8-K

8-K – page # of 5

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 30, 2007 (July 25, 2007)

    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 5

SEACOAST BANKING CORPORATION OF FLORIDA

Item 2.02

Results of Operations and Financial Condition

On July 25, 2007, the Registrant announced its financial results for the second quarter ended June 30, 2007.  

A copy of the press release announcing the Registrant’s results for the second quarter ended June 30, 2007 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, including, without limitation, statements about future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls or integration of banks that we have acquired, as well as statements with respect to Seacoast’s objectives, expectations and intentions and other statements that are not historical facts.  Actual results may differ from those se t 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 and market conditions, including seasonality; 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 deman d, and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; 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 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, 2006 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, 2007, the Registrant held an investor conference call to discuss its financial results for the second quarter ended June 30, 2007.  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) containing information used in the conference call and incorporated herein by reference.  All information included in the transcript and the charts is presented as of June 30, 2007, 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, 2007 with respect to Seacoast Banking Corporation of Florida’s financial results for the second quarter ended June 30, 2007.
99.2	Transcript of Registrant’s investor conference call held on July 26, 2007 to discuss the Registrant’s financial results for the second quarter ended June 30, 2007.
99.3	Data on website containing information used in the conference call held on July 26, 2007 to discuss the Registrant’s financial results for the second quarter ended June 30, 2007.

8-K – page # of 5

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 30, 2007

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 30, 2007

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 SECOND QUARTER RESULTS

STUART, FL., July 25, 2007 – Seacoast Banking Corporation of Florida (NASDAQ-NMS:  SBCF), a bank holding company whose principal subsidiary is Seacoast National Bank, today announced 2007 second quarter net income of $4.81 million or $0.25 diluted earnings per share (“DEPS”) compared to $6.43 million or $0.34 DEPS for the second quarter of 2006.  

For the first six months, net income totaled $7.58 million or $0.39 DEPS, compared to $12.30 million and $0.68 DEPS earned in 2006.  Core operating earnings, excluding investment securities gains and losses, totaled $10.87 million for the first half of 2007 or $0.57 DEPS, compared to $12.30 million or $0.68 DEPS for the same period in 2006.  

“The reduced core earnings growth for the second quarter is attributable to an increase in the provision for loan losses and higher overhead as a result of our investment in people and processes which will allow for continued strong loan and deposit growth.  The Company has also experienced slowing revenue growth due to an unfavorable yield curve and the continued drag resulting from the unwinding of the residential real estate bubble.  We believe that during this time of economic adjustment, it is best to stick with successful strategies which assure future earnings growth over many years,” said Dennis S. Hudson, III, Chairman and Chief Executive Officer.  

“Our long-term perspective shows an increase in franchise value from growth in households serviced, enhancement of products and services offered, expansion in attractive markets and continued solid asset quality.  As a result of our expansion activities and opportunities created by acquisition disruptions in our core markets, revenue producing personnel were added during the second quarter.  While we can expect to continue to feel the effects of slowing economic conditions in South Florida over the remainder of this year, the activities we are undertaking to further develop our franchise are expected to produce meaningful improvements in earnings in 2008 and beyond.”  

Other significant items during the first half of 2007 included:

•

A team of bankers in Broward County Florida was added and they have already garnered $3 million in deposits, closed $11 million in commercial lines and added $90 million to the Company’s loan pipelines;

•

Three commercial lenders joined the Treasure Coast market team.  Two of the lenders were formerly with the largest community bank competitor that was recently acquired by National City.  They have built their loan pipelines and should have funded loan balances in the second half of 2007;

•

Total noninterest income excluding securities transactions grew by 9.4 percent over the first six months of 2007 compared to the same period in 2006;

•

Mortgage banking revenues increased $331,000 in the first half of 2007 compared to the first six months of 2006, but with higher mortgage interest rates, production for the second half of 2007 may slow;

•

The Company engaged a nationally recognized bank consulting firm to assist the board and management with strategic planning and overhead ratio improvement through revenue generation;

•

Second quarter average interest bearing deposits increased 8.3 percent annualized; however, negative changes in mix resulted as higher cost money market and time deposits grew at a higher rate;

•

Loan growth increased during the second quarter as anticipated.  Total loans at June 30, 2007 were up $80 million or 9.2 percent annualized for the first six months.  Commercial loan production for the second quarter totaled $151 million, compared to $76 million in the first quarter and $106 million for the second quarter of 2006.  With the added lending capabilities, management expects loan growth to be at the high end of the Company’s projected 8-10 percent range for the full twelve months; and

•

Net interest income (fully tax equivalent) totaled $21.5 million for the second quarter, up slightly from the first quarter on a $93 million smaller average earning asset base of $2.1 billion.  As predicted, the net interest margin improved to 4.09 percent for the second quarter as a result of the investment portfolio restructuring announced in the first quarter 2007.  

Nonperforming assets increased $14.9 million from a year ago and $3 million from year-end to $15.5 million or 0.85 percent of loans and other real estate owned outstanding at June 30, 2007.  The increase this quarter consisted of several loans secured with real estate.  As indicated last quarter, nonperforming loan balances will experience variability over the next few quarters. Net charge-offs remained low at $143,000 for the second quarter, compared to $125,000 for the first quarter 2007.  For the first six months, annualized net charge-offs as a percent of average loans totaled 0.03 percent compared to recoveries of (0.02) percent a year earlier.  The allowance for loan losses as a percentage of loans totaled 0.84 percent at June 30, 2007, compared to 0.76 percent one year earlier.

The provision for loan losses totaled $1.1 million, primarily as a result of the increased loan growth as noted above, as well as increased risk related to current market conditions.

Fully taxable net interest income for the second quarter 2007 was impacted by a smaller balance sheet as total deposit growth slowed as a result of normal seasonal trends and lower average balances for commercial customers that reduced noninterest bearing balances.  In addition, the increase in nonaccrual loans reduced the yield on average loans by approximately 8 basis points, while the cost of interest bearing deposits was up 19 basis points to 3.59 percent due to growth in higher cost deposit products.  As a result of the investment portfolio restructuring last quarter, the yield on average earning assets increased 18 basis points and the cost of total interest bearing liabilities increased by 5 basis points. This resulted in net interest margin increasing by 17 basis points to 4.09 percent from the first quarter 2007.  & nbsp;However, with the smaller balance sheet, net interest income increased only $36,000 compared to the first quarter when average earning assets were $93 million higher.  While net interest income is expected to grow during the remainder of the year due to loan growth, it is likely that the spread earned on the additional volumes will be lower than the second quarter’s net interest margin given a continued inverted yield curve.

During the second quarter, investments for the future were made by expanding into Ft. Lauderdale/Broward County, Florida, with the acquisition of a team of bankers from a successful nonpublic depository institution.  This overhead added a total of approximately $260,000 in expenses in the second quarter.  Other lending personnel additions increased salaries and wages by approximately $100,000 in the second quarter.  The added overhead caused the Company’s overhead ratio to increase to 69.5 percent in the second quarter and is expected to remain at this level for the remainder of 2007.  The added capabilities will allow us to produce more revenues and continue our growth and, if successful, will move the overhead ratio lower in 2008 as a result of greater revenue growth.  A similar strategy was utilized when th e Company entered the Palm Beach County market in late 2002.  The group of bankers deployed was successful in building a franchise in that market consisting of $370 million in loans at June 30, 2007 and funding totaling $92 million.

During the current quarter, fees related to marine loan production increased $130,000 or 18 percent compared to the first quarter for 2007, and added $856,000 to second quarter 2007 revenues.  Brokerage commissions and fees totaled $989,000 for the second quarter, an improvement over the 2007 first quarter results of $754,000.  Trust revenues increased to $663,000 for the second quarter, but were lower compared to the prior year’s results of $801,000, and stand at $1,290,000 at June 30, 2007, compared to $1,513,000 for the first six months of 2006.  Trust income in 2006 included fees related to estate management services for which there were no comparable fees so far in 2007.

Seacoast will host a conference call on Thursday, 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: 18327742; leader: Dennis S. Hudson).  Charts will be used during the conference call and may be accessed at Seacoast’s website at www.seacoastbanking.net by selecting Presentations under the heading Investor Services.  A replay of the call will be available beginning the afternoon of July 26 by dialing (877) 213-9653 (domestic), using the passcode 18327742.

Seacoast, with approximately $2.3 billion in assets, is one of the largest independent commercial banking organizations in Florida.  Seacoast has 43 offices in South and Central Florida and is headquartered on Florida’s Treasure Coast, which is one of the wealthiest and fastest growing areas in the nation.

- 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 future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast’s 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 and market conditions, including seasonality; 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 de posits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; 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 mor e 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 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, 2006 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)	2007		2006		2007		2006
Summary of Earnings
Net income	$      4,808	$	6,434	$	7,577	$	12,300
Net income, excluding securities        restructuring losses (5)	4,808		6,434		10,874		12,300
Net interest income  (1)	21,468		24,030		42,900		44,304
Performance Ratios
Return on average assets-GAAP earnings  (2), (3)	0.85	%	1.07	%	0.66	%	1.09	%
Return on average tangible assets (2), (3), (4), (5)	0.91		1.13		1.00		1.14
Return on average shareholders’ equity -
GAAP earnings (2), (3)	8.81		12.43		7.00		13.53
Return on average tangible shareholders’ equity (2), (3), (4), (5)	12.43		17.85		14.12		18.48
Net interest margin  (1), (2)	4.09		4.29		4.01		4.23
Per Share Data
Net income diluted-GAAP earnings	$       0.25	$	0.34	$	0.39	$	0.68
Net income basic-GAAP earnings	0.25		0.34		0.40		0.69
Net income diluted-excluding securities  restructuring losses (5)	0.25		0.34		0.57		0.68
Net income basic-excluding securities    restructuring losses (5)	0.25		0.34		0.57		0.69
Cash dividends declared	0.16		0.15		0.32		0.30

		June 30,					Increase/
		2007		2006			(Decrease)
Credit Analysis
Net charge-offs (recoveries) year-to-date	$	268	$		(156	)	n/m
Net charge-offs (recoveries) to average loans		0.03	%		(0.02	)%	n/m
Loan loss provision year-to-date	$	557	$		560		(0.5	)%
Allowance to loans at end of period		0.84	%		0.76	%	10.5
Nonperforming assets	$	15,495	$		588		2,535.2
Nonperforming assets to loans and other
real estate owned at end of period		0.85	%		0.04	%	2,025.0
Selected Financial Data
Total assets	$	2,260,173	$		2,415,242		(6.4	)
Securities – Trading (at fair value)		26,690			0		n/m
Securities – Available for sale (at fair value)		183,132			367,766		(50.2	)
Securities – Held for investment (at amortized cost)		33,863			141,734		(76.1	)
Net loans		1,797,883			1,602,405		12.2
Deposits		1,867,191			2,028,605		(8.0	)
Shareholders’ equity		217,071			202,843		7.0
Book value per share		11.32			10.70		5.8
Tangible book value per share		8.35			7.68		8.6
Average shareholders' equity
to average assets		9.38	%		8.09	%	15.9
Average Balances (Year-to-Date)
Total assets	$	2,328,427	$		2,267,127		2.7
Less: Intangible assets		57,268			45,996		24.5
Total average tangible assets	$	2,271,159	$		2,221,131		2.3
Total equity	$	218,430	$		183,306		19.2
Less: Intangible assets		57,268			45,996		24.5
Total average tangible equity	$	161,162	$		137,310		17.4

(1)

Calculated on a fully taxable equivalent basis.

(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) on available for sale securities are not included in net income.

(4)

The Company believes that return on average assets and equity excluding the impacts of noncash amortization expense on intangible assets is a better measurement of the Company’s trend in earnings growth.

(5)

Excluding securities restructuring losses of $5,118 (or $3,297, net of taxes) recorded in the first quarter 2007.

n/m = not meaningful

CONDENSED CONSOLIDATED BALANCE SHEETS  (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
		June 30,			December 31,			June 30,
(Dollars in thousands)			2007		2006				2006
Assets
Cash and due from banks	$		66,067	$		89,803	$		70,177
Federal funds sold and other investments			15,190			2,412			100,514
Total Cash and Cash Equivalents			81,257			92,215			170,691
Securities:
Trading (at fair value)			26,690			0			0
Available for sale (at fair value)			183,132			313,983			367,766
Held for investment (at amortized cost)			33,863			129,958			141,734
Total Securities			243,685			443,941			509,500
Loans available for sale			4,204			5,888			3,362
Loans, net of unearned income			1,813,087			1,733,111			1,614,646
Less: Allowance for loan losses			(15,204)			(14,915)			(12,241)
Net Loans			1,797,883			1,718,196			1,602,405
Bank premises and equipment, net			38,688			37,070			37,320
Other real estate owned			288			0			139
Goodwill and other intangible assets			57,019			57,299			57,149
Other assets			37,149			34,826			34,676
	$		2,260,173	$		2,389,435	$		2,415,242
Liabilities and Shareholders’ Equity
Liabilities
Deposits
Demand deposits (noninterest bearing)	$		352,702	$		391,805	$		488,535
Savings deposits			885,851			929,444			1,000,385
Other time deposits			345,047			325,251			312,209
Time certificates of $100,000 or more			283,591			244,518			227,476
Total Deposits			1,867,191			1,891,018			2,028,605
Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days			96,927			206,476			104,941
Borrowed funds			14,521			26,522			26,218
Subordinated debt			53,610			41,238			41,238
Other liabilities			10,853			11,756			11,397
			2,043,102			2,177,010			2,212,399
Shareholders' Equity
Preferred stock			0			0			0
Common stock			1,914			1,899			1,897
Additional paid in capital			90,748			88,380			86,997
Retained earnings			126,293			124,811			119,108
Treasury stock			(34)			(310)			(121)
			218,921			214,780			207,881
Accumulated other comprehensive loss, net			(1,850)			(2,355)			(5,038)
Total Shareholders’ Equity			217,071			212,425			202,843
	$		2,260,173	$		2,389,435	$		2,415,242
Common Share Outstanding			19,172,239			18,974,295			18,958,534

Note:  The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date.

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)				2007		2006		2007		2006
Interest on securities:
Taxable	$			3,566	$	6,120	$	8,305	$	11,517
Nontaxable				93		94		186		109
Interest and fees on loans				32,930		28,976		65,480		51,987
Interest on federal funds sold and other investments				662		1,018		913		2,353
Total Interest Income				37,251		36,208		74,884		65,966
Interest on deposits				5,937		4,837		11,499		8,176
Interest on time certificates				7,511		5,206		14,279		9,298
Interest on borrowed money				2,399		2,203		6,334		4,281
Total Interest Expense				15,847		12,246		32,112		21,755
Net Interest Income				21,404		23,962		42,772		44,211
Provision for loan losses				1,107		280		557		560
Net Interest Income After Provision for Loan Losses			20,297			23,682		42,215		43,651
Noninterest income:
Service charges on deposit accounts				1,928		1,801		3,661		3,043
Trust income				663		801		1,290		1,513
Mortgage banking fees				416		331		871		540
Brokerage commissions and fees				989		1,042		1,743		1,818
Marine finance fees				856		868		1,582		1,661
Debit card income				597		558		1,165		1,021
Other deposit based EFT fees				116		102		247		199
Merchant income				721		619		1,477		1,298
Other income				430		397		896		730
				6,716		6,519		12,932		11,823
Securities restructuring losses				0		0		(5,118	)	0
Securities gains (losses), net				26		(97	)	24		(86)
Total Noninterest Income				6,742		6,422		7,838		11,737
Noninterest expenses:
Salaries and wages				8,453		8,443		16,349		14,862
Employee benefits				2,032		1,769		3,719		3,569
Outsourced data processing costs				1,956		2,180		3,901		3,929
Occupancy				1,919		2,062		3,793		3,595
Furniture and equipment				699		591		1,351		1,127
Marketing				793		926		1,493		1,843
Legal and professional fees				843		699		1,675		1,236
FDIC assessments				56		79		114		138
Amortization of intangibles				314		321		629		440
Other				2,836		2,806		5,580		5,246
Total Noninterest Expenses				19,901		19,876		38,604		35,985
Income Before Income Taxes				7,138		10,228		11,449		19,403
Provision for income taxes				2,330		3,794		3,872		7,103
Net Income		$		4,808	$	6,434	$	7,577	$	12,300
Per share common stock:
Net income diluted		$		0.25	$	0.34	$	0.39	$	0.68
Net income basic				0.25		0.34		0.40		0.69
Cash dividends declared				0.16		0.15		0.32		0.30
Average diluted shares outstanding				19,221,438		19,103,077		19,188,343		18,200,400
Average basic shares outstanding				18,955,848		18,727,475		18,957,989		17,825,416

CONSOLIDATED QUARTERLY FINANCIAL DATA   (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
				Quarters
				2007								2006						Last 12
(Dollars in thousands, except per share data)				Second			First					Fourth		Third				Months
Net income			$	4,808	$		2,769	$			5,685		$		5,869	$		19,131
Net income, excluding securities restructuring losses (5)				4,808			6,066				5,685				5,869			22,428
Operating Ratios
Return on average assets-GAAP earnings (2), (3)				0.85	%		0.47	%			0.95		%		0.99	%		0.82	%
Return on average tangible assets (2), (3), (4), (5)				0.91			1.09				1.01				1.05			1.02
Return on average shareholders' equity-GAAP earnings  (2), (3)				8.81			5.16				10.57				11.03			8.89
Return on average tangible shareholders’ equity (2), (3), (4), (5)				12.43			15.83				14.87				15.64			14.68
Net interest margin  (1), (2)				4.09			3.92				3.95				4.22			4.05
Average equity to average assets				9.62			9.15				8.99				8.98			9.18
Credit Analysis
Net charge-offs			$	143		$	125		$		27		$		23		$	318
Net charge-offs to average loans				0.03	%		0.03	%			0.01		%		0.01	%		0.02	%
Loan loss provision			$	1,107	$		(550)			$	2,250		$		475	$		3,282
Allowance to loans at end of period				0.84	%		0.82	%			0.86		%		0.77	%
Nonperforming assets			$	15,495	$		4,088	$			12,465		$		10,437
Nonperforming assets to loans and other real estate owned at end of period				0.85	%		0.23	%			0.72		%		0.63	%
Nonaccrual loans and accruing loans 90 days or more past due to loans outstanding at end of period				0.89			0.27				0.72				0.71
Per Share Common Stock
Net income diluted-GAAP earnings	$			0.25	$		0.14	$			0.30		$		0.31	$		1.00
Net income basic-GAAP earnings				0.25			0.15				0.30				0.31			1.01
Net income diluted-excluding securities  restructuring losses (5)				0.25			0.32				0.30				0.31			1.18
Net income basic-excluding securities restructuring losses (5)				0.25			0.32				0.30				0.31			1.18
Cash dividends declared				0.16			0.16				0.16				0.15			0.63
Book value per share				11.32			11.34				11.20				10.99
Average Balances
Total assets		$		2,277,678	$		2,379,739	$			2,372,784		$		2,350,862
Less:  Intangible assets				57,322			57,213				56,230				56,945
Total average tangible assets		$		2,220,356	$		2,322,526	$			2,316,554		$		2,293,917
Total equity		$		219,020	$		217,834	$			213,354		$		211,024
Less:  Intangible assets				57,322			57,213				56,230				56,945
Total average tangible equity		$		161,698	$		160,621	$			157,124		$		154,079

(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) on available for sale securities are not included in net income.

(4)

The Company believes that cash operating earnings excluding the impacts of noncash amortization expense on intangible assets is a better measurement of the Company’s trend in earnings growth.  

(5)

Excludes securities restructuring losses of $5,118 (or $3,297, net of taxes) recorded in first quarter 2007.

CONSOLIDATED QUARTERLY FINANCIAL DATA   (Unaudited) (continued)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

(Dollars in thousands)

SECURITIES		June 30, 2007				December 31, 2006				June 30, 2006
U.S. Treasury and U. S. Government Agencies	$		26,690	$			0	$			0
Securities – Trading			26,690				0				0
U.S. Treasury and U. S. Government Agencies			35,044				94,676				106,266
Mortgage-backed			143,325				214,661				257,639
Obligations of states and political subdivisions			2,071				2,049				2,020
Other securities			2,692				2,597				1,841
Securities – Available for Sale			183,132				313,983				367,766
											< /TD>
Mortgage-backed			27,693				123,587				135,101
Obligations of states and political subdivisions			6,170				6,371				6,633
Securities – Held for Investment			33,863				129,958				141,734
Total Securities	$		243,685	$			443,941	$			509,500
LOANS		June 30, 2007			December 31, 2006						June 30, 2006
Construction and land development	$		601,552	$			571,133		$		511,480
Real estate mortgage			991,320				949,824				893,950
Installment loans to individuals			79,616				83,428				87,408
Commercial and financial			139,014				128,101				121,330
Other loans			1,585				625				478
Total Loans	$		1,813,087	$			1,733,111		$		1,614,646

AVERAGE BALANCES, YIELDS AND RATES  (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

		2007								2006
		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	$	267,308	5.34	%	$	427, 743	4.43	%	$	567,572	4.31	%
Nontaxable		8,323	6.58			8,390	6.53			8,666	6.42
Total Securities		275,631	5.37			436,133	4.47			576,238	4.34
Federal funds sold and other investments		48,140	5.52			16,284	6.25			86,260	4.73
Loans, net		1,783,156	7.41			1,747,797	7.52			1,586,597	7.33
Total Earning Assets		2,106,927	7.10			2,200,214	6.92			2,249,095	6.47
Allowance for loan losses		(14,358)				(14,973)				(12,059	)
Cash and due from banks		70,274				77,101				74,788
Premises and equipment		38,445				37,646				32,771
Other assets		76,390				79,751				75,088
	$	2,277,678		$		2,379,739		$		2,419,683
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW	$	170,588	2.61	%	$	195,025	2.38	%	$	219,871	1.54	%
Savings deposits		121,159	0.71			130,985	0.71			166,563	0.74
Money market accounts		591,403	3.13			567,647	2.99			608,601	2.43
Time deposits		617,905	4.88			576,972	4.76			533,577	3.91
Federal funds purchased and other  short-term borrowings		110,123	4.40			225,805	4.95			105,140	4.12
Other borrowings		67,816	7.04			67,772	7.05			67,533	6.68
Total Interest-Bearing Liabilities		1,678,994	3.79			1,764,206	3.74			1,701,285	2.89
Demand deposits (noninterest-bearing)		370,953				387,299				496,308
Other liabilities		8,711				10,400				14,535
Total Liabilities		2,058,658				2,161,905				2,212,128
Shareholders' equity		219,020				217,834				207,555
	$	2,277,678		$		2,379,739		$		2,419,683
Interest expense as a % of earning assets			3.02	%			3.00	%			2.18	%
Net interest income as a % of earning assets			4.09				3.92				4.29

(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

July 26, 2007

Page #

EXHIBIT 99.2

To 8-K dated July 30, 2007

Second Quarter Earnings Release

Seacoast Banking Corporation

18327742

Dennis S. Hudson

July 26, 2007

10:00 a.m. Eastern Time

Operator:

Good morning ladies and gentlemen and welcome to the Second Quarter Earnings Release.  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 will now turn the call over to Mr. Dennis Hudson.  Mr. Hudson, you may begin.

Dennis Hudson:

Thank you very much and welcome to our Second Quarter 2007 Earnings Conference Call.  Before I begin, I’d like to direct your attention to the statement contained at the end of our press release regarding forward statements. During the call we may be discussing certain issues that constitute forward-looking statements within the meaning of the Securities and Exchange Acts and accordingly our comments are intended to be covered within the meaning of Section 27A of that Act.  We’ve also posted a few slides on our website that we’ll refer to in our comments.  Feel free to visit seacoastbanking.net and click on Presentations at the bottom of the Investor Relations listing to view those slides as we continue on with our comments.  With me today are Bill Hahl, our Chief Financial Officer; as well as Doug Gilb ert, our Vice Chairman and Chief Credit Officer; and also with us today is Russ Holland, our Executive Vice President in charge of commercial lending.  All of us will be here and available to answer questions following a few remarks.  

This continues to be a difficult year for Seacoast.  This quarter our operating earnings (pre-provision) were roughly flat with the first quarter of the year.  The slowing residential real estate market in South Florida, combined with a difficult interest rate environment continues to affect our revenue growth and our deposit growth.  Overhead also grew this quarter as we continued the build out of our new team in Fort Lauderdale and as we continued our previously announced efforts to take advantage of the market disruption that has occurred in our Treasure Coast market.  You’ll recall that our two largest local competitors were acquired earlier this year by National City Corporation in Cleveland, Ohio.  We were successful late last quarter and this quarter in recruiting a number of new production personnel as a result and we are pleased with the impact this is having on building our new business pipelines.  

Loan growth this quarter remains strong and continued to be in the 8% to 10% range that we have been projecting since the beginning of the year.  Our success in growing deposits, both out of the disruption discussed earlier and through our market expansion, has been offset with a continuation of a difficult environment.  While our South Florida markets seem to have worked through a great deal of the effects of the slowing residential real estate market and the impact this had on core deposit growth, we continue to see average balance declines during the quarter, particularly in the Orlando market which seem to feel these effects a little later than South Florida.  

During the quarter our provision for loan losses totaled $1.1 million. This represented an increase over the prior quarter and was partly due to loan growth and also due to continuing soft market conditions.  We continue to believe that there will be some lumpiness in the level of non-performing assets in the coming quarters, just as we have seen over the past three quarters. Charge-offs remain very low at only 3 basis points this year and are expected to remain low given the secured nature of our lending activities.  

In South Florida, we continue to see signs of improvement with regard to the residential real estate market, which could suggest we are nearing the end of the impact this has had on our deposit growth.  Bear in mind, however, that we also are in our summer season and will not likely see deposit growth until late this year and early 2008.  

Now I’d like to turn the call over to Bill who will make a few additional comments before we open it up for a few questions.  

William Hahl:

Thank you Denny.  My comments this morning will cover revenue growth, loan growth, deposit costs and growth, credit quality impacts, and overhead.  Total revenues for the quarter were $28.2 million, up $536,000 over the first quarter.  Noninterest income improved with increased revenues from wealth management fees, marine finance fees, and service charges on deposits.  Net interest income was up as net interest margin increased, as predicted, from our investment securities restructuring in the first quarter.  The net interest margin increase was in line with our forecast, which was 17 basis points higher at 4.09% for the quarter.  Interest income from loans was up $380,000 or 2.35% linked quarter unannualized with improved loan growth of $70 million during the quarter and total year-to-date loan growth of $8 0 million, which is an annualized 9.2% increase for the first six months.  

Commercial loan production during the quarter was very good and totaled $115 million, up from $76 million in production in the first quarter.  These loan growth characteristics are consistent with our prior guidance suggesting that we expected loan growth for the year to be in the high single digits and would likely experience lumpy quarter-to-quarter growth as a result of unpredictable loan pay downs on completed residential construction projects.  We now believe the loan growth for the year should be at the high end of our forecast, which was 8% to 10%.  

Costs of deposits, as Denny mentioned, have increased during the quarter.  They were up 19 basis points on a linked quarter basis from first quarter, and that was an increase over the 15 basis points.  This resulted primarily from noninterest bearing deposit declines due to normal seasonal runoff and some result of the slowing real estate markets impact, as Denny mentioned, affecting the Orlando region.  In addition, deposit pricing and the return of aggressive CD offerings by competitors caused deposit migration to accelerate during the quarter.  The deposit cost negative impacts will continue to squeeze current spreads on earning assets; therefore, net interest income growth will come entirely as a result of future loan growth.  We believe that the margin will remain under pressure from the same deposit issues during the remainder of 2007.  Average interest bearing deposit growth, as Denny mentioned, was very good in the second quarter at 8.3%, but was offset by declines in the noninterest bearing balances.  We expect deposit growth to continue to be challenged by the weak residential markets and further declines to occur as construction projects are completed and escrow deposits are withdrawn. Offsetting will be the new deposits from our expanded markets and success with our marketing and selling to new National City customers.  One quick success story related to the National City:  This quarter, we successfully obtained a deposit relationship of a local municipality and these balances, in excess of $10 million, will transfer during the third quarter 2007.  We have had many other smaller successes as well.  

Credit quality measured by net charge-offs remained excellent for the quarter at only $143,000 and so far year-to-date at $268,000.  However, nonperforming assets increased $14.9 million from a year ago to $15.5 million for a 0.85% of loans and other real estate owned.  As indicated last quarter, non-performing balances would experience variability over the next few quarters and consequently have negative impacts on the current net interest margin. This quarter’s NPAs reduced net interest income by over $300,000.  We remain confident that while non-performing loans will vary, losses will be minimal as a result of our underwriting standards, our collateral positions, and personal guarantees. I remind everyone that the Company recaptured $550,000 of its loan loss provision in the first quarter related to the full paymen t, including past due interest, of an $8 million nonperforming asset.  This quarter the provision was primarily based upon loan growth, as well increased risk related to current market conditions, and totaled $1.1 million.  Therefore, the swing in GAAP earnings quarter-to-quarter was $1.650 million from provisioning.

On our website we have posted a slide for this call disclosing pro forma operating results for the first two quarters without the non-cash provision of $1.1 million after-tax compared to the first quarter’s recapture of $550,000 after-tax.  Please refer to this table.  This exercise discloses that the net second quarter operating earnings pre-provision was only $150,000 lower than the operating earnings for the first quarter.  We are not suggesting that loan loss provisioning will go away. The point is that we have increased our capacity to grow revenues and the increase cash revenues have nearly offset the added cash overhead during the second quarter.  

I will move on now to discuss the added overhead and where we believe we are headed for the remainder of this year and next. With the exception of salaries and benefits, overall expenses were in line with expectations.  We have always recognized that our number one strategic challenge to continue profitable growth is our ability to attract and retain the best banking professionals. During the first and second quarters, we hired several additional loan producers and other key personnel.  We believe these overhead additions have already resulted in  improved loan growth and fee income generation with commercial loan growth exceeding expectations, and has largely offset the weaker residential loan growth and slower fee generation.  Because of the size of this overhead add and slower revenue growth, the overhead ratio inc reased to 69.5% for the second quarter.  While significant progress in revenue generation, primarily in the commercial lines, will be evident from these personal investments during the second half, we believe that unfavorable residential market conditions, other factors impacting revenue growth, and further staff additions will most likely not allow the overhead ratio to decline meaningfully until the first quarter of 2008.  I want to add also that this added capacity to make loans and gather deposits, particularly as we have enhanced personnel on the Treasure Coast, also enhances our opportunity to benefit over the next 12 months from the over $1.3 billion in community bank deposits and loan relationships that transferred to National City in the first quarter this year.  

I’ll turn it back to Denny for any further comments.

Dennis Hudson:

Thanks Bill.  As you have seen, the challenges we have been facing over the past few quarters remain with us today and are likely to remain with us over the balance of the year.  The effects of the negative real estate market have been more impactful than many have anticipated.  Combining together a smaller balance sheet and higher overhead has produced disappointing results this quarter.  Moving forward, we remain committed to improving our revenue momentum as our expansion efforts and the disruption begins to produce greater results.  Seacoast remains the leading bank franchise headquartered in the State of Florida and, despite the challenges of the past few quarters, will continue to grow our franchise and in so doing build value for our shareholders.  

There are two additional issues I thought I would discuss before we open up for questions.  First of all, the allowance for loan losses:  As Bill said, a little over half the provisioning for this quarter was related to loan growth.  That said, we also believe that economic conditions remain soft.  We saw our NPAs increase back to the level they were two quarters ago and these types of facts continue to weigh on the factors we use to guide our provisioning.  As you all know, we took a $2.2 million provision in the fourth quarter of last year following a rigorous review of our commercial real estate and construction portfolios.  This action was necessary given the market conditions we saw, and early identification of potential problems is the best course to effectively mitigate loss exposure. I would remind a ll of you that we were among the earliest companies to take this kind of action.  We have had good success since that date, and we intend to be among the first to show improvement as we move forward.

Second of all, I just wanted to say that we are not alone when it comes to feeling the impact of the difficult interest rate environment and the impact of an unwinding of an overvalued real estate market.  We are, however, unique in one very important way.  We remain the only traded bank in the state that has nurtured and grown a robust customer base, both commercial and retail with dominant market share, in markets that will continue to grow significantly in coming years.  We possess today true franchise value, something that is very rare; and that value is under pressure given the difficult environment we find ourselves in, but the core fundamentals remain unchanged for Seacoast.  We remain concentrated in Florida’s top growth markets. We have maintained strong market share. Our fundamental growth and custome r relationships is strong and is showing signs of accelerating. The challenges we face today are common to others in our industry.  If we were to ever at some point consider a sale of our Company, it seems to me we would want to do so at a time in the future when our performance is in better alignment with our long-term prospects.  Today’s environment makes that very difficult to achieve.  We have a talented and experienced management team and that team is focused on delivering higher levels of performance as we move out of the current environment and into 2008.  

With that, I’ll turn the call over to 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 speakerphone, you may need to pickup the handset first before pressing the numbers. Once again, if there are any questions, press star then one.  

Thank you.  At this time we do have Jennifer Thompson from Oppenheimer; please go ahead.

Jennifer Thompson:

Hi. Good morning everyone.

Dennis Hudson:

Good morning.

William Hahl:

Morning Jen.  

Jennifer Thompson:

I missed the first couple minutes, so I apologize if you have talked about this, but the non-performers that went on additionally this quarter, just looking for a little bit more color:  maybe in terms of size, what happened there, are there any specific reserves set against those loans, that type of thing?

Denny Hudson:

Very simply put, the increase this quarter was primarily concentrated in commercial real estate and loans that are secured with commercial real estate property.  There was also a small amount of residential but very, very small that went non-performing this quarter. Those represent credits that are further down the road in terms of resolution moving towards foreclosure and we have looked very carefully at values and guarantors and the like and feel very confident in carrying them at book value.   

Jennifer Thompson:

Okay.  What’s the average size of the loans in non-performers, approximately?

Dennis Hudson:

They range from a couple hundred thousand dollars to $8 million.  There were a number of loans.  We have not disclosed the exact information there, but I think that gives you a flavor for what we are looking at.

Jennifer Thompson:

Okay, I mean you guys did and you were the first to talk about going through the portfolio very carefully and scrubbing it but… Just your kind of thoughts on, we are standing here now in the second quarter and there’s maybe some additional non-performers, additional reserve build. What has changed in your mind versus what you guys were looking at in the fourth quarter from a macro perspective?

Dennis Hudson:

Probably what has changed is that things haven’t improved; conditions remain very tough.  We continue to work, even after that work that we did in the second half of last year that resulted in a large provision in the fourth quarter.  The key focus there was to begin working on potential problems.  As those potential problems move forward and get worked hard and very aggressively by us, often you’re going to see them go non-performing. They are going to move into foreclosure and the like and move, again, forward to liquidation.  Our whole focus is on getting any potential problem credit resolved either through a liquidation process with a borrower or through other means to improve the condition of it. So I think it’s just a natural evolution as we continue to go forward and work these issues.  I do n’t think it’s anything different than is happening in a lot of organizations, particularly in South Florida, and in Florida and some of the Sunbelt states given the activity that’s gone on here over the last several years.  

Jennifer Thompson:

Great.  Just one last question, the mention of hiring of the consulting firm, just what are the types of things that you guys are looking at and what was the thought process behind going in that direction?

Dennis Hudson:

We are, and have been for the last six or seven months, doing some work, some consulting work and it’s primarily in the area of strategic planning, looking at the potential that exists in the markets we’ve carved out for ourselves, looking at the various business lines that we are currently delivering in those markets, and focusing better attention on what we can do to fully benefit from the franchise we’ve developed here in the state and what sort of expectations we ought to have going forward as we develop those plans for performance. So that’s what we are working on there, but more of a strategic look.  We are now at the point of bringing it down to more detailed information.  As we have better information to share with you regarding our longer term outlook, we are certainly going to do that.

Jennifer Thompson:

Great. Thanks very much guys.

Dennis Hudson:

Thanks Jen.

Operator:

Thank you. Our next question comes from Eric Ether from Morgan Stanley; please go ahead.

Eric Ether:

Yes, hi gentlemen.

William Hahl:

Good Morning.

Eric Ether:

My question concerns… I live here in the Pacific Northwest, a long ways from where you guys are, but I’m familiar with your area.  I understand that Piper, that is a major employer in the area that you serve, may be leaving the area.  There’s some sort of referendum scheduled for this fall, I believe. Can you comment on that and how significant a blow it would be to you folks if they were to leave and move to Oklahoma?

Dennis Hudson:

Well first of all, we don’t have a lot of large employers in these markets. The economy in this part of Florida is largely service-based economy. The Piper operations is located in Vero Beach and is relatively small.  I’m sorry, I don’t have all of the details to give you the specifics on that, but I’m going to say that their employment base there is 500 or 600 people—it is not a huge number.  It is not altogether clear that they would be leaving, but they are looking at a variety of options.  I know the State of Florida has done a tremendous job bringing to bear a lot of incentives to keep Piper there, but it’s something that will unfold over the next year and a half or so.  

I will give you another example though: We had in another area of our market, where we are headquartered, a long 30-year relationship with another aircraft frame manufacturer.  They announced plans to close that plant after diligently working with them for several years here in the local municipality.  Again, we are only talking 500 to 600 people in that plant.  By the way, those would comprise the only large employers, manufacturing employers, in this area of Florida.  Here it is five years after that occurred and they have actually started to expand their presence here and ended up not leaving after all of that.  So it’s all very speculative and it’s fairly inconsequential.  

A more significant development for us in this area of Florida though has been the entry, which has been led by the State, of attracting new biotech firms into this area. We had one very significant development that is occurring right now and that’s: first of all, Scripps Research—which you may be familiar with, south of you in La Jolla, California—is opening and under construction as we speak in Northern Palm Beach County with a very significant facility.  In St. Lucie County another firm, Torrey Pines Institute, is moving their headquarters from Torrey Pines here to St. Lucie County and that building is now under construction as of about two months ago.  So we have some good developments in the biotech area that I think will be very helpful for our economy.      

Eric Ether:

Okay, second question, if I might, on an unrelated issue.  You mentioned that National City within the last year or two had bought out two of your local competitors.

Dennis Hudson:

Yeah..

Eric Ether:

Can you tell me what multiple of book value they paid for those competitors?

Dennis Hudson:

It was a significant premium and I don’t have it off the top of my head, but it was probably on the order of three times book or better.  

Eric Ether:

Okay, would that be times tangible book?

Dennis Hudson:

Sure.

Eric Ether:

Thank you.

Dennis Hudson:

Thank you very much.

Eric Ether:

Thank you.  

Operator:

Thank you. Our next question comes from David Bishop from Stifel Nicolaus; please go ahead.

David Bishop:

Yeah, good morning, gentlemen.  How you doing?

Dennis Hudson:

Hey Dave.

David Bishop:

Hey, quick follow-up on Jen’s question regarding some of the increases in the non-performing loans: Were they.. was there any identification of them during the fourth quarter scrubbing? Were these on the watch list or special mention list? — I mean these credits you had been identifying?  Or were these just something that slipped into non-performing relatively quickly due to market conditions or lack of sales or what have you?  Maybe give us some color on that.

Dennis Hudson:

No, these were all identified probably in the second and third quarter of last year as being potential problems.  

David Bishop:

And were specific reserves set up then or is that something you can disclose in terms of…

Dennis Hudson:

Well, you know, again, our portfolio is secured with real estate and the thing to keep our eyes on are whether the original equity requirements that we had going in still keep us in good shape when it comes to valuation.  We are continuously looking at valuations of real estate that are the underlying collateral for loans, including all of the loans that we marked to non-accrual this quarter.  All I can tell you is that we feel comfortable about those valuations.  There have been certainly declines evident, but fortunately the equity requirements going in were such that it kept us in good shape, so we do not have specific valuation numbers associated necessarily with those credits. The provision that we took in the fourth quarter and a portion of the provision this quarter—and I’d remind everybody that a little m ore than half the provision this quarter was really more focused on the growth that we have had in the portfolio—the balance of it was due to various qualitative factors that we measure through time, but none of it was driven by the potential for loss.  So I hope that helps out.

David Bishop:

I think you made a comment in the preamble, there was some glimmers of hope, at least maybe I interpreted it wrong, misinterpreted it, on the residential market. I’d be curious to hear what drove that statement or…

Dennis Hudson:

If you go back to our call last quarter, we talked a lot about where we saw the residential market and there was actually a slide on that call—we probably should have reposted it this time—that depicts where we have been the last few years and where we are now and where we see us going in terms of market conditions.  At the last call I said that we were beginning to see some positive signs in the residential market, and I would say those signs continue with us this quarter.  The amount of residential new product being delivered in every market that Seacoast operates in has fallen dramatically—and there has been in the first quarter a pretty sizeable pickup in sales activity that is continuing right now—but it’s still at a very anemic level.  So you have seen things bottom out in terms of sales acti vities, and you have seen the pipeline of new products beginning to shrink really for the first time since we bumped into this issue.  So it’s clear that is happening. Having said that, I don’t think it’s going to bounce; it’s just going to slowly build over the next couple of years to a more normal condition. In the meantime, to the extent we have assets that we are concerned about, loans that we are concerned about, we will have to just continue to work through those and work with them.  But we are clearly seeing signs.  I mean there’s no doubt that conditions have improved.  Inventory levels are now coming down, but the sales activity is still at a level that one would consider slow, although improved over, in particular, the third and fourth quarters of last year.

David Bishop:

Then one final question here. In regards to second half loan growth and the funding there, obviously it sounded like there was a combination of seasonal outflows and housing related outflows in terms of DDA balances and other deposits. How should we think about the funding of second half loan growth?  Is that going go be a function of wholesale deposits or borrowings, or is that going to be continued securities runoff?  Thanks.

William Hahl:

Well, we are going to be challenged over the second half of the year, particularly since we are running into our slowest seasonal time for deposits, the third quarter.  However, we have had some pretty good growth, as noted by the 8.3% interest bearing core deposit growth in the second quarter, so we are beginning to see some successes from the expanded markets that we are operating in offsetting some of these outflows.  So I think it’s going to be a combination of deposit growth and probably wholesale funding, because we believe that as we continue to ramp up our capabilities in the other markets—our current market is generating more loans than deposits—that we will be replacing temporary wholesale funding with deposit growth.  

David Bishop:

Thanks.   

Operator:

Thank you. Our next question comes from Christopher Marinac from Fig Partners; please go ahead.

Christopher Marinac:

Thanks.  Good morning.

Dennis Hudson:

Morning.

Christopher Marinac:

Denny, did I hear you correctly that you’re having difficulty in Orlando on deposits?  I just wanted to clarity that.

Dennis Hudson:

No, what I was saying was that what we saw over the last six to nine months in South Florida—which continued even this quarter but at a smaller rate—was a decline in average balances, and it was primarily focused on some of the commercial categories.  We have been talking for several quarters, Chris, about how that is clearly related to the slowing residential real estate market and the impact that has had on escrow balances and the like that we hold for various customers, whether they be title companies, or builders, realtors, attorneys, and the like.  I was just commenting that we saw some average balance decline.  We did not see average balance declines quite as significantly in the Orlando market until more recently in the cycle, a little bit last quarter and a little more this quarter.  So I was just co mmenting that we had, we believe, the real estate effect was a little delayed as you moved into the central part of the state, which is consistent with all our anecdotal information.  

Christopher Marinac:

So in terms of the team you have there and the opportunities going forward, is that still as good as ever?

Dennis Hudson:

Right.

Christopher Marinac:

Okay, very good.  Then my follow-up is just a more macro question about house prices that you are seeing in actual sales. There’s a statement made at another conference call this morning that house prices really haven’t changed in South Florida. I want to know specifically within your counties on the coast, what you are seeing, and what actual transactions have been posted?

Dennis Hudson:

It depends on the house.  My sister bought a house about a week ago or two weeks ago at a significant discount over the price paid for a similar house down the street two years ago.  But when you look at it carefully, there was a significant increase in value that was felt two years ago and that’s all been given back now. There are other markets and neighborhoods where you’ll see much more reasonable price softening out there.  There’s no doubt that prices are down.  You have seen numbers anywhere from in the teens to the 20s.  Wouldn’t you agree, Russ?

Russ Holland:

Yeah, and it does depend on the area.

Dennis Hudson:

…but it really does depend on the area and frankly on what kind of appreciation they saw over the last three or four years.  Some of the large builder projects that were thrown up at the last minute by some of the national builders at super premium pricing at the tippy top of everything are going to be the ones that are hurt the most.  But on the used side, you just haven’t seen a wholesale collapse of pricing. I think things are stable and are remaining stable, fairly stable. But there’s clearly been 15-18% sort of generalized decline in value.  

Christopher Marinac:

Great. Thank you very much.

Operator:

Thank you. Our next question comes from Matt Olney from Stephens Incorporated; please go ahead.

Matt Olney:

Yes, I’d like to ask for some more commentary on asset quality by market, maybe a comparison of your core market in Treasure Coast compared to the newer market in Orlando and down south where you have also entered in the Broward County.  Thanks.

Dennis Hudson:

Well, there’s really no story there. The asset quality issues will continue or the non-performing assets will continue to fluctuate as we resolve issues and move them through the process.  I don’t know that there’s any particular market that would give us concern or that would represent a bigger piece of that. It’s still a relatively small number, what, $18 million or so in non-performing assets—excuse me, $15 million in non-performing assets.  It has not been in our new markets. These are credits that we have been dealing with for many years.

Matt Olney:

So in terms of your maybe watch loans, you don’t see any kind of concentration either, same story?

Dennis Hudson:

Yes, I’d say it’s very much the same story: a very balanced sort of portfolio of loans that we continue to work carefully.

Matt Olney:

Okay, and my follow-up question, just do you expect to… Well, first of all, are you still pursuing some producers from competitors like National City or some other organizations out there; and if so, do you expect some additional producers to come online in the back half of ’07 or maybe even in ’08?

Dennis Hudson:

We continue to be vigilant and look for those opportunities and we have some activities that we are currently undertaking, but we have done a fair amount of work in the first half of the year and I think the bulk of that work is behind us.  We are now just continuing to focus on building our pipelines.  I’d like to point out that the loan growth that we’re producing obviously, clearly, has very little to do with residential development—in fact nothing to do with residential development at the moment.  It tends to be more focused in the commercial real estate areas.  The real focus that we have, and the reason we have been talking about this, is that we’re looking to acquire deep robust new relationships with existing companies and existing people in our existing footprint that maybe would like to c ontinue to do business with a local community-based organization.  This is not about taking huge amounts of risk out there or looking at entirely new areas for us to focus on.  It’s more a function of us taking advantage of the potential for disruption and being there with the people that are interested in building deep relationships with this Company.  That’s the key component to our franchise value and our overall value as an organization going forward.  We are not about transactions; we are about relationships.  We preach that continuously to our people, and that’s what we are doing right now with this opportunity and any number of opportunities.

Matt Olney:

All right, thanks guys.     

Operator:

Thank you. Our next question comes from Al Savastano from Fox-Pitt Kelton; please go ahead.

Al Savastano:

Hi guys. How are you?

Dennis Hudson:

Morning.

William Hahl:

Hi Al.

Al Savastano:

Could you give us a little color on those commercial real estate credits that went on non-accrual in terms of property type and maybe area of the state, or explain to us exactly what happened to cause that loan to go on non-accrual?

Dennis Hudson:

We said that they represented a number of credits.  They are largely commercial real estate credits. They’re all secured with real estate and we believe that the values associated with the loans are sufficient to cause us to feel comfortable to carry them at the value.  I don’t know what more I can say other than… I’m not going to get into the particulars of the individual borrowers and the like. They tend to be in our market and that’s about all I can say at this point. I don’t want to…

Al Savastano:

I guess what I’m looking for…

Dennis Hudson:

So…what are you looking for?

Al Savastano:

There seems to be a disconnect in my mind.  I thought the message was that residential was a problem and commercial real estate really wasn’t, so I guess I’m just a little surprised that you had some commercial real estate non-performers this quarter.  I guess I’m just looking for what areas in commercial real estate had some issues.

Dennis Hudson:

Oh okay; I’m sorry.  I’m sorry; now I understand what you are shooting at. These loans are largely related to the residential market. They are commercial loans that we have with builders and developers that are experiencing distress and we are moving through, potentially through foreclosure with some of them. With others we will probably see them resolve it another way.  But they are all related to the residential slowdown.  There’s no doubt about it, Al.  These are not, in fact—with the exception of a handful of smaller residential individual residential properties and the like—they are all related to the residential slowdown.

Al Savastano:

Just a second question, can you update us on the bank’s exposure in the Naples/Fort Meyers area and that market, and your level of concerns in that market?  

Dennis Hudson:

Well you know we haven’t talked about that.  I think there was a press report that we filed a lawsuit against another bank in a credit that we are involved in.  We continue to work on that.  It’s not something we have talked a lot about.  I’m not sure what you’re looking for there.  We have very little, like almost no exposure there in terms of our portfolio, if that’s what you’re asking.

Al Savastano:

It’s just that one credit?

Dennis Hudson:

Yes.

Al Savastano:

How do you feel about that credit at this point?

Dennis Hudson:

We’ll continue to work it.  We are working right now with others to continue to approach guarantors and when we have something to say we will.

Al Savastano:

Okay. Thank you.

Operator:

Thank you. Our next question comes from Edward Barr from E. S. Barr & Company; please go ahead.

Edward Barr:

Hi Dennis.

Dennis Hudson:

Hi there.

Edward Barr:

You have touched on franchise value a couple of times and obviously the stock price is way down. I wondered if you considered yourself to have excess capital and what the prospects were for share repurchase at this junction?

Dennis Hudson:

Well we have…  We need to carefully look at our growth over the next year and the like, but it’s something certainly a lot more attractive today than it was six months ago.  Again, we don’t have anything to announce on that yet, but when we do, we will talk about it.  But it’s a possibility; there’s no doubt about it, Ed.

Edward Barr:

Do you consider yourself to have excess capital at this juncture?

Dennis Hudson:

Yes, but not a gross amount of excess capital.  I think our equity to asset ratio today is what you can see in our release.  We remain very well capitalized and have a certain amount of excess capital. The other thing I would point out is that we have very little other forms of capital funding on the balance sheet and that’s something that we will continue to look at.

Edward Barr:

You’re looking at it on a more heightened basis at present?

Dennis Hudson:

Without a doubt.

Edward Barr:

Thank you.

Operator:

Thank you. Our next question comes from Jim or Tim Cusack from Raymond James Finance; please go ahead.

Tim Cusack:

I was interested in knowing which national consulting firm that you retained and what specific directives you may have given that firm?

Dennis Hudson:

Well we haven’t discussed it other than to say it’s a national firm. It’s a well known firm, one that has a great reputation; and I think I talked about that earlier.  The focus will be, has been and continues to be as we complete our project, taking a deeper strategic look at Seacoast’s position in its markets and the potential that exists within those markets to realize significant improvements and the value over time, and finally to allow us to better benchmark what sort of performance expectations we have as we move forward and continue to win business.  So hope that…  We talked about that earlier, but I hope that clarifies it.

Tim Cusack:

Thank you.

Operator:

Thank you. Once again, if there are any questions, press star then one.  Mr. Hudson, there are no questions at this time.

Dennis Hudson:

Well thank you very much for your attendance today, and we look forward to talking with you all next quarter.  

Operator:

Thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may all disconnect.  

EX-99.3

EXHIBIT 99.3

To 8-K dated July 30, 2007

Seacoast Banking Corporation of Florida

Second Quarter 2007 Financial Highlights

Cautionary Notice Regarding Forward-Looking Statements

This discussion and analysis 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 future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast’s 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 and market conditions, including seasonality; 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 de posits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; 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 mor e 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 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, 2006 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.

Capitalizing on Market Disruption

Treasure Coast Market

	Martin		St. Lucie		Indian River		Total Offices
	Deposits	Offices	Deposits	Offices	Deposits	Offices
Seacoast	755,626	11	285,461	7	230,440	8	26
National City	383,569	8	883,844	11	37,513	6	25
Wachovia	533,193	10	500,517	7	1,383,533	10	27
Bank of America	558,301	10	432,575	8	364,071	6	24
SunTrust	139,616	3	295,704	5	251,832	6	14
Riverside	151,346	3	998,661	8	169,781	4	15
Alabama National	--		--		403,496	5	5

Over $1.3 billion in local community bank deposits will transfer to Cleveland

Source:  SNL Financial June 2006

Capitalizing on Market Disruption

Local Community Banks in Treasure Coast Market
	Deposits	Offices
Seacoast	1,271,527	26
Riverside	1,319,788	15
Gulfstream	268,166	2
Peoples Bank	134,523	3
First Bank of Indiantown	68,545	2
Marine Bank	89,754	2

Source:  SNL Financial June 2006

Quarterly Proforma Earnings

		2007
(Dollars in thousands, except per share data)	Q-1			Q-2
Net Income (GAAP)	$2,769		$0.14	$4,808	$0.25
Securities restructuring	3,297		0.18	--	--
Provision (recapture) for loan losses	(358)		(0.02)	753	0.04
Operating earnings pre-provision	$5,708		$0.30	$5,561	$0.29

Total Revenues

(Dollars in thousands)	QTR2 07	QTR1 07	Growth	% Growth
Net Interest Income	$ 21,468	$ 21,432	$   36	0.2	%
Noninterest Income	6,716	6,216	500	8.0
Total Revenues	$ 28,184	$ 27,648	$ 536	1.9	%

•

Dollars in Thousands; Excludes Provision for Loan Losses and Trading Account Profits

•

Calculated on a Fully Taxable Equivalent Basis

Loan Growth

(Dollars in thousands)	Q2-2006	Q3-2006	Q4-2006	Q1-2007	Q2-2007
Loans, net of unearned income	$1,614,646	$1,656,061	$1,733,111	$1,743,294	$1,813,087

Commercial Lending Originations

(Dollars in thousands)	Q2-2006	Q3-2006	Q4-2006	Q1-2007	Q2-2007
Commercial Originations*	$106,000	$80,000	$140,000	$76,000	$151,000

*  Includes Commercial Real Estate

Deposit Mix

	QTR4 06		QTR1 07		QTR2 07
Demand	21	%	21	%	19	%
Core *	66		65		66
Time Deposits > $100,000	13		14		15
Total	100	%	100	%	100	%

*Includes Time Deposits < $100,000

Cost of Deposits

	Q3-05	Q4-05
Fed Funds Rate	3.75%	4.25%
Cost of Deposits	1.32%	1.54%
	Q1-06	Q2-06	Q3-06	Q4-06
Fed Funds Rate	4.75%	5.25%	5.25%	5.25%
Cost of Deposits	1.71%	1.99%	2.29%	2.54%
	Q1-07	Q2-07
Fed Funds Rate	5.25%	5.25%
Cost of Deposits	2.69%	2.88%

Average Earning Asset Growth

(Dollars in billions)	Q3-05	Q4-05
Average Earning Assets	$1.89	$1.97

(Dollars in billions)	Q1-06	Q2-06	Q3-06	Q4-06
Average Earning Assets	$1.98	$2.25	$2.18	$2.19

(Dollars in billions)	Q1-07	Q2-07
Average Earning Assets	$2.20	$2.10

Average loans represent 85% of earning assets at June 30, 2007, compared to 77% at December 31, 2006 and 63% at December 31, 2005

Net Interest Margin and Net Interest Income

(Dollars in thousands)	Q2-06	Q3-06	Q4-06	Q1-07	Q2-07
Net Interest Margin	4.29%	4.22%	3.95%	3.92%	4.09%
Net Interest Income	$24,030	$23,144	$21,846	$21,432	$21,468

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

Service Area

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Seminole County

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Orange County

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Brevard County

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Indian River County

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Okeechobee County

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St. Lucie County

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Martin County

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Palm Beach County

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Broward County

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Hardee County

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Highlands County

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Desoto County

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Glades County

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Hendry County