EX-99.3 4 ex993.htm Exhibit 99

EXHIBIT 99.3

To Form 8-K dated April 23, 2009




Seacoast Banking Corporation of Florida


First Quarter 2009



Cautionary Notice Regarding Forward-Looking Statements



This discussion and analysis may contain “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, tax and regulatory changes; changes in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity 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, 2008 under “Special Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors”, 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.




Highlights



•

Earnings per share (EPS) pre-provision of $0.13, an increase of $0.08 compared to the fourth quarter’s $0.05 EPS (1)

•

Capital and liquidity remain strong

•

Excess cash maintained as insurance should the economy weaken further

•

Deposit growth, mix and costs were positive in the quarter

•

Expenses well managed; core operating expenses are declining and credit related expenses were stable


(1)  Excludes preferred stock dividends and accretion on preferred stock discount.




Funding & Liquidity

Stable Funding Profile and Very Strong Liquidity Position


Funding

•

Increased deposits and sweep repo base

     -  Customer deposits and sweep repos of $1.911 billion, up $18.5

                     million during the first quarter (1)

     -  Customer deposits and sweep repos compose 92% of total funding (2)

     -  Can issue up to $40 million of FDIC – guaranteed bank notes


Liquidity

•

Daily overnight borrowing position reduced to zero since year-end

•

Combined available contingent liquidity from the Federal Reserve, FHLB, and free

              securities exceeds $800 million



(1)

Excludes brokered deposits; but includes Certificate of Deposit Account Registry Service (CDARS) deposits

(2)

Total funding includes customer deposits, broker deposits, sweep repos, borrowed funds and subordinated debt.


Capital Ratios
Completed Sale of $50 million in Preferred Securities to U.S. Treasury


  

1-2009

Estimate

 

4Q-2008

Actual

 

3Q-2008

Actual

 

2Q-2008

Actual

         

Tier 1 Capital Ratio

 

12.72%

 

12.75%

 

9.90%

 

9.72%

Total Capital Ratio

 

14.00%

 

14.01%

 

11.69%

 

11.42%

Total Avg Equity to Total Avg Assets

 

9.45%

 

8.68%

 

8.43%

 

9.17%

Tangible Equity to Tangible Assets

 

7.05%

 

7.12%

 

5.94%

 

5.99%

Tangible Common Equity to Tangible Assets

 

5.09%

 

5.18%

 

5.94%

 

5.99%

Tangible Common Equity to Risk Weighted Assets

 

7.08%

 

7.08%

 

7.47%

 

7.46%



Received $50 million in proceeds and Tier 1 capital from sale of preferred securities to U.S. Treasury on December 22, 2008.



Noninterest Expense
Core Operating Expenses are Declining

Credit-Related Costs remained stable at approximately $900,000 for the

first quarter 2009 and fourth quarter 2008 (1)



 

($ in thousands)

 

1Q 2009 vs 4Q 2008

4Q 2008 vs 3Q 2008

 

1Q–2009

 

4Q–2008

 

3Q–2008

 
         

Noninterest Expenses

$19,109

 

$20,390

 

$19,900

 

-6.28%

2.46%

Nonrecurring:

        

Severance

242

 

-

 

-

   

Consulting fees

-

 

445

 

-

   

Reversal of Incentive

(281)

 

-

 

-

   

Legal settlement

39

 

118

 

-

   

Branch closures

107

 

206

 

-

   

Other

57

 

-

 

-

   

Professional Fees

-

 

130

 

-

   

Total nonrecurring expenses

$164

 

$899

 

-

   

Adjusted Noninterest Expense

$18,945

 

$19,491

 

$19,900

 

-2.80%

-2.06%



(1) Includes credit, collections and other real estate expenses



Net Interest Margin

Margin Expanded in 1Q Driven by Deposit Mix and Pricing


(Dollars in thousands)

Q1-08

Q2-08

Q3-08

Q4-08

Q1-09

Net Interest Margin

3.74%

3.69%

3.57%

3.32%

3.44%


Margin has held up well given the increases in nonperforming assets


Opportunities Include:

•

Better deposit mix

•

Lower deposit rate environment

•

Increased residential loan production

•

Excess liquidity in cash


Risks to 2009 margin include:

•

Deposit pricing competition

•

Increased NPA levels

•

Earning asset mix

•

Low interest rate environment



Existing Home Sales in Treasure Coast

Existing Home Sales Median Price

1994-2009


Year

Treasure Coast

Natural Growth

1994

$80,200

$80,200

1995

$78,100

$82,606

1996

$76,900

$85,084

1997

$84,900

$87,637

1998

$89,000

$90,266

1999

$89,100

$92,974

2000

$93,100

$95,763

2001

$108,200

$98,636

2002

$128,300

$101,595

2003

$153,900

$104,643

2004

$193,900

$107,782

2005

$254,000

$111,016

2006

$253,200

$114,346

2007

$226,100

$117,776

2008

$153,600

$121,310

Jan-09

$114,900

$124,949

Feb-09

$122,100

$128,697


Source:  Florida Association of Realtors


Existing Home Sales in Palm Beach

Existing Home Sales Median Price

1994-2009


Year

Palm Beach

Natural Growth

1994

$117,600

$117,600

1995

$122,700

$123,480

1996

$126,900

$129,654

1997

$132,700

$136,137

1998

$128,100

$142,944

1999

$133,800

$150,091

2000

$138,600

$157,595

2001

$149,600

$165,475

2002

$194,600

$173,749

2003

$241,300

$182,436

2004

$300,900

$191,558

2005

$390,100

$201,136

2006

$384,700

$211,193

2007

$369,400

$221,752

2008

$302,800

$232,840

Jan-09

$232,100

$244,482

Feb-09

$228,100

$256,706


Source:  Florida Association of Realtors



Existing Home Sales in Florida

Existing Home Sales Median Price

1994-2009


Year

State

Natural Growth

1994

$87,800

$87,800

1995

$87,900

$90,434

1996

$91,800

$93,147

1997

$95,800

$95,941

1998

$101,500

$98,820

1999

$106,900

$101,784

2000

$115,900

$104,838

2001

$127,700

$107,983

2002

$137,800

$111,222

2003

$158,400

$114,559

2004

$182,400

$117,996

2005

$235,100

$121,536

2006

$248,300

$125,182

2007

$233,600

$128,937

2008

$187,800

$132,805

Jan-09

$139,500

$136,790

Feb-09

$141,900

$140,893


Source:  Florida Association of Realtors




Service Area


•

Seminole County

•

Orange County

•

Brevard County

•

Indian River County

•

Okeechobee County

•

St. Lucie County

•

Martin County

•

Palm Beach County

•

Broward County

•

Hardee County

•

Highlands County

•

Desoto County

•

Glades County

•

Hendry County