What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 195 added, 143 removed, 813 unchanged (29% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended March 31,

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

(In thousands, except per share data) 2024 2023 2024 2023

20 unchanged sentences

22,228 21,752 42,496 44,090

Securities gains, net 229 107

Securities (losses) gains, net ( 44 ) ( 176 ) 185 ( 69 )

Total Noninterest Income 22,184 21,576 42,681 44,021

10 unchanged sentences

Other real estate owned expense and net (gain) loss on sale ( 109 ) ( 57 ) ( 135 ) 138

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Provision for credit losses on unfunded commitments 251 — 501 1,239

11 unchanged sentences

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In thousands) Three Months Ended March 31,

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

2024 2023 2024 2023

Net Income $ 30,244 $ 31,249 $ 56,250 $ 43,076

Other comprehensive income (loss):

Unrealized (losses) gains on available-for-sale securities, net of tax benefit of $ 1.6 million and tax expense of $ 5.9 million for the three months ended March 31, 2024 and March 31, 2023, respectively

Unrealized losses on available-for-sale securities, net of tax benefit of $ 1.2 million and $ 3.7 million for the three and six months ended June 30, 2024, respectively, and net of tax benefit of $ 7.1 million and $ 1.2 million for the three and six months ended June 30, 2023, respectively

$ ( 3,579 ) $ ( 22,215 ) $ ( 11,495 ) $ ( 3,699 )

Amortization of unrealized gains on securities transferred to held-to-maturity, net of tax benefit of $ 3 thousand for each of the three months ended March 31, 2024 and March 31, 2023

Amortization of unrealized gains on securities transferred to held-to-maturity, net of tax benefit of $ 4 thousand and $ 7 thousand for the three and six months ended June 30, 2024, respectively, and net of tax benefit of $ 3 thousand and $ 6 thousand for the three and six months ended June 30, 2023, respectively

( 10 ) ( 11 ) ( 21 ) ( 21 )

Reclassification adjustment for losses (gains) included in net income, net of tax benefit of $ 1.0 million and tax expense of $ 1 thousand for the three months ended March 31, 2024 and March 31, 2023, respectively

Unrealized gains on derivatives designated as fair value hedges, net of reclassifications to income, net of tax expense of $ 0.4 million for the three months ended March 31, 2024

Unrealized gains on derivatives designated as cash flow hedges, net of reclassifications to income, net of tax expense of $ 33 thousand for the three months ended March 31, 2023

Reclassification adjustment for losses (gains) included in net income, net of tax benefit of $ 1.0 million and tax expense of $ 1 thousand for the six months ended June 30, 2024 and June 30, 2023, respectively

— — 2,806 ( 4 )

Unrealized (losses) gains on derivatives designated as fair value hedges, net of reclassifications to income, net of tax benefit of $ 0.2 million and tax expense of $ 0.2 million for the three and six months ended June 30, 2024, respectively, and net of tax expense of $ 1.6 million for the three and six months ended June 30, 2023, respectively

( 465 ) 4,732 578 4,732

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

Total other comprehensive (loss) income $ ( 4,054 ) $ ( 17,391 ) $ ( 8,132 ) $ 1,209

1 unchanged sentence

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

March 31, December 31,

June 30, December 31,

(In thousands, except share data) 2024 2023

5 unchanged sentences

Securities available-for-sale (at fair value) 1,967,204 1,836,020

Securities held-to-maturity (fair value $ 540.2 million at March 31, 2024 and $ 558.4 million at December 31, 2023)

Securities held-to-maturity (fair value $ 527.3 million at June 30, 2024 and $ 558.4 million at December 31, 2023)

658,055 680,313

Total debt securities 2,625,259 2,516,333

Loans held for sale (at fair value) 9,475 4,391

Loans held for sale 5,975 4,391

Loans 10,038,508 10,062,940

10 unchanged sentences

Deposits $ 12,116,118 $ 11,776,935

Securities sold under agreements to repurchase, maturing within 30 days 326,732 374,573

Securities sold under agreements to repurchase 262,103 374,573

Federal Home Loan Bank (“FHLB”) borrowings

4 unchanged sentences

Shareholders’ Equity

Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 85,555,007 and outstanding 84,935,054 at March 31, 2024, and authorized 120,000,000 , issued 85,480,183 and outstanding 84,861,498 shares at December 31, 2023

Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 86,003,198 and outstanding 85,299,154 at June 30, 2024, and authorized 120,000,000 , issued 85,480,183 and outstanding 84,861,498 shares at December 31, 2023

Additional paid-in-capital 1,815,800 1,808,883

8 unchanged sentences

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2024 2023

11 unchanged sentences

Deferred income taxes 6,933 ( 9,439 )

Gains on sale of securities ( 229 ) ( 5 )

Gain on securities ( 185 ) ( 69 )

Gains on sale of loans ( 3,435 ) ( 1,828 )

10 unchanged sentences

Purchases of debt securities available-for-sale ( 376,726 ) ( 22,402 )

Maturities of time deposits with other banks 989 —

Maturities and redemptions of time deposits with other banks 1,483 249

Purchases of time deposits with other banks ( 3,482 ) —

Net new loans and principal repayments 12,219 53,434

Proceeds from the sale of loans held for investment 10,905 —

Proceeds from sale of other real estate owned 2,654 294

6 unchanged sentences

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2024 2023

2 unchanged sentences

Net (decrease) increase in repurchase agreements ( 112,470 ) 118,127

Repayments of FHLB borrowings ( 50,000 ) —

Proceeds from FHLB borrowings 110,000 90,000

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

Repayments of FHLB borrowings with original maturities of more than three months ( 160,000 ) ( 75,000 )

Proceeds from FHLB borrowings with original maturities of more than three months 290,000 110,000

Stock based employee benefit plans ( 298 ) 3,731

Repurchase of common stock ( 880 ) ( 45 )

Dividends paid ( 30,750 ) ( 29,852 )

11 unchanged sentences

Transfers from bank premises to other real estate owned 883 5,455

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

See notes to unaudited consolidated financial statements.

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SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

7 unchanged sentences

(In thousands) Shares Amount Total

Balance at March 31, 2024

84,935 $ 8,494 $ 1,811,941 $ 478,017 $ ( 16,746 ) $ ( 163,956 ) $ 2,117,750

Comprehensive income (loss) — — — 30,244 — ( 4,054 ) 26,190

Stock based compensation expense — — 3,888 — — — 3,888

Common stock transactions related to stock based employee benefit plans 404 36 ( 29 ) — ( 1,118 ) — ( 1,111 )

Repurchase of common stock ( 40 ) — — — ( 880 ) — ( 880 )

Dividends on common stock ($ 0.18 per share)

— — — ( 15,456 ) — — ( 15,456 )

Three months ended June 30, 2024 364 36 3,859 14,788 ( 1,998 ) ( 4,054 ) 12,631

Balance at June 30, 2024

85,299 $ 8,530 $ 1,815,800 $ 492,805 $ ( 18,744 ) $ ( 168,010 ) $ 2,130,381

Common Stock Paid-in

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss)

(In thousands) Shares Amount Total

Balance at December 31, 2023

84,861 $ 8,486 $ 1,808,883 $ 467,305 $ ( 16,710 ) $ ( 159,878 ) $ 2,108,086

Comprehensive income (loss) — — — 56,250 — ( 8,132 ) 48,118

1 unchanged sentence

Common stock transactions related to stock based employee benefit plans 478 44 812 — ( 1,154 ) — ( 298 )

Repurchase of common stock ( 40 ) — — — ( 880 ) — ( 880 )

Dividends on common stock ($ 0.36 per share)

— — — ( 30,750 ) — — ( 30,750 )

Three months ended March 31, 2024 74 8 3,058 10,712 ( 36 ) ( 4,078 ) 9,664

Six months ended June 30, 2024 438 44 6,917 25,500 ( 2,034 ) ( 8,132 ) 22,295

Balance at June 30, 2024

85,299 $ 8,530 $ 1,815,800 $ 492,805 $ ( 18,744 ) $ ( 168,010 ) $ 2,130,381

Common Stock Paid-in

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss)

(In thousands) Shares Amount Total

Balance at March 31, 2023

84,609 $ 8,461 $ 1,803,898 $ 421,271 $ ( 13,113 ) $ ( 169,433 ) $ 2,051,084

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

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

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

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

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

Dividends on common stock ($ 0.18 per share)

— — — ( 15,433 ) — — ( 15,433 )

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

Balance at June 30, 2023

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

Common Stock Paid-in

7 unchanged sentences

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

Comprehensive income — — — 11,827 — 18,600 30,427

Comprehensive income (loss) — — — 43,076 — 1,209 44,285

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

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

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

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

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

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

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

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

Dividends on common stock ($ 0.35 per share)

— — — ( 29,852 ) — — ( 29,852 )

Three months ended March 31, 2023 12,991 1,299 426,096 ( 2,592 ) ( 94 ) 18,600 443,309

Balance at March 31, 2023

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

Balance at June 30, 2023

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

See notes to unaudited consolidated financial statements.

T a b l e o f C o n t e n t s

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

9 unchanged sentences

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

Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other period.

Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other period.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

15 unchanged sentences

Diluted earnings per share are based on the

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weighted-average number of common shares outstanding during each period, plus common share equivalents, calculated for share-based awards outstanding using the treasury stock method.

For the three months ended March 31, 2024, 327,006 options to purchase shares of the Company’s common stock were anti-dilutive.

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

Three Months Ended March 31,

For the three and six months ended June 30, 2024, options to purchase shares of the Company’s common stock totaling 327,805 and 328,166 , respectively, were anti-dilutive.

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

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

(Dollars in thousands, except per share data) 2024 2023 2024 2023

10 unchanged sentences

Note 3 – Securities

The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale (“AFS”) and held-to-maturity (“HTM”) at March 31, 2024 and December 31, 2023 are summarized as follows:

March 31, 2024

The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale (“AFS”) and held-to-maturity (“HTM”) at June 30, 2024 and December 31, 2023 are summarized as follows:

June 30, 2024

(In thousands) Amortized

18 unchanged sentences

Totals $ 658,055 $ — $ ( 130,728 ) $ 527,327

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December 31, 2023

20 unchanged sentences

Totals $ 680,313 $ — $ ( 121,954 ) $ 558,359

During the three months ended March 31, 2024, debt securities with a fair value of $ 86.8 million were sold, with gross losses of $ 3.8 million.

During the three months ended March 31, 2023, debt securities with a fair value of $ 22.1 million obtained in the acquisition of Professional Holding Corp.

During each of the three months ended June 30, 2024 and June 30, 2023, there were no sales of securities.

During the six months ended June 30, 2024, debt securities with a fair value of $ 86.8 million were sold, with gross losses of $ 3.8 million.

During the six months ended June 30, 2023, debt securities with a fair value of $ 22.1 million obtained in the acquisition of Professional Holding Corp.

(“Professional”) were sold.

No gain or loss was recognized on the sale.

There were $ 8.4 million in other sales of securities during the three months ended March 31, 2023, with gross gains of $ 24 thousand and gross losses of $ 19 thousand.

Included in “Securities gains, net” is a decrease of $ 0.1 million for the three months ended March 31, 2024, and an increase of $ 0.1 million for the three months ended March 31, 2023, in the value of investments in mutual funds that invest in Community Reinvestment Act (“CRA”)-qualified debt securities.

At March 31, 2024, debt securities with a fair value of $ 1.6 billion were pledged primarily as collateral for public deposits and secured borrowings.

The amortized cost and fair value of securities as of March 31, 2024, by contractual maturity, are shown below.

There were $ 8.4 million in other sales of securities during the six months ended June 30, 2023, with gross gains of $ 24 thousand and gross losses of $ 19 thousand.

Included in “Securities (losses) gains, net” are decreases of $ 44 thousand and $ 0.2 million, respectively, for the three and six months ended June 30, 2024, and decreases of $ 0.2 million and $ 0.1 million, respectively, for the three and six months ended June 30, 2023 in the value of investments in mutual funds that invest in Community Reinvestment Act (“CRA”)-qualified debt securities.

At June 30, 2024, debt securities with a fair value of $ 1.5 billion were pledged primarily as collateral for public deposits and secured borrowings.

The amortized cost and fair value of securities as of June 30, 2024, by contractual maturity, are shown below.

Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties.

Securities not due at a single maturity date are shown separately.

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Held-to-Maturity Available-for-Sale

16 unchanged sentences

The tables below indicate the fair value of AFS debt securities with unrealized losses for which no allowance for credit losses has been recorded.

March 31, 2024

June 30, 2024

Less Than 12 Months 12 Months or Longer Total 1

12 unchanged sentences

Obligations of state and political subdivisions 323 ( 9 ) 5,451 ( 1,353 ) 5,774 ( 1,362 )

Other debt securities — — 3,138 ( 14 ) 3,138 ( 14 )

Totals $ 331,366 $ ( 2,297 ) $ 1,230,724 $ ( 225,785 ) $ 1,562,090 $ ( 228,082 )

1 Comprised of 414 individual securities.

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December 31, 2023

16 unchanged sentences

1 Comprised of 504 individual securities.

At March 31, 2024, the Company had unrealized losses of $ 0.5 million on U.S.

At June 30, 2024, the Company had unrealized losses of $ 0.5 million on U.S.

Treasury securities and obligations of U.S.

6 unchanged sentences

Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.

Therefore, on March 31, 2024, no allowance for credit losses has been recorded.

At March 31, 2024, the Company had unrealized losses of $ 211.1 million on commercial and residential mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities having a fair value of $ 1.2 billion.

Therefore, on June 30, 2024, no allowance for credit losses has been recorded.

At June 30, 2024, the Company had unrealized losses of $ 215.5 million on commercial and residential mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities having a fair value of $ 1.3 billion.

These securities are either explicitly or implicitly guaranteed by the U.S.

2 unchanged sentences

Therefore, on March 31, 2024, no allowance for credit losses has been recorded.

At March 31, 2024, the Company had $ 10.5 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 116.0 million.

Therefore, on June 30, 2024, no allowance for credit losses has been recorded.

At June 30, 2024, the Company had $ 10.6 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 116.5 million.

The securities have a weighted average credit support of 22 %.

Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities.

Therefore, at March 31, 2024, no allowance for credit losses has been recorded.

At March 31, 2024, the Company had $ 0.1 million of unrealized losses in floating rate collateralized loan obligations (“CLOs”) having a fair value of $ 107.8 million.

Therefore, at June 30, 2024, no allowance for credit losses has been recorded.

At June 30, 2024, the Company had $ 0.1 million of unrealized losses in floating rate collateralized loan obligations (“CLOs”) having a fair value of $ 67.0 million.

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

As of March 31, 2024, all positions held by the Company are in AAA and AA tranches, with weighted average credit support of 41 % and 28 %, respectively.

As of June 30, 2024, all positions held by the Company are in AAA and AA tranches, with weighted average credit support of 38 % and 30 %, respectively.

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

Therefore, at March 31, 2024, no allowance for credit losses has been recorded.

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At March 31, 2024, the Company had $ 1.3 million of unrealized losses on municipal securities having a fair value of $ 6.0 million.

Therefore, at June 30, 2024, no allowance for credit losses has been recorded.

At June 30, 2024, the Company had $ 1.4 million of unrealized losses on municipal securities having a fair value of $ 5.8 million.

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

As a result, as of March 31, 2024, no allowance for credit losses has been recorded.

As a result, as of June 30, 2024, no allowance for credit losses has been recorded.

All HTM debt securities are issued by government-sponsored entities, which are either explicitly or implicitly guaranteed by the U.S.

1 unchanged sentence

The implied government guarantee of principal and interest payments, and the high credit rating of the HTM portfolio provide sufficient basis for the current expectation that there is no risk of loss if a default were to occur.

As a result, as of March 31, 2024, no allowance for credit losses has been recorded.

As a result, as of June 30, 2024, no allowance for credit losses has been recorded.

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

Included in Other Assets at March 31, 2024 is $ 70.6 million of FHLB and Federal Reserve Bank (“FRB”) stock stated at par value.

Included in Other Assets at June 30, 2024 and December 31, 2023 is $ 73.9 million and $ 67.7 million, respectively, of FHLB and Federal Reserve Bank (“FRB”) stock stated at par value.

The Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these cost method investment securities.

Accrued interest receivable on AFS and HTM debt securities of $ 8.5 million and $ 1.1 million, respectively, at March 31, 2024, and $ 7.9 million and $ 1.1 million, respectively, at December 31, 2023, is included in Other Assets.

Also included in Other Assets are investments in CRA-qualified mutual funds carried at fair value of $ 13.5 million and $ 13.6 million at March 31, 2024 and December 31, 2023, respectively.

Accrued interest receivable on AFS and HTM debt securities of $ 7.2 million and $ 0.2 million, respectively, at June 30, 2024, and $ 7.9 million and $ 1.1 million, respectively, at December 31, 2023, is included in Other Assets.

Also included in Other Assets are investments in CRA-qualified mutual funds carried at fair value of $ 13.5 million and $ 13.6 million at June 30, 2024 and December 31, 2023, respectively.

At December 31, 2023, the Company held 11,330 shares of Visa Class B stock.

During the six months ended June 30, 2024, the Company sold all of its Visa Class B stock, receiving net proceeds of $ 4.1 million.

The ownership of Visa stock was related to prior ownership in Visa’s network while Visa operated as a cooperative, and was recorded on the Company’s financial records at a zero basis.

During the three months ended March 31, 2024, the Company sold all of its Visa Class B stock, receiving net proceeds of $ 4.1 million.

Note 4 – Loans

19 unchanged sentences

The segment includes both installment loans and lines of credit which may be collateralized or non-collateralized.

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The following tables present net loan balances by segment for portfolio loans, purchased credit deteriorated loans (“PCD”) and loans purchased which are not considered credit deteriorated (“Non-PCD”) as of:

March 31, 2024

June 30, 2024

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

15 unchanged sentences

Totals $ 6,571,454 $ 3,227,169 $ 264,317 $ 10,062,940

The amortized cost basis of loans at March 31, 2024 included net deferred costs of $ 44.9 million.

At December 31, 2023, the amortized cost basis included net deferred costs of $ 43.1 million.

At March 31, 2024, the remaining fair value adjustments on acquired loans were $ 163.4 million, or 4.6 % of the outstanding acquired loan balances, compared to $ 174.0 million, or 4.8 % of the acquired loan balances at December 31, 2023.

The amortized cost basis of loans included net deferred costs of $ 45.5 million at June 30, 2024 and $ 43.1 million at December 31, 2023.

At June 30, 2024, the remaining fair value adjustments on acquired loans were $ 151.4 million, or 4.5 % of the outstanding acquired loan balances, compared to $ 174.0 million, or 4.8 % of the acquired loan balances at December 31, 2023.

The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis.

Accrued interest receivable is included within Other Assets and was $ 39.5 million and $ 39.4 million at March 31, 2024 and December 31, 2023, respectively.

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The following tables present the status of net loan balances as of March 31, 2024 and December 31, 2023.

March 31, 2024

During the three and six months ended June 30, 2024, $ 9.1 million in loans previously held for investment were sold, resulting in a net gain of $ 0.9 million.

Accrued interest receivable is included within Other Assets and was $ 40.1 million and $ 39.4 million at June 30, 2024 and December 31, 2023, respectively.

The following tables present the status of net loan balances as of June 30, 2024 and December 31, 2023.

June 30, 2024

(In thousands) Current Accruing

26 unchanged sentences

Total Loans $ 9,938,969 $ 30,146 $ 6,379 $ 3,087 $ 59,927 $ 10,038,508

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December 31, 2023

28 unchanged sentences

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income.

Interest subsequently received on such loans is accounted for under the cost-recovery method, whereby interest income is not recognized until the loan balance is reduced to zero.

Interest subsequently received on such loans is accounted for under the cost-recovery method, whereby interest income is not recognized until the loan balance is paid down to zero.

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

The Company recognized $ 0.2 million in interest income on nonaccrual loans during the three months ended March 31, 2024.

The Company recognized $ 0.1 million in interest income on nonaccrual loans during the three months ended March 31, 2023.

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The Company recognized $ 0.7 million and $ 0.3 million in interest income on nonaccrual loans during the three months ended June 30, 2024 and June 30, 2023, respectively.

The Company recognized $ 0.9 million and $ 0.4 million in interest income on nonaccrual loans during the six months ended June 30, 2024 and June 30, 2023, respectively.

The following tables present net balances of loans on nonaccrual status and the related allowance for credit losses, if any, as of:

March 31, 2024

June 30, 2024

(In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans Allowance for Credit Losses

24 unchanged sentences

Loans that have all the weaknesses inherent in those classified Substandard with the added characteristic that the weakness present makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

T a b l e o f C o n t e n t s

The following tables present the risk rating of loans and year-to-date 1 gross charge offs by year of origination as of:

March 31, 2024

June 30, 2024

(In thousands) 2024 2023 2022 2021 2020 Prior Revolving Total

48 unchanged sentences

Gross Charge Offs $ 208 $ 220 $ 4,412 $ 7,647 $ 297 $ 2,584 $ 685 $ 16,053

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1 Represents gross charge-offs for the six months ended June 30, 2024.

December 31, 2023

49 unchanged sentences

Gross Charge Offs $ 1,272 $ 2,027 $ 2,888 $ 3,413 $ 845 $ 13,409 $ 941 $ 24,795

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1 Represents gross charge-offs for the year ended December 31, 2023.

Troubled Borrower Modifications

The following table presents the amortized cost of troubled borrower modification (“TBM”) loans that were modified during the three months ended March 31, 2024.

There was one loan for $ 29 thousand modified as a TBM for the three months ended March 31, 2023.

March 31, 2024

The following table presents the amortized cost of troubled borrower modification (“TBM”) loans that were modified during the six months ended June 30, 2024.

There were five loans with an amortized cost of $ 0.9 million modified as a TBM during the six months ended June 30, 2023.

June 30, 2024

(In thousands) Rate Reduction or Rate Reduction with Term Extension

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Totals $ 6,594 $ 5,593 $ 12,187 0.12 %

1 At March 31, 2024, there were no unfunded lending related commitments associated with TBMs.

The following table presents the payment status of TBM loans that were modified in the twelve months prior to March 31, 2024.

March 31, 2024

1 At June 30, 2024, there were no unfunded lending related commitments associated with TBMs.

The following table presents the payment status of TBM loans that were modified in the twelve months prior to June 30, 2024.

June 30, 2024

(In thousands) Current Accruing

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Totals $ 4,281 $ 1,160 $ 304 $ 207 $ 14,409 $ 20,361

During the three months ended March 31, 2024, there were no subsequent defaults of TBMs modified in the prior 12 months.

T a b l e o f C o n t e n t s

TBM loans modified in the prior 12 months with a payment default during the six months ending June 30, 2024 were immaterial.

Note 5 – Allowance for Credit Losses

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(In thousands) Beginning

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Totals $ 146,669 $ 4,918 $ ( 11,425 ) $ 1,479 $ 141,641

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(In thousands) Beginning

Balance Allowance on PCD Loans Acquired During the Period 1

Losses Charge-

Offs Recoveries Ending

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

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

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

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

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

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

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

1 Amount represents a measurement period adjustment of a PCD loan acquired through the acquisition of Professional.

See Note 11 - Business Combinations.

Six Months Ended June 30, 2024

(In thousands) Beginning

Balance Provision

Losses Charge-

Offs Recoveries Ending

Construction and land development $ 8,637 $ ( 3,155 ) $ ( 1 ) $ 12 $ 5,493

Commercial real estate - owner occupied 5,529 6,350 ( 302 ) 5 11,582

Commercial real estate - non-owner occupied 48,288 ( 2,875 ) ( 103 ) 124 45,434

Residential real estate 39,016 7 ( 122 ) 308 39,209

Commercial and financial 34,343 3,205 ( 10,606 ) 1,487 28,429

Consumer 13,118 2,754 ( 4,919 ) 541 11,494

Totals $ 148,931 $ 6,286 $ ( 16,053 ) $ 2,477 $ 141,641

Six Months Ended June 30, 2023

(In thousands) Beginning Balance Allowance on PCD Loans Acquired During the Period Provision for Credit Losses Charge- Offs Recoveries Ending Balance

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The forecasts of future economic conditions are over the expected remaining life of the loan using economic forecasts that revert to long-term historical averages over time.

As of March 31, 2024 and December 31, 2023, the Company utilized a multiple scenario model comprised of a blend of Moody’s economic scenarios and considered the uncertainty associated with the assumptions in the scenarios, including continued actions taken by the Federal Reserve with regard to monetary policy and interest rates and the potential impact of those actions, the conflicts in the Middle East and Russia-Ukraine and the magnitude of the resulting market disruptions, and the potential impact of persistent high inflation on the economy.

Outcomes in any or all of these factors could differ from the scenarios utilized, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk that may not be captured in the quantitative model.

The following section discusses changes in the level of the allowance for credit losses for the three months ended March 31, 2024.

T a b l e o f C o n t e n t s

In the Construction and Land Development segment, the decrease in the allowance is due to a decrease in loan balances.

In this segment, the primary source of repayment is typically from proceeds of the sale, refinancing, or permanent financing of the underlying property;

As of June 30, 2024 and December 31, 2023, the Company utilized a multiple scenario model comprised of a blend of Moody’s economic scenarios and considered the uncertainty associated with the assumptions in the scenarios, including continued actions taken by the Federal Reserve with regard to monetary policy and interest rates and the potential impact of those actions.

Outcomes could differ from the scenarios utilized, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk that may not be captured in the quantitative model.

The following section discusses changes in the level of the allowance for credit losses for the three months ended June 30, 2024.

In the Construction and Land Development segment, the decrease in the allowance is due to an improvement in the forecast for macroeconomic factors and a decrease in loan balances.

In this segment, the primary source of repayment is typically from proceeds of the sale or permanent financing of the underlying property;

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

In the Commercial Real Estate - Owner-Occupied segment, the allowance increased due to continued uncertainty in connection with commercial real estate valuations broadly, and the collateral values associated with the underlying loans.

In the Commercial Real Estate - Owner-Occupied segment, the allowance increased due to continued uncertainty in connection with commercial real estate valuations broadly.

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

In the Commercial Real Estate - Non Owner-Occupied segment, the decrease in the allowance is primarily attributed to improvement in the forecast for macroeconomic factors, partially offset by higher loan balances.

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

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

Loan performance may be adversely affected by general economic conditions or conditions specific to the real estate market, including property types.

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

The decrease in the allowance is due to an improvement in the forecast for macroeconomic factors, partially offset by an increase in loan balances.

The increase in the allowance is due to an increase in loan balances.

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

In the Commercial and Financial segment, borrowers are primarily small to medium sized professional firms and other businesses, and loans are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners.

The decrease in the allowance is due to a decrease in loan balances.

The decrease in the allowance is due to charge-offs of previously established reserves on a small number of individually evaluated loans.

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

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

The increase in the allowance reflects an increase in expected losses, partly offset by a decrease in loan balances.

The decrease in the allowance is due to a decrease in loan balances.

Note 6 – Derivatives

Back-to-Back Swaps

Interest Rate Contracts

The Company offers interest rate swaps when requested by customers to allow them to hedge the risk of rising interest rates on their variable rate loans.

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Interest Rate Swaps Designated as Fair Value Hedges

In the second quarter of 2023, the Company entered into interest rate swap contracts to hedge the risk of changes in fair value of the AFS securities portfolio due to changes in the Secured Overnight Financing Rate (“SOFR”).

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

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

The Company has entered into interest rate swap contracts to hedge the risk of changes in fair value of the AFS securities portfolio due to changes in the Secured Overnight Financing Rate (“SOFR”).

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

The effect of changes in interest rates on the fair value of these derivative contracts is recognized in other comprehensive income.

These derivative instruments are primarily for risk management purposes.

For the three months ended March 31, 2024, the Company recognized gains through other comprehensive income of $ 4.0 million and reclassified gains of $ 61 thousand out of accumulated other comprehensive income into interest income.

The Company entered into interest rate swap contracts to hedge the risk of changes in the fair value of a pool of residential mortgages due to changes in SOFR.

For the three and six months ended June 30, 2024, the Company recognized, through other comprehensive income, net losses of $ 0.6 million and net gains of $ 0.8 million, respectively, and reclassified net gains of $ 0.1 million and $ 45 thousand, respectively, out of accumulated other comprehensive income into interest income.

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

The Company has entered into interest rate swap contracts to hedge the risk of changes in the fair value of a pool of residential mortgages due to changes in SOFR.

These fair values hedges utilize the portfolio layer method.

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

The changes in interest rates affecting the fair value of these derivative contracts are recognized in interest income.

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

The effect of changes in interest rates on the fair value of these derivative contracts is recognized in interest income.

These derivative instruments are primarily for risk management purposes.

For the three months ended March 31, 2024, the Company recognized gains through interest income of $ 0.4 million.

T a b l e o f C o n t e n t s

For the three and six months ended June 30, 2024, the Company recognized gains through interest income of $ 0.5 million and $ 0.9 million, respectively.

(In thousands) Notional Amount Fair Value Balance Sheet Category

March 31, 2024

Back-to-back swaps 1

June 30, 2024

Interest rate contracts 1

$ 686,682 $ 28,274 Other Assets and Other Liabilities

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December 31, 2023

Back-to-back swaps 1

Interest rate contracts 1

$ 605,735 $ 28,804 Other Assets and Other Liabilities

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Residential mortgage fair value hedges 200,000 75 Other Liabilities

1 Back-to-back swaps include risk participation agreements with notional amounts of $ 9.4 million and nominal fair value at March 31, 2024, and December 31, 2023, respectively.

1 Interest rate contracts include risk participation agreements with notional amounts of $ 18.4 million and $ 9.4 million at June 30, 2024, and December 31, 2023, respectively with nominal fair value in both periods.

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

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

(In thousands) March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

(In thousands) June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Securities available-for-sale 1

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614,394 633,693 897 44

1 At March 31, 2024, and December 31, 2023, the amortized cost basis and unallocated basis adjustments used in hedging relationships was $ 657.5 million and $ 680.6 million, respectively.

1 At June 30, 2024, and December 31, 2023, the amortized cost basis and unallocated basis adjustments used in hedging relationships was $ 638.7 million and $ 680.6 million, respectively.

Refer to “Note 3 - Securities” for a reconciliation of the amortized cost and fair value of AFS securities.

2 These amounts represent the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period.

At March 31, 2024 and December 31, 2023, the portfolio layer method was $ 200 million, of which $ 200 million was designated as hedged.

At June 30, 2024 and December 31, 2023, the portfolio layer method was $ 200 million, of which $ 200 million was designated as hedged.

Note 7 – Securities Sold Under Agreements to Repurchase

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

(In thousands) March 31, 2024 December 31, 2023

(In thousands) June 30, 2024 December 31, 2023

Fair value of pledged securities - overnight and continuous:

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Note 8 – Regulatory Capital

The Company is well-capitalized and at March 31, 2024, the Company and the Company’s principal banking subsidiary, Seacoast Bank, exceeded the Common Equity Tier 1 “(CET1)” capital ratio regulatory threshold of 6.5 % for well-capitalized institutions under the Basel III standardized transition approach, as well as risk-based and leverage ratio requirements for well-capitalized banks under the regulatory framework for prompt corrective action.

The Company is well-capitalized and at June 30, 2024, the Company and the Company’s principal banking subsidiary, Seacoast Bank, exceeded the Common Equity Tier 1 “(CET1)” capital ratio regulatory threshold of 6.5 % for well-capitalized institutions under the Basel III standardized transition approach, as well as risk-based and leverage ratio requirements for well-capitalized banks under the regulatory framework for prompt corrective action.

Note 9 – Contingent Liabilities

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

T a b l e o f C o n t e n t s

Note 10 – Fair Value

Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at March 31, 2024 and December 31, 2023 included:

Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at June 30, 2024 and December 31, 2023 included:

(In thousands) Fair Value

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(Level 2) Significant

At March 31, 2024

At June 30, 2024

Financial Assets

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2 Recurring fair value basis determined using observable market data.

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

4 Fair value is measured on a nonrecurring basis in accordance with ASC Topic 360, Property, Plant, and Equipment.

3 Fair value is measured on a nonrecurring basis.

4 Investment in shares of mutual funds that invest primarily in CRA-qualified debt securities, reported at fair value in Other Assets.

Recurring fair value basis is determined using market quotations.

Loans and other real estate owned:

Fair values of collateral-dependent real estate loans and other real estate owned are based on recent real estate appraisals less estimated costs of sale.

Evaluations may use either a single valuation approach or a combination of approaches, such as comparative sales, cost and/or income approach.

Adjustments to comparable sales may be made by an appraiser to reflect local market conditions or other economic factors and may result in changes in the fair value of an asset over time but none were made by management.

As such, the fair values of these loans and properties are considered Level 3 in the fair value hierarchy.

Collateral-dependent loans measured at fair value totaled $ 3.2 million with a specific reserve of $ 1.5 million at June 30, 2024, compared to $ 17.8 million with a specific reserve of $ 2.6 million at December 31, 2023.

For recurring fair value measurements, transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s monthly and/or quarterly valuation process.

During the three months ended March 31, 2024, there were no such transfers.

During the six months ended June 30, 2024, there were no such transfers.

For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see “Note 16 - Fair Value” of the Annual Report on Form 10-K for the year ended December 31, 2023.

T a b l e o f C o n t e n t s

The carrying amount and fair value of the Company’s other financial instruments that were not disclosed previously in the balance sheet and for which carrying amount is not fair value as of March 31, 2024 and December 31, 2023 is as follows:

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

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(Level 2) Significant Unobservable Inputs

March 31, 2024

June 30, 2024

Financial Assets

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cash and due from banks, interest bearing deposits with other banks, and securities sold under agreements to repurchase.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at March 31, 2024 and December 31, 2023:

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at June 30, 2024 and December 31, 2023:

Held-to-maturity debt securities :

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

T a b l e o f C o n t e n t s

Deposit liabilities :

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Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.

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

As part of the acquisition of Professional, options to purchase shares of Seacoast common stock were granted to replace outstanding Professional options.

These options were fully vested upon acquisition.

The full value of the replacement options, $ 10.3 million, was associated with pre-combination service and was therefore included in the calculation of the total purchase consideration.

T a b l e o f C o n t e n t s

Initially Measured Measurement As Adjusted

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Total acquired loans $ 2,139,222 $ 1,986,169

T a b l e o f C o n t e n t s

The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination:

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Acquisition Costs

Acquisition costs included in the Company's income statement for the three months ended March 31, 2023 were $ 17.5 million.

Acquisition costs included in the Company's income statement for the three and six months ended June 30, 2023 were $ 15.6 million and $ 33.2 million, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements