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SEACOAST BANKING CORP OF FLORIDA (SBCF)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a clean beat on profitability with diluted EPS $0.50 GAAP and $0.52 adjusted, driven by 10bps NIM expansion to 3.58%, lower deposit costs, and robust loan production; ROA rose to 1.08% and adjusted efficiency improved to 55.36% .
  • Versus Wall Street, EPS beat consensus (S&P Global Primary EPS $0.42*) while revenue (S&P Global definition $144.0M*) was modestly below its $145.5M* consensus; the company’s reported net revenues were $151.4M, reflecting definitional differences in “revenue” .
  • Credit quality strengthened: NPLs fell to 0.61% of loans, net charge-offs dropped to 9bps of average loans, and ACL held flat at 1.34% of loans .
  • Strategic catalysts: Heartland Bancshares closed July 11; Villages Bancorporation expected to close in Q4 2025 (regulatory approvals received Sept. 5) — management sees ~10bps core margin uplift and accretive EPS from these transactions .
  • Management guided Q3 noninterest income to $20–$22M and adjusted expenses to $92–$94M, affirmed year-end core NIM ~3.35% (plus ~10bps from acquisitions), and mid- to high-single-digit organic loan growth; deposit growth expected low single digits for FY25 .

What Went Well and What Went Wrong

  • What Went Well

    • Net interest margin expanded 10bps to 3.58% (ex-accretion +5bps to 3.29%) on disciplined deposit repricing and healthy loan yields; cost of deposits fell 13bps to 1.80% .
    • Strong operating leverage: adjusted pre-tax pre-provision earnings rose 21% q/q to $62.6M; adjusted efficiency ratio improved to 55.36% .
    • Asset quality improved: NPL ratio down to 0.61%, net charge-offs to $2.5M (9bps), criticized/classified loans down to 2.39% of loans .
    • Management quote: “The expansion in net interest margin is a direct result of the disciplined execution and strategic focus of the Seacoast team” — Charles M. Shaffer, CEO .

  • What Went Wrong

    • S&P Global “Revenue” (actual $144.0M*) modestly missed consensus ($145.5M*) despite company-reported net revenues up 8% q/q (definition mismatch likely drove the headline miss).
    • Borrowing costs rose: interest expense on borrowed money increased 50% q/q (largely pre-funding securities ahead of Heartland close), and FHLB advances increased to $715M .
    • Competitive pressure in CRE: spreads compressing to ~180–190bps with sponsors pushing for longer IO periods; management is selective but acknowledges a tougher pricing backdrop .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Net Revenues ($USD Millions)$126.6 $132.9 $140.7 $151.4
Net Interest Income ($USD Millions)$104.4 $115.8 $118.5 $126.9
Noninterest Income ($USD Millions)$22.2 $17.1 $22.2 $24.5
Provision for Credit Losses ($USD Millions)$4.9 $3.7 $9.3 $4.4
Noninterest Expense ($USD Millions)$82.5 $85.6 $90.6 $91.7
Net Income ($USD Millions)$30.2 $34.1 $31.5 $42.7
Diluted EPS ($)$0.36 $0.40 $0.37 $0.50
Adjusted Diluted EPS ($)$0.36 $0.48 $0.38 $0.52
Net Interest Margin (%)3.18% 3.39% 3.48% 3.58%
Efficiency Ratio (%)60.21% 56.26% 60.28% 56.95%

Segment/Revenue Components (Noninterest income)

Component ($USD Millions)Q2 2024Q1 2025Q2 2025
Service Charges on Deposits$5.34 $5.18 $5.54
Wealth Management$3.77 $4.25 $4.20
Mortgage Banking Fees$0.58 $0.40 $0.69
Insurance Agency Income$1.36 $1.62 $1.29
BOLI Income$2.60 $2.47 $3.38
Other$6.65 $6.26 $7.50

Balance Sheet and KPIs

MetricQ2 2024Q1 2025Q2 2025
Loans ($USD Millions)$10,038.5 $10,443.0 $10,608.8
Deposits ($USD Millions)$12,116.1 $12,574.8 $12,497.6
Total Assets ($USD Millions)$14,952.6 $15,732.5 $15,945.0
FHLB Borrowings ($USD Millions)$180.0 $465.0 $715.0
ROA (%)0.82 0.83 1.08
ROTCE (%)10.75 10.17 12.82
Cost of Deposits (%)2.31 1.93 1.80
Loan-to-Deposit Ratio (End of Period, %)82.90 83.17 84.96

Asset Quality

MetricQ2 2024Q1 2025Q2 2025
Nonperforming Loans ($USD Millions)$59.9 $71.0 $64.2
NPL / Loans (%)0.60 0.68 0.61
Net Charge-offs ($USD Millions)$9.95 $7.04 $2.46
NCO / Average Loans (%)0.40 0.27 0.09
ACL ($USD Millions)$141.6 $140.3 $142.2
ACL / Loans (%)1.41 1.34 1.34

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Noninterest Income ($USD Millions)Q3 2025—$20–$22 New
Adjusted Expenses ($USD Millions)Q3 2025$87–$89 (Q2 guide) $92–$94 Raised (seasonal + Heartland ops)
Core NIM (%)Q4 2025 exitImplied ~3.35 by YE (Q1 discussion) ~3.35 incl one cut in Sept/Dec; +~10bps from acquisitions Maintained; acquisitions add
Organic Loan GrowthFY 2025Mid- to high-single digits Mid- to high-single digits Maintained
Deposit GrowthFY 2025Low to mid-single digits Low single digits Slightly Lower
Funding MixH2 2025—Delever some wholesale (FHLB/brokered) post Heartland New
Dividend ($/share)Q3 2025 pay$0.18 $0.18 (declared July 17, payable Sept 30) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Current Period (Q2 2025)Trend
Margin trajectoryCore NIM expansion aided by deposit cost declines; year-end core NIM target discussed at ~3.35% NIM +10bps to 3.58%; core ~3.35% by YE; acquisitions add ~10bps Improving; upside from M&A
Deposit costs / betasTactical repricing; DDA growth; cost of deposits down to 1.93% Cost of deposits down to 1.80%; interest-bearing beta normalizing; cumulative beta ~45% past cycle; expect low-30s going forward Favorable; normalization ahead
Loan growth / pipelineMid-high single-digit guide; pipeline expanded ~40% q/q Originations $854M; pipeline $921M; guide maintained through 2026 Strong; sustained
CRE competition—Spreads ~180–190bps; sponsor-friendly structures (longer IO); Seacoast selective More competitive
Tariffs / macroMonitoring; uncertainty impact too early to tell Limited impact so far; guidance acknowledges uncertainty Watchlist but contained
Securities / swapsPre-purchase AFS ahead of Heartland; pay-fixed swaps expiring Portfolio yield 3.87%; new purchases avg ~4.96%; swaps matured in April Repositioning accretive
M&A integrationHeartland expected Q3 close Heartland closed (July 11); Villages expected Q4 (regs approved Sept. 5) Near-term catalysts

Management Commentary

  • “Our performance in the second quarter showcases the strength and momentum of our franchise. The expansion in net interest margin is a direct result of the disciplined execution and strategic focus of the Seacoast team.” — Charles M. Shaffer, CEO .
  • “We expect noninterest income in a range from $20–$22 million [Q3], and adjusted expenses…$92–$94 million.” — Tracey Dexter, CFO .
  • “We continue to expect to exit the year with the core net interest margin of approximately 3.35%…and with the two acquisitions that could add approximately 10 basis points.” — Tracey Dexter, CFO .
  • “It’s as competitive as it’s ever been…we’ll pick our spots carefully.” — Charles M. Shaffer, CEO, on CRE competitive dynamics .
  • “We will delever a little bit on the wholesale funding side…you’ll see those [FHLB/brokered] likely come down.” — Michael Young, Treasurer .

Q&A Highlights

  • Deposit betas: More aggressive move down to date; expect normalized total-deposit beta low-30% with incremental Fed cuts; deposit cost strategy balances growth and rate management .
  • NIM guidance: Core ~3.35% by year-end; acquisitions expected to add ~10bps; timing of Villages close will influence reported margin uplift .
  • CRE market: Spread compression (~180–190bps), longer IO periods; Seacoast prioritizing Tier-1 sponsors and disciplined structures .
  • Funding mix: Post Heartland, plan to reduce wholesale borrowings; securities balances expected to remain fairly consistent .
  • Credit normalization: Net charge-offs expected mid-cycle ~20–25bps long-term; Q2’s low NCOs reflect clean credit and removal of prior fintech consumer portfolio effects .

Estimates Context

Metric (Q2 2025)Consensus (S&P Global)Actual (S&P Global)Surprise# of Estimates
Primary EPS ($)0.42333*0.52*+0.0967*6*
Revenue ($USD)145,466,000*144,006,000*-1,460,000*5*

Notes: Values retrieved from S&P Global. Company-reported net revenues were $151.4M (definition differs from S&P’s “Revenue”) .

Key Takeaways for Investors

  • EPS outperformance and NIM expansion, coupled with lower deposit costs, signal improving core profitability; adjusted PTPP up 21% q/q .
  • Near-term catalysts: Heartland close (July 11) and Villages (expected Q4) provide margin (~10bps) and EPS accretion; regulatory approvals for Villages secured Sept. 5 .
  • Funding tailwind: Management plans to delever wholesale funding post Heartland, supporting margin and risk profile .
  • Credit benign: NPLs and NCOs trended lower; ACL coverage steady; diversified CRE well below regulatory guidance, supporting resilience .
  • Deposit franchise strength: Transaction accounts 47% of deposits; granular base limits concentration risk; continued DDA growth expected .
  • Trading implications: Positive momentum likely on EPS beat and margin trajectory; watch timing of Villages close for additional margin/EPS lift .
  • Medium-term thesis: Talent-driven organic growth, disciplined credit, and accretive M&A in attractive Florida markets underpin improving ROA/ROTCE and tangible book value growth .