SEACOAST BANKING CORP OF FLORIDA 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The purpose of this discussion and analysis is to aid in understanding significant changes in the financial condition of Seacoast Banking Corporation of Florida and its subsidiaries (“Seacoast” or the “Company”) and their results of operations. Nearly all of the Company’s operations are contained in its banking subsidiary, Seacoast National Bank (“Seacoast Bank” or the “Bank”). 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 months ended March 31, 2025 compared to the three months ended March 31, 2024 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be the balances as of March 31, 2025 compared to December 31, 2024. 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. See the following section for additional information regarding forward-looking statements. 30 Table of Contents For purposes of the following discussion, the words “Seacoast” or the “Company” refer to the combined entities of Seacoast Banking Corporation of Florida and its direct and indirect wholly owned subsidiaries. Special Cautionary Notice Regarding Forward-Looking Statements 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. 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. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: • The impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within Seacoast’s primary market areas, including the effects of inflationary pressures, changes in interest rates, tariffs or trade wars (including reduced consumer spending, supply chain issues, and adverse impacts to credit quality), slowdowns in economic growth or recession, and the potential for high unemployment rates, as well as the financial stress on borrowers and changes to customer and client behavior and credit risk as a result of the foregoing; • Potential impacts of adverse developments in the banking industry, including those highlighted by high-profile bank failures, and including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto (including increases in the cost of our deposit insurance assessments), the Company’s ability to effectively manage its liquidity risk and any growth plans, and the availability of capital and funding; • Governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes including overdraft and late fee caps (if implemented), including those that impact the money supply and inflation; • 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), sensitivities, and the shape of the yield curve; • Changes in accounting policies, rules, and practices; • Changes in retail distribution strategies, customer preferences and behavior generally and as a result of economic factors, including heightened or persistent inflation; • Changes in the availability and cost of credit and capital in the financial markets; • Changes in the prices, values and sales volumes of residential and commercial real estate, especially as they relate to the value of collateral supporting the Company’s loans; • The Company’s concentration in commercial real estate loans and in real estate collateral in Florida; • Seacoast’s ability to comply with any regulatory requirements and the risk that the regulatory environment may not be conducive to or may prohibit or delay the consummation of future mergers and/or business combinations, may increase the length of time and amount of resources required to consummate such transactions, and may reduce the anticipated benefit; • Inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; • The impact on the valuation of Seacoast’s investments due to market volatility or counterparty payment risk, as well as the effect of a decline in stock market prices on our fee income from our wealth management business; • Statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; 31 Table of Contents • The risks of mergers, acquisitions and divestitures, including Seacoast’s ability to continue to identify acquisition targets, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies; • Changes in technology or products that may be more difficult, costly, or less effective than anticipated; • The Company’s ability to identify and address increased cybersecurity risks, including those impacting vendors and other third parties which may be exacerbated by developments in generative artificial intelligence; • Fraud or misconduct by internal or external parties, which Seacoast may not be able to prevent, detect or mitigate; • Inability of Seacoast’s risk management framework to manage risks associated with the Company’s business; • Dependence on key suppliers or vendors to obtain equipment or services for the business on acceptable terms; • Reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy; • The effects of war or other conflicts, acts of terrorism, natural disasters, including hurricanes in the Company’s footprint, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions and/or increase costs, including, but not limited to, property and casualty and other insurance costs; • Seacoast’s ability to maintain adequate internal controls over financial reporting; • Potential claims, damages, penalties, fines, costs and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; • The risks that deferred tax assets could be reduced if estimates of future taxable income from the Company’s operations and tax planning strategies are less than currently estimated, the results of tax audit findings, challenges to our tax positions, or adverse changes or interpretations of tax laws; • The effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, non-bank financial technology providers, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions; • The failure of assumptions underlying the establishment of reserves for expected credit losses; • Risks related to, and the costs associated with ESG and anti-ESG matters, including the scope and pace of related rulemaking activity, disclosure requirements and potential litigation; • A deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the federal budget and economic policy, including the impact of tariffs and trade policies; • The risk that balance sheet, revenue growth, and loan growth expectations may differ from actual results; and • Other factors and risks described under “Risk Factors” herein and in any of the Company’s subsequent reports filed with the SEC and available on its website at www.sec.gov. All written or oral forward-looking statements attributable to Seacoast are expressly qualified in their entirety by this cautionary notice. The Company assumes no obligation to update, revise or correct any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law. Business Developments Proposed Acquisition of Heartland Bancshares, Inc. On February 27, 2025, the Company announced its proposed acquisition of Heartland Bancshares, Inc. The transaction, which is expected to close in the third quarter of 2025, will expand the Company’s presence in Central Florida. Results of Operations Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at 79 full-service branches across Florida, and through advanced mobile and online banking solutions. The Company’s financial results in the first quarter of 2025 include strong growth in loans and deposits supporting improved net interest income and net interest margin. Seacoast continues to prudently manage expenses while strategically investing to support continued growth. Highlights for the first quarter of 2025 include: • Net income of $31.5 million, or $0.37 per average diluted share. • Pre-tax pre-provision earnings 1 increased $2.7 million to $50.6 million from the prior quarter. • Growth in total deposits of $332.4 million, or 11.0% annualized. 32 Table of Contents • Noninterest bearing deposits grew $140.1 million, or 17.0% annualized. • Loans grew 5.6% on an annualized basis to $10.4 billion. • Net interest income of $118.5 million, an increase of $2.7 million, or 2%, from the fourth quarter of 2024. • Net interest margin was 3.48% compared to 3.39% in the prior quarter. • Cost of deposits declined 15 basis points to 1.93%. • Tangible book value per share increased 10% year over year to $16.71. • Strong capital position, with a Tier 1 capital ratio of 14.7%, and a tangible common equity to tangible assets ratio of 9.6%. The Company’s focus on organic customer growth and recent talent additions is generating momentum across its markets and business segments. For the first quarter of 2025, the Company reported net income of $31.5 million, or $0.37 per diluted share, a decrease of $2.6 million, or 8%, from the fourth quarter of 2024 and an increase of $5.5 million, or 21%, compared to the first quarter of 2024. Adjusted net income 1 for the first quarter of 2025 totaled $32.1 million, or $0.38 per diluted share, a decrease of $8.5 million, or 21%, compared to the fourth quarter of 2024 and an increase of $1.0 million, or 3%, compared to the first quarter of 2024. First Fourth First Quarter Quarter Quarter 2025 2024 2024 Return on average assets 0.83 % 0.89 % 0.71 % Return on average tangible assets 0.98 % 1.06 % 0.89 % Return on average tangible shareholders’ equity 10.17 10.90 9.55 Efficiency ratio 60.28 56.26 66.78 Adjusted return on average assets 1 0.85 % 1.06 % 0.85 % Adjusted return on average tangible assets 1 1.00 % 1.24 % 1.04 % Adjusted return on average tangible shareholders’ equity 1 10.35 12.74 11.15 Adjusted efficiency ratio 1 59.53 56.07 61.13 1 Non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and a reconciliation to GAAP. Net Interest Income and Margin Net interest income totaled $118.5 million in the first quarter of 2025, an increase of $2.7 million, or 2% , c ompared to the prior quarter, and an increase of $13.4 million, or 13%, compared to the prior year first quarter. The increase in the first quarter of 2025 was largely driven by lower deposit costs, which declined 15 basis points when compared to the fourth quarter of 2024. Securities income increased $2.4 million, or 9%, primarily the result of securities purchases during the first quarter of 2025. Interest income on loans declined by $1.4 million, or 1%, in the first quarter of 2025, with higher core yields more than offset by lower accretion on acquired loans and lower day count. Included in loan interest income was accretion on acquired loans of $8.2 million in the first quarter of 2025, $11.7 million in the fourth quarter of 2024, and $10.6 million in the first quarter of 2024. Net interest margin increased nine basis points to 3.48% in the first quarter of 2025 compared to 3.39% in the fourth quarter of 2024. Excluding the effects of accretion on acquired loans, net interest margin expanded 19 basis points to 3.24% in the first quarter of 2025 compared to 3.05% in the fourth quarter of 2024. Loan yields were 5.90%, a decrease of three basis points from the prior quarter attributed to lower accretion on acquired loans. Securities yields increased 11 basis points to 3.88%, compared to 3.77% in the prior quarter, benefiting from new purchases. The cost of deposits declined 15 basis points from 2.08% in the prior quarter to 1.93% in the first quarter of 2025. 1 Non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and a reconciliation to GAAP. 33 Table of Contents The following table details the trend for net interest income and margin results (on a FTE basis) 1 , the yield on earning assets and the rate paid on interest bearing liabilities for the periods specified: (In thousands, except ratios) Net Interest Income 1 Net Interest Margin 1 Yield on Earning Assets 1 Rate on Interest Bearing Liabilities First quarter 2025 $ 118,857 3.48 % 5.41 % 2.74 % Fourth quarter 2024 116,115 3.39 % 5.43 % 2.96 % First quarter 2024 105,298 3.24 % 5.41 % 3.20 % 1 On a FTE basis, a non-GAAP measure - see “ Explanation of Certain Unaudited Non-GAAP Financial Measures ” for more information and a reconciliation to GAAP. Average loans increased $169.0 million, or 2%, for the first quarter of 2025 compared to the fourth quarter of 2024, and increased $348.8 million, or 3%, from the first quarter of 2024. Average loans as a percentage of average earning assets totaled 75% for the first quarter of 2025, 75% for the fourth quarter of 2024 and 77% for the first quarter of 2024. During the first quarter of 2025, average investment securities increased $229.0 million, or 8.0%, compared to the fourth quarter of 2024, and increased $493.7 million, or 19.1%, compared to the first quarter of 2024. Securities yields increased eleven basis points to 3.88% during the first quarter of 2025 from 3.77% in the fourth quarter of 2024, benefiting from recent purchases. The cost of average interest-bearing liabilities decreased 22 basis points in the first quarter of 2025 to 2.74% from 2.96% in the fourth quarter of 2024, and decreased 45 basis points from 3.20% in the first quarter of 2024. The cost of average total deposits (including noninterest bearing demand deposits) was 1.93% in the first quarter of 2025, 2.08% in the fourth quarter of 2024 and 2.19% in the first quarter of 2024. During the first quarter of 2025, average transaction deposits (noninterest and interest-bearing demand) increased $0.9 million compared to the fourth quarter of 2024, and increased $247.6 million, or 4%, compared to the first quarter of 2024. The Company’s deposit mix remains favorable, with 87% of average deposit balances compromised of savings, money market, and demand deposits for the three months ended March 31, 2025. Average balances of sweep repurchase agreements with customers decreased $8.6 million, or 4%, from the fourth quarter of 2024 and decreased $132.1 million, or 40%, compared to the first quarter of 2024. The average rate on customer sweep repurchase accounts was 2.73% for the first quarter of 2024, compared to 3.00% for the fourth quarter of 2024, and 3.71% for the first quarter of 2024. The Company had an average balance of $382.8 million in FHLB borrowings outstanding for the first quarter of 2025, with an average interest rate of 4.32%, compared to $245.0 million for the fourth quarter of 2024, with an average interest rate of 4.26%, and $102.4 million for the first quarter of 2024, with an average interest rate of 3.77%. Long-term debt balances averaged $107.0 million in the first quarter of 2025, $106.9 million in the fourth quarter of 2024, and $106.4 million in the first quarter of 2024. The average rate on long-term debt for the first quarter of 2025 was 6.44%, a decrease of twenty-five basis points compared to the fourth quarter of 2024 and a decrease of 87 basis points compared to the first quarter of 2024. The following tables detail average balances, net interest income and margin results (on a FTE basis, a non-GAAP measure) for the periods presented: Average Balances, Interest Income and Expenses, Yields and Rates 1 2025 2024 First Quarter Fourth Quarter First Quarter Average Yield/ Average Yield/ Average Yield/ (In thousands, except ratios) Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Earning assets: Securities: Taxable ` $ 3,073,108 $ 29,381 3.88 % $ 2,843,755 $ 26,945 3.77 % $ 2,578,938 $ 22,393 3.47 % Nontaxable 5,436 41 3.06 5,795 41 2.81 5,907 41 2.75 Total Securities 3,078,544 29,422 3.88 2,849,550 26,986 3.77 2,584,845 22,434 3.47 Federal funds sold 265,503 2,945 4.50 470,154 5,690 4.81 370,494 5,056 5.49 Interest bearing deposits with other banks and other investments 105,195 1,254 4.83 102,961 1,262 4.88 95,619 1,128 4.74 Total Loans, net 10,383,497 150,973 5.90 10,214,493 152,303 5.93 10,034,658 147,308 5.90 Total Earning Assets 13,832,739 184,594 5.41 13,637,158 186,241 5.43 13,085,616 175,926 5.41 Allowance for credit losses (138,300) (140,409) (148,422) Cash and due from banks 158,750 167,197 166,734 Premises and equipment, net 108,651 108,589 112,391 Intangible assets 801,687 806,710 825,531 Bank owned life insurance 309,831 307,256 299,765 Other assets including deferred tax assets 322,284 317,540 349,161 Total Assets $ 15,395,642 $ 15,204,041 $ 14,690,776 Liabilities and Shareholders’ Equity Interest-bearing liabilities: Interest-bearing demand $ 2,706,065 $ 11,069 1.66 % $ 2,581,733 $ 11,843 1.82 % $ 2,719,334 $ 15,266 2.26 % Savings 529,711 698 0.53 521,682 582 0.44 628,329 540 0.35 Money market 4,149,460 31,859 3.11 4,078,714 34,969 3.41 3,409,310 31,728 3.74 Time deposits 1,647,938 14,973 3.68 1,686,004 16,726 3.95 1,590,070 17,121 4.33 Securities sold under agreements to repurchase 201,271 1,357 2.73 209,909 1,584 3.00 333,386 3,079 3.71 Federal Home Loan Bank borrowings 382,836 4,081 4.32 245,000 2,625 4.26 102,418 960 3.77 Long-term debt, net 107,038 1,700 6.44 106,881 1,797 6.69 106,373 1,934 7.31 Total Interest-Bearing Liabilities 9,724,319 65,737 2.74 9,429,923 70,126 2.96 8,889,220 70,628 3.20 Noninterest demand 3,294,149 3,417,539 3,528,489 Other liabilities 162,179 153,527 154,686 Total Liabilities 13,180,647 13,000,989 12,572,395 Shareholders’ equity 2,214,995 2,203,052 2,118,381 Total Liabilities & Equity $ 15,395,642 $ 15,204,041 $ 14,690,776 Cost of deposits 1.93 % 2.08 % 2.19 % Interest expense as a % of earning assets 1.93 % 2.05 % 2.17 % Net interest income as a % of earning assets $ 118,857 3.48 % $ 116,115 3.39 % $ 105,298 3.24 % 1 On a FTE basis, a non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and a reconciliation to GAAP. All yields and rates have been computed on an annual basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances. 34 Table of Contents Noninterest Income Noninterest income totaled $22.2 million for the first quarter of 2025, an increase of $5.1 million, or 30%, compared to the fourth quarter of 2024 and an increase of $1.7 million, or 8%, from the first quarter of 2024. Noninterest income is detailed as follows: First Fourth First Quarter Quarter Quarter (In thousands) 2025 2024 2024 Service charges on deposit accounts $ 5,180 $ 5,138 $ 4,960 Interchange income 1,807 1,860 1,888 Wealth management income 4,248 4,019 3,540 Mortgage banking fees 404 326 381 Insurance agency income 1,620 1,151 1,291 BOLI income 2,468 2,627 2,264 Other 6,257 10,335 5,944 21,984 25,456 20,268 Securities gains (losses), net 196 (8,388) 229 Total $ 22,180 $ 17,068 $ 20,497 Service charges on deposits were $5.2 million in the first quarter of 2025, compared to $5.1 million in the fourth quarter of 2024, and $5.0 million in the first quarter of 2024. The Company’s investments in talent and market expansion across Florida have resulted in continued growth in treasury management services to commercial customers. Interchange income remained flat compared to the fourth quarter of 2024 and decreased $0.1 million, or 4%, compared to the first quarter of 2024. Wealth management income, including trust fees and brokerage commissions and fees, was $4.2 million in the first quarter of 2025, compared to $4.0 million in the fourth quarter of 2024, and $3.5 million for the first quarter of 2024. The wealth management division continues to demonstrate success in building relationships, and assets under management have increased $74.0 million, or 4%, from December 31, 2024, to $2.1 billion at March 31, 2025. Insurance agency income totaled $1.6 million in the first quarter of 2025, compared to $1.2 million in the fourth quarter of 2024, and $1.3 million in the first quarter of 2024, reflecting seasonally strong results and continued growth in the business. BOLI income totaled $2.5 million for the first quarter of 2025, a decrease of $0.2 million, or 4%, compared to the fourth quarter of 2024, and an increase of $0.2 million, or 9%, compared to the first quarter of 2024. Other income was $6.3 million in the first quarter of 2025, a decrease of $4.1 million, or 39%, compared to the fourth quarter of 2024, and an increase of $0.3 million, or 5%, compared to the first quarter of 2024. 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 first quarter of 2025, losses of $8.4 million in the fourth quarter of 2024 , and gains of $0.2 million in the first quarter of 2024. The fourth quarter of 2024 included the strategic repositioning of a portion of the AFS securities portfolio. 35 Table of Contents Noninterest Expenses Noninterest expense for the first quarter of 2025 totaled $90.6 million, an increase of $5.0 million, or 6%, compared to the fourth quarter of 2024, and an increase of $0.2 million from the first quarter of 2024. Seacoast continues to prudently manage expenses while strategically investing to support continued growth. Noninterest expenses are detailed as follows: First Fourth First Quarter Quarter Quarter (In thousands) 2025 2024 2024 Salaries and wages $ 42,248 $ 42,378 $ 40,304 Employee benefits 8,861 6,548 7,889 Outsourced data processing costs 8,504 8,307 12,118 Occupancy 7,350 7,234 8,037 Furniture and equipment 2,128 2,004 2,011 Marketing 2,748 2,126 2,655 Legal and professional fees 2,740 2,807 2,151 FDIC assessments 2,194 2,274 2,158 Amortization of intangibles 5,309 5,587 6,292 OREO expense and net loss (gain) on sale 241 84 (26) Provision for credit losses on unfunded commitments 150 250 250 Merger-related charges 1,051 — — Other 7,073 5,976 6,532 Total $ 90,597 $ 85,575 $ 90,371 Salaries and wages totaled $42.2 million for the first quarter of 2025, $42.4 million for the fourth quarter of 2024, and $40.3 million for the first quarter of 2024. The first quarter of 2025 reflects the successful recruiting and onboarding of banking teams and talent across our footprint. During the first quarter of 2025, the Company added 10 revenue producing bankers to the team. During the first quarter of 2025, employee benefits, which include costs associated with the Company’s self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $8.9 million, an increase of $2.3 million, or 35%, compared to the fourth quarter of 2024, and an increase of $1.0 million, or 12%, compared to the first quarter of 2024. The increase compared to the fourth quarter of 2024 reflects higher seasonal payroll taxes and 401(k) contributions. 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 $8.5 million, $8.3 million, and $12.1 million for the first quarter of 2025, fourth quarter of 2024, and first quarter of 2024, respectively. Total occupancy and furniture and equipment expenses were $9.5 million in the first quarter of 2025, $9.2 million in the fourth quarter of 2024, and $10.0 million in the first quarter of 2024. During the quarter, the Company opened two new branch locations. Marketing expenses totaled $2.7 million in the first quarter of 2025, $2.1 million in the fourth quarter of 2024, and $2.7 million in the first quarter of 2024. Changes between periods are primarily associated with the timing of various campaigns to support customer growth initiatives. Legal and professional fees for the first quarter of 2025 were $2.7 million, a decrease of $0.1 million, or 2%, compared to the fourth quarter of 2024, and an increase of $0.6 million, or 27%, compared to the first quarter of 2024. Provision for Credit Losses The provision for credit losses was $9.3 million for the first quarter of 2025, compared to $3.7 million for the fourth quarter of 2024, and $1.4 million for the first quarter of 2024. The increase in provision in the first quarter of 2025 reflects higher loan growth and recent heightened volatility in macroeconomic conditions. Allowance coverage of 1.34% remains flat compared to December 31, 2024. 36 Table of Contents Income Taxes For the first quarter of 2025, the Company recorded tax expense of $9.4 million, a decrease of $0.1 million, or 1%, compared to the fourth quarter of 2024 and an increase of $1.6 million, or 20%, compared to the first quarter of 2024. The effective tax rate for the first quarter of 2025 was 23.0%, compared to 21.8% in the fourth quarter of 2024 and 23.1% in the first quarter of 2024. Explanation of Certain Unaudited Non-GAAP Financial Measures This report contains financial information determined by methods other than GAAP. The financial highlights provide reconciliations between GAAP and adjusted financial measures including net income, FTE net interest income, noninterest income, noninterest expense, tax adjustments, net interest margin and other financial ratios. Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’ understanding of the Company’s business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might define or calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP. 37 Table of Contents Reconciliation of Non-GAAP Measures First Fourth First Quarter Quarter Quarter (Amounts in thousands, except per share data) 2025 2024 2024 Net income $ 31,464 $ 34,085 $ 26,006 Total noninterest income $ 22,180 $ 17,068 $ 20,497 Securities (gains) losses, net (196) 8,388 (229) Total adjustments to noninterest income (196) 8,388 (229) Total adjusted noninterest income $ 21,984 $ 25,456 $ 20,268 Total noninterest expense $ 90,597 $ 85,575 $ 90,371 Merger-related charges (1,051) — — Business continuity expenses - hurricane events — (280) — Branch reductions and other expense initiatives — — (7,094) Adjustments to noninterest expense (1,051) (280) (7,094) Adjusted noninterest expense $ 89,546 $ 85,295 $ 83,277 Income taxes $ 9,386 $ 9,513 $ 7,830 Tax effect of adjustments 217 2,197 1,739 Adjusted income taxes 9,603 11,710 9,569 Adjusted net income $ 32,102 $ 40,556 $ 31,132 Earnings per diluted share, as reported $ 0.37 $ 0.40 $ 0.31 Adjusted earnings per diluted share 0.38 0.48 0.37 Average diluted shares outstanding 85,388 85,302 85,270 Adjusted noninterest expense $ 89,546 $ 85,295 $ 83,277 Provision for credit losses on unfunded commitments (150) (250) (250) OREO expense and net (gain) loss on sale (241) (84) 26 Amortization of intangibles (5,309) (5,587) (6,292) Net adjusted noninterest expense $ 83,846 $ 79,374 $ 76,761 Net adjusted noninterest expense $ 83,846 $ 79,374 $ 76,761 Average tangible assets $ 14,593,955 $ 14,397,331 $ 13,865,245 Net adjusted noninterest expense to average tangible assets 2.33 % 2.19 % 2.23 % Net revenue $ 140,697 $ 132,872 $ 125,575 Total adjustments to net revenue (196) 8,388 (229) Impact of FTE adjustment 340 311 220 Adjusted net revenue on a FTE basis $ 140,841 $ 141,571 $ 125,566 Adjusted efficiency ratio 59.53 % 56.07 % 61.13 % Net interest income $ 118,517 $ 115,804 $ 105,078 Impact of FTE adjustment 340 311 220 Net interest income including FTE adjustment 118,857 116,115 105,298 Total noninterest income 22,180 17,068 20,497 Total noninterest expense less provision for credit losses on unfunded commitments 90,447 85,325 90,121 Pre-tax pre-provision earnings 50,590 47,858 35,674 38 Table of Contents First Fourth First Quarter Quarter Quarter (Amounts in thousands, except per share data) 2025 2024 2024 Total adjustments to noninterest income (196) 8,388 (229) Total adjustments to noninterest expense including OREO expense and net (gain) loss on sale 1,292 364 7,068 Adjusted pre-tax pre-provision earnings $ 51,686 $ 56,610 $ 42,513 Average assets $ 15,395,642 $ 15,204,041 $ 14,690,776 Less average goodwill and intangible assets (801,687) (806,710) (825,531) Average tangible assets $ 14,593,955 $ 14,397,331 $ 13,865,245 Return on average assets (ROA) 0.83 % 0.89 % 0.71 % Impact of other adjustments for adjusted net income 0.02 0.17 0.14 Adjusted ROA 0.85 1.06 0.85 Return on average assets 0.83 0.89 0.71 Impact of removing average intangible assets and related amortization 0.15 0.17 0.18 Return on average tangible assets (ROTA) 0.98 1.06 0.89 Impact of other adjustments for adjusted net income 0.02 0.18 0.15 Adjusted ROTA 1.00 % 1.24 % 1.04 % Average shareholders’ equity $ 2,214,995 $ 2,203,052 $ 2,118,381 Less average goodwill and intangible assets (801,687) (806,710) (825,531) Average tangible equity $ 1,413,308 $ 1,396,342 $ 1,292,850 Return on average shareholders’ equity 5.76 % 6.16 % 4.94 % Impact of removing average intangible assets and related amortization 4.41 4.74 4.61 Return on average tangible common equity (ROTCE) 10.17 10.90 9.55 Impact of other adjustments for adjusted net income 0.18 1.84 1.60 Adjusted ROTCE 10.35 % 12.74 % 11.15 % Loan interest income 1 $ 150,973 $ 152,303 $ 147,308 Accretion on acquired loans (8,221) (11,717) (10,595) Loan interest income excluding accretion on acquired loans 1 $ 142,752 $ 140,586 $ 136,713 Yield on loans 1 5.90 % 5.93 % 5.90 % Impact of accretion on acquired loans (0.32) (0.45) (0.42) Yield on loans excluding accretion on acquired loans 1 5.58 % 5.48 % 5.48 % Net interest income 1 $ 118,857 $ 116,115 $ 105,298 Accretion on acquired loans (8,221) (11,717) (10,595) Net interest income excluding accretion on acquired loans 1 $ 110,636 $ 104,398 $ 94,703 Net interest margin 1 3.48 % 3.39 % 3.24 % Impact of accretion on acquired loans (0.24) (0.34) (0.33) Net interest margin excluding accretion on acquired loans 1 3.24 % 3.05 % 2.91 % Securities interest income 1 $ 29,422 $ 26,986 $ 22,434 39 Table of Contents First Fourth First Quarter Quarter Quarter (Amounts in thousands, except per share data) 2025 2024 2024 FTE adjustment to securities (7) (7) (7) Securities interest income excluding FTE adjustment $ 29,415 $ 26,979 $ 22,427 Loan interest income 1 150,973 152,303 147,308 FTE adjustment to loans (333) (304) (213) Loan interest income excluding FTE adjustment 150,640 151,999 147,095 Net interest income 1 118,857 116,115 105,298 FTE adjustments to securities (7) (7) (7) FTE adjustments to loans (333) (304) (213) Net interest income excluding FTE adjustments $ 118,517 $ 115,804 $ 105,078 1 On a FTE basis. All yields and rates have been computed using amortized cost. Financial Condition Total assets as of March 31, 2025 were $15.7 billion, an increase of $556.2 million, or 4%, from December 31, 2024. Securities 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 March 31, 2025, the Company had $2.6 billion in AFS securities and $624.7 million in HTM securities. The Company’s total debt securities portfolio increased $390.9 million from December 31, 2024. The first quarter of 2025 included strategic purchases in connection with the announcement of the Heartland acquisition. The Company purchased $412 million in AFS securities at a 5.7% taxable equivalent yield, which were funded with FHLB borrowings at a weighted-average rate of 4.3% until the expected date of acquisition close. Debt securities generally return principal and interest monthly. The modified duration of the AFS securities portfolio and the total portfolio was 4.7 and 5.0, respectively, at March 31, 2025 compared to 4.7 and 4.9, respectively, at December 31, 2024. At March 31, 2025, AFS securities had gross unrealized losses of $183.5 million and gross unrealized gains of $11.7 million, compared to gross unrealized losses of $211.3 million and gross unrealized gains of $3.5 million at December 31, 2024. The credit quality of the Company’s securities holdings is primarily investment grade. U.S. Treasury securities, obligations of U.S. government agencies, and obligations of U.S. government sponsored entities totaled $2.9 billion, or 88%, of the total portfolio. The portfolio includes $124.0 million, with a fair value of $117.2 million, in private label residential and commercial mortgage-backed securities and collateralized mortgage obligations. Included are $114.4 million, with a fair value of $107.7 million, in private label residential securities with weighted-average credit support of 23%. The collateral underlying these mortgage investments includes both fixed-rate and adjustable-rate residential mortgage loans. Commercial securities totaled $9.6 million, with a fair value of $9.5 million. These securities have weighted-average credit support of 29%. The collateral underlying these mortgages are primarily pooled multifamily loans. The Company also has invested $265.5 million in floating rate CLOs. CLOs are special purpose vehicles that purchase first lien broadly syndicated corporate loans while providing support to senior tranche investors. As of March 31, 2025, all of the Company’s CLOs were in AAA/AA tranches with weighted-average credit support of 32%. The Company utilizes credit models with assumptions of loan level defaults, recoveries, and prepayments to evaluate each security for potential credit losses. The result of this analysis did not indicate expected credit losses. HTM securities consist solely of mortgage-backed securities and collateralized mortgage obligations guaranteed by U.S. government-sponsored entities, each of which is expected to recover any price depreciation over its holding period as the debt 40 Table of Contents securities move to maturity. 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 March 31, 2025, 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 March 31, 2025, no allowance for credit losses has been recorded. Loan Portfolio Loans, net of unearned income and excluding the allowance for credit losses, were $10.4 billion at March 31, 2025, an increase of $143.1 million, or 5.6% annualized, from December 31, 2024. 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 $426 thousand, and the average commercial loan size is $838 thousand at March 31, 2025, 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 March 31, 2025 and December 31, 2024 for portfolio loans, purchased credit deteriorated loans and loans purchased which are not considered credit deteriorated (“Non-PCD”) as defined in “Note 4 - Loans.” March 31, 2025 (In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total % to Total Loans Construction and land development $ 559,883 $ 58,076 $ 534 $ 618,493 6 % Commercial real estate - owner occupied 1,222,670 461,936 28,973 1,713,579 16 Commercial real estate - non-owner occupied 2,329,640 1,091,992 91,768 3,513,400 34 Residential real estate 1,934,625 704,205 14,182 2,653,012 25 Commercial and financial 1,551,312 181,145 20,633 1,753,090 17 Consumer 154,402 36,846 199 191,447 2 Totals $ 7,752,532 $ 2,534,200 $ 156,289 $ 10,443,021 100 % December 31, 2024 (In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total % to Total Loans Construction and land development $ 568,148 $ 79,370 $ 535 $ 648,053 6 % Commercial real estate - owner occupied 1,177,538 477,459 31,632 1,686,629 16 Commercial real estate - non-owner occupied 2,243,056 1,156,849 103,903 3,503,808 34 Residential real estate 1,882,955 719,589 14,241 2,616,785 26 Commercial and financial 1,424,689 199,146 27,519 1,651,354 16 Consumer 155,786 37,282 253 193,321 2 Totals $ 7,452,172 $ 2,669,695 $ 178,083 $ 10,299,950 100 % The amortized cost basis of loans included net deferred costs of $47.0 million at March 31, 2025 and $43.9 million at December 31, 2024. At March 31, 2025, the remaining fair value adjustments on acquired loans were $119.5 million, or 4.3%, of the outstanding acquired loan balances, compared to $128.1 million, or 4.3%, of the acquired loan balances at December 31, 2024. The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis. Construction and land development loans decreased $29.6 million, or 5%, totaling $618.5 million at March 31, 2025, compared to December 31, 2024. These loans, extended to both commercial and consumer customers, are collateralized by and for the 41 Table of Contents purpose of funding land development and construction projects. Repayment is from the proceeds of the sale, refinancing or permanent financing of the property. Commercial real estate owner occupied loans totaled $1.7 billion at March 31, 2025, an increase of $27.0 million, or 2% compared to December 31, 2024. Commercial real estate owner occupied loans are extended to commercial customers for the purpose of acquiring or refinancing real estate to be occupied by the borrower's business. These loans are collateralized by the subject property and the repayment of these loans is largely dependent on the performance of the company occupying the property. Commercial real estate non-owner occupied loans increased $9.6 million, totaling $3.5 billion at March 31, 2025 compared to $3.5 billion at December 31, 2024. 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 $1.2 billion at March 31, 2025, with an average loan size of $2.4 million. This segment targets grocery or credit tenant-anchored shopping plazas, single credit tenant retail buildings, smaller outparcels, and other small retail units. The second-largest segment in the non-owner occupied CRE portfolio is office properties, which totaled $550.7 million at March 31, 2025, an average loan size of $1.7 million. This segment targets low to mid-rise suburban offices and is broadly diversified across many types of professional services, with limited exposure to central business districts. Other non-owner occupied CRE loans include $473.7 million in loans collateralized by industrial or warehouse properties, $405.2 million collateralized by multi-family residential properties, $323.5 million collateralized by hotels or motels, and $580.1 million collateralized by other property types, including restaurants, schools and recreation centers. Residential real estate loans increased $36.2 million to $2.7 billion during the three months ended March 31, 2025. Included in the balance as of March 31, 2025, were $1.0 billion of fixed rate mortgages, $1.0 billion of adjustable rate mortgages and $619.3 million in home equity loans and HELOCs, compared to $1.0 billion, $970.2 million and $614.7 million, respectively, at December 31, 2024. Substantially all residential mortgage 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 31% of the loans being in first lien position at March 31, 2025, compared to an average LTV of 64%, with 31% of the portfolio being in the first lien position at December 31, 2024. Commercial and financial loans increased $101.7 million, or 6%, from December 31, 2024, totaling $1.8 billion at March 31, 2025. The purpose of these loans may be to provide working capital, asset acquisition or for other business purposes, and are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners. 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. The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $1.9 million, or 1%, to total $191.4 million at March 31, 2025, compared to $193.3 million at December 31, 2024. 42 Table of Contents 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. First Fourth First Quarter Quarter Quarter (In thousands) 2025 2024 2024 Commercial/commercial real estate loan pipeline at period end $ 884,878 $ 605,357 $ 498,617 Commercial/commercial real estate loans closed 405,449 711,506 260,032 SBA pipeline at period end 19,233 28,793 15,630 SBA originations 17,388 36,836 18,944 Residential pipeline - saleable at period end 15,495 6,727 9,279 Residential loans - sold 15,531 11,764 15,305 Residential pipeline - portfolio at period end 37,532 35,068 24,364 Residential loans - retained 70,322 99,916 51,435 Consumer pipeline at period end 24,433 17,384 25,057 Consumer originations 46,732 42,607 48,244 Commercial and commercial real estate originations during the first quarter of 2025 were $405.4 million, a decrease of $306.1 million, or 43%, compared to the fourth quarter of 2024, and an increase of $145.4 million, or 56%, compared to the first quarter of 2024. Commercial and commercial real estate pipelines were $884.9 million as of March 31, 2025, an increase of $279.5 million, or 46%, from $605.4 million at December 31, 2024, and an increase of $386.3 million, or 77% from $498.6 million at March 31, 2024. 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. SBA originations totaled $17.4 million during the first quarter of 2025, a decrease of $19.4 million compared to the fourth quarter of 2024, and a decrease of $1.6 million compared to the first quarter of 2024. Residential loans originated for sale in the secondary market totaled $15.5 million in the first quarter of 2025, compared to $11.8 million in the fourth quarter of 2024 and $15.3 million in the first quarter of 2024. Residential saleable pipelines were $15.5 million as of March 31, 2025, compared to $6.7 million as of December 31, 2024 and $9.3 million as of March 31, 2024. Residential loan production retained in the portfolio for the first quarter of 2025 was $70.3 million, compared to $99.9 million in the fourth quarter of 2024 and $51.4 million in the first quarter of 2024. The pipeline of residential loans intended to be retained in the portfolio was $37.5 million as of March 31, 2025, compared to $35.1 million as of December 31, 2024, and $24.4 million as of March 31, 2024. Consumer originations, which include HELOCs, totaled $46.7 million during the first quarter of 2025, compared to $42.6 million in the fourth quarter of 2024 and $48.2 million in the first quarter of 2024. The consumer pipeline was $24.4 million as of March 31, 2025, compared to $17.4 million as of December 31, 2024 and $25.1 million at March 31, 2024. 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 $2.8 billion, representing 27% of the total portfolio at March 31, 2025, compared to $2.7 billion, or 26%, at December 31, 2024. The Company’s ten largest commercial and commercial real estate funded and unfunded relationships at March 31, 2025 aggregated to $540.8 million, of which $463.3 million was funded, compared to $547.5 million at December 31, 2024, of which $433.0 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 43 Table of Contents were 36% and 236%, respectively, at March 31, 2025, compared to 38% and 237%, respectively, at December 31, 2024. 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 220%, respectively, of total consolidated risk based capital as of March 31, 2025 compared to 36% and 224%, respectively, at December 31, 2024. 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. Loans to REITs and unsecured loans to developers that closely correlate to the inherent risks in CRE markets would also be considered CRE loans under the Guidance. Loans on owner-occupied CRE are generally excluded. In addition, the Company is subject to a geographic concentration of credit because it primarily operates in Florida. Nonperforming Loans, Troubled Borrower Modifications, OREO and Credit Quality NPAs at March 31, 2025 totaled $78.2 million, and were comprised of $71.0 million of nonaccrual loans, and $7.2 million of OREO, including $5.4 million of branches taken out of service. Overall, NPAs decreased $20.7 million, or 21%, from $98.9 million as of December 31, 2024. NPAs to total assets at March 31, 2025 decreased to 0.50% from 0.65% at December 31, 2024. Compared to December 31, 2024, nonaccrual loans decreased $21.4 million, or 23%. Approximately 69% of nonaccrual loans were secured with real estate at March 31, 2025. Nonperforming loans to total loans outstanding at March 31, 2025 decreased to 0.68% from 0.90% at December 31, 2024. 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. March 31, 2025 (In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans Construction and land development $ 492 $ 622 $ 1,114 Commercial real estate - owner occupied — 7,620 7,620 Commercial real estate - non-owner occupied 21,426 931 22,357 Residential real estate 5,570 12,467 18,037 Commercial and financial 2,713 15,105 17,818 Consumer — 4,072 4,072 Totals $ 30,201 $ 40,817 $ 71,018 December 31, 2024 (In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans Construction and land development $ 492 $ 660 $ 1,152 Commercial real estate - owner occupied 2,622 6,118 8,740 Commercial real estate - non-owner occupied 29,449 433 29,882 Residential real estate 6,462 17,432 23,894 Commercial and financial 2,703 17,806 20,509 Consumer 2,416 5,853 8,269 Totals $ 44,144 $ 48,302 $ 92,446 44 Table of Contents 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 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 quarterly, as described above. In certain circumstances, the Company provides modifications of loans to borrowers experiencing financial difficulty, which the Company refers to as TBMs. Loans that were modified as TBMs during the three months ended March 31, 2025 are included in “Note 4 - Loans”. Allowance for Credit Losses on Loans Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The forecasts of future economic conditions are over a period that has been deemed reasonable and supportable, and in segments where it can no longer develop reasonable and supportable forecasts, the Company reverts to longer-term historical loss experience to estimate losses over the remaining life of the loans. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments. The ratio of allowance for credit losses to total loans was 1.34% at March 31, 2025, 1.34% at December 31, 2024, and 1.47% at March 31, 2024. Cash and Cash Equivalents and Liquidity Risk Management Liquidity risk involves the risk of being unable to fund assets with the appropriate duration and rate-based liability, as well as the risk of not being able to meet unexpected cash needs. Liquidity planning and management are necessary to ensure the ability to fund operations cost effectively and to meet current and future potential obligations such as loan commitments and unexpected deposit outflows. Funding sources primarily include customer-based deposits, collateral-backed borrowings, brokered deposits, cash flows from operations, cash flows from the loan and investment portfolios and asset sales, primarily secondary marketing for residential real estate mortgages. 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 $500.6 million at March 31, 2025, compared to $476.6 million at December 31, 2024. 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 $4.7 billion at March 31, 2025, representing 37% 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 31% of total deposits at March 31, 2025. The Company has liquidity sources as discussed below, including cash and lines of credit with the FRB and FHLB, that represent 136% of uninsured deposits, and 162% of uninsured and uncollateralized deposits. In addition to $500.6 million in cash and cash equivalents at March 31, 2025, the Company had $5.8 billion in available borrowing capacity, including $3.7 billion in available collateralized lines of credit, $1.7 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 March 31, 2025 totaled $262.5 million, compared to $293.6 million at December 31, 2024. Contractual maturities for assets and liabilities are reviewed to meet current and expected future liquidity requirements. Sources of liquidity are maintained through a portfolio of high-quality marketable assets, such as residential mortgage loans, debt securities available-for-sale and interest-bearing deposits. The Company is also able to provide short-term financing of its activities by selling, under an agreement to repurchase, United States Treasury and Government agency debt securities not pledged to secure public deposits or trust funds. 45 Table of Contents 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 first quarter of 2025, Seacoast Bank distributed $34.9 million to the Company. At March 31, 2025, the Company had cash and cash equivalents at the holding company of approximately $114.5 million, compared to $95.8 million at December 31, 2024. Deposits and Borrowings Customer relationship funding is detailed in the following table for the periods specified: March 31, December 31, (In thousands, except ratios) 2025 2024 Noninterest demand $ 3,492,491 $ 3,352,372 Interest-bearing demand 2,734,260 2,667,843 Money market 4,154,682 4,086,362 Savings 534,991 519,977 Time deposits 1,395,911 1,371,522 Brokered time certificates 262,461 244,351 Total deposits $ 12,574,796 $ 12,242,427 Securities sold under agreements to repurchase 201,128 232,071 Total customer funding 1 $ 12,513,463 $ 12,180,860 Noninterest demand deposit mix 28 % 27 % 1 Total deposits and securities sold under agreements to repurchase, excluding brokered deposits. Securities sold under agreements to repurchase consists of customer sweep accounts. The Company benefits from a diverse and granular deposit base that serves as a significant source of strength. Total deposits increased $332.4 million, or 11% annualized, to $12.6 billion at March 31, 2025 compared to December 31, 2024. Noninterest demand deposits represented 28% of total deposits at March 31, 2025, and 27% of total deposits at December 31, 2024. Customer transaction account balances (noninterest demand and interest-bearing demand) represented 50% of total deposits at both March 31, 2025 and December 31, 2024. Customer repurchase agreements totaled $201.1 million at March 31, 2025, decreasing $30.9 million, or 13%, from December 31, 2024. Repurchase agreements are offered by Seacoast to select customers who wish to sweep excess balances on a daily basis for investment purposes. At March 31, 2025 and December 31, 2024, long-term debt included $72.6 million and $72.5 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company. At March 31, 2025, the average interest rate in effect on our outstanding subordinated debt related to trust preferred securities was 6.29%, compared to 6.34% at December 31, 2024. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. Under Basel III and FRB rules, qualified trust preferred securities and other restricted capital elements can be included as Tier 1 capital, within limitations. The Company believes that its trust preferred securities qualify under these capital rules. In 2023, the Company acquired $25.0 million in subordinated debt through the acquisition of Professional that qualifies as Tier 2 Capital. Contractual interest is paid on a semiannual basis at a fixed interest rate of 3.375% until January 30, 2027, at which point the rate converts to a 3-month SOFR rate plus 203 basis points paid quarterly until maturity in 2032. 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. In 2022, the Company acquired $12.3 million in senior debt through the acquisition of Apollo. Contractual interest is paid on a semiannual basis at a fixed rate of 5.50% until October 30, 2025, at which point the rate converts to a floating rate of 3-month SOFR plus 533 basis points until maturity in 2030. The debt was recorded at fair value, resulting in a $0.4 million premium that is being amortized into interest expense over the remaining term to maturity. 46 Table of Contents FHLB advances totaled $465.0 million at March 31, 2025 with a weighted-average interest rate of 4.26%, compared to advances outstanding of $245.0 million at December 31, 2024 with a weighted-average interest rate of 4.19%. In the first quarter of 2025, the Company utilized short-term fixed-rate advances to fund securities purchases. Off-Balance Sheet Transactions In the normal course of business, the Company may engage in a variety of financial transactions that, under GAAP, either are not recorded on the balance sheet or are recorded on the balance sheet in amounts that differ from the full contract or notional amounts. These transactions involve varying elements of market, credit and liquidity risk. Lending commitments include unfunded loan commitments and standby and commercial letters of credit. For loan commitments, the contractual amount of a commitment represents the maximum potential credit risk that could result if the entire commitment had been funded, the borrower had not performed according to the terms of the contract, and no collateral had been provided. A large majority of loan commitments and standby letters of credit expire without being funded, and accordingly, total contractual amounts are not representative of actual future credit exposure or liquidity requirements. Loan commitments and letters of credit expose the Company to credit risk in the event that the customer draws on the commitment and subsequently fails to perform under the terms of the lending agreement. For commercial customers, loan commitments generally take the form of revolving credit arrangements. For retail customers, loan commitments generally are lines of credit secured by residential property. These instruments are not recorded on the balance sheet until funds are advanced under the commitment. Unfunded commitments to extend credit were $2.9 billion at March 31, 2025 and $2.9 billion at December 31, 2024. 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. A summary of the most restrictive items follows: Seacoast Bank may be required to maintain reserve balances with the FRB. There was no reserve requirement at March 31, 2025 or December 31, 2024. 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 March 31, 2025, the maximum amount available for transfer from Seacoast Bank to the Company in the form of loans approximated $194.9 million, if the Company has sufficient acceptable collateral. There were no loans made to affiliates during the three months ended March 31, 2025. Capital Resources The Company’s equity capital at March 31, 2025 increased $46.5 million, or 2%, from December 31, 2024 to $2.2 billion. Changes in equity included increases from net income, and an improvement in accumulated other comprehensive loss due to increases in the value of AFS securities associated with changes in interest rates, partially offset by the payment of common stock dividends. The ratio of shareholders’ equity to period end total assets was 14.17% and 14.39% at March 31, 2025 and December 31, 2024, respectively. The ratio of tangible shareholders’ equity to tangible assets was 9.58% and 9.60% at March 31, 2025 and December 31, 2024, 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 9.07% at March 31, 2025 and 8.96% at December 31, 2024. Activity in shareholders’ equity for the three months ended March 31, 2025 and 2024 follows: (In thousands) 2025 2024 Beginning balance at December 31, 2024 and 2023 $ 2,183,243 $ 2,108,086 Net income 31,464 26,006 Stock-based compensation expense 3,038 2,217 Common stock transactions related to stock-based employee benefit plans 289 813 Dividends on common stock ($0.18 per share and $0.18 per share, respectively) (15,441) (15,294) Change in accumulated other comprehensive income 27,147 (4,078) Ending balance at March 31, 2025 and 2024 $ 2,229,740 $ 2,117,750 47 Table of Contents Capital ratios are well above regulatory requirements for well-capitalized institutions. 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. 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”). March 31, 2025 Seacoast (Consolidated) Seacoast Bank Minimum to be Well- Capitalized 1 Total Risk-Based Capital Ratio 16.15% 15.10% 10.00% Tier 1 Capital Ratio 14.70 13.85 8.00 CET1 Ratio 14.06 13.85 6.50 Leverage Ratio 11.15 10.51 5.00 1 For subsidiary bank only. The Company and Seacoast Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal bank regulatory authority may prohibit the payment of dividends where it has determined that the payment of dividends would be an unsafe or unsound practice. The Company is a legal entity separate and distinct from Seacoast Bank and its other subsidiaries, and the Company’s primary source of cash and liquidity, other than securities offerings and borrowings, is dividends from its bank subsidiary. Without OCC approval, Seacoast Bank can pay $127.9 million of dividends to the Company. The OCC and the Federal Reserve have policies that encourage banks and BHCs to pay dividends from current earnings, and have the general authority to limit the dividends paid by national banks and BHCs, respectively, if such payment may be deemed to constitute an unsafe or unsound practice. If, in the particular circumstances, either of these federal regulators determined that the payment of dividends would constitute an unsafe or unsound banking practice, either the OCC or the Federal Reserve may, among other things, issue a cease and desist order prohibiting the payment of dividends by Seacoast Bank or us, respectively. The board of directors of a BHC must consider different factors to ensure that its dividend level, if any, is prudent relative to the organization’s financial position and is not based on overly optimistic earnings scenarios such as any potential events that may occur before the payment date that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the FRB has indicated that the board of directors of a BHC, such as Seacoast, should consult with the FRB and eliminate, defer, or significantly reduce the BHC’s dividends if: (i) its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or (iii) it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. The Company has paid quarterly dividends to the holders of its common stock since the second quarter of 2021. Whether the Company continues to pay quarterly dividends and the amount of any such dividends will be at the discretion of the Company’s Board of Directors and will depend on the Company’s earnings, financial condition, results of operations, business prospects, capital requirements, regulatory restrictions, and other factors that the Board of Directors may deem relevant. The Company has seven wholly owned trust subsidiaries that have issued trust preferred stock. Trust preferred securities from acquisitions were recorded at fair value when acquired. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. The FRB’s rules permit qualified trust preferred securities and other restricted capital elements to be included under Basel III capital guidelines, with limitations, and net of goodwill and intangibles. The Company believes that its trust preferred securities qualify under these revised regulatory capital rules and believes that it can treat all its trust preferred securities as Tier 1 capital. For regulatory purposes, the trust preferred securities are added to the Company’s tangible common shareholders’ equity to calculate Tier 1 capital. 48 Table of Contents Critical Accounting Policies and Estimates The Company’s critical accounting policies are discussed in the MD&A in Seacoast’s Annual Report on Form 10-K for the year ended December 31, 2024. Significant accounting policies are discussed in “Note 1 – Significant Accounting Policies” in Form 10-K for the year ended December 31, 2024. Disclosures regarding the effects of new accounting pronouncements are included in “Note 1 – Basis of Presentation” in this report. There have been no changes to the Company’s critical accounting policies during 2025. Interest Rate Sensitivity Fluctuations in interest rates may result in changes in the fair value of the Company’s financial instruments, cash flows and net interest income. This risk is managed using simulation modeling to calculate the most likely interest rate risk utilizing estimated loan and deposit growth. The objective is to optimize the Company’s financial position, liquidity, and net interest income while limiting volatility. Senior management regularly reviews the overall interest rate risk position and evaluates strategies to manage the risk. The Company's Asset and Liability Management Committee uses simulation analysis to monitor changes in net interest income due to changes in market interest rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust interest rate sensitivity to assess the impact of market interest rate swings. 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 April 1, 2025, 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 March 31, 2025 Change in Interest Rates 1-12 months 13-24 months +3.00% (17.5)% (11.8)% +2.00% (11.2)% (7.2)% +1.00% (5.2)% (3.0)% Current —% —% -1.00% 3.6% 0.4% -2.00% 7.1% (0.3%) -3.00% 10.3% (1.3%) The computations of interest rate risk do not necessarily include certain actions management may undertake to manage this risk in response to changes in interest rates. Management may adjust asset or liability pricing or structure in order to manage interest rate risk through an interest rate cycle. This may include the use of investment portfolio purchases or sales or the use of derivative financial instruments, such as interest rate swaps, options, caps, floors, futures or forward contracts. Effects of Inflation and Changing Prices The condensed consolidated financial statements and related financial data presented herein have been prepared in accordance with U.S. GAAP, which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money, over time, due to inflation. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the general level of inflation. However, inflation affects financial institutions by increasing their cost of goods and services purchased, as well as the cost of salaries and benefits, occupancy expense, and similar items. Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings, and shareholders’ equity. Mortgage origination and refinancing tends to slow as interest rates increase, and higher interest rates likely will reduce the Company’s earnings from such activities and the income from the sale of residential mortgage loans in the secondary market. 49 Table of Contents