Market Overview

Seacoast Reports First Quarter 2018 Results

Share:

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."

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. 

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    
                       
  1Non-GAAP measure, see "Explanation of Certain Unaudited Non-GAAP Financial Measures"        
  2Common 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.

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

                       
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   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 other                                      
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.     
     


                     
  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    
                     

Primary Logo

View Comments and Join the Discussion!