UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM 8-K
________________
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of
theSecurities Exchange Act of 1934
Date of report (Date of earliest event reported):
March 25, 2015
________________
SEACOAST BANKING CORPORATION OF FLORIDA
(Exact Name of Registrant as Specified in
Charter)
_______________
Florida |
|
000-13660 |
|
59-2260678 |
(State or Other Jurisdiction |
|
(Commission File Number) |
|
(IRS Employer |
of Incorporation) |
|
|
|
Identification No.) |
815 Colorado Avenue, Stuart, Florida |
|
34994 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (772) 287-4000
________________
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| þ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communication pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement |
On March 25, 2015, Seacoast Banking Corporation
of Florida, a Florida corporation (“Seacoast” or the “Company”) and Seacoast’s wholly-owned subsidiary,
Seacoast National Bank, a national banking association (“SNB”) entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Grand Bankshares, Inc., a Florida corporation (“Grand”), and Grand’s wholly-owned subsidiary,
Grand Bank & Trust of Florida, a Florida bank (the “Bank”). The Merger Agreement provides that, upon the terms
and subject to the conditions set forth in the Merger Agreement, Grand will merge with and into Seacoast, with Seacoast continuing
as the surviving corporation (the “Merger”).
Following the Merger, the Bank will merge with
and into SNB, with SNB surviving the merger and continuing its corporate existence under the name “Seacoast National Bank.”
Subject to the terms and conditions of the
Merger Agreement, which has been unanimously approved by the Board of Directors of Seacoast and Grand, upon completion of the Merger,
each outstanding share of Grand common and preferred A stock will be converted into the right to receive 0.3114 (the “Exchange
Ratio”) of a share of Seacoast common stock (subject to the payment of cash in lieu of fractional shares) (the “Stock
Consideration”). Additionally, Seacoast will pay approximately $1,481,000 in cash for all of Grand’s outstanding shares
of preferred B stock, representing the par value of $1,000 per share for the preferred B stock (the “Preferred B Consideration,”
and collectively with the Stock Consideration, the “Merger Consideration”). Immediately prior to the Merger, outstanding
Grand stock options, restricted stock units and other equity-based awards will (1) vest in accordance with their terms, (2) exercise
in accordance with its terms, or (3) terminate. The resulting Grand common stock, if any, will be converted as set forth in the
prior sentence. Each outstanding share of Seacoast common stock will remain outstanding and be unaffected by the Merger.
The Merger Agreement contains customary representations
and warranties from both Seacoast and Grand and each have agreed to customary covenants, including, among others, covenants relating
to (1) the conduct of Seacoast’s and Grand’s businesses during the interim period between the execution of the
Merger Agreement and the completion of the Merger, (2) Grand’s obligation to convene and hold a meeting of its shareholders
to consider and vote upon the approval of the Merger Agreement, and (3) subject to certain exceptions, the recommendation
by the Board of Directors of Grand in favor of the approval by its shareholders of the Merger and the Merger Agreement and the
transactions contemplated thereby. Grand has also agreed not to (1) solicit proposals relating to any alternative acquisition
proposals or (2) subject to certain exceptions, enter into any discussions, or enter into any agreement concerning, or provide
confidential information in connection with, any alternative acquisition proposals.
Completion of the Merger is subject to certain
customary conditions, including, among others, (1) approval of the Merger Agreement by Grand’s shareholders, (2) receipt
of required regulatory approvals without the imposition of conditions or consequences that would have a material adverse effect
on Seacoast or its subsidiaries after the effective time of the Merger, (3) the absence of any law or order prohibiting the
completion of the Merger, (4) the effectiveness of the registration statement for the Seacoast common stock to be issued in
the Merger, and (5) the quotation and listing of the Seacoast common stock to be issued in the Merger on the NASDAQ Global Select
Market. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including
(1) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (2) performance
in all material respects by the other party of its obligations under the Merger Agreement, and (3) receipt by such party of
an opinion from its counsel to the effect that the Merger will qualify as a reorganization within the meaning of the Internal Revenue
Code of 1986, as amended.
The Merger Agreement contains certain termination
rights for Seacoast and Grand, as the case may be, applicable upon: (1) mutual consent, (2) a breach by the other party that is
not or cannot be cured within 30 days’ notice of such breach if such breach would result in a failure of the conditions
to closing set forth in the Merger Agreement, (3) final, non-appealable denial of required regulatory approvals, (4) Grand’s
shareholders failure to approve the Merger Agreement by the required vote, (5) October 31, 2015 if the Merger has not
been completed by that date, (6) Grand’s withdrawal, qualification or modification or its shareholder recommendation, (7)
Grand’s failure to substantially comply with its “no-shop” obligations under the Merger Agreement or its obligation
to call, give notice of, convene and hold its shareholders meetings, (8) Grand has recommended, endorsed, accepted or agreed to
a competing acquisition proposal, or (9) if holders of more than 5% in the aggregate of the outstanding Grand common stock vote
shares against the Merger Agreement and have given notice of their intention to exercise their dissenters’ rights. In addition,
the Merger Agreement provides that, upon termination of the Merger Agreement in certain circumstances, Grand may be required to
pay Seacoast a termination fee of $725,000.
The foregoing description of the Merger and
the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which
is filed as Exhibit 2.1 hereto, and is incorporated into this report by reference thereto. The Merger Agreement has been attached
as an exhibit to this report in order to provide investors and security holders with information regarding its terms. It is not
intended to provide any other financial information about Seacoast, Grand, or their respective subsidiaries and affiliates. The
representations, warranties and covenants contained in the Merger Agreement were made only for purposes of that agreement and as
of specific dates, are solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon
by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between
the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality
applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties,
or covenants or any description thereof as characterizations of the actual state of facts or condition of Seacoast, Grand or any
of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties,
and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected
in public disclosures by Seacoast.
On March 25, 2015, Seacoast issued a press
release announcing that Seacoast and Grand had entered into the Merger Agreement, as described in Item 1.01. Pursuant to General
Instruction F to the Commission’s Form 8-K, a copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
into this Item 8.01 by this reference.
Seacoast also discussed the Merger in a conference call on
March 26, 2015. A transcript of this conference call is attached hereto as Exhibit 99.2 and is
incorporated into this Item 8.01 by this reference. Pursuant to General Instruction F to the Commission’s Form 8-K, the
slide show presentation related to the Merger and made available in connection with the conference call is attached hereto as
Exhibit 99.3 and is incorporated into this Item 8.01 by this reference, and is also available on Seacoast’s Internet
website.
All information included in the press release,
transcript and the slide show presentation is presented as of the respective dates thereof, and Seacoast does not assume any obligation
to correct or update such information in the future.
Additional Information
Seacoast and Grand will be filing a proxy statement/prospectus and
other relevant documents concerning the merger with the United States Securities and Exchange Commission (the “SEC”).
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation
of any vote or approval. WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE
SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Investors will be able to obtain these documents free of charge
at the SEC’s Web site (www.sec.gov). In addition, documents filed with the SEC by Seacoast will be available free
of charge by contacting Investor Relations at (772) 288-6085.
The directors, executive officers, and certain other members of
management and employees of Grand are participants in the solicitation of proxies in favor of the Merger from the Grand shareholders.
Important Information for Investors and
Shareholders
Seacoast Banking Corporation of Florida
("Seacoast") will file with the Securities and Exchange Commission ("SEC") a registration statement on Form
S-4 containing a proxy statement of Grand Bankshares, Inc. ("Grand") and a prospectus of Seacoast, and Seacoast will
file other documents with respect to the proposed merger. A definitive proxy statement/prospectus will be mailed to shareholders
of Grand. Investors and security holders of Grand are urged to read the proxy statement/prospectus and other documents that will
be filed with the SEC carefully and in their entirety when they become available because they will contain important information.
Investors and security holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus
(when available) and other documents filed with the SEC by Seacoast through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Seacoast will be available free of charge on Seacoast’s internet website or
by contacting Seacoast.
Grand, its directors and executive officers and other members of management and employees may be considered participants in the
solicitation of proxies in connection with the proposed transaction. Information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus
and other relevant materials to be filed with the SEC when they become available.
Cautionary Notice Regarding Forward-Looking
Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, and is intended to be protected by the safe harbor provided by the same. These statements are subject to numerous risks
and uncertainties. These risks and uncertainties include, but are not limited to, the following: failure to obtain the approval
of shareholders of Grand in connection with the merger; the timing to consummate the proposed merger; the risk that a condition
to closing of the proposed merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed
merger is not obtained or is obtained subject to conditions that are not anticipated; the parties' ability to achieve the synergies
and value creation contemplated by the proposed merger; the parties' ability to promptly and effectively integrate the businesses
of Seacoast and Grand; the diversion of management time on issues related to the merger; the failure to consummate or any delay
in consummating the merger for other reasons; changes in laws or regulations; and changes in general economic conditions. For additional
information concerning factors that could cause actual conditions, events or results to materially differ from those described
in the forward-looking statements, please refer to the factors set forth under the headings "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in Seacoast's most recent Form 10-K report and to
Seacoast's most recent Form 8-K reports, which are available online at www.sec.gov. No assurances can be given that any of the
events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have
on the results of operations or financial condition of Seacoast or Grand.
| Item 9.01. | Financial Statements and Exhibits. |
Exhibit
No. |
|
Description |
|
|
|
2.1 |
|
Agreement and Plan of Merger, dated as of March 25, 2015, by and among Seacoast Banking Corporation of Florida, Seacoast National Bank, Grand Bankshares, Inc. and Grand Bank & Trust of Florida. |
|
|
|
99.1 |
|
Press release issued on March 25, 2015, with respect to the Announcement of the Merger. |
|
|
|
99.2 |
|
Transcript of Conference Call held on March 26, 2015 related to the Merger. |
|
|
|
99.3 |
|
Slide Show Presentation referenced and made available in connection with the Conference Call related to the Merger on March 26, 2015. |
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
SEACOAST BANKING CORPORATION OF FLORIDA |
|
|
|
|
By: |
/s/ Dennis S. Hudson, III |
|
|
Dennis S. Hudson, III |
|
|
Chairman and Chief Executive Officer |
Date: March
30, 2015
Exhibit 2.1
EXECUTION VERSION
THIS IS A DRAFT. NO AGREEMENT, ORAL OR
WRITTEN, REGARDING OR RELATING TO ANY OF THE MATTERS COVERED BY THIS DRAFT HAS BEEN ENTERED INTO BETWEEN THE PARTIES. THIS DOCUMENT,
IN ITS PRESENT FORM OR AS IT MAY BE HEREAFTER REVISED BY ANY PARTY, WILL NOT BECOME A BINDING AGREEMENT OF THE PARTIES UNLESS AND
UNTIL ALL DILIGENCE IS COMPLETED, ALL SCHEDULES AND EXHIBITS ARE ATTACHED, AND IT HAS BEEN EXECUTED BY ALL PARTIES AND COMPLETE
EXECUTED COPIES HAVE BEEN DELIVERED. SEACOAST RESERVES THE RIGHT TO REQUIRE ADDITIONAL REPRESENTATIONS, WARRANTIES, AGREEMENTS
AND COVENANTS BASED ON ITS DUE DILIGENCE RESULTS WHICH IS ONGOING. THE EFFECT OF THIS LEGEND MAY NOT BE CHANGED BY ANY ACTION OF
THE PARTIES.
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
SEACOAST
BANKING CORPORATION OF FLORIDA
SEACOAST
NATIONAL Bank
GRAND
BANKSHARES, INC.
AND
GRAND
BANK & TRUST OF FLORIDA
Dated as of March 25, 2015
TABLE OF CONTENTS
|
|
Page |
Parties |
1 |
Preamble |
1 |
ARTICLE 1 – TRANSACTIONS AND TERMS OF MERGER |
1 |
1.1 |
Merger |
1 |
1.2 |
Bank Merger |
2 |
1.3 |
Time and Place of Closing |
2 |
1.4 |
Effective Time |
2 |
1.5 |
Conversion of Holding Stock |
2 |
1.6 |
SBC Common Stock |
3 |
1.7 |
Holding Equity Awards |
3 |
1.8 |
Organizational Documents of Surviving Corporation; Directors and Officers |
3 |
1.9 |
Tax Consequences |
4 |
ARTICLE 2 – DELIVERY OF MERGER CONSIDERATION |
4 |
2.1 |
Exchange Procedures |
4 |
2.2 |
Rights of Former Holding Shareholders |
5 |
2.3 |
Dissenters’ Rights |
6 |
ARTICLE 3 – REPRESENTATIONS AND WARRANTIES |
6 |
3.1 |
Company Disclosure Letter |
6 |
3.2 |
Standards |
6 |
3.3 |
Representations and Warranties of the Company |
7 |
3.4 |
Representations and Warranties of Seacoast |
23 |
ARTICLE 4 – COVENANTS AND ADDITIONAL AGREEMENTS |
28 |
4.1 |
Conduct of Business Prior to Effective Time |
28 |
4.2 |
Forbearances |
28 |
4.3 |
Litigation |
30 |
4.4 |
State Filings |
30 |
4.5 |
Holding Shareholder Approval; Registration Statement and Proxy Statement/Prospectus |
31 |
4.6 |
Quotation of SBC Capital Stock |
31 |
4.7 |
Reasonable Best Efforts |
32 |
4.8 |
Applications and Consents |
32 |
4.9 |
Notification of Certain Matters |
33 |
4.10 |
Investigation and Confidentiality |
33 |
4.11 |
Press Releases; Publicity |
33 |
4.12 |
Acquisition Proposals |
34 |
4.13 |
Takeover Laws |
35 |
4.14 |
Employee Benefits and Contracts. |
35 |
4.15 |
Indemnification |
36 |
4.16 |
Resolution of Certain Matters |
37 |
4.17 |
Claims Letters |
37 |
4.18 |
Restrictive Covenant Agreement |
37 |
4.19 |
Systems Integration |
38 |
4.20 |
Assumption of Indentures |
38 |
ARTICLE 5 – CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE |
38 |
5.1 |
Conditions to Obligations of Each Party |
38 |
5.2 |
Conditions to Obligations of Seacoast |
39 |
5.3 |
Conditions to Obligations of The Company |
40 |
ARTICLE 6 – TERMINATION |
41 |
6.1 |
Termination |
41 |
6.2 |
Effect of Termination |
42 |
ARTICLE 7 – MISCELLANEOUS |
42 |
7.1 |
Definitions |
42 |
7.2 |
Non-Survival of Representations and Covenants |
50 |
7.3 |
Expenses |
51 |
7.4 |
Termination Fee |
51 |
7.5 |
Entire Agreement |
52 |
7.6 |
Amendments |
52 |
7.7 |
Waivers |
52 |
7.8 |
Assignment |
53 |
7.9 |
Notices |
53 |
7.10 |
Governing Law |
53 |
7.11 |
Counterparts |
53 |
7.12 |
Captions |
54 |
7.13 |
Interpretations |
54 |
7.14 |
Severability |
54 |
7.15 |
Attorneys’ Fees |
54 |
7.16 |
Waiver of Jury Trial |
54 |
LIST OF EXHIBITS
Exhibit |
|
Description |
|
|
|
A |
|
Bank Merger Agreement |
|
|
|
B |
|
Form of Company Shareholder Support Agreement |
|
|
|
C |
|
Form of Claims Letter |
|
|
|
D |
|
Form of Restrictive Covenant Agreement |
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN
OF MERGER (this “Agreement”) is made and entered into as of March 25, 2015, by and among Seacoast Banking
Corporation of Florida, a Florida corporation (“SBC”), Seacoast National Bank, a national banking
association and wholly owned subsidiary of SBC (“SNB” and collectively with SBC, “Seacoast”),
Grand Bankshares, Inc., a Florida corporation
(“Holding”), and Grand Bank & Trust of Florida,
a Florida bank and wholly owned subsidiary of Holding (the “Bank” and collectively with Holding,
the “Company”).
Preamble
WHEREAS, the Boards
of Directors of SBC and Holding have approved this Agreement and the transactions described herein and have declared the same advisable
and in the best interests of each of SBC and Holding and each of SBC and Holding’s shareholders;
WHEREAS, this Agreement
provides for the acquisition of Holding by SBC pursuant to the merger of Holding with and into SBC (the “Merger”).
This Agreement also provides for the merger of the Bank with and into SNB (the “Bank Merger”) pursuant to the
terms of the Plan of Merger and Merger Agreement between SNB and Bank attached
hereto as Exhibit A (the “Bank Merger Agreement”); and
WHEREAS, concurrently
with the execution and delivery of this Agreement, as a condition and inducement to Seacoast’s willingness to enter into
this Agreement, each of the directors of the Company have executed and delivered to SBC an agreement in substantially the form
of Exhibit B (each a “Company Shareholder Support Agreement”), pursuant to which they have agreed, among
other things, subject to the terms of such Company Shareholder Support Agreement, to vote the shares of Holding Common Stock and
Holding Preferred Stock, respectively, held of record by such Persons or as to which they otherwise have sole voting power to approve
and adopt this Agreement and the transactions contemplated hereby, including the Merger and the Bank Merger.
Certain terms used and
not otherwise defined in this Agreement are defined in Section 7.1.
NOW, THEREFORE,
in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the Parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger.
Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.4 herein), Holding shall
be merged with and into SBC in accordance with the provisions of the FBCA. SBC shall be the surviving corporation (the “Surviving
Corporation”) resulting from the Merger and the separate corporate existence of Holding shall thereupon cease. SBC shall
continue to be governed by the Laws of the State of Florida, and the separate corporate existence of SBC with all of its rights,
privileges, immunities, powers and franchises shall continue unaffected by the Merger.
1.2 Bank
Merger. Prior to the Effective Time, the Boards of Directors of SNB and the Bank will execute the Bank Merger Agreement.
Subject to the terms and conditions of this Agreement and the Bank Merger Agreement, the Bank shall be merged with and into SNB
in accordance with the provisions of 12 U.S.C. Section 215 and with the effect provided in 12 U.S.C. Section 215. SNB shall be
the surviving bank (the “Surviving Bank”) resulting from the Bank Merger and the separate existence of the Bank
shall thereupon cease. SNB shall continue to be governed by the Laws of the United States, and the separate existence of SNB with
all of its rights, privileges, immunities, powers and franchises shall continue unaffected by the Bank Merger. Subject to the satisfaction
of the conditions to closing set forth in the Bank Merger Agreement, the Bank Merger shall occur immediately following the Merger
unless otherwise determined by Seacoast in its sole discretion.
1.3 Time
and Place of Closing. Unless otherwise mutually agreed to by SBC and Holding, the closing of the Merger (the “Closing”)
shall take place in the offices of Alston & Bird LLP, One Atlantic Center, 1201 West Peachtree Street, Atlanta, Georgia 30309
at 10:00 a.m., Atlanta time, on the date when the Effective Time is to occur (the “Closing Date”).
1.4 Effective
Time. Subject to the terms and conditions of this Agreement, on the Closing Date, the Parties will cause articles of merger
to be filed with the Secretary of State of the State of Florida as provided in the FBCA (the “Articles of Merger”).
The Merger shall take effect when the Articles of Merger becomes effective (the “Effective Time”). Subject to
the terms and conditions hereof, the Parties shall use their reasonable best efforts to cause the Effective Time to occur on a
mutually agreeable date following the date on which satisfaction or waiver of the conditions set forth in Article 5 has occurred
(other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver
of those conditions).
1.5 Conversion
of Holding Stock.
(a) At
the Effective Time, in each case subject to Section 1.5(d) and excluding Dissenting Shares, by virtue of the Merger and without
any action on the part of the Parties or the holder thereof:
(i) each
share of Holding Common Stock and each share of Holding Preferred A Stock that is issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive the number of shares of SBC Common Stock that is equal to the Exchange
Ratio (the “Stock Consideration”); and
(ii) each share
of Holding Preferred B Stock that is issued and outstanding immediately prior to the Effective Time shall be converted into the
right to receive a total cash payment of one thousand dollars ($1,000.00) per share (the “Preferred B Consideration”).
The Stock Consideration is sometimes referred
to herein as the “Merger Consideration.” The consideration which all of the Company shareholders are entitled
to receive pursuant to this Article 1 is referred to herein as the “Aggregate Merger Consideration.”
(b) At
the Effective Time, all shares of Holding Stock shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist as of the Effective Time, and each certificate or electronic book-entry previously representing any such
shares of Holding Stock (the “Holding Certificates”) shall thereafter represent only the right to receive the
Stock Consideration or the Preferred B Consideration, as applicable, and any cash in lieu of fractional shares pursuant to Section
1.5(c), and any Dissenting Shares shall thereafter represent only the right to receive applicable payments as set forth in Section
2.3.
(c) Notwithstanding
any other provision of this Agreement, each holder of shares of Holding Common Stock or Holding Preferred A Stock to be exchanged
pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of SBC Common Stock (after taking
into account all Holding Certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to such fractional part of a share of SBC Common Stock multiplied by the average closing price per share of SBC Common Stock
on the NASDAQ Global Select Market for the five (5) trading day period ending on the trading day preceding the date of Closing,
less any applicable withholding Taxes. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder
in respect of any fractional shares.
(d) If,
prior to the Effective Time, the issued and outstanding shares of SBC Common Stock or Holding Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares or securities as a result of a reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, then an appropriate
and proportionate adjustment shall be made to the Aggregate Merger Consideration.
(e) Each
share of Holding Stock issued and outstanding immediately prior to the Effective Time and owned by any of the Parties or their
respective Subsidiaries (in each case other than shares of Holding Stock held on behalf of third parties) shall, by virtue of the
Merger and without any action on the part of the holder thereof, cease to be outstanding, shall be cancelled and retired without
payment of any consideration therefore and shall cease to exist (together with the Dissenting Shares, the “Excluded Shares”).
1.6 SBC
Common Stock. At and after the Effective Time, each share of SBC Common Stock issued and outstanding immediately prior
to the Effective Time shall remain an issued and outstanding share of SBC Common Stock and shall not be affected by the Merger.
1.7 Holding
Equity Awards. Holding shall take all actions necessary to cause each outstanding Holding Equity Award to be, immediately
prior to the Effective Time, either (a) vested in accordance with its terms, (b) exercised in accordance with its terms, or (c)
terminated. Prior to the Effective Time, Holding shall also take all actions necessary to terminate the Holding Stock Plans as
of the Effective Time and to cause the provisions in any other Holding Benefit Plan providing for the issuance, transfer or grant
of any capital stock of Holding or any interest in respect of any capital stock of Holding to terminate and be of no further force
and effect as of the Effective Time, and Holding shall ensure that following the Effective Time no holder of any Holding Equity
Award or any participant in any Holding Stock Plan or other Holding Benefit Plan shall have any right thereunder to acquire any
capital stock of SBC, SNB, Holding or the Bank, except as provided in Section 1.5 of this Agreement with respect to Holding Common
Stock or Holding Preferred A Stock which such person received or became entitled to receive in accordance with the vesting or exercise
of such Holding Equity Award prior to the Effective Time.
1.8 Organizational
Documents of Surviving Corporation; Directors and Officers.
(a) The
Organizational Documents of SBC in effect immediately prior to the Effective Time shall be the Organizational Documents of the
Surviving Corporation after the Effective Time until otherwise amended or repealed.
(b) The
directors of SBC immediately prior to the Effective Time shall be the directors of the Surviving Corporation as of the Effective
Time. The officers of SBC immediately prior to the Effective Time shall be the officers of the Surviving Corporation as of the
Effective Time, until the earlier of their resignation or removal or otherwise ceasing to be an officer or until their respective
successors are duly elected and qualified, as the case may be.
1.9 Tax
Consequences. It is the intention of the Parties to this Agreement that the Merger and the Bank Merger, for federal
income Tax purposes, shall qualify as “reorganizations” within the meaning of Section 368(a) of the Internal Revenue
Code and that this Agreement shall constitute “plans of reorganization” for purposes of Sections 354 and 361 of the
Internal Revenue Code. SBC shall have the right to revise the structure of the Merger and/or the Bank Merger contemplated by this
Agreement in order to assure that the Merger and the Bank Merger, for federal income Tax purposes shall qualify as “reorganizations”
within the meaning of Section 368(a) of the Internal Revenue Code or to substitute an interim corporation that is wholly owned
by SBC (“Interim”), which interim corporation may merge with and into Holding, provided, that no such
revision to the structure of the Merger or the Bank Merger shall result in any changes in the amount or type of the consideration
that the holders of shares of Holding Stock are entitled to receive under this Agreement. SBC may exercise this right of revision
by giving written notice to the Company in the manner provided in Section 7.9, which notice shall be in the form of an amendment
to this Agreement or in the form of an Amended and Restated Agreement and Plan of Merger.
ARTICLE 2
DELIVERY OF MERGER CONSIDERATION
2.1 Exchange
Procedures.
(a) Delivery
of Transmittal Materials. Prior to the Effective Time, SBC shall appoint its transfer agent, Continental Stock Transfer and
Trust Company (the “Exchange Agent”), pursuant to an agreement to act as exchange agent hereunder. As promptly
as practicable after the Effective Time (and within five Business Days), the Exchange Agent shall send to each former holder of
record of shares of Holding Stock, excluding the holders, if any, of Dissenting Shares, immediately prior to the Effective Time
transmittal materials for use in exchanging such holder’s Holding Certificates for the applicable Aggregate Merger Consideration
(which shall specify that delivery shall be effected, and risk of loss and title to the Holding Certificates shall pass, only upon
proper delivery of such Holding Certificates (or effective affidavit of loss in lieu thereof as provided in Section 2.1(e)) to
the Exchange Agent).
(b) Delivery
of Merger Consideration. After the Effective Time, following the surrender of a Holding Certificate to the Exchange Agent (or
effective affidavit of loss in lieu thereof as provided in Section 2.1(e)) in accordance with the terms of such letter of transmittal,
duly executed, the holder of such Holding Certificate shall be entitled to receive in exchange therefor the applicable Aggregate
Merger Consideration in respect of the shares of Holding Stock represented by its Holding Certificate or Certificates. If any portion
of the Aggregate Merger Consideration is to be paid to a Person other than the Person in whose name a Holding Certificate so surrendered
is registered, it shall be a condition to such payment that such Holding Certificate shall be properly endorsed or otherwise be
in proper form for transfer, and the Person requesting such payment shall pay to the Exchange Agent any transfer or other similar
Taxes required as a result of such payment to a Person other than the registered holder of such Holding Certificate, or establish
to the reasonable satisfaction of the Exchange Agent that such Tax has been paid or is not payable. Payments to holders of Dissenting
Shares shall be made as required by the FBCA.
(c) Payment
of Taxes. The Exchange Agent (or, after the agreement with the Exchange Agent is terminated, SBC) shall be entitled to deduct
and withhold from the applicable Aggregate Merger Consideration (including cash in lieu of fractional shares of SBC Common Stock)
otherwise payable pursuant to this Agreement to any holder of Holding Stock such amounts as the Exchange Agent or SBC, as the case
may be, is required to deduct and withhold under the Internal Revenue Code, or any provision of state, local or foreign Tax law,
with respect to the making of such payment. To the extent the amounts are so withheld by the Exchange Agent or SBC, as the case
may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of shares of
Holding Stock in respect of whom such deduction and withholding was made by the Exchange Agent or SBC, as the case may be.
(d) Return
of Aggregate Merger Consideration to SBC. At any time upon request by SBC following 90 days after the Closing Date, SBC shall
be entitled to require the Exchange Agent to deliver to it any remaining portion of the Aggregate Merger Consideration not distributed
to holders of Holding Certificates that was deposited with the Exchange Agent (the “Exchange Fund”) (including
any interest received with respect thereto and other income resulting from investments by the Exchange Agent, as directed by SBC),
and holders shall be entitled to look only to SBC (subject to abandoned property, escheat or other similar laws) with respect to
the Applicable Merger Consideration, any cash in lieu of fractional shares of SBC Common Stock and any dividends or other distributions
with respect to SBC Common Stock payable upon due surrender of their Holding Certificates, without any interest thereon. Notwithstanding
the foregoing, neither SBC nor the Exchange Agent shall be liable to any holder of a Holding Certificate for Merger Consideration
(or dividends or distributions with respect thereto) or cash from the Exchange Fund in each case delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) Lost
Holding Certificates. In the event any Holding Certificates shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Holding Certificate(s) to be lost, stolen or destroyed and, if required by SBC
or the Exchange Agent, the posting by such Person of a bond in such sum as SBC may reasonably direct as indemnity against any claim
that may be made against Holding or SBC with respect to such Holding Certificate(s), the Exchange Agent will issue the applicable
Aggregate Merger Consideration deliverable in respect of the shares of Holding Stock represented by such lost, stolen or destroyed
Holding Certificates.
2.2 Rights
of Former Holding Shareholders. At the Effective Time, the stock transfer books of Holding shall be closed as to holders
of Holding Stock and no transfer of Holding Stock by any such holder shall thereafter be made or recognized. Until surrendered
for exchange in accordance with the provisions of Section 2.1, each Holding Certificate (other than Holding Certificates representing
Excluded Shares) shall from and after the Effective Time represent for all purposes only the right to receive the applicable Aggregate
Merger Consideration in exchange therefor and, for purposes of the Stock Consideration, any cash in lieu of fractional shares of
SBC Common Stock to be issued or paid in consideration therefor upon surrender of such certificate in accordance with Section 1.5(c),
and any dividends or distributions to which such holder is entitled pursuant to this Article 2. No dividends or other distributions
with respect to SBC Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Holding
Certificate with respect to the shares of SBC Common Stock represented thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 1.5(c), and all such dividends, other distributions and cash in lieu of fractional
shares of SBC Common Stock shall be paid by SBC to the Exchange Agent and shall be included in the Exchange Fund, in each case
until the surrender of such Holding Certificate in accordance with this Article 2. Subject to the effect of applicable abandoned
property, escheat or similar laws, following surrender of any such Holding Certificate there shall be paid to the holder of a SBC
stock certificate representing whole shares of SBC Common Stock issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of dividends or other distributions, if applicable, with a record date after the Effective Time theretofore
paid with respect to such whole shares of SBC Common Stock and the amount of any cash payable in lieu of a fractional share of
SBC Common Stock to which such holder is entitled pursuant to Section 1.5(c), and (ii) at the appropriate payment date, the amount
of dividends or other distributions, if applicable, with a record date after the Effective Time but prior to such surrender and
with a payment date subsequent to such surrender payable with respect to such whole shares of SBC Common Stock. SBC shall make
available to the Exchange Agent cash for these purposes, if necessary.
2.3 Dissenters’
Rights. Any Person who otherwise would be deemed a holder of Dissenting Shares (a “Dissenting Shareholder”)
shall not be entitled to receive the applicable Aggregate Merger Consideration with respect to the Dissenting Shares only until
such Person shall have failed to perfect or shall have effectively withdrawn or lost such holder’s right to dissent from
the Merger under the FBCA. Each Dissenting Shareholder shall be entitled to receive only the payment provided by the provisions
of Sections 607.1301 through 607.1333 of the FBCA with respect to shares of Holding Stock owned by such Dissenting Shareholder.
Holding shall give SBC (i) prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and
any other instruments served pursuant to applicable Law received by Holding relating to shareholders’ rights of appraisal
and (ii) the opportunity to direct all negotiations and proceedings with respect to demand for appraisal under the FBCA. Holding
shall not, except with the prior written consent of SBC, voluntarily make any payment with respect to any demands for appraisals
of Dissenting Shares, offer to settle or settle any such demands or approve any withdrawal of any such demands.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Company
Disclosure Letter. Prior to the execution and delivery of this Agreement, the Company has delivered to Seacoast a letter
(the “Company Disclosure Letter”) setting forth, among other things, items the disclosure of which is necessary
or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one
or more of the Company’s representations or warranties contained in this Article 3 or to one or more of its covenants contained
in Article 4; provided, that (a) no such item is required to be set forth in the Company Disclosure Letter as an exception
to any representation or warranty of the Company if its absence would not result in the related representation or warranty being
deemed untrue or incorrect under the standard established by Section 3.2, and (b) the mere inclusion of an item in the
Company Disclosure Letter as an exception to a representation or warranty shall not be deemed an admission by the Company that
such item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a
Material Adverse Effect with respect to the Company. Any disclosures made with respect to a subsection of Section 3.3 shall be
deemed to qualify any subsections of Section 3.3 specifically referenced or cross-referenced that contains sufficient detail to
enable a reasonable Person to recognize the relevance of such disclosure to such other subsections. All representations and warranties
of Seacoast shall be qualified by reference to Seacoast’s SEC Reports and such disclosures in any such SEC Reports or other
publicly available documents filed with or furnished by Seacoast to the SEC or any other Governmental Authority prior to the date
hereof (but excluding any risk factor disclosures contained under the heading “Risk Factors”, any disclosure of risks
included in any “forward-looking statements” disclaimer or any other statements that are similarly forward-looking
in nature).
3.2 Standards.
(a) No
representation or warranty of any Party hereto contained in this Article 3 (other than the representations and warranties in (i)
Section 3.3(c) and 3.4(c), which shall be true and correct in all respects (except for inaccuracies that are de minimis
in amount), and (ii) Sections 3.3(b)(i), 3.3(b)(ii), 3.3(d) and 3.4(b)(i), which shall be true and correct in all material
respects) shall be deemed untrue or incorrect, and no Party shall be deemed to have breached any of its representations or warranties,
as a consequence of the existence or absence of any fact, circumstance or event unless such fact, circumstance or event, individually
or taken together in the aggregate with all other facts, circumstances or events inconsistent with such Party’s representations
or warranties contained in this Article 3, has had or is reasonably likely to have a Material Adverse Effect on such Party; provided,
that, for purposes of Sections 5.2(a) and 5.3(a) only, the representations and warranties which are qualified by references to
“material,” “Material Adverse Effect” or to the “Knowledge” of any Party shall be deemed not
to include such qualifications.
(b) Unless
the context indicates specifically to the contrary, a “Material Adverse Effect” on a Party shall mean any change,
event, development, violation, inaccuracy or circumstance the effect, individually or in the aggregate, of which is or is reasonably
likely to have, a material adverse impact on (i) the condition (financial or otherwise), property, business, assets (tangible or
intangible) or results of operations or prospects of such Party taken as a whole or (ii) prevents or materially impairs, or would
be reasonably likely to prevent or materially impair, the ability of such Party to perform its obligations under this Agreement
or to timely consummate the Merger, the Bank Merger, or the other transactions contemplated by this Agreement; provided, however,
that “Material Adverse Effect” shall not be deemed to include for purposes of (b)(i) above, (A) changes after the date
of this Agreement in GAAP or regulatory accounting requirements for the financial services industry, (B) changes after the date
of this Agreement in laws, rules or regulations or interpretations of laws, rules or regulations by Governmental Authorities of
general applicability to companies in the industry in which such Party and its subsidiaries operate, and (C) changes after the
date of this Agreement in general economic or market conditions in the United States or any state or territory thereof, in each
case generally affecting other companies in the industry in which such Party and its subsidiaries operate, except with respect
to clauses (A), (B) and (C) to the extent that the effects of such changes are disproportionately adverse to the business, assets,
operations, prospects, condition (financial or otherwise) or results of operations of such Party and its Subsidiaries, as compared
to other companies in the industry in which such Party and its Subsidiaries operate; or for purposes of (b)(ii) above, the impact
of actions and omissions of a Party (or any of its Subsidiaries) taken with the prior informed consent of the other Party in contemplation
of the transactions contemplated hereby. Similarly, unless the context indicates specifically to the contrary, a “Material
Adverse Change” is an event, change or occurrence resulting in a Material Adverse Effect on such Party and its subsidiaries,
taken as a whole.
3.3 Representations
and Warranties of the Company. Subject to and giving effect to Sections 3.1 and 3.2 and except as set forth in the
Company Disclosure Letter, Holding and the Bank, jointly and severally, hereby represent and warrant to Seacoast as follows:
(a) Organization,
Standing, and Power. Each Subsidiary of Holding is listed in Section 3.3(a) of the Company Disclosure Letter. Holding and each
of its Subsidiaries are duly organized, validly existing, and (as to corporations) are in good standing under the Laws of the jurisdiction
of its formation. Holding and each of its Subsidiaries have the requisite corporate power and authority to own, lease, and operate
their properties and assets and to carry on their businesses as now conducted. Holding and each of its Subsidiaries are duly qualified
or licensed to do business and in good standing in the States of the United States and foreign jurisdictions where the character
of their assets or the nature or conduct of their business requires them to be so qualified or licensed. Holding is a bank holding
company within the meaning of the BHC Act. The Bank is a Florida state bank. The
Bank is an “insured institution” as defined in the Federal Deposit Insurance Act and applicable regulations thereunder,
and its deposits are insured by the Bank Insurance Fund.
(b) Authority;
No Breach of Agreement.
(i) Holding
and the Bank each has the corporate power and authority necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action (including valid
authorization and adoption of this Agreement by its duly constituted Board of Directors and, in the case of the Bank, its sole
shareholder), subject only to the Holding Shareholder Approval and such regulatory approvals as are required by law. Subject to
the Holding Shareholder Approval and assuming due authorization, execution, and delivery of this Agreement by each of SBC and SNB,
this Agreement represents a legal, valid, and binding obligation of each of Holding and the Bank enforceable against Holding and
the Bank in accordance with its terms (except in all cases as such enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship, and other laws now or hereafter in effect relating to or affecting the
enforcement of creditors’ rights generally or the rights of creditors of insured depository institutions, (B) general equitable
principles and (C) laws relating to the safety and soundness of insured depository institutions, and except that no representation
is made as to the effect or availability of equitable remedies or injunctive relief (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and except that the availability of the equitable remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).
(ii) As
of the date hereof, Holding’s Board of Directors has (A) by the affirmative vote of all directors voting, which constitutes
at least a majority of the entire Board of Directors of Holding, duly approved and declared advisable this Agreement and the Merger
and the other transactions contemplated hereby, including the Bank Merger Agreement and the Bank Merger; (B) determined that
this Agreement and the transactions contemplated hereby are advisable and in the best interests of Holding and the holders of Holding
Stock; (C) resolved to recommend adoption of this Agreement, the Merger and the other transactions contemplated hereby to
the holders of shares of Holding Stock (such recommendations being the “Holding Directors’ Recommendation”);
and (D) directed that this Agreement be submitted to the holders of shares of Holding Stock for their adoption.
(iii) The
Bank’s Board of Directors has, by the affirmative vote of all directors voting, which constitutes at least a majority of
the entire Board of Directors of Holding, duly approved and declared advisable the Bank Merger Agreement, the Bank Merger and the
other transactions contemplated hereby and thereby.
(iv) Neither
the execution and delivery of this Agreement or the Bank Merger Agreement by it nor the consummation by it of the transactions
contemplated hereby or thereby, nor compliance by it with any of the provisions hereof or thereof, will (A) violate, conflict
with or result in a breach of any provision of its Organizational Documents, (B) except as set forth in Section 3.3(b)(iv)
of the Company Disclosure Letter, constitute or result in a Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any material assets of Holding or its Subsidiaries under, any Contract or Permit, or (C) subject to
receipt of the Regulatory Consent and the expiration of any waiting period required by Law, violate any Law or Order applicable
to Holding or its Subsidiaries or any of their respective material assets.
(v) Other
than in connection or compliance with the provisions of the Securities Laws, and other than (A) the Regulatory Consents, (B) notices
to or filings with the Internal Revenue Service or the Pension Benefit Guaranty Corporation or both with respect to any Benefit
Plans, and (C) as set forth in Section 3.3(b)(v)(C) of the Company Disclosure Letter, no notice to, filing with, or Consent
of, any Governmental Authority is necessary in connection with the execution, delivery or performance of this Agreement and the
consummation by it of the Merger, the Bank Merger and the other transactions contemplated by this Agreement.
(c) Capital
Stock. Holding’s authorized capital stock consists of (i) 15,000,000 shares of Holding Common Stock, of which, as
of the date of this Agreement, 3,266,481 shares are validly issued and outstanding, and (ii) 1,000,000 authorized shares of
Holding Preferred Stock, of which, as of the date of this Agreement, (A) 300,000 shares of Holding Preferred A Stock are
authorized, of which, as of the date of this Agreement, 235,421 shares are validly issued and outstanding, and (B)
10,000 shares of Holding Preferred B Stock, of which, as of the date of this Agreement, 1,481 shares are validly issued
and outstanding. Set forth in Section 3.3(c) of the Company Disclosure Letter is a true and complete schedule of all outstanding
Rights to acquire shares of Holding Common Stock, including grant date, vesting schedule, exercise price, expiration date and the
name of the holder of such Rights. None of the Rights are “in the money” as of the date hereof. Except as set forth
in this Section 3.3(c) or in Section 3.3(c) of the Company Disclosure Letter, there are no shares of Holding Common Stock or other
equity securities of Holding outstanding and no outstanding Rights relating to the Holding Common Stock, and no Person has any
Contract or any right or privilege (whether pre-emptive or contractual) capable of becoming a Contract or Right for the purchase,
subscription or issuance of any securities of Holding. All of the outstanding shares of Holding Common Stock are duly and validly
issued and outstanding and are fully paid and, except as expressly provided otherwise under applicable Law, nonassessable under
the FBCA. None of the outstanding shares of Holding Common Stock has been issued in violation of any preemptive rights of the current
or past shareholders of Holding. There are no Contracts among Holding and its shareholders or by which Holding is bound with respect
to the voting or transfer of Holding Common Stock or the granting of registration rights to any holder thereof. All of the outstanding
shares of Holding Capital Stock and all Rights to acquire shares of Holding Capital Stock have been issued in compliance with all
applicable federal and state Securities Laws. All issued and outstanding shares of capital stock of its Subsidiaries have been
duly authorized and are validly issued, fully paid and nonassessable. All of the outstanding shares of capital stock of its Subsidiaries
are owned by Holding or a wholly owned Subsidiary thereof, free and clear of all Liens. None of its Subsidiaries has outstanding
any Right to acquire any shares of its capital stock or any security convertible into such shares, or has any obligation or commitment
to issue, sell or deliver any of the foregoing or any shares of its capital stock. The outstanding capital stock of each of its
Subsidiaries has been issued in compliance with all legal requirements and is not subject to any preemptive or similar rights.
Neither Holding nor any of its Subsidiaries has any subsidiaries (other than the Bank and the Subsidiaries) or any direct or indirect
ownership interest in any firm, corporation, bank, joint venture, association, partnership or other entity.
(d) Financial
Statements; Regulatory Reports.
(i) Holding
has made available or delivered to Seacoast true and complete copies of (A) all monthly reports and financial statements of Holding
and its Subsidiaries that were prepared for Holding’s or the Bank’s Board of Directors since December 31, 2013, including
the Holding Financial Statements; (B) the annual report of Bank Holding Companies to the Federal Reserve Board for the year ended
December 31, 2013, of Holding and its Subsidiaries required to file such reports; (C) all call reports and consolidated and parent
company only financial statements, including all amendments thereto, made to the Federal Reserve Board, and the FDIC since December
31, 2013, of Holding’s and its Subsidiaries required to file such reports; and (D) Holding’s Annual Report to Shareholders
for the year ended 2013 and all subsequent Quarterly Reports to Shareholders.
(ii) Holding
Financial Statements have been (and all financial statements to be delivered to Seacoast as required by this Agreement will be)
prepared in accordance with GAAP applied on a consistent basis throughout the periods covered. Holding’s Financial Statements
fairly present the financial position, results of operations, changes in shareholders’ equity and cash flows of Holding and
its Subsidiaries as of the dates thereof and for the periods covered thereby. All call and other regulatory reports referred to
above have been filed on the appropriate form and prepared in all material respects in accordance with such forms’ instructions
and the applicable rules and regulations of the regulating federal and/or state agency. As of the date of the latest balance sheet
forming part of Holding’s Financial Statements (the “Holding Latest Balance Sheet”), none of Holding or
its Subsidiaries has had, nor are any of such entities’ assets subject to, any material liability, commitment, indebtedness
or obligation (of any kind whatsoever, whether absolute, accrued, contingent, known or unknown, matured or unmatured) that is not
reflected and adequately provided for in accordance with GAAP. No report, including any report filed with the FDIC, the Federal
Reserve Board or other banking regulatory agency, and no report, proxy statement, registration statement or offering materials
made or given to shareholders of Holding or the Bank since January 1, 2012, as of the respective dates thereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. No report, including any report filed with the
FDIC, the Federal Reserve Board, or other banking regulatory agency, and no report, proxy statement, registration statement or
offering materials made or given to shareholders of Holding or the Bank to be filed or disseminated after the date of this Agreement
will contain any untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they will be made, not misleading. Holding’s Financial
Statements are supported by and consistent with the general ledger and detailed trial balances of investment securities, loans
and commitments, depositors’ accounts and cash balances on deposit with other institutions, copies of which have been made
available to Seacoast. Holding and the Bank have timely filed all reports and other documents required to be filed by them with
the FDIC and the Federal Reserve Board. The call reports of the Bank and accompanying schedules as filed with the FDIC, for each
calendar quarter beginning with the quarter ended December 31, 2012, through the Closing Date have been, and will be, prepared
in accordance with applicable regulatory requirements, including applicable regulatory accounting principles and practices through
periods covered by such reports.
(iii) Each
of Holding and its Subsidiaries maintains accurate books and records reflecting its assets and liabilities and maintains proper
and adequate internal accounting controls, which provide assurance that (A) transactions are executed with management’s authorization;
(B) transactions are recorded as necessary to permit preparation of the consolidated financial statements of Holding in accordance
with GAAP and to maintain accountability for Holding’s consolidated assets; (C) access to Holding’s assets is permitted
only in accordance with management’s authorization; (D) the reporting of Holding’s assets is compared with existing
assets at regular intervals and (E) accounts, notes and other receivables and assets are recorded accurately, and proper and adequate
procedures are implemented to effect the collection thereof on a current and timely basis. Such records, systems, controls, data
and information of Holding and its Subsidiaries are recorded, stored maintained and operated under means (including any electronic,
mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control Holding
or its Subsidiaries. The corporate record books of Holdings and its Subsidiaries are complete and accurate in all material respects
and reflect all meetings, consents and other actions of the boards of directors and shareholders of Holdings and its Subsidiaries,
respectively.
(iv) Except
as disclosed in Section 3.3(d)(iv) of the Company’s Disclosure Letter, since January 1, 2012, neither Holding nor any Subsidiary
nor any current director, officer, nor to Holding’s Knowledge, any former officer or director or current employee, auditor,
accountant or representative of Holding or any Subsidiary has received or otherwise had or obtained Knowledge of any complaint,
allegation, assertion or claim, whether written or oral, regarding a material weakness, significant deficiency or other defect
or failure in the accounting or auditing practices, procedures, methodologies or methods of Holding or any Subsidiary or their
respective internal accounting controls. No attorney representing Holding or any Subsidiary, whether or not employed by Holding
or any Subsidiary, has reported evidence of a material violation (as such term is interpreted under Section 307 of the Sarbanes-Oxley
Act and the SEC’s regulations thereunder) by Holding or any Subsidiary or any officers, directors, employees or agents of
Holding or any of its Subsidiaries to Holding’s Board of Directors or any committee thereof or to any director or officer
of Holding. For purposes of the Agreement, Knowledge of Holding shall mean the actual knowledge of the individuals listed in Section
3.3(d)(iv) of the Company Disclosure Letter, after reasonable inquiry.
(v) Holding’s
independent public accountants, which have expressed their opinion with respect to the Holding Financial Statements (including
the related notes), are and have been throughout the periods covered by such Financial Statements (A) a registered public accounting
firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act) (to the extent applicable during such period), (B) “independent”
with respect to Holding within the meaning of Regulation S-X and (C) with respect to Holding, in compliance with subsections (g)
through (l) of Section 10A of the 1934 Act and related Securities Laws. Section 3.3(d)(v) of the Company Disclosure Letter lists
all nonaudit services performed by Holding’s independent public accountants for Holding and its Subsidiaries since January
1, 2012.
(vi) There
is no transaction, arrangement or other relationship between Holding or any of its Subsidiaries and any unconsolidated or other
affiliated entity that is not reflected in the Holding Financial Statements. Holding is not aware of (A) any significant deficiency
in the design or operation of internal controls which could adversely affect Holding’s ability to record, process, summarize
and report financial data or any material weaknesses in internal controls or (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in Holding’s internal controls. Since December 31, 2013, there
have been no significant changes in internal controls or in other factors that could significantly affect internal controls of
Holding.
(vii) None
of Holding or its Subsidiaries has any Liabilities that are reasonably likely to have, individually or in the aggregate, a Holding
Material Adverse Effect, except Liabilities which are accrued or reserved against in the consolidated balance sheet of Holding
as of December 31, 2014, included in the Holdings Financial Statements delivered prior to the date of this Agreement or reflected
in the notes thereto. None of Holding or its Subsidiaries has incurred or paid any Liability since December 31, 2014, except for
such Liabilities incurred or paid (A) in the ordinary course of business consistent with past business practice and which are not
reasonably likely to have, individually or in the aggregate, a Holding Material Adverse Effect or (B) in connection with the transactions
contemplated by this Agreement. Except as disclosed in Section 3.3(d)(vii) of the Company Disclosure Letter, none of Holding or
its Subsidiaries is directly or indirectly liable, by guarantee or otherwise, to assume any Liability or any Person for any amount
in excess of $10,000. Except (x) as reflected in Holdings latest Balance Sheet or liabilities described in any notes thereto (or
liabilities for which neither accrual nor footnote disclosure is required pursuant to GAAP) or (y) for liabilities incurred in
the ordinary course of business since January 1, 2014 consistent with past practice or in connection with this Agreement or the
transactions contemplated hereby, neither Holding nor any of its Subsidiaries has any Liabilities or obligations of any nature.
Holding has delivered to SBC true and complete Holding Financial Statements as of December 31, 2014.
(viii) Prior
to the Effective Time, Holding shall deliver to Seacoast true and complete copies of (A) all monthly reports and financial statements
of Holding and its Subsidiaries that were prepared for Holdings or the Bank since December 31, 2014, including the Holding 2015
Financial Statements; (B) the annual report of Bank Holding Companies to the Federal Reserve Board for the year ended December
31, 2014, of Holding and its Subsidiaries required to file such reports; and (C) Holding’s Annual Report to Shareholders
for the year ended 2014 and all subsequent Quarterly Reports to Shareholders, if any.
(e) Absence
of Certain Changes or Events. Since December 31, 2013, (A) Holding and each of its Subsidiaries has conducted its business
only in the ordinary course, (B) neither Holding nor any of its Subsidiaries has taken action which, if taken after the date
of this Agreement, would constitute a breach of Section 4.1 or 4.2, and (C) there have been no events, changes, or occurrences
that have had, or are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Holding and its
Subsidiaries, taken as a whole.
(f) Tax
Matters.
(i) All
Taxes of Holding and each of its Subsidiaries that are or were due or payable (whether or not shown on any Tax Return) have been
fully and timely paid. Holding and each of its Subsidiaries has timely filed all Tax Returns in all jurisdictions in which Tax
Returns are required to have been filed by it or on its behalf, and each such Tax Return is complete and accurate in all material
respects. Except as disclosed in Section 3.3(f)(i) of the Company Disclosure Letter, neither Holding nor any of its Subsidiaries
is the beneficiary of any extension of time within which to file any Tax Return. Except as disclosed in Section 3.3(f)(i) of the
Company Disclosure Letter, there have been no examinations or audits of any Tax Return by any Taxing Authority. Holding and each
of its Subsidiaries has made available to Seacoast true and correct copies of the United States federal, state and local income
Tax Returns filed by it for each of the three most recent fiscal years ended on or before December 31, 2012. No claim has
ever been made by a Taxing Authority in a jurisdiction where Holding or any of its Subsidiaries does not file a Tax Return that
Holding or any of its Subsidiaries may be subject to Taxes by that jurisdiction, and to the Knowledge of Holding and each of its
Subsidiaries, no basis for such a claim exists.
(ii) Neither
Holding nor any of its Subsidiaries has received any notice of assessment or proposed assessment in connection with any Tax, and
there is no threatened or pending dispute, action, suit, proceeding, claim, investigation, audit, examination, or other Litigation
regarding any Tax of Holding, any of its Subsidiaries or the assets of Holding or any of its Subsidiaries. No officer or employee
responsible for Tax matters of Holding or any of its Subsidiaries expects any Taxing Authority to assess any additional Tax for
any period for which a Tax Return has been filed. There are no agreements, waivers or other arrangements providing for an extension
of time with respect to the assessment of any Tax or deficiency against Holding or any of its Subsidiaries, and neither Holding
nor any of its Subsidiaries has waived or extended the applicable statute of limitations for the assessment or collection of any
Tax or agreed to a Tax assessment or deficiency.
(iii) Except
as disclosed in Section 3.3(f)(iii) of the Company’s Disclosure Letter, neither Holding nor any of its Subsidiaries is a
party to a Tax allocation, sharing, indemnification or similar agreement or any agreement pursuant to which it has any obligation
to any Person with respect to Taxes, and neither Holding nor any of its Subsidiaries has been a member of an affiliated group filing
a consolidated federal or state or local income Tax Return or any combined, affiliated or unitary group for any Tax purpose (other
than the group of which it is currently a member), and neither Holding nor any of its Subsidiaries has any Tax liability under
Treasury Regulation Section 1.1502-6 or any similar provision of Law, or as a transferee or successor, by contract or otherwise.
(iv) The
proper and accurate amounts of Tax have been withheld by Holding and each of its Subsidiaries and timely paid to the appropriate
Taxing Authority for all periods through the Effective Time in compliance with all Tax withholding provisions of all applicable
federal, state, local and foreign Laws, rules and regulations, including Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee or independent contractor, and Taxes required to be withheld and paid pursuant to Sections
1441, 1442 and 3406 of the Internal Revenue Code or similar provisions under state, local or foreign Law.
(v) Neither
Holding nor any of its Subsidiaries has been a party to any distribution occurring during the five-year period ending on the date
hereof in which the parties to such distribution treated the distribution as one to which Section 355 of the Internal Revenue
Code applied. No Liens for Taxes exist with respect to any assets of Holding or any of its Subsidiaries, except for statutory Liens
for Taxes not yet due and payable.
(vi) Neither
Holding nor any of its Subsidiaries is a controlled foreign corporation within the meaning of the Internal Revenue Code. Holding
and each of its Subsidiaries has complied with all of the income inclusion and Tax reporting provisions of the U.S. anti-deferral
Tax regimes, including the controlled foreign corporation, passive foreign investment company and foreign personal holding company
regimes.
(vii) Neither
Holding nor any of its Subsidiaries has made any payments, is obligated to make any payments, or is a party to any contract that
could obligate it to make any payments that could be disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code or any comparable provision of state or local Tax Law.
(viii) Neither
Holding nor any of its Subsidiaries is or has ever been a United States real property holding corporation within the meaning of
Internal Revenue Code Section 897(c) or any comparable provision of state Tax Law. Neither Holding nor any of its Subsidiaries
has been or will be required to include any item in income or exclude any item of deduction from taxable income for any Tax period
(or portion thereof) ending after the Closing Date: (A) pursuant to Section 481 of the Internal Revenue Code or any comparable
provision under state, local or foreign Tax Laws; (B) as a result of any ‘‘closing agreement’’ as described
in Section 7121 of the Internal Revenue Code or any comparable provision under state, local, or foreign Tax Laws, executed on or
prior to the Closing Date; (C) intercompany transaction or excess loss account described in Treasury Regulations under Section
1502 of the Internal Revenue Code or any comparable provision under state, local, or foreign Tax Laws; (D) installment sale or
open transaction disposition made on or prior to the Closing Date; or (E) prepaid amount received on or prior to the Closing Date.
(ix) The
current net operating losses of Holding and each of its Subsidiaries are described in Section 3.3(f)(ix) of the Company Disclosure
Letter and none of such net operating losses are capital losses or, except as disclosed in Section 3.3(f)(ix) of the Company Disclosure
Letter, subject to any limitation on their use under the provisions of Sections 382 or 269 of the Internal Revenue Code or any
other provisions of the Internal Revenue Code or the Treasury Regulations or any comparable provision of state or local Tax Law
dealing with the utilization of net operating losses, other than any such limitations as may arise as a result of the consummation
of the transactions contemplated by this Agreement.
(x) Holding
and each of its Subsidiaries has disclosed on its Tax Returns any position taken for which substantial authority (within the meaning
of Internal Revenue Code Section 6662(d)(2)(B)(i) or comparable provision of state or local Tax Law) did not exist at the time
the return was filed. Neither Holding nor any of its Subsidiaries has participated in any reportable transaction, as defined in
Treasury Regulation Section 1.6011-4(b)(1) or any comparable provision of state or local Tax Law, or a transaction substantially
similar to a reportable transaction. Neither Holding nor any of its Subsidiaries is a party to any joint venture, partnership,
or other arrangement or contract which could be treated as a partnership for federal income Tax purposes.
(xi) The
unpaid Taxes of Holding and each of its Subsidiaries (A) did not, as of the date of the Holding Latest Balance Sheet, exceed the
reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the Holding Latest Balance Sheet (rather than in any notes thereto) and (B) do not exceed
that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Holding
and each of its Subsidiaries in filing their Tax Returns. Since the date of the Holding Latest Balance Sheet, neither Holding nor
any of its Subsidiaries has incurred any liability for Taxes arising from extraordinary gains or losses, as that term is used in
GAAP, outside the ordinary course of business consistent with past practice.
(g) Environmental
Matters.
(i) Holding
and the Bank have delivered, or caused to be delivered to Seacoast, or provided Seacoast access to, true and complete copies of,
all environmental site assessments, test results, analytical data, boring logs, and other environmental reports and studies held
by Holding and each of its Subsidiaries relating to their respective Properties and Facilities.
(ii) Holding
and each of its Subsidiaries and their respective Facilities and Properties are, and have been, in compliance with all Environmental
Laws, except for violations that are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect,
and there are no past or present events, conditions, circumstances, activities or plans related to the Properties or Facilities
that did or would violate or prevent compliance or continued compliance with any of the Environmental Laws.
(iii) There
is no Litigation pending or threatened before any Governmental Authority or other forum in which Holding or its Subsidiaries or
any of their respective Properties or Facilities (including but not limited to Properties and Facilities that secure or secured
loans made by Holding or its Subsidiaries and Properties and Facilities now or formerly held, directly or indirectly, in a fiduciary
capacity by Holding or its Subsidiaries) has been or, with respect to threatened Litigation, may be named as a defendant (A) for
alleged noncompliance (including by any predecessor) with or Liability under any Environmental Law or (B) relating to the release,
discharge, spillage, or disposal into the environment of any Hazardous Material, whether or not occurring at, on, under, adjacent
to, or affecting (or potentially affecting) any such Properties or Facilities.
(iv) During
or prior to the period of (A) Holding or any of its Subsidiaries’ ownership or operation (including but not limited to ownership
or operation, directly or indirectly, in a fiduciary capacity) of, or (B) Holding or any of its Subsidiaries’ participation
in the management (including but not limited to such participation, directly or indirectly, in a fiduciary capacity) of, there
have been no releases, discharges, spillages, or disposals of Hazardous Material in, on, under, adjacent to, or affecting (or potentially
affecting) such Properties or Facilities.
(h) Compliance
with Permits, Laws and Orders.
(i) Holding
and each of its Subsidiaries has in effect all Permits and has made all filings, applications, and registrations with Governmental
Authorities that are required for it to own, lease, or operate its material assets and to carry on its business as now conducted
and there has occurred no Default under any Permit applicable to their respective businesses or employees conducting their respective
businesses.
(ii) Neither
Holding nor any of its Subsidiaries is in Default under any Laws or Orders applicable to its business or employees conducting its
business. As of the date of this Agreement, none of Holdings or its Subsidiaries knows of any reason why all Regulatory Approvals
required for the consummation of the transactions contemplated by this Agreement should not be obtained on a timely basis.
(iii) Neither
Holding nor any of its Subsidiaries has received any notification or communication from any Governmental Authority, (A) asserting
that Holding or any of its Subsidiaries is in Default under any of the Permits, Laws or Orders which such Governmental Authority
enforces, (B) threatening to revoke any Permits, or (C) requiring or advising that it may require Holding or any of its
Subsidiaries (x) to enter into or consent to the issuance of a cease and desist order, formal agreement, directive, commitment,
or memorandum of understanding, or (y) to adopt any resolution of its Board of Directors or similar undertaking that restricts
materially the conduct of its business or in any material manner relates to its management.
(iv) Holding
and each of its Subsidiaries are and, at all times since January 1, 2012, have been, in compliance with all Laws applicable to
their businesses, operations, properties or assets, including Sections 23A and 23B of the Federal Reserve Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, the Bank Secrecy
Act and all other applicable fair lending laws and other laws relating to discriminatory business practices.
(v) Except
as described in Section 3.3(h)(v) of the Company Disclosure Letter there (A) is no unresolved violation, criticism, or exception
by any Governmental Authority with respect to any report or statement relating to any examinations or inspections of Holding or
any of its Subsidiaries, (B) have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental
Authority with respect to its or any of its Subsidiaries’ business, operations, policies or procedures since December 31,
2011, and (C) is not any pending or, to the Knowledge of Holding, threatened, nor has any Governmental Authority indicated an intention
to conduct any, investigation or review of Holding or any of its Subsidiaries.
(vi) Neither
Holding, the Bank (nor to the Company’s Knowledge any of their respective directors, executives, representatives, agents
or employees) (A) has used or is using any corporate funds for any illegal contribution, gift, entertainment or other unlawful
expense relating to political activity, (B) has used or is using any corporate funds for any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds, (C) has violated or is violating any provision
of the Foreign Corrupt Practices Act of 1977, as amended, or (D) has made any bribe, unlawful rebate, payoff, influence payment,
kickback or other unlawful payment.
(vii) Except
as required by the Bank Secrecy Act, to Company’s Knowledge, no employee of Holding or any Subsidiary has provided or is
providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation
or possible violation of any applicable Law by Holding or any of its Subsidiaries or any employee thereof acting in its capacity
as such. Neither Holding nor any Subsidiary nor any officer, employee, contractor, subcontractor or agent of Holding or any such
Subsidiary has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against any employee of
Holding or any Subsidiary in the terms and conditions of employment because of any act of such employee described in 18 U.S.C.
Section 1514A(a).
(viii) Since
January 1, 2012, Holding and each of its Subsidiaries have filed all reports and statements, together with any amendments required
to be made with respect thereto, that Holding and each of its Subsidiaries was required to file with any Governmental Authority
and all other reports and statements required to be filed by Holding and each of its Subsidiaries since January 1, 2012, including
any report or statement required to be filed pursuant to the Laws of the United States, any state or political subdivision, any
foreign jurisdiction, or any other Governmental Authority have been so filed, and Holding and each of its Subsidiaries have paid
all fees and assessments due and payable in connection therewith.
(ix) The
Bank is authorized to act as a corporate fiduciary.
(i) Labor
Relations. Neither Holding nor any of its Subsidiaries is the subject of any Litigation asserting that Holding or any of its
Subsidiaries has committed an unfair labor practice (within the meaning of the National Labor Relations Act or comparable state
Law) or seeking to compel Holding or any of its Subsidiaries to bargain with any labor organization as to wages or conditions of
employment, nor is Holding or any of its Subsidiaries a party to or bound by any collective bargaining agreement, Contract, or
other agreement or understanding with a labor union or labor organization, nor is there any strike or other labor dispute involving
it pending or, to the Knowledge of Holding, threatened, nor, to the Knowledge of Holding, is there any activity involving its or
any of its Subsidiaries’ employees seeking to certify a collective bargaining unit or engaging in any other organization
activity.
(j) Employee
Benefit Plans.
(i) Section 3.3(j)(i)
of the Company Disclosure Letter sets forth each Benefit Plan whether or not such Benefit Plan is or is intended to be (A) arrived
at through collective bargaining or otherwise, (B) funded or unfunded, (C) covered or qualified under the Internal Revenue Code,
ERISA, or other applicable law, (D) set forth in an employment agreement, consulting agreement, individual award agreement, or
(E) written or oral.
(ii) The
Company has delivered to Seacoast prior to the date of this Agreement correct and complete copies of the following documents: (A) all
Benefit Plan documents (and all amendments thereto), (B) all trust agreements or other funding arrangements for its Benefit Plans
(including insurance or group annuity Contracts), and all amendments thereto, (C) with respect to any Benefit Plans or amendments,
the most recent determination letters, as well as a correct and complete copy of each pending application for a determination letter
(if any), and all rulings, opinion letters, information letters, or advisory opinions issued by the Internal Revenue Service, the
United States Department of Labor, or the Pension Benefit Guaranty Corporation after December 31, 1994, (D) annual reports
or returns, audited or unaudited financial statements, actuarial valuations and reports, and summary annual reports prepared for
any Benefit Plans with respect to the most recent plan year, including but not limited to the annual report on Form 5500 (if such
report was required), (E) the most recent summary plan description for each Benefit Plan for which a summary plan description is
required by Law, including any summary of material modifications thereto, and (F) in the case of Benefit Plans that are individual
award agreements under the Holding Stock Plan, a representative form of award agreement together with a list of persons covered
by such representative form and the number of shares of Holding Common Stock covered thereby.
(iii) All
of the Benefit Plans have been administered in compliance with their terms and with the applicable provisions of ERISA; the Code;
the Patient Protection and Affordable Care Act, in combination with the Health Care and Reconciliation Act of 2010 (together, the
“Affordable Care Act”); and any other applicable Laws. All Benefit Plans that are employee pension benefit plans, as
defined in Section 3(2) of ERISA, that are intended to be tax qualified under Section 401(a) of the Code, have received a current,
favorable determination letter from the Internal Revenue Service or have filed a timely application therefor, and there are no
circumstances that will or could reasonably result in revocation of any such favorable determination letter or negative consequences
to an application therefor. Each trust created under any of its ERISA Plans has been determined to be exempt from Tax under Section 501(a)
of the Internal Revenue Code and the Company is not aware of any circumstance that will or could reasonably result in revocation
of such exemption. With respect to each of its Benefit Plans, to the Company’s Knowledge, no event has occurred that will
or could reasonably give rise to a loss of any intended Tax consequences under the Internal Revenue Code or to any Tax under Section 511
of the Internal Revenue Code. There are no pending or, to the Company’s Knowledge, threatened Litigation, governmental audits
or investigations or other proceedings, or participant claims (other than claims for benefits in the normal course of business)
with respect to any Benefit Plan.
(iv) The
Company has not engaged in a transaction with respect to any of its Benefit Plans that would subject the Company to a Tax or penalty
imposed by either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA. Neither the Company nor any administrator
or fiduciary of any of its or its Subsidiaries’ Benefit Plans (or any agent of any of the foregoing) has engaged in any transaction,
or acted or failed to act in any manner with respect to any of its Benefit Plans that could subject it to any direct or indirect
Liability (by indemnity or otherwise) for breach of any fiduciary, co-fiduciary, or other duty under ERISA. No oral or written
representation or communication with respect to any aspect of its Benefit Plans of the Company or its Subsidiaries has been made
to employees of the Company or any of its Subsidiaries that is not in conformity with the written or otherwise preexisting terms
and provisions of such plans.
(v) The
Company, any Subsidiaries, or any ERISA Affiliates thereof do not and have never sponsored, maintained, contributed to, or been
obligated under ERISA or otherwise to contribute to (A) a “defined benefit plan” (as defined in ERISA Section 3(35)
or Internal Revenue Code Section 414(j); (B) a “multi-employer plan” (as defined in ERISA Sections 3(37) and 4001(a)(3);
(C) a “multiple employer plan” (meaning a plan sponsored by more than one employer within the meaning of ERISA Sections
4063 or 4064 or Internal Revenue Code Section 413(c); or (D) a “multiple employer welfare arrangement” as defined in
ERISA Section 3(40). The Company and its ERISA Affiliates have not incurred and there are no circumstances under which either could
reasonably incur any Liability under Title IV of ERISA or Internal Revenue Code Section 412.
(vi) Neither
the Company nor any of its Subsidiaries nor ERISA Affiliates has any incurred current or projected obligations or Liability for
post-employment or post-retirement health, medical, or life insurance benefits under any of its Benefit Plans, other than with
respect to benefit coverage mandated by Internal Revenue Code Section 4980B or other applicable Law.
(vii) No
Benefit Plan exists and there are no other Contracts, plans, or arrangements (written or otherwise) covering any Company employee
that, individually or collectively, as a result of the execution of this Agreement or the consummation of the transactions contemplated
by this Agreement (whether alone or in connection with any other event(s)), would reasonably be expected to, (A) result in
any material severance pay upon any termination of employment, (B) accelerate the time of payment or vesting or result in any material
payment or material funding (through a grantor trust or otherwise) of compensation or benefits under, materially increase the amount
payable, require the security of material benefits under or result in any other material obligation pursuant to, any such Company
Plans, contracts, plans, or arrangements, or (C) result in the payment of any amount that would, individually or in combination
with any other such payment, result in the loss of a deduction under Internal Revenue Code Section 280G or be subject to an excise
tax under Section 4999 of the Internal Revenue Code.
(viii) Each
Benefit Plan that is a “non-qualified deferred compensation plan” (as defined for purposes of Internal Revenue Code
Section 409A) is in documentary compliance with, and has been operated and administered in compliance with, Internal Revenue Code
Section 409A and the applicable guidance issued thereunder, and no Benefit Plan provides any compensation or benefits which could
subject, or have subjected, a covered service provider to gross income inclusion or tax pursuant to Internal Revenue Code Section
409A. Neither the Company nor any of its Subsidiaries has any indemnification obligation pursuant to any Contract to which the
Company or any of its Subsidiaries is a party for any Taxes imposed under Section 4999 or 409A of the Internal Revenue Code.
(k) Material
Contracts.
(i) Except
as listed in Section 3.3(k) of the Company Disclosure Letter, as of the date of this Agreement, neither Holding nor any of its
Subsidiaries, nor any of their respective assets, businesses, or operations is a party to, or is bound or affected by, or receives
benefits under, (A) any employment, severance, termination, consulting, or retirement Contract, (B) any Contract relating
to the borrowing of money by Holding or any of its Subsidiaries or the guarantee by Holding or any of its Subsidiaries of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of federal funds, fully-secured repurchase agreements,
and Federal Home Loan Bank advances of the Bank or Contracts pertaining to trade payables incurred in the ordinary course of business),
(C) any Contract containing covenants that limit the ability of Holding or any of its Affiliates to engage in any line of business
or to compete in any line of business or with any Person, or that involve any restriction of the geographic area in which, or method
by which, Holding or any of its Subsidiaries or Affiliates may carry on its business (other than as may be required by Law or any
Governmental Authority), (D) any Contract or series of related Contracts for the purchase of materials, supplies, goods, services,
equipment or other assets that (x) provides for or is reasonably likely to require annual payments by Holding or any of its
Subsidiaries of $25,000 or more or (y) have a term exceeding 12 months in duration (except those entered into in the ordinary
course of business with respect to loans, lines of credit, letters of credit, depositor agreements, certificates of deposit and
similar routine banking activities and equipment maintenance agreements that are not material), (E) any Contract between or
among Holding or any of its Subsidiaries, (F) any Contract involving Intellectual Property (excluding generally commercially available
“off the shelf” software programs licensed pursuant to “shrink wrap” or “click and accept”
licenses), (G) any Contract relating to the provision of data processing, network communications or other technical services
to or by Holding or any of its Subsidiaries, or (H) any other Contract or amendment thereto that would be required to be filed
as an exhibit to any SEC Report (as described in Items 601(b)(4) and 601(b)(10)). With respect to each of its Contracts that
is disclosed in its Disclosure Letter: (v) the Contract is in full force and effect; (w) neither Holding nor any of its
Subsidiaries is in Default thereunder; (x) neither Holding nor any of its Subsidiaries has repudiated or waived any material
provision of any such Contract; and (y) no other party to any such Contract is, to the Knowledge of Holding, in Default in
any material respect or has repudiated or waived any material provision of any such Contract. No Consent is required by any such
Contract for the execution, delivery or performance of this Agreement, the consummation of the Merger or the other transactions
contemplated hereby. All indebtedness for money borrowed of Holding and its Subsidiaries is prepayable without penalty or premium.
(ii) All
interest rate swaps, caps, floors, collars, option agreements, futures, and forward contracts, and other similar risk management
arrangements, contracts or agreements, whether entered into for its own account or for the account of one or more of its Subsidiaries
or their respective customers, were entered into (A) in the ordinary course of business consistent with past practice and
in accordance with prudent business practices and all applicable Laws and (B) with counterparties believed to be financially
responsible, and each of them is enforceable in accordance with its terms (except in all cases as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium, or similar Laws affecting the
enforcement of creditors’ rights generally and except that the availability of the equitable remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any proceeding may be brought), and is in full force
and effect. Neither Holding nor any of its Subsidiaries, nor to the Knowledge of Holding, any other party thereto, is in breach
of any of its obligations under any such agreement or arrangement. The Holding Financial Statements disclose the value of such
agreements and arrangements on a market-to-market basis in accordance with GAAP and, since January 1, 2012, there has not been
a change in such value that, individually or in the aggregate, has resulted in a Material Adverse Effect on the Company.
(l) Legal
Proceedings. There is no Litigation pending or, to the Knowledge of Holding, threatened against Holding or any of its Subsidiaries
or its or any of its Subsidiaries’ assets, interests, or rights, nor are there any Orders of any Governmental Authority or
arbitrators outstanding against Holding or any of its Subsidiaries, nor do any facts or circumstances exist that would be likely
to form the basis for any material claim against Holding or its Subsidiaries that, if adversely determined, individually or in
the aggregate, would have a Material Adverse Effect on Holding or its Subsidiaries. There is no Litigation, pending or, to the
Knowledge of Holding, threatened, against any officer, director, advisory director or employee of Holding or its Subsidiaries,
in each case by reason of any person being or having been an officer, director, advisory director or employee of Holding or its
Subsidiaries.
(m) Intellectual
Property.
(i) Except
as specifically set forth on Section 3.3(m)(i) of the Company Disclosure Letter, Holding and each of its Subsidiaries own, or are
licensed or otherwise possess legally enforceable and unencumbered rights to use, all Intellectual Property (including the Technology
Systems) that is used by Holding or its Subsidiaries in its or its Subsidiaries’ business. Neither Holding nor any of its
Subsidiaries has (A) licensed to any Person in source code form any Intellectual Property owned by Holding or any of its Subsidiaries
or (B) entered into any exclusive agreements relating to Intellectual Property owned by Holding or its Subsidiaries.
(ii) Section
3.3(m)(ii) of the Company Disclosure Letter lists all patents and patent applications, all registered and unregistered trademarks
and applications therefor, trade names and service marks, registered copyrights and applications therefor, domain names, web sites,
and mask works owned by or exclusively licensed to Holding or its Subsidiaries included in its Intellectual Property, including
the jurisdictions in which each such Intellectual Property right has been issued or registered or in which any application for
such issuance and registration has been filed. No royalties or other continuing payment obligations are due in respect of any third-party
patents, trademarks or copyrights, including software.
(iii) All
patents, registered trademarks, service marks and copyrights held by Holding and its Subsidiaries are valid and subsisting. Since
January 1, 2012, neither Holding nor any of its Subsidiaries (A) has, to the Knowledge of Holding, been sued in any Litigation
which involves a claim of infringement of any patents, trademarks, service marks, copyrights or violation of any trade secret or
other proprietary right of any third party or (B) has brought any Litigation for infringement of its Intellectual Property
or breach of any license or other Contract involving its Intellectual Property against any third party.
(n) Loan
and Investment Portfolios. All loans, discounts and financing leases in which Holding or any of its Subsidiaries is the lender
reflected on the Holding Latest Balance Sheet were as of the date hereof, and with respect to the consolidated balance sheets delivered
as of the dates subsequent to the execution of this Agreement will be as of the dates thereof, (i) at the time and under the circumstances
in which made, made for good, valuable and adequate consideration in the ordinary course of business of Holding and its Subsidiaries
and are the legal, valid and binding obligations of the obligors thereof, (ii) evidenced by genuine notes, agreements or other
evidences of indebtedness and (iii) to the extent secured, have been secured, to the Knowledge of Holding, by valid Liens that
have been perfected. Accurate lists of all loans, discounts and financing leases as of December 31, 2014 and on a monthly basis
thereafter, and of the investment portfolios of Holding and each of its Subsidiaries as of such date, have been and will be delivered
to Seacoast concurrently with the Company Disclosure Letter. Except as specifically set forth on Section 3.3(n) of the Company
Disclosure Letter, neither Holding nor any of its Subsidiaries is a party to any written or oral loan agreement, note or borrowing
arrangement, including any loan guaranty, that was, as of the most recent month-end prior to the date of this Agreement (i) delinquent
by more than 30 days in the payment of principal or interest, (ii) known by Holding or any of its Subsidiaries to be otherwise
in material default for more than 30 days, (iii) classified as “substandard,” “doubtful,” “loss,”
“other assets especially mentioned” or any comparable classification by Holding or any of its Subsidiaries or any Regulatory
Authority having jurisdiction over Holding or any of its Subsidiaries, (iv) an obligation of any director, executive officer or
10% shareholder of Holding or any of its Subsidiaries who is subject to Regulation O of the Federal Reserve Board (12 C.F.R. Part
215), or any Person controlling, controlled by or under common control with any of the foregoing, or (v) in violation of any Law.
(o) Adequacy
of Allowances for Losses. Each of the allowances for losses on loans, financing leases and other real estate included on the
Holding Latest Balance Sheet (along with any subsequent balance sheet required to be delivered hereunder) is, and with respect
to the consolidated balance sheets delivered as of the dates subsequent to the execution of this Agreement will be as of the dates
thereof, adequate in accordance with applicable regulatory guidelines and GAAP in all material respects, and, to the Knowledge
of Holding, there are no facts or circumstances that are likely to require in accordance with applicable regulatory guidelines
or GAAP a future material increase in any such provisions for losses or a material decrease in any of the allowances therefor.
Each of the allowances for losses on loans, financing leases and other real estate reflected on the books of Holding and its Subsidiaries
at all times from and after the date of the Holding Latest Balance Sheet is, and will be, adequate in accordance with applicable
regulatory guidelines and GAAP in all material respects, and, to the Knowledge of Holding, there are no facts or circumstances
that are likely to require, in accordance with applicable regulatory guidelines or GAAP, a future material increase in any of such
provisions for losses or a material decrease in any of the allowances therefor.
(p) Loans
to Executive Officers and Directors. Holding has not extended or maintained credit, arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to or for any director or executive officer (or equivalent thereof)
of the Company, except as permitted by Section 13(k) of the 1934 Act, as applicable, and as permitted by Federal Reserve Regulation
O and that have been made in accordance with the provisions of Regulation O. Section 3.3(p) of the Company Disclosure Letter identifies
any loan or extension of credit maintained by Holding to which the second sentence of Section 13(k)(1) of the 1934 Act applies.
(q) Community
Reinvestment Act. The Bank has complied in all material respects with the provisions of the Community Reinvestment Act of 1977
(“CRA”) and the rules and regulations thereunder, has a CRA rating of not less than “satisfactory”
in its most recently completed exam, has received no material criticism from regulators with respect to discriminatory lending
practices, and to the Knowledge of Holding, there are no conditions, facts or circumstances that could result in a CRA rating of
less than “satisfactory” or material criticism from regulators or consumers with respect to discriminatory lending
practices.
(r) Privacy
of Customer Information.
(i) Holding
and its Subsidiaries, as applicable, are the sole owners of all individually identifiable personal information (“IIPI”)
relating to customers, former customers and prospective customers that will be transferred to SNB or a subsidiary of SNB pursuant
to this Agreement and the Bank Merger Agreement and the other transactions contemplated hereby. For purposes of this Section 3.3(r),
“IIPI” means any information relating to an identified or identifiable natural person.
(ii) Holding
and its Subsidiaries’ collection and use of such IIPI, the transfer of such IIPI to Seacoast or any of its Subsidiaries,
and the use of such IIPI by Seacoast or any of its Subsidiaries complies with all applicable privacy policies, the Fair Credit
Reporting Act, the Gramm-Leach-Bliley Act and all other applicable state, federal and foreign privacy Laws, and any contract or
industry standard relating to privacy.
(s) Technology
Systems.
(i) Except
to the extent disclosed on Section 3.3(s)(i) of the Company Disclosure Letter, no action will be necessary as a result of the transactions
contemplated by this Agreement to enable use of the Technology Systems to continue by the Surviving Corporation and its Subsidiaries
to the same extent and in the same manner that it has been used by Holding and its Subsidiaries prior to the Effective Time.
(ii) The
Technology Systems (for a period of 18 months prior to the Effective Time) have not suffered unplanned disruption causing a Material
Adverse Effect on the Company. Except for ongoing payments due under Contracts with third parties, the Technology Systems are free
from any Liens. Access to business-critical parts of the Technology Systems is not shared with any third party.
(iii) Section
3.3(s)(iii) of the Company Disclosure Letter sets forth details of Holding’s disaster recovery and business continuity arrangements.
(iv) Neither
Holding nor any of its Subsidiaries has received notice of or is aware of any material circumstances, including the execution of
this Agreement, that would enable any third party to terminate any of its or any of its Subsidiaries’ agreements or arrangements
relating to the Technology Systems (including maintenance and support).
(t) Insurance
Policies. Holding and each of its Subsidiaries maintains in full force and effect insurance policies and bonds in such amounts
and against such liabilities and hazards of the types and amounts as (i) it reasonably believes to be adequate for its business
and operations and the value of its properties and (ii) are comparable to those maintained by other banking organizations of similar
size and complexity. An accurate list of all such insurance policies is attached as Section 3.3(t) of the Company Disclosure Letter.
Neither Holding nor any of its Subsidiaries is now liable for, nor has any such member received notice of, any material retroactive
premium adjustment. All policies are valid and enforceable and in full force and effect, and none of Holding or any of its Subsidiaries
have received any notice of a material premium increase or cancellation with respect to any of its insurance policies or bonds.
Within the last three years, none of Holding or any of its Subsidiaries have been refused any basic insurance coverage sought or
applied for (other than certain exclusions for coverage of certain events or circumstances as stated in such policies), and neither
Holding nor the Bank has any reason to believe that its existing insurance coverage cannot be renewed as and when the same shall
expire, upon terms and conditions standard in the market at the time renewal is sought as favorable as those presently in effect.
(u) Corporate
Documents. Holding has delivered to SBC, with respect to Holding and each its Subsidiaries, true and correct copies of its
Organizational Documents, and the charters of each of the committees of its board of directors, all as amended and currently in
effect. All of the foregoing, and all of the corporate minutes and stock transfer records of Holding and each of its Subsidiaries
that will be made available to SBC after the date hereof, are current, complete and correct in all material respects.
(v) State
Takeover Laws. Holding has taken all action required to be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement and the transactions contemplated hereby are exempt from, the requirements of any
“moratorium,” “control share,” “fair price,” “affiliate transaction,” “anti-greenmail,”
“business combination” or other anti-takeover Laws of any jurisdiction (collectively, “Takeover Laws”).
Holding has taken all action required to be taken by it in order to make this Agreement and the transactions contemplated hereby
comply with, and this Agreement and the transactions contemplated hereby do comply with, the requirements of any provisions of
its Organizational Documents concerning “business combination,” “fair price,” “voting requirement,”
“constituency requirement” or other related provisions.
(w) Certain
Actions. Neither Holding nor any of its Subsidiaries or Affiliates has taken or agreed to take any action, and to the Knowledge
of Holding, there are no facts or circumstances that are reasonably likely to (i) prevent the Merger and the Bank Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially impede or delay
receipt of any required Regulatory Consents. To the Knowledge of Holding, there exists no fact, circumstance, or reason that would
cause any required Consent not to be received in a timely manner.
(x) Real
and Personal Property. Holding and its Subsidiaries have good, valid and marketable title to all material real property owned
by them free and clear of all Liens, except Permitted Liens and other standard exceptions commonly found in title policies in the
jurisdiction where such real property is located, and such encumbrances and imperfections of title, if any, as do not materially
detract from the value of the properties and do not materially interfere with the present or proposed use of such properties or
otherwise materially impair such operations. Holding and its Subsidiaries have good, valid and marketable title to, or in the case
of leased property and leased tangible assets, a valid leasehold interest in, all material tangible personal property owned by
them, free and clear of all Liens (other than Permitted Liens). Each of Holding and its Subsidiaries has complied with the terms
of all leases to which it is a party, and all such leases are valid and binding in accordance with their respective terms and in
full force and effect, and there is not under any such lease any material existing default by Holding or such Subsidiary or, to
the knowledge of Company, any other party thereto, or any event which with notice or lapse of time or both would constitute such
a default, except for any such noncompliance, default or failure to be in full force and effect that, individually or in the aggregate,
has not had a Holding Material Adverse Effect.
(y) Brokers
and Finders. Except for Hovde Group LLC and Austin Associates, LLC, neither Holding nor any of its Subsidiaries, nor any of
their respective directors, officers, employees or Representatives, has employed any broker or finder or incurred any Liability
for any financial advisory fees, investment bankers’ fees, brokerage fees, commissions, or finders’ fees in connection
with this Agreement or the transactions contemplated hereby.
(z) Fairness
Opinion. Prior to the execution of this Agreement, Holding has received an executed opinion of Austin Associates, LLC
to the effect that as of the date thereof and based upon and subject to the matters set forth therein, the Exchange Ratio is
fair, from a financial point of view, to the shareholders of Holding and a signed copy of such opinion has been delivered to SBC.
Such opinion has not been amended or rescinded as of the date of this Agreement.
(aa) Transactions
with Affiliates. There are no agreements, contracts, plans, arrangements or other transactions between Holding or any of its
Subsidiaries, on the one hand, and any (1) officer or director of Holding or any of its Subsidiaries, (2) record or beneficial
owner of five percent (5%) or more of the voting securities of Holding, (3) affiliate or family member of any such officer,
director or record or beneficial owner or (4) any other affiliate of Holding, on the other hand, except those of a type available
to non-affiliates of Holding generally.
(bb) Representations
Not Misleading. No representation or warranty by Holding in this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they
were made, not misleading.
3.4 Representations
and Warranties of Seacoast. Subject to and giving effect to Section 3.2, SBC and SNB, jointly and severally, hereby represent
and warrant to the Company as follows:
(a) Organization,
Standing, and Power. Each of SBC and SNB is duly organized, validly existing, and (as to SBC) in good standing under the Laws
of the jurisdiction in which it is incorporated. SBC is a bank holding company within the meaning of the BHC Act. SNB is a national
banking association domiciled in the State of Florida. SNB is an “insured
institution” as defined in the Federal Deposit Insurance Act and applicable regulations thereunder, and its deposits are
insured by the Bank Insurance Fund.
(b) Authority;
No Breach of Agreement.
(i) SBC
and SNB each have the corporate power and authority necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement, and the consummation
of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action (including valid
authorization and adoption of this Agreement by its duly constituted Board of Directors and in the case of SNB, its sole shareholder).
Assuming due authorization, execution and delivery of this Agreement by Holding and the Bank, this Agreement represents a legal,
valid and binding obligation of each of SBC and SNB, enforceable against each of SBC and SNB, in accordance with its terms (except
in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium or similar Laws affecting the enforcement of creditors’ rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding
may be brought).
(ii) SBC’s
Board of Directors has duly approved and declared advisable this Agreement and the Merger and the other transactions contemplated
hereby, including the Bank Merger Agreement and the Bank Merger. SNB’s Board of Directors has, by the affirmative vote of
all directors voting, which constitute at least a majority of the entire Board of Directors of SNB, duly approved and declared
advisable the Bank Merger Agreement, the Bank Merger and the other transactions contemplated hereby and thereby.
(iii) Neither
the execution and delivery of this Agreement by SBC or SNB, nor the consummation by either of them of the transactions contemplated
hereby, nor compliance by them with any of the provisions hereof, will (A) violate, conflict with or result in a breach of any
provision of their respective Organizational Documents, or (B) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any material asset under, any Contract or Permit, or (C) subject to
receipt of the Required Consents and the expiration of any waiting period required by Law, violate any Law or Order applicable
to SBC or SNB or any of their respective material assets.
(c) Capital
Stock. SBC’s authorized capital stock consists of 60 million shares of SBC Common Stock, of which, as of the date of
this Agreement, 33,142,002 shares are issued and 33,136,592 are outstanding with 6,610 of those shares held in its treasury. As
of the date hereof, there were 191,000 restricted shares of SBC Common Stock validly issued and outstanding and the restricted
shares were each issued in accordance with SBC Stock Plans and such restricted shares represent all of the Rights issued under
the SBC Stock Plans. Except as set forth in Section 3.4(c) or Section 3.4(c) of the SBC Disclosure Letter or as set forth in its
SEC Reports, there are no shares of SBC Common Stock or other equity securities of SBC outstanding and no outstanding Rights relating
to SBC Common Stock, and no Person has any Contract or an right or privilege (whether pre-emptive or contractual) capable of becoming
a Contract or Right for the purchase, subscription or issuance of any securities of SBC. All of the outstanding shares of SBC Common
Stock are duly and validly issued and outstanding and are fully paid and, except as expressly provided otherwise under applicable
Law, non-assessable under the FBCA. None of the outstanding shares of SBC Common Stock have been issued in violation of any preemptive
rights of the current or past shareholders of SBC. All of the outstanding shares of SBC Common Stock and all Rights to acquire
shares of SBC Common Stock have been issued in compliance in all material respects with all applicable federal and state Securities
Laws. All issued and outstanding shares of capital stock of its Subsidiaries have been duly authorized and are validly issued,
fully paid and (except as provided in 12 U.S.C. Section 55) nonassessable. The outstanding capital stock of each of its Subsidiaries
has been issued in compliance with all legal requirements and is not subject to any preemptive or similar rights. Seacoast owns
all of the issued and outstanding shares of capital stock of SNB free and clear of all liens, charges, security interests, mortgages,
pledges and other encumbrances.
(d) Financial
Statements.
(i) The
financial statements of SBC and its Subsidiaries included (or incorporated by reference) in the SBC SEC Reports (including the
related notes, where applicable) (A) have been prepared from, and are in accordance with, the books and records of SBC and its
Subsidiaries; (B) fairly present in all material respects the consolidated results of operations, cash flows, changes in stockholders’
equity and consolidated financial position of SBC and its Subsidiaries for the respective fiscal periods or as of the respective
dates therein set forth (subject in the case of unaudited statements to recurring audit adjustments normal in nature and amount);
(C) complied as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with respect thereto; and (D) have been prepared in accordance
with GAAP consistently applied during the periods involved, except, in each case, as indicated in such statements or in the notes
thereto. As of the date hereof, the books and records of SBC and its Subsidiaries have been maintained in all material respects
in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.
(ii) There
is no material transaction, arrangement or other relationship between SBC or any of its Subsidiaries and any unconsolidated or
other affiliated entity that, as of the date hereof, is not reflected in the SBC SEC Reports that would be required to be reflected
in such SEC Reports.
(iii) The
records, systems, controls, data and information of SBC and its Subsidiaries are recorded, stored, maintained and operated under
means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive
ownership or direct control of SBC or its Subsidiaries or accountants (including all means of access thereto and therefrom), except
for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect
on SBC’s (or any SBC Subsidiary’s) system of internal accounting controls.
(iv) Since
January 1, 2012 (A) neither SBC nor, to the Knowledge of SBC, any director, officer, employee, auditor, accountant or representative
of SBC or SNB has received or otherwise had or obtained Knowledge of any complaint, allegation, assertion or claim, whether written
or oral, regarding a material weakness, significant deficiency or other defect or failure in the accounting or auditing practices,
procedures, methodologies or methods of SBC or any of its Subsidiaries or their respect internal accounting controls, and (B) no
attorney representing SBC or any of its Subsidiaries, whether or not employed by SBC or any of its Subsidiaries, has reported evidence
of a material violation (as such term is interpreted under Section 307 of the Sarbanes-Oxley Act and the SEC’s regulations
thereunder) by SBC or any of its Subsidiaries or any officers, directors, employees or agents of SBC or any of its Subsidiaries
to the Board of Directors or any committee thereof or to any director or officer of SBC. For purposes of this Agreement, “Knowledge
of SBC” shall mean the actual knowledge of the individuals listed in Section 3.4(d)(iv) of the SBC Disclosure Letter, after
reasonable inquiry.
(e) Legal
Proceedings. There is no Litigation that would be required to be disclosed in a Form 10-K or Form 10-Q pursuant to Item 103
of Regulation S-K of SEC Rules and Regulations that are not so disclosed, pending or, to the Knowledge of SBC, threatened against
Seacoast, or against any asset, interest, or right of any of them, nor are there any Orders of any Governmental Authority or arbitrators
outstanding against Seacoast.
(f) Compliance
with Laws.
(i) SBC and each
of its subsidiaries are, and at all times since January 1, 2012, have been, in compliance in all material respects with all laws
applicable to their businesses, operations, properties, assets and employees. SBC and each of its Subsidiaries have in effect,
and at all relevant times since January 1, 2012, held all material Permits necessary for them to own, lease or operate their properties
and assets and to carry on their businesses and operations as now conducted and, to SBC’s Knowledge, no suspension or cancellation
of any such Permits is threatened and there has occurred no violation of, default under (with or without notice or lapse of time
or both) or event giving to others any right of revocation, non-renewal, adverse modification or cancellation of, with or without
notice or lapse of time or both, any such Permit. The deposit accounts of SNB are insured by the FDIC through the Deposit Insurance
Fund to the fullest extent permitted by law, and all premiums and assessments required to be paid in connection therewith have
been paid when due. No action for the revocation or termination of such deposit insurance is pending or, to the Knowledge of SBC,
threatened.
(ii) Since
January 1, 2012, neither SBC nor any of its Subsidiaries has received any written notification or communication from any Governmental
Authority (A) requiring SBC or any of its Subsidiaries to enter into or consent to the issuance of a cease and desist order, formal
or written agreement, directive, commitment, memorandum of understanding, board resolution, extraordinary supervisory letter or
other formal or informal enforcement action of any kind that imposes any restrictions on its conduct of business or that relates
to its capital adequacy, its credit or risk management policies, its dividend policy, its management, its business or its operations
(any of the foregoing, a “SBC Regulatory Agreement”), or (B) threatening or contemplating revocation or limitation
of, or which would have the effect of revoking or limiting, FDIC insurance coverage, and, to the Knowledge of SBC, neither SBC
nor any of its Subsidiaries has been advised by any Governmental Authority that such Governmental Authority is contemplating issuing
or requesting (or is considering the appropriateness of issuing or requesting) any such judgment, order, injunction, rule, agreement,
memorandum of understanding, commitment letter, supervisory letter, decree or similar submission. Neither SBC nor any of its Subsidiaries
is currently a party to or subject to any SBC Regulatory Agreement.
(iii) Neither
SBC nor any of its Subsidiaries (nor, to the Knowledge of SBC, any of their respective directors, executives, representatives,
agents or employees) (A) has used or is using any corporate funds for any illegal contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (B) has used or is using any corporate funds for any direct or indirect unlawful
payments to any foreign or domestic governmental officials or employees, (C) has violated or is violating any provision of the
Foreign Corrupt Practices Act of 1977, (D) has established or maintained, or is maintaining, any unlawful fund of corporate monies
or other properties or (E) has made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.
(g) SEC
Filings. Since January 1, 2013, SBC has and each of its Subsidiaries have timely filed all reports, statements and certifications,
together with any amendments required to be made with respect thereto, that SBC and each of its Subsidiaries was required to file
with any Governmental Authority, and have paid all fees and assessments due and payable in connection therewith. There is no unresolved
violation or exception of which SBC has been given notice by any Governmental Authority with respect to any such report, statement
or certification. No report, including any report filed with the SEC, the FDIC, the OCC, the Federal Reserve Board or other banking
regulatory agency since January 1, 2013, as of the respective dates thereof, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective dates, all of the foregoing reports complied as
to form in all material respects with the published rules and regulations of the Governmental Authority with jurisdiction thereof
and with respect thereto. There are no outstanding comments from or unresolved issues raised by the Governmental Authorities with
respect to any of the foregoing reports filed by SBC or its Subsidiaries.
(h) Community
Reinvestment Act. SNB has complied in all material respects with the provisions of the CRA and the rules and regulations thereunder,
has a CRA rating of not less than “satisfactory” in its most recently completed exam, has received no material criticism
from regulators with respect to discriminatory lending practices, and to the Knowledge of SBC, there are no conditions, facts of
circumstances that could result in a CRA rating of less than “satisfactory” or material criticism from regulators or
consumers with respect to discriminatory lending practices.
(i) Legality
of Seacoast Securities. All shares of SBC Common Stock to be issued pursuant to the Merger have been duly authorized and, when
issued pursuant to this Agreement, will be validly and legally issued, fully paid and nonassessable, and will be, at the time of
their delivery, free and clear of all Liens and any preemptive or similar rights.
(j) Certain
Actions. Neither SBC nor any of its Subsidiaries or Affiliates has taken or agreed to take any action and it has no Knowledge
of any fact or circumstance, that is reasonably likely to (i) prevent the Merger and the Bank Merger from qualifying as a reorganization
within the meaning of Section 368(e) of the Internal Revenue Code, or (ii) materially impede or delay receipt of any required Regulatory
Consents. To SBC’s Knowledge there exists no fact, circumstance, or reason that would cause any required Regulatory Consent
not to be received in a timely manner.
(k) Brokers
and Finders. Except for Sandler O’Neill + Partners, L.P., neither SBC nor any of its Subsidiaries, nor any of their respective
directors, officers, employees or Representatives, has employed any broker or finder or incurred and Liability for any financial
advisory fees, investment bankers’ fees, brokerage fees, commissions, or finders’ fees in connection with this Agreement
or the transactions contemplated hereby.
(l) Representations
Not Misleading. No representation or warranty by Seacoast in this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they
were made, not misleading.
ARTICLE 4
COVENANTS AND ADDITIONAL AGREEMENTS OF
THE PARTIES
4.1 Conduct
of Business Prior to Effective Time. During the period from the date of this Agreement until the earlier of the termination
of this Agreement pursuant to Article 6 or the Effective Time, except as expressly contemplated or permitted by this Agreement,
each Party shall (a) conduct its business in the ordinary course consistent with past practice, (b) use reasonable best
efforts to maintain and preserve intact its business organization, employees and advantageous business relationships, (c) maintain
its books, accounts and records in the usual manner on a basis consistent with that heretofore employed and (d) take no action
that would adversely affect or delay the satisfaction of the conditions set forth in Section 5.1(a) or 5.1(b) or the ability of
either Party to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby.
4.2 Forbearances.
During the period from the date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6
or the Effective Time, except as expressly contemplated or permitted by this Agreement or as otherwise indicated in this Section 4.2,
the Company shall not, without the prior written consent of the chief executive officer or chief financial officer of SBC (which
consent shall not be unreasonably withheld or delayed):
(a) amend
its Organizational Documents or any resolution or agreement concerning indemnification of its directors or officers;
(b) (i) adjust,
split, combine, subdivide or reclassify any capital stock, (ii) make, declare, set aside or pay any dividend or make any other
distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities
or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain
events) into or exchangeable for any shares of its capital stock, (iii) grant any Rights, (iv) issue, sell, pledge, dispose
of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer,
lease, license, guarantee or encumbrance of, any shares of its capital stock, or (v) make any change in any instrument or
Contract governing the terms of any of its securities;
(c) other
than in the ordinary course of business or pursuant to Contracts in force at the date hereof, or permitted by, this Agreement,
make any investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any
property or assets) in any other Person;
(d) (i)
charge off (except as may otherwise be required by law or by regulatory authorities or by GAAP) or sell (except in the ordinary
course of business consistent with past practices) any of its portfolio of loans, discounts or financing leases, or (ii) sell
any asset held as other real estate or other foreclosed assets for an amount that exceeds 10% or $50,000, whichever is greater,
less than its book value, except as provision shall not be applicable to resolving the taking of any real estate by any Governmental
Authority by eminent domain proceedings or litigation;
(e) terminate
or allow, after the use of reasonable best efforts, to be terminated any of the policies of insurance it maintains on its business
or property, cancel any material indebtedness owing to it or any claims that it may have possessed, or waive any right of substantial
value or discharge or satisfy any material noncurrent liability;
(f) enter
into any new line of business, or change its lending, investment, underwriting, risk and asset liability management and other banking
and operating policies, except as required by applicable Laws or any policies imposed on it by any Governmental Authority;
(g) except
in the ordinary course of business consistent with past practices: (i) lend any money or pledge any of its credit in connection
with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise, (ii) mortgage or otherwise
subject to any lien, encumbrance or other liability any of its assets, (iii) except for property held as other real estate owned,
sell, assign or transfer any of its assets in excess of $50,000 in the aggregate or (iv) incur any material liability, commitment,
indebtedness or obligation (of any kind whatsoever, whether absolute or contingent), or cancel, release or assign any indebtedness
of any Person or any claims against any Person, except (x) in the ordinary course of business or (y) pursuant to Contracts in force
as of the date of this Agreement and disclosed in Section 4.2(g) of the Company Disclosure Letter or transfer, agree to transfer
or grant, or agree to grant a license to, any of its material Intellectual Property;
(h) other
than in the ordinary course of business, incur any indebtedness for borrowed money (other than short-term indebtedness incurred
to refinance short-term indebtedness (it being understood that for purposes of this Section 4.2(h), “short-term”
shall mean maturities of six months or less); assume, guarantee, endorse or otherwise as an accommodation become responsible for
the obligations of any Person;
(i) other
than purchases of investment securities in the ordinary course of business or in consultation with SBC, restructure or change its
investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio
is classified or reported;
(j) other
than in the ordinary course of business, terminate or waive any material provision of any Contract other than normal renewals of
Contracts without materially adverse changes of terms;
(k) Except
as set forth in Section 4.2(k) of the Company Disclosure Letter, other than in the ordinary course of business and consistent with
past practice or as required by Benefit Plans and Contracts as in effect at the date of this Agreement, (i) increase in any manner
the compensation or fringe benefits of any of its officers, employees or directors, whether under a Benefit Plan or otherwise,
(ii) pay any pension or retirement allowance not required by any existing Benefit Plan or Contract to any such officers, employees
or directors, (iii) become a party to, amend or commit itself to any Benefit Plan or Contract (or any individual Contracts
evidencing grants or awards thereunder) or employment agreement with or for the benefit of any officer, employee or director, or
(iv) accelerate the vesting of, or the lapsing of restrictions with respect to, Rights
pursuant to any Holding Stock Plan or (v) make any changes to a Benefit Plan that are not required by Law;
(l) settle
any Litigation, except in the ordinary course of business or as described in Section 4.2(l) of the Company Disclosure Letter;
(m) revalue
any of its or its Subsidiaries’ assets or change any method of accounting or accounting practice used by it or any of its
Subsidiaries, other than changes required by GAAP or the FDIC or any Regulatory Authority;
(n) file
or amend any Tax Return except in the ordinary course of business; settle or compromise any Tax Liability; or make, change or revoke
any Tax election or change any method of Tax accounting, except as required by applicable Law;
(o) knowingly
take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth
in Article 5 not being satisfied, except as may be required by applicable Law; provided, that nothing in this Section
4.2(o) shall preclude Holding from exercising its rights under Sections 4.5 or 4.12;
(p) merge
or consolidate it or any of its Subsidiaries with any other Person;
(q) acquire
assets outside of the ordinary course of business consistent with past practices from any other Person with a value or purchase
price in the aggregate in excess of $50,000, other than purchase obligations pursuant to Contracts to the extent in effect immediately
prior to the execution of this Agreement and described in Section 4.2(q) of the Company Disclosure Letter;
(r) enter
into any Contract that is material and would have been material had it been entered into prior to the execution of this Agreement;
(s) the
Bank shall not make any changes in the mix, rates, terms or maturities of the Bank’s deposits or other Liabilities, except
in a manner and pursuant to policies consistent with past practice and competitive factors in the market place; open any new branch
or deposit taking facility; or close or relocate any existing branch or facility;
(t) make
any extension of credit that, when added to all other extensions of credit to a borrower and its affiliates, would exceed its applicable
regulatory lending limits; make any loans, or enter into any commitments to make loans, which vary other than in immaterial respects
from its written loan policies, a true and correct copy of such policies has been provided to Seacoast; provided, that this
covenant shall not prohibit the Bank from extending or renewing credit or loans in the ordinary course of business consistent with
past lending practices or in connection with the workout or renegotiation of loans currently in its loan portfolio; provided
further that from the date hereof, any new individual loan or new extension of credit in excess of $500,000 and which is unsecured,
or $1 million and which is secured, shall require the written approval of the chief executive officer or chief credit officer of
SNB, which approval or rejection shall be given in writing within two (2) Business Days after the loan package is delivered to
such individual;
(u) take
any action that at the time of taking such action is reasonably likely to prevent, or would materially interfere with, the consummation
of the Merger;
(v) knowingly
take any action that would prevent or impede the Merger and the Bank Merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code; or
(w) agree
or commit to take any of the actions prohibited by this Section 4.2.
4.3 Litigation.
Holding shall give Seacoast the opportunity to consult with Holding in the defense or settlement of any shareholder or derivative
Litigation against Holding and or its directors relating to the transactions contemplated by this Agreement, and no such settlement
shall be agreed to without Seacoast’s prior written consent which shall not be unreasonably withheld or delayed.
4.4 State
Filings. Upon the terms and subject to the conditions of this Agreement and prior to or in connection with the Closing,
SBC and Holding shall execute and the Parties shall cause to be filed the Articles of Merger with the Secretary of State of the
State of Florida.
4.5 Holding
Shareholder Approval; Registration Statement and Proxy Statement/ Prospectus.
(a) Holding
shall call a meeting of its shareholders to be held as soon as reasonably practicable after the Registration Statement is declared
effective by the SEC for the purpose of obtaining the Holding Shareholder Approval and such other matters as the Board of Directors
of Holding or SBC may direct, and Holding shall use its reasonable best efforts to cause such meeting to occur as soon as reasonably
practicable. SBC shall be entitled to have a representative attend such meeting of shareholders. The Board of Directors of Holding
shall make the Holding Directors’ Recommendation to its shareholders and the Holding Directors’ Recommendation shall
be included in the Proxy Statement/Prospectus; provided, that the Holding Board of Directors may withdraw, modify, or change
in an adverse manner to Seacoast its recommendations if the Board of Directors of Holding concludes in good faith (and based upon
the written advice of its outside counsel) that the failure to so withdraw, modify, or change its recommendations would or would
be reasonably likely to result in a breach of the fiduciary duties of Holding’s Board of Directors under applicable Law.
Notwithstanding such withdrawal of Holding’s Director’s recommendation, if Holding has not terminated this Agreement
in accordance with Article 6, then Holding shall nevertheless submit this Agreement to its shareholders for adoption.
(b) As
soon as reasonably practicable after the execution of this Agreement (but in no event later than (60) sixty days following the
date of this Agreement), SBC shall file the Registration Statement with the SEC and shall use all reasonable efforts to cause the
Registration Statement to be declared effective under the 1933 Act as promptly as practicable after filing thereof. Each Party
agrees to cooperate with the other Party, and its Representatives, in the preparation of the Registration Statement and the Proxy
Statement/Prospectus. The Parties agree to use all reasonable best efforts to obtain all Permits required by the Securities Laws
to carry out the transactions contemplated by this Agreement, and each Party agrees to furnish all information concerning it and
the holders of its capital stock as may be reasonably requested in connection with any such action.
(c) Each
Party agrees, as to itself and its Subsidiaries, that none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in (i) the Registration Statement will, at the time the Registration Statement and each amendment
and supplement thereto, if any, become effective under the 1933 Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (ii) the
Proxy Statement/Prospectus and any amendment or supplement thereto, at the date of mailing to Holding shareholders and at the times
of the meeting of Holding shareholders, will contain an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, in light of the circumstances under which they were made, not misleading, or necessary to correct
any statement in any earlier statement in the Proxy Statement/Prospectus or any amendment or supplement thereto. Each Party further
agrees that if it shall become aware prior to the Effective Time of any information furnished by it that would cause any of the
statements in the Proxy Statement/Prospectus or the Registration Statement to be false or misleading with respect to any material
fact, or to omit to state any material fact necessary to make the statements therein not false or misleading, to promptly inform
the other Party thereof and to take the necessary steps to correct the Proxy Statement/Prospectus or the Registration Statement.
4.6 Quotation
of SBC Common Stock. SBC shall cause the shares of SBC Common Stock to be issued in the Merger to be approved for quotation
on NASDAQ, prior to the Effective Time.
4.7 Reasonable
Best Efforts.
(a) Subject
to the terms and conditions of this Agreement, the Parties will use all reasonable best efforts to take, or cause to be taken,
in good faith, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable
Laws, including using its reasonable best efforts to lift or rescind any Order adversely affecting its ability to consummate the
transactions contemplated hereby and to cause to be satisfied the conditions in Article 5, to permit consummation of the Merger
as promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby, and each will cooperate
fully with and furnish information to, the other Party to that end, and obtain all consents of, and give all notices to and make
all filings with, all Governmental Authorities and other third parties that may be or become necessary for the performance of its
obligations under this Agreement and the consummation of the transactions contemplated hereby; provided, that nothing contained
herein shall preclude any Party from exercising its rights under this Agreement.
(b) Immediately
following the Effective Time (or such later time as SBC may direct), the Parties shall take all actions necessary to consummate
the Bank Merger and cause the Bank Merger Agreement effecting the Bank Merger to be filed with the Office of the Comptroller of
the Currency.
(c) Each
Party undertakes and agrees to use its reasonable efforts to cause the Merger and Bank Merger, and to take no action that would
cause the Merger and the Bank Merger not, to qualify for treatment as “reorganizations” within the meaning of Section 368(a)
of the Internal Revenue Code for federal income Tax purposes.
(d) The
Parties shall consult with respect to the character, amount and timing of restructuring charges to be taken by each of them in
connection with the transactions contemplated hereby and shall take such charges in accordance with GAAP, as such Parties mutually
agree upon.
4.8 Applications
and Consents.
(a) The
Parties shall cooperate in seeking all Consents of Governmental Authorities and other Persons necessary to consummate the transactions
contemplated hereby.
(b) Without
limiting the foregoing, the Parties shall cooperate in (i) the filing of applications and notices, as applicable, with the
Board of Governors of the Federal Reserve System under the BHC Act, and obtaining approval of such applications and notices, (ii) the
filing of any required applications or notices with any foreign or state banking, insurance or other Regulatory Authorities and
obtaining approval of such applications and notices, (iii) making any notices to or filings with the Small Business Administration,
(iv) making any notices or filings under the HSR Act, and (v) making any filings with and obtaining any Consents in connection
with compliance with the applicable provisions of the rules and regulations of any applicable industry self-regulatory organization,
including approvals from FINRA and any relevant state regulator in connection with a change of control of the Company Subsidiaries
that are broker-dealers, or that are required under consumer finance, mortgage banking and other similar Laws (collectively, the
“Regulatory Consents”). Each Party shall file any application and notice required of it to any Regulatory Authority
within sixty (60) days following the date of this Agreement.
(c) Each
Party will promptly furnish to the other Party copies of applications filed with all Governmental Authorities and copies of written
communications delivered and received by such Party from any Governmental Authorities with respect to the transactions contemplated
hereby. Each Party agrees that it will consult with the other Party with respect to obtaining Regulatory Consents and other material
Consents advisable to consummate the transactions contemplated by this Agreement and each Party will keep the other Party apprised
of the status of material matters relating to completion of the transactions contemplated hereby. All documents that the Parties
or their respective Subsidiaries are responsible for filing with any Governmental Authority in connection with the transactions
contemplated hereby (including to obtain Regulatory Consents) will comply as to form in all material respects with the provisions
of applicable Law.
4.9 Notification
of Certain Matters. Each Party will give prompt notice to the other (and subsequently keep such other Party informed on
a current basis) upon its becoming aware of the occurrence or existence of any fact, event, development or circumstance that (a) is
reasonably likely to result in any Material Adverse Effect on it, or (b) would cause or constitute a breach of any of its
representations, warranties, covenants, or agreements contained herein; provided, that any failure to give notice
in accordance with the foregoing with respect to any breach shall not be deemed to constitute the failure of any condition set
forth in Section 5.2(b) or 5.2(c), as the case may be, to be satisfied, or otherwise constitute a breach of this Agreement
by such Party due to its failure to give such notice unless the underlying breach would independently result in a failure of the
conditions set forth in Sections 5.2(a) or 5.2(b), or Sections 5.3(a) or 5.3(b), as the case may be, or give rise to a termination
right under Section 6.1. The Company shall deliver to Seacoast a copy of each written opinion (or any withdrawal of such opinion)
of Hovde Group LLC or any other financial advisor, as soon as reasonably practicable after the Company’s receipt thereof.
4.10 Investigation
and Confidentiality.
(a) Each
Party shall permit the other to make or cause to be made such investigation of the business and Properties of it and its Subsidiaries
and of its Subsidiaries’ financial and legal conditions as the other reasonably requests; provided, that such
investigation shall be reasonably related to the transactions contemplated hereby and shall not interfere unnecessarily with normal
operations. No investigation by a Party shall affect the representations and warranties of the other or the right of a Party to
rely thereon.
(b) Each
Party shall, and shall cause its directors, officers, employees and Representatives to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and its Subsidiaries’ businesses, operations, and financial
positions to the extent required by, and in accordance with, the Confidentiality Agreement, and shall not use such information
for any purpose except in furtherance of the transactions contemplated by this Agreement.
4.11 Press
Releases; Publicity. Prior to the Effective Time, the Parties shall consult with each other as to the form and substance
of any press release, other public statement or shareholder communication related to this Agreement and the transactions contemplated
hereby prior to issuing such press release, public statement or shareholder communication or making any other public or shareholder
disclosure related thereto; provided, that nothing in this Section 4.11 shall be deemed to prohibit any Party from
making any disclosure that its counsel deems necessary or advisable in order to satisfy such Party’s disclosure obligations
imposed by Law or NASDAQ.
4.12 Acquisition
Proposals.
(a) The
Company agrees that it will not, and will cause its directors, officers, employees and Representatives and Affiliates not to, (i) initiate,
solicit, encourage or knowingly facilitate inquiries or proposals with respect to, (ii) engage or participate in any negotiations
concerning, or (iii) provide any confidential or nonpublic information or data to, or have or participate in any discussions
with, any Person relating to, any Acquisition Proposal; provided, that, in the event the Company receives an unsolicited
bona fide Acquisition Proposal that does not violate (i) and (ii) above at any time prior to, but not after, the time this
Agreement is adopted by the Holding Shareholder Approval, and Holding’s Board of Directors concludes in good faith that there
is a reasonable likelihood that such Acquisition Proposal constitutes or is reasonably likely to result in a Superior Proposal,
the Company may, and may permit its officers and Representatives to, furnish or cause to be furnished nonpublic information or
data and participate in such negotiations or discussions to the extent that the Board of Directors of Holding concludes in good
faith (and based upon the written advice of its outside counsel) that failure to take such actions would or would be reasonably
likely to result in a violation of its fiduciary duties under applicable Law; provided further, that prior to providing
any nonpublic information permitted to be provided pursuant to the foregoing proviso, the Company shall have entered into a confidentiality
agreement with such third party on terms no less favorable to it than the Confidentiality Agreement. The Company will immediately
cease and cause to be terminated any activities, discussions or negotiations conducted before the date of this Agreement with any
Persons other than Seacoast with respect to any Acquisition Proposal. The Company shall promptly (and in any event within two Business
Days) advise Seacoast following the receipt or notice of any Acquisition Proposal and the substance thereof (including the identity
of the Person making such Acquisition Proposal), and will keep Seacoast apprised of any related developments, discussions and negotiations
on a current basis. The Company agrees that any breach by its Representatives of this Section 4.12 shall be deemed a breach by
the Company.
(b) Notwithstanding
the foregoing, if Holding’s Board of Directors concludes in good faith (and based up the written advice of its outside counsel
and after consultation with its financial advisor) that an Acquisition Proposal constitutes a Superior Proposal and that failure
to accept such Superior Proposal would result in a violation of its fiduciary obligations to shareholders of Holding under applicable
Laws, the Holding Board of Directors may at any time prior to the Holding Shareholder Approval (i) withdraw or modify (a “Change
in Recommendation”) the Holding Board of Directors’ recommendation that shareholders of Holding approve this Agreement
or make or cause to be made any third party or public communication proposing or announcing an intention to withdraw or modify
the Holding Board of Directors recommendation for Holding shareholder approval of this Agreement, and (ii) terminate this Agreement
to enter into a definitive agreement with respect to such Superior Proposal; provided, however, that the Board of Directors of
Holding may not make a Change in Recommendation, and terminate this Agreement, with respect to an Acquisition Proposal unless (i)
Holding shall not have breached this Section 4.12 in any respect and (ii) (A) the Board of Directors of Holding determines in good
faith (after consultation with counsel and its financial advisors) that such Superior Proposal has been made and has not been withdrawn
and continues to be a Superior Proposal after taking into account all adjustments to the terms of this Agreement that may be offered
by SBC under this Section 4.12(b); (B) Holding has given SBC at least four (4) Business Days’ prior written notice of its
intention to take such actions set forth above (which notice shall specify the material terms and conditions of any such Superior
Proposal (including the identity of the Person making such Superior Proposal) and has contemporaneously provided an unredacted
copy of the relevant proposed transaction agreements with the Person making such Superior Proposal; and (C) before effecting such
Change in Recommendation, Holding has negotiated, and has caused its representatives to negotiate in good faith with SBC during
such notice period to the extent SBC wishes to negotiate, to enable SBC to revise the terms of this Agreement such that it would
cause such Superior Proposal to no longer constitute a Superior Proposal. In the event of any material change to the terms of the
such Superior Proposal, Holding shall, in each case, be required to deliver to SBC a new written notice, the notice period shall
have recommenced and Holding shall be required to comply with its obligations under this Section 4.12 with respect to such new
written notice. Holding will advise SBC in writing within twenty-four (24) hours following the receipt of any Acquisition Proposal
and the substance thereof (including the identity of the Person making such Acquisition Proposal) and will keep SBC apprised of
any related developments, discussions and negotiations (including the terms and conditions of the Acquisition Proposal) on a current
basis.
4.13 Takeover
Laws. If any Takeover Law may become, or may purport to be, applicable to the transactions contemplated hereby, Holding
and the members of its Board of Directors will grant such approvals and take such actions as are necessary (other than any action
requiring the approval of its shareholders (other than as contemplated by Section 4.5)) so that the transactions contemplated
by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate
or minimize the effects of any Takeover Law on any of the transactions contemplated by this Agreement.
4.14 Employee
Benefits and Contracts.
(a) Following
the Effective Time, SBC shall maintain or cause to be maintained employee benefit plans and compensation opportunities for the
benefit of employees (as a group) who are full-time active employees of the Company and its Subsidiaries on the Closing Date (“Covered
Employees”) that provide employee benefits and compensation opportunities which, in the aggregate, are substantially
comparable to the employee benefits and compensation opportunities that are made available on a uniform and non-discriminatory
basis to similarly situated employees of SBC or its Subsidiaries, as applicable; provided, however, that in no event
shall any Covered Employee be eligible to participate in any closed or frozen plan of SBC or its Subsidiaries. SBC shall give the
Covered Employees full credit for their prior service with the Company and its Subsidiaries (i) for purposes of eligibility (including
initial participation and eligibility for current benefits) and vesting under any qualified or non-qualified employee benefit plan
maintained by SBC and in which Covered Employees may be eligible to participate and (ii) for all purposes under any welfare benefit
plans, vacation plans and similar arrangements maintained by SBC.
(b) With
respect to any employee benefit plan of SBC that is a health, dental, vision or other welfare plan in which any Covered Employee
is eligible to participate, for the plan year in which such Covered Employee is first eligible to participate, SBC or its applicable
Subsidiary shall use its commercially reasonable best efforts to (i) cause any pre-existing condition limitations or eligibility
waiting periods under such SBC or Subsidiary plan to be waived with respect to such Covered Employee to the extent such condition
was or would have been covered under the Company Benefit Plan in which such Covered Employee participated immediately prior to
the Effective Time, and (ii) recognize any health, dental, vision or other welfare expenses incurred by such Covered Employee in
the year that includes the Closing Date (or, if later, the year in which such Covered Employee is first eligible to participate)
for purposes of any applicable deductible and annual out-of-pocket expense requirements under any such health, dental, vision or
other welfare plan.
(c) Prior
to the Effective Time, the Company shall take, and shall cause its Subsidiaries to take, all actions requested by SBC that may
be necessary or appropriate to (i) cause one or more the Company Benefits Plans to terminate as of the Effective Time, or as of
the date immediately preceding the Effective Time, (ii) cause benefit accruals and entitlements under any the Company Benefit Plan
to cease as of the Effective Time, or as of the date immediately preceding the Effective Time, (iii) cause the continuation on
and after the Effective Time of any contract, arrangement or insurance policy relating to any Company Benefit Plan for such period
as may be requested by SBC, or (iv) facilitate the merger of any Company Benefit Plan into any employee benefit plan maintained
by SBC or an SBC Subsidiary. All resolutions, notices, or other documents issued, adopted or executed in connection with the implementation
of this Section 4.14(c) shall be subject to SBC’s reasonable prior review and approval, which shall not be unreasonably withheld,
conditioned or delayed.
(d) Nothing
in this Section 4.14 shall be construed to limit the right of SBC or any of its Subsidiaries (including, following the Closing
Date, the Company and its Subsidiaries) to amend or terminate any Company Benefit Plan or other employee benefit plan, to the extent
such amendment or termination is permitted by the terms of the applicable plan, nor shall anything in this Section 4.14 be construed
to require SBC or any of its Subsidiaries (including, following the Closing Date, the Company and its Subsidiaries) to retain the
employment of any particular Covered Employee for any fixed period of time following the Closing Date, and the continued retention
(or termination) by SBC or any of its Subsidiaries of any Covered Employee subsequent to the Effective Time shall be subject in
all events to SBC’s or its applicable Subsidiary’s normal and customary employment procedures and practices, including
customary background screening and evaluation procedures, and satisfactory employment performance.
(e) If,
within six (6) months after the Effective Time, any Covered Employee is terminated by SBC or its Subsidiaries other than for “Cause”
or as a result of unsatisfactory job performance, then SBC shall pay severance to such Covered Employee in an as amount set forth
in the severance policies set forth in Section 4.14(e) of the SBC Disclosure Letter (and based upon the non-exempt and exempt status
and/or title for the Covered Employee with the Company at the Closing). Any severance to which a Covered Employee may be entitled
in connection with a termination occurring more than six (6) months after the Effective Time will be as set forth in the severance
policies set forth in Section 4.14(e) of the SBC Disclosure Letter.
4.15 Indemnification.
(a) From
and after the Effective Time, in the event of any threatened or actual claim, action, suit, proceeding, or investigation, whether
civil, criminal, or administrative, in which any Person who is now, or has been at any time prior to the date of this Agreement,
or who becomes prior to the Effective Time, a director or officer of the Company (each an “Indemnified Party”)
is, or is threatened to be, made a party based in whole or in part on, or arising in whole or in part out of, or pertaining to
(i) the fact that the Indemnified Party is or was a director, officer, or employee of the Company its Subsidiaries or any
of its predecessors, or (ii) this Agreement or any of the transactions contemplated hereby, whether in any case asserted or
arising before or after the Effective Time, Seacoast shall indemnify, defend and hold harmless, to the greatest extent such Indemnified
Parties are indemnified or have the right to advancement of expenses pursuant to the (i) Organizational Documents of the Company
and indemnification agreements, if any, in existence on the date of this Agreement with the Company or its Subsidiaries and disclosed
in the Company Disclosure Letter, and (ii) the FBCA, each such Indemnified Party against any Liability (including advancement of
reasonable attorneys’ fees and expenses prior to the final disposition of any claim, suit, proceeding, or investigation to
each Indemnified Party to the fullest extent permitted by Law upon receipt of any undertaking required by applicable Law), judgments,
fines, and amounts paid in settlement in connection with any such threatened or actual claim, action, suit, proceeding, or investigation.
In the event of any such threatened or actual claim, action, suit, proceeding, or investigation (whether asserted or arising before
or after the Effective Time), the Indemnified Parties may retain counsel reasonably satisfactory to them; provided, that
(1) Seacoast shall have the right to assume the defense thereof and upon such assumption Seacoast shall not be required to
advance to any Indemnified Party any legal expenses of other counsel or any other expenses subsequently incurred by any Indemnified
Party in connection with the defense thereof, except that if Seacoast elects not to assume such defense or counsel for the Indemnified
Parties reasonably advises the Indemnified Parties that there are material issues that raise conflicts of interest between Seacoast
and the Indemnified Parties, the Indemnified Parties may retain counsel reasonably satisfactory to them, and Seacoast shall advance
the reasonable fees and expenses of such counsel for the Indemnified Parties, (2) Seacoast shall not be liable for any settlement
effected without its prior written consent (which consent shall not be unreasonably withheld), and (3) Seacoast shall have
no obligation hereunder to any Indemnified Party when and if a court of competent jurisdiction shall determine, and such determination
shall have become final, that indemnification of such Indemnified Party in the manner contemplated hereby is prohibited by applicable
Law.
(b) Seacoast
agrees that all existing rights to indemnification and all existing limitations on Liability existing in favor of the directors,
officers, and employees of the Company (the “Covered Parties”) as provided in their respective Organizational
Documents as in effect as of the date of this Agreement or in any indemnification agreement in existence on the date of this Agreement
with the Company and disclosed in the Company Disclosure Letter with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect, and shall be honored by such entities or their respective successors
as if they were the indemnifying party thereunder, without any amendment thereto; provided, that nothing contained in this
Section 4.15(b) shall be deemed to preclude the liquidation, consolidation, or merger of Seacoast or SNB, in which case all
of such rights to indemnification and limitations on Liability shall be deemed to so survive and continue notwithstanding any such
liquidation, consolidation or merger. Without limiting the foregoing, in any case in which approval by Seacoast is required to
effectuate any indemnification for any director or officer of the Company, Seacoast shall direct, at the election of the Indemnified
Party, that the determination of any such approval shall be made by independent counsel mutually agreed upon between Seacoast and
the Indemnified Party.
(c) Seacoast,
from and after the Effective Time, will directly or indirectly cause the Persons who served as directors or officers of the Company
at or before the Effective Time to be covered by the Company’s existing directors’ and officers’ liability insurance
policy; provided, that Seacoast may substitute therefor policies of at least the same coverage and amounts containing
terms and conditions that are not less advantageous than such policy; provided further, that in no event shall the
aggregate premiums applicable to coverage exceed 250% of the current annual premium paid by the Company (as set forth in
the Company Disclosure Letter) for such insurance. Such insurance coverage shall commence at the Effective Time and will be provided
for a period of no less than six years after the Effective Time.
(d) If
SBC or SNB or any of their respective successors or assigns shall consolidate with or merge into any other Person and shall not
be the continuing or surviving Person of such consolidation or merger or shall transfer all or substantially all of its assets
to any Person, then and in each case, proper provision shall be made so that the successors and assigns of SBC or SNB, as applicable,
as the surviving entities shall assume the obligations set forth in this Section 4.15.
(e) The
provisions of this Section 4.15 are intended to be for the benefit of and shall be enforceable by, each Indemnified Party
and his or her heirs and representatives.
4.16 Resolution
of Certain Matters. Holding shall use its reasonable best efforts and take any all actions (including completing any necessary
filings with Regulatory Authorities) to resolve and cause the Bank to resolve the items set forth on Schedule 4.16 of the SBC Disclosure
Letter, all subject to SBC’s reasonable satisfaction.
4.17 Claims
Letters. Concurrently with the execution and delivery of this Agreement and effective upon the Closing, the Company has
caused each director of the Company and Bank to execute and deliver a Claims Letter in the form attached hereto as Exhibit C.
4.18 Restrictive
Covenant Agreement. Concurrently with the execution and delivery of this Agreement, the Company has caused each non-employee
director of the Company and the Bank to the Company Disclosure Letter to execute and deliver a Restrictive Covenant Agreement in
the form attached hereto as Exhibit D.
4.19 Systems
Integration; Operating Functions. From and after the date hereof, the Company shall cause the Bank and its directors, officers
and employees to, and shall make all commercially reasonable best efforts (without undue disruption to either business) to cause
the Bank’s data processing consultants and software providers to, cooperate and assist Holding and Seacoast in connection
with an electronic and systems conversion of all applicable data of the Bank and Holding to the Seacoast systems, including the
training of Holding and Bank employees, during normal business hours. Holding and its Subsidiaries shall cooperate with Seacoast
in connection with the planning for the efficient and orderly combination of the parties and the operation of SNB (including the
former operations of the Bank) after the Bank Merger, and in preparing for the consolidation of appropriate operating functions
to be effective at the Effective Time or such later date as Seacoast may decide. Holding shall take any action Seacoast may reasonably
request prior to the Effective Time to facilitate the combination of the operations of the Bank with SNB. Without limiting the
foregoing, senior officers of Company and Seacoast shall meet from time to as Company or Seacoast may reasonably request, to review
the financial and operational affairs of Holding and its Subsidiaries, and Holding shall give due consideration to Seacoast’s
input on such matters, with the understanding that, notwithstanding any other provision contained in this Agreement, (i) neither
SBC nor SNB shall be permitted to exercise control of Holding or Bank, prior to the Effective Time, and (ii) neither Holding nor
Bank shall be under any obligation to act in a manner that could reasonably be deemed to constitute anti-competitive behavior under
federal or state antitrust Laws.
4.20 Assumption
of Indentures. At the Effective Time, SBC will assume, pursuant to duly executed and delivered supplemental indentures
satisfactory in form to the trustees under the Indentures, the assumption of the obligations of Holding pursuant to the Indentures
in accordance with their terms.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE
5.1 Conditions
to Obligations of Each Party. The respective obligations of each Party to perform this Agreement and to consummate the
Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived
by each Party pursuant to Section 7.7:
(a) Shareholder
Approval. Holding shall have obtained the Holding Shareholder Approvals.
(b) Regulatory
Approvals. All Regulatory Consents required by law to consummate the transactions contemplated by this Agreement and the Bank
Merger Agreement (the “Required Consents”) shall (i) have been obtained or made and be in full force and
effect and all waiting periods required by Law shall have expired, and (ii) not be subject to any condition or consequence that
would, after the Effective Time, have a Material Adverse Effect on Seacoast or any of its Subsidiaries, including the Company.
(c) No
Orders or Restraints; Illegality. No Order issued by any Governmental Authority (whether temporary, preliminary, or permanent)
preventing the consummation of the Merger shall be in effect and no Law or Order shall have been enacted, entered, promulgated
or enforced by any Governmental Authority that prohibits, restrains or makes illegal the consummation of the Merger.
(d) Registration
Statement. The Registration Statement shall be effective under the 1933 Act, no stop orders suspending the effectiveness of
the Registration Statement shall have been issued, and no action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing.
(e) Quotation
of SBC Common Stock. The shares of SBC Common Stock to be issued to the holders of Holding Stock upon consummation of the Merger
shall have been authorized for quotation on NASDAQ.
5.2 Conditions
to Obligations of Seacoast. The obligations of Seacoast to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by Seacoast pursuant
to Section 7.7:
(a) Representations
and Warranties. The representations and warranties of the Company set forth in this Agreement, after giving effect to Sections 3.1
and 3.2, shall be true and correct as of the date of this Agreement and as of the Closing Date as though made at and as of the
Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement
or some other date shall be true and correct as of such date), and Seacoast shall have received certificates, dated the Closing
Date, signed on behalf of the Company by the chief executive officer and the chief financial officer of Holding, to such effect.
(b) Performance
of Agreements and Covenants. Each and all of the agreements and covenants of the Company to be performed and complied with
pursuant to this Agreement prior to the Effective Time shall have been duly performed and complied with in all material respects
and Seacoast shall have received certificates, dated the Closing Date, signed on behalf of the Company by the chief executive officer
and the chief financial officer of Holding, to such effect.
(c) Corporate
Authorization. Seacoast shall have received from the Company (i) certified resolutions of its Board of Directors and shareholders
authorizing the execution and delivery of this Agreement and the Bank Merger Agreement and the consummation of the transactions
contemplated hereby and thereby; (ii) a certificate as to the incumbency and signatures of officers authorized to execute
this Agreement; and (iii) certificates of good standing, dated not more than three Business Days before the Closing Date,
from the Secretary of State of the State of Florida.
(d) Consents.
The Company shall have obtained all Consents required as a result of the transactions contemplated by this Agreement pursuant to
the Contracts set forth in Section 3.3(b) and Section 3.3(k) of the Company Disclosure Letter.
(e) Material
Adverse Effect. Since the date hereof, there shall not have occurred any fact, circumstance or event, individually or taken
together with all other facts, circumstances or events that has had or is reasonably likely to have a Material Adverse Effect on
the Company.
(f) Tax
Opinions. Seacoast shall have received a written opinion from Alston & Bird LLP in a form reasonably satisfactory to it,
dated the date of the Effective Time, substantially to the effect that, (i) the Merger will constitute a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code, and each of SBC and Holding will be a party to that reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, (ii) the Bank Merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, and each of SNB and the Bank will be a party to that reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, and (iii) no gain or loss will be recognized by holders
of Holding Common Stock or Holding Preferred A Stock, who exchange all of their Holding Common Stock or Holding Preferred A Stock,
as applicable, solely for SBC Common Stock pursuant to the Merger (except with respect to any cash received in lieu of a fractional
share interest in SBC Common Stock and any Preferred B Consideration received). In rendering such opinion, such counsel shall be
entitled to rely upon representations of officers of Seacoast and the Company reasonably satisfactory in form and substance to
such counsel.
(g) Claims
Letters. Seacoast shall have received from the Persons listed in Section 4.17 of the Company Disclosure Letter an executed
written agreement in substantially the form of Exhibit D.
(h) Restrictive
Covenant Agreement. Each of the Persons as set forth in Section 4.18 of the Company Disclosure Letter shall have entered into
the Restrictive Covenant Agreement in substantially the form of Exhibit D.
(i) Holding
Consolidated Tangible Shareholders’ Equity. Holding’s Consolidated Tangible Shareholders’ Equity as of the
close of business on the fifth Business Day prior to the Closing Date shall be an amount not less than $13,256,000 and the Bank’s
general allowance for loan and lease losses (e.g., the allowance for loan and lease losses less specific reserves), excluding any
recapture following the date of this Agreement and received of any regulatory approval, shall be an amount not less than $3,460,000.
(j) Vesting,
Exercise or Termination of Holding Equity Awards. All outstanding Holding Equity Awards shall have been vested, exercised or
terminated as provided in Section 1.9, and Holding’s Board of Directors and shareholders shall have taken all action necessary
to terminate the Holding Stock Plans effective prior to the Effective Time. No Holding Equity Awards, whether vested or unvested,
shall be outstanding as of the Effective Time.
(k) Completion
of Section 4.16 Items. Each of the items set forth in Section 4.16 of the SBC Disclosure Letter shall have been completed and
finalized, all to the reasonable satisfaction of Seacoast.
(l) FIRPTA
Certificate. Seacoast shall have received from each of Holding and the Company, under penalties of perjury, a certificate stating
that each of Holding and the Company, respectively, is not and has not been a United States real property holding corporation,
dated as of the Closing Date and in form and substance required under Treasury Regulation Section 1.897-2(h) and as reasonably
acceptable to Seacoast.
5.3 Conditions
to Obligations of the Company. The obligations of the Company to perform this Agreement and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by the Company
pursuant to Section 7.7:
(a) Representations
and Warranties. The representations and warranties of Seacoast set forth in this Agreement, after giving effect to Sections 3.1
and 3.2, shall be true and correct as of the date of this Agreement and as of the Closing Date as though made at and as of the
Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement
or some other date shall be true and correct as of such date) and the Company shall have received a certificate, dated the Closing
Date, signed on behalf of Seacoast by a duly authorized officer of Seacoast, to such effect.
(b) Performance
of Agreements and Covenants. Each and all of the agreements and covenants of Seacoast to be performed and complied with pursuant
to this Agreement prior to the Effective Time shall have been duly performed and complied with in all material respects and the
Company shall have received a certificate, dated the Closing Date, signed on behalf of Seacoast by a duly authorized officer of
Seacoast, to such effect.
(c) Tax
Opinion. Holding shall have received a written opinion from, Hacker Johnson & Smith P.A. in a form reasonably satisfactory
to it, dated the date of the Effective Time, substantially to the effect that, (i) the Merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, (ii) each of SBC and Holding will be a party to that
reorganization within the meaning of Section 368(a) of the Internal Revenue Code, (iii) no gain or loss will be recognized
by holders of Holding Stock who exchange all of their Holding Common Stock or Holding Preferred A Stock, as applicable, solely
for SBC Common Stock pursuant to the Merger (except with respect to any cash received in lieu of a fractional share interest in
SBC Common Stock or any Preferred B Consideration received), (iv) that basis in the shares SBC Common Stock received in the Merger
will consist of the basis for the shares of Holding Stock exchanged therefor (reduced by an amount of any cash received), and (v)
the holding period for the shares of SBC Common Stock received in the Merger will include the holding period for the shares of
Holding Stock exchanged therefor. In rendering such opinion, Hacker Johnson & Smith P.A. shall be entitled to rely upon representations
of officers of Seacoast and the Company reasonably satisfactory in form and substance to it.
(d) Material
Adverse Effect. Since the date hereof, there shall not have occurred any fact, circumstance or even, individually or taken
together with all other facts, circumstances or events that has had or is reasonably likely a Material Adverse Effect on Seacoast.
ARTICLE 6
TERMINATION
6.1 Termination.
Notwithstanding any other provision of this Agreement, and notwithstanding Holding Shareholder Approval, this Agreement and the
Bank Merger Agreement may be terminated and the Merger and the Bank Merger abandoned at any time prior to the Effective Time:
(a) By
mutual consent of the Board of Directors of Holding and the Board of Directors or Executive Committee of the Board of Directors
of SBC; or
(b) By
the Board of Directors of either Party in the event of a breach of any representation, warranty, covenant or agreement contained
in this Agreement on the part of the other Party, which breach would result in, if occurring or continuing on the Closing Date,
the failure of the conditions to the terminating Party’s obligations set forth in Sections 5.2 or 5.3, as the case dictates,
and that cannot be or has not been cured within 30 days after the giving of written notice to the breaching Party of such breach,
provided that the right to effect such cure shall not extend beyond the date set forth in subparagraph (d) below; or
(c) By
the Board of Directors of either Party in the event that (i) any Regulatory Consent required to be obtained from any Governmental
Authority has been denied by final non-appealable action of such Governmental Authority, or (ii) Holding Shareholder Approval
has not been obtained by reason of the failure to obtain the required vote at the Holding shareholders’ meeting where this
Agreement was presented to such shareholders for approval and voted upon; or
(d) By
the Board of Directors of either Party in the event that the Merger has not been consummated by October 31, 2015, if the failure
to consummate the transactions contemplated hereby on or before such date is not caused by any breach of this Agreement by the
Party electing to terminate pursuant to this Section 6.1(d); or
(e) By
the Board of Directors of SBC in the event that (i) Holding has withdrawn, qualified or modified the Holding Directors’
Recommendation in a manner adverse to Seacoast or shall have resolved to do any of the foregoing, (ii) Holding has failed
to substantially comply with its obligations under Sections 4.5 or 4.12, or (iii) the Board of Directors of Holding has recommended,
endorsed, accepted or agreed to an Acquisition Proposal; or
(f) By
the Board of Directors of Holding in the event that (i) the Board of Directors of Holding has determined in accordance with
Section 4.12 that a Superior Proposal has been made with respect to it and has not been withdrawn and the Board of Directors of
Holding has accepted or agreed to an Acquisition Proposal, and (ii) neither Holding nor any of its Representatives has failed
to comply in all material respects with Section 4.12; or
(g) By
the Board of Directors of SBC if holders of more than 5% in the aggregate of the outstanding Holding Common Stock shall have voted
such shares against this Agreement or the Merger at any meeting called for the purpose of voting thereon and shall have given notice
of their intention to exercise their dissenters’ rights in accordance with the FBCA.
6.2 Effect
of Termination. In the event of the termination and abandonment of this Agreement pursuant to Section 6.1, this Agreement
shall become void and have no effect, and none of Seacoast, Holding, any of their respective Subsidiaries, or any of the officers
or directors of any of them, shall have any Liability of any nature whatsoever hereunder or in conjunction with the transactions
contemplated hereby, except that (i) the provisions of Section 4.10(b), Article 6 and Article 7 shall survive any such
termination and abandonment, and (ii) a termination of this Agreement shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty, covenant, or agreement of such Party contained in this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 Definitions.
(a) Except
as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:
“1933
Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“1934
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Acquisition
Proposal” shall mean, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating
to, or any third party indication of interest in, (i) any acquisition or purchase, direct or indirect, of 15% or more of the
consolidated assets of Holding and its Subsidiaries or 15% or more of any class of equity or voting securities of Holding or any
of its Subsidiaries whose assets, individually or in the aggregate, constitute more than 15% of the consolidated assets of Holding,
(ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party
beneficially owning 15% or more of any class of equity or voting securities of Holding or any of its Subsidiaries whose assets,
individually or in the aggregate, constitute more than 15% of the consolidated assets of Holding, (iii) a merger, consolidation,
share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving
Holding or any of its Subsidiaries whose assets, individually or in the aggregate, constitute more than 15% of the consolidated
assets of Holding, or (iv) any other transaction the consummation of which could reasonably be expected to impede, interfere
with, prevent or materially delay the Merger or the Bank Merger or that could reasonably be expected to dilute materially the benefits
to Seacoast of the transactions contemplated hereby.
“Affiliate”
of a Person shall mean (i) any other Person directly, or indirectly through one or more intermediaries, controlling, controlled
by or under common control with such Person or (ii) any director, partner or officer of such Person or, for any Person that is
a limited liability company, any manager or managing member thereof. For purposes of this definition, “control” (and
its derivatives) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of equity, voting or other interests, as trustee or executor, by contract or
otherwise.
“Benefit
Plan” shall mean any “employee benefit plan” (as that term is defined in Section 3(3) of ERISA) and
any other employee benefit plan, policy, or agreement, whether or not covered by ERISA, and any pension, retirement, profit-sharing,
deferred compensation, equity compensation, employment, stock purchase, gross-up, retention, incentive compensation, employee stock
ownership, severance, vacation, bonus, or deferred compensation plan, policy, or arrangement, any medical, vision, dental, or other
written health plan, any life insurance plan, fringe benefit plan, and any other employee program or agreement, whether formal
or informal, that is entered into, maintained by, sponsored in whole or in part by, or contributed to by the Company or any Subsidiaries
thereof, or under which the Company or any Subsidiaries thereof could have any obligation or Liability, whether actual or contingent,
with respect to any Company employee.
“BHC
Act” shall mean the federal Bank Holding Company Act of 1956, as amended, and rules and regulations thereunder.
“Business
Day” shall mean any day that NASDAQ is normally open for trading for a full day and that is not a Saturday,
a Sunday or a day on which banks in New York, New York are authorized or required to close for regular banking business.
“Confidentiality
Agreement” shall mean that certain Confidentiality Agreement, dated September 18, 2014 by and between Seacoast and the
Company.
“Consent”
shall mean any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant
to any Contract, Law, Order, or Permit.
“Consolidated
Tangible Shareholders’ Equity” shall mean as to a Party as of the close of business on the fifth Business Day prior
to the Closing Date (the “Measuring Date”), the consolidated shareholders’ equity of such Party as set forth
on its balance sheet on the Measuring Date calculated in accordance with GAAP and including the recognition of or accrual for all
Permitted Expenses paid or incurred, or projected to be paid or incurred, in connection with this Agreement and the transactions
contemplated by it, excluding (i) any change related to recapture of any of the allowance for loan and lease losses following the
date of this Agreement and receipt of any related regulatory approval, (ii) all intangible assets, and minus any unrealized gains
or plus any unrealized losses (as the case may be) in such Party’s Subsidiaries’ securities portfolio due to mark-to-market
adjustments as of the Measuring Date. The calculation of Consolidated Tangible Shareholders’ Equity shall be delivered by
each Party to the other Party, accompanied by appropriate supporting detail, no later than the close of business on the fourth
Business Day preceding the Closing Date, and such calculation shall be subject to verification and approval by the other Party,
which approval shall not be unreasonably withheld.
“Contract”
shall mean any written or oral agreement, arrangement, commitment, contract, indenture, instrument, lease, understanding, note,
bond, license, mortgage, deed of trust or undertaking of any kind or character to which any Person is a party or that is binding
on any Person or its capital stock, assets, or business.
“Default”
shall mean (i) any breach or violation of or default under any Contract, Law, Order, or Permit, (ii) any occurrence
of any event that with the passage of time or the giving of notice or both would constitute a breach or violation of or default
under any Contract, Law, Order, or Permit, or (iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right to terminate or revoke, change the current terms of, or renegotiate, or to accelerate,
increase, or impose any Liability under, any Contract, Law, Order, or Permit.
“Dissenting
Shares” shall mean shares of Holding Stock that are owned by shareholders that properly demand and exercise their dissenters’
rights and who complies in all respects with the provisions of Section 607.1301 to 607.1333 of the FBCA.
“Environmental
Laws” shall mean all Laws relating to pollution or protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state and local agencies with jurisdiction over, and including common Law in respect
of, pollution or protection of the environment, including the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, the Resource Conservation and Recovery Act, as amended, and other Laws relating to emissions, discharges, releases,
or threatened releases of any Hazardous Material, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material, including all requirements for permits, licenses and other
authorizations that may be required.
“ERISA
Affiliate” of any Person means any entity that is, or at any relevant time was, a member of (i) a controlled group
of corporations (as defined in Section 414(b) of the Internal Revenue Code), (ii) a group of trades or businesses under
common control (as defined in Section 414(c) of the Internal Revenue Code) or (iii) an affiliated service group (as defined
under Section 414(m) of the Internal Revenue Code or the regulations under Section 414(o) of the Internal Revenue Code)
with such Person.
“ERISA
Plan” shall mean any Benefit Plan that is an “employee welfare benefit plan,” as that term is defined in
Section 3(l) of ERISA, or an “employee pension benefit plan,” as that term is defined in Section 3(2) of
ERISA.
“Exchange
Ratio” shall mean 0.3114.
“Exhibits”
A through D, inclusive, shall mean the Exhibits so marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may be referred to in this Agreement and any other related
instrument or document without being attached hereto.
“Facilities”
shall mean all buildings and improvements on the Property of any Person.
“FBCA”
shall mean the Florida Business Corporation Act.
“FDIC”
shall mean the Federal Deposit Insurance Corporation.
“FINRA”
shall mean the Financial Industry Regulatory Authority.
“Federal
Reserve Board” shall mean the Board of Governors of the Federal Reserve System.
“Financial
Statements” shall mean the consolidated balance sheets (including related notes and schedules, if any) of a Party and
its Subsidiaries as of December 31, 2012 and 2013, and as of December 31, 2014, and the related consolidated statements of
operations, cash flows, and shareholders’ equity and comprehensive income (loss) (including related notes and schedules,
if any) for each of the three years ended December 31, 2012, 2013 and 2014, as delivered by such party to the other Party
or as filed or to be filed by such Party in its SEC Reports.
“GAAP”
shall mean accounting principles generally accepted in the United States of America, consistently applied during the periods
involved.
“Governmental
Authority” shall mean each Regulatory Authority and any other domestic or foreign court, administrative agency, commission
or other governmental authority or instrumentality (including the staff thereof), or any industry self-regulatory authority (including
the staff thereof).
“Hazardous
Material” shall mean (i) any hazardous substance, hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental Laws), and (ii) any chemicals, pollutants, contaminants,
petroleum, petroleum products that are or become regulated under any applicable local, state, or federal Law (and specifically
shall include asbestos requiring abatement, removal, or encapsulation pursuant to the requirements of governmental authorities
and any polychlorinated biphenyls).
“Holding
Capital Stock” shall mean the Holding Common Stock and the Holding Preferred Stock.
“Holding
Common Stock” shall mean the $0.01 par value per share common stock of
Holding.
“Holding
Equity Award” shall mean an award, grant, unit, option to purchase, or other right to receive a share or shares of Holding
Common Stock and shall specifically include any restricted stock awards.
“Holding
2015 Financial Statements” shall mean the consolidated balance sheets (including related notes and schedules, if any)
of Holding and its Subsidiaries as of March 31, 2015 (unaudited) and any subsequent quarterly period, and the related consolidated
statements of operations, cash flows, and shareholders’ equity and comprehensive income (loss) (including related notes and
schedules, if any) and for the three months ended March 31, 2015 (unaudited), and any subsequent quarterly period.
“Holding
Preferred Stock” shall mean: (i) the Holding Preferred A Stock; and (ii) the Holding Preferred B Stock.
“Holding
Preferred A Stock” shall mean the $0.01 par value per share Series A Noncumulative
Perpetual Preferred Stock of Holding.
“Holding
Preferred B Stock” shall mean the $0.01 par value per share Noncumulative Perpetual Series B Preferred Stock of Holding.
“Holding
Shareholder Approval” shall mean the approval of this Agreement by the holders of at least: (i) a majority of
the outstanding shares of Holding Common Stock and Holding Preferred A Stock, voting together as a single class; and (ii) 50% of
the outstanding shares of Holding Preferred B Stock, voting as a separate class.
“Holding
Stock” shall mean the shares of Holding Common Stock and Holding Preferred Stock.
“Holding
Stock Plan” shall mean any equity compensation plan, stock purchase plan, incentive compensation plan, or any other Benefit
Plan under which Holding Equity Awards have been or may be issued.
“HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, any successor statute thereto, and the
rules and regulations promulgated thereunder.
“Indentures”
means the Holding Indentures relating to the Grand Bank Capital Trust I.
“Intellectual
Property” shall mean (i) any patents, copyrights, trademarks, service marks, maskworks or similar rights throughout
the world, and applications or registrations for any of the foregoing, (ii) any proprietary interest, whether registered or
unregistered, in know-how, copyrights, trade secrets, database rights, data in databases, website content, inventions, invention
disclosures or applications, software (including source and object code), operating and manufacturing procedures, designs, specifications
and the like, (iii) any proprietary interest in any similar intangible asset of a technical, scientific or creative nature,
including slogans, logos and the like and (iv) any proprietary interest in or to any documents or other tangible media containing
any of the foregoing.
“Internal
Revenue Code” shall mean the Internal Revenue Code of 1986, as amended, any successor statute thereto, and the rules
and regulations thereunder.
“Law”
shall mean any code, law (including any rule of common law), ordinance, regulation, rule, or statute applicable to a Person
or its assets, Liabilities, or business, including those promulgated, interpreted, or enforced by any Governmental Authority.
“Liability”
shall mean any direct or indirect, primary or secondary, liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency, or guaranty of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
“Lien”
shall mean any mortgage, pledge, reservation, restriction (other than a restriction on transfers arising under the Securities
Laws), security interest, lien, or encumbrance of any nature whatsoever of, on, or with respect to any property or property interest,
other than Liens for property Taxes not yet due and payable.
“Litigation”
shall mean any action, arbitration, cause of action, claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or other proceeding, or notice (written or oral) by any Person
alleging potential Liability, but shall not include claims of entitlement under any Benefit Plans that are made or received in
the ordinary course of business.
“NASDAQ”
shall mean the National Market System of The NASDAQ Stock Market.
“OCC”
shall mean the Office of the Comptroller of the Currency.
“Order”
shall mean any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local, or foreign or other court, arbitrator, mediator, tribunal, administrative agency, or Governmental
Authority.
“Organizational
Documents” shall mean the articles of incorporation, certificate of incorporation, charter, bylaws or other similar
governing instruments, in each case as amended as of the date specified, of any Person.
“Party”
shall mean Seacoast, on the one hand, or the Company, on the other hand, and “Parties” shall mean Seacoast and
the Company.
“Permit”
shall mean any federal, state, local, and foreign governmental approval, authorization, certificate, easement, filing, franchise,
license, or permit from Governmental Authorities that are required for the operation of the businesses of a Person or its Subsidiaries.
“Permitted
Expenses” shall mean with respect to the Company and Seacoast, (i) the reasonable expenses of such Party incurred in
connection with the Merger and the Bank Merger (including fees and expenses of attorneys, accountants or other consultants) and
(ii) the fee payable to such Party’s financial advisor in accordance with the engagement letter disclosed to the other Party
prior to the execution of this Agreement.
“Permitted
Liens” shall mean (i) Liens for current Taxes and assessment not yet past due or the amount or validity of which is being
contested in good faith by appropriate proceedings, (ii) mechanics’, workmen’s, repairmen’s, warehousemen’s
and carrier’s Liens arising in the ordinary course of business of the Company or such Subsidiary consistent with past practice
or (iii) restrictions on transfers under applicable securities Laws.
“Person”
shall mean any natural person or any legal, commercial, or governmental entity, including, a corporation, general partnership,
joint venture, limited partnership, limited liability company, trust, business association, or person acting in a representative
capacity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the 1934 Act.
“Property”
shall mean all real property leased or owned by any Person and its Subsidiaries, either currently or in the past.
“Proxy
Statement/Prospectus” shall mean the proxy statement and other proxy solicitation materials of Holding and the prospectus
of SBC constituting a part of the Registration Statement.
“Registration
Statement” shall mean the Registration Statement on Form S-4, or other appropriate form, including any pre-effective
or post-effective amendments or supplements thereto, filed with the SEC by SBC under the 1933 Act with respect to the shares of
SBC Common Stock to be issued to the holders of Holding Stock in connection with the transactions contemplated by this Agreement.
“Regulatory
Authorities” shall mean, collectively, the Federal Trade Commission, the United States Department of Justice, the Federal
Reserve Board, the OCC, the FDIC, the Consumer Financial Protection Bureau, the Internal Revenue Service, all federal and state
regulatory agencies having jurisdiction over the Parties and their respective Subsidiaries, FINRA, and the SEC (including, in each
case, the staff thereof).
“Representative”
shall mean any investment banker, financial advisor, attorney, accountant, consultant, agent or other representative of a Person.
“Rights”
shall mean, with respect to any Person, securities, or obligations convertible into or exercisable for, or giving any other
Person any right to subscribe for or acquire, or any options, calls, restricted stock, deferred stock awards, stock units, phantom
awards, dividend equivalents, or commitments relating to, or any stock appreciation right or other instrument the value of which
is determined in whole or in part by reference to the market price or value of, shares of capital stock of such Person, whether
vested or unvested or exercisable or unexercisable, and shall include Holding Equity Awards.
“SBC Common Stock”
shall mean the $0.10 par value per share common stock of SBC.
“SBC
Equity Award” shall mean an award, grant, unit, option to purchase, or other right to receive a share or shares of SBC
Common Stock and shall specifically include any restricted stock awards.
“SBC
Stock Plan” shall mean any equity compensation plan, stock purchase plan, incentive compensation plan, or any other Benefit
Plan under which SBC Equity Awards have been or may be issued.
“SEC”
shall mean the United States Securities and Exchange Commission or any successor thereto.
“SEC
Reports” shall mean all forms, proxy statements, registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with the SEC.
“Securities
Laws” shall mean the 1933 Act, the 1934 Act, the Investment Company Act of 1940, the Investment Advisers Act of 1940,
and the Trust Indenture Act of 1939, each as amended, state securities and “Blue Sky” Laws, including in each case
the rules and regulations thereunder.
“Subsidiary”
or “Subsidiaries” shall have the meaning assigned in Rule 1-02(x) of Regulation S-X of the SEC.
“Superior
Proposal” means any bona fide, unsolicited, written Acquisition Proposal for at least a majority of the outstanding shares
of Holding Stock on terms that the Board of Directors of Holding concludes in good faith to be more favorable from a financial
point of view to its shareholders than the Merger and the other transactions contemplated by this Agreement (including the terms,
if any, proposed by Seacoast to amend or modify the terms of the transactions contemplated by this Agreement), (i) after receiving
the written advice of its financial advisor (which shall be a nationally recognized investment banking firm, Seacoast acknowledging
that Hovde Group LLC and Austin Associates, LLC are each a nationally recognized investment banking firm), (ii) after taking into
account the likelihood of consummation of such transaction on the terms set forth therein (as compared to, and with due regard
for, the terms herein) and (iii) after taking into account all legal (with the written advice of outside counsel), financial (including
the financing terms of any such proposal), regulatory and other aspects of such proposal and any other relevant factors permitted
under applicable Law.
“Tax”
or “Taxes” shall mean all federal, state, local, and foreign taxes, charges, fees, levies, imposts, duties, or
other like assessments, including assessments for unclaimed property, as well as income, gross receipts, excise, employment, sales,
use, transfer, intangible, recording, license, payroll, franchise, severance, documentary, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital stock, paid-up capital, profits, withholding, Social
Security, single business and unemployment, disability, real property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or governmental fee of any kind whatsoever, or any amount in respect of
unclaimed property or escheat, imposed by or required to be paid or withheld by the United States or any state, local, or foreign
government or subdivision or agency thereof, whether disputed or not, including any related interest, penalties, and additions
imposed thereon or with respect thereto, and including any liability for Taxes of another Person pursuant to a contract, as a transferee
or successor, under Treasury Regulation Section 1.1502-6 or analogous provision of state, local or foreign Law or otherwise.
“Tax
Return” shall mean any report, return, information return, or other information provided or required to be provided to
a Taxing Authority in connection with Taxes, including any return of an Affiliated or combined or unitary group that includes a
Party or its Subsidiaries and including without limitation any estimated Tax return.
“Taxable
Period” shall mean any period prescribed by any Taxing Authority.
“Taxing
Authority” shall mean any federal, state, local, municipal, foreign, or other Governmental Authority, instrumentality,
commission, board or body having jurisdiction over the Parties to impose or collect any Tax.
“Technology
Systems” shall mean the electronic data processing, information, record keeping, communications, telecommunications,
hardware, third-party software, networks, peripherals, portfolio trading and computer systems, including any outsourced systems
and processes, and Intellectual Property used by the Company.
“Termination Fee” shall
mean $725,000.
(b) The
terms set forth below shall have the meanings ascribed thereto in the referenced sections:
Articles of Merger |
|
Section 1.4 |
Agreement |
|
Parties |
Bank |
|
Parties |
Bank Merger |
|
Preamble |
Bank Merger Agreement |
|
Preamble |
Closing |
|
Section 1.3 |
Closing Date |
|
Section 1.3 |
Company |
|
Parties |
Company Disclosure Letter |
|
Section 3.1 |
|
|
|
Company Shareholder Support Agreement |
|
Preamble |
Covered Employees |
|
Section 4.14(a) |
Covered Parties |
|
Section 4.15(b) |
CRA |
|
Section 3.3(p) |
Dissenting Shareholder |
|
Section 2.3 |
Effective Time |
|
Section 1.4 |
Exchange Agent |
|
Section 2.1 |
Holding |
|
Parties |
Holding Certificates |
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Section 1.5(b) |
Holding Directors’ Recommendation |
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Section 3.3(b)(ii) |
Holding Latest Balance Sheet |
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Section 3.3(d)(ii) |
IIPI |
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Section 3.3(q) |
Indemnified Party |
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Section 4.15(a) |
Material Adverse Effect |
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Section 3.2(b) |
Merger |
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Preamble |
Merger Consideration |
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Section 1.5(a) |
Regulatory Consents |
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Section 4.8(b) |
Required Consents |
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Section 5.1(b) |
Sarbanes-Oxley Act |
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Section 3.3(d)(iii) |
SBC Shareholder Support Agreement |
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Preamble |
Surviving Bank |
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Section 1.2 |
Surviving Corporation |
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Section 1.1 |
Takeover Laws |
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Section 3.3(u) |
SBC |
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Parties |
Seacoast |
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Parties |
Seacoast SEC Reports |
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Section 3.4(d)(i) |
SNB |
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Parties |
(c) Any
singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,”
“includes,” or “including” are used in this Agreement, they shall be deemed followed by the words “without
limitation.” The words “hereby,” “herein,” “hereof” or “hereunder,” and similar
terms are to be deemed to refer to this Agreement as a whole and not to any specific section.
7.2 Non-Survival
of Representations and Covenants. Except for Articles 1 and 2, Sections 4.7(b), 4.7(c), 4.10(b), 4.14 and 4.15 and
this Article 7, the respective representations, warranties, obligations, covenants, and agreements of the Parties shall be
deemed only to be conditions of the Merger and shall not survive the Effective Time.
7.3 Expenses.
(a) Except
as otherwise provided in this Section 7.3 or in Section 7.4, each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated hereunder, including filing, registration, and
application fees, printing fees, and fees and expenses of its own financial or other consultants, investment bankers, accountants,
and counsel, except that Seacoast shall bear and pay the filing fees payable in connection with the Registration Statement and
the Proxy Statement/Prospectus and one half of the printing costs incurred in connection with the printing of the Registration
Statement and the Proxy Statement/Prospectus.
(b) Nothing
contained in this Section 7.3 or Section 7.4 shall constitute or shall be deemed to constitute liquidated damages for the
willful breach by a Party of the terms of this Agreement or otherwise limit the rights of the non-breaching Party.
7.4 Termination
Fee.
(a) In
the event that (i) (A) either Party terminates this Agreement pursuant to Section 6.1(c)(ii), or (B) SBC terminates this Agreement
pursuant to Section 6.1(b), as a result of a willful breach of a covenant or agreement by the Company, or pursuant to Sections 6.1(e)(i)
or 6.1(e)(ii), (ii) at any time after the date of this Agreement and prior to such termination Company shall have received
or there shall have been publicly announced an Acquisition Proposal that has not been formally withdrawn or abandoned prior to
such termination, and (iii) within 12 months following such termination an Acquisition Proposal is consummated or a definitive
agreement or letter of intent is entered into by the Company with respect to an Acquisition Proposal, the Company shall pay Seacoast
the Termination Fee within five Business Days after the date it becomes payable pursuant hereto, by wire transfer of immediately
available funds.
(b) In
the event that SBC terminates this Agreement pursuant to Section 6.1(e)(iii), the Company shall pay to Seacoast the Termination
Fee within five Business Days after the date this Agreement is terminated, by wire transfer of immediately available funds. In
the event that Holding terminates this Agreement pursuant to Section 6.1(f), the Company shall pay to Seacoast the Termination
Fee on the date this Agreement is terminated, by wire transfer of immediately available funds.
(c) The
Company hereby acknowledges that the agreements contained in this Section 7.4 are an integral part of the transactions contemplated
by this Agreement and that, without these agreements, Seacoast would not enter into this Agreement. In the event that the Company
fails to pay if and when due any amount payable under this Section 7.4, then (i) the Company shall reimburse Seacoast
for all costs and expenses (including disbursements and reasonable fees of counsel) incurred in connection with the collection
of such overdue amount, and (ii) the Company shall pay to Seacoast interest on such overdue amount (for the period commencing
as of the date such overdue amount was originally required to be paid and ending on the date such overdue amount is actually paid
in full) at a rate per annum equal to five percent (5%) over the “prime rate” (as published in the “Money Rates”
column in The Wall Street Journal or, if not published therein, in another national financial publication selected by Seacoast)
in effect on the date such overdue amount was originally required to be paid.
(d) Assuming
the Company is not in breach of its obligations under this Agreement, including Sections 4.5 and 4.12, then the payment of the
Termination Fee shall fully discharge the Company from and be the sole and exclusive remedy of the other Party with respect to,
any and all losses that may be suffered by such other Party based upon, resulting from or rising out of the circumstances giving
rise to such termination of this Agreement under Section 7.4(a) or 7.4(b). In no event shall the Company be required to pay the
Termination Fee on more than one occasion.
7.5 Entire
Agreement. Except as otherwise expressly provided herein, this Agreement (including the Company Disclosure Letter and the
Exhibits) constitutes the entire agreement between the Parties with respect to the transactions contemplated hereunder and supersedes
all prior arrangements or understandings with respect thereto, written or oral, other than the Confidentiality Agreement, which
shall remain in effect. The representations and warranties in this Agreement are the product of negotiations among the Parties
hereto and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver
by the Parties hereto in accordance herewith without notice or liability to any other Person. In some instances, the representations
and warranties in this Agreement may represent an allocation among the Parties hereto of risks associated with particular matters
regardless of the knowledge of any of the Parties hereto. Consequently, Persons other than the Parties may not rely upon the representations
and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of
any other date. Notwithstanding any other provision hereof to the contrary, no consent, approval, or agreement of any third party
beneficiary will be required to amend, modify or waive any provision of the Agreement. Nothing in this Agreement expressed or implied,
is intended to confer upon any Person, other than the Parties or their respective successors, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement; provided that, notwithstanding the foregoing clause, following the Effective
Time only (but not unless and until the Effective Time occurs), (i) the provisions of Section 4.14 shall be enforceable by
each Covered Employee described therein, (ii) the provisions of Section 4.15 shall be enforceable by each Indemnified Party described
therein, and (iii) each holder of Holding Capital Stock, who properly surrender his or her Holding Capital Stock in accordance
with Article 2, shall have the right to receive the applicable Aggregate Merger Consideration and such right shall be enforceable
by such holder of Holding Capital Stock.
7.6 Amendments.
Before the Effective Time, this Agreement (including the Company Disclosure and the Exhibits) may be amended by a subsequent writing
signed by each of the Parties, whether before or after the Holding Shareholder Approval has been obtained, except to the extent
that any such amendment would require the approval of the shareholders of Holding, unless such required approval is obtained.
7.7 Waivers.
(a) Prior
to or at the Effective Time, either Party shall have the right to waive any Default in the performance of any term of this Agreement
by the other Party, to waive or extend the time for the compliance or fulfillment by the other Party of any and all of such other
Party’s obligations under this Agreement, and to waive any or all of the conditions precedent to its obligations under this
Agreement, except any condition which, if not satisfied, would result in the violation of any Law. No waiver by a Party shall be
effective unless in writing signed by a duly authorized officer of such Party.
(b) The
failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect the right of
such Party at a later time to enforce the same or any other provision of this Agreement. No waiver of any condition or of the breach
of any term contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing
waiver of such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement.
7.8 Assignment.
Except as expressly contemplated hereby, neither this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise) without the prior written consent of each other party.
Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by the parties
and their respective successors and assigns.
7.9 Notices.
All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered by
hand, by facsimile or electronic transmission, by registered or certified mail, postage pre-paid, or by courier or overnight carrier,
to the Persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
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Seacoast: |
Seacoast Banking Corporation of Florida |
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815 Colorado Avenue |
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Stuart, Florida 34994 |
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Telecopy Number: (772) 288-6086 |
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Attention: Dennis S. Hudson III |
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Copy to Counsel (which |
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shall not constitute notice): |
Alston & Bird LLP |
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1201 West Peachtree Street |
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Atlanta, Georgia 30309 |
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Telecopy Number: (404) 881-7777 |
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Attention: Randolph A. Moore III |
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Company: |
Grand Bankshares, Inc. |
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2055 Palm Beach Lakes Blvd. |
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West Palm Beach, FL 33409 |
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Telecopy Number: (561) 615-5050 |
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Attention: J. Russell Greene |
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Copy to Counsel (which |
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shall not constitute notice): |
Smith Mackinnon, PA |
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255 South Orange Avenue, Suite 1200 |
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Orlando, Florida 32801 |
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Telecopy Number: (407) 843-2448 |
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Attention: John P. Greeley |
7.10 Governing
Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Florida, without regard
to any applicable principles of conflicts of Laws that would result in the application of the law of another jurisdiction, except
that the Laws of the United States shall govern the consummation of the Bank Merger.
7.11 Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile or electronic
transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties transmitted by facsimile or electronic transmission shall be deemed
to be their original signatures for all purposes.
7.12 Captions.
The captions contained in this Agreement are for reference purposes only and are not part of this Agreement.
7.13 Interpretations.
Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be considered the draftsman. The Parties acknowledge and
agree that this Agreement has been reviewed, negotiated, and accepted by all Parties and their attorneys and shall be construed
and interpreted according to the ordinary meaning of the words used so as fairly to accomplish the purposes and intentions of the
Parties.
7.14 Severability.
If any term or provision of this Agreement is determined by a court of competent jurisdiction to be invalid, void or unenforceable,
the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which
it has been held invalid or unenforceable, shall remain in full force and effect and in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination, the Parties and Merger Sub shall negotiate in good faith in an effort to agree upon
a suitable and equitable substitute provision to effect the original intent of the Parties. If any provision of this Agreement
is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
7.15 Attorneys’
Fees.
In any action at law or
suit in equity to enforce this Agreement or the rights of any of the parties hereunder, the prevailing party in such action or
suit shall be entitled to receive its reasonable attorneys’ fees and costs and expenses incurred in such action or suit.
7.16 Waiver of Jury Trial.
THE PARTIES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT ANY PARTY MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY PROCEEDING, LITIGATION
OR COUNTERCLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. IF THE SUBJECT MATTER OF ANY LAWSUIT IS ONE IN WHICH THE WAIVER
OF JURY TRIAL IS PROHIBITED, NO PARTY TO THIS AGREEMENT SHALL PRESENT AS A NONCOMPULSORY COUNTERCLAIM IN ANY SUCH LAWSUIT ANY CLAIM
BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. FURTHERMORE, NO PARTY TO THIS AGREEMENT SHALL SEEK TO
CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL CANNOT BE WAIVED.
IN WITNESS WHEREOF,
each of the Parties has caused this Agreement to be executed on its behalf and its seal to be hereunto affixed and attested by
officers thereunto as of the day and year first above written.
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SEACOAST BANKING CORPORATION OF FLORIDA |
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By: |
/s/ Dennis S. Hudson, III |
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Name: Dennis S. Hudson, III |
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Title: President & Chief Executive Officer |
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SEACOAST NATIONAL BANK |
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By: |
/s/ Dennis S. Hudson, III |
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Name: Dennis S. Hudson, III |
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Title: Chief Executive Officer |
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GRAND BANKSHARES, INC. |
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By: |
/s/ J. Russell Greene |
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Name: J. Russell Greene |
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Title: President & Chief Executive Officer |
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GRAND BANK & TRUST OF FLORIDA |
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By: |
/s/ J. Russell Greene |
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Name: J. Russell Greene |
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Title: President & Chief Executive Officer |
[Signature Page to Agreement and Plan of
Merger]
EXHIBIT 99.1
To Form 8-K dated March 25, 2015
NEWS RELEASE
SEACOAST BANKING CORPORATION OF FLORIDA
Dennis S. Hudson, III
Chairman and Chief Executive Officer
Seacoast Banking Corporation of Florida
(772) 288-6085
SEACOAST SIGNS DEFINITIVE MERGER AGREEMENT
TO ACQUIRE GRAND BANKSHARES
STUART, FL, March 25, 2015 – Seacoast
Banking Corporation of Florida (NASDAQ: SBCF) (“Seacoast”), a bank holding company whose principal subsidiary is Seacoast
National Bank (“Seacoast Bank”), and Grand Bankshares, Inc. (“Grand”) announced today the signing of a
definitive agreement pursuant to which Grand will merge with and into Seacoast. The acquisition will more than double Seacoast’s
existing position in Palm Beach County to create one of the largest local community banks in the market.
Grand, headquartered in West Palm Beach, Florida
and which operates Grand Bank & Trust of Florida, will add approximately $208 million in assets, $184 million in deposits,
and $127 million in gross loans to Seacoast’s operations, along with 3 branch locations positioned in Palm Beach County.
Grand was founded in 1999 and has built a strong deposit franchise, with low cost core deposits representing 90% of total deposits
and noninterest bearing demand deposits representing 26% of total deposits. Grand’s loan portfolio, which is comprised of
approximately 63% commercial real estate loans, complements Seacoast’s existing loan portfolio.
- continued –
“We are extremely excited to announce
this agreement with Grand Bankshares, Inc. and look forward to welcoming its customers and associates into Seacoast Bank. Both
banks have a proven track record of exceptional customer service and support for our communities,” said Dennis S. Hudson,
Seacoast’s Chairman and CEO. “This acquisition will allow Seacoast to substantially grow our customer base in one of
the most important markets in Florida. We are also pleased to announce that J. Russell Greene, Grand’s President and CEO,
will join Seacoast as Executive Vice President and Palm Beach County market executive.”
“The transaction creates value for our
shareholders and customers by uniting two strong community banks with a long history of delivering top-notch customer service,”
said J. Russell Greene. “We are excited about the additional products and services that Seacoast will bring to our customer
base and the long-term value this transaction creates for our shareholders.”
Under the terms of the definitive agreement,
Seacoast will issue 0.3114 Seacoast shares of common stock for each outstanding share of Grand common and preferred A stock, or
a total of approximately 1.09 million shares of Seacoast common stock. Additionally, Seacoast will pay approximately $1,481,000
in cash for all of Grand’s outstanding shares of preferred B stock, representing the par value of $1,000 per share of preferred
B stock. Based on Seacoast's 15 day volume weighted average price of $13.52 on March 24, 2015 and the cash consideration, the transaction
will be valued at approximately $16.2 million. Seacoast expects the acquisition to be accretive to 2015 and 2016 earnings per share
and slightly accretive to tangible book value per common share. Following the transaction, Seacoast will maintain its strong capital
ratios.
- continued -
The boards of directors of both Seacoast and
Grand have unanimously approved the transaction. The transaction is expected to close in the third quarter of 2015, and is subject
to approval by Grand’s shareholders, receipt of regulatory approvals and other customary closing conditions.
Sandler O’Neill & Partners, L.P.
served as exclusive financial advisor and Alston & Bird LLP served as legal counsel to Seacoast. Hovde Group, LLC served as
financial advisor and Smith Mackinnon, PA served as legal counsel to Grand. Austin Associates LLC provided a fairness opinion to
Grand’s board.
Conference Call Details
Seacoast will host a conference call on Thursday,
March 26, 2015 at 8:30 a.m. (Eastern Time) to discuss the merger. Investors may call in (toll-free) by dialing (800) 774-6070 (passcode:
7789246; host: Dennis S. Hudson). Alternatively, individuals may listen to the live webcast of the conference call by visiting
Seacoast’s website at SeacoastBanking.com. The link is located in the subsection “Presentations” under the heading
“Investor Services”. Beginning the afternoon of March 26, 2015, an archived version of the webcast can be accessed
from this same subsection of the website. The archived webcast will be available for one year.
About Seacoast Banking Corporation of
Florida (NASDAQ: SBCF)
Seacoast
Banking Corporation of Florida is one of the largest community banks headquartered in Florida with approximately $3.1 billion
in assets and $2.4 billion in deposits as of December 31, 2014. The Company provides integrated financial services including commercial
and retail banking, wealth management, and mortgage services to customers through 43 traditional branches of its locally-branded
wholly-owned subsidiary bank, Seacoast Bank, and five commercial banking centers. Offices stretch from Ft. Lauderdale, Boca
Raton and West Palm Beach north through the Space Coast of Florida, into Orlando and Central Florida, and west to Okeechobee and
surrounding counties.
- continued –
Important Information for Investors
and Shareholders
This communication does not constitute an
offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there
be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of such jurisdiction. Seacoast Banking Corporation of Florida ("Seacoast")
will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4 containing a proxy
statement of Grand Bankshares, Inc. ("Grand") and a prospectus of Seacoast, and Seacoast will file other documents with
respect to the proposed merger. A definitive proxy statement/prospectus will be mailed to shareholders of Grand. Investors and
security holders of Grand are urged to read the proxy statement/prospectus and other documents that will be filed with the SEC
carefully and in their entirety when they become available because they will contain important information. Investors and security
holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus (when available) and
other documents filed with the SEC by Seacoast through the website maintained by the SEC at http://www.sec.gov. Copies of the documents
filed with the SEC by Seacoast will be available free of charge on Seacoast's internet website or by contacting Seacoast.
Seacoast, Grand, their respective directors
and executive officers and other members of management and employees may be considered participants in the solicitation of proxies
in connection with the proposed transaction. Information about the directors and executive officers of Seacoast is set forth in
its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on April 8, 2014 and its Current
Reports on Form 8-K. Other information regarding the participants in the proxy solicitations and a description of their direct
and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant
materials to be filed with the SEC when they become available.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, and is intended to be protected by the safe harbor provided by the same. These statements are subject to numerous risks
and uncertainties. These risks and uncertainties include, but are not limited to, the following: failure to obtain the approval
of shareholders of Grand in connection with the merger; the timing to consummate the proposed merger; the risk that a condition
to closing of the proposed merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed
merger is not obtained or is obtained subject to conditions that are not anticipated; the parties' ability to achieve the synergies
and value creation contemplated by the proposed merger; the parties' ability to promptly and effectively integrate the businesses
of Seacoast and Grand; the diversion of management time on issues related to the merger; the failure to consummate or delay in
consummating the merger for other reasons; changes in laws or regulations; and changes in general economic conditions. For additional
information concerning factors that could cause actual conditions, events or results to materially differ from those described
in the forward-looking statements, please refer to the factors set forth under the headings "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in Seacoast's most recent Form 10-K report and to
Seacoast's most recent Form 8-K reports, which are available online at www.sec.gov. No assurances can be given that any of the
events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have
on the results of operations or financial condition of Seacoast or Grand.
EXHIBIT 99.2
To Form 8-K dated March 25, 2015
Seacoast Banking Corporation of Florida
Acquisition of Grand Bankshares, Inc.
March 26, 2015
8:30 AM Eastern Time
Company Participants:
Dennis S. Hudson, III, Chairman and Chief Executive Officer, Seacoast
Banking Corporation of Florida
Charles K. Cross, Jr., Executive Vice President, Commercial Banking,
Seacoast Banking Corporation of Florida
David Houdeshell, Executive Vice President and Chief Credit Officer,
Seacoast Banking Corporation of Florida
Charles Shaffer, Executive Vice President, Community Banking, Seacoast
Banking Corporation of Florida
Other Participants:
Taylor Brodarick, Vice President, Guggenheim Securities, LLC
Scott Valentin, Managing Director, FBR Capital Markets
Transcript:
Operator: Welcome to Seacoast’s
special announcement conference call. My name is Eric, and I’ll be your operator for today’s call. At this time, all
participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is
being recorded.
I will now turn the call over to Dennis Hudson,
CEO of Seacoast Banking Corporation. Mr. Hudson, you may begin.
Dennis Hudson: Thank you very much,
and welcome to the Seacoast’s Grand Bankshares Acquisition conference call.
Before we begin, I’d like to direct your
attention to the statement contained at the end of our press release regarding forward statements. During our call we may be discussing
certain issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act, and accordingly
our comments are intended to be covered within the meaning of Section 27A of the Act.
With me today is Chuck Cross, our Accelerate
Commercial Banking Business Leader, as well as our Community Banking Business Leader Chuck Shaffer. Also joining us today is David
Houdeshell, our Chief Credit Officer.
We have posted the slide deck on our website,
seacoastbanking.com, under the section titled Presentations. The slides we will use for this call are titled “Acquisition
of Grand Bankshares.” We’ll be referring to those slides during our presentation.
Yesterday after the market closed, we announced
our acquisition of Grand Bankshares, a $208 million organization and a 16-year-old organization institution in Palm Beach County,
Florida. This acquisition will more than double our size in the important and attractive Palm Beach County market and will add
an additional two offices to our existing three traditional branch offices in the county. One additional office will be consolidated
with one of our offices. These two offices are less than a mile apart from each other.
We are also pleased that Russell Greene, who
leads Grand as CEO, will be joining Seacoast as our EVP and Palm Beach County Market Executive. Russell has operated in this market
for many, many years, is one of the most respected and most well known and most knowledgeable bankers in the area, and we look
forward to working with Russell to grow our combined franchise in the important Palm Beach County market.
We are now one of the largest local banks in
Palm Beach County, a market that is experiencing tremendous rebound, aided by the tremendous growth coming out of South Florida.
As we described on page 3 of the deck, the
transaction was structured with stock and a small amount of cash. The cash, which totals around $1.5 million, will redeem the Class
B Preferred holders at par, and the stock, totaling around $14.7 million, will be exchanged for common shares and convertible Class
A Preferred shares. The common consideration is based on a fixed exchange ratio. The transaction proceeds, both cash and stock,
equate to pricing of around 108% of tangible book and a core deposit premium of around 1.2%.
We expect this transaction to be modestly accretive
to our tangible book value at closing and around 5% accretive to our earnings per share in 2016. We also expect it to be accretive
to our earnings per share and 2015, excluding any one time merger charges. Merger charges are estimated to be around $3.5 million
before tax. Closing is expected to occur in the third quarter of this year.
As I said, Grand Bank and Trust has been around
for over 16 years, is $208 million in size, with a strong deposit portfolio. Transaction accounts total around 29% of total deposit
and their cost of deposits in the most recent quarter was around 37 basis points, so a very valuable deposit base and a nice complement
to our overall funding base.
Their loan portfolio is around $127 million
in size. We conducted thorough diligence on the portfolio and have estimated a pretax loan credit mark of around $4.5 million,
offset against their current loan loss reserve, which totals $3.7 million. The loan portfolio yield was 3.64% over the past year,
and their focus on commercial real estate and commercial lending continues to move our mix of loans in the right direction.
We have assumed reasonable and achievable cost
savings given our existing presence in the market and a small overlap, allowing us to consolidate one office. We have also assumed
no revenue synergies and we have assumed some fairly rapid decay rates for both loans and deposits, so we feel very confident that
we’ll be able to produce the earnings accretion that we’ve advertised.
So, to sum it up, we’re thrilled with
the opportunity to achieve meaningful progress in expanding our reach and our mass in one of the most important and valuable markets
on the Eastern Seaboard of the United States. Pricing is reasonable, and provides both shareholder groups with very nice upside
potential, and our estimates around earnings accretion are based on very conservative assumptions.
As you know, our focus over the past few quarters
has been, and remains, to achieve marked improvement in earnings results. We believe this transaction is aligned with that goal,
and will contribute to the bottom line starting in the second half of this year. Moreover, it expands our customer base in one
of the most attractive market in the United States, contributing to real growth and value for our shareholders.
We’ll now pause and would be pleased
to take a few questions, if there are any, so I’m going to turn the call back over to the operator. Thank you.
Operator: Thank you. We will now begin
the question-and-answer session. (Operator instructions.)
Our first question comes from Scott Valentin
from FBR. Scott, please go ahead.
Scott Valentin: Thank you, operator,
and good morning, everyone.
Dennis Hudson: Good morning.
Scott Valentin: Just a couple quick
questions. One, can you explain… on the credit quality, it shows a high level of NPLs, but very little in non-current loans.
Just wondering if that’s a certain asset class that Grand Bank focused on, or what that is.
Dennis Hudson: I guess it would suffice
to say that they have a number of loans that have been placed in the non-performing categories that are performing. I would say
these represent older loans that were stressed during the downturn that fortunately continue to actually perform. It’s just
an unusual circumstance. The numbers are quite small, as you can see. It doesn’t take much to add up to those numbers. So
no real unusual color I would say around that. It’s something we dealt with in our portfolio over the last several years
as well.
Scott Valentin: Okay. Thank you. Then
just you mentioned closing one branch of the three; there’s some overlap there, so at least one branch closure of the pro-forma
organization. And their efficiency ratio, like a lot of small banks, obviously, with the regulatory costs being what they are,
tough to drive efficiency ratio down in a small bank. Can you talk about maybe, you mentioned cost savings, have you tried to size
those yet, and maybe talk about where else, aside from branch closure, you see opportunities?
Dennis Hudson: Well, if you think about
it from our perspective, the net pick up in overhead after all the smoke clears would be two branches. I think we have sufficient
capacity to absorb a lot of the process work and so forth inside the existing franchise that exists in that community. We’ll
also, obviously, be picking up some additional cost outs related to some of the key personnel in the organization, and so the cost
outs are probably more significant than one might think in that sense.
Having said that, again the numbers are small,
and we look forward to integrating, as we go through the integration between now and sometime in the third quarter of this year.
We’re going to be very careful and try to onboard as many of their staff as we can in many of the open positions that exist
within our franchise. So it’s a great opportunity for their staff to expand their opportunities and it’s also a cost
savings opportunity when you put the two banks together. So, again, nothing terribly unusual or remarkable, but just think of it
as a net addition of two offices.
Scott Valentin: Okay. One final question,
I know Seacoast has been moving towards, or focused on commercial lending strategy, and obviously the portfolio at Grand Bank is
mostly commercial real estate and multi-family and C&I. But just wondering, can you talk about maybe the infrastructure you’re
getting with the lending teams that are focused and how does that add to Seacoast’s strategy?
Dennis Hudson: They have a small lending
team. We have met some of those folks and we’re impressed, and we look forward to working with them as we go forward. But
again, it’s a very small organization, a small number of folks focused in that area; I think two or three.
Charles Cross: Yes. This is Chuck Cross.
Remember, we’re buying $127 million in loans and adding that to a commercial loan book of $1.1 billion, so it’s less
than 10%, so it’s relatively small compared to the combined unit.
Scott Valentin: Okay. All right. Thanks
very much.
Dennis Hudson: I think one of the important
things, though, to remember is while the bank’s been around a number of years, many of the folks that are working there have
been around the market for their entire career. So we’re really excited to work with some of the people in the organization,
and in particular Russell Greene, who leads that company. Russell spent just about his entire career in the market, he’s
been well known to us and our people and we look forward to working with him over the next few years.
Operator: And our next question comes
from Taylor Brodarick from Guggenheim. Taylor, please go ahead.
Taylor Brodarick: Great. Thank you.
A couple market questions, Denny. I saw a media report this week talking about the solid growth in high net worth people into Florida
in the last year, and I would assume some of them would traffic, obviously, in this market. I was curious if Grand or you had any
sense how many are potential banking customers or have relationships outside the state?
Dennis Hudson: Well, first of all, I
would just say that the economy in Florida is back in a strong way, particularly in the metro areas, and we’re seeing incredible
opportunity and growth in the metro areas that we have exposure to, including Palm Beach County. I would say the population transfer
and movement into Florida is not back to the all-time high that we saw before the downturn, but it is approaching numbers that
are darned respectable, and that’s been a very big turnaround in the last couple of years. This season, I’ve been saying
for the last three or four years that things have gotten better every season, but I think it would be fair to say for those of
us sitting around the table that this has been remarkably better.
Any comment on that?
Charles Shaffer: No. It was a significant
season, and when you look at where the footprint of Grand is in Palm Beach County and think about the migration, particularly from
the Northeast, there’s probably no better market than Palm Beach County in that regard, particularly from high net worth
type individuals. So we are looking tremendously forward to the ability to compete and attract that type of customer base in what
is probably one of the best markets in the entire state.
Taylor Brodarick: Great. So it sounds
like I can say this market had been on your radar to get bigger and it was sort of a bonus that you’re able to execute an
accretive deal. Is that probably why it may be moved to the top of the list, as opposed to maybe some other metro expansion in
other markets?
Dennis Hudson: Yes, and also given that
we already had some presence there. We’ve talked about the branches we have there, but we also have a good number of people
there. Chuck, you may want to just comment on the commitment we’ve made to the Palm Beach County market over particularly
the last year and a half or so.
Charles Cross: Yes, we have two commercial
banking teams, one in Palm Beach Gardens and one in Boca Raton, that even with limited brick-and-mortar have been gaining new customers
that are both loan and deposit customers, because not all businesses need to have brick-and-mortar to do their deposits. A lot
of it is remote deposit capture.
Taylor Brodarick: Okay. Thank you both.
Appreciate it.
Charles Shaffer: Yes. And I would encourage
you, too, there’s a slide in the deck on Palm Beach County and some of the metrics there. If you take a moment to take a
look at it, North Palm Beach is one of our fastest growing markets in the entire franchise, as well as it’s the second highest
per capita income. It has a number of very recognizable employers and it’s one of the strongest housing markets. So if you
take a moment to take a look through that you’ll see the way we’re thinking through this.
Dennis Hudson: Yes, we love the Palm
Beach County market. We would like to get a lot larger in that market. It’s obviously very tight and connected to the largest
part of our franchise in terms of branches and in terms of dollars. A great market. We also like, obviously, the Orlando/Space
Coast market, where we last year dramatically improved our position. The exciting thing for me is all of this is occurring for
us just as the economy underneath those markets is starting to really grow in a meaningful way. We’re looking forward to
continued growth and business, particularly in those markets.
Operator: And we have no further questions
at this time.
Dennis Hudson: Great. Well, thank you
all for attending this morning, and we look forward to talking with you in April as we discuss our first quarter results. Thank
you.
Operator: Thank you, ladies and gentlemen.
This concludes today’s conference. Thank you for participating. You may now disconnect.
Exhibit 99.3
March 25, 2015 Acquisition of Grand Bankshares , Inc. For further information, contact: Denny Hudson Chief Executive Officer Phone: 772 - 288 - 6085 Email: denny.hudson@seacoastnational.com William R. Hahl Chief Financial Officer Phone: 772 - 221 - 2825 Email: w.hahl@seacoastnational.com
Acquisition of Grand Bankshares , Inc. 2 Important Information for Investors and Shareholders This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of an y vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior t o r egistration or qualification under the securities laws of such jurisdiction. Seacoast Banking Corporation of Florida ("Seacoast") will file with the Secur iti es and Exchange Commission ("SEC") a registration statement on Form S - 4 containing a proxy statement of Grand Bankshares , Inc. ("Grand") and a prospectus of Seacoast, and Seacoast will file other documents with respect to the proposed merger. A definitive proxy statement/prospectus will be maile d t o shareholders of Grand. Investors and security holders of Grand are urged to read the proxy statement/prospectus and other documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information. Investors and sec uri ty holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus (when available) and other documents f ile d with the SEC by Seacoast through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Seaco ast will be available free of charge on Seacoast's internet website or by contacting Seacoast. Seacoast, Grand, their respective directors and executive officers and other members of management and employees may be consi der ed participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive office rs of Seacoast is set forth in its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on April 8, 2014 and its Curren t R eports on Form 8 - K. Other information regarding the participants in the proxy solicitations and a description of their direct and indirect intere sts , by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when the y b ecome available . Cautionary Notice Regarding Forward - Looking Statements This press release contains "forward - looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is intended to be protected by the safe harbor provided by the same. These statements a re subject to numerous risks and uncertainties. These risks and uncertainties include, but are not limited to, the following: failure to obtain the app roval of shareholders of Grand in connection with the merger; the timing to consummate the proposed merger; the risk that a condition to closing of th e p roposed merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed merger is not obtained or is obta ine d subject to conditions that are not anticipated; the parties' ability to achieve the synergies and value creation contemplated by the proposed merge r; the parties' ability to promptly and effectively integrate the businesses of Seacoast and Grand; the diversion of management time on issues related t o t he merger; the failure to consummate or delay in consummating the merger for other reasons; changes in laws or regulations; and changes in general e con omic conditions. For additional information concerning factors that could cause actual conditions, events or results to materially differ from th ose described in the forward - looking statements, please refer to the factors set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Seacoast's most recent Form 10 - K report and to Seacoast's most recent Form 8 - K reports, which are available online at www.sec.gov. No assurances can be given that any of the events anticipated by the forward - looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Seacoast or Gr and.
3 Transaction Overview Acquisition of Grand Bankshares , Inc. Consideration 1 • Stock and cash • Fixed exchange ratio of 0.3114x • Seacoast to issue 1,090,492 shares to Grand common and Series A preferred shareholders • Aggregate of $1.48 million in cash to Series B preferred shareholders Deal Value 2 • Aggregate consideration of $16.2 million − Common consideration of $4.21 per share or $14.7 million in aggregate − Series B Preferred consideration of $1.48 million Valuation Multiples • Price / 12/31/14 Tangible Book Value: 108% • Core Deposit Premium: 1.2% • Price / LTM Earnings: 15.8x Required Approvals • Grand shareholder approval • Bank regulatory approvals and customary closing conditions Governance • No change to Seacoast executive management team • No additions to Seacoast board of directors Timing • Expected closing in third quarter 2015 (1) Assumes 3,266,481 Grand common shares outstanding and conversion of Grand Series A preferred stock into 235,421 common shares (2) Based on Seacoast 15 day volume weighted average price of $13.52 as of March 24, 2015
4 Strategic Rationale Acquisition of Grand Bankshares , Inc. • Thorough and conservative due diligence limits pro forma risk and downside • Negative loan pre - tax credit mark of approximately $4.5 million gross of Grand’s loan loss reserve of $3.7 million • Other pre - tax purchase accounting marks of positive $2.0 million − Includes benefits from Grand’s TruPS and DTA Strategically Compelling Financially Attractive Conservative Pricing Reflects Thorough Diligence • In - market acquisition more than doubles Seacoast’s presence in the attractive Palm Beach County market • Significant, realistic cost savings driven by market overlap • Low integration risk • Modestly accretive to tangible book value at closing • Approximately 5% accretive to SBCF EPS in 2016 • Balance sheet marks and stock consideration preserve Seacoast’s strong capital position • Pricing based on conservative estimates of Grand future operating performance • Realistic cost savings expectations drive pro forma income accretion
• North Palm Beach is one of Seacoast’s fastest growing markets • Palm Beach County has the second highest per capita income in Florida¹ • Top employers include:² • Palm Beach housing comeback is among the best in the nation³ • Consumer confidence in Florida the highest in the past 7 years⁴ (1) http :// www.sun - sentinel.com/business/personal - finance/fl - broward - palm - personal - income - 20141120 - story.html (2) http :// www.bdb.org/clientuploads/Research/0_2010_data/Topemployers_2009.pdf (3) http :// www.sun - sentinel.com/business/realestate/fl - freddie - mac - mimi - 20141126 - story.html (4) http :// www.bebr.ufl.edu/sites/default/files/csi_2014 - 11 - november.pdf 5 Palm Beach County is a Premier Florida Market Acquisition of Grand Bankshares , Inc.
• Total Assets: $208 million • Loans / Deposits: 69% • TCE / TA: 6.13% • Tier 1 Leverage Ratio: 9.1% • Total Risk Based Capital Ratio: 15.4% • Noncurrent Loans / Loans: 0.86% • NPLs / Loans: 10.6% • Loan Loss Reserves / Loans: 2.9% • LTM ROAA: 0.41% • LTM ROAE: 6.42% • LTM Net Interest Margin: 3.64% • LTM Efficiency Ratio: 101 % 6 Overview of Grand Bankshares , Inc. Acquisition of Grand Bankshares , Inc. Company Highlights Financial Highlights Loan Composition • Founded in 1999 • 3 branch locations in Palm Beach County, FL Deposit Composition 29% 53% 8% 10% Transaction MMDA / Savings Retail CDs Jumbo CDs 3% 16% 2% 65% 12% 2% C&D 1-4 Family Multifamily CRE C&I Consumer Source: SNL Financial
7 Seacoast’s Pro Forma Franchise Acquisition of Grand Bankshares , Inc. Pro Forma County Branch Map Palm Beach County Deposit Market Share Pro Forma Financial Highlights 1 2014 Rank Institution (ST) Branches Deposits ($000) Market Share (%) 1 Wells Fargo & Co. (CA) 66 8,727,124 21.60 2 Bank of America Corp. (NC) 55 6,354,287 15.73 3 JPMorgan Chase & Co. (NY) 54 3,766,893 9.32 4 PNC Financial Services Group (PA) 51 2,579,969 6.39 5 SunTrust Banks Inc. (GA) 37 2,426,806 6.01 6 Toronto-Dominion Bank 24 2,401,103 5.94 7 Citigroup Inc. (NY) 11 1,587,427 3.93 8 BB&T Corp. (NC) 32 1,505,067 3.72 9 BankUnited Inc. (FL) 17 1,383,623 3.42 10 New York Community Bancorp (NY) 12 1,254,974 3.11 11 Banco de Sabadell 5 880,247 2.18 12 TFS Financial Corp (MHC) (OH) 4 699,679 1.73 13 Northern Trust Corp. (IL) 4 633,309 1.57 14 Valley National Bancorp (NJ) 6 514,842 1.27 15 FCB Financial Holdings Inc. (FL) 4 468,533 1.16 16 Regions Financial Corp. (AL) 11 418,037 1.03 17 CenterState Banks (FL) 5 414,475 1.03 18 Fifth Third Bancorp (OH) 4 393,480 0.97 19 IBERIABANK Corp. (LA) 5 303,835 0.75 20 Pro Forma 6 301,506 0.75 20 Stonegate Bank (FL) 2 247,328 0.61 21 HSBC 4 240,934 0.60 22 Paradise Bank (FL) 2 220,089 0.54 23 First Repub Bank (CA) 1 213,908 0.53 24 Palm Beach Community Bank (FL) 6 210,250 0.52 25 EverBank Financial (FL) 1 205,357 0.51 26 Comerica Inc. (TX) 5 191,316 0.47 27 First Citizens BancShares Inc. (NC) 4 190,318 0.47 28 Grand Bankshares Inc. (FL) 3 187,970 0.47 34 Seacoast Banking Corp. of FL (FL) 3 113,536 0.28 Total For Institutions In Market 480 40,406,482 2014 Grand Total Assets:$3.3 billion Total Gross Loans: $2.0 billion Total Deposits: $2.6 billion Total Equity: $327 million Total Tangible Common Equity: $295 million Source: SNL Financial (1) Does not include impact of purchase accounting; financial data as of December 31, 2014
8 Dominant Position as a Florida Based Bank Acquisition of Grand Bankshares , Inc. Source: SNL Financial (1) Includes banks based in Florida and excludes banks headquartered in Miami and Miami Lakes, FL (2) Includes Okeechobee County , Indian River County, St. Lucie County and Martin County Florida Ranking By Deposits 1 Palm Beach County Ranking By Deposits 1 Treasure Coast Ranking By Deposits 1,2 Orlando Ranking By Deposits 1 2014 2014 Rank Institution Branches Deposits ($000) Market Share (%) 1 EverBank Financial 12 13,958,974 3.09 2 FCB Financial Holdings Inc. 53 3,966,466 0.88 3 CenterState Banks 58 3,161,794 0.70 4 Seacoast Banking Corp. of FL (Pro Forma) 50 2,511,330 0.56 5 Stonegate Bank 24 1,834,038 0.41 6 Capital City Bank Group Inc. 53 1,821,832 0.40 7 Capital Bank Finl Corp 36 1,708,823 0.38 8 USAmeriBancorp Inc. 13 1,547,190 0.34 9 Villages Bancorp. Inc. 11 1,393,486 0.31 10 HCBF Holding Co. 38 1,243,933 0.28 Total Florida Institutions 5425451,196,779 2014 2014 Rank Institution Branches Deposits ($000) Market Share (%) 1 FCB Financial Holdings Inc. 4 468,533 1.16 2 CenterState Banks 5 414,475 1.03 3 Seacoast Banking Corp. of FL (Pro Forma) 6 301,506 0.75 4 Stonegate Bank 2 247,328 0.61 5 Paradise Bank 2 220,089 0.54 6 Palm Beach Community Bank 6 210,250 0.52 7 EverBank Financial 1 205,357 0.51 8 Grand Bankshares Inc. 3 187,970 0.47 9 Legacy Bank of Florida 3 168,629 0.42 10 Floridian Community Hldgs Inc. 3 155,815 0.39 Total Palm Beach Institutions 480 40,406,482 2014 2014 Rank Institution Branches Deposits ($000) Market Share (%) 1 Three Shores Bancorp. Inc. 2 426,562 1.95 2 CNLBancshares Inc. 2 306,667 1.40 3 HCBF Holding Co. 5 122,374 0.56 4 CenterState Banks 2 65,192 0.30 5 FBC Bancorp Inc. 1 53,765 0.25 6 Seacoast Banking Corp. of FL 1 52,361 0.24 7 FCB Financial Holdings Inc. 1 49,623 0.23 8 Florida Capital Group Inc. 1 42,454 0.19 9 Floridian Financial Group Inc 1 28,060 0.13 10 First Green Bancorp Inc. 1 27,249 0.12 Total Orlando Institutions 190 21,926,464 2014 2014 Rank Institution Branches Deposits ($000) Market Share (%) 1 Seacoast Banking Corp. of FL 23 1,425,603 12.51 2 CenterState Banks 5 497,100 4.36 3 FCB Financial Holdings Inc. 4 326,279 2.86 4 HCBF Holding Co. 10 290,947 2.55 5 Colonial Banc Corp. 8 144,605 1.27 6 Marine B&TC 2 136,870 1.20 7 Three Shores Bancorp. Inc. 1 15,280 0.13 Total Treasure Coast Institutions 195 11,399,394
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