SBCF Seacoast Banking Corp. Of Florida

Chuck Shaffer CEO
Dennis Hudson Executive Chairman
Tracey Dexter CFO
Michael Young SunTrust
David Feaster Raymond James
Steve Moss B. Riley FBR
Christopher Marinac FIG
Stephen Scouten Piper Sandler
Call transcript
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Welcome to the Seacoast Fourth Quarter Earnings Conference Call. My name is Richard, and I’ll be the operator for today’s call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. [Operator Instructions] Before we begin, I have been asked to direct your attention to the statement contained at the end of the press release regarding forward-looking statements. covered issues Securities forward-looking their and are to discussing meaning within comments be of intended the meaning of Exchange be will that statements constitute the today that Seacoast act. the within Act, and recorded. this being Please note is that conference I over Mr. the call turn will now to Shaffer, Chuck and of CEO President Bank. Seacoast Mr. begin. may you Shaffer,

Chuck Shaffer

all you this us Thank morning. joining for

this Hudson, be the Richard Officer. earnings Credit slide XXXX Chairman; we our found Chief Jeff As at quarter Financial provide Denny Policy; Director Chief comments, Officer; Lee, fourth we Credit morning With Dexter, Tracey Chief and me which Analytics our and Executive David will can is of reference Officer; Raiford, deck, Houdeshell, Digital

Executive Chairman. know speak started, of our our to all your professional our I get associates, this I of like you for wishes best phase we expressing of you community, Denny and I'd as our as enter Directors on sincere and Board congratulate and Before role to his career. new next

the shareholders last has for years, value created and tremendous delivered institution led both incredible, have innovative customers. an that For and you XX

and has it positive You, your all guidance, communities wish associates helped on that we tremendous congratulations of impact shape fabric you uncle our want thank customers, over our you grandfather, for mentorship years. their had as to and the I had families. tremendous our you friendship to and steered has an the my serve, value and your sincere and have father, institution that before

you and road again, impact that over career Denny, both Congrats I turn And leadership call and we on my speak done. filled opportunity. us for all. of ahead lives to Thank are I your all you've helped with teammates been and our the I'll excited you. many for and know shape the believe is incredibly professional of us has You

Dennis Hudson

Chuck. Thanks,

we've be been defines XX team said, And gave themselves For served accomplishments associates have couldn't as the so as much others over Seacoast and Perhaps culture including many our been forged that of have along as way the a build the has to CEO. to along I've shareholders my It those honor a contribute as gratifying member. into in the be role. indeed been XX able to years, who become. years a you customers, company. leaders CEO have that to now most pleased us more you I step of what great

well other and role into you've held, bring energy as extraordinary will focus on value that creating roles that the as You demonstrated win consistently will shareholders. an and the you've for

Chuck Shaffer

you, Denny. by by Thanks the continue producing another to my I on to growing Thank share opened customer Seacoast associates thriving And pandemic. excellent quarter, impressive value expressing a words. for of top results, kind the in quartile Seacoast team satisfaction backdrop the and for turning driving relationships, creating The Florida of appreciation despite focusing market for now quarter returns generate marketplace. best-in-class a customer the

an with earnings the of share XXXX, grew book per company XX%, tangible per generated on value adjusted share XX% an $X.XX, ratio annualized efficiency During basis the on finished $XX.XX. to an below basis quarter, and of

fortress we capital and balance generate and capital liquidity quality, strong, bolstering growth, continue to all meaningful Asset are our sheet.

businesses up through Our Last economic strategic the provide most the X Florida's ratios an governor recovery state's as opening to Phase restrictions. recovery. period which than no flexibility capital fully Florida's more will ultimately are of peers, plan, our quarter, and of with substantial moved coming move we

the the round and northeast a high to state's supported potential recovery, stimulus encouraged have acceleration another We stimulus by third net our migration business relocations. We customers an individuals corporate primarily the to and worth return round shortly. by of the full we're seen economic operation for many and Florida, of of from federal

of PPP We a another and seeing strong are demand round second are for round loans. PPP down heads of on

businesses. evening, loans As we Florida's X,XXX Wednesday million applications had of taken or for a assist to $XXX over

to of We COVID's the maintain in conservative path. phase a uncertain stance continue

flat ACL we and to Our with severe weight ACL our a a quarter-over-quarter, coverage downturn. remained continue towards more model

on As materializes our year, the modeling Tracy recovery of coming have will in begin more in challenge and will this comments. prepared evidence the to we assumption, ACL details the

value be creating We disciplined, conservative and on focus credit maintaining in our continue customer vigilant to culture our relationships. generating

facilities will with totaling on on yield from fourth the from loans of adjusted saw accretion of and in impact we loan quarter passing are to price our in state, We that competition increased prior and do are not on with return, production at line credit deals risk million, an not loans, impressively, We quarter, $XXX that match. appropriate acquired levels the commercial cases, increased pressure and volumes the lower the the price PPP despite rates. seeing, removing some reopening in

the growth on loan half the in economic expect take continues back assuming levels to pre-COVID XXXX, return to state. recovery We hold to of the

loans prior also asset status metrics NPA asset and improved. ratios quarter. criticized remain strong and quarter-over-quarter, ratios improving classified nonaccrual Our and quality with from the

loans portfolio deferred million. X% $XX.X down is of Our or to loans,

improvement year in year To in strong wealth continued almost $XX in encouraged We on XXXX, a fee-based pandemic. sets the portfolio's year, business quarter, the are AUM asset at strong, performance impressively up entering well in had with mortgage by building The the to quarter the conclude, management. And $XX generated despite a and million wealth results providing income. pleased breaking of record million new year, was recording and generated $XXX despite the and deferred mortgage the negligible in impressively, company the revenues a focused team XXXX. quality, AUM million. in XXXX the We in management ending fee amount the remarkable bringing full banking

driving greater continue efficiently more delivering services competition. remains than productivity and our increasing experiences, disciplined value across a by improving and by to goal share the digital on in our growing franchise Our to markets market customer manner relationships, creating products focusing

pandemic markets of growth through turn strategy, our across As opportunities believe to our this I'll over be state now the down winds to disciplined who results. financial walk year, and the Tracey, throughout will the continue key there'll we to call acquisition Florida.

Tracey Dexter

you, results. fourth Thank attention Good to your morning, quarter Chuck. everyone. Directing

with Slide X. start Let's

quarter For basis, a on on to from the share earnings and the earnings in X.XX% On an tangible ROTCE. adjusted isolated charges, per consolidation ROTA, adjusted $X.XX quarter. X.X% tangible were a per return and and which assets, fourth quarter equity. fourth M&A XX% on third GAAP XX.XX% we adjusted On basis, basis, common results $X.XX GAAP on excludes return a was adjusted reported share increased $X.XX, expense an basis,

$XX.X an common our quarter’s per to target equity XX% value our worth As would tangible increase last grow it's share equity asset ratio $XX.XX XX.X%, from was an if Tangible on be on we of to efficiency that continue book base, return to XX.X% adjusted $XX.XX, mentioning increasing originations tangible XX adjusted of this quarter, Commercial The in basis to a quarter. million X%, annualized up capital positive to basis the the decline increased of ratio from the an the compared common of X illustrative fourth quarter last was XX.X%, third increased to impact in in quarter. from an points basis. XX.X% tangible cost had prior quarter, quarter. to the was basis on in quarter margin, fourth during compared adjusted quarter. XX compared $XXX.X a to Lower third XX.X% with and our on XX.X% the points to deposits million, prior

their worked to year borrowers AUM support the strong with only in $XX.X original qualified Nearly build While loans. modification strength through impressive just And that year-over-year those of accommodations reflects on to results growth that loans navigate total the to management a remain of wealth with to continued The throughout program. of of revenue. growth, we've some this to well maintain closely have we difficult pandemic, can our payment that borrowers team continue terms. At a the conservative X% on and AUM kind million payment That's demonstrate our saw pandemic all total their end, economy. million posture, loans XX% businesses year. provide $XXX help continues resumed

Lastly, is northeast. Florida. from continues in States relocations, warm footprint the Seacoast back added its and taxes, flights lower showing corporate will affluence United primarily the and felt change particularly state from economy northeastern South The easy to of population to the Florida benefit slide tremendously we and remarkable a benefitting Seacoast weather to The Florida shift the expand. the throughout as

loans dropped $X.X margin increase, prepayments we by lower X.XX% the with made increased million decrease $X.X both lower the PPP offset in and deposits, X, decreased to interest fee recognition that from Turning are in was the be the purchase result X on relates to excess basis in yields A align forgiveness, loan our the contractual excluding and yields the the loan quarter. of also to $X.X of will $XX.X still million. points. additional resulted securities securities elevated the PPP net fees. benefit in higher into in to some that of in over revenue, and of or XX in net primary The in to driver, by points million prior of loans and of of of the PPP liquidity continuing change and fourth effect Slide life, portfolio, remaining securities quarter as securities deferred the recognition recognized the million The which $X.X sooner deployment fees with loans, was fourth Of We have which the the forgiven. contractual to discount, the interest loans maturity PPP sequentially, quarter accretion basis began X.XX%. million partially costs of income PPP

the continue quarter from effect of in cost XX the XXXX, loan XX the the to acquired third and of the margin basis to purchase accretion basis points XXXX. discounts expect In the points deposits quarter. fourth interest first on in decline quarter portfolio, in to loans net on compared was of We

of accretion Excluding point the discounts, to and X PPP effects basis yields loan purchase X.XX%. of increased

PPP of net the continue Looking decline modestly and to interest XXXX. half in accretion excluding we expect ahead, loan will purchase margin first

continue of we of to expect effect lower funding offsetting Given the though, during the rates excess effect see period. to that liquidity,

quarter, to securities $X prior an from the increase $X.X non-interest was or million, the income X% of $XX.X Slide gains quarter. X, Moving and year a or million previous excluding decrease million from of XX%

low with real from on housing the Florida highest $X.X delivering to and million and business benefiting quarter also interest rates. see consistently million $XXX and migration a under The banking with our team, in strong million said, new capitalize foundation is from a mortgage a the AUM $XX we've quarter total That to our million. activity. and is on record teams continues housing refinance $X.X strong estate fourth market, trends in quarter. strong the revenues management, we low revenue market the service population Florida with in do rates And professionals, remarkable of was in of local third That slowdown Our built wealth have levels. assets additions experienced for who management fourth down bringing

results impressive quarter. wealth driving the debit to Both an the million, was deposits During million year. year Service by third of AUM compared record average interchange full business achievement. record the customers to cards the new at to their million, and balances. maintain the customers an In increased charges consumers Interchange on accelerated team continue a Seacoast $X.X pace, million full $X.X revenue higher for XXXX, XXXX, in third $XXX added quarter. used compared $X.X

income the in first non-interest Looking quarter million. a ahead, noting enter to of we quarter, mortgage $XX $XX the million we first be approximately range expect lower as the to pipeline in

expense, of originations. million Moving and from adjusted and accelerated quarter. professional the $XX quarter, reflects on of marketing improved million. prior compared all million below of changes million totaled $XX increase an with million fees million other recovery decreased we expenses during expense and Addressing higher also incurred economic one-time our includes an of just impact non-interest expenses and on legal $XX.X quarter properties. relevant foreclosed of to lower $X.X benefits reserves expense, property in XXXX. third for quarter. the The decreased decrease a expense expense and loan a $X.X unfunded largely in deferrals by production two segments. salaries other declines Other to to recorded value Legal related a X, reflecting release Slide commitments, $X.X the range the the lower due adjusted to forecast mortgage certain during result of associated guided in reflects compared Also decrease to $X.X third of costs commercial OREO Within offsetting the the impact basis, million,

focus and on our ahead, Looking in to cost and investments operational expect key talent technology, efficiency. maintain of banking, we commercial discipline areas acquisitions,

assets $XX.X first to of the amortization million excluding to intangible quarter of $XX.X in be We range expenses, the expect million.

taxes. the seasonal first reminder, a quarter associated the of return payroll As expenses with includes

fourth Moving to XX.X%, XX%. year the ratio to adjusted efficiency XX, below the exiting quarter Slide in the decreased

ahead, make investments growth driving key talent, Looking banking of we to in commercial and expect moving areas technology forward.

XXXX expect ratio We the be year efficiency low the full in XXs. to

$X.X to XX% XX, increased Slide to full year billion. Turning loans for outstanding the

Excluding fourth in of in including of $XXX originations in $XX to the or quarter-over-quarter PPP to million increase X% Loan $XXX million million, loans, total outstandings the by an $XXX quarter XXXX. increased decreased quarter, million compared during fourth the third quarter commercial.

processing economy. fourth PPP started on the forgiveness of as increased relationships the maintain to fourth $XX our can loans of were underwriting, We we're and loan to remain a On focused strength pandemic our quarter, that XXXX, conservative approach PPP quarter the the in and loans, we to continue million SBA forgiven. demonstrate seeing applications demand, navigate during

by As now week, forgiveness is to-date of $XXX SBA this over million. approved the

to As pipeline again X,XXX know, the loans for end first far, you over $XXX million for various and consumer both round. record from of million quarter’s the have in refinance was PPP of million the first with The residential to in activity borrowers The the process and prior compared slowing in million borrowers at accommodating and PPP stages trends. second quarter, quarter. pipeline time far. commercial for million increased participated the application Thus draws program last had in seasonal the a historical to reflecting $XXX in In decrease $XX third million, from who January, so $XXX line borrowers we new compared pipeline quarter of expected $XXX fourth approximately funding $XX levels. opened

competitors. high to our purchase continue positioned activity, continue is well Our to and outperform benefit levels markets from of team to

XXXX. the expect loans the second and on in accretion economic takes excluding discount PPP growth half slightly hold, The recovery forward, X.XX%. Looking to increased return we of assuming levels pre-pandemic to loan to purchase of yield

slowly environment. in in assuming to add yields XXXX, yields, the lower the loan with no expect decline half change We modestly of first on rate

Turning XX, levels highlighting the exposure well regulatory diversity concentration and our Slide of below to guidance.

exposures that our this posture prudently. to confident our conservative is in are us We established continue intend and serving environment, we well to manage credit

occupied estate loans by classes. in lower of Approximately portfolio, of with is equity XX% of our borrowers producing broadly meaningful the commercial of by commercial represents across comprises real portfolio Stabilized commercial XX% is distributed is The have asset investments, and XX%. secured estate estate portfolio real portfolio estate Our and residential commercial of value. income XX% the various loan estate real real real represents outstanding, LTV owner XX% the their secured to that average portfolio.

have XX, loans capital, to are continued lower construction most consistently have and group. managed portfolio At and than levels guidance. For XX% to years, regulatory loans peer our land and Those keep of December real we commercial estate our development risk-based XXX% in respectively. that below well and represented decline

is categories, an broadly loan $XXX,XXX. size of Our commercial across with and loan under diverse just distributed PPP average excluding portfolio

Since at Turning payment Slide along with our customers short the industry, XX, term March, loans to payment for we last deferral look entire a programs. with with accommodations. supported

billion $X.X these from accommodations level XXXX progressed, majority contractual with payments, XX. to $XX.X has dropped of borrowers December XX loans at nearly As large the at making of million successfully and the resumed June

exposure in office of including position slide critical which aggregated the our we industries our to detailed believe at with Diversification a office medical, is accommodations the occupied, the of portfolio size XX%. declined owner category LTV Turning remainder portfolio XX% is independent of payment is look in in and have category from XX, portfolios million primarily continues payment us producing at more environment. has office professional AD&C like to properties. and professionals. portfolio largest at been collateral as loan The end The average and and office our third types strategy, That CRE this other only a active classified accommodations in $XXX,XXX, investment this Loans million. type CRE the is our for accommodation. owner across portfolios, accounting, the occupied year-end building practices, buildings. $X average construction well has quarter. in this totaled of income of comprised in The is $XXX tenant stabilized engineering including reported we

to segment of borrowers fourth have quarter. return accommodations pleased compared with the provided as million, loans. were second centers had Outstanding end making of largest with the payment that those the estate, to third case the is with are accommodations quarter ability deferral X% retail million very has Our our payment and every end retail $X.X shopping the only category representing businesses, the real of typically multi $XXX to year. only payment in contractual nearly total local dropped during assisting of the in day We're positive and many of in at impact the efforts to payments. These

the of portfolio our of the payments, theatres know, in mall does contractual average and the also returned with been only pleased portfolio reflecting you movie size and to value entertainment We've $X.X the strength borrowers restaurant retail of and loan making the loan not secured majority across with our average of include real very hotel our outlet is are XX%. The The million an primarily regional the average retail is the XX%. portfolios, performance LTV malls, As complexes, venues. and portfolio. or where have restaurant with operators lower hotel estate, large leverage portfolios to

no from benefit weekend Our hotel and is travel, arteries majority and our where beachside diversified. restrictions. is The exposure of that are there well occupancy major interstate exposure along

not center or theme little We do facilities. conference exposure finance and resort park in have locations

loans. is have to In none under modest and $XX owned financial commercial exposure loans, portfolio, payment look million end loans worth largest payment quarter detailed with marine a fourth Turning holding million this of accommodations. the third of at for total and to individuals quarter. the financial end Slide from XX, in net active and and of commercial for a The $XX vessels, accommodations by high at the which our at more declined total X% for represents companies the aircraft of the

and to XX, the XX slide securities Turning portfolio. for

basis prepayments by at decline an average the yield life of that points. purchases Market additional faster bonds have grade on and down increased, million. down We're in this mortgage made securities, and agency gain years. in bringing yields we'll rates backed roll mortgage $XX.X securities, X.X curve X.XX% XX over We an extension approximately average add With investing portfolio backed of across values carefully are on of little primarily four year the quarter unrealized risk the net an the to period. and

we to in will first forward low much to how expect cautious Looking fourth back quarter, the portfolio duration we're given invest approximately to $XXX to put the being environment, million, and quarter and yields cash similar historically million $XXX with the rate activity. on work this to

XX, quarter-over-quarter points. lower million the quarter, increase an X XX and the an third deposits to billion, basis of XX% by of Slide $XX to year-over-year. $X.X Turning deposits $X.X or was points to outstanding were basis and increase XX billion Compared cost of

deposits to decline first Looking ahead, to cost we quarter of the XXXX. in the expect continue of

losses, the X.X% quarter. cycle. includes estimate that credit excluding down the of some our lifetime reflects prior loans PPP loans, loss is Moving credit under Coverage to through on allowance CECL expected expectation from which into will Slide our the losses in slightly X.XX%, migrate XX, for

allowance. have of over that as under earned in prudent $XX.X what to note, loans that Also of life separate Note, is $X.X we have be those unfunded discount In of addition commitments the also a million obligations loan reserve to a purchase an our million. we adjustment yield. level of feel will

XXst. of primarily of non-performing $X.X loans, charge-offs of to capital charge-offs by fourth Turning of comprised total XX% number decreased quarter individually those small at quality, Slide of commercial loans level were The based representing total asset $XXX,XXX. million, in $X.X X.XX% were $XX.X XX on December the and Criticized This million. of million exceeded to a loans risk loans. none still was

third borrowers quarter. to of upgraded we ability several full to out loans criticized payments, deferrals in the categories quarter the the As able were fourth expired to were and see demonstrating return making

XX, appropriately loans X.XX%. We continue and credit and are excluding allowance approach to The is down for coverage slightly million PPP at remain an $XX.X is to allowance taking to overall conservative cautious losses December grading.

We have guarded continue economic and the timing outlook recovery. to a of the of full view a

estimate SX be period. of allowance way still where more our recession over could to moderate the sustained So scenario, a the characteristics the extended significant downturn gives Moody's

revisit this assumption to continue in of evidence will XXXX, recovery We the as materializes.

and the X ratio on increasing equity increased ratio the per standing strong, X% based XX.X%. to of The is XX.X% capital resilience. XX, quarter. we annual over annualized. adjusted be driving risk growth sheet per have commitment our rate asset value consistently share XX, to Turning over fourth wrap peer Slide the XX, prior highest and Return in back the of December Tangible our positioned of XX% a common ratio maintaining each on was quarter, To $XX.XX, group. fortress to the an looking creation. share been to a third at when today, And us Slide basis. of Tier compounded on to tangible end was achieved capital beginning equity at in shareholder our tangible balance book continues book XX% to long position has nearly the an value for increase from common was XXXX up has tangible The capital the among XX%, tangible XX% and quarter, value total

your to posture We Chuck. call established, I'll that recovery our to will conservative back the We are as well over look efficient progresses. and the operating turn questions. serve confident model forward us

Chuck Shaffer

Tracey. think for Q&A. we're you, ready I Richard, Thank Good.


you. Thank

question ahead. Instructions] online We [Operator will Young. now Please comes Our Michael go begin Mr. the from question-and-answer session. first

Your line is open.

Michael Young

morning. good Hey,

Chuck Shaffer

Good Michael. morning,

Michael Young

company congratulating an with I kicked I Denny guess welcome. and years prematurely is off one last guess I call, XX encore with

together. a blood feels family with probably I point And long not that he's So at Chuck, like have all member, even though you know congrats worked how he this again, Denny.

on wish miss best So on regular future. And you the the we'll you a in calls hearing these obviously basis.

Dennis Hudson

Thank been It's the terrific you, to years. get working over to Michael. you know with It's you. great

So that. thanks for

Chuck Shaffer

Michael. Thanks,

Michael Young

And of on problem capital hands valued the with levels in wanted announced high, are capital guys you December, and being company the But levels, pretty of very Maybe you well. saw you're leaving start just the class deferrals share in to so a kind buyback, there. come high the good Chuck, high obviously stocks down. now once

just do materializing? deploying So the the absence view you M&A of how kind capital from here of maybe in

Chuck Shaffer

Yes. for Happy question. to address it, Michael, the and thanks

Our very capital remains view on similar.

are period. it's an in We still still a pandemic, uncertain

And where includes so being which we'll That with we're today. buybacks, approach and dividends, to the disciplined the take to capital our we're comfortable are very continue in. options said, environment to various capital levels organic revisit And for a we'll M&A. continue

makes an we'll use always, sense for for continue to earn the coming think year. basis. preference that forward, capital here organic at, shareholders. the back various continues on when it look we move And continue use. all recover particularly we'll growth the components, at something And we'll M&A, both we to dividends, it'll Our including and to buybacks, highest over use as it look revisit the as is to on that's be and economy we'll continue the And opportunistically

Michael Young

it guys kind purchase. have do on a however, whatever higher through in on Obviously, how to progression just a XXXX? was to want with we a view to about maybe you And see as kind kind or the of how securities be NII although just NII PPP you But are dollars. basis going little ex-PPP the NIM talk I core can you But also on is know much and/or dollars ask easiest. move stability hard to of Okay. maybe forecast, it net-net, wanted of

Tracey Dexter

Yes, can start. I

recovery have to see growth we curve said if will second to The beneficial in very We continue that an the low also do variability purchase increase rate in also expect the in be deposit reminder, and NII. in that NII. do would affect significant decline later if costs. will PPP, expect as the this discount of expand remain margin loan the the But we economic be We year in curve. we And a as half year margin. the you to beneficial supporting to

Chuck Shaffer

mention high quick, and just Yes, just have at we quality Michael. real the you base. the benefits of one And the Seacoast I'll know, of is deposit

nature XX keep would low, point we And to growth materialized with cost the able relationship long this on that the at recovery, of could happened see basis given cost steepen and widens yield backside of if as the franchise backside of primarily have margin margin loan always as begin recovery. deposits yield for funds, like growth positive out, we ideally, a see us, of transactional curve the duration. What's that positive happens there's recover. the to of franchise. historically and the of ahead the outlook franchises ours, that's and We what's there story on There's the curve we quality have we're happen, high think an expansion recovers to loan

Michael Young

pandemic and in and from just you maybe a probably relatively states wanting of implications fairly last second path to one has last benefiting cautious guess, positive were And the kind kind forward. Okay. on I the of Generally, of, see year, than of been growth. in loan I more half given know tourism, many kind me disproportionately. Florida all open for just other

call high that single that do digit, aggressively, to we'll back optimism historical, that of growth you new it low you kind making of digit loans more and as get confidence So, double begin kind rate? to see

Chuck Shaffer

We're senior we're is thoughtful to that think we this loan and deterioration. new pandemic We've looking as we the period. I way cautious of ability Yes, the now which when Florida we population, navigate is to requests, are have open. being That thinking being a certainly the we're seeing still And look the have recovering. at all development. for navigate businesses about all borrowers XX% our vaccinated positive navigate of said, our ability further and

the recovering. through going could that half. So distancing said, state. in of it some the confidence still first the strong is back relatively things half social the year us still the move on that we and It's are be being gives That as

and And period rate we expect prior were $XX the many out. in we quarterly so to that to back. into things can quarter quarter the million we we do come fourth to million from first $XXX to opportunities don't slower. to see the look start to fourth pandemic, the as third back that moving out seeing seasonally, were from beyond is But quarter as able see third during get come as back when expect the first and normally run up you second, we quarter quarter, to And the we

Michael Young

Okay. Great, thanks.

Chuck Shaffer

Michael. Thanks,


Thank you.

Our online comes Please Mr. go David ahead. next question Feaster. from

David Feaster

good morning, everybody. Hey,

Chuck Shaffer

morning, Good David.

David Feaster

to would existing just CRE over the guess clients focus more It just just wanted of this And forward? new lumber given first I versus production. I a maybe guess, a much the do contribution PPP from of dig from brought curious, the bit production breakdown maybe just loan that the the pipeline. you C&I I pipeline between great how was the just in you production and you going composition think then was C&I, expect clients quarter. commercial hires and or from programs? I of into the all, there

Chuck Shaffer

customers CRE to It real would about done that C&I and current occupied I more navigate owner business of There well it's think a focus professional balance into the more is bringing estate, us. that leans past given But a that liquidity, know have done showing but of well the CRE primarily companies ability that commercial strong owner-occupied heavily sort operated is David lean are sheets, in clear portion qualified, high way to mix. again, nature the back tends a it's It's practices the [ph] owner and we've we we it, past. mix, into the The within on. opportunities to and pandemic. to

David Feaster

the you increases? Okay. I bit pulse your year. some in willing some we start then pulse of your And they’re maybe of just Have here. into investing seeing curious start or curious of nervous client CapEx, guess the that as clients I as expansionary kind guess, growth Just found and of here still a utilization they’re accelerating to next kind head

Chuck Shaffer

That across the into and the generally as a as as out both vaccination I as growing confidence we and in But it. it. is move borrowers will state businesses think the see described of describe much lot And things more be growing a optimism and are And state. I redeployed forward. pretty for this we a liquidity think we we vaccine know our happening process there the takes And definitely optimism hold ultimately is folks lot move way what’s sense that across as that need forward. there do will you are the cautious. of in Florida. and of things the there’s liquidity more lot said, And still more state conversations confidence ahead I'd have to provide being to as still recovering, is

David Feaster

backdrop Okay. all and in And to the in the margin, know liquidity of then especially challenging builds curious but just say, that. for the hard on light I it's likelihood the

trough be it? might we I where would and that’s helpful? question, NIM, core any we bottom insight maybe know a when the on and thoughts of the timing but into any can maybe tough Just

Tracey Dexter

I can start.

in excess excluding core expect we first though, modestly quarter on PPP to effect to NIM will during as purchase likely liquidity, decline lower loan rates points accretion we period. the given half during to the of securities of continued XXXX, declined So see that to basis continue said the X continue funding yield, pressure dilutive X.XX%. It the

environment effect that. pretty the the also it's and NIM, stimulus Beyond of rate difficult pandemic that provide potential and impact programs the ongoing guidance might that, given on to of also uncertainty the

David Feaster

Okay. maybe in think I or kind of there? at dip trough we mean kind to might north of of stay do around And X.XX% going kind are X.XXs? we where of you

Chuck Shaffer

the some its of guidance, which yield to give possibility the is need going if we sheet assets move, quarter. of a the the of the deposit the level given what longer support to we beyond But and long see inflation beyond go start we we a balance the level drag support Michael or once too reasonable David, see ability for to move It's you difficult, out and that to our hard It's curve year two, would where margin. up lot end think mentioned costs liquidity, there’s run have kind of get the of lot I for the to big the were to of over and curve we XX have government on. variability the to is, out quarter back steepen,

David Feaster


everybody. All Thanks, right. Okay.

Chuck Shaffer

David. Thanks,


Thank you.

Our next question online comes ahead. from Mr. Steve Moss. Please go

line open. is Your

Steve Moss

morning. Good

Chuck Shaffer

Hi, Steve.

Steve Moss

there's accretion us, out guess kind how frame I XXXX about in could terms of maybe like of Maybe, a but if for just total the range. you we amount, that just following Tracey? purchase think up dollar in here on discount for maybe margin

Tracey Dexter

of Also, but area dependent difficult basis positively a loan to be Highly points a of have points. an lower. the modeled be model, quarter XX could about by basis In yields points. accretion impacted that's could Last was Yes. payoffs, we quarter, basis on discounts benefit XX purchase it XX current yield volatility. lot to higher,

Steve Moss

efficiency think ratio Okay, I said, for that's helpful. low XXXX. then And you XXs

your number? on are of thoughts of curious, some kind expenses. what influencing versus rationalize technology expenses, of the to or then hiring if Just of And how fees kind maybe needs that are wanting your investment realization PPP are just

Tracey Dexter

looking to low expect I expect investments technology, that in maintain in on always efficiency. And... we efficiency XXXX, be key we cost discipline said, operational We Yes, of focus the in ratio Like XXs. the we've to the had. areas ahead

Chuck Shaffer

that The opportunistic acquiring to only we'll is, I'd add time. be through with thing Steve talent

throughout but to we're recruiting, We low for seeing that, talent the good the around commercial the particularly expect opportunities are year. And the actively XXs banking in business manage state.

Steve Moss

does of And being the PPP that realized NII? Okay. just -- include terms into in fees

Chuck Shaffer

It does.

Steve Moss

does. It

you $XXX how percentage just $XXX just million think was of to And of purchases about the as assets a first in for maybe million here quarter? the going securities terms Okay. number, forward? securities that -- Or then of here, just the

Tracey Dexter

first Yes, to the it meant quarter. to just guide

Chuck Shaffer

The first I is year work Tracey with a in as year, mentioned the curve a rising likelihood earlier near back quarter. forward. mentioned, money the cautious yield Anything XX beyond the as lot that of just we to here little -- the a of current QX put is commit work on with move we'll to X%, we right, more time. over will not provide Again, and to guidance later million about money outlook of the and just how period much economy then in be and depend to wanting the somewhat put $XXX being it'll beyond over for that million and the disciplined But possibility $XXX back about rates for we balanced to continue to to general.

Steve Moss

Well, all great. very thank Okay, much. my you questions. That's

Chuck Shaffer

Thanks, Steve.


Thank you.

question Mr. go comes Please Marinac. on line from ahead. next Christopher Our

Christopher Marinac

Is or missed it for third there if timing think thanks will recognize apologize I you that'll year take longer? Tracey, a you of round PPP that Hey, Do Chuck I be morning. of the this. terms to in when forgiveness? or this

Tracey Dexter

third as funded well we're -- so that a million ago, we got what we've of similar about have loans so pace assuming that of a far We're far program. the seeing days with couple under $XXX to in Yes, of one. round round forgiveness

So for that the of year. a third forgiveness PPP, this end the the of starts forgiven round around XXXX, of quarter by we're latest about second estimating with of

Christopher Marinac

be million within that new So those a or and ones less? books books the $XXX will off will be off the year

Tracey Dexter

a end those gone about of of be this year. third We're estimating the by will

of will most be still the XXXX. here So end at

Christopher Marinac

clarifying. for Thanks great. Okay,

Tracey Dexter

kind and the to Yes, expect of those what maturities. from the contractual the experience of still we're And learning from five pace year and first forgiveness round. are

Christopher Marinac

Okay, it. got

then a And more strategic a of question. good. Sounds

the Seacoast. bigger with acquisitions tuck that compelled past anything feel you So to the very do you've you successful several various the doing are conversations you having still people size? feel small comfortable years? as Chuck, all Do been do and kind at Or in making suggestions of from

Chuck Shaffer

Tampa, likely conversations North presence markets. shareholder Yes, And a I market economically Miami, up returns, our M&A still generate in we've growth I cost Orlando, expand in are an we on Coast us key Florida, the generally the markets acquisitions, will tuck front, feasible done Fort is past, good and Chris. be generate our growth Those is in our they tuck-in out, our the to and if deal that's focus South seeing will it'll of good those Lauderdale they And And where our key of of which in East kind remain allow post-COVID, be. smaller primarily acquisitions, positive. way. say would think share sort accelerate on markets, Florida, focus generated good in in

Christopher Marinac

Sounds wishes Denny, much. good. next chapter. Thanks best to your very And

Dennis Hudson

thanks, Chris. Hey,


Mr. And comes you. go our final Thank Stephen Scouten. question ahead. Please from

Stephen Scouten

doing? Hey, How are good everyone. morning, you

Chuck Shaffer

Steve. Hey,

Stephen Scouten

deals previously, of potentially that could thinking some around given over where, you've guys do a think at mentioned there a outside point capital maybe on strategic fruition about of of I five there time, some follow decisions. internally? to opportunities the Just or those come six come start up kind Does in you Chris' tuck maybe point questions just generate time, themselves? exhaust rapidly state you of were in deals kind And how these

Chuck Shaffer

the Thanks, Stephen for question.

state. remain state the to and particular, parts in Our strategy the is in the growing of

of path on of generate strategic I If you robust And of And our given the most growth COVID, to population the in growth to can, in think growth, that, one sort country. we forward the particular and going markets what is the and best franchise remarkable. the the fairly of think that the probably coming is most It's population concentrated get as that's population as value. state. top and about you Florida, into the layer quality acceleration of during

Stephen Scouten

the all sense. makes That Yes.

Okay. And mind? banker hires you noted then, you acquisition, treasury target couple a of plan? the XXXX? is a potential I fairly opportunistic a management about in you talent in terms guys in nature? do in of How mean, a pace individual. do it have have just hires, aggressive Or think more Do you

Chuck Shaffer

make we well, can folks opportunistic. of have hire, it'll just talent right the around going to plan people terms going leadership in the into culture a hire to to number. both We and forward, the We're markets organization. sort We're not move in. and and to in the hires but hit of as a we banker fit we'll be talent And definitely to hire believe that continue right

we opportunistic as it'll through be So year. the move

Stephen Scouten

And hear Denny, role But, Perfect. I still you. you. from expect to changing, the I your but transition. is congrats Thank nonetheless on know

Dennis Hudson

Thanks, Steve. to to forward you. Okay. Look talking

Chuck Shaffer

Thanks, Steve.


the I'd Shaffer no turn further like call have over closing for this remarks. We questions to at time. Mr. to

Chuck Shaffer

look we next questions. you. Thank the and talking Richard, for And to to everybody forward you, quarter. thanks, you Thank


ladies And you gentlemen. you, for and concludes today's conference. thank participating. This Thank

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