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

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

– Net charge-offs declined to $3.5 million compared to $45.2 million in the fourth quarter

STUART, FL., April 21, 2010 – Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF), a bank holding company whose principal subsidiary is Seacoast National Bank, today reported a first quarter 2010 net loss of $1.6 million compared with a net loss of $38.1 million in the fourth quarter of 2009 and a net loss of $4.8 million a year earlier. Including preferred stock dividends and accretion of preferred stock discount of $937,000, the net loss applicable to common shareholders was $2.5 million or $0.04 per average common diluted share for the first quarter, compared to a net loss of $39.1 million or $0.73 per average common diluted share in the fourth quarter and a net loss of $5.7 million or $0.30 per average common diluted share for the first quarter of 2009.

“First quarter results reflect a second consecutive quarter of reduced levels of problem loans and a gradually improving economy,” said Dennis S. Hudson, III, Chairman and Chief Executive Officer. “In addition, delinquency trends show continued stability and credit costs have declined, with much lower net charge-offs and the absence of large additions to the allowance for loan losses. We are further encouraged by continued positive core customer deposit growth and its impact on the net interest margin.” Immediately following the end of the first quarter, the Company completed a successful private placement of convertible preferred stock with total gross proceeds of $50 million. With the added capital, the Company has strengthened its already strong capital ratios, placing it as the most well-capitalized bank of its size in the State of Florida.

Total revenues were up 3.1 percent to $23.9 million for the first quarter 2010 compared to the first quarter 2009. Excluding investment securities gains, revenues totaled $21.8 million for the quarter ended March 31, 2010, or $1.4 million lower compared to the same period a year ago.

•

Net interest margin increased to 3.48 percent, up 4 basis points from the first quarter 2009 and 11 basis points higher than last quarter;

•

Net interest income totaled $17.2 million, a decline of $231,000 over the prior quarter;

•

The provision for loan losses totaled $2.1 million, a decline of $9.6 million from a year ago and $39.4 million lower than the fourth quarter 2009;

•

The allowance for loan losses decreased slightly from 3.23 percent of total loans for the fourth quarter to 3.18 percent of total loans in the first quarter;

•

Nonperforming assets decreased approximately $7.9 million to 5.44 percent of total assets compared to the fourth quarter and declined $6.7 million lower than a year earlier;

•

Residential construction and development loan portfolio exposure was reduced to $41.1 million or 3.0 percent of total loans;

•

Total deposits, excluding brokered certificates of deposits, totaled $1.7 billion and were nearly unchanged from the normal seasonally high fourth quarter 2009;

•

Core deposits (excludes certificates of deposits > $100,000) increased 4.4 percent annualized, and noninterest bearing demand increased 14.0 percent annualized during the first quarter;

•

The cost of interest bearing liabilities totaled 1.25 percent, 13 basis points lower than the fourth quarter 2009 and 80 basis points lower than first quarter 2009;

•

Tangible common equity ratio increased to 6.9 percent proforma after the public offering of stock in April 2010 from 5.09 percent as of March 31, 2009; and

•

Total risk based capital increased to 15.3 percent or 18.8 percent proforma, reflecting the April 2010 capital offering, up from 14.0 percent as of March 31, 2009.

The tax benefit for the net loss for the first quarter totaled $556,000. 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 continue to improve and our credit losses remain moderate, we believe sometime this year that we could place increased reliance on our forecast of future taxable earnings, which would support realization of the deferred tax assets and increase the Company’s common shareholders’ equity by up to $30 million.

Construction and land development portfolios balances have been significantly reduced. These portfolios have been the primary source of increases in both nonperforming loans and loan losses over the past two years.

Total construction and land development loans have been reduced to approximately one quarter of that reported at the high point in 2007, and 36 percent of the remaining portfolio is currently classified nonaccrual and is now in the process of liquidation in accordance with specific workout plans designed to achieve substantial liquidation in an orderly fashion over the next year.

Commercial real estate mortgage loans remain well diversified (as shown in the supplemental tables attached). The Company may see further deterioration over time in this portfolio as a result of continuing economic weakness, but we expect a much lower level of loss potential than recently experienced in our construction and land development portfolios.

Problem assets declined during the quarter as forecast. This was primarily the result of reduced levels of loans in the stressed categories as discussed above and the smaller size of individual loans that are migrating to nonaccrual. The pace of growth began to moderate last quarter and continued in the first quarter 2010.

*Loans classified as nonaccrual (including restructured loans) and less than 31 days past due.

Other real estate owned (“OREO”) declined by $6.3 million to $19.1 million, reflecting a migration of a number of commercial and residential properties through the final foreclosure process, offset by sales and liquidations for the quarter. OREO is expected to increase over the next few quarters as final liquidation and resolution of many of the nonaccrual loans are concluded.

Net interest income (on a tax equivalent basis) was $17.3 million, nearly unchanged ($17.5 million) from the fourth quarter 2009. The lower deposit costs and lower rates paid on all interest bearing liabilities were offset by lower yields on investments and loans.

Noninterest income, totaled $6.7 million, down slightly linked quarter, primarily due to lower gains on security sales and fewer days in the first quarter compared to the fourth quarter. Revenue increased for debit card and other EFT transactions, attributable to increases in the number of customers served and greater transactions. However, service charges on deposits have trended lower as a result of lower overdraft fees, as customers have increased their savings and balances during the recession. In addition, wealth management fees continue to be impacted by the challenging economic conditions. Marine finance fees were up $111,000 over the fourth quarter, the result of numerous boat shows and some increased demand as is typical in the seasonally best quarter for production.

Mortgage banking revenues were unchanged this quarter compared to the fourth quarter 2009. A total of 259 applications were accepted in the first quarter 2010 for total loans of $52 million. Closed mortgage loans totaled $33 million for the quarter, down $5 million from the first quarter 2009. A total of $22 million in residential mortgage loans were sold in the first quarter of 2010, and the remainder retained.

Noninterest expenses for the first quarter totaled $23.4 million, up by $2.5 million compared to the fourth quarter 2009. The increase was primarily due to higher foreclosed and repossessed asset disposition and management activities and employee benefit costs, which are higher in the first and second quarters each year as a result of payroll taxes, and unemployment and health insurance costs. Salaries, wages and benefits for the first quarter 2010 declined $430,000 or 5.0 percent from a year ago, largely due to last year’s consolidation of branches and centralization of management by combining markets. Cost reductions were also achieved in backroom areas, with expenditures for data processing, communications, occupancy, and furniture and equipment all declining compared to the prior year. Costs associated with foreclosed and repossessed asset disposition and management activities increased by $1.8 million compared to the fourth quarter 2009 and $3.6 million compared to a year earlier. Also increasing this quarter compared to a year earlier were FDIC assessments, as well as legal and professional fees related to risk management and strategic planning, and credit and collection related activities. Management has been focused and aggressive in resolving troubled loans and are confident that early identification and action 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 first quarter 2010. The improved deposit mix and lower rates paid on deposits during the first quarter reduced the overall cost of total deposits to 1.03 percent, 12 basis points lower than in the fourth quarter 2009 and 76 basis points below last year’s first quarter.

Total deposits, excluding brokered certificates of deposits at March 31, 2010, totaled $1.7 billion and were nearly unchanged compared to year-end 2009 total deposits. The average cost of interest bearing deposits, excluding certificates of deposits, during the first quarter was 0.59 percent, down 2 basis points from the fourth quarter and 52 basis points from first quarter 2009. Certificates of deposits rates paid were also lower compared to the fourth quarter and totaled 2.06 percent during the first quarter of 2009, a decline of 14 basis points compared to the fourth quarter.

Total deposits, excluding brokered certificates at March 31, 2010, declined $7 million compared to the prior year. The decline in deposits resulted from management’s decision not to retain higher rate certificates of deposits, which declined $90 million and were partially replaced with lower cost new core deposits. As previously reported, the Company has experienced strong growth in core deposit customer relationships since implementing its new deposit growth strategy. A total of 1,900 new core households were added in the first quarter 2010, up 8.4 percent compared to the fourth quarter 2009. This compares to 1,874 in the first quarter 2009. These new relationships have improved market share and increased average services per household.

Seacoast will host a conference call on Thursday, April 22, 2010 at 10:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Investors may call in (toll-free) by dialing (888) 517-2458 (access code: 5785075; 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 April 22, 2010, by dialing (877) 213-9653 (domestic), using the passcode 5785075.

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 April 22, 2010, 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.

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, ability to realized deferred tax assets, 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, 2009 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.


	Three Months Ended
(Dollars in thousands,	March 31,
except per share data)	2010					2009
Summary of Earnings
Net loss	$	(1,564	)	$			(4,760	)
Net loss available to common shareholders		(2,501	)				(5,697	)
Net interest income (1)		17,288					18,241
Performance Ratios
Return on average assets-GAAP basis (2),(3)		(0.30	)		%		(0.83	)%
Return on average tangible assets (2),(3),(4)		(0.26	)				(0.82	)
Return on average shareholders’ equity–GAAP basis (2), (3)		(4.18	)				(8.83	)
Net interest margin (1),(2)		3.48					3.44
Per Share Data
Net loss diluted-GAAP basis	$	(0.04	)	$			(0.30	)
Net loss basic-GAAP basis		(0.04	)				(0.30	)
Cash dividends declared		—					0.01

(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.


FINANCIAL HIGHLIGHTS (cont’d)		(Unaudited)
SEACOAST BANKING	CORPORATION OF FLORIDA AND		SUBSIDIARIES
			March 31,						Increase/
(Dollars in thousands, except per share data)			2010			2009			(Decrease)
Credit Analysis
Net charge-offs year-to-date			$	3,541		$	8,540			(58.5	)	%
Net charge-offs to average loans				1.03	%		2.07	%		(50.2	)
Loan loss provision year-to-date			$	2,068		$	11,652			(82.2	)
Allowance to loans at end of period				3.18	%		1.99	%		59.8
Nonperforming loans			$	96,321		$	109,381			(11.9	)
Other real estate owned				19,076			12,684			50.4

Total nonperforming assets			$	115,397		$	122,065			(5.5	)

Restructured loans (accruing)			$	60,032		$	3,309			1,714.2
Nonperforming assets to loans and other real estate owned at
end of period				8.29	%		7.42	%		11.7
Nonperforming assets to total assets				5.44	%		5.29	%		3.0
Selected Financial Data
Total assets			$	2,119,966		$	2,308,933			(8.2	)
Securities – available for sale (at fair value)				365,986			349,181			4.8
Securities – held for investment (at amortized cost)				10,228			26,655			(61.6	)
Net loans				1,329,559			1,600,077			(16.9	)
Deposits				1,759,433			1,814,308			(3.0	)
Total shareholders’ equity				151,183			213,706			(29.3	)
Common shareholders’ equity				105,872			169,606			(37.6	)
Book value per share common				1.80			8.86			(79.7	)
Tangible book value per share				2.50			8.29			(69.8	)
Tangible common book value per share (5)				1.73			5.99			(71.1	)
Average shareholders’ equity to average assets				7.13	%		9.45	%		(24.6	)
Tangible common equity to tangible assets (5), (6)				4.82			5.09			(5.3	)
Average Balances (Year-to-Date)
Total assets			$	2,127,074		$	2,313,125			(8.0	)
Less: intangible assets				3,969			55,033			(92.8	)

Total average tangible assets			$	2,123,105		$	2,258,092			(6.0	)

Total equity			$	151,731		$	218,609			(30.6	)
Less: intangible assets				3,969			55,033			(92.8	)

Total average tangible equity			$	147,762		$	163,576			(9.7	)

(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)

(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.

Three Months Ended

March 31,

(Dollars in thousands, except per share data)

2010

2009

Interest on securities:

Taxable

3,727

3,920

Nontaxable

Interest and fees on loans

18,377

23,160

Interest on federal funds sold and other investments

239

148

Total Interest Income

22,412

27,312

Interest on deposits

1,241

2,229

Interest on time certificates

3,226

5,758

Interest on borrowed money

732

1,151

Total Interest Expense

5,199

9,138

Net Interest Income

17,213

18,174

Provision for loan losses

2,068

11,652

Net Interest Income After Provision for Loan Losses

15,145

6,522

Noninterest income:

Service charges on deposit accounts

1,372

1,585

Trust income

476

558

Mortgage banking fees

421

499

Brokerage commissions and fees

286

381

Marine finance fees

339

345

Debit card income

717

608

Other deposit based EFT fees

Merchant income

465

536

Other

391

376

4,560

4,982

Securities gains

2,100

—

Total Noninterest Income

6,660

4,982

Noninterest expenses:

Salaries and wages

6,462

6,888

Employee benefits

1,778

1,782

Outsourced data processing costs

1,876

1,891

Telephone / data lines

399

484

Occupancy expense

1,942

2,154

Furniture and equipment expense

609

651

Marketing expense

656

488

Legal and professional fees

2,101

1,392

FDIC assessments

1,006

877

Amortization of intangibles

315

315

Net loss on other real estate owned and other

asset dispositions

4,073

502

Other expense

2,152

1,911

Total Noninterest Expenses

23,369

19,335

Loss Before Income Taxes

(1,564)

(7,831)

Benefit for income taxes

(3,071)

Net Loss

(1,564)

(4,760)

Preferred stock dividends and accretion on preferred stock discount

937

937

Net Loss Available to Common

Shareholders

$(2,501)

(5,697)

Per share of common stock:

Net loss diluted

$(0.04)

(0.30)

Net loss basic

(0.04

)

(0.30)

Cash dividends declared

—

0.01

Average diluted shares outstanding

58,845,822

19,069,437

Average basic shares outstanding

58,845,822

19,069,437


	March 31,			December 31,			March 31,
(Dollars in thousands, except share amounts)	2010			2009			2009
Assets
Cash and due from banks	$	58,153		$	32,200		$	39,260
Federal funds sold		0			0			4,919
Interest bearing deposits with other banks		216,550			182,900			105,312

Total Cash and Cash Equivalents		274,703			215,100			149,491
Securities:
Available for sale (at fair value)		365,986			393,648			349,181
Held for investment (at amortized cost)		10,228			17,087			26,655

Total Securities		376,214			410,735			375,836
Loans available for sale		3,609			18,412			8,196
Loans, net of unearned income		1,373,278			1,397,503			1,632,577
Less: allowance for loan losses		(43,719	)		(45,192	)		(32,500	)

Net Loans		1,329,559			1,352,311			1,600,077
Bank premises and equipment, net		38,409			38,932			43,685
Other real estate owned		19,076			25,385			12,684
Goodwill and other intangible assets		3,806			4,121			54,879
Other assets		74,590			86,319			64,085

	$	2,119,966		$	2,151,315		$	2,308,933

Liabilities and Shareholders’ Equity
Liabilities
Deposits
Demand deposits (noninterest bearing)	$	278,205		$	268,789		$	281,809
Savings deposits		865,909			838,288			827,251
Other time deposits		304,807			326,070			335,251
Brokered time deposits		24,640			38,656			72,872
Time certificates of $100,000 or more		285,872			307,631			297,125

Total Deposits		1,759,433			1,779,434			1,814,308
Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days		95,708			105,673			152,947
Borrowed funds		50,000			50,000			65,239
Subordinated debt		53,610			53,610			53,610
Other liabilities		10,032			10,663			9,123

		1,968,783			1,999,380			2,095,227
Shareholders’ Equity
Preferred stock		45,311			44,999			44,100
Common stock		5,891			5,887			1,915
Additional paid in capital		177,842			178,096			100,005
Retained earnings (deficit)		(80,076	)		(78,200	)		64,625
Treasury stock		(437	)		(855	)		(1,824	)

		148,531			149,927			208,821
Accumulated other comprehensive gain, net		2,652			2,008			4,885

Total Shareholders’ Equity		151,183			151,935			213,706

	$	2,119,966		$	2,151,315		$	2,308,933

Common Shares Outstanding		58,913,722			58,867,229			19,149,828

Note: The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date.


	Quarters
		2009
(Dollars in thousands, except			Fourth				Third					Second
per share data)

Net loss			$(38,149)					$	(40,777	)		$	(63,000	)
Operating Ratios
Return on average assets-GAAP basis (2),(3)				(6.91	)	%			(7.55	)	%		(11.19	)%
Return on average tangible assets (2),(3),(4)				(6.89	)				(7.53	)			(2.36	)
Return on average shareholders’
equity- GAAP basis (2),(3)			(84.51)						(86.49	)			(119.80	)
Net interest margin (1),(2)				3.37					3.74				3.65
Average equity to average assets				8.18					8.73				9.34
Credit Analysis
Net charge-offs			$45,172					$	40,142			$	15,109
Net charge-offs to average loans				12.12		%			10.14		%		3.71	%
Loan loss provision			$41,514					$	45,374			$	26,227
Allowance to loans at end of period				3.23		%			3.25		%		2.75	%
Restructured Loans (accruing)			$57,433					$	16,061			$	14,789
Nonperforming loans			$97,876					$	153,981			$	126,758
Other real estate owned				25,385					26,819				23,259

Nonperforming assets			$123,261					$	180,800			$	150,017

Nonperforming assets to loans and other real estate owned at end of period				8.66		%			11.80		%		9.33	%
Nonperforming assets to total assets				5.73					8.45				6.86
Nonaccrual loans and accruing loans 90 days or more past due to loans outstanding at end of period				7.01					10.23				8.09
Per Share Common Stock
Net loss diluted-GAAP basis			$(0.73)					$	(1.21	)		$	(3.35	)
Net loss basic-GAAP basis				(0.73	)				(1.21	)			(3.35	)
Cash dividends declared				0.00					0.00				0.00
Book value per share common				1.82					2.57				8.03
Average Balances
Total assets			$2,189,699					$	2,142,228			$	2,258,792
Less: Intangible assets				4,274					4,590				54,717

Total average tangible assets			$2,185,425					$	2,137,638			$	2,204,075

Total equity			$179,093					$	187,057			$	210,997
Less: Intangible assets				4,274					4,590				54,717

Total average tangible equity			$174,819					$	182,467			$	156,280

(2)

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

(3)

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

2010

Last 12

(Dollars in thousands, except per share data)

First

Months

Net loss

(1,564)

(143,490

)

Operating Ratios

Return on average assets-GAAP basis (2),(3)

(0.30

)

(6.58

)

Return on average tangible assets (2),(3),(4)

(0.26

)

(4.29

)

Return on average shareholders’ equity- GAAP basis (2),(3)

(4.18

)

(78.71

)

Net interest margin (1),(2)

3.48

3.56

Average equity to average assets

7.13

8.36

Credit Analysis

Net charge-offs

3,541

103,964

Net charge-offs to average loans

1.03

6.84

Loan loss provision

2,068

115,183

Allowance to loans at end of period

3.18

Restructured Loans (accruing)

60,032

Nonperforming loans

96,321

Other real estate owned

19,076

Nonperforming assets

115,397

Nonperforming assets to loans and other real estate owned at

end of period

8.29

Nonperforming assets to total assets

5.44

Nonaccrual loans and accruing loans 90 days or more past due

to loans outstanding at end of period

7.03

Per Share Common Stock

Net loss diluted-GAAP basis

(0.04)

(3.54)

Net loss basic-GAAP basis

(0.04

)

(3.54

)

Cash dividends declared

0.00

0.00

Book value per share common

1.80

Average Balances

Total assets

2,127,074

Less: Intangible assets

3,969

Total average tangible assets

2,123,105

Total equity

151,731

Less: Intangible assets

3,969

Total average tangible equity

147,762

(2)

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

(3)

(4)


	March 31,			December 31,				March 31,
SECURITIES	2010			2009				2009
U.S. Treasury and U.S. Government Agencies	$	4,192	$		3,688	$			21,143
Mortgage-backed		356,693			384,864				322,787
Obligations of states and political subdivisions		2,066			2,063				2,046
Other securities		3,035			3,033				3,205

Securities Available for Sale		365,986			393,648				349,181

Mortgage-backed		5,996			12,853				21,033
Obligations of states and political subdivisions		4,232			4,234				5,622

Securities Held for Investment		10,228			17,087				26,655

Total Securities	$	376,214	$		410,735	$			375,836

	March 31,		December 31,					March 31,
LOANS		2010			2009				2009

Construction and land development	$	151,257	$	162,868				$	368,832
Real estate mortgage		1,098,274		1,109,077					1,116,616
Installment loans to individuals		61,422					64,024		71,440
Commercial and financial		62,134					61,058		75,448
Other loans		191					476		241

Total Loans	$	1,373,278	$	1,397,503				$	1,632,577


	2010								2009
	First Quarter							Fourth Quarter							First Quarter

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

Assets
Earning assets:
Securities:
Taxable	$	410,694			3.63	%		$368,830				4.19		%	$	351,286			4.46	%
Nontaxable		6,256			6.71					6,393		6.76				7,646			6.59

Total Securities		416,950			3.73					375,223		4.23				358,932			4.51
Federal funds sold and other
investments		205,575			0.47					211,685		0.45				121,633			0.49
Loans, net		1,393,808			5.36			1,478,126				5.18				1,670,353			5.63

Total Earning Assets		2,016,333			4.52			2,065,034				4.51				2,150,918			5.16
Allowance for loan losses		(44,377	)					(41,662)								(31,392	)
Cash and due from banks		30,975								34,553						33,665
Premises and equipment		39,773								41,872						44,128
Other assets		84,370								89,902						115,806

	$	2,127,074						$2,189,699							$	2,313,125

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
NOW	$	53,408			0.41	%			$	53,109		0.52		%	$	53,373			0.57	%
Savings deposits		102,777			0.24					101,005		0.24				99,712			0.56
Money market accounts		693,205			0.66					654,250		0.68				664,946			1.23
Time deposits		635,535			2.06					710,955		2.20				718,008			3.25
Federal funds purchased and other short term borrowings		103,676			0.25					92,466		0.25				154,185			0.49
Other borrowings		103,610			2.61					110,479		2.64				118,894			3.28

Total Interest-Bearing
Liabilities		1,692,211			1.25			1,722,264				1.38				1,809,118			2.05
Demand deposits (noninterest-bearing)		272,122								275,589						274,363
Other liabilities		11,010								12,753						11,035

Total Liabilities		1,975,343						2,010,606								2,094,516
Shareholders’ equity		151,731								179,093						218,609

	$	2,127,074					$	2,189,699					$			2,313,125

Interest expense as a % of earning assets					1.05	%						1.15		%					1.72	%
Net interest income as a % of earning assets					3.48							3.37							3.44

(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
Townhomes		>$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


			2009
		1st Qtr	2nd Qtr		3rd Qtr		4th Qtr

Construction and Land Development
Residential:
Condominiums	>$4 million	$8.4	$	7.9	$	5.3	$	—
	<$4 million	7.9		8.8		3.7		6.1
Townhomes	>$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		4.1
Single Family Land	& Lots	>$4 million		21.8		21.8		5.9	5.9
	<$4 million	29.6		21.5		19.5		16.6
Multifamily	>$4 million	7.8		7.8		6.6		6.6
	<$4 million	17.0		9.8		9.5		8.3

TOTAL	>$4 million	44.6		44.0		17.8		12.5
TOTAL	<$4 million	72.6		52.7		39.8		35.1
GRAND TOTAL		$117.2	$	96.7	$	57.6	$	47.6


		2010		Nonperforming
		1st Qtr		1st Qtr		Number

Construction and Land Development
Residential:
Condominiums	>$4 million	$—		$	—		—
	<$4 million	0.9			0.9		1
Townhomes	>$4 million	—			—		—
	<$4 million	—			—		—
Single Family	Residences	>$4 million	—				—	—
	<$4 million	3.9			0.6		5
Single Family Land	& Lots	>$4 million	5.9				5.9	1
	<$4 million	15.7			4.9		16
Multifamily	>$4 million	6.6			6.6		1
	<$4 million	8.1			2.9		4

TOTAL	>$4 million	12.5			12.5		2
TOTAL	<$4 million	28.6			9.3		26
GRAND TOTAL		$41.1		$	21.8		28


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

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

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

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

		71.8		67.1		65.8		56.0

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

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

		550.0		535.7		539.4		557.7

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

		84.9		76.1		75.3		72.9
Other		0.5		0.4		0.5		0.3

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


	2009								2010
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		1st Qtr

Construction and land development
Residential
Condominiums	$	16.3	$	16.8	$	9.0	$	6.1	$	0.9
Townhomes		4.2		2.3		—		—		—
Single family residences		20.5		16.7		7.1		4.1		3.9
Single family land and lots		51.4		43.3		25.4		22.6		21.6
Multifamily		24.8		17.6		16.1		14.8		14.7

		117.2		96.7		57.6		47.6		41.1
Commercial
Office buildings		17.4		13.8		13.8		13.9		13.7
Retail trade		70.0		55.9		23.0		3.9		3.9
Land		60.9		51.2		50.8		45.6		45.7
Industrial		9.0		8.5		8.2		2.5		2.5
Healthcare		5.7		6.0		4.8		4.8		—
Churches and educational facilities		—		—		—		—		—
Lodging		0.6		—		—		—		—
Convenience stores		—		—		—		—		—
Marina		31.6		30.0		28.1		6.8		6.8
Other		6.2		1.4		—		—		—

		201.4		166.8		128.7		77.5		72.6
Individuals
Lot loans		34.0		32.4		30.7		29.3		28.9
Construction		16.2		11.8		11.1		8.5		8.7

		50.2		44.2		41.8		37.8		37.6

Total construction and land development		368.8		307.7		228.1		162.9		151.3
Real estate mortgages
Residential real estate
Adjustable		333.1		328.0		325.9		289.4		290.5
Fixed rate		90.8		90.6		89.5		88.6		87.6
Home equity mortgages		85.5		83.8		83.9		86.8		89.1
Home equity lines		60.3		60.1		59.7		60.1		60.1

		569.7		562.5		559.0		524.9		527.3
Commercial real estate
Office buildings		140.6		141.6		144.2		132.3		131.1
Retail trade		109.1		120.0		151.4		164.6		163.5
Land		—		—		—		—		—
Industrial		95.3		93.0		89.3		88.4		81.7
Healthcare		28.3		30.9		25.4		24.7		29.1
Churches and educational facilities		34.8		34.6		30.8		29.6		29.1
Recreation		1.7		1.4		3.3		3.0		3.0
Multifamily		27.2		31.7		35.1		29.7		25.3
Mobile home parks		3.0		5.6		5.6		5.4		5.3
Lodging		26.3		26.3		25.6		25.5		23.5
Restaurant		6.1		5.1		5.0		4.7		4.7
Agricultural		8.2		11.8		12.0		11.7		11.4
Convenience stores		23.3		23.2		22.8		22.1		22.3
Other		43.0		47.6		34.0		42.4		41.0

		546.9		572.8		584.5		584.1		571.0

Total real estate mortgages		1,116.6		1,135.3		1,143.5		1,109.0		1,098.3
Commercial & financial		75.5		71.8		66.0		61.1		62.1
Installment loans to individuals
Automobile and trucks		19.4		18.0		16.6		15.3		14.4
Marine loans		26.3		26.9		26.8		26.4		25.3
Other		25.7		24.3		23.3		22.3		21.7

		71.4		69.2		66.7		64.0		61.4
Other		0.3		0.3		0.3		0.5		0.2

	$	1,632.6	$	1,584.3	$	1,504.6	$	1,397.5	$	1,373.3


	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	)


				2009									2010
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr

Construction and land development
Residential
Condominiums	$	(1.1	)	$	0.5		$	(7.8	)	$	(2.9	)	$	(5.2	)
Townhomes		(1.9	)		(1.9	)		(2.3	)		—			—
Single family residences		(6.3	)		(3.8	)		(9.6	)		(3.0	)		(0.2	)
Single family land and lots		(1.4	)		(8.1	)		(17.9	)		(2.8	)		(1.0	)
Multifamily		(2.0	)		(7.2	)		(1.5	)		(1.3	)		(0.1	)

		(12.7	)		(20.5	)		(39.1	)		(10.0	)		(6.5	)
Commercial
Office buildings		0.1			(3.6	)		—			0.1			(0.2	)
Retail trade		1.3			(14.1	)		(32.9	)		(19.1	)		—
Land		(12.4	)		(9.7	)		(0.4	)		(5.2	)		0.1
Industrial		(4.3	)		(0.5	)		(0.3	)		(5.7	)		—
Healthcare		5.7			0.3			(1.2	)		—			(4.8	)
Churches and educational facilities		—			—			—			—			—
Lodging		0.6			(0.6	)		—			—			—
Convenience stores		—			—			—			—			—
Marina		0.9			(1.6	)		(1.9	)		(21.3	)		—
Other		0.2			(4.8	)		(1.4	)		—			—

		(7.9	)		(34.6	)		(38.1	)		(51.2	)		(4.9	)
Individuals
Lot loans		(1.7	)		(1.6	)		(1.7	)		(1.4	)		(0.4	)
Construction		(4.1	)		(4.4	)		(0.7	)		(2.6	)		0.2

		(5.8	)		(6.0	)		(2.4	)		(4.0	)		(0.2	)

Total construction and land development		(26.4	)		(61.1	)		(79.6	)		(65.2	)		(11.6	)
Real estate mortgages
Residential real estate
Adjustable		4.1			(5.1	)		(2.1	)		(36.5	)		1.1
Fixed rate		(4.7	)		(0.2	)		(1.1	)		(0.9	)		(1.0	)
Home equity mortgages		0.7			(1.7	)		0.1			2.9			2.3
Home equity lines		1.8			(0.2	)		(0.4	)		0.4			—

		1.9			(7.2	)		(3.5	)		(34.1	)		2.4
Commercial real estate
Office buildings		(5.8	)		1.0			2.6			(11.9	)		(1.2	)
Retail trade		(2.8	)		10.9			31.4			13.2			(1.1	)
Land		—			—			—			—			—
Industrial		0.6			(2.3	)		(3.7	)		(0.9	)		(6.7	)
Healthcare		(0.9	)		2.6			(5.5	)		(0.7	)		4.4
Churches and educational facilities		(0.4	)		(0.2	)		(3.8	)		(1.2	)		(0.5	)
Recreation		—			(0.3	)		1.9			(0.3	)		—
Multifamily		—			4.5			3.4			(5.4	)		(4.4	)
Mobile home parks		—			2.6			—			(0.2	)		(0.1	)
Lodging		(0.3	)		—			(0.7	)		(0.1	)		(2.0	)
Restaurant		(0.1	)		(1.0	)		(0.1	)		(0.3	)		—
Agricultural		(0.3	)		3.6			0.2			(0.3	)		(0.3	)
Convenience stores		(0.2	)		(0.1	)		(0.4	)		(0.7	)		0.2
Other		(0.6	)		4.6			(13.6	)		8.4			(1.4	)

		(10.8	)		25.9			11.7			(0.4	)		(13.1	)

Total real estate mortgages		(8.9	)		18.7			8.2			(34.5	)		(10.7	)
Commercial & financial		(7.3	)		(3.7	)		(5.8	)		(4.9	)		1.0
Installment loans to individuals
Automobile and trucks		(1.4	)		(1.4	)		(1.4	)		(1.3	)		(0.9	)
Marine loans		0.3			0.6			(0.1	)		(0.4	)		(1.1	)
Other		(0.4	)		(1.4	)		(1.0	)		(1.0	)		(0.6	)

		(1.5	)		(2.2	)		(2.5	)		(2.7	)		(2.6	)
Other		—			—			—			0.2			(0.3	)

	$	(44.1	)	$	(48.3	)	$	(79.7	)	$	(107.1	)	$	(24.2	)

Seacoast Banking Corporation of Florida
First Quarter 2010 Earnings Conference Call
April 22, 2010
10:00 AM Eastern Time

Welcome to the First Quarter Earnings Conference Call. My name is Sandra, and I will be your operator for today’s 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.

Thank you very much, Sandra, and welcome to our First Quarter 2010 Earnings Conference Call.

Before we begin, I’ll again direct your attention to the statement that is contained at the end of our press release regarding forward statements. During the call, we will be discussing issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act and accordingly our comments are intended to be covered within the meaning of Section 27A of that Act.

With me is today is Jean Strickland, our President and Chief Credit Officer; Russ Holland, our Chief Banking Officer; and also Bill Hahl, our Chief Financial Officer.

During last quarter’s conference call, I stated that we believed charge-offs and loan provisions would be significantly lower this quarter. We also continued to say last quarter that we felt the level of non-performing loans had peaked in the third quarter of 2009. Well, we delivered, as you saw in our announcement yesterday evening.

Before I get into an update on credit, I’ll make a few comments on our overall results. We reported a loss for the quarter totaling about $1.5 million. Including our preferred stock dividends and accretion, the net loss attributable to common shareholders was $0.04 per share. This is a big improvement over the results thus far we have produced in this very difficult credit cycle. You’ll hear in a minute that we continue to carry heavy, although improved, out-of-pocket expenses in the quarter related to resolving credit issues, and we actually would have been profitable had it not been for write-downs on OREO properties.

Looking ahead, we don’t see significant reserve builds in our future, but we may have lumpy results as we continue to resolve and liquidate OREO exposures, which are expected to grow over the balance of this year. Having said that, we still believe we have turned a corner, as we have been saying since the third quarter of 2009, when we believed our non-performing loans had in fact peaked.

As with the last few quarters, we did not book any tax benefit this quarter, so our small pretax loss fell straight to the bottom line. This is consistent with our statement last quarter in that we do not intend to book any increase in our deferred tax asset until such time as we are comfortable that our credit losses are beginning to moderate and we can place stronger reliance on our forecast of future taxable earnings. Simply put, we don’t want to add to the DTA until we are comfortable it will not be challenged. But I will say, we are starting to become more comfortable and, provided we continue to progress forward in alignment with our current expectations, we may get quite comfortable later in this year.” Just to be clear, should this occur, we will recapture significant tax benefits that will fall directly to our bottom line, which will not only boost earnings in that quarter, but also tangible common equity.

Now back to our credit outlook. We continue to show improvements this quarter. Conditions remain very weak, and we continue to see a flow of smaller credits moving into nonaccrual status. Our large and impactful loan sales, which were completed at year-end 2009, have been important because the focus of our loan sales was to eliminate our largest and most problematic exposures. As a result of these loan sales that have occurred over the past two years, the exposures that have driven our losses have now in essence been eliminated.

If you take a look at our construction book, for example, you’ll see that we had very heavy losses in residential construction loans over the past two years. This category, which peaked at $352 million, has now been reduced to only $41 million, or a little under 3 percent of total loans; and all but $15 million of that balance is impaired, meaning that we have carefully evaluated each of these credits for loss content, and that evaluation has occurred over numerous quarters as we continue to bring focus on the construction book. The entire construction book, excluding loans to individual consumers, has been reduced from a high point of almost $600 million to a little over $100 million over a period of really two years or less, which means that our concentrations are now well below the targets established by regulators. All of this points us towards moderating credit costs.

We are also continuing to see signs of stability in our residential mortgage and consumer portfolios, in spite of persistently high levels of unemployment in our local markets. Residential past dues—this would be loans 30 days past due and worse, all the way through foreclosure—remain stable at around 2 percent compared with very high double digit averages for the State as a whole. We remain focused on and we are concerned with our commercial real estate exposures, but have been intensely working this portfolio very hard over the last 18 months. This portfolio is quite diverse and does not have the large loan concentrations that we had previously in the construction book. Small business remains impacted for sure by this recession, but our forward looks and our analysis suggest modest losses coming out of this portfolio, even in a worsening condition.

We have now moved our smaller and less complex workout loans out of our markets and back into our Special Assets Group to clear the way for a more aggressive calling and business development effort on the part of our market leaders. Our retail market leaders have done a terrific job this past year caring for and building our real customer franchise in the very, very difficult period that we have just come through, and we now want to bring renewed focus to our commercial customer franchise as well. To be sure, the economy is still very weak and demand, as I said last quarter, for good credit is extraordinarily limited, but the competition is almost nonexistent. This past week our last remaining local competitor, Riverside National Bank, failed and was taken over by the FDIC; and this means that if you look back over the last three years, three years ago, we had three very able, very strong, local competitors that we worked with and competed against every day. Those are all now all gone, all three of them, so we have now become the local bank of choice in our key markets.

As we see the economy continue to stabilize, we think the opportunities for us are going to be incredible, and that is what we are now focused on in 2010 and beyond.

I’m going to turn the call over to a Bill for a more comments before we open up for a few questions. Bill.

Thanks, Denny. As usual, we posted some slides on our website that I’ll be referring to in my comments this morning.

As Denny mentioned, the big highlight this quarter was the much lower loss of $0.04 per diluted share as a result of stabilizing net charge-offs, and no reserve build was needed. Total nonperforming loans declined for the second consecutive quarter as did in-flows to nonaccrual loans. The net interest margin improved to 3.46 percent from 3.37 percent in the fourth quarter. Noninterest expenses declined 2.2 percent compared to last year’s first quarter on a comparable basis after excluding some nonrecurring items and elevated credit costs.

As shown on Slide 7, strong deposit growth is emerging with ending balances for low cost/no cost deposits increasing 3.3 percent linked-quarter, and the noninterest-bearing deposit component was up 3.5 percent linked-quarter.

Slide 9 shows our net interest margin results over the last five quarters. The continued low cost/no cost deposit growth has resulted in improved funding mix, which lifted the margin by 9 basis points. The Company expects net interest margin to remain stable and may continue to improve gradually throughout the year. The main drivers for improvement will be certificate of deposit repricing, a shift in the mix of total deposits to include more low cost deposits (and we have included on Slide 8 this favorable shift in the deposit mix) and of course, as Denny mentioned, improved loan growth. Net interest income was stable linked-quarter, declining modestly as a result of fewer days in the first quarter of 2010 versus the fourth quarter of 2009. Earning assets declined 1.2 percent versus the prior quarter, driven primarily by the expected drop in the construction and land development loans as the Company continues to execute on its strategy to reduce this exposure. Like last quarter, overall fee revenue remains cyclically soft, and reduced consumer demand resulted in no increases in many fee-related sources of income, with the exception of debit card and other deposit EFT fees, where both the number of accounts and transactions has been increasing. Combined noninterest income, excluding security gains, in the first quarter declined by 8.5 percent compared to the first quarter last year. Results were nearly unchanged from the fourth quarter. Security gains totaled $2.1 million in the first quarter, as we continue to reposition the portfolio and take advantage of spread tightening that has occurred. As a result, total revenues were up 3.1 percent in the first quarter compared to the prior year. Expense management remains focused and was evident across controllable operating expenses again this quarter. However, as Denny mentioned, expenses related to other real estate owned, FDIC insurance, and credit and collection costs have remained high.

Now turning to Slide 6, it all comes down to this for expense management. Notably the economic and regulatory environment is ultimately out of our control. Expenses which are controllable have declined year-over-year. On this slide, we have adjusted out some one-time items and credit costs that will decline as the level of nonperforming assets decreases and the economy improves.

Strong service quality results continued to drive customer low-cost and no-cost deposit growth, which was up 13.4 percent annualized fourth quarter to first quarter. Most notably, core deposits grew, rising $16 million or 4.4 percent annualized and helped to drive average costs for deposits down by 12 basis points to 1.03 percent overall. The Company’s success in providing superior customer service, focusing on deepening customer loyalty, attracting new customers, and improving cross-sells continues to be reflected in strong account growth. Record customer retention and satisfaction levels have also been a catalyst for growth. The Company continues to execute its core business operations in a matter that attracts and retains customers.

In summary, it was a pretty good start to the year, but one quarter does not make a trend. Capital has been strengthened in April 2010, and liquidity positions remain strong and can be deployed as the year progresses into higher yields as prudent. We are encouraged by the improving asset quality trends and by elements within our operating performance and, as such, we are looking forward to reporting continued improvement in our financial results in 2010.

Thanks, Bill. I said this last quarter and I really think it bears repeating, that I have been doing this for a very long time and this has clearly been for all of us in the industry the worst environment any of us alive today have ever faced. But our team also knows what it took to get through something like this, and it began two years ago with an honest facing of the brutal reality that we saw ahead of us. It also required a tremendous amount of gut-wrenching work on the part of hundreds of people throughout the organization. It requires having the right talent and the right positions and an incredible spirit of teamwork and dedication. That’s what we are. That’s what we have become at Seacoast.

We completed, as Bill mentioned, a private placement of $50 million of additional equity in April. This will allow us to grow our tangible capital equity ratio on a consolidated basis to approximately 7 percent and it prepares the way for us to now get back in the market and benefit from what we think are incredible opportunities. We believe the growth opportunities out ahead of us in the next 12 months are incredibly positive for two reasons. First of all, as I said earlier, our most formidable and largest local competitor, a 30-year-old organization with a strong core deposit franchise, failed this past weekend. That provides us with the opportunity to step up and position Seacoast as the last community bank you’ll ever need in our market. Second of all, we see coming a very significant ramping up of bank failures throughout the State of Florida that’ll occur over the balance of this year. That likewise opens up tremendous opportunities for us on many, many different levels. The competition today in our markets is virtually nonexistent. This is creating, we think, an opportunity that combined with a continued stabilization in our local economy—which we think is quite possible, but we’re not quite there yet—when you put these two factors together, create what we think is the greatest opportunity we’ve ever had in our history to really gain market share and get back to the basics of banking. And that is what we are all focused as a team on doing in 2010 and 2011.

At this point, I’m going to throw the call open for any questions you have, and we thank you for your attendance.

Thank you. We will now begin the question-and-answer session. If you have a question, please press star then one on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. There will be a delay before the first question is announced. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touchtone phone.

The first question is from Christopher Marinac from FIG Partners. Please go ahead.

Christopher Marinac:
Just wanted one housekeeping question: of the OREO costs in the press release, were all of those related to write-downs, Denny, or is any of that other amount sort of tax related, et cetera?

Yeah, it would... I guess our OREO expenses would include out-of-pocket expenses as well, but I think the bulk of that number were write-downs. Is that right, Jean?

Okay great. And then from a big picture standpoint, given the changes that you are seeing around you with Riverside, et cetera, what have you done or what have you been planning on in terms of your own staff, the number of lenders you have? Is this a time to now expand the feet on the street, and how have you been thinking about that as these things have been approaching?

Well on the residential side, we have actually had a pretty significant ramping up of talent in that area. That has occurred and we began working on that, Jean, two years...

...two years ago, because we felt as we went through this really horrific period that would be an area we would likely focus on: that is conventional straightforward affordable homes to people who have jobs. That has gone extremely well. We have seen a nice ramping up of production there. On the commercial side, we are launching, over the balance of this year, a more intensive focus for small business commercial lending in our market. We do not have an expectation that that is going to drive tremendous growth in assets and loans over the period. The focus is really more on acquiring core deposits out of that opportunity. Russ, you are heading up some of that work. Any general comments?

H. Russell Holland III:
I think the staffing levels are adequately staffed on the commercial side with the team. As Denny mentioned earlier, we freed up the market leadership, as well as the market production team, to relieve them of their workout obligations and transferred those obligations to Special Assets, so now they have the capacity to support the retail initiative.

So we are not looking at much in the way of overhead adds or anything like that. I think it’s just a redeploying of existing resources as we have gotten our arms around it. The key thing, Chris, is that the identification work is well behind us in terms of where the problems are. We have been at that now for so long we don’t want to tell you; now it’s just routine work as we work through the balance of the portfolio. Having said that, in spite of all of our positive comments here, Chris, we’re very excited about the future. We still carry a very high level of problems, and we need to remain vigilant and focused on that. It remains a very high priority in the Company, and we need to work those numbers down over time, and that’ll occur over the next 18 months.

Denny, to that vein, I guess my last question just is: Should we expect to see the restructured number start to flatten out and/or fall in future quarters, or what kind of timing to expect there?

We do not see a lot of major restructure work coming. We were very proactive, and you saw those numbers go up dramatically in the second half of last year. We think most of that is behind. I think the restructured growth will really be coming out of smaller balance type things and probably offset with some reductions, right, Jean?

Yes, and if there were to be a significant increase in that number, it would come out of the nonaccrual. If by chance we got lucky with a nonaccrual and we’re able to accomplish a restructure, it would reduce significantly there and move over.

We think the credit issues are... like I said, the identification work is well behind us. We have never been as clean as we are today in terms of, for example, all of our credit reviews and internal identification work, and it’s because the inflows have really slowed and we are now much more in control of where we see things headed.

But I want to make clear, we still believe we have a very high level of problems that have to be dealt with and we are dealing with them.

Thank you. The next question is from Mac Hodgson from SunTrust. Please go ahead.

Just a couple questions, Denny. You talked about competition being nonexistent. I’m assuming you are not seeing competition out from any of the larger regional players in the area. Is it basically... What’s your sense, large banks and small banks, what are they focused on if it’s not organic growth?

They’re gone. There are no people left. I mean literally... In the markets that we are in, you have retail folks in the branch and that’s it. I mean there are no people left in the markets. They have all been consolidated out. The focus... The larger banks that have come into Florida, even those that came into Florida a couple of years ago acquiring banks that essentially failed, their entire focus is, what, Jean, reducing their Florida exposure.

And that’s what everybody’s about right now. It’s just... There just isn’t anything happening. So we think that the level of noise around the whole competitive arena is gone. If we start opening our voice up to the community and start expressing our desire to be open for business, we are going to be shocked I think at how well we do. So we are very excited about that part of it. And, again, it’s been critical for us to get firm control over the asset quality issues so that we can begin safely focusing some attention on growth initiatives. And again, we’re not ...we are going to continue to see the loan portfolio decline in spite of all of our efforts.

But we are looking to really strengthen our core relationships—and we are seeing that. Some of the numbers that Bill went over and our slides demonstrate that we have been able to change the mix of deposits in a favorable way; and we continue to see growth and actual improvement in growth in new households and new relationships. That began to turn big time for us in the last two months, particularly in St. Lucie County, for example, which is not surprising given what occurred there with the failure.

What we talked about for a long time too is our strategic work on the retail line of business and that we have been at that for two years, along with handling the credit problem.

Right. Our Board of Directors is just completing a brand new five-year strategic plan, and we are about 85 percent done with that work. It is all focused on getting back in the markets and getting all the blocking and tackling performing very well, and enhancing it, and focusing on low risk, small balance type things on the credit side with very modest growth and continued growth in deep core relationships.

Great. That’s very helpful. And then as it relates to your interest in FDIC-assisted deals, you talked about there not being any competition for organic growth. Obviously, it seems like competition is increasing for bank failures, particularly in Florida given the opportunity. How...

Well it’s a good question and it’s something that we will continue to look at and be very aggressive in pursuing. I will say that when you look at all of the private equity firms that have come into the state with extraordinarily large checkbooks, you see a surprisingly low number of firms that have been successful in participating in these bid situations. We think we possess something quite unique. We are aligned with a very well respected private equity firm today, and we have very good solid relationships with some of our largest public owners today, which we think gives us tremendous access to capital, if needed, for the right situation, and we are very excited about that. We think that not only do we have the platform for growth here that we’ve just described, but also access to capital in offensive opportunities that may be out there ahead of us. Having said that, we thought it was important this quarter to further strengthen our core capital strength. We did that, as I said earlier, pushing our ratios up to a fortress balance sheet level. Today, if you run a screen on Seacoast pro forma with the capital raise we completed in April, you will find that among the larger banks in the state, we actually possess today the strongest capital position.

Okay thanks. And just one quick last one. On the deferred tax asset, you mention in the press release potentially being able to recapture that later this year. From a GAAP perspective, would it come back all at once? Also please comment on the regulatory side as it relates to regulatory capital as well.

Well, it doesn’t have any impact on the regulatory capital because there are other limitations that come into play there. But our understanding is that: yes, it would come in. Once we can rely on our forecast of future taxable earnings, it would all come in at one time.

And we had some caveats in our statement. We said that provided the credit issues continue to moderate and provided the economy continues to stabilize, we think it’s possible that some time later this year we could see that occur, but we want to be very careful with that statement.

Thank you. The next question comes from Drew Romans from Morgan Stanley. Please go ahead.

I have a quick question please. Most of my questions were answered by the way, except for maybe a couple. But of the three banks that failed down there, who acquired the assets and wouldn’t they be competition?

Yeah, they would, and that is, longer-term, something to be real concerned about. The three banks were Fidelity Federal in Palm Beach County, a thrift; Harbor Federal in Fort Pierce/St. Lucie County, another thrift. Both of those companies were acquired by National City Corporation. And as you know, National City, in essence, almost failed and the assets were assumed by PNC. PNC has jumped ahead and is one of our largest competitors in our footprint. The other [bank failure] is Riverside National Bank, a very, very large bank in our footprint. We had more market share than they did in our footprint, but they were just a few points behind us in market share and they, as you saw last week or earlier this week, were sold in an FDIC-assisted deal to TD Bank.

...Along with two other small banks in the center part of the state, so those are the competitors. The other competitors we have would be Bank of America and Wachovia, which will soon be rebranded as Wells Fargo.

That’s basically it. Then you have Seacoast. So it’s a very consolidated market over here on the East Coast of Florida, a great market. There is tremendous growth potential as we get through this horrific period, but very, very consolidated from a banking standpoint. There are very few community banks left of any size whatsoever except for us.

Thank you. The next question comes from Jefferson Harralson from KBW. Please go ahead.

I want to ask you two questions. The first would be on commercial real estate, can you just talk about your expectation for delinquencies or NPAs, loan-to-values, restructuring efforts, or just your thoughts on that portfolio. It has performed, I think, better than the street had probably thought. Just talk about where you are with it and what you think happens over the next year or so?

Yeah, we were worried about that really about a year and a half ago or even before then. In fact, we did our deep drill into the portfolio in the second half of 2006. We all feel like that was the ice age at this point—I mean that was so long ago and so much has happened since then. We included in that deep drill-down a review of all loans of $1 million and greater in the CRE portfolio, and so at that time we ramped up our special asset reviews of all large credit beginning in the second half of 2006 and we have not relented since that day. Things got a hell of a lot worse than we ever thought was possible, but it was our early work in the CRE portfolio that really helped us immeasurably. Then about a year and a half ago, we looked much deeper at the smaller credits in the CRE portfolio— you’ll notice many of the restructured credits that grew in the third and fourth quarter of last year came out of that portfolio—and some of the larger credits with folks that had been struggling, and we proactively reached out and restructured in a way that would make it more comfortable for them to get through this period. So having said that, Jefferson, there is tremendous weakness in the CRE sector throughout the state of Florida. In my view, landlords have effectively lost all control over pricing. It’s been a real scramble over the last 12 months as they have struggled to maintain their tenant loads. But I am now hearing from some of the larger more experienced operators that there are some signs of stability; things are not getting worse; that sort of thing. So we still have a lot more to go and a lot more to be worried about certainly over the next year in that portfolio, but we think we have been very forward-looking in our approach to making certain that we are brutally identifying any kind of problem that we have and dealing with it up front. That’s what it takes to get through a period like this. It’s been no fun for all of us, and it’s been no fun for our customers, but we feel pretty good about it. Any other color, Jean, that you would like to add?

Sure. We started a couple years ago working aggressively, starting with the largest credits, to get debt service coverage covenants in where we didn’t have them, and where we saw weakness, shore things up with the borrowers well before there was a financial issue. Anticipating the continued decline in values and the downward trend in rental rates, and the concessions that we knew would start to occur, we got additional collateral and we got pay-downs. We renegotiated loans to position the bank and the borrower to get through this period a little better than we would have otherwise.

And having said that, Russ, we also did not have an insignificant amount of loan sales occurring over the last two years.

Because we looked early at the problems, we also identified a number of credits that we felt just needed to be moved out of the bank. Some of those cost us, particularly in 2009, and we did move a volume of CRE loans out of the bank as well. So it took all of that to get us in a more stable condition, and we believe we are in that stable condition today. We will have additional deterioration occur in that portfolio, and we are planning for it, but the size of that deterioration from a potential risk standpoint is far less today than it was a year ago as a result of what we just described.

Thanks. And my second question is: You guys recently had the $200 million contingency raise. Your private equity partner has filed for the flexibility to increase ownership of SBCF to over 50 percent. Those two things in combination seems as if that you guys might be about to really significantly ramp up the machine to bid on FDIC-transactions and possibly even, I don’t know, double or larger the size of the bank over the next five years. Am I reading too much into that, or is this one contingency raise a special situation? Or do you guys have plans to, I don’t know, double or triple the size of this bank over the next handful of years?

Well, we have now executed and have in place from a planning perspective a focus on potentially doubling the size of the organization over the next several years. We do not have specific plans in place that would cause us to see that happening instantaneously, but we want to prepare the way. Whether it be in the next three years or the next ten years, we want to prepare the way for a significant growth in size and so we have focused on that, number one. Number two, the $200 million contingent raise that we discussed was really very much a very special situation. We had an opportunity with an in-market transaction that would have doubled our size, or more than doubled our size, to try to compete for that situation, and that was the purpose in that raise. Thirdly, our private equity partners have applied to the Federal Reserve. As you know, the private equity partners that we are dealing with are really not private equity partners. They are actually a bank holding company, and their investment structure is quite unique. In fact, they are the only firm out there today that has structured their investment vehicle as a bank holding company. That gives us some advantages. The advantage is that we think it could be helpful in terms of some of the private equity rules that have come into being in the last year that have made it very difficult for traditional private equity investors to invest in some of these situations, so we think that’s a great advantage. Number two though, for them to increase their ownership in the bank as a private equity firm or as a bank holding company, they are required to obtain prior approval from the Federal Reserve. We have encouraged them to apply for maximum flexibility and that took them to greater than 50 percent. They do not have an intent to increase their ownership anywhere near that level; and I will tell you, we on our side do not have a belief that there will be a need for them to do that. But by getting this application approved, it would then clear the way for them to make any investment going forward without further approval from the Fed. So it’s really just a technical issue that they needed to apply for permission to acquire a majority interest in the bank. That clears a way for them to have any investment they want in the bank, and that allows them not to have to go back to the Fed for approval. So, for example... Sorry, I’ve talked too long on this but... So, for example, if we had an assisted deal come along and then we needed another X dollars of additional capital, we could work up something with those guys and get it to happen very, very quickly; whereas right now, we are still waiting on approval for their investment in this most recent capital raise. Did I explain that sufficiently?

That’s very helpful. So they have not actually received that approval yet to go to 50 percent, but you would expect it over time?

We expect in the next month or so that they will receive that approval. When they do, that will be the last approval they ever need from the Federal Reserve for any investment they would make in Seacoast.

So just four questions for you. First, on the small business focus going forward, you mentioned a lot of core deposits, but where is the loan growth going to come from once things recover?

Yeah. Well in the near-term, there is no loan growth. We are going to be hard pressed to stop the slide in loan balances. That’s a function of the economy and there just... As I’ve said before, if you are a small business or even a large business out there, you are either reducing leverage or filing bankruptcy, and neither one of those are very good loan prospects for us; so it’s a real challenging environment here in the near-term. We said earlier, though, we are ramping up and have had good success ramping up residential mortgage. That’s the only area of the portfolio that is potentially going to grow in the near-term. Longer term, as the economy recovers, the focus will be on small business, residential, and consumer growth for us going forward. We will continue to have a focus on commercial real estate growth at the appropriate time, so it’s an important business line. But in the near-term that’s likely not to happen. We currently have the door open for owner-occupied CRE growth right now, but are very cautious. Again, like I said, a lot of those guys are either on the verge of bankruptcy or reducing risk right now. We are seeing some positive signs though with folks who have seen their volume increase recently due to the failure of their competitors. Those are the guys that are doing well, but frankly many of them are not profitable though. They are cash flowing. They are doing okay, but they still have a ways to go.

Okay great. And then just two technical questions. For the DTA recapture, what do you need to see to be able to recapture it? And then second part of that, on the $50 million of preferred stock raised, does that convert into common after the annual meeting?

Yeah, it converts after the annual meeting, which we will have before the end of June. And with regard to the DTA, what was the question?

Oh, what do we need. Yeah, well if we knew that, we would tell you exactly when it’s going to happen. Really, in our discussion, it’s pretty clear that, first of all, we need to be able to determine that we’re going to have taxable income over the next 19 years. Well that sure ought to be a pretty good bet. And then the second question is: When are you going to see it? That’s kind of the bubble we’re on right now. We’re not quite there in terms of being totally confident that the earnings in the near-term are sufficient to cause us to get comfortable with that. We have not received clear cut and definitive guidance on that matter.

But we have a conceptual understanding that we are moving towards it slowly but surely. Provided we don’t run into too many bumps in the road, it’s possible that could occur sometime late this year, and we think it is significant enough to warrant talking about it because of its significance. That’s why we bring it up; but we bring it up very carefully because we’re not quite sure until we get there. I guess it’s like the Supreme Court said with the definition of: We’ll know when we see it. I guess I won’t go there.

Okay, and then last question: On Riverside, can you talk about how competitive your bid was versus the winning bid?

No, we really don’t want to get into that. All I can tell you is that I was pretty astounded at the numbers. TD bid a zero discount. They have announced that on assets, so there was no mark that they bid. And number two, they offered up a 50 percent loss-sharing, whereas the typical deal had been 20 percent loss-sharing on the part of the bank. So it was a very, very aggressive bid, and I think the FDIC did a fabulous job getting a good deal. It’s an unusual company. I mean Riverside was very, very much a core franchise and very valuable property; and if there ever was something in Florida that deserved a super competitive bid, this certainly would be it. The question is: Is that going to drive increased competitiveness going forward? I think we’ll see lumpy results there. It depends on the nature of what’s being marketed.

As a reminder, if you would like to ask a question, please press star/one on your phone. The next question is from Lucy Webster from Stifel Nicolaus. Please go ahead.

I was just wondering if you guys sold any of your nonperforming loans over the quarter; and if you did, if you could quantify how much that was?

Great. Well thank you very much for your attendance today. We look forward to our next quarterly discussion after the second quarter. Thank you.

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

This information 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, ability to realized deferred tax assets, 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.

•

In April we completed a private placement of securities totaling $50 million to further strengthen our capital structure

•

Solid capital position with estimated tangible common equity (TCE) of 6.9% including capital raised in April 2010

•

Encouraging asset quality trends continue to improve with inflows to nonaccrual loans declining from $75 million in 3Q 2009 to $12 million this quarter

•

Nonperforming loans declined from $97.9 million at December 31, 2009 to $96.3 million during the quarter

•

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

•

Cost of deposits declined 12 basis points to 1.03%; total interest bearing liabilities down 13 basis points to 1.25%

•

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 have declined year over year; however credit related expenses continue to impact results

• 6.9% pro-forma with net proceeds of capital raise, assuming conversion to common stock

Funding & Liquidity
Stable Funding Profile and Very Strong Liquidity Position

•

On balance sheet cash liquidity averaged approximately $190 million for the first quarter

•

Combined available contingent liquidity from the Federal Reserve, FHLB, and free securities approximately $556 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.


								1Q 2010 vs 4Q
								2009			1Q 2009 vs 1Q
	($in thousands)								⁽²⁾			2009

		1Q–2010		4Q–2009		1Q–2009

Noninterest Expenses	$	23,369	$	20,868	$	19,335			12.0	%		20.9	%
Nonrecurring:
Severance		5		46		242
Professional fees		771		832		—
Legal settlement		150		—		39
Branch closures		150		905		107
Other		—		—		(224	)
Total nonrecurring expenses	$	1,076	$	1,783		164
Adjusted Noninterest Expense	$	22,293	$	19,085	$	19,171			16.8	%		16.3	%
FDIC Expense		1,006		1,042		877
Net loss on OREO and other asset dispositions		4,073		1,415		502
Credit Costs ⁽¹⁾		494		818		691

Controllable Expenses	$	16,720	$	15,810	$	17,101			5.8	%		-2.2	%

(2)

First quarter expense are normally higher as a result of payroll taxes, healthcare and unemployment insurance expense

Core Deposit Growth
Emerging Strong Growth in Low Cost and No Cost Deposits


	($ in thousands)
	1Q–2010		4Q–2009		1Q–2009
Demand deposits (noninterest bearing)	$	278,205	$	268,789	$	281,809
Savings deposits		865,909		838,288		827,251
Other time certificates		304,807		326,070		335,251

Core Deposits	$	1,448,921	$	1,433,147	$	1,444,311
Brokered time certificates		24,640		38,656		72,872
Time certificates of $100,000 or more		285,872		307,631		297,125

Total Deposits	$	1,759,433	$	1,779,434	$	1,814,308
Excluding brokered time deposits	$	1,734,793	$	1,740,778	$	1,741,436
Total Demand and Savings	$	1,144,114	$	1,107,077	$	1,109,060


	($ in thousands)
	Year over Year			Growth for Quarter			Annualized
Demand deposits (noninterest bearing)		-1.28	%		3.50	%		14.01	%
Savings deposits		4.67	%		3.29	%		13.18	%
Other time certificates		-9.08	%		-6.52	%		-26.08	%
Core Deposits		0.32	%		1.10	%		4.40	%
Brokered time certificates		-66.19	%		-36.26	%		-145.03	%
Time certificates of $100,000 or more		-3.79	%		-7.07	%		-28.29	%
Total Deposits		-3.02	%		-1.12	%		-4.50	%
Excluding brokered time deposits		-0.38	%		-0.34	%		-1.38	%
Total Demand and Savings		3.16	%		3.35	%		13.38	%


		($ in thousands)
	4Q–2009			Mix			1Q–2009		Mix
Demand deposits
(noninterest bearing)	$268,789				15.11	%	$	281,809		15.53	%
Savings deposits	838,288				47.11	%		827,251		45.60	%
Core Demand and Savings	$1,107,077				62.22	%	$	1,109,060		61.13	%
Other time certificates	326,070				18.32	%		335,251		18.48	%
Brokered time certificates			38,656		2.17	%		72,872		4.02	%
Time certificates of
$100,000 or more	307,631				17.29	%		297,125		16.38	%

Total Time Deposits	$672,357				37.78	%	$	705,248		38.87	%
Total Deposits	$1,779,434						$	1,814,308

•

Focus on deposit pricing and positive mix change benefited the margin in the first quarter

•

Based on current assumptions, margin expected to be relatively stable with some expansion possible


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

April 27, 2010	By:	/s/William R. Hahl

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


Exhibit No.		Description

99.1		Press Release dated April 21, 2010 related to Seacoast’s financial results for the first quarter ended March 31, 2010
99.2		Transcript of Seacoast’s investor conference call held on April 22, 2010 to discuss Seacoast’s financial results for the first quarter ended March 31, 2010
99.3		Data on website containing information used in the conference call held on April 22, 2010 to discuss Seacoast’s financial results for the first quarter ended March 31, 2010


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

Construction and Land Development
Residential	$	21,754	$	54	$	21,808	$	4,823
Commercial		29,800		0		29,800		487
Individual		2,468		0		2,468		1,255
Residential Mortgage		8,806		3,297		12,103		14,203
Commercial Real Estate Mortgage		14,557		13,639		28,196		38,827
Commercial and Financial		61		328		389		0
Installment Loans to individuals		151		1,406		1,557		437
TOTAL	$	77,597	$	18,724	$	96,321	$	60,032


	1Q-2010			4Q-2009			3Q-2009			2Q-2009
	Estimate			Actual			Actual			Actual
Tier 1 Capital Ratio		13.83	%		13.75	%		14.94	%		11.83	%
Total Risk Based Capital Ratio		15.29	%		15.17	%		16.22	%		13.41	%
YTD Average Equity to YTD Average Assets	7.13%			8.92%			9.18%			9.40%
Tangible Equity to Tangible Assets		6.96	%		6.88	%		8.24	%		6.75	%
Tangible Common Equity to Tangible Assets	4.82%*			4.79%			6.14%			4.66%
Tangible Common Equity to Risk Weighted Assets	7.53%			7.29%			8.84%			6.29%


Date of Report (Date of Earliest Event Reported):		April 21, 2010


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


– – –		Nonperforming loans declined by 15.3% Capital levels strengthened with an April 2010 stock offering Core deposits increased by 4.4% annualized during the quarter


Construction
and Land
Development Loans				Dec. 30, 2008			Mar. 31, 2009			June 30, 2009
Dollars in millions	High Point
Residential	$	351.6	3/31/2007	$	129.9		$	117.2		$	96.7
Commercial		242.4	12/31/2007		209.3			201.4			166.8
Individuals		91.3	12/31/2006		56.0			50.2			44.2
TOTAL		627.0	9/30/2007	$	395.2		$	368.8		$	307.7

Total as a percentage of total loans					23.6	%		22.6	%		19.4	%
Total as a percentage of tier 1
risk-based capital and allowance for
loan losses					164.7	%		154.5	%		133.6	%


Construction and
Land Development
Loans				Sept. 30, 2009			Dec. 31, 2009			Mar 31, 2010
Dollars in millions	High Point
Residential	$	351.6	3/31/2007	$	57.6		$	47.6		$	41.1
Commercial		242.4	12/31/2007		128.7			77.5			72.6
Individuals		91.3	12/31/2006		41.8			37.8			37.6
TOTAL		627.0	9/30/2007	$	228.1		$	162.9		$	151.3

Total as a percentage of total loans					15.2	%		11.7	%		11.0	%
Total as a percentage of tier 1
risk-based capital and allowance for
loan losses					83.6	%		67.8	%		65.5	%


CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)		(Continued)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES


•		Deposits and sweep repo base - -Customer deposits and sweep repos were $1.839 million at March 31, 2010 ⁽¹⁾ -Customer deposits and sweep repos compose 94% of total funding ⁽²⁾
Liquidity
•		Daily overnight borrowing position maintained at zero since year-end 2008


(Dollars in thousands)	Q1-09			Q2-09			Q3-09			Q4-09			Q1-10
Net Interest Margin		3.44	%		3.65	%		3.74	%		3.37	%		3.48	%