8-K

8-K – page # of 4

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

______________________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)   July 25, 2006

    SEACOAST BANKING CORPORATION OF FLORIDA

(Exact Name of Registrant as Specified in Charter)

Florida	1-13660	59-2260678
(State or Other Jurisdiction of Incorporation)	(Commission File Number	(IRS Employer 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    

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

8-K – page # of 4

SEACOAST BANKING CORPORATION OF FLORIDA

Item 2.02

Results of Operations and Financial Condition

On July 25, 2006, the Registrant announced its financial results for the second quarter ended June 30, 2006.  

A copy of the press release announcing the Registrant’s results for the second quarter ended June 30, 2006 is attached hereto as Exhibit 99.1 and incorporated herein by reference.  This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, 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 to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any 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,” “point to,” “project,” “could,” “intend” or other similar words and expressions of the future.  These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest sensitive ass ets and liabilities; interest rate risks and sensitivities; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.  The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of the acquired institution’s customers by competitors; as well as the difficulties and risks inherent with entering new markets.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2005 under “Special Cautionary Notice Regarding Forward-Looking Statements,” and otherwise in our SEC reports and filings.  Such reports are available upon request from Seacoast, or from the Securities and Exchange Commission, including through the SEC’s Internet website at http://www.sec.gov.

Item 7.01

Regulation FD Disclosure

On July 26, 2006, the Registrant held an investor conference call to discuss its financial results for the second quarter ended June 30, 2006.  A transcript of this conference call is attached hereto as Exhibit 99.2 and incorporated herein by reference.  Also attached as Exhibit 99.3 are charts (available on the Registrant’s website) referenced in the conference call and incorporated herein by reference.  All information included in the transcript and the charts is presented as of June 30, 2006, and the Registrant does not assume any obligation to correct or update said information in the future.

The information in the preceding paragraph, as well as Exhibits 99.2 and 99.3 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in filing under the Securities Act of 1933.

Item 9.01

Financial Statements and Exhibits

(c) The following exhibits are filed herewith:

Exhibit Number	Description
99.1	Press Release dated July 25, 2006 with respect to Seacoast Banking Corporation of Florida’s financial results for the second quarter ended June 30, 2006.
99.2	Transcript of Registrant’s investor conference call held on July 26, 2006 to discuss the Registrant’s financial results for the second quarter and year ended June 30, 2006.
99.3	Data of charts referenced in the conference call held on July 26, 2006 to discuss the Registrant’s financial results for the second quarter and year ended June 30, 2006.

8-K – page # of 4

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SEACOAST BANKING CORPORATION

 OF FLORIDA

(Registrant)

Dated:   

July 28, 2006

By:

/s/ William R. Hahl

Name:

William R. Hahl

Title:  

Executive Vice President &

Chief Financial Officer

EX-99.1

EXHIBIT 99.1

To 8-K dated July 25, 2006

NEWS RELEASE

SEACOAST BANKING CORPORATION OF FLORIDA

Dennis S. Hudson, III

Chairman and Chief Executive Officer

Seacoast Banking Corporation of Florida

(772) 288-6086

William R. Hahl

Executive Vice President/

Chief Financial Officer

 (772) 221-2825

SEACOAST REPORTS RECORD EARNINGS AND AN

IMPROVED NET INTEREST MARGIN

FOR THE SECOND QUARTER 2006

STUART, FL., July 25, 2006 – Seacoast Banking Corporation of Florida (NASDAQ:  SBCF), a bank holding company whose principal subsidiary is Seacoast National Bank, announced earnings and highlights for the quarter ending June 30, 2006, including:

•

Earnings of $0.37 diluted earnings per share (DEPS) in the second quarter of 2006, excluding $0.03 DEPS in merger and other nonrecurring charges, up nine percent linked quarter (reported GAAP earnings of $0.34 DEPS include merger and other nonrecurring charges);

•

Earnings of $0.71 DEPS for the first six months of 2006, excluding $0.03 DEPS in merger and other nonrecurring charges, up 22 percent compared to the $0.58 DEPS for the same period a year ago (reported GAAP earnings of $0.68 DEPS include merger and other nonrecurring charges);

•

Higher net interest margin and increased net interest income;

•

Excellent credit quality;

•

The successful integration of Big Lake Financial Corporation (“Big Lake”) which was acquired on April 1, 2006 and rebranding of Seacoast’s principal subsidiary; and

•

A lower overhead ratio compared to prior quarter.

“The earnings momentum continued in the second quarter driven by higher net interest income, an improved net interest margin and a better mix of earning assets,” said Seacoast Chairman and Chief Executive Officer Dennis S. Hudson, III.  “We are pleased with our progress so far this year and are particularly pleased with the success of our integration with Big Lake this quarter.  Next quarter we will complete our planned systems integration with our Orlando affiliate, Century National Bank.  Upon completion of these important projects we plan to bring greater focus on operating efficiency improvements for the company as a whole.”  

Net income for the first half of 2006 totaled $12,876,000 or $0.71 DEPS, excluding $0.03 DEPS in merger and other nonrecurring charges, up 37.5 percent compared to $9,361,000 or $0.58 DEPS for 2005.  (In 2005, the Company had no merger and other nonrecurring charges in the second quarter or for the first six months.)  Net income (GAAP) for the first half of 2006 totaled $12,300,000 or $0.68 DEPS.  

(continued)

Cash operating earnings for the second quarter of 2006 totaled $7,219,000 or $0.38 DEPS, up $1,761,000 or 32.3 percent over the same period last year and increased $1,276,000 or 21.5 percent from the first quarter 2006.   (The Company believes that cash operating earnings, excluding the impacts of noncash interest rate swap fair value changes, noncash amortization expense, the one-time merger costs related to the Big Lake acquisition, and costs associated with the name change for the Company’s primary banking subsidiary, is a better measurement of the Company’s trend in operating earnings growth.  Net cash payments and receipts from the interest rate swap have been immaterial for the periods presented.)

Taxable equivalent net interest income rose to $24,030,000, or 18.5 percent from first quarter 2006, and grew by 34.5 percent from last year’s second quarter, aided by further net interest margin expansion and strong organic loan growth, as well as the Big Lake acquisition.  

The Big Lake acquisition included loans of $204 million and deposits of $301 million at March 31, 2006.  This, together with strong growth in all markets served by the Company, resulted in total loan growth of $466 million or 40.6 percent since June 30, 2005.  At June 30, 2006, the mix of loans outstanding was: 25 percent residential mortgage loans, 60 percent commercial and commercial real estate loans, and 15 percent consumer loans.

The second quarter’s net interest margin of 4.29 percent represented an increase from the 3.91 percent achieved in the second quarter of 2005, and was higher than the first quarter 2006’s results of 4.16 percent.  Continued disciplined balance sheet management, including modest deposit account rate increases, allowed the margin to climb 25 basis points over the past 6 months.  Overall net interest margin was favorably impacted by approximately 8 basis points in the second quarter as a result of the application of purchase accounting to the fixed rate loan and investment portfolios acquired from Big Lake.

Average noninterest bearing deposits and savings deposits (excluding certificates of deposits) in the second quarter of 2006 increased 17.9 percent from the same quarter a year ago, with a 14.2 percent year-over-year growth in average noninterest bearing deposits.  These growth rates include the impact of the average deposits acquired from Big Lake.  As anticipated, deposit growth slowed in the markets affected by the hurricanes that occurred in late 2004 and 2005, as insurance and other proceeds accumulated by customers were used to repair damages.   Total average organic deposit growth for the prior twelve months increased by 5.0 percent.  Average time deposits (excluding Big Lake) rose 24.6 percent, and increased this component of deposits to 26 percent of total deposits (after acquisition) from 24 percent a yea r ago.  The change in deposit mix and rate increases by the Federal Reserve totaling 200 basis points over the past year impacted the cost of deposits, which increased to 1.99 percent in the current quarter from 1.18 percent in the second quarter 2005.  

Credit quality was outstanding in the second quarter 2006.  Nonperforming assets totaled only $588,000, or 0.04 percent of loans and other real estate, representing a slight increase from the year-end total of $372,000, entirely attributable to the loans acquired from Big Lake.  Second quarter 2006 net loan recoveries totaled $76,000, compared to net loan recoveries of $80,000 for the first quarter of 2006.  The Company has maintained strong and consistent credit quality and low net charge-offs.  After a second quarter provision for loan losses of $280,000 and the acquired Big Lake allowance for loan losses of $2.5 million, the Company’s loan loss allowance totaled $12.2 million or 0.76 percent of total loans.

Noninterest income for the quarter, excluding interest rate swap profit (losses) and securities gains (losses), increased 22.1 percent when compared to the second quarter 2005.   Revenues from service charges on deposit accounts, fees from electronic fund transfers, and mortgage banking fees increased in the second quarter compared to the first quarter in 2006, mostly as a result of the acquisition.  Mortgage banking fees have been impacted by slowing production due to rates increasing and intense competition during the first six months of 2006.  However, the new markets, as a result of the acquisition, improved the overall production for the Company in the second quarter and, more importantly, going forward.  Marine finance fees and fees from wealth management services were higher than the prior year’s second quarter with no current impact from the Big Lake acquisition.  

Noninterest expenses totaled $19.9 million for the second quarter of 2006, a $3.8 million increase from the previous quarter, of which $2.8 million was related to the Big Lake acquisition including $202,000 for deposit base intangible amortization.  Also included in the increase was $304,000 in nonrecurring charges and costs associated with the principal bank subsidiary’s name change during the second quarter of 2006.  Of the $2.0 million increase in salaries and wages from the first quarter, $526,000 was related to higher commissions and incentives associated with costs tied directly to incremental revenue production, and $1.1 million was Big Lake salaries and wages.  The Company’s overhead ratio for the second quarter, excluding merger and other nonrecurring charges, was 61.1 percent, compared to 62.5 percent for the first quarter of 2006.

Seacoast will host a conference call on Wednesday, July 26 at 10:00 a.m. (Eastern Time) to discuss the earnings results and business trends.  Investors may call in (toll-free) by dialing (800) 640-9765 (access code: 15092209; leader: Dennis Hudson).  Charts will be used during the conference call and may be accessed at Seacoast’s website at www.seacoastbanking.net under “Presentations”.  A replay of the call will be available beginning the afternoon of July 26 by dialing (877) 213-9653 (domestic), using the passcode 15092209.

Seacoast Banking Corporation of Florida has over $2.4 billion in assets.  It is one of the largest independent commercial banking organizations in Florida and is headquartered on Florida’s Treasure Coast, one of the wealthiest and fastest growing areas in the nation.

- continued -

- continued -

Cautionary Notice Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about the benefits of the integration and consolidation of Seacoast with Big Lake and Century, including future financial and operating results, cost savings, enhanced revenues, and accretion to reported earnings that may be realized from the merger, as well as statements with respect to Seacoast’s and Big Lake’s plans, objectives, expectations and intentions and other statements that are not historical facts.  Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, 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 to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.  

You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “support”, “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “further”, “point to,” “project,” “could,” “intend” or other similar words and expressions of the future.  These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates on the level and composition of deposits, loan demand, and the value s of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks and sensitivities; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.  The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations; the risks that the businesses of Seacoast, Big Lake and Century will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of Big Lake and Century’s customers by competitors; as well as the difficulties and risks inherent with entering the Central Florida market.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2005 under “Special Cautionary Notice Regarding Forward-Looking Statements,” and otherwise in our SEC reports and filings.  Such reports are available upon request from Seacoast, or from the Securities and Exchange Commission, including through the SEC’s Internet website at http://www.sec.gov.

- continued -

FINANCIAL  HIGHLIGHTS	(Unaudited)
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES
	Three Months Ended				Six Months Ended
(Dollars in thousands,	June 30,				June 30,
except per share data)	2006		2005		2006		2005
Summary of Earnings
Net income (GAAP)	$           6,434	$	5,475		$       12,300	$	9,361
Merger and other nonrecurring charges	576		-		576		-
Earnings, excluding merger and other
nonrecurring charges	7,010		5,474		12,876		9,361
Amortization of core deposit premium	209		144		286		151
Net interest rate swap (profits) losses	-		(162	)	-		174
Cash operating earnings*	$           7,219	$	5,458		$       13,162	$	9,686
Net interest income  (1)	24,030		17,867		44,304		33,144
Performance Ratios
Return on average assets  (2), (3)
Using GAAP earnings	1.07	%	1.13	%	1.09	%	1.04	%
Using cash operating earnings* on average tangible assets	1.23		1.14		1.19		1.09
Return on average
shareholders' equity  (2), (3)
Using GAAP earnings	12.43		16.07		13.53		15.16
Using cash operating earnings* on average tangible equity	19.39		18.88		19.33		17.36
Net interest margin  (1), (2)	4.29		3.91		4.23		3.90
Per Share Data
Net income diluted (GAAP)	$             0.34	$	0.33		$           0.68	$	0.58
Merger and other nonrecurring charges	0.03		-		0.03		-
Earnings, excluding merger and other
Nonrecurring charges	0.37		0.33		0.71		0.58
Amortization of core deposit premium	0.01		0.01		0.01		0.01
Net interest rate swap (profits) losses	-		(0.01	)	-		0.01
Cash operating earnings* diluted	$             0.38	$	0.33		$           0.72	$	0.60
Net income basic (GAAP)	0.34		0.33		0.69		0.59
Cash dividends declared	0.15		0.14		0.30		0.28

(1)  Calculated on a fully taxable equivalent basis using amortized cost.

(2)  These ratios are stated on an annualized basis and are not necessarily indicative of future periods.

(3) The calculations of ROA and ROE do not include the mark-to-market unrealized gains (losses) because the unrealized gains (losses) are not included in net income.

*

The Company believes that cash operating earnings excluding the impacts of noncash interest rate swap fair value changes, noncash amortization expense and the one-time merger costs related to the Big Lake acquisition which was completed on April 3, 2006, and costs associated with the name change announced for the Company’s primary banking subsidiary is a better measurement of the Company’s trend in operating earnings growth.  Net cash payments and receipts from the interest rate swap have been immaterial for the periods presented.

FINANCIAL  HIGHLIGHTS	(Unaudited)
SEACOAST  BANKING  CORPORATION  OF  FLORIDA  AND  SUBSIDIARIES
			June 30,					Increase/
			2006		2005			(Decrease)
Credit Analysis
Net charge-offs (recoveries) year-to-date		$	(156	)       $		202		(177.2	)%
Net charge-offs (recoveries) to
average loans			(0.02	)%		0.04	%	(150.0	)%
Loan loss provision year-to-date			560			707		(20.8	)
Allowance to loans at end of period			0.76	%		0.73	%	4.1
Nonperforming assets		$	588	$		200		194.0
Nonperforming assets to loans and other
real estate owned at end of period			0.04	%		0.02	%	100.0
Selected Financial Data
Total assets		$	2,415,242	$		2,052,175		17.7
Securities – Held for sale (at fair value)			367,766			461,685		(20.3	)
Securities – Held for investment (at amortized cost)			141,734			170,573		(16.9	)
Net loans			1,602,405			1,140,045		40.6
Deposits			2,028,605			1,743,895		16.3
Shareholders’ equity			202,843			146,877		38.1
Book value per share			10.70			8.63		24.0
Tangible book value per share			7.68			6.53		17.6
Average shareholders' equity
to average assets			8.09	%		6.87	%	17.8
Average Balances (Year-to-Date)
Total assets		$	2,267,127	$		1,811,927		25.1
Less: Intangible assets			45,996			11,950		284.9
Total average tangible assets		$	2,221,131	$		1,799,977		23.4
Total equity		$	183,306	$		124,525		47.2
Less: Intangible assets			45,996			11,950		284.9
Total average tangible equity		$	137,310	$		112,575		22.0

CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

			Three Months Ended					Six Months Ended
			June 30,					June 30,
(Dollars in thousands, except per share data)			2006			2005		2006		2005
Interest on securities:
Taxable	$		6,120		$	5,707	$	11,517	$	10,677
Nontaxable			94			18		109		36
Interest and fees on loans			28,976			17,348		51,987		31,834
Interest on federal funds sold and interest bearing deposits			1,018			774		2,353		1,194
Total Interest Income			36,208			23,847		65,966		43,741
Interest on deposits			4,837			2,090		8,176		3,532
Interest on time certificates			5,206			2,797		9,298		5,210
Interest on borrowed money			2,203			1,121		4,281		1,916
Total Interest Expense			12,246			6,008		21,755		10,658
Net Interest Income			23,962			17,839		44,211		33,083
Provision for loan losses			280			269		560		707
Net Interest Income After Provision for Loan Losses				23,682		17,570		43,651		32,376
Noninterest income:
Service charges on deposit accounts			1,801			1,246		3,043		2,339
Trust income			801			684		1,513		1,267
Mortgage banking fees			331			425		540		995
Brokerage commissions and fees			1,042			634		1,818		1,368
Marine finance fees			868			836		1,661		1,534
Debit card income			558			441		1,021		857
Other deposit based EFT fees			102			109		199		230
Merchant income			619			605		1,298		1,175
Interest rate swap profits (losses)			0			249		0		(267)
Other income			397			359		730		651
			6,519			5,588		11,823		10,149
Securities gains (losses)			(97		)	41		(86	)	44
Total Noninterest Income			6,422			5,629		11,737		10,193
Noninterest expenses:
Salaries and wages			8,443			5,640		14,862		10,930
Employee benefits			1,769			1,499		3,569		2,931
Outsourced data processing			2,180			1,680		3,929		3,239
Occupancy expense			2,062			1,244		3,595		2,392
Furniture and equipment expense			591			520		1,127		1,035
Marketing expense			926			853		1,843		1,729
Legal and professional fees			699			639		1,236		1,180
FDIC assessments			79			60		138		104
Amortization of intangibles			321			222		440		233
Other expense			2,806			2,285		5,246		4,181
Total Noninterest Expenses			19,876			14,642		35,985		27,954
Income Before Income Taxes			10,228			8,557		19,403		14,615
Provision for income taxes			3,794			3,082		7,103		5,254
Net Income		$	6,434		$	5,475	$	12,300	$	9,361
Per share common stock:
Net income diluted		$	0.34		$	0.33	$	0.68	$	0.58
Net income basic			0.34			0.33		0.69		0.59
Cash dividends declared			0.15			0.14		0.30		0.28
Average diluted shares outstanding			19,103,077			16,706,162		18,200,400		16,202,134
Average basic shares outstanding			18,727,475			16,345,301		17,825,416		15,830,012

CONDENSED CONSOLIDATED BALANCE SHEETS  (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

								&n bsp;
		June 30,		December 31,			June 30,
(Dollars in thousands)		2006		2005			2005
Assets
Cash and due from banks		$70,177	$		67,373	$	75,949
Federal funds sold and interest bearing deposits		100,514			153,120		116,600
Total Cash and Cash Equivalents		170,691			220,493		192,549
Securities:
Held for sale (at fair value)		367,766			392,952		461,685
Held for investement (at amortized cost)		141,734			150,072		170,573
Total Securities		509,500			543,024		632,258
Loans available for sale		3,362			2,440		5,887
Loans, net of unearned income		1,614,646			1,289,995		1,148,373
Less: Allowance for loan losses		(12,241)			(9,006)		(8,328)
Net Loans		1,602,405			1,280,989		1,140,045
Bank premises and equipment		37,320			22,218		21,166
Other real estate owned		139			0		0
Goodwill and other intangible assets		57,149			33,901		35,687
Other assets		34,676			29,109		24,583
		$2,415,242	$		2,132,174	$	2,052,175
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Demand deposits (noninterest bearing)		$488,535	$		472,996	$	481,206
Savings deposits		1,000,385			882,031		860,405
Other time deposits		312,209			256,484		260,757
Time certificates of $100,000 or more		227,476			172,708		141,527
Total Deposits		2,028,605			1,784,219		1,743,895
Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days	104,941				96,786		87,742
Borrowed funds	26,218				45,485		43,854
Subordinated debt	41,238				41,238		20,619
Other liabilities	11,397				11,726		9,188
	2,212,399				1,979,454		1,905,298
Shareholders' Equity
Preferred stock	0				0		0
Common stock	1,897				1,710		1,710
Additional paid in capital	90,998				46,258		46,169
Retained earnings	119,108				112,271		106,008
Restricted stock awards	(4,001		)		(3,447)		(3,702)
Treasury stock	(121		)		(218)		(913)
	207,881				156,574		149,272
Accumulated other comprehensive loss	(5,038		)		(3,854	)	(2,395)
Total Shareholders’ Equity	202,843				152,720		146,877
	$2,415,242		$		2,132,174	$	2,052,175
Common Shares Outstanding	18,958,534				17,084,315		17,023,513

Note:  The balance sheet at December 31, 2005 has been derived from the audited financial statements at that date.

CONSOLIDATED QUARTERLY FINANCIAL DATA   (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
			Quarters
			2006					2005								Last 12
(Dollars in thousands, except per share data)			Second		First			Fourth					Third			Months
Net income (GAAP)	$		6,434	$     5,866			$5,833				$    5,565			$	23,698
Merger and other nonrecurring charges			576	--			--				--				576
Earnings, excluding merger and other
nonrecurring charges			7,010	5,866			5,833				5,565				24,274
Amortization of core deposit premium			209	77			77				118				481
Net interest rate swap (profits) losses			--	--			--				--				--
Cash operating earnings*	$		7,219	$   5,943			$5,910				$    5,683			$	24,755
Operating Ratios
Return on average assets (GAAP) (2),(3)
Using GAAP earnings			1.07%	1.13%			1.10		%		1.09			%	1.08		%
Using cash operating earnings* on average tangible assets			1.23	1.16			1.13				1.14				1.17
Return on average shareholders' equity (GAAP) (2),(3)
Using GAAP earnings			12.43	14.98			14.96				14.59				13.87
Using cash operating earnings* on average tangible equity			19.39	19.25			19.48				19.50				19.41
Net interest margin (1),(2)			4.29	4.16			4.04				4.01				4.01
Average equity to average assets			8.58	7.52			7.35				7.50				7.77
Credit Analysis
Net charge-offs (recoveries)			$   (76)	$(80)			$   (32)				(35)				$   (233)
Net charge-offs (recoveries) to average loans			(0.02) %	(0.02)%			(0.01)		%		(0.01)			%	(0.02)		%
Loan loss provision			$   280	$280			$   330				$ 280				$  1,170
Allowance to loans at end of period			0.76%	0.70%			0.70		%		0.71			%
Nonperforming assets			$   588	$240			$  372				$ 325
Nonperforming assets to loans and other real estate owned at end of period			0.04%	0.02%			0.03		%		0.03			%
Nonaccrual loans and accruing loans 90 days or more past due to loans outstanding at end of period			0.03	0.02			0.06				0.03
Per Share Common Stock
Net income diluted (GAAP)			$   0.34	$0.34			$  0.34				$ 0.32			$	1.34
Merger and other nonrecurring charges			0.03	--			--				--				0.03
Earnings, excluding merger and other
nonrecurring charges			0.37	0.34			0.34				0.32				1.37
Amortization of core deposit premium			0.01	--			--				0.01				0.02
Net interest rate swap (profit) losses			--	--			--				--				--
Cash operating earnings* diluted		$	0.38	$0.34		$  0.34				$  0.33				$	1.39
Net income basic (GAAP)			0.34	0.35			0.35					0.33			1.37
Cash dividends declared			0.15	0.15			0.15					0.15			0.60
Book value per share			10.70	9.09			8.94					8.76
Average Balances
Total assets		$	2,419,683	$2,112,876			$2,103,978		$			2,017,521
Less: Intangible assets			58,252	33,604			34,337					35,676
Total average tangible assets		$	2,361,431	$2,079,272			$2,069,641		$			1,981,845
Total equity		$	207,555	$158,787			$154,681		$			151,299
Intangible assets			58,252	33,604			34,337					35,676
Total average tangible equity	$		149,303	$125,183			120,344		$			115,623

 (1) Calculated on a fully taxable equivalent basis using amortized cost.

(2) These ratios are stated on an annualized basis and are not necessarily indicative of future periods.

(3) The calculations of ROA and ROE do not include the mark-to-market unrealized gains (losses), because the unrealized gains (losses) are not included in net income.

*

The Company believes that cash operating earnings excluding the impacts of noncash interest rate swap fair value changes, noncash amortization expense and the one-time merger costs related to the Big Lake acquisition which was completed on April 3, 2006, and costs associated with the name changes announced for the Company’s primary banking subsidiary is a better measurement of the Company’s trend in operating earnings growth.  Net cash payments and receipts from the interest rate swap have been immaterial for the periods presented.

CONSOLIDATED QUARTERLY FINANCIAL DATA   (Unaudited) (continued)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

(Dollars in thousands)

SECURITIES		June 30, 2006			December 31, 2005					June 30, 2005
U.S. Treasury and U.S. Government Agencies	$		106,266	$		71,189	$			78,682
Mortgage-backed			257,639			319,906				382,196
Obligations of states and political subdivisions			2,020			0				114
Other securities			1,841			1,857				693
Securities Held for Sale			367,766			392,952				461,685
U.S. Treasury and U. S. Government Agencies			0			5,000				4,999
Mortgage-backed			135,101			143,877				164,152
Obligations of states and political subdivisions			6,633			1,195				1,422
Securities Held for Investment			141,734			150,072				170,573
Total Securities	$		509,500	$		543,024	$			632,258
LOANS		June 30, 2006		December 31, 2005						June 30, 2005
Construction and land development	$	511,480		$		427,216		$	351,457
Real estate mortgage		893,950				680,877			620,883
Installment loans to individuals		87,408				82,942			89,791
Commercial and financial		121,330				98,653			85,746
Other loans		478				307			496
Total Loans	$	1,614,646		$		1,289,995		$	1,148,373

AVERAGE BALANCES, YIELDS AND RATES (1) (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

		2006								2005
		Second Quarter		First Quarter						Second Quarter
		Average	Yield/			Average	Yield/			Average	Yield/
(Dollars in thousands)		Balance	Rate			Balance	Rate			Balance		Rate
Assets
Earning assets:
Securities:
Taxable	$	567,572	4.31	%	$	535,790	4.03	%	$	633,258		3.60	%
Nontaxable		8,666	6.42			1,195	7.70			1,423		7.59
Total Securities		576,238	4.34			536,985	4.04			634,681		3.61
Federal funds sold and other
investments		86,260	4.73			121,592	4.45			106,756		2.91
Loans, net		1,586,597	7.33			1,318,291	7.08			1,091,628		6.38
Total Earning Assets		2,249,095	6.47			1,976,868	6.11			1,833,065		5.22
Allowance for loan losses		(12,059	)			(9,184	)			(7,778		)
Cash and due from banks		74,788				71,065				63,988
Premises and equipment		32,771				23,432				21,008
Other assets		75,088				50,695				34,796
	$	2,419,683		$		2,112,876		$		1,945,079
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW	$	219,871	1.54	%	$	138,604	0.97	%	$	105,678		0.57	%
Savings deposits		166,563	0.74			145,094	0.51			171,715		0.50
Money market accounts		608,601	2.43			593,403	1.93			553,134		1.25
Time deposits		533,577	3.91			451,223	3.68			393,308		2.85
Federal funds purchased and other short term borrowings		105,140	4.12			109,206	3.80			81,178		2.36
Other borrowings		67,533	6.68			72,596	5.90			60,505		4.27
Total Interest-Bearing Liabilities		1,701,285	2.89			1,510,126	2.55			1,365,518		1.76
Demand deposits (noninterest-bearing)		496,308				434,692				434,777
Other liabilities		14,535				9,271				8,125
Total Liabilities		2,212,128				1,954,089				1,808,420
Shareholders' equity		207,555				158,787				136,659
	$	2,419,683				2,112,876				1,945,079
Interest expense as a % of earning assets			2.18	%			1.95	%				1.31	%
Net interest income as a % of earning assets			4.29				4.16					3.91

(1)

 On a fully taxable equivalent basis.  All yields and rates have been computed on an annualized basis using amortized cost.  Fees on loans have been included in interest on loans.  Nonaccrual loans are included in loan balances.

EX-99.2

EXHIBIT 99.2

To 8-K dated July 25, 2006

Seacoast Banking Corporation of Florida

July 26, 2006

10 am Eastern Time

Operator:

Good afternoon ladies and gentlemen and welcome to the Seacoast’s second quarter earnings release conference call.  At this time all participants are in a listen-only mode.  Later, we will conduct a question and answer session.  Please note that this conference is being recorded.  I would now like to turn the call over to Mr. Dennis Hudson.  Mr. Hudson, you may begin.

Dennis Hudson:

Thank you very much and welcome to Seacoast’s second quarter 2006 earnings conference call.  Before we begin, I would like to direct your attention to the statement contained at the end of our press release regarding forward statements.  During this call, we may be discussing certain issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act and accordingly, our comments are intended to be covered within the meaning of the Act.  We have also posted a few slides on our website which we will refer to in our comments.  Feel free to visit www.seacoastbanking.net and click on presentations at the bottom of the Investor Relations listing to view these slides as we continue with our comments.  With me today is Bill Hahl, our Chief Financial Officer, as well as, Doug Gilb ert, Vice Chairman and Chief Credit Officer, and Jean Strickland, our Chief Operating Officer.  All of us will be available to answer questions following our prepared remarks.

Seacoast reported record-breaking operating earnings for the quarter of $7 million dollars or $0.37 per diluted share.  This represents a 12 percent growth in per share earnings over the prior year and a 9 percent growth rate over the first quarter of this year.  These numbers exclude merger and other nonrecurring charges primarily related to the acquisition and integration of Big Lake Financial Corporation which closed during the quarter.  Another key accomplishment this past quarter was the completion of the integration of Big Lake which occurred last month.  This integration has gone very well and we want to sincerely thank the many associates who worked hard on this important project.

During the quarter we also completed a total re-branding of our principal banking subsidiary from First National Bank and Trust Company of the Treasure Coast to Seacoast National Bank. This local re-branding was necessitated by our movement into new markets and will help position us in a stronger more unique way as we move forward.  Bill is now going to speak to us a little bit about some of the financial highlights for the quarter and then I will return for a few concluding remarks.  Bill.  

Bill Hahl:

Okay thanks Denny.  As Denny mentioned, I am going to refer to some of our slides posted for the call this morning and I am going to start with the total revenue slide.  Total revenues increased in the second quarter compared to last year by 32 percent.  Net interest income increased to 34½ percent as a result of continued organic loan growth, better mix, loan mix, and increased earning assets as a result of the Big Lake acquisition.  We continue to see the powerful benefits from increasing our loan-to-deposit ratio from below 50 percent about two years ago to over 80 percent in the second quarter 2006.  This has been accomplished by increasing our capabilities to produce both commercial and commercial real estate loans, through our expanding footprint into larger metro areas like Palm Beach and Orlando. &nb sp;Ending loans outstanding now comprise 73 percent of earning assets, up from 65 percent at year-end and 21½ percent linked quarter annualized excluding the Big Lake loans.  As incremental revenue from loan and earning asset growth are realized, and with continued strong fee based revenues, the stage is set for record full-year 2006 operating profits.  

Contributing to the growth in net interest income, the net interest margin has improved over the last six consecutive quarters, increasing a total of 13 basis points in the second quarter as a result of improving earning asset mix and maintaining a very favorable deposit mix, emphasizing low cost interest bearing core deposits and noninterest bearing demand deposits.  While most competitors in the market have experienced negative core deposit growth in the second quarter, we believe that our relationship banking strategy allowed our core deposits, excluding Big Lake, to remain flat with the first quarter 2006.  However, as we indicated last quarter, overall costs of deposits, as a result of a change in mix of deposits, did increase 28 basis points in the second quarter to 1.99 percent compared to 1.71 percent for the first thre e months of 2006.  

Also contributing to the total revenue growth, noninterest income excluding swap security gains and losses, rose 22 percent compared to last year’s second quarter with approximately 14 percent being contributed by the Big Lake acquisition.  On a linked quarter basis without Big Lake, noninterest income rose 32 percent annualized.  Revenues from wealth management fees were solid for the second quarter, increasing an unusually strong 24 percent linked quarter unannualized.  Over the long term, wealth management fees have grown at an 8 to 10 percent compounded rate annually, and there were a few transactions in the second quarter that made the wealth management fees considerably higher as shown in the results.  All other fee-based businesses showed modest increases from the first quarter of 2006.

Moving to another slide we posted for the call that shows our overhead over the past nine quarters, since 2004 we have opened branches and a loan production office in Palm Beach County and expanded into Brevard County with a loan production office.  The additional overhead initially increased the overhead ratio into the mid-sixties, consistent with our expectations and past experience with other expansions.  The acquisition of Century National last year and Big Lake this quarter has helped to lower this ratio by increasing gross revenues without significant overhead additions.  Further, if we achieve our strategies and planned income objectives as we open one to two additional branches per year, we believe the overhead ratio will continue to move lower by 1 to 2 percent throughout the next two years as we move to improve o perating efficiency driven by strong gains in revenues and combined with favorable expense trends.  Favorable expense trends going forward will be derived from cost savings and planned efforts to streamline operations.  

Next, I will refer to our slide for loan growth.  Loans have increased in the existing markets by 23 percent over the last 12 months.  That I would say is very consistent with what our expectations were in the first quarter.  Total loan growth was $466 million, including the Big Lake acquired loans, for a 41 percent increase.  The markets we operate in are some of the most desirable in the state of Florida and continue to grow producing strong lending opportunities.  Commercial and commercial real estate originations by quarter are shown in another slide we have posted and they total $223 million for the first six months of 2006 compared to $235 million in 2005, still very strong results for loan production.  However, we continue to think that the total loan outstanding balances will not grow as fast as the current projects are completed and paid off during the remainder of 2006.  However, construction periods have been extended due to the past hurricane impact and so balances are not being paid off quite as fast as originally believed.  

Next I will refer to our slide on deposit performance posted on our website.  Ending deposits at June 30, 2006 were flat with the prior year, excluding deposits acquired from Big Lake.  The mix of deposits at June 30, after Big Lake, was consistent with our pro forma expectations that I shared with you last quarter, with 24 percent of ending deposits in noninterest bearing demand and 90 percent of ending deposits comprised of low-cost core deposits.  The company’s cost of interest bearing deposits ranks in the lowest quartile compared to peers and was 86 basis points below the peer average for the first quarter of 2006.  The acquired interest bearing deposits of Big Lake have similar cost profiles and their impact on the overall cost of deposits, as shown in the slide posted for the call, were limited.   ;As we expected and discussed in the first quarter call, more customers are moving some deposit funds into CDs and this has changed the mix of deposits from 24 percent of total deposits for CDs to 26 percent at quarter-end June 30.  With further Fed rate hikes, it is likely that increases in overall cost of deposits may continue and may slow net interest margin expansion during the third quarter.

Next I will refer to our slide for net interest margin entitled “Net Interest Margin and Net Interest Income”.  The margin increased 38 basis points over the past 12 months.  We have indicated that approximately eight basis points out of the 13-basis point increase during the second quarter resulted from acquisition purchase accounting, and five basis points from positive earning asset mix changes and higher interest rates on floating rate assets.  

We also have a couple of slides posted showing our floating rate assets, as well as our prime based loans, which is key to our modeling going forward.  Our modeling, assuming continued loan growth (but at a slower sort of mid-teens type pace as opposed to the 20 plus percent we have experienced so far, and with no Fed action or with 25 to 50 basis points in increases), suggests modest improvements in the margins over the remainder of the year.  With that I will turn it back to Denny for some final comments.  

Dennis Hudson:

Thank you Bill.  As you heard, it was a great quarter.  I would like to pause and reflect on our progress over the past 18 months.  Over that period of time there have been many changes that have impacted Seacoast and those changes have had a tremendous impact on our people.  Our people have worked hard and they have continued to produce while we have significantly increased our capacity.  We have seen significant growth in our business as we have expanded into new markets, and we have also benefited from continued population growth in our legacy markets.  

Over the past 18 months, we have successfully evolved our earning asset mix to generate increased potential for profitability.  Assets have grown from $1.6 billion at the end of 2004 to $2.4 billion today.  Loans have grown over the same period from a little under $900 million to $1.6 billion; and our net interest margin has grown from 3.89 percent in 2004 to 4.29 percent this quarter.  Overhead has grown too, but our relentless focus on building revenue by building relationships with our customers, and our disciplined acquisition strategy, has more than offset this growth.  In fact, our overhead ratio has gone, as you heard earlier, from around 67 percent in 2004 to 62 percent this past quarter, and per share earnings have grown from $0.24 in the final quarter of 2004 to $0.37 this quarter, a 54 percent increase in 1 8 months.  So we have seen very significant transformation in our company both in size and geographic reach.  

This quarter we completed the integration work related to the Big Lake National Bank acquisition and next quarter we will complete the work related to systems integration at Century National Bank in Orlando.  We have also been hard at work on other changes internally that will build the right support for our community-focused banks and our local CEO’s going forward.  As we are now nearing completion of this work, we will begin to shift our attention to creating greater operating efficiencies going forward.  This effort will begin later this year and we look forward to reporting to you our progress in this area in early 2007.  

Seacoast was also presented recently with another even larger opportunity and that is the announcement earlier this month that Harbor Florida Bancshares, headquartered here in our headquarters’ market, will be acquired by Cleveland-based National City Corporation.  Like Seacoast, Harbor enjoys a very strong market presence in our Treasure Coast market.  In Martin County where Seacoast is headquartered, we enjoy a number one position with a 24 percent deposit market share, and Harbor is ranked number seven.  In St. Lucie County where Harbor is headquartered, they enjoy the number one position with 24 percent of the market, and Seacoast is ranked number five.  We think there will be some opportunity to position Seacoast as a strong local bank, particularly in St. Lucie County, as this transaction progresses.   The transaction is expected to close in the fourth quarter of this year.  Integration activities are expected to take place in the first quarter of 2007, including cost reductions of 15 percent of Harbor’s already low overhead ratio which stands at 42 percent.  This will be City National’s first bank acquisition in the state, and it follows an impressive effort over the last few years on the part of other large Ohio-based banks, such as Huntington Bancshares in Columbus and Fifth Third in Cincinnati, to enter Florida.  While we certainly take very seriously the threat this very able competitor brings into our markets, we believe there may be some short-term opportunities created in 2007 and we plan to take advantage of these.  This concludes our prepared remarks.  We’d be happy to take a few questions.  

Operator:

Thank you.  We will now begin the question and answer session.  If you have a question, please press star, then one, on your touchtone phone.  If you wish to be removed from the queue, please press the pound sign or the hash key.  If you are using a speaker phone, you may need to pickup the handset first before pressing the numbers.  Once again, if there are any questions, please press star, then one, on your touchtone phone.  We have Barry McCarver from Stephens.  Please go ahead.

Barry McCarver:

Hey, good morning guys.

Dennis Hudson:

Good morning Barry.

Barry McCarver:

Good quarter.

Dennis Hudson:

Thank you.

Barry McCarver:

Denny, I was wondering if you have given any consideration to what National City’s strategy might be and if there would be any significant changes to the competitive nature of Harbor?  In the past I think Harbor has probably been a very good disciplined competitor and nice to have in the market, for the most part, relative to some silly competitors.  Have you thought or heard anything about what NCC might be doing there?  

Dennis Hudson:

You know that is a current topic around the bank, and I am sure it is a current topic around many of Harbor’s other competitors as well here in the market.  I think the key point is that Harbor enjoys a very strong reputable position in the communities and has an employee base that is very loyal and hardworking and has been with that company for many years, many of them for their whole careers.  So I think any changes that are made—and there certainly will be changes—will be impactful in the short-term and create some great opportunities for us.  I think your comments are probably more directed longer term.  National City brings in a wealth management capability that Harbor didn’t have and a breath of services that they didn’t have, but I would remind you these are still very thin markets here in the Treasure Coast.  I know NCC in their slide presentation made some comments about workplace banking services that they offer; but there are no large employers in these markets, so I am not sure how appropriate that will be as it applies to these markets.  But it’s something that is a current topic and we’ll continue to focus on taking as much advantage of it as we can going forward.  

Barry McCarver:

Okay, and then secondly, taking a look at your efficiency ratio—very strong in the quarter—I am wondering how much of Big Lake’s expenses you were able to dry out on the close and what we should expect going forward?  

Dennis Hudson:

Actually probably a bigger driver to that ratio was the revenue growth, wouldn’t you think, Bill?

Bill Hahl:

Yes.

Dennis Hudson:

Over this last quarter—Bill is agreeing with me—very little on the way of net, net, net cost-out from the Big Lake acquisition.  We said in the beginning that we did not need cost-outs to justify the transaction.  They are very, very strong in their markets around the Lake with great deep relationships that they have built with their customer base, and we don’t want to mess that up in any way, so we are very carefully looking at efficiencies over a broader base going forward.  But very little of that was actual cost-outs.

Barry McCarver:

Okay, thanks a lot guys.

Dennis Hudson:

Thanks Barry.

Operator:

The next question comes from James Record from Sterne Agree.  Please go ahead.  

Dennis Hudson:

Hello there.

James Record:

Hi guys, nice quarter.

Dennis Hudson:

Thanks.

James Record:

Hey, could you give—I just want to make sure I am clear on sort of the non-core expenses during the quarter—you had $304,000 pre-tax associated with the name change, is that right?

Bill Hahl:

Yes.

James Record:

And would that be in other expense, other, other?  

Bill Hahl:

Well some of it will be depreciation write-off on signage; and yes, I would say the vast majority would be in the other, other.

James Record:

And then what were your pre-tax merger charges in addition to that?

Bill Hahl:

I believe they were like $576,000.

James Record:

Okay that is pretax?

Bill Hahl:

Yes.

James Record:

And where do those fall, salaries?

Bill Hahl:

Yes, some were in salaries, some were in outsourced data processing.

James Record:

Okay.

Bill Hahl:

…conversion fees, that type of thing.  

James Record:

All right that is helpful.  Could you just comment on what Big Lake reported in terms of absolute quarter deposit numbers? Before the acquisition closed, I thought they had about $250 million in non-CD deposits, but that does not really match with sort of your increase linked quarter in core deposits.  I don’t know if there is something that was missing from the deposit side.

Bill Hahl:

Yes, well what’s happened with them—just like I think we reported in the first quarter—they do have large deposit balances with public funds, and there were seasonal changes in those balances from the acquisition date to June 30.  So the June 30 numbers for core deposits are lower and that is really what we were comparing was the lower balances.

James Record:

Okay, thank you.  I will get off the line, but could just comment quickly on your progress as far as loan growth in Orlando?—and thank you.

Dennis Hudson:

Jean, do you want to address that?

Jean Strickland:

The team in Orlando has been focused on maintaining the client base there, as we work towards the systems integration that will happen in mid August—and they have done a great job. They have continued actually to grow both loans and deposits while we have been working through and towards this integration.  They have done everything we have asked them to do, and so we feel that we will be well positioned after we get through this more in-house effort on leveraging what we have there.

Dennis Hudson:

Having said that, there has been, as Jean said, both loan growth and deposit growth; and we still have great potential out in 2007 and beyond.  If the moderator can take another question….  

Operator:

Okay we now have John Pandtle from Raymond James.  Please go ahead.

John Pandtle:

Thank you and good morning.

Dennis Hudson:

Good morning John.

John Pandtle:

My question relates to the securities portfolio and the earning asset ratio.  Bill, did Big Lake change the cash flow schedule for the average life of the portfolio much?  Where I am heading with the question is—how much room do you have to continue to redeploy the cash from securities into loan growth going forward?  

Bill Hahl:

Not really—there was no significant change as a result of the acquisition as far as the overall life.  We are going to continue to see the amortization of the investment portfolio at somewhere between $10 and $12 million.  I think the last time I looked at it on a 12-month going-forward basis it averaged more like $15 million…

Dennis Hudson:

Per month

Bill Hahl:

….Yes, but we are going to have some months that are going to be around $10 to $12 million.  So all of that is going to be deployed once we fully integrate with our affiliate, Century National.  I think you see on the balance sheet that we have $100 million in Fed Funds availability as well to deploy back into the loan portfolio.

John Pandtle:

Okay, and have you calculated on average what kind of spread pickup you are getting as you move from securities into loans?  

Bill Hahl:

Yes, for the security portfolio for June, average yield was 4.40 percent and the loan portfolio was just a little bit south of 7.60 percent.  

John Pandtle:

All right, so it clearly helps your margin going forward?  

Bill Hahl:

Yes.  

John Pandtle:

Very good, thank you.

Operator:

We now have David Bishop from Stifel Nicholas.  Please go ahead.  

David Bishop:

Hey, good morning gentlemen.

Dennis Hudson:

Good morning David.

Bill Hahl:

Good morning.

David Bishop:

A question for you in terms of the Century system conversion there—can we expect that it will have any sort of meaningful impact in terms of the efficiency ratio?  What do you expect for a run rate, or is that more operational in nature?  

Dennis Hudson:

It will be operational in nature, with no impact whatsoever on the overhead ratio.  If you looked at that subsidiary, they operate with a remarkably low overhead—I think now—Jean—under 40 percent?

Jean Strickland:

Yes, right around 40 percent.  

Dennis Hudson:

Yes, right around 40 percent.

Jean Strickland:

It is incredible.  

Bill Hahl:

Well having said that…obviously moving from a stand alone system to a fully integrated system, there is a modest amount of expense reduction, but it is not going to have much impact on the overhead ratio.  

Dennis Hudson:

Our comments on overhead earlier in the call relate to just looking at our overall company-wide overhead in a lot of areas of the company. As we have grown and expanded, I think that is where the focus needs to be going forward.  

David Bishop:

Regarding the commercial loan pipeline, commercial real estate pipeline, obviously there is a lot of focus on the slowdown of the residential construction market down there.  Can you make some comments regarding the outlook in terms of your legacy regions and then just some of the new markets?  What you are seeing with the commercial loan pipeline/demand?  

Dennis Hudson:

Doug, did you want to comment on that?

Doug Gilbert:

Well, at this particular setting, we still have a very substantial pipeline.  Of course we are seeing some evidence of slowdown in the markets, both on the residential and commercial side, but at this juncture our pipeline is still strong, and we still find that we are getting more than a lion’s share of business that is out there.  But there is no question there has been some slowdown in both sectors.  

Dennis Hudson:

And we have certainly seen in the last several quarters a very dramatic slowing versus a year ago in our numbers in the residential consumer loan portfolio as that has declined and that is indicative of what Doug said.

David Bishop:

Okay.  Just one housekeeping item, in terms of the effective tax rate this quarter, there was a nondeductible merchant charge that ticked up about a percent or so.  Should we continue the normal 36.2 percent, low 36 percent rate, going forward?  

Bill Hahl:

Gees…I don’t know of any cause for that David.  I will have to get back to you on that.

David Bishop:

I can follow up offline.

Bill Hahl:

Okay.

Operator:

Okay, our next question comes from David Homler from Oppenheimer.  Please go ahead.  

David Homler:

Hi, good morning guys.  

Dennis Hudson:

Good morning.

Bill Hahl:

Good morning.

David Homler:

I just wanted to talk a little bit more about deposits.  You mentioned earlier that, excluding the Big Lake financial numbers, Seacoast’s core numbers were flat linked quarter, and I am just wondering what you guys are seeing in terms of pricing competition, or are you guys being less aggressive on the pricing?  How should we think about it going forward?  

Dennis Hudson:

Well, I want to weigh in with a couple of global comments, and Bill can give you some more color on it.  You need to understand that in the summer for the last two years in these markets we were very positively impacted by three major hurricanes that crisscrossed our markets and those hurricanes had a somewhat significant impact on our deposit growth.  This summer we are experiencing what I would characterize as a more traditional sort of a deposit fluctuation which we had prior to those hurricanes, in which we saw a decline in deposits (if anything) in the summer months.  Add to that the kind of the interest rate environment we are in—which we have talked about earlier in the call—and the potential slowing in the residential real estate market and how that can impact escrow balances and the like, and that gets u s to the kind of flat performance here this summer, which is very different than what we saw a year ago.  Bill, do you have any other comments?

Bill Hahl:

No, I think you covered everything.  Going forward, we still look for continued growth from the newer markets, and any new markets that we are entering, but as Denny mentioned, potentially that may be offset by some core deposit decline in business deposits (escrows, title companies, attorneys, particularly on the residential side) as those wind down to more reasonable levels.  

Dennis Hudson:

I know we have indicated in past calls deposit growth expectation overall in the single digits.  

Bill Hahl:

Yes in the single digits for the year.

Dennis Hudson:

For the year, but we are probably going through some seasonal aspect right now in the summer months, and you will see that again next quarter.  

David Homler:

Okay, great guys.  That is all, thanks.

Operator:

We now have Lauren Johnson from SunTrust Robinson Humphrey.  Please go ahead.

Lauren Johnson:

Yes I just wanted to clarify the earlier question.  Was the $576,000 in pre-tax charges, was that separate from the $304,000 name change charges?  

Dennis Hudson:

Yes.

Lauren Johnson:

Okay, thank you.

Operator:

Jed Gore is on line from Sunova Capital.  Please go ahead.  

Jed Gore:

Hi, thanks for taking my question.  Very good quarter.  Just a question on efficiency in the context of the slowing growth of the company.  I believe this question has sort of been asked, but I am trying to get a sense of what you think you can do in terms of expense savings.  I know you mentioned you are going to focus on it in the second half of this year, but what’s your sense in terms of dollars or ratio if you have a target for where your efficiency ratio could get to over the next year or so?  

Bill Hahl:

I think in my comments I had indicated that collectively looking at the potential we have in terms of this raw-dollar cost—as well as a more robust look at overall operating efficiency for the company, given the fact that we have had these two acquisitions and are now fully integrated—that we expect maybe another 1 to 2 percent over the next couple of years.  So we are at about 61 percent, and I am thinking 58 or 59 percent over the next couple of years, but not a lot of improvement over the next six months.  

Dennis Hudson:

I think the key thing we are trying to communicate here is:  first of all we do not have a target number to communicate to you, but we want to make clear that it is an area of focus that will come into view in the next couple of quarters for us internally, and we just want to make sure that we have the right expectation out there.  It is a longer-term project, not something that is expected to dramatically impact the next few quarters.  

Jed Gore:

Thank you.

Operator:

We now have Peyton Green from FTN Midwest Securities.  Please go ahead.  

Peyton Green:

Hi, good morning.  A couple of questions.  One, in the last quarter and maybe even the quarter before, you gave a little bit more cautious expectation on the lending side of the business, and I was just wondering if you could follow up with a little bit more commentary there?  I think you all referenced a little bit of extension on some of the construction lending that you are doing, but if you could just put that in the proper context that would be great.  Then also, has the pipeline changed in terms of the types of deals that you are doing—whether that is a function of the new markets or the existing markets?  Thanks.  

Dennis Hudson:

Doug can comment in a second, but just to be clear, on the last call I think we talked in terms of loan growth in the second half of the year slowing into the teens, which is still great growth.  I guess we are still standing by that, although Bill cautioned you earlier that the slowdown may get pushed out a little bit given for the reasons he earlier expressed.  Doug, are there any other comments there?  

Doug Gilbert:

Well I think our pipeline, the makeup of our pipeline, is pretty consistent with what we have seen over the last few years.  We are still seeing a number of project type loans and I don’t think there has been any real change in the makeup of the pipeline.

Peyton Green:

Okay and are you all seeing more deals dropout that aren’t getting done, or do you still feel really good about the nature and the look of the projects?  

Dennis Hudson:

Well there is no doubt there are deals on the drawing boards that are now being sidelined because of the concern over a slowing market—and has that impacted us?  No.  Most of our projects Doug and I would say are pretty far along.

Doug Gilbert:

Yes, that’s right.

Dennis Hudson:

But we read about in the press different deals that were speculated about six months ago that are now going on the sidelines.  

Peyton Green:

Okay, and so again, when you say slowing into the teens, it is probably not going to slow into the teens at least in the second half—the slowdown would be more of a 2007 factor, not a 2006 one?  Is that fair?

Doug Gilbert:

Not really, we are probably looking at the fourth quarter before we see any slowdown.  I don’t think it will be stretched out to 2007.

Dennis Hudson:

Yes, we really still stand by our “in the teens in the second half”, but it may be a little more skewed to, as Doug said, the tail end of the year, but I think it is definitely slowing.  Our pipelines remain strong, but they are not expanding, and up through a quarter ago I would say they were stronger than they are now. If anything, they just haven’t weakened maybe as quickly as we would have anticipated three months ago

Peyton Green:

Okay, great. And then I think you have done a great job on the M&A transactions that you have done in the last couple years.  What’s the prospect for any more?  

Dennis Hudson:

Well, I think Doug has said before, we are always open to talking with other opportunities out there, but we have a very disciplined approach. You know when you have the earnings growth out ahead of us that we feel we have, you are not willing to give that up to get deals done.  So when we find sellers who really buy into our story and our culture and where we are headed as an organization, and bring to the table additional values in that story, it works really well.  We will tell you there have been a number of very brief conversations we have had over the last six months where that just wasn’t there.  We have seen other deals, smaller deals, announced at whopper prices that don’t make a lot of sense.  So they’re out there.  I would say that those environments are still out there.  There are a lot of de novo banks that started up 8 and 10 years ago that are now looking around and very few of them make sense to us.

Peyton Green:

Okay great, thank you very much.

Operator:

We now have John Pandtle on line from Raymond James with a follow up question.  Please go ahead.  

John Pandtle:

Guys, thank you.  Denny, you guys have never been one to really redline your capacity.  You have a pretty conservative approach to growth.  I don’t know if I missed it, but can you touch on the progress in Palm Beach and other relatively new offices in the franchise, and how much lending and revenue capacities are in the system, if you will, without having to absorb proportional incremental increases in expenses.  

Dennis Hudson:

Oh, that is a good question.  Jean, do you want to update us maybe on how things are going in Palm Beach for example?

Jean Strickland:

Well, we have five offices open now this last quarter with the opening of our headquarters location in Palm Beach County. We are going to sit with that for a while, but we have tremendous capacities there for growth.  It is a very profitable market right now, but the upside is still tremendous.  

Dennis Hudson:

We have five offices—to give you a flavor for that we have—five offices open as of right now, a little over $300 million in loans outstanding in the market and a strong deposit base, a big pipeline as well.  

Jean Strickland:

There are over $100 million in deposits.

Dennis Hudson:

…Deposits are over $100 million in the market.  I would say the commercial aspects of that story are working very well.  We believe it will continue to work well. The retail store is part of the story, and wealth management is part of a much slower build out.  So while the overall market is very profitable, the individual branches, many of them have a long way to go in terms of the retail support that they will build over time, but that was understood from the beginning.

John Pandtle:

Okay and Denny, do you have a sense for what the efficiency ratio is in that market?  Do you measure market-by-market?  

Dennis Hudson:

Yes we do, but you know it is a question of how you define it.

John Pandtle:

Right.

Bill Hahl:

…And the revenues are so strong because of the loans--$300 million in loans is up there—it is a pretty low overhead.  

Dennis Hudson:

Lower than the company as a whole.

Bill Hahl:

Yes, in terms of how you allocate the expenses.

Dennis Hudson:

Right, and that is before the central allocation.  

Bill Hahl:

Right.

Dennis Hudson:

So it depends on how you want to define all of the above.

John Pandtle:

Okay, well thanks for the follow up.

Operator:

We have David Bishop back on line from Stifel Nicholas.  Please go ahead.  

David Bishop:

Hey guys, just one quick follow up in terms of credit quality there.  Obviously reported numbers continue to be (inaudible) there, but any sense in terms of watches or trends, any deterioration you see there? Maybe you can give some commentary on what you are seeing?

Doug Gilbert:

Well, from the standpoint of credit quality, it continues to show improvement.  We don’t see anything on the horizon at this point that causes us any concern whatsoever.  It just keeps improving, and we would like you to know that if you look back over a 10 or 12 year period, there has always been sterling credit quality so to speak.  And we expect more of the same thing.  

David Bishop:

Thank you.

Operator:

We have Al Savastano from Janney Montgomery.  Please go ahead.  

Al Savastano:

Good morning guys.  How are you?

Dennis Hudson:

Good morning, Al.

Bill Hahl:

Good morning.

Al Savastano:

Just a question on the purchase accounting adjustments.  Could you give us a little more color, if the full impact was in this quarter, and how long that would last?  Anything to get a little more color would be helpful.

Bill Hahl:

Yes, that is a good point.  We are pretty much through most of the purchase accounting adjustments, particularly on the margin side, Al, so we don’t see a lot of change there.  As I mentioned, out of the 13 basis point improvement, about 8 were attributable to that, and 5 to basic same old stuff that we have been doing in terms of loan growth and earning asset mix.  On the expense side, I think we have been through most everything of any significance though.  The core deposit amortization is what it is going to be for the quarter—that’s complete and final.  

Dennis Hudson:

So we feel pretty good about the current run rate that you will see in the quarter.  That was a full impact I would point out as we closed April 1, 2006, right?

Bill Hahl:

Right.

Dennis Hudson:

So it had a full impact and the only thing going forward to consider is the fact that the margin expansion in the quarter will not be that going forward because of what Bill just talked about.  So we are looking at we really only had say five basis points of margin expansion unrelated.  

Al Savastano:

And just the length, how long will the purchase accounting adjustments remain in the margin?  

Bill Hahl:

Oh well, gees, I guess that is probably a good…

Dennis Hudson:

…over the life of the assets.

Bill Hahl:

Yes, over the life of the assets, and it’s a few years—let’s put it that way.  

Al Savastano:

So if we look at the loans and the securities, are they going to run up kind of at the same time or be an even flow, or is one going to runoff beforehand and cause a significant movement?  

Bill Hahl:

No I don’t think so Al.  It should be an even flow.  If you assume the assets acquired have, just to argue, a seven year average life, that is what it is going to runoff at.  As they runoff and get replaced with new assets, they will be re-priced at that time.  

Al Savastano:

Very good, thank you.

Operator:

Thank you.  If there are any further questions, please press star/one on your touchtone phone.  At this time I show no further questions.  

Dennis Hudson:

Well thank you very much for attending our conference call.  As always, we’d be happy to talk with you as the quarter progresses and we look forward to speaking with you in our next call which will be in October.  Thank you.

Operator:

Thank you.  That concludes today’s conference.  Thank you for participating.  You may all disconnect.  

EX-99.3

EXHIBIT 99.3

To 8-K dated July 25, 2006

Seacoast Banking Corporation of Florida

Second Quarter 2006 Financial Highlights

Cautionary Notice Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about the benefits of the integration and consolidation of Seacoast with Big Lake and Century, including future financial and operating results, cost savings, enhanced revenues, and accretion to reported earnings that may be realized from the mergers, as well as statements with respect to Seacoast, Big Lake and Century’s plans, objectives, expectations and intentions and other statements that are not historical facts.  Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, 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 to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.  

You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “support”, “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “further”, “point to,” “project,” “could,” “intend” or other similar words and expressions of the future.  These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates on the level and composition of deposits, loan demand, and the value s of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks and sensitivities; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses.  The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations; the risks that the businesses of Seacoast, Big Lake and Century will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of Big Lake and Century’s customers by competitors; as well as the difficulties and risks inherent with entering the Central Florida market.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2005 under “Special Cautionary Notice Regarding Forward-Looking Statements,” and otherwise in our SEC reports and filings.  Such reports are available upon request from Seacoast, or from the Securities and Exchange Commission, including through the SEC’s Internet website at http://www.sec.gov.

Total Revenues Increase

Noninterest income rose 8.1% linked quarter unannualized excluding Big Lake revenues and 22.9% including Big Lake revenues.

(Dollars in thousands)	QTR2 06	QTR2 05	Growth	% Growth
Net Interest Income	$ 24,030	$ 17,867	$ 6,163	34.5	%
Noninterest Income	6,519	5,339	1,180	22.1
Total Revenues	$ 30,549	$ 23,206	$ 7,343	31.6	%

Dollars in Thousands; Excludes provision for Loan Losses, Interest Rate Swap Profits (Losses), and Securities Gains (Losses) Calculated on a Fully Taxable Equivalent Basis

Overhead Ratio

	Q2-04	Q3-04	Q4-04
Overhead Ratio	65.1%	65.6%	65.0%

	Q1-05	Q2-05	Q3-05	Q4-05
Overhead Ratio	65.4%	62.1%	62.5%	62.1%

	Q1-06	Q2-06
Overhead Ratio	62.5%	61.1%

•

Noninterest Income Excludes Security Gains (Losses) and Interest Rate Swap Profits (Losses)

•

Noninterest Expense Excludes Merger/Nonrecurring Charges and Non-cash Core Deposit Intangible Amortization

•

Net Interest Income is included on a Tax Equivalent Basis

Loan Growth

Loan Growth Remains Strong at a 22.9% Growth Rate Year over Year, Excluding Big Lake Loans of $203 Million

(Dollars in thousands)	Q2-2005	Q3-2005	Q4-2005	Q1-2006	Q2-2006
Loans, net of unearned income	$ 1,148,373	$ 1,217,919	$ 1,289,995	$1,339,070	$1,614,646

Commercial Lending Originations

(Dollars in thousands)	Q2-2005	Q3-2005	Q4-2005	Q1-2006	Q2006
Commercial Originations*	$ 119,000	$ 125,000	$ 112,000	$ 117,000	$ 106,000

*  Includes Commercial Real Estate

Deposit Performance

Deposits Flat Over Last Twelve Months, Excluding Big Lake Deposits of $274 Million

(Dollars in thousands)	Q2-2005	Q2-2006
Total Deposits	$ 1,743,895	$ 2,028,605

Deposit Mix

	QTR4 05		QTR1 06		QTR1 06
Demand	27	%	24	%	24	%
Core *	63		65		65
Time Deposits > $100,000	10		11		11
Total	100	%	100	%	100	%

*Includes Time Deposits < $100,000

Cost of Deposits

	Q3-04	Q4-04	Q1-05	Q2-05	Q3-05
Fed Funds Rate	1.75%	2.25%	2.75%	3.25%	3.75%
Cost of Deposits	1.02%	1.03%	1.09%	1.18%	1.32%
	Q4-05	Q1-06	Q2-06
Fed Funds Rate	4.25%	4.75%	5.25%
Cost of Deposits	1.54%	1.71%	1.99%

Average Earning Asset Growth

(Dollars in billions)	Q4-04	Q1-05	Q2-05	Q3-05	Q4-05
Average Earning Assets	$1.45	$1.59	$1.83	$1.89	$1.97

(Dollars in billions)	Q1-06	Q2-06
Average Earning Assets	$1.98	$2.25

Average loans represent 71% of earning assets at June 30, 2006, compared to 63% at December 31, 2005 and 60% at December 31, 2004

Prime Based Loans

(Dollars in thousands)	Q2-05	Q3-05	Q4-05	Q1-06	Q2-06
Prime Based Loans	$355,000	$390,000	$416,000	$426,000	$496,000

Total Floating Rate Assets

Floating Rate Assets (Loans, Investments, and Overnight Funds)

(Dollars in thousands)	Q2-05	Q3-05		Q4-05		Q1-06	Q2-06
Ending Floating Rate Assets	$ 582,000	$ 617,000		$ 677,000		$ 631,749	$ 643,625
Prime Rate	6.25%		6.75%		7.25%	7.75%		8.25%

Net Interest Margin and Net Interest Income

(Dollars in thousands)	Q2-05	Q3-05	Q4-05	Q1-06	Q2-05
Net Interest Margin	3.91%	4.01%	4.04%	4.16%	4.29%
Net Interest Income	$ 17,867	$ 19,091	$ 20,062	$ 20,274	$ 24,030

Excludes Provision for Loan Losses; Calculated on a Fully Taxable Equivalent Basis using Amortized Cost

Service Area

•

Seminole County

•

Orange County

•

Brevard County

•

Indian River County

•

Okeechobee County

•

St. Lucie County

•

Martin County

•

Palm Beach County

•

Hardee County

•

Highlands County

•

Desoto County

•

Glades County

•

Hendry County