SEACOAST BANKING CORP OF FLORIDA (Form: 8-K, Received: 08/01/2014 11:40:04)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)

July 28, 2014

	SEACOAST BANKING CORPORATION OF FLORIDA
	(Exact Name of Registrant as Specified in Charter)

Florida	0-13660	59-2260678
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number	Identification No.)

815 Colorado Avenue, Stuart, FL		34994
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code

(772) 287-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

8-K - page 2 of 5

SEACOAST BANKING CORPORATION OF FLORIDA

Item 2.02

Results of Operations and Financial Condition

On July 28, 2014, the Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”) announced its financial results for the second quarter ended June 30, 2014.

A copy of the press release announcing Seacoast’s results for the second quarter ended June 30, 2014 is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 7.01

Regulation FD Disclosure

On July 29, 2014, Seacoast held an investor conference call to discuss its financial results for the second quarter ended June 30, 2014. A transcript of this conference call is attached hereto as Exhibit 99.2 and incorporated herein by reference. Also attached as Exhibit 99.3 are charts (available on the Company’s website at www.seacoastbanking.net) containing information used in the conference call and incorporated herein by reference. All information included in the transcript and the charts is presented as of June 30, 2014, and the Company does not assume any obligation to correct or update said information in the future.

The information in Items 2.02 and 7.01, as well as Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

8-K - page 3 of 5

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

Exhibit
No.		Description

99.1		Press Release dated July 28, 2014 with respect to Seacoast’s financial results for the second quarter ended June 30, 2014

99.2		Transcript of Seacoast’s investor conference call held on July 29, 2014 to discuss the Company’s financial results for the second quarter ended June 30, 2014

99.3		Data on website containing information used in the conference call held on July 29, 2014

Exhibits 99.1, 99.2 and 99.3 referenced herein contain “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, ability to realized deferred tax assets, 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.

8-K - page 4 of 5

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, tax and regulatory changes; changes in accounting policies, rules and practices; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity 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, 2013 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.

8-K - page 5 of 5

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SEACOAST BANKING CORPORATION OF FLORIDA
	(Registrant)

Date: July 31, 2014	By:	/s/ William R. Hahl
		William R. Hahl
		Executive Vice President and Chief Financial Officer

EXHIBIT 99.1

To Form 8-K dated July 28, 2014

NEWS RELEASE

SEACOAST BANKING CORPORATION OF FLORIDA

Dennis S. Hudson, III

Chairman and Chief Executive Officer

Seacoast Banking Corporation of Florida

(772) 288-6085

William R. Hahl

Executive Vice President/

Chief Financial Officer

(772) 221-2825

SEACOAST REPORTS $0.07 EARNINGS PER SHARE; $0.12 EXCLUDING MERGER RELATED CHARGES AND OTHER ADJUSTMENTS

Total revenues up $842,000 or 15.5 percent annualized over first quarter 2014

Adjusted pretax, preprovision earnings up 12 percent over first quarter 2014

Average loans outstanding up $30.6 million for the quarter or 9.4 percent annualized

Previously announced expense reductions implemented during the second quarter; an additional $1.8 million in expense reductions announced

STUART, FL., July 28, 2014 – Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF), today reported second quarter 2014 net income of $1.9 million or $0.07 per diluted common share. Excluding merger related charges and other adjustments as described below, adjusted net income was $2.9 million or $0.12 per diluted share.

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Dennis S. Hudson, Chief Executive Officer commented, “Our core earnings performance this quarter continued to improve on stronger revenue growth as the strategic investments we have been making over the past year or so began to produce better momentum. Revenue growth expanded in all business lines this quarter and our credit costs fell again as the Florida economic outlook continued to strengthen. We expect to see continued growth in our revenues and earnings as we step up execution of our programs and build further momentum.”

Our previously announced acquisition of BankFIRST is proceeding on schedule with closing expected to occur in early October. We received approval of the merger from our primary regulator earlier this month and expect final regulatory approval by the Federal Reserve in the coming weeks. The acquisition will create a $3 Billion Florida bank with exposure to rapidly recovering Florida markets including a significant presence in the vibrant Orlando and South Florida markets.

FINANCIAL HIGHLIGHTS: (Dollars in thousands, except share data)	Second Quarter 2014			First Quarter 2014			Fourth Quarter 2013			*Third Quarter 2013			Second Quarter 2013

Total Assets	$	2,294,156		$	2,315,992		$	2,268,940		$	2,149,777		$	2,183,680

Loans	$	1,335,192		$	1,312,456		$	1,304,207		$	1,262,912		$	1,265,893

Deposits	$	1,805,537		$	1,819,795		$	1,806,045		$	1,698,910		$	1,738,609

Net Income Available to Common Shareholders	$	1,918		$	2,299		$	588		$	44,204		$	2,017

Diluted Earnings Per Share	$	0.07		$	0.09		$	0.03		$	2.31		$	0.11

Return on Average Assets		0.33	%		0.41	%		0.33	%		8.32	%		0.54	%

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FINANCIAL HIGHLIGHTS: (Dollars in thousands, except share data)	Second Quarter 2014			First Quarter 2014			Fourth Quarter 2013			*Third Quarter 2013			Second Quarter 2013

Adjusted Net Income Available to Common Shareholders (1)	$	2,990		$	2,533		$	600		$	982		$	1,867

Adjusted Diluted Earnings Per Share (1)	$	0.12		$	0.10		$	0.03		$	0.05		$	0.10

Adjusted Return on Average Assets		0.52	%		0.45	%		0.11	%		0.18	%		0.34	%

Average Diluted Shares Outstanding		25,998			25,657			21,558			19,098			18,936

Net Interest Margin		3.10	%		3.07	%		3.08	%		3.25	%		3.12	%

Efficiency Ratio		89.4			84.3			81.9			78.1			81.1

Adjusted Efficiency Ratio		82.0			83.3			82.6			77.9			84.4

Annualized Core Operating Expenses as a Percent of Average Assets		3.27			3.26			3.29			3.33			3.51

* Third quarter 2013 net income includes the reversal of the valuation allowance for deferred tax assets of $42,993.

(1)

Non-GAAP measure

Adjusted Net Income

To better evaluate its earnings, the Company removes certain items to arrive at Adjusted Net Income and Adjusted Diluted earnings Per Share (non-GAAP measures) as detailed in the table below:

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	Second Quarter 2014			First Quarter 2014			Fourth Quarter 2013			Third Quarter 2013			Second Quarter 2013
(Dollars in thousands)
Net Income Available to Common Shareholders	$	1,918		$	2,299		$	588		$	44,204		$	2,017
Tax benefit related to deferred tax asset recovery											(42,993	)
Severance		181			212			0			24			10
Legal and professional fees for acquisition and expense initiatives		1,348			6			0			0			0
Security losses (gains)		0			(17	)		0			(280	)		(114	)
Miscellaneous losses		144			0			190			0			0
Recovery of prior legal fees		0			0			(350	)		0			(650	)
Recovery of non-accrual loan interest		0			0			0			(505	)		0
Net loss on OREO and repossessed assets		92			53			0			229			493
Asset dispositions expense		118			128			180			159			111
Effective tax rate on adjustments		(811	)		(148	)		(8	)		144			-

Adjusted Net Income (1)	$	2,990		$	2,533		$	600		$	982		$	1,867
Adjusted Earnings per diluted share (1)	$	0.12		$	0.10		$	0.03		$	0.05		$	0.10
Average shares outstanding		25,998			25,657			21,558			19,098			18,936

(1)

Non-GAAP measure

Strategic Investments Update

As a part of our strategy to transform the community bank business model we have made significant investments in our consumer and business banking lines while also reducing our legacy cost structure.

We are investing in enhancements to our digital platforms, customer sales and marketing processes, and additional personnel in marketing and data analytics. Year to date, operating expenses associated with these new investments total approximately $748,000 which have been absorbed in our current year operating expense structure. Total investments in these areas are projected to be approximately $1.3 million annually. These investments are helping us drive higher customer acquisition, lower customer attrition and improved revenues.

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We also made very substantial investments over the past year related to the startup and support for our Accelerate business distribution platform. This new commercial banking channel is supporting our growth in metro markets. Our success with this channel has been evident in improved commercial loan growth, higher business deposits and margin improvement this quarter. Total operating expense for the Accelerate platform is expected to total approximately $4.7 million in 2014.

We are stepping up our execution around these strategic initiatives to drive increased momentum and we will begin to invest in new initiatives needed to transform the community bank business model to better meet customer needs in the world we see ahead. We continue to execute cost reductions related to our legacy cost structure. Previously announced cost initiatives implemented this year have focused on organizational restructuring, contract negotiation, and other legacy costs and have totaled $3.4 million (annualized).

Additional Legacy Cost Reductions Announced

This quarter we are announcing additional legacy cost reductions (primarily branch consolidations) we will implement in the fourth quarter of this year. Annualized gross savings are estimated at $1.8 million when fully implemented. We expect to implement substantially all of these savings late in the fourth quarter. These legacy cost reductions are in addition to the previously announced cost reductions related to our acquisition of BankFIRST. One time charges related to these new initiatives are estimated at approximately $4.0 million and will be incurred primarily in the fourth quarter of 2014.

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Core Customer Growth and Digital Engagement Continues to Improve

Average noninterest bearing demand deposits were up $50.4 million, or 11.1 percent compared with the prior year and $24.8 million, or 20.7 percent linked quarter annualized

Ending noninterest bearing demand deposits increased to 28.2 percent of total deposits compared with 26.9 percent for the second quarter 2013

Personal and business mobile banking users have increased 81.6 percent year over year.

Our growth in net new households continued into the summer season, a departure from historical trend. Core customer funding totaled $1.689 billion at June 30, 2014, an $86.3 million increase from the second quarter of 2013 and a $223.2 million or 16 percent increase from 2012. Growth in commercial relationships resulting from an improved local economy and our increased focus on small business in our retail stores and our Accelerate business channel has resulted in core commercial business funding (noninterest demand, NOW and money market accounts) of $449.6 million at June 30, 2014, an increase of $43.6 million or 10.7 percent year over year.

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(Dollars in thousands)	Second Quarter 2014			Second Quarter 2013			Second Quarter 2012			2014 vs 2013 Change			2014 vs 2012 Change
Customer Relationship Funding
Demand deposits (noninterest bearing)	$	509,798		$	468,517		$	393,681			8.8	%		29.5	%
NOW		493,927			453,069			420,449			9.0			17.5
Money market accounts		335,246			335,947			346,191			(0.2	)		(3.2	)
Savings deposits		208,333			184,219			156,019			13.1			33.5
Time certificates of deposit		258,233			296,857			373,244			(13.0	)		(30.8	)
Total deposits		1,805,537			1,738,609			1,689,584			3.8			6.9
Sweep repurchase agreements		141,662			160,934			139,489			(12.0	)		1.6
Total core customer funding (1)		1,688,966			1,602,686			1,455,829			5.4			16.0
Demand deposit mix (noninterest bearing)		28.2	%		26.9	%		23.3	%

(1)

Total deposits and sweep repurchase agreements, excluding certificates of deposits.

Loan Growth Improves

Total loans were $1.335 billion at June 30, 2014, up $22.7 million from March 31, 2014 due to strong closings in commercial banking and residential lending. Our prior year investments in revenue producing personnel in our Accelerate business channel have produced solid results seen in our current period loan originations and forward pipeline. As indicated in the table below, commercial loan originations for the quarter totaled $53.3 million, an increase of $15.9 million linked quarter. Growth in our commercial loan pipeline is indicative of stronger commercial loan closings into the third quarter. Closed residential production of $61.2 million produced a sequential increase of 53.9 percent, contributing to growth in mortgage banking revenue linked quarter. The mortgage banking pipeline totaled $28.3 million at June 30, 2014 compared to $26.7 million at March 31, 2014.

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(Dollars in thousands)	Second Quarter 2014		First Quarter 2014		Fourth Quarter 2013		Third Quarter 2013		Second Quarter 2013

Commercial pipeline	$	58,168	$	29,936	$	27,830	$	54,600	$	46,850
Commercial loans closed	$	53,250		37,386		60,037		33,727		68,576
Total loan originations and pipeline	$	111,418	$	67,322	$	87,867	$	88,327	$	115,426

Income Statement Highlights

Noninterest Income

Noninterest income increased from the prior quarter by $338,000 or 6.1 percent. New mortgage product offerings and overall improved demand in mortgage banking resulted in a $194,000 or 29.3 percent increase in mortgage banking fees from the first quarter. Interchange fees were up $111,000 or 7.9 percent linked quarter. Additionally, wealth management fees increased $63,000 linked quarter, or 6.0 percent.

(Dollars in thousands)	Second Quarter 2014		First Quarter 2014		Fourth Quarter 2013		Third Quarter 2013		Second Quarter 2013

Service charges on deposit accounts	$	1,484	$	1,507	$	1,778	$	1,741	$	1,641
Trust income		703		671		693		667		675
Mortgage banking fees		855		661		728		1,075		1,256
Brokerage commissions and fees		410		379		461		383		362
Marine finance fees		340		254		215		283		419
Interchange income		1,514		1,403		1,394		1,358		1,388
Other deposit based EFT fees		83		98		80		77		87
Other		507		585		617		503		507
Total		5,896		5,558		5,966		6,087		6,335

Securities gains, net		0		17		0		280		114
	$	5,896	$	5,575	$	5,966	$	6,367	$	6,449

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Noninterest Expense

Total noninterest expenses increased $1.9 million from the prior quarter to $20.7 million as merger related charges for legal and professional fees of $1.2 million were incurred related to our previously announced acquisition of The BANKshares, Inc. Commissions from increased mortgage banking production and brokerage revenues were partially offset by a portion of personnel reductions from strategic cost initiatives in the second quarter. While employee benefits were $101,000 lower than the prior quarter, higher than expected healthcare claims resulted in higher than anticipated expense. We expect this trend to slow in the third and fourth quarters in line with trend for the prior year.

Previously announced expense reductions were completed in the second quarter. These reductions total $1.9 million annualized and produced a partial benefit in the second quarter. This benefit will be fully realized in the third quarter. Severance associated with this restructuring totaled $181,000 for the second quarter.

(Dollars in thousands)	Second Quarter 2014		First Quarter 2014		Fourth Quarter 2013		Third Quarter 2013		Second Quarter 2013
Noninterest Expense:

Salaries and wages	$	7,587	$	7,412	$	8,077	$	7,533	$	7,892
Employee benefits		2,081		2,182		1,568		1,713		1,823
Outsourced data processing costs		1,811		1,695		1,586		1,657		1,631
Telephone / data lines		306		293		325		318		325
Occupancy expense		1,888		1,838		1,824		1,824		1,775
Furniture and equipment expense		604		571		597		605		571
Marketing expense		675		813		749		456		685
Legal and professional fees		924		935		839		874		949
FDIC assessments		411		386		451		713		720
Amortization of intangibles		196		196		196		195		197
Other		2,317		2,063		2,414		2,203		2,512
Total Core Operating Expense		18,800		18,384		18,626		18,091		19,080

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(Dollars in thousands)	Second Quarter 2014		First Quarter 2014		Fourth Quarter 2013			Third Quarter 2013		Second Quarter 2013

Severance and organizational changes		181		212		0			24		10
Legal and professional fees for acquisition and expense initiatives		1,348		6		0			0		0
Miscellaneous losses		144		0		190			0		0
Recovery of prior legal fees		0		0		(350	)		0		(650	)
Net loss on OREO and repossessed assets		92		53		0			229		493
Asset dispositions expense		118		128		180			159		111

Total	$	20,683	$	18,789	$	18,646		$	18,503	$	19,044

Income Taxes

The effective tax rate for the second quarter of 2014 was higher due to merger related expenses that are not deductible for tax purposes. The effective tax rate for the second half of 2014 is expected to be approximately 40.85 percent.

Other Highlights

Credit Quality Continues to Improve

Improvements in credit quality continued during the second quarter of 2014 across all portfolios. A substantial paydown on a larger commercial loan during the quarter supported the partial reversal of a specific loan loss impairment reserve which resulted in an increased provision recapture compared with the first quarter. We expect to see continued improvement in asset quality over the balance of this year.

Provision for loan loss recapture of $1.4 million recorded for three months ended June 30, 2014

Net recoveries of $112,000 during the quarter compared to net charge-offs of $2.0 million one year ago;

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Nonperforming assets to total assets declined to 1.2 percent, compared to 2.0 percent a year ago.

(Dollars in thousands )	Second Quarter 2014			First Quarter 2014			Fourth Quarter 2013			Third Quarter 2013			Second Quarter 2013

Net charge-offs (recoveries)	$	(112	)	$	(139	)	$	838		$	842		$	2,027
Net charge-offs (recoveries) to average loans		(0.03	)%		(0.04	)%		0.26	%		0.26	%		0.64	%
Loan loss provision/ (recapture)	$	(1,444	)	$	(735	)	$	490		$	1,180		$	565
Allowance to loans at end of period		1.36	%		1.48	%		1.54	%		1.62	%		1.59	%

Restructured loans (accruing)	$	28,157		$	24,537		$	25,137		$	25,509		$	29,612

Nonperforming loans	$	21,745		$	26,220		$	27,672		$	28,724		$	33,266
Other real estate owned		6,198			6,369			6,860			5,589			10,063
Nonperforming assets	$	27,943		$	32,589		$	34,532		$	34,313		$	43,329

Nonperforming loans to loans outstanding at end of period		1.63	%		2.00	%		2.12	%		2.27	%		2.63	%

Nonperforming assets to total assets		1.22			1.41			1.52			1.60			1.98

Capital Ratios Continue to Strengthen

The Company’s tier 1 capital ratio is estimated at 17.8 percent and the total risk based capital ratio at 19.1 percent at June 30, 2014. The tier 1 leverage ratio was 10.9 percent at June 30, 2014 compared with 10.6 percent at March 31, 2014 and 5.3 percent the prior year.

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Seacoast will host a conference call on Tuesday, July 29, 2014 at 10:00 a.m. (Eastern Time) to discuss the earnings results. Investors may call in (toll-free) by dialing (800) 774-6070 (passcode: 7789246; host: Dennis S. Hudson). Slides will be used during the conference call and may be accessed at Seacoast’s website at SeacoastBanking.net by selecting “Presentations” under the heading “Investor Services.” A replay of the call will be available for one month, beginning the afternoon of July 29, by dialing (888) 843-7419 (domestic), using the passcode 7789246.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Seacoast’s website at SeacoastBanking.net. The link is located in the subsection “Presentations” under the heading “Investor Services.” Beginning the afternoon of July 29, an archived version of the webcast can be accessed from this same subsection of the website. The archived webcast will be available for one year.

Seacoast Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $2.3 billion in assets and $1.8 billion in deposits as of June 30, 2014. The Company provides integrated financial services including commercial and retail banking, wealth management, and mortgage services to customers through 34 traditional branches of its locally-branded wholly-owned subsidiary bank, Seacoast National Bank, and five Accelerate offices fueled by the power of Seacoast National Bank. Offices stretch from Fort Lauderdale north through the Treasure Coast and into Orlando, and west to Okeechobee and surrounding counties.

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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, ability to realized deferred tax assets, 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.

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FINANCIAL HIGHLIGHTS			(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(Dollars in thousands, except share data)	2014			2014			2013			2014			2013

Summary of Earnings
Net income (loss)	$	1,918		$	2,299		$	2,954		$	4,217		$	4,998
Net income available to common shareholders (loss)		1,918			2,299			2,017			4,217			3,124
Net interest income (1)		16,779			16,277			16,172			33,056			32,227
Net interest margin (1), (2)		3.10			3.07			3.12			3.09			3.13
														.
Performance Ratios
Return on average assets-GAAP basis (2), (3)		0.33	%		0.41	%		0.54	%		0.37	%		0.46	%
Return on average shareholders' equity-GAAP basis (2), (3)		3.25			4.02			7.19			3.63			6.15
Return on average tangible common shareholders' equity-GAAP basis (2), (3), (4)		3.47			4.26			7.53			3.86			6.01
Efficiency ratio (5)		89.42			84.30			81.05			86.91			81.25
Noninterest income to total revenue		26.06			25.52			28.22			25.80			27.64

Per Share Data
Net income (loss) diluted-GAAP basis (6)	$	0.07		$	0.09		$	0.11		$	0.16		$	0.17
Net income (loss) basic-GAAP basis (6)		0.07			0.09			0.11			0.16			0.17
Book value per share common (6)		9.02			8.79			5.89			9.02			5.89
Tangible book value per share (6)		9.00			8.77			8.44			9.00			8.44
Tangible common book value per share (4), (6)		9.00			8.77			5.84			9.00			5.84
Cash dividends declared		0.00			0.00			0.00			0.00			0.00

(1)

Calculated on a fully taxable equivalent basis using amortized cost.

(2)

These ratios are stated on an annualized basis and are not necessarily indicative of future periods.

(3)

The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses) because the unrealized gains (losses) are not included in net income (loss).

(4)

The Company defines tangible common equity as total shareholder's equity less preferred stock and intangible assets.

(5)

Defined as (noninterest expense less foreclosed property expense and amortization of intangibles) divided by net operating revenue (net interest income on a fully taxable equivalent basis plus noninterest income excluding securities gains).

(6)

Calculated based on total shares outstanding subsequent to the 5/1 reverse stock split.

FINANCIAL HIGHLIGHTS

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	June 30,			March 31,			June 30,
(Dollars in thousands, except share data)	2014			2014			2013

Selected Financial Data
Total assets	$	2,294,156		$	2,315,992		$	2,183,680
Securities available for sale (at fair value)		518,353			658,512			672,809
Securities held for investment (at amortized cost)		156,498			0			0
Net loans		1,317,052			1,292,984			1,245,815
Deposits		1,805,537			1,819,795			1,738,609
Total shareholders' equity		234,439			228,382			161,248
Common shareholders' equity		234,439			228,382			111,878

Average Balances (Year-to-Date)
Total average assets	$	2,295,983		$	2,286,998		$	2,173,810
Less: intangible assets		525			629			1,299
Total average tangible assets	$	2,295,458		$	2,286,369		$	2,172,511

Total average equity	$	234,214		$	231,769		$	163,776
Less: intangible assets		525			629			1,299
Total average tangible equity	$	233,689		$	231,140		$	162,477

Credit Analysis
Net charge-offs (recoveries) year-to-date	$	(251	)	$	(139	)	$	3,544
Net charge-offs (recoveries) to average loans (annualized)		(0.04	)%		(0.04	)%		0.57	%
Loan loss provision (recapture) year-to-date	$	(2,179	)	$	(735	)	$	1,518
Allowance to loans at end of period		1.36	%		1.48	%		1.59	%

Nonperforming loans	$	21,745		$	26,220		$	33,266
Other real estate owned		6,198			6,369			10,063
Total nonperforming assets	$	27,943		$	32,589		$	43,329

Restructured loans (accruing)	$	28,157		$	24,537		$	29,612

Nonperforming loans to loans at end of period		1.63	%		2.00	%		2.63	%

Nonperforming assets to total assets		1.22	%		1.41	%		1.98	%

CONDENSED CONSOLIDATED STATEMENTS OF INCOME				(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Dollars in thousands, except per share data)	2014			2013		2014			2013

Interest on securities:
Taxable	$	3,629		$	3,008	$	7,063		$	6,192
Nontaxable		9			17		21			35
Interest and fees on loans		14,103			14,264		27,901			28,291
Interest on federal funds sold and other investments		246			224		514			452
Total Interest Income		17,987			17,513		35,499			34,970

Interest on deposits		184			191		378			399
Interest on time certificates		386			501		793			1,033
Interest on borrowed money		692			707		1,382			1,424
Total Interest Expense		1,262			1,399		2,553			2,856

Net Interest Income		16,725			16,114		32,946			32,114
Provision (recapture) for loan losses		(1,444	)		565		(2,179	)		1,518
Net Interest Income After Provision for Loan Losses		18,169			15,549		35,125			30,596

Noninterest income:
Service charges on deposit accounts		1,484			1,641		2,991			3,192
Trust income		703			675		1,374			1,351
Mortgage banking fees		855			1,256		1,516			2,370
Brokerage commissions and fees		410			362		789			787
Marine finance fees		340			419		594			691
Interchange income		1,514			1,388		2,917			2,652
Other deposit based EFT fees		83			87		181			185
Other		507			507		1,092			1,038
		5,896			6,335		11,454			12,266
Securities gains, net		0			114		17			139
Total Noninterest Income		5,896			6,449		11,471			12,405

Noninterest expenses:
Salaries and wages		7,768			7,902		15,392			15,372
Employee benefits		2,081			1,823		4,263			4,046
Outsourced data processing costs		1,811			1,631		3,506			3,129
Telephone / data lines		306			325		599			610
Occupancy		1,888			1,775		3,726			3,530
Furniture and equipment		604			571		1,175			1,132
Marketing		675			685		1,488			1,134
Legal and professional fees		2,272			299		3,213			1,095
FDIC assessments		411			720		797			1,437
Amortization of intangibles		196			197		392			392
Asset dispositions expense		118			111		246			401
Net loss on other real estate owned and repossessed assets		92			493		145			1,060
Other		2,461			2,512		4,524			4,665
Total Noninterest Expenses		20,683			19,044		39,466			38,003

Income Before Income Taxes		3,382			2,954		7,130			4,998
Income taxes (benefit)		1,464			0		2,913			0

Net Income		1,918			2,954		4,217			4,998
Preferred stock dividends and accretion on preferred stock discount		-			937		-			1,874
Net Income Available to Common Shareholders	$	1,918		$	2,017	$	4,217		$	3,124

Per share of common stock:

Net income diluted	$	0.07		$	0.11	$	0.16		$	0.17
Net income basic		0.07			0.11		0.16			0.17
Cash dividends declared		0.00			0.00		0.00			0.00

Average diluted shares outstanding		25,998,121			18,936,480		25,828,391			18,930,879
Average basic shares outstanding		25,826,825			18,794,651		25,659,159			18,792,054

CONDENSED CONSOLIDATED BALANCE SHEETS	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	June 30,			December 31,			June 30,
(Dollars in thousands, except share data)	2014			2013			2013

Assets
Cash and due from banks	$	40,175		$	48,561		$	33,673
Interest bearing deposits with other banks		113,855			143,063			106,446
Total Cash and Cash Equivalents		154,030			191,624			140,119

Securities:
Available for sale (at fair value)		518,353			641,611			672,809
Held for investment (at amortized cost)		156,498			0			0
Total Securities		674,851			641,611			672,809

Loans available for sale		18,129			13,832			26,029

Loans, net of deferred costs		1,335,192			1,304,207			1,265,893
Less: Allowance for loan losses		(18,140	)		(20,068	)		(20,078	)
Net Loans		1,317,052			1,284,139			1,245,815

Bank premises and equipment, net		34,653			34,505			35,029
Other real estate owned		6,198			6,860			10,063
Other intangible assets		326			718			1,109
Other assets		88,917			95,651			52,707
	$	2,294,156		$	2,268,940		$	2,183,680

Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand deposits (noninterest bearing)	$	509,798		$	464,006		$	468,517
NOW		493,927			540,288			453,069
Savings deposits		208,333			192,491			184,219
Money market accounts		335,246			331,184			335,947
Other time certificates		144,001			154,743			168,710
Brokered time certificates		8,040			9,776			9,820
Time certificates of $100,000 or more		106,192			113,557			118,327
Total Deposits		1,805,537			1,806,045			1,738,609

Federal funds purchased and securities sold underagreements to repurchase, maturing within 30 days		141,662			151,310			160,934
Borrowed funds		50,000			50,000			50,000
Subordinated debt		53,610			53,610			53,610
Other liabilities		8,908			9,371			19,279
		2,059,717			2,070,336			2,022,432

Shareholders' Equity
Preferred stock - Series A		0			0			49,370
Common stock		2,599			2,364			1,898
Additional paid in capital		302,088			277,290			230,615
Accumulated deficit		(66,478	)		(70,695	)		(115,487	)
Treasury stock		(54	)		(11	)		(12	)
		238,155			208,948			166,384
Accumulated other comprehensive gain (loss), net		(3,716	)		(10,344	)		(5,136	)
Total Shareholders' Equity		234,439			198,604			161,248
	$	2,294,156		$	2,268,940		$	2,183,680

Common Shares Outstanding		25,998,823			23,637,434			18,982,293

Note: The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date.

CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	QUARTERS
	2014						2013
(Dollars in thousands, except per share data)	Second			First			Fourth			Third			Second
Net income (loss)	$1,918			$2,299			$1,850			$45,141			$2,954

Operating Ratios
Return on average assets-GAAP basis (2),(3),(5)		0.33			0.41	%		0.33	%		8.32	%		0.54	%
Return on average tangible assets (2),(3),(4)		0.36			0.43			0.35			8.34			0.57
Return on average shareholders' equity-GAAP basis (2),(3),(5)		3.25			4.02			3.10			106.55			7.19
Efficiency ratio (6)		89.42			84.30			81.92			78.05			81.05
Noninterest income to total revenue		26.06			25.52			26.82			26.58			28.22

Net interest margin (1),(2)		3.10			3.07			3.08			3.25			3.12
Average equity to average assets		10.27			10.13			10.55			7.80			7.56

Credit Analysis
Net charge-offs (recoveries)	$	(112	)	$	(139	)	$	838		$	842		$	2,027
Net charge-offs (recoveries) to average loans		(0.03	)		(0.04	)%		0.26	%		0.26	%		0.64	%
Loan loss provision (recapture)	$	(1,444	)	$	(735	)	$	490		$	1,180		$	565
Allowance to loans at end of period		1.36			1.48	%		1.54	%		1.62	%		1.59	%

Restructured loans (accruing)	$	28,157		$	24,537		$	25,137		$	25,509		$	29,612

Nonperforming loans	$	21,745		$	26,220		$	27,672		$	28,724		$	33,266
Other real estate owned		6,198			6,369			6,860			5,589			10,063
Nonperforming assets	$	27,943		$	32,589		$	34,532		$	34,313		$	43,329

Nonperforming loans to loans at end of period		1.63			2.00	%		2.12	%		2.27	%		2.63	%
Nonperforming assets to total assets		1.22			1.41			1.52			1.60			1.98

Per Share Common Stock
Net income (loss) diluted-GAAP basis (7)	$	0.07		$	0.09		$	0.03		$	2.31		$	0.11
Net income (loss) basic-GAAP basis (7)		0.07			0.09			0.03			2.35			0.11

Cash dividends declared (7)		0.00			0.00			0.00			0.00			0.00
Book value per share common (7)		9.02			8.79			8.40			8.12			5.89

Average Balances
Total average assets	$	2,304,870		$	2,286,998		$	2,245,155		$	2,153,830		$	2,178,242
Less: Intangible assets		422			629			813			1,009			1,205
Total average tangible assets	$	2,304,448		$	2,286,369		$	2,244,342		$	2,152,821		$	2,177,038

Total average equity	$	236,632		$	231,769		$	236,950		$	168,078		$	164,747
Less: Intangible assets		422			629			813			1,009			1,205
Total average tangible equity	$	236,210		$	231,140		$	236,137		$	167,069		$	163,541

(1)

Calculated on a fully taxable equivalent basis using amortized cost.

(2)

These ratios are stated on an annualized basis and are not necessarily indicative of future periods.

(3)

The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses), because the unrealized gains (losses) are not included in net income (loss).

(4)

The Company believes that return on average assets and equity excluding the impacts of noncash amortization expense on intangible assets is a better measurement of the Company's trend in earnings growth.

(5)

Excluding the income tax benefit related to the reversal of the valuation allowance for deferred tax assets and reflecting tax provisioning of $1,351 for the third quarter 2013, adjusted return on average assets and adjusted return on average shareholder's equity for the third quarter was 0.40 percent and 5.07 percent, respectively.

(6)

(7)

Calculated based on total shares outstanding subsequent to the 5/1 reverse stock split.

	June 30,		December 31,		June 30,
SECURITIES	2014		2013		2013
Mortgage-backed	$8,994.00				$13,913.00
U.S. Treasury and U.S. Government Agencies	$	100	$	100	$	101
Mortgage-backed		479,720		602,568		631,228
Collateralized loan obligations		32,260		32,179		32,527
Obligations of states and political subdivisions		6,273		6,764		7,465
Other securities		0		0		1,488
Securities Available for Sale		518,353		641,611		672,809

Mortgage-backed		156,498		0		0
Securities Held for Investment		156,498		0		0
Total Securities	$	674,851	$	641,611	$	672,809

	June 30,		December 31,		June 30,
LOANS	2014		2013		2013

Construction and land development	$	57,393	$	67,450	$	61,116
Real estate mortgage		1,145,013		1,113,128		1,094,976
Installment loans to individuals		45,241		44,713		44,296
Commercial and financial		87,285		78,636		65,224
Other loans		260		280		281
Total Loans	$	1,335,192	$	1,304,207	$	1,265,893

AVERAGE BALANCES	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	QUARTER															Percent Change vs.
	2014						2013									1st Qtr			2nd Qtr
(Dollars in thousands)	Second			First			Fourth			Third			Second			2014			2013

Assets
Earning assets:
Securities:
Taxable	$	677,600		$	653,646		$	655,176		$	664,103		$	639,769			3.7	%		5.9	%
Nontaxable		827			1,016			1,560			1,560			1,647			(18.6	)		(49.8	)
Total Securities		678,427			654,662			656,736			665,663			641,416			3.6			5.8

Federal funds sold and other investments		153,410			188,048			156,823			113,798			168,740			(18.4	)		(9.1	)

Loans, net		1,338,415			1,307,796			1,293,373			1,278,391			1,269,789			2.3			5.4

Total Earning Assets		2,170,252			2,150,506			2,106,932			2,057,852			2,079,945			0.9			4.3

Allowance for loan losses		(19,784	)		(20,205	)		(20,817	)		(20,206	)		(21,515	)		(2.1	)		(8.0	)
Cash and due from banks		35,735			37,186			40,836			35,810			34,279			(3.9	)		4.2
Premises and equipment		34,948			34,731			34,750			34,834			35,121			0.6			(0.5	)
Other assets		83,719			84,780			83,454			45,540			50,412			(1.3	)		66.1

	$	2,304,870		$	2,286,998		$	2,245,155		$	2,153,830		$	2,178,242			0.8			5.8

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW	$	498,285		$	507,313		$	483,569		$	447,350		$	461,005			(1.8	)%		8.1	%
Savings deposits		205,686			197,300			190,558			185,918			180,915			4.3			13.7
Money market accounts		336,772			330,787			332,576			336,229			339,058			1.8			(0.7	)
Time deposits		259,325			270,215			282,543			289,408			302,110			(4.0	)		(14.2	)
Federal funds purchased and
other short term borrowings		150,108			155,656			142,999			157,607			159,847			(3.6	)		(6.1	)
Other borrowings		103,610			103,610			103,610			103,610			103,610			0.0			0.0

Total Interest-Bearing Liabilities		1,553,786			1,564,881			1,535,855			1,520,122			1,546,545			(0.7	)		0.5

Demand deposits (noninterest-bearing)		505,892			481,048			462,830			454,642			455,525			5.2			11.1
Other liabilities		8,560			9,300			9,520			10,988			11,425			(8.0	)		(25.1	)
Total Liabilities		2,068,238			2,055,229			2,008,205			1,985,752			2,013,495			0.6			2.7

Shareholders' equity		236,632			231,769			236,950			168,078			164,747			2.1			43.6

	$	2,304,870		$	2,286,998		$	2,245,155		$	2,153,830		$	2,178,242			0.8			5.8

AVERAGE YIELDS / RATES ⁽¹⁾ (Unaudited)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	QUARTER
	2014						2013
(Dollars in thousands)	Second			First			Fourth			Third			Second

Assets
Earning assets:
Securities:
Taxable		2.14	%		2.10	%		2.11	%		1.93	%		1.88	%
Nontaxable		6.77			6.69			6.41			6.67			6.55
Total Securities		2.15			2.11			2.12			1.95			1.89

Federal funds sold and other investments		0.64			0.58			0.57			0.67			0.53

Loans, net		4.24			4.29			4.29			4.59			4.52

Total Earning Assets		3.33			3.31			3.33			3.52			3.39

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW		0.08			0.08			0.08			0.08			0.09
Savings deposits		0.04			0.05			0.05			0.05			0.05
Money market accounts		0.08			0.08			0.09			0.08			0.08
Time deposits		0.60			0.61			0.62			0.64			0.67
Federal funds purchased and other short term borrowings		0.17			0.17			0.17			0.17			0.18
Other borrowings		2.43			2.44			2.44			2.44			2.45

Total Interest-Bearing Liabilities		0.33			0.33			0.35			0.36			0.36

Interest expense as a % of earning assets		0.23			0.24			0.25			0.26			0.27
Net interest income as a % of earning assets		3.10			3.07			3.08			3.25			3.12

(1)

On a fully taxable equivalent basis. All yields and rates have been computed on an annualized basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.

INTEREST INCOME / EXPENSE ⁽¹⁾	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	QUARTER										Percent Change vs.
	2014				2013						1st Qtr			2nd Qtr
(Dollars in thousands)	Second		First		Fourth		Third		Second		2014			2013

Assets
Earning assets:
Securities:
Taxable	$	3,630	$	3,434	$	3,452	$	3,212	$	3,008		5.7	%		20.7	%
Nontaxable		14		17		25		26		27		(17.6	)		(48.1	)
Total Securities		3,644		3,451		3,477		3,238		3,035		5.6			20.1

Federal funds sold and other investments		246		268		224		192		224		8.2			9.8

Loans, net		14,151		13,849		13,974		14,804		14,312		2.2			(1.1	)

Total Earning Assets		18,041		17,568		17,675		18,234		17,571		2.7			2.7

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW		94		102		96		93		100		(7.8	)		(6.0	)
Savings deposits		23		24		26		25		24		(4.2	)		(4.2	)
Money market accounts		67		68		74		69		67		(1.5	)		0.0
Time deposits		386		407		444		470		501		(5.2	)		(23.0	)
Federal funds purchased and other short term borrowings		65		66		62		68		73		(1.5	)		(11.0	)
Other borrowings		627		624		637		637		634		0.5			(1.1	)

Total Interest-Bearing Liabilities		1,262		1,291		1,339		1,362		1,399		(2.2	)		(9.8	)

Net interest income		16,779		16,277		16,336		16,872		16,172		3.1			3.8

(1) On a fully taxable equivalent basis. Fees on loans have been included in interest on loans.

CONSOLIDATED QUARTERLY FINANCIAL DATA	(Unaudited)
SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	2014				2013
(Dollars in thousands)	Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter

Customer Relationship Funding (Period End)
Demand deposits (noninterest bearing)
Commercial	$	293,515	$	291,221	$	261,938	$	254,373	$	260,325
Retail		167,172		173,698		159,117		155,281		163,551
Public funds		33,223		34,636		32,971		27,002		29,487
Other		15,888		14,370		9,980		16,293		15,154
		509,798		513,925		464,006		452,949		468,517

NOW accounts
Commercial		41,423		41,281		43,241		35,029		35,714
Retail		327,762		329,226		324,583		305,055		308,390
Public funds		124,742		134,191		172,464		100,785		108,965
		493,927		504,698		540,288		440,869		453,069

Total Transaction Accounts
Commercial		334,938		332,501		305,179		289,402		296,039
Retail		494,934		502,924		483,700		460,336		471,941
Public funds		157,965		168,828		205,435		127,787		138,452
Other		15,888		14,370		9,980		16,293		15,154
		1,003,725		1,018,623		1,004,294		893,818		921,586

Savings accounts		208,333		202,170		192,491		187,181		184,219

Money market accounts
Commercial		114,662		109,158		100,601		107,767		109,938
Retail		213,927		221,762		221,062		217,176		216,370
Public funds		6,657		6,488		9,521		9,735		9,639
		335,246		337,408		331,184		334,678		335,947

Time certificates of deposit		258,233		261,594		278,076		283,233		296,857
Total Deposits	$	1,805,537	$	1,819,795	$	1,806,045	$	1,698,910	$	1,738,609

Sweep repurchase agreements	$	141,662	$	156,136	$	151,310	$	134,338	$	160,934

Total core customer funding (1)	$	1,688,966	$	1,714,337	$	1,679,279	$	1,550,015	$	1,602,686

(1) Total deposits and sweep repurchase agreements, excluding certificates of deposits.

QUARTERLY TRENDS - LOANS AT END OF PERIOD (Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	2014				2013
	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr		1st Qtr
Installment loans to individuals
Automobile and trucks	$	6.1	$	6.2	$	6.6	$	7.1	$	7.5	$	7.8
Marine loans		23.3		20.8		20.2		21.3		16.7		15.4
Other		15.8		17.6		17.9		18.8		20.1		20.0
		45.2		44.6		44.7		47.2		44.3		43.2
Construction and land development to individuals
Lot loans		13.1		13.3		12.9		14.7		15.5		16.6
Construction		16.7		24.4		21.3		19.7		20.7		20.8
		29.8		37.7		34.2		34.4		36.2		37.4
Residential real estate
Adjustable		407.7		392.5		391.9		378.4		372.6		365.8
Fixed rate		91.0		89.8		91.1		94.7		97.5		98.2
Home equity mortgages		54.9		60.6		62.0		61.8		62.2		61.3
Home equity lines		53.2		49.7		47.7		47.7		49.1		49.3
		606.8		592.6		592.7		582.6		581.4		574.6

TOTAL CONSUMER		681.8		674.9		671.6		664.2		661.9		655.2

Commercial & financial		87.3		79.4		78.6		70.8		65.2		64.8

Construction and land development for commercial
Residential
Single family residences		5.1		1.8		2.0		-		-		-
Single family land and lots		4.5		4.7		4.9		4.9		5.0		4.9
Townhomes		1.1		0.5		-		-		-		-
Multifamily		3.5		3.6		3.7		3.8		3.9		3.9
		14.2		10.6		10.6		8.7		8.9		8.8
Commercial
Office buildings		-		-		-		1.6		1.6		1.1
Retail trade		2.4		2.9		7.7		1.8		1.8		-
Land		4.1		4.4		4.9		7.3		7.2		7.8
Healthcare		-		7.1		5.4		4.7		2.9		3.3
Churches and educational facilities		1.6		1.1		3.8		4.0		2.5		1.2
Lodging		5.2		3.4		0.9		0.3		-		-
Convenience stores		0.1		-		-		-		-		-
		13.4		18.9		22.7		19.7		16.0		13.4

Total construction and land development		27.6		29.5		33.3		28.4		24.9		22.2

Commercial real estate
Office buildings		122.8		120.0		118.7		118.2		112.0		112.5
Retail trade		142.8		142.0		130.6		128.9		135.5		122.2
Industrial		82.2		76.7		81.1		79.6		83.3		73.4
Healthcare		41.6		44.1		45.5		38.8		42.1		39.4
Churches and educational facilities		26.7		26.9		25.3		24.2		26.4		26.9
Recreation		3.3		2.4		2.5		2.5		2.6		2.6
Multifamily		18.7		17.2		16.8		6.2		9.5		8.5
Mobile home parks		1.7		1.8		1.9		1.9		1.9		2.0
Lodging		17.0		16.9		17.1		17.3		17.5		18.0
Restaurant		3.9		3.7		3.7		3.8		3.5		3.6
Agricultural		4.6		4.7		7.0		7.2		7.1		5.9
Convenience stores		20.9		22.0		20.8		21.0		20.2		20.2
Marina		18.5		20.6		21.3		21.5		20.9		21.1
Other		33.5		29.4		28.1		27.9		31.1		25.1
		538.2		528.4		520.4		499.0		513.6		481.4

TOTAL COMMERCIAL		653.1		637.3		632.3		598.2		603.7		568.4

Other		0.3		0.2		0.3		0.5		0.3		0.2
	$	1,335.2	$	1,312.4	$	1,304.2	$	1,262.9	$	1,265.9	$	1,223.8

QUARTERLY TRENDS - INCREASE (DECREASE) IN LOANS BY QUARTER (Dollars in Millions)

SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES

	2014						2013
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1st Qtr
Installment loans to individuals
Automobile and trucks	$	(0.1	)	$	(0.4	)	$	(0.5	)	$	(0.4	)	$	(0.3	)	$	-
Marine loans		2.5			0.6			(1.1	)		4.6			1.3			(3.0	)
Other		(1.8	)		(0.3	)		(0.9	)		(1.3	)		0.1			(0.7	)
		0.6			(0.1	)		(2.5	)		2.9			1.1			(3.7	)
Construction and land development to individuals
Lot loans		(0.2	)		0.4			(1.8	)		(0.8	)		(1.1	)		(0.1	)
Construction		(7.7	)		3.1			1.6			(1.0	)		(0.1	)		(1.4	)
		(7.9	)		3.5			(0.2	)		(1.8	)		(1.2	)		(1.5	)
Residential real estate
Adjustable		15.2			0.6			13.5			5.8			6.8			4.8
Fixed rate		1.2			(1.3	)		(3.6	)		(2.8	)		(0.7	)		(0.8	)
Home equity mortgages		(5.7	)		(1.4	)		0.2			(0.4	)		0.9			3.3
Home equity lines		3.5			2.0			-			(1.4	)		(0.2	)		(2.1	)
		14.2			(0.1	)		10.1			1.2			6.8			5.2

TOTAL CONSUMER		6.9			3.3			7.4			2.3			6.7			-

Commercial & financial		7.9			0.8			7.8			5.6			0.4			2.9

Construction and land development for commercial
Residential
Single family residences		3.3			(0.2	)		2.0			-			-			-
Single family land and lots		(0.2	)		(0.2	)		-			(0.1	)		0.1			(0.7	)
Townhomes		0.6			0.5			-			-			-			-
Multifamily		(0.1	)		(0.1	)		(0.1	)		(0.1	)		-			(0.4	)
		3.6			(0.0	)		1.9			(0.2	)		0.1			(1.1	)
Commercial
Office buildings		-			-			(1.6	)		-			0.5			1.1
Retail trade		(0.5	)		(4.8	)		5.9			-			1.8			-
Land		(0.3	)		(0.5	)		(2.4	)		0.1			(0.6	)		(1.8	)
Healthcare		(7.1	)		1.7			0.7			1.8			(0.4	)		1.5
Churches and educational facilities		0.5			(2.7	)		(0.2	)		1.5			1.3			0.7
Lodging		1.8			2.5			0.6			0.3			-			-
Convenience stores		0.1			-			-			-			-			-
		(5.5	)		(3.8	)		3.0			3.7			2.6			1.5

Total construction and land development		(1.9	)		(3.8	)		4.9			3.5			2.7			0.4

Commercial real estate
Office buildings		2.8			1.3			0.5			6.2			(0.5	)		7.8
Retail trade		0.8			11.4			1.7			(6.6	)		13.3			(4.5	)
Industrial		5.5			(4.4	)		1.5			(3.7	)		9.9			0.8
Healthcare		(2.5	)		(1.4	)		6.7			(3.3	)		2.7			(1.3	)
Churches and educational facilities		(0.2	)		1.6			1.1			(2.2	)		(0.5	)		(1.7	)
Recreation		0.9			(0.1	)		-			(0.1	)		-			(0.1	)
Multifamily		1.5			0.4			10.6			(3.3	)		1.0			(0.5	)
Mobile home parks		(0.1	)		(0.1	)		-			-			(0.1	)		-
Lodging		0.1			(0.2	)		(0.2	)		(0.2	)		(0.5	)		(0.7	)
Restaurant		0.2			-			(0.1	)		0.3			(0.1	)		0.1
Agricultural		(0.1	)		(2.3	)		(0.2	)		0.1			1.2			(0.2	)
Convenience stores		(1.1	)		1.2			(0.2	)		0.8			-			(0.3	)
Marina		(2.1	)		(0.7	)		(0.2	)		0.6			(0.2	)		(0.1	)
Other		4.1			1.3			0.2			(3.2	)		6.0			(4.7	)
		9.8			8.0			21.4			(14.6	)		32.2			(5.4	)

TOTAL COMMERCIAL		15.8			5.0			34.1			(5.5	)		35.3			(2.1	)

Other		0.1			(0.1	)		(0.2	)		0.2			0.1			(0.2	)
	$	22.8		$	8.2		$	41.3		$	(3.0	)	$	42.1		$	(2.3	)

EXHIBIT 99.2

To Form 8-K dated July 28, 2014

Seacoast Banking Corporation of Florida

Second Quarter 2014 Earnings Conference Call

July 28, 2013

10:00 AM Eastern Time

Company Participants:

Dennis S. Hudson, III, Chairman and Chief Executive Officer, Seacoast Banking Corporation of Florida

William R. Hahl, Executive Vice President and Chief Financial Officer, Seacoast Banking Corporation of Florida

Other Participants:

Christopher Marinac, Director of Research, FIG Partners

Michael Rose, Senior Vice President - Equity Research, Raymond James & Associates, Inc.

Scott Valentin, ‎Managing Director, FBR Capital Markets

Management Discussion :

Operator: Welcome to the Seacoast Second Quarter Earnings Conference Call. My name is John, and I'll be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that the conference is being recorded.

And I will now turn the call over to Dennis Hudson. Dennis, you may begin.

Dennis S. Hudson, III: Thank you very much, and welcome to our Second Quarter Conference Call. Before we begin, I’ll direct your attention to our forward statement contained at the end of our press release. We’ll be discussing certain issues that constitute forward-looking statements and accordingly our comments are intended to be covered within the meaning of 27A of the Securities and Exchange Act.

With me today is Chuck Cross, who heads up our commercial business banking line. Also here is Bill Hahl, our CFO, and David Houdeshell, our Chief Credit Officer.

- 1 -

During our call this morning, I’ll be covering a few topics that are important to us as we look ahead to the rest of the year and into 2015 and beyond. Most importantly, this quarter we began to develop faster momentum across the board as our strategic investments that we’ve been making are producing greater results. Our revenue growth this quarter was quite meaningful, as you saw, and it was led by the best margin improvement, in fact the best net interest income growth, we have seen since coming out of the recession. Our adjusted pretax pre-provision income grew by 12 percent during the quarter as revenue growth continued to improve and our core expenses remained in line with our expectations. Credit costs continued to fall, leading to another quarter of provision recapture. Our adjusted EPS for the quarter was 12 cents per share.

As you know, last quarter we announced the acquisition of BankFIRST in Orlando and I’m pleased to say we received approval for this transaction from a primary regulator much quicker than we expected. In fact, we received our approval in record time, so we are headed for a closing in early October, October 1st in fact, following shareholders’ meetings that are scheduled for mid-September. We still need final regulatory action by the Federal Reserve, and we expect this to occur quickly.

As we incorporate the team members of BankFIRST with our group, we create the most powerful commercial banking team, we think, in the state. Together, we create a $3 billion Florida bank with significant exposure to markets that are now starting to grow again, especially the very vibrant Orlando market. As we announced in the transaction, we expect to generate meaningful accretion out of the gate with much greater potential for growth. Over the past few months, we’ve gotten to know the team better at BankFIRST. These guys and gals are true dedicated professionals with a deep connection to their clients and connections into their markets. They are going to play a big role in our combined success in 2015 and beyond as we continue to transform the community bank business model to address customer needs in the future. Our integration plan puts the customer first and values the talent that joins our team from BankFIRST. So we are on track and we just can’t wait to get our teams moving together.

As you saw in last night’s release, we also announced additional cost-outs totaling $1.8 million, primarily related to legacy branch consolidations. This work will not occur until late in the fourth quarter of this year, which means the savings will start to positively impact earnings in the first quarter of 2015. Now these cost-outs that we’ve announced are in addition to the cost-outs we intend to implement in the fourth quarter related to BankFIRST, which were announced previously.

So our performance is improving as our momentum is growing. Loan volumes are growing as well, up 9.4 percent annualized for the quarter. Our new customer acquisition continues to build, with average non-interest bearing deposits up 11 percent for the year and even more than that for the quarter. Our strategic investments are building better momentum as our execution improves and as the economic growth begins to emerge in the state of Florida, so we are going to continue to invest as we bring down our legacy cost structure.

Let me talk for a minute about our strategic investments. The world we live in is changing as rapid digital transformation begins to redefine convenience in the minds of our customers. This is happening in just about every industry. The implications on the legacy community bank business model, we think, are quite profound. Now don’t get me wrong, customer needs haven’t really changed at all, but the way we serve our customers as we meet those needs much change, so we’re in the process of transforming our business model. As you know, one of our strategic bets is our Accelerate business platform. This new channel delivers a unique customer experience to small and midsize commercial customers by improving our speed to deliver by utilizing our full featured digital business banking product suite for every banking service we deliver. We are building new customers and new markets with this new distribution platform across Florida. Since the beginning of the year, Accelerate has been a major contributor to our lending growth, and our pipelines suggest we are going to see further growth in the months ahead.

- 2 -

Another series of strategic investments are underway in our retail business line, our community banking division. In just one year, we have improved and increased significantly our digital product offerings and dramatically grown digital customer engagement. Personal and business mobile users are up 81 percent over the past year. We also recently rolled out 24/7 local customer support in our call center, and we announced recently totally-free ATM access at more than 1,000 Publix supermarket locations across the state of Florida. This summer new customer growth in our community banking division is up measurably over last summer, and frankly running counter to our typical seasonal trends as our associates build better momentum and as new marketing and sales management processes have been introduced.

As noted in our announcement last night, over the past couple of quarters, we have been begun to make new investments into improved marketing and customer data analytics. This is another strategic bet designed to support the new business model we are developing. Improvements in these areas will not only help us drive revenue growth, but also help us replace legacy overhead structures with more efficient, more customer-centric processes at a lower cost.

So I’ve mentioned a few of the strategic investments we are making. As I mentioned at the outset, they support our effort to transform the community bank business model and improve performance, and we will soon move forward with a meaningful accretive transaction that helps us move even faster.

So at this point, we will pause for a few questions and turn the call back over to our operator.

Operator: Thank you. We will now begin the question-and-answer session. If you do have a question, press star, then one, on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. There will be a delay before the first question is announced. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, press star then one on your touchtone phone.

We do have a question from Michael Rose from Raymond James.

Michael Rose: Hey, good morning, guys. How are you?

Dennis S. Hudson, III: Good morning.

Michael Rose: Just wanted to get a little color on the additional cost savings. You mentioned that it’s primarily branch consolidations. How many branches do you expect to consolidate? Can you give us any details on where these branches are? Maybe they’re in closer proximity to some other branches that are underperforming; and if you can give us some color on some of the additional costs that will come out associated with this new announcement.

- 3 -

Dennis S. Hudson, III: Well most of the costs indeed are out of branch consolidations. We haven’t yet started to announce this, but we will. They would represent some of our lower performing offices and many of them are in markets that we are going to evolve forward post-merger with the BankFIRST merger. So it’s kind of a combination all over the market of some of our lower performing offices. And again, we haven’t gotten to the point where we are ready to release the exact names of those offices, and I think it involves over time, Bill…

William R. Hahl: Five.

Dennis S. Hudson, III: …five offices.

Michael Rose: Okay, that’s helpful. And then on the commercial pipeline, obviously pretty good advancement this quarter. What drove that? Was it any particular market? Was there a specific focus by you all in any certain categories or geographies that resulted in that increase, and should we expect that to continue to grow?

Dennis S. Hudson, III: Yeah, I’ll let Chuck Cross add a few comments in terms of where some of that growth is coming from.

Charles K. Cross, Jr.: Yeah, I think it’s a combination of the commercial lending teams being in place for a good period of time and also our focus with those bankers on lead generation. They are just out in the market a lot more than we have all been in a long time.

Dennis S. Hudson, III: I would say that a good amount of the volume is coming from all over the market. We are seeing very even performance across our footprint. Obviously, some of the metro areas to the south, in South Florida and even in Orlando, we are seeing better volume coming out of those markets. They are actually I would say, Chuck, beginning to convert back into growth mode now at this point in terms of the market.

Charles K. Cross, Jr.: Correct.

Dennis S. Hudson, III: Yep.

Michael Rose: Okay, and then just one final housekeeping question. You recognized some merger-related costs this quarter. Just remind us again, if you can, how much more in additional merger-related expenses you expect to incur. Thanks.

Dennis S. Hudson, III: I think in the announcement we had it was 6 million…

William R. Hahl: Right.

Dennis S. Hudson, III: …that we announced and so…

- 4 -

William R. Hahl: 5.5/6.

Dennis S. Hudson, III: …5.5/6 million. So we are beginning to basically eat into that number between now and the end of the year.

Michael Rose: And then you all have another 4 million in the fourth quarter from the new initiatives?

Dennis S. Hudson, III: That’s right.

Michael Rose: Okay great. Thanks for taking my questions.

Operator: Once again, if you do have a question, press star, then one, on your touchtone phone.

And we have a question from Christopher Marinac from FIG Partners.

Christopher Marinac: Thanks. Good morning, Denny, Bill, and others. I wanted to ask about the Accelerate initiative, sort of where that stands in terms of its loan generation, and how you think that will evolve in future quarters.

Charles K. Cross, Jr.: This is Chuck Cross. The Accelerate program is mainly in the metropolitan areas and, as Denny said before, that’s where we are seeing growth in those markets and we are taking part of that growth. We see nice acceptance from those markets and we see it continuing to grow in the future.

Dennis S. Hudson, III: I would say kind of where we are in the evolution of that channel: we were in startup mode a year ago, still acquiring talent, still building out the locations and so forth, but primarily focused on building talent. You flip forward to today, between a year ago and today, we have done a much better job of sales management with the talent we have, and we continue to add talent to the teams, but it’s more about refining the model. As we look ahead over the next year, I think we move to what we call internally the 2.0 model, where we have much better support from our data analytics folks helping us with better targeting and lead generation, which is going to be quite helpful.

I would say the other thing happening, Chris, is we – now that our core markets are improving and we are seeing much better business conditions in some of our legacy markets – we are also stepping up and we will have some announcements probably next quarter on what we are doing to generate small business activity in some of our retail branches as well. That’s beginning to produce some nice results for us. So as to where are we in this evolution of Accelerate: we are now at a more sustainable place, we think, where we will continue to see new business developed out of that channel on a more consistent basis over the coming quarters; and again, a lot more work to do in our retail offices with small business as well.

Christopher Marinac: Okay, thanks. That’s helpful. And I guess if we look at the total dollar amount of loan growth, Denny, is Accelerate a meaningful part of that or still just a small contributor to the net dollars?

- 5 -

Dennis S. Hudson, III: It’s meaningful.

Charles K. Cross, Jr.: It’s meaningful.

Dennis S. Hudson, III: Yeah, right. Our markets, our older legacy markets are much thinner and the business activity has been a little slower to return, although it is definitely returning now. A year ago I couldn’t have said that. Today we are seeing much better borrower conditions and expansions starting to happen and so forth, but those metro markets have been very important for us over the past year; and as we look ahead, they will continue to be important for us. As we look in Orlando, we think the acquisition that will close right at the beginning of October really moves us much further down the road in that market. It gives us some great branch coverage across the entire footprint to supplement what we already have going there, and it dramatically increases our presence in the market to the point where we become one of the top leading community players in the market. So we are very excited about the impact that the acquisition has on us. As I mentioned at the outset, BankFIRST has a great production team, small business and medium-sized business lenders just like our guys, and when you put the two together, we are not looking at doing anything there in terms of costs. We just see nothing but opportunity as we put the two teams together and bring it forward in that very, very important and vibrant market. Orlando market is growing very nicely now, and we see a lot of positive opportunity there for us over the next year.

Christopher Marinac: And then, Denny, one last one just on acquisitions. Given the fast approval that you are seeing on BankFIRST, is it possible to consider another acquisition in 2015?

Dennis S. Hudson, III: Yeah, we think it is. We think it is. I think it’s important for us to get our underlying core earnings moving up, and that’s obviously a really important thing for us to do between now and the end of the year.

Christopher Marinac: Great. Thanks for all the feedback here.

Dennis S. Hudson, III: Yep.

Operator: And we have a question from Scott Valentin from FBR & Company.

Scott Valentin: Good morning, and thanks for taking my question. Just looking at the margin, it seems to have stabilized — call it between 3.05 and 3.10. Just wondering if that's kind of the outlook going forward? I noticed that loan yields were down a little bit linked-quarter, but it seems like maybe origination loan yields are getting close to portfolio loan yields.

Dennis S. Hudson, III: Yeah, I would say that’s true and the margin improvement we saw this quarter was definitely for the reasons you just stated. I think the big headline though is we saw over a half million dollar growth in net interest income from the first quarter; and again we are seeing better, more sustainable, we think, volume and growth there that will continue to push, we think, that number up. When you look at our margin back over the five quarters, it had pretty consistent performance. We are beginning to see now some improvement.

- 6 -

Any other comments on pricing, Chuck?

Charles K. Cross, Jr.: Good.

William R. Hahl: I think deposit mix is the other thing that has been helpful over the 12 month period in bringing down cost and supporting the margin. And as we continue to improve our loan production overall, which really emerged nicely both in the first and second quarters here this year, that’s what's supporting it. And you’re correct that our add-on rates now on the portfolio are just about where we’re at.

Dennis S. Hudson, III: The big driver to that change is loan mix. If you look back historically, the loan growth we were producing two years ago was primarily in the area of residential loans, and most of what we put in the portfolio were adjustable rate loans with relatively low yields compared to portfolio. So it was a sort of a struggling period where the only loan growth we could find was in the retail side, primarily in the residential mortgage area. We now, as you well know, have successfully begun to grow much more rapidly our commercial focus, and so we are now seeing that loan mix begin to shift back away from residential into commercial. The yields are better. Finally I’d note that this acquisition that we’re going to close brings with it a much more favorable mix of loans. When we plug that into the equation, we see further accretion in loan yield; and a lot of that is driven by an equally valuable, if not more valuable, deposit portfolio with even accretion in DDA mix and the like. So the whole mix part of the equation accounts for our extraordinarily low interest margin that we have today and have had historically over the last couple of years. I hope I’ve given you some flavor and color in terms of why, as we move that loan mix in the right direction, we believe over time we will see modest growth in the margin. And then again this acquisition couldn't be coming at a better time for us, pushing our margins up even further because of the more favorable mix of loans and equally favorable mix of deposits.

Scott Valentin: Okay, that color is very helpful, and then just one follow-up question. In the table on loan growth, it shows that the commercial pipeline is up pretty substantially year-over-year from about 47 million to 58 million, but the commercial loans closed is down. I didn't know if that's just normal business variability or anything happened in the second quarter of '13 versus second quarter '14 that would account for the drop in commercial loans closed.

Dennis S. Hudson, III: No, it’s just kind of normal variability whether something gets closed at the end of the month or end of the quarter, or two weeks into the next quarter.

Scott Valentin: Okay, great. Thanks very much.

Dennis S. Hudson, III: Sure.

Operator: Once again, if you do have a question, press star, then one, on your touchtone phone. I‘m showing no further questions at this time.

Dennis S. Hudson, III: Great. Thank you very much for attending our call today and we look forward to talking with you again next quarter and reporting further progress. Thanks.

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Operator: Thank you, ladies and gentlemen. That concludes today’s call. Thank you for participating. You may all disconnect at this time.

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Exhibit 99.3

Second Quarter 2014 July 29, 2014

2 Cautionary Notice Regarding Forward - Looking Statements This press release contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 , including, without limitation, statements about future financial and operating results, ability to realized deferred tax assets, 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, tax and regulatory changes ; changes in accounting policies, rules and practices ; the risks of changes in interest rates on the level and composition of deposits, loan demand, liquidity 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 , 2013 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 .

3 Q2 2014 Financial and Strategic Highlights Financial Highlights • Total revenues up $842 thousand linked quarter or over 15% annualized • Average loans outstanding increased $30.6 million linked quarter or over 9% annualized • Adjusted net income up 18% linked quarter* • Asset quality improvement results in $1.4 million provision for loan loss recapture Strategic Highlights • Completed implementation of $1.9 million in annualized expense reductions in Q2, $3.4 million annualized year to date • Announced additional $1.8 million in annualized core expense savings implemented in Q4 for legacy cost reductions (primarily branch consolidations) • Reinvestment of $748 thousand year to date in new customer acquisition strategies (digital delivery and marketing/data analytics) * Non - GAAP measure, excludes merger related legal and professional fees and other non core expenses (See Appendix for reconcilia tion to GAAP)

4 Consistent Loan Growth In All Portfolios • Total loans increased 5% year over year to $1.3 billion • Commercial originations of $ 53 million in Q2, $ 16 million higher than Q1 • Residential production of $61 million, a 54% increase over Q1 • Average Commercial loan size of $524 thousand originated in 2014, showing discipline in building diversification 604 598 632 637 653 662 664 672 675 682 2Q13 3Q13 4Q13 1Q14 2Q14 Total Loans ............................................................................................................................. ... ............. ($ in millions) Commercial Consumer $1,266 $1,304 $1,312 $1,263 $1,335

5 Consistent Growth In Low Cost Deposits • A verage noninterest bearing demand deposits were up $50 million, or 11 % compared with prior year • Total average deposits increased $19 million linked quarter • Average noninterest bearing demand deposits were up 21% linked quarter annualized • Non - interest bearing and low - cost deposits increased to 86% of total average deposits 456 455 463 481 506 981 969 1,008 1,035 1,041 302 289 283 270 259 2Q13 3Q13 4Q13 1Q14 2Q14 Average Deposit Balances ............................................................................................................................. ... .......... ($ in millions) Non-Interest Bearing Low Cost Deposits Time Deposits $1,739 $1,752 $1,787 $1,714 $1,806

6 Funding Costs Continue To Decline • Cost of funding continues to approach zero • Improved deposit mix lowers total cost of deposits by 3 bps compared to Q2 2013 • Ending noninterest bearing demand deposits increased to 28% of total deposits 16 15 14 14 13 36 36 35 33 33 2Q13 3Q13 4Q13 1Q14 2Q14 Funding Costs ................................................................................................... (in bps) Deposit Costs Interest-Bearing Liabilities

7 Net Interest Margin Improves By 3 Bps, While Net Interest Income Improves Significantly • Net interest income increased $502 thousand linked quarter • Net interest margin improves 3 basis points from Q1 • Average loan outstandings up $31 million linked quarter or 9% annualized $16,172 $16,872* $16,336 $16,277 $16,779 3.12% 3.25%* 3.08% 3.07% 3.10% Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Net Interest Income and Net Interest Margin ……………………………................................................................................... Net Interest Income Net Interest Margin * Includes $505 thousand recovery of non - accrual loan interest

8 Non - Interest Income • Non - interest income increased $338 thousand from Q1, or 6% • Interchange fees were up $111 thousand, or 8% linked quarter • Improved sales in mortgage banking resulted in a $194 thousand or 29% increase in mortgage banking fees from Q1 1,641 1,741 1,778 1,507 1,484 1,256 1,075 728 661 855 1,038 1,050 1,154 1,050 1,113 419 283 215 254 340 1,388 1,358 1,394 1,403 1,514 594 580 697 683 590 2Q13 3Q13 4Q13 1Q14 2Q14 Non - Interest Income ............................................................................................................................. ... ............. ($ in thousands) Service Charges on Deposits Mortgage Banking Fees Wealth Management Income Marine Finance Interchange Income Other $6,336 $5,966 $5,558 $6,087 $5,896

9 Non - Interest Expense* • Higher commissions (salaries and benefits) from increased mortgage banking production and brokerage revenue in Q2 • Higher than expected healthcare claims (salaries and wages) in Q2 expected to slow in second half of 2014, in line with prior year • Investment of $748 thousand year to date in new customer acquisition strategies (marketing and salaries and wages) 9,715 9,246 9,645 9,594 9,668 1,631 1,657 1,586 1,695 1,811 2,671 2,747 2,746 2,702 2,798 685 456 749 813 675 949 874 839 935 924 720 713 451 386 411 2,709 2,398 2,610 2,259 2,513 2Q13 3Q13 4Q13 1Q14 2Q14 Core Operating Expenses ............................................................................................................................. ... ............. ($ in thousands) Salaries and Benefits Data Processing Cost Occupancy / Telephone Marketing Legal and Professional FDIC Other $18,091 $18,626 $19,080 $18,384 $18,800 * Non - GAAP measure, excludes merger related legal and professional fees and other non core expenses (See Appendix for reconcilia tion to GAAP)

10 Non - Interest Expense* • Implemented Cost reductions totaling $1.9 million in Q2 (only partially realized) • Higher commissions from increased mortgage banking production and brokerage revenue combined with higher healthcare claims drove increase in core operating expense in Q2 $19,080 $18,091 $18,626 $18,384 $18,800 517 507 519 514 490 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Core Operating Expenses and FTEs ……………………………................................................................................... Core Operating Expense FTEs * Non - GAAP measure, excludes merger related legal and professional fees and other non core expenses (See Appendix for reconcilia tion to GAAP)

11 Asset Quality Improvement • Net recoveries of $112 thousand in Q2 • NPLs have declined 35% year over year • Loan loss provision reversal of $1.4 million in Q2 • Nonperforming assets to total assets declined to 1.2%, compared to 2.0% a year ago. $33,266 $28,724 $27,672 $26,220 $21,745 60.36% 71.08% 72.52% 74.26% 83.42% Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 NPLs Coverage Ratio NPLs and Coverage Ratio $2,027 $842 $838 $(139) $(112) 0.64% 0.26% 0.26% - 0.04% - 0.03% Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 NCOs (Recoveries) NCO Ratio Net Charge - offs and Ratio

12 2014 Initiatives Building Shareholder Value • Successful integration of merger agreement with The BANKshares , Inc. • Continued reduction of legacy costs and operational expense • Prudent investment of balance sheet liquidity • Focus on customer acquisition and diversified lending Growing Our Franchise • Enhance customer experience through reinvestment in branch network • Leverage investments in marketing and data analytics

13 Appendix

14 Net Income - GAAP to Non - GAAP Reconciliation: Presented below is net income excluding adjustments for merger related legal and professional fees and other non core expenses. The Company believes that these results of operations are a more meaningful depiction of the underlying fundamentals of its business and overall performance. (1) Non - GAAP Measure (Dollars in thousands) Second Quarter 2014 First Quarter 2014 Fourth Quarter 2013 Third Quarter 2013 Second Quarter 2013 Net Income Available to Common Shareholders (GAAP) $1,918 $2,299 $588 $44,204 $2,017 Tax benefit related to deferred tax asset recovery (42,993) Severance 181 212 0 24 10 Legal and professional fees for acquisition and expense initiatives 1,348 6 0 0 0 Security losses (gains) 0 (17) 0 (280) (114) Miscellaneous losses 144 0 190 0 0 Recovery of prior legal fees 0 0 (350) 0 (650) Recovery of non-accrual loan interest 0 0 0 (505) 0 Net loss on OREO and repossessed assets 92 53 0 229 493 Asset dispositions expense 118 128 180 159 111 Effective tax rate on adjustments (811) (148) (8) 144 - Adjusted Net Income (1) $2,990 $2,533 $600 $982 $1,867 Adjusted Earnings per diluted share (1) $0.12 $0.10 $0.03 $0.05 $0.10 Average shares outstanding 25,998 25,657 21,558 19,098 18,936

15 Non - Interest Expense - GAAP to Non - GAAP Reconciliation: Presented below are non - interest expenses excluding adjustments for merger related legal and professional fees and other non core expenses. The Company believes that these results of operations are a more meaningful depiction of the underlying fundamentals of its business and overall performance. (Dollars in thousands) Second Quarter 2014 First Quarter 2014 Fourth Quarter 2013 Third Quarter 2013 Second Quarter 2013 Noninterest Expense: Salaries and wages $7,587 $7,412 $8,077 $7,533 $7,892 Employee benefits 2,081 2,182 1,568 1,713 1,823 Outsourced data processing costs 1,811 1,695 1,586 1,657 1,631 Telephone / data lines 306 293 325 318 325 Occupancy expense 1,888 1,838 1,824 1,824 1,775 Furniture and equipment expense 604 571 597 605 571 Marketing expense 675 813 749 456 685 Legal and professional fees 924 935 839 874 949 FDIC assessments 411 386 451 713 720 Amortization of intangibles 196 196 196 195 197 Other 2,317 2,063 2,414 2,203 2,512 Total Core Operating Expense 18,800 18,384 18,626 18,091 19,080 Severance and organizational changes 181 212 0 24 10 Legal and professional fees for acquisition and expense initiatives 1,348 6 0 0 0 Miscellaneous losses 144 0 190 0 0 Recovery of prior legal fees 0 0 (350) 0 (650) Net loss on OREO and repossessed assets 92 53 0 229 493 Asset dispositions expense 118 128 180 159 111 Total $20,683 $18,789 $18,646 $18,503 $19,044