South Florida Housing Has Bottomed: Bank CEO

STUART, Fla. (TheStreet) -- Seacoast Banking Corp. (SBCF) of Stuart, Fla., has turned the corner, and CEO Dennis Hudson III says that "residential real estate is truly stabilizing" in the bank's market area.

Over the past five years, Seacoast has seen most of its major competitors -- big and small -- disappear, either through failure, merger or forced sale to a competitor.

Seacoast Banking Corp. CEO Dennis S. Hudson III

Hudson says that "the most important job for a CEO is to help an organization face reality, and that in 2007, "staying forward-focused allowed us to have the vision that [the real estate collapse] was bigger than we ever imagined." The bank "developed processes to quantify what we were dealing with, and the confidence to go out into the market and raise capital."

Seacoast completed several capital raises during 2009 and 2010. The company owes the government $50 million in bailout funds received through the Troubled Assets Relief Program, or TARP. Seacoast returned to operating profitability during the first quarter, although the company still posted a net loss to common shareholders after factoring dividends on preferred shares owned by the government. During the second quarter, the company reported a $176,000 profit to common shareholders.

On Aug. 17, Seacoast announced that it was current on all dividend payments to the U.S. Treasury on government-owned preferred shares and had notified trustees for its trust-preferred securities that all accrued and unpaid dividends on those securities would be made current in September.

The company reported its nonperforming loans had fallen for seven straight quarters, through June 30. At the end of the second quarter, nonperforming assets made up 3.46% of total assets, improving from 5.25% a year earlier. The company's tangible common equity ratio -- which excludes certain intangible assets, such as deferred tax assets -- was 5.84% as of June 30, was up from 5.60% the previous quarter, but down from 6.60% a year earlier. Seacoast said when it announced its second-quarter results that "a future recapture of the deferred tax asset valuation allowance would add (proforma) approximately 200 basis points to the TCE ratio."

The company had $2.1 billion in total assets as of June 30.

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