Seacoast Banking Corporation of Florida (NASDAQ:SBCF) Q2 2024 Earnings Conference Call July 26, 2024 10:00 AM ET
Company Participants
Chuck Shaffer - Chairman & Chief Executive Officer
Tracey Dexter - Chief Financial Officer
Michael Young - Treasurer & Director, Investor Relations
Conference Call Participants
David Feaster - Raymond James
Woody Lay - KBW
Brandon King - Truist Securities
Stephen Scouten - Piper Sandler
Operator
Welcome to Seacoast Banking Corporation's Second Quarter 2024 Earnings Conference Call. My name is Pam, and I will be your operator.
Before we begin, I have been asked to direct your attention to the statement at the end of the company's press release regarding forward-looking statements. Seacoast will be discussing issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act and its comments today are intended to be covered within the meaning of the Act. Please note that this conference is being recorded.
I will now turn the call over to Chuck Shaffer, Chairman and CEO of Seacoast Bank. Mr. Shaffer, you may begin.
Chuck Shaffer
Thank you, Pam, and good morning, everyone. As we go through our presentation, we'll be referring to the second quarter earnings slide deck, which is available at seacoastbanking.com. I'm here today with Tracey Dexter, Chief Financial Officer; Michael Young, Treasurer and Director of Investor Relations; and James Stallings, Chief Credit Officer.
The Seacoast team had a strong quarter with good earnings performance and continued strong customer acquisition. Our investments in talent and marketing paid off with a 60% increase in commercial loan originations from the previous quarter and a record $744 million late-stage pipeline entering Q3.
As we anticipated on our comments last quarter, we saw low single-digit loan growth in the second quarter at 2.4% annualized, and we expect production to increase in Q3, which will boost net interest income and the net interest margin. Tracey will provide more details on this shortly.
We've been focused on increasing non-interest income and have seen improved performance in wealth management fees, service charges on deposits and insurance agency revenue in each of the past four quarters. Our efforts to reduce expenses have also been successful with adjusted non-interest expenses declining sequentially for the past four quarters, approximately $9 million per quarter lower than a year ago.
During the quarter, we worked on lowering our cost of deposits by reducing offer grades, and we saw our cost of deposits begin to stabilize in May. And looking at our asset quality, we continue to maintain strong performance. Charge-offs were slightly higher this quarter at approximately 40 basis points annualized, mainly due to a limited number of loans, each of which were previously reserved for, which decreased the ACL upon charge-off.