424B3 1 tm2116291-5_424b3.htm 424B3 tm2116291-5_424b3 - none - 18.7813787s
  Filed Pursuant to Rule 424(b)(3)
 Registration No. 333-256157
PROXY STATEMENT/PROSPECTUS
MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT
To the Shareholders of Legacy Bank of Florida:
On March 23, 2021, Seacoast Banking Corporation of Florida, or Seacoast, Seacoast National Bank, or SNB, and Legacy Bank of Florida, or Legacy, entered into an Agreement and Plan of Merger, as amended and restated on June 14, 2021, (which we refer to as the “merger agreement”) that provides for the combination of our two banks. Under the merger agreement, Legacy will merge with and into SNB, with SNB as the surviving bank (which we refer to as the “merger”). The acquisition will expand Seacoast’s presence in the attractive Broward and Palm Beach counties and strengthen its position in the state.
In the merger, each share of Legacy common stock (except for specified shares of Legacy common stock held by Legacy, Seacoast or SNB and any dissenting shares), will be converted into the right to receive 0.1703 (which we refer to as the “exchange ratio”) of a share of Seacoast common stock (which we refer to as the “merger consideration” and also in an aggregate consideration amount, which includes the substitute stock options certain Legacy shareholders may receive, as the “aggregate merger consideration”). However, in the event that Legacy’s consolidated tangible shareholders’ equity, as defined in the merger agreement, is less than Legacy’s target consolidated tangible shareholders’ equity (defined in the merger agreement as $58.2 million, less the impact of after-tax permitted expenses including (i) those reasonable expenses incurred in connection with the merger and (ii) the fee payable to Legacy’s financial advisor) and Legacy’s general allowance for loan and lease losses is less than 0.75% of total loans and leases outstanding (excluding loans originated under the Paycheck Protection Program (“PPP”)), then Seacoast shall have the option to adjust the merger consideration downward by an amount that is reflective of the overall shortfall between Legacy’s target consolidated tangible shareholders’ equity and Legacy’s consolidated tangible shareholders’ equity.
Because the exchange ratio is fixed, the market value of the merger consideration will fluctuate with the market price of Seacoast common stock and other factors and will not be known at the time Legacy shareholders vote on the merger agreement. Based on the closing price of Seacoast’s common stock on the NASDAQ Global Select Market on June 16, 2021, the last practicable date before the date of this document, the value of the per share stock consideration payable to holders of Legacy common stock was approximately $6.22. We urge you to obtain current market quotations for Seacoast common stock (trading symbol “SBCF”) because the value of the per share stock consideration will fluctuate.
Based on the current number of shares of Legacy common stock outstanding, Seacoast expects to issue up to approximately 2,686,124 shares of common stock to the Legacy shareholders. Upon completion of the merger, current Legacy shareholders will own approximately 4.63% of the common stock of Seacoast immediately following the merger. However, any increase or decrease in the number of shares of Legacy common stock outstanding that occurs for any reason prior to the completion of the merger will cause the actual number of shares issued upon completion of the merger to change.
At the annual meeting of Legacy shareholders, holders of Legacy common stock will be asked to vote to approve the merger agreement, to elect three class III directors, and related matters as described in this proxy statement/prospectus. Legacy shareholders will also be asked to approve the proposal to adjourn the annual meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger agreement and related matters, as described in this proxy statement/prospectus.
The annual meeting of Legacy shareholders will be held on Wednesday, August 4, 2021 at the Wyndham Hotel Events Center, located at 1901 North Military Trail, Boca Raton, Florida 33431, at 3:00 p.m. local time.
Legacy’s board of directors has unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Legacy and its shareholders, has authorized, adopted and approved the merger agreement, the merger and the transactions contemplated by the merger agreement and recommends that Legacy shareholders vote “FOR” the proposal to approve the merger agreement, “FOR” the election of the director nominees, and “FOR” the proposal to adjourn the Legacy annual meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
This document, which serves as a proxy statement for the annual meeting of Legacy shareholders and as a prospectus for the shares of Seacoast common stock to be issued in the merger to Legacy shareholders, describes the annual meeting of Legacy, the directors to be elected at the annual meeting, the merger, the documents related to the merger and other matters related to the

merger and the annual meeting. Please carefully read this entire proxy statement/prospectus, including “Risk Factors,” beginning on page 17, for a discussion of the risks relating to the proposed merger. You also can obtain information about Seacoast from documents that Seacoast has filed with the Securities and Exchange Commission.
If you have any questions concerning the merger, Legacy shareholders should contact Dennis G. Bedley, 2300 Glades Road, Suite 120/140 West, Boca Raton, Florida 33431 (561) 544-8400.
We look forward to seeing you at the meeting.
Dennis G. Bedley
Chairman & Chief Executive Officer
Legacy Bank of Florida
Neither the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, nor any state securities commission or any other bank regulatory agency has approved or disapproved the merger, the issuance of the Seacoast common stock to be issued in the merger or the other transactions described in this document or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.
The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either Seacoast or Legacy, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
The date of this proxy statement/prospectus is June 18, 2021, and it is first being mailed or otherwise delivered to the shareholders of Legacy on or about June 21, 2021.

 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 4, 2021
To the Shareholders of Legacy Bank of Florida:
Legacy Bank of Florida (“Legacy”) will hold an annual meeting of shareholders on Wednesday, August 4, 2021 at 3:00 p.m. local time, at the Wyndham Hotel Events Center, located at 1901 North Military Trail, Boca Raton, Florida 33431, for the following purposes:

for holders of Legacy common stock to consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of March 23, 2021, as amended and restated on June 14, 2021, by and among Seacoast Banking Corporation of Florida, Seacoast National Bank and Legacy, pursuant to which Legacy will merge with and into Seacoast National Bank, as more fully described in the attached proxy statement/prospectus;

for holders of Legacy common stock to elect three Class III members of Legacy’s board of directors; and

for holders of Legacy common stock to consider and vote upon a proposal to adjourn the Legacy annual meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
We may also consider any other business that properly comes before the annual meeting or any adjournment thereof. We have fixed the close of business on June 11, 2021 as the record date for the Legacy annual meeting. Only holders of record of Legacy common stock at that time are entitled to notice of, and to vote at, the Legacy annual meeting, or any adjournment or postponement of the Legacy annual meeting. In order for the merger agreement to be approved, the affirmative vote of at least two-thirds of the outstanding shares of Legacy common stock must be voted in favor of the proposal to approve the merger agreement. The Class III directors will be elected by a plurality of votes cast, regardless of the number of votes received by any director nominee. The annual meeting may be adjourned from time to time upon approval of holders of Legacy common stock without notice other than by announcement at the meeting of the adjournment thereof, and any and all business for which notices hereby given may be transacted at such adjourned meeting.
Shareholders of Legacy have dissenters’ rights in connection with the proposed merger under federal law, which provides that a dissenting shareholder is entitled to receive the value of his or her shares in cash (which may be more or less than the value of the consideration that such holder would receive in the merger) if the dissenting shareholder complies with all of the requirements set forth in the applicable statute, Section 215a of the United States Code, a copy of which is attached as Appendix C to the proxy statement/prospectus. Under the applicable statute, a shareholder of Legacy may dissent from the merger by (i) either voting against the merger or giving notice in writing to Legacy at or prior to the annual meeting that he or she dissents from the merger and (ii) making a written request to Seacoast to receive the value of such shareholder’s shares of Legacy common stock, which request must be made within thirty (30) days after the effective time of the merger and must be accompanied by the surrender of the shareholder’s stock certificates. For more information, please see “The Merger — Dissenters’ Rights for Legacy Shareholders” beginning on page 48.
Your vote is very important.   We cannot complete the merger unless Legacy’s shareholders approve the merger agreement.
Regardless of whether you plan to attend the Legacy annual meeting, please vote as soon as possible. If you hold stock in your name as a shareholder of record, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid return envelope as described on the proxy card. If you hold your stock in “street name” through a bank or broker, please follow the instructions on the voting instruction card furnished by the record holder.
 

 
The enclosed proxy statement/prospectus provides a detailed description of the annual meeting, the directors to be elected at the annual meeting, the merger, the documents related to the merger, including the merger agreement, and other related matters. We urge you to read the proxy statement/prospectus, including any documents incorporated in the proxy statement/prospectus by reference, and its appendices carefully and in their entirety. If you have any questions concerning the merger or the proxy statement/prospectus, would like additional copies of the proxy statement/prospectus or need help voting your shares of Legacy common stock, please contact Dennis G. Bedley, 2300 Glades Road, Suite 120/140 West, Boca Raton, Florida 33431 at (561) 544-8400.
Legacy’s board of directors has determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Legacy and its shareholders, has authorized, adopted and approved the merger agreement, the merger and the transactions contemplated by the merger agreement and recommends that Legacy shareholders vote “FOR” the proposal to approve the merger agreement, “FOR” the election of the Class III director nominees, and “FOR” the proposal to adjourn the Legacy annual meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement.
By Order of the Board of Directors,
Dennis G. Bedley
Chairman & Chief Executive Officer
Boca Raton, Florida
June 18, 2021
 

 
WHERE YOU CAN FIND MORE INFORMATION
Seacoast Banking Corporation of Florida
Seacoast files annual, quarterly, current and special reports, proxy statements and other business and financial information with the Securities and Exchange Commission (the “SEC”). You can obtain any of the documents filed with or furnished to the SEC by Seacoast at no cost from the SEC’s website located at http://www.sec.gov. You will also be able to obtain these documents, free of charge, from Seacoast by accessing Seacoast’s website at www.seacoastbanking.com. Copies can also be obtained, free of charge, by directing a written request to:
Seacoast Banking Corporation of Florida
815 Colorado Avenue
P.O. Box 9012
Stuart, Florida 34994
Attn: Investor Relations
Telephone: (772) 288-6085
Seacoast has filed a Registration Statement on Form S-4 to register with the SEC up to 2,937,602 shares of Seacoast common stock to be issued pursuant to the merger. This proxy statement/prospectus is a part of that Registration Statement on Form S-4. As permitted by SEC rules, this proxy statement/prospectus does not contain all of the information included in the Registration Statement on Form S-4 or in the exhibits or schedules to the Registration Statement on Form S-4. The Registration Statement on Form S-4, including any amendments, schedules and exhibits, is also available, free of charge, by accessing the websites of the SEC and Seacoast or upon written request to Seacoast at the address set forth above.
Statements contained in this proxy statement/prospectus as to the contents of any contract or other documents referred to in this proxy statement/prospectus are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the Registration Statement on Form S-4. This proxy statement/prospectus incorporates important business and financial information about Seacoast that is not included in or delivered with this document, including incorporating by reference documents that Seacoast has previously filed with the SEC. These documents contain important information about Seacoast and its financial condition. See “Documents Incorporated by Reference” beginning on page 84. These documents are available free of charge upon written request to Seacoast at the address listed above.
To obtain timely delivery of these documents, you must request them no later than July 28, 2021 in order to receive them before the Legacy annual meeting of shareholders.
Except where the context otherwise specifically indicates, Seacoast supplied all information contained in, or incorporated by reference into, this proxy statement/prospectus relating to Seacoast, and Legacy supplied all information contained in this proxy statement/prospectus relating to Legacy.
Legacy
Legacy does not have a class of securities registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”), is not subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, and accordingly does not file documents and reports with the SEC.
If you have any questions concerning the merger or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus or need help voting your shares of Legacy common stock, please contact Legacy at:
Legacy Bank of Florida
2300 Glades Road, Suite 120/140 West
Boca Raton, Florida 33431
Attention: Dennis G. Bedley, Chairman & Chief Executive Officer
Telephone: (561) 544-8400
 
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You should rely only on the information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to give any information or make any representation about the merger or Seacoast or Legacy that differs from, or adds to, the information in this proxy statement/prospectus or in documents that are incorporated by reference herein and publicly filed with the SEC. Therefore, if anyone does give you different or additional information, you should not rely on it. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than the date of this proxy statement/prospectus, and you should not assume that any information incorporated by reference into this document is accurate as of any date other than the date of such other document, and neither the mailing of this proxy statement/prospectus to Legacy shareholders nor the issuance of Seacoast common stock in the merger shall create any implication to the contrary.
This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this proxy statement/prospectus, or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer, solicitation of an offer or proxy solicitation in such jurisdiction.
 
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TABLE OF CONTENTS
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APPENDICES:
A-1
B-1
C-1
We have not authorized any person to give any information or make any representation about the merger of Seacoast Banking Corporation of Florida or Legacy Bank of Florida that differs from, or adds to, the information in this proxy statement/prospectus or in documents that are publicly filed with the SEC. Therefore, if anyone does give you different or additional information, you should not rely on it.
 
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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE ANNUAL MEETING
The following are answers to certain questions that you may have regarding the annual meeting and merger. The parties urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to, and the documents incorporated by reference in, this document. In this proxy statement/prospectus we refer to Seacoast Banking Corporation of Florida as “Seacoast,” Seacoast National Bank as “SNB” and Legacy Bank of Florida as “Legacy,” “we,” “us,” and “our.”
Q:
Why am I receiving this proxy statement/prospectus?
A:
Our board of directors is soliciting proxies to be voted at the Legacy annual meeting. This proxy statement/prospectus summarizes the information that you need to know to vote by proxy or in person at the annual meeting.
Seacoast, SNB and Legacy have entered into an Agreement and Plan of Merger, dated as of March 23, 2021, as amended and restated on June 14, 2021, (which we refer to as the “merger agreement”), pursuant to which Legacy will merge with and into Seacoast’s wholly owned bank subsidiary, SNB, with SNB continuing as the surviving bank and using the name “Seacoast National Bank” ​(the “merger”). A copy of the merger agreement is included in this proxy statement/prospectus as Appendix A.
The merger cannot be completed unless, among other things, the holders of at least two-thirds of the outstanding shares of Legacy common stock vote in favor of the proposal to approve the merger agreement.
Shareholders of Legacy are also being asked to elect three Class III directors to the Legacy board of directors for a three-year term. Legacy has nominated the following persons to serve as Class III directors: Dennis G. Bedley, Leo B. Berman, and Thomas M. McDonald.
In addition, Legacy is soliciting proxies from holders of Legacy common stock with respect to a proposal to adjourn the Legacy annual meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement if there are insufficient votes at the time of such adjournment to approve such proposal.
This proxy statement/prospectus contains important information about the merger, the Class III director nominees, and the other proposals being voted on at the annual meeting, and you should read it carefully. It is a proxy statement because Legacy’s board of directors is soliciting proxies from its shareholders. It is a prospectus because Seacoast will issue shares of Seacoast common stock to holders of Legacy common stock in connection with the merger. The enclosed materials allow you to have your shares voted by proxy without attending the Legacy meeting. Your vote is important. We encourage you to submit your proxy as soon as possible.
Q:
Why do Seacoast and Legacy want to merge?
A:
We believe the combination of Seacoast and Legacy will create one of the leading community banking franchises in the Broward/Palm Beach market, providing our customers with additional branch locations and our shareholders with improved market share. The Legacy board of directors has unanimously determined that the merger is advisable, fair to and in the best interests of Legacy and its shareholders and recommends that the Legacy shareholders vote “FOR” approval of the merger agreement. For more information about the reasons for the merger, see “The Merger — Seacoast’s Reasons for the Merger” and “The Merger — Legacy’s Reasons for the Merger and The Recommendation of the Legacy Board of Directors.”
Q:
What will I receive in the merger?
A:
If the merger is completed, for each share of Legacy common stock that you hold (other than dissenters’ shares) immediately prior to the effective time of the merger, you will receive 0.1703, which we refer to as the exchange ratio, of a share of Seacoast common stock (which we refer to as the “merger consideration,” and also referred to in an aggregate consideration amount, which includes the substitute stock options certain Legacy shareholders may receive, as the “aggregate merger consideration”). If Legacy’s
 
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consolidated tangible shareholders’ equity, as defined in the merger agreement, is less than $58.2 million (less the after-tax impact of permitted expenses) and Legacy’s general allowance for loan and lease losses is less than 0.75% of total loans and leases outstanding (excluding loans originated under the Paycheck Protection Program (“PPP”)), Seacoast shall have the option to adjust the merger consideration downward by an amount that is reflective of the overall shortfall between $58.2 million (less the after-tax impact of permitted expenses) and Legacy’s consolidated tangible shareholders’ equity.
Seacoast will not issue any fractional shares of Seacoast common stock in the merger. Rather, Legacy shareholders who would otherwise be entitled to a fractional share of Seacoast common stock upon the completion of the merger will instead receive cash (without interest and rounded to the nearest whole cent) in an amount equal to such fractional part of a share of Seacoast common stock, rounded to the nearest one hundredth of a share, multiplied by the average of the daily volume weighted average price of Seacoast common stock on the NASDAQ Global Select Market for the twenty trading days ending on the trading day immediately prior to the determination date, which is defined as the later of the date on which the last required regulatory consent is obtained without regard to any requisite waiting period or the date on which the Legacy shareholder approval is obtained.
Q:
Will the value of the merger consideration change between the date of this proxy statement/prospectus and the time the merger is completed?
A:
Yes, the value of the merger consideration will fluctuate between the date of this proxy statement/prospectus and the completion of the merger based upon the market value of Seacoast common stock and certain other adjustments. Any fluctuation in the market price of Seacoast common stock after the date of this proxy statement/prospectus will change the value of the shares of Seacoast common stock that Legacy shareholders will receive.
Q:
How will the merger impact Legacy equity awards?
A:
Prior to the effective time of the merger, Legacy will take all actions necessary to accelerate the vesting of any outstanding Legacy options such that all unvested Legacy options shall be deemed vested immediately prior to the effective time of the merger. Legacy is also required to use commercially reasonable efforts to (a) amend the Legacy options to permit them to be exercised following a separation from service in accordance with the Legacy Bank of Florida Equity Incentive Plan, as amended, and (b) amend the Legacy options to allow for exercise of each option by payment of the exercise price through (i) delivery of cash or cash equivalents, (ii) delivery of previously-acquired shares of Legacy common stock, (iii) withholding of shares of Legacy common stock from the option based on the value of such shares on the date the option is exercised, (iv) broker-assisted market sales, or (v) any other “cashless exercise” arrangement.
Legacy has also agreed to take all actions necessary to cause each Legacy equity award issued and outstanding immediately prior to the effective time to be terminated at the effective time of the merger. In consideration of such termination, Seacoast will grant to each holder of Legacy options, as of the effective time, an option to purchase shares of Seacoast common stock pursuant to Seacoast’s Incentive Plan (which we refer to as the “substitute option”), on the same terms and conditions as applicable to each such Legacy option as in effect immediately prior to the effective time, except that (A) the number of shares of Seacoast common stock subject to such substitute option shall equal the product of (x) the number of shares of Legacy common stock subject to such Legacy option immediately prior to the effective Time, multiplied by (y) the exchange ratio, rounded down to the nearest whole share, and (B) the per share exercise price for the shares of Seacoast common stock issuable upon exercise of such substitute option shall equal the quotient determined by dividing (x) the exercise price per share of Legacy common stock at which such Legacy option was exercisable immediately prior to the effective time by (y) the exchange ratio, rounded up to the nearest whole cent. Each outstanding share of Seacoast common stock will remain outstanding and be unaffected by the merger. Legacy had a total of 2,128,754 stock options outstanding at March 23, 2021, of which 1,476,674 were vested and 652,080 were not vested.
 
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Q:
How does Legacy’s board of directors recommend that I vote at the annual meeting?
A:
Legacy’s board of directors recommends that you vote “FOR” the proposal to approve the merger agreement, “FOR” the election of the three Class III director nominees, and “FOR” the adjournment proposal.
Q:
When and where is the annual meeting?
A:
The Legacy annual meeting will be held at the Wyndham Hotel Events Center, located at 1901 North Military Trail, Boca Raton, Florida, on Wednesday, August 4, 2021 at 3:00 p.m. local time.
Q:
Who can vote at the annual meeting of shareholders?
A:
Holders of record of Legacy common stock at the close of business on June 11, 2021, which is the date that the Legacy board of directors has fixed as the record date for the annual meeting, are entitled to vote at the annual meeting.
Q:
What will happen to Legacy following the merger?
A:
Immediately following the effective time of the merger, Legacy will merge with and into SNB, with SNB being the surviving bank. Following the effective time of the merger, the separate corporate existence of Legacy will cease.
Q:
What do I need to do now?
A:
After you have carefully read this proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly so that your shares are represented and voted at the annual meeting. You must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. If you hold your shares in your name as a shareholder of record, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. If you hold your shares in “street name” through a bank, broker or other nominee, you must direct your bank, broker or other nominee how to vote in accordance with the instructions you have received from your bank, broker or other nominee. “Street name” shareholders who wish to vote in person at the annual meeting will need to obtain a proxy form from the institution that holds their shares.
Q:
What constitutes a quorum for the annual meeting?
A:
The presence at the annual meeting, in person or by proxy, of holders of a majority of the outstanding shares of Legacy common stock will constitute a quorum for the transaction of business. Abstentions, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.
Q:
What is the vote required to approve each proposal?
A:
Approval of the merger agreement requires the affirmative vote of at least two-thirds of the outstanding shares of Legacy common stock entitled to vote on the merger agreement as of the close of business on June 11, 2021, the record date for the annual meeting. If you (1) fail to submit a proxy or vote in person at the annual meeting, (2) mark “ABSTAIN” on your proxy, or (3) fail to instruct your bank, broker, or other nominee how to vote with respect to the proposal to approve the merger agreement, it will have the same effect as a vote “AGAINST” the merger agreement proposal and no effect on the election of directors or the adjournment proposal. Three Class III directors will be elected by a plurality of the votes cast for the election of the Class III directors, meaning that the nominees who receive the most affirmative votes, regardless of the actual number of votes for the director nominee, will be elected to serve as Class III directors on the Legacy board of directors. The adjournment proposal will be approved if the votes of Legacy common stock cast in favor of the adjournment proposal exceed the votes cast against the adjournment proposal.
Q:
Why is my vote important?
A:
If you do not submit a proxy or vote in person, it may be more difficult for Legacy to obtain the necessary quorum to hold its annual meeting. In addition, your failure to submit a proxy or vote in person, or
 
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abstention will have the same effect as a vote against approval of the merger agreement. The merger agreement must be approved by the affirmative vote of the holders of at least two-thirds of the outstanding shares of Legacy common stock entitled to vote on the merger agreement. Legacy’s board of directors recommends that you vote “FOR” the proposal to approve the merger agreement, “FOR” the election of the three Class III director nominees, and “FOR” the adjournment proposal.
Q:
How many votes do I have?
A:
You are entitled to one vote for each share of Legacy common stock that you owned as of the close of business on the record date. As of the close of business on the record date, 15,777,904 shares of Legacy common stock were outstanding and entitled to vote at the Legacy annual meeting.
Q:
Do Legacy directors and executive officers have interests in the merger that are different from, or in addition to, my interests?
A:
Yes. In considering the recommendation of Legacy’s board of directors with respect to the merger agreement, you should be aware that some of Legacy’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of Legacy’s shareholders generally. Interests of certain officers and directors that may be different from or in addition to the interests of Legacy’s shareholders include, but are not limited to, the receipt of continued indemnification and insurance coverage under the merger agreement, the receipt of Seacoast substitute stock options in exchange for Legacy option awards, acceleration of vesting of benefit awards, the payment of change in control payments to certain executives, and employment agreements between certain executives of Legacy and SNB.
Q:
If my shares are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote my shares for me?
A:
No. Your bank, broker, or other nominee cannot vote your shares without instructions from you. You should instruct your bank, broker, or other nominee how to vote your shares in accordance with the instructions provided to you. Please check the voting form used by your bank, broker, or other nominee.
Q:
Can I attend the annual meeting and vote my shares in person?
A:
Yes. All Legacy shareholders, including shareholders of record and shareholders who hold their shares through nominees or any other holder of record, are invited to attend the annual meeting. Holders of record of Legacy common stock can vote in person at the annual meeting. If you are not a shareholder of record, you must obtain a proxy, executed in your favor, from the record holder of your shares to be able to vote in person at the annual meeting. If you plan to attend the annual meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. Legacy reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the annual meeting is prohibited without Legacy’s express written consent.
Q:
Can I change my vote?
A:
Yes. If you are a holder of record of Legacy common stock, you may revoke any proxy at any time before it is voted by (1) signing and returning a proxy card with a later date, (2) delivering a written revocation letter to Legacy’s corporate secretary or (3) attending the annual meeting in person, notifying the corporate secretary and voting by ballot at the annual meeting. Attendance at the annual meeting will not automatically revoke your proxy. A revocation or later-dated proxy received by Legacy after the vote will not affect the vote. Legacy’s corporate secretary’s mailing address is: Legacy Bank of Florida, 2300 Glades Road, Suite 120/140 West, Boca Raton, Florida 33431.
 
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Q:
What are the U.S. federal income tax consequences of the merger to holders of Legacy common stock?
A:
The merger is expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” Assuming the merger so qualifies, holders of Legacy common stock, except Legacy shareholders who exercise their dissenters’ rights, are not expected to recognize any gain or loss for U.S. federal income tax purposes on the shares of Seacoast common stock that they receive in the merger. However, Legacy shareholders may recognize gain or loss in connection with cash received in lieu of any fractional shares of Seacoast common stock they would otherwise be entitled to receive.
For further information, see “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”
The U.S. federal income tax consequences described above may not apply to all holders of Legacy stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your own tax advisor to determine the particular tax consequences of the merger to you.
Q:
Are Legacy shareholders entitled to dissenters’ rights?
A:
Yes. Shareholders of Legacy have dissenters’ rights in connection with the proposed merger under federal law,which provides that a dissenting shareholder is entitled to receive the value of his or her shares in cash (which may be more or less than the value of the consideration that such holder would receive in themerger) if the dissenting shareholder complies with all of the requirements set forth in the applicablestatute, Section 215a of the United States Code, a copy of which is attached as Appendix C to the proxystatement/prospectus. Under the applicable statute, a shareholder of Legacy may dissent from the mergerby (i) either voting against the merger or giving notice in writing to Legacy at or prior to the annualmeeting that he or she dissents from the merger and (ii) making a written request to Seacoast to receivethe value of such shareholder’s shares of Legacy common stock, which request must be made withinthirty (30) days after the effective time of the merger and must be accompanied by the surrender of theshareholder’s stock certificates. A summary of these procedures can be found under “The Merger — Dissenters Rights for Legacy Shareholders” beginning on page 48 and detailed information about the annual meeting can be found under “Information About the Annual Meeting” on page 27. Due to the complexity of the procedures for exercising dissenters’ rights, Legacy shareholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with the applicable law provisions will result in the loss of dissenters’ rights.
Q:
What should I do if I hold my shares of Legacy stock in book-entry form?
A:
You are not required to take any specific actions if your shares of Legacy stock are held in book-entry form. After the completion of the merger, shares of Legacy stock held in book-entry form automatically will be exchanged for the merger consideration, including shares of Seacoast common stock in book-entry form and any cash to be paid in exchange for fractional shares in the merger, as applicable.
Q:
If I am a Legacy shareholder, should I send in my stock certificates now?
A:
No. Please do not send in your Legacy stock certificates with your proxy. Seacoast’s transfer agent, Continental Stock Transfer and Trust Company, will send you instructions for exchanging Legacy stock certificates for the merger consideration. See “The Merger Agreement — Procedures for Converting Shares of Legacy Common Stock into Merger Consideration” beginning on page 9 of this proxy statement/prospectus.
Q:
Whom may I contact if I cannot locate my Legacy stock certificate(s)?
A:
If you are unable to locate your original Legacy stock certificate(s), you should contact Dennis G. Bedley, 2300 Glades Road, Suite 120/140 West, Boca Raton, Florida, (561) 544-8400. Following the merger, any inquiries should be directed to Seacoast’s transfer agent, Continental Stock Transfer and Trust Company at 1 State Street, 30th Floor, New York, New York 10004, or at (212) 509-4000.
Q:
When do you expect to complete the merger?
A:
Seacoast and Legacy expect to complete the merger in the third quarter of 2021. However, neither
 
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Seacoast nor Legacy can assure you when or if the merger will occur. Legacy must first obtain the approval of Legacy shareholders for the merger and Seacoast must receive the necessary regulatory approvals. The OCC approved the merger on June 10, 2021.
Q:
What happens if I sell or transfer ownership of shares of Legacy common stock after the record date for the Legacy annual meeting?
A:
The record date for the Legacy annual meeting is earlier than the expected date of completion of the merger. Therefore, if you sell or transfer ownership of your shares of Legacy common stock after the record date for the Legacy annual meeting, but prior to completion of the merger, you will retain the right to vote at the Legacy annual meeting, but the right to receive the merger consideration will transfer with the shares of Legacy common stock.
Q:
What happens if the merger is not completed?
A:
If the merger is not completed, holders of Legacy common stock will not receive any consideration for their shares of Legacy common stock that otherwise would have been received in connection with the merger. Instead, Legacy will remain an independent bank. Under certain circumstances, if the merger is not completed due to a termination of the merger agreement, Legacy will be required to pay a termination fee to Seacoast. For more information about Legacy’s obligation to pay a termination fee see “The Merger Agreement — Termination Fee” beginning on page 67.
Q:
Whom should I call with questions?
A:
If you have any questions concerning the merger or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus or need help voting your shares of Legacy common stock, please contact: Dennis G. Bedley, 2300 Glades Road, Suite 120/140 West, Boca Raton, Florida, (561) 544-8400.
 
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SUMMARY
The following summary highlights selected information from this proxy statement/prospectus. It does not contain all of the information that is important to you. Each item in this summary refers to the page where that subject is discussed in more detail. You should carefully read the entire proxy statement/prospectus and the other documents to which we refer to understand the merger fully. See “Where You Can Find More Information” on how to obtain copies of those documents. In addition, the merger agreement is attached as Appendix A to this proxy statement/prospectus. Legacy and Seacoast encourage you to read the merger agreement because it is the legal document that governs the merger.
The parties refer to the proposed merger of Legacy with and into SNB as the “merger” and the Agreement and Plan of Merger, dated March 23, 2021, as amended and restated on June 14, 2021, by and among Seacoast, SNB and Legacy as the “merger agreement.”
Information Regarding Seacoast, SNB and Legacy
Seacoast Banking Corporation of Florida
Seacoast National Bank
815 Colorado Avenue
Stuart, Florida 34994
(772) 288-6085
Seacoast is a bank holding company, incorporated in Florida in 1983, and registered under the Bank Holding Company Act of 1956, as amended, or the BHC Act. Seacoast’s principal subsidiary is SNB, a national banking association. SNB commenced its operations in 1933 and operated as “First National Bank & Trust Company of the Treasure Coast” prior to 2006 when it changed its name to Seacoast National Bank.
Seacoast and its subsidiaries provide integrated financial services, including commercial and retail banking, wealth management and mortgage services to customers through advanced banking solutions and 48 traditional branches of its locally-branded, wholly-owned subsidiary, SNB. Offices stretch from Ft. Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties.
Seacoast is one of the largest community banks headquartered in Florida with approximately $8.8 billion in assets and $7.4 billion in deposits as of March 31, 2021.
Legacy Bank of Florida
2300 Glades Road, Suite 120/140 West
Boca Raton, Florida 33431
Telephone: (561) 544-8400
Legacy is a Florida-chartered state bank headquartered in Boca Raton, Florida. Legacy commenced operations in 2006. Legacy is a full service commercial bank, providing financial services to customers primarily located in the market areas of Boca Raton, Fort Lauderdale, Delray Beach, and West Palm Beach, Florida. Legacy specializes in business and professional banking, including commercial credit and deposit products, and a full line of retail and corporate cash management products. As of March 31, 2021, Legacy had total assets of approximately $595 million, gross loans of approximately $491 million, total deposits of approximately $501 million, and total shareholders’ equity of approximately $58.2 million.
Regulatory Approvals
Completion of the merger is subject to various regulatory approvals, including approvals from the Office of the Comptroller of the Currency, or OCC. Notifications and/or applications requesting approvals for the merger may also be submitted to other federal and state regulatory authorities and self-regulatory organizations. The parties have filed notices and applications to obtain the necessary regulatory approvals of the OCC, and the OCC approved the merger on June 10, 2021. The regulatory approvals to which the completion of the merger are subject are described in more detail under the section entitled “The Merger — Regulatory Approvals,” beginning on page 48 of this proxy statement/prospectus.
 
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The Merger (see page 31)
The terms and conditions of the merger are contained in the merger agreement, a copy of which is included as Appendix A to this proxy statement/prospectus and is incorporated by reference herein. You should read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.
In the merger, Legacy will merge with and into SNB, with SNB as the surviving bank of such merger.
Closing and Effective Time of the Merger (see page 55)
The closing date is currently expected to occur in the third quarter of 2021. Simultaneously with the closing of the merger, Seacoast will file the articles of merger with the Florida Department of State. The merger will become effective on a mutually agreeable date following the date on which the satisfaction or waiver of the closing conditions have occurred. Neither Seacoast nor Legacy can predict, however, the actual date on which the merger will be completed because it is subject to factors beyond each company’s control, including whether or when the required regulatory approvals and Legacy’s shareholder approvals will be received. The OCC, however, approved the merger on June 10, 2021.
Merger Consideration (see page 55)
Under the terms of the merger agreement, each share of Legacy common stock outstanding immediately prior to the effective time of the merger (excluding certain shares held by Seacoast, Legacy, SNB and their wholly-owned subsidiaries and dissenting shares described below) will be converted into the right to receive 0.1703, which we refer to as the exchange ratio, of a share of Seacoast common stock (which we refer to as the “merger consideration,” and also referred to in an aggregate consideration amount, which includes the substitute stock options certain Legacy shareholders may receive, as the “aggregate merger consideration”). Please see “The Merger Agreement — Consideration” for more information. If Legacy’s consolidated tangible shareholders’ equity, as defined in the merger agreement, is less than $58.2 million (less the after-tax impact of permitted expenses) and Legacy’s general allowance for loan and lease losses is less than 0.75% of total loans and leases outstanding (excluding loans originated under PPP), Seacoast shall have the option to adjust the merger consideration downward by an amount that is reflective of the overall shortfall between $58.2 million (less the after-tax impact of permitted expenses) and Legacy’s consolidated tangible shareholders’ equity.
For each fractional share that would otherwise be issued, Seacoast will pay cash (without interest and rounded to the nearest whole cent) in an amount equal to such fractional part of a share of Seacoast common stock, rounded to the nearest one hundredth of a share, multiplied by the average of the daily volume weighted average price of Seacoast common stock on the NASDAQ Global Select Market for the twenty (20) trading days ending on the trading day immediately prior to the determination date, which is defined as the later of the date on which the last required regulatory consent is obtained without regard to any requisite waiting period or the date on which the Legacy shareholder approval is obtained. No holder will be entitled to dividends, voting rights or any other rights as a shareholder in respect of any fractional share.
The value of the shares of Seacoast common stock to be issued in the merger will fluctuate between now and the closing date of the merger. Based on the closing price of Seacoast common stock on March 22, 2021, the last trading day before the signing of the merger agreement, the value of the merger consideration payable to holders of Legacy common stock was approximately $106.5 million, or $6.29 per share of common stock (which includes Legacy stock options). Based on the closing price of Seacoast common stock on June 16, 2021, the last practicable date before the date of this document, the value of the merger consideration payable to holders of Legacy common stock was approximately $111.2 million. Legacy shareholders should obtain current sale prices for Seacoast common stock, which is traded on the NASDAQ Global Select Market under the symbol “SBCF.”
Equivalent Legacy Common Stock Per Share Value
Seacoast common stock trades on the NASDAQ Global Select Market under the symbol “SBCF.” Legacy common stock is not listed or traded on any established securities exchange or quotation system. Accordingly, there is no established public trading market for Legacy common stock. The following table presents the closing price of Seacoast common stock on March 22, 2021, the last trading date prior to the public
 
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announcement of the merger agreement, and June 16, 2021, the last practicable trading day prior to the printing of this proxy statement/prospectus. The table also presents the equivalent value of the merger consideration per share of Legacy common stock on those dates, calculated by multiplying the closing sales price of Seacoast common stock on those dates by the exchange ratio of 0.1703.
Date
Seacoast
closing
sale price
Equivalent
Legacy
per share value
March 22, 2021
$ 36.93 $ 6.29
June 16, 2021
$ 36.52 $ 6.22
The value of the shares of Seacoast common stock to be issued in the merger will fluctuate between now and the closing date of the merger. If Seacoast shares increase in value, so will the value of the merger consideration to be received by Legacy shareholders. Similarly, if Seacoast shares decline in value, so will the value of the merger consideration to be received by Legacy shareholders. Legacy shareholders should obtain current sale prices for Seacoast common stock.
Procedures for Converting Shares of Legacy Common Stock into Merger Consideration (see page 57)
No later than five business days after the effective time of the merger, Seacoast’s exchange agent, Continental Stock Transfer and Trust Company, will mail to each holder of record of Legacy common stock that is converted into the right to receive the merger consideration a letter of transmittal and instructions for the surrender of the holder’s Legacy stock certificate(s) for the merger consideration (including cash in lieu of any fractional Seacoast shares), and any dividends or distributions to which such holder is entitled to pursuant to the merger agreement.
Please do not send in your certificates until you receive these instructions.
Material U.S. Federal Income Tax Consequences of the Merger (see page 45)
The merger is expected to qualify as a reorganization within the meaning of Section 368(a) of the Code and the merger agreement will constitute a “plan of reorganization” as such term is used in Sections 354 and 361 of the Code. Assuming the merger so qualifies, holders of Legacy common stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the shares of Seacoast common stock they receive in the merger. However, Legacy shareholders may recognize gain or loss in connection with cash received in lieu of any fractional shares of Seacoast common stock they would otherwise be entitled to receive.
It is a condition to each of Seacoast’s and Legacy’s obligation to complete the merger that it receives a tax opinion from its respective legal counsel, dated the closing date of the merger, that the merger will be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. These opinions, however, will not bind the Internal Revenue Service or the courts, which could take a contrary view. For further information, see “The Merger — Material U.S. Federal Income Tax Consequences of the Merger — Tax Consequences of the Merger Generally.”
The U.S. federal income tax consequences described above may not apply to all holders of Legacy stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your own tax advisor to determine the particular tax consequences of the merger to you.
Dissenters’ Rights (see page 48 and Appendix C)
A Legacy shareholder who wishes to exercise dissenters’ rights of appraisal with respect to the merger must (i) either give written notice to Legacy prior to the annual meeting that he or she dissents from the plan of merger or vote against the merger proposal at the annual meeting and (ii) deliver to Seacoast a written request for an appraisal of his or her shares, along with any certificates representing such shares, within 30 days after the consummation of the merger. Failure to adhere strictly to the requirements and procedures of the applicable dissenters’ rights provisions will result in the loss, termination or waiver of your right to dissent. The value of your shares determined for this purpose maybe more or less than the per-share consideration to be paid in the merger.
 
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If you sign and send in your proxy card and do not indicate how you want to vote on the mergerproposal, your proxy will be voted FOR the merger proposal and you will effectively waive yourappraisal rights. Therefore, a Legacy shareholder who submits a proxy and who also wishes to exerciseappraisal rights must either (i) submit a proxy containing instructions to vote against the merger proposalor (ii) abstain from voting on the merger proposal and submit a written notice to Legacy prior to theannual meeting of his or her intent to dissent from the merger.
Appendix C includes the relevant statutory provisions regarding these rights. See “Dissenters’ Rights” beginning on page 48 for additional information on how to assert dissenters’ rights. In view ofthe complexity of the procedures specified under applicable law, shareholders who wish to pursuedissenters’ appraisal rights should promptly consult their legal, financial and tax advisors.
Opinion of Legacy’s Financial Advisor (see page 35 and Appendix B)
In connection with the merger, Legacy’s financial advisor, Hovde Group (“Hovde”), delivered a written opinion, dated March 22, 2021, to the Legacy board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of Legacy common stock of the exchange ratio in the proposed merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Hovde in preparing the opinion, is attached as Appendix B to this document. The opinion was for the information of, and was directed to, the Legacy board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion does not address the underlying business decision of Legacy to engage in the merger or enter into the merger agreement or constitute a recommendation to the Legacy board of directors in connection with the merger, and it does not constitute a recommendation to any holder of Legacy common stock or any shareholder of any other entity as to how to vote or act in connection with the merger or any other matter.
For further information, please see the section entitled “The Merger — Opinion of Legacy’s Financial Advisor” beginning on page 35.
Recommendation of the Legacy Board of Directors (see page 32)
After careful consideration, the Legacy board of directors recommends that Legacy shareholders vote “FOR” the approval of the merger agreement and the approval of the adjournment proposal described in this document. Each of the directors of Legacy, who as of the date of the merger agreement held shares of Legacy common stock, certain executive officers of Legacy and certain beneficial holders of 5% or more of Legacy’s outstanding shares of common stock have entered into a shareholder support agreement with Seacoast pursuant to which each has agreed to vote “FOR” the approval of the merger agreement and the transactions contemplated thereby, subject to the terms of the shareholder support agreement.
For more information regarding the shareholder support agreements, please see the section entitled “Information About the Legacy Annual Meeting — Shares Subject to Shareholder Support Agreement; Shares Held by Directors and Executive Officers.”
For a more complete description of Legacy’s reasons for the merger and the recommendations of the Legacy board of directors, please see the section entitled “The Merger — Legacy’s Reasons for the Merger and Recommendation of Legacy’s Board of Directors” beginning on page 32.
Interests of Legacy Directors and Executive Officers in the Merger (see page 49)
In considering the recommendation of Legacy’s board of directors with respect to the merger agreement, you should be aware that some of Legacy’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of Legacy’s shareholders generally, including:

Legacy’s directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.

The merger agreement provides for the issuance of substitute Seacoast options in exchange for Legacy options.

Certain Legacy executives are entitled to certain payments upon a change of control of Legacy.
 
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Certain Legacy executives have entered into employment agreements with Seacoast that become effective as of the effective date of the merger.
These interests are discussed in more detail in the section entitled “The Merger — Interests of Legacy Directors and Executive Officers in the Merger” beginning on page 49. The Legacy board of directors was aware of the different or additional interests set forth herein and considered such interests along with other matters in adopting and approving the merger agreement and the transactions contemplated thereby, including the merger.
Treatment of Legacy Equity Awards (see page 49)
The merger agreement requires Legacy to take all actions necessary to accelerate the vesting of any outstanding Legacy options such that all unvested Legacy options shall be deemed vested immediately prior to the effective time of the merger. As of the record date, there were 2,095,644 Legacy options outstanding. Legacy is also required to use commercially reasonable efforts to (a) amend the Legacy options to permit them to be exercised following a separation from service in accordance with the Legacy Bank of Florida Equity Incentive Plan, as amended, and (b) amend the Legacy options to allow for exercise of each option by payment of the exercise price through (i) delivery of cash or cash equivalents, (ii) delivery of previously-acquired shares of Legacy common stock, (iii) withholding of shares of Legacy common stock from the option based on the value of such shares on the date the option is exercised, (iv) broker-assisted market sales, or (v) any other “cashless exercise” arrangement.
The merger agreement further requires Legacy to take all actions necessary to cause each Legacy equity award issued and outstanding immediately prior to the effective time to be terminated at the effective time of the merger. In consideration of such termination, Seacoast will grant to each holder of Legacy options, as of the effective time, an option to purchase shares of Seacoast common stock pursuant to Seacoast’s Incentive Plan (which we refer to as the “substitute option”), on the same terms and conditions as applicable to each such Legacy option as in effect immediately prior to the effective time, except that (A) the number of shares of Seacoast common stock subject to such substitute option shall equal the product of (x) the number of shares of Legacy common stock subject to such Legacy option immediately prior to the effective time, multiplied by (y) the exchange ratio, rounded down to the nearest whole share, and (B) the per share exercise price for the shares of Seacoast common stock issuable upon exercise of such substitute option shall equal the quotient determined by dividing (x) the exercise price per share of Legacy common stock at which such Legacy option was exercisable immediately prior to the effective time by (y) the exchange ratio, rounded up to the nearest whole cent.
Conditions to Completion of the Merger (see page 65)
The completion of the merger depends on a number of conditions being fulfilled or, where permitted by applicable law, written waiver by the parties, including but not limited to:

the approval of the merger agreement and the transactions contemplated thereby by Legacy shareholders;

all regulatory consents required to consummate the transactions contemplated by the merger agreement shall have been obtained or made and remain in full force and effect and all waiting periods required by law shall have expired, and such regulatory consents shall not be subject to any condition or consequence that would have a material adverse effect on Seacoast or any of its subsidiaries after the effective time of the merger;

the absence of any judgment, order, injunction or decree issued by any governmental authority preventing the consummation of the merger and the absence of law or order by any governmental authority that prohibits, restrains or makes illegal the consummation of the merger;

the effectiveness of the Registration Statement on Form S-4, of which this proxy statement/prospectus is a part, under the Securities Act of 1933, as amended (the “Securities Act”), and no stop order suspending such effectiveness having been issued and no proceedings for that purpose shall have been initiated and be continuing by the SEC;
 
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the approval for listing on the NASDAQ Global Select Market of the shares of Seacoast common stock to be issued in the merger;

the accuracy, subject to varying degrees of materiality, of the other party’s representations and warranties in the merger agreement on the date of the merger agreement and as of the effective time of the merger (or such other date specified in the merger agreement);

performance and compliance in all material respects by the other party of its respective obligations under the merger agreement;

in the case of Seacoast, Legacy’s receipt of all consents, approvals, authorizations, clearances, exemptions, waivers or similar affirmations required as a result of the transactions contemplated by the merger agreement pursuant to certain contracts;

in the case of Seacoast, the holders of no more than 5% of Legacy common stock shall have exercised their dissenters’ rights in accordance with applicable law;

the absence of any event which has had or is reasonably likely to have a material adverse effect on the other party;

in the case of Seacoast, receipt by Seacoast of an opinion of its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code;

in the case of Legacy, receipt by Legacy of an opinion of its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code;

in the case of Seacoast, the executed claims letters and restrictive covenant agreements from certain of Legacy’s executive officers and directors;

in the case of Seacoast, Legacy’s consolidated tangible shareholders’ equity as of the close of business on the fifth business day prior to the closing of the merger shall be an amount not less than $58.2 million (less the after-tax impact of permitted expenses) and general allowance for loan and lease losses shall be an amount not less than 0.75% of total loans and leases outstanding (excluding loans made pursuant to the PPP);

in the case of Seacoast, all outstanding Legacy equity awards shall have been terminated and exchanged for the right to receive substitute Seacoast stock options and Legacy’s board of directors and shareholders shall have terminated the Legacy stock plans;

in the case of Seacoast, the delivery of a non-foreign affidavit by Legacy; and

Legacy shall have taken all actions necessary to prevent certain payments and benefits received by executives of Legacy in connection with the merger from being deemed a parachute payment as defined in Section 280G of the Code.
No assurance is given as to when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
Third Party Proposals (see page 61)
Legacy has agreed to a number of limitations with respect to initiating, soliciting or participating in any discussions, communications or negotiations with respect to acquisition proposals involving persons other than Seacoast, and to certain related matters. The merger agreement does not, however, prohibit Legacy from considering an unsolicited bona fide acquisition proposal from a third party if certain specified conditions are met.
Termination (see page 66)
The merger agreement may be terminated at any time prior to the effective time of the merger, whether before or after the approval of the merger agreement by Legacy shareholders:

by mutual consent of the board of directors of Legacy and the board of directors or executive committee of the board of directors of Seacoast; or
 
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by the board of directors of either Seacoast or Legacy, if there is a breach by the other party of any representation, warranty, covenant or agreement set forth in the merger agreement that is not cured within the earlier of 30 days’ notice of such breach or October 31, 2021 or which breach cannot be cured prior to the closing; or

by the board of directors of either Seacoast or Legacy, if there is a material breach by the other party of any covenant set forth in the merger agreement that is not cured within 30 days’ notice of such breach or which breach cannot be cured prior to October 31, 2021; or

by the board of directors of either Seacoast or Legacy, if a requisite regulatory consent has been denied by final non-appealable action of a governmental authority; or

by the board of directors of either Seacoast or Legacy, if the Legacy shareholders fail to approve the merger agreement at a duly held meeting of such shareholders where the merger agreement was presented for approval and voted upon; or

by the board of directors of either Seacoast or Legacy, if the merger has not been completed by October 31, 2021, unless the failure to consummate the transactions contemplated by the merger agreement by such date is due to a breach of the merger agreement by the party seeking to terminate the merger agreement; or

by the board of directors of Seacoast, if (i) the Legacy board of directors withdraws, qualifies or modifies its recommendation that the Legacy shareholders approve the merger agreement in a manner adverse to Seacoast, (ii) Legacy has failed to substantially comply with its “no-shop” obligations set forth in the merger agreement, (iii) Legacy has failed to substantially comply with its obligation to call, give notice of and commence a shareholder meeting or (iv) Legacy’s board of directors has recommended, endorsed, accepted or agreed to a third party acquisition proposal; or

by the board of directors of Legacy, if Legacy has received a superior proposal and has made a determination to accept such superior proposal (provided that Legacy has complied with the provisions related to superior proposals set forth in the merger agreement); or

by the board of directors of Seacoast, if holders of more than 5% in the aggregate of the outstanding shares of Legacy common stock have voted against the merger agreement and have given notice of their intention to exercise their dissenters’ rights.
Termination Fee (see page 67)
Legacy must pay Seacoast a termination fee of $4,600,000 if:

Seacoast terminates the merger agreement because the Legacy board of directors has recommended, endorsed, accepted or agreed to a third party acquisition proposal; or

Legacy terminates the merger agreement as a result of its receipt of a superior proposal that has not been withdrawn; or

either party terminates the merger agreement because the Legacy shareholders have not approved the merger agreement and Legacy enters into an acquisition proposal within 12 months of such termination; or

Seacoast terminates the merger agreement because of willful breach by Legacy of a covenant or agreement set forth in the merger agreement that is not cured in accordance with the merger agreement and Legacy enters into an acquisition proposal within 12 months of such termination; or

Seacoast terminates the merger agreement because the Legacy board of directors withdraws, qualifies or modifies its recommendation that the Legacy shareholders approve the merger agreement in a manner adverse to Seacoast or has resolved to take such action and Legacy enters into an acquisition proposal within 12 months of such termination; or

Seacoast terminates the merger agreement because Legacy has failed to substantially comply with the “no-shop” provisions of the merger agreement by Legacy and Legacy enters into an acquisition proposal within 12 months of such termination; or
 
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Seacoast terminates the merger agreement because Legacy has failed to substantially comply with its obligation to call, give notice of and commence a shareholder meeting and Legacy enters into an acquisition proposal within 12 months of such termination; or

after the date of the merger agreement and prior to the termination of the merger agreement, an acquisition proposal has been received by Legacy or a public announcement of an acquisition proposal has been made and not formally withdrawn or abandoned and Legacy enters into an acquisition proposal within 12 months of such termination.
NASDAQ Listing (see page 60)
Seacoast will cause the shares of Seacoast common stock to be issued to the holders of Legacy common stock in the merger to be authorized for listing on the NASDAQ Global Select Market, subject to official notice of issuance, prior to the effective time of the merger.
Legacy Annual Meeting (see page 27)
The annual meeting of Legacy shareholders will be held on Wednesday, August 4, 2021, at 3:00 p.m., local time, at the Wyndham Hotel Events Center, located at 1901 North Military Trail, Boca Raton, Florida. At the annual meeting, Legacy shareholders will be asked to vote on: (i) the proposal to approve the merger agreement; (ii) the election of three Class III directors to the Legacy board of directors, (iii) the adjournment proposal; and (iv) any other matters as may properly be brought before the annual meeting or any adjournment or postponement of the annual meeting.
Holders of Legacy common stock as of the close of business on June 11, 2021, the record date, will be entitled to vote at the annual meeting. As of the record date, there were outstanding and entitled to notice and to vote an aggregate of 15,777,904 shares of Legacy common stock held by approximately 516 shareholders of record. Each Legacy shareholder can cast one vote for each share of Legacy common stock owned on the record date.
As of the record date, directors and executive officers of Legacy and their affiliates owned and were entitled to vote approximately 2,624,609 shares of Legacy common stock (excluding approximately 1,495,935 shares which may be acquired by such persons upon the exercise of vested stock options), representing approximately 16.6% of the outstanding shares of Legacy common stock entitled to vote on that date. Pursuant to the support agreement, each director and executive officer of Legacy, who as of the date of the merger agreement held shares of Legacy common stock, and certain beneficial holders of 5% or more of outstanding shares of Legacy common stock have agreed at any meeting of Legacy shareholders, however called, or any adjournment or postponement thereof  (and subject to certain exceptions) to vote the shares owned in favor of the merger proposal. As of the record date, Seacoast did not own or have the right to vote any of the outstanding shares of Legacy common stock.
Required Shareholder Votes (see page 28)
In order to approve the merger agreement, the affirmative vote of the holders of at least two-thirds of the outstanding shares of Legacy common stock entitled to vote at the Legacy annual meeting must vote in favor of the merger agreement.
The Class III directors will be elected by a plurality of the votes cast at the Legacy annual meeting. This means that the nominee who receives the most affirmative votes, regardless of the actual number of votes for the director nominee, will be elected to serve on the Legacy board of directors as a Class III director.
The adjournment proposal will be approved if the number of votes cast in favor of the adjournment proposal exceeds the number of votes cast opposing the adjournment proposal.
No Restrictions on Resale
All shares of Seacoast common stock received by Legacy shareholders in the merger will be freely tradable, except that shares of Seacoast received by persons who are or become affiliates of Seacoast for
 
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purposes of Rule 144 under the Securities Act may be resold by them only in transactions permitted by Rule 144, or as otherwise permitted under the Securities Act.
Market Prices and Dividend Information (see page 25)
Seacoast common stock is listed and trades on the NASDAQ Global Select Market under the symbol “SBCF.” As of March 31, 2021, there were 55,294,320 shares of Seacoast common stock outstanding. Approximately 94.92% of these shares are owned by institutional investors, as reported by NASDAQ. Seacoast’s top institutional investors own approximately 36.6% of its outstanding stock. Seacoast has approximately 2,171 shareholders of record as of March 31, 2021.
To Seacoast’s knowledge, the only shareholders who owned more than 5% of the outstanding shares of Seacoast common stock on March 29, 2021 were BlackRock, Inc., 55 East 52nd Street, New York, New York 10055 (14.3%), T. Rowe Price Associates, Inc., 100 E. Pratt Street, Baltimore, Maryland 21202 (9.3%), Capital World Investors (6.9%), 333 South Hope Street, 55th Floor, Los Angeles, California 90071 and the Vanguard Group (6.1%), 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
The following tables show, for the indicated periods, the high and low sales prices per share for Seacoast common stock, as reported on NASDAQ. Seacoast did not pay cash dividends on its common stock during the periods indicated, however on April 20, 2021, Seacoast’s board of directors approved a cash dividend of $0.13 per share. The dividend will be paid on June 30, 2021 to all shareholders of record as of the close of business on June 15, 2021.
Seacoast Common Stock
High
Low
Dividend
2019
First Quarter
$ 29.75 $ 24.45 $
Second Quarter
$ 28.78 $ 22.99 $
Third Quarter
$ 27.64 $ 22.35 $
Fourth Quarter
$ 31.42 $ 24.11 $
2020
First Quarter
$ 30.87 $ 13.30 $
Second Quarter
$ 25.89 $ 16.02 $
Third Quarter
$ 22.23 $ 17.00 $
Fourth Quarter
$ 30.26 $ 17.62 $
2021
First Quarter
$ 40.93 $ 28.52 $
Second Quarter (through June 16, 2021)
$ 38.87 $ 34.29 $ 0.13
Dividends from SNB are Seacoast’s primary source of funds to pay dividends on its common stock. Under the National Bank Act, national banks may in any calendar year, without the approval of the OCC, pay dividends to the extent of net profits for that year, plus retained net profits for the preceding two years (less any required transfers to surplus). The need to maintain adequate capital in SNB also limits dividends that may be paid to Seacoast. On April 20, 2021, Seacoast’s board of directors approved a cash dividend of $0.13 per share. The dividend will be paid on June 30, 2021 to all shareholders of record as of the close of business on June 15, 2021.
Any further dividends paid on Seacoast’s common stock will be declared and paid at the discretion of its board of directors and would be dependent upon Seacoast’s liquidity, financial condition, results of operations, capital requirements and such other factors as the board of directors may deem relevant.
As of March 31, 2021, there were 15,772,897 shares of Legacy common stock, $1.00 par value per share, outstanding, which were held by approximately 460 holders of record.
Legacy common stock is not listed or traded on any established securities exchange or quotation system. Accordingly, there is no established public trading market for the Legacy common stock. Management is not aware of any trades in Legacy’s common stock since November 9, 2020. Legacy has never paid any cash dividends on the shares of Legacy.
 
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The following table sets forth the date, sale price, and number of shares for trades of shares of Legacy common stock since January 1, 2019:
Date
Price per
Share
Number of
Shares
March 8, 2019
$ 3.25 5,000
May 29, 2019
3.25 1,000
December 19, 2019
3.75 50,000
December 19, 2019
3.75 1,000
December 19, 2019
3.75 27
June 19, 2020
3.22 10,000
September 6, 2020
2.75 252,795
November 9, 2020
3.00 5,000
Comparison of Shareholders’ Rights (see page 69)
The rights of Legacy shareholders who continue as Seacoast shareholders after the merger will be governed by the articles of incorporation and bylaws of Seacoast rather than the articles of incorporation and bylaws of Legacy. For more information, please see the section entitled “Comparison of Shareholders’ Rights” beginning on page 69.
Risk Factors (see page 17)
Before voting at the Legacy annual meeting, you should carefully consider all of the information contained or incorporated by reference into this proxy statement/prospectus, including the risk factors set forth in the section entitled “Risk Factors” beginning on page 17 or described in Seacoast’s reports filed with the SEC, which are incorporated by reference into this proxy statement/prospectus. Please see “Documents Incorporated by Reference” beginning on page 84.
 
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RISK FACTORS
An investment in Seacoast common stock in connection with the merger involves risks. Seacoast describes below the material risks and uncertainties that it believes affect its business and an investment in Seacoast common stock. In addition to the other information contained in, or incorporated by reference into, this proxy statement/prospectus, including Seacoast’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Seacoast’s Quarterly Report on Form 10-Q for the three months ended March 31, 2021, and the matters addressed under “Forward-Looking Statements,” you should carefully read and consider all of the risks and all other information contained in this proxy statement/prospectus in deciding whether to vote to approve the merger agreement. Additional Risk Factors included in Item 1A in Seacoast’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Seacoast’s Quarterly Report on Form 10-Q for the three months ended March 31, 2021 are incorporated herein by reference. You should read and consider those Risk Factors in addition to the Risk Factors listed below. If any of the risks described in this proxy statement/prospectus occur, Seacoast’s financial condition, results of operations and cash flows could be materially and adversely affected. If this were to happen, the value of the Seacoast common stock could decline significantly, and you could lose all or part of your investment.
The market price of Seacoast common stock after the merger may be affected by factors different from those currently affecting Legacy or Seacoast.
The businesses of Seacoast and Legacy differ in some respects and, accordingly, the results of operations of the combined company and the market price of Seacoast’s shares of common stock after the merger may be affected by factors different from those currently affecting the independent results of operations of each of Seacoast and Legacy. For a discussion of the business of Seacoast and of certain factors to consider in connection with that business, see the documents incorporated by reference into this proxy statement/prospectus and referred to under “Documents Incorporated by Reference.”
Because the sale price of Seacoast common stock will fluctuate, you cannot be sure of the value of the per share stock consideration that you will receive in the merger until the closing.
Under the terms of the merger agreement, each share of Legacy common stock outstanding immediately prior to the effective time of the merger (excluding shares of Legacy common stock owned by Legacy, Seacoast or SNB or the dissenting shares) will be converted into the right to receive 0.1703 shares of Seacoast common stock (plus cash in lieu of fractional shares), which is subject to adjustment based on the value of Legacy’s consolidated tangible shareholder’s equity and Legacy’s general allowance for loan and lease losses. The value of the shares of Seacoast common stock to be issued to Legacy shareholders in the merger will fluctuate between now and the closing date of the merger due to a variety of factors, including general market and economic conditions, changes in the parties’ respective businesses, operations and prospects and regulatory considerations, among other things. Many of these factors are beyond the control of Seacoast and Legacy. We make no assurances as to whether or when the merger will be completed. Legacy shareholders should obtain current sale prices for shares of Seacoast common stock before voting their shares of Legacy common stock at the annual meeting.
The merger will not be completed unless important conditions are satisfied or waived, including approval by Legacy shareholders.
Specified conditions set forth in the merger agreement must be satisfied or waived to complete the merger. If the conditions are not satisfied or waived, to the extent permitted by law or stock exchange rules, the merger will not occur or will be delayed and each of Seacoast and Legacy may lose some or all of the intended benefits of the merger. The following conditions, in addition to other closing conditions, must be satisfied or waived, if permissible, before Seacoast and Legacy are obligated to complete the merger:

The merger agreement and the transactions contemplated thereby must have been approved by the affirmative vote of at least two-thirds of the outstanding shares of Legacy common stock;

All regulatory consents required to consummate the transactions contemplated by the merger agreement must have been obtained and all waiting periods required by law must have expired and such
 
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consents must not be subject to any condition or consequence that would have a material adverse effect on Seacoast or any of its subsidiaries, including Legacy, after the effective time of the merger;

No order issued by any governmental authority 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;

The registration statement (of which this proxy statement/prospectus is a part) registering shares of Seacoast common stock to be issued in the merger must have been declared effective, no stop order may have been issued by the SEC and no action, suit, proceeding or investigation by the SEC to suspend the effectiveness of the registration statement shall have been initiated and continuing;

The holders of no more than 5% of Legacy common stock shall have taken the actions required by applicable statute to qualify their common stock as dissenting shares;

Since the date of the merger agreement, no fact, circumstance or event shall have occurred that has had or is reasonably likely to have a material adverse effect on either party;

Certain Legacy employees shall have entered into claims letters and/or restrictive covenant agreements;

Legacy’s consolidated tangible shareholders’ equity as of the close of business on the 5th business day prior to the closing date shall not be less than $58.2 million and its general allowance for loan and lease losses shall not be less than 0.75% of total loans and leases outstanding (excluding PPP loans);

All outstanding Legacy equity awards shall have been terminated and cashed out and Legacy’s board of directors and shareholders shall have taken all action necessary to terminate the Legacy stock plans;

Each party shall have received from its tax counsel a U.S. federal income tax opinion that the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code; and

The shares of Seacoast common stock to be issued pursuant to the merger shall have been approved for listing on the NASDAQ.
For a more detailed description of the conditions set forth in the merger agreement that must be satisfied or waived to complete the merger, see “The Merger Agreement — Conditions to Completion of the Merger” beginning on page 65.
Shares of Seacoast common stock to be received by holders of Legacy common stock as a result of the merger will have rights different from the shares of Legacy common stock.
Upon completion of the merger, the rights of former Legacy shareholders will be governed by the articles of incorporation, as amended, and bylaws of Seacoast. The rights associated with Legacy common stock are different from the rights associated with Seacoast common stock, although both companies are organized under Florida law. See “Comparison of Shareholders’ Rights” beginning on page 69 for a discussion of the different rights associated with Seacoast common stock.
Legacy shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.
Legacy shareholders currently have the right to vote in the election of the board of directors of Legacy and on other matters affecting Legacy. Upon the completion of the merger, Legacy’s shareholders will be shareholders of Seacoast with a percentage ownership of Seacoast that is smaller than such shareholders’ current percentage ownership of Legacy. It is currently expected that the former shareholders of Legacy as a group will receive shares in the merger constituting approximately 4.63% of the outstanding shares of the combined company’s common stock immediately after the merger. Because of this, Legacy shareholders will have less influence on the management and policies of the combined company than they now have on the management and policies of Legacy.
If a Legacy shareholder exercises statutory dissenters’ rights, the value such shareholder receives could be less than the value of the merger consideration such shareholder would otherwise receive pursuant to the merger agreement.
Pursuant to Section 215a of the United States Code, a Legacy shareholder who perfects dissenters’ rights as provided in such section is entitled to receive payment in cash of the value of each share of Legacy common
 
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stock held by such shareholder. The value of the share of Legacy common stock, as determined in accordance with the United States Code, may be less than the value of a share of the Legacy common stock such shareholder would otherwise receive pursuant to the merger agreement. See “The Merger — Dissenters’ Rights for Legacy Shareholders.”
Seacoast and Legacy will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on employees, customers, suppliers and vendors may have an adverse effect on the business, financial condition and results of operations of Legacy and Seacoast. These uncertainties may impair Seacoast’s or Legacy’s ability to attract, retain and motivate key personnel, depositors and borrowers pending the consummation of the merger, as such personnel, depositors and borrowers may experience uncertainty about their future roles following the consummation of the merger. Additionally, these uncertainties could cause customers (including depositors and borrowers), suppliers, vendors and others who deal with Seacoast or Legacy to seek to change existing business relationships with Seacoast or Legacy or fail to extend an existing relationship. In addition, competitors may target each party’s existing customers by highlighting potential uncertainties and integration difficulties that may result from the merger.
Seacoast and Legacy have a small number of key personnel. The pursuit of the merger and the preparation for the integration may place a burden on each company’s management and internal resources. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on each company’s business, financial condition and results of operations.
In addition, the merger agreement restricts Legacy from taking certain actions without Seacoast’s consent while the merger is pending. These restrictions may, among other matters, prevent Legacy from pursuing otherwise attractive business opportunities, selling assets, incurring indebtedness, engaging in significant capital expenditures in excess of certain limits set forth in the merger agreement, entering into other transactions or making other changes to Legacy’s business prior to consummation of the merger or termination of the merger agreement. These restrictions could have a material adverse effect on Legacy’s business, financial condition and results of operations. Please see the section entitled “The Merger Agreement — Conduct of Business Pending the Merger” beginning on page 57 for a description of the covenants applicable to Legacy and Seacoast.
Seacoast may fail to realize the cost savings estimated for the merger.
Although Seacoast estimates that it will realize cost savings from the merger when fully phased in, it is possible that the estimates of the potential cost savings could turn out to be incorrect. Unanticipated growth in Seacoast’s business may require Seacoast to continue to operate or maintain some facilities or support functions that are currently expected to be combined or reduced. The cost savings estimates also depend on Seacoast’s ability to combine the businesses of Seacoast and Legacy in a manner that permits those costs savings to be realized. If the estimates turn out to be incorrect or Seacoast is not able to combine the two companies successfully, the anticipated cost savings may not be fully realized or realized at all, or may take longer to realize than expected.
The combined company expects to incur substantial expenses related to the merger.
The combined company expects to incur substantial expenses in connection with completing the merger and combining the business, operations, networks, systems, technologies, policies and procedures of Seacoast and Legacy. Although Seacoast and Legacy have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and combination expenses associated with the merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the completion of the merger. In addition, prior to completion of the merger, each of Legacy and Seacoast will incur or have incurred substantial expenses in connection with the negotiation and completion of the transactions
 
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contemplated by the merger agreement. If the merger is not completed, Seacoast and Legacy would have to recognize these expenses without realizing the anticipated benefits of the merger.
Seacoast and Legacy may waive one or more of the conditions to the merger.
Prior to or at the effective time of the merger, either party has the right to waive any default in the performance of any term of the merger 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 the merger agreement, and to waive any or all of the conditions to its obligations under the merger agreement.
The merger is expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
It is expected that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The obligation of Seacoast to complete the merger is conditioned upon the receipt of a U.S. federal income tax opinion to that effect from Seacoast’s tax counsel and the obligation of Legacy to complete the merger is conditioned upon the receipt of a U.S. federal income tax opinion to that effect from Legacy’s tax counsel. These tax opinions represent the legal judgment of counsel rendering the opinion and is not binding on the Internal Revenue Service or the courts. If the merger does not qualify as a tax-free reorganization, then the holders of shares of Legacy common stock will recognize gain in the amount equal to the difference between (i) the fair market value of the Seacoast common stock and cash consideration received as a result of the merger and (ii) the shareholder’s adjusted tax basis in the Legacy common stock surrendered in exchange therefor. The consequences of the merger to any particular Legacy shareholder will depend on that shareholder’s individual situation. We strongly urge you to consult your own tax advisor to determine the particular tax consequences of the merger to you.
The opinion of Legacy’s financial advisor delivered to Legacy’s board of directors prior to the signing of the merger agreement does not reflect any changes in circumstances since the date of the opinion.
Legacy’s board of directors received the opinion of Legacy’s financial advisor regarding the fairness, from a financial point of view, to the holders of Legacy’s common stock, of the exchange ratio on March 22, 2021. Subsequent changes in the operation and prospects of Seacoast or Legacy, general market and economic conditions and other factors that may be beyond the control of Seacoast or Legacy, and may significantly alter the value of Seacoast or the price of the shares of Seacoast common stock by the time the merger is completed. The opinion does not address the fairness of the exchange ratio from a financial point of view at the time the merger is completed, or as of any other date other than the date of such opinion. For a description of the opinion of Legacy’s financial advisor, please refer to the section entitled “The Merger — Opinion of Legacy’s Financial Advisor” beginning on page 35.
Legacy’s executive officers and directors have financial interests in the merger that are different from, or in addition to, the interests of Legacy shareholders.
Executive officers of Legacy and the Chairman of the board of directors of Legacy negotiated the terms of the merger agreement with Seacoast, and the Legacy board of directors approved and recommended that Legacy shareholders vote to approve the merger agreement. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that certain Legacy executive officers and directors have financial interests in the merger that are different from, or in addition to, the interests of Legacy shareholders generally. See “The Merger — Interests of Legacy Directors and Executive Officers in the Merger” on page 49 for information about these financial interests.
The termination fees and the restrictions on third party acquisition proposals set forth in the merger agreement may discourage others from trying to acquire Legacy.
Until the completion of the merger, with some limited exceptions, Legacy and its directors, officers, employees, representatives and affiliates are prohibited from initiating, soliciting, encouraging or knowingly facilitating any inquiry or proposal relating to any acquisition proposal, from engaging or participating in any negotiations concerning or with any person relating to any acquisition proposal or providing any confidential or nonpublic information or data to any person relating to an acquisition proposal. In addition, Legacy has agreed to pay to Seacoast in certain circumstances a termination fee equal to $4,600,000. These provisions
 
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could discourage other companies from trying to acquire Legacy even though those other companies might be willing to offer greater value to Legacy shareholders than Seacoast has offered in the merger. The payment of any termination fee could also have an adverse effect on Legacy’s financial condition. See “The Merger Agreement — Third Party Proposals” beginning on page 61 and “The Merger Agreement — Termination Fee” beginning on page 67.
Failure of the merger to be completed, the termination of the merger agreement or a significant delay in the consummation of the merger could negatively impact Seacoast and Legacy.
If the merger is not consummated, the ongoing business, financial condition and results of operations of each party may be materially adversely affected and the market price of each party’s common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the merger will be consummated. If the consummation of the merger is delayed, the business, financial condition and results of operations of each company may be materially adversely affected. If the merger agreement is terminated and a party’s board of directors seeks another merger or business combination, such party’s shareholders cannot be certain that such party will be able to find a party willing to engage in a transaction on more attractive terms than the merger.
If the merger is not completed, Seacoast and Legacy will have incurred substantial expenses without realizing the expected benefits of the merger.
Each of Seacoast and Legacy has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing, and mailing this proxy statements/prospectus, and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, Seacoast and Legacy would have to recognize these expenses without realizing the expected benefits of the merger.
Some of the performing loans in the Legacy loan portfolio being acquired by Seacoast may be under-collateralized, which could affect Seacoast’s ability to collect all of the loan amount due.
In an acquisition transaction, the purchasing financial institution may be acquiring under-collateralized loans from the seller. Under-collateralized loans are risks that are inherent in any acquisition transaction and are mitigated through the loan due diligence process that the purchaser performs and the estimated fair market value adjustment that the purchaser places on the seller’s loan portfolio. When it acquires a loan portfolio, Seacoast will establish an allowance for credit losses to recognize the full amount of expected credit losses over the life of the acquired loans. With respect to the Legacy loan portfolio, Seacoast has preliminarily estimated a $10.8 million allowance for credit losses which Seacoast believes is adequate to mitigate the risk of under-collateralized, non- performing loans. There is no assurance that the allowance for credit losses that Seacoast will place on the Legacy loan portfolio to mitigate against under-collateralized, non-performing loans will be adequate or that Seacoast will not incur losses that could be greater than this estimate.
 
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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Certain statements contained in this proxy statement/prospectus, including statements included or incorporated by reference in this proxy statement/prospectus, are not statements of historical fact and constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be protected by the safe harbor provided by the same. These statements are subject to risks and uncertainties, and include information about possible or assumed future results of operations of Seacoast after the merger is completed as well as information about the merger. Words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “would,” “continue,” “should,” “may,” or similar expressions, or the negatives thereof, are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Many possible events or factors could affect the future financial results and performance of each of Seacoast and Legacy before the merger or Seacoast after the merger, and could cause those results or performance to differ materially from those expressed in the forward-looking statements. These possible events or factors include, but are not limited to:

the failure to obtain the approval of Legacy shareholders in connection with the merger;

the negative impacts and disruptions resulting from COVID-19 on the economies and communities we serve, which has had and may likely continue to have an adverse impact on our business operations and performance, and could continue to have a negative impact on our credit portfolio, stock price, borrowers and the economy as a whole both globally and domestically;

the risk that the merger may not be completed in a timely manner or at all, which may adversely affect Seacoast’s and Legacy’s business and the price of Seacoast common stock;

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 Legacy, including unexpected transaction costs, including the costs of integrating operations, severance, professional fees and other expenses;

the diversion of management time on issues related to the merger;

the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

the effect of the announcement or pendency of the merger on Seacoast’s customer, employee and business relationships, operating results, and business generally;

deposit attrition, operating costs, customer loss and business disruption following the proposed merger, including difficulties in maintaining relationships with employees, may be greater than expected;

reputational risks and the reaction of the companies’ customers to the proposed merger;

customer acceptance of the combined company’s products and services;

increased competitive pressures and solicitations of customers and employees by competitors;

the failure to consummate or delay in consummating the merger for other reasons;

the outcome of any legal proceedings that may be instituted against Seacoast or Legacy related to the merger agreement or the merger;

changes in laws or regulations;

the dilution caused by Seacoast’s issuance of additional shares of its common stock in the merger or related to the merger;

the sale price of Seacoast common stock could decline before the completion of the merger, including as a result of the financial performance of Seacoast or Legacy or more generally due to broader stock market movements and the performance of financial companies and peer group companies;
 
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the continuation of the historically low short-term interest rate environment, other changes in interest rates, deposit flows, loan demand and real estate values; and

changes in general business, economic and market 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 “Risk Factors” section of this proxy statement/prospectus, as well as 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 10-Q and 8-K reports, which are available online at www.sec.gov, and are incorporated by reference herein. 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 Legacy. The forward-looking statements are made as of the date of this proxy statement/prospectus or the date of the applicable document incorporated by reference into this proxy statement/prospectus. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
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SEACOAST SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following selected historical consolidated financial data as of and for the twelve months ended December 31, 2020, 2019, 2018, 2017 and 2016 is derived from the audited consolidated financial statements of Seacoast. The following selected historical consolidated financial data as of and for the three months ended March 31, 2021 and 2020, is derived from the unaudited consolidated financial statements of Seacoast and has been prepared on the same basis as the selected historical consolidated financial data derived from the audited consolidated financial statements and, in the opinion of Seacoast’s management, reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data for those dates.
The results of operations as of and for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2021 or any future period. You should read the following selected historical consolidated financial data in conjunction with: (i) the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Seacoast’s audited consolidated financial statements and accompanying notes included in Seacoast’s Annual Report on Form 10-K for the twelve months ended December 31, 2020; and (ii) the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Seacoast’s unaudited consolidated financial statements and accompanying notes included in Seacoast’s Quarterly Report on Form 10-Q for the three months ended March 31, 2021, both of which are incorporated by reference into this proxy statement/prospectus. See “Documents Incorporated by Reference.”
(Amounts in thousands, except per
share data)
(unaudited)
Three Months ended
March 31,
Year Ended December 31,
2021
2020
2020
2019
2018
2017
2016
Net interest income
$ 66,610 $ 63,177 $ 262,743 $ 243,618 $ 211,515 $ 176,296 $ 139,588
Provision for credit losses
(5,715) 29,513 38,179 10,999 11,730 5,648 2,411
Noninterest income:
Other
17,785 14,669 60,335 55,515 50,645 43,230 37,427
Gain on sale of VISA stock
15,153
Securities gains/(losses), net
(114) 19 1,235 1,217 (623) 86 368
Noninterest expenses
46,120 47,798 185,552 160,739 162,273 149,916 130,881
Income before income taxes
43,876 554 100,582 128,612 87,534 79,201 44,091
Provision for income taxes
10,157 (155) 22,818 29,873 20,259 36,336 14,889
Net income
$ 33,719 $ 709 $ 77,764 $ 98,739 $ 67,275 $ 42,865 $ 29,202
Per Share Data
Net income available to common
shareholders:
Diluted
$ 0.60 $ 0.01 $ 1.44 $ 1.90 $ 1.38 $ 0.99 $ 0.78
Basic
0.61 0.01 1.45 1.92 1.40 1.01 0.79
Cash dividends declared
0.00 0.00 0.00 0.00 0.00 0.00 0.00
Book value per common share
20.89 18.82 20.46 19.13 16.83 14.70 11.45
Assets
$ 8,811,820 $ 7,352,894 $ 8,342,392 $ 7,108,511 $ 6,747,659 $ 5,810,129 $ 4,680,932
Net loans
5,574,849 5,231,797 5,642,616 5,163,250 4,792,791 3,790,255 2,856,136
Deposits
7,385,749 5,887,499 6,932,561 5,584,753 5,177,240 4,592,720 3,523,245
Shareholders’ equity
1,155,349 991,787 1,130,402 985,639 864,267 689,664 435,397
Performance Ratios
Return on average assets
1.61% 0.04% 0.99% 1.45% 1.11% 0.82% 0.69%
Return on average equity
12.03 0.29 7.44 10.63 9.08 7.51 7.06
Average equity to average assets
13.39 14.09 13.30 13.60 12.23 10.96 9.85
 
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MARKET PRICES AND DIVIDEND INFORMATION
Seacoast Banking Corporation of Florida
Seacoast common stock is listed and trades on The NASDAQ Global Select Market under the symbol “SBCF.” As of March 31, 2021, there were 55,294,320 shares of Seacoast common stock outstanding. Approximately 94.92% of these shares are owned by institutional investors, as reported by NASDAQ. Seacoast’s top institutional investors own approximately 36.6% of its outstanding stock. Seacoast has approximately 2,171 shareholders of record as of March 31, 2021.
To Seacoast’s knowledge, the only shareholders who owned more than 5% of the outstanding shares of Seacoast common stock on March 29, 2021 were BlackRock, Inc., 55 East 52nd Street, New York, New York 10055 (14.3%), T. Rowe Price Associates, Inc., 100 E. Pratt Street, Baltimore, Maryland 21202 (9.3%), Capital World Investors (6.9%), 333 South Hope Street, 55th Floor, Los Angeles, California 90071 and the Vanguard Group (6.1%), 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
The following tables show, for the indicated periods, the high and low sales prices per share for Seacoast common stock, as reported on NASDAQ. Cash dividends declared and paid per share on Seacoast common stock are also shown for the periods indicated below. Seacoast did not pay cash dividends on its common stock during the periods indicated.
The high and low sales prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.
Seacoast Common Stock
High
Low
Dividend
2019
First Quarter
$ 29.75 $ 24.45 $    —
Second Quarter
$ 28.78 $ 22.99 $
Third Quarter
$ 27.64 $ 22.35 $
Fourth Quarter
$ 31.42 $ 24.11 $
2020
First Quarter
$ 30.87 $ 13.30 $
Second Quarter
$ 25.89 $ 16.02 $
Third Quarter
$ 22.23 $ 17.00 $
Fourth Quarter
$ 30.26 $ 17.62 $
2021
First Quarter
$ 40.93 $ 28.52 $
Second Quarter (through June 16, 2021)
$ 38.87 $ 34.29 $ 0.13
Dividends from SNB are Seacoast’s primary source of funds to pay dividends on its common stock. Under the National Bank Act, national banks may in any calendar year, without the approval of the OCC, pay dividends to the extent of net profits for that year, plus retained net profits for the preceding two years (less any required transfers to surplus). The need to maintain adequate capital in SNB also limits dividends that may be paid to Seacoast. On April 20, 2021, Seacoast’s board of directors approved a cash dividend of $0.13 per share. The dividend will be paid on June 30, 2021 to all shareholders of record as of the close of business on June 15, 2021.
Any further dividends paid on Seacoast’s common stock will be declared and paid at the discretion of its board of directors and would be dependent upon Seacoast’s liquidity, financial condition, results of operations, capital requirements and such other factors as the board of directors may deem relevant.
Legacy Bank of Florida
As of March 31, 2021, there were 15,772,897 shares of Legacy common stock, $1.00 par value per share, outstanding, which were held by approximately 460 holders of record.
 
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Legacy common stock is not listed or traded on any established securities exchange or quotation system. Accordingly, there is no established public trading market for the Legacy common stock. Legacy has never paid any cash dividends on the shares of Legacy.
The table below sets forth the date, sale price, and number of shares for trades of shares of Legacy common stock since January 1, 2019. Management is not aware of any trades in Legacy’s common stock since November 9, 2020.
Date
Price per
Share
Number of
Shares
March 8, 2019
$ 3.25 5,000
May 29, 2019
3.25 1,000
December 19, 2019
3.75 50,000
December 19, 2019
3.75 1,000
December 19, 2019
3.75 27
June 19, 2020
3.22 10,000
September 6, 2020
2.75 252,795
November 9, 2020
3.00 5,000
 
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INFORMATION ABOUT THE LEGACY ANNUAL MEETING
This section contains information about the annual meeting of Legacy shareholders. The Legacy board of directors is mailing this proxy statement/prospectus to you, as a Legacy shareholder, on or about June 21, 2021. Together with this proxy statement/prospectus, the Legacy board of directors is also sending you a notice of the annual meeting of Legacy shareholders and a form of proxy that the Legacy board of directors is soliciting for use at the annual meeting and at any adjournments or postponements of the annual meeting.
Time, Date, and Place
The annual meeting is scheduled to be held on Wednesday, August 4, 2021 at 3:00 p.m., local time, at the Wyndham Hotel Events Center, located at 1901 North Military Trail, Boca Raton, Florida.
Matters to be Considered at the Meeting
At the annual meeting, Legacy shareholders will be asked to consider and vote on:

a proposal to approve the merger agreement, which we refer to as the merger proposal;

the election of three Class III directors to serve as a Class III director of Legacy’s board of directors for a three-year term;

a proposal of the Legacy board of directors to adjourn or postpone the annual meeting, if necessary or appropriate, including to permit further solicitation of proxies if there are insufficient votes at the time of the annual meeting to approve the merger agreement, which we refer to as the adjournment proposal; and

any other matters as may properly be brought before the annual meeting or any adjournment or postponement of the annual meeting.
At this time, the Legacy board of directors is unaware of any other matters that may be presented for action at the annual meeting. If any other matters are properly presented, however, and you have completed, signed and submitted your proxy, the person(s) named as proxy will have the authority to vote your shares in accordance with his or her judgment with respect to such matters. A copy of the merger agreement is included in this proxy statement/prospectus as Appendix A, and we encourage you to read it carefully in its entirety.
Recommendation of the Legacy Board of Directors
The Legacy board of directors recommends that Legacy shareholders vote “FOR” the merger proposal, “FOR” the election of Dennis G. Bedley, Leo B. Berman, and Thomas M. McDonald as Class III directors of Legacy, and “FOR” the adjournment proposal. See “The Merger — Legacy’s Reasons for the Merger and Recommendations of the Legacy Board of Directors” and “Election of Directors.”
Record Date and Quorum
June 11, 2021 has been fixed as the record date for the determination of Legacy shareholders entitled to notice of, and to vote at, the annual meeting and any adjournment or postponement thereof. At the close of business on the record date, there were 15,777,904 shares of Legacy common stock outstanding and entitled to vote at the annual meeting, held by approximately 516 holders of record.
A quorum is necessary to transact business at the annual meeting. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Legacy common stock entitled to vote at the meeting is necessary to constitute a quorum. Shares of Legacy common stock represented at the annual meeting but not voted, including shares that a shareholder abstains from voting, will be counted for purposes of establishing a quorum. Once a share of Legacy common stock is represented at the annual meeting, it will be counted for the purpose of determining a quorum not only at the annual meeting but also at any adjournment or postponement of the annual meeting. In the event that a quorum is not present at the annual meeting, it is expected that the annual meeting will be adjourned or postponed.
 
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Required Vote
The affirmative vote of at least two-thirds of the outstanding shares of Legacy common stock must vote in favor of the proposal to approve the merger agreement. If you vote to “ABSTAIN” with respect to the merger proposal or if you fail to vote on the merger proposal, this will have the same effect as voting “AGAINST” the merger proposal.
The Class III directors will be elected by a plurality of the votes cast. As a result, the nominees who receive the most affirmative votes, regardless of the actual number of votes for the director nominee, will be elected to serve on the Legacy board of directors for a three-year term. If you vote to “ABSTAIN” with respect to the election of Class III directors or if you fail to vote for any director nominee, this will have no effect on the outcome of the election of the Class III directors.
The adjournment proposal will be approved if the votes of Legacy common stock cast in favor of the adjournment proposal exceed the votes cast against the adjournment proposal. If you vote to “ABSTAIN” with respect to the adjournment proposal or if you fail to vote on the adjournment proposal, this will have no effect on the outcome of the vote on the adjournment proposal.
Each share of Legacy common stock you own as of the record date for the annual meeting entitles you to one vote at the annual meeting on all matters properly presented at the meeting.
How to Vote — Shareholders of Record
Voting in Person.   If you are a shareholder of record, you can vote in person by submitting a ballot at the annual meeting. Nevertheless, we recommend that you vote by proxy as promptly as possible, even if you plan to attend the annual meeting. This will ensure that your vote is received. If you attend the annual meeting, you may vote by ballot, thereby canceling any proxy previously submitted.
Voting by Proxy.   Your proxy card includes instructions on how to vote by mailing in the proxy card. If you choose to vote by proxy, please mark each proxy card you receive, sign and date it, and promptly return it in the envelope enclosed with the proxy card. If you sign and return your proxy without instruction on how to vote your shares, your shares will be voted “FOR” the merger proposal, “FOR” the election of the three Class III director nominees, and “FOR” the adjournment proposal. At this time, the Legacy board of directors is unaware of any other matters that may be presented for action at the annual meeting. If any other matters are properly presented, however, and you have signed and returned your proxy card, the person(s) named as proxy will have the authority to vote your shares in accordance with his or her judgment with respect to such matters. Please do not send in your stock certificates with your proxy card. If the merger is completed, then you will receive a separate letter of transmittal and instructions on how to surrender your Legacy stock certificates for the merger consideration.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.
Revocation of Proxies
You can revoke your proxy at any time before your shares are voted. If you are a shareholder of record, then you can revoke your proxy by:

submitting another valid proxy card bearing a later date;

attending the annual meeting and voting your shares in person; or

delivering prior to the annual meeting a written notice of revocation to Legacy’s Corporate Secretary at the following address: Legacy Bank of Florida, 2300 Glades Road, Suite 120/140 West, Boca Raton, Florida 33431.
If you choose to send a completed proxy card bearing a later date or a notice of revocation, the new proxy card or notice of revocation must be received before the beginning of the annual meeting. Attendance at the
 
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annual meeting will not, in and of itself, constitute revocation of a proxy. If you hold your shares in street name with a bank, broker or other nominee, you must follow the directions you receive from your bank, broker or other nominee to change your vote. Your last vote will be the vote that is counted.
Shares Subject to Support Agreement; Shares Held by Directors and Executive Officers
As of the record date, directors and executive officers of Legacy and their affiliates owned and were entitled to vote 2,624,609 shares of Legacy common stock (excluding approximately 1,495,935 shares which may be acquired by such persons upon the exercise of vested stock options), representing approximately 16.6% of the outstanding shares of Legacy common stock entitled to vote on that date.
A total of 6,183,211 shares of Legacy common stock, representing approximately 39.2% of the outstanding shares of Legacy common stock entitled to vote at the annual meeting, are subject to a support agreement between Seacoast and each of Legacy’s directors and executive officers who held shares of Legacy common stock as of the date of the merger agreement, and certain beneficial holders of 5% or more of Legacy’s outstanding shares of common stock (excluding approximately 1,495,935 shares which may be acquired by such persons upon the exercise of vested stock options). Pursuant to the support agreement, each director and executive officer of Legacy who held shares of Legacy common stock as of the date of the merger agreement, and certain beneficial holders of 5% or more of Legacy’s outstanding shares of common stock have agreed to, at any meeting of Legacy shareholders, however called, or any adjournment or postponement thereof  (and subject to certain exceptions):

vote (or cause to be voted) all shares of Legacy’s common stock owned by such shareholder in favor of the approval of the terms of the merger agreement, the merger and each of the transactions contemplated by the merger agreement;

not vote or grant any proxies to any third party, except where such proxies are expressly directed to vote in favor of the merger agreement, the merger and the transactions contemplated by the merger agreement; and

vote (or cause to be voted) his shares against any competing transaction.
Pursuant to the shareholder support agreement, without the prior written consent of Seacoast, each director, certain executive officers and certain beneficial holders of 5% or more of Legacy’s common stock have further agreed not to sell or otherwise transfer any shares of Legacy common stock. The foregoing summary of the shareholder support agreement entered into by Legacy’s directors and certain executive officers who held shares of Legacy common stock as of the date of the merger agreement, and certain beneficial holders of 5% or more of Legacy’s outstanding shares of common stock does not purport to be complete, and is qualified in its entirety by reference to the form of shareholder support agreement attached as Exhibit B to the merger agreement, which is attached as Appendix A to this document.
For more information about the beneficial ownership of Legacy common stock by each 5% or greater beneficial owner, each director and executive officer and executive officers as a group, see “Beneficial Ownership of Legacy Common Stock by Management and Principal Shareholders of Legacy.”
Solicitation of Proxies
The proxy for the annual meeting is being solicited on behalf of the Legacy board of directors. Legacy will bear the entire cost of soliciting proxies from you. Legacy will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of Legacy stock. Proxies will be solicited principally by mail, but may also be solicited by the directors, officers, and other employees of Legacy in person or by telephone, facsimile or other means of electronic communication. Directors, officers and employees will receive no compensation for these activities in addition to their regular compensation, but may be reimbursed for out-of-pocket expenses in connection with such solicitation.
Attending the Meeting
All holders of Legacy common stock, including shareholders of record and shareholders who hold their shares in street name through banks, brokers or other nominees, are cordially invited to attend the annual
 
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meeting. Shareholders of record can vote in person at the annual meeting. If you are not a shareholder of record and would like to vote in person at the annual meeting, you must produce a legal proxy executed in your favor by the record holder of your shares. In addition, you must bring a form of personal photo identification with you in order to be admitted at the annual meeting. We reserve the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the annual meeting is prohibited without Legacy’s express written consent.
Questions and Additional Information
If you have more questions about the merger or how to submit your proxy or vote, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card or voting instructions, please contact Legacy at:
Legacy Bank of Florida
2300 Glades Road, Suite 120/140 West
Boca Raton, Florida 33431.
Telephone: (561) 544-8400
Attn: Dennis G. Bedley, Chairman & Chief Executive Officer
 
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PROPOSAL 1:   THE MERGER
Background of the Merger
Over the past several years, as a part of its ongoing consideration and evaluation of long-term prospects and strategies, the Legacy board of directors and senior management have regularly assessed strategic alternatives for maximizing shareholder value, including as to growth opportunities and operational efficiencies with the objective to enhance profitability and prospects. The strategic discussions have focused on, among other things, the business environment facing financial institutions generally and Legacy, in particular, as well as conditions and ongoing consolidation in the financial services industry. In contemplating its strategic objectives, the board of directors of Legacy found it important to consider potential merger opportunities to maximize shareholder value while at the same time continuing to provide quality products and services to its local communities and customers.
Legacy engaged Hovde on January 30, 2019 to explore strategic alternatives. Throughout 2019 and 2020, a Hovde representative continued to provide management of Legacy with periodic updates on market conditions, the merger and acquisition landscape, valuations, buyers, and the financial institutions sales process and other information and continued to discuss the interest of Legacy in exploring strategic combinations in the best interests of Legacy and its shareholders.
In January 2020, Seacoast was approached by Hovde regarding its interest in a potential merger with Legacy. In February 2020, Seacoast signed a non-disclosure agreement with Legacy.
In February 2020 Hovde and representatives of Legacy populated a virtual data room with recent financial information and other relevant information related to Legacy and prepared and updated confidential information memorandum on Legacy. In late February and March 2020, Hovde contacted twenty-five prospects, with eight such parties expressing an interest in obtaining additional information regarding a potential transaction with Legacy. Five prospects, including Seacoast executed nondisclosure agreements and were provided access to the virtual data room. During March of 2020, interested parties conducted due diligence and management meetings were set up with several prospective buyers.
On March 12, 2020, Seacoast entered into an engagement agreement with of Piper Sandler & Co. to serve as its financial advisor in connection with the proposed transaction. Shortly thereafter, the parties paused the conversations relating to a potential transaction due to the onset of the COVID-19 pandemic and the related business and market disruptions. In light of the pandemic, Legacy focused its attention on supporting its communities through the SBA Paycheck Protection Program, cautiously expanding the balance sheet. This allowed Legacy to increase its commercial relationships and manage the risk of its loan portfolio.
In December 2020, management of Legacy instructed Hovde to resume discussions with representatives of Seacoast in an effort to negotiate a transaction. The parties resumed discussions of a potential transaction in early January 2021, with Mr. Shaffer and Mr. Bedley meeting in West Palm Beach. On January 5, 2021, the parties entered into a confidentiality agreement. Legacy then provided updated documents to the data room and Seacoast began conducting due diligence on Legacy.
On February 5, 2021, after discussions between Mr. Shaffer and Mr. Bedley, Seacoast presented a proposed exchange ratio of 0.1703 shares of Seacoast common stock for each share of Legacy common stock, which represented a $5.50 per share price based on Seacoast’s February 4, 2021 closing price. A letter of intent was signed on February 9, 2021, granting Seacoast exclusivity to continue its due diligence review and for the parties to consider, discuss and negotiate any definitive agreement and related agreements until the earlier of March 31, 2021 or the date on which the parties agreed to discontinue discussions. The parties engaged in negotiations over the proposed exchange ratio, finally agreeing to 0.1703 shares of Seacoast common stock for each share of Legacy common stock.
During the remainder of February and March 2021, Seacoast conducted a formal due diligence review of Legacy, which included credit review and management meetings, and the parties began to discuss and negotiate the terms of a definitive agreement.
During February and March 2021, Saltmarsh, Cleaveland & Gund, P.C. conducted a reverse due diligence review of Seacoast on behalf of Legacy.
 
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In March 2021, additional discussions were held between Seacoast and Legacy representatives concerning the negotiation of definitive transaction agreements, and the parties exchanged and discussed drafts of agreements. During the third week of March 2021, representatives of Legacy and Seacoast continued to negotiate and finalize the definitive transaction agreements, including the merger agreement, voting agreements for directors, noncompetition agreements for directors and officers, claims letters for directors, and agreements with executive officers of Legacy.
On March 18, 2021, Legacy’s board of directors met in special session to review and consider the merger agreement and the transactions and agreements contemplated by it. On March 22, 2021, the board of directors of Legacy held a special meeting with representatives of Hovde and legal counsel to issue final approval of the merger agreement and the merger. The directors reviewed with their advisors the terms of the merger agreement and the merger, and other relevant information. At the meeting, a Hovde representative reviewed with the Legacy board Hovde’s financial analysis summarized below under “— Opinion of Legacy’s Financial Advisor” and delivered to the Legacy board an oral opinion of Hovde, which was later confirmed in writing and is attached to this proxy statement/prospectus as Appendix B, that, based upon and subject to the various considerations set forth in such opinion, the value of the merger consideration to be received by shareholders of Legacy in the merger pursuant to the merger agreement is fair from a financial point of view. In addition, legal counsel reviewed with the directors of Legacy the most recent draft of the proposed merger agreement and related transaction documents, and the legal standards applicable to the Legacy board’s decisions and actions with respect to the proposed transaction. Following a discussion of these matters and other factors listed under “— Recommendation of the Legacy Board of Directors and reasons for the Merger” below, the board of directors of Legacy concluded that the merger of Legacy with and into Seacoast National Bank were fair to and in the best interest of Legacy and its shareholders and unanimously approved and adopted the merger agreement and the transactions contemplated thereby and recommended the Legacy’s shareholders approve the merger agreement.
On March 23, 2021, Seacoast’s board of directors met in special session to review and consider the merger agreement and the transactions and agreements contemplated by it. The management team made a presentation relating to the strategic and financial considerations and rationale of the transaction. Further to this discussion, a representative of Piper Sandler & Co. reviewed the principal terms of the proposed transaction and the financial impacts of the merger on Seacoast and provided comparable transaction analysis for Florida and national bank mergers. Management presented on the loan diligence completed on Legacy’s loan portfolio. At the meeting, Alston & Bird reviewed for the directors the terms and conditions of the merger agreement, the merger and the various agreements to be signed in connection with the merger agreement, and engaged in discussions with the board members on such matters. After additional discussion and deliberation, the Seacoast board of directors adopted and approved the draft merger agreement, including the exchange ratio, and the transactions and agreements contemplated by it (subject to no material terms or conditions being revised) and determined that the merger agreement and the transactions contemplated by it were in the best interests of Seacoast and its shareholders.
On March 23, 2021, the parties signed the merger agreement and the related agreements and a press release announcing the transaction was issued. A conference call to discuss the merger was held the next morning on March 24, 2021.
In response to feedback received from the OCC, each of Seacoast and Legacy approved the merger agreement as amended and restated on June 14, 2021. The parties executed the amended and restated merger agreement on June 14, 2021, following receipt of all required corporate approvals.
Legacy’s Reasons for the Merger and Recommendation of the Legacy Board of Directors
The proximity of SNB and Legacy and the logical geographic scope of the combined bank should position the combined bank for continued organic strategic growth in the combined market area. SNB has an established presence on the Atlantic coast of Southern Florida. This merger creates an excellent opportunity to strengthen SNB’s presence along the Southern Atlantic Coast in Florida and continue expanding in key markets. Joining with SNB will provide Legacy’s customers a broader array of products and services across a larger footprint and create value for Legacy’s employees, customers, and community. SNB operates 48 traditional offices which stretch from Ft. Lauderdale, Boca Raton and West Palm Beach north through the Daytona Beach area, into Orlando and Central Florida and the adjacent Tampa market, and west to Okeechobee and surrounding counties.
 
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Legacy’s board deliberated and unanimously approved the merger agreement at a board meeting held on March 22, 2021. In reaching its determination to approve the merger agreement and the transactions contemplated thereby, including the merger, Legacy’s board consulted with Legacy’s management, financial and legal advisors and considered a number of factors, including a fairness opinion presented by Hovde. The following is a discussion of information and factors considered by Legacy’s board in reaching this determination. This discussion is not intended to be exhaustive but includes the material factors considered by Legacy’s board. In the course of its deliberations with respect to the merger, Legacy’s board discussed the anticipated impact of the merger on Legacy, Legacy’s shareholders, and the communities that Legacy serves.
Legacy’s board believes that the merger is in the best interest of Legacy and its shareholders. Accordingly, Legacy’s board has unanimously approved the merger agreement and the transactions contemplated thereby, including the merger, and unanimously recommends that Legacy’s shareholders vote “FOR” approval of the merger agreement and the transactions contemplated thereby.
In approving the merger agreement and the transactions contemplated thereby, including the merger, Legacy’s board consulted with Hovde with respect to the financial aspects of the merger and the fairness of the merger consideration, from a financial point of view, to the holders of shares of Legacy common stock and with its outside legal counsel with respect to its legal duties and the terms of the merger agreement. The Legacy board believes that combining with Seacoast will create a stronger and more diversified organization that will provide significant benefits to Legacy’s shareholders and customers alike.
The terms of the merger agreement, including the consideration to be paid to Legacy’s shareholders, were the result of arm’s-length negotiations between representatives of Legacy and representatives of Seacoast. In arriving at its determination to approve the merger agreement and the transactions contemplated thereby, Legacy’s board considered a number of factors, including the following:

the value of the consideration to be received by the shareholders of Legacy relative to the book value and earnings per share of Legacy common stock;

the likelihood of success of the combined company in executing on its business strategy;

the financial terms of recent business combinations in the financial services industry, particularly in the Southeast, and a comparison of multiples of selected combinations with the terms of the proposed transaction with Seacoast;

the historical price performance of Seacoast common stock;

the alternatives to the merger, including remaining an independent institution;

the competitive and regulatory environment for financial institutions generally;

the business prospects for Legacy going forward, as projected by management and viewed in light of the changing economic and competitive landscape;

the fact that the merger presents a liquidity opportunity for Legacy’s shareholders;

the fact that the merger is structured as a reorganization under Section 368(a) of the Internal Revenue Code;

that the exchange ratio is fixed so that if the market price of Seacoast common stock increases, the value of the consideration payable to shareholders of Legacy will be increased proportionately;

the opinion of Hovde that the consideration to be received by Legacy’s shareholders as a result of the merger is fair, from a financial point of view, as well as the analysis provided by Hovde;

the social, economic, and legal impact of the merger on Legacy’s employees, suppliers, and customers, as well as the communities served by Legacy; and

the economy of the State of Florida and the nation.
In addition to the foregoing factors, the board of Legacy also identified and considered a variety of uncertainties and risks concerning the merger, including, but not limited to, the following:

the risk that the merger may not be consummated or that the closing may be unduly delayed, including as a result of factors outside either party’s control;
 
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the potential risk of diverting management attention and resources from the operation of Legacy’s business and towards the completion of the merger and the possibility of employee attrition or adverse effects on client and business relationships as a result of the announcement and pendency of the merger;

that under the terms of the merger agreement, subject to certain exceptions, Legacy cannot solicit competing acquisition proposals;

the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating Legacy’s business, operations and workforce with those of Seacoast and the risk of not realizing all of the anticipated benefits of the merger or not realizing them in the expected timeframe;

the possibility that Legacy will have to pay a $4.6 million termination fee to Seacoast if the merger agreement is terminated under certain circumstances; and

that the exchange ratio is fixed so that if the market price of Seacoast common stock falls, the value of the consideration payable to shareholders of Legacy will be reduced proportionately.
The foregoing discussion of information and factors considered by Legacy’s board of directors is not intended to be exhaustive but includes the material factors considered by the board of Legacy in approving the merger agreement and the transactions contemplated thereby, including the merger. In reaching its determination, Legacy’s board of directors did not assign any relative or specific weight to different factors and individual directors may have given different weight to different factors. Based on its collective consideration of all of the factors described above, the Legacy’s board of directors concluded that the merger is in the best interest of Legacy and its shareholders and, therefore, the board of Legacy unanimously approved the merger agreement and the transactions contemplated thereby, including the merger. Certain members of the board of directors of Legacy, along with certain officers and 5% shareholders of Legacy have entered into a voting agreement with Seacoast whereby they have agreed to vote their shares of Legacy common stock in favor of the merger. On the record date, these shareholders represented 6,362,995 shares (or approximately 40.3%) of the Legacy common stock entitled to vote at the Legacy annual meeting.
LEGACY’S BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER.
Seacoast’s Reasons for the Merger
As a part of Seacoast’s growth strategy, Seacoast routinely evaluates opportunities to acquire financial institutions. The acquisition of Legacy is consistent with Seacoast’s expansion strategy. Seacoast’s board of directors and senior management reviewed the business, financial condition, results of operations and prospects for Legacy, the market condition of the market area in which Legacy conducts business, the compatibility of the management and the proposed financial terms of the merger. In addition, management of Seacoast believes that the merger will expand Seacoast’s presence in the attractive Broward and Palm Beach counties, provide opportunities for future growth and provide the potential to realize cost savings. Seacoast’s board of directors also considered the financial condition and valuation for both Legacy and Seacoast as well as the financial and other effects the merger would have on Seacoast’s shareholders. The board considered the fact that the acquisition would increase Seacoast’s existing footprint in Broward and Palm Beach counties, that market overlap would drive cost savings, and that cultural similarities supported the probability of an efficient, low risk integration with minimal customer attrition. In addition, the board of directors also considered the analysis and presentations from its outside financial advisor, Piper Sandler & Co.
While management of Seacoast believes that revenue opportunities will be achieved and costs savings will be obtained following the merger, Seacoast has not quantified the amount of enhancements or projected the areas of operation in which such enhancements will occur.
In view of the variety of factors considered in connection with its evaluation of the merger, the Seacoast board did not find it useful to and did not attempt to quantify, rank or otherwise assign relative weights to factors it considered. Further, individual directors may have given differing weights to different factors. In addition, the Seacoast board did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate
 
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determination. Rather, the board conducted an overall analysis of the factors it considered material, including thorough discussions with, and questioning of, Seacoast’s management.
Opinion of Legacy’s Financial Advisor
The fairness opinion and a summary of the underlying financial analyses of Legacy’s financial advisor, Hovde Group, LLC, or Hovde, are described below. The summary and description contains projections, estimates and other forward-looking statements about the future earnings or other measures of the future performance of Legacy. The projections were based on numerous variables and assumptions, which are inherently uncertain, including factors related to general economic and competitive conditions. Accordingly, actual results could vary significantly from those set forth in the projections. You should not rely on any of these statements as having been made or adopted by Legacy, Seacoast, or SNB. You should review the copy of the fairness opinion, which is attached to this proxy statement/prospectus as Appendix B.
Hovde acted as Legacy’s financial advisor in connection with the merger. Hovde is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with Legacy and its operations. As part of its investment banking business, Hovde is continually engaged in the valuation of businesses and their securities in connection with, among other things, mergers and acquisitions. Hovde has experience in, and knowledge of, banks, thrifts and their respective holding companies and is familiar with Legacy. Legacy’s Board of Directors selected Hovde to act as Legacy’s financial advisor in connection with the merger on the basis of the firm’s reputation and expertise in transactions such as the merger.
Hovde reviewed the financial aspects of the proposed merger with Legacy’s Board of Directors, and on March 22, 2021, delivered a written opinion to Legacy’s Board of Directors that, subject to the review, assumptions and limitations set forth in the opinion, the total merger value to be received by the shareholders and option holders of Legacy in the merger pursuant to the merger agreement is fair, from a financial point of view, to the holders of Legacy common stock. In requesting Hovde’s advice and opinion, no limitations were imposed by Legacy upon Hovde with respect to the investigations made or procedures followed by Hovde in rendering its opinion.
The full text of Hovde’s written opinion is included in this proxy statement/prospectus as Appendix B and is incorporated herein by reference. You are urged to read the opinion in its entirety for a description of the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Hovde. The summary of Hovde’s opinion included in this proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion.
Hovde’s opinion was directed to Legacy’s Board of Directors and addresses only the fairness of the total merger value to be received by the shareholders and option holders of Legacy pursuant to the merger agreement in connection with the merger. Hovde did not opine on any individual stock, cash, option, or other components of consideration payable in connection with the merger. Hovde’s opinion did not constitute a recommendation to Legacy as to whether or not Legacy should enter into the merger agreement or to any shareholders of Legacy as to how such shareholders should vote at any meetings of shareholders called to consider and vote upon the merger. Hovde’s opinion does not address the underlying business decision to proceed with the merger or the fairness of the amount or nature of the compensation, if any, to be received by any of the officers, directors or employees of Legacy relative to the amount of consideration to be paid with respect to the merger. Hovde’s opinion should not be construed as implying that the total merger value is necessarily the highest or best price that could be obtained by Legacy in a sale, merger, or combination transaction with a third party. Other than as specifically set forth in the opinion, Hovde is not expressing any opinion with respect to the terms and provisions of the merger agreement or the enforceability of any such terms or provisions. Hovde’s opinion is not a solvency opinion and does not in any way address the solvency or financial condition of Legacy or Seacoast. Hovde’s opinion was approved by Hovde’s fairness opinion committee.
Legacy engaged Hovde on January 30, 2019, to serve as a financial advisor to Legacy in connection with a potential transaction and to issue a fairness opinion to Legacy’s Board of Directors in connection with a potential strategic transaction. Pursuant to Legacy’s engagement agreement with Hovde, Hovde received from Legacy a fairness opinion fee of $100,000 due upon the delivery of the fairness opinion to Legacy and to be
 
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fully credited one time against any completion fee due Hovde. Upon the consummation of the merger, Hovde will receive a completion fee based on the total merger value, less the fairness opinion fee. Based upon Hovde’s assumption for purposes of its analysis and opinion that the total merger value will be $111,212,341 (as set forth below), the completion fee due Hovde upon the consummation of the merger will be approximately $1,278,942, less the $100,000 credit for the fairness opinion fee, resulting in a net completion fee due Hovde of approximately $1,178,942. In addition to Hovde’s fees, and regardless of whether the merger is consummated, Legacy has agreed to reimburse Hovde for certain of its reasonable out-of-pocket expenses. Legacy has also agreed to indemnify Hovde and its affiliates for certain liabilities that may arise out of Hovde’s engagement. In addition, as the Legacy board was aware, a senior member of the team of investment banking professionals of Hovde advising Legacy in connection with the merger owns 150,000 shares of Legacy common stock. Such member will receive the same consideration for such shares in connection with the merger as other shareholders of Legacy.
Other than in connection with this present engagement, during the two years preceding the date of its opinion, Hovde has not provided investment banking or financial advisory services to Legacy. During the two years preceding the date of its opinion Hovde has not provided any investment banking or financial advisory services to Seacoast for which it received a fee. Hovde or its affiliates may presently or in the future seek or receive compensation from Seacoast in connection with future transactions, or in connection with potential advisory services and corporate transactions, although to Hovde’s knowledge none are expected at this time. In the ordinary course of its business as a broker/dealer, Hovde may from time to time purchase securities from, and sell securities to, Legacy or Seacoast or their affiliates. Except for the foregoing, during the two years preceding the date of this opinion there have not been, and there currently are no mutual understandings contemplating in the future, any material relationships between Hovde and Legacy or Seacoast.
Hovde included in its opinion a summary of selected terms of the merger agreement. This summary is described below and is based on a draft of the merger agreement dated March 18, 2021 provided to Hovde by Legacy. The description below is included for informational purposes only as part of the summary of Hovde’s opinion and has not been updated based on a review of the final merger agreement. Capitalized terms not otherwise defined in the following summary and description have the meanings as set forth in the March 18, 2021 draft merger agreement provided to Hovde by Legacy.
In its opinion, Hovde noted the following: (i) pursuant to the merger agreement, at the Effective Time, Legacy 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; (ii) SNB shall be the surviving bank resulting from the merger and the separate existence of Legacy shall thereupon cease; (iii) 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 merger; (iv) the surviving bank shall be considered the same business and corporate entity as each constituent bank with all the rights, powers and duties of each constituent bank; (v) it is the intention of the parties to the merger agreement that the merger, for federal income tax purposes, shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code and that the merger agreement shall constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Internal Revenue Code; and (vi) the business purpose of the merger is to combine two financial institutions to create a strong commercial banking franchise.
Hovde also noted the following in its opinion: (i) pursuant to the merger agreement, at the Effective Time, in each case subject to Section 1.4(d) and excluding Excluded Shares and subject to certain adjustments set forth in the merger agreement, by virtue of the merger and without any action on the part of the parties or the holder thereof, each share of Legacy common stock that is issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive, subject to the terms of the merger agreement, the number of shares of Seacoast common stock that is equal to the exchange ratio; provided, however, that in the event the conditions set forth in Section 5.2(j) of the merger agreement are not satisfied, Seacoast shall have the option to adjust the merger consideration downward by an amount that equals the difference between Legacy’s Consolidated Tangible Shareholders’ Equity and the Target Consolidated Tangible Shareholders’ Equity and waive the satisfaction of such condition set forth in Section 5.2(j); and (ii)at least ten (10) days prior to the closing date, Legacy and Seacoast shall agree on a schedule setting forth the expected Legacy Consolidated Tangible Shareholders’ Equity amount as of the closing date. The consideration which all of
 
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Legacy shareholders are entitled to receive pursuant to the above provisions is collectively referred to as the “aggregate merger consideration” in the sections of this proxy statement/prospectus describing Hovde’s analyses and opinion.
Hovde also noted in its opinion that (i) the obligations of Seacoast to fulfill the terms of the merger agreement and consummate the merger and the other transactions contemplated therein are subject to the satisfaction of the conditions set forth in Section 5.2 of the merger agreement; (ii) Section 5.2(j) of the merger agreement stipulates the requirement that Legacy’s Consolidated Tangible Shareholders’ Equity (as defined in Section 7.1 of the merger agreement) as of the close of business on the fifth business day prior to the closing date shall be an amount not less than the Target Consolidated Tangible Shareholders’ Equity, and Legacy’s general allowance for loan and lease losses shall be an amount not less than 0.75% of total loans and leases outstanding excluding those made pursuant to the Paycheck Protection Program; (iii) the Target Consolidated Shareholders’ Equity is defined as being $58.2 million; and (iv) Seacoast shall have the option to adjust the merger consideration downward by an amount that equals the difference between Legacy’s Consolidated Tangible Shareholders’ Equity and the Target Consolidated Tangible Shareholders’ Equity and waive the satisfaction of such condition set forth in Section 5.2(j) of the merger agreement.
In addition, Hovde noted in its opinion that (i) at the Effective Time, each Legacy Option shall, by virtue of the merger, automatically cease to be outstanding, and, in consideration therefor, Seacoast shall grant to each holder of Legacy Options, as of the Effective Time, an option to purchase shares of Seacoast common stock pursuant to the Seacoast Incentive Plan (each, a “Substitute Seacoast Option”), on the same terms and conditions as applicable to each such Legacy Option as in effect immediately prior to the Effective Time, except that (A) the number of shares of Seacoast common stock subject to such Substitute Seacoast Option shall equal the product of (x) the number of shares of Legacy common stock subject to such Legacy Option immediately prior to the Effective Time, multiplied by (y) the exchange ratio, rounded down to the nearest whole share, and (B) the per share exercise price for the shares of Seacoast common stock issuable upon exercise of such Substitute Seacoast Option shall equal the quotient determined by dividing (x) the exercise price per share of Legacy common stock at which such Legacy Option was exercisable immediately prior to the Effective Time by (y) the Exchange Ratio, rounded up to the nearest whole cent; (ii) no Legacy Equity Award shall be outstanding as of the Effective Time, and no obligations to issue Legacy Equity Awards shall exist following the Effective Time; (iii) prior to the Effective Time, Legacy shall take all actions necessary to effect the treatment of Legacy Options as provided in Section 1.6 of the merger agreement, to terminate Legacy Stock Plans as of the Effective Time, and to cause the provisions in any other Legacy Benefit Plan providing for the issuance, transfer or grant of any capital stock of Legacy or any interest in respect of any capital stock of Legacy to terminate and be of no further force and effect as of the Effective Time.
Additionally, Hovde noted that the merger agreement may be terminated at any time prior to the Effective Time as set forth in Section 6.1 of the merger agreement including among other termination provisions (a) by mutual consent of Seacoast and Legacy; (b) by either party in the event that (i) any Regulatory Consent required to be obtained from any governmental authority has been denied or (ii) Legacy Shareholder Approval has not been obtained by reason of the failure to obtain the required vote at the Legacy shareholders’ meeting where the merger agreement was presented to such shareholders for approval and voted upon; (c) by either party in the event that the merger has not been consummated by October 31, 2021; (d) by Seacoast in the event that (i) Legacy has withdrawn, qualified or modified the Legacy directors’ recommendation in a manner adverse to Seacoast or shall have resolved to do any of the foregoing, (ii) Legacy has failed to substantially comply with its obligations under Sections 4.5 or 4.12, or (iii) the Board of Directors of Legacy has recommended, endorsed, accepted or agreed to an Acquisition Proposal; (e) by Legacy in the event that (i) the Board of Directors of Legacy 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 (ii) neither Legacy nor any of its Representatives has failed to comply in all material respects with Section 4.12; and (f) by Seacoast if holders of more than five percent (5.0%) in the aggregate of the outstanding shares of Legacy common stock shall have voted such shares against the merger agreement or the merger at any meeting called for the purpose of voting thereon. Hovde further noted that in the event that the merger agreement is terminated pursuant to certain conditions of Section 6.1, including termination if Legacy 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 within twelve (12) months following such termination an Acquisition Proposal is consummated or a definitive
 
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agreement or letter of intent is entered into by Legacy with respect to an Acquisition Proposal, Legacy shall pay Seacoast a termination fee of $4,600,000.
With Legacy’s knowledge and consent and for purposes of its analysis and opinion, Hovde assumed that (i) the closing price of Seacoast common stock on March 19, 2021 is $38.24 per share; (ii) the exchange ratio is 0.1703 and has not been adjusted as provided in the merger agreement; (iii) there has been no downward adjustment of the merger consideration due to Legacy’s Consolidated Tangible Shareholders’ Equity being less than the Target Consolidated Tangible Shareholders’ Equity; and (iv) there are 15,772,897 shares of Legacy common stock outstanding as of March 19, 2021, and thereby, the value of the aggregate merger consideration is $103,335,204. Additionally, Hovde assumed that (i) there are Legacy Options outstanding as of March 19, 2021 to purchase 2,128,754 shares of Legacy common stock; (ii) the weighted average exercise price per share of Legacy’s options as of March 19, 2021 is $2.85 per share of Legacy common stock; and (iii) there would be issued 362,527 Substitute Seacoast Options to purchase Seacoast common stock at $16.74 per Seacoast share, and thereby, the total Legacy Option Value is $7,877,136. The total merger value is equal to the sum of the value of the aggregate merger consideration of $103,335,204 plus the value of the total Legacy option value of $7,877,136, and therefore for purposes of its analysis and opinion, Hovde assumed that the total merger value is $111,212,341.
The following is a summary of the analyses performed and matters considered by Hovde in connection with its fairness opinion. The summary set forth below does not purport to be a complete description of all of the analyses performed by Hovde in rendering its opinion, but it does summarize all of the material analyses performed by Hovde. During the course of its engagement and for the purposes of its fairness opinion, Hovde:
(i)
reviewed a draft of the merger agreement dated March 18, 2021 as provided to Hovde by Legacy;
(ii)
reviewed unaudited financial statements for Legacy for the twelve month period ended December 31, 2020;
(iii)
reviewed certain historical annual reports of Legacy, including Legacy’s audited annual report for the years ended December 31, 2019 and 2018;
(iv)
reviewed certain historical publicly available business and financial information concerning Legacy;
(v)
reviewed certain internal financial statements and other financial and operating data concerning Legacy;
(vi)
reviewed financial projections prepared by certain members of senior management of Legacy;
(vii)
discussed with certain members of senior management of Legacy the business, financial condition, results of operations and future prospects of Legacy; the history and past and current operations of Legacy; and Legacy’s and Seacoast’s assessment of the rationale for the merger;
(viii)
reviewed and analyzed materials detailing the merger prepared by Seacoast and Legacy;
(ix)
assessed current general economic, market and financial conditions;
(x)
reviewed the terms of recent merger, acquisition and control investment transactions, to the extent publicly available, involving financial institutions and financial institution holding companies that Hovde considered relevant;
(xi)
took into consideration Hovde’s experience in other similar transactions and securities valuations as well as Hovde’s knowledge of the banking and financial services industry;
(xii)
reviewed certain publicly available financial and stock market data relating to selected public companies that Hovde deemed relevant to its analysis; and
(xiii)
performed such other analyses and considered such other factors as Hovde deemed appropriate.
Hovde assumed, without investigation, that there have been, and from the date of its opinion through the Effective Time will be, no material changes in the financial condition and results of operations of Legacy or Seacoast since the date of the latest financial information described above. Hovde further assumed, without
 
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independent verification, that the representations and financial and other information included in the merger agreement and all other related documents and instruments that are referred to therein or were otherwise provided to Hovde by Legacy and Seacoast are true and complete. Hovde relied upon the management of Legacy as to the reasonableness and achievability of the financial forecasts, projections and other forward-looking information provided to Hovde by Legacy and Seacoast and Legacy’s professionals, and Hovde assumed such forecasts, projections and other forward-looking information were reasonably prepared by Legacy, Seacoast and Legacy’s professionals on a basis reflecting the best currently available information and Legacy’s, Seacoast’s and Legacy’s professionals judgments and estimates. Hovde assumed that such forecasts, projections and other forward-looking information would be realized in the amounts and at the times contemplated thereby, and Hovde does not assume any responsibility for the accuracy or reasonableness thereof. Hovde was authorized by Legacy to rely upon such forecasts, projections and other information and data, and Hovde expresses no view as to any such forecasts, projections or other forward-looking information or data, or the bases or assumptions on which they were prepared.
In performing its review, Hovde assumed and relied upon the accuracy and completeness of all of the financial and other information that was available to Hovde from public sources, that was provided to Hovde by Legacy or Seacoast or their respective representatives or that was otherwise reviewed by Hovde for purposes of rendering its opinion. Hovde further relied on the assurances of the respective managements of Legacy and Seacoast that they were not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Hovde was not asked to undertake, and did not undertake, an independent verification of any of such information, and Hovde does not assume any responsibility or liability for the accuracy or completeness thereof. Hovde assumed that each party to the merger agreement would advise Hovde promptly if any information previously provided to Hovde became inaccurate or was required to be updated during the period of its review.
Hovde is not expert in the evaluation of loan and lease portfolios for purposes of assessing the adequacy of the allowances for losses with respect thereto. Hovde assumed that such allowances for Legacy and Seacoast are, in the aggregate, adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. Hovde was not requested to make, and did not make, an independent evaluation, physical inspection or appraisal of the assets, properties, facilities, or liabilities (contingent or otherwise) of Legacy or Seacoast, the collateral securing any such assets or liabilities, or the collectability of any such assets, and Hovde was not furnished with any such evaluations or appraisals; nor did Hovde review any loan or credit files of Legacy or Seacoast.
Hovde undertook no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities to which Legacy or Seacoast was or is a party or may be subject, and Hovde’s opinion made no assumption concerning, and therefore does not consider, the possible assertion of claims, outcomes or damages arising out of any such matters. Hovde also assumed, with Legacy’s consent, that Legacy and Seacoast were not parties to any material pending transaction, including without limitation any financing, recapitalization, acquisition or merger, divestiture or spin-off, other than the merger contemplated by the merger agreement.
Hovde relied upon and assumed, with Legacy’s consent and without independent verification, that the merger will be consummated substantially in accordance with the terms set forth in the merger agreement, without any waiver of material terms or conditions by Legacy, Seacoast or any other party to the merger agreement and that the final merger agreement will not differ materially from the draft Hovde reviewed. Hovde assumed that the merger will be consummated in compliance with all applicable laws and regulations. Legacy advised Hovde that they were not aware of any factors that would impede any necessary regulatory or governmental approval of the merger. Hovde assumed that the necessary regulatory and governmental approvals as granted would not be subject to any conditions that would be unduly burdensome on Legacy or Seacoast or would have a material adverse effect on the contemplated benefits of the merger.
Hovde’s opinion does not consider, include or address: (i) any legal, tax, accounting, or regulatory consequences of the merger on Legacy or its shareholders; (ii) any advice or opinions provided by any other advisor to the Board of Directors of Legacy or Legacy; (iii) any other strategic alternatives that might be available to Legacy; or (iv) whether Seacoast has sufficient cash or other sources of funds to enable it to pay the consideration contemplated by the merger.
 
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Hovde’s opinion was based solely upon the information available to Hovde and described above, and the economic, market and other circumstances as they existed as of the date thereof. Events occurring and information that becomes available after the date thereof could materially affect the assumptions and analyses used in preparing its opinion. Hovde has not undertaken to update, revise, reaffirm or withdraw its opinion or to otherwise comment upon events occurring or information that becomes available after the date thereof.
The following is a summary of the material analyses prepared by Hovde and delivered to Legacy’s Board of Directors on March 22, 2021 in connection with the delivery of its fairness opinion. This summary is not a complete description of all the analyses underlying the fairness opinion or the presentation prepared by Hovde, but it summarizes the material analyses performed and presented in connection with such opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis, and the application of those methods to the particular circumstances of the contemplated Merger. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Hovde did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. The financial analyses summarized below include information presented in tabular format. The analyses and the summary of the analyses must be considered as a whole, and selecting portions of the analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying the analyses and opinion of Hovde. The tables alone are not a complete description of the financial analyses.
Market Approach — Comparable Merger and Acquisition Transactions.   As part of its analysis, Hovde reviewed publicly available information related to two comparable groups (a Regional Group” and a “Nationwide Group”) of select acquisition transactions of banks. The Regional Group consisted of acquisition transactions where targets were headquartered in Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia announced since January 1, 2018, in which the targets’ total assets were between $300 million and $1.0 billion, last-twelve-months return on average assets was greater than 0.75% and nonperforming assets to total assets was less than 1.50%. The Nationwide Group consisted of acquisition transactions of banks in the United States announced since January 1, 2018, in which the targets’ total assets were between $400 million and $750 million, last-twelve-months return on average assets was between 0.90% and 1.50%, nonperforming assets to total assets was less than 1.50%, and tangible equity to tangible assets was greater than 9.00%. In each case, for which financial information was available, no transaction that fit the above selection criteria was excluded. Information for the target institutions was based on balance sheet data as of, and income statement data for, the twelve months preceding the most recent quarter prior to announcement of the transactions. The resulting two groups consisted of the following precedent transactions (14 transactions for the Regional Group and 16 transactions for the Nationwide Group):
Regional Group:
Buyer (State)
Target (State)
BancorpSouth Bank (MS)
Seacoast Banking Corporation of Florida (FL)
First Bancshares, Inc. (MS)
Reliant Bancorp, Inc. (TN)
Banco de Credito e Inversiones SA
Community First Bancshares, Inc. (GA)
Professional Holding Corp. (FL)
First Financial Banc Corporation (AR)
First Bancshares, Inc. (MS)
BancorpSouth Bank (MS)
First Citizens BancShares, Inc. (NC)
CapStar Financial Holdings, Inc. (TN)
Seacoast Banking Corporation of Florida (FL)
National Commerce Corporation (AL)
FNS Bancshares, Inc. (AL)
Fourth Street Banking Company (FL)
Southwest Georgia Financial Corporation (GA)
First Advantage Bancorp (TN)
Executive Banking Corporation (FL)
ABB Financial Group, Inc. (GA)
Marquis Bancorp, Inc. (FL)
First National Corporation of Wynne (AR)
First Florida Bancorp, Inc. (FL)
Summit Financial Enterprises, Inc. (FL)
Biscayne Bancshares, Inc. (FL)
Athens Bancshares Corporation (TN)
First Green Bancorp, Inc. (FL)
Landmark Bancshares, Inc. (GA)
 
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Nationwide Group:
Buyer (State)
Target (State)
LINKBANCORP, Inc. (PA)
BancorpSouth Bank (MS)
Norwood Financial Corp. (PA)
Fidelity D & D Bancorp, Inc. (PA)
Reliant Bancorp, Inc. (TN)
Community Bank System, Inc. (NY)
Glacier Bancorp, Inc. (MT)
Central Bancompany, Inc. (MO)
South Plains Financial, Inc. (TX)
Wintrust Financial Corporation (IL)
First Bancshares, Inc. (MS)
ChoiceOne Financial Services, Inc. (MI)
German American Bancorp, Inc. (IN)
OceanFirst Financial Corp. (NJ)
Seacoast Banking Corporation of Florida (FL)
CapStar Financial Holdings, Inc. (TN)
GNB Financial Services, Inc. (PA)
National United Bancshares, Inc. (TX)
UpState New York Bancorp, Inc. (NY)
MNB Corporation (PA)
First Advantage Bancorp (TN)
Steuben Trust Corporation (NY)
State Bank Corp. (AZ)
Platte County Bancshares, Inc. (MO)
West Texas State Bank (TX)
SBC, Incorporated (IL)
First Florida Bancorp, Inc. (FL)
County Bank Corp (MI)
Citizens First Corporation (KY)
Capital Bank of New Jersey (NJ)
First Green Bancorp, Inc. (FL)
Athens Bancshares Corporation (TN)
For each precedent transaction, Hovde compared the implied ratio of the total merger value to certain financial characteristics of Legacy as follows:

the multiple of the total merger value to the acquired company’s last twelve months, or “LTM,” net earnings per share (the “Price-to-LTM Earnings Multiple”);

the multiple of the total merger value to the acquired company’s common tangible book value (the “Price-to-Common Tangible Book Value Multiple”);

the multiple of the value of the total merger value to the acquired company’s adjusted common tangible book value (the “Price-to-Adjusted Common Tangible Book Value Multiple”); and

the multiple of the difference between the total merger value and the acquired company’s common tangible book value to the acquired company’s core deposits (the “Premium-to-Core Deposits Multiple”).
The results of the analysis are set forth in the table below. Transaction multiples for the merger were based upon the total merger value assumed by Hovde of $111,212,341 and were based on December 31, 2020 financial results for Legacy.
Price-to-LTM
Earnings Multiple
Price-to-Common
Tangible Book
Value Multiple
Price-to-Adjusted
Common Tangible
Book Value
Multiple(1)
Premium-to-Core
Deposits
Multiple(1)(2)
Assumed Total Merger Value
18.8x 194.9% 226.9% 17.7%
Precedent Transactions Regional Group:
Median
15.3x 173.2% 190.2% 10.4%
Minimum
11.2x 152.6% 152.8% 6.52%
Maximum
22.8x 212.5% 243.8% 16.3%
Precedent Transactions Nationwide Group:
Median
15.6x 167.7% 183.4% 10.6%
Minimum
11.4x 131.4% 143.0% 4.29%
Maximum
22.8x 212.7% 243.8% 19.0%
 
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(1)
Price-to-Adjusted Common Tangible Book Value equals the adjusted purchase price divided by core capital where: (a) core capital equals total tangible assets multiplied by 8%; (b) excess capital equals total common tangible book value less core capital; and (c) adjusted purchase price equals the total merger value less excess capital (assumes dollar-for-dollar payment on excess capital).
(2)
Represents the premium of the total merger value over Common Tangible Book Value, expressed as a percentage of Core Deposits. Core deposits are defined as total deposits less foreign deposits and time deposit accounts greater than $100,000.
Using publicly available information, Hovde compared the financial performance of Legacy with that of the median of the precedent merger and acquisition transactions from both the Regional and Nationwide Groups. The performance highlights are based on December 31, 2020 financial results of Legacy.
Tangible
Equity/
Tangible
Assets
Core
Deposits(1)
LTM
ROAA(2)
LTM
ROAE(2)
Efficiency
Ratio
NPAs/
Assets(3)
LLR/
NPLs(4)
Legacy
10.7% 70.9% 1.15% 10.9% 55.7% 0.32% 188.7%
Precedent Transactions  –  Regional Group Median: 10.3% 75.6% 1.13% 11.0% 62.2% 0.49% 182.5%
Precedent Transactions  –  Nationwide Group Median: 10.1% 86.6% 1.12% 10.8% 63.5% 0.43% 126.8%
(1)
Core deposits exclude foreign deposits and time deposit accounts greater than $100,000.
(2)
LTM ROAA and LTM ROAE are shown tax-affected for S Corporations.
(3)
Nonperforming assets as a percentage of total assets (includes restructured loans and leases).
(4)
Loan Loss Reserve (“LLR”) as a percentage of nonperforming loans (“NPLs”).
No company or transaction used as a comparison in the above transaction analyses is identical to Legacy, and no transaction was consummated on terms identical to the terms of the merger agreement. Accordingly, an analysis of these results is not strictly mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies. The resulting values of the Precedent Transactions Regional Group using the median values for the four valuation metrics set forth above indicated an implied total valuation ranging between $88.9 million and $98.8 million with a four factor implied total valuation average of $93.4 million compared to the total merger value assumed by Hovde of $111.2 million. The resulting values of the Precedent Transactions Nationwide Group using the median values for the four valuation metrics set forth above indicated an implied total valuation ranging between $89.4 million and $95.7 million with a four factor implied total valuation average of $92.4 million compared to the total merger value assumed by Hovde of $111.2 million.
Income Approach — Discounted Cash Flow Analysis.   Taking into account various factors including, but not limited to, Legacy’s recent performance, the current banking environment and the local economy in which Legacy operates, Hovde determined, in consultation with and based on information provided by management of Legacy, net income estimates for Legacy over a forward looking five year period, and in consultation with Legacy management, developed the forward-looking projections and key assumptions which formed the basis for the discounted cash flow analyses. The resulting projected Legacy net income numbers used for the analysis were $8.5 million for 2021, $9.6 million for 2022, $10.0 million for 2023, $11.0 million for 2024 and $12.1 million for 2025. No dividends were assumed to be paid by Legacy over the projection period.
To determine present values of Legacy based on these projections, Hovde utilized two discounted cash flow models, each of which capitalized terminal values using different multiples: (1) Terminal Price/Earnings Multiple (“DCF Terminal P/E Multiple”); and, (2) Terminal Price/Adjusted Common Tangible Book Value Multiple (“DCF Terminal P/Adj. TBV Multiple”).
In the DCF Terminal P/E Multiple analysis, an estimated value of Legacy common stock was calculated based on the present value of Legacy’s net income based on Legacy management’s forward-looking projections
 
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over the five year projection period. The projected 2025 net income amount was $12.1 million and served as the basis of the terminal earnings value in the DCF. Hovde utilized a terminal value at the end of 2025 by applying a five point range of price-to-earnings multiples of 13.3x to 17.3x, which is based around the median price-to-earnings multiple derived from transactions in the Regional Group of 15.3x. The present value of Legacy’s projected terminal value was then calculated assuming a range of discount rates between 14.60% and 16.60%, with a midpoint of 15.60% discounted over a period of 4.79 years. This range of discount rates was chosen to reflect different assumptions regarding the required rates of return of holders or prospective holders of Legacy common stock. The range of discount rates utilized the buildup method to determine such required rates of return and was based upon the risk-free interest rate, an equity risk premium, an industry risk premium and a size premium which resulted in a discount rate of 15.60% used as the midpoint of the five point range of discount rates of 14.60% to 16.60%. The resulting total values of Legacy common stock based on the DCF Terminal P/E Multiple applied to the 2025 projected earnings of $12.1 million and then discounted over a 4.79 year period utilizing the five point range of discount rates set forth above resulted in implied total values between $77.0 million and $108.9 million with a midpoint of $92.3 million compared to the total merger value assumed by Hovde of $111.2 million.
In the DCF Terminal P/Adj. TBV Multiple model, the same earnings estimates and projected net income were used as in the preceding DCF Terminal P/E Multiple analysis to determine the projected adjusted common tangible book value for Legacy as of December 31, 2025 of $70.8 million with excess tangible book value of $37.4 million. For purposes of the analysis, projected adjusted tangible book value was assumed to be equal to total tangible assets multiplied by 8.0%. In arriving at the terminal value at the end of 2025, Hovde applied a five point range of price-to-adjusted common tangible book value multiples of 1.80x to 2.00x utilizing as a midpoint of the range the median price-to-adjusted common tangible book value multiple derived from precedent transactions in the Regional Group of 1.90x and assumed dollar-for-dollar payment on excess tangible book value. The present value of the projected terminal value was then calculated assuming the range of discount rates between 14.60% and 16.60%, with a midpoint of 15.60% discounted over a period of 4.79 years as was applied in the DCF Terminal P/E Multiple analysis set forth above. The resulting implied total values of Legacy common stock based on the DCF Terminal P/Adj. TBV Multiple analysis ranged between $79.2 million and $93.4 million with a midpoint of $86.0 million compared to the total merger value assumed by Hovde of $111.2 million.
These analyses and their underlying assumptions yielded a range of implied multiple values for Legacy common stock which are outlined in the table below:
Implied Multiple Value for Legacy Common Stock
Based On:
Total
Merger
Value
($000)
Price-to-LTM
Earnings
Multiple(1)
Price-to-
Common
Tangible
Book Value
Multiple(1)
Price-to-
Adjusted
Common
Tangible
Book Value
Multiple(1)(2)
Premium-to-
Core Deposits
Multiple(1)(3)
Assumed Total Merger Value
$ 111,212 18.8x 194.9% 226.9% 17.7%
DCF Analysis – Terminal P/E Multiple
Midpoint Value
$ 92,335 15.6x 161.8% 182.7% 11.5%
DCF Analysis – Terminal P/Adj. TBV Multiple
Midpoint Value
$ 86,034 14.6x 150.8% 167.9% 9.46%
(1)
Pricing multiples based on the total merger value assumed by Hovde of $111,212,341; DCF Analysis — Terminal P/E Multiple median implied total merger value of $92,334,722; and a DCF Analysis — Terminal P/Adj. TBV Multiple median implied total merger value of $86,033,692.
(2)
Price-to-Adjusted Common Tangible Book Value equals the adjusted purchase price divided by core capital where: (a) core capital equals total tangible assets multiplied by 8%; (b) excess capital equals total common tangible book value less core capital; and (c) adjusted purchase price equals the total merger value less excess capital (assumes dollar-for-dollar payment on excess capital).
 
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(3)
Represents the premium of the total merger value over Common Tangible Book Value, expressed as a percentage of Core Deposits. Core deposits are defined as total deposits less foreign deposits and time deposit accounts greater than $100,000.
Hovde noted that while the discounted cash flow present value analysis is a widely used valuation methodology, it relies on numerous assumptions, including asset and earnings growth rates, projected dividend payouts, terminal values and discount rates. Hovde’s analysis does not purport to be indicative of the actual values or expected total values of Legacy common stock.
The table below summarizes the analyses performed under the Market Approach and the Income Approach described above.
Summary of Valuation Methodologies(1):
Assumed Total Merger Value: $111,212
Four Factor Average Implied Merger Value(2): $91,044
Implied Value for Legacy Common Stock Based Upon:(3)
Minimum
Implied Value
Average or
Midpoint
Implied Value
Maximum
Implied Value
Comparable M&A Transactions – Regional Group
$ 88,935 $ 93,379 $ 98,839
Comparable M&A Transactions – Nationwide Group
$ 89,409 $ 92,427 $ 95,715
DCF – Terminal P/E Multiple
$ 77,008 $ 92,335 $ 108,854
DCF – Terminal P/Adj. TBV Multiple
$ 79,162 $ 86,034 $ 93,377
(1)
All values in thousands and are rounded to the nearest thousand.
(2)
Rounded to the nearest thousand; reflects the average of the two implied total merger values (4 factor average) from the two Comparable M&A Transactions groups and the two DCF present values calculated using the two terminal median valuation multiples and a 15.60% annual discount rate over a period of 4.79 years.
(3)
Values represent the minimum, average and maximum implied values (using the median acquisition multiples derived from the Comparable M&A Transactions groups) and the minimum and maximum implied values of the range of terminal multiples and discount rates in the DCF analyses.
Seacoast Comparable Companies Analysis: Hovde used publicly available information to compare selected financial and trading information for Seacoast and a group of 8 publicly-traded financial institutions selected by Hovde which was based on publicly-traded banks headquartered in Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia with total assets between $5.0 billion and $15.0 billion. The following publicly-traded financial institutions comprised the comparable peer group:
Renasant Corporation
Towne Bank
ServisFirst Bancshares, Inc.
FB Financial Corporation
Amerant Bancorp, Inc.
First Bancorp
City Holding Company
First Bancshares, Inc.
The analysis compared publicly available financial and market trading information for Seacoast and the data for the 8 financial institutions identified above as of and for the most recent twelve-month period which was publicly available. The table below compares the data for Seacoast and the median data for the 8 financial institutions identified above, with pricing data as of March 19, 2021.
Market
Cap ($M)
Price/
Tangible
Book Value
Price/ 2020A
EPS
Price/ 2021E
EPS
Dividend
Yield
YTD Price
Change
Two Year
Total Return
Seacoast
$ 2,109.1 237.6% 26.7x 20.7x 0.00% 30.6% 34.5%
Comparable Companies:
Median
$ 1,781.5 211.5% 16.5x 16.7x 1.55% 34.3% 31.3%
 
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Seacoast fell within the range of pricing metrics of comparable companies. No company used as a comparison in the above analyses is identical to Seacoast. Accordingly, an analysis of these results is not strictly mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies.
Other Factors and Analyses.   Hovde took into consideration various other factors and analyses, including but not limited to: current market environment; merger and acquisition environment; movements in the common stock valuations of selected publicly-traded banking companies; and movements in the Russell 3000 Index.
Conclusion.   Based upon the foregoing analyses and other investigations and assumptions as set forth in its opinion, without giving specific weightings to any one factor, analysis or comparison, Hovde determined that, as of the date of its opinion, subject to the review, assumptions and limitations set forth in the opinion, the total merger value to be received by the shareholders and option holders of Legacy in the merger pursuant to the merger agreement is fair, from a financial point of view, to the holders of Legacy common stock.
Each Legacy shareholder is encouraged to read Hovde’s fairness opinion in its entirety. The full text of this fairness opinion is included in this proxy statement/prospectus as Appendix B.
Material U.S. Federal Income Tax Consequences of the Merger
The following discussion describes the anticipated material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of Legacy common stock that exchange their shares of Legacy common stock for shares of Seacoast common stock in the merger. This summary is based upon the Code, Treasury regulations promulgated thereunder, judicial authorities, published positions of the Internal Revenue Service and other applicable authorities, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions set forth in this discussion.
For purposes of this discussion, a “U.S. holder” means a beneficial owner of Legacy common stock that is for U.S. federal income tax purposes (i) an individual citizen or resident of the U.S., (ii) a corporation, or entity treated as a corporation, organized in or under the laws of the U.S. or any state or political subdivision thereof or the District of Columbia, (iii) a trust if (a) a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) such trust has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes, or (iv) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source. This discussion addresses only U.S. holders of Legacy common stock.
This discussion addresses only those Legacy common shareholders that hold their shares of Legacy common stock as a capital asset within the meaning of Section 1221 of the Code (generally, stock held for investment). Further, this discussion does not address all aspects of U.S. federal income taxation that may be relevant to you in light of your particular circumstances or if you are subject to special treatment under the U.S. federal income tax laws, including if you are

a financial institution;

a tax-exempt organization;

an S corporation or other pass-through entity (or an investor in an S corporation or other pass-through entity);

retirement plans, individual retirement accounts or other tax-deferred accounts;

an insurance company;

a regulated investment company;

a real estate investment trust;

a dealer or broker in stocks and securities, commodities or currencies;

a trader in securities that elects the mark-to-market method of accounting;
 
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a holder of Legacy stock that received such stock through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

a person that is not a U.S. holder (as defined above);

a person that has a functional currency other than the U.S. dollar;

a holder of Legacy stock that holds such stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction; or

a U.S. expatriate.
In addition, the discussion does not address any alternative minimum tax or any state, local or foreign tax consequences of the merger, and it does not address any other U.S. federal tax consequences (such as gift or estate taxes or the unearned income Medicare contribution tax). The actual tax consequences of the merger to you may be complex. These consequences will depend on your individual situation. Holders of Legacy common stock are urged to consult with their own tax advisors as to the tax consequences of the merger in their particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of any changes in those laws.
If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Legacy common stock, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Partners in a partnership holding Legacy common stock should consult their own tax advisors.
Tax Consequences of the Merger Generally
The parties intend for the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to Seacoast’s obligation to complete the merger that it receive an opinion from Alston & Bird LLP, dated the closing date of the merger, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code, and it is a condition to Legacy’s obligation to complete the merger that it receive an opinion from Fenimore, Kay, Harrison & Ford, LLP, dated as of the closing date of the merger, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The opinion of Alston & Bird LLP provided on behalf of Seacoast and the opinion of Fenimore, Kay, Harrison & Ford, LLP provided on behalf of Legacy will each be based on representation letters provided by Seacoast and Legacy and on customary factual assumptions. The opinions described above will not be binding on the Internal Revenue Service or any court. Legacy and Seacoast have not sought and will not seek any ruling from the Internal Revenue Service regarding any matters relating to the merger. There can be no assurance that the Internal Revenue Service will not assert, or that a court would not sustain, a position contrary to any of the conclusions set forth in this discussion. In addition, if any of the representations or assumptions upon which these opinions are based are inconsistent with the actual facts, the U.S. federal income tax consequences of the merger could be adversely affected.
Provided the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, each of Seacoast and Legacy will be a party to such reorganization within the meaning of Section 368(b) of the Code, and neither Seacoast nor Legacy will recognize any gain or loss as a result of the merger.
Provided the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, as a U.S. holder of Legacy common stock that exchanges all of your Legacy common stock for Seacoast common stock, you will not recognize income, gain or loss for U.S. federal income tax purposes, except, as discussed below, with respect to cash received in lieu of fractional shares of Seacoast common stock or upon the exercise of dissenters’ rights.
The aggregate tax basis of the Seacoast common stock you receive in the merger (including any fractional shares deemed received and redeemed for cash as described below) will be the same as the aggregate tax basis of the Legacy common stock surrendered in exchange therefor, reduced by any basis allocable to a fractional share of Seacoast common stock for which cash is received. The holding period of the Seacoast common stock received (including any fractional shares deemed received and sold for cash as described below) will include the holding period of the Legacy shares surrendered.
 
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If a U.S. holder acquired different blocks of Legacy common stock at different times or at different prices, the Seacoast common stock such holder receives will be allocated pro rata to each block of Legacy common stock, and the basis and holding period of each block of Seacoast common stock such holder receives will be determined on a block-for-block basis depending on the basis and holding period of the blocks of Legacy common stock exchanged for such block of Seacoast common stock.
Cash In Lieu of Fractional Shares
If you receive cash in lieu of a fractional share of Seacoast common stock, you will be treated as having received the fractional share of Seacoast common stock pursuant to the merger and then as having sold that fractional share of Seacoast common stock for cash in a redemption by Seacoast. As a result, assuming that the cash received is not treated as a dividend (as described below), you generally will recognize gain or loss equal to the difference between the amount of cash received and the tax basis allocated to such fractional share. This gain or loss generally will be capital gain or loss and generally will be long-term capital gain or loss if, as of the effective date of the merger, your holding period for the shares (including the holding period of the Legacy common stock deemed surrendered in exchange for a fractional share of Seacoast common stock) is greater than one year. The deductibility of capital losses is subject to limitations.
Potential Dividend Treatment
In some cases, if a holder of Legacy common stock actually or constructively owns shares of Seacoast common stock (other than the shares of Seacoast common stock received as consideration in connection with the merger), the holder’s recognized gain could be treated as having the effect of the distribution of a dividend under the tests set forth in Section 302 of the Code, in which case such gain would be treated as dividend income to the extent of the holder’s ratable share of Seacoast’s accumulated earnings and profits (as calculated for U.S. federal income tax purposes). The determination of whether a U.S. holder will recognize a capital gain or dividend income as a result of its exchange of Legacy common stock in the merger is complex and must be determined on a stockholder-by-stockholder basis. Accordingly, each holder should consult his, her or its own independent tax advisor as to the tax consequences of the merger, including such determination, in its particular circumstances.
Information Reporting and Backup Withholding
In certain instances, you may be subject to information reporting and backup withholding (currently at a rate of 24%) on any cash payments you receive. You generally will not be subject to backup withholding, however, if you:

furnish a correct taxpayer identification number, certify that you are not subject to backup withholding on the substitute Form W-9 or successor form included in the letter of transmittal you will receive and otherwise comply with all the applicable requirements of the backup withholding rules; or

provide proof that you are otherwise exempt from backup withholding.
Any amounts withheld under the backup withholding rules are not additional tax and will generally be allowed as a refund or credit against your U.S. federal income tax liability, provided you timely furnish the required information to the Internal Revenue Service.
A Legacy shareholder who receives Seacoast common stock as a result of the merger will be required to retain records pertaining to the merger. Each Legacy shareholder who is required to file a U.S. federal income tax return and who is a “significant holder” that receives Seacoast common stock in the merger will be required to file a statement with such U.S. federal income tax return in accordance with Treasury regulations Section 1.368-3 setting forth information regarding the parties to the merger, the date of the merger, such Legacy shareholder’s basis in the Legacy common stock surrendered and the fair market value of the Seacoast common stock received in the merger. A “significant holder” is a holder of Legacy common stock who, immediately before the merger, owned at least 1% (by vote or value) of the outstanding stock of Legacy or securities of Legacy with a basis for U.S. federal income tax purposes of at least $1 million.
 
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Exercise of Dissenters’ Rights
As part of the exercise of dissenters’ rights, a Legacy shareholder will exchange all of its Legacy common stock for cash. A U.S. holder that receives only cash in exchange for its Legacy common stock will generally recognize gain or loss equal to the difference between the amount of cash received and such U.S. holder’s adjusted tax basis in its Legacy common stock. This gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. holder’s holding period for its shares of Legacy common stock exceeds one year. Long-term capital gain of non-corporate taxpayers, including individuals, is generally taxed at preferential rates. The deductibility of capital losses may be subject to limitations.
This discussion of certain material U.S. federal income tax consequences is for general information purposes only and is not tax advice. Holders of Legacy common stock are urged to consult their tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules, or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty. Holders of Legacy common stock are also urged to consult their tax advisors with respect to the effect of possible changes in any of those laws after the date of this proxy statement/prospectus.
Accounting Treatment
The merger will be accounted for using the acquisition method of accounting with Seacoast treated as the acquiror. Under this method of accounting, Legacy’s assets and liabilities will be recorded by Seacoast at their respective fair values as of the date of completion of the merger. Financial statements of Seacoast issued after the merger will reflect these values and will not be restated retroactively to reflect the historical financial position or results of operations of Seacoast.
Regulatory Approvals
Under federal law, the merger must be approved by the OCC. After receipt of approval of the merger from the OCC, the parties must wait for up to 30 days before completing the merger. If, however, there are no adverse comments from the U.S. Department of Justice and Seacoast receives permission from the OCC to do so, the merger may be completed on or after the fifteenth (15th) day after approval from the OCC.
As of the date of this proxy statement/prospectus, all of the required regulatory approvals have been received. See “The Merger Agreement — Conditions to Completion of the Merger.”
Dissenters’ Rights for Legacy Shareholders
A shareholder of Legacy may dissent from the merger and receive in cash the appraised value, as of the effective time of the merger, of the shares of Legacy common stock held by such shareholder, in accordance with Section 215a of the United States Code (the “Dissent Provisions”). Section 215a of the United States Code is the controlling provision relating to the dissent rights of Legacy shareholders in light of Section 658.41(2) of the Florida Financial Institutions Codes, which provides that federal law, rather than Florida law, will be controlling with respect to shareholders’ rights in the merger of a Florida bank with and into a national bank. The appraised value of the Legacy common stock may differ from the consideration that a shareholder of Legacy is entitled to receive in the merger. The following is a summary of the Dissent Provisions, the full text of which is set forth as Appendix C to this proxy statement/prospectus.
Under the Dissent Provisions, a shareholder of Legacy may dissent from the merger by (i) either voting against the merger or giving notice in writing to Legacy at or prior to the annual meeting that he or she dissents from the merger and (ii) making a written request to SNB to receive the value of such shareholder’s shares of Legacy common stock, which request must be made within thirty (30) days after the effective time of the merger and must be accompanied by the surrender of the shareholder’s stock certificates.
The value of the shares held by any dissenting shareholder shall be determined as of the effective time of the merger by an appraisal made by a committee of three (3) persons, composed of one person selected by the holders of a majority of the shares of Legacy common stock for which rights of dissent are being asserted, one selected by the board of directors of SNB and the third selected by the other two. The valuation agreed upon by any two of the three appraisers shall govern. However, if the value so fixed is not satisfactory to any
 
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dissenting shareholder who has requested payment, that shareholder may, within five days after being notified of the appraised value of his or her shares, appeal to the Comptroller of the Currency, who shall cause a reappraisal to be made, which shall be final and binding as to the value of the shares of the dissenting shareholder who has appealed to the Comptroller.
If, within 90 days from the effective time of the merger, for any reason one or more of the three appraisers is not selected as provided by the Dissent Provisions, or the appraisers shall fail to determine the value of the shares, the Comptroller shall upon written request of any interested party cause an appraisal to be made, which shall be final and binding on all parties. In any event, the value of shares ascertained under the Dissent Provisions shall be promptly paid to the dissenting shareholders by SNB. In addition, the Seacoast common stock that would have been delivered to the dissenting shareholders but for their dissent may, if required by law, be sold at an advertised public auction at which Seacoast may bid. If the shares are auctioned and are sold at a price greater than that paid to the dissenting shareholders, such excess amount would be remitted to the dissenting shareholders.
Any shareholder of Legacy who perfects the right to be paid the value of his or her shares will recognize gain or loss, if any, for federal income tax purposes upon the receipt of cash for such shares. The amount of gain or loss and its character as ordinary or capital gain or loss will be determined in accordance with applicable provisions of the Internal Revenue Code. See “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 45.
The foregoing summary is not intended to be a complete statement of the procedures for exercising appraisal rights under the Dissent Provisions and is qualified in its entirety by reference to the full text of such provisions, a copy of which is attached to this proxy statement-prospectus as Appendix C. Legacy urges any shareholder wishing to exercise appraisal rights to read this summary and the text of the Dissent Provisions carefully, and to consult legal counsel before attempting to exercise appraisal rights. Failure to comply strictly with all of the procedures set forth in the Dissent Provisions may result in the loss of your statutory appraisal rights.
Board of Directors and Management of Seacoast and SNB Following the Merger
The members of the board of directors and officers of Seacoast and SNB immediately prior to the effective time of the merger will be the directors and officers of the surviving bank and will hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.
Information regarding the executive officers and directors of Seacoast and SNB is contained in documents filed by Seacoast with the SEC and incorporated by reference into this proxy statement/prospectus, including Seacoast’s Annual Report on Form 10-K for the year ended December 31, 2020 and its definitive proxy statement on Schedule 14A for its 2021 annual meeting, filed with the SEC on March 1, 2021 and April 9, 2021 (as amended), respectively. See “Where You Can Find More Information” and “Documents Incorporated by Reference.”
Interests of Legacy Directors and Executive Officers in the Merger
In the merger, the directors and executive officers of Legacy will receive the same merger consideration for their Legacy shares as the other Legacy shareholders. In considering the recommendation of the Legacy board of directors that you vote to approve the merger agreement, you should be aware that some of the executive officers and directors of Legacy may have interests in the merger and may have arrangements, as described below, that may be considered to be different from, or in addition to, those of Legacy shareholders generally. The Legacy board of directors was aware of these interests and considered them, among other matters, in reaching its decision to adopt and approve the merger agreement and to recommend that Legacy shareholders vote in favor of approving the merger agreement. See “The Merger — Background of the Merger” and “The Merger — Legacy’s Reasons for the Merger and Recommendations of the Legacy Board of Directors.” Legacy’s shareholders should take these interests into account in deciding whether to vote “FOR” the proposal to adopt the merger agreement. These interests are described in more detail below, and certain of them are quantified in the narrative below.
Treatment of Legacy Equity Awards
The merger agreement requires Legacy to take all actions necessary to accelerate the vesting of any outstanding Legacy options such that all unvested Legacy options shall be deemed vested immediately prior
 
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to the effective time of the merger. As of the record date, there were 2,095,644 Legacy options outstanding. Legacy is also required to use commercially reasonable efforts to (a) amend the Legacy options to permit them to be exercised following a separation from service in accordance with the Legacy Bank of Florida Equity Incentive Plan, as amended, and (b) amend the Legacy options to allow for exercise of each option by payment of the exercise price through (i) delivery of cash or cash equivalents, (ii) delivery of previously-acquired shares of Legacy common stock, (iii) withholding of shares of Legacy common stock from the option based on the value of such shares on the date the option is exercised, (iv) broker-assisted market sales, or (v) any other “cashless exercise” arrangement.
The merger agreement further requires Legacy to take all actions necessary to cause each Legacy equity award issued and outstanding immediately prior to the effective time to be terminated at the effective time of the merger. In consideration of such termination, Seacoast will grant to each holder of Legacy options, as of the effective time, an option to purchase shares of Seacoast common stock pursuant to Seacoast’s Incentive Plan (which we refer to as the “substitute option”), on the same terms and conditions as applicable to each such Legacy option as in effect immediately prior to the effective time, except that (A) the number of shares of Seacoast common stock subject to such substitute option shall equal the product of (x) the number of shares of Legacy common stock subject to such Legacy option immediately prior to the effective time, multiplied by (y) the exchange ratio, rounded down to the nearest whole share, and (B) the per share exercise price for the shares of Seacoast common stock issuable upon exercise of such substitute option shall equal the quotient determined by dividing (x) the exercise price per share of Legacy common stock at which such Legacy option was exercisable immediately prior to the effective time by (y) the exchange ratio, rounded up to the nearest whole cent.
Acceleration of Benefits and Termination of Deferred Compensation Arrangements
Legacy has adopted Supplemental Executive Retirement Plans for each of Dennis Bedley, Bradley Meredith, and Marcia Snyder. As a result of the merger, all benefits provided for under such deferred compensation plans will vest. Accordingly, immediately prior to the effective time and conditioned upon consummation of the merger, the Supplemental Executive Retirement Plans will be terminated and each of Dennis Bedley, Bradley Meredith, and Marcia Snyder will be entitled to receive a lump-sum payment in connection with such termination. Legacy estimates that the pre-tax amount of these payments will be $733,884, $399,048, and $473,355, respectively.
Meredith Change in Control Payment
Bradley Meredith, current Executive Vice President and Chief Financial Officer of Legacy, has an existing employment agreement with Legacy. As part of this employment agreement with Legacy, Legacy agreed to provide payments to Mr. Meredith upon certain events relating to a change-in-control of Legacy. Accordingly, immediately prior to the effective time and conditioned upon consummation of the merger, Mr. Meredith’s existing employment agreement will be terminated and he shall be entitled to receive an estimated pre-tax change-in-control payment of $306,000.
Bedley Employment Agreement
Dennis Bedley, current Chairman and Chief Executive Officer of Legacy, has entered into an employment agreement with Seacoast and SNB effective upon the closing of the merger. The agreement provides for the termination of Mr. Bedley’s existing employment agreement with Legacy, entitling Mr. Bedley to receive a payment in the amount of $425,000, the full amount that Mr. Bedley would be entitled to under his existing employment agreement with Legacy in connection with the merger, as consideration for such termination. The employment agreement with Seacoast and SNB also provides for, among other things, Mr. Bedley’s employment with SNB as Senior Vice President, Broward County Market President from the effective time of the merger through the third anniversary of the effective date. Mr. Bedley will receive an annual base salary of $275,000 during the term of the agreement and is eligible to receive annual bonus compensation under SNB’s annual incentive program; provided, however, that such bonus compensation shall not be less than $150,000 for each of the 2021, 2022, and 2023 bonus years. Mr. Bedley is also entitled to an automobile allowance of $650 per month.
 
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If Mr. Bedley’s employment is terminated by Seacoast during the term of the agreement without cause or by Mr. Bedley for good reason, Mr. Bedley is entitled to payment of all earned and unpaid salaries, payment in lieu of any unused vacation time, and an amount equal to twelve (12) months of his annual base salary to be paid in equal monthly installments over a twelve (12) month period. Payment of any such severance payment is conditioned upon the execution of a release by Mr. Bedley releasing Seacoast and SNB from certain claims.
For a period beginning on the effective date of the merger and ending on the later of the second anniversary of the effective date or one year following termination of Mr. Bedley’s employment with Seacoast, Mr. Bedley has agreed not to attempt to compete with SNB within the restricted area (as defined in the employment agreement) or to solicit employees or customers of SNB.
Snyder Employment Agreement
Marcia Snyder, current Chief Lending Officer and Chief Operations Officer of Legacy, has entered into an employment agreement with Seacoast and SNB effective upon the closing of the merger. The agreement provides for the termination of Ms. Snyder’s existing employment agreement with Legacy, entitling Ms. Snyder to receive a payment in the amount of $365,000 as consideration for such termination. The employment agreement with Seacoast and SNB also provides for, among other things, Ms. Snyder’s employment with Seacoast as a Senior Vice President from the effective time of the merger through the second anniversary of the effective date. Ms. Snyder will receive an annual base salary of $250,000 during the term of the agreement and is eligible to receive annual bonus compensation under SNB’s existing Commercial Lending Incentive Plan; provided, however, that such bonus compensation shall not be less than $115,000 for each of the 2021 and 2022 bonus years.
If Ms. Snyder’s employment is terminated by Seacoast during the term of the agreement without cause or by Ms. Snyder for good reason, Ms. Snyder is entitled to payment of all earned and unpaid salaries, payment in lieu of any unused vacation time, and an amount equal to twelve (12) months of Ms. Snyder’s annual base salary to be paid in equal monthly installments over a twelve (12) month period. Payment of any such severance payment is conditioned upon the execution of a release by Ms. Snyder releasing Seacoast and SNB from certain claims.
For a period beginning on the effective date of the merger and ending on the later of the second anniversary of the effective date or one year following termination of Ms. Snyder’s employment with Seacoast, Ms. Snyder has agreed not to attempt to compete with SNB within the restricted area (as defined in the employment agreement) or to solicit employees or customers of SNB.
Restrictive Covenant Agreements; Claims Letters
Certain non-employee directors of Legacy have entered into a restrictive covenant agreement with Seacoast, covering a three-year period commencing with the effective time of the merger, in the form attached as Exhibit C to the merger agreement attached as Appendix A to this document. Certain executive officers of Legacy have entered into a restrictive covenant agreement with Seacoast, covering a two-year period commencing with the effective time of the merger, in the form attached as Exhibit C to the merger agreement attached as Appendix A to this document. In addition, each director and certain executive officers of Legacy has entered into a claims letter in the form attached as Exhibit B to the merger agreement attached as Appendix A to this document, by which they have agreed to release certain claims against Legacy, effective as of the effective time of the merger.
Indemnification and Insurance
As described under “The Merger Agreement — Indemnification and Directors’ and Officers’ Insurance,” after the effective time of the merger, Seacoast will indemnify and defend the present and former directors and officers of Legacy against claims pertaining to matters occurring at or prior to the closing of the merger as permitted by Legacy’s organizational documents and the FFIC. Seacoast also has agreed, for a period of no less than six years after the effective time of the merger, to provide coverage to present and former directors and officers of Legacy pursuant to Legacy’s existing directors’ and officers’ liability insurance. This insurance policy may be substituted, but must contain at least the same coverage and amounts, and contain terms no less advantageous than the coverage currently provided by Legacy. In no event shall Seacoast be required to expend
 
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for the tail insurance a premium amount in excess of 150% of the annual premiums paid by Legacy for its directors’ and officers’ liability insurance in effect as of the date of the merger agreement.
Severance Payments
In connection with the merger, employees of Legacy, including officers (except for any officers of Legacy who receive change in control benefits in connection with an existing employment agreement), whose employment terminates during the six-month period following the closing of the merger will be entitled to receive a severance payment equal to two (2) weeks’ pay for each year of employment with Legacy as of such date of termination, with a four (4) week minimum and a twenty (20) week maximum, if such employee is classified an exempt employee within the meaning of the Code. Employees classified as non-exempt employees will be entitled to receive a severance payment equal to one (1) week’s pay for each year of employment with Legacy as of the date of such termination, with a two (2) week minimum and a ten (10) week maximum.
 
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PROPOSAL 2:   ELECTION OF THREE CLASS III DIRECTORS
General
The board of directors of Legacy is comprised of eight members and divided into three classes. Class I has three members, Class II has two members, and Class III has three members. All directors serve for staggered terms of three years each. The term of each class expires at the annual meeting in the years indicated below and upon the election and qualification of the director’s successor.
The following table shows for each nominee and continuing director: (i) his or her name, (ii) his or her age as of the record date, 2021, (iii) how long he or she has been a director of Legacy, and (iv) his or her position(s) with Legacy, other than as a director, or his or her principal occupation.
Name
Age
Director Since
Position with Providence or Principal
Occupation
Class III Director Nominees (For Term Expiring 2024)
Dennis G. Bedley 65 2006 Chairman and Chief Executive Officer of Legacy
Leo B. (Lee) Berman 75 2006 Organizing director and real estate investor
Thomas M. McDonald 70 2007 Chief Executive Officer of Craven Thompson Associates, Inc.
Class I Continuing Directors (For Terms Expiring 2022)
Michael W. Moskowitz 68 2006 Managing Partner and Lawyer at Moskowitz, Mandell, Salim & Simowitz, P.A.
Kate A. Murphy 42 2014 Real Estate Investor
Robert S. Walters 66 2014 Architect and Real Estate Developer
Class II Continuing Directors (For Terms Expiring 2023)
Stephen S. Schifrin 38 2014 General Counsel and Chief Compliance officer of Terrapin Partners, LLC
Michael I. Udine 55 2011 Broward County Commissioner for Northwest Broward County, Florida
Required Shareholder Approval
The election of the Class III directors will require approval of a plurality of the shares voted at the annual meeting for each Class III director.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RE-ELECTION OF DENNIS G. BEDLEY, LEO B. BERMAN, AND THOMAS M. MCDONALD AS CLASS III DIRECTORS FOR A TERM EXPIRING AT THE 2024 ANNUAL MEETING OF THE SHAREHOLDERS. THE CLASS III DIRECTORS’ TERMS WILL EXPIRE EARLIER IF THE MERGER IS COMPLETED.
 
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PROPOSAL 3:   ADJOURNMENT OF THE LEGACY ANNUAL MEETING
Legacy shareholders are being asked to approve the adjournment proposal.
If this adjournment proposal is approved, the Legacy annual meeting could be adjourned to any date. If the Legacy annual meeting is adjourned, Legacy shareholders who have already submitted their proxies will be able to revoke them at any time prior to their use. If you sign and return a proxy and do not indicate how you wish to vote on the adjournment proposal, your shares of Legacy common stock will be voted in favor of the adjournment proposal.
Approval of the adjournment proposal requires that the number votes cast in favor of or “FOR” the adjournment proposal exceed the number of votes cast “AGAINST” the adjournment proposal.
THE LEGACY BOARD OF DIRECTORS RECOMMENDS THAT LEGACY SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.
 
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THE MERGER AGREEMENT
The following is a summary of the material provisions of the merger agreement. This summary is qualified in its entirety by reference to the merger agreement, a copy of which is included as Appendix A to this proxy statement/prospectus and is incorporated herein by reference. You should read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.
The Merger
The boards of directors of Seacoast and Legacy have each approved and adopted the merger agreement, which provides for the merger of Legacy with and into SNB, with SNB surviving the merger as the surviving bank in the merger. Each share of Legacy common stock outstanding immediately prior to the effective time of the merger (excluding shares held by Legacy, SNB, Seacoast and their wholly-owned subsidiaries, and dissenting shares described below) shall be converted into the right to receive the merger consideration as described further below. Each share of Seacoast common stock outstanding immediately prior to the effective time of the merger will remain outstanding as one share of Seacoast common stock and will not be affected by the merger.
All shares of Seacoast common stock received by Legacy shareholders in the merger will be freely tradable, except that shares of Seacoast common stock received by persons who become affiliates of Seacoast for purposes of Rule 144 under the Securities Act may be resold by them only in transactions permitted by Rule 144, or as otherwise permitted under the Securities Act.
Closing and Effective Time of the Merger
The parties will use their reasonable best efforts to cause the effective time of the merger to occur on a mutually agreeable date following the date on which satisfaction or waiver of the closing conditions set forth in the merger agreement has occurred.
We currently expect that the merger will be completed in the third quarter of 2021, subject to the approval of the merger agreement by Legacy shareholders and certain bank regulators and subject to other conditions as described further in this proxy statement/prospectus. However, completion of the merger could be delayed if there is a delay in satisfying any other conditions to the merger. No assurance is made as to whether, or when, Seacoast and Legacy will complete the merger. See “The Merger Agreement — Conditions to Completion of the Merger.”
Merger Consideration
Under the terms of the merger agreement, each share of Legacy common stock outstanding immediately prior to the effective time of the merger (excluding certain shares held by Seacoast, Legacy, SNB and their wholly-owned subsidiaries and dissenting shares described below) will be converted into the right to receive 0.1703, which we refer to as the exchange ratio, of a share of Seacoast common stock (which we refer to as the “merger consideration,” and also referred to in an aggregate consideration amount, which includes the substitute stock options certain Legacy shareholders may receive, as the “aggregate merger consideration”). Please see “The Merger Agreement — Consideration” for more information. If Legacy’s consolidated tangible shareholders’ equity as of the close of business on the fifth business day prior to the closing date is less than $58.2 million (less the after-tax impact of permitted expenses) and general allowance for loan and lease losses is less than 0.75% of total loans and leases outstanding (excluding PPP loans), Seacoast shall have the option to adjust the merger consideration downward by an amount that equals the difference between $58.2 million (less the after-tax impact of permitted expenses) and Legacy’s consolidated tangible shareholders’ equity.
For each fractional share that would otherwise be issued, Seacoast will pay cash (without interest) in an amount equal to such fractional part of a share of Seacoast common stock multiplied by the average daily volume weighted average price of Seacoast common stock on the NASDAQ Global Select Market for the twenty trading days ending on the trading day immediately prior to the determination date, less any applicable withholding taxes. The “determination date” is defined in the merger agreement as the later of the date on which the last required consent obtained without regard to any requisite waiting period or the date on which
 
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Legacy shareholder approval is obtained. No holder will be entitled to dividends, voting rights or any other rights as a shareholder in respect of any fractional share.
Shareholders of Legacy have dissenters’ rights in connection with the proposed merger under federal law, which provides that a dissenting shareholder is entitled to receive the value of his or her shares in cash (which may be more or less than the value of the consideration that such holder would receive in the merger) if the dissenting shareholder complies with all of the requirements set forth in the applicable statute, Section 215a of the United States Code, a copy of which is attached as Appendix C to the proxy statement/prospectus. Under the applicable statute, a shareholder of Legacy may dissent from the merger by (i) either voting against the merger or giving notice in writing to Legacy at or prior to the annual meeting that he or she dissents from the merger and (ii) making a written request to Seacoast to receive the value of such shareholder’s shares of Legacy common stock, which request must be made within thirty (30) days after the effective time of the merger and must be accompanied by the surrender of the shareholder’s stock certificates. See “The Merger — Dissenters’ Rights for Legacy Shareholders.”
If the number of shares of Seacoast common stock or Legacy common stock issued and outstanding prior to the effective time of the merger is increased or decreased as a result of a stock split, stock combination, stock dividend or similar transaction with respect to the Seacoast common stock or Legacy common stock, then the merger consideration shall be proportionately adjusted as necessary to preserve the relative economic benefit to the parties.
Based upon the closing sale price of the Seacoast common stock on the NASDAQ Global Select Market of $36.52 on June 16, 2021, the last practicable trading date prior to the printing of this proxy statement/prospectus, each share of Legacy common stock will be entitled to be exchanged for total merger consideration with a value equal to approximately $6.22 per share.
The value of the shares of Seacoast common stock to be issued to Legacy shareholders in the merger will fluctuate between now and the closing date of the merger. We make no assurances as to whether or when the merger will be completed, and you are advised to obtain current sale prices for the Seacoast common stock. See “Risk Factors — Because the sale price of the Seacoast common stock will fluctuate, you cannot be sure of the value of the stock consideration that you will receive in the merger until the closing.”
Treatment of Legacy Equity Awards
The merger agreement requires Legacy to take all actions necessary to accelerate the vesting of any outstanding Legacy options such that all unvested Legacy options shall be deemed vested immediately prior to the effective time of the merger. Legacy is also required to use commercially reasonable efforts to (a) amend the Legacy options to permit them to be exercised following a separation from service in accordance with the Legacy Bank of Florida Equity Incentive Plan, as amended, and (b) amend the Legacy options to allow for exercise of each option by payment of the exercise price through (i) delivery of cash or cash equivalents, (ii) delivery of previously-acquired shares of Legacy common stock, (iii) withholding of shares of Legacy common stock from the option based on the value of such shares on the date the option is exercised, (iv) broker-assisted market sales, or (v) any other “cashless exercise” arrangement.
The merger agreement further requires Legacy to take all actions necessary to cause each Legacy equity award issued and outstanding immediately prior to the effective time to be terminated at the effective time of the merger. In consideration of such termination, Seacoast will grant to each holder of Legacy options, as of the effective time, an option to purchase shares of Seacoast common stock pursuant to Seacoast’s Incentive Plan (which we refer to as the “substitute option”), on the same terms and conditions as applicable to each such Legacy option as in effect immediately prior to the effective time, except that (A) the number of shares of Seacoast common stock subject to such substitute option shall equal the product of (x) the number of shares of Legacy common stock subject to such Legacy option immediately prior to the effective time, multiplied by (y) the exchange ratio, rounded down to the nearest whole share, and (B) the per share exercise price for the shares of Seacoast common stock issuable upon exercise of such substitute option shall equal the quotient determined by dividing (x) the exercise price per share of Legacy common stock at which such Legacy option was exercisable immediately prior to the effective time by (y) the exchange ratio, rounded up to the nearest whole cent.
 
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Exchange Procedures
Seacoast has appointed as the exchange agent under the merger agreement its exchange agent, Continental Stock Transfer and Trust Company. The merger agreement requires Seacoast to cause the exchange agent as promptly as practicable after the effective time and within five business days, to send to each former holder of shares of Legacy common stock, including holders of Legacy equity awards who received Legacy common stock in accordance with the exercise of such Legacy equity awards prior to the effective time, but excluding the holders, if any, of dissenting shares, transmittal materials for use in exchanging such holder’s Legacy certificates for the merger consideration. Upon surrender to the transfer agent of its certificates, a holder will be entitled to receive the merger consideration and any cash in lieu of a fractional share of Seacoast common stock to be issued.
Subject to law, following the surrender of any certificate or book-entry shares, there shall be issued and/or paid to the holder of the certificates representing whole shares of Seacoast common stock issued in exchange for Legacy common stock, without interest: (i) at the time of such surrender, the dividends or other distributions with a record date after the effective time of the merger payable with respect to the whole shares of Seacoast common stock and not paid; and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to shares of Seacoast common stock with a record date after the effective time of the merger and with a payment date subsequent to surrender.
After the effective time of the merger, there will be no registration of transfers on the stock transfer books of Legacy of Legacy common stock.
Organizational Documents of Surviving Bank; Directors and Officers
The organizational documents of SNB in effect immediately prior to the effective time of the merger shall be the organizational documents of the surviving bank after the effective time of the merger. The directors and officers of SNB immediately prior to the effective time of the merger shall continue as the directors and officers of the surviving bank following the effective time of the merger.
Conduct of Business Pending the Merger
Pursuant to the merger agreement, Legacy has agreed to certain restrictions on its activities until the effective time of the merger. In general, Legacy has agreed that, except as otherwise contemplated or permitted by the merger agreement, it will:

conduct its business in the ordinary course consistent with past practice;

use commercially reasonable efforts to maintain and preserve intact its business organization, employees and advantageous business relationships;

maintain its books, accounts and records in the usual manner on a basis consistent with that heretofore employed; and

provide Seacoast with Legacy’s consolidated balance sheets and related statements of operations and shareholders’ equity and comprehensive income (loss) prepared for any periods subsequent to the date of the merger agreement.
Each of the parties have agreed not to take any action that would adversely affect or delay (i) the approval of the merger agreement by Legacy shareholders, (ii) the receipt of all required regulatory consents or (iii) the ability of either party to perform its respective covenants and agreements under the merger agreement or to consummate the transactions contemplated by the merger agreement.
Each of Seacoast and Legacy have agreed to 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, to permit consummation of the merger as promptly as practicable and otherwise to enable the consummation of the transactions contemplated by the merger agreement.
Legacy has also agreed that, except as expressly contemplated or permitted by the merger agreement, it will not, without the prior written consent of Seacoast’s chief executive officer or chief financial officer (or
 
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with respect to certain actions, Seacoast’s chief credit officer of chief lending officer), not to be unreasonably withheld or delayed, do any of the following:

amend its organizational documents or any resolution or agreement concerning indemnification of its directors or officers;

adjust, split, combine, subdivide or reclassify any capital stock;

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 into or exchangeable for any shares its capital stock;

grant any securities or obligations convertible into or exercisable for or giving any 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;

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, except pursuant to the exercise of Legacy equity awards outstanding as of the date of the merger agreement;

make any change in any instrument or contract governing the terms of any of its securities;

make any investment in any other person, other than in the ordinary course of business or consistent with past practice or permitted by the merger agreement;

charge off (except as may 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 sell any asset held as other real estate owned (“OREO”) or other foreclosed assets for an amount less than its book value;

terminate or allow to be terminated any of the policies of insurance maintained on its business or property, cancel any material indebtedness owing to it or any claim that it may possess or waive any right of substantial value or discharge or satisfy any material noncurrent liability;

enter into any new line of business or change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies other than as required by applicable laws or any policies imposed by any governmental authority;

lend any money or pledge any of its credit in connection with any aspect of its business (except in the ordinary course of business consistent with past practices);

mortgage or otherwise subject to any lien, encumbrance or other liability any of its assets (except in the ordinary course of business consistent with past practices);

sell, assign or transfer any of its assets in excess of $50,000 in the aggregate (except in the ordinary course of business consistent with past practices and except for property held as OREO);

incur any material liability, commitment, indebtedness or obligation or cancel, release or assign any indebtedness of any person or any claims against any person (except (i) in the ordinary course of business consistent with past practice or (ii) pursuant to contracts in force as of the date of the merger agreement and disclosed in the disclosure schedules attached thereto);

transfer, agree to transfer or grant, or agree to grant a license to, any of its material intellectual property (other than in the ordinary course of business consistent with past practice);

except in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (other than short-term indebtedness incurred to refinance short term indebtedness) or assume, guarantee, endorse or otherwise become responsible for the obligations of any other person;

other than purchases of investment securities in the ordinary course of business consistent with past practice or in consultation with Seacoast, 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;
 
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terminate or waive any material provision of any contract other than normal renewals of contracts without materially adverse changes of terms or otherwise amend or modify any material contract;

other than in the ordinary course of business and consistent with past practice or as required by benefit plans and contracts in effect as of the date of the merger agreement, (i) increase in any manner the compensation or fringe benefits of, or grant any bonuses to, any director, officer or employee, 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 director, officer or employee, (iii) become a party to, amend or commit itself to any benefit plan or contract (or any individual contracts evidencing grants or awards) or employment agreement, retention agreement or severance arrangement with or for the benefit of any director, officer or employee, (iv) accelerate the vesting of, or the lapsing of restrictions with respect to, rights pursuant to any Legacy stock plan, except as provided in the merger agreement, (v) make any changes to a benefit plan that are not required by law, or (vi) hire or terminate the employment of a chief executive officer, president, chief financial officer, chief risk officer, chief credit officer, internal auditor, general counsel or other officer holding the position of senior vice president or above or any employee with annual base salary and incentive compensation that is reasonably anticipated to exceed $100,000;

settle any litigation, except in the ordinary course of business;

revalue any of its assets or change any method of accounting or accounting practice used by it, other than changes required by GAAP or the FDIC or any regulatory authority;

file or amend any tax return except in the ordinary course of business or 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;

enter into any closing agreement as described in Section 7121 of the Code (or any similar provision of law) or surrender any claim for a refund of taxes or consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect to taxes;

knowingly take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the merger not being satisfied, except as may be required by applicable law;

merge or consolidate with any other person;

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 in effect prior to the execution of the merger agreement and set forth in the disclosure schedules attached to the merger agreement;

enter into any contract that is material and would have been material had it been entered into prior to the execution of the merger agreement;

make any adverse changes in the mix, rates, terms or maturities of its deposits or other liabilities;

close or relocate any existing branch or facility;

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 limits;

take any action or fail to take any action that will cause Legacy’s consolidated tangible shareholders’ equity to be less than $58.2 million (less permitted expenses) at the effective time of the merger;

make any loans, or enter into any commitments to make loans, which vary other than in immaterial respects from its written loan policies (subject to certain exceptions and thresholds, provided that Legacy may extend or renew credit or loans in the ordinary course of business consistent with past lending practices or in connection with the workout or renegotiation of current loans);

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;

knowingly take any action that would prevent or impede the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; or
 
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agree or commit to take any of the actions set forth above.
Legacy Shareholder Approval
Legacy has agreed to call a meeting of its shareholders as soon as reasonably practicable after the Registration Statement on Form S-4 is declared effective by the SEC for the purpose of obtaining shareholder approval of the merger agreement. Legacy has further agreed to use its reasonable best efforts to cause the shareholder meeting to occur as soon as reasonably practicable.
Regulatory Matters
This proxy statement/prospectus forms part of a Registration Statement on Form S-4 which Seacoast has filed with the SEC. Seacoast has agreed to use all reasonable efforts to cause the Registration Statement to be declared effective by the SEC as promptly as reasonably practicable after filing.
Each of Seacoast and Legacy has agreed to use all reasonable best efforts to obtain all permits required by the securities laws, including state securities law or “blue sky” permits, necessary to carry out the transactions contemplated by the merger agreement and each of Seacoast and Legacy has agreed to furnish all information concerning it and the holders of its capital stock as may be reasonably requested in connection with any such action.
Seacoast and Legacy have agreed to use all respective 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, to permit the consummation of the merger as promptly as practicable.
Seacoast and Legacy have agreed to consult with each other with respect to the obtaining of all regulatory consents and other material consents advisable to consummate the transactions contemplated by the merger agreement, and each party has agreed to keep the other apprised of the status of material matters relating to the completion of the transactions contemplated by the merger agreement.
Seacoast and Legacy have agreed to promptly furnish to each other copies of applications filed with all governmental authorities and copies of written communications received by such party from any governmental authorities with respect to the transactions contemplated by the merger agreement. Additionally, each of Seacoast and Legacy has agreed to cooperate fully with and furnish information to the other party, and obtain all consents of, and give all notices to and making all filings with, all governmental authorities and other third parties that may be or become necessary for the performance of its obligations under the merger agreement and the consummation of the other transactions contemplated by the merger agreement.
NASDAQ Listing
Seacoast has agreed to cause the shares of Seacoast common stock to be issued in connection with the merger to be approved for listing on the NASDAQ Global Select Market, subject to official notice of issuance, prior to the effective time of the merger.
Employee Matters
Following the effective time of the merger, Seacoast has agreed to maintain employee benefit plans and compensation opportunities for full-time active employees of Legacy on the closing date of the merger (referred to below as “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 available on a uniform and non-discriminatory basis to similarly situated employees of Seacoast or its subsidiaries (provided that in no event are covered employees eligible to participate in any closed or frozen plan of Seacoast or its subsidiaries and provided further that in no event is Seacoast required to take into account any retention arrangements or equity compensation when determining whether employee benefits are substantially comparable). Seacoast will give the covered employees full credit for their prior service with Legacy 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 Seacoast in which covered employees may be eligible to participate and for all purposes under any welfare benefit plans, vacation plans, and similar arrangements maintained by Seacoast.
 
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With respect to any Seacoast 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, Seacoast or its applicable subsidiary must use its commercially reasonable best efforts to (i) cause any pre-existing condition limitations or eligibility waiting periods under such plan to be waived with respect to the covered employee to the extent the condition was, or would have been, covered under the Legacy benefit plan in which the covered employee participated immediately prior to the effective time of the merger and (ii) recognize any health, dental, vision or other welfare expenses incurred by the covered employee in the year that includes the closing date of the merger for purposes of any applicable deductible and annual out-of-pocket expense requirements.
If, within 6 months after the effective time of the merger, any covered employee is terminated by Seacoast or its subsidiaries other than “for cause” or as a result of a death, disability or unsatisfactory job performance, then Seacoast will pay severance to the covered employee in an amount set forth in its severance policies. Any severance to which a covered employee may be entitled in connection with a termination occurring more than 6 months after the effective time of the merger will be as set forth in its severance policies.
Promptly after the effective time of the merger, Seacoast must file with the SEC a registration statement on Form S-8 with respect to the Seacoast common stock that may be issued with respect to the substitute Seacoast stock options and must use commercially reasonable efforts to maintain the effectiveness of such registration statement for so long as a substitute Seacoast stock option remains outstanding.
Indemnification and Directors’ and Officers’ Insurance
From and after the effective time of the merger, Seacoast has agreed to indemnify, defend and hold harmless the present and former directors and officers of Legacy against any liability, judgments, fines and amounts paid in settlement in connection with any threatened or actual claim, action, suit, proceeding or investigation arising in whole or in part out of, or pertaining to (i) the fact that such person is or was a director, officer or employee of Legacy, its subsidiaries or any of its predecessors or (ii) the merger agreement or any of the transactions contemplated by the merger agreement, whether asserted or arising before or after the effective time, to the same extent permitted by law and as such persons are indemnified or have the right to advancement of expenses pursuant to Legacy’s organizational documents and the FFIC. All existing rights to indemnification and all existing limitations on liability existing in favor of the directors, officers and employees of Legacy as provided in its organizational documents shall survive the merger and remain in full force and effect and shall be honored by Seacoast.
Seacoast also has agreed, for a period of no less than six years following the effective time of the merger, to provide directors’ and officers’ liability insurance to reimburse present and former officers and directors of Legacy or its subsidiaries with respect to claims against such directors and officers arising from facts or events occurring before the effective time of the merger. Such insurance must contain at least the same coverage and amounts, and contain terms and conditions no less advantageous to the indemnified party as the coverage provided by Legacy. In no event shall Seacoast be required to expend for the tail insurance a premium amount in excess of 150% of the annual premiums paid by Legacy for its directors’ and officers’ liability insurance in effect as of the date of the merger agreement.
Third Party Proposals
Legacy has agreed that it will not, and will cause its directors, officers, and employees, any investment banker, financial advisor, attorney, accountant, consultant, agent or other representative and its 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 related to any acquisition proposal. “Acquisition proposal” means, other than the transactions contemplated by the merger 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 25% or more of the consolidated assets of Legacy or 25% or more of any class of equity or voting securities of Legacy, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in or would reasonably be expected to result in such third party beneficially owning 25% or more of any class of equity or voting securities of Legacy, (iii) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving
 
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Legacy, or (iv) any other transaction the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the merger or that could reasonably be expected to dilute materially the benefits to Seacoast of the transactions contemplated by the merger agreement.
However, the merger agreement provides that if Legacy receives an unsolicited bona fide acquisition proposal that does not violate the “no shop” provisions in the merger agreement and Legacy’s board of directors concludes in good faith that there is a reasonable likelihood that such proposal constitutes or is reasonably likely to result in a superior proposal (as defined below), then Legacy may, and may permit its officers and representatives to, furnish or cause to be furnished non-public information or data and participate in negotiations or discussions to the extent the Legacy board of directors concludes in good faith (and based on the written advice of its outside legal counsel) that failure to take such actions would result in a breach of its fiduciary duties under applicable law. Prior to providing any non-public information, Legacy shall have entered into a confidentiality agreement with such third party with terms no less favorable to Legacy than the confidentiality agreement entered into by Legacy and Seacoast prior to the execution of the merger agreement. Legacy must promptly advise Seacoast within two (2) business days following receipt or notice of any acquisition proposal and the substance of such proposal (including the identity of the person making such proposal) and must keep Seacoast apprised of any related developments, discussions and negotiations on a current basis. A “superior proposal” means any bona fide, unsolicited, written “acquisition proposal” for at least a majority of the outstanding shares of Legacy common stock on terms that the Legacy board of directors concludes in good faith, (i) after receiving the written advice of its financial advisor, (ii) after taking into account the likelihood of consummation of such proposal on the terms set forth in the proposal (as compared to, and with due regard for, the terms of the merger agreement) 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, is more favorable to the Legacy shareholders from a financial point of view than the merger (including the terms, if any, proposed by Seacoast to amend or modify the terms of the transactions contemplated by the merger agreement).
The merger agreement generally prohibits Legacy’s board of directors from making a change in recommendation (i.e., from withdrawing or modifying in a manner adverse to Seacoast the recommendation of the Legacy board of directors set forth in this proxy statement/prospectus that the Legacy shareholders vote to approve the merger agreement, or from making or causing to be made any third party or public communication proposing or announcing an intention to withdraw or modify in a manner adverse to Seacoast such recommendation). At any time prior to the approval of the merger agreement by the Legacy shareholders, however, the Legacy board of directors may effect a change in recommendation if the Legacy board of directors concludes in good faith (and based upon the written advice of its outside counsel and after consultation with its financial advisor and outside legal counsel) that an acquisition proposal constitutes or would reasonably be expected to constitute a superior proposal and that the failure to accept such superior proposal would reasonably be expected to result in a breach of its fiduciary obligations under applicable laws, and terminate the merger agreement and enter into a definitive agreement with respect to such superior proposal.
The Legacy board of directors may not make a change in recommendation and terminate the merger agreement with respect to an acquisition proposal, unless: (i) Legacy has not breached any of the provisions of the merger agreement relating to third party acquisition proposals in any respect; (ii) the Legacy board of directors determines in good faith (after consultation with outside legal counsel and its financial advisors) that such superior proposal has been made and has not been withdrawn and continues to be or is reasonably expected to continue to be a superior proposal (after taking into account all adjustments to the terms of the merger agreement offered by Seacoast); (iii) Legacy has given Seacoast at least 4 business days’ prior written notice of its intention to take such action (which notice shall specify the material terms and conditions of any 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 (iv) before effecting such change in recommendation, Legacy has negotiated, and has caused its representatives to negotiate, in good faith with Seacoast during the notice period (to the extent Seacoast wishes to negotiate) to enable Seacoast to revise the terms of the merger agreement so that such superior proposal no longer constitutes a superior proposal. In the event of any
 
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material change to the terms of a superior proposal, Legacy shall be required to deliver a new written notice to Seacoast and the four business day negotiation period with Seacoast shall have recommenced.
If the Legacy board of directors makes a change in recommendation, if Legacy terminates the merger agreement to enter into an agreement with respect to a superior proposal, or if Legacy’s shareholders do not approve the merger agreement and Legacy enters into an agreement with respect to an acquisition proposal within twelve months from the date the merger agreement is terminated, Legacy could be required to pay Seacoast a termination fee of $4,600,000 in cash. See “The Merger Agreement — Termination,” and “The Merger Agreement — Termination Fee.”
Systems Integration; Operating Functions
From and after the date of the merger agreement, Legacy shall and shall cause its directors, officers and employees to and shall make all commercially reasonable best efforts (without undue disruption to its business) to cause Legacy’s data processing consultants and software providers to, cooperate and assist Legacy and Seacoast in connection with an electronic and systems conversion of all applicable data of Legacy to the Seacoast systems, including the training of Legacy employees during normal banking hours. Additionally, Legacy shall provide Seacoast access to its data files to facilitate the conversion process, including but not limited to (i) sample data files with data dictionary no later than 30 days following the date of the merger agreement, (ii) a full set of data files, including electronic banking and online bill payment data, for mapping and mock conversion no later than 90 days prior to the targeted conversion date as determined by Seacoast, (iii) a second full set of data files from which to establish CIS records, deposit shells, electronic banking accounts, bill payment, payees and order debit cards no later than 21 days prior to the targeted conversion date, and (iv) a final set of data files no later than the date of the targeted conversion date. Legacy 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 Legacy) after the merger, and in preparing for the consolidation of appropriate operating functions to be effective at the effective time of the merger, or such later time as may be decided by Seacoast. Legacy shall take any action Seacoast may reasonably request prior to the effective time of the merger to facilitate the combination of the operations of Legacy with SNB. Legacy shall provide office space and support services in connection with the foregoing, and senior officers of Legacy and Seacoast shall meet from time to time as Legacy or Seacoast may reasonably request, to review the financial and operational affairs of Legacy and its subsidiaries, and Legacy shall give due consideration to Seacoast’s input on such matters, with the understanding that, neither Seacoast nor SNB will be permitted to exercise control of Legacy prior to the effective time of the merger and Legacy shall not 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. Legacy is responsible for all conversion and deconversion fees and expenses, regardless of whether the merger becomes effective.
Representations and Warranties
The merger agreement contains generally customary representations and warranties of Seacoast and Legacy relating to their respective businesses. The representations and warranties of each of Seacoast and Legacy have been made solely for the benefit of the other party, and these representations and warranties should not be relied on by any other person. In addition, these representations and warranties:

have been qualified by information set forth in confidential disclosure schedules in connection with signing the merger agreement — the information contained in these schedules modifies, qualifies and creates exceptions to the representations and warranties in the merger agreement;

will not survive consummation of the merger;

may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to the merger agreement if those statements turn out to be inaccurate;

are in some cases subject to a materiality standard described in the merger agreement which may differ from what may be viewed as material by you; and

were made only as of the date of the merger agreement or such other date as is specified in the merger agreement.
 
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