Seacoast Banking Corporation of Florida (Form: 8-K)

EX-99.1

EXHIBIT 99.1
To Form 8-K dated October 29, 2009

NEWS RELEASE

SEACOAST BANKING CORPORATION OF FLORIDA

Dennis S. Hudson, III
Chairman and Chief Executive Officer
Seacoast Banking Corporation of Florida
(772) 288-6085

William R. Hahl
Executive Vice President/
Chief Financial Officer
(772) 221-2825

SEACOAST REPORTS RESULTS FOR
THIRD QUARTER 2009

STUART, FL., October 29, 2009 – Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF), a bank holding company whose principal subsidiary is Seacoast National Bank, today reported a third quarter 2009 net loss of $40.8 million compared to a net loss of $3.4 million for the third quarter of 2008. Including preferred stock dividends and accretion of $937,000, the net loss applicable to common shareholders was $41.7 million or $1.21 per average common diluted share for the third quarter, compared to a net loss of $3.4 million or $0.18 per average common diluted share for the third quarter of 2008.

During the quarter we achieved a number of important objectives:

• Our capital position was strengthened significantly following our successful capital raise;

• We substantially completed a planned reduction in the size of our residential construction and land development loan portfolio which now totals 3.8 percent of loans outstanding; and

• Our aggressive liquidation plan has now reduced our loan exposure below the regulatory targets associated with institutions having significant concentrations in commercial real estate loans and construction and development loans.

Capital ratios were strengthened with the completion of a successful public common stock offering with gross proceeds totaling $76 million. The total risk-based capital ratio increased to 16.2 percent up from 13.4 percent on a link-quarter basis. The tangible common equity ratio increased to 6.14 percent from 4.66 percent over the same time period. In addition, the Company expects to close a firm commitment from a private equity firm to purchase 6 million shares of common stock for aggregate proceeds of $13.5 million in the fourth quarter of this year.

During the quarter residential construction and land development loan balances were reduced by more than 40 percent. Total construction and land development loans were reduced by more than 25 percent, falling below the Company’s long term objective and below 100 percent of tier one capital and the allowance for loan losses, which is a regulatory threshold associated with institutions having construction and development loan concentrations.

“While very painful, we have now reduced our exposure to residential development lending to a nominal level”, said Dennis S. Hudson, III, Chief Executive Officer. “Moreover, the remaining loans in this portfolio have been written down to values that fully reflect the current environment. In addition, as a result of our focus on loan sales and other aggressive liquidation efforts, our aggregate commercial real estate exposure (construction loans and commercial real estate mortgages) has now been reduced below 300 percent of tier one capital and the allowance for loan losses, which is a regulatory threshold associated with institutions having commercial real estate loan concentrations.”

After completing a review of internally criticized commercial real estate exposures late in the third quarter, we identified a number of performing loans that we anticipate may not be able to continue to perform in accordance with existing repayment terms. These loans were placed on nonaccrual status and evaluated for impairment. This action together with aggressive loan sales resulted in a significant increase in charge-offs for the quarter and contributed to the increase in nonperforming loans. We anticipate many of these loans will be restructured in the next few months as troubled debt restructures or sold. We believe taking this aggressive action, together with our reduced exposures as described above, will cause our nonaccrual balances to peak at current levels. As a result, we also expect charge-offs to moderate next quarter and to moderate even further thereafter based on the current outlook.

Total revenues were up 3.4 percent to $25.1 million for the third quarter 2009 compared to the third quarter 2008. Excluding investment securities gains, revenues totaled $23.7 million for the quarter ended September 30, 2009 or $599,000 lower compared to the same period a year ago.

Other items impacting financial results for the third quarter 2009 include:

• Net interest margin increased to 3.74 percent, up 17 basis points from the third quarter 2008 and 9 basis points higher than last quarter;

• Net interest income totaled $19.1 million, up $114,000 over the prior quarter;

• Provision for loan losses of $45.4 million;

• The allowance for loan losses increased from 2.75 percent of total loans for the second quarter to 3.25 percent of total loans in the third quarter;

• Nonperforming assets increased approximately $31 million to 8.45 percent of total assets;

• Residential construction and development loan portfolio exposure was reduced by $39.1 million to $57.6 million and from $295.1 million at year end 2007;

• Total deposits, excluding brokered certificates of deposits, increased in the normal seasonally weak third quarter by $14 million or 3.2 percent annualized;

• The cost of interest bearing liabilities totaled 1.50 percent, 15 basis points lower than the second quarter 2009 and 114 basis points lower than third quarter 2008;

• Mortgage banking income totaled $337,000 up $121,000 or 56 percent from a year ago;

• Tangible common equity ratio increased to 6.14 percent from 4.66 percent as of June 30, 2009 based on the public offering of common stock completed in the third quarter; and

• Total risk based capital increased to 16.2 percent, up from 13.4 percent as of June 30, 2009.

Additional progress was made in reducing the exposure to residential construction and development loans by charging down the impaired loans to their disposition values. We have specific plans in place for each of the remaining credits, and within the next one or two quarters, we believe we will see nonperforming assets begin to decline.

Loan Portfolio Risk Reduction Update

Construction and land development portfolios are being run-off and risk is being reduced. These portfolios have been the primary source of increases in both nonperforming loans and loan losses over the past two years.


Construction
and Land
Development Loans	High Point			September 30, 2008			March 31, 2009			June 30, 2009			September 30, 2009
Residential	$	351.6	3/31/2007	$	192.4		$	117.2		$	96.7		$	57.6
Commercial		242.4	12/31/2007		226.8			201.4			166.8			128.7
Individuals		91.3	12/31/2006		65.8			50.2			44.2			41.8

TOTAL	$	627.0	9/30/2007	$	485.0		$	368.8		$	307.7		$	228.1

Total as a percentage of total loans					27.8	%		22.6	%		19.4	%		15.2	%
Total as a percentage of tier 1 risk-based capital and Allowance for loan losses					238.2	%		154.5	%		133.6	%		83.6	%

Dollars in millions

Run-off of these portfolios has been achieved through early recognition of the potential for portfolio weakness in the first quarter of 2007 when the housing market began to slow, aggressive collection and liquidation activities with borrowers, and additional liquidation achieved through the sale of larger problem loans. Total construction and land development loans have been reduced to one third of that reported at the high point in 2007, with over $250 million in reduction having been achieved over the past four quarters. Residential construction and land development loans, which have produced extremely high loss experience over the past two years, have been reduced by 84 percent compared to the high point in 2007. Portfolio liquidation for residential construction and development loans has also been focused on large loan exposures. Large balance (over $4 million) residential construction and land development loans have been reduced by $80.5 million to $17.8 million over the past five quarters, all of which is currently on nonaccrual. This portfolio is now in the process of liquidation in accordance with specific work-out plans with borrowers designed to achieve substantial liquidation in an orderly fashion over the next 12 months. We expect aggregate loss exposure in this portfolio to continue to moderate significantly going forward. Commercial construction and development loans continue to decline and remain well diversified with no single category of exposure exceeding 20 percent of tier 1 capital and the allowance for loan losses.

Commercial real estate mortgage loans remain well diversified (as shown in the attached table) with all but three categories of exposure at less than 20 percent of tier 1 capital and the allowance for loan losses. The three largest categories of exposure are office buildings, retail trade and industrial at 65 percent, 68 percent and 40 percent respectively of tier 1 capital and the allowance for loan losses. Approximately 35% of commercial real estate mortgage loans are owner occupied with an average loan-to-value of 50 percent and originated over a wide timeframe. The non-owner occupied portion of the portfolio has an average loan-to-value of 53 percent. While the Company may see further deterioration over time in this portfolio as a result of continuing economic weakness, we expect a much lower level of loss potential than recently experienced in our construction and land development portfolios.

Problem Loan Management and Loss Mitigation Update

Problem assets grew during the quarter due to continued deterioration as a result of economic conditions and greater focus on early intervention loss mitigation strategies (as discussed last quarter) including troubled debt restructurings for smaller commercial and consumer borrowers. The pace of growth began to moderate for nonaccruing loans, while other real estate owned grew higher as problem assets migrated toward liquidation.

Nonaccrual Loans
September 30, 2009


							Restructured
	Nonaccrual Loans						Loans (Accruing)
Dollars in thousands	Non Current		Current*		Total

Construction and land development
Residential	$	23,497	$	10,778	$	34,275	$	0
Commercial		8,884		12,880		21,764		0
Individual		5,392		356		5,748		1,382
Residential Mortgage		20,457		15,409		35,866		13,612
Commercial Real Estate Mortgage		24,502		28,824		53,326		226
Commercial and Financial		160		1,829		1,989		0
Installment loans to individuals		1,013		0		1,013		841
TOTAL	$	83,905	$	70,076	$	153,981	$	16,061

*Loans classified as nonaccrual (including restructured loan) and less than 30 days past due.

Nonaccruing loans grew by $27.2 million from June 30, 2009 to $154.0 million at September 30, 2009, and accruing restructured loans grew by $1.3 million to $16.1 million over the same period. The growth in nonaccruing loans was also impacted by restructured loans that are currently classified as nonaccruing. Company policy requires troubled debt restructures to be classified as nonaccrual loans (under certain circumstances) until performance can be verified (typically six months). We will continue to pursue troubled debt restructures in selected cases where we expect to achieve better liquidation values than may be expected through other traditional collection activities. During the quarter we also worked with retail mortgage customers, when possible, to achieve lower payment structures in an effort to avoid foreclosure and keep families in their homes. A total of 73 applications were received seeking restructured mortgages, compared to 102 the second quarter, 93 the first quarter and 37 in the fourth quarter of last year. Restructured loans included in nonaccruing loans totaled $36.9 million at September 30, 2009, compared with $33.4 million at June 30, 2009. At September 30, 2009, nonaccruing loans, which totaled $154.0 million, have been written down by approximately $64.6 million or 32 percent of the original loan balance (including specific impairment reserves).

Early stage delinquencies increased somewhat during the quarter in the residential mortgage loan portfolio and remained modest or improved in other loan portfolios. Accruing residential mortgage loans (including home equity lines) 30-89 days past due grew to $7.1 million (or 1.3 percent of residential loans) from $3.7 million (or 0.7 percent) and loans 90 days past due continued to be zero on a linked quarter basis.

Residential home prices in the Company’s markets and Florida continued to show signs of stability during the quarter as home sales volumes and inventory levels continued to improve, although the rate of unemployment remains high.

Other real estate owned (“OREO”) grew by $3.5 million to $26.8 million, reflecting a migration of a number of commercial and residential properties through the final foreclosure process which offset sales and liquidations for the quarter. OREO is expected to grow in the coming quarter and increase over the next few quarters as final liquidation and resolution of many of the nonaccrual loans is concluded.

Income before taxes and the provision for loan losses for the third quarter of 2009 totaled approximately $4.6 million, up from the $4.3 million earned in the second quarter 2009. The negative impact on net interest income from increased nonperforming loans, together with elevated collection costs, were absorbed by an improving net interest margin performance, better deposit mix, reduced overhead as a result of work force reductions, and lower data processing, occupancy and other expenses. The tax benefit for the net loss for the third quarter totaled $15.7 million. The deferred tax valuation allowance was increased by a like amount, and therefore there was no change in the carrying value of deferred tax assets which are supported by tax planning strategies. Due to limitations on the inclusion of deferred tax assets, regulatory capital ratios are unaffected by the reduced tax benefit for the quarter. Should the economy show signs of improvement and our credit losses moderate, we anticipate that we could place increased reliance on our forecast of future taxable earnings, which would result in realization of future tax benefits.

Net interest income (on a tax equivalent basis) was $19.1 million, up $114,000 or 2.4 percent annualized from the second quarter 2009 as a result of lower deposit costs and lower rates paid on most interest bearing liabilities, increased yield on investments, partially offset by a decline of $61 million in average outstanding loans, lower loan yields and higher nonperforming loans. The net interest margin, which totaled 3.74 percent, increased 9 basis points compared to the second quarter 2009, and was 17 basis points higher than in third quarter 2008.

Noninterest income, totaled $6.1 million, down $539,000 linked quarter, primarily due to lower gains on securities sales as well as lower revenue related to seasonal declines in fees from merchant services, marine finance fees, mortgage banking fees and brokerage commissions and fees. The revenue declines from these sources were partially offset by higher revenues from service charges on deposits, the result of the growth in new deposit households. In addition, wealth management and marine finance fees continue to be impacted by the challenging economic conditions.

Noninterest expenses for the third quarter totaled $20.5 million, lower by $719,000 compared to the second quarter 2009 (excluding the write-off for goodwill impairment of $49.8 million), primarily the result of higher FDIC insurance costs due to a special assessment in the second quarter 2009. Salaries, wages and benefits for the third quarter 2009 declined $1,523,000 or 16.1 percent from a year ago, and were $3.5 million lower for the first nine months of 2009 compared to the same period in 2008, as a result of consolidation of branches and centralization of management by combining markets. Cost reductions were also achieved in backroom areas, with expenditures for data processing, occupancy, and furniture and equipment all declining compared to the prior year. Increasing this quarter were costs associated with foreclosed and repossessed asset disposition and management activities, which increased by $625,000 compared to the second quarter 2009 and totaled $2.1 million. Also increasing this quarter were legal and professional fees related to risk management, credit and collection related activities. Management has been focused and aggressive in resolving troubled loans and are confident that its early identification and actions will lead to lower future costs as exposures are reduced.

The Company’s retail core deposit focus has produced strong growth in core deposit customer relationships and has resulted in increased balances, which offset planned run-off in brokered certificates of deposit in the third quarter 2009. The improved deposit mix and lower rates paid on deposits during the third quarter reduced the overall cost of total deposits to 1.24 percent, 16 basis points lower than in the second quarter 2009 and 96 basis points below last year’s third quarter.

Increased emphasis on residential lending has increased mortgage originations in the first nine months of 2009. A total of 236 applications were accepted in the third quarter 2009 for total loans of $43 million, and 966 applications were taken in the first nine months for $206 million. Closed mortgage loans totaled $28 million for the quarter, compared to $43 million in the second quarter and $38 million for the first quarter 2009. A total of $28 million in residential mortgage loans were sold in the third quarter of 2009. Over the first nine months of 2009, a total of $72 million in residential mortgage loans were sold, and $37 million were added to the portfolio.

Total deposits at quarter end September 30, 2009 were up compared to June 30, 2009, attributable to continued growth as a result of a strategic focus on increasing market share. Total deposits, excluding brokered certificates of deposits at September 30, 2009, totaled $1,706 million and were just $4 million lower compared to year-end 2008 total deposits. Historically, the Company’s deposits experience a seasonal decline in the third quarter compared to the other quarters. Instead deposit growth (excluding brokered certificates of deposits) during the third quarter was 3.2 percent annualized. The average cost of interest bearing core deposits during the third quarter was 0.58 percent, down 13 basis points from the second quarter. During the third quarter, certificates of deposits rates paid were also 35 basis points lower than in the second quarter and totaled 2.45 percent. The average cost of total interest-bearing liabilities of 1.50 percent declined by 15 basis points from the second quarter.

Compared to the prior year’s third quarter customer, sweep repurchase agreements were down $2.5 million. Total deposits at September 30, 2009 declined $77.5 million compared to the prior year, as a result of deposit declines in the Company’s central Florida region caused by slower economic growth. This region’s deposit decline reversed trend during the third quarter 2009 and should contribute to total deposit growth going forward. As previously reported, the Company has experienced strong growth in core deposit customer relationships since implementing its new deposit growth strategy. A total of 1,622 new core households were added in the third quarter 2009, 10.2 percent higher than the second quarter 2009. This compares to 1,566 in third the quarter 2008, and 1,539 in the third quarter 2007. These new relationships have improved market share and increased average services per household. Seacoast now has the number two market share ranking in its Treasure Coast market.

Seacoast will host a conference call on October 30, 2009 at 10:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Investors may call in (toll-free) by dialing (866) 712-7678 (access code: 8397217; 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 for one month, beginning the afternoon of October 30, 2009, by dialing (877) 213-9653 (domestic), using the passcode 8397217.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast’s website at www.seacoastbanking.net. The link is located in the subsection “Presentations” under the heading “Investor Services”. Beginning the afternoon of October 30, 2009, an archived version of the webcast can be accessed from this same subsection of the website and will be available for one year.

Seacoast Banking Corporation of Florida has approximately $2.1 billion in assets. It is one of the largest independent commercial banking organizations in Florida, headquartered on Florida’s Treasure Coast, one of the wealthiest and fastest growing areas in the nation.

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, 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 the Company, or from the Securities and Exchange Commission, including through the SEC’s Internet website at http://www.sec.gov.


FINANCIAL HIGHLIGHTS								(Unaudited)
SEACOAST BANKING	CORPORATION	OF			FLORIDA		AND SUBSIDIARIES
		Three Months Ended											Nine Months Ended
(Dollars in thousands,		September 30,											September 30,
except per share data)		2009							2008				2009					2008
Summary of Earnings
Net loss		$	(40,777	)				$		(3,448	)		$	(108,537	)	$			(23,001	)
Net loss, available to common shareholders			(41,714	)						(3,448	)			(111,348	)				(23,001	)
Net interest income (1)			19,101							19,186				56,329					59,982
Performance Ratios
Return on average assets-GAAP basis (2), (3)			(7.55	)		%				(0.60	)	%		(6.49	)		%		(1.32	)	%
Return on average tangible assets (2),(3),(4)			(7.53	)						(0.58	)			(6.56	)				(1.32	)
Return on average shareholders’ equity–GAAP basis (2), (3)			(86.49	)						(7.13	)			(70.64	)				(14.77	)
Net interest margin (1), (2)			3.74							3.57				3.61					3.67
Per Share Data
Net loss diluted-GAAP basis		$	(1.21	)				$		(0.18	)		$	(4.58	)	$			(1.21	)
Net loss basic-GAAP basis			(1.21	)						(0.18	)			(4.58	)				(1.21	)
Cash dividends declared			0.00							0.01				0.01					0.33


FINANCIAL HIGHLIGHTS		(Unaudited)
SEACOAST BANKING	CORPORATION OF FLORIDA AND		SUBSIDIARIES
			September 30,						Increase/
			2009			2008			(Decrease)
Credit Analysis
Net charge-offs year-to-date			$	63,791		$	47,232			35.1		%
Net charge-offs to average loans				5.25	%		3.41	%		54.0
Loan loss provision year-to-date			$	83,253		$	57,978			43.6
Allowance to loans at end of period				3.25	%		1.87			73.8
Nonperforming loans			$	153,981		$	75,793			103.2
Other real estate owned				26,819			4,551			489.3

Total non-performing assets				180,800		$	80,344			125.0

Restructured loans (accruing)			$	16,061		$	10			n/m
Nonperforming assets to loans and other real estate owned at end of period				11.80	%		4.60	%		156.5
Nonperforming assets to total assets				8.45	%		3.61	%		134.1
Selected Financial Data
Total assets			$	2,139,915		$	2,224,614			(3.8	)
Securities – Available for sale (at fair value)				342,742			267,661			28.1
Securities – Held for investment (at amortized cost)				19,296			29,121			(33.7	)
Net loans				1,455,716			1,709,978			(14.9	)
Deposits				1,761,287			1,838,792			(4.2	)
Total shareholders’ equity				180,324			184,449			(2.2	)
Common shareholders’ equity				135,638			184,449			(26.5	)
Book value per share common				2.57			9.59			(73.2	)
Tangible book value per share				3.33			6.71			(50.4	)
Tangible common book value per share (5)				2.48			6.71			(63.0	)
Average shareholders’ equity to average assets				9.18	%		8.93	%		2.8
Tangible common equity to tangible to assets (5),(6)				6.14			5.94			3.4
Average Balances (Year-to-Date)
Total assets			$	2,237,422		$	2,329,860			(4.0	)
Less: Intangible assets				37,928			55,975			(32.2	)

Total average tangible assets			$	2,199,494		$	2,273,885			(3.3	)

Total equity			$	205,439		$	208,010			(1.2	)
Less: Intangible assets				37,928			55,975			(32.2	)

Total average tangible equity			$	167,511		$	152,035			10.2

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

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

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

(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) The Company defines tangible common equity as total shareholders equity less preferred stock and intangible assets.

(6) The ratio of tangible common equity to tangible assets is a non-GAAP ratio used by the investment community to measure capital adequacy.

n/m = not meaningful

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


		Three Months Ended										Nine Months Ended
					September 30,							September 30,
(Dollars in thousands, except per share data)		2009					2008					2009					2008
Interest on securities:
Taxable	$		4,276		$			3,418		$			12,495		$			10,535
Nontaxable			73					90					233					270
Interest and fees on loans			20,836					27,146					65,634					86,525
Interest on federal funds sold and other investments			163					322					420					1,074

Total Interest Income			25,348					30,976					78,782					98,404
Interest on deposits			1,133					4,033					4,784					14,116
Interest on time certificates			4,283					6,334					14,813					19,463
Interest on borrowed money			881					1,492					3,040					5,061

Total Interest Expense			6,297					11,859					22,637					38,640

Net Interest Income			19,051					19,117					56,145					59,764
Provision for loan losses			45,374					10,241					83,253					57,978

Net Interest Income (Loss) After Provision for Loan Losses			(26,323	)				8,876					(27,108	)				1,786
Noninterest income:
Service charges on deposit accounts			1,732					1,894					4,879					5,556
Trust income			517					597					1,555					1,770
Mortgage banking fees			337					216					1,324					934
Brokerage commissions and fees			326					452					1,095					1,650
Marine finance fees			249					371					925					1,986
Debit card income			674					620					1,955					1,879
Other deposit based EFT fees			73					82					252					276
Merchant income			371					510					1,355					1,912
Other income			348					418					1,074					1,448

			4,627					5,160					14,414					17,411
Securities gains, net			1,425					0					3,211					355

Total Noninterest Income			6,052					5,160					17,625					17,766
Noninterest expenses:
Salaries and wages			6,598					7,713					20,247					23,076
Employee benefits			1,362					1,770					4,881					5,509
Outsourced data processing costs			1,705					1,803					5,402					5,800
Telephone / data lines			472					471					1,415					1,398
Occupancy			2,072					2,112					6,283					6,036
Furniture and equipment			675					700					2,004					2,135
Marketing			639					545					1,548					2,014
Legal and professional fees			1,653					1,687					4,648					3,545
FDIC assessments			1.007					543					3,910					994
Amortization of intangibles			315					315					944					944
Net loss on other real estate owned and
other asset dispositions			2,065					255					4,007					841
Goodwill impairment			0					0					49,813					0
Other			1,943					2,072					5,777					5,865

Total Noninterest Expenses			20,506					19,986					110,879					58,157
Loss Before Income Taxes			(40,777	)				(5,950	)				(120,362	)				(38,605	)
Provision (benefit) for income taxes			0					(2,502	)				11,825					(15,604	)

Net Loss	$		(40,777	)		$		(3,448	)		$		(108,537	)		$		(23,001	)

Preferred Stock Dividends and Accretion on
Preferred Stock Discount			937					0					2,811					0

Net Loss Available to Common
Shareholders	$		(41,714	)		$		(3,448	)		$		(111,348	)		$		(23,001	)
Per share common stock:
Net loss diluted	$		(1.21	)		$		(0.18	)		$		(4.58	)		$		(1.21	)
Net loss basic			(1.21	)				(0.18	)				(4.58	)				(1.21	)
Cash dividends declared			0.00					0.01					0.01					0.33
Average diluted shares outstanding			34,571,200					19,030,758					24,299,915					18,981,944
Average basic shares outstanding			34,571,200					19,030,758					24,299,915					18,981,944

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	September 30,			December 31,				September 30,
(Dollars in thousands)	2009			2008				2008
Assets
Cash and due from banks	$	32,515		$	46,002			$	38,927
Federal funds		0			4,605				11,256
Interest bearing deposits with other banks		137,640			100,585				0

Total Cash and Cash Equivalents		170,155			151,192				50,183
Securities:
Available for sale (at fair value)		342,742			318,030				267,661
Held for investment (at amortized cost)		19,296			27,871				29,120

Total Securities		362,038			345,901				296,781
Loans available for sale		5,857			2,165				2,701
Loans, net of unearned income		1,504,566			1,676,728				1,742,626
Less: Allowance for loan losses		(48,850	)		(29,388	)			(32,648	)

Net Loans		1,455,716			1,647,340				1,709,978
Bank premises and equipment, net		42,143			44,122				43,397
Other real estate owned		26,819			5,035				4,551
Goodwill and other intangible assets		4,436			55,193				55,508
Other assets		72,751			63,488				61,515

	$	2,139,915		$	2,314,436		$		2,224,614

Liabilities and Shareholders’ Equity
Liabilities
Deposits
Demand deposits (noninterest bearing)	$	264,092		$	275,262			$	285,746
Savings deposits		788,154			802,201				829,470
Other time deposits		332,788			326,473				361,184
Brokered time certificates		55,469			100,463				40,100
Time certificates of $100,000 or more		320,784			306,042				322,292

Total Deposits		1,761,287			1,810,441				1,838,792
Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days		68,797			157,496				71,325
Borrowed funds		65,053			65,302				65,004
Subordinated debt		53,610			53,610				53,610
Other liabilities		10,844			11,586				11,434

		1,959,591			2,098,435				2,040,165
Shareholders’ Equity
Preferred stock		44,686			43,787				0
Common stock		5,285			1,928				1,928
Additional paid in capital		166,800			99,788				92,327
Retained earnings		(39,775	)		70,278				93,101
Treasury stock		(1,181	)		(1,839	)			(838	)

		175,815			213,942				186,518
Accumulated other comprehensive income (loss), net		4,509			2,059				(2,069	)

Total Shareholders’ Equity	$	180,324			216,001				184,449

	$	2,139,915		$	2,314,436		$		2,224,614

Common Shares Outstanding		52,849,625			19,171,779				19,229,363

Note: The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date.

CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	Quarters
	2009														2008						Last 12
(Dollars in thousands,	Third				Second					First					Fourth					Months
except per share data)

Net loss	$	(40,777	)		$	(63,000	)	$			(4,760	)	$			(22,596	)	$		(131,133)
Operating Ratios
Return on average assets-GAAP
basis (2),(3)		(7.55	)	%		(11.19	)		%		(0.83	)		%		(3.99	)		%	(5.85)				%
Return on average tangible
assets (2),(3),(4)		(7.53	)			(2.36	)				(0.82	)				(4.05	)			(3.66)
Return on average shareholders’
equity GAAP basis (2),(3)		(86.49	)			(119.80	)				(8.83	)				(45.92	)			(64.60)
Net interest margin (1),(2)		3.74				3.65					3.44					3.32						3.60
Average equity to average assets		8.73				9.34					9.45					8.68						9.06
Credit Analysis
Net charge-offs	$	40,142			$	15,109				$	8,540				$	33,916				$97,707
Net charge-offs to average loans		10.14		%		3.71			%		2.07			%		7.76			%			5.91		%
Loan loss provision	$	45,374			$	26,277				$	11,652				$	30,656				$113,909
Allowance to loans at end of period		3.25		%		2.75			%		1.99			%		1.75			%
Restructured Loans (accruing)	$	16,061			$	14,789				$	3,309				$	12,616
Nonperforming loans	$	153,981			$	126,758				$	109,381				$	86,970
Other real estate owned		26,819				23,259					12,684					5,035

Nonperforming assets		180,800				150,017					122,065					92,005

Nonperforming assets to loans and other real estate owned at end of period		11.80		%		9.33			%		7.42			%		5.47			%
Nonperforming assets to total assets		8.45				6.86					5.29					3.97
Nonaccrual loans and accruing loans 90 days or more past due to loans outstanding at end of period		10.23				8.09					6.97					5.30
Per Share Common Stock
Net loss diluted-GAAP basis	$	(1.21	)		$	(3.35	)			$	(0.30	)			$	(1.19	)			$		(6.04	)
Net loss basic-GAAP basis		(1.21	)			(3.35	)				(0.30	)				(1.19	)					(6.04	)
Cash dividends declared		0.00				0.00					0.01					0.01						0.02
Book value per share		2.57				8.03					8.86					8.98
Average Balances
Total assets	$	2,142,228			$	2,258,792		$			2,313,125		$			2,255,036
Less: Intangible assets		4,590				54,717					55,033					55,346

Total average tangible assets	$	2,137,638			$	2,204,075		$			2,258,092		$			2,199,690

Total equity	$	187,057			$	210,997		$			218,609		$			195,770
Less: Intangible assets		4,590				54,717					55,033					55,346

Total average tangible equity	$	182,467			$	156,280		$			163,576		$			140,424

(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) on available for sale securities because the unrealized gains (losses) are not included in net income (loss).

(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.

CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

(Dollars in thousands)


	September 30,		December 31,		September 30,
SECURITIES	2009		2008		2008
U.S. Treasury and U.S. Government Agencies		1,198		22,380		22,280
Mortgage-backed		336,168		290,423		239,936
Obligations of states and political subdivisions		2,102		2,070		1,986
Other securities		3,274		3,157		3,459
Securities – Available for Sale		342,742		318,030		267,661
Mortgage-backed		14,589		22,248		22,997
Obligations of states and political subdivisions		4,707		5,623		6,123

Securities – Held for Investment		19,296		27,871		29,120

Total Securities	$	362,038	$	345,901	$	296,781


	September 30,		December 31,		September 30,
LOANS	2009		2008		2008
Construction and land development	$	228,111	$	395,243	$	484,989
Real estate mortgage		1,143,476		1,125,465		1,093,324
Installment loans to individuals		66,739		72,908		88,549
Commercial and financial		65,954		82,765		75,296
Other loans		286		347		468

Total Loans	$	1,504,566	$	1,676,728	$	1,742,626

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

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	2009													2008
	Third Quarter					Second Quarter									Third Quarter

	Average			Yield/				Average			Yield/				Average		Yield/
(Dollars in thousands)	Balance			Rate				Balance			Rate				Balance		Rate

Assets
Earning assets:
Securities:
Taxable	$	348,770			4.90		%	$	356,582			4.82	%		$	276,777		4.94	%
Nontaxable		6,742			6.59				7,048			6.53				8,151		6.53

Total Securities		355,512			4.93				363,630			4.86				284,928		4.99
Federal funds sold and other
investments		97,215			0.67				92,160			0.47				53,220		2.41
Loans, net		1,571,186			5.26				1,631,715			5.33				1,798,357		6.01

Total Earning Assets		2,023,913			4.98				2,087,505			5.03				2,136,505		5.78
Allowance for loan losses		(43,124	)						(31,445	)					(37,705)
Cash and due from banks		28,614							32,545							35,788
Premises and equipment		42,636							43,380							43,378
Other assets		90,189							126,807							104,855

	$	2,142,228						$	2,258,792						$	2,282,821

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
NOW	$	50,662			0.51		%	$	53,723			0.55	%		$	72,691		1.65	%
Savings deposits		102,429			0.28				103,778			0.43				103,550		0.73
Money market accounts		618,240			0.64				650,911			0.76				716,166		1.97
Time deposits		692,616			2.45				682,970			2.80				691,486		3.64
Federal funds purchased and other short term borrowings		86,264			0.33				136,786			0.33				82,730		1.55
Other borrowings		118,745			2.71				118,832			3.02				118,705		3.92

Total Interest-Bearing Liabilities		1,668,956			1.50				1,747,000			1.65				1,785,328		2.64
Demand deposits (noninterest-bearing)		273,972							281,736							293,951
Other liabilities		12,243							19,059							11,073

Total Liabilities		1,955,171							2,047,795							2,090,352
Shareholders’ equity		187,057							210,997							192,469

	$	2,142,228						$	2,258,792						$	2,282,821

Interest expense as a % of earning assets					1.23		%					1.38	%					2.21	%
Net interest income as a % of earning assets					3.74							3.65						3.57

(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.

QUARTERLY TRENDS – LOANS AT END OF PERIOD (Unaudited)

(Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES



		2008
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr

Construction and Land Development
Residential:
Condominiums	>$4 million	$	30.6	$	26.3	$	19.6	$	8.6
	<$4 million		26.6		21.1		13.0		8.8
Town homes	>$4 million		19.4		17.1		17.1		—
	<$4 million		4.4		2.9		4.6		6.1
Single Family Residences	>$4 million		20.8		21.2		13.5		11.9
	<$4 million		35.9		28.3		23.7		14.9
Single Family Land & Lots	>$4 million		85.1		64.3		40.3		22.1
	<$4 million		27.0		30.8		29.9		30.7
Multifamily	>$4 million		7.8		7.8		7.8		7.8
	<$4 million		24.8		26.2		22.9		19.0

TOTAL	>$4 million		163.7		136.7		98.3		50.4
TOTAL	<$4 million		118.7		109.3		94.1		79.5
GRAND TOTAL		$	282.4	$	246.0	$	192.4	$	129.9

QUARTERLY TRENDS – LOANS AT END OF PERIOD (Unaudited) (continued)

(Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


				2009				Nonperforming
		-				-
1st Qtr2nd Qtr3rd Qtr3rd QtrNumber

Construction and Land Development
Residential:
Condominiums	>$4 million	$	8.4	$	7.9	$	5.3	$	5.3	1
	<$4 million		7.9		8.8		3.7		0.9	1
Town homes	>$4 million		—		—		—		—	—
	<$4 million		4.2		2.3		—		—	—
Single Family Residences	>$4 million		6.6		6.5		—		—	—
	<$4 million		13.9		10.3		7.1		1.8	10
Single Family Land & Lots	>$4 million		21.8		21.8		5.9		5.9	1
	<$4 million		29.6		21.5		19.5		9.5	21
Multifamily	>$4 million		7.8		7.8		6.6		6.6	1
	<$4 million		17.0		9.8		9.5		4.2	6

TOTAL	>$4 million		44.6		44.0		17.8		17.8	3
TOTAL	<$4 million		72.6		52.7		39.8		16.4	38
GRAND TOTAL		$	117.2	$	96.7	$	57.6	$	34.2	41

QUARTERLY TRENDS – LOANS AT END OF PERIOD (Unaudited)

(Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	2007		2008
	4th Qtr		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr

Construction and land development
Residential
Condominiums	$	60.2	$	57.2	$	47.4	$	32.6	$	17.4
Townhomes		25.0		23.8		20.0		21.7		6.1
Single family residences		59.0		56.7		49.5		37.2		26.8
Single family land and lots		116.4		112.1		95.1		70.2		52.8
Multifamily		34.5		32.6		34.0		30.7		26.8

		295.1		282.4		246.0		192.4		129.9
Commercial
Office buildings		30.9		29.1		31.1		27.8		17.3
Retail trade		69.0		60.4		63.6		68.5		68.7
Land		82.6		92.5		75.4		73.9		73.3
Industrial		13.0		16.9		20.8		20.7		13.3
Healthcare		1.0		1.0		1.0		—		—
Churches and educational facilities		—		—		0.1		—		—
Lodging		11.2		—		—		—		—
Convenience stores		1.7		1.8		—		—		—
Marina		23.1		26.8		28.9		30.5		30.7
Other		9.9		11.3		6.3		5.4		6.0

		242.4		239.8		227.2		226.8		209.3
Individuals
Lot loans		39.4		39.4		40.0		38.4		35.7
Construction		32.7		32.4		27.1		27.4		20.3

		72.1		71.8		67.1		65.8		56.0

Total construction and land development		609.6		594.0		540.3		485.0		395.2
Real estate mortgages
Residential real estate
Adjustable		319.5		317.6		318.8		316.5		329.0
Fixed rate		87.5		89.1		90.2		93.4		95.5
Home equity mortgages		91.4		91.7		93.1		84.3		84.8
Home equity lines		59.1		56.3		59.4		59.7		58.5

		557.5		554.7		561.5		553.9		567.8
Commercial real estate
Office buildings		131.7		144.3		142.3		143.6		146.4
Retail trade		76.2		83.8		93.5		101.6		111.9
Land		5.3		—		—		0.6		—
Industrial		105.5		104.3		93.3		92.2		94.7
Healthcare		32.4		39.9		33.6		31.6		29.2
Churches and educational facilities		40.2		40.2		36.5		35.6		35.2
Recreation		3.0		2.8		1.8		1.8		1.7
Multifamily		13.8		20.0		19.1		19.2		27.2
Mobile home parks		3.9		3.2		3.1		3.1		3.0
Lodging		22.7		27.9		28.0		26.7		26.6
Restaurant		8.2		8.0		9.0		8.6		6.2
Agricultural		12.9		12.4		9.0		8.7		8.5
Convenience stores		23.2		23.1		24.9		23.6		23.5
Other		38.3		40.1		41.6		42.5		43.6

		517.3		550.0		535.7		539.4		557.7

Total real estate mortgages		1,074.8		1,104.7		1,097.2		1,093.3		1,125.5
Commercial & financial		126.7		93.9		94.8		88.5		82.8
Installment loans to individuals
Automobile and trucks		25.0		24.1		23.0		21.9		20.8
Marine loans		33.2		33.3		25.2		26.0		26.0
Other		28.2		27.5		27.9		27.4		26.1

		86.4		84.9		76.1		75.3		72.9
Other		0.9		0.5		0.4		0.5		0.3

	$	1,898.4	$	1,878.0	$	1,808.8	$	1,742.6	$	1,676.7

QUARTERLY TRENDS – LOANS AT END OF PERIOD (Unaudited) (continued)

(Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	2009
	1st Qtr		2nd Qtr		3rd Qtr

Construction and land development
Residential
Condominiums	$	16.3	$	16.8	$	9.0
Townhomes		4.2		2.3		-
Single family residences		20.5		16.7		7.1
Single family land and lots		51.4		43.3		25.4
Multifamily		24.8		17.6		16.1

		117.2		96.7		57.6
Commercial
Office buildings		17.4		13.8		13.8
Retail trade		70.0		55.9		23.0
Land		60.9		51.2		50.8
Industrial		9.0		8.5		8.2
Healthcare		5.7		6.0		4.8
Churches and educational facilities		—		—		-
Lodging		0.6		—		-
Convenience stores		—		—		-
Marina		31.6		30.0		28.1
Other		6.2		1.4		-

		201.4		166.8		128.7
Individuals
Lot loans		34.0		32.4		30.7
Construction		16.2		11.8		11.1

		50.2		44.2		41.8

Total construction and land development		368.8		307.7		228.1
Real estate mortgages
Residential real estate
Adjustable		333.1		328.0		325.9
Fixed rate		90.8		90.6		89.5
Home equity mortgages		85.5		83.8		83.9
Home equity lines		60.3		60.1		59.7

		569.7		562.5		559.0
Commercial real estate
Office buildings		140.6		141.6		144.2
Retail trade		109.1		120.0		151.4
Land		—		—		-
Industrial		95.3		93.0		89.3
Healthcare		28.3		30.9		25.4
Churches and educational facilities		34.8		34.6		30.8
Recreation		1.7		1.4		3.3
Multifamily		27.2		31.7		35.1
Mobile home parks		3.0		5.6		5.6
Lodging		26.3		26.3		25.6
Restaurant		6.1		5.1		5.0
Agricultural		8.2		11.8		12.0
Convenience stores		23.3		23.2		22.8
Other		43.0		47.6		34.0

		546.9		572.8		584.5

Total real estate mortgages		1,116.6		1,135.3		1,143.5
Commercial & financial		75.5		71.8		66.0
Installment loans to individuals
Automobile and trucks		19.4		18.0		16.6
Marine loans		26.3		26.9		26.8
Other		25.7		24.3		23.3

		71.4		69.2		66.7
Other		0.3		0.3		0.3

	$	1,632.6	$	1,584.3	$	1,504.6

QUARTERLY TRENDS – INCREASE (DECREASE) IN LOANS BY QUARTER

(Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	2008
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr

Construction and land development
Residential
Condominiums	$	(3.0	)	$	(9.8	)	$	(14.8	)	$	(15.2	)
Townhomes		(1.2	)		(3.8	)		1.7			(15.6	)
Single family residences		(2.3	)		(7.2	)		(12.3	)		(10.4	)
Single family land and lots		(4.3	)		(17.0	)		(24.9	)		(17.4	)
Multifamily		(1.9	)		1.4			(3.3	)		(3.9	)

		(12.7	)		(36.4	)		(53.6	)		(62.5	)
Commercial
Office buildings		(1.8	)		2.0			(3.3	)		(10.5	)
Retail trade		(8.6	)		3.2			4.9			0.2
Land		9.9			(17.1	)		(1.5	)		(0.6	)
Industrial		3.9			3.9			(0.1	)		(7.4	)
Healthcare		—			—			(1.0	)		—
Churches and educational facilities		—			0.1			(0.1	)		—
Lodging		(11.2	)		—			—			—
Convenience stores		0.1			(1.8	)		—			—
Marina		3.7			2.1			1.6			0.2
Other		1.4			(5.0	)		(0.9	)		0.6

		(2.6	)		(12.6	)		(0.4	)		(17.5	)
Individuals
Lot loans		—			0.6			(1.6	)		(2.7	)
Construction		(0.3	)		(5.3	)		0.3			(7.1	)

		(0.3	)		(4.7	)		(1.3	)		(9.8	)

Total construction and land development		(15.6	)		(53.7	)		(55.3	)		(89.8	)
Real estate mortgages
Residential real estate
Adjustable		(1.9	)		1.2			(2.3	)		12.5
Fixed rate		1.6			1.1			3.2			2.1
Home equity mortgages		0.3			1.4			(8.8	)		0.5
Home equity lines		(2.8	)		3.1			0.3			(1.2	)

		(2.8	)		6.8			(7.6	)		13.9
Commercial real estate
Office buildings		12.6			(2.0	)		1.3			2.8
Retail trade		7.6			9.7			8.1			10.3
Land		(5.3	)		—			0.6			(0.6	)
Industrial		(1.2	)		(11.0	)		(1.1	)		2.5
Healthcare		7.5			(6.3	)		(2.0	)		(2.4	)
Churches and educational facilities		—			(3.7	)		(0.9	)		(0.4	)
Recreation		(0.2	)		(1.0	)		—			(0.1	)
Multifamily		6.2			(0.9	)		0.1			8.0
Mobile home parks		(0.7	)		(0.1	)		—			(0.1	)
Lodging		5.2			0.1			(1.3	)		(0.1	)
Restaurant		(0.2	)		1.0			(0.4	)		(2.4	)
Agricultural		(0.5	)		(3.4	)		(0.3	)		(0.2	)
Convenience stores		(0.1	)		1.8			(1.3	)		(0.1	)
Other		1.8			1.5			0.9			1.1

		32.7			(14.3	)		3.7			18.3

Total real estate mortgages		29.9			(7.5	)		(3.9	)		32.2
Commercial & financial		(32.8	)		0.9			(6.3	)		(5.7	)
Installment loans to individuals
Automobile and trucks		(0.9	)		(1.1	)		(1.1	)		(1.1	)
Marine loans		0.1			(8.1	)		0.8			—
Other		(0.7	)		0.4			(0.5	)		(1.3	)

		(1.5	)		(8.8	)		(0.8	)		(2.4	)
Other		(0.4	)		(0.1	)		0.1			(0.2	)

	$	(20.4	)	$	(69.2	)	$	(66.2	)	$	(65.9	)

QUARTERLY TRENDS – INCREASE (DECREASE) IN LOANS BY QUARTER (Continued)

(Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


	2009
	1st Qtr			2nd Qtr			3rd Qtr

Construction and land development
Residential
Condominiums	$	(1.1	)	$	0.5		$	(7.8	)
Townhomes		(1.9	)		(1.9	)		(2.3	)
Single family residences		(6.3	)		(3.8	)		(9.6	)
Single family land and lots		(1.4	)		(8.1	)		(17.9	)
Multifamily		(2.0	)		(7.2	)		(1.5	)

		(12.7	)		(20.5	)		(39.1	)
Commercial
Office buildings		0.1			(3.6	)		—
Retail trade		1.3			(14.1	)		(32.9	)
Land		(12.4	)		(9.7	)		(0.4	)
Industrial		(4.3	)		(0.5	)		(0.3	)
Healthcare		5.7			0.3			(1.2	)
Churches and educational facilities		—			—			—
Lodging		0.6			(0.6	)		—
Convenience stores		—			—			—
Marina		0.9			(1.6	)		(1.9	)
Other		0.2			(4.8	)		(1.4	)

		(7.9	)		(34.6	)		(38.1	)
Individuals
Lot loans		(1.7	)		(1.6	)		(1.7	)
Construction		(4.1	)		(4.4	)		(0.7	)

		(5.8	)		(6.0	)		(2.4	)

Total construction and land development		(26.4	)		(61.1	)		(79.6	)
Real estate mortgages
Residential real estate
Adjustable		4.1			(5.1	)		(2.1	)
Fixed rate		(4.7	)		(0.2	)		(1.1	)
Home equity mortgages		0.7			(1.7	)		0.1
Home equity lines		1.8			(0.2	)		(0.4	)

		1.9			(7.2	)		(3.5	)
Commercial real estate
Office buildings		(5.8	)		1.0			2.6
Retail trade		(2.8	)		10.9			31.4
Land		—			—			—
Industrial		0.6			(2.3	)		(3.7	)
Healthcare		(0.9	)		2.6			(5.5	)
Churches and educational facilities		(0.4	)		(0.2	)		(3.8	)
Recreation		—			(0.3	)		1.9
Multifamily		—			4.5			3.4
Mobile home parks		—			2.6			—
Lodging		(0.3	)		—			(0.7	)
Restaurant		(0.1	)		(1.0	)		(0.1	)
Agricultural		(0.3	)		3.6			0.2
Convenience stores		(0.2	)		(0.1	)		(0.4	)
Other		(0.6	)		4.6			(13.6	)

		(10.8	)		25.9			11.7

Total real estate mortgages		(8.9	)		18.7			8.2
Commercial & financial		(7.3	)		(3.7	)		(5.8	)
Installment loans to individuals
Automobile and trucks		(1.4	)		(1.4	)		(1.4	)
Marine loans		0.3			0.6			(0.1	)
Other		(0.4	)		(1.4	)		(1.0	)

		(1.5	)		(2.2	)		(2.5	)
Other		—			—			—

	$	(44.1	)	$	(48.3	)	$	(79.7	)

EXHIBIT 99.2
To Form 8-K dated October 29, 2009

Seacoast Banking Corporation of Florida
Third Quarter 2009 Earnings Conference Call
October 30, 2009
10:00 AM Eastern Time


Operator:		Good morning, ladies and gentlemen, and welcome to the Seacoast’s Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.
		I will now turn the call over to Mr. Dennis S. Hudson. Mr. Hudson, you may begin.
Dennis S. Hudson II:		Thank you very much, and welcome to Seacoast’s Third Quarter 2009 Conference Call. Before we begin, I’ll direct your attention to the statement at the end of our press release regarding forward statements. During the call, we are going to be discussing issues that constitute a forward-looking statement within the meaning of the Securities and Exchange Act and accordingly our comments are intended to be covered within the meaning of Section 27A of the Act.
		With me today is Jean Strickland, our Bank President and Company COO; as well as Russ Holland, our Chief Banking Officer; and Bill Hahl, our Chief Financial Officer.
		We reported a loss this quarter totaling $40.8 million, or a $1.21 per share, including our preferred dividend and accretion applicable to our common shareholders. The loss resulted from higher loan charge-offs, loan sales during the quarter, and a reserve build; while core earnings, the net interest margin and deposit growth, all showed signs of nice improvement. While we remain disappointed with our results for the quarter given the loss we posted, we also made significant progress on a number of objectives that will ultimately lead us back to both improvements in the level of problem assets and positive earnings. We believe we are now at or very close to an inflection point or peaking in the level of problem assets and in the level of loan charge-offs.
		As you know, we have been relentlessly focused on bringing down our credit risk profile over the past two years, and this quarter we achieved a milestone by essentially completing our goal to eliminate our residential construction and development exposure. This has been the source of our worst loan experience over the past two years. We cut this portfolio in half this past quarter; and at this point, the category has been reduced to around 3% of loans and the balance is being carried at an anticipated liquidation value. Losses and non-performers coming out of this portfolio were down significantly, as we said would happen last quarter. Losses coming out of this portfolio are now expected to be quite modest, and the level of nonperforming loans will continue to fall as we move forward from here.
		We have been pursuing a targeted liquidation plan for some time now, and we have moved this quarter ahead of our liquidation schedule for the first time in this cycle. Moreover, we have positioned things to now achieve even more rapid progress we think in the next quarter. At the end of this quarter, our overall construction and development loan exposure fell below the 100% of regulatory capital threshold; and our total commercial real estate exposure, including construction and development loans, fell below the 300% of regulatory capital threshold. This means we are no longer considered under regulatory guidance to have high concentrations in commercial real estate. Unfortunately, we do have a high level of nonperforming assets, however, and so we are not suggesting that we now present a profile of low credit risk. But what I am suggesting is that we have moved significantly to reduce concentrations, and we have moved far deeper into the recognition of our problems than many have, and this is the key in the current environment to making progress in the future.
		For over a year now, we have maintained a very intensive focus on our commercial real estate portfolio given the general stress we have seen in our markets. Our team continuously reviews these credits to ensure that at all times we have properly recognized risk levels. We performed continuous reviews using current financial information; and at the end of this quarter, our internal data would suggest all but a very small number of these reviews are up-to-date. So we are very current in our understanding of our CRE portfolio. We also this quarter, following our capital raise, took a deeper look at our internally classified CRE loans and tested cash flows against our current outlook, the borrowers’ current condition and borrower financial trends, and moved a number of performing credits to a nonperforming status. These represent borrowers that we believe will begin to exhibit deterioration as we move into the final stages of this downturn. You can see this in our detailed table that reviews overall nonperforming loans that is contained in our press release.
		Total nonperforming loans grew around $27 million over the prior quarter, and this included a $30 million reduction in residential construction non-performers. The largest growth came from the CRE category, which grew $33 million, and the commercial construction and development category, which grew by $19 million. We also charged down a number of loans in this portfolio and anticipate that many of these loans will either be restructured as troubled debt restructures in the next quarter or two or considered for sale in the next few quarters. Taking this action has positioned us to more aggressively pursue both loss mitigation and loan sales strategies which, together with the improvements in our residential acquisition and development portfolio, will begin to move the ball back in the other direction, as I stated earlier in my comments.
		Now I’m going to turn the call over to Bill for a few more comments on the quarter. Bill.
William R. Hahl:		Thanks, Denny. I’ll be referring to a couple of slides that we posted out on our website this morning.
		Much like last quarter, there’s more to our earnings story than the reported loss, and there are some reasons to be encouraged by the core business trends that have recently emerged and the prospect of an improving economy. Specifically, the expanded net interest margin and lower core operating expenses give us reasons to be tentatively optimistic about the direction that the operating environment is headed and what it might mean for our future pre-tax pre-provision earnings. As is typical in a recession, overall revenue has remained soft with relatively stable net interest income, but lower noninterest income. Net interest income was up modestly the last several quarters as net interest margin expanded due to an increase in core deposits, as well as an improved mix that enabled the reduction of higher cost sources of funding. Disciplined expense management was also evident across controllable operating expenses again this quarter as we remained focused on continually uncovering efficiency improvement opportunities. However, expenses related to other real estate, FDIC insurance, and credit and collection costs have remained high. I believe we are doing a good job here controlling what we can control and taking advantage of opportunities that are out there, even in this current environment.
		Now turning to Slide 6, noninterest expenses:
		Noninterest expenses which are controllable have declined by 11.1% when compared to the third quarter last year and by 1.4% compared to last quarter. On this slide, we have adjusted out some one-time items and credit costs that will decline as the level of nonperforming assets decrease and the economy improves as expected over the next several quarters. Now what we want you to understand is that sequential controllable expenses are declining, but are being impacted by some one-time items and higher credit costs. Overall, core expense management continues to be strong as we move through this period of time.
		Turning to Slide 4, I’d like to take a moment to review our capital position. Slide 4 illustrates our improved capital position as a result of the successful common stock offering in the third quarter. We maintain a solid capital level with an estimated Tier 1 capital ratio of 14.9% at quarter-end. Tangible common equity increased from 4.66% last quarter to 6.14%, and the total risk-based capital ratio increased from 13.4% to 16.2%. An additional $13.5 million of equity will be added in the fourth quarter and will help maintain these solid capital ratios at year-end.
		Moving on to deposits: The pace of growth of deposits, excluding brokered CDs, increased nicely during the quarter. This is normally a seasonally weak quarter for deposit growth. Please note that like last quarter, this quarter’s growth continued in core customer accounts with improved market share and services per household. In addition, we continue to manage our CD pricing carefully due to our strong liquidity position.
		Now I’ll take a minute to cover the margin on Slide 7. The margin expanded again this quarter, increasing by a better than expected 9 basis points to 3.74%. Lower deposit pricing and improved funding mix drove the expansion, with increased core deposits facilitating a reduction in the higher cost broker deposits. While we are expecting margin expansion, we were pleasantly surprised by the level. During the quarter, we began shifting some of our CD product offerings to longer maturities as a hedge against future interest rates increases. Interest rates are forecasted to begin to rise when the Fed removes liquidity and other measures now utilized to jumpstart our economy.

Our view of the margin risks and opportunities in the fourth quarter is largely unchanged from last quarter. Loan and deposit pricing will provide the primary opportunities for any margin expansion. The primary risks include the possibility that loan balances will continue to decline and nonperforming loan growth will be greater than expected. In addition, seasonal funding growth, both deposits and repurchase agreements, are likely to be invested at low spreads, improving net interest income, but lowering the margin. Netting the pluses and minuses, our guidance on future net interest margin is also largely unchanged from last quarter. We believe the margin will remain relatively stable in the short run with modest additional expansion possible. I really do want to emphasize the words “relatively stable” and “modest” in the fourth quarter outlook as the risk and opportunity appear to be balanced at this time.

Let’s move on to noninterest income. Performance in most noninterest income categories was acceptable given the normal seasonal weakness versus the second quarter. However, overall noninterest income continues to be soft in investment related areas such as trust income and retail brokerage services. Service charges on deposit accounts had nice linked quarter growth of 10.9%, as a result of over a year of improved core deposit customer relationship growth, the increased services per household and better account retention results. In a recent market share report as of June 30, 2009, in the Company’s Treasure Coast market, it was reported that the Company is now in second position in that very important market where 74% of the Company’s overall total deposits are maintained.

In summary, capital and liquidity positions are strong and have improved, net interest margin expanded, deposit growth improved and mix was further enhanced, and deposit fee areas increased nicely. These are the components of our results for the quarter, which gives us encouragement as we move into the fourth quarter and into 2010.

Now with that, I will turn the call back to Denny.


Dennis S. Hudson II:		Thanks, Bill. Bill didn’t mention anything about our deferred tax asset, and I think I’ll make a comment on that. You can see that during the quarter we did not book a tax benefit. Importantly, we also did not recapture an expense for any prior period of tax benefits either. So we have been very careful, and we have been conservatively managing our DTA and, in an abundance of caution, have not placed any reliance on our forecasted future taxable earnings projections. We have done this for fear that doing so could create surprises if our projections are later challenged—and you have seen some of those surprises this quarter with a number of other issuers in the Southeast. We anticipate we will, however, begin to place greater reliance on our forward earnings estimates as we begin to see improvements in our credit trends, which could result in a recovery of our DTA valuation allowance and a realization of future tax benefits.
		Turning to local economic conditions, the real estate housing market, or residential housing market, continues to show signs of stabilization here in South Florida. Inventory for existing homes continues to decline in most of our markets and currently stands at a seven to eight-month supply level, down from as high as 30 months at the peak. The inventory of new homes has come down to an almost negligible level at this point. Foreclosures continue to be a problem, but trends have stopped growing and will simply maintain or remain at a high level, I think, for a while. But affordability has returned, as we said last quarter, due to lower home prices, and the foreclosures are being absorbed much better than I would have imagined. Unemployment remains high throughout our markets and has increased over the last several quarters; although, the rate of growth is now slowing.
		So as I said last quarter, it’s clear to me that the residential asset values are beginning to stabilize. We continue to get reports of real buyer competition for selective properties, which is encouraging. We do however face the broader effects of the severe recession, including the high unemployment rate, and this will continue to pose a challenge for us and everybody in the State as we conclude 2009.
		As we said in our last call, our focus for the year was going to be growing our core deposit franchise—which we have done—and growing our residential mortgage lending production in response to the favorable rate environment—which we have done. We have seen tremendous progress this quarter in both of these areas and this, combined with the expense reductions that Bill spoke of, continue to help us build core earnings momentum as it has all year and which will be important as we continue to work through our remaining credit issues, particularly in the next quarter.
		Now we would be happy to pause and take a few questions.
Operator:		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’re using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if there are any questions, press star then one on your touchtone phone.
		And our first question comes from Joe Fenech from Sandler O’Neill. Please go ahead.
Joe Fenech:		Good morning, guys.
Dennis S. Hudson II:		Hey, Joe.
Joe Fenech:		Hey, Denny, just to clarify on the DTA in terms of what is the total DTA, and then what is the total allowance that you’ve established against that?
William R. Hahl:		The total is around $22 million, and we have a $5 million... Let me back up. As of the end of the second quarter, we had a net DTA of $17 million, $22 million gross...
Dennis S. Hudson II:		$5 million allowance.
William R. Hahl:		....$5 million valuation allowance. We added about $15.7 [million] to both numbers in the quarter.
Joe Fenech:		Okay. And so thinking about the tax line going forward here, is it fair to say that you are not going to be seeing a tax benefit?
William R. Hahl:		Well, as Denny mentioned, we do have forecasts of future taxable earnings. We are waiting to be more comfortable about those earnings estimates and projections, so we are being more conservative right now in terms of not placing any reliance on those forecasts of future earnings. But as our provisioning begins to be more predictable, as we believe we will emerge after this quarter, we will see future tax benefits being recorded. And of course, once we can identify the—or rely on that and we have sufficient reliance—the $15.7 million that we added to the valuation allowance would also...
Dennis S. Hudson II:		Reverse.
William R. Hahl:		...reverse out.
Dennis S. Hudson II:		So the valuation allowance, the DTA is $37.7 million and the valuation allowance against it at the end of the quarter was $20.7 [million], so it stayed stable at $17 [million], at a net 17 [million].
Joe Fenech:		Okay. And then, Denny, can you comment at all as to whether the regulators, as a part of your formal agreement, had imposed any type of deadline for you to get below the concentration thresholds for commercial real estate and construction; or would it be fair to say that the decision to really try and get below the thresholds this quarter was entirely yours, and more a function of just you got the capital in the door and you are deciding on your own to really take a good whack at some of these problem assets?
Dennis S. Hudson II:		The latter. They’ve had no... The agreement simply states that though shall try to have appropriate controls around concentration. It has no targets or anything like that; so it was entirely our thought that we have been on this tear to bring down our concentrations, and in particular in the residential development area. And you are right, we strengthened our capital significantly this quarter, and we moved forward aggressively. Jean?

O. Jean Strickland: The thresholds are guidance, not mandates.


Dennis S. Hudson II:		Yeah, and they are not mandates; it’s just a guidance. I just thought it was a key accomplishment this quarter to have, in the middle of a pretty severe recession, actually brought those numbers down to a level below those thresholds expressed in the ‘05/06 guidance.
Joe Fenech:		Okay. And then two more here. Denny, you said in the release that you expect charge-offs to moderate in the fourth quarter and then more so going forward after that. You had the big spike this quarter: 10% from just under 4% in the second quarter. I know it might be difficult to say for sure, but would you say that we should look for a number in the fourth quarter closer to the 10% or closer to the 4%? In other words, do you get back to that 4% range, or might have even a number lower than that from what you can see now? Any kind of range you can give us would be helpful there.
Dennis S. Hudson II:		If you put a gun to my head because we’re... that’s really getting speculative, but I would say it’s, worse case, going to be in the...
Joe Fenech:		In the middle of that range (inaudible).
Dennis S. Hudson II:		...middle of that range. In best case, a little below the low end of the range, so it’s... We’ll have undoubtedly... The reason I say that is we may have more liquidation; that’s kind of what we are pursuing right now... To be frank, some of the final liquidation we see out there—and we did a lot of it this quarter—and we’ll do a little more next quarter. We, at that point, have made substantially all the progress we set out to make; I guess it’s fair to say. We have had a plan in place—to some degree it has been an evolving plan over the past two years—and it’s overriding objective was to recognize the severe conditions in our markets that we saw coming. Unfortunately, we didn’t see it two years prior to that. But once we recognized it, we got onboard and developed a plan to bring down these exposures. And for the first time in this cycle, we are now ahead of that plan—and actually fairly substantially ahead of that plan—and we have made tremendous progress and have completed that work, I think, in the next quarter.
Joe Fenech:		Okay. So it would be fair to say, when thinking about provisioning levels—again I know this is speculative, but since do you feel like you are at the tail end—that the provisioning level should more closely match charge-offs, rather than us seeing more significant reserve build ahead?
Dennis S. Hudson II:		That’s hard to say as we move forward, but that would be our objective, yes.
Joe Fenech:		Okay. And then last question... I’m sorry, do you have something else?
Dennis S. Hudson II:		And just to be clear, as we said in the release, we anticipate the provisioning will be down substantially in the quarter, but we will have some provisioning, and then we believe it’ll start to really begin to moderate as we approach 2010.
Joe Fenech:		Okay. And then last...
Dennis S. Hudson II:		This is more of a goal as opposed to a prediction, but our goal is to position ourselves to operate in a much more comfortable position, let’s say, in 2010.
Joe Fenech:		Okay, I appreciate the color on that. And then just lastly, Denny, we saw the 8-K the other day, which seemed to cement the transaction with CapGen. Are we right to assume that transaction is now completely behind you and that you have the $14 million or so in additional capital?
Dennis S. Hudson II:		We have not closed yet, Joe, but we filed a definitive agreement—the stock purchase agreement as you saw in the 8-K—and we are awaiting final Fed approval, which is required for that investment—not of us, it is Fed approval of the private equity firm of CapGen. We anticipate that to occur monetarily, and anticipate that closing during the fourth quarter, yes.
Joe Fenech:		Thank you, guys.
Operator:		Our next question comes from Christopher Marinak from FIG Partners, please go ahead.
Christopher Marinak:		Hey, it’s Chris Marinak at FIG Partners. How are you, Denny?
Dennis S. Hudson II:		Hey, Chris.
Christopher Marinak:		Wanted to ask about the difference between your non-performers, including the restructured credits, at the end of September and what your classified loans look like. I mean just for directionally, would there be a smaller gap now between classifieds and non-performers given some of your judgments this quarter?
Dennis S. Hudson II:		No question. In fact, it’s a fairly substantial closure of that gap. We are in the later stages of that whole migration thing. Chris, I don’t know, I guess it’s somewhat dangerous what we said this quarter, but this is the first time in the cycle we have begun to talk about this, about the migration beginning to reach that inflection point. We think we were very aggressive this quarter in an effort to be able to demonstrate that as we go forward, so we will see. But again, not something I have said yet until now.
Christopher Marinak:		So, Denny, is there a way to dissect the quarter in terms of inflows and outflows on the nonaccrual side, even if—particularly if we were going to exclude some of the CRE credits that you mentioned?
Dennis S. Hudson II:		Well, I guess to give you color on that, we had significant inflow this quarter into NPAs, but it was not significant inflow into cited and classified, and we have been seeing some stability there, but we did see significant inflow into the NPAs. And the other news headline associated with that is that a lot of that inflow came in the CRE area, as you can see, and it was offset by outflows, pretty substantial outflows, in the residential construction development area. So the good news is we have essentially completed the liquidation work on the residential side, and the bad news is we had these inflows on the CRE. What we are trying to say is that these are not... that these were largely...I will say a good chunk of the inflow, and particularly for the CREs—if not 75% of them—are performing loans, but they are performing loans that we have concerns about, and we are actively engaged with various borrowers and discussing various options with them. The good news about this asset class is that in every case there are cash flows that are there—so it is a very, very different animal than what we have lived through over the last two years. and we are working with borrowers to achieve troubled debt structures and that sort of thing.

For two quarters, Chris, we have been saying we are going to see an increase in trouble debt structures; and I would predict we will see a more substantial increase in trouble debt restructures next quarter as a result of work that we have ongoing right now. We are also, as an alternative, looking—and we don’t have any loans held for sale in this category at this point, so we are not that far along—but we have some work underway in terms of loan sales; and we are competing TDR direction against loan sales in some cases to determine what we think is the best outcome for us. That is going to all get concluded, a chunk of it anyway, probably in the coming quarter and perhaps a small amount of it in the following quarter. When you look at that, and you look at the cited and classified and you look at the trends, our conclusion is that we think there is a good chance we are probably at the high watermark for this cycle.


Christopher Marinak:	Great, Denny. Just one quick question for Bill.	Bill, on the other expenses controllable on the slides, the
	credits costs, the 964 and 886 last quarter, are those all maintenance-related costs, or do some of those
	include some write-downs and losses in there?
William R. Hahl:	Mostly legal and taxes, delinquent taxes, that type of thing, and then some management expenses. We have a few properties, OREO properties. But most of it is delinquent taxes and legal costs.
Christopher Marinak:	Okay, very good. Thank you very much, guys.
Dennis S. Hudson II:	Thank you, Chris.
Operator:	Our next question comes from Mac Hodgson from SunTrust Robinson. Please go ahead.
Mac Hodgson:	Hey, good morning.
Dennis S. Hudson II:	Good morning.
Mac Hodgson:	What was the total amount of loan sales in the quarter?
Dennis S. Hudson II:	It was not a huge number. It was...
William R. Hahl:	20.
Dennis S. Hudson II:	...$20-25 million, something like that.
Mac Hodgson:	And what were the charge-offs related to that?
Dennis S. Hudson II:	Well, they were pretty big this quarter, because there was some nasty stuff that we sold. It was... 17.
William R. Hahl:	No, a little less than that...
Dennis S. Hudson II:	15.
William R. Hahl:	...like 13.
Dennis S. Hudson II:	13 to 15 of that was included in charge-offs.
Mac Hodgson:	Okay, so $25 billion was the book balance before the charge-offs?
Dennis S. Hudson II:	You got it, yep. And these were assets that we were pursuing workouts on, and we just ultimately concluded we were going to blow them out of there.
Mac Hodgson:	And I guess they were all residential land development construction?
Dennis S. Hudson II:	Yeah, they were. Yeah, pretty much.
Mac Hodgson:	And then on the commercial real estate review that you all did, can you give any more color in just which property types you saw a weakness and what were the types of weaknesses that you saw; and then how you plan to restructure around that?
Dennis S. Hudson II:	Sure. Well first of all, we didn’t conduct a new review of CRE. We have been intensely... First of all, we always review the entire portfolio and so forth, but we have been intensely reviewing the CRE portfolio for well over a year, and are very concerned about the latent effects of the real estate crash that has occurred in Florida and how that would ultimately affect our CRE exposures and the like. We were particularly concerned about our commercial construction exposures, for example, and so we have been spending considerable effort over the past 12 to 18 months on that entire portfolio. We saw this quarter and last quarter, but particularly this quarter, that the end migration of internally identified problems or potential problems began to moderate; and so at the end of this quarter, we reoriented our attack on that portfolio and determined that we wanted to more aggressively pursue liquidation and pursue troubled debt restructures. In particular, we wanted to proactively reach out and identify the number of larger...generally the larger credits in the portfolio that were experiencing stress, but that were continuing to perform at least in accordance with payments. They may be in some kind of default, nonpayment type default, but... So we tackled those this quarter and we got those behind us, and we took some marks—in some cases with very large charge-offs—but it frees us up now to bring that to a conclusion in the next quarter.
	Color on what they are: I wouldn’t say there is a particular area of focus. It’s just kind of a general weakness generally throughout that category and fortunately most of it is performing very well and is in good shape. But we have identified what we think are the areas of greatest concern and have proactively gone forward and addressed them this quarter.
Mac Hodgson:	Okay. So it sounds like, and I think you said the end migration in the commercial real estate segment and the potential problems has slowed, but you just decided to take a more aggressive stance with problems that are already identified?
Dennis S. Hudson II:	That’s precisely correct. And as a result of that, there was a significant inflow of nonperforming loans this quarter, and of course, they flow out of what was our internally identified cited and classified and alike. So when I was talking about some stability, I’m talking about the cited and classified. We saw some migration from that into non-performers this quarter that was significant.

O. Jean Strickland: It might help to explain that we have an annual review process under which, at a minimum, credits are reviewed annually in the commercial real estate portfolio; and as a result of getting updated financial information, although the loans were performing, we identified the stress with each borrower and so we dealt with it very aggressively.


Dennis S. Hudson II:		Right.
Mac Hodgson:		Okay great. Just one last question, while you still have an obviously elevated level of NPAs, you mentioned potentially getting to a high watermark here, and I know you’ve raised capital as well. With that in mind, what’s the Company’s willingness and ability to do an assisted transaction in the near-term?
Dennis S. Hudson II:		Well, that’s something we’ll look at very carefully. It’s a challenge for us in many ways, but all I can say is it’s something that we look at very carefully. I guess it’s suffice to say that it’s important and imperative for us to get behind us some of these issues that we have been working on getting behind us for a long period of time here. Over the last year, in particular, it has been very, very brutal for us and for our shareholders, but we are gaining on it. We are beginning to see some light at the end of the tunnel, I would say, at this point. And because we can see that, we think it is imperative for us to get this behind us sooner, rather than later, because you are absolutely right, the opportunities out ahead of us are significant, particularly with regard to assisted transactions; and if we can take advantage of those...having ourselves in a stronger position to take advantage of those is going to serve all shareholders very well as we look out over the next six months.
Mac Hodgson:		And given the kind of agreement you all are in with the regulators, is there an understanding that you’d be able to bid on a transaction?
Dennis S. Hudson II:		Well, we think under certain circumstances that could happen; and under other circumstances, that would be very difficult. But suffice it to say that as we continue to focus on the things we have been talking about on this call—all of which are designed to improve our performance out a quarter or so—it is important for us, and so that is what we are doing and we will continue to pursue that. So to answer your question, under certain circumstances, we probably could participate; and under others, we probably couldn’t.
Mac Hodgson:		Okay great. Appreciate it.
Dennis S. Hudson II:		Yep.
Operator:		Our next question comes from Dan Bandeye from Integrity Asset Management. Please go ahead.
Dan Bandeye:		Great. Thank you. Just really two follow-up questions or clarifications on a couple of your earlier answers. One was on the deferred tax asset, the 17 million net. Now if I understand that right, is that 17 million net then included in your GAAP capital?
Dennis S. Hudson II:		Yes.
Dan Bandeye:		What about in your regulatory capital?
William R. Hahl:		We have another haircut on a regulatory basis. It’s more like about 14 million, I think.
Dennis S. Hudson II:		But we are... The fact that we did not book a tax benefit this quarter had no impact on our regular capital ratios because of that limitation. So we are... Under the regulatory capital limitations, we will continue to be limited in accounting as a deferred tax.
Dan Bandeye:		Right. Okay. And from a GAAP basis, I’m just curious on the conversations that you have had with your auditors and the justification to keep the 17—and again, and I think you had mentioned relative to some of the other folks who have ended up reversing all of their deferred tax assets, some on having quarters like yours and maybe been more aggressive having larger than expected losses resulting in auditors kind of forcing them to take a reserve against the whole asset. Just curious the conversations you are having there and the confidence that you have that the 17 million is justifiable.
William R. Hahl:		Well there is always a risk on a deferred tax asset. Its realize-ability is based on two things: 1) you can support it with future tax strategies—and that is what that 17 million is supported by—as long as those tax strategies can be executed in the carry-forward period of 20 years, that supports the realize-ability of those; or on 2) future earnings. The only thing I can say is, and not knowing the other folks and what happened, we have not placed reliance on, as I stated earlier, our future taxable earnings forecast to this point, because of the uncertain economic conditions that have been around. It appears to me that the difference between what we have done and what others have done in the past, anyways, is that they were supporting their DTAs, which is the second way you can support them, by forecasts of future taxable earnings; and given the fact that they have had more weakness and losses, they no longer could rely on that for support, and that’s why they had to reverse theirs. It wasn’t...they weren’t supporting theirs based on tax planning strategies.
Dan Bandeye:		And can you give just a flavor for the type of strategies you are talking about?
William R. Hahl:		Well it’s as simple our investment portfolio has...
Dennis S. Hudson II:		...Unrealized gains, that would be one strategy. And we have a number of others, but that would be a good example.
William R. Hahl:		..or built in gains in assets that we have basically.
Dennis S. Hudson II:		Right.
Dan Bandeye:		Okay. And then I also just wanted to make sure I understood when you were talking with I think Joe from Sandler about the provision going forward. I think you had mentioned talking about that some of the range is going to depend on how successful you are with some of the dispositions of assets going forward in the next quarter. If you’re more successful, do I understand correctly that the provision would be higher?
Dennis S. Hudson II:		Yes, I think that...
William R. Hahl:		Yeah, that would be the higher end of the range.
Dennis S. Hudson II:		Yeah, that would take us to the higher end of the discussion, the color we gave.
Dan Bandeye:		And I’m not trying to put a forecast out there...
Dennis S. Hudson II:		Sure.
Dan Bandeye:		...but I’m just curious though, as you are looking at those assets that you are looking to dispose, if you could give us a feel for the marks that are... or the reserve that are already against them; and why you think then, if there would be say a charge-off relative to unwinding the asset or selling it or however you would dispose of it, why wouldn’t that asset be marked to that level today?
Dennis S. Hudson II:		That’s a difficult question to answer because the market for those assets is volatile and varies widely. So we carry our assets that are problems, at the very least, at a value that is supported by the cash flows associated with the asset, for example, or by other more subjective appraisal work that is done independent of us and reviewed by us by a professional in-house MIA appraiser who often takes marks against those appraisals—actually recently we haven’t, but let’s say over the last year, we have taken marks. So we try to come up with a reasonable basis that we can rely upon for valuing these assets, and it is resulting in a very substantial write-down in them. Our NPAs I think have an average mark taken overall, which is a big portfolio, of around 34-35 percent, maybe a little higher than that right now. But specific assets in that portfolio, some of them could be marked down much more substantially than that. The question you ask is how do you reconcile that with the “market” for external loan sale? Well, it is not a very efficient market. Assets that we marketed two quarters ago and got ridiculous prices for, maybe the same assets are remarketed today and we get what we think is an acceptable price; so it is really hard to kind of judge where that number is.
Dan Bandeye:		Well could you maybe give just some flavor on the loan sales that you talked about for this quarter, the $20-25 million where you took the $13-15 million in charge-offs, and just how the valuation was so disparate on that; and then maybe compare those assets to the ones that you are seeking to dispose of going forward?
Dennis S. Hudson II:		Yeah, those were the aggregate write-downs on those assets that we sold, but it is impossible to answer that question. I will tell you I am aware of an asset we are selling today that we are going to book a gain on because we have written it down further than we are going to sell it for in the fourth quarter. It’s not a big number, by the way, but a pretty decent gain. And on another, they are all over the board. That’s all I can tell you. One of the assets we sold last quarter, a substantial part of that $25 million was probably a very significant write-down, but it was a very unusual asset. I just can’t go into all the details. If I spent an hour with you though, you’d kind of see it and understand it.
Dan Bandeye:		I guess ultimately what I’m trying to get to is how do we as investors get a sense of confidence that what you are marked at is some type of conservative or appropriate level; and that should you be more successful, as you say, in terms of moving some of these out, that the success doesn’t necessarily always equal pain?
Dennis S. Hudson II:		I think to answer that question is that under accounting rules and under regulatory rules, there are pretty straightforward processes that we follow to support the carrying value of the assets that we hold; and there is great scrutiny on the part of us internally, first of all, over that work, and our external accountants as well, who review our work and are called upon to challenge us if they believe we do not have adequate support for our carrying value. The problem is we are in a volatile environment, that is the market for these assets—these are whole loan assets, everyone of them unique in the CRE portfolio, if you can appreciate that—even the residential assets are somewhat unique—so there is no market out there for those assets that you could rely upon in terms of value. So all we can do is the best job we can, and we have ample support. I will tell you that for...in terms of confidence for why we came up with values of particular assets, we follow all of the impairment rules under FAS 114 that require us to do that. We follow GAAP and have great confidence in that we are carrying assets at what we believe are proper GAAP values.
Dan Bandeye:		That’s great. I appreciate that color. Thanks, guys.
Dennis S. Hudson II:		Yep.
Operator:		Our next question comes from Jim Aga from Millennium Partners. Please go ahead.
Jim Aga:		Hi, guys. Good morning.
Dennis S. Hudson II:		Morning.
Jim Aga:		Thanks for taking the questions. Mac was asking you about your ability or your inability to do assisted transactions; and, Denny, I think you said under certain circumstances you believe you still would be able to. What does that mean? Does certain circumstances mean with respect to certain institutions or what are you alluding to there?
Dennis S. Hudson II:		Well it could be that or it could be the condition of the institution. It could... It has to do with a myriad of things, the size versus our size. It also could have to do with the nature of the acquisition, anything from whole bank to deposit only, so it just depends. And I’m just getting way too speculative to wade into this discussion.
Jim Aga:		Okay. Let me ask about what Chris Marinac was alluding to and that was your noninterest expense and how much it has been impacted by OREO and other types of asset workout costs. What do you guys estimate—and you specifically mention some of those expenses in the quarter—but what do you estimate the core run rate of expenses to be once you work through the OREO?
William R. Hahl:		Well, I think that the slide that we did post, Slide 6, that was the intent was to work it down to...about $16.3 million a quarter is the run rate.
Jim Aga:		Controllable, okay.
William R. Hahl:		Well, you would have to add back the FDIC expense. That’s going to probably be elevated, so it’s about $17.3 million a quarter. I put the FDIC expense in there because it was jumping around so much.
Jim Aga:		Okay. So wait, 17...
William R. Hahl:		So it’s about 17.4.
Jim Aga:		Versus 20.5 reported right?
William R. Hahl:		Right.
Jim Aga:		Okay. So it’s about 3 million lower.
William R. Hahl:		Right.
Jim Aga:		Okay. So you’re... In the verbiage in your text, you say, “Income before taxes and the provision for loan losses for the third quarter of ‘09 totaled approximately $4.6 million” right?
William R. Hahl:		Right.
Jim Aga:		So $4.6 million and then you add back $3 million gets you to $7.6 and maybe we can take away the million dollars of securities gains.
William R. Hahl:		Right.
Jim Aga:		Right?
William R. Hahl:		Uh-huh.
Jim Aga:		Okay. So you’re at about sort of a $6 million core quarterly run rate for pretax, pre-provision.
William R. Hahl:		Right.
Jim Aga:		Okay, when we get through. Okay fine. So that’s good. So it looks cheap on that. Let me ask about... I think the gentlemen before me, his questions are regarding how much of a loss do you guys expect to take on your ballooning portfolio of non-performers, and that’s what I’m trying to sort of ascertain as well. When a couple of the analysts... Excuse me one second...A couple of the analysts that follow the stock have estimated certain losses over the cycle, for not just Seacoast but a number of other banks, right, and the numbers that I’ve seen are around 250 million. If you take a look at what you’ve charged off, including this quarter’s high level of charge-offs, you’re at about 180 million accumulative, since the beginning of 2008, which suggests you are around 70% through and you are one of the higher percentages.
Dennis S. Hudson II:		Okay.
Jim Aga:		So that would leave about 80 million left of over the cycle losses with your portfolio, right? And if you just married that up to your 153 million of nonaccruals...
Dennis S. Hudson II:		Yeah.
Jim Aga:		...that would suggest that you have a fair amount of cushion against that $153 million portfolio.
Dennis S. Hudson II:		Okay.
Jim Aga:		What do you guys think the inherent losses are in that portfolio?
Dennis S. Hudson II:		Gee, I don’t know, a lot less than that I would say.
William R. Hahl:		Yeah, and...
Jim Aga:		Well, you said you’ve already marked it down, right, 35% on average, right, so the gross...
Dennis S. Hudson II:		Yeah.
Jim Aga:		...the amount of those NPAs is 35% higher, right?
Dennis S. Hudson II:		Yep.
Jim Aga:		Is that for the current as well as the non-current?
Dennis S. Hudson II:		Yes. In those two categories, yes, it would include both.
Jim Aga:		Okay.
Dennis S. Hudson II:		Right.
Jim Aga:		Okay. So the gross number is more like ...it’s 200...about 220 million, right?
Dennis S. Hudson II:		Okay, I’m... I don’t have my calculator, but, yeah, okay, got it.
Jim Aga:		Okay. And if you add an extra... If you had 80 million of further sort of like burning through credit, that would be a 40% loss on those outstanding balances, which seems high.
Dennis S. Hudson II:		Yeah, it does. It does to me too.
Jim Aga:		So when you guys raise capital, I’m going to tie that back to the recent capital raise and not just for the public, but for CapGen as well.
Dennis S. Hudson II:		Right.
Jim Aga:		When you guys raise capital, you came out with your own sort of stress test analysis, right?
Dennis S. Hudson II:		Yeah.
Jim Aga:		Is there something that’s changed over the last 60 or 90 days—I can’t even remember when the deal was—but is there something that’s changed with respect to the loan quality or your view of the market and/or realization rates and values which...
Dennis S. Hudson II:		And the answer...
Jim Aga:		...that makes you less comfortable with the top end of those loss estimates?
Dennis S. Hudson II:		No, nothing has changed in any of that that you described. The only thing that has changed is we’ve accelerated our effort.

H. Russell Holland III: The top end was always perceived by us to be a very stressed scenario, which we still do not expect to achieve.


Dennis S. Hudson II:		Right.
Jim Aga:		Which you still do not expect to achieve.

H. Russell Holland III: Correct.


Dennis S. Hudson II:		Correct.
Jim Aga:		...even with these accelerated efforts?

H. Russell Holland III: Correct.


Dennis S. Hudson II:		Right.
Jim Aga:		And what was the number that you guys used for your top end? I can’t go back and get to it now because...

H. Russell Holland III: It was $167 million of additional from that point, which is a quarter old now.


Jim Aga:	167 million, but that would’ve meant... what?	Is that Bill speaking?
Dennis S. Hudson II:	No, that was going forward.

H. Russell Holland III: Going forward from March...


Dennis S. Hudson II:		That wasn’t the cycle number, that was new losses.
William R. Hahl:		Cycle number was close to the 250...
Jim Aga:		So, yeah, exactly, so that would’ve been about 250 and when you started this whole ...when the cycle started, not you...when the cycle started, you were at 2 billion in loans, right?
Dennis S. Hudson II:		I think so.

H. Russell Holland III: Yeah, that’s correct.


Jim Aga:	Around that, okay.	Good. Other than that, you guys did
	a pretty good job growing deposits in the quarter. Is
	there anything to suggest that...and you have cyclically
	had, or seasonally had, down 3Q deposit growth?
Dennis S. Hudson II:	Right.
Jim Aga:	Is there any sort of tactics of strategies or promotions that led to the good account growth and the good deposit growth?
Dennis S. Hudson II:	Yes, that’s all... We don’t spend a lot of time talking about it because we have to spend a lot of time talking about the problems here.
Jim Aga:	Right.
Dennis S. Hudson II:	...But 50% of our energy, easily, is devoted to growing the core deposit base, and it resulted...we have seen a fairly massive turnaround in new households and in some of the metrics associated with those new households over the last 12 months; and that results from work, quite frankly, that we started back in ‘07 to kind of reenergize our entire retail system. We are now morphing that success into small business, and we are focusing on small business opportunities, cash rich small business opportunities, which tend to not come with a lot of loan opportunity. But in this environment, that’s where we’re focused here in these markets, and that is just gearing up right now. We see a continued momentum on the retail deposit growth strategy, and plugging in some improvement on the small business as we go forward over the next year, so it has been a huge thing. It has also been hidden, to some degree, by some deposit losses we have had because the recession came a little later in our Orlando region, and we saw some small business balances climb pretty dramatically up there, and we had a very high concentration of small business in that market. That is now behind us, and we are now internally seeing internal deposit rates really start to ratchet up for the whole Company. We think that is going to be a key positive thing as we go forward. As Bill said earlier in his comments, we backed away in terms of mix from CDs. We have been doing that for two years now, but we are really continuing to back away from some of the higher rate CDs and that sort of thing. Again, I’d just remind you, we have essentially no brokered CDs or any wholesale funding whatsoever.
Jim Aga:	And your loan to deposit ratio is down from roughly a hundred a year ago to...
Dennis S. Hudson II:	Like 80.

H. Russell Holland III: 85.


Jim Aga:		Yeah, so you are ramping up liquidity, that’s good.
Dennis S. Hudson II:		Yeah.
Jim Aga:		One last question for you guys, it’s regarding the commentary on the early stage delinquencies. I think... I’m trying to find it here. I think you said it was down in all asset classes except for residential mortgage.
Dennis S. Hudson II:		That’s right, and that’s plain-vanilla, prime, fully underwritten, fully documented residential mortgage portfolio. And it was up, but it was up off an extraordinarily low number. I think it was 70 basis points or...no...40 basis points last quarter, and it’s up now to 1.2 or 1.3%.
Jim Aga:		And is that primarily from unemployment just remaining high?
Dennis S. Hudson II:		No, I think we just had an extraordinarily low ratio last quarter. I think in the 1% range is not a bad number in this environment.
Jim Aga:		Do you have... I’m waiting on the call report, but do you have the dollar amount? Do you have the total dollar amount of 30 to 89-day past dues?
Dennis S. Hudson II:		Not in front of us, but you’ll see it momentarily when we get the call report filed.
Jim Aga:		That comes out when, you guys?
Dennis S. Hudson II:		Monday.
Jim Aga:		Monday, all right. Great. Thanks for your time.
Dennis S. Hudson II:		Thank you.
Jim Aga:		Thanks for your time. Have a good weekend.
Operator:		And our next question comes from Jefferson Harralson from KBW. Please go ahead.
Jefferson Harralson:		Hey, thanks, guys.
Dennis S. Hudson II:		Hey there.
Jefferson Harralson:		Wanted to just make sure I understand the regulatory DTA. Last quarter you had... I think you had $17 million DTA and a $3 million allowance for $14 million net counting towards the regulatory ratios. How did those numbers change this quarter?
William R. Hahl:		Not at all. We didn’t do anything with that.
Dennis S. Hudson II:		All we did was add the tax benefit...
Jefferson Harralson:		Right.
Dennis S. Hudson II:		...the DTA, and then we added an equal amount, an exactly equal amount to the...
William R. Hahl:		Valuation allowance.
Dennis S. Hudson II:		...valuation allowance.
Jefferson Harralson:		Okay. So you have $14 million counting towards regulatory ratios now?
Dennis S. Hudson II:		Correct.
William R. Hahl:		Correct.
Jefferson Harralson:		Okay thanks. On the capital raise, was the “shoe” exercised on your recent capital raise?
Male Speaker:		Yes.
Jefferson Harralson:		Okay. Next question is: Do you... Is there any risk, do you think, to this fourth quarter investment at 2.25, given that the stock is down some from there?
Dennis S. Hudson II:		No.
Jefferson Harralson:		Okay. Does it change your strategy at all given the loss of a tax shield in that you are going to have—whatever model you had before—a lower trough tangible book value and a lower trough TCE ratio?
Dennis S. Hudson II:		We already took that into consideration when we looked forward at those ratios as we were considering the capital raise.
Jefferson Harralson:		All right, excellent. On the commercial, the performance commercial real estate that went into the NPAs, what’s the... is it debt service coverage, is it bad appraisals, or what’s the typical thing that is bringing performing loans into the NPAs?
Dennis S. Hudson II:		Debt service coverage...

O. Jean Strickland: Right.

Dennis S. Hudson II: ...and appraisals.

O. Jean Strickland: Right, not bad appraisals. It’s just values are going down and also companies are experiencing some deterioration in their financial performance; so as we get the current information, we’re addressing it.


Jefferson Harralson:	All right.	Being new NPAs, are these new commercial
	real estate loans mark-to-market this quarter as they
	went into NPA, or do you have to kind of wait on time or
	appraisals to down-mark these to market?
Dennis S. Hudson II:	I don’t understand the question. New?
Jefferson Harralson:	Well the... From the transition of the performing CRE loans that were criticized last quarter and now they’re in NPA...
Dennis S. Hudson II:	Right.
Jefferson Harralson:	...how hard were they marked, if any?
Dennis S. Hudson II:	Some were marked substantially, I will tell you. It just depends. I mean every one of them is unique and different and it depends on all of those circumstances. I would tell you, they were not necessarily placed in as criticized assets last quarter. They may have been criticized for a year, Jefferson, and we have just, again, continued to monitor them and made a decision to move a substantial number into the NPA category because we think that’s where they may be headed.
Jefferson Harralson:	All right. On the transition from here to... you were saying that more TDRs were going to be created?
Dennis S. Hudson II:	Yep.
Jefferson Harralson:	That would not be from these loans because they are already in NPA; that would be from new nonperforming?

O. Jean Strickland: Both.


Dennis S. Hudson II:		But mainly out of the NPAs. Again, we said these are performing loans.
Jefferson Harralson:		Yes.
Dennis S. Hudson II:		And so we placed them in nonaccrual for now and we’re going to pursue...we are in the middle of pursuing a variety of issues with some of these guys, and there may be some of those that flip out of NPAs into TDRs.
Jefferson Harralson:		Okay. And the most typical offer, I guess, you give these guys would be some extra maturity and a lower payment in exchange for some collateral; or in this case, do you think it’s just basically we are going to extend your maturity a little bit, we are going to lower your payment, and we are not going to ask for more collateral?

O. Jean Strickland: Just a general strategy—Denny mentioned that a lot of these have some cash flow to work with—it’s matching up the cash flow with payment ability. The structures are all generally designed around that.


Jefferson Harralson:	Okay, and the very last one.	Of these loans that become
	TDRs, they'll definitely be subject to the FAS 114, but
	I think they're already subject now. Do you think they
	are... Once they become TDRs and you change these terms,
	should we expect more write-downs as these NPAs are
	restructured?
Dennis S. Hudson II:	No. You’re right, they are currently subject to 114 and so at the moment they become impaired—and they are impaired now, even though they may be performing loans technically—we perform an impairment work, and we have taken some marks, and so generally speaking if they were to move into TDR, they would not need additional marks, generally speaking. Having said that, there may be other smaller loans that we will move directly into TDA...

O. Jean Strickland: TDR.

Dennis S. Hudson II: ...in TDR, and we might take some marks on those next.

O. Jean Strickland: Right. Somebody who just is asking for some payment relief and all we have to do is reduce the rates on it, those might be performing loans that move into a TDR.


Dennis S. Hudson II:		TDR, right.
Jefferson Harralson:		Right. Hey, guys, thanks for taking the questions.
Dennis S. Hudson II:		Thank you, Jefferson.
Operator:		Moving along, we have Dave Bishop from Stifel Nicolaus. Please go ahead.
Dave Bishop:		Hey, thanks, Denny. Most of my questions have been answered, but in terms of the charge-offs this quarter, I think you mentioned $13 to 15 million from the loan sales there. Of the remainder, was the bulk of that related to the commercial real estate write-downs, or maybe you can sort of break out the remainder of the charge-offs this quarter?
Dennis S. Hudson II:		Yeah, I would say the bulk of it came from CRE, which shows you the seriousness with which we have attacked this problem.
Dave Bishop:		Gotcha. And just a follow-up in terms of that portfolio. I’m just looking at some of the schedules you provide there. On the loan detail schedules, looks like on the commercial side, the retail trade on the construction land development declined about $20-22 million or so with a like adjustment on the permanent commercial real estate. Did that just go permanent?

O. Jean Strickland: Yes.

Dennis S. Hudson II: Generally speaking, yes. And our policy for moving it into permanent, Russ, is...

H. Russell Holland III: The property needs to have obviously been completed and there are tenants in place to support an amortizing loan at the level we move into the permanent status.

Dennis S. Hudson II: So in other words, they don’t move out of construction into the CRE portfolio until they are supported with proper cash flow.

H. Russell Holland III: ...From tenants in place.


Dennis S. Hudson II:		Right, with tenants in place. So we have some stress in that retail category for sure, but we are not seeing massive problems there at this point.
Dave Bishop:		Great. Thank you.
Operator:		And our next question comes from Ken Paglisi from Sandler O’Neill. Please go ahead.
Ken Paglisi:		Morning, guys.
Dennis S. Hudson II:		Ken Paglisi.
Ken Paglisi:		Yeah, close.
Dennis S. Hudson II:		Right.
Ken Paglisi:		Most of my questions have already been answered, but I just have two others. The margin improved by 9 basis points during the quarter, but I assume you had some significant interest accrual reversals given that you moved a lot of loans into nonaccrual, and I’m wondering how much those reversals might have impacted the margin.
Dennis S. Hudson II:		We actually didn’t because they were current.
Ken Paglisi:		Okay.
Dennis S. Hudson II:		...A substantial portion of the loans we moved in were current, so we didn’t have that problem.
William R. Hahl:		We had some, but it wasn’t as large as you might think, so there was some impact.
Ken Paglisi:		Okay.
Dennis S. Hudson II:		These are better loans that we are now starting to charge-off.
Ken Paglisi:		Right. The only other question I had is the reserve, how much of the current loan loss reserve are specific reserves?
Dennis S. Hudson II:		How much of the loan loss reserve are specific? We haven’t... Do we disclose that in the Q?
William R. Hahl:		No, not yet we haven’t, Ken.
Dennis S. Hudson II:		I don’t think that’s...
William R. Hahl:		That’ll be in the Q but...
Dennis S. Hudson II:		And I will tell you, it jumps around from quarter-to-quarter and this quarter...
William R. Hahl:		But generally speaking it’s...
Dennis S. Hudson II:		...it’s not been a huge number.
William R. Hahl:		Yeah, generally speaking, it’s disposal cost basically, about 10%.
Ken Paglisi:		Okay. So most of the reserve that you have there are...it’s for the whole loan portfolio rather than for specific NPAs?
Dennis S. Hudson II:		Correct. In this whole cycle—we didn’t have FAS 114 last time we went through this—the protocol is you charge down the balance to really what it’s worth the day you realize you got the problem.
Ken Paglisi:		Is that what regulators are saying, Denny? I’ve heard from a couple banks in Florida that the regulators encouraged them to just write-down loans if they’ve got specific reserves.
Dennis S. Hudson II:		Well, no, that’s not coming from regulators; that’s just coming from GAAP, and GAAP says...
William R. Hahl:		Well either way, I mean you could have a policy. You could put valuation allowances out. I mean there’s two ways of doing it.
Dennis S. Hudson II:		Well anyway.
William R. Hahl:		We chosen to do it by charge down...
Dennis S. Hudson II:		Right.
Ken Paglisi:		All right.
William R. Hahl:		...and tax deduction as well.
Ken Paglisi:		Okay, that’s all I had. I mean just to reconfirm, CapGen doesn’t have any escape hatches given that the stock’s got to move up 50% just to be even?
Dennis S. Hudson II:		Right. No, they don’t. There are no contingencies. If you go read the stock purchase agreement that we just filed, there are no contingencies and not even a material adverse addendum clause.
Ken Paglisi:		Okay, thanks guys.
Dennis S. Hudson II:		The whole objective that they had was to participate in the offering, and that’s when they made their purchase decision and that’s the price they will pay.
Ken Paglisi:		Okay, thank you.
Operator:		And our next question comes from Michael Rose from Raymond James. Please go ahead.
Michael Rose:		Hey, good morning, guys.
Dennis S. Hudson II:		Good morning.
Michael Rose:		Just going back to the FDIC-assisted transaction discussion, let’s just say there was an institution that was roughly your size. Do you think you a) would have the interest in taking something that large on; and b) if so, do you think you have enough capital at this point or would you have to raise more? And what role potentially would CapGen play in that?
Dennis S. Hudson II:		I really think we are getting way too speculative and there are some of those animals floating around out there, and I’m hesitant to really dive into this... into the pool at this point because I just don’t want to... I just think we’re getting way too speculative. We are really don’t want to talk about those kinds of things. Generally speaking, something that large would potentially require some capital–and we made clear during the offering that CapGen’s appetite is larger than their current investment, but I know there are lots of other folks that participated in the offering on the public side that have an increased appetite if it’s for a good reason. If we had some reason to do something like that, we’d be talking to a lot of people about that. But there are no present plans. There are no present deals on the table and we have no intention of taking any further dilution. I guess that’s all I’ll say about that. We just don’t have anything currently to talk about; and if we had to issue capital, it would be for a good reason. And for God’s sakes, I would hope it wouldn’t be at these price levels.
Michael Rose:		Fair enough. And just going back onto the loan sale question earlier, how do you think that’s going to play out over the next quarter or two, particularly as the pace of bank failures starts to ramp up and there’s more distressed properties and inventory hitting the market? Any color there would be helpful.
Dennis S. Hudson II:		Well now you have hit on why we have been so relentless in our focus on liquidating over the last year, year and a half. We believe that the level of assets being marketed are going to increase substantially as we close in on the final stages of this cycle, and that’s probably not a good thing. We already have evidence of assets we sold six or seven months ago that are clearly not worth what we sold them for six or seven months ago. Having said that, certain parts of the asset sales market seem to be improving. For example, the residential part is. Residential homes have improved considerably over the last six months and so we are on top of that. We understand what those markets look like. They are very volatile and they will remain volatile. And yes, we think the level of inventory is going—or available assets are going—to increase and the marks are going to get potentially bigger. Russ, you do that all day long.

H. Russell Holland III: Yeah, the only other comment I have is there is still a lot of liquidity in the loan purchase market, especially on the residential side, and the product is still not at the level that’s satisfying all of the demand, especially for fully underwritten first mortgage product like we have.


Michael Rose:		Okay. So what gives you confidence that you have taken
		the appropriate marks on the property that you are
		holding current if that’s going to play out?
Dennis S. Hudson II:		Well, we sort of talked about that a couple of times on the call. All I can say is we have done the best job we can, and the only thing we are certain of is it’s probably not right.
Michael Rose:		Fair enough. I appreciate the color, guys.
Dennis S. Hudson II:		...But we have done the best job we can, and we think it’s probably in the ballpark.
Michael Rose:		Fair enough, I appreciate the color.
Dennis S. Hudson II:		Yeah, thanks.
Operator:		And we have a question from Charles Helton from.... He’s a private investor. Please go ahead.
Charles Helton:		Hello.
Dennis S. Hudson II:		Hello.
Charles Helton:		I’ve been an investor in your stock through my stock company USEA for some time. Number one, on the sale of the private August 19th, the $29 million of shares of stock, why didn’t you put out any notice to the private investors that I could buy more shares in that offering?
Dennis S. Hudson II:		Well, I appreciate the comment. We filed... We are required to file all of that stuff publicly, and it’s in the public domain and so every private investor has the opportunity to participate. I’m sorry you didn’t know about it, but it’s probably a good thing because you ought to be buying it today.
Charles Helton:		Okay. So do you... Does your Company have a... Since I hold the stock in street name only...
Dennis S. Hudson II:		Yeah.
Charles Helton:		...in the future, how can I find out? I have to go to the computer all the time to find out anything that happens with your Company, like new stock offerings?
Dennis S. Hudson II:		Yeah, I’m afraid that’s basically right. But pick up the phone and call me if you have a question, I’d be glad to talk with you.
Charles Helton:		Okay.
Dennis S. Hudson II:		Thanks, and I really mean it. It was actually a good thing that you missed it because you can buy the shares today for less than we sold them for in the offering.
Charles Helton:		Right. Right. That’s true. That’s true.
Dennis S. Hudson II:		Yeah, okay.
Charles Helton:		My final question is... Hello.
Dennis S. Hudson II:		Yeah.
Charles Helton:		One more fast question. Is it too early to ask at what probable date you may resume paying dividends? I know it’s contingent upon the earnings, and then you have the $50 million that you obtained from the U.S. Treasury, which I believe you informed the public that you were prevented from paying any dividends...
Dennis S. Hudson II:		Right. Well you answered the question. When we return to some profitability, we’ll be able to turn some of that stuff back on. I would say the soonest we would do that would probably be late next year or something like that, but we’ll have to see. It’s not around the corner, but it’s in sight; that’s all I would say. I appreciate your questions, and I really mean it. Please feel free to give me a call any time if you have some thoughts.
Charles Helton:		Okay. Thank you very much.
Dennis S. Hudson II:		You’re welcome.
Operator:		At this time, I show no questions.
Dennis S. Hudson II:		Well thank you very much for your attendance today. We appreciate your support and we look forward to talking with you in January.
Operator:		Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may all disconnect.

Please Note: Proper names/organizations spelling not verified.

EXHIBIT 99.3
To Form 8-K dated October 29, 2009

Seacoast Banking Corporation of Florida

Third 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.

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

• Margin improvement of 9 basis points to 3.74%.

• In the third quarter, the Company completed a successful public common stock offering with total gross proceeds of $76 million.

• In addition, the Company received a firm commitment from a private equity firm to purchase 6 million shares of common stock for aggregate proceeds of $13.5 million to be closed in the fourth quarter this year.

• Deposit growth (excluding brokered certificates of deposit) in a cyclical weak third quarter.

• GAAP EPS loss of $1.21 for quarter reflects stressed economic and credit environment.

• Liquidity remains strong with low cost core funding from deposits and sweep repos.

• Cost of deposits declined 16 basis points to 1.24%; total interest bearing liabilities down 15 basis points to 1.50%.

• The impact of asset quality deterioration and weak demand on revenue was offset with better deposit mix and growth in low cost deposits.

• Focus remains on core deposit growth, risk mitigation and expense management.

• Expenses well managed; core operating expenses are declining; however credit related expenses continue to impact results.

Capital Ratios
Completed Common Stock Offering with Gross Proceeds of $76.0 million


	3Q-2009			2Q-2009			1Q-2009			4Q-2008
	Estimate			Actual			Actual			Actual
Tier 1 Capital Ratio		14.94	%		11.83	%		12.72	%		12.75	%
Total Risk Based Capital Ratio		16.22	%		13.41	%		14.00	%		14.01	%
YTD Average Equity to YTD Average Assets	9.18%			9.40%			9.45%			8.87%
Tangible Equity to Tangible Assets		8.24	%		6.75	%		7.05	%		7.12	%
Tangible Common Equity to Tangible Assets	6.14%			4.66%			5.09%			5.18%
Tangible Common Equity to Risk Weighted Assets	8.84%			6.29%			7.08%			7.08%

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

Funding & Liquidity
Stable Funding Profile and Very Strong Liquidity Position


Funding •		Deposits and sweep repo base - - Customer deposits and sweep repos of $1.791 billion ⁽¹⁾ - Customer deposits and sweep repos compose 92% of total funding ⁽²⁾
Liquidity
• •		Daily overnight borrowing position maintained at zero since year-end On balance sheet cash liquidity averaged over $100 million for past two quarters

• Combined available contingent liquidity from the Federal Reserve, FHLB, and free securities approximately $539 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.

Noninterest Expense
Controllable Expenses Well Managed


	($ in thousands)						3Q 2009			3Q 2009
	3Q–2009		2Q–2009		3Q–2008		vs 2Q 2009			vs 3Q 2008
Noninterest Expenses ⁽¹⁾	$	20,506	$	21,225	$	19,986		-3.39	%		2.60	%
Nonrecurring:
Severance		142		152		—
Legal settlement		—		150		—
Branch closures		—		32		—
Other		21		—		—
Total nonrecurring expenses	$	163	$	334		—
Adjusted Noninterest Expense	$	20,343	$	20,891	$	19,986		-2.62	%		1.79	%
FDIC Expense		1,007		2,026		544
Net loss on OREO and other asset dispositions		2,065		1,440		256
Credit Costs ⁽²⁾		964		886		835

Controllable Expenses	$	16,307	$	16,539	$	18,351		-1.40	%		-11.14	%

(1) Excludes goodwill impairment
(2) Includes credit and collections

Net Interest Margin
Margin Expanded in 3Q Driven by Deposit Mix and Pricing


(Dollars in thousands)	Q3-08			Q4-08			Q1-09			Q2-09			Q3-09
Net Interest Margin		3.57	%		3.32	%		3.44	%		3.65	%		3.74	%

• 3Q margin expansion driven primarily by improved deposit pricing and funding mix, with increased core deposits and decreased broker deposits.

• Focus on deposit and loan pricing benefited margin and offset continuing compression associated with rising NPAs and sluggish loan demand.

• Based on current assumptions, margin expected to be relatively stable for the remainder of the year with some additional expansion possible.

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


Florida	001-13660	59-2260678
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

815 Colorado Avenue, Stuart, Florida		34994
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	Seacoast Banking Corporation of Florida

November 3, 2009	By:	/s/ William R. Hahl

		Name: William R. Hahl
		Title: Executive Vice President & Chief Financial Officer


Exhibit No.		Description

99.1		Press Release dated October 29, 2009 with respect to Seacoast Banking Corporation of Florida’s financial results for the third quarter ended September 30, 2009
99.2		Transcript of Seacoast’s investor conference call held on October 30, 2009 to discuss the Registrant’s financial results for the third quarter ended September 30, 2009
99.3		Data on website containing information used in the conference call held on October 30, 2009 to discuss the Company’s financial results for the third quarter ended September 30, 2009


Date of Report (Date of Earliest Event Reported):		October 29, 2009


Registrant’s telephone number, including area code:		772-287-4000