8-K – page 1 of 6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)
July 23, 2015
SEACOAST BANKING CORPORATION OF FLORIDA |
(Exact Name of Registrant as Specified in Charter) |
Florida |
|
0-13660 |
|
59-2260678 |
(State or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number |
|
(IRS Employer
Identification No.) |
815 Colorado Avenue, Stuart, FL |
|
34994 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code (772) 287-4000
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2.)
| ¨ | Written communications pursuant to Rule
425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
SEACOAST BANKING CORPORATION OF FLORIDA
Item 2.02 |
Results of Operations and Financial Condition |
On July 23, 2015, the Seacoast Banking
Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the second quarter
ended June 30, 2015.
A copy of the press release announcing
Seacoast’s results for the second quarter ended June 30, 2015 is attached hereto as Exhibit 99.1 and incorporated herein
by reference.
Item 7.01 |
Regulation FD Disclosure |
On July 24, 2015, Seacoast held an investor
conference call to discuss its financial results for the second quarter ended June 30, 2015. A transcript of this conference call
is attached hereto as Exhibit 99.2 and incorporated herein by reference. Also attached as Exhibit 99.3 are charts (available on
the Company’s website at www.seacoastbanking.com) containing information used in the conference call and incorporated herein
by reference. All information included in the transcript and the charts is presented as of June 30, 2015, and the Company does
not assume any obligation to correct or update said information in the future.
The information in Items 2.02 and 7.01,
as well as Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed “filed” for purposes of Section
18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933.
Item 9.01 |
Financial Statements and Exhibits |
(d) Exhibits
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated July 23, 2015 with respect to Seacoast’s financial results for the second quarter ended June 30, 2015 |
|
|
|
99.2 |
|
Transcript of Seacoast’s investor conference call held on July 24, 2015 to discuss the Company’s financial results for the second quarter ended June 30, 2015 |
|
|
|
99.3 |
|
Data on website containing information used in the conference call held on July 24, 2015 |
Exhibits 99.1, 99.2 and 99.3 referenced
herein contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results,
ability to realized deferred tax assets, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and
improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as
well as statements with respect to Seacoast’s objectives, expectations and intentions and other statements that are not historical
facts. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements include statements
with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known
and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance
or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by
such forward-looking statements. You should not expect us to update any forward-looking statements.
You can identify these forward-looking
statements through our use of words such as “may,” “will,” “anticipate,” “assume,”
“should,” “support”, “indicate,” “would,” “believe,” “contemplate,”
“expect,” “estimate,” “continue,” “further”, “point to,” “project,”
“could,” “intend” or other similar words and expressions of the future. These forward-looking statements
may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions,
including seasonality; governmental monetary and fiscal policies, as well as legislative, tax and regulatory changes; changes in
accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan
demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks,
sensitivities and the shape of the yield curve; the effects of competition from other commercial banks, thrifts, mortgage banking
firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual
funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally,
nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer
and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses. The risks of
mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations;
the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming
or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as
the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes
in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee
loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees;
increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with
entering new markets.
All written or oral forward-looking statements
attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks
and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2014 under “Special Cautionary
Notice Regarding Forward-Looking Statements” and “Risk Factors”, and otherwise in our SEC reports and filings.
Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the
SEC’s Internet website at http://www.sec.gov.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
SEACOAST BANKING
CORPORATION OF FLORIDA |
|
(Registrant) |
Date: July 28, 2015 |
By: |
/s/ Dennis S. Hudson, III |
|
|
Dennis S. Hudson, III |
|
|
Chairman and Chief Executive Officer |
EXHIBIT INDEX
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated July 23, 2015 with respect to Seacoast’s financial results for the second quarter ended June 30, 2015 |
|
|
|
99.2 |
|
Transcript of Seacoast’s investor conference call held on July 24, 2015 to discuss the Company’s financial results for the second quarter ended June 30, 2015 |
|
|
|
99.3 |
|
Data on website containing information used in the conference call held on July 24, 2015 |
EXHIBIT 99.1
To Form 8-K dated July 23, 2015
NEWS RELEASE
SEACOAST BANKING CORPORATION
OF FLORIDA
CONTACT:
Stephen
Fowle, EVP and CFO
(772)
463-8977
steve.fowle@seacoastbank.com
Seacoast
Q2 Net Income Rises More Than 200% Year-over-Year to $5.8 Million, or $0.18 per Share
Favorable Results Reflect Continued
Revenue Growth from Accelerate Commercial Banking and Expanded Customer Acquisition, Cross-Selling and Efficiency Initiatives
Second Quarter 2015 Earnings Highlights
| · | Revenues
increased $1.5 million, or 4.5%, linked quarter to $34.5 million, and $11.9 million,
or 53%, compared to Q2 2014, |
| · | Fee
income increased $1.5 million, or 21%, sequentially and $3.0 million, or 50%, year-over-year, |
| · | Net
interest margin increased 40 basis points year-over-year to 3.50%, reflecting improved
balance sheet mix particularly due to increased lending, |
| · | Adjusted
net income excluding merger costs and other adjustments1 increased
106% to $6.2 million, or $ 0.19 per diluted share, compared to $3.0 million, or $0.12
per diluted share, in Q2 2014. |
Second Quarter 2015 Growth Highlights
| · | Loans
increased $83 million or 18% annualized compared to Q1 2015, and rose 45% year-over-year.
Excluding the acquisition of The BANKshares, loans increased $238 million or 18% compared
to Q2 2014, |
| · | Total
households increased a strong 5%, annualized from Q1 and 20% compared to Q2 2014. Excluding
BANKshares customers, year-over-year household growth was 5.3%, |
1
Non-GAAP measure, see “Explanation of Certain
Unaudited Non-GAAP Financial Measures”
| · | Achieved
record levels of business and consumer lending during the quarter, reflecting success
in Accelerate Commercial Banking, as well as digitally-enabled marketing and cross-selling
initiatives. |
| · | Closed
the Grand Bancshares, Inc. acquisition and completed the conversion of Grand’s
customers over the July 17 weekend, adding approximately $190 million in deposits and
$121 million in gross loans in the attractive Palm Beach market. |
STUART,
Fla., July 23, 2015 /PRNewswire/ — Seacoast Banking Corporation of Florida (NASDAQ: SBCF) today reported results for the
second quarter of 2015. Second quarter revenue rose $1.5 million, or 4.5%, to $34.5 million compared to $33.0 million in the prior
quarter. Net income increased $3.9 million, or 203%, to $5.8 million, compared to the second quarter of 2014, and decreased slightly
from $5.9 million in the first quarter 2015. The company reported $0.18 diluted net income per common share compared with $0.07
in the second quarter last year, and $0.18 sequentially in the first quarter of 2015.
Net
income improved 177% to $11.7 million, or $0.35 per diluted common share, for the first half of 2015 from $4.2 million, or $0.16
per diluted common share, for the first half of 2014.
“Our
strategic focus on improving profitability, investing for growth and managing risk continues to yield consistent results, as demonstrated
by our second quarter performance,” said Dennis S. Hudson, III, Chairman and CEO. “Investments to expand our Accelerate
business banking platform, combined with increased digital marketing and cross sell efforts company-wide, are yielding strong
results that demonstrate our value proposition and community bank approach are resonating in the marketplace.”
“With
our success comes additional expense, reflecting our growth and investment for the future,” Hudson continued. “These
expenses include the addition of a receivables funding team from First Growth Capital (FGC), volume-related commissions, brand-based
marketing in our Orlando markets and key senior management hires.”
“We
look forward to sustained growth as we leverage our recent acquisitions, most recently welcoming the customers and customer-serving
associates from Grand Bancshares, Inc., which we successfully closed and integrated last week,” Hudson concluded.
“Revenue
increases drove the improvement in Seacoast’s profitability and reflect significant organic growth, as well as benefits
from acquisition activity,” said Stephen A. Fowle, Executive Vice President and Chief Financial Officer. “We continue
to produce positive trends in loan production, fee income, and household growth, including record loan originations and record
new household growth through the first half of the year. During the quarter, we achieved outsized loan growth and strong
fee income increases despite a seasonally slow quarter. Net interest income, taking into consideration an expected decrease in
acquired loan accretion, also showed significant continued momentum.”
FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share data) | |
2Q15 | | |
1Q15 | | |
4Q14 | | |
3Q14 | | |
2Q14 | |
| |
| | |
| | |
| | |
| | |
| |
Total
Assets | |
$ | 3,233,588 | | |
$ | 3,231,956 | | |
$ | 3,093,335 | | |
$ | 2,361,813 | | |
$ | 2,294,156 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Loans | |
| 1,937,399 | | |
| 1,854,487 | | |
| 1,821,885 | | |
| 1,391,082 | | |
| 1,335,192 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Deposits | |
| 2,605,177 | | |
| 2,609,825 | | |
| 2,416,534 | | |
| 1,808,550 | | |
| 1,805,537 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net Income
(Loss) Available to Common Shareholders | |
| 5,805 | | |
| 5,859 | | |
| (1,517 | ) | |
| 2,996 | | |
| 1,918 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Diluted Earnings Per Share | |
| 0.18 | | |
| 0.18 | | |
| (0.05 | ) | |
| 0.12 | | |
| 0.07 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Return on
Average Assets | |
| 0.72 | % | |
| 0.75 | % | |
| (0.20 | %) | |
| 0.52 | % | |
| 0.33 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net Interest
Margin | |
| 3.50 | | |
| 3.62 | | |
| 3.56 | | |
| 3.17 | | |
| 3.10 | |
Efficiency
Ratio | |
| 68.6 | | |
| 68.3 | | |
| 104.5 | | |
| 82.8 | | |
| 89.4 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Pretax, Pre-provision
Income (1) | |
$ | 10,224 | | |
$ | 9,832 | | |
($ | 2,029 | ) | |
$ | 3,832 | | |
$ | 1,938 | |
Average Diluted Shares Outstanding
(000) | |
| 33,234 | | |
| 33,136 | | |
| 33,124 | | |
| 26,026 | | |
| 25,998 | |
Adjusted Net
Income (1) | |
$ | 6,172 | | |
$ | 6,177 | | |
$ | 4,179 | | |
$ | 3,286 | | |
$ | 2,990 | |
Adjusted Diluted Earnings Per
Share (1) | |
| 0.19 | | |
| 0.19 | | |
| 0.13 | | |
| 0.13 | | |
| 0.12 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted Return
on Average Assets (1) | |
| 0.77 | % | |
| 0.79 | % | |
| 0.55 | % | |
| 0.57 | % | |
| 0.52 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted Efficiency
Ratio (1) | |
| 67.5 | | |
| 67.5 | | |
| 74.8 | | |
| 79.6 | | |
| 82.0 | |
Adjusted Pretax,
Pre-provision Income (1) | |
$ | 10,815 | | |
$ | 10,342 | | |
$ | 7,464 | | |
$ | 4,341 | | |
$ | 3,821 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Annualized
Adjusted Core Operating Expenses as a Percent of Average Assets (1) | |
| 2.91 | % | |
| 2.88 | % | |
| 3.13 | % | |
| 3.21 | % | |
| 3.24 | % |
Acquisitions Update
“Our
2014 acquisition of The BANKshares, continues to be a home run, opening the vibrant greater Orlando markets to us,” said
Hudson. “Orlando remains one of the strongest markets in Florida, and we remain bullish on this area for growth and profitability.”
“We
are also excited to welcome the customers and customer-service team members from Grand Bancshares, Inc., which we successfully
closed and integrated into our platform just last week,” Hudson continued. “Our acquisition strategy is complementing
our legacy banking business and is successfully adding new customers and opening new markets, fueling robust franchise growth.”
Florida Economic Update
“Our
Florida markets, spanning much of the central Atlantic coastline and the greater Orlando markets, are growing at very healthy
rates,” said Hudson. According to the June 2015 American Banker Magazine, “Florida is once again outgrowing the rest
of the country, and some of its thriving community banks are emerging as real contenders to be the next state flagship.”
“Nonfarm
employment rose on a year-over-year basis in 23 of Florida’s 24 metropolitan areas and was unchanged in one area, Homosassa
Springs. The largest gains continue to be in the Orlando (47,200 new jobs), Tampa-St Petersburg (32,900 jobs) and Miami (27,900
jobs) metropolitan areas. Fort Lauderdale (27,300 jobs), West Palm Beach (15,900 jobs) and Jacksonville (15,100 jobs) round out
Florida’s big 6 metro areas,” according to the U.S. Department of Labor and Wells Fargo Securities, LLC.
“Our
move into Orlando is going very well, and is providing excellent opportunities for growth,” Hudson continued. According
to the Orlando Business Journal, “It was another record quarter for Florida tourism numbers, as the Sunshine State welcomed
28.4 million visitors in the first quarter, an increase of 6.2% over the same period a year ago. (May 15, 2015) “Visit Orlando
reports that more than 62 million people visited Orlando in 2014, marking an all-time new record for the U.S. travel industry.”
(April 9, 2015) As an additional indication of the Orlando market growth, Orlando Realtors.org reported, “A leap in "normal"
transactions has boosted Orlando area home sales more than 21% over June 2014 and to its highest number —3,435— since
the Orlando Regional REALTOR® Association began recording sales. In addition to skyrocketing sales, the median price for existing
homes sold in June increased 7.73%.”
Income Statement Highlights
Net Interest Income and Margin, up
40 basis points from 2Q14, Normalizes as Expected from the First Quarter
Net
interest income for the quarter totaled $25.8 million, a $9.0 million or 54% increase from second quarter 2014 levels. Net interest
income held flat with Q1 levels despite a significant amount of excess purchase loan accretion recognized in the first quarter.
Strong loan growth (a $55.0 million average balance increase) helped offset the impact of reduced purchased loan accretion. Net
interest margin increased 40 basis points from prior year levels to 3.50%. Margin decreased twelve basis points sequentially,
also related to purchased loan accretion. Purchased loan accretion for the second quarter is near expected levels, although the
timing of such loan accretion is expected to be unpredictable.
Noninterest Income Boosted by New
Account Growth
Noninterest
income increased $3.0 million or 50% from a year ago to $8.8 million and $1.5 million or 21% above the first quarter of 2015.
Year-over-year growth in all categories of service fee income reflects strength in customer acquisition and cross sell, as well
as benefits of the successful BANKshares customer integration. Linked-quarter noninterest income improvement was fueled by continued
household growth. Service charges on deposit accounts increased $113,000 and interchange income grew $296,000 from the first quarter
of 2015. Marine finance fees also grew $295,000 or 150% from the first quarter. Adjusting for the gain on a participated loan
of $725,000 during the quarter, fee income increased $813,000 or 11%. Accounting treatment for $725,000 of discount accreted from
the participated loan required this income to be included in other operating income rather than taken through the margin.
Noninterest Expense Increases from
Core Growth and Acquisition
Seacoast’s
efficiency ratio improved to 68.6% in the second quarter of 2015 from 89.4% during the prior year. This decrease is related to
improved operating leverage, as strong revenue growth significantly outpaced expenses.
Noninterest
expense increased $3.6 million or 17% from prior year levels and $1.1 million or 5% from the first quarter 2015. Year-over-year
expense increases reflect the acquisition of The BANKshares, offset by planned expense reduction initiatives. Linked quarter increases
reflect investment in our franchise, and variable expenses related to a strong quarter of production. Notable increases include:
the acquisition of FGC during the second quarter 2015 which contributed approximately $351,000 in expense; production-driven commission
expense which added approximately $375,000; marketing expense focused on customer acquisition and for corporate branding in BANKshare’s
Orlando footprint which contributed $250,000 to the increase.
Merger
related expenses totaled $337,000 in the second quarter 2015 compared to $275,000 in the first quarter of 2015 and $1.2 million
in the second quarter 2014.
Balance Sheet Highlights
Year-over-Year Deposit Growth Reflects
Marketing Wins and Successful Acquisitions
Total
deposits increased 44.3% to $2.61 billion at June 30, 2015, from year ago levels. Core customer funding increased to $2.47 billion
at June 30, 2015, a $781.0 million increase from the second quarter of 2014. Noninterest demand deposits grew $15.1 million, or
1.9% from the first quarter and $298.6 million or 58.6% from the second quarter of 2014. As a result, noninterest demand deposits
increased to 31.0% of total deposits, up from 28.2% one year ago. Excluding the acquisition, core customer funding increased by
$333.6 million or 19.8% from one year ago and total deposits increased $283.3 million or 15.7% from one year ago. A 5% linked
quarter household growth rate was offset by seasonal deposit balance decreases.
(Dollars in thousands) | |
Second
Quarter 2015 | | |
First
Quarter 2015 | | |
Fourth Quarter 2014 | | |
Third Quarter 2014 | | |
Second Quarter 2014 | |
Customer Relationship
Funding | |
| | | |
| | | |
| | | |
| | | |
| | |
Noninterest
demand | |
$ | 808,429 | | |
$ | 793,336 | | |
$ | 725,238 | | |
$ | 522,001 | | |
$ | 509,798 | |
Interest-bearing demand | |
| 599,268 | | |
| 634,854 | | |
| 652,353 | | |
| 479,827 | | |
| 493,927 | |
Money market | |
| 621,973 | | |
| 596,600 | | |
| 450,172 | | |
| 344,726 | | |
| 335,246 | |
Savings | |
| 282,588 | | |
| 272,963 | | |
| 264,738 | | |
| 215,076 | | |
| 208,333 | |
Time
certificates of deposit | |
| 292,919 | | |
| 312,072 | | |
| 324,033 | | |
| 246,920 | | |
| 258,233 | |
Total
deposits | |
| 2,605,177 | | |
| 2,609,825 | | |
| 2,416,534 | | |
| 1,808,550 | | |
| 1,805,537 | |
Customer
sweep accounts | |
| 157,676 | | |
| 170,023 | | |
| 153,640 | | |
| 124,436 | | |
| 141,662 | |
Total core
customer funding (1) | |
| 2,469,934 | | |
| 2,467,776 | | |
| 2,246,141 | | |
| 1,686,066 | | |
| 1,688,966 | |
Demand deposit
mix (noninterest bearing) | |
| 31.0 | % | |
| 30.4 | % | |
| 30.0 | % | |
| 28.9 | % | |
| 28.2 | % |
| (1) | Total
deposits and customer sweep accounts, excluding time certificates of deposit. |
Loan Growth and Pipelines at Trailing-Four-Quarter
Highs
Total
loans were $1.94 billion at June 30, 2015, up $602.2 million from a year ago. Excluding loans acquired in the BANKshares transaction,
loans increased $237.9 million or 17.8% from the prior year’s second quarter.
Commercial
loan originations for the quarter were a strong $85.8 million, increasing $24.5 million or 39.9% over the first quarter and $32.6
million or 61.2% over the second quarter 2014. The commercial pipeline (in underwriting and approval or approved and not yet closed)
totaled $108.5 million at June 30, 2015, yet again the highest in the trailing four quarters.
Closed
residential production totaled $81.8 million compared to $55.8 million in the first quarter and $61.2 million in the second quarter
of 2014. The residential pipeline continued to climb, totaling $53.9 million at June 30, 2015 compared to $48.5 million at March
31, 2014 and $28.3 million one year ago. Consumer loan and small business originations (inclusive of lines of credit) totaled
$55.3 million in the second quarter of 2015 compared to $38.9 in the first quarter and $18.0 million one year ago.
(Dollars in thousands) | |
2Q
15 | | |
1Q15 | | |
4Q14 | | |
3Q14 | | |
2Q14 | |
| |
| | |
| | |
| | |
| | |
| |
Commercial pipeline | |
$ | 108,538 | | |
$ | 82,143 | | |
$ | 60,136 | | |
$ | 45,534 | | |
$ | 58,168 | |
Commercial loans closed | |
| 85,815 | | |
| 61,357 | | |
| 94,719 | | |
| 72,630 | | |
| 53,250 | |
Total Commercial loan originations
and pipeline | |
$ | 194,353 | | |
$ | 143,500 | | |
$ | 154,855 | | |
$ | 118,164 | | |
$ | 111,418 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Residential pipeline | |
$ | 53,902 | | |
$ | 48,485 | | |
$ | 21,351 | | |
$ | 22,588 | | |
$ | 28,345 | |
Residential loans retained | |
| 45,596 | | |
| 23,951 | | |
| 31,598 | | |
| 31,781 | | |
| 33,203 | |
Residential loans sold | |
| 36,182 | | |
| 31,896 | | |
| 26,336 | | |
| 34,228 | | |
| 27,994 | |
Total Residential loan originations
and pipeline | |
$ | 135,680 | | |
$ | 104,332 | | |
$ | 79,285 | | |
$ | 88,597 | | |
$ | 89,542 | |
Other Highlights
Credit Quality Maintains Strong Trends
The
provision for loan losses increased to $855,000 for the second quarter of 2015, up from a $1.4 million recapture in the second
quarter 2014 and a $422,000 or 97% increase from $433,000 recorded in the first quarter 2015. The second quarter provision is
attributable to strong loan growth during the quarter. The allowance for loan losses for non-acquired loans was 1.10% of total
loans, compared to 1.13% in the first quarter 2015.
Additional
highlights include:
| · | Nonperforming
loans to total loans outstanding at the end of the second quarter was 1.0%, down from
1.6% at June 30, 2014; |
| · | Nonperforming
assets to total assets declined to 0.8%, compared to 1.2% a year ago. |
Capital Ratios Continue to Improve
from Earnings Momentum
Tangible
book value and book value per share each increased by $0.13 per share from the prior quarter to $8.87 and $9.84, respectively
at the end of the second quarter. Average tangible common equity to assets was a strong 9.24% for the second quarter 2015.
Conference Call Information
Seacoast
will host a conference call on Friday, July 24, 2015 at 1:00 p.m. (Eastern Time) to discuss the earnings results. Investors may
call in (toll-free) by dialing (888) 517-2513 (passcode: 7789246; host: Dennis S. Hudson). Slides will be used during the conference
call and may be accessed at Seacoast's website at SeacoastBanking.com by selecting "Presentations" under the heading
"Investor Services." A replay of the call will be available for one month, beginning late afternoon of July 24, by dialing
(888) 843-7419 (domestic), using the passcode 7789246.
Alternatively,
individuals may listen to the live webcast of the presentation by visiting Seacoast's website at SeacoastBanking.com. The link
is located in the subsection "Presentations" under the heading "Investor Services." Beginning the afternoon
of July 24, an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast
will be available for one year.
About Seacoast Banking Corporation
of Florida (NASDAQ: SBCF)
Seacoast
Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $3.2 billion
in assets and $2.6 billion in deposits as of June 30, 2015. The Company provides integrated financial services including commercial
and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 44 traditional branches
of its locally-branded wholly-owned subsidiary bank, Seacoast Bank, and five commercial banking centers. Offices stretch from
Ft. Lauderdale, Boca Raton and West Palm Beach north through the Space Coast of Florida, into Orlando and Central Florida, and
west to Okeechobee and surrounding counties. More information about the Company is available at SeacoastBanking.com.
Sources:
http://www.americanbanker.com/magazine/2015-06-01-1074530-1.html
https://www08.wellsfargomedia.com/downloads/pdf/com/insights/economics/regional-reports/FL_Employment_07172015.pdf
http://www.floridatoday.com/story/news/local/2015/05/15/record-tourism-numbers-sunshine-state/27367565/
http://www.bizjournals.com/orlando/blog/2015/04/orlando-becomes-first-destination-to-surpass-60m.html
http://www.orlandorealtors.org/resource/resmgr/docs_market_pulse/MarketPulse072015.html
Cautionary
Notice Regarding Forward-Looking Statements
This
press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating
results, ability to realized deferred tax assets, cost savings, enhanced revenues, economic and seasonal conditions in our markets,
and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired,
as well as statements with respect to Seacoast's objectives, expectations and intentions and other statements that are not historical
facts. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking
statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and
intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may
cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance
or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking
statements.
You
can identify these forward-looking statements through our use of words such as "may," "will," "anticipate,"
"assume," "should," "support", "indicate," "would," "believe," "contemplate,"
"expect," "estimate," "continue," "further", "point to," "project,"
"could," "intend" or other similar words and expressions of the future. These forward-looking statements may
not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions,
including seasonality; governmental monetary and fiscal policies, as well as legislative, tax and regulatory changes; changes
in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits,
loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest
rate risks, sensitivities and the shape of the yield curve; the effects of competition from other commercial banks, thrifts, mortgage
banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other
mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally,
nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer
and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses. The risks
of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations;
the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming
or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as
the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes
in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and
employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships
with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and
risks inherent with entering new markets.
All
written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice,
including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December
31, 2014, under "Special Cautionary Notice Regarding Forward-looking Statements" and "Risk Factors", and otherwise
in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange
Commission, including through the SEC's Internet website at http://www.sec.gov.
Explanation of Certain Unaudited
Non-GAAP Financial Measures
This
press release contains financial information determined by methods other than Generally Accepted Accounting Principles ("GAAP").
The financial highlights provide reconciliations between GAAP net income and adjusted net income, GAAP income and adjusted pretax,
pre-provision income. 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. These measures are
also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions.
The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items
comprising these measures and that different companies might calculate these measures differently. The Company provides reconciliations
between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.
To better
evaluate its earnings, the Company removes certain items to arrive at djusted net income, Adjusted pretax, pre-provision income
and Adjusted diluted earnings per share (non-GAAP measures) as detailed in the table below:
(Dollars
in thousands except per share data) | |
Second Quarter 2015 | | |
First Quarter 2015 | | |
Fourth Quarter 2014 | | |
Third Quarter 2014 | | |
Second Quarter 2014 | |
| |
| | |
| | |
| | |
| | |
| |
Net income | |
$ | 5,805 | | |
$ | 5,859 | | |
($ | 1,517 | ) | |
$ | 2,996 | | |
$ | 1,918 | |
Severance | |
| 29 | | |
| 12 | | |
| 478 | | |
| 328 | | |
| 181 | |
Merger related charges | |
| 337 | | |
| 275 | | |
| 2,722 | | |
| 399 | | |
| 1,234 | |
Branch closure charges and costs related to expense
initiatives | |
| 0 | | |
| 0 | | |
| 4,261 | | |
| 68 | | |
| 114 | |
Marketing and brand refresh expense | |
| 0 | | |
| 0 | | |
| 697 | | |
| 0 | | |
| 0 | |
Stock compensation expense and other incentive costs
related to improved outlook | |
| 0 | | |
| 0 | | |
| 1,213 | | |
| 0 | | |
| 0 | |
Security (gains) | |
| 0 | | |
| 0 | | |
| (108 | ) | |
| (344 | ) | |
| 0 | |
Miscellaneous losses (gains) | |
| 0 | | |
| 0 | | |
| 119 | | |
| (45 | ) | |
| 144 | |
Recovery of nonaccrual loan interest | |
| 0 | | |
| 0 | | |
| 0 | | |
| (192 | ) | |
| 0 | |
Net loss on OREO and repossessed assets | |
| 53 | | |
| 81 | | |
| 9 | | |
| 156 | | |
| 92 | |
Asset dispositions expense | |
| 173 | | |
| 143 | | |
| 103 | | |
| 139 | | |
| 118 | |
Effective tax rate on adjustments | |
| (225 | ) | |
| (193 | ) | |
| (3,798 | ) | |
| (219 | ) | |
| (811 | ) |
Adjusted Net Income (1) | |
| 6,172 | | |
| 6,177 | | |
| 4,179 | | |
| 3,286 | | |
| 2,990 | |
Provision (recapture) for loan losses | |
| 855 | | |
| 433 | | |
| 118 | | |
| (1,425 | ) | |
| (1,444 | ) |
Income taxes | |
| 3,788 | | |
| 3,732 | | |
| 3,167 | | |
| 2,480 | | |
| 2,275 | |
Adjusted pretax, pre-provision
income (1) | |
$ | 10,815 | | |
$ | 10,342 | | |
$ | 7,464 | | |
$ | 4,341 | | |
$ | 3,821 | |
Adjusted earnings per diluted share (1) | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.13 | | |
$ | 0.13 | | |
$ | 0.12 | |
Average shares outstanding (000) | |
| 33,234 | | |
| 33,136 | | |
| 33,124 | | |
| 26,026 | | |
| 25,998 | |
FINANCIAL HIGHLIGHTS |
(Unaudited) |
|
07/28/15 |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
|
|
(Dollars in thousands, except share data) |
|
|
|
| |
Three Months Ended | | |
Six Months Ended | |
| |
June 30, | | |
March 31, | | |
June 30, | | |
June 30, | | |
June 30, | |
| |
2015 | | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
Summary of Earnings | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 5,805 | | |
$ | 5,859 | | |
$ | 1,918 | | |
$ | 11,664 | | |
$ | 4,217 | |
Net interest income (1) | |
| 25,788 | | |
| 25,834 | | |
| 16,779 | | |
| 51,622 | | |
| 33,056 | |
Net interest margin (1), (2) | |
| 3.50 | | |
| 3.62 | | |
| 3.10 | | |
| 3.56 | | |
| 3.09 | |
| |
| | | |
| | | |
| | | |
| | | |
| . | |
Performance Ratios | |
| | | |
| | | |
| | | |
| | | |
| | |
Return on average assets-GAAP basis (2), (3) | |
| 0.72 | % | |
| 0.75 | % | |
| 0.33 | % | |
| 0.74 | % | |
| 0.37 | % |
Return on average shareholders' equity-GAAP basis (2), (3) | |
| 7.13 | | |
| 7.42 | | |
| 3.25 | | |
| 7.27 | | |
| 3.63 | |
Return on average tangible shareholders' equity-GAAP basis (2), (3), (4) | |
| 8.20 | | |
| 8.51 | | |
| 3.47 | | |
| 8.35 | | |
| 3.86 | |
Efficiency ratio (5) | |
| 68.57 | | |
| 68.33 | | |
| 89.42 | | |
| 68.45 | | |
| 86.91 | |
Noninterest income to total revenue | |
| 25.63 | | |
| 22.13 | | |
| 26.06 | | |
| 23.92 | | |
| 25.80 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Per Share Data | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income (loss) diluted-GAAP basis | |
$ | 0.18 | | |
$ | 0.18 | | |
$ | 0.07 | | |
$ | 0.35 | | |
$ | 0.16 | |
Net income (loss) basic-GAAP basis | |
| 0.18 | | |
| 0.18 | | |
| 0.07 | | |
| 0.35 | | |
| 0.16 | |
Book value per share common | |
| 9.84 | | |
| 9.71 | | |
| 9.02 | | |
| 9.84 | | |
| 9.02 | |
Tangible book value per share | |
| 8.87 | | |
| 8.74 | | |
| 9.00 | | |
| 8.87 | | |
| 9.00 | |
Cash dividends declared | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | |
| (1) | Calculated on a fully taxable equivalent basis using amortized cost. |
| (2) | These ratios are stated on an annualized basis and are not necessarily indicative of future periods. |
| (3) | The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses) because the unrealized gains
(losses) are not included in net income (loss). |
| (4) | The Company defines tangible common equity as total shareholder's equity less intangible assets. |
| (5) | Defined as (noninterest expense less foreclosed property expense and amortization of intangibles) divided by net operating
revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains). |
FINANCIAL HIGHLIGHTS |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
| |
June 30, | | |
March 31, | | |
June 30, | |
(Dollars in thousands, except share data) | |
2015 | | |
2015 | | |
2014 | |
| |
| | |
| | |
| |
Selected Financial Data | |
| | | |
| | | |
| | |
Total assets | |
$ | 3,233,588 | | |
$ | 3,231,956 | | |
$ | 2,294,156 | |
Securities available for sale (at fair value) | |
| 762,086 | | |
| 730,232 | | |
| 518,353 | |
Securities held for investment (at amortized cost) | |
| 214,777 | | |
| 223,061 | | |
| 156,498 | |
Net loans | |
| 1,918,608 | | |
| 1,836,766 | | |
| 1,317,052 | |
Deposits | |
| 2,605,177 | | |
| 2,609,825 | | |
| 1,805,537 | |
Total shareholders' equity | |
| 326,856 | | |
| 321,844 | | |
| 234,439 | |
| |
| | | |
| | | |
| | |
Average Balances (Year-to-Date) | |
| | | |
| | | |
| | |
Total average assets | |
$ | 3,188,334 | | |
$ | 3,151,132 | | |
$ | 2,295,983 | |
Less: intangible assets | |
| 31,707 | | |
| 31,221 | | |
| 525 | |
Total average tangible assets | |
$ | 3,156,627 | | |
$ | 3,119,911 | | |
$ | 2,295,458 | |
| |
| | | |
| | | |
| | |
Total average equity | |
$ | 323,359 | | |
$ | 320,346 | | |
$ | 234,214 | |
Less: intangible assets | |
| 31,707 | | |
| 31,221 | | |
| 525 | |
Total average tangible equity | |
$ | 291,652 | | |
$ | 289,125 | | |
$ | 233,689 | |
| |
| | | |
| | | |
| | |
Credit Analysis | |
| | | |
| | | |
| | |
Net charge-offs (recoveries) year-to-date - non-acquired loans | |
$ | (621 | ) | |
$ | (263 | ) | |
$ | (251 | ) |
Net charge-offs year-to-date - acquired loans | |
| 189 | | |
| 46 | | |
| - | |
Total net charge-offs (recoveries) year-to-date | |
$ | (432 | ) | |
$ | (217 | ) | |
$ | (251 | ) |
| |
| | | |
| | | |
| | |
Net charge-offs (recoveries) to average loans (annualized) - non-acquired loans | |
| (0.07 | )% | |
| (0.06 | )% | |
| (0.04 | )% |
Net charge-offs to average loans (annualized) - acquired loans | |
| 0.02 | | |
| 0.01 | | |
| - | |
Total net charge-offs (recoveries) to average loans (annualized) | |
| (0.05 | ) | |
| (0.05 | ) | |
| (0.04 | ) |
| |
| | | |
| | | |
| | |
Loan loss provision (recapture) year-to-date - non-acquired loans | |
$ | 563 | | |
$ | 292 | | |
$ | (2,179 | ) |
Loan loss provision year-to-date - acquired loans | |
| 725 | | |
| 141 | | |
| - | |
Total loan loss provision (recapture) year-to-date | |
$ | 1,288 | | |
$ | 433 | | |
$ | (2,179 | ) |
| |
| | | |
| | | |
| | |
Allowance to loans at end of period - non-acquired loans | |
| 1.10 | % | |
| 1.13 | % | |
| 1.36 | % |
Discount for credit losses to acquired loans at end of period | |
| 3.32 | | |
| 3.56 | | |
| - | |
| |
| | | |
| | | |
| | |
Nonperforming loans - non-acquired loans | |
$ | 15,054 | | |
$ | 16,860 | | |
$ | 21,745 | |
Nonperforming loans - acquired loans | |
| 4,543 | | |
| 4,196 | | |
| - | |
Other real estate owned - non-acquired | |
| 4,855 | | |
| 4,738 | | |
| 6,198 | |
Other real estate owned - acquired | |
| 1,053 | | |
| 1,431 | | |
| - | |
Total nonperforming assets | |
$ | 25,505 | | |
$ | 27,225 | | |
$ | 27,943 | |
| |
| | | |
| | | |
| | |
Restructured loans (accruing) | |
$ | 23,441 | | |
$ | 23,847 | | |
$ | 28,157 | |
| |
| | | |
| | | |
| | |
Purchased noncredit impaired loans | |
$ | 275,964 | | |
$ | 296,839 | | |
$ | - | |
Purchased credit impaired loans | |
| 6,562 | | |
| 7,119 | | |
| - | |
Total acquired loans | |
$ | 282,526 | | |
$ | 303,958 | | |
$ | - | |
| |
| | | |
| | | |
| | |
Nonperforming loans to loans at end of period - non-acquired loans | |
| 0.78 | % | |
| 0.91 | % | |
| 1.63 | % |
Nonperforming loans to loans at end of period - acquired loans | |
| 0.23 | | |
| 0.23 | | |
| - | |
Total nonperforming loans to loans at end of period | |
| 1.01 | | |
| 1.14 | | |
| 1.63 | |
| |
| | | |
| | | |
| | |
Nonperforming assets to total assets - non-acquired | |
| 0.62 | % | |
| 0.67 | % | |
| 1.22 | % |
Nonperforming assets to total assets - aquired | |
| 0.17 | | |
| 0.17 | | |
| - | |
Total nonperforming assets to total assets | |
| 0.79 | | |
| 0.84 | | |
| 1.22 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
Three Months Ended | | |
Six Months Ended | |
| |
June 30, | | |
June 30, | |
(Dollars in thousands, except per share data) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
| | |
| | |
| | |
| |
Interest on securities: | |
| | | |
| | | |
| | | |
| | |
Taxable | |
$ | 4,977 | | |
$ | 3,629 | | |
$ | 9,875 | | |
$ | 7,063 | |
Nontaxable | |
| 147 | | |
| 9 | | |
| 297 | | |
| 21 | |
Interest and fees on loans | |
| 21,988 | | |
| 14,103 | | |
| 44,009 | | |
| 27,901 | |
Interest on federal funds sold and other investments | |
| 249 | | |
| 246 | | |
| 498 | | |
| 514 | |
Total Interest Income | |
| 27,361 | | |
| 17,987 | | |
| 54,679 | | |
| 35,499 | |
| |
| | | |
| | | |
| | | |
| | |
Interest on deposits | |
| 524 | | |
| 184 | | |
| 925 | | |
| 378 | |
Interest on time certificates | |
| 321 | | |
| 386 | | |
| 668 | | |
| 793 | |
Interest on borrowed money | |
| 850 | | |
| 692 | | |
| 1,710 | | |
| 1,382 | |
Total Interest Expense | |
| 1,695 | | |
| 1,262 | | |
| 3,303 | | |
| 2,553 | |
| |
| | | |
| | | |
| | | |
| | |
Net Interest Income | |
| 25,666 | | |
| 16,725 | | |
| 51,376 | | |
| 32,946 | |
Provision (recapture) for loan losses | |
| 855 | | |
| (1,444 | ) | |
| 1,288 | | |
| (2,179 | ) |
Net Interest Income After Provision for Loan Losses | |
| 24,811 | | |
| 18,169 | | |
| 50,088 | | |
| 35,125 | |
| |
| | | |
| | | |
| | | |
| | |
Noninterest income: | |
| | | |
| | | |
| | | |
| | |
Service charges on deposit accounts | |
| 2,115 | | |
| 1,484 | | |
| 4,117 | | |
| 2,991 | |
Trust fees | |
| 759 | | |
| 703 | | |
| 1,560 | | |
| 1,374 | |
Mortgage banking fees | |
| 1,032 | | |
| 855 | | |
| 2,120 | | |
| 1,516 | |
Brokerage commissions and fees | |
| 576 | | |
| 410 | | |
| 1,017 | | |
| 789 | |
Marine finance fees | |
| 492 | | |
| 340 | | |
| 689 | | |
| 594 | |
Interchange income | |
| 2,033 | | |
| 1,514 | | |
| 3,770 | | |
| 2,917 | |
Other deposit based EFT fees | |
| 96 | | |
| 83 | | |
| 210 | | |
| 181 | |
BOLI income | |
| 334 | | |
| 0 | | |
| 664 | | |
| 0 | |
Gain on participated loan | |
| 725 | | |
| 0 | | |
| 725 | | |
| 0 | |
Other | |
| 684 | | |
| 507 | | |
| 1,282 | | |
| 1,092 | |
| |
| 8,846 | | |
| 5,896 | | |
| 16,154 | | |
| 11,454 | |
Securities gains, net | |
| 0 | | |
| 0 | | |
| 0 | | |
| 17 | |
Total Noninterest Income | |
| 8,846 | | |
| 5,896 | | |
| 16,154 | | |
| 11,471 | |
| |
| | | |
| | | |
| | | |
| | |
Noninterest expenses: | |
| | | |
| | | |
| | | |
| | |
Salaries and wages | |
| 9,301 | | |
| 7,768 | | |
| 18,090 | | |
| 15,392 | |
Employee benefits | |
| 2,541 | | |
| 2,081 | | |
| 4,956 | | |
| 4,263 | |
Outsourced data processing costs | |
| 2,234 | | |
| 1,811 | | |
| 4,418 | | |
| 3,506 | |
Telephone / data lines | |
| 443 | | |
| 306 | | |
| 939 | | |
| 599 | |
Occupancy | |
| 2,011 | | |
| 1,888 | | |
| 4,034 | | |
| 3,726 | |
Furniture and equipment | |
| 819 | | |
| 604 | | |
| 1,551 | | |
| 1,175 | |
Marketing | |
| 1,226 | | |
| 675 | | |
| 2,201 | | |
| 1,488 | |
Legal and professional fees | |
| 1,590 | | |
| 2,272 | | |
| 3,253 | | |
| 3,213 | |
FDIC assessments | |
| 520 | | |
| 411 | | |
| 1,109 | | |
| 797 | |
Amortization of intangibles | |
| 315 | | |
| 196 | | |
| 630 | | |
| 392 | |
Asset dispositions expense | |
| 173 | | |
| 118 | | |
| 316 | | |
| 246 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss on other real estate owned and repossessed assets | |
| 53 | | |
| 92 | | |
| 134 | | |
| 145 | |
Other | |
| 3,062 | | |
| 2,461 | | |
| 5,843 | | |
| 4,524 | |
Total Noninterest Expenses | |
| 24,288 | | |
| 20,683 | | |
| 47,474 | | |
| 39,466 | |
| |
| | | |
| | | |
| | | |
| | |
Income Before Income Taxes | |
| 9,369 | | |
| 3,382 | | |
| 18,768 | | |
| 7,130 | |
Income taxes | |
| 3,564 | | |
| 1,464 | | |
| 7,104 | | |
| 2,913 | |
| |
| | | |
| | | |
| | | |
| | |
Net Income | |
$ | 5,805 | | |
$ | 1,918 | | |
$ | 11,664 | | |
$ | 4,217 | |
| |
| | | |
| | | |
| | | |
| | |
Per share of common stock: | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Net income diluted | |
$ | 0.18 | | |
$ | 0.07 | | |
$ | 0.35 | | |
$ | 0.16 | |
Net income basic | |
| 0.18 | | |
| 0.07 | | |
| 0.35 | | |
| 0.16 | |
Cash dividends declared | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | |
| |
| | | |
| | | |
| | | |
| | |
Average diluted shares outstanding | |
| 33,233,508 | | |
| 25,998,121 | | |
| 33,184,764 | | |
| 25,828,391 | |
Average basic shares outstanding | |
| 32,978,006 | | |
| 25,826,825 | | |
| 32,971,670 | | |
| 25,659,159 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
QUARTER | |
| |
2015 | | |
2014 | |
(Dollars in thousands) | |
Second | | |
First | | |
Fourth | | |
Third | | |
Second | |
| |
| | |
| | |
| | |
| | |
| |
Interest on securities: | |
| | | |
| | | |
| | | |
| | | |
| | |
Taxable | |
$ | 4,977 | | |
$ | 4,898 | | |
$ | 4,728 | | |
$ | 3,657 | | |
$ | 3,629 | |
Nontaxable | |
| 147 | | |
| 150 | | |
| 182 | | |
| 8 | | |
| 9 | |
Interest and fees on loans | |
| 21,988 | | |
| 22,021 | | |
| 21,070 | | |
| 14,615 | | |
| 14,103 | |
Interest on federal funds sold and other investments | |
| 249 | | |
| 249 | | |
| 292 | | |
| 211 | | |
| 246 | |
Total Interest Income | |
| 27,361 | | |
| 27,318 | | |
| 26,272 | | |
| 18,491 | | |
| 17,987 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Interest on deposits | |
| 524 | | |
| 401 | | |
| 297 | | |
| 189 | | |
| 184 | |
Interest on time certificates | |
| 321 | | |
| 347 | | |
| 375 | | |
| 370 | | |
| 386 | |
Interest on borrowed money | |
| 850 | | |
| 860 | | |
| 867 | | |
| 704 | | |
| 692 | |
Total Interest Expense | |
| 1,695 | | |
| 1,608 | | |
| 1,539 | | |
| 1,263 | | |
| 1,262 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net Interest Income | |
| 25,666 | | |
| 25,710 | | |
| 24,733 | | |
| 17,228 | | |
| 16,725 | |
Provision (recapture) for loan losses | |
| 855 | | |
| 433 | | |
| 118 | | |
| (1,425 | ) | |
| (1,444 | ) |
Net Interest Income After Provision for Loan Losses | |
| 24,811 | | |
| 25,277 | | |
| 24,615 | | |
| 18,653 | | |
| 18,169 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Noninterest income: | |
| | | |
| | | |
| | | |
| | | |
| | |
Service charges on deposit accounts | |
| 2,115 | | |
| 2,002 | | |
| 2,208 | | |
| 1,753 | | |
| 1,484 | |
Trust fees | |
| 759 | | |
| 801 | | |
| 795 | | |
| 817 | | |
| 703 | |
Mortgage banking fees | |
| 1,032 | | |
| 1,088 | | |
| 716 | | |
| 825 | | |
| 855 | |
Brokerage commissions and fees | |
| 576 | | |
| 441 | | |
| 417 | | |
| 408 | | |
| 410 | |
Marine finance fees | |
| 492 | | |
| 197 | | |
| 445 | | |
| 281 | | |
| 340 | |
Interchange income | |
| 2,033 | | |
| 1,737 | | |
| 1,603 | | |
| 1,452 | | |
| 1,514 | |
Other deposit based EFT fees | |
| 96 | | |
| 114 | | |
| 92 | | |
| 70 | | |
| 83 | |
BOLI income | |
| 334 | | |
| 330 | | |
| 252 | | |
| 0 | | |
| 0 | |
Gain on Participated Loan | |
| 725 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Other | |
| 684 | | |
| 598 | | |
| 613 | | |
| 543 | | |
| 507 | |
| |
| 8,846 | | |
| 7,308 | | |
| 7,141 | | |
| 6,149 | | |
| 5,896 | |
Securities gains, net | |
| 0 | | |
| 0 | | |
| 108 | | |
| 344 | | |
| 0 | |
Total Noninterest Income | |
| 8,846 | | |
| 7,308 | | |
| 7,249 | | |
| 6,493 | | |
| 5,896 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Noninterest expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
Salaries and wages | |
| 9,301 | | |
| 8,789 | | |
| 11,676 | | |
| 8,064 | | |
| 7,768 | |
Employee benefits | |
| 2,541 | | |
| 2,415 | | |
| 2,461 | | |
| 2,049 | | |
| 2,081 | |
Outsourced data processing costs | |
| 2,234 | | |
| 2,184 | | |
| 3,506 | | |
| 1,769 | | |
| 1,811 | |
Telephone / data lines | |
| 443 | | |
| 496 | | |
| 419 | | |
| 313 | | |
| 306 | |
Occupancy | |
| 2,011 | | |
| 2,023 | | |
| 2,325 | | |
| 1,879 | | |
| 1,888 | |
Furniture and equipment | |
| 819 | | |
| 732 | | |
| 732 | | |
| 628 | | |
| 604 | |
Marketing | |
| 1,226 | | |
| 975 | | |
| 1,163 | | |
| 925 | | |
| 675 | |
Legal and professional fees | |
| 1,590 | | |
| 1,663 | | |
| 2,555 | | |
| 1,103 | | |
| 2,272 | |
FDIC assessments | |
| 520 | | |
| 589 | | |
| 476 | | |
| 387 | | |
| 411 | |
Amortization of intangibles | |
| 315 | | |
| 315 | | |
| 446 | | |
| 195 | | |
| 196 | |
Asset dispositions expense | |
| 173 | | |
| 143 | | |
| 103 | | |
| 139 | | |
| 118 | |
Branch closures and branding | |
| 0 | | |
| 0 | | |
| 4,958 | | |
| 0 | | |
| 0 | |
Net loss on other real estate owned and repossessed assets | |
| 53 | | |
| 81 | | |
| 9 | | |
| 156 | | |
| 92 | |
Other | |
| 3,062 | | |
| 2,781 | | |
| 3,182 | | |
| 2,282 | | |
| 2,461 | |
Total Noninterest Expenses | |
| 24,288 | | |
| 23,186 | | |
| 34,011 | | |
| 19,889 | | |
| 20,683 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Income Before Income Taxes | |
| 9,369 | | |
| 9,399 | | |
| (2,147 | ) | |
| 5,257 | | |
| 3,382 | |
Income taxes | |
| 3,564 | | |
| 3,540 | | |
| (630 | ) | |
| 2,261 | | |
| 1,464 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net Income | |
$ | 5,805 | | |
$ | 5,859 | | |
$ | (1,517 | ) | |
$ | 2,996 | | |
$ | 1,918 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Per share of common stock: | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net income diluted | |
$ | 0.18 | | |
$ | 0.18 | | |
$ | (0.05 | ) | |
$ | 0.12 | | |
$ | 0.07 | |
Net income basic | |
| 0.18 | | |
| 0.18 | | |
| (0.05 | ) | |
| 0.12 | | |
| 0.07 | |
Cash dividends declared | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Average diluted shares outstanding | |
| 33,233,508 | | |
| 33,135,618 | | |
| 33,123,525 | | |
| 26,025,693 | | |
| 25,998,121 | |
Average basic shares outstanding | |
| 32,978,006 | | |
| 32,971,444 | | |
| 32,888,612 | | |
| 25,887,591 | | |
| 25,826,825 | |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
June 30, | | |
December 31, | | |
June 30, | |
(Dollars in thousands, except share data) | |
2015 | | |
2014 | | |
2014 | |
| |
| | |
| | |
| |
Assets | |
| | | |
| | | |
| | |
Cash and due from banks | |
$ | 86,904 | | |
$ | 64,411 | | |
$ | 40,175 | |
Interest bearing deposits with other banks | |
| 7,844 | | |
| 36,128 | | |
| 113,855 | |
Total Cash and Cash Equivalents | |
| 94,748 | | |
| 100,539 | | |
| 154,030 | |
| |
| | | |
| | | |
| | |
Securities: | |
| | | |
| | | |
| | |
Available for sale (at fair value) | |
| 762,086 | | |
| 741,375 | | |
| 518,353 | |
Held for investment (at amortized cost) | |
| 214,777 | | |
| 207,904 | | |
| 156,498 | |
Total Securities | |
| 976,863 | | |
| 949,279 | | |
| 674,851 | |
| |
| | | |
| | | |
| | |
Loans available for sale | |
| 19,656 | | |
| 12,078 | | |
| 18,129 | |
| |
| | | |
| | | |
| | |
Loans, net of deferred costs | |
| 1,937,399 | | |
| 1,821,885 | | |
| 1,335,192 | |
Less: Allowance for loan losses | |
| (18,791 | ) | |
| (17,071 | ) | |
| (18,140 | ) |
Net Loans | |
| 1,918,608 | | |
| 1,804,814 | | |
| 1,317,052 | |
| |
| | | |
| | | |
| | |
Bank premises and equipment, net | |
| 50,028 | | |
| 45,086 | | |
| 34,653 | |
Other real estate owned | |
| 5,908 | | |
| 7,462 | | |
| 6,198 | |
Other intangible assets | |
| 6,824 | | |
| 7,454 | | |
| 326 | |
Goodwill | |
| 25,211 | | |
| 25,309 | | |
| 0 | |
Bank owned life insurance | |
| 36,291 | | |
| 35,679 | | |
| 0 | |
Other assets | |
| 99,451 | | |
| 105,635 | | |
| 88,917 | |
| |
$ | 3,233,588 | | |
$ | 3,093,335 | | |
$ | 2,294,156 | |
| |
| | | |
| | | |
| | |
Liabilities and Shareholders' Equity | |
| | | |
| | | |
| | |
Liabilities | |
| | | |
| | | |
| | |
Deposits | |
| | | |
| | | |
| | |
Noninterest demand | |
$ | 808,429 | | |
$ | 725,238 | | |
$ | 509,798 | |
Interest-bearing demand | |
| 599,268 | | |
| 652,353 | | |
| 493,927 | |
Savings | |
| 282,588 | | |
| 264,738 | | |
| 208,333 | |
Money market | |
| 621,973 | | |
| 450,172 | | |
| 335,246 | |
Other time certificates | |
| 158,091 | | |
| 173,247 | | |
| 144,001 | |
Brokered time certificates | |
| 8,237 | | |
| 7,034 | | |
| 8,040 | |
Time certificates of $100,000 or more | |
| 126,591 | | |
| 143,752 | | |
| 106,192 | |
Total Deposits | |
| 2,605,177 | | |
| 2,416,534 | | |
| 1,805,537 | |
| |
| | | |
| | | |
| | |
Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days | |
| 172,676 | | |
| 233,640 | | |
| 141,662 | |
Borrowed funds | |
| 50,000 | | |
| 50,000 | | |
| 50,000 | |
Subordinated debt | |
| 64,670 | | |
| 64,583 | | |
| 53,610 | |
Other liabilities | |
| 14,209 | | |
| 15,927 | | |
| 8,908 | |
| |
| 2,906,732 | | |
| 2,780,684 | | |
| 2,059,717 | |
| |
| | | |
| | | |
| | |
Shareholders' Equity | |
| | | |
| | | |
| | |
Common stock | |
| 3,300 | | |
| 3,300 | | |
| 2,599 | |
Additional paid in capital | |
| 380,553 | | |
| 379,249 | | |
| 302,088 | |
Accumulated deficit | |
| (53,336 | ) | |
| (65,000 | ) | |
| (66,478 | ) |
Treasury stock | |
| (64 | ) | |
| (71 | ) | |
| (54 | ) |
| |
| 330,453 | | |
| 317,478 | | |
| 238,155 | |
Accumulated other comprehensive (loss), net | |
| (3,597 | ) | |
| (4,827 | ) | |
| (3,716 | ) |
Total Shareholders' Equity | |
| 326,856 | | |
| 312,651 | | |
| 234,439 | |
| |
$ | 3,233,588 | | |
$ | 3,093,335 | | |
$ | 2,294,156 | |
| |
| | | |
| | | |
| | |
Common Shares Outstanding | |
| 33,220,511 | | |
| 33,136,592 | | |
| 25,998,823 | |
Note: The balance sheet at December 31, 2014 has been derived
from the audited financial statements at that date.
CONSOLIDATED QUARTERLY FINANCIAL DATA |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
QUARTERS | |
| |
2015 | | |
2014 | |
(Dollars in thousands, except per share data) | |
Second | | |
First | | |
Fourth | | |
Third | | |
Second | |
Net income (loss) | |
$ | 5,805 | | |
$ | 5,859 | | |
$ | (1,517 | ) | |
$ | 2,996 | | |
$ | 1,918 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Operating Ratios | |
| | | |
| | | |
| | | |
| | | |
| | |
Return on average assets-GAAP basis (2),(3) | |
| 0.72 | % | |
| 0.75 | % | |
| (0.20 | )% | |
| 0.52 | % | |
| 0.33 | % |
Return on average tangible assets (2),(3),(4) | |
| 0.75 | | |
| 0.79 | | |
| (0.16 | ) | |
| 0.54 | | |
| 0.36 | |
Return on average shareholders' equity-GAAP basis (2),(3) | |
| 7.13 | | |
| 7.42 | | |
| (1.89 | ) | |
| 4.97 | | |
| 3.25 | |
Efficiency ratio (5) | |
| 68.57 | | |
| 68.33 | | |
| 104.46 | | |
| 82.78 | | |
| 89.42 | |
Noninterest income to total revenue | |
| 25.63 | | |
| 22.13 | | |
| 22.40 | | |
| 26.30 | | |
| 26.06 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net interest margin (1),(2) | |
| 3.50 | | |
| 3.62 | | |
| 3.56 | | |
| 3.17 | | |
| 3.10 | |
Average equity to average assets | |
| 10.12 | | |
| 10.17 | | |
| 10.51 | | |
| 10.37 | | |
| 10.27 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Credit Analysis Excluding Acquired Loans | |
| | | |
| | | |
| | | |
| | | |
| | |
Net charge-offs (recoveries) - non-acquired loans | |
$ | (358 | ) | |
$ | (263 | ) | |
$ | 618 | | |
$ | (856 | ) | |
$ | (112 | ) |
Net charge-offs - acquired loans | |
| 143 | | |
| 46 | | |
| - | | |
| - | | |
| - | |
Total net charge-offs (recoveries) | |
$ | (215 | ) | |
$ | (217 | ) | |
$ | 618 | | |
$ | (856 | ) | |
$ | (112 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net charge-offs (recoveries) to average loans - non-acquired loans | |
| (0.08 | )% | |
| (0.06 | )% | |
| 0.14 | % | |
| (0.25 | )% | |
| (0.03 | )% |
Net charge-offs (recoveries) to average loans - acquired loans | |
| 0.03 | | |
| 0.01 | | |
| - | | |
| - | | |
| - | |
Toral net charge-offs (recoveries) to average loans | |
| (0.05 | ) | |
| (0.05 | ) | |
| 0.14 | | |
| (0.25 | ) | |
| (0.03 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Loan loss provision (recapture) - non-acquired loans | |
$ | 271 | | |
$ | 292 | | |
$ | 54 | | |
$ | (1,425 | ) | |
$ | (1,444 | ) |
Loan loss provision (recapture) - acquired loans | |
| 584 | | |
| 141 | | |
| 64 | | |
| - | | |
| - | |
Total loan loss provision (recapture) | |
$ | 855 | | |
$ | 433 | | |
$ | 118 | | |
$ | (1,425 | ) | |
$ | (1,444 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Allowance to loans at end of period - non-acquired loans | |
| 1.10 | % | |
| 1.13 | % | |
| 1.14 | % | |
| 1.26 | % | |
| 1.36 | % |
Discount for credit losses to acquired loans at end of period | |
| 3.32 | | |
| 3.56 | | |
| 3.56 | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Nonperforming loans - non-acquired loans | |
$ | 15,054 | | |
$ | 16,860 | | |
$ | 18,563 | | |
$ | 18,942 | | |
$ | 21,745 | |
Nonperforming loans - acquired loans | |
| 4,543 | | |
| 4,196 | | |
| 2,577 | | |
| - | | |
| - | |
Other real estate owned - non-acquired | |
| 4,855 | | |
| 4,738 | | |
| 5,567 | | |
| 5,018 | | |
| 6,198 | |
Other real estate owned - acquired | |
| 1,053 | | |
| 1,431 | | |
| 1,895 | | |
| - | | |
| - | |
Total nonperforming assets | |
$ | 25,505 | | |
$ | 27,225 | | |
$ | 28,602 | | |
$ | 23,960 | | |
$ | 27,943 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Restructured loans (accruing) | |
$ | 23,441 | | |
$ | 23,847 | | |
$ | 24,997 | | |
$ | 28,969 | | |
$ | 28,157 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Purchased noncredit impaired loans | |
$ | 275,964 | | |
$ | 296,839 | | |
$ | 326,066 | | |
$ | - | | |
$ | - | |
Purchased credit impaired loans | |
| 6,562 | | |
| 7,119 | | |
| 7,814 | | |
| - | | |
| - | |
Total acquired loans | |
$ | 282,526 | | |
$ | 303,958 | | |
$ | 333,880 | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Nonperforming loans to loans at end of period - non-acquired loans | |
| 0.78 | % | |
| 0.91 | % | |
| 1.02 | % | |
| 1.36 | % | |
| 1.63 | % |
Nonperforming loans to loans at end of period - acquired loans | |
| 0.23 | | |
| 0.23 | | |
| 0.14 | | |
| - | | |
| - | |
Total nonperforming loans to loans at end of period | |
| 1.01 | | |
| 1.14 | | |
| 1.16 | | |
| 1.36 | | |
| 1.63 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Nonperforming assets to total assets - non-acquired | |
| 0.62 | % | |
| 0.67 | % | |
| 0.78 | % | |
| 1.01 | % | |
| 1.22 | % |
Nonperforming assets to total assets - acquired | |
| 0.17 | | |
| 0.17 | | |
| 0.14 | | |
| - | | |
| - | |
Total nonperforming assets to total assets | |
| 0.79 | | |
| 0.84 | | |
| 0.92 | | |
| 1.01 | | |
| 1.22 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Per Share Common Stock | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income (loss) diluted-GAAP basis | |
$ | 0.18 | | |
$ | 0.18 | | |
$ | (0.05 | ) | |
$ | 0.12 | | |
$ | 0.07 | |
Net income (loss) basic-GAAP basis | |
| 0.18 | | |
| 0.18 | | |
| (0.05 | ) | |
| 0.12 | | |
| 0.07 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Cash dividends declared | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | |
Book value per share common | |
| 9.84 | | |
| 9.71 | | |
| 9.44 | | |
| 9.07 | | |
| 9.02 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Average Balances | |
| | | |
| | | |
| | | |
| | | |
| | |
Total average assets | |
$ | 3,225,127 | | |
$ | 3,151,132 | | |
$ | 3,037,061 | | |
$ | 2,305,799 | | |
$ | 2,304,870 | |
Less: Intangible assets | |
| 32,188 | | |
| 31,221 | | |
| 33,803 | | |
| 237 | | |
| 422 | |
Total average tangible assets | |
$ | 3,192,939 | | |
$ | 3,119,911 | | |
$ | 3,003,258 | | |
$ | 2,305,562 | | |
$ | 2,304,448 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total average equity | |
$ | 326,338 | | |
$ | 320,346 | | |
$ | 319,233 | | |
$ | 239,031 | | |
$ | 236,632 | |
Less: Intangible assets | |
| 32,188 | | |
| 31,221 | | |
| 33,803 | | |
| 237 | | |
| 422 | |
Total average tangible equity | |
$ | 294,150 | | |
$ | 289,125 | | |
$ | 285,430 | | |
$ | 238,794 | | |
$ | 236,210 | |
| (1) | Calculated on a fully taxable equivalent basis using amortized cost. |
| (2) | These ratios are stated on an annualized basis and are not necessarily indicative of future periods. |
| (3) | The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses), because the unrealized gains
(losses) are not included in net income (loss). |
| (4) | The Company believes that return on average assets and equity excluding the impacts of noncash amortization expense on intangible
assets is a better measurement of the Company's trend in earnings growth. |
| (5) | Defined as (noninterest expense less foreclosed property expense and amortization of intangibles) divided by net operating
revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains). |
CONSOLIDATED QUARTERLY FINANCIAL DATA |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
June 30, | | |
December 31, | | |
June 30, | |
SECURITIES | |
2015 | | |
2014 | | |
2014 | |
| |
| | |
| | |
| |
U.S. Treasury and U.S. Government Agencies | |
$ | 3,843 | | |
$ | 3,899 | | |
$ | 100 | |
Mortgage-backed | |
| 558,561 | | |
| 587,933 | | |
| 479,720 | |
Collateralized loan obligations | |
| 124,241 | | |
| 125,225 | | |
| 32,260 | |
Obligations of states and political subdivisions | |
| 22,873 | | |
| 24,318 | | |
| 6,273 | |
Corporates | |
| 24,213 | | |
| 0 | | |
| 0 | |
CMBS | |
| 20,587 | | |
| 0 | | |
| 0 | |
Other | |
| 7,768 | | |
| 0 | | |
| 0 | |
Securities Available for Sale | |
| 762,086 | | |
| 741,375 | | |
| 518,353 | |
| |
| | | |
| | | |
| | |
Mortgage-backed | |
| 173,477 | | |
| 182,076 | | |
| 156,498 | |
Collateralized loan obligations | |
| 41,300 | | |
| 25,828 | | |
| 0 | |
Securities Held for Investment | |
| 214,777 | | |
| 207,904 | | |
| 156,498 | |
Total Securities | |
$ | 976,863 | | |
$ | 949,279 | | |
$ | 674,851 | |
| |
June 30, | | |
December 31, | | |
June 30, | |
LOANS | |
2015 | | |
2014 | | |
2014 | |
| |
| | |
| | |
| |
Construction and land development | |
$ | 95,178 | | |
$ | 87,036 | | |
$ | 57,393 | |
Real estate mortgage | |
| 1,588,105 | | |
| 1,524,044 | | |
| 1,145,013 | |
Installment loans to individuals | |
| 62,913 | | |
| 52,897 | | |
| 45,241 | |
Commercial and financial | |
| 190,325 | | |
| 157,396 | | |
| 87,285 | |
Other loans | |
| 878 | | |
| 512 | | |
| 260 | |
Total Loans | |
$ | 1,937,399 | | |
$ | 1,821,885 | | |
$ | 1,335,192 | |
AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES (1) |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
2015 | | |
2014 | | |
| | |
| |
| |
Second
Quarter | | |
First Quarter | | |
Second Quarter | |
| |
Average | | |
| | |
Yield/ | | |
Average | | |
| | |
Yield/ | | |
Average | | |
| | |
Yield/ | |
(Dollars in thousands) | |
Balance | | |
Interest | | |
Rate | | |
Balance | | |
Interest | | |
Rate | | |
Balance | | |
Interest | | |
Rate | |
Assets | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Earning assets: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Securities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Taxable | |
$ | 957,374 | | |
$ | 4,977 | | |
| 2.08 | % | |
$ | 939,015 | | |
$ | 4,898 | | |
| 2.09 | % | |
$ | 677,600 | | |
$ | 3,630 | | |
| 2.14 | % |
Nontaxable | |
| 15,311 | | |
| 225 | | |
| 5.87 | | |
| 15,617 | | |
| 230 | | |
| 5.89 | | |
| 827 | | |
| 14 | | |
| 6.77 | |
Total
Securities | |
| 972,685 | | |
| 5,202 | | |
| 2.14 | | |
| 954,632 | | |
| 5,128 | | |
| 2.15 | | |
| 678,427 | | |
| 3,644 | | |
| 2.15 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Federal funds sold and
other investments | |
| 79,031 | | |
| 249 | | |
| 1.26 | | |
| 92,934 | | |
| 249 | | |
| 1.09 | | |
| 153,410 | | |
| 246 | | |
| 0.64 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Loans, net | |
| 1,904,011 | | |
| 22,032 | | |
| 4.64 | | |
| 1,848,965 | | |
| 22,065 | | |
| 4.84 | | |
| 1,338,415 | | |
| 14,151 | | |
| 4.24 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total
Earning Assets | |
| 2,955,727 | | |
| 27,483 | | |
| 3.73 | | |
| 2,896,531 | | |
| 27,442 | | |
| 3.84 | | |
| 2,170,252 | | |
| 18,041 | | |
| 3.33 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Allowance for loan losses | |
| (18,247 | ) | |
| | | |
| | | |
| (17,385 | ) | |
| | | |
| | | |
| (19,784 | ) | |
| | | |
| | |
Cash and due from banks | |
| 71,858 | | |
| | | |
| | | |
| 63,689 | | |
| | | |
| | | |
| 35,735 | | |
| | | |
| | |
Premises and equipment | |
| 49,275 | | |
| | | |
| | | |
| 46,605 | | |
| | | |
| | | |
| 34,948 | | |
| | | |
| | |
Intangible assets | |
| 32,188 | | |
| | | |
| | | |
| 31,221 | | |
| | | |
| | | |
| 422 | | |
| | | |
| | |
Bank owned life insurance | |
| 36,111 | | |
| | | |
| | | |
| 35,793 | | |
| | | |
| | | |
| 0 | | |
| | | |
| | |
Other
assets | |
| 98,215 | | |
| | | |
| | | |
| 94,678 | | |
| | | |
| | | |
| 83,297 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
$ | 3,225,127 | | |
| | | |
| | | |
$ | 3,151,132 | | |
| | | |
| | | |
$ | 2,304,870 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Liabilities
and Shareholders' Equity | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing demand | |
$ | 612,433 | | |
$ | 110 | | |
| 0.07 | % | |
$ | 628,480 | | |
$ | 117 | | |
| 0.08 | % | |
$ | 498,285 | | |
$ | 94 | | |
| 0.08 | % |
Savings | |
| 279,354 | | |
| 41 | | |
| 0.06 | | |
| 268,041 | | |
| 39 | | |
| 0.06 | | |
| 205,686 | | |
| 23 | | |
| 0.04 | |
Money market | |
| 607,271 | | |
| 373 | | |
| 0.25 | | |
| 519,526 | | |
| 245 | | |
| 0.19 | | |
| 336,772 | | |
| 67 | | |
| 0.08 | |
Time deposits | |
| 303,802 | | |
| 321 | | |
| 0.42 | | |
| 318,343 | | |
| 347 | | |
| 0.44 | | |
| 259,325 | | |
| 386 | | |
| 0.60 | |
Federal funds purchased
and other short term borrowings | |
| 168,068 | | |
| 77 | | |
| 0.18 | | |
| 212,123 | | |
| 98 | | |
| 0.19 | | |
| 150,108 | | |
| 65 | | |
| 0.17 | |
Other
borrowings | |
| 114,649 | | |
| 773 | | |
| 2.70 | | |
| 114,606 | | |
| 762 | | |
| 2.70 | | |
| 103,610 | | |
| 627 | | |
| 2.43 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total
Interest-Bearing Liabilities | |
| 2,085,577 | | |
| 1,695 | | |
| 0.33 | | |
| 2,061,119 | | |
| 1,608 | | |
| 0.32 | | |
| 1,553,786 | | |
| 1,262 | | |
| 0.33 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Noninterest demand | |
| 795,707 | | |
| | | |
| | | |
| 753,620 | | |
| | | |
| | | |
| 505,892 | | |
| | | |
| | |
Other
liabilities | |
| 17,505 | | |
| | | |
| | | |
| 16,047 | | |
| | | |
| | | |
| 8,560 | | |
| | | |
| | |
Total
Liabilities | |
| 2,898,789 | | |
| | | |
| | | |
| 2,830,786 | | |
| | | |
| | | |
| 2,068,238 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Shareholders'
equity | |
| 326,338 | | |
| | | |
| | | |
| 320,346 | | |
| | | |
| | | |
| 236,632 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
$ | 3,225,127 | | |
| | | |
| | | |
$ | 3,151,132 | | |
| | | |
| | | |
$ | 2,304,870 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest expense as a
% of earning assets | |
| | | |
| | | |
| 0.23 | % | |
| | | |
| | | |
| 0.23 | % | |
| | | |
| | | |
| 0.23 | % |
Net
interest income as a % of earning assets | |
| | | |
$ | 25,788 | | |
| 3.50 | % | |
| | | |
$ | 25,834 | | |
| 3.62 | % | |
| | | |
$ | 16,779 | | |
| 3.10 | % |
| (1) | On a fully taxable equivalent basis. All yields and rates have been computed on an annualized basis using amortized cost.
|
Fees on loans have been included in interest on
loans. Nonaccrual loans are included in loan balances.
CONSOLIDATED QUARTERLY FINANCIAL DATA |
(Unaudited) |
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES |
|
| |
2015 | | |
2014 | |
(Dollars in thousands) | |
Second Quarter | | |
First Quarter | | |
Fourth Quarter | | |
Third Quarter | | |
Second Quarter | |
| |
| | |
| | |
| | |
| | |
| |
Customer Relationship Funding (Period End) | |
| | | |
| | | |
| | | |
| | | |
| | |
Noninterest demand | |
| | | |
| | | |
| | | |
| | | |
| | |
Commercial | |
$ | 561,742 | | |
$ | 546,876 | | |
$ | 481,327 | | |
$ | 301,630 | | |
$ | 293,515 | |
Retail | |
| 180,484 | | |
| 191,262 | | |
| 190,120 | | |
| 162,392 | | |
| 167,172 | |
Public funds | |
| 47,913 | | |
| 38,529 | | |
| 41,201 | | |
| 39,329 | | |
| 33,223 | |
Other | |
| 18,290 | | |
| 16,669 | | |
| 12,590 | | |
| 18,650 | | |
| 15,888 | |
| |
| 808,429 | | |
| 793,336 | | |
| 725,238 | | |
| 522,001 | | |
| 509,798 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing demand | |
| | | |
| | | |
| | | |
| | | |
| | |
Commercial | |
| 60,411 | | |
| 66,532 | | |
| 58,173 | | |
| 41,131 | | |
| 41,423 | |
Retail | |
| 410,601 | | |
| 416,766 | | |
| 407,653 | | |
| 324,690 | | |
| 327,762 | |
Public funds | |
| 128,256 | | |
| 151,556 | | |
| 186,527 | | |
| 114,006 | | |
| 124,742 | |
| |
| 599,268 | | |
| 634,854 | | |
| 652,353 | | |
| 479,827 | | |
| 493,927 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total transaction accounts | |
| | | |
| | | |
| | | |
| | | |
| | |
Commercial | |
| 622,153 | | |
| 613,408 | | |
| 539,500 | | |
| 342,761 | | |
| 334,938 | |
Retail | |
| 591,085 | | |
| 608,028 | | |
| 597,773 | | |
| 487,082 | | |
| 494,934 | |
Public funds | |
| 176,169 | | |
| 190,085 | | |
| 227,728 | | |
| 153,335 | | |
| 157,965 | |
Other | |
| 18,290 | | |
| 16,669 | | |
| 12,590 | | |
| 18,650 | | |
| 15,888 | |
| |
| 1,407,697 | | |
| 1,428,190 | | |
| 1,377,591 | | |
| 1,001,828 | | |
| 1,003,725 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Savings | |
| 282,588 | | |
| 272,963 | | |
| 264,738 | | |
| 215,076 | | |
| 208,333 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Money market | |
| | | |
| | | |
| | | |
| | | |
| | |
Commercial | |
| 191,061 | | |
| 185,668 | | |
| 172,417 | | |
| 118,385 | | |
| 114,662 | |
Retail | |
| 272,853 | | |
| 274,203 | | |
| 264,725 | | |
| 218,376 | | |
| 213,927 | |
Public funds | |
| 158,059 | | |
| 136,729 | | |
| 13,030 | | |
| 7,965 | | |
| 6,657 | |
| |
| 621,973 | | |
| 596,600 | | |
| 450,172 | | |
| 344,726 | | |
| 335,246 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Time certificates of deposit | |
| 292,919 | | |
| 312,072 | | |
| 324,033 | | |
| 246,920 | | |
| 258,233 | |
Total Deposits | |
$ | 2,605,177 | | |
$ | 2,609,825 | | |
$ | 2,416,534 | | |
$ | 1,808,550 | | |
$ | 1,805,537 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Customer sweep accounts | |
$ | 157,676 | | |
$ | 170,023 | | |
$ | 153,640 | | |
$ | 124,436 | | |
$ | 141,662 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total core customer funding (1) | |
$ | 2,469,934 | | |
$ | 2,467,776 | | |
$ | 2,246,141 | | |
$ | 1,686,066 | | |
$ | 1,688,966 | |
(1) Total deposits and customer sweep accounts, excluding
certificates of deposits.
EXHIBIT 99.2
To Form 8-K dated July 24, 2015
Seacoast Banking Corporation of Florida
Second Quarter 2015 Earnings Conference
Call
July 24, 2015
1:00 pm Eastern Time
Company Participants:
Dennis S. Hudson, III, Chairman and Chief Executive Officer,
Seacoast Banking Corporation of Florida
Charles K. Cross, Jr., EVP, Commercial Banking, Seacoast Banking
Corporation of Florida
Stephen A. Fowle, EVP and Chief Financial Officer, Seacoast
Banking Corporation of Florida
David Houdeshell, EVP & Chief Risk and Credit Officer, Seacoast
Banking Corporation of Florida
Jeffery Lee, EVP & Chief Marketing Officer, Seacoast Banking
Corporation of Florida
Charles Shaffer, EVP, Community Banking, Seacoast Banking Corporation
of Florida
Other Participants:
Taylor Brodarick, Vice President, Guggenheim Securities, LLC
Chris Marinac, Managing Principal and Head of Research, FIG
Partners
Stephen Scouten, Associate Director, Equity Research Sandler
O'Neill
Scott Valentin, Managing Director, FBR Capital Markets
Management Remarks:
Operator: Welcome to Seacoast Second
Quarter Earnings Conference call. My name is Adrienne, and I will be your operator for today's call. At this time, all participants
are in a listen-only mode. Later, we’ll conduct a question-and-answer session. Please note this conference is being recorded.
Before we begin, I direct your attention
to the statement contained at the end of the press release regarding forward-looking statements. During the call certain issues
will be discuss that constitute forward-looking statements within the meanings of the Securities and Exchange Act, and as a result
the comments are intended to be covered within the meaning of the act.
I’ll now turn the call over to Mr.
Dennis Hudson, Chairman and CEO. Mr. Hudson, you may begin.
Dennis Hudson: Thank you very much,
and thank all of you for joining us today on our call. We’d also like to mention that there are a few slides to go along
with this call, as well as the copy of our press release that we released yesterday afternoon. These are posted on our website
at seacoastbanking.com, and they can be found under the title “Presentations.”
Also with me today is Steve Fowle, our
Chief Financial Officer, who is going to be reviewing some of our results after the opening comments that I will make. Also with
us in the room are Chuck Cross, who leads our Commercial Banking business line; Chuck Shaffer, our Community Banking business leader;
David Houdeshell, our Chief Risk and Credit Officer; and Jeff Lee, our Chief Marketing Officer. All of us will be available to
answer questions should you have any following our remarks.
I’ll open by saying, we had another
strong quarter this quarter with very significant growth, we feel, in revenue on both a sequential and a year-over-year basis.
As you are going to hear in a minute, net income was also up significantly year-on-year.
Our strategic framework to focus on improving
profitability, investing for growth, and managing risk continues to yield consistent results. We believe that these results demonstrate
our value proposition and that our approach to community banking is really beginning to resonate in the marketplace. We also believe
the investments we have made and are making will continue to fuel further success and capture greater opportunity as we move into
the future. This quarter I was also encouraged by continued strength in our credit quality, with declines in nonperforming loans
and nonperforming assets.
I thought I’d mentioned at the outset
that there are a few areas in which we have made substantial investments and will share with you some of the results that these
investments are producing. First, our most significant investment over the last couple of years has been around expanding our Accelerate
business banking platform to further serve the commercial business markets, particularly of South Florida and Orlando. These investments
are now producing some of the best growth we’ve seen, not just in loans, but also in core deposits and other services. Moreover,
it’s contributing to meaningfully good new growth in high value business households.
Other investments to streamline processes
around our small business banking platform, together with new leadership and better execution, is growing higher value small business
households at a rate that is, frankly, very pleasing to us. This is happening just as the local economy is providing greater opportunity
for small business expansion. Similar results are also evident this quarter around our residential and consumer lending areas,
and these results are particularly benefiting from investments we’ve made in some of our digital marketing and data analytics.
Over the past 18 months, we’ve increased
our investments around digital marketing, using innovative thinking and predictive intelligence, and we are benefiting from more
effective cross-sell efforts to expand our number of services utilized by each customer. I thought I would share also a few metrics
that suggest we’re on to something here and our investments are paying off.
| · | Year-to-date, we recorded a 37% improvement in new households acquired compared to the same time
last year; |
| · | Year-to-date, we’ve produced around $60 million in new small consumer loans, compared with
just $30 million for the same period last year, around a 93% improvement; |
| · | Households with an activated debit card have grown by almost 10% year-to-date, compared with a
growth rate of about 6% year-to-date over the same time last year; and |
| · | Our households engaging with us using mobile technology have grown as well. This year, they’re
up about 28% compared with about 18% growth in the same time last year. |
So, we’re really beginning to see
some acceleration and some pretty significant movement as a result of these investments.
Finally, I wanted to update you on our
investment in our Orlando acquisition which was closed and integrated just three quarters ago. Over that short period, we have
seen meaningful growth in households coming out of the acquired customer base. We’ve seen growth in the revenue and we’ve
seen growth in services per household each and every quarter, and the growth has accelerated each quarter. Compare this to slightly
negative to neutral historical growth we observed in that customer base during our diligence. The growth rates on this acquired
customer base have not caught up to our legacy growth rates, but the improvement is on pace to get us there in another couple of
quarters. As you can see, we are leveraging our investments to grow across a larger customer base, and frankly we are doing so
with very little incremental cost.
We will do the same with our acquisition
of Grand Bankshares, which closed last Friday and was integrated last weekend. This acquisition makes us the third largest Florida-based
bank in Palm Beach County. These acquisitions complement our legacy banking business and enable us to successfully add new customers
and expand into adjacent markets, again fueling our franchise growth.
Since 1926, we have understood and appreciated
the economic value of Florida, and research is now showing that Florida again is outpacing the rest of the country. We are a leader
in using digital technology and data analytics to offer our customers mobile and other convenience products in a way that is on
par with some of the largest banks in the country.
The metrics I just shared with you demonstrate
that we are succeeding, and we’re really in the early stages of applying these techniques to our customer base. Our acquisitions
have opened up a sizable market to us, both in Orlando and Palm Beach County, and have allowed us to scale up our investments more
quickly.
We look forward to the second half of this
year and expect to see continued sustained growth through our strategic initiatives and investments. We are going to be expanding
our marketing and process execution to our new customers in the important Palm Beach market.
And now, I’d like to turn the call
over to our Chief Financial Officer, Steve Fowle, who is going to share a few other insights and highlights for the quarter; and
then, of course, we’d be happy to take a few questions.
Steve Fowle: Thank you, Denny, and
thanks to all of you who have taken the time to join us for the call today. Our second quarter results reflect another successful
quarter for Seacoast as our investments pay off and as our business teams were able to drive significant revenue growth.
As Denny noted earlier, revenues increased
a solid $1.5 million this quarter to $34.5 million. This is a 4.5% not annualized linked quarter growth rate. We grew revenues
$11.9 million or 53% compared to the second quarter of 2014. Our ability to produce continued topline growth drove another quarter
of strong results. Year-over-year net income increased $3.9 million or 203% to $5.8 million, and decreased slightly from $5.9 million
in the first quarter of 2015. This translates to $0.18 per diluted common share, compared to $0.07 in the second quarter last year
and essentially flat with the first quarter of 2015.
Investment in our franchise, including
the effective use of digital marketing and stellar efforts by our customer-facing personnel, led to growth across our businesses.
First, we grew total loans by $602 million from last year. Excluding loans acquired with our Orlando acquisition, we increased
loans $238 million or 18%. During this quarter, we also grew loans a strong 18% annualized, and our pipelines finished the quarter
at 12-month highs. This growth is more remarkable when you consider that our lending teams have been able to build this momentum
while maintaining industry and geographic diversification metrics and managing to a very conservative house limit.
Households also continue to grow at a strong
steady pace, increasing 5% annualized over first quarter levels and 5% from prior year levels, again normalized for acquired households.
This success allowed us to grow core customer deposits at a 19.8% pace above last year, adjusted for the acquisition, and flat
from last year despite entering a seasonally slow summer period and despite intentional runoff of our higher cost CD portfolio.
Non-interest checking now represents 31% of all deposits and, combined with low cost interest checking, demand accounts have reached
54% of our total deposits.
As a result, we improved margin by 40 basis
points from last year, and net interest income held flat with last quarter despite the fact that we did not record anywhere near
the level of purchased loan accretion. You may remember last quarter we indicated that Q1 had about 10 basis points or $750,000
excess purchased loan accretion above our expected levels. You might also remember we expected the margin to decrease to about
3.50% during 2015, spot on with what we are reporting this quarter.
Going forward, we believe that continued
strength in loan growth and other favorable balance sheet mix dynamics will allow for modest upside opportunity this year. The
Grand Bank acquisition and the potential for increased rates later in the year may fuel additional margin opportunity, although
it’s too early to say more about either of these dynamics.
Our business also drove significant service
fee income growth. Our marine finance business had a solid quarter, and mortgage banking held at levels very close to our strong
Q1 performance. With 5% household growth, interchange income and deposit service charges showed strong increases despite part of
the quarter being impacted by lower summer activity levels.
We also recorded a $725,000 gain in non-interest
income on a participated loan. This represents a discount we recognized when we participated out a portion of a Bancshares loan
in order to meet additional credit needs of a good customer who is approaching our house limit. We consider this income to be core.
It’s almost, in all respects, the same as purchase loan accretion recognized in margin, but for the fact the loan was participated.
Our long-term revenue growth reflects investment
in our franchise over the past couple years. This growth story can be seen in a couple metrics which I think are revealing. 2012
was a year when many banks like Seacoast were turning focus from the impact of the Great Recession and beginning to turn focus
to the future. Using this year as a starting point, we’ve grown pre-tax, pre-provision net income at 120% growth rate based
on an annualized first half of 2015. Investment in technology, acquisitions, and our Accelerate model has helped us produce 23%
annual growth in revenues, while allowing us to hold expense growth to 6%, remarkable operating leverage.
This quarter’s expenses reflect the
impacts of such investment. Q2 increased expense over last year, of course, reflects our significant entry into the Orlando market,
offset by cost savings initiatives. The linked quarter increase of $1.1 million reflects $337,000 in corporate development charges,
up more than $60,000 from Q1, and more than $350,000 in expenses from the acquisition of our factoring business in May. This is
their ongoing run rate for the portion of the quarter that they were part of us. This lift-out slightly added to our bottom line
this quarter. Expense growth also included an increase of approximately $375,000 in production driven commission expense and $250,000
in increased marketing expense. Marketing expense this quarter included investments in digital customer acquisition and corporate
branding in our new Orlando market, both of which should provide long-term benefit for Seacoast.
A strong revenue increase is only one measure
of the benefit of investment. Additionally, investment in technology aimed at adding convenience for our customers, like mobile
banking, has helped us become more efficient. Over the past five years, growth and intentional pruning of branches—we’ve
closed about 30% of our branches over this time period—has allowed us to improve our deposits per square foot from between
$9,000 and $10,000, a borderline acceptable level, to better than $12,500 per square foot, more than 30% improvement. And we expect
to continue to improve this metric.
So, while expenses have increased, we are
focused on continuing to improve ROA and bottom-line results by continuing operating leverage improvement. We expect average expenses
to average asset ratio to decrease about 10 to 15 basis points as we exit this year, excluding the Grand acquisition, ongoing or
one-time merger charges. Ongoing benefit from this merger will only help this metric.
So all that said, I return the call back
to Denny.
Dennis Hudson: Thank you, Steve,
and we will be happy to take some questions. Operator?
Operator: Thank you. We’ll
now begin the question-and-answer session. (Operator instructions.) We see Stephen Scouten from Sandler O'Neill on line with a
question. Please go ahead.
Steve Scouten: I guess one thing
I was curious about is obviously your shares have had a really nice run here, really over the last couple of years, and I’m
curious now with the momentum you’ve seen in the organic growth, do you look at continual M&A opportunities to enhance
that potential or are you more focused on letting these current investments play out as it is?
Dennis Hudson: Well, as I have said
often when asked that question, our focus has been and remains on improving profitability and generating organic growth. The key
factor to growing value for shareholders over time is to get those metrics right. And we are beginning, I think, to get those metrics
right. So, I wouldn’t say M&A is what we’re leading with. What we’re leading with is how do we grow this
business organically and create much better operating leverage as we go forward.
Obviously the acquisitions we’ve
done have been very helpful to moving us forward faster, and we’re pleased with the results, so stay tuned and we’ll
see. We have said repeatedly that we would be open to opportunistic ideas that really add value to the franchise and grow value
for shareholders. I would say, we lead with organic growth, and we lead with the metrics we talked about because it’s incredibly
valuable, and we’ll just have to see.
Steve Scouten: If I could ask one
more question, if that’s okay. You’re talking about continued operating leverage, and I know Steve spoke to lowering
the expense to average assets by maybe 10 to 15 points over the next year. I mean, is that, if I’m hearing correctly, more
driven just by continued growth in average assets and maybe a stable expense base, or are there more absolute reductions to come
at this point? Or are the Orlando investments and then others going to overwhelm that on an absolute basis?
Steve Fowle: We continue to invest
in the franchise, so I’d expect the expenses to increase as we go through time long-term. I know though that those investments
are paying off. We talked a lot about metrics proving that. So, operating leverage is really what we’re focusing on to help
drive bottom-line growth.
Dennis Hudson: Having said that,
we continue to deal with the business model adjustment—in fact, we currently are looking at many different opportunities
here—and that will undoubtedly result in bringing down, over time, our legacy cost structure. We have very quietly over the
last couple of years brought down probably more than 25% of our legacy branches, and I would say we have more work to do in that
area over time.
However, our focus in the near term remains—and
this is critically important—on generating in our new channels, growth both in customers and cross-sell. And as we get better
and better at that, and we prove to ourselves that we can execute, I think it opens up the door for us to move more quickly to
bring down the legacy cost structure. The legacy cost structure is not just branches. It’s basically everything that we’ve
operated for the last 30 years. So, we’re very passionate about moving forward to a generally much lower cost structure.
I’d also point out, Steve, that our
cost structure in terms of some of the metrics you look at, for example, our overhead ratio, is built upon a net interest margin
of around 3.5%. And if you look at some of the better performers, from a cost standpoint, that are out there, they are built often
on net interest margins of 5%. So, I think one metric that I try to keep an eye on are the expenses as a percentage of assets.
And here at Seacoast, that’s a sub 3% number, and we see that number going down.
Operator: Your next question comes
from Scott Valentin from FBR Capital Markets. Please go ahead.
Scott Valentin: Just with regard
to the margin, I appreciate the guidance. You guys pointed out in the first quarter there was some outsized accretion. I’m
just wondering how we should think about maybe the core margin. So, ex-accretion, it sounded like you guys see some upward bias
to the margin?
Steve Fowle: We do. That really
has to do with balance sheet mix. As we look at this quarter, we were at—maybe slightly below, but pretty much at—our
expected level of merger accretion. So, that is always going to be a lumpy number, but it is something that, like I say, this quarter
we expect we’re pretty close to where our long-term run rate should be.
Scott Valentin: In terms of driving
the core margin higher, so ex-accretion, you guys are about 30% securities to assets. I imagine, over time that comes down, the
loan balances go up, and you get some net benefit to asset yields. Is that the main driver of the core margin?
Steve Fowle: That is the main driver.
I think we have incremental adjustments around the fringes as well, but that’s really the main driver of that improvement
potential.
Operator: Our next question comes
from Chris Marinac from FIG Partners. Please go ahead.
Chris Marinac: Just the leverage,
I guess, or follow up on Steve’s comments about leverage, should we expect to see some incremental benefit to efficiency
in ROA in the second half of this year, or Steve, would you think more of the pronounced changes are effective in 2016?
Steve Fowle: The remainder of this
year should be somewhat noisy with charges from the Grand acquisition, particularly next quarter where we expect most of the one-timers
to be recorded. But no, I’d expect the improvement to start this year.
Chris Marinac: And then Denny, when
you look at the digital channel, how much of your loan growth is coming from that today? And I guess, more importantly, if you
looked out to the end of 2016, for example, how much change would we see in that channel because it’s driving the loan growth?
Chuck Shaffer: We continue to focus
pretty heavily on it. This is Chuck Shaffer. It right now is about 20% of our consumer volume. Our focus has been on the consumer
side on that. And as we look forward, we’re looking for opportunities to expand that into potentially mortgage lending as
well as small business, so more to come on that as we look forward. But it has been increasing and is as much as 20% of our consumer
loan production now, which is up from 0% a year ago, so we’ve seen a tremendous growth in that line, and we’ll continue
to focus on it as we move forward.
Dennis S. Hudson: The cost associated
with that lift is very nominal, and the key here, it’s eminently scalable and very exciting for us. Jeff, did you have anything
else to add?
Jeff Lee: Yes. Just good momentum
in that direction. We’re seeing trends as well from deposit account opening. We’re trending closer to 10% of those
being opened outside of the branch. So, it gives us quite a bit of flexibility as we move forward.
Dennis Hudson: We have internal
goals, that we have not shared with you, to move those numbers much higher. Again, as they begin to gain better momentum, it makes
us more confident about re-looking at a pacing of legacy cost-outs that could be really helpful for us in terms of building tremendous
value over the next year or two.
Chuck Shaffer: And that 20% that
I quoted, we’ll continue to see that grow month to month. So, we expect that to grow as we move forward and become a bigger
part of our consumer channel.
Chris Marinac: Denny, my followup
is: Is there a point in the next couple of quarters where we see some further branch rationalization? It sounds like you’re
looking for more momentum that would justify that, but I was just curious on the timing of when that may happen.
Chuck Shaffer: Yeah. As Denny mentioned,
what we look for is opportunistic opportunities to make that happen. So far, as mentioned earlier over the prior years, we’ve
closed a number of branches with zero impact on our customer base. During that period of time, we’ve been able to grow the
customer base while closing those branches. As opportunities present themselves for us to exit branches, we will, but we’ll
do it in a way that’s customer friendly and allows us to continue to grow customers against those transactions. So, we will
continue to look for opportunities to take advantage of that.
Dennis Hudson: Chris, I’d
tell you that it absolutely is part of our plan going forward to pull the trigger on lot of that stuff, and I would not be surprised
to have us talking about that next quarter.
Operator: (Operator instructions.)
We have Taylor Brodarick from Guggenheim on line with a question.
Taylor Brodarick: I think just one
for me, guys. Obviously, loan growth was very solid for the quarter, and you’ve seen some pretty outstanding loan growth
from some of your other Florida-only peers. I was just curious, if you could comment on the competition, not specifically, but
if it’s a function of whether there are some bigger credits out there that maybe your in-house lending limit doesn’t
work with, or are you seeing deterioration in structure being offered? Or is pricing just extremely fierce and getting more so?
Chuck Cross: This is Chuck Cross.
Just a comment, our loan growth was across all segments, and we have stayed away from the very large credits that others may be
chasing. Florida has always been a very price competitive environment, but if you’re at the right place with the right speed-to-market
with the right customer, you can get a fair price, and we feel like we are still achieving that. There has been a lot of press
about loosening of underwriting standards, and I think that in a lot of the bigger deals, you are seeing limited guarantees and
some loosening of financial covenants, and we make prudent decisions and bow out when we need to.
Dennis Hudson: And we stay away
from the larger deals that are more heavily competed for, I would say. I mean, we’ve not revealed the numbers, but when you
look at the number of credits that we booked this past quarter, it was the largest we have ever done in terms of number of loans.
So, the number growth has far exceeded the dollar value of growth that we’ve seen out there, and that is very impressive
to me. It’s coming across all quarters. It’s being done with the air-cover of digital to help boost what we’re
doing on the ground. We’re staying focused in smaller value commercial opportunities that we feel very comfortable with.
So, we’re growing it in a way that is more sustainable and less likely to be susceptible to lumpiness if we were to move
into a period of downturn.
So, it’s an exciting period. I mean,
the competition is there. I say this repeatedly, there’s never been a time in my career where we haven’t had lots of
competition, and lots of crazy competition. It’s just something you deal with every day, and our team both on a credit side
and the production side do, I think, a nice job of balancing.
Chuck Shaffer: Earlier you heard
about the investments, and over the prior years we made investments that have increased speed to market. We think it’s something
that’s differentiated ourselves in the marketplace and adds value that we get paid for.
Dennis Hudson: Probably one of our
fastest growing lines right now is small business. This is exactly the right time to be out there with smoother processes in small
business. We worked on that two years ago in anticipation of the economy improving to the point where small business would begin
to grow again. Over the past 12 months, we’ve invested more in leadership in that area, and we’ve invested more in
marketing in that area. It is really paying off now with some of the highest number count of small business relationships, which
of course come with a very significant coverage of deposits, and that’s one of our fastest growing lines.
If you look in the back of our tables,
you’ll see some of our growth rates in DDA, checking accounts, and other transaction accounts, and you see there’s
an emerging trend of faster growth on the business side. That growth is a direct result of that. I can’t wait to see what
that produces as we get back into the seasonal high period of Q4 and Q1 of next year.
Chuck Shaffer: I’ll point
out that the Palm Beach County market, which is a new market for us, opens a world of opportunities to bring that down into Palm
Beach County.
Operator: We have no further questions
at this time. I’ll turn the call back over to Mr. Dennis Hudson for final comments.
Dennis Hudson: Well, thank you all
very much for attending today. We look forward to continuing to keep you up-to-date with our progress when we announced next quarter’s
results. Thank you.
Operator: Thank you, ladies and
gentlemen. This concludes today’s conference. Thank you for participating, and you may now disconnect.
Exhibit 99.3
Second Quarter 2015 July 24, 2015
2 Cautionary Notice Regarding Forward - Looking Statements This press release contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 , including, without limitation, statements about future financial and operating results, ability to realized deferred tax assets, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast’s objectives, expectations and intentions and other statements that are not historical facts . Actual results may differ from those set forth in the forward - looking statements . Forward - looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward - looking statements . You should not expect us to update any forward - looking statements . You can identify these forward - looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “support”, “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “further”, “point to,” “project,” “could,” “intend” or other similar words and expressions of the future . These forward - looking statements may not be realized due to a variety of factors, including, without limitation : the effects of future economic and market conditions, including seasonality ; governmental monetary and fiscal policies, as well as legislative, tax and regulatory changes ; changes in accounting policies, rules and practices ; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities ; interest rate risks, sensitivities and the shape of the yield curve ; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet ; and the failure of assumptions underlying the establishment of reserves for possible loan losses . The risks of mergers and acquisitions, include, without limitation : unexpected transaction costs, including the costs of integrating operations ; the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time - consuming or costly than expected ; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected ; the risk of deposit and customer attrition ; any changes in deposit mix ; unexpected operating and other costs, which may differ or change from expectations ; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees ; increased competitive pressures and solicitations of customers by competitors ; as well as the difficulties and risks inherent with entering new markets . All written or oral forward - looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10 - K for the year ended December 31 , 2014 under “Special Cautionary Notice Regarding Forward - Looking Statements” and “Risk Factors”, and otherwise in our SEC reports and filings . Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC’s Internet website at http : //www . sec . gov . Second Quarter 2015
Second Quarter 2015 3 Financial Highlights Growth Highlights Q2 2015 Financial and Growth Highlights • Loans increased $83 million or 18% annualized compared to Q1 2015, and rose 45% year - on - year. Excluding the acquisition of The BANKshares , loans increased $238 million or 18% compared to Q2 2014 • Total households increased a strong 5%, annualized from Q1 and 20% compared to Q2 2014. Excluding BANKshares customers, year - over - year household growth was 5.3 % • Achieved record levels of business and consumer lending, reflecting success in Accelerate Commercial Banking as well as digitally enabled marketing and cross - sell • Closed the Grand Bancshares, Inc. acquisition and completed the conversion of Grand’s customers over the July 17 weekend, adding approximately $190 million in deposits and $121 million in gross loans in the attractive Palm Beach market • Q2 Net Income Rises More Than 200% Year - on - Year to $5.8 Million, or $.18 per Share • Revenues increased $1.5 million, or 4.5%, sequentially to $34.5 million compared to Q1 2015, and $11.9 million, or 53%, compared to Q2 2014 • Net interest margin increased 40 basis points (0.40%) year - on - year, reflecting improved balance sheet mix • Adjusted net income excluding merger costs and other adjustments increased 106% to $6.2 million, or $ 0.19 per diluted share, compared to $3.0 million, or $0.12 per diluted share, in Q2 2014 Non - GAAP measure (1) (1) Non - GAAP measure, excludes merger related charges, branch closure expenses, and other adjustments (See Appendix for reconciliation to GAA P)
Florida’s Economic Improvement Second Quarter 2015 4 • Employment overall grew 3.4% YOY and private sector employment is up 3.9%. • Unemployment in June was down to 5.5%, a drop of 0.2% from May levels. • Strongest sectors were construction, leisure & hospitality, education & health, manufacturing, and services Seacoast Footprint
5 Source: Wells Fargo Securities Florida Economic Outlook July 2015 . Second Quarter 2015
Second Quarter 2015 6 Pro Forma County Branch Map Palm Beach County Deposit Market Share Pro Forma Financial Highlights 1 2014 Rank Institution (ST) Branches Deposits ($000) Market Share (%) 1 Wells Fargo & Co. (CA) 66 8,727,124 21.60 2 Bank of America Corp. (NC) 55 6,354,287 15.73 3 JPMorgan Chase & Co. (NY) 54 3,766,893 9.32 4 PNC Financial Services Group (PA) 51 2,579,969 6.39 5 SunTrust Banks Inc. (GA) 37 2,426,806 6.01 6 Toronto-Dominion Bank 24 2,401,103 5.94 7 Citigroup Inc. (NY) 11 1,587,427 3.93 8 BB&T Corp. (NC) 32 1,505,067 3.72 9 BankUnited Inc. (FL) 17 1,383,623 3.42 10 New York Community Bancorp (NY) 12 1,254,974 3.11 11 Banco de Sabadell 5 880,247 2.18 12 TFS Financial Corp (MHC) (OH) 4 699,679 1.73 13 Northern Trust Corp. (IL) 4 633,309 1.57 14 Valley National Bancorp (NJ) 6 514,842 1.27 15 FCB Financial Holdings Inc. (FL) 4 468,533 1.16 16 Regions Financial Corp. (AL) 11 418,037 1.03 17 CenterState Banks (FL) 5 414,475 1.03 18 Fifth Third Bancorp (OH) 4 393,480 0.97 19 IBERIABANK Corp. (LA) 5 303,835 0.75 20 Pro Forma 6 301,506 0.75 20 Stonegate Bank (FL) 2 247,328 0.61 21 HSBC 4 240,934 0.60 22 Paradise Bank (FL) 2 220,089 0.54 23 First Repub Bank (CA) 1 213,908 0.53 24 Palm Beach Community Bank (FL) 6 210,250 0.52 25 EverBank Financial (FL) 1 205,357 0.51 26 Comerica Inc. (TX) 5 191,316 0.47 27 First Citizens BancShares Inc. (NC) 4 190,318 0.47 28 Grand Bankshares Inc. (FL) 3 187,970 0.47 34 Seacoast Banking Corp. of FL (FL) 3 113,536 0.28 Total For Institutions In Market 480 40,406,482 2014 Grand Total Assets:$3.3 billion Total Gross Loans: $2.0 billion Total Deposits: $2.6 billion Total Equity: $327 million Total Tangible Common Equity: $295 million (1) Does not include impact of purchase accounting; financial data as of December 31, 2014 Seacoast’s Pro Forma Franchise Source: SNL Financial
7 Strategic Rationale Second Quarter 2015 • Price / 12/31/14 Tangible Book Value: 108% • Core Deposit Premium: 1.2% • Price / LTM Earnings: 15.8x Strategically Compelling Financially Attractive Annualized Valuation Analytics • In - market acquisition more than doubles Seacoast’s presence in the attractive Palm Beach County market • Significant, realistic cost savings driven by market overlap • Low integration risk - conversion completed successfully on July 17th • Modestly accretive to tangible book value at closing • Approximately 5% accretive to SBCF EPS in 2016 • On track to realize cost savings and merger charge expectations which will drive pro forma income accretion
Second Quarter 2015 8 Earnings Improvement Trend • Adjusted Pretax, pre - provision income (1) significantly improved indicative of higher quality earnings. (1) Non - GAAP measure, excludes merger related charges, branch closure expenses, and other adjustments (See Appendix for reconciliation to GAA P) (Dollars in thousands) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2015 2015 2014 2014 2014 GAAP Net Income $5,805 $5,859 ($1,517) $2,996 $1,918 GAAP Earnings per diluted share $ 0.18 $0.18 ($0.05) $ 0.12 $ 0.07 Adjusted Net Income (1) $ 6,172 $6,177 $4,179 $3,286 $2,990 Adjusted Pretax, pre - provision income (1) $ 10,815 $10,342 $7,464 $4,341 $3,821 Adjusted Earnings per diluted share (1) $0.19 $ 0.19 $0.13 $0.13 $0.12 Average shares outstanding 33,234 33,136 33,124 26,026 25,998
Second Quarter 2015 9 Loan Growth Momentum Continues • Total loans were $ 1.937 billion at June 30, 2015, up $83.0 million or 4.5% (18% annualized) from the first quarter. • Commercial loan originations for the quarter were a strong $85.8 million, increasing $24.5 million or 39.9% over the first quarter • Residential production totaled $81.8 million compared to $55.8 million in the first quarter and $61.2 million in the second quarter of 2014 $682 $701 $774 $780 $800 $653 $690 $1,048 $1,074 $ 1,137 $1,335 $1,391 $1,822 $1,854 $1,937 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Total Loans ($ in Millions) Consumer Commercial
Second Quarter 2015 10 Deposit Balances Extend Growth Trends • Average noninterest bearing demand deposits increased to 30.6% of total deposits compared with 28.0% for the second quarter 2014 • Average Low/No cost deposits increased to 88.3% of total deposits compared to 85.7% one year ago • Total deposits increased 44.3% to $2.61 billion at June 30, 2015 from year - ago levels $506 $506 $728 $754 $796 $ 1,041 $ 1,042 $ 1,307 $ 1,416 $ 1,499 $259 $252 $327 $318 $304 $1,806 $1,800 $2,362 $2,488 $ 2,599 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Average Deposit Balances ($ in Millions) Non Interest Bearing Low Cost Deposits Time Deposits
Second Quarter 2015 11 • Net interest income for the quarter totaled $ 25.8 million, up $9 million from a year ago. • Net interest margin for the quarter increased to 3.50% versus prior year of 3.10% in the second quarter 2014. • A decline in accretion from the purchase loans was the major factor in the next interest margin decrease. $16,779 $17,282 $24,883 $25,834 $25,788 3.10% 3.17% 3.56% 3.62% 3.50% 0 5,000 10,000 15,000 20,000 25,000 30,000 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Net Interest Income and Net Interest Margin ($ in thousands) Net Interest Income Net Interest Margin Net Interest Income and Margin Meaningfully Improved
Second Quarter 2015 12 Non Interest Income • Noninterest income increased $3.0 million or 50% from a year ago to $8.8 million and $1.5 million or 21% above the first quarter of 2015 • Service charges on deposit accounts increased $113,000 and interchange income grew $296,000 from the first quarter of 2015 • Adjusting for the gain on a participated loan of $725,000 during the quarter, fee income increased $813,000 or 11%. $1,484 $1,753 $2,208 $2,002 $2,115 $1,514 $1,452 $1,603 $1,737 $2,033 $855 $825 $716 $1,088 $1,032 $2,043 $2,119 $2,614 $2,481 $3,666 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Non Interest Income ($ in Thousands) Service Charges on Deposits Interchange Income Mortgage Banking Fees Other $6,149 $5,896 $7,141 $7,308 $8,846
Second Quarter 2015 13 Non Interest Expense Moderates $9,668 $9,917 $12,459 $11,192 $ 11,814 $1,811 $1,769 $1,925 $2,184 $2,235 $2,798 $2,820 $ 3,427 $ 3,251 $ 3,272 $4,523 $4,338 $6,598 $6,048 $6,376 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Core Operating Expenses (1) ($ in Thousands) Salaries and Benefits Data Processing Cost Occupancy / Telephone Other $22,675 $18,800 $18,844 $24,409 $23,697 • Year over year expense increases reflect the acquisition of The BANKshares , offset by planned expense reduction initiatives. • Notable increases include: the acquisition of FGC during the second quarter 2015 which contributed approximately $351,000 in expense; approximately $375,000 increase in production - driven commission expense; and $250,000 in increased marketing expense focused on customer acquisition and for corporate branding in BANKshare’s Orlando footprint. (1) Non - GAAP measure, excludes merger related charges, branch closure expenses, and other adjustments (See Appendix for reconciliation to GAA P)
Second Quarter 2015 14 $12,481 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Deposits ($)* Per Square Foot Industry “sweet spot” for branches: $10,000 in deposits - per - square - foot** * Includes total low/no cost deposits (excludes CDs) ** Source: BAI Banking Strategies, Rightsizing the Branch, Oct. 29, 2014 “Generally , financial institutions should strive for a minimum of $10,000 in deposit balances per - square - foot for each branch. This magic number doesn’t guarantee a branch’s success, but it does provide a suitable benchmark that can help institutions right - size their locations and branch network .” ~BAI Increased Branch Network Efficiency
Second Quarter 2015 15 Appendix
16 Source: Wells Fargo Securities Florida Economic Outlook July 2015 . Second Quarter 2015
17 Second Quarter 2015 Orlando’s Housing Market http:// www.orlandorealtors.org/resource/resmgr/docs_market_pulse/MarketPulse072015.html
18 Second Quarter 2015 http://media.floridarealtors.org/wp - content/uploads/2015/07/June - 2015 - Fla - MSA - summary.pdf
Second Quarter 2015 19 Explanation of Certain Unaudited Non - GAAP Financial M easures • This press release contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). The financial highlights provide reconciliations between GAAP net income and adjusted net income, GAAP income and adjusted pretax, preprovision income. 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. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. The Company provides reconciliations between GAAP and these non - GAAP measures. These disclosures should not be considered an alternative to GAAP.
Second Quarter 2015 20 Net Income - GAAP to Non - GAAP Reconciliation Presented below is net income excluding adjustments for merger related charges, branch closure charges, and other non core expenses. The Company believes that these results of operations are a more meaningful depiction of the underlying fundamentals of its business and ove rall performance. (1) Non - GAAP measure, excludes merger related charges, branch closure expenses, and other adjustments (See Appendix for reconciliation to GAA P) (Dollars in thousands) Second Quarter 2015 First Quarter 2015 Fourth Quarter 2014 Third Quarter 2014 Second Quarter 2014 Net income $5,805 $5,859 ($1,517) $2,996 $1,918 Severance 29 12 478 328 181 Merger related charges 337 275 2,722 399 1,234 Branch closure charges and costs related to expense initiatives 0 0 4,261 68 114 Marketing and brand refresh expense 0 0 697 0 0 Stock compensation expense and other incentive costs related to improved outlook 0 0 1,213 0 0 Security (gains) 0 0 (108) (344) 0 Miscellaneous losses (gains) 0 0 119 (45) 144 Recovery of nonaccrual loan interest 0 0 0 (192) 0 Net loss on OREO and repossessed assets 53 81 9 156 92 Asset dispositions expense 173 143 103 139 118 Effective tax rate on adjustments (225) (193) (3,798) (219) (811) Adjusted Net Income (1) $6,172 $6,177 $4,179 $3,286 $2,990 Provision (recapture) for loan losses 855 433 118 (1,425) (1,444) Income taxes 3,788 3,732 3,167 2,480 2,275 Adjusted pretax, pre-provision income (1) $10,815 $10,342 $7,464 $4,341 $3,821 Adjusted earnings per diluted share (1) $0.19 $0.19 $0.13 $0.13 $0.12 Average shares outstanding 33,234 33,136 33,124 26,026 25,998
Second Quarter 2015 21 Non - Interest Expense - GAAP to Non - GAAP Reconciliation Presented below is core operating expenses and other non core expenses. The Company believes that these results of operations are a more meaningful depiction of the underlying fundamentals of its business and overall performance. (1) Non - GAAP measure, excludes merger related charges, branch closure expenses, and other adjustments (See Appendix for reconciliation to GAA P) (Dollars in thousands) Second Quarter 2015 First Quarter 2015 Fourth Quarter 2014 Third Quarter 2014 Second Quarter 2014 Noninterest Expense: Salaries and wages $9,273 $8,777 $9,998 $7,868 $7,587 Employee benefits 2,541 2,415 2,461 2,049 2,081 Outsourced data processing costs 2,235 2,184 1,925 1,769 1,811 Telephone / data lines 443 496 419 313 306 Occupancy expense 2,010 2,023 2,325 1,879 1,888 Furniture and equipment expense 819 732 683 628 604 Marketing expense 1,225 975 1,072 717 675 Legal and professional fees 1,255 1,388 1,741 884 924 FDIC assessments 520 589 476 387 411 Amortization of intangibles 315 315 446 195 196 Other 3,061 2,781 2,863 2,155 2,317 Total Core Operating Expense 23,697 22,675 24,409 18,844 18,800 Non-GAAP adjustments Severance 29 12 478 328 181 Merger related charges 337 275 2,722 399 1,234 Branch closure charges and costs related to expense initiatives 0 0 4,261 68 114 Marketing and brand refresh expense 0 0 697 0 0 Stock compensation expense and other incentive costs related to improved outlook 0 0 1,213 0 0 Miscellaneous losses (gains) 0 0 119 (45) 144 Net loss on OREO and repossessed assets 53 81 9 156 92 Asset dispositions expense 173 143 103 139 118 Total Adjusted Operating Expenses $24,288 $23,186 $34,011 $19,889 $20,683
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