Seacoast Banking Corp. of Florida is preparing to raise capital through a common stock offering, with one goal being to resume paying dividends on its government infusion.
The $2.3 billion-asset Stuart company, which has been struggling with heavy loan losses for the past year, suspended dividend payments on common and preferred shares last month because of its four consecutive quarterly losses and tight capital ratios.
It is one of several companies to get capital through the Treasury Department's Troubled Asset Relief Program, only to opt in recent months to defer paying the related dividends. Seacoast received $50 million of Tarp funds in December.
Seacoast has not determined how many shares it might sell or at what price, according to a filing Monday with the Securities and Exchange Commission. Its stock, which has lost about 68% of its value over the past year, was trading at $2.40 a share Tuesday afternoon.
The company would use the proceeds from the offering to add capital and for general corporate purposes, the filing said.
Though Seacoast's bank unit remains well capitalized, it has an agreement with the Office of the Comptroller of the Currency to maintain a leverage ratio of 7.5% and a total risk-based capital ratio of 12% — levels that are above the typical minimums required.
As of March 31 the bank had a leverage ratio of 8.11% and a total risk-based capital ratio of 12.57%, according to the filing.
Seacoast cited a request from the Federal Reserve Board in its decision to suspend all dividends. It also deferred payments on its $52 million of trust-preferred securities in May.
A company must consult with the Fed on dividends if its bank unit fails to earn enough over the previous four quarters to cover those payments, under policies the regulator recently issued, Seacoast said in the filing. The Fed also indicated that companies should not make payments on trust-preferred securities using Tarp capital.
Seacoast said after completing its stock offering it would seek Fed permission to resume the payments for its government capital and its trust-preferred securities.
Seacoast swung to a loss of $5.7 million in the first quarter, from a profit of $1.8 million the year-earlier. The loss includes $937,000 it paid in Tarp dividends for that quarter.
Its nonperforming loans climbed to 6.69% of its total, from 3.86%, and net chargeoffs rose to 2.07% of average loans, from 0.93%.
