What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-08 compared with 2023-08-09 · 230 added, 265 removed, 586 unchanged (46% of the section changed)

3 unchanged sentences

Such discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and the related notes included in this report.

The emphasis of this discussion will be on the three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022 for the consolidated statements of income.

For the consolidated balance sheets, the emphasis of this discussion will be the balances as of June 30, 2023 compared to December 31, 2022.

The emphasis of this discussion will be on the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022 for the consolidated statements of income.

For the consolidated balance sheets, the emphasis of this discussion will be the balances as of September 30, 2023 compared to December 31, 2022.

This discussion and analysis contain statements that may be considered “forward-looking statements” as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

14 unchanged sentences

• Changes in retail distribution strategies, customer preferences and behavior generally and as a result of economic factors, including heightened inflation;

Table of Content s

• Changes in the availability and cost of credit and capital in the financial markets;

• Changes in the prices, values and sales volumes of residential and commercial real estate;

• Changes in the prices, values and sales volumes of residential and commercial real estate, especially as they relate to the value of collateral supporting the Company’s loans;

• The Company’s concentration in commercial real estate loans and in real estate collateral in Florida;

• Seacoast's ability to comply with any regulatory requirements;

• The effects of problems encountered by other financial institutions that adversely affect Seacoast or the banking industry;

• The effects of problems encountered by other financial institutions that adversely affect Seacoast or the banking industry, including bank failures;

• Inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions;

9 unchanged sentences

• Reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy;

• The effects of war or other conflicts, including the impacts related to or resulting from Russia’s military action in Ukraine, acts of terrorism, natural disasters, including hurricanes in the Company's footprint, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions;

• The effects of war or other conflicts, including the impacts related to or resulting from Russia’s military action in Ukraine and the conflict in Israel and the surrounding region, acts of terrorism, natural disasters, including hurricanes in the Company's footprint, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions;

• Unexpected outcomes of and the costs associated with, existing or new litigation involving the Company;

4 unchanged sentences

• The failure of assumptions underlying the estimate of reserves for expected credit losses;

Table of Content s

• Risks related to environmental, social and governance ("ESG") matters, the scope and pace of which could alter Seacoast's reputation and shareholder, associate, customer and third-party affiliations;

• A deterioration of the credit rating for U.S.

long-term sovereign debt, actions that the U.S.

government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget;

• The risk that the regulatory environment may not be conducive to or may prohibit the consummation of future mergers and/or business combinations, may increase the length of time and amount of resources required to consummate such transactions, and may reduce the anticipated benefit;

• Other factors and risks described under “Risk Factors” herein and in any of the Company's subsequent reports filed with the SEC and available on its website at www.sec.gov.

6 unchanged sentences

Full integration and system conversion activities, including the consolidation of five branches in the South Florida market, were completed in June 2023.

Merger related expense synergies are expected to be fully realized in the second half of 2023.

Results of Operations

For the second quarter of 2023, the Company reported net income of $31.2 million, or $0.37 per average diluted share, an increase of $19.4 million, or 164%, from the first quarter of 2023 and a decrease of $1.5 million, or 5%, compared to the second quarter of 2022.

The second quarter of 2023 included a $0.8 million reversal of provision for credit losses.

The prior quarter included $31.6 million of provision for credit losses, including $26.6 million for loans acquired in the Professional acquisition.

For the six months ended June 30, 2023, net income totaled $43.1 million, or $0.52 per average diluted share, a decrease of $10.3 million, or 19%, compared to the six months ended June 30, 2022.

Adjusted net income 1 for the second quarter of 2023 totaled $49.2 million, or $0.58 per average diluted share, an increase of $20.0 million, or 68%, compared to the first quarter of 2023 and an increase of $12.9 million, or 35%, compared to the second quarter of 2022.

For the six months ended June 30, 2023, adjusted net income 1 totaled $78.4 million, or $0.94 per average diluted share, compared to $63.4 million, or $1.03 per average diluted share for the six months ended June 30, 2022.

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

For the third quarter of 2023, the Company reported net income of $31.4 million, or $0.37 per average diluted share, an increase of $0.2 million, or 1%, from the second quarter of 2023 and an increase of $2.2 million, or 7%, compared to the third quarter of 2022.

For the nine months ended September 30, 2023, net income totaled $74.5 million, or $0.89 per average diluted share, a decrease of $8.1 million, or 10%, compared to the nine months ended September 30, 2022.

Adjusted net income 1 for the third quarter of 2023 totaled $39.7 million, or $0.46 per average diluted share, a decrease of $9.5 million, or 19%, compared to the second quarter of 2023 and an increase of $6.9 million, or 21%, compared to the third quarter of 2022.

For the nine months ended September 30, 2023, adjusted net income 1 totaled $118.2 million, or $1.41 per average diluted share, compared to $96.2 million, or $1.56 per average diluted share for the nine months ended September 30, 2022.

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

2023 2023 2022 2023 2022

9 unchanged sentences

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

Net Interest Income and Margin

Net interest income for the second quarter of 2023 totaled $127.0 million, a decrease of $4.2 million, or 3%, compared to the first quarter of 2023, and an increase of $45.3 million, or 56%, compared to the second quarter of 2022.

The decrease from prior quarter reflects a decline of $1.8 million in accretion of purchase discount on acquired loans, and the impact of increasing competition on deposit rates.

Net interest income for the third quarter of 2023 totaled $119.3 million, a decrease of $7.7 million, or 6% , compared to the second quarter of 2023, a nd an increase of $31.0 million, or 35%, c ompared to the third quarter of 2022.

The decrease from prior quarter reflects higher interest expense on deposits driven by higher rates and changes in product mix and was partially offset by higher interest income.

The increase from prior year is primarily due to higher balances and higher yields on securities and loans, partially offset by the higher cost of deposits.

Net interest margin (on a fully tax equivalent basis) 1 was 3.86% in the second quarter of 2023, compared to 4.31% in the first quarter of 2023, and 3.38% in the second quarter of 2022.

The decrease during the second quarter of 2023 compared to the prior quarter was driven by the continued effect of an inverted yield curve, a

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

Table of Content s

decline in accretion on acquired loans and rising deposit costs.

Compared to the first quarter of 2023, securities yields increased 28 basis points to 3.13% and loan yields increased three basis points to 5.89% during the second quarter of 2023.

The securities yield benefited 12 basis points from swaps initiated during the quarter.

The effect on net interest margin of accretion of purchase discounts on acquired loans were increases of 43 basis points in the second quarter of 2023, 53 basis points in the first quarter of 2023, and 12 basis points in the second quarter of 2022.

For the six months ended June 30, 2023, net interest margin (on a fully tax equivalent basis) 1 was 4.09%, compared to 3.32% for the six months ended June 30, 2022.

The yield on securities increased from 1.83% for the six months ended June 30, 2022 to 2.99% for the six months ended June 30, 2023, reflecting the impact of a higher interest rate environment.

The yield on total loans increased from 4.30% for the six months ended June 30, 2022 to 5.88% for the six months ended June 30, 2023, reflecting the impact of the higher interest rate environment.

Cost of deposits increased from six basis points for the six months ended June 30, 2022 to 1.09% for the six months ended June 30, 2023.

The effect on net interest margin of purchase discounts on acquired loans was an increase of 48 basis points for the six months ended June 30, 2023 compared to an increase of 14 basis points for the six months ended June 30, 2022.

The cost of deposits was 1.38% in the second quarter of 2023, compared to 77 basis points in the first quarter of 2023, and six basis points in the second quarter of 2022.

For the six months ended June 30, 2023, the cost of deposits was 1.09%, an increase of 103 basis points compared to the six months ended June 30, 2022.

The higher cost of deposits in the first half of 2023 reflects the impact of the Professional acquisition and an increasingly competitive market for deposits.

Net interest margin (on a fully tax equivalent basis) 1 was 3.57% in the third quarter of 2023, compared to 3.86% in the second quarter of 2023, and 3.67% in the third quarter of 2022.

The decrease during the third quarter of 2023 compared to the prior quarter was driven by the continued effect of an inverted yield curve and rising deposit costs.

Compared to the second quarter of 2023, securities yields increased 19 basis points to 3.32% and loan yields increased to 5.93% during the third quarter of 2023.

The effect on net interest margin of accretion of purchase discounts on acquired loans were increases of 44 basis points in the third quarter of 2023, 44 basis points in the second quarter of 2023, and 9 basis points in the third quarter of 2022.

The cost of deposits was 1.79% in the third quarter of 2023, compared to 1.38% in the second quarter of 2023, and nine basis points in the third quarter of 2022.

Notably impactful to deposit costs in the third quarter of 2023 was the Florida Bar Association’s IOTA program changes, enacted in May, requiring financial institutions to pay interest on these accounts at a specified spread to an index.

This contributed approximately five basis points to the increase in deposits costs in the third quarter of 2023.

For the nine months ended September 30, 2023, net interest margin (on a fully tax equivalent basis) 1 was 3.91%, compared to 3.44% for the nine months ended September 30, 2022.

The yield on securities increased from 2.02% for the nine months ended September 30, 2022 to 3.10% for the nine months ended September 30, 2023, and the yield on total loans increased from 4.35% for the nine months ended September 30, 2022 to 5.89% for the nine months ended September 30, 2023, each reflecting the impact of the higher interest rate environment.

The effect on net interest margin of purchase discounts on acquired loans was an increase of 47 basis points for the nine months ended September 30, 2023 compared to an increase of 12 basis points for the nine months ended September 30, 2022.

The cost of deposits increased from seven basis points for the nine months ended September 30, 2022 to 1.33% for the nine months ended September 30, 2023.

The higher cost of deposits during the year reflects the impact of the Professional acquisition and an increasingly competitive market for deposits.

The following table details the trend for net interest income and margin results (on a tax equivalent basis) 1 , the yield on earning assets and the rate paid on interest bearing liabilities for the periods specified:

3 unchanged sentences

Bearing Liabilities

Second quarter 2023 $ 127,153 3.86 % 5.30 % 2.26 %

First quarter 2023 131,351 4.31 % 5.19 % 1.43 %

Third quarter 2023 $ 119,505 3.57 % 5.38 % 2.76 %

Second quarter 2023 127,153 3.86 % 5.30 % 2.26 %

Six months ended June 30, 2023 258,504 4.09 % 5.26 % 1.87 %

Six months ended June 30, 2022 158,403 3.32 % 3.40 % 0.13 %

Third quarter 2022 88,399 3.67 % 3.80 % 0.22 %

Nine months ended September 30, 2023 378,009 3.91 % 5.30 % 2.19 %

Nine months ended September 30, 2022 246,803 3.44 % 3.53 % 0.16 %

1 On tax equivalent basis, a non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP.

Total average loans increased $0.7 billion, or 8%, for the second quarter of 2023 compared to the first quarter of 2023, and increased $3.6 billion, or 56%, from the second quarter of 2022.

The increase compared to the prior year quarter includes $3.2 billion in loans added in recent bank acquisitions.

Average loans as a percentage of average earning assets totaled 76% for the second quarter of 2023, 76% for the first quarter of 2023 and 67% for the second quarter of 2022.

Table of Content s

Total average loans decreased $57.6 million, or 0.6%, for the third quarter of 2023 compared to the second quarter of 2023, and increased $3.4 billion, or 52%, from the third quarter of 2022.

Average loans as a percentage of average earning assets totaled 76% for the third quarter of 2023, 76% for the second quarter of 2023 and 69% for the third quarter of 2022.

Loan production and late-stage pipelines (loans in underwriting and approval or approved and not yet closed) are detailed in the following table for the periods specified:

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

(In thousands) 2023 2023 2022 2023 2022

7 unchanged sentences

Consumer originations 76,531 97,184 133,093 284,317 342,887

Commercial originations during the second quarter of 2023 were $317.4 million, a decrease of $4.3 million, or 1%, compared to the first quarter of 2023, and a decrease of $144.5 million, or 31%, compared to the second quarter of 2022.

For the six months ended June 30, 2023, commercial originations were $639.0 million compared to $834.8 million for the six months ended June 30, 2022, a decrease of $195.8 million, or 23%.

Commercial pipelines were $217.6 million as of June 30, 2023, a decrease of 27% from $297.4 million at March 31, 2023, and a decrease of 54% from $476.7 million at June 30, 2022.

The declines were the result of the impact of higher rates and a continued selective approach on new credit facilities given a cautious economic outlook.

Residential loans originated for sale in the secondary market totaled $19.1 million in the second quarter of 2023, compared to $13.9 million in the first quarter of 2023 and $42.7 million in the second quarter of 2022.

For the six months ended June 30, 2023, residential loans originated for sale in the secondary market totaled $33.0 million compared to $93.9 million for the six months ended June 30, 2022, a decrease of $60.9 million, or 65%.

Residential saleable pipelines were $11.5 million as of June 30, 2023, compared to $6.6 million as of March 31, 2023 and $14.7 million as of June 30, 2022.

Residential loan production retained in the portfolio for the second quarter of 2023 was $85.3 million, compared to $90.1 million in the first quarter of 2023 and $103.0 million in the second quarter of 2022.

The pipeline of residential loans intended to be retained in the portfolio was $27.1 million as of June 30, 2023, compared to $48.4 million as of March 31, 2023, and $53.1 million as of June 30, 2022.

Consumer originations totaled $97.2 million during the second quarter of 2023, compared to $110.6 million in the first quarter of 2023 and $130.8 million in the second quarter of 2022.

For the six months ended June 30, 2023, consumer originations totaled $207.8 million compared to $214.0 million for the six months ended June 30, 2022, a decrease of $6.2 million, or 3%.

The consumer pipeline was $28.4 million as of June 30, 2023, compared to $38.7 million as of March 31, 2023 and $75.5 million at June 30, 2022.

Average investment securities decreased $27.1 million, or 1%, during the second quarter of 2023 compared to the first quarter of 2023, and were $148.9 million, or 6%, higher compared to the second quarter of 2022.

Average investment securities were $2.7 billion for the six months ended June 30, 2023, an increase of $217.1 million, or 9%, compared to the six months ended 2022.

Increases in the first half of 2023 include securities added through the Professional acquisition, partially offset by paydowns and maturities.

The cost of average interest-bearing liabilities increased 83 basis points in the second quarter of 2023 to 2.26% from 1.43% in the first quarter of 2023, and from 14 basis points in the second quarter of 2022.

The cost of average total deposits (including noninterest bearing demand deposits) was 1.38% in the second quarter of 2023, 77 basis points in the first quarter of 2023 and six basis points in the second quarter of 2022.

For the six months ended June 30, 2023, the cost of average total deposits (including noninterest bearing demand deposits) was 1.09% compared to six basis points for the six months ended June 30, 2022.

Table of Content s

During the second quarter of 2023, average transaction deposits (noninterest and interest bearing demand) increased $173.5 million, or 3%, compared to the first quarter of 2023 and increased $1.2 billion, or 20%, compared to the second quarter of 2022.

For the six months ended June 30, 2023, average transaction deposits increased $1.3 billion or 23%, compared to the six months ended June 30, 2022.

The Company’s deposit mix remains favorable, with 90% of average deposit balances comprised of savings, money market, and demand deposits for the six months ended June 30, 2023.

Average balances of sweep repurchase agreements with customers increased $71.3 million, or 41%, from the first quarter of 2023 and $124.4 million, or 103% compared to the second quarter of 2022.

The average rate on customer sweep repurchase accounts was 2.61% for the three months ended June 30, 2023, compared to 2.02% for the three months ended March 31, 2023, and 0.31% for the three months ended June 30, 2022.

For the six months ended June 30, 2023, the average balance was $209.4 million compared to an average balance of $119.3 million for the six months ended June 30, 2022.

The average rate on customer sweep repurchase accounts was 2.37% for the six months ended June 30, 2023, compared to 0.22% for the six months ended June 30, 2022.

Subordinated debt balances averaged $105.9 million in the second quarter of 2023, $98.4 million in the first quarter of 2023, and $71.7 million in the second quarter of 2022.

The average rate on subordinated debt for the second quarter of 2023 was 6.80%, an increase of 15 basis points compared to the first quarter of 2023 and an increase of 3.56% compared to the second quarter of 2022.

For the six months ended June 30, 2023, subordinated debt averaged $102.2 million, compared to $71.7 million for the six months ended June 30, 2022.

The average rate on subordinated debt for the six months ended June 30, 2023 was 6.73%, an increase of 3.88% compared to the six months ended June 30, 2022.

Commercial originations during the third quarter of 2023 were $106.5 million, a decrease of $210.9 million, or 66%, compared to the second quarter of 2023, and a decrease of $233.9 million, or 69%, compared to the third quarter of 2022.

For the nine months ended September 30, 2023, commercial originations were $745.5 million, compared to $1.2 billion for the nine months ended September 30, 2022, a decrease of $429.7 million, or 37%.

Lower originations were the result of the impact of higher rates and a continued selective approach on new credit facilities given a cautious economic outlook.

Commercial pipelines were $300.8 million as of September 30, 2023, an increase of 38% from $217.6 million at June 30, 2023, and a decrease of 43% from $530.4 million at September 30, 2022.

Residential loans originated for sale in the secondary market totaled $17.6 million in the third quarter of 2023, compared to $19.1 million in the second quarter of 2023 and $16.4 million in the third quarter of 2022.

For the nine months ended September 30, 2023, residential loans originated for sale in the secondary market totaled $50.6 million, compared to $110.3 million for the nine months ended September 30, 2022, a decrease of $59.6 million, or 54%.

Residential saleable pipelines were $6.8 million as of September 30, 2023, compared to $11.5 million as of June 30, 2023 and $6.6 million as of September 30, 2022.

Residential loan production retained in the portfolio for the third quarter of 2023 was $44.0 million, compared to $85.3 million in the second quarter of 2023 and $69.3 million in the third quarter of 2022.

The pipeline of residential loans intended to be retained in the portfolio was $20.9 million as of September 30, 2023, compared to $27.1 million as of June 30, 2023, and $60.7 million as of September 30, 2022.

Consumer originations totaled $76.5 million during the third quarter of 2023, compared to $97.2 million in the second quarter of 2023 and $133.1 million in the third quarter of 2022.

For the nine months ended September 30, 2023, consumer originations totaled $284.3 million compared to $342.9 million for the nine months ended September 30, 2022, a decrease of $58.6 million, or 17%.

The consumer pipeline was $24.5 million as of September 30, 2023, compared to $28.4 million as of June 30, 2023 and $43.7 million at September 30, 2022.

Average investment securities decreased $99.0 million, or 4%, during the third quarter of 2023 compared to the second quarter of 2023, and were $96.9 million, or 4%, lower compared to the third quarter of 2022.

Average investment securities were $2.7 billion for the nine months ended September 30, 2023, an increase of $111.3 million, or 4%, compared to the nine months ended 2022.

Increases during the year include securities added through the Professional acquisition, partially offset by paydowns and maturities.

The cost of average interest-bearing liabilities increased 50 basis points in the third quarter of 2023 to 2.76% from 2.26% in the second quarter of 2023, and from 22 basis points in the third quarter of 2022.

The cost of average total deposits (including noninterest bearing demand deposits) was 1.79% in the third quarter of 2023, 1.38% in the second quarter of 2023 and nine basis points in the third quarter of 2022.

For the nine months ended September 30, 2023, the cost of average total deposits (including noninterest bearing demand deposits) was 1.33% compared to seven basis points for the nine months ended September 30, 2022.

During the third quarter of 2023, average transaction deposits (noninterest and interest bearing demand) decreased $168.6 million, or 2%, compared to the second quarter of 2023 and increased $1.0 billion, or 18%, compared to the third quarter of 2022.

For the nine months ended September 30, 2023, average transaction deposits increased $1.2 billion, or 21%, compared to the nine months ended September 30, 2022.

The Company’s deposit mix remains favorable, with 89% of average deposit balances comprised of savings, money market, and demand deposits for the nine months ended September 30, 2023.

Average balances of sweep repurchase agreements with customers increased $82.9 million, or 34%, from the second quarter of 2023 and increased $215.8 million, or 193%, compared to the third quarter of 2022.

The average rate on customer sweep repurchase accounts was 3.48% for the third quarter of 2023, compared to 2.61% for the second quarter of 2023, and 1.10% for the third quarter of 2022.

For the nine months ended September 30, 2023, the average balance was $249.2 million compared to an average balance of $116.8 million for the nine months ended September 30, 2022.

The average rate on customer sweep repurchase accounts was 2.86% for the nine months ended September 30, 2023, compared to 0.51% for the nine months ended September 30, 2022.

Subordinated debt balances averaged $106.0 million in the third quarter of 2023, $105.9 million in the second quarter of 2023, and $71.8 million in the third quarter of 2022.

The average rate on subordinated debt for the third quarter of 2023 was 7.18%, an increase of 38 basis points compared to the second quarter of 2023 and an increase of 272 basis points compared to the third quarter of 2022.

For the nine months ended September 30, 2023, subordinated debt averaged $103.5 million, compared to $71.8 million for the nine months ended September 30, 2022.

The average rate on subordinated debt for the nine months ended September 30, 2023 was 6.88%, an increase of 349 basis points compared to the nine months ended September 30, 2022.

The subordinated debt is comprised of trust preferred securities issued by subsidiary trusts of the Company, and subordinated notes assumed in bank acquisitions in 2022 and 2023.

Table of Content s

The following tables detail average balances, net interest income and margin results (on a tax equivalent basis, a non-GAAP measure) for the periods presented:

Average Balances, Interest Income and Expenses, Yields and Rates 1

Second Quarter First Quarter Second Quarter

Third Quarter Second Quarter Third Quarter

Average Yield/ Average Yield/ Average Yield/

34 unchanged sentences

Interest expense as a % of earning assets 1.81 % 1.44 % 0.13 %

Table of Content s

Net interest income as a % of earning assets $ 119,505 3.57 % $ 127,153 3.86 % $ 88,399 3.67 %

3 unchanged sentences

Nonaccrual loans are included in loan balances.

Table of Content s

Average Balances, Interest Income and Expenses, Yields and Rates 1

41 unchanged sentences

Nonaccrual loans are included in loan balances.

Table of Content s

Noninterest Income

Noninterest income totaled $21.6 million for the second quarter of 2023, a decrease of $0.9 million, or 4%, compared to the first quarter of 2023 and an increase of $4.6 million, or 27%, from the second quarter of 2022.

Noninterest income totaled $44.0 million for the six months ended June 30, 2023, an increase of $11.7 million, or 36%, compared to the six months ended months ended June 30, 2022.

Noninterest income totaled $17.8 million for the third quarter of 2023, a decrease of $3.8 million, or 18%, compared to the second quarter of 2023 and an increase of $1.7 million, or 10%, from the third quarter of 2022.

Noninterest income totaled $61.8 million for the nine months ended September 30, 2023, an increase of $13.4 million, or 28%, compared to the nine months ended September 30, 2022.

Noninterest income is detailed as follows:

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

(In thousands) 2023 2023 2022 2023 2022

10 unchanged sentences

Total $ 17,793 $ 21,576 $ 16,103 $ 61,814 $ 48,440

Service charges on deposits were $4.6 million in the second quarter of 2023, $4.2 million in the first quarter of 2023 and $3.4 million in the second quarter of 2022.

For the six months ended June 30, 2023, service charges on deposits totaled $8.8 million, an increase of $2.6 million, or 42%, compared to the six months ended June 30, 2022.

Service charges on deposits were $4.6 million in both the second and third quarters of 2023 and $3.5 million in the third quarter of 2022.

For the nine months ended September 30, 2023, service charges on deposits totaled $13.5 million, an increase of $3.7 million, or 38%, compared to the nine months ended September 30, 2022.

Increases in fees primarily reflect the benefit of an expanded deposit base, including from acquisitions, and the continued benefit of the expansion of treasury management services to commercial customers.

Overdraft-related fees for both consumer and commercial accounts represent 35% of total service charges on deposits for the six months ended June 30, 2023, and 38% for the six months ended June 30, 2022.

Interchange income increased to $5.1 million for the second quarter of 2023, compared to $4.7 million for the first quarter of 2023, and $4.3 million for the second quarter of 2022.

For the six months ended June 30, 2023, interchange income totaled $9.8 million, an increase of $1.4 million, or 16%, compared to the six months ended June 30, 2022.

Beginning in the third quarter of 2023, the Company’s interchange income will be reduced by the requirements of the Durbin amendment, which became effective for the Company on July 1, 2023.

Wealth management income, including trust fees and brokerage commissions and fees, was $3.3 million in the second quarter of 2023, compared to $3.1 million for the first quarter of 2023 and $2.8 million for the second quarter of 2022.

Assets under management increased by $60.0 million in the second quarter of 2023, bringing total assets under management to $1.6 billion.

For the six months ended June 30, 2023, wealth management income totaled $6.4 million, an increase of $0.9 million, or 17%, compared to the six months ended June 30, 2022.

Overdraft-related fees for both consumer and commercial accounts represent 35% of total service charges on deposits for the nine months ended September 30, 2023, and 37% for the nine months ended September 30, 2022.

Interchange income decreased to $1.7 million for the third quarter of 2023, compared to $5.1 million for the second quarter of 2023, and $4.1 million for the third quarter of 2022.

For the nine months ended September 30, 2023, interchange income totaled $11.4 million, a decrease of $1.1 million, or 9%, compared to the nine months ended September 30, 2022.

The decrease in interchange income is due to the impact of the Durbin amendment, which became effective for the first time for the Company on July 1, 2023, limiting network interchange fees earned on debit card transactions.

Wealth management income, including trust fees and brokerage commissions and fees, was $3.1 million in the third quarter of 2023, compared to $3.3 million for the second quarter of 2023 and $2.7 million for the third quarter of 2022.

Assets under management increased by $0.7 million in the third quarter of 2023, bringing total assets under management to $1.6 billion.

For the nine months ended September 30, 2023, wealth management income totaled $9.5 million, an increase of $1.4 million, or 17%, compared to the nine months ended September 30, 2022.

The wealth management team continues to demonstrate notable success in building relationships.

Mortgage banking fees totaled $0.6 million in the second quarter of 2023, compared to $0.4 million the first quarter of 2023, and $0.9 million in the second quarter of 2022.

For the six months ended June 30, 2023, mortgage banking fees totaled $1.0 million, a decrease of $1.6 million, or 62%, compared to the six months ended June 30, 2022, reflecting lower saleable production due to significantly higher interest rates and limited housing inventory.

Insurance agency income increased $0.1 million, or 5%, compared to the first quarter of 2023 and totaled $1.2 million.

Mortgage banking fees totaled $0.4 million in the third quarter of 2023, compared to $0.6 million the second quarter of 2023, and $0.4 million in the third quarter of 2022.

For the nine months ended September 30, 2023, mortgage banking fees totaled $1.4 million, a decrease of $1.6 million, or 54%, compared to the nine months ended September 30, 2022, reflecting lower saleable production due to significantly higher interest rates and limited housing inventory.

Insurance agency income increased $22 thousand, or 2%, compared to the second quarter of 2023 and totaled $1.2 million.

The Company acquired a commercial insurance agency during the fourth quarter of 2022 in conjunction with the acquisition of Drummond, adding another source of noninterest income.

SBA gains were $0.2 million in the second quarter of 2023, compared to $0.3 million in the first quarter of 2023, and $0.5 million in the second quarter of 2022.

For the six months ended June 30, 2023, SBA gains totaled $0.6 million, a decrease of $0.1 million, or 9%, compared to the six months ended June 30, 2022.

Table of Content s

Bank owned life insurance (“BOLI”) income was $2.1 million for the second quarter of 2023, an increase of $0.2 million, or 8%, compared to the first quarter of 2023 and an increase of $0.7 million, or 53%, compared to the second quarter of 2022.

The increases are attributed to additions of $53.1 million in BOLI in the fourth quarter of 2022 and $55.1 million in the first quarter of 2023 from bank acquisitions.

BOLI income totaled $4.0 million for the six months ended June 30, 2023 and $2.7 million for the six months ended June 30, 2022.

Other income was $4.8 million in the second quarter of 2023, a decrease of $1.8 million quarter-over-quarter and an increase of $0.7 million year-over-year.

The decrease from prior quarter is primarily the result of BOLI death benefits of $2.1 million recognized in the prior quarter.

For the six months ended June 30, 2023, other income totaled $11.3 million, an increase of $4.2 million, or 59%, compared to the six months ended June 30, 2022.

Securities losses in the second quarter of 2023 totaled $0.2 million, resulting from mark to market adjustments on the Company’s CRA qualified mutual funds.

SBA gains were $0.6 million in the third quarter of 2023, compared to $0.2 million in the second quarter of 2023, and $0.1 million in the third quarter of 2022.

For the nine months ended September 30, 2023, SBA gains totaled $1.2 million, an increase of $0.4 million, or 61%, compared to the nine months ended September 30, 2022.

Bank owned life insurance (“BOLI”) income was $2.2 million for the third quarter of 2023, an increase of $0.1 million, or 6%, compared to the second quarter of 2023 and an increase of $0.8 million, or 61%, compared to the third quarter of 2022.

The increases compared to the prior year quarter are attributed to additions of $53.1 million in BOLI in the fourth quarter of 2022 and $55.1 million in the first quarter of 2023 from bank acquisitions.

BOLI income totaled $6.2 million for the nine months ended September 30, 2023 and $4.0 million for the nine months ended September 30, 2022.

Other income was $4.3 million in the third quarter of 2023, a decrease of $0.4 million compared to the second quarter of 2023, and an increase of $0.1 million, compared to the third quarter of 2022.

For the nine months ended September 30, 2023, other income totaled $15.6 million, an increase of $4.3 million, or 38%, compared to the nine months ended September 30, 2022.

The Company recognized losses from mark to market adjustments on its investments in CRA qualified mutual funds, totaling $0.4 million in the third quarter of 2023, $0.2 million in the second quarter of 2023, and $0.4 million in the third quarter of 2022.

Noninterest Expenses

Noninterest expense for the second quarter of 2023 totaled $107.9 million, an increase of $0.4 million, or 0.4%, compared to the first quarter of 2023, and an increase of $51.7 million, or 92%, from the second quarter of 2022.

For the six months ended June 30, 2023, noninterest expense totaled $215.3 million, an increase of $100.3 million, or 87%, compared to the six months ended June 30, 2022.

Noninterest expense for the third quarter of 2023 totaled $93.9 million, a decrease of $14.0 million, or 13%, compared to the second quarter of 2023, and an increase of $32.6 million, or 53%, from the third quarter of 2022.

For the nine months ended September 30, 2023, noninterest expense totaled $309.3 million, an increase of $132.8 million, or 75%, compared to the nine months ended September 30, 2022.

Noninterest expenses are detailed as follows:

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

(In thousands) 2023 2023 2022 2023 2022

13 unchanged sentences

Total $ 93,915 $ 107,865 $ 61,359 $ 309,255 $ 176,424

Salaries and wages totaled $45.2 million for the second quarter of 2023, $47.6 million for the first quarter of 2023, and $28.1 million for the second quarter of 2022.

The second quarter of 2023 reflects $1.6 million in merger-related expenses compared to $4.2 million in the first quarter of 2023.

For the six months ended June 30, 2023, salaries and wages totaled $92.8 million, an increase of $36.5 million, or 65%, compared to the six months ended June 30, 2022.

Excluding merger-related expenses, increases in 2023 are the result of the overall growth in the organization.

In the third quarter of 2023, the Company is continuing its focus on efficiency and streamlining operations, and in late July 2023, executed a reduction in the Company’s workforce by approximately 5%.

The Company will incur severance charges in a range of approximately $2.0 to $3.0 million in the third quarter of 2023.

The resulting lower compensation expense in the third quarter of 2023 will largely be offset by investments in marketing to drive low-cost deposit growth, and lower expense deferral associated with slowing loan originations.

The Company expects the full benefit of the reduction in workforce to materialize in the fourth quarter of 2023.

During the second quarter of 2023, employee benefit costs, which include costs associated with the Company's self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $7.5 million, a decrease of $1.1

Table of Content s

million, or 13%, compared to the first quarter of 2023, and an increase of $3.3 million, or 80%, compared to the second quarter of 2022.

The decrease from the first quarter of 2023 reflects higher seasonal payroll taxes impacting the first quarter of 2023.

For the six months ended June 30, 2023, employee benefit costs totaled $16.0 million, an increase of $6.4 million, or 66%, compared to the six months ended June 30, 2022.

Salaries and wages totaled $46.4 million for the third quarter of 2023, $45.2 million for the second quarter of 2023, and $28.4 million for the third quarter of 2022.

The Company completed a reduction in force in the third quarter of 2023, reducing headcount by 6%, and incurring $3.2 million in severance-related expenses.

For the nine months ended September 30, 2023, salaries and wages totaled $139.2 million, an increase of $54.5 million, or 64%, compared to the nine months ended September 30, 2022, reflecting the overall growth of the organization, including as a result of the acquisitions completed in the fourth quarter of 2022 and first quarter of 2023.

During the third quarter of 2023, employee benefit costs, which include costs associated with the Company's self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $7.2 million, a decrease of $0.3 million, or 4%, compared to the second quarter of 2023, and an increase of $3.1 million, or 77%, compared to the third quarter of 2022.

For the nine months ended September 30, 2023, employee benefit costs totaled $23.2 million, an increase of $9.5 million, or 69%, compared to the nine months ended September 30, 2022, reflecting the overall growth of the organization, including as a result of the acquisitions completed in the fourth quarter of 2022 and first quarter of 2023.

The Company utilizes third parties for its core data processing systems.

Ongoing data processing costs are directly related to the number of transactions processed and the negotiated rates associated with those transactions.

Outsourced data processing costs totaled $20.2 million, $14.6 million, and $6.0 million for the second quarter of 2023, first quarter of 2023, and second quarter of 2022, respectively.

For the six months ended June 30, 2023 and June 30, 2022, outsourced data processing costs totaled $34.8 million and $12.2 million, respectively.

Higher expenses in the second quarter of 2023 included $10.9 million in direct acquisition-related costs, including termination penalties on acquired technology contracts upon system conversion, compared to $6.6 million in the first quarter of 2023, and $0.4 million in the second quarter of 2022.

Telephone and data line expenditures, including electronic communications with customers and between branch and customer support locations and personnel, as well as with third-party data processors, were $1.5 million, $1.1 million, and $0.9 million for the second quarter of 2023, first quarter of 2023, and second quarter of 2022, respectively.

For the six months ended June 30, 2023, telephone and data line expenditures totaled $2.6 million, an increase of $1.0 million, or 58%, compared to the six months ended June 30, 2022.

The increases during 2023 reflect the expansion of the branch footprint.

Total occupancy, furniture and equipment expenses were $9.4 million in the second quarter of 2023, $9.2 million in the first quarter of 2023, and $5.6 million in the second quarter of 2022.

For the six months ended June 30, 2023, total occupancy, furniture and equipment expenses totaled $18.6 million, an increase of $7.6 million, or 68%, compared to the six months ended June 30, 2022.

Outsourced data processing costs totaled $8.7 million, $20.2 million, and $5.4 million for the third quarter of 2023, second quarter of 2023, and third quarter of 2022, respectively.

The second quarter of 2023 included $10.9 million in direct acquisition-related costs, including termination penalties on acquired technology contracts upon system conversion.

For the nine months ended September 30, 2023 and September 30, 2022, outsourced data processing costs totaled $43.5 million and $17.6 million, respectively.

Telephone and data line expenditures, including electronic communications with customers and between branch and customer support locations and personnel, as well as with third-party data processors, were $1.4 million, $1.5 million, and $1.0 million for the third quarter of 2023, second quarter of 2023, and third quarter of 2022, respectively.

For the nine months ended September 30, 2023, telephone and data line expenditures totaled $4.0 million, an increase of $1.4 million, or 53%, compared to the nine months ended September 30, 2022.

The increases during 2023 reflect the expansion of the Company’s branch footprint.

Total occupancy, furniture and equipment expenses were $8.4 million in the third quarter of 2023, $9.4 million in the second quarter of 2023, and $6.5 million in the third quarter of 2022.

For the nine months ended September 30, 2023, total occupancy, furniture and equipment expenses totaled $27.0 million, an increase of $9.5 million, or 54%, compared to the nine months ended September 30, 2022.

Year over year increases reflect the expansion of the Company’s footprint across Florida.

Marketing expenses totaled $2.0 million in the second quarter of 2023, $2.2 million in the first quarter of 2023, and $1.9 million in the second quarter of 2022.

For the six months ended June 30, 2023, marketing expenses totaled $4.3 million, an increase of $1.2 million, or 40%, compared to the six months ended June 30, 2022.

Legal and professional fees for the second quarter of 2023 were $4.1 million, a decrease of $3.4 million, or 46%, compared to the first quarter of 2023, and an increase of $1.1 million, or 38%, compared to the second quarter of 2022.

Acquisition-related expenses were $1.7 million in the second quarter of 2023, $4.8 million in the first quarter of 2023, and $1.4 million in the second quarter of 2022.

For the six months ended June 30, 2023, legal and professional fees totaled $11.5 million, an increase of $3.8 million, or 49%, compared to the six months ended June 30, 2022.

Acquisition-related expenses were $6.5 million for the six months ended June 30, 2023 and $4.3 million for the six months ended June 30, 2022.

FDIC assessments were $2.1 million for the second quarter of 2023, $1.4 million in the first quarter of 2023, and $0.7 million in the second quarter of 2022.

For the six months ended June 30, 2023, FDIC assessments totaled $3.6 million compared to $1.5 million for the six months ended June 30, 2022.

Marketing expenses totaled $1.9 million in the third quarter of 2023, $2.0 million in the second quarter of 2023, and $1.5 million in the third quarter of 2022.

For the nine months ended September 30, 2023, marketing expenses totaled $6.2 million, an increase of $1.6 million, or 36%, compared to the nine months ended September 30, 2022.

Additional investments in marketing are expected in the fourth quarter of 2023 focused on supporting deposit growth.

Legal and professional fees for the third quarter of 2023 were $2.7 million, a decrease of $1.4 million, or 34%, compared to the second quarter of 2023, and a decrease of $1.1 million, or 29%, compared to the third quarter of 2022.

There were no acquisition-related expenses in the third quarter of 2023, $1.7 million in the second quarter of 2023, and $1.8 million in the third quarter of 2022.

For the nine months ended September 30, 2023, legal and professional fees totaled $14.2 million, an increase of $2.7 million, or 23%, compared to the nine months ended September 30, 2022.

Acquisition-related expenses were $6.5 million for the nine months ended September 30, 2023 and $6.1 million for the nine months ended September 30, 2022.

FDIC assessments were $2.3 million for the third quarter of 2023, $2.1 million in the second quarter of 2023, and $0.8 million in the third quarter of 2022.

For the nine months ended September 30, 2023, FDIC assessments totaled $5.8 million compared to $2.2 million for the nine months ended September 30, 2022.

The increases reflect deposit growth from acquisitions in the fourth quarter of 2022 and first quarter of 2023.

Amortization of intangibles increased by $0.9 million compared to the first quarter of 2023 and $6.2 million compared to the second quarter of 2022.

For the six months ended June 30, 2023, amortization of intangibles totaled $14.4 million compared to $2.9 million for the six months ended June 30, 2022.

Amortization of intangibles decreased by $0.2 million compared to the second quarter of 2023 and increased $6.0 million compared to the third quarter of 2022.

For the nine months ended September 30, 2023, amortization of intangibles totaled $21.8 million compared to $4.3 million for the nine months ended September 30, 2022.

The acquisitions in the fourth quarter of 2022 and first quarter of 2023 added $110.6 million in core deposit intangible assets, which are amortized using an accelerated amortization method.

Foreclosed property expense and net gain/loss on sale was net a gain of $0.1 million in the second of 2023, a net loss of $0.2 million in the first quarter of 2023, and a net gain of $1.0 million in the second quarter of 2022.

No adjustments were recorded to the reserve for potential credit losses on unfunded lending commitments in the second quarter of 2023.

This compares to $1.2 million in provision recorded during the first quarter of 2023, primarily associated with the acquisition of Professional, and no adjustments recorded for the second quarter of 2022.

Other expenses totaled $8.3 million, $7.1 million and $5.3 million for the second quarter of 2023, the first quarter of 2023 and the second quarter of 2022, respectively.

For the six months ended June 30, 2023, other expense totaled $15.4 million, an increase of $5.3 million, or 53%, compared to the six months ended June 30, 2022.

Increases reflect higher costs in general business and customer support activities resulting from growth in the customer base and the expanded branch footprint, and to maintaining parallel activities and processes prior to the conversion of Professional in June 2023.

For the second quarter of 2023, the efficiency ratio, defined as noninterest expense less amortization of intangibles and gains, losses, and expenses on foreclosed properties divided by net operating revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains and losses), was 67.34%, compared to 65.43% for the first

Table of Content s

quarter of 2023 and 56.22% for the second quarter of 2022.

For the six months ended June 30, 2023, the efficiency ratio was 66.37%, compared to 59.17% for the six months ended June 30, 2022.

The adjusted efficiency ratio 1 was 56.44% in the second quarter of 2023, compared to 53.10% in the first quarter of 2023 and 53.15% in the second quarter of 2022.

The increase from first quarter 2023 primarily reflects the impact of higher deposit rates on net interest income during the period.

For the six months ended June 30, 2023, the adjusted efficiency ratio 1 was 54.76%, compared to 53.97% for the six months ended June 30, 2022.

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

Foreclosed property expense and net gain/loss on sale was a net loss of $0.3 million in the third quarter of 2023, a net gain of $0.1 million in the second quarter of 2023, and a net loss of $9 thousand in the third quarter of 2022.

No adjustments were recorded to the reserve for potential credit losses on unfunded lending commitments in the third or second quarters of 2023.

This compares to $1.0 million in provision recorded during the third quarter of 2022, reflecting adjustments to the modeled results for changes in economic factors.

Other expenses totaled $7.2 million, $8.3 million and $7.5 million for the third quarter of 2023, the second quarter of 2023 and the third quarter of 2022, respectively.

For the nine months ended September 30, 2023, other expense totaled $22.6 million, an increase of $5.0 million, or 29%, compared to the nine months ended September 30, 2022.

Increases year-over-year reflect higher costs in general business and customer support activities resulting from growth in the customer base and the expanded branch footprint, and to maintaining parallel activities and processes prior to the conversion of Professional in June 2023.

For the third quarter of 2023, the efficiency ratio, defined as noninterest expense less amortization of intangibles and gains, losses, and expenses on foreclosed properties divided by net operating revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains and losses), was 62.60%, compared to 67.34% for the second quarter of 2023 and 57.13% for the third quarter of 2022.

For the nine months ended September 30, 2023, the efficiency ratio was 65.19%, compared to 58.45% for the nine months ended September 30, 2022.

The adjusted efficiency ratio 1 was 60.19% in the third quarter of 2023, compared to 56.44% in the second quarter of 2023 and 53.28% in the third quarter of 2022.

The increase in the adjusted efficiency ratio in the third quarter of 2023 reflects the impact of higher deposit rates, including the first full quarter of the Florida Bar Association's change to rates required to be paid on certain trust accounts, and the first time impact of the Durbin Amendment on interchange income.

For the nine months ended September 30, 2023, the adjusted efficiency ratio 1 was 56.47%, compared to 53.73% for the nine months ended September 30, 2022.

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

(In thousands, except ratios) 2023 2023 2022 2023 2022

20 unchanged sentences

Provision for Credit Losses

The provision for credit losses was a net benefit of $0.8 million for the second quarter of 2023, compared to provision expense of $31.6 million for the first quarter of 2023, and provision expense of $0.8 million for the second quarter of 2022.

The first quarter of 2023 included $26.6 million day one provision recorded in conjunction with the Professional acquisition.

For the second quarter of 2023, the Company recorded tax expense of $10.2 million, compared to $2.7 million in the first quarter of 2023 and $8.9 million in the second quarter of 2022, with an effective tax rate of 24.6%, 18.6% and 21.3%, respectively.

The first quarter of 2023 included a discrete benefit of $0.6 million related to the BOLI distribution which, combined with lower overall pre-tax income, resulted in a lower effective tax rate.

Tax expense related to stock-based compensation totaled $0.3 million in the second quarter of 2023, compared to a tax benefit of $0.2 million in the first quarter of 2023, and a tax benefit of $0.4 million in the second quarter of 2022.

For the six months ended June 30, 2023, tax expense totaled $12.9 million, a decrease of $1.8 million, or 12%, compared to the six months ended June 30, 2022 due to lower pre-tax income.

Table of Content s

The provision for credit losses was $2.7 million for the third quarter of 2023, compared to a net benefit of $0.8 million for the second quarter of 2023, and provision expense of $4.7 million for the third quarter of 2022.

For the third quarter of 2023, the Company recorded tax expense of $9.1 million, compared to $10.2 million in the second quarter of 2023 and $9.1 million in the third quarter of 2022.

For the nine months ended September 30, 2023, tax expense totaled $22.0 million, a decrease of $1.9 million, or 8%, compared to the nine months ended September 30, 2022 due to lower pre-tax income.

Explanation of Certain Unaudited Non-GAAP Financial Measures

7 unchanged sentences

These disclosures should not be considered an alternative to GAAP.

Table of Content s

Reconciliation of Non-GAAP Measures

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

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

25 unchanged sentences

Adjusted Noninterest Expense $ 83,153 $ 83,992 $ 56,899 $ 249,070 $ 159,267

Foreclosed property expense and net gain (loss) on sale 57 (195) 968 (138) 1,132

Provision for credit losses on unfunded commitments — — (1,015) (1,239) (1,157)

Foreclosed property expense and net gain (loss) on sale (274) 57 (9) (412) 1,123

Net Adjusted Noninterest Expense $ 82,879 $ 84,049 $ 55,875 $ 247,419 $ 159,233

7 unchanged sentences

Net interest income including FTE adjustment 119,505 127,153 88,399 378,009 246,802

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

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

Noninterest income 17,793 21,576 16,103 61,814 48,440

Noninterest expense 93,915 107,865 61,359 309,255 176,424

Table of Content s

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

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

Pre-Tax Pre-Provision Earnings 43,383 40,864 43,143 130,568 118,818

36 unchanged sentences

$ 104,662 $ 112,573 $ 86,157 $ 332,644 $ 238,123

Table of Content s

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

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

4 unchanged sentences

3.13 % 3.42 % 3.58 % 3.44 % 3.32 %

Loan Interest Income 2

$ 148,432 $ 135,341 $ 69,388 $ 283,773 $ 136,586

Tax equivalent adjustment to loans (167) (173) (81) (340) (161)

Loan interest income excluding tax equivalent adjustment $ 148,265 $ 135,168 $ 69,307 $ 283,433 $ 136,425

Securities Interest Income 2

2 unchanged sentences

Securities interest income excluding tax equivalent adjustment $ 21,498 $ 20,995 $ 15,792 $ 61,842 $ 38,499

Loan Interest Income 2

$ 150,048 $ 148,432 $ 74,050 $ 433,821 $ 210,636

Tax equivalent adjustment to loans (177) (167) (80) (517) (241)

Loan interest income excluding tax equivalent adjustment $ 149,871 $ 148,265 $ 73,970 $ 433,304 $ 210,395

Net Interest Income 2

$ 119,505 $ 127,153 $ 88,399 $ 378,009 $ 246,802

Tax equivalent adjustments to loans (167) (173) (81) (340) (161)

Tax equivalent adjustments to securities (22) (23) (35) (71) (108)

Tax equivalent adjustments to loans (177) (167) (80) (517) (241)

Net interest income excluding tax equivalent adjustments $ 119,306 $ 126,963 $ 88,284 $ 377,421 $ 246,453

3 unchanged sentences

Financial Condition

Total assets as of June 30, 2023 were $15.0 billion, an increase of $2.9 billion, or 24%, from December 31, 2022.

Total assets as of September 30, 2023 were $14.8 billion, an increase of $2.7 billion, or 22%, from December 31, 2022.

The increase primarily reflects the acquisition of Professional on January 31, 2023, which added $2.7 billion in assets.

Information related to yields, maturities, carrying values and fair value of the Company’s debt securities is set forth in “Note 3 – Securities” of the Company’s condensed consolidated financial statements.

At June 30, 2023, the Company had $1.9 billion in securities available-for-sale and $707.8 million in securities held-to-maturity.

The Company's total debt securities portfolio increased $4.9 million from December 31, 2022.

During the six months ended June 30, 2023, there were $22.4 million of debt securities purchased, $167.1 million acquired through the acquisition of Professional and $149.6 million in paydowns and maturities over the same period.

At September 30, 2023, the Company had $1.8 billion in securities available-for-sale and $691.4 million in securities held-to-maturity.

The Company's total debt securities portfolio decreased $85.9 million from December 31, 2022.

During the nine months ended September 30, 2023, there were $28.1 million of debt securities purchased, $167.1 million acquired through the acquisition of Professional and $212.2 million in paydowns and maturities over the same period.

$22.1 million of the securities acquired from Professional were immediately sold with no gain or loss recognized.

Debt securities generally return principal and interest monthly.

The modified duration of the available-for-sale portfolio at June 30, 2023 was 4.1, compared to 3.7 at December 31, 2022.

At June 30, 2023, available-for-sale securities had gross unrealized losses of $253.4 million and gross unrealized gains of $0.9 million, compared to gross unrealized losses of $248.7 million and gross unrealized gains of $1.1 million at December 31, 2022.

The modified duration of the available-for-sale portfolio at September 30, 2023 was 4.1, compared to 3.7 at December 31, 2022.

At September 30, 2023, available-for-sale securities had gross unrealized losses of $287.3 million and gross unrealized gains of $0.7 million, compared to gross unrealized losses of $248.7 million and gross unrealized gains of $1.1 million at December 31, 2022.

The changes were the result of changes in benchmark interest rates and product spreads during the period.

The Company assesses securities in an unrealized loss position on a quarterly basis.

As of June 30, 2023, the Company expected to recover the entire amortized cost basis of these securities, and therefore, no allowance for credit losses was recorded.

As of September 30, 2023, the Company expected to recover the entire amortized cost basis of these securities, and therefore, no allowance for credit losses was recorded.

The credit quality of the Company’s securities holdings is primarily investment grade.

Treasury and U.S.

Treasury securities, obligations of U.S.

government agencies, and obligations of U.S.

government sponsored entities totaled $2.1 billion, or 81%, of the total portfolio.

Table of Content s

The portfolio includes $139.1 million, with a fair value of $125.2 million, in private label residential and commercial mortgage-backed securities and collateralized mortgage obligations.

6 unchanged sentences

Collateralized loan obligations are special purpose vehicles that purchase first lien broadly syndicated corporate loans while providing support to senior tranche investors.

As of June 30, 2023, all of the Company’s collateralized loan obligations were in AAA/AA tranches with average credit support of 32%.

As of September 30, 2023, all of the Company’s collateralized loan obligations were in AAA/AA tranches with weighted average credit support of 33%.

The Company utilizes credit models with assumptions of loan level defaults, recoveries, and prepayments to evaluate each security for potential credit losses.

3 unchanged sentences

The Company has significant liquidity and available borrowing capacity through other sources if needed, and has the intent and ability to hold these investments to maturity.

At June 30, 2023, the Company has determined that all debt securities in an unrealized loss position are the result of both broad investment type spreads and the current interest rate environment.

At September 30, 2023, the Company has determined that all debt securities in an unrealized loss position are the result of both broad investment type spreads and the current interest rate environment.

Management believes that each investment will recover any price depreciation over its holding period as the debt securities move to maturity, and management has the intent and ability to hold these investments to maturity if necessary.

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

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

Loan Portfolio

Loans, net of unearned income and excluding the allowance for credit losses, were $10.1 billion at June 30, 2023, a $2.0 billion increase from December 31, 2022.

The increase during the first half of 2023 included $2.0 billion added through the Professional acquisition.

Loans, net of unearned income and excluding the allowance for credit losses, were $10.0 billion at September 30, 2023, a $1.9 billion, or 23%, increase from December 31, 2022.

The increase during 2023 included $2.0 billion added through the Professional acquisition.

The Company remains committed to sound risk management procedures.

Portfolio diversification in terms of asset mix, industry, and loan type has been an important element of the Company's lending strategy.

The average loan size is only $278 thousand, and the average commercial loan size is only $685 thousand at June 30, 2023, reflecting the Company's longtime focus on granularity and on creating valuable customer relationships.

The average loan size is only $306 thousand, and the average commercial loan size is only $683 thousand at September 30, 2023, reflecting the Company's longtime focus on granularity and on creating valuable customer relationships.

Lending policies contain guardrails that pertain to lending by type of collateral and purpose, along with limits regarding loan concentrations and the principal amount of loans.

The Company's exposure to commercial real estate lending remains well below regulatory limits (see “Loan Concentrations”).

The following table details loan portfolio composition at June 30, 2023 and December 31, 2022 for portfolio loans, purchased credit deteriorated (“PCD”) and loans purchased which are not considered purchased credit deteriorated (“Non-PCD”) as defined in Note 4-Loans.

June 30, 2023

The following table details loan portfolio composition at September 30, 2023 and December 31, 2022 for portfolio loans, purchased credit deteriorated (“PCD”) and loans purchased which are not considered purchased credit deteriorated (“Non-PCD”) as defined in Note 4-Loans.

September 30, 2023

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

7 unchanged sentences

Totals $ 6,343,122 $ 3,386,233 $ 281,831 $ 10,011,186

Table of Content s

December 31, 2022

8 unchanged sentences

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

The amortized cost basis of loans included net deferred costs of $37.6 million at June 30, 2023 and $35.1 million 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 amortized cost basis of loans included net deferred costs of $38.1 million at September 30, 2023 and $35.1 million at December 31, 2022.

At September 30, 2023, the remaining fair value adjustments on acquired loans were $186.5 million, or 4.9%, 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.

The following table details commercial real estate - non-owner occupied loans.

June 30, 2023

September 30, 2023

(In thousands) Amortized Cost Basis % of Total Loans

7 unchanged sentences

Total commercial real estate - non-owner occupied $ 3,285,974 32.82 %

Commercial real estate (“CRE”) non-owner occupied loans increased by $780.4 million in the six months ended June 30, 2023, totaling $3.4 billion at June 30, 2023 compared to $2.6 billion at December 31, 2022.

Commercial real estate (“CRE”) non-owner occupied loans increased by $696.2 million in the nine months ended September 30, 2023, totaling $3.3 billion at September 30, 2023 compared to $2.6 billion at December 31, 2022.

Non-owner occupied CRE loans are collateralized by properties where the source of repayment is typically from the sale or lease of the property.

Within the non-owner occupied CRE portfolio, the largest segment is Retail properties, which totaled approximately $1.1 billion at June 30, 2023.

Within the non-owner occupied CRE portfolio, the largest segment is Retail properties, which totaled approximately $1.0 billion at September 30, 2023.

This segment targets grocery or credit tenant-anchored shopping plazas, single credit tenant retail buildings, smaller outparcels, and other small retail units.

Loans in this segment have a weighted average loan to value of 52% and an average loan size of $2.0 million.

The second-largest segment in the non-owner occupied CRE portfolio is Office properties, which totaled approximately $625.6 million at June 30, 2023.

The second-largest segment in the non-owner occupied CRE portfolio is Office properties, which totaled approximately $595.4 million at September 30, 2023.

This segment targets low to mid-rise suburban offices and is broadly diversified across many types of professional services.

1 unchanged sentence

Loans in this segment have a weighted average loan to value of 55% and an average loan size of $1.6 million.

Owner-occupied CRE loans increased by $191.1 million in the six months ended June 30, 2023 to $1.7 billion.

Owner-occupied CRE loans increased by $197.6 million in the nine months ended September 30, 2023 to $1.7 billion.

Owner-occupied CRE is used by the owner, where the primary source of repayment is the cash flow from business operations housed within the property.

Commercial and financial loans are extended to commercial customers for working capital, physical asset expansion, asset acquisition or other business purposes.

Balances increased from December 31, 2022 by $262.3 million, or 19%, totaling $1.6 billion at June 30, 2023, largely attributed to the Professional acquisition.

Table of Content s

Residential mortgage loans increased $546.8 million to $2.4 billion as of June 30, 2023.

Included in the balance as of June 30, 2023, were $1.1 billion of fixed rate mortgages, $817.2 million of adjustable rate mortgages and $481.2 million in primarily floating rate home equity lines of credit (“HELOCs”), compared to $964.3 million, $402.3 million and $482.9 million, respectively, at December 31, 2022.

Balances increased from December 31, 2022 by $235.4 million, or 17%, totaling $1.6 billion at September 30, 2023, largely attributed to the Professional acquisition.

Residential mortgage loans increased $569.4 million to $2.4 billion during the nine months ended September 30, 2023.

Included in the balance as of September 30, 2023, were $1.0 billion of fixed rate mortgages, $840.1 million of adjustable rate mortgages and $478.6 million in primarily floating rate home equity lines of credit (“HELOCs”), compared to $964.3 million, $402.3 million and $482.9 million, respectively, at December 31, 2022.

The increases from December 31, 2022 include approximately $483.6 million acquired through the Professional acquisition.

1 unchanged sentence

Substantially all residential originations have been underwritten to conventional loan agency standards, including loan balances that exceed agency value limitations.

The average LTV of our HELOC portfolio is 62%, with 31% of the loans being in first lien position at June 30, 2023, compared to an average LTV of 69%, with 31% of the portfolio being in the first lien position at December 31, 2022.

The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $14.5 million, or 5%, to total $272.1 million at June 30, 2023, compared to $286.6 million at December 31, 2022.

At June 30, 2023, the Company had unfunded commitments to extend credit of $4.2 billion, compared to $2.8 billion at December 31, 2022.

The average LTV of our HELOC portfolio is 63%, with 31% of the loans being in first lien position at September 30, 2023, compared to an average LTV of 69%, with 31% of the portfolio being in the first lien position at December 31, 2022.

The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $38.0 million, or 13%, to total $248.5 million at September 30, 2023, compared to $286.6 million at December 31, 2022.

At September 30, 2023, the Company had unfunded commitments to extend credit of $3.9 billion, compared to $2.8 billion at December 31, 2022.

Loan Concentrations

The Company has developed prudent guardrails to manage loan types that are most impacted by stressed market conditions to minimize credit risk concentration to capital.

Outstanding balances for commercial and CRE loans individually greater than $15 million totaled $628.3 million and represented 6% of the total portfolio at June 30, 2023.

The Company has developed guardrails to manage loan types that are most impacted by stressed market conditions to minimize credit risk concentration to capital.

Outstanding balances for commercial and CRE loans individually greater than $15 million totaled $574.9 million and represented 6% of the total portfolio at September 30, 2023.

Concentrations in total construction and land development loans and total CRE loans are maintained well below regulatory limits.

Construction and land development and CRE loan concentrations as a percentage of subsidiary bank total risk based capital were 52% and 256%, respectively, at June 30, 2023, compared to 45% and 230%, respectively, at December 31, 2022.

Construction and land development and CRE loan concentrations as a percentage of subsidiary bank total risk based capital were 51% and 248%, respectively, at September 30, 2023, compared to 45% and 230%, respectively, at December 31, 2022.

The increase was primarily the result of the acquisition of Professional Bank.

6 unchanged sentences

Nonperforming Loans, Troubled Borrower Modifications, Other Real Estate Owned and Credit Quality

Nonperforming assets (“NPAs”) at June 30, 2023 totaled $55.9 million, and were comprised of $48.3 million of nonaccrual loans, and $7.5 million of other real estate owned (“OREO”).

Compared to December 31, 2022, nonaccrual loans increased $19.5 million, primarily the result of the acquisition of Professional.

Nonperforming assets (“NPAs”) at September 30, 2023 totaled $48.7 million, and were comprised of $41.5 million of nonaccrual loans, and $7.2 million of other real estate owned (“OREO”).

Compared to December 31, 2022, nonaccrual loans increased $12.7 million, or 44%, including loans acquired from Professional.

The $4.9 million increase in OREO is the result of closures of three branch properties in the first quarter of 2023.

Overall, NPAs increased $24.7 million from $31.1 million as of December 31, 2022.

At June 30, 2023, approximately 49% of nonaccrual loans were secured with real estate.

Overall, NPAs increased $17.6 million, or 56%, from $31.1 million as of December 31, 2022.

At September 30, 2023, approximately 67% of nonaccrual loans were secured with real estate.

See the tables below for details about nonaccrual loans.

At June 30, 2023, nonaccrual loans reflected cumulative write downs of approximately $18.7 million, including reserves on individually evaluated loans.

Nonperforming loans to total loans outstanding at June 30, 2023 increased to 0.48% from 0.35% at December 31, 2022.

Nonperforming assets to total assets at June 30, 2023 increased to 0.37% from 0.26% at December 31, 2022.

Table of Content s

At September 30, 2023, nonaccrual loans reflected cumulative write downs of approximately $6.5 million, including reserves on individually evaluated loans.

Nonperforming loans to total loans outstanding at September 30, 2023 increased to 0.41% from 0.35% at December 31, 2022.

Nonperforming assets to total assets at September 30, 2023 increased to 0.33% from 0.26% at December 31, 2022.

The table below sets forth details related to nonaccrual loans.

June 30, 2023

September 30, 2023

Nonaccrual Loans

25 unchanged sentences

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

As of June 30, 2023, there were five loans totaling $0.9 million that were TBMs, which is considered immaterial.

As of September 30, 2023, there were eight loans totaling $2.2 million that were TBMs, which is considered immaterial.

Allowance for Credit Losses on Loans

2 unchanged sentences

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments.

During the six months ended June 30, 2023, the Company recorded provision expense of $30.8 million.

During the nine months ended September 30, 2023, the Company recorded provision expense of $33.5 million.

The provision expense included $26.6 million for loans acquired in the Professional acquisition.

The Company reported net charge-offs for the six months ended June 30, 2023 of $3.9 million and, for the four most recent quarters, net charge-offs averaged 0.06% of outstanding loans.

The ratio of allowance for credit losses to total loans was 1.58% at June 30, 2023, 1.40% at December 31, 2022, and 1.39% at June 30, 2022.

Table of Content s

The Company reported net charge-offs for the nine months ended September 30, 2023 of $16.6 million.

The ratio of allowance for credit losses to total loans was 1.49% at September 30, 2023, 1.40% at December 31, 2022, and 1.42% at September 30, 2022.

LIBOR Transition

3 unchanged sentences

The Company reviewed its LIBOR loan contracts and customer swap agreements to identify required remediation to support the transition away from LIBOR.

As of June 30, 2023, substantially all of these contracts include standardized fallback language or have been amended to new reference rates, which are predominantly SOFR-based.

As of June 30, 2023, substantially all of these contracts included standardized fallback language or were amended to new reference rates, which are predominantly SOFR-based.

The Company also invests in securities and has issued subordinated debt indexed to LIBOR which, as expected, have transitioned to SOFR-based reference rates or will transition on their next reset date in accordance with existing fallback provisions of the LIBOR Act.

The transition did not have a material impact on the Company’s financial position, and results and operations.

The transition did not have a material impact on the Company’s financial position or results of operations.

Cash and Cash Equivalents and Liquidity Risk Management

1 unchanged sentence

Liquidity planning and management are necessary to ensure the ability to fund operations cost effectively and to meet current and future potential obligations such as loan commitments and unexpected deposit outflows.

Funding sources include primarily customer-based deposits, collateral-backed borrowings, brokered deposits, cash flows from operations, cash flows from the loan and investment portfolios and asset sales, primarily secondary marketing for residential real estate mortgages and marine loans.

Cash flows from operations are a significant component of liquidity risk management and the Company considers both deposit maturities and the scheduled cash flows from loan and investment maturities and payments when managing risk.

Cash and cash equivalents, including interest bearing deposits, totaled $727.9 million at June 30, 2023, compared to $201.9 million at December 31, 2022.

Higher cash and cash equivalent balances at June 30, 2023 reflect the Company’s increased liquidity position strategy during the year.

Cash and cash equivalents, including interest bearing deposits, totaled $696.0 million at September 30, 2023, compared to $201.9 million at December 31, 2022.

Higher cash and cash equivalent balances at September 30, 2023 reflect the Company’s increased liquidity position strategy during the year.

Deposits are a primary source of liquidity.

The stability of this funding source is affected by numerous factors, including returns available to customers on alternative investments, the quality of customer service levels, perception of safety and competitive forces.

Uninsured deposits represented only 34% of overall deposit accounts at June 30, 2023.

Uninsured deposits represented only 34% of overall deposit accounts at September 30, 2023.

This includes public funds under the Florida Qualified Public Depository program, which provides loss protection to depositors beyond FDIC insurance limits.

3 unchanged sentences

The Company has liquidity sources as discussed below, including cash and lines of credit with the Federal Reserve and FHLB, that represent 158% of uninsured deposits, and 182% of uninsured and uncollateralized deposits.

In addition to $0.7 billion in cash and cash equivalents at June 30, 2023, the Company had $5.7 billion in available borrowing capacity, including $4.7 billion in available collateralized lines of credit, $0.7 billion of unpledged debt securities available as collateral for potential additional borrowings, and available unsecured lines of credit of $0.3 billion.

In addition to $696.0 million in cash and cash equivalents at September 30, 2023, the Company had $5.7 billion in available borrowing capacity, including $4.8 billion in available collateralized lines of credit, $0.6 billion of unpledged debt securities available as collateral for potential additional borrowings, and available unsecured lines of credit of $0.3 billion.

Included in available borrowing capacity is approximately $0.4 billion under the Federal Reserve's Bank Term Funding Program, which the Company has not utilized and does not plan to utilize.

The Company may also access funding by acquiring brokered deposits.

Brokered deposits at June 30, 2023, December 31, 2022, and June 30, 2022 totaled $591.5 million, $58.6 million, and $106.8 million, respectively.

Brokered deposits at September 30, 2023, December 31, 2022, and September 30, 2022 totaled $308.0 million, $58.6 million, and $81.8 million, respectively.

Contractual maturities for assets and liabilities are reviewed to meet current and expected future liquidity requirements.

2 unchanged sentences

The Company has traditionally relied upon dividends from Seacoast Bank and securities offerings to provide funds to pay the Company’s expenses and to service the Company’s debt.

During the second quarter of 2023, Seacoast Bank distributed $5.1 million to the Company and, at June 30, 2023, is eligible to distribute dividends to the Company of approximately $168.8

Table of Content s

During the third quarter of 2023, Seacoast Bank distributed $12.8 million to the Company and, at September 30, 2023, is eligible to distribute dividends to the Company of approximately $188.3

million without prior regulatory approval.

At June 30, 2023, the Company had cash and cash equivalents at the parent of approximately $117.9 million, compared to $111.8 million at December 31, 2022.

At September 30, 2023, the Company had cash and cash equivalents at the parent of approximately $115.0 million, compared to $111.8 million at December 31, 2022.

Deposits and Borrowings

Customer relationship funding is detailed in the following table for the periods specified:

June 30, December 31,

September 30, December 31,

(In thousands, except ratios) 2023 2022

11 unchanged sentences

Highlighting the Company's longstanding relationship-based strategy, the average tenure for a Seacoast customer is 9.7 years.

Total deposits increased $2.3 billion, or 23%, to $12.3 billion at June 30, 2023, compared to $10.0 billion at December 31, 2022.

Total deposits increased $2.1 billion, or 21%, to $12.1 billion at September 30, 2023, compared to $10.0 billion at December 31, 2022.

The increase primarily reflects the impact of the Professional acquisition, which added $2.1 billion in deposits during the first quarter of 2023.

Noninterest demand deposits represented 34% of total deposits at June 30, 2023 and 41% at December 31, 2022.

Transaction account balances (noninterest demand and interest-bearing demand) represented 57% of total deposits at June 30, 2023, compared to 64% at December 31, 2022.

Customer repurchase agreements totaled $290.2 million at June 30, 2023, increasing $118.1 million from December 31, 2022.

Noninterest demand deposits represented 32% of total deposits at September 30, 2023 and 41% at December 31, 2022.

Transaction account balances (noninterest demand and interest-bearing demand) represented 55% of total deposits at September 30, 2023, compared to 64% at December 31, 2022.

Customer repurchase agreements totaled $276.5 million at September 30, 2023, increasing $104.4 million, or 61%, from December 31, 2022.

Repurchase agreements are offered by Seacoast to select customers who wish to sweep excess balances on a daily basis for investment purposes.

At June 30, 2023 and December 31, 2022, borrowings included $72.1 million and $71.6 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company.

At September 30, 2023 and December 31, 2022, borrowings included $72.1 million and $71.9 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company.

On October 7, 2022, the Company acquired $12.3 million in subordinated debt through the acquisition of Apollo.

1 unchanged sentence

The debt was recorded at fair value, resulting in a $0.4 million premium that is being amortized into interest expense over the remaining term to maturity.

On January 31, 2023, the Company assumed subordinated debt in the acquisition of Professional having an outstanding principal amount of $25.0 million and estimated fair value of $21.1 million.

The acquired debt carries a fixed interest rate of 3.375% until 2027, then converts to a floating rate note until maturity in 2032.

The weighted average interest rate of outstanding subordinated debt was 6.73% and 2.85% for the six months ended June 30, 2023 and June 30, 2022, respectively.

Federal Home Loan Bank advances totaled $160.0 million at June 30, 2023 with a weighted average interest rate of 3.64%, compared to $150.0 million at December 31, 2022 with a weighted average interest rate of 3.42%.

Table of Content s

On January 31, 2023, the Company acquired $25.0 million in subordinated debt through the acquisition of Professional.

Contractual interest is paid on a semiannual basis at a fixed interest rate of 3.375% until January 30, 2027, at which point the rate converts to a 3-month SOFR rate plus 203 basis points paid quarterly.

The debt was recorded at fair value, resulting in a $3.9 million discount that is being accreted into interest expense over the remaining term to maturity.

The weighted average interest rate of outstanding subordinated debt was 6.88% and 3.40% for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Federal Home Loan Bank advances totaled $110.0 million at September 30, 2023 with a weighted average interest rate of 2.88%, compared to $150.0 million at December 31, 2022 with a weighted average interest rate of 3.42%.

Off-Balance Sheet Transactions

8 unchanged sentences

These instruments are not recorded on the balance sheet until funds are advanced under the commitment.

Unfunded commitments to extend credit were $4.2 billion at June 30, 2023 and $2.8 billion at December 31, 2022.

Unfunded commitments to extend credit were $3.9 billion at September 30, 2023 and $2.8 billion at December 31, 2022.

Capital Resources

The Company’s equity capital at June 30, 2023 increased $446.3 million, or 28%, from December 31, 2022 to $2.1 billion.

Changes in equity included increases from net income of $43.1 million, the issuance of $421.0 million in equity in connection with the Professional acquisition, and an increase in accumulated other comprehensive income of $1.2 million, partially offset by the issuance of common stock dividends totaling $29.9 million.

The ratio of shareholders’ equity to period end total assets was 13.66% and 13.24% at June 30, 2023 and December 31, 2022, respectively.

The ratio of tangible shareholders’ equity to tangible assets was 8.53% and 9.08% at June 30, 2023 and December 31, 2022, respectively.

The Company’s equity capital at September 30, 2023 increased $440.6 million, or 27%, from December 31, 2022 to $2.0 billion.

Changes in equity included increases in net income of $74.5 million and the issuance of $421.0 million in equity in connection with the Professional acquisition, partially offset by the issuance of common stock dividends totaling $45.2 million and a decrease in accumulated other comprehensive income of $24.2 million.

The ratio of shareholders’ equity to period end total assets was 13.82% and 13.24% at September 30, 2023 and December 31, 2022, respectively.

The ratio of tangible shareholders’ equity to tangible assets was 8.68% and 9.08% at September 30, 2023 and December 31, 2022, respectively.

The decrease in the tangible common equity ratio was due to growth in the balance sheet from the Professional acquisition.

Changes in the value of held-to-maturity securities are not reflected under GAAP;

however, illustratively, if all held-to-maturity securities were presented at fair value, the tangible common equity ratio would have been 7.87% at June 30, 2023.

Activity in shareholders’ equity for the six months ended June 30, 2023 and 2022 follows:

however, illustratively, if all held-to-maturity securities were presented at fair value, the tangible common equity ratio would have been 7.89% at September 30, 2023.

Activity in shareholders’ equity for the nine months ended September 30, 2023 and 2022 follows:

(In thousands) 2023 2022

2 unchanged sentences

Net income 74,490 82,580

Common stock issued for stock options 5,040 3,442

Common stock transactions related to stock based employee benefit plans 4,316 —

Issuance of common stock and conversion of options pursuant to acquisitions 421,042 94,067

3 unchanged sentences

Repurchase of common stock (45) —

Ending balance at June 30, 2023 and 2022

Ending balance at September 30, 2023 and 2022

$ 2,048,394 $ 1,287,802

3 unchanged sentences

The capital measures are not necessarily comparable to similar capital measures that may be presented by other companies and Seacoast does not nor should investors consider such non-GAAP financial measures in isolation from, or as a substitute for GAAP financial information (see “Note 8 – Equity Capital”).

Table of Content s

June 30, 2023 Seacoast

September 30, 2023 Seacoast

(Consolidated) Seacoast

5 unchanged sentences

1 For subsidiary bank only.

The Company’s total risk-based capital ratio was 14.70% at June 30, 2023, a decrease from 15.79% at December 31, 2022, primarily due to growth including the acquisition of Professional.

At June 30, 2023, the Bank’s leverage ratio (Tier 1 capital to adjusted total assets) was 9.87%, well above the minimum to be well-capitalized under regulatory guidelines.

The Company’s total risk-based capital ratio was 15.09% at September 30, 2023, a decrease from 15.79% at December 31, 2022, primarily due to growth including the acquisition of Professional.

At September 30, 2023, the Bank’s leverage ratio (Tier 1 capital to adjusted total assets) was 10.05%, well above the minimum to be well-capitalized under regulatory guidelines.

The Company and Seacoast Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.

17 unchanged sentences

For regulatory purposes, the trust preferred securities are added to the Company’s tangible common shareholders’ equity to calculate Tier 1 capital.

Table of Content s

Critical Accounting Policies and Estimates

23 unchanged sentences

The analysis of the impact on net interest income over a twelve-month period is subjected to instantaneous changes in market rates and is monitored on a quarterly basis.

The following table presents the ALCO simulation model's projected impact of a change in interest rates on the projected baseline net interest income for the 12 month period beginning July 1, 2023, holding all balances on the balance sheet static.

The following table presents the ALCO simulation model's projected impact of a change in interest rates on the projected baseline net interest income for the 12 month period beginning October 1, 2023, holding all balances on the balance sheet static.

This change in interest rates assumes parallel shifts in the yield curve and does not consider changes in the slope of the yield curve.

In particular, the steepening or inversion of the yield curve as well as gradually changing interest rate changes could result in different outcomes when compared to the parallel shifts contemplated below.

Table of Content s

% Change in Projected Baseline

2 unchanged sentences

+2.00% (7.0)%

+1.00% (3.6)%

-2.00% (0.3%)

-3.00% (1.3%)

The computations of interest rate risk do not necessarily include certain actions management may undertake to manage this risk in response to changes in interest rates.

10 unchanged sentences

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 2. Management’s Discussion and Analysis