Seacoast Banking Corporation Of Florida · NASDAQ:SBCF
Seacoast Banking Corporation Of Florida — Seacoast Banking Corp of Florida — Q3 2018 Earnings Presentation
59 slides from Seacoast Banking Corporation Of Florida's earnings presentation, Nov 7, 2018
Slide 1: Investor Presentation Q3 2018
Contact: (email) Chuck.Shaffer@SeacoastBank.com (phone) 772.221.7003 (web) www.SeacoastBanking.com Investor Presentation Q3 - 2018
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 Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 , including, without limitation, statements a
Slide 3: Agenda
Agenda 3 ABOUT SEACOAST BANK 1 COMPANY PERFORMANCE 2 SEACOAST’S DIFFERENTIATED STRATEGY 3 OUTLOOK 4
Slide 4: Seacoast Bank
Seacoast Bank [NASDAQ: SBCF] 4 Valuable Florida Franchise With Balanced Growth Strategy, Benefiting from Attractive Geography, Investments in Digital Transformation and Commercial Loan Platform, and Strategic Acquisitions Seacoast Customer Map • $5.9 billion in assets as of September 30, 2018, opera
Slide 5: Seacoast Has Outperformed the Major Indices
Florida Bank Peers (1) 5 Seacoast Has Outperformed the Major Indices S&P 500 SBC F KBW Regional Banking Index Source: Bloomberg Note: Market data as of 10/26/2018 (1) Florida Bank Peers includes Florida headquartered banks with greater than $200 million and less than $30 billion in mark et capitaliz
Slide 6: Agenda
Agenda 6 ABOUT SEACOAST BANK 1 COMPANY PERFORMANCE 2 SEACOAST’S DIFFERENTIATED STRATEGY 3 OUTLOOK 4
Slide 7: Q3 2018 Highlights and Notable Item
Q3 2018 Highlights and Notable Item 7 With a growing presence in Florida’s most attractive markets, Seacoast is one of Florida’s top - performing banking franchises. • Earnings per share totaled $0.34 on a GAAP basis, and $0.37 per share on an adjusted basis 1 . • Results for third quarter were impa
Slide 8: First Green Bank Acquisition: Continuation of Land and Expand M&A Strategy
First Green Bank Acquisition: Continuation of "Land and Expand" M&A Strategy in Orlando FL 8 High - Quality Expansion In Attractive Market • Expands footprint in Orlando, Florida’s 3rd largest MSA • As of September 30, 2018, First Green Bank had approximately $676 million in loans and $664 million i
Slide 9: Net Interest Income and Margin
Net Interest Income and Margin 9 • Net interest income 1 totaled $51.7 million, up $1.4 million or 3% from the prior quarter and $5.8 million or 13% from the prior year quarter. • Net interest margin was 3.82% in the current quarter compared to 3.77% in the prior quarter and 3.74% in the third quart
Slide 10: Adjusted Noninterest Income
Adjusted Noninterest Income 1 10 • Adjusted noninterest income 1 totaled $12.3 million, down $0.4 million or 3% from the prior quarter and up $0.9 million or 7% compared to the prior year quarter. • Adjusted noninterest income 1 is benefiting from increased customer engagement resulting in higher se
Slide 11: Adjusted Noninterest Expense
Adjusted Noninterest Expense 1 11 • As a percentage of average tangible assets, adjusted noninterest expense in the current quarter was 2.48% compared to 2.57% for the prior quarter and 2.50% for the third quarter of 2017. • Higher salaries and benefits, reflecting investments in talent in our comme
Slide 12: Efficiency Ratio
Efficiency Ratio 12 • The efficiency ratio was 57.0% compared to 58.4% in the prior quarter and 58.9% in the third quarter of 2017. • The adjusted efficiency ratio 1 was 56.3% compared to 57.3% in the prior quarter and 57.7% in the third quarter of 2017. 2 1 Non - GAAP measure, see “Explanation of C
Slide 13: Loan Growth Momentum Continues
Loan Growth Momentum Continues, Supported by a Strong Florida Economy, and Prudent Guardrails 1 3 • Third quarter loans totaled $4.1 billion, an increase of $674 million or 20% from year - ago levels. Adjusting for acquisitions, loans grew $267 million or 8% year over year. • For the third consecuti
Slide 14: The Deposit Franchise Continues to Perform Well
The Deposit Franchise Continues to Perform Well and Serves as a Source of Earnings Strength 1 4 • Total deposits increased 13% year over year. • Excluding acquired deposits, noninterest bearing deposits grew 8% year over year, and total deposits grew 4% year over year. • Transaction accounts represe
Slide 15: Average Deposit Balances and Cost
Average Deposit Balances and Cost 1 5 Our focus on organic growth and relationship - based funding, in combination with our innovative analytics platform, supports a well - diversified low - cost deposit portfolio. Our deposit beta continues to perform within our expectations. 3Q'17 - 3Q'18 Interest
Slide 16: Credit Quality
Credit Quality ($ in thousands) 1 6 Non - Acquired 1 1 Includes provision of $3.1 million for a single impaired loan.
Slide 17: Maintaining Strong Capital to Support Balanced Growth Opportunities
Maintaining Strong Capital to Support Balanced Growth Opportunities 1 7 1 1 Non - GAAP measure, see “Explanation of Certain Unaudited Non - GAAP Financial Measures.”
Slide 18: Agenda
Agenda 18 ABOUT SEACOAST BANK 1 COMPANY PERFORMANCE 2 SEACOAST’S DIFFERENTIATED STRATEGY 3 OUTLOOK 4
Slide 19: Seacoast's Differentiated Strategy
19 Experienced Board & Management Team Comprehensive Customer Servicing Model Track Record of Value - Creating Acquisitions Expanding Analytical & Digital Capabilities Well - Positioned to Benefit From Florida Market Focused on Controls Seacoast’s Differentiated Strategy
Slide 20: Meeting Customer Needs Profitably Through an Evolving Distribution Network
DISTRIBUTION NETWORK 20 Meeting Customer Needs Profitably Through an Evolving Distribution Network Strategic Execution Framework BRANCH COMMERCIAL BANKING OFFICE MOBILE ONLINE ATMs CALL CENTER CUSTOMER’S OFFICE Talent, Technology and Analytics ACQUIRE CUSTOMERS DEEPEN RELATIONSHIPS BROADEN SERVICES
Slide 21: Balanced Growth Strategy Delivering Results Since January 2014
21 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 Total Excluding Acquisitions Total Including Acquisitions $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 Total Excluding Acquisitions Total Including Acquisitions Organic Deposit Growth Up 27%, 142% Including M&A Organic Loan Growth Up 92%, 210% Including M&A Balanced Growth Strategy
Slide 22: Focus on Business Banking Driving Growth in Loans and Deposits
22 $1,881 $1,841 $2,056 $2,124 $2,503 $2,538 $2,599 $2,519 $ $500 $1,000 $1,500 $2,000 $2,500 $3,000 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Focus On Business Banking Is Driving Significant Growth In Loans Outstanding And Deposits • Focused on businesses with revenues $5mm+ in specif
Slide 23: Unique Approach to Serving Our Customers
XXXXXXX 23 Unique Approach to Serving Our Customers (Patent Pending) Unlike Other Community Banks, Seacoast Uses its Vast Data Set and Machine Learning to Drive Value Creation Deepening Relationships With Customers and Increasing Value Increased Revenue per Customer A single view of the customer (27
Slide 24: Digital Servicing is Key to Increasing Customer Value
24 Half of all routine branch transactions have been shifted to lower cost channels like ATMs and Mobile. This gives Seacoast flexibility as it evolves its distribution network. Digital Servicing is Key to Increasing Customer Value … And Seacoast is Aggressively Moving Routine Transactions to ATMs a
Slide 25: Growing While Rationalizing Branches
As a Result, Seacoast is Growing While Rationalizing Branches Seacoast continues to create shareholder value via operating leverage in its branch network. As of 3Q 2018, Deposits Increased 157% While Branches Increased Only 44% Since YE 2013 25 $1,806 $2,417 $2,844 $3,523 $4,593 $4,644 $53 $56 $66 $
Slide 26: Seacoast's Differentiated Strategy
26 Experienced Board & Management Team Comprehensive Customer Servicing Model Track Record of Value - Creating Acquisitions Expanding Analytical & Digital Capabilities Well - Positioned to Benefit From Florida Market Focused on Controls Seacoast’s Differentiated Strategy
Slide 27: Advantages in Our Approach to Credit Risk Management
27 We Have a Number of Advantages Related to Our Approach to Credit Risk Management 1 Strong, skilled, independent underwriting teams that confirm solid, multiple repayment sources 2 Well - defined portfolio limits and elevated credit portfolio management/monitoring 3 Digestible loan sizes and no sy
Slide 28: Strong Growth Intentionally Balanced and Not Dependent on CRE Loans
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Dec, 2013 Dec, 2014 Dec, 2015 Dec, 2016 Dec, 2017 Q3 18 Credit Card Construction Factoring Consumer Marine Other C&I OOCRE Income CRE Residential 28 Strong Growth Has Been Intentionally Balanced and Not Dependent on CRE Loans Loans Outs
Slide 29: Seacoast Conservative Risk Profile
29 Investor Presentation Top 10 loan relationships represent 28% of total risk based capital Seacoast Conservative Risk Profile Well Positioned For Sustainable Value Creation $328,000 Down 42% Average Commercial Loan Size Change in Dollars (since FYE 2011)
Slide 30: Our Approach to CRE Is Different Than Florida Peers
30 Investor Presentation CRE loans as a percent of total capital remain relatively flat and intentionally below Florida peers (199% vs 255% peer mean) 225% 290% 191% 257% 199% 255% 100% 150% 200% 250% 300% 350% SBCF Florida Peers Q4 2016 Q4 2017 Q3 SNB / Q2 2018 (peers) CRE Loans as a Percent of Tot
Slide 31: Seacoast's Differentiated Strategy
31 Experienced Board & Management Team Comprehensive Customer Servicing Model Track Record of Value - Creating Acquisitions Expanding Analytical & Digital Capabilities Well - Positioned to Benefit From Florida Market Focused on Controls Seacoast’s Differentiated Strategy
Slide 32: Acquisition Strategy Expands Customer Franchise
32 Acquisition Strategy Expands Customer Franchise GulfShore Bank April 2017 BMO Harris Bank Orlando Operations June 2016 Floridian Financial Group March 2016 Grand Bank July 2015 BankFIRST October 2014 2014 2015 2016 2017 20% average IRR 4th largest Florida bank, up from 6th in 2014 #1 Florida head
Slide 33: Seacoast's Differentiated Strategy
33 Experienced Board & Management Team Comprehensive Customer Servicing Model Track Record of Value - Creating Acquisitions Expanding Analytical & Digital Capabilities Well - Positioned to Benefit From Florida Market Focused on Controls Seacoast’s Differentiated Strategy
Slide 34: The Florida Market
Southwest Florida Pop: 1,570,228 Pop Growth: 9.6% Treasure Coast/ Palm Beach Co. Pop: 1,956,515 Growth: 7.3% I - 4 Corridor Pop: 7,128,386 Growth: 8.5% *US Census Data Among the top 10 fastest growing states Surpassed New York to become the third largest state in 2014 Florida’s economy accelerating
Slide 35: Rapid Decline in Florida Headquartered Banks Increases Scarcity Value
35 Number of Banks Headquartered in Florida per Year Rapid Decline in Florida Headquartered Banks Increases Seacoast’s Scarcity Value Source: SNL Financial and FDIC.gov. Note: Includes Commercial Banks, Savings Banks, and Savings & Loan Associations. Number of banks measured at year end with the exc
Slide 36: Seacoast's Differentiated Strategy
36 Experienced Board & Management Team Comprehensive Customer Servicing Model Track Record of Value - Creating Acquisitions Expanding Analytical & Digital Capabilities Well - Positioned to Benefit From Florida Market Focused on Controls Seacoast’s Differentiated Strategy
Slide 37: Strength in Data and Analytics: Customer Profitability
37 Because of Our Strength In Data And Analytics, We Can Examine: We Know Our Customers’ Profitability and Manage Them Accordingly Customer Potential Low High Current Value High Retain & Engage Retain & Grow Low Manage & Lower Cost to Serve Grow! With this, We Can See the Characteristics and Behavio
Slide 38: Understanding the Path to Value Creation at a Customer Level
Median 75th Percentile 38 Opportunity Sizing Engine ( Patent Pending ) Consumer Lifetime Value Small Business Lifetime Value 3x Median 75th Percentile 5x Median 75th Percentile 3x Commercial Lifetime Value Source: Seacoast Proprietary Data Understanding the Path to Value Creation at a Customer Level
Slide 39: Opportunity Sizing Engine
Opportunity Sizing Engine Used to understand precise tactics to generate value for customers and shareholders 39 Bringing Together Marketing Automation, Customer Lifetime Value (“CLTV”) and the Opportunity Sizing Engine CLTV Used for understanding the characteristics of value and potential at an ind
Slide 40: Seacoast's Differentiated Strategy
40 Experienced Board & Management Team Comprehensive Customer Servicing Model Track Record of Value - Creating Acquisitions Expanding Analytical & Digital Capabilities Well - Positioned to Benefit From Florida Market Focused on Controls Seacoast’s Differentiated Strategy
Slide 41: Revitalized Board Aligned with Our Balanced Growth Strategy
41 Revitalized Board Aligned with Our Balanced Growth Strategy ADDITIONS Herb Lurie 2016 Jacqueline Bradley May 2015 Maryann Goebel Feb. 2014 Julie Daum October 2013 Dennis Arczynski July 2013 Timothy Huval 2016 2013 2014 2015 2016 2017 Al Monserrat Feb 201 7
Slide 42: We Have Methodically Added Strong Talent in Key Areas
42 We Have Methodically Added Strong Talent in Key Areas Dennis S. Hudson III Chairman & CEO Charles M. Shaffer CFO & Head of Strategy Charles K. Cross Jr. Executive Vice President & Commercial Banking Executive Julie Kleffel Executive Vice President & Community Banking Executive Joe Forlenza Chief
Slide 43: Agenda
Agenda 43 ABOUT SEACOAST BANK 1 COMPANY PERFORMANCE 2 SEACOAST’S DIFFERENTIATED STRATEGY 3 OUTLOOK 4
Slide 44: Our Future Outlook is Based on Four Key Principles
44 Our Future Outlook is Based on Four Key Principles 1 Our primary driver for growth will be strong performance from our business units 2 Our goal is to continue to drive profitability and growth to the maximum level without increasing our overall risk profile 3 Opportunistic acquisitions will be a
Slide 45: Vision 2020 Connects Current and Planned Innovations
How We Sell • Continue to develop direct sales channels and offerings based on customer needs and preferences • Simplify processes for our customers and bankers • Reduce our cost to acquire How We Service • We are outpacing our peers in engaging our customers with self - serve options for routine ba
Slide 46: On-track to Achieve Our Vision 2020 Objectives
On - track to Achieve Our Vision 2020 Objectives 46 Vision 2020 Targets Return on Tangible Assets 1.30% + Return on Tangible Common Equity 16% + Efficiency Ratio Below 50%
Slide 47: Contact Details
Charles M. Shaffer Executive Vice President Chief Financial Officer (772) 221 - 7003 Chuck.Shaffer@seacoastbank.com INVESTOR RELATIONS www.SeacoastBanking.com NASDAQ: SBCF Contact Details: Seacoast Banking Corporation of Florida 47
Slide 48: Appendix
+YEARS
Slide 49: Explanation of Certain Unaudited Non-GAAP Financial Measures
Explanation of Certain Unaudited Non - GAAP Financial Measures This presentation contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”) . The financial highlights provide reconciliations between GAAP net income and adjusted net income, GAAP
Slide 50: GAAP to Non-GAAP Reconciliation (3Q 2018 - 3Q 2017)
GAAP to Non - GAAP Reconciliation (3Q 2018 - 3Q 2017) 50 (Dollars in thousands except per share data) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Net income (loss) $ 16,322 $ 16,964 $ 18,027 $ 13,047 $ 14,216 Gain on sale of VISA Stock 0 0 0 (15,153 ) 0 Securities (gains)/losses, net 48 48 102 (112 ) 47 Total Adj
Slide 51: GAAP to Non-GAAP Reconciliation (3Q 2018 - 3Q 2017)
GAAP to Non - GAAP Reconciliation (3Q 2018 - 3Q 2017) 51 (Dollars in thousands) 3Q'18 2Q'18 1Q'18 4Q'17 3Q'17 Adjusted Revenue $ 63,901 $ 62,976 $ 62,160 $ 59,603 $ 57,230 Impact of FTE adjustment 147 87 91 174 154 Adjusted Revenue on a fully taxable equivalent basis 64,048 63,063 62,251 59,777 57,3
Slide 52: Commercial Bankers Utilize Proprietary Software to Grow Portfolio Profitability
XXXXXXX 52 Commercial Bankers Utilize Proprietary Software, Fueled by Advanced Analytics, to Grow Their Portfolio Profitability Commercial Banking portal (called Relationship Profitability System or RPS)provides each Banker with a summary of their portfolio. Key performance indicators on one dashboa
Slide 53: Commercial Bankers Can Visualize Profitability Levers for Their Portfolio
XXXXXXX 53 Commercial Bankers Can Easily Visualize Profitability Levers for Their Portfolio Commercial Banking portal shows component parts or waterfall of customer contribution at the portfolio level as well as at the customer level
Slide 54: Commercial Bankers Can See Their Entire Portfolio and Recognize Trends
XXXXXXX 54 Commercial Bankers Can Easily See Their Entire Portfolio and Recognize Important Trends … Bankers can see monthly contribution, loans, committed exposure, deposits, and fees Entire portfolio can be sorted based on any of these metrics Visual alerts enable bankers to see important trends
Slide 55: Alerted to Changes in Customer Value and Behavior Daily
XXXXXXX 55 … And Are Alerted to Changes in Customer Value and Behavior on a Daily Basis Other alerts in Commercial Banking portal include loan pay - downs and large deposit balance fluctuations… …as well as additional opportunities to serve customers. Additionally, bankers have a full view of produc
Slide 56: Retail Bankers Use Proprietary Software to Action Opportunities
XXXXXXX 56 Retail Bankers Use Proprietary Software to Action Opportunities Within Their Customer Base Customer outreach opportunities are triggered by Seacoast’s marketing automation and customer analytics platform. Opportunities are force ranked based on opportunity size.
Slide 57: Retail Bank Opportunities Sequenced Based on Proprietary Models
XXXXXXX 57 Retail Bank Opportunities are Sequenced Based on Seacoast’s Proprietary Models Triggered opportunities driven by customer behavior Opportunities derived from Seacoast’s proprietary Opportunity Sizing Engine Other opportunities derived from Seacoast’s marketing automation engine.
Slide 58: Retail Bankers Can Visualize Important Trends at a Customer Level
XXXXXXX 58 Retail Bankers Can Visualize Important Trends at a Customer Level Monthly contribution trend and waterfall views help bankers understand areas of focus for each customer
Slide 59: Customer Outreach is Fully Measured and Models Continuously Optimized
XXXXXXX 59 Customer Outreach is Fully Measured and Models are Continuously Optimized Outbound calling efforts and sentiment are measured, driving optimization efforts.
Seacoast Banking Corp of Florida — Q3 2018 Earnings Presentation on 6ix