Seacoast Banking Corporation of Florida

NASDAQ:SBCF

Earnings Call Analysis

Strong Earnings, Loan Growth, and Expense Management

Seacoast Banking reported a solid second quarter with net income of $30.2 million, up from previous quarters. The company has successfully reduced noninterest expenses by 10% year-over-year. Loan growth was modest at 2.4% annually but is expected to rise to mid-single digits next quarter. Despite higher deposit costs, net interest margin and income are projected to improve in the latter half of 2024. The allowance for credit losses remains robust, offering substantial loss absorption capacity. Seacoast continues to grow its diverse deposits and strong capital position, focusing on becoming Florida’s leading regional bank.

Strong Financial Performance in Q2 2024

Seacoast Banking Corporation reported a solid net income of $30.2 million, or $0.36 per share for the second quarter of 2024. This represents a slight improvement over prior quarters, supported by disciplined expense management. Noninterest expenses decreased by 10% compared to the same quarter last year, showcasing effective cost-control measures that have resulted in a reduction of approximately $9 million per quarter.

Growing Revenue Streams

The growth of noninterest income is notable, which increased by $2 million quarter-over-quarter to reach $22.2 million. Contributions were strong from service charges associated with the expanding commercial treasury management offerings, along with wealth management and insurance agency income. This diversification of revenue sources indicates a robust financial structure.

Improved Loan Pipelines and Growth Outlook

Seacoast has reported a 2.4% annualized growth rate in loans, reaching a notably strong $744 million in late-stage loan pipelines heading into Q3. Management expects this trend to continue, guiding for mid-single-digit growth in the coming quarter. This increase is powered by new customer acquisitions, largely attributed to investments in talent and marketing over the past two years.

Net Interest Income—A Turning Point

Despite a slight decline in net interest income in Q2, management believes they have reached an inflection point. Forward-looking assessments suggest a growth trajectory for both net interest income and net interest margin. Specific guidance includes expectations for a 125 basis-point rate cut in November, which could further enhance profitability moving into 2025.

Solid Asset Quality with Robust Reserves

The company's asset quality remains strong, with a current allowance for credit losses standing at $141.6 million—1.41% of total loans. Nonperforming loans decreased to 0.6% of total loans, reflecting effective management of credit risk. Additionally, the significant reserve for potential losses ensures that the company is well-positioned to absorb economic shocks.

Stabilizing Deposit Costs

Total deposits grew by $100 million, and the cost of deposits has begun to stabilize, increasing only to 2.31% during the quarter, compared to prior spikes. This stabilization is essential for maintaining net interest margins as the business navigates through variable interest rate environments. Looking ahead, the strategy will focus on gathering core deposits while continuing to capture market share.

Commitment to Shareholder Value

The company remains focused on enhancing shareholder value, as indicated by the increase in tangible book value per share to $15.41. Seacoast's capital positions are strong, with a Tier 1 capital ratio of 14.8%, reinforcing its commitment to maintaining a fortress balance sheet.

Future Growth Strategies

Moving forward, Seacoast will emphasize on maintaining a conservative yet proactive balance sheet approach. The management’s focus on organic growth paired with optimized capital allocation positions the bank favorably for acquisitions in the future while it seeks to enhance its decision-making around loan portfolios and securities.

Conclusion: A Positive Trajectory Ahead

Overall, Seacoast Banking Corporation appears to be on a positive trajectory, with strong loan growth momentum, a focus on efficient operations, and a stable outlook for profitability in the coming quarters. The management's proactive strategies align well with market opportunities, reinforcing their position as a leader in the Florida banking landscape.

Earnings Call Transcript 2024-Q2

[Operator]

Welcome to Seacoast Banking Corporation's Second Quarter 2024 Earnings Conference Call. My name is Pam, and I will be your operator. Before we begin, I have been asked to direct your attention to the statement at the end of the company's press release regarding forward-looking statements. Seacoast will be discussing issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act, and its comments today are intended to be covered within the meaning of that act. Please note that this conference is being recorded.



I will now turn the call over to Chuck Shaffer, Chairman and CEO of Seacoast Bank. Mr. Shaffer, you may begin.

[Charles Shaffer, executive]

Thank you, Pam, and good morning, everyone. As we go through our presentation, we'll be referring to the second quarter earnings slide deck, which is available at seacoastbanking.com. I'm here today with Tracey Dexter, Chief Financial Officer; Michael Young, Treasurer and Director of Investor Relations; and James Stallings, Chief Credit Officer.



The Seacoast team had a strong quarter with good earnings performance and continued strong customer acquisition. Our investments in talent and marketing paid off with a 60% increase in commercial loan originations from the previous quarter and a record $744 million late-stage pipeline entering Q3. As we anticipated on our comments last quarter, we saw low single-digit loan growth in the second quarter at 2.4% annualized, and we expect production to increase in Q3, which will boost net interest income and the net interest margin. Tracey will provide more details on this shortly.



We've been focused on increasing noninterest income and have seen improved performance in wealth management fees, service charges on deposits and insurance agency revenue in each of the past 4 quarters. Our efforts to reduce expenses have also been successful with adjusted noninterest expenses declining sequentially for the past 4 quarters, approximately $9 million per quarter lower than a year ago.



During the quarter, we worked on lowering our cost of deposits by reducing offer grades, and we saw our cost of deposits begin to stabilize in May. And looking at our asset quality, we continue to maintain strong performance. Charge-offs were slightly higher this quarter at approximately 40 basis points annualized, mainly due to a limited number of loans, each of which were previously reserved for, which decreased the ACL upon charge-off.



While classified and criticized increased slightly from the prior quarter, nonperforming loans declined by $17 million. Our ACL stands at $142 million, equal to 1.41% of total loans and including the reserve for unused commitments. This ratio moves to 1.46% of total loans, positioning us strongly amongst our peer group. And additionally, we have another $151 million of purchase discount.



Our balance sheet puts us in great position compared to peers, allowing us to navigate any challenges [ this cycle ] may present. Overall, it was a solid quarter, generally in line with the previous guidance across all areas. As we stated in previous quarters, we believe we reached an inflection point in net interest income and in the second -- reached an inflection point in net interest income in the second quarter and expect growth in net interest income and net interest margin as we enter the back half of 2024. We are committed to maintaining our conservative balance sheet principles to ensure long-term success, and we remain steadfast in our goal of establishing Seacoast as the leading player in Florida.



I'll now pass the call to Tracey to review our financial results. Tracey?

[Tracey Dexter, executive]

Thank you, Chuck. Good morning, everyone. Directing your attention to second quarter results, beginning with Slide 4. Seacoast reported net income of $30.2 million or $0.36 per share in the second quarter. As Chuck mentioned, we're seeing the benefit of recent expense reduction actions, and as a result, noninterest expense is down 10% compared to the prior year quarter. The pace of increase in cost of deposits slowed during the quarter and was flat in May and June.



Pretax pre-provision earnings on an adjusted basis increased $2 million quarter-over-quarter, benefiting from growing revenue sources, including wealth, treasury management and insurance and well-controlled expenses. Our loan pipelines have grown meaningfully, and we continue to see stable credit trends. Tangible book value per share increased to $15.41 and our capital position continues to be very strong.



Seacoast's Tier 1 capital ratio is 14.8%, and the ratio of tangible common equity to tangible assets is 9.3%. Also notable, if all held to maturity securities were presented at fair value, the TCE to TA ratio would still be a strong 8.6%. We also repurchased nearly 40,000 shares at just over $22 on price dips during the quarter.



Turning to Slide 5. Net interest income declined modestly during the quarter with higher deposit costs and growth in deposit balances, partially offset by higher yields on loans and securities. Core net interest margin contracted 4 basis points to 2.87%. In the securities portfolio, yields increased 22 basis points to 3.69%, benefiting from recent purchases. Loan yields, excluding accretion, increased 4 basis points to 5.52%. Accretion of purchase discounts on acquired loans was lower by $0.4 million compared to the prior quarter. The cost of deposits increased to 2.31%, with the exit rate flat month-over-month at 2.33%.



Looking ahead, we expect that the second quarter was the trough for net interest income, and we'll see growth in both net interest income and the net interest margin in the third quarter, driven by higher yields on loans and stabilizing deposit costs. Our rate assumptions are unchanged and include 125 basis point rate cut in November.



Moving to Slide 6. Noninterest income, excluding securities activity, increased $2 million in the second quarter to $22.2 million. Service charges increased with continued expansion of our commercial treasury management offerings and new customer acquisition. Wealth and insurance agency income continue to grow. In the BOLI portfolio, we restructured policies to capture higher rates, resulting in higher income, which will continue into future periods. Other income was higher by $0.7 million, including a gain on sale of one nonperforming commercial real estate loans. Looking ahead, we continue to focus on growing noninterest income, and we expect third quarter noninterest income in the range from $21 million to $22 million.



Moving to Slide 7. Assets under management have increased 12% year-to-date to a record $1.9 billion and have increased at a compound annual growth rate of 27% in the last 5 years. Wealth Management revenues during the quarter increased to $3.8 million, up 6% from the prior quarter and 14% from the prior year quarter. Our family office style offering continues to resonate and internal referrals are a significant contributor, generating strong returns for the franchise and deepening relationships with our customers.



Moving to Slide 8. Noninterest expense for the quarter was $82.5 million, lower than the range of guidance we provided last quarter. Recent expense reduction initiatives are benefiting nearly every category. Outside of the impact of severance-related charges in the first quarter, salaries and wages increased $0.7 million, including annual merit increases and annual stock award grants. Investments in growth-focused talent will also continue to be a priority. We saw a typical seasonal increase in employee benefits and payroll taxes in the first quarter, leading to a comparative decline in the second quarter.



In outsourced data processing and occupancy costs, we incurred onetime charges early in the first quarter associated with consolidation activities, leading to a comparative decline in expense in these categories in the second quarter. Our planned investments in branding and in marketing campaigns across the state led to higher marketing expenses. Other expenses were lower across several categories and the efficiency ratio improved to 60.2%. Discipline around expenses will continue to be a focus. And in the third quarter, we expect noninterest expense to be between $84 million and $85 million.



Turning to Slide 9. Loan outstandings increased at an annualized rate of 2.4%, and the pipeline has grown 46% to $834 million. Average loan yields, excluding accretion on acquired loans increased 4 basis points to 5.52%. The pipeline is very strong. And looking forward, we expect the pace of loan growth to continue to increase and expect mid-single-digit growth in the coming quarter.



Turning to Slide 10. Portfolio diversification in terms of asset mix, industry and loan types has been a critical element of the company's lending strategy. Exposure is broadly distributed, and we continue to be vigilant in maintaining our disciplined, conservative credit culture. Nonowner-occupied commercial real estate loans represent 34% of all loans and are distributed across industries and collateral types. As we have for many years, we consistently managed our portfolio to keep construction and land development loans and commercial real estate loans well below regulatory guidance. These measures are significantly below the peer group at 34% and 222% of consolidated risk-based capital, respectively. We've managed our loan portfolio with diverse distribution across categories and retaining granularity to manage risk.



Moving on to credit topics on Slide 11. The allowance for credit losses totaled $141.6 million or 1.41% of total loans compared to 1.47% in the prior quarter. A small number of individually evaluated credits were charged off during the quarter, resolving previously established specific reserves. The allowance for credit losses, combined with the $151 million remaining unrecognized discount on acquired loans, totaled $293 million or 2.9% of total loans that's available to cover potential losses, providing substantial loss absorption capacity.



On Slide 12, providing a longer-term view of our stable asset quality trends, recall that the period presented includes 8 separate bank acquisitions and a near doubling of asset size. The stability of our credit experience during that period reflects the consistently applied discipline of our credit culture.



Moving to Slide 13, looking at quarterly trends in credit metrics. Our credit metrics remained strong. Nonperforming loans declined to 0.6% of total loans with a number of nonaccruals resolved either through charge-offs, sale or being paid off. Accruing past due [ loans ] and criticized and classified loans each increased slightly as a percentage of total loans, but remain low.



Moving to Slide 14 and the investment securities portfolio. The average yield on securities has benefited from purchases in recent quarters at higher yields with the portfolio yield increasing during the second quarter by 22 basis points to 3.69%. Changes in the rate environment, negatively impacted portfolio value and as a result, the overall unrealized loss position, increased by $6 million.



Turning to Slide 15 and the deposit portfolio. Total deposits increased by $100 million. The cost of deposits increased this quarter to 2.31%, a slower pace of increase than in previous periods, consistent with our expectations. In fact, in June, we saw no increase from the prior month at 2.33%. Looking forward, we expect continued growth in core deposits and stabilization of deposit costs, and we remain very encouraged about the continued activity and focus across the franchise on deposit gathering.



On Slide 16, Seacoast continues to benefit from a diverse deposit base, customer transaction accounts represent 50% of total deposits, which continues to highlight our long-standing relationship-focused approach. Our customers are highly engaged and have a long history with us and low average balances reflect the granular relationship nature of our franchise.



And finally, on Slide 17, our capital position continues to be very strong, and we're committed to maintaining our fortress balance sheet. Tangible book value per share increased to $15.41 and the ratio of tangible common equity to tangible assets remains exceptionally strong at 9.3%. Our risk-based and Tier 1 capital ratios are among the highest in the industry. In summary, we remain steadfastly committed to driving shareholder value and our consistent, disciplined expense management positions us well as we continue to build Florida's leading regional bank.



Chuck, I'll turn the call back to you.

[Charles Shaffer, executive]

Thank you, Tracey. All right. Pam, I think we're ready for Q&A.

[Operator]

[Operator Instructions] Your first question comes from the line of David Feaster of Raymond James.

[David Feaster, analyst]

Can you hear me -- can you hear me now? Good morning, everybody. Sorry about that. Great to see the inflection in loan growth. And just given the increase in pipeline, it seems like this trajectory is structurally improving. And it sounds like the majority of it you gain in share from the new hires that you stride. Is that the right way to think about it? And just kind of how demand broadly from your perspective? And where are you seeing the most growth opportunities today?

[Charles Shaffer, executive]

Yes, David, I think you characterized it right well. I think when you step back and look at the quarter, we saw a 2.4% annualized loan growth. That was about where we had guided to in the prior quarter. As Tracey mentioned, our guide is the mid-single digit in the coming quarter. And what's really encouraging about it, just like we talked about last quarter is the bulk of what's coming on is new customer relationships and prospects as we continue to onboard clients, primarily as a result of the investments we've made over the last 24 months in talent around the state. The demand of our current customers, I would say, remains pretty [ light ], just like you've seen across the industry. But what we're seeing is we're moving market share primarily out of large regional banks on to the Seacoast balance sheet. And so, I'm very encouraged as we talked about last quarter, and remain very encouraged, and I think the team we've built is first class and I'm super excited about where we're headed.

[David Feaster, analyst]

That's perfect. And then maybe somewhat of a difficult question to answer, because there's a lot of moving parts, but I'm curious, how do you think about the size of the balance sheet. Obviously, loan growth improvement like you just talked about, we talked about core deposit growth returning. I'm just curious, how do you think about plans for that core deposit growth? Would you expect to reduce some wholesale funding and borrowings first? Would you use securities cash flows to fund growth with the balance sheet remaining relatively stable? Is that the right way to think about it? I'm just kind of curious, how do you think about that and some of the puts and takes.

[Charles Shaffer, executive]

Michael, do you want to take that one?

[Michael Young, executive]

Yes, hey David, this is Michael. I would think about it as really our balance sheet growing at the pace of deposit growth from here. As Chuck mentioned, we've got momentum building on the lending side, on the loan side. We expect some benefits obviously, on the deposit side as well as we kind of take that market share and have faster customer acquisitions. So, we're thinking that the deposit side of the balance sheet may grow in kind of the low single digits. So a little bit of remix, but we really want to grow the balance sheet from here.

[David Feaster, analyst]

Okay. That makes sense. And then last one for me. Just given the move in rates, curious, how do you think about balance sheet optimization opportunities? And curious what you guys would be interested in. Obviously, additional restructuring could make some change, but any interest in loan sales or anything else like that? I know you sold some NPAs this quarter, but just curious what are the move in rates has changed your appetite as it opened up maybe some more doors?

[Michael Young, executive]

David, this is Michael again. I think if you step back and look at the balance sheet as a whole, we have very high levels of capital. We've done that intentionally to have a lot of ballast in turbulent times. We still have that optionality, as you mentioned, and that's a focus of ours to maintain that optionality. But there are -- continue to be opportunities with great volatility, et cetera, and changing kind of forward outlooks where we can take opportunities on the margin as you've seen us do some small portfolio restructurings and some other things along the way between BOLI and securities to optimize earnings. So those opportunities, obviously, are still out there. And as Chuck often says, we're really just very math focused and disciplined around the earn back and doing the right thing for shareholders long term.

[Charles Shaffer, executive]

And I think, David, if you step back and just look at our balance sheet, we do have and we'll have, as Mike said, there's probably some opportunities around the edges to do some of that. But importantly, we are seeing net interest income and the margin inflect at this point with some loan growth coming on the back half of the year and stabilizing deposit costs. I'm pretty encouraged about the profitability outlook for 2025.

[Operator]

Your next question comes from the line of Woody Lay of KBW.

[Wood Lay, analyst]

So how does the mix of the loan pipeline compared to historical levels? Is it more weighted to C&I than in the past?

[Charles Shaffer, executive]

Yes. I think the way to think about it, we mentioned this on the last quarter's call, the pipeline does weigh more into C&I. And so the funding level is lower than what historically we would see. Again, we're super encouraged because we're bringing on a line of credit. We're bringing on an operating company, and we're bringing with the deposits and the full relationship. But that will take 12 to 18 months to fund up as we move through the next -- into next year. But what we're building is momentum into the back half. And so the funding levels are a little lower than they've been historically, but the momentum is very strong.

[Wood Lay, analyst]

Yes. And then on the sort of average commercial loan side, you disclosed it around $750,000. Just given your -- you sort of revamped the commercial lending team, you're competing more large regionals, do you expect that average loan side to increase over time?

[Charles Shaffer, executive]

Yes, it will take some time because there's a lot of notes in that portfolio. But yes, the loans we're adding on are generally larger than that as we move forward. But there's a very large granular portfolio there that's why that average loan size is as low as it is. But looking forward, the new volume coming on is larger.

[Wood Lay, analyst]

And then on -- maybe shifting over to deposit costs. I mean, it was great to see the month-over-month trends. It sounds like you think this is a trend that can persist from here?

[Michael Young, executive]

Woody, this is Michael. Yes, I think we've taken the back book repricing actions that we discussed kind of on the last quarterly call, and you saw the stability that materialized in the quarter on both interest-bearing deposit costs and the total cost of deposits. And so I think going forward from here, we still want to grow deposits and we still want to take market share while there's a good opportunity to do so. And so, we might still expect some slight increase in the cost of deposits going forward, but at a much lower pace than what we're seeing in terms of our loan yields improving, and so that's going to lead to that margin expansion into the back half that Tracey and Chuck book referenced. So I think that's kind of the right way to think about it. Obviously, DDA mix is the most important factor, and we feel pretty good about stabilization there as well.

[Operator]

Your next question comes from the line of Brandon King of Truist Securities.

[Brandon King, analyst]

So what magnitude of margin NII in expansion are you expecting in the back half of this year?

[Michael Young, executive]

Brandon, this is Michael. Obviously, that depends somewhat on what your interest rate outlook is. We are modeling for a November first cut and only 1 cut this year, followed by greater cost kind of into 2025. But really, the balance sheet is slightly liability sensitive, but close to [ new tools ]. So, a lot of it's going to be based on kind of the active management that we do and the pace really of our loan growth versus our DDA balance sheet, whether it's going to be kind of the drivers of how much retention we get in the back half.

[Charles Shaffer, executive]

Yes. And as you know, Brandon, there's a lot -- you got an election year. There's a lot going on. We don't know where the Fed is going to go, so providing much guidance there over the long run, we'll wait and see how things play out.

[Brandon King, analyst]

Okay. I guess is it fair to assume just modest expansion. Is that the way to think about it, you're not expecting any sort of material ramp -- is that the way to think about it?

[Charles Shaffer, executive]

Yes. I think modest is probably a fair characterization. The benefit that we do have, though, is if rates decline further, we have a little more of a fixed loan book that again is stepping up into the higher rate regime. So that's really kind of the tailwind that's buffering us going forward. And that should also help us to breakthrough head lower.

[Brandon King, analyst]

Okay. And then on the credit side, with the increase in net charge-offs for the small credits, could you just remind us kind of what those credits are. And were they legacy Seacoast or the acquired credit to more [ expectation ]?

[Tracey Dexter, executive]

Brandon, so the charge off this quarter largely reflects previously reserve balances. And so it's a small number of loans. A large portion of that is the acquired portfolios that are in runoff mode, along with a small number of other specific reserves. So while the charge-offs are elevated this quarter, we do still expect a normalized level on an average basis would be around 25 basis points our year-to-date annualized charge-offs of 27 basis points.

[Brandon King, analyst]

Okay. And with the reserve, I mean, you have strong reserves with also the acquired credit discount. Is it fair to assume that's going to continue to march lower, given how high it is putting all those pieces together?

[Tracey Dexter, executive]

I think it depends. Each quarter we look at the current credit conditions, expected forward economic conditions. We assess the allowance just with the forecast scenarios. The Moody's forecast scenarios drive a lot of the quantitatively derived loss model outcomes. And of course, we also consider adjustments which may be appropriate based on metrics specific to our markets or our portfolio. We go through this comprehensive process each quarter, so the circumstances at each quarter end really drive changes in the reserve. I think it's reasonable to assume that we'll use the allowance for the purpose it was built, to cover losses as they arise. So if we do see the economic outlook improving and the portfolio conditions are supportive, we may end up with a lower coverage level than we have today.

[Operator]

[Operator Instructions] Our next question comes from the line of Stephen Scouten of Piper Sandler.

[Stephen Scouten, analyst]

I guess I know earlier you said balance sheet growth probably in line with deposit growth, but obviously year-to-date deposits have moved faster than loans. And so the loan to deposit ratio is down a bit. I mean, do you think we could see that move back to 85% range and kind of lever the balance sheet a bit more over time?

[Charles Shaffer, executive]

Michael?

[Michael Young, executive]

Hey, Stephen, this is Michael. Yeah. I think that's fair. We obviously maintain our conservative stance on capital, but also liquidity. So we don't want to move that too high. But as you can see with the building pipeline, building lending momentum, after we sort of intentionally decelerated loan growth last year due to our risk posture, I think as we move forward, you're going to see the loan growth building and probably coming in at a slightly faster pace than deposit growth, which would help us to re-lever the balance sheet, as you mentioned a little bit. But really what that's going to do is just build earnings momentum and revenue momentum.

[Stephen Scouten, analyst]

Yeah. That makes sense. That makes sense. And then just thinking about -- and I know we've talked about this in the past, but at least as of last quarter's Q, you guys still modeled to slightly asset sensitive. Has that changed appreciably or is it really more modeling and a static balance sheet versus the reality of what may play out that causes me to believe you're slightly liability sensitive.

[Charles Shaffer, executive]

Yes. I think we modeled a slightly liability sensitive. I can get with you off-line on that, Stephen. But we're basically down 100 basis points. We pick up about 1% in revenue. So that depends on if you're looking at dynamic or static. Obviously, our balance sheet has been moving pretty quickly. And so that has a pretty big impact in just our ability to manage the balance sheet is probably stronger.



So that's where, I think, really, if you zoom out and look at our balance sheet, we've got a little higher amount of fixed rate assets that should be more stable in terms of their pricing versus our liabilities that some will automatically reprice. But obviously, we would be proactively repricing downward if rates were to decline. And so that's what will give us kind of the earnings leverage into a down rate scenario.

[Stephen Scouten, analyst]

You're right. I have some reading comprehension issues this morning those up 0.7% and down 100 basis points, so apologies there. And then just last thing for me around M&A discussions. I mean, obviously, the stock is appreciably higher than it was maybe a quarter ago. The whole market is trending up. Does that help M&A conversations made with some of these smaller private banks or conversations picking up at all as of yet? And how do you think about the capital priorities today?

[Charles Shaffer, executive]

Yes. Great question. Obviously, with a higher stock price, higher multiples across the industry, that would be indicative of more opportunities for M&A. I would say from an M&A perspective, I'm very encouraged by our organic growth story. I think there's a lot of momentum inside the company. I think we are at this inflection point. So if we were to look at something, it would really have to make a lot of economic sense to kind of take us off what we're focused on. But not to say, we wouldn't do a deal, but that deal is going to have to make a lot, a lot of sense. So that's kind of where we are on it, Stephen.

[Stephen Scouten, analyst]

Great. It sounds like a perfect dynamic. Appreciate it.

[Operator]

There are no other questions. I will hand the call back over to Chuck for closing remarks.

[Charles Shaffer, executive]

All right. Awesome. Thank you all for joining us this morning. Thank you to the Seacoast team. I thought it was a very solid quarter, and looking forward to the back half of this year. And I appreciate everybody joining the call. Thank you, Pam. That will conclude.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.