The following table sets forth information about our common stock that may be issued under all of our existing compensation plans as of December 31, 2016.

Equity Compensation Plan Information

Information regarding

(2)

Seacoast Banking Corporation of Florida 2008 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the compensation paid by us to our directorsexercise of stock options and executive officers is set forthstock appreciation rights granted under the headings “Executive Compensation,” “Compensation Discussion & Analysis,” “Compensationplan, as well as, vesting of performance award shares, and Governance Committee Report” and “2015 Director Compensation” in the 2016 Proxy Statement which are incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Mattersawards of restricted stock or stock-based awards, previously issued.   The following table sets forth information about our common (3) Seacoast Banking Corporation of Florida 2013 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock thatoptions and stock appreciation rights granted under the plan, and may be issued under allgranted as awards of our existing compensation plansrestricted stock, performance shares, or other stock-based awards, prospectively. (4) Seacoast Banking Corporation of Florida Employee Stock Purchase Plan, as of December 31, 2015. Equity Compensation Plan Information                 Number of securities                   remaining available       (a)           for future issuance       Number of securities     Weighted average     under equity       to be issued upon     exercise price of     compensation plans       exercise of outstand-     outstanding     (excluding securities       ing options, warrants     options, warrants     represented   Plan Category   and rights     and rights     in column (a))   Equity compensation plans approved by shareholders:                         2000 Plan (1)     37,397     $ 116.43       0   2008 Plan (2)     0       0.00       0   2013 Plan (3)     519,250       10.93       1,721,849   Employee Stock Purchase Plan (4)     0       0.00       107,557   TOTAL     556,647     $ 18.02       1,829,406   (1) Seacoast Banking Corporation of Florida 2000 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, as well as, vesting of performance award shares, and awards of restricted stock or stock-based awards, previously issued.amended.   (2) Seacoast Banking Corporation of Florida 2008 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, as well as, vesting of performance award shares, and awards of restricted stock or stock-based awards, previously issued. (3) Seacoast Banking Corporation of Florida 2013 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, and may be granted as awards of restricted stock, performance shares, or other stock-based awards, prospectively. (4) Seacoast Banking Corporation of Florida Employee Stock Purchase Plan, as amended. Additional information regarding the ownership of our common stock is set forth under the headings “Proposal 1 - Election of Directors” and “Security Ownership of Management and Certain Beneficial Holders” in the 2016 Proxy Statement, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information regarding certain relationships and transactions between us and our officers, directors and significant shareholders is set forth under the heading “Compensation and Governance Committee Interlocks and Insider Participation” and “Certain Transactions and Business Relationships” and “Corporate Governance” in the 2016 Additional information regarding the ownership of our common stock is set forth under the headings “Proposal 1 - Election of Directors” and “Security Ownership of Management and Certain Beneficial Holders” in the 2017 Proxy Statement, and is incorporated herein by reference.   Item 14. Principal Accountant Fees and Services Information concerning our principal accounting fees Item 13. Certain Relationships and services is set forth under the heading “Relationship with Independent Registered Public Accounting Firm; AuditRelated Transactions, and Non- Audit Fees” in the 2016Director Independence Information regarding certain relationships and transactions between us and our officers, directors and significant shareholders is set forth under the heading “Compensation and Governance Committee Interlocks and Insider Participation” and “Certain Transactions and Business Relationships” and “Corporate Governance” in the 2017 Proxy Statement and is incorporated herein by reference.   Part IVItem 14. Principal Accountant Fees and Services Information concerning our principal accounting fees and services is set forth under the heading “Relationship with Independent Registered Public Accounting Firm; Audit and Non- Audit Fees” in the 2017 Proxy Statement, and is incorporated herein by reference.   Item 15. Exhibits, Financial Statement Schedules (a)(1) The Consolidated Financial Statements, the Notes thereto and the report of the Independent Registered Public Accounting Firm thereon listed in Item 8 are set forth commencing on page 109. Part IV   (a)(2) List of financial statement schedules All schedules normally required by Form 10-K are omitted, since either they are not applicable or the required information is shown in the financial statements or the notes thereto. (a)(3) Listing of Exhibits PLEASE NOTE: It is inappropriate for readers to assume the accuracy of, or rely upon any covenants, representations or warranties that may be contained in agreements or other documents filed as Item 15. Exhibits, Financial Statement Schedules (a)(1)    The Consolidated Financial Statements, the Notes thereto and the report of the Independent Registered Public Accounting Firm thereon listed in Item 8 are set forth commencing on page    . (a)(2)     List of financial statement schedules All schedules normally required by Form 10-K are omitted, since either they are not applicable or the required information is shown in the financial statements or the notes thereto. (a)(3)    Listing of Exhibits PLEASE NOTE: It is inappropriate for readers to assume the accuracy of, or rely upon any covenants, representations or warranties that may be contained in agreements or other documents filed as Exhibits to, or incorporated by reference in, this report. Any such covenants, representations or warranties may have been qualified or superseded by disclosures contained in separate schedules or exhibits not filed with or incorporated by reference in this report, may reflect the parties’ negotiated risk allocation in the particular transaction, may be qualified by materiality standards that differ from those applicable for securities law purposes, may not be true as of the date of this report or any other date, and may be subject to waivers by any or all of the parties. Where exhibits and schedules to agreements filed or incorporated by reference as Exhibits hereto are not included in these Exhibits, such exhibits and schedules to agreements are not included or incorporated by reference herein. The following Exhibits are attached hereto or incorporated by reference herein (unless indicated otherwise, all documents referenced below were filed pursuant to the Exchange Act by Seacoast Banking Corporation of Florida, Commission File No. 0-13660): Exhibit 3.1.1 Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed May 10, 2006. Exhibit 3.1.2 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 23, 2008.   The following Exhibits are attached hereto or incorporated by reference herein (unless indicated otherwise, all documents referenced below were filed pursuant to the Exchange Act by Seacoast Banking Corporation of Florida, Commission File No. 0-13660): Exhibit 3.1.1 Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed May 10, 2006. Exhibit 3.1.2 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 23, 2008. Exhibit 3.1.3 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.4 to the Company’s Form S-1, filed June 22, 2009.   Exhibit 3.1.4 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed July 20, 2009.   Exhibit 3.1.5 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 3, 2009.   Exhibit 3.1.6 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K/A, filed July 14, 2010.   Exhibit 3.1.7 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed June 25, 2010.   Exhibit 3.1.8 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed June 1, 2011.   Exhibit 3.1.9 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 13, 2013.   Exhibit 3.2 Amended and Restated By-laws of the Company Incorporated herein by reference from Exhibit 3.2 to the Company’s Form 8-K, filed December 21, 2007.   Exhibit 4.1 Specimen Common Stock Certificate Incorporated herein by reference from Exhibit 4.1 to the Company’s Form 10-K, filed on March 17, 2014.   Exhibit 4.2 Junior Subordinated Indenture Dated as of March 31, 2005, between the Company and Wilmington Trust Company, as Trustee (including the form of the Floating Rate Junior Subordinated Note, which appears in Section 2.1 thereof), incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed April 5, 2005. Exhibit 4.3 Guarantee Agreement Dated as of March 31, 2005 between the Company, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, incorporated herein by reference from Exhibit 10.2 to the Company’s Form 8-K filed April 5, 2005. Exhibit 4.4 Amended and Restated Trust Agreement Dated as of March 31, 2005, among the Company, as Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee and the Administrative Trustees named therein, as Administrative Trustees (including exhibits containing the related forms of the SBCF Capital Trust I Common Securities Certificate and the Preferred Securities Certificate), incorporated herein by reference from Exhibit 10.3 to the Company’s Form 8-K filed April 5, 2005.   Exhibit 4.3 Guarantee Agreement Dated as of March 31, 2005 between the Company, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, incorporated herein by reference from Exhibit 10.2 to the Company’s Form 8-K filed April 5, 2005. Exhibit 4.4 Amended and Restated Trust Agreement Dated as of March 31, 2005, among the Company, as Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee and the Administrative Trustees named therein, as Administrative Trustees (including exhibits containing the related forms of the SBCF Capital Trust I Common Securities Certificate and the Preferred Securities Certificate), incorporated herein by reference from Exhibit 10.3 to the Company’s Form 8-K filed April 5, 2005. Exhibit 4.5 Indenture Dated as of December 16, 2005, between the Company and U.S. Bank National Association, as Trustee (including the form of the Junior Subordinated Debt Security, which appears as Exhibit A to the Indenture), incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed December 21, 2005. Exhibit 4.6 Guarantee Agreement Dated as of December 16, 2005, between the Company, as Guarantor, and U.S. Bank National Association, as Guarantee Trustee, incorporated herein by reference from Exhibit 10.2 to the Company’s Form 8-K filed December 21, 2005. Exhibit 4.7 Amended and Restated Declaration of Trust Dated as of December 16, 2005, among the Company, as Sponsor, Dennis S. Hudson, III and William R. Hahl, as Administrators, and U.S. Bank National Association, as Institutional Trustee (including exhibits containing the related forms of the SBCF Statutory Trust II Common Securities Certificate and the Capital Securities Certificate), incorporated herein by reference from Exhibit 10.3 to the Company’s Form 8-K filed December 21, 2005. Exhibit 4.8 Indenture Dated June 29, 2007, between the Company and LaSalle Bank, as Trustee (including the form of the Junior Subordinated Debt Security, which appears as Exhibit A to the Indenture), incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed July 3, 2007. Exhibit 4.9 Guarantee Agreement Dated June 29, 2007, between the Company, as Guarantor, and LaSalle Bank, as Guarantee Trustee, incorporated herein by reference from Exhibit 10.2 to the Company’s Form 8-K filed July 3, 2007. Exhibit 4.10 Amended and Restated Declaration of Trust Dated June 29, 2007, among the Company, as Sponsor, Dennis S. Hudson, III and William R. Hahl, as Administrators, and LaSalle Bank, as Institutional Trustee (including exhibits containing the related forms of the SBCF Statutory Trust III Common Securities Certificate and the Capital Securities Certificate), incorporated herein by reference from Exhibit 10.3 to the Company’s Form 8-K filed July 3, 2007. Exhibit 4.11 Registration Rights Agreement Dated January 13, 2014, between the Company and CapGen Capital Group III, L.P., incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed January 14, 2014. Exhibit 10.1 Amended and Restated Retirement Savings Plan* Incorporated herein by reference from Exhibit 10.1 to the Company’s Annual Report on Form 10-K, filed March 15, 2011. Exhibit 10.2 Amended and Restated Employee Stock Purchase Plan* Incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement on DEF 14A, filed with the Commission on April 27, 2009. Exhibit 10.3 Dividend Reinvestment and Stock Purchase Plan Incorporated by reference to the Company’s Form S-3 filed on November 12, 2014. Exhibit 10.4 2000 Long Term Incentive Plan as Amended* Incorporated herein by reference from the Company’s Registration Statement on Form S-8 File No. 333-49972, filed November 15, 2000, and Proxy Statement on Form DEF 14A, filed on March 13, 2000. Exhibit 10.5 Executive Deferred Compensation Plan* Incorporated herein by reference from Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed March 30, 2001. Exhibit 10.6 Change of Control Employment Agreement* Dated December 24, 2003 between William R. Hahl and the Company, incorporated herein by reference from Exhibit 10.17 to the Company’s Form 8-K, filed December 29, 2003. Exhibit 10.7 Amended and Restated Directors Deferred Compensation Plan* Incorporated herein to the Company’s Form 10-K filed March 14, 2016. Exhibit 10.8 2008 Long-Term Incentive Plan* Incorporated herein by reference from Exhibit A to the Company’s Proxy Statement on Form DEF 14A, filed March 18, 2008. Exhibit 10.9 Form of 409A Amendment to Employment Agreement with William R. Hahl* Incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed January 5, 2009. Exhibit 10.10 2013 Incentive Plan Incorporated herein by reference from Appendix A to the Company’s Proxy Statement on Form DEF 14A, filed April 9, 2013. Exhibit 10.11 Letter Agreement Regarding Lead Director Position* Dated March 1, 2014 between Roger O. Goldman and the Company, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed March 6, 2014. Exhibit 10.12 Form of Change of Control Employment Agreement with Daniel Chappell, Charles Cross, David Houdeshell, Jeffery D. Lee and Charles Shaffer* Incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed November 3, 2014. Exhibit 10.13 Employment Agreement* Dated December 18, 2014 between Dennis S. Hudson, III and the Company, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed December 19, 2014. Exhibit 10.14 Agreement and Plan of Merger Dated March 25, 2015, by and among the Company, Seacoast Bank, Grand Bankshares, Inc. and Grand Bank & Trust of Florida, incorporated herein by reference from Exhibit 2.1 to the Company’s Form 8-K, filed March 31, 2015. Exhibit 10.15 Branch Sale Agreement Dated October 14, 2015, by and between Seacoast Bank and BMO Harris Bank N.A., incorporated herein by reference from Exhibit 2.1 to the Company’s Form 8-K, filed October 19, 2015. Exhibit 10.16 Agreement and Plan of Merger Dated November 2, 2015, by and among the Company, Seacoast Bank, National Association, as Trustee (including the form of the Junior Subordinated Debt Security, which appears as Exhibit A to the Indenture), incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed December 21, 2005. Exhibit 4.6 Guarantee Agreement Dated as of December 16, 2005, between the Company, as Guarantor, and U.S. Bank National Association, as Guarantee Trustee, incorporated herein by reference from Exhibit 10.2 to the Company’s Form 8-K filed December 21, 2005. Exhibit 4.7 Amended and Restated Declaration of Trust Dated as of December 16, 2005, among the Company, as Sponsor, Dennis S. Hudson, III and William R. Hahl, as Administrators, and U.S. Bank National Association, as Institutional Trustee (including exhibits containing the related forms of the SBCF Statutory Trust II Common Securities Certificate and the Capital Securities Certificate), incorporated herein by reference from Exhibit 10.3 to the Company’s Form 8-K filed December 21, 2005. Exhibit 4.8 Indenture Dated June 29, 2007, between the Company and LaSalle Bank, as Trustee (including the form of the Junior Subordinated Debt Security, which appears as Exhibit A to the Indenture), incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed July 3, 2007. Exhibit 4.9 Guarantee Agreement Dated June 29, 2007, between the Company, as Guarantor, and LaSalle Bank, as Guarantee Trustee, incorporated herein by reference from Exhibit 10.2 to the Company’s Form 8-K filed July 3, 2007. Exhibit 4.10 Amended and Restated Declaration of Trust Dated June 29, 2007, among the Company, as Sponsor, Dennis S. Hudson, III and William R. Hahl, as Administrators, and LaSalle Bank, as Institutional Trustee (including exhibits containing the related forms of the SBCF Statutory Trust III Common Securities Certificate and the Capital Securities Certificate), incorporated herein by reference from Exhibit 10.3 to the Company’s Form 8-K filed July 3, 2007. Exhibit 4.11 Registration Rights Agreement Dated January 13, 2014, between the Company and CapGen Capital Group III, L.P., incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed January 14, 2014. Exhibit 10.1 Amended and Restated Retirement Savings Plan* Incorporated herein by reference from Exhibit 10.1 to the Company’s Annual Report on Form 10-K, filed March 15, 2011. Exhibit 10.2 Amended and Restated Employee Stock Purchase Plan* Incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement on DEF 14A, filed with the Commission on April 27, 2009. Exhibit 10.3 Dividend Reinvestment and Stock Purchase Plan Incorporated by reference to the Company’s Form S-3 filed on November 12, 2014. Exhibit 10.4 2000 Long Term Incentive Plan as Amended* Incorporated herein by reference from the Company’s Registration Statement on Form S-8 File No. 333-49972, filed November 15, 2000, and Proxy Statement on Form DEF 14A, filed on March 13, 2000. Exhibit 10.5 Executive Deferred Compensation Plan* Incorporated herein by reference from Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed March 30, 2001. Exhibit 10.6 Change of Control Employment Agreement* Dated December 24, 2003 between William R. Hahl and the Company, incorporated herein by reference from Exhibit 10.17 to the Company’s Form 8-K, filed December 29, 2003. Exhibit 10.7 Amended and Restated Directors Deferred Compensation Plan* Incorporated herein to the Company’s Form 10-K, filed March 14, 2016. Exhibit 10.8 2008 Long-Term Incentive Plan* Incorporated herein by reference from Exhibit A to the Company’s Proxy Statement on Form DEF 14A, filed March 18, 2008. Exhibit 10.9 Form of 409A Amendment to Employment Agreement with William R. Hahl* Incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed January 5, 2009. Exhibit 10.10 2013 Incentive Plan Incorporated herein by reference from Appendix A to the Company’s Proxy Statement on Form DEF 14A, filed April 9, 2013. Exhibit 10.11 Letter Agreement Regarding Lead Director Position* Dated March 1, 2014 between Roger O. Goldman and the Company, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed March 6, 2014. Exhibit 10.12 Form of Change of Control Employment Agreement with Daniel Chappell, Charles Cross, David Houdeshell, Jeffery D. Lee and Charles Shaffer* Incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed November 3, 2014. Exhibit 10.13 Employment Agreement* Dated December 18, 2014 between Dennis S. Hudson, III and the Company, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed December 19, 2014. Exhibit 10.14 Agreement and Plan of Merger Dated March 25, 2015, by and among the Company, Seacoast National, Grand Bankshares, Inc. and Grand Bank & Trust of Florida, incorporated herein by reference from Exhibit 2.1 to the Company’s Form 8-K, filed March 31, 2015. Exhibit 10.15 Branch Sale Agreement Dated October 14, 2015, by and between Seacoast National and BMO Harris Bank N.A., incorporated herein by reference from Exhibit 2.1 to the Company’s Form 8-K, filed October 19, 2015. Exhibit 10.16 Agreement and Plan of Merger Dated November 2, 2015, by and among the Company, Seacoast National, Floridian Financial Group, Inc. and Floridian Bank, incorporated herein by reference from Exhibit 2.1 to the Company’s Form 8-K, filed November 4, 2015.   Exhibit 10.17 Change of Control Employment Agreement* Dated August 6, 2015 between Stephen Fowle and the Company, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed August 10, 2015.   Exhibit 10.18 Executive Transition Agreement* Dated April 30, 2015 between William R. Hahl and the Company, incorporated herein to the Company’s Form 10-K, filed March 14, 2016.   Exhibit 10.19 Observation Rights Agreement Dated March 23, 2016, Observer Rights Agreement by and between the Company, Basswood and Matthew Lindenbaum, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed March 24, 2016. Exhibit 10.20 Amendment No. 1 to Observer Rights Agreement Dated July 26, 2016, the Company entered into Amendment No. 1 to the Observer Rights Agreement dated as of March 23, 2016, whereby the date which either Matthew Lindenbaum or the Company may terminate the Agreement was extended, incorporated herein by reference from Exhibit 10.1 to the Company’s From 8-K, filed July 29, 2016. Exhibit 10.21 Form of Change of Control Employment Agreement with Charles Cross, David Houdeshell and Charles Shaffer Incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K, filed September 23, 2016. Exhibit 10.22 Agreement and Plan of Merger Dated November 3, 2016, by and among the Company, Seacoast Bank, GulfShore Bancshares, Inc. and GulfShore Bank, incorporated herein by reference from Exhibit 2.1 to the Company’s Form 8-K, filed Novembe r 9, 2016. Exhibit 21 Subsidiaries of Registrant   Exhibit 23.1 Consent of Independent Registered Public Accounting Firm Exhibit 23.2 Consent of Independent Registered Public Accounting Firm   Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   Exhibit 32.1** Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 111 the Emergency Economic Stability Act, as amended   Exhibit 32.2** Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 111 the Emergency Economic Stability Act, as amended   Exhibit 101 Interactive Data File   * Management contract or compensatory plan or arrangement.   ** The certifications attached as Exhibits 32.1 and 32.2 accompany this Annual Report on Form 10-K and are “furnished” to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Exchange Act.   (b) Exhibits (b)       Exhibits   The response to this portion of Item 15 is submitted under item (a)(3) above.   (c) Financial Statement Schedules (c)       Financial Statement Schedules   None. SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     SEACOAST BANKING CORPORATION OF FLORIDA   (Registrant)         By: /s/ Dennis S. Hudson, III     Dennis S. Hudson, III     Chairman of the Board and Chief Executive Officer Date: March 14, 2017 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date   Date:  March 14, 2016     /s/ Dennis S. Hudson, III Pursuant to the requirements March 14, 2017 Dennis S. Hudson, III, Chairman of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantBoard, Chief Executive Officer and in the capacitiesDirector (principal executive officer) /s/ Stephen A. Fowle March 14, 2017 Stephen A. Fowle, Executive Vice President and on the dates indicated. Chief Financial Officer (principal financial and accounting officer) /s/ Dennis J. Arczynski March 14, 2017 Dennis J. Arczynski, Director /s/ Stephen E. Bohner Date /s/ Dennis S. Hudson, III March 14, 2016 Dennis S. Hudson, III, Chairman of the Board, Chief Executive Officer and Director (principal executive officer) /s/ Stephen A. Fowle March 14, 2016 Stephen A. Fowle, Executive Vice President and Chief Financial Officer (principal financial and accounting officer) /s/ Dennis J. Arczynski March 14, 2016 Dennis J. Arczynski, Director /s/ Stephen E. Bohner March 14, 2016 Stephen E. Bohner, Director /s/ T. Michael Crook March 14, 2016 March 14, 2017 Stephen E. Bohner, Director /s/ T. Michael Crook March 14, 2017 T. Michael Crook, Director     Date       /s/ H. Gilbert Culbreth, Jr. March 14, 2016 /s/ H. Gilbert Culbreth, Jr. March 14, 2017 H. Gilbert Culbreth, Jr, Director     /s/ Julie H. Daum March 14, 2016 Julie H. Daum, Date /s/ Christopher E. Fogal March 14, 2017 Christopher E. Fogal, Director /s/ Maryann Goebel March 14, 2017 Maryann Goebel, Director /s/ Roger O. Goldman March 14, 2017 Roger O. Goldman, Lead Director /s/ Dennis S. Hudson, Jr. March 14, 2017 Dennis S. Hudson, Jr., Director /s/ Timothy S. Huval March 14, 2017 Timothy S. Huval, Director /s/ Thomas E. Rossin March 14, 2017 Thomas E. Rossin, Director     /s/ Christopher E. Fogal March 14, 2016 Christopher E. Fogal, Director /s/ Dennis S. Hudson, Jr. March 14, 2016 Dennis S. Hudson, Jr., Director /s/ Thomas E. Rossin March 14, 2016 Thomas E. Rossin, Director 55 56      Item 7.              MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The purpose of this discussion and analysis is to aid in understanding significant changes in the financial condition of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) and their results of operations during 2016, 2015 and 2014. Nearly all of the Company’s operations are contained in its banking subsidiary, Seacoast Bank (“Seacoast Bank” or the “Bank”). This discussion and analysis is intended to highlight and supplement information presented elsewhere in the annual report on Form 10-K, particularly the consolidated financial statements and related notes appearing in Item 8. For purposes of the following discussion, the words the “Company,” “we,” “us,” and “our” refer to the combined entities of Seacoast Banking Corporation of Florida and its direct and indirect wholly owned subsidiaries. Overview – Strategy and Results Seacoast continues to execute on its plan to grow our core business organically, innovate to build our franchise and increase efficiency, and grow through mergers and acquisitions. We believe that these investments in growth, efficiency and digital transformation better position us to grow shareholder value today and prospectively. Highlights of our performance in 2016 included:   Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The purpose of this discussion · 27% year-over-year revenue growth during 2016, outpacing a 26% increase in noninterest expense over the corresponding period. Adjusted revenues, excluding securities gains and analysis is to aid in understanding significant changes in the financial condition of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) and their results of operations during 2015, 2014 and 2013. Nearly all of the Company’s operations are contained in its banking subsidiary, Seacoast Bank (“Seacoast Bank” or the “Bank”). This discussion and analysis is intended to highlight and supplement information presented elsewhere in the annual report on Form 10-K, particularly the consolidated financial statements and related notes appearing in Item 8. For purposes of the following discussion, the words the “Company,” “we,” “us,” and “our” refer to the combined entities of Seacoast Banking Corporation of Florida and its direct and indirect wholly owned subsidiaries. Overview – Strategy and Results Seacoast continues to execute on its plan to grow our core business organically, innovate to build franchise and increase efficiency, and grow through mergers and acquisitions. We believe that these investments better position us to increase net income to common shareholders today and prospectively. These included: · continued investments in digital technology and improved processes providing significant cross sell to legacy customers and opportunities to reduce overhead; · consolidation of branch locations, totaling more than 25% of total branch locations over the past five years, with four more legacy Seacoast branches to consolidate in the first half of 2016; · Investment in the Accelerate lending model, expanding geographically with low cost, high service community banking offices; and · completion of our acquisitions of The BANKshares, Inc. (“BANKshares”) on October 1, 2014, and Grand Bankshares, Inc. (“Grand”)  on July 17, 2015, and prospective purchase from BMO Harris Bank, N.A. (“BMO”) and Floridian Financial Group, Inc. (“Floridian”) in 2016. We introduced Seacoast’s Accelerate commercial banking model in 2011, and in 2013 began to invest in analytics, digital servicing capabilities and digital marketing talent and technology. Through these investments, the Company continues to focus on reaching customers in unique ways, creating a path to achieve higher customer satisfaction. The commercial lending offices provide our customers with talented, results-oriented staff, specializing in loans to the smaller business market segment. From their tenure and market experience, our bankers are familiar with the multitude of challenges the small business customer faces. In addition, Seacoast is building a fully integrated distribution platform across all channels to provide our customers with the ability to choose their path of convenience to satisfy their banking needs. In 2015, we rolled out our integrated digital marketing, automated cross-sell, and deeper customer analytics which are building value as we move forward. In 2015, we also absorbed incremental costs to support better channel integration including the expansion of our 24/7 call center, that now originates over 10% of our deposit relationships and nearly 30% of our consumer loan production and expansion plans for this group in 2016 should provide ever greater lift. We have proactively positioned our business for growth. Excluding the acquisitions, loan growth for 2015 of $218 million or 12% above prior year and core customer funding of $286 million or 13% above a year ago was recorded. We believe our targeted plan to grow our customer and commercial franchise is the best way to build shareholder value. While our focus is organic growth, we have periodically supplemented this growth through strategic acquisition opportunities. Nearly a year after completing our BANKshares acquisition, customer metrics for Winter Park, Florida based BankFIRST are strong, with household growth in the former BankFIRST Orlando market of 7% annualized. Recently, we completed an enhancement to our footprint in the Palm Beach County, Florida market. On July 17, 2015, the acquisition of Grand, and its subsidiary, Grand Bank & Trust of Florida, was completed, further solidifying our market share in the Palm Beach county market, expanding our customer base further, providing service fee income opportunities, and leveraging operating costs through economies of scale. The Grand acquisition was completed with no tangible book value dilution and is immediately accretive to our earnings per share. In fact, we recorded a bargain purchase gain (net) of $416,000 in 2015 from the acquisition of Grand. Our acquisitions increased the number of households we serve in two of Florida’s fastest growing markets, boosting our growth trajectory. The Company continues to focus on reaching customers in unique ways, focusing on convenience and service, building higher customer satisfaction. The acquisition of a receivables factoring subsidiary in the BANKshares merger was further enhanced by the addition of a receivables funding team from First Capital Growth (FGC) in the Palm Beach County market in the second quarter of 2015, providing an additional product vehicle to better serve customers.. We believe digital delivery and products have contributed to growing our franchise. As of December 31, 2015, approximately 64 percent of our online customers have adopted mobile product offerings and the total number of services utilized by our retail customers increased to an average of 4.3 per household, primarily due to an increase in debit card activation, direct deposit and mobile banking users. Personal and business mobile banking has grown from 13,659 users at December 31, 2013 to 21,587 users at December 31, 2014, to 32,305 users at December 31, 2015. The growth in new households, a deepening of relationships with current households, and better retention overall is creating stronger value in our core customer franchise. We also refreshed and reintroduced our brand in 2014, retooling our logo and associated signage throughout our branch network and digital platforms in the fourth quarter 2015 grew 28%, outpacing a 14% increase in adjusted noninterest expenses over the same period. Adjusted revenues and adjusted noninterest expense are non-GAAP measures (see page 92, “Explanation of 2014. Our new brand reflects our forward-looking strategy and we are reaping the benefits from continued investmentsCertain Unaudited Non-GAAP Financial Measures” in analytics, digital servicing capabilities and technology, and reducing future overhead, with households (excluding acquisitions) growing 5% year-over-year and for the fourth quarter“Results of 2015. Operations”);   Our shift to an upgraded technology platform has enabled us to effectively adapt to changes in consumer behavior. Embracing technology, especially electronic delivery channels, has helped us improve efficiency. Over the past five years we have been successful in closing more than 25% · achievement of our branches.$1.00 adjusted diluted earnings per share goal for 2016, a non-GAAP measure (see page 92, “Explanation of Certain Unaudited Non-GAAP Financial Measures”in “Results of Operations”). This has allowed usmetric represented a 35% increase from the prior year, exiting 2016 on a strong upward trajectory and on a path to improve our depositoutperform peers; · reduction in costs related to facilities square footage from between $9,000 and $10,000 of deposits per square foot to approximately $13,000 of deposits per square foot, a more than 35% improvement. During 2014 and 2015, we consolidated several branch locations, with the closure of seven legacy branch offices and addition of two new offices, and we recently announced four additional branch consolidations, to occur ina substantial portion of cost savings coming from the first six monthsintegration of 2016 (see “Part I, Item 2 – Properties” for more detail). Prospectively,BMO Harris and Floridian offices during the second and third quarters of 2016; · continuation of our analytics-driven cross sell and improved sales execution combined with a reduction of more expensive, traditional banking facilities, and related personnel costs, by Seacoast is likely, as digital and phone based channels expand dramatically. The combination of the above actions resulted in revenue (aggregate net interest income and noninterest income) increasing significantly for 2015, higher by $42.0 million or 41.9%favorable Florida economy that drove record loan production; total loans increased 34% compared to results for 2014. We coupled this growtha year ago, with managed expenses, while investing significantly for our future. Combined operating leverage drove improve net income available to common shareholders (on a GAAP basis) totaled $22.1 million or $0.66 per diluted share for 2015, compared to $5.7 million or $0.21 per diluted share for 2014, and $47.9 million or $2.44 per diluted share for 2013. Net income for 2013 benefited from the recapture of $44.8 million of deferred tax allowance in the third quarter of that year. Acquisitions – Enhancing Our Success in 2015 and an Update for 2016 record production volumes;   Enhancing · completion and successful integration of our footprint were the acquisitions of Grand in 2015Floridian Financial Group, Inc. (Floridian) on March 11, 2016, and BANKshares late in 2014 (see “Note T – Business Combinations”). The Company’s primary reasons for these transactions were to further solidify its market share in the attractive Palm Beach and Central Florida markets, expand its customer base and leverage operating cost through economiespurchase of scale.BMO Harris Bank, N.A.’s (“BMO”) Orlando operations on June 3, 2016. These acquisitions not only increased our households, but opened markets and customer bases where our convenience offering resonates. Our model drove net household growthfurther solidified Seacoast’s status in both markets byOrlando, propelling Seacoast to a top-10 position in this market. In 2016, we also announced the third month following acquisition as opposed to net attrition typical for acquisitions. And, both acquisitions were accretive in the first year (excluding merger charges). Merger related charges during 2015 and 2014 summed to $4.3 million in each year, respectively, primarily impacting salaries and wages, outsourced data processing costs, and legal and professional fees. The Grand acquisition contributed $188.5 million in total deposits and $110.0 million in loans to our balance sheet, and the BANKshares acquisition added $516.3 million in total deposits and $365.4 million in loans. We are encouraged by the results from our recent acquisitions and we look forward to greeting more than 5,000 customers of Floridian Bankshares,GulfShore Bancshares, Inc. (“Floridian”GulfShore”) and nearly 9,000 customers from BMO Harris’s Centralin Tampa, Florida banking operations. Regulatory approval for both of transactions has been received andwhich we expect to close the Floridian acquisition late in the first quarter of 2016 and the BMO Harris branch purchase late in the second quarter of 2016, subject in both instances to customary closing conditions (see “Note T – Business Combinations”). The Company will likely continue to consider strategic acquisitions as part of the Company’s overall future growth plans. The Florida Economy Florida’s economic recovery is now well established, with solid job growth, declining unemployment, and higher consumer confidence fueling improvements in our markets. We believe the Florida economy will further strengthen in 2016, as we continue to attract population inflows. Our housing markets, manufacturing base, tourism and services industries are building on current momentum, and provide a diversified base for our economy. The residential real estate market is becoming stronger as pricing continues to firm and sales volumes continue to increase. Many seasonal businesses are now reporting improving trends. Our primary competitors now are the mega-banks, and many of these large institutions are struggling with higher capital requirements and new restrictions and regulations that are requiring difficult choices regarding their business models. We continue to believe we have entered a period of opportunity to achieve meaningful market share gains. The Florida economy continues to amplify our success and the state of Florida remains an attractive market in which to live and work. Also, there are many positive indications that Florida’s economy will continue to improve. Wells Fargo Securities Group’s December 18, 2015 report titled, “Florida Employment Update: November 2015” stated, “ Florida’s economy is firing on all cylinders…Florida added a nation-leading 32,500 jobs in November, which marks the largest monthly job gain for the Sunshine State since May 2010. On a year-to-date basis, nonfarm employment has risen 3.0 percent, resulting in a net gain of 239,600 jobs.” In addition, Comerica Bank’s Comerica Economic Insights report dated January 5, 2016 stated, “Our Florida Economic Activity Index increased again in October, for the 19th consecutive month. Most components of the index were positive in October. Only state exports and housing starts were negative for the month. The Florida economy is firmly re-established as a growth leader for the U.S….we see no reason for the positive trend to change in the near term. Our BusinessApril 7, 2017. We introduced Seacoast’s Accelerate commercial banking model in 2011, strategically opening offices in the larger metropolitan markets we serve, including Orlando, Boca Raton and Ft. Lauderdale. The commercial lending offices provide our customers with talented, results-oriented staff, specializing in loans to businesses with revenues above $5 million in specific industries. From their tenure and market experience, our bankers are familiar with the multitude of challenges the small business customer faces. Through this investment, the Company continues to focus on reaching customers in unique ways, creating a path to achieve higher customer engagement. In addition, Seacoast has built a fully integrated distribution platform across all channels to provide our customers with the ability to choose their path of convenience to satisfy their banking needs, and which provides us an opportunity to reach our customers through a variety of sales channels. For 2016, Seacoast’s debit card spend was up 17% year-over-year, a new high, consumer loans sold to existing customers increased 62% and 37% of check deposits were made outside the branch. Expansion of our 24/7/365 call center in early 2017, further enhances our distribution system, with over 11% of our deposit relationships and nearly 16% of our consumer loan production originated through this channel during 2016. Taken together, we have proactively positioned our business for growth. Excluding the acquisitions, loan growth reached $377 million or 18%, compared to $218 million or 12% growth for 2015. We believe digital delivery and products have contributed to growing our franchise. As of December 31, 2016, approximately 70% of our online customers adopted mobile product offerings and the total number of services utilized by Seacoast’s retail customer averaged 4.4 per household, primarily due to increases in debit card activation, direct deposit and mobile banking users. Personal and business mobile banking has grown from 21,587 users at December 31, 2014, to 32,305 users at December 31, 2015, to 47,131 users at December 31, 2016. The growth in new households, a deepening of relationships with current households, and better retention overall is creating stronger value in our core customer franchise. Our brand reflects our forward-looking strategy and our intent to benefit from continued investments in analytics, digital servicing capabilities and technology, and reduce overhead. Embracing technology, especially electronic delivery channels, has helped us improve efficiency. During 2016, we added 24 branches, but we were also successful in closing 20 branches. This has allowed us to improve deposits per facility, with total deposits per branch increasing to $75 million at December 31, 2016, from $66 million one year earlier. We expect to continue consolidating our more expensive, traditional banking facilities, and related personnel costs, as digital and call center channels expand dramatically. The combination of the above actions improved net income available to common shareholders (on a GAAP basis) totaling $29.2 million or $0.78 per diluted share, compared to $22.1 million or $0.66 per diluted share for 2015, and $5.7 million or $0.21 per diluted share for 2014. Acquisitions – Enhancing Our Success Enhancing our footprint were the acquisitions of Floridian and BMO offices in 2016, Grand in 2015 and BANKshares late in 2014 (see “Note S – Business Combinations”). Our primary reasons for these transactions were to further solidify our market share in the attractive Palm Beach and Central Florida markets, expand our customer base and leverage operating costs through economies of scale. These acquisitions not only increased our households, but opened markets and customer bases where our convenience offering resonates. These acquisitions were accretive in the first year (excluding merger charges). In aggregate, the Floridian and BMO acquisitions contributed $651 million in total deposits and $328 million in loans to our balance sheet, the Grand acquisition provided $188 million in total deposits and $111 million in loans to our balance sheet, and the BANKshares acquisition added $516 million in total deposits and $365 million in loans. Merger related charges for 2016, 2015 and 2014 summed to $8.7 million, $4.3 million and $4.3 million, respectively, primarily impacting salaries and wages, outsourced data processing costs, and legal and professional fees. During the fourth quarter of 2016, we announced our acquisition of GulfShore, jumpstarting our entry into the Tampa market. We look forward to a significant opportunity in the fast-growing, business rich Tampa market in the second quarter of 2017. As we approach this market we plan to use lessons learned from our successful build in the fast-growing Orlando marketplace. We are now the largest Florida-based bank in Orlando and a top-10 bank in this market overall. At year-end 2016, Orlando represents 37% of our franchise, measured by deposits. Regulatory approval for the GulfShore transaction has been received and we are waiting for shareholder approval, with the close of the GulfShore acquisition expected on April 7, 2017, subject to customary closing conditions (see “Note S – Business Combinations”). The Company will likely continue to consider strategic acquisitions as part of the Company’s overall future growth plans. The Florida Economy Florida’s economic recovery is now well established, with solid job growth, declining unemployment, and higher consumer confidence fueling improvements in our markets. Florida’s economic indicators continue to show strength for the state. We believe the Florida economy will further strengthen in 2017, as the state continues to attract population inflows. Florida’s housing markets, manufacturing base, tourism and services industries provide a diversified base for our economy. The residential real estate market is becoming stronger as pricing and sales volumes continue to increase. Our primary competitors now are the mega-banks, and many of these large institutions are struggling with higher capital requirements and new restrictions and regulations that are requiring difficult choices regarding their business models. We continue to believe we have entered a period of opportunity to achieve meaningful market share gains. The Florida economy continues to amplify our success and the state of Florida remains an attractive market in which to live and work. There are many positive indications that Florida’s economy will continue to improve. A December 2016 report from Wells Fargo Securities Economics Group stated, “The recently updated state (Florida) GDP data and the Quarterly Census of Employment and Wages (“QCEW”) provide additional insight into Florida’s recent strong economic performance. Florida’s economy grew 2.9% year-over-year in Q2, far exceeding the nation’s 1.2% growth.” Their November report forecasted, “We look for Florida’s strong run of economic growth to carry over into 2017, albeit at a slightly more modest pace. Real GDP should grow 3.3% next year and nonfarm payrolls should add around 235,000 new jobs. Homebuilding should continue to gain momentum, as stronger jobs and income growth boosts household formation and encourages more job seekers to move to Florida.” Florida’s residential real estate market remains solid. Recent Florida REALTORS reports indicate year over year increase in closed sales and median sales price, with time to contract continuing a shortening trend. Our Business The Company is a single-bank holding company with operations on Florida’s southeast coast (ranging from Broward and Palm Beach County in the south to Brevard and Volusia County in the north) as well as Florida’s interior around Lake Okeechobee and up through Orlando (including Orange, Seminole and Lake County). Additionally, in 2016 we began to serve the attractive Tampa market and announced the GulfShore acquisition to fortify our presence. The Company had 47 full service offices at December 31, 2016, an increase of four offices from December 31, 2015. The Company operates both a full retail banking strategy in its core markets, which are some of Florida’s wealthiest, as well as a commercial banking strategy serving small- to mid-sized businesses. The Company, through its bank subsidiary, provides a broad range of community banking services to commercial, small business and retail customers, offering a variety of transaction and savings deposit products, treasury management services, brokerage, and secured and unsecured loan products, including revolving credit facilities, letters of credit and similar financial guarantees, and asset based financing. Seacoast also provides trust and investment management services to retirement plans, corporations and individuals. The Company is a single-bank holding company with operations on Florida’s southeast coast (ranging from Broward and Palm Beach County in the south to Brevard and Volusia County in the north) as well as Florida’s interior around Lake Okeechobee and up through Orlando (including Orange, Seminole and Lake County). The Company had 43 full service offices at December 31, 2015, the same count as at December 31, 2014. The Company operates both a full retail banking strategy in its core markets, which are some of Florida’s wealthiest, as well as a complete commercial banking strategy. The Company, through its bank subsidiary, provides a broad range of community banking services to commercial, small business and retail customers, offering a variety of transaction and savings deposit products, treasury management services, brokerage, and secured and unsecured loan products, including revolving credit facilities, letters of credit and similar financial guarantees, and asset based financing. Seacoast also provides trust and investment management services to retirement plans, corporations and individuals. Loan Growth and Lending Policies   For 2015,2016, balances in the loan portfolio increased 18.4%34%, compared with an increase of 39.7%18% for 2014 and an increase of 6.4% for 2013,2015, reflecting strong business production and the acquisitions of Floridian, BMO, Grand and BANKshares and a significant improvement from the recessionary climate impacting prior years.BANKshares. Adjusting for the loans acquired from Grand and BANKshares,through acquisitions, the loan portfolio grew 12.0%18% and 11.8%12% during 2016 and 2015, and 2014, respectively. Additional commercial relationship managers hired during 2013 at our new Accelerate commercial lending offices increased loan growth in 2014.   Loan production improved during 2015, 20142016 and 20132015 and growth continued across all business lines. For 2015, almost $2992016, $432 million in commercial/commercial real estate loans were originated, compared to $258 million and $200$299 million for 2014 and 2013, respectively.2015. Our loan pipeline for commercial/commercial real estate loans totaled $89 million at December 31, 2016, versus $106 million at December 31, 2015, versus $60 million at December 31, 2014.2015. The Company also closed $272$403 million in residential loans during 2015,2016, compared to $225$272 million in 2014 and $251 million in 2013.2015. The residential loan pipeline at December 31, 20152016 totaled $30$73 million, versus $20$30 million a year ago. StabilizingIncreasing home values and lower interest rates have renewed the consumer’sbolstered consumer interest in borrowing. Consumer and small business originations improved as well, totaling $302 million during 2016 compared to $203 million during 2015.   The Company expects to have more loan growth opportunities for all types of lending in 2016, including commercial lending to targeted customer segments and 1-4 family agency conforming residential mortgages.2017. We will continue to expand our business banking teams, adding new, seasoned, commercial loan officers where market opportunities arise, and improveimproving service through electronic and digital means. In addition, the addition of receivables factoring provides another vehicle to better serve customers. We believe that achieving our loan growth objectives, together with the prudent management of credit costs and problem loan related expensesrisk will provide us with the potential to make further, meaningful improvements to our earnings in 2016.2017. Our strong growth is accompanied by sound risk management procedures. Our lending policies contain numerous guardrails that pertain to lending by type of collateral and purpose, along with limits regarding loan concentrations and the dollar amount (size) of loans. With a disciplined approach, we have benefited from having loan production and loan pipelines that are diverse, de-risking our loan portfolio as a whole.balance sheet. For example, in recent years the Company increased its focus and monitoring of its exposure to residential land, acquisition and development loans. Overall, the Company has reduced its exposure to commercial developers of residential land, acquisition and development loans from its peak of $352 million or 20.2%20% of total loans in early 2007 to $32$30 million or 2.4%1% at December 31, 2015.2016. Our exposure to commercial real estate lending is significantly below regulatory limits (see “Loan Concentrations”). Deposit Growth, Mix and Costs   The Company’s focus on convenience, with high quality customer service, expanded digital offerings and distribution channels and convenient branch locations provides stable, low cost core deposit funding for the company. Over the past several years, the Company has strengthened its retail deposit franchise using new strategies and product offerings, while maintaining a focus on growing customer relationships. We believe that digital product offerings are central to core deposit growth as access via these distribution channels is required by customers. During the last two years, we have significantly grown our average transaction deposits (noninterest and interest bearing demand), with significant increases of $379.3 million or 26% in 2016 and $375.8 million or 34.9%35% in 2015 and $157.8 million or 17.2% in 2014.2015. Along with new relationships, our deposit programs and digital sales have improved our market share and increased average services per household, and decreased customer attrition.household.   Our growth in core deposits has also provided decreasedlow funding costs. Declines in the average balance for certificates of deposit (“CDs”), which are a higher cost of funds, continued in 2015, 2014 and 2013, but growth in core deposit relationships more than offset such declines. The Company’s deposit mix remains favorable, with 8990 percent of average deposit balances comprised of savings, money market, as well as, interest bearing and noninterest bearing demand deposits in the fourth quarter of 2015.2016. The Company’s average cost of deposits, including noninterest bearing demand deposits, was 0.12%0.14% for each 2014 and 2015, decreasing 4 basis points from 0.16% for 2013. The Company believes its2016, slightly above 2015’s rate of 0.13%, as acquired deposits marginally increased the Company’s cost of deposits ranks among the lowest when compared to other banks operating in the Company’s market.deposits.   During 2015,2016, total deposits increased $679 million or 24% and sweep repurchase agreements grew $32 million or 19%, versus 2015. In comparison, total deposits increased $428 million or 17.7% and sweep repurchase agreements $18 million or 12.0%, versus 2014. In comparison, total deposits increased $610 million or 33.8%18% and sweep repurchase agreements increased $2$18 million or 1.5%12% during 2014,2015, versus 2013.2014. Deposits for 2016 included acquired balances from Floridian and BMO that aggregated to over $651 million and deposits for 2015 includeincluded acquired deposits of nearly $189 million from Grand and deposits for 2014 include acquired balances from BANKshares of approximately $516 million.Grand. Most of the increase in sweep repurchase agreements during 20152016 and 20142015 was in public funds, principally from higher seasonal tax collector receipts.receipts from property owners.   Our successful retail and business deposit growth initiatives continue to be emphasized and we expect further increases in households served for 2016. Financial Condition   Total assets increased $1.15 billion or 32% to $4.68 billion at December 31, 2016, after increasing $441.4 million or 14.3 percent14% to $3,534.8 million at December 31, 2015, after increasing $824.4 million or 36.3% to $3,093.3 million$3.53 billion in 2014. The2015. Growth highlights of 2015 and 2014 were our acquisitions,acquisitions; Floridian which closed March 11, 2016, BMO which closed June 3, 2016, and Grand closing onwhich closed July 17, 2015, and BANKshares which closed on October 1, 2014, and expanding our presence in Palm Beach and Central Florida (particularly in the greater Orlando market), and increasedincreasing total assets by approximately$417 million, $314 million, and $215 million, and $627 million, respectively. The Company is the fifth largest Florida-based bank. 61    Loan Portfolio   Table 97 shows total loans (net of unearned income) for commercial and residential real estate, commercial and financial and consumer loans outstanding.outstanding for the last five years.   Total loans (net of unearned income and excluding the allowance for loan losses) were $2,156.3$2.88 billion at December 31, 2016, $723.2 million or 34% more than at December 31, 2015, and were $2.16 billion at December 31, 2015, $334.4 million or 18.4%18% more than at December 31, 2014,2014. The Floridian and were $1,821.9 million at December 31, 2014, $517.7 million or 39.7% more than at December 31, 2013. TheBMO acquisitions in 2016 and Grand acquisition in 2015, and BANKshares acquisition in 2014 contributed $110.0$276 million, $64 million and $365.4$110 million in loans, respectively. Also, during the last six months of 2016, we purchased four separate mortgage loan pools aggregating to $63.5 million and a marine loan pool of $16.0 million (a total of $79.5 million in loans purchased), and sold two seasoned mortgage portfolio pools (summing to $70.6 million). The sale of mortgage pools believed to have reached their peak in market value resulted in gains of $0.9 million. Success in commercial lending through our legacy franchise and through our Accelerate banking model has increased loan growth. Analytics and digital marketing have further fueled loan growth in the consumer and small business channels. Loan production of $688 million, $424$979 million and $354$688 million was retained in the loan portfolio during the twelve months ended December 31, 2015, 20142016 and 2013,2015, respectively. Successful acquisition activity has further supplemented our growth.   The following table details loan portfolio composition at December 31, 20152016 and 20142015 for portfolio loans, purchase credit impaired loans (“PCI”), and purchase unimpaired loans (“PUL”) as defined in Note E-Loans.   December 31, 2015   Portfolio Loans   PCI Loans   PUL's   Total   December 31, 2016   Portfolio Loans   PCI Loans   PUL's   Total     (Dollars in thousands)     (Dollars in thousands)   Construction and land development   $ 97,629     $ 114     $ 11,044     $ 108,787     $ 137,480     $ 114     $ 22,522     $ 160,116   Commercial real estate(1)     776,875       9,990       222,513       1,009,378       1,041,915       11,257       304,420       1,357,592   Residential real estate     678,131       922       44,732       723,785       784,290       684       51,813       836,787   Commercial and financial     188,013       1,083       39,421       228,517       308,731       941       60,917       370,589   Consumer     82,717       0       2,639       85,356       152,927       0       1,018       153,945   Other loans     507       0       0       507       507       0       0       507   NET LOAN BALANCES (1)   $ 1,823,872     $ 12,109     $ 320,349     $ 2,156,330     $ 2,425,850     $ 12,996     $ 440,690     $ 2,879,536     December 31, 2015   Portfolio Loans     PCI Loans     PUL's     Total       (Dollars in thousands)   Construction and land development   $ 97,629     $ 114     $ 11,044     $ 108,787   Commercial real estate(1)     776,875       9,990       222,513       1,009,378   Residential real estate     678,131       922       44,732       723,785   Commercial and financial     188,013       1,083       39,421       228,517   Consumer     82,717       0       2,639       85,356   Other loans     507       0       0       507   NET LOAN BALANCES   $ 1,823,872     $ 12,109     $ 320,349     $ 2,156,330     December 31, 2014   Portfolio Loans     PCI Loans     PUL's     Total       (Dollars in thousands)   Construction and land development   $ 65,896     $ 1,557     $ 19,583     $ 87,036   Commercial real estate     610,863       4,092       222,192       837,147   Residential real estate     639,428       851       46,618       686,897   Commercial and financial     120,763       1,312       35,321       157,396   Consumer     50,543       2       2,352       52,897   Other loans     512       0       0       512   NET LOAN BALANCES (1)   $ 1,488,005     $ 7,814     $ 326,066     $ 1,821,885   (1) Net loanCommercial real estate includes owner-occupied balances of $623.8 million and $453.3 million at December 31, 2016 and 2015, and 2014 are net of deferred costs of $6,542,000 and $3,645,000.respectively.   Net loan balances at December 31, 2016 and 2015 are net of deferred costs of $4.4 million and $7.7 million, respectively. Commercial real estate mortgages were higher by $172.2increased $348.2 million or 20.6%35% to $1,009.4 million$1.36 billion at December 31, 2015,2016, compared to December 31, 2014,2015, a result of improving loan production and loans acquired in the mergers. GranularityOffice building loans of commercial real estate lending is an aim, with office buildings of $256.2$341.6 million or 25.4%25% of commercial real estate mortgages, comprising thecomprise our largest concentration with a substantial portion owner-occupied. Portfolio composition also includes lending for retail trade, industrial, healthcare, churches and educational facilities, recreation, multifamily, mobile home parks, lodging, restaurants, agriculture, convenience stores, marinas, and other types of real estate.   OverThe Company’s ten largest commercial real estate funded and unfunded loan relationships at December 31, 2016 aggregated to $153.0 million (versus $119.8 million a year ago), of which $148.5 million was funded. The Company’s 65 commercial real estate relationships in excess of $5 million totaled $564.3 million, of which $502.1 million was funded (compared to 47 relationships of $370.9 million a year ago, of which $322.6 million was funded). Fixed rate and adjustable rate loans secured by commercial real estate, excluding construction loans, was $1.042 billion and $315 million, respectively, at December 31, 2016, compared to $743 million and $266 million, respectively, a year ago. Reflecting the past fiveimpact of organic loan growth and the Floridian and BMO loan acquisitions, commercial loans (“C&I”) outstanding at year-end 2016 increased to $370.6 million, up substantially from $228.5 million a year ago. Commercial lending activities are directed principally towards businesses whose demand for funds are within the Company’s lending limits, such as small- to medium-sized professional firms, retail and wholesale outlets, and light industrial and manufacturing concerns. Such businesses are smaller and subject to the risks of lending to small to medium sized businesses, including, but not limited to, the effects of a downturn in the local economy, possible business failure, and insufficient cash flows. Residential mortgage loans increased $113 million or 16% to $837 million as of December 31, 2016. Substantially all residential originations have been underwritten to conventional loan agency standards, including loans having balances that exceed agency value limitations. During 2016, $64 million of whole loan mortgages were acquired and added to the portfolio. At December 31, 2016, approximately $418 million or 50% of the Company’s residential mortgage balances were adjustable 1-4 family mortgage loans (including hybrid adjustable rate mortgages). Fixed rate mortgages totaled approximately $210 million (25% of the residential mortgage portfolio) at December 31, 2016, of which 15- and 30-year mortgages totaled $24 million and $153 million, respectively. Remaining fixed rate balances were comprised of home improvement loans totaling $78 million, most with maturities of 10 years or less and home equity lines of credit, primarily floating rates, totaling $164 million at December 31, 2016. In comparison, loans secured by residential properties having fixed rates totaled $110 million at December 31, 2015, with 15- and 30-year fixed rate residential mortgages totaling $25 million and $85 million, respectively, and home equity mortgages and lines of credit totaled $69 million and $114 million, respectively. The Company also provides consumer loans (including installment loans, loans for automobiles, boats, and other personal, family and household purposes) which increased $68.6 million or 80% year over year and totaled $153.9 million (versus $85.4 million a year ago). Of the $68.6 million increase, $32.4 million was in marine loans, $4.3 million in automobile and truck loans, and $31.9 million in other consumer loans. Marine loans at December 31, 2016 include $15.5 million in purchased loan pools acquired during the third quarter of 2016. At December 31, 2016, the Company had unfunded commitments to make loans of $532.1 million, compared to $343.2 million at December 31, 2015 (see “Note P - Contingent Liabilities and Commitments with Off-Balance Sheet Risk” to the Company’s consolidated financial statements). Loan Concentrations The Company has been pursuing an aggressive programdeveloped guardrails to reduce exposuremanage to loan types that have beenare most impacted by stressed market conditions in order to achieve lower levels of credit loss volatility in the future. Commercial and commercial real estate loan relationships greater than $10 million were reduced by $51.7totaled $217.3 million, to $110.0 million (or 5.1%and represent 8% of the total loan portfolio)portfolio at December 31, 2015,2016, compared withto $161.7 million (or 13.0% of the total portfolio)or 13% at year-end 2010.   The Company’s ten largestConcentrations in total construction and land development loans and total CRE loans are maintained well below regulatory limits. Construction and land development and commercial real estate fundedloan concentrations as a percentage of total risk based capital, were stable at 39% and unfunded loan relationships214%, respectively, at December 31, 2015 aggregated to $119.8 million (versus $114.6 million a year ago)2016. Regulatory guidance suggests limits of 100% and for the 47 commercial real estate relationships in excess of $5 million the aggregate funded and unfunded totaled $370.9 million, of which $322.6 million was funded (compared to 37 relationships of $283.2 million a year ago, of which $241.3 million was funded).300%, respectively. The Company defines commercial real estate in accordance with the guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) issued by the federal bank regulatory agencies in 2006, which defines commercial real estate (“CRE”) loans as exposures secured by land development and construction, including 1-4 family residential construction, multi-family property, and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property (i.e. loans for which 50 percent or more of the source of repayment comes from third party, non-affiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. Loans to real estate investment trusts, or “REITs”, and unsecured loans to developers that closely correlate to the inherent risks in CRE markets would also be considered CRE loans under the Guidance. Loans on owner occupied CRE are generally excluded.   Concentrations in total construction and land development loans and total CRE loans have been reduced. Construction and land development and commercial real estate loan concentrations as a percentage of total risk based capital, have decreased from 39% and 218%, respectively, at December 31, 2010, to 31% and 197%, respectively, as of December 31, 2015. The mix of fixed rate and adjustable rate loans secured by commercial real estate, excluding construction loans, was $743 million and $266 million, respectively, at December 31, 2015, compared to $596 million and $241 million, respectively, a year ago. Residential mortgage loans increased $36.9 million or 5.4% to $724 million as of December 31, 2015. Substantially all residential originations have been underwritten to conventional loan agency standards, including loans having balances that exceed agency value limitations. The Company selectively adds residential mortgage loans to its portfolio, primarily loans with adjustable rates. Exposure to market interest rate volatility with respect to long-term fixed rate mortgage loans held for investment is managed through loan sales of most fixed rate product. At December 31, 2015, approximately $430 million or 59% of the Company’s residential mortgage balances were adjustable 1-4 family mortgage loans (including hybrid adjustable rate mortgages). Fixed rate mortgages totaled approximately $110 million (15% of the residential mortgage portfolio) at December 31, 2015, of which 15- and 30-year mortgages totaled approximately $25 million and $85 million, respectively. Remaining fixed rate balances were comprised of home improvement loans totaling $69 million, most with maturities of 10 years or less and home equity lines of credit, primarily floating rates, totaling approximately $114 million at December 31, 2015. In comparison, loans secured by residential properties having fixed rates totaled approximately $94 million at December 31, 2014, with 15- and 30-year fixed rate residential mortgages totaling approximately $23 million and $71 million, respectively, and home equity mortgages and lines of credit totaled $72 million and $80 million, respectively. Reflecting the impact of improved economic conditions and the Grand acquisitions, commercial loans outstanding at year-end 2015 increased to $228.5 million, up substantially from $157.4 million a year ago. Commercial lending activities are directed principally towards businesses whose demand for funds are within the Company’s lending limits, such as small- to medium-sized professional firms, retail and wholesale outlets, and light industrial and manufacturing concerns. Such businesses are smaller and subject to the risks of lending to small to medium sized businesses, including, but not limited to, the effects of a downturn in the local economy, possible business failure, and insufficient cash flows. The Company also provides consumer loans (including installment loans, loans for automobiles, boats, and other personal, family and household purposes) which increased $32.5 million or 61.4% year over year and totaled $85.4 million (versus $52.9 million a year ago). Of the $32.5 million increase, $20.3 million was in marine loans and $7.1 million was for automobile and truck loans. At December 31, 2015, the Company had unfunded commitments to make loans of $343.2 million, compared to $238.1 million at December 31, 2014 (see “Note P - Contingent Liabilities and Commitments with Off-Balance Sheet Risk” to the Company’s consolidated financial statements). Nonperforming Loans, Troubled Debt Restructurings, Other Real Estate Owned, and Credit Quality   Table 12 provides certain information concerning nonperforming assets for the years indicated.   Nonperforming assets (“NPAs”) at December 31, 20152016 totaled $24.4$28.0 million, and were comprised of $11.0 million of nonaccrual portfolio loans, $7.1 million of nonaccrual purchased loans, $3.0 million of non-acquired other real estate owned (“OREO”), $1.2 million of acquired OREO and $5.7 million of branches out of service. NPAs increased from $24.4 million recorded as of December 31, 2015 (comprised of $12.8 million of nonaccrual portfolio loans, $4.6 million of nonaccrual purchased loans, $3.7 million of non-acquired other real estate owned (“OREO”) and $3.3 million of acquired OREO. NPAs decreased from $28.6 million as of December 31, 2014 (comprised of $18.5 million of nonaccrual portfolio loans, $2.6 million of nonaccrual purchased loans, $5.6$3.7 million of non-acquired OREO and $1.9$3.3 million of acquired OREO). At December 31, 2015,2016, approximately 97.8%98% of nonaccrual loans were secured with real estate. See the tables below for details about nonaccrual loans. At December 31, 2015,2016, nonaccrual loans have been written down by approximately $3.6$2.8 million or 18.6%14% of the original loan balance (including specific impairment reserves). During the year,2016, total OREO decreased $0.4increased $2.9 million or 5.7%.41%, primarily related to branches taken out of service in 2016 that are actively being marketed. The Company’s asset mitigation staff handles all foreclosure actions together with outside legal counsel.   The Company pursues loan restructurings in selected cases where it expects to realize better values than may be expected through traditional collection activities. The Company has worked with retail mortgage customers, when possible, to achieve lower payment structures in an effort to avoid foreclosure. TDRs have been a part of the Company’s loss mitigation activities and can include rate reductions, payment extensions and principal deferrals. Company policy requires TDRs that are classified as nonaccrual loans after restructuring remain on nonaccrual until performance can be verified, which usually requires six months of performance under the restructured loan terms. We are optimistic that some credits will rehabilitate and be upgraded versus migrating to nonperforming or OREO prospectively. Accruing restructured loans totaled $17.7 million at December 31, 2016 compared to $20.0 million at December 31, 2015 compared to $25.0 million at December 31, 2014.2015. Accruing TDRs are excluded from our nonperforming asset ratios. The tables below set forth details related to nonaccrual and accruing restructured loans.                 Accruing                 Accruing   December 31, 2015   Nonaccrual Loans   Restructured   December 31, 2016   Nonaccrual Loans   Restructured   (In thousands)   Non-Current   Performing   Total   Loans     Non-Current   Performing   Total   Loans   Construction & land development                                                                 Residential   $ 0     $ 0     $ 0     $ 282     $ 0     $ 258     $ 258     $ 262   Commercial     0       40       40       58       0       0       0       44   Individuals     0       269       269       333       0       212       212       243       0       309       309       673       0       470       470       549   Residential real estate mortgages     938       9,352       10,290       11,762       1,635       8,209       9,844       10,878   Commercial real estate mortgages     2,908       3,502       6,410       7,149       2,093       5,248       7,341       5,933   Real estate loans     3,846       13,163       17,009       19,584       3,728       13,927       17,655       17,360   Commercial and financial     130       0       130       17       246       0       246       0   Consumer     67       180       247       369       67       103       170       351     $ 4,043     $ 13,343     $ 17,386     $ 19,970   TOTAL   $ 4,041     $ 14,030     $ 18,071     $ 17,711   At December 31, 20152016 and 2014,2015, total TDRs (performing and nonperforming) were comprised of the following loans by type of modification:     2015     2014   (Dollars in thousands)   Number     Amount     Number     Amount   Rate reduction     91     $ 15,776       106     $ 18,906   Maturity extended with change in terms     56       7,143       71       8,891   Forgiveness of principal     0       0       1       1,588   Chapter 7 bankruptcies     44       2,693       54       3,348   Not elsewhere classified     14       1,808       11       1,786         205     $ 27,420       243     $ 34,519       2016     2015   (Dollars in thousands)   Number     Amount     Number     Amount   Rate reduction     81     $ 14,472       91     $ 15,776   Maturity extended with change in terms     56       6,975       56       7,143   Forgiveness of principal     0       0       0       0   Chapter 7 bankruptcies     36       2,308       44       2,693   Not elsewhere classified     13       1,739       14       1,808   TOTAL     186     $ 25,494       205     $ 27,420     During the twelve months ended December 31, 2015,2016, newly identified TDRs totaled $2.6$2.0 million, compared to $5.5$2.6 million for all of 2014.2015. Loan modifications are not reported in calendar years after modification if the loans were modified at an interest rate equal to the yields of new loan originations with comparable risk and the loans are performing based on the terms of the restructuring agreements. No accruing loans that were restructured within the twelve months preceding December 31, 20152016 defaulted during the twelve months ended December 31, 2015,2016, the same as for 2014.2015. A restructured loan is considered in default when it becomes 6090 days or more past due under the modified terms, has been transferred to nonaccrual status, or has been transferred to OREO.   At December 31, 2015,2016, loans (excluding PCI loans) totaling $32.7 million were considered impaired (comprised of total nonaccrual, loans 90 days or more past due, and TDRs) and $2.5 million of the allowance for loan losses was allocated for potential losses on these loans, compared to $43.6$32.7 million and $3.5$2.5 million, respectively, at December 31, 2014.2015.   In accordance with regulatory reporting requirements, loans are placed on nonaccrual following the Retail Classification of Loan interagency guidance.  Typically loans 90 days or more past due are reviewed for impairment, and if deemed impaired, are placed on nonaccrual.  Once impaired, the current fair market value of the collateral is assessed and a specific reserve and/or charge-off taken.  Quarterly thereafter, the loan carrying value is analyzed and any changes are appropriately made as described above.   Cash and Cash Equivalents, Liquidity Risk Management and Contractual Commitments   Cash and cash equivalents (including interest bearing deposits), totaled $136.1$109.6 million on a consolidated basis at December 31, 2015,2016, compared to $100.5$136.1 million at December 31, 2014. Interest bearing deposits are maintained in Seacoast Bank’s account at the Federal Reserve Bank of Atlanta. Cash and cash equivalents vary with seasonal deposit movements and are generally higher in the winter than in the summer, and vary with the level of principal repayments and investment activity occurring in Seacoast Bank’s securities and loan portfolios.2015.   Liquidity risk involves the risk of being unable to fund assets with the appropriate duration and rate-based liability, as well as the risk of not being able to meet unexpected cash needs. Liquidity planning and management are necessary to ensure the ability to fund operations cost effectively and to meet current and future potential obligations such as loan commitments and unexpected deposit outflows.   The table below presents maturities of our funding. In thethis table, that follows, all deposits with indeterminate maturities such as interest bearing and noninterest bearing demand deposits, savings accounts and money market accounts are presented as having a maturity of one year or less. We consider these low cost, no-cost deposits to be our largest, most stable funding source, despite no contracted maturity. Contractual Obligations     December 31, 2015                   Over One     Over Three                   One Year     Year Through     Years Through     Over five   (In thousands)   Total     or Less     Three Years     Five Years     Years   Deposit maturities   $ 2,844,387     $ 2,749,316     $ 62,708     $ 31,341     $ 1,022   Short-term borrowings     172,005       172,005       0       0       0   Borrowed funds     50,000       0       50,000       0       0   Subordinated debt     69,961       0       0       0       69,961   Operating leases     23,642       4,736       5,979       3,246       9,681   TOTAL   $ 3,159,995     $ 2,926,057     $ 118,687     $ 34,587     $ 80,664       December 31, 2016                   Over One     Over Three                   One Year     Year Through     Years Through     Over Five   (In thousands)   Total     or Less     Three Years     Five Years     Years   Deposit maturities   $ 3,523,245     $ 3,385,027     $ 84,419     $ 52,010     $ 1,789   Short-term borrowings     204,202       204,202       0       0       0   FHLB borrowings     415,000       415,000       0       0       0   Subordinated debt     70,241       0       0       0       70,241   Operating leases     31,568       5,325       8,239       5,575       12,429   TOTAL   $ 4,244,256     $ 4,009,554     $ 92,658     $ 57,585     $ 84,459     Funding sources primarily include customer-based core deposits, collateral-backed borrowings, cash flows from operations, cash flows from our loan and investment portfolios and asset sales (primarily secondary marketing for residential real estate mortgages and marine financings). Cash flows from operations are a significant component of liquidity risk management and we consider both deposit maturities and the scheduled cash flows from loan and investment maturities and payments. Deposits are also a primary source of liquidity. The stability of this funding source is affected by numerous factors, including returns available to customers on alternative investments, the quality of customer service levels, perception of safety and competitive forces. We routinely use securities and loans as collateral for secured borrowings. In the event of severe market disruptions, we have access to secured borrowings through the FHLB and the Federal Reserve Bank of Atlanta under its borrower-in-custody.   Contractual maturities for assets and liabilities are reviewed to meet current and expected future liquidity requirements. Sources of liquidity, both anticipated and unanticipated, are maintained through a portfolio of high quality marketable assets, such as residential mortgage loans, securities held for sale and interest-bearing deposits. The Company is also able to provide short term financing of its activities by selling, under an agreement to repurchase, United States Treasury and Government agency securities not pledged to secure public deposits or trust funds. At December 31, 2015,2016, Seacoast NationalBank had available unsecured lines of $40$75 million and lines of credit under current lendable collateral value, which are subject to change, of $886$578 million. Seacoast Bank had $510$688 million of United States Treasury and Government agency securities and mortgage backed securities not pledged and available for use under repurchase agreements, and had an additional $277$378 million in residential and commercial real estate loans available as collateral. In comparison, at December 31, 2014,2015, the Company had available unsecured lines of $45$40 million and lines of credit of $671$886 million, and had $588$510 million of Treasury and Government agency securities and mortgage backed securities not pledged and available for use under repurchase agreements, as well as an additional $235$277 million in residential and commercial real estate loans available as collateral.   The Company does not rely on and is not dependent on off-balance sheet financing or significant amounts of wholesale funding. The Company has traditionally relied upon dividends from Seacoast Bank and securities offerings to provide funds to pay the Company’s expenses and to service the Company’s debt and to pay dividends upon Company common stock and preferred stock.debt. At December 31, 2015,2016, Seacoast Bank can distribute dividends to the Company of approximately $81.4$61.0 million. At December 31, 2015,2016, the Company had cash and cash equivalents at the parent of approximately $43.7$13.3 million, compared to $38.3$43.7 million at December 31, 2014,2015, with the increasedecrease directly related to cash paid in the Floridian acquisition of Grand.(see “Note S – Business Combinations”).   65  Securities   Information related to yields, maturities, carrying values and fair value of the Company’s securities is set forth in Tables 13-16 and “Note D – Securities” of the Company’s consolidated financial statements.   At December 31, 2015,2016, the Company had no trading securities, $790.8$950.5 million in securities available for sale, with the remainder of $203.5and $372.5 million in securities held for investment.to maturity. The Company's total securities portfolio increased $45.0$328.7 million or 4.7%33% from December 31, 2014,2015. During the first quarter of 2016, securities totaling $66.9 million were added from Floridian. Security purchases during the first and second quarter of 2016 of $258.3 million were primarily to utilize anticipated cash to be received by Seacoast from BMO, with an increase of $203.4 million in securities held to maturity during the second quarter (almost a doubling from the first quarter of 2016). Security purchases during the third quarter of 2016 were more modestlimited, totaling only $13 million, and totaled $130 million in the fourth quarter of 2016. These efforts were primary to the overall increase than during 2014, whenin the Company’s total securities portfolio increased $307.7 million or 48.0% from December 31, 2013. Efforts to invest excess liquidity and short-term borrowings, and the addition of securities from the mergers with Grand in 2015 and BANKshares in 2014 were primary contributors.during 2016. For 2015, securities totaling $46.4 million were added from Grand during the third quarter. For 2014, during the third and fourth quarters of 2014, average investment securities increased $234.9 million, or $149.5 million excluding securities acquired from the BANKshares acquisition. Funding for the increase in 2014 in investments was derived from liquidity, both legacy and that acquired in the merger,mergers, and an increaseincreases in seasonal funding from our core customer deposit base withand FHLB borrowings. During 2016, proceeds from the investments added primarily uncapped, floating rate, senior collateralized loan obligation (CLO)sales of securities with credit support rangingtotaled $40.4 million (including net gains of $0.4 million). In comparison, proceeds from 17%the sales of securities totaled $60.5 million (including net gains of $0.2 million) for 2015, and proceeds from the sale of securities totaled $21.9 million for 2014 (including net gains of $0.5 million). Management believes the securities sold had minimal opportunity to 36%.further increase in value.   Securities are generally acquired which return principal monthly that can be reinvested.monthly. During 2016, maturities (primarily pay-downs of $175.1 million) totaled $176.6 million. During 2015, maturities (primarily pay-downs of $146.6 million) totaled $147.1 million and for 2014 maturities totaled $108.7 million (including $107.8 million in pay-downs). The effectivemodified duration of the investment portfolio at December 31, 20152016 was 2.94.1 years, compared to 3.23.7 years at December 31, 2014. The Company’s investments do not extend beyond an average effective duration of 3.8 years if interest rates were to increase 300 basis points in the future.2015.   At December 31, 2015,2016, available for sale securities had gross unrealized losses of $14.1 million and gross unrealized gains of $3.8 million, compared to gross unrealized losses of $10.8 million and gross unrealized gains of $3.0 million compared to gross unrealized losses of $9.4 million and gross unrealized gains of $4.4 million at December 31, 2014.2015. All of the securities with unrealized losses are reviewed for other-than-temporary impairment at least quarterly. As a result of these reviews it was determined that the unrealized losses were not other than temporarily impaired and the Company has the intent and ability to retain these securities until recovery over the periods presented (see additional discussion under “Other Fair Value Measurements” and “Other than Temporary Impairment of Securities” in “Critical Accounting Policies and Estimates”). Company management considers the overall quality of the securities portfolio to be high. The Company has no exposure to securities with subprime collateral. The Company holds no interestsdoes not have an investment position in trust preferred securities.   Deposits and Borrowings   The Company’s balance sheet continues to be primarily core funded.   Total deposits increased $427.9$678.9 million or 17.7%24% to $2.844$3.52 billion at December 31, 2015,2016, compared to one year earlier,earlier. Excluding the Floridian and BMO acquisitions, total deposits increased $610.5$27.3 million or 33.8% to $2.417 billion at1% from December 31, 2014 when compared to December 31, 2013. 2015. Deposit growth since year-end 2015 was impacted by declines in public fund balances, which decreased by more than $36 million during 2016. Since December 31, 2014,2015, interest bearing deposits (interest bearing demand, savings and money markets deposits) increased $328.7$327.1 million or 24.0%19% to $1,696.0 million,$2.02 billion, noninterest bearing demand deposits increased $129.2$293.9 million or 17.8%34% to $854.4 million,$1.15 billion, and CDs decreased $30.0increased $57.9 million or 9.3%20% to $294.0$351.9 million. DepositExcluding acquired deposits, noninterest demand deposits were $109.6 million or 13% higher from year-end 2015, and represent 33% deposits, compared to 30% at December 31, 2015. Core deposit growth reflectedreflects our success in growing households both organically and through acquisitions. During 2015 we grew households a strong 5% by delivering a convenience based community bank service offering.   ExcludingAdditions to CDs and the Grand acquisition, total deposits increased $239.5 million since December 31, 2014, reflecting strong household growth and included $127.8 million growthincrease in public funds. Also contributing was an increased focus on small business relationshipsCDs in the more populated metropolitan areas of Palm Beach County and Central Florida. The acquisition of BANKshares in October 2014 contributed approximately $516.3 million in deposits. 2016 year over year have come primarily through acquisitions during 2016. An intentional decrease in higher cost time deposits was recorded over the past two years has beenprior to 2016’s acquisitions, and was more than offset by increasingincreases in low cost or no cost deposits.   Customer repurchase agreements totaled $172.0$204.2 million at December 31, 2015,2016, increasing $18.4$32.2 million or 12.0%19% from December 31, 2014.2015. The repurchase agreements are offered by Seacoast to select customers who wish to sweep excess balances on a daily basis for investment purposes. Public funds comprise a significant amount of the outstanding balance.   At September 30, 2014, the Company utilized $80 million in term federal funds purchased from the Federal Home Loan Bank (“FHLB”) at 0.16 percent (maturing in 30 days) to invest in adjustable rate securities, pending seasonal funding expected prospectively. These funds remained outstanding at December 31, 2014, and for the year averaged $19.9 million. No unsecured federal funds purchased were outstanding at December 31, 2016 nor 2015.   At December 31, 2016 and 2015, other borrowings were comprised of subordinated debt of $70.2 million and $70.0 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company, and advancesborrowings from the FHLB of $415.0 million and $50.0 million. Themillion, respectively. At December 31, 2016, our FHLB borrowings were all maturing within 30 days, and the rate for FHLB funds at year-end was 0.61%. In the second quarter of 2016, we paid an early redemption cost of $1.8 million related to prepayment of the $50.0 million of FHLB advances mature in 2017. For 2015 and 2014, thehaving a weighted average cost of these3.22% and scheduled to mature in late 2017 (see “Noninterest Expense”). The two FHLB advances was 3.22%.redeemed had been outstanding since 2007. The Company has two wholly owned trust subsidiaries, SBCF Capital Trust I and SBCF Statutory Trust II that were both formed in 2005. In 2007, the Company formed an additional wholly owned trust subsidiary, SBCF Statutory Trust III. The 2005 trusts each issued $20.0 million (totaling $40.0 million) of trust preferred securities and the 2007 trust issued an additional $12.0 million in trust preferred securities. As part of the October 1, 2014 BANKshares acquisition the Company inherited three junior subordinated debentures totaling $5.2 million, $4.1 million, and $5.2 million, respectively. Also, as part of the Grand acquisition, the Company inherited an additional junior subordinated debenture totaling $7.2 million. The acquired junior subordinated debentures (in accordance with ASU 805 Business Combinations) were recorded at fair value, which collectively is $5.4$5.1 million lower than face value and amortizingat December 31, 2016. This amount is being amortized into interest expense over theirthe acquired subordinated debts’ remaining term to maturity. All trust preferred securities are guaranteed by the Company on a junior subordinated basis.   Under Basel III and Federal Reserve rules, qualified trust preferred securities and other restricted capital elements can be included as Tier 1 capital, within limitations. The Company believes that its trust preferred securities qualify under these capital rules. The weighted average interest rate of our outstanding subordinated debt related to trust preferred securities was 2.43%2.47% for the twelve month period ended December 31, 2015,2016, compared to 1.87% and 1.74%2.43% for all of 2014 and 2013, respectively.2015.   Go to “Note I – Borrowings” of our consolidated financial statements for more detailed information pertaining to borrowings.   Off-Balance Sheet Transactions   In the normal course of business, we may engage in a variety of financial transactions that, under generally accepted accounting principles, either are not recorded on the balance sheet or are recorded on the balance sheet in amounts that differ from the full contract or notional amounts. These transactions involve varying elements of market, credit and liquidity risk.   Lending commitments include unfunded loan commitments and standby and commercial letters of credit. A large majority of loan commitments and standby letters of credit expire without being funded, and accordingly, total contractual amounts are not representative of our actual future credit exposure or liquidity requirements. Loan commitments and letters of credit expose the Company to credit risk in the event that the customer draws on the commitment and subsequently fails to perform under the terms of the lending agreement. Loan commitments to customers are made in the normal course of our commercial and retail lending businesses. For commercial customers, loan commitments generally take the form of revolving credit arrangements. For retail customers, loan commitments generally are lines of credit secured by residential property. These instruments are not recorded on the balance sheet until funds are advanced under the commitment. For loan commitments, the contractual amount of a commitment represents the maximum potential credit risk that could result if the entire commitment had been funded, the borrower had not performed according to the terms of the contract, and no collateral had been provided. Loan commitments were $532 million at December 31, 2016, and $343 million at December 31, 2015 and $238 million at December 31, 2014 (see “Note P-Contingent Liabilities and Commitments with Off-Balance Sheet Risk” to the Company’s consolidated financial statements). Capital Resources   Table 6 summarizes the Company’s capital position and selected ratios.   The Company’s equity capital at December 31, 20152016 increased $40.8$81.9 million to $353.5$435.4 million since December 31, 2014,2015, and thewas $40.8 million higher at December 31, 2015, when compared to year-end 2014. The ratio of shareholders’ equity to period end total assets was 9.30% and 10.00% at December 31, 2016 and 2015, 11 basis points lower than at December 31, 2014. Duringrespectively. Equity primarily increased from a combination of earnings retained by the third quarterCompany, and capital of 2015, the Grand transaction increased shareholder’s equity$50.9 million and $17.2 million issued in conjunction with the acquisition of Floridian in 2016 and during the fourth quarter of 2014, the BANKshares transaction increased shareholders’ equity $76.8 million as weGrand in 2015, respectively. The Company issued shares of common stock as consideration for each merger. the mergers. The BMO purchase did not include an issuance of any equity. The ratio of shareholders’ equity to total assets declined during 2016 and 2015, as the Company successfully grew assets at a faster pace than equity over these periods.   Activity in shareholders’ equity for the twelve months ended December 31, 20152016 and 20142015 follows:   (Dollars in thousands)   2015     2014   Beginning balance at December 31, 2014 and 2013   $ 312,651     $ 198,604   Net income     22,141       5,696   Issuanceof stock pursuant to acquisition of Grand and BANKshares     17,172       76,787   Issuance of stock, net of related expense     0       24,637   Stock compensation (net of Treasury shares acquired)     2,875       1,410   Change in other comprehensive income     (1,386 )     5,517   Ending balance at December 31, 2015 and 2014   $ 353,453     $ 312,651   (Dollars in thousands)   2016     2015   Beginning balance at January 1, 2015 and 2014   $ 353,453     $ 312,651   Net income     29,202       22,141   Issuanceof stock pursuant to acquisition of Floridian (2016) and Grand (2015)     50,913       17,172   Stock compensation (net of Treasury shares acquired)     3,129       2,875   Change in other comprehensive income     (1,300 )     (1,386 ) Ending balance at December 31, 2016 and 2015   $ 435,397     $ 353,453     On January 13, 2014, the Company received $24.6 million (netCapital ratios are well above regulatory requirements for well-capitalized institutions. Seacoast management’s use of costs) in proceeds remitted from CapGen Capital (following regulatory approval by the Federal Reserve of CapGen Capital’s investment) from the $75 million common stock issuance on November 12, 2013. All other proceeds were received in December 2013. The proceeds from therisk-based capital raise were used to redeem 2,000 shares of outstanding Series A Preferred Stock (at par) totaling $50 million originally issued to the U.S. Department of Treasury under the Troubled Asset Relief Program and later sold to third party investors. The remaining funds from the capital raise were retained for general corporate purposes. The preferred stock carried a 5 percent dividend that was to increase to 9 percent on February 15, 2014. The preferred stock redemption was completed on December 31, 2013, increasing net income available to common shareholders during 2014 and beyond Seacoast’s management uses certain “non-GAAP” financial measuresratios in its analysis of the Company’s capital adequacy.adequacy are “non-GAAP” financial measures. Seacoast’s management uses these measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company. The capital measures are not necessarily comparable to similar capital measures that may be presented by other companies (see “Table 6 - Capital Resources” and “Note N – Shareholders’ Equity”). Capital ratios remain healthy and are well above regulatory requirements for well-capitalized institutions.     Seacoast   Seacoast   Minimum to be     Seacoast   Seacoast   Minimum to be     (Consolidated)   National   Well-Capitalized*     (Consolidated)   Bank   Well-Capitalized*   Common equity Tier 1 ratio (CET1)     13.25 %     13.31 %     6.5 %     10.79 %     12.03 %     6.5 % Tier 1 capital ratio     15.21 %     13.31 %     8.0 %     12.53 %     12.03 %     8.0 % Total risk-based capital ratio     16.01 %     14.11 %     10.0 %     13.25 %     12.75 %     10.0 % Leverage ratio     10.70 %     9.36 %     5.0 %     9.15 %     8.78 %     5.0 % * For subsidiary bank only   The Company’s total risk-based capital ratio was 16.01%13.25% at December 31, 2015, slightly lower than2016, below our December 31, 2014’s2015’s ratio of 16.25%16.01%. Larger pro rata cash payments and December 31, 2013’s ratiomore modest amounts of 16.88%. Reinvestmentcommon stock issued to Floridian shareholders, as well as ongoing reinvestment of liquidity into securities and loans with higher risk weightings and the acquisitionaddition of GrandFloridian’s and BANKshares’BMO’s loans with higher risk weightings, were the primary causes for risk weighted assets increasing, thereby lowering Tier 1 and total risk-based capital ratios decreasing during 2015 and 2014.2016. As of December 31, 2015,2016, the Bank’s leverage ratio (Tier 1 capital to adjusted total assets) was 9.36%8.78%, compared to 9.04%9.36% at December 31, 20142015, reflecting growth and 9.51% at December 31, 2013, improving during 2015 with escalatingthe effect of push down accounting on Seacoast’s subsidiary bank’s capital. On February 21, 2017, the Company closed on its offering of 8,912,500 shares of common stock, consisting of 2,702,500 shares sold by the Company and 6,210,000 shares sold by one of its shareholders. Seacoast received proceeds of $56.8 million from the issuance of the 2,702,500 shares of its common stock, without any reduction for legal and professional fees. The Company intends to use the net income a major contributor.proceeds from the offering for general corporate purposes, including potential future acquisitions and to support organic growth. Seacoast did not receive any proceeds from the sale of its shareholder’s shares (see “Note N – Shareholders’ Equity”).   The Company and Seacoast Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal bank regulatory authority may prohibit the payment of dividends where it has determined that the payment of dividends would be an unsafe or unsound practice. The Company is a legal entity separate and distinct from Seacoast Bank and its other subsidiaries, and the Company’s primary source of cash and liquidity, other than securities offerings and borrowings, is dividends from its bank subsidiary. Without Office of the Comptroller of the Currency (“OCC”) approval, Seacoast Bank can pay over $81.4$61.0 million of dividends to the Company (see “Note C - Cash, Dividend and Loan Restrictions”).   The OCC and the Federal Reserve have policies that encourage banks and bank holding companies to pay dividends from current earnings, and have the general authority to limit the dividends paid by national banks and bank holding companies, respectively, if such payment may be deemed to constitute an unsafe or unsound practice. If, in the particular circumstances, either of these federal regulators determined that the payment of dividends would constitute an unsafe or unsound banking practice, either the OCC or the Federal Reserve may, among other things, issue a cease and desist order prohibiting the payment of dividends by Seacoast NationalBank or us, respectively. Under a recently adopted Federal Reserve policy, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to the organization’s financial position and is not based on overly optimistic earnings scenarios such as any potential events that may occur before the payment date that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company, such as Seacoast, should consult with the Federal Reserve and eliminate, defer, or significantly reduce the bank holding company’s dividends if: (i) its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or (iii) it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. The Company has seven wholly owned trust subsidiaries, SBCF Capital Trust I and SBCF Statutory Trust II that were both formed in 2005 to issuetrust preferred securities. In 2007, the Company formed an additional wholly owned trust subsidiary, SBCF Statutory Trust III. The 2005 trusts each issued $20.0 million (totaling $40.0 million) of trust preferred securities and the 2007 trust issued an additional $12.0 million in trust preferred securities. In 2014, as part of the BANKshares acquisition, the Company acquired BankFIRST Statutory Trust I, BankFIRST Statutory Trust II and The BANKshares Capital Trust I that issued in the aggregate $14.4 million in trust preferred securities. In 2015, as part of the Grand acquisition, the Company also acquired Grand Bankshares Capital Trust I that issued $7.2 million in trust preferred securities. Trust preferred securities from our acquisitions are recorded at fair value when acquired. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. The Federal Reserve’s rules permit qualified trust preferred securities and other restricted capital elements to be included under Basel III capital guidelines, with limitations, and net of goodwill and intangibles. The Company believes that its trust preferred securities qualify under these revised regulatory capital rules and believes that it will be able to treat all $70.0$70.2 million of trust preferred securities as Tier 1 capital. For regulatory purposes, the trust preferred securities are added to the Company’s tangible common shareholders’ equity to calculate Tier 1 capital. The Company also formed SBCF Capital Trust IV and SBCF Capital Trust V in 2008, however both are currently inactive.   The Company’s capital is expected to continue to increase with positive earnings. The board and management currently believe that the Company’s overall level of capital is sufficient given the current economic environment.   Results of Operations   Earnings Summary   The Company has steadily improved results over the past three years. Net income availablefor 2016 totaled $29.2 million or $0.78 diluted earnings per share, compared to common shareholders for 2015 totaled $22.1 million or $0.66 diluted earnings per average common share diluted for 2015, compared to $5,696,000,and $5.7 million or $0.21 diluted earnings per average common diluted share for 2014, and net income of $47,916,000 or $2.44 per2014. Return on average common diluted share for 2013. Net income for 2013 benefited fromassets (“ROA”) increased to 0.94% during the recapture of $44.8 million of deferred tax allowance in the thirdfourth quarter of that year.2016, and return on average equity (“ROE”) to 9.80% for the same period.   Adjusted net income, (1) (excluding merger costsa non-GAAP measure (see page 92, “Explanation of Certain Unaudited Non-GAAP Financial Measures”), totaled $37.5 million and other adjustments)was $12.2 million or 48% higher year-over-year for the twelve months ended December 31, 2016. In comparison, adjusted net income increased $12.3 million or 94.8%95% during 2015, compared to all of 2014, and adjusted2014. Adjusted diluted earnings per share (1)(see page 92, “Explanation of $0.75Certain Unaudited Non-GAAP Financial Measures”) of $1.00 for 2016, compared to $0.74 for 2015 compared withand $0.47 for 2014. The section titled “Fourth Quarter Review” providesWe added 24 offices during 2016, primarily through acquisitions, and closed 20 offices, with a reconcilementnet add of GAAP to4 offices and a total of 47 full-service offices at year-end 2016. Data analytics and technology-assisted operational improvement are also helping us build efficiencies across our organization and drive process automation. We believe that our success in increasing net income is the non-GAAP measures indicated.result of our success in significantly growing our businesses and balance sheet, while attaining operating efficiency. This success also reflects the success we have had in identifying and incorporating acquisitions.   Net Interest Income and Margin Net interest income (on a fully taxable equivalent basis) for 20152016 totaled $110.0$140.5 million, increasing $34.8$30.5 million or 46.2%28% as compared to 2014’s2015’s net interest income of $75.2$110.0 million, which increased by $9.8$34.8 million or 15.0 percent46% compared to 2013.2014. The Company’s net interest margin decreased one basis point to 3.63% during 2016 from 2015, and increased 39 basis points to 3.64% during 2015 from 2014, and 10 basis points to 3.25% during 2014 from 2013.2014.   Loan growth, balance sheet mix and yield/cost management have been the primary forces affecting net interest income and net interest margin results. Totalresults during 2016. Acquisitions also contributed to net interest income growth. Organic loan growth (excluding acquisitions) year-over-year was $877 million, or 18%. Floridian loans, securities and deposits added $266 million, $67 million and $337 million, respectively, and the purchase of investment securities ahead of the BMO acquisition, which added $314 million in deposits and $63 million in loans, were much greater, with average loans increasing $531.2 million or 36.6% duringcontributors to net interest income improvement year-over-year for 2016, compared to 2015. The same full-year income growth dynamic occurred in 2015 compared to 2014, and increasing $180.4 million or 14.2% during 2014 compared to 2013. Our average investment securities were higher as well, increasing $225.2 million or 30.6% during 2015 versus 2014, and $84.0 million or 12.9% during 2014, when compared towith the 2013 average. Acquisitions have further accelerated these trends. For 2015, average loans (the highest yielding component of earning assets) as a percentage of average earning assets totaled 65.6%, compared to 62.8% a year ago and 61.2% for 2013 while interest bearing deposits and other investments decreased to 2.5%, compared to 5.4 percent in 2014 and 7.4 percent in 2013, reflecting the Company’s significant effort to invest excess liquidity during the third and fourth quarters of 2014. As average total loans as a percentage of earning assets increased, the mix of loans has improved, with volumes related to commercial real estate representing 49.8 percent of total loans at December 31, 2015 (compared to 48.9% at December 31, 2014 and 42.5% at December 31, 2013). Lower yielding residential loan balances with individuals (including home equity loans and lines, and personal construction loans) represented 35.7 percent of total loans at December 31, 2015 (versus 39.6% at December 31, 2104 and 48.1 percent at December 31, 2013) (see “Loan Portfolio”). The year over year improvement results for each year reflect the increases in net loans and investment securities, and deposit growth, with continued increases in low, cost no cost deposits compared to prior years. The addition of BANKshares’ business on October 1, 2014 amplified the Company’s performanceBANKshares in the fourth quarter 2014 and Grand in July 2015 and $224 million of 2014, helping to drive a $7.6 million increase inorganic loan growth during the year. We expect 2017’s net interest income from the third quarter of 2014, and $8.5 million increase comparedwill continue to fourth quarter 2013. The same dynamic occurred with the addition of Grand’s business on July 17, 2015, with an increase of $3.3 million from the third quarter of 2015. We anticipate 2016’s net interest income will benefit from the full year impact of the Grand acquisition. The following table details the trend for net interest income and margin results (on a tax equivalent basis), and yield on earning assets that has improved tremendously and the rate on interest bearing liabilities that has changed nominally for the past five quarters:acquisitions completed in 2016.       Net Interest     Net Interest     Yield on     Rate on Interest   (Dollars in thousands)   Income (1)     Margin (1)     Earning Assets     Bearing Liabilities   Fourth quarter 2014     24,883       3.56 %     3.78 %     0.31 % First quarter 2015     25,834       3.62       3.84       0.32   Second quarter 2015     25,788       3.50       3.73       0.33   Third quarter 2015     29,130       3.75       3.98       0.33   Fourth quarter 2015     29,216       3.67       3.90       0.33   (1) On tax equivalent basis, a non-GAAP measure The slight decrease in margin for 2016 year-over-year from 2015 reflects decreased loan yields, reflecting the current low interest rate environment, partially offset by improved balance sheet mix. Margin expansion in 2015 benefited from organic and acquisition related growth, strong loan growth and improving core yields more than compensated for decreasing purchased loan accretion by the fourth quarterend of 2015.   Table 2 recapspresents the Company’s average balance sheets, interest income and expenses, and yields and rates, for the past three years.   The following table details the trend for net interest income and margin results (on a tax equivalent basis), and yield on earning assets and rate on interest bearing liabilities that has changed nominally for the past five quarters:     Net Interest     Net Interest     Yield on     Rate on Interest   (Dollars in thousands)   Income (1)     Margin (1)     Earning Assets     Bearing Liabilities   Fourth quarter 2015   $ 29,216       3.67 %     3.90 %     0.33 % First quarter 2016     30,349       3.68       3.92       0.34   Second quarter 2016     34,801       3.63       3.85       0.31   Third quarter 2016     37,735       3.69       3.90       0.30   Fourth quarter 2016     37,628       3.56       3.78       0.31   (1) On tax equivalent basis, a non-GAAP measure Total average loans increased $599.8 million or 30% during 2016 compared to 2015, and increased $531.2 million or 36.6% during 2015 compared to 2014. Our average investment securities also increased $238.3 million or 25% during 2016 versus 2015, and $225.2 million or 31% during 2015.. For 2016, average loans (the highest yielding component of earning assets) as a percentage of average earning assets totaled 66.8%, compared to 65.6% a year ago and 62.8% for 2014 while interest earning deposits and other investments decreased to 2.2%, compared to 2.5% in 2015 and 5.4% in 2014, reflecting the Company’s significant effort to reduce excess liquidity. As average total loans as a percentage of earning assets increased, the mix of loans has improved, with volumes related to commercial real estate representing 50.2% of total loans at December 31, 2016 (compared to 49.8% at December 31, 2015 and 48.9% at December 31, 2014). Lower yielding residential loan balances with individuals (including home equity loans and lines, and personal construction loans) represented 31.6% of total loans at December 31, 2016 (versus 35.7% at December 31, 2015 and 39.6 percent at December 31, 2014) (see “Loan Portfolio”). Commercial and commercial real estate loan production for 20152016 totaled almost $299$432 million, with almost $80$145 million originated in the fourth quarter of 2015, compared to production for all of 2015 and 2014 and 2013 of $258$299 million and $200$258 million, respectively. Closed residential loan production totaled $272$403 million, compared to production for all of 2015 and 2014 of $272 million and 2013 of $225 million, respectively. During 2016, an additional $63.5 million of residential mortgage and $251$19.2 million respectively.of marine loan pools were purchased, and partially offset by $70.6 million in sales of seasoned pools of portfolio residential mortgages. The following chart details the trend for commercial and residential loans closed and pipelines for the past five quarters:     Quarter-Ends       Fourth     Third     Second     First     Fourth   (Dollars in thousands)   2015     2015     2015     2015     2014                                   Commercial/commercial real estate loan pipeline   $ 105,556     $ 104,915     $ 108,538     $ 82,143     $ 60,136   Commercial/commercial real estate loans closed     80,003       71,823       85,815       61,357       94,719   Total   $ 185,559     $ 176,738     $ 194,353     $ 143,500     $ 154,855                                             Residential loan pipeline   $ 30,340     $ 37,958     $ 53,902     $ 48,485     $ 21,351   Residential loans retained     24,905       36,027       45,596       23,951       31,598   Residential loans sold     35,278       37,996       36,182       31,896       26,336   Total   $ 90,523     $ 111,981     $ 135,680     $ 104,332     $ 79,285   three years:   Along with this strong loan growth, the portfolio continued to build granularity, with industry diversification. During 2015, proceeds from the sales of securities totaled $60.5 million (including net gains of $0.2 million). In comparison, proceeds from the sales of securities totaled $21.9 million (including net gains of $0.5 million) for 2014, and proceeds from the sale of securities totaled $67.3 million for 2013 (including net gains of $0.4 million). Management believes the securities sold had minimal opportunity to further increase in value. Securities purchases in 2015, 2014 and 2013 have been conducted primarily to reinvest funds from maturities and principal repayments, as well as to reinvest excess funds (in our interest bearing deposit) at the Federal Reserve Bank, and proceeds from securities sales. During 2015, maturities (principally pay-downs of $146.6 million) totaled $147.4 million and securities portfolio purchases totaled $258.7 million. In addition, $46.4 million in securities from Grand were added to the portfolio in the third quarter of 2015. During 2014, maturities (principally pay-downs of $107.8 million) totaled $108.7 million and securities portfolio purchases totaled $345.5 million. In addition, $85.4 million in securities from BANKshares were added to the portfolio in the fourth quarter of 2014. In comparison, 2013 maturities totaled $155.6 million (including $150.3 million in pay-downs) and securities portfolio purchases totaled $230.1 million.     Twelve Months Ended December 31,   (Dollars in thousands)   2016     2015     2014                       Commercial/commercial real estate loan pipeline at year-end   $ 88,814     $ 105,556     $ 60,136   Commercial/commercial real estate loans closed     432,438       298,998       257,989                             Residential loan pipeline at year-end   $ 72,604     $ 30,340     $ 21,351   Residential loan originations retained     243,831       130,479       117,990   Residential loan originations sold     159,554       141,352       107,112     The securities portfolio has grown in size but remained a relatively constant percentage of the balance sheet. However, careful portfolio management has resulted in increased securities yields. In 20152016 our securities yielded 2.21%2.31%, up from 2.21% in 2015 and 2.14% in 2014 and 1.98% in 2013.2014.   For 2015,2016, the cost of average interest-bearing liabilities decreased 2 basis points to 0.31% from 2015. For 2015, this cost increased 1 basis point to 0.33% from 2014. For 2014, this cost decreased 4 basis points to 0.32% from 2013. The cost of our funding reflects the lowerlow interest rate environment and the Company’s successful core deposit focus that produced strong growth in core deposit customer relationships over the past several years. Excluding higher cost certificates of deposit (CDs), core deposits including noninterest bearing demand deposits at December 31, 21052016 represent 90.0% of total deposits. The cost of average total deposits (including noninterest bearing demand deposits) for the fourth quarter of 20152016 was 0.12%0.15%, compared to 0.11%0.12% and 0.14%0.11% for the fourth quarters of 20142015 and 2013.2014. Prospectively, the Company’s ability to further reduce the rate paid on deposits will be challenging to produce, due to more limited re-pricing opportunities.opportunities, competition and an increasing rate environment. The following table provides trend detail on the ending balance components of our customer relationship funding for the past five quarters-ends:three year-ends: Customer Relationship Funding   Quarter-End     December 31,     Fourth   Third   Second   First   Fourth   (Dollars in thousands)   2015   2015   2015   2015   2014     2016   2015   2014                                       Noninterest demand   $ 854,447     $ 869,877     $ 808,429     $ 793,336     $ 725,238     $ 1,148,309     $ 854,447     $ 725,238   Interest-bearing demand     734,749       618,344       599,268       634,854       652,353       873,727       734,749       652,353   Money market     665,353       660,632       621,973       596,600       450,172       802,697       665,353       450,172   Savings     295,851       286,810       282,588       272,963       264,738       346,662       295,851       264,738   Time certificates of deposit     293,987       306,633       292,919       312,072       324,033       351,850       293,987       324,033   Total deposits   $ 2,844,387     $ 2,742,296     $ 2,605,177     $ 2,609,825     $ 2,416,534     $ 3,523,245     $ 2,844,387     $ 2,416,534                                                                   Customer sweep accounts   $ 172,005     $ 148,607     $ 157,676     $ 170,023     $ 153,640     $ 204,202     $ 172,005     $ 153,640                                                                   Total core customer funding (1)   $ 2,722,405     $ 2,584,270     $ 2,469,934     $ 2,467,776     $ 2,246,141     $ 3,375,597     $ 2,722,405     $ 2,246,141                                                                   Demand deposit mix     30.0 %     31.7 %     31.0 %     30.4 %     30.0 %     32.6 %     30.0 %     30.0 %   (1) Total deposits and customer sweep accounts, excluding time certificates of deposit   Short-term borrowings, have been principally comprised of sweep repurchase agreements with customers of Seacoast Bank, increased $10.9$19.4 million or 6.4%12% to average $177.8$187.6 million during 2015,2016, after decreasing $3.2increasing $16.1 million or 11% to $152.0average $168.2 million for 2014,2015, as compared to 2013.2014. With balances typically peaking during the fourth and first quarters each year, public fund clients with larger balances have the most significant influence on average sweep repurchase agreement balances outstanding during the year. No federal funds sold were utilized at December 31, 2015, but2016 and 2015. FHLB borrowings, maturing in 30 days or less, totaled $415.0 million at December 31, 2014, the Company also utilized $80 million in term federal funds purchased2016, with an average rate of 0.61% at year-end. Advances from the FHLB of $50.0 million at 0.21% (maturing within 30 days), pending expected seasonal funding.a fixed rate of 3.22% to mature in late 2017 were redeemed early in April 2016 with an early redemption penalty $1.8 million incurred. FHLB borrowings averaged $198.3 million for 2016, up from $64.7 million for 2015 and $69.8 million for 2014 (see “Note I – Borrowings” to the Company’s consolidated financial statements).   For 2015,2016, average other borrowings comprised of subordinated debt of $67.1$70.1 million related to trust preferred securities issued by subsidiary trusts of the Company (including subordinated debt for Grand and BANKshares added on July 17, 2015 and October 1, 2014) and advances from the FHLBcarried an average cost of $50.0 million. With the exception of the inherited subordinated debt from Grand and BANKshares, no changes have occurred to other borrowings since year-end 2009 (see “Note I – Borrowings” to the Company’s consolidated financial statements)2.94%.   We have a positive interest rate gap and our net interest margin will benefit from rising interest rates. In December 2015,During 2016, the Federal Reserve increased its overnight interest rate by 25 basis points. However, further changesFurther increases in interest rates are uncertaincurrently expected for 2017 (see “Interest Rate Sensitivity”).   Fully taxable equivalent net interest income is a common term and measure used in the banking industry but is not a term used under GAAP. We believe that these presentations of tax-equivalent net interest income and tax equivalent net interest margin aid in the comparability of net interest income arising from both taxable and tax-exempt sources over the periods presented. We further believe these non-GAAP measures enhance investors’ understanding of the Company’s business and performance, and facilitate an understanding of performance trends and comparisons with the performance of other financial institutions. The limitations associated with these 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, including as a result of using different assumed tax rates. These disclosures should not be considered as an alternative to GAAP. The following information is provided to reconcile GAAP measures and tax equivalent net interest income and net interest margin on a tax equivalent basis.     Total     Fourth     Third     Second     First     Total     Fourth       Year     Quarter     Quarter     Quarter     Quarter     Year     Quarter   (Dollars in thousands   2015     2015     2015     2015     2015     2014     2014   Nontaxable interest adjustment   $ 481     $ 116     $ 119     $ 122     $ 124     $ 314     $ 150   Tax rate     35 %     35 %     35 %     35 %     35 %     35 %     35 % Net interest income (TE)   $ 109,968     $ 29,216     $ 29,130     $ 25,788     $ 25,834     $ 75,221     $ 24,883   Total net interest income (not TE)     109,487       29,100       29,011       25,666       25,710       74,907       24,733   Net interest margin (TE)     3.64 %     3.67 %     3.75 %     3.50 %     3.62 %     3.25 %     3.56 % Net interest margin (not TE)     3.62       3.66       3.73       3.48       3.60       3.24       3.54     76      Total     Fourth     Third     Second     First     Total     First       Year     Quarter     Quarter     Quarter     Quarter     Year     Quarter   (Dollars in thousands   2016     2016     2016     2016     2016     2015     2015   Nontaxable interest adjustment   $ 925     $ 203     $ 287     $ 308     $ 127     $ 481     $ 116   Tax rate     35 %     35 %     35 %     35 %     35 %     35 %     35 % Net interest income (TE)   $ 140,514     $ 37,628     $ 37,735     $ 34,801     $ 30,349     $ 109,968     $ 29,216   Total net interest income (not TE)     139,588       37,425       37,448       34,493       30,222       109,487       29,100   Net interest margin (TE)     3.63 %     3.56 %     3.69 %     3.63 %     3.68 %     3.64 %     3.67 % Net interest margin (not TE)     3.61       3.54       3.66       3.60       3.67       3.62       3.66   TE = Tax Equivalent   Noninterest Income   Noninterest income (excluding securities gains) totaled $37.4 million for 2016, higher by $5.4 million 17%. For 2015, noninterest income (excluding securities gains and bargain purchase gain) totaled $32.0 million for 2015, 29.4%29% higher than for 2014. For 2014, noninterest income of $24.7 million was $0.4 million or 1.7%2% higher than for 2013. Noninterest income accounted for 22.6%21.1% of total revenue (net interest income plus noninterest income, excluding securities gains and the bargain purchase gain), compared to 24.8%22.6% a year ago and 27.2%24.8% for 2013.2014 (on the same basis) as net interest income growth, helped by expanding net interest margin, outpaced a strong increase in noninterest income. Digitally driven product marketing and service delivery, combined with organic and acquisition-related household growth, were primary to growth occurring in noninterest income during 2016 and 2015.   Table 4 provides detail regarding noninterest income components for the past three years.   For 2015,2016, most categories of service fee income showed strong year over year growth compared to 2014,2015, with service charges on deposit accounts increasing $1.6$1.1 million or 23.2%,13% to $9.7 million, interchange income up $1.7$1.5 million or 28.7%,20% to $9.2 million, and other deposit based EFT charges up 15.7%.20% to $0.5 million. These increases reflect continued strength in customer acquisition and cross sell and benefits from acquisition activity. Overdraft fees represent 67%60% of total service charges on deposits for 2015, versus 66%67% for 2014.2015. Overdraft fees totaled $5.8 million during 2016, up nominally from 2015. Regulators continue to review banking industry’s practices for overdraft programs and additional regulation could reduce fee income for the Company’s overdraft services. Interchange revenue is dependent upon business volumes transacted, as well as the fees permitted by VISA® and MasterCard®.   Wealth management, including brokerage commissions and fees, and trust income, increased during 2015,2016, growing by $0.7$0.2 million or 14.4%4%. Growth was driven by revenues from the Company’s trust business and partially offset a slight decline in brokerage business.fees, a result of our transition from transaction fee-based sales to an investment management model.   Mortgage production was higher during 20152016 (see “Loan Portfolio”), with mortgage banking activity generating fees thatof $5.9 million which were $1.2$1.6 million or 39.1%38% higher, compared to 2014.2015. Originated residential mortgage loans are processed by commissioned employees of Seacoast, with many mortgage loans referred by the Company’s branch personnel. During 2016, two pools of seasoned portfolio mortgage were sold, generating gains of $0.9 million.   With the closureSeacoast chose to keep in its portfolio more of our loan production office in Newport Beach, California at the end of 2014,its marine financing during 2016. Marine lending business volumes for marine lending for 2015sold during 2016 were lower, negatively impacted andimpacting fees from marine financing were lower, declining $0.2which declined $0.5 million or 12.7%.42% from 2015 levels. In addition to our principal office in Ft. Lauderdale, Florida, we continue to rely uponuse third party independent contractors on the West coast of the United States to assist in generating marine loans, with all loans in California sold via secondary marketing correspondent relationships.loans.   Seacoast also benefitedDuring 2016, BOLI income totaled $2.2 million, up from $1.4 million for 2015. The increase in BOLI income reflects an additional $0.5 million from a full yeardeath benefit in the first quarter of bank owned life insurance (“BOLI”), up $1.2 million for 2015 compared to a total2016 and purchase of $0.3 million a year ago (foradditional BOLI in the fourth quarter).quarter of 2016. This revenue is tax-exempt. Notax-exempt and is expected to increase with the additional purchase during 2017. Other income was $1.3 million or 50% higher, with additional fees of $0.5 million for asset financing activities, and a general increase in other fee categories, including wire transfer fees, cashier check, money order and check cashing fees, miscellaneous loan related fees, with document preparation, construction inspection, and letter of credit fees all rising, as well as other miscellaneous fees. This growth reflects the impact of both organic and acquisition related additions to our base of customers overall. For 2015, Seacoast’s noninterest income (excluding securities gains and the bargain purchase gain) was $7.3 million or 29% higher when compared to 2014’s revenues. While service charges on deposit accounts and interchange income grew $1.6 million or 23% and $1.7 million or 29%, reflecting successful household growth, wealth management fee income and mortgage banking income were higher as well, by $1.2 million or 39% and $0.7 million or 14%, respectively. A full-year of BOLI investments existed forincome, a new addition in the Company prior to fourth quarter 2014.of 2014, provided $1.2 million of income. The closing of our Newport Beach, California office at December 31, 2014 affected marine financing fees, with these fees declining $0.2 million during 2015. Our fourth Fourth quarter 2015’s noninterest income result included a bargain purchase gain of $0.4 million from the acquisition of Grand, that arose from unanticipated recoveries and resulting adjustments to loans and other real estate owned realized during the fourth quarter. Seacoast also benefited from a gain on a participated loan of $0.7 million that was realized during the second quarter of 2015, with no amounts to compare to for 2014. Accounting treatment for this gain, related to a discount accreted on a BANKshares loan that was participated during the second quarter of 2015, required this income to be included in other operating income rather than recognition through the margin. For 2014, Seacoast’s noninterest income growth was nominal, increasing $0.4 million or 1.7% when compared to 2013’s revenues. While service charges on deposit accounts and interchange income grew $0.2 million or 3.6% and $0.6 million or 10.5%, reflecting successful organic household growth, and trust income and marine financing fees were higher by $0.3 million or 10.1% and $0.1 million or 11.0%, respectively, other revenue streams were challenged, with mortgage banking fees declining $1.1 million or 26.7%. Favorably impacting noninterest income was BOLI totaling $0.3 million that did not exist for the Company in 2013.   78  Noninterest ExpensesExpense When compared to 2013, total noninterest expenses increased during 2014 by $18.2 million or 24.2% to $93.4 million, resulting in an expense ratio (excluding amortization of intangibles) of 92.4%. For 2015, this expense ratio was 72.1%, with noninterest expenses increasing $10.4 million or 11.1% to $103.8 million. Prospectively, Seacoast management expects its expense ratio will continue to improve. The Company anticipates its digital servicing capabilities and technology will support better, more efficient channel integration allowing consumer to choose their path of convenience to satisfy their banking needs, resulting in organic growth of our products and services as well as related revenue. Acquisition activity added to noninterest expenses during 2014 and 2015, with acquisition related costs for Grand in 2015 and BANKshares in 2014 of approximately $3.1 million and $4.4 million, respectively. During 2014, we also chose to invest $0.7 million in refreshing and reintroducing our brand, and as part of this refresh, the Company retooled its logo and signage throughout our branch network and digital platforms. These additional costs have been key to our tactical plans to increase loan production and acquire households, thereby increasing value in the Seacoast franchise.   Table 5 provides detail of noninterest expense components for the years ending December 31, 2016, 2015 2014 and 2013.2014.   Salaries and wages totaling $41.1$54.1 million were $5.9$13.0 million or 16.9%32% higher for 2015,2016, than for 2014.2015, including $3.4 million in expenses related to mergers and other non-routine items. Base salaries were $6.8$7.3 million or 21.8%19% higher during 2015,2016, reflecting the full-year impact of additional personnel retained as part of the fourththird quarter 20142015 acquisition of BANKshares and thirdGrand, first quarter 2015’s2016’s acquisition of Grand. Additional FGC personnel in receivable funding were incremental as well, comprising $1.0 millionFloridian, and second quarter 2016’s purchase of the increase during 2015, versus prior year.BMO’s Orlando operations. Improved revenue generation and lending production, among other factors resulted in commissions, cash and stock incentives (aggregated) that were $3.3$4.9 million higher for 2015,2016, compared to a year ago, but that were more than offset by deferredago. Deferred loan origination costs (a contra expense), higherwere also lower by $4.1 million. Severance related to the Grand acquisition summed to $0.5 million, with total severance totaling $0.9 million for 2015.reflecting a greater number of loans produced but at a more efficient cost per loan.   Similarly, salaries and wages for 20142015 were $4.1$5.9 million or 13.3%17% higher than for 2013.2014. A significant portion of the increase was for base salaries that were by $2.7$6.8 million or 9.6%22% greater, reflecting the additionfull-year impact of BANKfirstadditional BANKshares personnel and higher severanceretained personnel from third quarter 2015’s acquisition of $0.9 million, year over year.Grand. Additional personnel from our receivable funding acquisition were incremental as well. Higher deferred loan origination costs were favorably offsetting.   During 2015,2016, employee benefits costs (group health insurance, profit sharing, payroll taxes, as well as unemployment compensation) increased $0.8$0.3 million or 9.0%4% to $9.6$9.9 million from a year ago, and compared to a $1.4$0.8 million or 19.7%9% increase in 2014,2015, versus 20132014 expenditures. These costs reflect the increased staffing and salary costs, discussed above. Our self-funded health care plan comprises the largest portion of employee benefits, totaling $4.9$4.3 million for 2015,2016, and payroll taxes totaling $3.0$3.7 million were the second largest category. The Company offers competitively priced health coverage to all of its associates that qualify for benefits, to use as an attraction for the best professional talent seeking to be employed by the Company, and at a reasonable cost and competitive with other businesses in the Florida markets where we conduct business.   Seacoast NationalBank utilizes third parties for its core data processing systems and outsourced data processing costs are directly related to the number of transactions processed. Outsourced data processing costs totaled $10.2$13.5 million for 2015,2016, an increase of $1.4$3.4 million or 15.6%33% from a year ago, and were $2.4$1.4 million higher for 2014,2015, versus 2013.2014. Increased data processing costs included $2.1 million in one-time charges for conversion activity related to our acquisition.acquisitions. We continue to improve and enhance our mobile and other digital products and services through our core data processor, which may increase our outsourced data processing costs as customers adopt improvements and products. The Company’s contract with its core data processor was renegotiated as of January 1, 2013 for a term of 5½ years. Outsourced data processing costs can be expected to increaseproducts and as the Company’s business volumes grow.   Telephone and data line expenditures, including electronic communications with customers and between branch locations and personnel, as well as third party data processors, increased $0.3 million or 17% to $2.1 million for 2016 when compared to 2015, and were $0.5 million or 35.0% to $1.8 million35% higher for 2015 when compared to 2014,versus 2014’s expenditure. Additional activity for acquired Floridian and were $0.1 million or 6.2% higher for 2014 versus 2013’s expenditure. The addition of BANKshares and GrandBMO locations and locations closed during 2016, as well as additional customers from the acquisitions, were the primary contributors to the increase.   Total occupancy, furniture and equipment expense for 20152016 increased $1.7$5.7 million or 16.4%47% (on an aggregate basis) to $12.2$17.8 million year over year, versus 2014’s2015’s expense. For 2014,2015, these costs were $5.4$1.7 million or 57.2%16% higher than in 2013.2014. For 20152016 and 2014,2015, the increases were primarily driven by the two24 offices acquired from Grand,Floridian and twelve branches acquiredBMO acquisitions and two offices added from Grand. Seacoast Bank consolidated 20 offices, primarily in the BANKshares acquisition. ACentral Florida region, during the 2016 calendar year and a third Grand office was closed during the third quarter of 2015, due to its proximity to our existing location and resulted in a charge of $0.1 million. Two othertwo legacy branches were closed during 2015, with no write down in value2015. Write downs totaling $2.3 million were incurred during 2016 for closed offices. Lease payments were also higher by $1.1 million or 27%, and are currently being marketed. Branch consolidations duringinclude recurring payments for many of the fourth quarter of 2014 lessened the impact of acquired locations as well.closed offices. Branch consolidations are likely to continue for the Company and the banking industry in general, as customers increase their usage of digital and mobile products thereby lessening the necessity to visit offices (see Form 10K dated December 31, 2015, “Item 2, Properties” for a complete description).   For 2015,2016, marketing expenses (including sales promotion costs, ad agency production and printing costs, digital, newspaper, TV and radio advertising, and other public relations costs), increaseddecreased by $0.9$0.8 million or 23.8%18% to $4.4$3.6 million, compared to all of 2014.2015. For 2014,2015, these costs were $1.2$0.9 million or 52.9%24% higher, versus 2013.2014. Primary to these increasesthe decrease during 2016 was an effort to utilize digital media as a primary source for brand awareness rather than more costly, traditional venues such as newspaper, radio and TV advertising, with the savings utilized for more direct mail and customer incentives. Increases for 2015 and 2014 were related to efforts to solidify customer acquisition and corporate brand awareness surrounding the Grandnewer Palm Beach and BANkshares Orlando footprint. Mediafootprints, with more advertising on television and radio was higher in 2015, totaling $0.8 million and increasing our expense $0.5 million from 2014. Expenditures for 2014 also included $0.7 million to refresh and reintroduce our brand, an expense not existing in prior year.   Legal and professional fees for 20152016 were higher by $1.2$1.6 million or 16.8%20% from a year ago, and were $4.4$1.2 million higher for 2014,2015, versus 2013.2014. Included were acquisition related fees that totaled $1.5 million for 2016 and $1.1 million for 2015 and $2.4 million for 2014. No acquisition related fees were incurred during 2013. Recoveries of legal fees from two creditors summed to $1.0 million and accounted for most of the remaining increase for 2014, versus 2013.2015. Regulatory examination fees increased as total assets increased, which are the basis for examination fee calculation.   Since the end of the first quarter in 2013, FDIC assessments have been generally calculated on the basis of average total assets less tangible equity. While the Company has benefited from its classification under FDIC premium guidelines, our growthGrowth in total assets (both organic and through acquisition) hasacquisitions) increased the basis for calculatedcalculating our FDIC premiums and increases inincreased our FDIC quarterly assessment. Ourassessments. FDIC assessments were $2.4 million, $2.2 million and $1.7 million for 2016, 2015 and $2.6 million for 2015, 2014, and 2013, respectively. The Company’s assessments were lower for 2014 than in 2013 when the FDIC changed its calculation methodology. That change resulted in an improved risk posture for the Company, and regulatory enforcement actions terminated in 2013 were beneficial as well. Totaltotal assets and equity have increased during the past three years and SeacostSeacoast expects increases prospectively. FDIC rates could declinedeclined for financial institutioninstitutions under $10 billion in total assets ifas FDIC insurance pools achieveachieved higher amounts as specified by Congress.   Since 2013 when asset disposition expense and net losses on sales of OREO and other repossessed assets aggregated to $2.0 million,As nonperforming assets have declined so have associated costs (see “Nonperforming Loans, Troubled Debt Restructurings, Other Real Estate Owned, and Credit Quality”).  For the last three years, asset disposition costs and so have these associated costs. For 2015net (gains) losses on other real estate owned and 2014, these expensesrepossessed assets on an aggregated basis have been stable and aggregatedor declined, from $0.8 million for 2014 to $0.7 million and $0.8 million respectively.for 2015 to zero for 2016.   Included in noninterest expenses for 2016 was an early redemption cost of $1.8 million for Federal Home Loan Bank advances that was paid in April. Two $25 million advances with a combined fixed rate of 3.22% and maturing in November 2017 were redeemed (see “Note I – Borrowings”). Other expenses were higher by $2.2$1.3 million or 22.2%11% for 20152016 compared to a year ago, totaling $12.2$13.5 million. For 2014,2015, other expenses were $0.5$2.2 million or 5.4%22% higher, compared to 2013.2014. Larger increases during 2016 and 2015 were driven by a full-year impactand partial-year impacts of the BANKshares acquisition and the Grand acquisition in the third quarter of 2015,acquisitions and variable costs related to our successful lending activity. Seacoast management expects its expense ratios to improve. The Company anticipates its digital servicing capabilities and technology will support better, more efficient channel integration allowing consumers to choose their path of convenience to satisfy their banking needs, resulting in organic growth of our products and services as well as related revenue, in addition to increased efficiency in how we serve our customers. Acquisition activity added to noninterest expenses during 2016, 2015, and 2014 with acquisition related costs for Floridian and BMO in 2016, Grand in 2015 and BANKshares in 2014 of approximately $8.6 million, $3.7 million and $4.4 million, respectively, as well as ongoing costs related to this growth. These additional costs have been key to our tactical plans to increase loan production and acquire households, increasing value in the Seacoast franchise.   Income Taxes   For 2016, 2015 2014 and 2013,2014, provision for income taxes totaled $14.9 million, and $13.5 million and $4.5 million, and $4.4 million, respectively. For 2016, 2015 and 2014, a portion of investment banking fees, and legal and professional fees expended and related to the acquisitions were not deductible for tax purposes. At September 30, 2013, we were ableVarious tax strategies have been implemented to reversereduce the Company’s overall effective tax rate to 33.8% for 2016, from 37.9% in 2015 and 44.4% in 2014. Additionally, the early adoption of ASU 2016-09 during the third quarter of 2016 provided a tax benefit of $0.8 million for the year (see “Note A- Significant Accounting Policies”). Management believes all of the future tax benefits of the Company’s deferred tax assets can be realized and no valuation allowance of $44.8 million. Management believes it can realize all of its future tax benefitsis required (see “Note L – Income Taxes”).   Critical Accounting Policiesand Estimates   The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles, (“GAAP”), including prevailing practices within the financial services industry. The preparation of consolidated financial statements requires management to make judgments in the application of certain of its accounting policies that involve significant estimates and assumptions. We have established policies and control procedures that are intended to ensure valuation methods are well controlled and applied consistently from period to period. These estimates and assumptions, which may materially affect the reported amounts of certain assets, liabilities, revenues and expenses, are based on information available as of the date of the financial statements, and changes in this information over time and the use of revised estimates and assumptions could materially affect amounts reported in subsequent financial statements. Management, after consultation with the Company’s Audit Committee, believes the most critical accounting estimates and assumptions that involve the most difficult, subjective and complex assessments are:   the allowance and the provision for loan losses; acquisition accounting and purchased loans; intangible assets and impairment testing; other fair value adjustments; other than temporary impairment of securities; realization of deferred tax assets; and contingent liabilities. The following is a discussion of the critical accounting policies intended to facilitate a reader’s understanding of the judgments, estimates and assumptions underlying these accounting policies and the possible or likely events or uncertainties known to us that could have a material effect on our reported financial information. For more information regarding management’s judgments relating to significant accounting policies and recent accounting pronouncements (see “Note A-Significant Accounting Policies” to the Company’s consolidated financial statements).   Allowance and Provision for Loan Losses – Critical Accounting Policies and Estimates   Management determines the provision for loan losses charged to operations by continuallycontinuously analyzing and monitoring delinquencies, nonperforming loans levels and the level of outstanding balances for each loan category, as well as the amount of net charge-offs, and byfor estimating losses inherent in its portfolio. While the Company’s policies and procedures used to estimate the provision for loan losses charged to operations are considered adequate by management, factors beyond the control of the Company, such as general economic conditions, both locally and nationally, make management’s judgment as to the adequacy of the provision and allowance for loan losses necessarily approximate and imprecise (see “Nonperforming Assets”).   The provision for loan losses is the result of a detailed analysis estimating an appropriate and adequate allowance for probable loan losses. The analysis includes the evaluation of impaired and purchased credit impaired loans as prescribed under FASB Accounting Standards Codification (“ASC”) 310,Receivablesas well as an analysis of homogeneous loan pools not individually evaluated as prescribed under ASC 450,Contingencies. For 2015, we2016, the Company recorded provisioning for loan losses of $2.6$2.4 million, which compared to provisioning for loan losses for 2015 of $2.6 million, and a recapture of the allowance for loan losses for 2014 of $3.5 million. NetThe Company achieved net recoveries for 2016 of $1.9 million, compared to net charge-offs for 2015 of $0.6 million, for 2015, compared toand net recoveries for 2014 of $0.5 million and wererepresenting (0.07%), 0.03% and (0.03%) of average total loans for each year, respectively. For 2015,2016, provisioning for loan losses reflects continued strong credit metrics and net recoveries, offset by continued loan growth. Charge-offs for 2015 includes $655,000 recorded in the third quarter related to a single purchased credit impaired loan that performed below our initial expectations.growth both organic and through merger and acquisition activity. Delinquency trends remain low and show continued stability (see section titled “Nonperforming Assets”Loans, Troubled Debt Restructurings, Other Real estate Owned, and Credit Quality”). Table 10 provides certain information concerning the Company’s provisioning for loan losses and allowance (recapture) for the years indicated.   Management continuously monitors the quality of the Company’s loan portfolio and maintains an allowance for loan losses it believes is sufficient to absorb probable losses inherent in the loan portfolio. The allowance for loan losses increased $2,057,000$4.3 million to $19,128,000$23.4 million at December 31, 2015,2016, compared to $17,071,000$19.1 million at December 31, 2014.2015. The allowance for loan and lease losses (“ALLL”) framework has four basic elements: (1) specific allowances for loans individually evaluated for impairment; (2) general allowances for pools of homogeneous non-purchased loans (“portfolio loans”) within the portfolio that have similar risk characteristics, which are not individually evaluated; (3) specific allowances for purchased impaired loans which are individually evaluated based on the loans expected principal and interest cash flows; and (4) general allowances for purchased unimpaired pools of homogeneous loans that have similar risk characteristics. The aggregate of these four components results in our total allowance for loan losses.   The first element of the ALLL analysis involves the estimation of an allowance specific to individually evaluated impaired portfolio loans, including accruing and nonaccruingnon-accruing restructured commercial and consumer loans. In this process, a specific allowance is established for impaired loans based on an analysis of the most probable sources of repayment, including discounted cash flows, liquidation or operation of the collateral, or the market value of the loan itself. It is the Company’s policy to charge off any portion of the loan deemed a loss.uncollectable. Restructured consumer loans are also evaluated and included in this element of the estimate. As of December 31, 2015,2016, the specific allowance related to impaired portfolio loans individually evaluated totaled $2.5$2.3 million, compared to $3.6$2.5 million as of December 31, 2014.2015. Residential loans that become 90 days past due are placed on nonaccrual and a specific allowance is made for any loan that becomes 120 days past due. Residential loans are subsequently written down if they become 180 days past due and such write-downs are supported by a current appraisal, consistent with current banking regulations. The second element of the ALLL analysis, the general allowance for homogeneous portfolio loan pools not individually evaluated, is determined by applying allowance factors to pools of loans within the portfolio that have similar risk characteristics. The general allowance factors areis determined using a baseline factor that is developed from an analysis of historical net charge-off experience and qualitative factors designed and intended to measure expected losses.experience. These baseline factors are developed and applied to the various portfolio loan pools. Adjustments may be made to baseline reserves for some of the loan pools based on an assessment of internal and external influences on credit quality not fully reflected in the historical loss.loss experience. These influences may include elements such as changes in concentration, risk, macroeconomic conditions, and/or recent observable asset quality trends. The loan portfolio is segregated into the following primary types: commercial, commercial real estate, residential, installment, home equity, and unsecured signature lines. The loss factors assigned to the graded commercial loan portfolio are based on the historical migration of actual losses by grade over 4, 8, 12, 16, and 20 quarter intervals. Minimum and maximum average historical loss rates over one to five years are referenced in setting the loss factors by grade within the graded portfolio. The loan loss migration indicates that the minimum and maximum average loss rates and median loss rates over the past many quarters have been declining. Also, the level of criticized and classified loans as a percentage of total loans has been declining as a result of a combination of prudent upfront underwriting practices, risk grading upgrades and loan payoffs, which are reducing the risk profile of the loan portfolio. Residential and consumer (installment, secured lines, and unsecured lines) are analyzed differently as risk ratings, or grades, are not assigned to individual loans. Residential and consumer segment loss rates represent an annualized expectation of loss based on the historical average net loss divided average outstanding balances.   Management uses historical loss factors as its starting point, and qualitative elements are considered to capture trends within each segment of the portfolio. Internal influences such as the direction of past dues, charge-offs, nonaccruals, classified loans, portfolio mix, market conditions, and risk management controls are considered in determining adjustments to loss rates loss factors. Adjustments may also be made to baseline loss rates for some of the loan pools based on an assessment of the extent to which external influences on credit quality are not fully reflected in the historical loss rates. These influences may include elements such as changes in the micro/macroeconomic conditions, and/or recent regulatory changes. In addition, internal reviews may also drive possible adjustments. The Company’s Loan Review unit is independent, and performs loan reviews and evaluates a representative sample of credit extensions after the fact for appropriate individual internal risk ratings. Loan Review has the authority to change internal risk ratings and is responsible for assessing the adequacy of credit underwriting. This unit reports directly to the Directors’ Loan Committee of Seacoast National Bank’s board of directors. Our bank regulators have generally agreed with our credit assessment, however in the future, regulators could seek additional provisions to our allowance for loan losses, which would reduce our earnings. The third component consists of amounts reserved for purchased credit-impaired loans.loans (PCI). On a quarterly basis, the Company updates the amount of loan principal and interest cash flows expected to be collected, incorporating assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of current market conditions. Probable decreases in expected loan principal cash flows trigger the recognition of impairment, which is then measured as the present value of the expected principal loss plus any related foregone interest cash flows discounted at the pool’s effective interest rate. Impairments that occur after the acquisition date are recognized through the provision for loan losses. Probable and significant increases in expected principal cash flows would first reverse any previously recorded allowance for loan losses; any remaining increases are recognized prospectively as interest income. The impacts of (i) prepayments, (ii) changes in variable interest rates, and (iii) any other changes in the timing of expected cash flows are recognized prospectively as adjustments to interest income. Disposals of loans, which may include sales of loans, receipt of payments in full by the borrower, or foreclosure, result in removal of the loan from the purchased credit impaired portfolio.   The final component consists of amounts reserved for purchased unimpaired loans.loans (PUL). Loans collectively evaluated for impairment reported at December 31, 20152016 include loans acquired from BMO Harris on June 3, 2016, Floridian Bank on March 11, 2016, Grand Bank on July 17, 2015 and BANKshares on October 1, 2014 that are not PCI loans. These loans are performing loans recorded at estimated fair value at the acquisition date. TheThese fair value adjustment for loans acquired from Grand and BANKshares at their acquisition dates was approximately $3.2 million (2.7% of the outstanding aggregate loan balances) and $11.2 million (3.1% of the outstanding aggregate loan balances), respectively. Thesediscount amounts are accreted into interest income over the remaining lives of the related loans on a level yield basis, and remained adequate at December 31, 2015, and therefore no provision for loan loss was recorded related to these loans at December 31, 2015 and 2014.2016.   Our analyses of the adequacy of the allowance for loan losses also takes into account qualitative factors such as credit quality, loan concentrations, internal controls, audit results, staff turnover, local market conditions, employment levels and loan growth. These qualitative factors are another protective layer of reserves that can be applied to a particular loan segment or to all loans equally.   The Company’s independent Credit Administration Department assigns all loss factorsallowance as a percentage of portfolio loans outstanding (excluding PCI and PUL loans) was 0.96% at December 31, 2016, compared to the individual internal risk ratings based on an estimate of the risk using a variety of tools and information. Its estimate includes consideration of the1.03% at December 31, 2015. The reduced level of unemployment which is incorporated intoimpaired loans contributed to a lower risk of loss and the overall allowance. In addition, the portfolio loans are segregated into a gradedlower allowance for loan portfolio, residential, installment, home equity, and unsecured signature lines, and loss factors are calculated for each portfolio. The loss factors assigned to the graded loan portfolio are based on the historical migrationlosses as of actual losses by grade over 4, 8, 12, 16, 20 and 24 quarter intervals. Minimum and maximum average historical loss rates over one to five years are referenced in setting the loss factors by grade within the graded portfolio. Management uses historical loss factors as its starting point, and qualitative elements are considered to capture trends within each portion of the graded portfolio.December 31, 2016. The direction and expectations of past dues, charge-offs, nonaccruals, classified loans, portfolio mix, market conditions, and risk management controls are considered in setting loss factors for the graded portfolio. The loan loss migration indicates that the minimum and maximum average loss rates and median loss rates over the past many quarters have been declining. Also, the level of criticized and classified loans has been declining as a result of a combination of upgrades and loan payoffs, which are reducing the risk profile of the loan portfolio. Additionally,portfolio has been reduced by implementing a program to decrease the risk profile has declined given the shift in complexion of the graded portfolio, particularly a reduced level of credit risk in such portfolio by strengthening credit management methodologies and executing a low risk strategic plan for loan growth. New loan production has shifted to adjustable rate residential real estate loans, owner-occupied commercial real estate, small business loans for professionals and businesses, as well as consumer lending. Strategies, processes and controls are in place to ensure that new production is well underwritten and maintains a focus on smaller, diversified and lower-risk lending. The improved mix is most evident by a lower percentage of loans in income producing commercial real estate and construction and land development loans than during the prior economic recession. Prospectively, we anticipate that the allowance is likely to benefit from continued improvement in our credit quality, but offset by more normal loan concentrations.growth as business activity and the economy improves. ResidentialConcentrations of credit risk, discussed under the caption “Loan Portfolio” of this discussion and consumer (installment, secured lines, and unsecured lines) are analyzed differently as risk ratings, or grades, are not assigned to individual loans. Residential and consumer loan losses are tracked by pool. Management examinesanalysis, can affect the historical losses over one to five years in its determinationlevel of the appropriate loss factor for vintagesallowance and may involve loans to one borrower, an affiliated group of borrowers, borrowers engaged in or dependent upon the same industry, or a group of borrowers whose loans are predicated on the same type of collateral. The Company’s most significant concentration of credit is a portfolio of loans currentlysecured by real estate. At December 31, 2016, the Company had $2.354 billion in loans secured by real estate, representing 81.8% of total loans, up from $1.842 billion but lower as a percent of total loans (versus 85.4%) at December 31, 2015. In addition, the portfolio rather than the vintages that produced the significant lossesCompany is subject to a geographic concentration of credit because it only operates in prior years. These loss factors are then adjusted by qualitative factors determined by management to reflect potential probable losses inherent in each loan pool. Qualitative factors may include various loan or property types, loan to value, concentrationscentral and economic and environmental factors.southeastern Florida.   Residential loansIt is the practice of the Company to ensure that become 90 days past due are placed on nonaccrual and a specific allowance is made for any loan that becomes 120 days past due. Residential loans are subsequently written down if they become 180 days past due and such write-downs are supported by a current appraisal, consistent with current banking regulations. Ourits charge-off policy meets or exceeds regulatory minimums. Losses on unsecured consumer loans are recognized at 90 days past due, compared to the regulatory loss criteria of 120 days. SecuredIn compliance with Federal Financial Institution Examination Council guidelines, secured consumer loans, including residential real estate, are typically charged-off or charged down between 120 and 180 days past due, depending on the collateral type, in compliance with Federal Financial Institution Examination Council guidelines.type. Commercial loans and real estate loans are typically placed on nonaccrual status when principal or interest is past due for 90 days or more, unless the loan is both secured by collateral having realizable value sufficient to discharge the debt in-full and the loan is in the legal process of collection. Secured loans may be charged-down to the estimated value of the collateral with previously accrued unpaid interest reversed. Subsequent charge-offs may be required as a result of changes in the market value of collateral or other repayment prospects. Initial charge-off amounts are based on valuation estimates derived from appraisals, broker price opinions, or other market information. Generally, new appraisals are not received until the foreclosure process is completed; however, collateral values are evaluated periodically based on market information and incremental charge-offs are recorded if it is determined that collateral values have declined from their initial estimates.   Management continually evaluates the allowance for loan losses methodology and seeks to refine and enhance this process as appropriate. As a result, it is likely that the methodology will continue to evolve over time. Our Loan Review unit is independent, and performs loan reviews and evaluates a representative sample of credit extensions after the fact for appropriate individual internal risk ratings. Loan Review has the authority to change internal risk ratings and is responsible for assessing the adequacy of credit underwriting. This unit reports directly to the Directors’ Loan Committee of Seacoast National’s board of directors. Table 11 summarizes the Company’s allocation of the allowance for loan losses to real estate loans, commercial and financial loans, and installment loans to individuals, and information regarding the composition of the loan portfolio at the dates indicated. Net charge-offs for the year ended December 31, 2015 totaled $587,000, compared to net recoveries of $489,000 for the year ended December 31, 2014 (See “Table 10 – Summary of Loan Loss Experience” for detail on net charge-offs for the last five years). Note F to the financial statements (titled “Impaired Loans and Allowance for Loan Losses”) summarizes the Company’s allocation of the allowance for loan losses to construction and land development loans, commercial and residential estate loans, commercial and financial loans, and consumer loans, and provides more specific detail regarding charge-offs and recoveries for each loan component and the composition of the loan portfolio at December 31, 2015 and 2014.Although there is no assurance that we will not have elevated charge-offs in the future, we believe that we have significantly reduced the risks in our loan portfolio. The allowance as a percentage of portfolio loans outstanding (excluding PCI and PUL loans) was 1.03 percent at December 31, 2015, compared to 1.14 percent at December 31, 2014. The allowance for loan losses represents management’s estimate of an amount adequate in relation to the risk of losses inherent in the loan portfolio. The reduced level of impaired loans contributed to a lower risk of loss and the lower allowance for loan losses as of December 31, 2015. The risk profile of the loan portfolio has been reduced by implementing a program to decrease the level of credit risk in such portfolio by strengthening credit management methodologies and implementing a low risk “back-to-basics” strategic plan for loan growth. New loan production has shifted to adjustable rate residential real estate loans, owner-occupied commercial real estate, small business loans for professionals and businesses, and consumer lending. Strategies, processes and controls are in place to ensure that new production is well underwritten and maintains a focus on smaller, diversified and lower-risk lending. Aided by initiatives embodied in new loan programs and continued aggressive collection actions, the portfolio mix has changed dramatically and has become more diversified. The improved mix is most evident by a lower percentage of loans in income producing commercial real estate and construction and land development loans. Prospectively, we anticipate that the allowance is likely benefit from continued improvement in our credit quality, but offset by more normal loan growth as business activity and the economy improves. Concentrations of credit risk, discussed under the caption “Loan Portfolio” of this discussion and analysis, can affect the level of the allowance and may involve loans to one borrower, an affiliated group of borrowers, borrowers engaged in or dependent upon the same industry, or a group of borrowers whose loans are predicated on the same type of collateral. The Company’s most significant concentration of credit is a portfolio of loans secured by real estate. At December 31, 2015, the Company had $1.842 billion in loans secured by real estate, representing 85.4 percent of total loans, up from $1.611 billion but lower as a percent of total loans (versus 88.4 percent) at December 31, 2014. In addition, the Company is subject to a geographic concentration of credit because it only operates in central and southeastern Florida. Whilementioned, while it is the Company’s policy to charge off in the current period loans in which a loss is considered probable, there are additional risks of future losses that cannot be quantified precisely or attributed to particular loans or classes of loans. Because these risks include the state of the economy, borrower payment behaviors and local market conditions as well as conditions affecting individual borrowers, management’s judgment of the allowance is necessarily approximate and imprecise. The allowance is also subject to regulatory examinations and determinations as to adequacy, which may take into account such factors as the methodology used to calculate the allowance for loan losses and the size of the allowance for loan losses in comparison to a group of peer companies identified by the regulatory agencies. Management will consistently evaluate the allowance for loan losses methodology and seek to refine and enhance this process as appropriate. As a result, it is likely that the methodology will continue to evolve over time. Table 10 provides certain information concerning the Company’s provisioning for loan losses and allowance (recapture) for the years indicated.   In assessingNote F to the adequacyfinancial statements (titled “Impaired Loans and Allowance for Loan Losses”) summarizes the Company’s allocation of the allowance management relies predominantly on its ongoing reviewfor loan losses to construction and land development loans, commercial and residential estate loans, commercial and financial loans, and consumer loans, and provides more specific detail regarding charge-offs and recoveries for each loan component and the composition of the loan portfolio which is undertaken both to ascertain whether there are probable losses that must be charged offat December 31, 2016 and to assess2015. Table 11 summarizes the risk characteristicsCompany’s allocation of the portfolio in aggregate. This review considers the judgments of management, and also those of bank regulatory agencies that review the loan portfolio as part of their regular examination process. Our bank regulators have generally agreed with our credit assessment, however in the future, regulators could seek additional provisions to our allowance for loan losses which would reduce our earnings.to real estate loans, commercial and financial loans, and installment loans to individuals, and information regarding the composition of the loan portfolio at the dates indicated.   80  Acquisition Accounting and Purchased Loans – Critical Accounting Policies and Estimates   The Company accounts for its acquisitions under ASC Topic 805,Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. No allowance for loan losses related to the acquired loans is recorded on the acquisition date as the fair value of the loans acquired incorporates assumptions regarding credit risk. All loans acquired are recorded at fair value in accordance with the fair value methodology prescribed in ASC Topic 820. The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of expected principal, interest and other cash flows.   Over the life of the purchased credit impaired loans acquired, the Company continues to estimate cash flows expected to be collected. The Company evaluates at each balance sheet date whether the present value of the acquired loans using the effective interest rates has decreased and if so, recognizes a provision for loan loss in its consolidated statement of income. For any increases in cash flows expected to be collected, the Company adjusts the amount of accretable yield recognized on a prospective basis over the loan’s remaining life. Intangible Assets and Impairment Testing – Critical Accounting Policies and Estimates   Intangible assets consist of goodwill and core deposit intangibles. Goodwill represents the excess purchase price over the fair value of net assets acquired in business acquisitions. The core deposit intangible represents the excess intangible value of acquired deposit customer relationships as determined by valuation specialists. The core deposit intangibles from the BANKshares, Grand, Floridian and Grand acquisitionsBMO are being amortized over 74 months, 94 months, 69 months and 9487 months, respectively, on a straight-line basis.basis, and are evaluated for indications of potential impairment at least annually. Goodwill is not amortized but rather is evaluated for impairment on at least an annual basis. We performed an annual impairment test of goodwill and core deposit intangibles as required by FASB ASC 350,Intangibles—Goodwill and Other, in the fourth quarter of 2015 for the BANKshares acquisition (on October 1, 2014).2016. Seacoast employed an independent third party with extensive experience in conducting and documenting impairment tests of this nature, and concluded that no impairment occurred. Goodwill was not recorded for the Grand acquisition (on July 17, 2015) that resulted in a bargain purchase gain, however a core deposit intangible was recorded. Fair value estimates for acquired assets and assumed liabilities are based on the information available, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available.   Other Fair Value Measurements – Critical Accounting Policies and Estimates   “As Is” values are used to measure fair market value on impaired loans, OREO and repossessed assets. All impaired loans, OREO and repossessed assets are reviewed quarterly to determine if fair value adjustments are necessary based on known changes in the market and/or the project assumptions.  When necessary, the “As Is” appraised value may be adjusted based on more recent appraisal assumptions received by the Company on other similar properties, the tax assessed market value, comparative sales and/or an internal valuation. Collateral dependent impaired loans are loans that are solely dependent on the liquidation or operation of the collateral for repayment.  If an updated assessment is deemed necessary and an internal valuation cannot be made, an external “As Is” appraisal will be obtained. If the “As Is” appraisal does not appropriately reflect the current fair market value, in the Company’s opinion, a specific reserve is established and/or the loan is written down to the current fair market value. Collateral dependent impaired loans are loans that are solely dependent on the liquidation of the collateral for repayment.   All OREO and repossessed assets (“REPO”) are reviewed quarterly to determine if fair value adjustments are necessary based on known changes in the market and/or project assumptions. When necessary, the “As Is” appraisal is adjusted based on more recent appraisal assumptions received by the Company on other similar properties, the tax assessment market value, comparative sales and/or an internal valuation is performed. If an updated assessment is deemed necessary, and an internal valuation cannot be made, an external appraisal will be requested. Upon receipt of the “As Is” appraisal a charge-off is recognized for the difference between the loan amount and its current fair market value.   “As Is” values are used to measure fair market value on impaired loans, OREO and REPOs. At December 31, 2015,2016, outstanding securities designated as available for sale totaled $790.8$950.5 million. The fair value of the available for sale portfolio at December 31, 20152016 was less than historical amortized cost, producing net unrealized losses of $7.8$10.3 million that have been included in other comprehensive income (loss) as a component of shareholders’ equity (net of taxes). The Company made no change to the valuation techniques used to determine the fair values of securities during 20152016 and 2014.2015. The fair value of each security available for sale was obtained from independent pricing sources utilized by many financial institutions or from dealer quotes. The fair value of many state and municipal securities are not readily available through market sources, so fair value estimates are based on quoted market price or prices of similar instruments. Generally, the Company obtains one price for each security. However, actual values can only be determined in an arms-length transaction between a willing buyer and seller that can, and often do, vary from these reported values. Furthermore, significant changes in recorded values due to changes in actual and perceived economic conditions can occur rapidly, producing greater unrealized losses or gains in the available for sale portfolio.   The credit quality of the Company’s securities holdings are primarily investment grade. As of December 31, 2015,2016, the Company’s available for sale investment securities, except for approximately $39.9$62.9 million of securities issued by states and their political subdivisions, generally are traded in liquid markets. U.S. Treasury and U.S. Government agency obligations totaled $433.9$552.4 million, or 54.958 percent of the total available for sale portfolio. The portfolio also includes $109.7$99.3 million in private label securities, most secured by residential real estate collateral originated in 2005 or prior years with low loan to values, and current FICO scores above 700. Generally these securities have credit support exceeding 5%. The collateral underlying these mortgage investments are primarily 30- and 15-year fixed rate, 5/1 and 10/1 adjustable rate mortgage loans. Historically, the mortgage loans serving as collateral for those investments have had minimal foreclosures and losses. The Company also has invested $122.6$124.9 million in uncapped 3-month Libor floating rate collateralized loan obligations. Collateralized loan obligations are special purpose vehicles that purchase loans as assets that provide a steady stream of income and possible capital appreciation. The collateral for the securities is first lien senior secured corporate debt. The Company has purchased senior tranches rated credit A or higher and performed stress tests, which indicated that the senior subordination levels are sufficient and no principal loss is forecast, verifying the independent rating. In addition, during 2015 and 2016, the Company acquired several corporate bonds and private commercial mortgage backed securities totaling $84.7$111.0 million at year-end. At March 11, 2016 and July 7,17, 2015, Floridian and Grand securities of $67.0 million and $46.4 million, respectively, were acquired and added to the available for sale portfolio at their fair value, and at October 1, 2104, BANKshares securities of $85.4 million were acquired and added to the available for sale portfolio at their fair market value.   On May 31,During 2014, management identified $158.8 million of investment securities available for sale and transferred them to held for investment. The unrealized holding losses at the date of transfer totaled $3.0 million. For the securities that were transferred into the held for investment category from the available for sale category, the unrealized holding losses at the date of the transfer will continue to be reported in other comprehensive income, and will be amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of a discount. At December 31, 2016, the remaining unamortized amount of these losses was $1.8 million. The amortization of unrealized holding losses reported in equity will offset the effect on interest income of the amortization of the discount. Management believes the securities transferred are a core banking asset that they now intend to hold until maturity, and if interest rates were to increase before maturity, the fair values would be impacted more significantly and therefore are not consistent with the characteristics of an available for sale investment.   Seacoast Bank also holds 11,330 shares of Visa Class B stock, which following resolution of Visa’s litigation will be converted to Visa Class A shares (the conversion rate presently is 1.6483 shares of Class A stock for each share of Class B stock) for a total of 18,675 shares of Visa Class A stock. Our ownership is related to prior ownership in Visa’s network, while Visa operated as a cooperative. This ownership is recorded on our financial records at zero basis. Other Than Temporary Impairment of Securities – Critical Accounting Policies and Estimates   Our investments are reviewed quarterly for other than temporary impairment (“OTTI”). The following primary factors are considered for securities identified for OTTI testing: percent decline in fair value, rating downgrades, subordination, duration, amortized loan-to-value, and the ability of the issuers to pay all amounts due in accordance with the contractual terms. Prices obtained from pricing services are usually not adjusted. Based on our internal review procedures and the fair values provided by the pricing services, we believe that the fair values provided by the pricing services are consistent with the principles of ASC 820,Fair Value Measurement.Measurement. However, on occasion pricing provided by the pricing services may not be consistent with other observed prices in the market for similar securities. Using observable market factors, including interest rate and yield curves, volatilities, prepayment speeds, loss severities and default rates, the Company may at times validate the observed prices using a discounted cash flow model and using the observed prices for similar securities to determine the fair value of its securities.   Changes in the fair values, as a result of deteriorating economic conditions and credit spread changes, should only be temporary. Further, management believes that the Company’s other sources of liquidity, as well as the cash flow from principal and interest payments from its securities portfolio, reduces the risk that losses would be realized as a result of a need to sell securities to obtain liquidity.   The Company also held stock in the Federal Home Loan Bank of Atlanta (“FHLB”) totaling $5.1 million as of December 31, 2015, $3.4 million less than the balance at year-end 2014. The Company accounts for its FHLB stock based on the industry guidance in ASC 942, Financial Services—Depository and Lending, which requires the investment to be carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. We evaluated our holdings in FHLB stock at December 31, 2015 and believe our holdings in the stock are ultimately recoverable at par. We do not have operational or liquidity needs that would require redemption of the FHLB stock in the foreseeable future and, therefore, have determined that the stock is not other-than-temporarily impaired. Realization of Deferred Tax Assets – Critical Accounting Policies and Estimates   At December 31, 2015,2016, the Company had net deferred tax assets (“DTA”) of $60.3$60.8 million. Although realization is not assured, management believes that realization of the carrying value of the DTA is more likely than not, based upon expectations as to future taxable income and tax planning strategies, as defined by ASC 740Income Taxes.Taxes. In comparison, at December 31, 20142015 the Company had a net DTA of $66.8$60.3 million.   Factors that support this conclusion:   · Income before tax (“IBT”) has steadily increased as a result of organic growth, and the 2014 BANKshares2015 Grand and 2015 Grand2016 Floridian and BMO acquisitions will further assist in achieving management’s forecast of future earnings which recovers the net operating loss carry-forwards well before expiration; · Credit costs have declined and overall credit risk has declinedbeen stable which decreases thetheir impact on future taxable earnings; · Growth rates for loans are at levels adequately supported by the acquisitions, increased loan officers and support staff.Additional loan officer salaries were added to assure loan portfolio growth and support increased interest income;staff; · New loan production credit quality and concentrations are being well managed through improved and enhanced credit functions and therefore should not cause increased credit costs;managed; and · Current economic growth forecasts for Florida and the Company’s markets are supported by population increases.supportive. Contingent Liabilities – Critical Accounting Policies and Estimates   The Company is subject to contingent liabilities, including judicial, regulatory and arbitration proceedings, and tax and other claims arising from the conduct of our business activities. These proceedings include actions brought against the Company and/or our subsidiaries with respect to transactions in which the Company and/or our subsidiaries acted as a lender, a financial advisor, a broker or acted in a related activity. Accruals are established for legal and other claims when it becomes probable that the Company will incur an expense and the amount can be reasonably estimated. Company management, together with attorneys, consultants and other professionals, assesses the probability and estimated amounts involved in a contingency. Throughout the life of a contingency, the Company or our advisors may learn of additional information that can affect our assessments about probability or about the estimates of amounts involved. Changes in these assessments can lead to changes in recorded reserves. In addition, the actual costs of resolving these claims may be substantially higher or lower than the amounts reserved for the claims. At December 31, 20152016 and 2014,2015, the Company had no significant accruals for contingent liabilities and had no known pending matters that could potentially be significant.   Interest Rate Sensitivity Fluctuations in interest rates may result in changes in the fair value of the Company’s financial instruments, cash flows and net interest income. This risk is managed using simulation modeling to calculate the most likely interest rate risk utilizing estimated loan and deposit growth. The objective is to optimize the Company’s financial position, liquidity, and net interest income while limiting their volatility.   Senior management regularly reviews the overall interest rate risk position and evaluates strategies to manage the risk. The Company’s fourth quarter 20152016 Asset and Liability Management Committee (“ALCO”) model simulation indicates net interest income would increase 10.9%1.7% if interest rates increased 200 basis points up over the next 12 months and 5.4%0.9% if interest rates increased 100 basis points. This compares with the Company’s fourth quarter 20142015 model simulation, which indicated net interest income would increase 9.1%10.9% if interest rates were increased 200 basis points up over the next 12 months and 4.9%5.4% if interest rates were increased 100 basis points. Recent regulatory guidance has placed more emphasis on rate shocks.   The Company had a positive gap position based on contractual and prepayment assumptions for the next 12 months, with a positive cumulative interest rate sensitivity gap as a percentage of total earning assets of 17.2%4.8% at December 31, 2015.2016. This result includes assumptions for core deposit re-pricing validated for the Company by an independent third party consulting group.   The computations of interest rate risk do not necessarily include certain actions management may undertake to manage this risk in response to changes in interest rates. Derivative financial instruments, such as interest rate swaps, options, caps, floors, futures and forward contracts may be utilized as components of the Company’s risk management profile.   Market Risk   Market risk refers to potential losses arising from changes in interest rates, and other relevant market rates or prices.   Interest rate risk, defined as the exposure of net interest income and Economic Value of Equity, or “EVE,” to adverse movements in interest rates, is the Company’s primary market risk, and mainly arises from the structure of the balance sheet (non-trading activities). The Company is also exposed to market risk in its investing activities. The Company’s Asset/Liability Committee, or “ALCO,” meets regularly and is responsible for reviewing the interest rate sensitivity position of the Company and establishing policies to monitor and limit exposure to interest rate risk. The policies established by the ALCO are reviewed and approved by the Company’s Board of Directors. The primary goal of interest rate risk management is to control exposure to interest rate risk, within policy limits approved by the Board. These limits reflect the Company’s tolerance for interest rate risk over short-term and long-term horizons. The Company also performs valuation analyses, which are used for evaluating levels of risk present in the balance sheet that might not be taken into account in the net interest income simulation analyses. Whereas net interest income simulation highlights exposures over a relatively short time horizon, valuation analysis incorporates all cash flows over the estimated remaining life of all balance sheet positions. The valuation of the balance sheet, at a point in time, is defined as the discounted present value of asset cash flows minus the discounted value of liability cash flows, the net result of which is the EVE. The sensitivity of EVE to changes in the level of interest rates is a measure of the longer-term re-pricing risks and options risks embedded in the balance sheet. In contrast to the net interest income simulation, which assumes interest rates will change over a period of time, EVE uses instantaneous changes in rates.   EVE values only the current balance sheet, and does not incorporate the growth assumptions that are used in the net interest income simulation model. As with the net interest income simulation model, assumptions about the timing and variability of balance sheet cash flows are critical in the EVE analysis. Particularly important are the assumptions driving prepayments and the expected changes in balances and pricing of the indeterminate life deposit portfolios. Core deposits are a more significant funding source for the Company, making the lives attached to core deposits more important to the accuracy of our modeling of EVE. The Company periodically reassesses its assumptions regarding the indeterminate lives of core deposits utilizing an independent third party resource to assist. With lower interest rates over a prolonged period, the average lives of core deposits have trended higher and favorably impacted our model estimates of EVE for higher rates. Based on our fourth quarter 20152016 modeling, an instantaneous 100 basis point increase in rates is estimated to increase the EVE 12.1%18.6% versus the EVE in a stable rate environment, while a 200 basis point increase in rates is estimated to increase the EVE 21.5%31.2%.   While an instantaneous and severe shift in interest rates is used in this analysis to provide an estimate of exposure under an extremely adverse scenario, a gradual shift in interest rates would have a much more modest impact. Since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon, i.e., the next fiscal year. Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, change in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.   Effects of Inflation and Changing Prices   The condensed consolidated financial statements and related financial data presented herein have been prepared in accordance with U.S. GAAP, which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money, over time, due to inflation.   Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the general level of inflation. However, inflation affects financial institutions by increasing their cost of goods and services purchased, as well as the cost of salaries and benefits, occupancy expense, and similar items. Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings, and shareholders’ equity. Mortgage originations and re-financings tend to slow as interest rates increase, and higher interest rates likely will reduce the Company’s earnings from such activities and the income from the sale of residential mortgage loans in the secondary market. Fourth Quarter Review   Earnings highlights for the fourth quarter 2015:2016:   · Fourth quarter 2016 net income totaled $10.8 million, an increase of $4.7 million or 78% from the same period of 2015, and rose $1.6 million or 18% compared with third quarter 2016 levels. Adjusted net income (1) increased 56% to $6.5$4.8 million or $0.19 per average diluted share, compared to $4.273% from fourth quarter 2015 levels and $0.7 million or $0.137% above third quarter 2016. Diluted earnings per common share (“EPS’) were $0.28 and adjusted diluted shareEPS (1) were $0.30 in the fourth quarter 2014;of 2016, compared to diluted EPS of $0.18 and adjusted diluted EPS (1) of $0.19 in the fourth quarter of 2015; · Fourth quarter revenues increased $10.0 million or 27% from fourth quarter 2015 levels Net interest income improved $4.4$8.3 million or 18%29% compared to fourth quarter 2014,2015, due to organic loan growth;growth and the acquisitions settled earlier in 2016; · Net interest margin increaseddecreased 11 basis points year-over-year to 3.67%3.56%; · Adjusted return on average tangible common equity improved to 8.4% from 6.2% year-over-year.   Fourth quarter 2015 growth highlights:   · Loans increased $57$723 million or 3% not annualized compared to34% from fourth quarter a year ago. Adjusting for acquisitions, loan growth was $383 million or 18%. Loans increased $110 million sequentially from third quarter 2015 and rose 18% year-over-year. Excluding acquisitions, loans increased $218 million or 12% above year-ago levels;2016, recording a 16% annualized growth rate; · Excluding acquisitions, households grew 5% year-over-year;Total deposits per branch increased to $75 million as of December 31, 2016, compared to $66 million at the end of 2015. Explanation of Certain Unaudited Non-GAAP Financial Measures   The tables below provide reconciliation between Generally Accepted Accounting Principles (“GAAP”) net income and adjusted net income (1).income. Management uses these non-GAAP financial amounts in its analysis of the Company’s performance and believes the presentation provides a clearer understanding of the Company’s performance. The Company believes the presentation of adjusted net income (1) enhances investor understanding of the performance trend and facilitates comparisons with the performance of other financial institutions. The limitations associated with adjusted net income (1) are the risk that persons might disagree as to the appropriateness of items comprising the measure and that different companies might calculate the measure differently. The Company provides reconciliations between GAAP and non-GAAP measures, and these measures should not be considered an alternative to GAAP. For 20152016 and 2014,2015, by quarter and for total year, net income and adjusted net income (1) were as follows:     2015 Quarters             Fourth     Third     Second     First     Total   (Dollars in thousands except per share data)   2015     2015     2015     2015     Year                                   Net income (loss), as reported:                                         Net income (loss)   $ 6,036     $ 4,441     $ 5,805     $ 5,859     $ 22,141   Diluted earnings per share   $ 0.18     $ 0.13     $ 0.18     $ 0.18     $ 0.66                                             Adjusted net income (1):                                         Net income (loss)   $ 6,036     $ 4,441     $ 5,805     $ 5,859     $ 22,141   Severance     187       98       29       12       326   Merger related charges     1,043       2,692       337       275       4,347   Bargain purchase gain     (416 )     0       0       0       (416 ) Security (gains)     (1 )     (160 )     0       0       (161 ) Miscellaneous losses     0       112       0       0       112   Other     0       121       0       0       121   Net loss on OREO and repossessed assets     (157 )     262       53       81       239   Asset dispositions expense     79       77       173       143       472   Effective tax rate on adjustments     (299 )     (1,210 )     (225 )     (193 )     (1,927 ) Adjusted net income (1)   $ 6,472     $ 6,433     $ 6,172     $ 6,177     $ 25,254   Adjusted diluted earnings per share (1)   $ 0.19     $ 0.19     $ 0.19     $ 0.19     $ 0.75       Quarters             Fourth     Third     Second     First     Total   (Dollars in thousands except per share data)   2016     2016     2016     2016     Year                                   Net income, as reported:                                         Net income   $ 10,771     $ 9,133   �� $ 5,332     $ 3,966     $ 29,202   Diluted earnings per share   $ 0.28     $ 0.24     $ 0.14     $ 0.11     $ 0.78                                             Adjusted net income:                                         Net income   $ 10,771     $ 9,133     $ 5,332     $ 3,966     $ 29,202                                             BOLI income (benefits upon death)     0       0       0       (464 )     (464 ) Securities gains     (7 )     (225 )     (47 )     (89 )     (368 ) Total adjustments to revene     (7 )     (225 )     (47 )     (553 )     (832 )                                           Severance     165       287       464       306       1,222   Merger related charges     559       1,628       2,448       4,038       8,673   Branch closure charges and costs related to expense initiatives     0       678       1,121       691       2,490   Early redemption cost for FHLB advances     0       0       1,777       0       1,777   Total adjustments to noninterest expense     724       2,593       5,810       5,035       14,162                                             Effective tax rate on adjustments     (151 )     (913 )     (2,322 )     (1,690 )     (5,076 ) Adjusted net income   $ 11,337     $ 10,588     $ 8,773     $ 6,758     $ 37,456   Adjusted diluted earnings per share   $ 0.30     $ 0.28     $ 0.23     $ 0.19     $ 1.00         2014 Quarters             Fourth     Third     Second     First     Total   (Dollars in thousands except per share data)   2014     2014     2014     2014     Year                                   Net income (loss), as reported:                                         Net income (loss)   $ (1,517 )   $ 2,996     $ 1,918     $ 2,299     $ 5,696   Diluted earnings per share   $ (0.05 )   $ 0.12     $ 0.07     $ 0.09     $ 0.21                                             Adjusted net income (1):                                         Net income (loss)   $ (1,517 )   $ 2,996     $ 1,918     $ 2,299     $ 5,696   Severance     478       328       181       212       1,199   Merger related charges     2,722       399       1,234       6       4,361   Branch closure charges and costs related to expense initiatives     4,261       0       0       0       4,261   Marketing and brand refresh expenses     697       0       0       0       697   Stock compensation expense and other incentive costs related to improved outlook     1,213       0       0       0       1,213   Security (gains)     (108 )     (344 )     0       (17 )     (469 ) Miscellaneous losses (gains)     119       (45 )     144       0       218   Other     0       (124 )     114       0       (10 ) Net loss on OREO and repossessed assets     9       156       92       53       310   Asset dispositions expense     103       139       118       128       488   Effective tax rate on adjustments     (3,798 )     (219 )     (811 )     (148 )     (4,976 ) Adjusted net income (1)   $ 4,179     $ 3,286     $ 2,990     $ 2,533     $ 12,988   Adjusted diluted earnings per share (1)   $ 0.13     $ 0.13     $ 0.12     $ 0.10     $ 0.47       Quarters             Fourth     Third     Second     First     Total   (Dollars in thousands except per share data)   2015     2015     2015     2015     Year                                   Net income, as reported:                                         Net income   $ 6,036     $ 4,441     $ 5,805     $ 5,859     $ 22,141   Diluted earnings per share   $ 0.18     $ 0.13     $ 0.18     $ 0.18     $ 0.66                                             Adjusted net income:                                         Net income   $ 6,036     $ 4,441     $ 5,805     $ 5,859     $ 22,141                                             Securities gains     (1 )     (160 )     0       0       (161 ) Bargain purchase gain     (416 )     0       0       0       (416 ) Total adjustments to revene     (417 )     (160 )     0       0       (577 )                   ��                       Severance     187       670       29       12       898   Merger related charges     1,043       2,120       337       275       3,775   Other     0       121       0       0       121   Miscellaneous losses     48       112       0       0       160   Total adjustments to noninterest expense     1,278       3,023       366       287       4,954                                             Effective tax rate on adjustments     (328 )     (1,072 )     (140 )     (111 )     (1,651 ) Adjusted net income   $ 6,569     $ 6,232     $ 6,031     $ 6,035     $ 24,867   Adjusted diluted earnings per share   $ 0.19     $ 0.18     $ 0.18     $ 0.18     $ 0.74     (1) Non-GAAP measures Fourth quarter net income included a $416,000 bargain purchase gain from the purchase of Grand, arising from unanticipated recoveries and resulting valuation adjustments to loans and OREO realized in the fourth quarter. Net interest income (on a tax-equivalent basis, a non-GAAP measure) for the fourth quarter 20152016 totaled $29.1$37.6 million, a $4.4an $8.4 million or 18%29% increase from the fourth quarter a year ago and $0.1 million higherlower than third quarter 2015’s2016’s result. Net interest margin expanded(on a tax-equivalent basis) declined to 3.67%3.56%, an eleven basis point increasedecrease from prior year, but eightand thirteen basis points lower than third quarter 2015.2016. Year-over-year net interest income growth was amplified by the acquisitions of Floridian and margin increasesBMO. Margin decreases reflect improvement indecreased loan yields, reflecting the current low interest rate andenvironment, partially offset by improved balance sheet mix, largely due to growth in customer relationships.mix. Linked quarter results reflect an accelerated levellevels of purchase loan accretion in the third quarter of 20152016 that contributed approximately ten basis points ofto the higher margin during that quarter. Loan growth during the fourth quarter 2015 and improved core yields more than compensated for a decrease in purchased loan accretion linked quarter.   Noninterest income (excluding securities gains net and bargain purchase gain, net)gain) totaled $7.8$9.9 million for the fourth quarter of 2015,2016, an increase of $0.6$2.2 million or 9%27% from fourth quarter 2014.2015 and compared to $9.8 million in the third quarter 2016. Most categories of service fee income showed year-over-year growth with service charges on deposit and interchange income each up 24%17%, indicating continued growth in customer acquisitioncustomers and cross sell, and benefits from our acquisition activity, including the Grand acquisitionFloridian and BMO acquisitions in the third quarterfirst and second quarters of 2015. In comparison, noninterest2016. BOLI income totaled $8.1 million for the third quarter 2015 (when strong revenues from mortgage banking hit their highswas 54% higher, with additional purchases of BOLI occurring during 2015), and $7.1 million for the fourth quarter 2014. During thequarter. Mortgage banking revenue was particularly strong, up 69% year over year for fourth quarter, 2014, noninterest income (excluding securityand included gains net) increased $1.0 million from third quarter 2014 and $1.1of $0.5 million from the fourth quarter 2013. The increases included a full quarter effectsale of fees generated from the acquisition of BANKshares, including bank owned life insurance (BOLI) investments that were transferred to Seacoast as a result of the acquisition, and were added to policies directly acquired by the Company during the fourth quarter of 2014.seasoned residential portfolio loans.   Noninterest expenses for the fourth quarter 20152016 totaled $30.3 million, up 12% from prior year and 9% lower than third quarter 2016. Of the $3.1 million increase year-over-year for fourth quarter 2016, salaries, wages and employee benefits increased $1.6 million, outsourced data processing grew $0.6 million, and occupancy and furniture and equipment costs (aggregated) were $0.7 million higher. The acquisitions of Floridian and BMO were the primary cause and incremental, although for 2016 the Company added only four more branch offices, compared to year-end 2015. Fourth quarter 2016 expense also reflected remaining merger related charges of $1.0$0.6 million from our acquisition of Grand in the third quarter 2015acquisitions and severance of $0.2 million. The most significant factor impacting the fourth quarter 2014’s net income2015’s noninterest expense was much higher noninterest expenses. Noninterest expenses increased by $14.1 million versus third quarter 2014’s result, and were $15.4 million higher when compared to the fourth quarter of 2013. Impacting the fourth quarter of 2014, our acquisition of BANKshares (with 12 full-service offices) expanded our presence in central Florida, particularly in the greater Orlando market. Mergeralso merger related charges, intotaling $1.0 million from the fourth quarter of 2014 totaled approximately $2.7 millionGrand acquisition and were primarily related to core system conversion costs, software and other contract termination charges, and investment banking fees. Also, accrual of long term stock compensation expense related to an improved outlook and other incentive costs related to better than expected production added an incremental $1.2 million to expenses in the fourth quarter of 2014. One-time charges that were incurred in the fourth quarter of 2014 for approximately $4.3 million were related to previously announced branch closings. Severance totaled $0.5$0.2 million for the fourth quarter 2014. In addition, during the fourth quarter 2014, we invested approximately $0.7 million in marketing and other expenditures to refresh and reintroduce our brand, including retooling our logo and associated signage throughout our branch network and digital platforms. All costs for this logo change and additional branding were incurred in the fourth quarter of 2014. All of the above added a total of $9.4 to fourth quarter 2014’s noninterest expense which was one-time in nature.severance.   A provision for loan losses of $0.4$1.0 million and $0.1$0.4 million was recorded in the fourth quarter of 20152016 and 2014,2015, respectively. Our fourth quarter 20152016 provisioning reflects continued strong credit metrics, offset by continued loan growth. For the fourth quarter of 2015,2016, net charge-offs totaled $0.3 million, compared to $0.6 million the same asfor fourth quarter 2014.2015. The allowance for loan losses to portfolio loans outstanding ratio at December 31, 20152016 was 1.03 percent0.96%, compared to 1.14 percent1.03% a year earlier, and the coverage ratio (the allowance for loan losses to nonaccrual loans) was 110.0 percent125.1% at December 31, 2016 compared to 110.0% at December 31, 2015, compared to 80.8 percent at December 31, 2014, reflecting the improvement in credit quality. Internal Controls   The Company's management, includingwith the participation of its Chief Executive Officer and Chief Financial Officer, with the assistance of outside consultants, has conducted an assessment ofevaluated the effectiveness of the Company's disclosure controls and procedures (as defined in rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of December 31, 2016 and concluded that those disclosure controls and procedures are effective. There have been no changes to the Company’s internal control over financial reporting asthat occurred since the beginning of December 31, 2014 based on2016 that have materially affected, or are reasonably likely to materially affect, the criteria established inInternal Control - Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management has concluded as of December 31, 2015, the Company'sCompany’s internal control over financial reporting was effective.reporting.   The board of directors, the audit committee of the board and senior management ofWhile the Company consider it essentialbelieves that its existing disclosure controls and procedures have been effective to assureaccomplish these objectives, the Company achieves effectiveintends to examine, refine and comprehensive internalformalize its disclosure controls over every aspect of financial reporting.and procedures and to monitor ongoing developments in this area. Table 1 - Condensed Income Statement*     2015     2014     2013     2016     2015     2014     (Tax equivalent basis)     (Tax equivalent basis)   Net interest income     3.33 %     3.03 %     2.99 %     3.34 %     3.33 %     3.03 % Provision (recapture) for loan losses     0.08       (0.14 )     0.15       0.06       0.08       (0.14 ) Noninterest income                                                 Securities gains, net     0.00       0.02       0.02       0.01       0.00       0.02   Bargain purchase gains, net     0.01       0.00       0.00       0.00       0.01       0.00   Other     0.97       1.00       1.11       0.89       0.97       1.00   Noninterest expense     3.14       3.76       3.43       3.11       3.14       3.76   Income before income taxes     1.09       0.43       0.54       1.07       1.09       0.43   Provision (benefit) for income taxes including tax equivalent adjustment     0.42       0.20       (1.84 ) Provision for income taxes including tax equivalent adjustment     0.38       0.42       0.20   Net income     0.67 %     0.23 %     2.38 %     0.69 %     0.67 %     0.23 %     * As a Percent of Average Assets   Table 2 – Three Year Summary   Average Balances, Interest Income and Expenses, Yields and Rates (1)     2015     2014     2013     2016     2015     2014     Average           Yield/   Average           Yield/   Average           Yield/     Average           Yield/   Average           Yield/   Average           Yield/     Balance     Interest     Rate     Balance     Interest     Rate     Balance     Interest     Rate     Balance     Interest     Rate     Balance     Interest     Rate     Balance     Interest     Rate     (Dollars in thousands)     (Dollars in thousands)   EARNING ASSETS                                                                                                                                                 Securities                                                                                                                                                 Taxable   $ 946,986     $ 20,341       2.15 %   $ 732,324     $ 15,448       2.11 %   $ 651,368     $ 12,856       1.97 %   $ 1,174,627     $ 26,133       2.22 %   $ 946,986     $ 20,341       2.15 %   $ 732,324     $ 15,448       2.11 % Nontaxable     15,208       895       5.89       4,644       323       6.96       1,608       105       6.53       25,841       1,592       6.16       15,208       895       5.89       4,644       323       6.96       962,194       21,236       2.21       736,968       15,771       2.14       652,976       12,961       1.98       1,200,468       27,725       2.31       962,194       21,236       2.21       736,968       15,771       2.14   Federal funds sold and other investments     76,851       1,022       1.33       125,550       1,017       0.81       152,816       868       0.57       75,442       1,669       2.21       76,851       1,022       1.33       125,550       1,017       0.81   Loans, net (2)     1,984,545       94,640       4.77       1,452,751       63,788       4.39       1,272,447       57,163       4.49       2,584,389       119,587       4.63       1,984,545       94,640       4.77       1,452,751       63,788       4.39   TOTAL EARNING ASSETS     3,023,590       116,898       3.87       2,315,269       80,576       3.48       2,078,239       70,992       3.42       3,860,299       148,981       3.86       3,023,590       116,898       3.87       2,315,269       80,576       3.48                                                                                                                                                   Allowance for loan losses     (18,725 )                     (19,164 )                     (21,133 )                     (21,131 )                     (18,725 )                     (19,164 )                 Cash and due from banks     73,001                       51,581                       36,423                       88,919                       73,001                       51,581                   Bank premises and equipment     51,396                       37,970                       34,806                   Bank premises and equipment, net     60,470                       51,396                       37,970                   Bank owned life insurance     39,343                       6,154                       0                       45,009                       39,343                       6,154                   Goodwill     25,320                       6,643                       0                       53,792                       25,320                       6,643                   Other intangible assets     7,956                       2,197                       1,104                   Other intangible assets, net     12,819                       7,956                       2,197                   Other assets     102,516                       84,609                       57,318                       101,645                       102,516                       84,609                     $ 3,304,397                     $ 2,485,259                     $ 2,186,757                     $ 4,201,822                     $ 3,304,397                     $ 2,485,259                                                                                                                                                                   INTEREST BEARING LIABILITIES                                                                                                                                                                                                                                                                                                 Interest bearing demand   $ 632,304       472       0.07 %   $ 520,288       399       0.08 %   $ 466,680       401       0.09 %   $ 764,917       616       0.08 %   $ 632,304       472       0.07 %   $ 520,288       399       0.08 % Savings deposits     281,470       158       0.06       219,793       113       0.05       182,039       101       0.06       325,371       161       0.05       281,470       158       0.06       219,793       113       0.05   Money market     607,768       1,455       0.24       366,490       352       0.10       337,395       280       0.08       791,998       1,816       0.23       607,768       1,455       0.24       366,490       352       0.10   Time deposits     307,329       1,228       0.40       277,349       1,538       0.55       296,402       1,947       0.66       351,646       2,074       0.59       307,329       1,228       0.40       277,349       1,538       0.55   Federal funds purchased and other short term borrowings     182,914       376       0.21       171,965       297       0.17       155,222       286       0.18       187,560       484       0.26       168,188       340       0.20       152,129       260       0.17   Federal Home Loan Bank borrowings     198,268       1,256       0.63       64,726       1,643       2.54       69,836       1,640       2.35   Other borrowings     117,056       3,241       2.77       106,370       2,656       2.50       103,610       2,542       2.45       70,097       2,060       2.94       67,056       1,634       2.44       56,370       1,053       1.87   TOTAL INTEREST BEARING LIABILIITIES     2,128,841       6,930       0.33       1,662,255       5,355       0.32       1,541,348       5,557       0.36   TOTAL INTEREST BEARING LIABILITIES     2,689,857       8,467       0.31       2,128,841       6,930       0.33       1,662,255       5,355       0.32   Noninterest demand     819,801                       556,000                       451,776                       1,066,463                       819,801                       556,000                   Other liabilities     18,388                       10,137                       10,329                       31,628                       18,388                       10,137                       2,967,030                       2,228,392                       2,003,453                       3,787,948                       2,967,030                       2,228,392                   Shareholders' equity     337,367                       256,867                       183,304                       413,874                       337,367                       256,867                     $ 3,304,397                     $ 2,485,259                     $ 2,186,757                     $ 4,201,822                     $ 3,304,397                     $ 2,485,259                   Interest expense as % of earning assets                     0.23 %                     0.23 %                     0.27 %                     0.22 %                     0.23 %                     0.23 % Net interest income/yield on earning assets           $ 109,968       3.64 %           $ 75,221       3.25 %           $ 65,435       3.15 %           $ 140,514       3.63 %           $ 109,968       3.64 %           $ 75,221       3.25 %   (1) The tax equivalent adjustment is based on a 35% tax rate. (2) (1) The tax equivalent adjustment is based on a 35% tax rate. (2) Nonperforming loans are included in average loan balances. Fees on loans are included in interest on loans. Table 3 - Rate/Volume Analysis (on a Tax Equivalent Basis)     2015 vs 2014   2014 vs 2013     2016 vs 2015   2015 vs 2014     Due to Change in:     Due to Change in:     Due to Change in:     Due to Change in:     Volume     Rate     Total     Volume     Rate     Total     Volume     Rate     Total     Volume     Rate     Total     (Dollars in thousands)     (Dollars in thousands)     Amount of increase (decrease)     Amount of increase (decrease)   EARNING ASSETS                                                                                                 Securities                                                                                                 Taxable   $ 4,570     $ 323     $ 4,893     $ 1,653     $ 939     $ 2,592     $ 4,977     $ 815     $ 5,792     $ 4,570     $ 323     $ 4,893   Nontaxable     678       (106 )     572       205       14       219       640       57       697       678       (106 )     572       5,248       217       5,465       1,858       953       2,811       5,617       872       6,489       5,248       217       5,465   Federal funds sold and other investments     (522 )     527       5       (190 )     338       148       (26 )     673       647       (522 )     527       5   Loans, net     24,355       6,497       30,852       8,008       (1,383 )     6,625       28,181       (3,234 )     24,947       24,355       6,497       30,852   TOTAL EARNING ASSETS     29,081       7,241       36,322       9,676       (92 )     9,584       33,772       (1,689 )     32,083       29,081       7,241       36,322                                                                                                   INTEREST BEARING LIABILITIES                                                                                                 NOW     85       (12 )     73       44       (47 )     (3 ) Interest bearing demand     103       41       144       85       (12 )     73   Savings deposits     33       12       45       20       (8 )     12       23       (20 )     3       33       12       45   Money market accounts     406       697       1,103       27       45       72       433       (72 )     361       406       697       1,103   Time deposits     143       (453 )     (310 )     (115 )     (294 )     (409 )     219       627       846       143       (453 )     (310 )     667       244       911       (24 )     (304 )     (328 )     778       576       1,354       667       244       911   Federal funds purchased and other short term borrowings     21       58       79       30       (19 )     11       45       99       144       30       50       80   Federal Home Loan Bank borrowings     2,118       (2,505 )     (387 )     (125 )     128       3   Other borrowings     281       304       585       68       46       114       82       344       426       230       351       581   TOTAL INTEREST BEARING LIABILITIES     969       606       1,575       74       (277 )     (203 )     3,023       (1,486 )     1,537       802       773       1,575   NET INTEREST INCOME   $ 28,112     $ 6,635     $ 34,747     $ 9,602     $ 185     $ 9,787     $ 30,749     $ (203 )   $ 30,546     $ 28,279     $ 6,468     $ 34,747       (1) Changes attributable to rate/volume are allocated to rate and volume on an equal basis. 92  Table 4 – Noninterest Income     Year Ended     % Change     Year Ended     % Change     2015     2014     2013     15/14     14/13     2016     2015     2014     16/15     15/14     (Dollars in thousands)               (Dollars in thousands)             Service charges on deposit accounts   $ 8,563     $ 6,952     $ 6,711       23.2 %     3.6 %   $ 9,669     $ 8,563     $ 6,952       12.9 %     23.2 % Trust fees     3,132       2,986       2,711       4.9       10.1       3,433       3,132       2,986       9.6       4.9   Mortgage banking fees     4,252       3,057       4,173       39.1       (26.7 )     5,864       4,252       3,057       37.9       39.1   Brokerage commissions and fees     2,132       1,614       1,631       32.1       (1.0 )     2,044       2,132       1,614       (4.1 )     32.1   Marine finance fees     1,152       1,320       1,189       (12.7 )     11.0       673       1,152       1,320       (41.6 )     (12.7 ) Interchange income     7,684       5,972       5,404       28.7       10.5       9,227       7,684       5,972       20.1       28.7   Other deposit based EFT fees     397       343       342       15.7       0.3       477       397       343       20.2       15.7   BOLI Income     1,426       252       0       465.9       n/m       2,213       1,426       252       55.2       465.9   Gain on participated loan     725       0       0       n/m       n/m       0       725       0       (100.0 )      n/m   Other     2,555       2,248       2,158       13.7       4.2       3,827       2,555       2,248       49.8       13.7       32,018       24,744       24,319       29.4       1.7       37,427       32,018       24,744       16.9       29.4   Securities gains, net     161       469       419       (65.7 )     11.9       368       161       469       128.6       (65.7 ) Bargain purchase gain, net     416       0       0       n/m       n/m       0       416       0       (100.0 )     n/m   TOTAL   $ 32,595     $ 25,213     $ 24,738       29.3       1.9     $ 37,795     $ 32,595     $ 25,213       16.0       29.3     n/m = not meaningful Table 5 - Noninterest Expense     Year Ended     % Change     Year Ended     % Change     2015     2014     2013     15/14     14/13     2016     2015     2014     16/15     15/14     (Dollars in thousands)               (Dollars in thousands)             Salaries and wages   $ 41,075     $ 35,132     $ 31,006       16.9 %     13.3 %   $ 54,096     $ 41,075     $ 35,132       31.7 %     16.9 % Employee benefits     9,564       8,773       7,327       9.0       19.7       9,903       9,564       8,773       3.5       9.0   Outsourced data processing costs     10,150       8,781       6,372       15.6       37.8       13,516       10,150       8,781       33.2       15.6   Telephone / data lines     1,797       1,331       1,253       35.0       6.2       2,108       1,797       1,331       17.3       35.0   Occupancy     8,744       7,930       7,178       10.3       10.5       13,122       8,744       7,930       50.1       10.3   Furniture and equipment     3,434       2,535       2,334       35.5       8.6       4,720       3,434       2,535       37.4       35.5   Marketing     4,428       3,576       2,339       23.8       52.9       3,633       4,428       3,576       (18.0 )     23.8   Legal and professional fees     8,022       6,871       2,458       16.8       179.5       9,596       8,022       6,871       19.6       16.8   FDIC assessments     2,212       1,660       2,601       33.3       (36.2 )     2,365       2,212       1,660       6.9       33.3   Amortization of intangibles     1,424       1,033       783       37.9       31.9       2,486       1,424       1,033       74.6       37.9   Asset dispositions expense     472       488       740       (3.3 )     (34.1 )     553       472       488       17.2       (3.3 ) Branch closures and new branding     0       4,958       0       (100.0 )      n/m       0       0       4,958       0.0       (100.0 ) Net loss on other real estate owned and repossessed assets     239       310       1,289       (22.9 )     (76.0 ) Net (gain)/loss on other real estate owned and repossessed assets     (509 )     239       310       (313.0 )     (22.9 ) Early redemption cost for Federal Home Loan Bank advances     1,777       0       0        n/m       0.0   Other     12,209       9,988       9,472       22.2       5.4       13,515       12,209       9,988       10.7       22.2   TOTAL   $ 103,770     $ 93,366     $ 75,152       11.1       24.2     $ 130,881     $ 103,770     $ 93,366       26.1       11.1     * n/m = not meaningful Table 6 - Capital Resources     December 31     December 31 ��   2015     2014     2013     2016     2015     2014     (Dollars in thousands)           (Dollars in thousands)         TIER 1 CAPITAL                                                 Common stock   $ 3,435     $ 3,300     $ 2,364     $ 3,802     $ 3,435     $ 3,300   Additional paid in capital     399,162       379,249       277,290       454,001       399,162       379,249   Accumulated (deficit)     (42,858 )     (65,000 )     (70,695 )     (13,657 )     (42,858 )     (65,000 ) Treasury stock     (73 )     (71 )     (11 )     (1,236 )     (73 )     (71 ) Goodwill     (25,211 )     (25,309 )     0       (64,649 )     (25,211 )     (25,309 ) Intangibles     (2,057 )     (4,478 )     (718 )     (6,371 )     (2,057 )     (4,478 ) Other     (15,394 )     n/a       n/a       (20,121 )     (15,394 )      n/a   COMMON EQUITY TIER 1 CAPITAL     317,004       n/a       n/a       351,769       317,004        n/a   Qualifying trust preferred securities     69,961       62,539       52,000       70,241       69,961       62,539   Other     (23,092 )     (44,565 )     (49,797 )     (13,414 )     (23,092 )     (44,565 ) TOTAL TIER 1 CAPITAL     363,873       305,665       210,433       408,596       363,873       305,665   TIER 2 CAPITAL                                                 Allowance for loan losses, as limited (1)     19,166       17,100       16,877       23,462       19,166       17,100   TOTAL TIER 2 CAPITAL     19,166       17,100       16,877       23,462       19,166       17,100   TOTAL RISK-BASED CAPITAL   $ 383,039     $ 322,765     $ 227,310     $ 432,058     $ 383,039     $ 322,765   Risk weighted assets   $ 2,392,668     $ 1,986,291     $ 1,346,957     $ 3,259,871     $ 2,392,668     $ 1,986,291                                                   Common equity Tier 1 ratio (CET1)     13.25 %     n/a %     n/a %     10.79 %     13.25 %     n/a % Regulatory minimum     6.50       n/a       n/a   Regulatory minimum (2)     4.50       4.50       n/a   Tier 1 capital ratio     15.21       15.39       15.62       12.53       15.21       15.39   Regulatory minimum (2)     6.00       6.00       n/a   Total capital ratio     16.01       16.25       16.88       13.25       16.01       16.25   Regulatory minimum     8.00       8.00       8.00   Regulatory minimum (2)     8.00       8.00       8.00   Tier 1 capital to adjusted total assets     10.70       10.32       9.59       9.15       10.70       10.32   Regulatory minimum     5.00       4.00       4.00       4.00       4.00       4.00   Shareholders' equity to assets     10.00       10.11       8.75       9.30       10.00       10.11   Average shareholders' equity to average total assets     10.21       10.34       8.38       9.85       10.21       10.34   Tangible shareholders' equity to tangible assets     9.13       9.14       8.72       7.74       9.13       9.14     (1) Includes reserve for unfunded commitments of $62,000 at December 31, 2016, $38,000 at December 31, 2015 and $29,000 at December 31, 20142014. (2) Excludes new capital conservation buffer of 0.625% the Company is subject to, which if not exceeded may constrain dividends, equity repurchases and 2013.compensation. n/a = not applicable Table 7 - Loans Outstanding     December 31     December 31     2015     2014     2013     2012     2011     2016     2015     2014     2013     2012     (In thousands)     (In thousands)   Construction and land development                                                                                 Residential   $ 31,650     $ 16,155     $ 10,566     $ 9,902     $ 11,255     $ 29,693     $ 31,650     $ 16,155     $ 10,566     $ 9,902   Commercial     31,977       37,194       22,733       11,907       11,338       57,856       31,977       37,194       22,733       11,907       63,627       53,349       33,299       21,809       22,593       87,549       63,627       53,349       33,299       21,809   Individuals     45,160       33,687       34,151       38,927       26,591       72,567       45,160       33,687       34,151       38,927       108,787       87,036       67,450       60,736       49,184       160,116       108,787       87,036       67,450       60,736                                                                                   Commercial real estate(1)     1,009,378       837,147       520,382       486,828       508,353       1,357,592       1,009,378       837,147       520,382       486,828                                                                                   Real estate mortgage                                                                                 Residential real estate                                                                                 Adjustable     429,826       441,238       391,885       361,005       334,140       418,276       429,826       441,238       391,885       361,005   Fixed rate     110,391       93,865       91,108       98,976       96,952       210,365       110,391       93,865       91,108       98,976   Home equity mortgages     69,339       71,838       62,043       57,955       60,253       44,484       69,339       71,838       62,043       57,955   Home equity lines     114,229       79,956       47,710       51,395       54,901       163,662       114,229       79,956       47,710       51,395       723,785       686,897       592,746       569,331       546,246       836,787       723,785       686,897       592,746       569,331                                                                                   Commercial and financial     228,517       157,396       78,636       61,903       53,105       370,589       228,517       157,396       78,636       61,903                                                                                   Installment loans to individuals                                                                                 Automobiles and trucks     14,965       7,817       6,607       7,761       8,736       19,234       14,965       7,817       6,607       7,761   Marine loans     46,534       26,236       20,208       18,446       19,932       78,993       46,534       26,236       20,208       18,446   Other     23,857       18,844       17,898       20,723       21,943       55,718       23,857       18,844       17,898       20,723       85,356       52,897       44,713       46,930       50,611       153,945       85,356       52,897       44,713       46,930                                                                                   Other loans     507       512       280       353       575       507       507       512       280       353                                                                                   TOTAL   $ 2,156,330     $ 1,821,885     $ 1,304,207     $ 1,226,081     $ 1,208,074     $ 2,879,536     $ 2,156,330     $ 1,821,885     $ 1,304,207     $ 1,226,081   (1) Commercial real estate includes owner-occupied balances of $623.8 million, $453.3 million, $362.3 million, $194.0 million and $188.9 million, respectively, for each of the years, beginning with 2016. Table 8 - Loan Maturity Distribution     December 31, 2015     December 31, 2016     Commercial and Financial     Construction and Land Development     Total     Commercial and Financial     Construction and Land Development     Total     (In thousands)           (In thousands)         In one year or less   $ 106,452     $ 47,293     $ 153,745     $ 149,942     $ 62,629     $ 212,571   After one year but within five years:                                                 Interest rates are floating or adjustable     17,610       15,605       33,215       44,999       17,177       62,176   Interest rates are fixed     62,666       16,026       78,692       97,614       23,164       120,778   In five years or more:                                                 Interest rates are floating or adjustable     2,022       17,266       19,288       7,360       26,463       33,823   Interest rates are fixed     39,767       12,597       52,364       70,674       30,683       101,357   TOTAL   $ 228,517     $ 108,787     $ 337,304     $ 370,589     $ 160,116     $ 530,705   Table 9 - Maturity of Certificates of Deposit of $100,000 or More     December 31   Maturity of Certificates of Deposit of $100,000 through $250,000   December 31           % of           % of           % of           % of     2015     Total     2014     Total     2016     Total     2015     Total     (Dollars in thousands)     (Dollars in thousands)   Maturity Group:                                                                 Under 3 Months   $ 37,616       26.8 %   $ 31,244       20.9 %   $ 20,304       16.4 %   $ 26,301       25.9 % 3 to 6 Months     25,566       18.2       31,918       21.3       15,919       12.9       18,962       18.6   6 to 12 Months     31,807       22.7       38,840       25.9       31,608       25.6       27,015       26.5   Over 12 Months     45,305       32.3       47,841       31.9       55,801       45.1       29,481       29.0   TOTAL   $ 140,294       100.0 %   $ 149,843       100.0 %   $ 123,632       100.0 %   $ 101,759       100.0 % Maturity of Certificates of Deposit of more than $250,000   December 31             % of           % of       2016     Total     2015     Total       (Dollars in thousands)   Maturity Group:                                 Under 3 Months   $ 15,832       23.3 %   $ 11,315       29.4 % 3 to 6 Months     14,325       21.1       6,604       17.1   6 to 12 Months     12,294       18.1       4,792       12.4   Over 12 Months     25,450       37.5       15,824       41.1   TOTAL   $ 67,901       100.0 %   $ 38,535       100.0 % Table 10 - Summary of Allowance for Loan Loss Experience     Year Ended December 31     Year Ended December 31     2015     2014     2013     2012     2011     2016     2015     2014     2013     2012               Beginning balance   $ 17,071     $ 20,068     $ 22,104     $ 25,565     $ 37,744     $ 19,128     $ 17,071     $ 20,068     $ 22,104     $ 25,565                                                                                   Provision (recapture) for loan losses     2,644       (3,486 )     3,188       10,796       1,974       2,411       2,644       (3,486 )     3,188       10,796                                                                                   Charge offs:                                                                                 Construction and land development     1,271       640       604       612       4,739       0       1,271       640       604       612   Commercial real estate     482       398       2,714       8,539       3,663       301       482       398       2,714       8,539   Residential real estate     779       1,126       3,153       8,381       7,482       215       779       1,126       3,153       8,381   Commercial and financial     726       398       60       346       0       615       726       398       60       346   Consumer     341       193       253       410       562       244       341       193       253       410   TOTAL CHARGE OFFS     3,599       2,755       6,784       18,288       16,446       1,375       3,599       2,755       6,784       18,288   Recoveries:                                                                                 Construction and land development     404       415       212       341       1,053       226       404       415       212       341   Commercial real estate     700       1,683       547       2,702       354       306       700       1,683       547       2,702   Residential real estate     1,260       902       449       738       513       786       1,260       902       449       738   Commercial and financial     531       170       326       129       301       1,809       531       170       326       129   Consumer     117       74       26       121       72       109       117       74       26       121   TOTAL RECOVERIES     3,012       3,244       1,560       4,031       2,293       3,236       3,012       3,244       1,560       4,031   Net loan charge offs (recoveries)     587       (489 )     5,224       14,257       14,153       (1,861 )     587       (489 )     5,224       14,257   ENDING BALANCE   $ 19,128     $ 17,071     $ 20,068     $ 22,104     $ 25,565     $ 23,400     $ 19,128     $ 17,071     $ 20,068     $ 22,104                                                                                   Loans outstanding at end of year*   $ 2,156,330     $ 1,821,885     $ 1,304,207     $ 1,226,081     $ 1,208,074     $ 2,879,536     $ 2,156,330     $ 1,821,885     $ 1,304,207     $ 1,226,081   Ratio of allowance for loan losses to loans outstanding at end of year     0.89 %     0.94 %     1.54 %     1.80 %     2.12 %     0.81 %     0.89 %     0.94 %     1.54 %     1.80 % Ratio of allowance for loan losses to loans outstanding (excluding purchased loans) at end of period(1)     1.03 %     1.14 %     1.54 %     1.80 %     2.12 %     0.96 %     1.03 %     1.14 %     1.54 %     1.80 % Daily average loans outstanding*   $ 1,984,545     $ 1,452,751     $ 1,272,447     $ 1,227,542     $ 1,216,221     $ 2,584,389     $ 1,984,545     $ 1,452,751     $ 1,272,447     $ 1,227,542   Ratio of net charge offs (recoveries) to average loans outstanding     (0.03 )%     (0.03 )%     0.41 %     1.16 %     1.16 %     (0.29 )%     0.03 %     (0.03 )%     0.41 %     1.16 %     (1) A non-GAAP measure. * Net of unearned income.   Table 11 - Allowance for Loan Losses     December 31,     December 31,   (Dollars in thousands)   2015     2014     2013     2012     2011     2016     2015     2014     2013     2012                                               ALLOCATION BY LOAN TYPE                                                                                 Construction and land development   $ 1,151     $ 765     $ 808     $ 1,134     $ 1,883     $ 1,219     $ 1,151     $ 765     $ 808     $ 1,134   Commercial real estate loans     6,756       4,531       6,160       8,849       11,477       9,273       6,756       4,531       6,160       8,849   Residential real estate loans     8,057       9,802       11,659       11,090       10,966       7,483       8,057       9,802       11,659       11,090   Commercial and financial loans     2,042       1,179       710       468       402       3,636       2,042       1,179       710       468   Consumer loans     1,122       794       731       563       837       1,789       1,122       794       731       563   TOTAL   $ 19,128     $ 17,071     $ 20,068     $ 22,104     $ 25,565     $ 23,400     $ 19,128     $ 17,071     $ 20,068     $ 22,104                                                                                   YEAR END LOAN TYPES AS A PERCENT OF TOTAL LOANS                                                                                 Construction and land development     5.0 %     4.8 %     5.2 %     5.0 %     4.1 %     5.6 %     5.0 %     4.8 %     5.2 %     5.0 % Commercial real estate loans     46.8       46.0       39.9       39.7       42.1       47.1       46.8       46.0       39.9       39.7   Residential real estate loans     33.6       37.7       45.5       46.5       45.2       29.1       33.6       37.7       45.5       46.5   Commercial and financial loans     10.6       8.6       6.0       5.0       4.4       12.9       10.6       8.6       6.0       5.0   Consumer loans     4.0       2.9       3.4       3.8       4.2       5.3       4.0       2.9       3.4       3.8   TOTAL     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %   105    Table 12 - Nonperforming Assets     December 31,     December 31,     2015     2014     2013     2012     2011     2016     2015     2014     2013     2012   Nonaccrual loans (1) (2)   (Dollars in thousands)     (Dollars in thousands)   Construction and land development   $ 309     $ 1,963     $ 1,302     $ 1,342     $ 2,227     $ 470     $ 309     $ 1,963     $ 1,302     $ 1,342   Commercial real estate loans     6,410       4,189       5,111       17,234       13,120       7,341       6,410       4,189       5,111       17,234   Residential real estate loans     10,290       14,797       20,705       22,099       12,555       9,844       10,290       14,797       20,705       22,099   Commercial and financial loans     130       0       13       0       16       246       130       0       13       0   Consumer loans     247       191       541       280       608       170       247       191       541       280   Total     17,386       21,140       27,672       40,955       28,526       18,071       17,386       21,140       27,672       40,955   Other real estate owned                                                                                 Construction and land development     2,617       223       421       2,124       10,879       1,203       2,617       223       421       2,124   Commercial real estate loans     3,959       5,771       5,138       6,305       7,517       3,041       3,959       5,771       5,138       6,305   Residential real estate loans     463       1,468       1,301       3,458       2,550       0       463       1,468       1,301       3,458   Bank branches closed     5,705       0       0       0       0   Total     7,039       7,462       6,860       11,887       20,946       9,949       7,039       7,462       6,860       11,887   TOTAL NONPERFORMING ASSETS   $ 24,425     $ 28,602     $ 34,532     $ 52,842     $ 49,472     $ 28,020     $ 24,425     $ 28,602     $ 34,532     $ 52,842                                                                                   Amount of loans outstanding at end of year (2)   $ 2,156,330     $ 1,821,885     $ 1,304,207     $ 1,226,081     $ 1,208,074     $ 2,879,536     $ 2,156,330     $ 1,821,885     $ 1,304,207     $ 1,226,081   Ratio of total nonperforming assets to loans outstanding and other real estate owned at end of period     1.13 %     1.56 %     2.63 %     4.27 %     4.03 %     0.97 %     1.13 %     1.56 %     2.63 %     4.27 % Accruing loans past due 90 days or more   $ 0     $ 311     $ 160     $ 1     $ 0     $ 0     $ 0     $ 311     $ 160     $ 1   Loans restructured and in compliance with modified terms (3)     19,970       24,997       25,137       41,946       71,611       17,711       19,970       24,997       25,137       41,946     (1) Interest income that could have been recorded during 2016, 2015, 2014, and 20132014 related to nonaccrual loans was$614,000, $728,000, $614,000, and $1,942,000, and $964,000, respectively, none of which was included in interest income or net income.All nonaccrual loans are secured. (2) Net of unearned income. (3) Interest income that would have been recorded based on original contractual terms was $1,001,000, $1,211,000, and $1,496,000, and $1,618,000,respectively, for 2016, 2015 2014 and 2013.2014. The amount included in interest income under the modified terms for 2016, 2015, and 2014 was $792,000, $836,000, and 2013 was$836,000, $1,276,000, and $1,074,000, respectively.   106    Table 13 - Securities Available For Sale     December 31     December 31     Amortized   Fair   Unrealized   Unrealized     Amortized   Fair   Unrealized   Unrealized     Cost     Value     Gains     Losses     Cost     Value     Gains     Losses     (In thousands)     (In thousands)   U.S. Treasury securities and obligations of U.S. Government Sponsored Entities                                                                 2016   $ 12,073     $ 12,328     $ 255     $ 0   2015   $ 3,833     $ 3,911     $ 78     $ 0       3,833       3,911       78       0   2014     3,876       3,899       23       0                                                                   Mortgage-backed securities of U.S. Government Sponsored Entities                                                                 2016     287,726       283,488       585       (4,823 ) 2015     192,224       191,749       847       (1,322 )     192,224       191,749       847       (1,322 ) 2014     123,981       125,059       1,501       (423 )                                                                 Collateralized mortgage obligations of U.S. Government Sponsored Entities                                                                 2016     238,805       234,054       314       (5,065 ) 2015     242,620       238,190       470       (4,900 )     242,620       238,190       470       (4,900 ) 2014     352,483       347,481       1,075       (6,077 )                                 Commercial mortgage-backed securities of U.S. Government Sponsored Entities                                 2016     22,351       22,545       222       (28 ) 2015     0       0       0       0                                                                   Private mortgage-backed securities                                                                 2016     32,780       31,989       0       (791 ) 2015     32,558       31,792       0       (766 )     32,558       31,792       0       (766 ) 2014     29,967       30,258       291       0                                                                   Private collateralized mortgage obligations                                                                 2016     67,542       67,289       563       (816 ) 2015     77,965       77,957       700       (708 )     77,965       77,957       700       (708 ) 2014     85,175       85,135       688       (728 )                                                                 Collateralized loan obligations                                                                 2016     124,716       124,889       838       (665 ) 2015     124,477       122,583       0       (1,894 )     124,477       122,583       0       (1,894 ) 2014     127,397       125,225       0       (2,172 )                                                                 Obligations of state and political subdivisions                                                                 2016     63,161       62,888       622       (895 ) 2015     39,119       39,891       882       (110 )     39,119       39,891       882       (110 ) 2014     23,511       24,318       810       (3 )                                                                 Corporate and other debt securities                                                                 2016     74,121       73,861       257       (517 ) 2015     44,652       44,273       37       (416 )     44,652       44,273       37       (416 ) 2014     0       0       0       0                                                                   Private commercial mortgage backed securities                                                                 2016     37,534       37,172       111       (473 ) 2015     41,127       40,420       13       (720 )     41,127       40,420       13       (720 ) 2014     0       0       0       0                                                                   Total Securities Available For Sale                                                                 2016   $ 960,809     $ 950,503     $ 3,767     $ (14,073 ) 2015   $ 798,575     $ 790,766     $ 3,027     $ (10,836 )   $ 798,575     $ 790,766     $ 3,027     $ (10,836 ) 2014   $ 746,390     $ 741,375     $ 4,388     $ (9,403 )   Table 14 - Securities Held For Investment (1)to Maturity       December 31       Amortized     Fair     Unrealized     Unrealized       Cost     Value     Gains     Losses       (In thousands)                             Mortgage-backed securities of U.S. Government Sponsored Entities                   2015   $ 64,993     $ 65,551     $ 574     $ (16 ) 2014     67,535       68,347       812       0                                     Collateralized mortgage obligations of U.S. Government Sponsored Entities                                 2015     89,265       89,440       581       (406 ) 2014     114,541       114,956       695       (280 )                                   Collateralized loan obligations                                 2015     41,300       39,940       0       (1,360 ) 2014     25,828       25,485       0       (343 )                                   Private collateralized mortgage obligations                                 2015     7,967       7,882       0       (85 ) 2014     0       0       0       0                                     Total Securities Held For Investment                                 2015   $ 203,525     $ 202,813     $ 1,155     $ (1,867 ) 2014   $ 207,904     $ 208,788     $ 1,507     $ (623 ) (1) Management changed its intent to hold certain securities available for sale during the second quarter 2014 and those securities were transferred to securities held for investment to allow more flexibility in managing interest rate risk.     December 31       Amortized     Fair     Unrealized     Unrealized       Cost     Value     Gains     Losses       (In thousands)                             Mortgage-backed securities of U.S. Government Sponsored Entities                                 2016   $ 159,941     $ 159,402     $ 704     $ (1,243 ) 2015     64,993       65,551       574       (16 )                                   Collateralized mortgage obligations of U.S. Government Sponsored Entities                                 2016     147,208       144,964       386       (2,630 ) 2015     89,265       89,440       581       (406 )                                   Commercial mortgage-backed securities of U.S. Government Sponsored Entities                                 2016     17,375       17,534       233       (74 ) 2015     0       0       0       0                                     Collateralized loan obligations                                 2016     41,547       41,663       430       (314 ) 2015     41,300       39,940       0       (1,360 )                                   Private mortgage backed securities                                 2016     6,427       6,318       0       (109 ) 2015     7,967       7,882       0       (85 )                                   Total Securities Held to Maturity                                 2016   $ 372,498     $ 369,881     $ 1,753     $ (4,370 ) 2015   $ 203,525     $ 202,813     $ 1,155     $ (1,867 )   Table 15 - Maturity Distribution of Securities Available For Sale     December 31, 2015     December 31, 2016                           Average                           Average     1 Year   1-5   5-10   After 10           Maturity     1 Year   1-5   5-10   After 10           Maturity     Or Less     Years     Years     Years     Total     In Years     Or Less     Years     Years     Years     Total     In Years     (Dollars in thousands)     (Dollars in thousands)   AMORTIZED COST                                                                                                 U.S. Treasury securities and obligations of U.S. Government Sponsored Entities   $ 225     $ 3,608     $ 0     $ 0     $ 3,833       2.82     $ 7,348     $ 4,725     $ 0     $ 0     $ 12,073       0.66   Mortgage-backed securities of U.S. Government Sponsored Entities     0       117,771       49,430       25,023       192,224       5.60       0       119,379       159,693       8,654       287,726       6.10   Collateralized mortgage obligations of U.S. Government Sponsored Entities     9,597       188,072       44,647       304       242,620       4.04       4,481       191,096       43,030       198       238,805       3.61   Commercial mortgage backed securities of U.S. Government Sponsored Entities     0       5,399       16,095       857       22,351       6.46   Private mortgage backed securities     0       0       17,902       14,655       32,558       9.20       0       0       15,547       17,233       32,780       9.17   Private collateralized mortgage obligations     31,902       13,321       26,077       6,666       77,965       4.13       34,059       22,977       6,788       3,718       67,542       2.26   Collateralized loan obligations     0       32,791       91,686       0       124,477       5.63       0       32,879       91,837       0       124,716       5.71   Obligations of state and political subdivisions     0       8,286       18,201       12,632       39,119       9.36       0       9,695       26,697       26,769       63,161       11.02   Corporate and other debt securities     6,500       27,345       9,808       1,000       44,652       4.12       8,000       38,528       22,947       4,646       74,121       4.46   Private commercial mortgage backed securiites     565       0       8,629       31,933       41,127       16.30   Private commercial mortgage backed securities     548       4,883       14,149       17,954       37,534       13.60   Total Securities Available For Sale   $ 48,788     $ 391,193     $ 266,381     $ 92,214     $ 798,575       5.59     $ 54,436     $ 429,561     $ 396,783     $ 80,029     $ 960,809       5.54                                                                                                   FAIR VALUE                                                                                                 U.S. Treasury securities and obligations of U.S. Government Sponsored Entities   $ 225     $ 3,686     $ 0     $ 0     $ 3,911             $ 7,534     $ 4,794     $ 0     $ 0     $ 12,328           Mortgage-backed securities of U.S. Government Sponsored Entities     0       117,609       49,275       24,865       191,749               0       118,603       156,178       8,707       283,488           Collateralized mortgage obligations of U.S. Government Sponsored Entities     9,520       184,269       44,093       308       238,190               4,516       187,557       41,781       200       234,054           Commercial mortgage backed securities of U.S. Government Sponsored Entities     0       5,383       16,301       861       22,545           Private mortgage backed securities     0       0       17,383       14,409       31,792               0       0       14,980       17,009       31,989           Private collateralized mortgage obligations     31,695       13,384       26,181       6,697       77,957               33,780       22,973       6,955       3,581       67,289           Collateralized loan obligations     0       32,292       90,291       0       122,583               0       32,581       92,308       0       124,889           Obligations of state and political subdivisions     0       8,329       18,737       12,825       39,891               0       9,731       27,061       26,096       62,888           Corporate and other debt securities     6,500       27,079       9,694       1,000       44,273               8,010       38,573       22,664       4,614       73,861           Private commercial mortgage backed securiites     562       0       8,574       31,284       40,420           Private commercial mortgage backed securities     547       4,844       13,988       17,793       37,172           Total Securities Available For Sale   $ 48,502     $ 386,647     $ 264,228     $ 91,389     $ 790,766             $ 54,387     $ 425,039     $ 392,216     $ 78,861     $ 950,503                                                                                                           WEIGHTED AVERAGE YIELD (FTE)                                                                                                 U.S. Treasury securities and obligations of U.S. Government Sponsored Entities     0.30 %     2.94 %     0.00 %     0.00 %     2.78 %             3.94 %     3.27 %     0.00 %     0.00 %     3.68 %         Mortgage-backed securities of U.S. Government Sponsored Entities     0.00 %     2.24 %     2.34 %     2.76 %     2.33 %             0.00 %     2.05 %     2.53 %     3.17 %     2.31 %         Collateralized mortgage obligations of U.S. Government Sponsored Entities     1.77 %     1.87 %     2.29 %     1.07 %     1.97 %             1.82 %     1.77 %     2.33 %     1.40 %     1.87 %         Commercial mortgage backed securities of U.S. Government Sponsored Entities     0.00 %     1.99 %     3.87 %     1.92 %     3.58 %         Private mortgage backed securities     0.00 %     0.00 %     1.99 %     1.44 %     1.74 %             0.00 %     1.95 %     2.06 %     1.87 %     1.97 %         Private collateralized mortgage obligations     2.06 %     2.24 %     2.24 %     2.24 %     2.17 %             1.90 %     4.02 %     3.54 %     1.93 %     2.79 %         Collateralized loan obligations     0.00 %     1.37 %     2.69 %     0.00 %     2.43 %             0.00 %     2.02 %     3.53 %     0.00 %     3.23 %         Obligations of state and political subdivisions     0.00 %     2.30 %     3.23 %     4.33 %     3.39 %             0.00 %     2.40 %     3.32 %     3.80 %     3.38 %         Corporate and other debt securities     2.01 %     2.39 %     3.26 %     4.13 %     2.57 %             2.05 %     2.48 %     3.08 %     3.67 %     2.69 %         Private commercial mortgage backed securiites     1.47 %     0.00 %     2.27 %     4.84 %     4.26 %         Private commercial mortgage backed securities     1.77 %     2.40 %     2.65 %     2.46 %     2.51 %         Total Securities Available For Sale     1.98 %     2.00 %     2.49 %     3.46 %     2.33 %             2.19 %     2.03 %     2.91 %     2.93 %     2.50 %           Table 16 - Maturity Distribution of Securities Held for Investmentto Maturity       December 31, 2016                                     Average       1 Year     1-5     5-10     After 10           Maturity       Or Less     Years     Years     Years     Total     In Years       (Dollars in thousands)   AMORTIZED COST                                                 Mortgage-backed securities of U.S. Government Sponsored Entities   $ 0     $ 113,596   $ 33,833   $ 12,512   $ 159,941       5.05   Collateralized mortgage obligations of U.S. Government Sponsored Entities     0       126,338     20,870     0       147,208       3.16   Commercial mortgage backed securities of U.S. Government Sponsored Entities     0       0     17,375     0       17,375       7.21   Collateralized loan obligations     0       0     41,547     0       41,547       6.69   Private mortgage backed securities     0       1,460     4,967     0       6,427       6.98   Total Securities Held to Maturity   $ 0     $ 241,394     $ 118,592     $ 12,512     $ 372,498       4.62                                                     FAIR VALUE                                                 Mortgage-backed securities of U.S. Government Sponsored Entities   $ 0     $ 112,872   $ 34,195   $ 12,335   $ 159,402           Collateralized mortgage obligations of U.S. Government Sponsored Entities     0       125,021     19,943       0       144,964           Commercial mortgage backed securities of U.S. Government Sponsored Entities     0       0     17,534       0       17,534           Collateralized loan obligations     0       0     41,663       0       41,663           Private mortgage backed securities     0       1,460     4,858       0       6,318           Total Securities Held to Maturity   $ 0     $ 239,353     $ 118,193     $ 12,335     $ 369,881                                                             WEIGHTED AVERAGE YIELD (FTE)                                                 Mortgage-backed securities of U.S. Government Sponsored Entities     0.00 %     2.06 %     2.09 %     2.70 %     2.12 %         Collateralized mortgage obligations of U.S. Government Sponsored Entities     0.00 %     1.79 %     2.24 %     0.00 %     1.85 %         Commercial mortgage backed securities of U.S. Government Sponsored Entities     0.00 %     0.00 %     4.24 %     0.00 %     4.24 %         Collateralized loan obligations     0.00 %     0.00 %     4.34 %     0.00 %     4.34 %         Private mortgage backed securities     0.00 %     1.95 %     1.85 %     0.00 %     1.88 %         Total Securities Held to Maturity     0.00 %     1.92 %     3.21 %     2.70 %     2.35 %             December 31, 2015                                     Average       1 Year     1-5     5-10     After 10           Maturity       Or Less     Years     Years     Years     Total     In Years       (Dollars in thousands)   AMORTIZED COST                                                 Mortgage-backed securities of U.S. Government Sponsored Entities   $ 0     $ 35,085     $ 29,908     $ 0     $ 64,993       4.57   Collateralized mortgage obligations of U.S. Government Sponsored Entities     0       55,515       33,750       0       89,265       4.37   Collateralized loan obligations     0       0       41,300       0       41,300       6.35   Private collateralized mortgage obligations     0       0       7,967       0       7,967       8.23   Total Securities Available For Sale   $ 0     $ 90,601     $ 112,925     $ 0     $ 203,525       4.98                                                     FAIR VALUE                                                 Mortgage-backed securities of U.S. Government Sponsored Entities   $ 0     $ 35,278     $ 30,273     $ 0     $ 65,551           Collateralized mortgage obligations of U.S. Government Sponsored Entities     0       55,517       33,923       0       89,440           Collateralized loan obligations     0       0       39,940       0       39,940           Private collateralized mortgage obligations     0       0       7,882       0       7,882           Total Securities Available For Sale   $ 0     $ 90,795     $ 112,018     $ 0     $ 202,813                                                             WEIGHTED AVERAGE YIELD (FTE)                                                 Mortgage-backed securities of U.S. Government Sponsored Entities     0.00 %     2.50 %     2.04 %     0.00 %     2.29 %         Collateralized mortgage obligations of U.S. Government Sponsored Entities     0.00 %     1.89 %     2.42 %     0.00 %     2.09 %         Collateralized loan obligations     0.00 %     0.00 %     3.10 %     0.00 %     3.10 %         Private collateralized mortgage obligations     0.00 %     0.00 %     1.48 %     0.00 %     1.48 %         Total Securities Available For Sale     0.00 %     2.12 %     2.50 %     0.00 %     2.33 %         Table 17 - Interest Rate Sensitivity Analysis (1)     December 31, 2015     December 31, 2016     0-3   4-12   1-5   Over           0-3   4-12   1-5   Over           Months     Months     Years     5 Years     Total     Months     Months     Years     5 Years     Total     (Dollars in thousands)     (Dollars in thousands)   Federal funds sold and interest bearing deposits   $ 54,851     $ 0     $ 0     $ 0     $ 54,851     $ 27,124     $ 0     $ 0     $ 0     $ 27,124   Securities (2)     357,507       106,523       288,067       250,003       1,002,100       452,500       110,801       399,154       360,546       1,323,001   Loans, net (3)     661,457       327,679       974,747       199,059       2,162,942       797,954       337,967       1,238,044       520,903       2,894,868   Earning assets     1,073,815       434,202       1,262,814       449,062       3,219,893       1,277,578       448,768       1,637,198       881,449       4,244,993   Savings deposits (4)     1,695,953       0       0       0       1,695,953       2,023,086       0       0       0       2,023,086   Time deposits     76,692       122,224       94,049       1,022       293,987       68,234       145,398       136,429       1,789       351,850   Borrowings     241,966       0       50,000       0       291,966       689,443       0       0       0       689,443   Interest bearing liabilities     2,014,611       122,224       144,049       1,022       2,281,906       2,780,763       145,398       136,429       1,789       3,064,379   Interest sensitivity gap   $ (940,796 )   $ 311,978     $ 1,118,765     $ 448,040     $ 937,987     $ (1,503,185 )   $ 303,370     $ 1,500,769     $ 879,660     $ 1,180,614   Cumulative gap   $ (940,796 )   $ (628,818 )   $ 489,947     $ 937,987             $ (1,503,185 )   $ (1,199,815 )   $ 300,954     $ 1,180,614           Cumulative gap to total earning assets (%)     (29.2 )     (19.5 )     15.2       29.1               (35.4 )     (28.3 )     7.1       27.8           Earning assets to interest bearing liabilities (%)     53.3       355.3       876.7       n/m               45.9       308.6       1,200.0        n/m             (1) The repricing dates may differ from maturity dates for certain assets due to prepayment assumptions. (1) The repricing dates may differ from maturity dates for certain assets due to prepayment assumptions. (2) Securities are stated at amortized cost. (2) Securities are stated at amortized cost. (3) Includes loans available for sale. (3) Excludes nonaccrual loans. (4) This category is comprised of interest-bearing demand, savings and money market deposits. If interest-bearing demand and savings deposits (totaling $1,030,600) were deemed repriceable in "4-12 months", the interest sensitivity gap and cumulative gap would be $89,804 or 2.8% of total earning assets and an earning assets to interest bearing liabilities for the 0-3 months category of 109.1% (4) This category is comprised of interest-bearing demand, savings and money market deposits. If interest-bearing demand and savings deposits (totaling $1,220,389) were deemed repriceable in "4-12 months", the interest sensitivity gap and cumulative gap would be ($282,796) or (6.7)% of total earning assets and an earning assets to interest bearing liabilities for the 0-3 months category of 81.9%. n/m = not meaningful   Stock Performance Graph The line graph below compares the cumulative total stockholder return on Seacoast common stock for the five years ended December 31, 20152016 with the cumulative total return of the NASDAQ Composite Index and the SNL Southeast Bank Index for the same period. The graph and table assume that $100 was invested onDecemberon December 31, 20102011 (the last day of trading for the year ended December 31, 2010)2011) in each of SeacoastcommonSeacoast common stock, the NASDAQ Composite Index and the SNL Southeast Bank Index. The cumulative total return represents the change in stock price and the amount of dividends received over the period, assuming all dividends were reinvested.            Period Ending   Index   12/31/10     12/31/11     12/31/12     12/31/13     12/31/14     12/31/15   Seacoast Banking Corporation of Florida     100.00       104.11       110.27       167.12       188.36       205.21   NASDAQ Composite     100.00       99.21       116.82       163.75       188.03       201.40   SNL Southeast Bank     100.00       58.51       97.19       131.70       148.33       146.02       Period Ending   Index   12/31/11     12/31/12     12/31/13     12/31/14     12/31/15     12/31/16   Seacoast Banking Corporation of Florida     100.00       105.92       160.53       180.92       197.11       290.26   NASDAQ Composite     100.00       117.45       164.57       188.84       201.98       219.89   SNL Southeast Bank     100.00       166.11       225.10       253.52       249.57       331.30     Source : SNL Financial, LC, Charlottesville, VAan offering of S&P Global Market Intelligence © 20162017 www.snl.com   112  SELECTED QUARTERLY INFORMATION QUARTERLY CONSOLIDATED INCOME (LOSS) STATEMENTS (UNAUDITED)     2015 Quarters     2014 Quarters     2016 Quarters     2015 Quarters     Fourth     Third     Second     First     Fourth     Third     Second     First     Fourth     Third     Second     First     Fourth     Third     Second     First     (Dollars in thousands, except per share data)     (Dollars in thousands, except per share data)   Net interest income:                                                                                                                                 Interest income   $ 30,915     $ 30,823     $ 27,361     $ 27,318     $ 26,272     $ 18,491     $ 17,987     $ 17,512     $ 39,691     $ 39,614     $ 36,579     $ 32,171     $ 30,915     $ 30,823     $ 27,361     $ 27,318   Interest expense     1,815       1,812       1,695       1,608       1,539       1,263       1,262       1,291       2,266       2,166       2,086       1,949       1,815       1,812       1,695       1,608   Net interest income     29,100       29,011       25,666       25,710       24,733       17,228       16,725       16,221       37,425       37,448       34,493       30,222       29,100       29,011       25,666       25,710   Provision (recapture) for loan losses     369       987       855       433       118       (1,425 )     (1,444 )     (735 ) Net interest income after provision (recapture) for loan losses     28,731       28,024       24,811       25,277       24,615       18,653       18,169       16,956   Provision for loan losses     1,000       550       662       199       369       987       855       433   Net interest income after provision for loan losses     36,425       36,898       33,831       30,023       28,731       28,024       24,811       25,277   Noninterest income:                                                                                                                                 Service charges on deposit accounts     2,229       2,217       2,115       2,002       2,208       1,753       1,484       1,507       2,612       2,698       2,230       2,129       2,229       2,217       2,115       2,002   Trust fees     791       781       759       801       795       817       703       671       969       820       838       806       791       781       759       801   Mortgage banking fees     955       1,177       1,032       1,088       716       825       855       661       1,616       1,885       1,364       999       955       1,177       1,032       1,088   Brokerage commissions and fees     511       604       576       441       417       408       410       379       480       463       470       631       511       604       576       441   Marine finance fees     205       258       492       197       445       281       340       254       115       138       279       141       205       258       492       197   Interchange income     1,989       1,925       2,033       1,737       1,603       1,452       1,514       1,403       2,334       2,306       2,370       2,217       1,989       1,925       2,033       1,737   Other deposit based EFT fees     99       88       96       114       92       70       83       98       125       109       116       127       99       88       96       114   BOLI Income     396       366       334       330       252       0       0       0       611       382       379       841       396       366       334       330   Gain on participated loan     0       0       725       0       0       0       0       0       0       0       0       0       0       0       725       0   Other income     607       666       684       598       613       543       507       585       1,060       963       1,065       739       607       666       684       598   Securities gains, net     1       160       0       0       108       344       0       17       7       225       47       89       1       160       0       0   Bargain purchase gain, net     416       0       0       0       0       0       0       0       0       0       0       0       416       0       0       0   Total noninterest income     8,199       8,242       8,846       7,308       7,249       6,493       5,896       5,575       9,929       9,989       9,158       8,719       8,199       8,242       8,846       7,308   Noninterest expenses:                                                                                                                                 Salaries and wages     11,135       11,850       9,301       8,789       11,676       8,064       7,768       7,624       12,476       14,337       13,884       13,399       11,135       11,850       9,301       8,789   Employee benefits     2,178       2,430       2,541       2,415       2,461       2,049       2,081       2,182       2,475       2,425       2,521       2,482       2,178       2,430       2,541       2,415   Outsourced data processing costs     2,455       3,277       2,234       2,184       3,506       1,769       1,811       1,695       3,076       3,198       2,803       4,439       2,455       3,277       2,234       2,184   Telephone / data lines     412       446       443       496       419       313       306       293       502       539       539       528       412       446       443       496   Occupancy     2,314       2,396       2,011       2,023       2,325       1,879       1,888       1,838       2,830       3,675       3,645       2,972       2,314       2,396       2,011       2,023   Furniture and equipment     1,000       883       819       732       732       628       604       571       1,211       1,228       1,283       998       1,000       883       819       732   Marketing     1,128       1,099       1,226       975       1,163       925       675       813       847       780       957       1,049       1,128       1,099       1,226       975   Legal and professional fees     2,580       2,189       1,590       1,663       2,555       1,103       2,272       941       2,370       2,213       2,656       2,357       2,580       2,189       1,590       1,663   FDIC assessments     551       552       520       589       476       387       411       386       661       517       643       544       551       552       520       589   Amortization of intangibles     397       397       315       315       446       195       196       196       719       728       593       446       397       397       315       315   Asset dispositions expense     79       77       173       143       103       139       118       128       84       219       160       90       79       77       173       143   Branch closures and new branding     0       0       0       0       4,958       0       0       0   Net (gain)/loss on other real estate owned and repossessed assets     (157 )     262       53       81       9       156       92       53       (161 )     (96 )     (201 )     (51 )     (157 )     262       53       81   Early redemption cost for Federal Home Loan Bank advances     0       0       1,777       0       0       0       0       0   Other     3,097       3,269       3,062       2,781       3,182       2,282       2,461       2,063       3,207       3,672       3,548       3,088       3,097       3,269       3,062       2,781   Total noninterest expenses     27,169       29,127       24,288       23,186       34,011       19,889       20,683       18,783       30,297       33,435       34,808       32,341       27,169       29,127       24,288       23,186   Income (loss) before income taxes     9,761       7,139       9,369       9,399       (2,147 )     5,257       3,382       3,748   Provision (benefit) for income taxes     3,725       2,698       3,564       3,540       (630 )     2,261       1,464       1,449   Net income (loss)   $ 6,036     $ 4,441     $ 5,805     $ 5,859     $ (1,517 )   $ 2,996     $ 1,918     $ 2,299   Income before income taxes     16,057       13,452       8,181       6,401       9,761       7,139       9,369       9,399   Provision for income taxes     5,286       4,319       2,849       2,435       3,725       2,698       3,564       3,540   Net income   $ 10,771     $ 9,133     $ 5,332     $ 3,966     $ 6,036     $ 4,441     $ 5,805     $ 5,859                                                                                                                                   PER COMMON SHARE DATA                                                                                                                                 Net income (loss) diluted   $ 0.18     $ 0.13     $ 0.18     $ 0.18     $ (0.05 )   $ 0.12     $ 0.07     $ 0.09   Net income (loss) basic     0.18       0.13       0.18       0.18       (0.05 )     0.12       0.07       0.09   Net income diluted   $ 0.28     $ 0.24     $ 0.14     $ 0.11     $ 0.18     $ 0.13     $ 0.18     $ 0.18   Net income basic     0.29       0.24       0.14       0.11       0.18       0.13       0.18       0.18   Cash dividends declared:                                                                                                                                 Common stock     0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00   Market price common stock:                                                                                                                                 Low close     14.10       14.11       13.81       12.02       10.80       10.03       10.00       10.55       15.85       15.50       15.21       13.40       14.10       14.11       13.81       12.02   High close     16.95       16.26       16.09       14.46       14.24       11.27       11.28       12.51       22.91       17.80       17.19       16.22       16.95       16.26       16.09       14.46   Bid price at end of period     14.98       14.68       15.80       14.27       13.75       10.93       10.87       11.00       22.06       16.09       16.24       15.79       14.98       14.68       15.80       14.27     FINANCIAL HIGHLIGHTS   (Dollars in thousands, except per share data)   2015   2014   2013   2012   2011     2016   2015   2014   2013   2012                                                                 FOR THE YEAR                                                                                                                                                                 Net interest income   $ 109,487     $ 74,907     $ 65,206     $ 64,809     $ 66,839     $ 139,588     $ 109,487     $ 74,907     $ 65,206     $ 64,809                                                                                   Provision (recapture) for loan losses     2,644       (3,486 )     3,188       10,796       1,974       2,411       2,644       (3,486 )     3,188       10,796                                                                                   Noninterest income:                                                                                                                                                                 Other     32,018       24,744       24,319       21,444       18,345       37,427       32,018       24,744       24,319       21,444                                                                                   Loss on sale of commercial loan     0       0       0       (1,238 )     0       0       0       0       0       (1,238 )                                                                                 Securities gains, net     161       469       419       7,619       1,220       368       161       469       419       7,619                                                                                   Bargain purchase gains, net     416       0       0       0       0       0       416       0       0       0                                                                                   Noninterest expenses     103,770       93,366       75,152       82,548       77,763       130,881       103,770       93,366       75,152       82,548                                                                                   Income (loss) before income taxes     35,668       10,240       11,604       (710 )     6,667       44,091       35,668       10,240       11,604       (710 )                                                                                 Provision (benefit) for income taxes     13,527       4,544       (40,385 )     0       0       14,889       13,527       4,544       (40,385 )     0                                                                                   Net income (loss)     22,141       5,696       51,989       (710 )     6,667       29,202       22,141       5,696       51,989       (710 )                                                                                 Per Share Data                                                                                                                                                                 Net income (loss) available to common shareholders:                                                                                                                                                                 Diluted     0.66       0.21       2.44       (0.24 )     0.16       0.78       0.66       0.21       2.44       (0.24 )                                                                                 Basic     0.66       0.21       2.46       (0.24 )     0.16       0.79       0.66       0.21       2.46       (0.24 )                                                                                 Cash dividends declared     0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00                                                                                   Book value per share common     10.29       9.44       8.40       6.16       6.46       9.37       10.29       9.44       8.40       6.16                                                                                   Dividends to net income     0.0 %     0.0 %     0.0 %     0.0 %     0.0 %                                         AT YEAR END                                                                                                                                                                 Assets   $ 3,534,780     $ 3,093,335     $ 2,268,940     $ 2,173,929     $ 2,137,375     $ 4,680,932     $ 3,534,780     $ 3,093,335     $ 2,268,940     $ 2,173,929                                                                                   Securities     994,291       949,279       641,611       656,868       668,339       1,323,001       994,291       949,279       641,611       656,868                                                                                   Net loans     2,137,202       1,804,814       1,284,139       1,203,977       1,182,509       2,856,136       2,137,202       1,804,814       1,284,139       1,203,977                                                                                   Deposits     2,844,387       2,416,534       1,806,045       1,758,961       1,718,741       3,523,245       2,844,387       2,416,534       1,806,045       1,758,961                                           FHLB borrowings     415,000       50,000       130,000       50,000       50,000                                           Subordinated debt     70,241       69,961       64,583       53,610       53,610                                                                                   Shareholders' equity     353,453       312,651       198,604       165,546       170,077       435,397       353,453       312,651       198,604       165,546                                                                                   Performance ratios:                                                                                                                                                                 Return on average assets     0.67 %     0.23 %     2.38 %     (0.03 )%     0.32 %     0.69 %     0.67 %     0.23 %     2.38 %     (0.03 )%                                                                                 Return on average equity     6.56       2.22       28.36       (0.43 )     4.03       7.06       6.56       2.22       28.36       (0.43 )                                                                                 Net interest margin 1     3.64       3.25       3.15       3.22       3.42       3.63       3.64       3.25       3.15       3.22                                                                                   Average equity to average assets     10.21       10.34       8.38       7.81       8.01       9.85       10.21       10.34       8.38       7.81       1. On a fully taxable equivalent basis, a non-GAAP measure (see page 77 of Management’s Discussion and Analysis).   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   Board of Directors and Shareholders Seacoast Banking Corporation of Florida Stuart, Florida   We have audited the accompanying consolidated balance sheets of Seacoast Banking Corporation of Florida (the “Company”) as of December 31, 20152016 and 2014,2015, and the related consolidated statements of income and comprehensive income, (loss),changes in shareholders' equity, and cash flows and shareholders’ equity for each of the years in the two-yearthree-year period ended December 31, 2015.2016. We also have audited the Company’s internal control over financial reporting as of December 31, 2015,2016, based on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’smanagement’s report on internal control over financial reporting contained in Item 9A.9A of the accompanying Form 10-K. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’scompany's internal control over financial reporting based on our audit.audits.   We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our auditaudits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our auditaudits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.   A company’scompany's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’scompany's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of authorizedunauthorized acquisition, use, or disposition of the company’scompany's assets that could have a material effect on the financial statements.   109 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As permitted, the Company has excluded the operations of Grand Bankshares, Inc. acquired during 2015, which is described in Note T of the consolidated financial statements, from the scope of management’s report on internal control over financial reporting. As such, it has also been excluded from the scope of our audit of internal control over financial reporting.   In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Seacoast Banking Corporation of Floridathe Company as of December 31, 20152016 and 2014,2015, and the results of its operations and its cash flows for the each of the years in the two-yearthree-year period ended December 31, 20152016 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015,2016, based on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).    /s/ Crowe Horwath LLP Crowe Horwath LLP Crowe Horwath LLP   Fort Lauderdale, Florida March 14, 201615, 2017    110 Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders Seacoast Banking Corporation of Florida: We have audited the accompanying consolidated statements of income, comprehensive income, cash flows, and shareholders’ equity of Seacoast Banking Corporation of Florida and subsidiaries for the year ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of Seacoast Banking Corporation of Florida and subsidiaries for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles. /s/ KPMG LLP March 17, 2014 Miami, Florida Certified Public Accountants 111 SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME     For the Year Ended December 31     For the Year Ended December 31     2015     2014     2013     2016     2015     2014     (Dollars in thousands, except share data)     (Dollars in thousands, except share data)                               INTEREST INCOME                                                 Interest on securities                                                 Taxable   $ 20,341     $ 15,448     $ 12,856     $ 26,133     $ 20,341     $ 15,448   Nontaxable     585       211       68       1,036       585       211   Interest and fees on loans     94,469       63,586       56,971       119,217       94,469       63,586   Interest on federal funds sold and interest bearing deposits     1,022       1,017       868       1,669       1,022       1,017   Total interest income     116,417       80,262       70,763       148,055       116,417       80,262   INTEREST EXPENSE                                                 Interest on savings deposits     2,085       864       782       2,593       2,085       864   Interest on time certificates     1,228       1,538       1,947       2,074       1,228       1,538   Interest on short term borrowings     375       297       286   Interest on federal funds purchased and other short term borrowings     484       340       260   Interest on Federal Home Loan Bank borrowings     1,256       1,643       1,640   Interest on subordinated debt     1,634       1,053       934       2,060       1,634       1,053   Interest on other borrowings     1,608       1,603       1,608   Total interest expense     6,930       5,355       5,557       8,467       6,930       5,355   NET INTEREST INCOME     109,487       74,907       65,206       139,588       109,487       74,907   Provision (recapture) for loan losses     2,644       (3,486 )     3,188       2,411       2,644       (3,486 ) NET INTEREST INCOME AFTER PROVISION (RECAPTURE) FOR LOAN                         LOSSES     106,843       78,393       62,018   NET INTEREST INCOME AFTER PROVISION (RECAPTURE) FOR LOAN LOSSES     137,177       106,843       78,393   NONINTEREST INCOME (Note M)                                                 Bargain purchase gain     416       0       0       0       416       0   Securities gains, net (includes net gains (losses) of $(325), $(110), and $149 in other comprehensive income reclassifications for 2015, 2014, and 2013 respectively)     161       469       419   Securities gains, net (includes net losses of $617, $325, and $110 in other comprehensive income reclassifications for 2016, 2015, and 2014 respectively)     368       161       469   Other     32,018       24,744       24,319       37,427       32,018       24,744   Total noninterest income     32,595       25,213       24,738       37,795       32,595       25,213   NONINTEREST EXPENSE (Note M)     103,770       93,366       75,152       130,881       103,770       93,366   INCOME BEFORE INCOME TAXES     35,668       10,240       11,604       44,091       35,668       10,240   Income taxes (benefit)     13,527       4,544       (40,385 ) Income taxes     14,889       13,527       4,544   NET INCOME     22,141       5,696       51,989     $ 29,202     $ 22,141     $ 5,696   Preferred stock dividends and accretion on preferred stock discount     0       0       4,073   NET INCOME AVAILABLE TO COMMON SHAREHOLDERS   $ 22,141     $ 5,696     $ 47,916                                                   SHARE DATA                                                 Net income per share of common stock                                                 Diluted   $ 0.66     $ 0.21     $ 2.44     $ 0.78     $ 0.66     $ 0.21   Basic     0.66       0.21       2.46       0.79       0.66       0.21                                                   Average common shares outstanding                                                 Diluted     33,744,171       27,716,895       19,650,005       37,508,046       33,744,171       27,716,895   Basic     33,495,827       27,538,955       19,449,560       36,872,007       33,495,827       27,538,955     See notes to consolidated financial statements. SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME       For the Year Ended December 31       2015     2014     2013       (Dollars in thousands)                       NET INCOME   $ 22,141     $ 5,696     $ 51,989   Other comprehensive income (loss):                         Unrealized gains (losses) on securities available for sale     (2,042 )     12,302       (22,532 ) Unrealized gains (losses) on transfer of securities available for sale (AFS) to held for investment (HTM) and securities HTM to securities AFS     0       (3,137 )     724   Amortization of unrealized losses on securities transferred to held for investment, net     (539 )     (290 )     0   Reclassification adjustment for (gains) and losses included in net income     325       110       (149 ) Provision (benefit) for income taxes     (870 )     3,468       (8,475 ) Total other comprehensive income (loss)     (1,386 )     5,517       (13,482 ) COMPREHENSIVE INCOME   $ 20,755     $ 11,213     $ 38,507       For the Year Ended December 31       2016     2015     2014       (Dollars in thousands)                       NET INCOME   $ 29,202     $ 22,141     $ 5,696   Other comprehensive income:                         Unrealized gains (losses) on securities available for sale (AFS)     (1,151 )     (1,556 )     12,881   Unrealized losses on transfer of securities available for sale to held to maturity (HTM)     0       0       (3,137 ) Amortization of unrealized losses on securities transferred to HTM, net     (488 )     (539 )     (290 ) Reclassification adjustment for gains included in net income     (368 )     (161 )     (469 ) Provision for income taxes     707       870       (3,468 ) Total other comprehensive income (loss)     (1,300 )     (1,386 )     5,517   COMPREHENSIVE INCOME   $ 27,902     $ 20,755     $ 11,213   SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS       December 31       2015     2014       (Dollars in thousands, except share data)   ASSETS                                   Cash and due from banks   $ 81,216     $ 64,411   Interest bearing deposits with other banks     54,851       36,128    Total cash and cash equivalents     136,067       100,539   Securities available for sale (at fair value)     790,766       741,375   Securities held for investment (fair value $202,813 in 2015 and $208,787 in 2014)     203,525       207,904    Total securities     994,291       949,279   Loans held for sale     23,998       12,078   Loans     2,156,330       1,821,885   Less: Allowance for loan losses     (19,128 )     (17,071 )  Net loans     2,137,202       1,804,814   Bank premises and equipment, net     54,579       45,086   Other real estate owned     7,039       7,462   Goodwill     25,211       25,309   Other intangible assets     8,594       7,454   Banked owned life insurance     43,579       35,679   Net deferred tax assets     60,274       66,800   Other assets     43,946       38,835   TOTAL ASSETS   $ 3,534,780     $ 3,093,335                     LIABILITIES                                   Noninterest demand   $ 854,447     $ 725,238   Interest-bearing demand     734,749       652,353   Savings     295,851       264,738   Money market     665,353       450,172   Other time deposits     153,318       173,247   Brokered time certificates     9,403       7,034   Time certificates of $100,000 or more     131,266       143,752    Total deposits     2,844,387       2,416,534   Federal funds purchased and securities sold under agreement to repurchase, maturing within 30 days     172,005       233,640   Borrowed funds     50,000       50,000   Subordinated debt     69,961       64,583   Other liabilities     44,974       15,927         3,181,327       2,780,684                      Commitments and Contingencies (Notes K and P)                                   SHAREHOLDERS' EQUITY                                   Common stock, par value $0.10 per share authorized 60,000,000 shares, issued 34,356,892  and outstanding 34,351,409 shares in 2015 and authorized 60,000,000 shares, issued  33,143,202 and outstanding 33,136,592 shares in 2014     3,435       3,300   Additional paid-in capital     399,162       379,249   Accumulated deficit     (42,858 )     (65,000 ) Less: Treasury stock (5,484 shares in 2015 and 6,610 shares in 2014), at cost     (73 )     (71 )       359,666       317,478   Accumulated other comprehensive (loss), net     (6,213 )     (4,827 )       353,453       312,651   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 3,534,780     $ 3,093,335       December 31       2016     2015       (Dollars in thousands, except share data)                 ASSETS                                   Cash and due from banks   $ 82,520     $ 81,216   Interest bearing deposits with other banks     27,124       54,851   Total cash and cash equivalents     109,644       136,067   Securities available for sale (at fair value)     950,503       790,766   Securities held to maturity (fair value $369,881 in 2016 and $202,813 in 2015)     372,498       203,525   Total securities     1,323,001       994,291   Loans held for sale     15,332       23,998   Loans     2,879,536       2,156,330   Less: Allowance for loan losses     (23,400 )     (19,128 ) Net loans     2,856,136       2,137,202   Bank premises and equipment, net     58,684       54,579   Other real estate owned     9,949       7,039   Goodwill     64,649       25,211   Other intangible assets, net     14,572       8,594   Bank owned life insurance     84,580       43,579   Net deferred tax assets     60,818       60,274   Other assets     83,567       43,946   TOTAL ASSETS   $ 4,680,932     $ 3,534,780                     LIABILITIES                                   Noninterest demand   $ 1,148,309     $ 854,447   Interest-bearing demand     873,727       734,749   Savings     346,662       295,851   Money market     802,697       665,353   Other time deposits     159,887       153,318   Brokered time certificates     7,342       9,403   Time certificates of $100,000 or more     184,621       131,266   Total deposits     3,523,245       2,844,387   Federal funds purchased and securities sold under agreement to repurchase, maturing  within 30 days     204,202       172,005   Federal Home Loan Bank borrowings     415,000       50,000   Subordinated debt     70,241       69,961   Other liabilities     32,847       44,974         4,245,535       3,181,327                     Commitments and Contingencies (Notes K and P)                                   SHAREHOLDERS' EQUITY                                   Common stock, par value $0.10 per share authorized 60,000,000 shares, issued 38,090,568 and outstanding 38,021,835 shares in 2016 and authorized 60,000,000 shares, issued  34,356,892 and outstanding 34,351,409 shares in 2015     3,802       3,435   Additional paid-in capital     454,001       399,162   Accumulated deficit     (13,657 )     (42,858 ) Less: Treasury stock (68,733 shares in 2016 and 5,484 shares in 2015), at cost     (1,236 )     (73 )       442,910       359,666   Accumulated other comprehensive loss, net     (7,513 )     (6,213 )       435,397       353,453   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 4,680,932     $ 3,534,780     See notes to consolidated financial statements. SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS     For the Year Ended December 31     For the Year Ended December 31     2015     2014     2013     2016     2015     2014     (Dollars in thousands)     (Dollars in thousands)   CASH FLOWS FROM OPERATING ACTIVITIES                                                 Interest received   $ 110,712     $ 78,564     $ 73,849   Fees and commissions received     32,072       24,689       24,168   Interest paid     (8,086 )     (4,508 )     (5,584 ) Cash paid to suppliers and employees     (96,728 )     (81,268 )     (65,405 ) Income taxes paid     (575 )     (239 )     (157 ) Origination of loans designated held for sale     (206,199 )     (188,952 )     (208,998 ) Sale of loans designated held for sale     194,279       190,706       231,187   Net change in other assets     (2,486 )     2,954       792   Net Income   $ 29,202     $ 22,141     $ 5,696   Adjustments to reconcile net income to net cash provided by operating activities:                         Depreciation     5,076       3,773       3,268   Amortization of premiums and discounts on securities, net     7,559       3,920       2,353   Other amortization and accretion, net     (2,238 )     (7,943 )     (256 ) Stock based compensation     4,154       2,859       1,299   Origination of loans designated for sale     (175,842 )     (206,199 )     (188,952 ) Sale of loans designated for sale     184,508       194,279       190,706   Provision for loan losses     2,411       2,644       (3,486 ) Deferred income taxes     14,206       12,888       4,222   Gain on sale of securities     (368 )     (161 )     (469 ) Gain on sale of loans     (668 )     (702 )     (419 ) Losses (gains) on sale and write-downs of other real estate owned     (509 )     239       310   Losses and write-downs on disposition of fixed assets     2,442       183       4,493   Changes in operating assets and liabilities, net of effects from acquired companies:                         Net increase in other assets     (14,107 )     (4,526 )     (315 ) Net increase (decrease) in other liabilities     6,181       (406 )     3,496   Net cash provided by operating activities     22,989       21,946       49,852       62,007       22,989       21,946                                                   CASH FLOWS FROM INVESTING ACTIVITIES                                                 Maturities of securities available for sale     118,493       92,499       155,627   Maturities of securities held for investment     28,629       16,138       0   Maturities and repayments of securities available for sale     127,879       118,493       92,499   Maturities and repayments of securities held to maturity     48,705       28,629       16,138   Proceeds from sale of securities available for sale     60,314       21,527       67,330       40,421       60,314       21,527   Purchases of securities available for sale     (159,616 )     (280,137 )     (230,118 )     (297,719 )     (159,616 )     (280,137 ) Purchases of securities held for investment     (24,366 )     (65,340 )     0   Purchases of securities held to maturity     (218,654 )     (24,366 )     (65,340 ) Net new loans and principal payments     (217,871 )     (154,772 )     (88,039 )     (390,354 )     (217,346 )     (154,772 ) Proceeds from sale of loans     525       0       379   Proceeds from the sale of other real estate owned     5,758       4,066       8,843       7,952       5,758       4,066   Proceeds from sale of Federal Home Loan Bank and Federal Reserve Bank Stock     7,427       2,423       943       9,350       7,427       2,423   Purchase of Federal Home Loan Bank and Federal Reserve Bank Stock     (7,510 )     (6,425 )     (1,303 )     (28,857 )     (7,510 )     (6,425 ) Purchase of bank owned life insurance     0       (30,000 )     0       (40,000 )     0       (30,000 ) Net cash from bank acquisition     32,927       110,996       0   Net cash from bank acquisitions     235,546       32,927       110,996   Additions to bank premises and equipment     (9,091 )     (6,083 )     (2,817 )     (6,054 )     (9,091 )     (6,083 ) Net cash (used) by investing activities     (164,381 )     (295,108 )     (89,155 ) Net cash used in investing activities     (511,785 )     (164,381 )     (295,108 )                                                 CASH FLOWS FROM FINANCING ACTIVITIES                                                 Net increase in deposits     240,086       93,446       47,085       27,320       240,086       93,446   Net increase (decrease) in federal funds purchased and repurchase agreements     (63,293 )     63,852       14,507       32,196       16,707       (16,148 ) Increase in borrowings and subordinated debt     0       0       0   Net increase (decrease) in FHLB borrowings, maturing in 30 days or less     415,000       (80,000 )     80,000   Early redemption of FHLB borrowings (see Note I)     (50,000 )     0     0   Issuance of common stock, net of related expense     0       24,637       46,977       0       0       24,637   Stock based employee benefit plans     127       142       190       (1,161 )     127       142   Redemption of preferred stock     0       0       (50,000 ) Dividends paid on preferred shares     0       0       (2,819 ) Net cash provided by financing activities     176,920       182,077       55,940       423,355       176,920       182,077   Net increase (decrease) in cash and cash equivalents     35,528       (91,085 )     16,637       (26,423 )     35,528       (91,085 ) Cash and cash equivalents at beginning of year     100,539       191,624       174,987       136,067       100,539       191,624   Cash and cash equivalents at end of year   $ 136,067     $ 100,539     $ 191,624     $ 109,644     $ 136,067     $ 100,539                           Supplemental disclosure of cash flow information:                         Cash paid during the period for interest   $ 7,855     $ 6,636     $ 3,521   Cash paid during the period for income taxes     703       575       239                           Supplemental disclosure of non cash investing activities:                         Transfers from loans to other real estate owned   $ 3,009     $ 4,946     $ 4,789   Transfers from bank premises to other real estate owned     7,708       309       0     See notes to consolidated financial statements. SEACOAST BANKING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                           Retained           Accumulated                         Retained           Accumulated                                 Earnings           Other                         Earnings           Other           Common Stock     Preferred Stock     Paid-in     (Accumulated     Treasury     Comprehensive           Common Stock     Paid-in     (Accumulated     Treasury     Comprehensive         (Dollars and shares in thousands)   Shares     Amount     Shares     Amount     Capital     Deficit)     Stock     Income (Loss), Net     Total     Shares     Amount     Capital     Deficit)     Stock     Income (Loss), Net     Total   BALANCE AT DECEMBER 31, 2012     18,967     $ 1,897       2     $ 48,746     $ 230,438     $ (118,611 )   $ (62 )   $ 3,138     $ 165,546   Comprehensive income     0       0       0       0       0       51,989       0       (13,482 )     38,507   Cash dividends on preferred shares     0       0       0       0       0       (2,819 )     0       0       (2,819 ) Stock based compensation expense     0       0       0       0       246       0       0       0       246   Common stock issued for stock based employee benefit plans     19       2       0       0       95       0       51       0       148   Issuance of common stock, net of related expense     4,652       465       0       0       46,511       0       0       0       46,976   Redemption of preferred stock     0       0       (2 )     (50,000 )     0       0       0       0       (50,000 ) Accretion on preferred stock discount     0       0       0       1,254       0       (1,254 )     0       0       0   BALANCE AT DECEMBER 31, 2013     23,638       2,364       0       0       277,290     (70,695 )     (11 )     (10,344 )     198,604       23,638     $ 2,364     $ 277,290   $ (70,695 )   $ (11 )   $ (10,344 )   $ 198,604   Comprehensive income     0       0       0       0       0       5,696       0       5,517       11,213       0       0       0       5,696       0       5,517       11,213   Stock based compensation expense     0       0       0       0       1,299       0       0       0       1,299       0       0       1,299       0       0       0       1,299   Common stock issued for stock based employee benefit plans     147       1       0       0       171       0       (60 )     0       112       147       1       171       0       (60 )     0       112   Issuance of common stock, net of related expense     2,326       233       0       0       24,404       0       0       0       24,637       2,326       233       24,404       0       0       0       24,637   Issuance of common stock, pursuant to acquisition     7,026       702       0       0       76,085       0       0       0       76,787       7,026       702       76,085       0       0       0       76,787   Other     0       0       0       0       0       (1 )     0       0       0       0       0       0       (1 )     0       0       0   BALANCE AT DECEMBER 31, 2014     33,137       3,300       0       0       379,249       (65,000 )     (71 )     (4,827 )     312,651       33,137       3,300       379,249       (65,000 )     (71 )     (4,827 )     312,651   Comprehensive income     0       0       0       0       0       22,141       0       (1,386 )     20,755       0       0       0       22,141       0       (1,386 )     20,755   Stock based compensation expense     0       0       0       0       2,859       0       0       0       2,859       0       0       2,859       0       0       0       2,859   Common stock issued for stock based employee benefit plans     124       0       0       0       17       0       (2 )     0       15       124       0       17       0       (2 )     0       15   Issuance of common stock, pursuant to acquisition     1,090       109       0       0       17,063       0       0       0       17,172       1,090       109       17,063       0       0       0       17,172   Other     0       26       0       0       (26 )     1       0       0       1       0       26       (26 )     1       0       0       1   BALANCE AT DECEMBER 31, 2015     34,351     $ 3,435       0     $ 0     $ 399,162     $ (42,858 )   $ (73 )   $ (6,213 )   $ 353,453       34,351       3,435       399,162       (42,858 )     (73 )     (6,213 )     353,453   Comprehensive income     0       0       0       29,202       0       (1,300 )     27,902   Stock based compensation expense     0       0       4,154       0       0       0       4,154   Common stock issued for stock based employee benefit plans     87       0       2       0       (1,163 )     0       (1,161 ) Common stock issued for stock options     12       1       133       0       0       0       134   Issuance of common stock, pursuant to acquisition     3,291       329       50,584       0       0       0       50,913   Other     281       37       (34 )     (1 )     0       0       2   BALANCE AT DECEMBER 31, 2016     38,022     $ 3,802     $ 454,001     $ (13,657 )   $ (1,236 )   $ (7,513 )   $ 435,397     See notes to consolidated financial statements. NOTES TOCONSOLIDATEDFINANCIALSTATEMENTS Seacoast Banking Corporation of Florida and Subsidiaries   Note A Significant Accounting Policies General: Seacoast Banking Corporation of Florida (“Company”) is a single segment bank holding company with one operating subsidiary bank, Seacoast National Bank (“Seacoast National”Bank”, together the “Company”). The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, 47 traditional branch offices, and five commercial banking centers operated by Seacoast National’s service area includes Okeechobee, Highlands, Hendry, Glades, DeSoto,Bank. Offices stretch from Ft. Lauderdale, Boca Raton and West Palm Beach Martin, St. Lucie, Brevard, Indian River, Broward, Orange, Lake, Volusiathrough the Daytona Beach area, into Orlando and Seminole counties, which are located in centralCentral Florida, and southeast Florida. The bank operates full service branches within its markets,west to Okeechobee and during 2015 acquired 3 branches eliminating and closing one as part of the Grand acquisition, and during 2014 acquired 12 additional branches as part of the BANKshares acquisition.surrounding counties.   The consolidated financial statements include the accounts of Seacoast and all its majority-owned subsidiaries but exclude trusts created for the issuance of trust preferred securities. In consolidation, all significant intercompany accounts and transactions are eliminated.   The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America, and they conform to general practices within the applicable industries. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Use of Estimates: The preparation of these financial statements requires the use of certain estimates by management in determining the Company's assets, liabilities, revenues and expenses, and contingent liabilities. Specific areas, among others, requiring the application of management’s estimates include determination of the allowance for loan losses, the valuation of investment securities available for sale, valuation of impaired loans, contingent liabilities, valuation of other real estate owned, and valuation of deferred taxes valuation allowance. Actual results could differ from those estimates.   Cash and Cash Equivalents: Cash and cash equivalents include cash and due from banks and interest-bearing bank balances and federal funds sold and securities purchased under resale agreements.balances. Cash and cash equivalents have original maturities of three months or less, and accordingly, the carrying amount of these instruments is deemed to be a reasonable estimate of fair value.   Securities Purchased and Sold Agreements:Securities purchased under resale agreements and securities sold under repurchase agreements are generally accounted for as collateralized financing transactions and are recorded at the amount at which the securities were acquired or sold plus accrued interest. It is the Company’s policy to take possession of securities purchased under resale agreements, which are primarily U.S. Government and Government agency securities. The fair value of securities purchased and sold is monitored and collateral is obtained from or returned to the counterparty when appropriate. Use of Estimates: The preparation of these financial statements requires the use of certain estimates by management in determining the Company's assets, liabilities, revenues and expenses, and contingent liabilities. Specific areas, among others, requiring the application of management’s estimates include determination of the allowance for loan losses, the valuation of investment securities available for sale, fair value of impaired loans, contingent liabilities, other real estate owned, and valuation of deferred tax valuation allowance. Actual results could differ from those estimates.    Securities: Securities are classified at date of purchase as trading, available for sale or held to maturity. Securities that may be sold as part of the Company's asset/liability management or in response to, or in anticipation of changes in interest rates and resulting prepayment risk, or for other factors are stated at fair value with unrealized gains or losses reflected as a component of shareholders' equity net of tax or included in noninterest income as appropriate. The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flow analyses, using observable market data where available. Debt securities that the Company has the ability and intent to hold to maturity are carried at amortized cost.   Realized gains and losses, including other than temporary impairments, are included in noninterest income as investment securities gains (losses). Interest and dividends on securities, including amortization of premiums and accretion of discounts, is recognized in interest income on an accrual basis using the interest method. The Company anticipates prepayments of principal in the calculation of the effective yield for collateralized mortgage obligations and mortgage backed securities by obtaining estimates of prepayments from independent third parties. The adjusted cost of each specific security sold is used to compute realized gains or losses on the sale of securities on a trade date basis.   On a quarterly basis, the Company makes an assessment to determine whether there have been any events or economic circumstances to indicate that a security is impaired on an other-than-temporary basis. Management considers many factors including the length of time the security has had a fair value less than the cost basis; our intent and ability to hold the security for a period of time sufficient for a recovery in value; recent events specific to the issuer or industry; and for debt securities, external credit ratings and recent downgrades. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. Securities on which there is an unrealized loss that is deemed to be other-than temporary are written down to fair value with the write-down recorded as a realized loss. For securities which are transferred into held to maturity from available for sale the unrealized gain or loss at the date of transfer is reported as a component of shareholders’ equity and is amortized over the remaining life as an adjustment of yield using the interest method.   Seacoast National is a member of the Federal Home Loan Bank system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.   Loans: Loans are recognized at the principal amount outstanding, net of unearned income, purchased discounts and amounts charged off. Unearned income includes discounts, premiums and deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the effective interest rate method. Interest income is recognized on an accrual basis.   Fees received for providing loan commitments and letters of credit that may result in loans are typically deferred and amortized to interest income over the life of the related loan, beginning with the initial borrowing. Fees on commitments and letters of credit are amortized to noninterest income as banking fees and commissions on a straight-line basis over the commitment period when funding is not expected.   Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are considered held for investment.   The Company accounts for loans in accordance with ASC topicstopic 310 and 470, when due to a deterioration in a borrower’sborrower is experiencing financial position,difficulties and the Company grants concessions that would not otherwise be considered. Troubled debt restructured (TDR) loans are tested for impairment and placed in nonaccrual status. If borrowers perform pursuant to the modified loan terms for at least six months and the remaining loan balances are considered collectible, the loans are returned to accrual status. When the Company modifies the terms of an existing loan that is not considered a troubled debt restructuring, the Company follows the provisions of ASC 310 “Creditor’s Accounting for a Modification or Exchange of Debt Instruments.”310.20.   A loan is considered to be impaired when based on current information;information, it is probable the Company will not receive all amounts due in accordance with the contractual terms of a loan agreement. The fair value is measured based on either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. A loan is also considered impaired if its terms are modified in a troubled debt restructuring. When the ultimate collectibility of the principal balance of an impaired loan is in doubt, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income, to the extent any interest has been forgone, and then they are recorded as recoveries of any amounts previously charged off.   The accrual of interest is generally discontinued on loans, and leases, except consumer loans, that become 90 days past due as to principal or interest unless collectionwell-secured and in process of both principal and interest is assured by way of collateralization, guarantees or other security. Generally, loans past due 90 days or more are placed on nonaccrual status regardless of security.collection. When interest accruals are discontinued, unpaid interest is reversed against interest income. Consumer loans that become 120 days past due are generally charged off. When borrowers demonstrate over an extended period the ability to repay a loan in accordance with the contractual terms of a loan classified as nonaccrual, the loan is returned to accrual status. Interest income on nonaccrual loans is either recorded using the cash basis method of accounting or recognized after the principal has been reduced to zero, depending on the type of loan.   Purchased loans:As a part of business acquisitions, the Company acquires loans, some of which have shown evidence of credit deterioration since origination and others without specifically identified credit deficiency factors. These acquired loans were recorded at the acquisition date fair value, and after acquisition, any losses are recognized through the allowance for loan losses. Accordingly, the associated allowance for credit losses related to these loans is not carried over at the acquisition date.   These loans fall into two groups: purchased credit-impaired (“PCI”) and purchased unimpaired loans (“PUL”). The Company estimates the amount and timing of expected cash flows for each PUL and the expected cash flows in excess of the amount paid is recorded as interest income over the remaining life of the loan. The PUL’s were evaluated to determine estimated fair values as of the acquisition date. Based on management’s estimate of fair value, each PUL was assigned a discount credit mark. For PCI loans the Company updates the amount of loan principal and interest cash flows expected to be collected, incorporating assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of current market conditions on a quarterly basis. Probable decreases in expected loan principal cash flows trigger the recognition of impairment, which is then measured as the present value of the expected principal loss plus any related foregone interest cash flows discounted at the loan’s effective interest rate. Impairments that occur after the acquisition date are recognized through the provision for loan losses. Probable and significant increases in expected principal cash flows would first reverse any previously recorded allowance for loan losses; any remaining increases are recognized prospectively as interest income. The impacts of (i) prepayments, (ii) changes in variable interest rates, and (iii) any other changes in the timing of expected cash flows are recognized prospectively as adjustments to interest income. Disposals of loans, which may include sales of loans, receipt of payments in full by the borrower, or foreclosure, result in removal of the loan from the purchased credit impaired portfolio. In contrast, PUL’s are evaluated using the same procedures as used for the Company’s non-purchased loan portfolio.   Derivatives Used for Risk Management: The Company may designate aenters into derivative as either a hedgecontracts with customers who request such services, and into offsetting contracts with substantially matching terms with third parties to minimize the risks involved with these types of the fair value of a recognized fixed rate asset or liability or an unrecognized firm commitment (“fair value” hedge), a hedge of a forecasted transaction or of the variability of future cash flows of a floating rate asset or liability (“cash flow” hedge). All derivatives are recorded as other assets or other liabilities on the balance sheet at their respective fair values with unrealized gains and losses recorded either in other comprehensive income or in the results of operations, depending on the purpose for which the derivative is held. Derivatives that do not meet the criteria for designation as a hedge at inception, or fail to meet the criteria thereafter, are carried at fair value with unrealized gains and losses recorded in the results of operations. To the extent of the effectiveness of a cash flow hedge, changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge are recorded in other comprehensive income. The net periodic interest settlement on derivatives is treated as an adjustment to the interest income or interest expense of the hedged assets or liabilities. At inception of a hedge transaction, the Company formally documents the hedge relationship and the risk management objective and strategy for undertaking the hedge. This process includes identification of the hedging instrument, hedged item, risk being hedged and the methodology for measuring ineffectiveness. In addition, the Company assesses both at the inception of the hedge and on an ongoing quarterly basis, whether the derivative used in the hedging transaction has been highly effective in offsetting changes in fair value or cash flows of the hedged item, and whether the derivative as a hedging instrument is no longer appropriate. The Company discontinues hedge accounting prospectively when either it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; the derivative expires or is sold, terminated or exercised; the derivative is de-designated because it is unlikely that a forecasted transaction will occur; or management determines that designation of the derivative as a hedging instrument is no longer appropriate. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted as an adjustment to yield over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transaction are still expected to occur, unrealized gains and losses that are accumulated in other comprehensive income are included in the results of operations in the same period when the results of operations are also affected by the hedged cash flow. They are recognized in the results of operations immediately if the cash flow hedge was discontinued because a forecasted transaction is not expected to occur.transactions.   Certain commitments to sell loans are derivatives. These commitments are recorded as a freestanding derivative and classified as an other asset or liability.   Loans Held for Sale: Loans are classified as held for sale based on management’s intent to sell the loans, either as part of a core business strategy or related to a risk mitigation strategy. Loans held for sale and any related unfunded lending commitments are recorded at fair value, if elected, or the lower of cost (which is the carrying amount net of deferred fees and costs and applicable allowance for loan losses and reserve for unfunded lending commitments) or fair market value less costs to sell. Adjustments to reflect unrealized gains and losses resulting from changes in fair value and realized gains and losses upon ultimate sale of the loans are classified as noninterest income in the Consolidated Statements of Income. At the time of the transfer to loans held for sale, if the fair market value is less than cost, the difference is recorded as additional provision for credit losses in the results of operations. Fair market value is determined based on quoted market prices for the same or similar loans, outstanding investor commitments or discounted cash flow analyses using market assumptions.   Fair market value for substantially all the loans in loans held for sale were obtained by reference to prices for the same or similar loans from recent transactions. For a relationship that includes an unfunded lending commitment, the cost basis is the outstanding balance of the loan net of the allowance for loan losses and net of any reserve for unfunded lending commitments. This cost basis is compared to the fair market value of the entire relationship including the unfunded lending commitment.   Individual loans or pools of loans are transferred from the loan portfolio to loans held for sale when the intent to hold the loans has changed and there is a plan to sell the loans within a reasonable period of time. Loans held for sale are reviewed quarterly. Subsequent declines or recoveries of previous declines in the fair market value of loans held for sale are recorded in other fee income in the results of operations. Fair market value changes occur due to changes in interest rates, the borrower’s credit, the secondary loan market and the market for a borrower’s debt. If an unfunded lending commitment expires before a sale occurs, the reserve associated with the unfunded lending commitment is recognized as a credit to other fee income in the results of operations. Fair Value Measurements:The Company measures or monitors many of its assets and liabilities on a fair value basis. Certain assets and liabilities are measured on a recurring basis. Examples of these include derivative instruments, available for sale and trading securities, loans held for sale, impaired loans, OREO, and long-term debt. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include certain loans held for sale accounted for on a lower of cost or fair value, mortgage servicing rights, goodwill, and long-lived assets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value.   The Company applied the following fair value hierarchy:   Level 1 – Assets or liabilities for which the identical item is traded on an active exchange, such as publicly-traded instruments or futures contracts.   Level 2 – Assets and liabilities valued based on observable market data for similar instruments.   Level 3 – Assets and liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require.   When determining the fair value measurements for assets and liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to market observable data for similar assets and liabilities. Nevertheless, certain assets and liabilities are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.   Other Real Estate Owned: Other real estate owned (“OREO”) consists primarily of real estate acquired in lieu of unpaid loan balances. These assets are carried at an amount equal to the loan balance prior to foreclosure plus costs incurred for improvements to the property, but no more than the estimated fair value of the property less estimated selling costs. Any valuation adjustments required at the date of transfer are charged to the allowance for loan losses. Subsequently, unrealized losses and realized gains and losses are included in other noninterest expense. Operating results from OREO are recorded in other noninterest expense.   OREO may include bank premises no longer utilized in the course of our business (closed branches) that are initially recorded at carrying value or fair value (whichever is lower), less costs to sell. If fair value of the premises is less than amortized book value, a write down is recorded through noninterest expense. Costs to operate closed facilitiesthe facility are expensed.   Bank Premises and Equipment: Bank premises and equipment are stated at cost, less accumulated depreciation and amortization. Premises and equipment include certain costs associated with the acquisition of leasehold improvements. Depreciation and amortization are recognized principally by the straight-line method, over the estimated useful lives as follows: buildings - 25-40 years, leasehold improvements - 5-25 years, furniture and equipment - 3-12 years. Leasehold improvements typically amortize over the shorter of lease terms or estimated useful life. Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.   Intangible Assets:Mergers and acquisitions are accounted for using the acquisition method of accounting, which requires that acquired assets and liabilities are recorded at their fair values. This often involves estimates based on third party valuations or internal valuations based on discounted cash flow analyses or other valuation techniques, all of which are inherently subjective. Goodwill can be adjusted for up to one year from the acquisition date as provisional amounts recognized at the acquisition date are updated when new information is obtained aboutfrom facts and circumstances that existed as of the acquisition date that, if known, would have affected amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The Company adopted Accounting Standards Update No. 2015-16 under ASC Topic 850 during the fourth quarter of 2015, which simplifies the accounting for adjustments made to provisional amounts recognized in a business combination, eliminating the requirements to retrospectively account for these adjustments. See Note TS – Business Combinations for related disclosures. The amortization of identified intangible assets is based upon the estimated economic benefits to be received, which is also subjective.   Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected October 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet. The core deposit intangibles are intangible assets arising from either whole bank acquisitions or branch acquisitions. They are initially measured at fair value and then amortized over a ten-year periodperiods ranging from six to eight years on a straight line basis. The Company periodically evaluates whether events and circumstances have occurred that may affect the estimated useful lives or the recoverability of the remaining balance of the intangible assets.   Bank owned life insurance (BOLI):The Company, through its subsidiary bank, has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.   Revenue Recognition: Revenue is recognized when the earnings process is complete and collectibility is assured. Brokerage fees and commissions are recognized on a trade date basis. Asset management fees, measured by assets at a particular date, are accrued as earned. Commission expenses are recorded when the related revenue is recognized.   Allowance for Loan Losses and Reserve for Unfunded Lending Commitments:The Company has developed policies and procedures for assessing the adequacy of the allowance for loan losses and reserve for unfunded lending commitments that reflect the evaluation of credit risk after careful consideration of all available information. Where appropriate this assessment includes monitoring qualitative and quantitative trends including changes in levels of past due, criticized and nonperforming loans. In developing this assessment, the Company must necessarily rely on estimates and exercise judgment regarding matters where the ultimate outcome is unknown such as economic factors, developments affecting companies in specific industries and issues with respect to single borrowers. Depending on changes in circumstances, future assessments of credit risk may yield materially different results, which may result in an increase or a decrease in the allowance for loan losses.   The allowance for loan losses and reserve for unfunded lending commitments is maintained at a level the Company believes is adequate to absorb probable losses incurred in the loan portfolio and unfunded lending commitments as of the date of the consolidated financial statements. The Company employs a variety of modeling and estimation tools in developing the appropriate allowance for loan losses and reserve for unfunded lending commitments. The allowance for loan losses and reserve for unfunded lending commitments consists of formula-based components for both commercial and consumer loans, allowance for impaired commercial loans and allowance related to additional factors that are believed indicative of current trends and business cycle issues.   If necessary, a specific allowance is established for individually evaluated impaired loans. The specific allowance established for these loans is based on a thorough analysis of the most probable source of repayment, including the present value of the loan’s expected future cash flows, the loan’s estimated market value, or the estimated fair value of the underlying collateral depending on the most likely source of repayment. General allowances are established for loans grouped into pools based on similar characteristics. In this process, general allowance factors are based on an analysis of historical charge-off experience, portfolio trends, regional and national economic conditions, and expected loss given default derived from the Company’s internal risk rating process.   The Company monitors qualitative and quantitative trends in the loan portfolio, including changes in the levels of past due, criticized and nonperforming loans. The distribution of the allowance for loan losses and reserve for unfunded lending commitments between the various components does not diminish the fact that the entire allowance for loan losses and reserve for unfunded lending commitments is available to absorb credit losses in the loan portfolio. The principal focus is, therefore, on the adequacy of the total allowance for loan losses and reserve for unfunded lending commitments.   In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s bank subsidiary’s allowance for loan losses and reserve for unfunded lending commitments. These agencies may require such subsidiaries to recognize changes to the allowance for loan losses and reserve for unfunded lending commitments based on their judgments about information available to them at the time of their examination.   Income Taxes: The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their related tax bases and are measured using the enacted tax rates and laws that are in effect. A valuation allowance is recognized for a deferred tax asset if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The effect on deferred tax assets and liabilities of a change in rates is recognized as income or expense in the period in which the change occurs. See Note L, Income Taxes for related disclosures.   Earnings per Share:Basic earnings per share are computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are based on the weighted-average number of common shares outstanding during each period, plus common share equivalents calculated for stock options and performance restricted stock outstanding using the treasury stock method. Stock-Based Compensation:The stock option plans are accounted for under ASC Topic 718 and the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with market assumptions. This amount is amortized on a straight-line basis over the vesting period, generally five years. See Note J, Employee Benefit and Stock Compensation for related disclosures. For restricted stock awards, which generally vest based on continued service with the Company, the deferred compensation is measured as the fair value of the shares on the date of grant, and the deferred compensation is amortized as salaries and employee benefits in accordance with the applicable vesting schedule, generally straight-line over five years. Some shares vest based upon the Company achieving certain performance goals and salary amortization expense is based on an estimate of the most likely results on a straight line basis. Forfeitures are estimated at the date of grant based on historical rates, and updated as necessary. See Note J, Employee Benefit and Stock Compensation for related disclosures. Note B Recently Issued Accounting Standards, Not Adopted at December 31, 20152016   The following provides a brief description of accounting standards that have been issued but are not yet adopted that could have a material effect on the Company's financial statements:   TheIn January 2017, the Financial Accounting Standards Board (FASB)(“FASB”) issued Accounting Standards Update (ASU) No. 2014-09.“ASU” 2017-04, eliminating Step 2 from the goodwill impairment test. Under the amendments to the guidance, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized, however, should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.  The guidance is effective for annual periods or any interim goodwill impairment tests beginning after December 15, 2019 using a prospective transition method. Early adoption is permitted. Adoption of this standard is being evaluated as to its effect on the Company’s operating results or financial condition. In August and November 2016, The FASB issued final guidance via ASU 2016-15 and ASU 2016-18, which address classification of certain cash receipts and cash payments, including changes in restricted cash, in the statement of cash flows. The guidance may change how an entity classifies certain cash receipts and cash payments on its statement of cash flows, the purpose being to reduce diversity in practice. The Company is a converged standard betweenevaluating the impact of ASU 2016-15 and 2016-18, which will generally be applied retrospectively for fiscal years beginning after December 15, 2017. In June 2016, the FASB issued ASU 2016-13 for “Measurement of Credit Losses on Financial Instruments” to replace the incurred loss impairment methodology with a current expected credit loss methodology for financial instruments measured at amortized cost and other commitments to extend credit. Expected credit losses reflect losses over the IASB that provides a single comprehensive revenue recognition modelremaining contractual life of an asset, considering the effect of voluntary prepayments and considering available information about the collectability of cash flows, including information about past events, current conditions, and supportable forecasts. The resultant allowance for all contracts with customers across transactions and industries. The primary objectivecredit losses reflects the portion of the ASU is revenue recognitionamortized cost basis that represents the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expectsdoes not expect to be entitled in exchangecollect. Additional quantitative and qualitative disclosures are required upon adoption. The Company is assessing current loan loss estimation models and processes to determine the need for those goods or services. The ASUchanges as part of its evaluation of the impact of this new accounting guidance. Adoption is effective onrequired January 1, 2018,2020, with early adoption permitted January 1, 2017.2019. In March 2016, under ASU 2016-04, “Liabilities – Extinguishments of Liabilities, Breakage for Certain Prepaid Stored-Value Products” the FASB intends for entities to recognize liabilities for the sale of prepaid stored value products redeemable for goods, services, or cash. This guidance aligns recognition of breakage for these liabilities in a way consistent with how gift card breakage will be recognized. The Company is currently assessingevaluating the impact of adoption of ASU 2014-09.adopting the new guidance on the consolidated financial statements. Effective date for implementation is for annual periods after December 15, 2018.   In February 2016, the FASB amended existing guidance related to the recognition of lease assets and lease liabilities on the balance sheet and disclosures on key information about leasing arrangements, under ASU 2016-02. It will be necessary for all parties to classify leases to determine how to recognize lease-related revenue and expense. The amendment requires lessees to put most leases on their balance sheet and record expenses to the income statement. Changes in the guidance eliminate real estate centric provisions for sale-leaseback transactions, including initial direct costs and lease execution costs for all entities. For lessors, the new FASB standard modifies classification criteria and accounting for sales type and direct financing leases. The Company is currently evaluating the impact of adopting the new guidance on the consolidated financial statements. The amended accounting is applicable to periods after December 15, 2018 and interim periods within that year. In January 2016, the FASB issued ASU No. 2016-01.2016-01 for “Recognition and Measurement of Financial Assets and Liabilities.” The ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The update requires: a) equity investments (except those accounted for under the equity method of accounting) to be measured at fair value and recognized in net income, b) simplifies impairment assessments of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, and if impaired requires measurement of the investment at fair value, c) eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value d) requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, e) requires an entity to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, f) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements, , g) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The ASU is effective for fiscal years beginning after December 15, 2017, and must be adopted on a modified retrospective basis, including interim periods within those fiscal years. The adoption of this standardASU 2016-01 is not expected to have a material effectbeing evaluated for its impact on the Company’s operating results orand financial condition. In May 2014, the FASB issued ASU 2014-09, “Revenue Recognition – Revenue from Contracts with Customers.” The ASU is a converged standard between the FASB and the IASB that provides a single comprehensive revenue recognition model for all contracts with customers across transactions and industries. The primary objective of the ASU is revenue recognition that represents the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue associated with loans and securities is not in the scope of the new guidance, and the Company’s evaluation and implementation effort for contracts within the scope of the standard is ongoing. The Company plans to adopt the new guidance on January 1, 2018. Note C Cash, Dividend and Loan Restrictions   In the normal course of business, the Company and Seacoast NationalBank enter into agreements, or are subject to regulatory agreements that result in cash, debt and dividend restrictions. A summary of the most restrictive items follows:   Seacoast NationalBank may be required to maintain average reserve balances with the Federal Reserve Bank; however no reserve balances were necessary for 2016 and 2015.   Under Federal Reserve regulation, Seacoast NationalBank is limited as to the amount it may loan to its affiliates, including the Company, unless such loans are collateralized by specified obligations. At December 31, 2015,2016, the maximum amount available for transfer from Seacoast NationalBank to the Company in the form of loans approximated $43.8 million.$52.0 million, if the Company has sufficient acceptable collateral.   The approval of the Office of the Comptroller of the Currency (“OCC”) is required if the total of all dividends declared by a national bank in any calendar year exceeds the bank's profits, as defined, for that year combined with its retained net profits for the preceding two calendar years. Under this restriction Seacoast National can distribute dividends of approximately $81.4$61.0 million to the Company as of December 31, 2015,2016, without prior approval of the OCC. Note D Securities   The amortized cost and fair value of securities available for sale and held for investmentto maturity at December 31, 20152016 and December 31, 20142015 are summarized as follows:     December 31, 2015     December 31, 2016     Gross   Gross   Gross             Gross   Gross           Amortized   Unrealized   Unrealized   Fair     Amortized   Unrealized   Unrealized   Fair     Cost     Gains     Losses     Value     Cost     Gains     Losses     Value     (In thousands)     (In thousands)   SECURITIES AVAILABLE FOR SALE                                                                 U.S. Treasury securities and obligations of U.S. Government Sponsored Entities   $ 3,833   $ 78     $ 0     $ 3,911     $ 12,073     $ 255     $ 0     $ 12,328   Mortgage-backed securities of U.S. Government Sponsored Entities     192,224       847       (1,322 )     191,749       287,726       585       (4,823 )     283,488   Collateralized mortgage obligations of U.S. Government Sponsored Entities     242,620     470       (4,900 )     238,190       238,805       314       (5,065 )     234,054   Private mortgage-backed securities     32,558     0       (766 )     31,792   Commercial mortgage backed securities of U.S. Government Sponsored Entities     22,351       222       (28 )     22,545   Private mortgage backed securities     32,780       0       (791 )     31,989   Private collateralized mortgage obligations     77,965       700     (708 )     77,957       67,542       563       (816 )     67,289   Collateralized loan obligations     124,477     0       (1,894 )     122,583       124,716       838       (665 )     124,889   Obligations of state and political subdivisions     39,119       882       (110 )     39,891       63,161       622       (895 )     62,888   Corporate and other debt securities     44,652       37       (416 )     44,273       74,121       257       (517 )     73,861   Private commercial mortgage backed securities     41,127       13       (720 )     40,420       37,534       111       (473 )     37,172     $ 798,575     $ 3,027     $ (10,836 )   $ 790,766     $ 960,809     $ 3,767     $ (14,073 )   $ 950,503                                                                   SECURITIES HELD FOR INVESTMENT                                 SECURITIES HELD TO MATURITY                                 Mortgage-backed securities of U.S. Government Sponsored Entities   $ 64,993   $ 574     $ (16 )   $ 65,551     $ 159,941     $ 704     $ (1,243 )   $ 159,402   Collateralized mortgage obligations of U.S. Government Sponsored Entities     89,265     581       (406 )     89,440       147,208       386       (2,630 )     144,964   Commercial mortgage backed securities of U.S. Government Sponsored Entities     17,375       233       (74 )     17,534   Collateralized loan obligations     41,300       0       (1,360 )     39,940       41,547       430       (314 )     41,663   Private collateralized mortgage obligations     7,967       0       (85 )     7,882   Private mortgage backed securities     6,427       0       (109 )     6,318     $ 203,525     $ 1,155     $ (1,867 )   $ 202,813     $ 372,498   $ 1,753   $ (4,370 )   $ 369,881       December 31, 2014     December 31, 2015     Gross   Gross   Gross             Gross   Gross           Amortized   Unrealized   Unrealized   Fair     Amortized   Unrealized   Unrealized   Fair     Cost     Gains     Losses     Value     Cost     Gains     Losses     Value     (In thousands)     (In thousands)   SECURITIES AVAILABLE FOR SALE                                                                 U.S. Treasury securities and obligations of U.S. Government Sponsored Entities   $ 3,876   $ 23     $ 0     $ 3,899     $ 3,833   $ 78     $ 0     $ 3,911   Mortgage-backed securities of U.S. Government Sponsored Entities     123,981       1,501       (423 )     125,059       192,224       847       (1,322 )     191,749   Collateralized mortgage obligations of U.S. Government Sponsored Entities     352,483     1,075       (6,077 )     347,481       242,620     470       (4,900 )     238,190   Private mortgage-backed securities     29,967     291       0       30,258       32,558     0       (766 )     31,792   Private collateralized mortgage obligations     85,175       688     (728 )     85,135       77,965       700     (708 )     77,957   Collateralized loan obligations     127,397     0       (2,172 )     125,225       124,477     0       (1,894 )     122,583   Obligations of state and political subdivisions     23,511       810       (3 )     24,318       39,119       882       (110 )     39,891   Corporate and other debt securities     44,652       37       (416 )     44,273   Private commercial mortgage backed securities     41,127       13       (720 )     40,420     $ 746,390     $ 4,388     $ (9,403 )   $ 741,375     $ 798,575     $ 3,027     $ (10,836 )   $ 790,766                                                                   SECURITIES HELD FOR INVESTMENT                                 SECURITIES HELD TO MATURITY                                 Mortgage-backed securities of U.S. Government Sponsored Entities   $ 67,535   $ 812     $ 0     $ 68,347     $ 64,993   $ 574     $ (16 )   $ 65,551   Collateralized mortgage obligations of U.S. Government Sponsored Entities     114,541     695       (280 )     114,956       89,265     581       (406 )     89,440   Collateralized loan obligations     25,828     0       (343 )     25,485       41,300       0       (1,360 )     39,940   Private mortgage backed securities     7,967       0       (85 )     7,882     $ 207,904     $ 1,507     $ (623 )   $ 208,788     $ 203,525     $ 1,155     $ (1,867 )   $ 202,813     Proceeds from sales of securities during 2016 were $40.4 million with gross gains of $454,000 and gross losses of $86,000. Proceeds from sales of securities during 2015 were $60.3 million with gross gains of $633,000 and gross losses of $472,000. Proceeds from sales of securities during 2014 were $21.5 million with gross gains of $456,000 and no gross losses. Proceeds from sales of securities during 2013 were $67.3 million with gross gains of $792,000 and gross losses of $373,000.   On May 31,In 2014, management identifiedapproximately $158.8 million of investment securities available for sale andwere transferred theminto held to held for investment.maturity. The unrealized holding losses at the date of transfer totaled $3.1 million. Formillion for the securities that were transferred into the held for investmentto maturity category from the available for sale, category, the unrealized holding losses at the date of transferstransfer will continue to be reported in other comprehensive income, and will be amortized over the remaining life of the secuirutythese security as an adjustment of yield consistent with the amortization of a discount. The amortization of unrealized holding losses reported in equity will offset the effect or interest income of the amortization of the discount. As of December 31, 2015 and 2014,2016, the remaining unrealized holding losses totaled $2.3 million and $2.8 million, respectively.$1.8 million.   Securities at December 31, 2015,2016 with a carrying and fair value of $171.9$193.8 million and $172.8 million, respectively, were pledged as collateral for United States Treasury deposits, other public deposits and trust deposits. Securities with a carrying and fair value of $172.0 million$204.2 were pledged as collateral for repurchase agreements.   The amortized cost and fair value of securities at December 31, 2015,2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.     Held to Maturity     Available for Sale       Amortized     Fair     Amortized     Fair       Cost     Value     Cost     Value       (In thousands)   Due in less than one year   $ 0     $ 0     $ 8,848     $ 9,044   Due after one year through five years     0       0       83,308       83,154   Due after five years through ten years     41,547       41,663       139,611       140,167   Due after ten years     0       0       31,415       30,709         41,547       41,663       263,182       263,074   Mortgage-backed securities of U.S. Government Sponsored Entities     159,941       159,402       287,726       283,488   Collateralized mortgage obligations of U.S. Government Sponsored Entities     147,208       144,964       238,805       234,054   Commercial mortgage backed securities of U.S. Government Sponsored Entities     17,375       17,534       22,351       22,545   Private mortgage-backed securities     0       0       32,780       31,989   Private collateralized mortgage obligations     6,427       6,318       67,542       67,289   Other debt securities     0       0       10,889       10,892   Private commercial mortgage backed securities     0       0       37,534       37,172       $ 372,498     $ 369,881     $ 960,809     $ 950,503         Held for Investment     Available for Sale       Amortized     Fair     Amortized     Fair       Cost     Value     Cost     Value       (In thousands)   Due in less than one year   $ 0     $ 0     $ 225     $ 225   Due after one year through five years     0       0       71,031       70,387   Due after five years through ten years     41,300       39,940       118,429       117,480   Due after ten years     0       0       13,632       13,826         41,300       39,940       203,317       201,918   Mortgage-backed securities of U.S. Government Sponsored Entities     64,993       65,551       192,224       191,749   Collateralized mortgage obligations of U.S. Government Sponsored Entities     89,265       89,440       242,620       238,190   Private mortgage-backed securities     0       0       32,558       31,792   Private collateralized mortgage obligations     7,967       7,882       77,965       77,957   Other debt securities     0       0       8,764       8,740   Private commercial mortgage backed securities     0       0       41,127       40,420       $ 203,525     $ 202,813     $ 798,575     $ 790,766   The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flows analyses, using observable market data where available. The tables below indicate the amount of securities with unrealized losses and period of time for which these losses were outstanding at December 31, 20152016 and December 31, 2014,2015, respectively.     December 31, 2015     December 31, 2016     Less than 12 months     12 months or longer     Total     Less than 12 months     12 months or longer     Total     Fair   Unrealized   Fair   Unrealized   Fair   Unrealized     Fair   Unrealized   Fair   Unrealized   Fair     Unrealized     Value   Losses   Value   Losses   Value   Losses     Value   Losses   Value   Losses   Value     Losses     (In thousands)     (In thousands)   Mortgage-backed securities of U.S. Government Sponsored Entities   $ 112,236     $ (1,082 )   $ 14,508     $ (256 )   $ 126,744     $ (1,338 )   $ 327,759     $ (5,991 )   $ 5,387     $ (75 )   $ 333,146     $ (6,066 ) Collateralized mortgage obligations of U.S. Government Sponsored Entities     97,512       (973 )     147,266       (4,333 )     244,778       (5,306 )     234,175       (5,599 )     58,912       (2,096 )     293,087       (7,695 ) Private mortgage-backed securities     31,792       (766 )     0       0       31,792       (766 ) Commercial mortgage backed securities of U.S. Government Sponsored Entities     7,934       (102 )     0       0       7,934       (102 ) Private mortgage backed securities     0       0       36,848       (900 )     36,848       (900 ) Private collateralized mortgage obligations     19,939       (321 )     31,533       (472 )     51,472       (793 )     1,460       0       38,417       (816 )     39,877       (816 ) Collateralized loan obligations     101,601       (1,642 )     60,922       (1,612 )     162,523       (3,254 )     8,152       (41 )     51,694       (938 )     59,846       (979 ) Obligations of state and political subdivisions     11,570       (110 )     0       0       11,570       (110 )     39,321       (895 )     0       0       39,321       (895 ) Corporate and other debt securities     31,342       (416 )     0       0       31,342       (416 )     33,008       (517 )     0       0       33,008       (517 ) Private commercical mortgage-backed securities     37,838       (720 )     0       0       37,838       (720 ) Private commercial mortgage backed securities     12,667       (306 )     7,139       (167 )     19,806       (473 ) Total temporarily impaired securities   $ 443,830     $ (6,030 )   $ 254,229     $ (6,673 )   $ 698,059     $ (12,703 )   $ 664,476     $ (13,451 )   $ 198,397     $ (4,992 )   $ 862,873     $ (18,443 )     December 31, 2014     December 31, 2015     Less than 12 months     12 months or longer     Total     Less than 12 months     12 months or longer     Total     Fair   Unrealized   Fair   Unrealized   Fair   Unrealized     Fair   Unrealized   Fair   Unrealized   Fair   Unrealized     Value   Losses   Value   Losses   Value   Losses     Value   Losses   Value   Losses   Value   Losses     (In thousands)     (In thousands)   U.S. Treasury securities and obligations of U.S. Government Sponsored Entities   $ 100     $ 0     $ 0     $ 0     $ 100     $ 0 Mortgage-backed securities of U.S. Government Sponsored Entities     36,890       (153 )     21,640       (271 )     58,530       (424 )   $ 112,236     $ (1,082 )   $ 14,508     $ (256 )   $ 126,744     $ (1,338 ) Collateralized mortgage obligations of U.S. Government Sponsored Entities     100,148       (833 )     170,400       (5,523 )     270,548       (6,356 )     97,512       (973 )     147,266       (4,333 )     244,778       (5,306 ) Private mortgage-backed securities     31,792       (766 )     0       0       31,792       (766 ) Private collateralized mortgage obligations     61,554       (914 )     10,091       (157 )     71,645       (1,071 )     19,939       (321 )     31,533       (472 )     51,472       (793 ) Collateralized loan obligations     100,714       (1,769 )     24,511       (403 )     125,225       (2,172 )     101,601       (1,642 )     60,922       (1,612 )     162,523       (3,254 ) Obligations of state and political subdivisions     1,734       (3 )     0       0       1,734       (3 )     11,570       (110 )     0       0       11,570       (110 ) Corporate and other debt securities     31,342       (416 )     0       0       31,342       (416 ) Private commercial mortgage-backed securities     37,838       (720 )     0       0       37,838       (720 ) Total temporarily impaired securities   $ 301,140     $ (3,672 )   $ 226,642     $ (6,354 )   $ 527,782     $ (10,026 )   $ 443,830     $ (6,030 )   $ 254,229     $ (6,673 )   $ 698,059     $ (12,703 )   The two tables above include securities held to maturity that were transferred from available for sale tointo held to maturity on May 31,in 2014. Those securities had unrealized losses of $3.1 million at the date of transfer.transfer, and at December 31, 2016, the unamortized balance was $1.8 million. The fair value of those securities in an unrealized loss position for less than 12 months at December 31, 20152016 and December 31, 20142015 is $38.9 million$22.8 and $32.3$38.9 million respectively. The unrealized losses on those securities in an unrealized loss position for less than 12 months at December 31, 20152016 and 2014December 31, 2015 is $0.4 million and $0.3$0.4 million, respectively. None of these securities were in an unrealized loss position for more than twelve months at December 31, 20152016 and December 31, 2014,2015, respectively.   At December 31, 2015,2016, approximately $1.6$1.7 million of the unrealized losses pertain to private label securities secured by collateral originated in 2005 and prior.seasoned residential collateral. Their fair value is $83.3$76.7 million and is attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The collateral underlying these mortgage investments are 30- and 15-year fixed and 10/1 adjustable rate mortgage loans with low loan to values, subordination and historically have had minimal foreclosures and losses. Based on its assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.   At December 31, 2015,2016, the Company also had $6.6$13.9 million of unrealized losses on collateralized mortgage obligations and mortgage backed securities of government sponsored entities having a fair value of $371.5$634.2 million that were attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Based on its assessment of these factors , management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. At December 31, 2015, the Company also had $3.3 million of unrealized losses on collateralized loan obligations having a fair value of $162.5 that were attributable to a combination of factors, including relative changes in interest rates, spreads and interest movements since the time of purchase. Based on its assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities.   At December 31, 2015,2016, the Company also had $1.0 million of unrealized losses on collateralized loan obligations having a fair value of $59.9 million that were attributable to a combination of factors, including relative changes in interest rates since the time of purchase. Based on its assessment of these factors, management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changes in credit quality. Management believes the collateralized loan obligations provide a strong credit enhancement even under severe stress scenarios. Management expects to recover the entire amortized cost basis of these securities. At December 31, 2016, remaining securities categories hadhas unrealized losses of $1.2$1.8 million and summed to a fair value of $80.8 million, but losses have been outstanding for less than twelve months.$92.1 million. Management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest movements and not changechanges in credit quality.quality   As of December 31, 2015, management2016 the company does not intend to sell securitiesnor is it anticipated that are in unrealized loss positions and it is not more likely than not that the Company willwould be required to sell theseany of its investment securities before recovery of the amortized cost basis.that have losses. Therefore, management does not consider any investment to be other-than-temporarily impaired at December 31, 2015.2016.   Included in other assets is $16.4$35.9 million of Federal Home Loan Bank and Federal Reserve Bank stock stated at par value. At December 31, 2015,2016, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $16.4$35.9 million of cost method investment securities.   The Companycompany also holds 11,330 shares of Visa Class B stock, which following resolution of Visa litigation will be converted to Visa Class A shares (the conversion rate presently is 1.6483 shares of Class A stock for wacheach share of Class B stock) for a total of 18,675 shares of Visa Class A stock. Our ownership is related to prior ownership in Visa's network, while Visa operated as a cooperative. This ownership is recorded on our financial records at zero basis. Note E Loans   Information relating to portfolio, purchase credit impaired (“PCI”), and purchase unimpaired (“PUL”) loans at December 31 is summarized as follows:     2015     2016     Portfolio Loans   PCI Loans   PUL's   Total     Portfolio Loans   PCI Loans   PUL's   Total     (In thousands)     (In thousands)   Construction and land development   $ 97,629     $ 114     $ 11,044     $ 108,787     $ 137,480     $ 114     $ 22,522     $ 160,116   Commercial real estate     776,875       9,990       222,513       1,009,378       1,041,915       11,257       304,420       1,357,592   Residential real estate     678,131       922       44,732       723,785       784,290       684       51,813       836,787   Commerical and financial     188,013       1,083       39,421       228,517   Commercial and financial     308,731       941       60,917       370,589   Consumer     82,717       0       2,639       85,356       152,927       0       1,018       153,945   Other     507       0       0       507   Other loans     507       0       0       507   NET LOAN BALANCES (1)   $ 1,823,872     $ 12,109     $ 320,349     $ 2,156,330     $ 2,425,850     $ 12,996     $ 440,690     $ 2,879,536       2015     2014     Portfolio Loans   PCI Loans   PUL's   Total     (In thousands)     (In thousands)   Construction and land development   $ 65,896     $ 1,557     $ 19,583     $ 87,036     $ 97,629     $ 114     $ 11,044     $ 108,787   Commercial real estate     610,863       4,092       222,192       837,147       776,875       9,990       222,513       1,009,378   Residential real estate     639,428       851       46,618       686,897       678,131       922       44,732       723,785   Commerical and financial     120,763       1,312       35,321       157,396   Commercial and financial     188,013       1,083       39,421       228,517   Consumer     50,543       2       2,352       52,897       82,717       0       2,639       85,356   Other     512       0       0       512   Other loans     507       0       0       507   NET LOAN BALANCES (1)   $ 1,488,005     $ 7,814     $ 326,066     $ 1,821,885     $ 1,823,872     $ 12,109     $ 320,349     $ 2,156,330     (1) Net loan balances at December 31, 2016 and 2015 and 2014 are net ofinclude deferred costs of $7,652,000$4.4 million and $3,645,000,$7.7 million, respectively.   Purchased LoansPCI loans are accounted for pursuant to ASC Topic 310-30. The excess of cash flows expected to be collected over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loan in situations where there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The difference between the contractually required payments and the cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the nonaccretable difference. We have applied ASC Topic 310-20 accounting treatment to PULs. The unamortized credit discount mark established at acquisition on the loans has been ascribed as an accretable yield that is accreted into interest income over the estimated remaining life of the loans. The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and fair value of the loans as of the acquisition date. Contractually required principal and interest payments have been adjusted for estimated prepayments. July 17, 2015   PCI     PULs     Total       (In thousands)   Contractually required principal and interest   $ 12,552     $ 108,945     $ 121,497   Non-accretable difference     (4,249 )     0       (4,249 ) Cash flows expected to be collected     8,303       108,945       117,248   Accretable yield     (702 )     (5,254 )     (5,956 ) Total Acquired loans   $ 7,601     $ 103,691     $ 111,292   October 1, 2014   PCI     PULs     Total       (In thousands)   Contractually required principal and interest   $ 17,169     $ 367,881     $ 385,050   Non-accretable difference     (7,196 )     0       (7,196 ) Cash flows expected to be collected     9,973       367,881       377,854   Accretable yield     (1,256 )     (11,235 )     (12,491 ) Total Acquired loans   $ 8,717     $ 356,646     $ 365,363   The components of purchased loans are as follows at December 31, 20152016 and 2014:2015:     December 31, 2015   December 31, 2014     December 31, 2016   December 31, 2015     PCI   PULs   Total   PCI   PULs   Total     PCI   PULs   Total   PCI   PULs   Total     (In thousands)   (In thousands)     (In thousands)   (In thousands)   Construction and land development   $ 114     $ 11,045     $ 11,159     $ 1,557     $ 19,583     $ 21,140     $ 114     $ 22,522     $ 22,636     $ 114     $ 11,045     $ 11,159   Commercial real estate     9,990       222,513       232,503       4,092       222,192       226,284       11,257       304,420       315,677       9,990       222,513       232,503   Residential real estate     922       44,732       45,654       851       46,618       47,469       684       51,813       52,497       922       44,732       45,654   Commercial and financial     1,083       39,420       40,503       1,312       35,321       36,633       941       60,917       61,858       1,083       39,420       40,503   Consumer     0       2,639       2,639       2       2,352       2,354       0       1,018       1,018       0       2,639       2,639   Other     0       0       0       0       0       0   Carrying value of acquired loans   $ 12,109     $ 320,349     $ 332,458     $ 7,814     $ 326,066     $ 333,880     $ 12,996     $ 440,690     $ 453,686     $ 12,109     $ 320,349     $ 332,458                                                                                                   Carrying value, net of allowance of $137 for 2015 and $64 for 2014   $ 12,109     $ 320,212     $ 332,321     $ 7,750     $ 326,066     $ 333,816   Carrying value, net of allowance of $0 for 2016 and $137 for 2015   $ 12,996     $ 440,690     $ 453,686     $ 12,109     $ 320,212     $ 332,321     We adjusted our estimates of future expected losses, cash flows and renewal assumptions during the current quarter for PCI loans. The table below summarizes the changes in total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value ofaccretable yield for PCI loans during the twelve months ended December 31, 2015,2016, and the three month period ending December 31, 2014. Contractually required principal and interest payments have been adjusted2015. See Note S for estimated prepayments.information related to PCI loans acquired during the period.   Activity during the twelve month period ending December 31, 2016   12/31/2015     Additions     Deletions     Accretion     Reclassifications from nonaccretable difference     12/31/2016                       Reclassifications           (In thousands)   Accretable yield   $ 2,610     $ 2,052     $ (15 )   $ (1,734 )   $ 894     $ 3,807                                                   Carrying value   $ 12,109                                     $ 12,996   Allowance for loan losses     0                                       0   Carrying value less allowance for loan losses   $ 12,109                                     $ 12,996                       from                                                         Activity during the twelve month period ending December 31, 2015   12/31/2014   Additions   Net Deletions   Accretion   nonaccretable difference   12/31/2015     12/31/2014     Additions     Deletions     Accretion     Reclassifications from nonaccretable difference     12/31/2015               (In thousands)               (In thousands)   Contractually required principal and interest   $ 14,831     $ 12,552     $ (7,417 )   $ 0     $ 0     $ 19,966   Non-accretable difference     (5,825 )     (4,249 )     3,153       0       1,674       (5,247 ) Cash flows expected to be collected     9,006       8,303       (4,264 )     0       1,674       14,719   Accretable yield     (1,192 )     (702 )     357       601       (1,674 )     (2,610 )   $ 1,192     $ 702     $ (357 )   $ (601 )   $ 1,674     $ 2,610                                                   Carrying value of acquired loans     7,814       7,601       (3,907 )     601       0       12,109     $ 7,814                                     $ 12,109   Allowance for loan losses     (64 )                                     0       (64 )                                     0   Carrying value less allowance for loan losses   $ 7,750                                     $ 12,109     $ 7,750                                     $ 12,109                                                   Activity during the three month period ending December 31, 2014   9/30/2014     Additions     Deletions     Accretion     Reclassifications from nonaccretable difference     12/31/2014     (In thousands)   Accretable yield   $ 0     $ 1,256     $ (50 )   $ (96 )   $ 82     $ 1,192                                                   Carrying value of acquired loans   $ 0                                     $ 7,814   Allowance for loan losses     0                                       (64 ) Carrying value less allowance for loan losses   $ 0                                     $ 7,750                               Reclassifications                                     from         Activity during the three month period  ending December 31, 2014   9/30/2014     Additions     Net Deletions     Accretion     nonaccretable difference     12/31/2014                   (In thousands)               Contractually required principal and interest   $ 0     $ 17,169     $ (2,338 )   $ 0     $ 0     $ 14,831   Non-accretable difference     0       (7,196 )     1,289       0       82       (5,825 ) Cash flows expected to be collected     0       9,973       (1,049 )     0       82       9,006   Accretable yield     0       (1,256 )     50       96       (82 )     (1,192 ) Carrying value of acquired loans     0     $ 8,717     $ (999 )   $ 96     $ 0       7,814   Allowance for loan losses     0                                       (64 ) Carrying value less allowance for loan losses   $ 0                                     $ 7,750     One of the sources of the Company's business isLoans to directors and executive officers totaled $2.1 million and $4.0 million at December 31, 2016 and 2015, respectively. During 2016, new loans to directors and executive officers. The aggregate dollar amount of these loans was approximately $4,008,000 and $4,514,000 at December 31, 2015 and 2014, respectively. During 2015 new loansofficer totaling $850,000$1.2 million were made, and reductions totaled $1,356,000.$3.1 million.   At December 31, 20152016 and 20142015 loans pledged as collateral for borrowings totaled $50$415 million and $130$50 million, respectively.   Loans are made to individuals, as well as commercial and tax exempttax-exempt entities.  Specific loan terms vary as to interest rate, repayment, and collateral requirements based on the type of loan requested and the credit worthiness of the prospective borrower.    Concentrations of Credit All of theThe Company’s lending activity primarily occurs within the State of Florida, including Orlando in Central Florida and Southeast coastal counties from Brevard County in the north to Palm Beach County in the south, as well as all of the counties surrounding Lake Okeechobee in the center of the state. The Company’s loan portfolio consists of approximately one half60% commercial and commercial real estate loans and one half40% consumer and residential real estate loans.   The Company’s extension of credit is governed by the Credit Risk Policy which was established to control the quality of the Company’s loans.  These policies and procedures are reviewed and approved by the Board of Directors on a regular basis. Construction and Land Development Loans  The Company defines construction and land development loans as exposures secured by land development and construction (including 1-4 family residential construction), multi-family property, and non-farm nonresidential property where the primary or significant source of repayment is from rental income associated with that property (that is, loans for which 50 percent or more of the source of repayment comes from third party, non-affiliated rental income) or the proceeds of the sale, refinancing, or permanent financing of the property.   Commercial Real Estate Loans   The Company’s goal is to create and maintain a high quality portfolio of commercial real estate loans with customers who meet the quality and relationship profitability objectives of the Company.  Commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans.  These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property.  Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and/or property type.   Residential Real Estate Loans The Company selectively adds residential mortgage loans to its portfolio, primarily loans with adjustable rates, home equity mortgages and home equity lines. Substantially all residential originations have been underwritten to conventional loan agency standards, including loans having balances that exceed agency value limitations. The Company has never offered sub-prime, Alt A, Option ARM or any negative amortizing residential loans, programs or products, although we have originated and hold residential mortgage loans from borrowers with original or current FICO credit scores that are less than “prime.”   Commercial and Financial Loans   Commercial credit is extended primarily to small to medium sized professional firms, retail and wholesale operators and light industrial and manufacturing concerns.   Such credits typically comprise working capital loans, loans for physical asset expansion, asset acquisition and other business loans. Loans to closely held businesses will generally be guaranteed in full or for a meaningful amount by the businesses’ major owners. Commercial loans are made based primarily on the historical and projected cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.  The cash flows of borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to economic or individual performance factors.  Minimum standards and underwriting guidelines have been established for all commercial loan types.   Consumer Loans   The Company originates consumer loans including installment loans, loans for automobiles, boats, and other personal, family and household purposes. For each loan type several factors including debt to income, type of collateral and loan to collateral value, credit history and Company relationship with the borrower is considered during the underwriting process. The following tables present the contractual aging of the recorded investment in past due loans by class of loans as of December 31, 20152016 and 2014:2015:                   Accruing                         Accruing     Accruing     Greater                 Total       30-59 Days     60-89 Days     Than                 Financing   December 31, 2015   Past Due     Past Due     90 Days     Nonaccrual     Current     Receivables                   (In thousands)               Portfolio Loans                                                 Construction and land development   $ 665     $ -     $ -     $ 269     $ 96,695     $ 97,629   Commercial real estate     810       -       -       2,301       773,764       776,875   Residential real estate     141       -       -       9,941       668,049       678,131   Commerical and financial     59       -       -       -       187,954       188,013   Consumer     430       -       -       247       82,040       82,717   Other     -       -       -       -       507       507   Total   $ 2,105     $ -     $ -     $ 12,758     $ 1,809,009     $ 1,823,872                                                     Purchased Unimpaired Loans                                                 Construction and land development   $ -     $ -     $ -     $ 40     $ 11,004     $ 11,044   Commercial real estate     179       -       -       2,294       220,040       222,513   Residential real estate     66       -       -       -       44,666       44,732   Commerical and financial     39       -       -       130       39,252       39,421   Consumer     39       -       -       -       2,600       2,639   Other     -       -       -       -       -       -   Total   $ 323     $ -     $ -     $ 2,464     $ 317,562     $ 320,349                                                     Purchased Impaired Loans                                                 Construction and land development   $ -     $ -     $ -     $ -     $ 114     $ 114   Commercial real estate     132       -       -       1,816       8,042       9,990   Residential real estate     -       -       -       348       574       922   Commerical and financial     -       -       -       -       1,083       1,083   Consumer     -       -       -       -       -       -   Other     -       -       -       -       -       -   Total   $ 132     $ -     $ -     $ 2,164     $ 9,813     $ 12,109                                                     Total Loans   $ 2,560     $ -     $ -     $ 17,386     $ 2,136,384     $ 2,156,330              Accruing                           Accruing                   Accruing   Accruing   Greater               Total     Accruing   Accruing   Greater               Total     30-59 Days   60-89 Days   Than               Financing     30-59 Days   60-89 Days   Than               Financing   December 31, 2014   Past Due     Past Due     90 Days     Nonaccrual     Current     Receivables   December 31, 2016   Past Due   Past Due   90 Days   Nonaccrual   Current   Receivables               (In thousands)                                       Portfolio Loans                                                                                                 Construction and land development   $ 0     $ 0     $ 0     $ 534     $ 65,362     $ 65,896     $ 0     $ 0     $ 0     $ 438     $ 137,042     $ 137,480   Commercial real estate     764       0       0       3,457       606,642       610,863       78       171       0       1,784       1,039,882       1,041,915   Residential real estate     259       159       17       14,381       624,612       639,428       1,570       261       0       8,582       773,877       784,290   Commerical and financial     232       0       0       0       120,531       120,763       30       0       0       49       308,652       308,731   Consumer     256       25       0       191       50,071       50,543       29       59       0       170       152,669       152,927   Other     0       0       0       0       512       512       0       0       0       0       507       507   Total   $ 1,511     $ 184     $ 17     $ 18,563     $ 1,467,730     $ 1,488,005   Total Loans   $ 1,707     $ 491     $ 0     $ 11,023     $ 2,412,629     $ 2,425,850                                                                                                   Purchased Unimpaired Loans                                                 Purchased Loans                           Construction and land development   $ 303     $ 0     $ 0     $ 0     $ 19,280     $ 19,583     $ 0     $ 0     $ 0     $ 32     $ 22,490     $ 22,522   Commercial real estate     2,318       0       41       0       219,833       222,192       345       485       0       1,272       302,318       304,420   Residential real estate     142       0       39       5       46,432       46,618       153       0       0       1,262       50,398       51,813   Commerical and financial     953       0       0       0       34,368       35,321       39       328       0       197       60,353       60,917   Consumer     0       0       0       0       2,352       2,352       37       0       0       0       981       1,018   Other     0       0       0       0       0       0       0       0       0       0       0       0   Total   $ 3,716     $ 0     $ 80     $ 5     $ 322,265     $ 326,066   Total Loans   $ 574     $ 813     $ 0     $ 2,763     $ 436,540     $ 440,690                                                                                                   Purchased Impaired Loans                                                                           Construction and land development   $ 0     $ 0     $ 0     $ 1,428     $ 129     $ 1,557     $ 0     $ 0     $ 0     $ 0     $ 114     $ 114   Commercial real estate     7       359       0       733       2,993       4,092       0       0       0       4,285       6,972       11,257   Residential real estate     88       0       116       411       236       851       0       185       0       0       499       684   Commerical and financial     0       0       0       0       1,312       1,312       0       0       0       0       941       941   Consumer     0       0       0       0       2       2       0       0       0       0       0       0   Other     0       0       0       0       0       0       0       0       0       0       0       0   Total   $ 95     $ 359     $ 116     $ 2,572     $ 4,672     $ 7,814                                                   Total Loans   $ 5,322     $ 543     $ 213     $ 21,140     $ 1,794,667     $ 1,821,885     $ 0     $ 185     $ 0     $ 4,285     $ 8,526     $ 12,996       Accruing     Accruing     Greater                 Total       30-59 Days     60-89 Days     Than                 Financing   December 31, 2015   Past Due     Past Due     90 Days     Nonaccrual     Current     Receivables                                         Portfolio Loans                                                 Construction and land development   $ 665     $ 0     $ 0     $ 269     $ 96,695     $ 97,629   Commercial real estate     810       0       0       2,301       773,764       776,875   Residential real estate     141       0       0       9,941       668,049       678,131   Commerical and financial     59       0       0       0       187,954       188,013   Consumer     430       0       0       247       82,040       82,717   Other     0       0       0       0       507       507   Total Loans   $ 2,105     $ 0     $ 0     $ 12,758     $ 1,809,009     $ 1,823,872                                                     Purchased Loans                                     Construction and land development   $ 0     $ 0     $ 0     $ 40     $ 11,004     $ 11,044   Commercial real estate     179       0       0       2,294       220,040       222,513   Residential real estate     66       0       0       0       44,666       44,732   Commerical and financial     39       0       0       130       39,252       39,421   Consumer     39       0       0       0       2,600       2,639   Other     0       0       0       0       0       0   Total Loans   $ 323     $ 0     $ 0     $ 2,464     $ 317,562     $ 320,349                                                     Purchased Impaired Loans                                     Construction and land development   $ 0     $ 0     $ 0     $ 0     $ 114     $ 114   Commercial real estate     132       0       0       1,816       8,042       9,990   Residential real estate     0       0       0       348       574       922   Commerical and financial     0       0       0       0       1,083       1,083   Consumer     0       0       0       0       0       0   Other     0       0       0       0       0       0   Total Loans   $ 132     $ 0     $ 0     $ 2,164     $ 9,813     $ 12,109     Nonaccrual loans and loans past due ninety days or more were $17.4$18.1 million and $21.1$17.4 million at December 31, 20152016 and 2014,2015, respectively. The reduction in interest income associated with loans on nonaccrual status was approximately $0.7 million, $0.6 million, $1.9 million, and $1.0$1.9 million, for the years ended December 31, 2016, 2015, and 2014, and 2013, respectively. The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans.  Under the Company’s risk rating system, the Company classifies problem and potential problem loans as “Special Mention,” “Substandard,” and “Doubtful” and these loans are monitored on an ongoing basis.  Substandard loans include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.  Loans classified as substandardSubstandard may require a specific allowance. Loans classified as Doubtful, have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.  The principal balance of loans classified as doubtful are generally charged off. Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses that deserve management’s close attention are deemed to be Special Mention.  Risk ratings are updated any time the situation warrants.   Loans not meeting the criteria above are considered to be pass-rated loans and risk grades are recalculated at least annually by the loan relationship manager.  The following tables present the risk category of loans by class of loans based on the most recent analysis performed as of December 31, 20152016 and 2014:2015:     Construction               Commercial               & Land   Commercial   Residential   and             December 31, 2015   Development     Real Estate     Real Estate     Financial     Consumer     Total   December 31, 2016   Construction & Land Development   Commercial Real Estate   Residential Real Estate   Commercial & Financial   Consumer Loans   Total               (In thousands)                                       Pass   $ 100,186     $ 973,942     $ 697,907     $ 226,391     $ 83,786     $ 2,082,212     $ 148,563     $ 1,319,696     $ 811,576     $ 364,241     $ 153,730     $ 2,797,806   Special mention     3,377       12,599       629       1,209       1,392       19,206       5,037       17,184       1,780       3,949       67       28,017   Substandard     4,242       9,278       3,197       769       70       17,556       5,497       7,438       2,709       2,153       134       17,931   Doubtful     0       0       0       0       0       0       0       0       0       0       0       0   Nonaccrual     309       6,410       10,290       130       247       17,386       470       7,341       9,844       246       170       18,071   Pass-Troubled debt restructures     58       5,893       0       18       0       5,969   Pass - Troubled debt restructures     44       4,988       358       0       44       5,434   Troubled debt restructures     615       1,256       11,762       0       368       14,001       505       945       10,520       0       307       12,277     $ 108,787     $ 1,009,378     $ 723,785     $ 228,517     $ 85,863     $ 2,156,330   Total   $ 160,116     $ 1,357,592     $ 836,787     $ 370,589     $ 154,452     $ 2,879,536       Construction               Commercial               & Land   Commercial   Residential   and             December 31, 2014   Development     Real Estate     Real Estate     Financial     Consumer     Total   December 31, 2015   Construction & Land Development   Commercial Real Estate   Residential Real Estate   Commercial & Financial   Consumer Loans   Total               (In thousands)                                       Pass   $ 79,397     $ 797,934     $ 655,518     $ 155,281     $ 51,764     $ 1,739,894     $ 100,186     $ 973,942     $ 697,907     $ 226,391     $ 83,786     $ 2,082,212   Special mention     1,815       11,709       546       993       590       15,653       3,377       12,599       629       1,209       1,392       19,206   Substandard     1,685       15,325       1,733       1,002       456       20,201       4,242       9,278       3,197       769       70       17,556   Doubtful     0       0       0       0       0       0       0       0       0       0       0       0   Nonaccrual     1,963       4,189       14,797       0       191       21,140       309       6,410       10,290       130       247       17,386   Pass-Troubled debt restructures     1,672       2,332       17       0       0       4,021   Pass - Troubled debt restructures     58       5,893       0       18       0       5,969   Troubled debt restructures     504       5,658       14,286       120       408       20,976       615       1,256       11,762       0       368       14,001     $ 87,036     $ 837,147     $ 686,897     $ 157,396     $ 53,409     $ 1,821,885   Total   $ 108,787     $ 1,009,378     $ 723,785     $ 228,517     $ 85,863     $ 2,156,330   Note F Impaired Loans and Allowance for Loan Losses   During the twelve months ended December 31, 2015,2016, the total of newly identified Troubled Debt Restructurings ("TDRs")TDRs was $2.6$2.0 million, of which $1.9$1.2 million were accruing commercialresidential real estate loans and $0.2 million were accruaing construction and land development loans.   The Company's TDR concessions granted generally do not include forgiveness of principal balances. Loan modifications are not reported in calendar years after modification if the loans were modified at an interest rate equal to the yields of new loan originations with comparable risk and the loans are performing based on the terms of the restructuring agreements. When a loan is modified as a TDR, there is not a direct, material impact on the loans within the consolidated balance sheet, as principal balances are generally not forgiven. Most loans prior to modification were classified as an impaired loan and the allowance for loan losses is determined in accordance with Company policy.   The following tables presenttable presents accruing loans that were modified within the twelve months ending December 31, 2016 and 2015:           Pre-     Post-                         Modification     Modification                   Number     Outstanding     Outstanding     Specific     Valuation       of     Recorded     Recorded     Reserve     Allowance       Contracts     Investment     Investment     Recorded     Recorded             (In thousands)                                         2016:                                         Construction and land  development     1     $ 20     $ 18     $ 0     $ 2   Residential real estate     4       1,169       1,019       0       150         5     $ 1,189     $ 1,037     $ 0     $ 152   2015:                                         Construction and land development     2     $ 220     $ 218     $ 0     $ 2   Residential real estate     1       27       26       0       1   Commercial real estate     3       1,881       1,787       0       94   Consumer     1       48       45       0       3         7     $ 2,176     $ 2,076     $ 0     $ 100   During the years 2016, 2015 and 2014:           Pre-     Post-                         Modification     Modification                   Number     Outstanding     Outstanding     Specific     Valuation       of     Recorded     Recorded     Reserve     Allowance       Contracts     Investment     Investment     Recorded     Recorded       (In thousands)   2015:                                         Construction and Land Development     2     $ 220     $ 218     $ 0     $ 2   Residential Real Estate     1       27       26       0       1   Commercial Real Estate     3       1,881       1,787       0       94   Consumer     1       48       45       0       3         7     $ 2,176     $ 2,076     $ 0     $ 100                                             2014:                                         Construction and Land Development     1     $ 72     $ 71     $ 0     $ 1   Residential Real Estate     6       687       638       0       49   Commercial Real Estate     1       4,300       3,975       0       325         8     $ 5,059     $ 4,684     $ 0     $ 375   No accruing2014, there were no payment defaults on loans that were restructuredhad been modified to a TDR within the previous twelve months ending December 31, 2015 defaulted during the twelve months ended December 31, 2015, and no loans restructured with the twelve month ending December 31, 2104 defaulted during the twelve months ended December 31, 2014.months. The Company considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms has been transferred to nonaccrualnon-accrual status or has been transferred to other real estate owned. A defaulted TDR is generally placed on nonaccrual and specific allowance for loan losses assigned in accordance with the Company's policy.   At December 31, 20152016 and 2014,2015, the Company's recorded investment in impaired loans (excluding purchasedPCI loans)and related valuation allowance was as follows:     Impaired Loans     Impaired Loans     for the Year Ended December 31, 2015     for the Year Ended December 31, 2016           Unpaid   Related   Average   Interest           Unpaid   Related   Average   Interest     Recorded   Principal   Valuation   Recorded   Income     Recorded   Principal   Valuation   Recorded   Income     Investment     Balance     Allowance     Investment     Recognized     Investment     Balance     Allowance     Investment     Recognized     ( In thousands )     ( In thousands ) With no related allowance recorded:                                                                                 Construction and land development   $ 107     $ 255     $ 0     $ 1,252     $ 6     $ 226     $ 321     $ 0     $ 193     $ 17   Commercial real estate     2,363       3,911       0       2,880       16       3,267       4,813       0       1,784       215   Residential real estate     9,256       13,707       0       10,259       168       9,706       14,136       0       9,370       579   Commercial and financial     17       17       0       84       1       199       206       0       15       9   Consumer     264       349       0       141       3       0       0       0       168       0   With an allowance recorded:                                                                                 Construction and land development     835       870       84       987       29       51       51       0       605       2   Commercial real estate     7,087       7,087       429       7,280       302       6,937       6,949       395       6,699       309   Residential real estate     12,447       12,803       1,964       15,136       337       12,332       12,681       2,059       12,015       455   Commercial and financial     0       0       0       0       0       0       0       0       0       0   Consumer     351       351       40       495       18       0       0       0       338       0   Total:                                                                                 Construction and land development     942       1,125       84       2,239       35       277       372       0       798       19   Commercial real estate     9,450       10,998       429       10,160       318       10,204       11,762       395       8,483       524   Residential real estate     21,703       26,510       1,964       25,395       505       22,038       26,817       2,059       21,385       1,034   Commercial and financial     17       17       0       84       1       199       206       0       15       9   Consumer     615       700       40       636       21       0       0       0       506       0     $ 32,727     $ 39,350     $ 2,517     $ 38,514     $ 880     $ 32,718     $ 39,157     $ 2,454     $ 31,187     $ 1,586     Impaired Loans     Impaired Loans     for the Year Ended December 31, 2014     for the Year Ended December 31, 2015           Unpaid   Related   Average   Interest           Unpaid   Related   Average   Interest     Recorded   Principal   Valuation   Recorded   Income     Recorded   Principal   Valuation   Recorded   Income     Investment     Balance     Allowance     Investment     Recognized     Investment     Balance     Allowance     Investment     Recognized     ( In thousands )     ( In thousands ) With no related allowance recorded:                                                                                 Construction and land development   $ 1,824     $ 2,239     $ 0     $ 2,080     $ 106     $ 107     $ 255     $ 0     $ 1,252     $ 6   Commercial real estate     3,087       4,600       0       2,713       20       2,363       3,911       0       2,880       16   Residential real estate     11,898       16,562       0       11,366       198       9,256       13,707       0       10,259       168   Commercial and financial     120       120       0       110       8       17       17       0       84       1   Consumer     65       93       0       291       1       264       349       0       141       3   With an allowance recorded:                                                                                 Construction and land development     886       931       159       1,213       81       835       870       84       987       29   Commercial real estate     8,359       8,469       529       10,446       461       7,087       7,087       429       7,280       302   Residential real estate     16,804       17,693       2,741       20,793       445       12,447       12,803       1,964       15,136       337   Commercial and financial     0       0       0       47       0       0       0       0       0       0   Consumer     534       562       112       543       25       351       351       40       495       18   Total:                                                                                 Construction and land development     2,710       3,170       159       3,293       187       942       1,125       84       2,239       35   Commercial real estate     11,446       13,069       529       13,159       481       9,450       10,998       429       10,160       318   Residential real estate     28,702       34,255       2,741       32,159       643       21,703       26,510       1,964       25,395       505   Commercial and financial     120       120       0       157       8       17       17       0       84       1   Consumer     599       655       112       834       26       615       700       40       636       21     $ 43,577     $ 51,269     $ 3,541     $ 49,602     $ 1,345     $ 32,727     $ 39,350     $ 2,517     $ 38,514     $ 880     Impaired loans also include loans that have been modified in troubled debt restructurings where concessions to borrowers who experienced financial difficulties have been granted. At December 31, 20152016 and 2014,2015, accruing TDRs totaled $20.0$17.7 million and $25.0$20.0 million, respectively.   The average recorded investment in impaired loans for the years ended December 31, 2016, 2015 and 2014 and 2013 was $31.2 million, $38.5 million $49.6 million, and $66.6$49.6 million, respectively. The impaired loans were measured for impairment based on the value of underlying collateral or the present value of expected future cash flows discounted at the loan's effective interest rate. The valuation allowance is included in the allowance for loan losses.   Interest payments received on impaired loans are recorded as interest income unless collection of the remaining recorded investment is doubtful at which time payments received are recorded as reductions to principal. For the years ended December 31, 2016, 2015 2014 and 2013,2014, the Company recorded $1,586,000, $880,000 $1,345,000 and $1,260,000,$1,345,000, respectively, in interest income on impaired loans.   For impaired loans whose impairment is measured based on the present value of expected future cash flows a total of $235,000, $318,000 $456,000, and $1.1 million,$456,000, respectively, for 2016, 2015 2014 and 20132014 was included in interest income and represents the change in present value attributable to the passage of time.   The nonaccrual loans and accruing loans past due 90 days or more (excluding purchased loans) were $12,758,000$11,024,000 and $0, respectively, at December 31, 2016, $12,758,000 and $0, respectively at the end of 2015, and were $18,563,000 and $17,000, respectively, at the end of 2014, and were $27,672,000 and $160,000, respectively, at year-end 2013.2014.   The purchased nonaccrual loans and accruing loans past due 90 days or more were $2,867,000 and $0 , respectively at December 31, 2016, $4,628,000 and $0, respectively, at December 31, 2015 and $2,577,000 and $196,000, respectively, at December 31, 2014. There were no purchased loans prior to 2014. Activity in the allowance for loans losses (excluding PCI loans) for the three years ended December 31, 2016, 2015 2014 and 20132014 are summarized as follows:       Beginning Balance     Provision for Loan Losses     Charge-Offs     Recoveries     Net (Charge-Offs) Recoveries     Ending Balance       (In thousands)   December 31 , 2015                                     Construction and land development   $ 722     $ 1,296     $ (1,271 )   $ 404     $ (867 )   $ 1,151   Commercial real estate     4,528       2,010       (482 )     700       218       6,756   Residential real estate     9,784       (2,208 )     (779 )     1,260       481       8,057   Commercial and financial     1,179       1,058       (726 )     531       (195 )     2,042   Consumer     794       552       (341 )     117       (224 )     1,122       $ 17,007     $ 2,708     $ (3,599 )   $ 3,012     $ (587 )   $ 19,128   December 31 , 2014                                                 Construction and land development   $ 808     $ 139     $ (640 )   $ 415     $ (225 )   $ 722   Commercial real estate     6,160       (2,917 )     (398 )     1,683       1,285       4,528   Residential real estate     11,659       (1,651 )     (1,126 )     902       (224 )     9,784   Commercial and financial     710       697       (398 )     170       (228 )     1,179   Consumer     731       182       (193 )     74       (119 )     794       $ 20,068     $ (3,550 )   $ (2,755 )   $ 3,244     $ 489     $ 17,007   December 31, 2013                                                 Construction and land development   $ 1,134     $ 66     $ (604 )   $ 212     $ (392 )   $ 808   Commercial real estate     8,849       (522 )     (2,714 )     547       (2,167 )     6,160   Residential real estate     11,090       3,273       (3,153 )     449       (2,704 )     11,659   Commercial and financial     468       (24 )     (60 )     326       266       710   Consumer     563       395       (253 )     26       (227 )     731       $ 22,104     $ 3,188     $ (6,784 )   $ 1,560     $ (5,224 )   $ 20,068       Beginning  Balance     Provision for Loan Losses     Charge- Offs     Recoveries     Net (Charge- Offs) Recoveries     Ending  Balance       (In thousands) December 31 , 2016                                                 Construction and land development   $ 1,151     $ (158 )   $ 0     $ 226     $ 226     $ 1,219   Commercial real estate     6,756       2,512       (301 )     306       5       9,273   Residential real estate     8,057       (1,145 )     (215 )     786       571       7,483   Commercial and financial     2,042       400       (615 )     1,809       1,194       3,636   Consumer     1,122       802       (244 )     109       (135 )     1,789       $ 19,128     $ 2,411     $ (1,375 )   $ 3,236     $ 1,861     $ 23,400   December 31 , 2015                                                 Construction and land development   $ 722     $ 1,296     $ (1,271 )   $ 404     $ (867 )   $ 1,151   Commercial real estate     4,528       2,010       (482 )     700       218       6,756   Residential real estate     9,784       (2,208 )     (779 )     1,260       481       8,057   Commercial and financial     1,179       1,058       (726 )     531       (195 )     2,042   Consumer     794       552       (341 )     117       (224 )     1,122       $ 17,007     $ 2,708     $ (3,599 )   $ 3,012     $ (587 )   $ 19,128   December 31, 2014                                                 Construction and land development   $ 808     $ 139     $ (640 )   $ 415     $ (225 )   $ 722   Commercial real estate     6,160       (2,917 )     (398 )     1,683       1,285       4,528   Residential real estate     11,659       (1,651 )     (1,126 )     902       (224 )     9,784   Commercial and financial     710       697       (398 )     170       (228 )     1,179   Consumer     731       182       (193 )     74       (119 )     794       $ 20,068     $ (3,550 )   $ (2,755 )   $ 3,244     $ 489     $ 17,007   As discussed in Note A, "Significant Accounting Policies," the allowance for loan losses is composed of specific allowances for certain impaired loans and general allowances grouped into loan pools based on similar characteristics. The Company's loan portfolio (excluding PCI loans) and related allowance at December 31, 20152016 and 20142015 is shown in the following tables.     Individually Evaluated for Impairment     Collectively Evaluated for Impairment     Total     Individually Evaluated for Impairment   Collectively Evaluated for  Impairment   Total   December 31, 2015   Carrying Value     Associated Allowance     Carrying Value     Associated Allowance     Carrying Value     Associated Allowance   December 31, 2016   Recorded Investment   Associated Allowance   Recorded Investment   Associated  Allowance   Recorded Investment   Associated Allowance     (In thousands)     (In thousands)                                                         Construction and land development   $ 942     $ 84     $ 107,731     $ 1,067     $ 108,673     $ 1,151     $ 277     $ 0     $ 159,839     $ 1,219     $ 160,116     $ 1,219   Commercial real estate     9,450       429       989,938       6,327       999,388       6,756       10,204       395       1,335,832       8,878       1,346,036       9,273   Residential real estate     21,703       1,964       701,160       6,093       722,863       8,057       22,038       2,059       814,250       5,424       836,288       7,483   Commercial and financial     17       0       227,417       2,042       227,434       2,042       199       0       369,449       3,636       369,648       3,636   Consumer     615       40       85,248       1,082       85,863       1,122       0       0       154,452       1,789       154,452       1,789     $ 32,727     $ 2,517     $ 2,111,494     $ 16,611     $ 2,144,221     $ 19,128     $ 32,718     $ 2,454     $ 2,833,822     $ 20,946     $ 2,866,540     $ 23,400       Individually Evaluated for   Impairment     Collectively Evaluated for Impairment     Total   December 31, 2015   Recorded Investment     Associated Allowance     Recorded Investment     Associated Allowance     Recorded Investment     Associated Allowance       (In thousands)                                         Construction and land development   $ 942     $ 84     $ 107,731     $ 1,067     $ 108,673     $ 1,151   Commercial real estate     9,450       429       989,938       6,327       999,388       6,756   Residential real estate     21,703       1,964       701,160       6,093       722,863       8,057   Commercial and financial     17       0       227,417       2,042       227,434       2,042   Consumer     615       40       85,248       1,082       85,863       1,122       $ 32,727     $ 2,517     $ 2,111,494     $ 16,611     $ 2,144,221     $ 19,128         Individually Evaluated for     Collectively Evaluated for                   Impairment     Impairment     Total   December 31, 2014   Carrying Value     Associated Allowance     Carrying Value     Associated Allowance     Carrying Value     Associated Allowance       (In thousands)                                         Construction and land development   $ 2,710     $ 159     $ 82,769     $ 563     $ 85,479     $ 722   Commercial real estate     11,446       529       821,609       3,999       833,055       4,528   Residential real estate     28,702       2,741       657,344       7,043       686,046       9,784   Commercial and financial     120       0       155,964       1,179       156,084       1,179   Consumer     599       112       52,808       682       53,407       794       $ 43,577     $ 3,541     $ 1,770,494     $ 13,466     $ 1,814,071     $ 17,007   Loans collectively evaluated for impairment reported at December 31, 20152016 included loans acquired from Floridian on March 11, 2016, BMO on June 3, 2016, Grand on July 17, 2015 and BANKshares on October 1, 2014 that are not PCI loans. At December 31, 2016, the remaining fair value adjustments for loans acquired was approximately $13.7 million, or approximately 3.11% of the outstanding aggregate PUL balances. At December 31, 2015, the remaining fair value adjustmentadjustments for loans acquired from Grand and BANKshares was approximately $14.2 million, or approximately 4.43% of the outstanding aggregate PUL balances. At December 31, 2014, the remaining fair value adjustments for loans acquired from BANKshares at the acquisition date was approximately $11.2 million, or 3.56% of the outstanding aggregate loan balances.   These amounts, which represents the remaining fair value discount of each PUL, are accreted into interest income over the remaining lives of the related loans on a level yield basis. Provisioning for loan losses of $1.3 million and net charge-offs of $1.2 million were recorded for these loans during 2015. No provision for loan losses was recorded related to these loans at December 31, 2014. The table below summarizes PCI loans that were individually evaluated for impairment based on expected cash flows at December 31, 20152016 and 2014.2015.       December 31, 2015     December 31, 2014       PCI Loans Individually Evaluated for Impairment     PCI Loans Individually Evaluated for Impairment       Carrying Value     Associated Allowance     Carrying Value     Associated Allowance                             Construction and land development   $ 114     $ 0     $ 1,557     $ 43   Commercial real estate     9,990       0       4,092       3   Residential real estate     922       0       851       18   Commercial and financial     1,083       0       1,312       0   Consumer     0       0       2       0       $ 12,109     $ 0     $ 7,814     $ 64       December 31, 2016  PCI Loans Individually Evaluated for Impairment     December 31, 2015  PCI Loans Individually Evaluated for Impairment       Recorded Investment     Associated Allowance     Recorded Investment     Associated  Allowance                             Construction and land development   $ 114     $ 0     $ 114     $ 0   Commercial real estate     11,257       0       9,990       0   Residential real estate     684       0       922       0   Commercial and financial     941       0       1,083       0   Consumer     0       0       0       0       $ 12,996     $ 0     $ 12,109     $ 0   Note G Bank Premises and Equipment   Bank premises and equipment are summarized as follows:           Accumulated   Net           Accumulated   Net           Depreciation &   Carrying     Cost     Amortization     Value           (In thousands)         December 31, 2016                         Premises (including land of $14,773)   $ 71,562     $ (22,969 )   $ 48,593   Furniture and equipment     30,281       (20,190 )     10,091           Depreciation &   Carrying     $ 101,843     $ (43,159 )   $ 58,684     Cost     Amortization     Value                                   (In thousands)                                 December 31, 2015                                                 Premises (including land of $14,839)   $ 66,965     $ (21,298 )   $ 45,667     $ 66,965     $ (21,298 )   $ 45,667   Furniture and equipment     26,546       (17,634 )     8,912       26,546       (17,634 )     8,912     $ 93,511     $ (38,932 )   $ 54,579     $ 93,511     $ (38,932 )   $ 54,579                           December 31, 2014                         Premises (including land of $13,594)   $ 59,471     $ (20,260 )   $ 39,211   Furniture and equipment     21,924       (16,049 )     5,875     $ 81,395     $ (36,309 )   $ 45,086     137  Note H Goodwill and Acquired Intangible Assets   Goodwill wastotaled $64.6 million at December 31, 2016, a result of the Company's acquisitionacquisitions of The BANKshares a whole bank acquisition, on October 1, 2014 and Floridan Financial Group on March 11, 2016, each a whole bank acquisition, and BMO Harris's Orlando operations on June 3, 2016, and for each totaled $25.2 million, $31.6 million and $7.8 million at year end December 31, 2015.2016, respectively. The acquisition of Grand Bankshares, a whole bank acquisition, on July 17, 2015, was recorded as a bargain purchase, with no goodwill and a bargain purchase gain of $416,000 recorded to income.   Acquired intangible assets consist of core deposit intangibles ("CDI"), which are intangible assets arising from the purchase of deposits separately or from the acquistionsacquisitions of BANKshares in 2014, Grand Bankshares in 2015, and Grand BANKsharesFloridian Financial Group and BMO Harris's Orlando operations, each in 2015.2016. The change in balance for CDI is as follows:     2015     2014     2013     2016     2015     2014     (In thousands)     (In thousands)   Beginning of year   $ 7,454     $ 718     $ 1,501     $ 8,594     $ 7,454     $ 718   Acquired CDI     2,564       7,769       0       8,464       2,564       7,769   Amortization expense     (1,424 )     (1,033 )     (783 )     (2,486 )     (1,424 )     (1,033 ) End of year   $ 8,594     $ 7,454     $ 718     $ 14,572     $ 8,594     $ 7,454                                (In months) Remaining Average Amoritzation Period     64       67       71     The gross carrying amount and accumulated amortization of the Company's intangible asset subject to amortization at December 31 is presented below.       2015     2014       Gross           Gross             Carrying     Accumulated     Carrying     Accumulated       Amount     Amortization     Amount     Amortization       (In thousands)   Deposit base   $ 19,827     $ (11,233 )   $ 17,263     $ (9,809 )     $ 19,827     $ (11,233 )   $ 17,263     $ (9,809 )     2016     2015       Gross           Gross             Carrying     Accumulated     Carrying     Accumulated       Amount     Amortization     Amount     Amortization       (In thousands)    Deposit base   $ 18,796     $ (4,224 )   $ 19,827     $ (11,233 )   The annual amortization expense for the deposit base intangibleCompany's CDI determined using the straight line method in each of the fourthree years subsequent to December 31, 20152016 is $1,587,000,$2,876,000, and amortization in the fourth and fifth year subsequent to December 31, 20152016 is $1,482,000.$2,771,000 and $1,567,000, respectively. Note I Borrowings   AllA significant portion of the Company's short-term borrowings were comprised of unsecured federal funds purchased and securities sold under agreements to repurchase with maturities primarily from overnight to seven days:     2015     2014     2013     2016     2015     2014     (In thousands)     (In thousands)   Maximum amount outstanding at any month end   $ 230,120     $ 298,399     $ 165,770     $ 236,099     $ 192,786     $ 218,399   Weighted average interest rate at end of year     0.28 %     0.19 %     0.17 %     0.31 %     0.28 %     0.18 % Average amount outstanding   $ 182,914     $ 171,965     $ 155,222     $ 187,560     $ 168,188     $ 152,129   Weighted average interest rate during the year     0.21 %     0.17 %     0.18 %     0.26 %     0.20 %     0.17 %   Securities sold under agreements to repurchase are accounted for as secured borrowings. For securities sold under agreements to repurchase, the company would be obligated to provide additional collateral in the event of a significant decline in fair value of collateral pledge.pledged. At December 31, 2016, 2015, 2014, and 2013,2014, company securities pledgepledged were as follows by collateral type and maturity:   Fair-Value of Pledge Securities   Overnight and Continous Maturity       2015     2014     2013       (In thousands)   Mortgage-backed securities and collateralized mortgages obligations of U.S. Government Sponsored Entities   $ 172,005     $ 153,640     $ 151,310       Overnight and Continuous Maturity   Fair-Value of Pledge Securities   2016     2015     2014       (In thousands)   Mortgage-backed securities and collateralized mortgage obligations of U.S. Government Sponsored Entities   $ 204,202     $ 172,005     $ 153,640     During 2007, the Company obtained advancesSeacoast Bank had secured lines of credit of $1.0 billion at December 31, 2016, of which $415,000 was outstanding from the Federal Home Loan Bank (FHLB)("FHLB") at the end of 2016, with their entire amount maturing within 30 days or less. The average rate on the balance at end of year was 0.62% and averaged 0.63% for all of 2016. On April 7, 2016, Seacoast Bank incurred an early redemption cost of $1.8 million related to prepayment of $50.0 million of FHLB advances. The $50.0 million of FHLB borrowings was comprised of two advances of $25.0 million each acquired on September 25,15, 2007 and November 27, 2007. The advances mature on September 15, 2017 and November 27, 2017,2007, respectively, and havehad fixed rates of 3.64% and 2.70% at December 31, 2015,, respectively, payable quarterly; the FHLB has a perpetual three-month option to convert the interest rate on either advance to an adjustable rate and the Company has the option to prepay the advance should the FHLB convert the interest rate. Seacoast National has unused secured lines of credit of $1.4 billion at December 31, 2015.quarterly.   The Company issued $20.6 million in junior subordinated debentures on March 31 and December 16, 2005, an aggregate of $41.2 million. These debentures were issued in conjunction with the formation of a Delaware and Connecticut trust subsidiary, SBCF Capital Trust I, and SBCF Statutory Trust II ("Trusts I and II"), respectively, which each completed a private sale of $20.0 million of floating rate preferred securities. On June 29, 2007, the Company issued an additional $12.4 million in junior subordinated debentures which was issued in conjunction with the formation of a Delaware trust subsidiary, SBCF Statutory Trust III ("Trust III"), which completed a private sale of $12.0 million of floating rate trust preferred securities. The rates on the trust preferred securities are the 3-month LIBOR rate plus 175 basis points, the 3-month LIBOR rate plus 133 basis points, and the 3-month LIBOR rate plus 135 basis points, respectively. The rates, which adjust every three months, are currently 2.36%2.75%, 1.84%2.31%, and 1.86%2.29%, respectively, per annum.respectively. The trust preferred securities have original maturities of thirty years, and may be redeemed without penalty, on or after June 10, 2010, March 15, 2011, and September 15, 2012, respectively, upon approval of the Federal Reserve or upon occurrence of certain events affecting their tax or regulatory capital treatment. Distributions on the trust preferred securities are payable quarterly in March, June, September and December of each year. The Trusts also issued $619,000, $619,000 and $372,000, respectively, of common equity securities to the Company. The proceeds of the offering of trust preferred securities and common equity securities were used by Trusts I and II to purchase the $41.2 million junior subordinated deferrable interest notes issued by the Company, and by Trust III to purchase the $12.4 million junior subordinated deferrable interest notes issued by the Company, all of which have terms substantially similar to the trust preferred securities. As part of the October 1, 2014 BANKshares acquisition the Company acquiredassumed three junior subordinated debentures. Correspondingly, at December 31, 2015 and 2014, the Company had $5.2 million and $4.1 million of Floating Rate Junior Subordinated Deferrable Interest Debentures outstanding which are due December 26, 2032 and March 17, 2034, and callable by the Company, at its option, any time after December 26, 2007 and March 17, 2009.option. The rates on these trust preferred securities are the 3-month LIBOR rate plus 325 basis points and the 3-month LIBOR rate plus 279 basis points, respectively. The rates, which adjust every three months, are currently 3.85%4.25% percent and 3.32%3.78%, respectively, per annum. At December 31, 2015 and 2014, the Company also had $5.2 million outstanding of Junior Subordinated Debentures due February 23, 2036. The interest rate was fixed at 6.37% through February 2011 and, thereafter the couponCoupon rate floats quarterly at the three month LIBOR rate plus 139 basis points. The junior subordinated debenture is redeemable in certain circumstances after February 2011.circumstances. The interest rate was 1.77%2.31% at December 31, 2015.2016. The above three junior subordinated debentures in accordance with ASU 805Business Combinationshave been recorded at their acquisition date fair values which collectively is $3.5 million lower than face value and will be amortized into interest expense over the remaining term to maturity.   As part of the July 17, 2015 Grand Bank acquisition the Company acquiredassumed one junior subordinated debentures. Correspondingly, at December 31, 20152016 the company has $7.2 million of Floating Rate Junior Subordinated Deferrable Interest Debenture outstanding which is due December 30, 2034, with no calland callable by the Company, at its option. The interest rate is the 2-month3-month LIBOR rate plus 198 basis points. The rate, which adjusts every three months is currently 2.58%2.98%, per annum. The junior subordinated debentures in acccordance with ASU 805Business Combinationshave been recorded at the acquisition date fair values which is $2.1 million lower than facevalueface value and will be amortized into interest expense over the remaining term to maturity.   The Company has the right to defer payments of interest on the notes at any time or from time to time for a period of up to twenty consecutive quarterly interest payment periods. Under the terms of the notes, in the event that under certain circumstances there is an event of default under the notes or the Company has elected to defer interest on the notes, the Company may not, with certain exceptions, declare or pay any dividends or distributions on its capital stock or purchase or acquire any of its capital stock. As of December 31, 2016, 2015 2014 and 2013,2014, all interest payments on trust preferred securities were current.   The Company has entered into agreements to guarantee the payments of distributions on the trust preferred securities and payments of redemption of the trust preferred securities. Under these agreements, the Company also agrees, on a subordinated basis, to pay expenses and liabilities of the Trusts other than those arising under the trust preferred securities. The obligations of the Company under the junior subordinated notes, the trust agreement establishing the Trusts, the guarantees and agreements as to expenses and liabilities, in aggregate, constitute a full and conditional guarantee by the Company of the Trusts' obligations under the trust preferred securities.   Note J Employee Benefits and Stock Compensation   The Company’s profit sharing and retirement plan covers substantially all employees after one year of service and includes a matching benefit feature for employees electing to defer the elective portion of their profit sharing compensation. In addition, amounts of compensation contributed by employees are matched on a percentage basis under the plan. The profit sharing and retirement contributions charged to operations were $1,499,000$1.7 million in 2016, $1.5 million in 2015, $1,198,000and $1.2 million in 2014 and $807,000 in 2013.2014.   The Company, through its Compensation and Governance Committee of the Board of Directors (the “Compensation Committee”), offers equity compensation to employees and non-employee directors of Seacoast and Seacoast Bank in the form of share-based awards. Stock options, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”) vest over time, upon the satisfaction of established performance criteria, or both.   The Company believes such awards better align the interests of its employees and non-employee directors with those of its shareholders. Option awards are granted with an exercise price at least equal to the market price of the Company’s stock at the date of grant. Option and other share-based awards vest at such times as are determined by the Compensation and Governance Committee of the Board of Directors (the Compensation Commiteee) at the time of grant. The options have a maximum term of ten years. The 2013 plan includes a number of provisions, which are consistent with the interests of shareholders and sound corporate governance practices. More information on this plan can be found in our proxy statement.   The fair value of RSAs and RSUs are estimated based on the price of the Company’s common stock on the date of grant. Compensation cost is measured ratably over the vesting period of the awards and reversed for awards which are forfeited due to unfulfilled service or performance criteria. All options or SSARs issued since December 31, 2002 have a vesting period of three to five years and a contractual life of ten years. All stock awards and restricted stock units have a contractual life of three or five years. To the extent the Company has treasury shares available, stock options exercised or stock grants awarded may be issued from treasury shares or, if treasury shares are insufficient, the Company can issue new shares.   Vesting of share-based awards is immediately accelerated on death or disability. Upon the event of a change-in-control, acceleration isawards are either immediately accelerated, or can be at the discretion of the Compensation Committee. The Compensation Committee may also accelerate vesting upon retirement (including a voluntary termination of employment at age 5555) for those employees with five or more years of service with the company).Company.   Awards are currently granted under the Seacoast 2013 Incentive Plan (“2013 Plan”), which shareholders approved on May 23, 2013 and amended on May 26, 2015 to increase the number of authorized shares for issuance thereunder. The 2013 Plan expires on May 26, 2025. The 2013 Plan replaced the 2000 Incentive Plan and the 2008 Incentive Plan (the “Prior Plans”). Upon adoption of the 2013 Plan, no further awards were granted under the Prior Plans, which remain in effect only so long as awards granted thereunder remain outstanding. Under the terms of the 2013 Plan, approximately 1.71.2 million shares areremain available for issuance and 948,857 shares remain outstanding as of December 31, 2015.2016.   Prior to the adoption of the 2013 Plan, the Company maintained other employee stock compensation plans (“Prior Company Plans”). Under Prior Company Plans, a total of 960,000 shares of common stock were made available for options, stock-settled stock appreciation rights or restricted stock awards. At December 31, 2015, a total of 119,604 shares remain outstanding from Prior Company Plans.   The impact of shared-basedshare-based compensation on the Company’s financial results for the following periods:is presented below:     Year Ended December 31,     2015   2014   2013   (In thousands)   Year Ended December 31,     (In thousands)     2016     2015     2014   Share-based compensation expense   $ 2,859     $ 1,299     $ 246     $ 4,154     $ 2,859       1,299   Income tax benefit     (963 )     (501 )     (95 )     (1,602 )     (963 )     (501 ) Reduction to net income   $ 1,896     $ 798     $ 151     The total unrecognized compensation cost and the weighted-average period over which unrecognized compensation cost is expected to be recognized related to non-vested share-based compensation arrangements at December 31, 20152016 is presented below: (Dollars in thousands)     Unrecognized Compensation Cost     Weighted-Average Period Remaining (Years) Restricted stock     $ 3,794     2.7 Stock options       542     1.8 Total     $ 4,336     2.5   (In thousands)   Unrecognized Compensation Cost     Weighted-Average Period Remaining (Years)   Restricted stock   $ 4,341       2.2   Stock options     796       3.2   Total   $ 5,137       2.4   Restricted Stock   As part of restricted share issuances,Certain RSUs granted in 2013, the Company issued 195,000 of restricted stock units at $11.00 per share. An additional 27,692 restricted stock units were issued in 2014 at 10.19 per share. The restricted stock units2016 allow the grantee to earn 0-160 percent0%-175% of the target award as determined by two criteria, the Company’s after-tax earningsadjusted net income and its classified assets ratio. Any restricted stock units that become eligible for vesting pursuant to the performance requirements will vest by one-thirdadjusted return on each of the first, second and third anniversaries of the last day of the performance period,tangible equity through December 31, 2016, 2017 and 2018, respectively.2019. If the Company does not achieve the target performance goal for both criteria, by December 31, 2015, then none of the restricted stock unitsthese RSUs will vest and they will be forfeited. On December 31, 2015 these restricted shares were convertedforfeited, subject to restricted stock awards at a rate of 150% of the target awards.one year catch-up performance period.   Information regarding restricted stock for the following periods is summarized below:     Year Ended December 31,     2015   2014   2013   (In thousands, except share and per share data)   Year Ended December 31,     (Dollars in thousands, except per share amounts)     2016     2015     2014   Shares granted     250,934       27,692       195,000       300,787       250,934       27,692   Weighted-average grant date fair value   $ 13.42     $ 10.19     $ 11.00     $ 14.90     $ 13.42     $ 10.19   Fair value of awards vested (1)     836     1,455     133     $ 2,827     $ 836     $ 1,455     (1) (1) Based on grant date fair value A summary of the status of the Company’s non-vested restricted stock as of December 31, 2014,2016, and changes during the year then ended, is presented below:   (In thousands, except per share amounts)   Shares     Weighted- Average Grant-Date Fair Value   Non-vested at January 1, 2014     361,035     $ 9.89   Granted     250,934       13.42   Converted     93,688       10.45   Forfeited/Canceled     (8,039 )     10.81   Vested     (60,849 )     13.74   Non-vested at December 31, 2014     636,769     10.98   (In thousands, except share and per share data)   Shares     Weighted-Average Grant-Date Fair Value   Non-vested at January 1, 2016     543,177     $ 11.25   Granted     300,787       14.90   Forfeited/Cancelled     (10,631 )     14.94   Vested     (303,689 )     9.31   Non-vested at December 31, 2016     529,644     $ 14.37     Stock Options   The Company estimated the fair value of each option grant on the date of grant using the Black-Scholes options-pricing model with the following weighted-average assumptions:     Year Ended December 31,       2015     2014     2013   Risk-free interest rates     1.65 %     2.7 %     2.5 % Expected dividend yield     0 %     0 %     0 % Expected volatility     15.5 %     17.0 %     26.5 % Expected lives (years)     5.0       5.0       5.0         Year Ended December 31,       2016     2015     2014   Risk-free interest rates     1.63 %     1.65 %     2.70 % Expected dividend yield     0 %     0 %     0 % Expected volatility     21.9 %     15.5 %     17.0 % Expected lives (years)     5.0       5.0       5.0   Information regarding stock options as of December 31, 2015,2016, and changes during the year then ended, are presented below:       Options     Weighted-Average Exercise Price     Weighted-Average Remaining Contractual Term (Years)     Aggregate Intrinsic Value (000s)   Outstanding at January 1, 2016     556,647     $ 18.02                   Granted     243,391       14.94                   Exercised     (12,400 )     10.82                   Forfeited     (8,860 )     133.60                   Outstanding at December 31, 2016     778,778     $ 15.86       6.88     $ 7,369   Exercisable at December 31, 2016     432,660     $ 17.73       6.73     $ 4,412   (Dollars in thousands, except share and per share data)   Options     Weighted- Average Exercise Price     Weighted- Average Remaining Contractual Term (Years)     Aggregate Intrinsic Value   Outstanding at January 1, 2015     492,997     $ 18.72       8.7     $ 1,311   Granted     63,650       12.63       0       0   Exercised     0       0       0       0   Forfeited     0       0       0       0   Outstanding at December 31, 2015     556,647       18.02       7.6       2,099                                     Exercisable at December 31, 2015     255,616     $ 26.25       7.1     $ 912     The following table summarizes information related to stock options:   (In thousands, except share and per share data)   Year Ended December 31,     Year Ended December 31,     2016     2015     2014   (Dollars in thousands, except share and per share data)   2015   2014   2013   Options granted     63,650       413,000       49,200       243,391       63,650       413,000   Weighted-average grant date fair value   $ 2.21     $ 2.26     $ 3.10     $ 3.41     $ 2.21     $ 2.26   Proceeds from stock options exercised     0       0       0   Tax benefit recognized from stock options exercised     0       0       0   Intrinsic value of stock options exercised     0       0       0     $ 80       0       0     The following table providessummarizes information related to stock options as of December 31, 2015:2016:   Range of Exercise Prices   Options Outstanding     Remaining contractual Life   Shares Exercisable     Remaining Contractual Life   Weighted Average Exercise Price*   $10.50 to $10.80     400,000     8.3 yrs     188,889     8.2 yrs   $ 10.70   $10.81 to $13.00     119,250     7.4 yrs     29,330     7.6 yrs   $ 11.44   $110.00 to $120.00     28,537     1.3 yrs     28,537     1.3 yrs   $ 111.09   $120.01 to $140.00     8,860     0.4 yrs     8,860     0.4 yrs   $ 133.60   Total     556,647     7.6 yrs     255,616     7.1 yrs   $ 18.02   Range of Exercise Prices   Options Outstanding     Remaining Contractual Life (Years)     Shares Exercisable     Weighted Average Exercise Price   $10.54 to $10.78     390,000       7.2       312,239     $ 10.66   $10.97 to $15.99     360,241       7.0       91,884       13.88   $110.80 to $111.10     28,537       0.3       28,537       111.09   Total     778,778       6.9       432,660     $ 17.73     Employee Stock PurchasePlanPurchase Plan   The Employee Stock Purchase Plan (“ESPP”), as amended, was approved by shareholders on April 25, 1989, and additional shares were authorized for issuance by shareholders on June 18, 2009 and May 2, 2013. Under the ESPP, the Company is authorized to issue up to 300,000 common shares of the CompanyCompany’s common stock to eligible employees of the Company.  These shares may be purchased by employees at a price equal to 95% of the fair market value of the shares on the purchase date.  Purchases under the ESPP are made monthly.  Employee contributions to the ESPP are made through payroll deductions.     Year Ended December 31,     Year Ended December 31,     2015   2014   2013     2016     2015     2014   ESPP shares purchased     9,083       13,294       18,536       10,483       9,083       13,294   Weighted-average employee purchase price   $ 13.99     $ 10.63     $ 10.20     $ 16.02     $ 13.99     $ 10.63     Note K Lease Commitments   The Company is obligated under various noncancellable operating leases for equipment, buildings, and land. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. At December 31, 2015,2016, future minimum lease payments under leases with initial or remaining terms in excess of one year are as follows:     (In thousands)     (In thousands)   2016   $ 4,736   2017     3,892     $ 5,325   2018     2,087       4,213   2019     1,882       4,026   2020     1,364       3,362   2021     2,213   Thereafter     9,681       12,429     $ 23,642     $ 31,568     Rent expense charged to operations was $5,293,000 for 2016, $4,133,000 for 2015 and $4,066,000 for 2014, and $3,878,000 for 2013.2014. Certain leases contain provisions for renewal and change with the consumer price index. Note L Income Taxes   The provision (benefit) for income taxes is as follows:     Year Ended December 31     Year Ended December 31     2015     2014     2013     2016     2015     2014     (In thousands)         (In thousands)       Current                                                 Federal   $ 578     $ 310     $ 160     $ 653     $ 578     $ 310   State     61       12       7       30       61       12                                                   Deferred                                                 Federal     10,818       3,440       (30,540 )     12,163       10,818       3,440   State     2,070       782       (10,012 )     2,043       2,070       782                             $ 14,889     $ 13,527     $ 4,544     $ 13,527     $ 4,544     $ (40,385 )   The difference between the total expected tax benefit (computed by applying the U.S. Federal tax rate of 35% to pretax income in 2016, 2015 2014 and 2013)2014) and the reported income tax provision (benefit) relating to income (loss) before before income taxes is as follows:     Year Ended December 31     Year Ended December 31     2015     2014     2013     2016     2015     2014     (In thousands)         (In thousands)       Tax rate applied to income (loss) before income taxes   $ 12,484     $ 3,583     $ 4,061     $ 15,431     $ 12,484     $ 3,583   Increase (decrease) resulting from the effects of:                                                 Nondeductible acquisition costs     441       554       0       217       441       554   Tax exempt interest on obligations of states and political subdivisions and bank owned life insurance     (761 )     (293 )     (148 ) Tax exempt interest on loans, obligations of states and political subdivisions and bank owned life insurance     (1,215 )     (761 )     (293 ) State income taxes     (746 )     (278 )     (259 )     (726 )     (746 )     (278 ) Nontaxable bargain purchase gain     (146 )     0       0       0       (146 )     0   Tax credit investments     (55 )     0       0   Stock compensation     127       92       4       (731 )     127       92   Other     (3 )     92       38       (105 )     (3 )     92   Federal tax provision before valuation allowance     11,396       3,750       3,696   State tax provision before valuation allowance     2,131       794       740   Federal tax provision     12,816       11,396       3,750   State tax provision     2,073       2,131       794   Total income tax provision     13,527       4,544       4,436     $ 14,889     $ 13,527     $ 4,544   Change in valuation allowance     0       0       (44,821 ) Income tax provision (benefit)   $ 13,527     $ 4,544     $ (40,385 )   The net deferred tax assets (liabilities) are comprised of the following:     December 31     December 31     2015     2014     2016     2015     (In thousands)     (In thousands)   Allowance for loan losses   $ 7,759     $ 6,926     $ 9,477     $ 7,759   Premises and equipment     2,334       898   Other real estate owned     1,737       1,562       841       1,737   Accrued stock compensation     1,235       721       1,561       1,235   Federal tax loss carryforward     33,507       39,974       28,089       33,507   State tax loss carryforward     6,767       7,580       6,123       6,593   Alternative minimum tax carryforward     3,355       2,136       4,261       3,355   Net unrealized securities losses     3,906       3,035       4,616       3,906   Deferred compensation     1,829       1,643       3,279       1,829   Accrued interest and fee income     2,404       3,270       3,267       2,404   Other     7,194       7,428       3,748       3,185   Gross deferred tax assets     69,693       74,275       67,596       66,408   Less: Valuation allowance     0       0       0       0   Deferred tax assets net of valuation allowance     69,693       74,275       67,596       66,408                                   Depreciation     (1,211 )     (1,334 ) Deposit base intangible     (3,452 )     (2,976 )     (3,953 )     (3,452 ) Other     (4,756 )     (3,165 )     (2,825 )     (2,682 ) Gross deferred tax liabilities     (9,419 )     (7,475 )     (6,778 )     (6,134 )                 Net deferred tax assets   $ 60,274     $ 66,800     $ 60,818     $ 60,274     Included in the table above is the effect of certain temporary differences for which no deferred tax expense or benefit was recognized. The effect of these items is instead recorded as Accumulated Other Comprehensive Income in the shareholder'sshareholders' equity section of the consolidated balance sheet. In 2015,2016, such items consisted primarily of $3.9$12.1 million of unrealized lossesslosses on certain investments in debt and equity securities accounted for under ASC 320. In 2014,2015, they consisted primarily of $3.0$10.1 million of unrealized losses on certain investments in debt and equity securities.   At December 31, 2015,2016, the Company's deferred tax assets ("DTAs") of $60.2$60.8 million consists of approximately $47.5$48.0 million of net U.S. federal deferred tax assetsDTAs and $12.7$12.8 million of net state deferred tax assets.DTAs.   As a result of the acquisition of Grand Bankshares (Grand)Floridian Financial Group, Inc. (Floridian), the Company recorded a net deferred tax asset (DTA)DTA of $5.3 million, Prior to the acquisition, Grand had recorded a full valuation allowance on its DTA due to the uncertainty as to its future realization.$13.3 million. Included in this DTA are $9.1$15.6 million of federal net operating loss (NOL) carry-overscarryovers and $91,000$209,000 of alternative minimum tax credit carryovers. There are also $9.1$14.9 million of state NOL carryovers. Both theThe federal and state NOL'sNOL’s expire beginning in 2030 and 2029, respectively, while the tax credits have an indefintite life. Grand actually had $31.8 million of federal and state NOL's at acquisition date. However, due to Internal Revenue Code limitations on the use of acquired NOL's, it was determined that only $9.1 million of the NOL's could be used prior to their expiration. Accordingly the $22.7 million of NOL's expected to expire were not recorded during purchase accounting.   Management assesses the necessity of a valuation allowance recorded against deferred tax assetsDTAs at each reporting period. The determination of whether a valuation allowance for net deferred tax assetsDTAs is appropriate is subject to considerable judgment and requires an evaluation of all positive and negative evidence. Based on an assessment of all of the evidence, including favorable trending in asset quality and certainty regarding the amount of future taxable income that the Company forecasts, management concluded that it was more likely than not that its net deferred tax assetsDTAs will be realized based upon future taxable income. Management’s confidence in the realization of projected future taxable income is based upon analysis of the Company’s risk profile and its trending financial performance, including credit quality. The Company believes it can confidently and reasonably predict future results of operations that result in taxable income at sufficient levels over the future period of time that the Company has available to realize its net deferred tax asset.DTA.   Management expects to realize the $60.2$60.8 million in net deferred tax assetsDTAs well in advance of the statutory carryforward period. At December 31, 2015,2016, approximately $33.5$28.1 million of deferred tax assetsDTAs relate to federal net operating losses which will expire in annual installments beginning in 2029 through 2032. Additionally, $6.8$6.6 million of the deferred tax assetsDTAs relate to state net operating losses which will expire in annual installments beginning in 2028 through 2034. Tax credit carryforwards at December 31, 20152016 include federal alternative minimum tax credits totaling $3.4$4.3 million which have an unlimited carryforward period. Remaining deferred tax assetsDTAs are not related to net operating losses or credits and therefore, have no expiration date.   Prior to the third quarter of 2013, the Company was unable to conclude that there was sufficient evidence to support that the deferred tax asset was more likely than not realizable and to support the reversal of its deferred tax asset valuation allowance of $44.8 million. The deferred tax asset valuation allowance was reversed after the achievement of operating results for the third quarter and nine months of 2013 that demonstrated the continuation of increasing income before tax results. A valuation allowance could be required in future periods based on the assessment of positive and negative evidence. Management’s conclusion at December 31, 20152016 that it is more likely than not that the net deferred tax assetDTAs of $60.2$60.8 million will be realized is based upon estimates of future taxable income that are supported by internal projections which consider historical performance, various internal estimates and assumptions, as well as certain external data, all of which management believes to be reasonable although inherently subject to judgment. If actual results differ significantly from the current estimates of future taxable income, even if caused by adverse macro-economic conditions, a valuation allowance may need to be recorded for some or all of the Company’s deferred tax assets. Such an increase to the deferred tax assetDTAs. The establishment of a DTA valuation allowance could have a material adverse effect on the Company’s financial condition and results of operations.   The Company recognizes interest and penalties, as appropriate, as part of the provisioning for income taxes. No interest or penalties were accrued at December 31, 2015.2016. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, Compensation – Stock Compensation (Topic 718). ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting and cash flow classification for excess tax benefits and deficiencies, (2) forfeitures, and (3) tax withholding requirements and cash flow classification. The standard is effective for public business entities in annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted if the entire standard is adopted. If an entity early adopts the standard in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company adopted ASU 2016-09 in the third quarter of 2016 and recognized a $0.4 million tax benefit in the Consolidated Statements of Operations. An additional $0.4 million tax benefit was recognized in the fourth quarter of 2016. In addition, the Company presented excess tax benefits as an operating activity in the Consolidated Statement of Cash Flows using a retrospective transition method. As a result of the adoption of ASU No. 2014-01, “Investments-Equity Method and Joint Ventures: Accounting for Investments in Qualified Affordable Housing Projects,” the amortization of our low-income housing credit investment has been reflected as income tax expense. Accordingly, $39,000 of such amortization has been reflected as income tax expense for the year ended December 31, 2016. The amount of affordable housing tax credits, amortization and tax benefits recorded as income tax expense for the year ended December 31, 2016 were $32,000, $39,000 and $67,000, respectively. The carrying value of the investment in affordable housing credits is $10.0 million at December 31, 2016, of which $8.3 million is unfunded.   The Company has no unrecognized income tax benefits or provisions due to uncertain income tax positions. The Internal Revenue Service (IRS) examined the federal income tax returns for the years 2006 through 2009. The IRS did not propose any adjustments related to this examination. The following are the major tax jurisdictions in which the Company operates and the earliest tax year subject to examination:   Jurisdiction   Tax Year United States of America   2012 2013 Florida   2012 2013 Income taxes related to securities transactions were $62,000, $181,000 and $162,000 in 2015, 2014 and 2013, respectively. 148  Note M Noninterest Income and Expenses   Details of noninterest income and expense follow:     Year Ended December 31     Year Ended December 31     2015     2014     2013     2016     2015     2014     (In thousands)     (In thousands)   Noninterest income                                                 Service charges on deposit accounts   $ 8,563     $ 6,952     $ 6,711     $ 9,669     $ 8,563     $ 6,952   Trust fees     3,132       2,986       2,711       3,433       3,132       2,986   Mortgage banking fees     4,252       3,057       4,173       5,864       4,252       3,057   Brokerage commissions and fees     2,132       1,614       1,631       2,044       2,132       1,614   Marine finance fees     1,152       1,320       1,189       673       1,152       1,320   Interchange income     7,684       5,972       5,404       9,227       7,684       5,972   Other deposit based EFT fees     397       343       342       477       397       343   BOLI Income     1,426       252       0       2,213       1,426       252   Gain on participant loan     725       0       0   Gain on participated loan     0       725       0   Other     2,555       2,248       2,158       3,827       2,555       2,248       32,018       24,744       24,319       37,427       32,018       24,744   Securities gains, net     161       469       419       368       161       469   Bargain purchase gain, net     416       0       0       0       416       0   TOTAL   $ 32,595     $ 25,213     $ 24,738     $ 37,795     $ 32,595     $ 25,213                                                   Noninterest expense                                                 Salaries and wages   $ 41,075     $ 35,132     $ 31,006     $ 54,096     $ 41,075     $ 35,132   Employee benefits     9,564       8,773       7,327       9,903       9,564       8,773   Outsourced data processing costs     10,150       8,781       6,372       13,516       10,150       8,781   Telephone / data lines     1,797       1,331       1,253       2,108       1,797       1,331   Occupancy     8,744       7,930       7,178       13,122       8,744       7,930   Furniture and equipment     3,434       2,535       2,334       4,720       3,434       2,535   Marketing     4,428       3,576       2,339       3,633       4,428       3,576   Legal and professional fees     8,022       6,871       2,458       9,596       8,022       6,871   FDIC assessments     2,212       1,660       2,601       2,365       2,212       1,660   Amortization of intangibles     1,424       1,033       783       2,486       1,424       1,033   Asset dispositions expense     472       488       740       553       472       488   Branch closures and new branding     0       4,958       0       0       0       4,958   Net loss on other real estate owned and repossessed assets     239       310       1,289   Net (gain)/loss on other real estate owned and repossessed assets     (509 )     239       310   Early redemption cost for Federal Home Loan Bank advances     1,777       0       0   Other     12,209       9,988       9,472       13,515       12,209       9,988   TOTAL   $ 103,770     $ 93,366     $ 75,152     $ 130,881     $ 103,770     $ 93,366   Note N Shareholders' Equity   The Company has reserved 300,000 common shares for issuance in connection with an employee stock purchase plan and 1,000,000 common shares for issuance in connection with an employee profit sharing plan. At December 31, 2015,2016, an aggregate of 192,443202,897 shares and 11,94032,120 shares, respectively, have been issued as a result of employee participation in these plans. A 1 for 5 reverse stock split was effective as of December 13, 2013. Each five shares of the Company's common stock was automatically converted to one share of the Company's common stock. Any fractional post-split shares as a result of the reverse split were rounded up to the nearest whole post-split share. Shareholders of the Company previously authorized the Board of Directors to approve a reverse stock split at the annual meeting in May 2013. All share amounts have been restated for all years presented. A common stock offering was completed during November 2013 adding $75 million to capital, with approximately $47 million (net of issuance costs) received during November 2013, and $25 million received in January 2014 from a single investor that was required to obtain approval of the Federal Reserve Bank for its investment. Of the funds received, $50 million was utilized to redeem the Series A Preferred Stock at December 31, 2013, with the remainder available for future growth and general corporate purposes.   Holders of common stock are entitled to one vote per share on all matters presented to shareholders as provided in the Company’s Articles of Incorporation. The Company implemented a dividend reinvestment plan during 2007, issuing no shares from treasury stock during 20152016 and 2014.2015.   Required Regulatory Capital             Minimum for Capital Adequacy Purpose   Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions             Minimum for Capital Adequacy Purpose (1)   Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions     Amount   Ratio   Amount   Ratio   Amount   Ratio     Amount   Ratio   Amount   Ratio   Amount   Ratio     (Dollars in thousands)     (Dollars in thousands)   SEACOAST BANKING CORP                                                                                                 (CONSOLIDATED)                                                                                                                                                                                                 At December 31, 2016:                                                 Total Capital Ratio (to risk-weighted assets)   $ 432,058       13.25 %   $ 260,790       ≥ 8.00%       n/a       n/a   Tier 1 Capital Ratio (to risk-weighted assets)     408,596       12.53       195,592       ≥ 6.00%       n/a       n/a   Common Equity Tier 1 Capital (to risk-weighted assets)     351,769       10.79       146,694       ≥ 4.50%       n/a       n/a   Tier 1 Leverage Ratio (to adjusted average assets)     408,596       9.15       178,656       4.0       n/a       n/a   At December 31, 2015:                                                                                                 Total Capital Ratio (to risk-weighted assets)   $ 383,039       16.01 %   $ 191,413     ≥ 8.00 %     N/A       N/A     $ 383,039       16.01 %   $ 191,413       ≥ 8.00%       n/a       n/a   Tier 1 Capital Ratio (to risk-weighted assets)     363,873       15.21       143,560     ≥ 6.00 %     N/A       N/A       363,873       15.21       143,560       ≥ 6.00%       n/a       n/a   Common Equity Tier 1 Capital (to risk-weighted assets)     317,004       13.25       107,670     ≥ 4.50 %     N/A       N/A       317,004       13.25       107,670       ≥ 4.50%       n/a       n/a   Tier 1 Leverage Ratio (to adjusted average assets)     363,873       10.70       136,009     ≥ 4.00 %     N/A       N/A       363,873       10.70       136,009       ≥ 4.00%       n/a       n/a   At December 31, 2014:                                                 Total Capital (to risk-weighted assets)   $ 322,765       16.25 %   $ 158,903     ≥ 8.00 %     N/A       N/A   Tier 1 Capital (to risk-weighted assets)     305,665       15.39       79,452     ≥ 4.00 %     N/A       N/A   Tier 1 Capital (to adjusted average assets)     305,665       10.32       124,731     ≥ 4.00 %     N/A       N/A                                                                                                   SEACOAST NATIONAL BANK                                                 SEACOAST BANK                                                 (A WHOLLY OWNED BANK SUBSIDIARY)                                                                                                 At December 31, 2016:                                                 Total Capital Ratio (to risk-weighted assets)   $ 415,147       12.75 %   $ 260,491       ≥ 8.00%     $ 325,987       ≥ 10.00%   Tier 1 Capital Ratio (to risk-weighted assets)     391,685       12.03       195,368       ≥ 6.00%       260,790       ≥   8.00%   Common Equity Tier 1 Capital (to risk-weighted assets)     391,685       12.03       146,526       ≥ 4.50%       211,892       ≥   6.50%   Tier 1 Leverage Ratio (to adjusted average assets)     391,685       8.78       178,501       4.0       223,320       ≥   5.00%   At December 31, 2015:                                                                                                 Total Capital Ratio (to risk-weighted assets)   $ 337,259       14.11 %   $ 191,240     ≥ 8.00 %   $ 239,050     ≥ 10.00 %   $ 337,259       14.11 %   $ 191,240       ≥ 8.00%     $ 239,050       ≥ 10.00%   Tier 1 Capital Ratio (to risk-weighted assets)     318,093       13.31       143,430     ≥ 6.00 %     191,240     ≥ 8.00 %     318,093       13.31       143,430       ≥ 6.00%       191,240       ≥   8.00%   Common Equity Tier 1 Capital (to risk-weighted assets)     318,093       13.31       107,572     ≥ 4.50 %     155,382     ≥ 6.50 %     318,093       13.31       107,572       ≥ 4.50%       155,382       ≥   6.50%   Tier 1 Leverage Ratio (to adjusted average assets)     318,093       9.36       135,929     ≥ 4.00 %     169,911     ≥ 5.00 %     318,093       9.36       135,929       ≥ 4.00%       169,911       ≥   5.00%   At December 31, 2014:                                                 Total Capital (to risk-weighted assets)   $ 284,555       14.32 %   $ 158,925     ≥ 8.00 %   $ 198,656     ≥ 10.00 % Tier 1 Capital (to risk-weighted assets)     267,455       13.46       79,462     ≥ 4.00 %     119,193     ≥ 6.00 % Tier 1 Capital (to adjusted average assets)     267,455       9.04       118,409     ≥ 4.00 %     148,011     ≥ 5.00 % (1) Excludes new capital conservation buffer of 0.625% the Company is subject to, which if not exceeded may constrain dividends, equity repurchases and compensation.   N/A n/a - Not Applicablenot applicable   The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Under new Basel III standards adopted January 1, 2015, deferred tax assets (DTAs) were substantially restricted in regulatory capital calculations, the Common Equity Tier 1 Capital calculation was created, and new minimum adequacy and well capitalized thresholds were established. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.   Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total, Tier 1 capital and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). Management believes, as of December 31, 2015,2016, that the Company meets all capital adequacy requirements to which it is subject. The Company is well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth above. At December 31, 2015, the Company’s deposit-taking bank subsidiary met2016, the capital conservation buffer requisite the Company is subject to was 0.625%. On February 21, 2017, the Company closed on its offering of 8,912,500 shares of common stock, consisting of 2,702,500 shares sold by the Company and leverage ratio requirements6,210,000 shares sold by one of its shareholders. Seacoast received proceeds of $56.8 million that will be reduced by legal and professional fees from the issuance of the 2,702,500 shares of its common stock. The Company intends to use the net proceeds from the offering for well capitalized banks.general corporate purposes, including potential future acquisitions and to support organic growth. Seacoast did not receive any proceeds from the sale of its shareholder's shares. Herbert Lurie, who is a member of our board of directors, is a consulting Senior Advisor to Guggenheim Securities, LLC, an underwriter of this offering. Under his consulting agreement with Guggenheim, Mr. Lurie is entitled to receive customary compensation, including in connection with our offering of common stock. Mr. Lurie has recused himself and will continue to recuse himself from any board decisions regarding the offering. Note O Seacoast Banking Corporation of Florida (Parent Company Only) Financial Information   Balance Sheets       December 31       2015     2014       (In thousands)   ASSETS                 Cash   $ 364     $ 480   Securities purchased under agreement to resell with subsidiary bank, maturing within 30 days     43,323       37,836   Investment in subsidiaries     383,516       341,302   Other assets     10       0       $ 427,213     $ 379,618                     LIABILITIES AND SHAREHOLDERS' EQUITY                 Subordinated debt   $ 69,961     $ 64,584   Other liabilities     3,799       2,383   Shareholders' equity     353,453       312,651       $ 427,213     $ 379,618       December 31       2016     2015       (In thousands)   ASSETS                 Cash   $ 648     $ 364   Securities purchased under agreement to resell with subsidiary bank, maturing within 30 days     12,676       43,323   Investment in subsidiaries     494,809       383,516   Other assets     1,211       10       $ 509,344     $ 427,213                     LIABILITIES AND SHAREHOLDERS' EQUITY                 Subordinated debt   $ 70,241     $ 69,961   Other liabilities     3,706       3,799   Shareholders' equity     435,397       353,453       $ 509,344     $ 427,213   151  Statements of Income (Loss)       Year Ended December 31       2015     2014     2013       (In thousands)                       Income                         Interest/other   $ 115     $ 43     $ 28   Dividends from subsidiary Bank     0       0       0         115       43       28                             Interest expense     1,671       1,053       958   Other expenses     317       1,000       450   Loss before income tax benefit and equity  in undistributed income of subsidiaries     (1,873 )     (2,010 )     (1,380 ) Income tax benefit     (661 )     (704 )     (2,281 )                           Income (loss) before equity in undistributed income of subsidiaries     (1,212 )     (1,306 )     901   Equity in undistributed income of subsidiaries     23,353       7,002       51,088   Net income   $ 22,141     $ 5,696     $ 51,989       Year Ended December 31       2016     2015     2014       (In thousands)                       Income                         Interest/other   $ 352     $ 115     $ 43   Dividends from subsidiary Bank     0       0       0         352       115       43                             Interest expense     2,115       1,671       1,053   Other expenses     462       317       1,000   Loss before income tax benefit and equity in undistributed income of subsidiaries     (2,225 )     (1,873 )     (2,010 ) Income tax benefit     (801 )     (661 )     (704 )                           Income (loss) before equity in undistributed income of subsidiaries     (1,424 )     (1,212 )     (1,306 ) Equity in undistributed income of subsidiaries     30,626       23,353       7,002   Net income   $ 29,202     $ 22,141     $ 5,696   152  StatementStatements of Cash Flows       Year Ended December 31       2015     2014     2013       (In thousands)   Cash flows from operating activities                         Interest received   $ 78     $ 43     $ 5   Interest paid     (1,487 )     (1,058 )     (957 ) Dividends received     37       24       23   Income taxes received     0       573       1,797   Other     122       (964 )     (494 ) Net cash provided by (used in) operating activities     (1,250 )     (1,382 )     374                             Cash flows from investing activities                         Decrease (increase) in securities purchased under agreement to resell, maturing within 30 days, net     (5,487 )     (37,044 )     2,130   Net cash provided by (used in) investment activities     (5,487 )     (37,044 )     2,130                             Cash flows from financing activities                         Issuance of common stock, net of related expense     0       24,637       46,977   Subordinated debt increase     6,494       13,208       0   Stock based employment plans     127       142       190   Redemption of preferred stock     0       0       (50,000 ) Dividends paid on preferred shares     0       0       (2,819 ) Net cash provided by (used in) financing activities     6,621       37,987       (5,652 )                           Net change in cash     (116 )     (439 )     (3,148 ) Cash at beginning of year     480       919       4,067   Cash at end of year   $ 364     $ 480     $ 919                             RECONCILIATION OF INCOME (LOSS) TO CASH USED IN OPERATING ACTIVITIES                         Net income (loss)   $ 22,141     $ 5,696     $ 51,989   Adjustments to reconcile net income (loss) to net cash used in operating activities:                         Equity in undistributed income of subsidiaries     (23,353 )     (7,002 )     (51,088 ) Other, net     (38 )     (76 )     (527 ) Net cash provided by (used in) operating activities   $ (1,250 )   $ (1,382 )   $ 374       Year Ended December 31       2016     2015     2014       (In thousands)   Cash flows from operating activities                         Net Income   $ 29,202     $ 22,141     $ 5,696   Equity in undistributed (income) loss of subsidiaries     (30,626 )     (23,353 )     (7,002 ) Net (increase) decrease in other assets     (12 )     10       0   Net increase (decrease) in other liabilities     12       (48 )     (76 ) Net cash used in operating activities     (1,424 )     (1,250 )     (1,382 )                           Cash flows from investing activities                         Net cash paid for bank acquisition     (28,905 )     0       0   Investment in unconsolidated subsidiary     (200 )     0       0   Decrease (increase) in securities purchased under agreement to resell, maturing within 30 days, net     30,647       (5,487 )     (37,044 ) Net cash provided by (used in) investment activities     1,542       (5,487 )     (37,044 )                           Cash flows from financing activities                         Issuance of common stock, net of related expense     0       0       24,637   Subordinated debt increase     0       6,494       13,208   Stock based employment plans     166       127       142   Net cash provided by financing activities     166       6,621       37,987                             Net change in cash     284       (116 )     (439 ) Cash at beginning of year     364       480       919   Cash at end of year   $ 648     $ 364     $ 480                             Supplemental disclosure of cash flow information:                         Cash paid during the period for interest   $ 1,824     $ 1,487     $ 1,058   Note P Contingent Liabilities and Commitments with Off-Balance Sheet Risk   The Company and its subsidiaries, because of the nature of their business, are at all times subject to numerous legal actions, threatened or filed. Management presently believes that none of the legal proceedings to which it is a party are likely to have a materially adverse effect on the Company’s consolidated financial condition, or operating results or cash flows.   The Company's subsidiary bank is party to financial instruments with off balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit, and limited partner equity commitments.   The subsidiary bank’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contract or notional amount of those instruments. The subsidiary bank uses the same credit policies in making commitments and standby letters of credit as they do for on balance sheet instruments.   Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The subsidiary bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the bank upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, equipment, and commercial and residential real estate. Of the $343,245,000$532,082,000 in commitments to extend credit outstanding at December 31, 2015, $156,026,0002016, $273,658,000 is secured by 1-4 family residential properties for individuals with approximately $23,859,000$87,292,000 at fixed interest rates ranging from 3.002.875 to 5.125%5.250%.   Standby letters of credit are conditional commitments issued by the subsidiary bank to guarantee the performance of a customer to a third party. These instruments have fixed termination dates and most end without being drawn; therefore, they do not represent a significant liquidity risk. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The subsidiary bank holds collateral supporting these commitments for which collateral is deemed necessary. The extent of collateral held for secured standby letters of credit at December 31, 20152016 and 20142015 amounted to $5,259,000$46,647,000 and $2,617,000,$5,259,000, respectively.   Unfunded limited partner equity commitments at December 31, 20152016 totaled $2,911,000$10,148,000 that the Company has committed to small business investment companies under the SBIC Act to be used to provide capital to small businesses.businesses, and entities that provide low income housing tax credits.     December 31       2015     2014       (In thousands)   Contract or Notional Amount                 Financial instruments whose contract amounts represent credit risk:                                   Commitments to extend credit   $ 343,245     $ 238,130                     Standby letters of credit and financial guarantees written:                 Secured     9,593       2,685   Unsecured     93       200                     Unfunded limited partner equity commitment     2,911       3,715   Unfunded commitments for the Company at December 31, 2016 and 2015 are as follows:     December 31       2016     2015       (In thousands)   Contract or Notional Amount                                   Financial instruments whose contract amounts represent credit risk:                                   Commitments to extend credit   $ 532,082     $ 343,245                     Standby letters of credit and financial guarantees written:                 Secured     10,776       9,593   Unsecured     554       93                     Unfunded limited partner equity commitment     10,148       2,911     The Company’s subsidiary bank renewed its contract for outsourced data services on December 31, 2012 for a period of five years and six months which requires a minimum payment for early termination without cause as follows:   Year Ended   (In thousands)   Year End December 31,   (In thousands)               2015   $ 10,380   2016     6,228     $ 7,707   2017     2,076       2,569   Note Q Supplemental Disclosures for Consolidated Statements of Cash Flows Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities for the three years ended:     Year Ended December 31       2015     2014     2013       (In thousands)                       Net income   $ 22,141     $ 5,696     $ 51,989   Adjustments to reconcile net income to net cash (used) provided by operating activities                         Depreciation     3,773       3,268       2,776   Net amortization of premiums and discounts on securities     3,920       2,353       3,882   Accretion of purchase accounting loan discount     (5,152 )     (750 )     0   Other amortization and accretion     (2,791 )     494       (172 ) Change in loans available for sale, net     (11,920 )     1,754       22,189   Provision (recpature) for loan losses, net     2,644       (3,486 )     3,188   Deferred tax benefit     0       0       (40,552 ) Gain on sale of securities     (161 )     (469 )     (419 ) Gain on sale of loans     (702 )     (419 )     (455 ) Loss on sale or write down of foreclosed assets     239       310       1,295   Loss on branch closures and disposition of equipment     183       4,493       1   Stock based employee benefit expense     2,859       1,299       246   Earnings on bank owned life insurance     (1,426 )     (219 )     0   Change in interest receivable     (903 )     (2,763 )     160   Change in interest payable     (682 )     847       (27 ) Change in prepaid expenses     (1,201 )     (591 )     4,562   Change in accrued taxes     12,990       4,294       (102 ) Change in other assets     (1,060 )     3,175       792   Change in other liabilities     238       2,660       499   Net cash provided (used) by operating activities   $ 22,989     $ 21,946     $ 49,852                             Supplemental disclosure of non cash investing activities                         Fair value adjustment to securities   $ (2,256 )   $ 8,985     $ (21,957 ) Transfers from loans to other real estate owned     5,255       4,789       5,087   Transfers from loans to loans available for sale     0       0       379   Securities principal receivable recorded in other assets     230       101       159   Transfer from securities held for investment to available for sale     0       0       13,818   Transfer from securities available for sale to held for investment     0       158,781       0   Purchase of securities under trade date accounting     28,343       0       0   156  Note R Fair Value Fair Value Instruments Measured at Fair Value   In certain circumstances, fair value enables the Company to more accurately align its financial performance with the market value of actively traded or hedged assets and liabilities. Fair values enable a company to mitigate the non-economic earnings volatility caused from financial assets and financial liabilities being carried at different bases of accounting, as well as to more accurately portray the active and dynamic management of a company’s balance sheet. ASC 820 provides additional guidance for estimating fair value when the volume and level of activity for an asset or liability has significantly decreased. In addition, it includes guidance on identifying circumstances that indicate a transaction is not orderly. Under ASC 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at December 31, 20152016 and 2014December 31, 2015 included:         Quoted Prices in   Significant Other   Significant Other         Quoted Prices in   Significant Other   Significant Other         Active Markets for   Observable   Unobservable         Active Markets for   Observable   Unobservable     Fair Value   Identical Assets   Inputs   Inputs     Fair Value   Identical Assets   Inputs   Inputs   (Dollars in thousands)   Measurements   Level 1   Level 2   Level 3     Measurements     Level 1     Level 2     Level 3   At December 31, 2016                                 Available for sale securities (1)   $ 950,503     $ 100     $ 950,403     $ 0   Loans held for sale (2)     15,332       0       15,332       0   Loans (3)     4,120       0       3,170       950   Other real estate owned (4)     9,949       0       0       9,949                                   At December 31, 2015                                                                 Available for sale securities (1)   $ 790,766     $ 225     $ 790,541     $ 0     $ 790,766     $ 225     $ 790,541     $ 0   Loans held for sale (2)     23,998       0       23,998       0       23,998       0       23,998       0   Loans (3)     7,511       0       6,052       1,459       7,511       0       6,052       1,459   Other real estate owned (4)     7,039       0       598       6,441       7,039       0       598       6,441                                   At December 31, 2014                                 Available for sale securities (1)   $ 741,375     $ 3,899     $ 737,476     $ 0   Loans held for sale (2)     12,078       0       12,078       0   Loans (3)     10,409       0       8,324       2,085   Other real estate owned (4)     7,462       0       1,468       5,994   (1) See Note D for further detail of fair value of individual investment categories. (2) Recurring fair value basis determined using observable market data. (3) See Note F. Nonrecurring fair value adjustments to loans identified as impaired reflect full or partial write-downs that are based on the loan’s observable market price or current appraised value of the collateral in accordance with ASC 310. (4) Fair value is measured on a nonrecurring basis in accordance with ASC 360.   The fair value of impaired loans which are not troubled debt restructurings is based on recent real estate appraisals less estimated costs of sale.  For residential real estate impaired loans, appraised values or internal evaluation are based on the comparative sales approach.  These impaired loans are considered level 2 in the fair value hierarchy. For commercial and commercial real estate impaired loans, evaluations may use either a single valuation approach or a combination of approaches, such as comparative sales, cost and/or income approach.  A significant unobservable input in the income approach is the estimated capitalization rate for a given piece of collateral.  At December 31, 20152016 the range of capitalization rates utilized to determine fair value of the underlying collateral averaged approximately 8.0%7.8%. Adjustments to comparable sales may be made by an appraiser to reflect local market conditions or other economic factors and may result in changes in the fair value of an asset over time.  As such, the fair value of these impaired loans is considered level 3 in the fair value hierarchy. Impaired loans measured at fair value total $4.1 million with a specific reserve of $0.4 million at December 31, 2016, compared to $7.5 million with a specific reserve of $2.9 million at December 31, 2015, compared to $10.4 million with a specific reserve of $2.4 million at December 31, 2014.2015.              Fair value of available for sale securities are determined using valuation techniques for individual investments as described in Note A.   When appraisals are used to determine fair value and the appraisals are based on a market approach, thefair value of OREO is classified as level 2. When the fair value of OREO is based on appraisals which require significant adjustments to market-based valuation inputs or apply an income approach based on unobservable cash flows, the fair value of OREO is classified as Level 3.   Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company's monthly and/or quarter valuation process.   During 2015,the twelve months ended December 31, 2016, there were no transfers between level 1 and level 2assets carried at fair value.                   For loans classified as level 3 the transfers in totaled $1.1$0.3 million consisting of loans that became impaired during 2015.for thetwelve months ended December 31, 2016.  Transfers out consisted of charge offs of $0.2$0.1 million, and loan foreclosures migrating to OREO and other reductions (including principal payments) totaling $1.5$0.7 million.   Charge-offs recognized upon loan foreclosures are generally offset by general or specific allocations of the allowance for loan losses and generally do not, and did not during the reported periods, significantly impact the Company's provision for loan losses.   For OREO classified as level 3 during 2015 sales and valuation write-downs of $3.4 million, andthe twelve months ended December 31,  2016, transfers in consisted offoreclosed loans totaling $3.4$2.5 million and valuation adjustment increasemigrated branches taken out of $0.4 million.service of $7.3 million, transfers out totaled $6.4 million and consisted entirely of sales.                   The carrying amount and fair value of the Company's other significant financial instruments that are not measuredat fair value on a recurring basis in the balance sheet as of December 31, 2016 and December 31, 2015 is as follows:         Quoted Prices in   Significant Other   Significant Other         Quoted Prices in   Significant Other   Significant Other         Active Markets for   Observable   Unobservable         Active Markets for   Observable   Unobservable     Carrying   Identical Assets   Inputs   Inputs     Carrying   Identical Assets   Inputs   Inputs   (Dollars in thousands)   Amount   Level 1   Level 2   Level 3     Amount     Level 1     Level 2     Level 3   At December 31, 2016                                 Financial Assets                                 Securities held to maturity (1)   $ 372,498     $ 0     $ 369,881     $ 0   Loans, net     2,852,016       0       0       2,840,993   Financial Liabilities                                 Deposits     3,523,245       0       0       3,523,322   Subordinated debt     70,241       0       54,908       0                                   At December 31, 2015                                                                 Financial Assets                                                                 Securities held to maturity (1)   $ 203,525     $ 0     $ 202,813     $ 0     $ 203,525     $ 0     $ 202,813     $ 0   Loans, net     2,129,691       0       0       2,147,024       2,129,691       0       0       2,147,024   Financial Liabilities                                                                 Deposits     2,844,387       0       0       2,843,800       2,844,387       0       0       2,843,800   Borrowings     50,000       0       51,788       0   FHLB borrowings     50,000       0       51,788       0   Subordinated debt     69,961       0       52,785       0       69,961       0       52,785       0                                   At December 31, 2014                                 Financial Assets                                 Securities held to maturity (1)   $ 207,904     $ 0     $ 208,788     $ 0   Loans, net     1,794,405       0       0       1,814,746   Financial Liabilities                                 Deposits     2,416,534       0       0       2,417,355   Borrowings     50,000       0       52,735       0   Subordinated debt     64,583       0       53,861       0     (1) See Note D for further detail of recurring fair value basis of individual investment categories. (1) See Note D for further detail of recurring fair value basis of individual investment categories. The short maturity of Seacoast’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and cash equivalents, interest bearing deposits with other banks, federal funds purchased, FHLB borrowings and securities sold under agreement to repurchase, maturing within 30 days.   The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at December 31, 20152016 and 2014:December 31, 2015:   Securities: U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. Other securities are reported at fair value utilizing Level 2 inputs. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.   The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment portfolio securities that are esoteric or that have a complicated structure. The Company’s entire portfolio consists of traditional investments, the majority of which are U.S. Treasury obligations, federal agency bullet, mortgage pass-through securities, or general obligation or revenue based municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. The fair value of the collateralized loan obligations areis determined from broker quotes. From time to time, the Company will validate, on a sample basis, prices supplied by brokers and the independent pricing service by comparison to prices obtained from other brokers and third-party sources or derived using internal models.   Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, mortgage, etc. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories. The fair value of loans, except residential mortgages, is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risks inherent in the loan. For residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusting for prepayment assumptions using discount rates based on secondary market sources. The estimated fair value is not an exit price fair value under ASC 820 when this valuation technique is used.   Loans held for sale: Fair values are based upon estimated values to be received from independent third party purchasers. These loans are intended for sale and the Company believes the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on contractual terms of the loan in accordance with Company policy on loans held for investment. None of the loans are 90 days or more past due or on nonaccrual at December 31, 20152016 and 2014,December 31, 2015, respectively.   December 31,     December 31,   December 31,   (Dollars in thousands)   2015   2014     2016   2015   Aggregate fair value   $ 23,998     $ 12,078     $ 15,332     $ 23,998   Contractual balance     23,384       11,769       14,904       23,384   Gains (losses)     614       309       428       614     Deposit Liabilities: The fair value of demand deposits, savings accounts and money market deposits is the amount payable at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for funding of similar remaining maturities. Note S R Earnings Per Share   Basic earnings per common share were computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the year.   The number of shares utilized to compute earnings per share for the years ended December 31,In 2016, 2015, 2014 and 2013, have been restated to reflect a 1 for 5 reverse stock split effective December 13, 2013. In 2015, 2014, and 2013, options and warrants to purchase 131,000, 456,000, 293,000, and 102,000293,000 shares, respectively, were antidilutive and accordingly were excluded in determining diluted earnings per share.       Year Ended December 31       Net Income           Per Share       (Loss)     Shares     Amount       (Dollars in thousands,       except per share data)   2015                         Basic Earnings Per Share                         Income available to common shareholders   $ 22,141       33,495,827     $ 0.66   Diluted Earnings Per Share                         Employee restricted stock and stock options (See Note J)             248,344           Income available to common shareholders plus assumed conversions   $ 22,141       33,744,171     $ 0.66                             2014                         Basic Earnings Per Share                         Income available to common shareholders   $ 5,696       27,538,955     $ 0.21   Diluted Earnings Per Share                         Employee restricted stock and stock options (See Note J)             177,940           Income available to common shareholders plus assumed conversions   $ 5,696       27,716,895     $ 0.21                             2013                         Basic Earnings Per Share                         Income available to common shareholders   $ 47,916       19,449,560     $ 2.46   Diluted Earnings Per Share                         Employee restricted stock (See Note J)             200,445           Income available to common shareholders plus assumed conversions   $ 47,916       19,650,005     $ 2.44   160      Year Ended December 31       Net Income           Per Share       (Loss)     Shares     Amount       (Dollars in thousands,       except per share data)   2016                         Basic Earnings Per Share                         Income available to common shareholders   $ 29,202       36,872,007     $ 0.79   Diluted Earnings Per Share                         Employee restricted stock and stock options (See Note J)             636,039           Income available to common shareholders plus assumed conversions   $ 29,202       37,508,046     $ 0.78                             2015                         Basic Earnings Per Share                         Income available to common shareholders   $ 22,141       33,495,827     $ 0.66   Diluted Earnings Per Share                         Employee restricted stock and stock options (See Note J)             248,344           Income available to common shareholders plus assumed conversions   $ 22,141       33,744,171     $ 0.66                             2014                         Basic Earnings Per Share                         Income available to common shareholders   $ 5,696       27,538,955     $ 0.21   Diluted Earnings Per Share                         Employee restricted stock and stock options (See Note J)             177,940           Income available to common shareholders plus assumed conversions   $ 5,696       27,716,895     $ 0.21     Note TS - Business Combinations Acquisition of The BANKshares Inc. The Company, through its subsidiary bank, purchased The BANKshares Inc. (“BANKshares”) in Winter Park, Florida on October 1, 2014. The Company acquired 100% of the outstanding common stock of BANKshares. Each share of BANKshares common stock was exchanged for 0.4975 shares of the Company’s common stock. Based on the closing price of the Company’s common stock on September 30, 2014, the resulting purchase price was $76.8 million. The Company’s principal reasons for the acquisition were to further solidify its market share in the Central Florida market and expand its customer base to enhance deposit fee income and leverage operating costs through economies of scale. The acquisition contributed $516.3 million in total deposits and $365.4 million in loans to our balance sheet, and significantly increased net interest income. It also provides opportunities for growth in one of Florida’s most vibrant markets. Goodwill and core deposit intangibles for the BANKshares acquisition were $25.2 million and $7.8 million, respectively, at acquisition date. See Note H – Goodwill and Acquired Intangible Assets for related disclosures. Goodwill was deemed to be nondeductible for tax purposes as this acquisition was a nondeductible transaction.   Acquisition of Grand Bankshares, Inc. On July 17, 2015, the Company completed its previously announced acquisition of Grand Bankshares, Inc. (“Grand”) as set forth in the Agreement and Plan of Merger (“Agreement”) whereby Grand merged with and into the Company. Pursuant to and simultaneously with the merger of Grand with and into the Company, Grand’s wholly owned subsidiary bank, Grand Bank & Trust of Florida (“GB”), merged with and into the Company’s subsidiary bank, Seacoast National Bank. The acquisition related costs were approximately $3.1 million and these expenses are reported in noninterest expenses in the consolidated statement of income. As a result of this acquisition, the Company expects to further solidify its market share in the attractive Palm Beach market, expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results to the extent the Company earns more from interest earning assets than it pays in interest on its interest bearing liabilities.   The Company acquired 100% of the outstanding common stock of Grand. The purchase price consisted of stock, and additionally the Company paid approximately $1.48 million in cash for all of Grand’s outstanding shares of preferred B stock, representing the par value of $1,000 per share of preferred B stock. Each share of Grand common stock and Preferred A stock was exchanged for 0.3114 shares of the Company’s common stock, or approximately 1.09 million shares of Company stock. Based on the price of the Company’s common stock of $15.75 per share on July 17, 2015, plus cash paid for Grand’s outstanding shares of preferred B stock, the total purchase price was $18.7 million.     July 17, 2015     July 15, 2015   Grand preferred B shares exchanged for cash   $ 1,481,000     $ 1,481,000                   Number of Grand common shares outstanding     3,501,185       3,501,185   Per share exchange ratio     0.3114       0.3114   Number of shares of common stock issued     1,090,269       1,090,269   Multiplied by common stock price per share on July 17, 2015   $ 15.75   Multiplied by comon stock price per share on July 17, 2015   $ 15.75   Value of common stock issued     17,171,737       17,171,737                   Total purchase price   $ 18,652,737     $ 18,652,737     The acquisition is accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition. As previously disclosed the fair value initially assigned to assets acquired and liabilities assumed were preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values are known. Based on recoveries of principal and interest on loans previously charged off and OREO appraisals received subsequent to the acquisition date, the Company adjusted its initial fair value estimates at acquisition date as indicated in the table below. Determining fair values of assets and liabilities, especially the loan portfolio and foreclosed real estate, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Adjustments under ASU Topic 805 resulted in a bargain purchase gain of $416,000 that was recorded in noninterest income in the fourth quarter of 2015.             Measurement             July 17, 2015     Period     July 17, 2015       (Initially Reported)     Adjustments     (As Adjusted)       (in thousands)   Assets:                         Cash   $ 34,408     $ 0     $ 34,408   Investment securities     46,366       0       46,366   Loans, net     109,988       1,304       111,292   Fixed assets     4,191       0       4,191   OREO     2,424       437       2,861   Core deposit intangibles     2,564       0       2,564   Goodwill     555       (555 )     0   Other assets     14,163       (770 )     13,393       $ 214,659     $ 416     $ 215,075                             Liabilities:                         Deposits   $ 188,469     $ 0     $ 188,469   Borrowings     1,658       0       1,658   Subordinated debt     5,151       0       5,151   Other liabilities     728       0       728       $ 196,006     $ 0     $ 196,006   Bargain purchase gain           $ (416 )           The table below presents information with respect to the fair value of acquired loans, as well as their unpaid principal balance (“Book Balance”) at acquisition date.       July 17, 2015   (Dollars in thousands)   Book Balance     Fair Value   Loans:                 Single family residential real                 estate   $ 6,158     $ 6,379   Commercial real estate     82,782       81,191   Construction/development/land     979       913   Commercial loans     2,393       1,516   Consumer and other loans     14,575       13,692   Purchased credit-impaired     10,993       7,601   Total acquired loans   $ 117,880     $ 111,292       July 17, 2015   (Dollars in thousands)   Book Balance     Fair Value   Loans:                 Single family residential real estate   $ 6,158     $ 6,379   Commercial real estate     82,782       81,191   Construction/development/land     979       913   Commercial loans     2,393       1,516   Consumer and other loans     14,575       13,692   Purchased credit-impaired     10,993       7,601   Total acquired loans   $ 117,880     $ 111,292     For the loans acquired we first segregated all acquired loans with specifically identified credit deficiency factor(s). The factors we considered to identify loans as Purchase Credit Impaired (“PCI”) loans were all acquired loans that were nonaccrual, 60 days or more past due, designated as Trouble Debt Restructured (“TDR”), graded “special mention” or “substandard.” These loans were then evaluated to determine estimated fair values as of the acquisition date. As required by generally accepted accounting principles, we are accounting for these loans pursuant to ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and fair value of the loans as of July 17, 2015March 11, 2016 for purchased credit impaired loans. Contractually required principal and interest payments have been adjusted for estimated prepayments.   (Dollars in thousands)   July 17, 2015           Contractually required principal and interest   $ 12,552   Non-accretable difference     (4,249 ) Cash flows expected to be collected     8,303   Accretable yield     (702 ) Total purchased credit-impaired loan acquired   $ 7,601   (Dollars in thousands)   July 17, 2015           Contractually required principal and interest   $ 12,552   Non-accretable difference     (4,249 ) Cash flows expected to be collected     8,303   Accretable yield     (702 ) Total purchased credit impaired loans acquired   $ 7,601     Second, loansLoans without specifically identified credit deficiency factors are referred to as Purchased Unimpaired Loans (“PULs”) for disclosure purposes. These loans were then evaluated to determine estimated fair values as of the acquisition date. Although no specific credit deficiencies were identifiable, we believe there is an element of risk as to whether all contractual cash flows will be eventually received. Factors that were considered included the economic environment both nationally and locally as well as the real estate market particularly in Florida. We have applied ASC Topic 310-20 accounting treatment to the PULs.   The Company believes the deposits assumed from the acquisition have an intangible value. The Company applied ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. In determining the valuation amount, a third party analyzed the deposits based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships. The Company recognized no goodwill for this acquisition, based on the fair values of the assets acquired and liabilities assumed as of the acquisition date and, in some instances, based on use of third party experts for valuations. The acquisition of Grand constituted a business combination. Accordingly, the assets acquired and liabilities assumed are presented at their fair values. The determination of fair value requires management to make estimates about discount rates and future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. Fair value estimates are based on the information available, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available.   The operating results of the Company for the twelve months ended December 31, 2015 includes the operating results of the acquired assets and assumed liabilities since the date of acquisition of July 17, 2015. Pro-forma data for the twelve months ending December 31, 2015 and 2014 listed in the table below presents pro-forma information as if the acquisition occurred at the beginning of 2014.     Twelve Months Ended       December 31,   (Dollars in thousands, except per share amounts)   2015     2014                 Net interest income   $ 113,082     $ 82,124   Net income available to common shareholders     25,408       8,399   EPS - basic   $ 0.75     $ 0.29   EPS - diluted     0.74       0.29   Acquisition of BMO Harris Central Florida Offices, Deposits and Loans On October 14, 2015, the Company announced that Seacoast’s wholly-owned subsidiary, Seacoast National Bank, entered into a Branch Sale Agreement with BMO Harris Bank N.A. (“BMO”) pursuant to which it has agreed to purchase, subject to the terms of the Agreement, fourteen branches of BMO located in the Orlando Metropolitan Statistical Area (“MSA”). Seacoast National Bank will assume approximately $355 million in deposits and approximately $70 million in loans related to business banking customers at a deposit premium of 3.0% of the deposit balances. Regulatory approval has been granted and subject to the satisfaction of customary closing conditions, the acquisition is expected to close in June 2016.   Acquisition of Floridian Financial Group, Inc. On November 3, 2015,March 11, 2016, the Company announced that it signed a definitive agreement to acquirecompleted its acquisition of Floridian Financial Group, Inc. (“Floridian”), the parent company of Floridian Bank. UponSimultaneously, upon completion of the merger, Seacoast expects thatFloridian’s wholly owned subsidiary bank, Floridian Bank, will bewas merged with and into Seacoast National Bank. Floridian, headquartered in Lake Mary, Florida, currently operatesoperated 10 branches in Orlando and Daytona Beach, and will addof which several were consolidated with Seacoast locations. This acquisition added approximately $426$417 million in total assets, $361$337 million in deposits, and $289$267 million in loans to Seacoast. As a result of this acquisition the Company expects to further solidify its market share in the Central Florida market, expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results to the extent the Company earns more from interest earning assets than it pays in interest on its interest bearing liabilities.   The Company acquired 100% of the outstanding common stock of Floridian. Under the terms of the definitive agreement, Floridian shareholders will have the right to receive,received, at their election, (i) the combination of $4.29 in cash and 0.5291 shares of Seacoast common stock, (ii) $12.25 in cash, or (iii) 0.8140 shares of Seacoast common stock, subject to a customary proration mechanism so that the aggregate consideration mix equals 35% cash and 65% Seacoast shares (based on Seacoast’s ten-day average closing price of $15.05$15.47 per share on March 11, 2016).     March 11, 2016   Floridian shares exchanged for cash   $ 26,699,000             Number of Floridian common shares outstanding     6,222,119   Per share exchange ratio     0.5289   Number of shares of common stock issued     3,291,066   Multiplied by common stock price per share on March 11, 2016   $ 15.47   Value of common stock issued     50,912,791             Total purchase price   $ 77,611,791   The acquisition is accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The Company recognized goodwill on this acquisition which is nondeductible for tax purposes as this acquisition is a nontaxable transaction. The goodwill was calculated based on the fair values of the assets acquired and liabilities assumed as of October 29, 2015)the acquisition date. Loans that were nonaccrual and all loan relationships identified as impaired as of the acquisition date were considered by management to be credit impaired and were accounted for pursuant to ASC Topic 310-30.           Measurement             March 11, 2016     Period     March 11, 2016       (Initially Reported)     Adjustments     (As Adjusted)       (in thousands)   Assets:                         Cash   $ 28,243     $ 0     $ 28,243   Investment securities     66,912       95       67,007   Loans, net     268,249       (2,112 )     266,137   Fixed assets     7,801       (628 )     7,173   Core deposit intangibles     3,375       0       3,375   Goodwill     29,985       1,647       31,632   Other assets     12,879       998       13,877       $ 417,444     $ 0     $ 417,444                             Liabilities:                         Deposits   $ 337,341     $ 0     $ 337,341   Other liabilities     2,492       0       2,492       $ 339,833     $ 0     $ 339,833   The table below presents information with respect to the fair value of acquired loans, as well as their unpaid principal balance (“Book Balance”) at acquisition date.     March 11, 2016   (Dollars in thousands)   Book Balance     Fair Value   Loans:                 Single family residential real estate   $ 38,304     $ 37,367   Commercial real estate     172,531       167,105   Construction/development/land     20,546       18,108   Commercial loans     39,070       37,804   Consumer and other loans     3,385       3,110   Purchased credit-impaired     6,186       2,643   Total acquired loans   $ 280,022     $ 266,137   For the loans acquired we first segregated all acquired loans with specifically identified credit deficiency factor(s). The factors we considered to identify loans as Purchase Credit Impaired (“PCI”) loans were all acquired loans that were nonaccrual, 60 days or more past due, designated as Trouble Debt Restructured (“TDR”), graded “special mention” or “substandard.” These loans were then evaluated to determine estimated fair values as of the acquisition date. As required by generally accepted accounting principles, we are accounting for these loans pursuant to ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and fair value of the loans as of March 11, 2016 for purchased credit impaired loans. Contractually required principal and interest payments have been adjusted for estimated prepayments. (Dollars in thousands)   March 11, 2016           Contractually required principal and interest   $ 8,031   Non-accretable difference     (4,820 ) Cash flows expected to be collected     3,211   Accretable yield     (568 ) Total purchased credit impaired loans acquired   $ 2,643   Loans without specifically identified credit deficiency factors are referred to as Purchased Unimpaired Loans (“PULs”) for disclosure purposes. These loans were then evaluated to determine estimated fair values as of the acquisition date. Although no specific credit deficiencies were identifiable, we believe there is an element of risk as to whether all contractual cash flows will be eventually received. Factors that were considered included the economic environment both nationally and locally as well as the real estate market particularly in Florida. We have applied ASC Topic 310-20 accounting treatment to the PULs. The Company believes the deposits assumed from the acquisition have an intangible value. The Company applied ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. In determining the valuation amount, deposits will be analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships. The Company recognized goodwill of $32 million for this acquisition that is nondeductible for tax purposes. The acquisition of Floridian constitutes a business combination. Accordingly, the assets acquired and liabilities assumed are presented at their fair values. The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events, and in some instances rely on use of third party experts. The operating results of the Company for the twelve months ended December 31, 2016 include the operating results of the acquired assets and assumed liabilities since the date of acquisition of March 11, 2016. Pro-forma data for the twelve months ended December 31, 2016 and 2015 listed in the table below present pro-forma information as if the acquisition occurred at the beginning of 2015.     Twelve Months Ended       December 31,   (Dollars in thousands, except per share amounts)   2016     2015                 Net interest income   $ 142,354     $ 122,413   Net income available to common shareholders     30,466       27,070   EPS - basic   $ 0.81     $ 0.74   EPS - diluted     0.80       0.73   Acquisition of BMO Harris Central Florida Offices, Deposits and Loans On June 3, 2016, Seacoast Bank assumed approximately $314 million in deposits related to business and consumer banking customers at a deposit premium of 3.0% of the deposit balances, $63 million in business loans at a loan premium of 0.5%, and fourteen branches of BMO Harris Bank N.A. (“BMO”), located in the Orlando Metropolitan Statistical Area (“MSA”).As a result of this acquisition the Company expects to further improve its market share in the Central Florida market, expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results to the extent the Company earns more from interest earning assets than it pays in interest on its interest bearing liabilities. The fair values listed are preliminary and are subject to adjustment. The acquisition is accounted for under the acquisition method in accordance with ASC Topic 805,Business Combinations. The fair values initially assigned to assets acquired and liabilities assumed are preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values are known. Determining fair values of assets and liabilities, especially the loan portfolio and bank premises and leases related to the fourteen branches acquired, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.           Measurement             June 3, 2016     Period     June 3, 2016       (Initially Reported)     Adjustments     (As Adjusted)       (in thousands)   Assets:                         Cash from BMO (net of payable)   $ 234,094     $ 0     $ 234,094   Loans, net     62,671       0       62,671   Fixed assets     3,715       0       3,715   Core deposit intangibles     5,223       (135 )     5,088   Goodwill     7,645       163       7,808   Other assets     952       (28 )     924       $ 314,300     $ 0     $ 314,300                             Liabilities:                         Deposits   $ 314,248     $ 0     $ 314,248   Other liabilities     52       0       52       $ 314,300     $ 0     $ 314,300   The table below presents information with respect to the fair value of acquired loans, as well as their unpaid principal balance (“Book Balance”) at acquisition date.     June 3, 2016   (Dollars in thousands)   Book Balance     Fair Value   Loans:             Commercial real estate   $ 31,564     $ 31,200   Commercial loans     32,479       31,471   Purchased credit-impaired     0       0   Total acquired loans   $ 64,043     $ 62,671   At June 3, 2016, no loans acquired from BMO Harris were specifically identified with a credit deficiency factor(s). The factors we consider to identify loans as PCI loans are acquired loans that were nonaccrual, 60 days or more past due, designated as TDR, graded “special mention” or “substandard.” PULs were evaluated to determine estimated fair values as of the acquisition date. Although no specific credit deficiencies were identifiable, we believe there is an element of risk as to whether all contractual cash flows will be eventually received. Factors that were considered included the economic environment both nationally and locally as well as the real estate market particularly in Florida. We have applied ASC Topic 310-20 accounting treatment to the PULs. The Company believes the deposits assumed from the acquisition have an intangible value. The Company applied ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. In determining the valuation amount, a third party analyzed the deposits based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships. The Company recognized intangibles (including goodwill) of approximately $13 million for this acquisition that is deductible for tax purposes over a 15-year period. The acquisition of BMO Harris’s Orlando banking operations by Seacoast Bank constitutes a business combination. Accordingly, the assets acquired and liabilities assumed are presented at their fair values. The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change, and in some instances rely on use of third party experts. These fair value estimates are considered preliminary and are subject to change for up to one year after the closing date of the acquisition as additional information becomes available. For the BMO Harris transaction, fair values as presented for loans, fixed assets, deposits, and certain other assets and liabilities are necessarily considered preliminary. Announced Acquisition of GulfShore Bancshares, Inc. On November 3, 2016, the Company announced that it signed a definitive agreement to acquire GulfShore Bancshares, Inc. (“GulfShore”), the parent company of GulfShore Bank. Upon completion of the merger, Seacoast expects GulfShore Bank will be merged into Seacoast Bank. GulfShore, headquartered in Tampa, Florida, currently operates three branches in Tampa and will add approximately $328 million in assets, $276 million in deposits, and $262 million in loans to Seacoast. Under the terms of the definitive agreement, each share of GulfShore common stock (except for specified shares of GulfShore common stock held by GulfShore or Seacoast and any dissenting shares) will be converted into the right to receive the combination of $1.47 in cash and 0.4807 shares of Seacoast common stock.   The transaction closedis expected to close on March 11, 2016.April 7, 2017.   The acquisition iswill be accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Some disclosures are being omitted at this time.time as the information is not available and incomplete. The Company will recognize goodwill on this acquisition which is nondeductible for tax purposes as this acquisition is a nontaxable transaction. The goodwill will be calculated based on the fair values of the assets acquired and liabilities assumed as of the acquisition date, which at the time of this filing were incomplete and reliant upon use of third party experts for pending valuations, including the core deposit intangible and pending appraisals on purchased unimpaired loans and purchased credit impaired loans, bank premises and other fixed assets, other real estate owned, subordinated debt, and remaining assets and other liabilities. Fair value estimates for the Floridian acquisition are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. Loans that are nonaccrual and all loan relationships identified as impaired as of the acquisition date will be considered by management to be credit impaired and will be accounted for pursuant to ASC Topic 310-30.    The Company believes the deposits assumed from the acquisition will have an intangible value. The Company will be applying ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. In determining the valuation amount, deposits will be analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.