Seacoast Banking of Florida(US:SBCF)2024-08-07 20:01Financial Performance - Net income for Q2 2024 was $30.2 million, or $0.36 per average diluted share, a 16% increase from Q1 2024 [116]. - Adjusted net income for the first half of 2024 totaled $61.4 million, or $0.72 per average diluted share, compared to $67.7 million, or $0.81 per average diluted share for the same period in 2023 [117]. - Net income for Q2 2024 was $30,244,000, an increase of 8.5% from $26,006,000 in Q1 2024, but a decrease of 3.2% from $31,249,000 in Q2 2023 [149]. - Adjusted net income for Q2 2024 was $30,277,000, slightly down from $31,132,000 in Q1 2024 and down 30.3% from $43,489,000 in Q2 2023 [149]. - Earnings per diluted share for Q2 2024 was $0.36, an increase from $0.31 in Q1 2024, but a decrease from $0.37 in Q2 2023 [149]. - Total noninterest income for Q2 2024 was $22,184,000, up 8.2% from $20,497,000 in Q1 2024, but down 6.4% from $21,576,000 in Q2 2023 [149]. Interest Income and Expenses - Net interest income for Q2 2024 was $104.4 million, a decrease of $22.5 million, or 18%, compared to Q2 2023 [120]. - For the six months ended June 30, 2024, net interest income totaled $209.5 million, a decrease of $48.6 million, or 19%, compared to the same period in 2023 [120]. - Net interest income for Q2 2024 was $104.7 million, a decrease of 1% from Q1 2024 and an 18% decrease from Q2 2023 [122]. - The yield on total loans increased from 5.88% for the six months ended June 30, 2023, to 5.92% for the same period in 2024 [122]. - The cost of average total deposits for the six months ended June 30, 2024, was 2.25%, an increase of 116 basis points compared to the same period in 2023 [126]. - The average rate on long-term debt for Q2 2024 was 7.03%, a decrease of 28 basis points from Q1 2024 and an increase of 23 basis points from Q2 2023 [129]. Asset Quality - Nonperforming loans decreased compared to the prior quarter, indicating improved asset quality [116]. - Nonperforming assets decreased to $66.8 million at June 30, 2024, down 8.1% from $72.7 million at December 31, 2023 [173]. - The ratio of allowance for credit losses to total loans was 1.41% at June 30, 2024, down from 1.48% at December 31, 2023 [180]. - The company recorded net charge-offs of $9.9 million in Q2 2024, compared to $0.7 million in Q2 2023 [180]. Capital and Equity - The Tier 1 capital ratio stood at 14.8%, reflecting a strong capital position [116]. - Shareholders' equity stood at $2,117,628 thousand in Q2 2024, slightly down from $2,118,381 thousand in Q1 2024 [131]. - The Company's equity capital increased by $22.3 million, or 1%, to $2.1 billion at June 30, 2024 [198]. - The total risk-based capital ratio was 16.20% at June 30, 2024, well above the minimum requirement of 10.00% [201]. Lending Activities - The overall lending pipeline increased to $834.4 million, indicating growth in lending activities [116]. - Total loans, net reached $10,005,122 thousand with a yield of 5.93% in Q2 2024, compared to $10,034,658 thousand and 5.90% in Q1 2024 [131]. - Commercial and commercial real estate originations in Q2 2024 were $406.0 million, a 56% increase from Q1 2024 and a 32% increase from Q2 2023 [167]. - Residential mortgage loans increased by $109.6 million to $2.6 billion during the six months ended June 30, 2024 [165]. Noninterest Expenses - Noninterest expenses for Q2 2024 totaled $82.5 million, a decrease of $7.8 million (9%) from Q1 2024 and a decrease of $25.3 million (23%) from Q2 2023 [140]. - Salaries and wages for Q2 2024 were $38.9 million, down $6.3 million (14%) from Q2 2023 [140]. - Employee benefits in Q2 2024 were $6.9 million, a decrease of $1.0 million (13%) from Q1 2024 and a decrease of $0.6 million (8%) from Q2 2023 [141]. - Provision for credit losses was $4.9 million in Q2 2024, compared to $1.4 million in Q1 2024 and a net benefit of $0.8 million in Q2 2023 [145]. Market and Economic Conditions - The company's primary market risk is interest rate risk, which significantly impacts net interest income and Economic Value of Equity (EVE) due to the structure of the balance sheet [213]. - A 2.00% increase in interest rates is projected to decrease EVE by 14.5%, while a 1.00% increase would decrease EVE by 6.3% [217]. - Inflation increases costs for the company, impacting liquidity, earnings, and shareholders' equity [210]. - Interest rates have a more significant impact on the company's performance than general inflation, affecting mortgage origination and refinancing activities [210].