Market Overview

Seacoast Reports Second Quarter 2018 Results

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Net Income Increases 121% Year-Over-Year to $17.0 Million

Record Consumer and Small Business Loan Originations, Record Commercial Pipeline Entering the Third Quarter

STUART, Fla., July 26, 2018 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida ("Seacoast" or "the Company") (NASDAQ:SBCF) reported net income of $17.0 million, or $0.35 per share for the second quarter of 2018, a 121% or $9.3 million increase year-over-year. Seacoast reported adjusted net income1 of $18.3 million, or $0.38 per share, representing a 44% or $5.6 million increase year-over-year.

For the second quarter 2018, return on average tangible assets was 1.24%, return on average tangible shareholders' equity was 13.1%, and the efficiency ratio was 58.4%, compared to 1.34%, 14.4% and 57.8%, respectively, in the prior quarter and 0.66%, 7.3%, and 73.9%, respectively, in the second quarter of 2017.  Adjusted return on average tangible assets1 was 1.28%, adjusted return on average tangible shareholders' equity1 was 13.5%, and the adjusted efficiency ratio1 was 57.3%, compared to 1.38%, 14.8%, and 57.1%, respectively, in the prior quarter, and 1.02%, 11.2%, and 61.2%, respectively, in the second quarter of 2017.

Dennis S. Hudson, III, Seacoast's Chairman and CEO, said "Seacoast's balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit our shareholders.  Consumer and small business loan originations reached record levels and we exited the quarter with our commercial loan pipeline at an all-time high. Looking ahead, we expect our total loan growth to accelerate, driven by the combination of a robust pipeline, investments we have made in proprietary commercial banking technologies, and expanding our commercial platform within the Tampa and South Florida markets.  During the quarter we announced the acquisition of First Green Bancorp, Inc., which will introduce more than 10,000 new customers in central and south Florida to Seacoast's innovative banking platforms and deepen our presence in Orlando, Florida's third-largest metropolitan area. We expect this acquisition to close early in the fourth quarter."

Charles M. Shaffer, Seacoast's Chief Financial Officer, said, "We continue to balance a disciplined approach to credit, liquidity, and expense management, while making investments in technology and talent, resulting in an increase in tangible book value per share to $11.67 at period end and positioning us well to deliver the strong performance we outlined in our Vision 2020 plan. With a loan to deposit ratio of 84% and a ratio of tangible common equity to tangible assets of 9.6%, our balance sheet provides us with the resources to prudently fund our organic growth initiatives while continuing to make accretive acquisitions."

Notable Items Impacting the Second Quarter

Several notable items in aggregate impacted the quarter by approximately $0.05 per share. These include a $0.5 million reduction in accretion of purchase discounts on acquired loans quarter over quarter, and higher prepayments on the nonacquired originated loan portfolio which reduced loan growth by 3%.  Additionally, we recognized $1.7 million in net charge-offs and $0.3 million in losses on the sale of other real estate owned during the quarter. 

Second Quarter 2018 Financial Highlights

Income Statement

  • Net income was $17.0 million, or $0.35 per diluted share, compared to $18.0 million or $0.38 for the prior quarter and $7.7 million or $0.18 for the second quarter of 2017.  For the six months ended June 30, 2018, net income was $35.0 million compared to $15.6 million for the six months ended June 30, 2017.  Adjusted net income1 was $18.3 million, or $0.38 per diluted share, compared to $19.3 million or $0.40 for the prior quarter and $12.7 million or $0.29 for the second quarter of 2017.  For the six months ended June 30, 2018, adjusted net income1 was $37.6 million compared to $22.9 million for the six months ended June 30, 2017.

  • Net revenues were $62.9 million, an increase of $0.9 million or 1% compared to the prior quarter, and an increase of $8.3 million or 15% compared to the second quarter of 2017. For the six months ended June 30, 2018, net revenues were $125.0 million, an increase of $22.3 million or 22% compared to the six months ended June 30, 2017. Adjusted revenues1 were $63.0 million, an increase of $0.8 million, or 1%, from the prior quarter and an increase of $8.4 million, or 15% from the second quarter of 2017.  For the six months ended June 30, 2018, adjusted revenues1 were $125.1 million, an increase of $22.4 million or 22% compared to the six months ended June 30, 2017.

  • Net interest income totaled $50.2 million, an increase of $0.4 million or 1% from the prior quarter and an increase of $6.1 million or 14% from the second quarter of 2017.  For the six months ended June 30, 2018, net interest income totaled $100.0 million, an increase of $17.6 million or 21% compared to the six months ended June 30, 2017.

  • Net interest margin was 3.77% in the current quarter compared to 3.80% in the prior quarter and 3.84% in the second quarter of 2017. Removing the impact of accretion of purchase discounts on acquired loans the net interest margin was 3.61% in the current quarter, compared to 3.60% in the prior quarter and 3.59% in the second quarter of 2017.  Quarter over quarter accretion on purchase discounts on acquired loans declined by $0.5 million, impacting the net interest margin by 4 basis points.

  • Noninterest income totaled $12.7 million, an increase of $0.4 million or 4% compared to the prior quarter and an increase of $2.2 million or 21% from the second quarter of 2017.  For the six months ended June 30, 2018, noninterest income totaled $25.0 million, 23% higher than the six months ended June 30, 2017.  Adjusted noninterest income1 totaled $12.8 million for the quarter, an increase of $0.4 million or 3% compared to prior quarter and an increase of $2.3 million or 22% from the second quarter of 2017. Following on the significant progress we made in the first quarter, second quarter results reflected growth across our businesses resulting in improvements in nearly every category.  We continue to benefit from the investments we have made in Wealth Management and SBA lending.

  • The provision for loan losses was $2.5 million, compared to $1.1 million in the prior quarter and $1.4 million in the second quarter of 2017, reflecting the effect of portfolio growth as well as $1.7 million in net charge-offs in the current quarter.

  • Noninterest expense was $38.2 million compared to $37.2 million in the prior quarter and $41.6 million in the second quarter of 2017.  For the six months ended June 30, 2018, noninterest expense was $75.4 million compared to $76.4 million for the six months ended June 30, 2017. In the current quarter, noninterest expense included $0.7 million in merger related expenses. Adjusted noninterest expense1 was $36.5 million compared to $35.7 million in the prior quarter, and $33.8 million in the second quarter of 2017. For the six months ended June 30, 2018, adjusted noninterest expense1 was $72.3 million compared to $64.8 million for the six months ended June 30, 2017. The increase in noninterest expense quarter over quarter was the result of continued investments in both talent and technology in the organization positioning Seacoast for continued robust profitability. We acquired two commercial banking team leaders, four commercial bankers, and made investments in talent to support scaling the organization prudently.  During the second quarter, we granted 191,000 restricted shares, along with performance awards for up to an additional 356,000 shares upon meeting certain performance criteria. This investment for growth was granted deep into the organization, with the goal of providing meaningful value to our associates for achieving our performance objectives.

  • Seacoast recorded $5.2 million in income tax expense in the current quarter, compared to $5.8 million in the prior quarter and $3.9 million in the second quarter of 2017. The effective tax rate of 23.4% in the current quarter reflects the positive impact of the new lower corporate tax rate. Prior quarter included 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 those assets in the prior quarter increased the effective tax rate by 1.1% to 24.3%.

  • Year to date adjusted revenues1 increased 22% compared to prior year while adjusted noninterest expense1 increased 12%, providing 10% operating leverage.

  • The efficiency ratio was 58.4% compared to 57.8% in the prior quarter and 73.9% in the second quarter of 2017. The adjusted efficiency ratio1 was 57.3% compared to 57.1% in the prior quarter and 61.2% in the second quarter of 2017.

Balance Sheet

  • At June 30, 2018, the Company had total assets of $5.9 billion and total shareholders' equity of $716  million.  Book value per share was $15.18 and tangible book value per share was $11.67, compared to $14.94 and $11.39, respectively, at March 31, 2018 and $13.29 and $10.55, respectively, at June 30, 2017.

  • Debt Securities totaled $1.3 billion at June 30, 2018, a decrease of $47 million compared to prior quarter and a decrease of $70 million from June 30, 2017.  Given the current interest rate environment, the securities portfolio is being used as a liquidity source to fund loan growth.

  • Net loans totaled $3.9 billion at June 30, 2018, an increase of $76 million compared to prior quarter or 8% annualized in the current quarter, and an increase of $641 million or 19% from June 30, 2017.  Excluding the impact of two acquisitions in the fourth quarter of 2017, loans increased $237 million or 7% from June 30, 2017.

    • During the current quarter, commercial originations were $140.4 million, consumer and small business originations for the quarter were a record $104.9 million and retained residential loans were $75.0 million.
    • Loan growth for the quarter was impacted by higher loan prepayments when compared to the prior quarter, impacting annualized loan growth by 3%.
    • We continue to prudently manage commercial real estate exposure. Construction and land development and commercial real estate loans remain well below regulatory guidance at 59% and 203% of total risk based capital, respectively.
  • Pipelines (loans in underwriting and approval or approved and not yet closed) are at a record high for second quarter.  At June 30, 2018, total pipelines were $311.6 million, an increase of 28% over the prior quarter and 16% compared to prior year.

    • Commercial pipelines were $194.9 million, an increase of $72.2 million, or 59%, from prior quarter.
    • Consumer and small business pipelines were $52.9 million, an increase of $2.6 million, or 5%, compared to the prior quarter.
    • Residential pipelines were $63.7 million, decreasing by $7.0 million, or 10%, from prior quarter.

  • Total deposits were $4.7 billion as of June 30, 2018, a decrease of $22 million from prior quarter and an increase of $722 million, or 18%, from June 30, 2017. The quarter over quarter decline in deposit outstandings reflects a normal impact of the summer season in Florida.

    • Year-over-year, interest bearing deposits (interest bearing demand, savings and money market deposits) increased $271 million, or 12%, to $2.4 billion, noninterest bearing demand deposits increased $155 million, or 12%, to $1.5 billion, and CDs increased $295 million, or 60%, to $790 million.
    • Excluding acquired deposits, noninterest bearing deposits increased 4% while total deposits increased 5% compared to June 30, 2017.
    • The Company's balance sheet continues to be primarily core deposit funded. Core customer funding was $4.1 billion at June 30, 2018, compared to $4.1 billion at March 31, 2018 and $3.6 billion at June 30, 2017.
    • Overall cost of deposits remains attractive at 39 basis points.

  • Second quarter return on average tangible assets (ROTA) was 1.24%, compared to 1.34% in the prior quarter and 0.66% in the second quarter of 2017. Adjusted ROTA1 was 1.28% compared to 1.38% in the prior quarter and 1.02% in the second quarter of 2017.

Capital

  • Second quarter return on average tangible common equity (ROTCE) was 13.08%, compared to 14.41% in the prior quarter and 7.25% in the second quarter of 2017. Adjusted ROTCE1 was 13.49% compared to 14.82% in the prior quarter and 11.22% in the second quarter of 2017.
  • The common equity tier 1 capital ratio (CET1) was 12.9%, total capital ratio was 15.2% and the tier 1 leverage ratio was 11.0% at June 30, 2018.
  • Tangible common equity to tangible assets was 9.56% at June 30, 2018, compared to 9.33% at March 31, 2018, and 8.88% at June 30, 2017.

Asset Quality

  • Nonperforming loans to total loans outstanding was 0.66% at June 30, 2018, 0.50% at March 31, 2018, and 0.52% at June 30, 2017. Nonperforming loans increased $7.0 million, the result of a transfer of a single credit to nonaccrual status.
  • Nonperforming assets to total assets was 0.58% at June 30, 2018, 0.50% at March 31, 2018 and 0.49% at June 30, 2017.  The $34.6 million in nonperforming assets includes $3.1 million in closed branch properties held as REO.
  • The ratio of allowance for loan losses to total loans was 0.73% at June 30, 2018, 0.72% at March 31, 2018, and 0.78% at June 30, 2017.
  • The ratio of allowance for loan losses to non-acquired loans was 0.88% at June 30, 2018, 0.90% at March 31, 2018, and 0.95% at June 30, 2017.
  • Net charge-offs were $1.7 million or 0.17% for the current quarter compared to near zero in the prior quarter. Net charge-offs for the four most recent quarters averaged 0.09%.

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


                 
FINANCIAL HIGHLIGHTS       (Unaudited)        
(Amounts in thousands except per share data)                  
  Quarterly Trends  
                     
  2Q'18   1Q'18   4Q'17   3Q'17   2Q'17  
Selected Balance Sheet Data:                    
Total Assets $ 5,922,681     $ 5,903,101     $ 5,810,129     $ 5,340,413     $ 5,281,295    
Gross Loans 3,974,016     3,897,125     3,817,377     3,384,991     3,330,075    
Total Deposits 4,697,440     4,719,543     4,592,720     4,112,600     3,975,458    
                     
Performance Measures:                    
Net Income $ 16,964     $ 18,027     $ 13,047     $ 14,216     $ 7,676    
Net Interest Margin 3.77   % 3.80   % 3.71   % 3.74   % 3.84   %
Average Diluted Shares Outstanding 47,974     47,688     46,473     43,792     43,556    
Diluted Earnings Per Share (EPS) $ 0.35     $ 0.38     $ 0.28     $ 0.32     $ 0.18    
Return on (annualized):                    
Average Assets (ROA) 1.16   % 1.25   % 0.91   % 1.06   % 0.61   %
Average Tangible Common Equity (ROTCE) 13.08     14.41     10.69     12.45     7.25    
Efficiency Ratio 58.41     57.80     63.95     58.93     73.90    
                     
Adjusted Operating Measures1:                    
Adjusted Net Income $ 18,268     $ 19,298     $ 17,261     $ 15,145     $ 12,665    
Adjusted Diluted EPS 0.38     0.40     0.37     0.35     0.29    
Adjusted ROTA 1.28   % 1.38   % 1.23   % 1.16   % 1.02   %
Adjusted ROTCE 13.49     14.82     13.49     12.80     11.22    
Adjusted Efficiency Ratio 57.31     57.05     52.55     57.69     61.20    
Adjusted Noninterest Expenses as a                    
  Percent of Average Tangible Assets 2.57     2.55     2.24     2.50     2.73    
Other Data:                    
Market capitalization2 $ 1,489,411     $ 1,243,644     $ 1,182,796     $ 1,039,506     $ 1,047,361    
Full-time equivalent employees 826     814     805     762     759    
Number of ATMs 87     86     85     76     76    
Full service banking offices 49     49     51     45     45    
Registered online users 92,107     91,636     83,881     78,880     75,394    
Registered mobile devices 69,038     65,336     62,516     58,032     55,013    
                               

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

Acquisition of First Green Bancorp
On June 11, 2018 we announced the acquisition of First Green Bancorp, Inc., headquartered in Orlando, Florida, which we expect to close early in the fourth quarter.  Pursuant to the terms of the merger agreement, First Green Bancorp, Inc. will be merged into Seacoast Banking Corporation, and First Green Bank will be merged into Seacoast Bank.  Organized in 2009, First Green Bank has deposits of approximately $629 million and loans of $629 million.  First Green operates seven branches in the Orlando, Daytona and Ft. Lauderdale markets.  We expect the acquisition to be more than 10% accretive to earnings per share in 2019 excluding one-time transaction costs, and have a tangible book value earn-back of less than one year using the cross over method.  The transaction is expected to provide an internal rate of return over 25%. 

Vision 2020
We remain confident in our ability to achieve our Vision 2020 targets announced early last year.  We continue to monitor the impact of the Tax Cuts and Jobs Act of 2017 and believe the impact of this important legislation will more fully materialize in the marketplace moving forward.  Additionally, we announced the acquisition of First Green Bancorp, Inc., which is expected to close early in the fourth quarter.  We believe both the Tax Cuts and Jobs Act of 2017 and the acquisition of First Green Bancorp, Inc. reinforce our ability to achieve these objectives.

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

Second Quarter Strategic Highlights

Modernizing How We Sell

  • Seacoast Wealth Management added $75.1 million in new fee-based assets under management year to date, 65% of which were the direct result of referrals from the commercial, small business, and retail teams.  The resulting trust and brokerage revenues continue to rise, with industry leading products including digital tools, and a growing sales and support team throughout the footprint.
  • We launched our proprietary Commercial Banking Portal in June, providing customized banker dashboards with key indicators and alerts. With the Portal, our bankers have real-time updates on how their customers use our products and services, allowing them to provide more meaningful guidance and advice.  We believe this tool will provide our Bankers the ability to significantly expand relationships moving forward.
  • Other technology investments during the quarter included enhancements to our proprietary Connections portal, which provides our teams with greater access and insight to customer service and sales opportunities to better meet customer needs.

Lowering Our Cost to Serve

  • We continue to implement footprint-related expense reduction strategies, consolidating three banking center locations in the last twelve months.  Our upcoming First Green acquisition further provides opportunity to reposition our footprint, as six out of seven First Green branches are located within three miles of a Seacoast branch.
  • An automated lending platform, currently in development with strategic technology partners, will create efficiencies by digitizing the onboarding journey with automation of underwriting activities and application of credit policies.
  • We are in early project planning to fully overhaul our commercial lending process, bringing in new technology that will allow for process automation and greater results from our bankers.

Driving Improvements in How Our Business Operates

  • Our 100% Florida-staffed call center provides 24/7 customer service, and in the second half of the year will implement a fully modernized software platform providing expanded self-serve options with additional security features.
  • Partnering with specialized providers, we have created greater scalability in mortgage fulfillment while maintaining cycle times.

Scaling and Evolving Our Culture

  • During the quarter we acquired new seasoned commercial banking leadership in the markets of Broward County and Tampa and added four new bankers to our team.  Our goal is to add an additional ten commercial bankers before year end.

OTHER INFORMATION
Conference Call Information
Seacoast will host a conference call on Friday, July 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: 6353 188). 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 July 27, 2018 by dialing (888) 843-7419 and using passcode: 6353 188#.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon of July 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 June 30, 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 seven 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 http://www.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   Six Months Ended  
                             
  2Q'18   1Q'18   4Q'17   3Q'17   2Q'17   2Q'18   2Q'17  
Summary of Earnings                            
Net income $   16,964   $   18,027   $   13,047   $   14,216   $   7,676   $   34,991   $   15,602  
Adjusted net income (1)   18,268     19,298     17,261     15,145     12,665     37,566     22,935  
Net interest income  (2)   50,294     49,853     48,402     45,903     44,320     100,147     82,697  
Net interest margin  (2), (3)   3.77  %    3.80  %    3.71  %    3.74  %    3.84  %    3.78  %    3.74  % 
                             
Performance Ratios                            
Return on average assets-GAAP basis (3)   1.16  %    1.25  %    0.91  %    1.06  %    0.61  %    1.20  %    0.64  % 
Return on average tangible assets (3),(4)   1.24     1.34     0.97     1.12     0.66     1.29     0.70  
Adjusted return on average tangible assets (1), (3), (4)   1.28     1.38     1.23     1.16     1.02     1.33     0.96  
                             
Return on average shareholders' equity-GAAP basis (3)   9.59     10.52     7.87     9.59     5.43     10.04     6.08  
Return on average tangible shareholders' equity-GAAP basis (3),(4)   13.08     14.41     10.69     12.45     7.25     13.73     7.94  
Adjusted return on average tangible common equity (1), (3), (4)   13.49     14.82     13.49     12.80     11.22     14.14     11.00  
Efficiency ratio (5)   58.41     57.80     63.95     58.93   73.90     58.11   72.58  
Adjusted efficiency ratio (1)   57.31     57.05     52.55     57.69   61.20     57.18   62.82  
Noninterest income to total revenue   20.28     19.95     35.49     20.06   19.16     20.11   19.84  
Tangible common equity to tangible assets   9.56     9.33     9.27     9.13   8.88     9.56   8.88  
Loan-to-deposit ratio   83.51     84.10     82.54     85.18     83.48     83.51   83.48  
                             
Per Share Data                            
Net income diluted-GAAP basis $   0.35   $   0.38   $   0.28   $   0.32   $   0.18   $   0.73   $   0.38  
Net income basic-GAAP basis   0.36     0.38     0.29     0.33     0.18     0.74     0.38  
Adjusted earnings (1)   0.38     0.40     0.37     0.35     0.29     0.79     0.55  
                             
Book value per share common 15.18   14.94   14.70   13.66   13.29   15.18   13.29  
Tangible book value per share 11.67   11.39   11.15   10.95     10.55   11.67     10.55  
Cash dividends declared 0.00   0.00   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     YTD
                     
(Dollars in thousands, except share and per share data) 2Q'18     1Q'18     4Q'17     3Q'17     2Q'17     2Q'18     2Q'17
                                       
Interest on securities:                                      
Taxable $   9,389     $ 9,361     $ 9,153     $ 8,823     $ 8,379     $ 18,750     $ 16,466
Nontaxable 216     243     231     189     206     459     493
Interest and fees on loans 46,519     45,257     43,322     40,403     38,209     91,776     70,100
Interest on federal funds sold and other investments 585     616     638     664     604     1,201     1,114
Total Interest Income 56,709     55,477     53,344     50,079     47,398     112,186     88,173
                                       
Interest on deposits 1,988     1,538     1,246     930     854     3,526     1,478
Interest on time certificates 2,629     2,179     2,032     1,266     814     4,808     1,380
Interest on borrowed money 1,885     1,998     1,840     2,134     1,574     3,883     2,994
Total Interest Expense 6,502     5,715     5,118     4,330     3,242     12,217     5,852
                                       
Net Interest Income 50,207     49,762     48,226     45,749     44,156     99,969     82,321
Provision for loan losses 2,529     1,085     2,263     680     1,401     3,614     2,705
Net Interest Income After Provision for Loan Losses 47,678     48,677     45,963     45,069     42,755     96,355     79,616
                                       
Noninterest income:                                      
Service charges on deposit accounts 2,674     2,672     2,566     2,626     2,435     5,346     4,857
Trust fees 1,039     1,021     941     967     917     2,060     1,797
Mortgage banking fees 1,336     1,402     1,487     2,138     1,272     2,738     2,824
Brokerage commissions and fees 461     359     273     351     351     820     728
Marine finance fees 446     573     313     137     326     1,019     460
Interchange income 3,076     2,942     2,836     2,582     2,671     6,018     5,419
BOLI income 1,066     1,056     1,100     836     757     2,122     1,490
Other 2,671     2,373     1,861     1,844     1,738     5,044     2,797
  12,769     12,398     11,377     11,481     10,467     25,167     20,372
Gain on sale of VISA stock 0     0     15,153     0     0     0     0
Securities gains/(losses), net (48 )   (102 )   112     (47 )   21     (150 )   21
Total Noninterest Income 12,721     12,296     26,642     11,434     10,488     25,017     20,393
                                       
Noninterest expenses:                                      
Salaries and wages 16,429     15,381     16,321     15,627     18,375     31,810     33,744
Employee benefits 3,034     3,081     2,812     2,917     2,935     6,115     6,003
Outsourced data processing costs 3,393     3,679     4,160     3,231     3,456     7,072     6,725
Telephone / data lines 643     612     538     573     648     1,255     1,180
Occupancy 3,316     3,117     3,265     2,447     4,421     6,433     7,578
Furniture and equipment 1,468     1,457     1,806     1,191     1,679     2,925     3,070
Marketing 1,344     1,252     1,490     1,298     1,074     2,596     1,996
Legal and professional fees 2,301     1,973     3,054     2,560     3,276     4,274     5,408
FDIC assessments 595     598     558     548     650     1,193     1,220
Amortization of intangibles 1,004     989     964     839     839     1,993     1,558
Foreclosed property expense and net (gain)/loss on sale 405     192     (7 )   (296 )   297     597     4
Other 4,314     4,833     4,223     3,427     3,975     9,147     7,885
Total Noninterest Expenses 38,246     37,164     39,184     34,361     41,625     75,410     76,371
                                       
Income Before Income Taxes 22,153     23,809     33,421     22,142     11,618     45,962     23,638
Income taxes 5,189     5,782     20,374     7,926     3,942     10,971     8,036
                                       
Net Income $   16,964     $ 18,027     $ 13,047     $ 14,216     $ 7,676     $ 34,991     $ 15,602
                                       
Per share of common stock:                                      
                                       
Net income diluted $   0.35     $ 0.38     $ 0.28     $ 0.32     $ 0.18     $ 0.73     $ 0.38
Net income basic 0.36     0.38     0.29     0.33     0.18     0.74     0.38
Cash dividends declared 0.00     0.00     0.00     0.00     0.00     0.00     0.00
                                       
Average diluted shares outstanding 47,974,118     47,688,388     46,472,538     43,792,108     43,556,285     47,827,646     41,538,769
Average basic shares outstanding 47,164,909     46,951,829     45,541,099     43,151,248     42,841,152     47,058,958     40,851,273
                                       
                                       


                                 
CONDENSED CONSOLIDATED BALANCE SHEETS          (Unaudited)                      
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES                              
                                 
    June 30,      March 31,     December 31,     September 30,     June 30,    
(Dollars in thousands, except share data)   2018     2018     2017     2017     2017    
                                 
Assets                                
Cash and due from banks   $   123,927     $   129,065     $   104,039     $   114,621     $   88,133    
Interest bearing deposits with other banks     7,594     6,794     5,465     10,657     20,064    
Total Cash and Cash Equivalents   131,521     135,859     109,504     125,278     108,197    
                                 
Time deposits with other banks   10,562     12,553     12,553     14,591     16,426    
                                 
Debt Securities:                                
Available for sale (at fair value)   954,906     982,958     949,460     990,299     1,010,244    
Held to maturity (at amortized cost)   382,137     400,647     416,863     374,773     397,096    
Total Debt Securities    1,337,043     1,383,605     1,366,323     1,365,072     1,407,340    
                                 
Loans held for sale   14,707     20,887     24,306     29,447     22,262    
                                 
Loans   3,974,016     3,897,125     3,817,377     3,384,991     3,330,075    
Less: Allowance for loan losses   (28,924 )   (28,118 )   (27,122 )   (26,232 )   (26,000 )  
Net Loans   3,945,092     3,869,007     3,790,255     3,358,759     3,304,075    
                                 
Bank premises and equipment, net   63,991     64,577     66,883     57,092     56,765    
Other real estate owned   8,417     10,288     7,640     7,142     8,497    
Goodwill   148,555     148,555     147,578     101,747     101,739    
Other intangible assets, net   17,319     18,246     19,099     16,102     16,941    
Bank owned life insurance   121,602     120,654     123,981     118,762     88,003    
Net deferred tax assets   26,021     24,427     25,417     43,951     52,195    
Other assets   97,851     94,443     116,590     102,356     98,855    
Total Assets   $   5,922,681     $   5,903,101     $   5,810,129     $   5,340,299     $   5,281,295    
                                 
Liabilities and Shareholders' Equity                                
Liabilities                                
Deposits                                
Noninterest demand   $   1,463,652     $   1,488,261     $   1,400,227     $   1,284,118     $   1,308,458    
Interest-bearing demand     976,281     1,015,054     1,050,755     935,097     934,861    
Savings     444,736     437,878     434,346     379,499     376,825    
Money market     1,023,170     1,035,531     931,458     870,788     861,119    
Other time certificates     413,643     410,108     414,277     288,398     278,890    
Brokered time certificates     228,602     184,405     217,385     281,551     149,270    
Time certificates of more than $250,000     147,356     148,306     144,272     73,149     66,035    
Total Deposits   4,697,440     4,719,543     4,592,720     4,112,600     3,975,458    
                                 
Securities sold under agreements to repurchase   200,050     173,249     216,094     142,153     167,558    
Federal Home Loan Bank borrowings   205,000     208,000     211,000     389,000     395,000    
Subordinated debt   70,664     70,591     70,521     70,451     70,381    
Other liabilities   33,364     29,857     30,130     31,654     95,521    
Total Liabilities   5,206,518     5,201,240     5,120,465     4,745,858     4,703,918    
                                 
Shareholders' Equity                                
Common stock   4,716     4,698     4,693     4,351     4,339    
Additional paid in capital   665,885     663,727     661,632     576,825     574,842    
Retained earnings   64,790     47,825     29,914     16,161     1,945    
Treasury stock   (2,884 )   (2,279 )   (2,359 )   (1,730 )   (1,768 )  
    732,507     713,971     693,880     595,607     579,358    
Accumulated other comprehensive loss, net   (16,344 )   (12,110 )   (4,216 )   (1,166 )   (1,981 )  
Total Shareholders' Equity   716,163     701,861     689,664     594,441     577,377    
Total Liabilities & Shareholders' Equity   $   5,922,681     $   5,903,101     $   5,810,129     $   5,340,299     $   5,281,295    
                                 
Common Shares Outstanding     47,163,109     46,983,165     46,917,735     43,512,179     43,458,973    
                                 
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) 2Q'18     1Q'18     4Q'17     3Q'17     2Q'17    
                               
Credit Analysis                               
Net charge-offs (recoveries) - non-acquired loans $   1,715     $   117     $   1,475     $   612     $   304    
Net charge-offs (recoveries) - acquired loans   (25 )   (116 )   (139 )   (333 )   (405 )  
Total net charge-offs (recoveries) $   1,690     $   1     $   1,336     $   279     $   (101 )  
                               
TDR valuation adjustments $   33     $   88     $   37     $   169     $   64    
                               
Net charge-offs (recoveries) to average loans - non-acquired loans 0.17   % 0.01   % 0.16   % 0.07   % 0.04   %
Net charge-offs (recoveries) to average loans - acquired loans   (0.00 )   (0.01 )   (0.02 )   (0.04 )   (0.05 )  
Total net charge-offs (recoveries) to average loans 0.17     0.00     0.14     0.03     (0.01 )  
                               
Loan loss provision - non-acquired loans $   2,591     $   1,383     $   2,053     $   795     $   1,690    
Loan loss provision (recapture) - acquired loans   (62 )   (298 )   210     (115 )   (289 )  
Total loan loss provision $   2,529     $   1,085     $   2,263     $   680     $   1,401    
                               
Allowance for loan losses - non-acquired loans $   28,384     $   27,541     $   26,363     $   25,822     $   25,809    
Allowance for loan losses - acquired loans   540     577     759     410     191    
Total allowance for loan losses $   28,924     $   28,118     $   27,122     $   26,232     $   26,000    
                               
Non-acquired loans at end of period $   3,221,569     $   3,063,618     $   2,922,609     $   2,837,490     $   2,722,866    
Purchased noncredit impaired loans at end of period   739,232     819,814     877,351     537,057     594,077    
Purchased credit impaired loans at end of period   13,215     13,693     17,417     10,443     13,132    
Total loans $   3,974,016     $   3,897,125     $   3,817,377     $   3,384,990     $   3,330,075    
                               
Non-acquired loans allowance for loan losses to non-acquired loans at end of period 0.88   % 0.90   % 0.90   % 0.91   % 0.95   %
Total allowance for loan losses to total loans at end of period 0.73     0.72     0.71     0.77     0.78    
Acquired loans allowance for loan losses to acquired loans at end of period 0.07     0.07     0.08     0.07     0.03    
Discount for credit losses to acquired loans at end of period 2.31     2.32     2.33     2.77     3.37    
                               
End of Period                              
Nonperforming loans - non-acquired $   19,578     $   12,628     $   12,569     $   10,877     $   10,541    
Nonperforming loans - acquired   6,624     6,711     6,955     3,498     6,632    
Other real estate owned - non-acquired   354     2,246     2,246     1,748     1,748    
Other real estate owned - acquired   4,969     4,969     1,632     1,632     1,645    
Bank branches closed included in other real estate owned   3,094     3,073     3,762     3,762     5,104    
Total nonperforming assets $   34,619     $   29,627     $   27,164     $   21,517     $   25,670    
                               
Restructured loans (accruing) $   14,241     $   14,777     $   15,559     $   16,181     $   16,941    
                               
Nonperforming loans to loans at end of period - non-acquired 0.61   % 0.41   % 0.43   % 0.38   % 0.39   %
Nonperforming loans to loans at end of period - acquired 0.88     0.81     0.78     0.64     1.09    
Allowance for loan losses to nonperforming loans - non-acquired 144.98     218.10     209.75     237.40     244.84    
Total nonperforming loans to loans at end of period 0.66     0.50     0.51     0.42     0.52    
                               
Nonperforming assets to total assets - non-acquired 0.39   % 0.30   % 0.32   % 0.31   % 0.33   %
Nonperforming assets to total assets - acquired 0.19     0.20     0.15     0.10     0.16    
Total nonperforming assets to total assets 0.58     0.50     0.47     0.40     0.49    
                               
Average Balances                              
Total average assets $   5,878,035     $   5,851,688     $   5,716,230     $   5,316,119     $   5,082,002    
Less: Intangible assets   166,393     167,136     149,432     118,364     114,563    
Total average tangible assets $   5,711,642     $   5,684,552     $   5,566,798     $   5,197,755     $   4,967,439    
                               
Total average equity $   709,674     $   695,240     $   657,100     $   587,919     $   567,448    
Less: Intangible assets   166,393     167,136     149,432     118,364     114,563    
Total average tangible equity $   543,281     $   528,104     $   507,668     $   469,555     $   452,885    
                               
  June 30,     March 31,     December 31,     September 30,     June 30,    
LOANS 2018     2018     2017     2017     2017    
                               
Construction and land development $   359,070     $   374,244     $   343,125     $   245,151     $   230,574    
Commercial real estate - Owner Occupied   812,306     796,898     791,408     688,224     654,783    
Commercial real estate - Non-Owner Occupied   888,989     848,341     848,584     789,867     809,285    
Residential real estate   1,103,946     1,065,152     1,038,810     941,169     991,144    
Residential real estate   190,835     195,788     189,436     185,122     179,151    
Commercial and financial   618,870     616,702     606,014     535,457     465,138    
 Total Loans $   3,974,016     $   3,897,125     $   3,817,377     $   3,384,990     $   3,330,075    
                               
                               


                                   
AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES (1)                    (Unaudited)              
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                                      
                                             
                                             
  2Q'18     1Q'18     2Q'17      
  Average         Yield/   Average         Yield/   Average         Yield/    
(Dollars in thousands) Balance     Interest   Rate   Balance     Interest   Rate   Balance     Interest   Rate    
Assets                                            
Earning assets:                                            
Securities:                                            
Taxable $   1,324,280     $   9,389     2.84  %  $   1,361,277     $   9,361   2.75 % $   1,261,017     $   8,379   2.66 %
Nontaxable 32,055     273     3.41   32,640     307   3.76   28,092     316   4.50    
Total Securities 1,356,335     9,662     2.85   1,393,917     9,668   2.77   1,289,109     8,695   2.70    
                                             
Federal funds sold and other investments 49,387     585   4.75   56,173     616   4.45   72,535     604   3.34    
                                             
Loans, net 3,948,460     46,549     4.73   3,872,369     45,284   4.74   3,266,812     38,263   4.70    
                                             
Total Earning Assets 5,354,182     56,796   4.25   5,322,459     55,568   4.23   4,628,456     47,562   4.12    
                                             
Allowance for loan losses (29,234 )           (27,469 )           (25,276 )            
Cash and due from banks 110,549             113,899             99,974              
Premises and equipment 64,445             65,932             59,415              
Intangible assets 166,393             167,136             114,563              
Bank owned life insurance 121,008             122,268             87,514              
Other assets 90,692             87,463             117,356              
                                             
Total Assets $   5,878,035             $   5,851,688             $   5,082,002              
                                             
Liabilities and Shareholders' Equity                                            
Interest-bearing liabilities:                                            
Interest-bearing demand $   996,929     $   492     0.20   $   1,001,672     $   450   0.18   $   949,981     $   262   0.11    
Savings 439,691     118   0.11   435,433     104   0.10   378,989     51   0.05    
Money market 1,027,705     1,378   0.54   976,498     984   0.41   868,427     541   0.25    
Time deposits 790,404     2,629   1.33   776,807     2,179   1.14   432,805     814   0.75    
Federal funds purchased and securities sold under agreements to repurchase 179,540     334   0.75   175,982     274   0.63   174,715     194   0.45    
Federal Home Loan Bank borrowings 160,846     741   1.85   276,389     1,030   1.51   323,780     780   0.97    
Other borrowings 70,623     810   4.60   70,550     694   3.99   70,343     600   3.42    
                                             
Total Interest-Bearing Liabilities 3,665,738     6,502   0.71   3,713,331     5,715   0.62   3,199,040     3,242   0.41    
                                             
Noninterest demand 1,473,331             1,413,967             1,283,255              
Other liabilities 29,292             29,150             32,259              
Total Liabilities  5,168,361             5,156,448             4,514,554              
                                             
Shareholders' equity 709,674             695,240             567,448              
                                             
Total Liabilities & Equity $   5,878,035             $   5,851,688             $   5,082,002              
                                             
Interest expense as a % of earning assets           0.49             0.44             0.28    
Net interest income as a % of earning assets       $   50,294     3.77 %       $   49,853   3.80 %       $   44,320   3.84 %
                                             
                                             
(1) On a fully taxable equivalent basis.  All yields and rates have been computed on an annualized basis using amortized cost.                        
     Fees on loans have been included in interest on loans.  Nonaccrual loans are included in loan balances.                              
                                             


AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES (1)          (Unaudited)      
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                      
                             
  2018     2017    
  Year to Date
  Year to Date   
  Average         Yield/   Average         Yield/  
(Dollars in thousands) Balance     Interest   Rate   Balance     Interest   Rate  
Assets                            
Earning assets:                            
Securities:                            
Taxable $   1,342,676     $   18,750   2.79 % $   1,270,081     $   16,466   2.59 %
Nontaxable 32,346     580   3.59   27,963     757   5.41  
Total Securities 1,375,022     19,330   2.81   1,298,044     17,223   2.65  
                             
Federal funds sold and other investments 52,761     1,201   4.59   64,697     1,114   3.47  
                             
Loans, net 3,910,625     91,833   4.74   3,093,700     70,212   4.58  
                             
Total Earning Assets 5,338,408     112,364   4.24   4,456,441     88,549   4.01  
                             
Allowance for loan losses (28,356 )           (24,658 )          
Cash and due from banks 112,215             102,872            
Premises and equipment 65,184             59,101            
Intangible assets 166,762             96,819            
Bank owned life insurance 121,635             86,170            
Other assets 89,086             115,184            
                             
Total Assets $   5,864,934             $   4,891,929            
                             
Liabilities and Shareholders' Equity                            
Interest-bearing liabilities:                            
Interest-bearing demand $   999,287     $   942   0.19 % $   892,432     $   425   0.10 %
Savings 437,574     222   0.10   366,291     95   0.05  
Money market 1,002,243     2,362   0.48   836,289     958   0.23  
Time deposits 783,643     4,808   1.24   390,211     1,380   0.71  
Federal funds purchased and securities sold under agreements to repurchase 177,771     608   0.69   177,891     347   0.39  
Federal Home Loan Bank borrowings 218,298     1,771   1.64   374,680     1,482   0.80  
Other borrowings 70,587     1,504   4.30   70,308     1,165   3.34  
                             
Total Interest-Bearing Liabilities 3,689,403     12,217   0.67   3,108,102     5,852   0.38  
                             
Noninterest demand 1,443,813             1,233,809            
Other liabilities 29,221             32,593            
Total Liabilities  5,162,437             4,374,504            
                             
Shareholders' equity 702,497             517,425            
                             
Total Liabilities & Equity $   5,864,934             $   4,891,929            
                             
Interest expense as a % of earning assets           0.46             0.26  
Net interest income as a % of earning assets       $   100,147   3.78 %       $   82,697   3.74 %
                             
                             
(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                  
                       
    June 30,   March 31,   December 31,   September 30,   June 30,  
(Dollars in thousands)   2018   2018   2017   2017   2017  
                       
Customer Relationship Funding                       
Noninterest demand                      
Commercial   $   1,154,225   $   1,163,119   $   1,073,539   $   997,749   $   995,720  
Retail     236,838   252,055   253,454   217,809   238,506  
Public funds     44,182   49,014   50,837   43,686   47,691  
Other     28,407   24,073   22,397   24,874   26,541  
      1,463,652   1,488,261   1,400,227   1,284,118   1,308,458  
                       
Interest-bearing demand                      
Commercial   181,646   164,359   157,272   156,176   155,178  
Retail   681,615   700,262   702,616   670,705   659,906  
Public funds   113,020   150,433   190,867   108,216   119,777  
      976,281   1,015,054   1,050,755   935,097   934,861  
                       
Total transaction accounts                      
Commercial   1,335,871   1,327,478   1,230,811   1,153,925   1,150,898  
Retail   918,453   952,317   956,070   888,514   898,412  
Public funds   157,202   199,447   241,704   151,902   167,468  
Other   28,407   24,073   22,397   24,874   26,541  
      2,439,933   2,503,315   2,450,982   2,219,215   2,243,319  
                       
Savings   444,736   437,878   434,346   379,499   376,825  
                       
Money market                      
Commercial   408,005   410,527   375,471   360,567   351,871  
Retail   522,783   522,882   471,086   431,325   427,575  
Public funds   92,382   102,122   84,901   78,896   81,673  
      1,023,170   1,035,531   931,458   870,788   861,119  
                       
Time certificates of deposit   789,601   742,819   775,934   643,098   494,195  
Total Deposits   $   4,697,440   $   4,719,543   $   4,592,720   $   4,112,600   $   3,975,458  
                       
Customer sweep accounts   $   200,050   $   173,249   $   216,094   $   142,153   $   167,558  
                       
Total core customer funding (1)   $   4,107,889   $   4,149,973   $   4,032,880   $   3,611,655   $   3,648,821  
                       
                       
(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     YTD  
(Dollars in thousands except per share data)                                 June 30,     June 30,    
2Q'18      1Q'18      4Q'17      3Q'17      2Q'17        2018      2017     
                                             
Net income $   16,964     $   18,027     $   13,047     $   14,216     $   7,676       $   34,991     $   15,602    
                                             
Gain on sale of VISA stock   0       0       (15,153 )     0       0         0       0    
Securities (gains)/losses, net   48       102       (112 )     47       (21 )       150       (21 )  
Total Adjustments to Revenue   48       102       (15,265 )     47       (21 )       150       (21 )  
                                             
Merger related charges   695       470       6,817       491       5,081         1,165       5,614    
Amortization of intangibles   1,004       989       963       839       839         1,993       1,558    
Business continuity expenses - Hurricane Irma 0     0     0       352       0       0       0    
Branch reductions and other expense initiatives   0       0       0       (127 )     1,876         0       4,448    
Total Adjustments to Noninterest Expense   1,699       1,459       7,780       1,555       7,796         3,158       11,620    
                                             
Effective tax rate on adjustments   (443 )     (538 )     3,147       (673 )     (2,786 )       (981 )     (4,266 )  
Effect of change in corporate tax rate   0       248       8,552       0       0         248       0    
Adjusted Net Income $   18,268     $   19,298     $   17,261     $   15,145     $   12,665       $   37,566     $   22,935    
Earnings per diluted share, as reported   0.35       0.38       0.28       0.32       0.18         0.73       0.38    
Adjusted Earnings per Diluted Share    0.38       0.40       0.37       0.35       0.29         0.79       0.55    
Average shares outstanding (000)   47,974       47,688       46,473       43,792       43,556         47,828       41,539    
                                             
Revenue $   62,928     $   62,058     $   74,868     $   57,183     $   54,644       $   124,985     $   102,714    
Total Adjustments to Revenue   48       102       (15,265 )     47       (21 )       150       (21 )  
Adjusted Revenue   62,976       62,160       59,603       57,230       54,623         125,135       102,693    
                                             
Noninterest Expense   38,246       37,164       39,184       34,361       41,625         75,410       76,371    
Total Adjustments to Noninterest Expense   1,699       1,459       7,780       1,555       7,796         3,158       11,620    
Adjusted Noninterest Expense   36,547       35,705       31,404       32,806       33,829         72,252       64,751    
                                             
Adjusted Noninterest Expense   36,547       35,705       31,404       32,806       33,829         72,252       64,751    
Foreclosed property expense and net (gain)/loss on sale   405       192       (7 )     (296 )     297         597       4    
Net Adjusted Noninterest Expense   36,142       35,513       31,411       33,102       33,532         71,655       64,747    
                                             
Adjusted Revenue   62,976       62,160       59,603       57,230       54,623         125,135       102,693    
Impact of FTE adjustment   87       91       174       154       164         178       375    
Adjusted Revenue on a fully taxable equivalent basis   63,063       62,251       59,777       57,384       54,787         125,313       103,068    
Adjusted Efficiency Ratio 57.3   % 57.1   % 52.6   % 57.7   % 61.2   %   57.2   % 62.8   %
                                             
Average Assets $   5,878,035     $   5,851,688     $   5,716,230     $   5,316,119     $   5,082,002       $   5,864,934     $   4,891,929    
Less average goodwill and intangible assets   (166,393 )     (167,136 )     (149,432 )     (118,364 )     (114,563 )       (166,762 )     (96,819 )  
Average Tangible Assets   5,711,642       5,684,552       5,566,798       5,197,755       4,967,439         5,698,172       4,795,110    
                                             
Return on Average Assets (ROA) 1.16   % 1.25   % 0.91   % 1.06   % 0.61   %   1.20   % 0.64   %
Impact of removing average intangible assets and related amortization 0.08     0.09     0.06     0.06     0.05       0.09     0.06    
Return on Tangible Average Assets (ROTA) 1.24     1.34     0.97     1.12     0.66       1.29     0.70    
Impact of other adjustments for Adjusted Net Income 0.04     0.04     0.26     0.04     0.36       0.04     0.26    
Adjusted Return on Average Tangible Assets 1.28     1.38     1.23     1.16     1.02       1.33     0.96    
                                             
Average Shareholders' Equity $   709,674     $   695,240     $   657,100     $   587,919     $   567,448       $   702,497     $   517,425    
Less average goodwill and intangible assets   (166,393 )     (167,136 )     (149,432 )     (118,364 )     (114,563 )       (166,762 )     (96,819 )  
Average Tangible Equity   543,281       528,104       507,668       469,555       452,885         535,735       420,606    
                                             
Return on Average Shareholders' Equity 9.6   % 10.5   % 7.9   % 9.6   % 5.4   %   10.0   % 6.1   %
Impact of removing average intangible assets and related amortization 3.5     3.9     2.8     2.9     1.9       3.7     1.8    
Return on Average Tangible Common Equity (ROTCE) 13.1     14.4     10.7     12.5     7.3       13.7     7.9    
Impact of other adjustments for Adjusted Net Income 0.4     0.4     2.8     0.3     3.9       0.4     3.1    
Adjusted Return on Average Tangible Common Equity  13.5     14.8     13.5     12.8     11.2       14.1     11.0    
                                             

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