Market Overview

Seacoast Reports Improvements For The Third Quarter

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STUART, Fla., Oct. 25, 2012 /PRNewswire/ --

Continued acceleration in new households, deposit and fee income growth

  • Total households increase 6.3 percent year over year
  • Strong growth in noninterest bearing deposits of 26.2 percent over prior year
  • Fee based revenues up 20.7 percent year over year

Credit quality improvements continue in the quarter

  • Nonperforming loans decline by 8.3 percent compared to last quarter
  • Other real estate owned down 62.5 percent compared to 2011

Profitability improvement plan announced  

  • Core costs down $727,000 versus second quarter 2012
  • Targeting $7.4 million in cost reduction in 2013

Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF), today reported net income for the third quarter of 2012 totaling $447,000, compared to net income of $2,648,000 for the third quarter a year ago.  The net loss for the first nine months of 2012 totaled $950,000, compared to net income of $4,119,000 for 2011. 

(Logo: http://photos.prnewswire.com/prnh/20050916/SEACOASTLOGO )

The net loss that is available to Common shareholders for the third quarter and year to date 2012 totaled $490,000, or $0.01 diluted earnings per share (DEPS) and $3,761,000, or $0.04 DEPS, respectively, compared to net income of $0.02 DEPS and $0.01 DEPS a year ago for the same periods, respectively.

For the first nine months of 2012, net income was impacted by our decision earlier in the year to accelerate the reduction of problem loans and foreclosed properties.  We took this action in part to take advantage of recent improvements in market conditions.  Foreclosed properties were reduced 62.5 percent over the prior year.  Compared to last quarter, nonperforming loans were reduced by 8.3 percent, and are expected to continue to decline over the next two quarters.  Loans classified as restructured fell by 39.3 percent when compared with the prior year and are expected to continue to decline.  Net income for the current quarter was also impacted by nonrecurring charges associated with branch consolidations, staff reductions and other cost reductions as part of our plan to restore higher levels of profitability in 2013.  We expect to book additional one-time charges totaling approximately $1.0 million in the fourth quarter related to branch consolidations.

Profitability Improvement Plan for 2013

During the quarter we completed and began implementing a focused plan to improve profitability in 2013 and beyond.  The plan contains over 100 separate elements designed to achieve meaningful improvements through a balanced focus on expense reductions and revenue enhancements.  Each element aligns with our core strategy and value proposition and has been carefully designed to support and enhance our successful growth initiatives.       

As part of our profitability improvement plan, we completed an evaluation of our overhead structure, and are in the process of implementing reductions in expenses expected to total $7.4 million in 2013.  Approximately $4.9 million of the reduction is related to core operating expenses of which $3.3 million have been implemented and will fully impact the first quarter of 2013.  An additional $1.7 million in reduced annual core operating costs are expected to be implemented in the first and second quarters of 2013.  In addition, we project noncore credit related expenses, primarily losses on OREO and asset disposition expense, will be reduced by $2.5 million in 2013.

The plan also includes revenue and growth initiatives in response to improving market conditions.  These include making additional investments in people to increase our lending capacity in our commercial and business banking lines and expanding growth initiatives related to our mortgage business.  These investments are expected to support an acceleration of our loan production in 2013.  Our successful retail and business deposit growth initiatives have also been expanded to help drive further increases in our households, margins and fees. 

"We intend to bring our expense structure back into line with better performing peers in 2013 as our credit costs continue to abate and as our core expense reductions and expanded revenue growth initiatives take hold," said Dennis S. Hudson, Chief Executive Officer.  "We are pleased with our execution success to date around our growth initiatives as evidenced by our expanding households, acceleration of our mortgage production and recent improvements in business and commercial loan production. We intend to leverage this success with our profit improvement plan to create greater value for shareholders in 2013." 

Total revenues, excluding securities gains, net increased 7.6 percent annualized on a linked quarter basis as a result of improving deposit related fee income, improved deposit mix from the Company's retail and small business deposit growth initiatives, and increased mortgage banking fees from improvements in residential loan production.  Total revenues for the first nine months this year are up $1.1 million compared to the prior year. 



2012


2011


 %
Change


(Dollars in thousands)

Third
Quarter


Third

Quarter



Customer Relationship Funding (Period End)







      Demand deposits (noninterest bearing)

$    409,145


$    324,256


26.2

%

      NOW

420,477


391,318


7.5


      Money market accounts

348,275


327,654


6.3


      Savings accounts

158,208


128,543


23.1


      Time certificates of deposit

343,361


489,503


(29.9)


            Total Deposits

1,679,466


1,661,274


1.1


      Sweep repurchase agreements

122,393


106,562


14.9


      Total core customer funding (1)

1,458,498


1,278,333


14.1


(1) Total deposits and sweep repurchase agreements, excluding certificates of deposits.

Retail and business household growth has improved as a result of the Company's growth initiatives and resources added over the past nine months to attract new commercial loan and business deposit accounts.  New household acquisition was strong again during the third quarter 2012.  New personal retail checking relationships opened during the quarter rose 10.4 percent compared to the same quarter in 2011.  Likewise, new commercial business checking deposit relationships opened increased by 8.7 percent compared with the same quarter one year ago.  Along with the new relationships, our programs have improved market share, increased average services per household and improved customer retention.

Since initial implementation of our retail growth initiatives in 2009, new retail checking deposit households and the average services per household have increased 53.9 percent and 20.5 percent, respectively.  The program has produced significant growth in deposit related fee income, which has increased at an 8.7 percent compounded growth rate since the third quarter of 2010.  The program has also significantly improved deposit mix and lowered the cost of deposits.

Our focused plan to develop our deposit franchise and deepen our residential mortgage  production capacity has produced double digit revenue growth in retail fees, mortgage fees and no cost deposits.  These investments in revenue growth and franchise development together, with new investments in business and commercial revenue growth initiatives, have positioned us to benefit from the improving housing market and economic conditions, which will help offset the negative impacts of much lower asset yields as a result of the Federal Reserve's actions.     

Other results for third quarter 2012:

  • Total revenues (excluding securities gains, net) increased $405,000 linked-quarter to $21.6 million, an increase of 7.6 percent annualized.
  • Service charges on deposits accounts increased 8.9 percent linked-quarter as a result of 7,453 new households over the first nine months, up 20.0 percent compared to last year.
  • Interchange income for the quarter totaled $1,119,000, up $150,000 or 15.5 percent compared to the prior year's results, reflecting the growth in new deposit accounts.
  • Mortgage banking revenues grew as a result of expanded capacity and focused growth initiatives increasing year-over-year by $599,000 or 107.7 percent to $1,155,000 for the quarter.
  • Average checking and savings deposits grew 13.5 percent over the past year.
  • Noninterest bearing checking balances totaled 23.5 percent of average deposits for the third quarter compared with 19.3 percent the prior year.  Noninterest bearing checking balances grew by 26.2 percent over the past year.
  • Total deposits, excluding time deposits over $100,000 and brokered deposits, comprise 91.0 percent of deposits versus 86.0 percent a year ago.  Core deposits grew by 14.0 percent over the past year. 
  • Average cost of deposits totaled 0.26 percent, down 11 basis points from the second quarter of 2012 and 39 basis points lower compared to the prior year. 

Average earning assets are up $54 million from the prior year with average loans up $26 million on retained loan production of $261 million over the last twelve months.  Over the last nine months, retained loan production totaled $198 million. New loan growth has been concentrated in smaller average balance commercial loans and residential home purchase transactions consistent with our concentration management objectives.  Offsetting loan growth has been nonperforming loan resolutions, refinancing and early payoffs as a result of the low rate environment.  Total loans declined to $1.202 billion at September 30, 2012, down $18.9 million compared to the prior quarter impacted by lower nonperforming loans ($4.0 million) and early payoffs of larger commercial loans ($19.7 million).  Early commercial real estate loan payoffs totaled $16.9 million for the third quarter with the average loan size of $4.2 million, further reducing our overall concentration and credit concentration risks.  Total loans (including available for sale) outstanding increased by $15.1 million year-over-year.

The allowance for loan losses remains strong at 1.92 percent compared with 2.02 percent the prior quarter and 2.35 percent the prior year.   The provision for loan losses year to date totals $9.7 million compared to net charge offs of $12.1 million for the first nine months of 2012 and $10.9 million for 2011. 

Nonperforming assets totaled $53.3 million at quarter end, down $3.0 million and $2.4 million compared to both a year earlier and last quarter, respectively.  OREO declined $14.8 million compared to the third quarter 2011 and is the result of improving valuations allowing for more aggressive OREO liquidation activities.  Nonaccrual loans and accruing loans delinquent 90 days or more fell from second quarter 2012 to 3.70 percent of loans.  Early stage delinquencies (accruing loans 30–89 days past due) remained nominal at 0.29 percent of loans outstanding. 

Salary wages and benefits, excluding severance, are higher compared to the prior year's third quarter due to incentive compensation related to improved revenue growth discussed above, and higher health care costs.  Total core operating expenses (total noninterest expense excluding severance, organizational changes, branch closures, net losses on OREO and asset disposition expenses) totaled $18.8 million for the quarter, down $727,000 from the second quarter 2012, but higher by $1.2 million compared to the third quarter 2011.  Organizational changes and branch closures completed during the third quarter are expected to reduce core operating expenses further in 2013.

 

(Dollars in thousands)


Q-3

2012

Q-2

2012

Q-1
2012

Q-4

2011

Q-3

 2011

Noninterest Expense:














Salaries and wages


$7,442

$7,435

$7,055

$7,301

$6,902

Employee benefits


1,924

1,916

2,010

1,447

1,391

Outsourced data processing costs


1,923

1,834

1,721

1,677

1,685

Telephone / data lines


299

297

289

285

286

Occupancy expense


1,876

1,943

1,882

1,795

1,967

Furniture and equipment expense


556

607

495

525

555

Marketing expense


785

677

926

947

551

Legal and professional fees


1,122

1,637

1,776

1,299

1,496

FDIC assessments


695

707

706

679

687

Amortization of intangibles


196

196

201

212

211

Other


2,018

2,314

2,163

2,264

1,947

   Total Core Operating Expense


18,836

19,563

19,224

18,431

17,678








Severance and organizational changes


839

0

0

0

0

Branch consolidation


232

0

0

0

0

Recovery of prior legal fees


(500)

0

0

0

0

Net loss on OREO


561

790

1,959

1,254

906

Asset dispositions expense


364

368

527

275

479

   Total


$20,332

$20,721

$21,710

$19,960

$19,063

 

Noninterest income, excluding securities gains and losses, increased 35.3 percent annualized when compared to the second quarter, reflecting increased revenues from service charges on deposit accounts, marine finance fees, merchant income, and mortgage banking fees.  As previously indicated, the improvement in market share and programs to grow retail and commercial customer households and investments in future revenue growth initiatives is beginning to produce increased revenues.  We are seeing improvements across our business lines and expect increased momentum beginning in the first quarter 2013.

 

(Dollars in thousands)

Q-3

2012

Q-2

2012

Q-1
2012

Q-4
2011

Q-3

2011

Noninterest Income:












Service charges on deposit accounts

$1,620

$1,487

$1,461

$1,599

$1,675

Trust income

550

564

573

530

541

Mortgage banking fees

1,155

902

623

680

556

Brokerage commissions and fees

247

298

234

258

321

Marine finance fees

279

244

330

333

229

Interchange income

1,119

1,154

1,071

953

969

Other deposit based EFT fees

70

84

99

78

71

Other

639

486

546

452

344


5,679

5,219

4,937

4,883

4,706

Securities gains, net

48

3,615

3,374

1,083

137

Total

$5,727

$8,834

$8,311

$5,966

$4,843

 

The net interest margin stabilized at 3.17 percent in the third quarter 2012 the same compared to the second quarter of 2012 as a result of lower on balance sheet liquidity, better deposit mix and lower costs for interest bearing liabilities.  Interest bearing deposit costs decreased 12 basis points to 0.35 percent in the third quarter 2012 and the total cost of interest bearing liabilities decreased from 0.59 percent for the second quarter to 0.49 percent in the third quarter.  The mix in deposits continues to improve as new households are on-boarded with average checking and savings deposits (excluding all time deposits) rising to 78.7 percent of deposits from 69.5 percent a year ago.  Checking and savings deposits averaged $1.321 billion for the third quarter of 2012, up $157 million or 13.5 percent compared to third quarter 2011.  Total average deposits increased $4.5 million over the year to $1.680 billion with a $152 million decline in average time deposits attributable to the planned runoff of brokered and single service time deposit customers. 

The Company will host a conference call on Friday, October 26, 2012 at 9:00 a.m. (Eastern Time) to discuss its earnings results and business trends.  Investors may call in (toll-free) by dialing (888) 517-2458 (access code: 6117222; leader: Dennis S. Hudson).  Charts will be used during the conference call and may be accessed at the Company's website at www.seacoastbanking.net by selecting Presentations under the heading Investor Services.  A replay of the conference call will be available beginning the afternoon of October 26 by dialing (888) 843-7419 (domestic), using the passcode 6117222.

Alternatively, individuals may listen to the live webcast of the presentation by visiting the Company's website at www.seacoastbanking.net.  The link to the live audio webcast is located in the subsection Presentations under the heading Investor Relations.  Beginning the afternoon of October 26, 2012, an archived version of the webcast can be accessed from this same subsection of the website.  This webcast will be archived and available for one year. 

Seacoast Banking Corporation of Florida has approximately $2.1 billion in assets.  It is one of the largest independent commercial banking organizations in Florida, headquartered on Florida's Treasure Coast, one of the wealthiest and fastest growing areas in the nation.

Cautionary Notice Regarding Forward-Looking Statements

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

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements. 

You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "support", "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "further", "point to," "project," "could," "intend" or other similar words and expressions of the future.  These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality; governmental monetary and fiscal policies, as well as legislative, tax and regulatory changes; changes in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.  The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2011 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














Three Months Ended


Nine Months Ended


(Dollars in thousands,

September 30,


September 30,


   except share data)

2012


2011


2012


2011


Summary of Earnings









Net income (loss)

$              447


$                2,648


$                      (950)


$          4,119


Net income (loss) available to common shareholders

(490)


1,711


(3,761)


1,308











Net interest income  (1)

15,995


16,925


48,736


50,039











Performance Ratios









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

0.08

%

0.51

%

(0.06)

%

0.27

%

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

0.11


0.54


(0.04)


0.30











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

1.09


6.33


(0.76)


3.32











Net interest margin  (1), (2)

3.17


3.44


3.22


3.43











Per Share Data









Net income (loss) diluted-GAAP basis

$            (0.01)


$                  0.02


$                     (0.04)


$            0.01


Net income (loss) basic-GAAP basis

(0.01)


0.02


(0.04)


0.01











Cash dividends declared

0.00


0.00


0.00


0.00























September 30,

     Increase/





2012


2011


     (Decrease)


Credit Analysis









Net charge-offs year-to-date



$      12,106


$     10,885


11.2

%

Net charge-offs to average loans



1.32

%

1.19

%

10.9


Loan loss provision year-to-date



$     9,660


$       1,542


526.4


Allowance to loans at end of period



1.92

%

2.35

%

(18.3)











Nonperforming loans



$              44,450


$                  32,627


36.2


Other real estate owned



8,888


23,702


(62.5)


Total non-performing assets



$              53,338


$                  56,329


(5.3)











Restructured loans (accruing)



$              44,179


$                  72,751


(39.3)











Nonperforming assets to loans and other real









   estate owned at end of period



4.40

%

4.57

%

(3.7)











Nonperforming assets to total assets



2.56

%

2.75

%

(6.9)











Selected Financial Data









Total assets 



$        2,081,693


$      2,051,037


1.5


Securities available for sale (at fair value)



588,248


611,195


(3.8)


Securities held for investment (at amortized cost)



15,556


24,575


(36.7)


Net loans



1,179,359


1,180,147


(0.1)


Deposits 



1,679,466


1,661,274


1.1


Total shareholders' equity  



167,209


170,793


(2.1)


Common shareholders' equity



118,775


123,608


(3.9)


Book value per share common



1.25


1.31


(4.6)


Tangible book value per share



1.75


1.78


(1.7)


Tangible common book value per share (5)



1.23


1.28


(3.9)


Average shareholders' equity to average assets



7.84

%

8.06

%

(2.7)


Tangible common equity to tangible assets (5), (6)



5.63


5.91


(4.7)











Average Balances (Year-to-Date)









Total assets



$       2,118,784


$     2,056,344


3.0


Less: intangible assets



1,988


2,814


(29.4)


Total average tangible assets



$      2,116,796


$    2,053,530


3.1











Total equity



$         166,066


$    165,781


0.2


Less: intangible assets



1,988


2,814


(29.4)


Total average tangible equity



$        164,078


$    162,967


0.7





























(1)  Calculated on a fully taxable equivalent basis using amortized cost.

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

(3)  The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses) because the unrealized gains (losses) are not included in net income (loss).

(4)  The Company believes that return on average assets and equity excluding the impacts of noncash amortization expense on intangible assets is a better measurement of the Company's trend in earnings growth.

(5)  The Company defines tangible common equity as total shareholders equity less preferred stock and intangible assets.

(6)  The ratio of tangible common equity to tangible assets is a non-GAAP ratio used by the investment community to measure capital adequacy.

n/m = not meaningful








CONDENSED CONSOLIDATED STATEMENTS OF INCOME            (Unaudited)


SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES














Three Months Ended


Nine Months Ended



September 30,


September 30,

(Dollars in thousands, except per share data)


2012


2011


2012


2011










Interest on securities:









     Taxable


$          3,190


$            4,750


$       10,834


$            13,001

     Nontaxable


21


38


68


123

Interest and fees on loans


14,371


15,315


43,852


47,004

Interest on federal funds sold and other investments


243


175


727


606

         Total Interest Income


17,825


20,278


55,481


60,734










Interest on deposits


380


605


1,247


1,840

Interest on time certificates


738


2,134


3,371


6,789

Interest on borrowed money


755


671


2,262


2,240

         Total Interest Expense


1,873


3,410


6,880


10,869










         Net Interest Income


15,952


16,868


48,601


49,865

Provision for loan losses


900


(0)


9,660


1,542

         Net Interest Income After Provision for Loan Losses


15,052


16,868


38,941


48,323










Noninterest income:









     Service charges on deposit accounts


1,620


1,675


4,568


4,663

     Trust income


550


541


1,687


1,581

     Mortgage banking fees


1,155


556


2,680


1,460

     Brokerage commissions and fees


247


321


779


864

     Marine finance fees


279


229


853


876

     Interchange income


1,119


969


3,344


2,855

     Other deposit based EFT fees


70


71


253


240

     Other


639


344


1,671


923



5,679


4,706


15,835


13,462

     Securities gains, net


48


137


7,037


137

         Total Noninterest Income


5,727


4,843


22,872


13,599










Noninterest expenses:









     Salaries and wages


8,103


6,902


22,593


19,987

     Employee benefits


1,924


1,391


5,850


4,428

     Outsourced data processing costs


1,923


1,685


5,478


4,906

     Telephone / data lines


299


286


885


894

     Occupancy 


2,080


1,967


5,905


5,832

     Furniture and equipment 


570


555


1,672


1,766

     Marketing 


785


551


2,388


1,970

     Legal and professional fees


714


1,496


4,127


4,838

     FDIC assessments


695


687


2,108


2,334

     Amortization of intangibles


196


211


593


635

     Asset dispositions expense


364


479


1,259


2,006

     Net loss on other real estate owned and repossessed assets


561


906


3,310


2,497

     Other 


2,118


1,947


6,595


5,710

         Total Noninterest Expenses


20,332


19,063


62,763


57,803










         Income (Loss) Before Income Taxes


447


2,648


(950)


4,119

Provision for income taxes


0


0


0


0










         Net Income (Loss)


447


2,648


(950)


4,119

Preferred stock dividends and accretion on preferred stock discount

937


937


2,811


2,811

         Net Income (Loss) Available to Common Shareholders


$           (490)


$            1,711


$       (3,761)


$              1,308










Per share of common stock:


















     Net income (loss) diluted


$          (0.01)


$              0.02


$          (0.04)


$                 0.01

     Net income (loss) basic


(0.01)


0.02


(0.04)


0.01

     Cash dividends declared


0.00


0.00


0.00


0.00










Average diluted shares outstanding


94,567,327


93,878,199


94,471,866


93,611,223

Average basic shares outstanding


93,777,662


93,524,950


93,688,003


93,492,180



















CONDENSED CONSOLIDATED BALANCE SHEETS          (Unaudited)





SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES











September 30,


December 31,


September 30,

(Dollars in thousands, except share data)

2012


2011


2011








Assets







   Cash and due from banks


$          30,935


$               41,136


$           29,307

   Interest bearing deposits with other banks

141,783


125,945


87,578

            Total  Cash and Cash Equivalents

172,718


167,081


116,885








   Securities:







        Available for sale (at fair value)

588,248


648,362


611,195

        Held for investment (at amortized cost)

15,556


19,977


24,575

            Total Securities 


603,804


668,339


635,770








   Loans available for sale


28,042


6,795


6,897








   Loans, net of deferred costs


1,202,478


1,208,074


1,208,548

   Less: Allowance for loan losses


(23,119)


(25,565)


(28,401)

            Net Loans


1,179,359


1,182,509


1,180,147








   Bank premises and equipment, net


34,884


34,227


34,599

   Other real estate owned


8,888


20,946


23,702

   Other intangible assets


1,697


2,289


2,501

   Other assets


52,301


55,189


50,536



$      2,081,693


$         2,137,375


$    2,051,037








Liabilities and Shareholders' Equity






Liabilities







   Deposits







        Demand deposits (noninterest bearing)

$             409,145


$            328,356


$         324,256

        NOW


420,477


469,631


391,318

        Savings deposits 


158,208


133,578


128,543

        Money market accounts


348,275


319,152


327,654

        Other time certificates


192,297


244,886


257,486

        Brokered time certificates


8,429


4,558


5,252

        Time certificates of $100,000 or more

142,635


218,580


226,765

            Total Deposits


1,679,466


1,718,741


1,661,274








   Federal funds purchased and securities sold under






       agreements to repurchase, maturing within 30 days

122,393


136,252


106,562

    Borrowed funds


50,000


50,000


50,000

    Subordinated debt


53,610


53,610


53,610

    Other liabilities


9,015


8,695


8,798



1,914,484


1,967,298


1,880,244








Shareholders' Equity







    Preferred stock - Series A


48,434


47,497


47,185

    Common stock


9,481


9,469


9,470

    Additional paid in capital


222,744


222,048


221,797

    Accumulated deficit


(117,914)


(114,152)


(115,764)

    Treasury stock


(101)


(13)


(6)



162,644


164,849


162,682

    Accumulated other comprehensive gain, net

4,565


5,228


8,111

            Total Shareholders' Equity


167,209


170,077


170,793



$          2,081,693


$         2,137,375


$      2,051,037








Common Shares Outstanding


94,810,684


94,686,801


94,696,906








Note:  The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date.

CONSOLIDATED QUARTERLY FINANCIAL  DATA          (Unaudited)






SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

















QUARTERS




2012


2011

Last 12


(Dollars in thousands,
  except per share data)

Third

Second

First


Fourth

Months 


Net income

$                447


$          (2,335)


$                938


$              2,548


$                  1,598













Operating Ratios











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

0.08

%

(0.44)

%

0.18

%

0.48

%

0.08

%

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

0.11


(0.42)


0.20


0.51


0.10













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

1.09


(5.56)


2.26


6.17


0.97













   Net interest margin (1),(2)

3.17


3.17


3.33


3.42


3.27


   Average equity to average assets

7.77


7.90


7.85


7.86


7.84













Credit Analysis











   Net charge-offs

$             2,416


$           6,275


$            3,415


$              3,268


$                15,374


   Net charge-offs to average loans

0.79

%

2.05

%

1.13

%

1.07

%

1.26

%

   Loan loss provision

$                900


$           6,455


$            2,305


$                 432


$                10,092


   Allowance to loans at end of period

1.92

%

2.02

%

2.01

%

2.12

%














  Restructured loans (accruing)

$          44,179


54,842


57,665


71,611















   Nonperforming loans

$          44,450


48,482


41,716


28,526




   Other real estate owned

8,888


7,219


15,530


20,946




   Nonperforming assets

$          53,338


$         55,701


$          57,246


$           49,472




   Nonperforming assets to loans and other











       real estate owned at end of period

4.40

%

4.53

%

4.65

%

4.03

%



   Nonperforming assets to total assets

2.56


2.64


2.64


2.31




   Nonaccrual loans and accruing loans 90 days or more











       past due to loans outstanding at end of period

3.70


3.97


3.43


2.36















Per Share Common Stock











   Net income (loss) diluted-GAAP basis

$             (0.01)


$            (0.03)


$               0.00


$                0.02


$                  (0.02)


   Net income (loss) basic-GAAP basis

(0.01)


(0.03)


0.00


0.02


$                  (0.02)













   Cash dividends declared

-


-


-


-


$                         -


   Book value per share common

1.25


1.24


1.30


1.29















Average Balances











Total assets

$     2,096,694


$    2,133,713


$     2,126,186


$      2,085,466




Less: Intangible assets

1,793


1,988


2,184


2,392




Total average tangible assets

$     2,094,901


$    2,131,725


$     2,124,002


$      2,083,074















Total equity

$        162,902


$       168,457


$        166,874


$         163,857




Less: Intangible assets

1,793


1,988


2,184


2,392




Total average tangible equity

$        161,109


$       166,469


$        164,690


$         161,465















(1) Calculated on a fully taxable equivalent basis using amortized cost.





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


(3) The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses), because the unrealized gains (losses) are not included in net income (loss).


(4) The Company believes that return on average assets and equity excluding the impacts of noncash amortization expense on intangible assets is a better measurement of the Company's trend in earnings growth.





























September 30,


December 31,


September 30,


SECURITIES 





2012


2011


2011













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





$            1,711


$              1,724


$                  4,226


Mortgage-backed





585,632


645,471


603,089


Obligations of states and political subdivisions





905


1,167


1,158


Other securities





0


0


2,722


   Securities Available for Sale





588,248


648,362


611,195













Mortgage-backed





7,397


12,315


16,117


Obligations of states and political subdivisions





6,659


6,662


7,458


Other securities





1,500


1,000


1,000


   Securities Held for Investment





15,556


19,977


24,575


       Total Securities





$        603,804


$         668,339


$             635,770





























September 30,


December 31,

September 30,


LOANS





2012


2011

2011


Construction and land development





$          56,213


$           49,184


$                47,653


Real estate mortgage





1,036,224


1,054,599


1,055,276


Installment loans to individuals





51,564


50,611


51,736


Commercial and financial





58,222


53,105


53,534


Other loans





255


575


349


       Total Loans





$     1,202,478


$      1,208,074


$          1,208,548
























AVERAGE BALANCES, YIELDS AND RATES (1)             (Unaudited)






SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
















2012


2011




Third Quarter


Second Quarter


Third Quarter


Average

Yield/

Average

Yield/

Average

Yield/

(Dollars in thousands)

Balance

Rate


Balance

Rate


Balance

Rate











Assets










Earning assets:










    Securities:










         Taxable

$              572,328

2.23

%

$                552,501

2.40

%

$            624,811

3.04

%

         Nontaxable 

1,972

6.48


2,055

6.81


3,392

6.72


                   Total Securities

574,300

2.24


554,556

2.41


628,203

3.06












    Federal funds sold and other










         investments

209,461

0.46


248,944

0.43


127,072

0.54












    Loans,  net

1,223,313

4.68


1,231,239

4.81


1,197,686

5.09












                  Total Earning Assets

2,007,074

3.54


2,034,739

3.63


1,952,961

4.13












Allowance for loan losses

(24,807)



(23,677)



(30,666)



Cash and due from banks

29,227



31,795



27,044



Premises and equipment

35,003



34,197



34,782



Other assets

50,197



56,659



70,735














$           2,096,694



$             2,133,713



$         2,054,856























Liabilities and Shareholders' Equity










Interest-bearing liabilities:










      NOW (2)

$              419,007

0.15

%

$                423,240

0.16

%

$            394,399

0.24

%

      Savings deposits 

157,577

0.11


152,333

0.10


126,800

0.11


      Money market accounts (2)

350,213

0.21


336,392

0.26


320,683

0.41


      Time deposits

358,504

0.82


406,292

1.12


510,755

1.66


      Federal funds purchased and 










        other short term borrowings

140,932

0.24


146,510

0.25


99,311

0.27


      Other borrowings

103,610

2.57


103,610

2.55


103,610

2.31












                     Total Interest-Bearing Liabilities

1,529,843

0.49


1,568,377

0.59


1,555,558

0.87












Demand deposits (noninterest-bearing)

394,467



388,060



322,646



Other liabilities

9,482



8,819



10,807



                     Total Liabilities 

1,933,792



1,965,256



1,889,011













Shareholders' equity

162,902



168,457



165,845














$           2,096,694



$             2,133,713



$         2,054,856













Interest expense as a % of earning assets  


0.37

%


0.45

%


0.69

%

Net interest income as a % of earning assets  


3.17



3.17



3.44
































(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.

(2) Certain reclassifications have been made to prior years' presentations to conform to the current year presentation.











CONSOLIDATED QUARTERLY FINANCIAL  DATA           (Unaudited)





SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES




















2012


2011

(Dollars in thousands)


Third Quarter


Second Quarter


First Quarter


Fourth Quarter


Third Quarter













Customer Relationship Funding (Period End)










      Demand deposits (noninterest bearing)


$            409,145


$         393,681


$         394,532


$         328,356


$         324,256

      NOW accounts


420,477


420,449


436,712


469,631


391,318

      Money market accounts


348,275


346,191


330,409


319,152


327,654

      Savings accounts


158,208


156,019


148,068


133,578


128,543

      Time certificates of deposit


343,361


373,244


427,738


468,024


489,503

            Total Deposits


1,679,466


1,689,584


1,737,459


1,718,741


1,661,274













      Sweep repurchase agreements


122,393


139,489


149,316


136,252


106,562

      Total core customer funding (1)


1,458,498


1,455,829


1,459,037


1,386,969


1,278,333

























(1) Total deposits and sweep repurchase agreements, excluding certificates of deposits.



QUARTERLY TRENDS - LOANS AT END OF PERIOD (Dollars in Millions)     (Unaudited)


SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES















2011


2012


1st Qtr

2nd Qtr

3rd Qtr

 4th Qtr 


1st Qtr

2nd Qtr

3rd Qtr

Construction and land development









   Residential









      Condominiums

$           0.5

$            -

$            -

-


$          -

$            -

$            -

      Townhomes

-

-

-

-


-

-

-

      Single family residences

-

-

-

-


-

-

-

      Single family land and lots

6.6

6.5

6.4

6.2


6.0

5.9

5.8

      Multifamily

6.1

5.7

5.5

5.1


4.9

4.7

4.6


13.2

12.2

11.9

11.3


10.9

10.6

10.4

   Commercial









      Office buildings

-

-

-

0.2


0.3

-

-

      Retail trade

-

-

-

-


-

-

-

      Land

33.9

10.3

10.2

9.3


9.2

10.7

9.8

      Industrial

-

-

-

-


-

-

-

      Healthcare

-

-

-

-


-

-

-

      Churches and educational facilities

-

-

-

0.1


0.3

0.3

0.7

      Lodging

-

-

-

-


-

-

-

      Convenience stores

0.5

0.6

0.6

1.7


1.4

1.4

-

      Marina

-

-

-

-


-

-

-

      Other

-

-

-

-


-

-

-


34.4

10.9

10.8

11.3


11.2

12.4

10.5

   Individuals









      Lot loans

20.8

19.4

18.6

17.9


18.4

17.6

16.4

      Construction

7.3

6.7

6.4

8.7


13.5

16.6

18.9


28.1

26.1

25.0

26.6


31.9

34.2

35.3

   Total construction and land development

75.7

49.2

47.7

49.2


54.0

57.2

56.2










Real estate mortgages









   Residential real estate









      Adjustable

308.6

314.3

324.4

334.1


341.6

359.4

353.7

      Fixed rate

86.6

88.8

92.8

97.0


96.2

95.4

99.7

      Home equity mortgages

67.7

63.1

63.6

60.2


59.5

58.3

58.4

      Home equity lines

57.4

56.9

55.1

54.9


53.0

50.8

50.6


520.3

523.1

535.9

546.2


550.3

563.9

562.4

   Commercial real estate









      Office buildings

121.3

120.0

122.0

119.6


118.0

113.4

102.4

      Retail trade

150.6

149.6

146.1

140.6


139.3

128.5

121.1

      Industrial

76.3

68.5

72.5

70.7


70.0

72.0

71.3

      Healthcare

26.6

26.3

29.6

38.8


40.2

42.0

35.8

      Churches and educational facilities

28.6

28.2

27.8

27.4


27.0

26.7

26.2

      Recreation

2.8

2.8

2.7

3.2


3.1

3.1

2.7

      Multifamily

14.2

16.8

15.4

9.4


8.8

8.3

7.8

      Mobile home parks

2.5

2.4

2.2

2.2


2.1

2.1

2.1

      Lodging

21.7

20.0

19.8

19.6


19.4

19.3

19.1

      Restaurant

4.2

4.3

4.3

4.7


4.6

4.7

4.4

      Agricultural

9.2

9.2

8.9

8.8


7.6

7.4

7.3

      Convenience stores

20.1

20.0

19.8

15.1


15.5

15.4

16.6

      Marina

21.7

21.5

21.4

21.3


21.6

21.5

21.4

      Other

27.4

27.3

26.9

27.0


29.3

29.3

35.6


527.2

516.9

519.4

508.4


506.5

493.7

473.8

   Total real estate mortgages

1,047.5

1,040.0

1,055.3

1,054.6


1,056.8

1,057.6

1,036.2










Commercial & financial

51.5

48.0

53.5

53.1


54.6

56.2

58.2










Installment loans to individuals









      Automobile and trucks

10.1

9.5

9.2

8.7


8.2

8.1

8.0

      Marine loans

19.4

20.2

21.6

19.9


21.1

20.8

23.0

      Other

20.9

21.6

20.9

22.0


21.5

21.3

20.6


50.4

51.3

51.7

50.6


50.8

50.2

51.6










Other

0.3

0.4

0.3

0.6


0.2

0.2

0.3


$    1,225.4

$   1,188.9

$   1,208.5

1,208.1


1,216.4

1,221.4

1,202.5










QUARTERLY TRENDS - INCREASE (DECREASE) IN LOANS BY QUARTER (Dollars in Millions) (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES













2011


2012


1st Qtr

2nd Qtr

3rd Qtr

4th Qtr


1st Qtr

2nd Qtr

3rd Qtr

Construction and land development









   Residential









      Condominiums

$         (0.4)

$         (0.5)

$            -

$            -


$            -

$            -

$              -

      Townhomes

-

-

-

-


-

-

-

      Single family residences

-

-

-

-


-

-

-