Seacoast Banking Corp of Florida (SBCF) Q3 2020 Earnings Call Transcript

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Seacoast Banking Corp of Florida (NASDAQ:SBCF)
Q3 2020 Earnings Call
Oct 28, 2020, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Seacoast Third Quarter Earnings Conference Call. My name is Anna, and I’ll be the operator for today’s call. [Operator Instructions] Before we begin, I have been asked to direct your attention to the statement contained at the end of the press release regarding forward-looking statements. Seacoast will be discussing issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act and their comments today are intended to be covered within the meaning of that act.

I will now turn the call over to Mr. Dennis Hudson, Chairman and CEO, Seacoast Bank. Mr. Hudson, you may begin.

Dennis S. Hudson, III — Chairman And Chief Executive Officer

Thank you all for joining us this morning. As we provide our comments, we will reference the third quarter 2020 earnings slide deck, which can be found at seacoastbanking.com. With me this morning is Chuck Shaffer, President and Chief Operating Officer; Tracey Dexter, Chief Financial Officer; Jeff Lee, Chief Digital Officer; David Houdeshell, Director of Credit Analytics and Policy; and Richard Raiford, our Chief Credit Officer. As you’ll hear in a few minutes, despite the unprecedented operating environment for banks, we reported a strong Q3 with adjusted earnings per share of $0.50. Tangible common equity per share rose 12% on an annualized basis in the quarter to $15.57. Our tangible common equity per share has grown at a compounded 12% annual rate over the past three years.

During the quarter, we closed on the Freedom Bank acquisition, began the process of PPP forgiveness and continue to operate the business safely and successfully for our associates and customers. I would like — again, like to express my sincere appreciation to the entire Seacoast team for their hard work this quarter. They were able to onboard new customers and associates, all while operating remotely, and yet continued to achieve significant performance milestones as Chuck and Tracey will cover in a minute.

Chuck, I’ll turn the call over to you to share a few thoughts on the quarter.

Charles M. Shaffer — President And Chief Operating Officer

Thank You, Denny. I will also open by expressing my sincere appreciation for the Seacoast team for producing another solid quarter of impressive results despite the challenge of operating in a pandemic environment. The company generated earnings per share on an adjusted basis of $0.50 and tangible book value per share grew 12% on an annualized basis to $15.57. Asset quality, liquidity and capital are all strong, and we continue to generate meaningful capital growth, bolstering our fortress balance sheet. Our capital ratios are more substantial than most of our peers, which provides strategic flexibility as we move through the coming period and ultimately, an economic recovery. During the quarter, Florida’s Governor moved to Phase three of the state’s recovery plan, fully opening up Florida’s businesses with no restrictions. We have seen our business customers return to full operations. We are encouraged by the state’s economic recovery, but are maintaining a conservative stance in the face of COVID’s uncertain path.

Our ACL coverage increased modestly from the prior quarter, and we continue to model our ACL in line with a more severe downturn. Tracey will have more details on the ACL modeling in her prepared comments. We continue to be vigilant in maintaining our disciplined, conservative credit culture. Additionally, we are passing on deals that are not pricing to an appropriate risk-adjusted return. Given our…