Seacoast Banking Corporation Of Florida · NASDAQ:SBCF
Seacoast Banking Corporation Of Florida — Seacoast Banking Corp of Florida — Q3 2019 Earnings Presentation
46 slides from Seacoast Banking Corporation Of Florida's earnings presentation, Nov 13, 2019
Slide 1: Investor Presentation Third Quarter 2019 Results
Investor Presentation THIRD QUARTER 2019 RESULTS THIRD QUAR TER 2 019
Slide 2: Cautionary Notice Regarding Forward-Looking Statements
Cautionary Notice Regarding Forward-Looking Statements This press release contains “forward-looking statements” within the meaning, and protections, of the failure of assumptions and estimates, as well as differences in, and changes to, economic, market Section 27A of the Securities Act of 1933 and
Slide 3: Agenda
Agenda 1 ABOUT SEACOAST BANK 2 COMPANY PERFORMANCE 3 SEACOAST’S DIFFERENTIATED STRATEGY 4 SEACOAST’SAPPENDIX DIFFERENTIATED STRATEGY T H I R D QUAR TER 2 019 3
Slide 4: Seacoast Has a Valuable and Growing Florida Franchise
Seacoast Has a Valuable and Growing Florida Franchise Seacoast Customer Map • $6.9 billion in assets as of • Highly disciplined credit portfolio September 30, 2019, operating in the nation’s third-most populous • Prudent liquidity position state • Strong and growing presence in four • Strong capital
Slide 5: Company Performance
Agenda 1 ABOUT SEACOAST BANK 2 COMPANY PERFORMANCE 3 SEACOAST’S DIFFERENTIATED STRATEGY 4 SEACOAST’SAPPENDIX DIFFERENTIATED STRATEGY T H I R D QUAR TER 2 019 5
Slide 6: Third Quarter Highlights
Third Quarter Highlights 1 • Earnings per diluted share totaled $0.49 on a GAAP basis and $0.53 on an adjusted basis for the quarter • On a GAAP basis, ended the quarter at 1.61% Return on Tangible Assets (ROTA) and 14.7% Return on Average Tangible Common Equity (ROTCE). On an adjusted basis, third
Slide 7: Net Interest Income and Margin
Net Interest Income and Margin ($ In Thousands) 1 • Net interest income totaled $61.0 million, up $0.8 million or 1% from the prior quarter and up $9.3 million or 18% from the third quarter of 2018. 1 • Net interest margin decreased 5 basis points to 3.89% quarter-over-quarter. Removing accretion on
Slide 8: Noninterest Income
Noninterest Income 1 Noninterest income increased $0.4 million sequentially and adjusted noninterest income1 decreased $0.2 million sequentially. Changes quarter-over-quarter include: • Mortgage banking fees increased $0.4 million sequentially, reflecting the combination of increased refinance activ
Slide 9: Proven Success at Disciplined Expense Control
Proven Success at Disciplined Expense Control 1 Noninterest expense declined $2.4 million and adjusted noninterest expense1 declined $1.1 million sequentially. Changes quarter-over-quarter include: · Salaries and benefits on a GAAP basis decreased $1.0 million, reflecting the impact of $1.1 million
Slide 10: Continued Favorable Efficiency Ratio Trend
Continued Favorable Efficiency Ratio Trend GAAP - Efficiency Adjusted - Efficiency1 • The efficiency ratio was 48.6% compared to 53.5% in the prior quarter and 57.0% in the third quarter of 2018. 1 • The adjusted efficiency ratio improved to 49.0% compared to 51.4% in the prior quarter and 56.3% in
Slide 11: Loan Growth Momentum Continues
Loan Growth Momentum Continues, Supported by a Strong Florida Economy and Strict Credit Underwriting Total Loans Outstanding ($ in millions) • Third quarter loans totaled $5.0 billion, an increase of $927 million or 23% year-over-year. • New loan originations of $488 million, compared to $407 millio
Slide 12: Strong Deposit Franchise Supported by Attractive Markets
Strong Deposit Franchise Supported by Attractive Markets Deposits Outstanding ($ in millions) • Total deposits increased $132 million quarter-over-quarter and $1.0 billion compared to the third quarter of 2018. • Third quarter balances reflect an increase of $189 million in brokered deposits. We con
Slide 13: Average Deposit Balances and Cost
Average Deposit Balances and Cost Deposit Mix and Cost of Deposits Trended Cost of Deposits 0.43% 0.54% 0.67% 0.76% 0.73% Our focus on organic growth and relationship-based funding, in combination with our innovative analytics platform, supports a well-diversified low-cost deposit portfolio. T H I R
Slide 14: Continued Strong Asset Quality Trends
Continued Strong Asset Quality Trends ($ in thousands) $3,749 1 2 1Includes charge off of $3.0 million for a single impaired loan. T H I R D QUAR TER 2 019 2As a percentage of total risk-based capital 14
Slide 15: Strong Capital Supporting Fortress Balance Sheet
Strong Capital Supporting Fortress Balance Sheet 1Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP T H I R D QUAR TER 2 019 15
Slide 16: Steady Increase in Shareholder Value
Steady Increase in Shareholder Value Compounded annual growth rate of 13% in tangible book value per share since announcing our Vision 2020 targets in February 2017. T H I R D QUAR TER 2 019 16
Slide 17: We Remain Confident in our Ability to Achieve Our Vision 2020 Targets
We Remain Confident in our Ability to Achieve Our Vision 2020 Targets Vision 2020 Targets Return on Tangible Assets 1.30% + Return on Tangible Common Equity 16% + Efficiency Ratio Below 50% T H I R D QUAR TER 2 019 17
Slide 18: Seacoast's Differentiated Strategy
Agenda 1 ABOUT SEACOAST BANK 2 COMPANY PERFORMANCE 3 SEACOAST’S DIFFERENTIATED STRATEGY 4 SEACOAST’SAPPENDIX DIFFERENTIATED STRATEGY T H I R D QUAR TER 2 019 18
Slide 19: Seacoast Executes a Differentiated Strategy from Other Community Banks
Seacoast Executes a Differentiated Strategy from Other Community Banks Focus on Controls Capitalize on Complete Disciplined, Business Banking Opportunities Accretive Acquisitions That Expand Our Footprint Continue to Evolve Retail Model for Leverage Our Analytics Capabilities Profitability and Effic
Slide 20: Guardrails, Analytics and Credit Culture Playbook
Guardrails, Analytics and Credit Culture Playbook Guide Execution Toward Building an Intentional Portfolio E X PAN D G RO W S E LE C TI V E CA UT IO N AV O I D Support customers with Requires strong balance sheet No interest in adding Highly attractive, expand Actively seek new prudent underwriting,
Slide 21: Granularity & Lack of Concentration in the Portfolio
Granularity & Lack of Concentration Are Hallmarks of the Seacoast Portfolio 14% 12% Largest Relationship as % of Capital $ Millions $657 10% Avg Comm. Loan Size (Loans in Core) $ Thousands 12.5% 8% 9.5% 9.2% 6% 8.7% $354 6.7% 4% 6.6% 5.5% 4.7% 3.8% 2% 0% Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec
Slide 22: Disciplined Portfolio Management Continues to Deliver Sound Mix
Disciplined Portfolio Management Continues to Deliver Sound Mix Focus on C&I built mix from 10% to 14% of total loans while CRE remained flat, delivered through a distinctive, relationship-focused business model LOANS OUTSTANDING LOAN MIX $241 5% 6% 6% 5% $262 5% 6% 6% 5% 10% $689 12% 14% 15% $223 $
Slide 23: Commercial Real Estate Exposure Is Moderate
Commercial Real Estate Exposure Is Moderate and Well Below Regulatory Thresholds1 CRE and AD& C ratios remain well below regulatory limits TOTAL CRE AS % OF RISK- BASED CAPITAL AD& C AS % OF RISK- BASED CAPITAL 300% Regulatory Guidance 100%100% Regulatory Guidance 250% 80% 216% 200% 60% 57% 150% 40%
Slide 24: Seacoast's Model Is Built to Perform Through Business Cycles
Seacoast’s Model Is Built to Perform Through Business Cycles SELECTIVE on new construction projects (Residential and Commercial) Requiring more pre-sales and pre-leasing requirements on construction AVOID lending on HIGH RISK industries Increasing borrower equity requirements STRICTER COVENANTS on n
Slide 25: Seacoast Executes a Differentiated Strategy from Other Community Banks
Seacoast Executes a Differentiated Strategy from Other Community Banks Focus on Controls Capitalize on Complete Disciplined, Business Banking Opportunities Accretive Acquisitions That Expand Our Footprint Continue to Evolve Retail Model for Leverage Our Analytics Capabilities Profitability and Effic
Slide 26: Commercial Banking Is Propelled by A Unique Value Proposition
Commercial Banking Is Propelled by A Unique Value Proposition … Local Banks’ Technology Gap SEACOAST’S DIFFERENTIATED Mega Banks’ Shortfall VALUE PROPOSITION - High cost-to-serve diminishes - Disengaged from local markets ability to invest - Widening capabilities gap - Limited individual attention -
Slide 27: Focused on What Still Matters Most to Business Owners
… And Is Focused on What STILL Matters Most to Business Owners Top Drivers of Increased Customer Wallet Share RELATIONSHIP MANAGER PURCHASE PROCESS • Teaches valuable things about the PRODUCT OFFERING business • Provides a quick purchase • Promotes continuous • Communicates the value received experi
Slide 28: Expand Business Banking With Best-In-Class Tools and Business Bankers
Seacoast Will Continue To Expand Business Banking With Best-In-Class Tools and Business Bankers TODAY 2019, LAYING THE FOUNDATION FOR GROWTH TOMORROW 2020+ ACCELERATING GROWTH EXPANDING OUR PRESENCE - Expand market coverage in Tampa and - Continued significant expansion, optimizing coverage in Browa
Slide 29: Seacoast Executes a Differentiated Strategy from Other Community Banks
Seacoast Executes a Differentiated Strategy from Other Community Banks Focus on Controls Capitalize on Complete Disciplined, Business Banking Opportunities Accretive Acquisitions That Expand Our Footprint Continue to Evolve Retail Model for Leverage Our Analytics Capabilities Profitability and Effic
Slide 30: Seacoast Continues to Benefit from Value-Creating Acquisitions
Seacoast Continues to Benefit from Value-Creating Acquisitions First GREEN Bank October 2018 20%+ average IRR 2018 NorthStar Bank Palm Beach Community Bank November 2017 October 2017 GulfShore Bank April 2017 largest Florida 2017 th headquartered publicly BMO Harris Bank 4 traded bank, up from 6th O
Slide 31: Seacoast Executes a Differentiated Strategy from Other Community Banks
Seacoast Executes a Differentiated Strategy from Other Community Banks Focus on Controls Capitalize on Complete Disciplined, Business Banking Opportunities Accretive Acquisitions That Expand Our Footprint Continue to Evolve Retail Model for Leverage Our Analytics Capabilities Profitability and Effic
Slide 32: Seacoast's Community Bank Operates a Tested and Winning Strategy
Seacoast’s Community Bank Operates a Tested and Winning Strategy ACQUIRE THE RIGHT CUSTOMERS Targeted Expansion into Attractive Markets Expanding Analytic Capabilities Inform Outreach Campaigns ACQUIRE DEEPEN DEEPEN RELATIONSHIPS WITH EXISTING CUSTOMERS LOWER COST Cross Sell Opportunities Inside & O
Slide 33: Digital Servicing Enables Migration to Low Cost Channels
Digital Servicing Enables Migration to Low to Migration Enables Servicing Digital ATM Consumer Mobile Mortgage | Adoption Deposits Mobile Hub | RDC D R I H T QUA R TER TER 2 2016 2016 2016 019 38% 34% 37% 2017 2017 2017 43% 44% 41% 2018 2018 2018 47% 45% 45% VISION 2020 VISION 2020 VISION 2020 Telle
Slide 34: Growing While Rationalizing Branches
As a Result, Seacoast Is Growing While Rationalizing Branches As of YE 2018, Deposits Increased 187% While Branches Increased Only 50% Since YE 2013 $5,177 $5,000 $ M illio n s $1 10 $4,593 $4,500 $1 00 $102 $4,000 $3,523 $9 0 $3,500 $90 $2,844 $3,000 $8 0 $2,417 $2,500 $75 $1,806 $7 0 $2,000 $66 $1
Slide 35: Well Positioned For Further Growth in Key Markets
Seacoast Is Well Positioned For Further Growth in Key Markets 2013 2018 2019 & Beyond Customer Footprint Customer Footprint Attractive Florida MSA’s Orlando Tampa/St Pete Palm Beach Mass (teal) Mass Affluent (orange) Affluent (green) SMART GROWTH IN DESIRABLE FLORIDA MSA’S FUTURE FOCUS MARKETS T H I
Slide 36: Wealth Management Represents a Significant Opportunity
Wealth Management Represents a Significant Opportunity BUILT THE BUSINESS 2015/2016 $ M illio n s Significant investments to build the business, Allowing Seacoast to extract including hiring top talent and new leadership to added value from the prepare for future growth. franchise OPTIMIZED THE TEAM
Slide 37: Seacoast Executes a Differentiated Strategy from Other Community Banks
Seacoast Executes a Differentiated Strategy from Other Community Banks Focus on Controls Capitalize on Complete Disciplined, Business Banking Opportunities Accretive Acquisitions That Expand Our Footprint Continue to Evolve Retail Model for Leverage Our Analytics Capabilities Profitability and Effic
Slide 38: Approach to Customer Analytics Is a Unique Advantage
Seacoast’s Approach to Customer Analytics Is a Unique Advantage UNIFIED, HOLISTIC VIEW OF DYNAMIC CUSTOMER LIFETIME DRIVEN BY ANALYTIC MODELS EACH CUSTOMER VALUE (CLTV) MODEL AND MACHINE LEARNING PATENT PENDING • In-house analytical dataset of • Dynamic view of each customer’s • Opportunity Sizing E
Slide 39: Unique Approach to Growing Customer Value
Unique Approach to Growing Customer Value Patent Pending Unlike Other Community Banks, Seacoast Uses its Vast Data Set and Machine Learning to Drive Value Creation BEHAVIORAL & FINANCIAL DATA CUSTOMER TREATMENT PLANS Current Customers • Face to Face1 • ATMs New Customers • Outbound Call1 • Online Ba
Slide 40: Example of a Targeted, Multi-Channel Marketing Campaign
Example of a Targeted, Multi-Channel Marketing Campaign Analytic models identify customers who have a LOC they are not using, triggering automated marketing campaign LOC usage campaign – delivered to eligible customers across multiple touchpoints EMAIL ATM MESSAGE FACE TO FACE INTERACTION DIGITAL BA
Slide 41: Contact Details
Contact Details: Seacoast Banking Corporation of Florida Charles M. Shaffer Executive Vice President Chief Financial Officer (772) 221-7003 Chuck.Shaffer@seacoastbank.com INVESTOR RELATIONS www.SeacoastBanking.com NASDAQ: SBCF T H I R D QUAR TER 2 019 41
Slide 42: Appendix
Agenda 1 ABOUT SEACOAST BANK 2 COMPANY PERFORMANCE 3 SEACOAST’S DIFFERENTIATED STRATEGY 4 SEACOAST’SAPPENDIX DIFFERENTIATED STRATEGY T H I R D QUAR TER 2 019 42
Slide 43: Explanation of Certain Unaudited Non-GAAP Financial Measures
Explanation of Certain Unaudited Non-GAAP Financial Measures This presentation contains financial information determined by These measures are also useful in understanding performance trends methods other than Generally Accepted Accounting Principles and facilitate comparisons with the performance o
Slide 44: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'19 2Q'19 1Q'19 4Q'18 3Q'18 3Q'19 3Q'18 Net Income $ 25,605 $ 23,253 $ 22,705 $ 15,962 $ 16,322 $ 71,563 $ 51,313 Total noninterest income 13,943 13,577 12,836 12,714 12,291 40,356 37,308
Slide 45: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'19 2Q'19 1Q'19 4Q'18 3Q'18 3Q'19 3Q'18 Adjusted Noninterest Expense $ 36,911 $ 38,027 $ 41,098 $ 39,540 $ 35,913 $ 116,036 $ 108,165 Foreclosed property expense and net gain/(loss) on sa
Slide 46: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Quarterly Trend Nine Months Ended (Amounts in thousands except per share data) 3Q'19 2Q'19 1Q'19 4Q'18 3Q'18 3Q'19 3Q'18 Loan interest income excluding accretion on acquired loans $ 59,279 $ 58,169 $ 58,397 $ 55,470 $ 46,349 $ 175,845 $ 133,395 Accretion on acquired l
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