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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-02-27 compared with 2025-02-25 · 37 added, 26 removed, 120 unchanged (34% of the section changed)

2 unchanged sentences

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.

This risk is managed using simulation modeling to calculate the most likely interest rate risk.

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 ALCO 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 on January 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.

The Company 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 balance sheet exposures to assess the impact of market interest rate swings.

The analysis of the impact on net interest income 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 net interest income for the 12- and 24-month periods beginning January 1, 2026, 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 yield curve slope nor changes in balance sheet size or mix.

% Change in Projected Baseline Net Interest Income

6 unchanged sentences

-3.00% 5.8 (3.7)

-3.00% 10.3 2.8

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.

Management may adjust asset or liability pricing or structure in order to manage interest rate risk through an economic 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.

27 unchanged sentences

3 Includes loans held for sale.

See also Management’s discussion and analysis “Interest Rate Sensitivity.”

Market risk refers to potential losses arising from changes in interest rates, and other relevant market rates or prices.

9 unchanged sentences

The sensitivity of EVE to changes in the level of interest rates is a measure of the longer-term re-pricing risks and options risks embedded in the balance sheet.

In contrast to the net interest income simulation, which assumes interest rates will change over a period of time, EVE uses instantaneous changes in rates.

EVE values only the current balance sheet, and does not incorporate the growth assumptions that are used in the net interest income simulation model.

Similar to net interest income simulation, EVE uses instantaneous changes in rates.

Results of both net interest income simulation and EVE analyses are sensitive to changes in key modeling assumptions.

EVE values only the current balance sheet and does not incorporate the reinvestment assumptions that are used in the net interest income simulation model.

As with the net interest income simulation model, assumptions about the timing and variability of balance sheet cash flows are critical in the EVE analysis.

Particularly important are the assumptions driving prepayments and the expected changes in balances and pricing of the indeterminate life deposit portfolios.

Core deposits are a more significant funding source for the Company, making the lives attached to core deposits more important to the accuracy of our modeling of EVE.

Particularly important are the assumptions driving prepayments and the expected changes in balances and pricing of the indeterminate maturity deposit portfolios.

Stable deposits are a more significant funding source for the Company, making the estimated lives attached to stable deposits more important to the accuracy of our EVE modeling.

The Company periodically reassesses its assumptions regarding the indeterminate lives of core deposits utilizing an independent third-party resource to assist.

7 unchanged sentences

Since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon, i.e., the next fiscal year.

Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, change in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.

Further, EVE does not consider factors such as future balance sheet growth, changes in product mix, change in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.

Effects of Inflation and Changing Prices

5 unchanged sentences

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 will likely reduce the Company’s earnings from such activities and the income from the sale of residential mortgage loans in the secondary market.

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.

A decline in interest rates would generally have an opposite impact.

Stock Performance Graph

The line graph below compares the cumulative total stockholder return on Seacoast common stock with the cumulative total return of the NASDAQ Composite Index and the S&P U.S.

The line graph below compares the cumulative total stockholder return on Seacoast common stock with the cumulative total return of the NASDAQ Composite Index, the KBW NASDAQ Regional Banking Index, and the S&P U.S.

BMI Banks - Southeast Region Index for the same period.

The graph and table assume that $100 was invested on December 31, 2019 (the last day of trading for the year ended December 31, 2019) in each of Seacoast common stock, the NASDAQ Composite Index and the S&P U.S.

The Company has chosen to replace the S&P U.S.

BMI Banks - Southeast Region Index with the KBW NASDAQ Regional Banking Index, as the Company believes this index, which is comprised of U.S.

regional banks and thrifts, is more indicative of the peers in which investors evaluate our performance.

The graph includes both indexes as required when changing the index.

The graph and table assume that $100 was invested on December 31, 2020 (the last day of trading for the year ended December 31, 2020) in each of Seacoast common stock, the NASDAQ Composite Index, the KBW NASDAQ Regional Banking Index, and the S&P U.S.

BMI Banks - Southeast Region Index.

3 unchanged sentences

NASDAQ Composite Index 100.00 122.18 82.43 119.22 154.48 187.14

KBW NASDAQ Regional Banking Index 100.00 136.64 127.12 126.67 143.39 152.71

BMI Banks - Southeast Region Index 100.00 142.83 116.18 119.85 155.47 187.40

12 unchanged sentences

Service charges on deposit accounts 6,472 6,194 5,540 5,180 5,138 5,412 5,342 4,960

Interchange income 1,860 1,911 1,940 1,888 2,433 1,684 5,066 4,694

Wealth management income 5,540 4,578 4,196 4,248 4,019 3,843 3,766 3,540

Mortgage banking fees 326 485 582 381 378 410 576 426

Mortgage banking income 3,108 517 685 404 326 485 582 381

Interchange income 2,483 2,008 1,895 1,807 1,860 1,911 1,940 1,888

Insurance agency income 1,191 1,481 1,289 1,620 1,151 1,399 1,355 1,291

1 unchanged sentence

Other income 7,066 6,006 7,497 6,257 10,335 7,864 6,647 5,944

Securities (losses) gains, net

(8,388) 187 (44) 229 (2,437) (387) (176) 107

Securities gains (losses), net 84 (841) 39 196 (8,388) 187 (44) 229

Total noninterest income 28,631 23,818 24,521 22,180 17,068 23,679 22,184 20,497

9 unchanged sentences

Amortization of intangibles 10,374 6,005 5,131 5,309 5,587 6,002 6,003 6,292

Other real estate owned expense and net loss (gain) on sale

84 491 (109) (26) 573 274 (57) 195

OREO and net (gain) loss on sale (29) (346) 8 241 84 491 (109) (26)

Provision for credit losses on unfunded commitments 812 150 150 150 250 250 251 250

Merger and integration costs 18,142 10,808 2,422 1,051 — — — —

Other 7,162 5,879 6,205 7,073 5,976 5,945 5,869 6,532

1 unchanged sentence

Income before income taxes 43,452 46,928 55,276 40,850 43,598 39,253 39,153 33,836

Provision for income taxes 9,513 8,602 8,909 7,830 8,257 9,076 10,189 2,697

Provision for income tax expense 9,192 10,461 12,589 9,386 9,513 8,602 8,909 7,830

Net income 34,260 36,467 42,687 31,464 34,085 30,651 30,244 26,006

Preferred dividends 2,138 — — — — — — —

Net income available to common shareholders $ 32,122 $ 36,467 $ 42,687 $ 31,464 $ 34,085 $ 30,651 $ 30,244 $ 26,006

2025 Quarters 2024 Quarters

(In thousands, except per share data) Fourth Third Second First Fourth Third Second First

Per Common Share Data

1 unchanged sentence

Net income basic 0.32 0.42 0.50 0.37 0.40 0.36 0.36 0.31

2024 Quarters 2023 Quarters

(In thousands, except per share data) Fourth Third Second First Fourth Third Second First

Cash dividends declared:

Common stock $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.17

Common and preferred stock 1

$ 0.19 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18

Market price common stock:

2 unchanged sentences

Bid price at end of period 31.42 30.43 27.62 25.73 27.53 26.49 23.33 24.86

1 In the fourth quarter of 2025, non-voting convertible preferred shares were issued in connection with the VBI acquisition.

Those shares earn dividends pro-rata with common shares, or $0.19 per 1/1,000 th preferred share.

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 7A. Quantitative and Qualitative Disclosures About Market Risk