Seacoast Banking Corp. of Florida (NASDAQ:SBCF) Q3 2018 Earnings Conference Call Transcript

Oct 26, 2018 • 10:00 am ET


Seacoast Banking Corp. of Florida (NASDAQ:SBCF) Q3 2018 Earnings Conference Call Transcript


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Welcome to the Seacoast Third Quarter Earnings Conference Call. My name is John, and I will be your operator for today's call. At this time all participants are in listen only mode. Later we will conduct a question and answer session.

(Operator Instructions).

(Forward-looking Cautionary Statements) Please note that this conference is being recorded.

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

Dennis Hudson

Thank you, John, and good morning, everybody, and thank you for joining us today on our call. Our press release, which was released yesterday after the market closed and our investor presentation, can be found at the Investor portion of our website under the title Presentations. With us today is Chuck Shaffer, our CFO, who will discuss our financial and operating results. Also with us today is Julie Kleffel, our Community Banking executive; Chuck Cross, our Commercial Banking executive; David Houdeshell, our Chief Risk Officer; and Jeff Lee, our Chief Marketing Officer.

I am going to open the call today by discussing Seacoast's business model and then reviewing our third quarter results. This quarter's operating results and financial performance show the continuing strong fundamentals that underline Seacoast's balanced growth strategy.

Last year at Investor Day, we took a deep dive into our strategy, which has produced a very granular, diverse loan book that continues to absolutely avoid any CRE concentrations. Our customer focused balanced growth strategy has been the foundation upon which we build strong operating results.

Our strategy requires us to build diverse customer relationships, and as we've discussed many times, we've developed a data and analytics competency that drives our execution of the strategy. We're proud of the balanced growth that we produced. And one of the real payoffs, particularly in the rate environment we now see, is the impact that our strategy is having on our funding. This was very evident this quarter as we continue to grow low-cost deposits.

Our non-interest-bearing deposits were up 8% year-over-year. Our cost of deposits increased only four basis points from the prior quarter and remained a very low 43 basis points, while our average rate on new loans added for the quarter increased 16 basis points to 5.12%.

This quarter we also saw our best-ever growth in consumer and small business loans, and our prospecting platforms are driving solid growth for our commercial loans. These very strong metrics result from our unwavering execution of the strategy we shared with you at that Investor Day.

As we move forward into the higher rate environment we see ahead, we expect to see further improvements. Our analytics platforms will continue to help us achieve better pricing and pick up share in small business and consumer. We'll continue to maintain limited exposure to the CRE segment, and our improved add-on yields will be helped by our intentional mix change favoring consumer, small business and commercial lending. Chuck is going to talk with us a little more about that