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10 Community Bank M&A Targets, Revisited


9. Seacoast Banking Corp. of Florida

Shares of Seacoast Banking Corp of Florida (SBCF) of Stuart closed at $1.44 Wednesday, declining 1% year-to-date.

The company was also listed in January as a possible target by Brett Scheiner.

Seacoast owes $50 million in government bailout funds received through the Troubled Assets Relief Program, or TARP, and is now current on all dividend payments on government-owned preferred shares. The company in August notified trustees for its trust-preferred securities that all accrued and unpaid dividends on those securities would be made current in September.

Seacoast returned to operating profitability during the first quarter and reported second-quarter net income to common shareholders of $176,000 to common shareholders. In a recent interview with TheStreet, CEO Dennis S. Hudson III was upbeat about the bank's improving market share, adding that in Seacoast's home market in Southeast Florida, he was seeing "solid floor established in Florida for most real estate product."

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."

Seacoast's shares are trading for 1.1 times tangible book value, according to SNL Financial.

Scheiner says that based on Hudson's upbeat comments, Seacoast now seems likely "to go it alone and improve the operating profile of the bank," which will benefit shareholders whether or not the company eventually decides to sell.

All 10 analysts covering Seacoast Banking Corp. of Florida have neutral ratings on the shares.

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