SBCF - Seacoast Reports Fourth Quarter and Full Year 2021 Results

Full Year Net Income of $124.4 Million, Increasing 60% Year-over-Year

Strong Growth in Loan Outstandings and Record Loan Pipelines Highlight Q4 Results

STUART, Fla., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") (NASDAQ: SBCF) today reported net income in the fourth quarter of 2021 of $36.3 million, or $0.62 per diluted share. Fourth quarter 2021 results represent an increase of 58% compared to the third quarter of 2021, and an increase of 24% compared to the fourth quarter of 2020. For the full year 2021, net income was $124.4 million, or $2.18 per diluted share, an increase of 60% compared to the full year 2020. Adjusted net income ¹ for the fourth quarter of 2021 was $36.9 million, or $0.62 per diluted share. Fourth quarter 2021 adjusted results represent an increase of 26% compared to the third quarter of 2021, and an increase of 20% compared to the fourth quarter of 2020. Adjusted net income ¹ for the full year 2021 was $135.0 million, or $2.36 per diluted share, an increase of 52% compared to the full year 2020. At December 31, 2021, the ratio of tangible common equity to tangible assets was 11.09%, tangible book value per share was $17.84 and the Tier 1 capital ratio was 17.4%.

For the fourth quarter of 2021, return on average tangible assets was 1.51%, return on average tangible shareholders' equity was 14.29%, and the efficiency ratio was 53.70%, compared to 1.00%, 9.56%, and 59.55%, respectively, in the prior quarter, and 1.49%, 13.87%, and 48.23%, respectively, in the prior year quarter. For the full year 2021, return on average tangible assets was 1.41%, return on average tangible shareholders’ equity was 13.27%, and the efficiency ratio was 55.39%, compared to 1.08%, 10.10%, and 54.84%, respectively for the full year 2020. Adjusted return on average tangible assets ¹ in the fourth quarter of 2021 was 1.49%, adjusted return on average tangible shareholders' equity ¹ was 14.11%, and the adjusted efficiency ratio ¹ was 53.43%, compared to 1.23%, 11.72%, and 51.50%, respectively, in the prior quarter, and 1.50%, 14.00%, and 48.75%, respectively, in the prior year quarter. Adjusted return on average tangible assets ¹ for the full year 2021 was 1.48%, adjusted return on average tangible shareholders' equity ¹ was 13.97%, and the adjusted efficiency ratio ¹ was 52.59%, compared to 1.17%, 10.93%, and 51.63% for the full year 2020.

Charles M. Shaffer, Seacoast's President and CEO, said, "The Seacoast team delivered another outstanding quarter, generating $42.3 million in pre-tax pre-provision earnings and producing 8% annualized loan growth for the quarter. I am particularly proud of our team's continued execution of our strategic priorities, including an ongoing focus on improving our customers' digital experiences and positioning Seacoast as the leading commercial bank in Florida."

Shaffer added, "During the quarter, we continued to recruit both individual bankers and teams from upstream organizations challenged with integrating larger mergers. This high-quality talent is beginning to contribute materially to our pipelines, and we are excited to welcome these bankers to the Seacoast franchise."

Shaffer concluded, "It is an exciting period at Seacoast. Florida's inbound population growth remains strong, and our local economies are continuing to expand at a significant pace. The recruiting pipeline has never been stronger, and in the first quarter, we will introduce our clients to a much improved digital experience. When you put all of this together, in combination with our fortress balance sheet and ample liquidity, it provides confidence that the coming year is primed for disciplined growth."

2022 Acquisitions of Sabal Palm Bancorp, Inc. and Business Bank of Florida Corp.

On January 3, 2022, the Company completed the acquisitions of Sabal Palm Bancorp, Inc, and Business Bank of Florida Corp., providing an entry into the desirable Sarasota market and deepening the Company’s presence in Brevard County, Florida.

Financial Results

Income Statement

• Net income was $36.3 million, or $0.62 per diluted share for the fourth quarter of 2021 compared to $22.9 million, or $0.40, for the prior quarter, and $29.3 million, or $0.53, for the prior year quarter. For the year ended December 31, 2021, net income was $124.4 million, or $2.18 per diluted share, compared to $77.8 million, or $1.44, for the year ended December 31, 2020. Adjusted net income ¹ for the fourth quarter of 2021 was $36.9 million, or $0.62 per diluted share, compared to $29.4 million, or $0.51, for the prior quarter, and $30.7 million, or $0.55, for the prior year quarter. For the year ended December 31, 2021, adjusted net income ¹ was $135.0 million, or $2.36 per diluted share, compared to $89.0 million, or $1.65, for the year ended December 31, 2020.
• Net revenues were $91.0 million in the fourth quarter of 2021, an increase of $0.6 million, or 1%, compared to the prior quarter, and an increase of $7.3 million, or 9%, compared to the prior year quarter. For the year ended December 31, 2021, net revenues were $346.8 million, an increase of $22.4 million, or 7%, compared to the year ended December 31, 2020. Adjusted revenues ¹ were $90.6 million in the fourth quarter of 2021, an increase of $0.2 million compared to the prior quarter, and an increase of $6.9 million, or 8.2%, compared to the prior year quarter. For the year ended December 31, 2021, net revenues were $346.6 million, an increase of $23.5 million, or 7%, compared to the year ended December 31, 2020.
• Net interest income totaled $72.3 million in the fourth quarter of 2021, an increase of $1.0 million, or 1%, from the prior quarter, reflecting the benefit of strong organic loan growth, partially offset by lower recognition of fees from slower PPP loan forgiveness. For the year ended December 31, 2021, net interest income was $276.0 million, an increase of $13.3 million, or 5%, compared to the year ended December 31, 2020. As of December 31, 2021, remaining deferred fees on PPP loans total $2.4 million, which will be recognized over the loans' remaining contractual maturity or earlier, as loans are forgiven.
• Net interest margin declined to 3.16% in the fourth quarter of 2021 compared to 3.22% in the third quarter of 2021, driven by lower yields on securities and loans reflective of the rate environment, partially offset by lower levels of excess liquidity and lower cost of deposits. Excluding the effect of PPP and accretion on acquired loans, net interest margin increased two basis points, from 2.89% in the third quarter of 2021 to 2.91% in the fourth quarter of 2021. Securities yields declined two basis points to 1.57% with continued careful deployment of cash into securities purchases. Non-PPP loan yields declined 11 basis points to 4.18%, with a record $408.9 million in commercial loan originations during the fourth quarter of 2021. Offsetting and favorable was the decline in excess liquidity including a strategic decline in brokered deposits, and a further decline in the cost of deposits to only six basis points. The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 15 basis points in each of the fourth and third quarters of 2021. The effect on net interest margin of interest and fees on PPP loans was an increase of 10 basis points in the fourth quarter of 2021 compared to an increase of eighteen basis points in the prior quarter.
• Noninterest income totaled $18.7 million in the fourth quarter of 2021, a decrease of $0.3 million, or 2%, compared to the prior quarter, and an increase of $3.8 million, or 25%, compared to the prior year quarter. For the year ended December 31, 2021, noninterest income was $70.7 million, an increase of $9.2 million, or 15%, compared to the year ended December 31, 2020. Results for the fourth quarter of 2021 included the following:
  
  
  • Interchange revenue was flat compared to the prior quarter at $4.1 million, reflecting strong transactional volume despite the impact of the COVID-19 Omicron variant on spending late in the quarter. Economic conditions in Florida remain strong, and indications of consumer confidence are high.
  • Wealth management income was $2.4 million in the fourth quarter, a decrease of $0.2 million compared to the prior quarter. Higher trust-related fees in the prior quarter drove the comparative decline. The wealth management team added $64 million in AUM during the fourth quarter, and $419 million for the full year 2021, ending the year with $1.2 billion in assets under management, a 42% increase compared to the prior year.
  • Mortgage banking fees were $2.0 million, compared to $2.5 million in the prior quarter, due to slowing refinance activity and continuing low housing inventory levels.
  • SBA gains were $0.2 million compared to $0.8 million in the prior quarter, on lower saleable production.
  • Other income increased by $1.1 million in the fourth quarter of 2021, including an increase of $0.7 million in gains from SBIC investments compared to the prior quarter. Amounts recognized on SBIC investments will vary amongst periods. In addition, the sale of a website domain name obtained in a prior bank acquisition resulted in a gain of $0.8 million, which has been removed from the presentation of adjusted net income.
  • The Company recognized $0.4 million in losses in the fourth quarter of 2021 on the sale of lower-yielding securities, which were removed from the presentation of adjusted net income.
• The provision for credit losses was a net benefit of $3.9 million in the fourth quarter of 2021, reflecting continued improvement in the economic outlook, compared to a provision of $5.1 million in the prior quarter. The prior quarter included an increase associated with onboarding the Legacy Bank of Florida acquisition.
• Noninterest expense was $50.3 million in the fourth quarter of 2021, a decrease of $5.0 million, or 9%, compared to the prior quarter, and an increase of $6.6 million, or 15%, compared to the prior year quarter. For the year ended December 31, 2021, noninterest expense was $197.4 million, an increase of $11.9 million, or 6%, compared to the year ended December 31, 2020. Changes from the third quarter of 2021 included the following:
  
  
  • Salaries and wages decreased $2.9 million to $25.0 million, with the prior quarter reflecting $2.6 million in merger-related expenses associated with the Legacy Bank of Florida acquisition.
  • Employee benefits increased by $0.6 million to $4.8 million, primarily the result of higher employee health insurance costs.
  • Outsourced data processing costs decreased by $0.4 million to $5.2 million, with increases in the prior quarter reflecting expenses related to the acquisition of Legacy Bank of Florida, offset by expenses incurred in the fourth quarter of 2021 preparing for the upgrade of the online and mobile banking platform in the first quarter of 2022.
  • Legal and professional fees decreased by $1.7 million to $2.5 million, with the prior quarter reflecting $1.5 million in merger-related expenses.
• Seacoast recorded $8.3 million of income tax expense in the fourth quarter of 2021, compared to $7.0 million in the prior quarter and $8.8 million in the fourth quarter of 2020. A temporary decline in the Florida corporate income tax rate to 3.535% retroactive to January 1, 2021, lowered tax expense by $0.7 million in the fourth quarter of 2021. The tax rate increased to 5.5% effective January 1, 2022, resulting in an additional tax benefit of $0.8 million recognized in the fourth quarter of 2021 upon the adjustment of the value of deferred tax assets affected by the change. Tax benefits related to stock-based compensation totaled $0.6 million in the fourth quarter of 2021, $0.3 million in the third quarter of 2021, and were nominal in the fourth quarter of 2020.
• The ratio of net adjusted noninterest expense ¹ to average tangible assets was 1.96% in the fourth quarter of 2021, compared to 1.95% in the prior quarter and 2.00% in the fourth quarter of 2020.
• The efficiency ratio was 53.70% in the fourth quarter of 2021, compared to 59.55% in the prior quarter and 48.23% in the prior year quarter. The decrease from the prior quarter primarily reflects the impact of merger related expenses incurred in the prior quarter. The efficiency ratio was 55.39% for the full year 2021 compared to 54.84% for the full year 2020. The adjusted efficiency ratio ¹ was 53.43% in the fourth quarter of 2021, compared to 51.50% in the prior quarter and 48.75% in the prior year quarter. The adjusted efficiency ratio ¹ for the full year 2021 was 52.59% compared to 51.63% for the full year 2020.

Balance Sheet

• At December 31, 2021, the Company had total assets of $9.7 billion and total shareholders' equity of $1.3 billion. Book value per share increased to $22.40 on December 31, 2021 from $22.12 on September 30, 2021, and $20.46 on December 31, 2020. Tangible book value per share of $17.84 on December 31, 2021 increased 10% compared to December 31, 2020.
• Debt securities totaled $2.3 billion on December 31, 2021, an increase of $210.3 million, or 10%, compared to September 30, 2021. Purchases during the fourth quarter of 2021 totaled $431.1 million, consisting primarily of agency-issued collateralized mortgage obligations with an average yield of 1.48% and a duration of 3.2 years. The Company continues to take a prudent and disciplined approach to reinvesting liquidity.
• Loans totaled $5.9 billion on December 31, 2021, an increase of $19.1 million compared to September 30, 2021, inclusive of PPP loans, which declined $99.5 million during the quarter. When excluding the impact of PPP loans, loans outstanding increased $119 million, or 2% from the prior quarter.
• Loan originations were $599.9 million in the fourth quarter of 2021, compared to $744.0 million in the third quarter of 2021, a decrease of 19%. The decline in loan originations was the result of wholesale loans purchased in the prior quarter. Loan originations for the full year 2021 were $2.5 billion, an increase of 20% compared to the prior year.
  
  
  • Commercial originations were $408.9 million during the fourth quarter of 2021, compared to $331.6 million in the third quarter of 2021, and $277.4 million in the fourth quarter of 2020. The combination of economic expansion and our focus on building the leading commercial bank in Florida contributed to the increase in originations during the quarter.
  • Consumer originations in the fourth quarter of 2021 increased to $72.6 million from $66.4 million in the third quarter of 2021 and from $47.5 million in the fourth quarter of 2020. When comparing the fourth quarter of 2021 to the fourth quarter of 2020, consumer originations increased 53%.
  • Residential loans originated for sale in the secondary market totaled $69.2 million in the fourth quarter of 2021, compared to $95.1 million in the third quarter of 2021 and $161.6 million in the fourth quarter of 2020. Limited housing inventory and slowing refinance activity contributed to lower production.
  • Closed residential loans retained in the portfolio totaled $49.1 million in the fourth quarter of 2021, compared to $250.8 million in the third quarter of 2021, and $54.5 million in the fourth quarter of 2020. The third quarter of 2021 included $180.8 million in opportunistic purchases of high-quality wholesale residential home mortgage loans.
• Pipelines (loans in underwriting and approval or approved and not yet closed) totaled $483.3 million on December 31, 2021, an increase of 1% from September 30, 2021 and an increase of 60% from December 31, 2020.
  
  
  • Commercial pipelines were $397.8 million as of December 31, 2021, an increase of 8% from $368.9 million at September 30, 2021, and an increase of 139% from $166.7 million at December 31, 2020. We expect commercial production and pipelines to continue to grow as we expand into new markets and add well known commercial bankers across the state.
  • Consumer pipelines were $29.7 million as of December 31, 2021, compared to $31.0 million at September 30, 2021, and $18.2 million at December 31, 2020.
  • Residential saleable pipelines were $30.1 million as of December 31, 2021, compared to $42.8 million at September 30, 2021, and $92.0 million at December 31, 2020. Retained residential pipelines were $25.6 million as of December 31, 2021, compared to $35.4 million at September 30, 2021, and $25.1 million at December 31, 2020.
• Total deposits were $8.1 billion as of December 31, 2021, a decrease of $266.6 million, or 3%, compared to September 30, 2021, and an increase of $1.1 billion, or 16%, compared to December 31, 2020.
  
  
  • Total transaction account balances increased $34.1 million, or 1%, quarter-over-quarter, and at December 31, 2021 represent 62% of overall deposit funding.
  • Money market deposits decreased by $300 million to $1.7 billion, including a $189 million strategic decrease in brokered deposits. The majority of these brokered deposit balances returned to the balance sheet in January 2022.
  • The Company manages excess liquidity on the balance sheet through participation in programs with third-party deposit networks. Through these programs, the Company can offer its customers access to FDIC insurance on large balances with attractive terms, and the Company can retain or sell, on an overnight basis, the underlying deposits. At December 31, 2021, the Company had sold, on an overnight basis, $228 million in deposits compared to $233 million at September 30, 2021, and $113 million at December 31, 2020. These deposits are not included in the consolidated balance sheet.
  • The overall cost of deposits declined to six basis points in the fourth quarter of 2021 from seven basis points in the prior quarter.
  • As of December 31, 2021, deposits per banking center were $154 million, compared to $138 million on December 31, 2020. Two new branches were opened during the fourth quarter of 2021 in Broward County, one of the fastest growing markets in Florida.

Asset Quality

• Nonperforming loans decreased by $2.0 million to $30.6 million at December 31, 2021. Nonperforming loans to total loans outstanding were 0.52% at December 31, 2021, 0.55% at September 30, 2021, and 0.63% at December 31, 2020.
• Nonperforming assets to total assets were 0.46% at December 31, 2021, 0.47% at September 30, 2021, and 0.59% at December 31, 2020.
• The ratio of allowance for credit losses to total loans was 1.41% at December 31, 2021, 1.49% at September 30, 2021, and 1.62% at December 31, 2020. Excluding PPP loans, the ratio of allowance for credit losses to total loans at December 31, 2021 was 1.43%, compared to 1.54% at September 30, 2021 and 1.79% at December 31, 2020. The decline in coverage reflects continued improvement in the economic outlook and sustained strong portfolio performance.
• Net charge-offs were $0.6 million, or 0.04%, of average loans for the fourth quarter of 2021 compared to $1.4 million, or 0.10%, of average loans in the third quarter of 2021 and $3.1 million, or 0.21%, of average loans in the fourth quarter of 2020. Net charge-offs for the four most recent quarters averaged 0.06%.
• Portfolio diversification , in terms of asset mix, industry, and loan type, has been a critical element of the Company's lending strategy. Exposure across industries and collateral types is broadly distributed. Excluding PPP loans, Seacoast's average commercial loan size is $479 thousand, reflecting an ability to maintain granularity within the overall loan portfolio.
• Construc tion and land development and commercial real estate loans remain well below regulatory guidance at 21% and 177% of total bank-level risk-based capital, respectively, compared to 21% and 175% respectively, in the third quarter of 2021. On a consolidated basis, construction and land development and commercial real estate loans represent 19% and 162%, respectively, of total consolidated risk-based capital.

Capital and Liquidity

• The tier 1 capital ratio was 17.4% at December 31, 2021, compared to 17.7% at September 30, 2021, and 17.4% at December 31, 2020. The total capital ratio was 18.2% and the tier 1 leverage ratio was 11.7% at December 31, 2021.
• Cash and cash equivalents at December 31, 2021 totaled $737.7 million, a decrease of $490.0 million, or 40%, from September 30, 2021, reflecting the impact of securities purchases and strategic liquidity management activities.
• Tangible common equity to tangible assets was 11.09% at December 31, 2021, compared to 10.62% at September 30, 2021, and 11.01% at December 31, 2020.
• At December 31, 2021, the Company had available unsecured lines of credit of $165.0 million and lines of credit under lendable collateral value of $1.6 billion. Additionally, $1.9 billion of debt securities and $614.2 million of residential and commercial real estate loans are available as collateral for potential borrowings.

Fourth Quarter and Full Year 2021 Strategic Highlights

Capitalizing on Seacoast’s Early Commitment to Digital Transformation

• Seacoast is utilizing best-in-class technology and our extensive digital competencies to support our growth initiatives. An upgraded online and mobile banking platform, launching in the first quarter of 2022, unifies the user experience with new functionality and features that are consistent across all devices. This new platform will also deliver a range of new digital products and services. Delivering an enhanced digital banking experience for both consumers and businesses complements our exceptional branch, ATM, and telephone banking services to deliver a very competitive value proposition.
• Routine transactions continue to migrate from the branch network to lower cost channels, including to digital offerings and to our recently upgraded ATM network. In the fourth quarter of 2021, 61% of all consumer deposit transactions were completed outside of the branch network, an increase of 10% compared to the same period in 2019.
• Technology continues to help our teams outperform and provide outstanding service to our customers. A significant investment in our digital commercial loan origination platform in 2021 has accelerated our speed to market, providing a quicker renewal process and a streamlined workflow for bankers and underwriters. Customers have also benefited from our automated PPP forgiveness solution integrated with our existing technology infrastructure.
  

Driving Sustainable Growth and Expanding our Footprint

• Our balanced growth strategy includes organic growth initiatives across the state, including recent entries into Northeast Florida and Naples/Ft. Myers with key additions to our commercial banking leadership and teams. In 2021, we added 20 experienced bankers in the state’s most dynamic and fastest growing markets. We expect to continue to invest in well known seasoned bankers in the coming year.
• Seacoast continues to evolve our branch footprint in order to redirect capacity into attractive growth markets. In alignment with this strategy, four banking center locations were consolidated in 2021, and two new branches opened.

Scaling and Evolving Our Culture

• In 2021, Seacoast customer satisfaction scores exceeded industry benchmarks, a reflection of best-in-class branch and call center customer service experiences. Seacoast index scores were 110% compared to the industry benchmark for branch customer service and 104% compared to the industry benchmark for call center support according to a leading data analytics and consumer intelligence company.
• In November, Seacoast Bank was named one of the Best Banks to Work For in 2021 by American Banker. This is the second consecutive year that Seacoast was selected for this award. In July, Seacoast Bank was named to the Orlando Business Journal’s 2021 Best Places to Work. These distinctions recognize an outstanding leadership team that continually puts its employees first and prioritizes a collaborative and inclusive workplace.
• Seacoast Bank was named among Forbes Magazine’s 2021 America’s Best-In-State Banks and Credit Unions. Seacoast has the distinction of being the only Florida-headquartered community bank to make the list. Forbes partnered with market research firm Statista to survey nearly 25,000 people in the U.S. about their banking relationships. Banks and credit unions were rated on overall recommendations and satisfaction, consumer trust, terms and conditions, branch services, digital services, and financial advice. Only 2.7% of all banks made the list.
  

OTHER INFORMATION

Conference Call Information
Seacoast will host a conference call on January 28, 2022 at 10:00 a.m. (Eastern Time) to discuss the fourth quarter and full year 2021 earnings results and business trends. Investors may call in (toll-free) by dialing (800) 774-6070 (passcode: 7241 761; host: Charles Shaffer). Charts will be used during the conference call and may be accessed at Seacoast's website at www.SeacoastBanking.com by selecting "Presentations" under the heading "News/Events." A replay of the call will be available for one month, beginning late afternoon on January 28, 2022, and can be accessed via a link at www.SeacoastBanking.com under the heading “Corporate Information,” using the passcode 50264428.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast's website at www.SeacoastBanking.com. The link is located in the subsection "Presentations" under the heading “Corporate Information.” Beginning late afternoon on January 28, 2022, 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.

About Seacoast Banking Corporation of Florida (NASDAQ: SBCF)
Seacoast Banking Corporation of Florida (NASDAQ: SBCF) is one of the largest community banks headquartered in Florida with approximately $9.7 billion in assets and $8.1 billion in deposits as of December 31, 2021. Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at over 50 full-service branches across Florida, and through advanced mobile and online banking solutions. Seacoast National Bank is the wholly-owned subsidiary bank of Seacoast Banking Corporation of Florida. For more information about Seacoast, visit www.SeacoastBanking.com .

Cautionary Notice Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning, and protections, 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, loan growth, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls, tax law changes, new initiatives and for integration of banks that we have acquired (including Florida Business Bank and Sabal Palm Bank) or expect to acquire, as well as statements with respect to Seacoast's objectives, strategic plans, expectations and intentions and other statements that are not historical facts, any of which may be impacted by the COVID-19 pandemic and any variants thereof and related effects on the U.S. economy. 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, assumptions, estimates and intentions about future performance 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.

All statements other than statements of historical fact could be 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", "plan", "point to", "project", "could", "intend", "target" 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 and the adverse impact of COVID-19 (economic and otherwise); governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve, as well as legislative, tax and regulatory changes, including those that impact the money supply and inflation; changes in accounting policies, rules and practices, including the impact of the adoption of CECL; our participation in the Paycheck Protection Program ("PPP"); 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; uncertainty related to the impact of LIBOR calculations on securities and loans; changes in borrower credit risks and payment behaviors; changing retail distribution strategies, customer preferences and behavior; changes in the availability and cost of credit and capital in the financial markets; changes in the prices, values and sales volumes of residential and commercial real estate; our ability to comply with any regulatory requirements; the effects of problems encountered by other financial institutions that adversely affect us or the banking industry; our concentration in commercial real estate loans; inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions; the impact on the valuation of our investments due to market volatility or counterparty payment risk; statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally; the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets, successfully acquire and integrate desirable financial institutions and realize expected revenues and revenue synergies; changes in technology or products that may be more difficult, costly, or less effective than anticipated; our ability to identify and address increased cybersecurity risks; inability of our risk management framework to manage risks associated with our business; dependence on key suppliers or vendors to obtain equipment or services for our business on acceptable terms; reduction in or the termination of our ability to use the mobile-based platform that is critical to our business growth strategy; the effects of war or other conflicts, acts of terrorism, natural disasters, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions; unexpected outcomes of and the costs associated with, existing or new litigation involving us; our ability to maintain adequate internal controls over financial reporting; potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the risks that our deferred tax assets could be reduced if estimates of future taxable income from our operations and tax planning strategies are less than currently estimated and sales of our capital stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes; 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.

Actual results and capital and other financial conditions may differ materially from those included in these statements due to a variety of factors. These factors include, among others described above, macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the duration and severity of the impact on public health (including the potential negative impact of various state and local policies enacted as a result of the pandemic and the vaccines’ efficacy against the virus, including new variants),, the U.S. and global economies, financial markets and consumer and corporate customers and clients, including economic activity and employment, as well as the various actions taken in response by governments, central banks and others, including Seacoast, and the precautionary statements included in this release.

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, 2020 and quarterly report on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 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 www.sec.gov .

¹ Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.