SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 16, 2003
SEACOAST BANKING CORPORATION OF FLORIDA
(Exact Name of Registrant as Specified in Charter)
Florida 1-13660 59-2260678
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
815 Colorado Avenue, Stuart, FL 34994
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code (772) 287-4000
8K - 1 of 4
SEACOAST BANKING CORPORATION OF FLORIDA
Item 7. Financial Statements and Exhibits
Exhibit Number Description
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99.1 Press Release dated April 16, 2003, with
respect to Seacoast Banking Corporation
of Florida's financial results for the
first quarter ended March 31, 2003.
Item 9. Regulation FD Disclosure
Seacoast Banking Corporation of Florida (the "Registrant") is furnishing the
information required by Item 12 of Form 8-K, "Results of Operations and
Financial Condition," under this Item 9.
On April 16, 2003, the Registrant announced its financial results for the first
quarter ended March 31, 2003. A copy of the press release announcing the
Registrant's results for the first quarter ended March 31, 2003 is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
On April 16, 2003, the Registrant held an investor conference call to discuss
financial results for the first quarter ended March 31, 2003. All information
contained herein is presented as of April 16, 2003, and the Registrant does not
assume any obligation to correct or update said information in the future.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SEACOAST BANKING CORPORATION OF FLORIDA
(Registrant)
Dated: April 16, 2003 By: /s/ William R. Hahl
-------------- -------------------
Name: William R. Hahl
Title: Executive Vice President & CFO
Exhibit Index
Exhibit Number Description
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99.1 Press Release dated April 16, 2003,
issued by Seacoast Banking Corporation
of Florida (the "Registrant").
EXHIBIT 99.1
NEWS RELEASE
Dennis S. Hudson, III
President and Chief Executive Officer
Seacoast Banking Corporation of Florida
(772) 288-6086
William R. Hahl
Executive Vice President/
Chief Financial Officer
(772) 221-2825
SEACOAST REPORTS AN INCREASE OF 7% IN CORE OPERATING
EARNINGS FOR THE FIRST QUARTER
STUART, FL., April 16, 2003 - Seacoast Banking Corporation of Florida
(NASDAQ-NMS: SBCF), a bank holding company whose principal subsidiary is First
National Bank and Trust Company of the Treasure Coast, today reported net income
totaling $3,223,000 or $0.23 diluted earnings per share ("DEPS") for the first
quarter of 2003, compared to $3,686,000 or $0.26 DEPS for the first quarter a
year ago. Core operating earnings, which exclude the impacts of security gains
and losses, totaled $3,955,000 or $0.28 DEPS, up $269,000 or 7.3 percent from a
year ago. Included in the first quarter results is the impact on earnings from
restructuring the Company's investment portfolio for better performance in the
current interest rate environment. A total of $1,157,000 or $0.05 DEPS in
investment security losses were recorded in first quarter earnings versus
$66,000 of gains in the prior year's first quarter. "Seacoast begins 2003 with
quality growth, a very strong balance sheet and the people, processes, capital,
and expanded markets to allow for stronger future performance," commented Dennis
S. Hudson, III, Chief Executive Officer of Seacoast.
The need to restructure the investment portfolio was caused by increased
prepayments of collateralized mortgage obligations, resulting in unacceptable
asset sensitivity, accelerated premium amortization and a decline in investment
portfolio yields. The Company's investment portfolio yield for the first quarter
was 36 basis points lower than the fourth quarter yield.
Highlights for the quarter included the following:
o Return on average assets was 1.02 percent (1.25% excluding
impacts from securities gains and losses), compared to 1.18
percent for the first quarter of 2002;
o The return on average equity for the first quarter was 13.07
percent (16.04 percent excluding impacts from securities gains
and losses), compared to 15.45 percent the first quarter of 2002;
o Average equity to average assets remained strong at 7.81 percent
compared to 7.67 percent one year earlier;
o Exceptional residential mortgage production continued with a
total of $85.5 million in residential applications processed in
the first quarter of 2003 compared to $42 million in 2002, an
increase of 103.6 percent;
o Average noninterest bearing deposits increased $19 million or
11.3 percent from the first quarter last year, and now total
18.5% of total deposits;
o Asset quality exhibited little change with nonperforming assets
ratio of 0.29 percent compared to 0.33 percent at year-end and
0.22 percent in the first quarter 2002; and
o Seacoast Marine originated loans totaling $38.3 million for the
period ended March 31, 2003, compared to $15.4 million in the
same period for 2002.
The net interest margin for the quarter was 3.89 percent, representing a
decline from the 4.05 percent achieved in last year's first quarter and the 4.02
percent in the fourth quarter of 2002. The decline in the net interest margin
resulted from interest sensitive assets repricing, as a result of a flatter
yield curve and the Fed's last 50-basis point rate cut on November 6 without a
comparable decline in deposit rates and other interest sensitive liabilities.
Net interest income declined to $11,639,000 by $177,000 or 1.5 percent from
last year's first quarter, but was flat when compared to fourth quarter 2002's
$11,648,000. The marginal decline in interest income comes from the shift in the
Company's balance sheet during 2002 to a slightly asset sensitive position in
anticipation of higher interest rates in 2003. However, the fundamentals of the
Company remain very good and the prospects for margin improvement, as a result
of increased loan growth from the expansion into Palm Beach County, will be a
key to future increased shareholder value.
The cost for interest bearing deposits declined to 1.71 percent from 2.74
percent in the first quarter 2002 and 2.01 percent in the fourth quarter.
Interest bearing deposits increased $18.6 million, representing an 8.8 percent
annualized growth during the first quarter 2003. Lower cost savings, NOW and
money market balances increased $18.0 million or an annualized growth of 15.2
percent in the first three months of 2003 and noninterest bearing demand
deposits increased $11.5 million or 24.9 percent annualized.
Although total loans outstanding were lower than prior year, the Company's
commercial and commercial real estate portfolio increased $7.2 million in the
first quarter or 9.8 percent annualized. The response to the expansion into Palm
Beach County in late 2002 has been very positive. The addition of two full
service branches in January 2003, combined with three commercial loan officers,
has resulted in a pipeline of over $31 million in loans in this new market. The
recent acquisition of Palm Beach County's two largest community banks by large
out-of-market competitors has further enhanced the prospects for future loan and
deposit growth from this market.
Noninterest income, excluding securities gains and losses, increased 34.8
percent when compared to the prior year's first quarter, reflecting reduced
revenues from investment management services, offset by growing revenues from
mortgage banking and marine lending. During the first quarter 2003, noninterest
income related to mortgage loan production grew by 111.1 percent to $1,638,000
compared with $776,000 earned in the first quarter of 2003. Likewise, revenues
from marine loan production increased to $807,000 or an increase of $640,000
from the prior year's first quarter. Both business lines benefited from
expansion and the favorable interest rate environment. Mortgage banking has
added resources in the existing Treasure Coast markets, where Seacoast ranks
second in deposit market share and has the convenience of 25 full service
branches, and in the fast growing Palm Beach County market, where we now have
three offices and three more planned for 2004 and 2005. The Seacoast Marine
Finance division added seven employees in California to its production team to
fully serve the western marine markets, including the states of Washington and
Oregon. The decline in revenues from investment management has been
disappointing and remains extremely challenging due to the economic environment
and the uncertainties for improvement; however, continuing to provide these
services is an important part of our SuperCommunity banking strategy. In
addition, when the economy does improve, these revenues will expand and
contribute to future earnings results.
Noninterest expenses increased $776,000 or 7.7 percent from the fourth
quarter, as a result of opening two new branches in the first quarter and
increased commission expenses due to higher volumes of mortgage banking and
marine lending business.
Core deposit growth continued to enhance fees by increasing the customer
base and usage of check cards. During the first quarter 2003, a total of
$289,000 in interchange income was earned compared to $223,000 for the same
period in 2002.
Net loan charge offs were $280,000 for the first quarter of 2003, compared
to net charge-offs of $124,000 for 2002. Loan delinquencies, nonaccruals and the
percentage of loans past due 90 days to average loans declined to 0.29 percent
at March 31, 2003, compared to 0.33 percent for the fourth quarter 2002.
Nonperforming assets totaled $1,901,000, representing little change from the
$1,670,000 for the same quarter a year ago. The consistent credit quality and
low net charge-offs allowed the Company to eliminate the provision for loan
losses for the quarter. No provision was made in the prior year's first quarter.
The Company's effective tax rate for the first quarter 2003 was 34.7
percent compared to 39.2 percent for the same quarter in 2002. At the beginning
of 2003 the Company formed a Real Estate Investment Trust to more efficiently
manage its real estate assets and to reduce its effective tax rate and tax
expenses.
Seacoast Banking Corporation of Florida has approximately $1.3 billion in
assets. It is one of the largest independent commercial banking organizations in
Florida, headquartered on Florida's Treasure Coast, one of the wealthiest and
fastest growing areas in the nation.
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This press release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.
Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, estimates and intentions,
and involve known and unknown risks, uncertainties and other factors, which may
be beyond our control, and which may cause the actual results, performance or
achievements of Seacoast Banking Corporation of Florida ("Seacoast" or the
"Company") to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. You should
not expect us to update any forward-looking statements.
You can identify these forward-looking statements through our use of words such
as "may", "will", "anticipate", "assume", "should", "indicate", "would",
"believe", "contemplate", "expect", "estimate", "continue", "point to",
"project", "could", "intend" or other similar words and expressions of the
future. These forward-looking statements may not be realized due to a variety of
factors, including, without limitation: the effects of future economic
conditions; governmental monetary and fiscal policies, as well as legislative
and regulatory changes; the risks of changes in interest rates on the level and
composition of deposits, loan demand, and the values of loan collateral,
securities, and interest sensitive assets and liabilities; interest rate risks
and sensitivities; 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 the Company's market area
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; the failure of
assumptions underlying the establishment of reserves for possible loan losses,
and the risks of mergers and acquisitions, including, without limitation, the
related costs, including integrating operations as part of these transactions,
and the failure to achieve the expected gains, revenue growth and/or expense
savings from such transactions.
All written or oral forward looking statements attributable to the Company are
expressly qualified in their entirety by this Cautionary Notice including,
without limitation, those risks and uncertainties, described in the Company's
annual report on Form 10-K for the year ended December 31, 2002 under "Special
Cautionary Notice Regarding Forward Looking Statements", and otherwise in the
Company's SEC reports and filings. Such reports are available upon request from
Seacoast, or from the Securities and Exchange Commission, including the SEC's
website at http://www.sec.gov.
FINANCIAL HIGHLIGHTS
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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Three Months Ended
(Dollars in thousands, March 31,
except per share data) 2003 2002
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Summary of Earnings $ 3,223 $ 3,686
Net interest income (1) 11,639 11,816
Performance Ratios
Return on average assets (2), (3) 1.02% 1.18%
Return on average
shareholders' equity (2), (3) 13.07 15.45
Net interest margin (1), (2) 3.89 4.05
Per Share Data (A)
Net income diluted $ 0.23 $ 0.26
Net income basic 0.23 0.26
Cash dividends declared 0.11 0.10
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March 31,
------------------------ Increase/
2003 2002 (Decrease)
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Credit Analysis
Net charge-offs year-to-date $ 280 $ 124 125.8%
Net charge-offs to average loans 0.16% 0.06% 166.7
Loan loss provision year-to-date $ - $ - -
Allowance to loans at end of period 0.99% 0.92% 7.6
Nonperforming assets $ 1,901 $ 1,670 13.8
Nonperforming assets to loans
and other real estate owned
at end of period 0.29% 0.22% 31.8
Selected Financial Data
Total assets $1,297,826 $1,252,181 3.6
Securities -
Trading (at fair value) 43,719 - n/m
Securities -
Available for Sale (at fair value) 440,185 339,377 29.7
Securities -
Held for Sale (at amortized cost) 19,998 24,186 (17.3)
Net loans 654,990 747,625 (12.4)
Deposits 1,060,591 1,040,170 2.0
Shareholders' equity 100,526 94,602 6.3
Book value per share (A) 7.22 6.75 7.0
Tangible book value per share (A) 6.98 6.46 8.0
Average shareholders' equity
to average assets 7.81% 7.67% 1.8
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(A) Per share amounts reflect impact of 3-for-1 stock split effective July 1,
2002.
(1) Calculated on a fully taxable equivalent basis using amortized cost.
(2) These ratios are stated on an annualized basis and are not necessarily
indicative of future periods. (3) The calculation of ROA and ROE do not include
the mark-to-market unrealized gains (losses) because the unrealized gains
(losses) are not included in net income.
n/m = not meaningful
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Three Months Ended
March 31,
(Dollars in thousands, ----------------------------------
except per share data) 2003 2002
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Interest on securities:
Taxable $ 4,033 $ 3,256
Nontaxable 41 52
Interest and fees on loans 11,982 14,768
Interest on federal funds sold 21 285
-----------------------------------
Total Interest Income 16,077 18,361
Interest on deposits 903 1,346
Interest on time certificates 2,701 4,388
Interest on borrowed money 873 850
-----------------------------------
Total Interest Expense 4,477 6,584
-----------------------------------
Net Interest Income 11,600 11,777
Provision for loan losses 0 0
-----------------------------------
Net Interest Income After Provision
for Loan Losses 11,600 11,777
Noninterest income:
Service charges on deposit accounts 1,217 1,217
Trust income 524 597
Mortgage banking fees 1,638 776
Brokerage commissions and fees 420 543
Marine finance fees 807 167
Debit card income 289 223
Other deposit based EFT fees 116 101
Other income 360 359
-----------------------------------
5,371 3,983
Securities gains (losses) (1,157) 66
-----------------------------------
Total Noninterest Income 4,214 4,049
Noninterest expenses:
Salaries and wages 4,159 3,760
Employee benefits 1,216 1,048
Occupancy expense 1,286 1,246
Furniture and equipment expense 994 829
Outsourced data processing 499 535
Marketing expense 550 513
Legal and professional fees 408 325
FDIC assessments 41 43
Amortization of intangibles 63 63
Other expense 1,659 1,406
----------------------------------
Total Noninterest Expenses 10,875 9,768
Income Before Income Taxes 4,939 6,058
Provision for income taxes 1,716 2,372
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Net Income $ 3,223 $ 3,686
----------------------------------
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Per share common stock (A):
Net income diluted $ 0.23 $ 0.26
Net income basic 0.23 0.26
Cash dividends declared 0.11 0.10
Average diluted shares outstanding 14,248,755 14,304,921
Average basic shares outstanding 13,923,795 14,007,291
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(A) Per share amounts reflect impact of 3-for-1 stock split effective July 1,
2002.
CONDENSED CONSOLIDATED BALANCE SHEETS
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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
March 31, December 31, March 31,
(Dollars in thousands) 2003 2002 2002
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Assets
Cash and due from banks $ 63,534 $ 49,571 $ 46,992
Federal funds sold and
interest bearing deposits 30,990 251 53,417
Securities:
Trading (at fair value) 43,719 - -
Available for sale (at fair value) 440,185 466,278 339,377
Held for Sale (at amortized cost) 19,998 32,181 24,186
-----------------------------------------
Total Securities 503,902 498,459 363,563
Loans sold and available for sale 11,696 13,814 10,095
Loans 661,536 688,161 754,535
Less: Allowance for loan losses (6,546) (6,826) (6,910)
-----------------------------------------
Net Loans 654,990 681,335 747,625
Bank premises and equipment 16,036 16,045 15,101
Other real estate owned - 8 192
Other assets 16,678 21,814 15,196
-----------------------------------------
$1,297,826 $1,281,297 $1,252,181
-----------------------------------------
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand deposits (noninterest
bearing) $ 195,989 $ 184,524 $ 178,781
Savings deposits 490,976 472,976 474,107
Other time deposits 276,777 279,255 297,559
Time certificates of $100,000
or more 96,849 93,785 89,723
-----------------------------------------
Total Deposits 1,060,591 1,030,540 1,040,170
Federal funds purchased and
securities sold under
agreements to repurchase,
maturing within 30 days 65,241 102,967 70,754
Other borrowings 65,000 40,000 40,000
Other liabilities 6,468 7,043 6,655
-----------------------------------------
1,197,300 1,180,550 1,157,579
Shareholders' Equity
Preferred stock - - -
Common stock 1,555 1,555 1,554
Additional paid in capital 26,994 26,994 26,888
Retained earnings 90,533 89,960 82,815
Treasury stock (17,916) (18,578) (16,440)
-----------------------------------------
101,166 99,931 94,817
Securities valuation equity
(allowance) (640) 816 (215)
-----------------------------------------
Total Shareholders' Equity 100,526 100,747 94,602
-----------------------------------------
$1,297,826 $1,281,297 $1,252,181
-----------------------------------------
Common Shares Outstanding 13,928,951 13,890,001 14,015,874
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Note: The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date.
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Quarters
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2003 2002
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(Dollars in thousands, Last 12
except per share data) First Fourth Third Second Months
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Operating Ratios
Return on average assets (2),(3) 1.02% 1.32% 1.17% 1.33% 1.21%
Return on average shareholders' equity (2),(3) 13.07 16.24 14.19 16.76 15.06
Net interest margin (1),(2) 3.89 4.02 4.17 4.23 4.09
Average equity to average assets 7.81 8.12 8.26 7.92 8.02
Credit Analysis
Net charge-offs $ 280 $ 7 $ 69 $ 8 $ 364
Net charge-offs to average loans 0.16% 0.00% 0.04% 0.00% 0.05%
Loan loss provision $ - $ - $ - $ - $ -
Allowance to loans at end of period 0.99% 0.99% 0.95% 0.94%
Nonperforming assets $ 1,901 $2,249 $2,454 $1,993
Nonperforming assets to loans and other
real estate owned at end of period 0.29% 0.33% 0.34% 0.27%
Nonaccrual loans and accruing loans 90
days or more past due to loans outstanding
at end of period 0.29 0.33 0.32 0.26
Per Share Common Stock (A)
Net income diluted $ 0.23 $ 0.28 $ 0.25 $ 0.28 $ 1.04
Net income basic 0.23 0.29 0.25 0.29 1.07
Cash dividends declared 0.11 0.11 0.10 0.10 0.42
Book value per share 7.22 7.25 7.11 7.05
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(A) Per share amounts reflect impact of 3-for-1 stock split effective July 1,
2002.
(1) Calculated on a fully taxable equivalent basis using amortized cost.
(2) These ratios are stated on an annualized basis and are not necessarily
indicative of ratios which may be expected for the entire year. (3) The
calculation of ROA and ROE do not include the mark-to-market unrealized gains
(losses), because the unrealized gains (losses) are not included in net income.
CONSOLIDATED QUARTERLY FINANCIAL DATA
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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
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March 31, December 31, March 31,
SECURITIES 2003 2002 2002
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Mortgage-backed $ 43,719 $ - $ -
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Securites Trading 43,719 - -
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U.S. Treasury and U.S. Government
Agencies $ 2,501 $ 2,508 $ 2,538
Mutual funds - 292 278
Mortgage-backed 431,289 456,655 329,067
Other securities 6,395 6,823 7,494
----------------------------------------------
Securities Available for Sale 440,185 466,278 339,377
----------------------------------------------
Mortgage-backed 16,828 28,555 20,321
Obligations of states and political
subdivisions 3,170 3,626 3,865
----------------------------------------------
Securities Held for Investment 19,998 32,181 24,186
----------------------------------------------
Total Securities $503,902 $498,459 $363,563
----------------------------------------------
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March 31, December 31, March 31,
LOANS 2003 2002 2002
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Real estate construction $ 84,821 $ 77,909 $ 75,234
Real estate mortgage 452,465 478,123 540,108
Instalment loans to individuals 82,011 91,307 99,946
Commercial and financial 41,809 40,491 38,779
Other loans 430 331 468
----------------------------------------------
Total Loans $661,536 $688,161 $754,535
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AVERAGE BALANCES, YIELDS AND RATES
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
2003 2002
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First Quarter Fourth Quarter First Quarter
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Average Yield/ Average Yield/ Average Yield/
(Dollars in thousands) Balance Rate Balance Rate Balance Rate
------------------------------------------------------------------------------------------------------
Assets
Earning assets:
Securities:
Taxable $512,781 3.15% $411,457 3.49% $313,853 4.15%
Nontaxable 3,193 7.77 3,505 7.99 4,009 7.78
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Total Securities 515,974 3.17 414,962 3.53 317,862 4.20
Federal funds sold
and other short-
term investments 6,723 1.27 17,001 1.40 69,478 1.66
Loans, net 690,022 7.05 718,650 7.14 781,662 7.59
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Total Earning Assets 1,212,719 5.39 1,150,613 5.74 1,169,002 6.33
Allowance for loan losses (6,795) (6,817) (6,993)
Cash and due from banks 47,048 44,982 40,855
Premises and equipment 16,122 16,161 15,287
Other assets 12,105 12,357 13,806
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$1,281,199 $1,217,296 $1,231,957
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Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW (including Super NOW) $ 67,373 0.66% $ 61,321 0.77% $ 65,168 1.11%
Savings deposits 148,857 0.62 145,226 0.80 147,916 1.12
Money market accounts 265,843 0.86 254,627 1.01 242,428 1.27
Time deposits 372,273 2.94 376,043 3.36 394,162 4.51
Federal funds purchased and
securities sold under
agreements to repurchase 78,495 0.96 54,876 0.88 75,515 1.17
Other borrowings 56,944 4.90 40,000 6.42 40,000 6.42
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Total Interest-Bearing
Liabilities 989,785 1.83 932,093 2.13 965,189 2.77
Demand deposits (noninterest-bearing) 186,613 180,763 167,618
Other liabilities 4,787 5,612 4,709
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Total Liabilities 1,181,185 1,118,468 1,137,516
Shareholders' equity 100,014 98,803 94,441
--------------------------------------------------------------------
$1,281,199 $1,217,271 $1,231,957
--------------------------------------------------------------------
Interest expense as a % of earning assets 1.50% 1.73% 2.28%
Net interest income as a % of earning assets 3.89 4.02 4.05
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(1) On a fully taxable equivalent basis. All yields and rates have been
computed on an annualized basis using amortized cost. Fees on loans have
been included in interest on loans. Nonaccrual loans are included in loan
balances.