Seacoast Reports Second Quarter 2022 Results

Stuart, Florida, UNITED STATES


Record Commercial Loan Originations, Strong Growth in Demand Deposits, and Significant Expansion in Net Interest Margin Highlight Q2 Results

Well-Positioned Balance Sheet with Strong Capital and Liquidity

STUART, Fla., July 28, 2022 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") (NASDAQ: SBCF) today reported net income in the second quarter of 2022 of $32.8 million, or $0.53 per diluted share. Second quarter 2022 net income grew 59% compared to the first quarter of 2022, and increased 4% compared to the second quarter of 2021. Adjusted net income1 for the second quarter of 2022 was $36.3 million, or $0.59 per diluted share. Second quarter 2022 adjusted net income grew 34% compared to the first quarter of 2022, and increased 9% compared to the second quarter of 2021. At June 30, 2022, the ratio of tangible common equity to tangible assets was 9.74%, and tangible book value per share was $16.66. A decline in the value of the available for sale securities portfolio driven by rising interest rates during the first half of 2022 impacted the ratio of tangible common equity to tangible assets by 99 basis points and impacted tangible book value per share by $1.90 compared to December 31, 2021.

For the second quarter of 2022, return on average tangible assets was 1.29%, return on average tangible shareholders' equity was 13.01%, and the efficiency ratio was 56.22%, compared to 0.85%, 8.02%, and 62.33%, respectively, in the prior quarter, and 1.48%, 13.88%, and 54.93%, respectively, in the prior year quarter. Adjusted return on average tangible assets1 in the second quarter of 2022 was 1.38%, adjusted return on average tangible shareholders' equity1 was 13.97%, and the adjusted efficiency ratio1 was 53.15%, compared to 1.06%, 10.01%, and 54.86%, respectively, in the prior quarter, and 1.52%, 14.27%, and 53.49%, respectively, in the prior year quarter.

Charles M. Shaffer, Seacoast's Chairman and CEO, said, “Our quarterly results demonstrate the continued success of our balanced growth strategy, with steady, disciplined organic growth and financially attractive and well-integrated acquisitions combining to deliver strong returns for our shareholders. The quarter was highlighted by a significant increase in our net interest margin, strong loan originations, and continued growth in demand deposits. Adjusted pre-tax pre-provision earnings1 increased 11% over the prior quarter to $46.4 million, driving improvements in the overhead ratio, return on tangible assets, and return on tangible common equity.”

“I would like to thank the Seacoast team for their dedication and hard work, and I am very excited to continue our momentum as we build a statewide brand as Florida’s leading bank. As we enter the second half of 2022, we have already this year added new markets in Naples, Jacksonville, and Sarasota, and in the fourth quarter we will add Miami, Ocala, and Gainesville. This expansion into some of the best banking markets in the United States, in combination with a statewide highly competitive brand of banking, will generate disciplined growth and strong returns in the years to come,” Shaffer added.

Shaffer concluded, “We continue to operate the company with a solid balance sheet, fortified with a tangible common equity ratio of 9.74%. We see continued strong credit quality metrics, and the allowance for credit losses totals $90.8 million, with an additional $21.4 million in purchase discount on acquired loans. This provides meaningful loss absorption capacity, which when aggregated, represents 1.71% of loans outstanding. In addition, our balance sheet is supported by one of the best customer franchises in the industry and a strictly underwritten credit portfolio.”

Acquisitions Update

Seacoast’s balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit shareholders and expand the franchise across Florida.

In the first quarter of 2022, Seacoast completed the acquisitions of Sabal Palm Bancorp, Inc. (“Sabal Palm”) in Sarasota, and Business Bank of Florida Corp. (“BBFC”) in Brevard County, which collectively added a combined $367.9 million in loans and $562.3 million in deposits. Seacoast recorded a $5.1 million provision for credit losses on acquired loans at the acquisition date. Integration activities, including system conversion, are now complete.

The pending acquisition of Apollo Bancshares, Inc. will add a premier, locally-focused franchise in the rapidly growing South Florida market. We expect this transaction to close and the system conversion to be complete by early October 2022. The addition of Drummond Banking Company will expand Seacoast’s footprint into the emerging Gainesville and Ocala markets with low-cost core deposits and diversified business lines. We expect this transaction to close in early October 2022, with the system conversion in the first quarter of 2023. Each acquisition provides the opportunity for Seacoast to leverage its proven integration capabilities to preserve and build on Apollo’s and Drummond’s strong customer-focused relationships. The two acquisitions are expected to add a combined $1.2 billion in loans and $1.9 billion in deposits in the fourth quarter of 2022.

Financial Results
Income Statement

  • Net income was $32.8 million, or $0.53 per diluted share for the second quarter of 2022 compared to net income of $20.6 million, or $0.33, for the prior quarter, and $31.4 million, or $0.56, for the prior year quarter. For the six months ended June 30, 2022, net income was $53.3 million, or $0.86 per diluted share, compared to $65.1 million, or $1.17 per diluted share, for the six months ended June 30, 2021. Adjusted net income1 for the second quarter of 2022 was $36.3 million, or $0.59 per diluted share. This compares to $27.1 million, or $0.44, for the prior quarter, and $33.3 million, or $0.59 per diluted share, for the prior year quarter. Excluded from adjusted net income are $3.0 million in merger-related expenses in the second quarter of 2022, compared to $6.7 million in the first quarter of 2022 and $0.5 million in the second quarter of 2021. For the six months ended June 30, 2022, adjusted net income1 was $63.4 million, or $1.03 per diluted share, compared to $68.7 million, or $1.23 per diluted share, for the six months ended June 30, 2021.
  • Net revenues were $98.6 million in the second quarter of 2022, an increase of $6.7 million, or 7%, compared to the prior quarter, and an increase of $17.5 million, or 22%, compared to the prior year quarter. For the six months ended June 30, 2022 net revenues were $190.5 million, an increase of $25.1 million, or 15%, compared to the six months ended June 30, 2021. Adjusted revenues1 were $98.9 million in the second quarter of 2022, an increase of $6.6 million, or 7%, compared to the prior quarter, and an increase of $17.7 million, or 22%, compared to the prior year quarter. For the six months ended June 30, 2022 adjusted revenues1 were $191.3 million, an increase of $25.7 million, or 16%, compared to the six months ended June 30, 2021.
  • On an adjusted basis, pre-tax pre-provision earnings1 was $46.4 million, an increase of 11% compared to the first quarter of 2022 and an increase of 23% compared to the second quarter of 2021. The increase from the prior quarter was the result of higher net interest income driven by expanding margin, increasing noninterest income, and a reduction in noninterest expense.
  • Net interest income totaled $81.6 million in the second quarter of 2022, an increase of $5.1 million, or 7%, from the first quarter of 2022, and an increase of $15.8 million, or 24%, compared to the second quarter of 2021. For the six months ended June 30, 2022, net interest income was $158.2 million, an increase of $25.8 million, or 19% compared to the six months ended June 30, 2021.
  • Net interest margin increased to 3.38% in the second quarter of 2022 compared to 3.25% in the first quarter of 2022, the result of higher yields on securities and loans and a stable cost of deposits. Excluding the effect of PPP and accretion on acquired loans, net interest margin increased 19 basis points to 3.24% in the second quarter of 2022 from 3.05% in the first quarter of 2022. Securities yields increased 30 basis points to 1.98%, reflecting the impact of the addition of higher yielding securities during the quarter. Non-PPP loan yields increased three basis points to 4.27%. The effect on net interest margin of accretion of purchase discounts on acquired loans in the second quarter of 2022 was 12 basis points, a decrease of 3 basis points compared to the prior quarter. The effect on net interest margin of interest and fees on PPP loans was an increase of two basis points in the second quarter of 2022 compared to an increase of five basis points in the prior quarter. The cost of deposits remained only six basis points for the second quarter of 2022. The margin benefited from the Company’s asset sensitivity, disciplined growth across the balance sheet, and no increase in the cost of deposits from the prior quarter.
  • Noninterest income totaled $17.0 million in the second quarter of 2022, an increase of $1.6 million, or 10%, compared to the prior quarter, and an increase of $1.6 million, or 11%, compared to the prior year quarter. For the six months ended June 30, 2022, noninterest income was $32.3 million, a decrease of $0.7 million, or 2%, compared to the six months ended June 30, 2021. Results for the second quarter of 2022 included the following:
    • Service charges on deposits increased $0.6 million to $3.4 million, reflecting growth in commercial deposit relationships and service charge fee increases.
    • Despite the impact of broad based declining equity market valuations, the wealth management group continues to win relationships, resulting in $2.8 million in fee income for the quarter, an increase of $0.1 million from the prior quarter.
    • Mortgage banking fees were $0.9 million, compared to $1.7 million in the prior quarter, reflecting the continued impact of rising rates and limited housing inventory on saleable loan production.
    • Gains on sale of SBA loans were $0.5 million, an increase of $0.3 million compared to the prior quarter, reflecting higher production during the quarter.
    • Other income increased by $0.9 million in the second quarter of 2022 to $3.8 million and included the benefit of higher loan-swap related income.
    • The Company recognized $0.3 million in securities losses in the second quarter of 2022, compared to $0.5 million in the first quarter of 2022 and $0.1 million in the second quarter of 2021.
  • The provision for credit losses was $0.8 million in the second quarter of 2022, compared to $6.6 million in the prior quarter. The prior quarter included $5.1 million in provisioning for loans acquired in the Sabal Palm and BBFC transactions.
  • Noninterest expense was $56.1 million in the second quarter of 2022, a decrease of $2.8 million, or 5%, compared to the prior quarter, and an increase of $10.4 million, or 23%, compared to the prior year quarter. Noninterest expense was $115.1 million for the six months ended June 30, 2022, compared to $91.9 million in the six months ended June 30, 2021. Changes from the first quarter of 2022 included the following:
    • Salaries and wages decreased $0.2 million to $28.1 million in the second quarter of 2022. The second quarter of 2022 reflects higher compensation costs, with ongoing investments in commercial banking talent and production support roles, which were more than offset by a $2.4 million decline in merger-related expenses quarter over quarter.
    • Employee benefits declined by $1.4 million to $4.2 million, reflecting seasonally higher payroll taxes and 401(k) contributions in the first quarter of 2022.
    • Marketing expense increased $0.7 million to $1.9 million in the second quarter of 2022, the result of marketing campaigns primarily focused on our expansion markets.
    • Legal and professional fees declined by $1.8 million to $2.9 million in the second quarter of 2022, reflecting lower merger-related expenses in the current quarter.
    • Other expenses increased by $0.6 million, reflecting higher recruiting and production-related costs.
  • Seacoast recorded $8.9 million of income tax expense in the second quarter of 2022, compared to $5.8 million in the prior quarter and $8.8 million in the second quarter of 2021. During the second quarter of 2022, the Company received a $1.0 million refund of Florida corporate income tax paid in prior periods. The State of Florida reported that, for the second year in a row, corporate income tax collections significantly exceeded projections, triggering an automatic refund of excess funds. Tax benefits related to stock-based compensation totaled $0.4 million in the second quarter of 2022, $0.5 million in the first quarter of 2022, and $0.6 million in the second quarter of 2021.
  • The ratio of net adjusted noninterest expense1 to average tangible assets was 2.00% in the second quarter of 2022, compared to 1.99% in the prior quarter and 1.98% in the second quarter of 2021.
  • The efficiency ratio was 56.22% in the second quarter of 2022, compared to 62.33% in the prior quarter and 54.93% in the prior year quarter. The adjusted efficiency ratio1 was 53.15% in the second quarter of 2022, compared to 54.86% in the prior quarter and 53.49% in the prior year quarter. The Company continues to remain keenly focused on disciplined expense control.

Balance Sheet

  • At June 30, 2022, the Company had total assets of $10.8 billion and total shareholders' equity of $1.3 billion. Book value per share was $21.65 on June 30, 2022, compared to $22.15 on March 31, 2022, and $21.33 on June 30, 2021. Tangible book value per share totaled $16.66 on June 30, 2022 compared to $17.12 on March 31, 2022 and $17.08 on June 30, 2021. A continued decline in the value of the available for sale securities portfolio driven by rising interest rates impacted tangible book value per share by $1.90 when compared to December 31, 2021.
  • Debt securities totaled $2.6 billion on June 30, 2022, an increase of $142.0 million, or 6%, compared to March 31, 2022. Purchases during the second quarter of 2022 totaled $300.8 million, consisting primarily of agency-issued securities at an average duration of 3.3 and average add on yield of 3.31%. The Company continues to take a prudent and disciplined approach to reinvesting excess liquidity.
  • Loans totaled $6.5 billion on June 30, 2022, an increase of $90.3 million, or 1%, compared to March 31, 2022. Loans outstanding, excluding PPP, grew 7% on an annualized basis. The Company continues to exercise a disciplined approach to loan growth, carefully underwriting loans to strict underwriting guidelines.
  • Loan originations were $734.0 million in the second quarter of 2022, an increase of 8% compared to $678.7 million in the first quarter of 2022.
    • Commercial originations were a record $461.9 million during the second quarter of 2022, compared to $373.0 million in the first quarter of 2022, and $193.0 million in the second quarter of 2021.
    • Consumer originations in the second quarter of 2022 increased to $126.5 million from $79.0 million in the first quarter of 2022 and from $63.7 million in the second quarter of 2021. The increase is primarily the result of consumer lending teams that joined in late 2021.
    • Residential loans originated for sale in the secondary market totaled $42.7 million in the second quarter of 2022, compared to $51.2 million in the first quarter of 2022 and $120.1 million in the second quarter of 2021. Limited housing inventory and slowing refinance activity contributed to lower production.
    • Closed residential loans retained in the portfolio totaled $103.0 million in the second quarter of 2022, compared to $175.5 million in the first quarter of 2022, and $118.1 million in the second quarter of 2021. The first quarter of 2022 and the second quarter of 2021 included the purchases of $111.3 million and $38.4 million, respectively, of high-quality wholesale residential home mortgage loan pools from sellers well known to Seacoast.
  • Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $620.0 million on June 30, 2022, a decrease of 22% from March 31, 2022 and an increase of 32% from June 30, 2021.
    • Commercial pipelines were $476.7 million as of June 30, 2022, a decrease of 23% from $619.5 million at March 31, 2022, and an increase of 48% from $322.0 million at June 30, 2021. The Company continues to add experienced commercial bankers across Florida focused on generating disciplined growth in full relationships, including credit facilities, deposit relationships, and wealth opportunities.
    • Consumer pipelines were $75.5 million as of June 30, 2022, an increase of 23% from $61.6 million at March 31, 2022, and an increase of 138% from $31.7 million at June 30, 2021. The increase is primarily the result of consumer lending teams that joined in late 2021.
    • Residential saleable pipelines were $14.7 million as of June 30, 2022, compared to $25.7 million at March 31, 2022, and $60.6 million at June 30, 2021. Retained residential pipelines were $53.1 million as of June 30, 2022, compared to $88.0 million at March 31, 2022, and $54.1 million at June 30, 2021.
  • Total deposits were $9.2 billion as of June 30, 2022, a decrease of $54.8 million, or 1%, compared to March 31, 2022, and an increase of $1.4 billion, or 17%, compared to June 30, 2021.
    • Transaction account balances increased $86 million, or 1%, quarter-over-quarter, and at June 30, 2022, total transaction account balances represent 64% of overall deposit funding. This continued growth in commercial relationships reflects the benefit of adding experienced, well-seasoned commercial bankers across the state of Florida.
    • The overall cost of deposits remained at six basis points.
    • As of June 30, 2022, deposits per banking center were $158.4 million, compared to $163.4 million at March 31, 2022, and $163.3 million at June 30, 2021.

Asset Quality

  • Credit metrics remain strong with charge-offs, nonaccruals, and criticized assets at historically low levels.
  • Nonperforming loans increased by $0.2 million to $26.4 million at June 30, 2022. Nonperforming loans to total loans outstanding were 0.40% at June 30, 2022, 0.41% at March 31, 2022, and 0.61% at June 30, 2021.
  • Due primarily to the sale during the quarter of a residential construction project held in other real estate owned since early 2020, nonperforming assets to total assets declined to 0.27% at June 30, 2022, compared to 0.35% at March 31, 2022, and 0.49% at June 30, 2021.
  • The ratio of allowance for credit losses to total loans was 1.39% at June 30, 2022, 1.39% at March 31, 2022, and 1.49% at June 30, 2021. Excluding PPP loans, the ratio of allowance for credit losses to total loans at June 30, 2022 was 1.39%, compared to 1.40% at March 31, 2022 and 1.60% at June 30, 2021.
  • Net recoveries of $0.1 million for the second quarter of 2022 compared to net charge-offs of $0.1 million in the first quarter of 2022 and $0.7 million in the second quarter of 2021. Net charge-offs for the four most recent quarters averaged 0.04%.
  • Portfolio diversification, in terms of asset mix, industry, and loan type, has been a critical element of the Company's lending strategy. Exposure across industries and collateral types is broadly distributed. Seacoast's average commercial loan size is $558 thousand, reflecting an ability to maintain granularity within the overall loan portfolio.
  • Construction and land development and commercial real estate loans remain well below regulatory guidance at 29% and 192% of total bank-level risk-based capital, respectively, compared to 22% and 189% respectively, at March 31, 2022. On a consolidated basis, construction and land development and commercial real estate loans represent 27% and 176%, respectively, of total consolidated risk-based capital.

Capital and Liquidity

  • The Company continues to operate with a fortress balance sheet, with a tier 1 capital ratio at June 30, 2022, of 16.8% compared to 16.8% at March 31, 2022, and 18.3% at June 30, 2021. The total capital ratio was 17.7% and the tier 1 leverage ratio was 11.6% at June 30, 2022.
  • Cash and cash equivalents at June 30, 2022 totaled $901.4 million, a decrease of $321.1 million, or 26%, from March 31, 2022, resulting from loan growth, investment in the securities portfolio, and deposit outflows, primarily attributed to seasonally higher tax payments by commercial customers.
  • Tangible common equity to tangible assets was 9.74% at June 30, 2022, compared to 9.89% at March 31, 2022, and 10.43% at June 30, 2021. Declines in the value of available for sale securities due to rising interest rates in the first half of 2022 negatively impacted equity year to year by $116.5 million.
  • At June 30, 2022, the Company had available unsecured lines of credit of $165.0 million and lines of credit under lendable collateral value of $2.2 billion. Additionally, $2.1 million of debt securities and $0.7 million of residential and commercial real estate loans are available as collateral for potential borrowings.

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.

FINANCIAL HIGHLIGHTS       
(Amounts in thousands except per share data)(Unaudited)
 Quarterly Trends
          
 2Q'22 1Q'22 4Q'21 3Q'21 2Q'21
Selected Balance Sheet Data:         
Total Assets$10,811,704  $10,904,817  $9,681,433  $9,893,498  $9,316,833 
Gross Loans 6,541,548   6,451,217   5,925,029   5,905,884   5,437,049 
Total Deposits 9,188,953   9,243,768   8,067,589   8,334,172   7,836,436 
          
Performance Measures:         
Net Income$32,755  $20,588  $36,330  $22,944  $31,410 
Net Interest Margin 3.38%  3.25%  3.16%  3.22%  3.23%
Average Diluted Shares Outstanding 61,923   61,704   59,016   57,645   55,901 
Diluted Earnings Per Share (EPS)$0.53  $0.33  $0.62  $0.40  $0.56 
Return on (annualized):         
Average Assets (ROA) 1.21%  0.79%  1.43%  0.93%  1.40%
Average Tangible Assets (ROTA)2 1.29   0.85   1.51   1.00   1.48 
Average Tangible Common Equity (ROTCE)2 13.01   8.02   14.29   9.56   13.88 
Tangible Common Equity to Tangible Assets2 9.74   9.89   11.09   10.62   10.43 
Tangible Book Value Per Share2$16.66  $17.12  $17.84  $17.52  $17.08 
Efficiency Ratio 56.22%  62.33%  53.70%  59.55%  54.93%
          
Adjusted Operating Measures1:         
Adjusted Net Income$36,327  $27,056  $36,854  $29,350  $33,251 
Adjusted Diluted EPS 0.59   0.44   0.62   0.51   0.59 
Adjusted ROTA2 1.38%  1.06%  1.49%  1.23%  1.52%
Adjusted ROTCE2 13.97   10.01   14.11   11.72   14.27 
Adjusted Efficiency Ratio 53.15   54.86   53.43   51.50   53.49 
Net Adjusted Noninterest Expense as a
Percent of Average Tangible Assets2
 2.00   1.99   1.96   1.95   1.98 
          
Other Data:         
Market capitalization3$2,028,996  $2,144,586  $2,070,465  $1,972,784  $1,893,141 
Full-time equivalent employees 1,095   1,066   989   995   946 
Number of ATMs 79   79   75   72   75 
Full-service banking offices 58   58   54   52   48 
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.
2The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets.
3Common shares outstanding multiplied by closing bid price on last day of each period.

Second Quarter 2022 Strategic Highlights

Capitalizing on Seacoast’s Commitment to Digital Transformation

  • Consistent investments in recent years in client-facing technology and high-performing bankers continue to generate solid performance in new customer acquisition and organic balance sheet growth. As we seek to build the most competitive banking franchise in Florida, we are driving continued transformation across our technology capabilities.
  • Early in 2022, we successfully launched a unified customer user experience by upgrading our digital platforms including mobile, consumer internet banking and business internet banking. These digital investments have dramatically improved our customer experience, reflected in a 20% reduction of inbound calls to our telephone support center. We expect to introduce additional digital features in the third and fourth quarters.
  • Use of online and mobile features including Zelle® have surpassed our estimates, with ten times the utilization of payment features compared to our previous platform. Over 15,000 online banking users have opted into our account aggregation service.
  • During the second quarter, we completed the first phase of our enhanced digital account opening solution, which streamlined account opening for customers while positioning the bank to more effectively scale across the state.

Driving Sustainable Growth and Expanding our Footprint

  • Seacoast’s balanced growth strategy includes organic growth and expansion initiatives across the state. Thus far in 2022, Seacoast has expanded the franchise into Naples, Sarasota, and Jacksonville. The combination of a strong Florida economy, the build-out of our commercial franchise across the state, and additions to our consumer and mortgage lending teams drove diversified loan production during the quarter.
  • During the second quarter, the Company continued to strengthen its commercial banking franchise, adding five commercial bankers across the footprint. In addition, Tom Lambert, previously with Truist, joined Seacoast as Market President for the Tampa Bay region. Tom is a well-known leader in the Tampa Bay market, having spent the last several years leading middle market for heritage BB&T.
  • The Company added six new treasury officers across the state during the second quarter, providing additional support and treasury management expertise further, supporting the Company’s middle market buildout.

Scaling and Evolving Our Culture

  • For the third consecutive year, Seacoast has been recognized by the Human Rights Foundation, earning a perfect score for Workplace Equality in the 2022 Corporate Equality index. In addition, the Orlando Business Journal recognized Seacoast as a Best Place to Work for 2022. These honors highlight our commitment to employees’ well-being, as well as our numerous diversity and inclusion initiatives.

OTHER INFORMATION

Conference Call Information
Seacoast will host a conference call on July 29, 2022 at 10:00 a.m. (Eastern Time) to discuss the second quarter 2022 earnings results and business trends. Investors may call in (toll-free) by dialing (866) 374-5140 (passcode: 1306 5710#; host: Charles Shaffer). Charts will be used during the conference call and may be accessed at Seacoast's website at www.SeacoastBanking.com by selecting "Presentations" under the heading "News/Events." A replay of the call will be available for one month, beginning late afternoon on July 29, 2022, and can be accessed via a link at www.SeacoastBanking.com under the heading “Corporate Information,” using the passcode EV00135641.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located under the heading “Corporate Information.” Beginning late afternoon on July 29, 2022, 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 (NASDAQ: SBCF) is one of the largest community banks headquartered in Florida with approximately $10.8 billion in assets and $9.2 billion in deposits as of June 30, 2022. Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at over 50 full-service branches across Florida, and through advanced mobile and online banking solutions. Seacoast National Bank is the wholly-owned subsidiary bank of Seacoast Banking Corporation of Florida. For more information about Seacoast, visit www.SeacoastBanking.com.

Additional Information

Seacoast has filed a registration statement on Form S-4 with the United States Securities and Exchange Commission (the "SEC") in connection with the proposed merger of Apollo Bancshares, Inc. and Apollo Bank with and into Seacoast and Seacoast National Bank, respectively. Seacoast has also filed a registration statement on Form S-4 with the SEC in connection with the proposed merger of Drummond Banking Company and Drummond Community Bank with and into Seacoast and Seacoast National Bank, respectively. The registration statements in connection with the mergers include a proxy statement of Apollo Bancshares, Inc., Apollo Bank and Drummond Banking Company, respectively, and a prospectus of Seacoast. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. WE URGE INVESTORS TO READ THE PROXY STATEMENTS/PROSPECTUSES AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGERS OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENTS/PROSPECTUSES BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Investors may obtain (when available) these documents free of charge at the SEC’s website (www.sec.gov). In addition, documents filed with the SEC by Seacoast will be available free of charge by contacting Investor Relations at (772) 288-6085.

Apollo Bancshares, Inc. and Apollo Bank, their directors, and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed mergers with and into Seacoast and Seacoast National Bank. Information regarding the participants in the proxy solicitation of Apollo Bancshares, Inc. and Apollo Bank and a description of its direct and indirect interests, by security holdings or otherwise, is contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC.

Drummond Banking Company and Drummond Community Bank, their directors, and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed mergers with and into Seacoast and Seacoast National Bank. Information regarding the participants in the proxy solicitation of Drummond Banking Company and a description of its direct and indirect interests, by security holdings or otherwise, is contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC.

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 the Company’s markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that the Company has acquired, or expects to acquire, including Apollo Bancshares, Inc. and Drummond Banking Company, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical facts, any of which may be impacted by the COVID-19 pandemic and any variants thereof and related effects on the U.S. economy. Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s 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 the Company to update any forward-looking statements.

All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through the use of words such as "may", "will", "anticipate", "assume", "should", "support", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "further", "plan", "point to", "project", "could", "intend", "target" 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; the adverse impact of COVID-19 (economic and otherwise) on the Company and its customers, counterparties, employees, and third-party service providers, and the adverse impacts to our business, financial position, results of operations and prospects; government or regulatory responses to the COVID-19 pandemic; governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes, including those that impact the money supply and inflation; changes in accounting policies, rules and practices, including the impact of the adoption of the current expected credit losses (“CECL”) methodology; 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 rate sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; uncertainty related to the impact of LIBOR calculations on securities, loans and debt; changes in borrower credit risks and payment behaviors including as a result of the financial impact of COVID-19; changes in retail distribution strategies, customer preferences and behavior (including as a result of economic factors); changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect Seacoast or the banking industry; the Company’s concentration in commercial real estate loans and in real estate collateral in Florida; inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of Seacoast’s investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including Seacoast’s ability to continue to identify acquisition targets, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies; changes in technology or products that may be more difficult, costly, or less effective than anticipated; the Company’s ability to identify and address increased cybersecurity risks, including as a result of employees working remotely; inability of Seacoast’s risk management framework to manage risks associated with the Company’s business; dependence on key suppliers or vendors to obtain equipment or services for the business on acceptable terms, including the impact of supply chain disruptions; reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy; the effects of war or other conflicts, including the impacts related to or resulting from Russia’s military action in Ukraine, acts of terrorism, natural disasters, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving the Company, including as a result of the Company’s participation in the Paycheck Protection Program (“PPP”); Seacoast’s ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that deferred tax assets could be reduced if estimates of future taxable income from the Company’s operations and tax planning strategies are less than currently estimated and sales of capital stock could trigger a reduction in the amount of net operating loss carryforwards that the Company may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, non-bank financial technology providers, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in the Company’s 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; the failure of assumptions underlying the establishment of reserves for possible credit losses.

The risks relating to the proposed Apollo Bancshares, Inc. and Drummond Banking Company mergers include, without limitation, failure to obtain the approval of shareholders of Apollo Bancshares, Inc., Apollo Bank and Drummond Banking Company in connection with the mergers; the timing to consummate the proposed mergers; the risk that a condition to the closing of the proposed mergers may not be satisfied; the risk that a regulatory approval that may be required for the proposed mergers is not obtained or is obtained subject to conditions that are not anticipated; the parties' ability to achieve the synergies and value creation contemplated by the proposed mergers; the parties' ability to promptly and effectively integrate the businesses of Seacoast, Apollo Bancshares, Inc. and Drummond Banking Company, including unexpected transaction costs, the costs of integrating operations, severance, professional fees and other expenses; the diversion of management time on issues related to the mergers; the failure to consummate or any delay in consummating the mergers for other reasons; changes in laws or regulations; 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 and employees by competitors; and 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 the Company’s annual report on Form 10-K for the year ended December 31, 2021 and quarterly report on Form 10-Q for the quarter ended March 31, 2022 under "Special Cautionary Notice Regarding Forward-Looking Statements" and "Risk Factors", and otherwise in the Company’s 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 www.sec.gov.

 

FINANCIAL HIGHLIGHTS(Unaudited)     
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES    
  
 Quarterly Trends Six Months Ended
              
(Amounts in thousands, except ratios and per share data)2Q'22 1Q'22 4Q'21 3Q'21 2Q'21 2Q'22 2Q'21
              
Summary of Earnings             
Net income$32,755  $20,588  $36,330  $22,944  $31,410  $53,343  $65,129 
Adjusted net income1 36,327   27,056   36,854   29,350   33,251   63,383   68,748 
Net interest income2 81,764   76,639   72,412   71,455   65,933   158,403   132,674 
Net interest margin2,3 3.38%  3.25%  3.16%  3.22%  3.23%  3.32%  3.37%
              
Performance Ratios             
Return on average assets-GAAP basis3 1.21%  0.79%  1.43%  0.93%  1.40%  1.00%  1.50%
Return on average tangible assets-GAAP basis3,4 1.29   0.85   1.51   1.00   1.48   1.07   1.58 
Adjusted return on average tangible assets1,3,4 1.38   1.06   1.49   1.23   1.52   1.23   1.63 
Net adjusted noninterest expense to average tangible assets1,3,4 2.00   1.99   1.96   1.95   1.98   2.00   2.07 
              
Return on average shareholders' equity-GAAP basis3 9.73   5.96   11.06   7.29   10.76   7.82   11.39 
Return on average tangible common equity-GAAP basis3,4 13.01   8.02   14.29   9.56   13.88   10.46   14.73 
Adjusted return on average tangible common equity1,3,4 13.97   10.01   14.11   11.72   14.27   11.95   15.12 
Efficiency ratio5 56.22   62.33   53.70   59.55   54.93   59.17   54.05 
Adjusted efficiency ratio1 53.15   54.86   53.43   51.50   53.49   53.97   52.72 
Noninterest income to total revenue (excluding securities gains/losses) 17.45   17.14   20.89   21.09   18.94   17.30   20.03 
Tangible common equity to tangible assets4 9.74   9.89   11.09   10.62   10.43   9.74   10.43 
Average loan-to-deposit ratio 70.60   71.25   70.29   69.97   74.13   70.92   77.62 
End of period loan-to-deposit ratio 71.34   70.01   73.84   71.46   69.93   71.34   69.93 
              
Per Share Data             
Net income diluted-GAAP basis$0.53  $0.33  $0.62  $0.40  $0.56  $0.86  $1.17 
Net income basic-GAAP basis 0.53   0.34   0.62   0.40   0.57   0.87   1.18 
Adjusted earnings1 0.59   0.44   0.62   0.51   0.59   1.03   1.23 
              
Book value per share common 21.65   22.15   22.40   22.12   21.33   21.65   21.33 
Tangible book value per share 16.66   17.12   17.84   17.52   17.08   16.66   17.08 
Cash dividends declared 0.17   0.13   0.13   0.13   0.13   0.30   0.13 
              
              
1Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.  
2Calculated on a fully taxable equivalent basis using amortized cost.  
3These ratios are stated on an annualized basis and are not necessarily indicative of future periods.  
4The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets.  
5Defined 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 and losses).


CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited)     
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES    
  
 Quarterly Trends Six Months Ended
              
(Amounts in thousands, except per share data)2Q'22 1Q'22 4Q'21 3Q'21 2Q'21 2Q'22 2Q'21
              
Interest on securities:             
Taxable$12,387  $10,041  $8,574  $7,775  $6,559  $22,428  $12,857 
Nontaxable 138   140   139   143   147   278   295 
Fees on PPP loans 676   1,373   3,011   5,218   3,877   2,049   9,267 
Interest on PPP loans 65   150   341   699   1,251   215   2,747 
Interest and fees on loans - excluding PPP loans 68,566   65,595   61,049   58,507   55,220   134,161   110,632 
Interest on federal funds sold and other investments 1,917   933   828   867   709   2,850   1,295 
Total Interest Income 83,749   78,232   73,942   73,209   67,763   161,981   137,093 
              
Interest on deposits 994   767   711   849   980   1,761   2,045 
Interest on time certificates 436   468   494   583   524   904   1,711 
Interest on borrowed money 672   475   448   453   457   1,147   925 
Total Interest Expense 2,102   1,710   1,653   1,885   1,961   3,812   4,681 
              
Net Interest Income 81,647   76,522   72,289   71,324   65,802   158,169   132,412 
Provision for credit losses 822   6,556   (3,942)  5,091   (4,855)  7,378   (10,570)
Net Interest Income After Provision for Credit Losses 80,825   69,966   76,231   66,233   70,657   150,791   142,982 
              
Noninterest income:             
Service charges on deposit accounts 3,408   2,801   2,606   2,495   2,338   6,209   4,676 
Interchange income 4,255   4,128   4,135   4,131   4,145   8,383   7,965 
Wealth management income 2,774   2,659   2,356   2,562   2,387   5,433   4,710 
Mortgage banking fees 932   1,686   2,030   2,550   2,977   2,618   7,202 
Marine finance fees 312   191   147   152   177   503   366 
SBA gains 473   156   200   812   232   629   519 
BOLI income 1,349   1,334   1,295   1,128   872   2,683   1,731 
Other 3,761   2,870   6,316   5,228   2,249   6,631   5,993 
  17,264   15,825   19,085   19,058   15,377   33,089   33,162 
Securities losses, net (300)  (452)  (379)  (30)  (55)  (752)  (169)
Total Noninterest Income 16,964   15,373   18,706   19,028   15,322   32,337   32,993 
              
Noninterest expenses:             
Salaries and wages 28,056   28,219   25,005   27,919   22,966   56,275   44,359 
Employee benefits 4,151   5,501   4,763   4,177   3,953   9,652   8,933 
Outsourced data processing costs 6,043   6,156   5,165   5,610   4,676   12,199   9,144 
Telephone / data lines 908   733   790   810   838   1,641   1,623 
Occupancy 4,050   3,986   3,500   3,541   3,310   8,036   7,099 
Furniture and equipment 1,588   1,426   1,403   1,567   1,166   3,014   2,420 
Marketing 1,882   1,171   1,060   1,353   1,002   3,053   2,170 
Legal and professional fees 2,946   4,789   2,461   4,151   2,182   7,735   4,764 
FDIC assessments 699   789   713   651   515   1,488   1,041 
Amortization of intangibles 1,446   1,446   1,304   1,306   1,212   2,892   2,423 
Foreclosed property expense and net (gain) loss on sale (968)  (164)  (175)  66   (90)  (1,132)  (155)
Provision for credit losses on unfunded commitments    142      133      142    
Other 5,347   4,723   4,274   3,984   4,054   10,070   8,083 
Total Noninterest Expense 56,148   58,917   50,263   55,268   45,784   115,065   91,904 
              
Income Before Income Taxes 41,641   26,422   44,674   29,993   40,195   68,063   84,071 
Income taxes 8,886   5,834   8,344   7,049   8,785   14,720   18,942 
              
Net Income$32,755  $20,588  $36,330  $22,944  $31,410  $53,343  $65,129 
              
Per share of common stock:             
              
Net income diluted$0.53  $0.33  $0.62  $0.40  $0.56  $0.86  $1.17 
Net income basic 0.53   0.34   0.62   0.40   0.57   0.87   1.18 
Cash dividends declared 0.17   0.13   0.13   0.13   0.13   0.30   0.13 
              
Average diluted shares outstanding 61,923   61,704   59,016   57,645   55,901   61,818   55,827 
Average basic shares outstanding 61,409   61,127   58,462   57,148   55,421   61,269   55,347 
              


CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) 
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
  
 June 30, March 31, December 31, September 30, June 30,
(Amounts in thousands) 2022   2022   2021   2021   2021 
          
Assets         
Cash and due from banks$363,343  $351,128  $238,750  $199,460  $97,468 
Interest bearing deposits with other banks 538,025   871,387   498,979   1,028,235   1,351,377 
Total Cash and Cash Equivalents 901,368   1,222,515   737,729   1,227,695   1,448,845 
          
Time deposits with other banks 4,730   5,975      750   750 
          
Debt Securities:         
Available for sale (at fair value) 1,800,791   1,706,619   1,644,319   1,546,155   1,322,776 
Held to maturity (at amortized cost) 794,785   747,004   638,640   526,502   493,467 
Total Debt Securities 2,595,576   2,453,623   2,282,959   2,072,657   1,816,243 
          
Loans held for sale 14,205   20,615   31,791   49,597   42,793 
          
Loans 6,541,548   6,451,217   5,925,029   5,905,884   5,437,049 
Less: Allowance for credit losses (90,769)  (89,838)  (83,315)  (87,823)  (81,127)
Net Loans 6,450,779   6,361,379   5,841,714   5,818,061   5,355,922 
          
Bank premises and equipment, net 74,784   74,617   72,404   71,250   69,392 
Other real estate owned 2,419   11,567   13,618   13,628   12,804 
Goodwill 286,606   286,606   252,154   252,154   221,176 
Other intangible assets, net 20,062   21,549   14,845   16,153   14,106 
Bank owned life insurance 207,724   206,375   205,041   193,747   158,506 
Net deferred tax assets 60,080   47,222   27,321   24,187   21,839 
Other assets 193,371   192,774   201,857   153,619   154,457 
Total Assets$10,811,704  $10,904,817  $9,681,433  $9,893,498  $9,316,833 
          
Liabilities and Shareholders' Equity         
Liabilities         
Deposits         
Noninterest demand$3,593,201  $3,522,700  $3,075,534  $3,086,466  $2,952,160 
Interest-bearing demand 2,269,148   2,253,562   1,890,212   1,845,165   1,763,884 
Savings 946,738   937,839   895,019   834,309   811,516 
Money market 1,911,847   1,999,027   1,651,881   1,951,639   1,807,190 
Other time certificates 350,571   397,491   404,601   437,973   335,370 
Brokered time certificates          20,000   20,000 
Time certificates of more than $250,000 117,448   133,149   150,342   158,620   146,316 
Total Deposits 9,188,953   9,243,768   8,067,589   8,334,172   7,836,436 
          
Securities sold under agreements to repurchase 110,578   120,922   121,565   105,548   119,973 
Subordinated debt 71,786   71,716   71,646   71,576   71,506 
Other liabilities 110,812   112,126   109,897   91,682   106,571 
Total Liabilities 9,482,129   9,548,532   8,370,697   8,602,978   8,134,486 
          
Shareholders' Equity         
Common stock 6,141   6,124   5,850   5,835   5,544 
Additional paid in capital 1,065,167   1,062,462   963,851   959,644   862,598 
Retained earnings 393,431   371,192   358,598   329,918   314,584 
Treasury stock (11,632)  (10,459)  (10,569)  (10,146)  (10,180)
  1,453,107   1,429,319   1,317,730   1,285,251   1,172,546 
Accumulated other comprehensive (loss) income, net (123,532)  (73,034)  (6,994)  5,269   9,801 
Total Shareholders' Equity 1,329,575   1,356,285   1,310,736   1,290,520   1,182,347 
Total Liabilities & Shareholders' Equity $10,811,704  $10,904,817  $9,681,433  $9,893,498  $9,316,833 
          
Common shares outstanding 61,410   61,239   58,504   58,349   55,436 
          


CONSOLIDATED QUARTERLY FINANCIAL DATA(Unaudited) 
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
  
  
          
(Amounts in thousands)2Q'22 1Q'22 4Q'21 3Q'21 2Q'21
          
Credit Analysis         
Net (recoveries) charge-offs - non-acquired loans$(75) $72  $541  $198  $214 
Net (recoveries) charge-offs - acquired loans (49)  7   29   1,234   441 
Total Net (Recoveries) Charge-offs  (124)  79   570   1,432   655 
          
Net (recoveries) charge-offs to average loans - non-acquired loans %  %  0.04%  0.01%  0.02%
Net (recoveries) charge-offs to average loans - acquired loans          0.09   0.03 
Total Net (Recoveries) Charge-offs to Average Loans       0.04   0.10   0.05 
          
Allowance for credit losses - non-acquired loans$70,215  $67,261  $64,710  $64,740  $64,525 
Allowance for credit losses - acquired loans 20,554   22,577   18,605   23,083   16,602 
Total Allowance for Credit Losses$90,769  $89,838  $83,315  $87,823  $81,127 
          
Non-acquired loans at end of period$5,389,405  $5,169,973  $4,860,171  $4,608,801  $4,290,622 
Acquired loans at end of period 1,134,940   1,241,988   973,751   1,106,481   782,315 
Paycheck Protection Program loans at end of period 17,203   39,256   91,107   190,602   364,112 
Total Loans$6,541,548  $6,451,217  $5,925,029  $5,905,884  $5,437,049 
          
Non-acquired loans allowance for credit losses to non-acquired loans at end of period 1.30%  1.30%  1.33%  1.40%  1.50%
Total allowance for credit losses to total loans at end of period 1.39   1.39   1.41   1.49   1.49 
Total allowance for credit losses to total loans, excluding PPP loans 1.39   1.40   1.43   1.54   1.60 
Purchase discount on acquired loans at end of period 1.84   1.89   2.27   2.27   2.98 
          
End of Period         
Nonperforming loans$26,442  $26,209  $30,598  $32,612  $32,920 
Other real estate owned 109   9,256   12,223   11,843   11,019 
Properties previously used in bank operations included in other real estate owned 2,310   2,310   1,395   1,785   1,785 
Total Nonperforming Assets$28,861  $37,775  $44,216  $46,240  $45,724 
          
Accruing troubled debt restructures (TDRs)$4,022  $4,454  $3,917  $4,047  $4,037 
          
Nonperforming Loans to Loans at End of Period 0.40%  0.41%  0.52%  0.55%  0.61%
Nonperforming Assets to Total Assets at End of Period 0.27   0.35   0.46   0.47   0.49 
          
 June 30, March 31, December 31, September 30, June 30,
Loans 2022   2022   2021   2021   2021 
          
Construction and land development$350,025  $259,421  $230,824  $227,459  $234,347 
Commercial real estate - owner occupied 1,254,343   1,284,515   1,197,774   1,201,336   1,127,640 
Commercial real estate - non-owner occupied 1,972,540   1,966,150   1,736,439   1,673,587   1,412,439 
Residential real estate 1,647,465   1,599,645   1,425,354   1,467,329   1,226,536 
Commercial and financial 1,124,771   1,132,506   1,069,356   982,552   900,206 
Consumer 175,201   169,724   174,175   163,019   171,769 
Paycheck Protection Program 17,203   39,256   91,107   190,602   364,112 
Total Loans$6,541,548  $6,451,217  $5,925,029  $5,905,884  $5,437,049 
          


AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1
 (Unaudited)
  
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
                  
                  
 2Q'22 1Q'22 2Q'21
 Average   Yield/ Average   Yield/ Average   Yield/
(Amounts in thousands)Balance Interest Rate Balance Interest Rate Balance Interest Rate
                  
Assets                 
Earning assets:                 
Securities:                 
Taxable$2,517,879  $12,387 1.97% $2,406,399  $10,041 1.67% $1,629,410  $6,559 1.61%
Nontaxable 22,443   175 3.12   24,042   177 2.94   25,581   186 2.90 
Total Securities 2,540,322   12,562 1.98   2,430,441   10,218 1.68   1,654,991   6,745 1.63 
                  
Federal funds sold 644,144   1,281 0.80   738,588   350 0.19   816,455   226 0.11 
Other investments 46,257   636 5.51   44,999   583 5.25   108,868   483 1.78 
                  
Loans excluding PPP loans 6,454,444   68,647 4.27   6,276,964   65,675 4.24   5,092,897   55,313 4.36 
PPP loans 26,322   741 11.29   61,923   1,523 9.98   505,339   5,127 4.07 
Total Loans 6,480,766   69,388 4.29   6,338,887   67,198 4.30   5,598,236   60,440 4.33 
                  
Total Earning Assets 9,711,489   83,867 3.46   9,552,915   78,349 3.33   8,178,550   67,894 3.33 
                  
Allowance for credit losses (90,242)      (87,467)      (86,042)    
Cash and due from banks 389,695       365,835       327,171     
Premises and equipment 74,614       75,876       70,033     
Intangible assets 307,411       304,321       235,964     
Bank owned life insurance 206,839       205,500       133,484     
Other assets 240,712       211,536       166,686     
                  
Total Assets$10,840,518      $10,628,516      $9,025,846     
                  
Liabilities and Shareholders' Equity                 
Interest-bearing liabilities:                 
Interest-bearing demand$2,262,408  $293 0.05% $2,097,383  $190 0.04% $1,692,178  $235 0.06%
Savings 962,264   64 0.03   925,348   65 0.03   790,734   118 0.06 
Money market 1,938,421   637 0.13   1,976,660   512 0.11   1,736,481   627 0.14 
Time deposits 496,186   436 0.35   560,681   468 0.34   533,350   524 0.39 
Securities sold under agreements to repurchase 120,437   94 0.31   118,146   39 0.13   115,512   35 0.12 
Other borrowings 71,740   579 3.24   71,670   436 2.47   71,460   422 2.37 
                  
Total Interest-Bearing Liabilities 5,851,456   2,103 0.14   5,749,888   1,710 0.12   4,939,715   1,961 0.16 
                  
Noninterest demand 3,520,700       3,336,121       2,799,643     
Other liabilities 117,793       141,972       116,093     
Total Liabilities 9,489,949       9,227,981       7,855,451     
                  
Shareholders' equity 1,350,568       1,400,535       1,170,395     
                  
Total Liabilities & Equity$10,840,518      $10,628,516      $9,025,846     
                  
Cost of deposits    0.06%     0.06%     0.08%
Interest expense as a % of earning assets    0.09%     0.07%     0.10%
Net interest income as a % of earning assets  $81,764 3.38%   $76,639 3.25%   $65,933 3.23%
                  
                  
1On a fully taxable equivalent basis. All yields and rates have been computed 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        
  
 Six Months Ended June 30, 2022 Six Months Ended June 30, 2021
 Average   Yield/ Average   Yield/
(Amounts in thousands, except ratios)Balance Interest Rate Balance Interest Rate
            
Assets           
Earning assets:           
Securities:           
Taxable$2,462,447  $22,428 1.82% $1,590,152  $12,857 1.62%
Nontaxable 23,238   352 3.03   25,756   373 2.90 
Total Securities 2,485,685   22,780 1.83   1,615,908   13,230 1.64 
            
Federal funds sold 691,105   1,631 0.48   556,425   299 0.11 
Other investments 45,631   1,219 5.39   96,422   996 2.08 
            
Loans excluding PPP loans 6,366,194   134,322 4.25   5,121,114   110,817 4.36 
PPP loans 44,024   2,264 10.37   557,247   12,013 4.35 
Total Loans 6,410,218   136,586 4.30   5,678,361   122,830 4.36 
            
Total Earning Assets 9,632,639   162,216 3.40   7,947,116   137,355 3.49 
            
Allowance for credit losses (88,862)      (88,873)    
Cash and due from banks 377,831       291,626     
Premises and equipment 75,241       72,141     
Intangible assets 305,875       236,640     
Bank owned life insurance 206,173       132,785     
Other assets 226,205       165,658     
            
Total Assets$10,735,102      $8,757,093     
            
Liabilities and Shareholders' Equity           
Interest-bearing liabilities:           
Interest-bearing demand$2,180,351  $483 0.04% $1,646,587  $493 0.06%
Savings 943,908   129 0.03   756,693   255 0.07 
Money market 1,957,435   1,149 0.12   1,673,559   1,297 0.16 
Time deposits 528,255   904 0.35   621,844   1,711 0.55 
Securities sold under agreements to repurchase 119,298   133 0.22   114,181   76 0.13 
Other borrowings 71,706   1,015 2.85   71,425   849 2.40 
            
Total Interest-Bearing Liabilities 5,800,953   3,813 0.13   4,884,289   4,681 0.19 
            
Noninterest demand 3,428,921       2,616,856     
Other liabilities 129,812       102,450     
Total Liabilities 9,359,686       7,603,595     
            
Shareholders' equity 1,375,413       1,153,499     
            
Total Liabilities & Equity$10,735,102      $8,757,093     
            
Cost of deposits    0.06%     0.10%
Interest expense as a % of earning assets    0.08%     0.12%
Net interest income as a % of earning assets  $158,403 3.32%   $132,674 3.37%
            
            
1On a fully taxable equivalent basis. All yields and rates have been computed 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,
(Amounts in thousands) 2022  2022  2021  2021  2021
          
Customer Relationship Funding         
Noninterest demand         
Commercial$2,945,445 $2,939,595 $2,477,111 $2,535,922 $2,431,928
Retail 464,214  458,809  458,626  416,779  401,988
Public funds 143,075  86,419  107,523  84,337  88,057
Other 40,467  37,877  32,274  49,428  30,187
Total Noninterest Demand 3,593,201  3,522,700  3,075,534  3,086,466  2,952,160
          
Interest-bearing demand         
Commercial 769,948  610,109  497,466  554,366  545,797
Retail 1,207,698  1,392,490  1,144,635  1,069,668  958,619
Public funds 291,502  250,963  248,111  221,131  259,468
Total Interest-Bearing Demand 2,269,148  2,253,562  1,890,212  1,845,165  1,763,884
          
Total transaction accounts         
Commercial 3,715,393  3,549,704  2,974,577  3,090,288  2,977,725
Retail 1,671,912  1,851,299  1,603,261  1,486,447  1,360,607
Public funds 434,577  337,382  355,634  305,468  347,525
Other 40,467  37,877  32,274  49,428  30,187
Total Transaction Accounts 5,862,349  5,776,262  4,965,746  4,931,631  4,716,044
          
Savings 946,738  937,839  895,019  834,309  811,516
          
Money market         
Commercial 819,452  856,117  732,639  827,901  787,894
Retail 914,918  931,702  840,054  834,628  737,554
Brokered 106,823  126,168  8,007  196,548  187,023
Public funds 70,654  85,040  71,181  92,562  94,719
Total Money Market 1,911,847  1,999,027  1,651,881  1,951,639  1,807,190
          
Brokered time certificates       20,000  20,000
Other time certificates 468,019  530,640  554,943  596,593  481,686
  468,019  530,640  554,943  616,593  501,686
Total Deposits$9,188,953 $9,243,768 $8,067,589 $8,334,172 $7,836,436
          
Customer sweep accounts$110,578 $120,922 $121,565 $105,548 $119,973
          


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 define or 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.

GAAP TO NON-GAAP RECONCILIATION(Unaudited) 
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
              
 Quarterly Trends Six Months Ended
              
(Amounts in thousands, except per share data)2Q'22 1Q'22 4Q'21 3Q'21 2Q'21 2Q'22 2Q'21
              
Net Income$32,755  $20,588  $36,330  $22,944  $31,410  $53,343  $65,129 
              
Total noninterest income 16,964   15,373   18,706   19,028   15,322   32,337   32,993 
Securities losses (gains), net 300   452   379   30   55   752   169 
Gain on sale of domain name (included in other income)       (755)            
Total Adjustments to Noninterest Income 300   452   (376)  30   55   752   169 
Total Adjusted Noninterest Income 17,264   15,825   18,330   19,058   15,377   33,089   33,162 
              
Total noninterest expense 56,148   58,917   50,263   55,268   45,784   115,065   91,904 
Merger related charges (3,039)  (6,692)  (482)  (6,281)  (509)  (9,731)  (1,090)
Amortization of intangibles (1,446)  (1,446)  (1,304)  (1,306)  (1,212)  (2,892)  (2,423)
Branch reductions and other expense initiatives    (74)  (168)  (870)  (663)  (74)  (1,112)
Total Adjustments to Noninterest Expense (4,485)  (8,212)  (1,954)  (8,457)  (2,384)  (12,697)  (4,625)
Total Adjusted Noninterest Expense 51,663   50,705   48,309   46,811   43,400   102,368   87,279 
              
Income Taxes 8,886   5,834   8,344   7,049   8,785   14,720   18,942 
Tax effect of adjustments 1,213   2,196   280   2,081   598   3,409   1,175 
Effect of change in corporate tax rate on deferred tax assets       774             
Total Adjustments to Income Taxes 1,213   2,196   1,054   2,081   598   3,409   1,175 
Adjusted Income Taxes 10,099   8,030   9,398   9,130   9,383   18,129   20,117 
Adjusted Net Income$36,327  $27,056  $36,854  $29,350  $33,251  $63,383  $68,748 
              
Earnings per diluted share, as reported$0.53  $0.33  $0.62  $0.40  $0.56  $0.86  $1.17 
Adjusted Earnings per Diluted Share  0.59   0.44   0.62   0.51   0.59   1.03   1.23 
Average diluted shares outstanding 61,923   61,704   59,016   57,645   55,901   61,818   55,827 
              
Adjusted Noninterest Expense$51,663  $50,705  $48,309  $46,811  $43,400  $102,368  $87,279 
Provision for credit losses on unfunded commitments    (142)     (133)     (142)   
Foreclosed property expense and net gain / (loss) on sale 968   164   175   (66)  90   1,132   155 
Net Adjusted Noninterest Expense$52,631  $50,727  $48,484  $46,612  $43,490  $103,358  $87,434 
              
Revenue$98,611  $91,895  $90,995  $90,352  $81,124  $190,506  $165,405 
Total Adjustments to Revenue 300   452   (376)  30   55   752   169 
Impact of FTE adjustment 117   117   123   131   131   234   262 
Adjusted Revenue on a fully taxable equivalent basis$99,028  $92,464  $90,742  $90,513  $81,310  $191,492  $165,836 
Adjusted Efficiency Ratio 53.15%  54.86%  53.43%  51.50%  53.49%  53.97%  52.72%
              
Net Interest Income$81,647  $76,522  $72,289  $71,324  $65,802  $158,169  $132,412 
Impact of FTE adjustment 117   117   123   131   131   234   262 
Net Interest Income including FTE adjustment$81,764  $76,639  $72,412  $71,455  $65,933  $158,403  $132,674 
Total noninterest income 16,964   15,373   18,706   19,028   15,322   32,337   32,993 
Total noninterest expense 56,148   58,917   50,263   55,268   45,784   115,065   91,904 
Pre-Tax Pre-Provision Earnings$42,580  $33,095  $40,855  $35,215  $35,471  $75,675  $73,763 
Total Adjustments to Noninterest Income 300   452   (376)  30   55   752   169 
Total Adjustments to Noninterest Expense (3,517)  (8,190)  (1,779)  (8,656)  (2,294)  (11,707)  (4,470)
Adjusted Pre-Tax Pre-Provision Earnings$46,397  $41,737  $42,258  $43,901  $37,820  $88,134  $78,402 
              
Average Assets$10,840,518  $10,628,516  $10,061,382  $9,753,734  $9,025,846  $10,735,102  $8,757,093 
Less average goodwill and intangible assets (307,411)  (304,321)  (267,692)  (254,980)  (235,964)  (305,875)  (236,640)
Average Tangible Assets$10,533,107  $10,324,195  $9,793,690  $9,498,754  $8,789,882  $10,429,227  $8,520,453 
              
Return on Average Assets (ROA) 1.21%  0.79%  1.43%  0.93%  1.40%  1.00%  1.50%
Impact of removing average intangible assets and related amortization 0.08   0.06   0.08   0.07   0.08   0.07   0.08 
Return on Average Tangible Assets (ROTA) 1.29   0.85   1.51   1.00   1.48   1.07   1.58 
Impact of other adjustments for Adjusted Net Income 0.09   0.21   (0.02)  0.23   0.04   0.16   0.05 
Adjusted Return on Average Tangible Assets 1.38   1.06   1.49   1.23   1.52   1.23   1.63 
              
Average Shareholders' Equity$1,350,568  $1,400,535  $1,303,686  $1,248,547  $1,170,395  $1,375,413  $1,153,499 
Less average goodwill and intangible assets (307,411)  (304,321)  (267,692)  (254,980)  (235,964)  (305,875)  (236,640)
Average Tangible Equity$1,043,157  $1,096,214  $1,035,994  $993,567  $934,431  $1,069,538  $916,859 
              
Return on Average Shareholders' Equity 9.73%  5.96%  11.06%  7.29%  10.76%  7.82%  11.39%
Impact of removing average intangible assets and related amortization 3.28   2.06   3.23   2.27   3.12   2.64   3.34 
Return on Average Tangible Common Equity (ROTCE) 13.01   8.02   14.29   9.56   13.88   10.46   14.73 
Impact of other adjustments for Adjusted Net Income 0.96   1.99   (0.18)  2.16   0.39   1.49   0.39 
Adjusted Return on Average Tangible Common Equity  13.97   10.01   14.11   11.72   14.27   11.95   15.12 
              
Loan interest income1$69,388  $67,198  $64,487  $64,517  $60,440  $136,586  $122,830 
Accretion on acquired loans (2,720)  (3,717)  (3,520)  (3,483)  (2,886)  (6,437)  (5,754)
Interest and fees on PPP loans (741)  (1,523)  (3,352)  (5,917)  (5,127)  (2,264)  (12,013)
Loan interest income excluding PPP and accretion on acquired loans$65,927  $61,958  $57,615  $55,117  $52,427  $127,885  $105,063 
              
Yield on loans1 4.29   4.30   4.31   4.49   4.33   4.30   4.36 
Impact of accretion on acquired loans (0.16)  (0.24)  (0.24)  (0.24)  (0.21)  (0.21)  (0.20)
Impact of PPP loans (0.03)  (0.06)  (0.13)  (0.22)  0.01   (0.04)  (0.02)
Yield on loans excluding PPP and accretion on acquired loans 4.10%  4.00%  3.94%  4.03%  4.13%  4.05%  4.14%
              
Net Interest Income1$81,764  $76,639  $72,412  $71,455  $65,933  $158,403  $132,674 
Accretion on acquired loans (2,720)  (3,717)  (3,520)  (3,483)  (2,886)  (6,437)  (5,754)
Interest and fees on PPP loans (741)  (1,523)  (3,352)  (5,917)  (5,127)  (2,264)  (12,013)
Net interest income excluding PPP and accretion on acquired loans$78,303  $71,399  $65,540  $62,055  $57,920  $149,702  $114,907 
              
Net Interest Margin 3.38   3.25   3.16   3.22   3.23   3.32   3.37 
Impact of accretion on acquired loans (0.12)  (0.15)  (0.15)  (0.15)  (0.14)  (0.14)  (0.15)
Impact of PPP loans (0.02)  (0.05)  (0.10)  (0.18)  (0.06)  (0.03)  (0.08)
Net interest margin excluding PPP and accretion on acquired loans 3.24%  3.05%  2.91%  2.89%  3.03%  3.15%  3.14%
              
Security interest income1$12,562  $10,218  $8,750  $7,956  $6,745  $22,780  $13,230 
Tax equivalent adjustment on securities (36)  (37)  (37)  (38)  (39)  (73)  (78)
Security interest income excluding tax equivalent adjustment$12,526  $10,181  $8,713  $7,918  $6,706  $22,707  $13,152 
              
Loan interest income1$69,388  $67,198  $64,487  $64,517  $60,440  $136,586  $122,830 
Tax equivalent adjustment on loans (81)  (80)  (86)  (93)  (92)  (161)  (184)
Loan interest income excluding tax equivalent adjustment$69,307  $67,118  $64,401  $64,424  $60,348  $136,425  $122,646 
              
Net Interest Income1$81,764  $76,639  $72,412  $71,455  $65,933  $158,403  $132,674 
Tax equivalent adjustment on securities (36)  (37)  (37)  (38)  (39)  (73)  (78)
Tax equivalent adjustment on loans (81)  (80)  (86)  (93)  (92)  (161)  (184)
Net interest income excluding tax equivalent adjustment$81,647  $76,522  $72,289  $71,324  $65,802  $158,169  $132,412 
              
1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost.