10-K/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K/A

FOR THE ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Annual Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

     For the fiscal year ended December 31, 2003

Commission File No. 0-13660

SEACOAST BANKING CORPORATION OF FLORIDA

(Exact Name of Registrant as Specified in Its Charter)

Florida	59-2260678
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
815 Colorado Avenue, Stuart, FL	34994
(Address of Principal Executive Offices)	(Zip Code)
Registrant’s telephone number, including area code	(772) 287-4000

Securities registered pursuant to Section 12 (b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, Par Value $.10	NASDAQ

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     YES þ      NO o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

     YES þ       NO o

     State the aggregate market value of the voting stock and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Common Stock, $.10 par value - $320,747,594 based upon the closing sale price of $20.69 on February 20, 2004, using beneficial ownership stock rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934, to exclude voting stock owned by directors and executive officers, some of whom may not be held to be affiliates upon judicial determination.

     Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

Common Stock, $.10 Par Value – 15,502,542 shares, as of February 20, 2004.

DOCUMENTS INCORPORATED BY REFERENCE

1.

Certain portions of the registrant’s 2004 Proxy Statement for the Annual Meeting of Shareholders to be held April 22, 2004 (the “2004 Proxy Statement”) are incorporated by reference into Part III, Items 10 through 13 of this report. Other than those portions of the 2004 Proxy Statement specifically incorporated by reference herein pursuant to Items 10 through 13, no other portions of the 2004 Proxy Statement shall be deemed so incorporated.

2.

Certain portions of the registrant’s 2003 Annual Report to Shareholders (the “2003 Annual Report”) are incorporated by reference in Part II, Items 6 through 8 and Item 14 of this report. Other than those portions of the 2003 Annual Report specifically incorporated by reference herein pursuant to Items 6 through 8 and Item 14, no other portions of the 2003 Annual Report shall be deemed so incorporated.

FORM 10-K CROSS-REFERENCE INDEX

		Page of
		Form		Annual
		10-K		Report
Part I
Item 1.	Business		3-14		—
Item 2.	Properties		14-18		—
Item 3.	Legal Proceedings		19		—
Item 4.	Submission of Matters to a Vote of Security Holders		19		—
Part II
Item 5.	Market For Common Equity and Related Stockholder Matters		19-21		36
Item 6.	Selected Financial Data		21		1
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21		11-33
Item 7A.	Market Risk		22	15-16, 23, 31-33 & 60-61
Item 8.	Financial Statements and Supplementary Data		22	34-36 & 39-61
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		22		—
Item 9A.	Controls and Procedures		22-23		—

		Page of
		Form
		10-K		Proxy
Part III
Item 10.	Directors and Executive Officers of the Registrant		23	3-11 &24
Item 11.	Executive Compensation		23	11-13 & 16-19
Item 12.	Security Ownership of Certain Beneficial Owners and Management		23-25	4-8, 10 & 22-23
Item 13.	Certain Relationships and Related Party Transactions		25		21
Item 14.	Principal Accountant Fees and Services		25		23-24

		Page of
		Form		Annual
		10-K		Report
Part IV
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1)	List of All Financial Statements		25
	Consolidated Balance Sheets as of December 31, 2003 and 2002		—		40
	Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001		—		39
	Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2003, 2002 and 2001		—		42
	Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002, and 2001		—		41, 57

		Page of
		Form		Annual
		10-K		Report
	Report of Independent Certified Public Accountants		—		38
	Notes to Consolidated Financial Statements		—		43-61
(a)(2)	List of Financial Statement Schedules		26		—
(a)(3)	List of Exhibits		26-28		—
(b)	Reports on Form 8-K		28-29		—
(c)	Exhibits		29		—
(d)	Financial Statement Schedules		29		—
Amended & Restated Articles of Incorporation
Annual Report
Subsidiaries
Consent of PricewaterhouseCoopers LLP
Notice of Inability to Obtain Consent
Section 302 Certification - CEO
Section 302 Certification - CFO
Section 906 - Statement CEO
Section 906 - Statement CFO

SPECIAL CAUTIONARY NOTICE
REGARDING FORWARD-LOOKING STATEMENTS

     Certain of the statements made herein under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere including information incorporated herein by reference to other documents, are “forward-looking statements” within the meaning of, and subject to the protections of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

     Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

     All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may”, “will”, “anticipate”, “assume”, “should”, “indicate”, “would”, “believe”, “contemplate”, “expect”, “estimate”, “continue”, “plan”, “point to”, “project”, “could”, “intend”, “target”, 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:

• future economic or business conditions;

• governmental monetary and fiscal policies, as well as legislative and regulatory changes;

• the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities;

• the effects of competition from a wide variety of local regional national and other providers of financial, investment, and insurance services;

• the failure of assumptions underlying the establishment of reserves for possible loan losses and other estimates;

• the risks of mergers and acquisitions, including, without limitation, the related costs, including integrating operations as part of these transactions and the failure to achieve expected gains, revenue growth and/or expense savings from such transactions;

• changes in laws and regulations, including tax laws and regulations;

• changes in accounting policies, rules and practices;

• changes in technology or products may be more difficult, or costly, or less effective than anticipated;

• the effects of war or other conflict, acts of terrorism or other catastrophic events that may affect general economic conditions; and

• other factors and risks described in any of our subsequent reports that we make with the Commission under the Exchange Act.

     All written or oral forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this report, or after the respective dates on which such statements otherwise are made.

Part I

Item 1. Business

General

     Seacoast is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (“BHC Act”). Seacoast was incorporated under the laws of the State of Florida on January 24, 1983, by the management of its principal subsidiary, First National Bank and Trust Company of the Treasure Coast (the “Bank”), for the purpose of becoming a holding company for the Bank. On December 30, 1983, Seacoast acquired the Bank in exchange for Seacoast common stock .

     The Bank commenced operations in 1933 under the name “Citizens Bank of Stuart” pursuant to a charter originally granted by the State of Florida in 1926. The Bank converted to a national bank on August 29, 1958.

     Through the Bank and its broker-dealer subsidiary, Seacoast offers a full array of deposit accounts and retail banking services, engages in consumer and commercial lending and provides a wide variety of trust and asset management services, as well as securities and annuity products. Seacoast’s primary service area is the “Treasure Coast,” which, as defined by Seacoast, consists of the counties of Martin, St. Lucie and Indian River on Florida’s southeastern coast. The Bank operates banking offices in the following cities: five in Stuart, two in Palm City, two in Jensen Beach, one on Hutchinson Island, one in Hobe Sound, five in Vero Beach, two in Sebastian, five in Port St. Lucie, and two in Ft. Pierce. The Bank opened a loan production office in northern Palm Beach County in August 2002 which converted to a full service banking office during 2003, and acquired two additional offices in northern Palm Beach County in January 2003. The Bank intends to further expand its presence into Palm Beach County in 2004 and 2005. Two additional full service banking offices in northern Palm Beach County will open in the third quarter of 2004, a third office in 2005. See “Item 2. Properties”.

     Most of our banking offices have one or more Automated Teller Machines (ATMs) that provide customers with 24-hour access to their deposit accounts. Seacoast is a member of the “Star System,” the largest electronic funds transfer organization in the United States, which permits banking customers access to their accounts at over 259,000 locations throughout the United States.

     Customers can also use the Bank’s “MoneyPhone” system to access information on their loan or deposit account balances, to transfer funds between linked accounts, to make loan payments, and to verify deposits or checks that may have cleared. This service is accessible by phone 24 hours a day, seven days a week.

     In addition, customers may access information via the Bank’s Customer Service Center (“CSC”). From 7 A.M. to 7 P.M., Monday through Friday, and on Saturdays from 9 A.M. to 4 P.M., servicing personnel in the CSC are available to open accounts, take applications for certain types of loans, resolve account problems and offer information on other bank products and services to existing and potential customers.

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     The Company also offers Internet banking. The Internet service allows customers to access transactional information on their deposit accounts, review loan and deposit balances, transfer funds between linked accounts and make loan payments from a deposit account, 24 hours a day.

     In February 2000, the Bank opened an office of Seacoast Marine Finance Division in Ft. Lauderdale, Florida. Seacoast Marine Finance is staffed with experienced marine lending professionals with a marketing emphasis on marine loans of $200,000 and greater. In November 2002, the Seacoast Marine Finance Division added key personnel in California to serve the western markets. All loans that are originated by the Seacoast Marine Division outside of the Bank’s primary service area are generally sold.

     Seacoast has six indirect subsidiaries:

• FNB Brokerage Services, Inc. (“FNB Brokerage”), which provides brokerage and annuity services;

• FNB Insurance Services, Inc. (“FNB Insurance”), which provides insurance agency services;

• South Branch Building, Inc., which is a general partner in a partnership that constructed a branch facility of the Bank;

• Big O RV Resort, Inc., which was formed to own and operate certain properties acquired through foreclosure, but which currently is inactive;

• FNB Property Holdings, Inc., a Delaware holding company whose primary asset is an investment in FNB RE Services, Inc.; and

• FNB, RE Services, Inc., a real estate investment trust.

With the exception of FNB Property Holdings, Inc., the operations of each of these indirect subsidiaries contribute less than 10% of the consolidated assets and revenues of Seacoast.

     As a bank holding company, Seacoast is a legal entity separate and distinct from its subsidiaries. Seacoast coordinates the financial resources of the consolidated enterprise and maintains financial, operational and administrative systems that allow centralized evaluation of subsidiary operations and coordination of selected policies and activities. Seacoast’s operating revenues and net income are derived primarily from its subsidiaries through dividends, fees for services performed and interest on advances and loans. See “Supervision and Regulation.”

     As of December 31, 2003, Seacoast and its subsidiaries employed 339 full-time equivalent employees.

     Seacoast’s and the Bank’s principal offices are located at 815 Colorado Avenue, Stuart, Florida 34994, and the telephone number at that address is (772) 287-4000. Seacoast and the Bank maintain Internet websites at www.seacoastbanking.net and www.fnbtc.net, respectively. Seacoast is not incorporating the information on these websites into this report, and none of these websites nor the information appearing on these websites is included or incorporated in, or is a part of, this report.

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Expansion of Business

     Seacoast has expanded its products and services to meet the changing needs of the various segments of its market, and it presently expects to continue this strategy. Prior to 1991, Seacoast had expanded geographically primarily through the addition of branches, including the acquisition of a thrift branch in St. Lucie County. Seacoast also from time to time has acquired banks, bank branches and deposits, and has opened new branches and facilities.

     Florida law permits statewide branching, and Seacoast has expanded, and anticipates future expansion in its markets, by opening additional offices and facilities. New banking facilities were opened in November 1994 in St. Lucie West, a new community west of Port St. Lucie, and in May 1996 in a Wal-Mart superstore in Sebastian, which is located in northern Indian River County. In May, June and July 1997, and in March 1998, four additional branch offices were opened in Indian River County. In July 2000, a new branch on US 1 in northern Martin County near the St. Lucie County line was opened; and at the same time a branch in St. Lucie County approximately one-half mile from the new branch was closed. In June 2001, a branch in a conveniently located Wal-Mart Superstore was acquired in Ft. Pierce. An additional Wal-Mart branch was opened in Port St. Lucie, Florida in October 2002. In January 2003, two branches were acquired on US 1 in northern Palm Beach County. A branch in northern St. Lucie County was closed in early 2003. See “Item 2. Properties”.

     Seacoast regularly evaluates possible mergers, acquisitions and other expansion opportunities.

Competition

     Seacoast and its subsidiaries operate in the highly competitive markets of Martin, St. Lucie, Indian River and Palm Beach Counties, all of which are located in southeastern Florida. The Bank not only competes with other banks in its markets, but it also competes with various other types of financial institutions for deposits, certain commercial, fiduciary and investment services and various types of loans and certain other financial services. The Bank also competes for interest-bearing funds with a number of other financial intermediaries and investment alternatives, including mutual funds, brokerage and insurance firms, governmental and corporate bonds, and other securities.

     Seacoast and its subsidiaries compete not only with financial institutions based in the State of Florida, but also with a number of large out-of-state and foreign banks, bank holding companies and other financial institutions that have an established market presence in the State of Florida, or that offer products by mail, telephone or over the Internet. Many of Seacoast’s competitors are engaged in local, regional, national and international operations and have greater assets, personnel and other resources than Seacoast. Some of these competitors are subject to less regulation and/or more favorable tax treatment than Seacoast.

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Supervision and Regulation

     Bank holding companies and banks are extensively regulated under federal and state law. This discussion is qualified in its entirety by reference to the particular statutory and regulatory provisions referred to below and is not intended to be an exhaustive description of the statutes or regulations applicable to the Company’s and the Bank’s business. Supervision, regulation, and examination of the Company and the Bank and their respective subsidiaries by the bank regulatory agencies are intended primarily for the protection of bank depositors rather than holders of Company capital stock. Any change in applicable law or regulation may have a material effect on the Company’s business.

Bank Holding Company Regulation

     The Company, as a bank holding company, is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the BHC Act. Bank holding companies are generally limited to the business of banking, managing or controlling banks, and other activities that the Federal Reserve determines to be so closely related to banking, or managing or controlling banks, as to be a proper incident thereto. The Company is required to file with the Federal Reserve periodic reports and such other information as the Federal Reserve may request. The Federal Reserve examines the Company, and may examine the Company’s non-bank Subsidiaries.

     The BHC Act requires prior Federal Reserve approval for, among other things, the acquisition by a bank holding company of direct or indirect ownership or control of more than 5% of the voting shares or substantially all the assets of any bank, or for a merger or consolidation of a bank holding company with another bank holding company. With certain exceptions, the BHC Act prohibits a bank holding company from acquiring direct or indirect ownership or control of voting shares of any company which is not a bank or bank holding company, and from engaging directly or indirectly in any activity other than banking or managing or controlling banks or performing services for its authorized subsidiaries. A bank holding company, may, however, engage in or acquire an interest in a company that engages in activities which the Federal Reserve has determined by regulation or order to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.

     In November 1999, the Gramm-Leach-Bliley Act (“GLB”) was enacted, which substantially revises the statutory restrictions separating banking activities from certain other financial activities. Under GLB, bank holding companies that are “well-capitalized” and “well-managed”, as defined in Federal Reserve Regulation Y, which have and maintain “satisfactory” Community Reinvestment Act (“CRA”) ratings, and meet certain other conditions, can elect to become “financial holding companies”. Financial holding companies and their subsidiaries are permitted to acquire or engage in previously impermissible activities such as insurance underwriting, securities underwriting, travel agency activities, broad insurance agency activities, merchant bank, and other activities that the Federal Reserve determines to be financial in nature or complementary thereto. In addition, under the merchant banking authority added by the GLB and Federal Reserve regulation, financial holding companies are authorized to invest in companies that engage in activities that are not financial in nature, as long as the financial holding company makes its investment with the intention of limiting the term of its investment

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and does not manage the company on a day-to-day basis, and the invested company does not cross-market with any of the financial holding company’s controlled depository institutions. Financial holding companies continue to be subject to the overall oversight and supervision of the Federal Reserve, but GLB applies the concept of functional regulation to the activities conducted by subsidiaries. For example, insurance activities would be subject to supervision and regulation by state insurance authorities. While the Company has not become a financial holding company, it may elect to do so in the future in order to exercise the broader activity powers provided by GLB. The GLB Act also includes consumer privacy provisions, and the federal bank regulatory agencies have adopted extensive privacy rules implementing the GLB Act.

     The Company is a legal entity separate and distinct from the Bank and its other subsidiaries. Various legal limitations restrict the Bank from lending or otherwise supplying funds to the Company or its non-bank subsidiaries. The Company and the Bank are subject to Section 23A of the Federal Reserve Act and Federal Reserve Regulation W thereunder. Section 23A defines “covered transactions”, which include extensions of credit, and limits a bank’s covered transactions with any affiliate to 10% of such bank’s capital and surplus. All covered and exempt transactions between a bank and its affiliates must be on terms and conditions consistent with safe and sound banking practices, and banks and their subsidiaries are prohibited from purchasing low-quality assets from the bank’s affiliates. Finally, Section 23A requires that all of a bank’s extensions of credit to its affiliates be appropriately secured by acceptable collateral, generally United States government or agency securities. The Company and the Bank also are subject to Section 23B of the Federal Reserve Act, which generally limits covered and other transactions among affiliates to be on terms, including credit standards, that are substantially the same or at least as favorable to the bank or its subsidiary as those prevailing at the time for similar transactions with unaffiliated companies.

     The BHC Act permits acquisitions of banks by bank holding companies, such that Seacoast and any other bank holding company located in Florida may now acquire a bank located in any other state, and any bank holding company located outside Florida may lawfully acquire any bank based in another state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions. Federal law also permits national and state-chartered banks to branch interstate through acquisitions of banks in other states. Florida has an Interstate Branching Act (the “Florida Branching Act”), which permits interstate branching. Under the Florida Branching Act, with the prior approval of the Florida Department of Banking and Finance, a Florida bank may establish, maintain and operate one or more branches in a state other than the State of Florida pursuant to a merger transaction in which the Florida bank is the resulting bank. In addition, the Florida Branching Act provides that one or more Florida banks may enter into a merger transaction with one or more out-of-state banks, and an out-of-state bank resulting from such transaction may maintain and operate the branches of the Florida bank that participated in such merger. An out-of-state bank, however, is not permitted to acquire a Florida bank in a merger transaction, unless the Florida bank has been in existence and continuously operated for more than three years.

     Federal Reserve policy requires a bank holding company to act as a source of financial strength and to take measures to preserve and protect bank subsidiaries in situations where additional investments in a troubled bank may not otherwise be warranted. In addition, under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), where a

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bank holding company has more than one bank or thrift subsidiary, each of the bank holding company’s subsidiary depository institutions are responsible for any losses to the Federal Deposit Insurance Corporation (“FDIC”) as a result of an affiliated depository institution’s failure. As a result, a bank holding company may be required to loan money to its subsidiaries in the form of capital notes or other instruments that qualify as capital under regulatory rules. However, any loans from the holding company to such subsidiary banks likely will be unsecured and subordinated to such bank’s depositors and perhaps to other creditors of the bank.

Bank and Bank Subsidiary Regulation

     The Bank is subject to supervision, regulation, and examination by the federal Office of the Comptroller of the Currency (the “OCC”) which monitors all areas of the operations of the Bank, including reserves, loans, mortgages, issuances of securities, payment of dividends, establishment of branches, capital adequacy, and compliance with laws. The Bank is a member of the FDIC and, as such, its deposits are insured by the FDIC to the maximum extent provided by law. See “FDIC Insurance Assessments”.

     Under Florida law, the Bank may establish and operate branches throughout the State of Florida, subject to the maintenance of adequate capital and the receipt of OCC approval.

     The OCC has adopted a series of revisions to its regulations, including expanding the powers exercisable by operations subsidiaries of the Bank. These changes also modernize and streamline corporate governance, investment and fiduciary powers. The OCC also recently has strengthened its ability to preempt state laws purporting to regulate the activities of national banks.

     The OCC has adopted the Federal Financial Institutions Examination Council’s (“FFIEC”) rating system and assigns each financial institution a confidential composite rating based on an evaluation and rating of six essential components of an institution’s financial condition and operations including Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk, as well as the quality of risk management practices. For most institutions, the FFIEC has indicated that market risk primarily reflects exposures to changes in interest rates. When regulators evaluate this component, consideration is expected to be given to: management’s ability to identify, measure, monitor, and control market risk; the institution’s size; the nature and complexity of its activities and its risk profile, and the adequacy of its capital and earnings in relation to its level of market risk exposure. Market risk is rated based upon, but not limited to, an assessment of the sensitivity of the financial institution’s earnings or the economic value of its capital to adverse changes in interest rates, foreign exchange rates, commodity prices, or equity prices; management’s ability to identify, measure, monitor, and control exposure to market risk; and the nature and complexity of interest rate risk exposure arising from nontrading positions.

     GLB requires banks and their affiliated companies to adopt and disclose privacy policies regarding the sharing of personal information they obtain from their customers with third parties. GLB also permits bank subsidiaries to engage in “financial activities” through subsidiaries similar to those permitted to financial holding companies. See the discussion regarding GLB in “Bank Holding Company Regulation” above.

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     FNB Brokerage, a Bank subsidiary, is registered as a securities broker-dealer under the Exchange Act and is regulated by the Securities and Exchange Commission (“SEC”). As a member of the National Association of Securities Dealers, Inc., it also is subject to examination and supervision of its operations, personnel and accounts by NASD Regulation, Inc. FNB Brokerage is a separate and distinct entity from the Bank, and must maintain adequate capital under the SEC’s net capital rule. The net capital rule limits FNB Brokerage’s ability to reduce capital by payment of dividends or other distributions to the Bank. FNB Brokerage is also authorized by the State of Florida to act as a securities dealer and investment advisor.

     FNB Insurance, a Bank insurance agency subsidiary, is authorized by the State of Florida to market insurance products as agents. FNB Insurance is a separate and distinct entity from the Bank and is subject to supervision and regulation by state insurance authorities.

     The Internal Revenue Code of 1986 (“IRC”), as amended, provides requirements that must be met with respect to the Bank’s indirect subsidiary to continue its status as a real estate investment trust for federal and state income tax purposes.

Community Reinvestment Act

     The Company and the Bank are subject to the provisions of the Community Reinvestment Act of 1977, as amended (the “CRA”) and the federal banking agencies’ regulations thereof. Under the CRA, all banks and thrifts have a continuing and affirmative obligation, consistent with their safe and sound operation to help meet the credit needs for their entire communities, including low and moderate income neighborhoods. The CRA requires a depository institution’s primary federal regulator, in connection with its examination of the institution, to assess the institution’s record of assessing and meeting the credit needs of the communities served by that institution, including low- and moderate-income neighborhoods. The regulatory agency’s assessment of the institution’s record is made available to the public. Further, such assessment is required of any institution which has applied to: (i) charter a national bank; (ii) obtain deposit insurance coverage for a newly-chartered institution; (iii) establish a new branch office that accepts deposits; (iv) relocate an office; (v) merge or consolidate with, or acquire the assets or assume the liabilities of, a federally regulated financial institution, or (vi) expand other activities, including engaging in financial services activities authorized by GLB. A less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities and prevent a company from becoming a financial holding company.

     GLB and federal bank regulations have made various changes to the CRA. Among other changes, CRA agreements with private parties must be disclosed and annual CRA reports must be made to a bank’s primary federal regulator. A bank holding company will not be permitted to become or remain a financial holding company and no new activities authorized under GLB may be commenced by a holding company or by a bank financial subsidiary if any of its bank subsidiaries received less than a “satisfactory” CRA rating in its latest CRA examination. The OCC and other federal bank regulators proposed in February 2004, revisions to their CRA regulations that would, among other things, require that evidence of discriminatory, illegal or abusive lending practices be considered in the CRA evaluation.

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     The Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act (the “ECOA”) and the Fair Housing Act (the “FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction. In 1994, the Department of Housing and Urban Development, the Department of Justice (the “DOJ”), and the federal banking agencies issued an Interagency Policy Statement on Discrimination in Lending in order to provide guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DOJ has also increased its efforts to prosecute what it regards as violations of the ECOA and FHA.

Payments of Dividends

     The Company is a legal entity separate and distinct from its bank and other subsidiaries. The prior approval of the OCC is required if the total of all dividends declared by a national bank (such as the Bank) in any calendar year will exceed the sum of such bank’s net profits for the year and its retained net profits for the preceding two calendar years, less any required transfers to surplus. Federal law also prohibits any national bank from paying dividends that would be greater than such bank’s undivided profits after deducting statutory bad debts in excess of such bank’s allowance for possible loan losses.

     In addition, the Company and the 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 regulatory authority is authorized to determine under certain circumstances relating to the financial condition of a national or state member bank or a bank holding company that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. The OCC and the Federal Reserve have indicated that paying dividends that deplete a national or state member bank’s capital base to an inadequate level would be an unsound and unsafe banking practice. The OCC and the Federal Reserve have each indicated that depository institutions and their holding companies should generally pay dividends only out of current operating earnings.

Capital

     The Federal Reserve and the OCC have risk-based capital guidelines for bank holding companies and national banks, respectively. These guidelines require a minimum ratio of capital to risk-weighted assets (including certain off-balance-sheet activities, such as standby letters of credit) of 8%. At least half of the total capital must consist of common equity, retained earnings and a limited amount of qualifying preferred stock, less goodwill and certain core deposit intangibles (“Tier 1 capital”). The remainder may consist of non-qualifying preferred stock, qualifying subordinated, perpetual, and/or mandatory convertible debt, term subordinated debt and intermediate term preferred stock and up to 45% of pretax unrealized holding gains on available for sale equity securities with readily determinable market values that are prudently valued, and a limited amount of any loan loss allowance (“Tier 2 capital” and, together with Tier 1 capital, “Total Capital”).

10

     In addition, the Federal Reserve and the OCC have established minimum leverage ratio guidelines for bank holding companies and national banks, which provide for a minimum leverage ratio of Tier 1 capital to adjusted average quarterly assets (“leverage ratio”) equal to 3%, plus an additional cushion of 1.0% to 2.0%, if the institution has less than the highest regulatory rating. The guidelines also provide that institutions experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Higher capital may be required in individual cases depending upon a bank holding company’s risk profile. All bank holding companies and banks are expected to hold capital commensurate with the level and nature of their risks, including the volume and severity of their problem loans. Lastly, the Federal Reserve’s guidelines indicate that the Federal Reserve will continue to consider a “tangible Tier 1 leverage ratio” (deducting all intangibles) in evaluating proposals for expansion or new activity. The Federal Reserve and OCC have not advised the Company or the Bank of any specific minimum leverage ratio or tangible Tier 1 leverage ratio applicable to them.

     The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), among other things, requires the federal banking agencies to take “prompt corrective action” regarding depository institutions that do not meet minimum capital requirements. FDICIA establishes five capital tiers: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”. A depository institution’s capital tier will depend upon how its capital levels compare to various relevant capital measures and certain other factors, as established by regulation.

     All of the federal banking agencies have adopted regulations establishing relevant capital measures and relevant capital levels. The relevant capital measures are the Total Capital ratio, Tier 1 capital ratio, and the leverage ratio. Under the regulations, a national bank will be (i) well capitalized if it has a Total Capital ratio of 10% or greater, a Tier 1 capital ratio of 6% or greater, and a leverage ratio of at least 5%, and is not subject to any written agreement, order, capital directive, or prompt corrective action directive by a federal bank regulatory agency to meet and maintain a specific capital level for any capital measure, (ii) adequately capitalized if it has a Total Capital ratio of 8% or greater, a Tier 1 capital ratio of 4% or greater, and a leverage ratio of 4% or greater (3% in certain circumstances), (iii) undercapitalized if it has a Total Capital ratio of less than 8%, a Tier 1 capital ratio of less than 4% (3% in certain circumstances), (iv) significantly undercapitalized if it has a total capital ratio of less than 6% or a Tier I capital ratio of less than 3%, or a leverage ratio of less than 3%, or (v) critically undercapitalized if its tangible equity is equal to or less than 2% of average quarterly tangible assets.

     As of December 31, 2003, the consolidated capital ratios of the Company and the Bank were as follows:

	Regulatory
	Minimum			Company			Bank
Tier 1 capital ratio		4.0	%		13.0	%		12.4	%
Total capital ratio		8.0	%		13.8	%		13.1	%
Leverage ratio		3.0-5.0	%		7.8	%		7.4	%

11

FDICIA

     FDICIA directs that each federal banking regulatory agency prescribe standards for depository institutions and depository institution holding companies relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth compensation, a maximum ratio of classified assets to capital, minimum earnings sufficient to absorb losses, a minimum ratio of market value to book value for publicly traded shares, and such other standards as the federal regulatory agencies deem appropriate.

     FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to growth limitations and are required to submit a capital restoration plan for approval. For a capital restoration plan to be acceptable, the depository institution’s parent holding company must guarantee that the institution will comply with such capital restoration plan. The aggregate liability of the parent holding company is limited to the lesser of 5% of the depository institution’s total assets at the time it became undercapitalized and the amount necessary to bring the institution into compliance with applicable capital standards. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. If the controlling holding company fails to fulfill its obligations under FDICIA and files (or has filed against it) a petition under the federal Bankruptcy Code, the claim would be entitled to a priority in such bankruptcy proceeding over third party creditors of the bank holding company. Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, and cessation of receipt of deposits from correspondent banks. Critically undercapitalized institutions are subject to the appointment of a receiver or conservator. Because the Company and the Bank exceed applicable capital requirements, the respective managements of the Company and the Bank do not believe that the provisions of FDICIA have had any material effect on the Company and the Bank or their respective operations.

     FDICIA also contains a variety of other provisions that may affect the operations of the Company and the Bank, including reporting requirements, regulatory standards for real estate lending, “truth in savings” provisions, the requirement that a depository institution give 90 days’ prior notice to customers and regulatory authorities before closing any branch, and a prohibition on the acceptance or renewal of brokered deposits by depository institutions that are not well capitalized or are adequately capitalized and have not received a waiver from the FDIC. The Bank is well capitalized, and brokered deposits are not restricted.

Enforcement Policies and Actions

     The Federal Reserve and the OCC monitor compliance with laws and regulations. Violations of laws and regulations, or other unsafe and unsound practices, may result in these agencies imposing fines or penalties, cease and desist orders, or taking other enforcement actions. Under certain circumstances, these agencies may enforce these remedies directly against officers, directors, employees and others participating in the affairs of a bank or bank holding company.

12

Fiscal and Monetary Policy

     Banking is a business that depends on interest rate differentials. In general, the difference between the interest paid by a bank on its deposits and its other borrowings, and the interest received by a bank on its loans and securities holdings, constitutes the major portion of a bank’s earnings. Thus, the earnings and growth of Seacoast and the Bank are subject to the influence of economic conditions generally, both domestic and foreign, and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve. The Federal Reserve regulates the supply of money through various means, including open market dealings in United States government securities, the discount rate at which banks may borrow from the Federal Reserve, and the reserve requirements on deposits. The nature and timing of any changes in such policies and their effect on Seacoast and its subsidiaries cannot be predicted.

FDIC Insurance Assessments

     The Bank is subject to FDIC deposit insurance assessments. The Bank’s deposits are primarily insured by the FDIC’s Bank Insurance Fund (“BIF”). The Bank is also a member of the Savings Association Insurance Fund (“SAIF”) to the extent that the Bank holds deposits acquired in 1991 from the Resolution Trust Corporation (“RTC”). The FDIC assesses deposits under a risk-based premium schedule. Each financial institution is assigned to one of three capital groups, “well capitalized,” “adequately capitalized” or “undercapitalized,” and further assigned to one of three subgroups within a capital group, on the basis of supervisory evaluations by the institution’s primary federal and, if applicable, state regulators and other information relevant to the institution’s financial condition and the risk posed to the applicable insurance fund. The actual assessment rate applicable to a particular institution, therefore, depends in part upon the risk assessment classification so assigned to the institution by the FDIC. During the three years ended December 31, 2003, the Bank paid $0 in BIF and SAIF deposit insurance premiums, and paid approximately $163,000, $173,000 and $178,000 in FICO assessments during 2003, 2002 and 2001, respectively. The FDIC has indicated that based on its current level of reserves, deposit insurance premiums may increase in 2004.

     The FDIC’s Board of Directors has continued the 2003 BIF and SAIF assessment schedule of zero to 27 basis points per annum for the first semiannual period of 2004. The Deposit Insurance Funds Act of 1996 (the “Funds Act”) authorized FICO to levy assessments on BIF-assessable deposits. Since 1999, the FICO assessment rate has been equal for BIF and SAIF-assessable deposits. The FICO assessments are set quarterly and ranged from 1.82 basis points for BIF and SAIF in the first quarter of 2002 to 1.70 basis points in the last quarter of 2002 and from 1.68 basis points in the first quarter of 2003 to 1.52 basis points in the last quarter of 2003. The FICO assessment rate for the first quarter of 2004 is 1.54 basis points.

13

Legislative and Regulatory Changes

     The International Money Laundering Abatement and Anti-Terrorism Funding Act of 2001 imposes new “know your customer” requirements that obligate financial institutions to take actions to verify the identity of the account holders in connection with opening an account at any U.S. financial institution. Banking regulators are required to consider a financial institution’s compliance with this Act’s money laundering provisions in making decisions regarding approval of acquisitions and mergers, and the regulatory authorities may impose sanctions for violations of this Act.

     Legislative and regulatory proposals regarding changes in banking, and the regulation of banks, thrifts and other financial institutions and bank and bank holding company powers are being considered by the executive branch of the Federal government, Congress and various state governments, including Florida. The FDIC has proposed a restructuring of the federal deposit insurance system, including provisions to better measure and price deposit insurance, to merge BIF and SAIF and to increase deposit insurance coverage. Other proposals pending in Congress would, among other things, allow banks to pay interest on checking accounts, allow the Federal Reserve to pay interest on deposits, and would permit interstate branching on a de novo basis. Certain of these proposals, if adopted, could significantly change the regulation or operations of banks and the financial services industry. It cannot be predicted whether any of these proposals will be adopted, and, if adopted, how these proposals will affect the Company and the Bank.

Statistical Information

     Certain statistical and financial information (as required by Guide 3) is included in response to Item 7 of this Annual Report on Form 10-K. Certain statistical information is also included in response to Item 6 and Item 8 of this Annual Report on Form 10-K.

Item 2. Properties

     Seacoast and the Bank’s main office occupies approximately 62,000 square feet of a 68,000 square foot building in Stuart, Florida. The building, together with an adjacent 10-lane drive-in banking facility and an additional 27,000 square foot office building, are situated on approximately eight acres of land in the center of Stuart zoned for commercial use. The building and land are owned by the Bank, which leases out portions of the building not utilized by Seacoast and the Bank to unaffiliated third parties.

     Adjacent to the main office, the Bank leases approximately 21,400 square feet of office space to house operational departments, consisting primarily of information systems and retail support. The Bank owns its equipment, which is used for servicing bank deposits and loan accounts as well as on-line banking services, providing tellers and other customer service personnel with access to customers’ records.

     In February 2000, the Bank leased storefront space in Ft. Lauderdale, Florida for a lending office for its Seacoast Marine Finance division. The office occupies 1,913 square feet of space, with furniture and equipment all owned by the Bank. In November 2002, additional office space was acquired for Seacoast Marine Finance in Alameda, California (430 square feet of leased space), and Newport Beach, California (1,200 square feet of leased space). The furniture and equipment at each location is owned by the Bank.

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     As of December 31, 2003, the net carrying value of branch offices (excluding the main office) was approximately $10.0 million. Seacoast’s branch offices are described as follows:

Jensen Beach, opened in 1977, is a free-standing facility located in the commercial district of a residential community contiguous to Stuart. The 1,920 square foot bank building and land are owned by the Bank. Improvements include three drive-in teller lanes and one drive-up ATM as well as a parking lot and landscaping.

East Ocean Boulevard, opened at its original location in 1978, was a 2,400 square foot building leased by the Bank. The acquisition of American Bank provided an opportunity for the Bank to move to a new location in April 1995. It is still located on the main thoroughfare between downtown Stuart and Hutchinson Island’s beachfront residential developments. The first three floors of a four-story office condominium were acquired in the acquisition. The 2,300 square foot branch area on the first floor has been remodeled and operates as a full service branch including five drive-in lanes and a drive-up ATM. The remaining 2,300 square feet on the ground floor was sold in June 1996, the third floor was sold in December 1995, and the second floor in December 1998.

Cove Road, opened in late 1983, is conveniently located close to housing developments in the residential areas south of Stuart known as Port Salerno and Hobe Sound. South Branch Building, Inc., a subsidiary of the Bank, is a general partner in a partnership that entered into a long-term land lease for approximately four acres of property on which it constructed a 7,500 square foot building. The Bank leases the building and utilizes 3,450 square feet of the available space. Remaining space is sublet by the Bank to other business tenants. The Bank has improved its premises with three drive-in lanes, bank equipment, and furniture and fixtures, all of which are owned by the Bank. A drive-up ATM was added in early 1997.

Hutchinson Island, opened on December 31, 1984, is in a shopping center located on a coastal barrier island, close to numerous oceanfront condominium developments. In 1993, the branch was expanded from 2,800 square feet to 4,000 square feet and is under a long-term lease to the Bank. The Bank has improved the premises with bank equipment, a walk-up ATM and three drive-in lanes, all owned by the Bank.

Rivergate originally opened October 28, 1985 and occupied 1,700 square feet of leased space in the Rivergate Shopping Center, Port St. Lucie, Florida. The Bank moved to larger facilities in the shopping center in April of 1999 under a long-term lease agreement. Furniture and bank equipment located in the prior facilities were moved to the new facility, which occupies approximately 3,400 square feet, with three drive-in lanes and a drive-up ATM.

15

Wedgewood Commons, opened in April 1988, is located on an out-parcel under long term lease in the Wedgewood Commons Shopping Center, south of Stuart on U.S. Highway 1. The property consists of a 2,800 square foot building that houses four drive-in lanes, a walk-up ATM and various bank equipment, all of which are owned by the Bank and are located on the leased property.

Bayshore, opened on September 27, 1990, occupies 3,520 square feet of a 50,000 square foot shopping center located in Port St. Lucie. The Bank has leased the premises under a long-term lease agreement and has made improvements to the premises, including the addition of three drive-in lanes and a walk-up ATM, all of which are owned by the Bank. A second location, acquired in the merger with Port St. Lucie National Holding Company (“PSHC”), and in close proximity to this location, was closed on June 1, 1997 and subsequently sold in September 1997.

Hobe Sound, acquired from the RTC on December 23, 1991, is a two-story facility containing 8,000 square feet and is centrally located in Hobe Sound. Of 2,800 square feet on the second floor, 1,225 square feet is utilized by local community organizations. Improvements include two drive-in teller lanes, a drive-up ATM, and equipment and furniture, all of which are owned by the Bank.

Fort Pierce, acquired from the RTC on December 23, 1991, is a 2,895 square foot facility in the heart of Fort Pierce that has three drive-in lanes and a drive-up ATM. Equipment and furniture are all owned by the Bank.

Martin Downs, purchased from the RTC in February 1992, is a 3,960 square foot bank building located at a high traffic intersection in Palm City, an emerging commercial and residential community west of Stuart. Improvements include three drive-in teller lanes, a drive-up ATM, equipment and furniture.

Tiffany, purchased from the RTC in May 1992, is a two-story facility containing 8,250 square feet and is located on a corner of U.S. Highway 1 in Port St. Lucie offering excellent exposure in one of the fastest growing residential areas in the region. The second story contains 4,250 square feet and was leased to tenants until December 2001. In 2002, the Bank utilized the second story space to house brokerage and mortgage solicitation personnel, a training facility and conference area. Three drive-in teller lanes, a walk-up ATM, equipment and furniture are utilized and owned by the Bank.

Vero Beach, purchased from the RTC in February 1993, is a 3,300 square foot bank building located in Vero Beach on U.S. Highway One and represents the Bank’s initial presence in the Indian River County market. A leasehold interest in a long-term land lease was acquired. Improvements include three drive-in teller lanes, a walk-up ATM, equipment and furniture, all of which are owned by the Bank.

Beachland, opened in February 1993, consists of 4,150 square feet of leased space located in a three-story commercial building on Beachland Boulevard, the main beachfront thoroughfare in Vero Beach, Florida. The lease on an additional 1,050 square feet leased during 1996 expired in March 2002. This facility has 2 drive-in teller lanes, a drive-up ATM, and furniture and equipment, all owned by the Bank.

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Sandhill Cove, opened in September 1993, is in an upscale life-care retirement community. The 135 square foot office is located within the community facilities on a 36-acre development in Palm City, Florida. This community contains approximately 168 private residences.

St. Lucie West, opened in November 1994, was in a 3,600 square foot building located at 1320 S.W. St. Lucie Blvd, Port St. Lucie, Florida. As a result of the PSHC merger, this facility was closed in June 1997 and the property was sold in September 1997. On June 1, 1997, the Bank moved its St. Lucie West operations to the Renar Centre (previously occupied by PSHC). The Bank leases 4,320 square feet on the first floor of this facility and 1,200 square feet on the second floor. The facility includes three drive-in teller lanes, a drive-up ATM, and furniture and equipment.

Mariner Square, acquired from American Bank in April 1995, is a 3,600 square foot leased space located on the ground floor of a three-story office building located on U.S. Highway 1 between Hobe Sound and Port Salerno. Approximately 700 square feet of the space is sublet to a tenant. The space occupied by the Bank has been improved to be a full service branch with two drive-in lanes, one serving as a drive-up ATM lane as well as a drive-in teller lane, all owned by the Bank.

Sebastian, opened in May 1996, is located within a 174,000 square foot Wal-Mart Superstore on U.S. Highway 1 in northern Indian River County. The leased space occupied by the Bank totals 865 square feet. The facility has a walk-up ATM, owned by the Bank.

Nettles Island was opened in January 1997 in southern St. Lucie County on Hutchinson Island. It occupies 350 square feet of leased space in a predominantly modular home community. Furniture and equipment are owned. No ATM or drive-in lanes are offered. The Bank closed this facility in May 2003.

U.S. Highway 1 and Port St. Lucie Boulevard office opened as a Bank location on June 1, 1997, upon the merger with PSHC. At the date of the merger, the leased space consisted of 5,188 square feet on the first floor and 1,200 square feet on the second floor. In October 1997, 1,800 square feet of the leased space on the first floor and 1,200 square feet of leased space on the second floor were assigned to another tenant, with the remaining space occupied by the Bank totaling 3,388 square feet. The facility has two drive-in lanes, a walk-up ATM, and furniture and equipment, all owned by the Bank. This facility was closed in July 2000, coinciding with the opening of the Jensen West location, a new, more visible office on a leased out-parcel in a new shopping center approximately one-half mile south of the closed location on U.S. Highway 1. The lease expired in April 2002.

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South Vero Square opened in May 1997 in a 3,150 square foot building owned by the Bank on South U.S. Highway 1 in Vero Beach. The facility includes three drive-in teller lanes, a drive-up ATM, and furniture and equipment, all owned by the Bank.

Oak Point opened in June 1997. It occupies 12,000 square feet of leased space on the first and second floor of a 19,700 square foot 3-story building in Indian River County. The office is in close proximity to Indian River Memorial Hospital and the peripheral medical community adjacent to the hospital. The facility includes three drive-in teller lanes, a walk-up ATM, and furniture and equipment, all owned by the Bank. On the second floor, 2,270 square feet is presently sublet to tenants.

Route 60 Vero opened in July 1997. Similar to the Sebastian office, this facility is housed in a Wal-Mart Superstore in western Vero Beach in Indian River County. The branch occupies 750 square feet of leased space and includes a walk-up ATM.

Sebastian West opened in March 1998 in a 3,150 square foot building owned by the Bank. It is located at the intersection of Fellsmere Road and Roseland Road in Sebastian. The facility includes three drive-in teller lanes, a drive-up ATM, and furniture and equipment, all owned by the Bank.

Jensen West, opened in July 2000, is located on an out parcel under long-term lease on U.S. Highway 1 in northern Martin County. The facility consists of a 3,930 square foot building, with four drive-up lanes, a drive-up ATM and furniture and equipment, all of which are owned by the Bank and are located on the leased property. The opening of this office coincided with the closing of the Bank’s U.S. Highway 1 and Port St. Lucie Boulevard office, one-half mile north of this location.

Ft. Pierce Wal-Mart, opened in June 2001, is another Wal-Mart Superstore location. The branch occupies 540 square feet of leased space and includes a walk-up ATM, a night depository, and furniture and equipment, all owned by the Bank.

Port St. Lucie Wal-Mart opened in October 2002 and occupies 695 square feet of leased space in a brand new Wal-Mart Superstore in a highly visible location on U.S. Highway 1. The branch includes a walk-up ATM, a night depository, and furniture and equipment, all owned by the Bank.

Jupiter, this office opened as a loan production office in August 2002 and converted to a full-service branch during 2003. Commercial and residential lending personnel as well as executive offices are maintained at this location. The office occupies 3,718 square feet of leased space on U.S. Highway 1 in Jupiter, Florida. No ATM or night depository exists for this location; furniture and equipment is owned by the Bank.

Jupiter Bluffs, which opened in January 2003, occupies 2,688 square feet of leased space in a storefront on U.S. Highway One, with a walk-up ATM, and furniture and equipment, all owned by the Bank.

18

Tequesta also opened in January 2003. The Tequesta office is a 3,500 square foot building acquired and owned by the Bank located on U.S. Highway 1 on property subject to a long term ground lease. The Tequesta location has two drive-up lanes, a drive-up ATM, a night depository, and furniture and equipment, all owned by the Bank.

     For additional information regarding our properties, you should refer to Notes F and I of the Notes to Consolidated Financial Statements in Seacoast’s 2003 Annual Report, certain portions of which are incorporated herein by reference pursuant to Part II, Item 8 of this report.

     In the third quarter 2004, the Company expects to open two more full-service branch offices in northern Palm Beach County, Florida, one located on Northlake Blvd. and the other located on Jupiter Indiantown Road, both significant and busy thoroughfares. The Northlake office will be located in a new 2,881 square foot building constructed and owned by the Bank, with a night depository, three drive-up lanes plus a drive-up ATM, and furniture and equipment, all owned by the Bank. The Indiantown Road office will also occupy a 2,881 square foot building; constructed and owned by the Bank, the building will be situated on land leased by the Bank. This office location is similar in design to the Northlake office, and will include a night depository, three drive-up lanes plus a drive-up ATM, and furniture and equipment, all owned by the Bank.

A signature Palm Beach headquarters office is planned in 2005 for Palm Beach Gardens in northern Palm Beach County. Located across the street from the Gardens Mall on PGA Blvd., this office will occupy leased space in a high-rise office building. Specifics concerning the space to be occupied are under consideration and have not been finalized.

Item 3. Legal Proceedings

     The Company and its subsidiaries are subject, in the ordinary course, to litigation incident to the businesses in which they are engaged. Among these, the Company has learned that claims may be filed against the Bank with respect to a deposit account that allegedly was utilized by a former customer to improperly cash checks (the “Check Claims”). The Company’s management has been reviewing the Check Claims with its counsel and insurers, and while the ultimate outcome of the Check Claims cannot be predicted and no possible range of loss can be estimated, management presently believes that none of the legal proceedings to which it is party, including the Check Claims, are likely to have a material adverse effect on the Company’s consolidated financial position, operating results or cash flows, although no assurance can be given with respect to the ultimate outcome of any such claim or litigation.

Item 4. Submission of Matters to a Vote of Security Holders

     None.

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Part II

Item 5. Market For Common Equity and Related Stockholder Matters

     In 2002, the Company’s shareholders approved amendments to its Articles of Incorporation and eliminated the Company’s Class B Common Stock, which was converted, in accordance with its terms on a one-for-one basis into Class A Common Stock. In addition, the Class A Common Stock liquidation preference was eliminated, and Class A Common Stock was renamed “Common Stock.” Holders of Common Stock are entitled to one vote per share on all matters presented to shareholders as provided in the Company’s Amended and Restated Articles of Incorporation (the “Articles”).

     The Common Stock is traded in the over-the-counter market and quoted on the Nasdaq National Market (“Nasdaq Stock Market”) under the symbol “SBCF.” As of February 20, 2004, there were approximately 15,502,542 shares of Common Stock outstanding, held by approximately 840 record holders.

     The following table sets forth the high and low sale prices per share of Seacoast Common Stock on the Nasdaq Stock Market and the dividends paid per share of Seacoast Common Stock for the indicated periods. All prices and dividend amounts reflect the effect of a three-for-one stock split on the Common Stock, which became effective on July 15, 2002 for shareholders of record on July 1, 2002, and the one additional share of Common Stock distributed for every ten shares held, effective August 15, 2003 for shareholders of record on August 1, 2003.

	Sale Price Per Share of
	Seacoast Common Stock				Annual Dividends
					Declared Per Share of
	High		Low		Seacoast Common Stock
2003
First Quarter	$	18.091	$	16.145	$	0.100
Second Quarter		17.817		14.864		0.100
Third Quarter		18.600		13.851		0.130
Fourth Quarter		18.100		16.670		0.130
2002
First Quarter	$	14.518	$	13.348	$	0.091
Second Quarter		17.494		14.015		0.091
Third Quarter		19.636		14.527		0.091
Fourth Quarter		18.318		15.211		0.100

     During 2001, 2002 or 2003, the Company did not issue or sell any of its securities in transactions not registered under the Securities Act of 1933, as amended.

20

     Prior to the change to the amendments approved by shareholders in April 2002, Seacoast’s Articles of Incorporation prohibited the declaration or payment of cash dividends on Class B Common Stock unless cash dividends were declared or paid on Class A Common Stock in an amount equal to at least 110% of any cash dividend on Class B Common Stock. In 2001, cash dividends of $0.380 per share of Class A Common Stock and $0.344 per share of Class B Common Stock were paid. In the first quarter of 2002, cash dividends of $0.091 per share of Class A Common Stock and $0.082 per share of Class B Common Stock were paid. Over the remaining nine months of 2002 (after shareholder approval of the changes to the Company’s Articles simplifying the Company’s capital structure), cash dividends of $0.282 per share of Common Stock were paid. For 2003, cash dividends of $0.46 per share of Common Stock were paid.

     Dividends from the Bank are Seacoast’s primary source of funds to pay dividends on Seacoast capital stock. Under the National Bank Act, the Bank may in any calendar year, without the approval of the OCC, pay dividends to the extent of net profits for that year, plus retained net profits for the preceding two years (less any required transfers to surplus). The need to maintain adequate capital in the Bank also limits dividends that may be paid to Seacoast. Information regarding a restriction on the ability of the Bank to pay dividends to Seacoast is contained in Note B of the “Notes to Consolidated Financial Statements” contained in Part II, Item 8 hereof. See “Supervision and Regulation” contained in Part I, Item 1 of this document.

     The OCC and Federal Reserve have the general authority to limit the dividends paid by insured banks and bank holding companies, respectively, if such payment may be deemed to constitute an unsafe or unsound practice. If, in the particular circumstances, the OCC determines that the payment of dividends would constitute an unsafe or unsound banking practice, the OCC may, among other things, issue a cease and desist order prohibiting the payment of dividends. This rule is not expected to adversely affect the Bank’s ability to pay dividends to Seacoast. See “Supervision and Regulation” contained in Part I, Item 1 of this document.

Item 6. Selected Financial Data

     Selected financial data of the Company is set forth under the caption “Financial Highlights” on page 1 of the 2003 Annual Report and is incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Management’s Discussion and Analysis of Financial Condition and Results of Operations is set forth under the caption “Financial Review - 2003 Management’s Discussion and Analysis,” on pages 11 through 33 of the 2003 Annual Report, and is incorporated herein by reference.

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Item 7A. Market Risk

     The narrative under the heading of “Market Risk” on page 16 of the 2003 Annual Report is incorporated herein by reference. Table 19, “Interest Rate Sensitivity Analysis” on page 33, the narrative under the heading of “Securities” on page 23, and the narrative under the heading of “Interest Rate Sensitivity” on pages 15-16 of the 2003 Annual Report are incorporated herein by reference. The information regarding securities owned by the Company set forth in Table 15, “Securities Held for Sale”, on page 31 and Table 16, “Securities Held for Investment,” on page 32 of the 2003 Annual Report is incorporated herein by reference. The information set forth in Note T on pages 60-61 in the 2003 Annual Report is incorporated herein by reference. See Exhibit 13 to this report for a complete copy of the 2003 Annual Report.

Risk Management Derivative Financial Instruments

	December 31, 2003
													Average
	Notional		Unrealized		Unrealized						Ineffect-		Maturity
(Dollars in thousands)	Amount		Gains		Losses			Equity			iveness		in Years
LIABILITY HEDGES
Cash flow hedges
Interest rate swaps – pay fixed	$	25,000	$	—	$	(439	)	$	(270	)		—		2.00
Fair value hedges Interest rate swaps – receive fixed		54,000		192		—			—			—		2.62
Total	$	79,000	$	192	$	(439	)	$	(270	)		—		2.31

Risk Management Derivative Financial Instruments – Expected Maturities

	December 31, 2003
	1 Year		1-2			2-5			Over 5
(Dollars in thousands)	or Less		Years			Years			Years		Total
CASH FLOW LIABILITY HEDGES
Notional amount – swaps – pay fixed		—	$	25,000			—			—	$	25,000
Weighted average receive rate		—		1.19	%		—			—		1.19	%
Weighted average pay rate		—		3.12	%		—			—		3.12	%
Unrealized gain (loss)		—		(439	)		—			—		(439	)
FAIR VALUE LIABILITY HEDGES
Notional amount – swaps – receive fixed		—		8,500			45,500			—		54,000
Weighted average receive rate		—		2.86	%		2.86	%		—		2.86	%
Weighted average pay rate		—		1.19	%		1.19	%		—		1.19	%
Unrealized gain (loss)		—		131			61			—		192

Item 8. Financial Statements and Supplementary Data

     The report of PricewaterhouseCoopers LLP, independent certified public accountants, and the consolidated financial statements are included on pages 38 through 61 of the 2003 Annual Report and are incorporated herein by reference. “Selected Quarterly Information - Consolidated Quarterly Average Balances, Yields & Rates” and “Quarterly Consolidated Income Statements” are included on pages 34 through 36 of the 2003 Annual Report and are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     None.

Item 9A. Controls and Procedures

     The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports and other information filed with the Securities and Exchange Commission, or the “Commission,” under the Securities Exchange Act of 1934, or the “Exchange Act,” is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to the management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

     The Company carried out an evaluation, under the supervision and with the participation of management, including the Company’s Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective, in all material respects, to timely alert them to material information relating to the Company and its consolidated subsidiaries required to be included in the Company’s Exchange Act reports.

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     During the period covered by this report, there has not been any change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part III

Item 10. Directors and Executive Officers of the Registrant

     Information concerning the directors and executive officers of Seacoast is set forth under the headings “Proposal One — Election of Directors,” “Corporate Governance” and “Executive Officers” on pages 3 through 11 of the 2004 Proxy Statement, as well as under the heading “Section 16(a) Reporting” on page 24 of the 2004 Proxy Statement and is incorporated herein by reference.

Item 11. Executive Compensation

     Information regarding the compensation paid by Seacoast to its executive officers is set forth under the headings “Proposal One — Election of Directors - - Compensation of Executive Officers,” “Salary and Benefits Committee Report,” “Summary Compensation Table,” “Grants of Options/SARs in 2003,” “Aggregated Options/SAR Exercises in 2003 and 2003 Year-End Option/SAR Values,” “Long-Term Incentive Plans – Awards in 2003”, “Profit Sharing Plan,” “Executive Deferred Compensation Plan,” “Performance Graph,” and “Employment and Severance Agreements” on pages 11 through 13 and pages 16 through 21 of the 2004 Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information about the Common Stock that may be issued under all of the the Company’s existing compensation plans as of December 31, 2003.

23

Equity Compensation Plan Information

December 31, 2003

	(a) Number of		(b)Weighted
	securities to be		average exercise		(c) Number of
	issued upon		price of		securities
	exercise of		outstanding		remaining
	outstanding		options,		available for
	options, warrants		warrants and		future
Plan category	and rights		rights		issuance
Equity compensation plans approved by shareholders
1991 Plan (1)		34,000	$	5.30		164,000
1996 Plan (2)		546,000		8.31		37,000
2000 Plan (3)		216,000		17.08		959,000
Employee Stock Purchase Plan (4)		—		—		122,292
		796,000		10.56		1,282,292
Equity compensation plans not approved by shareholders		—				—
Non-Employee Directors Plan (5)		—		—		62,800
TOTAL		796,000				1,345,092

(1)	Seacoast Banking Corporation of Florida 1991 Stock Option & Stock Appreciation Rights Plan.
(2)	Seacoast Banking Corporation of Florida 1996 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, and may be granted as awards of restricted stock, performance shares, or other stock-based awards, including unrestricted stock.
(3)	Seacoast Banking Corporation of Florida 2000 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan and may be granted as awards of performance shares, and up to 330,000 shares may be granted as awards of restricted stock or unrestricted stock..
(4)	Seacoast Banking Corporation of Florida Employee Stock Purchase Plan, as amended.
(5)	Seacoast Banking Corporation of Florida 1998 Non-Employee Directors Compensation Plan. Shares reserved under this plan are available for grant to non-employee directors who elect to receive their board retainer and meeting fees in the form of common stock.
	The Seacoast Banking Corporation of Florida 1998 Non-Employee Directors Compensation Plan authorizes the Company to grant up to 82,500 shares of Common Stock to non-employee directors of the Company who elect to receive some or all of their quarterly board retainer and meeting fees in the form of Common Stock, rather than cash. Shares of Common Stock will automatically be granted to each non-employee director making such an election on the last business day of each fiscal quarter for which an election is in effect. The number of shares included in each grant will be determined by dividing the designated

24

percentage or dollar amount of the quarterly retainer and meeting fees to be received in Common Stock by the fair market value per share of Common Stock on the applicable grant date. If, on any grant date, the Company does not have enough shares of Common Stock to grant the full amount of shares contemplated by the plan, each award will be reduced pro rata. Fractional shares will not be granted, and any shortfall resulting from such proration will be paid in the form of cash. The plan will remain in effect until August 18, 2008, the tenth anniversary of its effective date, unless terminated earlier. The Board or the Compensation Committee may terminate or amend the plan at any time. As of December 31, 2003, 62,800 shares of Common Stock remained available for grant under the plan.

     Additional information regarding the ownership of Seacoast’s Common Stock is set forth under the headings “Proposal One – Election of Directors - General” on pages 4 through 8, “Proposal One – Election of Directors - Management Stock Ownership” on page 10, and “Principal Shareholders” on pages 22 and 23 of the 2004 Proxy Statement, and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

     Information regarding certain relationships and transactions between Seacoast and its officers, directors and significant shareholders is set forth under the heading “Proposal One – Election of Directors – Salary and Benefits Committee Interlocks and Insider Participation” and “Certain Transactions and Business Relationships” on page 21 of the 2004 Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

     Information concerning the Company’s principal accountant fees and services is set forth under the heading “Independent Auditors” on pages 23-24 of the 2004 Proxy Statement and is incorporated herein by reference.

Part IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

a)(1) List of all financial statements

The following consolidated financial statements and report of independent certified public accountants of Seacoast, included in the 2003 Annual Report, are incorporated by reference into Part II, Item 8 of this Annual Report on Form 10-K.

Report of Independent Certified Public Accountants
Consolidated Balance Sheets as of December 31, 2003 and 2002
Consolidated Statements of Income for the years ended
  December 31, 2003, 2002 and 2001
Consolidated Statements of Shareholders’ Equity for the
  years ended December 31, 2003, 2002 and 2001
Consolidated Statements of Cash Flows for the years ended
  December 31, 2003, 2002 and 2001
Notes to Consolidated Financial Statements

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a)(2) List of Financial Statement Schedules

All schedules normally required by Form 10-K are omitted, since either they are not applicable or the required information is shown in the financial statements or the notes thereto.

a)(3) Listing of Exhibits

The following Exhibits are filed as part of this report in Item 14 (c):

Exhibit 3.1 Amended and Restated Articles of Incorporation

Exhibit 3.2 Amended and Restated By-laws of the Corporation
Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 28, 2003.

Exhibit 4.1 Specimen Common Stock Certificate
Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 28, 2003.

Exhibit 10.1 Amended and Restated Retirement Savings Plan, with Amendments
Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 28, 2003.

Exhibit 10.2 Employee Stock Purchase Plan
Incorporated herein by reference from the Company’s Registration Statement on Form S-8 File No. 33-25627, dated November 18, 1988.

Exhibit 10.3 Amendment #1 to the Employee Stock Purchase Plan
Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 29, 1991.

Exhibit 10.4 Executive Employment Agreement
Dated March 22, 1991 between A. Douglas Gilbert and the Bank, incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 29, 1991.

Exhibit 10.5 Executive Employment Agreement
Dated January 18, 1994 between Dennis S. Hudson, III and the Bank, incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 28, 1995.

Exhibit 10.6 Executive Employment Agreement
Dated July 31, 1995 between C. William Curtis, Jr. and the Bank, incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 28, 1996.

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Exhibit 10.8 1991 Stock Option & Stock Appreciation Rights Plan
Incorporated herein by reference from the Company’s Registration Statements on Form S-8 File No. 33-61925, dated August 18, 1995, and File No. 33-46504 dated March 18, 1992.

Exhibit 10.9 1996 Long Term Incentive Plan
Incorporated herein by reference from the Company’s Registration Statement on Form S-8 File No. 333-91859, dated December 1, 1999.

Exhibit 10.10 Non-Employee Director Stock Compensation Plan
Incorporated herein by reference from the Company’s Registration Statement on Form S-8 File No. 333-70399 dated January 11, 1999.

Exhibit 10.11 2000 Long Term Incentive Plan
Incorporated herein by reference from the Company’s Registration Statement on Form S-8 File No. 333-49972, dated November 15, 2000.

Exhibit 10.12 Executive Deferred Compensation Plan
Dated October 17, 2000, but effective November 1, 2000.

Exhibit 10.13 Line of Credit Agreement
Incorporated herein by reference from the Company’s Annual Report on Form 10-K, dated March 28, 2003.

Exhibit 10.14 Change of Control Employment Agreement
Dated December 24, 2003 between Dennis S. Hudson, III and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated December 24, 2003.

Exhibit 10.15 Change of Control Employment Agreement
Dated December 24, 2003 between A. Douglas Gilbert and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated December 24, 2003.

Exhibit 10.16 Change of Control Employment Agreement
Dated December 24, 2003 between C. William Curtis, Jr. and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated December 24, 2003.

Exhibit 10.17 Change of Control Employment Agreement
Dated December 24, 2003 between William R. Hahl and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated December 24, 2003.

Exhibit 10.18 Change of Control Employment Agreement
Dated December 24, 2003 between Jean Strickland and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated January 7, 2004.

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Exhibit 10.19 Change of Control Employment Agreement
Dated December 24, 2003 between Thomas H. Wilkinson and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated January 7, 2004.

Exhibit 10.20 Change of Control Employment Agreement
Dated December 24, 2003 between Teresa Idzior and the Registrant, incorporated herein by reference from the Company’s Form 8-K, dated January 7, 2004.

Exhibit 13 2003 Annual Report
The following portions of the 2003 Annual Report are incorporated herein by reference:

Financial Highlights
Financial Review – Management’s Discussion and Analysis
Selected Quarterly Information – Quarterly Consolidated Income Statements
Selected Quarterly Information – Consolidated Quarterly
Average Balances, Yields & Rates
Financial Statements
Notes to Consolidated Financial Statements
Financial Statements – Report of Independent Certified Public Accountants

Exhibit 21 Subsidiaries of Registrant

Exhibit 23.1 Consent of Independent Certified Public Accountants

Exhibit 23.2 Notice of Inability to Obtain Consent From Arthur Andersen LLP

Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1* Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2* Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* The certifications attached as Exhibits 32.1 and 32.2 accompany this Annual Report on Form 10-K and are “furnished” to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

b) Reports on Form 8-K

28

The Company filed the following current reports on Form 8-K during the quarter ended December 31, 2003:

October 21, 3003	Announcement of Registrant’s third quarter 2003 earnings
October 21, 2003	Amendment to correct technical errors on Form 8-K announcing Registrant’s third quarter 2003 earnings
December 29, 2003	Announcement of and filing of Change of Control agreements entered into between the Registrant and certain officers

c) Exhibits
The response to this portion of Item 15 is submitted under a separate section of this report.

d) Financial Statement Schedules
None

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stuart, State of Florida, on the 10th day of March 2004.

SEACOAST BANKING CORPORATION OF FLORIDA         (Registrant)
By:	/s/ Dennis S. Hudson, III
	Dennis S. Hudson, III President and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Date
/s/ Dale M. Hudson Dale M. Hudson, Chairman of the Board and Director	March 10, 2004
/s/ Dennis S. Hudson, III Dennis S. Hudson, III, President, Chief Executive Officer and Director	March 10, 2004
/s/ William R. Hahl William R. Hahl, Executive Vice President and Chief Financial Officer	March 10, 2004
/s/ Stephen E. Bohner Stephen E. Bohner, Director	March 10, 2004
Jeffrey C. Bruner, Director
/s/ John H. Crane John H. Crane, Director	March 9, 2004
/s/ Evans Crary, Jr. Evans Crary, Jr., Director	March 9, 2004
/s/ T. Michael Crook T. Michael Crook, Director	March 10, 2004

30

/s/ Christopher E. Fogal Christopher E. Fogal, Director	March 10, 2004
/s/ Jeffrey S. Furst Jeffrey S. Furst, Director	March 10, 2004
/s/ A. Douglas Gilbert A. Douglas Gilbert, Director, Senior Executive Vice President, & Chief Operating & Credit Officer	March 10, 2004
/s/ Dennis S. Hudson, Jr. Dennis S. Hudson, Jr., Director	March 10, 2004
John R. Santarsiero, Jr., Director
/s/ Thomas H. Thurlow, Jr. Thomas H. Thurlow, Jr., Director	March 10, 2004

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EX-3.1

EXHIBIT 3.1

AMENDED AND RESTATED

ARTICLES OF INCORPORATION
OF
SEACOAST BANKING CORPORATION OF FLORIDA

ARTICLE I
NAME

     The name of the corporation (the “Corporation”) is: “Seacoast Banking Corporation of Florida”.

ARTICLE II
TERM OF EXISTENCE

     The Corporation shall have perpetual duration and existence.

ARTICLE III
OBJECTS AND POWERS

     The nature of the Corporation’s business, and its objects, purposes and powers are as follows:

     3.01      Holding Company Activities. To purchase or otherwise acquire, to own and to hold the stock of banks and other corporations, and to do every act and thing covered generally by the denominations “holding corporation”, “bank holding company”, and “financial holding company”, and especially to direct the operations of other entities through the ownership of stock or other interests therein.

     3.02      Investments, etc. To purchase, subscribe for, acquire, own, hold, sell, exchange, assign, transfer, mortgage, pledge, hypothecate or otherwise transfer or dispose of stock, scrip, warrants, rights, bonds, securities or evidences of indebtedness created by any other corporation or corporations organized under the laws of any state, or any bonds or evidences of indebtedness of the United States or any state, district, territory, dependency or county or subdivision or municipality thereof, and to issue and exchange therefor cash, capital stock, bonds, notes or other securities, evidences of indebtedness or obligations of the Corporation and while the owner thereof to exercise all rights, powers and privileges of ownership, including the right to vote on any shares of stock, voting trust certificates or other instruments so owned.

     3.03      Other Business. To transact any business, to engage in any lawful act or activity and to exercise all powers permitted to corporations by the Florida Business Corporation Act (the “FBCA”).

     The enumeration herein of the objects and purposes of the Corporation shall not be deemed to exclude or in any way limit by inference any powers, objects or purposes that the Corporation is empowered to exercise, whether expressly, by purpose or by any of the laws of the State of Florida or any reasonable construction of such laws.

ARTICLE IV
CAPITAL STOCK

     4.01      General. The total number of shares of all classes of capital stock (“Shares”) which the Corporation shall have the authority to issue is 26,000,000 consisting of the following classes:

(1)	22,000,000 Shares of common stock, $.10 par value per share (“Common Stock”); and
(2)	4,000,000 Shares of preferred stock, $.10 par value per share (“Preferred Stock”).

     4.02      Preferred Stock. Shares of Preferred Stock may be issued for any purpose and in any manner permitted by law, in one or more distinctly designated series, as a dividend or for such consideration as the Corporation’s Board of Directors may determine by resolution or resolutions from time to time adopted.

     The Board of Directors is expressly authorized to fix and determine, by resolution or resolutions from time to time adopted prior to the issuance of any Shares of a particular series of Preferred Stock, the designations, voting powers (if any), preferences, and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including, but without limiting the generality of the foregoing, the following:

     (1)      The distinctive designation and number of Shares of Preferred Stock that shall constitute a series, which number may from time to time be increased or decreased (but not below the number of Shares of such series then outstanding), by like action of the Board of Directors;

     (2)      The rate or rates and times at which dividends, if any, shall be paid on each series of Preferred Stock, whether such dividends shall be cumulative or non-cumulative, the extent of the preference, subordination or other relationship to dividends declared or paid, or any other amounts paid or distributed upon, or in respect of, any other class or series of Preferred Stock or other Shares;

     (3)      Redemption provisions, if any, including whether or not Shares of any series may be redeemed by the Corporation or by the holders of such series of Preferred Stock, or by either, and if redeemable, the redemption price or prices, redemption rate or rates, and such adjustments to such redemption price(s) or rate(s) as may be determined, the manner and time or times at which, and the terms and conditions upon which, Shares of such series may be redeemed;

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     (4)      Conversion, exchange, purchase or other privileges, if any, to acquire Shares or other securities of any class or series, whether at the option of the Corporation or of the holder, and if subject to conversion, exchange, purchase or similar privileges, the conversion, exchange or purchase prices or rates and such adjustments thereto as may be determined, the manner and time or times at which such privileges may be exercised, and the terms and conditions of such conversion, exchange, purchase or other privileges;

     (5)      The rights, including the amount or amounts, if any, of preferential or other payments or distributions to which holders of Shares of any series are entitled upon the dissolution, winding-up, voluntary or involuntary liquidation, distribution, or sale or lease of all or substantially all of the assets of the Corporation; and

     (6)      The terms of the sinking fund, retirement, redemption or purchase account, if any, to be provided for such series and the priority, if any, to which any funds or payments allocated therefor shall have over the payment of dividends, or over sinking fund, retirement, redemption, purchase account or other payments on, or distributions in respect of, other series of Preferred Stock or Shares of other classes.

     All Shares of the same series of Preferred Stock shall be identical in all respects, except there may be different dates from which dividends, if any, thereon may cumulate, if made cumulative.

     4.03      Dividends. Dividends upon all classes and series of Shares shall be payable only when, as and if declared by the Board of Directors from funds lawfully available therefor, which funds shall include, without limitation, the Corporation’s capital surplus. Dividends upon any class or series of Corporation Shares may be paid in cash, property, or Shares of any class or series or other securities or evidences of indebtedness of the Corporation or any other issuer, as may be determined by resolution or resolutions of the Board of Directors.

     4.04      Rights, Warrants, Options, etc. The Board of Directors is expressly authorized to create and issue, by resolutions adopted from time to time, rights, warrants or options entitling the holders thereof to purchase Shares of any kind, class or series, whether or not in connection with the issuance and sale of any Shares, or other securities or indebtedness. The Board of Directors also is authorized expressly to determine the terms, including, without limitation, the time or times within which and the price or prices at which Shares may be purchased upon the exercise of any such right or option. The Board of Directors’ judgment shall be conclusive as to the adequacy of the consideration received for any such rights or options.

     4.05      No Preemptive Rights. No holder of any Shares of any kind, class or series shall have, as a matter of right, any preemptive or preferential right to subscribe for, purchase or receive any Shares of any kind, class or series or any Corporation securities or obligations, whether now or thereafter authorized.

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ARTICLE V
REGISTERED AGENT

     The Corporation’s registered office and initial registered agent at that address shall be:

Dennis S. Hudson, III
815 Colorado Avenue
Stuart, Florida 34994

ARTICLE VI
BOARD OF DIRECTORS

     6.01      Number. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, each of whose members shall have the qualifications, if any, set forth in the Bylaws, and who need not be residents of the State of Florida. The number of directors of the Corporation (exclusive of directors to be elected by the holders of any one or more series of Preferred Stock voting separately as a class or classes) that shall constitute the Whole Board of Directors shall be between 3 and 14, with the exact number determined from time to time by resolution adopted by the affirmative vote of at least (i) two-thirds (66 2/3%) of the Whole Board of Directors and (ii) a majority of the Continuing Directors. In no event shall the Whole Board of Directors consist of less than 11 persons.

     6.02      Classification; Vacancies. The Board of Directors shall be divided into three classes, designated Classes I, II and III, as nearly equal in number as the then total number of directors constituting the Whole Board of Directors permits, with the term of office of one class expiring each year. At the annual meeting of shareholders when the Board of Directors is first classified, directors of Class I shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of Class II shall be elected to hold office for a term expiring at the second succeeding annual meeting and directors of Class III shall be elected to hold office for a term expiring at the third succeeding annual meeting. Any vacancies in the Board of Directors for any reason, and any newly created directorships resulting from any increase in the number of directors, may be filled only by the Board of Directors, acting by vote of (i) 66 2/3% of the directors then in office and (ii) a majority of the Continuing Directors, although less than a quorum, or if no directors remain by the affirmative vote of not less than (i) 66 2/3% of the Voting Shares and (ii) an Independent Majority of Shareholders, and any directors so chosen shall hold office until the next election of the class of the director they have replaced and until their successors have been elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the terms of the director or directors elected by such holders shall expire at the next succeeding annual meeting of shareholders and vacancies created with respect to any directorship of the directors so elected shall be filled in the manner specified by such series of

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Preferred Stock. Subject to the foregoing, at each annual meeting of shareholders, the successors to the class of directors whose term is then expiring shall be elected to hold office for a term expiring at the third succeeding annual meeting and until their successors have been elected and qualified.

     6.03      Nominations. In addition to the right of the Corporation’s Board of Directors to make nominations for the election of directors, nominations for the election of directors may be made by any shareholder entitled to vote generally in the election of directors if that shareholder complies with all of the provisions of this Section 6.03.

     (1)      Advance notice of such proposed nomination shall be received by the Secretary of the Corporation (a) with respect to an election of directors to be held at an annual meeting, not less than 60 days nor more than 90 days prior to the anniversary of the last annual meeting of Corporation shareholders (or, if the date of the annual meeting is changed by more that 20 days from such anniversary date, within 10 days after the date that the Corporation mails or otherwise gives notice of the date of such meeting) and (b) with respect to an election to be held at a special meeting called for that purpose, not later than the close of the tenth day following the date on which notice of the meeting was first mailed to shareholders.

     (2)      Each notice under Section 6.03 (1) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee during the past five years, (iii) the number of Shares of the Corporation which are Beneficially Owned by each such nominee; (iv) whether such person or persons are or have ever been at any time directors, officers or beneficial owners of 5% or more of any class of capital stock, partnership interests or other equity interest of any Person and if so a description thereof; any directorships or similar position, and/or Beneficial Ownership of 5% or more of any class of capital stock, partnership interests or other equity interest held by such person or persons in any Person with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940, as amended; (v) whether, in the last five years, such person or persons are or have been convicted in a criminal proceeding or have been subject to a judgment, order, finding or decree of any federal, state or other governmental, regulatory or self-regulatory entity, concerning any violation of federal, state or other law, or any proceeding in bankruptcy, in order to evaluate the ability or integrity of the nominee; (vi) the name and address of the nominator and the number of Shares of the Corporation held by the nominator, and a written confirmation that the nominator is and will remain a shareholder of the Corporation through the meeting; (vii) represent that the nominator intends to appear in person or by proxy at the meeting to make such nomination, (viii) full disclosure of the existence and terms of all agreements and understandings, between the nominator or any other person and the nominee with respect to the nominee’s nomination, or possible election and service to the Corporation’s Board of Directors, or a confirmation that there are no such arrangements or understandings; (ix) the written consent of each such person to serve as a director if elected; and (x) any other information reasonably requested by the Corporation.

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     (3)      The nomination made by a shareholder may only be made in a meeting of the shareholders of the Corporation called for the election of directors at which such shareholder is present in person or by proxy, and can only be made by a shareholder who has therefore complied with the notice provisions of Sections 6.03 (1) and (2). The foregoing provisions are not intended to and shall not limit the responsibilities of any nominator or nominees, or their respective Affiliates or Associates responsibilities under applicable law, including, without limitation, federal and state securities laws.

     (4)      The chairman of the shareholders’ meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedures, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. The Corporation’s Nominating Committee shall evaluate any proper nomination and may, in its discretion, make a recommendation thereon to the shareholders.

     6.04      Removal. Directors may be removed only for cause upon the affirmative vote of (a) 66 2/3 % of all Voting Shares and (b) an Independent Majority of Shareholders at a meeting duly called and held for that purpose upon not less than 30 days’ prior written notice.

ARTICLE VII

PROVISIONS RELATING TO BUSINESS COMBINATIONS

     7.01      Definitions. The following defined terms are used in other Articles, and shall have the meanings specified below.

     7.01.1      An “Affiliate” of, or a Person “affiliated with”, a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

     7.01.2      The terms “Associate” or “associated with”, as used to indicate a relationship with any Person, mean:

     (1)      Any corporation, organization or entity (other than the Corporation) of which such Person is an officer or partner, or is directly or indirectly the beneficial owner of 10% or more of any class of equity securities;

     (2)      Any trust or other estate in which such Person has a 10% or greater beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity;

     (3)      Any relative or spouse of such Person, or any relative of such spouse who has the same home as such Person; or

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     (4)      Any investment company registered under the Investment Company Act of 1940 for which such Person or any Affiliate or Associate of such Person serves as investment adviser.

     7.01.3      A person shall be considered the “Beneficial Owner” of and shall be deemed to “beneficially own” any shares of stock (whether or not owned of record):

     (1)      With respect to which such Person or any Affiliate or Associate of such Person directly or indirectly has or shares (i) voting power, including the power to vote or to direct the voting of such shares of stock and/or (ii) investment power, including the power to dispose of or to direct the disposition of such shares of stock;

     (2)      Where such Person or any Affiliate or Associate of such Person has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange or purchase rights, warrants, options, or otherwise, and/or (ii) the right to vote pursuant to any agreement, arrangement or understanding (whether such right is exercisable immediately or only after the passage of time); or

     (3)      Which are Beneficially Owned within the meaning of subsections (1) or (2) of this Section 7.01.3 by any other Person with which such first-mentioned Person or any of its Affiliates or Associates has any agreement, arrangement or understanding, written or verbal, formal or informal with respect to acquiring, holding, voting or disposing of any shares of stock of the Corporation or any Subsidiary of the Corporation or acquiring, holding or disposing of all or substantially all, or any Substantial Part, of the assets or businesses of the Corporation or a Subsidiary of the Corporation.

     For the purpose only of determining whether a Person is the Beneficial Owner of a percentage specified in this Article VII of the outstanding Voting Shares, such shares shall be deemed to include any interest in Voting Shares which may be issuable, transferred or voted or disposed of pursuant to any agreement, trust, arrangement or understanding or upon the exercise of conversion rights, exchange or purchase rights, warrants, options or otherwise and which Voting Shares are deemed to be beneficially owned by such Person pursuant to the foregoing provisions of this Section 7.01.3.

     7.01.4       A “Business Combination” means:

     (1)      The sale, exchange, lease, transfer or other disposition to or with any Person or any Affiliate or Associate of any such Person by the Corporation or any of its Subsidiaries (in a single transaction or in a series of related transactions) of all or substantially all, or any Substantial Part, of its or their assets or businesses (including, without limitation, any securities issued by a Subsidiary and assets of a Subsidiary);

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     (2)      Any merger, consolidation or purchase and/or assumption (“P&A”) of assets and/or liabilities of the Corporation or any Subsidiary thereof into or with another Person or any Affiliate or Associate of such person or into or with another Person where, after such merger, consolidation or P&A, such Person alone or together with its Affiliates or Associates would be a Related Person or an Affiliate or an Associate of a Related Person, in each case irrespective of which Person is the surviving entity in such merger or consolidation;

     (3)      Any reclassification of securities (including, without limitation, a reverse stock split), recapitalization or other transaction (other than a redemption in accordance with the terms of the security redeemed) which has the effect, directly or indirectly, of increasing other than pro rata with other Corporation shareholders, the proportionate amount of Voting Shares of the Corporation or any Subsidiary thereof which are Beneficially Owned by a Related Person, or the adoption of any plan or proposal of partial or complete liquidation, dissolution, spinoff, splitoff or splitup of the Corporation or any Subsidiary thereof; and

     (4)      The acquisition after the date of adoption of these Amended and Restated Articles of Incorporation by a Person of Voting Shares or securities convertible into or exchangeable for 5% or more of the Voting Shares or any voting securities or securities convertible into 5% or more of the voting securities of any Subsidiary of the Corporation, or the acquisition upon the issuance thereof of Beneficial Ownership by a Related Person of any rights, warrants or options to acquire any of the foregoing or any combination of the foregoing Voting Shares or voting securities of a Subsidiary; provided, however, this subsection (4) shall not apply to the acquisition of any such Voting Shares, securities, options, rights or warrants issued pursuant to any stock option plan or any pension, profit sharing, benefit or stock purchase plans maintained by the Corporation or any of its Subsidiaries.

     As used in this definition, a “series of related transactions” shall be deemed to include a series of transactions with the same Person considered together with all Affiliates and Associates of such Person.

     The foregoing provision of this Section 7.01.4 notwithstanding, a Business Combination shall not include any merger, consolidation, P&A or other transaction described in the definition of Business Combination with the Corporation and/or any of its Subsidiaries, as a result of which a Person who is not a Related Person prior to such transaction does not become a Related Person.

     7.01.5      A “Continuing Director” means a member of the Board of Directors who either (i) was first elected as a director of the Corporation prior to February 28, 2003 or (ii) prior to any Person becoming a Related Person and was designated as a Continuing Director by a majority vote of the Continuing Directors.

     7.01.6      “Independent Majority of Shareholders” shall mean the holders of a majority of the outstanding Voting Shares that are not Beneficially Owned or controlled, directly or indirectly, by a Related Person.

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     7.01.7      The term “Person” shall mean any individual, partnership, trust, firm, joint venture, corporation, group or other entity (other than the Corporation, any Subsidiary of the Corporation or a trustee holding stock for the benefit of employees of the Corporation or its Subsidiaries, or any one of them, pursuant to one or more employee benefit plans or arrangements). When two or more Persons act as a partnership, limited partnership, syndicate, association or other group for the purpose of acquiring, holding, or disposing of shares of stock, such partnership, syndicate, association or group shall be deemed a “Person”.

     7.01.8      “Related Person” means any Person which is the Beneficial Owner as of the date of determination by a majority of the Whole Board of Directors or immediately prior to the consummation of a Business Combination, or both, of 5% or more of the Voting Shares, or any Person who is an Affiliate of the Corporation and at any time within five years preceding the determination of such status by the Whole Board of Directors was the Beneficial Owner of 5% or more of the Corporation’s then outstanding Voting Shares; provided, however, that “Related Person” shall not include (i) any Person who is the Beneficial Owner of more than 5% of the Corporation’s Voting Shares on February 28, 2003, (ii) any plan or trust established for the benefit of the Corporation’s employees generally or (iii) any Subsidiary of the Corporation that holds Voting Shares in a fiduciary capacity, whether or not it has the authority to vote or dispose of such securities.

     7.01.9      The term “Substantial Part” as used with reference to the assets of the Corporation, of any Subsidiary or of any Related Person means assets having a value of more than 10% of the total consolidated assets of the Corporation and its Subsidiaries as of the end of the Corporation’s most recent quarter ending prior to the time the determination is being made.

     7.01.10      “Subsidiary” shall mean any corporation or other entity of which the Person in question owns not less than 50% of any class of equity securities, directly or indirectly, and “Significant Subsidiary” shall mean a Subsidiary that also meets the tests for a “significant subsidiary” under Securities and Exchange Commission Regulation S-X, Rule 1-02(w).

     7.01.11      “Voting Shares” means all Shares of the Corporation entitled to vote generally in the election of Corporation directors.

     7.01.12      “Whole Board of Directors” means the total number of directors that the Corporation would have if there were no vacancies.

     7.01.13      Certain Determinations With Respect to Article VII. A majority of the Whole Board of Directors shall have the power to determine for the purposes of this Article VII, on the basis of information known to them: (i) the number of Voting Shares of which any Person is the Beneficial Owner, (ii) whether a Person is an Affiliate or Associate of another, (iii) whether a Person has an agreement, arrangement or understanding with another as to the matters referred to in the definition of “Beneficial Owner” as hereinabove defined, (iv) whether the assets subject to any Business Combination constitute a “Substantial Part” as hereinabove defined, (v) whether two or more transactions constitute a “series of related transactions” as hereinabove defined, and (vi) such other matters with respect to which a determination is required under this Article VII.

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     7.01.14      Fiduciary Obligations. Nothing contained in this Article VII shall be construed to relieve any Related Person from any fiduciary or other obligation imposed by law.

     7.02      Approval of Business Combinations.

     7.02.1      Maximum Votes Required. Whether or not a vote of the shareholders is otherwise required in connection with the transaction, neither the Corporation nor any of its Subsidiaries shall complete any Business Combination without the prior affirmative vote at a meeting of the Corporation’s shareholders as to all shares owned:

     (1)      By the holders of not less than a two-thirds (66 2/3%) of the Corporation’s outstanding Voting Shares, voting separately as classes, and

     (2)      By an Independent Majority of Shareholders.

     The affirmative vote required by this Section is in addition to the vote of the holders of any class or series of Corporation Shares otherwise required by law, these Articles of Incorporation, including, without limitation, any resolution which has been adopted by the Board of Directors providing for the issuance of a class or series of Shares. Such favorable votes shall be in addition to any shareholder vote which would be required without reference to this Section 6.02.1 and shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified by law or elsewhere in this Certificate of Incorporation, the Corporation’s Bylaws or otherwise.

     7.02.2      Minimum Vote Required. The provisions of Section 7.02.1 shall not apply to a particular Business Combination, and such Business Combination shall require only the affirmative vote of a majority of the Corporation’s outstanding Voting Shares, if such Business Combination is: (i) approved and recommended to the shareholders by the affirmative vote of two-thirds (66 2/3%) of the Whole Board of Directors of the Corporation, and (ii) a majority of the Continuing Directors.

     7.03      Evaluation of Business Combinations, etc. In connection with the exercise of its judgment in determining what is in the best interest of the Corporation and its shareholders when evaluating an actual or proposed Business Combination, a tender or exchange offer, a solicitation of options or offers to purchase or sell Corporation Shares by another Person, or a solicitation of proxies to vote Corporation Shares by another Person, the Corporation’s Board of Directors, in addition to considering the adequacy and form of the consideration to be paid in connection with any such transaction, shall consider all of the following factors and any other factors which it deems relevant: (i) the social and economic effects of the transaction or proposal on the Corporation and its Subsidiaries, its and their employees, depositors, loan and other customers, creditors and the communities in which the Corporation and its Subsidiaries operate or are located; (ii) the business and financial condition, and earnings prospects of the acquiring Person or Persons, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the acquisition, and other likely financial

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obligations of the acquiring Person or Persons, and the possible effect of such conditions upon the Corporation and its Subsidiaries and the other elements of the communities in which the Corporation and its Subsidiaries operate or are located; (iii) the competence, experience, and integrity of the Person and their management proposing or making such actions; (iv) the prospects for a successful conclusion of the Business Combination; and (v) the Corporation’s prospects as an independent entity. This Section 7.03 shall not be deemed to provide any constituency the right to be considered by the Board of Directors in connection with any transaction or matter.

ARTICLE VIII
SPECIAL PROVISIONS

     In furtherance and not in limitation of the powers conferred by law, the following provisions for regulation of the Corporation, its directors and shareholders are hereby established:

     8.01      Bylaws. The Corporation’s Board of Directors is authorized and empowered, upon the affirmative vote of two-thirds (66 2/3%) of the Whole Board of Directors and a majority of the Continuing Directors, to amend, alter, change or repeal any and all of the Corporation’s Bylaws and to adopt new Bylaws, including, without limitation, establishing the exact number of directors to be fixed by resolution adopted by the Board of Directors from time to time consistent with Section 6.01 of these Articles of Incorporation. The shareholders may also amend the Bylaws by the affirmative vote of 66 2/3% of all Voting Shares entitled to vote on such amendment and by the affirmative vote of an Independent Majority of Shareholders.

     8.02      Shareholder Action by Consent. No action may be taken by written consent except as may be provided in the designation of the preferences, limitations and relative rights of any series of the Corporation’s Preferred Stock. Any action required or permitted to be taken by the holders of Corporation Common Stock must be effected at a duly called annual or special meeting of such holders, and may not be effected by any consent in writing by such holders.

     8.03      Shareholder Requests for Special Meetings. The Corporation will hold a special meeting of shareholders on a proposed issue or issues at the request of shareholders only upon the receipt from the holders of half (50%) of all the votes entitled to be cast on the proposed issue or issues of signed, dated written demands for the meeting describing the purpose for which it is to be held.

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ARTICLE IX
SHAREHOLDER PROPOSALS

     9.01      Proposals. In addition to the right of the Corporation’s Board of Directors to submit proposals for a shareholder vote, proposals for a shareholder vote may be made in connection with any annual meeting of Corporation shareholders by any holder of voting shares (“Proponent”) entitled to vote generally in the election of directors if that shareholder complies with all of the provisions of this Section 9.01.

     (1)      Advance notice of such proposal shall be received by the Secretary of the Corporation
(a) with respect to an annual meeting, not less than 60 days nor more than 90 days prior to the anniversary of the last annual meeting of Corporation shareholders (or, if the date of the annual meeting is changed by more that 20 days from such anniversary date, within 10 days after the date that the Corporation mails or otherwise gives notice of the date of such meeting) and (b) with respect to a special meeting, not later than the close of the tenth day following the date on which notice of the meeting was first mailed to shareholders.

     (2)      Each notice under Section 9.01(1) shall set forth (i) the names and business addresses of the Proponent and all persons acting in concert with the Proponent, (ii) the name and address of the Proponent and persons identified in clause (i), as they appear on the Corporation’s books (if they so appear); (iii) the class and number of Voting Shares of the Corporation that are beneficially owned by the Proponent and the persons identified in clause (i); (iv) a description of the proposal containing all material information relating thereto; and (v) such other information as the Board of Directors reasonably determines is necessary or appropriate to enable the Board of Directors and shareholders of the Corporation to consider the proposal.

     (3)      The proposal made by a shareholder may only be made in a meeting of the shareholders of the Corporation at which such shareholder is present in person or by proxy, and can only be made by a shareholder who has therefore complied with the notice provisions of Sections 9.01(1) and (2), and is subject further to compliance with all applicable laws, including, without limitation, federal and state securities laws.

     (4)      The Chairman of the shareholders’ meeting may, if the facts warrant, determine and declare to the meeting that a proposal was not made in accordance with the foregoing procedures, and if he should so determine, he shall so declare to the meeting and the defective proposal shall be disregarded.

ARTICLE X
AMENDMENT OF ARTICLES OF INCORPORATION

     The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by statute or these Articles, and all rights conferred upon shareholders herein are granted subject to this reservation. These Articles of Incorporation may be amended as provided by law; provided, however, that the affirmative vote of the holders of two-thirds (66 2/3%) of all of the Voting Shares outstanding and entitled to vote, voting as classes, if applicable, and an Independent Majority of Shareholders shall be required to approve any change of Articles VI, VII, IX and X of these Articles of Incorporation.

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EX-13

FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)		2003		2002			2001				2000				1999
FOR THE YEAR
Net interest income	$	45,775		$	47,422			$	45,493			$	42,095			$	43,089
Provision for loan losses		0			0				0				600				660
Noninterest income:
Securities gains (losses)		(1,172	)		457				915				(12	)			309
Other		19,287			16,874				15,108				13,150				12,148
Noninterest expenses		42,463			39,790				38,060				34,877				35,983
Income before income taxes		21,427			24,963				23,456				19,756				18,903
Provision for income taxes		7,411			9,677				9,326				7,668				7,119
Net income		14,016			15,286				14,130				12,088				11,784
Core earnings 1		22,781			24,461				22,624				20,459				19,439
Per Share Data
Net income:
Diluted		0.89			0.97				0.90				0.76				0.73
Basic		0.91			1.00				0.91				0.76				0.74
Cash dividends declared		0.46			0.37				0.35				0.32				0.30
Book value		6.71			6.59				6.09				5.42				4.84
Dividends to net income		50.60	%		37.30	%			37.60	%			41.60	%			39.80	%
AT YEAR END
Assets	$	1,353,823		$	1,281,297			$	1,225,964			$	1,151,373			$	1,081,032
Securities		565,089			498,459				306,352				204,664				213,654
Net loans		702,632			681,335				777,993				837,328				771,294
Deposits		1,129,642			1,030,540				1,015,154				957,089				905,960
Shareholders’ equity		104,084			100,747				93,519				84,263				77,111
Performance ratios:
Return on average assets		1.07	%		1.26	%			1.22	%			1.09	%			1.11	%
Return on average equity		13.73			15.75				15.62				14.09				14.64
Net interest margin2		3.69			4.13				4.12				4.03				4.34
Average equity to average assets		7.82			7.99				7.78				7.76				7.57

1.	Income before taxes excluding the provision for loan losses, securities gains (losses) and expenses associated with foreclosed and repossessed asset management and dispositions.
2.	On a fully taxable equivalent basis

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Financial Section

Contents

Management’s Discussion & Analysis	11
Financial Tables	24
Management’s Statement of Responsibility	37
Report of Independent Certified Public Accountants	38
Audited Financial Statements	39

Management’s Discussion & Analysis

Overview and Outlook

Seacoast Banking Corporation of Florida is a one-bank holding company located on Florida’s southeast coast whose southern market is Palm Beach County and northern market is Indian River County. The Company has 28 full service branches, three of which were opened within the last 12 months in Palm Beach County. The Company plans to open three more branches in Palm Beach County over the next two years. The markets in which the Company operates have population growth rates over the past 10 years of approximately 25 percent and estimated growth rates of over 20 percent over the next 10 years.

    Two years ago the Company began several initiatives to improve its net interest margin and the percent of revenues from fees over the long term.

    The Company’s residential mortgage production was converted from a portfolio funded process to a fee based business with the objective of reducing the residential portfolio from 50 percent of total loans to 30 percent over time. Commercial/ commercial real estate and consumer lending capabilities were improved, including market expansion into Palm Beach County, to replace the reduced residential portfolio outstandings.

    The Company refers to its brand of banking as the third alternative to banking: all of the sophisticated products and services of its largest competitors delivered with the high touch quality customer service and convenience of a small community bank. While this strategy is more costly from an overhead perspective, it provides high value customer relationships and a much lower overall cost of funds when compared to peers. The Company’s cost of interest bearing deposits has historically ranked in the lowest quartile compared to its peers.

    The Company’s lending policies, credit monitoring and underwriting have historically produced, over the long term, low net charge-offs and nonperforming loans and minimal past dues. The Company’s credit culture emphasizes discipline to the fundamentals of quality lending regardless of the economic cycle or competitive pressures to do otherwise. The Company’s commercial and commercial real estate loans are all originated in its markets by experienced professional loan officers who retain credit monitoring and collection responsibilities until the loan is repaid.

    The historic low interest rate environment over the last two years produced negative loan growth until the third quarter of 2003 as a result of high loan refinance activity and the Company’s strategy to convert its residential loan production to a fee-based business. Beginning in the third quarter 2003, the Company began selectively adding residential loans, primarily with adjustable rates, to its loan portfolio. This, coupled with added consumer, commercial and commercial real estate production during 2003, increased the loan portfolio by 2.0 percent in the third quarter, 6.8 percent in the fourth quarter, and 3.0 percent for the entire year in 2003. Continued loan growth is expected given the Company’s continued consumer, commercial and commercial real estate production and its expansion in Palm Beach County.

    In 2003 the Company originated $261 million in residential loans, up from $194 million in 2002. Due to better market penetration and coverage and the growth in new housing starts, the Company expects to originate over $200 million a year in residential loans going forward. The added lending capabilities resulted in the largest commercial and commercial real estate production

11

Management’s Discussion & Analysis

in the Company’s history in 2003. A total of $179 million was originated, compared to $83 million in 2002.

    The Company benefited in 2003 from an increase in low cost and no cost deposits in proportion to other higher cost products. This outcome results from the Company’s continued emphasis on its SuperCommunity brand of banking with high quality customer service and convenient branch locations. The Company believes it is the most convenient bank in its market with more locations than any competitor in the counties of Martin, St. Lucie and Indian River, which are located on Florida’s southeast coast.

    Over the past year, noninterest bearing demand deposits increased 26.3 percent and low cost NOW and savings deposits increased 11.5 percent. The average cost of interest bearing deposits was 1.51 percent in 2003, forty basis points lower than its peers. The Company is executing the same value building customer relationship strategy for retail deposits in northern Palm Beach County. At December 31, 2003, a total of $36 million in deposits were in Palm Beach County with an average cost of 1.55 percent for interest bearing deposits.

    In addition to increased fee income from mortgage banking activities, the Company derives fees from service charges on deposit accounts, investment management, trust and brokerage services, as well as from originating and selling large yacht loans. The Company believes that it can generate approximately 30 percent of total revenues from all fee businesses in the coming year. In 2003, the Company collected 29.6 percent of total revenues from its fee-based business activities.

Results of Operation

Net Interest Income Net interest income (on a fully taxable equivalent basis) for 2003 totaled $45,920,000, $1,683,000 or 3.5 percent less than for 2002. Net interest margin on a tax equivalent basis declined 44 basis points to 3.69 percent for 2003 from 2002’s result. However, fourth quarter 2003’s net interest margin improved 38 points to 3.82 percent from third quarter after declining 19 basis points to 3.44 percent in the third quarter of 2003 from second quarter 2003, declining 26 basis points to 3.63 percent in the second quarter of 2003 from first quarter 2003, and declining 13 basis points to 3.89 percent in the first quarter of 2003 from fourth quarter 2002.

    During the first quarter of 2003 and into the second quarter of 2003, the yield curve flattened and resulted in accelerated principal repayments of loans and investment securities collateralized by residential properties. While the yield curve steepened slightly during the third quarter of 2003, prepayments remained significant. As a result, these cash flows (reinvested at lower rates) resulted in margin compression during the first three quarters of 2003. Only during the fourth quarter of 2003 did prepayments decline. Loan payments totaled $44 million for the fourth quarter of 2003, versus $53 million for the third quarter of 2003 and $66 million and $64 million in the second and first quarter of 2003, respectively. Activity in the fourth quarter of 2003 for securities was more limited as well, with maturities of securities of $49.8 million and purchases totaling $46.1 million. Activity in the Company’s securities portfolio was significant during the first nine months 2003, with maturities of securities of $92.3 million in the third quarter of 2003 versus $110.6 million in the second quarter of 2003 and $116.4 million in the first quarter of 2003, and purchases totaling $181.6 million in the third quarter of 2003 versus $253.8 million in the second quarter of 2003 and $184.7 million in the first quarter of 2003.

    Over most of 2003, higher principal repayments of loans and investments combined with deposit growth were invested in earning assets at lower rates. The yield on earning assets for 2003 declined 111 basis points to 5.02 percent from 6.13 percent for 2002. Decreases in the yield on loans of 64 basis points to 6.78 percent, the yield on securities of 100 basis points to 2.92 percent, and the yield on federal funds sold of 54 basis points to 1.10 percent were recorded during 2003. Average earning assets for 2003 increased $89.9 million or 7.8 percent compared to 2002. While total loan balances increased year over year, average loan balances declined $70.6 million to $678.3 million, average federal funds sold decreased $25.8 million to $6.3 million, and average investment securities increased $186.4 million to $558.2 million. The decline in loans was principally in residential real estate loans, reflecting the low interest rate environment that has provided customers the opportunity to refinance. While residential loan production was exceptional, totaling $261 million for 2003, the majority of residential mortgage loans were sold servicing released to manage interest rate risk and to generate fee income.

    The cost of interest-bearing liabilities in 2003 decreased 81 basis points to 1.65 percent from 2002, with rates for NOW, savings, money market accounts, and certificates of deposit (CDs) decreasing 40, 41, 43, and 123 basis points, respectively. The average aggregated balance for NOW, savings and money market balances increased $40.9 million to $502.7 million from 2002 and average noninterest bearing deposits increased $27.8 million (or 15.9 percent) to $201.9 million, while

12

2003 SEACOAST BANKING CORPORATION OF FLORIDA

average certificates of deposit declined $13.4 million to $368.0 million. Growth in low-cost/no cost funding sources reflects the Company’s longstanding strategy of building core customer relationships and tailoring its products and services to satisfy customer needs. During the first quarter of 2003, a $25 million adjustable rate borrowing tied to LIBOR with a three-year term (maturing on January 30, 2006) was acquired through the Federal Home Loan Bank (FHLB), effecting an increase in average other borrowings of $20.9 million to $60.9 million during 2003 compared to 2002, but reducing the overall cost of other borrowings from 6.42 percent for 2002 to 4.48 percent for 2003. Average short term borrowings (principally sweep repurchase agreements with customers of the Company’s subsidiary bank) also increased, by $10.0 million to $65.0 million during 2003, versus 2002.

    Year over year the mix of earning assets and interest bearing liabilities has changed. Loans (the highest yielding component of earning assets) as a percentage of average earning assets totaled 54.6 percent in 2003 compared to 65.0 percent a year ago, while securities increased from 32.2 percent to 44.9 percent and federal funds sold decreased from 2.8 percent to 0.5 percent. While total loans did not increase as a percentage of earning assets, the Company successfully changed the mix of loans, with commercial volumes increasing as a percentage of total loans and lower yielding long term residential loan balances declining (see “Loan Portfolio” and Table 9 — Loans Outstanding). Average CDs (a higher cost component of interest-bearing liabilities) as a percentage of interest-bearing liabilities decreased to 36.9 percent, compared to 40.7 percent in 2002, reflecting diminished funding requirements. Approximately $210 million in CDs matured during 2003. An additional $238 million in CDs will mature in 2004, providing further opportunity for these volumes to re-price to lower rates (assuming the Federal Reserve maintains short-term interest rates at existing levels). Lower cost interest bearing deposits (NOW, savings and money market balances) increased to 50.4 percent of interest bearing liabilities, versus 49.2 percent a year ago, favorably affecting deposit mix. Borrowings (including federal funds purchased, sweep repurchase agreements with customers of the Company’s subsidiary, and other borrowings) increased to 12.6 percent of interest bearing liabilities in 2003 from 10.1 percent a year ago, reflecting an increase in average balances maintained by customers utilizing sweep arrangements and the new FHLB borrowing.

    During 2003, the Company utilized derivatives in an effort to minimize net interest margin compression. In the latter part of 2002 and into the first quarter of 2003, the Company’s interest rate risk position shifted to a more asset sensitive profile. To manage this, on January 3, 2003 the Company swapped fixed rate payments on CDs with varying maturities beginning in October 2005 and ending October 2007 with a notional amount of $54 million to floating (three month LIBOR). The swap with terms identical to the CDs was 100 percent effective and reduced interest expense on CDs by $867,000 during 2003.

    Net interest income (on a fully taxable equivalent basis) for 2002 totaled $47,603,000, $1,890,000 or 4.1 percent higher than for 2001. For 2002, net interest margin increased one basis point to 4.13 percent from 4.12 percent for 2001. Net interest margin fluctuated during 2002, increasing from 4.05 percent for the first quarter to 4.23 percent for the second quarter, and then tapering off to 4.15 percent for the third quarter and 4.02 percent for the fourth quarter. The yield curve flattened 75-100 basis points in the second half of 2002, lowering long-term mortgage yields. This resulted in accelerated principal repayments of residential loans and a decline in loans of $82.2 million. These cash flows were reinvested at lower rates and resulted in margin compression.

    During 2001 the Federal Reserve was aggressive in reducing short-term interest rates. Reductions totaling 400 basis points in 2001 were imposed (125 basis points occurring in the fourth quarter of 2001). During 2002, an additional 50 basis point reduction occurred in November. The average cost of interest-bearing liabilities for all of 2002 decreased 142 basis points to 2.46 percent from 2001’s results, with rates for CDs and short-term borrowings (principally composed of low cost sweep repurchase agreements and federal funds purchased) decreasing the most. The average balance for time deposits decreased, $38.3 million to $381.5 million, while short-term borrowings increased $3.4 million to $55.0 million. The average balance for NOW, savings and money market balances (aggregated) increased $61.4 million or 15.4 percent from 2001, and totaled $461.7 million for the year. Average noninterest bearing deposits increased $19.2 million or 12.4 percent to $174.2 million. Lower interest rates, an uncertain economic environment, and turmoil in financial markets aided growth in low-cost/no cost funding sources in 2002 as customers sought the stability and safety of bank products.

    The mix of earning assets and interest bearing liabilities changed in 2002 from 2001. Average loans (the highest yielding component of earning assets) as a percentage of average earning assets totaled 65.0 percent

13

Management’s Discussion & Analysis

in 2002 compared to 75.0 percent in 2001, while average securities increased from 22.2 percent to 32.2 percent and average federal funds sold remained the same at 2.8 percent. Average CDs (a higher cost component of interest-bearing liabilities) as a percentage of interest bearing liabilities decreased to 40.7 percent, compared to 46.0 percent in 2001, reflecting diminished funding requirements. Lower cost interest bearing deposits (NOW, savings and money market balances) increased to 49.2 percent of interest bearing liabilities, versus 43.9 percent for 2001, favorably affecting deposit mix.

Noninterest Income

    Noninterest income, excluding gains and losses from securities sales, totaled $19,287,000 for 2003, $2,413,000 or 14.3 percent higher than 2002, compared to an increase of $1,766,000 or 11.7 percent in 2002 over 2001. Noninterest income was favorably impacted by growth in fee-based businesses. Noninterest income accounted for 29.6 percent of net revenue in 2003 compared to 26.2 percent a year ago and 24.9 percent in 2001.

    Financial market turmoil, which began in late 2000, affected investment management revenues with consumers avoiding the riskier equities markets for more conservative deposit products. Revenues from the Company’s financial services businesses rebounded somewhat in 2002, but for 2003 brokerage commissions and fees decreased $182,000 or 8.9 percent to $1,863,000 year over year. Trust income was lower as well, declining $134,000 or 6.2 percent to $2,043,000 for 2003 compared to 2002. The Company believes it can be successful and expand its customer relationships through sales of investment management and brokerage products, including insurance. General improvements in the national economy and continued improvement in equity markets should positively impact revenues from investment management services.

    The Company is among the leaders in the production of residential mortgage loans in its market. In 2003, residential loan production totaled $261 million (compared to $194 million in 2002) and resulted in mortgage banking fees increasing $1,059,000 or 31.5 percent to $4,423,000 from a year ago. Mortgage banking revenues are partially dependent upon favorable interest rates, as well as, good overall economic conditions. Both have been favorable over the past two years. In addition, in August 2002 the Company opened a loan production office in Northern Palm Beach County and added three loan originators. Two additional branch locations were opened in Palm Beach in January 2003; two more offices will open in 2004 and one more in 2005. A loan production office is planned to be opened in Brevard County in 2004. The future for production of residential mortgages looks favorable as the housing market on the Treasure Coast is predicted to strengthen in 2004. Offsetting this potential for growth however, recent increases in interest rates may begin to negatively impact revenue due to a decline in overall mortgage activity in the Company’s markets and a shifting of production into portfolio based mortgage products. Residential loans are processed by commissioned originators, as well as the Company’s branch personnel.

    In 2002, residential loan production totaled $194 million and resulted in mortgage banking revenue of $3,364,000, an increase of $908,000 or 37.0 percent compared to a year earlier, as a result of converting residential loan production in 2001 to primarily a fee business.

    Greater usage of check cards over the past three years by core deposit customers and an increased cardholder base increased interchange income. However, VISA and MasterCard agreed in principle to a reduction in check card interchange rates effective August 1, 2003, which did result in lower fees and income. The Company’s revenues were reduced by approximately $20,000 per month as a result. Other deposit based electronic funds transfer income, which increased $65,000 or 17.3 percent to $441,000 in 2003 and 20.5 percent in 2002, were not impacted. Service charges on deposits totaling $4,907,000 were $198,000 or 3.9 percent lower year over year. Increased service charge fees collected from a growing commercial customer deposit base were more than offset by lower overdraft fees.

    Marine finance fees from the sale of marine loans increased $1,753,000 or 124.5 percent to $3,161,000 for 2003 versus a year ago. The Company’s marine finance division (Seacoast Marine Finance) produced $184 million in marine loans during 2003, up $92 million year over year. Of the $184 million produced, a total of $170 million was sold. Seacoast Marine Finance is headquartered in Ft. Lauderdale, Florida with lending professionals in Florida and California. In November 2002 the division added seven employees to its production team in California to better serve the western markets, including Washington and Oregon. A full year impact of this expansion was realized in 2003. The Company continues to look for opportunities to expand its market penetration of its marine finance business. Revenues from the sale of marine loans totaled $1,408,000 for 2002, an increase of $665,000 or 89.5 percent from 2001. The Company’s marine financing division produced $92.3 million in luxury yacht

14

2003 SEACOAST BANKING CORPORATION OF FLORIDA

loans in 2002 compared to $72.5 million in 2001. The addition of personnel in November 2002, geographically expanding the marine finance division to California, contributed approximately $340,000 to revenue in 2002.

    Sales of investment securities in 2003 and 2002 were transacted by the Company to restructure the portfolio as part of its overall interest rate risk management.

Noninterest Expenses

    When compared to 2002, noninterest expenses for 2003 increased by $2,673,000 or 6.7 percent to $42,463,000, compared to an increase of $1,730,000 or 4.5 percent in 2002. The Company’s overhead ratio has ranged in the low 60s over the past few years. However, the 65.1 percent efficiency ratio for 2003 was higher, primarily as a result of market expansion.

    Salaries and wages increased $880,000 or 5.6 percent to $16,641,000 during 2003 compared to the prior year. The increase included $307,000 for branch personnel in two new offices opened in Palm Beach County in January of this year, $94,000 for the Port St. Lucie, Florida Wal-Mart office opened in October 2002, and $258,000 for personnel in California in the marine finance division added in November 2002. Employee benefits increased $291,000 or 6.8 percent to $4,595,000 from 2002. Group health insurance costs were the primary cause for the increase in 2003, up $304,000 compared to an increase of $280,000 in 2002.

    Occupancy and furniture and equipment expenses during 2003, on an aggregate basis, increased $341,000 or 6.4 percent to $5,695,000, versus results last year. Costs related to new locations, specifically the new branches in Palm Beach County, an office in California and the Port St. Lucie Wal-Mart, added $403,000 to occupancy expenses and furniture and equipment expenses in 2003 versus a year ago. Partially offsetting, depreciation expense for furniture and equipment at offices other than the new locations was $204,000 lower. Without the effect of these items, occupancy and furniture and equipment expenses increased at a more normal rate of 3.7 percent.

    Outsourced data processing costs totaled $5,265,000 for 2003, an increase of $470,000 or 9.8 percent from a year ago versus a $327,000 or 7.3 percent increase in 2002. The Company utilizes third parties for its core data processing system and merchant credit card services processing. Outsourced data processing costs are directly related to the number of transactions processed and increase as the Company’s business volumes grow and new products such as bill pay, internet banking, etc. become more popular.

    Other expenses increased $922,000 in 2003 or 16.5 percent to $6,499,000. The primary increase was in subcontractor fees paid to marine finance solicitors, which increased by $500,000 from a year ago, principally due to the addition of sales staff in California. Higher insurance premiums (for directors and officers liability and blanket bond coverage) have occurred as a direct result of recent financial scandals (Enron, Worldcom, etc.). Remaining unchanged for a number of years, retainers for directors and meeting fees were increased in 2003.

    Amortization of goodwill and other intangibles declined the past two years due to a change in accounting. In addition, deposit based intangibles were fully amortized in 2003. Under Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets,” goodwill was no longer amortized as of January 1, 2002 (see “Note A – Significant Accounting Policies”). (See “Table 13 – Nonperforming Assets”).

Interest Rate Sensitivity Fluctuations in rates may result in changes in the fair market 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 their volatility.

    Senior management regularly reviews the overall interest rate risk position and evaluates strategies to manage the risk. The Company has determined that an acceptable level of interest rate risk would be for net interest income to fluctuate no more than 6 percent given a parallel change in interest rates (up or down) of 200 basis points. The Company’s ALCO model simulations indicate net interest income would increase 0.4 percent if interest rates gradually rise 200 basis points over the next twelve months. While management places a lower probability on significant rate declines after the 50 basis point reduction in November 2002 and 25 basis point reduction in May 2003, the model simulation indicates net interest income would increase 0.2 percent over the next twelve months given a gradual decline in interest rates of 100 basis points. It has been the Company’s experience that non-maturity core deposit balances are stable and subjected to limited re-pricing when interest rates increase or decrease within a range of 200 basis points.

    On December 31, 2003, the Company had a negative gap position based on contractual and prepayment assumptions for the next twelve months, with a negative

15

Management’s Discussion & Analysis

cumulative interest rate sensitivity gap as a percentage of total earning assets of 28.9 percent (see “Table 19 – Interest Rate Sensitivity Analysis”).

    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. Derivative financial instruments, such as interest rate swaps, options, caps, floors, futures and forward contracts may be utilized as components of the Company’s risk management process.

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

    Interest rate risk, defined as the exposure of net interest income and Economic Value of Equity (EVE) to adverse movements in interest rates, is the Company’s primary market risk, and mainly arises from the structure of the balance sheet (non-trading activities). Seacoast is also exposed to market risk in its investing activities. The Asset and Liability Management Committee (ALCO) meets regularly and is responsible for reviewing the interest rate sensitivity position of the Company and establishing policies to monitor and limit exposure to interest rate risk. The policies established by ALCO are reviewed and approved by the Company’s Board of Directors. The primary goal of interest rate risk management is to control exposure to interest rate risk, within policy limits approved by the Board. These limits reflect the Company’s tolerance for interest rate risk over short-term and long-term horizons.

    The Company also performs valuation analysis, which is used for discerning levels of risk present in the balance sheet that might not be taken into account in the net interest income simulation analysis. Whereas net interest income simulation highlights exposures over a relatively short time horizon, valuation analysis incorporates all cash flows over the estimated remaining life of all balance sheet positions. The valuation of the balance sheet, at a point in time, is defined as the discounted present value of asset cash flows minus the discounted value of liability cash flows, the net of which is referred to as EVE. The sensitivity of EVE to changes in the level of interest rates is a measure of the longer-term re-pricing risk and options risk 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. 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 deposit portfolios. Based on our most recent modeling, an instantaneous 100 basis point increase in rates is estimated to increase the EVE 4.6 percent versus the EVE in a stable rate environment. An instantaneous 100 basis point decrease in rates is estimated to decrease the EVE 10.6 percent versus the EVE in a stable rate environment.

    While an instantaneous and severe shift in interest rates is used in this analysis to provide an estimate of exposure under an extremely adverse scenario, a gradual shift in interest rates would have a much more modest impact. 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, changes in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.

Critical Accounting Policies Management after consultation with the audit committee believes that the most critical accounting estimates which may affect the Company’s financial status and involve the most complex, subjective and ambiguous assessments are as follows:

The provision for loan losses; the allowance for loan losses; securities available for sale valuation and accounting; the value of goodwill; and the fair market value of mortgage servicing rights at acquisition and any impairment of that value.

    Disclosures intended to facilitate a reader’s understanding of the possible and likely events or uncertainties known to management that could have a material impact on the reported financial information of the Company related to the most critical accounting estimates are as follows:

Provision for Loan Losses No provision was recorded during 2003 or in 2002 and 2001, reflecting the Company’s credit quality, low nonperforming assets, and the decline in the loan portfolio. Net charge-offs totaled $666,000 or 0.10 percent of average loans for 2003 (principally due to the complete write-off of a single commercial credit for $439,000 in the second quarter),

16

2003 SEACOAST BANKING CORPORATION OF FLORIDA

compared to $208,000 or 0.03 percent of average loans for 2002 and $184,000 or 0.02 percent of average loans for 2001. These ratios are much better than the banking industry as a whole and are consistent with the Company’s long term trends.

    The change to a mortgage banking fee business, where most residential loans are sold servicing released, has resulted in negative overall average loan growth over the period of very low interest rates due to rapid prepayments experienced in residential loans. This factor, together with an historically favorable credit loss experience, has made it unnecessary to provide additions to the allowance for loan losses. Restoration of overall loan growth, as well as continued changes in the mix of loans, may result in loan loss provisions in future periods (see “Loan Portfolio”). In addition, a decline in economic activity could impact loss experience resulting in additions to the allowance for loan losses. Management believes that its credit granting process follows a comprehensive and disciplined approach that mitigates risk and lowers the likelihood of significant increases in charge-offs and nonperforming loans during all economic cycles.

    Management determines the provision for loan losses charged to operations by constantly analyzing and monitoring delinquencies, nonperforming loans and the level of outstanding balances for each loan category, as well as the amount of net charge-offs, and by estimating losses inherent in its portfolio. While the Company’s policies and procedures used to estimate the provision for loan losses charged to operations are considered adequate by management and are reviewed from time to time by the Office of the Comptroller of the Currency (OCC), there exist factors beyond the control of the Company, such as general economic conditions both locally and nationally, which make management’s judgment as to the adequacy of the provision necessarily approximate and imprecise (see “Nonperforming Assets” and “Allowance for Loan Losses”.)

Allowance for Loan Losses Table 12 provides certain information concerning the Company’s allowance for loan losses for the years indicated.

    The allowance for loan losses totaled $6,160,000 at December 31, 2003, $666,000 lower than one year earlier. The allowance for loan losses as a percentage of nonaccrual loans and loans 90 days or more past due was 560.5 percent at December 31, 2003, compared to 304.5 percent at December 31, 2002.

    The model utilized to analyze the adequacy of the allowance for loan losses takes into account such factors as credit quality, loan concentrations, internal controls, audit results, staff turnover, local market economics and loan growth. In its continuing evaluation of the allowance and its adequacy, management also considers, among other factors, the Company’s loan loss experience, loss experience of peer banks, the amount of past due and nonperforming loans, current and anticipated economic conditions, and the values of certain loan collateral, and other assets. The allowance as a percentage of loans outstanding decreased from 0.99 percent to 0.87 percent during 2003. Although the Company experienced commercial and commercial real estate loan growth in the fourth quarter of 2003, the Company’s historically low charge-offs in these portfolios, improved credit quality (see “Nonperforming Assets”), and the modest year over year loan growth did not require an addition to the allowance for 2003. The size of the allowance also reflects the amount of residential loans held by the Company whose historical charge-offs and delinquencies have been favorable. These performance results are attributed to conservative, long-standing and consistently applied loan credit policies and to a knowledgeable, experienced and stable staff. In 2003, net charge-offs totaled $666,000, or 0.10 percent of total loans, compared to $208,000 a year ago. The allowance for loan losses represents management’s estimate of an amount adequate in relation to the risk of losses inherent in the loan portfolio.

    Table 13 summarizes the Company’s allocation of the allowance for loan losses to each type of loan and information regarding the composition of the loan portfolio at the dates indicated.

    Concentration of credit risk, discussed under “Loan Portfolio” of this discussion and analysis, may affect the level of the allowance. Concentrations typically involve loans to one borrower, an affiliated group of borrowers, borrowers engaged in or dependent upon the same industry, or a group of borrowers whose loans are predicated on the same type of collateral. The Company’s significant concentration of credit is a collateral concentration of loans secured by real estate. At December 31, 2003, the Company had $578 million in loans secured by real estate, representing 81.5 percent of total loans, up slightly from 80.8 percent at December 31, 2002. In addition, the Company is subject to a geographic concentration of credit because it only operates in southeastern Florida. Although not material enough to constitute a significant concentration of credit risk, the Company has meaningful credit exposure to real estate developers and investors. Levels of exposure to this industry group, together with an assessment of current trends and expected future financial performance, are carefully analyzed in order to determine an

17

Management’s Discussion & Analysis

adequate allowance level. Problem loan activity for this exposure needs to be evaluated over the long term to include all economic cycles when determining an adequate allowance level.

    While it is the Company’s policy to charge off in the current period loans in which a loss is considered probable, there are additional risks of future losses that cannot be quantified precisely or attributed to particular loans or classes of loans. Because these risks include the state of the economy as well as conditions affecting individual borrowers, management’s judgment of the allowance is necessarily approximate and imprecise. It is also subject to regulatory examinations and determinations as to adequacy, which may take into account such factors as the methodology used to calculate the allowance for loan losses and the size of the allowance for loan losses in comparison to a group of peer companies identified by the regulatory agencies.

    At year-end 2003, the Company’s allowance for loan losses equated to 5.8 times average charge-offs for the last three years. In contrast, today’s allowance equates to approximately two times charge-offs in the early 1990’s when Florida experienced a real estate economic decline. In assessing the adequacy of the allowance, management relies predominantly on its ongoing review of the loan portfolio, which is undertaken both to ascertain whether there are probable losses that must be charged off and to assess the risk characteristics of the portfolio in aggregate. This review considers the judgments of management, and also those of bank regulatory agencies that review the loan portfolio as part of their regular examination process.

Nonperforming Assets Table 14 provides certain information concerning nonperforming assets for the years indicated.

    At December 31, 2003, there were only $8,000 in accruing loans past due 90 days or more and OREO totaled $1,954,000. The primary cause for the OREO balance was a single secured commercial real estate property added to OREO during the third quarter of 2003. Of the $1,091,000 reported in nonaccrual loans at December 31, 2003, 97 percent is secured with real estate. In addition, nonaccrual loans totaling $1,048,000 at December 31, 2003 were performing with respect to payments; however the loans were placed on nonaccrual status because the Company has determined that the collection of principal or interest in accordance with the terms of such loans is uncertain. Management does not expect significant losses for which an allowance for loan losses has not been provided associated with the ultimate realization of these assets.

    Nonperforming assets are subject to changes in the economy, both nationally and locally, changes in monetary and fiscal policies, and changes in conditions affecting various borrowers from the Company’s subsidiary bank. No assurance can be given that nonperforming assets will not in fact increase or otherwise change. A similar judgmental process is involved in the methodology used to estimate and establish the Company’s allowance for loan losses.

Securities Available for Sale The fair value of the available for sale portfolio at December 31, 2003 was less than historical amortized cost, producing net unrealized losses of $3,757,000. The fair value of each security was obtained from independent pricing sources utilized by many financial institutions. However, actual values can only be determined in an arms-length transaction between a willing buyer and seller that can, and often do, vary from these reported values. Furthermore, significant changes in recorded values due to changes in actual and perceived economic conditions can occur rapidly, producing greater unrealized losses in the available for sale portfolio and realized losses for a trading portfolio.

    The credit quality of the Company’s security holdings is such that negative changes in the fair values, as a result of unforeseen deteriorating economic conditions, should only be temporary. Further, management believes that the Company’s other sources of liquidity, as well as the cash flow from principal and interest payments from the securities portfolios, reduces the risk that losses would be realized as a result of needed liquidity from the securities portfolio.

Value of Goodwill Beginning January 1, 2002, the Company’s goodwill was no longer amortized, but tested annually for impairment. The amount of goodwill at December 31, 2003 totaled approximately $2.5 million and was acquired in 1995 as a result of the purchase of a community bank within the Company’s market. The Company has a commercial bank deposit market share of approximately 35 percent in this market, which had a population increase of over 25 percent during the past ten years.

    The assessment as to the continued value for goodwill involves judgments, assumptions and estimates regarding the future.

    The population is forecast by the Bureau of Economic and Business Research at the University of Florida to continue to grow at a 20 percent plus rate over the next ten years. Our highly visible local market orientation, combined with a wide range of products and services

18

2003 SEACOAST BANKING CORPORATION OF FLORIDA

and favorable demographics, has resulted in increasing profitability over the long term in all of the Company’s markets. There is data available indicating that both the products and customers serviced have grown since the acquisition, which is attributable to the increased profitability and supports the goodwill value at December 31, 2003.

Mortgage Servicing Rights A portion of the Company’s loan production involves loans for 1-4 family residential properties. As part of its efforts to manage interest rate risk, the Company has periodically securitized pools of loans and created U.S. Agency-guaranteed mortgage-backed securities. As part of the agreement with the agency, the Company is paid a servicing fee to manage the loan and collect the monthly loan payments. At December 31, 2003, the total estimated fair value of those rights was $244,000. The fair value of the mortgage servicing rights is based on judgments, assumptions and estimates as to the period the fee will be collected, current and future interest rates, and loan foreclosures. These judgments, assumptions and estimates are initially made at the time of securitization and reviewed at least quarterly. Impairment, if any, is recognized through a valuation allowance and charged against current earnings.

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.

    In the table that follows, all deposits with indeterminate maturities such as demand deposits, checking accounts, savings accounts and money market accounts are presented as having a maturity of one year or less.

Contractual Commitments

	December 31, 2003
					Over one year
			One year		through		Over
(In thousands)	Total		or less		three years		three years
Deposit maturities	$	1,129,642	$	998,425		$ 82,893		$48,324
Short-term borrowings		74,158		74,158
Long-term debt		40,000				25,000		15,000
Operating leases		25,881		1,940		4,014		19,927
	$	1,269,681	$	1,074,523		$111,907		$83,251

Funding sources primarily include customer-based core deposits, purchased funds, collateralized borrowings, cash flows from operations, and asset securitizations and sales.

    Cash flows from operations are a significant component of liquidity risk management and consider both deposit maturities and the scheduled cash flows from loan and investment maturities and payments. Deposits are a primary source of liquidity. The stability of this funding source is affected by factors, including returns available to customers on alternative investments, the quality of customer service levels and competitive forces.

    We purchase funds on an unsecured basis from correspondent banks and routinely use securities and loans as collateral for secured borrowings. In the event of severe market disruptions, we have access to secured borrowings through the Federal Reserve Bank.

    Contractual maturities for assets and liabilities are reviewed to adequately maintain current and expected future liquidity requirements. Sources of liquidity, both anticipated and unanticipated, are maintained through a portfolio of high quality marketable assets, such as residential mortgage loans, securities available for sale and federal funds sold. The Company has access to federal funds and FHLB lines of credit and is able to provide short term financing of its activities by selling, under an agreement to repurchase, United States Treasury and Government agency securities not pledged to secure public deposits or trust funds. At December 31, 2003, the Company had available lines of credit of $146 million. At December 31, 2003, the Company had $344 million of United States Treasury and Government agency securities and mortgage backed securities not pledged and available for use under repurchase agree-

19

Management’s Discussion & Analysis

ments. At December 31, 2002, the amount of securities available and not pledged was $391 million.

    Liquidity, as measured in the form of cash and cash equivalents (including federal funds sold and interest bearing deposits), totaled $45,183,000 at December 31, 2003 as compared to $49,822,000 at December 31, 2002. Cash and cash equivalents vary with seasonal deposit movements and are generally higher in the winter than in the summer, and vary with the level of principal repayments and investment activity occurring in the Company’s securities portfolio and loan portfolio. The Company believes its liquidity to be strong and stable.

Off-Balance Sheet Transactions In the normal course of business, we engage in a variety of financial transactions that, under generally accepted accounting principles, 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.

    The two primary off-balance sheet transactions the Company has engaged in are: 1) to manage exposure to interest rate risk (derivatives), and 2) to facilitate customers’ funding needs or risk management objectives (commitments to extend credit and standby letters of credit).

    Derivative transactions are often measured in terms of a notional amount, but this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. The notional amount is not usually exchanged, but is used only as the basis upon which interest or other payments are calculated.

    The derivatives the Company uses to manage exposure to interest rate risk are interest rate swaps. All interest rate swaps are recorded on the balance sheet at fair value with realized and unrealized gains and losses included either in the results of operations or in other comprehensive income, depending on the nature and purpose of the derivative transaction.

    Credit risk of these transactions is managed by establishing a credit limit for each counterparty and through collateral agreements. The fair value of interest rate swaps recorded in the balance sheet at December 31, 2003 included:

Derivative product assets	$	192,000
Derivative product liabilities		439,000

    Lending commitments include unfunded loan commitments and standby and commercial letters of credit. A large majority of loan commitments and standby letters of credit expire without being funded, and accordingly, total contractual amounts are not representative of our actual future credit exposure or liquidity requirements. Loan commitments and letters of credit expose us 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.

    Loan commitments to customers are made in the normal course of our commercial and retail lending businesses. 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. 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. Loan commitments were $168 million at December 31, 2003, and $136 million at December 31, 2002.

Income Taxes Income taxes as a percentage of income before taxes were 34.6 percent for 2003, compared to 38.8 percent in 2002 and 39.8 percent for 2001. Beginning in January 2003 the Company formed a subsidiary and transferred certain real estate assets to a real estate investment trust (REIT). As a result, the Company’s state income tax liability was reduced. The decline in rate from 2001 to 2002 reflects lower state income taxes, the result of a decline in apportionment factors attributable to taxable income for the State of Florida.

Financial Condition Total assets increased $72,526,000 or 5.7 percent to $1,353,823,000 in 2003, after increasing $55,333,000 or 4.5 percent to $1,281,297,000 in 2002.

Capital Resources Table 8 summarizes the Company’s capital position and selected ratios. The Company’s ratio of shareholders’ equity to period end total assets was 7.69 percent at December 31, 2003, compared with 7.86 percent one year earlier. The Company manages the size of its equity through a program of share repurchases of its outstanding Common stock. A total of 796,000 stock option shares are outstanding, of which 572,000 are exercisable; during 2003, 146,000 shares were exercised (see “Note H — Employee Benefits”). In treasury stock at December 31, 2003, there were

20

2003 SEACOAST BANKING CORPORATION OF FLORIDA

1,600,024 shares totaling $15,350,000, compared to 1,659,377 shares or $18,578,000 a year ago.

Loan Portfolio Table 9 shows total loans (net of unearned income) by category outstanding.

    Total loans (net of unearned income and excluding the allowance for loan losses) were $708,792,000 at December 31, 2003, $20,631,000 or 3.0 percent more than at December 31, 2002.

    The historical low interest rate environment and our strategy to reduce the relative size of the residential loan portfolio and increase the size of our commercial and consumer loan portfolios caused overall loan growth to decline during the first two quarters of 2003. Most importantly, this trend reversed in the third and fourth quarters of 2003 with loans increasing $13.0 million or 7.8 percent (annualized) from June 30, 2003 to September 30, 2003 and $44.7 million or 26.9 percent (annualized) from September 30, 2003 to December 31, 2003. The response to the expansion in Palm Beach County has been very positive. A strong loan production team combined with the Company’s new locations resulted in $55.3 million in loans outstanding in this new market at December 31, 2003 and a loan pipeline of approximately $67 million at year-end. The Company anticipates loan balances to continue to increase prospectively and that the mix of consumer, commercial real estate and residential loans outstanding at December 31, 2003 will remain approximately unchanged going forward.

    At December 31, 2003, the Company’s mortgage loan balances secured by residential properties amounted to $244,025,000 or 34.4 percent of total loans (versus $278,738,000 or 40.5 percent a year ago). During 2003, $187.6 million in fixed rate residential mortgage loans were sold compared to $137.5 million during 2002. The Company also sold $170 million in marine loans (generated by Seacoast Marine Finance), compared to $81 million in 2002. The loan sales are without recourse.

    The Company’s loan portfolio secured by commercial real estate increased $50.0 million or 19.7% over the last twelve months. The Company’s commercial real estate lending strategy stresses quality loan growth from local businesses, professionals, experienced developers and investors. At December 31, 2003, the Company had commercial real estate loans totaling $303.8 million or 42.9 percent of total loans (versus $253.8 million or 36.9 percent a year ago). The Company’s top ten commercial real estate funded and unfunded loan relationships aggregated to $97.0 million at December 31, 2003. At December 31, 2003 and 2002, funded and unfunded commitments for commercial real estate loans were comprised of the following types of loans:

	2003						2002
(In millions)	Funded		Unfunded		Total		Funded		Unfunded		Total
Office buildings	$	42.8	$	2.1	$	44.9	$	38.2	$	0.1	$	38.3
Retail trade		39.5		-		39.5		31.5		2.4		33.9
Land development		64.5		45.0		109.5		36.3		25.4		61.7
Industrial		27.6		2.6		30.2		27.6		0.2		27.8
Healthcare		26.5		2.7		29.2		26.1		6.7		32.8
Churches and educational facilities		13.8		4.5		18.3		13.6		0.2		13.8
Recreation		9.3		-		9.3		11.8		0.5		12.3
Multifamily		7.5		8.3		15.8		5.8		4.5		10.3
Mobile home parks		4.9		-		4.9		4.0		-		4.0
Land		7.5		2.9		10.4		5.6		1.6		7.2
Lodging		6.1		-		6.1		3.4		-		3.4
Restaurant		1.8		0.1		1.9		3.1		0.1		3.2
Other		52.0		2.3		54.3		46.8		1.1		47.9
Total	$	303.8	$	70.5	$	374.3	$	253.8	$	42.8	$	296.6

Loans and commitments for one-to-four family residential properties and commercial real estate are generally secured with first mortgages on property, with the loan to fair value of the property not exceeding 80 percent on the date the loan is made. The Company was also a creditor for consumer loans to individual customers

21

Management's Discussion & Analysis

(including installment loans, loans for automobiles, boats, and other personal, family and household purposes) totaling $84,512,000 (versus $91,307,000 a year ago), real estate construction loans secured by residential properties totaling $15,901,000 (versus $11,800,000 a year ago) and residential lot loans totaling $13,942,000 (versus $12,271,000 a year ago).

    The Treasure Coast is a residential community with commercial activity centered in retail and service businesses serving the local residents and seasonal visitors. Real estate mortgage lending is an important segment of the Company’s lending activities. Exposure to market interest rate volatility with respect to mortgage loans is managed by attempting to match maturities and re-pricing opportunities for assets against liabilities and through loan sales. At December 31, 2003, approximately $109 million or 47 percent of the Company’s residential mortgage loan balances were adjustable, compared to $106 million or 40 percent a year ago.

    Approximately $261 million of new residential loans were produced in 2003 and $188 million were sold. Loans secured by residential properties having fixed rates totaled approximately $124 million at December 31, 2003, of which 15- and 30-year mortgages totaled approximately $41 million and $34 million, respectively. Remaining fixed rate balances were comprised of home improvement loans, most with maturities of 10 years or less. In comparison, loans secured by residential properties having fixed rates totaled approximately $160 million at December 31, 2002, with 15- and 30-year fixed rate residential mortgages totaling approximately $68 million and $51 million, respectively.

    The Company’s historical charge-off rates for residential real estate loans have been minimal, with $1,000 in net recoveries for 2003 compared to $22,000 in net recoveries for 2002. The Company considers residential mortgages less susceptible to adverse effects from a downturn in the real estate market.

    Fixed rate and adjustable rate loans secured by commercial real estate, excluding construction loans, totaled approximately $80 million and $146 million, respectively, at December 31, 2003, compared to $88 million and $111 million, respectively, a year ago.

    Commercial lending activities are directed principally towards businesses whose demand for funds are within the Company’s lending limits, such as small to medium sized professional firms, retail and wholesale outlets, and light industrial and manufacturing concerns. Such businesses typically are smaller, often have short operating histories and do not have the sophisticated record keeping systems of larger entities. Most of such loans are secured by real estate used by such businesses, although certain lines are unsecured. Such loans are subject to the risks inherent to lending to small to medium sized businesses including the effects of a sluggish local economy, possible business failure, and insufficient cash flows. The Company’s commercial loan portfolio totaled $46,310,000 at December 31, 2003, compared to $40,491,000 at December 31, 2002.

    The Company makes a variety of consumer loans, including installment loans, loans for automobiles, boats, home improvements, and other personal, family and household purposes, and indirect loans through dealers to finance automobiles. Most consumer loans are secured.

    Second mortgage loans and home equity lines are extended by the Company. No negative amortization loans or lines are offered at the present time. Terms of second mortgage loans include fixed rates for up to 10 years on smaller loans of $30,000 or less. Such loans are sometimes made for larger amounts with fixed rates, but balloon payments upon maturity, not exceeding five years.

    At December 31, 2003, the Company had commitments to make loans of $168,448,000, compared to $135,685,000 at December 31, 2002 (see “Note N — Contingent Liabilities and Commitments with Off-Balance Sheet Risk”).

Deposits and Borrowings Total deposits increased $99,102,000 or 9.6 percent to $1,129,642,000 at December 31, 2003, compared to one year earlier. In comparison to 2001, deposits increased $15,386,000 or 1.5 percent in 2002 to $1,030,540,000. Certificates of deposits decreased $3,885,000 or 1.0 percent to $369,155,000 over the past twelve months, lower cost interest bearing deposits (NOW, savings and money markets deposits) increased $54,424,000 or 11.5 percent to $527,400,000, and noninterest bearing demand deposits increased $48,563,000 or 26.3 percent to $233,087,000. The Company’s success in marketing desirable products, in particular its tiered money market and Money Manager product offerings, enhanced growth in lower cost interest bearing deposits. Growth in business demand deposits of $26,645,000 and personal demand deposits of $15,907,000 comprised most of the increase in noninterest bearing deposits.

    Repurchase agreement balances increased over the past twelve months by $11,691,000 or 18.7 percent to $74,158,000 at December 31, 2003. Repurchase agreements are offered by the Company’s subsidiary bank to select customers who wish to sweep excess balances on a daily basis for investment purposes. The number of

22

2003 SEACOAST BANKING CORPORATION OF FLORIDA

sweep repurchase accounts increased from 100 a year ago to 111 at December 31, 2003.

    In anticipation of asset and deposit growth in 2003 and to better utilize its strong capital position, the Company acquired investment securities with average lives of three to four years, a portion of which was funded with short-term borrowings. As a result, at December 31, 2002, federal funds purchased totaled $40,500,000, compared with no outstanding balance at year-end 2003.

    At December 31, 2003, other borrowings were the same year over year at $40,000,000, entirely comprised of funding from the FHLB. While the same at year-end, transactions during 2003 affected the composition of other borrowings. In January of 2003, a $25 million adjustable rate borrowing tied to LIBOR with a three-year term (maturing on January 30, 2006) was acquired increasing other borrowings to $65 million for most of the year. This was offset in December of 2003 when another fixed rate $25 million borrowing from FHLB matured.

Effects of Inflation and Changing Prices The financial statements and related financial data presented herein have been prepared in accordance with generally accepted accounting principles, 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’ increased cost of goods and services purchased, 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 originations and re-financings tend to slow as interest rates increase, and may reduce the Company’s fee income from such activities.

Securities Information related to yields, maturities, carrying values and unrealized gains (losses) of the Company’s securities is set forth in Tables 15-18.

    At December 31, 2003, the Company had $484,223,000 or 85.7 percent of total securities available for sale, compared to $466,278,000 or 93.5 percent at December 31, 2002. Securities held to maturity were carried at an amortized cost of $80,866,000, representing 14.3 percent of total securities, versus $32,181,000 or 6.5 percent a year ago. The Company’s securities portfolio increased $66,630,000 or 13.4 percent from December 31, 2002 to December 31, 2003.

    Securities activity in 2003 reflects an effort to restructure the portfolio for better performance in the lower interest rate environment experienced. During 2003, a total of $74,905,000 in available for sale securities were reclassified to trading, and maturities and sales of securities of $369.2 million and $141.8 million, respectively, and purchases totaling $666.2 million were recorded. The restructuring and reclassification was necessary due to increased prepayments of collateralized mortgage obligations, which resulted in unacceptable asset sensitivity, accelerated premium amortization and a decline in investment portfolio yield. Securities losses and write-downs related to trading securities totaled $1,994,000, but were partially offset by net gains on sales of $822,000.

    In comparison, during 2002, proceeds from the sale of securities totaled $38,181,000, maturities totaled $309,404,000 and purchases totaled $545,730,000. Activity in 2002 reflects an effort to invest funds for better performance as well, and for (what was perceived at the time) the likely potential of an increasing interest rate environment in the future. Sales in 2002 were transacted to realize appreciation on securities that management believed had reached their maximum potential total return.

    Management controls the Company’s interest rate risk by maintaining a low average duration for the securities portfolio through the acquisition of securities returning principal monthly that can be reinvested. The estimated average life of the investment portfolio at December 31, 2003 was 2.9 years, higher than a year ago when the average life was 1.6 years.

    At December 31, 2003, unrealized net securities losses totaled $4,882,000, compared to net gains of $2,320,000 at December 31, 2002. The Federal Reserve lowered interest rates only 50 basis points in 2002, after decreasing rates 450 basis points from December 2000 to December 2001. During 2003, much of the portfolio was replaced. Most of the change in value occurred during the last half of 2003 as the Treasury yield curve became steeper, resulting in unrealized securities losses.

    Company management considers the overall quality of the securities portfolio to be high. No securities are held which are not traded in liquid markets.

23

Financial Tables

Table 1 – Condensed Income Statement*

(Tax equivalent basis)		2003			2002			2001
Net interest income			3.52	%		3.92	%		3.93	%
Provision for loan losses			0.00			0.00			0.00
Noninterest income
	Securities gains (losses)		(0.09	)		0.04			0.08
	Other		1.48			1.39			1.30
Noninterest expenses			3.26			3.28			3.27
Income before income taxes			1.65			2.07			2.04
Provision for income taxes including tax equivalent adjustment			0.58			0.81			0.82
Net Income			1.07	%		1.26	%		1.22	%

*  As a Percent of Average Assets

Table 2 – Changes in Average Earning Assets

		Increase/(Decrease)					Increase/(Decrease)
(Dollars in thousands)		2003 vs 2002					2002 vs 2001
Securities:
	Taxable	$	187,266		50.9	%	$	127,227		52.8	%
	Nontaxable		(886	)	(23.9	)		(1,583	)	(29.9	)
Federal funds sold and other short term investments			(25,794	)	(80.3	)		941		3.0
Loans, net			(70,597	)	(9.4	)		(82,157	)	(9.9	)
TOTAL		$	89,899		7.8	%	$	44,428		4.0	%

24

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Table 3 – Rate/ Volume Analysis (on a Tax Equivalent Basis)

		2003 vs 2002												2002 vs 2001
		Due to change in:												Due to change in:
(Dollars in thousands)
Amount of increase (decrease)		Volume			Rate			Mix			Total			Volume			Rate			Mix			Total
EARNING ASSETS
Securities
	Taxable	$	7,261		$	(3,633	)	$	(1,848	)	$	1,780		$	7,120		$	(4,141	)	$	(2,187	)	$	792
	Nontaxable		(70	)		1			0			(69	)		(126	)		(2	)		1			(127	)
			7,191			(3,632	)		(1,848	)		1,711			6,994			(4,143	)		(2,186	)		665
Federal funds sold and other short term investments			(422	)		(172	)		138			(456	)		39			(802	)		(24	)		(787	)
Loans			(5,236	)		(4,748	)		448			(9,536	)		(6,514	)		(4,262	)		421			(10,355	)
TOTAL EARNING ASSETS			1,533			(8,552	)		(1,262	)		(8,281	)		519			(9,207	)		(1,789	)		(10,477	)
INTEREST BEARING LIABILITIES
NOW			50			(241	)		(21	)		(212	)		59			(561	)		(30	)		(532	)
Savings deposits			48			(615	)		(21	)		(588	)		53			(1,726	)		(29	)		(1,702	)
Money market accounts			357			(1,079	)		(130	)		(852	)		1,100			(1,571	)		(447	)		(918	)
Time deposits			(526	)		(4,696	)		165			(5,057	)		(2,124	)		(6,809	)		622			(8,311	)
			(71	)		(6,631	)		(7	)		(6,709	)		(912	)		(10,667	)		116			(11,463	)
Federal funds purchased and other short term borrowings			104			(130	)		(24	)		(50	)		98			(940	)		(62	)		(904	)
Long term borrowings			1,340			(775	)		(405	)		161			0			0			0			0
TOTAL INTEREST BEARING LIABILITIES			1,373			(7,536	)		(435	)		(6,598	)		(814	)		(11,607	)		54			(12,367	)
NET INTEREST INCOME		$	160		$	(1,015	)	$	(827	)	$	(1,683	)	$	1,333		$	2,400		$	(1,843	)	$	1,890

Table 4 – Changes in Average Interest Bearing Liabilities

	Increase/(Decrease)					Increase/(Decrease)
(Dollars in thousands)	2003 vs 2002					2002 vs 2001
NOW	$	5,362		8.7	%	$	3,097		5.3	%
Savings deposits		5,019		3.4			2,458		1.7
Money market accounts		30,553		12.1			55,907		28.4
Time deposits		(13,429	)	(3.5	)		(38,335	)	(9.1	)
Federal funds purchased and other short term borrowings		9,979		18.1			3,412		6.6
Other borrowings		20,890		52.2			0		0
TOTAL	$	58,374		6.2	%	$	26,539		2.9	%

25

Financial Tables

Table 5 – Three Year Summary

Average Balances, Interest Income and Expenses, Yields and Rates¹

		2003								2002								2001
		Average					Yield/			Average					Yield/			Average					Yield/
(Dollars in thousands)		Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
EARNING ASSETS
Securities
	Taxable	$	555,407		$	16,054		2.89	%	$	368,141		$	14,274		3.88	%	$	240,914		$	13,482		5.60	%
	Nontaxable		2,818			223		7.91			3,704			292		7.88			5,287			419		7.93
			558,225			16,277		2.92			371,845			14,566		3.92			246,201			13,901		5.65
Federal funds sold and other short term investments			6,348			70		1.10			32,142			526		1.64			31,201			1,313		4.21
Loans2			678,339			46,010		6.78			748,936			55,546		7.42			831,093			65,901		7.93
TOTAL EARNING ASSETS			1,242,912			62,357		5.02			1,152,923			70,638		6.13			1,108,495			81,115		7.32
Allowance for loan losses			(6,407	)							(6,895	)							(7,187	)
Cash and due from banks			40,455								39,886								31,138
Bank premises and equipment			16,528								15,456								16,057
Other assets			12,333								13,096								13,945
		$	1,305,821							$	1,214,466							$	1,162,448
INTEREST BEARING LIABILITIES
NOW		$	66,705		$	363		0.54	%	$	61,343		$	575		0.94	%	$	58,246		$	1,107		1.90	%
Savings deposits			152,908			835		0.55			147,889			1,423		0.96			145,431			3,125		2.15
Money market accounts			283,070			2,097		0.74			252,517			2,949		1.17			196,610			3,867		1.97
Time deposits			368,037			9,892		2.69			381,466			14,949		3.92			419,801			23,260		5.54
Federal funds purchased and other short term borrowings			64,994			523		0.80			55,015			573		1.04			51,603			1,477		2.86
Other borrowings			60,890			2,727		4.48			40,000			2,566		6.42			40,000			2,566		6.42
TOTAL INTEREST BEARING LIABILITIES			996,604			16,437		1.65			938,230			23,035		2.46			911,691			35,402		3.88
Demand deposits			201,921								174,154								154,990
Other liabilities			5,229								5,010								5,285
			1,203,754								1,117,394								1,071,966
Shareholders’ equity			102,067								97,072								90,482
		$	1,305,821							$	1,214,466							$	1,162,448
Interest expense as % of earning assets								1.32	%							2.00	%							3.19	%
Net interest income/yield on earning assets					$	45,920		3.69	%				$	47,603		4.13	%				$	45,713		4.12	%

1.	The tax equivalent adjustment is based on a 34% tax rate.
2.	Nonaccrual loans are included in loan balances. Fees on loans are included in interest on loans.

26

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Table 6 – Noninterest Income

	Year Ended							% Change
(Dollars in thousands)	2003			2002		2001		03/02			02/01
Service charges on deposit accounts	$	4,907		$	5,105	$	5,110		(3.9	)%		(0.1	)%
Trust fees		2,043			2,177		2,497		(6.2	)		(12.8	)
Mortgage banking fees		4,423			3,364		2,456		31.5			37.0
Brokerage commissions and fees		1,863			2,045		1,805		(8.9	)		13.3
Marine finance fees		3,161			1,408		743		124.5			89.5
Debit card income		1,169			980		735		19.3			33.3
Other deposit based EFT fees		441			376		312		17.3			20.5
Other		1,280			1,419		1,450		(9.8	)		(2.1	)
		19,287			16,874		15,108		14.3			11.7
Securities gains (losses)		(1,172	)		457		915		n/m			(50.1	)
TOTAL	$	18,115		$	17,331	$	16,023		4.5	%		8.2	%

n/m = not meaningful

Table 7 – Noninterest Expenses

	Year Ended						% Change
(Dollars in thousands)	2003		2002		2001		03/02			02/01
Salaries and wages	$	16,641	$	15,761	$	14,776		5.6	%		6.7	%
Employee benefits		4,595		4,304		3,866		6.8			11.3
Outsourced data processing costs		5,265		4,795		4,468		9.8			7.3
Occupancy		3,956		3,365		3,358		17.6			0.2
Furniture and equipment		1,739		1,989		2,190		(12.6	)		(9.2	)
Marketing		2,119		2,036		1,908		4.1			6.7
Legal and professional fees		1,336		1,538		1,230		(13.1	)		25.0
FDIC assessments		163		173		177		(5.8	)		(2.3	)
Amortization of intangibles		150		252		552		(40.5	)		(54.3	)
Other		6,499		5,577		5,535		16.5			0.8
TOTAL	$	42,463	$	39,790	$	38,060		6.7	%		4.5	%

n/m = Not Meaningful

27

Financial Tables

Table 8 – Capital Resources

		December 31
(Dollars in thousands)		2003			2002			2001
TIER 1 CAPITAL
	Common stock	$	1,710		$	1,555		$	1,555
	Additional paid in capital		26,911			26,994			26,887
	Retained earnings		95,336			89,960			80,886
	Restricted stock awards		(1,947	)		0			0
	Treasury stock		(15,350	)		(18,578	)		(17,239	)
	Valuation allowance		0			(15	)		(12	)
	Intangibles		(2,658	)		(2,840	)		(2,976	)
TOTAL TIER 1 CAPITAL			104,002			97,076			89,101
TIER 2 CAPITAL
Allowance for loan losses, as limited			6,160			6,826			7,034
TOTAL TIER 2 CAPITAL			6,160			6,826			7,034
TOTAL RISK-BASED CAPITAL		$	110,162		$	103,902		$	96,135
Risk weighted assets		$	797,352		$	754,099		$	760,640
Tier 1 risk based capital ratio			13.04	%		12.87	%		11.71	%
Total risk based capital ratio			13.80			13.77			12.64
	Regulatory minimum		8.00			8.00			8.00
Tier 1 capital to adjusted total assets			7.81			7.99			7.49
	Regulatory minimum		4.00			4.00			4.00
Shareholders’ equity to assets			7.69			7.86			7.63
Average shareholders’ equity to average total assets			7.82			7.99			7.78

28

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Table 9 – Loans Outstanding

			December 31
(In thousands)			2003		2002		2001
Construction and land development			$	107,315	$	77,909	$	70,630
Real estate mortgage
	Residential real estate
		Adjustable		108,863		106,070		139,376
		Fixed rate		75,226		119,013		181,755
		Home equity mortgages		48,986		41,436		41,989
		Home equity lines		10,950		12,219		11,407
				244,025		278,738		374,527
	Commercial real estate			226,366		199,385		200,058
				470,391		478,123		574,585
Commercial and financial				46,310		40,491		36,617
Installment loans to individuals
	Automobiles and trucks			36,189		45,268		54,159
	Marine Loans			28,098		23,032		27,176
	Other			20,225		23,007		21,425
				84,512		91,307		102,760
Other loans				264		331		435
TOTAL			$	708,792	$	688,161	$	785,027

Table 10 – Loan Maturity Distribution

		December 31, 2003
		Commercial,		Construction
		Financial &		and Land
(In thousands)		Agricultural		Development		Total
In one year or less		$	15,193	$	87,614	$	102,807
After one year but within five years:
	Interest rates are floating or adjustable		5,684		19,479		25,163
	Interest rates are fixed		13,149		54		13,203
In five years or more:
	Interest rates are floating or adjustable		5,795		0		5,795
	Interest rates are fixed		6,489		168		6,657
TOTAL		$	46,310	$	107,315	$	153,625

Table 11 – Maturity of Certificates of Deposit of $100,000 or More

	December 31
			% of					% of
(Dollars in thousands)	2003		Total			2002		Total
Maturity Group:
Under 3 months	$	27,376		25.8	%	$	22,666		24.2	%
3 to 6 months		13,450		12.6			16,526		17.6
6 to 12 months		23,768		22.4			22,139		23.6
Over 12 months		41,657		39.2			32,454		34.6
TOTAL	$	106,251		100.0	%	$	93,785		100.0	%

29

Financial Tables

Table 12 – Summary of Loan Loss Experience

		Year Ended December 31
(Dollars in thousands)		2003			2002			2001			2000			1999
Beginning balance		$	6,826		$	7,034		$	7,218		$	6,870		$	6,343
Provision for loan losses			0			0			0			600			660
Charge offs:
	Commercial and financial		646			152			32			98			2
	Consumer		320			371			395			432			458
	Commercial real estate		78			6			27			35			46
	Residential real estate		9			2			2			78			120
TOTAL CHARGE OFFS			1,053			531			456			643			626
Recoveries:
	Commercial and financial		77			36			54			93			111
	Consumer		192			261			182			226			230
	Commercial real estate		108			2			22			39			136
	Residential real estate		10			24			14			33			16
TOTAL RECOVERIES			387			323			272			391			493
Net loan charge offs			666			208			184			252			133
ENDING BALANCE		$	6,160		$	6,826		$	7,034		$	7,218		$	6,870
Loans outstanding at end of year*		$	708,792		$	688,161		$	785,027		$	844,546		$	778,164
Ratio of allowance for loan losses to loans outstanding at end of year			0.87	%		0.99	%		0.90	%		0.85	%		0.88	%
Daily average loans outstanding*		$	678,339		$	748,936		$	831,093		$	820,429		$	743,010
Ratio of net charge offs to average loans outstanding			0.10	%		0.03	%		0.02	%		0.03	%		0.02	%

*  Net of unearned income.

Table 13 – Allowance for Loan Losses

	December 31
(Dollars in thousands)	2003			2002			2001			2000			1999
ALLOCATION BY LOAN TYPE
Commercial and financial loans	$	786		$	850		$	738		$	844		$	677
Real estate loans		4,353			4,745			4,924			4,970			4,913
Installment loans		1,021			1,231			1,372			1,404			1,280
TOTAL	$	6,160		$	6,826		$	7,034		$	7,218		$	6,870
YEAR END LOAN TYPES AS A PERCENT OF TOTAL LOANS
Commercial and financial loans		6.6	%		5.9	%		4.7	%		4.7	%		4.3	%
Real estate loans		81.5			80.8			82.1			84.6			85.6
Installment loans		11.9			13.3			13.2			10.7			10.1
TOTAL		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

30

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Table 14 – Nonperforming Assets

	December 31
(Dollars in thousands)	2003			2002			2001			2000			1999
Nonaccrual loans1	$	1,091		$	2,241		$	2,423		$	2,099		$	2,407
Renegotiated loans		0			0			0			0			0
Other real estate owned		1,954			8			119			346			339
TOTAL NONPERFORMING ASSETS	$	3,045		$	2,249		$	2,542		$	2,445		$	2,746
Amount of loans outstanding at end of year2	$	708,792		$	688,161		$	785,027		$	844,546		$	778,164
Ratio of total nonperforming assets to loans outstanding and other real estate owned at end of period		0.43	%		0.33	%		0.32	%		0.29	%		0.35	%
Accruing loans past due 90 days or more	$	8		$	0		$	134		$	108		$	498

1.	Interest income that could have been recorded during 2003 related to nonaccrual loans was $106,000, none of which was included in interest income or net income. All nonaccrual loans are secured.
2.	Net of unearned income.

Table 15 – Securities Held For Sale

		December 31
		Amortized		Fair		Unrealized		Unrealized
(Dollars in thousands)		Cost		Value		Gains		Losses
U.S. Treasury and other U.S. government agencies and corporations
	2003	$	1,002	$	1,002	$	-	$	-
	2002		2,493		2,508		15		-
Mortgage-backed securities
	2003		480,775		477,018		663		(4,420	)
	2002		455,314		456,655		2,452		(1,111	)
Other
	2003		6,203		6,203		-		-
	2002		7,138		7,115		-		(23	)
Total Securities Held For Sale
	2003	$	487,980	$	484,223	$	663	$	(4,420	)
	2002		464,945		466,278		2,467		(1,134	)

31

Financial Tables

Table 16 – Securities Held For Investment

		December 31
		Amortized		Fair		Unrealized		Unrealized
(Dollars in thousands)		Cost		Value		Gains		Losses
U.S. Treasury and other U.S. government agencies and corporations
	2003	$	4,998	$	4,933	$	-	$	(65	)
	2002		-		-		-		-
Mortgage-backed securities
	2003		73,585		72,392		140		(1,333	)
	2002		28,555		29,345		800		(10	)
Obligations of states and political subdivisions
	2003		2,283		2,416		133		-
	2002		3,626		3,823		197		-
Total Securities Held For Investment
	2003	$	80,866	$	79,741	$	273	$	(1,398	)
	2002		32,181		33,168		997		(10	)

Table 17 – Maturity Distribution of Securities Held For Investment

	December 31, 2003
													No				Average
	1 Year			1-5			5-10			After 10			Contractual				Maturity
(Dollars in thousands)	Or Less			Years			Years			Years			Maturity	Total			In Years
AMORTIZED COST
U.S. Treasury and other U.S. government agencies and corporations				$	4,998									$	4,998			2.49
Mortgage-backed securities	$	2,481			55,619		$	15,485							73,585			4.09
Obligations of states and political subdivisions		855			436					$	992				2,283			5.39
Total Securities Held For Investment	$	3,336		$	61,053		$	15,485		$	992			$	80,866			4.03
FAIR VALUE
U.S. Treasury and other U.S. government agencies and corporations				$	4,933									$	4,933
Mortgage-backed securities	$	2,505			55,303		$	14,584							72,392
Obligations of states and political subdivisions		867			472					$	1,077				2,416
Total Securities Held For Investment	$	3,372		$	60,708		$	14,584		$	1,077			$	79,741
WEIGHTED AVERAGE YIELD (FTE)
U.S. Treasury and other U.S. government agencies and corporations					1.87	%									1.87	%
Mortgage-backed securities		8.10	%		4.13	%		3.74	%						4.18	%
Obligations of states and political subdivisions		8.15	%		7.98	%					7.69	%			7.92	%
Total Securities Held For Investment		8.12	%		3.97	%		3.74	%		7.69	%			4.14	%

32

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Table 18 – Maturity Distribution of Securities Held For Sale

	December 31, 2003
										After		No						Average
	1 Year			1-5			5-10			10		Contractual						Maturity
(Dollars in thousands)	Or Less			Years			Years			Years		Maturity			Total			In Years
AMORTIZED COST
U.S. Treasury and other U.S. government agencies and corporations	$	1,002													$	1,002		0.08
Mortgage-backed securities		25,764		$	433,711		$	21,300								480,775		2.69
Other												$	6,203			6,203		*
Total Securities Held For Sale	$	26,766		$	433,711		$	21,300		$	0	$	6,203		$	487,980		2.68
FAIR VALUE
U.S. Treasury and other U.S. government agencies and corporations	$	1,002													$	1,002
Mortgage-backed securities		25,549		$	431,063		$	20,406								477,018
Other												$	6,203			6,203
Total Securities Held For Sale	$	26,551		$	431,063		$	20,406		$	0	$	6,203		$	484,223
WEIGHTED AVERAGE YIELD (FTE)
U.S. Treasury and other U.S. government agencies and corporations		0.95	%													0.95	%
Mortgage-backed securities		2.41	%		3.35	%		3.43	%							3.30	%
Other													2.78	%		2.78	%
Total Securities Held For Sale		2.35	%		3.35	%		3.43	%				2.78	%		3.29	%

*  Other Securities excluded from calculated average for total securities

Table 19 – Interest Rate Sensitivity¹

	December 31, 2003
(Dollars in thousands)	0-3 Months			4-12 Months			1-5 Years		Over 5 Years		Total
Federal funds sold and interest bearing deposits	$	255		$	0		$	0	$	0	$	255
Securities2		65,271			95,844			313,787		93,944		568,846
Loans3		193,687			169,311			313,620		31,083		707,701
Earning assets		259,213			265,155			627,407		125,027		1,276,802
Savings deposits4		527,400			0			0		0		527,400
Certificates of deposit		99,580			138,358			131,075		142		369,155
Borrowings		99,158			0			0		15,000		114,158
Interest bearing liabilities		726,138			138,358			131,075		15,142		1,010,713
Interest rate swaps		(54,000	)		25,000			29,000		0		0
Interest sensitivity gap	$	(520,925	)	$	151,797		$	525,322	$	109,885	$	266,089
Cumulative gap	$	(520,925	)	$	(369,128	)	$	156,204	$	266,089
Cumulative gap to total earning assets (%)		(40.8	)		(28.9	)		12.2		20.8
Earning assets to interest bearing liabilities (%)		35.7			191.6			478.7		825.7

1.	The repricing dates may differ from maturity dates for certain assets due to prepayment assumptions.
2.	Securities are stated at amortized cost.
3.	Excludes nonaccrual loans.
4.	This category is comprised of NOW, savings and money market deposits. If NOW and savings deposits (totaling $170,838) were deemed repriceable in “4-12 months,” the interest sensitivity gap and cumulative gap would be $350,087 indicating 27.4% of earning assets and 46.7% of earning assets to interest bearing liabilities for the “0-3 months” category.

33

Selected Quarterly Information

Consolidated Quarterly Average Balances, Yields and Rates¹

		2003 Quarters
		Fourth						Third						Second
(Dollars in thousands)		Average Balance			Yield/ Rate			Average Balance			Yield/ Rate			Average Balance			Yield/ Rate
EARNING ASSETS
Securities
	Taxable	$	567,859			3.21	%	$	575,915			2.56	%	$	555,142			2.68	%
	Nontaxable		2,183			7.88			2,924			7.93			2,980			8.05
TOTAL SECURITIES			579,042			3.22			578,839			2.58			555,122			2.71
Federal funds sold and other short term investments			4,649			0.94			7,265			0.98			6,769			1.19
Loans2			689,353			6.49			662,425			6.60			671,740			7.00
TOTAL EARNING ASSETS			1,273,044			4.97			1,248,529			4.69			1,236,631			5.03
Allowance for loan losses			(6,177	)					(6,123	)					(6,542	)
Cash and due from banks			36,116						31,240						47,638
Bank premises and equipment			16,781						16,858						16,339
Other assets			14,056						11,472						11,687
		$	1,333,820					$	1,301,976					$	1,305,753
INTEREST BEARING LIABILITIES
NOW		$	70,682			0.47	%	$	61,928			0.47	%	$	66,854			0.58	%
Savings deposits			157,089			0.51			154,759			0.51			150,818			0.55
Money market accounts			292,293			0.66			290,248			0.67			283,526			0.79
Time deposits			359,342			2.45			365,558			2.58			375,143			2.78
Federal funds purchased and other short term borrowings			68,718			0.77			50,596			0.60			62,430			0.83
Other borrowings			56,576			4.11			65,000			4.43			65,000			4.49
TOTAL INTEREST BEARING LIABILITIES			1,004,700			1.46			988,089			1.58			1,003,771			1.73
Demand deposits			218,489						205,740						196,451
Other liabilities			5,633						6,069						4,406
TOTAL			1,228,822						1,199,898						1,204,628
Shareholders’ equity			104,998						102,078						101,125
		$	1,333,820					$	1,301,976					$	1,305,753
Interest expense as % of earning assets						1.15	%					1.25	%					1.40	%
Net interest income as % of earning assets						3.82						3.44						3.63

1.	The tax equivalent adjustment is based on a 35% tax rate. All yields/rates are calculated on an annualized basis.
2.	Nonaccrual loans are included in loan balances. Fees on loans are included in interest on loans.

34

2003 SEACOAST BANKING CORPORATION OF FLORIDA

						2002 Quarters
First						Fourth						Third						Second						First
Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/
Balance			Rate			Balance			Rate			Balance			Rate			Balance			Rate			Balance			Rate
$	512,781			3.15	%	$	411,457			3.49	%	$	374,898			3.86	%	$	371,208			4.11	%	$	313,853			4.15	%
	3,193			7.77			3,505			7.99			3,653			7.99			3,654			7.77			4,009			7.78
	515,974			3.17			414,962			3.53			378,551			3.90			374,862			4.15			317,862			4.20
	6,723			1.27			17,001			1.40			9,933			1.72			32,979			1.68			69,478			1.66
	690,022			7.05			718,650			7.14			742,176			7.30			754,021			7.53			781,662			7.59
	1,212,719			5.39			1,150,613			5.74			1,130,660			6.10			1,161,862			6.28			1,169,002			6.33
	(6,795	)					(6,817	)					(6,867	)					(6,906	)					(6,993	)
	47,048						44,982						34,386						39,336						40,855
	16,122						16,161						15,257						15,111						15,287
	12,105						12,357						12,976						13,265						13,806
$	1,281,199					$	1,217,296					$	1,186,412					$	1,222,668					$	1,231,957
$	67,373			0.66	%	$	61,321			0.77	%	$	55,841			0.92	%	$	63,146			0.94	%	$	65,168			1.11	%
	148,857			0.62			145,226			0.80			147,232			0.96			151,219			0.97			147,916			1.12
	265,843			0.86			254,627			1.01			256,811			1.20			256,021			1.20			242,428			1.27
	372,273			2.94			376,043			3.36			376,684			3.71			379,228			4.08			394,162			4.51
	78,495			0.96			54,876			0.88			35,664			0.90			54,444			1.13			75,515			1.17
	56,944			4.90			40,000			6.42			40,000			6.42			40,000			6.41			40,000			6.42
	989,785			1.83			932,093			2.13			912,232			2.40			944,058			2.52			965,189			2.77
	186,613						180,763						171,255						176,869						167,618
	4,787						5,637						4,905						4,856						4,709
	1,181,185						1,118,493						1,088,392						1,125,783						1,137,516
	100,014						98,803						98,020						96,885						94,441
$	1,281,199					$	1,217,296					$	1,186,412					$	1,222,668					$	1,231,957
				1.50	%					1.73	%					1.94	%					2.05	%					2.28	%
				3.89						4.02						4.17						4.23						4.05

35

Selected Quarterly Information

Quarterly Consolidated Income Statement

		2003 Quarters											2002 Quarters
(Dollars in thousands,
except per share data)		Fourth		Third			Second			First			Fourth		Third			Second		First
Net interest income:
	Interest income	$	15,923	$	14,734		$	15,478		$	16,077		$	16,614	$	17,348		$	18,134	$	18,361
	Interest expense		3,703		3,940			4,317			4,477			5,010		5,515			5,926		6,584
	Net interest income		12,220		10,794			11,161			11,600			11,604		11,833			12,208		11,777
Provision for loan losses			0		0			0			0			0		0			0		0
Net interest income after provision for loan losses			12,220		10,794			11,161			11,600			11,604		11,833			12,208		11,777
Noninterest income:
	Service charges on deposit accounts		1,209		1,279			1,202			1,217			1,297		1,321			1,270		1,217
	Trust fees		498		494			527			524			503		535			542		597
	Mortgage banking fees		464		1,098			1,223			1,638			1,338		630			620		776
	Brokerage commissions and fees		493		364			586			420			469		463			570		543
	Marine finance fees		592		903			859			807			713		189			339		167
	Debit Card income		259		301			320			289			252		253			252		223
	Other deposit based EFT fees		114		106			105			116			97		88			90		101
	Other income		205		347			368			360			335		375			350		359
	Securities gains (losses)		0		(4	)		(11	)		(1,157	)		2		(9	)		398		66
	Total noninterest income		3,834		4,888			5,179			4,214			5,006		3,845			4,431		4,049
Noninterest expenses:
	Salaries and wages		3,995		4,214			4,273			4,159			4,206		3,940			3,855		3,760
	Employee benefits		1,044		1,123			1,212			1,216			1,129		1,064			1,063		1,048
	Outsourced data processing costs		1,297		1,367			1,315			1,286			1,181		1,183			1,185		1,246
	Occupancy		1,009		977			976			994			874		831			831		829
	Furniture and equipment		362		451			427			499			452		503			499		535
	Marketing		559		492			518			550			511		498			514		513
	Legal and professional fees		219		339			370			408			391		367			455		325
	FDIC assessments		37		44			41			41			42		44			44		43
	Amortization of intangibles		0		24			63			63			63		63			63		63
	Other		1,593		1,637			1,610			1,659			1,250		1,428			1,493		1,406
	Total noninterest expenses		10,115		10,668			10,805			10,875			10,099		9,921			10,002		9,768
Income before income taxes			5,939		5,014			5,535			4,939			6,511		5,757			6,637		6,058
Provision for income taxes			2,111		1,599			1,985			1,716			2,467		2,250			2,588		2,372
Net income		$	3,828	$	3,415		$	3,550		$	3,223		$	4,044	$	3,507		$	4,049	$	3,686
PER COMMON SHARE DATA
Net income diluted		$	0.24	$	0.22		$	0.23		$	0.21		$	0.25	$	0.23		$	0.25	$	0.24
Net income basic			0.25		0.22			0.23			0.21			0.26		0.23			0.26		0.24
Cash dividends declared:
	Common stock		0.13		0.13			0.10			0.10			0.10		0.09			0.09		0.09
Market price common stock:
	Low close		16.670		13.851			14.864			16.145			15.211		14.527			14.015		13.348
	High close		18.100		18.600			17.817			18.091			18.318		19.636			17.494		14.518
	Bid price at end of period		17.350		17.400			15.664			17.627			17.127		17.436			17.494		14.334

36

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Management’s Report on Responsibilities for Financial Reporting

    Management is responsible for the preparation and content of the accompanying financial statements and the other information contained in this report. Management believes that the financial statements have been prepared in conformity with appropriate, generally accepted accounting principles applied on a consistent basis and present fairly Seacoast Banking Corporation of Florida’s consolidated financial condition and results of operations. Where amounts must be based on estimates and judgments, they represent the best estimates of management.

    Management maintains and relies upon an accounting system and related internal accounting controls to provide reasonable assurance that transactions are properly executed and recorded and that the company’s assets are safeguarded. Emphasis is placed on proper segregation of duties and authorities, the development and dissemination of written policies and procedures and a complete program of internal audits and management follow-up. In recognition of cost-benefit relationships and inherent control limitations, some features of the control systems are designed to detect rather than prevent errors, irregularities and departures from approved policies and practices. Management believes the system of controls has prevented or detected on a timely basis any occurrences that could be material to the financial statements and that timely corrective actions have been initiated when appropriate.

    The accompanying 2003 consolidated financial statements have been audited by PricewaterhouseCoopers LLP independent auditors, in accordance with auditing standards generally accepted in the United States of America. In performing its audit, PricewaterhouseCoopers LLP considered the Company’s internal control structure to the extent it deems necessary in order to issue its opinion on the consolidated financial statements.

    Internal control and procedures are regularly reviewed by the Company’s internal auditors and their findings are shared with the Board Audit committee. Based on these reviews and management’s review of the design and operation of these controls and procedures during 2003, including review as of year-end, no matters have come to management’s attention regarding any significant deficiencies which could adversely affect the corporation’s ability to record, process, summarize and report financial data.

    The Board of Directors pursues its oversight role for accounting and internal accounting control matters through an Audit Committee of the Board of Directors comprised entirely of outside Directors. The Audit Committee meets periodically with management, internal auditors and independent accountants. The independent accountants and internal auditors have full and free access to the Audit Committee and meet with it privately, as well as with management present, to discuss internal control accounting and auditing matters.

Dennis S. Hudson, III

President and Chief Executive Officer

William R. Hahl

Executive Vice President and Chief Financial Officer

John R. Turgeon

Senior Vice President and Controller

37

Report of Independent Certified Public Accountants

To the Board of Directors and Shareholders of

Seacoast Banking Corporation of Florida:

    In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholder’s equity and of cash flows present fairly, in all material respects, the financial position of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) at December 31, 2003 and 2002, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The Company’s consolidated financial statements as of December 31, 2001 and for the year then ended, prior to the revisions described in Notes A and S, were audited by other independent accountants who have ceased operations. Those independent accountants expressed an unqualified opinion on those financial statements in their report dated January 14, 2002.

    As discussed above, the Company’s financial statements as of December 31, 2001 and for the year then ended, were audited by other independent accountants who have ceased operations. As described in Note A, the Company’s Board of Directors approved a 3 for 1 common stock split effective July 1, 2002, and an 11 for 10 stock split effective August 1, 2003. These financial statements have been restated to reflect the stock splits for the year ended December 31, 2001. As described in Note S, these financial statements have also been revised to include the transitional disclosures required by Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”, which was adopted by the Company as of January 1, 2002. We audited the adjustments described in Note A that were applied to restate common stock for the 2001 financial statements. We also audited the transitional disclosures described in Note S. In our opinion, such adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2001 financial statements of the Company other than with respect to such adjustments and disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 financial statements taken as a whole.

West Palm Beach, Florida

February 25, 2004

38

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Consolidated Statements of Income

Seacoast Banking Corporation of Florida and Subsidiaries

		For the Year Ended December 31
(Dollars in thousands, except per share data)		2003			2002		2001
INTEREST INCOME
Interest on securities
	Taxable		$16,054			$14,274		$13,482
	Nontaxable		147			195		285
Interest and fees on loans			45,941			55,462		65,815
Interest on federal funds sold and interest bearing deposits			70			526		1,313
	Total interest income		62,212			70,457		80,895
INTEREST EXPENSE
Interest on savings deposits			3,295			4,947		8,099
Interest on time certificates			9,892			14,949		23,260
Interest on borrowed money			3,250			3,139		4,043
	Total interest expense		16,437			23,035		35,402
NET INTEREST INCOME			45,775			47,422		45,493
Provision for loan losses			0			0		0
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			45,775			47,422		45,493
NONINTEREST INCOME
Securities gains (losses)			(1,172	)		457		915
Other			19,287			16,874		15,108
	Total noninterest income		18,115			17,331		16,023
NONINTEREST EXPENSES			42,463			39,790		38,060
INCOME BEFORE INCOME TAXES			21,427			24,963		23,456
Provision for income taxes			7,411			9,677		9,326
NET INCOME			$14,016			$15,286		$14,130
PER SHARE DATA
Net income per share common stock
	Diluted		$  0.89			$  0.97		$  0.90
	Basic		0.91			1.00		0.91
Average shares outstanding
	Diluted		15,667,015			15,717,893		15,756,982
	Basic		15,334,765			15,350,353		15,521,265

See notes to consolidated financial statements.

39

Consolidated Balance Sheets

Seacoast Banking Corporation of Florida and Subsidiaries

		December 31
(Dollars in thousands, except per share data)		2003			2002
ASSETS
Cash and due from banks		$	44,928		$	49,571
Federal funds sold and interest bearing deposits			255			251
	Total cash and cash equivalents		45,183			49,822
Securities held for sale (at fair value)			484,223			466,278
Securities held for investment (fair values: 2003 – $79,741 and 2002 – $33,168)			80,866			32,181
	Total securities		565,089			498,459
Loans available for sale			5,403			13,814
Loans			708,792			688,161
Less: Allowance for loan losses			(6,160	)		(6,826	)
	Net loans		702,632			681,335
Bank premises and equipment, net			16,847			16,045
Other real estate owned			1,954			8
Other assets			16,715			21,814
TOTAL ASSETS		$	1,353,823		$	1,281,297
LIABILITIES
Deposits
Demand deposits (noninterest bearing)		$	233,087		$	184,524
Savings deposits			527,400			472,976
Other time deposits			262,904			279,255
Time certificates of $100,000 or more			106,251			93,785
	Total deposits		1,129,642			1,030,540
Federal funds purchased and securities sold under agreement to repurchase, maturing within 30 days			74,158			102,967
Other borrowings			40,000			40,000
Other liabilities			5,939			7,043
			1,249,739			1,180,550
Commitments and Contingencies (Notes I and N)
SHAREHOLDERS’ EQUITY
Preferred stock, par value $1.00 per share – authorized 4,000,000 shares, none issued or outstanding			0			0
Common stock, par value $.10 per share authorized 22,000,000 shares, issued 17,103,650 and outstanding 15,358,526 shares in 2003 and issued 15,549,378 and outstanding 13,890,001 shares in 2002			1,710			1,555
Additional paid-in capital			26,911			26,994
Retained earnings			95,336			89,960
Less: Restricted stock awards (145,100 shares issued and outstanding in 2003)			(1,947	)		0
Less: Treasury stock (1,600,024 shares in 2003 and 1,659,377 shares in 2002), at cost			(15,350	)		(18,578	)
			106,660			99,931
Accumulated other comprehensive income (loss), net			(2,576	)		816
TOTAL SHAREHOLDERS’ EQUITY			104,084			100,747
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,353,823		$	1,281,297

See notes to consolidated financial statements.

40

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Consolidated Statements of Cash Flows

Seacoast Banking Corporation of Florida and Subsidiaries

		For The Year Ended December 31
(Dollars in thousands)		2003			2002			2001
Increase (Decrease) in Cash and Cash Equivalents
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received		$	71,467		$	76,018		$	82,120
Fees and commissions received			19,562			17,382			15,450
Interest paid			(16,616	)		(23,383	)		(35,645	)
Cash paid to suppliers and employees			(41,305	)		(36,094	)		(34,468	)
Income taxes paid			(7,476	)		(9,408	)		(9,761	)
Trading securities activity			74,648			0			0
Change in loans sold and available for sale, net			8,411			5,321			(17,105	)
Net change in other assets			5,138			(7,349	)		(485	)
	Net cash provided by operating activities		113,829			22,487			106
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities of securities held for sale			258,672			306,103			97,156
Maturities of securities held for investment			110,485			3,301			3,660
Proceeds from sale of securities held for sale			141,771			38,131			154,018
Purchase of securities held for sale			(507,348	)		(535,733	)		(334,597	)
Purchase of securities held for investment			(158,884	)		(9,997	)		(15,798	)
Net new loans and principal repayments			(23,384	)		96,576			59,247
Proceeds from the sale of other real estate owned			78			216			305
Additions to bank premises and equipment			(2,610	)		(2,583	)		(757	)
	Net cash used in investing activities		(181,220	)		(103,986	)		(36,766	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits			98,920			15,388			58,068
Net increase (decrease) in federal funds purchased and repurchase agreements			(28,809	)		31,263			6,684
Exercise of stock options			899			653			1,281
Net treasury stock acquired			(1,172	)		(2,391	)		(4,457	)
Dividends paid			(7,086	)		(5,706	)		(5,307	)
	Net cash provided by financing activities		62,752			39,207			56,269
	Net increase (decrease) in cash and cash equivalents		(4,639	)		(42,292	)		19,609
Cash and cash equivalents at beginning of year			49,822			92,114			72,505
Cash and cash equivalents at end of year		$	45,183		$	49,822		$	92,114

See Note P for supplemental disclosures.

See notes to consolidated financial statements.

41

Consolidated Statements of Shareholders Equity

Seacoast Banking Corporation and Subsidiaries

		Common Stock																	Accumulated
							Additional						Restricted						Other
		Class A		Class B			Paid-in			Retained			Stock			Treasury			Comprehensive			Comprehensive
(In thousands)		Stock		Stock			Capital			Earnings			Awards			Stock			Income, Net			Income
BALANCE AT DECEMBER 31, 2000		$	482	$	36		$	27,831		$	72,562		$	0		$	(14,470	)	$	(2,178	)
Comprehensive Income:
	Net income										14,130											$	14,130
	Net unrealized gain on securities																			3,608			3,608
	Comprehensive income																						17,738
Cash dividends											(5,307	)
Exchange of Class B common stock for Class A common stock			1		(1	)
Treasury stock acquired																	(4,523	)
Common stock issued from Treasury:
	For employee benefit plans																64
	For stock options and awards							93			(499	)					1,690
BALANCE AT DECEMBER 31, 2001			483		35			27,924			80,886			0			(17,239	)		1,430
Effect of capital simplification			35		(35	)
Effect of three for one stock split			1,037					(1,037	)
Comprehensive Income:
	Net income										15,286												15,286
	Net unrealized loss on securities																			(844	)		(844	)
	Net reclassification adjustment																			230
	Comprehensive income																						14,442
Cash dividends											(5,706	)
Treasury stock acquired																	(2,482	)
Common stock issued from Treasury:
	For employee benefit plans																91
	For stock options and awards							107			(506	)					1,052
BALANCE AT DECEMBER 31, 2002			1,555		0			26,994			89,960			0			(18,578	)		816
Effect of 10% stock dividend paid as a stock split			155					(155	)
Comprehensive Income:
	Net income										14,016												14,016
	Net unrealized loss on securities																			(2,790	)		(2,790	)
	Net unrealized loss on cash flow interest rate swap																			(270	)		(270	)
	Net reclassification adjustment																			(332	)
	Comprehensive income																						10,956
Cash dividends											(7,086	)
Treasury stock acquired																	(1,313	)
Common stock issued from Treasury:
	For employee benefit plans										(4	)					145
	For stock options and awards							72			(1,550	)		(1,947	)		4,396
BALANCE AT DECEMBER 31, 2003		$	1,710	$	0		$	26,911		$	95,336		$	(1,947	)	$	(15,350	)	$	(2,576	)

See notes to consolidated financial statements.

42

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Notes to Consolidated Financial Statements

Seacoast Banking Corporation of Florida and Subsidiaries

Note A

Significant Accounting Policies

    Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation.

    Nature of Operations: The Company is a single segment bank holding company with one operating subsidiary bank, First National Bank and Trust Company. The bank’s service area includes Palm Beach, Martin, St. Lucie and Indian River counties which are located on Florida’s southeast coast. The bank operates 28 full service branches within its markets.

    Use of Estimates: The preparation of these financial statements required the use of certain estimates by management in determining the Company’s assets, liabilities, revenues and expenses. Specific areas, among others, requiring the application of management’s estimates include calculation of the allowance for loan losses and the valuation of investment securities, mortgage servicing rights and goodwill. Actual results could differ from those estimates.

    Securities: Securities that may be sold as part of the Company’s asset/liability management or in response to, or in anticipation of changes in interest rates and resulting prepayment risk, or for other factors are stated at fair value with unrealized gains or losses reflected as a component of Shareholders’ Equity net of tax or included in noninterest income as appropriate. The estimated fair value of a security is determined based on market quotations when available or, if not available, by using a discounted cash flow approach. Realized gains and losses, including other than temporary impairments, are included in noninterest income as investment securities gains (losses). Debt securities that the Company has the ability and intent to hold to maturity are carried at amortized cost. Interest income on securities, including amortization of premiums and accretion of discounts, is recognized using the interest method.

    The Company generally anticipates prepayments of principal in the calculation of the effective yield for collateralized mortgage obligations and mortgage backed securities. The adjusted cost of each specific security sold is used to compute gains or losses on the sale of securities.

    Loans: Loans are recognized at the principal amount outstanding, net of unearned income and amounts charged off. Unearned income includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using methods which approximate the effective interest rate method.

    Fees received for providing loan commitments and letters of credit that result in loans are typically deferred and amortized to interest income over the life of the related loan, beginning with the initial borrowing. Fees on commitments and letters of credit are amortized to noninterest income as banking fees and commissions over the commitment period when funding is not expected.

    Loan Sales and Securitizations: Loans held for sale are carried at the lower of cost or market value. When a loan is sold or transferred to held for sale, the loan’s carrying value is compared to its fair value and any shortfall in value that is determined to be credit related is recorded as a charge-off, reducing the allowance for credit losses. Any shortfall in fair value other than credit related is recorded as a charge to other noninterest income. All subsequent net declines in market value of loans held for sale are recorded to other noninterest income.

    The Company records a transfer of financial assets as a sale when it surrenders control over those financial assets to the extent that consideration other than beneficial interests in the transferred assets is received in exchange. The Company considers control surrendered when all conditions prescribed by SFAS No. 140 are met.

    Other Real Estate Owned: Other real estate owned consists of real estate acquired in lieu of unpaid loan balances. These assets are carried at an amount equal to the loan balance prior to foreclosure plus costs incurred for improvements to the property, but no more than the estimated fair value of the property less estimated selling costs. Any valuation adjustments required at the date of transfer are charges to the allowance for credit losses. Subsequently, unrealized losses and realized gains and losses are included in other noninterest income. Operating results from OREO are recorded in other noninterest expense.

    Bank Premises and Equipment: Bank premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed principally by the straight line method, over the estimated useful lives as follows: building – 25-40 years, furniture and equipment – 3-12 years.

    Goodwill and Other Intangible Assets: Effective January 1, 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer

43

amortized, but are subject to impairment tests at least annually. Intangible assets with finite lives continue to be amortized over the period the Company expects to benefit from such assets and are periodically reviewed for other than temporary impairment. Goodwill totaled $2,639,000 at December 31, 2003. The Company’s goodwill evaluation for the year ended December 31, 2003 indicated that none of the goodwill is impaired.

    Mortgage Servicing Rights: The Company acquires mortgage servicing rights through the origination of mortgage loans, and the Company may sell or securitize those loans with servicing rights retained. The Company allocates the total cost of the mortgage loans to the mortgage servicing rights and the loans (without the mortgage servicing rights) based on their relative fair values.

    The Company assesses its capitalized mortgage servicing rights for impairment based on the fair value of those rights. The portfolio is stratified by two predominant risk characteristics: loan type and fixed versus variable interest rate. Impairment, if any, is recognized through a valuation allowance for each impaired stratum. Mortgage servicing rights are amortized in proportion to, and over the period of, the estimated net future servicing income.

    Revenue Recognition: Interest on loans is accrued based upon the principal amount outstanding. The accrual of interest income is discontinued when a loan becomes 90 days past due as to principal or interest. When interest accruals are discontinued, interest credited to income in the current year is reversed and interest accrued in the prior year is charged to the allowance for loan losses.

    Management may elect to continue the accrual of interest when the estimated net realizable value of collateral is sufficient to cover the principal balance and accrued interest.

    Allowance for Loan Losses: The allowance for loan losses is the amount considered necessary to absorb inherent losses in the portfolio based on management’s evaluations of the size and current risk characteristics of the loan portfolio. Such evaluations consider the balance of problem loans and prior loan loss experience as well as the impact of current economic conditions and other risk factors. Prior loss experience is based on an analysis that examines the loss experience of the Company and its peers. General economic conditions and other risk elements are evaluated by management for factors that may affect the collectibility of loans.

    Certain impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate. As a practical expedient, impairment may be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral dependent. When the measure of the impaired loan is less than the recorded investment in the loan, the impairment is recorded through a valuation allowance.

    Income Taxes: Deferred tax assets and liabilities are determined based on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their related tax bases and are measured using the enacted tax rates and laws that are in effect. The effect on deferred tax assets and liabilities of a change in rates is recognized as income or expense in the period in which the change occurs.

    Net Income per Share: Net income per share is based upon the weighted average number of shares of common stock (Basic) and equivalents (Diluted) outstanding during the respective years. Prior years per share amounts reflect the issuance of a three for one stock split effective July 2002 and an eleven for ten stock split effective August 2003.

    Cash Flow Information: For the purposes of the consolidated statements of cash flows, the Company considers cash and due from banks and federal funds sold as cash and cash equivalents.

    Employee Benefits: The three stock option plans are accounted for under APB Opinion No. 25, and therefore no compensation cost has been recognized. Had compensation cost for these plans been determined consistent with FASB Statement No. 123, the Company’s net income and earnings per share would have been reduced to the following pro forma amounts:

(In thousands, except per share data)		2003			2002			2001
Net income
	As Reported	$	14,016		$	15,286		$	14,130
	Stock Based Employee Compensation Cost, Net of Tax		(17	)		(7	)		(244	)
	Pro Forma		13,999			15,279			13,886
Per Share (Diluted):
	As Reported		0.89			0.97			0.90
	Pro Forma		0.89			0.97			0.88

44

2003 SEACOAST BANKING CORPORATION OF FLORIDA

    Because the Statement 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years.

    The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in 2003: risk-free interest rates of 4.25 percent; expected dividend yield of 2.9 percent; expected life of 7 years; expected volatility of 25.0 percent.

    New Accounting Pronouncements: The Company adopted in 2003 the following new accounting pronouncements.

    In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46 (“FIN No. 46”), “Consolidation of Variable Interest Entities”, which addresses consolidation by business enterprises of variable interest entities. FIN No. 46 applies to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. In October 2003, the FASB announced that the effective date of FIN No. 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for variable interest entities created prior to February 1, 2003. The requirements of FIN No. 46 have not had a material impact on the Company’s financial statements.

    On July 1, 2003, the Company adopted SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. SFAS No. 149 was effective for contracts entered into or modified after June 30, 2003, and did not have a material impact on the Company’s financial statements.

    On July 1, 2003, the Company adopted SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. This statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. In accordance with the standard, a financial instrument that embodies an obligation for the issuer is required to be classified as a liability (or an asset in some circumstances). This statement was effective for financial instruments entered into or modified after May 31, 2003, and otherwise was effective July 1, 2003, and did not have a material impact on the Company’s financial statements.

    In 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN No. 45) which requires additional disclosures by a guarantor about its obligations under certain guarantees that it has issued. FIN No. 45 also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The most significant instruments impacted for the Company are financial and performance standby letters of credit. The accounting requirements of FIN No. 45 were effective for the Company on January 1, 2003, on a prospective basis, and did not have a material impact on the Company’s results of operations, financial position or cash flows.

Note B

Cash, Dividend and Loan Restrictions

    In the normal course of business, the Company and its subsidiary 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:

    The Company’s subsidiary bank is required to maintain average reserve balances with the Federal Reserve Bank. The average amount of those reserve balances for the year ended 2003 was approximately $4,761,000, and $3,677,000 for 2002.

    Under Federal Reserve regulation, the Company’s subsidiary 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 December 31, 2003, the maximum amount available for transfer from the subsidiary bank to the Company in the form of loans approximated 19 percent of consolidated net assets.

    The approval of the Comptroller of the Currency is required if the total of all dividends declared by a national bank in any calendar year exceeds the bank’s profits, as defined, for that year combined with its retained net profits for the preceding two calendar years. Under this restriction the Company’s subsidiary bank can distribute as dividends to the Company in 2003, without prior approval of the Comptroller of the Currency, approximately $16,300,000.

45

Note C

Securities

    The amortized cost and fair value of securities at December 31, 2003, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties.

Proceeds from sales of securities during 2003 were $141,771,000 with gross gains of $1,223,000 and gross losses of $401,000. During 2002, proceeds from sales of securities were $38,131,000 with gross gains of $517,000 and gross losses of $60,000. During 2001, proceeds from sales of securities were $154,018,000 with gross gains of $1,053,000 and gross losses of $138,000.

	Held for Investment				Held for Sale
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Due in less than one year	$	855	$	867	$	1,002	$	1,002
Due after one year through five years		5,434		5,405		-		-
Due after ten years		992		1,077		-		-
		7,281		7,349		1,002		1,002
Mortgage backed securities		73,585		72,392		480,775		477,018
No contractual maturity						6,203		6,203
	$	80,866	$	79,741	$	487,980	$	484,223

    Gross losses included in earnings from transfers of securities held for sale to the trading category totaled $1,994,000 for 2003.

    Securities with a carrying value of $214,454,000 and fair value of $214,578,000 at December 31, 2003, were pledged as collateral for repurchase agreements, United States Treasury deposits, other public deposits and trust deposits.

		December 31, 2003
		Gross		Gross		Gross
		Amortized		Unrealized		Unrealized			Fair
(In thousands)		Cost		Gains		Losses			Value
SECURITIES HELD FOR SALE
	U.S. Treasury and U.S. Government agencies	$	1,002	$	–	$	–		$	1,002
	Mortgage backed securities		480,775		663		(4,420	)		477,018
	Other securities		6,203		–		–			6,203
		$	487,980	$	663	$	(4,420	)	$	484,223
SECURITIES HELD FOR INVESTMENT
	U.S. Treasury and U.S. Government agencies		$ 4,998	$	–	$	(65	)		$ 4,933
	Mortgage backed securities		73,585		140		(1,333	)		72,392
	Obligations of states and political subdivisions		2,283		133		–			2,416
			$80,866	$	273	$	(1,398	)		$79,741

		December 31, 2002
		Gross		Gross		Gross
		Amortized		Unrealized		Unrealized			Fair
(In thousands)		Cost		Gains		Losses			Value
SECURITIES HELD FOR SALE
	U.S. Treasury and U.S. Government agencies	$	2,493	$	15	$	–		$	2,508
	Mortgage backed securities		455,314		2,452		(1,111	)		456,655
	Other securities		7,138		–		(23	)		7,115
		$	464,945	$	2,467	$	(1,134	)	$	466,278

46

2003 SEACOAST BANKING CORPORATION OF FLORIDA

		December 31, 2002
		Gross		Gross		Gross
		Amortized		Unrealized		Unrealized			Fair
(In thousands)		Cost		Gains		Losses			Value
SECURITIES HELD FOR INVESTMENT
	U.S. Treasury and U.S. Government agencies
	Mortgage backed securities		$28,555	$	800	$	(10	)	$	29,345
	Obligations of states and political subdivisions		3,626		197					3,823
			$32,181	$	997	$	(10	)	$	33,168

    All of the Company’s securities which had unrealized losses at December 31, 2003 were obligations of the U.S. Treasury, U.S. Government agencies or AAA rated mortgage related securities. All principal will be repaid at par value at the date of maturity. The fair values of the Company’s securities are based on discounted cash flow models which utilize assumed lives and yields which will vary over economic cycles producing both unrealized losses and gains.

Temporarily Impaired Securities

		December 31, 2003
		Less than 12 months					12 months or longer				Total
		Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
(In thousands)		Value		Losses			Value		Losses		Value		Losses
U.S. Treasury and U.S. Government agencies		$	4,933	$	(65	)	$	–	$	–	$	4,933	$	(65	)
	Mortgage backed securities		385,642		(5,577	)		13,107		(176)		398,749		(5,753	)
Total temporarily impaired securities		$	390,575	$	(5,642	)	$	13,107	$	(176)	$	403,682	$	(5,818	)

Note D

Loans

      An analysis of loans at December 31 are summarized as follows:

(In thousands)	2003		2002
Real estate mortgage	$	470,391	$	478,123
Construction and land development		107,315		77,909
Commercial and financial		46,310		40,491
Installment loans to individuals		84,512		91,307
Other		264		331
TOTAL	$	708,792	$	688,161

    One of the sources of the Company’s business is loans to directors and executive officers. These loans are made on the same terms as all other loans and do not involve more than normal risk of collectability. The aggregate dollar amount of these loans was approximately $3,397,000 and $4,010,000 at December 31, 2003 and 2002, respectively. During 2003, $482,000 of new loans were made and repayments totaled $1,095,000.

Note E

Impaired Loans and Allowance for Loan Losses

    At December 31, 2003 and 2002, the Company did not have a recorded investment in impaired loans or related valuation allowance. When recorded, valuation allowances are included in the allowance for loan losses. The average recorded investment in impaired loans for the years ended December 31, 2003 and 2002 was $734,000 and zero, respectively.

    Interest payments received on impaired loans are recorded as interest income unless collection of the

47

remaining recorded investment is doubtful at which time payments received are recorded as reductions to principal. The Company did not record any interest income on impaired loans for the years ended December 31, 2003 and 2002.

    Transactions in the allowance for loan losses for the three years ended December 31, are summarized as follows:

(In thousands)	2003			2002			2001
Balance, beginning of year	$	6,826		$	7,034		$	7,218
Provision charged to operating expense		0			0			0
Charge offs		(1,053	)		(530	)		(455	)
Recoveries		387			322			271
Balance, end of year	$	6,160		$	6,826		$	7,034

Note F

Bank Premises and Equipment

      Bank premises and equipment are summarized as follows:

			Accumulated		Net
			Depreciation &		Carrying
(In thousands)	Cost		Amortization		Value
December 31, 2003
Premises (including land of $3,867)	$	23,997	$	10,150	$	13,847
Furniture and equipment		12,221		9,221		3,000
	$	36,218	$	19,371	$	16,847
December 31, 2002
Premises (including land of $2,967)	$	22,761	$	9,509	$	13,252
Furniture and equipment		12,390		9,597		2,793
	$	35,151	$	19,106	$	16,045

Note G

Borrowings

    All of the Company’s short-term borrowings were comprised of federal funds purchased and securities sold under agreements to repurchase with maturities primarily from overnight to seven days:

(In thousands)	2003			2002			2001
Maximum amount outstanding at any month end	$	99,462		$	102,967		$	71,704
Weighted average interest rate at end of year		0.90	%		1.17	%		1.19	%
Average amount outstanding	$	64,994		$	55,015		$	51,603
Weighted average interest rate		0.80	%		1.04	%		2.86	%

    On July 31, 1998, the Company acquired $15,000,000 in other borrowings from the Federal Home Loan Bank (FHLB), principal payable on November 12, 2009 with interest payable quarterly at a fixed rate of 6.10%. The debt is subject to early termination on November 12, 2004 in accordance with the terms of the agreement. On March 9, 2000, the Company acquired $25,000,000 in additional borrowings from FHLB, principal payable on March 9, 2002 with interest payable quarterly at a fixed rate of 6.99%; the borrowing was restructured to a 3-year term on December 1, 2000 at 6.55% and matured at December 1, 2003. On Janu-

48

2003 SEACOAST BANKING CORPORATION OF FLORIDA

ary 30, 2003, the Company acquired $25,000,000 from the FHLB, principal payable on January 30, 2006 with interest payable quarterly; the borrowing is a floating rate agreement that resets quarterly based on the London Interbank Offered Rate (LIBOR).

    The FHLB debt is secured by residential mortgage loans totaling $40,000,000.

    The Company’s subsidiary bank has unused lines of credit of $145,850,000 at December 31, 2003. The Company has an unused revolving line of credit totaling $5,000,000 which, if drawn upon, may be used for general corporate purposes, including but not limited to the capital needs of the Company and its subsidiaries and the repurchase of Common Stock.

Note H

Employee Benefits

    The Company’s profit sharing plan which covers substantially all employees after one year of service includes a matching benefit feature for employees electing to defer the elective portion of their profit sharing compensation. In addition, amounts of compensation contributed by employees are matched on a percentage basis under the plan. The profit sharing contributions charged to operations were $1,259,000 in 2003, $1,377,000 in 2002, and $1,282,000 in 2001.

    The Company’s stock option and stock appreciation rights plans were approved by the Company’s shareholders on April 25, 1991, April 25, 1996, and April 20, 2000. The number of shares of common stock that may be granted pursuant to the 1991 and 1996 plans shall not exceed 990,000 shares for each plan and pursuant to the 2000 plan shall not exceed 1,320,000 shares. The Company has granted options on 826,000 shares and 931,000 shares for the 1991 and 1996 plans, respectively, through December 31, 2003. Under the 2000 plan the Company granted options on 216,000 shares and issued 145,100 shares for restricted stock awards during 2003. Under the plans, the option exercise price equals the common stock’s market price on the date of grant. All options issued prior to December 31, 2002 have a vesting period of four years and a contractual life of ten years. All options issued in 2003 have a vesting period of five years and a contractual life of ten years. On approximately one-half of the restricted stock awards the restriction expiration is dependent upon the Company achieving minimum earnings per share growth during a five-year vesting period. The following table presents a summary of stock option activity for 2001, 2002 and 2003:

		Number			Weighted Average		Option Price		Weighted Average
		of Shares			Fair Value		Per Share		Exercise Price
Options outstanding, January 1, 2001			993,300				$	3.56– 8.79	$	7.49
	Exercised		(178,200	)				5.30– 8.79		6.65
	Cancelled		(13,200	)				7.73– 8.79		8.42
Options outstanding, December 31, 2001			801,900					3.56– 8.79		7.65
	Exercised		(75,900	)				3.56– 8.79		7.08
Options outstanding, December 31, 2002			726,000					5.30– 8.79		7.73
	Exercised		(146,000	)				5.38– 8.79		6.10
	Granted		216,000		$	4.08		17.08		17.08
Options outstanding, December 31, 2003			796,000				$	5.30–17.08	$	10.56
Options exercisable, December 31, 2003			572,000				$	5.30– 8.79	$	8.14

49

The following table summarizes information about stock options outstanding at December 31, 2003:

Options Outstanding						Options Exercisable
				Weighted
				Average		Weighted				Weighted
		Number		Remaining		Average		Number		Average
Exercise		of Shares		Contractual		Exercise		of Shares		Exercise
Prices		Outstanding		Life in Years		Price		Exercisable		Price
$	5.30		34,000		1.17	$	5.30		34,000	$	5.30
	6.59		61,000		2.50		6.59		61,000		6.59
	7.46		13,000		6.22		7.46		9,000		7.46
	7.73		99,000		3.58		7.73		99,000		7.73
	8.22		10,000		6.62		8.22		6,000		8.22
	8.79		363,000		4.54		8.79		363,000		8.79
	17.08		216,000		9.88		17.08		0		17.08
			796,000		5.62	$	10.56		572,000	$	8.14

Note I

Lease Commitments

    The Company is obligated under various noncancelable operating leases for equipment, buildings and land. At December 31, 2003, future minimum lease payments under leases with initial or remaining terms in excess of one year are as follows:

(In thousands)
2004	$	1,940
2005		2,009
2006		2,005
2007		1,770
2008		1,359
Thereafter		16,798
	$	25,881

    Rent expense charged to operations was $1,907,000 in 2003, $1,613,000 in 2002, and $1,645,000 in 2001. Certain leases contain provisions for renewal and change with the consumer price index.

    Certain property is leased from related parties of the Company. Lease payments to these individuals were $270,000 in 2003, $263,000 in 2002, and $260,000 in 2001.

Note J

Income Taxes

    The provision for income taxes including tax effects of security transaction gains (losses) (2003 – ($452,000); 2002 – $176,000; 2001 – $353,000) are as follows:

		Year Ended December 31
(In thousands)		2003			2002			2001
Current
	Federal	$	7,512		$	8,746		$	8,034
	State		9			1,380			1,335
Deferred
	Federal		(95	)		(379	)		(34	)
	State		(15	)		(70	)		(9	)
TOTAL		$	7,411		$	9,677		$	9,326

50

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Temporary differences in the recognition of revenue and expense for tax and financial reporting purposes resulted in deferred income taxes as follows:

	Year Ended December 31
(Dollars in thousands)	2003			2002			2001
Depreciation	$	60		$	(100	)	$	(155	)
Allowance for loan losses		257			80			71
Interest and fee income		(229	)		(420	)		(428	)
Other real estate owned		(32	)		0			3
Other		(166	)		(9	)		466
TOTAL	$	(110	)	$	(449	)	$	(43	)

    The difference between the total expected tax expense (computed by applying the U.S. Federal tax rate of 35% to pretax income in 2003, 2002 and 2001) and the reported income tax expense relating to income before income taxes is as follows:

		Year Ended December 31
(In thousands)		2003			2002			2001
Tax rate applied to income before income taxes		$	7,499		$	8,737		$	8,210
Increase (decrease) resulting from the effects of:
	Tax-exempt interest on obligations of states and political subdivisions		(93	)		(117	)		(136	)
	State income taxes		2			(459	)		(464	)
	Dividend exclusion		0			0			(7	)
	Amortization of intangibles		53			88			193
	Other		(44	)		118			204
Federal tax provision			7,417			8,367			8,000
State tax provision			(6	)		1,310			1,326
Applicable income taxes		$	7,411		$	9,677		$	9,326

      The net deferred tax assets (liabilities) are comprised of the following:

		December 31
(In thousands)		2003			2002
Allowance for loan losses		$	2,044		$	2,301
Interest and fee income			181			0
Net unrealized securities losses			1,450			0
Cash flow interest rate swaps			168			0
Other			152			0
	Gross deferred tax assets		3,995			2,301
Depreciation			(330	)		(270	)
Interest and fee income			0			(48	)
Net unrealized securities gains			0			(513	)
Other			0			(46	)
	Gross deferred tax liabilities		(330	)		(877	)
Deferred tax asset valuation allowance			0			0
Net deferred tax assets		$	3,665		$	1,424

51

      The tax effects of unrealized gains (losses) for securities and cash flow interest rate swaps included in the calculation of comprehensive income as presented in the Statements of Shareholder’s Equity for the three years ended December 31, are as follows:

(In thousands)
2003	$	(2,131	)
2002		(358	)
2001		2,573

Note K

Noninterest Income and Expenses

      Details of noninterest income and expenses follow:

		Year Ended December 31
(In thousands)		2003			2002		2001
Noninterest income
	Service charges on deposit accounts	$	4,907		$	5,105	$	5,110
	Trust fees		2,043			2,177		2,497
	Mortgage banking fees		4,423			3,364		2,456
	Brokerage commissions and fees		1,863			2,045		1,805
	Marine finance fees		3,161			1,408		743
	Debit card income		1,169			980		735
	Other deposit based EFT fees		441			376		312
	Other		1,280			1,419		1,450
			19,287			16,874		15,108
	Securities gains (losses)		(1,172	)		457		915
TOTAL		$	18,115		$	17,331	$	16,023
Noninterest expenses
	Salaries and wages	$	16,641		$	15,761	$	14,776
	Employee benefits		4,595			4,304		3,866
	Outsourced data processing costs		5,265			4,795		4,468
	Occupancy		3,956			3,365		3,358
	Furniture and equipment		1,739			1,989		2,190
	Marketing		2,119			2,036		1,908
	Legal and professional fees		1,336			1,538		1,230
	FDIC assessments		163			173		177
	Amortization of intangibles		150			252		552
	Other		6,499			5,577		5,535
TOTAL		$	42,463		$	39,790	$	38,060

Note L

Shareholders’ Equity

    The Company has reserved 330,000 common shares for issuance in connection with an employee stock purchase plan and 495,000 common shares for issuance in connection with an employee profit sharing plan. At December 31, 2003 an aggregate of 116,279 shares and 172,949 shares, respectively, have been issued as a result of employee participation in these plans.

    In 2002 the Company’s shareholders approved a capital simplification and eliminated its Class B Common Stock which was converted on a one-for-one basis into Class A Common Stock. In addition, the Class A Common Stock liquidation preference was eliminated.

52

2003 SEACOAST BANKING CORPORATION OF FLORIDA

    Holders of common stock are entitled to one vote per share on all matters presented to shareholders as provided in the Company’s Articles of Incorporation.

Required Regulatory Capital

												Minimum To Be Well
							Minimum for					Capitalized Under
							Capital Adequacy					Prompt Corrective
							Purposes					Action Provisions
(Dollars in thousands)		Amount		Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2003:
	Total Capital (to risk-weighted assets)	$	110,162		13.80	%	$	63,788		>8.00	%	$	79,735		>10.00	%
	Tier 1 Capital (to risk-weighted assets)		104,002		13.04			31,894		>4.00			47,841		>  6.00
	Tier 1 Capital (to adjusted average assets)		104,002		7.81			53,246		>4.00			66,558		>  5.00
At December 31, 2002:
	Total Capital (to risk-weighted assets)	$	103,902		13.77	%	$	60,327		>8.00	%	$	75,405		>10.00	%
	Tier 1 Capital (to risk-weighted assets)		97,076		12.87			30,164		>4.00			45,243		>  6.00
	Tier 1 Capital (to adjusted average assets)		97,076		7.99			48,599		>4.00			60,748		>  5.00

    The above ratios are comparable for the Company’s wholly owned subsidiary.

    The Company repurchases its common shares in an ongoing effort to manage its capital position and to fund shares used for the Company’s stock option and stock purchase plans.

    The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

    Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). Management believes, as of December 31, 2003, that the Company meets all capital adequacy requirements to which it is subject.

    The most recent notification from the Company’s regulator categorized the Company as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth above. There are no conditions or events since that notification that management believes have changed the institution’s category.

53

Note M

Seacoast Banking Corporation of Florida

(Parent Company Only) Financial Information

Balance Sheets

		December 31
(In thousands)		2003		2002
Assets
	Cash	$	10	$	10
	Securities purchased under agreement to resell with subsidiary bank, maturing within 30 days		5,029		2,105
	Investment in subsidiaries		98,816		98,390
	Other assets		283		463
		$	104,138	$	100,968
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities		$	54	$	221
Shareholders’ equity			104,084		100,747
		$	104,138	$	100,968

Statements of Income

			Year Ended December 31
(In thousands)			2003		2002		2001
Income
	Dividends
		Subsidiary	$	10,520	$	9,150	$	8,700
		Other		0		0		27
	Interest/other			29		25		70
				10,549		9,175		8,797
Expenses				529		919		706
Income before income tax credit and equity in undistributed income of subsidiaries				10,020		8,256		8,091
Income tax credit				175		313		242
Income before equity in undistributed income of subsidiaries				10,195		8,569		8,333
Equity in undistributed income of subsidiaries				3,821		6,717		5,797
Net income			$	14,016	$	15,286	$	14,130

54

2003 SEACOAST BANKING CORPORATION OF FLORIDA

Statements of Cash Flows

			Year Ended December 31
(In thousands)			2003			2002			2001
Increase (Decrease) in Cash
Cash flows from operating activities
	Interest received		$	29		$	25		$	57
	Dividends received			10,520			9,150			8,730
	Income taxes received			420			335			264
	Cash paid to suppliers			(686	)		(1,000	)		(814	)
Net cash provided by operating activities				10,283			8,510			8,237
Cash flows from investing activities
	Decrease (increase) in securities purchased under agreement to resell, maturing in 30 days			(2,924	)		(1,066	)		(254	)
	Maturities of securities held for sale			0			0			500
Net cash provided by (used in) investing activities				(2,924	)		(1,066	)		246
Cash flows from financing activities
	Exercise of stock options			899			653			1,281
	Treasury stock purchased			(1,172	)		(2,391	)		(4,457	)
	Dividends paid			(7,086	)		(5,706	)		(5,307	)
Net cash used in financing activities				(7,359	)		(7,444	)		(8,483	)
Net change in cash				0			0			0
Cash at beginning of year				10			10			10
Cash at end of year			$	10		$	10		$	10
RECONCILIATION OF NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES
Net income			$	14,016		$	15,286		$	14,130
Adjustments to reconcile net income to net cash provided by operating activities:
	Equity in undistributed income of subsidiaries			(3,821	)		(6,717	)		(5,797	)
		Other, net		88			(59	)		(96	)
Net cash provided by operating activities			$	10,283		$	8,510		$	8,237

Note N

Contingent Liabilities and Commitments with Off-Balance Sheet Risk

    The Company and its subsidiary bank, because of the nature of their business, are at all times subject to numerous legal actions, threatened or filed. Among these, the Company has learned that claims may be filed against its bank subsidiary with respect to a deposit account that allegedly was utilized by a former customer to improperly cash checks (the “Check Claims”). The Company’s management has been reviewing the Check Claims with its counsel and its insurers, and while the ultimate outcome of the Check Claims cannot be predicted and no possible range of loss can be estimated, management presently believes that none of the legal proceedings to which it is a party, including the Check Claims, are likely to have a materially adverse effect on the Company’s consolidated financial condition, or operating results or cash flows, although no assurance can be given with respect to the ultimate outcome of any such claim or litigation.

    The Company’s subsidiary bank is a party to financial instruments with off balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit.

    The subsidiary bank’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contract or notional amount of those instruments. The subsidiary bank uses the same credit policies in making commitments and standby letters of credit as it does for on balance sheet instruments.

55

    Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The subsidiary bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, equipment, and commercial and residential real estate. Of the $168,448,000 outstanding at December 31, 2003, $75,580,000 is secured by 1-4 family residential properties.

    Standby letters of credit are conditional commitments issued by the subsidiary bank to guarantee the performance of a customer to a third party. These instruments have fixed termination dates and most end without being drawn; therefore, they do not represent a significant liquidation risk. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The subsidiary bank holds collateral supporting these commitments for which collateral is deemed necessary. The extent of collateral held for secured standby letters of credit at December 31, 2003 and 2002 amounted to $11,713,000 and $4,491,000, respectively.

		December 31
(In thousands)		2003		2002
Contract or Notional Amount
Financial instruments whose contract amounts represent credit risk:
	Commitments to extend credit	$	168,448	$	135,685
Standby letters of credit and financial guarantees written:
	Secured		4,960		1,439
	Unsecured		303		621

Note O

Mortgage Servicing Rights, Net

    The fair value of capitalized mortgage servicing rights was estimated using a discounted cash flow model. Prepayment speed projections and market assumptions, regarding discount rate, servicing cost, escrow earnings credits, payment float, and advance cost interest rates were determined from guidelines provided by a third-party mortgage servicing rights broker.

    The following is an analysis of the mortgage servicing rights, net at December 31:

(In thousands)		2003			2002
Unamortized balance at beginning of year		$	857		$	1,208
Origination of mortgage servicing rights			0			57
Amortization			(491	)		(408	)
			366			857
Valuation allowance:
Beginning balance			(258	)		(158	)
Deletion (addition) recorded to operations			136			(100	)
			(122	)		(258	)
	TOTAL	$	244		$	599

56

2003 SEACOAST BANKING CORPORATION OF FLORIDA

	December 31
(In thousands)	2003		2002
Unpaid principal balance of serviced loans for which mortgage servicing rights are capitalized	$	38,882	$	82,660
Unpaid principal balance of serviced loans for which there are no servicing rights capitalized	$	8,156	$	13,582

Note P

Supplemental Disclosures for Consolidated Statements of Cash Flows

    Reconciliation of Net income to Net Cash Provided by Operating Activities for three years ended:

		Year Ended December 31
(In thousands)		2003			2002			2001
Net income		$	14,016		$	15,286		$	14,130
Adjustments to reconcile net income to net cash provided by operating activities
	Depreciation and amortization		10,718			8,187			3,565
	Trading securities activity		74,648			0			0
	Change in loans sold and available for sale, net		8,411			5,321			(17,105	)
	Credit for deferred taxes		(110	)		(449	)		(43	)
	Loss (gain) on sale of securities		1,172			(457	)		(915	)
	Gain on sale of loans		(79	)		0			0
	Loss (gain) on sale and write down of foreclosed assets		63			(23	)		10
	Loss on disposition of equipment		25			8			7
	Change in interest receivable		824			21			580
	Change in interest payable		(179	)		(348	)		(243	)
	Change in prepaid expenses		421			257			172
	Change in accrued taxes		57			723			(382	)
	Change in other assets		5,138			(7,349	)		(485	)
	Change in other liabilities		(1,296	)		1,310			815
	TOTAL ADJUSTMENTS		99,813			7,201			(14,024	)
Net cash provided by operating activities		$	113,829		$	22,487		$	106
Supplemental disclosure of non cash investing activities:
Market value adjustment to securities		$	(5,110	)	$	(1,008	)	$	5,849
Transfers from loans to other real estate owned			2,087			82			88
Transfers from securities held for sale to trading securities			74,905			0			0

57

Note Q

Fair Value of Financial Instruments

    The Company is required to disclose the estimated fair value of its financial instruments. These disclosures do not attempt to estimate or represent the Company’s fair value as a whole. The disclosure excludes assets and liabilities that are not financial instruments as well as the significant unrecognized value associated with core deposits.

    Fair value amounts disclosed represent point-in-time estimates that may change in subsequent reporting periods due to market conditions or other factors. Estimated fair value amounts in theory represent the amounts at which financial instruments could be exchanged or settled in a current transaction between willing parties. In practice, however, this may not be the case due to inherent limitations in the methodologies and assumptions used to estimate fair value. For example, quoted market prices may not be realized because the financial instrument may be traded in a market that lacks liquidity; or a fair value derived using a discounted cash flow approach may not be the amount realized because of the subjectivity involved in selecting the underlying assumptions, such as projecting cash flows or selecting a discount rate. The fair value amount also may not be realized because it ignores transaction costs and does not include potential tax effects. The Company does not plan to dispose of, either through sale or settlement, the majority of its financial instruments at these estimated fair values.

		At December 31
		2003				2002
		Carrying		Fair		Carrying		Fair
(In thousands)		Amount		Value		Amount		Value
Financial Assets
	Cash and cash equivalents	$	45,183	$	45,183	$	49,822	$	49,822
	Securities		565,089		563,964		498,459		499,446
	Loans, net		702,632		710,373		681,335		693,482
	Loans available for sale		5,403		5,514		13,814		14,021
	Derivative product assets		213		213		0		0
Financial Liabilities Deposits			1,129,642		1,134,370		1,030,540		1,038,418
	Borrowings		114,158		116,034		142,967		146,384
	Derivative product liabilities		439		439		0		0

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

    Cash and Cash Equivalents: The carrying amount was used as a reasonable estimate of fair value.

    Securities: The fair value of U.S. Treasury and U.S. Government agency, mutual fund and mortgage backed securities are estimated based on bid prices published in financial newspapers or bid quotations received from securities dealers.

    The fair value of many state and municipal securities are not readily available through market sources, so fair value estimates are based on quoted market price or prices of similar instruments.

    Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, mortgage, etc. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories.

    The fair value of loans, except residential mortgage, is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. For residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusting for prepayment assumptions using discount rates based on secondary market sources adjusted to reflect differences in servicing and credit costs.

    Loans Available for Sale: Fair values are based upon estimated values to be received from independent third party purchasers.

    Deposit Liabilities: The fair value of demand deposits, savings accounts and money market deposits is the amount payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

    Borrowings: The fair value of floating rate borrowings is the amount payable on demand at the reporting date. The fair value of fixed rate borrowings is estimated using

58

2003 SEACOAST BANKING CORPORATION OF FLORIDA

the rates currently offered for borrowings of similar remaining maturities.

    Derivative Product Assets and Liabilities: Quoted market prices or valuation models that incorporate current market data inputs are used to estimate the fair value of derivative product assets and liabilities.

Note R

Earnings Per Share

    Basic earnings per common share were computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share were determined by including assumptions of stock option conversions.

		Year Ended December 31
(Dollars in thousands,		Net				Per Share
except per share data)		Income		Shares		Amount
2003
Basic Earnings Per Share
	Income available to common shareholders	$	14,016		15,334,765	$	0.91
	Options issued to executives (see Note H)				332,250
Diluted Earnings Per Share
	Income available to common shareholders plus assumed conversions	$	14,016		15,667,015	$	0.89
2002
Basic Earnings Per Share
	Income available to common shareholders	$	15,286		15,350,353	$	1.00
	Options issued to executives (see Note H)				367,500
Diluted Earnings Per Share
	Income available to common shareholders plus assumed conversions	$	15,286		15,717,853	$	0.97
2001
Basic Earnings Per Share
	Income available to common shareholders	$	14,130		15,521,265	$	0.91
	Options issued to executives (see Note H)				235,717
Diluted Earnings Per Share
	Income available to common shareholders plus assumed conversions	$	14,130		15,756,982	$	0.90

59

Note S

Goodwill Amortization Transition Disclosures

    Reported net income for years ended December 31, 2003, 2002 and 2001 without goodwill amortization expense were as follows:

(In thousands, except per share data)	2003		2002		2001
Reported net income	$	14,016	$	15,286	$	14,130
Goodwill amortization (net of tax)		0		0		184
Adjusted net income	$	14,016	$	15,286	$	14,314
Net income per share Common Stock
Diluted as reported	$	0.89	$	0.97	$	0.90
Goodwill (net of tax)		0.00		0.00		0.01
Adjusted net income	$	0.89	$	0.97	$	0.91
Basic as reported	$	0.91	$	1.00	$	0.91
Goodwill (net of tax)		0.00		0.00		0.01
Adjusted net income	$	0.91	$	1.00	$	0.92

Note T

Derivative Financial Instruments

    Under SFAS 133, the Company may designate a derivative as either a hedge of the fair value of a recognized fixed rate asset or liability or an unrecognized firm commitment (“fair value” hedge), or a hedge of a forecasted transaction or of the variability of future cash flows of a floating rate asset or liability (“cash flow” hedge). All derivatives are recorded as assets or liabilities on the balance sheet at their respective fair values with unrealized gains and losses recorded either in other comprehensive income or in the results of operations, depending on the purpose for which the derivative is held.

    Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded as other fee income in the results of operations. To the extent of the effectiveness of a hedge, changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge are recorded in other comprehensive income. For all hedge relationships, ineffectiveness resulting from differences between the changes in fair value or cash flows of the hedged item and changes in fair value of the derivative are recognized as other fee income in the results of operations. The net interest settlement on derivatives designated as fair value or cash flow hedges is treated as an adjustment to the interest income or interest expense of the hedged assets or liabilities.

    At inception of a hedge transaction, the Company formally documents the hedge relationship and the risk management objective and strategy for undertaking the hedge. This process includes identification of the hedging instrument, hedged item, risk being hedged and the methodology for measuring ineffectiveness. In addition, the Company assesses, both at the inception of the hedge and on an ongoing quarterly basis, whether the derivative used in the hedging transaction has been highly effective in offsetting changes in fair value or cash flows of the hedged item, and whether the derivative is expected to continue to be highly effective.

    Derivative financial instruments, such as interest rate swaps and forward contracts are valued at quoted market prices or using the discounted cash flow method. The estimated fair value and carrying value of the Company’s interest rate swaps and financial derivatives, utilized for asset and liability management purposes, were included

60

2003 SEACOAST BANKING CORPORATION OF FLORIDA

in the consolidated balance sheet at December 31, 2003, as follows:

		Carrying		Fair
(In thousands)		Amount		Value
Derivative Product Assets
	Interest rate swap which does qualify for hedge accounting	$	192	$	192
	Derivative contracts which do not qualify for hedge accounting		21		21
Derivative Product Liabilities
	Cash flow interest rate swap which does qualify for hedge accounting		439		439

    Changes in fair value of derivative financial instruments had no effect on net income. A total of $270,000 was recorded to other comprehensive income, net of taxes of $169,000 for the twelve months ended December 31, 2003.

61

Notes

SEACOAST BANKING CORPORATION OF FLORIDA EX-21 5 g86414a1exv21.htm SUBSIDIARIES

EXHIBIT 21

LIST OF SUBSIDIARIES

     The Company had the following subsidiaries as of the date of this report:

NAME		INCORPORATED
1.	First National Bank & Trust Company of the Treasure Coast	United States
2.	FNB Brokerage Services, Inc.	Florida
3.	FNB Insurance Services, Inc.	Florida
4.	South Branch Building, Inc.	Florida
5.	Big O RV Resort, Inc.	Florida
6.	FNB Property Holdings, Inc.	Delaware
7.	FNB RE Services, Inc.	Florida

EX-21

Subsidiaries

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 33-61925, 33-46504, 33-25627, 33-22846, 333-91859, 333-70399 and 333-49972) of Seacoast Banking Corporation of Florida of our report dated February 25, 2004 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K.

/s/PricewaterhouseCoopers LLP

West Palm Beach, Florida
March 10, 2004

EX-23.2

EXHIBIT 23.2

NOTICE OF INABILITY TO OBTAIN CONSENT FROM ARTHUR ANDERSEN LLP

     The financial statements of Seacoast Banking Corporation of Florida as of December 31, 2001, and for years then ended, included in this annual report on Form 10-K have been audited by Arthur Andersen, LLP, independent public accountants. Arthur Andersen LLP has since ceased operations. Arthur Andersen LLP has not reissued its report on those financial statements in connection with this annual report on Form 10-K. In addition, after reasonable efforts, and in reliance upon Rule 437a under the Securities Act of 1933, we have not been able to obtain the consent of Arthur Andersen LLP with respect to the incorporation by reference of such report in any of our registration statements or prospectuses. Because Arthur Andersen LLP has not consented to the inclusion of such report in any of our registration statements or prospectuses, purchasers under such prospectuses will not be able to recover against Arthur Andersen LLP under Section 11(a) of the Securities Act for any untrue statements of a material fact contained in the financial statements audited by Arthur Andersen LLP or for any omissions to state a material fact required to be stated therein.

EX-31.1

EXHIBIT 31.1

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Dennis S. Hudson, III, certify that:

1.	I have reviewed this annual report on Form 10-K of Seacoast Banking Corporation of Florida;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(6)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	[intentionally left blank]
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially effect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2004

/s/ Dennis S. Hudson, III

Dennis S. Hudson, III
President & Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, William R. Hahl, certify that:

1.	I have reviewed this annual report on Form 10-K of Seacoast Banking Corporation of Florida;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(6)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	[intentionally left blank]
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially effect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2004

/s/ William R. Hahl

William R. Hahl
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

STATEMENT OF CHIEF EXECUTIVE OFFICER OF
SEACOAST BANKING CORPORATION OF FLORIDA
PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with Seacoast Banking Corporation of Florida (“Company”) Annual Report on Form 10-K for the period ended December 31, 2003 (“Report”), I, Dennis S. Hudson, III , President and Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of The Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Dennis S. Hudson, III

Dennis S. Hudson, III

President and Chief Executive Officer

     A signed original of this written statement required by § 906 of The Sarbanes-Oxley Act of 2002, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by § 906 of The Sarbanes-Oxley Act of 2002, has been provided to the Seacoast Banking Corporation of Florida and will be retained by Seacoast Banking Corporation of Florida and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

STATEMENT OF CHIEF FINANCIAL OFFICER OF
SEACOAST BANKING CORPORATION OF FLORIDA
PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with Seacoast Banking Corporation of Florida (“Company”) Annual Report on Form 10-K for the period ended December 31, 2003 (“Report”), I, William R. Hahl, Executive Vice President and Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of The Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William R. Hahl

William R. Hahl

Executive Vice President and

Chief Financial Officer

     A signed original of this written statement required by § 906 of The Sarbanes-Oxley Act of 2002, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by § 906 of The Sarbanes-Oxley Act of 2002, has been provided to the Seacoast Banking Corporation of Florida and will be retained by Seacoast Banking Corporation of Florida and furnished to the Securities and Exchange Commission or its staff upon request.