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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-25 · 122 added, 86 removed, 282 unchanged (42% of the section changed)

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The trading price of our securities could decline due to the materialization of any of these risks, and our shareholders may lose all or part of their investment.

This Form 10-K also contains forward-looking statements that may not be realized as a result of certain factors, including, but not limited to, the risks described herein and in our other public filings with the SEC.

This Form 10-K also contains forward-looking statements that may not be realized as a result of certain factors, including, but not limited to, the

risks described herein and in our other public filings with the SEC.

Please refer to the section in this Form 10-K titled “Special Cautionary Notice Regarding Forward-Looking Statements” for additional information regarding forward-looking statements.

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These could have adverse effects on borrowers that result in higher delinquencies and greater charge-offs in future periods, which would adversely affect our financial condition, including capital and liquidity, or results of operations.

In the event our allowance for credit losses on loans is insufficient to cover such losses, our earnings, capital and liquidity could be adversely affected.

In the event our ACL on loans is insufficient to cover such losses, our earnings, capital and liquidity could be adversely affected.

Our real estate portfolios are exposed if weakness in the Florida housing market or general economy arises.

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Declines in home prices coupled with high or increased unemployment levels or increased interest rates could cause losses which adversely affect our earnings and financial condition, including our capital and liquidity.

Additionally, Florida’s commercial real estate markets may also experience more rapid and more pronounced cyclical fluctuations than national markets, including sharper and faster declines in property values during downturns, which could increase the risk of sudden reductions in our collateral coverage.

We are subject to lending concentration risk.

Our loan portfolio contains several industry and collateral concentrations including, but not limited to, commercial and residential real estate.

Due to the exposure in these concentrations, disruptions in markets, economic conditions, changes in

laws or regulations or other events could cause a significant impact on the ability of borrowers to repay and may have a material adverse effect on our business, financial condition and results of operations.

Due to the exposure in these concentrations, disruptions in markets, economic conditions, changes in laws or regulations or other events could cause a significant impact on the ability of borrowers to repay and may have a material adverse effect on our business, financial condition and results of operations.

A substantial portion of our loan portfolio is secured by real estate.

In weak economies, or in areas where real estate market conditions are distressed, we may experience a higher than normal level of nonperforming real estate loans.

The collateral value of the portfolio and the revenue stream from those loans could come under stress, and additional provisions for the allowance for credit losses could be necessitated.

The collateral value of the portfolio and the revenue stream from those loans could come under stress, and additional provisions for the ACL could be necessitated.

Our ability to dispose of foreclosed real estate at prices at or above the respective carrying values could also be impaired, causing additional losses.

Commercial real estate is cyclical and poses risks of loss to us due to our concentration levels and risk of the asset, especially during a difficult economy, including the current stressed economy.

As of December 31, 2024, 52% of our loan portfolio was comprised of loans secured by commercial real estate.

The banking regulators continue to give commercial real estate lending greater scrutiny, and banks with higher levels of commercial real estate loans are expected to implement improved underwriting, internal controls, risk management policies and portfolio stress testing, as well as higher levels of allowances for expected losses and capital levels as a result of commercial real estate lending growth and exposures.

Seacoast Bank has a commercial real estate concentration risk management program and monitors its exposure to CRE;

In addition, declines in collateral liquidity, extended disposition timelines, or higher carrying costs associated with foreclosed properties could further elevate loss severity.

CRE is cyclical and poses risks of loss to us due to our concentration levels and risk of the asset, especially during a difficult economy, including the current stressed economy.

As of December 31, 2025, 50% of our loan portfolio was comprised of loans secured by CRE.

The banking regulators continue to give CRE lending greater scrutiny, and banks with higher levels of CRE loans are expected to implement improved underwriting, internal controls, risk management policies and portfolio stress testing, as well as higher levels of allowances for expected losses and capital levels as a result of CRE lending growth and exposures.

Seacoast Bank has a CRE concentration risk management program and monitors its exposure to CRE;

however, there can be no assurance that the program will be effective in managing our concentration in CRE.

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At December 31, 2025, our nonaccrual loans totaled $72.0 million or 0.57% of the loan portfolio and our NPAs (which includes nonaccrual loans) were $76.3 million or 0.37% of total assets.

In addition, we had approximately $15.6 million in accruing loans that were 30 days or more delinquent at December 31, 2024.

In addition, we had approximately $33.2 million in accruing

loans that were 30 days or more delinquent at December 31, 2025.

Our NPAs adversely affect our net income in various ways.

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There can be no assurance that we will not experience increases in nonperforming loans in the future, or that NPAs will not result in losses in the future.

Our allowance for credit losses on loans may prove inadequate or we may be adversely affected by credit risk exposures.

Our ACL on loans may prove inadequate or we may be adversely affected by credit risk exposures.

Our business depends on the creditworthiness of our customers.

We review our allowance for credit losses on loans for adequacy, at a minimum quarterly, considering economic conditions and trends, reasonable and supportable forecasts, collateral values and credit quality indicators, including past charge-off experience and levels of past due loans and NPAs.

The determination of the appropriate level of the allowance for credit losses involves a high degree of subjectivity and judgment and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes.

We review our ACL on loans for adequacy, at a minimum quarterly, considering economic conditions and trends, reasonable and supportable forecasts, collateral values and credit quality indicators, including past charge-off experience and levels of past due loans and NPAs.

The determination of the appropriate level of the ACL involves a high degree of subjectivity and judgment and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes.

We cannot be certain that our allowance will be adequate over time to cover credit losses in our portfolio because of unanticipated adverse changes in the economy, market conditions or events adversely affecting specific customers, industries or markets, or borrowers repaying their loans.

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For example, inflation could lead to increased costs to our customers, making it more difficult for them to repay their loans or other obligations, increasing our credit risk.

If the credit quality of our customer base or their debt service behavior materially decreases, if the risk profile of a market, industry or group of customers declines or weakness in the real estate markets and other economics were to arise, or if our allowance for credit losses on loans is not adequate, our business, financial condition, including our liquidity and capital, and results of operations could be materially adversely affected.

If the credit quality of our customer base or their debt service behavior materially decreases, if the risk profile of a market, industry or group of customers declines or weakness in the real estate markets and other economics were to arise, or if our ACL on loans is not adequate, our business, financial condition, including our liquidity and capital, and results of operations could be materially adversely affected.

In addition, bank regulatory agencies periodically review our allowance and may require an increase in the provision for credit losses or the recognition of loan charge-offs, based on judgments different than those of management.

If charge-offs in future periods exceed the allowance for credit losses on loans, we will need additional provisions to increase the

allowance, which would result in a decrease in net income and capital, and could have a material adverse effect on our financial condition and results of operations.

If charge-offs in future periods exceed the ACL on loans, we will need additional provisions to increase the allowance, which would result in a decrease in net income and capital, and could have a material adverse effect on our financial condition and results of operations.

Interest Rate Risk

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Changes in interest rates can impact our profits and the fair values of certain of our assets and liabilities.

We are unable to predict changes in market interest rates, which are affected by many factors beyond our control, including inflation, changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs, recession, unemployment, federal funds target rate, money supply, domestic and international events and changes in the United States and other financial markets.

Prolonged periods of unusually low interest rates may have an incrementally adverse effect on our earnings by reducing yields on loans and other earning assets over time.

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Interest rate risk can also result from mismatches between the dollar amounts of re-pricing or maturing assets and liabilities and from mismatches in the timing and rates at which our assets and liabilities re-price.

Changes in market values of investment securities classified as available for sale are impacted by higher rates and can negatively impact our other comprehensive income and equity levels through accumulated other comprehensive income, which includes net unrealized gains and losses on those securities.

Changes in market values of investment securities classified as AFS are

impacted by higher rates and can negatively impact our other comprehensive income and equity levels through AOCI, which includes net unrealized gains and losses on those securities.

Further, such losses could be realized into earnings should liquidity and/or business strategy necessitate the sales of securities in a loss position.

We actively monitor and manage the balances of our maturing and re-pricing assets and liabilities to reduce the adverse impact of changes in interest rates, but there can be no assurance that we will be able to avoid material adverse effects on our net interest margin in all market conditions.

In addition, the value of our MSRs is highly sensitive to changes in interest rates, prepayment speeds, and default or loss‑mitigation activity.

Declines in interest rates, increases in actual or expected prepayments, or changes in market assumptions may materially reduce the fair value of our MSRs, require valuation adjustments, and adversely affect our results of operations.

MSR valuations also rely on complex modeling and inputs, and inaccuracies in these assumptions, or changes in the secondary‑market environment for MSRs, could increase earnings volatility or impair our ability to sell or hedge MSRs on acceptable terms.

The FRB has implemented significant economic strategies that have impacted interest rates, inflation, asset values, and the shape of the yield curve, over which the Company has no control and which the Company may not be able to adequately anticipate.

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An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity.

Our funding sources include customer deposits, federal funds

purchases, securities sold under repurchase agreements, and short- and long-term debt.

We are also members of the Federal Home Loan Bank of Atlanta and the Federal Reserve Bank of Atlanta, where we can obtain advances collateralized with eligible assets.

Our funding sources include customer deposits, federal funds purchases, securities sold under repurchase agreements, and short- and long-term debt.

We are also members of the FHLB of Atlanta and the Federal Reserve Bank of Atlanta, where we can obtain advances collateralized with eligible assets.

We maintain a portfolio of securities that can be used as a secondary source of liquidity.

Other sources of liquidity available to us or Seacoast Bank include the acquisition of additional deposits, the issuance and sale of debt securities, and the issuance and sale of preferred or common securities in public or private transactions.

Our access to funding sources in amounts adequate or on terms which are acceptable to us could be impaired by other factors that affect us specifically or the financial services industry or economy in general.

Our access to funding sources in adequate amounts or on terms which are acceptable to us could be impaired by other factors that affect us specifically or the financial services industry or economy in general.

Factors that could detrimentally impact our access to liquidity sources include a downturn in the markets in which our loans are concentrated or adverse regulatory action against us.

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Although we have historically been able to replace maturing deposits and FHLB advances as necessary, we might not be able to replace such funds in the future and can lose a relatively inexpensive source of funds and increase our funding costs if, among other things, customers move funds out of bank deposits and into alternative investments, such as the stock market, that may be perceived as providing superior expected returns.

Recently proposed changes to the Federal Home Loan Bank system could adversely impact the Company's access to Federal Home Loan Bank borrowings or increase the cost of such borrowings.

Access to liquidity may also be negatively impacted by the value of our securities portfolio, if liquidity and/or business strategy necessitate the sales of securities in a loss position.

Recently proposed changes to the FHLB system could adversely impact the Company's access to FHLB borrowings or increase the cost of such borrowings.

Access to liquidity may also be negatively impacted by the value of our securities portfolio, if liquidity and/or business strategy necessitate the sales of securities in a loss

Access to liquidity may also be negatively impacted by the value of our securities portfolio if liquidity and/or business strategy necessitate the sales of securities in a loss position.

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Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, or concerns or rumors about any events of these kinds or other similar events, have in the past and may in the future lead to erosion of customer confidence in the banking system or certain banks, deposit volatility, liquidity issues, stock price volatility and other adverse developments.

Even inaccurate speculation or social media driven rumors about the health of financial institutions have the potential to trigger rapid deposit outflows or market reactions that outpace traditional risk management tools.

Any of these impacts, or any other impacts resulting from bank failures or other related or similar events, could have a material adverse effect on our liquidity and our current and/or projected business operations and financial condition and results of operations.

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Limitations on our ability to receive dividends from our subsidiaries could have a material adverse effect on our liquidity and on our ability to pay dividends on common stock.

Additionally, if our

subsidiaries’ earnings are not sufficient to make dividend payments to us while maintaining adequate capital levels, we may not be able to make payments on our trust preferred securities or reinstate dividend payments to our common shareholders.

Additionally, if our subsidiaries’ earnings are not sufficient to make dividend payments to us while maintaining adequate capital levels, we may not be able to make payments on our trust preferred securities or reinstate dividend payments to our common shareholders.

Business and Strategic Risks

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Our ability to continue to grow successfully will depend on a variety of factors, including economic conditions, continued availability of desirable business opportunities, customer demand for our products and services, the competitive responses from other financial and non-financial institution competitors, and our ability to successfully serve a growing number of client relationships.

Sustained growth also requires that we expand our organizational capacity, including our operational infrastructure, technology platforms, risk management capabilities, and employee base, in a manner that keeps pace with increases in business volume and

There can be no assurance growth opportunities will be available, or growth will be successfully managed.

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In addition, some of our competitors are subject to less regulation and/or more favorable tax treatment.

Additionally, we face increasing competition from non-traditional financial service providers, including fintech companies, digital only banks, payment platforms, private credit funds, and other technology driven entrants that may be able to innovate more quickly, deliver products at lower cost, or provide differentiated digital experiences that appeal to certain customer segments.

Further, as a result of the GENIUS Act, passed in 2025 to provide a regulatory framework for stablecoins in the U.S., increased competition may emerge from issuers of stablecoins and providers of related technology.

Consumers may decide not to use banks to complete their financial transactions, which could adversely affect our net income.

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In addition, the widespread adoption of new technologies, including internet banking services, mobile banking services, cryptocurrencies and payment systems, and artificial intelligence, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions.

We might not be successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences, spending, investing and/or saving habits, achieving market acceptance of our products and services, reducing costs

in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.

Further, we may experience a decrease in customer deposits if customers perceive alternative investments, such as the stock market, as providing superior expected returns.

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Climate change may be increasing the nature, severity, and frequency of adverse weather conditions, making the impact from these types of natural disasters on us or customers worse.

Further, concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts.

Federal and state banking regulators and supervisory authorities, investors and other stakeholders have increasingly viewed financial institutions as important in helping to address the risks related to climate change both directly and with respect to their customers, which may result in financial institutions coming under increased press ure regarding the disclosure and management of their climate risks and related lending and investment activities.

Given that climate change could impose systemic risks upon the financial sector, either via disruptions in economic activity resulting from the physical impacts of climate change or changes in policies as the economy transitions to a less carbon-intensive environment, we face regulatory risk of increasing focus on our resilience to climate-related risks, including in the context of stress testing for various climate stress scenarios.

The effects of climate change continue to raise significant concerns about the state of the environment.

However, under the current administration, federal policy has shifted to reduce the emphasis on climate change initiatives and environmental regulations.

This includes scaling back federal participation in international agreements, and reducing regulatory pressures on businesses, including banks, to address climate-related risks.

Federal legislative and regulatory proposals aimed at combating climate change have and may continue to face greater scrutiny or diminished priority.

However, state and local regulations or guidance relating to climate change, as well as changes in investors’, consumers’ and businesses’ behaviors and business preferences, continue to affect our business operations.

Additionally, in the long-term, given that climate change could impose systemic risks upon the financial sector, either via disruptions in economic activity resulting from the physical impacts of climate change or changes in policies as the economy transitions to a less carbon-intensive environment, we face may in the future face regulatory risk of increasing focus on our resilience to climate-related risks, including in the context of stress testing for various climate stress scenarios.

Ongoing legislative or regulatory uncertainties and changes regarding climate risk management and practices may result in higher regulatory, compliance, credit and reputational risks and costs.

Investors, consumers and businesses may also change their behavior on their own as a result of these concerns.

The state of Florida could be disproportionately impacted by long-term climate changes.

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These provisions may discourage possible business combinations that a majority of our shareholders may believe to be desirable and beneficial.

result, our Board of Directors may decide not to pursue transactions that would otherwise be in the best interests of holders of our common stock.

As a result, our Board of Directors may decide not to pursue transactions that would otherwise be in the best interests of holders of our common stock.

Operational Risk

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There are substantial risks and uncertainties associated with these efforts.

In developing and marketing new lines of business and/or new products and services, we undergo a process to assess the risks of the initiative, and invest significant time and resources to build internal controls, policies and procedures to mitigate those risks, including hiring experienced management to oversee the implementation of the initiative.

In developing and marketing new lines of business and/or new products and services, we undergo a process to assess the risks of

the initiative, and invest considerable time and resources to build internal controls, policies and procedures to mitigate those risks, including hiring experienced management to oversee the implementation of the initiative.

New initiatives may also require enhancements to our technology systems, data management processes, or operational infrastructure, and delays or deficiencies in these areas could hinder successful implementation or increase operational risk.

Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible.

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Our employees could engage in fraudulent, illegal, wrongful or suspicious activities, and/or activities resulting in consumer harm that adversely affects our customers and/or our business.

The precautions we take to detect and prevent such misconduct may not always be effective, such misconduct may result in regulatory sanctions and/or penalties, serious harm to our reputation, financial condition, customer relationships or the ability to attract new customers.

The precautions we take to detect and prevent such misconduct may not always be effective, and misconduct may occur despite established policies, training programs, internal controls, and monitoring systems.

Such misconduct may result in regulatory sanctions and/or penalties, serious harm to our reputation, financial condition, customer relationships or the ability to attract new customers.

In addition, improper use or disclosure of confidential information by our employees, even if inadvertent, could result in serious harm to our reputation, financial condition and current and future business relationships.

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Financial institutions are inherently exposed to fraud risk.

Criminals are turning to new sources, including artificial intelligence, to steal personally identifiable information in order to impersonate our clients to commit fraud.

Criminals are turning to new sources, including AI, to steal personally identifiable information in order to impersonate our clients to commit fraud.

Continued advances in AI‑driven tools, deepfakes, synthetic identities, and automated credential‑stuffing attacks may make fraud harder to detect and enable criminals to generate more convincing impersonations or documentation.

Fraudulent activity can take many forms and has escalated as more tools for accessing financial services emerge, such as real-time payments.

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Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.

Failure to achieve and maintain an effective internal control environment could prevent us from accurately reporting our financial results, preventing or detecting fraud or providing timely and reliable financial information pursuant to our reporting obligations, which could result in a material weakness in our internal controls over financial reporting and the restatement of

previously filed financial statements and could have a material adverse effect on our business, financial condition and results of operations.

Further, ineffective internal controls could cause our investors to lose confidence in our financial information, which could affect the trading price of our common stock.

Regulators may also increase scrutiny or require corrective action if

they determine that our internal controls are inadequate, which could increase compliance costs and divert management attention.

Our operations rely on external vendors.

We rely on certain external vendors to provide products and services necessary to maintain our day-to-day operations, particularly in the areas of operations, treasury management systems, information technology and security, exposing us to the risk that these vendors will not perform as required by our agreements and exposing us to operational and informational security risks, including risks associated with operational errors, information system failures, interruptions or breaches and unauthorized disclosures of sensitive or confidential client or customer information.

We rely on certain external vendors to provide products and services necessary to maintain our day-to-day operations, particularly in the areas of operations, treasury management systems, information technology and security, exposing us to the risk that these vendors will not perform as required by our agreements and exposing us to operational and informational security risks, including risks associated with operational errors, information system failures, interruptions or compromises and unauthorized disclosures of sensitive or confidential client or customer information.

These risks also include coding errors, system integration failures, or breakdowns in communication with our vendors that can delay problem resolution or extend service disruptions.

An external vendor’s failure to perform in accordance with our agreement could be disruptive to our operations, which could have a material adverse impact on our reputation, business, financial condition and results of operations.

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Transition to these new vendors may not proceed as anticipated and could negatively impact our customers or our ability to conduct business, which, in turn, could have an adverse effect on our business, results of operations and financial condition.

To mitigate this risk, the Company has an established process to oversee vendor relationships.

To mitigate this risk, the Company has established a process to oversee vendor relationships.

We must effectively manage our information systems risk.

We rely heavily on our communications and information systems to conduct our business.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products, services and methods of delivery (including those related to or involving artificial intelligence, machine learning, blockchain and other distributed ledger technologies).

We rely heavily on our communications and information systems, and those of our third-party service providers, to conduct our business.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products, services and methods of delivery (including those related to or involving the continued advancement of artificial intelligence, machine learning, blockchain and other distributed ledger technologies).

Our ability to compete successfully depends in part upon our ability to use technology to provide products and services that will satisfy customer demands.

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Evolving business practices, including having certain employees working remotely, introduces additional operational risk, including increased cybersecurity risk.

These cyber risks include the risks of greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk of unauthorized dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.

Disruptions to our information systems or security breaches could adversely affect our business and reputation.

Our communications and information systems remain vulnerable to unexpected disruptions and failures.

These cyber risks include the risks of greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk of unauthorized dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security incident resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.

These risks have increased as cyber threat actors use sophisticated tools, including artificial intelligence, to generate more convincing phishing schemes, malware, account takeover attempts, deepfake enabled impersonations, credential stuffing attacks, and exploitation of software vulnerabilities, including “zero day” threats.

Our systems, and those of our service providers, customers and third party vendors, are subject to constant attack attempts ranging from uncoordinated individual probing to targeted, coordinated intrusions by criminal organizations.

Disruptions to our information systems or security incidents could adversely affect our business and reputation.

Our communications and information systems, and those of our third-party service providers, remain vulnerable to unexpected disruptions and failures.

Any failure or interruption of these systems could impair our ability to serve our customers and to operate our business and could damage our reputation, result in a loss of business, subject us to additional regulatory scrutiny or enforcement or expose us to civil litigation and possible financial liability.

While we have developed extensive recovery plans, we cannot assure that those plans will be effective to prevent adverse effects upon us and our customers resulting from system failures.

While we maintain an insurance policy which we believe provides sufficient coverage at a manageable expense for an institution of our size and scope with similar technological systems, we cannot assure that this policy would be sufficient to cover all related financial losses and damages should we experience any one or more of our or a third party’s systems failing or failing to prevent, being breached, or experiencing a cyber-attack.

Notwithstanding the strength of our defensive measures, the threat from cyber-attacks is severe, attacks are sophisticated and attackers respond rapidly to changes in defensive measures , and there is no assurance that our response to any cyber-attack or system interruption, breach or failure will be fully effective to mitigate and remediate the issues resulting from such an event, including the costs, reputational harm and litigation challenges that we may face as a result.

cover all related financial losses and damages should we experience any one or more of our or a third party’s systems failing or failing to prevent, being compromised, or experiencing a cyber-attack.

Cyber attacks or security incidents may not be immediately detected, and delays in identifying or responding to an attack can significantly increase the magnitude of resulting harm, including extended system outages, greater data loss or compromise, and higher remediation costs.

Our increasing reliance on cloud services, digital connectivity and integration with third party systems heightens the risk that disruptions or compromises in those external environments could affect our operations.

Notwithstanding the strength of our defensive measures, the threat from cyber-attacks is severe, attacks are sophisticated and attackers respond rapidly to changes in defensive measures , and there is no assurance that our response to any cyber-attack or system interruption, compromise or failure will be fully effective to mitigate and remediate the issues resulting from such an event, including the costs, reputational harm and litigation challenges that we may face as a result.

Cybersecurity risks also occur with our third-party service providers, and may interfere with their ability to fulfill their contractual obligations to us, with attendant financial loss or liability that could adversely affect our financial condition or results of operations.

We offer our clients the ability to bank remotely and provide other technology based products and services, which services include the secure

transmission of confidential information over the Internet and other remote channels.

To the extent that our clients' systems are not secure or are otherwise compromised, our network could be vulnerable to unauthorized access, malicious software, phishing schemes and other security breaches.

To the extent that our activities or the activities of our clients or third-party service providers involve the storage and transmission of confidential information, security breaches and malicious software could expose us to claims, regulatory scrutiny, litigation and other possible liabilities.

We offer our clients the ability to bank remotely and provide other technology based products and services, which services include the secure transmission of confidential information over the Internet and other remote channels.

To the extent that our activities or the activities of our clients or third-party service providers involve the storage and transmission of confidential information, security incidents and malicious software could expose us to claims, regulatory scrutiny, litigation and other possible liabilities.

While to date we have not experienced a significant compromise, significant data loss or material financial losses related to cybersecurity attacks, our systems and those of our clients and third-party service providers are under constant threat and it is possible that we could experience a significant event in the future.

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In addition, as the domestic and foreign regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.

Cybersecurity related incidents may require us to expend significant capital, management time and other resources to investigate, remediate and prevent future occurrences.

In addition, some cybersecurity related losses, regulatory fines or enforcement penalties may not be covered by insurance or may exceed available coverage.

We collect and store sensitive data, including personally identifiable information of our customers and employees as well as sensitive information related to our operations.

Our collection of such Company and customer data is subject to extensive regulation and oversight.

Computer break-ins of our systems or our customers’ systems, thefts of data and other breaches and criminal activity may result in significant costs to respond, liability for customer losses if we are at fault, damage to our customer relationships, regulatory scrutiny and enforcement and loss of future business opportunities due to reputational damage.

Computer compromises of our systems or our customers’ systems, thefts of data and other incidents and criminal activity may result in significant costs to respond, liability for customer losses if we are at fault, damage to our customer relationships, regulatory scrutiny and enforcement and loss of future business opportunities due to reputational damage.

Although we, with the help of third-party service providers, will continue to implement security technology and establish operational procedures to protect sensitive data, there can be no assurance that these measures will be effective.

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In some cases, we may elect to contribute to the cost of responding to cybercrime against our customers, even when we are not at fault, in order to maintain valuable customer relationships.

The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business.

We or our third-party (or fourth-party) vendors, clients or counterparties may develop or incorporate AI technology in certain business processes, services, or products.

The development and use of AI presents a number of risks and challenges to our business.

The legal and regulatory environment relating to AI is uncertain and rapidly evolving, both in the U.S.

and internationally, and includes regulatory schemes targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment, and other laws applicable to the use of AI.

These evolving laws and regulations could require changes in our implementation of AI technology and increase our compliance costs and the risk of non-compliance.

AI models, particularly generative AI models, may produce output or take action that is incorrect, that reflects biases included in the data on which they are trained, that results in the release of private, confidential, or proprietary information, that infringes on the intellectual property rights of others, or that is otherwise harmful.

In addition, the complexity of many AI models makes it difficult to understand why they are generating particular outputs.

This limited transparency increases the challenges associated with assessing the proper operation of AI models, understanding and monitoring the capabilities of the AI models, reducing erroneous output, eliminating bias, and complying with regulations that require documentation or explanation of the basis on which decisions are made.

Further, we may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility.

Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures.

The development and use of AI presents risks and challenges that may adversely impact our business.

We and our third party (or fourth party) vendors, clients, and counterparties may develop or incorporate AI technologies into business processes, services, or products.

The legal and regulatory environment applicable to AI is uncertain, rapidly evolving, and includes both AI specific regulatory schemes and broader requirements under intellectual property, privacy, consumer protection, employment, and other laws.

Changes in these requirements may necessitate modifications to our AI implementation, increase compliance costs, and elevate the risk of non-compliance.

AI models, including generative and other advanced AI systems, may produce incorrect or harmful outputs, reflect underlying data biases, release private or proprietary information, or infringe on intellectual property rights.

The complexity and limited transparency of many AI models make it difficult to assess and monitor their operation, understand why they generate certain outputs, reduce erroneous results, eliminate bias, and comply with regulatory expectations regarding documentation and explainability.

When we rely on AI developed by third parties, we depend on their training practices, data selection, and controls, over which we may have limited visibility.

These risks could expose us to liability, regulatory scrutiny, or reputational harm.

Rapid technological advancements and increasing customer expectations for AI enabled convenience, personalization, automation, and decisioning tools may require continual innovation.

If we fail to keep pace with these changes or if competitors deploy AI more effectively, our growth, revenue, or market position could be adversely affected.

The integration of AI into existing systems may also introduce operational risks, including service interruptions, transaction processing errors, data quality issues, and system conversion delays, which may contribute to compliance failures in areas such as lending, fraud detection, customer communications, or regulatory reporting.

AI used by customers or counterparties may introduce additional risks, such as inaccurate or AI generated misinformation submitted to the Company, automated activity that strains systems, or counterparties’ reliance on AI based decisions that affect the accuracy or timeliness of information we receive.

Internally, we may depend on AI systems designed to improve efficiency;

however, failures, inaccurate outputs, or model drift could impair risk management processes, underwriting quality, fraud detection, customer service, or other critical functions.

Any of these risks could adversely affect our business, financial condition, or results of operations and could harm our reputation and the public perception of our business or security practices.

Regulatory and Litigation Risk

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The financial services industry also is subject to frequent legislative and regulatory changes and proposed changes, the effects of which cannot be predicted.

These changes, if adopted,

could require us to maintain more capital, liquidity and risk controls, which could adversely affect our growth, profitability and financial condition.

These changes, if adopted, could require us to maintain more capital, liquidity and risk controls, which could adversely affect our growth, profitability and financial condition.

Any such changes in law can impact the profitability of our business activities, require changes to our operating policies and procedures, or otherwise adversely impact our business.

In the current environment, government authorities are pursuing aggressive enforcement actions, including those related to new prohibitions on politicized debanking, which heightens the risks associated with actual or perceived compliance failures.

Regulatory directives related to such actions may be confidential, and we may be restricted from publicly disclosing them.

Ongoing litigation challenging regulatory actions at the federal or state level may also change or destabilize the regulatory framework governing our operations.

Further, we expect to continue to commit significant resources to our compliance with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC, the PCAOB and NASDAQ.

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These rules could have a negative effect on the financial performance of Seacoast Bank's mortgage lending operations such as limiting the volume of mortgage originations and sales into the secondary market, increased compliance burden and impairing Seacoast Bank's ability to proceed against certain delinquent borrowers with timely and effective collection efforts.

Banks with greater than $10 billion in total consolidated assets are subject to certain additional regulatory requirements, including limits on the debit card interchange fees that such banks may collect, changes in the manner in which assessments for FDIC deposit insurance are calculated, and providing the authority to the CFPB to supervise and examine such banks.

Additionally, in December 2024, the CFPB finalized a rule that would treat discretionary overdraft services offered by banks with more than $10 billion in assets as credit, bringing them for the first time under Regulation Z, the implementing regulation of the Truth in Lending Act and capping these fees at $5.

As of December 31, 2024, this rule has been challenged in court.

Banks, like Seacoast with greater than $10 billion in total consolidated assets are subject to certain additional regulatory requirements, including limits on the debit card interchange fees that such banks may collect, changes in the manner in which

assessments for FDIC deposit insurance are calculated, and providing the authority to the CFPB to supervise and examine such banks.

Compliance with the Dodd-Frank Act's requirements may necessitate that we hire or contract with additional compliance or other personnel, design and implement additional internal controls, or incur other significant expenses, any of which could have a material adverse effect on our business, financial condition or results of operations.

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Under FDIC rules, if Seacoast Bank ceases to be a “well-capitalized” institution, its ability to accept brokered deposits and the interest rates that it pays may both be restricted.

In addition, any preferred stock that we have issued, or may issue in the future, could increase our capital costs and limit our financial flexibility, and changes in regulatory capital rules could reduce the capital benefits associated with preferred stock or require us to raise additional or replacement capital.

Federal banking agencies periodically conduct examinations of our business, including for compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations may adversely affect us.

The FRB and the OCC periodically conduct examinations of our business and Seacoast Bank’s business, including for compliance with laws and regulations, and Seacoast Bank also may be subject to future regulatory examinations by the CFPB, as discussed in the “Supervision and Regulation” section above.

unsatisfactory, or that we or our management were in violation of any law, regulation or guideline in effect from time to time, the regulators may take a number of different remedial actions as they deem appropriate.

If, as a result of an examination, the FRB, the OCC and/or the CFPB were to determine that the financial condition, capital resources, asset quality, asset concentrations, earnings prospects, management, liquidity, sensitivity to market risk, or other aspects of any of our or Seacoast Bank’s operations had become unsatisfactory, or that we or our management were in violation of any law, regulation or guideline in effect from time to time, the regulators may take a number of different remedial actions as they deem appropriate.

These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to change the composition of our concentrations in portfolio or balance sheet assets, to assess civil monetary penalties against our officers or directors or to remove officers and directors.

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FDIC deposit insurance premiums and assessments may increase as a result of future increases in assessment rates, required prepayments in FDIC insurance premiums, special assessments or other changes, and could reduce our profitability.

Any increases in our assessment rate, future special assessments, or required prepayments in FDIC insurance premiums could reduce our profitability or limit our ability to pursue certain business opportunities, which could have a material adverse effect on our assets, business, cash flow, condition (financial or otherwise), liquidity, prospects or results of operations.

could have a material adverse effect on our assets, business, cash flow, condition (financial or otherwise), liquidity, prospects or results of operations.

Tax law changes and interpretations may have a negative impact on our earnings.

The enactment of the Tax Reform Act has had, and is expected to continue to have, far reaching and significant effects on us, our customers and the U.S.

Further, U.S.

tax authorities may at any time clarify and/or modify legislation, administration or judicial changes or interpretations the income tax treatment of corporations.

Such changes could adversely affect us, either directly or as a result of the effects on our customers.

While lower income tax rates should result in improved net income performance over prospective periods, the extent of the benefit will be influenced by the competitive environment and other factors.

As of December 31, 2024, we had net deferred tax assets of $103.0 million, based on management's estimation of the likelihood of those DTAs being realized.

These and future DTAs may be reduced in the future if our estimates of future taxable income from our operations and tax planning strategies do not support the amounts recorded.

Recently enacted tax legislation, including the 2017 Tax Cuts and Jobs Act and the 2025 One Big Beautiful Bill Act, has significantly affected us, our customers, and the U.S.

economy, and may continue to do so.

These laws modify or extend prior tax provisions and accelerate the phase‑out of certain incentives under the Inflation Reduction Act of 2022.

Future legislative, administrative, or judicial tax changes could also alter the tax treatment of corporations in ways that negatively impact us directly or indirectly through effects on our customers.

Although lower tax rates may provide some benefit, the extent of any advantage will depend on competitive and market factors.

In addition, tax authorities have become more aggressive in challenging tax positions taken by financial institutions.

If tax authorities disagree with our interpretations or tax planning strategies, we could face additional taxes, interest, penalties, or be required to modify our business practices, any of which could materially adversely affect our business, financial condition, or results of operations.

Merger-Related Risks

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• unanticipated costs and delays, including as a result of enhanced regulatory scrutiny;

• risks that acquired new businesses do not perform consistent with our growth and profitability expectations;

• risks that acquired new businesses do not meet our growth and profitability expectations;

• risks of entering new market or product areas where we have limited experience;

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The number of financial institutions headquartered in Florida, the Southeastern United States, and across the country continues to decline through merger and other activity.

We expect that other banking and financial companies, many of which have significantly greater resources, will compete with us to acquire financial services businesses.

We expect that other banking and

financial companies, many of which have significantly greater resources, will compete with us to acquire financial services businesses.

This competition, as the number of appropriate merger targets decreases, could increase prices for potential acquisitions which could reduce our potential returns, and reduce the attractiveness of these opportunities to us.

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If we fail to receive the appropriate regulatory approvals, we will not be able to consummate an acquisition that we believe is in our best interests.

Among other things, our regulators consider our capital, liquidity, profitability, regulatory compliance, including with respect to anti-money laundering obligations, consumer protection laws and CRA obligations and levels of goodwill and intangibles when considering acquisition and expansion proposals.

Among other things, our regulators consider our capital, liquidity, profitability, regulatory compliance, including with respect to AML obligations, consumer protection laws and CRA obligations and levels of goodwill and intangibles when considering acquisition and expansion proposals.

Any acquisition could be dilutive to our earnings and shareholders’ equity per share of our common stock.

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There can be no assurance that we will successfully identify appropriate opportunities, that we will be able to negotiate or finance such activities or that such activities, if undertaken, will be successful.

In addition, competitive dynamics, valuation challenges, due diligence findings, or the inability to reach acceptable terms with potential targets may prevent us from completing transactions that we believe are strategically important.

While we have substantial experience in successfully integrating institutions we have acquired, we may encounter difficulties during integration, such as the loss of key employees, the disruption of operations and businesses, loan and deposit attrition, customer loss and revenue loss, possible inconsistencies in standards, control procedures and policies, and unexpected issues with expected branch closures costs, operations, personnel, technology and credit, all of which could divert resources from regular banking operations.

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Acquiring other banks, branches or other assets, as well as other expansion activities, involves various risks including the risks of incorrectly assessing the credit quality of acquired assets, encountering greater than expected costs of integrating acquired banks or branches into us, the risk of loss of customers and/or employees of the acquired institution or branch, executing cost savings measures, not achieving revenue enhancements and otherwise not realizing the transaction’s anticipated benefits.

Acquisitions may also expose us to unknown or contingent liabilities of acquired institutions, including legal, regulatory, tax, operational, cybersecurity or compliance‑related matters that were not fully identified in diligence.

Our ability to address these matters successfully cannot be assured.

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Accordingly, the failure to identify and retain such personnel would place significant limitations on our ability to successfully execute our growth strategy.

In addition, to the extent we expand our lending beyond our current market areas, we could incur additional

risks related to those new market areas.

In addition, to the extent we expand our lending beyond our current market areas, we could incur additional risks related to those new market areas.

We may not be able to expand our market presence in our existing market areas or successfully enter new markets.

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Shares of our common stock are not insured deposits and may lose value.

Shares of our common stock are not savings accounts, deposits or other obligations of any depository institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality, any other deposit insurance fund or by any other public or private entity, and are subject to investment risk, including the possible loss of principal.

Shares of our common stock are not savings accounts, deposits or other obligations of any depository institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality, any other DIF or by any other public or private entity, and are subject to investment risk, including the possible loss of principal.

Any future economic downturn could have a material adverse effect on our capital, financial condition, results of operations, and future growth.

Management continually monitors market conditions and economic factors affecting our business.

If conditions were to worsen nationally, regionally or locally, then we could see a sharp increase in our total net charge-offs and also be required to significantly increase our allowance for credit losses.

If conditions were to worsen nationally, regionally or locally, then we could see a sharp increase in our total net charge-offs and also be required to significantly increase our ACL.

Furthermore, the demand for loans and our other products and services could decline.

An increase in our non-performing assets and related increases in our provision for credit losses, coupled with a potential decrease in the demand for loans and our other products and services, could negatively affect our business and could have a material adverse effect on our capital, financial condition, results of operations and future growth.

Our customers may also be adversely impacted by changes in regulatory, trade (including tariffs), monetary, and tax policies and laws, all of which could reduce demand for loans and adversely impact our borrowers' ability to repay our loans.

Our customers may also be adversely impacted by changes in regulatory, trade (including trade wars and tariffs), monetary, and tax policies and laws, all of which could reduce demand for loans and adversely impact our borrowers' ability to repay our loans.

The potential erosion of Federal Reserve independence could negatively impact financial markets and impact our profitability.

government’s decisions regarding its debt ceiling and the possibility that the U.S.

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The effects of a possible economic downturn could continue for many years after the downturn is considered to have ended.

In addition, geopolitical instability, including military conflicts, global tensions among major economies, sanctions regimes, disruptions to global trade, and volatility in commodity and energy markets, could adversely affect U.S.

and regional economic conditions, reduce business and consumer confidence, impair supply chains, increase inflationary pressures and negatively affect our borrowers’ cash flows and repayment capacity.

A reduction in consumer confidence could negatively impact our results of operations and financial condition.

Significant market volatility driven in part by concerns relating to, among other things, bank failures, actions by the U.S.

Congress or imposed through Executive Order by the President of the United States, as well as global political actions or events, including natural disasters, health emergencies or pandemics, could adversely affect the U.S.

Congress or imposed through Executive Order by the President of the United States, including evolving federal policies and regulatory actions related to so called “debanking,” as well as global political actions or events, including natural disasters, health emergencies or pandemics, could adversely affect the U.S.

or global economies, with direct or indirect impacts on the Company and our business.

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If we are not able to hire, adequately compensate, or retain these key individuals, we may be unable to execute our business strategies and may suffer adverse consequences to our business, financial condition and results of operations.

In addition, U.S.

banking regulators have issued, and may continue to revise, policies and guidance relating to incentive compensation practices.

Any enhanced restrictions, requirements or supervisory expectations relating to compensation could adversely affect our ability to hire, retain, and motivate key associates or could necessitate changes to our compensation structures that reduce our competitiveness in the labor market.

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-K

Item 1A. Risk Factors