Loans

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Loans

Loans

Loans held for investment are categorized into the following segments:

•Construction and land development: Loans are extended to both commercial and consumer customers which are collateralized by and for the purpose of funding land development and construction projects, including 1-4 family residential construction, multi-family property, non-farm residential property, and various commercial purpose properties where the primary source of repayment is from proceeds of the sale, refinancing or permanent financing of the property.

•Commercial real estate - owner-occupied: Loans are extended to commercial customers for the purpose of acquiring real estate to be occupied by the borrower's business. These loans are collateralized by the subject property and the repayment of these loans is largely dependent on the performance of the company occupying the property.

•Commercial real estate - non owner-occupied: Loans are extended to commercial customers for the purpose of acquiring commercial property where occupancy by the borrower is not their primary intent. These loans are viewed primarily as cash flow loans, collateralized by the subject property, and the repayment of these loans is largely dependent on rental income from the successful operation of the property.

•Residential real estate: Loans are extended to consumer customers and collateralized primarily by 1-4 family residential properties and include fixed and variable rate mortgages, home equity mortgages, and home equity lines of credit. Loans are primarily written based on conventional loan agency guidelines, including loans that exceed agency value limitations. Sources of repayment may be from the occupant of the residential property or from cash flows on rental income from the successful operation of the property.

•Commercial and financial: Loans are extended to commercial customers. The purpose of the loans can be working capital, physical asset expansion, asset acquisition or other business purposes. Loans may be collateralized by assets owned by the borrower or the borrower's business. Commercial loans are based primarily on the historical and projected cash flow of the borrower's business and secondarily on the capacity of credit enhancements, guarantees and underlying collateral provided by the borrower.

•Consumer: Loans are extended to consumer customers. The segment includes both installment loans and lines of credit which may be collateralized or non-collateralized.

•Paycheck Protection Program (“PPP”): Loans originated under a temporary program established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and extended by the Economic Aid Act. Under the terms of the program, balances may be forgiven if the borrower uses the funds in a manner consistent with the program guidelines, and repayment is guaranteed by the U.S. government.

The following tables present net loan balances by segment as of:

	December 31, 2021
(In thousands)	Portfolio Loans		Acquired Non-PCD Loans		PCD Loans		Total
Construction and land development	$	199,341	$	31,438	$	45	$	230,824
Commercial real estate - owner occupied	983,517		186,812		27,445		1,197,774
Commercial real estate - non-owner occupied	1,278,180		382,554		75,705		1,736,439
Residential real estate	1,261,306		156,957		7,091		1,425,354
Commercial and financial	968,318		84,395		16,643		1,069,356
Consumer	169,507		4,658		10		174,175
Paycheck Protection Program	69,503		21,604		—		91,107
Totals	$	4,929,672	$	868,418	$	126,939	$	5,925,029

	December 31, 2020
(In thousands)	Portfolio Loans		Acquired Non-PCD Loans		PCD Loans		Total
Construction and land development	$	216,420	$	26,250	$	2,438	$	245,108
Commercial real estate - owner occupied	854,769		247,090		39,451		1,141,310
Commercial real estate - non-owner occupied	1,043,459		323,273		29,122		1,395,854
Residential real estate	1,155,914		176,105		10,609		1,342,628
Commercial and financial	743,846		94,627		16,280		854,753
Consumer	181,797		6,660		278		188,735
Paycheck Protection Program	515,532		51,429		—		566,961
Totals	$	4,711,737	$	925,434	$	98,178	$	5,735,349

The amortized cost basis of loans at December 31, 2021 included net deferred costs of $31.0 million on non-PPP portfolio loans and net deferred fees of $2.4 million on PPP loans. At December 31, 2020, the amortized cost basis included net deferred costs of $22.6 million on non-PPP portfolio loans and net deferred fees of $9.5 million on PPP loans. At December 31, 2021, the remaining fair value adjustments on acquired loans were $23.1 million, or 2.3% of the outstanding acquired loan balances, compared to $30.2 million, or 2.9% of the acquired loan balances at December 31, 2020. These amounts are accreted into interest income over the remaining lives of the related loans on a level yield basis.

Accrued interest receivable is included within Other Assets and was $14.7 million and $25.8 million at December 31, 2021 and December 31, 2020, respectively.

Loans to directors and executive officers totaled $0.6 million and $1.1 million at December 31, 2021 and 2020, respectively. Two new loans were originated to directors or officers in 2021.

The following table presents the status of net loan balances as of December 31, 2021 and December 31, 2020. Loans on short-term payment deferral at the reporting date are reported as current. 

	December 31, 2021
(In thousands)	Current		Accruing 30-59 Days Past Due		Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Total
Portfolio Loans
Construction and land development	$	199,087	$	—	$	—	$	—	$	254	$	199,341
Commercial real estate - owner occupied	982,804		—		—		—		713		983,517
Commercial real estate - non-owner occupied	1,276,582		—		—		—		1,598		1,278,180
Residential real estate	1,248,160		3,457		143		—		9,546		1,261,306
Commercial and financial	963,828		851		41		—		3,598		968,318
Consumer	168,791		565		23		15		113		169,507
Paycheck Protection Program1	69,434		—		—		69		—		69,503
Total Portfolio Loans	4,908,686		4,873		207		84		15,822		4,929,672
Acquired Non-PCD Loans
Construction and land development	31,438		—		—		—		—		31,438
Commercial real estate - owner occupied	186,652		—		160		—		—		186,812
Commercial real estate - non-owner occupied	381,510		—		—		—		1,044		382,554
Residential real estate	154,981		182		—		—		1,794		156,957
Commercial and financial	84,180		—		40		—		175		84,395
Consumer	4,082		135		—		—		441		4,658
Paycheck Protection Program1	21,567		—		—		37		—		21,604
Total Acquired Non-PCD Loans	864,410		317		200		37		3,454		868,418
PCD Loans
Construction and land development	40		—		—		—		5		45
Commercial real estate - owner occupied	24,192		—		—		—		3,253		27,445
Commercial real estate - non-owner occupied	72,442		—		—		—		3,263		75,705
Residential real estate	5,386		—		—		—		1,705		7,091
Commercial and financial	13,547		—		—		—		3,096		16,643
Consumer	10		—		—		—		—		10
Total PCD Loans	115,617		—		—		—		11,322		126,939
Total Loans	$	5,888,713	$	5,190	$	407	$	121	$	30,598	$	5,925,029
1Paycheck Protection Program loans are not reflected as past due when forgiveness applications are being processed by the SBA. Repayment of principal and interest is fully guaranteed by the U.S. government.

	December 31, 2020
(In thousands)	Current		Accruing 30-59 Days Past Due		Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Total
Portfolio Loans
Construction and land development	$	216,262	$	—	$	—	$	—	$	158	$	216,420
Commercial real estate - owner occupied	851,222		1,076		—		—		2,471		854,769
Commercial real estate - non-owner occupied	1,041,306		—		—		—		2,153		1,043,459
Residential real estate	1,142,893		3,002		1,427		61		8,531		1,155,914
Commercial and financial	737,362		135		1,967		—		4,382		743,846
Consumer	180,879		203		138		2		575		181,797
Paycheck Protection Program	515,532		—		—		—		—		515,532
Total Portfolio Loans	4,685,456		4,416		3,532		63		18,270		4,711,737
Acquired Non-PCD Loans
Construction and land development	26,250		—		—		—		—		26,250
Commercial real estate - owner occupied	244,486		—		—		—		2,604		247,090
Commercial real estate - non-owner occupied	322,264		—		—		—		1,009		323,273
Residential real estate	171,507		1,605		104		—		2,889		176,105
Commercial and financial	93,223		216		—		—		1,188		94,627
Consumer	6,640		20		—		—		—		6,660
Paycheck Protection Program	51,429		—		—		—		—		51,429
Total Acquired Non-PCD Loans	915,799		1,841		104		—		7,690		925,434
PCD Loans
Construction and land development	2,429		—		—		—		9		2,438
Commercial real estate - owner occupied	36,345		—		—		—		3,106		39,451
Commercial real estate - non-owner occupied	24,200		—		—		—		4,922		29,122
Residential real estate	9,537		—		—		—		1,072		10,609
Commercial and financial	15,121		125		—		—		1,034		16,280
Consumer	271		—		—		—		7		278
Total PCD Loans	87,903		125		—		—		10,150		98,178
Total Loans	$	5,689,158	$	6,382	$	3,636	$	63	$	36,110	$	5,735,349

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest subsequently received on such loans is accounted for under the cost-recovery method, whereby interest income is not recognized until the loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured. The Company recognized $1.2 million, $0.9 million, and $1.3 million in interest income on nonaccrual loans during the years ended December 31, 2021, 2020, and 2019, respectively. The following tables present net balances of loans on nonaccrual status and the related allowance for credit losses, if any, as of:

	December 31, 2021
(In thousands)	Nonaccrual Loans With No Related Allowance		Nonaccrual Loans With an Allowance		Total Nonaccrual Loans		Allowance for Credit Losses
Construction and land development	$	37	$	222	$	259	$	92
Commercial real estate - owner-occupied	2,976		990		3,966		419
Commercial real estate - non-owner occupied	4,490		1,415		5,905		27
Residential real estate	12,358		687		13,045		357
Commercial and financial	2,676		4,193		6,869		2,384
Consumer	29		525		554		525
Totals	$	22,566	$	8,032	$	30,598	$	3,804

	December 31, 2020
(In thousands)	Nonaccrual Loans With No Related Allowance		Nonaccrual Loans With an Allowance		Total Nonaccrual Loans		Allowance for Credit Losses
Construction and land development	$	148	$	19	$	167	$	8
Commercial real estate - owner-occupied	7,893		288		8,181		287
Commercial real estate - non-owner occupied	5,666		2,418		8,084		1,640
Residential real estate	9,520		2,972		12,492		1,587
Commercial and financial	3,175		3,429		6,604		2,235
Consumer	222		360		582		75
Totals	$	26,624	$	9,486	$	36,110	$	5,832

Collateral-Dependent Loans

Loans are considered collateral-dependent when the repayment, based on the Company's assessment as of the reporting date, is expected to be provided substantially through the operation or sale of the underlying collateral and there are no other available and reliable sources of repayment. The following table presents collateral-dependent loans as of:

(In thousands)	December 31, 2021		December 31, 2020
Construction and land development	$	271	$	189
Commercial real estate - owner-occupied	4,706		11,992
Commercial real estate - non-owner occupied	4,923		7,285
Residential real estate	16,334		16,652
Commercial and financial	8,741		11,198
Consumer	741		586
Totals	$	35,716	$	47,902

Loans by Risk Rating

The Company utilizes an internal asset classification system as a means of identifying problem and potential problem loans. The following classifications are used to categorize loans under the internal classification system:

•Pass: Loans that are not problem loans or potential problem loans are considered to be pass-rated.

•Special Mention: Loans that do not currently expose the Company to sufficient risk to warrant classification in the Substandard or Doubtful categories, but possess weaknesses that deserve management’s close attention are deemed to be Special Mention. 

•Substandard: Loans with the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

•Substandard Impaired: Loans typically placed on nonaccrual and considered to be collateral-dependent or accruing TDRs.

•Doubtful: Loans that have all the weaknesses inherent in those classified Substandard with the added characteristic that the weakness present makes collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Some portion of the principal balance of loans classified as doubtful are likely to be charged off.

The following tables present the risk rating of loans by year of origination as of: 

	December 31, 2021
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving		Total
Construction and Land Development
Risk Ratings:
Pass	$	94,318	$	23,860	$	38,058	$	25,507	$	3,995	$	15,466	$	29,349	$	230,553
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Substandard Impaired	—		—		—		222		—		49		—		271
Doubtful	—		—		—		—		—		—		—		—
Total	94,318		23,860		38,058		25,729		3,995		15,515		29,349		230,824
Commercial real estate - owner occupied
Risk Ratings:
Pass	205,404		154,432		179,786		132,353		125,763		363,986		10,005		1,171,729
Special Mention	—		6,527		5,370		649		218		3,250		—		16,014
Substandard	—		—		—		—		3,290		1,610		—		4,900
Substandard Impaired	—		—		2,742		310		596		1,483		—		5,131
Doubtful	—		—		—		—		—		—		—		—
Total	205,404		160,959		187,898		133,312		129,867		370,329		10,005		1,197,774
Commercial real estate - non-owner occupied
Risk Ratings:
Pass	395,308		207,824		298,021		186,339		110,990		460,435		6,477		1,665,394
Special Mention	—		—		844		—		289		13,850		—		14,983
Substandard	—		4,776		3,009		23,206		1,900		17,266		—		50,157
Substandard Impaired	—		1,044		1,849		—		326		2,686		—		5,905
Doubtful	—		—		—		—		—		—		—		—
Total	395,308		213,644		303,723		209,545		113,505		494,237		6,477		1,736,439
Residential real estate
Risk Ratings:
Pass	394,547		114,364		90,566		119,836		118,556		213,950		354,439		1,406,258
Special Mention	—		—		—		70		—		1,243		532		1,845
Substandard	—		340		—		—		58		422		86		906
Substandard Impaired	—		149		724		39		4,415		8,507		2,511		16,345
Doubtful	—		—		—		—		—		—		—		—
Total	394,547		114,853		91,290		119,945		123,029		224,122		357,568		1,425,354
Commercial and financial
Risk Ratings:
Pass	340,826		180,677		97,072		68,232		39,331		56,053		246,568		1,028,759
Special Mention	530		15,587		—		237		251		84		876		17,565
Substandard	—		371		2,605		3,594		1,436		3,217		339		11,562
Substandard Impaired	—		196		4,561		3,694		1,371		1,520		128		11,470
Doubtful	—		—		—		—		—		—		—		—
Total	341,356		196,831		104,238		75,757		42,389		60,874		247,911		1,069,356

	December 31, 2021
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving		Total
Consumer
Risk Ratings:
Pass	45,063		31,342		26,194		17,300		9,979		16,019		25,418		171,315
Special Mention	—		24		431		37		167		3		1,199		1,861
Substandard	—		—		18		—		17		—		223		258
Substandard Impaired	—		—		92		23		74		118		434		741
Doubtful	—		—		—		—		—		—		—		—
Total	45,063		31,366		26,735		17,360		10,237		16,140		27,274		174,175
Paycheck Protection Program
Risk Ratings:
Pass	87,036		4,071		—		—		—		—		—		91,107
Total	87,036		4,071		—		—		—		—		—		91,107
Consolidated
Risk Ratings:
Pass	1,562,502		716,570		729,697		549,567		408,614		1,125,909		672,256		5,765,115
Special Mention	530		22,138		6,645		993		925		18,430		2,607		52,268
Substandard	—		5,487		5,632		26,800		6,701		22,515		648		67,783
Substandard Impaired	—		1,389		9,968		4,288		6,782		14,363		3,073		39,863
Doubtful	—		—		—		—		—		—		—		—
Total	$	1,563,032	$	745,584	$	751,942	$	581,648	$	423,022	$	1,181,217	$	678,584	$	5,925,029

	December 31, 2020
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving		Total
Construction and Land Development
Risk Ratings:
Pass	$	62,107	$	52,384	$	46,067	$	15,873	$	7,335	$	17,873	$	35,324	$	236,963
Special Mention	206		245		5,918		—		—		1,449		—		7,818
Substandard	—		—		—		—		—		51		—		51
Substandard Impaired	—		—		—		37		—		239		—		276
Doubtful	—		—		—		—		—		—		—		—
Total	62,313		52,629		51,985		15,910		7,335		19,612		35,324		245,108
Commercial real estate - owner occupied
Risk Ratings:
Pass	155,953		198,559		156,276		138,341		148,389		287,772		14,255		1,099,545
Special Mention	5,773		1,858		3,305		—		4,471		4,050		2		19,459
Substandard	—				—		4,709		1,955		5,508		—		12,172
Substandard Impaired	—		3,151		747		1,362		—		4,874		—		10,134
Doubtful	—		—		—		—		—		—		—		—
Total	161,726		203,568		160,328		144,412		154,815		302,204		14,257		1,141,310
Commercial real estate - non-owner occupied
Risk Ratings:
Pass	159,299		313,287		201,112		123,357		175,623		356,943		8,596		1,338,217
Special Mention	—		431		9,487		7,580		10,240		114		—		27,852

Substandard	—		—		9,709		—		8,311		3,682		—		21,702
Substandard Impaired	—		2,418		—		—		125		5,540		—		8,083
Doubtful	—		—		—		—		—		—		—		—
Total	159,299		316,136		220,308		130,937		194,299		366,279		8,596		1,395,854
Residential real estate
Risk Ratings:
Pass	96,819		144,329		204,077		205,046		160,612		159,742		350,502		1,321,127
Special Mention	—		—		33		720		—		966		479		2,198
Substandard	350		—		—		896		—		1,452		100		2,798
Substandard Impaired	109		726		1,520		1,762		715		9,671		2,002		16,505
Doubtful	—		—		—		—		—		—		—		—
Total	97,278		145,055		205,630		208,424		161,327		171,831		353,083		1,342,628
Commercial and financial
Risk Ratings:
Pass	214,774		146,511		103,769		60,782		39,692		53,758		204,304		823,590
Special Mention	71		946		965		5,612		67		635		209		8,505
Substandard	154		41		3,016		1,609		553		3,239		764		9,376
Substandard Impaired	317		4,595		3,199		2,292		2,074		704		81		13,262
Doubtful1	—		—		—		—		—		—		20		20
Total	215,316		152,093		110,949		70,295		42,386		58,336		205,378		854,753
Consumer
Risk Ratings:
Pass	46,476		43,143		30,433		18,937		21,880		9,488		15,089		185,446
Special Mention	58		27		14		41		42		21		1,854		2,057
Substandard	—		—		—		42		4		151		228		425
Substandard Impaired	7		50		193		24		329		183		21		807
Doubtful	—		—		—		—		—		—		—		—
Total	46,541		43,220		30,640		19,044		22,255		9,843		17,192		188,735
Paycheck Protection Program
Risk Ratings:
Pass	566,961		—		—		—		—		—		—		566,961
Total	566,961		—		—		—		—		—		—		566,961
Consolidated
Risk Ratings:
Pass	1,302,389		898,213		741,734		562,336		553,531		885,576		628,070		5,571,849
Special Mention	6,108		3,507		19,722		13,953		14,820		7,235		2,544		67,889
Substandard	504		41		12,725		7,256		10,823		14,083		1,092		46,524
Substandard Impaired	433		10,940		5,659		5,477		3,243		21,211		2,104		49,067
Doubtful1	—		—		—		—		—		—		20		20
Total	$	1,309,434	$	912,701	$	779,840	$	589,022	$	582,417	$	928,105	$	633,830	$	5,735,349
1Loans classified as doubtful were fully reserved as of December 31, 2020.

Loans Modified in Connection with COVID-19 Pandemic

The CARES Act, which was signed into law on March 27, 2020 and amended by the Consolidated Appropriations Act on December 27, 2020, encouraged financial institutions to practice prudent efforts to work with borrowers financially impacted by the COVID-19 pandemic by providing an option to exclude from TDR consideration certain loan modifications that might otherwise be categorized as TDRs under ASC 310-40. This option was available for modifications that were deemed to be COVID-related, where the borrower was not more than 30 days past due on December 31, 2019, and the modification was

executed between March 1, 2020 and the earlier of (i) January 1, 2022 or (ii) 60 days after the end of the COVID-19 national emergency. Federal banking regulators issued similar guidance that also allowed lenders to conclude that short-term modifications for borrowers affected by the pandemic should not be considered TDRs if the borrower was current at the time of modification. Seacoast provided financially impacted borrowers with loan accommodations, primarily consisting of payment deferrals of up to six months. At its peak on June 30, 2020, loans on deferral represented $1.1 billion, or 21% of total non-PPP loans. In the second half of 2020, the large majority of these borrowers successfully resumed making contractual payments, and the level of loans with accommodations decreased to $74.1 million, or 1% of total non-PPP loans at December 31, 2020, and to $1.2 million, or 0.02% of total non-PPP loans as of December 31, 2021.

Troubled Debt Restructured Loans

The Company’s TDR concessions granted to certain borrowers generally do not include forgiveness of principal balances, but may include interest rate reductions, an extension of the amortization period and/or converting the loan to interest only for a limited period of time. Loan modifications are not reported in calendar years after modification if the loans were modified at an interest rate equal to the yields of new loan originations with comparable risk and the loans are performing based on the terms of the restructuring agreements.

The following table presents loans that were modified in a troubled debt restructuring during the years ended:

(In thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
At December 31, 2021:
Construction and land development	—	$	—	$	—
Commercial real estate - owner-occupied	—	—		—
Commercial real estate - non owner-occupied	—	—		—
Residential real estate	5	261		261
Commercial and financial	3	457		457
Consumer	4	84		84
Totals	12	$	802	$	802
At December 31, 2020:
Construction and land development	—	$	—	$	—
Commercial real estate - owner-occupied	—	—		—
Commercial real estate - non owner-occupied
Residential real estate	2	150		150
Commercial and financial	4	437		437
Consumer	4	112		112
Totals	10	$	699	$	699
At December 31, 2019:
Construction and land development	—	$	—	$	—
Commercial real estate	2	2,166		2,166
Commercial real estate - non owner-occupied	—	—		—
Residential real estate	3	1,193		1,193
Commercial and financial	3	1,326		1,326
Consumer	1	19		19
Totals	9	$	4,704	$	4,704

The TDRs described above resulted in a specific allowance for credit losses of $0.2 million as of December 31, 2021, and $0.2 million in specific allowance for credit losses as of December 31, 2020. During the year ended December 31, 2021 there

were three defaults totaling $0.2 million on loans that had been modified in TDRs within the preceding twelve months. During the year ended December 31, 2020, there were no defaults on loans that had been modified in TDRs within the preceding twelve months. The Company considers a loan to have defaulted when it becomes 90 days or more delinquent under the modified terms, has been transferred to nonaccrual status, is charged off or has been transferred to other real estate owned. For loans measured based on the present value of expected future cash flows, $16 thousand, $0.1 million, and $0.1 million for the years ended December 31, 2021, 2020, and 2019, respectively, was included in interest income and represents the change in present value attributable to the passage of time.