SBCF 10-Q Quarterly Report Sept. 30, 2024

SEACOAST BANKING CORP OF FLORIDA

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sbcf-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to __________________.

Commission File No. 0-13660

Seacoast Banking Corporation of Florida

(Exact Name of Registrant as Specified in its Charter)

Florida

59-2260678

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

815 COLORADO AVENUE,

STUART

34994

(Address of Principal Executive Offices)

(Zip Code)


	(772)	287-4000
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	SBCF	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Common Stock, $0.10 Par Value – 85,441,001 shares outstanding as of September 30, 2024

INDEX

SEACOAST BANKING CORPORATION OF FLORIDA



Part I	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated statements of income – Three and nine months ended September 30, 2024 and 2023	3

	Consolidated statements of comprehensive income (loss) – Three and nine months ended September 30, 2024 and 2023	5

	Consolidated balance sheets - September 30, 2024 and December 31, 2023	6

	Consolidated statements of cash flows – Nine months ended September 30, 2024 and 2023	7

	Consolidated statements of shareholders’ equity - Three and nine months ended September 30, 2024 and 2023	9

	Notes to Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	55

Item 4.	Controls and Procedures	55

Part II	OTHER INFORMATION

Item 1.	Legal Proceedings	56

Item 1A.	Risk Factors	56

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56

Item 3.	Defaults upon Senior Securities	57

Item 4.	Mine Safety Disclosures	57

Item 5.	Other Information	57

Item 6.	Exhibits	57

SIGNATURES		59

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2024		2023		2024		2023
Interest and fees on loans	$	150,980	$	149,871	$	445,367	$	433,304
Interest and dividends on securities	25,997		21,498		72,612		61,842
Interest on interest bearing deposits and other investments	7,138		8,477		21,650		16,974
Total Interest Income	184,115		179,846		539,629		512,120
Interest on deposits	51,963		38,396		150,816		81,612
Interest on time certificates	19,002		16,461		54,051		36,490
Interest on borrowed money	6,485		5,683		18,595		16,597
Total Interest Expense	77,450		60,540		223,462		134,699
Net Interest Income	106,665		119,306		316,167		377,421
Provision for credit losses	6,273		2,694		12,559		33,528
Net Interest Income after Provision for Credit Losses	100,392		116,612		303,608		343,893
Noninterest income:
Service charges on deposit accounts	5,412		4,648		15,714		13,450
Interchange income	1,911		1,684		5,739		11,444
Wealth management income	3,843		3,138		11,149		9,519
Mortgage banking fees	485		410		1,448		1,412
Insurance agency income	1,399		1,183		4,045		3,444
SBA gains	391		613		1,824		1,184
BOLI income	2,578		2,197		7,438		6,181
Other	7,473		4,307		18,631		15,636
	23,492		18,180		65,988		62,270
Securities gains (losses), net	187		( 387 )		372		( 456 )
Total Noninterest Income	23,679		17,793		66,360		61,814
Noninterest expense:
Salaries and wages	40,697		46,431		119,938		139,202
Employee benefits	6,955		7,206		21,705		23,240
Outsourced data processing costs	8,003		8,714		28,331		43,489
Occupancy	7,096		7,758		22,313		24,360
Furniture and equipment	2,060		2,052		6,027		6,664
Marketing	2,729		1,876		8,650		6,161
Legal and professional fees	2,708		2,679		6,841		14,220
FDIC assessments	1,882		2,258		6,171		5,817
Amortization of intangibles	6,002		7,457		18,297		21,838
Other real estate owned expense and net loss on sale	491		274		356		412
Provision for credit losses on unfunded commitments	250		—		751		1,239
Other	5,945		7,210		18,346		22,613
Total Noninterest Expense	84,818		93,915		257,726		309,255
Income Before Income Taxes	39,253		40,490		112,242		96,452

Table of Contents


Provision for income taxes	8,602		9,076		25,341		21,962
Net Income	$	30,651	$	31,414	$	86,901	$	74,490

Net income per share of common stock
Diluted	$	0.36	$	0.37	$	1.02	$	0.89
Basic	0.36		0.37		1.03		0.89
Average common shares outstanding
Diluted	85,069		85,666		84,915		83,993
Basic	84,434		85,142		84,319		83,457

See notes to unaudited consolidated financial statements.

Table of Contents

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)


(In thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Income	$	30,651	$	31,414	$	86,901	$	74,490

Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities, net of tax expense of $ 14.4 million and $ 10.6 million for the three and nine months ended September 30, 2024, respectively, and net of tax benefit of $ 8.1 million and $ 9.3 million for the three and nine months ended September 30, 2023, respectively	44,972		( 26,065 )		33,477		( 29,764 )
Amortization of unrealized losses on securities transferred to held-to-maturity, net of tax benefit of $ 3 thousand and $ 11 thousand for the three and nine months ended September 30, 2024, respectively, and net of tax benefit of $ 3 thousand and $ 10 thousand for the three and nine months ended September 30, 2023, respectively	( 11 )		( 11 )		( 31 )		( 32 )
Reclassification adjustment for losses (gains) included in net income, net of tax benefit of $ 68 thousand and $ 1.0 million for the three and nine months ended September 30, 2024, respectively, and net of tax expense of $ 1 thousand for the nine months ended September 30, 2023	201		—		3,006		( 4 )
Unrealized (losses) gains on derivatives designated as fair value hedges, net of reclassifications to income, net of tax benefit of $ 0.8 million and $ 0.6 million for the three and nine months ended September 30, 2024, respectively, and net of tax expense of $ 0.2 million and $ 1.8 million for the three and nine months ended September 30, 2023, respectively	( 2,322 )		504		( 1,744 )		5,236
Unrealized gains on derivatives designated as cash flow hedges, net of reclassifications to income, net of tax expense of $ 43 thousand and $ 114 thousand for the three and nine months ended September 30, 2023, respectively	—		125		—		326
Total other comprehensive income (loss)	$	42,840	$	( 25,447 )	$	34,708	$	( 24,238 )

Comprehensive Income	$	73,491	$	5,967	$	121,609	$	50,252

See notes to unaudited consolidated financial statements.

Table of Contents

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)


	September 30,		December 31,
(In thousands, except share data)	2024		2023
Assets
Cash and due from banks	$	182,743	$	167,511
Interest bearing deposits with other banks	454,315		279,671
Total cash and cash equivalents	637,058		447,182
Time deposits with other banks	5,207		5,857
Debt securities:
Securities available-for-sale (at fair value)	2,160,055		1,836,020
Securities held-to-maturity (fair value $ 538.5 million at September 30, 2024 and $ 558.4 million at December 31, 2023)	646,050		680,313
Total debt securities	2,806,105		2,516,333
Loans held for sale	11,039		4,391
Loans	10,205,281		10,062,940
Allowance for credit losses	( 140,469 )		( 148,931 )
Loans, net of allowance for credit losses	10,064,812		9,914,009
Bank premises and equipment, net	108,776		113,304
Other real estate owned	6,421		7,560
Goodwill	732,417		732,417
Other intangible assets, net	77,431		95,645
Bank owned life insurance	306,379		298,974
Net deferred tax assets	94,820		113,232
Other assets	317,906		331,345
Total Assets	$	15,168,371	$	14,580,249
Liabilities
Deposits	$	12,243,585	$	11,776,935
Securities sold under agreements to repurchase	210,176		374,573
Federal Home Loan Bank (“FHLB”) borrowings	245,000		50,000
Long-term debt, net	106,800		106,302
Other liabilities	168,960		164,353
Total Liabilities	12,974,521		12,472,163
Shareholders’ Equity
Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 86,142,157 and outstanding 85,441,001 at September 30, 2024, and authorized 120,000,000 , issued 85,480,183 and outstanding 84,861,498 shares at December 31, 2023	8,614		8,486
Additional paid-in capital	1,821,050		1,808,883
Retained earnings	508,036		467,305
Treasury stock	( 18,680 )		( 16,710 )
	2,319,020		2,267,964
Accumulated other comprehensive loss, net	( 125,170 )		( 159,878 )
Total Shareholders’ Equity	2,193,850		2,108,086
Total Liabilities and Shareholders’ Equity	$	15,168,371	$	14,580,249

See notes to unaudited consolidated financial statements.

Table of Contents

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Nine Months Ended September 30,
(In thousands)	2024		2023
Cash Flows from Operating Activities
Net income	$	86,901	$	74,490
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	6,381		6,090
Accretion of discounts on securities, net	( 2,371 )		( 798 )
Amortization of operating lease right-of-use assets	6,148		5,993
Other amortization and accretion, net	( 14,678 )		( 14,952 )
Stock based compensation	10,233		10,290
Origination of loans designated for sale	( 82,146 )		( 82,695 )
Sale of loans designated for sale	79,187		86,221
Provision for credit losses	12,559		33,528
Deferred income taxes	7,321		( 3,348 )
(Gains) losses on securities	( 372 )		456
Gains on sale of loans	( 4,251 )		( 2,993 )
Losses (gains) on sale and write-downs of other real estate owned	134		( 37 )
Losses on disposition of fixed assets and write-downs upon transfer of bank premises to other real estate owned	284		1,755
Changes in operating assets and liabilities, net of effects from acquired companies:
Net decrease in other assets	24,973		5,046
Net increase in other liabilities	4,606		1,684
Net cash provided by operating activities	$	134,909	$	120,730

Cash Flows from Investing Activities
Maturities and repayments of debt securities available-for-sale	269,277		153,866
Maturities and repayments of debt securities held-to-maturity	34,361		58,357
Proceeds from sale of debt securities available-for-sale	104,425		30,490
Purchases of debt securities available-for-sale	( 651,360 )		( 28,095 )

Maturities and redemptions of time deposits with other banks	4,132		1,492
Purchases of time deposits with other banks	( 3,482 )		( 2,613 )
Net new loans and principal repayments	( 158,095 )		159,298
Proceeds from the sale of loans held for investment	10,905		—
Proceeds from sale of other real estate owned	2,841		577
Proceeds from sale of FHLB and Federal Reserve Bank Stock	11,310		73,473
Purchase of FHLB and Federal Reserve Bank Stock	( 20,743 )		( 90,896 )
Proceeds from sale of Visa Class B shares	4,104		—


Net cash from bank acquisitions	—		141,674

Additions to bank premises and equipment	( 3,884 )		( 9,665 )
Net cash (used in) provided by investing activities	$	( 396,209 )	$	487,958

See notes to unaudited consolidated financial statements.

Table of Contents

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



	Nine Months Ended September 30,
(In thousands)	2024		2023
Cash Flows from Financing Activities
Net increase in deposits	$	466,651	$	6,898
Net (decrease) increase in repurchase agreements	( 164,397 )		104,421
Net decrease in FHLB borrowings with original maturities of three months or less	—		( 220,000 )
Repayments of FHLB borrowings with original maturities of more than three months	( 160,000 )		( 75,000 )
Proceeds from FHLB borrowings with original maturities of more than three months	355,000		110,000

Stock based employee benefit plans	972		4,316
Repurchase of common stock	( 880 )		( 45 )
Dividends paid	( 46,170 )		( 45,236 )
Net cash provided by (used in) financing activities	$	451,176	$	( 114,646 )
Net increase in cash and cash equivalents	189,876		494,042
Cash and cash equivalents at beginning of period	447,182		201,940
Cash and cash equivalents at end of period	$	637,058	$	695,982

Supplemental disclosure of cash flow information:
Cash paid for interest	$	219,201	$	124,927
Cash paid (refunded) for taxes, net	10,888		( 7,920 )
Recognition of operating lease right-of-use assets, other than through bank acquisitions, net of terminations	—		2,068

Recognition of operating lease liabilities, other than through bank acquisitions, net of terminations	—		2,080



Supplemental disclosure of non-cash investing activities:
Transfers from loans to other real estate owned	953		—
Transfers from bank premises to other real estate owned	883		5,455

See notes to unaudited consolidated financial statements.

Table of Contents

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY (Unaudited)



	Common Stock			Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)
(In thousands)	Shares	Amount										Total
Balance at June 30, 2024	85,299	$	8,530	$	1,815,800	$	492,805	$	( 18,744 )	$	( 168,010 )	$	2,130,381
Comprehensive income	—	—		—		30,651		—		42,840		73,491
Stock based compensation expense	—	—		4,128		—		—		—		4,128
Common stock transactions related to stock based employee benefit plans	142	84		1,122		—		64		—		1,270




Dividends on common stock ($ 0.18 per share)	—	—		—		( 15,420 )		—		—		( 15,420 )
Three months ended September 30, 2024	142	84		5,250		15,231		64		42,840		63,469
Balance at September 30, 2024	85,441	$	8,614	$	1,821,050	$	508,036	$	( 18,680 )	$	( 125,170 )	$	2,193,850




	Common Stock			Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)
(In thousands)	Shares	Amount										Total
Balance at December 31, 2023	84,861	$	8,486	$	1,808,883	$	467,305	$	( 16,710 )	$	( 159,878 )	$	2,108,086
Comprehensive income	—	—		—		86,901		—		34,708		121,609
Stock based compensation expense	—	—		10,233		—		—		—		10,233
Common stock transactions related to stock based employee benefit plans	620	128		1,934		—		( 1,090 )		—		972


Repurchase of common stock	( 40 )	—		—		—		( 880 )		—		( 880 )

Dividends on common stock ($ 0.54 per share)	—	—		—		( 46,170 )		—		—		( 46,170 )
Nine months ended September 30, 2024	580	128		12,167		40,731		( 1,970 )		34,708		85,764
Balance at September 30, 2024	85,441	$	8,614	$	1,821,050	$	508,036	$	( 18,680 )	$	( 125,170 )	$	2,193,850




	Common Stock			Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)
(In thousands)	Shares	Amount										Total
Balance at June 30, 2023	85,086	$	8,509	$	1,809,431	$	437,087	$	( 14,171 )	$	( 186,824 )	$	2,054,032
Comprehensive income (loss)	—	—		—		31,414		—		( 25,447 )		5,967
Stock based compensation expense	30	—		3,194		—		—		—		3,194
Common stock transactions related to stock based employee benefit plans	34	6		443		—		136		—		585




Dividends on common stock ($ 0.18 per share)	—	—		—		( 15,384 )		—		—		( 15,384 )
Three months ended September 30, 2023	64	6		3,637		16,030		136		( 25,447 )		( 5,638 )
Balance at September 30, 2023	85,150	$	8,515	$	1,813,068	$	453,117	$	( 14,035 )	$	( 212,271 )	$	2,048,394

Table of Contents




	Common Stock			Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)
(In thousands)	Shares	Amount										Total
Balance at December 31, 2022	71,618	$	7,162	$	1,377,802	$	423,863	$	( 13,019 )	$	( 188,033 )	$	1,607,775
Comprehensive income (loss)	—	—		—		74,490		—		( 24,238 )		50,252
Stock based compensation expense	30	—		10,290		—		—		—		10,290
Common stock transactions related to stock based employee benefit plans	713	74		5,258		—		( 1,016 )		—		4,316

Repurchase of common stock	( 3 )	—		( 45 )		—		—		—		( 45 )
Issuance of common stock, pursuant to acquisition	12,792	1,279		409,459		—		—		—		410,738
Conversion of options, pursuant to acquisition	—	—		10,304		—		—		—		10,304
Dividends on common stock ($ 0.53 per share)	—	—		—		( 45,236 )		—		—		( 45,236 )
Nine months ended September 30, 2023	13,532	1,353		435,266		29,254		( 1,016 )		( 24,238 )		440,619
Balance at September 30, 2023	85,150	$	8,515	$	1,813,068	$	453,117	$	( 14,035 )	$	( 212,271 )	$	2,048,394

Table of Contents

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – Basis of Presentation

Basis of Presentation: The accompanying unaudited consolidated financial statements of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain prior period amounts have been reclassified to conform to the current period presentation.

Operating results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other period. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Use of Estimates: The preparation of these consolidated financial statements requires management to make judgments in the application of certain accounting policies that involve significant estimates and assumptions. The Company has established policies and control procedures that are intended to ensure valuation methods are well-controlled and applied consistently from period to period. These estimates and assumptions, which may materially affect the reported amounts of certain assets, liabilities, revenues, and expenses, are based on information available as of the date of the financial statements, and changes in this information over time and the use of revised estimates and assumptions could materially affect amounts reported in subsequent financial statements. Specific areas, among others, requiring the application of management’s estimates include the determination of the allowance for credit losses, acquisition accounting and purchased loans, intangible assets and impairment testing, and other fair value measurements.

Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures.” ASU 2023-07 requires disclosure of significant segment expenses and other segment items on an interim and annual basis. The standard is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. The Company is evaluating the impact of the changes to its existing disclosures.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.” ASU 2023-09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold. The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. The standard is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. The Company does not expect the adoption of the standard to have a material impact on its disclosures.

In November 2024, the FASB issued ASU 2024-03, “Expense Disaggregation Disclosures.” ASU 2024-03 requires disclosure to disaggregate prescribed expenses within relevant income statement captions. The standard is effective for fiscal years beginning after December 15, 2026 and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures.

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Note 2 – Earnings per Share

Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share are based on the weighted-average number of common shares outstanding during each period, plus common share equivalents, calculated for share-based awards outstanding using the treasury stock method.

For the three and nine months ended September 30, 2024, options to purchase shares of the Company’s common stock totaling 327,006 and 328,045 , respectively, were anti-dilutive. For the three and nine months ended September 30, 2023, 368,968 options to purchase shares of the Company’s common stock were anti-dilutive.


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share data)	2024		2023		2024		2023
Basic earnings per share
Net income	$	30,651	$	31,414	$	86,901	$	74,490
Average common shares outstanding	84,434		85,142		84,319		83,457
Net income per share	$	0.36	$	0.37	$	1.03	$	0.89

Diluted earnings per share
Net income	$	30,651	$	31,414	$	86,901	$	74,490
Average common shares outstanding	84,434		85,142		84,319		83,457
Add: Dilutive effect of employee restricted stock and stock options	635		524		596		536
Average diluted shares outstanding	85,069		85,666		84,915		83,993
Net income per share	$	0.36	$	0.37	$	1.02	$	0.89

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Note 3 – Securities

The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale (“AFS”) and held-to-maturity (“HTM”) at September 30, 2024 and December 31, 2023 are summarized as follows:


	September 30, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-Sale Debt Securities
U.S. Treasury securities and obligations of U.S. government agencies	$	30,542	$	375	$	( 335 )	$	30,582
Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	1,558,076		8,560		( 158,627 )		1,408,009
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	299,975		3,860		( 11,586 )		292,249
Private mortgage-backed securities and collateralized mortgage obligations	136,038		288		( 7,028 )		129,298
Collateralized loan obligations	286,042		648		( 158 )		286,532
Obligations of state and political subdivisions	7,137		9		( 1,216 )		5,930
Other debt securities	7,389		66		—		7,455
Totals	$	2,325,199	$	13,806	$	( 178,950 )	$	2,160,055
Held-to-Maturity Debt Securities
Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	$	557,119	$	—	$	( 99,722 )	$	457,397
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	88,931		—		( 7,843 )		81,088
Totals	$	646,050	$	—	$	( 107,565 )	$	538,485


	December 31, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-Sale Debt Securities
U.S. Treasury securities and obligations of U.S. government agencies	$	37,718	$	205	$	( 478 )	$	37,445
Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	1,152,753		780		( 184,152 )		969,381
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	385,013		2,824		( 19,565 )		368,272
Private mortgage-backed securities and collateralized mortgage obligations	135,878		36		( 10,911 )		125,003
Collateralized loan obligations	300,855		11		( 1,411 )		299,455
Obligations of state and political subdivisions	10,486		—		( 1,096 )		9,390
Other debt securities	26,599		576		( 101 )		27,074
Totals	$	2,049,302	$	4,432	$	( 217,714 )	$	1,836,020
Held-to-Maturity Debt Securities
Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	$	590,676	$	—	$	( 111,746 )	$	478,930
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	89,637		—		( 10,208 )		79,429


Totals	$	680,313	$	—	$	( 121,954 )	$	558,359

During the three months ended September 30, 2024, debt securities with a fair value of $ 17.6 million were sold, with gross losses of $ 0.3 million. There were no sales of debt securities during the three months ended September 30, 2023. During the

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nine months ended September 30, 2024, debt securities with a fair value of $ 104.4 million were sold, with gross losses of $ 4.0 million. During the nine months ended September 30, 2023, debt securities with a fair value of $ 22.1 million obtained in the acquisition of Professional Holding Corp. (“Professional”) were sold. No gain or loss was recognized on the sale. There were $ 8.4 million in other sales of securities during the nine months ended September 30, 2023, with gross gains of $ 24 thousand and gross losses of $ 19 thousand. Included in “Securities gains (losses), net” are increases of $ 0.5 million and $ 0.3 million, respectively, for the three and nine months ended September 30, 2024, and decreases of $ 0.4 million and $ 0.5 million, respectively, for the three and nine months ended September 30, 2023 in the value of investments in mutual funds that invest in Community Reinvestment Act (“CRA”)-qualified debt securities.

At September 30, 2024, debt securities with a fair value of $ 1.5 billion were pledged primarily as collateral for public deposits and secured borrowings.

The amortized cost and fair value of securities HTM and AFS as of September 30, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	Held-to-Maturity				Available-for-Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in less than one year	$	—	$	—	$	999	$	999
Due after one year through five years	—		—		6,163		6,187
Due after five years through ten years	—		—		8,373		8,413
Due after ten years	—		—		22,144		20,913
	—		—		37,679		36,512

Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	557,119		457,397		1,558,076		1,408,009
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	88,931		81,088		299,975		292,249
Private mortgage-backed securities and collateralized mortgage obligations	—		—		136,038		129,298
Collateralized loan obligations	—		—		286,042		286,532
Other debt securities	—		—		7,389		7,455
Totals	$	646,050	$	538,485	$	2,325,199	$	2,160,055

The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models, or discounted cash flow analyses, or using observable market data. The tables below indicate the fair value of AFS debt securities with unrealized losses for which no allowance for credit losses has been recorded.

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	September 30, 2024
	Less Than 12 Months				12 Months or Longer				Total 1
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government agencies	$	372	$	( 1 )	$	20,513	$	( 334 )	$	20,885	$	( 335 )
Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	103,020		( 449 )		828,586		( 158,178 )		931,606		( 158,627 )
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	—		—		198,386		( 11,586 )		198,386		( 11,586 )
Private mortgage-backed securities and collateralized mortgage obligations	—		—		106,748		( 7,028 )		106,748		( 7,028 )
Collateralized loan obligations	53,893		( 139 )		7,723		( 19 )		61,616		( 158 )
Obligations of state and political subdivisions	—		—		5,588		( 1,216 )		5,588		( 1,216 )

Totals	$	157,285	$	( 589 )	$	1,167,544	$	( 178,361 )	$	1,324,829	$	( 178,950 )
1 Comprised of 350 individual securities.


	December 31, 2023
	Less Than 12 Months				12 Months or Longer				Total 1
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government agencies	$	24,933	$	( 143 )	$	3,594	$	( 335 )	$	28,527	$	( 478 )
Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	91,867		( 9,320 )		826,324		( 174,832 )		918,191		( 184,152 )
Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities	24,251		( 1,270 )		262,666		( 18,295 )		286,917		( 19,565 )
Private mortgage-backed securities and collateralized mortgage obligations	3,945		( 69 )		119,475		( 10,842 )		123,420		( 10,911 )
Collateralized loan obligations	60,087		( 223 )		232,545		( 1,188 )		292,632		( 1,411 )
Obligations of state and political subdivisions	326		( 2 )		9,064		( 1,094 )		9,390		( 1,096 )
Other debt securities	10,579		( 101 )		—		—		10,579		( 101 )
Totals	$	215,988	$	( 11,128 )	$	1,453,668	$	( 206,586 )	$	1,669,656	$	( 217,714 )
1 Comprised of 504 individual securities.

At September 30, 2024, the Company had unrealized losses of $ 0.3 million on U.S. Treasury securities and obligations of U.S. government agencies having a fair value of $ 20.9 million. These securities are either explicitly or implicitly guaranteed by the full faith and credit of the U.S. government. The Company does not expect individual securities issued by the U.S. Treasury, a U.S. agency, or a sponsored U.S. agency to incur future losses of principal. Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at September 30, 2024, no allowance for credit losses has been recorded.

At September 30, 2024, the Company had unrealized losses of $ 170.2 million on commercial and residential mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities having a fair value of $ 1.1 billion. These securities are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. The implied government guarantee of principal and interest payments and the high credit rating of the portfolio provide a sufficient basis for the current expectation that there is no risk of loss if default were to occur. Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in

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investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at September 30, 2024, no allowance for credit losses has been recorded.

At September 30, 2024, the Company had $ 7.0 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 106.7 million. The securities have weighted average credit support of 22 %. Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at September 30, 2024, no allowance for credit losses has been recorded.

At September 30, 2024, the Company had $ 0.2 million of unrealized losses in floating rate collateralized loan obligations (“CLOs”) having a fair value of $ 61.6 million. CLOs are special purpose vehicles and those in which the Company has invested are nearly all first-lien, broadly syndicated corporate loans across a diversified band of industries while providing support to senior tranche investors. As of September 30, 2024, all positions held by the Company are in AAA and AA tranches, with weighted average credit support of 38 % and 30 %, respectively. The Company evaluates the securities for potential credit losses by modeling expected loan-level defaults, recoveries, and prepayments for each CLO security. Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at September 30, 2024, no allowance for credit losses has been recorded.

At September 30, 2024, the Company had $ 1.2 million of unrealized losses on municipal securities having a fair value of $ 5.6 million. These securities are highly rated issuances of state or local municipalities, all of which are continuing to make timely contractual payments. Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. As a result, as of September 30, 2024, no allowance for credit losses has been recorded.

All HTM debt securities are issued by government-sponsored entities, which are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. The implied government guarantee of principal and interest payments, and the high credit rating of the HTM portfolio provide sufficient basis for the current expectation that there is no risk of loss if a default were to occur. As a result, as of September 30, 2024, no allowance for credit losses has been recorded. The Company has the intent and ability to hold these securities until maturity.

Included in Other Assets at September 30, 2024 and December 31, 2023 is $ 77.2 million and $ 67.7 million, respectively, of FHLB and Federal Reserve Bank (“FRB”) stock stated at par value. The Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these cost method investment securities. Accrued interest receivable on AFS and HTM debt securities of $ 8.4 million and $ 1.1 million, respectively, at September 30, 2024, and $ 7.9 million and $ 1.1 million, respectively, at December 31, 2023, is included in Other Assets. Also included in Other Assets are investments in CRA-qualified mutual funds carried at fair value of $ 13.9 million and $ 13.6 million at September 30, 2024 and December 31, 2023, respectively.

At December 31, 2023, the Company held 11,330 shares of Visa Class B stock. During the nine months ended September 30, 2024, the Company sold all of its Visa Class B stock, receiving net proceeds of $ 4.1 million. The ownership of Visa stock was related to prior ownership in Visa’s network while Visa operated as a cooperative, and was recorded on the Company’s financial records at a zero basis.

Note 4 – Loans

Loans held for investment are categorized into the following segments:

• Construction and land development: Loans are extended to both commercial and consumer customers which are collateralized by and for the purpose of funding land development and construction projects, including 1-4 family residential, multi-family, and non-farm residential property where the primary source of repayment is from proceeds of the sale, refinancing or permanent financing of the property.

• Commercial real estate - owner occupied: Loans are extended to commercial customers for the purpose of acquiring or refinancing real estate to be occupied by the borrower’s business. These loans are collateralized by the subject property and the repayment of these loans is largely dependent on the performance of the company occupying the property.

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• Commercial real estate - non-owner occupied: Loans are extended to commercial customers for the purpose of acquiring or refinancing commercial property where occupancy by the borrower is not their primary intent. These loans are viewed primarily as cash flow loans, collateralized by the subject property, and the repayment of these loans is largely dependent on rental income from third parties or from the sale of the property.

• Residential real estate: Loans are extended to consumer customers and collateralized primarily by 1-4 family residential properties and include fixed and variable rate mortgages, home equity mortgages, and home equity lines of credit. Loans are primarily written based on conventional loan agency guidelines, including loans that exceed agency value limitations. Sources of repayment are largely dependent on the occupant of the residential property.

• Commercial and financial: Loans are extended to commercial customers. The purpose of the loans can be working capital, physical asset expansion, asset acquisition, or other business purposes. Loans may be collateralized by assets owned by the borrower or the borrower’s business. Commercial loans are based primarily on the historical and projected cash flow of the borrower’s business and secondarily on the capacity of credit enhancements, guarantees, and underlying collateral provided by the borrower.

• Consumer: Loans are extended to consumer customers. The segment includes both installment loans and lines of credit which may be collateralized or non-collateralized.

The following tables present net loan balances by segment for portfolio loans, purchased credit deteriorated loans (“PCD”) and loans purchased which are not considered credit deteriorated (“Non-PCD”) as of:


	September 30, 2024
(In thousands)	Portfolio Loans		Acquired Non-PCD Loans		PCD Loans		Total
Construction and land development	$	495,458	$	99,756	$	539	$	595,753
Commercial real estate - owner occupied	1,150,809		493,986		32,019		1,676,814
Commercial real estate - non-owner occupied	2,228,137		1,214,092		130,847		3,573,076
Residential real estate	1,811,941		734,399		18,563		2,564,903
Commercial and financial	1,332,939		213,109		29,180		1,575,228
Consumer	158,902		60,293		312		219,507
Totals	$	7,178,186	$	2,815,635	$	211,460	$	10,205,281


	December 31, 2023
(In thousands)	Portfolio Loans		Acquired Non-PCD Loans		PCD Loans		Total
Construction and land development	$	519,426	$	247,654	$	542	$	767,622
Commercial real estate - owner occupied	1,079,633		552,627		38,021		1,670,281
Commercial real estate - non-owner occupied	1,844,588		1,323,222		152,080		3,319,890
Residential real estate	1,714,748		710,129		20,815		2,445,692
Commercial and financial	1,237,090		318,683		52,115		1,607,888
Consumer	175,969		74,854		744		251,567
Totals	$	6,571,454	$	3,227,169	$	264,317	$	10,062,940

The amortized cost basis of loans included net deferred costs of $ 44.9 million at September 30, 2024 and $ 43.1 million at December 31, 2023. At September 30, 2024, the remaining fair value adjustments on acquired loans were $ 141.8 million, or 4.5 % of the outstanding acquired loan balances, compared to $ 174.0 million, or 4.8 % of the acquired loan balances at December 31, 2023. The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis. During the nine months ended September 30, 2024, $ 9.1 million in loans previously held for investment were sold, resulting in a net gain of $ 0.9 million.

Accrued interest receivable is included within Other Assets and was $ 38.8 million and $ 39.4 million at September 30, 2024 and December 31, 2023, respectively.

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The following tables present the status of net loan balances as of September 30, 2024 and December 31, 2023.


	September 30, 2024
(In thousands)	Current		Accruing 30-59 Days Past Due		Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Total
Portfolio Loans
Construction and land development	$	495,240	$	—	$	—	$	—	$	218	$	495,458
Commercial real estate - owner occupied	1,147,263		496		835		—		2,215		1,150,809
Commercial real estate - non-owner occupied	2,224,884		—		—		—		3,253		2,228,137
Residential real estate	1,789,154		11,571		2,175		—		9,041		1,811,941
Commercial and financial	1,317,596		2,844		175		148		12,176		1,332,939
Consumer	157,309		615		470				508		158,902
Total Portfolio Loans	$	7,131,446	$	15,526	$	3,655	$	148	$	27,411	$	7,178,186

Acquired Non-PCD Loans
Construction and land development	$	97,011	$	2,219	$	—	$	—	$	526	$	99,756
Commercial real estate - owner occupied	489,257		1,380		613		—		2,736		493,986
Commercial real estate - non-owner occupied	1,203,625		2,059		642		—		7,766		1,214,092
Residential real estate	713,224		9,684		269		646		10,576		734,399
Commercial and financial	208,981		395		749		35		2,949		213,109
Consumer	54,072		2,515		1,706		1,084		916		60,293
Total Acquired Non-PCD Loans	$	2,766,170	$	18,252	$	3,979	$	1,765	$	25,469	$	2,815,635

PCD Loans
Construction and land development	$	45	$	400	$	—	$	—	$	94	$	539
Commercial real estate - owner occupied	27,304		—		—		—		4,715		32,019
Commercial real estate - non-owner occupied	107,265		2,554		—		3,341		17,687		130,847
Residential real estate	16,880		63		168		—		1,452		18,563
Commercial and financial	24,367		803		—		31		3,979		29,180
Consumer	253		9		—		—		50		312
Total PCD Loans	$	176,114	$	3,829	$	168	$	3,372	$	27,977	$	211,460

Total Loans	$	10,073,730	$	37,607	$	7,802	$	5,285	$	80,857	$	10,205,281

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	December 31, 2023
(In thousands)	Current		Accruing 30-59 Days Past Due		Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Total
Portfolio Loans
Construction and land development	$	519,383	$	19	$	—	$	—	$	24	$	519,426
Commercial real estate - owner occupied	1,078,732		—		—		—		901		1,079,633
Commercial real estate - non-owner occupied	1,840,485		685		—		—		3,418		1,844,588
Residential real estate	1,701,862		4,373		1,515		169		6,829		1,714,748
Commercial and financial	1,221,941		1,372		145		50		13,582		1,237,090
Consumer	174,798		763		290		—		118		175,969
Total Portfolio Loans	$	6,537,201	$	7,212	$	1,950	$	219	$	24,872	$	6,571,454

Acquired Non-PCD Loans
Construction and land development	$	245,674	$	891	$	289	$	—	$	800	$	247,654
Commercial real estate - owner occupied	545,374		1,691		133		—		5,429		552,627
Commercial real estate - non-owner occupied	1,310,100		11,577		—		—		1,545		1,323,222
Residential real estate	704,417		2,586		888		153		2,085		710,129
Commercial and financial	315,229		50		36		35		3,333		318,683
Consumer	71,986		568		618		618		1,064		74,854
Total Acquired Non-PCD Loans	$	3,192,780	$	17,363	$	1,964	$	806	$	14,256	$	3,227,169

PCD Loans
Construction and land development	$	442	$	100	$	—	$	—	$	—	$	542
Commercial real estate - owner occupied	34,667		—		—		—		3,354		38,021
Commercial real estate - non-owner occupied	148,308		—		—		—		3,772		152,080
Residential real estate	18,923		497		169		154		1,072		20,815
Commercial and financial	34,337		—		—		—		17,778		52,115
Consumer	651		85		8		—		—		744
Total PCD Loans	$	237,328	$	682	$	177	$	154	$	25,976	$	264,317

Total Loans	$	9,967,309	$	25,257	$	4,091	$	1,179	$	65,104	$	10,062,940

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest subsequently received on such loans is accounted for under the cost-recovery method, whereby interest income is not recognized until the loan balance is paid down to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured. The Company recognized interest income of $ 0.2 million and $ 0.4 million on nonaccrual loans during the three months ended September 30, 2024 and September 30, 2023, respectively. The Company recognized $ 1.1 million and $ 0.8 million in interest income on nonaccrual loans during the nine months ended September 30, 2024 and September 30, 2023, respectively.

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The following tables present net balances of loans on nonaccrual status and the related allowance for credit losses, if any, as of:


	September 30, 2024
(In thousands)	Nonaccrual Loans With No Related Allowance		Nonaccrual Loans With an Allowance		Total Nonaccrual Loans		Allowance for Credit Losses
Construction and land development	$	94	$	744	$	838	$	177
Commercial real estate - owner occupied	2,664		7,002		9,666		1,188
Commercial real estate - non-owner occupied	25,452		3,254		28,706		1,715
Residential real estate	6,379		14,690		21,069		562
Commercial and financial	3,571		15,533		19,104		6,676
Consumer	—		1,474		1,474		221
Totals	$	38,160	$	42,697	$	80,857	$	10,539


	December 31, 2023
(In thousands)	Nonaccrual Loans With No Related Allowance		Nonaccrual Loans With an Allowance		Total Nonaccrual Loans		Allowance for Credit Losses
Construction and land development	$	—	$	824	$	824	$	—
Commercial real estate - owner occupied	4,859		4,825		9,684		41
Commercial real estate - non-owner occupied	3,938		4,797		8,735		230
Residential real estate	1,792		8,194		9,986		58
Commercial and financial	4,868		29,825		34,693		2,319
Consumer	—		1,182		1,182		257
Totals	$	15,457	$	49,647	$	65,104	$	2,905

Loans by Risk Rating

The Company utilizes an internal asset classification system as a means of identifying problem and potential problem loans. The following classifications are used to categorize loans under the internal classification system:

• Pass: Loans that are not problem loans or potential problem loans are considered to be pass-rated.

• Special Mention: Loans that do not currently expose the Company to sufficient risk to warrant classification in the Substandard or Doubtful categories, but possess weaknesses that deserve management’s close attention are deemed to be Special Mention.

• Substandard: Loans with the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

• Doubtful: Loans that have all the weaknesses inherent in those classified Substandard with the added characteristic that the weakness present makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

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The following tables present the risk rating of loans and year-to-date 1 gross charge offs by year of origination as of:


	September 30, 2024
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving		Total
Construction and Land Development
Risk Ratings:
Pass	$	65,374	$	130,253	$	191,784	$	40,202	$	9,268	$	41,567	$	116,021	$	594,469
Special Mention	—		—		—		—		—		46		—		46
Substandard	—		—		188		95		—		955		—		1,238
Doubtful	—		—		—		—		—		—		—		—
Total	$	65,374	$	130,253	$	191,972	$	40,297	$	9,268	$	42,568	$	116,021	$	595,753
Gross Charge Offs	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	1
Commercial real estate - owner occupied
Risk Ratings:
Pass	$	137,538	$	142,285	$	268,777	$	267,741	$	160,404	$	644,931	$	18,034	$	1,639,710
Special Mention	—		—		1,640		700		2,006		6,778		351		11,475
Substandard	—		1,068		2,446		1,218		5,916		14,981		—		25,629
Doubtful	—		—		—		—		—		—		—		—
Total	$	137,538	$	143,353	$	272,863	$	269,659	$	168,326	$	666,690	$	18,385	$	1,676,814
Gross Charge Offs	$	—	$	—	$	179	$	—	$	—	$	125	$	—	$	304
Commercial real estate - non-owner occupied
Risk Ratings:
Pass	$	335,560	$	237,198	$	863,032	$	655,870	$	252,978	$	1,069,483	$	23,468	$	3,437,589
Special Mention	29		—		20,248		6,323		16,765		33,324		—		76,689
Substandard	—		—		10,522		9,685		11,312		25,337		—		56,856
Doubtful	—		—		—		—		—		1,942		—		1,942
Total	$	335,589	$	237,198	$	893,802	$	671,878	$	281,055	$	1,130,086	$	23,468	$	3,573,076
Gross Charge Offs	$	—	$	—	$	—	$	—	$	89	$	616	$	—	$	705
Residential real estate
Risk Ratings:
Pass	$	100,622	$	174,995	$	500,327	$	640,263	$	156,208	$	454,794	$	506,576	$	2,533,785
Special Mention	176		581		—		—		23		436		6,669		7,885
Substandard	—		850		4,972		353		115		7,063		9,880		23,233
Doubtful	—		—		—		—		—		—		—		—
Total	$	100,798	$	176,426	$	505,299	$	640,616	$	156,346	$	462,293	$	523,125	$	2,564,903
Gross Charge Offs	$	—	$	—	$	—	$	—	$	40	$	62	$	26	$	128
Commercial and financial
Risk Ratings:
Pass	$	237,737	$	212,954	$	282,492	$	248,791	$	93,641	$	117,672	$	329,015	$	1,522,302
Special Mention	—		759		2,211		3,023		557		2,154		866		9,570
Substandard	—		—		9,272		11,279		6,187		10,830		5,788		43,356
Doubtful	—		—		—		—		—		—		—		—
Total	$	237,737	$	213,713	$	293,975	$	263,093	$	100,385	$	130,656	$	335,669	$	1,575,228
Gross Charge Offs	$	—	$	—	$	2,747	$	10,723	$	—	$	2,621	$	695	$	16,786
Consumer
Risk Ratings:
Pass	$	12,300	$	15,159	$	39,439	$	30,070	$	15,109	$	37,971	$	63,234	$	213,282
Special Mention	52		29		1,067		402		18		312		157		2,037
Substandard	81		63		2,382		1,131		116		340		75		4,188
Doubtful	—		—		—		—		—		—		—		—
Total	$	12,433	$	15,251	$	42,888	$	31,603	$	15,243	$	38,623	$	63,466	$	219,507
Gross Charge Offs	$	484	$	394	$	2,257	$	3,132	$	187	$	100	$	159	$	6,713
Consolidated
Total	$	889,469	$	916,194	$	2,200,799	$	1,917,146	$	730,623	$	2,470,916	$	1,080,134	$	10,205,281
Gross Charge Offs	$	484	$	394	$	5,183	$	13,855	$	316	$	3,525	$	880	$	24,637

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1 Represents gross charge-offs for the nine months ended September 30, 2024.


	December 31, 2023
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Construction and Land Development
Risk Ratings:
Pass	$	80,750	$	295,043	$	107,158	$	20,199	$	21,942	$	28,902	$	210,716	$	764,710
Special Mention	—		1,407		—		—		—		393		289		2,089
Substandard	—		—		—		—		—		499		324		823
Doubtful	—		—		—		—		—		—		—		—
Total	$	80,750	$	296,450	$	107,158	$	20,199	$	21,942	$	29,794	$	211,329	$	767,622
Gross Charge Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner occupied
Risk Ratings:
Pass	$	145,642	$	272,384	$	281,870	$	165,475	$	171,897	$	551,177	$	36,952	$	1,625,397
Special Mention	—		159		1,335		—		524		9,122		1		11,141
Substandard	—		6,024		1,057		6,991		7,116		12,491		64		33,743
Doubtful	—		—		—		—		—		—		—		—
Total	$	145,642	$	278,567	$	284,262	$	172,466	$	179,537	$	572,790	$	37,017	$	1,670,281
Gross Charge Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - non-owner occupied
Risk Ratings:
Pass	$	234,226	$	784,525	$	657,499	$	288,747	$	397,031	$	841,062	$	25,954	$	3,229,044
Special Mention	—		29,381		2,092		2,964		—		12,120		—		46,557
Substandard	—		685		8,723		9,398		10,427		14,806		250		44,289
Doubtful	—		—		—		—		—		—		—		—
Total	$	234,226	$	814,591	$	668,314	$	301,109	$	407,458	$	867,988	$	26,204	$	3,319,890
Gross Charge Offs	$	—	$	—	$	11	$	—	$	—	$	—	$	109	$	120
Residential real estate
Risk Ratings:
Pass	$	177,000	$	450,366	$	649,086	$	160,889	$	95,288	$	413,719	$	479,047	$	2,425,395
Special Mention	208		—		—		—		58		482		4,004		4,752
Substandard	95		—		919		123		314		8,960		5,134		15,545
Doubtful	—		—		—		—		—		—		—		—
Total	$	177,303	$	450,366	$	650,005	$	161,012	$	95,660	$	423,161	$	488,185	$	2,445,692
Gross Charge Offs	$	—	$	—	$	—	$	44	$	—	$	159	$	153	$	356
Commercial and financial
Risk Ratings:
Pass	$	315,560	$	336,071	$	333,113	$	127,069	$	66,165	$	89,002	$	269,108	$	1,536,088
Special Mention	136		2,167		1,064		1,005		503		1,103		2,191		8,169
Substandard	—		18,558		21,643		1,380		5,889		11,842		3,961		63,273
Doubtful	—		—		—		—		—		358		—		358
Total	$	315,696	$	356,796	$	355,820	$	129,454	$	72,557	$	102,305	$	275,260	$	1,607,888
Gross Charge Offs	$	1,198	$	117	$	659	$	3,007	$	582	$	12,584	$	418	$	18,565
Consumer
Risk Ratings:
Pass	$	20,557	$	66,699	$	45,534	$	19,747	$	20,300	$	19,080	$	56,473	$	248,390
Special Mention	5		334		279		77		5		194		65		959
Substandard	66		930		891		103		51		177		—		2,218
Doubtful	—		—		—		—		—		—		—		—
Total	$	20,628	$	67,963	$	46,704	$	19,927	$	20,356	$	19,451	$	56,538	$	251,567
Gross Charge Offs	$	74	$	1,910	$	2,218	$	362	$	263	$	666	$	261	$	5,754
Consolidated
Total	$	974,245	$	2,264,733	$	2,112,263	$	804,167	$	797,510	$	2,015,489	$	1,094,533	$	10,062,940
Gross Charge Offs	$	1,272	$	2,027	$	2,888	$	3,413	$	845	$	13,409	$	941	$	24,795

1 Represents gross charge-offs for the year ended December 31, 2023.

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Troubled Borrower Modifications

The following table presents the amortized cost of troubled borrower modification (“TBM”) loans that were modified during the nine months ended September 30, 2024. There were five loans with an amortized cost of $ 0.9 million modified as a TBM during the nine months ended September 30, 2023.


	September 30, 2024
(In thousands)	Rate Reduction or Rate Reduction with Term Extension		Term Extension and/or Payment Delay		Total 1		% of Total Class of Loans
Construction and land development	$	—	$	86	$	86	0.01	%
Commercial real estate - owner occupied	514		2,685		3,199		0.19
Commercial real estate - non-owner occupied	3,142		177		3,319		0.09	%
Residential real estate	—		126		126		0.01	%
Commercial and financial	3,524		813		4,337		0.28	%
Consumer	84		1,034		1,118		0.51	%
Totals	$	7,264	$	4,921	$	12,185	0.12	%
1 At September 30, 2024, there were no unfunded lending related commitments associated with TBMs.

The following table presents the payment status of TBM loans that were modified in the twelve months prior to September 30, 2024.


	September 30, 2024
(In thousands)	Current		Accruing 30-59 Days Past Due			Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Total
Construction and Land Development	$	—	$	—	—	$	—	$	—	$	86	$	86
Commercial real estate - owner occupied	95		—			—		—		3,199		3,293
Commercial real estate - non-owner occupied	—		—			—		—		3,319		3,319
Residential real estate	123		—			—		—		96		219
Commercial and financial	3,162		—			—		—		1,321		4,483
Consumer	341		429			288		191		233		1,483
Totals	$	3,721	$	429		$	288	$	191	$	8,254	$	12,883

TBM loans modified in the prior 12 months with a payment default during the nine months ending September 30, 2024 were immaterial.

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Note 5 – Allowance for Credit Losses

Activity in the allowance for credit losses is summarized as follows:


	Three Months Ended September 30, 2024
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	5,493	$	1,562	$	—	$	3	$	7,058
Commercial real estate - owner occupied	11,582		338		( 2 )		—		11,918
Commercial real estate - non-owner occupied	45,434		826		( 602 )		18		45,676
Residential real estate	39,209		( 159 )		( 6 )		104		39,148
Commercial and financial	28,429		3,003		( 6,180 )		726		25,978
Consumer	11,494		703		( 1,794 )		288		10,691
Totals	$	141,641	$	6,273	$	( 8,584 )	$	1,139	$	140,469


	Three Months Ended September 30, 2023
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	6,960	$	725	$	—	$	—	$	7,685
Commercial real estate - owner occupied	6,418		( 353 )		—		—		6,065
Commercial real estate - non-owner occupied	54,103		( 1,677 )		—		15		52,441
Residential real estate	36,710		2,009		( 44 )		60		38,735
Commercial and financial	40,272		2,932		( 11,814 )		135		31,525
Consumer	15,252		( 942 )		( 1,265 )		165		13,210
Totals	$	159,715	$	2,694	$	( 13,123 )	$	375	$	149,661


	Nine Months Ended September 30, 2024
(In thousands)	Beginning Balance		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	8,637	$	( 1,593 )	$	( 1 )	$	15	$	7,058
Commercial real estate - owner occupied	5,529		6,688		( 304 )		5		11,918
Commercial real estate - non-owner occupied	48,288		( 2,049 )		( 705 )		142		45,676
Residential real estate	39,016		( 152 )		( 128 )		412		39,148
Commercial and financial	34,343		6,208		( 16,786 )		2,213		25,978
Consumer	13,118		3,457		( 6,713 )		829		10,691
Totals	$	148,931	$	12,559	$	( 24,637 )	$	3,616	$	140,469

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	Nine Months Ended September 30, 2023
(In thousands)	Beginning Balance		Allowance on PCD Loans Acquired During the Period		Provision for Credit Losses		Charge- Offs		Recoveries		Ending Balance
Construction and land development	$	6,464	$	5	$	1,208	$	—	$	8	$	7,685
Commercial real estate - owner occupied	6,051		139		( 127 )		—		2		6,065
Commercial real estate - non-owner occupied	43,258		647		8,461		( 109 )		184		52,441
Residential real estate	29,605		400		8,659		( 312 )		383		38,735
Commercial and financial	15,648		17,527		11,548		( 15,183 )		1,985		31,525
Consumer	12,869		161		3,779		( 3,864 )		265		13,210
Totals	$	113,895	$	18,879	$	33,528	$	( 19,468 )	$	2,827	$	149,661

Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Forecast data is sourced from Moody’s Analytics (“Moody’s”), a firm widely recognized for its research, analysis, and economic forecasts. The forecasts of future economic conditions are over the expected remaining life of the loan using economic forecasts that revert to long-term historical averages over time.

As of September 30, 2024 and December 31, 2023, the Company utilized a multiple scenario model comprised of a blend of Moody’s economic scenarios and considered the uncertainty associated with the assumptions in the scenarios, including continued actions taken by the Federal Reserve with regard to monetary policy and interest rates and the potential impact of those actions. Outcomes could differ from the scenarios utilized, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk that may not be captured in the quantitative model.

The following section discusses changes in the level of the allowance for credit losses for the three months ended September 30, 2024.

The allowance decreased $ 1.2 million, or 0.8 %, during the third quarter of 2024 to $ 140.5 million, or 1.38 % of loans held for investment as of September 30, 2024.

In the Construction and Land Development segment, the increase in allowance is due to continued uncertainty in connection with commercial real estate markets. In this segment, the primary source of repayment is typically from proceeds of the sale or permanent financing of the underlying property; therefore, industry and collateral type and estimated collateral values are among the relevant factors in assessing expected losses.

In the Commercial Real Estate - Owner-Occupied segment, the allowance increased nominally due to an increase in loan balances and continued uncertainty in connection with commercial real estate valuations broadly and uncertainty associated with the economy. Risk characteristics include, but are not limited to, collateral type, note structure and loan seasoning.

In the Commercial Real Estate - Non-Owner-Occupied segment, the allowance increased slightly driven by higher loan balances and was partially offset by the charge-off of one nonaccrual loan. Repayment is often dependent upon rental income from the successful operation of the underlying property or from the sale of the property. Loan performance may be adversely affected by general economic conditions or conditions specific to the real estate market, including property types. Collateral type, note structure, and loan seasoning are among the risk characteristics analyzed for this segment.

The Residential Real Estate segment includes first mortgages secured by residential property, and home equity lines of credit. Allowance levels were essentially flat from last quarter. Risk characteristics considered for this segment include, but are not limited to, borrower FICO score, lien position, loan to value ratios, and loan seasoning.

In the Commercial and Financial segment, borrowers are primarily small to medium sized professional firms and other businesses, and loans are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners. The decrease in the allowance is primarily driven by the charge-off of one nonaccrual relationship that was previously individually reserved. Industry, collateral type, estimated collateral values, and loan seasoning are among the relevant factors in assessing expected losses.

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Consumer loans include installment and revolving lines, loans for automobiles, boats, and other personal or family purposes. Risk characteristics considered for this segment include, but are not limited to, collateral type, loan to value ratios, loan seasoning and FICO score. The decrease in allowance for consumer loans was driven by lower loan balances and improved economic forecasts.

Note 6 – Derivatives

Interest Rate Contracts

The Company offers interest rate swaps when requested by customers to allow them to hedge the risk of rising interest rates on their variable rate loans. Upon entering into these swaps, the Company enters into offsetting positions with counterparties in order to minimize the interest rate risk. These back-to-back swaps are freestanding financial derivatives with the fair values reported in Other Assets and Other Liabilities. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under the arrangements for financial statement presentation purposes. Gains and losses on these back-to-back swaps, which offset, are recorded through noninterest income.

Interest Rate Swaps Designated as Fair Value Hedges

The Company has entered into interest rate swap contracts to hedge the risk of changes in fair value of the AFS securities portfolio due to changes in the Secured Overnight Financing Rate (“SOFR”). The Company considers these derivatives to be highly effective at offsetting changes in interest rates and assesses the effectiveness on a quarterly basis. The effect of changes in interest rates on the fair value of these derivative contracts is recognized in other comprehensive income. These derivative instruments are primarily for risk management purposes. For the three and nine months ended September 30, 2024, the Company recognized, through other comprehensive income, net losses of $ 2.8 million and $ 2.0 million, respectively, and reclassified net gains of $ 0.3 million in each period out of accumulated other comprehensive income into interest income. For each of the three and nine months ended September 30, 2023, the Company recognized nominal amounts through other comprehensive income, and reclassified $ 0.2 million and $ 0.5 million, respectively, out of accumulated other comprehensive income into interest income.

The Company has entered into interest rate swap contracts to hedge the risk of changes in the fair value of a pool of residential mortgages due to changes in SOFR. These fair value hedges utilize the portfolio layer method. The Company considers these derivatives to be highly effective at offsetting changes in interest rates and assesses the effectiveness on a quarterly basis. The effect of changes in interest rates on the fair value of these derivative contracts is recognized in interest income. These derivative instruments are primarily for risk management purposes. For the three and nine months ended September 30, 2024, the Company recognized gains through interest income of $ 0.9 million and $ 1.8 million, respectively.


(In thousands)	Notional Amount		Fair Value		Balance Sheet Category
September 30, 2024
Interest rate contracts 1	$	817,762	$	26,259	Other Assets and Other Liabilities
Securities fair value hedges	400,000		692		Other Assets
Residential mortgage fair value hedges	400,000		794		Other Liabilities

December 31, 2023
Interest rate contracts 1	$	605,735	$	28,804	Other Assets and Other Liabilities
Securities fair value hedges	400,000		2,677		Other Assets
Residential mortgage fair value hedges	200,000		75		Other Liabilities
1 Interest rate contracts include risk participation agreements with notional amounts of $ 18.4 million and $ 9.4 million at September 30, 2024, and December 31, 2023, respectively with nominal fair value in both periods.

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The following table presents amounts recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.


	Carrying amount of the hedged items				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items

(In thousands)	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Securities available-for-sale 1	$	526,845	$	584,108	$	313	$	2,643
Loans, net 2	599,743		633,693		974		44
1 At September 30, 2024, and December 31, 2023, the amortized cost basis and unallocated basis adjustments used in hedging relationships was $ 608.4 million and $ 680.6 million, respectively. Refer to “Note 3 - Securities” for a reconciliation of the amortized cost and fair value of AFS securities.
2 These amounts represent the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At September 30, 2024, the portfolio layer method was $ 400 million, of which $ 400 million was designated as hedged. At December 31, 2023, the portfolio layer method was $ 200 million, of which $ 200 million was designated as hedged.

Note 7 – Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are accounted for as secured borrowings. For securities sold under agreements to repurchase, the Company is required to pledge collateral with value sufficient to fully collateralize borrowings. Company securities pledged were as follows by collateral type and maturity as of:

(In thousands)

September 30, 2024

December 31, 2023

Fair value of pledged securities - overnight and continuous:

Mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities

$ 253,244

396,378

Note 8 – Regulatory Capital

The Company is well-capitalized and at September 30, 2024, the Company and the Company’s principal banking subsidiary, Seacoast Bank, exceeded the Common Equity Tier 1 “(CET1)” capital ratio regulatory threshold of 6.5 % for well-capitalized institutions under the Basel III standardized transition approach, as well as risk-based and leverage ratio requirements for well-capitalized banks under the regulatory framework for prompt corrective action.

Note 9 – Contingent Liabilities

The Company and its subsidiaries, because of the nature of their business, are at all times subject to numerous legal actions, threatened or filed. Management presently believes that none of the legal proceedings to which it is a party are likely to have a materially adverse effect on the Company’s consolidated financial condition, operating results or cash flows.

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Note 10 – Fair Value

Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at September 30, 2024 and December 31, 2023 included:


(In thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At September 30, 2024
Financial Assets
Debt securities available-for-sale 1	$	2,160,055	$	197	$	2,159,858	$	—
Derivative financial instruments 2	26,951		—		26,951		—
Loans held for sale 2	11,039		—		11,039		—
Loans 3	3,974		—		—		3,974
Other real estate owned 3	6,421		—		—		6,421
Equity securities 4	13,918		13,918		—		—
Financial Liabilities
Derivative financial instruments 2	$	27,053	$	—	$	27,053	$	—

At December 31, 2023
Financial Assets
Debt securities available-for-sale 1	$	1,836,020	$	192	$	1,835,828	$	—
Derivative financial instruments 2	31,481		—		31,481		—
Loans held for sale 2	4,391		—		4,391		—
Loans 3	15,242		—		—		15,242
Other real estate owned 3	7,560		—		—		7,560
Equity securities 4	13,623		13,623		—		—
Financial Liabilities
Derivative financial instruments 2	$	28,879	$	—	$	28,879	$	—
1 See “Note 3 – Securities” for further detail of fair value of individual investment categories.
2 Recurring fair value basis determined using observable market data.
3 Fair value is measured on a nonrecurring basis.
4 Investment in shares of mutual funds that invest primarily in CRA-qualified debt securities, reported at fair value in Other Assets. Recurring fair value basis is determined using market quotations.

Loans and other real estate owned: Fair values of collateral-dependent real estate loans and other real estate owned are based on recent real estate appraisals less estimated costs of sale. Evaluations may use either a single valuation approach or a combination of approaches, such as comparative sales, cost and/or income approach. Adjustments to comparable sales may be made by an appraiser to reflect local market conditions or other economic factors and may result in changes in the fair value of an asset over time but none were made by management. As such, the fair values of these loans and properties are considered Level 3 in the fair value hierarchy. Collateral-dependent loans measured at fair value totaled $ 6.1 million with a specific reserve of $ 2.1 million at September 30, 2024, compared to $ 17.8 million with a specific reserve of $ 2.6 million at December 31, 2023.

For recurring fair value measurements, transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s monthly and/or quarterly valuation process. During the nine months ended September 30, 2024, there were no such transfers.

For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see “Note 16 - Fair Value” of the Annual Report on Form 10-K for the year ended December 31, 2023.

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The carrying amount and fair value of the Company’s other financial instruments that were not disclosed previously in the balance sheet and for which carrying amount is not fair value as of September 30, 2024 and December 31, 2023 is as follows:


(In thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2024
Financial Assets
Held-to-maturity debt securities 1	$	646,050	$	—	$	538,485	$	—
Time deposits with other banks	5,207		—		5,206		—
Loans, net	10,060,837		—		—		9,933,594
Financial Liabilities
Deposits	12,243,585		—		—		12,242,892
FHLB borrowings	245,000		—		240,697		—
Long-term debt	106,800		—		93,092		—

December 31, 2023

Held-to-maturity debt securities 1	$	680,313	$	—	$	558,359	$	—
Time deposits with other banks	5,857		—		5,756		—
Loans, net	9,898,767		—		—		9,805,693
Financial Liabilities
Deposits	11,776,935		—		—		11,775,613
FHLB borrowings	50,000		—		49,745		—
Long-term debt	109,458		—		100,851		—
1 See “Note 3 – Securities” for further detail of recurring fair value basis of individual investment categories.

The short maturity of Seacoast’s assets and liabilities results in a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and due from banks, interest bearing deposits with other banks, and securities sold under agreements to repurchase.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at September 30, 2024 and December 31, 2023:

Held-to-maturity debt securities : These debt securities are reported at fair value utilizing Level 2 inputs. The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flow analyses, using observable market data where available.

The Company reviews the prices supplied by independent pricing services, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. From time to time, the Company will validate, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from other brokers and third-party sources or derived using internal models.

Loans : Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, such as commercial or mortgage. Each loan category is further segmented into fixed and adjustable-rate interest terms as well as performing and nonperforming categories. The fair value of loans is calculated by discounting scheduled cash flows through the estimated life including prepayment considerations, using estimated market discount rates that reflect the risks inherent in the loan. The fair value approach considers market-driven variables including credit related factors and reflects an “exit price” as defined in ASC Topic 820.

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Deposit liabilities : The fair value of demand deposits, savings accounts and money market deposits is the amount payable at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for funding of similar remaining maturities.

Note 11 – Business Combinations

Acquisition of Professional Holding Corp.

On January 31, 2023, the Company completed its acquisition of Professional Holding Corp. (“Professional”). Simultaneously, upon completion of the merger of Professional and the Company, Professional Bank was merged with and into Seacoast Bank. Prior to the acquisition, Professional Bank operated nine branches across South Florida. The transaction further expanded the Company’s presence in the tri-county South Florida market, which includes Miami-Dade, Broward, and Palm Beach counties, Florida’s largest metropolitan statistical area and the 8th largest in the nation. The Company acquired 100 % of the outstanding common stock of Professional. Under the terms of the merger agreement, Professional shareholders received 0.8909 shares of Seacoast common stock for each share of Professional common stock held immediately prior to the merger, and Professional option holders received options to purchase Seacoast common stock, with the number of shares underlying each such option and the applicable exercise price adjusted using the same 0.8909 exchange ratio.


(In thousands, except per share data)	January 31, 2023
Number of Professional common shares outstanding	14,358
Per share exchange ratio	0.8909
Number of shares of SBCF common stock issued	12,792
Multiplied by common stock price per share at January 31, 2023	$	32.11
Value of SBCF common stock issued	$	410,738
Cash paid for fractional shares	5
Fair value of Professional options converted	10,304
Total purchase price	$	421,047

The acquisition of Professional was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The Company recognized goodwill of $ 251.7 million for this acquisition that is nondeductible for tax purposes. Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.

As part of the acquisition of Professional, options to purchase shares of Seacoast common stock were granted to replace outstanding Professional options. These options were fully vested upon acquisition. The full value of the replacement options, $ 10.3 million, was associated with pre-combination service and was therefore included in the calculation of the total purchase consideration.

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	Initially Measured		Measurement		As Adjusted
(In thousands)	January 31, 2023		Period Adjustments		January 31, 2023
Assets:
Cash and cash equivalents	$	141,680	$	—	$	141,680
Investment securities	167,059		—		167,059
Loans	1,991,713		( 5,544 )		1,986,169
Bank premises and equipment	2,478		—		2,478
Core deposit intangibles	48,885		—		48,885
Goodwill	248,091		3,583		251,674
BOLI	55,071		—		55,071
Other Assets	74,232		2,561		76,793
Total Assets	$	2,729,209	$	600	$	2,729,809

Liabilities:
Deposits	$	2,119,341	$	—	$	2,119,341
Subordinated debt	21,141		—		21,141
Other Liabilities	167,680		600		168,280
Total Liabilities	$	2,308,162	$	600	$	2,308,762

The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date.


	January 31, 2023
(In thousands)	Book Balance		Fair Value
Loans:
Construction and land development	$	156,048	$	151,012
Commercial real estate - owner occupied	293,473		274,068
Commercial real estate - non-owner occupied	752,393		692,746
Residential real estate	509,305		483,611
Commercial and financial	392,396		350,628
Consumer	33,656		32,153
PPP Loans	1,951		1,951
Total acquired loans	$	2,139,222	$	1,986,169

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The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination:


(In thousands)	January 31, 2023
Book balance of loans at acquisition	$	155,031
Allowance for credit losses at acquisition	( 18,879 )
Non-credit related discount	( 12,361 )
Total PCD loans acquired	$	123,791

The acquisition of Professional resulted in the addition of $ 45.5 million in allowance for credit losses, including the $ 18.9 million identified in the table above for PCD loans, and $ 26.6 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition. Included within the $ 18.9 million initial PCD allowance is $ 5.5 million recorded as a measurement period adjustment during the three months ended September 30, 2023, reflecting information obtained by the Company relating to events or circumstances existing at the acquisition date.

The Company believes the deposits assumed in the acquisition have an intangible value. In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships. The core deposit intangible asset acquired from Professional is being amortized over eight years using an accelerated method of amortization.

Acquisition Costs

Acquisition costs were $ 33.2 million for the nine months ended September 30, 2023.

Note 12 – Subsequent Event

In October 2024, the Company took advantage of favorable market conditions and repositioned a portion of its AFS securities portfolio. Securities with an average book yield of 2.8 % were sold, resulting in a pre-tax loss of approximately $ 8.0 million impacting fourth quarter 2024 results. The proceeds of approximately $ 113.0 million were reinvested in agency mortgage-backed securities with an average book yield of 5.4 %, for an estimated earnback of less than three years .

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this discussion and analysis is to aid in understanding significant changes in the financial condition of Seacoast Banking Corporation of Florida and its subsidiaries (“Seacoast” or the “Company”) and their results of operations. Nearly all of the Company’s operations are contained in its banking subsidiary, Seacoast National Bank (“Seacoast Bank” or the “Bank”). Such discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and the related notes included in this report.

The emphasis of this discussion will be on the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be the balances as of September 30, 2024 compared to December 31, 2023.

This discussion and analysis contain statements that may be considered “forward-looking statements” as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See the following section for additional information regarding forward-looking statements.

For purposes of the following discussion, the words “Seacoast” or the “Company” refer to the combined entities of Seacoast Banking Corporation of Florida and its direct and indirect wholly owned subsidiaries.

Special Cautionary Notice Regarding Forward-Looking Statements

Certain statements made or incorporated by reference herein which are not statements of historical fact, including those under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein, are “forward-looking statements” within the meaning, and protections, of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements with respect to the Company’s 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 the Company’s control, and which may cause the actual results, performance or achievements of

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Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) or its wholly-owned banking subsidiary, Seacoast National Bank (“Seacoast Bank”), to be materially different from those set forth in the forward-looking statements.

All statements other than statements of historical fact could be forward-looking statements. You can identify these forward-looking statements through the 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 impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within Seacoast’s primary market areas, including the effects of inflationary pressures, changes in interest rates, slowdowns in economic growth, and the potential for high unemployment rates, as well as the financial stress on borrowers and changes to customer and client behavior and credit risk as a result of the foregoing;

• Potential impacts of adverse developments in the banking industry, including those highlighted by high-profile bank failures, and including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto (including increases in the cost of our deposit insurance assessments), the Company’s ability to effectively manage its liquidity risk and any growth plans, and the availability of capital and funding;

• 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 proposed overdraft and late fee caps, including those that impact the money supply and inflation;

• The risks of changes in interest rates on the level and composition of deposits (as well as the cost of, and competition for, deposits), loan demand, liquidity and the values of loan collateral, securities, and interest rate sensitive assets and liabilities;

• Interest rate risks (including the impact of interest rates on macroeconomic conditions, customer and client behavior, and on our net interest income), as well as the impact of fluctuating interest rates on our financial projections and models, sensitivities, and the shape of the yield curve;

• Changes in accounting policies, rules, and practices;

• Changes in retail distribution strategies, customer preferences and behavior generally and as a result of economic factors, including heightened inflation;

• 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, especially as they relate to the value of collateral supporting the Company’s loans;

• The Company’s concentration in commercial real estate loans and in real estate collateral in Florida;

• Seacoast’s ability to comply with any regulatory requirements and the risk that the regulatory environment may not be conducive to or may prohibit or delay the consummation of future mergers and/or business combinations, may increase the length of time and amount of resources required to consummate such transactions, and may reduce the anticipated benefit;

• 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 Seacoast’s investments due to market volatility or counterparty payment risk, as well as the effect of a decline in stock market prices on our fee income from our wealth management business;

• Statutory and regulatory dividend restrictions; increases in regulatory capital requirements for banking organizations generally;

• The risks of mergers, acquisitions and divestitures, including Seacoast’s 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;

• The Company’s ability to identify and address increased cybersecurity risks, including those impacting vendors and other third parties which may be exacerbated by developments in generative artificial intelligence;

• Fraud or misconduct by internal or external parties, which Seacoast may not be able to prevent, detect or mitigate;

• Inability of Seacoast’s risk management framework to manage risks associated with the Company’s business;

• Dependence on key suppliers or vendors to obtain equipment or services for the business on acceptable terms;

• Reduction in or the termination of Seacoast’s ability to use the online- or mobile-based platform that is critical to the Company’s business growth strategy;

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• The effects of war or other conflicts, acts of terrorism, natural disasters, including hurricanes in the Company’s footprint, health emergencies, epidemics or pandemics, or other catastrophic events that may affect general economic conditions and/or increase costs, including, but not limited to, property and casualty and other insurance costs;

• Seacoast’s ability to maintain adequate internal controls over financial reporting;

• Potential claims, damages, penalties, fines, costs and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions;

• The risks that deferred tax assets could be reduced if estimates of future taxable income from the Company’s operations and tax planning strategies are less than currently estimated, the results of tax audit findings, challenges to our tax positions, or adverse changes or interpretations of tax laws;

• The effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, non-bank financial technology providers, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions;

• The failure of assumptions underlying the establishment of reserves for expected credit losses;

• Risks related to, and the costs associated with, environmental, social and governance (“ESG”) matters, including the scope and pace of related rulemaking activity and disclosure requirements;

• A deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the federal budget and economic policy;

• The risk that balance sheet, revenue growth, and loan growth expectations may differ from actual results; and

• Other factors and risks described under “Risk Factors” herein and in any of the Company’s subsequent reports filed with the SEC and available on its website at www.sec.gov.

All written or oral forward-looking statements that are made or are attributable to Seacoast are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in the Company’s annual report on Form 10-K for the year ended December 31, 2023 and in other periodic reports that the Company files with the SEC. The Company assumes no obligation to update, revise or correct any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.

Results of Operations

Seacoast provides integrated financial services including commercial and consumer banking, wealth management, and mortgage services to customers at 77 full-service branches across Florida, and through advanced mobile and online banking solutions. The Company’s financial results in the third quarter of 2024 include strong growth in loans and deposits supporting improved net interest income. Growth in noninterest income continues, and with significant cost-saving initiatives now complete, Seacoast continues to prudently manage expenses while strategically investing to support continued growth. Highlights for the third quarter of 2024 include:

• Net income of $30.7 million, or $0.36 per average diluted share, an increase of $0.4 million, or 1%, from the prior quarter.

• Pre-tax pre-provision earnings on an adjusted basis 1 increased $1.9 million to $46.4 million from the prior quarter.

• Tangible book value per share increased 20% on an annualized basis to $16.20.

• Loans grew 6.6% on an annualized basis to $10.2 billion, and the overall loan pipeline remained strong at $831.1 million.

• Growth in customer deposits, excluding brokered deposits, of $195.9 million, or 6.6% annualized.

• Noninterest bearing deposits grew $45.5 million, or 5.3% annualized.

• Net interest margin was 3.17%, nearly flat compared to 3.18% in the prior quarter, and net interest margin, excluding accretion on acquired loans, expanded to 2.90% from 2.87%.

• Net interest income of $106.7 million, an increase of $2.2 million, or 2%, from the second quarter of 2024.

• Noninterest income increased to $23.7 million, representing a 33% year-over-year increase compared to the three months ended September 30, 2023.

• Strong capital position, with a Tier 1 capital ratio of 14.8%, and a tangible common equity to tangible assets ratio of 9.6%.

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The Company’s focus on organic customer growth and recent talent additions are generating momentum across its markets and business segments. The results for the third quarter of 2024 evidence the inflection in growth and the start of margin expansion expected during the second half of 2024.

For the third quarter of 2024, the Company reported net income of $30.7 million, or $0.36 per average diluted share, an increase of $0.4 million, or 1%, from the second quarter of 2024 and a decrease of $0.8 million, or 2%, compared to the third quarter of 2023. Adjusted net income 1 for the third quarter of 2024 totaled $30.5 million, or $0.36 per average diluted share, an increase of $0.2 million, or 1%, compared to the second quarter of 2024 and a decrease of $3.7 million, or 11%, compared to the third quarter of 2023. For the nine months ended September 30, 2024, net income totaled $86.9 million, or $1.02 per average diluted share, an increase of $12.4 million, or 17%, compared to the nine months ended September 30, 2023. For the nine months ended September 30, 2024, adjusted net income 1 totaled $91.9 million, or $1.08 per average diluted share, compared to $101.9 million, or $1.21 per average diluted share for the nine months ended September 30, 2023.


	Third		Second		Third		Nine Months Ended
	Quarter		Quarter		Quarter		September 30,
	2024		2024		2023		2024		2023
Return on average tangible assets	0.99	%	1.00	%	1.04	%	0.96	%	0.88	%
Return on average tangible shareholders’ equity	10.31		10.75		11.90		10.21		10.09

Efficiency ratio	59.84		60.21		62.60		62.24		65.19

Adjusted return on average tangible assets 1	0.98	%	1.00	%	1.12	%	1.01	%	1.15	%
Adjusted return on average tangible shareholders’ equity 1	10.27		10.76		12.79		10.72		13.14

Adjusted efficiency ratio 1	59.84		60.21		60.19		60.39		56.47
1 Non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and a reconciliation to GAAP.

Net Interest Income and Margin

Net interest income for the third quarter of 2024 totaled $106.7 million, an increase of $2.2 million, or 2%, compared to the second quarter of 2024, and a decrease of $12.6 million , or 11% , c ompared to the third quarter of 2023. For the nine months ended September 30, 2024, net interest income totaled $316.2 million, a decrease of $61.3 million, or 16%, compared to the nine months ended September 30, 2023. In the loan portfolio, higher interest income from new loan production was partially offset by lower accretion of purchase discount on acquired loans. Recent purchases in the securities portfolio contributed to higher securities yields. Higher interest expense on deposits reflects the impact of higher rates, with cuts to the federal funds rate late in the quarter not yet fully impacting the third quarter of 2024 results.

Net interest income (on a fully taxable equivalent basis) 1 for the third quarter of 2024 was $107.0 million, an increase of $2.3 million, or 2%, compared to the second quarter of 2024, and a decrease of $12.5 million, or 10%, c ompared to the third quarter of 2023. Accretion on acquired loans totaled $9.2 million for the third quarter of 2024, compared to $10.2 million for the second quarter of 2024, and $14.8 million for the third quarter of 2023. For the nine months ended September 30, 2024, net interest income (on a fully taxable equivalent basis) 1 was $316.9 million, a decrease of $61.1 million, or 16%, compared to the nine months ended September 30, 2023. Accretion on acquired loans totaled $30.0 million for the nine months ended September 30, 2024, compared to $45.4 million for the nine months ended September 30, 2023.

Net interest margin (on a fully taxable equivalent basis) 1 decreased one basis point to 3.17% in the third quarter of 2024, compared to 3.18% in the second quarter of 2024, and decreased 40 basis points from 3.57% in the third quarter of 2023, largely driven by higher deposit costs. Compared to the second quarter of 2024, securities yields increased six basis points in the third quarter of 2024 to 3.75% and increased 42 basis points from the third quarter of 2023. The yield on loans increased to 5.94% for the third quarter of 2024, an increase of one basis point from both the second quarter of 2024 and from the third quarter of 2023. The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 27 basis points for the third quarter of 2024, 30 basis points in the second quarter, and 44 basis points in the third quarter of 2023. The cost of deposits was 2.34% in the third quarter of 2024, compared to 2.31% in the second quarter of 2024, and 1.79% in the third quarter of 2023.

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

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For the nine months ended September 30, 2024, net interest margin (on a fully taxable equivalent basis) 1 decreased 72 basis points to 3.19% compared to the nine months ended September 30, 2023, largely driven by higher deposit costs. The yield on securities was 3.65% for the nine months ended September 30, 2024, compared to 3.10% for the nine months ended September 30, 2023. The yield on total loans increased from 5.89% for the nine months ended September 30, 2023 to 5.93% for the nine months ended September 30, 2024. The effect on net interest margin of accretion of purchase discounts on acquired loans was an increase of 30 basis points for the nine months ended September 30, 2024, and 47 basis points for the nine months ended September 30, 2023. The cost of deposits was 2.28% for the nine months ended September 30, 2024, an increase of 95 basis points compared to the nine months ended September 30, 2023.

In the remainder of 2024, the Company expects to continue growing customer relationships resulting in growth in loans and deposits. This growth, combined with lower rates on deposits resulting from expected short-term interest rate reductions, should benefit net interest income and net interest margin in the fourth quarter of 2024.

The following table details the trend for net interest income and margin results (on a fully taxable equivalent basis) 1 , the yield on earning assets and the rate paid on interest bearing liabilities for the periods specified:


(In thousands, except ratios)	Net Interest Income 1		Net Interest Margin 1		Yield on Earning Assets 1		Rate on Interest Bearing Liabilities
Third quarter 2024	$	106,975	3.17	%	5.46	%	3.32	%
Second quarter 2024	104,657		3.18	%	5.47	%	3.33	%
Third quarter 2023	119,505		3.57	%	5.38	%	2.76	%

Nine months ended September 30, 2024	316,930		3.19	%	5.44	%	3.28	%
Nine months ended September 30, 2023	378,009		3.91	%	5.30	%	2.19	%
1 On a fully taxable equivalent basis, a non-GAAP measure - see “ Explanation of Certain Unaudited Non-GAAP Financial Measures ” for more information and a reconciliation to GAAP.

Average loans increased $123.7 million, or 1%, for the third quarter of 2024 compared to the second quarter of 2024, and increased $85.2 million, or 1%, from the third quarter of 2023. For the nine months ended September 30, 2024, average loans increased $216.0 million, or 2%, from the nine months ended September 30, 2023.

Average loans as a percentage of average earning assets totaled 75% for the third quarter of 2024, 76% for the second quarter of 2024 and 76% for the third quarter of 2023. For each of the nine months ended September 30, 2024 and September 30, 2023, average loans as a percentage of average earning assets totaled 76%.

During the third quarter of 2024, average investment securities increased $127.1 million, or 4.8%, compared to the second quarter of 2024, and increased $171.9 million, or 6.6%, compared to the third quarter of 2023. Securities yields increased six basis points to 3.75% during the third quarter of 2024 from 3.69% in the second quarter of 2024, benefiting from recent purchases. For the nine months ended September 30, 2024, average investment securities were $2.7 billion, a decrease of $3.7 million compared to the nine months ended September 30, 2023.

The cost of average interest-bearing liabilities decreased one basis point in the third quarter of 2024 to 3.32% from 3.33% in the second quarter of 2024, and increased 56 basis points from 2.76% in the third quarter of 2023. The cost of average total deposits (including noninterest bearing demand deposits) was 2.34% in the third quarter of 2024, 2.31% in the second quarter of 2024 and 1.79% in the third quarter of 2023. For the nine months ended September 30, 2024, the cost of average total deposits (including noninterest bearing demand deposits) was 2.28% compared to 1.33% for the nine months ended September 30, 2023.

During the third quarter of 2024, average transaction deposits (noninterest and interest-bearing demand) decreased $273.4 million, or 4%, compared to the second quarter of 2024 and decreased $909.2 million, or 13%, compared to the third quarter of 2023. For the nine months ended September 30, 2024, average transaction deposits decreased $751.8 million, or 11%, compared to the nine months ended September 30, 2023. Declines reflect shifts in customer preference during the periods toward money market accounts, which increased $276.5 million, or 8%, in the third quarter of 2024 compared to the prior quarter, and increased $841.7 million, or 30%, in the nine months ended September 30, 2024 compared to the prior year period. The Company’s deposit mix remains favorable, with 86% of average deposit balances comprised of savings, money market, and demand deposits for the nine months ended September 30, 2024.

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Average balances of sweep repurchase agreements with customers decreased $52.5 million, or 18%, from the second quarter of 2024 and decreased $86.6 million, or 26%, compared to the third quarter of 2023. The average rate on customer sweep repurchase accounts was 3.37% for the third quarter of 2024, compared to 3.68% for the second quarter of 2024, and 3.48% for the third quarter of 2023. For the nine months ended September 30, 2024, the average balance was $289.2 million, compared to an average balance of $249.2 million for the nine months ended September 30, 2023 with average rates of 3.61% and 2.86%, respectively.

The Company had an average balance of $237.9 million in FHLB borrowings outstanding for the third quarter of 2024, with an average interest rate of 4.26%, compared to $149.2 million for the second quarter of 2024, with an average interest rate of 4.29%, and $111.1 million for the third quarter of 2023, with an average interest rate of 3.17%. The Company had an average balance of $163.5 million in FHLB borrowings outstanding for the nine months ended September 30, 2024, with an average interest rate of 4.17%, compared to $214.4 million for the nine months ended September 30, 2023, with an average interest rate of 3.70%.

Long-term debt balances averaged $106.7 million in the third quarter of 2024, $106.5 million in the second quarter of 2024, and $106.0 million in the third quarter of 2023. The average rate on long-term debt for the third quarter of 2024 was 7.05%, an increase of two basis points compared to the second quarter of 2024 and a decrease of 13 basis points compared to the third quarter of 2023. For the nine months ended September 30, 2024, long-term debt averaged $106.5 million, compared to $103.5 million for the nine months ended September 30, 2023. The average rate on long-term debt for the nine months ended September 30, 2024 was 7.13%, an increase of 25 basis points compared to the nine months ended September 30, 2023. The long-term debt is comprised of trust preferred securities issued by subsidiary trusts of the Company, and notes assumed in bank acquisitions in 2022 and 2023.

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The following tables detail average balances, net interest income and margin results (on a fully taxable equivalent basis, a non-GAAP measure) for the periods presented:


Average Balances, Interest Income and Expenses, Yields and Rates 1

		2024												2023
		Third Quarter						Second Quarter						Third Quarter
		Average				Yield/		Average				Yield/		Average				Yield/
(In thousands, except ratios)		Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Assets
Earning assets:
Securities:
Taxable	`	$	2,756,502	$	25,963	3.75	%	$	2,629,716	$	24,155	3.69	%	$	2,575,002	$	21,401	3.32	%
Nontaxable		5,701		42		2.93		5,423		40		2.97		15,280		119		3.11
Total Securities		2,762,203		26,005		3.75		2,635,139		24,195		3.69		2,590,282		21,520		3.32

Federal funds sold		433,423		5,906		5.42		510,401		6,967		5.49		547,576		7,415		5.37
Interest bearing deposits with other banks and other investments		102,700		1,232		4.77		98,942		1,361		5.53		90,039		1,062		4.68
Total Loans, net		10,128,822		151,282		5.94		10,005,122		147,518		5.93		10,043,611		150,048		5.93
Total Earning Assets		13,427,148		184,425		5.46		13,249,604		180,041		5.47		13,271,508		180,045		5.38

Allowance for credit losses		(141,974)						(146,380)						(158,440)
Cash and due from banks		167,103						168,439						168,931
Premises and equipment, net		109,699						110,709						116,704
Intangible assets		812,761						818,914						839,787
Bank owned life insurance		304,703						302,165						295,272
Other assets including deferred tax assets		317,406						336,256						372,241
Total Assets		$	14,996,846					$	14,839,707					$	14,906,003

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand		$	2,489,674	$	12,905	2.06	%	$	2,670,569	$	14,946	2.25	%	$	2,804,243	$	15,013	2.12	%
Savings		546,473		601		0.44		584,490		560		0.39		770,503		465		0.24
Money market		3,942,357		38,457		3.88		3,665,858		35,813		3.93		2,972,495		22,918		3.06
Time deposits		1,716,720		19,002		4.40		1,631,290		17,928		4.42		1,619,572		16,461		4.03
Securities sold under agreements to repurchase		241,083		2,044		3.37		293,603		2,683		3.68		327,711		2,876		3.48
Federal Home Loan Bank borrowings		237,935		2,549		4.26		149,234		1,592		4.29		111,087		888		3.17
Long-term debt, net		106,706		1,892		7.05		106,532		1,862		7.03		106,036		1,919		7.18
Total Interest-Bearing Liabilities		9,280,948		77,450		3.32		9,101,576		75,384		3.33		8,711,647		60,540		2.76
Noninterest demand		3,393,110						3,485,603						3,987,761
Other liabilities		154,344						134,900						133,846
Total Liabilities		12,828,402						12,722,079						12,833,254

Shareholders’ equity		2,168,444						2,117,628						2,072,747

Total Liabilities & Equity		$	14,996,846					$	14,839,707					$	14,906,003

Cost of deposits						2.34	%					2.31	%					1.79	%
Interest expense as a % of earning assets						2.29	%					2.29	%					1.81	%
Net interest income as a % of earning assets				$	106,975	3.17	%			$	104,657	3.18	%			$	119,505	3.57	%

1 On a fully taxable equivalent basis, a non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and a reconciliation to GAAP. All yields and rates have been computed on an annual basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.



Average Balances, Interest Income and Expenses, Yields and Rates 1

	2024						2023
	Nine Months Ended September 30,						Nine Months Ended September 30,
	Average				Yield/		Average				Yield/
(In thousands, except ratios)	Balance		Interest		Rate		Balance		Interest		Rate
Assets
Earning assets:
Securities:
Taxable	$	2,655,422	$	72,511	3.65	%	$	2,649,127	$	61,543	3.10	%
Nontaxable	5,677		123		2.89		15,721		370		3.14
Total Securities	2,661,099		72,634		3.65		2,664,848		61,913		3.10

Federal funds sold	438,089		17,929		5.47		336,022		12,444		4.95
Interest bearing deposits with other banks and other investments	102,415		3,721		4.85		90,511		4,530		6.69
Total Loans, net	10,056,466		446,108		5.93		9,840,484		433,821		5.89
Total Earning Assets	13,258,069		540,392		5.44		12,931,865		512,708		5.30

Allowance for credit losses	(145,579)						(151,613)
Cash and due from banks	167,424						185,426
Premises and equipment, net	110,929						116,840
Intangible assets	819,046						811,483
Bank owned life insurance	302,220						287,756
Other assets including deferred tax assets	330,898						402,175
Total Assets	$	14,843,007					$	14,583,932

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand	$	2,626,026	$	43,117	2.19	%	$	2,642,180	$	25,780	1.30	%
Savings	586,285		1,701		0.39		909,184		1,292		0.19
Money market	3,673,493		105,998		3.85		2,831,747		54,540		2.58
Time deposits	1,646,285		54,051		4.39		1,288,736		36,490		3.79
Securities sold under agreements to repurchase	289,181		7,806		3.61		249,242		5,333		2.86
Federal Home Loan Bank borrowings	163,468		5,101		4.17		214,415		5,936		3.70
Long-term debt, net	106,538		5,688		7.13		103,469		5,328		6.88
Total Interest-Bearing Liabilities	9,091,276		223,462		3.28		8,238,973		134,699		2.19
Noninterest demand	3,468,790						4,204,389
Other liabilities	148,000						126,487
Total Liabilities	12,708,066						12,569,849

Shareholders' equity	2,134,941						2,014,083

Total Liabilities & Equity	$	14,843,007					$	14,583,932

Cost of deposits					2.28	%					1.33	%
Interest expense as a % of earning assets					2.25	%					1.39	%
Net interest income as a % of earning assets			$	316,930	3.19	%			$	378,009	3.91	%

1 On a fully taxable equivalent basis, a non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and a reconciliation to GAAP. All yields and rates have been computed on an annual basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.

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Noninterest Income

Noninterest income totaled $23.7 million for the third quarter of 2024, an increase of $1.5 million, or 7%, compared to the second quarter of 2024 and an increase of $5.9 million, or 33%, from the third quarter of 2023. Noninterest income totaled $66.4 million for the nine months ended September 30, 2024, an increase of $4.5 million, or 7%, compared to the nine months ended September 30, 2023.

Noninterest income is detailed as follows:


	Third		Second		Third		Nine Months Ended
	Quarter		Quarter		Quarter		September 30,
(In thousands)	2024		2024		2023		2024		2023
Service charges on deposit accounts	$	5,412	$	5,342	$	4,648	$	15,714	$	13,450
Interchange income	1,911		1,940		1,684		5,739		11,444
Wealth management income	3,843		3,766		3,138		11,149		9,519
Mortgage banking fees	485		582		410		1,448		1,412
Insurance agency income	1,399		1,355		1,183		4,045		3,444
SBA gains	391		694		613		1,824		1,184
BOLI income	2,578		2,596		2,197		7,438		6,181
Other	7,473		5,953		4,307		18,631		15,636
	23,492		22,228		18,180		65,988		62,270
Securities gains (losses), net	187		(44)		(387)		372		(456)
Total	$	23,679	$	22,184	$	17,793	$	66,360	$	61,814

Service charges on deposits were $5.4 million in the third quarter of 2024, compared to $5.3 million in the second quarter of 2024, and $4.6 million in the third quarter of 2023. For the nine months ended September 30, 2024, service charges on deposits totaled $15.7 million, an increase of $2.3 million, or 17%, compared to the nine months ended September 30, 2023. The Company’s investments in talent and market expansion across the state have resulted in continued growth in treasury management services to commercial customers.

Interchange income remained flat compared to the second quarter of 2024 and increased $0.2 million, or 13%, compared to the third quarter of 2023. The increase from the prior year quarter reflects continued organic growth. For the nine months ended September 30, 2024, interchange income totaled $5.7 million, a decrease of $5.7 million, or 50%, compared to the nine months ended September 30, 2023, due to the impact of the Durbin amendment, which became effective for the Company on July 1, 2023.

Wealth management income, including trust fees and brokerage commissions and fees, was $3.8 million in both the second and third quarters of 2024, compared to $3.1 million for the third quarter of 2023. For the nine months ended September 30, 2024, wealth management income totaled $11.1 million, an increase of $1.6 million, or 17%, compared to the nine months ended September 30, 2023. The wealth management division continues to demonstrate success in building relationships, and assets under management have increased $276.5 million, or 16%, from December 31, 2023, to $2.0 billion at September 30, 2024.

Insurance agency income was similar to the second quarter of 2024 and totaled $1.4 million for the three months ended September 30, 2024, compared to $1.2 million in the third quarter of 2023. For the nine months ended September 30, 2024, insurance agency income totaled $4.0 million, an increase of $0.6 million, or 17%, compared to the nine months ended September 30, 2023, reflecting continued growth and expansion of insurance services.

Bank owned life insurance (“BOLI”) income of $2.6 million for the third quarter of 2024 was consistent with the second quarter of 2024 and increased $0.4 million, or 17%, from $2.2 million for the third quarter of 2023. For the nine months ended September 30, 2024, BOLI income totaled $7.4 million, an increase of $1.3 million, or 20%, compared to the nine months ended September 30, 2023, with policy exchanges executed in the first quarter of 2024 resulting in improved ongoing yields.

Other income was $7.5 million in the third quarter of 2024, an increase of $1.5 million, or 26%, compared to the second quarter of 2024, and an increase of $3.2 million, or 74%, compared to the third quarter of 2023. For the nine months ended September 30, 2024, other income totaled $18.6 million, an increase of $3.0 million, or 19%, compared to the nine months ended September 30, 2023. Changes in each period reflect variability in income from SBIC investments, loan swap-related fees, and other fees correlating with growth in customers and accounts.

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Net securities activity resulted in gains of $0.2 million during the third quarter of 2024, losses of $44 thousand in the second quarter of 2024 , and losses of $0.4 million in the third quarter of 2023. For the nine months ended September 30, 2024, net securities activity resulted in gains of $0.4 million, compared to losses of $0.5 million for the nine months ended September 30, 2023. The first quarter of 2024 included gains of $4.1 million on the sale of the Company’s holdings of Visa Class B stock, which were largely offset by losses of $3.8 million on the sale of $86.8 million, or 3%, of the bank’s investment securities portfolio. The proceeds were reinvested at a yield of 5.53%, with an expected earnback on the trade of 1.9 years.

In October 2024, the Company took advantage of favorable market conditions and repositioned a portion of its available for sale securities portfolio. Securities with an average book yield of 2.8% were sold, resulting in a pre-tax loss of approximately $8.0 million impacting fourth quarter 2024 results. The proceeds of approximately $113.0 million were reinvested in agency mortgage-backed securities with an average book yield of 5.4%, for an estimated earnback of less than three years.

Noninterest Expenses

Noninterest expense for the third quarter of 2024 totaled $84.8 million, an increase of $2.3 million, or 3%, compared to the second quarter of 2024, and a decrease of $9.1 million, or 10%, from the third quarter of 2023. For the nine months ended September 30, 2024, noninterest expense totaled $257.7 million, a decrease of $51.5 million, or 17%, compared to the nine months ended September 30, 2023. The decreases from 2023 are the result of cost-saving initiatives and prudent management of expenses, while maintaining strategic investments to support continued growth. Noninterest expenses are detailed as follows:


	Third		Second		Third		Nine Months Ended
	Quarter		Quarter		Quarter		September 30,
(In thousands)	2024		2024		2023		2024		2023

Salaries and wages	$	40,697	$	38,937	$	46,431	$	119,938	$	139,202
Employee benefits	6,955		6,861		7,206		21,705		23,240
Outsourced data processing costs	8,003		8,210		8,714		28,331		43,489
Occupancy	7,096		7,180		7,758		22,313		24,360
Furniture and equipment	2,060		1,956		2,052		6,027		6,664
Marketing	2,729		3,266		1,876		8,650		6,161
Legal and professional fees	2,708		1,982		2,679		6,841		14,220
FDIC assessments	1,882		2,131		2,258		6,171		5,817
Amortization of intangibles	6,002		6,003		7,457		18,297		21,838
Other real estate owned expense and net (gain) loss on sale	491		(109)		274		356		412
Provision for credit losses on unfunded commitments	250		251		—		751		1,239
Other	5,945		5,869		7,210		18,346		22,613
Total	$	84,818	$	82,537	$	93,915	$	257,726	$	309,255

Salaries and wages totaled $40.7 million for the third quarter of 2024, $38.9 million for the second quarter of 2024, and $46.4 million for the third quarter of 2023. The third quarter of 2024 reflects continued additions to the banking team as the Company focuses on organic growth. For the nine months ended September 30, 2024, salaries and wages totaled $119.9 million, a decrease of $19.3 million, or 14%, compared to the nine months ended September 30, 2023. A workforce reduction in early 2024 partially offset revenue compression from higher interest rates.

During the third quarter of 2024, employee benefits, which include costs associated with the Company’s self-funded health insurance benefits, 401(k) plan, payroll taxes, and unemployment compensation, were $7.0 million, an increase of $0.1 million, or 1%, compared to the second quarter of 2024, and a decrease of $0.3 million, or 3%, compared to the third quarter of 2023. For the nine months ended September 30, 2024, employee benefit costs totaled $21.7 million, a decrease of $1.5 million, or 7%, compared to the nine months ended September 30, 2023. The decreases compared to the 2023 periods are related to reductions in the workforce.

The Company utilizes third parties for its core data processing systems. Ongoing data processing costs are directly related to the number of transactions processed and the negotiated rates associated with those transactions. Outsourced data processing costs totaled $8.0 million, $8.2 million, and $8.7 million for the third quarter of 2024, second quarter of 2024, and third quarter of 2023, respectively. Lower expenses in the third quarter of 2024 reflect the benefit of lower negotiated rates with key service providers. For the nine months ended September 30, 2024, outsourced data processing costs totaled $28.3 million, a decrease of

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$15.2 million, or 35%, compared to the nine months ended September 30, 2023. The 2023 period included $17.5 million in costs directly associated with bank acquisitions.

Total occupancy and furniture and equipment expenses were $9.2 million in the third quarter of 2024, $9.1 million in the second quarter of 2024, and $9.8 million in the third quarter of 2023. The decrease in expenses compared to the third quarter of 2023 is the result of expense reduction efforts completed during 2024. For the nine months ended September 30, 2024, occupancy and furniture and equipment expenses totaled $28.3 million, a decrease of $2.7 million, or 9%, compared to the nine months ended September 30, 2023.

Marketing expenses totaled $2.7 million in the third quarter of 2024, $3.3 million in the second quarter of 2024, and $1.9 million in the third quarter of 2023. For the nine months ended September 30, 2024, marketing expenses totaled $8.7 million, an increase of $2.5 million, or 40%, compared to the nine months ended September 30, 2023. Planned investments in branding and in marketing campaigns across the state led to higher marketing expenses in 2024, with changes between periods driven by the timing of various campaigns.

Legal and professional fees for the third quarter of 2024 were $2.7 million, an increase of $0.7 million, or 37%, compared to the second quarter of 2024, and similar to expenses in the third quarter of 2023. For the nine months ended September 30, 2024, legal and professional fees totaled $6.8 million, a decrease of $7.4 million, or 52%, compared to the nine months ended September 30, 2023. The 2023 period included $6.5 million in costs directly associated with bank acquisitions.

Provision for Credit Losses

The provision for credit losses was $6.3 million for the third quarter of 2024, compared to $4.9 million for the second quarter of 2024, and $2.7 million for the third quarter of 2023. For the nine months ended September 30, 2024, provision for credit losses was $12.6 million, compared to $33.5 million for the nine months ended September 30, 2023. The first quarter of 2023 included a $26.6 million day-one provision recorded in conjunction with the Professional acquisition. Excluding the day-one provision, the increase for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to loan growth.

In late September and early October 2024, communities across our corporate footprint were impacted by Hurricanes Helene and Milton. We maintained uninterrupted digital and telephone access for our customers and, having experienced minimal impacts to our branch properties, we fully reopened to serve our communities shortly after each storm passed. Recovery efforts in many areas continue and the full impacts on people and businesses in the most hard-hit regions are not fully known. We do not expect a significant impact from Hurricane Helene, but an additional provision for credit losses may be warranted in the fourth quarter of 2024 for the impacts of Hurricane Milton, in a range between approximately $5 million and $10 million.

Income Taxes

For the third quarter of 2024, the Company recorded tax expense of $8.6 million, a decrease of $0.3 million, or 3%, compared to the second quarter of 2024 and a decrease of $0.5 million, or 5%, compared to the third quarter of 2023. The effective tax rate for the third quarter of 2024 was 21.9%, compared to 22.4% in the second quarter of 2024 and 22.8% in the third quarter of 2023. For the nine months ended September 30, 2024, tax expense totaled $25.3 million, an increase of $3.4 million, or 15%, compared to the nine months ended September 30, 2023, with an effective tax rate of 22.6% for the nine months ended September 30, 2024, compared to 22.8% for the nine months ended September 30, 2023.

Explanation of Certain Unaudited Non-GAAP Financial Measures

This report contains financial information determined by methods other than Generally Accepted Accounting Principles (“GAAP”). The financial highlights provide reconciliations between GAAP and adjusted financial measures including net income, fully taxable equivalent net interest income, noninterest income, noninterest expense, tax adjustments, net interest margin and other financial ratios. Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’ understanding of the Company’s business and performance and if not provided would be requested by the investor community. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might define or calculate these measures differently. The Company provides reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP.

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Reconciliation of Non-GAAP Measures


	Third			Second			Third			Nine Months Ended
	Quarter			Quarter			Quarter			September 30,
(Amounts in thousands, except per share data)	2024			2024			2023			2024			2023
Net income	$	30,651		$	30,244		$	31,414		$	86,901		$	74,490

Total noninterest income	$	23,679		$	22,184		$	17,793		$	66,360		$	61,814
Securities (gains)/losses, net	(187)			44			387			(372)			456
BOLI benefits on death (included in other income)	—			—			—			—			(2,117)
Total adjustments to noninterest income	(187)			44			387			(372)			(1,661)
Total adjusted noninterest income	$	23,492		$	22,228		$	18,180		$	65,988		$	60,153

Total noninterest expense	$	84,818		$	82,537		$	93,915		$	257,726		$	309,255
Merger related charges	—			—			—			—			(33,180)
Branch reductions and other expense initiatives 1	—			—			(3,305)			(7,094)			(5,167)
Adjustments to noninterest expense	—			—			(3,305)			(7,094)			(38,347)
Adjusted noninterest expense 2	$	84,818		$	82,537		$	90,610		$	250,632		$	270,908

Income taxes	$	8,602		$	8,909		$	9,076		$	25,341		$	21,962
Tax effect of adjustments	(47)			11			936			1,703			9,298
Adjusted income taxes	8,555			8,920			10,012			27,044			31,260
Adjusted net income 2	$	30,511		$	30,277		$	34,170		$	91,920		$	101,878

Earnings per diluted share, as reported	$	0.36		$	0.36		$	0.37		$	1.02		$	0.89
Adjusted earnings per diluted share	0.36			0.36			0.40			1.08			1.21
Average diluted shares outstanding	85,069			84,816			85,666			84,915			83,993

Adjusted noninterest expense	$	84,818		$	82,537		$	90,610		$	250,632		$	270,908
Provision for credit losses on unfunded commitments	(250)			(251)			—			(751)			(1,239)
Other real estate owned expense and net (gain) loss on sale	(491)			109			(274)			(356)			(412)
Amortization of intangibles	(6,002)			(6,003)			(7,457)			(18,297)			(21,838)
Net adjusted noninterest expense	$	78,075		$	76,392		$	82,879		$	231,228		$	247,419

Net adjusted noninterest expense	$	78,075		$	76,392		$	82,879		$	231,228		$	247,419
Average tangible assets	$	14,184,085		$	14,020,793		$	14,066,216		$	14,023,961		$	13,772,449
Net adjusted noninterest expense to average tangible assets	2.19		%	2.19		%	2.34		%	2.20		%	2.40		%

Net revenue	$	130,344		$	126,608		$	137,099		$	382,527		$	439,235
Total adjustments to net revenue	(187)			44			387			(372)			(1,661)
Impact of FTE adjustment	310			233			199			763			588
Adjusted net revenue on a fully taxable equivalent basis	$	130,467		$	126,885		$	137,685		$	382,918		$	438,162
Adjusted efficiency ratio	59.84		%	60.21		%	60.19		%	60.39		%	56.47		%

Net interest income	$	106,665		$	104,424		$	119,306		$	316,167		$	377,421
Impact of FTE adjustment	310			233			199			763			588
Net interest income including FTE adjustment	106,975			104,657			119,505			316,930			378,009

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	Third			Second			Third			Nine Months Ended
	Quarter			Quarter			Quarter			September 30,
(Amounts in thousands, except per share data)	2024			2024			2023			2024			2023
Total noninterest income	23,679			22,184			17,793			66,360			61,814
Total noninterest expense less provision for credit losses on unfunded commitments	84,568			82,286			93,915			256,975			308,016
Pre-tax pre-provision earnings	46,086			44,555			43,383			126,315			131,807
Total adjustments to noninterest income	(187)			44			387			(372)			(1,661)
Total adjustments to noninterest expense including other real estate owned expense and net (gain) loss on sale	491			(109)			3,579			7,450			38,759
Adjusted pre-tax pre-provision earnings 2	$	46,390		$	44,490		$	47,349		$	133,393		$	168,905

Average assets	$	14,996,846		$	14,839,707		$	14,906,003		$	14,843,007		$	14,583,932
Less average goodwill and intangible assets	(812,761)			(818,914)			(839,787)			(819,046)			(811,483)
Average tangible assets	$	14,184,085		$	14,020,793		$	14,066,216		$	14,023,961		$	13,772,449

Return on average assets (ROA)	0.81		%	0.82		%	0.84		%	0.78		%	0.68		%
Impact of removing average intangible assets and related amortization	0.18			0.18			0.20			0.18			0.20
Return on average tangible assets (ROTA)	0.99			1.00			1.04			0.96			0.88
Impact of other adjustments for adjusted net income	(0.01)			—			0.08			0.05			0.27
Adjusted return on average tangible assets	0.98		%	1.00		%	1.12		%	1.01		%	1.15		%

Pre-tax pre-provision return on average tangible assets	1.46		%	1.45		%	1.43		%	1.38		%	1.49		%
Impact of adjustments on pre-tax pre-provision earnings	0.01			—			0.12			0.06			0.36
Adjusted pre-tax pre-provision return on average tangible assets 2	1.47		%	1.45		%	1.55		%	1.44		%	1.85		%

Average shareholders’ equity	$	2,168,444		$	2,117,628		$	2,072,747		$	2,134,941		$	2,014,083
Less average goodwill and intangible assets	(812,761)			(818,914)			(839,787)			(819,046)			(811,483)
Average tangible equity	$	1,355,683		$	1,298,714		$	1,232,960		$	1,315,895		$	1,202,600

Return on average shareholders’ equity	5.62		%	5.74		%	6.01		%	5.44		%	4.94		%
Impact of removing average intangible assets and related amortization	4.69			5.01			5.89			4.77			5.15
Return on average tangible common equity (ROTCE)	10.31			10.75			11.90			10.21			10.09
Impact of other adjustments for adjusted net income	(0.04)			0.01			0.89			0.51			3.05
Adjusted return on average tangible common equity	10.27		%	10.76		%	12.79		%	10.72		%	13.14		%

Loan interest income 3	$	151,282		$	147,518		$	150,048		$	446,108		$	433,821
Accretion on acquired loans	(9,182)			(10,178)			(14,843)			(29,955)			(45,365)
Loan interest income excluding accretion on acquired loans 3	$	142,100		$	137,340		$	135,205		$	416,153		$	388,456

Yield on loans 3	5.94		%	5.93		%	5.93		%	5.93		%	5.89		%
Impact of accretion on acquired loans	(0.36)			(0.41)			(0.59)			(0.40)			(0.61)
Yield on loans excluding accretion on acquired loans 3	5.58		%	5.52		%	5.34		%	5.53		%	5.28		%

Net interest income 3	$	106,975		$	104,657		$	119,505		$	316,930		$	378,009

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	Third			Second			Third			Nine Months Ended
	Quarter			Quarter			Quarter			September 30,
(Amounts in thousands, except per share data)	2024			2024			2023			2024			2023
Accretion on acquired loans	(9,182)			(10,178)			(14,843)			(29,955)			(45,365)
Net interest income excluding accretion on acquired loans 3	$	97,793		$	94,479		$	104,662		$	286,975		$	332,644

Net interest margin 3	3.17		%	3.18		%	3.57		%	3.19		%	3.91		%
Impact of accretion on acquired loans	(0.27)			(0.30)			(0.44)			(0.30)			(0.47)
Net interest margin excluding accretion on acquired loans 3	2.90		%	2.87		%	3.13		%	2.89		%	3.44		%

Securities interest income 3	$	26,005		$	24,195		$	21,520		$	72,634		$	61,913
Fully taxable equivalent adjustment to securities	(8)			(7)			(22)			(22)			(71)
Securities interest income excluding fully taxable equivalent adjustment	$	25,997		$	24,188		$	21,498		$	72,612		$	61,842

Loan interest income 3	$	151,282		$	147,518		$	150,048		$	446,108		$	433,821
Fully taxable equivalent adjustment to loans	(302)			(226)			(177)			(741)			(517)
Loan interest income excluding fully taxable equivalent adjustment	$	150,980		$	147,292		$	149,871		$	445,367		$	433,304

Net interest income 3	$	106,975		$	104,657		$	119,505		$	316,930		$	378,009
Fully taxable equivalent adjustments to securities	(8)			(7)			(22)			(22)			(71)
Fully taxable equivalent adjustments to loans	(302)			(226)			(177)			(741)			(517)
Net interest income excluding fully taxable equivalent adjustments	$	106,665		$	104,424		$	119,306		$	316,167		$	377,421
1 Includes severance, contract termination costs, disposition of branch premises and fixed assets, and other costs to effect the Company’s branch consolidation and other expense reduction strategies.
2 As of 1Q’24, amortization of intangibles is excluded from adjustments to noninterest expense; prior periods have been updated to reflect the change.
3 On a fully taxable equivalent basis. All yields and rates have been computed using amortized cost.

Financial Condition

Total assets as of September 30, 2024 were $15.2 billion, an increase of $588.1 million, or 4%, from December 31, 2023.

Securities

Information related to yields, maturities, carrying values and fair value of the Company’s securities is set forth in “Note 3 – Securities” in this report.

At September 30, 2024, the Company had $2.2 billion in AFS securities and $646.1 million in HTM securities. The Company’s total debt securities portfolio increased $289.8 million from December 31, 2023. During the first quarter of 2024, the Company recognized a $4.1 million gain on the opportunistic sale of its Visa Class B shares. The gain was offset by a partial repositioning of the securities portfolio, in which $86.8 million of securities were sold, with $3.8 million in realized losses.

Debt securities generally return principal and interest monthly. The modified duration of the AFS securities portfolio and the total portfolio was 4.1 and 4.5, respectively, at September 30, 2024 compared to 4.5 and 4.9, respectively, at December 31, 2023.

At September 30, 2024, AFS securities had gross unrealized losses of $179.0 million and gross unrealized gains of $13.8 million, compared to gross unrealized losses of $217.7 million and gross unrealized gains of $4.4 million at December 31, 2023.

The credit quality of the Company’s securities holdings is primarily investment grade. U.S. Treasury securities, obligations of U.S. government agencies, and obligations of U.S. government sponsored entities totaled $2.4 billion, or 85%, of the total portfolio.

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The portfolio includes $136.0 million, with a fair value of $129.3 million, in private label residential and commercial mortgage-backed securities and collateralized mortgage obligations. Included are $121.6 million, with a fair value of $111.4 million, in private label residential securities with weighted average credit support of 23%. The collateral underlying these mortgage investments includes both fixed-rate and adjustable-rate residential mortgage loans. Commercial securities totaled $9.6 million, with a fair value of $9.2 million. These securities have weighted average credit support of 22%. The collateral underlying these mortgages are primarily pooled multifamily loans.

The Company also has invested $286.0 million in floating rate collateralized loan obligations. Collateralized loan obligations are special purpose vehicles that purchase first lien broadly syndicated corporate loans while providing support to senior tranche investors. As of September 30, 2024, all of the Company’s collateralized loan obligations were in AAA/AA tranches with weighted average credit support of 34%. The Company utilizes credit models with assumptions of loan level defaults, recoveries, and prepayments to evaluate each security for potential credit losses. The result of this analysis did not indicate expected credit losses.

HTM securities consist solely of mortgage-backed securities and collateralized mortgage obligations guaranteed by U.S. government-sponsored entities, each of which is expected to recover any price depreciation over its holding period as the debt securities move to maturity. The Company has significant liquidity and available borrowing capacity through other sources if needed, and has the intent and ability to hold these investments to maturity.

At September 30, 2024, the Company has determined that all debt securities in an unrealized loss position are the result of both broad investment type spreads and the current interest rate environment. Management believes that each investment will recover any price depreciation over its holding period as the debt securities move to maturity, and management has the intent and ability to hold these investments to maturity if necessary. Therefore, at September 30, 2024, no allowance for credit losses has been recorded.

Loan Portfolio

Loans, net of unearned income and excluding the allowance for credit losses, were $10.2 billion at September 30, 2024, a $142.3 million, or 1.4%, increase from December 31, 2023.

The Company remains committed to sound risk management procedures. Portfolio diversification in terms of asset mix, industry, and loan type has been and continues to be an important element of the Company’s lending strategy. The average loan size is $360 thousand, and the average commercial loan size is $789 thousand at September 30, 2024, reflecting the Company’s longtime focus on granularity and on creating valuable customer relationships. Lending policies contain guardrails that pertain to lending by type of collateral and purpose, along with limits regarding loan concentrations and the principal amount of loans. The Company’s exposure to commercial real estate lending remains well below regulatory limits (see “Loan Concentrations”).

The following tables detail loan portfolio composition at September 30, 2024 and December 31, 2023 for portfolio loans, purchased credit deteriorated (“PCD”) and loans purchased which are not considered purchased credit deteriorated (“Non-PCD”) as defined in “Note 4 - Loans”.


	September 30, 2024
(In thousands)	Portfolio Loans		Acquired Non-PCD Loans		PCD Loans		Total
Construction and land development	$	495,458	$	99,756	$	539	$	595,753
Commercial real estate - owner occupied	1,150,809		493,986		32,019		1,676,814
Commercial real estate - non-owner occupied	2,228,137		1,214,092		130,847		3,573,076
Residential real estate	1,811,941		734,399		18,563		2,564,903
Commercial and financial	1,332,939		213,109		29,180		1,575,228
Consumer	158,902		60,293		312		219,507
Totals	$	7,178,186	$	2,815,635	$	211,460	$	10,205,281

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	December 31, 2023
(In thousands)	Portfolio Loans		Acquired Non-PCD Loans		PCD Loans		Total
Construction and land development	$	519,426	$	247,654	$	542	$	767,622
Commercial real estate - owner occupied	1,079,633		552,627		38,021		1,670,281
Commercial real estate - non-owner occupied	1,844,588		1,323,222		152,080		3,319,890
Residential real estate	1,714,748		710,129		20,815		2,445,692
Commercial and financial	1,237,090		318,683		52,115		1,607,888
Consumer	175,969		74,854		744		251,567
Totals	$	6,571,454	$	3,227,169	$	264,317	$	10,062,940

The amortized cost basis of loans included net deferred costs of $44.9 million at September 30, 2024 and $43.1 million at December 31, 2023. At September 30, 2024, the remaining fair value adjustments on acquired loans were $141.8 million, or 4.5%, of the outstanding acquired loan balances, compared to $174.0 million, or 4.8%, of the acquired loan balances at December 31, 2023. The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis.

Collateral types and characteristics of non-owner occupied commercial real estate (“CRE”) loans as of September 30, 2024 were as follows:


	September 30, 2024
(In thousands)	Balance		Balance % of Total Loans		Average Loan Size		30+ Days Past Due-Accruing		Non Accrual		Weighted Avg LTV 1
Retail	$	1,135,452	11.1	%	$	2,248	$	324	$	—	50	%
Office	561,984		5.5		1,678		—		2,914		54
Multifamily 5+	458,588		4.5		2,259		—		3,189		51
Hotel/Motel	363,324		3.6		3,707		3,341		15,684		49
Industrial/Warehouse	429,894		4.2		2,128		2,554		195		54
Other	623,834		6.1		1,147		2,377		6,724		51
Total	$	3,573,076	35.0	%	$	1,893	$	8,596	$	28,706	51	%
1 Loan-to-value is calculated based on the real estate value at the time of origination, renewal, or update, whichever is more recent.

Non-owner occupied CRE loans increased by $253.2 million in the nine months ended September 30, 2024, totaling $3.6 billion at September 30, 2024 compared to $3.3 billion at December 31, 2023. Non-owner occupied CRE loans are collateralized by properties where the source of repayment is typically from the sale or lease of the property. Within the non-owner occupied CRE portfolio, the largest segment is Retail properties, which totaled approximately $1.1 billion at September 30, 2024. This segment targets grocery or credit tenant-anchored shopping plazas, single credit tenant retail buildings, smaller outparcels, and other small retail units. Loans in this segment have a weighted average loan to value of 50% and an average loan size of $2.2 million.

The second-largest segment in the non-owner occupied CRE portfolio is office properties, which totaled $562.0 million at September 30, 2024. This segment targets low to mid-rise suburban offices and is broadly diversified across many types of professional services. There is limited exposure to central business districts. Loans in this segment have a weighted average loan to value of 54% and an average loan size of $1.7 million.

Owner-occupied CRE loans increased by $6.5 million in the nine months ended September 30, 2024 to $1.7 billion. Owner-occupied CRE is used by the owner, where the primary source of repayment is the cash flow from business operations housed within the property.

Commercial and financial loans are extended to commercial customers for working capital, physical asset expansion, asset acquisition or other business purposes. Balances decreased $32.7 million, or 2%, from December 31, 2023, totaling $1.6 billion at September 30, 2024.

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Residential mortgage loans increased $119.2 million to $2.6 billion during the nine months ended September 30, 2024. Included in the balance as of September 30, 2024, were $981.3 million of fixed rate mortgages, $981.1 million of adjustable rate mortgages and $602.5 million in home equity loans and home equity lines of credit (“HELOCs”), compared to $1.0 billion, $865.2 million and $488.2 million, respectively, at December 31, 2023. Substantially all residential originations have been underwritten to conventional loan agency standards, including loan balances that exceed agency value limitations. The average LTV of our HELOC portfolio is 64%, with 32% of the loans being in first lien position at September 30, 2024, compared to an average LTV of 63%, with 35% of the portfolio being in the first lien position at December 31, 2023.

The Company also provides consumer loans, which include installment loans, auto loans, marine loans, and other consumer loans, which decreased $32.1 million, or 13%, to total $219.5 million at September 30, 2024, compared to $251.6 million at December 31, 2023.

Loan production and late-stage pipelines (loans in underwriting and approval or approved and not yet closed) are detailed in the following table for the periods specified. Pipelines include lines of credit at the full proposed commitment amount, which may not result in fully funded originations.


	Third		Second		Third
	Quarter		Quarter		Quarter
(In thousands)	2024		2024		2023
Commercial/commercial real estate loan pipeline at period end	$	744,548	$	743,789	$	259,445
Commercial/commercial real estate loans closed	499,655		405,957		94,021

SBA pipeline at period end	28,944		29,296		41,353
SBA originations	18,386		8,226		12,476

Residential pipeline - saleable at period end	11,222		12,095		6,820
Residential loans - sold	23,200		21,417		17,625

Residential pipeline - portfolio at period end	21,920		24,721		20,945
Residential loans - retained	51,507		42,431		43,962

Consumer pipeline at period end	24,447		24,532		24,482
Consumer originations	65,140		59,973		76,531

Commercial and commercial real estate originations during the third quarter of 2024 were $499.7 million, an increase of $93.7 million, or 23%, compared to the second quarter of 2024, and an increase of $405.6 million, or 431%, compared to the third quarter of 2023. The Company continues to exercise a disciplined approach to lending and is benefiting from the investments made in recent years to attract talent from large regional banks across its markets. This talent is onboarding significant new relationships, resulting in increased loan production. Commercial and commercial real estate pipelines were $744.5 million as of September 30, 2024, an increase of $0.8 million from $743.8 million at June 30, 2024, and an increase of 187% from $259.4 million at September 30, 2023.

SBA originations totaled $18.4 million during the third quarter of 2024, an increase of $10.2 million compared to the second quarter of 2024, and an increase of $5.9 million compared to the third quarter of 2023.

Residential loans originated for sale in the secondary market totaled $23.2 million in the third quarter of 2024, compared to $21.4 million in the second quarter of 2024 and $17.6 million in the third quarter of 2023. Residential saleable pipelines were $11.2 million as of September 30, 2024, compared to $12.1 million as of June 30, 2024 and $6.8 million as of September 30, 2023.

Residential loan production retained in the portfolio for the third quarter of 2024 was $51.5 million, compared to $42.4 million in the second quarter of 2024 and $44.0 million in the third quarter of 2023. The pipeline of residential loans intended to be retained in the portfolio was $21.9 million as of September 30, 2024, compared to $24.7 million as of June 30, 2024, and $20.9 million as of September 30, 2023.

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Consumer originations, which include HELOCs, totaled $65.1 million during the third quarter of 2024, compared to $60.0 million in the second quarter of 2024 and $76.5 million in the third quarter of 2023. The consumer pipeline was $24.4 million as of September 30, 2024, compared to $24.5 million as of June 30, 2024 and $24.5 million at September 30, 2023.

Loan Concentrations

The Company has developed guardrails to manage loan types that are most impacted by stressed market conditions to minimize credit risk concentration to capital. Outstanding balances for commercial and commercial real estate loan relationships greater than $10 million totaled $2.6 billion, representing 26% of the total portfolio at September 30, 2024, compared to $2.3 billion, or 23%, at December 31, 2023. The Company’s ten largest commercial and commercial real estate funded and unfunded relationships at September 30, 2024 aggregated to $550.7 million, of which $441.4 million was funded, compared to $505.7 million at December 31, 2023, of which $348.3 million was funded.

Concentrations in construction and land development loans and CRE loans are maintained well below regulatory guidelines. Construction and land development and CRE loan concentrations as a percentage of subsidiary bank total risk based capital were 36% and 241%, respectively, at September 30, 2024, compared to 48% and 244%, respectively, at December 31, 2023. Regulatory guidance suggests limits of 100% and 300%, respectively. On a consolidated basis, construction and land development and commercial real estate loans represent 34% and 227%, respectively, of total consolidated risk based capital as of September 30, 2024 compared to 45% and 228%, respectively, at December 31, 2023. To determine these ratios, the Company defines CRE in accordance with the guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) issued by the federal bank regulatory agencies in 2006 (and reinforced in 2015), which defines CRE loans as exposures secured by land development and construction, including 1-4 family residential construction, multi-family property, and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property (i.e., loans for which 50 percent or more of the source of repayment comes from third party, non-affiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. Loans to real estate investment trusts (“REITs”) and unsecured loans to developers that closely correlate to the inherent risks in CRE markets would also be considered CRE loans under the Guidance. Loans on owner-occupied CRE are generally excluded. In addition, the Company is subject to a geographic concentration of credit because it primarily operates in Florida.

Nonperforming Loans, Troubled Borrower Modifications, Other Real Estate Owned and Credit Quality

Nonperforming assets (“NPAs”) at September 30, 2024 totaled $87.3 million, and were comprised of $80.9 million of nonaccrual loans, and $6.4 million of other real estate owned (“OREO”), including $5.7 million of branches taken out of service. Overall, NPAs increased $14.6 million, or 20%, from $72.7 million as of December 31, 2023. NPAs to total assets at September 30, 2024 increased to 0.58% from 0.50% at December 31, 2023.

Compared to December 31, 2023, nonaccrual loans increased $15.8 million, or 24%. Approximately 75% of nonaccrual loans were secured with real estate at September 30, 2024. Nonperforming loans to total loans outstanding at September 30, 2024 increased to 0.79% from 0.65% at December 31, 2023. A significant portion of nonaccrual loans have collateral values well in excess of balances outstanding, and therefore, no loss is expected.

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The tables below set forth details related to nonaccrual loans.


	September 30, 2024
(In thousands)	Nonaccrual Loans With No Related Allowance		Nonaccrual Loans With an Allowance		Total Nonaccrual Loans		Allowance for Credit Losses
Construction and land development	$	94	$	744	$	838	$	177
Commercial real estate - owner occupied	2,664		7,002		9,666		1,188
Commercial real estate - non-owner occupied	25,452		3,254		28,706		1,715
Residential real estate	6,379		14,690		21,069		562
Commercial and financial	3,571		15,533		19,104		6,676
Consumer	—		1,474		1,474		221
Totals	$	38,160	$	42,697	$	80,857	$	10,539


	December 31, 2023
(In thousands)	Nonaccrual Loans With No Related Allowance		Nonaccrual Loans With an Allowance		Total Nonaccrual Loans		Allowance for Credit Losses
Construction and land development	$	—	$	824	$	824	$	—
Commercial real estate - owner occupied	4,859		4,825		9,684		41
Commercial real estate - non-owner occupied	3,938		4,797		8,735		230
Residential real estate	1,792		8,194		9,986		58
Commercial and financial	4,868		29,825		34,693		2,319
Consumer	—		1,182		1,182		257
Totals	$	15,457	$	49,647	$	65,104	$	2,905

In accordance with regulatory reporting requirements, loans are placed on nonaccrual following the Retail Classification of Loan interagency guidance. The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest unless collection of both principal and interest is assured by way of collateralization, guarantees or other security. Consumer loans that become 120 days past due are generally charged off. The loan carrying value is analyzed and any changes are appropriately made quarterly, as described above.

In certain circumstances, the Company provides modifications of loans to borrowers experiencing financial difficulty, which the Company refers to as troubled borrower modifications (“TBMs”). Loans that were modified as TBMs during the nine months ended September 30, 2024 are included in “Note 4 - Loans”.

Allowance for Credit Losses on Loans

Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The forecasts of future economic conditions are over a period that has been deemed reasonable and supportable, and in segments where it can no longer develop reasonable and supportable forecasts, the Company reverts to longer-term historical loss experience to estimate losses over the remaining life of the loans. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments.

The Company recorded provision expense of $6.3 million and $12.6 million, respectively, for the three and nine months ended September 30, 2024, compared to $2.7 million and $33.5 million, respectively, for the three and nine months ended September 30, 2023. The Company recorded net charge-offs of $7.4 million and $21.0 million, respectively, in the three and nine months ended September 30, 2024, compared to $12.7 million and $16.6 million, respectively, for the three and nine months ended September 30, 2023.

The ratio of allowance for credit losses to total loans was 1.38% at September 30, 2024, 1.47% at December 31, 2023, and 1.49% at September 30, 2023.

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Cash and Cash Equivalents and Liquidity Risk Management

Liquidity risk involves the risk of being unable to fund assets with the appropriate duration and rate-based liability, as well as the risk of not being able to meet unexpected cash needs. Liquidity planning and management are necessary to ensure the ability to fund operations cost effectively and to meet current and future potential obligations such as loan commitments and unexpected deposit outflows.

Funding sources primarily include customer-based deposits, collateral-backed borrowings, brokered deposits, cash flows from operations, cash flows from the loan and investment portfolios and asset sales, primarily secondary marketing for residential real estate mortgages. Cash flows from operations are a significant component of liquidity risk management and the Company considers both deposit maturities and the scheduled cash flows from loan and investment maturities and payments when managing risk.

Cash and cash equivalents, including interest bearing deposits, totaled $637.1 million at September 30, 2024, compared to $447.2 million at December 31, 2023. Higher cash and cash equivalent balances at September 30, 2024 are consistent with the Company’s strategic balance sheet management.

Deposits are a primary source of liquidity. The stability of this funding source is affected by numerous factors, including returns available to customers on alternative investments, the quality of customer service levels, perception of safety and competitive forces. Total uninsured deposits were estimated to be $4.3 billion at September 30, 2024, representing 36% of overall deposit accounts. This includes public funds under the Florida Qualified Public Depository program, which provides loss protection to depositors beyond FDIC insurance limits. Excluding such balances, the uninsured and uncollateralized deposits were 31% of total deposits at September 30, 2024. The Company has liquidity sources as discussed below, including cash and lines of credit with the FRB and FHLB, that represent 145% of uninsured deposits, and 167% of uninsured and uncollateralized deposits.

In addition to $637.1 million in cash and cash equivalents at September 30, 2024, the Company had $5.7 billion in available borrowing capacity, including $4.1 billion in available collateralized lines of credit, $1.2 billion of unpledged debt securities available as collateral for potential additional borrowings, and available unsecured lines of credit of $348.0 million. The Company may also access funding by acquiring brokered deposits. Brokered deposits at September 30, 2024 totaled $256.5 million, compared to $122.3 million at December 31, 2023.

Contractual maturities for assets and liabilities are reviewed to meet current and expected future liquidity requirements. Sources of liquidity are maintained through a portfolio of high-quality marketable assets, such as residential mortgage loans, debt securities available-for-sale and interest-bearing deposits. The Company is also able to provide short-term financing of its activities by selling, under an agreement to repurchase, United States Treasury and Government agency debt securities not pledged to secure public deposits or trust funds.

The Company has traditionally relied upon dividends from Seacoast Bank and securities offerings to provide funds to pay the Company’s expenses and to service the Company’s debt. During the third quarter of 2024, Seacoast Bank distributed $15.4 million to the Company and, at September 30, 2024, is eligible to distribute dividends to the Company of approximately $172.1 million without prior regulatory approval. At September 30, 2024, the Company had cash and cash equivalents at the parent of approximately $97.4 million, compared to $101.7 million at December 31, 2023.

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Deposits and Borrowings

Customer relationship funding is detailed in the following table for the periods specified:



	September 30,			December 31,
(In thousands, except ratios)	2024			2023
Noninterest demand	$	3,443,455		$	3,544,981
Interest-bearing demand	2,487,448			2,790,210
Money market	4,034,371			3,314,288
Savings	524,474			651,454
Time deposits	1,497,301			1,353,655
Brokered deposits	$	256,536		$	122,347
Total deposits	$	12,243,585		$	11,776,935

Securities sold under agreements to repurchase	210,176			374,573

Total customer funding 1	$	12,197,225		$	12,029,161

Noninterest demand deposits as % of total deposits	28		%	30		%
1 Total deposits and securities sold under agreements to repurchase, excluding brokered deposits. Securities sold under agreements to repurchase consists of customer sweep accounts.

The Company benefits from a diverse and granular deposit base that serves as a significant source of strength. Total deposits increased $466.7 million, or 4.0%, to $12.2 billion at September 30, 2024 compared to December 31, 2023.

Noninterest demand deposits represented 28% and 30% of total deposits at September 30, 2024 and December 31, 2023, respectively. Customer transaction account balances (noninterest demand and interest-bearing demand) represented 49% of total deposits at September 30, 2024, compared to 54% at December 31, 2023.

Customer sweep accounts totaled $210.2 million at September 30, 2024, decreasing $164.4 million, or 44%, from December 31, 2023. Repurchase agreements are offered by Seacoast to select customers who wish to sweep excess balances on a daily basis for investment purposes.

At September 30, 2024 and December 31, 2023, long-term debt included $72.4 million and $72.2 million, respectively, related to trust preferred securities issued by trusts organized or acquired by the Company. At September 30, 2024, the average interest rate in effect on our outstanding subordinated debt related to trust preferred securities was 6.80%, compared to 7.34% at December 31, 2023. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. Under Basel III and FRB rules, qualified trust preferred securities and other restricted capital elements can be included as Tier 1 capital, within limitations. The Company believes that its trust preferred securities qualify under these capital rules.

In 2022, the Company acquired $12.3 million in senior debt through the acquisition of Apollo Bancshares, Inc. Contractual interest is paid on a semiannual basis at a fixed rate of 5.50% until April 30, 2025, at which point the rate converts to a floating rate of 3-month SOFR plus 533 basis points. The debt was recorded at fair value, resulting in a $0.4 million premium that is being amortized into interest expense over the remaining term to maturity.

In 2023, the Company acquired $25.0 million in subordinated debt through the acquisition of Professional that qualifies as Tier 2 Capital. Contractual interest is paid on a semiannual basis at a fixed interest rate of 3.375% until January 30, 2027, at which point the rate converts to a 3-month SOFR rate plus 203 basis points paid quarterly. The debt was recorded at fair value, resulting in a $3.9 million discount that is being accreted into interest expense over the remaining term to maturity.

Federal Home Loan Bank advances totaled $245.0 million at September 30, 2024 with a weighted average interest rate of 4.19%, compared to $50.0 million at December 31, 2023 with an interest rate of 3.23%.

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Off-Balance Sheet Transactions

In the normal course of business, the Company may engage in a variety of financial transactions that, under generally accepted accounting principles, either are not recorded on the balance sheet or are recorded on the balance sheet in amounts that differ from the full contract or notional amounts. These transactions involve varying elements of market, credit and liquidity risk.

Lending commitments include unfunded loan commitments and standby and commercial letters of credit. For loan commitments, the contractual amount of a commitment represents the maximum potential credit risk that could result if the entire commitment had been funded, the borrower had not performed according to the terms of the contract, and no collateral had been provided. A large majority of loan commitments and standby letters of credit expire without being funded, and accordingly, total contractual amounts are not representative of actual future credit exposure or liquidity requirements. Loan commitments and letters of credit expose the Company to credit risk in the event that the customer draws on the commitment and subsequently fails to perform under the terms of the lending agreement.

For commercial customers, loan commitments generally take the form of revolving credit arrangements. For retail customers, loan commitments generally are lines of credit secured by residential property. These instruments are not recorded on the balance sheet until funds are advanced under the commitment. Unfunded commitments to extend credit were $2.8 billion at September 30, 2024 and $2.7 billion at December 31, 2023.

In the normal course of business, the Company and Seacoast Bank enter into agreements, or are subject to regulatory agreements that result in cash, debt and dividend restrictions. A summary of the most restrictive items follows.

Seacoast Bank may be required to maintain reserve balances with the FRB. There was no reserve requirement at September 30, 2024 or December 31, 2023.

Under FRB regulation, Seacoast Bank is limited as to the amount it may loan to its affiliates, including the Company, unless such loans are collateralized by specified obligations. At September 30, 2024, the maximum amount available for transfer from Seacoast Bank to the Company in the form of loans approximated $196.1 million, if the Company has sufficient acceptable collateral. There were no loans made to affiliates during the nine months ended September 30, 2024.

Capital Resources

The Company’s equity capital at September 30, 2024 increased $85.8 million, or 4%, from December 31, 2023 to $2.2 billion. Changes in equity included an increase from net income of $86.9 million, partially offset by the payment of common stock dividends totaling $46.2 million.

The ratio of shareholders’ equity to period end total assets was 14.46% at both September 30, 2024 and December 31, 2023, respectively. The ratio of tangible shareholders’ equity to tangible assets was 9.64% and 9.31% at September 30, 2024 and December 31, 2023, respectively. Changes in the value of HTM securities are not reflected in shareholders’ equity under GAAP; however, illustratively, if all HTM securities were presented at fair value, the tangible common equity ratio would have been 9.11% at September 30, 2024 and 8.68% at December 31, 2023.

Activity in shareholders’ equity for the nine months ended September 30, 2024 and 2023 follows:


(In thousands)	2024		2023
Beginning balance at December 31, 2023 and 2022	$	2,108,086	$	1,607,775
Net income	86,901		74,490
Stock based compensation expense	10,233		10,290
Common stock transactions related to stock based employee benefit plans	972		4,316
Issuance of common stock and conversion of options pursuant to acquisition	—		421,042
Repurchase of common stock	(880)		(45)
Dividends on common stock ($0.54 per share and $0.53 per share, respectively)	(46,170)		(45,236)
Change in accumulated other comprehensive income	34,708		(24,238)
Ending balance at September 30, 2024 and 2023	$	2,193,850	$	2,048,394

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Capital ratios are well above regulatory requirements for well-capitalized institutions. Management’s use of risk-based capital ratios in its analysis of the Company’s capital adequacy are not GAAP financial measures. Seacoast’s management uses these measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company. The capital measures are not necessarily comparable to similar capital measures that may be presented by other companies and Seacoast does not nor should investors consider such non-GAAP financial measures in isolation from, or as a substitute for GAAP financial information (see “Note 8 – Regulatory Capital”).


September 30, 2024	Seacoast (Consolidated)	Seacoast Bank	Minimum to be Well- Capitalized 1
Total Risk-Based Capital Ratio	16.18%	15.26%	10.00%
Tier 1 Capital Ratio	14.76	14.05	8.00
Common Equity Tier 1 Ratio (CET1)	14.10	14.05	6.50
Leverage Ratio	11.15	10.62	5.00
1 For subsidiary bank only.

The Company and Seacoast Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal bank regulatory authority may prohibit the payment of dividends where it has determined that the payment of dividends would be an unsafe or unsound practice. The Company is a legal entity separate and distinct from Seacoast Bank and its other subsidiaries, and the Company’s primary source of cash and liquidity, other than securities offerings and borrowings, is dividends from its bank subsidiary. Without Office of the Comptroller of the Currency (“OCC”) approval, Seacoast Bank can pay $172.1 million of dividends to the Company.

The OCC and the Federal Reserve have policies that encourage banks and bank holding companies to pay dividends from current earnings, and have the general authority to limit the dividends paid by national banks and bank holding companies, respectively, if such payment may be deemed to constitute an unsafe or unsound practice. If, in the particular circumstances, either of these federal regulators determined that the payment of dividends would constitute an unsafe or unsound banking practice, either the OCC or the Federal Reserve may, among other things, issue a cease and desist order prohibiting the payment of dividends by Seacoast Bank or us, respectively. The board of directors of a bank holding company must consider different factors to ensure that its dividend level, if any, is prudent relative to the organization’s financial position and is not based on overly optimistic earnings scenarios such as any potential events that may occur before the payment date that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the FRB has indicated that the board of directors of a bank holding company, such as Seacoast, should consult with the FRB and eliminate, defer, or significantly reduce the bank holding company’s dividends if: (i) its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or (iii) it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.

The Company has paid quarterly dividends to the holders of its common stock since the second quarter of 2021. Whether the Company continues to pay quarterly dividends and the amount of any such dividends will be at the discretion of the Company’s Board of Directors and will depend on the Company’s earnings, financial condition, results of operations, business prospects, capital requirements, regulatory restrictions, and other factors that the Board of Directors may deem relevant.

The Company has seven wholly owned trust subsidiaries that have issued trust preferred stock. Trust preferred securities from acquisitions were recorded at fair value when acquired. All trust preferred securities are guaranteed by the Company on a junior subordinated basis. The FRB’s rules permit qualified trust preferred securities and other restricted capital elements to be included under Basel III capital guidelines, with limitations, and net of goodwill and intangibles. The Company believes that its trust preferred securities qualify under these revised regulatory capital rules and believes that it can treat all its trust preferred securities as Tier 1 capital. For regulatory purposes, the trust preferred securities are added to the Company’s tangible common shareholders’ equity to calculate Tier 1 capital.

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Critical Accounting Policies and Estimates

The Company’s critical accounting policies are discussed in the MD&A in Seacoast’s Annual Report on Form 10-K for the year ended December 31, 2023. Significant accounting policies are discussed in “Note 1 – Significant Accounting Policies” in Form 10-K for the year ended December 31, 2023. Disclosures regarding the effects of new accounting pronouncements are included in “Note 1 – Basis of Presentation” in this report. There have been no changes to the Company’s critical accounting policies during 2024.

Interest Rate Sensitivity

Fluctuations in interest rates may result in changes in the fair value of the Company’s financial instruments, cash flows and net interest income. This risk is managed using simulation modeling to calculate the most likely interest rate risk utilizing estimated loan and deposit growth. The objective is to optimize the Company’s financial position, liquidity, and net interest income while limiting volatility.

Senior management regularly reviews the overall interest rate risk position and evaluates strategies to manage the risk. The Company's Asset and Liability Management Committee (“ALCO”) uses simulation analysis to monitor changes in net interest income due to changes in market interest rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust interest rate sensitivity to assess the impact of market interest rate swings. The analysis of the impact on net interest income over a twelve-month period is subjected to instantaneous changes in market rates and is monitored at least quarterly.

The following table presents the ALCO simulation model’s projected impact of a change in interest rates on the projected baseline net interest income for the 12 and 24 month periods beginning October 1, 2024, holding all balances on the balance sheet static. It is important to note that the results in the table below assume parallel shifts in the yield curve and do not take into account changes in the slope of the yield curve nor changes in balance sheet size or mix.


	% Change in Projected Baseline
	Net Interest Income
	September 30, 2024
Change in Interest Rates	1-12 months	13-24 months
+2.00%	(9.9)%	(8.4)%
+1.00%	(4.2)%	(3.3)%
Current	—%	—%
-1.00%	0.2%	(1.6%)
-2.00%	0.8%	(3.5%)

The computations of interest rate risk do not necessarily include certain actions management may undertake to manage this risk in response to changes in interest rates. Management may adjust asset or liability pricing or structure in order to manage interest rate risk through an interest rate cycle. This may include the use of investment portfolio purchases or sales or the use of derivative financial instruments, such as interest rate swaps, options, caps, floors, futures or forward contracts.

Effects of Inflation and Changing Prices

The condensed consolidated financial statements and related financial data presented herein have been prepared in accordance with U.S. GAAP, which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money, over time, due to inflation.

Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the general level of inflation. However, inflation affects financial institutions by increasing their cost of goods and services purchased, as well as the cost of salaries and benefits, occupancy expense, and similar items. Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings, and shareholders’ equity. Mortgage origination and refinancing tends to slow as interest rates increase, and higher interest rates likely will reduce the Company’s earnings from such activities and the income from the sale of residential mortgage loans in the secondary market.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See also Management’s discussion and analysis “Interest Rate Sensitivity.”

Market risk refers to potential losses arising from changes in interest rates, and other relevant market rates or prices.

Interest rate risk, defined as the exposure of net interest income and Economic Value of Equity (“EVE”) to adverse movements in interest rates, is the Company’s primary market risk, and mainly arises from the structure of the balance sheet (non-trading activities). The Company is also exposed to market risk in its investing activities. The ALCO meets regularly and is responsible for reviewing the interest rate sensitivity position of the Company and establishing policies to monitor and limit exposure to interest rate risk. The policies established by the ALCO are reviewed and approved by the Company’s board of directors. The primary goal of interest rate risk management is to control exposure to interest rate risk, within policy limits approved by the board of directors. These limits reflect the Company’s tolerance for interest rate risk over short-term and long-term horizons.

The Company also performs valuation analyses, which are used for evaluating levels of risk present in the balance sheet that might not be taken into account in the net interest income simulation analyses. Whereas net interest income simulation highlights exposures over a relatively short time horizon, valuation analysis incorporates all cash flows over the estimated remaining life of all balance sheet positions. The valuation of the balance sheet, at a point in time, is defined as the discounted present value of asset cash flows minus the discounted value of liability cash flows, the net result of which is the EVE. The sensitivity of EVE to changes in the level of interest rates is a measure of the longer-term re-pricing risks and options risks embedded in the balance sheet. In contrast to the net interest income simulation, which assumes interest rates will change over a period of time, EVE uses instantaneous changes in rates.

EVE values only the current balance sheet, and does not incorporate the growth assumptions that are used in the net interest income simulation model. As with the net interest income simulation model, assumptions about the timing and variability of balance sheet cash flows are critical in the EVE analysis. Particularly important are the assumptions driving prepayments and the expected changes in balances and pricing of the indeterminate life deposit portfolios. Core deposits are a more significant funding source for the Company, making the lives attached to core deposits more important to the accuracy of our modeling of EVE. The Company periodically reassesses its assumptions regarding the indeterminate lives of core deposits utilizing an independent third-party resource to assist.

The following table presents the projected impact of a change in interest rates on the balance sheet. This change in interest rates assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve.


Change in Interest Rates						% Change in
						Economic Value of
						Equity
+2.00%						(14.3)%
+1.00%						(6.6)%
Current						—%
-1.00%						5.9%
-2.00%						8.3%

While an instantaneous and severe shift in interest rates is used in this analysis, a gradual shift in interest rates would have a much more modest impact. Since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon, i.e., the next fiscal year. Further, EVE does not consider factors such as future balance sheet growth, changes in product mix, change in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.

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Item 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of its chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of September 30, 2024 and concluded that those disclosure controls and procedures are effective.

During the quarter ended September 30, 2024, there have been no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

Part II OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should consider the factors discussed in “Part I, Item 1A. Risk Factors” in our report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition and prospective results. The risks described in this report, in our Form 10-K or our other SEC filings are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended September 30, 2024, the Company repurchased shares of its common stock as indicated in the following table:


Period	Total Number of Shares Purchased 1	Average Price Paid Per Share		Total Number of Shares Purchased as part of Public Announced Plan	Maximum Value of Shares that May Yet be Purchased Under the Plan (in thousands)








7/1/24 to 7/31/24	4,888	$	23.40	—	$	99,120
8/1/24 to 8/31/24	—	—		—	99,120
9/1/24 to 9/30/24	—	—		—	99,120
Total - 3rd Quarter	4,888	$	23.40	—	$	99,120

1 Includes shares that were repurchased to pay for the exercise of stock options or for income taxes owed on vesting shares of restricted stock. These shares were not purchased under the Company’s stock repurchase plan to repurchase shares.

On December 15, 2023, the Company’s Board of Directors authorized the renewal of the Company’s share repurchase program, under which the Company may, from time to time, purchase up to $100 million of its shares of outstanding common stock. Under the share repurchase program, which will expire on December 31, 2024, repurchases will be made, if at all, in accordance with applicable securities laws and may be made from time to time in the open market, by block purchase or by negotiated transactions. The amount and timing of repurchases, if any, will be based on a variety of factors, including share acquisition price, regulatory limitations, market conditions and other factors. The program does not obligate the Company to purchase any of its shares, and may be terminated or amended by the Board of Directors at any time prior to its expiration date.

No shares of the Company’s common stock were repurchased under the program during the three months ended September 30, 2024.

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Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

Trading arrangements

There were no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted , modified or terminated by any director or officer of the Company during the three months ended September 30, 2024.

Item 6. Exhibits



			Exhibit 3.1.1 Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed May 10, 2006.

			Exhibit 3.1.2 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 23, 2008.

			Exhibit 3.1.3 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.4 to the Company’s Form S-1, filed June 22, 2009.

			Exhibit 3.1.4 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed July 20, 2009.

			Exhibit 3.1.5 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 3, 2009.

			Exhibit 3.1.6 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K/A, filed July 14, 2010.

			Exhibit 3.1.7 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed June 25, 2010.

			Exhibit 3.1.8 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed June 1, 2011.

			Exhibit 3.1.9 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed December 13, 2013.

			Exhibit 3.1.10 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8K, filed May 30, 2018.

			Exhibit 3.1.11 Articles of Amendment to the Amended and Restated Articles of Incorporation Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8K, filed May 23, 2023.

			Exhibit 3.2 Amended and Restated By-laws of the Company Incorporated herein by reference from Exhibit 3.1 to the Company’s Form 8-K, filed October 26, 2020.

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			Exhibit 31.1			Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			Exhibit 31.2			Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			Exhibit 32.1			Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			Exhibit 32.2			Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			Exhibit 101			The following materials from Seacoast Banking Corporation of Florida’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 formatted in Inline XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders’ Equity and (vi) the Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
			Exhibit 104			The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			SEACOAST BANKING CORPORATION OF FLORIDA


November 6, 2024			/s/ Charles M. Shaffer
			Charles M. Shaffer
			Chairman and Chief Executive Officer


November 6, 2024			/s/ Tracey L. Dexter
			Tracey L. Dexter
			Executive Vice President and Chief Financial Officer

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Part I. Financial Information Item 1. Financial Statements Note 1 Basis Of Presentation Note 2 Earnings Per Share Note 3 Securities Note 4 Loans Note 5 Allowance For Credit Losses Note 6 Derivatives Note 7 Securities Sold Under Agreements To Repurchase Note 8 Regulatory Capital Note 9 Contingent Liabilities Note 10 Fair Value Note 11 Business Combinations Note 12 Subsequent Event Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

Exhibit 31.1 Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 31.2 Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32.1 Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 32.2 Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SBCF 10-Q Quarter ended Sept. 30, 2024

Exhibits