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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Seacoast Banking Corporation of Florida | NASDAQ:SBCF | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.40 | 1.70% | 23.91 | 22.90 | 24.69 | 24.10 | 23.595 | 23.65 | 384,786 | 00:13:27 |
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| | | |
Cathy Swanson
Chief Executive Officer Fourth Street Banking Company |
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APPENDICES: | | | | | | | |
| | | | A-1 | | | |
| | | | B-1 | | | |
| | | | C-1 | | | |
| | | | D-1 | | |
Date
|
| |
Seacoast
closing sale price |
| |
Equivalent
Fourth Street per share value |
| ||||||
January 22, 2020
|
| | | $ | 29.39 | | | | | $ | 3.75 | | |
July 15, 2020
|
| | | $ | 19.08 | | | | | $ | 2.43 | | |
| | |
Seacoast Common Stock
|
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| | |
High
|
| |
Low
|
| |
Dividends
|
| |||||||||
2018 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 28.44 | | | | | $ | 23.96 | | | | | $ | — | | |
Second Quarter
|
| | | $ | 33.51 | | | | | $ | 25.61 | | | | | $ | — | | |
Third Quarter
|
| | | $ | 34.95 | | | | | $ | 28.30 | | | | | $ | — | | |
Fourth Quarter
|
| | | $ | 29.86 | | | | | $ | 21.74 | | | | | $ | — | | |
2019 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 29.75 | | | | | $ | 24.45 | | | | | $ | — | | |
Second Quarter
|
| | | $ | 28.78 | | | | | $ | 22.99 | | | | | $ | — | | |
Third Quarter
|
| | | $ | 27.64 | | | | | $ | 22.35 | | | | | $ | — | | |
Fourth Quarter
|
| | | $ | 31.02 | | | | | $ | 24.70 | | | | | $ | — | | |
2020 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 30.55 | | | | | $ | 14.64 | | | | | $ | — | | |
Second Quarter
|
| | | $ | 25.00 | | | | | $ | 16.35 | | | | | $ | — | | |
Third Quarter (through July 15, 2020)
|
| | | $ | 19.60 | | | | | $ | 17.61 | | | | | $ | — | | |
| | |
(unaudited)
Three Months ended March 31, |
| |
Year Ended December 31,
|
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(Amounts in thousands, except
per share data) |
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2020
|
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2019
|
| |
2019
|
| |
2018
|
| |
2017
|
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2016
|
| |
2015
|
| |||||||||||||||||||||
Net interest income
|
| | | $ | 63,177 | | | | | $ | 60,774 | | | | | $ | 243,618 | | | | | $ | 211,515 | | | | | $ | 176,296 | | | | | $ | 139,588 | | | | | $ | 109,487 | | |
Provision for credit losses
|
| | | | 29,513 | | | | | | 1,397 | | | | | | 10,999 | | | | | | 11,730 | | | | | | 5,648 | | | | | | 2,411 | | | | | | 2,644 | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other
|
| | | | 14,669 | | | | | | 12,845 | | | | | | 55,515 | | | | | | 50,645 | | | | | | 43,230 | | | | | | 37,427 | | | | | | 32,434 | | |
Gain on sale of VISA
stock |
| | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,153 | | | | | | — | | | | | | — | | |
Securities gains/(losses),
net |
| | | | 19 | | | | | | (9) | | | | | | 1,217 | | | | | | (623) | | | | | | 86 | | | | | | 368 | | | | | | 161 | | |
Noninterest expenses
|
| | | | 47,798 | | | | | | 43,099 | | | | | | 160,739 | | | | | | 162,273 | | | | | | 149,916 | | | | | | 130,881 | | | | | | 103,770 | | |
Income before income
taxes |
| | | | 554 | | | | | | 29,114 | | | | | | 128,612 | | | | | | 87,534 | | | | | | 79,201 | | | | | | 44,091 | | | | | | 35,668 | | |
Provision for income
taxes |
| | | | (155) | | | | | | 6,409 | | | | | | 29,873 | | | | | | 20,259 | | | | | | 36,336 | | | | | | 14,889 | | | | | | 13,527 | | |
Net income
|
| | | $ | 709 | | | | | $ | 22,705 | | | | | $ | 98,739 | | | | | $ | 67,275 | | | | | $ | 42,865 | | | | | $ | 29,202 | | | | | $ | 22,141 | | |
Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | $ | 0.01 | | | | | $ | 0.44 | | | | | $ | 1.90 | | | | | $ | 1.38 | | | | | $ | 0.99 | | | | | $ | 0.78 | | | | | $ | 0.66 | | |
Basic
|
| | | | 0.01 | | | | | | 0.44 | | | | | | 1.92 | | | | | | 1.40 | | | | | | 1.01 | | | | | | 0.79 | | | | | | 0.66 | | |
Cash dividends declared
|
| | | | 0.00 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0.00 | | |
Book value per share common
|
| | | | 18.82 | | | | | | 17.44 | | | | | | 19.13 | | | | | | 16.83 | | | | | | 14.70 | | | | | | 11.45 | | | | | | 10.29 | | |
Assets
|
| | | $ | 7,352,894 | | | | | $ | 6,783,389 | | | | | $ | 7,108,511 | | | | | $ | 6,747,659 | | | | | $ | 5,810,129 | | | | | $ | 4,680,932 | | | | | $ | 3,534,780 | | |
Net loans
|
| | | | 5,231,797 | | | | | | 4,795,619 | | | | | | 5,163,250 | | | | | | 4,792,791 | | | | | | 3,790,255 | | | | | | 2,856,136 | | | | | | 2,137,202 | | |
Deposits
|
| | | | 5,887,499 | | | | | | 5,605,578 | | | | | | 5,584,753 | | | | | | 5,177,240 | | | | | | 4,592,720 | | | | | | 3,523,245 | | | | | | 2,844,387 | | |
Shareholders’ equity
|
| | | | 991,787 | | | | | | 896,424 | | | | | | 985,639 | | | | | | 864,267 | | | | | | 689,664 | | | | | | 435,397 | | | | | | 353,453 | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets
|
| | | | 0.04 | | | | | | 1.36 | | | | | | 1.45% | | | | | | 1.11% | | | | | | 0.82% | | | | | | 0.69% | | | | | | 0.67% | | |
Return on average equity
|
| | | | 0.29 | | | | | | 10.47 | | | | | | 10.63 | | | | | | 9.08 | | | | | | 7.51 | | | | | | 7.06 | | | | | | 6.56 | | |
Average equity to average assets
|
| | | | 14.09 | | | | | | 12.99 | | | | | | 13.60 | | | | | | 12.23 | | | | | | 10.96 | | | | | | 9.85 | | | | | | 10.21 | | |
| | |
Seacoast Common Stock
|
| |||||||||||||||
| | |
High
|
| |
Low
|
| |
Dividends
|
| |||||||||
2018 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 28.44 | | | | | $ | 23.96 | | | | | $ | — | | |
Second Quarter
|
| | | $ | 33.51 | | | | | $ | 25.61 | | | | | $ | — | | |
Third Quarter
|
| | | $ | 34.95 | | | | | $ | 28.30 | | | | | $ | — | | |
Fourth Quarter
|
| | | $ | 29.86 | | | | | $ | 21.74 | | | | | $ | — | | |
2019 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 29.75 | | | | | $ | 24.45 | | | | | $ | — | | |
Second Quarter
|
| | | $ | 28.78 | | | | | $ | 22.99 | | | | | $ | — | | |
Third Quarter
|
| | | $ | 27.64 | | | | | $ | 22.35 | | | | | $ | — | | |
Fourth Quarter
|
| | | $ | 31.02 | | | | | $ | 24.70 | | | | | $ | — | | |
2020 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 30.55 | | | | | $ | 14.64 | | | | | $ | — | | |
Second Quarter
|
| | | $ | 25.00 | | | | | $ | 16.35 | | | | | $ | — | | |
Third Quarter (through July 15, 2020)
|
| | | $ | 19.60 | | | | | $ | 17.61 | | | | | $ | — | | |
Buyer (State)
|
| |
Target (State)
|
|
First Bancshares, Inc. (MS) | | | Southwest Georgia Financial Corporation (GA) | |
Reliant Bancorp, Inc. (TN) | | | First Advantage Bancorp (TN) | |
Reliant Bancorp, Inc. (TN) | | | Tennessee Community Bank Holdings, Inc. (TN) | |
Community First Bancshares, Inc. (GA) | | | ABB Financial Group, Inc. (GA) | |
First Financial Banc Corporation (AR) | | | First National Corporation of Wynne (AR) | |
First Bancshares, Inc. (MS) | | | First Florida Bancorp, Inc. (FL) | |
BancorpSouth Bank (MS) | | | Summit Financial Enterprises, Inc. (FL) | |
United Community Banks, Inc. (GA) | | | First Madison Bank & Trust (GA) | |
Seacoast Banking Corporation of Florida (FL) | | | First Green Bancorp, Inc. (FL) | |
CapStar Financial Holdings, Inc. (TN) | | | Athens Bancshares Corporation (TN) | |
National Commerce Corporation (AL) | | | Landmark Bancshares, Inc. (GA) | |
First Federal Bancorp, MHC (FL) | | | Coastal Banking Company, Inc. (SC) | |
United Community Banks, Inc. (GA) | | | Four Oaks Fincorp, Inc. (NC) | |
Buyer (State)
|
| |
Target (State)
|
|
Seacoast Banking Corporation of Florida (FL) | | | Palm Beach Community Bank (FL) | |
Progress Financial Corporation (AL) | | | First Partners Financial, Inc. (AL) | |
Buyer (State)
|
| |
Target (State)
|
|
Norwood Financial Corp. (PA) | | | UpState New York Bancorp, Inc. (NY) | |
CNB Financial Corporation (PA) | | | Bank of Akron (NY) | |
Level One Bancorp, Inc. (MI) | | | Ann Arbor Bancorp, Inc. (MI) | |
South Plains Financial, Inc. (TX) | | | West Texas State Bank (TX) | |
First Financial Banc Corporation (AR) | | | First National Corporation of Wynne (AR) | |
Spirit of Texas Bancshares, Inc. (TX) | | | Chandler Bancorp, Inc. (TX) | |
First Bancshares, Inc. (MS) | | | First Florida Bancorp, Inc. (FL) | |
Nicolet Bankshares, Inc. (WI) | | | Choice Bancorp, Inc. (WI) | |
Santa Cruz County Bank (CA) | | | Lighthouse Bank (CA) | |
BancorpSouth Bank (MS) | | | Summit Financial Enterprises, Inc. (FL) | |
Glacier Bancorp, Inc. (MT) | | | FNB Bancorp (UT) | |
BayCom Corp (CA) | | | Uniti Financial Corporation (CA) | |
Spirit of Texas Bancshares, Inc. (TX) | | | First Beeville Financial Corporation (TX) | |
BancorpSouth Bank (MS) | | | Casey Bancorp, Inc. (TX) | |
First Bancshares, Inc. (MS) | | | FPB Financial Corp. (LA) | |
OceanFirst Financial Corp. (NJ) | | | Capital Bank of New Jersey (NJ) | |
RCB Holding Company, Inc. (OK) | | | Central Bank and Trust Co. (KS) | |
| | |
Price-to-LTM
Earnings Multiple |
| |
Price-to-Common
Tangible Book Value Multiple(1) |
| |
Price-to-Adjusted
Common Tangible Book Value Multiple(1)(2) |
| |
Premium-to-Core
Deposits Multiple(1)(3) |
| ||||||||||||
Assumed Value of Aggregate Merger Consideration
|
| | | | 14.4x | | | | | | 173.3% | | | | | | 197.1% | | | | | | 11.1% | | |
|
| | |
Price-to-LTM
Earnings Multiple |
| |
Price-to-Common
Tangible Book Value Multiple(1) |
| |
Price-to-Adjusted
Common Tangible Book Value Multiple(1)(2) |
| |
Premium-to-Core
Deposits Multiple(1)(3) |
| ||||||||||||
Precedent Transactions Regional Group:
|
| ||||||||||||||||||||||||
Median
|
| | | | 15.7x | | | | | | 171.5% | | | | | | 193.5% | | | | | | 11.5% | | |
Minimum
|
| | | | 10.9x | | | | | | 144.0% | | | | | | 150.4% | | | | | | 7.25% | | |
Maximum
|
| | | | 22.8x | | | | | | 228.0% | | | | | | 267.0% | | | | | | 18.1% | | |
Precedent Transactions Nationwide Group:
|
| ||||||||||||||||||||||||
Median
|
| | | | 14.3x | | | | | | 173.1% | | | | | | 199.6% | | | | | | 11.5% | | |
Minimum
|
| | | | 12.7x | | | | | | 137.2% | | | | | | 163.0% | | | | | | 6.79% | | |
Maximum
|
| | | | 21.0x | | | | | | 216.4% | | | | | | 275.2% | | | | | | 19.5% | | |
| | |
Tangible
Equity/ Tangible Assets |
| |
Core
Deposits(1) |
| |
LTM
ROAA(2) |
| |
LTM
ROAE(2) |
| |
Efficiency
Ratio |
| |
NPAs/
Assets(3) |
| |
LLR/
NPLs(4) |
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Fourth Street(5)
|
| | | | 10.6% | | | | | | 78.7% | | | | | | 1.41% | | | | | | 12.9% | | | | | | 60.2% | | | | | | 0.29% | | | | | | 297.7% | | |
Precedent Transactions –
Regional Group Median: |
| | | | 10.4% | | | | | | 73.6% | | | | | | 1.08% | | | | | | 10.8% | | | | | | 64.1% | | | | | | 0.59% | | | | | | 169.5% | | |
Precedent Transactions –
Nationwide Group Median: |
| | | | 11.5% | | | | | | 84.5% | | | | | | 1.27% | | | | | | 12.8% | | | | | | 57.2% | | | | | | 0.39% | | | | | | 173.0% | | |
Implied Value for Fourth Street common stock Based Upon:(3)
|
| |
Minimum
Implied Value |
| |
Average or
Midpoint Implied Value |
| |
Maximum
Implied Value |
| |||||||||
Comparable M&A Transactions – Regional Group
|
| | | $ | 62,597 | | | | | $ | 64,853 | | | | | $ | 69,421 | | |
Comparable M&A Transactions – Nationwide Group
|
| | | $ | 63,190 | | | | | $ | 63,926 | | | | | $ | 64,679 | | |
DCF – Terminal P/E Multiple
|
| | | $ | 51,507 | | | | | $ | 61,610 | | | | | $ | 72,528 | | |
DCF – Terminal P/Adj. TBV Multiple
|
| | | $ | 52,354 | | | | | $ | 57,054 | | | | | $ | 62,089 | | |
| Home BancShares, Inc. | | | Amerant Bancorp, Inc. | |
| Trustmark Corporation | | | FB Financial Corporation | |
| Renasant Corporation | | | First Bancorp | |
| United Community Banks, Inc. | | | City Holding Company | |
| WesBanco, Inc. | | | Carter Bank & Trust | |
| TowneBank | | | HomeTrust Bancshares, Inc. | |
| ServisFirst Bancshares, Inc. | | | First Bancshares, Inc. | |
| | |
Market
Cap ($M) |
| |
Price/
Tangible Book Value |
| |
Price/
2019E EPS |
| |
Price/
2020E EPS |
| |
Dividend
Yield |
| |
YTD Price
Change |
| |
Two Year
Total Return |
| |||||||||||||||||||||
Seacoast
|
| | | $ | 1,504.4 | | | | | | 205.6% | | | | | | 14.9x | | | | | | 14.7x | | | | | | 0.00% | | | | | | (3.86)% | | | | | | 9.62% | | |
Comparable Companies: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Median
|
| | | $ | 1,652.0 | | | | | | 178.6% | | | | | | 14.0x | | | | | | 14.1x | | | | | | 2.20% | | | | | | (2.80)% | | | | | | 0.17% | | |
Disqualified Individual
|
| |
Estimated Total Section 280G Value
of the Stock Option Acceleration |
| |||
Frederick Bickley
|
| | | $ | 7,092 | | |
Kern Davis
|
| | | $ | 7,092 | | |
William McQueen
|
| | | $ | 7,092 | | |
Christopher Moench
|
| | | $ | 7,092 | | |
Christian Ruppel
|
| | | $ | 7,092 | | |
John Savage
|
| | | $ | 7,092 | | |
Richard Wilkes
|
| | | $ | 7,092 | | |
Disqualified Individual
|
| |
Estimated Total
Section 280G Value of the Payments |
| |
Safe Harbor Amount
|
| |
Estimated Value of the
Excess Amounts Submitted for Shareholder Approval under the 280G Proposal |
| |||||||||
Frederick Bickley
|
| | | $ | 7,092 | | | | | $ | 15,269 | | | | | $ | 0 | | |
Kern Davis
|
| | | $ | 7,092 | | | | | $ | 7,559 | | | | | $ | 0 | | |
William McQueen
|
| | | $ | 7,092 | | | | | $ | 8,729 | | | | | $ | 0 | | |
Christopher Moench
|
| | | $ | 7,092 | | | | | $ | 11,819 | | | | | $ | 0 | | |
Christian Ruppel
|
| | | $ | 7,092 | | | | | $ | 4,769 | | | | | $ | 2,322 | | |
John Savage
|
| | | $ | 7,092 | | | | | $ | 10,949 | | | | | $ | 0 | | |
Richard Wilkes
|
| | | $ | 7,092 | | | | | $ | 9,119 | | | | | $ | 0 | | |
| | |
Fourth Street
|
| |
SEACOAST
|
|
Capital Stock
|
| |
Holders of Fourth Street capital stock are entitled to all the rights and obligations provided to capital shareholders under the FBCA and Fourth Street’s articles of incorporation and bylaws.
|
| |
Holders of Seacoast capital stock are entitled to all the rights and obligations provided to capital shareholders under the FBCA and Seacoast’s articles of incorporation and bylaws.
|
|
Authorized
|
| |
Fourth Street’s authorized capital stock consists of 20,000,000 shares of common stock, par value $1.00 per share, and 5,000,000 shares of preferred stock, par value $1.00 per share.
|
| |
Seacoast’s authorized capital stock consists of 120,000,000 shares of common stock, par value $0.10 per share, and 4,000,000 shares of preferred stock, stated value $0.10 per share (2,000 of which are designated as Fixed Rate Cumulative Perpetual Preferred Stock, Series A and 50,000 of which are designated as Mandatorily Convertible Noncumulative Nonvoting Preferred Stock, Series B).
|
|
Outstanding
|
| |
As of June 1, 2020, there were 11,219,850 shares of Fourth Street common stock outstanding and no shares of Fourth Street preferred stock outstanding.
|
| |
As of May 31, 2020, there were 52,994,817 shares of Seacoast common stock outstanding and no shares of Seacoast preferred stock outstanding.
|
|
Voting Rights
|
| |
Holders of Fourth Street common stock are entitled to one vote per share in the election of directors and on all matters submitted to a vote at a meeting of shareholders.
|
| |
Holders of Seacoast common stock generally are entitled to one vote per share in the election of directors and on all matters submitted to a vote at a meeting of shareholders.
|
|
Cumulative Voting
|
| |
No shareholder has the right of cumulative voting in the election of directors.
|
| |
No shareholder has the right of cumulative voting in the election of directors.
|
|
| | |
Fourth Street
|
| |
SEACOAST
|
|
Dividends
|
| |
Under the FBCA, a corporation may make a distribution, unless after giving effect to the distribution:
•
The corporation would not be able to pay its debts as they come due in the usual course of business; or
•
The corporation’s assets would be less than the sum of its total liabilities plus (unless the articles of incorporation provide otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
In addition, under Federal Reserve policy adopted in 2009, a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce its dividends if:
•
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;
•
its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or
•
it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
|
| |
Holders of Seacoast common stock are subject to the same provisions of the FBCA and the Federal Reserve Policy adopted in 2009.
|
|
Number of
Directors |
| |
Fourth Street’s bylaws provide that the number of directors serving on the Fourth Street board of directors shall be such number as determined from time to time by a resolution of a majority of the full board of directors. The number of directors may be increased or decreased from time to time by action of the Board of Directors, but no decrease shall have the effect of shortening the terms of any incumbent director. Fourth Street directors are elected on an annual basis and serve until the next annual meeting of the Fourth Street shareholders and until their respective successors are duly elected and qualified. There are currently 14 directors serving on the Fourth Street board of directors.
|
| |
Seacoast’s bylaws provide that the number of directors serving on the Seacoast board of directors shall be such number as determined from time to time by a vote of 66 2/3% of the whole board of directors and a majority of the Continuing Directors (director who either (i) was first elected as a director of the company prior to March 1, 2002 or (ii) was designated as a Continuing Directors by a majority vote of the Continuing Directors), but in no event shall be fewer than three directors nor greater than fourteen directors (exclusive of the directors to be elected by the holders of one or more series of preferred stock voting separately as a class).
There are currently eleven directors serving on the Seacoast board of directors.
The Seacoast board of directors is divided into three classes, with the members of each
|
|
| | |
Fourth Street
|
| |
SEACOAST
|
|
| | | | | |
class of directors serving staggered three-year terms and with approximately one-third of the directors being elected annually. As a result, it would take a dissident shareholder or shareholder group at least two annual meeting of shareholders to replace a majority of the directors of Seacoast. Each director holds office for the term for which he or she is elected and until his or her successor is elected and qualified, subject to such directors’ death, resignation or removal.
|
|
Election of
Directors |
| |
Under the FBCA, unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the holders of the shares entitled to vote in an election of directors the annual meeting at which a quorum is present. Fourth Street’s articles of incorporation do not otherwise provide for the vote required to elect directors.
|
| |
Seacoast directors are similarly elected in accordance with FBCA and its articles of incorporation do not otherwise provide for the vote required to elect directors.
However, notwithstanding the plurality standard, in an uncontested election for directors, our Corporate Governance Guidelines provide that if any director nominee receives a greater number of votes “withheld” from his or her election than votes “for” such election, then the director will promptly tender his or her resignation to the board of directors following certification of the shareholder vote, with such resignation to be effective upon acceptance by the board of directors. The Compensation and Governance Committee would then review and make a recommendation to the board of directors as to whether the board should accept the resignation, and the board of directors would ultimately decide whether to accept the resignation.
|
|
Removal of
Directors |
| |
Fourth Street’s bylaws provide that directors may be removed with or without cause. A director may be removed by the shareholders at a meeting of shareholders, provided the notice of the meeting states that the purpose, or one of the purposes, of the meeting is removal of the director.
|
| |
Seacoast’s bylaws provide that directors may be removed only for cause upon the affirmative vote of (1) 66 2/3% of all shares of common stock entitled to vote and (2) holders of a majority of the outstanding common stock that are not beneficially owned or controlled, directly or indirectly, by any person (1) who is the beneficial owner of 5% or more of the common stock or (2) who is an affiliate of Seacoast and at any time within the past five years was the beneficial owner of 5% or more of Seacoast’s then outstanding common stock (“Independent Majority of Shareholders”) at a shareholders’ meeting duly called and held for that purpose upon not less than 30 days’ prior written notice.
|
|
Vacancies on the
Board of Directors |
| |
Fourth Street’s bylaws provide that in the event of any vacancy on the board of directors, including any vacancy created by a failure to qualify or by any increase in the number of directors authorized, the board of directors may, but shall not be required
|
| |
Seacoast’s bylaws provide that vacancies in the Seacoast’s board of directors may be filled by the affirmative vote of (1) 66 2/3% of all directors and (2) majority of the Continuing Directors, even if less than a quorum exists, or if no directors remain, by
|
|
| | |
Fourth Street
|
| |
SEACOAST
|
|
| | |
to, fill such vacancy by the affirmative vote of a majority of the remaining directors, though less than the quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired portion of the term of his predecessor in office.
|
| |
the affirmative vote of not less than 66 2/3% of all shares of common stock entitled to vote and an Independent Majority of Shareholders.
|
|
Action by Written
Consent |
| |
Fourth Street’s bylaws provide that any action of the board of directors or of any committee thereof, which is required or permitted to be taken at a meeting, may be taken without a meeting if consent in writing, setting forth the action to be taken, and signed by all members of the board of directors or of the committee, as the case may be, is filed in the minutes of the proceedings of the board of directors or such committee. Action shall be effective when the last director signs the consent, unless the consent specifies a different effective date. The consent signed shall have the effect of a meeting vote and may be described as such in any document.
|
| |
Seacoast’s articles of incorporation provide that no action may be taken by written consent except as may be provided in the designation of the preferences, limitations and relative rights of any series of Seacoast’s preferred stock. Any action required or permitted to be taken by the holders of Seacoast’s common stock must be effected at a duly called annual or special meeting of such holders, and may not be effected by any consent in writing by such holders.
|
|
| | |
Fourth Street’s bylaws also provide that any action required or permitted to be taken at an annual meeting or special meeting of the shareholders may be taken without a meeting, without prior notice, and without a vote if the action is taken by the holders of outstanding stock of each voting group entitled to vote thereon having not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. The action must be evidenced by one or more written consents executed by the requisite percentage of Fourth Street shareholders in order to be effective.
|
| | | |
Advance Notice requirements for Shareholder
Nominations and Other Proposals |
| | None. | | |
Any Seacoast shareholder entitled to vote generally on the election of directors may recommend a candidate for nomination as a director. A shareholder may recommend a director nominee by submitting the name and qualifications of the candidate the shareholder wishes to recommend to Seacoast’s Compensation and Governance Committee, c/o Seacoast Banking Corporation of Florida, 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995.
To be considered, recommendations with respect to an election of directors to be held at an annual meeting must be received not less than 60 days nor more than 90 days prior to the anniversary of Seacoast’s last annual meeting of shareholders (or, if the
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|
| | |
Fourth Street
|
| |
SEACOAST
|
|
| | | | | |
date of the annual meeting is changed by more than 20 days from such anniversary date, within 10 days after the date that Seacoast mails or otherwise gives notice of the date of the annual meeting to shareholders), and recommendations with respect to an election of directors to be held at a special meeting called for that purpose must be received by the 10th day following the date on which notice of the special meeting was first mailed to shareholders.
|
|
Notice of
Shareholder Meeting |
| |
Notice of each shareholder meeting must be mailed to each shareholder entitled to vote not less than 10, nor more than 60 days before the date of the meeting.
|
| |
Notice of each shareholder meeting must be given to each shareholder entitled to vote not less than 10, nor more than 60 days before the date of the meeting.
|
|
Amendments to
Charter |
| |
Fourth Street’s articles of incorporation may be amended in accordance with the FBCA.
Subject to certain requirements set forth in Section 607.1003 of the FBCA, amendments to a corporation’s articles of incorporation must be approved by a corporation’s board of directors and holders of a majority of the outstanding stock of a corporation entitled to vote thereon and, in cases in which class voting is required, by holders of a majority of the outstanding shares of such class. The board of directors must recommend the amendment to the shareholders, unless the board of directors determines that, because of a conflict of interest or other special circumstances, it should make no recommendation and communicates the basis for its determination to the shareholders with the amendment.
The FBCA also allows the board of directors to amend the articles of incorporation without shareholder approval in certain discrete circumstances (for example, to change the par value for a class or series of shares).
|
| |
Seacoast’s articles of incorporation have similar amendment provisions, except that the affirmative vote of (1) 662∕3% of all of shares outstanding and entitled to vote, voting as classes, if applicable, and (2) an Independent Majority of Shareholders will be required to approve any change of Articles VI (“Board of Directors”), VII (“Provisions Relating to Business Combinations”), IX (“Shareholder Proposals”) and X (“Amendment of articles of incorporation”) of the articles of incorporation.
|
|
Amendments to
Bylaws |
| |
Fourth Street’s bylaws may be altered, amended or repealed in a manner consistent with the FBCA at any time by a majority of the full board of directors.
|
| |
Seacoast’s bylaws may be amended by a vote of (1) 662∕3% of all directors and (2) majority of the Continuing Directors. In addition, the shareholders may also amend the Bylaws by the affirmative vote of (1) 662∕3% of all shares of common stock entitled to vote and (2) an Independent Majority of Shareholders.
Under the FBCA, Seacoast’s shareholders, by majority vote of all of the shares having voting power, may amend or repeal the bylaws even though they may also be amended or repealed by the Seacoast board of directors.
|
|
| | |
Fourth Street
|
| |
SEACOAST
|
|
Special Meeting of Shareholders
|
| |
Fourth Street’s bylaws provide that special meetings of shareholders of Fourth Street may be called by the chairman of the board or the president of Fourth Street and shall be called by the president or the chairman, or pursuant to a resolution adopted by shareholders holding at least one-half of the outstanding shares of Fourth Street. Shareholder’s must sign, date, and deliver to Fourth Street’s Secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held.
|
| |
Seacoast’s bylaws provide that special meetings of the shareholders, for any purpose or purposes unless prescribed by statute, may be called by the Chairman, Chief Executive Officer, the President or by the board of directors, and shall be called by the Chief Executive Officer at the request of the holders of shares representing not less than 50% of all votes entitled to be cast by all shares of Seacoast common stock outstanding.
|
|
Quorum
|
| |
Except as otherwise provided in Fourth Street’s bylaws or articles of incorporation, a majority of the outstanding shares of Fourth Street entitled to vote shall constitute a quorum at a meeting of shareholders.
|
| |
A majority of the shares entitled to vote, represented in person or by proxy, constitutes a quorum at any shareholder meeting.
|
|
Proxy
|
| |
At any meeting of shareholders, a shareholder may be represented by a proxy appointed by an instrument executed in writing by the shareholder, or by his duly authorized attorney-in fact; but no proxy shall be valid after eleven months from its date, unless the instrument appointing the proxy provides for a longer period.
|
| |
Under the FBCA, a proxy is valid for 11 months unless a longer period in expressly provided in the appointment form.
|
|
Preemptive Rights
|
| |
Fourth Street’s shareholders do not have preemptive rights.
|
| |
Seacoast’s shareholders do not have preemptive rights.
|
|
Shareholder Rights Plan/Shareholders’ Agreement
|
| |
Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose.
When a shareholder’s agreement is signed, the shareholders parties thereto shall deliver copies of the agreement to Fourth Street principal office.
|
| |
Seacoast does not have a rights plan. Neither Seacoast nor Seacoast shareholders are parties to a shareholders’ agreement with respect to Seacoast’s capital stock.
|
|
Indemnification of
Directors and Officers |
| |
Fourth Street’s bylaws provide that Fourth Street shall indemnify its officers, directors, employees, and agents, to the fullest extent authorized by the FBCA.
|
| |
Seacoast’s bylaws provide that Seacoast may indemnify its current and former directors, officers, employees and agents in accordance with that provided under the FBCA.
|
|
Certain Business
Combination Restrictions |
| |
Fourth Street’s articles of incorporation do not contain any provision regarding business combinations between Fourth Street and significant shareholders.
|
| |
Seacoast’s articles of incorporation do not contain any provision regarding business combinations between Seacoast and significant shareholders.
|
|
Fundamental
Business Transactions |
| |
Fourth Street’s articles of incorporation do not contain any provision regarding fundamental business transactions.
|
| |
Seacoast’s articles of incorporation provide that Seacoast needs the affirmative vote of 66 2/3% of all shares of common stock entitled to vote for the approval of any merger, consolidation, share exchange or sale, exchange, lease, transfer, purchase and assumption of assets and liabilities, or assumption of liabilities of Seacoast or any subsidiary of all or substantially all of the corporation’s consolidated assets or
|
|
| | |
Fourth Street
|
| |
SEACOAST
|
|
| | | | | |
liabilities or both, unless the transaction is approved and recommended to the shareholders by the affirmative vote of 66 2/3% of all directors and a majority of the Continuing Directors.
|
|
Non-Shareholder
Constituency Provision |
| |
Fourth Street’s articles of incorporation do not contain a provision that expressly permits the board of directors to consider constituencies other than the shareholders when evaluating certain offers.
|
| |
Seacoast’s articles of incorporation provide that in connection with the exercise of its judgment in determining what is in the best interest of the corporation and its shareholders when evaluating certain offers, in addition to considering the adequacy and form of the consideration, the board shall also consider the social and economic effects of the transaction on Seacoast and its subsidiaries, its and their employees, depositors, loan and other customers, creditors, and the communities in which Seacoast and its subsidiaries operate or are located; the business and financial condition, and the earnings and business prospects of the acquiring person or persons, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the acquisition, and other likely financial obligations of the acquiring person or persons, and the possible effect of such conditions upon the corporation and its subsidiaries and the other elements of the communities in which the corporation and its subsidiaries operate or are located; the competence, experience, and integrity of the person and their management proposing or making such actions; the prospects for a successful conclusion of the business combination prospects; and Seacoast’s prospects as an independent entity.
|
|
Dissenters’ Rights
|
| |
Under the FBCA, a shareholder generally has the right to dissent from any merger to which the corporation is a party, from any sale of all assets of the corporation, or from any plan of exchange and to receive fair value for his or her shares. See “The Merger — Appraisal Rights for Fourth Street Shareholders” and Appendix C.
|
| |
Under the FBCA, dissenters’ rights are not available to holders of shares of any class or series of shares which is designated as a national market system security or listed on an interdealer quotation system by the National Association of Securities Dealers, Inc. Accordingly, holders of Seacoast common stock are not entitled to exercise dissenters’ rights under the FBCA.
|
|
Name
|
| |
Position Held with Fourth Street
|
| |
Principal Occupation Or Employment
|
|
Neil W. Savage | | | Chairman of the Board | | | Retired Banker | |
Christopher S. Moench | | | Vice Chair of the Board | | | Chief Executive Officer | |
Stephenson Anderson | | | Director | | | Business Owner | |
Frederick L. Bickley | | | Director | | | Real Estate Investor | |
Ronald Campbell | | | Director | | | Business Executive | |
Kern M. Davis, M.D. | | | Director | | | Medical Doctor | |
William B. McQueen | | | Director | | | Partner/Attorney | |
James A. Montgomery | | | Director | | | Retired Investment Manager | |
Christian D. Ruppel | | | Director | | | Entrepreneur and Executive | |
Dennis G. Ruppel | | | Director | | | Insurance Company Executive | |
John W. Savage | | | Director | | | Senior Executive | |
Craig Sher | | | Director | | | Business Executive | |
Cathy P. Swanson | | | Director and CEO | | | CEO of Fourth Street and Freedom Bank | |
Richard D. Wilkes, DVM | | | Director | | | Business Owner | |
Name
|
| |
Position Held with Freedom Bank
|
| |
Principal Occupation Or Employment
|
|
Dennis G. Ruppel | | | Chairman of the Board | | | Insurance Company Executive | |
William B. McQueen | | | Vice Chair of the Board | | | Partner/Attorney | |
Stephenson Anderson | | | Director | | | Business Owner | |
Frederick L. Bickley | | | Director | | | Real Estate Investor | |
Ronald Campbell | | | Director | | | Business Executive | |
Kern M. Davis, M.D. | | | Director | | | Medical Doctor | |
James A. Montgomery | | | Director | | | Retired Investment Manager | |
Christian D. Ruppel | | | Director | | | Entrepreneur and Executive | |
John W. Savage | | | Director | | | Senior Executive | |
Neil W. Savage | | | Director | | | Retired Banker | |
Craig Sher | | | Director | | | Business Executive | |
Cathy P. Swanson | | | Director | | | CEO of Fourth Street and Freedom Bank | |
Richard D. Wilkes, DVM | | | Director | | | Business Owner | |
Name
|
| |
Principal Occupation and Business Experience During the Past Five Years
|
|
Cathy P. Swanson | | | CEO of Freedom Bank, and President and CEO of Fourth Street | |
Susan L. Blackburn | | | President and COO of Freedom Bank | |
C. Peter Bardin | | |
CFO of Freedom Bank and CFO and Corporate Secretary of Fourth Street
|
|
| | |
Common Stock
Beneficially Owned |
| |||||||||
Name of Beneficial Owner and Address of more that 5% of the shares
|
| |
Number
|
| |
Percent
|
| ||||||
5% or Greater Shareholders | | | | | | | | | | | | | |
SME Chirldren LP(1)
756 Harbour Isles Court, North Palm Beach, FL 33410 |
| | | | 1,061,637 | | | | | | 9.07% | | |
Directors and Executive Officers | | | | | | | | | | | | | |
Stephenson Anderson(2)
|
| | | | 121,763 | | | | | | 1.08% | | |
Frederick L. Bickley(3)
|
| | | | 230,632 | | | | | | 2.04% | | |
Ronald J. Campbell
|
| | | | 33,000 | | | | | | 0.29% | | |
Kern M. Davis, MD(4)
|
| | | | 248,000 | | | | | | 2.21% | | |
William B. McQueen(5)
|
| | | | 254,000 | | | | | | 2.25% | | |
Christopher S. Moench(6)
150 Second Avenue North, Suite 1600,n St. Petersburg, FL 33701 |
| | | | 1,427,004* | | | | | | 12.05% | | |
James A. Montgomery, Jr.(7)
|
| | | | 52,710 | | | | | | 0.47% | | |
Christian D. Ruppel(8)
|
| | | | 1,036,784 | | | | | | 8.87% | | |
Dennis G. Ruppel(9)
|
| | | | 892,882 | | | | | | 7.66% | | |
John W. Savage(10)
150 Second Avenue North, Suite 1600,n St. Petersburg, FL 33701 |
| | | | 1,423,204* | | | | | | 12.02% | | |
Neil W. Savage(11)
150 Second Avenue North, Suite 1600,n St. Petersburg, FL 33701 |
| | | | 1,507,404* | | | | | | 12.65% | | |
Craig H. Sher(12)
|
| | | | 160,000 | | | | | | 1.43% | | |
Cathy P. Swanson(13)
|
| | | | 71,747 | | | | | | 0.64% | | |
Richard D. Wilkes, DVM(14)
|
| | | | 1,105,902 | | | | | | 9.47% | | |
C. Peter Bardin(15)
|
| | | | 66,040 | | | | | | 0.59% | | |
Adam M. Curtis(16)
|
| | | | 36,370 | | | | | | 0.32% | | |
Susan L. Blackburn(17)
|
| | | | 70,081 | | | | | | 0.62% | | |
All Directors and Executive Officers as a Group (17 persons)
|
| | | | 5,899,515 | | | | | | 42.92% | | |
| | |
Page
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| | | | A-1 | | | |
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| | | | A-50 | | |
Exhibit
|
| |
Description
|
|
A
|
| | Bank Merger Agreement | |
B
|
| | Form of Shareholder Support Agreement | |
C
|
| | Form of Claims Letter | |
D
|
| | Form of Restrictive Covenant Agreement | |
|
Affordable Care Act
|
| | Section 3.3(iii) | |
|
Aggregate Merger Consideration
|
| | Section 1.4(a) | |
|
Articles of Merger
|
| | Section 3.3 | |
|
Agreement
|
| | Parties | |
|
Bank
|
| | Parties | |
|
Bank Merger
|
| | Preamble | |
|
Bank Merger Agreement
|
| | Preamble | |
|
Change in Recommendation
|
| | Section 4.12(b) | |
|
Closing
|
| | Section 1.2 | |
|
Closing Date
|
| | Section 1.2 | |
|
Company
|
| | Parties | |
|
Company Regulatory Agreement
|
| | Section 3.3(v) | |
|
Covered Employees
|
| | Section 4.14(a) | |
|
Covered Parties
|
| | Section 4.15(b) | |
|
CRA
|
| | Section 3.3(q) | |
|
Debentures
|
| | Section 1.5(d) | |
|
Dissenting Shareholder
|
| | Section 2.3 | |
|
Effective Time
|
| | Section 1.3 | |
|
Exchange Agent
|
| | Section 2.1(a) | |
|
Exchange Fund
|
| | Section 2.1(d) | |
|
Excluded Shares
|
| | Section 1.5(e) | |
|
Fourth Street Certificates
|
| | Section 1.4(b) | |
|
Fourth Street Directors’ Recommendation
|
| | Section 3.3(b)(ii) | |
|
Fourth Street Disclosure Letter
|
| | Section 3.1 | |
|
Fourth Street Latest Balance Sheet
|
| | Section 3.3(d)(ii) | |
|
Fourth Street Meeting
|
| | Section 4.5(a) | |
|
IIPI
|
| | Section 3.3(r)(i) | |
|
Indemnification Notice
|
| | Section 7.2(b) | |
|
Indemnified Party
|
| | Section 4.15(a) | |
|
Indemnified Parties
|
| | Section 7.2(b) | |
|
Material Adverse Effect
|
| | Section 3.2(b) | |
|
Measuring Date
|
| | Section 7.1(a) | |
|
Merger
|
| | Preamble | |
|
Merger Consideration
|
| | Section 1.4(a) | |
|
OCC
|
| | Section 1.3 | |
|
Regulatory Consents
|
| | Section 4.8(b) | |
|
Required Consents
|
| | Section 5.1(b) | |
|
Sarbanes-Oxley Act
|
| |
Section 3.3(d)(iv)
|
|
|
Shareholder Support Agreement
|
| | Preamble | |
|
SBC
|
| | Parties | |
|
SBC Preferred Stock
|
| | Section 3.4(c) | |
|
SBC Regulatory Agreement
|
| | Section 3.4(f)(ii) | |
|
Seacoast
|
| | Parties | |
|
SNB
|
| | Parties | |
|
Surviving Bank
|
| | Section 1.1 | |
|
Surviving Corporation
|
| | Section 1.1 | |
|
Takeover Laws
|
| | Section 3.3(v) | |
| Seacoast: | | |
Seacoast Banking Corporation of Florida
815 Colorado Avenue Stuart, Florida 34994 Telecopy Number: (772) 288-6086 Attention: Dennis Hudson |
|
|
Copy to Counsel (which
shall not constitute notice): |
| |
Alston & Bird LLP
1201 West Peachtree Street Atlanta, Georgia 30309 Telecopy Number: (404) 881-7777 Attention: Randolph A. Moore III |
|
| Company: | | |
Fourth Street Banking Company
1200 Fourth Street, North Saint Petersburg, Florida 33701 Attention: Cathy P. Swanson |
|
|
Copy to Counsel (which
shall not constitute notice): |
| |
Smith Mackinnon, PA
255 South Orange Avenue, Suite 1200 Orlando, Florida 32801 Attention: Jack P. Greeley, Esq. |
|
By: |
|
By: |
|
| | | | “SELLER” | | |||
| | | | FOURTH STREET BANKING COMPANY | | |||
| | | | By: | | |
Name: Cathy Swanson
Title: Chief Executive Officer |
|
| | | | “BUYER” | | |||
| | | | SEACOAST BANKING CORPORATION OF FLORIDA | | |||
| | | | By: | | |
Name: Dennis S. Hudson, III
Title: Chief Executive Officer |
|
| | | | “SHAREHOLDER” | | |||
| | | |
Name:
|
| |||
| | | |
Address:
|
| |||
| | | |
Number of Shares of Common Stock Over Which Shareholder Has Voting Power and Capacity of Ownership (including any Shares that are converted as a result of the Merger):
|
|
By: |
|
| To Buyer: | | |
Seacoast Banking Corporation of Florida
815 Colorado Avenue Stuart, Florida 34994 Facsimile Number: (772) 288-6086 Attention: Dennis S. Hudson, III |
|
| To Employee: | | | To the address set forth under such Employee’s name on the signature page of this Agreement | |
| BUYER: | | | | | |||
| SEACOAST BANKING CORPORATION OF FLORIDA | | ||||||
| By: | | |
Name: Dennis S. Hudson, III
Title:
Chairman and Chief Executive Officer
|
| |
| DIRECTOR: | | | |||||
|
Name:
Address:
|
| |
| | |
At December 31
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Assets | | | | | | | | | | | | | |
Cash and due from banks
|
| | | $ | 3,901 | | | | | | 3,567 | | |
Interest-bearing deposits
|
| | | | 50,728 | | | | | | 24,131 | | |
Total cash and cash equivalents
|
| | | | 54,629 | | | | | | 27,698 | | |
Securities
|
| | | | 10,516 | | | | | | 11,204 | | |
Loans held for sale
|
| | | | 3,976 | | | | | | — | | |
Loans, net of allowance for loan losses of $2,974 and $2,724
|
| | | | 262,810 | | | | | | 224,506 | | |
Federal Home Loan Bank stock, at cost
|
| | | | 244 | | | | | | 432 | | |
Premises and equipment, net
|
| | | | 9,476 | | | | | | 9,650 | | |
Accrued interest receivable
|
| | | | 856 | | | | | | 721 | | |
Deferred tax asset
|
| | | | 463 | | | | | | 503 | | |
Bank-owned life insurance
|
| | | | 2,007 | | | | | | 1,958 | | |
Other assets
|
| | | | 1,408 | | | | | | 680 | | |
Total assets
|
| | | $ | 346,385 | | | | | | 277,352 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Noninterest-bearing demand deposits
|
| | | | 108,026 | | | | | | 80,733 | | |
Savings, NOW and money-market deposits
|
| | | | 123,759 | | | | | | 107,004 | | |
Time deposits
|
| | | | 76,300 | | | | | | 51,404 | | |
Total deposits
|
| | | | 308,085 | | | | | | 239,141 | | |
Convertible subordinated debentures, net of issuance cost
|
| | | | 9,971 | | | | | | 9,967 | | |
Federal Home Loan Bank advance
|
| | | | — | | | | | | 5,000 | | |
Other liabilities
|
| | | | 1,596 | | | | | | 1,374 | | |
Total liabilities
|
| | | | 319,652 | | | | | | 255,482 | | |
Commitments and contingencies (Notes 10, 19 and 21) | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, $1 par, 5,000,000 shares authorized, none outstanding
|
| | | | — | | | | | | — | | |
Common stock, $1 par; 20,000,000 shares authorized,11,219,850 and 11,163,480 shares issued and outstanding
|
| | | | 11,219 | | | | | | 11,163 | | |
Additional paid-in capital
|
| | | | 14,283 | | | | | | 14,229 | | |
Retained earnings (accumulated deficit)
|
| | | | 1,034 | | | | | | (3,385) | | |
Accumulated other comprehensive income (loss)
|
| | | | 197 | | | | | | (140) | | |
Total equity for controlling interest
|
| | | | 26,733 | | | | | | 21,867 | | |
Noncontrolling interest
|
| | | | — | | | | | | 3 | | |
Total stockholders’ equity
|
| | | | 26,733 | | | | | | 21,870 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 346,385 | | | | | | 277,352 | | |
|
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Interest income: | | | | | | | | | | | | | |
Loans
|
| | | $ | 14,113 | | | | | | 11,325 | | |
Securities
|
| | | | 476 | | | | | | 427 | | |
Other
|
| | | | 900 | | | | | | 363 | | |
Total interest income
|
| | | | 15,489 | | | | | | 12,115 | | |
Interest expense | | | | | | | | | | | | | |
Deposits
|
| | | | 2.938 | | | | | | 1753 | | |
Borrowings
|
| | | | 465 | | | | | | 457 | | |
Total interest expense
|
| | | | 3,403 | | | | | | 2,210 | | |
Net interest income
|
| | | | 12,086 | | | | | | 9,905 | | |
Provision for loan losses
|
| | | | 240 | | | | | | 411 | | |
Net interest income after provision for loan losses
|
| | | | 11,846 | | | | | | 9,494 | | |
Noninterest income: | | | | | | | | | | | | | |
Gain on sale of loans
|
| | | | 2,649 | | | | | | 706 | | |
Service charges on deposit accounts
|
| | | | 252 | | | | | | 235 | | |
Income earned on bank-owned life insurance
|
| | | | 49 | | | | | | 50 | | |
Other
|
| | | | 397 | | | | | | 241 | | |
Total noninterest incomexpense:
|
| | | | 3,347 | | | | | | 1,232 | | |
Noninterest expenses: | | | | | | | | | | | | | |
Salaries and employee benefits
|
| | | | 6,427 | | | | | | 4,659 | | |
Occupancy and equipment
|
| | | | 595 | | | | | | 567 | | |
Data processing
|
| | | | 530 | | | | | | 504 | | |
Professional fees
|
| | | | 674 | | | | | | 462 | | |
Federal Deposit Insurance and state assessments
|
| | | | 101 | | | | | | 200 | | |
Other
|
| | | | 1,030 | | | | | | 533 | | |
Total noninterest expenses
|
| | | | 9,357 | | | | | | 6,925 | | |
Earnings before income taxes
|
| | | | 5,836 | | | | | | 3,801 | | |
Income taxes
|
| | | | 1,417 | | | | | | 938 | | |
Net earnings including noncontrolling interest
|
| | | | 4,419 | | | | | | 2,863 | | |
Loss attributable to noncontrolling interest
|
| | | | — | | | | | | 2 | | |
Earnings attributable to Fourth Street Banking Company
|
| | | $ | 4,419 | | | | | | 2,865 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net earnings including noncontrolling interest
|
| | | $ | 4,419 | | | | | | 2,863 | | |
Other comprehensive income: | | | | | | | | | | | | | |
Change in unrealized gain on debt securities available for sale: | | | | | | | | | | | | | |
Unrealized gain (loss) arising during the year
|
| | | | 488 | | | | | | (325) | | |
Reclassification adjustment for realized gains
|
| | | | (37) | | | | | | — | | |
Net change in unrealized gain (loss)
|
| | | | 451 | | | | | | (325) | | |
Deferred income taxes on above change
|
| | | | (114) | | | | | | 82 | | |
Total other comprehensive income (loss)
|
| | | | 337 | | | | | | (243) | | |
Comprehensive income
|
| | | $ | 4,756 | | | | | | 2,620 | | |
| | |
Total Stockholders’ Equity
|
| | | | | | | | | | | | | |||||||||||||||||||||||||||
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit (Retained Earnings) |
| |
Accumulated
Other Compre- hensive Income (Loss) |
| |
Noncontrolling
Interest |
| |
Total
Equity |
| ||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
| | | | 11,163,480 | | | | | $ | 11,163 | | | | | | 14,199 | | | | | | (6,250) | | | | | | 103 | | | | | | 5 | | | | | | 19,220 | | |
Net earnings
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,865 | | | | | | — | | | | | | (2) | | | | | | 2,863 | | |
Net change in unrealized gain on
securities available for sale, net of tax |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (243) | | | | | | | | | | | | (243) | | |
Stock compensation expense
|
| | | | — | | | | | | — | | | | | | 30 | | | | | | — | | | | | | — | | | | | | — | | | | | | 30 | | |
Balance at December 31, 2018
|
| | | | 11,163,480 | | | | | | 11,163 | | | | | | 14,229 | | | | | | (3,385) | | | | | | (140) | | | | | | 3 | | | | | | 21,870 | | |
Net earnings
|
| | | | — | | | | | | — | | | | | | — | | | | | | 4,419 | | | | | | — | | | | | | — | | | | | | 4,419 | | |
Dissolution of noncontrolling
interest |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3) | | | | | | (3) | | |
Net change in unrealized gain on
debt securities available for sale, net of tax |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 337 | | | | | | — | | | | | | 337 | | |
Issuance of common stock
|
| | | | 56,370 | | | | | | 56 | | | | | | 17 | | | | | | — | | | | | | — | | | | | | — | | | | | | 73 | | |
Stock compensation expense
|
| | | | — | | | | | | — | | | | | | 37 | | | | | | — | | | | | | — | | | | | | — | | | | | | 37 | | |
Balance at December 31, 2019
|
| | | | 11,219,850 | | | | | $ | 11,219 | | | | | | 14,283 | | | | | | 1,034 | | | | | | 197 | | | | | | — | | | | | | 26,733 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net earnings
|
| | | $ | 4,419 | | | | | | 2,863 | | |
Adjustments to reconcile net earnings including noncontrolling interest to net cash (used in) provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 327 | | | | | | 294 | | |
Provision for loan loss
|
| | | | 240 | | | | | | 411 | | |
Deferred income taxes
|
| | | | (74) | | | | | | (43) | | |
Stock compensation expense
|
| | | | 37 | | | | | | 30 | | |
Income from bank-owned life insurance, net
|
| | | | (49) | | | | | | (50) | | |
Net amortization of premiums and discounts on securities
|
| | | | 46 | | | | | | 46 | | |
Net amortization of deferred loan fees and costs
|
| | | | (231) | | | | | | (89) | | |
Origination of loans held for sale
|
| | | | (34,414) | | | | | | (8,289) | | |
Proceeds from sale of loans held for sale
|
| | | | 32,835 | | | | | | 8,919 | | |
Gain on sale of loans
|
| | | | (2,649) | | | | | | (706) | | |
Gain on sale of securities
|
| | | | (37) | | | | | | — | | |
Net increase in accrued interest receivable
|
| | | | (135) | | | | | | (121) | | |
Net increase in other assets
|
| | | | (728) | | | | | | (26) | | |
Net increase in other liabilities
|
| | | | 222 | | | | | | 549 | | |
Amortization of long-term debt issuance cost
|
| | | | 4 | | | | | | 4 | | |
Net cash (used in) provided by operating activities
|
| | | | (187) | | | | | | 3,792 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchase of securities
|
| | | | — | | | | | | (1,000) | | |
Proceeds from securities
|
| | | | 1,000 | | | | | | 4 | | |
Principal repayments of securities
|
| | | | 130 | | | | | | 168 | | |
Net increase in loans
|
| | | | (38,064) | | | | | | (27,922) | | |
Purchase of premises and equipment, net
|
| | | | (153) | | | | | | (1,492) | | |
(Redemption) purchase of Federal Home Loan Bank stock
|
| | | | 188 | | | | | | (42) | | |
Net cash used in investing activities
|
| | | | (36,899) | | | | | | (30,284) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Net increase in deposits
|
| | | | 68,944 | | | | | | 23,454 | | |
Decrease in other borrowings
|
| | | | (5,000) | | | | | | (540) | | |
Proceeds from issue of stock
|
| | | | 73 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 64,017 | | | | | | 22,914 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 26,931 | | | | | | (3,578) | | |
Cash and cash equivalents at beginning of year
|
| | | | 27,698 | | | | | | 31,276 | | |
Cash and cash equivalents at end of year
|
| | | $ | 54,629 | | | | | | 27,698 | | |
Supplemental disclosure of cash flow information:
Cash paid during the year for interest |
| | | $ | 2,919 | | | | | | 1,736 | | |
Noncash transactions:
|
| | | | | | | | | | | | |
Accumulated other comprehensive income, net change in unrealized gain on debt securities unrealized gain on debt securities
|
| | | $ | 337 | | | | | | (243) | | |
Loss attributable to noncontrolling interest
|
| | | $ | 3 | | | | | | 2 | | |
| | |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
At December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt Securities Available for Sale:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | $ | 1 | | | | | | — | | | | | | — | | | | | | 1 | | |
SBA pool
|
| | | | 405 | | | | | | 1 | | | | | | — | | | | | | 406 | | |
CMO
|
| | | | 256 | | | | | | — | | | | | | (7) | | | | | | 249 | | |
Municipal securities
|
| | | | 4,554 | | | | | | 66 | | | | | | (7) | | | | | | 4,613 | | |
Debt securities available for sale
|
| | | | 5,216 | | | | | | 67 | | | | | | (14) | | | | | | 5,269 | | |
Equity Securities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Mutual fund
|
| | | | 5,036 | | | | | | 211 | | | | | | — | | | | | | 5,247 | | |
Total securities
|
| | | $ | 10,252 | | | | | | 278 | | | | | | (14) | | | | | | 10,516 | | |
At December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt Securities Available for Sale:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | | 19 | | | | | | — | | | | | | — | | | | | | 19 | | |
SBA pool
|
| | | | 471 | | | | | | — | | | | | | (7) | | | | | | 464 | | |
CMO
|
| | | | 301 | | | | | | — | | | | | | (23) | | | | | | 278 | | |
Municipal securities
|
| | | | 4,600 | | | | | | 17 | | | | | | (42) | | | | | | 4,575 | | |
Debt securities available for sale
|
| | | | 5,391 | | | | | | 17 | | | | | | (72) | | | | | | 5,336 | | |
Equity Securities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Mutual fund
|
| | | | 6,000 | | | | | | — | | | | | | (132) | | | | | | 5,868 | | |
Total securities
|
| | | $ | 11,391 | | | | | | 17 | | | | | | (204) | | | | | | 11,204 | | |
| | |
Less Than Twelve Months
|
| |
Greater Than Twelve Months
|
| ||||||||||||||||||
| | |
Gross
Unrealized Losses |
| |
Fair
Value |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
At December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | |
CMO
|
| | | $ | — | | | | | | — | | | | | | (7) | | | | | | 249 | | |
Municipal securities
|
| | | | (7) | | | | | | 889 | | | | | | — | | | | | | — | | |
| | | | $ | (7) | | | | | | 889 | | | | | | (7) | | | | | | 249 | | |
At December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA pool
|
| | | | — | | | | | | — | | | | | | (7) | | | | | | 464 | | |
CMO
|
| | | | — | | | | | | — | | | | | | (23) | | | | | | 278 | | |
Municipal securities
|
| | | | (4) | | | | | | 923 | | | | | | (38) | | | | | | 2,650 | | |
Mutual fund
|
| | | | (132) | | | | | | 5,868 | | | | | | — | | | | | | — | | |
| | | | $ | (136) | | | | | | 6,791 | | | | | | (68) | | | | | | 3,392 | | |
|
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Due less than one year
|
| | | $ | 1,383 | | | | | | 1,387 | | |
Due after one and before five years
|
| | | | 1,674 | | | | | | 1,675 | | |
Due after five and before ten years
|
| | | | 507 | | | | | | 510 | | |
Due after ten years
|
| | | | 1,652 | | | | | | 1,697 | | |
| | | | $ | 5,216 | | | | | | 5,269 | | |
| | |
At December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Real estate mortgage: | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 148,350 | | | | | | 131,736 | | |
Residential real estate
|
| | | | 23,012 | | | | | | 19,913 | | |
Construction, land development and land
|
| | | | 12,687 | | | | | | 9,258 | | |
Total real estate mortgage
|
| | | | 184,049 | | | | | | 160,907 | | |
Commercial
|
| | | | 62,921 | | | | | | 43,334 | | |
Consumer and other
|
| | | | 19,982 | | | | | | 23,439 | | |
Total loans
|
| | | | 266,952 | | | | | | 227,680 | | |
Decrease: | | | | | | | | | | | | | |
Net deferred loan costs
|
| | | | (279) | | | | | | (139) | | |
Allowance for loan losses
|
| | | | (2,974) | | | | | | (2,724) | | |
Discount on loans
|
| | | | (889) | | | | | | (305) | | |
Loans in process
|
| | | | — | | | | | | (6) | | |
Loans, net
|
| | | $ | 262,810 | | | | | | 224,506 | | |
| | |
Real
Estate Mortgage |
| |
Commercial
|
| |
Consumer
and Other |
| |
Unallocated
|
| |
Total
|
| |||||||||||||||
Year Ended December 31, 2019: | | | | | | | |||||||||||||||||||||||||
Beginning balance
|
| | | $ | 1,474 | | | | | | 470 | | | | | | 172 | | | | | | 608 | | | | | | 2,724 | | |
Provision (credit) for loan losses
|
| | | | 267 | | | | | | 248 | | | | | | (63) | | | | | | (211) | | | | | | 241 | | |
Charge-offs, net of recoveries
|
| | | | (25) | | | | | | — | | | | | | 34 | | | | | | — | | | | | | 9 | | |
Ending balance
|
| | | $ | 1,716 | | | | | | 718 | | | | | | 143 | | | | | | 397 | | | | | | 2,974 | | |
Individually evaluated for impairment:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded investment
|
| | | $ | 973 | | | | | | — | | | | | | — | | | | | | — | | | | | | 973 | | |
Balance in allowance for loan losses
|
| | | $ | 5 | | | | | | — | | | | | | — | | | | | | — | | | | | | 5 | | |
Collectively evaluated for impairment:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded investment
|
| | | $ | 183,076 | | | | | | 62,921 | | | | | | 19,982 | | | | | | — | | | | | | 265,979 | | |
Balance in allowance for loan losses
|
| | | $ | 1,711 | | | | | | 718 | | | | | | 143 | | | | | | 397 | | | | | | 2,969 | | |
Year Ended December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | | 1,229 | | | | | | 421 | | | | | | 158 | | | | | | 485 | | | | | | 2,293 | | |
Provision (credit) for loan losses
|
| | | | 245 | | | | | | 49 | | | | | | (6) | | | | | | 123 | | | | | | 411 | | |
Charge-offs, net of recoveries
|
| | | | — | | | | | | — | | | | | | 20 | | | | | | — | | | | | | 20 | | |
Ending balance
|
| | | $ | 1,474 | | | | | | 470 | | | | | | 172 | | | | | | 608 | | | | | | 2,724 | | |
Individually evaluated for impairment:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded investment
|
| | | $ | 397 | | | | | | — | | | | | | — | | | | | | — | | | | | | 397 | | |
Balance in allowance for loan losses
|
| | | $ | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | |
Collectively evaluated for impairment:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded investment
|
| | | $ | 160,510 | | | | | | 43,334 | | | | | | 23,439 | | | | | | — | | | | | | 227,283 | | |
Balance in allowance for loan losses
|
| | | $ | 1,473 | | | | | | 470 | | | | | | 172 | | | | | | 608 | | | | | | 2,723 | | |
| | |
Real Estate Mortgage
|
| | | | ||||||||||||||||||||||||||||||
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Construction,
Land Development and Land |
| |
Commercial
|
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
Credit Risk Profile by Internally Assigned Grade:
At December 31, 2019: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grade:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pass
|
| | | $ | 145,471 | | | | | | 22,105 | | | | | | 12,687 | | | | | | 56,877 | | | | | | 19,841 | | | | | | 256,981 | | |
Special mention
|
| | | | 248 | | | | | | 907 | | | | | | — | | | | | | 4,653 | | | | | | 42 | | | | | | 5,850 | | |
Substandard
|
| | | | 2,631 | | | | | | — | | | | | | — | | | | | | 1,391 | | | | | | 99 | | | | | | 4,121 | | |
Doubtful
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 148,350 | | | | | | 23,012 | | | | | | 12,687 | | | | | | 62,921 | | | | | | 19,982 | | | | | | 266,952 | | |
At December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grade:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pass
|
| | | | 129,183 | | | | | | 18,883 | | | | | | 9,258 | | | | | | 37,134 | | | | | | 23,418 | | | | | | 217,876 | | |
Special mention
|
| | | | 1,857 | | | | | | 561 | | | | | | — | | | | | | 6,180 | | | | | | 21 | | | | | | 8,619 | | |
Substandard
|
| | | | 696 | | | | | | 469 | | | | | | — | | | | | | 20 | | | | | | — | | | | | | 1,185 | | |
Doubtful
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 131,736 | | | | | | 19,913 | | | | | | 9,258 | | | | | | 43,334 | | | | | | 23,439 | | | | | | 227,680 | | |
| | |
Accruing Loans
|
| | | |||||||||||||||||||||||||||||||||||||
| | |
30 – 59
Days Past Due |
| |
60 – 89
Days Past Due |
| |
90 Days
or Greater Past Due |
| |
Total
Past Due |
| |
Current
|
| |
Nonaccrual
Loans |
| |
Total
Loans |
| |||||||||||||||||||||
At December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage loans:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 148,350 | | | | | | — | | | | | | 148,350 | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,220 | | | | | | 792 | | | | | | 23,012 | | |
Construction, land development
and land |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,687 | | | | | | — | | | | | | 12,687 | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 62,921 | | | | | | — | | | | | | 62,921 | | |
Consumer and other
|
| | | | 39 | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,943 | | | | | | — | | | | | | 19,982 | | |
Total
|
| | | $ | 39 | | | | | | — | | | | | | — | | | | | | — | | | | | | 266,121 | | | | | | 792 | | | | | | 266,952 | | |
At December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage loans:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | | — | | | | | | 804 | | | | | | — | | | | | | 804 | | | | | | 130,932 | | | | | | — | | | | | | 131,736 | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | 88 | | | | | | 88 | | | | | | 19,825 | | | | | | — | | | | | | 19,913 | | |
Construction, land development
and land |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,258 | | | | | | — | | | | | | 9,258 | | |
Commercial
|
| | | | 20 | | | | | | — | | | | | | — | | | | | | 20 | | | | | | 43,314 | | | | | | — | | | | | | 43,334 | | |
Consumer and other
|
| | | | — | | | | | | 21 | | | | | | — | | | | | | 21 | | | | | | 23,418 | | | | | | — | | | | | | 23,439 | | |
Total
|
| | | $ | 20 | | | | | | 825 | | | | | | 88 | | | | | | 933 | | | | | | 226,747 | | | | | | — | | | | | | 227,680 | | |
| | |
With No Related
Allowance Recorded |
| |
With an Allowance
Recorded |
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||
| | |
Recorded
Investment |
| |
Unpaid
Contractual Principal Balance |
| |
Recorded
Investment |
| |
Unpaid
Contractual Principal Balance |
| |
Related
Allowance |
| |
Recorded
Investment |
| |
Unpaid
Contractual Principal Balance |
| |
Related
Allowance |
| ||||||||||||||||||||||||
December 31, 2019: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Real estate mortgage:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | $ | 960 | | | | | | 960 | | | | | | — | | | | | | — | | | | | | — | | | | | | 960 | | | | | | 960 | | | | | | — | | |
Construction, land development and
land |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13 | | | | | | 13 | | | | | | — | | |
| | | | $ | 960 | | | | | | 960 | | | | | | — | | | | | | — | | | | | | — | | | | | | 973 | | | | | | 973 | | | | | | — | | |
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | | 371 | | | | | | 371 | | | | | | — | | | | | | — | | | | | | — | | | | | | 371 | | | | | | 371 | | | | | | — | | |
Construction, land development and
land |
| | | | — | | | | | | — | | | | | | 26 | | | | | | 26 | | | | | | 1 | | | | | | 26 | | | | | | 26 | | | | | | 1 | | |
| | | | $ | 371 | | | | | | 371 | | | | | | 26 | | | | | | 26 | | | | | | 1 | | | | | | 397 | | | | | | 397 | | | | | | 1 | | |
| | |
Average
Recorded Investment |
| |
Interest
Income Recognized |
| |
Interest
Income Received |
| |||||||||
Year Ended December 31, 2019: | | | | | |||||||||||||||
Real estate mortgage:
|
| | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | $ | 1,037 | | | | | | 70 | | | | | | 70 | | |
Construction, land development and land
|
| | | | 19 | | | | | | 1 | | | | | | 1 | | |
| | | | $ | 1,056 | | | | | | 71 | | | | | | 71 | | |
Year Ended December 31, 2018: | | | | | |||||||||||||||
Real estate mortgage:
|
| | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | | 404 | | | | | | 19 | | | | | | 19 | | |
Construction, land development and land
|
| | | | 31 | | | | | | 2 | | | | | | 2 | | |
| | | | $ | 435 | | | | | | 21 | | | | | | 21 | | |
| | |
At December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Land
|
| | | $ | 4,030 | | | | | | 4,030 | | |
Building and improvements
|
| | | | 6,904 | | | | | | 6,881 | | |
Furniture and fixtures
|
| | | | 573 | | | | | | 566 | | |
Computer equipment and software
|
| | | | 1,028 | | | | | | 924 | | |
Total, at cost
|
| | | | 12,535 | | | | | | 12,401 | | |
Less accumulated depreciation and amortization
|
| | | | (3,059) | | | | | | (2,751) | | |
Premises and equipment, net
|
| | | $ | 9,476 | | | | | | 9,650 | | |
Year Ending December 31,
|
| |
Amount
|
| |||
2020
|
| | | $ | 57,060 | | |
2021
|
| | | | 14,654 | | |
2022
|
| | | | 3,255 | | |
2023
|
| | | | 355 | | |
2024
|
| | | | 976 | | |
| | | | $ | 76,300 | | |
Maturing During the Year Ending December 31,
|
| |
Interest
Rate |
| |
2019
|
| |
At December 31,
2018 |
| |||||||||
2019
|
| | | | 2.65% | | | | | $ | — | | | | | | 5,000 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Current: | | | | | | | | | | | | | |
Federal
|
| | | $ | 1,216 | | | | | | 766 | | |
State
|
| | | | 275 | | | | | | 215 | | |
Total current
|
| | | | 1,491 | | | | | | 981 | | |
Deferred:
Federal |
| | | | (57) | | | | | | (35) | | |
State
|
| | | | (17) | | | | | | (8) | | |
Total deferred
|
| | | | (74) | | | | | | (43) | | |
Total income taxes
|
| | | $ | 1,417 | | | | | | 938 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||
| | |
Amount
|
| |
% of
Pretax Earnings |
| |
Amount
|
| |
% of
Pretax Income |
| ||||||||||||
Income taxes at statutory rate
|
| | | $ | 1,225 | | | | | | 21.0% | | | | | $ | 799 | | | | | | 21.0% | | |
Increase (decrease) resulting from: | | | | | | | | | | | | | | | | | | | | | | | | | |
State taxes, net of Federal tax benefit
|
| | | | 183 | | | | | | 3.1 | | | | | | 137 | | | | | | 3.6 | | |
Bank-owned life insurance
|
| | | | (10) | | | | | | (0.2) | | | | | | (11) | | | | | | (0.3) | | |
Tax exempt income
|
| | | | (31) | | | | | | (0.5) | | | | | | (32) | | | | | | (0.8) | | |
Other
|
| | | | 50 | | | | | | 0.9 | | | | | | 45 | | | | | | 1.2 | | |
| | | | $ | 1,417 | | | | | | 24.3% | | | | | $ | 938 | | | | | | 24.7% | | |
|
| | |
At December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Allowance for loan losses
|
| | | $ | 754 | | | | | | 690 | | |
Preopening costs
|
| | | | 5 | | | | | | 5 | | |
Stock-based compensation
|
| | | | 30 | | | | | | 27 | | |
Deferred compensation
|
| | | | 57 | | | | | | 32 | | |
Unrealized loss on securities available for sale
|
| | | | — | | | | | | 47 | | |
Other
|
| | | | 1 | | | | | | 17 | | |
Deferred tax assets
|
| | | | 847 | | | | | | 818 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Accrual to cash conversion
|
| | | | (28) | | | | | | (33) | | |
Deferred loan costs
|
| | | | (93) | | | | | | (87) | | |
Premises and equipment
|
| | | | (196) | | | | | | (195) | | |
Unrealized gain on securities available for sale
|
| | | | (67) | | | | | | — | | |
Deferred tax liabilities
|
| | | | (384) | | | | | | (315) | | |
Net deferred tax asset
|
| | | $ | 463 | | | | | | 503 | | |
| | |
Contract
Amount |
| |||
Unused lines of credit
|
| | | $ | 69,629 | | |
Standby letters of credit
|
| | | $ | 531 | | |
| | |
Number of
Options |
| |
Weighted-
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| ||||||
Outstanding at December 31, 2017
|
| | | | 328,000 | | | | | $ | 1.39 | | | | | |
Granted
|
| | | | 172,500 | | | | | | 1.77 | | | | | |
Forfeited
|
| | | | (28,000) | | | | | | 1.50 | | | | | |
Outstanding at December 31, 2018
|
| | | | 472,500 | | | | | | 1.52 | | | | | |
Granted
|
| | | | 132,000 | | | | | | 1.97 | | | | | |
Outstanding at December 31, 2019
|
| | | | 604,500 | | | | | $ | 1.63 | | | |
7.03 years
|
|
Exercisable at December 31, 2019
|
| | | | 228,500 | | | | | $ | 1.41 | | | |
5.50 years
|
|
| | |
2019
|
| |
2018
|
| ||||||
Risk-free interest rate
|
| | | | 2.26% | | | | | | 3.01% | | |
Expected dividend yield
|
| | | | —% | | | | | | —% | | |
Expected stock volatility
|
| | | | 11.04% | | | | | | 12.4% | | |
Expected life in years
|
| | | | 6.5 | | | | | | 6.5 | | |
Per share grant-date fair value of options issued during the year
|
| | | $ | 0.37 | | | | | | 0.39 | | |
| | |
At December 31, 2019
|
| |
At December 31, 2018
|
| ||||||||||||||||||
| | |
Carrying
Amount |
| |
Fair
Value |
| |
Carrying
Amount |
| |
Fair
Value |
| ||||||||||||
Financial assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 54,629 | | | | | | 54,629 | | | | | | 27,698 | | | | | | 27,698 | | |
Securities
|
| | | | 10,516 | | | | | | 10,516 | | | | | | 11,204 | | | | | | 11,204 | | |
Loans
|
| | | | 262,810 | | | | | | 269,648 | | | | | | 224,506 | | | | | | 223,561 | | |
Federal Home Loan Bank stock
|
| | | | 244 | | | | | | 244 | | | | | | 432 | | | | | | 432 | | |
Accrued interest receivable
|
| | | | 856 | | | | | | 856 | | | | | | 721 | | | | | | 721 | | |
Financial liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits
|
| | | | 308,085 | | | | | | 302,513 | | | | | | 239,141 | | | | | | 237,788 | | |
Convertible subordinated debentures
|
| | | | 9,971 | | | | | | 9,971 | | | | | | 9,967 | | | | | | 9,967 | | |
Federal Home Loan Bank advances
|
| | | | — | | | | | | — | | | | | | 5,000 | | | | | | 5,000 | | |
Off-balance sheet financial instruments
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | |
Fair Value
|
| |
Quoted Prices
In Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | $ | 1 | | | | | | — | | | | | | 1 | | | | | | — | | |
SBA pool
|
| | | | 406 | | | | | | — | | | | | | 406 | | | | | | — | | |
CMO
|
| | | | 249 | | | | | | — | | | | | | 249 | | | | | | — | | |
Mutual funds
|
| | | | 5,247 | | | | | | — | | | | | | 5,247 | | | | | | — | | |
Municipal securities
|
| | | | 4,613 | | | | | | — | | | | | | 4,613 | | | | | | — | | |
| | | | $ | 10,516 | | | | | | — | | | | | | 10,516 | | | | | | — | | |
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | | 19 | | | | | | — | | | | | | 19 | | | | | | — | | |
SBA pool
|
| | | | 464 | | | | | | — | | | | | | 464 | | | | | | — | | |
CMO
|
| | | | 278 | | | | | | — | | | | | | 278 | | | | | | — | | |
Mutual funds
|
| | | | 5,868 | | | | | | — | | | | | | 5,868 | | | | | | — | | |
Municipal securities
|
| | | | 4,575 | | | | | | — | | | | | | 4,575 | | | | | | — | | |
| | | | $ | 11,204 | | | | | | — | | | | | | 11,204 | | | | | | — | | |
| | |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total Losses
|
| | | |||||||||||||||||||
At December 31, 2019- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | $ | 204 | | | | | | — | | | | | | — | | | | | | 204 | | | | | | — | | | | | | — | | |
At December 31, 2018- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | $ | 371 | | | | | | — | | | | | | — | | | | | | 371 | | | | | | — | | | | | | — | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Loans: | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 6,071 | | | | | | 5,971 | | |
Additions
|
| | | | 1,583 | | | | | | 514 | | |
Repayments
|
| | | | (1,070) | | | | | | (414) | | |
Ending balance
|
| | | $ | 6,584 | | | | | | 6,071 | | |
Deposits at end of year
|
| | | $ | 11,524 | | | | | | 16,828 | | |
| | |
Actual
|
| |
For Capital
Adequacy Purposes |
| |
For Well
Capitalized Purposes |
| |||||||||||||||||||||||||||
| | |
Amount
|
| |
%
|
| |
Amount
|
| |
%
|
| |
Amount
|
| |
%
|
| ||||||||||||||||||
As of December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio
|
| | | $ | 29,195 | | | | | | 9.79% | | | | | $ | 13,416 | | | | | | 4.50% | | | | | $ | 19,378 | | | | | | 6.50% | | |
Tier 1 capital ratio
|
| | | | 29,195 | | | | | | 9.79 | | | | | | 17,888 | | | | | | 6.00 | | | | | | 23,850 | | | | | | 8.00 | | |
Total capital ratio
|
| | | | 32,169 | | | | | | 10.79 | | | | | | 23,850 | | | | | | 8.00 | | | | | | 29,813 | | | | | | 10.00 | | |
Tier 1 leverage ratio
|
| | | | 29,195 | | | | | | 8.90 | | | | | | 13,120 | | | | | | 4.00 | | | | | | 16,400 | | | | | | 5.00 | | |
As of December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio
|
| | | | 24,684 | | | | | | 10.07 | | | | | | 11,025 | | | | | | 4.50 | | | | | | 15,925 | | | | | | 6.50 | | |
Tier 1 capital ratio
|
| | | | 24,684 | | | | | | 10.07 | | | | | | 14,700 | | | | | | 6.00 | | | | | | 19,600 | | | | | | 8.00 | | |
Total capital ratio
|
| | | | 27,408 | | | | | | 11.19 | | | | | | 19,600 | | | | | | 8.00 | | | | | | 24,500 | | | | | | 10.00 | | |
Tier 1 leverage ratio
|
| | | | 24,684 | | | | | | 8.87 | | | | | | 11,131 | | | | | | 4.00 | | | | | | 13,914 | | | | | | 5.00 | | |
| | |
At December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Assets
|
| | | ||||||||||
Cash
|
| | | $ | 271 | | | | | | 1,275 | | |
Securities available for sale
|
| | | | 5,247 | | | | | | 5,868 | | |
Investment in bank subsidiary
|
| | | | 29,234 | | | | | | 24,642 | | |
Investment nonbank subsidiary
|
| | | | 667 | | | | | | 14 | | |
Loans
|
| | | | 1,322 | | | | | | — | | |
Other assets
|
| | | | 88 | | | | | | 153 | | |
Total assets
|
| | | $ | 36,829 | | | | | | 31,952 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Subordinated debentures, net of issuance cost
|
| | | | 9,971 | | | | | | 9,967 | | |
Accrued interest payable
|
| | | | 125 | | | | | | 118 | | |
Total liabilities
|
| | | | 10,096 | | | | | | 10,085 | | |
Total stockholders’ equity
|
| | | | 26,733 | | | | | | 21,867 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 36,829 | | | | | | 31,952 | | |
|
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Revenues
|
| | | $ | 482 | | | | | | 333 | | |
Expenses
|
| | | | (552) | | | | | | (529) | | |
Earnings before subsidiaries
|
| | | | (70) | | | | | | (196) | | |
Earnings of bank subsidiary
|
| | | | 4,474 | | | | | | 3,017 | | |
Loss from nonbank subsidiary
|
| | | | (3) | | | | | | (8) | | |
Earnings before income taxes
|
| | | | 4,401 | | | | | | 2,813 | | |
Income tax benefit
|
| | | | 18 | | | | | | 52 | | |
Net earnings
|
| | | $ | 4,419 | | | | | | 2,865 | | |
| | |
At March 31, 2020
|
| |||
Assets | | | | | | | |
Cash and due from banks
|
| | | $ | 4,191 | | |
Interest-bearing deposits
|
| | | | 59,190 | | |
Total cash and cash equivalents
|
| | | | 63,381 | | |
Securities
|
| | | | 5,157 | | |
Loans held for sale
|
| | | | — | | |
Loans, net of allowance for loan losses of $3,049
|
| | | | 257,767 | | |
Federal Home Loan Bank stock, at cost
|
| | | | 305 | | |
Premises and equipment, net
|
| | | | 9,396 | | |
Accrued interest receivable
|
| | | | 794 | | |
Deferred tax asset
|
| | | | 803 | | |
Bank-owned life insurance
|
| | | | 2,019 | | |
Other assets
|
| | | | 1,268 | | |
Total assets
|
| | | $ | 340,890 | | |
Liabilities and Stockholders’ Equity | | | | | | | |
Liabilities: | | | | | | | |
Noninterest-bearing demand deposits
|
| | | | 110,623 | | |
Savings, NOW and money-market deposits
|
| | | | 120,431 | | |
Time deposits
|
| | | | 70,833 | | |
Total deposits
|
| | | | 301,887 | | |
Convertible subordinated debentures, net of issuance cost
|
| | | | 9,972 | | |
Federal Home Loan Bank advance
|
| | | | — | | |
Other liabilities
|
| | | | 1,577 | | |
Total liabilities
|
| | | | 313,436 | | |
Stockholders’ equity: | | | | | | | |
Preferred stock, $1 par, 5,000,000 shares authorized, none outstanding
|
| | | | — | | |
Common stock, $1 par; 20,000,000 shares authorized,
|
| | | | | | |
11,219,850 shares issued and outstanding
|
| | | | 11,220 | | |
Additional paid-in capital
|
| | | | 14,293 | | |
Retained earnings
|
| | | | 1,926 | | |
Accumulated other comprehensive income
|
| | | | 15 | | |
Total stockholders’ equity
|
| | | | 27,454 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 340,890 | | |
| | |
3 Months Ended
March 31, 2020 |
| |||
Interest income: | | | | | | | |
Loans
|
| | | $ | 3,726 | | |
Securities
|
| | | | 77 | | |
Other
|
| | | | 123 | | |
Total interest income
|
| | | | 3,926 | | |
Interest expense: | | | | | | | |
Deposits
|
| | | | 641 | | |
Borrowings
|
| | | | 115 | | |
Total interest expense
|
| | | | 756 | | |
Net interest income
|
| | | | 3,170 | | |
Provision for loan losses
|
| | | | 75 | | |
Net interest income after provision for loan losses
|
| | | | 3,095 | | |
Noninterest income: | | | | | | | |
Gain on sale of loans
|
| | | | 946 | | |
Service charges on deposit accounts
|
| | | | 71 | | |
Income earned on bank-owned life insurance
|
| | | | 12 | | |
Loss on sale of securities
|
| | | | (405) | | |
Other
|
| | | | 266 | | |
Total noninterest income
|
| | | | 890 | | |
Noninterest expenses: | | | | | | | |
Salaries and employee benefits
|
| | | | 1,773 | | |
Occupancy and equipment
|
| | | | 152 | | |
Data processing
|
| | | | 139 | | |
Professional fees
|
| | | | 567 | | |
Federal Deposit Insurance and state assessments
|
| | | | 50 | | |
Other
|
| | | | 131 | | |
Total noninterest expenses
|
| | | | 2,812 | | |
Earnings before income taxes
|
| | | | 1,173 | | |
Income taxes
|
| | | | 281 | | |
Net Earnings
|
| | | $ | 892 | | |
| Cash flows from operating activities: | | | | | | | |
|
Net earnings
|
| | | $ | 892 | | |
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
| | | | | | |
|
Depreciation and amortization
|
| | | | 80 | | |
|
Provision for loan loss
|
| | | | 75 | | |
|
Deferred income tax benefit
|
| | | | (278) | | |
|
Stock compensation expense
|
| | | | 10 | | |
|
Income from bank-owned life insurance, net
|
| | | | (12) | | |
|
Net amortization of premiums and discounts on securities
|
| | | | 11 | | |
|
Net amortization of deferred loan fees and costs
|
| | | | (61) | | |
|
Origination of loans held for sale
|
| | | | (4,270) | | |
|
Proceeds from sale of loans held for sale
|
| | | | 9,335 | | |
|
Gain on sale of loans
|
| | | | (1,088) | | |
|
Loss on sale of securities
|
| | | | 405 | | |
|
Net decrease in accrued interest receivable
|
| | | | 62 | | |
|
Net decrease in other assets
|
| | | | 140 | | |
|
Net decrease in other liabilities
|
| | | | (19) | | |
|
Amortization of long-term debt issuance cost
|
| | | | 1 | | |
|
Net cash provided by operating activities
|
| | | | 5,283 | | |
| Cash flows from investing activities: | | | | | | | |
|
Proceeds from sale of securities
|
| | | | 4,632 | | |
|
Principal repayments of securities
|
| | | | 68 | | |
|
Net decrease in loans
|
| | | | 5,029 | | |
|
Purchase of premises and equipment, net
|
| | | | (61) | | |
|
Net cash provided by investing activities
|
| | | | 9,668 | | |
| Cash flows from financing activity: | | | | | | | |
|
Net decrease in deposits
|
| | | | (6,199) | | |
|
Net increase in cash and cash equivalents
|
| | | | 8,752 | | |
|
Cash and cash equivalents at beginning of period
|
| | | | 54,629 | | |
|
Cash and cash equivalents at end of period
|
| | | $ | 63,381 | | |
| Supplemental disclosure of cash flow information: | | | | | | | |
|
Cash paid during the year for interest
|
| | | $ | 653 | | |
|
Noncash transaction
|
| | | | | | |
|
Accumulated other comprehensive income, net change in unrealized loss on debt securities
|
| | | $ | (181) | | |
1 Year Seacoast Banking Corpora... Chart |
1 Month Seacoast Banking Corpora... Chart |
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