Seacoast Commerce Banc Holdings Announces 60% Increase in Quarterly Dividend and Shift in Balance Sheet Management

SAN DIEGO, Feb. 15, 2017 -- Seacoast Commerce Banc Holdings (OTC Pink:SCBH) (“Company”), the parent company of Seacoast Commerce Bank (“Bank”), announced today that the Board of Directors has declared a regular cash dividend of $0.08 per common share, which represents a 60% increase over its previously announced dividend.  The cash dividend is payable on March 20^th, 2017, to shareholders of record as of the close of business on March 8^th, 2017.

In addition to the announcement of a 60% increase in the quarterly cash dividend, the Company also announced a shift in its balance sheet management with plans to increase its retention of SBA loans through lower loan sales going forward.  In light of improving economic conditions, anticipated additional interest rate increases, corporate tax reform, and less regulatory burden, the Company believes it is in the best long-term interests of shareholders to hold more loans in the portfolio.  Some changes will occur as a result of holding more loans in the portfolio including more balance sheet growth, less gain-on-sale income, increased net interest income and lower earnings in the short term.  However, over the long run, cumulative net interest income on loans we would have sold are expected to outweigh the one-time gain we record in the quarter of the sale.  Going forward our goal is to continue to outperform our peers.

Richard M. Sanborn, President & Chief Executive Officer, commented, “We are excited to be able to return more to shareholders in the form of an increased dividend and are focused on delivering consistent earnings over the long run.  Over the last three years we have successfully managed the Company in a way that has resulted in a return on average common equity of 17.35%, 19.17%, and 18.56% for 2014, 2015, and 2016 respectively, which is well above our peers.  While we feel confident in our ability to continue performing at a high level going forward, we know that our returns are partially based on selling SBA loans and recording a gain-on-sale.  The most significant advantage of decreasing our loan sales, and lowering our earnings benchmark, is that we will enjoy more loan growth in our balance sheet with a corresponding increase in net interest income, which we expect will enhance future franchise value.  At the end of day, our efforts are focused on increasing our long-term core franchise value, not on short-term gains,” Sanborn concluded.

Allan W. Arendsee, Chairman of the Board, stated, “The board of directors firmly believes and supports that it is in the best interests of shareholders to focus on building a company that maximizes long-term shareholder value.  After analyzing multiple forecasts and models, the board believes that positioning the company for more growth, combined with more consistent, predictable, recurring income, is the right decision to build greater long-term shareholder value, even if that decision results in lower short-term earnings,” Arendsee concluded.

About Seacoast Commerce Banc Holdings: Seacoast Commerce Banc Holdings is a bank holding company with one wholly-owned banking subsidiary, Seacoast Commerce Bank.  Both the Company and the Bank are headquartered in San Diego, California, with the Bank having full-service banking branches in San Diego and Chula Vista, California, and production offices in San Diego, Orange County, Los Angeles, Sacramento and San Ramon, California; Phoenix, Arizona; Denver, Colorado; Las Vegas and Reno, Nevada; Portland, Oregon; Houston and Dallas, Texas; and Bellevue, Washington.  For more information on Seacoast Commerce Banc Holdings, please visit www.scbholdings.com; to learn more about Seacoast Commerce Bank, visit www.sccombank.com, or contact Richard M. Sanborn, President and Chief Executive Officer at 858-432-7001, or [email protected].

Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank’s business, and the intent, belief or current expectations of the Bank, its directors or its officers, are “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank’s performance, and regulatory matters.  The Company and Bank are not under any obligation – and expressly disclaims any such obligation – to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.  Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.

Contact: 
Richard M. Sanborn
President & Chief Executive Officer
Phone: 858-432-7001
Email: [email protected]