Seacoast National Bank Press Releases

For more information contact:

Dennis S. Hudson, III
Chairman &
Chief Executive Officer
Seacoast Banking Corporation of Florida
(772) 288-6086

NASDAQ-NMS:

SBCF

William R. Hahl
Executive Vice President/
Chief Financial Officer
Seacoast Banking Corporation of Florida
(772) 221-2825

Release Date:July 24, 2008

FOR IMMEDIATE RELEASE

SEACOAST REPORTS STRONG CAPITAL POSITION AND SECOND QUARTER RESULTS

Click here to view financial statement

STUART, FL., July 24, 2008 ¿ Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF) (the ¿Company¿) today reported that the Company¿s net loss for the quarter ended June 30, 2008 totaled $21.3 million, or $1.12 per share, compared with net income of $4,808,000 or $0.25 per diluted share one year earlier. The total loss for the first six months of 2008 totals $19.6 million or $1.03 per share, compared with net income of $7,577,000 or $0.39 in the first six months of 2007.

The Company¿s capital position remains strong with a total risk-based capital ratio of approximately 11.52 percent at June 30, 2008. This ratio is expected to increase due to an anticipated decline in risk-based asset levels in 2008, as a result of previously discussed declines in anticipated new loan production.

Earnings for the quarter were impacted by higher credit costs as the Company substantially reduced the carrying value of certain residential development and land loans and significantly increased its reserve for loan losses. In light of current conditions, asset quality remains strong in the Company¿s other loan portfolios. The significant actions taken at quarter end will strengthen the Company¿s ability to reduce the level of non performing assets in the future. Earnings are expected to return to profitability in the coming quarter and for the second half of the year.

In recent years, the Company raised an aggregate of $52 million in new capital through three offerings of trust preferred securities, including one which was completed in mid 2007. This new capital was raised at favorable rates and the proceeds were contributed to the Company¿s banking subsidiary, Seacoast National Bank, which continues to maintain strong capital levels. Although there is presently no plan to raise additional capital, the Company filed a shelf registration statement during this quarter relating to a variety of debt and equity instruments to provide future flexibility in raising capital in order to take advantage of opportunities that become available or should the need arise.

Liquidity remains strong with a total of $480 million in funding available from a variety of sources at quarter end. The Company does not rely on wholesale funding and maintains a diverse retail deposit base in its markets. The Company¿s deposit base comprises 90% of total funding sources for the Company.

¿While there was a significant improvement during the quarter in the volume of residential real estate transactions in our markets, which is encouraging, much of the improvement came from distress sales which continue to weigh on valuations. We believe these recent transactions may have negatively impacted values associated with land parcels that secure many of our non-performing assets which are now moving closer to liquidation. As a result we substantially reduced the carrying value of a number of larger residential land exposures including several that were added as nonperforming assets at quarter-end. Furthermore, we significantly increased our reserve for loan losses as a result of the weaker market conditions,¿ said Dennis S. Hudson, III, Chairman and Chief Executive Officer. ¿We were among the first to recognize the housing deterioration in Florida that began in mid 2006 with an initial reserve build that occurred in the final quarter of that year. Since that time, we have committed significant resources to aggressively manage and quantify our exposure, which has provided us with a realistic and timely understanding of evolving market conditions. We now believe we are entering the home stretch, and we will hopefully be among the first banks to show improvement.¿

The Company has no exposure to loans or investments with sub-prime collateral, nor has it ever originated or purchased Alt A loans or option ARM loans which have recently been a cause for concern in the industry. The Company¿s residential and consumer loan portfolios should continue to perform well in light of current market conditions.

The Company anticipates that it will pay a de minimis cash dividend to shareholders in the third quarter which will further strengthen its capital position during this period of economic uncertainty. Going forward, the cash dividend will not be increased until earnings improve. Should credit costs begin to moderate as currently anticipated, and should financial share price valuations remain depressed, the Company may consider share repurchases at a later date as an alternative to increasing the cash dividend and as a way to increase shareholder value.

Excluding the impact of credit costs, core earnings (net income before the provision for loan losses and after taxes) for the second quarter of 2008 totaled $4.6 million, or approximately $0.24 per share, compared with $5.1 million or $0.27 per share for the first quarter of 2008. The Company¿s net interest margin remained stable at 3.69 percent, compared with 3.74 percent in the first quarter of 2008.

¿Our core earnings (before credit costs) remained stable despite very challenging market conditions. These results reflect our relationship-based growth strategy that has for many years produced what has become one of the most valuable core deposit franchises in the state of Florida. This strategy continues to serve us well in the current environment, as it has allowed us to avoid the impacts of costly wholesale funding and maintain a strong liquidity position,¿ said Mr. Hudson. ¿The fundamentals of our business model remain very much in place and should continue to produce solid underlying earnings support as we proceed through the current credit cycle. We will continue to evaluate our cost structure in light of market conditions in order to maintain stable core earnings¿.

Other results for second quarter 2008:

Capital ratios remained strong with Tier 1 capital of 10.27 percent, total risk based capital at 11.52 percent, and average equity to average assets at 9.17 percent.
Loan loss reserve increased to a strong 1.75 percent from 1.22 percent the prior quarter and 0.84 percent in the prior year.
Net interest income remained stable at $20.2 million for the second quarter, and the net interest margin was nearly unchanged at 3.69 percent.
Net noninterest expense (noninterest expense minus noninterest income) grew by $876,000 linked quarter, primarily as a result of one-time benefits recorded in the first quarter 2008 related to redemption of VISA, Inc. shares and an increased FDIC premium expense in the second quarter.
Retail interest bearing savings and transaction deposits increased $22.3 million, up 16.0 percent annualized from the first quarter 2008.
Average deposits on the Treasure Coast increased 5.8 percent, while total average deposits grew over $50 million or 2.7 percent compared to second quarter a year ago.

Average cost of interest bearing liabilities totaled 2.68 percent, down 58 basis points from the first quarter of 2008.

Nonperforming assets increased by $15 million compared to the end of the first quarter of 2008. The majority of the increase in nonperforming assets is land and acquisition and development loans related to residential real estate. The Company does not anticipate that the levels of nonperforming assets will increase substantially in the coming quarter. The carrying value of nonperforming loans reflects management¿s evaluation of the current conditions affecting real estate values and market conditions at the end of the second quarter 2008.

The Company increased loan loss reserves as a result of the continued weakness in loans related to residential development and, during the second quarter of 2008, provided $8.7 million in excess of net charge-offs to the allowance for loan losses, which now totals 1.75 percent of total loans outstanding. Net loan charge-offs totaled $33.5 million in the second quarter and $37.9 million year-to-date.

The net interest margin for the second quarter of 2008 of 3.69 percent was 5 basis points lower compared to the first quarter of 2008, and down 40 basis points year-over-year. Net interest income declined by approximately $300,000, totaling $20.2 million for the second quarter when compared to the first quarter of 2008, and was lower by $1.2 million compared to the second quarter of 2007. The stable net interest margin was achieved in spite of the negative impacts from nonperforming assets, and benefited from lower cost of interest bearing liabilities and improving deposit mix. The margin was also affected by lower loan demand, with average total loans for the second quarter 2008 down $43.6 million linked-quarter and $60.0 million versus fourth quarter 2007.

Noninterest expenses were up $556,000 in the second quarter of 2008 compared to the first quarter as a result of higher FDIC insurance premiums, as the Company¿s credit for prior premiums has all been fully applied to this year¿s assessments. Also in the first quarter, the Company reversed an accrual for VISA litigation settlement claims resulting in lower expenses. Without the impact of these items, total overhead expenditures were nearly unchanged quarter-to-quarter. Salaries wages and benefit expenses were lower by $818,000 on reduced headcount and lower accruals for incentive payments due to lower revenues generated from wealth management and weak commercial lending production. These savings were offset by increased marketing costs to support the Company¿s retail core deposit growth activities and a full quarter¿s cost for new branches opened during the first half of the year. Year-to-date expenses are $680,000, or 1.8 percent lower than the same period in 2007. Management believes that total noninterest expenses for 2008 will not vary significantly from the prior year.

Consistent with the first quarter¿s results for 2008, loan growth in the second quarter was much slower than in the prior year with total loans outstanding decreasing year-over-year by $4.3 million, or 0.2 percent, compared with an increase of $165.3 million, or 9.5 percent for the year ended December 31, 2007. Loan growth is expected to continue to be weak for the remainder of the year and the first half of 2009. Total deposits year-over-year increased by $23.2 million, or 1.2 percent.

Average deposits for the second quarter of 2008 increased $9.2 million linked-quarter, compared to a $12.3 million increase in the first quarter of 2008. Deposit growth in the second quarter, which historically experiences a seasonal decline, was stronger than expected due to retail deposit growth. The Company instituted a focused retail deposit growth strategy earlier in the year, which has improved the promoted retail customer deposit account growth with these deposits increasing by $75 million in the second quarter 2008. Since the promotion began in February 2008, the Company believes it has increased its market share during this period of off-season slow growth. In addition, the Company¿s customer base includes local municipalities and governmental agencies that maintain significantly higher balances from November through April each year. This factor caused ending deposit balances on a linked-quarter basis to decline by $55.3 million.

Total noninterest income, excluding securities gains and losses, was lower in the second quarter compared to the first quarter, primarily as the result of income received from the redemption of Visa, Inc shares totaling $305,000. Year-over-year noninterest income for the six months ended June 30, 2008, excluding securities gains and losses, decreased $928,000, with $662,000 of this difference caused by lower securities brokerage revenue and the remainder due to lower consumer fees from merchant income and mortgage banking fees, all as a result of the real estate driven economic recession. Marine finance fees improved in both the second quarter and on a year-to-date basis. While overall transaction levels are lower, the Company has gained market share as a result of tighter credit limiting the ability of some competitors to handle transactions. Mortgage banking fees were nearly unchanged from the first quarter, in spite of the uncertainties of the mortgage markets and tighter credit standards. While recent conditions have improved modestly, market conditions remain unfavorable for increased revenue generation this year as a result of lower transaction volume.

The Company will host a conference call on Friday, July 25, 2008 at 10:00 a.m. (Eastern Time) to discuss its earnings results and business trends. Investors may call in (toll-free) by dialing (800) 640-9765 (access code: 22174773; leader: Dennis S. Hudson). Charts will be used during the conference call and may be accessed at the Company¿s website at www.seacoastbanking.net by selecting Presentations under the heading Investor Services. A replay of the conference call will be available beginning the afternoon of July 25 by dialing (877) 213-9653 (domestic), using the passcode 22174773.

Alternatively, individuals may listen to the live webcast of the presentation by visiting the Company¿s website at www.seacoastbanking.net. The link to the live audio webcast is located in the subsection Presentations under the heading Investor Relations. Beginning the afternoon of July 25, 2008, an archived version of the webcast can be accessed from this same subsection of the website. This webcast will be archived and available for one year.

Seacoast Banking Corporation of Florida has approximately $2.3 billion in assets. It is one of the largest independent commercial banking organizations in Florida, headquartered on Florida¿s Treasure Coast, one of the wealthiest and fastest growing areas in the nation.

Cautionary Notice Regarding Forward-Looking Statements

This press release contains ¿forward-looking statements¿ within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, cost savings, enhanced revenues, economic and seasonal conditions in our markets, and improvements to reported earnings that may be realized from cost controls and for integration of banks that we have acquired, as well as statements with respect to Seacoast¿s objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.

You can identify these forward-looking statements through our use of words such as ¿may,¿ ¿will,¿ ¿anticipate,¿ ¿assume,¿ ¿should,¿ ¿support¿, ¿indicate,¿ ¿would,¿ ¿believe,¿ ¿contemplate,¿ ¿expect,¿ ¿estimate,¿ ¿continue,¿ ¿further¿, ¿point to,¿ ¿project,¿ ¿could,¿ ¿intend¿ or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic and market conditions, including seasonality; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks, sensitivities and the shape of the yield curve; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; and the failure of assumptions underlying the establishment of reserves for possible loan losses. The risks of mergers and acquisitions, include, without limitation: unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers by competitors; as well as the difficulties and risks inherent with entering new markets.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2007 under ¿Special Cautionary Notice Regarding Forward-Looking Statements¿ and ¿Risk Factors¿, and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC¿s Internet website at http://www.sec.gov.