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STUART, Fla., Oct. 29 /PRNewswire-FirstCall/ -- Seacoast Banking Corporation of Florida (Nasdaq: SBCF), a bank holding company whose principal subsidiary is Seacoast National Bank, today reported a third quarter 2009 net loss of $40.8 million compared to a net loss of $3.4 million for the third quarter of 2008. Including preferred stock dividends and accretion of $937,000, the net loss applicable to common shareholders was $41.7 million or $1.21 per average common diluted share for the third quarter, compared to a net loss of $3.4 million or $0.18 per average common diluted share for the third quarter of 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050916/SEACOASTLOGO )
During the quarter we achieved a number of important objectives:
-- Our capital position was strengthened significantly following our
successful capital raise;
-- We substantially completed a planned reduction in the size of our
residential construction and land development loan portfolio which now
totals 3.8 percent of loans outstanding; and
-- Our aggressive liquidation plan has now reduced our loan exposure below
the regulatory targets associated with institutions having significant
concentrations in commercial real estate loans and construction and
development loans.
Capital ratios were strengthened with the completion of a successful public common stock offering with gross proceeds totaling $76 million. The total risk-based capital ratio increased to 16.2 percent up from 13.4 percent on a link-quarter basis. The tangible common equity ratio increased to 6.14 percent from 4.66 percent over the same time period. In addition, the Company expects to close a firm commitment from a private equity firm to purchase 6 million shares of common stock for aggregate proceeds of $13.5 million in the fourth quarter of this year.
During the quarter residential construction and land development loan balances were reduced by more than 40 percent. Total construction and land development loans were reduced by more than 25 percent, falling below the Company's long term objective and below 100 percent of tier one capital and the allowance for loan losses, which is a regulatory threshold associated with institutions having construction and development loan concentrations.
"While very painful, we have now reduced our exposure to residential development lending to a nominal level", said Dennis S. Hudson, III, Chief Executive Officer. "Moreover, the remaining loans in this portfolio have been written down to values that fully reflect the current environment. In addition, as a result of our focus on loan sales and other aggressive liquidation efforts, our aggregate commercial real estate exposure (construction loans and commercial real estate mortgages) has now been reduced below 300 percent of tier one capital and the allowance for loan losses, which is a regulatory threshold associated with institutions having commercial real estate loan concentrations."
After completing a review of internally criticized commercial real estate exposures late in the third quarter, we identified a number of performing loans that we anticipate may not be able to continue to perform in accordance with existing repayment terms. These loans were placed on nonaccrual status and evaluated for impairment. This action together with aggressive loan sales resulted in a significant increase in charge-offs for the quarter and contributed to the increase in nonperforming loans. We anticipate many of these loans will be restructured in the next few months as troubled debt restructures or sold. We believe taking this aggressive action, together with our reduced exposures as described above, will cause our nonaccrual balances to peak at current levels. As a result, we also expect charge-offs to moderate next quarter and to moderate even further thereafter based on the current outlook.
Total revenues were up 3.4 percent to $25.1 million for the third quarter 2009 compared to the third quarter 2008. Excluding investment securities gains, revenues totaled $23.7 million for the quarter ended September 30, 2009 or $599,000 lower compared to the same period a year ago.
Other items impacting financial results for the third quarter 2009 include:
-- Net interest margin increased to 3.74 percent, up 17 basis points from
the third quarter 2008 and 9 basis points higher than last quarter;
-- Net interest income totaled $19.1 million, up $114,000 over the prior
quarter;
-- Provision for loan losses of $45.4 million;
-- The allowance for loan losses increased from 2.75 percent of total loans
for the second quarter to 3.25 percent of total loans in the third
quarter;
-- Nonperforming assets increased approximately $31 million to 8.45 percent
of total assets;
-- Residential construction and development loan portfolio exposure was
reduced by $39.1 million to $57.6 million and from $295.1 million at
year end 2007;
-- Total deposits, excluding brokered certificates of deposits, increased
in the normal seasonally weak third quarter by $14 million or 3.2
percent annualized;
-- The cost of interest bearing liabilities totaled 1.50 percent, 15 basis
points lower than the second quarter 2009 and 114 basis points lower
than third quarter 2008;
-- Mortgage banking income totaled $337,000 up $121,000 or 56 percent from
a year ago;
-- Tangible common equity ratio increased to 6.14 percent from 4.66 percent
as of June 30, 2009 based on the public offering of common stock
completed in the third quarter; and
-- Total risk based capital increased to 16.2 percent, up from 13.4 percent
as of June 30, 2009.
Additional progress was made in reducing the exposure to residential construction and development loans by charging down the impaired loans to their disposition values. We have specific plans in place for each of the remaining credits, and within the next one or two quarters, we believe we will see nonperforming assets begin to decline.
Loan Portfolio Risk Reduction Update
Construction and land development portfolios are being run-off and risk is being reduced. These portfolios have been the primary source of increases in both nonperforming loans and loan losses over the past two years.
Construction
and Land
Development Sept. 30, Mar. 31, June 30, Sept. 30,
Loans High Point 2008 2009 2009 2009
Residential $351.6 3/31/2007 $192.4 $117.2 $96.7 $57.6
Commercial 242.4 12/31/2007 226.8 201.4 166.8 128.7
Individuals 91.3 12/31/2006 65.8 50.2 44.2 41.8
TOTAL $627.0 9/30/2007 $485.0 $368.8 $307.7 $228.1
Total as a
percentage
of total loans 27.8% 22.6% 19.4% 15.2%
Total as a
percentage
of tier 1
risk-based
capital and
Allowance for loan
losses 238.2% 154.5% 133.6% 83.6%
Dollars in millions
Run-off of these portfolios has been achieved through early recognition of the potential for portfolio weakness in the first quarter of 2007 when the housing market began to slow, aggressive collection and liquidation activities with borrowers, and additional liquidation achieved through the sale of larger problem loans. Total construction and land development loans have been reduced to one third of that reported at the high point in 2007, with over $250 million in reduction having been achieved over the past four quarters. Residential construction and land development loans, which have produced extremely high loss experience over the past two years, have been reduced by 84 percent compared to the high point in 2007. Portfolio liquidation for residential construction and development loans has also been focused on large loan exposures. Large balance (over $4 million) residential construction and land development loans have been reduced by $80.5 million to $17.8 million over the past five quarters, all of which is currently on nonaccrual. This portfolio is now in the process of liquidation in accordance with specific work-out plans with borrowers designed to achieve substantial liquidation in an orderly fashion over the next 12 months. We expect aggregate loss exposure in this portfolio to continue to moderate significantly going forward. Commercial construction and development loans continue to decline and remain well diversified with no single category of exposure exceeding 20 percent of tier 1 capital and the allowance for loan losses.
Commercial real estate mortgage loans remain well diversified (as shown in the attached table) with all but three categories of exposure at less than 20 percent of tier 1 capital and the allowance for loan losses. The three largest categories of exposure are office buildings, retail trade and industrial at 65 percent, 68 percent and 40 percent respectively of tier 1 capital and the allowance for loan losses. Approximately 35% of commercial real estate mortgage loans are owner occupied with an average loan-to-value of 50 percent and originated over a wide timeframe. The non-owner occupied portion of the portfolio has an average loan-to-value of 53 percent. While the Company may see further deterioration over time in this portfolio as a result of continuing economic weakness, we expect a much lower level of loss potential than recently experienced in our construction and land development portfolios.
Problem Loan Management and Loss Mitigation Update
Problem assets grew during the quarter due to continued deterioration as a result of economic conditions and greater focus on early intervention loss mitigation strategies (as discussed last quarter) including troubled debt restructurings for smaller commercial and consumer borrowers. The pace of growth began to moderate for nonaccruing loans, while other real estate owned grew higher as problem assets migrated toward liquidation.
Nonaccrual Loans
September 30, 2009
Restructured
Loans
Nonaccrual Loans (Accruing)
------------------------------------------------
Dollars in thousands Non Current Current* Total
----------- ------- -----
Construction and land
development
Residential $23,497 $10,778 $34,275 $0
Commercial 8,884 12,880 21,764 0
Individual 5,392 356 5,748 1,382
Residential Mortgage 20,457 15,409 35,866 13,612
Commercial Real Estate
Mortgage 24,502 28,824 53,326 226
Commercial and Financial 160 1,829 1,989 0
Installment loans to
individuals 1,013 0 1,013 841
----- -- ----- ---
TOTAL $83,905 $70,076 $153,981 $16,061
======= ======= ======== =======
* Loans classified as nonaccrual (including restructured loan) and less
than 30 days past due.
Nonaccruing loans grew by $27.2 million from June 30, 2009 to $154.0 million at September 30, 2009, and accruing restructured loans grew by $1.3 million to $16.1 million over the same period. The growth in nonaccruing loans was also impacted by restructured loans that are currently classified as nonaccruing. Company policy requires troubled debt restructures to be classified as nonaccrual loans (under certain circumstances) until performance can be verified (typically six months). We will continue to pursue troubled debt restructures in selected cases where we expect to achieve better liquidation values than may be expected through other traditional collection activities. During the quarter we also worked with retail mortgage customers, when possible, to achieve lower payment structures in an effort to avoid foreclosure and keep families in their homes. A total of 73 applications were received seeking restructured mortgages, compared to 102 the second quarter, 93 the first quarter and 37 in the fourth quarter of last year. Restructured loans included in nonaccruing loans totaled $36.9 million at September 30, 2009, compared with $33.4 million at June 30, 2009. At September 30, 2009, nonaccruing loans, which totaled $154.0 million, have been written down by approximately $64.6 million or 32 percent of the original loan balance (including specific impairment reserves).
Early stage delinquencies increased somewhat during the quarter in the residential mortgage loan portfolio and remained modest or improved in other loan portfolios. Accruing residential mortgage loans (including home equity lines) 30-89 days past due grew to $7.1 million (or 1.3 percent of residential loans) from $3.7 million (or 0.7 percent) and loans 90 days past due continued to be zero on a linked quarter basis.
Residential home prices in the Company's markets and Florida continued to show signs of stability during the quarter as home sales volumes and inventory levels continued to improve, although the rate of unemployment remains high.
Other real estate owned ("OREO") grew by $3.5 million to $26.8 million, reflecting a migration of a number of commercial and residential properties through the final foreclosure process which offset sales and liquidations for the quarter. OREO is expected to grow in the coming quarter and increase over the next few quarters as final liquidation and resolution of many of the nonaccrual loans is concluded.
Income before taxes and the provision for loan losses for the third quarter of 2009 totaled approximately $4.6 million, up from the $4.3 million earned in the second quarter 2009. The negative impact on net interest income from increased nonperforming loans, together with elevated collection costs, were absorbed by an improving net interest margin performance, better deposit mix, reduced overhead as a result of work force reductions, and lower data processing, occupancy and other expenses. The tax benefit for the net loss for the third quarter totaled $15.7 million. The deferred tax valuation allowance was increased by a like amount, and therefore there was no change in the carrying value of deferred tax assets which are supported by tax planning strategies. Due to limitations on the inclusion of deferred tax assets, regulatory capital ratios are unaffected by the reduced tax benefit for the quarter. Should the economy show signs of improvement and our credit losses moderate, we anticipate that we could place increased reliance on our forecast of future taxable earnings, which would result in realization of future tax benefits.
Net interest income (on a tax equivalent basis) was $19.1 million, up $114,000 or 2.4 percent annualized from the second quarter 2009 as a result of lower deposit costs and lower rates paid on most interest bearing liabilities, increased yield on investments, partially offset by a decline of $61 million in average outstanding loans, lower loan yields and higher nonperforming loans. The net interest margin, which totaled 3.74 percent, increased 9 basis points compared to the second quarter 2009, and was 17 basis points higher than in third quarter 2008.
Noninterest income, totaled $6.1 million, down $539,000 linked quarter, primarily due to lower gains on securities sales as well as lower revenue related to seasonal declines in fees from merchant services, marine finance fees, mortgage banking fees and brokerage commissions and fees. The revenue declines from these sources were partially offset by higher revenues from service charges on deposits, the result of the growth in new deposit households. In addition, wealth management and marine finance fees continue to be impacted by the challenging economic conditions.
Noninterest expenses for the third quarter totaled $20.5 million, lower by $719,000 compared to the second quarter 2009 (excluding the write-off for goodwill impairment of $49.8 million), primarily the result of higher FDIC insurance costs due to a special assessment in the second quarter 2009. Salaries, wages and benefits for the third quarter 2009 declined $1,523,000 or 16.1 percent from a year ago, and were $3.5 million lower for the first nine months of 2009 compared to the same period in 2008, as a result of consolidation of branches and centralization of management by combining markets. Cost reductions were also achieved in backroom areas, with expenditures for data processing, occupancy, and furniture and equipment all declining compared to the prior year. Increasing this quarter were costs associated with foreclosed and repossessed asset disposition and management activities, which increased by $625,000 compared to the second quarter 2009 and totaled $2.1 million. Also increasing this quarter were legal and professional fees related to risk management, credit and collection related activities. Management has been focused and aggressive in resolving troubled loans and are confident that its early identification and actions will lead to lower future costs as exposures are reduced.
The Company's retail core deposit focus has produced strong growth in core deposit customer relationships and has resulted in increased balances, which offset planned run-off in brokered certificates of deposit in the third quarter 2009. The improved deposit mix and lower rates paid on deposits during the third quarter reduced the overall cost of total deposits to 1.24 percent, 16 basis points lower than in the second quarter 2009 and 96 basis points below last year's third quarter.
Increased emphasis on residential lending has increased mortgage originations in the first nine months of 2009. A total of 236 applications were accepted in the third quarter 2009 for total loans of $43 million, and 966 applications were taken in the first nine months for $206 million. Closed mortgage loans totaled $28 million for the quarter, compared to $43 million in the second quarter and $38 million for the first quarter 2009. A total of $28 million in residential mortgage loans were sold in the third quarter of 2009. Over the first nine months of 2009, a total of $72 million in residential mortgage loans were sold, and $37 million were added to the portfolio.
Total deposits at quarter end September 30, 2009 were up compared to June 30, 2009, attributable to continued growth as a result of a strategic focus on increasing market share. Total deposits, excluding brokered certificates of deposits at September 30, 2009, totaled $1,706 million and were just $4 million lower compared to year-end 2008 total deposits. Historically, the Company's deposits experience a seasonal decline in the third quarter compared to the other quarters. Instead deposit growth (excluding brokered certificates of deposits) during the third quarter was 3.2 percent annualized. The average cost of interest bearing core deposits during the third quarter was 0.58 percent, down 13 basis points from the second quarter. During the third quarter, certificates of deposits rates paid were also 35 basis points lower than in the second quarter and totaled 2.45 percent. The average cost of total interest-bearing liabilities of 1.50 percent declined by 15 basis points from the second quarter.
Compared to the prior year's third quarter customer, sweep repurchase agreements were down $2.5 million. Total deposits at September 30, 2009 declined $77.5 million compared to the prior year, as a result of deposit declines in the Company's central Florida region caused by slower economic growth. This region's deposit decline reversed trend during the third quarter 2009 and should contribute to total deposit growth going forward. As previously reported, the Company has experienced strong growth in core deposit customer relationships since implementing its new deposit growth strategy. A total of 1,622 new core households were added in the third quarter 2009, 10.2 percent higher than the second quarter 2009. This compares to 1,566 in third the quarter 2008, and 1,539 in the third quarter 2007. These new relationships have improved market share and increased average services per household. Seacoast now has the number two market share ranking in its Treasure Coast market.
Seacoast will host a conference call on October 30, 2009 at 10:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Investors may call in (toll-free) by dialing (866) 712-7678 (access code: 8397217; leader: Dennis S. Hudson). Charts will be used during the conference call and may be accessed at Seacoast's website at www.seacoastbanking.net by selecting "Presentations" under the heading "Investor Services". A replay of the call will be available for one month, beginning the afternoon of October 30, 2009, by dialing (877) 213-9653 (domestic), using the passcode 8397217.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.seacoastbanking.net. The link is located in the subsection "Presentations" under the heading "Investor Services". Beginning the afternoon of October 30, 2009, an archived version of the webcast can be accessed from this same subsection of the website and will be available for one year.
Seacoast Banking Corporation of Florida has approximately $2.1 billion in assets. It is one of the largest independent commercial banking organizations in Florida, headquartered on Florida's Treasure Coast, one of the wealthiest and fastest growing areas in the nation.
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, 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, 2008 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.
FINANCIAL HIGHLIGHTS (Unaudited)
-----------------------------------------------------------------------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Three Months Ended Nine Months Ended
(Dollars in September 30, September 30,
thousands, ------------------ ----------------------
except per
share data) 2009 2008 2009 2008
------------- ---- ---- ---- ----
Summary of Earnings
Net loss $(40,777) $(3,448) $(108,537) $(23,001)
Net loss,
available to
common shareholders (41,714) (3,448) (111,348) (23,001)
Net interest
income (1) 19,101 19,186 56,329 59,982
Performance Ratios
Return on average
assets-GAAP
basis (2),(3) (7.55)% (0.60)% (6.49)% (1.32)%
Return on average
tangible
assets (2),(3),(4) (7.53) (0.58) (6.56) (1.32)
Return on average
shareholders'
equity-GAAP
basis (2),(3) (86.49) (7.13) (70.64) (14.77)
Net interest
Margin (1),(2) 3.74 3.57 3.61 3.67
Per Share Data
Net loss
diluted-GAAP basis $(1.21) $(0.18) $(4.58) $(1.21)
Net loss basic-GAAP
basis (1.21) (0.18) (4.58) (1.21)
Cash dividends
declared 0.00 0.01 0.01 0.33
---------- ---- ---- ---- ----
September 30,
----------------- Increase/
2009 2008 (Decrease)
-------------- ---- ---- ---------------
Credit Analysis
Net charge-offs year-to-date $63,791 $47,232 35.1%
Net charge-offs to average
loans 5.25% 3.41% 54.0
Loan loss provision year-to-
date $83,253 $57,978 43.6
Allowance to loans at end
of period 3.25% 1.87% 73.8
Nonperforming Loans $153,981 $75,793 103.2
Other real estate owned 26,819 4,551 489.3
------ -----
Total non-performing assets $180,800 $80,344 125.0
-------- -------
Restructured loans (accruing) $16,061 $10 n/m
Nonperforming assets to loans
and other real estate owned
at end of period 11.80% 4.60% 156.5
Nonperforming assets to
total assets 8.45% 3.61% 134.1
Selected Financial Data
Total assets $2,139,915 $2,224,614 (3.8)
Securities - Available for
sale (at fair value) 342,742 267,661 28.1
Securities - Held for
investment (at amortized
cost) 19,296 29,121 (33.7)
Net loans 1,455,716 1,709,978 (14.9)
Deposits 1,761,287 1,838,792 (4.2)
Total shareholders' equity 180,324 184,449 (2.2)
Common shareholders' equity 135,638 184,449 (26.5)
Book value per share common 2.57 9.59 (73.2)
Tangible book value per
share 3.33 6.71 (50.4)
Tangible common book value
per share (5) 2.48 6.71 (63.0)
Average shareholders' equity
to average assets 9.18% 8.93% 2.8
Tangible common equity to tangible
to assets (5),(6) 6.14% 5.94% 3.4
Average Balances (Year-to-Date)
Total assets $2,237,422 $2,329,860 (4.0)
Less: Intangible assets 37,928 55,975 (32.2)
------ ------
Total average tangible
assets $2,199,494 $2,273,885 (3.3)
---------- ----------
Total equity $205,439 $208,010 (1.2)
Less: Intangible assets 37,928 55,975 (32.2)
------ ------
Total average tangible equity $167,511 $152,035 10.2
-------- --------
(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) on available for sale securities 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) The Company defines tangible common equity as total shareholders
equity less preferred stock and intangible assets.
(6) The ratio of tangible common equity to tangible assets is a non-GAAP
ratio used by the investment community to measure capital adequacy.
n/m = not meaningful
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
----------------------------------------------------------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(Dollars in thousands,
except per share data) 2009 2008 2009 2008
----------------------- ---- ---- ---- ----
Interest on securities:
Taxable $4,276 $3,418 $12,495 $10,535
Nontaxable 73 90 233 270
Interest and fees on
loans 20,836 27,146 65,634 86,525
Interest on federal
funds sold and other
investments 163 322 420 1,074
--- --- --- -----
Total Interest
Income 25,348 30,976 78,782 98,404
Interest on deposits 1,133 4,033 4,784 14,116
Interest on time
certificates 4,283 6,334 14,813 19,463
Interest on borrowed
money 881 1,492 3,040 5,061
--- ----- ----- -----
Total Interest Expense 6,297 11,859 22,637 38,640
----- ------ ------ ------
Net Interest Income 19,051 19,117 56,145 59,764
Provision for loan losses 45,374 10,241 83,253 57,978
------ ------ ------ ------
Net Interest Income
(Loss) After Provision
for Loan Losses (26,323) 8,876 (27,108) 1,786
Noninterest income:
Service charges on
deposit accounts 1,732 1,894 4,879 5,556
Trust income 517 597 1,555 1,770
Mortgage banking fees 337 216 1,324 934
Brokerage commissions
and fees 326 452 1,095 1,650
Marine finance fees 249 371 925 1,986
Debit card income 674 620 1,955 1,879
Other deposit based
EFT fees 73 82 252 276
Merchant income 371 510 1,355 1,912
Other income 348 418 1,074 1,448
--- --- ----- -----
4,627 5,160 14,414 17,411
Securities gains, net 1,425 0 3,211 355
----- -- ----- ---
Total Noninterest
Income 6,052 5,160 17,625 17,766
Noninterest expenses:
Salaries and wages 6,598 7,713 20,247 23,076
Employee benefits 1,362 1,770 4,881 5,509
Outsourced data
processing costs 1,705 1,803 5,402 5,800
Telephone / data
lines 472 471 1,415 1,398
Occupancy 2,072 2,112 6,283 6,036
Furniture and
equipment 675 700 2,004 2,135
Marketing 639 545 1,548 2,014
Legal and professional
fees 1,653 1,687 4,648 3,545
FDIC assessments 1,007 543 3,910 994
Amortization of
intangibles 315 315 944 944
Net loss on other real
estate owned and other
asset dispositions 2,065 255 4,007 841
Goodwill impairment 0 0 49,813 0
Other 1,943 2,072 5,777 5,865
----- ----- ----- -----
Total Noninterest
Expenses 20,506 19,986 110,879 58,157
Loss Before Income
Taxes (40,777) (5,950) (120,362) (38,605)
Provision (benefit)
for income taxes 0 (2,502) 11,825 (15,604)
-- ------ ------ -------
Net Loss $(40,777) $(3,448) $(108,537) $(23,001)
Preferred Stick Dividends
and Accretion on Preferred
Stock Discount 937 0 2,811 0
--- -- ----- --
Net Loss Available to
Common Shareholders $(41,714) $(3,448) $(111,348) $(23,001)
-----------------------
Per share common stock:
Net loss diluted $(1.21) $(0.18) $(4.58) $(1.21)
Net loss basic (1.21) (0.18) (4.58) (1.21)
Cash dividends
declared 0.00 0.01 0.01 0.33
Average diluted shares
outstanding 34,571,200 19,030,758 24,299,915 18,981,944
Average basic shares
outstanding 34,571,200 19,030,758 24,299,915 18,981,944
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
------------------------------------- -----------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
(Dollars in thousands, September 30, December 31, September 30,
except per share amounts) 2009 2008 2008
-------------------------- ---- ---- ----
Assets
Cash and due from banks $32,515 $46,002 $38,927
Federal funds sold 0 4,605 11,256
Interest bearing deposits
with other banks 137,640 100,585 0
------- ------- --
Total Cash and Cash
Equivalents 170,155 151,192 50,183
Securities:
Available for sale (at
fair value) 342,742 318,030 267,661
Held for investment (at
amortized cost) 19,296 27,871 29,120
------ ------ ------
Total Securities 362,038 345,901 296,781
Loans available for sale 5,857 2,165 2,701
Loans, net of unearned income 1,504,566 1,676,728 1,742,626
Less: Allowance for loan
losses (48,850) (29,388) (32,648)
------- ------- -------
Net Loans 1,455,716 1,647,340 1,709,978
Bank premises and
equipment, net 42,143 44,122 43,397
Other real estate owned 26,819 5,035 4,551
Goodwill and other
intangible assets 4,436 55,193 55,508
Other assets 72,751 63,488 61,515
------ ------ ------
$2,139,915 $2,314,436 $2,224,614
---------- ---------- ----------
Liabilities and Shareholders'
Equity Liabilities
Deposits
Demand deposits
(noninterest bearing) $264,092 $275,262 $285,746
Savings deposits 788,154 802,201 829,470
Other time deposits 332,788 326,473 361,184
Brokered time
certificates 55,469 100,463 40,100
Time certificates of
$100,000 or more 320,784 306,042 322,292
------- ------- -------
Total Deposits 1,761,287 1,810,441 1,838,792
Federal funds purchased and
securities sold under
agreements to repurchase,
maturing within 30 days 68,797 157,496 71,325
Borrowed funds 65,053 65,302 65,004
Subordinated debt 53,610 53,610 53,610
Other liabilities 10,844 11,586 11,434
------ ------ ------
1,959,591 2,098,435 2,040,165
Shareholders' Equity
Preferred stock 44,686 43,787 0
Common stock 5,285 1,928 1,928
Additional paid in capital 166,800 99,788 92,327
Retained earnings (39,775) 70,278 93,101
Treasury stock (1,181) (1,839) (838)
------ ------ ----
175,815 213,942 186,518
Accumulated other
comprehensive income
(loss), net 4,509 2,059 (2,069)
----- ----- ------
Total Shareholders'
Equity 180,324 216,001 184,449
------- ------- -------
$2,139,915 $2,314,436 $2,224,614
---------- ---------- ----------
Common Shares Outstanding 52,849,625 19,171,779 19,229,363
----------------------------
Note: The balance sheet at December 31, 2008 has been derived from the
audited financial statements at that date.
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Quarters
-------------------------------------------
2009 2008
------------------------------- ---------- Last 12
Third Second First Fourth Months
(Dollars in
thousands, except
per share data)
------------------------------------------------------------ ----------
Net loss $(40,777) $(63,000) $(4,760) $(22,596) $(131,133)
Operating Ratios
Return on
average assets
-GAAP basis
(2),(3) (7.55)% (11.19)% (0.83)% (3.99)% (5.85)%
Return on
average
tangible
assets
(2),(3),(4) (7.53) (2.36) (0.82) (4.05) (3.66)
Return on
average
shareholders'
equity-
GAAP basis
(2),(3) (86.49) (119.80) (8.83) (45.92) (64.60)
Net interest
margin
(1),(2) 3.74 3.65 3.44 3.32 3.60
Average equity
to average
assets 8.73 9.34 9.45 8.68 9.06
Credit Analysis
Net
charge-offs $40,142 $15,109 $8,540 $33,916 $97,707
Net charge-offs
to average
loans 10.14% 3.71% 2.07% 7.76% 5.91%
Loan loss
provision $45,374 $26,277 $11,652 $30,656 $113,909
Allowance to
loans at end
of period 3.25% 2.75% 1.99% 1.75%
Restructured
Loans
(accruing) $16,061 $14,789 $3,309 $12,616
Nonperforming
loans $153,981 $126,758 $109,381 $86,970
Other real
estate owned 26,819 23,259 12,684 5,035
------ ------ ------ -----
Nonperforming
assets $180,800 $150,017 $122,065 $92,005
-------- -------- -------- -------
Nonperforming
assets to
loans and other
real estate
owned at end
of period 11.80% 9.33% 7.42% 5.47%
Nonperforming
assets to total
assets 8.45 6.86 5.29 3.97
Nonaccrual loans
and accruing
loans 90 days
or more past
due to loans
outstanding at
end of period 10.23 8.09 6.97 5.30
Per Share Common
Stock
Net loss
diluted-GAAP
earnings $(1.21) $(3.35) $(0.30) $(1.19) $(6.04)
Net loss
basic-GAAP
earnings (1.21) (3.35) (0.30) $(1.19) (6.04)
Cash dividends
declared 0.00 0.00 0.01 0.01 0.02
Book value per
share 2.57 8.03 8.86 8.98
Average Balances
Total assets $2,142,228 $2,258,792 $2,313,125 $2,255,036
Less:
Intangible
assets 4,590 54,717 55,033 55,346
----- ------ ------ ------
Total average
tangible
assets $2,137,638 $2,204,075 $2,258,092 $2,199,690
---------- ---------- ---------- ----------
Total equity $187,057 $210,997 $218,609 $195,770
Less: Intangible
assets 4,590 54,717 55,033 55,346
----- ------ ------ ------
Total average
tangible equity $182,467 $156,280 $163,576 $140,424
-------- -------- -------- --------
(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) on available for sale securities 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 operating
earnings growth.
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
--------------------------------------------------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
------------- ------------ -------------
September 30, December 31, September 30,
SECURITIES 2009 2008 2008
----------- ---- ---- ----
U.S. Treasury and U.S.
Government Agencies 1,198 22,380 22,280
Mortgage-backed 336,168 290,423 239,936
Obligations of states and
political subdivisions 2,102 2,070 1,986
Other securities 3,274 3,157 3,459
----- ----- -----
Securities - Available for Sale 342,742 318,030 267,661
------- ------- -------
Mortgage-backed 14,589 22,248 22,997
Obligations of states and
political subdivisions 4,707 5,623 6,123
----- ----- -----
Securities - Held for Investment 19,296 27,871 29,120
------ ------ ------
Total Securities $362,038 $345,901 $296,781
-------- -------- --------
September 30, December 31, September 30,
LOANS 2009 2008 2008
----- ---- ---- ----
Construction and land development $228,111 $395,243 $484,989
Real estate mortgage 1,143,476 1,125,465 1,093,324
Installment loans to individuals 66,739 72,908 88,549
Commercial and financial 65,954 82,765 75,296
Other loans 286 347 468
--- --- ---
Total Loans $1,504,566 $1,676,728 $1,742,626
---------- ---------- ----------
AVERAGE BALANCES, YIELDS AND RATES(1) (Unaudited)
---------------------------------------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
2009 2008
------------------------------------- ----------------
Third Quarter Second Quarter Third Quarter
-------------------------------------- ---------------
(Dollars in Average Yield/ Average Yield/ Average Yield/
thousands) Balance Rate Balance Rate Balance Rate
------------------------------------------------------ ---------------
Assets
Earning assets:
Securities:
Taxable $348,770 4.90% $356,582 4.82% $276,777 4.94%
Nontaxable 6,742 6.59 7,048 6.53 8,151 6.53
----- ---- ----- ---- ----- ----
Total
Securities 355,512 4.93 363,630 4.86 284,928 4.99
Federal funds
sold and
other
investments 97,215 0.67 92,160 0.47 53,220 2.41
Loans, net 1,571,186 5.26 1,631,715 5.33 1,798,357 6.01
--------- ---- --------- ---- --------- ----
Total
Earning
Assets 2,023,913 4.98 2,087,505 5.03 2,136,505 5.78
Allowance
for loan
losses (43,124) (31,445) (37,705)
Cash and
due from banks 28,614 32,545 35,788
Premises and
equipment 42,636 43,380 43,378
Other assets 90,189 126,807 104,855
------ ------- -------
$2,142,228 $2,258,792 $2,282,821
---------- ---------- ----------
Liabilities
and Shareholders'
Equity
Interest-bearing
liabilities:
NOW $50,662 0.51% $53,723 0.55% $72,691 1.65%
Savings
deposits 102,429 0.28 103,778 0.43 103,550 0.73
Money market
accounts 618,240 0.64 650,911 0.76 716,166 1.97
Time
deposits 692,616 2.45 682,970 2.80 691,486 3.64
Federal
funds
purchased
and other
short-term
borrowings 86,264 0.33 136,786 0.33 82,730 1.55
Other
borrowings 118,745 2.71 118,832 3.02 118,705 3.92
------- ---- ------- ---- ------- ----
Total
Interest-
Bearing
Liabilities 1,668,956 1.50 1,747,000 1.65 1,785,328 2.64
Demand deposits
(noninterest-
bearing) 273,972 281,736 293,951
Other liabilities 12,243 19,059 11,073
------ ------ ------
Total
Liabilities 1,955,171 2,047,795 2,090,352
Shareholders'
equity 187,057 210,997 192,469
------- ------- -------
$2,142,228 $2,258,792 $2,282,821
---------- ---------- ----------
Interest expense
as a % of
earning assets 1.23% 1.38% 2.21%
Net interest income
as a % of
earning assets 3.74 3.65 3.57
(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.
QUARTERLY TRENDS - LOANS AT END OF PERIOD (Dollars in Millions)
(Unaudited)
----------------------------------------------------------------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
2008
-------------------------------
Construction and land
development 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
--------------------- ------- ------- ------- -------
Residential:
Condominiums >$4 million $30.6 $26.3 $19.6 $8.6
<$4 million 26.6 21.1 13.0 8.8
Town homes >$4 million 19.4 17.1 17.1 -
<$4 million 4.4 2.9 4.6 6.1
Single Family
Residences >$4 million 20.8 21.2 13.5 11.9
<$4 million 35.9 28.3 23.7 14.9
Single Family
Land & Lots >$4 million 85.1 64.3 40.3 22.1
<$4 million 27.0 30.8 29.9 30.7
Multifamily >$4 million 7.8 7.8 7.8 7.8
<$4 million 24.8 26.2 22.9 19.0
---- ---- ---- ----
TOTAL >$4 million 163.7 136.7 98.3 50.4
TOTAL <$4 million 118.7 109.3 94.1 79.5
----- ----- ---- ----
GRAND TOTAL $282.4 $246.0 $192.4 $129.9
====== ====== ====== ======
2009 Nonperforming
----------------------- --------------
Construction and land
development 1st Qtr 2nd Qtr 3rd Qtr 3rd Qtr Number
--------------------- ------- ------- ------- ------- ------
Residential:
Condominiums >$4 million $8.4 $7.9 $5.3 $5.3 1
<$4 million 7.9 8.8 3.7 0.9 1
Town homes >$4 million - - - - -
<$4 million 4.2 2.3 - - -
Single Family
Residences >$4 million 6.6 6.5 - - -
<$4 million 13.9 10.3 7.1 1.8 10
Single Family
Land & Lots >$4 million 21.8 21.8 5.9 5.9 1
<$4 million 29.6 21.5 19.5 9.5 21
Multifamily >$4 million 7.8 7.8 6.6 6.6 1
<$4 million 17.0 9.8 9.5 4.2 6
---- --- --- --- --
TOTAL >$4 million 44.6 44.0 17.8 17.8 3
TOTAL <$4 million 72.6 52.7 39.8 16.4 38
---- ---- ---- ---- --
GRAND TOTAL $117.2 $96.7 $57.6 $34.2 41
====== ===== ===== ===== ==
QUARTERLY TRENDS - LOANS AT END OF PERIOD (Dollars in
Millions) (Unaudited)
------------------------------------------------------
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
2007 2008
------- -------------------------------------
4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
------- ------- ------- ------- -------
Construction and land
development
Residential
Condominiums $60.2 $57.2 $47.4 $32.6 $17.4
Townhomes 25.0 23.8 20.0 21.7 6.1
Single family
residences 59.0 56.7 49.5 37.2 26.8
Single family land
and lots 116.4 112.1 95.1 70.2 52.8
Multifamily 34.5 32.6 34.0 30.7 26.8
---- ---- ---- ---- ----
295.1 282.4 246.0 192.4 129.9
Commercial
Office buildings 30.9 29.1 31.1 27.8 17.3
Retail trade 69.0 60.4 63.6 68.5 68.7
Land 82.6 92.5 75.4 73.9 73.3
Industrial 13.0 16.9 20.8 20.7 13.3
Healthcare 1.0 1.0 1.0 - -
Churches and
educational facilities - - 0.1 - -
Lodging 11.2 - - - -
Convenience stores 1.7 1.8 - - -
Marina 23.1 26.8 28.9 30.5 30.7
Other 9.9 11.3 6.3 5.4 6.0
--- ---- --- --- ---
242.4 239.8 227.2 226.8 209.3
Individuals
Lot loans 39.4 39.4 40.0 38.4 35.7
Construction 32.7 32.4 27.1 27.4 20.3
---- ---- ---- ---- ----
72.1 71.8 67.1 65.8 56.0
---- ---- ---- ---- ----
Total construction and
land development 609.6 594.0 540.3 485.0 395.2
Real estate mortgages
Residential real estate
Adjustable 319.5 317.6 318.8 316.5 329.0
Fixed rate 87.5 89.1 90.2 93.4 95.5
Home equity mortgages 91.4 91.7 93.1 84.3 84.8
Home equity lines 59.1 56.3 59.4 59.7 58.5
---- ---- ---- ---- ----
557.5 554.7 561.5 553.9 567.8
Commercial real estate
Office buildings 131.7 144.3 142.3 143.6 146.4
Retail trade 76.2 83.8 93.5 101.6 111.9
Land 5.3 - - 0.6 -
Industrial 105.5 104.3 93.3 92.2 94.7
Healthcare 32.4 39.9 33.6 31.6 29.2
Churches and
educational
facilities 40.2 40.2 36.5 35.6 35.2
Recreation 3.0 2.8 1.8 1.8 1.7
Multifamily 13.8 20.0 19.1 19.2 27.2
Mobile home parks 3.9 3.2 3.1 3.1 3.0
Lodging 22.7 27.9 28.0 26.7 26.6
Restaurant 8.2 8.0 9.0 8.6 6.2
Agricultural 12.9 12.4 9.0 8.7 8.5
Convenience stores 23.2 23.1 24.9 23.6 23.5
Other 38.3 40.1 41.6 42.5 43.6
---- ---- ---- ---- ----
517.3 550.0 535.7 539.4 557.7
----- ----- ----- ----- -----
Total real estate
mortgages 1,074.8 1,104.7 1,097.2 1,093.3 1,125.5
Commercial & financial 126.7 93.9 94.8 88.5 82.8
Installment loans to
individuals
Automobile and trucks 25.0 24.1 23.0 21.9 20.8
Marine loans 33.2 33.3 25.2 26.0 26.0
Other 28.2 27.5 27.9 27.4 26.1
---- ---- ---- ---- ----
86.4 84.9 76.1 75.3 72.9
Other 0.9 0.5 0.4 0.5 0.3
--- --- --- --- ---
$1,898.4 $1,878.0 $1,808.8 $1,742.6 $1,676.7
======== ======== ======== ======== ========
2009
-------------------------
1st Qtr 2nd Qtr 3rd Qtr
------- ------- -------
Construction and land development
Residential
Condominiums $16.3 $16.8 $9.0
Townhomes 4.2 2.3 -
Single family residences 20.5 16.7 7.1
Single family land and lots 51.4 43.3 25.4
Multif
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