Seacoast Banking Corp. of Florida (SBCF) filed Amended Quarterly Report for the period ended 2009-09-30.
Seacoast Banking Corp of Florida is a bank holding company. Seacoast and its subsidiaries offer a full array of deposit accounts and retail banking services, engages in consumer and commercial lending and provides a wide variety of trust and asset management services, as well as securities and annuity products. Seacoast Banking Corp. Of Florida has a market cap of $26.5 million; its shares were traded at around $1.38 with and P/S ratio of 0.2.
Highlight of Business Operations:
Net loss available to common shareholders for the third quarter of 2009 totaled $(41,714,000) or $(1.21) per average common diluted share, as a result of continued increased credit costs. This compares to $(63,937,000) or $(3.35) per average common share in the second quarter of 2009 which included the write-off of $49.8 million of all of the Company’s goodwill (see “Goodwill Impairment” under “Critical Accounting Estimates”) and $(5,697,000) or $(0.30) per average common diluted share in the first quarter of 2009. In the third quarter a year ago, net loss available to common shareholders totaled $(3,448,000) or ($0.18) per average common diluted share.
Closed residential mortgage loan production for the third quarter of 2009 totaled $28 million, all of it was sold servicing-released. In comparison, $43 million in residential loans were produced in the second quarter of 2009, of which $24 million was sold servicing-released, $38 million in residential loans were produced in the first quarter of 2009, with $20 million sold servicing-released, and $22 million was produced in the third quarter of 2008, with $8 million sold servicing released. Applications for residential mortgages totaled $43 million during the third quarter of 2009 compared to $71 million and $92 million, respectively, for the second and first quarters of 2009. Third quarter is historically a seasonally weak quarter for home purchases. Existing home sales and home mortgage loan refinancing activity in the Company’s markets have increased in 2009. Demand for new home construction is expected to remain soft in 2009 and into 2010.
During the third and second quarter of 2009, the sale of mortgage backed securities totaling $25.3 million and $29.5 million, respectively, resulted in securities gains of $1,425,000 and $1,786,000, respectively, for each quarter. Management believed these securities had minimal opportunity to further increase in value. During the third quarter of 2009 maturities (principally pay-downs) totaled $25.4 million and securities portfolio purchases totaled $47.3 million. In comparison, during the second quarter of 2009 maturities (principally pay-downs and one large maturity of $20 million) totaled $47.4 million and securities portfolio purchases totaled $64.2 million.
Average deposits totaled $1,737.9 million during the third quarter of 2009, and were $35.2 million lower compared to second quarter 2009, due primarily to lower average customer balances as a result of normal seasonal declines and a planned reduction of brokered deposits of $9 million. Total average sweep repurchase agreements for the third quarter were $50.5 million lower as a result of normal seasonal funding trends for public fund customers. Total average deposits plus sweep repurchase agreements totaled $1,824.2 million during the third quarter of 2009, down $85.7 million or 4.5 percent from second quarter 2009. Average total deposits declined $139.9 million or 7.5 percent compared to the same period in 2008, principally as a result of deposit declines in the Company’s central Florida region (resulting from slower economic growth). The average aggregate amounts of NOW, savings and money market balances decreased $121.1 million or 13.6 percent to $771.3 million for third quarter 2009 compared to third quarter 2008, noninterest bearing deposits decreased $20.0 million or 6.8 percent to $274.0 million, and average CDs increased by $1.1 million or 0.2 percent to $692.6 million. As a result of the low interest rate environment, customers have deposited more funds into CDs, while maintaining lower average balances in savings and other liquid deposit products that pay no interest or a lower interest rate. In addition, Seacoast National joined the Certificate of Deposit Registry program (“CDARs”) on July 1, 2008, which allows customers to have CDs safely insured beyond the FDIC deposit insurance limits. This benefited our deposit retention efforts during the recent financial market disruption and provided a new product offering to homeowners’ associations concerned with FDIC insurance coverage.
The provision for loan losses was $5.2 million more than net charge-offs of $40.1 million. Net charge-offs were 10.14 percent of average total loans in the third quarter of 2009. In the first and second quarter of 2009, provisions for loan losses were $11.1 million and $3.1 million more than net charge-offs of $15.1 million (or 3.71 percent of average total loans) and $8.5 million (or 2.07 percent of average total loans), respectively. In comparison, net charge-offs were $4.4 million, $33.5 million and $9.3 million in the first, second and third quarters of 2008, respectively, and $81.1 million for the entire year. Net charge-offs during 2008 and 2009 were primarily due to higher net charge-offs of commercial construction and land development loans financing residential development, which reflected housing market declines. A downturn in residential real estate prices and sales has negatively affected the entire industry since mid-2006 and the Company began a comprehensive effort to reduce its exposure in early 2007. With timely and more aggressive collection efforts, loan sales, and charge-offs, residential construction and land development loans declined $135 million from September 30, 2008 and now represent 3.8 percent of total loans at September 30, 2009. The reduction in the Company’s exposure should reduce earnings volatility from this portfolio in the future.
The following table details the Company’s reduced exposure to large residential construction and land development loans over the past five quarters, as evidenced by loans in this portfolio with balances of $4 million or more declining by almost 82 percent from $98.3 million at September 30, 2008 to $17.8 million, or approximately 7 percent of risk-based capital, at September 30, 2009. All of the remaining $17.8 million in loans greater than $4 million are classified as nonperforming, and of the $39.8 million in loans less than $4 million, $16.4 million or 41.2 percent are nonperforming:
SBCF is in the portfolios of Michael Price of MFP Investors LLC.
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