Exhibit 99.1

 

 

Charles M. Shaffer

Executive Vice President

Chief Financial Officer

(772) 221-7003

Chuck.Shaffer@seacoastbank.com

 

SEACOAST REPORTS FIRST QUARTER 2018 RESULTS

Net Income Increased 127% Year-Over-Year to $18.0 Million; Net Revenue Increased 29% to $62.1 Million

 

Net Interest Margin Expanded 9 Basis Points from Prior Quarter

 

11% Annualized First Quarter Deposit Growth

 

Record Level of Consumer and Small Business Loan Originations

 

STUART, Fla., April 26, 2018 /GLOBE NEWSWIRE/ -- Seacoast Banking Corporation of Florida (“Seacoast” or “the Company”) (NASDAQ: SBCF) reported net income of $18.0 million, or $0.38 per share for the first quarter of 2018, a 127% or $10.1 million increase year-over-year. Seacoast reported adjusted net income¹ of $19.3 million, or $0.40 per share, representing an 88% or $9.0 million increase year-over-year.

 

For the first quarter 2018, return on average tangible assets was 1.34%, return on average tangible shareholders’ equity was 14.4%, and the efficiency ratio was 57.8%, compared to 0.97%, 10.7% and 64.0%, respectively, in the prior quarter and 0.74%, 8.8%, and 71.1%, respectively, in the first quarter of 2017.  Adjusted return on average tangible assets¹ was 1.38%, adjusted return on average tangible shareholders’ equity¹ was 14.8%, and the adjusted efficiency ratio¹ was 57.1%, compared to 1.23%, 13.5%, and 52.6%, respectively, in the prior quarter, and 0.90%, 10.7%, and 64.7%, respectively, in the first quarter of 2017. 

 

Dennis S. Hudson, III, Seacoast’s Chairman and CEO, said “Our strong financial and operating performance laid the foundation for driving sustained earnings growth throughout 2018 and beyond. We delivered robust deposit growth that supported margin expansion and achieved higher revenue across all of our business lines. Further, our ongoing commitment to leverage innovative data analytics has not only proven to be a valuable cost effective tool to better service our customers but has also supported a record quarter of consumer and small business originations.”

 

Hudson added, “Our balanced growth strategy, a combination of organic growth and acquisitions, continues to create value for shareholders. We have successfully completed the integration and cost rationalization of all three of our recent acquisitions, positioning Seacoast for further expansion in some of Florida’s largest and fastest growing markets.”

 

Charles M. Shaffer, Seacoast’s Chief Financial Officer, said, “Our quarterly results demonstrate our ability to balance a disciplined approach to credit, liquidity and expense management, while achieving strong organic growth. This led to higher shareholder returns, underscored by the increase in tangible book value per share to $11.39. With a loan-to-deposit ratio of 84% and a ratio of tangible common equity to tangible assets of 9.3%, our balance sheet enables us the flexibility to be prudent yet opportunistic in funding organic growth initiatives as well as accretive acquisitions.”

 

 

1

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

 

 

First Quarter 2018 Financial Highlights

 

Income Statement

 

·

Net income was $18.0 million, or $0.38 per diluted share, compared to $13.0 million or $0.28 for the prior quarter and $7.9 million or $0.20 for the first quarter of 2017. Adjusted net income1 was $19.3 million, or $0.40 per diluted share, compared to $17.3 million or $0.37 for the prior quarter and $10.3 million or $0.26 for the first quarter of 2017.

 

·

Net revenues were $62.1 million, a decrease of $12.8 million or 17% compared to the prior quarter, and an increase of $14.0 million or 29% compared to the first quarter of 2017. Prior quarter results include a $15.2 million gain on the sale of Visa Class B stock. Adjusted revenues1 were $62.2 million, an increase of $2.6 million, or 4%, from the prior quarter and an increase of $14.1 million, or 29% from the first quarter of 2017.

 

·

Net interest income totaled $49.8 million, an increase of $1.5 million or 3% from the prior quarter and an increase of $11.6 million or 30% from the first quarter of 2017.

 

·

Net interest margin was 3.80% in the current quarter compared to 3.71% in the prior quarter and 3.63% in the first quarter of 2017. The increase in the current quarter reflects the positive impact on loans and securities of increases in benchmark interest rates, higher add-on rates for new loan production, and growth in demand deposits. Partially offsetting, the cost of interest bearing liabilities increased 6 basis points.

 

·

Noninterest income totaled $12.3 million, a decrease of $14.3 million or 54% compared to the prior quarter and an increase of $2.4 million or 24% from the first quarter of 2017. Results in the fourth quarter of 2017 included a $15.2 million gain on the sale of Visa Class B stock. Adjusted noninterest income1 totaled $12.4 million for the quarter, an increase of $1.0 million or 9% compared to prior quarter and an increase of $2.5 million or 25% from the first quarter of 2017. During the quarter, growth across our businesses and markets resulted in improvements in nearly every category. Other income benefited from continued progress by our SBA lending group, resulting in recognized gains on sale of $0.7 million in the quarter, an increase of $0.5 million from the fourth quarter of 2017.

 

·

The provision for loan losses was $1.1 million, compared to $2.3 million in the prior quarter and $1.3 million in the first quarter of 2017, reflecting continuing positive credit trends.

 

·

Noninterest expense was $37.2 million compared to $39.2 million in the prior quarter and $34.7 million in the first quarter of 2017. In the prior quarter, noninterest expense included a favorable adjustment of $2.0 million of performance related incentives, and charges totaling $6.8 million associated with the fourth-quarter bank acquisitions. Adjusted noninterest expense1 was $35.7 million compared to $31.4 million in the prior quarter, and $30.9 million in the first quarter of 2017. The increase quarter over quarter in adjusted noninterest expense1 is the result of the full impact of the two acquisitions, normalized compensation accruals, and the return of seasonal 401k and payroll tax expenses.

 

·

Seacoast recorded $5.8 million in income tax expense in the current quarter, compared to $20.4 million in the prior quarter and $4.1 million in the first quarter of 2017. The effective tax rate of 24.3% in the current quarter reflects the positive impact of the new lower corporate tax rate, offset by the effect of an additional $0.3 million write down of deferred tax assets arising from measurement period adjustments on a prior year bank acquisition. The write down of these assets in the current quarter increased the effective tax rate by 1.1%.

 

·

The efficiency ratio was 57.8% compared to 64.0% in the prior quarter and 71.1% in the first quarter of 2017. The adjusted efficiency ratio1 was 57.1% compared to 52.6% in the prior quarter and 64.7% in the first quarter of 2017.

 

 

1

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

 

 

Balance Sheet

 

·

At March 31, 2018, the Company had total assets of $5.9 billion and total shareholders' equity of $701.9 million.  Book value per share was $14.94 and tangible book value per share was $11.39, compared to $14.70 and $11.15, respectively, at December 31, 2017 and $12.34 and $10.41, respectively, at March 31, 2017. Excluding the $7.9 million decline in accumulated other comprehensive income during the quarter, the result of the impact of higher interest rates on available for sale securities, tangible book value per share would have been $11.56.

 

·

Net loans totaled $3.9 billion at March 31, 2018, an increase of $78.8 million or 8% annualized in the current quarter, and an increase of $920 million or 31% from March 31, 2017. Excluding the acquisitions in 2017, loans increased $265 million or 9% from March 31, 2017.

·

Consumer and small business originations reached a record $98.4 million.

·

Closed residential loans retained were $79.1 million, an increase of 5% from the prior quarter.

·

Commercial originations were $122.1 million. We continue to prudently manage commercial real estate exposure. Construction and land development and commercial real estate loans remain well below regulatory guidance with construction and land development at 63% and commercial real estate at 206% of total risk based capital, respectively.

 

·

Pipelines (loans in underwriting and approval or approved and not yet closed) have rebounded from the impact of the fall hurricane season. At March 31, 2018, pipelines were $50.4 million in consumer and small business, $70.8 million in residential, and $122.7 million in commercial.

·

Consumer and small business pipelines were higher by $11.5 million, or 30%, compared to the prior quarter.

·

Residential pipelines were higher by $21.9 million, or 45%, from prior quarter.

·

Commercial pipelines increased by $3.8 million, or 3%, from prior quarter.

 

·

Total deposits were $4.7 billion as of March 31, 2018, an increase of $127 million, or 11% annualized in the current quarter, and an increase of $1.0 billion, or 28%, from March 31, 2017.

·

Since March 31, 2017, interest bearing deposits (interest bearing demand, savings and money markets deposits) increased $433 million, or 21%, to $2.5 billion, noninterest bearing demand deposits increased $263 million, or 21%, to $1.5 billion, and CDs increased $345 million, or 86%, to $743 million.

·

Excluding acquired deposits, noninterest bearing deposits increased 8% and total deposits increased 5% compared to March 31, 2017.

·

The Company’s balance sheet continues to be primarily core deposit funded. Core customer funding was $4.1 billion at March 31, 2018, compared to $4.0 billion at December 31, 2017 and $3.5 billion at March 31, 2017.

·

Overall cost of deposits remains attractive at 0.33%.

 

·

First quarter return on average tangible assets (ROTA) was 1.34%, compared to 0.97% in the prior quarter and 0.74% in the first quarter of 2017. Adjusted ROTA1 was 1.38% compared to 1.23% in the prior quarter and 0.90% in the first quarter of 2017.

 

Capital

 

·

First quarter return on average tangible common equity (ROTCE) was 14.4%, compared to 10.7% in the prior quarter and 8.8% in the first quarter of 2017. Adjusted ROTCE1 was 14.8% compared to 13.5% in the prior quarter and 10.7% in the first quarter of 2017.

·

The common equity tier 1 capital ratio (CET1) was 12.7%, total capital ratio was 15.0% and the tier 1 leverage ratio was 10.7% at March 31, 2018.

·

Tangible common equity to tangible assets was 9.3% at March 31, 2018, compared to 9.3% at December 31, 2017, and 9.0% at March 31, 2017.

 

  

Asset Quality

 

·

Nonperforming loans to total loans outstanding was 0.50% at March 31, 2018, 0.51% at December 31, 2017, and 0.57% at March 31, 2017.

·

Nonperforming assets to total assets was 0.50% at March 31, 2018, 0.47% at December 31, 2017 and 0.52% at March 31, 2017. Of the $29.6 million in nonperforming assets, $3.1 million related to four closed branch properties held as REO.

·

The ratio of allowance for loan losses to total loans was 0.72% at March 31, 2018, 0.71% at December 31, 2017, and 0.83% at March 31, 2017. The ratio of allowance for loan losses to non-acquired loans was 0.90% at March 31, 2018, 0.90% at December 31, 2017, and 0.95% at March 31, 2017. Net charges offs were near zero for the current quarter, reflecting continued strong credit trends.

 

 

FINANCIAL HIGHLIGHTS					(Unaudited)
(Amounts in thousands except per share data)

  

		Quarterly Trends
		1Q'18				4Q'17				3Q'17				2Q'17				1Q'17
Selected Balance Sheet Data:
Total Assets		$	5,903,101			$	5,810,129			$	5,340,413			$	5,281,295			$	4,769,775
Gross Loans			3,897,125				3,817,377				3,384,991				3,330,075				2,973,759
Total Deposits			4,719,543				4,592,720				4,112,600				3,975,458				3,678,645
Performance Measures:
Net Income			18,027				13,047				14,216				7,676				7,926
Net Interest Margin			3.80	%			3.71	%			3.74	%			3.84	%			3.63	%
Average Diluted Shares Outstanding			47,688				46,473				43,792				43,556				39,499
Diluted Earnings Per Share (EPS)		$	0.38			$	0.28			$	0.32			$	0.18			$	0.20
Return on (annualized):
Average Assets (ROA)			1.25	%			0.91	%			1.06	%			0.61	%			0.68	%
Average Tangible Common Equity (ROTCE)			14.41				10.69				12.45				7.25				8.77
Efficiency Ratio			57.80				64.00				58.90				73.90				71.10
Adjusted Operating Measures1:
Adjusted Net Income		$	19,298			$	17,261			$	15,145			$	12,665			$	10,270
Adjusted Diluted EPS			0.40				0.37				0.35				0.29				0.26
Adjusted ROTA			1.38	%			1.23	%			1.16	%			1.02	%			0.90	%
Adjusted ROTCE			14.8				13.5				12.8				11.2				10.7
Adjusted Efficiency Ratio			57.1				52.6				57.7				61.2				64.7
Adjusted Noninterest Expenses as a Percent of Average Tangible Assets			2.55				2.24				2.50				2.73				2.71
Other Data
Market capitalization2		$	1,243,644			$	1,182,796			$	1,039,506			$	1,047,361			$	976,368
Full-time equivalent employees			814				805				762				759				743
Number of ATMs			86				85				76				76				76
Full service banking offices			49				51				45				45				46
Registered online users			91,636				83,881				78,880				75,394				71,385
Registered mobile devices			65,336				62,516				58,032				55,013				50,729

 

1

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

2

Common shares outstanding multiplied by closing bid price on last day of each period

  

 

Vision 2020

 

We are confident in our ability to achieve our Vision 2020 targets announced at our 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. 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%

 

First Quarter Strategic Highlights

 

Modernizing How We Sell

·

Small Business Administration (SBA) activity saw significant growth from the prior year, driven by streamlined processes and a new technology partnership, resulting in $0.7 million in noninterest income in the current quarter. We expect continued growth in this segment over the remainder of the year.

·

Late last year Seacoast Wealth Management migrated its third-party brokerage platform to an industry leading provider. The shift will provide better tools, sales support, and technology.

·

In early 2016, we invested in a team of wealth management professionals in the Central Florida market. This team has contributed to originations of $120 million in new assets under management in the last twelve months, resulting in a record quarter for trust fee income.

·

In 2018 we’ll further connect our Bankers with insights to better meet customer needs. We’ll make enhancements to our proprietary Connections portal which provides our Bankers with greater access to customer service/activity timelines and opportunities to better meet customer needs and improve engagement.

·

We’re focused on continuing to improve revenue per customer. Since we began applying our proprietary methodology in mid-2015, risk adjusted revenue per customer has grown by 30%. These results were achieved by using analytics and marketing automation combined with improved sales execution to improve customer engagement. This methodology has allowed us to focus our prospecting and relationship deepening efforts on those customers with the largest economic opportunity. Our focus to date has been consumer and small business segments. Our objective in 2018 is to expand to other business units within the franchise.

 

Lowering Our Cost to Serve

·

We consolidated two recently-acquired banking center locations in the first quarter 2018, consistent with our strategy of reducing our footprint to provide funding for technology investments needed to meet the evolving demands of our customers.

·

We continue to invest in our Florida call center to support our growth strategy and our 24/7 customer service model. Last year, we migrated operations to the Orlando area; and in 2018, we expect to modernize our software platform to improve our self-serve options for customers and streamline manual processes for associates.

 

Driving Improvements in How Our Business Operates

·

In 2017, we outsourced a portion of our mortgage fulfillment and processing services to create greater scalability. This capability was demonstrated in the first quarter during which we generated near record mortgage originations while maintaining cycle times.

·

We are focused on creating more efficient fulfillment and customer service processes, especially in Commercial Banking, by investing in equipment and software upgrades to ensure data quality and our ability to scale efficiently, and improving our analytics and reporting services, resulting in greater operating leverage.

  

Scaling and Evolving Our Culture

·

In February, we welcomed Amie Seymour to Seacoast as EVP, Chief Technology Officer. Amie’s focus is the continued development and execution of the Bank’s overall technology roadmap. Prior to joining Seacoast, Amie worked for Raymond James Financial as Vice President of Information Technology and Chief of Staff to the Chief Information Officer. Prior, Amie was the Chief Information Officer for a global digital consumer finance company, DFC Global, where she was instrumental in integrating various acquired companies and supporting lending businesses in eight countries.  Prior to DFC Global, she served at Capital One Financial Corporation leading development of the first mobile application and was a founding member of the innovation lab.

 

 

OTHER INFORMATION

 

Conference Call Information

Seacoast will host a conference call on Friday, April 27, 2018 at 10:00 a.m. (Eastern Time) to discuss the earnings results. Investors may call in (toll-free) by dialing (888) 466-9845 (passcode: 9476 549). Slides will be used during the conference call and may be accessed at Seacoast's website at SeacoastBanking.com by selecting "Presentations" under the heading "Investor Services." A replay of the call will be available for one month, beginning late afternoon of April 27, 2018 by dialing (888) 843-7419 and using passcode: 9476 549#.

 

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 "News/Events" under the heading "Press Releases." Beginning the afternoon of April 27, 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 $5.9 billion in assets and $4.7 billion in deposits as of March 31, 2018. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 49 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, 2017, 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)		Quarterly Trends
		1Q'18				4Q'17				3Q'17				2Q'17				1Q'17
Summary of Earnings
Net income		$	18,027			$	13,047			$	14,216			$	7,676			$	7,926
Adjusted net income (1)			19,298				17,261				15,145				12,665				10,270
Net interest income  (2)			49,853				48,402				45,903				44,320				38,377
Net interest margin  (2), (3)			3.80	%			3.71	%			3.74	%			3.84	%			3.63
Performance Ratios
Return on average assets-GAAP basis (3)			1.25	%			0.91	%			1.06	%			0.61	%			0.68
Return on average tangible assets (3),(4)			1.34				0.97				1.12				0.66				0.74
Adjusted return on average tangible assets (1), (3), (4)			1.38				1.23				1.16				1.02				0.90
Return on average shareholders' equity-GAAP basis (3)			10.52				7.87				9.59				5.43				6.89
Return on average tangible shareholders' equity-GAAP basis (3),(4)			14.41				10.69				12.45				7.25				8.77
Adjusted return on average tangible common equity (1), (3), (4)			14.82				13.49				12.80				11.22				10.74
Efficiency ratio (5)			57.80				63.95				58.93				73.90				71.08
Adjusted efficiency ratio (1)			57.05				52.55				57.69				61.20				64.65
Noninterest income to total revenue			19.95				35.49				20.06				19.16				20.61
Tangible common equity to tangible assets			9.33				9.27				9.13				8.88				9.04
Loan-to-deposit ratio			84.10				82.54				85.18				83.48				83.12
Per Share Data
Net income diluted-GAAP basis		$	0.38			$	0.28			$	0.32			$	0.18			$	0.20
Net income basic-GAAP basis			0.38				0.29				0.33				0.18				0.20
Adjusted earnings (1)			0.40				0.37				0.35				0.29				0.26
Book value per share common			14.94				14.70				13.66				13.29				12.34
Tangible book value per share			11.39				11.15				10.95				10.55				10.41
Cash dividends declared			0.00				0.00				0.00				0.00				0.00

(1)

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

(2)

Calculated on a fully taxable equivalent basis using amortized cost.

(3)

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

(4)

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

(5)

Defined as (noninterest expense less amortization of intangibles and 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).

 

 

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

 

		Quarterly Trends
(Dollars in thousands, except share and per share data)		1Q'18				4Q'17				3Q'17				2Q'17				1Q'17
Interest on securities:
Taxable		$	9,361			$	9,153			$	8,823			$	8,379			$	8,087
Nontaxable			243				231				189				206				287
Interest and fees on loans			45,257				43,322				40,403				38,209				31,891
Interest on federal funds sold and other investments			616				638				664				604				510
Total Interest Income			55,477				53,344				50,079				47,398				40,775
Interest on deposits			1,538				1,246				930				854				624
Interest on time certificates			2,179				2,032				1,266				814				566
Interest on borrowed money			1,998				1,840				2,134				1,574				1,420
Total Interest Expense			5,715				5,118				4,330				3,242				2,610
Net Interest Income			49,762				48,226				45,749				44,156				38,165
Provision for loan losses			1,085				2,263				680				1,401				1,304
Net Interest Income After Provision for Loan Losses			48,677				45,963				45,069				42,755				36,861
Noninterest income:
Service charges on deposit accounts			2,672				2,566				2,626				2,435				2,422
Trust fees			1,021				941				967				917				880
Mortgage banking fees			1,402				1,487				2,138				1,272				1,552
Brokerage commissions and fees			359				273				351				351				377
Marine finance fees			573				313				137				326				134
Interchange income			2,942				2,836				2,582				2,671				2,494
BOLI income			1,056				1,100				836				757				733
Other			2,373				1,861				1,844				1,738				1,313
			12,398				11,377				11,481				10,467				9,905
Gain on sale of VISA stock			0				15,153				0				0				0
Securities gains/(losses), net			(102	)			112				(47	)			21				0
Total Noninterest Income			12,296				26,642				11,434				10,488				9,905
Noninterest expenses:
Salaries and wages			15,381				16,321				15,627				18,375				15,369
Employee benefits			3,081				2,812				2,917				2,935				3,068
Outsourced data processing costs			3,679				4,160				3,231				3,456				3,269
Telephone / data lines			612				538				573				648				532
Occupancy			3,117				3,265				2,447				4,421				3,157
Furniture and equipment			1,457				1,806				1,191				1,679				1,391
Marketing			1,252				1,490				1,298				1,074				922
Legal and professional fees			1,973				3,054				2,560				3,276				2,132
FDIC assessments			598				558				548				650				570
Amortization of intangibles			989				964				839				839				719
Foreclosed property expense and net (gain)/loss on sale			192				(7	)			(296	)			297				(293	)
Other			4,833				4,223				3,427				3,975				3,910
Total Noninterest Expenses			37,164				39,184				34,361				41,625				34,746
Income Before Income Taxes			23,809				33,421				22,142				11,618				12,020
Income taxes			5,782				20,374				7,926				3,942				4,094
Net Income		$	18,027			$	13,047			$	14,216			$	7,676			$	7,926
Per share of common stock:
Net income diluted		$	0.38			$	0.28			$	0.32			$	0.18			$	0.20
Net income basic			0.38				0.29				0.33				0.18				0.20
Cash dividends declared			0.00				0.00				0.00				0.00				0.00
Average diluted shares outstanding			47,688,388				46,472,538				43,792,108				43,556,285				39,498,835
Average basic shares outstanding			46,951,829				45,541,099				43,151,248				42,841,152				38,839,284

 

 

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

 

		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands, except share data)		2018				2017				2017				2017				2017
Assets
Cash and due from banks		$	129,065			$	104,039			$	114,621			$	88,133			$	133,923
Interest bearing deposits with other banks			6,794				5,465				10,657				20,064				10,914
Total Cash and Cash Equivalents			135,859				109,504				125,278				108,197				144,837
Time deposits with other banks			12,553				12,553				14,591				16,426				0
Debt Securities:
Available for sale (at fair value)			982,958				949,460				990,299				1,010,244				902,775
Held to maturity (at amortized cost)			400,647				416,863				374,773				397,096				379,657
Total Debt Securities			1,383,605				1,366,323				1,365,072				1,407,340				1,282,432
Loans held for sale			20,887				24,306				29,447				22,262				16,326
Loans			3,897,125				3,817,377				3,384,991				3,330,075				2,973,759
Less: Allowance for loan losses			(28,118	)			(27,122	)			(26,232	)			(26,000	)			(24,562	)
Net Loans			3,869,007				3,790,255				3,358,759				3,304,075				2,949,197
Bank premises and equipment, net			64,577				66,883				57,092				56,765				58,611
Other real estate owned			10,288				7,640				7,142				8,497				7,885
Goodwill			148,555				147,578				101,747				101,739				64,649
Other intangible assets, net			18,246				19,099				16,102				16,941				13,853
Bank owned life insurance			120,654				123,981				118,762				88,003				85,237
Net deferred tax assets			24,427				25,417				43,951				52,195				55,834
Other assets			94,443				116,590				102,356				98,855				90,914
Total Assets		$	5,903,101			$	5,810,129			$	5,340,299			$	5,281,295			$	4,769,775
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest demand		$	1,488,261			$	1,400,227			$	1,284,118			$	1,308,458			$	1,225,124
Interest-bearing demand			1,015,054				1,050,755				935,097				934,861				870,457
Savings			437,878				434,346				379,499				376,825				363,140
Money market			1,035,531				931,458				870,788				861,119				821,606
Other time certificates			410,108				414,277				288,398				278,890				267,837
Brokered time certificates			184,405				217,385				281,551				149,270				66,741
Time certificates of more than $250,000			148,306				144,272				73,149				66,035				63,740
Total Deposits			4,719,543				4,592,720				4,112,600				3,975,458				3,678,645
Securities sold under agreements to repurchase			173,249				216,094				142,153				167,558				183,107
Federal Home Loan Bank borrowings			208,000				211,000				389,000				395,000				302,000
Subordinated debt			70,591				70,521				70,451				70,381				70,311
Other liabilities			29,857				30,130				31,654				95,521				33,218
Total Liabilities			5,201,240				5,120,465				4,745,858				4,703,918				4,267,281
Shareholders' Equity
Common stock			4,698				4,693				4,351				4,339				4,075
Additional paid in capital			663,727				661,632				576,825				574,842				510,806
Retained earnings (accumulated deficit)			47,825				29,914				16,161				1,945				(5,731	)
Treasury stock			(2,279	)			(2,359	)			(1,730	)			(1,768	)			(1,172	)
			713,971				693,880				595,607				579,358				507,978
Accumulated other comprehensive loss, net			(12,110	)			(4,216	)			(1,166	)			(1,981	)			(5,484	)
Total Shareholders' Equity			701,861				689,664				594,441				577,377				502,494
Total Liabilities & Shareholders' Equity		$	5,903,101			$	5,810,129			$	5,340,299			$	5,281,295			$	4,769,775
Common Shares Outstanding			46,983,165				46,917,735				43,512,179				43,458,973				40,715,938

 

Note:  The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date.

                       

 

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

 

		Quarterly Trends
(Dollars in thousands)		1Q'18				4Q'17				3Q'17				2Q'17				1Q'17
Credit Analysis
Net charge-offs (recoveries) - non-acquired loans		$	117			$	1,475			$	612			$	304			$	211
Net charge-offs (recoveries) - acquired loans			(116	)			(139	)			(333	)			(405	)			(118	)
Total net charge-offs (recoveries)		$	1			$	1,336			$	279			$	(101	)		$	93
TDR valuation adjustments		$	88			$	37			$	169			$	64			$	49
Net charge-offs (recoveries) to average loans - non-acquired loans			0.01	%			0.16	%			0.07	%			0.04	%			0.03	%
Net charge-offs (recoveries) to average loans - acquired loans			(0.01	)			(0.02	)			(0.04	)			(0.05	)			(0.02	)
Total net charge-offs (recoveries) to average loans			0.00				0.14				0.03				(0.01	)			0.01
Loan loss provision (recapture) - non-acquired loans		$	1,383			$	2,053			$	795			$	1,690			$	1,504
Loan loss provision (recapture) - acquired loans			(298	)			210				(115	)			(289	)			(200	)
Total loan loss provision		$	1,085			$	2,263			$	680			$	1,401			$	1,304
Allowance for loan losses - non-acquired loans		$	27,541			$	26,363			$	25,822			$	25,809			$	24,487
Allowance for loan losses - acquired loans			577				759				410				191				75
Total allowance for loan losses		$	28,118			$	27,122			$	26,232			$	26,000			$	24,562
Non-acquired loans at end of period		$	3,063,618			$	2,922,609			$	2,837,490			$	2,722,866			$	2,572,549
Purchased noncredit impaired loans at end of period			819,814				877,351				537,057				594,077				388,228
Purchased credit impaired loans at end of period			13,693				17,417				10,443				13,132				12,982
Total loans		$	3,897,125			$	3,817,377			$	3,384,990			$	3,330,075			$	2,973,759
Non-acquired loans allowance for loan losses to non-acquired loans at end of period			0.90	%			0.90	%			0.91	%			0.95	%			0.95	%
Total allowance for loan losses to total loans at end of period			0.72				0.71				0.77				0.78				0.83
Acquired loans allowance for loan losses to acquired loans at end of period			0.07				0.08				0.07				0.03				0.02
Discount for credit losses to acquired loans at end of period			2.32				2.33				2.77				3.37				4.25
End of Period
Nonperforming loans - non-acquired loans		$	12,628			$	12,569			$	10,877			$	10,541			$	10,557
Nonperforming loans - acquired loans			6,711				6,955				3,498				6,632				6,428
Other real estate owned - non-acquired			2,246				2,246				1,748				1,748				2,790
Other real estate owned - acquired			4,969				1,632				1,632				1,645				1,203
Bank branches closed included in other real estate owned			3,073				3,762				3,762				5,104				3,892
Total nonperforming assets		$	29,627			$	27,164			$	21,517			$	25,670			$	24,870
Restructured loans (accruing)		$	14,777			$	15,559			$	16,181			$	16,941			$	18,125
Nonperforming loans to loans at end of period - non-acquired loans			0.41	%			0.43	%			0.38	%			0.39	%			0.41	%
Nonperforming loans to loans at end of period - acquired loans			0.81				0.78				0.64				1.09				1.60
Allowance for loan losses to nonperforming loans - non-acquired loans			218.10				209.75				237.40				244.84				231.95
Total nonperforming loans to loans at end of period			0.50				0.51				0.42				0.52				0.57
Nonperforming assets to total assets - non-acquired			0.30	%			0.32	%			0.31	%			0.33	%			0.36	%
Nonperforming assets to total assets - acquired			0.20				0.15				0.10				0.16				0.16
Total nonperforming assets to total assets			0.50				0.47				0.40				0.49				0.52
Average Balances
Total average assets		$	5,851,688			$	5,716,230			$	5,316,119			$	5,082,002			$	4,699,745
Less: Intangible assets			167,136				149,432				118,364				114,563				78,878
Total average tangible assets		$	5,684,552			$	5,566,798			$	5,197,755			$	4,967,439			$	4,620,867
Total average equity		$	695,240			$	657,100			$	587,919			$	567,448			$	466,847
Less: Intangible assets			167,136				149,432				118,364				114,563				78,878
Total average tangible equity		$	528,104			$	507,668			$	469,555			$	452,885			$	387,969
			March 31,				December 31,				September 30,				June 30,				March 31,
LOANS			2018				2017				2017				2017				2017
Construction and land development		$	374,244			$	343,125			$	245,151			$	230,574			$	174,992
Commercial real estate - Owner Occupied			796,898				791,408				688,224				654,783				628,241
Commercial real estate - Non-Owner Occupied			848,341				848,584				789,867				809,285				725,899
Residential real estate			1,065,152				1,038,810				941,169				991,144				893,674
Consumer			195,788				189,436				185,122				179,151				165,764
Commercial and financial			616,702				606,014				535,457				465,138				385,189
Total Loans		$	3,897,125			$	3,817,377			$	3,384,990			$	3,330,075			$	2,973,759

 

 

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

(Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

		1Q'18												4Q'17												1Q'17
		Average								Yield/				Average								Yield/				Average								Yield/
(Dollars in thousands)		Balance				Interest				Rate				Balance				Interest				Rate				Balance				Interest				Rate
Assets
Earning assets:
Securities:
Taxable		$	1,361,277			$	9,361				2.75	%		$	1,369,921			$	9,153				2.67	%		$	1,279,246			$	8,087				2.53	%
Nontaxable			32,640				307				3.76				31,282				354				4.53				27,833				441				6.34
Total Securities			1,393,917				9,668				2.77				1,401,203				9,507				2.71				1,307,079				8,528				2.61
Federal funds sold and othe investments			56,173				616				4.45				79,025				638				3.20				56,771				510				3.64
Loans, net			3,872,369				45,284				4.74				3,691,344				43,375				4.66				2,918,665				31,949				4.44
Total Earning Assets			5,322,459				55,568				4.23				5,171,572				53,520				4.11				4,282,515				40,987				3.88
Allowance for loan losses			(27,469	)											(26,298	)											(24,036	)
Cash and due from banks			113,899												121,109												105,803
Premises and equipment			65,932												64,121												58,783
Intangible assets			167,136												149,432												78,878
Bank owned life insurance			122,268												123,272												84,811
Other assets			87,463												113,022												112,991
Total Assets		$	5,851,688											$	5,716,230											$	4,699,745
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand		$	1,001,672			$	450				0.18			$	976,295			$	367				0.15			$	834,244			$	163				0.08
Savings			435,433				104				0.10				431,124				94				0.09				353,452				44				0.05
Money market			976,498				984				0.41				929,914				785				0.33				803,795				417				0.21
Time deposits			776,807				2,179				1.14				761,720				2,032				1.06				347,143				566				0.66
Federal funds purchased and securities sold under agreements to repurchase			175,982				274				0.63				166,006				231				0.55				181,102				153				0.34
Federal Home Loan Bank borrowings			276,389				1,030				1.51				320,380				968				1.20				426,144				702				0.67
Other borrowings			70,550				694				3.99				70,480				641				3.61				70,273				565				3.26
Total Interest-Bearing Liabilities			3,713,331				5,715				0.62				3,655,919				5,118				0.56				3,016,153				2,610				0.35
Noninterest demand			1,413,967												1,373,403												1,183,813
Other liabilities			29,150												29,808												32,932
Total Liabilities			5,156,448												5,059,130												4,232,898
Shareholders' equity			695,240												657,100												466,847
Total Liabilities & Equity		$	5,851,688											$	5,716,230											$	4,699,745
Interest expense as a % of earning assets											0.44												0.39												0.25
Net interest income as a % of earning assets						$	49,853				3.80	%						$	48,402				3.71	%						$	38,377				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.

 

 

CONSOLIDATED QUARTERLY FINANCIAL  DATA

(Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Customer Relationship Funding
Noninterest demand
Commercial		$	1,163,119			$	1,073,539			$	997,749			$	995,720			$	916,940
Retail			252,055				253,454				217,809				238,506				234,109
Public funds			49,014				50,837				43,686				47,691				52,126
Other			24,073				22,397				24,874				26,541				21,949
			1,488,261				1,400,227				1,284,118				1,308,458				1,225,124
Interest-bearing demand
Commercial			164,359				157,272				156,176				155,178				117,629
Retail			700,262				702,616				670,705				659,906				613,121
Public funds			150,433				190,867				108,216				119,777				139,707
			1,015,054				1,050,755				935,097				934,861				870,457
Total transaction accounts
Commercial			1,327,478				1,230,811				1,153,925				1,150,898				1,034,569
Retail			952,317				956,070				888,514				898,412				847,230
Public funds			199,447				241,704				151,902				167,468				191,833
Other			24,073				22,397				24,874				26,541				21,949
			2,503,315				2,450,982				2,219,215				2,243,319				2,095,581
Savings			437,878				434,346				379,499				376,825				363,140
Money market
Commercial			410,527				375,471				360,567				351,871				313,094
Retail			522,882				471,086				431,325				427,575				414,886
Public funds			102,122				84,901				78,896				81,673				93,626
			1,035,531				931,458				870,788				861,119				821,606
Time certificates of deposit			742,819				775,934				643,098				494,195				398,318
Total Deposits		$	4,719,543			$	4,592,720			$	4,112,600			$	3,975,458			$	3,678,645
Customer sweep accounts		$	173,249			$	216,094			$	142,153			$	167,558			$	183,107
Total core customer funding (1)		$	4,149,973			$	4,032,880			$	3,611,655			$	3,648,821			$	3,463,434

(1)

Total deposits and customer sweep accounts, excluding certificates of deposit.

  

 

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.

 

 

RECONCILIATION OF NON-GAAP MEASURES

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

 

		Quarterly Trends
(Dollars in thousands except per share data)		1Q'18				4Q'17				3Q'17				2Q'17				1Q'17
Net income		$	18,027			$	13,047			$	14,216			$	7,676			$	7,926
Gain on sale of VISA stock			0				(15,153	)			0				0				0
Securities (gains)/losses, net			102				(112	)			47				(21	)			0
Total Adjustments to Revenue			102				(15,265	)			47				(21	)			0
Merger related charges			470				6,817				491				5,081				533
Amortization of intangibles			989				963				839				839				719
Business continuity expenses - Hurricane Irma			0				0				352				0				0
Branch reductions and other expense initiatives			0				0				(127	)			1,876				2,572
Total Adjustments to Noninterest Expense			1,459				7,780				1,555				7,796				3,824
Effective tax rate on adjustments			(538	)			3,147				(673	)			(2,786	)			(1,480	)
Effect of change in corporate tax rate			248				8,552				0				0				0
Adjusted Net Income		$	19,298			$	17,261			$	15,145			$	12,665			$	10,270
Earnings per diluted share, as reported			0.38				0.28				0.32				0.18				0.20
Adjusted Earnings per Diluted Share			0.40				0.37				0.35				0.29				0.26
Average shares outstanding (000)			47,688				46,473				43,792				43,556				39,499
Revenue		$	62,058			$	74,868			$	57,183			$	54,644			$	48,070
Total Adjustments to Revenue			102				(15,265	)			47				(21	)			0
Adjusted Revenue			62,160				59,603				57,230				54,623				48,070
Noninterest Expense			37,164				39,184				34,361				41,625				34,746
Total Adjustments to Noninterest Expense			1,459				7,780				1,555				7,796				3,824
Adjusted Noninterest Expense			35,705				31,404				32,806				33,829				30,922
Adjusted Noninterest Expense			35,705				31,404				32,806				33,829				30,922
Foreclosed property expense and net (gain)/loss on sale			192				(7	)			(296	)			297				(293	)
Net Adjusted Noninterest Expense			35,513				31,411				33,102				33,532				31,215
Adjusted Revenue			62,160				59,603				57,230				54,623				48,070
Impact of FTE adjustment			91				174				154				164				211
Adjusted Revenue on a fully taxable equivalent basis			62,251				59,777				57,384				54,787				48,281
Adjusted Efficiency Ratio			57.1	%			52.6	%			57.7	%			61.2	%			64.7	%
Average Assets		$	5,851,688			$	5,716,230			$	5,316,119			$	5,082,002			$	4,699,745
Less average goodwill and intangible assets			(167,136	)			(149,432	)			(118,364	)			(114,563	)			(78,878	)
Average Tangible Assets			5,684,552				5,566,798				5,197,755				4,967,439				4,620,867
Return on Average Assets (ROA)			1.25	%			0.91	%			1.06	%			0.61	%			0.68	%
Impact of removing average intangible assets and related amortization			0.09				0.06				0.06				0.05				0.06
Return on Tangible Average Assets (ROTA)			1.34				0.97				1.12				0.66				0.74
Impact of other adjustments for Adjusted Net Income			0.04				0.26				0.04				0.36				0.16
Adjusted Return on Average Tangible Assets			1.38				1.23				1.16				1.02				0.90
Average Shareholders' Equity		$	695,240			$	657,100			$	587,919			$	567,448			$	466,847
Less average goodwill and intangible assets			(167,136	)			(149,432	)			(118,364	)			(114,563	)			(78,878	)
Average Tangible Equity			528,104				507,668				469,555				452,885				387,969
Return on Average Shareholders' Equity			10.5	%			7.9	%			9.6	%			5.4	%			6.9	%
Impact of removing average intangible assets and related amortization			3.9				2.8				2.9				1.9				1.9
Return on Average Tangible Common Equity (ROTCE)			14.4				10.7				12.5				7.3				8.8
Impact of other adjustments for Adjusted Net Income			0.4				2.8				0.3				3.9				1.9
Adjusted Return on Average Tangible Common Equity			14.8				13.5				12.8				11.2				10.7