0 million in the fourth quarter of 2016. The increase of $1.6 million in the current quarter primarily reflects the effect of higher charge-offs. As discussed in the hurricane update above, $0.6 million of the current quarter charge-offs related to a single borrower whose business exporting to the Caribbean was significantly impacted by the storms. For the year ended December 31, 2017, the provision for loan losses was $5.6 million compared to $2.4 million for the year ended December 31, 2016, primarily the result of organic growth in the portfolio.

 

·

Noninterest expense was $39.2 million compared to $34.4 million in the prior quarter and $30.3 million in the fourth quarter of 2016. For the year ended December 31, 2017, noninterest expense was $150.0 million compared to $130.9 million in 2016. Adjusted noninterest expense1 was $31.4 million compared to $32.8 million in the prior quarter, and $28.9 million in the fourth quarter of 2016. For the year ended December 31, 2017, adjusted noninterest expense1 was $129.0 million compared to $114.2 million in 2016.

·

The current quarter’s noninterest expense includes an adjustment of $2.0 million of performance related incentives, and merger and acquisition related charges totaling $6.8 million. The merger and acquisition related charges primarily represent change in control payments, legal fees and investment banking, and technology contract termination fees associated with the two acquisitions.

 

·

Seacoast recorded a $20.4 million income tax provision in the current quarter, compared to $7.9 million in the prior quarter and $5.3 million in the fourth quarter of 2016. For the year ended December 31, 2017, the income tax provision was $36.3 million, compared to $14.9 million in 2016. This quarter’s tax provisioning included an $8.6 million charge for the write down of the company’s net deferred tax asset associated with the Tax Cuts and Jobs Act of 2017.

 

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

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles.  Prior periods have been revised to conform with the current period presentation.

 

 

·

Fourth quarter 2017 adjusted revenues1 increased 4% compared to prior quarter, while adjusted noninterest expense1 decreased 4%, providing 8% operating leverage. Full-year 2017 adjusted revenues1 increased 24% compared to prior year results, while adjusted noninterest expense1 increased 13%, providing 11% operating leverage.

 

·

The efficiency ratio was 64.0% compared to 58.9% in the prior quarter and 62.4% in the fourth quarter of 2016.  For the year ended December 31, 2017, the efficiency ratio was 66.7% compared to 72.1% in 2016. The adjusted efficiency ratio1 decreased to 52.6% compared to 57.7% in the prior quarter and 60.8% in the fourth quarter of 2016. For the year ended December 31, 2017 the adjusted efficiency ratio decreased to 57.0% compared to 64.6% in 2016.

 

Balance Sheet

 

·

At December 31, 2017, the Company had total assets of $5.8 billion and total shareholders' equity of $689.7 million.  Book value per share was $14.70 and tangible book value per share was $11.15, compared to $13.66 and $10.95, respectively, at September 30, 2017 and $11.45 and $9.37, respectively, at December 31, 2016.

 

·

Net loans totaled $3.8 billion at December 31, 2017, an increase of $432 million or 13% compared to September 30, 2017, and an increase of $934 million or 33% from December 31, 2016. Excluding acquisitions, loans increased $278 million or 10% from December 31, 2016.

·

During the fourth quarter, commercial originations were $132 million, consumer and small business originations were $80 million, and closed residential loans retained were $75.6 million.

·

We continue to prudently manage CRE exposure. At 61% and 209% of total risk-based capital respectively, construction and land development and commercial real estate loan concentrations remain well below regulatory guidance.

 

·

Pipelines (loans in underwriting and approval or approved and not yet closed) at year end continued to reflect the lingering effects of the fall season hurricanes. At December 31, 2017, pipelines were $119 million in commercial, $49 million in mortgage, and $39 million in consumer and small business.

·

Commercial pipelines decreased by $36 million, or 23%, from prior quarter and have increased $30 million, or 34%, over year-ago levels.

·

Mortgage pipelines were lower by $15 million, or 24%, from prior quarter and by $24 million, or 33%, compared to year-ago levels.

·

Consumer and small business decreased from prior quarter by $8 million, or 17%, and were lower than year-ago levels by $7 million, or 16%.

 

·

Total deposits were $4.6 billion as of December 31, 2017, an increase of $480 million, or 12%, compared to September 30, 2017 and an increase of $1.1 billion, or 30%, from December 31, 2016.

·

During 2017, interest bearing deposits (interest bearing demand, savings and money markets deposits) increased $393 million, or 19%, to $2.4 billion, noninterest bearing demand deposits increased $252 million, or 22%, to $1.4 billion, and CDs increased $424 million, or 121%, to $776 million.

·

Excluding acquired deposits, noninterest bearing deposits increased 7% and total deposits increased 4% compared to December 31, 2016.

·

The Company’s balance sheet continues to be primarily core deposit funded. Core customer funding was $4.0 billion at December 31, 2017, compared to $3.6 billion at September 30, 2017 and $3.4 billion at December 31, 2016.

·

Organic deposits grew 2% compared to prior quarter, with annualized quarterly growth of 10%.

·

Overall cost of deposits in the fourth quarter was 0.29%, reflecting the significant value of the deposit franchise.

 

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

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles.  Prior periods have been revised to conform with the current period presentation.

 

 

·

Fourth quarter return on average assets (ROA) was 0.91%, compared to 1.06% in the prior quarter and 0.94% from the fourth quarter of 2016. Return on average tangible assets (ROTA) was 0.97%, compared to 1.12% in the prior quarter and 1.00% in the fourth quarter of 2016. Adjusted ROTA1 was 1.23% compared to 1.16% in the prior quarter and 1.05% in the fourth quarter of 2016.

 

Capital

 

·

The common equity tier 1 capital ratio (CET1) was 12.0%, total capital ratio was 14.2% and the tier 1 leverage ratio was 10.6% at December 31, 2017.

·

Tangible common equity to tangible assets was 9.4% at December 31, 2017, compared to 9.1% at September 30, 2017, and 7.7% at December 31, 2016.

 

Asset Quality

 

·

Nonperforming loans to total loans outstanding was 0.47% at December 31, 2017, 0.42% at September 30, 2017, and 0.63% at December 31, 2016.

·

Nonperforming assets to total assets was 0.44% at December 31, 2017, 0.40% at September 30, 2017 and 0.60% at December 31, 2016. Of the $25.7 million in nonperforming assets, $4 million related to five closed branch properties held as REO.

·

The ratio of allowance for loan losses to total loans was 0.71% at December 31, 2017, 0.77% at September 30, 2017, and 0.81% at December 31, 2016. The ratio of allowance for loan losses to non-acquired loans was 0.90% at December 31, 2017, 0.91% at September 30, 2017, and 0.96% at December 31, 2016. The ratio of allowance for loan losses to acquired loans was 0.08% at December 31, 2017, 0.07% at September 30, 2017, and 0.03% at December 31, 2016.

 

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

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles.  Prior periods have been revised to conform with the current period presentation.

 

 

FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)		4Q17				3Q17				2Q17				1Q17				4Q16
Selected Balance Sheet Data (at period end):
Total Assets		$	5,810,129			$	5,340,299			$	5,281,295			$	4,769,775			$	4,680,932
Gross Loans			3,817,377				3,384,991				3,330,075				2,973,759				2,879,536
Total Deposits			4,592,720				4,112,600				3,975,458				3,678,645				3,523,245
Performance Measures:
Net Income		$	13,047			$	14,216			$	7,676			$	7,926			$	10,771
Net Interest Margin			3.71	%			3.74	%			3.84	%			3.63	%			3.56	%
Average Diluted Shares Outstanding (000)			46,673				43,792				43,556				39,499				38,252
Diluted Earnings Per Share (EPS)		$	0.28			$	0.32			$	0.18			$	0.20			$	0.28
Return on (annualized):
Average Assets (ROA)			0.91	%			1.06	%			0.61	%			0.68	%			0.94	%
Average Tangible Common Equity (ROTCE)			10.7				12.5				7.3				8.8				12.5
Efficiency Ratio			64.0				58.9				73.9				71.1				62.4
Adjusted Operating Measures 1:
Adjusted Net Income		$	17,261			$	15,145			$	12,665			$	10,270			$	11,803
Adjusted Diluted EPS			0.37				0.35				0.29				0.26				0.31
Adjusted ROTA			1.23	%			1.16	%			1.02	%			0.90	%			1.05	%
Adjusted ROTCE			13.5				12.8				11.2				10.7				13.1
Adjusted Efficiency Ratio			52.6				57.7				61.2				64.7				60.8
Adjusted Noninterest Expenses as a Percentage of Average Tangible Assets			2.24				2.50				2.73				2.71				2.56
Other Data
Market Capitalization		$	1,182,796			$	1,039,506			$	1,047,361			$	976,368			$	838,762
Full Time Equivalent Employees			805				762				759				743				725
Number of ATMs			85				74				76				76				77
Full service banking offices			51				45				45				46				47
Registered online users			83,881				78,880				75,394				71,385				67,243
Registered mobile devices			62,516				58,032				55,013				50,729				47,131

 

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

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles.  Prior periods have been revised to conform with the current period presentation.

 

 

Fourth Quarter and 2017 Strategic Highlights

 

Vision 2020, which we rolled out in the first quarter of last year, connects innovation and investments over the coming years to desired changes in our operating model, and to enhanced digital customer experience and shareholder returns.

 

Our operational execution during 2017 has enabled us to remain on track to achieve our Vision 2020 objectives. In 2018, we’ll invest a portion of the tax savings associated with the Tax Cuts and Jobs Act of 2017 to accelerate the achievement of these objectives.

 

Modernizing How We Sell

 

·

This year we continued our efforts to deepen customer relationships outside of our banking centers. The number of deposit accounts opened through our website and 24/7 customer support center grew by 12% year over year. Our Customer support center also originated $32.7 million in consumer and small business loans.

·

Our Commercial Banking and Operations teams partnered to increase efficiency across the loan origination process with a focus on optimizing technology, improving cycle time, and enhancing vendor partnerships. This effort will continue well into 2018.

 

Lowering Our Cost to Serve

 

·

Customer adoption of more convenient digital channels continues to grow. This summer, non-teller transactions surpassed teller transactions and 41% of checks are now deposited outside of the banking center network, compared to 37% in December of 2016. We expect this shift in customer preference to continue, requiring continued focus on building a digitally integrated business model.

 

Driving Improvements in How Our Business Operates

 

·

This year we successfully renegotiated our agreement with a key technology and digital services provider. The agreement expands digital banking capabilities, improves service level agreements, and increases our ability to scale.

·

In November, we consolidated our customer support center in Stuart, migrating all customer support operations to our Orlando location. The modernized, expanded site supports our 24/7 customer service model and our growth strategy.

 

Scaling and Evolving Our Culture

 

·

In the first quarter of 2018, a Chief Technology Officer was added to the executive team.

·

We also on-boarded key talent in the areas of data analysis, digital marketing, business-to-business marketing and compliance. These important additions to the Seacoast team help position us for future growth.

 

OTHER INFORMATION

 

Conference Call Information

Seacoast will host a conference call on Friday, January 26, 2018 at 10:00 a.m. (Eastern Time) to discuss the earnings results. Investors may call in (toll-free) by dialing (888) 517-2458 (passcode: 6006 509). 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 January 26, 2018 by dialing (888) 843-7419 and using passcode: 6006 509.

 

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 January 26, an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast will be available for one year.

 

 

About Seacoast Banking Corporation of Florida (NASDAQ: SBCF)

Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $5.8 billion in assets and $4.6 billion in deposits as of December 31, 2017. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 51 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 the adjacent Tampa market, and west to Okeechobee and surrounding counties. More information about the Company is available at SeacoastBanking.com.

 

Cautionary Notice Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning, and protections, of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, and for integration of banks that we have acquired, or expect to acquire, as well as statements with respect to Seacoast's objectives, strategic plans, including Vision 2020, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.

 

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, 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, 2016, 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.

 

 

 

FINANCIAL HIGHLIGHTS	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

(Dollars in thousands, except per share data)		Three Months Ended																				Twelve Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
		2017				2017				2017				2017				2016				2017				2016
Summary of Earnings
Net income		$	13,047			$	14,216			$	7,676			$	7,926			$	10,771			$	42,865			$	29,202
Net interest income  (1)			48,402				45,903				44,320				38,377				37,628				177,002				140,514
Net interest margin  (1), (2)			3.71	%			3.74	%			3.84	%			3.63	%			3.56	%			3.73	%			3.63	%
Performance Ratios
Return on average assets-GAAP basis (2)			0.91	%			1.06	%			0.61	%			0.68	%			0.94	%			0.82	%			0.69	%
Return on average tangible assets (2),(3)			0.97				1.12				0.66				0.74				1.00				0.88				0.75
Adjusted return on average tangible assets (2), (3), (5)			1.23				1.16				1.02				0.90				1.05				1.09				0.94
Return on average shareholders' equity-GAAP basis (2)			7.87				9.59				5.43				6.89				9.80				7.51				7.06
Return on average tangible shareholders' equity-GAAP basis (2),(3)			10.69				12.45				7.25				8.77				12.51				9.90				8.87
Adjusted return on average tangible common equity (2), (3), (5)			13.49				12.80				11.22				10.74				13.14				12.17				11.25
Efficiency ratio (4)			63.95				58.93				73.90				71.08				62.36				66.68				72.13
Adjusted efficiency ratio (5)			52.55				57.69				61.20				64.65				60.84				57.02				64.60
Noninterest income to total revenue			35.49				20.06				19.16				20.61				20.96				24.88				21.14
Average equity to average assets			11.50				11.06				11.17				9.93				9.56				10.96				9.85
Per Share Data
Net income diluted-GAAP basis		$	0.28			$	0.32			$	0.18			$	0.20			$	0.28			$	0.99			$	0.78
Net income basic-GAAP basis			0.29				0.33				0.18				0.20				0.29				1.01				0.79
Adjusted earnings (5)			0.37				0.35				0.29				0.26				0.31				1.28				1.04
Book value per share common			14.70				13.66				13.29				12.34				11.45				14.70				11.45
Tangible book value per share			11.15				10.95				10.55				10.41				9.37				11.15				9.37
Cash dividends declared			0.00				0.00				0.00				0.00				0.00				0.00				0.00

 

 

(1)

Calculated on a fully taxable equivalent basis using amortized cost.

(2)

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

(3)

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

(4)

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

(5)

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

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

		QUARTER																				YTD
		2017																2016				December 31,				December 31,
(Dollars in thousands, except share and per share data)		Fourth				Third				Second				First				Fourth				2017				2016
Interest on securities:
Taxable		$	9,153			$	8,823			$	8,379			$	8,087			$	6,880			$	34,442			$	26,133
Nontaxable			231				189				206				287				287				913				1,036
Interest and fees on loans			43,322				40,403				38,209				31,891				32,007				153,825				119,217
Interest on federal funds sold and other investments			638				664				604				510				517				2,416				1,669
Total Interest Income			53,344				50,079				47,398				40,775				39,691				191,596				148,055
Interest on deposits			1,246				930				854				624				622				3,654				2,593
Interest on time certificates			2,032				1,266				814				566				598				4,678				2,074
Interest on borrowed money			1,840				2,134				1,574				1,420				1,046				6,968				3,800
Total Interest Expense			5,118				4,330				3,242				2,610				2,266				15,300				8,467
Net Interest Income			48,226				45,749				44,156				38,165				37,425				176,296				139,588
Provision for loan losses			2,263				680				1,401				1,304				1,000				5,648				2,411
Net Interest Income After Provision for Loan Losses			45,963				45,069				42,755				36,861				36,425				170,648				137,177
Noninterest income:
Service charges on deposit accounts			2,566				2,626				2,435				2,422				2,612				10,049				9,669
Trust fees			941				967				917				880				969				3,705				3,433
Mortgage banking fees			1,487				2,138				1,272				1,552				1,616				6,449				5,864
Brokerage commissions and fees			273				351				351				377				480				1,352				2,044
Marine finance fees			313				137				326				134				115				910				673
Interchange income			2,836				2,582				2,671				2,494				2,334				10,583				9,227
Other deposit based EFT fees			111				100				114				140				125				465				477
BOLI income			1,100				836				757				733				611				3,426				2,213
Other			1,750				1,744				1,624				1,173				1,060				6,291				3,827
			11,377				11,481				10,467				9,905				9,922				43,230				37,427
Gain on sale of VISA stock			15,153				0				0				0				0				15,153				0
Securities gains/(losses), net			112				(47	)			21				0				7				86				368
Total Noninterest Income			26,642				11,434				10,488				9,905				9,929				58,469				37,795
Noninterest expenses:
Salaries and wages			16,321				15,627				18,375				15,369				12,476				65,692				54,096
Employee benefits			2,812				2,917				2,935				3,068				2,475				11,732				9,903
Outsourced data processing costs			4,160				3,231				3,456				3,269				3,076				14,116				13,516
Telephone / data lines			538				573				648				532				502				2,291				2,108
Occupancy			3,265				2,447				4,421				3,157				2,830				13,290				13,122
Furniture and equipment			1,806				1,191				1,679				1,391				1,211				6,067				4,720
Marketing			1,490				1,298				1,074				922				847				4,784				3,633
Legal and professional fees			3,054				2,560				3,276				2,132				2,370				11,022				9,596
FDIC assessments			558				548				650				570				661				2,326				2,365
Amortization of intangibles			964				839				839				719				719				3,361				2,486
Asset dispositions expense			105				117				136				53				84				411				553
Net loss/(gain) on other real estate owned and repossessed assets			(112	)			(414	)			161				(346	)			(161	)			(711	)			(509	)
Early redemption cost for Federal Home Loan Bank advances			0				0				0				0				0				0				1,777
Other			4,223				3,427				3,975				3,910				3,207				15,535				13,515
Total Noninterest Expenses			39,184				34,361				41,625				34,746				30,297				149,916				130,881
Income Before Income Taxes			33,421				22,142				11,618				12,020				16,057				79,201				44,091
Income taxes			20,374				7,926				3,942				4,094				5,286				36,336				14,889
Net Income		$	13,047			$	14,216			$	7,676			$	7,926			$	10,771			$	42,865			$	29,202
Per share of common stock:
Net income diluted		$	0.28			$	0.32			$	0.18			$	0.20			$	0.28			$	0.99			$	0.78
Net income basic			0.29				0.33				0.18				0.20				0.29				1.01				0.79
Cash dividends declared			0.00				0.00				0.00				0.00				0.00				0.00				0.00
Average diluted shares outstanding			46,672,538				43,792,108				43,556,285				39,498,835				38,252,351				43,350,314				37,508,046
Average basic shares outstanding			45,541,099				43,151,248				42,841,152				38,839,284				37,603,789				42,613,086				36,872,007

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands, except share data)		2017				2017				2017				2017				2016
Assets
Cash and due from banks		$	104,039			$	114,621				88,133			$	133,923			$	82,520
Interest bearing deposits with other banks			5,465				10,657				20,064				10,914				27,124
Total Cash and Cash Equivalents			109,504				125,278				108,197				144,837				109,644
Time deposits with other banks			12,553				14,591				16,426				0				0
Securities:
Available for sale (at fair value)			955,804				996,799				1,016,744				909,275				950,503
Held to maturity (at amortized cost)			416,863				374,773				397,096				379,657				372,498
Total Securities			1,372,667				1,371,572				1,413,840				1,288,932				1,323,001
Loans held for sale			24,306				29,447				22,262				16,326				15,332
Loans			3,817,377				3,384,991				3,330,075				2,973,759				2,879,536
Less: Allowance for loan losses			(27,122	)			(26,232	)			(26,000	)			(24,562	)			(23,400	)
Net Loans			3,790,255				3,358,759				3,304,075				2,949,197				2,856,136
Bank premises and equipment, net			66,883				57,092				56,765				58,611				58,684
Other real estate owned			7,640				7,142				8,497				7,885				9,949
Goodwill			147,578				101,747				101,739				64,649				64,649
Other intangible assets, net			19,099				16,102				16,941				13,853				14,572
Bank owned life insurance			123,981				118,762				88,003				85,237				84,580
Net deferred tax assets			25,417				43,951				52,195				55,834				60,818
Other assets			110,246				95,856				92,355				84,414				83,567
Total Assets		$	5,810,129			$	5,340,299			$	5,281,295			$	4,769,775			$	4,680,932
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest demand		$	1,400,227			$	1,284,118			$	1,308,458			$	1,225,124			$	1,148,309
Interest-bearing demand			1,050,755				935,097				934,861				870,457				873,727
Savings			434,346				379,499				376,825				363,140				346,662
Money market			931,458				870,788				861,119				821,606				802,697
Other time certificates			202,430				155,027				155,265				153,840				159,887
Brokered time certificates			217,385				281,551				149,270				66,741				7,342
Time certificates of $100,000 or more			356,119				206,520				189,660				177,737				184,621
Total Deposits			4,592,720				4,112,600				3,975,458				3,678,645				3,523,245
Securities sold under agreements to repurchase			216,094				142,153				167,558				183,107				204,202
Federal Home Loan Bank borrowings			211,000				389,000				395,000				302,000				415,000
Subordinated debt			70,521				70,451				70,381				70,311				70,241
Other liabilities			30,130				31,654				95,521				33,218				32,847
Total Liabilities			5,120,465				4,745,858				4,703,918				4,267,281				4,245,535
Shareholders' Equity
Common stock			4,693				4,351				4,339				4,075				3,802
Additional paid in capital			661,632				576,825				574,842				510,806				454,001
Accumulated earnings/(deficit)			29,208				16,161				1,945				(5,731	)			(13,657	)
Treasury stock			(2,359	)			(1,730	)			(1,768	)			(1,172	)			(1,236	)
			693,174				595,607				579,358				507,978				442,910
Accumulated other comprehensive income/(loss), net			(3,510	)			(1,166	)			(1,981	)			(5,484	)			(7,513	)
Total Shareholders' Equity			689,664				594,441				577,377				502,494				435,397
Total Liabilities & Shareholders' Equity		$	5,810,129			$	5,340,299			$	5,281,295			$	4,769,775			$	4,680,932
Common Shares Outstanding			46,917,735				43,512,179				43,458,973				40,715,938				38,021,835

 

 

Note: The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date.

 

 

CONSOLIDATED QUARTERLY FINANCIAL DATA	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

		QUARTERS
		2017																2016
(Dollars in thousands)		Fourth				Third				Second				First				Fourth
Credit Analysis
Net charge-offs (recoveries) - non-acquired loans		$	1,475			$	612			$	304			$	211			$	87
Net charge-offs (recoveries) - acquired loans			(139	)			(333	)			(405	)			(118	)			141
Total net charge-offs (recoveries)		$	1,336			$	279			$	(101	)		$	93			$	228
TDR valuation adjustments		$	37			$	169			$	64			$	49			$	55
Net charge-offs (recoveries) to average loans - non-acquired loans			0.16	%			0.07	%			0.04	%			0.03	%			0.01	%
Net charge-offs (recoveries) to average loans - acquired loans			(0.02	)			(0.04	)			(0.05	)			(0.02	)			0.02
Total net charge-offs (recoveries) to average loans			0.14				0.03				(0.01	)			0.01				0.03
Loan loss provision (recapture) - non-acquired loans		$	2,053			$	795			$	1,690			$	1,504			$	1,161
Loan loss provision (recapture) - acquired loans			210				(115	)			(289	)			(200	)			(161	)
Total loan loss provision		$	2,263			$	680			$	1,401			$	1,304			$	1,000
Allowance for loan losses - non-acquired loans		$	26,363			$	25,822			$	25,809			$	24,487			$	23,243
Allowance for loan losses - acquired loans			759				410				191				75				157
Total allowance for loan losses		$	27,122			$	26,232			$	26,000			$	24,562			$	23,400
Non-acquired loans at end of period		$	2,922,609			$	2,837,490			$	2,722,866			$	2,572,549			$	2,425,850
Purchased noncredit impaired loans at end of period			877,351				537,057				594,077				388,228				440,690
Purchased credit impaired loans at end of period			17,417				10,443				13,132				12,982				12,996
Total loans		$	3,817,377			$	3,384,990			$	3,330,075			$	2,973,759			$	2,879,536
Non-acquired loans allowance for loan losses to non-acquired loans at end of period			0.90	%			0.91	%			0.95	%			0.95	%			0.96	%
Total allowance for loan losses to total loans at end of period			0.71				0.77				0.78				0.83				0.81
Acquired loans allowance for loan losses to acquired loans at end of period			0.08				0.07				0.03				0.02				0.03
Discount for credit losses to acquired loans at end of period			2.33				2.77				3.37				4.25				4.18
End of Period
Nonperforming loans - non-acquired loans		$	11,088			$	10,877			$	10,541			$	10,557			$	11,023
Nonperforming loans - acquired loans			6,955				3,498				6,632				6,428				7,048
Other real estate owned - non-acquired			2,246				1,748				1,748				2,790				3,041
Other real estate owned - acquired			1,632				1,632				1,645				1,203				1,203
Bank branches closed included in other real estate owned			3,762				3,762				5,104				3,892				5,705
Total nonperforming assets		$	25,683			$	21,517			$	25,670			$	24,870			$	28,020
Restructured loans (accruing)		$	15,559			$	16,181			$	16,941			$	18,125			$	17,711
Nonperforming loans to loans at end of period - non-acquired loans			0.38	%			0.38	%			0.39	%			0.41	%			0.45	%
Nonperforming loans to loans at end of period - acquired loans			0.78				0.64				1.09				1.60				1.55
Allowance for loan losses to nonperforming loans - non-acquired loans			237.76				237.40				244.84				231.95				210.86
Total nonperforming loans to loans at end of period			0.47				0.42				0.52				0.57				0.63
Nonperforming assets to total assets - non-acquired			0.29	%			0.31	%			0.33	%			0.36	%			0.42	%
Nonperforming assets to total assets - acquired			0.15				0.10				0.16				0.16				0.18
Total nonperforming assets to total assets			0.44				0.40				0.49				0.52				0.60
Average Balances
Total average assets		$	5,716,230			$	5,316,119			$	5,082,002			$	4,699,745			$	4,572,188
Less: Intangible assets			149,432				118,364				114,563				78,878				79,620
Total average tangible assets		$	5,566,798			$	5,197,755			$	4,967,439			$	4,620,867			$	4,492,568
Total average equity		$	657,100			$	587,919			$	567,448			$	466,847			$	437,077
Less: Intangible assets			149,432				118,364				114,563				78,878				79,620
Total average tangible equity		$	507,668			$	469,555			$	452,885			$	387,969			$	357,457

 

		December 31,				September 30,				June 30,				March 31,				December 31,
LOANS		2017				2017				2017				2017				2016
Construction and land development		$	343,195			$	245,151			$	230,574			$	174,992			$	160,116
Commercial real estate			1,639,991				1,478,091				1,464,068				1,354,140				1,357,592
Residential real estate			1,038,740				941,169				991,144				893,674				836,787
Installment loans to individuals			188,712				184,485				178,595				165,039				153,945
Commercial and financial			606,015				535,457				465,138				385,189				370,589
Other loans			724				637				556				725				507
Total Loans		$	3,817,377			$	3,384,990			$	3,330,075			$	2,973,759			$	2,879,536

 

 

CONSOLIDATED QUARTERLY FINANCIAL DATA	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2017				2017				2017				2017				2016
Customer Relationship Funding
Noninterest demand
Commercial		$	1,073,539			$	997,749			$	995,720			$	916,940			$	860,449
Retail			253,454				217,809				238,506				234,109				220,134
Public funds			50,837				43,686				47,691				52,126				48,690
Other			22,397				24,874				26,541				21,949				19,036
			1,400,227				1,284,118				1,308,458				1,225,124				1,148,309
Interest-bearing demand
Commercial			157,272				156,176				155,178				117,629				102,320
Retail			702,616				670,705				659,906				613,121				591,808
Public funds			190,867				108,216				119,777				139,707				179,599
			1,050,755				935,097				934,861				870,457				873,727
Total transaction accounts
Commercial			1,230,811				1,153,925				1,150,898				1,034,569				962,769
Retail			956,070				888,514				898,412				847,230				811,942
Public funds			241,704				151,902				167,468				191,833				228,289
Other			22,397				24,874				26,541				21,949				19,036
			2,450,982				2,219,215				2,243,319				2,095,581				2,022,036
Savings			434,346				379,499				376,825				363,140				346,662
Money market
Commercial			375,471				360,567				351,871				313,094				286,879
Retail			471,086				431,325				427,575				414,886				411,696
Public funds			84,901				78,896				81,673				93,626				104,122
			931,458				870,788				861,119				821,606				802,697
Time certificates of deposit			775,934				643,098				494,195				398,318				351,850
Total Deposits		$	4,592,720			$	4,112,600			$	3,975,458			$	3,678,645			$	3,523,245
Customer sweep accounts		$	216,094			$	142,153			$	167,558			$	183,107			$	204,202
Total core customer funding (1)		$	4,032,880			$	3,611,655			$	3,648,821			$	3,463,434			$	3,375,597

 

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

 

 

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

 

		2017																								2016
		Fourth Quarter												Third Quarter												Fourth Quarter
		Average								Yield/				Average								Yield/				Average								Yield/
(Dollars in thousands)		Balance				Interest				Rate				Balance				Interest				Rate				Balance				Interest				Rate
Assets
Earning assets:
Securities:
Taxable		$	1,369,921			$	9,153				2.67	%		$	1,356,276			$	8,823				2.60	%		$	1,251,015			$	6,880				2.20	%
Nontaxable			31,282				354				4.53				26,256				290				4.42				28,589				441				6.17
Total Securities			1,401,203				9,507				2.71				1,382,532				9,113				2.64				1,279,604				7,321				2.29
Federal funds sold and other investments			79,025				638				3.20				76,773				664				3.43				90,437				517				2.28
Loans, net			3,691,344				43,375				4.66				3,407,376				40,456				4.71				2,833,895				32,056				4.50
Total Earning Assets			5,171,572				53,520				4.11				4,866,681				50,233				4.10				4,203,936				39,894				3.78
Allowance for loan losses			(26,298	)											(26,299	)											(22,819	)
Cash and due from banks			121,109												99,864												90,082
Premises and equipment			64,121												57,023												59,108
Intangible assets			149,432												118,364												79,620
Bank owned life insurance			123,272												95,759												48,954
Other assets			113,022												104,727												113,307
Total Assets		$	5,716,230											$	5,316,119											$	4,572,188
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand		$	976,295			$	367				0.15	%		$	927,278			$	273				0.12	%		$	812,056			$	149				0.07	%
Savings			431,124				94				0.09				377,729				52				0.05				343,753				44				0.05
Money market			929,914				785				0.33				870,166				605				0.28				824,440				429				0.21
Time deposits			761,720				2,032				1.06				548,092				1,266				0.92				360,712				598				0.66
Federal funds purchased and
securities sold under agreements to repurchase			166,006				231				0.55				165,160				204				0.49				184,612				110				0.24
Federal Home Loan Bank borrowings			320,380				968				1.20				439,755				1,293				1.17				339,457				392				0.46
Other borrowings			70,480				641				3.61				70,409				637				3.59				70,197				544				3.08
Total Interest-Bearing Liabilities			3,655,919				5,118				0.56				3,398,589				4,330				0.51				2,935,227				2,266				0.31
Noninterest demand			1,373,403												1,276,779												1,167,687
Other liabilities			29,808												52,832												32,197
Total Liabilities			5,059,130												4,728,200												4,135,111
Shareholders' equity			657,100												587,919												437,077
Total Liabilities & Equity		$	5,716,230											$	5,316,119											$	4,572,188
Interest expense as a % of earning assets											0.39	%											0.35	%											0.21	%
Net interest income as a % of earning assets						$	48,402				3.71	%						$	45,903				3.74	%						$	37,628				3.56	%

 

 

(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.

 

 

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

 

		2017												2016
		Year to Date												Year to Date
		Average								Yield/				Average								Yield/
(Dollars in thousands)		Balance				Interest				Rate				Balance				Interest				Rate
Assets
Earning assets:
Securities:
Taxable		$	1,316,972			$	34,442				2.61	%		$	1,174,627			$	26,133				2.22	%
Nontaxable			28,369				1,401				4.94				25,841				1,592				6.16
Total Securities			1,345,341				35,843				2.66				1,200,468				27,725				2.31
Federal funds sold and other investments			71,352				2,416				3.39				75,442				1,669				2.21
Loans, net			3,323,403				154,043				4.64				2,584,389				119,587				4.63
Total Earning Assets			4,740,096				192,302				4.06				3,860,299				148,981				3.86
Allowance for loan losses			(25,485	)											(21,131	)
Cash and due from banks			106,710												88,919
Premises and equipment			59,842												60,470
Intangible assets			115,511												66,611
Bank owned life insurance			97,939												45,009
Other assets			112,004												101,645
Total Assets		$	5,206,617											$	4,201,822
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand		$	922,353			$	1,065				0.12	%		$	764,917			$	616				0.08	%
Savings			385,515				241				0.06				325,371				161				0.05
Money market			868,427				2,348				0.27				791,998				1,816				0.23
Time deposits			523,646				4,678				0.89				351,646				2,074				0.59
Federal funds purchased and securities sold under agreements to repurchase			171,686				782				0.46				187,560				484				0.26
Federal Home Loan Bank borrowings			377,396				3,743				0.99				198,268				1,256				0.63
Other borrowings			70,377				2,443				3.47				70,097				2,060				2.94
Total Interest-Bearing Liabilities			3,319,400				15,300				0.46				2,689,857				8,467				0.31
Noninterest demand			1,279,825												1,066,463
Other liabilities			36,993												31,628
Total Liabilities			4,636,218												3,787,948
Shareholders' equity			570,399												413,874
Total Liabilities & Equity		$	5,206,617											$	4,201,822
Interest expense as a % of earning assets											0.32	%											0.22	%
Net interest income as a % of earning assets						$	177,002				3.73	%						$	140,514				3.63	%

 

 

(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.

 

 

Explanation of Certain Unaudited Non-GAAP Financial Measures

 

This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’ understanding of the Company’s business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might 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.

 

Effective in the first quarter of 2017, adjusted net income and adjusted noninterest expense exclude the effect of amortization of acquisition-related intangibles. Prior periods have been revised to conform with the current period presentation.

 

 

		QUARTER																				YTD
		Fourth				Third				Second				First				Fourth				December 31,				December 31,
(Dollars in thousands except per share data)		2017				2017				2017				2017				2016				2017				2016
Net income		$	13,047			$	14,216			$	7,676			$	7,926			$	10,771			$	42,865			$	29,202
BOLI income (benefits upon death)			0				0				0				0				0				0				(464	)
Gain on Sale of Visa Class B Shares			(15,153	)			0				0				0				0				(15,153	)			0
Security (gains) / losses			(112	)			47				(21	)			0				(7	)			(86	)			(368	)
Total Adjustments to Revenue			(15,265	)			47				(21	)			0				(7	)			(15,239	)			(832	)
Merger related charges			6,817				491				5,081				533				561				12,922				9,028
Amortization of intangibles			963				839				839				719				719				3,360				2,486
Business continuity expenses - Hurricane Irma			0				352				0				0				0				352				0
Branch reductions and other expense initiatives			0				(127	)			1,876				2,572				163				4,321				3,357
Early redemption cost for FHLB advances			0				0				0				0				0				0				1,777
Total Adjustments to Noninterest Expense			7,780				1,555				7,796				3,824				1,443				20,955				16,648
Effective tax rate on adjustments			3,147				(673	)			(2,786	)			(1,480	)			(404	)			(1,792	)			(5,949	)
Effect of change in corporate tax rate			8,552				0				0				0				0				8,552				0
Adjusted Net Income		$	17,261			$	15,145			$	12,665			$	10,270			$	11,803			$	55,341			$	39,069
Earnings per diluted share, as reported			0.28				0.32				0.18				0.20				0.28				0.99				0.78
Adjusted Earnings per Diluted Share			0.37				0.35				0.29				0.26				0.31				1.28				1.04
Average shares outstanding (000)			46,673				43,792				43,556				39,499				38,252				43,350				37,508
Revenue		$	74,868			$	57,183			$	54,644			$	48,070			$	47,354			$	234,765			$	177,383
Total Adjustments to Revenue			(15,265	)			47				(21	)			0				(7	)			(15,239	)			(832	)
Adjusted Revenue			59,603				57,230				54,623				48,070				47,347				219,526				176,551
Noninterest Expense			39,184				34,361				41,625				34,746				30,297				149,916				130,881
Total Adjustments to Noninterest Expense			7,780				1,555				7,796				3,824				1,443				20,955				16,648
Adjusted Noninterest Expense			31,404				32,806				33,829				30,922				28,854				128,961				114,233
Adjusted Noninterest Expense			31,404				32,806				33,829				30,922				28,854				128,961				114,233
Foreclosed property expense and net (gain)/loss on sale			(7	)			(298	)			297				(293	)			(78	)			(301	)			43
Net Adjusted Noninterest Expense			31,411				33,104				33,532				31,215				28,932				129,262				114,190
Adjusted Revenue			59,603				57,230				54,623				48,070				47,347				219,526				176,551
Impact of FTE adjustment			174				154				164				211				204				703				204
Adjusted Revenue on a fully taxable equivalent basis			59,777				57,384				54,787				48,281				47,551				220,229				176,755
Adjusted Efficiency Ratio			52.6	%			57.7	%			61.2	%			64.7	%			60.8	%			58.7	%			64.6	%
Average Assets		$	5,716,230			$	5,316,119			$	5,082,002			$	4,699,745			$	4,572,188			$	5,206,617			$	4,201,819
Less average goodwill and intangible assets			(149,432	)			(118,364	)			(114,563	)			(78,878	)			(79,620	)			(115,511	)			(66,608	)
Average Tangible Assets			5,566,798				5,197,755				4,967,439				4,620,867				4,492,568				5,091,106				4,135,211
Return on Average Assets (ROA)			0.91	%			1.06	%			0.61	%			0.68	%			0.94	%			0.82	%			0.69	%
Impact of removing average intangible assets and related amortization			0.06				0.06				0.05				0.06				0.06				0.06				0.05
Return on Tangible Average Assets (ROTA)			0.97				1.12				0.66				0.74				1.00				0.88				0.74
Impact of other adjustments for Adjusted Net Income			0.26				0.04				0.36				0.16				0.05				0.21				0.20
Adjusted Return on Average Tangible Assets			1.23				1.16				1.02				0.90				1.05				1.09				0.94
Average Shareholders' Equity		$	657,100			$	587,919			$	567,448			$	466,847			$	437,077			$	570,399			$	406,084
Less average goodwill and intangible assets			(149,432	)			(118,364	)			(114,563	)			(78,878	)			(79,620	)			(115,511	)			(66,608	)
Average Tangible Equity			507,668				469,555				452,885				387,969				357,457				454,888				339,476
Return on Average Shareholders' Equity			7.9	%			9.6	%			5.4	%			6.9	%			9.8	%			7.5	%			7.2	%
Impact of removing average intangible assets and related amortization			2.8				2.9				1.9				1.9				2.7				2.4				1.9
Return on Average Tangible Common Equity (ROTCE)			10.7				12.5				7.3				8.8				12.5				9.9				9.1
Impact of other adjustments for Adjusted Net Income			2.8				0.3				3.9				1.9				0.6				2.3				2.4
Adjusted Return on Average Tangible Common Equity			13.5				12.8				11.2				10.7				13.1				12.2				11.5