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10 Community Bank Takeover Targets

9. Seacoast Banking Corp. of Florida

Company Profile

Shares of Seacoast Banking Corp of Florida (SBCF) of Stuart closed at $1.66 Monday, down 6% over the previous year. The company was also listed as a possible target by Brett Scheiner.

Income Statement

Seacoast reported a fourth-quarter net loss to common shareholders of $11.1 million, or 12 cents a share, which was higher than the third-quarter loss of $8.6 million, or 9 cents a share, but sharply down from the fourth quarter of 2009, when the loss to common shareholders was $39.1 million, or 73 cents a share.

Earnings available to common shareholders exclude dividends paid on the $50 million in preferred shares held by the government for bailout assistance received in December 2008.

The company's provision for loan losses continued to decline, to $4 million in the fourth quarter, from $8.9 million the previous quarter and $41.5 million during the fourth quarter of 2009. The decline in linked-quarter earnings reflected an increase in losses on repossessed real estate, which totaled $8.8 million in the fourth quarter, compared to $859 thousand the previous quarter and $2.1 million a year earlier.

The fourth-quarter net interest margin was 3.42%, increasing from 3.35% a year earlier.

CEO Dennis Hudson said the company was "encouraged by the improvement in our operating results, driven by several of our business lines," and also said he expected Seacoast to return to profitability during 2011.

Balance Sheet

Total assets were $2 billion as of December 31 and nonperforming assets - including nonaccrual loans and repossessed assets and excluding performing restructured loans - totaled $94 million, or 4.66% of total assets, improving from 5.06% the previous quarter and 5.73% a year earlier.

The net charge-off ratio for the fourth quarter was 1.47% and loan loss reserves covered 3.04% of total loans as of December 31.

Seacoast's regulatory total risk-based capital ratio was a strong 17.8% as of December 31. The company raised $50 million in common equity during the second quarter. The tangible common equity ratio was 5.81% as of December 31 and was up from 4.79% a year earlier, but was still a relatively low level, considering the continued losses and eventual need to repay Troubled Asset Relief Program.

Stock Ratios

The shares trade at about tangible book value, which Seacoast said was $1.75 a share as of December 31. The forward price-to-earnings ratio is 24, based on the consensus 2012 earnings estimate of 7 cents a share, among analysts polled by Thomson Reuters.

Analyst Ratings

All 10 analysts covering Seacoast Banking Corp. of Florida have neutral ratings on the shares. The company has been a survivor on Florida's Treasure Coast, having successfully raised the capital it needed to weather the credit storm. In October, Christopher Marinac of FIG Partners said in a report that "investors in SBCF must remain patient for near-term upside," and placed a "franchise Value for SBCF of around $1.95 per share."

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