1 unchanged sentence
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
−Removed: CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
+Added: Three Months Ended March 31,
(In thousands, except per share data) 2023 2022
15 unchanged sentences
Mortgage banking fees 426 1,686
−Removed: Marine finance fees 209 152 712 518
+Added: Insurance agency income 1,101 —
SBA gains 322 156
2 unchanged sentences
22,338 15,825
−Removed: Securities losses, net ( 362 ) ( 30 ) ( 1,114 ) ( 199 )
+Added: Securities gains (losses), net 107 ( 452 )
Total Noninterest Income 22,445 15,373
23 unchanged sentences
Basic 80,151 61,127
−Removed: See notes to unaudited condensed consolidated financial statements.
+Added: See notes to unaudited consolidated financial statements.
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
−Removed: CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
+Added: Three Months Ended March 31,
(In thousands) 2023 2022
Net Income $ 11,827 $ 20,588
−Removed: Other comprehensive (loss) income:
−Removed: Available-for-sale securities:
−Removed: Unrealized losses on available-for-sale securities, net of tax benefit of $ 20.3 million and $ 56.8 million for the three and nine months ended September 30, 2022, respectively, and net of tax benefit of $ 1.3 million and $ 4.3 million for the three and nine months ended September 30, 2021, respectively
−Removed: $ ( 63,736 ) $ ( 4,459 ) $ ( 180,221 ) $ ( 15,014 )
−Removed: Amortization of unrealized gains and losses on securities transferred to held-to-maturity, net of tax benefit of $ 3 thousand and $ 4 thousand for the three and nine months ended September 30, 2022, respectively, and tax expense of $ 5 thousand and $ 16 thousand for the three and nine months ended September 30, 2021, respectively
−Removed: ( 11 ) 21 ( 9 ) 65
−Removed: Reclassification adjustment for losses included in net income, net of tax benefit of $ 19 thousand for the nine months ended September 30, 2021
−Removed: Available-for-sale securities, net of tax $ ( 63,747 ) $ ( 4,438 ) $ ( 180,230 ) $ ( 14,858 )
−Removed: Unrealized gains (losses) on derivatives designated as cash flow hedges, net of reclassifications to income, net of tax expense of $ 22 thousand and $ 3 thousand for the three and nine months ended September 30, 2022, respectively, and tax benefit of $ 32 thousand and $ 83 thousand for the three and nine months ended September 30, 2021, respectively
+Added: Other comprehensive income (loss):
+Added: Unrealized gains (losses) on available-for-sale securities, net of tax expense of $ 5.9 million and net of tax benefit of $ 20.6 million for the three months ended March 31, 2023 and 2022, respectively
$ 18,516 $ ( 66,012 )
−Removed: Total other comprehensive (loss) income $ ( 63,682 ) $ ( 4,532 ) $ ( 180,220 ) $ ( 15,101 )
−Removed: Comprehensive (Loss) Income $ ( 34,445 ) $ 18,412 $ ( 97,640 ) $ 72,972
−Removed: See notes to unaudited condensed consolidated financial statements.
+Added: Amortization of unrealized (gains) losses on securities transferred to held-to-maturity, net of tax benefit of $ 3 thousand and net of tax expense of $ 7 thousand for the three months ended March 31, 2023 and 2022, respectively
+Added: Reclassification adjustment for gains included in net income, net of tax expense of $ 1 thousand for the three months ended March 31, 2023
+Added: Unrealized gains (losses) on derivatives designated as cash flow hedges, net of reclassifications to income, net of tax expense of $ 33 thousand and net of tax benefit of $ 22 thousand for the three months ended March 31, 2023 and 2022, respectively
+Added: Total other comprehensive income (loss) $ 18,600 $ ( 66,040 )
+Added: Comprehensive Income (Loss) $ 30,427 $ ( 45,452 )
+Added: See notes to unaudited consolidated financial statements.
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
−Removed: CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
−Removed: September 30, December 31,
+Added: CONSOLIDATED BALANCE SHEETS (Unaudited)
+Added: March 31, December 31,
(In thousands, except share data) 2023 2022
5 unchanged sentences
Securities available-for-sale (at fair value) 2,015,967 1,871,742
−Removed: Securities held-to-maturity (fair value $ 645.4 million at September 30, 2022 and $ 627.4 million at December 31, 2021)
+Added: Securities held-to-maturity (fair value $ 618.8 million at March 31, 2023
+Added: and $ 617.7 million at December 31, 2022)
737,911 747,408
14 unchanged sentences
Securities sold under agreements to repurchase, maturing within 30 days 267,606 172,029
+Added: Federal Home Loan Bank ("FHLB") borrowings 385,000 150,000
Subordinated debt 105,804 84,533
2 unchanged sentences
Shareholders' Equity
−Removed: Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 61,909,774 and outstanding 61,476,328 at September 30, 2022, and authorized 120,000,000 , issued 58,909,369 and outstanding 58,504,250 shares at December 31, 2021
−Removed: Other shareholders' equity 1,281,654 1,304,886
+Added: Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 85,093,864 and outstanding 84,609,320 at March 31, 2023, and authorized 120,000,000 , issued 72,099,136 and outstanding 71,617,852 shares at December 31, 2022
+Added: Additional paid-in-capital 1,803,898 1,377,802
+Added: Retained earnings 421,271 423,863
+Added: Treasury stock ( 13,113 ) ( 13,019 )
+Added: 2,220,517 1,795,808
+Added: Accumulated other comprehensive loss, net ( 169,433 ) ( 188,033 )
Total Shareholders' Equity 2,051,084 1,607,775
Total Liabilities and Shareholders' Equity 15,255,408 12,145,762
−Removed: See notes to unaudited condensed consolidated financial statements.
+Added: See notes to unaudited consolidated financial statements.
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(In thousands) 2023 2022
11 unchanged sentences
Deferred income taxes ( 17,952 ) 866
−Removed: Losses on sale of securities — 73
+Added: Gains on sale of securities ( 5 ) —
Gains on sale of loans ( 860 ) ( 2,324 )
2 unchanged sentences
Changes in operating assets and liabilities, net of effects from acquired companies:
−Removed: Net (increase) decrease in other assets ( 6,273 ) 4,899
−Removed: Net increase (decrease) in other liabilities 10,841 ( 14,543 )
+Added: Net decrease in other assets 22,516 15,471
+Added: Net decrease in other liabilities ( 36,297 ) ( 3,001 )
Net cash provided by operating activities $ 13,045 $ 54,534
13 unchanged sentences
Net cash from bank acquisitions 141,674 208,933
−Removed: Purchase of bank owned life insurance — ( 50,000 )
Additions to bank premises and equipment ( 5,812 ) ( 825 )
−Removed: Net cash used in investing activities $ ( 748,667 ) $ ( 129,217 )
−Removed: See notes to unaudited condensed consolidated financial statements.
+Added: Net cash provided by (used in) investing activities $ 192,718 $ ( 178,519 )
+Added: See notes to unaudited consolidated financial statements.
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(In thousands) 2023 2022
1 unchanged sentence
Net increase in deposits $ 208,765 $ 613,899
−Removed: Net decrease in repurchase agreements ( 27,374 ) ( 14,061 )
−Removed: Repayments of FHLB borrowings with original maturities of more than three months — ( 33,000 )
+Added: Net increase (decrease) in repurchase agreements 95,577 ( 643 )
+Added: Net decrease in FHLB borrowings with original maturities of three months or less 40,000 —
+Added: Proceeds from FHLB borrowings with original maturities of more than three months 50,000 —
Stock based employee benefit plans 3,617 3,509
1 unchanged sentence
Net cash provided by financing activities $ 383,540 $ 608,771
−Removed: Net (decrease) increase in cash and cash equivalents ( 519,114 ) 823,607
+Added: Net increase in cash and cash equivalents 589,303 484,786
Cash and cash equivalents at beginning of period 201,940 737,729
6 unchanged sentences
Supplemental disclosure of non-cash investing activities:
−Removed: Transfer of debt securities from available-for-sale to held-to-maturity $ — $ 210,805
−Removed: Unsettled purchases of debt securities available-for-sale — 8,064
Transfers from bank premises to other real estate owned 5,455 1,008
−Removed: See notes to unaudited condensed consolidated financial statements.
+Added: 1 See "Note 11 - Business Combinations" for common stock issued in business combinations.
+Added: See notes to unaudited consolidated financial statements.
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
6 unchanged sentences
(In thousands) Shares Amount Total
−Removed: Balance at June 30, 2022 61,410 $ 6,141 $ 1,065,167 $ 393,431 $ ( 11,632 ) $ ( 123,532 ) $ 1,329,575
−Removed: Comprehensive income (loss) — — — 29,237 — ( 63,682 ) ( 34,445 )
−Removed: Stock based compensation expense 21 — 2,504 — — — 2,504
−Removed: Common stock transactions related to stock based employee benefit plans 7 3 ( 33 ) — 93 — 63
−Removed: Common stock issued for stock options 38 4 603 — — — 607
−Removed: Dividends on common stock ($ 0.17 per share)
−Removed: — — — ( 10,502 ) — — ( 10,502 )
−Removed: Three months ended September 30, 2022 66 7 3,074 18,735 93 ( 63,682 ) ( 71,015 )
−Removed: Balance at September 30, 2022 61,476 $ 6,148 $ 1,068,241 $ 412,166 $ ( 11,539 ) $ ( 187,214 ) $ 1,287,802
−Removed: Comprehensive
−Removed: Income (Loss)
−Removed: Common Stock Paid-in
−Removed: Capital Retained
−Removed: Earnings Treasury
−Removed: (In thousands) Shares Amount Total
−Removed: Balance at June 30, 2021
−Removed: 55,436 $ 5,544 $ 862,598 $ 314,584 $ ( 10,180 ) $ 9,801 $ 1,182,347
−Removed: Comprehensive income — — — 22,944 — ( 4,532 ) 18,412
−Removed: Stock based compensation expense 23 — 2,358 — — — 2,358
−Removed: Common stock transactions related to stock based employee benefit plans 25 5 ( 22 ) — 34 — 17
−Removed: Common stock issued for stock options 178 17 2,885 — — — 2,902
−Removed: Issuance of common stock, pursuant to acquisition 2,687 269 86,218 — — — 86,487
−Removed: Conversion of options, pursuant to acquisition — — 5,607 — — — 5,607
−Removed: Dividends on common stock ($ 0.13 per share)
−Removed: — — — ( 7,610 ) — — ( 7,610 )
−Removed: Three months ended September 30, 2021
−Removed: 2,913 291 97,046 15,334 34 ( 4,532 ) 108,173
−Removed: Balance at September 30, 2021
−Removed: 58,349 $ 5,835 $ 959,644 $ 329,918 $ ( 10,146 ) $ 5,269 $ 1,290,520
−Removed: Comprehensive
−Removed: Income (Loss)
−Removed: Common Stock Paid-in
−Removed: Capital Retained
−Removed: Earnings Treasury
−Removed: (In thousands) Shares Amount Total
Balance at December 31, 2022
8 unchanged sentences
— — — ( 14,419 ) — — ( 14,419 )
−Removed: Nine months ended September 30, 2022
+Added: Three months ended March 31, 2023
12,991 1,299 426,096 ( 2,592 ) ( 94 ) 18,600 443,309
−Removed: Balance at September 30, 2022
+Added: Balance at March 31, 2023
84,609 $ 8,461 $ 1,803,898 $ 421,271 $ ( 13,113 ) $ ( 169,433 ) $ 2,051,084
6 unchanged sentences
Balance at December 31, 2021
+Added: 58,504 $ 5,850 $ 963,851 $ 358,598 $ ( 10,569 ) $ ( 6,994 ) $ 1,310,736
Comprehensive income (loss) — — — 20,588 — ( 66,040 ) ( 45,452 )
2 unchanged sentences
Common stock issued for stock options 178 18 3,385 — — — 3,403
−Removed: Issuance of common stock, pursuant to acquisition 2,687 269 86,218 — — — 86,487
−Removed: Conversion of options, pursuant to acquisition — — 5,607 — — — 5,607
+Added: Issuance of common stock, pursuant to acquisitions 2,550 255 89,979 — — — 90,234
+Added: Conversion of options, pursuant to acquisitions — — 3,833 — — — 3,833
Dividends on common stock ($ 0.13 per share)
— — — ( 7,994 ) — — ( 7,994 )
−Removed: Nine months ended September 30, 2021
+Added: Three months ended March 31, 2022
2,735 274 98,611 12,594 110 ( 66,040 ) 45,549
−Removed: Balance at September 30, 2021
+Added: Balance at March 31, 2022
61,239 $ 6,124 $ 1,062,462 $ 371,192 $ ( 10,459 ) $ ( 73,034 ) $ 1,356,285
−Removed: See notes to unaudited condensed consolidated financial statements.
+Added: See notes to unaudited consolidated financial statements.
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 – Basis of Presentation
Basis of Presentation:
−Removed: The accompanying unaudited condensed consolidated financial statements of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) have been prepared in accordance with U.S.
+Added: The accompanying unaudited consolidated financial statements of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) have been prepared in accordance with U.S.
generally accepted accounting principles (“U.S.
4 unchanged sentences
Certain prior period amounts have been reclassified to conform to the current period presentation.
−Removed: Operating results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other period.
+Added: Operating results for the three months ended March 31, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any other period.
For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Use of Estimates:
−Removed: The preparation of these condensed consolidated financial statements requires management to make judgments in the application of certain accounting policies that involve significant estimates and assumptions.
+Added: The preparation of these consolidated financial statements requires management to make judgments in the application of certain accounting policies that involve significant estimates and assumptions.
The Company has established policies and control procedures that are intended to ensure valuation methods are well controlled and applied consistently from period to period.
1 unchanged sentence
Specific areas, among others, requiring the application of management’s estimates include determination of the allowance for credit losses, acquisition accounting and purchased loans, intangible assets and impairment testing, other fair value measurements and contingent liabilities.
−Removed: Recently Issued Accounting Standards, Not Yet Adopted
−Removed: In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures .
+Added: Adoption of New Accounting Pronouncement
+Added: On January 1, 2023, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2022-02, “Troubled Debt Restructurings and Vintage Disclosures”.
ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (“TDRs”) in ASC 310-40, Receivables – Troubled Debt Restructurings by Creditors, and introduces new disclosures related to modifications with borrowers that are experiencing financial difficulties.
ASU 2022-02 also requires the disclosure of current-period gross write-offs by year of origination for financing receivables held at amortized cost.
−Removed: The amendments in ASU 2022-02 are effective for fiscal years beginning after December 15, 2022, and early adoption is permitted.
−Removed: The impact to the Company’s consolidated financial statements of the adoption of ASU 2022-02 is not expected to be material.
+Added: Upon adoption, the Company eliminated the separate allowance for credit loss estimation process for loans classified as TDRs.
+Added: The adoption did not have a material impact to the consolidated financial statements.
+Added: For additional information on the loans modified for borrowers in financial difficulty and for the disclosure of current-period gross write-offs by year of origination, see “Note 4 – Loans”.
Note 2 – Earnings per Share
Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period.
−Removed: For the three and nine months ended September 30, 2022, 1,505 options to purchase shares of the Company’s common stock were anti-dilutive.
−Removed: For the three and nine months ended September 30, 2021, no options to purchase shares of the Company's common stock were anti-dilutive.
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: For the three months ended March 31, 2023, 161,251 options to purchase shares of the Company’s common stock were anti-dilutive.
+Added: For the three months ended March 31, 2022, no options to purchase shares of the Company's common stock were anti-dilutive.
+Added: Three Months Ended March 31,
(Dollars in thousands, except per share data) 2023 2022
12 unchanged sentences
Note 3 – Securities
−Removed: The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale and held-to-maturity at September 30, 2022 and December 31, 2021 are summarized as follows:
−Removed: September 30, 2022
+Added: The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale and held-to-maturity at March 31, 2023 and December 31, 2022 are summarized as follows:
+Added: March 31, 2023
(In thousands) Amortized
Gains Gross Unrealized
−Removed: Debt securities available-for-sale
+Added: Available-for-Sale Debt Securities
Treasury securities and obligations of U.S.
5 unchanged sentences
Obligations of state and political subdivisions 22,016 38 ( 1,383 ) 20,671
+Added: Other debt securities 28,799 184 ( 410 ) 28,573
Totals $ 2,239,127 $ 1,595 $ ( 224,755 ) $ 2,015,967
−Removed: Debt securities held-to-maturity
+Added: Held-to-Maturity Debt Securities
Mortgage-backed securities and collateralized mortgage obligations of U.S.
5 unchanged sentences
Gains Gross Unrealized
−Removed: Debt securities available-for-sale
+Added: Available-for-Sale Debt Securities
Treasury securities and obligations of U.S.
5 unchanged sentences
Obligations of state and political subdivisions 29,350 122 ( 1,731 ) 27,741
+Added: Other debt securities 22,640 197 ( 427 ) 22,410
Totals $ 2,119,303 $ 1,101 $ ( 248,662 ) $ 1,871,742
−Removed: Debt securities held-to-maturity
−Removed: Mortgage-backed securities of U.S.
+Added: Held-to-Maturity Debt Securities
+Added: Mortgage-backed securities and collateralized mortgage obligations of U.S.
government-sponsored entities $ 747,408 $ 64 $ ( 129,731 ) $ 617,741
Totals $ 747,408 $ 64 $ ( 129,731 ) $ 617,741
−Removed: During the first quarter of 2022, securities with a fair value of $ 26.0 million obtained in the acquisition of Business Bank of Florida Corp.
−Removed: were immediately sold.
+Added: During the three months ended March 31, 2023, debt securities with a fair value of $ 22.1 million obtained in the acquisition of Professional Holding Corp.
+Added: (“Professional”) were sold.
No gain or loss was recognized on the sale.
−Removed: There were no other sales of securities during the three and nine months ended September 30, 2022.
−Removed: Proceeds from the sales of securities for the three and nine months ended September 30, 2021 were $ 1.0 million, and $ 57.2 million, respectively, resulting in gross gains of $ 0.2 million and gross losses of $ 0.3 million.
−Removed: Also included in “Securities losses, net” are decreases of $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2022, respectively, and decreases of $ 30 thousand and $ 0.1 million for the three and nine months ended September 30, 2021, respectively, in the value of an investment in shares of a mutual fund that invests in CRA-qualified debt securities.
−Removed: During the first quarter of 2021, the Company reclassified debt securities with an amortized cost of $ 210.8 million from available-for-sale to held-to-maturity, as it has the ability and intent to hold these securities to maturity.
−Removed: These securities had net unrealized gains of $ 0.8 million at the date of transfer, which will continue to be reported in accumulated other comprehensive income, and will be amortized over the remaining life of the securities as an adjustment of yield.
−Removed: The effect on interest income of the amortization of net unrealized gains is offset by the amortization of the premium on the securities transferred.
−Removed: At September 30, 2022, debt securities with a fair value of $ 387.8 million were pledged primarily as collateral for public deposits and secured borrowings.
−Removed: The amortized cost and fair value of securities at September 30, 2022, by contractual maturity, are shown below.
+Added: There were $ 8.4 million in other sales of securities during the three months ended March 31, 2023, with gross gains of $ 24 thousand and gross losses of $ 19 thousand.
+Added: Also included in “Securities gains (losses), net” is an increase of $ 0.1 million and a decrease of $ 0.5 million for the three months ended March 31, 2023 and 2022, respectively, in the value of an investment in shares of a mutual fund that invests in CRA-qualified debt securities.
+Added: At March 31, 2023, debt securities with a fair value of $ 2.0 billion were pledged primarily as collateral for public deposits and secured borrowings.
+Added: The amortized cost and fair value of securities at March 31, 2023, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties.
Securities not due at a single maturity date are shown separately.
−Removed: September 30, 2022
+Added: March 31, 2023
Held-to-Maturity Available-for-Sale
10 unchanged sentences
Collateralized loan obligations — — 312,086 305,477
+Added: Other debt securities — — 28,799 28,573
Totals $ 737,911 $ 618,776 $ 2,239,127 $ 2,015,967
1 unchanged sentence
The tables below indicate the fair value of available-for-sale debt securities with unrealized losses for which no allowance for credit losses has been recorded.
−Removed: September 30, 2022
+Added: March 31, 2023
Less Than 12 Months 12 Months or Longer Total
10 unchanged sentences
Obligations of state and political subdivisions 10,417 ( 128 ) 5,551 ( 1,255 ) 15,968 ( 1,383 )
+Added: Other debt securities 18,058 ( 410 ) — — 18,058 ( 410 )
Totals $ 695,385 $ ( 29,789 ) $ 1,218,194 $ ( 194,966 ) $ 1,913,579 $ ( 224,755 )
12 unchanged sentences
Obligations of state and political subdivisions 23,804 ( 1,656 ) 425 ( 75 ) 24,229 ( 1,731 )
+Added: Other debt securities 11,459 ( 427 ) — — 11,459 ( 427 )
Totals $ 1,058,560 $ ( 73,965 ) $ 753,962 $ ( 174,697 ) $ 1,812,522 $ ( 248,662 )
−Removed: At September 30, 2022, the Company had unrealized losses of $ 220.1 million on mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities having a fair value of $ 1.3 billion.
+Added: At March 31, 2023, the Company had unrealized losses of $ 203.7 million on mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities having a fair value of $ 1.4 billion.
These securities are either explicitly or implicitly guaranteed by the U.S.
2 unchanged sentences
Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.
−Removed: Therefore, at September 30, 2022, no allowance for credit losses has been recorded.
−Removed: At September 30, 2022, the Company had $ 12.1 million of unrealized losses in floating rate collateralized loan obligations (“CLOs”) having a fair value of $ 302.1 million.
+Added: Therefore, at March 31, 2023, no allowance for credit losses has been recorded.
+Added: At March 31, 2023, the Company had $ 12.4 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 134.9 million.
+Added: The securities have weighted average credit support of 22 %.
+Added: Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.
+Added: Therefore, at March 31, 2023, no allowance for credit losses has been recorded.
+Added: At March 31, 2023, the Company had $ 6.6 million of unrealized losses in floating rate collateralized loan obligations (“CLOs”) having a fair value of $ 305.5 million.
CLOs are special purpose vehicles and those in which the Company has invested acquire nearly all first-lien, broadly syndicated corporate loans across a diversified band of industries while providing support to senior tranche investors.
−Removed: As of September 30, 2022, all positions held by the Company are in AAA and AA tranches, with average credit support of 37 % and 36 %, respectively.
+Added: As of March 31, 2023, all positions held by the Company are in AAA and AA tranches, with weighted average credit support of 36 % and 25 %, respectively.
The Company evaluates the securities for potential credit losses by modeling expected loan-level defaults, recoveries, and prepayments for each CLO security.
Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.
−Removed: Therefore, at September 30, 2022, no allowance for credit losses has been recorded.
−Removed: At September 30, 2022, the Company had $ 11.8 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 170.7 million.
−Removed: The collateral underlying these mortgage investments is primarily residential real estate.
−Removed: The securities have average credit support of 20 %.
−Removed: Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.
−Removed: Therefore, at September 30, 2022, no allowance for credit losses has been recorded.
−Removed: At September 30, 2022, the Company had $ 2.3 million of unrealized losses on municipal securities having a fair value of $ 23.5 million.
+Added: Therefore, at March 31, 2023, no allowance for credit losses has been recorded.
+Added: At March 31, 2023, the Company had $ 1.4 million of unrealized losses on municipal securities having a fair value of $ 16.0 million.
These securities are highly rated issuances of state or local municipalities, all of which are continuing to make timely contractual payments.
Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.
−Removed: As a result, as of September 30, 2022, no allowance for credit losses has been recorded.
+Added: As a result, as of March 31, 2023, no allowance for credit losses has been recorded.
+Added: At March 31, 2023, the Company had $ 0.3 million of unrealized losses on floating rate student loan asset-backed securities having a fair value of $ 10.8 million.
+Added: These securities were issued under the U.S.
+Added: Department of Education’s Federal Family Education Loan program, which generally provides a minimum of 97% U.S.
+Added: Department of Education guarantee of principal.
+Added: These securities also have added credit enhancement through over-collateralization and have average credit support of 9%.
+Added: Based on the assessment of all relevant factors, the Company believes any unrealized loss positions are a function of changes in investment spreads and interest rate movement and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.
+Added: Therefore, at March 31, 2023, no allowance for credit losses has been recorded.
All held-to-maturity (“HTM”) debt securities are issued by government-sponsored entities, which are either explicitly or implicitly guaranteed by the U.S.
1 unchanged sentence
While the potential for default on these securities may be something greater than zero, the long history with no credit losses, the implied government guarantee of principal and interest payments and the high credit rating of the HTM portfolio provide sufficient basis for the current expectation that there is no risk of loss if default were to occur.
−Removed: As a result, as of September 30, 2022, no allowance for credit losses has been recorded.
−Removed: Included in Other Assets at September 30, 2022 is $ 38.2 million of Federal Home Loan Bank and Federal Reserve Bank stock stated at par value.
+Added: As a result, as of March 31, 2023, no allowance for credit losses has been recorded.
+Added: The Company has the intent and ability to hold these securities until maturity.
+Added: Included in Other Assets at March 31, 2023 is $ 78.9 million of Federal Home Loan Bank and Federal Reserve Bank stock stated at par value.
The Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these cost method investment securities.
−Removed: Accrued interest receivable on available-for-sale (“AFS”) securities and HTM debt securities of $ 5.8 million and $ 1.3 million, respectively, at September 30, 2022, and $ 3.4 million and $ 1.0 million, respectively, at December 31, 2021, is included in Other Assets.
−Removed: Also included in Other Assets is an $ 8.2 million investment in a CRA-qualified mutual fund carried at fair value.
+Added: Accrued interest receivable on available-for-sale (“AFS”) and HTM debt securities of $ 7.8 million and $ 1.3 million, respectively, at March 31, 2023, and $ 7.0 million and $ 1.3 million, respectively, at December 31, 2022, is included in Other Assets.
+Added: Also included in Other Assets are investments in CRA-qualified mutual funds carried at fair value of $ 13.7 million and $ 8.2 million at March 31, 2023 and December 31, 2022, respectively.
The Company holds 11,330 shares of Visa Class B stock, which, following resolution of Visa litigation, will be converted to Visa Class A shares.
−Removed: Under the current conversion ratio that became effective June 29, 2022, the Company would receive 1.6059 shares of Class A stock for each share of Class B stock for a total of 18,194 shares of Visa Class A stock.
+Added: Under the current conversion ratio that became effective December 29, 2022, the Company would receive 1.5991 shares of Class A stock for each share of Class B stock for a total of 18,117 shares of Visa Class A stock.
The ownership of Visa stock is related to prior ownership in Visa's network while Visa operated as a cooperative, and is recorded on the Company's financial records at a zero basis.
20 unchanged sentences
The segment includes both installment loans and lines of credit which may be collateralized or non-collateralized.
−Removed: • Paycheck Protection Program (“PPP”):
−Removed: Loans originated under a temporary program established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and extended by the Economic Aid Act.
−Removed: Under the terms of the program, balances may be forgiven if the borrower uses the funds in a manner consistent with the program guidelines, and repayment is guaranteed by the U.S.
−Removed: In the third quarter of 2022, to align with the Company’s transition of the calculation of expected credit losses to a new modeling tool, $ 100 million in loans to commercial borrowers collateralized by residential properties were reclassified from “Residential real estate” to “Commercial real estate - non owner-occupied.”
The following tables present net loan balances by segment as of:
−Removed: September 30, 2022
+Added: March 31, 2023
(In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total
5 unchanged sentences
Consumer 169,088 128,865 3,787 301,740
−Removed: Paycheck Protection Program 1,616 3,678 — 5,294
+Added: PPP Loans 1,101 4,298 — 5,399
Totals $ 6,048,453 $ 3,780,684 $ 305,258 $ 10,134,395
7 unchanged sentences
Consumer 177,338 89,458 19,791 286,587
−Removed: Paycheck Protection Program 69,503 21,604 — 91,107
+Added: PPP Loans 1,474 3,116 — 4,590
Totals $ 5,944,193 $ 1,965,749 $ 234,782 $ 8,144,724
−Removed: The amortized cost basis of loans at September 30, 2022 included net deferred costs of $ 30.1 million.
−Removed: At December 31, 2021, the amortized cost basis included net deferred costs of $ 31.0 million on non-PPP portfolio loans and net deferred fees of $ 2.4 million on PPP loans.
−Removed: At September 30, 2022, the remaining fair value adjustments on acquired loans were $ 19.1 million, or 1.8 % of the outstanding acquired loan balances, compared to $ 23.1 million, or 2.3 % of the acquired loan balances at December 31, 2021.
+Added: The amortized cost basis of loans at March 31, 2023 included net deferred costs of $ 35.7 million.
+Added: At December 31, 2022, the amortized cost basis included net deferred costs of $ 35.1 million.
+Added: At March 31, 2023, the remaining fair value adjustments on acquired loans were $ 216.0 million, or 5.0 % of the outstanding acquired loan balances, compared to $ 97.7 million, or 4.3 % of the acquired loan balances at December 31, 2022.
The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis.
−Removed: Accrued interest receivable is included within Other Assets and was $ 17.6 million and $ 14.7 million at September 30, 2022 and December 31, 2021, respectively.
−Removed: The following tables present the status of net loan balances as of September 30, 2022 and December 31, 2021.
−Removed: September 30, 2022
+Added: Accrued interest receivable is included within Other Assets and was $ 34.4 million and $ 28.2 million at March 31, 2023 and December 31, 2022, respectively.
+Added: The following tables present the status of net loan balances as of March 31, 2023 and December 31, 2022.
+Added: March 31, 2023
(In thousands) Current Accruing
9 unchanged sentences
Consumer 168,106 743 50 — 189 169,088
−Removed: Paycheck Protection Program 1
−Removed: 1,315 29 272 — — 1,616
+Added: PPP Loans 1,018 — — 83 — 1,101
Total Portfolio Loans $ 6,011,834 $ 6,253 $ 540 $ 83 $ 29,743 $ 6,048,453
6 unchanged sentences
Consumer 122,844 4,374 781 866 — 128,865
−Removed: Paycheck Protection Program 1
−Removed: 3,671 — 7 — — 3,678
+Added: PPP Loans 4,277 — 21 — — 4,298
Total Acquired Non-PCD Loans $ 3,766,746 $ 6,814 $ 1,038 $ 866 $ 5,220 $ 3,780,684
7 unchanged sentences
Total Loans $ 10,065,607 $ 14,343 $ 2,709 $ 949 $ 50,787 $ 10,134,395
−Removed: 1 Paycheck Protection Program loans are not reflected as past due when forgiveness applications are being processed by the SBA.
−Removed: Repayment of principal and interest is fully guaranteed by the U.S.
December 31, 2022
10 unchanged sentences
Consumer 176,444 550 252 1 91 177,338
−Removed: Paycheck Protection Program 1
−Removed: 69,434 — — 69 — 69,503
+Added: PPP Loans 1,099 33 — 342 — 1,474
Total Portfolio Loans $ 5,924,031 $ 2,787 $ 942 $ 783 $ 15,650 $ 5,944,193
6 unchanged sentences
Consumer 87,317 779 616 525 221 89,458
−Removed: Paycheck Protection Program 1
−Removed: 21,567 — — 37 — 21,604
+Added: PPP Loans 3,116 — — — — 3,116
Total Acquired Non-PCD Loans $ 1,958,490 $ 3,104 $ 1,000 $ 525 $ 2,630 $ 1,965,749
7 unchanged sentences
Total Loans $ 8,104,803 $ 6,929 $ 2,301 $ 1,848 $ 28,843 $ 8,144,724
−Removed: 1 Paycheck Protection Program loans are not reflected as past due when forgiveness applications are being processed by the SBA.
−Removed: Repayment of principal and interest is fully guaranteed by the U.S.
All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.
1 unchanged sentence
Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured.
−Removed: The Company recognized $ 0.2 million and $ 0.3 million in interest income on nonaccrual loans during each of the three months ended September 30, 2022 and 2021, respectively.
−Removed: The Company recognized $ 1.4 million and $ 0.9 million in interest income on nonaccrual loans during the nine months ended September 30, 2022 and 2021, respectively.
+Added: The Company recognized $ 0.1 million and $ 0.8 million in interest income on nonaccrual loans during each of the three months ended March 31, 2023 and 2022, respectively.
The following tables present net balances of loans on nonaccrual status and the related allowance for credit losses, if any, as of:
−Removed: September 30, 2022
+Added: March 31, 2023
(In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans Allowance for Credit Losses
18 unchanged sentences
The following table presents collateral-dependent loans as of:
−Removed: (In thousands) September 30, 2022 December 31, 2021
+Added: (In thousands) March 31, 2023 December 31, 2022
Construction and land development $ 6 $ 59
14 unchanged sentences
• Substandard Impaired:
−Removed: Loans typically placed on nonaccrual and considered to be collateral-dependent or accruing TDRs.
+Added: Loans typically placed on nonaccrual and considered to be collateral-dependent.
Loans that have all the weaknesses inherent in those classified Substandard with the added characteristic that the weakness present makes collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
1 unchanged sentence
The following tables present the risk rating of loans by year of origination as of:
−Removed: September 30, 2022
+Added: March 31, 2023
(In thousands) 2023 2022 2021 2020 2019 Prior Revolving Total
7 unchanged sentences
Total $ 20,907 $ 324,422 $ 250,918 $ 45,943 $ 37,444 $ 72,766 $ 5,435 $ 757,835
+Added: Gross Charge Offs $ — $ — $ — $ — $ — $ — $ — $ —
Commercial real estate - owner occupied
6 unchanged sentences
Total $ 24,300 $ 272,862 $ 316,822 $ 184,524 $ 203,713 $ 650,200 $ 70 $ 1,652,491
+Added: Gross Charge Offs $ — $ — $ — $ — $ — $ — $ — $ —
Commercial real estate - non-owner occupied
6 unchanged sentences
Total $ 86,801 $ 861,624 $ 675,212 $ 363,128 $ 436,881 $ 988,260 $ 145 $ 3,412,051
+Added: Gross Charge Offs $ — $ — $ — $ 109 $ — $ — $ — $ 109
Residential real estate
3 unchanged sentences
Substandard — — — — — — — $ —
+Added: March 31, 2023
+Added: (In thousands) 2023 2022 2021 2020 2019 Prior Revolving Total
Substandard Impaired — 75 566 155 612 8,418 68 $ 9,894
1 unchanged sentence
Total $ 66,554 $ 561,449 $ 734,453 $ 231,255 $ 152,989 $ 572,968 $ 34,726 $ 2,354,394
−Removed: September 30, 2022
−Removed: (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Total
+Added: Gross Charge Offs $ — $ — $ — $ — $ — $ 159 $ — $ 159
Commercial and financial
6 unchanged sentences
Total $ 58,767 $ 489,767 $ 493,258 $ 183,686 $ 115,348 $ 295,862 $ 13,797 $ 1,650,485
+Added: Gross Charge Offs $ — $ — $ 56 $ 1,334 $ 204 $ 848 $ 200 $ 2,642
Risk Ratings:
5 unchanged sentences
Total $ 9,269 $ 101,026 $ 91,814 $ 28,856 $ 34,956 $ 32,377 $ 3,442 $ 301,740
+Added: Gross Charge Offs $ — $ 39 $ 395 $ 213 $ 18 $ — $ 30 $ 695
Paycheck Protection Program
1 unchanged sentence
Pass $ — $ — $ 2,661 $ 2,655 $ — $ — $ — $ 5,316
+Added: Substandard — — 14 69 — — — $ 83
+Added: Substandard Impaired — — — — — — — —
Total $ — $ — $ 2,675 $ 2,724 $ — $ — $ — $ 5,399
+Added: Gross Charge Offs $ — $ — $ — $ — $ — $ — $ — $ —
Risk Ratings:
5 unchanged sentences
Total $ 266,598 $ 2,611,150 $ 2,565,152 $ 1,040,116 $ 981,331 $ 2,612,433 $ 57,615 $ 10,134,395
+Added: Gross Charge Offs $ — $ 39 $ 451 $ 1,656 $ 222 $ 1,007 $ 230 $ 3,605
December 31, 2022
10 unchanged sentences
Risk Ratings:
+Added: December 31, 2022
+Added: (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Total
Pass $ 215,453 $ 251,638 $ 180,081 $ 185,286 $ 121,568 $ 467,963 $ 32,253 $ 1,454,242
4 unchanged sentences
Total $ 216,147 $ 251,638 $ 183,111 $ 192,625 $ 124,983 $ 477,545 $ 32,253 $ 1,478,302
−Removed: December 31, 2021
−Removed: (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Total
Commercial real estate - non-owner occupied
32 unchanged sentences
Pass $ — $ 2,708 $ 1,882 $ — $ — $ — $ — $ 4,590
+Added: Substandard $ — $ — $ — $ — $ — $ — $ — $ —
+Added: Substandard Impaired $ — $ — $ — $ — $ — $ — $ — $ —
Total $ — $ 2,708 $ 1,882 $ — $ — $ — $ — $ 4,590
5 unchanged sentences
Doubtful — — — — — — — —
+Added: December 31, 2022
+Added: (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Total
Total $ 1,771,386 $ 1,972,420 $ 750,817 $ 749,534 $ 545,447 $ 1,469,313 $ 883,925 $ 8,144,724
−Removed: Troubled Debt Restructured Loans
−Removed: The Company’s TDR concessions granted to certain borrowers generally do not include forgiveness of principal balances, but may include interest rate reductions, an extension of the amortization period and/or converting the loan to interest only for a limited period of time.
−Removed: Loan modifications are not reported in calendar years after modification if the loans were modified at an interest rate equal to the yields of new loan originations with comparable risk and the loans are performing based on the terms of the restructuring agreements.
−Removed: The following table presents loans that were modified in a troubled debt restructuring during the three and nine months ended September 30, 2022 and September 30, 2021:
−Removed: Three Months Ended September 30,
−Removed: (In thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment
−Removed: Construction and land development $ — $ — $ — $ — $ — $ —
−Removed: Commercial real estate - owner-occupied — — — — — —
−Removed: Commercial real estate - non owner-occupied — — — — — —
−Removed: Residential real estate — — — 1 152 152
−Removed: Commercial and financial — — — — — —
−Removed: Consumer — — — — — —
−Removed: Totals $ — $ — $ — $ 1 $ 152 $ 152
−Removed: Nine Months Ended September 30,
−Removed: (In thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment
−Removed: Construction and land development $ — $ — $ — $ — $ — $ —
−Removed: Commercial real estate - owner-occupied — — — — — —
−Removed: Commercial real estate - non owner-occupied — — — — — —
−Removed: Residential real estate 3 785 785 4 231 231
−Removed: Commercial and financial 2 54 54 1 142 142
−Removed: Consumer 4 23 23 — — —
−Removed: Totals $ 9 $ 862 $ 862 $ 5 $ 373 $ 373
−Removed: The TDRs described above resulted in a specific allowance for credit losses of $ 0.1 million and $ 0.2 million as of September 30, 2022 and September 30, 2021, respectively.
−Removed: During the nine months ended September 30, 2022, there was one default totaling $ 2 thousand on a loan that had been modified to a TDR within the preceding twelve months.
−Removed: During the nine months ended September 30, 2021, there were two defaults on loans totaling $ 0.1 million that had been modified to a TDR within the preceding twelve months.
−Removed: The Company considers a loan to have defaulted when it becomes 90 days or more delinquent under the modified terms, has been transferred to nonaccrual status, is charged off or has been transferred to other real estate owned.
−Removed: For loans measured based on the present value of expected future cash flows, $ 13 thousand and $ 9 thousand for the three months ended September 30, 2022, and 2021, respectively, and $ 33 thousand and $ 20 thousand for the nine months ended September 30, 2022, and 2021, respectively, was included in interest income and represents the change in present value attributable to the passage of time.
+Added: Troubled Borrower Modifications
+Added: On January 1, 2023, the Company adopted ASU 2022-02 which includes disclosure requirements related to certain modifications of loans to borrowers experiencing financial difficulty, which the Company refers to as troubled borrower modifications (“TBMs”).
+Added: TBMs are typically in the form of an interest rate reduction, an extension of the amortization period and/or converting the loan to interest only for a limited period of time.
+Added: In addition to the change in payment terms, the Company seeks to obtain additional collateral and/or guarantors to provide additional support for the loan.
+Added: The Company does not typically provide forgiveness of principal as a modification.
+Added: During the three months ended March 31, 2023, there was one loan totaling $ 29 thousand that was a TBM, which is considered immaterial.
+Added: To the extent there are additional modifications in subsequent periods, the Company will disclose additional information about the nature of the modifications, the financial effect of the modifications and payment defaults of TBMs in the 12 months prior to default, among any other relevant disclosures.
Note 5 – Allowance for Credit Losses
Activity in the allowance for credit losses is summarized as follows:
−Removed: Three Months Ended September 30, 2022
−Removed: (In thousands) Beginning
−Removed: Balance Provision
−Removed: Losses Charge-
−Removed: Offs Recoveries TDR
−Removed: Adjustments Ending
−Removed: Construction and land development $ 2,552 $ 792 $ — $ 1 $ — $ 3,345
−Removed: Commercial real estate - owner-occupied 7,376 ( 2,182 ) — — — 5,194
−Removed: Commercial real estate - non owner-occupied 46,459 ( 6,841 ) ( 179 ) 23 — 39,462
−Removed: Residential real estate 14,821 11,193 — 31 ( 8 ) 26,037
−Removed: Commercial and financial 17,144 ( 1,457 ) ( 77 ) 92 ( 1 ) 15,701
−Removed: Consumer 2,417 3,171 ( 152 ) 158 ( 4 ) 5,590
−Removed: Paycheck Protection Program — — — — — —
−Removed: Totals $ 90,769 $ 4,676 $ ( 408 ) $ 305 $ ( 13 ) $ 95,329
−Removed: Three Months Ended September 30, 2021
−Removed: (In thousands) Beginning
−Removed: Balance Initial Allowance on PCD Loans Acquired During the Period Provision
−Removed: Losses Charge-
−Removed: Offs Recoveries TDR
−Removed: Adjustments Ending
−Removed: Construction and land development $ 4,053 $ — $ ( 1,459 ) $ — $ 10 $ ( 1 ) $ 2,603
−Removed: Commercial real estate - owner occupied 8,676 — ( 24 ) — — — 8,652
−Removed: Commercial real estate - non-owner occupied 34,807 1,327 5,278 ( 1,327 ) — — 40,085
−Removed: Residential real estate 12,543 — 1,456 ( 27 ) 158 ( 3 ) 14,127
−Removed: Commercial and financial 18,016 1,719 ( 2 ) ( 535 ) 326 — 19,524
−Removed: Consumer 3,032 — ( 158 ) ( 163 ) 126 ( 5 ) 2,832
−Removed: Paycheck Protection Program — — — — — — —
−Removed: Totals $ 81,127 $ 3,046 $ 5,091 $ ( 2,052 ) $ 620 $ ( 9 ) $ 87,823
−Removed: Nine Months Ended September 30, 2022
+Added: Three Months Ended March 31, 2023
(In thousands) Beginning
1 unchanged sentence
Losses Charge-
−Removed: Offs Recoveries TDR
−Removed: Adjustments Ending
+Added: Offs Recoveries Ending
Construction and land development $ 6,464 $ 5 $ 69 $ — $ 2 $ 6,540
4 unchanged sentences
Consumer 12,869 161 5,401 ( 695 ) 10 17,746
−Removed: Paycheck Protection Program — — — — — — —
Totals $ 113,895 $ 13,335 $ 31,598 $ ( 3,605 ) $ 417 $ 155,640
−Removed: Nine Months Ended September 30, 2021
+Added: Three Months Ended March 31, 2022
(In thousands) Beginning Balance Allowance on PCD Loans Acquired During the Period Provision for Credit Losses Charge- Offs Recoveries TDR Allowance Adjustments Ending Balance
5 unchanged sentences
Consumer 2,813 — ( 372 ) ( 95 ) 208 ( 2 ) 2,552
−Removed: Paycheck Protection Program — — — — — — —
Totals $ 83,315 $ 51 $ 6,556 $ ( 665 ) $ 586 $ ( 5 ) $ 89,838
1 unchanged sentence
Forecast data is sourced from Moody’s Analytics (“Moody’s”), a firm widely recognized for its research, analysis, and economic forecasts.
−Removed: The forecasts of future economic conditions are over a period that has been deemed reasonable and supportable, and in segments where it can no longer develop reasonable and supportable forecasts, the Company reverts to longer-term historical loss experience to estimate losses over the remaining life of the loans.
−Removed: During the third quarter of 2022, the Company transitioned to a tool that calculates the quantitative portion of expected credit losses using a discounted cash flow methodology for its commercial loans and using a loss rate methodology for its consumer loans.
−Removed: As of September 30, 2022, the Company utilized a blend of Moody’s most recent “U.S.
+Added: The forecasts of future economic conditions are over a period that has been deemed reasonable and supportable, and in segments where it can no longer develop
+Added: reasonable and supportable forecasts, the Company reverts to longer-term historical loss experience to estimate losses over the remaining life of the loans.
+Added: As of March 31, 2023 and December 31, 2022, the Company utilized a blend of Moody’s most recent “U.S.
Macroeconomic Outlook Baseline” and “Alternative Scenario 3 - Downside - 90th Percentile” scenarios and considered the uncertainty associated with the assumptions in both scenarios, including continued actions taken by the Federal Reserve with regard to monetary policy and interest rates and the potential impact of those actions, the ongoing Russia-Ukraine conflict and the magnitude of the resulting market disruption, the potential impact of persistent high inflation on economic growth and expectations around a recession occurring over the next 12 to 24 months.
−Removed: Furthermore, the Company considered the impact that Hurricane Ian may have on future losses, and as a result increased the allowance by $ 2.1 million.
Outcomes in any or all of these factors could differ from the scenarios identified above, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk not captured in the quantitative model.
−Removed: The following section discusses changes in the level of the allowance for credit losses for the three months ended September 30, 2022.
−Removed: In the Construction and Land Development segment, the increase in reserves reflects higher loan balances as well as a more negative economic outlook.
+Added: The following section discusses changes in the level of the allowance for credit losses for the three months ended March 31, 2023.
+Added: The acquisition of Professional on January 31, 2023, added approximately $ 2.0 billion in loans, contributing to the increase in allowance in each segment.
+Added: In the Construction and Land Development segment, the increase in the allowance is attributed to higher loan balances.
In this segment, the primary source of repayment is typically from proceeds of the sale, refinancing, or permanent financing of the underlying property;
−Removed: therefore, collateral type and estimated collateral values are among the relevant factors in assessing expected losses.
−Removed: In the Commercial Real Estate - Owner-Occupied segment, the decrease in the allowance is primarily attributed to the transition to a discounted cash flow approach which, while continuing to consider relevant macroeconomic forecast variables, also considers loan-specific available collateral.
−Removed: In the Commercial Real Estate - Non Owner-Occupied segment, the decrease in reserves reflects the impact of transitioning from a portfolio level estimate to a discounted cash flow approach, utilizing macroeconomic variables specific to the loan segment.
+Added: therefore, industry and collateral type and estimated collateral values are among the relevant factors in assessing expected losses.
+Added: In the Commercial Real Estate - Owner-Occupied segment, the increase in the allowance is attributed to higher loan balances.
+Added: Risk characteristics include but are not limited to, collateral type, note structure and loan seasoning.
+Added: In the Commercial Real Estate - Non Owner-Occupied segment, the increase in the allowance is attributed to higher loan balances.
Repayment is often dependent upon rental income from the successful operation of the underlying property.
−Removed: Collateral type, estimated collateral values, loan seasoning, and note structure are among the risk characteristics analyzed for this segment.
+Added: Loan performance may be adversely affected by general economic conditions or conditions specific to the real estate market, including property types.
+Added: Collateral type, note structure and loan seasoning are among the risk characteristics analyzed for this segment.
The Residential Real Estate segment includes first mortgages secured by residential property, and home equity lines of credit.
−Removed: The increase in reserves is due to a deterioration in the economic forecast, including the transition to a loss rate tool for estimating credit losses, utilizing macroeconomic variables specific to the loan segment.
−Removed: Risk characteristics considered for this segment include, but are not limited to, collateral type, note structure, FICO score, location, and loan seasoning.
+Added: The increase in the allowance is due to higher loan balances and the increasing likelihood of economic recession reflected within the forecast.
+Added: Risk characteristics considered for this segment include, but are not limited to, borrower FICO score, lien position, loan to value ratios and loan seasoning.
In the Commercial and Financial segment, borrowers are primarily small to medium sized professional firms and other businesses, and loans are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners.
−Removed: The decrease in reserves is attributed to the transition from a portfolio level estimate to a
−Removed: discounted cash flow tool, utilizing macroeconomic variables specific to the loan segment.
+Added: The increase in reserves is attributed to the acquisition of Commercial and Financial loans from Professional, which includes a reserve for individually evaluated purchased credit deteriorated loans of $ 12.0 million.
Industry, collateral type, estimated collateral values and loan seasoning are among the relevant factors in assessing expected losses.
Consumer loans include installment and revolving lines, loans for automobiles, boats, and other personal or family purposes.
−Removed: Risk characteristics considered for this segment include, but are not limited to, collateral type, loan seasoning and FICO score.
−Removed: The increase in reserves reflects the increasing likelihood of economic recession reflected within the forecast.
−Removed: Balances outstanding under the Paycheck Protection Program are guaranteed by the U.S.
−Removed: government and have not been assigned a reserve.
+Added: Risk characteristics considered for this segment include, but are not limited to, collateral type, loan to value ratios, loan seasoning and FICO score.
+Added: The increase in the allowance reflects the increasing likelihood of economic recession reflected within the forecast, in addition to an increase in loan balances.
The allowance for credit losses is composed of specific allowances for loans individually evaluated and general allowances for loans grouped into loan pools based on similar characteristics, which are collectively evaluated.
−Removed: The Company’s loan portfolio and related allowance at September 30, 2022 and December 31, 2021 is shown in the following tables:
−Removed: September 30, 2022
+Added: The Company’s loan portfolio and related allowance at March 31, 2023 and December 31, 2022 are shown in the following tables:
+Added: March 31, 2023
Individually Evaluated Collectively Evaluated Total
11 unchanged sentences
Consumer 1,254 1,189 300,486 16,557 301,740 17,746
−Removed: Paycheck Protection Program — — 5,294 — 5,294 —
Totals $ 81,516 $ 16,676 $ 10,052,879 $ 138,964 $ 10,134,395 $ 155,640
13 unchanged sentences
Consumer 426 362 286,161 12,507 286,587 12,869
−Removed: Paycheck Protection Program — — 91,107 — 91,107 —
Totals $ 31,514 $ 3,547 $ 8,113,210 $ 110,348 $ 8,144,724 $ 113,895
8 unchanged sentences
No net gains or losses have been recognized to date on these instruments.
−Removed: As of September 30, 2022, the interest rate swaps had an aggregate notional value of $ 302.8 million, with a fair value of $ 24.1 million recorded in other assets and other liabilities.
+Added: As of March 31, 2023, the interest rate swaps had an aggregate notional value of $ 430.4 million, with a fair value of $ 25.2 million recorded in Other Assets and Other Liabilities.
As of December 31, 2022, the interest rate swaps had an aggregate notional value of $ 312.8 million, with a fair value of $ 23.1 million recorded in Other Assets and Other Liabilities.
−Removed: The weighted average maturity was 6.8 years at September 30, 2022 and 6.7 years at December 31, 2021.
+Added: The weighted average maturity was 7.1 years at March 31, 2023 and 6.7 years at December 31, 2022.
Interest Rate Floors Designated as Cash Flow Hedges
4 unchanged sentences
Amortization of the premium paid on cash flow hedges is recognized in earnings over the term of the hedge in the same caption as the hedged item.
−Removed: For the three and nine months ended September 30, 2022, the Company recognized a loss through other comprehensive income of $ 0.1 million and $ 0.3 million, respectively, and reclassified $ 0.1 million and $ 0.3 million, respectively, out of accumulated other comprehensive income and into interest income.
−Removed: As of September 30, 2022 and December 31, 2021, the interest rate floors had a fair value of $ 20 thousand and $ 290 thousand, respectively, recorded in other assets in the consolidated balance sheet.
−Removed: Over the next twelve months, the Company expects to reclassify $ 0.6 million from accumulated other comprehensive income into interest income related to these agreements.
+Added: As of March 31, 2023 and December 31, 2022, the interest
+Added: rate floors had a fair value of $ 6 thousand and $ 2 thousand, respectively, and are recorded in Other Assets in the consolidated balance sheet.
+Added: For the three months ended March 31, 2023, the Company recognized nominal gains through other comprehensive income in the three months ended March 31, 2023 and losses of $ 0.2 million in the prior year quarter, and reclassified $ 0.1 million and $ 0.1 million, respectively, out of accumulated other comprehensive income and into interest income.
+Added: During the next twelve months, the Company expects to reclassify $ 0.4 million from accumulated other comprehensive income into interest income related to these agreements.
(In thousands) Notional Amount Fair Value Balance Sheet Category
−Removed: At September 30, 2022
+Added: At March 31, 2023
Back-to-back swaps $ 430,380 $ 25,241 Other Assets and Other Liabilities
7 unchanged sentences
Company securities pledged were as follows by collateral type and maturity as of:
−Removed: (In thousands) September 30, 2022 December 31, 2021
+Added: (In thousands) March 31, 2023 December 31, 2022
Fair value of pledged securities - overnight and continuous:
2 unchanged sentences
Note 8 – Equity Capital
−Removed: The Company is well capitalized and at September 30, 2022, the Company and the Company’s principal banking subsidiary, Seacoast Bank, exceeded the common equity Tier 1 (CET1) capital ratio regulatory threshold of 6.5 % for well-capitalized institutions under the Basel III standardized transition approach, as well as risk-based and leverage ratio requirements for well capitalized banks under the regulatory framework for prompt corrective action.
+Added: The Company is well-capitalized and at March 31, 2023, the Company and the Company’s principal banking subsidiary, Seacoast Bank, exceeded the common equity Tier 1 (CET1) capital ratio regulatory threshold of 6.5 % for well-capitalized institutions under the Basel III standardized transition approach, as well as risk-based and leverage ratio requirements for well-capitalized banks under the regulatory framework for prompt corrective action.
Note 9 – Contingent Liabilities
2 unchanged sentences
Note 10 – Fair Value
−Removed: Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at September 30, 2022 and December 31, 2021 included:
+Added: Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at March 31, 2023 and December 31, 2022 included:
(In thousands) Fair Value
2 unchanged sentences
(Level 2) Significant
−Removed: At September 30, 2022
+Added: At March 31, 2023
Financial Assets
33 unchanged sentences
4 Fair value is measured on a nonrecurring basis in accordance with ASC Topic 360.
−Removed: 5 An investment in shares of a mutual fund that invests primarily in CRA-qualified debt securities, reported at fair value in Other Assets.
+Added: 5 Investment in shares of mutual funds that invest primarily in CRA-qualified debt securities, reported at fair value in Other Assets.
Recurring fair value basis is determined using market quotations.
23 unchanged sentences
Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment.
−Removed: None of the loans were 90 days or more past due or on nonaccrual as of September 30, 2022 and December 31, 2021.
−Removed: The aggregate fair value and contractual balance of loans held for sale as of September 30, 2022 and December 31, 2021 is as follows:
−Removed: (In thousands) September 30, 2022 December 31, 2021
+Added: None of the loans were 90 days or more past due or on nonaccrual as of March 31, 2023 and December 31, 2022.
+Added: The aggregate fair value and contractual balance of loans held for sale as of March 31, 2023 and December 31, 2022 is as follows:
+Added: (In thousands) March 31, 2023 December 31, 2022
Aggregate fair value $ 2,838 $ 3,151
Contractual balance 2,765 3,071
−Removed: Excess 55 828
−Removed: Loans measured at fair value consist of collateral-dependent real estate loans.
+Added: Loans carried at fair value consist of collateral-dependent real estate loans.
Fair value is based on recent real estate appraisals less estimated costs of sale.
−Removed: These evaluations may use either a single valuation approach or a combination of approaches, such as comparative sales, cost and/or income approach.
+Added: For these loans, evaluations may use either a single valuation approach or a combination of approaches, such as comparative sales, cost and/or income approach.
A significant unobservable input in the income approach is the estimated capitalization rate for a given piece of collateral.
−Removed: At September 30, 2022 capitalization rates utilized to determine fair value of the underlying collateral averaged approximately 6.8 %.
+Added: At March 31, 2023, capitalization rates utilized to determine fair value of the underlying collateral averaged approximately 6.7 %.
Adjustments to comparable sales may be made by an appraiser to reflect local market conditions or other economic factors and may result in changes in the fair value of an asset over time.
−Removed: As such, the fair value of these loans is considered level 3 in the fair value hierarchy.
−Removed: Collateral-dependent loans measured at fair value totaled $ 9.9 million with a specific reserve of $ 3.9 million at September 30, 2022, compared to $ 13.1 million with a specific reserve of $ 4.7 million at December 31, 2021.
+Added: If such adjustments are made, the fair value of these loans is considered Level 3 in the fair value hierarchy.
+Added: Collateral-dependent loans measured at fair value totaled $ 71.9 million with a specific reserve of $ 16.7 million at March 31, 2023, compared to $ 10.2 million with a specific reserve of $ 2.9 million at December 31, 2022.
+Added: For loans classified as Level 3, changes included loan additions of $ 39.1 million offset by $ 1.6 million in paydowns and charge-offs for the three months ended March 31, 2023.
Other real estate owned :
2 unchanged sentences
Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s monthly and/or quarterly valuation process.
−Removed: During the nine months ended September 30, 2022, an updated appraisal was obtained on a former branch property, and the value was transferred from Level 3 to Level 2.
−Removed: There were no transfers during the nine months ended September 30, 2021.
−Removed: The carrying amount and fair value of the Company’s other financial instruments that were not disclosed previously in the balance sheet and for which carrying amount is not fair value as of September 30, 2022 and December 31, 2021 is as follows:
+Added: During the three months ended March 31, 2023, there were no such transfers.
+Added: The carrying amount and fair value of the Company’s other financial instruments that were not disclosed previously in the balance sheet and for which carrying amount is not fair value as of March 31, 2023 and December 31, 2022 is as follows:
(In thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets
1 unchanged sentence
(Level 2) Significant Unobservable Inputs
−Removed: September 30, 2022
+Added: March 31, 2023
Financial Assets
5 unchanged sentences
Deposit liabilities 12,309,701 — — 12,297,399
−Removed: Subordinated debt 71,857 — 69,552 —
+Added: Federal Home Loan Bank (“FHLB”) borrowings 385,000 — — 382,523
+Added: Subordinated debt, net 105,804 — 97,985 —
December 31, 2022
−Removed: Financial Assets
Debt securities held-to-maturity 1
$ 747,408 $ — $ 617,741 $ —
+Added: Time deposits with other banks 3,236 — 2,989 —
Loans, net 8,022,316 — — 7,845,375
1 unchanged sentence
Deposit liabilities 9,981,595 — — 9,976,125
+Added: Federal Home Loan Bank (“FHLB”) borrowings 150,000 — — 149,450
Subordinated debt 84,533 — 82,226 —
−Removed: 1 See “Note 3 – Securities” for further detail of individual investment categories.
+Added: 1 See “Note 3 – Securities” for further detail of recurring fair value basis of individual investment categories.
The short maturity of Seacoast’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value.
Such financial instruments are reported in the following balance sheet captions:
−Removed: cash and due from banks, interest bearing deposits with other banks, FHLB borrowings and securities sold under agreements to repurchase, maturing within 30 days.
−Removed: The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at September 30, 2022 and December 31, 2021:
+Added: cash and due from banks, interest bearing deposits with other banks, short-term FHLB borrowings and securities sold under agreements to repurchase.
+Added: The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at March 31, 2023 and December 31, 2022:
Held-to-maturity debt securities :
12 unchanged sentences
Note 11 – Business Combinations
−Removed: Acquisition of Business Bank of Florida, Corp.
−Removed: On January 3, 2022, the Company completed its acquisition of Business Bank of Florida, Corp., (“BBFC”).
−Removed: Simultaneously, upon completion of the merger of BBFC and the Company, BBFC’s wholly owned subsidiary bank, Florida Business Bank, was merged with and into Seacoast Bank.
−Removed: Prior to the acquisition, Florida Business Bank operated one branch in Melbourne, Florida.
−Removed: As a result of this acquisition, the Company expects to expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results.
−Removed: The Company acquired 100 % of the outstanding common stock of BBFC.
−Removed: Under the terms of the definitive agreement, each share of BBFC common stock was converted into the right to receive 0.7997 of a share of Seacoast common stock.
+Added: Acquisition of Professional Holding Corp.
+Added: On January 31, 2023, the Company completed its acquisition of Professional Holding Corp.
+Added: (“Professional”).
+Added: Simultaneously, upon completion of the merger of Professional and the Company, Professional Bank was merged with and into Seacoast Bank.
+Added: Prior to the acquisition, Professional Bank operated nine branches across South Florida.
+Added: The transaction further expands the Company’s presence in the tri-county South Florida market, which includes Miami-Dade, Broward, and Palm Beach counties, Florida’s largest MSA and the 8 th largest in the nation.
+Added: The Company acquired 100 % of the outstanding common stock of Professional.
+Added: Under the terms of the merger agreement, Professional shareholders received 0.8909 shares of Seacoast common stock for each share of Professional common stock held immediately prior to the merger, and Professional option holders received options to purchase Seacoast common stock, with the number of shares underlying each such option and the applicable exercise price adjusted using the same 0.8909 exchange ratio.
(In thousands, except per share data) January 31, 2023
−Removed: Number of BBFC common shares outstanding 1,112
+Added: Number of Professional common shares outstanding 14,358
Per share exchange ratio 0.8909
−Removed: Number of shares of common stock issued 889
−Removed: Multiplied by common stock price per share on January 3, 2022 $ 35.39
−Removed: Value of common stock issued 31,480
−Removed: Fair value of options converted 497
+Added: Number of shares of SBCF common stock issued 12,792
+Added: Multiplied by common stock price per share at January 31, 2023 $ 32.11
+Added: Value of SBCF common stock issued $ 410,738
+Added: Cash paid for fractional shares 5
+Added: Fair value of Professional options converted 10,304
Total purchase price $ 421,047
−Removed: The acquisition of BBFC was accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations .
+Added: The acquisition of Professional was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations .
The Company recognized goodwill of $ 248.1 million for this acquisition that is nondeductible for tax purposes.
1 unchanged sentence
The fair values initially assigned to assets acquired and liabilities assumed are preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values becomes known.
−Removed: As part of the BBFC acquisition, 52,432 options were granted to replace outstanding BBFC options.
−Removed: These options had a weighted average exercise price of $ 26.63 and were fully vested upon acquisition.
−Removed: In accordance with ASC Topic 805, Business Combinations , the value of the replacement awards associated with pre-combination service, $ 0.5 million, was considered purchase consideration.
−Removed: (In thousands) Initially Measured
−Removed: January 3, 2022
−Removed: Cash $ 38,332
+Added: As part of the acquisition of Professional, options were granted to replace outstanding Professional options.
+Added: These options were fully vested upon acquisition.
+Added: The full value of the replacement options, $ 10.3 million, was associated with pre-combination service and was therefore included in the calculation of the total purchase consideration.
+Added: (In thousands) January 31, 2023
+Added: Cash and cash equivalents $ 141,680
Investment securities 167,059
3 unchanged sentences
Goodwill 248,091
+Added: Other Assets 74,232
Total Assets $ 2,729,209
Deposits $ 2,119,341
+Added: Subordinated debt 21,141
Other Liabilities 167,680
17 unchanged sentences
Total PCD loans acquired $ 129,335
−Removed: The acquisition of BBFC resulted in the addition of $ 1.8 million in allowance for credit losses, including the $ 15 thousand identified in the table above for PCD loans, and $ 1.8 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
+Added: The acquisition of Professional resulted in the addition of $ 39.9 million in allowance for credit losses, including the $ 13.3 million identified in the table above for PCD loans, and $ 26.6 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
The Company believes the deposits assumed in the acquisition have an intangible value.
In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.
−Removed: Acquisition of Sabal Palm Bancorp, Inc.
−Removed: On January 3, 2022, the Company completed its acquisition of Sabal Palm Bancorp, Inc.
−Removed: (“Sabal Palm”).
−Removed: Simultaneously, upon completion of the merger of Sabal Palm and the Company, Sabal Palm’s wholly owned subsidiary bank, Sabal Palm Bank, was merged with and into Seacoast Bank.
−Removed: Prior to the acquisition, Sabal Palm Bank operated three branches in the Sarasota area.
+Added: Acquisition of Apollo Bancshares, Inc.
+Added: On October 7, 2022, the Company completed its acquisition of Apollo Bancshares, Inc.
+Added: Simultaneously, upon completion of the merger of Apollo and the Company, Apollo Bank was merged with and into Seacoast Bank.
+Added: Prior to the acquisition, Apollo Bank operated five branches in Miami-Dade County.
+Added: As a result of this acquisition, the Company expects to expand its customer base and leverage operating costs through economies of scale, and positively affect the Company’s operating results.
+Added: Apollo shareholders received 1.006529 shares of Seacoast common stock for each share of Apollo common stock, and the minority interest holders in Apollo Bank received 1.195651 shares of Seacoast common stock for each share of Apollo Bank common stock.
+Added: (In thousands, except per share data) October 7, 2022
+Added: Number of Apollo common shares outstanding 3,766
+Added: Per share exchange ratio 1.0065
+Added: Number of shares of SBCF common stock issued 3,791
+Added: Number of Apollo Bank minority interest shares outstanding 609
+Added: Per share exchange ratio 1.1957
+Added: Number of shares of SBCF common stock issued 728
+Added: Total number of shares of SBCF common stock issued 4,519
+Added: Multiplied by common stock price per share at October 7, 2022 $ 30.83
+Added: Value of SBCF common stock issued $ 139,307
+Added: Cash paid for fractional shares 5
+Added: Fair value of Apollo options and warrants converted 6,530
+Added: Total purchase price $ 145,842
+Added: The acquisition of Apollo was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations .
+Added: The Company recognized goodwill of $ 90.2 million for this acquisition that is nondeductible for tax purposes.
+Added: Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.
+Added: The fair values initially assigned to assets acquired and liabilities assumed are preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values becomes known.
+Added: As part of the acquisition of Apollo, options and warrants were granted to replace outstanding Apollo awards.
+Added: These awards were fully vested upon acquisition.
+Added: The full value of the replacement awards, $ 6.5 million, was associated with pre-combination service and was therefore included in the calculation of the total purchase consideration.
+Added: (In thousands) October 7, 2022
+Added: Cash and cash equivalents $ 41,001
+Added: Investment securities 203,596
+Added: Loans 666,522
+Added: Bank premises and equipment 7,809
+Added: Core deposit intangibles 28,699
+Added: Goodwill 90,237
+Added: Other Assets 52,724
+Added: Total Assets $ 1,090,588
+Added: Deposits $ 854,774
+Added: Other Liabilities 89,972
+Added: Total Liabilities $ 944,746
+Added: The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date.
+Added: October 7, 2022
+Added: (In thousands) Book Balance Fair Value
+Added: Construction and land development $ 74,126 $ 70,654
+Added: Commercial real estate - owner occupied 131,093 121,600
+Added: Commercial real estate - non-owner occupied 374,673 340,561
+Added: Residential real estate 76,254 75,957
+Added: Commercial and financial 50,125 46,695
+Added: Consumer 11,307 11,055
+Added: Total acquired loans $ 717,578 $ 666,522
+Added: The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination:
+Added: (In thousands) October 7, 2022
+Added: Book balance of loans at acquisition $ 107,744
+Added: Allowance for credit losses at acquisition ( 2,658 )
+Added: Non-credit related discount ( 14,191 )
+Added: Total PCD loans acquired $ 90,895
+Added: The acquisition of Apollo resulted in the addition of $ 7.8 million in allowance for credit losses, including the $ 2.7 million identified in the table above for PCD loans, and $ 5.1 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
+Added: The Company believes the deposits assumed in the acquisition have an intangible value.
+Added: In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.
+Added: Acquisition of Drummond Banking Company.
+Added: On October 7, 2022, the Company completed its acquisition of Drummond Banking Company (“Drummond”).
+Added: Simultaneously, upon completion of the merger of Drummond and the Company, Drummond’s wholly owned subsidiary bank, Drummond Community Bank, was merged with and into Seacoast Bank.
+Added: Prior to the acquisition, Drummond Community Bank operated 18 branches across North Florida.
As a result of this acquisition, the Company expects to expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results.
−Removed: The Company acquired 100 % of the outstanding common stock of Sabal Palm.
−Removed: Under the terms of the definitive agreement, each share of Sabal Palm common stock was converted into the right to receive 0.2203 of a share of Seacoast common stock.
+Added: The Company acquired 100 % of the outstanding common stock of Drummond.
+Added: Under the terms of the definitive agreement, common stock was converted into the right to receive 51.9561 shares of Seacoast common stock.
+Added: (In thousands, except per share data) October 7, 2022
+Added: Number of Drummond common shares outstanding 99
+Added: Per share exchange ratio 51.9561
+Added: Number of shares of SBCF common stock issued 5,136
+Added: Multiplied by common stock price per share at October 7, 2022 $ 30.83
+Added: Total purchase price $ 158,332
+Added: The acquisition of Drummond was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations .
+Added: The Company recognized goodwill of $ 103.5 million for this acquisition that is nondeductible for tax purposes.
+Added: Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.
+Added: The fair values initially assigned to assets acquired and liabilities assumed are preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values becomes known.
+Added: (In thousands) October 7, 2022
+Added: Cash and cash equivalents $ 31,805
+Added: Investment securities 327,852
+Added: Loans 544,694
+Added: Bank premises and equipment 29,370
+Added: Core deposit and other intangibles 32,983
+Added: Goodwill 103,476
+Added: Other Assets 49,812
+Added: Total Assets $ 1,119,992
+Added: Deposits $ 881,281
+Added: Other Liabilities 80,379
+Added: Total Liabilities $ 961,660
+Added: The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date.
+Added: October 7, 2022
+Added: (In thousands) Book Balance Fair Value
+Added: Construction and land development $ 155,041 $ 140,401
+Added: Commercial real estate - owner occupied 112,768 106,152
+Added: Commercial real estate - non-owner occupied 26,520 24,744
+Added: Residential real estate 85,767 78,663
+Added: Commercial and financial 88,026 82,067
+Added: Consumer 118,880 112,667
+Added: Total acquired loans $ 587,002 $ 544,694
+Added: The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination:
+Added: (In thousands) October 7, 2022
+Added: Book balance of loans at acquisition $ 58,878
+Added: Allowance for credit losses at acquisition ( 2,566 )
+Added: Non-credit related discount ( 4,607 )
+Added: Total PCD loans acquired $ 51,705
+Added: The acquisition of Drummond resulted in the addition of $ 12.5 million in allowance for credit losses, including the $ 2.6 million identified in the table above for PCD loans, and $ 9.9 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
+Added: The Company believes the deposits assumed in the acquisition have an intangible value.
+Added: In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.
+Added: Acquisition of Business Bank of Florida, Corp.
+Added: On January 3, 2022, the Company completed its acquisition of Business Bank of Florida, Corp., (“BBFC”).
+Added: Simultaneously, upon completion of the merger of BBFC and the Company, BBFC’s wholly owned subsidiary bank, Florida Business Bank, was merged with and into Seacoast Bank.
+Added: Prior to the acquisition, Florida Business Bank operated one branch in Melbourne, Florida.
+Added: As a result of this acquisition, the Company expects to expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results.
+Added: The Company acquired 100 % of the outstanding common stock of BBFC.
+Added: Under the terms of the definitive agreement, each share of BBFC common stock was converted into the right to receive 0.7997 of a share of Seacoast common stock.
(In thousands, except per share data) January 3, 2022
−Removed: Number of Sabal Palm common shares outstanding 7,536
+Added: Number of BBFC common shares outstanding 1,112
Per share exchange ratio 0.7997
−Removed: Number of shares of common stock issued 1,660
+Added: Number of shares of SBCF common stock issued 889
Multiplied by common stock price per share on January 3, 2022 $ 35.39
−Removed: Value of common stock issued 58,762
−Removed: Fair value of options converted 3,336
+Added: Value of SBCF common stock issued $ 31,480
+Added: Fair value of BBFC options converted 497
Total purchase price $ 31,977
−Removed: The acquisition of Sabal Palm was accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations .
+Added: The acquisition of BBFC was accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations .
The Company recognized goodwill of $ 8.0 million for this acquisition that is nondeductible for tax purposes.
−Removed: Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a
−Removed: complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.
−Removed: The fair values initially assigned to assets acquired and liabilities assumed are preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values becomes known.
−Removed: As part of the Sabal Palm acquisition, 188,253 options were granted to replace outstanding Sabal Palm options.
−Removed: These options had a weighted average exercise price of $ 17.84 and were fully vested upon acquisition.
−Removed: In accordance with ASC Topic 805, Business Combinations , the value of the replacement awards associated with pre-combination service, $ 3.3 million, was considered purchase consideration.
−Removed: (In thousands) Initially Measured
+Added: Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.
+Added: As part of the BBFC acquisition, options were granted to replace outstanding BBFC options.
+Added: These options were fully vested upon acquisition.
+Added: The full value of the replacement options, $ 0.5 million, was associated with pre-combination service and was therefore included in the calculation of the total purchase consideration.
+Added: (In thousands) Measured
January 3, 2022
Cash $ 38,332
−Removed: Time deposits with other banks 6,473
+Added: Investment securities 26,011
Loans 121,774
2 unchanged sentences
Goodwill 7,962
−Removed: Other assets 5,189
Total assets $ 198,802
11 unchanged sentences
Consumer 59 61
−Removed: PPP loans 3,312 3,312
Total acquired loans $ 123,916 $ 121,774
5 unchanged sentences
Total PCD loans acquired $ 651
−Removed: The acquisition of Sabal Palm resulted in the addition of $ 3.4 million in allowance for credit losses, including the $ 37 thousand identified in the table above for PCD loans, and $ 3.4 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
+Added: The acquisition of BBFC resulted in the addition of $ 1.8 million in allowance for credit losses, including the $ 15 thousand identified in the table above for PCD loans, and $ 1.8 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
The Company believes the deposits assumed in the acquisition have an intangible value.
In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.
−Removed: Acquisition of Legacy Bank of Florida
−Removed: On August 6, 2021, the Company completed its acquisition of Legacy Bank of Florida (“Legacy Bank”).
−Removed: Prior to the acquisition, Legacy Bank operated five branches in Broward and Palm Beach counties.
+Added: Acquisition of Sabal Palm Bancorp, Inc.
+Added: On January 3, 2022, the Company completed its acquisition of Sabal Palm Bancorp, Inc.
+Added: (“Sabal Palm”).
+Added: Simultaneously, upon completion of the merger of Sabal Palm and the Company, Sabal Palm’s wholly owned subsidiary bank, Sabal Palm Bank, was merged with and into Seacoast Bank.
+Added: Prior to the acquisition, Sabal Palm Bank operated three branches in the Sarasota area.
As a result of this acquisition, the Company expects to expand its customer base and leverage operating cost through economies of scale, and positively affect the Company’s operating results.
−Removed: The Company acquired 100 % of the outstanding common stock of Legacy Bank.
−Removed: Under the terms of the definitive agreement, each share of Legacy Bank common stock was converted into the right to receive 0.1703 of a share of Seacoast common stock.
−Removed: (In thousands, except per share data) August 6, 2021
−Removed: Number of Legacy Bank common shares outstanding 15,778
+Added: The Company acquired 100 % of the outstanding common stock of Sabal Palm.
+Added: Under the terms of the definitive agreement, each share of Sabal Palm common stock was converted into the right to receive 0.2203 of a share of Seacoast common stock.
+Added: (In thousands, except per share data) January 3, 2022
+Added: Number of Sabal Palm common shares outstanding 7,536
Per share exchange ratio 0.2203
−Removed: Number of shares of common stock issued 2,687
−Removed: Multiplied by common stock price per share on August 6, 2021 $ 32.19
−Removed: Value of common stock issued 86,487
−Removed: Cash paid for fractional shares 7
−Removed: Fair value of options converted 4,736
+Added: Number of shares of SBCF common stock issued 1,660
+Added: Multiplied by common stock price per share on January 3, 2022 $ 35.39
+Added: Value of SBCF common stock issued $ 58,762
+Added: Fair value of Sabal Palm options converted 3,336
Total purchase price $ 62,098
−Removed: The acquisition of Legacy Bank was accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations .
+Added: The acquisition of Sabal Palm was accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations .
The Company recognized goodwill of $ 26.5 million for this acquisition that is nondeductible for tax purposes.
Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.
−Removed: As part of the Legacy Bank acquisition, 356,497 options were granted to replace outstanding Legacy Bank options.
−Removed: These options had a weighted average exercise price of $ 16.70 and were fully vested upon acquisition.
−Removed: In accordance with ASC Topic 805, Business Combinations , the value of the replacement awards associated with pre-combination service, $ 4.7 million, was considered purchase consideration, and the value of the replacement awards associated with post-combination service, $ 0.9 million, was recognized as compensation expense in 2021.
−Removed: (In thousands) Initially Measured
−Removed: August 6, 2021
+Added: As part of the Sabal Palm acquisition, options were granted to replace outstanding Sabal Palm options.
+Added: These options were fully vested upon acquisition.
+Added: The full value of the replacement options, $ 3.3 million, was associated with pre-combination service and was therefore included in the calculation of the total purchase consideration.
+Added: (In thousands) Measured
+Added: January 3, 2022
Cash $ 170,609
−Removed: Investment securities 992
+Added: Time deposits with other banks 6,473
Loans 246,152
8 unchanged sentences
The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date.
−Removed: August 6, 2021
+Added: January 3, 2022
(In thousands) Book Balance Fair Value
5 unchanged sentences
Consumer 233 232
−Removed: PPP loans 38,598 38,598
Total acquired loans $ 248,910 $ 246,152
The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination:
−Removed: (In thousands) August 6, 2021
+Added: (In thousands) January 3, 2022
Book balance of loans at acquisition $ 3,703
2 unchanged sentences
Total PCD loans acquired $ 3,003
−Removed: The acquisition of Legacy Bank resulted in the addition of $ 11.2 million in allowance for credit losses, including the $ 3.0 million identified in the table above for PCD loans, and $ 8.2 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
+Added: The acquisition of Sabal Palm resulted in the addition of $ 3.4 million in allowance for credit losses, including the $ 37 thousand identified in the table above for PCD loans, and $ 3.4 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.
The Company believes the deposits assumed in the acquisition have an intangible value.
In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships.
+Added: Acquisition Costs
+Added: Acquisition costs included in the Company's income statement for the three months ended March 31, 2023, and 2022 were $ 17.5 million and $ 6.7 million, respectively.
Pro-Forma Information
−Removed: Pro-forma data presents information as if the acquisition of Legacy Bank occurred at the beginning of 2020, and the acquisitions of BBFC and Sabal Palm occurred at the beginning of 2021, as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: (In thousands, except per share amounts) 2022 2021 2022 2021
+Added: Pro-forma data as of March 31, 2023 and 2022 present information as if the acquisition of Professional occurred at the beginning of 2022.
+Added: The pro-forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have occurred if the transactions had been effected on the assumed dates.
+Added: Three Months Ended
+Added: (In thousands, except per share data) 2023 2022
Net interest income $ 141,920 $ 105,597
−Removed: Net income 29,237 29,950 87,262 98,700
+Added: Net income available to common shareholders 36,090 12,809
EPS - basic 0.43 0.17
EPS - diluted 0.42 0.17
−Removed: Fourth Quarter 2022 Acquisitions
−Removed: Acquisition of Apollo Bancshares, Inc.
−Removed: On October 7, 2022, the Company completed its acquisition of Apollo Bancshares, Inc.
−Removed: Simultaneously, upon completion of the merger of Apollo and the Company, Apollo Bank was merged with and into Seacoast Bank.
−Removed: Prior to the acquisition, Apollo Bank operated five branches in Miami-Dade County.
−Removed: Apollo shareholders received 1.006529 shares of Seacoast common stock for each share of Apollo common stock, and the minority interest holders in Apollo Bank received 1.195651 shares of Seacoast common stock for each share of Apollo Bank common stock.
−Removed: (In thousands, except per share data) October 7, 2022
−Removed: Number of Apollo Bancshares, Inc.
−Removed: common shares outstanding 3,766,412
−Removed: Per share exchange ratio 1.006529
−Removed: Number of shares of SBCF common stock issued 3,790,848
−Removed: Number of Apollo Bank minority interest shares outstanding 608,635
−Removed: Per share exchange ratio 1.195651
−Removed: Number of shares of SBCF common stock issued 727,714
−Removed: Total number of shares of SBCF common stock issued 4,518,562
−Removed: Multiplied by common stock price per share at October 7, 2022 $ 30.83
−Removed: Value of SBCF common stock issued $ 139,307
−Removed: Cash paid for fractional shares 5
−Removed: Fair value of Apollo Bancshares, Inc.
−Removed: options and warrants converted 6,530
−Removed: Total purchase price $ 145,842
−Removed: Acquisition of Drummond Banking Company.
−Removed: On October 7, 2022, the Company completed its acquisition of Drummond Banking Company (“Drummond”).
−Removed: Simultaneously, upon completion of the merger of Drummond and the Company, Drummond’s wholly owned subsidiary bank, Drummond Community Bank, was merged with and into Seacoast Bank.
−Removed: Prior to the acquisition, Drummond Community Bank operated 18 branches across North Florida.
−Removed: The Company acquired 100 % of the outstanding common stock of Drummond.
−Removed: Under the terms of the definitive agreement, common stock was converted into the right to receive 51.9561 shares of Seacoast common stock.
−Removed: (In thousands, except per share data) October 7, 2022
−Removed: Number of Drummond Banking Company.
−Removed: common shares outstanding 98,846
−Removed: Per share exchange ratio 51.9561
−Removed: Number of shares of SBCF common stock issued 5,135,631
−Removed: Multiplied by common stock price per share at October 7, 2022 $ 30.83
−Removed: Total purchase price $ 158,332
−Removed: The acquisitions of Apollo and Drummond will be accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations .
−Removed: The Company's assessment of the fair value of assets acquired and liabilities assumed as of the acquisition date is incomplete at the time of this filing;
−Removed: therefore, certain disclosures have been omitted.
−Removed: The Company expects to recognize goodwill in each of these transactions, which is expected to be nondeductible for tax purposes.
−Removed: Proposed Acquisition of Professional Holding Corp.
−Removed: On August 8, 2022, the Company announced its proposed acquisition of Professional Holding Corp.
−Removed: (“Professional”).
−Removed: The transaction, which is expected to close early in the first quarter of 2023, will expand the Company’s presence in the tri-county South Florida market, which includes Miami-Dade, Broward, and Palm Beach counties, Florida’s largest MSA and the 8 th largest in the nation.
−Removed: Professional operates nine branches across Miami-Dade, Broward, and Palm Beach counties with deposits of approximately $ 2.2 billion and loans of $ 2.0 billion as of September 30, 2022.
−Removed: All regulatory approvals for the transaction have been received.
−Removed: The Professional merger remains subject to the approval of Professional shareholders and the satisfaction of other customary closing conditions.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.