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Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-08-07 · 240 added, 241 removed, 535 unchanged (47% of the section changed)

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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, 2024 compared to the three and six months ended June 30, 2023 for the consolidated statements of income.

For the consolidated balance sheets, the emphasis of this discussion will be the balances as of June 30, 2024 compared to December 31, 2023.

The emphasis of this discussion will be on the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 for the consolidated statements of income.

For the consolidated balance sheets, the emphasis of this discussion will be the balances as of September 30, 2024 compared to December 31, 2023.

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.

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Certain statements made or incorporated by reference herein which are not statements of historical fact, including those under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein, are “forward-looking statements” within the meaning, and protections, of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, and intentions about future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s control, and which may cause the actual results, performance or achievements of Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) or its wholly-owned banking subsidiary, Seacoast National Bank (“Seacoast Bank”), to be materially different from those set forth in the forward-looking statements.

Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) or its wholly-owned banking subsidiary, Seacoast National Bank (“Seacoast Bank”), to be materially different from those set forth in the forward-looking statements.

All statements other than statements of historical fact could be forward-looking statements.

You can identify these forward-looking statements through the use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “support,” “indicate,”

“would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “further,” “plan,” “point to,” “project,” “could,” “intend,” “target” or other similar words and expressions of the future.

You can identify these forward-looking statements through the use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “support,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “further,” “plan,” “point to,” “project,” “could,” “intend,” “target” or other similar words and expressions of the future.

These forward-looking statements may not be realized due to a variety of factors, including, without limitation:

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• The risks of changes in interest rates on the level and composition of deposits (as well as the cost of, and competition for, deposits), loan demand, liquidity and the values of loan collateral, securities, and interest rate sensitive assets and liabilities;

• Interest rate risks (including the impact of interest rates on macroeconomic conditions, customer and client behavior, and on our net interest income), as well as the impact of prolonged elevated interest rates on our financial projections and models, sensitivities, and the shape of the yield curve;

• Interest rate risks (including the impact of interest rates on macroeconomic conditions, customer and client behavior, and on our net interest income), as well as the impact of fluctuating interest rates on our financial projections and models, sensitivities, and the shape of the yield curve;

• Changes in accounting policies, rules, and practices;

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Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at 77 full-service branches across Florida, and through advanced mobile and online banking solutions.

The Company’s financial results in the second quarter of 2024 include emerging loan growth and stabilizing deposit costs, supporting an improved outlook for net interest income.

The Company’s financial results in the third quarter of 2024 include strong growth in loans and deposits supporting improved net interest income.

Growth in noninterest income continues, and with significant cost-saving initiatives now complete, Seacoast continues to prudently manage expenses while strategically investing to support continued growth.

Highlights include:

• Net income of $30.2 million, or $0.36 per average diluted share, an increase of 16% from the prior quarter.

Highlights for the third quarter of 2024 include:

• Net income of $30.7 million, or $0.36 per average diluted share, an increase of $0.4 million, or 1%, from the prior quarter.

• Pre-tax pre-provision earnings on an adjusted basis 1 increased $1.9 million to $46.4 million from the prior quarter.

• Demonstrating the Company’s consistent focus on driving efficiency while making investments for organic growth, adjusted noninterest expense 1 is down 10% from the prior year quarter.

• Continued success in the wealth management division, with assets under management increasing 12% year to date to reach a record $1.9 billion.

• Continued growth in lending pipelines, with the overall pipeline increasing to $834.4 million.

• Asset quality remains well controlled, including a reduction in nonperforming loans compared to the prior quarter.

• Tangible book value per share increased to $15.41.

• Tangible book value per share increased 20% on an annualized basis to $16.20.

• Loans grew 6.6% on an annualized basis to $10.2 billion, and the overall loan pipeline remained strong at $831.1 million.

• Growth in customer deposits, excluding brokered deposits, of $195.9 million, or 6.6% annualized.

• Noninterest bearing deposits grew $45.5 million, or 5.3% annualized.

• Net interest margin was 3.17%, nearly flat compared to 3.18% in the prior quarter, and net interest margin, excluding accretion on acquired loans, expanded to 2.90% from 2.87%.

• Net interest income of $106.7 million, an increase of $2.2 million, or 2%, from the second quarter of 2024.

• Noninterest income increased to $23.7 million, representing a 33% year-over-year increase compared to the three months ended September 30, 2023.

• Strong capital position, with a Tier 1 capital ratio of 14.8%, and a tangible common equity to tangible assets ratio of 9.6%.

As the Company completes its transition from a successful period of sequential bank acquisitions, the most recent of which was integrated in the second quarter of 2023, the renewed focus on organic customer growth is generating momentum across all markets and business segments.

For the second quarter of 2024, the Company reported net income of $30.2 million, or $0.36 per average diluted share, an increase of $4.2 million, or 16%, from the first quarter of 2024 and a decrease of $1.0 million, or 3%, compared to the second quarter of 2023.

Adjusted net income 1 for the second quarter of 2024 totaled $30.3 million, or $0.36 per average diluted share, a decrease of $0.9 million, or 3%, compared to the first quarter of 2024 and a decrease of $13.2 million, or 30%, compared to the second quarter of 2023.

For the six months ended June 30, 2024, net income totaled $56.3 million, or $0.66 per average diluted share, an

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

increase of $13.2 million, or 31%, compared to the six months ended June 30, 2023.

For the six months ended June 30, 2024, adjusted net income 1 totaled $61.4 million, or $0.72 per average diluted share, compared to $67.7 million, or $0.81 per average diluted share for the six months ended June 30, 2023.

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

The Company’s focus on organic customer growth and recent talent additions are generating momentum across its markets and business segments.

The results for the third quarter of 2024 evidence the inflection in growth and the start of margin expansion expected during the second half of 2024.

For the third quarter of 2024, the Company reported net income of $30.7 million, or $0.36 per average diluted share, an increase of $0.4 million, or 1%, from the second quarter of 2024 and a decrease of $0.8 million, or 2%, compared to the third quarter of 2023.

Adjusted net income 1 for the third quarter of 2024 totaled $30.5 million, or $0.36 per average diluted share, an increase of $0.2 million, or 1%, compared to the second quarter of 2024 and a decrease of $3.7 million, or 11%, compared to the third quarter of 2023.

For the nine months ended September 30, 2024, net income totaled $86.9 million, or $1.02 per average diluted share, an increase of $12.4 million, or 17%, compared to the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, adjusted net income 1 totaled $91.9 million, or $1.08 per average diluted share, compared to $101.9 million, or $1.21 per average diluted share for the nine months ended September 30, 2023.

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

2024 2024 2023 2024 2023

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Net Interest Income and Margin

Net interest income for the second quarter of 2024 totaled $104.4 million, a modest decrease of $0.7 million, or 1%, compared to the first quarter of 2024, and a decrease of $22.5 million , or 18% , c ompared to the second quarter of 2023.

The decrease from the prior quarter reflects higher interest expense on deposits resulting from growth in deposit balances and the impact of the continued elevated rate environment.

The decrease was partially offset by higher yields on loans and securities.

The decrease from the prior year is primarily due to the higher cost of deposits.

For the six months ended June 30, 2024, net interest income totaled $209.5 million, a decrease of $48.6 million, or 19%, compared to the six months ended June 30, 2023.

Net interest income (on a fully taxable equivalent basis) 1 for the second quarter of 2024 was $104.7 million, a decrease of $0.6 million, or 1%, compared to the first quarter of 2024, and a decrease of $22.5 million, or 18%, c ompared to the second quarter of 2023.

Accretion on acquired loans totaled $10.2 million for the second quarter of 2024, compared to $10.6 million for the first quarter of 2024, and $14.6 million for the second quarter of 2023.

For the six months ended June 30, 2024, net interest income (on a fully taxable equivalent basis) 1 was $210.0 million, a decrease of $48.6 million, or 1%, compared to the six months ended June 30, 2023.

Net interest margin (on a fully taxable equivalent basis) 1 decreased six basis points from 3.24% in the first quarter of 2024 to 3.18% in the second quarter of 2024, and decreased 68 basis points from 3.86% in the second quarter of 2023, largely driven by the growth in deposit costs.

Compared to the first quarter of 2024, securities yields increased 22 basis points in the second quarter of 2024 to 3.69% and compared to the second quarter of 2023, increased 56 basis points.

The yield on loans increased to 5.93% for the second quarter of 2024 from 5.90% in the first quarter of 2024 and from 5.89% in the second quarter of 2023, reflecting the impact of a higher interest rate environment.

The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 30 basis points for the second quarter of 2024, 33 basis points in the first quarter, and 44 basis points in the second quarter of 2023.

The cost of deposits was 2.31% in the second quarter of 2024, compared to 2.19% in the first quarter of 2024, and 1.38% in the second quarter of 2023.

For the six months ended June 30, 2024, net interest margin (on a fully taxable equivalent basis) 1 decreased 88 basis points to 3.21% compared to the six months ended June 30, 2023, largely driven by the growth in deposit costs.

The yield on total loans increased from 5.88% for the six months ended June 30, 2023 to 5.92% for the six months ended June 30, 2024, reflecting the impact of the higher interest rate environment.

The yield on securities was 3.59% for the six months ended June 30, 2024, compared to 2.99% for the six months ended June 30, 2023, also reflecting the impact of a higher interest rate environment.

The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 31 basis points for the six months ended June 30, 2024, and 49 basis points for the six months ended June 30, 2023.

The cost of deposits was 2.25% for the six months ended June 30, 2024, an increase of 116 basis points compared to the six months ended June 30, 2023.

Net interest income for the third quarter of 2024 totaled $106.7 million, an increase of $2.2 million, or 2%, compared to the second quarter of 2024, and a decrease of $12.6 million , or 11% , c ompared to the third quarter of 2023.

For the nine months ended September 30, 2024, net interest income totaled $316.2 million, a decrease of $61.3 million, or 16%, compared to the nine months ended September 30, 2023.

In the loan portfolio, higher interest income from new loan production was partially offset by lower accretion of purchase discount on acquired loans.

Recent purchases in the securities portfolio contributed to higher securities yields.

Higher interest expense on deposits reflects the impact of higher rates, with cuts to the federal funds rate late in the quarter not yet fully impacting the third quarter of 2024 results.

Net interest income (on a fully taxable equivalent basis) 1 for the third quarter of 2024 was $107.0 million, an increase of $2.3 million, or 2%, compared to the second quarter of 2024, and a decrease of $12.5 million, or 10%, c ompared to the third quarter of 2023.

Accretion on acquired loans totaled $9.2 million for the third quarter of 2024, compared to $10.2 million for the second quarter of 2024, and $14.8 million for the third quarter of 2023.

For the nine months ended September 30, 2024, net interest income (on a fully taxable equivalent basis) 1 was $316.9 million, a decrease of $61.1 million, or 16%, compared to the nine months ended September 30, 2023.

Accretion on acquired loans totaled $30.0 million for the nine months ended September 30, 2024, compared to $45.4 million for the nine months ended September 30, 2023.

Net interest margin (on a fully taxable equivalent basis) 1 decreased one basis point to 3.17% in the third quarter of 2024, compared to 3.18% in the second quarter of 2024, and decreased 40 basis points from 3.57% in the third quarter of 2023, largely driven by higher deposit costs.

Compared to the second quarter of 2024, securities yields increased six basis points in the third quarter of 2024 to 3.75% and increased 42 basis points from the third quarter of 2023.

The yield on loans increased to 5.94% for the third quarter of 2024, an increase of one basis point from both the second quarter of 2024 and from the third quarter of 2023.

The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 27 basis points for the third quarter of 2024, 30 basis points in the second quarter, and 44 basis points in the third quarter of 2023.

The cost of deposits was 2.34% in the third quarter of 2024, compared to 2.31% in the second quarter of 2024, and 1.79% in the third quarter of 2023.

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

For the nine months ended September 30, 2024, net interest margin (on a fully taxable equivalent basis) 1 decreased 72 basis points to 3.19% compared to the nine months ended September 30, 2023, largely driven by higher deposit costs.

The yield on securities was 3.65% for the nine months ended September 30, 2024, compared to 3.10% for the nine months ended September 30, 2023.

The yield on total loans increased from 5.89% for the nine months ended September 30, 2023 to 5.93% for the nine months ended September 30, 2024.

The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 30 basis points for the nine months ended September 30, 2024, and 47 basis points for the nine months ended September 30, 2023.

The cost of deposits was 2.28% for the nine months ended September 30, 2024, an increase of 95 basis points compared to the nine months ended September 30, 2023.

In the remainder of 2024, the Company expects to continue growing customer relationships resulting in growth in loans and deposits.

This growth, combined with lower rates on deposits resulting from expected short-term interest rate reductions, should benefit net interest income and net interest margin in the fourth quarter of 2024.

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

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Bearing Liabilities

Second quarter 2024 $ 104,657 3.18 % 5.47 % 3.33 %

First quarter 2024 105,298 3.24 % 5.41 % 3.20 %

Third quarter 2024 $ 106,975 3.17 % 5.46 % 3.32 %

Second quarter 2024 104,657 3.18 % 5.47 % 3.33 %

Six months ended June 30, 2024 209,954 3.21 % 5.44 % 3.26 %

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

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

Nine months ended September 30, 2024 316,930 3.19 % 5.44 % 3.28 %

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

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

Average loans decreased $29.5 million for the second quarter of 2024 compared to the first quarter of 2024, and decreased $96.1 million, or 1%, from the second quarter of 2023.

For the six months ended June 30, 2024, average loans increased $282.7 million, or 3%, from the six months ended June 30, 2023.

Average loans as a percentage of average earning assets totaled 76% for the second quarter of 2024, 77% for the first quarter of 2024 and 76% for the second quarter of 2023.

For each of the six months ended June 30, 2024 and June 30, 2023, average loans as a percentage of average earning assets totaled 76%.

During the second quarter of 2024, average investment securities increased $50.3 million, or 2%, compared to the first quarter of 2024, and decreased $54.1 million, or 2.0%, compared to the second quarter of 2023.

Securities yields increased 22 basis points to 3.69% during the second quarter of 2024 from 3.47% in the first quarter of 2024, benefiting from recent purchases.

For the six months ended June 30, 2024, average investment securities were $2.6 billion, a decrease of $92.8 million, or 3%, compared to the six months ended June 30, 2023.

The cost of average interest-bearing liabilities increased 13 basis points in the second quarter of 2024 to 3.33% from 3.20% in the first quarter of 2024, and increased 107 basis points from 2.26% in the second quarter of 2023.

The cost of average total deposits (including noninterest bearing demand deposits) was 2.31% in the second quarter of 2024, 2.19% in the first quarter of

2024 and 1.38% in the second quarter of 2023.

For the six months ended June 30, 2024, the cost of average total deposits (including noninterest bearing demand deposits) was 2.25% compared to 1.09% for the six months ended June 30, 2023.

During the second quarter of 2024, average transaction deposits (noninterest and interest-bearing demand) decreased $91.7 million, or 1%, compared to the first quarter of 2024 and decreased $804.4 million, or 12%, compared to the second quarter of 2023.

For the six months ended June 30, 2024, average transaction deposits decreased $672.3 million, or 10%, compared to the six months ended June 30, 2023.

The Company’s deposit mix remains favorable, with 87% of average deposit balances comprised of savings, money market, and demand deposits for the six months ended June 30, 2024.

Average balances of sweep repurchase agreements with customers decreased $39.8 million, or 12%, from the first quarter of 2024 and increased $48.8 million, or 20%, compared to the second quarter of 2023.

The average rate on customer sweep repurchase accounts was 3.68% for the second quarter of 2024, compared to 3.71% for the first quarter of 2024, and 2.61% for the second quarter of 2023.

For the six months ended June 30, 2024, the average balance was $313.5 million compared to an average balance of $209.4 million for the six months ended June 30, 2023 with average rates of 3.70% and 2.37%, respectively.

The Company had an average balance of $149.2 million in FHLB borrowings outstanding for the second quarter of 2024, with an average interest rate of 4.29%, compared to $102.4 million for the first quarter of 2024, with an average interest rate of 3.77%, and $251.6 million for the second quarter of 2023, with an average interest rate of 3.62%.

The Company had an average balance of $125.8 million in FHLB borrowings outstanding for the six months ended June 30, 2024, with an average interest rate of 4.08%, compared to $266.9 million for the six months ended June 30, 2023, with an average interest rate of 3.81%.

Long-term debt balances averaged $106.5 million in the second quarter of 2024, $106.4 million in the first quarter of 2024, and $105.9 million in the second quarter of 2023.

The average rate on long-term debt for the second quarter of 2024 was 7.03%, a decrease of 28 basis points compared to the first quarter of 2024 and an increase of 23 basis points compared to the second quarter of 2023.

For the six months ended June 30, 2024, long-term debt averaged $106.5 million, compared to $102.2 million for the six months ended June 30, 2023.

The average rate on long-term debt for the six months ended June 30, 2024 was 7.17%, an increase of 44 basis points compared to the six months ended June 30, 2023.

Average loans increased $123.7 million, or 1%, for the third quarter of 2024 compared to the second quarter of 2024, and increased $85.2 million, or 1%, from the third quarter of 2023.

For the nine months ended September 30, 2024, average loans increased $216.0 million, or 2%, from the nine months ended September 30, 2023.

Average loans as a percentage of average earning assets totaled 75% for the third quarter of 2024, 76% for the second quarter of 2024 and 76% for the third quarter of 2023.

For each of the nine months ended September 30, 2024 and September 30, 2023, average loans as a percentage of average earning assets totaled 76%.

During the third quarter of 2024, average investment securities increased $127.1 million, or 4.8%, compared to the second quarter of 2024, and increased $171.9 million, or 6.6%, compared to the third quarter of 2023.

Securities yields increased six basis points to 3.75% during the third quarter of 2024 from 3.69% in the second quarter of 2024, benefiting from recent purchases.

For the nine months ended September 30, 2024, average investment securities were $2.7 billion, a decrease of $3.7 million compared to the nine months ended September 30, 2023.

The cost of average interest-bearing liabilities decreased one basis point in the third quarter of 2024 to 3.32% from 3.33% in the second quarter of 2024, and increased 56 basis points from 2.76% in the third quarter of 2023.

The cost of average total deposits (including noninterest bearing demand deposits) was 2.34% in the third quarter of 2024, 2.31% in the second quarter of 2024 and 1.79% in the third quarter of 2023.

For the nine months ended September 30, 2024, the cost of average total deposits (including noninterest bearing demand deposits) was 2.28% compared to 1.33% for the nine months ended September 30, 2023.

During the third quarter of 2024, average transaction deposits (noninterest and interest-bearing demand) decreased $273.4 million, or 4%, compared to the second quarter of 2024 and decreased $909.2 million, or 13%, compared to the third quarter of 2023.

For the nine months ended September 30, 2024, average transaction deposits decreased $751.8 million, or 11%, compared to the nine months ended September 30, 2023.

Declines reflect shifts in customer preference during the periods toward money market accounts, which increased $276.5 million, or 8%, in the third quarter of 2024 compared to the prior quarter, and increased $841.7 million, or 30%, in the nine months ended September 30, 2024 compared to the prior year period.

The Company’s deposit mix remains favorable, with 86% of average deposit balances comprised of savings, money market, and demand deposits for the nine months ended September 30, 2024.

Average balances of sweep repurchase agreements with customers decreased $52.5 million, or 18%, from the second quarter of 2024 and decreased $86.6 million, or 26%, compared to the third quarter of 2023.

The average rate on customer sweep repurchase accounts was 3.37% for the third quarter of 2024, compared to 3.68% for the second quarter of 2024, and 3.48% for the third quarter of 2023.

For the nine months ended September 30, 2024, the average balance was $289.2 million, compared to an average balance of $249.2 million for the nine months ended September 30, 2023 with average rates of 3.61% and 2.86%, respectively.

The Company had an average balance of $237.9 million in FHLB borrowings outstanding for the third quarter of 2024, with an average interest rate of 4.26%, compared to $149.2 million for the second quarter of 2024, with an average interest rate of 4.29%, and $111.1 million for the third quarter of 2023, with an average interest rate of 3.17%.

The Company had an average balance of $163.5 million in FHLB borrowings outstanding for the nine months ended September 30, 2024, with an average interest rate of 4.17%, compared to $214.4 million for the nine months ended September 30, 2023, with an average interest rate of 3.70%.

Long-term debt balances averaged $106.7 million in the third quarter of 2024, $106.5 million in the second quarter of 2024, and $106.0 million in the third quarter of 2023.

The average rate on long-term debt for the third quarter of 2024 was 7.05%, an increase of two basis points compared to the second quarter of 2024 and a decrease of 13 basis points compared to the third quarter of 2023.

For the nine months ended September 30, 2024, long-term debt averaged $106.5 million, compared to $103.5 million for the nine months ended September 30, 2023.

The average rate on long-term debt for the nine months ended September 30, 2024 was 7.13%, an increase of 25 basis points compared to the nine months ended September 30, 2023.

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

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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/

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

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

Nine Months Ended September 30, Nine Months Ended September 30,

Average Yield/ Average Yield/

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Noninterest Income

Noninterest income totaled $22.2 million for the second quarter of 2024, an increase of $1.7 million, or 8%, compared to the first quarter of 2024 and an increase of $0.6 million, or 3% from the second quarter of 2023.

Noninterest income totaled $42.7 million for the six months ended June 30, 2024, a decrease of $1.3 million, or 3%, compared to the six months ended June 30, 2023.

Noninterest income totaled $23.7 million for the third quarter of 2024, an increase of $1.5 million, or 7%, compared to the second quarter of 2024 and an increase of $5.9 million, or 33%, from the third quarter of 2023.

Noninterest income totaled $66.4 million for the nine months ended September 30, 2024, an increase of $4.5 million, or 7%, compared to the nine months ended September 30, 2023.

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) 2024 2024 2023 2024 2023

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23,492 22,228 18,180 65,988 62,270

Securities (losses) gains, net (44) 229 (176) 185 (69)

Securities gains (losses), net 187 (44) (387) 372 (456)

Total $ 23,679 $ 22,184 $ 17,793 $ 66,360 $ 61,814

Service charges on deposits were $5.3 million in the second quarter of 2024, compared to $5.0 million in the first quarter of 2024, and $4.6 million in the second quarter of 2023.

For the six months ended June 30, 2024, service charges on deposits totaled $10.3 million, an increase of $1.5 million, or 17%, compared to the six months ended June 30, 2023.

Our investments in talent and market expansion across the state have resulted in continued growth in treasury management services to commercial customers.

Interchange income increased $0.1 million, or 3%, compared to the first quarter of 2024 and decreased $3.1 million, or 62%, compared to the second quarter of 2023.

The decrease compared to the prior year quarter 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.

For the six months ended June 30, 2024, interchange income totaled $3.8 million, a decrease of $5.9 million, or 61%, compared to the six months ended June 30, 2023.

Wealth management income, including trust fees and brokerage commissions and fees, was $3.8 million in the second quarter of 2024, compared to $3.5 million for the first quarter of 2024 and $3.3 million for the second quarter of 2023.

For the six months ended June 30, 2024, wealth management income totaled $7.3 million, an increase of $0.9 million, or 14%, compared to the six months ended June 30, 2023.

The wealth management division continues to demonstrate success in building relationships, and assets under management have increased $202.8 million, or 12%, from December 31, 2023, to $1.9 billion.

Insurance agency income increased $0.1 million, or 5%, compared to the first quarter of 2024 and totaled $1.4 million for the three months ended June 30, 2024.

For the six months ended June 30, 2024, insurance agency income totaled $2.6 million, an increase of $0.4 million, or 17%, compared to the six months ended June 30, 2023, reflecting continued growth and expansion of insurance services.

Bank owned life insurance (“BOLI”) income was $2.6 million for the second quarter of 2024, compared to $2.3 million for the first quarter of 2024 and $2.1 million for the second quarter of 2023.

For the six months ended June 30, 2024, BOLI income totaled $4.9 million, an increase of $0.9 million, or 22%, compared to the six months ended June 30, 2023, with policy exchanges executed in the first quarter of 2024 resulting in improved ongoing yields.

Other income was $6.0 million in the second quarter of 2024, an increase of $0.7 million, or 14%, compared to the first quarter of 2024, and an increase of $1.2 million, or 25%, compared to the second quarter of 2023.

The second quarter of 2024 includes a gain on the sale of a single nonperforming commercial real estate loan.

For the six months ended June 30, 2024, other income totaled $11.2 million, a decrease of $0.2 million, or 2%, compared to the six months ended June 30, 2023.

Net securities activity resulted in losses of $44 thousand during the second quarter of 2024, gains of $0.2 million in the first quarter of 2024 , and losses of $0.2 million in the second quarter of 2023.

The first quarter of 2024 included gains of $4.1 million on the sale of the Company’s holdings of Visa Class B stock, which was largely offset by losses of $3.8 million on the sale of $86.8 million, or 3%, of the bank’s investment securities portfolio.

Service charges on deposits were $5.4 million in the third quarter of 2024, compared to $5.3 million in the second quarter of 2024, and $4.6 million in the third quarter of 2023.

For the nine months ended September 30, 2024, service charges on deposits totaled $15.7 million, an increase of $2.3 million, or 17%, compared to the nine months ended September 30, 2023.

The Company’s investments in talent and market expansion across the state have resulted in continued growth in treasury management services to commercial customers.

Interchange income remained flat compared to the second quarter of 2024 and increased $0.2 million, or 13%, compared to the third quarter of 2023.

The increase from the prior year quarter reflects continued organic growth.

For the nine months ended September 30, 2024, interchange income totaled $5.7 million, a decrease of $5.7 million, or 50%, compared to the nine months ended September 30, 2023, due to the impact 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 $3.8 million in both the second and third quarters of 2024, compared to $3.1 million for the third quarter of 2023.

For the nine months ended September 30, 2024, wealth management income totaled $11.1 million, an increase of $1.6 million, or 17%, compared to the nine months ended September 30, 2023.

The wealth management division continues to demonstrate success in building relationships, and assets under management have increased $276.5 million, or 16%, from December 31, 2023, to $2.0 billion at September 30, 2024.

Insurance agency income was similar to the second quarter of 2024 and totaled $1.4 million for the three months ended September 30, 2024, compared to $1.2 million in the third quarter of 2023.

For the nine months ended September 30, 2024, insurance agency income totaled $4.0 million, an increase of $0.6 million, or 17%, compared to the nine months ended September 30, 2023, reflecting continued growth and expansion of insurance services.

Bank owned life insurance (“BOLI”) income of $2.6 million for the third quarter of 2024 was consistent with the second quarter of 2024 and increased $0.4 million, or 17%, from $2.2 million for the third quarter of 2023.

For the nine months ended September 30, 2024, BOLI income totaled $7.4 million, an increase of $1.3 million, or 20%, compared to the nine months ended September 30, 2023, with policy exchanges executed in the first quarter of 2024 resulting in improved ongoing yields.

Other income was $7.5 million in the third quarter of 2024, an increase of $1.5 million, or 26%, compared to the second quarter of 2024, and an increase of $3.2 million, or 74%, compared to the third quarter of 2023.

For the nine months ended September 30, 2024, other income totaled $18.6 million, an increase of $3.0 million, or 19%, compared to the nine months ended September 30, 2023.

Changes in each period reflect variability in income from SBIC investments, loan swap-related fees, and other fees correlating with growth in customers and accounts.

Net securities activity resulted in gains of $0.2 million during the third quarter of 2024, losses of $44 thousand in the second quarter of 2024 , and losses of $0.4 million in the third quarter of 2023.

For the nine months ended September 30, 2024, net securities activity resulted in gains of $0.4 million, compared to losses of $0.5 million for the nine months ended September 30, 2023.

The first quarter of 2024 included gains of $4.1 million on the sale of the Company’s holdings of Visa Class B stock, which were largely offset by losses of $3.8 million on the sale of $86.8 million, or 3%, of the bank’s investment securities portfolio.

The proceeds were reinvested at a yield of 5.53%, with an expected earnback on the trade of 1.9 years.

In October 2024, the Company took advantage of favorable market conditions and repositioned a portion of its available for sale securities portfolio.

Securities with an average book yield of 2.8% were sold, resulting in a pre-tax loss of approximately $8.0 million impacting fourth quarter 2024 results.

The proceeds of approximately $113.0 million were reinvested in agency mortgage-backed securities with an average book yield of 5.4%, for an estimated earnback of less than three years.

Noninterest Expenses

Noninterest expense for the second quarter of 2024 totaled $82.5 million, a decrease of $7.8 million, or 9%, compared to the first quarter of 2024, and a decrease of $25.3 million, or 23%, from the second quarter of 2023.

For the six months ended June 30, 2024, noninterest expense totaled $172.9 million, a decrease of $42.4 million, or 20%, compared to the six months ended June 30, 2023.

The decreases can be attributed to the completion of cost-saving initiatives and prudent management of expenses while strategically investing to support continued growth, benefiting nearly every category of expense.

Noninterest expense for the third quarter of 2024 totaled $84.8 million, an increase of $2.3 million, or 3%, compared to the second quarter of 2024, and a decrease of $9.1 million, or 10%, from the third quarter of 2023.

For the nine months ended September 30, 2024, noninterest expense totaled $257.7 million, a decrease of $51.5 million, or 17%, compared to the nine months ended September 30, 2023.

The decreases from 2023 are the result of cost-saving initiatives and prudent management of expenses, while maintaining strategic investments to support continued growth.

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) 2024 2024 2023 2024 2023

12 unchanged sentences

Total $ 84,818 $ 82,537 $ 93,915 $ 257,726 $ 309,255

Salaries and wages totaled $38.9 million for the second quarter of 2024, $40.3 million for the first quarter of 2024, and $45.2 million for the second quarter of 2023.

The first quarter of 2024 included $2.1 million in severance-related expenses arising from a reduction in the workforce .

For the six months ended June 30, 2024, salaries and wages totaled $79.2 million, a decrease of $13.5 million, or 15%, compared to the six months ended June 30, 2023.

The company continues to prioritize investment in growth-focused talent.

During the second quarter of 2024, employee benefits, which include costs associated with the Company’s self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $6.9 million, a decrease of $1.0 million, or 13%, compared to the first quarter of 2024, and a decrease of $0.6 million, or 8%, compared to the second quarter of 2023.

The decrease compared to the first quarter of 2024 reflects higher seasonal payroll taxes and 401(k) contributions impacting the first quarter.

The decrease compared to the second quarter of 2023 is related to reductions in the workforce.

For the six months ended June 30, 2024, employee benefit costs totaled $14.8 million, a decrease of $1.3 million, or 8%, compared to the six months ended June 30, 2023.

Salaries and wages totaled $40.7 million for the third quarter of 2024, $38.9 million for the second quarter of 2024, and $46.4 million for the third quarter of 2023.

The third quarter of 2024 reflects continued additions to the banking team as the Company focuses on organic growth.

For the nine months ended September 30, 2024, salaries and wages totaled $119.9 million, a decrease of $19.3 million, or 14%, compared to the nine months ended September 30, 2023.

A workforce reduction in early 2024 partially offset revenue compression from higher interest rates.

During the third quarter of 2024, employee benefits, which include costs associated with the Company’s self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $7.0 million, an increase of $0.1 million, or 1%, compared to the second quarter of 2024, and a decrease of $0.3 million, or 3%, compared to the third quarter of 2023.

For the nine months ended September 30, 2024, employee benefit costs totaled $21.7 million, a decrease of $1.5 million, or 7%, compared to the nine months ended September 30, 2023.

The decreases compared to the 2023 periods are related to reductions in the workforce.

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 $8.2 million, $12.1 million, and $20.2 million for the second quarter of 2024, first quarter of 2024, and second quarter of 2023, respectively.

The Company incurred one-time charges of $4.1 million early in the first quarter of 2024 associated with consolidation activities, leading to a comparative decline in expense in these categories in the second quarter of 2024.

For the six months ended June 30, 2024, outsourced data processing costs totaled $20.3 million, a decrease of $14.4 million, or 42%, compared to the six months ended June 30, 2023.

Outsourced data processing costs totaled $8.0 million, $8.2 million, and $8.7 million for the third quarter of 2024, second quarter of 2024, and third quarter of 2023, respectively.

Lower expenses in the third quarter of 2024 reflect the benefit of lower negotiated rates with key service providers.

For the nine months ended September 30, 2024, outsourced data processing costs totaled $28.3 million, a decrease of

$15.2 million, or 35%, compared to the nine months ended September 30, 2023.

The 2023 period included $17.5 million in costs directly associated with bank acquisitions.

Total occupancy and furniture and equipment expenses were $9.1 million in the second quarter of 2024, $10.0 million in the first quarter of 2024, and $10.9 million in the second quarter of 2023.

The first quarter of 2024 included charges of $0.8 million associated with early lease terminations and consolidation of locations as part of the Company’s expense reduction initiative.

For the six months ended June 30, 2024, occupancy and furniture and equipment expenses totaled $19.2 million, a decrease of $2.0 million, or 10%, compared to the six months ended June 30, 2023.

Marketing expenses totaled $3.3 million in the second quarter of 2024, $2.7 million in the first quarter of 2024, and $2.0 million in the second quarter of 2023.

For the six months ended June 30, 2024, marketing expenses totaled $5.9 million, an increase of $1.6 million, or 38%, compared to the six months ended June 30, 2023.

Planned investments in branding and in marketing campaigns across the state led to higher marketing expenses.

Legal and professional fees for the second quarter of 2024 were $2.0 million, a decrease of $0.2 million, or 8%, compared to the first quarter of 2024, and a decrease of $2.1 million, or 51%, compared to the second quarter of 2023, which included $1.7 million in acquisition-related expenses.

For the six months ended June 30, 2024, legal and professional fees totaled $4.1 million, a decrease of $7.4 million, or 64%, compared to the six months ended June 30, 2023.

Total occupancy and furniture and equipment expenses were $9.2 million in the third quarter of 2024, $9.1 million in the second quarter of 2024, and $9.8 million in the third quarter of 2023.

The decrease in expenses compared to the third quarter of 2023 is the result of expense reduction efforts completed during 2024.

For the nine months ended September 30, 2024, occupancy and furniture and equipment expenses totaled $28.3 million, a decrease of $2.7 million, or 9%, compared to the nine months ended September 30, 2023.

Marketing expenses totaled $2.7 million in the third quarter of 2024, $3.3 million in the second quarter of 2024, and $1.9 million in the third quarter of 2023.

For the nine months ended September 30, 2024, marketing expenses totaled $8.7 million, an increase of $2.5 million, or 40%, compared to the nine months ended September 30, 2023.

Planned investments in branding and in marketing campaigns across the state led to higher marketing expenses in 2024, with changes between periods driven by the timing of various campaigns.

Legal and professional fees for the third quarter of 2024 were $2.7 million, an increase of $0.7 million, or 37%, compared to the second quarter of 2024, and similar to expenses in the third quarter of 2023.

For the nine months ended September 30, 2024, legal and professional fees totaled $6.8 million, a decrease of $7.4 million, or 52%, compared to the nine months ended September 30, 2023.

The 2023 period included $6.5 million in costs directly associated with bank acquisitions.

Provision for Credit Losses

The provision for credit losses was $4.9 million for the second quarter of 2024, compared to $1.4 million for the first quarter of 2024, and a net benefit of $0.8 million for the second quarter of 2023.

For the six months ended June 30, 2024, provision for credit losses was $6.3 million, compared to $30.8 million for the six months ended June 30, 2023.

The provision for credit losses was $6.3 million for the third quarter of 2024, compared to $4.9 million for the second quarter of 2024, and $2.7 million for the third quarter of 2023.

For the nine months ended September 30, 2024, provision for credit losses was $12.6 million, compared to $33.5 million for the nine months ended September 30, 2023.

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

For the second quarter of 2024, the Company recorded tax expense of $8.9 million, an increase of $1.1 million, or 14%, compared to the first quarter of 2024 and a decrease of $1.3 million, or 13%, compared to the second quarter of 2023.

The effective tax rate for the second quarter of 2024 was 22.8%, compared to 24.6% in the first quarter of 2024 and 23.1% in the second quarter of 2023.

For the six months ended June 30, 2024, tax expense totaled $16.7 million, an increase of $3.9 million, or 30%, compared to the six months ended June 30, 2023, with an effective tax rate of 22.9% for the six months ended June 30, 2024, compared to 23.0% for the six months ended June 30, 2023.

Excluding the day-one provision, the increase for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to loan growth.

In late September and early October 2024, communities across our corporate footprint were impacted by Hurricanes Helene and Milton.

We maintained uninterrupted digital and telephone access for our customers and, having experienced minimal impacts to our branch properties, we fully reopened to serve our communities shortly after each storm passed.

Recovery efforts in many areas continue and the full impacts on people and businesses in the most hard-hit regions are not fully known.

We do not expect a significant impact from Hurricane Helene, but an additional provision for credit losses may be warranted in the fourth quarter of 2024 for the impacts of Hurricane Milton, in a range between approximately $5 million and $10 million.

For the third quarter of 2024, the Company recorded tax expense of $8.6 million, a decrease of $0.3 million, or 3%, compared to the second quarter of 2024 and a decrease of $0.5 million, or 5%, compared to the third quarter of 2023.

The effective tax rate for the third quarter of 2024 was 21.9%, compared to 22.4% in the second quarter of 2024 and 22.8% in the third quarter of 2023.

For the nine months ended September 30, 2024, tax expense totaled $25.3 million, an increase of $3.4 million, or 15%, compared to the nine months ended September 30, 2023, with an effective tax rate of 22.6% for the nine months ended September 30, 2024, compared to 22.8% for the nine months ended September 30, 2023.

Explanation of Certain Unaudited Non-GAAP Financial Measures

8 unchanged sentences

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,

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

1 unchanged sentence

Total noninterest income $ 23,679 $ 22,184 $ 17,793 $ 66,360 $ 61,814

Securities losses (gains), net 44 (229) 176 (185) 69

Securities (gains)/losses, net (187) 44 387 (372) 456

BOLI benefits on death (included in other income) — — — — (2,117)

3 unchanged sentences

Merger related charges — — — — (33,180)

Salaries and wages — — (1,573) — (5,813)

Outsourced data processing — — (10,904) — (17,455)

Legal and professional fees — — (1,664) — (6,453)

Other — — (1,507) — (3,459)

Total merger related charges — — (15,648) — (33,180)

Branch reductions and other expense initiatives 1

Salaries and wages — (2,073) (462) (2,073) (1,081)

Outsourced data processing — (4,089) — (4,089) —

Occupancy — (771) — (771) (774)

Other — (161) (109) (161) (7)

Total branch reductions and other expense initiatives 1

— — (3,305) (7,094) (5,167)

18 unchanged sentences

Net adjusted noninterest expense to average tangible assets 2.19 % 2.19 % 2.34 % 2.20 % 2.40 %

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

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

Net revenue $ 130,344 $ 126,608 $ 137,099 $ 382,527 $ 439,235

6 unchanged sentences

Net interest income including FTE adjustment 106,975 104,657 119,505 316,930 378,009

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

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

Total noninterest income 23,679 22,184 17,793 66,360 61,814

25 unchanged sentences

Adjusted return on average tangible common equity 10.27 % 10.76 % 12.79 % 10.72 % 13.14 %

Second First Second Six Months Ended

Quarter Quarter Quarter June 30,

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

Loan interest income 3

10 unchanged sentences

$ 106,975 $ 104,657 $ 119,505 $ 316,930 $ 378,009

Third Second Third Nine Months Ended

Quarter Quarter Quarter September 30,

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

Accretion on acquired loans (9,182) (10,178) (14,843) (29,955) (45,365)

25 unchanged sentences

Financial Condition

Total assets as of June 30, 2024 were $15.0 billion, an increase of $372.4 million, or 3%, from December 31, 2023.

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

At June 30, 2024, the Company had $2.0 billion in AFS securities and $658.1 million in HTM securities.

Total assets as of September 30, 2024 were $15.2 billion, an increase of $588.1 million, or 4%, from December 31, 2023.

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

At September 30, 2024, the Company had $2.2 billion in AFS securities and $646.1 million in HTM securities.

The Company’s total debt securities portfolio increased $289.8 million from December 31, 2023.

During the first quarter of 2024, the Company recognized a $4.1 million gain on the opportunistic sale of its Visa Class B shares.

The gain was offset by a partial repositioning

of the securities portfolio, in which $86.8 million of securities were sold, with $3.8 million in realized losses.

During the six months ended June 30, 2024, there were $376.7 million of debt securities purchased and $167.2 million in paydowns and maturities over the same period.

The gain was offset by a partial repositioning of the securities portfolio, in which $86.8 million of securities were sold, with $3.8 million in realized losses.

Debt securities generally return principal and interest monthly.

The modified duration of the AFS securities portfolio and the total portfolio was 4.5 and 4.8, respectively, at June 30, 2024 compared to 4.5 and 4.9, respectively, at December 31, 2023.

At June 30, 2024, AFS securities had gross unrealized losses of $228.1 million and gross unrealized gains of $3.3 million, compared to gross unrealized losses of $217.7 million and gross unrealized gains of $4.4 million at December 31, 2023.

The modified duration of the AFS securities portfolio and the total portfolio was 4.1 and 4.5, respectively, at September 30, 2024 compared to 4.5 and 4.9, respectively, at December 31, 2023.

At September 30, 2024, AFS securities had gross unrealized losses of $179.0 million and gross unrealized gains of $13.8 million, compared to gross unrealized losses of $217.7 million and gross unrealized gains of $4.4 million at December 31, 2023.

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

10 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, 2024, all of the Company’s collateralized loan obligations were in AAA/AA tranches with weighted average credit support of 34%.

As of September 30, 2024, all of the Company’s collateralized loan obligations were in AAA/AA tranches with weighted average credit support of 34%.

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, 2024, 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, 2024, 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, 2024, no allowance for credit losses has been recorded.

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

Loan Portfolio

Loans, net of unearned income and excluding the allowance for credit losses, were $10.0 billion at June 30, 2024, a $24.4 million, or 0.2%, decrease from December 31, 2023.

Loans, net of unearned income and excluding the allowance for credit losses, were $10.2 billion at September 30, 2024, a $142.3 million, or 1.4%, increase from December 31, 2023.

The Company remains committed to sound risk management procedures.

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

The average loan size is only $345 thousand, and the average commercial loan size is only $758 thousand at June 30, 2024, reflecting the Company’s longtime focus on granularity and on creating valuable customer relationships.

The average loan size is $360 thousand, and the average commercial loan size is $789 thousand at September 30, 2024, 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 tables detail loan portfolio composition at June 30, 2024 and December 31, 2023 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, 2024

The following tables detail loan portfolio composition at September 30, 2024 and December 31, 2023 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, 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 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 amortized cost basis of loans included net deferred costs of $44.9 million at September 30, 2024 and $43.1 million at December 31, 2023.

At September 30, 2024, the remaining fair value adjustments on acquired loans were $141.8 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.

Collateral types and characteristics of non-owner occupied commercial real estate (“CRE”) loans as of June 30, 2024 were as follows:

June 30, 2024

Collateral types and characteristics of non-owner occupied commercial real estate (“CRE”) loans as of September 30, 2024 were as follows:

September 30, 2024

(In thousands)

8 unchanged sentences

1 Loan-to-value is calculated based on the real estate value at the time of origination, renewal, or update, whichever is more recent.

Non-owner occupied CRE loans increased by $103.4 million in the six months ended June 30, 2024, totaling $3.4 billion at June 30, 2024 compared to $3.3 billion at December 31, 2023.

Non-owner occupied CRE loans increased by $253.2 million in the nine months ended September 30, 2024, totaling $3.6 billion at September 30, 2024 compared to $3.3 billion at December 31, 2023.

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, 2024.

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

Within the non-owner occupied CRE portfolio, the largest segment is Retail properties, which totaled approximately $1.1 billion at September 30, 2024.

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 50% and an average loan size of $2.2 million.

The second-largest segment in the non-owner occupied CRE portfolio is office properties, which totaled $535.2 million at June 30, 2024.

The second-largest segment in the non-owner occupied CRE portfolio is office properties, which totaled $562.0 million at September 30, 2024.

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 54% and an average loan size of $1.7 million.

Owner-occupied CRE loans decreased by $13.9 million in the six months ended June 30, 2024 to $1.7 billion.

Owner-occupied CRE loans increased by $6.5 million in the nine months ended September 30, 2024 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 decreased $25.6 million, or 2%, from December 31, 2023, totaling $1.6 billion at June 30, 2024.

Residential mortgage loans increased $109.6 million to $2.6 billion during the six months ended June 30, 2024.

Included in the balance as of June 30, 2024, were $984.6 million of fixed rate mortgages, $973.9 million of adjustable rate mortgages and $596.9 million in home equity loans and home equity lines of credit (“HELOCs”), compared to $1.0 billion, $865.2 million and $488.2 million, respectively, at December 31, 2023.

Balances decreased $32.7 million, or 2%, from December 31, 2023, totaling $1.6 billion at September 30, 2024.

Residential mortgage loans increased $119.2 million to $2.6 billion during the nine months ended September 30, 2024.

Included in the balance as of September 30, 2024, were $981.3 million of fixed rate mortgages, $981.1 million of adjustable rate mortgages and $602.5 million in home equity loans and home equity lines of credit (“HELOCs”), compared to $1.0 billion, $865.2 million and $488.2 million, respectively, at December 31, 2023.

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 63%, with 34% of the loans being in first lien position at June 30, 2024, compared to an average LTV of 63%, with 35% of the portfolio being in the first lien position at December 31, 2023.

The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $23.9 million, or 9%, to total $227.7 million at June 30, 2024, compared to $251.6 million at December 31, 2023.

The average LTV of our HELOC portfolio is 64%, with 32% of the loans being in first lien position at September 30, 2024, compared to an average LTV of 63%, with 35% of the portfolio being in the first lien position at December 31, 2023.

The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $32.1 million, or 13%, to total $219.5 million at September 30, 2024, compared to $251.6 million at December 31, 2023.

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.

Pipelines include lines of credit at the full proposed commitment amount, which may not result in fully funded originations.

Second First Second

Third Second Third

Quarter Quarter Quarter

10 unchanged sentences

Consumer originations 65,140 59,973 76,531

Commercial and commercial real estate originations during the second quarter of 2024 were $406.0 million, an increase of $145.9 million, or 56%, compared to the first quarter of 2024, and an increase of $98.5 million, or 32%, compared to the second quarter of 2023.

The Company is benefiting from the investment made in recent years to attract talent from regional banks across its markets.

This talent is onboarding significant new relationships, resulting in growing pipelines.

Commercial and commercial real estate pipelines were $743.8 million as of June 30, 2024, an increase of 49% from $498.6 million at March 31, 2024, and an increase of 274% from $199.0 million at June 30, 2023.

SBA originations totaled $8.2 million during the second quarter of 2024, a decrease of $10.7 million compared to the first quarter of 2024, and a decrease of $1.7 million compared to the second quarter of 2023.

Residential loans originated for sale in the secondary market totaled $21.4 million in the second quarter of 2024, compared to $15.3 million in the first quarter of 2024 and $19.1 million in the second quarter of 2023.

Residential saleable pipelines were $12.1 million as of June 30, 2024, compared to $9.3 million as of March 31, 2024 and $11.5 million as of June 30, 2023.

Residential loan production retained in the portfolio for the second quarter of 2024 was $42.4 million, compared to $51.4 million in the first quarter of 2024 and $85.3 million in the second quarter of 2023.

The pipeline of residential loans intended to be retained in the portfolio was $24.7 million as of June 30, 2024, compared to $24.4 million as of March 31, 2024, and $27.1 million as of June 30, 2023.

Consumer originations, which include HELOCs, totaled $60.0 million during the second quarter of 2024, compared to $48.2 million in the first quarter of 2024 and $97.2 million in the second quarter of 2023.

The consumer pipeline was $24.5 million as of June 30, 2024, compared to $25.1 million as of March 31, 2024 and $28.4 million at June 30, 2023.

Commercial and commercial real estate originations during the third quarter of 2024 were $499.7 million, an increase of $93.7 million, or 23%, compared to the second quarter of 2024, and an increase of $405.6 million, or 431%, compared to the third quarter of 2023.

The Company continues to exercise a disciplined approach to lending and is benefiting from the investments made in recent years to attract talent from large regional banks across its markets.

This talent is onboarding significant new relationships, resulting in increased loan production.

Commercial and commercial real estate pipelines were $744.5 million as of September 30, 2024, an increase of $0.8 million from $743.8 million at June 30, 2024, and an increase of 187% from $259.4 million at September 30, 2023.

SBA originations totaled $18.4 million during the third quarter of 2024, an increase of $10.2 million compared to the second quarter of 2024, and an increase of $5.9 million compared to the third quarter of 2023.

Residential loans originated for sale in the secondary market totaled $23.2 million in the third quarter of 2024, compared to $21.4 million in the second quarter of 2024 and $17.6 million in the third quarter of 2023.

Residential saleable pipelines were $11.2 million as of September 30, 2024, compared to $12.1 million as of June 30, 2024 and $6.8 million as of September 30, 2023.

Residential loan production retained in the portfolio for the third quarter of 2024 was $51.5 million, compared to $42.4 million in the second quarter of 2024 and $44.0 million in the third quarter of 2023.

The pipeline of residential loans intended to be retained in the portfolio was $21.9 million as of September 30, 2024, compared to $24.7 million as of June 30, 2024, and $20.9 million as of September 30, 2023.

Consumer originations, which include HELOCs, totaled $65.1 million during the third quarter of 2024, compared to $60.0 million in the second quarter of 2024 and $76.5 million in the third quarter of 2023.

The consumer pipeline was $24.4 million as of September 30, 2024, compared to $24.5 million as of June 30, 2024 and $24.5 million at September 30, 2023.

Loan Concentrations

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 commercial real estate loan relationships greater than $10 million totaled $2.4 billion, representing 24% of the total portfolio at June 30, 2024, compared to $2.3 billion, or 23%, at December 31, 2023.

The Company’s ten largest commercial and commercial real estate funded and unfunded relationships at June 30, 2024 aggregated to $546.7 million, of which $400.6 million was funded, compared to $505.7 million at December 31, 2023, of which $348.3 million was funded.

Concentrations in construction and land development loans and 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 36% and 235%, respectively, at June 30, 2024, compared to 48% and 244%, respectively, at December 31, 2023.

Outstanding balances for commercial and commercial real estate loan relationships greater than $10 million totaled $2.6 billion, representing 26% of the total portfolio at September 30, 2024, compared to $2.3 billion, or 23%, at December 31, 2023.

The Company’s ten largest commercial and commercial real estate funded and unfunded relationships at September 30, 2024 aggregated to $550.7 million, of which $441.4 million was funded, compared to $505.7 million at December 31, 2023, of which $348.3 million was funded.

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

Construction and land development and CRE loan concentrations as a percentage of subsidiary bank total risk based capital were 36% and 241%, respectively, at September 30, 2024, compared to 48% and 244%, respectively, at December 31, 2023.

Regulatory guidance suggests limits of 100% and 300%, respectively.

On a consolidated basis, construction and land development and commercial real estate loans represent 34% and 222%, respectively, of total consolidated risk based capital as of June 30, 2024 compared to 45% and 228%, respectively, at December 31, 2023.

On a consolidated basis, construction and land development and commercial real estate loans represent 34% and 227%, respectively, of total consolidated risk based capital as of September 30, 2024 compared to 45% and 228%, respectively, at December 31, 2023.

To determine these ratios, the Company defines CRE in accordance with the guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) issued by the federal bank regulatory agencies in 2006 (and reinforced in 2015), which defines CRE loans as exposures secured by land development and construction, including 1-4 family residential construction, multi-family property, and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property (i.e., loans for which 50 percent or more of the source of repayment comes from third party, non-affiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property.

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

Nonperforming assets (“NPAs”) at June 30, 2024 totaled $66.8 million, and were comprised of $59.9 million of nonaccrual loans, and $6.9 million of other real estate owned (“OREO”), including $5.7 million of branches taken out of service.

Overall, NPAs decreased $5.9 million, or 8%, from $72.7 million as of December 31, 2023.

Nonperforming assets to total assets at June 30, 2024 decreased to 0.45% from 0.50% at December 31, 2023.

Compared to December 31, 2023, nonaccrual loans decreased $5.2 million, or 8%.

Approximately 58% of nonaccrual loans were secured with real estate at June 30, 2024.

Nonperforming loans to total loans outstanding at June 30, 2024 decreased to 0.60% from 0.65% at December 31, 2023.

See the tables below for the payment status of nonaccrual loans.

The table below sets forth details related to nonaccrual loans.

June 30, 2024

Nonaccrual Loans

(In thousands) Non-Current Current Total

Construction & land development $ 202 $ 1,307 $ 1,509

Nonperforming assets (“NPAs”) at September 30, 2024 totaled $87.3 million, and were comprised of $80.9 million of nonaccrual loans, and $6.4 million of other real estate owned (“OREO”), including $5.7 million of branches taken out of service.

Overall, NPAs increased $14.6 million, or 20%, from $72.7 million as of December 31, 2023.

NPAs to total assets at September 30, 2024 increased to 0.58% from 0.50% at December 31, 2023.

Compared to December 31, 2023, nonaccrual loans increased $15.8 million, or 24%.

Approximately 75% of nonaccrual loans were secured with real estate at September 30, 2024.

Nonperforming loans to total loans outstanding at September 30, 2024 increased to 0.79% from 0.65% at December 31, 2023.

A significant portion of nonaccrual loans have collateral values well in excess of balances outstanding, and therefore, no loss is expected.

The tables below set forth details related to nonaccrual loans.

September 30, 2024

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

Construction and land development $ 94 $ 744 $ 838 $ 177

Commercial real estate - owner occupied 2,664 7,002 9,666 1,188

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Consumer — 1,474 1,474 221

Total $ 24,249 $ 35,678 $ 59,927

Totals $ 38,160 $ 42,697 $ 80,857 $ 10,539

December 31, 2023

Nonaccrual Loans

(In thousands) Non-Current Current Total

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

Construction and land development $ — $ 824 $ 824 $ —

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Consumer — 1,182 1,182 257

Total $ 21,469 $ 43,635 $ 65,104

Totals $ 15,457 $ 49,647 $ 65,104 $ 2,905

In accordance with regulatory reporting requirements, loans are placed on nonaccrual following the Retail Classification of Loan interagency guidance.

The accrual of interest is generally discontinued on loans, except consumer loans, that become 90 days past due as to principal or interest unless collection of both principal and interest is assured by way of collateralization, guarantees or other security.

The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest unless collection of both principal and interest is assured by way of collateralization, guarantees or other security.

Consumer loans that become 120 days past due are generally charged off.

The loan carrying value is analyzed and any changes are appropriately made as described above quarterly.

The loan carrying value is analyzed and any changes are appropriately made quarterly, as described above.

In certain circumstances, the Company provides modifications of loans to borrowers experiencing financial difficulty, which the Company refers to as troubled borrower modifications (“TBMs”).

Loans that were modified as TBMs during the six months ended June 30, 2024 are included in “Note 4 - Loans”.

Loans that were modified as TBMs during the nine months ended September 30, 2024 are included in “Note 4 - Loans”.

Allowance for Credit Losses on Loans

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

The Company recorded provision expense of $4.9 million and $6.3 million, respectively, for the three and six months ended June 30, 2024, compared to $0.8 million and $30.8 million, respectively, for the three and six months ended June 30, 2023.

The Company recorded net charge-offs of $9.9 million and $13.6 million, respectively, in the three and six months ended June 30, 2024, compared to $0.7 million and $3.9 million, respectively, for the three and six months ended June 30, 2023.

The ratio of allowance for credit losses to total loans was 1.41% at June 30, 2024, 1.48% at December 31, 2023, and 1.58% at June 30, 2023.

The Company recorded provision expense of $6.3 million and $12.6 million, respectively, for the three and nine months ended September 30, 2024, compared to $2.7 million and $33.5 million, respectively, for the three and nine months ended September 30, 2023.

The Company recorded net charge-offs of $7.4 million and $21.0 million, respectively, in the three and nine months ended September 30, 2024, compared to $12.7 million and $16.6 million, respectively, for the three and nine months ended September 30, 2023.

The ratio of allowance for credit losses to total loans was 1.38% at September 30, 2024, 1.47% at December 31, 2023, and 1.49% at September 30, 2023.

Cash and Cash Equivalents and Liquidity Risk Management

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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 $749.5 million at June 30, 2024, compared to $447.2 million at December 31, 2023.

Higher cash and cash equivalent balances at June 30, 2024 are consistent with the Company’s strategic balance sheet management.

Cash and cash equivalents, including interest bearing deposits, totaled $637.1 million at September 30, 2024, compared to $447.2 million at December 31, 2023.

Higher cash and cash equivalent balances at September 30, 2024 are consistent with the Company’s strategic balance sheet management.

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.

Total uninsured deposits were estimated to be $4.1 billion at June 30, 2024, representing 34% of overall deposit accounts.

Total uninsured deposits were estimated to be $4.3 billion at September 30, 2024, representing 36% of overall deposit accounts.

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

Excluding such balances, the uninsured and uncollateralized deposits were 29% of total deposits at June 30, 2024.

Excluding such balances, the uninsured and uncollateralized deposits were 31% of total deposits at September 30, 2024.

The Company has liquidity sources as discussed below, including cash and lines of credit with the FRB and FHLB, that represent 145% of uninsured deposits, and 167% of uninsured and uncollateralized deposits.

In addition to $749.5 million in cash and cash equivalents at June 30, 2024, the Company had $5.6 billion in available borrowing capacity, including $4.3 billion in available collateralized lines of credit, $944.3 million of unpledged debt securities available as collateral for potential additional borrowings, and available unsecured lines of credit of $348.0 million.

In addition to $637.1 million in cash and cash equivalents at September 30, 2024, the Company had $5.7 billion in available borrowing capacity, including $4.1 billion in available collateralized lines of credit, $1.2 billion of unpledged debt securities available as collateral for potential additional borrowings, and available unsecured lines of credit of $348.0 million.

The Company may also access funding by acquiring brokered deposits.

Brokered deposits at June 30, 2024 totaled $325.0 million compared to $122.3 million at December 31, 2023.

Brokered deposits at September 30, 2024 totaled $256.5 million, compared to $122.3 million at December 31, 2023.

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

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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 2024, Seacoast Bank distributed $13.3 million to the Company and, at June 30, 2024, is eligible to distribute dividends to the Company of approximately $156.2 million without prior regulatory approval.

At June 30, 2024, the Company had cash and cash equivalents at the parent of approximately $101.5 million, compared to $101.7 million at December 31, 2023.

During the third quarter of 2024, Seacoast Bank distributed $15.4 million to the Company and, at September 30, 2024, is eligible to distribute dividends to the Company of approximately $172.1 million without prior regulatory approval.

At September 30, 2024, the Company had cash and cash equivalents at the parent of approximately $97.4 million, compared to $101.7 million at December 31, 2023.

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) 2024 2023

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The Company benefits from a diverse and granular deposit base that serves as a significant source of strength.

Total deposits increased $339.2 million, or 2.9%, to $12.1 billion at June 30, 2024 compared to December 31, 2023.

Noninterest demand deposits represented 28% and 30% of total deposits at June 30, 2024 and December 31, 2023, respectively.

Customer transaction account balances (noninterest demand and interest-bearing demand) represented 50% of total deposits at June 30, 2024, compared to 54% at December 31, 2023.

Customer sweep accounts totaled $262.1 million at June 30, 2024, decreasing $112.5 million, or 30%, from December 31, 2023.

Total deposits increased $466.7 million, or 4.0%, to $12.2 billion at September 30, 2024 compared to December 31, 2023.

Noninterest demand deposits represented 28% and 30% of total deposits at September 30, 2024 and December 31, 2023, respectively.

Customer transaction account balances (noninterest demand and interest-bearing demand) represented 49% of total deposits at September 30, 2024, compared to 54% at December 31, 2023.

Customer sweep accounts totaled $210.2 million at September 30, 2024, decreasing $164.4 million, or 44%, from December 31, 2023.

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, 2024 and December 31, 2023, long-term debt included $72.3 million and $72.2 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company.

At June 30, 2024, the average interest rate in effect on our outstanding subordinated debt related to trust preferred securities was 7.31%, compared to 7.34% at December 31, 2023.

At September 30, 2024 and December 31, 2023, long-term debt included $72.4 million and $72.2 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company.

At September 30, 2024, the average interest rate in effect on our outstanding subordinated debt related to trust preferred securities was 6.80%, compared to 7.34% at December 31, 2023.

All trust preferred securities are guaranteed by the Company on a junior subordinated basis.

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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.

Federal Home Loan Bank advances totaled $180.0 million at June 30, 2024 with a weighted average interest rate of 4.18%, compared to $50.0 million at December 31, 2023 with an interest rate of 3.23%.

Federal Home Loan Bank advances totaled $245.0 million at September 30, 2024 with a weighted average interest rate of 4.19%, compared to $50.0 million at December 31, 2023 with an interest rate of 3.23%.

Off-Balance Sheet Transactions

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

Unfunded commitments to extend credit were $2.7 billion at both June 30, 2024 and December 31, 2023.

Unfunded commitments to extend credit were $2.8 billion at September 30, 2024 and $2.7 billion at December 31, 2023.

In the normal course of business, the Company and Seacoast Bank enter into agreements, or are subject to regulatory agreements that result in cash, debt and dividend restrictions.

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Seacoast Bank may be required to maintain reserve balances with the FRB.

There was no reserve requirement at June 30, 2024 or December 31, 2023.

There was no reserve requirement at September 30, 2024 or December 31, 2023.

Under FRB regulation, Seacoast Bank is limited as to the amount it may loan to its affiliates, including the Company, unless such loans are collateralized by specified obligations.

At June 30, 2024, the maximum amount available for transfer from Seacoast Bank to the Company in the form of loans approximated $184.5 million, if the Company has sufficient acceptable collateral.

There were no loans made to affiliates during the six months ended June 30, 2024.

At September 30, 2024, the maximum amount available for transfer from Seacoast Bank to the Company in the form of loans approximated $196.1 million, if the Company has sufficient acceptable collateral.

There were no loans made to affiliates during the nine months ended September 30, 2024.

Capital Resources

The Company’s equity capital at June 30, 2024 increased $22.3 million, or 1%, from December 31, 2023 to $2.1 billion.

The Company’s equity capital at September 30, 2024 increased $85.8 million, or 4%, from December 31, 2023 to $2.2 billion.

Changes in equity included an increase from net income of $86.9 million, partially offset by the payment of common stock dividends totaling $46.2 million.

The ratio of shareholders’ equity to period end total assets was 14.25% and 14.46% at June 30, 2024 and December 31, 2023, respectively.

The ratio of tangible shareholders’ equity to tangible assets was 9.30% and 9.31% at June 30, 2024 and December 31, 2023, respectively.

The ratio of shareholders’ equity to period end total assets was 14.46% at both September 30, 2024 and December 31, 2023, respectively.

The ratio of tangible shareholders’ equity to tangible assets was 9.64% and 9.31% at September 30, 2024 and December 31, 2023, respectively.

Changes in the value of HTM securities are not reflected in shareholders’ equity under GAAP;

however, illustratively, if all HTM securities were presented at fair value, the tangible common equity ratio would have been 8.64% at June 30, 2024 and 8.68% at December 31, 2023.

Activity in shareholders’ equity for the six months ended June 30, 2024 and 2023 follows:

however, illustratively, if all HTM securities were presented at fair value, the tangible common equity ratio would have been 9.11% at September 30, 2024 and 8.68% at December 31, 2023.

Activity in shareholders’ equity for the nine months ended September 30, 2024 and 2023 follows:

(In thousands) 2024 2023

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Change in accumulated other comprehensive income 34,708 (24,238)

Ending balance at June 30, 2024 and 2023

Ending balance at September 30, 2024 and 2023

$ 2,193,850 $ 2,048,394

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Management’s use of risk-based capital ratios in its analysis of the Company’s capital adequacy are not GAAP financial measures.

Seacoast’s management uses these

measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company.

Seacoast’s management uses these measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company.

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 – Regulatory Capital”).

June 30, 2024 Seacoast

September 30, 2024 Seacoast

(Consolidated) Seacoast

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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 at least quarterly.

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 and 24 month periods beginning July 1, 2024, holding all balances on the balance sheet static.

This change in interest rates assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve nor changes in balance sheet size or mix.

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 and 24 month periods beginning October 1, 2024, holding all balances on the balance sheet static.

It is important to note that the results in the table below assume parallel shifts in the yield curve and do not take into account changes in the slope of the yield curve nor changes in balance sheet size or mix.

% Change in Projected Baseline

Net Interest Income

June 30, 2024

September 30, 2024

Change in Interest Rates 1-12 months 13-24 months

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis