Seacoast Reports First Quarter 2021 Results

Thursday, 22. April 2021 22:02

Wealth Management Exceeds $1 Billion in Assets Under Management

Loan Pipelines Expand by 44% in Line with Strong Florida Economic Recovery

Initiates Quarterly Cash Dividend

STUART, Fla., April 22, 2021 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") (NASDAQ: SBCF) today reported net income in the first quarter of 2021 of $33.7 million, or $0.60 per diluted share, an increase of 15% compared to the fourth quarter of 2020. Adjusted net income1 for the first quarter of 2021 was $35.5 million, or $0.63 per diluted share, an increase of 16% compared to the fourth quarter of 2020. The ratio of tangible common equity to tangible assets was 10.71%, tangible book value per share increased to $16.62 and Tier 1 capital increased to 18.2%.

For the first quarter of 2021, return on average tangible assets was 1.70%, return on average tangible shareholders' equity was 15.62%, and the efficiency ratio was 53.21%, compared to 1.49%, 13.87%, and 48.23%, respectively, in the prior quarter. Adjusted return on average tangible assets1 in the first quarter of 2021 was 1.75%, adjusted return on average tangible shareholders' equity1 was 16.01%, and the adjusted efficiency ratio1 was 51.99%, compared to 1.50%, 14.00%, and 48.75%, respectively, in the prior quarter.

Charles M. Shaffer, Seacoast's President and CEO, said, “The Seacoast team delivered another record quarter, resulting in continued growth in tangible book value per share, ending the period at $16.62, up 15% over the prior year. Our wealth management team continues to implement a unique, high-quality approach to assisting high net worth families, foundations, and business owners in developing wealth and investment management strategies, resulting in strong growth year-over-year in assets under management. As the Florida population continues to swell and the economic recovery continues to take hold, we are capitalizing on this growth, as evidenced in our mortgage banking results, and in our loan pipelines, which increased 44% from year-end.

Mr. Shaffer added, “During the quarter, we announced the upcoming acquisition of Legacy Bank of Florida. This is an exceptional addition and further strengthens our presence in Florida’s largest MSA. The transaction, which is expected to close in the third quarter of 2021, will provide earnings per share accretion of 6% to 2022, and has nominal up-front dilution to tangible book value per share.”

On April 20, 2021, the Company’s Board of Directors approved a $0.13 cash dividend to shareholders of record on June 15, 2021, to be paid June 30, 2021.

Mr. Shaffer further commented, “I am pleased to announce the Board’s decision to authorize a quarterly dividend for our shareholders. The dividend demonstrates our continued confidence in the Company’s performance outlook. Asset quality, liquidity, and capital are all strong, and we continue to generate meaningful capital growth, bolstering our fortress balance sheet. Our capital ratios are more substantial than most of our peers, which continues to provide strategic flexibility, and issuing a dividend is yet another way we can provide total shareholder return while maintaining our balanced growth strategy.”

Financial Results

Income Statement

  • Net income was $33.7 million, or $0.60 per diluted share for the first quarter of 2021, compared to $29.3 million, or $0.53, for the prior quarter. Adjusted net income1 was $35.5 million, or $0.63 per diluted share for the first quarter of 2021, compared to $30.7 million, or $0.55, for the prior quarter.
  • Net revenues were $84.3 million in the first quarter of 2021, an increase of $0.6 million, or 1%, compared to the prior quarter. Adjusted revenues1 were $84.4 million in the first quarter of 2021, an increase of $0.7 million, or 1%, from the prior quarter.
  • Net interest income totaled $66.6 million in the first quarter of 2021, a decrease of $2.2 million, or 3%, from the prior quarter due to lower loan balances and lower yields, partially offset by higher income from Paycheck Protection Program (“PPP”) loans and lower cost of deposits. During the first quarter of 2021, net interest income included $6.9 million in interest and fees earned on PPP loans compared to $5.2 million in the fourth quarter of 2020. Remaining deferred PPP loan fees totaling $13.5 million will be recognized over the loans' remaining contractual maturity or sooner, as loans are forgiven.
  • Net interest margin was 3.51% in the first quarter of 2021, compared to 3.59% in the fourth quarter of 2020. The effect of accretion of purchase discounts on acquired loans was an increase of 15 basis points in the first quarter of 2021, compared to an increase of 23 basis points in the fourth quarter of 2020. The effect of interest and fees on PPP loans was an increase of 11 basis points in the first quarter of 2021, and a decrease of one basis point in the fourth quarter of 2020. Excluding both these items, net interest margin declined 12 basis points to 3.25%, largely the result of significant growth in cash balances held on the balance sheet. The Company expects to deploy this cash in a disciplined and prudent manner, carefully navigating an economic outlook that includes expected increases in interest rates. The yield on loans, excluding PPP and accretion of purchase discount, decreased 8 basis points due to the impact of the overall lower rate environment. The yield on securities declined 8 basis points, resulting from elevated prepayments and lower yields on new purchases. The cost of deposits decreased six basis points, from 19 basis points in the fourth quarter of 2020 to 13 basis points in the first quarter of 2021, reflecting our continued repricing down of interest-bearing deposits and time deposits.
  • Noninterest income totaled $17.7 million in the first quarter of 2021, an increase of $2.7 million, or 18%, compared to the prior quarter. Results for the first quarter of 2021 included the following:
    • Mortgage banking fees were $4.2 million, compared to $3.6 million in the prior quarter, as rates remain low and an influx of new residents and businesses into Florida drive demand for mortgage originations.
    • Interchange revenue was a record $3.8 million, compared to $3.6 million in the prior quarter, with a higher volume of transactions and higher per-card spending contributing to the increase.
    • Wealth management income was a record $2.3 million in the current quarter, compared to $1.9 million in the fourth quarter of 2020. During the first quarter of 2021, assets under management increased $156 million to surpass $1.0 billion. This milestone was achieved as the result of the team’s success in delivering valuable services and advice to new clients, and collaborating with retail and commercial bankers across the franchise to build and develop existing relationships.
    • Included in other income in the first quarter of 2021 is $1.7 million in income associated with the resolution of contingencies on two loans acquired in 2017. Similar activity is not expected in subsequent periods.
  • The provision for credit losses was a net benefit of $5.7 million in the first quarter of 2021, compared to a $1.9 million expense in the prior quarter. The ratio of allowance for credit losses to total loans declined to 1.53% at March 31, 2021, compared to 1.62% at December 31, 2020. Excluding PPP loans, the ratio declined to 1.71% at
  • March 31, 2021, compared to 1.79% at December 31, 2020. The decline in coverage reflects improvement in the economic outlook from the prior quarter.
  • Noninterest expense was $46.1 million in the first quarter of 2021, an increase of $2.4 million, or 6%, compared to the prior quarter. Changes from the fourth quarter of 2020 consisted of the following:
    • Employee benefits increased $1.1 million, or 27%, reflecting higher seasonal payroll taxes and 401(k) plan contributions typical of the first quarter.
    • Occupancy expenses include $0.3 million in charges associated with three branch consolidations completed during the first quarter of 2021.
    • Legal and professional fees increased by $2.1 million compared to the fourth quarter. The first quarter of 2021 includes $0.6 million in merger-related costs, while the fourth quarter benefited from the one-time recovery of certain legal expenses incurred during 2020.
    • Foreclosed property expense decreased in the first quarter of 2021 by $1.9 million, reflecting a gain on the sale of an OREO property of $0.2 million compared to write-downs totaling $1.6 million on two properties in the prior quarter.
  • Seacoast recorded $10.2 million of income tax expense in the first quarter of 2021, compared to $8.8 million in the prior quarter. Tax impacts related to stock-based compensation were nominal each period.
  • The ratio of net adjusted noninterest expense1 to average tangible assets was 2.16% in the first quarter of 2021, compared to 2.00% in the prior quarter and 2.46% in the first quarter of 2020.
  • The efficiency ratio was 53.2% compared to 48.2% in the prior quarter. The adjusted efficiency ratio1 was 52.0% compared to 48.8% in the prior quarter. The fourth quarter of 2020 benefited from a one-time recovery of legal expenses and a release of reserves for unfunded commitments, while the first quarter of 2021 included a seasonal increase in employee benefits.

Balance Sheet

  • At March 31, 2021, the Company had total assets of $8.8 billion and total shareholders' equity of $1.2 billion. Book value per share was $20.89, and tangible book value per share was $16.62, compared to $20.46 and $16.16, respectively, on December 31, 2020, and $18.82 and $14.42, on March 31, 2020. This reflects growth in tangible book value per share of 15% year-over-year. Increasing rates impacted accumulated other comprehensive income by $10.8 million, offsetting the quarter-over-quarter growth in tangible book value by $0.20 per share.
  • Debt securities totaled $1.6 billion on March 31, 2021, a decrease of $18.9 million compared to December 31, 2020. Purchases during the quarter were primarily in government-sponsored mortgage-backed securities with an average yield of 1.44%. On January 1, 2021, the Company transferred $211.6 million in debt securities from available-for-sale to held-to-maturity, as it has the intent and ability to hold these securities to maturity.
  • Loans totaled $5.7 billion on March 31, 2021, a decrease of $73.9 million, or 1%, compared to December 31, 2020. Given the significant economic performance in the State of Florida, low unemployment, and clear evidence of a V-shaped recovery, the Company returned to its pre-pandemic credit policy and conservative underwriting guidelines.

    With the renewal of the Paycheck Protection Program (“PPP”), Seacoast originated over 2,400 loans for $232.5 million in the first quarter of 2021. Fees earned from the Small Business Administration (“SBA”) on the origination of these loans, net of related costs, totaled $9.4 million. When combined with fees remaining to be recognized on PPP loans originated in 2020, $13.5 million in deferred PPP loan fees will be recognized over the loans’ contractual maturity or sooner, as loans are forgiven. During the first quarter of 2021, $213.8 million in PPP loans funded in 2020 were forgiven by the SBA.
  • Loan originations were $668.4 million in the first quarter of 2021, compared to $541.0 million in the fourth quarter of 2020, an increase of 24%.
    • Commercial originations during the first quarter of 2021 were $204.3 million, compared to $277.4 million in the fourth quarter of 2020. The decrease reflects lower seasonal demand quarter-over-quarter, but an increase of 11% compared to the first quarter of 2020. We expect production to continue to increase throughout 2021.
    • Seacoast participated in the most recent round of PPP funding with $232.5 million in originations during the quarter.
    • Residential loans originated for sale in the secondary market were $138.3 million in the first quarter of 2021, compared to $161.6 million in the fourth quarter of 2020. The benefit of continued low rates and ongoing inflows of new residents and businesses into Florida drove continued demand for mortgage originations.
    • Closed residential loans retained in the portfolio totaled $46.6 million in the first quarter of 2021, compared to $54.5 million in the fourth quarter of 2020.
    • Consumer originations in the first quarter of 2021 were $46.7 million, compared to $47.5 million in the fourth quarter of 2020.
  • Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $433.6 million on March 31, 2021, an increase of 44% from the fourth quarter of 2020.
    • Commercial pipelines were $240.9 million as of March 31, 2021, an increase of 44% from $166.7 million for the fourth quarter of 2020, reflecting increasing demand in line with Florida’s strong economic recovery.
    • Residential saleable pipelines were $92.1 million as of March 31, 2021, compared to $92.0 million as of the prior quarter end. Retained residential pipelines were $72.4 million as of March 31, 2021, compared to $25.1 million as of the prior quarter end. The increase in the retained residential pipeline reflects a selective Florida correspondent program we expanded during the quarter to generate both portfolio growth and cross-sell opportunities for depository and other products.
    • Consumer pipelines were $28.1 million as of March 31, 2021, compared to $18.2 million as of the prior quarter-end.
  • Total deposits were $7.4 billion as of March 31, 2021, an increase of $453.2 million, or 7%, compared to December 31, 2020.
    • The overall cost of deposits declined to 13 basis points in the first quarter of 2021 from 19 basis points in the prior quarter.
    • Total transaction account balances increased $477.3 million, or 12%, quarter-over-quarter, reflecting the impact of the new PPP originations, ongoing stimulus programs and tax refunds and growth in relationships. Transaction accounts represent 59% of overall deposit funding.
    • Interest-bearing deposits (interest-bearing demand, savings, and money market deposits) increased $275.9 million, or 7%, quarter-over-quarter to $4.1 billion, noninterest-bearing demand deposits increased $395.5 million, or 17%, to $2.7 billion, and CDs (excluding brokered) declined $77.8 million, or 13%, to $519.5 million.
    • As of March 31, 2021, deposits per banking center were $154 million, compared to $118 million on March 31, 2020.

Asset Quality

  • Nonperforming loans decreased by $0.8 million to $35.3 million at March 31, 2021. Nonperforming loans to total loans outstanding were 0.62% at March 31, 2021, 0.63% at December 31, 2020, and 0.48% at March 31, 2020.
  • Nonperforming assets to total assets were 0.58% at March 31, 2021, 0.59% at December 31, 2020, and 0.55% at March 31, 2020.
  • The ratio of allowance for credit losses to total loans was 1.53% at March 31, 2021, 1.62% at December 31, 2020, and 1.61% at March 31, 2020. Excluding PPP loans, the ratio of allowance for credit losses to total loans at March 31, 2021, was 1.71%, compared to 1.79% at December 31, 2020. The decline in coverage reflects an improvement in the economic outlook from the prior quarter, lower net charge-offs, and lower loans outstanding.
  • Net charge-offs were $0.4 million, or 0.03%, of average loans for the first quarter of 2021 compared to $3.1 million, or 0.21% of average loans in the fourth quarter of 2020 and $1.0 million, or 0.07% of average loans in the first quarter of 2020. Net charge-offs for the four most recent quarters averaged 0.12%.
  • Portfolio diversification, in terms of asset mix, industry, and loan type, has been a critical element of the Company's lending strategy. Exposure across industries and collateral types is broadly distributed. Excluding PPP loans, Seacoast's average commercial loan size is $408,000, reflecting an ability to maintain granularity within the overall loan portfolio.
  • Construction and land development and commercial real estate loans remain well below regulatory guidance at 23% and 168% of total bank-level risk based capital, respectively, compared to 26% and 169% respectively, in the fourth quarter of 2020. On a consolidated basis, construction and land development and commercial real estate loans represent 21% and 155%, respectively, of total consolidated risk-based capital.

Capital and Liquidity

  • The tier 1 capital ratio increased to 18.2% from 17.4% at December 31, 2020, and 15.5% March 31, 2020. The total capital ratio was 19.2% and the tier 1 leverage ratio was 12.1% at March 31, 2021.
  • Cash and cash equivalents at March 31, 2021 totaled $979.3 million, an increase of $575.2 million from December 31, 2020.
  • Tangible common equity to tangible assets was 10.71% at March 31, 2021, compared to 11.01% at December 31, 2020 and 10.68% at March 31, 2020. Tangible common equity declined quarter-over-quarter as a result of a buildup of cash on the balance sheet. The Company will strategically deploy this cash in a disciplined and prudent manner, carefully navigating an outlook that includes expected increases in interest rates.
  • At March 31, 2021, the Company had available unsecured lines of credit of $135.0 million and lines of credit under lendable collateral value of $1.7 billion. $1.3 billion of debt securities and $703.8 million in residential and commercial real estate loans are available as collateral for potential borrowings.

1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.

        
FINANCIAL HIGHLIGHTS       
(Amounts in thousands except per share data)(Unaudited)
 Quarterly Trends
          
 1Q'21 4Q'20 3Q'20 2Q'20 1Q'20
Selected Balance Sheet Data:         
Total Assets$8,811,820   $8,342,392  $8,287,840  $8,084,013  $7,352,894 
Gross Loans5,661,492   5,735,349  5,858,029  5,772,052  5,317,208 
Total Deposits7,385,749   6,932,561  6,914,843  6,666,783  5,887,499 
          
Performance Measures:         
Net Income$33,719   $29,347  $22,628  $25,080  $709 
Net Interest Margin3.51 % 3.59% 3.40% 3.70% 3.93%
Average Diluted Shares Outstanding55,992   55,739  54,301  53,308  52,284 
Diluted Earnings Per Share (EPS)$0.60   $0.53  $0.42  $0.47  $0.01 
Return on (annualized):         
Average Assets (ROA)1.61 % 1.39% 1.11% 1.27% 0.04%
Average Tangible Assets (ROTA)21.70   1.49  1.20  1.37  0.11 
Average Tangible Common Equity (ROTCE)215.62   13.87  11.35  13.47  0.95 
Tangible Common Equity to Tangible Assets210.71   11.01  10.67  10.19  10.68 
Tangible Book Value Per Share2$16.62   $16.16  $15.57  $15.11  $14.42 
Efficiency Ratio53.21 % 48.23% 61.65% 50.11% 59.85%
          
Adjusted Operating Measures1:         
Adjusted Net Income$35,497   $30,700  $27,336  $25,452  $5,462 
Adjusted Diluted EPS0.63   0.55  0.50  0.48  0.10 
Adjusted ROTA21.75 % 1.50% 1.38% 1.33% 0.32%
Adjusted ROTCE216.01   14.00  13.06  13.09  2.86 
Adjusted Efficiency Ratio51.99   48.75  54.82  49.60  53.55 
Net Adjusted Noninterest Expense as a
Percent of Average Tangible Assets2
2.16   2.00  2.24  2.11  2.46 
          
Other Data:         
Market capitalization3$2,003,866   $1,626,913  $994,690  $1,081,009  $965,097 
Full-time equivalent employees953   965  968  924  919 
Number of ATMs75   77  77  76  76 
Full-service banking offices48   51  51  50  50 
Registered online users126,352   123,615  121,620  117,273  113,598 
Registered mobile devices117,959   115,129  110,241  108,062  104,108 
1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.
2The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets.
3Common shares outstanding multiplied by closing bid price on last day of each period.
 

First Quarter Strategic Highlights

Legacy Bank of Florida Acquisition

Seacoast’s balanced growth strategy, combining organic growth with value-creating acquisitions, continues to benefit shareholders and provide new opportunities for associates. In the first quarter of 2021, the Company announced the upcoming acquisition of Legacy Bank of Florida, which is expected to close in the third quarter of 2021. The acquisition will add experienced bankers in a growing market, further supporting sustainable, profitable growth, and will increase Seacoast’s deposits in Palm Beach and Broward counties by approximately 40%.

Capitalizing on Seacoast’s Early Commitment to Digital Transformation

  • As customer preferences change, Seacoast continues to evolve the branch footprint, redirecting capacity into attractive growth markets. In alignment with this strategy, three banking center locations were consolidated in the first quarter of 2021, representing an estimated annual savings of $0.9 million.
  • Seacoast and its customers are benefiting from our fully digital PPP origination platform and our automated PPP forgiveness solution, which streamline the processes for clients while integrating with Seacoast’s existing technology infrastructure. In the first quarter of 2021, with the re-opening of the PPP lending program, Seacoast originated $232.5 million in PPP loans. Also in the first quarter of 2021, Seacoast processed $213.8 million in loan forgiveness.
  • During the first quarter of 2021, Seacoast launched a large-scale initiative to upgrade all ATMs across the network through a third-party partnership, providing our customers with a best-in-class experience, while reducing the cost to operate the ATM network by $0.9 million annually.

Scaling and Evolving Our Culture

  • As Seacoast grows the organization, we continue to expand our leadership team with talented individuals holding diverse backgrounds. In the first quarter of 2021, Ron York joined Seacoast serving as EVP, Treasury Management Executive. Formerly with First Horizon Bank, Ron will look to evolve Seacoast’s Treasury Management products, services, and capabilities. Additionally, the Company hired Pam Notarantonio as the regional credit officer for the Central Florida market. Pam joins Seacoast after 32 years with Wells Fargo and brings extensive credit leadership experience to the role. This follows the hiring of Dan Hilken, also previously with Wells Fargo, in the fourth quarter as the regional market president for Central Florida.
  • Seacoast believes that diversity enhances our entire workforce, and we strive to make inclusion a hallmark of our culture. Our Associate Resource Group (“ARG”) programs are led by and comprised of associates who have diverse backgrounds and experiences, and who share a common interest in professional development, improving corporate culture, and building stronger communities. Currently, Seacoast ARGs include Black Associates and Allies Network, LGBTQ+, Veterans, and Women Mean Business. Each is sponsored and supported by senior leaders across the enterprise.
  • Seacoast launched a new associate engagement & performance management platform in February of 2021. The tool provides an integrated platform supporting associate engagement and performance management routines, further supporting the bank’s high performance culture.

OTHER INFORMATION
Conference Call Information
Seacoast will host a conference call on April 23, 2021 at 10:00 a.m. (Eastern Time) to discuss the first quarter and year end 2021 earnings results and business trends. Investors may call in (toll-free) by dialing (800) 774-6070 (passcode: 8255 031#; host: Charles Shaffer). Charts will be used during the conference call and may be accessed at Seacoast's website at www.SeacoastBanking.com by selecting "Presentations" under the heading "News/Events." A replay of the call will be available for one month, beginning late afternoon on April 23, 2021, by clicking here and using passcode 50130036.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading "Corporate Information." Beginning late afternoon on April 23, 2021, an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast will be available for one year.

About Seacoast Banking Corporation of Florida (NASDAQ: SBCF)
Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $8.8 billion in assets and $7.4 billion in deposits as of March 31, 2021. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through advanced banking solutions, and 48 traditional branches of its locally-branded, wholly-owned subsidiary bank, Seacoast National Bank. Offices stretch from Fort Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties. More information about the Company is available at www.SeacoastBanking.com.

Cautionary Notice Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning, and protections, of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that we have acquired, or expect to acquire, including Legacy Bank of Florida, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical facts, any of which may be impacted by the COVID-19 pandemic and related effects on the U.S. economy. Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates and intentions about future performance and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.

All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may", "will", "anticipate", "assume", "should", "support", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "further", "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 effects of future economic and market conditions, including seasonality and the adverse impact of COVID-19 (economic and otherwise); 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; changes in accounting policies, rules and practices, including the impact of the adoption of CECL; our participation in the Paycheck Protection Program ("PPP"); the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; uncertainty related to the impact of LIBOR calculations on securities and loans; changes in borrower credit risks and payment behaviors; changing retail distribution strategies, customer preferences and behavior; 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 commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry; our concentration in commercial real estate loans; 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 our investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire desirable financial institutions; changes in technology or products that may be more difficult, costly, or less effective than anticipated; our ability to identify and address increased cybersecurity risks; inability of our risk management framework to manage risks associated with our business; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms; reduction in or the termination of our ability to use the mobile-based platform that is critical to our business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.

The risks relating to the Legacy Bank of Florida proposed merger include, without limitation: the timing to consummate the proposed merger; the risk that a condition to closing of the proposed merger may not be satisfied; the risk that the merger is not completed at all; the diversion of management time on issues related to the proposed merger; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectation; the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures on solicitations of customers by competitors; as well as difficulties and risks inherent with entering new markets.

The COVID-19 pandemic is adversely affecting Seacoast, its customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on its business, financial position, result of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect Seacoast’s revenues and values of its assets and liabilities, reduce the availability of funding to certain financial institutions, lead to a tightening of credit, and increase stock price volatility.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2020 under "Special Cautionary Notice Regarding Forward-looking Statements" and "Risk Factors", and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at www.sec.gov.

  
FINANCIAL HIGHLIGHTS(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
  
 Quarterly Trends
          
(Amounts in thousands, except ratios and per share data)1Q'21 4Q'20 3Q'20 2Q'20 1Q'20
          
Summary of Earnings         
Net income$33,719  $29,347  $22,628  $25,080  $709 
Adjusted net income135,497  30,700  27,336  25,452  5,462 
Net interest income266,741  68,903  63,621  67,388  63,291 
Net interest margin2,33.51% 3.59% 3.40% 3.70% 3.93%
          
Performance Ratios         
Return on average assets-GAAP basis31.61% 1.39% 1.11% 1.27% 0.04%
Return on average tangible assets-GAAP basis3,41.70  1.49  1.20  1.37  0.11 
Adjusted return on average tangible assets1,3,41.75  1.50  1.38  1.33  0.32 
Net adjusted noninterest expense to average tangible assets1,3,42.16  2.00  2.24  2.11  2.46 
          
Return on average shareholders' equity-GAAP basis312.03  10.51  8.48  9.96  0.29 
Return on average tangible common equity-GAAP basis3,415.62  13.87  11.35  13.47  0.95 
Adjusted return on average tangible common equity1,3,416.01  14.00  13.06  13.09  2.86 
Efficiency ratio553.21  48.23  61.65  50.11  59.85 
Adjusted efficiency ratio151.99  48.75  54.82  49.60  53.55 
Noninterest income to total revenue (excluding securities gains/losses)21.07  17.85  21.06  17.00  18.84 
Tangible common equity to tangible assets410.71  11.01  10.67  10.19  10.68 
Average loan-to-deposit ratio81.39  84.48  87.83  88.48  93.02 
End of period loan-to-deposit ratio77.48  83.72  85.77  87.40  90.81 
          
Per Share Data         
Net income diluted-GAAP basis$0.60  $0.53  $0.42  $0.47  $0.01 
Net income basic-GAAP basis0.61  0.53  0.42  0.47  0.01 
Adjusted earnings10.63  0.55  0.50  0.48  0.10 
          
Book value per share common20.89  20.46  19.91  19.45  18.82 
Tangible book value per share16.62  16.16  15.57  15.11  14.42 
Cash dividends declared—          
          
          
1Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.
2Calculated on a fully taxable equivalent basis using amortized cost.
3These ratios are stated on an annualized basis and are not necessarily indicative of future periods.
4The Company defines tangible assets as total assets less intangible assets, and tangible common equity as total shareholders' equity less intangible assets.
5Defined as noninterest expense less amortization of intangibles and gains, losses, and expenses on foreclosed properties divided by net operating revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains and losses).
 


CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
  
 Quarterly Trends
          
(Amounts in thousands, except per share data)1Q'21 4Q'20 3Q'20 2Q'20 1Q'20
          
Interest on securities:         
Taxable$6,298   $6,477   $6,972   $7,573  $8,696  
Nontaxable148   86   125   121  122  
Fees on PPP loans5,390   3,603   161   4,010    
Interest on PPP loans1,496   1,585   1,558   1,058    
Interest and fees on loans - excluding PPP loans55,412   60,407   58,768   59,776  63,440  
Interest on federal funds sold and other investments586   523   556   684  734  
Total Interest Income69,330   72,681   68,140   73,222  72,992  
          
Interest on deposits1,065   1,228   1,299   1,203  3,190  
Interest on time certificates1,187   2,104   2,673   3,820  4,768  
Interest on borrowed money468   558   665   927  1,857  
Total Interest Expense2,720   3,890   4,637   5,950  9,815  
          
Net Interest Income66,610   68,791   63,503   67,272  63,177  
Provision for credit losses(5,715)  1,900   (845)  7,611  29,513  
Net Interest Income After Provision for Credit Losses72,325   66,891   64,348   59,661  33,664  
          
Noninterest income:         
Service charges on deposit accounts2,338   2,423   2,242   1,939  2,825  
Interchange income3,820   3,596   3,682   3,187  3,246  
Wealth management income2,323   1,949   1,972   1,719  1,867  
Mortgage banking fees4,225   3,646   5,283   3,559  2,208  
Marine finance fees189   145   242   157  146  
SBA gains287   113   252   181  139  
BOLI income859   889   899   887  886  
Other3,744   2,187   2,370   2,147  3,352  
 17,785   14,948   16,942   13,776  14,669  
Securities (losses) gains, net(114)  (18)  4   1,230  19  
Total Noninterest Income17,671   14,930   16,946   15,006  14,688  
          
Noninterest expenses:         
Salaries and wages21,393   21,490   23,125   20,226  23,698  
Employee benefits4,980   3,915   3,995   3,379  4,255  
Outsourced data processing costs4,468   4,233   6,128   4,059  4,633  
Telephone / data lines785   774   705   791  714  
Occupancy3,789   3,554   3,858   3,385  3,353  
Furniture and equipment1,254   1,317   1,576   1,358  1,623  
Marketing1,168   1,045   1,513   997  1,278  
Legal and professional fees2,582   509   3,018   2,277  3,363  
FDIC assessments526   528   474   266    
Amortization of intangibles1,211   1,421   1,497   1,483  1,456  
Foreclosed property expense and net (gain) loss on sale(65)  1,821   512   245  (315) 
Provision for credit losses on unfunded commitments   (795)  756   178  46  
Other4,029   3,869   4,517   3,755  3,694  
Total Noninterest Expense46,120   43,681   51,674   42,399  47,798  
          
Income Before Income Taxes43,876   38,140   29,620   32,268  554  
Income taxes10,157   8,793   6,992   7,188  (155) 
          
Net Income$33,719   $29,347   $22,628   $25,080  $709  
          
Per share of common stock:         
          
Net income diluted$0.60   $0.53   $0.42   $0.47  $0.01  
Net income basic0.61   0.53   0.42   0.47  0.01  
Cash dividends declared             
          
Average diluted shares outstanding55,992   55,739   54,301   53,308  52,284  
Average basic shares outstanding55,271   55,219   53,978   52,985  51,803  
          


CONDENSED CONSOLIDATED BALANCE SHEET(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
   
  March 31, December 31, September 30, June 30, March 31,
(Amounts in thousands) 2021 2020 2020 2020 2020
           
Assets          
Cash and due from banks $89,123   $86,630   $81,692   $84,178   $82,111  
Interest bearing deposits with other banks 890,202   317,458   227,876   440,142   232,763  
Total Cash and Cash Equivalents 979,325   404,088   309,568   524,320   314,874  
           
Time deposits with other banks 750   750   2,247   2,496   3,742  
           
Debt Securities:          
Available for sale (at fair value) 1,051,396   1,398,157   1,286,858   976,025   910,311  
Held to maturity (at amortized cost) 512,307   184,484   207,376   227,092   252,373  
Total Debt Securities 1,563,703   1,582,641   1,494,234   1,203,117   1,162,684  
           
Loans held for sale 60,924   68,890   73,046   54,943   29,281  
           
Loans 5,661,492   5,735,349   5,858,029   5,772,052   5,317,208  
Less: Allowance for credit losses (86,643)  (92,733)  (94,013)  (91,250)  (85,411) 
Net Loans 5,574,849   5,642,616   5,764,016   5,680,802   5,231,797  
           
Bank premises and equipment, net 70,385   75,117   76,393   69,041   71,540  
Other real estate owned 15,549   12,750   15,890   15,847   14,640  
Goodwill 221,176   221,176   221,176   212,146   212,085  
Other intangible assets, net 15,382   16,745   18,163   17,950   19,461  
Bank owned life insurance 132,634   131,776   130,887   127,954   127,067  
Net deferred tax assets 24,497   23,629   25,503   21,404   19,766  
Other assets 152,646   162,214   156,717   153,993   145,957  
Total Assets $8,811,820   $8,342,392   $8,287,840   $8,084,013   $7,352,894  
           
Liabilities and Shareholders' Equity          
Liabilities          
Deposits          
Noninterest demand $2,685,247   $2,289,787   $2,400,744   $2,267,435   $1,703,628  
Interest-bearing demand 1,647,935   1,566,069   1,385,445   1,368,146   1,234,193  
Savings 768,362   689,179   655,072   619,251   554,836  
Money market 1,671,179   1,556,370   1,457,078   1,232,892   1,124,378  
Other time certificates 373,297   425,878   457,964   445,176   489,669  
Brokered time certificates 93,500   233,815   381,028   572,465   597,715  
Time certificates of more than $250,000 146,229   171,463   177,512   161,418   183,080  
Total Deposits 7,385,749   6,932,561   6,914,843   6,666,783   5,887,499  
           
Securities sold under agreements to repurchase 109,171   119,609   89,508   92,125   64,723  
Federal Home Loan Bank borrowings       35,000   135,000   265,000  
Subordinated debt 71,436   71,365   71,295   71,225   71,155  
Other liabilities 90,115   88,455   78,853   88,277   72,730  
Total Liabilities 7,656,471   7,211,990   7,189,499   7,053,410   6,361,107  
           
Shareholders' Equity          
Common stock 5,529   5,524   5,517   5,299   5,271  
Additional paid in capital 858,688   856,092   854,188   811,328   809,533  
Retained earnings 290,420   256,701   227,354   204,719   179,646  
Treasury stock (8,693)  (8,285)  (7,941)  (8,037)  (7,422) 
  1,145,944   1,110,032   1,079,118   1,013,309   987,028  
Accumulated other comprehensive income, net 9,405   20,370   19,223   17,294   4,759  
Total Shareholders' Equity 1,155,349   1,130,402   1,098,341   1,030,603   991,787  
Total Liabilities & Shareholders' Equity $8,811,820   $8,342,392   $8,287,840   $8,084,013   $7,352,894  
           
Common shares outstanding 55,294   55,243   55,169   52,991   52,709  
           


CONSOLIDATED QUARTERLY FINANCIAL DATA(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
  
  
          
(Amounts in thousands)1Q'21 4Q'20 3Q'20 2Q'20 1Q'20
          
Credit Analysis         
Net charge-offs - non-acquired loans$292   $3,028  $1,112  $1,714  $1,316  
Net charge-offs (recoveries) - acquired loans78   99  624  37  (343) 
Total Net Charge-offs 370   3,127  1,736  1,751  973  
          
Net charge-offs to average loans - non-acquired loans0.02 % 0.20% 0.08% 0.12% 0.10 %
Net charge-offs (recoveries) to average loans - acquired loans0.01   0.01  0.04    (0.03) 
Total Net Charge-offs to Average Loans0.03   0.21  0.12  0.12  0.07  
          
Allowance for credit losses - non-acquired loans$66,523   $69,786  $70,388  $73,587  $69,498  
Allowance for credit losses - acquired loans20,120   22,947  23,625  17,663  15,913  
Total Allowance for Credit Losses$86,643   $92,733  $94,013  $91,250  $85,411  
          
Non-acquired loans at end of period$4,208,911   $4,196,205  $4,157,376  $4,315,892  $4,373,378  
Acquired loans at end of period870,928   972,183  1,061,853  879,710  943,830  
Paycheck Protection Program loans at end of period1581,653   566,961  638,800  576,450    
Total Loans$5,661,492   $5,735,349  $5,858,029  $5,772,052  $5,317,208  
          
Non-acquired loans allowance for credit losses to non-acquired loans at end of period1.58 % 1.66% 1.69% 1.71% 1.59 %
Total allowance for credit losses to total loans at end of period1.53   1.62  1.60  1.58  1.61  
Total allowance for credit losses to total loans, excluding PPP loans1.71   1.79  1.80  1.76  1.61  
Purchase discount on acquired loans at end of period2.93   2.86  3.01  3.29  3.36  
          
End of Period         
Nonperforming loans$35,328   $36,110  $36,897  $30,051  $25,582  
Other real estate owned10,836   10,182  12,299  10,967  11,048  
Properties previously used in bank operations included in other real estate owned4,713   2,569  3,592  4,880  3,592  
Total Nonperforming Assets$50,877   $48,861  $52,788  $45,898  $40,222  
          
          
Accruing troubled debt restructures (TDRs)$4,067   $4,182  $10,190  $10,338  $10,833  
          
Nonperforming Loans to Loans at End of Period0.62 % 0.63% 0.63% 0.52% 0.48 %
Nonperforming Assets to Total Assets at End of Period0.58   0.59  0.64  0.57  0.55  
          
 March 31, December 31, September 30, June 30, March 31,
Loans2021 2020 2020 2020 2020
          
Construction and land development$227,117   $245,108  $280,610  $298,835  $295,405  
Commercial real estate - owner occupied1,133,085   1,141,310  1,125,460  1,076,650  1,082,893  
Commercial real estate - non-owner occupied1,438,365   1,395,854  1,394,464  1,392,787  1,381,096  
Residential real estate1,246,549   1,342,628  1,393,396  1,468,171  1,559,754  
Commercial and financial860,813   854,753  833,083  757,232  796,038  
Consumer173,910   188,735  192,216  201,927  202,022  
Paycheck Protection Program581,653   566,961  638,800  576,450    
Total Loans$5,661,492   $5,735,349  $5,858,029  $5,772,052  $5,317,208  
          
13Q'20 includes $54 million in Paycheck Protection Program loans acquired from Freedom Bank.


AVERAGE BALANCES, INTEREST INCOME AND EXPENSES, YIELDS AND RATES 1(Unaudited)      
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
                  
                  
 1Q'21 4Q'20 1Q'20
 Average   Yield/ Average   Yield/ Average   Yield/
(Amounts in thousands)Balance Interest Rate Balance Interest Rate Balance Interest Rate
                  
Assets                 
Earning assets:                 
Securities:                 
Taxable$1,550,457   $6,298   1.62 % $1,496,536   $6,477  1.73% $1,152,473   $8,696  3.02%
Nontaxable25,932   187   2.89   25,943   109  1.68  19,740   152  3.09 
Total Securities1,576,389   6,485   1.65   1,522,479   6,586  1.73  1,172,213   8,848  3.02 
                  
Federal funds sold and other investments377,344   586   0.63   197,379   523  1.05  87,924   734  3.36 
                  
Loans excluding PPP loans5,149,642   55,504   4.37   5,276,224   60,497  4.56  5,215,234   63,524  4.90 
PPP loans609,733   6,886   4.58   629,855   5,187  3.28        
Total Loans5,759,375   62,390   4.39   5,906,079   65,684  4.42  5,215,234   63,524  4.90 
                  
Total Earning Assets7,713,108   69,461   3.65   7,625,937   72,793  3.80  6,475,371   73,106  4.54 
                  
Allowance for credit losses(91,735)      (93,148)      (56,931)     
Cash and due from banks255,685       235,519       90,084      
Premises and equipment74,272       76,001       67,585      
Intangible assets237,323       238,631       226,712      
Bank owned life insurance132,079       131,208       126,492      
Other assets164,622       162,248       126,230      
                  
Total Assets$8,485,354       $8,376,396       $7,055,543      
                  
Liabilities and Shareholders' Equity                 
Interest-bearing liabilities:                 
Interest-bearing demand$1,600,490   $258   0.07 % $1,458,299   $249  0.07% $1,173,930   $834  0.29%
Savings722,274   137   0.08   672,864   166  0.10  526,727   348  0.27 
Money market1,609,938   670   0.17   1,523,960   813  0.21  1,128,757   2,008  0.72 
Time deposits711,320   1,187   0.68   911,091   2,104  0.92  1,151,750   4,768  1.67 
Securities sold under agreements to repurchase112,834   41   0.15   101,665   42  0.16  71,065   167  0.95 
Federal Home Loan Bank borrowings   —   —   15,978   80  1.99  250,022   968  1.56 
Other borrowings71,390   427   2.43   71,321   436  2.43  71,114   722  4.08 
                  
Total Interest-Bearing Liabilities4,828,246   2,720   0.23   4,755,178   3,890  0.33  4,373,365   9,815  0.90 
                  
Noninterest demand2,432,038       2,424,523       1,625,215      
Other liabilities88,654       85,622       62,970      
Total Liabilities7,348,938       7,265,323       6,061,550      
                  
Shareholders' equity1,136,416       1,111,073       993,993      
                  
Total Liabilities & Equity$8,485,354       $8,376,396       $7,055,543      
                  
Cost of deposits    0.13 %     0.19%     0.57%
Interest expense as a % of earning assets    0.14 %     0.20%     0.61%
Net interest income as a % of earning assets  $66,741   3.51 %   $68,903  3.59%   $63,291  3.93%
                  
                  
1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost.    
Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.    


CONSOLIDATED QUARTERLY FINANCIAL DATA(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
    
   March 31, December 31, September 30, June 30, March 31,
(Amounts in thousands) 2021 2020 2020 2020 2020
            
Customer Relationship Funding          
Noninterest demand          
Commercial  $2,189,564   $1,821,361  $1,973,494  $1,844,288  $1,336,352 
Retail  379,257   350,783  322,559  314,723  271,916 
Public funds  83,315   90,973  70,371  74,674  71,029 
Other  33,111   26,670  34,320  33,750  24,331 
Total Noninterest Demand 2,685,247   2,289,787  2,400,744  2,267,435  1,703,628 
            
Interest-bearing demand          
Commercial  497,047   454,909  413,513  412,846  349,315 
Retail  895,853   839,958  777,078  733,772  671,378 
Public funds  255,035   271,202  194,854  221,528  213,500 
Total Interest-Bearing Demand 1,647,935   1,566,069  1,385,445  1,368,146  1,234,193 
            
Total transaction accounts          
Commercial  2,686,611   2,276,270  2,387,007  2,257,134  1,685,667 
Retail  1,275,110   1,190,741  1,099,637  1,048,495  943,294 
Public funds  338,350   362,175  265,225  296,202  284,529 
Other  33,111   26,670  34,320  33,750  24,331 
Total Transaction Accounts 4,333,182   3,855,856  3,786,189  3,635,581  2,937,821 
            
Savings  768,362   689,179  655,072  619,251  554,836 
            
Money market          
Commercial  692,537   611,623  634,697  586,416  487,759 
Retail  701,453   661,311  613,532  579,126  572,785 
Brokered  197,389   196,616  141,808     
Public funds  79,800   86,820  67,041  67,350  63,834 
Total Money Market 1,671,179   1,556,370  1,457,078  1,232,892  1,124,378 
            
Brokered time certificates 93,500   233,815  381,028  572,465  597,715 
Other time certificates 519,526   597,341  635,476  606,594  672,749 
  613,026   831,156  1,016,504  1,179,059  1,270,464 
Total Deposits $7,385,749   $6,932,561  $6,914,843  $6,666,783  $5,887,499 
            
Customer sweep accounts $109,171   $119,609  $89,508  $92,125  $64,723 
            

Explanation of Certain Unaudited Non-GAAP Financial Measures

This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). 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.

  
GAAP TO NON-GAAP RECONCILIATION(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
          
 Quarterly Trends
          
(Amounts in thousands, except per share data)1Q'21 4Q'20 3Q'20 2Q'20 1Q'20
          
Net Income$33,719   $29,347   $22,628   $25,080   $709  
          
Total noninterest income17,671   14,930   16,946   15,006   14,688  
Securities losses (gains), net114   18   (4)  (1,230)  (19) 
Total Adjustments to Noninterest Income114   18   (4)  (1,230)  (19) 
Total Adjusted Noninterest Income17,785   14,948   16,942   13,776   14,669  
          
Total noninterest expense46,120   43,681   51,674   42,399   47,798  
Merger related charges(581)     (4,281)  (240)  (4,553) 
Amortization of intangibles(1,211)  (1,421)  (1,497)  (1,483)  (1,456) 
Business continuity expenses            (307) 
Branch reductions and other expense initiatives(449)  (354)  (464)       
Total Adjustments to Noninterest Expense(2,241)  (1,775)  (6,242)  (1,723)  (6,316) 
Total Adjusted Noninterest Expense43,879   41,906   45,432   40,676   41,482  
          
Income Taxes10,157   8,793   6,992   7,188   (155) 
Tax effect of adjustments577   440   1,530   121   1,544  
Total Adjustments to Income Taxes577   440   1,530   121   1,544  
Adjusted Income Taxes10,734   9,233   8,522   7,309   1,389  
Adjusted Net Income$35,497   $30,700   $27,336   $25,452   $5,462  
          
Earnings per diluted share, as reported$0.60   $0.53   $0.42   $0.47   $0.01  
Adjusted Earnings per Diluted Share 0.63   0.55   0.50   0.48   0.10  
Average diluted shares outstanding55,992   55,739   54,301   53,308   52,284  
          
Adjusted Noninterest Expense$43,879   $41,906   $45,432   $40,676   $41,482  
Provision for credit losses on unfunded commitments   795   (756)  (178)  (46) 
Foreclosed property expense and net gain / (loss) on sale65   (1,821)  (512)  (245)  315  
Net Adjusted Noninterest Expense$43,944   $40,880   $44,164   $40,253   $41,751  
          
Revenue$84,281   $83,721   $80,449   $82,278   $77,865  
Total Adjustments to Revenue114   18   (4)  (1,230)  (19) 
Impact of FTE adjustment131   112   118   116   114  
Adjusted Revenue on a fully taxable equivalent basis$84,526   $83,851   $80,563   $81,164   $77,960  
Adjusted Efficiency Ratio51.99 % 48.75 % 54.82 % 49.60 % 53.55 %
          
Net Interest Income$66,610   $68,791   $63,503   $67,272   $63,177  
Impact of FTE adjustment131   112   118   116   114  
Net Interest Income including FTE adjustment$66,741   $68,903   $63,621   $67,388   $63,291  
Total noninterest income17,671   14,930   16,946   15,006   14,688  
Total noninterest expense46,120   43,681   51,674   42,399   47,798  
Pre-Tax Pre-Provision Earnings$38,292   $40,152   $28,893   $39,995   $30,181  
Total Adjustments to Noninterest Income114   18   (4)  (1,230)  (19) 
Total Adjustments to Noninterest Expense(2,176)  (2,801)  (7,510)  (2,146)  (6,047) 
Adjusted Pre-Tax Pre-Provision Earnings$40,582   $42,971   $36,399   $40,911   $36,209  
          
Average Assets$8,485,354   $8,376,396   $8,086,890   $7,913,002   $7,055,543  
Less average goodwill and intangible assets(237,323)  (238,631)  (228,801)  (230,871)  (226,712) 
Average Tangible Assets$8,248,031   $8,137,765   $7,858,089   $7,682,131   $6,828,831  
          
Return on Average Assets (ROA)1.61 % 1.39 % 1.11 % 1.27 % 0.04 %
Impact of removing average intangible assets and related amortization0.09   0.10   0.09   0.10   0.07  
Return on Average Tangible Assets (ROTA)1.70   1.49   1.20   1.37   0.11  
Impact of other adjustments for Adjusted Net Income0.05   0.01   0.18   (0.04)  0.21  
Adjusted Return on Average Tangible Assets1.75   1.50   1.38   1.33   0.32  
          
Average Shareholders' Equity$1,136,416   $1,111,073   $1,061,807   $1,013,095   $993,993  
Less average goodwill and intangible assets(237,323)  (238,631)  (228,801)  (230,871)  (226,712) 
Average Tangible Equity$899,093   $872,442   $833,006   $782,224   $767,281  
          
Return on Average Shareholders' Equity12.03 % 10.51 % 8.48 % 9.96 % 0.29 %
Impact of removing average intangible assets and related amortization3.59   3.36   2.87   3.51   0.66  
Return on Average Tangible Common Equity (ROTCE)15.62   13.87   11.35   13.47   0.95  
Impact of other adjustments for Adjusted Net Income0.39   0.13   1.71   (0.38)  1.91  
Adjusted Return on Average Tangible Common Equity 16.01   14.00   13.06   13.09   2.86  
          
Loan interest income1$62,390   $65,684   $60,573   $64,929   $63,524  
Accretion on acquired loans(2,868)  (4,448)  (3,254)  (2,988)  (4,287) 
Interest and fees on PPP loans(6,886)  (5,187)  (1,719)  (5,068)    
Loan interest income excluding PPP and accretion on acquired loans$52,636   $56,049   $55,600   $56,873   $59,237  
          
Yield on loans14.39   4.42   4.11   4.56   4.90  
Impact of accretion on acquired loans(0.20)  (0.30)  (0.22)  (0.21)  (0.33) 
Impact of PPP loans(0.04)  0.11   0.33   (0.04)    
Yield on loans excluding PPP and accretion on acquired loans4.15 % 4.23 % 4.22 % 4.31 % 4.57 %
          
Net Interest Income1$66,741   $68,903   $63,621   $67,388   $63,291  
Accretion on acquired loans(2,868)  (4,448)  (3,254)  (2,988)  (4,287) 
Interest and fees on PPP loans(6,886)  (5,187)  (1,719)  (5,068)    
Net interest income excluding PPP and accretion on acquired loans$56,987   $59,268   $58,648   $59,332   $59,004  
          
Net Interest Margin3.51   3.59   3.40   3.70   3.93  
Impact of accretion on acquired loans(0.15)  (0.23)  (0.17)  (0.16)  (0.27) 
Impact of PPP loans(0.11)  0.01   0.19   (0.08)    
Net interest margin excluding PPP and accretion on acquired loans3.25 % 3.37 % 3.42 % 3.46 % 3.66 %
          
Security interest income1$6,485   $6,586   $7,129   $7,725   $8,848  
Tax equivalent adjustment on securities(39)  (23)  (32)  (31)  (30) 
Security interest income excluding tax equivalent adjustment$6,446   $6,563   $7,097   $7,694   $8,818  
          
Loan interest income1$62,390   $65,684   $60,573   $64,929   $63,524  
Tax equivalent adjustment on loans(92)  (89)  (86)  (85)  (84) 
Loan interest income excluding tax equivalent adjustment$62,298   $65,595   $60,487   $64,844   $63,440  
          
Net Interest Income1$66,741   $68,903   $63,621   $67,388   $63,291  
Tax equivalent adjustment on securities(39)  (23)  (32)  (31)  (30) 
Tax equivalent adjustment on loans(92)  (89)  (86)  (85)  (84) 
Net interest income excluding tax equivalent adjustment$66,610   $68,791   $63,503   $67,272   $63,177  
          
1On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost.

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