What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-10 · 250 added, 123 removed, 1103 unchanged (25% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands, except per share data) 2023 2022 2023 2022

20 unchanged sentences

21,752 17,264 44,090 33,089

Securities gains (losses), net 107 ( 452 )

Securities losses, net ( 176 ) ( 300 ) ( 69 ) ( 752 )

Total Noninterest Income 21,576 16,964 44,021 32,337

10 unchanged sentences

Amortization of intangibles 7,654 1,446 14,381 2,892

Foreclosed property expense and net loss (gain) on sale 195 ( 164 )

Table of Content s

Foreclosed property expense and net (gain) loss on sale ( 57 ) ( 968 ) 138 ( 1,132 )

Provision for credit losses on unfunded commitments — — 1,239 142

11 unchanged sentences

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended March 31,

(In thousands) 2023 2022

(In thousands) Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Net Income $ 31,249 $ 32,755 $ 43,076 $ 53,343

Other comprehensive income (loss):

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

Unrealized losses on available-for-sale securities, net of tax benefit of $ 7.1 million and $ 1.2 million for the three and six months ended June 30, 2023, respectively, and net of tax benefit of $ 16.0 million and $ 36.6 million for the three and six months ended June 30, 2022, respectively

$ ( 22,215 ) $ ( 50,473 ) $ ( 3,699 ) $ ( 116,485 )

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

Reclassification adjustment for gains included in net income, net of tax expense of $ 1 thousand for the three months ended March 31, 2023

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

Amortization of unrealized (gains) losses on securities transferred to held-to-maturity, net of tax benefit of $ 3 thousand and $ 6 thousand for the three and six months ended June 30, 2023, respectively, and net of tax benefit of $ 7 thousand and nominal tax expense for the three and six months ended June 30, 2022, respectively

( 11 ) ( 34 ) ( 21 ) 2

Reclassification adjustment for gains included in net income, net of tax expense of $ 1 thousand for the six months ended June 30, 2023

Unrealized gains on derivatives designated as fair value hedges, net of reclassifications to income, net of tax expense of $ 1.6 million for the three and six months ended June 30, 2023, respectively

4,732 — 4,732 —

Unrealized gains (losses) on derivatives designated as cash flow hedges, net of reclassifications to income, net of tax expense of $ 38 thousand and $ 71 thousand for the three and six months ended June 30, 2023, respectively, and net of tax expense of $ 3 thousand and net of tax benefit of $ 19 thousand for the three and six months ended June 30, 2022, respectively

103 9 201 ( 55 )

Total other comprehensive income (loss) $ ( 17,391 ) $ ( 50,498 ) $ 1,209 $ ( 116,538 )

1 unchanged sentence

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

March 31, December 31,

June 30, December 31,

(In thousands, except share data) 2023 2022

5 unchanged sentences

Securities available-for-sale (at fair value) 1,916,231 1,871,742

Securities held-to-maturity (fair value $ 618.8 million at March 31, 2023

Securities held-to-maturity (fair value $ 577.6 million at June 30, 2023

and $ 617.7 million at December 31, 2022)

20 unchanged sentences

Shareholders' Equity

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

Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 85,615,136 and outstanding 85,086,269 at June 30, 2023, and authorized 120,000,000 , issued 72,099,136 and outstanding 71,617,852 shares at December 31, 2022

Additional paid-in-capital 1,809,431 1,377,802

6 unchanged sentences

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2023 2022

36 unchanged sentences

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2023 2022

3 unchanged sentences

Net decrease in FHLB borrowings with original maturities of three months or less ( 170,000 ) —

Repayments of FHLB borrowings with original maturities of more than three months ( 75,000 ) —

Proceeds from FHLB borrowings with original maturities of more than three months 110,000 —

Stock based employee benefit plans 3,731 2,361

Repurchase of common stock ( 45 ) —

Dividends paid ( 29,852 ) ( 18,510 )

10 unchanged sentences

Transfers from bank premises to other real estate owned 5,455 1,008

1 See "Note 11 - Business Combinations" for common stock issued in business combinations.

1 See "Note 11 - Business Combinations" for non cash transactions related to business combinations.

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

Common Stock Paid-in

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss)

(In thousands) Shares Amount Total

Balance at March 31, 2023 84,609 8,461 1,803,898 421,271 ( 13,113 ) ( 169,433 ) 2,051,084

Comprehensive income (loss) — — — 31,249 — ( 17,391 ) 13,858

Stock based compensation expense — — 4,454 — — — 4,454

Common stock transactions related to stock based employee benefit plans 377 38 ( 124 ) — ( 1,058 ) — ( 1,144 )

Common stock issued for stock options 103 10 1,248 — — — 1,258

Repurchase of common stock ( 3 ) — ( 45 ) — — — ( 45 )

Dividends on common stock ($ 0.18 per share)

— — — ( 15,433 ) — — ( 15,433 )

Three months ended June 30, 2023 477 48 5,533 15,816 ( 1,058 ) ( 17,391 ) 2,948

Balance at June 30, 2023

85,086 $ 8,509 $ 1,809,431 $ 437,087 $ ( 14,171 ) $ ( 186,824 ) $ 2,054,032

Common Stock Paid-in

1 unchanged sentence

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss)

(In thousands) Shares Amount Total

Balance at December 31, 2022

Balance at March 31, 2022

61,239 6,124 1,062,462 371,192 ( 10,459 ) ( 73,034 ) 1,356,285

3 unchanged sentences

Common stock issued for stock options 2 — 39 — — — 39

Issuance of common stock, pursuant to acquisition 12,792 1,279 409,459 — — — 410,738

Conversion of options, pursuant to acquisition — — 10,304 — — — 10,304

Dividends on common stock ($ 0.17 per share)

— — — ( 10,516 ) — — ( 10,516 )

Three months ended March 31, 2023

12,991 1,299 426,096 ( 2,592 ) ( 94 ) 18,600 443,309

Balance at March 31, 2023

Three months ended June 30, 2022 171 17 2,705 22,239 ( 1,173 ) ( 50,498 ) ( 26,710 )

Balance at June 30, 2022

61,410 $ 6,141 $ 1,065,167 $ 393,431 $ ( 11,632 ) $ ( 123,532 ) $ 1,329,575

Common Stock Paid-in

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss)

(In thousands) Shares Amount Total

Balance at December 31, 2022

71,618 $ 7,162 1,377,802 423,863 ( 13,019 ) ( 188,033 ) 1,607,775

Comprehensive income — — — 43,076 — 1,209 44,285

Stock based compensation expense — — 7,096 — — — 7,096

Common stock transactions related to stock based employee benefit plans 448 46 ( 203 ) — ( 1,152 ) — ( 1,309 )

Common stock issued for stock options 231 22 5,018 — — — 5,040

Repurchase of common stock ( 3 ) — ( 45 ) — — — ( 45 )

Issuance of common stock, pursuant to acquisition 12,792 1,279 409,459 — — — 410,738

Conversion of options, pursuant to acquisition — — 10,304 — — — 10,304

Dividends on common stock ($ 0.35 per share)

— — — ( 29,852 ) — — ( 29,852 )

Six months ended June 30, 2023 13,468 1,347 431,629 13,224 ( 1,152 ) 1,209 446,257

Balance at June 30, 2023

85,086 $ 8,509 $ 1,809,431 $ 437,087 $ ( 14,171 ) $ ( 186,824 ) $ 2,054,032

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Common Stock Paid-in

1 unchanged sentence

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss)

(In thousands) Shares Amount Total

9 unchanged sentences

— — — ( 18,510 ) — — ( 18,510 )

Three months ended March 31, 2022

2,735 274 98,611 12,594 110 ( 66,040 ) 45,549

Balance at March 31, 2022

Six months ended June 30, 2022 2,906 291 101,316 34,833 ( 1,063 ) ( 116,538 ) 18,839

Balance at June 30, 2022

61,410 $ 6,141 $ 1,065,167 $ 393,431 $ ( 11,632 ) $ ( 123,532 ) $ 1,329,575

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

9 unchanged sentences

Certain prior period amounts have been reclassified to conform to the current period presentation.

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.

Operating results for the three and six months ended June 30, 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.

11 unchanged sentences

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.”

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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.

For the three months ended March 31, 2023, 161,251 options to purchase shares of the Company’s common stock were anti-dilutive.

For the three months ended March 31, 2022, no options to purchase shares of the Company's common stock were anti-dilutive.

Three Months Ended March 31,

For the three and six months ended June 30, 2023, options to purchase shares of the Company’s common stock totaling 400,998 and 368,169 , respectively, were anti-dilutive.

For the three and six months ended June 30, 2022, 1,505 options to purchase shares of the Company's common stock were anti-dilutive.

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in thousands, except per share data) 2023 2022 2023 2022

12 unchanged sentences

Note 3 – Securities

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:

March 31, 2023

The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale and held-to-maturity at June 30, 2023 and December 31, 2022 are summarized as follows:

June 30, 2023

(In thousands) Amortized

14 unchanged sentences

Totals $ 707,812 $ — $ ( 130,226 ) $ 577,586

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December 31, 2022

20 unchanged sentences

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.

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.

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.

The amortized cost and fair value of securities at March 31, 2023, by contractual maturity, are shown below.

There were no sales of securities during the three months ended June 30, 2023.

During the three months ended March 31, 2022, securities with a fair value of $ 26.0 million obtained in the acquisition of Business Bank of Florida Corp.

were immediately sold.

No gain or loss was recognized on the sale.

There were no other sales of securities during the three and six months ended June 30, 2022.

Included in “Securities gains (losses), net” are decreases of $ 0.2 million and $ 0.1 million for the three and six months ended June 30, 2023, respectively, and decreases of $ 0.3 million and $ 0.8 million for the three and six months ended June 30, 2022, respectively, in the value of investments in mutual funds that invest in CRA-qualified debt securities.

At June 30, 2023, debt securities with a fair value of $ 1.8 billion were pledged primarily as collateral for public deposits and secured borrowings.

The amortized cost and fair value of securities at June 30, 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.

March 31, 2023

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June 30, 2023

Held-to-Maturity Available-for-Sale

14 unchanged sentences

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.

March 31, 2023

June 30, 2023

Less Than 12 Months 12 Months or Longer Total

12 unchanged sentences

Totals $ 495,852 $ ( 27,947 ) $ 1,362,814 $ ( 225,429 ) $ 1,858,666 $ ( 253,376 )

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December 31, 2022

13 unchanged sentences

Totals $ 1,058,560 $ ( 73,965 ) $ 753,962 $ ( 174,697 ) $ 1,812,522 $ ( 248,662 )

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.

At June 30, 2023, the Company had unrealized losses of $ 230.7 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.

Therefore, at March 31, 2023, no allowance for credit losses has been recorded.

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.

Therefore, at June 30, 2023, no allowance for credit losses has been recorded.

At June 30, 2023, the Company had $ 13.4 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 129.3 million.

The securities have weighted average credit support of 22 %.

Therefore, at March 31, 2023, no allowance for credit losses has been recorded.

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.

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.

Therefore, at June 30, 2023, no allowance for credit losses has been recorded.

At June 30, 2023, the Company had $ 7.2 million of unrealized losses in floating rate collateralized loan obligations (“CLOs”) having a fair value of $ 303.3 million.

CLOs are special purpose vehicles and those in which the Company has invested are nearly all first-lien, broadly syndicated corporate loans across a diversified band of industries while providing support to senior tranche investors.

As of June 30, 2023, all positions held by the Company are in AAA and AA tranches, with weighted average credit support of 38 % and 26 %, respectively.

The Company evaluates the securities for potential credit losses by modeling expected loan-level defaults, recoveries, and prepayments for each CLO security.

Therefore, at March 31, 2023, no allowance for credit losses has been recorded.

At March 31, 2023, the Company had $ 1.4 million of unrealized losses on municipal securities having a fair value of $ 16.0 million.

Therefore, at June 30, 2023, no allowance for credit losses has been recorded.

At June 30, 2023, the Company had $ 1.5 million of unrealized losses on municipal securities having a fair value of $ 17.2 million.

These securities are highly rated issuances of state or local municipalities, all of which are continuing to make timely contractual payments.

As a result, as of March 31, 2023, no allowance for credit losses has been recorded.

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.

These securities were issued under the U.S.

Department of Education’s Federal Family Education Loan program, which generally provides a minimum of 97% U.S.

Department of Education guarantee of principal.

These securities also have added credit enhancement through over-collateralization and have average credit support of 9%.

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.

Therefore, at March 31, 2023, no allowance for credit losses has been recorded.

As a result, as of June 30, 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.

As a result, as of March 31, 2023, no allowance for credit losses has been recorded.

As a result, as of June 30, 2023, no allowance for credit losses has been recorded.

The Company has the intent and ability to hold these securities until maturity.

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.

Table of Content s

Included in Other Assets at June 30, 2023 is $ 69.0 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.

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.

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.

Accrued interest receivable on available-for-sale (“AFS”) and HTM debt securities of $ 8.0 million and $ 1.2 million, respectively, at June 30, 2023, and $ 7.0 million and $ 1.3 million, respectively, at December 31, 2022, is included in Other Assets.

Also included in Other Assets are investments in CRA-qualified mutual funds carried at fair value of $ 13.5 million and $ 8.2 million at June 30, 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.

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.

Under the current conversion ratio that became effective June 29, 2023, the Company would receive 1.5902 shares of Class A stock for each share of Class B stock for a total of 18,016 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.

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The following tables present net loan balances by segment as of:

March 31, 2023

June 30, 2023

(In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total

17 unchanged sentences

Totals $ 5,944,193 $ 1,965,749 $ 234,782 $ 8,144,724

The amortized cost basis of loans at March 31, 2023 included net deferred costs of $ 35.7 million.

The amortized cost basis of loans at June 30, 2023 included net deferred costs of $ 37.6 million.

At December 31, 2022, the amortized cost basis included net deferred costs of $ 35.1 million.

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.

At June 30, 2023, the remaining fair value adjustments on acquired loans were $ 201.8 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.

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.

The following tables present the status of net loan balances as of March 31, 2023 and December 31, 2022.

March 31, 2023

Accrued interest receivable is included within Other Assets and was $ 36.2 million and $ 28.2 million at June 30, 2023 and December 31, 2022, respectively.

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The following tables present the status of net loan balances as of June 30, 2023 and December 31, 2022.

June 30, 2023

(In thousands) Current Accruing

28 unchanged sentences

Total Loans $ 10,043,078 $ 20,690 $ 4,362 $ 1,463 $ 48,326 $ 10,117,919

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December 31, 2022

32 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured.

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 Company recognized $ 0.3 million and $ 0.4 million in interest income on nonaccrual loans during the three months ended June 30, 2023 and 2022, respectively.

The Company recognized $ 0.4 million and $ 1.2 million in interest income on nonaccrual loans during each of the six months ended June 30, 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:

March 31, 2023

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June 30, 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:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Construction and land development $ 430 $ 59

13 unchanged sentences

Loans with the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

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• Substandard Impaired:

2 unchanged sentences

The principal balance of loans classified as doubtful are likely to be charged off.

The following tables present the risk rating of loans by year of origination as of:

March 31, 2023

The following tables present the risk rating of loans and year-to-date gross charge offs by year of origination as of:

June 30, 2023

(In thousands) 2023 2022 2021 2020 2019 Prior Revolving Total

31 unchanged sentences

Substandard — — — — — 31 357 388

March 31, 2023

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June 30, 2023

(In thousands) 2023 2022 2021 2020 2019 Prior Revolving Total

35 unchanged sentences

Gross Charge Offs $ — $ 672 $ 1,684 $ 1,761 $ 316 $ 1,377 $ 535 $ 6,345

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December 31, 2022

10 unchanged sentences

Risk Ratings:

December 31, 2022

(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

38 unchanged sentences

Pass $ — $ 2,708 $ 1,882 $ — $ — $ — $ — $ 4,590

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December 31, 2022

(In thousands) 2022 2021 2020 2019 2018 Prior Revolving Total

Substandard $ — $ — $ — $ — $ — $ — $ — $ —

7 unchanged sentences

Doubtful — — — — — — — —

December 31, 2022

(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

4 unchanged sentences

The Company does not typically provide forgiveness of principal as a modification.

During the three months ended March 31, 2023, there was one loan totaling $ 29 thousand that was a TBM, which is considered immaterial.

As of June 30, 2023, the Company had five loans classified as TBMs totaling $ 0.9 million, which is considered immaterial.

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.

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Note 5 – Allowance for Credit Losses

Activity in the allowance for credit losses is summarized as follows:

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(In thousands) Beginning

Balance Initial Allowance on PCD Loans Acquired During the Period 1

Losses Charge-

Offs Recoveries Ending

Construction and land development $ 6,540 $ — $ 414 $ — $ 6 $ 6,960

Commercial real estate - owner-occupied 6,292 — 125 — 1 6,418

Commercial real estate - non-owner occupied 53,575 — 423 — 105 54,103

Residential real estate 39,894 — ( 3,248 ) ( 109 ) 173 36,710

Commercial and financial 31,593 5,544 2,202 ( 727 ) 1,660 40,272

Consumer 17,746 — ( 680 ) ( 1,904 ) 90 15,252

Totals $ 155,640 $ 5,544 $ ( 764 ) $ ( 2,740 ) $ 2,035 $ 159,715

1 Amount represents a measurement period adjustment of a PCD loan acquired through the acquisition of Professional, see Note 11 - Business Combinations

Three Months Ended June 30, 2022

(In thousands) Beginning

Balance Provision

Losses Charge-

Offs Recoveries TDR

Adjustments Ending

Construction and land development 2,268 230 — 54 — 2,552

Commercial real estate - owner occupied 9,294 ( 1,918 ) — — — 7,376

Commercial real estate - non-owner occupied 43,922 2,528 — 9 — 46,459

Residential real estate 14,075 648 112 ( 14 ) 14,821

Commercial and financial 17,727 ( 500 ) ( 253 ) 171 ( 1 ) 17,144

Consumer 2,552 ( 166 ) ( 199 ) 230 — 2,417

Totals $ 89,838 $ 822 $ ( 452 ) $ 576 $ ( 15 ) $ 90,769

Six Months Ended June 30, 2023

(In thousands) Beginning

Balance Initial Allowance on PCD Loans Acquired During the Period Provision

8 unchanged sentences

Totals $ 113,895 $ 18,879 $ 30,834 $ ( 6,345 ) $ 2,452 $ 159,715

Three Months Ended March 31, 2022

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Six Months Ended June 30, 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

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Forecast data is sourced from Moody’s Analytics (“Moody’s”), a firm widely recognized for its research, analysis, and economic forecasts.

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.

As of March 31, 2023 and December 31, 2022, the Company utilized a blend of Moody’s most recent “U.S.

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.

As of June 30, 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.

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.

The following section discusses changes in the level of the allowance for credit losses for the three months ended March 31, 2023.

The acquisition of Professional on January 31, 2023, added approximately $ 2.0 billion in loans, contributing to the increase in allowance in each segment.

The following section discusses changes in the level of the allowance for credit losses for the three months ended June 30, 2023.

In the Construction and Land Development segment, the increase in the allowance is attributed to higher loan balances.

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therefore, industry and collateral type and estimated collateral values are among the relevant factors in assessing expected losses.

In the Commercial Real Estate - Owner-Occupied segment, the increase in the allowance is attributed to higher loan balances.

In the Commercial Real Estate - Owner-Occupied segment, the increase in the allowance reflects higher loan balances.

Risk characteristics include but are not limited to, collateral type, note structure and loan seasoning.

In the Commercial Real Estate - Non Owner-Occupied segment, the increase in the allowance is attributed to higher loan balances.

In the Commercial Real Estate - Non Owner-Occupied segment, the increase in the allowance is attributed to changes in economic forecast variables for commercial real estate, partially offset by lower loan balances.

Repayment is often dependent upon rental income from the successful operation of the underlying property.

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The Residential Real Estate segment includes first mortgages secured by residential property, and home equity lines of credit.

The increase in the allowance is due to higher loan balances and the increasing likelihood of economic recession reflected within the forecast.

The decrease in the allowance is due to continued resilience in economic indicators relevant to the Florida housing market.

partially offset by higher loan balances.

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.

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.

The increase in reserves is primarily attributed to higher reserves on individually evaluated loans.

Industry, collateral type, estimated collateral values and loan seasoning are among the relevant factors in assessing expected losses.

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Consumer loans include installment and revolving lines, loans for automobiles, boats, and other personal or family purposes.

Risk characteristics considered for this segment include, but are not limited to, collateral type, loan to value ratios, loan seasoning and FICO score.

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 decrease in the allowance is primarily due to lower 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.

The Company’s loan portfolio and related allowance at March 31, 2023 and December 31, 2022 are shown in the following tables:

March 31, 2023

The Company’s loan portfolio and related allowance at June 30, 2023 and December 31, 2022 are shown in the following tables:

June 30, 2023

Individually Evaluated Collectively Evaluated Total

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No net gains or losses have been recognized to date on these instruments.

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 June 30, 2023, the interest rate swaps had an aggregate notional value of $ 457.2 million, with a fair value of $ 29.0 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.

The weighted average maturity was 7.1 years at March 31, 2023 and 6.7 years at December 31, 2022.

The weighted average maturity was 6.7 years at both June 30, 2023 and at December 31, 2022.

Interest Rate Floors Designated as Cash Flow Hedges

The Company has entered into interest rate floor contracts to mitigate exposure to the variability of future cash flows due to changes in interest rates on certain segments of its variable-rate loans.

During 2020, the Company entered into two interest rate floor contracts, each with a notional amount of $ 150.0 million, maturing in October 2023 and November 2023.

The Company considers these derivatives to be highly effective at achieving offsetting changes in cash flows attributable to changes in interest rates and has designated them as cash flow hedges.

During 2020, the Company entered into two interest rate floor contracts, each with a notional amount of $ 150.0 million, maturing in October 2023 and November 2023, respectively.

The Company considers these derivatives to be highly effective at achieving offsetting changes in cash flows attributable to

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changes in interest rates and has designated them as cash flow hedges.

Therefore, changes in the fair value of these derivative instruments are recognized in other comprehensive income.

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.

As of March 31, 2023 and December 31, 2022, the interest

rate floors had a fair value of $ 6 thousand and $ 2 thousand, respectively, and are recorded in Other Assets in the consolidated balance sheet.

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.

As of June 30, 2023 and December 31, 2022, the interest rate floors had a nominal fair value.

For the three and six months ended June 30, 2023, the Company recognized nominal amounts through other comprehensive income, and reclassified $ 0.2 million and $ 0.3 million, respectively, out of accumulated other comprehensive income and into interest income.

For the three and six months ended June 30, 2022, the Company recognized a loss through other comprehensive income of $ 0.1 million and $ 0.2 million, respectively, and reclassified $ 0.1 million and $ 0.2 million, respectively, out of accumulated other comprehensive income and into interest income.

During the next twelve months, the Company expects to reclassify $ 0.3 million from accumulated other comprehensive income into interest income related to these agreements.

Interest Rate Swaps Designated as Fair Value Hedges

During the three months ended June 30, 2023, the Company entered into two interest rate swap contracts to hedge the risk of changes in fair value of the AFS portfolio due to changes in the Secured Overnight Financing Rate (“SOFR”) interest rate.

Each fair value hedge utilizes the portfolio layer method hedge designation type for a notional amount of $ 200 million, maturing April 2025.

The Company considers these derivatives to be highly effective at offsetting changes in interest rates and will assess the effectiveness on a monthly basis.

Therefore, changes in interest rates affecting the fair value of these derivative contracts are recognized in other comprehensive income.

These derivative instruments are primarily for risk management purposes.

As of June 30, 2023, the interest rate swaps had a notional value of $ 400 million with a fair value of $ 6.2 million.

For the three months ended June 30, 2023, the Company recognized gains through other comprehensive income of $ 6.3 million, and reclassified $ 0.1 million out of accumulated other comprehensive income and into interest income.

(In thousands) Notional Amount Fair Value Balance Sheet Category

At March 31, 2023

At June 30, 2023

Back-to-back swaps $ 457,193 $ 29,007 Other Assets and Other Liabilities

Interest rate floors 300,000 — Other Assets

Fair value hedges 400,000 6,232 Other Assets

At December 31, 2022

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Interest rate floors 300,000 2 Other Assets

The following table presents amounts recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.

Carrying amount of the hedged items Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items

(In thousands) June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

Available-for-sale securities 1

$ 609,295 $ — $ 6,338 $ —

1 At June 30, 2023, and December 31, 2022, the amortized cost basis and unallocated basis adjustments used in hedging relationships was $ 718.2 million and $ 0 , respectively.

Refer to Note 3 for a reconciliation of the amortized cost and fair value of available-for-sale securities.

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Note 7 – Securities Sold Under Agreements to Repurchase

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Company securities pledged were as follows by collateral type and maturity as of:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Fair value of pledged securities - overnight and continuous:

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Note 8 – Equity Capital

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.

The Company is well-capitalized and at June 30, 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

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Management presently believes that none of the legal proceedings to which it is a party are likely to have a materially adverse effect on the Company’s consolidated financial condition, operating results or cash flows.

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Note 10 – Fair Value

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:

Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at June 30, 2023 and December 31, 2022 included:

(In thousands) Fair Value

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(Level 2) Significant

At March 31, 2023

At June 30, 2023

Financial Assets

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$ 29,007 $ — $ 29,007 $ —

At December 31, 2022

At December 31, 2022 At

Financial Assets

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2 Recurring fair value basis determined using observable market data.

3 S e e “Note 4 – Loans.” N onrecurring fair value adjustments to collateral-dependent loans reflect full or partial write-downs that are based on current appraised values of the collateral in accordance with ASC Topic 310.

3 See “Note 4 – Loans.” Nonrecurring fair value adjustments to collateral-dependent loans reflect full or partial write-downs that are based on current appraised values of the collateral in accordance with ASC Topic 310.

4 Fair value is measured on a nonrecurring basis in accordance with ASC Topic 360.

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These back-to-back agreements are intended to offset each other and allow the Company to originate a variable rate loan, while

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providing a contract for fixed interest payments for the customer.

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Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2.

Other derivatives consist of interest rate floors designated as cash flow hedges.

Other derivatives are also classified within Level 2.

The fair values of these instruments are based upon the estimated amount the Company would receive or pay to terminate the instruments, taking into account current interest rates and, when appropriate, the current creditworthiness of the counterparties.

Interest rate floors designated as cash flow hedges are classified within Level 2.

Loans held for sale :

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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.

None of the loans were 90 days or more past due or on nonaccrual as of March 31, 2023 and December 31, 2022.

The aggregate fair value and contractual balance of loans held for sale as of March 31, 2023 and December 31, 2022 is as follows:

(In thousands) March 31, 2023 December 31, 2022

None of the loans were 90 days or more past due or on nonaccrual as of June 30, 2023 and December 31, 2022.

The aggregate fair value and contractual balance of loans held for sale as of June 30, 2023 and December 31, 2022 is as follows:

(In thousands) June 30, 2023 December 31, 2022

Aggregate fair value $ 5,967 $ 3,151

Contractual balance 5,757 3,071

Excess 210 80

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.

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.

Fair value is based on recent real estate appraisals and 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.

At March 31, 2023, capitalization rates utilized to determine fair value of the underlying collateral averaged approximately 6.7 %.

At June 30, 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.

If such adjustments are made, the fair value of these loans is considered Level 3 in the fair value hierarchy.

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.

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.

Collateral-dependent loans measured at fair value totaled $ 43.3 million with a specific reserve of $ 23.0 million at June 30, 2023, compared to $ 10.2 million with a specific reserve of $ 2.9 million at December 31, 2022.

For loans classified as Level 3, changes included loan additions of $ 18.9 million offset by $ 6.9 million in paydowns and charge-offs for the six months ended June 30, 2023.

Other real estate owned :

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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.

During the three months ended March 31, 2023, there were no such transfers.

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:

During the three and six months ended June 30, 2023, there were no such transfers.

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(In thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets

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(Level 2) Significant Unobservable Inputs

March 31, 2023

June 30, 2023

Financial Assets

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cash and due from banks, interest bearing deposits with other banks, short-term FHLB borrowings and securities sold under agreements to repurchase.

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:

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 June 30, 2023 and December 31, 2022:

Held-to-maturity debt securities :

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The fair value approach considers market-driven variables including credit related factors and reflects an “exit price” as defined in ASC Topic 820.

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Deposit liabilities :

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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.

(In thousands) January 31, 2023

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Initially Measured Measurement As Adjusted

(In thousands) January 31, 2023 Period Adjustments January 31, 2023

Cash and cash equivalents $ 141,680 $ — $ 141,680

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Goodwill 248,091 4,288 252,379

BOLI 55,071 — 55,071

Other Assets 74,232 1,256 75,488

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The acquisition of Professional resulted in the addition of $ 45.5 million in allowance for credit losses, including the $ 18.9 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.

Included within the $ 18.9 million initial PCD allowance is $ 5.5 million recorded as a measurement period adjustment during the three months ended June 30, 2023, reflecting information obtained by the Company relating to events or circumstances existing at the acquisition date.

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The Company believes the deposits assumed in the acquisition have an intangible value.

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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.

(In thousands) October 7, 2022

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Initially Measured Measurement As Adjusted

(In thousands) October 7, 2022 Period Adjustments October 7, 2022

Cash and cash equivalents $ 41,001 $ — $ 41,001

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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.

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Acquisition of Drummond Banking Company.

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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.

(In thousands) October 7, 2022

Initially Measured Measurement As Adjusted

(In thousands) October 7, 2022 Period Adjustments October 7, 2022

Cash and cash equivalents $ 31,805 $ — $ 31,805

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The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date.

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October 7, 2022

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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.

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As part of the BBFC acquisition, options were granted to replace outstanding BBFC options.

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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:

(In thousands) January 3, 2022

(In thousands) (In thousands)

Book balance of loans at acquisition $ 714

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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.

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Acquisition of Sabal Palm Bancorp, Inc.

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Total liabilities $ 400,146

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The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date.

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Acquisition Costs

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.

Acquisition costs included in the Company's income statement for the three months ended June 30, 2023, and 2022 were $ 15.6 million and $ 3.0 million, respectively.

Acquisition costs included in the Company’s income statement for the six months ended June 30, 2023, and 2022 were $ 33.2 million and $ 9.7 million, respectively.

Pro-Forma Information

Pro-forma data as of March 31, 2023 and 2022 present information as if the acquisition of Professional occurred at the beginning of 2022.

Pro-forma data as of June 30, 2023 and 2022 present information as if the acquisition of Professional occurred at the beginning of 2022.

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.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands, except per share data) 2023 2022 2023 2022

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EPS - diluted 0.37 0.65 0.80 0.59

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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.

What changed 10-Q

Item 1. Financial Statements