Note N - Shareholders' Equity

The Company has reserved 300,000 common shares for issuance in connection with an employee stock purchase plan and 1,000,000 common shares for issuance in connection with an employee profit sharing plan. At December 31, 2017, an aggregate of 175,997 shares and 32,120 shares, respectively, have been issued as a result of employee participation in these plans.

Holders of common stock are entitled to one vote per share on all matters presented to shareholders as provided in the Company’s Articles of Incorporation. The Company implemented a dividend reinvestment plan during 2007, issuing no shares from treasury stock during 2017 and 2016.

Required Regulatory Capital

						Minimum for Capital Adequacy Purpose (1)					Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
SEACOAST BANKING CORP
(CONSOLIDATED)

At December 31, 2017:
Total Capital Ratio (to risk-weighted assets)	$	619,746		14.24	%	$	348,191		≥ 8.00	%		n/a		n/a
Tier 1 Capital Ratio (to risk-weighted assets)		592,562		13.61			261,143		≥ 6.00	%		n/a		n/a
Common Equity Tier 1 Capital (to risk-weighted assets)		523,832		12.04			195,858		≥ 4.50	%		n/a		n/a
Tier 1 Leverage Ratio (to adjusted average assets)		592,562		10.68			221,863		≥ 4.00	%		n/a		n/a
At December 31, 2016:
Total Capital Ratio (to risk-weighted assets)	$	432,058		13.25	%	$	260,790		≥ 8.00	%		n/a		n/a
Tier 1 Capital Ratio (to risk-weighted assets)		408,596		12.53			195,592		≥ 6.00	%		n/a		n/a
Common Equity Tier 1 Capital (to risk-weighted assets)		351,769		10.79			146,694		≥ 4.50	%		n/a		n/a
Tier 1 Leverage Ratio (to adjusted average assets)		408,596		9.15			178,656		≥ 4.00	%		n/a		n/a

SEACOAST NATIONAL BANK
(A WHOLLY OWNED BANK SUBSIDIARY)
At December 31, 2017:
Total Capital Ratio (to risk-weighted assets)	$	565,149		13.04	%	$	346,780		≥ 8.00	%	$	433,475		≥ 10.00	%
Tier 1 Capital Ratio (to risk-weighted assets)		537,965		12.41			260,085		≥ 6.00	%		346,780		≥ 8.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)		537,965		12.41			195,022		≥ 4.50	%		281,759		≥ 6.50	%
Tier 1 Leverage Ratio (to adjusted average assets)		537,965		9.72			221,432		≥ 4.00	%		276,791		≥ 5.00	%
At December 31, 2016:
Total Capital Ratio (to risk-weighted assets)	$	415,147		12.75	%	$	260,491		≥ 8.00	%	$	325,987		≥ 10.00	%
Tier 1 Capital Ratio (to risk-weighted assets)		391,685		12.03			195,368		≥ 6.00	%		260,790		≥ 8.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)		391,685		12.03			146,526		≥ 4.50	%		211,892		≥ 6.50	%
Tier 1 Leverage Ratio (to adjusted average assets)		391,685		8.78			178,501		≥ 4.00	%		223,320		≥ 5.00	%

(1)

Excludes capital conservation buffer of 1.250% the Company is subject to, which if not exceeded may constrain dividends, equity repurchases and compensation.

n/a - not applicable

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Under Basel III standards adopted January 1, 2015, deferred tax assets (DTAs) were substantially restricted in regulatory capital calculations, the Common Equity Tier 1 Capital calculation was created, and new minimum adequacy and well capitalized thresholds were established. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. At year-end 2017 and 2016, the most recent regulatory notifications categorize the Company as well capitalized under the regulatory frame work for prompt corrective action.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total, Tier 1 capital and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). Management believes, as of December 31, 2017, that the Company and Seacoast Bank meets all capital adequacy requirements to which it is subject. At December 31, 2017, the capital conservation buffer requisite the Company is subject to was 1.250%.

On February 21, 2017, the Company closed on its offering of 8.9 million shares of common stock, consisting of 2.7 million shares sold by the Company and 6.2 million shares sold by one of its shareholders. The Company received proceeds of $56.7 million less legal and professional fees of $1.1 million from the issuance of the 2.7 million shares of its common stock. The Company is using the net proceeds from the offering for general corporate purposes, including the acquisitions of GulfShore Bank, NorthStar Bank and Palm Beach Communities Bank in 2017 and to support organic growth. Seacoast did not receive any proceeds from the sale of its shareholder's shares. Herbert Lurie, who is a member of our board of directors is a consulting Senior Advisor to Guggenheim Securities, LLC, an underwriter of this offering. Under his consulting agreement with Guggenheim, Mr. Lurie was entitled to receive customary compensation, including in connection with our offering of common stock. Mr. Lurie recused himself from board decisions regarding this offering.