Seacoast Banking Posts Record Loan Growth, Wider Core Margin
Seacoast Banking Corp of Florida reported second-quarter net income of $59.5 million, or $0.55 a share, up 87% from the first quarter as a securities-repositioning charge fell out of the base.
Seacoast Banking Corp of Florida (SBCF) reported second-quarter net income of $59.5 million, or $0.55 a share, up 87% from $31.9 million, or $0.29, in the first quarter and up 39% from $42.7 million, or $0.50, a year earlier. The Stuart, Florida-based bank holding company's headline revenue jump also reflected an easier comparison rather than a step-change in the business: net revenues rose 27% quarter-over-quarter to $208.2 million, but the first quarter had included a $39.5 million loss on securities repositioning. Stripped of that item, adjusted net revenues rose a more modest 2% quarter-over-quarter, to $210.0 million from $205.1 million, while still up 38% from a year earlier.
Beneath the accounting noise, the quarter's more durable signal was margin expansion. Net interest margin held at 3.83%, up from 3.66% in the fourth quarter of 2024 and 3.57% in the third, and up 25 basis points from 3.58% a year ago. Core margin, which excludes purchase-accounting accretion, expanded 8 basis points quarter-over-quarter to 3.65% and is up 36 basis points from 3.29% a year earlier. That underlying gain came even as accretion income declined to $8.9 million from $12.1 million, pulling reported loan yield down 8 basis points to 5.88% while core loan yield, excluding accretion, rose 4 basis points to 5.61%. Funding costs moved in the company's favor as well: the cost of deposits fell to 1.53% from 1.54% quarter-over-quarter and from 1.80% a year ago, and average FHLB borrowing costs declined for a third straight quarter, to 3.77% from 4.03%, even as average FHLB balances grew.
Loan growth accelerated to $504.0 million, or 16% annualized, the fastest pace in the company's recent history, driven by stronger origination and fewer payoffs than in the first quarter. The loan pipeline swelled to $1.5 billion at quarter-end from $1.2 billion three months earlier and $920.9 million a year ago, with the commercial pipeline alone up 24% quarter-over-quarter and 50% year-over-year to $1.3 billion, pointing to continued momentum into the third quarter. Provision for credit losses was $9.0 million against that growth, with charge-offs steady at $3.2 million and nonperforming loans falling 9% quarter-over-quarter to $86.5 million, or 0.66% of loans. Criticized and classified loans crept up to 2.88% of loans from 2.82% quarter-over-quarter and 2.39% a year ago, a slow-building watch-list trend that has not yet shown up in charge-offs.
Fee income told a similar story to revenue: noninterest income of $27.8 million was up $40.4 million quarter-over-quarter, but that swing was entirely the mirror image of the prior quarter's securities loss. On an adjusted basis, noninterest income rose 3% quarter-over-quarter and 14% year-over-year. Wealth management was the standout, with income up 3% quarter-over-quarter and 42% year-over-year to $6.0 million as assets under management grew 45% to $3.2 billion, including $388 million of new organic AUM added in the first half of 2025. Mortgage banking income jumped 27% quarter-over-quarter and 301% year-over-year to $2.7 million, aided by new originations tied to The Villages communities acquisition, while insurance agency income fell 25% quarter-over-quarter to $1.3 million as seasonal contingency payments that boosted the first quarter did not repeat.
Noninterest expense rose just 1% quarter-over-quarter to $123.1 million but was up 34% from a year ago, reflecting the expanded branch and staff footprint from the Villages Bancorporation and Citizens First integrations, which were completed in early July 2025. Merger and integration costs were $8.4 million, roughly flat with the first quarter's $8.5 million but well above $2.4 million a year earlier. Even so, the efficiency ratio improved for a second straight quarter, to 58.52% from 59.47% in the first quarter and 60.33% a year ago, with the adjusted ratio falling to 54.54% from 55.31%, evidence that revenue growth is outpacing the cost of digesting the acquisitions. Full-time equivalent staff rose to 1,964 from 1,949 quarter-over-quarter and 1,522 a year ago, and branch count grew to 105 from 79 a year earlier.
Deposits grew $154.3 million, or 3.7% annualized, to $16.8 billion, with noninterest-bearing demand deposits up 4% annualized to $4.2 billion. Brokered deposits nearly tripled quarter-over-quarter to $611.6 million from $209.3 million, which the company used as temporary seasonal funding. Tier 1 capital ratio declined 30 basis points quarter-over-quarter to 14.3% from 14.6%, even as Seacoast bought back 751,680 shares in the quarter, bringing year-to-date repurchases to 1,072,443 shares.