• Noninterest expenses for the third quarter totaled $8,496,000, $325,000 less than the $8,821,000 for 1999, and year-to-date expenses declined $1,042,000 or 3.8 percent;
• Annualized year-to-date net charge-offs were 0.03 percent compared to 0.01 percent in 1999. Nonperforming assets at quarter-end totaled $2,397,000, or 0.29 percent of loans and other real estate compared to 0.35 percent one year earlier;
• Noninterest income, excluding securities gains, increased 14.2 percent for the third quarter 2000, when compared to the prior year's quarter, as a result of increased fees collected from trust and investment management services and new fees from mortgage banking, debit card interchange and marine lending activities;
• Net loans increased 9.5 percent over the last twelve months to $827,581,000 and deposits grew by 4.1 percent to $919,489,000.

Besides its traditional loan products, the Company began a new division headquartered in Ft. Lauderdale, Florida, to originate loans to consumers for the purchase of marine yachts with an average loan amount of approximately $200,000. This business has produced $34 million in loans year-to-date, of which $13 million was added to the loan portfolio and the remainder sold to correspondent lenders for a fee. While loan growth over the past year was aided by the Company's leadership position on the Treasure Coast and its diversified loan products, it was also negatively impacted by higher interest rates which make it more difficult to attract and capture new loan business.

With a more favorable interest rate environment, loan and deposit growth would have resulted in improved net interest income results. However, as a result of higher interest rates, total net interest for the third quarter declined $564,000 compared to one year ago. The Company, along with other banks, has seen its net interest margin decline over the last nine months as a result of the Fed increasing interest rates to slow the economy. This has produced increased costs for deposits and faster growth in higher cost time deposits as customers have repositioned their assets from lower yielding core deposits and higher risk investments. The Company's net interest margin is expected to remain under pressure (as it has been over the past year) if the Fed continues to raise interest rates. The margin declined from 4.08 percent in the second quarter of 2000 to 3.90 percent this quarter.

Net interest income on a taxable equivalent basis (TEB) decreased $884,000 from $32,756,000 for the first nine months of 1999 to $31,872,000 for the same period in 2000. The Company's cost of interest bearing liabilities increased 87 basis points to 4.51 percent for the third quarter of 2000 when compared to the third quarter of 1999. Net interest margin for the remainder of 2000 is not expected to vary significantly from the third quarter's results.

Noninterest income, excluding securities gains, totaled $3,221,000 for the quarter, an increase of 14.2 percent from $2,820,000 achieved in the same period last year. Contributing to this growth were increases in brokerage fees and commissions of 26.2 percent, services charges related to deposit accounts of 3.9 percent, and trust income of 8.0 percent. Other fees and income, including mortgage banking and marine lending activities, increased 35.0 percent and totaled $756,000. Also, included in the other income category was debit card interchange income which produced over $100,000 in fee income this quarter, the result of direct marketing of this product to the Company's existing customer base. The Company plans to continue to improve its revenues from these fee-based businesses.

Noninterest expenses for the quarter, when compared to the third quarter of 1999, decreased $325,000 or 3.7 percent. The decrease results from lower incentive pay earned, a smaller work force, and lower employee benefits as a result of lower health care costs. It is the Company's intention to improve efficiencies within its dominate markets and utilize some of these savings to enhance fee-based banking services and products.

Seacoast with approximately $1.1 billion in assets is the largest independent commercial bank headquartered on Florida's Treasure Coast, one of the wealthiest areas in Florida and among the fastest growing in the nation.

. Safe Harbor. Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Seacoast. s business which are not historical facts are . forward-looking statements. that involve risks and uncertainties.

For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see . Special Cautionary Notice Regarding Forward-Looking Statements. in the company. s most recent Annual Report on Form 10-K.

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