Seacoast Banking Corporation Of Florida · NASDAQ:SBCF
Seacoast Banking Corporation Of Florida — Seacoast Banking Corp of Florida — Q2 2016 Earnings Presentation
53 slides from Seacoast Banking Corporation Of Florida's earnings presentation, Aug 2, 2016
Slide 1: Investor Presentation Q2 2016
Investor Presentation Q2 - 2016 Contact : (email) Steve.Fowle@SeacoastBank.com (phone) 772.463.8977 (web) www.Sea coa stBanking.com
Slide 2: Forward-looking statements
This presentation contains “forward - looking statements” within the meaning 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 about future financial and operating results, ability to realized deferred ta
Slide 3: Agenda
Agenda • About Seacoast Bank • Seacoast’s Investment Thesis – Successfully Executing a Differentiated Strategy for Balanced Growth • 2016 Outlook • Company Performance • Appendix Investor Presentation 3
Slide 4: About Seacoast Bank
Agenda • $4.4B assets bank operating in the nation’s third most - populous state • Strong and growing presence in two of Florida’s most attractive MSAs • Top 10 bank in Orlando • Growing share in West Palm Beach • #1 share in Port St Lucie MSA, 8 th largest market in Florida • Investing in digital t
Slide 5: Investment Thesis: Differentiated Strategy for Balanced Growth
Agenda Investment Thesis Successfully Executing a Differentiated Strategy for Balanced Growth 5 Investor Presentation x Reaping benefits of strategic investments in organic growth and digital transformation x Track record of completing value - creating acquisitions in growing markets x Robust risk m
Slide 6: Second Quarter 2016 Results Demonstrate Balanced Growth Strategy
68.4% 65.1% 62% 64% 66% 68% 70% 2Q15 2Q16 $0.18 $0.23 $- $0.05 $0.10 $0.15 $0.20 $0.25 2Q15 2Q16 8.7% 10.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2Q15 2Q16 Second Quarter 2016 Results Demonstrate the Effectiveness of Seacoast’s Balanced Growth Strategy 6 Investor Presentation Key metrics continue to
Slide 7: Industry views on digital banking
“Our analysis suggests that winners may realize a profit upside of 40 percent or more ” “Banks that can match the agility and innovation potential of other industries can reap pre - tax ROE levels of 18% to 25%. ” “ I can imagine us about five, ten years from now talking about efficiency ratios in t
Slide 8: Seacoast's Digital Transformation: Goals and Vision
At its core, Seacoast’s digital transformation is focused on three things … • M odernizing how we sell, with an intense focus on cross - sell • L owering our cost to serve by driving routine transactions to lower - cost channels • D riving improvements in how our business operates by using analytics
Slide 9: Agenda
Agenda • About Seacoast Bank • Seacoast’s Investment Thesis – Successfully Executing a Differentiated Strategy for Balanced Growth • 2016 Outlook • Company Performance • Appendix Investor Presentation 9
Slide 10: Investment Thesis: Organic Growth and Digital Transformation
Agenda Investment Thesis Successfully Executing a Differentiated Strategy for Balanced Growth 10 Investor Presentation x Reaping benefits of strategic investments in organic growth and digital transformation • Leader in organic customer acquisition, cross selling and shifting routine transactions ou
Slide 11: Growing Customer Base Organically and via Acquisitions
50 60 70 80 90 100 110 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May 2016 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5
Slide 12: Monetizing Customer Base Via Cross Selling
Seacoast Is Monetizing Its Small Business and Consumer Customer Base Via Effective Cross Selling… 12 Investor Presentation Cross Sell of Loans Up 223% Since YE ‘13 Cross Sell of Deposit Accounts Up 112% Since YE ‘13 Cross Sell of Debit Cards Up 95% Since YE ‘13 Number of unit sales to existing small
Slide 13: Customers Increasingly Choose Non-Branch Channels
…And Seacoast Customers Increasingly Choose Non - Branch * Channels To Conduct Business 13 Investor Presentation *Non - branch channels include Seacoast’s 24x7 call center based in Florida, website, online banking, and mobile banking Investments in digital and call center paying off for shareholders
Slide 14: Non-Branch Servicing Is Key to Transformation
50,000 80,000 110,000 140,000 170,000 200,000 230,000 260,000 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Teller Non-Teller Non - Branch Servicing Is A Key Component of Our Transformation Strategy 14 Investor Presentation 81% 19% 0%
Slide 15: Growing While Rationalizing Branches
$1,768 $1,800 $2,420 $2,840 $3,760 $48 $53 $56 $66 $80 $40 $45 $50 $55 $60 $65 $70 $75 $80 $85 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2012 2013 2014 2015 2016 Total Deposits (mm) Deposits Per Branch(mm) As The Result, Seacoast Is Growing While Rationalizing Branches. Expected Deposits
Slide 16: Business Banking Driving Loan Growth
□ Focused on businesses with revenues $5mm+ in specific industry verticals □ Six offices in key metro areas of Florida (three in South Florida, three in Orlando) □ Comprehensive relationship approach: business, treasury, lending, wealth Seacoast’s Focus On Business B anking Is Driving Significant Gr
Slide 17: Investment Thesis: Value-Creating Acquisitions
Agenda Investment Thesis Successfully Executing a Differentiated Strategy for Balanced Growth 17 Investor Presentation x Reaping benefits of strategic investments in organic growth and transformation x Track record of completing value - creating acquisitions • Opportunistic deals that expand our foo
Slide 18: Proven Ability to Grow Acquired Banks
Agenda BankFIRST Acquisition H ighlights – 18 months since conversion • IRR exceeded internal target of 19% • HH growth in acquired branches = +9% • Cross sell growth (sales to existing customers) • Avg Services = +26% • Consumer Installment Loans = +55% • Consumer Lines of Credit = +23% • Debit Car
Slide 19: Now a Top 10 Bank in Orlando
Floridian Financial Group • 10 Branch Franchise in Daytona and Orlando, along attractive I - 4 Corridor • Compelling Financial Metrics Announced: - Approximately 20% IRR - Tangible book value dilution earn back of 4.2 years - EPS accretion of $ 0.02 in 2016, $0.07 - $0.09 in 2017 • Acquisition close
Slide 20: Investment Thesis: Risk Management and Controls
Agenda Investment Thesis Successfully Executing a Differentiated Strategy for Balanced Growth 20 Investor Presentation x Reaping benefits of strategic investments in organic growth and transformation x Track record of completing value - creating acquisitions x Robust risk management and controls yie
Slide 21: Conservative Risk Profile
Seacoast Conservative Risk Profile Well Positioned for Sustainable Value Creation… 21 Investor Presentation 41% 116% From $1.21B To $2.62B Average Loan Size - Commercial Total Loan Portfolio Percentage Change Change in Dollars Loan Growth FY ‘11 – Q2 ‘16 From $567K To $ 335K Top 10 loan relationship
Slide 22: Approach to CRE Differs from Florida Peers
…and Our A pproach to CRE is Very D ifferent T han Florida P eers 22 Investor Presentation CRE loans as a percent of total capital remain relatively flat and intentionally below Florida peers . (188% vs 277% peer median) 179% 211% 188% 277% 100% 150% 200% 250% 300% 350% SBCF Florida Peers Q1 2015 Q1
Slide 23: Investment Thesis: Management and Board
Agenda Investment Thesis Successfully Executing a Differentiated Strategy for Balanced Growth 23 Investor Presentation x Reaping benefits of strategic investments in organic growth and transformation x Track record of completing value - creating acquisitions x Robust risk management and controls yie
Slide 24: Board With Distinct Competencies
Seacoast’s Board Is Comprised of Experts With Distinct Competencies In Strategic Areas… 24 Investor Presentation 2011 to 2013 • Added lead board director (Retail Banking competency) • Added two additional directors (Risk and Governance competencies) • Added one director (Technology and Consulting co
Slide 25: Management Talent Added in Key Areas
…And Seacoast Has Methodically Added Strong Management Talent In Key Areas 25 Investor Presentation 2011 to 2013 • Added executive leadership in business banking, credit and risk • Added executive leadership in digital and marketing • Added executive leadership in human resources from Bank of Americ
Slide 26: Investment Thesis: Strong Florida Economy
Agenda Investment Thesis Successfully Executing a Differentiated Model in Community Banking 26 Investor Presentation x Reaping benefits of strategic investments in organic growth and transformation x Track record of completing value - creating acquisitions x Robust risk management and controls yield
Slide 27: Florida Continues To Grow Rapidly
Agenda Florida, The Nation’s Third Largest State, Continues To Grow Rapidly Population growth is a fundamental driver of the state economy 27 Investor Presentation • Surpassed New York to become the third largest state in 2014 • One of only three states with a population over 20 million (Texas, Cali
Slide 28: Agenda
Agenda • About Seacoast Bank • Seacoast’s Investment Thesis – Successfully Executing a Differentiated Strategy for Balanced Growth • 2016 Outlook • Company Performance • Appendix Investor Presentation 28
Slide 29: Outlook for 2016
Outlook for 2016: Maintain Pace of Change • Continue organic growth investments in digital transformation and customer marketing initiatives • Complete prudent, accretive acquisitions that strengthen our franchise and leverage our capabilities • Achieve 2016 adjusted earnings target of $1.00 per sha
Slide 30: Agenda
Agenda • About Seacoast Bank • Seacoast’s Investment Thesis – Successfully Executing a Differentiated Strategy for Balanced Growth • 2016 Outlook • Company Performance • Appendix Investor Presentation 30
Slide 31: Q2 2016 Financial and Growth Highlights
31 Financial Highlights Growth Highlights Q2 2016 Financial and Growth Highlights • C losed purchase and completed integration of BMO Harris’ Orlando banking operations during June, 2016, adding more than 8,000 households to the Company’s Orlando presence. • Loans grew $679 million or 35% from year
Slide 32: Earnings History
Earnings History 32 (1) Non - GAAP measure, excludes merger related charges, branch closure expenses, and other adjustments (See Appendix for reconciliati on to GAAP) • Adjusted net income (1 ) of $8.8 million was up $2.7 million or 45% from the prior year and $2.0 million from prior quarter . • Adj
Slide 33: Loan Growth Momentum Continues
Loan Growth Momentum Continues 33 $1,937 $2,099 $2,156 $2,455 $2,616 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Total Loans Outstanding (in millions) Total loans were $ 2.62 billion at June 30, 2016, up $161 million or 7 % from the prio
Slide 34: Deposit Balances Extend Growth Trends
Deposit Balances Extend Growth Trends 34 Total deposits increased 34% to $3.50 billion from one year ago. Transaction accounts represent 55% of total deposits. $1,408 $1,488 $1,589 $1,805 $1,923 $904 $947 $961 $1,055 $1,192 $293 $307 $294 $362 $386 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $
Slide 35: Net Interest Income and Margin
Net Interest Income and Margin 35 $25,788 $29,130 $29,216 $30,349 $34,801 3.50% 3.75% 3.67% 3.68% 3.63% 3.00% 3.20% 3.40% 3.60% 3.80% 4.00% 4.20% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Net Interest Income and Net Interest Margin* ($ in thousan
Slide 36: Noninterest Income
Noninterest Income 36 $2,115 $2,217 $2,229 $2,129 $2,230 $2,033 $1,925 $1,989 $2,217 $2,370 $1,335 $1,385 $1,302 $1,437 $1,308 $1,032 $1,177 $955 $999 $1,364 $1,272 $1,012 $911 $1,007 $1,460 $366 $396 $377 $379 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 Q2-15 Q3-15 Q4-
Slide 37: Noninterest Expense
Noninterest Expense 37 $11,814 $13,236 $13,124 $14,526 $15,245 $2,235 $2,279 $2,457 $2,488 $2,698 $3,272 $3,604 $3,678 $3,746 $3,645 $6,602 $6,984 $6,632 $6,546 $7,410 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Other Occupancy / Telephone Data Processing
Slide 38: Contact Details
Contact Details : Seacoast Banking Corporation of Florida [ NASDAQ: SBCF] 38 Investor Presentation Steve Fowle, CFO (email) Steve.Fowle@SeacoastBank.com (phone) 772.463.8977 Investor Relations www.SeacoastBanking.com
Slide 39: Agenda
Agenda • About Seacoast Bank • Seacoast’s Investment Thesis – Successfully Executing a Differentiated Strategy for Balanced Growth • 2016 Outlook • Company Performance • Appendix Investor Presentation 39
Slide 40: Our Business Transformation Timeline
Our Business Transformation Timeline 40 Investor Presentation 2011 to 2013 • Enhanced portfolio growth guardrails • Developed Accelerate business banking platform • Re - focused retail organization on sales growth • Invested in transformation to drive self service, cross sell and non - branch sales.
Slide 41: Florida Remains Healthy and Attractive: Net Migration
Agenda Florida Remains Healthy and Attractive 2015 Net Population Migration by State Investor Presentation 41 Source : Federal Reserve Bank of St Louis
Slide 42: Florida Remains Healthy and Attractive: Consumer Delinquencies
Agenda Florida Remains Healthy and Attractive Consumer Credit Delinquencies Year - Over - Year Includes Auto, Credit Card, Home, Student Loans, As of 1Q 2016 Investor Presentation 42 Source : Federal Reserve Bank of St Louis
Slide 43: Florida Remains Healthy and Attractive: Mortgage Delinquencies
Agenda Florida Remains Healthy and Attractive Seriously Delinquent Mortgages Year - Over - Year Change, Home Mortgages 90+ Past Due Investor Presentation 43 Source : Federal Reserve Bank of St Louis
Slide 44: Executing a Differentiated Business Model
Seacoast Is Executing a Differentiated Business Model 44 Drive adoption of lower cost servicing channels – mobile, ATM, online Drive organic growth via cross sell, especially outside of branch – digital, call center Rationalize the branch network given digital adoption, streamline support operations
Slide 45: Digital Technology Has Leveled The Playing Field
Digital Technology Has Leveled The Playing Field Digital Defined • Customer Servicing Capabilities to Lower Servicing Costs – E.G. Mobile banking, mobile check deposit, online banking, online applications/forms – Table stakes as “convenience” has been fundamentally redefined – Implication - Customer
Slide 46: Our Cross Sell Approach Is Unique Among Community Banks
Our Cross Sell Approach Is Unique Among Community Banks… Unlike other community banks, Seacoast uses its vast data set to drive cross sell programs Automated Cross Sell Offers Inbound Call Outbound Call In Branch Email ATMs Online Banking Direct Mail Mobile Banking* · Our technology enables us to se
Slide 47: Using Data To Drive Targeted Cross Selling
…And Seacoast Uses Its Data To Drive Targeted Cross Selling Business LOC Usage Campaign – Delivered To Eligible Customers Across Multiple Touchpoints Email ATM Message Online Banking Outbound Sales Call Investor Presentation 47 Software helps us identify customers who have a Business LOC but are not
Slide 48: Mobile Adoption Outpaces Community and Bigger Banks
Seacoast’s Mobile Adoption Outpaces Both Community Banks and Bigger Banks 48 Investor Presentation *FIS Research – Seacoast vs FIS Banks By Asset Size – Consumer Mobile Banking 38% 39% 42% 44% 42% 44% 46% 48% 57% 59% 61% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% Q1 2015 Q2 2015 Q3 2015 Q4 2015 <$5B $20
Slide 49: 2016 Actions Driving Operating Leverage
2016 Actions Are Driving Significant Operating Leverage 49 Investor Presentation Deposits in Billions Recent acquisitions, combined with non - branch sales and service, enable Seacoast to drive significant improvements to its cost structure Branch Count 43 43 53 52 48 62 53 52 47 47 47 47 $2.8 $2.8
Slide 50: Florida Peers Market Valuation Benchmarking
50 Investor Presentation Seacoast Florida Peers Market Valuation Benchmarking Source: SNL Financial. Note: Market data as of July 21, 2016. (1) 2017 ROAA represents Wall Street consensus 2017 net income estimate divided by Wall street consensus 2017 average assets esti mat e. (2) 2017E ROATCE repres
Slide 51: Explanation of Certain Non-GAAP Financial Measures
Explanation of Certain Unaudited Non - GAAP Financial M easures 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 52: Net Income GAAP to Non-GAAP Reconciliation
Net Income - GAAP to Non - GAAP Reconciliation (Q2 15 – Q2 16) To better evaluate its earnings, the Company removes certain items to arrive at adjusted net income, adjusted pretax, pre - provis ion income and adjusted diluted earnings per share (non - GAAP measures) as detailed in the table below: (
Slide 53: Net Income GAAP to Non-GAAP Reconciliation
Net Income - GAAP to Non - GAAP Reconciliation (Q2 15 – Q2 16) Presented below is net income excluding adjustments for merger related charges, branch closure charges, and other non core expenses. The Company believes that these results of operations are a more meaningful depiction of the underlying
Seacoast Banking Corp of Florida — Q2 2016 Earnings Presentation on 6ix