EXHIBIT 99.3

To Form 8-K dated October 25, 2012

 

 

 

Seacoast Banking Corporation of Florida

 

Third 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 at http://www.sec.gov.

 

 

  

Highlights

 

 

•

Stable 3Q net interest margin

 

•

Residential mortgage production was strong supporting both loan and noninterest income growth

 

•

Noninterest income in the third quarter continued to increase, up 20.7% compared to prior year

 

•

Core operating expenses managed lower

 

•

Organic growth in households continued to increase this quarter resulting in 2,604 new household relationships up 256 or 11% compared to third quarter 2011

 

•

Noninterest bearing demand deposit organic growth was $84.9 million or 26% year over year

 

•

Other real estate owned declined by 63% year over year

 

•

Nonperforming assets declined $2.4 million to $53.3 million during the quarter

 

•

Solid capital position with estimated tangible common equity (TCE) ratio of 7.6% when DTA valuation allowance of $45.2 million is recaptured.

 

•

Distinctive value proposition has continued to grow the franchise and improve long term profitability and shareholder value

 

 

  

Net Interest Margin

 

 

Opportunities:

 

•

Loan growth

•

Reduction of deposit costs

•

Nonperforming asset resolution

 

Threats:

 

•

Market pressures

 

 

Noninterest Income (excluding securities gains)

Growth in deposit accounts and mortgage banking leads to improved fee growth

 

 

 

$ in thousands		Q-3-2012				Q-2-2012				Q-1-2012				Q-4-2011				Q-3-2011
Total Noninterest Income (excluding securities gains)		$	5,679			$	5,219			$	4,937			$	4,883			$	4,706
Highlights include:
Service Charges		$	1,620			$	1,487			$	1,461			$	1,599			$	1,675
Trust Income			550				564				573				530				541
Mortgage Banking			1,155				902				623				680				556
Brokerage			247				298				234				258				321
Marine			279				244				330				333				229
Interchange Income			1,119				1,154				1,071				953				969

 

  

Mortgage Banking Gains

Our focus on building production capacity is paying off

 

 

 

 

  

Interchange Income

Our focus on building franchise households is paying off

 

 

 

 

Noninterest Expense

Core Operating Expense managed lower

 

 

(Dollars in thousands)		Q-3-2012				Q-2-2012				Q-1-2012				Q-4-2011				Q-3-2011
Noninterest Expense:
Salary and wages		$	7,442			$	7,435			$	7,055			$	7,301			$	6,902
Employee benefits			1,924				1,916				2,010				1,447				1,391
Outsourced data processing costs			1,923				1,834				1,721				1,677				1,685
Telephone/data lines			299				297				289				285				286
Occupancy Expense			1,876				1,943				1,882				1,795				1,967
Furniture and equipment expense			556				607				495				525				555
Marketing expense			785				677				926				947				551
Legal and professional fees			1,122				1,637				1,776				1,299				1,496
FDIC assessments			695				707				706				679				687
Amortization of intangibles			196				196				201				212				211
Other			2,018				2,314				2,163				2,264				1,947
Total Core Operating Expense			18,836				19,563				19,224				18,431				17,678
Severance and organizational changes			839				0				0				0				0
Branch consolidation			232				0				0				0				0
Recovery of prior legal fees			(500	)			0				0				0				0
Net loss on OREO			561				790				1,959				1,254				906
Asset dispositions expense			364				368				527				275				479
Total		$	20,332			$	20,721			$	21,710			$	19,960			$	19,063
Core operating expense to average assets			3.59	%			3.67	%			3.62	%			3.54	%			3.43	%

 

 

 

Positive Household Growth

 

 

Core Ending Deposit Growth

 

Favorable core growth rate

 

 

		($ in thousands)
		3Q-2012				4Q-2011				3Q-2011				Year Over Year
Demand deposits (noninterest bearing)		$	409,145			$	328,356			$	324,256				26.2	%
Savings deposits			926,960				922,361				847,515				9.4	%
Total Demand and Savings		$	1,336,105			$	1,250,717			$	1,171,771				14.0	%
Other time certificates			192,297				244,886				257,486				-25.3	%
Brokered time certificates			8,429				4,558				5,252				60.5	%
Time certificates of $100,000 or more			142,635				218,580				226,765				-37.1	%
Total Time Deposits		$	343,361			$	468,024			$	489,503				-29.9	%
Total Deposits		$	1,679,466			$	1,718,741			$	1,661,274				1.1	%

 

 

Core Ending Deposit Growth

Favorable Mix Shift

 

 

		3Q-2012 Mix				4Q-2011 Mix				3Q-2011 Mix
Demand deposits (noninterest bearing)			24.4	%			19.1	%			19.5	%
Savings deposits			55.2	%			53.7	%			51.0	%
Total Demand and Savings			79.6	%			72.8	%			70.5	%
Other time certificates			11.4	%			14.2	%			15.5	%
Brokered time certificates			0.5	%			0.3	%			0.3	%
Time certificates of $100,000 or more			8.5	%			121.7	%			13.7	%
Total Time Deposits			20.4	%			27.2	%			29.5	%

 

  

Demand Deposits – Personal

 

 

 

Demand Deposits – Business

 

 

  

Credit Analysis

 

		($ in thousands)
		3Q-2012				2Q-2012				1Q-2012				4Q-2011				3Q-2011
Net charge-offs		$	2,416			$	6,275			$	3,415			$	3,268			$	2,830
Net charge-offs to average loans			0.79	%			2.05	%			1.13	%			1.07	%			0.94	%
Loan loss provision		$	900			$	6,455			$	2,305			$	432				-
Allowance to loans at end of period			1.92	%			2.02	%			2.01	%			2.12	%			2.35	%
Coverage ratio – NPLs			52.01	%			50.81	%			58.62	%			89.62	%			87.05	%

 

 

 

Capital Ratios

 

		3Q-2012 Estimate				2Q-2012 Actual				1Q-2012 Actual				4Q-2011 Actual
Tier 1 Capital Ratio			17.41	%			17.17	%			17.36	%			17.51	%
Total Risk Based Capital Ratio			18.67	%			18.43	%			18.62	%			18.77	%
YTD Average Equity to YTD Average Assets			7.84	%			7.87	%			7.85	%			8.01	%
Tangible Equity to Tangible Assets			7.96	%			7.78	%			7.79	%			7.86	%
Tangible Common Equity to Tangible Assets			5.63	%			5.49	%			5.58	%			5.63	%
Tangible Common Equity to Risk Weighted Assets			9.63	%			9.52	%			9.90	%			9.81	%

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Area