Seacoast Banking (SBCF)

Florida regional bank Seacoast Banking (NASDAQ:SBCF) announced better-than-expected revenue in Q4 CY2025, with sales up 43.6% year on year to $203.3 million. Its non-GAAP profit of $0.44 per share was 11.7% below analysts’ consensus estimates.

Company Overview

Founded during the Florida land boom of 1926 and surviving the Great Depression, Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is a financial holding company that provides commercial and retail banking, wealth management, and mortgage services throughout Florida.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Seacoast Banking competes with other regional banks operating in Florida such as First Horizon (NYSE:FHN), SouthState Corporation (NASDAQ:SSB), and Valley National Bancorp (NASDAQ:VLY), as well as larger national banks including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC) that have significant Florida operations.

Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Thankfully, Seacoast Banking’s 15.1% annualized revenue growth over the last five years was impressive. Its growth beat the average banking company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Seacoast Banking’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 7.2% over the last two years was well below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Seacoast Banking reported magnificent year-on-year revenue growth of 43.6%, and its $203.3 million of revenue beat Wall Street’s estimates by 1%.

Net interest income made up 83.3% of the company’s total revenue during the last five years, meaning Seacoast Banking barely relies on non-interest income to drive its overall growth.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Topline growth is certainly important, but the overall profitability of this growth matters for the bottom line. For banks, we look at efficiency ratio, which is non-interest expense (salaries, rent, IT, marketing, excluding interest paid out to depositors) as a percentage of total revenue.

Investors focus on efficiency ratio changes rather than absolute levels, understanding that expense structures vary by revenue mix. Counterintuitively, lower efficiency ratios indicate better performance since they represent lower costs relative to revenue.

Over the last five years, Seacoast Banking’s efficiency ratio has increased by 5.4 percentage points, going from 52.3% to 58%. Said differently, the company’s expenses have increased at a faster rate than revenue, which usually raises questions unless the company is in high-growth mode and reinvesting its profits into attractive ventures.

In Q4, Seacoast Banking’s efficiency ratio was 63.4%, falling short of analysts’ expectations by 697.7 basis points (100 basis points = 1 percentage point).

For the next 12 months, Wall Street expects Seacoast Banking to rein in some of its expenses as it anticipates an efficiency ratio of 53.4%.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Seacoast Banking’s EPS grew at a weak 2.7% compounded annual growth rate over the last five years, lower than its 15.1% annualized revenue growth. However, its efficiency ratio actually improved during this time, telling us that non-fundamental factors such as taxes affected its ultimate earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Seacoast Banking, EPS didn’t budge over the last two years, a regression from its five-year trend. We hope it can revert to earnings growth in the coming years.

In Q4, Seacoast Banking reported adjusted EPS of $0.44, down from $0.48 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Seacoast Banking’s full-year EPS of $1.86 to grow 35.1%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.

Seacoast Banking’s TBVPS declined at a 1.5% annual clip over the last five years. TBVPS has stabilized recently as it was flat over the last two years at about $15.14 per share.

Over the next 12 months, Consensus estimates call for Seacoast Banking’s TBVPS to grow by 19.1% to $18.04, top-notch growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Seacoast Banking has averaged a Tier 1 capital ratio of 13.7%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, Seacoast Banking has averaged an ROE of 7%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

It was good to see Seacoast Banking narrowly top analysts’ revenue expectations this quarter. On the other hand, its tangible book value per share missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $34.14 immediately after reporting.

Updated: January 29, 2026 at 11:25 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Seacoast Banking.

Seacoast Banking’s business quality ultimately falls short of our standards. Although its revenue growth was impressive over the last five years and is expected to accelerate over the next 12 months, its TBVPS has declined over the last five years. And while the company’s estimated net interest income growth for the next 12 months is great, the downside is its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders.

Seacoast Banking’s P/B ratio based on the next 12 months is 1.2x. Beauty is in the eye of the beholder, but our analysis shows the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere.

Wall Street analysts have a consensus one-year price target of $34.50 on the company (compared to the current share price of $34.14).