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

– Nonperforming loans declined by 28.3% over the last twelve months, 5.6% for the quarter

– Average low cost deposits (NOW & savings) increased 16.4% annualized during the quarter

STUART, FL., July 22, 2010 – Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF), a bank holding company whose principal subsidiary is Seacoast National Bank, today reported a second quarter 2010 net loss of $13.8 million, compared to a net loss of $63.0 million for the second quarter of 2009 and a net loss of $1.6 million for the first quarter this year. Including preferred stock dividends and accretion of $937,000, the net loss applicable to common shareholders was $14.7 million or $0.25 per average common diluted share for the second quarter, compared to a net loss of $63.9 million or $3.35 per average common diluted share for the second quarter of 2009. A non-cash goodwill impairment charge of $49.8 million was recognized in the second quarter of 2009, adding $2.61 to the net loss per share.

Capital ratios improved during the quarter and over the prior year with the total risk based capital ratio increasing to 18.9 percent (estimated) at June 30, 2010, compared with 15.3 percent in the prior quarter and 13.4 percent the prior year.

Nonperforming loans fell for the third consecutive quarter to 6.99 percent of loans outstanding compared with a peak level of 10.23 percent at September 30, 2009 as new problem credit inflows continue to moderate.

Results for the quarter were impacted by loans sold totaling $23.5 million with total charge-offs of $9.3 million and continued weakness in real estate which serves as collateral for most of the Company’s nonperforming assets. The Company recorded a $16.8 million provision for credit losses in the second quarter compared to $2.1 million for the first quarter and $26.2 million for the second quarter of 2009. The allowance for loan losses as a percentage of loans held for investment was 3.10 percent at June 30, 2010, compared to 3.18 percent for the first quarter this year and 2.75 percent at June 30, 2009. The small reduction in the allowance for the quarter is consistent with lower overall risk in the loan portfolio as both the concentration and loan size have been reduced, particularly in the construction and land development portfolios.

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

“Consistent with the specific plans we have been executing to reduce credit risk, we made significant progress this quarter in further reducing our exposures to construction and development loans”, said Dennis S. Hudson, III, Chairman and Chief Executive Officer. “This effort, which started over two years ago, along with $50 million in gross proceeds from a capital raise in the second quarter, reduced our total exposure to construction and development loans and commercial real estate loans significantly below regulatory concentration thresholds. Our continued progress in reducing exposures to construction and development loans will be key to lower credit costs and earnings improvements in future quarters.”

•

Nonperforming assets continued to improve from their peak in the third quarter 2009, declining by $5.5 million compared to the first quarter 2010 and $40.1 million from a year ago. Nonperforming assets now comprise 5.25% of total assets, down from 7.02% at June 30, 2009 and 8.45% at September 30, 2009;

•

Internally criticized and classified loans, which grew significantly from 2007 until June 30, 2009 as a result of deteriorating market conditions, continued declining during this quarter; and

•

Residential construction and development exposure was reduced to $32.5 million compared with a high of $351.6 million in 2007. Total construction and development loans declined by 29.3 percent during the quarter, representing significant continued progress in reducing overall credit risk.

We have for some time been focused on building upon our strong deposit customer franchise with specific initiatives designed to further improve performance in response to significant consolidation of larger competitors and the failure of smaller banks in our markets. Growth rates for core deposit products accelerated during the quarter which significantly improved deposit mix and reduced our deposit cost below 1% for the first time in the company’s history.

•

Average cost of deposits for the second quarter totaled 0.94 percent, down 9 basis points from the first quarter of 2010;

•

Average noninterest bearing deposits for the second quarter totaled $280.0 million, up $7.9 million or 11.5 percent annualized compared to first quarter of 2010;

•

7,410 new households and 9,372 new personal checking accounts have been opened over the last twelve months;

•

Deposits, excluding time deposits, totaled 67.3 percent of total deposits at June 30, 2010, compared to 60.6 percent a year earlier; and

•

Liquidity remained strong, supported by a diverse local retail and commercial deposit base, no overnight borrowings and approximately $700 million in excess liquidity sources, including $283 million of cash available at June 30, 2010.

Construction and land development loans have been reduced 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, together with liquidations achieved through the sale of larger problem loans since 2008. Total construction and land development loans have been reduced 83 percent to $106.9 million, compared with the high point in 2007, with over $200 million of these reductions 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 to $32.5 million or down by 91 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 $40.2 million to only $10.2 million over the past six quarters, all of which is classified nonaccrual.

Commercial real estate mortgage loans remain well diversified (as shown in the attached table) with all but three categories of exposure at less than 25 percent of tier one capital and the allowance for loan losses. As of June 30, 2010 total exposure for this portfolio represents 213% of tier one capital and the allowance for loan losses. While, over time, the Company may see further deterioration in this portfolio as a result of continuing economic weakness, we expect a much lower level of loss potential than has been experienced for the construction and land development portfolios.

Problem Loan Management and Loss Mitigation Update
Nonaccrual Loans
June 30, 2010

Nonperforming loans declined by $5.4 million from March 31, 2010 to $90.9 million at June 30, 2010. Nonperforming loans also include 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. Restructured accruing loans totaled $64.9 million at June 30, 2010, up $4.8 million, all related to retail mortgage customers. A total of 28 applications were received seeking restructured mortgages, compared to 37 the first quarter and 48 in the fourth quarter of last year. Restructured loans included in nonaccruing loans totaled $30.1 million at June 30, 2010, compared with $35.5 million at March 31, 2010.

During the quarter we saw improvements in past due loans. Early stage delinquency improved in the residential mortgage loan portfolio and remained modest in other loan portfolios. Accruing residential mortgage loans (including home equity lines) 30-89 days past due declined to $5.1 million from $5.3 million, and loans 90 days past due declined to zero from $163,000 on a linked quarter basis.

Other real estate owned (“OREO”) was unchanged from March 31, 2010, but declined by $4.2 million to $19.0 million year over year, reflecting ongoing sales and liquidations. OREO is expected to increase over the next few quarters as we conclude liquidation and resolution of nonaccrual loans. During the quarter and over the past year, resources were positioned to help accelerate the marketing and liquidation of assets in this portfolio and the nonperforming loans.

Earnings (before the provision for loan losses, goodwill impairment and taxes) for the quarter totaled approximately $3.0 million, down from $4.3 million in the second quarter 2009, the result of lower net interest income of $2.7 million, lower operating expenses of $2.0 million (noninterest expenses excluding goodwill impairment taken in the second quarter of 2009) and lower noninterest income down approximately $600,000 over the second quarter of 2009. Net interest income did benefit from the improved deposit mix and deposit re-pricing during the quarter, but was offset by negative loan growth, and declining asset yields due to the current low interest rate environment.

Net interest income for the first six months of 2010 (on a tax equivalent basis) was $33.6 million, a decline of $3.7 million from a year ago as a result of lower deposit costs and lower rates paid on all interest bearing liabilities, decreased yield on investments, a decline in loan volumes, lower loan yields and over $221.9 million of average cash liquidity compared to $91.4 million during the first six months of 2009. The net interest margin for the second quarter totaled 3.27 percent, down 21 basis points compared to the first quarter 2010, and was 38 basis points lower than in second quarter 2009.

Noninterest income, excluding securities gains and losses, totaled $4.6 million, up $40,000 linked quarter, due to an increase of $80,000 in service charges on deposits, $94,000 in debit card and other EFT fees as a result of increased households and customer accounts, as well as improved revenue related to mortgage banking fees, offset by seasonal declines in fees from merchant services, marine finance and wealth management. Wealth management and marine finance fees continue to be impacted by the challenging economic conditions. Mortgage production was up compared to the first quarter of 2010 with revenues at $464,000, and totaled $885,000 for the first half of 2010, $102,000 lower than the first six months last year.

Noninterest expenses for the second quarter totaled $19.2 million, $2.0 million lower than in the second quarter 2009, excluding the effect of the goodwill impairment in 2009. Salaries, wages and benefits (excluding one-time severance payments) for the second quarter 2010 declined $349,000 or 4.2 percent from a year ago, and were $542,000 lower for the first six months compared to the same period in 2009, as a result of consolidation of branches and centralization of management by combining markets. Cost reductions were also achieved in backroom support areas, with expenditures for communications, occupancy, and furniture and equipment all declining compared to the prior year. Increasing this year were costs related to foreclosed and repossessed asset management activities, which increased by $2.5 million compared to the first six months of 2009, as well as higher legal and professional fees related to outside consulting assistance to the board of directors related to strategic planning and risk management.

The Company’s residential lending group has produced solid, quality mortgage loan growth in 2010. A total of 266 applications were accepted in the second quarter 2010 for total loans of $51 million, and 538 applications were taken in the first six months for $107 million. Closed mortgage loans totaled $33 million for the quarter, similar to the first quarter 2010. A total of $24 million in residential mortgage loans were sold in the second quarter of 2010. Over the first six months of 2010, a total of $46 million in residential mortgage loans were sold, and $20 million were added to the portfolio.

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 of certificates of deposit as these matured in the second quarter 2010. The improved deposit mix and lower rates paid on interest bearing deposits during the second quarter reduced the overall cost of total deposits to 0.94 percent, 9 basis points lower than in the first quarter 2010.

Total deposits at quarter end June 30, 2010 were lower compared to March 31, 2010, due to a planned deposit runoff of customers with single-service certificates of deposit and brokered certificates as they matured. In addition, noninterest bearing demand, NOW, MMDA and savings balances combined increased $89.3 million or 8.4 percent from a year ago. The mix of deposits improved with average time deposits declining $60.9 million, other lower cost average interest bearing NOW and savings deposits increasing $34.9 million or 16.4 percent annualized, and average demand deposits increasing $7.8 million or 11.5 percent annualized compared to the first quarter 2010. The average cost of interest bearing core deposits (NOW, savings and MMDA) during the second quarter was 0.56 percent, down 15 basis points from the second quarter of 2009. The interest rates paid on certificate of deposit rates were also lower compared to the second quarter last year and totaled 1.99 percent during the second quarter 2010, a decline of 81 basis points. The average cost of total interest bearing liabilities was 1.17 percent, down 8 basis points compared to the first quarter 2010.

Average deposits totaled $1.739 billion for the second quarter 2010, $18 million less than in the first quarter 2010 and $34 million less compared to last year’s second quarter averages, due primarily to lower average brokered certificate of deposit balances and planned reduction of single-service time deposit customers. Total average sweep repurchase agreements declined during the quarter, as a result of normal seasonal funding trends for the Company’s public deposit customers. Total deposits at June 30, 2010 declined $41 million compared to the prior year due to planned declines in brokered and single-service certificates of deposit. Brokered certificates of deposit totaled $19.8 million at June 30, 2010, down $44.5 million compared to second quarter 2009. Core interest bearing deposits totaled $877.5 million, up $97.2 million compared to the second quarter last year as a result of the successful retail core deposit strategy implemented last year. As previously reported, the Company has experienced strong growth in core deposit customer relationships since implementing the new strategy. A total of 7,410 new households, up 4.8%, have added 9,372 new personal checking accounts, an increase of 1.5% over the last twelve months. These new relationships have improved market share and increased our average services per household. In addition, the new relationships have increased their balances at account opening during the first six months by 19 percent to an average of $26,501.

Seacoast will host a conference call on Friday, July 23, 2010 at 9:30 a.m. (Eastern Time) to discuss the earnings results and business trends. Investors may call in (toll-free) by dialing (888) 517-2464 (passcode: 5785075; host: 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 July 23, 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 July 23, 2010, an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast will be available for one year.

Seacoast, with approximately $2.1 billion in assets, is one of the largest independent commercial banking organizations in Florida. Seacoast has 39 offices in South and Central Florida and is headquartered on Florida’s Treasure Coast, which is one of the wealthiest 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.


FINANCIAL HIGHLIGHTS								(Unaudited)
SEACOAST BANKING	CORPORATION	OF			FLORIDA		AND SUBSIDIARIES
		Three Months Ended											Six Months Ended
(Dollars in thousands,		June 30,											June 30,
except per share data)		2010							2009					2010 2009
Summary of Earnings
Net loss		$	(13,796	)					$	(63,000	)			$	(15,360	)	$	(67,760	)
Net loss, available to common shareholders			(14,733	)						(63,937	)				(17,234	)		(69,634	)
Net interest income (1)			16,286							18,987					33,575			37,228
Performance Ratios
Return on average assets-GAAP basis (2), (3)			(2.61	)		%				(11.19	)	%			(1.46	)		(5.98	)	%
Return on average tangible assets (2),(3),(4)			(2.58	)						(2.36	)				(1.43	)		(1.59	)
Return on average shareholders’ equity–GAAP basis (2), (3)			(30.73	)						(119.76	)				(18.66	)		(63.62	)
Net interest margin (1), (2)			3.27							3.65					3.36			3.54
Per Share Data
Net loss diluted-GAAP basis		$	(0.25	)					$	(3.35	)			$	(0.29	)	$	(3.65	)
Net loss basic-GAAP basis			(0.25	)						(3.35	)				(0.29	)		(3.65	)
Cash dividends declared			0.00							0.00					0.00			0.01


	June 30,				Increase/
	2010			2009				(Decrease)
Credit Analysis
Net charge-offs year-to-date	$	23,750			$	23,649			0.4	%
Net charge-offs to average loans		3.48	%			2.89	%		20.4
Loan loss provision year-to-date	$	18,839			$	37,879			(50.3	)
Allowance to loans at end of period		3.10	%			2.75	%		12.7
Nonperforming loans	$	90,885			$	126,758			(28.3	)
Other real estate owned		19,018				23,259			(18.2	)

Total non-performing assets	$	109,903			$	150,017			(26.7	)

Restructured loans (accruing)	$	64,876			$	14,789			338.7
Nonperforming assets to loans and other real estate owned at end of period		8.33	%			9.33	%		(10.7	)
Nonperforming assets to total assets		5.25	%			7.02	%		(25.2	)
Selected Financial Data
Total assets	$	2,092,812			$	2,136,735			(2.1	)
Securities – Available for sale (at fair value)		384,449				337,746			13.8
Securities – Held for investment (at amortized cost)		9,332				22,299			(58.2	)
Net loans		1,260,319				1,540,722			(18.2	)
Deposits		1,715,894				1,756,422			(2.3	)
Total shareholders’ equity		186,990				148,555			25.9
Common shareholders’ equity ⁽⁷⁾		141,367				104,143			35.7
Book value per share common ⁽⁷⁾		1.51				5.43			(72.2	)
Tangible book value per share ⁽⁷⁾		1.96				7.50			(73.9	)
Tangible common book value per share^{(5), (7)}		1.47				5.19			(71.7	)
Average shareholders’ equity to average assets		7.82	%			9.40	%		(16.8	)
Tangible common equity to tangible to assets ^(5),(6),(7)		6.60				4.66			41.6
Average Balances (Year-to-Date)
Total assets	$	2,123,713			$	2,285,808			(7.1	)
Less: Intangible assets		3,818				54,874			(93.0	)

Total average tangible assets	$	2,119,895			$	2,230,934			(5.0	)

Total equity	$	165,990			$	214,782			(22.7	)
Less: Intangible assets		3,818				54,874			(93.0	)

Total average tangible equity	$	162,172			$	159,908			1.4

(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

(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

(6)

The ratio of tangible common equity to tangible assets is a non-GAAP ratio used by the investment community

(7)

Reflects conversion of Series B Mandatorily Convertible Preferred Stock to Common Stock, adding 34,465,348

shares to outstanding common shares for total outstanding of 93,415,364 at June 30, 2010.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands, except per share data)	2010			2009 2010						2009
Interest on securities:
Taxable	$	3,326		$	4,299		$	7,053			$	8,219
Nontaxable		57			76			126				160
Interest and fees on loans		17,393			21,638			35,770				44,798
Interest on federal funds sold and other investments		272			109			511				257

Total Interest Income		21,048			26,122			43,460				53,434
Interest on deposits		1,237			1,422			2,478				3,651
Interest on time certificates		2,847			4,772			6,073				10,530
Interest on borrowed money		747			1,008			1,479				2,159

Total Interest Expense		4,831			7,202			10,030				16,340

Net Interest Income		16,217			18,920			33,430				37,094
Provision for loan losses		16,771			26,227			18,839				37,879

Net Interest Income (Loss) After Provision for Loan Losses		(554	)		(7,307	)		14,591				(785	)
Noninterest income:
Service charges on deposit accounts		1,452			1,562			2,824				3,147
Trust income		491			480			967				1,038
Mortgage banking fees		464			488			885				987
Brokerage commissions and fees		257			388			543				769
Marine finance fees		310			331			649				676
Debit card income		822			673			1,539				1,281
Other deposit based EFT fees		82			85			175				179
Merchant income		413			448			878				984
Other income		310			350			701				726

		4,601			4,805			9,161				9,787
Securities gains, net		1,377			1,786			3,477				1,786

Total Noninterest Income		5,978			6,591			12,638				11,573
Noninterest expenses:
Salaries and wages		6,776			6,761			13,238				13,649
Employee benefits		1,419			1,737			3,197				3,519
Outsourced data processing costs		1,852			1,806			3,728				3,697
Telephone / data lines		402			459			801				943
Occupancy		1,911			2,057			3,853				4,211
Furniture and equipment		585			678			1,194				1,329
Marketing		913			421			1,569				909
Legal and professional fees		1,602			1,603			3,703				2,995
FDIC assessments		1,039			2,026			2,045				2,903
Amortization of intangibles		246			314			561				629
Net loss on other real estate owned and
other asset dispositions		415			1,440			4,488				1,942
Goodwill impairment		0			49,813			0				49,813
Other		2,060			1,923			4,212				3,835

Total Noninterest Expenses		19,220			71,038			42,589				90,373
Loss Before Income Taxes		(13,796	)		(71,754	)		(15,360	)			(79,585	)
Benefit for income taxes		0			(8,754	)		0				(11,825	)

Net Loss		(13,796	)		(63,000	)		(15,360	)			(67,760	)

Preferred stock dividends and accretion on preferred stock discount		937			937			1,874				1,874

Net Loss Available to Common Shareholders	$	(14,733	)	$	(63,937	)	$	(17,234	)		$	(69,634	)
Per share common stock:
Net loss diluted	$	(0.25	)	$	(3.35	)	$	(0.29	)		$	(3.65	)
Net loss basic		(0.25	)		(3.35	)		(0.29	)			(3.65	)
Cash dividends declared		0.00			0.00			0.00				0.01
Average diluted shares outstanding		58,884,341			19,088,759			58,865,188				19,079,151
Average basic shares outstanding		58,884,341			19,088,759			58,865,188				19,079,151


	June 30,			December 31,				June 30,
(Dollars in thousands)	2010			2009				2009
Assets
Cash and due from banks	$	28,971			$	32,200		$	32,020
Interest bearing deposits with other banks		283,314				182,900			43,632

Total Cash and Cash Equivalents		312,285				215,100			75,652
Securities:
Available for sale (at fair value)		384,449				393,648			337,746
Held for investment (at amortized cost)		9,332				17,087			22,299

Total Securities		393,781				410,735			360,045
Loans available for sale		7,372				18,412			16,454
Loans, net of unearned income		1,300,600				1,397,503			1,584,340
Less: Allowance for loan losses		(40,281	)			(45,192	)		(43,618	)

Net Loans		1,260,319				1,352,311			1,540,722
Bank premises and equipment, net		37,668				38,932			42,879
Other real estate owned		19,018				25,385			23,259
Goodwill and other intangible assets		3,560				4,121			4,751
Other assets		58,809				86,319			72,973

	$	2,092,812			$	2,151,315		$	2,136,735

Liabilities and Shareholders’ Equity
Liabilities
Deposits
Demand deposits (noninterest bearing)	$	276,455			$	268,789		$	284,326
Savings deposits		877,544				838,288			780,386
Other time deposits		288,310				326,070			328,937
Brokered time certificates		19,788				38,656			64,244
Time certificates of $100,000 or more		253,797				307,631			298,529

Total Deposits		1,715,894				1,779,434			1,756,422
Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days		75,310				105,673			101,849
Borrowed funds		50,000				50,000			65,172
Subordinated debt		53,610				53,610			53,610
Other liabilities		11,008				10,663			11,127

		1,905,822				1,999,380			1,988,180
Shareholders’ Equity
Preferred stock — Series A		45,623				44,999			44,412
Preferred stock – Series B		47,876				0			0
Common stock		5,895				5,887			1,917
Additional paid in capital		177,552				178,096			99,804
Retained earnings		(94,184	)			(78,200	)		1,314	)
Treasury stock		(6	)			(855	)		(1,458	)

		182,756				149,927			145,989
Accumulated other comprehensive gain, net		4,234				2,008			2,566

Total Shareholders’ Equity		186,990				151,935			148,555

	$	2,092,812			$	2,151,315		$	2,136,735

Common Shares Outstanding (1)		58,950,016				58,867,229			19,170,788

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

(1)

Conversion of Series B Mandatorily Convertible Preferred Stock adds 34,465,348 shares to outstanding

common shares for total common shares outstanding of 93,415,364 at June 30, 2010.


CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
	Quarters
					2010										2009					Last 12
(Dollars in thousands, except per share data)	Second					First					Fourth				Third				Months

Net loss	$	(13,796	)			$	(1,564	)		$(38,149)					$	(40,777	)		$(94,286)
Operating Ratios
Return on average assets-GAAP basis (2),(3)		(2.61	)	%			(0.30	)	%			(6.91	)	%		(7.55	)	%	(4.40)			%
Return on average tangible assets (2),(3),(4)		(2.58	)				(0.26	)				(6.89	)			(7.53	)		(4.37)
Return on average shareholders’
equity GAAP basis (2),(3)		(30.73	)				(4.18	)		(84.51)						(86.49	)		(54.00)
Net interest margin (1),(2)		3.27					3.48					3.37				3.74					3.45
Average equity to average assets		8.49					7.13					8.18				8.73					8.14
Credit Analysis
Net charge-offs	$	20,209				$	3,541			$45,172					$	40,142			$109,064
Net charge-offs to average loans		5.95		%			1.03		%			12.12		%		10.14		%			7.51	%
Loan loss provision	$	16,771				$	2,068			$41,514					$	45,374			$105,727
Allowance to loans at end of period		3.10		%			3.18		%			3.23		%		3.25		%
Restructured Loans (accruing)	$	64,876				$	60,032			$57,433					$	16,061
Nonperforming loans	$	90,885				$	96,321			$97,876					$	153,981
Other real estate owned		19,018					19,076					25,385				26,819

Nonperforming assets	$	109,903				$	115,397			$123,261					$	180,800

Nonperforming assets to loans and other real estate owned at end of period		8.33		%			8.29		%			8.66		%		11.80		%
Nonperforming assets to total assets		5.25					5.44					5.73				8.45
Nonaccrual loans and accruing loans 90 days or more past due to loans outstanding at end of period		6.99					7.03					7.01				10.23
Per Share Common Stock
Net loss diluted-GAAP basis	$	(0.25	)			$	(0.04	)		$(0.73)					$	(1.21	)		$(1.90)
Net loss basic-GAAP basis		(0.25	)				(0.04	)				(0.73	)			(1.21	)		(1.90)
Cash dividends declared		0.00					0.00					0.00				0.00					0.00
Book value per share (5)		1.51					1.80					1.82				2.57
Average Balances
Total assets	$	2,120,388				$	2,127,074			$2,189,699					$	2,142,228
Less: Intangible assets		3,669					3,969					4,274				4,590

Total average tangible assets	$	2,116,719				$	2,123,105			$2,185,425					$	2,137,638

Total equity	$	180,093				$	151,731			$179,093					$	187,057
Less: Intangible assets		3,669					3,969					4,274				4,590

Total average tangible equity	$	176,424				$	147,762			$174,819					$	182,467

(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.

(5)

Reflects conversion of Series B Mandatorily Convertible Preferred Stock to Common Stock, adding 34,465,348

to outstanding common shares for total outstanding of 93,415,364 at June 30, 2010.


(Dollars in thousands)
	June 30,			December 31,		June 30,
SECURITIES	2010			2009		2009
U.S. Treasury and U.S. Government Agencies		$	5,312	$	3,688	$	1,103
Mortgage-backed			374,377		384,864		331,337
Obligations of states and political subdivisions			1,729		2,063		2,033
Other securities			3,031		3,033		3,273
Securities – Available for Sale			384,449		393,648		337,746
Mortgage-backed			5,364		12,853		17,570
Obligations of states and political subdivisions			3,968		4,234		4,729

Securities — Held for Investment			9,332		17,087		22,299

Total Securities		$	393,781	$	410,735	$	360,045


	2010													2009
	Second Quarter					First Quarter									Second Quarter

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

Assets
Earning assets:
Securities:
Taxable	$	388,538			3.42		%	$	410,694			3.63	%		$	356,582		4.82		%
Nontaxable		5,703			6.10				6,256			6.71				7,048		6.53

Total Securities		394,241			3.46				416,950			3.73				363,630		4.86
Federal funds sold and other
investments		267,380			0.41				205,575			0.47				92,160		0.47
Loans, net		1,361,343			5.19				1,393,808			5.36				1,631,715		5.33

Total Earning Assets		2,022,964			4.22				2,016,333			4.52				2,087,505		5.03
Allowance for loan losses		(42,415	)						(44,377	)					(31,445)
Cash and due from banks		28,559							30,975							32,545
Premises and equipment		38,182							39,773							43,380
Other assets		73,098							84,370							126,807

	$	2,120,388						$	2,127,074						$2,258,792

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
NOW	$	52,258			0.36		%	$	53,408			0.41	%		$	53,723		0.55		%
Savings deposits		105,984			0.23				102,777			0.24				103,778		0.43
Money market accounts		726,018			0.62				693,205			0.66				650,911		0.76
Time deposits		574,658			1.99				635,535			2.06				682,970		2.80
Federal funds purchased and other short term borrowings		86,836			0.28				103,676			0.25				136,786		0.33
Other borrowings		103,610			2.65				103,610			2.61				118,832		3.02

Total Interest-Bearing Liabilities		1,649,364			1.17				1,692,211			1.25				1,747,000		1.65
Demand deposits (noninterest- bearing)		279,960							272,122							281,736
Other liabilities		10,971							11,010							19,059

Total Liabilities		1,940,295							1,975,343							2,047,795
Shareholders’ equity		180,093							151,731							210,997

	$	2,120,388						$	2,127,074						$2,258,792

Interest expense as a % of earning assets					0.96		%					1.05	%					1.38		%
Net interest income as a % of earning assets					3.27							3.48						3.65

(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.



		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


		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
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		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


QUARTERLY TRENDS – LOANS AT END OF PERIOD			(Unaudited)			(continued)
(Dollars in Millions)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
				2010				Nonperforming
				1st Qtr		2nd Qtr		2nd Qtr		Number

Construction and Land Development
Residential:
Condominiums		>$4 million		$	-	$	-	$	-		-
		<$4 million			0.9		0.9		0.9		1
Town homes		>$4 million			-		-		-		-
		<$4 million			—		—		—		—
Single Family
Residences		>$4 million			-		-		-		-
		<$4 million			3.9		3.6		0.3		4
Single Family Land &
Lots		>$4 million			5.9		5.9		5.9		1
		<$4 million			15.7		9.6		1.9		13
Multifamily		>$4 million			6.6		4.3		4.3		1
		<$4 million			8.1		8.2		2.9		4

	TOTAL	>$4 million			12.5		10.2		10.2		2
	TOTAL	<$4 million			28.6		22.3		6.0		22
	GRAND TOTAL			$	41.1	$	32.5	$	16.2		24


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

Construction and land development
Residential
Condominiums	$	16.3	$	16.7	$	9.0	$	6.1
Townhomes		4.2		2.3		—		—
Single family residences		20.5		16.8		7.1		4.1
Single family land and lots		51.4		43.3		25.4		22.5
Multifamily		24.8		17.6		16.1		14.9

		117.2		96.7		57.6		47.6
Commercial
Office buildings		17.4		13.8		13.8		13.9
Retail trade		70.0		55.9		23.0		3.9
Land		60.9		51.2		50.8		45.6
Industrial		9.0		8.5		8.2		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
Other		6.2		1.4		—		—

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

		50.2		44.2		41.8		37.8

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

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

		546.9		572.8		584.5		584.1

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

		71.4		69.2		66.7		64.0
Other		0.3		0.3		0.3		0.5

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


	2010
	1st Qtr		2nd Qtr

Construction and land development
Residential
Condominiums	$	0.9	$	0.9
Townhomes		—		—
Single family residences		3.9		3.6
Single family land and lots		21.6		15.5
Multifamily		14.7		12.5

		41.1		32.5
Commercial
Office buildings		13.7		—
Retail trade		3.9		—
Land		45.7		38.5
Industrial		2.5		0.3
Healthcare		—		—
Churches and educational facilities		—		—
Lodging		—		—
Convenience stores		—		—
Marina		6.8		—
Other		—		—

		72.6		38.8
Individuals
Lot loans		28.9		27.4
Construction		8.7		8.2

		37.6		35.6

Total construction and land development		151.3		106.9
Real estate mortgages
Residential real estate
Adjustable		290.5		295.9
Fixed rate		87.6		86.0
Home equity mortgages		89.1		79.0
Home equity lines		60.1		58.8

		527.3		519.7
Commercial real estate
Office buildings		131.1		128.2
Retail trade		163.5		155.9
Land		—		—
Industrial		81.7		84.0
Healthcare		29.1		29.4
Churches and educational facilities		29.1		28.5
Recreation		3.0		3.0
Multifamily		25.3		23.6
Mobile home parks		5.3		2.6
Lodging		23.5		23.4
Restaurant		4.7		4.6
Agricultural		11.4		10.8
Convenience stores		22.3		21.0
Other		41.0		47.8

		571.0		562.8

Total real estate mortgages		1,098.3		1,082.5
Commercial & financial		62.1		49.9
Installment loans to individuals
Automobile and trucks		14.4		12.9
Marine loans		25.3		27.3
Other		21.7		20.8

		61.4		61.0
Other		0.2		0.3

	$	1,373.3	$	1,300.6


	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			2nd Qtr

Construction and land development
Residential
Condominiums	$	(1.1	)	$	0.4		$	(7.8	)	$	(2.9	)	$	(5.2	)	$	—
Townhomes		(1.9	)		(1.9	)		(2.3	)		—			—			—
Single family residences		(6.3	)		(3.7	)		(9.6	)		(3.0	)		(0.2	)		(0.3	)
Single family land and lots		(1.4	)		(8.1	)		(17.9	)		(2.9	)		(1.0	)		(6.1	)
Multifamily		(2.0	)		(7.2	)		(1.5	)		(1.2	)		(0.1	)		(2.2	)

		(12.7	)		(20.5	)		(39.1	)		(10.0	)		(6.5	)		(8.6	)
Commercial
Office buildings		0.1			(3.6	)		—			0.1			(0.2	)		(13.7	)
Retail trade		1.3			(14.1	)		(32.9	)		(19.1	)		—			(3.9	)
Land		(12.4	)		(9.7	)		(0.4	)		(5.2	)		0.1			(7.2	)
Industrial		(4.3	)		(0.5	)		(0.3	)		(5.7	)		—			(2.2	)
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	)		—			(6.8	)
Other		0.2			(4.8	)		(1.4	)		—			—			—

		(7.9	)		(34.6	)		(38.1	)		(51.2	)		(4.9	)		(33.8	)
Individuals
Lot loans		(1.7	)		(1.6	)		(1.7	)		(1.4	)		(0.4	)		(1.5	)
Construction		(4.1	)		(4.4	)		(0.7	)		(2.6	)		0.2			(0.5	)

		(5.8	)		(6.0	)		(2.4	)		(4.0	)		(0.2	)		(2.0	)

Total construction and land development		(26.4	)		(61.1	)		(79.6	)		(65.2	)		(11.6	)		(44.4	)
Real estate mortgages
Residential real estate
Adjustable		4.1			(5.1	)		(2.1	)		(36.5	)		1.1			5.4
Fixed rate		(4.7	)		(0.2	)		(1.1	)		(0.9	)		(1.0	)		(1.6	)
Home equity mortgages		0.7			(1.7	)		0.1			2.9			2.3			(10.1	)
Home equity lines		1.8			(0.2	)		(0.4	)		0.4			—			(1.3	)

		1.9			(7.2	)		(3.5	)		(34.1	)		2.4			(7.6	)
Commercial real estate
Office buildings		(5.8	)		1.0			2.6			(11.9	)		(1.2	)		(2.9	)
Retail trade		(2.8	)		10.9			31.4			13.2			(1.1	)		(7.6	)
Land		—			—			—			—			—			—
Industrial		0.6			(2.3	)		(3.7	)		(0.9	)		(6.7	)		2.3
Healthcare		(0.9	)		2.6			(5.5	)		(0.7	)		4.4			0.3
Churches and educational facilities		(0.4	)		(0.2	)		(3.8	)		(1.2	)		(0.5	)		(0.6	)
Recreation		—			(0.3	)		1.9			(0.3	)		—			—
Multifamily		—			4.5			3.4			(5.4	)		(4.4	)		(1.7	)
Mobile home parks		—			2.6			—			(0.2	)		(0.1	)		(2.7	)
Lodging		(0.3	)		—			(0.7	)		(0.1	)		(2.0	)		(0.1	)
Restaurant		(0.1	)		(1.0	)		(0.1	)		(0.3	)		—			(0.1	)
Agricultural		(0.3	)		3.6			0.2			(0.3	)		(0.3	)		(0.6	)
Convenience stores		(0.2	)		(0.1	)		(0.4	)		(0.7	)		0.2			(1.3	)
Other		(0.6	)		4.6			(13.6	)		8.4			(1.4	)		6.8

		(10.8	)		25.9			11.7			(0.4	)		(13.1	)		(8.2	)

Total real estate mortgages		(8.9	)		18.7			8.2			(34.5	)		(10.7	)		(15.8	)
Commercial & financial		(7.3	)		(3.7	)		(5.8	)		(4.9	)		1.0			(12.2	)
Installment loans to individuals
Automobile and trucks		(1.4	)		(1.4	)		(1.4	)		(1.3	)		(0.9	)		(1.5	)
Marine loans		0.3			0.6			(0.1	)		(0.4	)		(1.1	)		2.0
Other		(0.4	)		(1.4	)		(1.0	)		(1.0	)		(0.6	)		(0.9	)

		(1.5	)		(2.2	)		(2.5	)		(2.7	)		(2.6	)		(0.4	)
Other		—			—			—			0.2			(0.3	)		0.1

	$	(44.1	)	$	(48.3	)	$	(79.7	)	$	(107.1	)	$	(24.2	)	$	(72.7	)

Seacoast Banking Corporation of Florida
Second Quarter 2010 Earnings Conference Call
July 23, 2010
9:30 AM Eastern Time

Welcome to the Second Quarter Earnings Conference Call. My name is John, and I’ll 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.

Thank you very much, and welcome to our Seacoast’s Second Quarter 2010 Earnings Conference Call.

As always, before we begin, we’d like to 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 forward-looking statements within the meaning of the Securities and Exchange Act and accordingly our comments are intended to be covered by the meaning of Act.

With me is today is Jean Strickland, our Chief Credit Officer; Russ Holland, our Chief Lending Officer; and Bill Hahl, our CFO.

This quarter we posted a loss of $13.8 million, or $0.25 per share. Much improved, of course, over the $63 million loss the prior year, but greater than the $1.6 million, or $0.04 per share, loss produced in the first quarter of this year. I mentioned last quarter that our progress would likely be lumpy, and it was this quarter as our loss increased somewhat.

However, our progress continued as we continue to muscle down the level of our nonperforming loans. Earnings were impacted by the sale of $24.5 million in nonperforming, or soon to be nonperforming credits, which contributed $9.3 million of our $16.7 million provision for the quarter. The balance of the provision was driven by valuation adjustments on the existing problem portfolio. Overall, nonperforming loans declined by 5.6 percent during the quarter. Nonperforming loans now total approximately $90 million. This is down 41 percent from a high point in the third quarter of 2009 of $154 million and almost back down to the level of $88 million we posted at year-end 2008 when we were approved for our TARP investment.

Nonperforming assets were also reduced by approximately 5 percent during the quarter and were $109 million, down from $115 million in the prior quarter. We believe we have stabilized asset quality by continued work to reduce concentrations, particularly in construction and land loans. This exposure, as well as our CRE exposure, is now well below the regulatory concentration threshold. Construction exposure is now at approximately 40 percent of Tier 1 capital and the allowance, and overall CRE exposure is now approximately 225 percent, again well below the 100 and 300 percent thresholds established in regulatory guidance.

By focusing our liquidation efforts on our larger loan exposures and larger concentrations last year, we are now seeing a slower pace of problem loan inflows, and the inflow is comprised generally of smaller loans than we saw last year. We still believe our problem loan exposure peaked in the third quarter of last year, and we expect this exposure will continue to fall in the coming quarters. This belief is supported with a continued decline in the level of internally sited and classified assets in the portfolio.

To summarize, I think we feel we are making good progress in bringing down the level of problem loans. We expect to see moderation of new problems as we focus greater effort to reduce overall problem loan balances.

Now Bill’s going to speak to the quarter in a little more detail, and then I’m going to come back with a few additional remarks.

Like always, we have posted some slides on the website for this call, and I’ll be referring to those occasionally. There were certain items in the quarter which I’ll briefly highlight, and then I’ll have further additional comments later.

Most notable, the positive for the quarter was the continued improvement in credit trends and reduced concentrations from the prior quarter that Denny discussed. Core deposit growth and a positive mix shift continued, but were not significant enough to offset the negative impact from the decline in asset yields and asset mix shift, which caused the net interest margin to decline. The continued improved deposit metrics reflects favorably on the tremendous effort being put forth by our team to improve client retention and acquisition capabilities for core personal deposits. As a result, we have increased customer satisfaction, and it showed up again in our deposit numbers in the second quarter.

Finally, we completed a capital raise during the quarter, and the Company’s capital ratios are stronger than at any time in the Company’s history.

Overall fee revenue remains cyclically soft, and reduced consumer spending resulted in a decline in many of the fee-related sources of income throughout the first half and the second quarter. This has impacted noninterest income, excluding security gains, which declined by 4.2 percent compared to the second quarter last year. Results were marginally better compared to the first quarter with increases in service charges on deposit accounts and debit card income, the results of improved client retention and acquisition of core personal deposits that I referred to earlier. Together, these revenues were up $185,000 or 8.9 percent linked-quarter, further demonstrating how we are benefiting from our retail core deposit strategy by increasing customer households and deepening their relationships by cross-selling other products.

Moving on to noninterest expense slide on page 6, like we have done in past calls, I have prepared a summary of our noninterest expense results and identified items which occurred in the quarters that were either non-reoccurring or credit-related. While we are trying to control all costs during this extraordinary period, credit-related costs are not as controllable as we would like them to be. This slide shows that we have been reducing overhead more than is visible in the normal income statement perspective. Expenses have been well managed and core operating expenses have been stable, but credit-related expenses continue to impact results. However, on a year-over-year basis, these costs have declined by approximately 30 percent. Adjusting for those items, the second quarter overhead was pretty much stable with the first quarter and the fourth quarter 2009. We expect that we will identify some additional expense savings measures, and we will have more to report on those planned reductions over the remainder of the year in our third quarter call.

Turning to Slide 4, I have a few comments on our capital position. Slide 4 illustrates that our capital position over the past 12 months with risk-based measures was well above regulatory minimums. During 2009, we completed a successful common stock offering with gross proceeds of approximately $89 million in the third quarter, and we completed another one in the second quarter this year of $50 million of gross proceeds. We maintain a solid capital level with an estimated Tier 1 ratio of 17.6 percent and a total risk-based capital ratio of approximately 19 percent at quarter-end. Tangible common equity to tangible assets is at 6.6 percent. On a pro-forma basis, assuming the recapture of the deferred tax valuation allowance in future quarters, the ratio improves to approximately 8.4 percent. We believe this recapture will occur when we are able to place greater reliance on our forecast of future taxable earnings. The level of loan loss provisioning has declined significantly from the prior year’s level, and it was at $19 million for the first six months of 2010 compared to approximately $38 million for the same period in 2009 and well below the $87 million that we provided in the last half of 2009. This decline is the result of reduced problem loans and much lower net charge-offs. This is one of the final pieces of evidence needed to rely on our forecast of future taxable earnings to support the realization of the Company’s deferred tax assets.

We have, on Slide 7, posted some information on the growth of deposits. The pace of the growth of deposits, excluding time certificates, increased nicely during the second quarter with total average demand and savings deposits for the quarter increasing on an annualized basis by 15.2 percent.

In addition, we continue to manage our CD pricing carefully due to our strong liquidity position, as shown on Slide 5. This has resulted in a decline in both brokered and single-service time certificates and improved our deposit mix as shown on Slide 8. Total demand and savings balances now represent 67 percent of total deposits, up from 61 percent a year earlier. Overall cost of deposits declined 46 basis points to 0.94 percent compared to the prior year. Our funding strategy remains centered on stable retail and commercial relationship deposits. At quarter-end, deposits and customer repos comprised 94 percent of total funding. Brokered time deposits declined by $44 million during the last 12 months and were offset by increases of $89 million in demand and savings deposits. Our combined available contingent liquidity from all funding sources, pledge-free securities, and cash-on-hand at quarter-end exceeds $700 million.

Now I’ll take a minute to cover the margin on Slide 9. We have discussed our view of the margin-related risk and opportunities for this year during last quarter’s conference call. The margin decline this quarter is primarily due to lower loan balances and repositioning of the investment portfolio over the past six quarters, and an increased level of interest bearing cash, which is accumulated over the past six months and now totals $283 million. We have sold a portion of the investment portfolio with higher yields and higher effective durations that may have increased in a rising interest rate environment to monetize the gains. We believe this is the proper strategy. We have been careful not to add effective duration and to look for solid investments that will increase in yield when the curve flattens as forecasted. Adding to the investment portfolio over the remainder of the year and reducing excess cash liquidity will support margin and net interest income improvements.

In summary, capital liquidity positions are strong and have been improved during the year. We are encouraged by our emerging asset quality trends and the related reduced provisioning compared to the prior year. We look forward to continued improved financial results during the last half of the year.

Thank you, Bill. I want to conclude with a few more comments concerning our focused effort around strategic growth initiatives. I mentioned last quarter that we had transferred all remaining workout loans, including softer and smaller workouts, into our special assets group. This was done for two reasons. First, it completed the job of centralizing all workout and liquidation activities with our best workout talent. But equally important, it helped bring greater focus in the field around our customer acquisition and growth plan. This was particularly important for our retail and business banking folks and our market leaders as we have seen considerable disruption with the largest competitors in our footprint.

Our markets folks produced some incredible results this quarter. They undertook specific initiatives focused on gaining market share and bringing down deposit costs by changing our deposit mix. Achieving improved deposit mix allows us to grow the customer franchise while not growing the overall balance sheet so that we can continue to preserve capital. I think the results have been spectacular. Average low cost NOW, savings and money market balances grew by 16 percent annualized on a linked-quarter basis, and average noninterest bearing DDA balances grew by 11 percent. This improved deposit mix, as Bill pointed out, and helped drive down our deposit cost to below 1 percent this quarter. These results are accompanied with improved trends and new household acquisitions, improvements in average balances, and improvements in the number of products per household. While some of the deposit growth for the quarter was seasonal, the numbers far exceeded our expectation; and the supporting data, including household growth, suggests we are winning the battle for customer disruption.

Our priorities one year ago were, first, to provide capital strength needed to meet the challenge of this economic crisis. Second, a year ago our goal was to aggressively reduce credit risk in our portfolio; and, third and finally, a year ago our goal was to maintain sufficient liquidity throughout our core deposit franchise. I think we met these goals. Today, our priorities are principally two-fold. First, we must continue to bring down our problem credit exposures and finish the job to reduce credit risk to a more acceptable level as quickly as possible. And second and equally important, we will grow our most valuable asset, our core customer franchise, in response to significant opportunities developing in our markets as we gradually return to profitability.

Thank you. We will now begin the question-and-answer question. If you have a question, please press then one 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’re 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. Standing by for questions.

And our first question comes from Matt Olney from Stephens Inc. Please go ahead.

Hey, can you give us an idea of the NPL inflow that we’ve been seeing the last few quarters and what it is this quarter? And I understand you’ve done a good job of selling off and charging off some of the inflow as it comes in. I’m looking for a more of a gross NPL inflow number.

Yeah, it’s not something we’ve actually published, Matt, and thanks for the question. I guess just to give you some color, when we look back in just about every quarter last year in 2009, we saw tremendous inflow coming into the portfolio. It would have been very significant numbers, particularly in the second half or in the mid part of the year last year, as we saw the NPAs grow pretty dramatically. The inflow in the first and second quarter of this year was dramatically less than last year with a little less inflow in Q1 and a little more in Q2. But the gross numbers in the first half of the year were probably less than half of what we had seen in comparable periods last year. We did see a little bit of pickup inflow from Q1 to Q2. The delta may have been $15 million or so.

And what about the mix shift within the inflow, anything different in Q2 versus Q1?

Well the inflows in late ‘08 and most of ‘09 were obviously concentrated on a lot of our construction portfolio, a lot of land, that sort of thing. And the more recent inflows, which we have been talking about for a year, have been more on the CRE side. Would you agree?

And I guess I’d point out that also we have talked for several quarters now about a tactic of using troubled debt restructures to deal with some of the credit stress in the CRE portfolio. And though we didn’t have much of an increase, in fact we had a decline in TDRs this quarter coming out of the CRE portfolio, in the context of the last 12 months, most of the TDR growth has come out of the CRE portfolio. So our thoughts are to be very proactive where appropriate, where we have cash flow, to work with borrowers in the TDR area. That’s been helpful; although we actually had a small decline this quarter out of the CRE portfolio, we had a little increase from the consumer portfolio this quarter. Thank you.

Our next question comes from Christopher Marinac from FIG Partners. Please go ahead.

I wanted to ask about overall valuations on new appraisals and write-downs on the loan portfolio. If you want to talk about CRE or the whole portfolio, how ever you want to break it down. I’m just curious what you think run rate valuations are and how different they may be, if it all, from the last 90 days.

Dennis S. Hudson II: Well, let me—some others can weigh in here—but let me just give you a backdrop. Here in our markets, interestingly on the residential real estate side, there was just some material that came out last night that suggested we had, in spite of what you are seeing nationwide, we had an actual pick-up over a year ago in the sale of residential homes in our markets. It was up, I think, 12 percent from a year ago. It is the 22nd consecutive month of increasing sales in our markets on the residential front. The average price of a home sold or the median home price climbed, I think, for the sixth or seventh month in a row, or may have been a little longer than that. So we are seeing clear signs of stabilization both in values and in volume on the residential side. I think that is a good sign for the next 12 months or so in terms of valuations. Just to give you color, the issue for the state I think right now is valuation declines being felt in the CRE area, and that’s primarily driven by negative changes in NOI in those properties; and it is very property specific. So it’s hard to give you any benchmark or anything on valuation other than we remain in a stressed environment.

Yeah, you’re absolutely right. It depends on the asset, and the cap rate varies by asset. Public shopping centers, anchored centers, are still trading at 7% cap rate; and then you have anchored strip centers that are much higher than that. So it really depends on the property.

And then, Bill, so is there a conclusion on the DTA? Is it possible that you can recapture something soon? I just wanted to clarify what you were saying in your earlier remarks.

It’s sort of like the beatings will continue until morale improves. We will just have to continue to work our way through it. I don’t think we have a lot to say on that.

Yeah, I think Denny is correct. I do think that one of the key elements that has been troubling in terms of relying on a forecast of future taxable earnings would be the provisioning, and that is coming down. As we talked about, it was a little lumpy this quarter, but trend-wise I think it is down substantially. So you can began to make a case that at some point we are going to turn profitable in a quarter in the future here, and when that happens, I think we’ll be able to get that recaptured.

And, Chris, we have been saying for a year that the soonest we would be profitable would be the last quarter of this year and possibly the first quarter of next year. We are still standing by that. The challenge would be further portfolio deterioration. We have had ...we are in the middle right now of another review of future possible deterioration. I would say just on a whole, we are sort of encouraged by what we are seeing, and we are still feeling good about those statements in terms of the return to profitability. I guess we could be off a quarter or so, but we are beginning to see the light at the end of the tunnel, although there is still a lot of risk out there. So we feel a lot better today than we did a year ago. It is dramatically different what we are facing in terms of potential new problems, that sort of thing.

Our next question comes from Marc Heilweil from Spectrum Advisory. Please go ahead.

Hi. Thanks. I guess I’d like a little clarification on your capital status, vis-à-vis, what the regulators think about that. That would be the first part. Are they satisfied? Is there any possibility that you would be able to deal with the overhang of the preferred dividends from TARP before you return to profitability?

I think it is going to happen kind of at the same time. We are... I guess all I can tell you is we are engaged in conversations about that subject. How do our regulators feel about our capital position? They are very pleased generally with our response to the stress in terms of our capital raises. When you look at a Tier 1 capital ratio of almost 18 percent, that’s a pretty darn strong ratio for us. So we are far in excess of the capital minimums that they think we should keep, and we are projecting that we will maintain that position.

So I guess the question is: if you’re far in excess of what they think you should keep, then is it your decision to hold on to the TARP money, including clearing up the arrears?

Yeah, and let me just say when we are completely convinced that, and we are very close to this point of being convinced, that we have credit stability and improvement, I think those conversations become more significant with them and we’ll see. But the first step is to come out of deferral, and we plan to do that as quickly as possible. I would say in terms of repaying TARP, that’s going to be down the road as we are very solidly profitable.

But we are... Again, all I can say is we are seeing light at the end of the tunnel, beginning to see some improvements, but we are still concerned about the overall risk in the marketplace and in the economy. We are not quite there, but we are very close.

And also on capital position, has CapGen indicated that they are considering the sale of the shares that were registered this week before the year-end? Have they given you any indication of their intention on that regard?

Yeah, well, I’m glad you brought that up. There’s been a little confusion in the market over our registration statements that went effective last night. We filed registration statements to register previously unregistered shares that were sold to a variety of investors in the most recent $50 million raise, including shares that were sold to CapGen in April. They took down a significant portion of that $50 million. They have not sold, nor do they have any intent to sell, any of their investment, and they have confirmed that to us. We included a quote from one of the partners, Bob Goldstein, who sits on our Board, indicating yesterday that he is very pleased with their investment and that they take a long-term view, and so forth. There was confusion in the market, however, for those that were reading those registration statements because they were technically registered on behalf of selling shareholders. But they have no intent of selling their shares. It was simply us registering the shares, which we committed to do when the unregistered shares were sold to the new investors and CapGen. I hope that clears that up.

Okay, that’s why I asked question. Thanks a lot for the clarification. Bye-bye.

Our next question comes from Ken Puglisi from Sandler O’Neill. Please go ahead.

Denny, I guess there was $23.5 million worth of loan sales during the quarter. You indicated that those were NPA and soon to be NPAs.

I wondered if you could tell us how much of that were not on nonperforming at the time of the sale.

Well they were, but in the context of the prior quarter, probably half of them were not on nonaccrual.

Okay. I guess you took $9.3 million of losses on those credits. That’s almost a 40 percent write-off, a pretty hefty severity rate. I wonder if you can just comment on why it was so high, because I assume that some of those credits were already written down.

Actually it was fairly high, but half of them were not written down at all. I believe it was a fairly decent anomaly that occurred in the quarter with some performing credits that we turned very negative on for very well defined reasons that happened very quickly, and it coincided with our rethinking of valuation on some performing credits. So again, Ken, we are just trying to very aggressively... We are now at a point in our processes where we are really looking much further ahead in terms of potential stress and really getting ahead of this thing. But I do view that as somewhat of an anomaly this quarter. That was a pretty unusual event.

I shouldn’t read anything into the rate of loss and add that to the rest of the...

No. We did have some valuation write-downs though. We had a provision, I think it was $16 million, and the balance was related to essentially existing write-downs on that portfolio, with some of that being reappraisal work on a whole host of loans.

Kind of along the same lines, you indicated that nonperformers probably peaked in the third quarter, and that they should continue to come down. We talked a little bit about inflow rates earlier, if we just take the very simple measure and add charge-offs and the change in nonperformers together, nonperformers would have still gone up without the charge-offs. When do you see that turning? When do you think we are going to get to the point where nonperformers are coming down, not just because of charge-offs, but where through your mitigation efforts, the levels are coming down and the charge-offs had already been taken on those credits.

That’s a very good question. I would say we have believed for a while that this year you would see that occurring, and we have said for a while that it would more likely occur in the second half than the first half; and we still stand by that. I think we are about at that point. We are at the breakpoint where that’s beginning to occur. We had something occur this quarter that we earlier spoke about, with a performing credit that was a little bit of a surprise. But when you adjust for that... When we adjust for that in our internal look, we were making pretty decent progress this quarter.

And the only other question I have is on the margin. It was down about 20 basis points during the quarter. How much of that was due to interest accrual reversals or the loan sale or whatever?

No, there was some impact on that, but most of it related to the cash liquidity of $283 million.

Ken, we are behind where we thought we’d be in terms of investing cash. We had sort of a whacky bond market, well I hope it’s whacky, develop during the quarter, late in the last third of the quarter. And we are just behind where we thought we’d be in terms of our investments, so we’re carrying more liquidity than we expected at this point. And the other thing is our... As you saw on the deposit side, we’re sort of... As I mentioned earlier, some of that is seasonal so everything converged this quarter and we ended up with a lot more cash than we had expected.

Yes and no, but I think we will want to roll forward with some investment of that cash in lower yields in the bond portfolio, and that’s something we are working on right now.

And once again, if you have a question, please press star then one on your touchtone phone.

And our next question comes from Dave Bishop from Stifel Nicolaus. Please go ahead.

You touched a little bit on the restructure of the TDR balances this quarter, some improvement there. What has been the success rate there? I know you are still working on the process, but I guess the cure rate versus the re-default rate there, have you seen much...

We have had almost no re-default in the whole portfolio. But when we do a TDR, we fully underwrite the credit. On the commercial side, we don’t move into a TDR unless we are 100% certain that the cash flows are supportable and that they appropriately support the debt service we are creating in the TDR. So we have had almost no default for anything that you’ve seen classified TDR and held TDR. On the consumer side, in about—Jean... I think about a third of our TDRs are consumer and most of that of course is residential mortgage. We have the same approach.

Sure. We underwrite fully the borrowers and make sure that whatever structure we are putting in place, we have a high level of confidence around the ability to perform under that. And there are government programs where the approach is more of a trial where the default rates we are seeing publicly are huge.

Yeah, 40-50 percent. Our re-default rate, Bill, I think is 5 percent or something like that.

Right, and none on the commercial because that’s the same approach. We have a very high confidence level when we do that around the ability to perform.

And yeah, you bring up a good point. We really believe our troubled debt restructures have a pretty high quality associated with them, particularly on the commercial side. Again, the tactic we talked about for a year is to more aggressively approach TDR work to keep borrowers committed to projects and to balance things with cash flows temporarily over this stressed period.

Great. Well thank you very much for your attendance today. We hope to report continued progress over the next 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.

•

Solid capital position with estimated tangible common equity (TCE) of 8.5% when DTA valuation allowance of $41.0 million is recaptured.

•

Nonperforming loans declined from $96.3 million at March 31, 2010 to $90.9 million during the quarter

•

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

•

Cost of deposits declined 9 basis points to 0.94%; total interest bearing liabilities down 8 basis points to 1.17%

•

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

(1)

Reflects conversion of Series B Mandatorily Convertible Preferred Stock to Common Stock which adds 34,482,758 shares to outstanding common shares for total common shares outstanding of 93,432,774 at June 30, 2010

Funding & Liquidity
Stable Funding Profile and Very Strong Liquidity Position

- Customer deposits and sweep repos were $1.780 million at June 30, 2010 ⁽¹⁾
- Customer deposits and sweep repos compose 94% of total funding ⁽²⁾

•

On balance sheet cash liquidity averaged approximately $253 million for the second quarter

•

Combined available contingent liquidity from the Federal Reserve, FHLB, and free securities approximately $707 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.

(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
Average Deposits

° Lower loan balances, repositioning of the investment portfolio and increased levels of


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

July 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 July 22, 2010 related to Seacoast’s financial results for the second quarter ended June 30, 2010
99.2		Transcript of Seacoast’s investor conference call held on July 23, 2010 to discuss Seacoast’s financial results for the second quarter ended June 30, 2010
99.3		Data on website containing information used in the conference call held on July 23, 2010 to discuss Seacoast’s financial results for the second quarter ended June 30, 2010


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

Construction and land development
Residential	$	16,074	$	73	$	16,147	$	4,697
Commercial		26,718		0		26,718		486
Individual		1,821		135		1,956		3,343
Residential Mortgage		12,470		1,969		14,439		19,256
Commercial Real Estate Mortgage		13,674		11,240		24,914		36,595
Commercial and Financial		61		4,731		4,792		0
Installment loans to individuals		1,288		631		1,919		499
TOTAL	$	72,106	$	18,779	$	90,885	$	64,876


	June 30,			December 31,			June 30,
LOANS	2010			2009			2009
Construction and land development		$	106,825		$	162,868	$	307,708
Real estate mortgage			1,082,518			1,109,077		1,135,311
Installment loans to individuals			61,005			64,024		69,165
Commercial and financial			49,949			61,058		71,836
Other loans			303			476		320

Total Loans		$	1,300,600		$	1,397,503	$	1,584,340


Date of Report (Date of Earliest Event Reported):		July 22, 2010


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


Dollars in millions
Construction and Land
Development Loans	High Point			June 30, 2009			March 31, 2010			June 30, 2010
Residential	$	351.6	3/31/2007	$	96.7		$	41.1		$	32.5
Commercial		242.4	12/31/2007		166.8			72.6			38.8
Individuals		91.3	12/31/2006		44.2			37.6			35.6

	$	627.0	9/30/2007	$	307.7		$	151.3		$	106.9

Total as a percentage of total loans					19	%		11	%		8	%
Total as a percentage of tier 1 risk
based capital and allowance for
loan losses					133	%		65	%		40	%


	2Q-2010			1Q-2010			4Q-2009			3Q-2009
	Estimate			Actual			Actual			Actual
Tier 1 Capital Ratio		17.62	%		13.83	%		13.75	%		14.94	%
Total Risk Based Capital Ratio		18.89	%		15.29	%		15.17	%		16.22	%
YTD Average Equity to YTD Average Assets	7.82%			7.13%			8.92%			9.18%
Tangible Equity to Tangible Assets		8.78	%		6.96	%		6.88	%		8.24	%
Tangible Common Equity to Tangible Assets ⁽¹⁾	6.60%			4.82%*			4.79%			6.14%
Tangible Common Equity to Risk Weighted Assets ⁽¹⁾	10.78%			7.53%			7.29%			8.84%


	($ in thousands)
	2Q–2010		1Q–2010		2Q–2009 ⁽³⁾
Noninterest Expenses	$	19,220	$	23,369	$	21,225
Nonrecurring:
Severance		199		5		152
Professional fees		231		771		—
Legal settlement		—		150		150
Branch closures		—		150		26
Other		—		—		—
Total nonrecurring expenses	$	430	$	1,076		328
Adjusted Noninterest Expense	$	18,790	$	22,293	$	20,897
FDIC Expense		—		—		996
Net loss on OREO and other asset dispositions		415		4,073		1,440
Credit Costs ⁽¹⁾		697		615		1,024

Controllable Expenses	$	17,678	$	17,605	$	17,437


	2Q 2010			2Q 2010
	vs 1Q			vs 2Q
	2010⁽²⁾ 2009⁽³⁾
Noninterest Expenses		-17.8	%		-9.4	%
Nonrecurring:
Severance
Professional fees
Legal settlement
Branch closures
Other
Total nonrecurring expenses
Adjusted Noninterest Expense		-15.7	%		-10.1	%
FDIC Expense
Net loss on OREO and other asset dispositions
Credit Costs ⁽¹⁾
Controllable Expenses		0.4	%		1.4	%


	Year over Year			Growth for quarter			Annualized
Demand deposits (noninterest bearing)		-0.63	%		2.88	%		11.52	%
Savings deposits		9.38	%		4.11	%		16.42	%
Other time certificates		-11.46	%		-6.98	%		-27.93	%
Core Deposits		2.56	%		1.45	%		5.82	%
Brokered time certificates		-69.36	%		-24.08	%		-96.32	%
Time certificates of $100,000 or more		-8.92	%		-11.04	%		-44.17	%
Total Deposits		-1.93	%		-1.03	%		-4.14	%
Excluding brokered time deposits		-0.62	%		-0.69	%		-2.75	%
Total Demand and Savings		6.79	%		3.81	%		15.23	%


	($ in thousands)
	2Q–2010		Mix
Demand deposits (noninterest bearing)	$	276,455		16.11	%
Savings deposits		877,544		51.14	%
Total Demand and Savings	$	1,153,999		67.25	%
Other time certificates		288,310		16.80	%
Brokered time certificates		19,788		1.15	%
Time certificates of $100,000 or more		253,797		14.79	%

Total Time Deposits	$	561,895		32.75	%
Total Deposits	$	1,715,894


	Q2-09			Q3-09			Q4-09			Q1-10			Q2-10
Net Interest Margin		3.65	%		3.74	%		3.37	%		3.48	%		3.27	%