{"id":702358,"date":"2022-10-27T18:08:24","date_gmt":"2022-10-27T22:08:24","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/seacoast-reports-third-quarter-2022-results\/"},"modified":"2022-10-27T18:08:24","modified_gmt":"2022-10-27T22:08:24","slug":"seacoast-reports-third-quarter-2022-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/seacoast-reports-third-quarter-2022-results\/","title":{"rendered":"Seacoast Reports Third Quarter 2022 Results"},"content":{"rendered":"
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\n Significant Expansion in Net Interest Margin and Net Interest Income Highlight Q3 Results<\/strong>
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\n Well-Positioned Balance Sheet with Strong Capital and Liquidity<\/strong>\n <\/p>\n

STUART, Fla., Oct. 27, 2022 (GLOBE NEWSWIRE) — Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) (NASDAQ: SBCF) today reported net income in the third quarter of 2022 of $29.2 million, or $0.47 per diluted share. Third quarter 2022 net income decreased 11% compared to the second quarter of 2022 due to higher provision for credit losses resulting from changes in economic forecast factors, and additional coverage for estimated economic impacts from Hurricane Ian. Third quarter 2022 net income increased 27% compared to the third quarter of 2021. Adjusted net income1<\/sup> for the third quarter of 2022 was $32.8 million, or $0.53 per diluted share. Third quarter 2022 adjusted net income1<\/sup> decreased 10% compared to the second quarter of 2022 due to a higher provision for credit losses. Third quarter 2022 adjusted net income1<\/sup> increased 12% compared to the third quarter of 2021. Pre-tax pre-provision earnings1<\/sup> were $43.1 million in the third quarter of 2022, an increase of 1% compared to the second quarter of 2022 and 23% compared to the third quarter of 2021. Adjusted pre-tax pre-provision earnings1<\/sup> were $49.0 million in the third quarter of 2022, an increase of 6% compared to the second quarter of 2022 and 12% compared to the third quarter of 2021.<\/p>\n

At September 30, 2022, the ratio of tangible common equity to tangible assets increased to 9.79%, and tangible book value per share was $15.98. A decline in the value of the available for sale securities portfolio, driven by rising interest rates during the first three quarters of 2022, negatively impacted the ratio of tangible common equity to tangible assets by 159 basis points and negatively impacted tangible book value per share by $2.93 compared to December 31, 2021.<\/p>\n

For the third quarter of 2022, return on average tangible assets was 1.17%, return on average tangible shareholders’ equity was 11.53%, and the efficiency ratio was 57.13%, compared to 1.29%, 13.01%, and 56.22%, respectively, in the prior quarter, and 1.00%, 9.56%, and 59.55%, respectively, in the prior year quarter. Adjusted return on average tangible assets1<\/sup> in the third quarter of 2022 was 1.27%, adjusted return on average tangible shareholders’ equity1<\/sup> was 12.48%, and the adjusted efficiency ratio1<\/sup> was 53.28%, compared to 1.38%, 13.97%, and 53.15%, respectively, in the prior quarter, and 1.23%, 11.72%, and 51.50%, respectively, in the prior year quarter.<\/p>\n

Charles M. Shaffer, Seacoast’s Chairman and CEO, said, “Seacoast\u2019s team delivered another solid quarter, highlighted by a significant increase in the net interest margin and net interest income, disciplined growth in loan outstandings, and continued strong asset quality metrics. In addition, quarter over quarter, adjusted pre-tax pre-provision earnings of $49.0 million improved 6%, driven by a material increase in net interest income.”<\/p>\n

Shaffer added, “We continue to operate the company with a robust balance sheet, fortified by a tangible common equity ratio of 9.79%, which increased over the prior quarter despite rising interest rates that impacted accumulated comprehensive income. We saw continued improvements in already strong credit quality metrics, and the allowance for credit losses totals $95.3 million, with an additional $19.1 million in purchase discount on acquired loans. This provides meaningful loss absorption capacity which, when aggregated, represents 1.71% of loans outstanding. Seacoast\u2019s balance sheet is supported by one of the best customer franchises in the industry, delivering low-cost funding and liquidity. We closed the quarter with a loan to deposit ratio of 76% which, looking forward, allows remix of the balance sheet to higher-yielding earning assets to support continued growth in net interest income.”<\/p>\n

Shaffer concluded, “I would like to thank all Seacoast associates for focusing on quickly recovering from Hurricane Ian and assisting our customers after the storm passed. All Seacoast branch offices were open within a few days, and the team rapidly pivoted and completed the Apollo and Drummond acquisitions. The team showed remarkable commitment and resilience in the face of a significant weather event, and I am very proud of all involved.”<\/p>\n

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\n Acquisitions Update<\/u>
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Seacoast\u2019s balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit shareholders and expand the franchise across Florida.<\/p>\n

On October 7, 2022, the Company completed the previously announced acquisition of Apollo Bancshares, Inc. (\u201cApollo\u201d), which added approximately $718 million in loans and $857 million in deposits, and will provide expansion into Miami-Dade county, one of the fastest growing and most dynamic markets in the United States. System conversion activities were completed immediately after the closing of the transaction.<\/p>\n

Also on October 7, 2022, the Company completed the previously announced acquisition of Drummond Banking Company (\u201cDrummond\u201d), providing Seacoast with an entry point into Gainesville, Ocala, and surrounding markets adding low-cost core deposits and diversified business lines. At the closing date, Drummond had approximately $590 million in loans and $882 million in deposits, providing a strong core deposit base, which highlights depository relationships that will provide a stable funding source for future loan growth and higher margins in a rising rate environment. Full integration and system conversion activities are expected to be completed in the first quarter of 2023.<\/p>\n

On August 8, 2022, the Company announced its proposed acquisition of Professional Holding Corp. (\u201cProfessional\u201d) (NASDAQ: PFHD), the sixth largest bank headquartered in South Florida. The transaction, which is expected to close in the first quarter of 2023, will increase market share in Miami-Dade, Broward, and Palm Beach counties. Full integration and system conversion activities are expected to be completed late in the second quarter of 2023.<\/p>\n

In the first quarter of 2022, Seacoast completed the acquisitions of Sabal Palm Bancorp, Inc. (\u201cSabal Palm\u201d) in Sarasota and Business Bank of Florida Corp. (\u201cBBFC\u201d) in Brevard County, which collectively added a combined $368 million in loans and $562 million in deposits. Integration activities, including system conversion, were completed in the first quarter of 2022 for BBFC and in the second quarter of 2022 for Sabal Palm.<\/p>\n

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\n Update on Hurricane Ian<\/u>
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In late September, communities across our corporate footprint were impacted by Hurricane Ian. We maintained uninterrupted digital and telephone access for our customers and, having experienced minimal impacts to our branch properties, we fully reopened to serve our communities shortly after the storm had passed. Recovery efforts in many areas continue and the full impacts on people and businesses in the most hard-hit regions are not fully known. In light of these uncertainties, the Company added $2.1 million to the provision for credit losses.<\/p>\n

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\n Financial Results<\/u>
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\n Income Statement<\/em>
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