Seacoast Reports Fourth Quarter and Full Year 2022 Results

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Fourth Quarter 2022 Net Interest Margin Expands to 4.36%, Up 69 Basis Points from Prior Quarter

Completes Acquisitions of Apollo Bancshares, Inc. and Drummond Banking Company

Well-Positioned Balance Sheet with Strong Capital Position

STUART, Fla., Jan. 26, 2023 (GLOBE NEWSWIRE) — Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) (NASDAQ: SBCF) today reported net income in the fourth quarter of 2022 of $23.9 million, or $0.34 per diluted share, including $16.1 million in merger-related costs and $15.0 million in provision for credit losses associated with bank acquisitions during the quarter. Fourth quarter 2022 net income decreased 18% compared to the third quarter of 2022 and decreased 34% compared to the fourth quarter of 2021, each the result of bank merger activity in the fourth quarter 2022. For the full year 2022, net income was $106.5 million, or $1.66 per diluted share, a decrease of 14% compared to the full year 2021.

Adjusted net income1 for the fourth quarter of 2022 was $39.9 million, or $0.56 per diluted share, which included $15.0 million in the provision for credit losses associated with acquisition activity during the quarter. Fourth quarter 2022 adjusted net income1 increased 22% compared to the third quarter 2022 and increased 8% compared to the fourth quarter 2021. Adjusted net income1 for the full year 2022 was $136.1 million, or $2.12 per diluted share, an increase of 1% compared to the full year 2021.

Pre-tax pre-provision earnings1 were $46.0 million in the fourth quarter 2022, an increase of 7% compared to the third quarter of 2022 and 13% compared to the fourth quarter 2021. For the year ended December 31, 2022, pre-tax pre-provision earnings1 were $164.8 million, an increase of 10% compared to the full year 2021. Adjusted pre-tax pre-provision earnings1 were $66.6 million in the fourth quarter 2022, an increase of 36% compared to the third quarter 2022 and 58% compared to the fourth quarter 2021. Adjusted pre-tax pre-provision earnings1 for the full year 2022 were $203.8 million, an increase of $39.2 million or 24% when compared to the full year 2021.

For the fourth quarter of 2022, return on average tangible assets was 0.94%, return on average tangible shareholders’ equity was 10.36%, and the efficiency ratio was 63.39%, compared to 1.17%, 11.53%, and 57.13%, respectively, in the prior quarter, and 1.51%, 14.29%, and 53.70%, respectively, in the prior year quarter. For the full year 2022, return on average tangible assets was 1.06%, return on average tangible shareholders’ equity was 10.70%, and the efficiency ratio was 60.01%, compared to 1.41%, 13.27%, and 55.39%, respectively, in the full year 2021. Adjusted return on average tangible assets1 in the fourth quarter of 2022 was 1.36%, adjusted return on average tangible shareholders’ equity1 was 15.05%, and the adjusted efficiency ratio1 was 51.52%, compared to 1.27%, 12.48%, and 53.28%, respectively, in the prior quarter, and 1.49%, 14.11%, and 53.43%, respectively, in the prior year quarter. Adjusted return on average tangible assets1 for the full year 2022 was 1.27%, adjusted return on average tangible shareholders’ equity1 was 10.70%, and the adjusted efficiency ratio1 was 53.03%, compared to 1.48%, 13.27%, and 52.59%, respectively, for the full year 2021.

Charles M. Shaffer, Seacoast’s Chairman and CEO said, “The fourth quarter of 2022 was another outstanding quarter, during which we delivered an adjusted pre-tax pre-provision return on tangible assets1 of 2.28%, expanded our net interest margin by 69 basis points and drove our adjusted efficiency ratio1 to 51.52%.

For the year as a whole, 2022 was one of achievement. Seacoast’s team drove significant market expansion across the state, extending our franchise to Sarasota, Ocala, Gainesville, Jacksonville, Naples, and Miami through acquisitions and new market launches. Additionally, we significantly improved the digital product set for our customers, adding new features and functionality; transformed our commercial banking franchise, adding talent throughout Florida; and achieved another record-breaking year in wealth management. Finally, we made significant investments in talent and technology to scale our operational areas to those of a mid-size bank.”

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 $368 million in loans and $562 million in deposits. Integration activities, including system conversion, were completed in the first quarter of 2022 for BBFC and in the second quarter of 2022 for Sabal Palm.

On October 7, 2022, the Company completed the acquisition of Apollo Bancshares, Inc. (“Apollo”), adding approximately $665 million in loans and $855 million in deposits, and taking Seacoast into Miami-Dade County, one of the fastest growing and most dynamic markets in the United States. System conversion activities were completed immediately after the closing of the transaction.

Also on October 7, 2022, the Company completed the acquisition of Drummond Banking Company (“Drummond”), providing Seacoast with an entry point into Gainesville, Ocala, and surrounding markets and adding low-cost core deposits and diversified business lines. At closing, Drummond had approximately $545 million in loans and $883 in deposits, providing a strong core deposit base and also highlighting the benefits of stable depository relationships we expect to be able to support higher margins in a rising rate environment. Full integration and system conversion activities are expected to be completed in the first quarter of 2023.

On August 8, 2022, the Company announced its proposed acquisition of Professional Holding Corp. (“Professional”) (NASDAQ: PFHD), the sixth largest bank headquartered in South Florida. The transaction, which is expected to close in the first quarter of 2023, will increase Seacoast’s market share in Miami-Dade, Broward, and Palm Beach counties. Full integration and system conversion activities are expected to be completed late in the second quarter of 2023.

Financial Results

Income Statement

  • Net income was $23.9 million, or $0.34 per diluted share, for the fourth quarter of 2022 compared to net income of $29.2 million, or $0.47 per diluted share, for the prior quarter, and $36.3 million, or $0.62 per diluted share, for the prior year quarter. For the year ended December 31, 2022, net income was $106.5 million, or $1.66 per diluted share, compared to $124.4 million, or $2.18 per diluted share, for the year ended December 31, 2021. The current full-year results included $26.2 million in provision for credit losses, including $15.0 million in the fourth quarter of 2022 recorded for loans acquired in the Drummond and Apollo acquisitions, and $5.1 million in the first quarter of 2022 recorded for loans acquired in the Sabal Palm and BBFC transactions. Prior year results included the reversal of provision for credit losses of $9.4 million, reflecting improvement at the time in post-COVID economic indicators. Adjusted net income1 for the fourth quarter of 2022 was $39.9 million, or $0.56 per diluted share. This compares to $32.8 million, or $0.53 per diluted share, for the prior quarter, and $36.9 million, or $0.62 per diluted share, for the prior year quarter. For the year ended December 31, 2022, adjusted net income1 was $136.1 million, or $2.12 per diluted share, compared to $135.0 million, or $2.36 per diluted share, for the year ended December 31, 2021.
  • Net revenues were $137.4 million in the fourth quarter of 2022, an increase of $33.0 million, or 32%, compared to the prior quarter, and an increase of $46.4 million, or 51%, compared to the prior year quarter. For the year ended December 31, 2022, net revenues were $432.3 million, an increase of $85.5 million, or 25%, compared to the year ended December 31, 2021. Adjusted revenues1 were $137.3 million in the fourth quarter of 2022, an increase of $32.6 million, or 31%, compared to the prior quarter, and an increase of $46.7 million, or 52%, compared to the prior year quarter. For the year ended December 31, 2022, adjusted revenues1 were $433.3 million, an increase of $86.8 million, or 25%, compared to the year ended December 31, 2021.
  • On an adjusted basis, pre-tax pre-provision earnings1 were $66.6 million, an increase of 36% compared to the third quarter of 2022 and an increase of 58% compared to the fourth quarter of 2021. Adjusted pre-tax pre-provision earnings1 for the full year 2022 were $203.8 million, an increase of 24% when compared to the full year of 2021.
  • Net interest income totaled $119.7 million in the fourth quarter of 2022, an increase of $31.4 million, or 36%, from the third quarter of 2022 and an increase of $47.4 million, or 66%, compared to the fourth quarter of 2021. For the year ended December 31, 2022, net interest income was $366.2 million, an increase of $90.1 million, or 33%, compared to the year ended December 31, 2021.
  • Net interest margin increased 69 basis points to 4.36% in the fourth quarter of 2022 compared to 3.67% in the third quarter of 2022. Excluding the effects of accretion on acquired loans, net interest margin increased 43 basis points to 4.01% in the fourth quarter of 2022. Securities yields increased 41 basis points to 2.77%, and loan yields increased 84 basis points to 5.29%. The effect on net interest margin of accretion of purchase discounts on acquired loans in the fourth quarter of 2022 was 35 basis points, compared to nine basis points in the third quarter of 2022. The cost of deposits increased 12 basis points to 21 basis points for the fourth quarter of 2022 compared to nine basis points in the prior quarter.
  • Noninterest income totaled $17.7 million in the fourth quarter of 2022, an increase of $1.5 million, or 10%, compared to the prior quarter, and a decrease of $1.1 million, or 6%, compared to the prior year quarter. For the year ended December 31, 2022, noninterest income was $66.1 million, a decrease of $4.6 million, or 7%, compared to the year ended December 31, 2021. Results for the fourth quarter of 2022 included the following:
    • Service charges on deposits increased $0.5 million compared to the prior quarter and $1.4 million year over year, reflecting the benefit of an expanded deposit base including from acquisitions.
    • Interchange income increased $0.5 million compared to the prior quarter, primarily attributed to an expanded customer base.
    • Despite the impact of market declines, the wealth management division has demonstrated continued success in building relationships, and during the fourth quarter of 2022, assets under management grew $159.5 million, driving a $0.2 million or 6% increase in wealth management income quarter over quarter. During 2022, the wealth management division added a record breaking $425 million in assets under management.
  • The provision for credit losses was $14.1 million in the fourth quarter of 2022, compared to $4.7 million in the prior quarter. A $15.0 million provision recorded in the Apollo and Drummond acquisitions was partially offset by the release of $2.1 million added in the third quarter of 2022 for potential losses related to hurricane Ian that did not materialize.
  • Noninterest expense was $91.5 million in the fourth quarter of 2022, an increase of $30.2 million, or 49%, compared to the prior quarter, and an increase of $41.2 million, or 82%, compared to the prior year quarter. The current quarter included $16.1 million of merger related expenses, compared to $2.1 million in the prior quarter and $0.5 million in the prior year quarter. Noninterest expense was $267.9 million for the year ended December 31, 2022, including $27.9 million in merger-related charges, compared to $197.4 million in the year ended December 31, 2021, which included $7.9 million in merger-related charges. Changes from the third quarter of 2022 included the following:
    • Salaries and wages increased $17.0 million to $45.4 million in the fourth quarter of 2022. The fourth quarter of 2022 includes $5.7 million in merger-related expenses as well as overhead associated with adding 20 branch locations, bankers, and operational staff associated with the acquisitions of Apollo and Drummond. We expect the full benefit of cost synergies to materialize beginning in the second quarter of 2023.
    • Employee benefits increased $1.2 million to $5.3 million in the fourth quarter of 2022, reflecting higher payroll taxes and healthcare-related costs attributed to higher headcount. 
    • Outsourced data processing costs increased by $4.5 million in the fourth quarter of 2022, which includes $2.6 million in direct acquisition related expenses. The remainder of the increase is the result of higher transaction volume and the growth in customers with the two bank acquisitions.
    • Occupancy, telephone and data lines, and furniture and equipment expenses collectively increased $1.1 million to $8.6 million in the fourth quarter of 2022, reflecting the expanded footprint from the addition of Apollo and Drummond locations.
    • Legal and professional fees increased by $5.4 million to $9.2 million in the fourth quarter of 2022, including a $4.7 million increase in merger-related expenses during the quarter.
    • Other expenses decreased by $1.4 million, driven by lower recruiting costs in the quarter.
    • Amortization of intangibles increased $3.3 million with the addition of $61.7 million in intangible assets from the acquisitions of Drummond and Apollo. These assets will be amortized using an accelerated amortization method over approximately six years. 
  • Seacoast recorded $7.8 million of income tax expense in the fourth quarter of 2022, compared to $9.1 million in the third quarter of 2022 and $8.3 million in the fourth quarter of 2021. The second quarter of 2022 included a $1.0 million refund of Florida corporate income tax paid in prior periods. Tax benefits related to stock-based compensation totaled $0.2 million in the fourth quarter of 2022, $0.2 million in the third quarter of 2022, and $0.6 million in the fourth quarter of 2021.
  • The ratio of net adjusted noninterest expense1 to average tangible assets was 2.42% in the fourth quarter of 2022, compared to 2.16% in the third quarter of 2022 and 1.96% in the fourth quarter of 2021. The increase in the ratio was primarily driven by higher expenses during the quarter resulting from expansion of the franchise.
  • The efficiency ratio was 63.39% in the fourth quarter of 2022, compared to 57.13% in the third quarter of 2022 and 53.70% in the prior year quarter. The adjusted efficiency ratio1 was 51.52% in the fourth quarter of 2022, compared to 53.28% in the third quarter of 2022 and 53.43% in the prior year quarter. The Company continues to remain keenly focused on disciplined expense control. The adjusted efficiency ratio1 for the full year 2022 was 53.03% compared to 52.59% for the full year 2021.

Balance Sheet

  • At December 31, 2022, the Company had total assets of $12.1 billion and total shareholders’ equity of $1.6 billion. Book value per share was $22.45 on December 31, 2022, compared to $20.95 on September 30, 2022, and $22.40 on December 31, 2021. Tangible book value per share totaled $14.69 on December 31, 2022 compared to $15.98 on September 30, 2022 and $17.84 on December 31, 2021. The decline during 2022 in the value of the available for sale securities portfolio driven by rising interest rates negatively impacted tangible book value per share by $2.53 when compared to December 31, 2021.
  • Debt securities totaled $2.6 billion on December 31, 2022, a decrease of $16.3 million, or 1%, compared to September 30, 2022.
  • Loans totaled $8.1 billion on December 31, 2022, an increase of $1.5 billion compared to September 30, 2022.  The increase includes loans acquired of  $665.1 million and $545.2 million from Apollo and Drummond, respectively, and $240.8 million in organic loan growth. The Company continues to exercise a disciplined approach to loan growth, carefully underwriting loans to strict underwriting guidelines.
  • Loan originations were $649.2 million in the fourth quarter of 2022, an increase of 17% compared to $554.7 million in the third quarter of 2022. The weighted average add-on rate for loan outstandings increased to 6.52% by the end of the fourth quarter.
    • Commercial originations were $489.6 million during the fourth quarter of 2022, compared to $340.4 million in the third quarter of 2022, and $408.9 million in the fourth quarter of 2021.
    • Consumer originations in the fourth quarter of 2022 were $74.6 million, compared to $128.6 million in the third quarter of 2022 and $72.6 million in the fourth quarter of 2021.
    • Residential loans originated for sale in the secondary market totaled $10.7 million in the fourth quarter of 2022, compared to $16.4 million in the third quarter of 2022 and $69.2 million in the fourth quarter of 2021.
    • Closed residential loans retained in the portfolio totaled $74.3 million in the fourth quarter of 2022, compared to $69.3 million in the third quarter of 2022, and $49.1 million in the fourth quarter of 2021.
  • Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $453.6 million on December 31, 2022, a decrease of 29% from September 30, 2022 and a decrease of 6% from December 31, 2021. As higher interest rates begin to slow loan demand, we remain focused on generating disciplined growth in full relationships, including credit facilities, deposit relationships, and wealth opportunities.
    • Commercial pipelines were $395.7 million as of December 31, 2022, a decrease of 25% from $530.4 million at September 30, 2022, and a decrease of 1% from $397.8 million at December 31, 2021.
    • Consumer pipelines were $36.6 million as of December 31, 2022, a decrease of 16% from $43.7 million at September 30, 2022, and an increase of 23% from $29.7 million at December 31, 2021.
    • Residential saleable pipelines were $4.2 million as of December 31, 2022, compared to $6.6 million at September 30, 2022, and $30.1 million at December 31, 2021. Retained residential pipelines were $17.1 million as of December 31, 2022, compared to $60.7 million at September 30, 2022, and $25.6 million at December 31, 2021.
  • Total deposits were $10.0 billion as of December 31, 2022, an increase of $1.2 billion, or 14%, compared to September 30, 2022, and an increase of $1.9 billion, or 24%, compared to December 31, 2021. The increase in the fourth quarter of 2022 includes $1.7 billion in deposits from acquired banks. The Company has continued to manage deposit pricing lower than competitors, and with an average loan-to-deposit ratio of 78% during the quarter, has maintained balance sheet flexibility supporting expansion of the net interest margin. The rising rate environment contributed to deposit outflows in the fourth quarter of 2022, which partially resulted in migration to wealth management and increases in assets under management.
    • At December 31, 2022, the percentage of total transaction account balances to overall deposit funding was 64%, which continues to aid the Company’s ability to maintain a consistently low cost of deposits.
    • The overall cost of deposits increased 12 basis points from the prior quarter to 21 basis points.
  • Federal Home Loan Bank advances of $150.0 million with a weighted average rate of 3.42% were added late in the fourth quarter of 2022.
  • Subordinated debt increased with the acquisition of $12.3 million in notes acquired in the Apollo transaction. The notes carry a fixed interest rate of 5.50% until 2025, convert to a floating rate until maturity in 2030, and are callable at the Company’s discretion.

Asset Quality

  • Credit metrics remain strong with charge-offs, non-accruals, and criticized assets at historically low levels. The Company remains diligent in its monitoring of these metrics, as well as changes in the broader economic environment.
  • Nonperforming loans increased by $7.4 million to $28.8 million at December 31, 2022. Nonperforming loans to total loans outstanding were 0.35% at December 31, 2022, 0.32% at September 30, 2022, and 0.52% at December 31, 2021.
  • Nonperforming assets to total assets increased to 0.26% at December 31, 2022, compared to 0.23% at September 30, 2022, and 0.46% at December 31, 2021.
  • The ratio of allowance for credit losses to total loans was 1.40% at December 31, 2022, 1.42% at September 30, 2022, and 1.41% at December 31, 2021. The decline in the fourth quarter of 2022 represents the release of $2.1 million added in the third quarter of 2022 for potential losses related to Hurricane Ian that did not materialize.
  • Net charge-offs of $0.8 million for the fourth quarter of 2022 compared to $0.1 million in the third quarter of 2022 and $0.6 million in the fourth quarter of 2021. Net charge-offs for the four most recent quarters averaged 0.01%.
  • 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 $621 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 45% and 228% of total bank-level risk-based capital, respectively, compared to 30% and 191% respectively, at September 30, 2022. On a consolidated basis, construction and land development and commercial real estate loans represent 41% and 210%, 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 December 31, 2022, of 15.1% compared to 16.5% at September 30, 2022, and 17.4% at December 31, 2021. The total capital ratio was 16.1% and the tier 1 leverage ratio was 11.5% at December 31, 2022.
  • Cash and cash equivalents at December 31, 2022 totaled $201.9 million, with decreases from the prior quarter resulting from loan growth and from lower deposit balances.
  • Tangible common equity to tangible assets was 9.08% at December 31, 2022, compared to 9.79% at September 30, 2022, and 11.09% at December 31, 2021. Declines in the value of available for sale securities due to rising interest rates in 2022 negatively impacted equity year to date by $181.1 million.
     
  • At December 31, 2022, the Company had available unsecured lines of credit of $175.0 million and lines of credit under lendable collateral value of $2.4 billion. Additionally, $2.0 billion of debt securities and $1.1 billion 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  
                     
  4Q’22   3Q’22   2Q’22   1Q’22   4Q’21  
Selected balance sheet data:                    
Total assets $ 12,145,762     $ 10,345,235     $ 10,811,704     $ 10,904,817     $ 9,681,433    
Gross loans   8,144,724       6,690,845       6,541,548       6,451,217       5,925,029    
Total deposits   9,981,595       8,765,414       9,188,953       9,243,768       8,067,589    
                     
Performance measures:                    
Net income $ 23,927     $ 29,237     $ 32,755     $ 20,588     $ 36,330    
Net interest margin   4.36 %     3.67 %     3.38 %     3.25 %     3.16 %  
Pre-tax pre-provision earnings1   45,999       43,143       42,580       33,095       40,855    
Average diluted shares outstanding   71,374       61,961       61,923       61,704       59,016    
Diluted earnings per share (EPS) $ 0.34     $ 0.47     $ 0.53     $ 0.33     $ 0.62    
Return on (annualized):                    
Average assets (ROA)   0.78 %     1.10 %     1.21 %     0.79 %     1.43 %  
Average tangible assets (ROTA)2   0.94       1.17       1.29       0.85       1.51    
Average tangible common equity (ROTCE)2   10.36       11.53       13.01       8.02       14.29    
Tangible common equity to tangible assets2   9.08       9.79       9.74       9.89       11.09    
Tangible book value per share2 $ 14.69     $ 15.98     $ 16.66     $ 17.12     $ 17.84    
Efficiency ratio   63.39 %     57.13 %     56.22 %     62.33 %     53.70 %  
                     
Adjusted operating measures1:                    
Adjusted net income $ 39,926     $ 32,837     $ 36,327     $ 27,056     $ 36,854    
Adjusted pre-tax pre-provision earnings   66,649       48,989       46,397       41,737       42,258    
Adjusted diluted EPS   0.56       0.53       0.59       0.44       0.62    
Adjusted ROTA2   1.36 %     1.27 %     1.38 %     1.06 %     1.49 %  
Adjusted ROTCE2   15.05       12.48       13.97       10.01       14.11    
Adjusted efficiency ratio   51.52       53.28       53.15       54.86       53.43    
Net adjusted noninterest expense as a percent of average tangible assets2   2.42       2.16       2.00       1.99       1.96    
                     
Other data:                    
Market capitalization3 $ 2,233,761     $ 1,858,429     $ 2,028,996     $ 2,144,586     $ 2,070,465    
Full-time equivalent employees   1,490       1,156       1,095       1,066       989    
Number of ATMs   100       79       79       79       75    
Full-service banking offices   78       58       58       58       54    
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.

OTHER INFORMATION

Conference Call Information
Seacoast will host a conference call January 27th at 10:00 a.m. Eastern Time, to discuss the fourth quarter and full year 2022 earnings results and business trends. Investors may call in (toll-free) by dialing (800) 763-5615. 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.” Additionally, a recording of the call will be made available to individuals shortly after the conference call and can be accessed via a link at www.SeacoastBanking.com under the heading “Corporate Information.” The recording 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 $12.1 billion in assets and $10.0 billion in deposits as of December 31, 2022. Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at over 75 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 Professional Holding Corp. and Professional Bank with and into Seacoast and Seacoast National Bank, respectively. The registration statement in connection with the merger includes a proxy statement of Professional Holding Corp. 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 STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGERS OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Investors may obtain 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.

Professional Holding Corp. and Professional Bank, their directors, executive officers, 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 Professional Holding Corp. 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, including Apollo Bancshares, Inc. and Drummond Banking Company, or expects to acquire, including Professional Holding Corp. 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 impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within Seacoast’s primary market areas, including the effects of inflationary pressures, elevated interest rates, slowdowns in economic growth, and the potential for high unemployment rates, as well as the financial stress on borrowers and changes to customer and client behavior (including the velocity of loan repayment) and credit risk as a result of the foregoing; 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; the risks of changes in interest rates on the level and composition of deposits (as well as the cost of, and competition for, 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; 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; changes in accounting policies, rules and practices, including the impact of the adoption of the current expected credit losses (“CECL”) methodology; uncertainty related to the impact of LIBOR calculations on securities, loans and debt; changes in retail distribution strategies, customer preferences and behavior generally and 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; the Company’s concentration in commercial real estate loans and in real estate collateral in Florida; 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; 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, as well as the effect of a fall in stock market prices on our fee income from our brokerage and wealth management businesses; 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 merger with Professional Holding Corp. include, without limitation: the diversion of management’s time on issues related to the merger; 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 mergers being lower than expected; the risk of deposit and customer attrition; regulatory enforcement and litigation risk; 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 disruptions, 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 the Company’s annual report on Form 10-K for the year ended December 31, 2021 and quarterly reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 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.

Contact:

Tracey L. Dexter
Chief Financial Officer
Seacoast Banking Corporation of Florida
(772) 403-0461

FINANCIAL HIGHLIGHTS (Unaudited)      
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES    
    Quarterly Trends    Twelve Months Ended   
(Amounts in thousands, except ratios and per share data) 4Q’22 3Q’22 2Q’22 1Q’22 4Q’21 4Q’22 4Q’21  
                 
Summary of Earnings              
Net income $ 23,927   $ 29,237   $ 32,755   $ 20,588   $ 36,330   $ 106,507   $ 124,403    
Adjusted net income1   39,926     32,837     36,327     27,056     36,854     136,146     134,952    
Net interest income2   119,858     88,399     81,764     76,639     72,412     366,660     276,541    
Net interest margin2,3   4.36 %   3.67 %   3.38 %   3.25 %   3.16 %   3.69 %   3.27 %  
Pre-tax pre-provision earnings1   45,999     43,143     42,580     33,095     40,855     164,817     149,833    
Adjusted pre-tax pre-provision earnings1   66,649     48,989     46,397     41,737     42,258     203,772     164,561    
                 
Performance Ratios              
Return on average assets-GAAP basis3   0.78 %   1.10 %   1.21 %   0.79 %   1.43 %   0.96 %   1.33 %  
Return on average tangible assets-GAAP basis3,4   0.94     1.17     1.29     0.85     1.51     1.06     1.41    
Adjusted return on average tangible assets1,3,4   1.36     1.27     1.38     1.06     1.49     1.27     1.48    
Pre-tax pre-provision return on average tangible assets1,3,4   1.69     1.71     1.66     1.34     1.7     1.61     1.69    
Adjusted pre-tax pre-provision return on average tangible assets1,3,4   2.28     1.89     1.77     1.64     1.71     1.91     1.81    
Net adjusted noninterest expense to average tangible assets1,3,4   2.42     2.16     2     1.99     1.96     2.15     2.01    
Return on average shareholders’ equity-GAAP basis3   6.03     8.6     9.73     5.96     11.06     7.51     10.24    
Return on average tangible common equity-GAAP basis3,4   10.36     11.53     13.01     8.02     14.29     10.7     13.27    
Adjusted return on average tangible common equity1,3,4   15.05     12.48     13.97     10.01     14.11     12.86     13.97    
Efficiency ratio5   63.39     57.13     56.22     62.33     53.7     60.01     55.39    
Adjusted efficiency ratio1   51.52     53.28     53.15     54.86     53.43     53.03     52.59    
Noninterest income to total revenue (excluding securities gains/ losses)   12.84     15.72     17.45     17.14     20.89     15.50     20.53    
Tangible common equity to tangible assets4   9.08     9.79     9.74     9.89     11.09     9.08     11.09    
Average loan-to-deposit ratio   77.67     73.9     70.6     71.25     70.29     73.5     73.61    
End of period loan-to-deposit ratio   81.63     76.35     71.34     70.01     73.84     81.63     73.84    
                 
Per Share Data              
Net income diluted-GAAP basis   0.34     0.47     0.53     0.33     0.62     1.66     2.18    
Net income basic-GAAP basis   0.34     0.48     0.53     0.34     0.62     1.67     2.2    
Adjusted earnings1   0.56     0.53     0.59     0.44     0.62     2.12     2.36    
                 
Book value per share common   22.45     20.95     21.65     22.15     22.4     22.45     22.4    
Tangible book value per share   14.69     15.98     16.66     17.12     17.84     14.69     17.84    
Cash dividends declared   0.17     0.17     0.17     0.13     0.13     0.64     0.39    
                 

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   Twelve Months Ended  
(Amounts in thousands, except per share data) 4Q’22   3Q’22   2Q’22   1Q’22   4Q’21   4Q’22   4Q’21  
Interest on securities: Taxable $ 18,530     $ 15,653     $  12,387     $ 10,041     $ 8,574     $ 56,611     $ 29,206    
Nontaxable   130       138       138       140       139       546       577    
Fees on PPP loans   27       295       676       1,373       3,011       2,371       17,496    
Interest on PPP loans   12       25       65       150       341       252       3,787    
Interest and fees on loans – excluding PPP loans   105,283       73,650       68,566       65,595       61,049       313,094       230,188    
Interest on federal funds sold and other investments   3,127       1,643       1,917       933       828       7,620       2,990    
Total Interest Income   127,109       91,404       83,749       78,232       73,942       380,494       284,244    
Interest on deposits   3,934       1,623       994       767       711       7,318       3,605    
Interest on time certificates   1,358       380       436       468       494       2,642       2,788    
Interest on borrowed money   2,108       1,117       672       475       448       4,372       1,826    
Total Interest Expense   7,400       3,120       2,102       1,710       1,653       14,332       8,219    
Net Interest Income   119,709       88,284       81,647       76,522       72,289       366,162       276,025    
Provision for credit losses   14,129       4,676       822       6,556       (3,942 )     26,183       (9,421 )  
Net Interest Income After Provision for Credit Losses   105,580       83,608       80,825       69,966       76,231       339,979       285,446    
Noninterest income: Service charges on deposit accounts   3,996       3,504       3,408       2,801       2,606       13,709       9,777    
Interchange income   4,650       4,138       4,255       4,128       4,135       17,171       16,231    
Wealth management income   2,886       2,732       2,774       2,659       2,356       11,051       9,628    
Mortgage banking fees   426       434       932       1,686       2,030       3,478       11,782    
Marine finance fees   208       209       312       191       147       920       665    
SBA gains   105       108       473       156       200       842       1,531    
BOLI income   1,526       1,363       1,349       1,334       1,295       5,572       4,154    
Other   3,836       3,977       3,761       2,870       6,316       14,444       17,537    
    17,633       16,465       17,264       15,825       19,085       67,187       71,305    
Securities gains (losses), net   18       (362 )     (300 )     (452 )     (379 )     (1,096 )     (578 )  
Total Noninterest Income   17,651       16,103       16,964       15,373       18,706       66,091       70,727    
Noninterest expenses: Salaries and wages   45,405       28,420       28,056       28,219       25,005       130,100       97,283    
Employee benefits   5,300       4,074       4,151       5,501       4,763       19,026       17,873    
Outsourced data processing costs   9,918       5,393       6,043       6,156       5,165       27,510       19,919    
Telephone / data lines   1,185       973       908       733       790       3,799       3,223    
Occupancy   5,457       5,046       4,050       3,986       3,500       18,539       14,140    
Furniture and equipment   1,944       1,462       1,588       1,426       1,403       6,420       5,390    
Marketing   1,772       1,461       1,882       1,171       1,060       6,286       4,583    
Legal and professional fees   9,174       3,794       2,946       4,789       2,461       20,703       11,376    
FDIC assessments   889       760       699       789       713       3,137       2,405    
Amortization of intangibles   4,763       1,446       1,446       1,446       1,304       9,101       5,033    
Foreclosed property expense and net (gain) loss on sale   (411 )     9       (968 )     (164 )     (175 )     (1,534 )     (264 )  
Provision for credit losses on unfunded commitments         1,015             142             1,157       133    
Other   6,114       7,506       5,347       4,723       4,274       23,690       16,341    
Total Noninterest Expense   91,510       61,359       56,148       58,917       50,263       267,934       197,435    
Income Before Income Taxes   31,721       38,352       41,641       26,422       44,674       138,136       158,738    
Income taxes   7,794       9,115       8,886       5,834       8,344       31,629       34,335    
Net Income $        23,927     $        29,237     $        32,755     $         20,588     $         36,330     $   106,507     $   124,403    
Per share of common stock:                            
Net income diluted $            0.34     $            0.47     $            0.53     $            0.33     $            0.62     $            1.66     $           2.18    
Net income basic   0.34       0.48       0.53       0.34       0.62       1.67       2.20    
Cash dividends declared   0.17       0.17       0.17       0.13       0.13       0.64       0.39    
Average diluted shares outstanding   71,374       61,961       61,923       61,704       59,016       64,264       57,088    
Average basic shares outstanding   70,770       61,442       61,409       61,127       58,462       63,707       56,586    
CONDENSED CONSOLIDATED BALANCE SHEETS     (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                    
(Amounts in thousands) December 31,
2022
  September 30,
2022
  June 30,
2022
  March 31,
2022
  December 31,
2021
 
Assets
Cash and due from banks
$ 120,748     $ 176,463     $ 363,343     $ 351,128     $ 238,750    
Interest bearing deposits with other banks 81,192       42,152       538,025       871,387       498,979    
Total Cash and Cash Equivalents                                                    201,940       218,615       901,368       1,222,515       737,729    
Time deposits with other banks 3,236       4,481       4,730       5,975          
Debt Securities:
Available for sale (at fair value)
1,871,742       1,860,734       1,800,791       1,706,619       1,644,319    
Held to maturity (at amortized cost) 747,408       774,706       794,785       747,004       638,640    
Total Debt Securities                                                                     2,619,150       2,635,440       2,595,576       2,453,623       2,282,959    
Loans held for sale 3,151       1,620       14,205       20,615       31,791    
Loans 8,144,724       6,690,845       6,541,548       6,451,217       5,925,029    
Less: Allowance for credit losses   (113,895 )     (95,329 )     (90,769 )     (89,838 )     (83,315 )  
Net Loans                                                                                      8,030,829       6,595,516       6,450,779       6,361,379       5,841,714    
Bank premises and equipment, net 116,892       81,648       74,784       74,617       72,404    
Other real estate owned 2,301       2,419       2,419       11,567       13,618    
Goodwill 480,319       286,606       286,606       286,606       252,154    
Other intangible assets, net 75,451       18,583       20,062       21,549       14,845    
Bank owned life insurance 237,824       209,087       207,724       206,375       205,041    
Net deferred tax assets 94,457       83,139       60,080       47,222       27,321    
Other assets 280,212       208,081       193,371       192,774       201,857    
Total Assets                                                                        $ 12,145,762     $ 10,345,235     $ 10,811,704     $ 10,904,817     $ 9,681,433    

Liabilities and Shareholders’ Equity
Liabilities
Deposits

Noninterest demand $       4,070,973     $       3,529,489     $        3,593,201     $        3,522,700     $         3,075,534    
Interest-bearing demand   2,337,590       2,170,251       2,269,148       2,253,562       1,890,212    
Savings   1,064,392       938,081       946,738       937,839       895,019    
Money market   1,985,974       1,700,737       1,911,847       1,999,027       1,651,881    
Other time certificates   369,389       312,840       350,571       397,491       404,601    
Brokered time certificates   3,798                            
Time certificates of more than $250,000   149,479       114,016       117,448       133,149       150,342    
Total Deposits   9,981,595       8,765,414       9,188,953       9,243,768       8,067,589    
Securities sold under agreements to repurchase   172,029       94,191       110,578       120,922       121,565    
Federal Home Loan Bank borrowings   150,000                            
Subordinated debt   84,533       71,857       71,786       71,716       71,646    
Other liabilities   149,830       125,971       110,812       112,126       109,897    
Total Liabilities   10,537,987       9,057,433       9,482,129       9,548,532       8,370,697    
Shareholders’ Equity
Common stock
  7,162       6,148       6,141       6,124       5,850    
Additional paid in capital   1,377,802       1,068,241       1,065,167       1,062,462       963,851    
Retained earnings   423,863       412,166       393,431       371,192       358,598    
Treasury stock   (13,019 )     (11,539 )     (11,632 )     (10,459 )     (10,569 )  
    1,795,808       1,475,016       1,453,107       1,429,319       1,317,730    
Accumulated other comprehensive (loss) income, net   (188,033 )     (187,214 )     (123,532 )     (73,034 )     (6,994 )  
Total Shareholders’ Equity   1,607,775       1,287,802       1,329,575       1,356,285       1,310,736    
Total Liabilities & Shareholders’ Equity $   12,145,762     $   10,345,235     $   10,811,704     $   10,904,817     $         9,681,433    
Common shares outstanding   71,618       61,476       61,410       61,239       58,504    
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES                  
                   
(Amounts in thousands) 4Q’22   3Q’22   2Q’22   1Q’22   4Q’21
Credit Analysis
Net charge-offs (recoveries) – non-acquired loans
$  185     $ 129     $ (75 )   $ 72     $ 541  
Net charge-offs (recoveries) – acquired loans   597       (26 )     (49 )     7       29  
Total Net Charge-offs (Recoveries) $      782     $ 103     $ (124 )   $ 79     $ 570  
Net charge-offs (recoveries) to average loans – non-acquired loans   0.01 %     0.01 %     %     %     0.04 %
Net charge-offs (recoveries) to average loans – acquired loans   0.03                          
Total Net Charge-offs (Recoveries) to Average Loans    0.04       0.01                   0.04  
Allowance for credit losses – non-acquired loans $      85,469     $ 82,980     $ 70,215     $ 67,261     $ 64,710  
Allowance for credit losses – acquired loans   28,426       12,349       20,554       22,577       18,605  
Total Allowance for Credit Losses $  113,895     $ 95,329     $ 90,769     $ 89,838     $ 83,315  
Non-acquired loans at end of period $   5,942,720     $ 5,651,741     $ 5,389,405     $ 5,169,973     $ 4,860,171  
Acquired loans at end of period   2,197,414       1,033,810       1,134,940       1,241,988       973,751  
Paycheck Protection Program loans at end of period   4,590       5,294       17,203       39,256       91,107  
Total Loans $   8,144,724     $ 6,690,845     $ 6,541,548     $ 6,451,217     $ 5,925,029  
Non-acquired loans allowance for credit losses to non-acquired   1.44 %      1.47 %     1.30 %     1.30 %     1.33 %
Properties previously used in bank operations included in other real estate owned   1,771        2,310       2,310        2,310       1,395  
Total Nonperforming Assets $ 31,144     $ 23,883     $ 28,861     $ 37,775     $ 44,216  
Accruing troubled debt restructures (TDRs) $  4,032     $ 4,149     $ 4,022     $ 4,454     $ 3,917  
Nonperforming Loans to Loans at End of Period   0.35 %     0.32 %     0.40 %     0.41 %     0.52 %
Nonperforming Assets to Total Assets at End of Period   0.26       0.23       0.27       0.35       0.46  
           
  December 31, September 30, June 30, March 31, December 31,
Loans 2022 2022 2022 2022 2021
Construction and land development $  587,332     $ 361,913   $ 350,025     $ 259,421     $ 230,824  
Commercial real estate – owner occupied   1,478,302       1,253,459     1,254,343       1,284,515       1,197,774  
Commercial real estate – non-owner occupied 1   2,589,774       2,107,614     1,972,540       1,966,150       1,736,439  
Residential real estate 1   1,849,503       1,599,765     1,647,465       1,599,645       1,425,354  
Commercial and financial   1,348,636       1,182,384     1,124,771       1,132,506       1,069,356  
Consumer   286,587       180,416     175,201       169,724       174,175  
Paycheck Protection Program   4,590       5,294     17,203       39,256       91,107  
Total Loans $   8,144,724     $ 6,690,845   $ 6,541,548     $ 6,451,217     $ 5,925,029  

1 In 3Q’22, $100 million in loans to commercial borrowers collateralized by residential properties were reclassified from “Residential real estate” to “Commercial real estate – non-owner occupied.”

AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1   (Unaudited)      
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES          
                   
                   
                   
  4Q’22 3Q’22 4Q’21
  Average   Yield/ Average   Yield/ Average   Yield/
(Amounts in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
                   
Assets                  
Earning assets:                  
Securities:                  
Taxable $ 2,680,813   $ 18,530     2.76 % $ 2,665,104   $ 15,653 2.35 % $ 2,198,517   $ 8,574     1.56 %
Nontaxable   20,246     164     3.24     22,064     174 3.15     24,664     176     2.85  
Total Securities   2,701,059     18,694     2.77     2,687,168     15,827 2.36     2,223,181     8,750     1.57  
Federal funds sold   155,815     1,410     3.59     203,815     1,062 2.07     878,875     337     0.15  
Interest bearing deposits with other banks   141,179     1,717     4.83     45,193     581 5.1     34,991     491     5.56  
Loans excluding PPP loans   7,905,843     105,398     5.29     6,597,828     73,730 4.43     5,804,149     61,135     4.18  
PPP loans   4,886     39     3.19     10,114     320 12.54     136,942     3,352     9.71  
Total Loans   7,910,729     105,437     5.29     6,607,942     74,050 4.45     5,941,091     64,487     4.31  
Total Earning Assets   10,908,782     127,258     4.63     9,544,118     91,520 3.8     9,078,138     74,065     3.24  
                   
Allowance for credit losses   (109,509 )               (91,348 )           (88,484 )        
Cash and due from banks   137,839                 331,947             359,287          
Premises and equipment   115,095                 76,357             72,148          
Intangible assets   521,412                 305,935             267,692          
Bank owned life insurance   237,062                 208,193             195,169          
Other assets including deferred tax assets   329,175                 210,136             177,432          
                                   
Total Assets $ 12,139,856               $ 10,585,338           $ 10,061,382          
                   
Liabilities and Shareholders’ Equity                      
Interest-bearing liabilities:                  
Interest-bearing demand $ 2,303,324   $ 1,859     0.32 % $ 2,215,899   $ 757 0.14 % $ 1,960,083   $ 183     0.04 %
Savings   1,126,540     203     0.07     944,128     65 0.03     866,257     63     0.03  
Money market   1,980,870     1,872     0.37     1,806,014     802 0.18     1,851,275     465     0.1  
Time deposits   500,441     1,358     1.08     445,840     380 0.34     595,230     494     0.33  
Securities sold under agreements to repurchase   134,709     544     1.60     111,902     309 1.10     106,691     30     0.11  
Federal Home Loan Bank borrowings   40,712     330     3.22                      
Other borrowings   83,534     1,234     5.86     71,810     808 4.46     71,600     418     2.32  
Total Interest-Bearing Liabilities   6,170,130     7,400     0.48     5,595,593     3,121 0.22     5,451,136     1,653     0.12  
                   
Noninterest demand   4,273,922                 3,529,844         3,179,798              
Other liabilities   122,100                 110,426             126,762              
Total Liabilities   10,566,152                 9,235,863             8,757,696              
                                       
Shareholders’ equity   1,573,704                 1,349,475             1,303,686              
                                       
Total Liabilities & Equity $ 12,139,856               $ 10,585,338           $ 10,061,382              
                                       
Cost of deposits               0.21 %           0.09 %               0.06 %
Interest expense as a % of earning assets               0.27 %           0.13 %               0.07 %
Net interest income as a % of earning assets       $ 119,858     4.36 %         88,399 3.67 %       $ 72,412     3.16 %
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    
               
  Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021
  Average   Yield/ Average   Yield/
(Amounts in thousands, except ratios) Balance Interest Rate Balance Interest Rate
               
Assets              
Earning assets:              
Securities:              
Taxable $ 2,568,568   $ 56,611   2.20 % $ 1,839,619   $ 29,206 1.59 %
Nontaxable   22,188     690   3.11     25,369     730 2.88  
Total Securities   2,590,756     57,301   2.21     1,864,988     29,936 1.61  
                               
Federal funds sold   433,359     4,103   0.95     763,795     1,043 0.14  
Interest bearing deposits with other banks and other investments   69,604     3,517   5.05     65,534     1,947 2.97  
               
Loans excluding PPP loans   6,812,654     313,450   4.6     5,369,204     230,552 4.29  
PPP loans   25,612     2,623   10.24     381,860     21,282 5.57  
Total Loans   6,838,266     316,073   4.62     5,751,064     251,834 4.38  
               
Total Earning Assets   9,931,985     380,994   3.84     8,445,381     284,760 3.37  
                               
Allowance for credit losses   (94,693 )             (88,659 )        
Cash and due from banks   305,775               332,664          
Premises and equipment   85,568               71,771          
Intangible assets   360,217               249,089          
Bank owned life insurance   214,468               156,599          
Other assets including deferred tax assets   248,108               170,209          
                               
Total Assets $ 11,051,428             $ 9,337,054          
               
Liabilities and Shareholders’ Equity            
Interest-bearing liabilities:            
Interest-bearing demand $ 2,220,307   $ 3,099   0.14 % $ 1,787,234   $ 895 0.05 %
Savings   989,997     397   0.04     805,816     383 0.05  
Money market   1,925,176     3,824   0.2     1,765,444     2,327 0.13  
Time deposits   500,471     2,642   0.53     602,739     2,788 0.46  
Securities sold under agreements to repurchase   121,318     986   0.81     113,881     141 0.12  
Federal Home Loan Bank borrowings   10,264     330   3.22          
Other borrowings   74,713     3,056   4.09     71,495     1,685 2.36  
               
Total Interest-Bearing Liabilities   5,842,246     14,334   0.25     5,146,609     8,219 0.16  
               
Noninterest demand   3,667,345             2,851,687        
Other liabilities   122,982             123,446        
Total Liabilities   9,632,573             8,121,742        
                   
Shareholders’ equity   1,418,855             1,215,312        
                   
Total Liabilities & Equity $ 11,051,428           $ 9,337,054        
                   
Cost of deposits   0.11 %       0.11 %         0.08 %
Interest expense as a % of earning assets         0.14 %         0.10 %
Net interest income as a % of earning assets       $ 366,660   3.69 %       $ 276,541 3.27 %
                               
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

 

(Amounts in thousands)

December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Customer Relationship Funding Noninterest demand          
Commercial $        3,148,778   $ 2,827,591   $ 2,945,445   $ 2,939,595   $ 2,477,111
Retail   764,274     447,848     464,214     458,809     458,626
Public funds   112,553     210,662     143,075     86,419     107,523
Other   45,368     43,388     40,467     37,877     32,274
Total Noninterest Demand   4,070,973     3,529,489     3,593,201     3,522,700     3,075,534
Interest-bearing demand Commercial   886,894     759,286      769,948     610,109     497,466
Retail   1,191,192     1,199,112     1,207,698     1,392,490     1,144,635
Brokered   54,777     81,799            
Public funds   204,727     130,054     291,502     250,963     248,111
Total Interest-Bearing Demand   2,337,590     2,170,251     2,269,148     2,253,562     1,890,212
 Total transaction accounts Commercial   4,035,672     3,586,877     3,715,393     3,549,704     2,974,577
Retail   1,955,466     1,646,960     1,671,912     1,851,299     1,603,261
Brokered   54,777     81,799            
Public funds   317,280     340,716     434,577     337,382     355,634
Other   45,368     43,388     40,467     37,877     32,274
Total Transaction Accounts   6,408,563     5,699,740     5,862,349     5,776,262     4,965,746
Savings   1,064,392     938,081     946,738     937,839     895,019
Money market Commercial   932,518     788,009     819,452     856,117     732,639
Retail   984,561     857,914     914,918     931,702     840,054
Brokered           106,823     126,168     8,007
Public funds   68,895     54,814     70,654     85,040     71,181
Total Money Market   1,985,974     1,700,737     1,911,847     1,999,027     1,651,881
Brokered time certificates   3,798                
Other time certificates   518,868     426,856     468,019     530,640     554,943
522,666     426,856     468,019     530,640     554,943
Total Deposits  $ 9,981,595   $ 8,765,414   $ 9,188,953   $ 9,243,768   $ 8,067,589
                             
Customer sweep accounts $ 172,029   $ 94,191   $ 110,578   $ 120,922   $ 121,565

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 Twelve Months Ended
(Amounts in thousands, except per share data) 4Q’22 3Q’22 2Q’22 1Q’22 4Q’21 4Q’22 4Q’21
Net Income $      23,927   $      29,237   $      32,755   $      20,588   $      36,330   $ 106,507   $   124,403  
Total noninterest income   17,651     16,103     16,964     15,373     18,706     66,091     70,727  
Securities losses (gains), net   (18 )   362     300     452     379     1,096     578  
Gain on sale of domain name (included in other income)                   (755 )       (755 )
Total Adjustments to Noninterest Income   (18 )   362     300     452     (376 )   1,096     (177 )
Total Adjusted Noninterest Income   17,633     16,465     17,264     15,825     18,330     67,187     70,550  
Total noninterest expense   91,510     61,359     56,148     58,917     50,263     267,934     197,435  
Merger related charges   (16,140 )   (2,054 )   (3,039 )   (6,692 )   (482 )   (27,925 )   (7,853 )
Amortization of intangibles   (4,763 )   (1,446 )   (1,446 )   (1,446 )   (1,304 )   (9,101 )   (5,033 )
Branch reductions and other expense initiatives   (176 )   (960 )       (74 )   (168 )   (1,210 )   (2,150 )
Total Adjustments to Noninterest Expense   (21,079 )   (4,460 )   (4,485 )   (8,212 )   (1,954 )   (38,236 )   (15,036 )
Total Adjusted Noninterest Expense   70,431     56,899     51,663     50,705     48,309     229,698     182,399  
Income Taxes   7,794     9,115     8,886     5,834     8,344     31,629     34,335  
Tax effect of adjustments   5,338     1,222     1,213     2,196     280     9,969     3,536  
Tax expense on BOLI surrender   (276 )                   (276 )    
Effect of change in corporate tax rate on deferred tax assets                   774         774  
Total Adjustments to Income Taxes   5,062     1,222     1,213     2,196     1,054     9,693     4,310  
Adjusted Income Taxes   12,856     10,337     10,099     8,030     9,398     41,322     38,645  
Adjusted Net Income $      39,926   $      32,837   $      36,327   $      27,056   $      36,854   $ 136,146   $   134,952  
Earnings per diluted share, as reported $         0.34   $          0.47   $          0.53   $          0.33   $          0.62   $         1.66   $          2.18  
Adjusted Earnings per Diluted Share   0.56     0.53     0.59     0.44     0.62     2.12     2.36  
Average diluted shares outstanding   71,374     61,961     61,923     61,704     59,016     64,264     57,088  
Adjusted Noninterest Expense $      70,431   $      56,899   $      51,663   $      50,705   $      48,309   $ 229,698   $   182,399  
Provision for credit losses on unfunded commitments       (1,015 )       (142 )       (1,157 )   (133 )
Foreclosed property expense and net gain / (loss) on sale   411     (9 )   968     164     175     1,534     264  
Net Adjusted Noninterest Expense $      70,842   $      55,875   $      52,631   $      50,727   $      48,484   $ 230,075   $   182,530  
Revenue $ 137,360   $   104,387   $      98,611   $      91,895   $      90,995   $ 432,253   $   346,752  
Total Adjustments to Revenue   (18 )   362     300     452     (376 )   1,096     (177 )
Impact of FTE adjustment   149     115     117     117     123     498     516  
Adjusted Revenue on a fully taxable equivalent basis $ 137,491   $   104,864   $      99,028   $      92,464   $      90,742   $ 433,847   $   347,091  
Adjusted Efficiency Ratio   51.52 %   53.28 %   53.15 %   54.86 %   53.43 %   53.03 %   52.59 %
Net Interest Income $ 119,709   $      88,284   $      81,647   $      76,522   $      72,289   $ 366,162   $   276,025  
Impact of FTE adjustment   149     115     117     117     123     498     516  
Net Interest Income including FTE adjustment $ 119,858   $      88,399   $      81,764   $      76,639   $      72,412   $ 366,660   $   276,541  
Total noninterest income   17,651     16,103     16,964     15,373     18,706     66,091     70,727  
Total noninterest expense   91,510     61,359     56,148     58,917     50,263     267,934     197,435  
Pre-Tax Pre-Provision Earnings $      45,999   $      43,143   $      42,580   $      33,095   $      40,855   $ 164,817   $   149,833  
Total Adjustments to Noninterest Income   (18 )   362     300     452     (376 )   1,096     (177 )
Total Adjustments to Noninterest Expense   (20,668 )   (5,484 )   (3,517 )   (8,190 )   (1,779 )   (37,859 )   (14,905 )
Adjusted Pre-Tax Pre-Provision Earnings $      66,649   $      48,989   $      46,397   $      41,737   $      42,258   $ 203,772   $   164,561  
Average Assets $ 12,139,856   $ 10,585,338   $ 10,840,518   $ 10,628,516   $ 10,061,382   $ 11,051,428   $ 9,337,054  
Less average goodwill and intangible assets   (521,412 )   (305,935 )   (307,411 )   (304,321 )   (267,692 )   (360,217 )   (249,089 )
Average Tangible Assets $ 11,618,444   $ 10,279,403   $ 10,533,107   $ 10,324,195   $ 9,793,690   $ 10,691,211   $ 9,087,965  
Return on Average Assets (ROA)   0.78 %   1.10 %   1.21 %   0.79 %   1.43 %   0.96 %   1.33 %
Impact of removing average intangible assets and related   0.16     0.07     0.08     0.06     0.08     0.10     0.08  
Return on Average Tangible Assets (ROTA)   0.94     1.17     1.29     0.85     1.51     1.06     1.41  

GAAP TO NON-GAAP RECONCILIATION       (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

  Quarterly Trends Twelve Months Ended
(Amounts in thousands, except per share data) 4Q’22 3Q’22 2Q’22 1Q’22 4Q’21 4Q’22 4Q’21
Impact of other adjustments for Adjusted Net Income   0.42     0.10     0.09     0.21     (0.02 )   0.21     0.07  
Adjusted Return on Average Tangible Assets   1.36     1.27     1.38     1.06     1.49     1.27     1.48  
Pre-Tax Pre-Provision return on Average Tangible Assets   1.69 %   1.71 %   1.66 %   1.34 %   1.70 %   1.61 %   1.69 %
Impact of adjustments on Pre-Tax Pre-Provision earnings   0.59     0.18     0.18     0.18     0.18     0.30     0.12  
Adjusted Pre-Tax Pre-Provision Return on Tangible Assets   2.28     1.89     1.77     1.64     1.71     1.91     1.81  
Average Shareholders’ Equity $ 1,573,704   $ 1,349,475   $ 1,350,568   $ 1,400,535   $ 1,303,686   $ 1,418,855   $ 1,215,312  
Less average goodwill and intangible assets   (521,412 )   (305,935 )   (307,411 )   (304,321 )   (267,692 )   (360,217 )   (249,089 )
Average Tangible Equity $ 1,052,292   $ 1,043,540   $ 1,043,157   $ 1,096,214   $ 1,035,994   $ 1,058,638   $   966,223  
Return on Average Shareholders’ Equity   6.03 %   8.60 %   9.73 %   5.96 %   11.06 %   7.51 %   10.24 %
Impact of removing average intangible assets and related amortization   4.33     2.93     3.28     2.06     3.23     3.19     3.03  
Return on Average Tangible Common Equity (ROTCE)   10.36     11.53     13.01     8.02     14.29     10.70     13.27  
Impact of other adjustments for Adjusted Net Income   4.69     0.95     0.96     1.99     (0.18 )   2.16     0.70  
Adjusted Return on Average Tangible Common Equity   15.05     12.48     13.97     10.01     14.11     12.86     13.97  
Loan interest income1 $ 105,437   $      74,050   $      69,388   $      67,198   $      64,487   $ 316,073   $   251,834  
Accretion on acquired loans   (9,710 )   (2,242 )   (2,720 )   (3,717 )   (3,520 )   (18,389 )   (12,757 )
Interest and fees on PPP loans   (39 )   (320 )   (741 )   (1,523 )   (3,352 )   (2,623 )   (21,282 )
Loan interest income excluding PPP and accretion on acquired loans $ 95,688   $ 71,488   $ 65,927   $ 61,958   $ 57,615   $ 295,061   $ 217,795  
Yield on loans1   5.29     4.45     4.29     4.30     4.31     4.62     4.38  
Impact of accretion on acquired loans   (0.49 )   (0.14 )   (0.16 )   (0.24 )   (0.24 )   (0.27 )   (0.22 )
Impact of PPP loans       (0.01 )   (0.03 )   (0.06 )   (0.13 )   (0.02 )   (0.10 )
Yield on loans excluding PPP and accretion on acquired loans   4.80 %   4.30 %   4.10 %   4.00 %   3.94 %   4.33 %   4.06 %
Net Interest Income1 $ 119,858   $ 88,399   $ 81,764   $ 76,639   $ 72,412   $ 366,660   $ 276,541  
Accretion on acquired loans   (9,710 )   (2,242 )   (2,720 )   (3,717 )   (3,520 )   (18,389 )   (12,757 )
Interest and fees on PPP loans   (39 )   (320 )   (741 )   (1,523 )   (3,352 )   (2,623 )   (21,282 )
Net interest income excluding PPP and accretion on acquired loans $ 110,109   $ 85,837   $ 78,303   $ 71,399   $ 65,540   $ 345,648   $ 242,502  
Net Interest Margin   4.36     3.67     3.38     3.25     3.16     3.69     3.27  
Impact of accretion on acquired loans   (0.35 )   (0.09 )   (0.12 )   (0.15 )   (0.15 )   (0.18 )   (0.15 )
Impact of PPP loans       (0.01 )   (0.02 )   (0.05 )   (0.10 )   (0.02 )   (0.11 )
Net interest margin excluding PPP and accretion on acquired loans   4.01 %   3.57 %   3.24 %   3.05 %   2.91 %   3.49 %   3.01 %
Security interest income1 $      18,694   $ 15,827   $ 12,562   $ 10,218   $ 8,750   $      57,301   $ 29,936  
Tax equivalent adjustment on securities   (34 )   (35 )   (36 )   (37 )   (37 )   (142 )   (153 )
Security interest income excluding tax equivalent adjustment $ 18,660   $ 15,792   $ 12,526   $ 10,181   $ 8,713   $ 57,159   $ 29,783  
Loan interest income1 $ 105,437   $ 74,050   $ 69,388   $  67,198   $  64,487   $ 316,073   $  251,834  
Tax equivalent adjustment on loans   (115 )   (80 )   (81 )   (80 )   (86 )   (356 )   (363 )
Loan interest income excluding tax equivalent adjustment $ 105,322   $ 73,970   $ 69,307   $ 67,118   $ 64,401   $ 315,717   $ 251,471  
Net Interest Income1 $ 119,858   $ 88,399   $  81,764   $  76,639   $  72,412   $ 366,660   $  276,541  
Tax equivalent adjustment on securities   (34 )   (35 )   (36 )   (37 )   (37 )   (142 )   (153 )
Tax equivalent adjustment on loans   (115 )   (80 )   (81 )   (80 )   (86 )   (356 )   (363 )
Net interest income excluding tax equivalent adjustment $ 119,709   $ 88,284   $ 81,647   $ 76,522   $ 72,289   $ 366,162   $ 276,025  
                               

1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost.

 



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