Seacoast Banking Corporation of Florida

08/08/2025 | Press release | Distributed by Public on 08/08/2025 14:58

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

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 ("Seacoast" or the "Company") and their results of operations. Nearly all of the Company's operations are contained in its banking subsidiary, Seacoast National Bank ("Seacoast Bank" or the "Bank"). Such discussion and analysis should be read in conjunction with the Company's Condensed Consolidated Financial Statements and the related notes included in this report.
The emphasis of this discussion will be on the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be the balances as of June 30, 2025 compared to December 31, 2024.
This discussion and analysis contain statements that may be considered "forward-looking statements" as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See the following section for additional information regarding forward-looking statements.
For purposes of the following discussion, the words "Seacoast" or the "Company" refer to the combined entities of Seacoast Banking Corporation of Florida and its direct and indirect wholly owned subsidiaries.
Special Cautionary Notice Regarding Forward-Looking Statements
Certain statements made or incorporated by reference herein which are not statements of historical fact, including those under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere herein, are "forward-looking statements" within the meaning, and protections, of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, and intentions about future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company's control, and which may cause the actual results, performance or achievements of Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") or its wholly-owned banking subsidiary, Seacoast National Bank ("Seacoast Bank"), to be materially different from those set forth in the forward-looking statements.
All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through the use of words such as "may," "will," "anticipate," "assume," "should," "support," "indicate,"
"would," "believe," "contemplate," "expect," "estimate," "continue," "further," "plan," "point to," "project," "could," "intend," "target" 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 impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within Seacoast's primary market areas, including the effects of continued inflationary pressures, changes in interest rates, tariffs or trade wars (including reduced consumer spending, supply chain issues, and adverse impacts to credit quality), slowdowns in economic growth or recession, and the potential for high unemployment rates, as well as the financial stress on borrowers and changes to customer and client behavior and credit risk as a result of the foregoing;
•Potential impacts of adverse developments in the banking industry, including those highlighted by high-profile bank failures, and including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto (including increases in the cost of our deposit insurance assessments), the Company's ability to effectively manage its liquidity risk and any growth plans, and the availability of capital and funding;
•Governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes including overdraft and late fee caps (if implemented), including those that impact the money supply and inflation;
•The risks of changes in interest rates on the level and composition of deposits (as well as the cost of, and competition for, deposits), loan demand, liquidity and the values of loan collateral, securities, and interest rate sensitive assets and liabilities;
•Interest rate risks (including the impact of interest rates on macroeconomic conditions, customer and client behavior, and on our net interest income), sensitivities, and the shape of the yield curve;
•Changes in accounting policies, rules, and practices;
•Changes in retail distribution strategies, customer preferences and behavior generally and as a result of economic factors, including heightened or persistent inflation;
•Changes in the availability and cost of credit and capital in the financial markets;
•Changes in the prices, values and sales volumes of residential and CRE, especially as they relate to the value of collateral supporting the Company's loans;
•The Company's concentration in CRE loans and in real estate collateral in Florida;
•Seacoast's ability to comply with any regulatory requirements and the risk that the regulatory environment may not be conducive to or may prohibit or delay the consummation of future mergers and/or business combinations, may increase the length of time and amount of resources required to consummate such transactions, and may reduce the anticipated benefit;
•Inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions;
•The impact on the valuation of Seacoast's investments due to market volatility or counterparty payment risk, as well as the effect of a decline in stock market prices on our fee income from our wealth management business;
•Statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally;
•The risks of mergers, acquisitions and divestitures, including Seacoast's ability to continue to identify acquisition targets, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies;
•Changes in technology or products that may be more difficult, costly, or less effective than anticipated;
•The Company's ability to identify and address increased cybersecurity risks, including those impacting vendors and other third parties which may be exacerbated by developments in generative artificial intelligence;
•Fraud or misconduct by internal or external parties, which Seacoast may not be able to prevent, detect or mitigate;
•Inability of Seacoast's risk management framework to manage risks associated with the Company's business;
•Dependence on key suppliers or vendors to obtain equipment or services for the business on acceptable terms;
•Reduction in or the termination of Seacoast's ability to use the online- or mobile-based platform that is critical to the Company's business growth strategy;
•The effects of war or other conflicts, acts of terrorism, natural disasters, including hurricanes in the Company's footprint, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions and/or increase costs, including, but not limited to, property and casualty and other insurance costs;
•Seacoast's ability to maintain adequate internal controls over financial reporting;
•Potential claims, damages, penalties, fines, costs and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions;
•The risks that deferred tax assets could be reduced if estimates of future taxable income from the Company's operations and tax planning strategies are less than currently estimated, the results of tax audit findings, challenges to our tax positions, or adverse changes or interpretations of tax laws;
•The effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, non-bank financial technology providers, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions;
•The failure of assumptions underlying the establishment of reserves for expected credit losses;
•Risks related to, and the costs associated with ESG and anti-ESG matters, including the scope and pace of related rulemaking activity, disclosure requirements and potential litigation;
•A deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the federal budget and economic policy, including the impact of tariffs and trade policies;
•The risk that balance sheet, revenue growth, and loan growth expectations may differ from actual results; and
•Other factors and risks described under "Risk Factors" herein and in any of the Company's subsequent reports filed with the SEC and available on its website at www.sec.gov.
All written or oral forward-looking statements attributable to Seacoast are expressly qualified in their entirety by this cautionary notice. The Company assumes no obligation to update, revise or correct any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.
Business Developments
Third Quarter of 2025 Acquisition of Heartland Bancshares, Inc.
On July 11, 2025, the Company completed its acquisition of Heartland, adding approximately $157 million in loans and $684 million in deposits, along with four branches in Central Florida. Integration activities, including system conversion, are expected to be finalized later in the third quarter of 2025. Seacoast expects the transaction to be accretive to earnings in 2026, with modest dilution to tangible book value that is expected to be earned back in approximately two years.
Proposed Acquisition of Villages Bancorporation, Inc.
On May 29, 2025, the Company announced its proposed acquisition of VBI. The transaction, which is expected to close in the fourth quarter of 2025, will expand the Company's presence in North Central Florida and into The Villages® community. Full integration and system conversion activities are expected to be finalized in the second quarter of 2026.
VBI enjoys the leading market share in the rapidly growing Villages MSA. VBI's low loan-to-deposit ratio and low cost of deposits provide long-term scalable benefits and the opportunity for margin growth and revenue synergies. Seacoast expects the transaction to be accretive to earnings beginning in 2026, with tangible book value dilution earned back in under three years. The majority of cost savings are expected to be realized in 2026.
Organic Growth and Expansion
Seacoast's balanced growth strategy includes both acquisitions and organic growth initiatives. Thus far in 2025, Seacoast has expanded its footprint with the opening of two new branch locations in the greater Fort Lauderdale area, and one new branch location in Tampa, along with key additions to its commercial banking leadership and teams. In recent years, Seacoast has added experienced bankers in dynamic and growing markets, leading to significant growth in new relationships.
Results of Operations
Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at 84 full-service branches across Florida, and through advanced mobile and online banking solutions. The Company's financial results in the second quarter of 2025 include strong growth in loans and lower cost of deposits supporting improved net interest income and net interest margin. Seacoast continues to prudently manage expenses while strategically investing to support continued growth. Highlights for the second quarter of 2025 include:
•Net income of $42.7 million, or $0.50 per average diluted share, an increase of $11.2 million, or 36%, from the prior quarter.
•Strong gains in return on average assets, return on tangible common equity and the efficiency ratio.
•Loans grew 6.4% on an annualized basis to $10.6 billion, and the overall loan pipeline remained robust at $920.9 million.
•Net interest income of $126.9 million, an increase of $8.3 million, or 7%.
•Net interest margin expanded 10 basis points to 3.58% and, excluding accretion on acquired loans, net interest margin expanded five basis points to 3.29%.
•Cost of deposits declined 13 basis points to 1.80%.
•Tangible book value per share of $17.19 increased 12% year over year.
•Strong capital position, with a Tier 1 capital ratio of 14.6% and a tangible common equity to tangible assets ratio of 9.8%.
The Company's focus on organic customer growth and recent talent additions continues to generate momentum across its markets and business segments.
For the second quarter of 2025, the Company reported net income of $42.7 million, or $0.50 per average diluted share, an increase of $11.2 million, or 36%, from the first quarter of 2025 and an increase of $12.4 million, or 41%, compared to the second quarter of 2024. Adjusted net income1for the second quarter of 2025 totaled $44.5 million, or $0.52 per average diluted share, an increase of $12.4 million, or 39%, compared to the first quarter of 2025 and an increase of $14.2 million, or 47%, compared to the second quarter of 2024.
For the six months ended June 30, 2025, net income totaled $74.2 million, or $0.87 per average diluted share, an increase of $17.9 million, or 32%, compared to the six months ended June 30, 2024. For the six months ended June 30, 2025, adjusted net income1totaled $76.6 million, or $0.90 per average diluted share, compared to $61.4 million, or $0.72 per average diluted share for the six months ended June 30, 2024.
Second First Second Six Months Ended June 30,
Quarter Quarter Quarter
2025 2025 2024 2025 2024
Return on average assets 1.08 % 0.83 % 0.82 % 0.96 % 0.77 %
Return on average tangible assets 1.24 % 0.98 % 1.00 % 1.12 % 0.94 %
Return on average tangible shareholders' equity 12.82 10.17 10.75 11.52 10.15
Efficiency ratio 56.95 60.28 60.21 58.55 63.48
Adjusted return on average assets1
1.13 % 0.85 % 0.82 % 0.99 % 0.84 %
Adjusted return on average tangible assets1
1.29 % 1.00 % 1.00 % 1.15 % 1.02 %
Adjusted return on average tangible shareholders' equity1
13.31 10.35 10.76 11.86 10.95
Adjusted efficiency ratio1
55.36 59.53 60.21 57.37 60.67
1Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.
Net Interest Income and Margin
Net interest income for the second quarter of 2025 totaled $126.9 million, an increase of $8.3 million, or 7%, compared to the first quarter of 2025, and an increase of $22.4 million, or 21%, compared to the second quarter of 2024. For the six months ended June 30, 2025, net interest income totaled $245.4 million, an increase of $35.9 million, or 17%, compared to the six months ended June 30, 2024. The increase was driven by higher securities and loan interest income. Securities income increased $3.1 million, or 11%, primarily due to securities purchases in the first half of 2025. Interest income on loans increased by $6.4 million in the second quarter of 2025, reflecting strong loan production and an increase in accretion on acquired loans from higher payoffs. Included in loan interest income was accretion on acquired loans of $10.6 million in the second quarter of 2025, $8.2 million in the first quarter of 2025, and $10.2 million in the second quarter of 2024. Accretion on acquired loans totaled $18.8 million for the six months ended June 30, 2025, compared to $20.8 million for the six months ended June 30, 2024. On the expense side, interest on deposits decreased $3.0 million, or 7%, compared to the prior quarter, and $10.7 million, or 21%, compared to the second quarter of 2024, reflecting a lower cost of deposits. Interest expense on borrowed money increased $3.6 million, or 50%, compared to the first quarter of 2025, and $4.6 million, or 75%, compared to second quarter of
1Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.
2024, largely due to higher short-term borrowings used to fund strategic purchases of securities in advance of the Heartland acquisition.
Net interest margin (on a FTE basis)1 increased ten basis points to 3.58% in the second quarter of 2025, compared to 3.48% in the first quarter of 2025, and expanded 40 basis points from 3.18% in the second quarter of 2024, largely driven by lower deposit costs. Compared to the first quarter of 2025, securities yields decreased one basis point in the second quarter of 2025 to 3.87% and increased 18 basis points from the second quarter of 2024. The yield on loans increased to 5.98% for the second quarter of 2025, an increase of eight basis points from the first quarter of 2025 and increased five basis points from the second quarter of 2024. The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 29 basis points for the second quarter of 2025, 24 basis points in the first quarter of 2025, and 31 basis points in the second quarter of 2024. The cost of deposits was 1.80% in the second quarter of 2025, compared to 1.93% in the first quarter of 2025, and 2.31% in the second quarter of 2024.
For the six months ended June 30, 2025, net interest margin (on a FTE basis)1 increased 32 basis points to 3.53% compared to the six months ended June 30, 2024, largely driven by lower deposit costs. The yield on securities was 3.87% for the six months ended June 30, 2025, compared to 3.59% for the six months ended June 30, 2024. The yield on total loans increased from 5.92% for the six months ended June 30, 2024 to 5.94% for the six months ended June 30, 2025. The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 27 basis points for the six months ended June 30, 2025, compared to 31 basis points for the six months ended June 30, 2024. The cost of deposits was 1.87% for the six months ended June 30, 2025, a decrease of 38 basis points compared to the six months ended June 30, 2024.
The following table details the trend for net interest income and margin results (on a FTE basis)1, the yield on earning assets and the rate paid on interest bearing liabilities for the periods specified:
(In thousands, except ratios)
Net Interest
Income1
Net Interest
Margin1
Yield on
Earning Assets1
Rate on Interest
Bearing Liabilities
Second quarter 2025 $ 127,295 3.58 % 5.45 % 2.66 %
First quarter 2025 118,857 3.48 % 5.41 % 2.74 %
Second quarter 2024 104,657 3.18 % 5.47 % 3.33 %
Six months ended June 30, 2025 246,153 3.53 % 5.43 % 2.70 %
Six months ended June 30, 2024 209,954 3.21 % 5.44 % 3.26 %
1On a FTEbasis, a non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures"for more information and a reconciliation to GAAP.
Average loans increased $175.5 million, or 2%, for the second quarter of 2025 compared to the first quarter of 2025, and increased $553.9 million, or 6%, from the second quarter of 2024. For the six months ended June 30, 2025, average loans increased $451.8 million, or 5%, from the six months ended June 30, 2024.
Average loans as a percentage of average earning assets totaled 74% for the second quarter of 2025, 75% for the first quarter of 2025 and 76% for the second quarter of 2024. For the six months ended June 30, 2025, average loans as a percentage of average earning assets totaled 75%, compared to 76% for the six months ended June 30, 2024.
During the second quarter of 2025, average investment securities increased $291.6 million, or 9.5%, compared to the first quarter of 2025, and increased $735.0 million, or 27.9%, compared to the second quarter of 2024. Securities yields decreased one basis point to 3.87% during the second quarter of 2025 from 3.88% in the first quarter of 2025. For the six months ended June 30, 2025, average investment securities were $3.2 billion, an increase of $615.2 million compared to the six months ended June 30, 2024.
The cost of average interest-bearing liabilities decreased eight basis points in the second quarter of 2025 to 2.66% from 2.74% in the first quarter of 2025, and decreased 67 basis points from 3.33% in the second quarter of 2024. The cost of average total deposits (including noninterest bearing demand deposits) was 1.80% in the second quarter of 2025, 1.93% in the first quarter of 2025 and 2.31% in the second quarter of 2024. For the six months ended June 30, 2025, the cost of average total deposits (including noninterest bearing demand deposits) was 1.87% compared to 2.25% for the six months ended June 30, 2024.
During the second quarter of 2025, average transaction deposits (noninterest and interest-bearing demand) increased $23.9 million compared to the first quarter of 2025 and increased $132.1 million, or 2%, compared to the second quarter of 2024. For the six months ended June 30, 2025, average transaction deposits decreased $189.8 million, or 3%, compared to the six months
ended June 30, 2024. Declines reflect shifts in customer preference during the periods toward money market accounts, which increased $598.1 million, or 17%, in the six months ended June 30, 2025 compared to the prior year period. The Company's deposit mix remains favorable, with 86% of average deposit balances comprised of savings, money market, and demand deposits for the six months ended June 30, 2025.
Average balances of sweep repurchase agreements with customers decreased $15.3 million, or 8%, from the first quarter of 2025 and decreased $107.6 million, or 37%, compared to the second quarter of 2024. The average rate on customer sweep repurchase accounts was 2.62% for the second quarter of 2025, compared to 2.73% for the first quarter of 2025, and 3.68% for the second quarter of 2024. For the six months ended June 30, 2025, the average balance was $193.6 million, compared to an average balance of $313.5 million for the six months ended June 30, 2024 with average rates of 2.68% and 3.70%, respectively.
The Company had an average balance of $724.2 million in FHLB borrowings outstanding for the second quarter of 2025, with an average interest rate of 4.32%, compared to $382.8 million for the first quarter of 2025, with an average interest rate of 4.32%, and $149.2 million for the second quarter of 2024, with an average interest rate of 4.29%. The Company had an average balance of $554.5 million in FHLB borrowings outstanding for the six months ended June 30, 2025, with an average interest rate of 4.32%, compared to $125.8 million for the six months ended June 30, 2024, with an average interest rate of 4.08%.
Long-term debt balances averaged $107.2 million in the second quarter of 2025, $107.0 million in the first quarter of 2025, and $106.5 million in the second quarter of 2024. The average rate on long-term debt for the second quarter of 2025 was 6.41%, a decrease of four basis points compared to the first quarter of 2025 and a decrease of 62 basis points compared to the second quarter of 2024. For the six months ended June 30, 2025, long-term debt averaged $107.1 million, compared to $106.5 million for the six months ended June 30, 2024. The average rate on long-term debt for the six months ended June 30, 2025 was 6.42%, a decrease of 75 basis points compared to the six months ended June 30, 2024.
The following tables detail average balances, net interest income and margin results (on a FTE basis, a non-GAAP measure) for the periods presented:
Average Balances, Interest Income and Expenses, Yields and Rates1
2025 2024
Second Quarter First Quarter Second Quarter
Average Yield/ Average Yield/ Average Yield/
(In thousands, except ratios) Balance Interest Rate Balance Interest Rate Balance Interest Rate
Assets
Earning assets:
Securities:
Taxable ` $ 3,364,825 $ 32,479 3.87 % $ 3,073,108 $ 29,381 3.88 % $ 2,629,716 $ 24,155 3.69 %
Nontaxable 5,321 40 3.02 5,436 41 3.06 5,423 40 2.97
Total Securities 3,370,146 32,519 3.87 3,078,544 29,422 3.88 2,635,139 24,195 3.69
Federal funds sold 183,268 2,041 4.47 265,503 2,945 4.50 510,401 6,967 5.49
Interest bearing deposits with other banks and other investments 137,726 1,720 5.01 105,195 1,254 4.83 98,942 1,361 5.53
Total Loans, net 10,558,997 157,499 5.98 10,383,497 150,973 5.90 10,005,122 147,518 5.93
Total Earning Assets 14,250,137 193,779 5.45 13,832,739 184,594 5.41 13,249,604 180,041 5.47
Allowance for credit losses (141,442) (138,300) (146,380)
Cash and due from banks 152,562 158,750 168,439
Premises and equipment, net 108,206 108,651 110,709
Intangible assets 796,431 801,687 818,914
BOLI 312,384 309,831 302,165
Other assets including deferred tax assets 322,916 322,284 336,256
Total Assets $ 15,801,194 $ 15,395,642 $ 14,839,707
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand $ 2,622,944 $ 10,249 1.57 % $ 2,706,065 $ 11,069 1.66 % $ 2,670,569 $ 14,946 2.25 %
Savings 545,718 881 0.65 529,711 698 0.53 584,490 560 0.39
Money market 4,122,147 29,505 2.87 4,149,460 31,859 3.11 3,665,858 35,813 3.93
Time deposits 1,700,128 15,120 3.57 1,647,938 14,973 3.68 1,631,290 17,928 4.42
Securities sold under agreements to repurchase 185,977 1,214 2.62 201,271 1,357 2.73 293,603 2,683 3.68
FHLB borrowings 724,231 7,803 4.32 382,836 4,081 4.32 149,234 1,592 4.29
Long-term debt, net 107,208 1,712 6.41 107,038 1,700 6.44 106,532 1,862 7.03
Total Interest-Bearing Liabilities 10,008,353 66,484 2.66 9,724,319 65,737 2.74 9,101,576 75,384 3.33
Noninterest demand 3,401,138 3,294,149 3,485,603
Other liabilities 139,495 162,179 134,900
Total Liabilities 13,548,986 13,180,647 12,722,079
Shareholders' equity 2,252,208 2,214,995 2,117,628
Total Liabilities & Equity $ 15,801,194 $ 15,395,642 $ 14,839,707
Cost of deposits 1.80 % 1.93 % 2.31 %
Interest expense as a % of earning assets 1.87 % 1.93 % 2.29 %
Net interest income as a % of earning assets $ 127,295 3.58 % $ 118,857 3.48 % $ 104,657 3.18 %
1On a FTE basis, a non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. All yields and rates have been computed on an annual basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.
Average Balances, Interest Income and Expenses, Yields and Rates1
2025 2024
Six Months Ended June 30, Six Months Ended June 30,
Average Yield/ Average Yield/
(In thousands, except ratios) Balance Interest Rate Balance Interest Rate
Assets
Earning assets:
Securities:
Taxable $ 3,219,772 $ 61,860 3.87 % $ 2,604,327 $ 46,548 3.59 %
Nontaxable 5,378 82 3.07 5,665 81 2.88
Total Securities 3,225,150 61,942 3.87 2,609,992 46,629 3.59
Federal funds sold 224,159 4,986 4.49 440,448 12,023 5.49
Interest bearing deposits with other banks and other investments 121,550 2,974 4.93 97,281 2,489 5.15
Total Loans, net 10,471,732 308,472 5.94 10,019,890 294,825 5.92
Total Earning Assets 14,042,591 378,374 5.43 13,167,611 355,966 5.44
Allowance for credit losses (139,879) (147,401)
Cash and due from banks 155,639 167,586
Premises and equipment, net 108,427 111,550
Intangible assets 799,045 822,222
BOLI 311,114 300,965
Other assets including deferred tax assets 322,603 342,708
Total Assets $ 15,599,540 $ 14,765,241
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand $ 2,664,275 $ 21,318 1.61 % $ 2,694,952 $ 30,212 2.25 %
Savings 537,759 1,579 0.59 606,410 1,100 0.36
Money market 4,135,730 61,362 2.99 3,537,584 67,541 3.84
Time deposits 1,674,177 30,093 3.62 1,610,680 35,049 4.38
Securities sold under agreements to repurchase 193,581 2,571 2.68 313,494 5,762 3.70
FHLB borrowings 554,477 11,886 4.32 125,826 2,552 4.08
Long-term debt, net 107,123 3,412 6.42 106,453 3,796 7.17
Total Interest-Bearing Liabilities 9,867,122 132,221 2.70 8,995,399 146,012 3.26
Noninterest demand 3,347,939 3,507,046
Other liabilities 150,775 144,791
Total Liabilities 13,365,836 12,647,236
Shareholders' equity 2,233,704 2,118,005
Total Liabilities & Equity $ 15,599,540 $ 14,765,241
Cost of deposits 1.87 % 2.25 %
Interest expense as a % of earning assets 1.90 % 2.23 %
Net interest income as a % of earning assets $ 246,153 3.53 % $ 209,954 3.21 %
1On a FTE basis, a non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. All yields and rates have been computed on an annual basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.
Noninterest Income
Noninterest income totaled $24.5 million for the second quarter of 2025, an increase of $2.3 million, or 11%, compared to both the first quarter of 2025 and the second quarter of 2024. Noninterest income totaled $46.7 million for the six months ended June 30, 2025, an increase of $4.0 million, or 9%, compared to the six months ended June 30, 2024.
Noninterest income is detailed as follows:
Second First Second Six Months Ended June 30,
Quarter Quarter Quarter
(In thousands) 2025 2025 2024 2025 2024
Service charges on deposit accounts $ 5,540 $ 5,180 $ 5,342 $ 10,720 $ 10,302
Wealth management income 4,196 4,248 3,766 8,444 7,306
Interchange income 1,895 1,807 1,940 3,702 3,828
Mortgage banking fees 685 404 582 1,089 963
Insurance agency income 1,289 1,620 1,355 2,909 2,646
BOLI income 3,380 2,468 2,596 5,848 4,860
Other 7,497 6,257 6,647 13,754 12,591
24,482 21,984 22,228 46,466 42,496
Securities gains (losses), net 39 196 (44) 235 185
Total $ 24,521 $ 22,180 $ 22,184 $ 46,701 $ 42,681
Service charges on deposits were $5.5 million in the second quarter of 2025, compared to $5.2 million in the first quarter of 2025, and $5.3 million in the second quarter of 2024. For the six months ended June 30, 2025, service charges on deposits totaled $10.7 million, an increase of $0.4 million, or 4%, compared to the six months ended June 30, 2024. The Company's investments in talent and significant market expansion across the state have resulted in continued growth in treasury management services to commercial customers.
Wealth management income, including trust fees and brokerage commissions and fees, was $4.2 million in the second quarter of 2025, a decrease of $0.1 million, or 1%, from the first quarter of 2025 and an increase of $0.4 million, or 11%, compared to the second quarter of 2024. For the six months ended June 30, 2025, wealth management income totaled $8.4 million, an increase of $1.1 million, or 16%, compared to the six months ended June 30, 2024. The wealth management team continues to demonstrate success in building relationships, with assets under management increasing $160.6 million, or 8%, from December 31, 2024, to $2.2 billion at June 30, 2025.
Interchange income increased $0.1 million, or 5%, compared to the first quarter of 2025 and decreased 2% compared to the second quarter of 2024. For the six months ended June 30, 2025, interchange income totaled $3.7 million, a decrease of $0.1 million, or 3%, compared to the six months ended June 30, 2024.
Mortgage banking fees totaled $0.7 million, an increase of $0.3 million, or 70%, from the prior quarter and an increase of $0.1 million, or 18% from the prior year quarter, due to higher saleable production.
Insurance agency income totaled $1.3 million for the three months ended June 30, 2025, compared to $1.6 million in the first quarter of 2025, and $1.4 million in the second quarter of 2024. For the six months ended June 30, 2025, insurance agency income totaled $2.9 million, an increase of $0.3 million, or 10%, compared to the six months ended June 30, 2024, reflecting continued growth and expansion of insurance services.
BOLI income totaled $3.4 million for the second quarter of 2025, an increase of $0.9 million, or 37%, compared to the first quarter of 2025, and an increase of $0.8 million, or 30%, compared to the second quarter of 2024. The increases resulted from a $0.9 million death benefit payout in the second quarter of 2025. For the six months ended June 30, 2025, BOLI income totaled $5.8 million, an increase of $1.0 million, or 20%, compared to the six months ended June 30, 2024.
Other income was $7.5 million in the second quarter of 2025, an increase of $1.2 million, or 20%, compared to the first quarter of 2025, and an increase of $0.9 million, or 13%, compared to the second quarter of 2024. For the six months ended June 30, 2025, other income totaled $13.8 million, an increase of $1.2 million, or 9%, compared to the six months ended June 30, 2024. The second quarter of 2025 included $3.0 million in tax refunds received related to a prior bank acquisition. Other changes in each period reflect variability in income from SBIC investments, loan swap-related fees, and other fees correlating with growth in customers and accounts.
Net securities activity resulted in gains of $39 thousand during the second quarter of 2025, gains of $0.2 millionin the first quarter of 2025, and losses of $44 thousand in the second quarter of 2024. Net securities activity resulted in gains of $0.2 million for each of the six months ended June 30, 2025 and 2024.
Noninterest Expenses
Noninterest expense for the second quarter of 2025 totaled $91.7 million, an increase of $1.1 million, or 1%, compared to the first quarter of 2025, and an increase of $9.2 million, or 11%, from the second quarter of 2024. For the six months ended June 30, 2025, noninterest expense totaled $182.3 million, an increase of $9.4 million, or 5%, compared to the six months ended June 30, 2024. Seacoast continues to prudently manage expenses while strategically investing to support continued growth. Noninterest expenses are detailed as follows:
Second First Second Six Months Ended June 30,
Quarter Quarter Quarter
(In thousands) 2025 2025 2024 2025 2024
Salaries and wages $ 44,438 $ 42,248 $ 38,937 $ 86,686 $ 79,241
Employee benefits 8,106 8,861 6,861 16,967 14,750
Outsourced data processing costs 8,525 8,504 8,210 17,029 20,328
Occupancy 7,483 7,350 7,180 14,833 15,217
Furniture and equipment 2,125 2,128 1,956 4,253 3,967
Marketing 2,958 2,748 3,266 5,706 5,921
Legal and professional fees 2,071 2,740 1,982 4,811 4,133
FDIC assessments 2,108 2,194 2,131 4,302 4,289
Amortization of intangibles 5,131 5,309 6,003 10,440 12,295
OREO expense and net loss (gain) on sale 8 241 (109) 249 (135)
Provision for credit losses on unfunded commitments 150 150 251 300 501
Merger-related charges 2,422 1,051 - 3,473 -
Other 6,205 7,073 5,869 13,278 12,401
Total $ 91,730 $ 90,597 $ 82,537 $ 182,327 $ 172,908
Salaries and wages totaled $44.4 million for the second quarter of 2025, $42.2 million for the first quarter of 2025, and $38.9 million for the second quarter of 2024. The second quarter of 2025 reflects higher performance driven incentive compensation. For the six months ended June 30, 2025, salaries and wages totaled $86.7 million, an increase of $7.4 million, or 9%, compared to the six months ended June 30, 2024. The increases compared to the second quarter of 2024 and six months ended June 30, 2024 reflect the successful recruiting and onboarding of banking teams and talent across our footprint.
During the second quarter of 2025, employee benefits, which include costs associated with the Company's self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $8.1 million, a decrease of $0.8 million, or 9%, compared to the seasonally higher first quarter of 2025, and an increase of $1.2 million, or 18%, compared to the second quarter of 2024. For the six months ended June 30, 2025, employee benefit costs totaled $17.0 million, an increase of $2.2 million, or 15%, compared to the six months ended June 30, 2024.
The Company utilizes third parties for its core data processing systems. Ongoing data processing costs are directly related to the number of transactions processed and the negotiated rates associated with those transactions. Outsourced data processing costs totaled $8.5 million for the second quarter of 2025 and the first quarter of 2025, and $8.2 million for the second quarter of 2024. For the six months ended June 30, 2025, outsourced data processing costs totaled $17.0 million, a decrease of $3.3 million, or 16%, compared to the six months ended June 30, 2024. In the first quarter of 2024, the Company incurred $4.1 million in charges associated with contract terminations and modifications to consolidate systems.
Total occupancy and furniture and equipment expenses were $9.6 million in the second quarter of 2025, $9.5 million in the first quarter of 2025, and $9.1 million in the second quarter of 2024. For the six months ended June 30, 2025, occupancy and furniture and equipment expenses totaled $19.1 million, a decrease of $0.1 million, or 1%, compared to the six months ended June 30, 2024.
Marketing expenses totaled $3.0 million in the second quarter of 2025, $2.7 million in the first quarter of 2025, and $3.3 million in the second quarter of 2024. For the six months ended June 30, 2025, marketing expenses totaled $5.7 million, a decrease of $0.2 million, or 4%, compared to the six months ended June 30, 2024. Changes between periods are primarily driven by the timing of various campaigns to support customer growth initiatives.
Legal and professional fees for the second quarter of 2025 were $2.1 million, a decrease of $0.7 million, or 24%, compared to the first quarter of 2025, and an increase of $0.1 million, or 4%, compared to the second quarter of 2024. For the six months ended June 30, 2025, legal and professional fees totaled $4.8 million, an increase of $0.7 million, or 16%, compared to the six months ended June 30, 2024.
Merger-related charges were $2.4 million in the second quarter of 2025 and $1.1 million in the first quarter of 2025, reflecting expenses related to the Heartland acquisition and the proposed VBI acquisition. There were no merger-related charges in the 2024 periods.
Provision for Credit Losses
The provision for credit losses was $4.4 million in the second quarter of 2025, compared to $9.3 million in the first quarter of 2025, and $4.9 million in the second quarter of 2024. For the six months ended June 30, 2025, the provision for credit losses was $13.6 million, compared to $6.3 million for the six months ended June 30, 2024. Allowance coverage of 1.34% remains flat compared to December 31, 2024.
Income Taxes
For the second quarter of 2025, the Company recorded tax expense of $12.6 million, an increase of $3.2 million, or 34%, compared to the first quarter of 2025 and an increase of $3.7 million, or 41%, compared to the second quarter of 2024. The effective tax rate for the second quarter of 2025 was 22.8%, compared to 23.0% in the first quarter of 2025 and 22.8% in the second quarter of 2024. For the six months ended June 30, 2025, tax expense totaled $22.0 million, an increase of $5.2 million, or 31%, compared to the six months ended June 30, 2024, with an effective tax rate of 22.9% in each period.
New federal tax legislation was signed into law on July 4, 2025, which includes a broad range of tax reform provisions, and extends or makes permanent various tax provisions that were originally enacted in the 2017 Tax Cuts and Jobs Act. The Company is evaluating the impact of the new legislation on its consolidated financial statements.
Explanation of Certain Unaudited Non-GAAP Financial Measures
This report contains financial information determined by methods other than GAAP. The financial highlights provide reconciliations between GAAP and adjusted financial measures including net income, FTE net interest income, noninterest income, noninterest expense, tax adjustments, net interest margin and other financial ratios. Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's performance. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might define or calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.
Reconciliation of Non-GAAP Measures
Second First Second Six Months Ended June 30,
Quarter Quarter Quarter
(Amounts in thousands, except per share data) 2025 2025 2024 2025 2024
Net income $ 42,687 $ 31,464 $ 30,244 $ 74,151 $ 56,250
Total noninterest income 24,521 22,180 22,184 46,701 42,681
Securities (gains) losses, net (39) (196) 44 (235) (185)
Total adjustments to noninterest income (39) (196) 44 (235) (185)
Total adjusted noninterest income $ 24,482 $ 21,984 $ 22,228 $ 46,466 $ 42,496
Total noninterest expense 91,730 90,597 82,537 182,327 172,908
Merger-related charges (2,422) (1,051) - (3,473) -
Branch reductions and other expense initiatives - - - - (7,094)
Adjustments to noninterest expense (2,422) (1,051) - (3,473) (7,094)
Adjusted noninterest expense $ 89,308 $ 89,546 $ 82,537 $ 178,854 $ 165,814
Income taxes 12,589 9,386 8,909 21,975 16,739
Tax effect of adjustments 604 217 11 821 1,751
Adjusted income taxes 13,193 9,603 8,920 22,796 18,490
Adjusted net income $ 44,466 $ 32,102 $ 30,277 $ 76,568 $ 61,408
Earnings per diluted share, as reported $ 0.50 $ 0.37 $ 0.36 $ 0.87 $ 0.66
Adjusted earnings per diluted share 0.52 0.38 0.36 0.90 0.72
Average diluted shares outstanding 85,479 85,388 84,816 85,454 84,799
Adjusted noninterest expense $ 89,308 $ 89,546 $ 82,537 $ 178,854 $ 165,814
Provision for credit losses on unfunded commitments (150) (150) (251) (300) (501)
OREO expense and net (loss) gain on sale (8) (241) 109 (249) 135
Amortization of intangibles (5,131) (5,309) (6,003) (10,440) (12,295)
Net adjusted noninterest expense $ 84,019 $ 83,846 $ 76,392 $ 167,865 $ 153,153
Net adjusted noninterest expense $ 84,019 $ 83,846 $ 76,392 $ 167,865 $ 153,153
Average tangible assets 15,004,763 14,593,955 14,020,793 14,800,495 13,943,019
Net adjusted noninterest expense to average tangible assets 2.25 % 2.33 % 2.19 % 2.29 % 2.21 %
Net revenue $ 151,385 $ 140,697 $ 126,608 $ 292,082 $ 252,183
Total adjustments to net revenue (39) (196) 44 (235) (185)
Impact of FTE adjustment 431 340 233 772 452
Adjusted net revenue on a FTE basis $ 151,777 $ 140,841 $ 126,885 $ 292,619 $ 252,450
Adjusted efficiency ratio 55.36 % 59.53 % 60.21 % 57.37 % 60.67 %
Net interest income $ 126,864 $ 118,517 $ 104,424 $ 245,381 $ 209,502
Impact of FTE adjustment 431 340 233 772 452
Net interest income including FTE adjustment 127,295 118,857 104,657 246,153 209,954
Total noninterest income 24,521 22,180 22,184 46,701 42,681
Total noninterest expense less provision for credit losses on unfunded commitments 91,580 90,447 82,286 182,027 172,407
Second First Second Six Months Ended June 30,
Quarter Quarter Quarter
(Amounts in thousands, except per share data) 2025 2025 2024 2025 2024
Pre-tax pre-provision earnings 60,236 50,590 44,555 110,827 80,228
Total adjustments to noninterest income (39) (196) 44 (235) (185)
Total adjustments to noninterest expense including OREO expense and net (gain) loss on sale 2,430 1,292 (109) 3,722 6,959
Adjusted pre-tax pre-provision earnings $ 62,627 $ 51,686 $ 44,490 $ 114,314 $ 87,002
Average assets 15,801,194 15,395,642 14,839,707 15,599,540 14,765,241
Less average goodwill and intangible assets (796,431) (801,687) (818,914) (799,045) (822,222)
Average tangible assets $ 15,004,763 $ 14,593,955 $ 14,020,793 $ 14,800,495 $ 13,943,019
Return on average assets (ROA) 1.08 % 0.83 % 0.82 % 0.96 % 0.77 %
Impact of other adjustments for adjusted net income 0.05 0.02 - 0.03 0.07
Adjusted ROA 1.13 0.85 0.82 0.99 0.84
ROA 1.08 0.83 0.82 0.96 0.77
Impact of removing average intangible assets and related amortization 0.16 0.15 0.18 0.16 0.17
Return on average tangible assets (ROTA) 1.24 0.98 1.00 1.12 0.94
Impact of other adjustments for adjusted net income 0.05 0.02 - 0.03 0.08
Adjusted ROTA 1.29 % 1.00 % 1.00 % 1.15 % 1.02 %
Average shareholders' equity $ 2,252,208 $ 2,214,995 $ 2,117,628 $ 2,233,704 $ 2,118,005
Less average goodwill and intangible assets (796,431) (801,687) (818,914) (799,045) (822,222)
Average tangible equity $ 1,455,777 $ 1,413,308 $ 1,298,714 $ 1,434,659 $ 1,295,783
Return on average shareholders' equity 7.60 % 5.76 % 5.74 % 6.69 % 5.34 %
Impact of removing average intangible assets and related amortization 5.22 4.41 5.01 4.83 4.81
Return on average tangible common equity (ROTCE) 12.82 10.17 10.75 11.52 10.15
Impact of other adjustments for adjusted net income 0.49 0.18 0.01 0.34 0.80
Adjusted ROTCE 13.31 % 10.35 % 10.76 % 11.86 % 10.95 %
Loan interest income1
$ 157,499 $ 150,973 $ 147,518 $ 308,472 $ 294,826
Accretion on acquired loans (10,583) (8,221) (10,178) (18,804) (20,773)
Loan interest income excluding accretion on acquired loans1
$ 146,916 $ 142,752 $ 137,340 $ 289,668 $ 274,053
Yield on loans1
5.98 % 5.90 % 5.93 % 5.94 % 5.92 %
Impact of accretion on acquired loans (0.40) (0.32) (0.41) (0.36) (0.42)
Yield on loans excluding accretion on acquired loans1
5.58 % 5.58 % 5.52 % 5.58 % 5.50 %
Net interest income1
$ 127,295 $ 118,857 $ 104,657 $ 246,153 $ 209,954
Accretion on acquired loans (10,583) (8,221) (10,178) (18,804) (20,773)
Net interest income excluding accretion on acquired loans1
$ 116,712 $ 110,636 $ 94,479 $ 227,349 $ 189,181
Net interest margin1
3.58 % 3.48 % 3.18 % 3.53 % 3.21 %
Second First Second Six Months Ended June 30,
Quarter Quarter Quarter
(Amounts in thousands, except per share data) 2025 2025 2024 2025 2024
Impact of accretion on acquired loans (0.29) (0.24) (0.31) (0.27) (0.31)
Net interest margin excluding accretion on acquired loans1
3.29 % 3.24 % 2.87 % 3.26 % 2.89 %
Securities interest income1
$ 32,519 $ 29,422 $ 24,195 $ 61,942 $ 46,629
FTE adjustment to securities (7) (7) (7) (15) (14)
Securities interest income excluding FTE adjustment 32,512 29,415 24,188 61,927 46,615
Loan interest income1
157,499 150,973 147,518 308,472 294,825
FTE adjustment to loans (424) (333) (226) (757) (438)
Loan interest income excluding FTE adjustment 157,075 150,640 147,292 307,715 294,387
Net interest income1
127,295 118,857 104,657 246,153 209,954
FTE adjustments to securities (7) (7) (7) (15) (14)
FTE adjustments to loans (424) (333) (226) (757) (438)
Net interest income excluding FTE adjustments $ 126,864 $ 118,517 $ 104,424 $ 245,381 $ 209,502
1On a FTE basis. All yields and rates have been computed using amortized cost.
Financial Condition
Total assets as of June 30, 2025 were $15.9 billion, an increase of $768.6 million, or 5%, from December 31, 2024.
Securities
Information related to yields, maturities, carrying values and fair value of the Company's securities is set forth in "Note 3 - Securities" in this report.
At June 30, 2025, the Company had $2.9 billion in AFS securities and $613.3 million in HTM securities. The Company's total debt securities portfolio increased $617.8 million from December 31, 2024. Throughout the first half of 2025, the Company made strategic securities purchases to deploy liquidity in advance of the Heartland acquisition.
Debt securities generally return principal and interest monthly. The modified duration of the AFS securities portfolio and the total portfolio was 5.1 and 5.3, respectively, at June 30, 2025 compared to 4.7 and 4.9, respectively, at December 31, 2024.
At June 30, 2025, AFS securities had gross unrealized losses of $173.4 million and gross unrealized gains of $17.6 million, compared to gross unrealized losses of $211.3 million and gross unrealized gains of $3.5 million at December 31, 2024.
The credit quality of the Company's securities holdings is primarily investment grade. U.S. Treasury securities, obligations of U.S. government agencies, and obligations of U.S. government sponsored entities totaled $2.9 billion, or 91%, of the total portfolio.
The portfolio includes $113.4 million, with a fair value of $107.4 million, in private label residential and commercial mortgage-backed securities and collateralized mortgage obligations. Included are $108.8 million, with a fair value of $102.8 million, in private label residential securities with weighted-average credit support of 22%. The collateral underlying these mortgage investments includes both fixed-rate and adjustable-rate residential mortgage loans. Commercial securities totaled $4.7 million, with a fair value of $4.6 million. These securities have weighted-average credit support of 43%. The collateral underlying these mortgages are primarily pooled commercial real estate loans.
The Company also has invested $258.0 million in floating rate CLOs. CLOs are special purpose vehicles that purchase first lien broadly syndicated corporate loans while providing support to senior tranche investors. As of June 30, 2025, all of the Company's CLOs were in AAA/AA tranches with weighted-average credit support of 32%. The Company utilizes credit models with assumptions of loan level defaults, recoveries, and prepayments to evaluate each security for potential credit losses. The result of this analysis did not indicate expected credit losses.
HTM securities consist solely of mortgage-backed securities and collateralized mortgage obligations guaranteed by U.S. government-sponsored entities, each of which is expected to recover any price depreciation over its holding period as the debt securities move to maturity. The Company has significant liquidity and available borrowing capacity through other sources if needed, and has the intent and ability to hold these investments to maturity.
At June 30, 2025, the Company has determined that all debt securities in an unrealized loss position are the result of both broad investment type spreads and the current interest rate environment. Management believes that each investment will recover any price depreciation over its holding period as the debt securities move to maturity, and management has the intent and ability to hold these investments to maturity if necessary. Therefore, at June 30, 2025, no allowance for credit losses has been recorded.
Loan Portfolio
Loans, net of unearned income and excluding the allowance for credit losses, were $10.6 billion at June 30, 2025, a $308.9 million, or 3.0%, increase from December 31, 2024.
The Company remains committed to sound risk management procedures. Portfolio diversification in terms of asset mix, industry, and loan type has been and continues to be an important element of the Company's lending strategy. The average loan size is $437 thousand, and the average commercial loan size is $872 thousand at June 30, 2025, reflecting the Company's longtime focus on granularity and on creating valuable customer relationships. Lending policies contain guardrails that pertain to lending by type of collateral and purpose, along with limits regarding loan concentrations and the principal amount of loans. The Company's exposure to CRE lending remains well below regulatory limits (see "Loan Concentrations").
The following tables detail loan portfolio composition at June 30, 2025 and December 31, 2024 for portfolio loans, PCD loans, and loans purchased which are not considered PCD ("Non-PCD") as defined in "Note 4 - Loans".
June 30, 2025
(In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total % to Total Loans
Construction and land development $ 561,128 $ 41,425 $ 526 $ 603,079 6 %
CRE - owner occupied 1,313,169 437,536 28,225 1,778,930 17
CRE - non-owner occupied 2,514,409 1,024,781 85,338 3,624,528 34
Residential real estate 1,976,802 687,933 13,307 2,678,042 25
Commercial and financial 1,559,314 165,207 16,637 1,741,158 16
Consumer 146,796 36,128 163 183,087 2
Totals $ 8,071,618 $ 2,393,010 $ 144,196 $ 10,608,824 100 %
December 31, 2024
(In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total % to Total Loans
Construction and land development $ 568,148 $ 79,370 $ 535 $ 648,053 6 %
CRE - owner occupied 1,177,538 477,459 31,632 1,686,629 16
CRE - non-owner occupied 2,243,056 1,156,849 103,903 3,503,808 34
Residential real estate 1,882,955 719,589 14,241 2,616,785 26
Commercial and financial 1,424,689 199,146 27,519 1,651,354 16
Consumer 155,786 37,282 253 193,321 2
Totals $ 7,452,172 $ 2,669,695 $ 178,083 $ 10,299,950 100 %
The amortized cost basis of loans included net deferred costs of $45.6 million at June 30, 2025 and $43.9 million at December 31, 2024. At June 30, 2025, the remaining fair value adjustments on acquired loans were $108.5 million, or 4.1%, of the outstanding acquired loan balances, compared to $128.1 million, or 4.3%, of the acquired loan balances at December 31, 2024. The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis.
Construction and land development loans decreased $45.0 million, or 7%, totaling $603.1 million at June 30, 2025, compared to December 31, 2024. These loans, extended to both commercial and consumer customers, are collateralized by and for the
purpose of funding land development and construction projects. Repayment is from the proceeds of the sale, refinancing or permanent financing of the property.
CRE owner occupied loans totaled $1.8 billion at June 30, 2025, an increase of $92.3 million, or 5% compared to December 31, 2024. CRE owner occupied loans are extended to commercial customers for the purpose of acquiring or refinancing real estate to be occupied by the borrower's business. These loans are collateralized by the subject property and the repayment of these loans is largely dependent on the performance of the company occupying the property.
CRE non-owner occupied loans increased $120.7 million, totaling $3.6 billion at June 30, 2025 compared to $3.5 billion at December 31, 2024. Non-owner occupied CRE loans are collateralized by properties where the source of repayment is typically from the sale or lease of the property. Within the non-owner occupied CRE portfolio, the largest segment is Retail properties, which totaled approximately $1.3 billion at June 30, 2025, with an average loan size of $2.6 million. This segment targets grocery or credit tenant-anchored shopping plazas, single credit tenant retail buildings, smaller outparcels, and other small retail units. The second-largest segment in the non-owner occupied CRE portfolio is office properties, which totaled $556.6 million at June 30, 2025, with an average loan size of $1.7 million. This segment targets low to mid-rise suburban offices and is broadly diversified across many types of professional services, with limited exposure to central business districts. Other non-owner occupied CRE loans include $504.7 million in loans collateralized by industrial or warehouse properties, $413.2 million collateralized by multi-family residential properties, $306.3 million collateralized by hotels or motels, and $582.8 million collateralized by other property types, including restaurants, schools and recreation centers.
Residential real estate loans increased $61.3 million to $2.7 billion at June 30, 2025. Included in the balance as of June 30, 2025, were $1.0 billion of fixed rate mortgages, $1.0 billion of adjustable rate mortgages and $635.4 million in home equity loans and HELOCs, compared to $1.0 billion, $970.2 million and $614.7 million, respectively, at December 31, 2024. Substantially all residential mortgage originations have been underwritten to conventional loan agency standards, including loan balances that exceed agency value limitations. The average LTV of our HELOC portfolio is 63%, with 31% of the loans being in first lien position at June 30, 2025, compared to an average LTV of 64%, with 31% of the portfolio being in the first lien position at December 31, 2024.
Commercial and financial loans increased $89.8 million, or 5%, from December 31, 2024, totaling $1.7 billion at June 30, 2025. The purpose of these loans may be to provide working capital, asset acquisition or for other business purposes, and are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners. The Company continues to exercise a disciplined approach to lending and is benefiting from the investments made in recent years to attract talent from large regional banks across its markets. This talent is onboarding significant new relationships, resulting in increased loan production.
The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $10.2 million, or 5%, to total $183.1 million at June 30, 2025, compared to $193.3 million at December 31, 2024.
Loan production and late-stage pipelines (loans in underwriting and approval or approved and not yet closed) are detailed in the following table for the periods specified. Pipelines include lines of credit at the full proposed commitment amount, which may not result in fully funded originations.
Second First Second
Quarter Quarter Quarter
(In thousands) 2025 2025 2024
Commercial/CRE loan pipeline at period end $ 861,237 $ 904,111 $ 773,085
Commercial/CRE loans closed 715,271 422,837 414,183
Residential pipeline - saleable at period end 14,371 15,495 12,095
Residential loans - sold 26,362 15,531 21,417
Residential pipeline - portfolio at period end 29,160 37,532 24,721
Residential loans - retained 58,201 70,322 42,431
Consumer pipeline at period end 16,174 24,433 24,532
Consumer originations 53,784 46,732 59,973
Commercial and CRE originations during the second quarter of 2025 were $715.3 million, an increase of $292.4 million, or 69%, compared to the first quarter of 2025, and an increase of $301.1 million, or 73%, compared to the second quarter of 2024. Commercial and CRE pipelines were $861.2 million as of June 30, 2025, a decrease of $42.9 million, or 5%, from $904.1 million at March 31, 2025, and an increase of 11% from $773.1 million at June 30, 2024. The Company continues to exercise a disciplined approach to lending and is benefiting from the investments made in recent years to attract talent from large regional banks across its markets.
Residential loans originated for sale in the secondary market totaled $26.4 million in the second quarter of 2025, compared to $15.5 million in the first quarter of 2025 and $21.4 million in the second quarter of 2024. Residential saleable pipelines were $14.4 million as of June 30, 2025, compared to $15.5 million as of March 31, 2025 and $12.1 million as of June 30, 2024.
Residential loan production retained in the portfolio for the second quarter of 2025 was $58.2 million, compared to $70.3 million in the first quarter of 2025 and $42.4 million in the second quarter of 2024. The pipeline of residential loans intended to be retained in the portfolio was $29.2 million as of June 30, 2025, compared to $37.5 million as of March 31, 2025, and $24.7 million as of June 30, 2024.
Consumer originations, which include HELOCs, totaled $53.8 million during the second quarter of 2025, compared to $46.7 million in the first quarter of 2025 and $60.0 million in the second quarter of 2024. The consumer pipeline was $16.2 million as of June 30, 2025, compared to $24.4 million as of March 31, 2025 and $24.5 million at June 30, 2024.
Loan Concentrations
The Company has developed guardrails to manage loan types that are most impacted by stressed market conditions to minimize credit risk concentration to capital. Outstanding balances for commercial and CRE loan relationships greater than $10 million totaled $2.9 billion, representing 28% of the total portfolio at June 30, 2025, compared to $2.7 billion, or 26%, at December 31, 2024. The Company's ten largest commercial and CRE funded and unfunded relationships at June 30, 2025 aggregated to $565.9 million, of which $497.5 million was funded, compared to $547.5 million at December 31, 2024, of which $433.0 million was funded.
Concentrations in construction and land development loans and CRE loans are maintained well below regulatory guidelines. Construction and land development and CRE loan concentrations as a percentage of subsidiary bank total risk based capital were 35% and 239%, respectively, at June 30, 2025, compared to 38% and 237%, respectively, at December 31, 2024. Regulatory guidance suggests limits of 100% and 300%, respectively. On a consolidated basis, construction and land development and CRE loans represent 33% and 221%, respectively, of total consolidated risk based capital as of June 30, 2025 compared to 36% and 224%, respectively, at December 31, 2024. To determine these ratios, the Company defines CRE in accordance with the guidance on "Concentrations in Commercial Real Estate Lending" (the "Guidance") issued by the federal bank regulatory agencies in 2006 (and reinforced in 2015), which defines 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 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. In addition, the Company is subject to a geographic concentration of credit because it primarily operates in Florida.
Nonperforming Loans, TBMs, OREO and Credit Quality
NPAs at June 30, 2025 totaled $69.5 million, and were comprised of $64.2 million of nonaccrual loans, and $5.3 million of OREO, including $5.0 million of branches taken out of service. Overall, NPAs decreased $29.3 million, or 38%, from $98.9 million as of December 31, 2024. NPAs to total assets at June 30, 2025 decreased to 0.44% from 0.65% at December 31, 2024.
Compared to December 31, 2024, nonaccrual loans decreased $28.2 million, or 31%. Approximately 72% of nonaccrual loans were secured with real estate at June 30, 2025. Nonperforming loans to total loans outstanding at June 30, 2025 decreased to 0.61% from 0.90% at December 31, 2024.
The tables below set forth details related to nonaccrual loans.
June 30, 2025
(In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans
Construction and land development $ 486 $ 1,436 $ 1,922
CRE - owner occupied 5,291 10,971 16,262
CRE - non-owner occupied 9,941 343 10,284
Residential real estate 5,570 12,252 17,822
Commercial and financial - 14,754 14,754
Consumer - 3,155 3,155
Totals $ 21,288 $ 42,911 $ 64,199
December 31, 2024
(In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans
Construction and land development $ 492 $ 660 $ 1,152
CRE - owner occupied 2,622 6,118 8,740
CRE - non-owner occupied 29,449 433 29,882
Residential real estate 6,462 17,432 23,894
Commercial and financial 2,703 17,806 20,509
Consumer 2,416 5,853 8,269
Totals $ 44,144 $ 48,302 $ 92,446
In accordance with regulatory reporting requirements, loans are placed on nonaccrual following the Retail Classification of Loan interagency guidance. The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest unless collection of both principal and interest is assured by way of collateralization, guarantees or other security. Consumer loans that become 120 days past due are generally charged off. The loan carrying value is analyzed and any changes are appropriately made quarterly, as described above.
In certain circumstances, the Company provides modifications of loans to borrowers experiencing financial difficulty, which the Company refers to as TBMs. Loans that were modified as TBMs during the six months ended June 30, 2025 are included in "Note 4 - Loans".
Allowance for Credit Losses on Loans
Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The forecasts of future economic conditions are over a period that has been deemed reasonable and supportable, and in segments where it can no longer develop reasonable and supportable forecasts, the Company reverts to longer-term historical loss experience to estimate losses over the remaining life of the loans. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments.
The Company recorded provision expense of $4.4 million and $13.6 million, respectively, for the three and six months ended June 30, 2025, compared to $4.9 million and $6.3 million, respectively, for the three and six months ended June 30, 2024. The Company recorded net charge-offs of $2.5 million and $9.5 million, respectively, in the three and six months ended June 30, 2025, compared to $9.9 million and $13.6 million, respectively, for the three and six months ended June 30, 2024.
The ratio of allowance for credit losses to total loans was 1.34% at June 30, 2025, 1.34% at December 31, 2024, and 1.41% at June 30, 2024.
Cash and Cash Equivalents and Liquidity Risk Management
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.
Funding sources primarily include customer-based deposits, collateral-backed borrowings, brokered deposits, cash flows from operations, cash flows from the loan and investment portfolios and asset sales, primarily secondary marketing for residential real estate mortgages. Cash flows from operations are a significant component of liquidity risk management and the Company considers both deposit maturities and the scheduled cash flows from loan and investment maturities and payments when managing risk.
Cash and cash equivalents, including interest bearing deposits, totaled $332.4 million at June 30, 2025, compared to $476.6 million at December 31, 2024.
Deposits are 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. Total uninsured deposits were estimated to be $4.5 billion at June 30, 2025, representing 36% of overall deposit accounts. This includes public funds under the Florida Qualified Public Depository program, which provides loss protection to depositors beyond FDIC insurance limits. Excluding such balances, the uninsured and uncollateralized deposits were 31% of total deposits at June 30, 2025. The Company has liquidity sources as discussed below, including cash and lines of credit with the FRB and FHLB, that represent 138% of uninsured deposits, and 160% of uninsured and uncollateralized deposits.
In addition to $332.4 million in cash and cash equivalents at June 30, 2025, the Company had $5.9 billion in available borrowing capacity, including $3.5 billion in available collateralized lines of credit, $2.0 billion of unpledged debt securities available as collateral for potential additional borrowings, and available unsecured lines of credit of $348.0 million. The Company may also access funding by acquiring brokered deposits. Brokered deposits at June 30, 2025 totaled $515.3 million, compared to $293.6 million at December 31, 2024.
Contractual maturities for assets and liabilities are reviewed to meet current and expected future liquidity requirements. Sources of liquidity are maintained through a portfolio of high-quality marketable assets, such as residential mortgage loans, debt securities AFS 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 debt securities not pledged to secure public deposits or trust funds.
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. During the second quarter of 2025, Seacoast Bank distributed $32.0 million to the Company. At June 30, 2025, the Company had cash and cash equivalents at the parent of approximately $128.1 million, compared to $95.8 million at December 31, 2024.
Deposits and Borrowings
Customer relationship funding is detailed in the following table for the periods specified:
(In thousands, except ratios) June 30, 2025 December 31, 2024
Noninterest demand $ 3,376,941 $ 3,352,372
Interest-bearing demand 2,518,857 2,667,843
Money market 4,111,789 4,086,362
Savings 557,472 519,977
Time deposits 1,417,236 1,371,522
Brokered time certificates $ 515,303 $ 244,351
Total deposits $ 12,497,598 $ 12,242,427
Securities sold under agreements to repurchase 186,090 232,071
Total customer funding1
$ 12,168,385 $ 12,180,860
Noninterest demand deposit mix 27 % 27 %
1Total deposits and securities sold under agreements to repurchase, excluding brokered deposits. Securities sold under agreements to repurchase consists of customer sweep accounts.
The Company benefits from a diverse and granular deposit base that serves as a significant source of strength. Total deposits increased $255.2 million, or 4% annualized, to $12.5 billion at June 30, 2025 compared to December 31, 2024.
Noninterest demand deposits represented 27% of total deposits at both June 30, 2025 and December 31, 2024. Customer transaction account balances (noninterest demand and interest-bearing demand) represented 47% of total deposits at June 30, 2025, compared to 50% at December 31, 2024.
Customer repurchase agreements totaled $186.1 million at June 30, 2025, decreasing $46.0 million, or 20%, from December 31, 2024. Repurchase agreements are offered by Seacoast to select customers who wish to sweep excess balances on a daily basis for investment purposes.
At June 30, 2025 and December 31, 2024, long-term debt included $72.6 million and $72.5 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company. At June 30, 2025, the average interest rate in effect on our outstanding subordinated debt related to trust preferred securities was 6.29%, compared to 6.34% at December 31, 2024. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. Under Basel III and FRB 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.
In 2023, the Company acquired $25.0 million in subordinated debt through a bank acquisition that qualifies as Tier 2 Capital. Contractual interest is paid on a semiannual basis at a fixed interest rate of 3.375% until January 30, 2027, at which point the rate converts to a 3-month SOFR rate plus 203 basis points paid quarterly until maturity in 2032. The debt was recorded at fair value, resulting in a $3.9 million discount that is being accreted into interest expense over the remaining term to maturity.
In 2022, the Company acquired $12.3 million in senior debt through a bank acquisition. Contractual interest is paid on a semiannual basis at a fixed rate of 5.50% until October 30, 2025, at which point the rate converts to a floating rate of 3-month SOFR plus 533 basis points until maturity in 2030. The debt was recorded at fair value, resulting in a $0.4 million premium that is being amortized into interest expense over the remaining term to maturity.
FHLB advances totaled $715.0 million at June 30, 2025 with a weighted-average interest rate of 4.15%, compared to advances outstanding of $245.0 million at December 31, 2024 with a weighted-average interest rate of 4.19%. The Company utilized short-term fixed-rate advances to fund securities purchases in the first and second quarters of 2025.
Off-Balance Sheet Transactions
In the normal course of business, the Company may engage in a variety of financial transactions that, under GAAP, 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. 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. A large majority of loan commitments and standby letters of credit expire without being funded, and accordingly, total contractual amounts are not representative of 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.
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. Unfunded commitments to extend credit were $3.0 billion at June 30, 2025 and $2.9 billion at December 31, 2024.
In the normal course of business, the Company and Seacoast Bank 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 Bank may be required to maintain reserve balances with the FRB. There was no reserve requirement at June 30, 2025 or December 31, 2024.
Under FRB regulation, Seacoast Bank is limited as to the amount it may loan to its affiliates, including the Company, unless such loans are collateralized by specified obligations. At June 30, 2025, the maximum amount available for transfer from Seacoast Bank to the Company in the form of loans approximated $192.6 million, if the Company has sufficient acceptable collateral. There were no loans made to affiliates during the six months ended June 30, 2025.
Capital Resources
The Company's equity capital at June 30, 2025 increased $88.3 million, or 4%, from December 31, 2024 to $2.3 billion. Changes in equity included increases from net income, and an improvement in accumulated other comprehensive loss due to increases in the value of AFS securities associated with changes in interest rates, partially offset by the payment of common stock dividends.
The ratio of shareholders' equity to period end total assets was 14.25% and 14.39% at June 30, 2025 and December 31, 2024, respectively. The ratio of tangible shareholders' equity to tangible assets was 9.75% and 9.60% at June 30, 2025 and December 31, 2024, respectively. Changes in the value of HTM securities are not reflected in shareholders' equity under GAAP; however, illustratively, if all HTM securities were presented at fair value, the tangible common equity ratio would have been 9.27% at June 30, 2025 and 8.96% at December 31, 2024.
Activity in shareholders' equity for the six months ended June 30, 2025 and 2024 follows:
(In thousands) Six Months Ended June 30, 2025 Six Months Ended June 30, 2024
Balance at beginning of period $ 2,183,243 $ 2,108,086
Net income 74,151 56,250
Stock-based compensation expense 6,996 6,105
Common stock transactions related to stock-based employee benefit plans (1,425) (298)
Repurchase of common stock - (880)
Dividends on common stock ($0.36 per share in each period)
(30,960) (30,750)
Change in accumulated other comprehensive income (loss) 39,560 (8,132)
Balance at end of period $ 2,271,565 $ 2,130,381
Capital ratios are well above regulatory requirements for well-capitalized institutions. Management's use of risk-based capital ratios in its analysis of the Company's capital adequacy are not 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 and Seacoast does not nor should investors consider such non-GAAP financial measures in isolation from, or as a substitute for GAAP financial information (see "Note 8 - Regulatory Capital").
June 30, 2025 Seacoast
(Consolidated) 		Seacoast
Bank
Minimum to be Well- Capitalized1
Total Risk-Based Capital Ratio 16.09% 14.95% 10.00%
Tier 1 Capital Ratio 14.65 13.70 8.00
CET1 Ratio 14.02 13.70 6.50
Leverage Ratio 11.09 10.36 5.00
1For subsidiary bank only.
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 OCC approval, Seacoast Bank can pay $95.9 million of dividends to the Company.
The OCC and the Federal Reserve have policies that encourage banks and BHCs to pay dividends from current earnings, and have the general authority to limit the dividends paid by national banks and BHCs, 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 Bank or us, respectively. The board of directors of a BHC must consider different factors to ensure that its dividend level, if any, 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 FRB has indicated that the board of directors of a BHC, such as Seacoast, should consult with the FRB and eliminate, defer, or significantly reduce the BHC'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 paid quarterly dividends to the holders of its common stock since the second quarter of 2021. Whether the Company continues to pay quarterly dividends and the amount of any such dividends will be at the discretion of the Company's Board of Directors and will depend on the Company's earnings, financial condition, results of operations, business prospects, capital requirements, regulatory restrictions, and other factors that the Board of Directors may deem relevant.
The Company has seven wholly owned trust subsidiaries that have issued trust preferred stock. Trust preferred securities from acquisitions were recorded at fair value when acquired. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. The FRB'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 can treat all its 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.
Critical Accounting Policies and Estimates
The Company's critical accounting policies are discussed in the MD&A in Seacoast's Annual Report on Form 10-K for the year ended December 31, 2024. Significant accounting policies are discussed in "Note 1 - Significant Accounting Policies" in Form 10-K for the year ended December 31, 2024. Disclosures regarding the effects of new accounting pronouncements are included in "Note 1 - Basis of Presentation" in this report. There have been no changes to the Company's critical accounting policies during 2025.
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. The objective is to optimize the Company's financial position, liquidity, and net interest income while limiting volatility.
Senior management regularly reviews the overall interest rate risk position and evaluates strategies to manage the risk. The Company uses simulation analysis to monitor changes in net interest income due to changes in market interest rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust balance sheet exposures to assess the impact of market interest rate swings. The analysis of the impact on net interest income is subjected to instantaneous changes in market rates and is monitored at least quarterly.
The following table presents the ALCO simulation model's projected impact of a change in interest rates on the net interest income for the 12- and 24-month periods beginning July 1, 2025, holding all balances on the balance sheet static. It is important to note that the results in the table below assume parallel shifts in the yield curve and do not take into account changes in the yield curve slope nor changes in balance sheet size or mix.
% Change in Projected Baseline
Net Interest Income
June 30, 2025
Change in Interest Rates 1-12 months 13-24 months
+3.00% (11.0)% (6.3)%
+2.00% (6.3)% (3.0)%
+1.00% (2.5)% (0.7)%
Current -% -%
-1.00% 2.0% (0.5%)
-2.00% 5.0% (1.1%)
-3.00% 7.5% (2.7%)
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. Management may adjust asset or liability pricing or structure in order to manage interest rate risk through an economic cycle. This may include the use of investment portfolio purchases or sales or the use of derivative financial instruments, such as interest rate swaps, options, caps, floors, futures or forward contracts.
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 origination and refinancing tends 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.
Seacoast Banking Corporation of Florida published this content on August 08, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 08, 2025 at 20:58 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]