Seacoast Banking of Florida(SBCF) - 2025 Q2 - Quarterly Report

Part I: Financial Information Financial Statements (Unaudited) The company presents its unaudited consolidated financial statements for the periods ended June 30, 2025 and 2024 Q2 2025 vs Q2 2024 Key Financial Results | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Interest Income | $193.3M | $179.8M | | Net Interest Income | $126.9M | $104.4M | | Provision for credit losses | $4.4M | $4.9M | | Net Income | $42.7M | $30.2M | | Diluted EPS | $0.50 | $0.36 | Consolidated Balance Sheet Highlights (June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $15.94B | $15.18B | | Loans, net | $10.47B | $10.16B | | Total Deposits | $12.50B | $12.24B | | Total Liabilities | $13.67B | $12.99B | | Total Shareholders' Equity | $2.27B | $2.18B | - For the six months ended June 30, 2025, net cash from operating activities was $103.3 million, while investing activities used $894.3 million and financing activities provided $646.8 million[13][14] Notes to Consolidated Financial Statements This section details the accounting policies and financial data for key areas like securities, loans, and acquisitions - The financial statements are prepared per U.S. GAAP, with management estimates crucial for the allowance for credit losses, acquisition accounting, and fair value measurements[17][19] Debt Securities Portfolio (Amortized Cost) as of June 30, 2025 | Security Type | Available-for-Sale (AFS) (USD) | Held-to-Maturity (HTM) (USD) | | :--- | :--- | :--- | | U.S. Gov't & Agency | $25.2M | - | | Gov't Sponsored MBS/CMO | $2.61B | $613.3M | | Private MBS/CMO | $113.4M | - | | CLOs | $258.0M | - | | Other | $14.5M | - | | Total | $3.02B | $613.3M | Loan Portfolio Composition as of June 30, 2025 | Loan Segment | Total Balance (USD) | | :--- | :--- | | Construction and land development | $603.1M | | CRE - owner occupied | $1.78B | | CRE - non-owner occupied | $3.62B | | Residential real estate | $2.68B | | Commercial and financial | $1.74B | | Consumer | $183.1M | | Total Loans | $10.61B | - The allowance for credit losses (ACL) was $142.2 million, or 1.34% of total loans, with a Q2 2025 provision of $4.4 million[53][56] - The company completed its acquisition of Heartland Bancshares, Inc. and announced a proposed acquisition of Villages Bancorporation, Inc[85][87] Management's Discussion and Analysis (MD&A) Management analyzes financial condition and operational results, highlighting growth, acquisitions, and margin expansion Results of Operations Q2 2025 net income rose 41% YoY, driven by higher net interest income and an expanded net interest margin Q2 2025 Performance Highlights | Metric | Q2 2025 | | :--- | :--- | | Net Income | $42.7M | | Diluted EPS | $0.50 | | Net Interest Income | $126.9M | | Net Interest Margin | 3.58% | | Return on Average Assets | 1.08% | | Efficiency Ratio | 56.95% | - Net interest margin expanded by 10 basis points from the prior quarter, driven by lower deposit costs[110] - Noninterest expense in Q2 2025 included $2.4 million in merger-related charges from recent and proposed acquisitions[136] Financial Condition Total assets grew to $15.9 billion, driven by loan and securities portfolio growth, with improved credit quality - Total assets increased by $768.6 million (5%) from December 31, 2024, reaching $15.9 billion[144] - The loan portfolio grew by $308.9 million (3.0%) since year-end 2024, with strong commercial and CRE origination[152][165] - Credit quality improved significantly, with Nonperforming Assets (NPAs) declining to 0.44% of total assets[172] Liquidity and Capital Resources The company maintains a strong liquidity position and capital ratios that significantly exceed regulatory requirements - Total available liquidity sources amounted to $5.9 billion in borrowing capacity plus $332.4 million in cash[183] Regulatory Capital Ratios (Consolidated) as of June 30, 2025 | Ratio | Seacoast (Consolidated) | Minimum to be Well Capitalized | | :--- | :--- | :--- | | Total Risk-Based Capital | 16.09% | 10.00% | | Tier 1 Capital | 14.65% | 8.00% | | CET1 Ratio | 14.02% | 6.50% | | Leverage Ratio | 11.09% | 5.00% | - Shareholders' equity increased by $88.3 million (4%) since year-end 2024 to $2.3 billion[198] Quantitative and Qualitative Disclosures about Market Risk The company manages interest rate risk and is positioned to be asset-sensitive in a falling rate environment Projected Change in Net Interest Income (Next 12 Months) | Change in Interest Rates | % Change in Projected NII | | :--- | :--- | | +3.00% | (11.0)% | | +1.00% | (2.5)% | | -1.00% | 2.0% | | -3.00% | 7.5% | Projected Change in Economic Value of Equity (EVE) | Change in Interest Rates | % Change in EVE | | :--- | :--- | | +3.00% | (25.0)% | | +1.00% | (7.5)% | | -1.00% | 7.0% | | -3.00% | 12.2% | Controls and Procedures Management concluded that disclosure controls and procedures are effective with no material changes during the quarter - The Company's management concluded that disclosure controls and procedures were effective as of the end of the period covered by this report[221] - No material changes in internal control over financial reporting occurred during the quarter[222] Part II: Other Information Legal Proceedings Current legal proceedings are not expected to have a materially adverse effect on the company's financials - Management believes that none of the legal proceedings are likely to have a materially adverse effect on its consolidated financial position or results[223] Risk Factors There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report - There have been no material changes with respect to the risk factors disclosed in the Company's Annual Report on Form 10-K for 2024[224] Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase shares under its authorized program during the quarter - The Board of Directors authorized a share repurchase program of up to $100 million, expiring December 31, 2025[225] - No shares were repurchased under the authorized program during the three months ended June 30, 2025[226] Other Items (3, 4, 5, 6) This section confirms no defaults, mine safety issues, or new insider trading arrangements during the quarter - The report confirms no defaults on senior securities, no mine safety disclosures, and no new Rule 10b5-1 trading arrangements by directors or officers[227][228][229]