Seacoast Banking Corporation of Florida (SBCF)
Filed: 2 May 12, 12:00am
EXHIBIT 99.3
To Form 8-K dated April 26, 2012
Seacoast Banking Corporation of Florida
First Quarter 2012
Cautionary Notice Regarding Forward-Looking Statements
This information contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation,statements about future financial and operating results, ability to realized deferred tax assets, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast’s objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.
You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “support”, “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “further”, “point to,” “project,” “could,” “intend” or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality; governmental monetary and fiscal policies, as well as legislative, tax and regulatory changes; changes in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses. The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations;the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2010 under “Special Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors”, and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC’s Internet website athttp://www.sec.gov.
Highlights
| • | First quarter net income of $938,000 improved when compared to the prior year |
| • | Solid capital position with estimated tangible common equity (TCE) ratio of 7.5% when DTA valuation allowance of $44.5 million is recaptured. |
| • | Other real estate owned declined by 25.9% from the prior quarter |
| • | Nonperforming assets fell to 2.6% of total assets compared to 4.3% last year |
| • | Organic growth in new households achieved higher levels resulting in 3,065 new household relationships during the first quarter |
| • | Liquidity remains strong with low cost core funding from deposits and sweep repos |
| • | Noninterest bearing demand deposit organic growth linked quarter was $66.2 million or 20.2% |
| • | Commercial loans closed totaled $13.5 million and the active pipeline grew to $98.0 million |
| • | Recurring expenses remain well managed |
| • | Operating trends continue to be encouraging and we remain acutely focused on executing client satisfaction and retention initiatives to drive steadily improving results |
Capital Ratios
| 1Q-2012 Estimate | 4Q-2011 Actual | 3Q-2011 Actual | 2Q-2011 Actual | |||||||||||||
| Tier 1 Capital Ratio | 17.36 | % | 17.51 | % | 17.42 | % | 17.65 | % | ||||||||
| Total Risk Based Capital Ratio | 18.62 | % | 18.77 | % | 18.68 | % | 18.92 | % | ||||||||
| YTD Average Equity to YTD Average Assets | 7.85 | % | 8.01 | % | 8.06 | % | 8.06 | % | ||||||||
| Tangible Equity to Tangible Assets | 7.79 | % | 7.86 | % | 8.22 | % | 8.10 | % | ||||||||
| Tangible Common Equity to Tangible Assets | 5.58 | % | 5.63 | % | 5.91 | % | 5.84 | % | ||||||||
| Tangible Common Equity to Risk Weighted Assets | 9.90 | % | 9.81 | % | 9.97 | % | 10.09 | % | ||||||||
Credit Analysis
| ($ in thousands) | ||||||||||||||||||||
| 1Q-2012 | 4Q-2011 | 3Q-2011 | 2Q-2011 | 1Q-2011 | ||||||||||||||||
| Net charge-offs | $ | 3,415 | $ | 3,268 | $ | 2,830 | $ | 4,024 | $ | 4,031 | ||||||||||
| Net charge-offs to average loans | 1.13 | % | 1.07 | % | 0.94 | % | 1.32 | % | 1.32 | % | ||||||||||
| Loan loss provision | $ | 2,305 | $ | 432 | — | $ | 902 | $ | 640 | |||||||||||
| Allowance to loans at end of period | 2.01 | % | 2.12 | % | 2.35 | % | 2.63 | % | 2.80 | % | ||||||||||
| Coverage ratio – NPLs | 58.62 | % | 89.62 | % | 87.05 | % | 67.65 | % | 51.87 | % | ||||||||||
Noninterest Expenses
Controllable Expenses Well Managed with Increased
Investments in Growth
| ($ in thousands) | ||||||||||||||||||||
1Q–2012 |
4Q–2011 |
1Q–2011 | 1Q 2012 vs 4Q 2011 | 1Q 2012 | ||||||||||||||||
| Noninterest expenses | $ | 21,710 | $ | 19,960 | $ | 19,667 | 8.8 | % | 10.4 | % | ||||||||||
| Loss on mortgage buy-backs | — | 283 | - | |||||||||||||||||
| Severence | — | 412 | — | |||||||||||||||||
| TARP Legal and Professional Expenses | 235 | — | — | |||||||||||||||||
| Strategic plan & credit related professional fees | — | — | 247 | |||||||||||||||||
| OREO and REPO expenses(1) | 843 | 608 | 1,397 | |||||||||||||||||
| Net loss on OREO and repossessed assets | 1,959 | 1,254 | 449 | |||||||||||||||||
| Nonrecurring expenses | $ | 3,037 | $ | 2,557 | $ | 2,093 | 18.8 | % | 45.1 | % | ||||||||||
| Expenses Associated with Revenue Growth (2) | 1,332 | 1,113 | 945 | 19.7 | % | 41.0 | % | |||||||||||||
| Core operating expenses | $ | 17,341 | $ | 16,290 | $ | 16,629 | 6.5 | % | 4.3 | % | ||||||||||
| (1) | Does not include personnel expense related to credit administration or default management costs |
| (2) | Expenses associated with revenue growth |
| 1Q–2012 | 4Q–2011 | 1Q–2011 | ||||||||||
| Salaries and Benefits for new CRMs | $ | 358 | $ | 270 | $ | 236 | ||||||
| Incentives and Commissions | 974 | 843 | 709 | |||||||||
| $ | 1,332 | $ | 1,113 | $ | 945 | |||||||
Core Ending Deposit Growth
Favorable Mix Shift
| ($ in thousands) | ||||||||||||||||||||||||
| 1Q-2012 | Mix | 4Q-2011 | Mix | 1Q-2011 | Mix | |||||||||||||||||||
| Demand deposits (noninterest bearing) | $ | 394,532 | 22.7 | % | $ | 328,356 | 19.1 | % | $ | 324,879 | 19.3 | % | ||||||||||||
| Savings deposits | 915,189 | 52.7 | % | 922,361 | 53.7 | % | 828,130 | 49.1 | % | |||||||||||||||
| Total Demand and Savings | $ | 1,309,721 | 75.4 | % | $ | 1,250,717 | 72.8 | % | $ | 1,153,009 | 68.4 | % | ||||||||||||
| Other time certificates | 231,060 | 13.3 | % | 244,886 | 14.2 | % | 278,437 | 16.5 | % | |||||||||||||||
| Brokered time certificates | 7,113 | 0.4 | % | 4,558 | 0.3 | % | 7,371 | 0.4 | % | |||||||||||||||
| Time certificates of $100,000 or more | 189,565 | 10.9 | % | 218,580 | 12.7 | % | 247,393 | 14.7 | % | |||||||||||||||
| Total Time Deposits | $ | 427,738 | 24.6 | % | $ | 468,024 | 27.2 | % | $ | 533,201 | 31.6 | % | ||||||||||||
| Total Deposits | $ | 1,737,459 | $ | 1,718,741 | $ | 1,686,210 | ||||||||||||||||||
Core Ending Deposit Growth
| ($ in thousands) | ||||||||||||||||
1Q-2012 |
4Q-2011 |
1Q-2011 | Year Over Year | |||||||||||||
| Demand deposits (noninterest bearing) | $ | 394,532 | $ | 328,356 | $ | 324,879 | 21.4 | % | ||||||||
| Savings deposits | 915,189 | 922,361 | 828,130 | 10.5 | % | |||||||||||
| Total Demand and Savings | $ | 1,309,721 | $ | 1,250,717 | $ | 1,153,009 | 13.6 | % | ||||||||
| Other time certificates | 231,060 | 244,886 | 278,437 | -17.0 | % | |||||||||||
| Brokered time certificates | 7,113 | 4,558 | 7,371 | -3.5 | % | |||||||||||
| Time certificates of $100,000 or more | 189,565 | 218,580 | 247,393 | -23.4 | % | |||||||||||
| Total Time Deposits | $ | 427,738 | $ | 468,024 | $ | 533,201 | -19.8 | % | ||||||||
| Total Deposits | $ | 1,737,459 | $ | 1,718,741 | $ | 1,686,210 | 3.0 | % | ||||||||
Net Interest Margin
| 1Q-11 | 2Q-11 | 3Q-11 | 4Q-11 | 1Q-12 | ||||||||||||||||
| Net Interest Margin | 3.48 | % | 3.36 | % | 3.44 | % | 3.42 | % | 3.33 | % | ||||||||||
| · | Focus on deposit pricing and favorable deposit trends benefited the margin |
Noninterest Income (excluding securities gains)
| $ in thousands | Q-1-2012 | Q-4-2011 | Q-3-2011 | Q-2-2011 | Q-1-2011 | |||||||||||||||
| Total Noninterest Income (excluding securities gains) | $ | 4,937 | $ | 4,883 | $ | 4,706 | $ | 4,547 | $ | 4,209 | ||||||||||
| Highlights include: | ||||||||||||||||||||
| Service Charges | $ | 1,461 | $ | 1,599 | $ | 1,675 | $ | 1,546 | $ | 1,442 | ||||||||||
| Trust Income | 573 | 530 | 541 | 517 | 523 | |||||||||||||||
| Mortgage Banking | 623 | 680 | 556 | 509 | 395 | |||||||||||||||
| Brokerage | 234 | 258 | 321 | 223 | 320 | |||||||||||||||
| Marine | 330 | 333 | 229 | 349 | 298 | |||||||||||||||
| Interchange Income | 1,071 | 953 | 969 | 995 | 891 | |||||||||||||||
Service Area
