Welcome to Seacoast Banking Corporation's call regarding the announcement of the proposed acquisition of Apollo Bancshares, Inc. and its bank subsidiary, Apollo Bank. My name is Vanessa, and I will be your operator. Before we begin, I have been asked to direct your attention to the statement contained at the end of the company's press release regarding forward-looking statements and the risks and uncertainties identified therein, which you should read carefully as risks and uncertainties may cause results to differ from expectations. Seacoast will be discussing issues that constitute forward-looking statements within the meaning of the Securities Exchange Act, and its comments today are intended to be covered within the meaning of that act. Seacoast's ability to accurately project results or predict the effects of future plans or strategies, including the impact of the proposed merger with Apollo Bancshares, Inc. or predict market or economic developments, is inherently limited. Seacoast believes that the expectations reflected or implied by any forward-looking statements are based on reasonable assumptions but are not guarantees of performance or results or the success of the proposed merger and its actual results, performance, and integration into Seacoast could differ materially from the expectations set forth in the forward-looking statements. You should keep in mind that any forward-looking statements made by Seacoast speak only as of the date on which they were made, and that Seacoast undertakes no obligation to update or revise any forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements. Please note that this conference is being recorded. I will now turn the call over to Chuck Shaffer, Chairman and CEO of Seacoast and Seacoast Bank. Mr. Shaffer, you may begin. Thank you all for joining us this morning. As we provide our comments, we'll reference the merger slide presentation titled Acquisition of Apollo Bancshares, which can be found at seacoastbanking.com. With me this morning is Tracey Dexter, our Chief Financial Officer. We're very excited to announce the acquisition of Apollo Bancshares. This transaction adds over $1 billion in assets and generates 8% earnings accretion in 2023, with modest tangible book value dilution earned back over 2.25 years. The transaction is accretive to return on tangible assets, return on tangible common equity, and the efficiency ratio looking forward. This acquisition represents a natural continuation of our M&A strategy by providing Seacoast with meaningful scale in Miami-Dade County, Florida's largest county by population. Apollo is a premier franchise with an experienced local banking team with deep relationships, complemented by best-in-class compliance team that is well-known to Seacoast. The Miami-Dade County market is a dynamic and diverse international community that is benefiting from multiple relocations of financial services and technology companies from all over the US, attracted by its business-friendly operating environment, low taxes, and ample high-quality talent. In recent years, Seacoast entered Miami-Dade County organically through a team of commercial bankers, and currently, our portfolio includes nearly 1,700 customers, $400 million in loans, and $70 million in deposits, with no branch presence to date. The Apollo transaction provides a strategic opportunity to deepen that presence and expand in one of Florida's fastest-growing and most affluent counties. This acquisition allows Seacoast to expand in this attractive market efficiently, bringing to Apollo our brand of high-quality service and digital products, which will generate accretive organic growth in the future ahead. We took a very detailed and careful approach to credit diligence, reviewing over 70% of the aggregate credit exposure, and we came away confident with the quality of the portfolio we are acquiring and are placing a conservative credit mark of 2.4% on the loan book. When considering the total loan mark, including the so-called CECL double mark, the portfolio is marked at 4.8%. We believe this is conservative approach to the mark limits downside risk moving forward. The portfolio is largely made up of domestic business relationships in Miami-Dade County and commercial real estate in South Florida. In addition, we share multiple clients in the market. As a reminder, Seacoast expects to exceed $10 billion in assets in 2022, with the financial impact of the Durbin Amendment taking effect in mid-2023. In combination with the two transactions we closed in January, this transaction more than fully offsets the impact of crossing $10 billion in 2023. Importantly, we are joining forces with the banking team at Apollo Bank. Apollo's management team has created a high-performing franchise with tremendous customer loyalty and support in this dynamic and fast-growing market. I wanna thank Eddy Arriola and his leadership team at Apollo Bank for their help in putting together this transaction over the past few months. I look forward to partnering with Eddy, who will serve as our Miami-Dade market executive. To conclude, although we do not include revenue synergies in the model, we possess significant opportunities as we bring wealth management, SBA lending, and an array of consumer and business products to the Apollo franchise. I'll now turn the call over to Tracey to provide further details on the combination. Thanks, Chuck. Good morning, everyone. Apollo has five branches and $928 million in deposits at December 31, 2021. Loans of $665 million as of the same date had an average yield of 4.34%. 90% of Apollo's deposit funding is made up of checking, savings, and money market accounts, with transaction accounts representing 49% of total deposits. Under the terms of the merger agreement, Seacoast will acquire 100% of the holding company shares and also the shares of the bank subsidiary that are owned by the 15% minority interest holders. Resulting in Seacoast owning 100% of the combined entity. Based on Seacoast closing price of $35.48 as of Monday, March 28, the transaction is valued at approximately $168.3 million, inclusive of the value of the rolled over Apollo options or $36.65 per common share. The deal pricing translates to 1.85x Apollo's tangible book value and 8.9x 2023 earnings per share when including expected cost savings. We're projecting 39% cost savings for which we have a very detailed execution plan and have consistently demonstrated our ability to execute well in all prior transactions. On the loan portfolio, we estimate, as Chuck noted, a total $32.6 million or 4.78% pretax mark, which includes the application in our credit modeling of the potential for a recessionary forecast scenario. The total is comprised $0.2 million in day one CECL reserves on PCD loans, $16.2 million in day one CECL reserves through provision on non-PCD loans, and accretable mark of $6.2 million. We modeled no interest mark on the loan portfolio. We conservatively modeled forward loan growth in the high single digits and deposit growth in mid-to-high single digits. In the investment portfolio, we estimated the valuation mark at $8.2 million based on today's yield curve, which will be accreted back through the portfolio over the estimated life of the underlying bonds. This estimate will change depending on the yield curve at closing. As a reminder, any tangible book value dilution incurred from the securities mark will be earned back over the duration. Using the crossover method, we expect tangible book value dilution to be 2.5% at closing to be earned back in approximately 2.25 years. Overall, this is an accretive value-creating transaction that adds meaningful scale in this important and growing market. We expect the merger to be accretive to earnings in 2023 by approximately 8%. Assumptions use the forward rate curve to project earnings for both institutions and assume 625 basis point hikes in 2022, including the one already in March, and 225 basis point hikes in 2023. Apollo is an asset sensitive bank, and we expect the margin to increase with rate hikes generally in line with Seacoast portfolio. We expect the acquisition to close early in the fourth quarter of 2022 after receipt of approval from regulatory authorities, the approval of Apollo and Apollo Bank shareholders, and the satisfaction of other customary closing conditions. I'll turn the call back to Chuck. Thank you, Tracey. Operator, I think we're ready for Q&A. Thank you. We will now begin our question-and-answer session. With your question, you can queue up by pressing star then one on your touch tone phone. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, with your question, please press star then one on your touch tone phone. We have our first question from Michael Young. Please go ahead. Hey, this is Julian on for Michael. Thanks for taking the question. Hey. No problem. Historically, have you been hesitant to enter the Miami-Dade market? Kind of, what's giving you that confidence now to do so now? I'll reiterate what I had in the prepared comments. You know, we've entered Miami-Dade over the last three or four years. We did that organically as a way of easing our way into the market. We're now at a scale and size we feel like taking on that market provides tremendous upside. You know, when you look at the team and the quality of the management at Apollo, we think we're bolting on an incredible franchise with incredible operators. The other bit of confidence there is the compliance team at Apollo is very well known to our team. Over the last three or four years, we've built up a very strong compliance team here at Seacoast that has actually operated and run out of Miami-Dade. To some extent, this is leveraging an investment we've already made in the franchise. You know, lastly, just, you know, it's an unbelievable market, $185 billion in deposits dominated by the national banks. Our ability to slide in there, bring our credit posture and our capability to that market, I think provides a lot of upside to Seacoast. I'm looking forward to working with Eddy and his team, and I think there's great things we can do in the marketplace. Got it. Thank you. Helpful. Also like last one, can you provide some thoughts on like rate sensitivity slash like NIM impact from Apollo going forward? Yeah. Our rate assumptions include the expectation of rate hikes six in 2022 and two more in 2023, all impacting the short end of the curve positively, but no meaningful movement on the intermediate to the long end of the curve from current rates. Additional hikes outside of those eight hikes or any steepening of the intermediate to long-term rates would certainly be beneficial. We modeled 4 basis points in margin expansion for Apollo Bank's margin for a 25-basis point parallel shift in rates compared to Seacoast current balance sheet with 5 basis points in margin expansion. Five basis points. The only thing I'd add to Tracey's comment is I think, you know, in that four basis points of margin expansion, we took a conservative point of view. Roughly half or a little more than half of Apollo Bank's loan book is either adjustable or variable rate lending. There's, you know, a fair amount of asset sensitivity in that, not fully knowing the deposit beta or seeing the deposit beta over time. We took what I think is a conservative approach, and as Tracey mentioned, we modeled them at four. We're modeling sort of Seacoast in that four to six basis point margin expansion. We think generally it'll move in line with the Seacoast balance sheet's asset sensitivity. Got it. Thank you for taking my questions. Thank you. As a reminder, if you have a question, you can enter the queue by pressing star then one on your touch tone phone. Our next question comes from David Feaster. Please go ahead. Hey, good morning, everybody. Hey, David. You guys have obviously been extremely successful over the past few months on the hiring front. Just curious how you think about supplementing the team there with new hiring opportunities in Miami. You know, especially on the C&I front, it seems like there could be a tremendous opportunity to help accelerate some C&I production there. Just curious your thoughts on that. Thanks, David. As you've seen, you know, we've had a tremendous track record over the last 12-24 months in hiring into the company. Importantly, the vast majority of that hiring has come out of regional and national banks and, you know, very high quality bankers that are bringing great opportunities in the C&I space. Most recently, we just also announced the hiring of James Stallings, our new Chief Credit Officer, who has a strong background in sort of middle market and C&I. He also came out of a large regional bank. When you look at what we've been able to do, there's definitely demand to join the Seacoast franchise and be part of the growth that we're putting together here. You know, when you look at South Florida in general, it's obviously the biggest market in Florida. You know, I think there's absolutely 100% an incredible opportunity to continue to add talent into that market. You know, Eddie and his team have done a great job in Miami-Dade. They've been, you know, they lean a little harder into CRE in the market, which is, you know, totally in line with most community banks. Our ability to sort of bolt on C&I, particularly in the lower end of middle market, I think will be a great addition to the team there and give us a lot more scale in the marketplace. I'm very excited about that opportunity. I've been very pleased with our team's ability here to recruit high quality talent. I've been incredibly impressed with the team we've been able to bring in the organization. I think this just opens up more opportunities to do that. That's great. Maybe just a bit more high level, Miami is obviously a competitive market, extremely competitive. Not that the state's not competitive everywhere, but I'm just curious your thoughts on competition in Miami and how you've been able to really differentiate yourself in that market. Just any thoughts on how pricing is in Miami, relative to the rest of your footprint. Just a couple comments. One, you know, obviously it is competitive. There is a lot of banks in Miami, but it's also a very large market. When you look at it on a relative basis, I think it's generally in line with other markets, just a big market. You know, I'd say when we looked for the right opportunity to enter Miami-Dade, Apollo Bank was our number one sort of choice, and that we wanted to partner with Eddie and the Apollo Group, primarily because they are so well respected in the market. You know, they're an incredible team, they're very well thought of, they have great relationships, and you know, their competitive advantage is the service they provide to clients and the service they can provide to prospects. You know, it's the same for Seacoast. You know, we go above and beyond to provide an experience for our clients. We consistently execute for our clients, and we deliver, and Eddie and his team does as well. I think that the combination of the two will give us even a more competitive sort of positioning there. Having a branch footprint that the Apollo team brings in terms of franchise and brand identity on top of our ability to, you know, bring our level of service and our level of consistency and execution for our clients, I think provides tremendous upside, David. Okay, that's helpful. I know you touched on this in the prepared remarks and that revenue synergies are not modeled, but how do you think about cross-selling some of your fee lines across their business? Where do you see the most opportunity? Just given the uniqueness of the Miami market, are there any other products or services that you think you could maybe bolt on, to help service some more of the international clients? Yeah, I would say, David, you know, our focus will be on domestic enterprises and domestic operators. That being said, the Apollo team has a great small group that focuses on global banking and international, and we'll want to adopt that and bring that into the franchise. Our focus will be on domestic, and at the outset it'll be primarily on commercial and commercial real estate and C&I opportunities in the market. Importantly, what I think probably the biggest thing we'll bring to the market is our wealth management business. You know, that's been, you know, on a tear really growing in the Seacoast franchise. I think given the quality and depth of the portfolio of clients that we immediately will have access to through the team there, I think we'll bring something new to them that they haven't had yet and something that'll provide a great experience to their clients. You know, I'd say the biggest upside and the biggest opportunity here is to put wealth management in line and on top of commercial banking in the marketplace. All right. That's helpful. Thanks. Congrats on the deal. Awesome. Thanks, David. Our next question comes from Brady Gailey. Your line is open. Please go ahead. Hey, thank you. Good morning, guys. Hey, Brady. Chuck, you just mentioned compliance a couple times. You just said they had some global banking international businesses. What's the size of that at Apollo? And maybe just talk about in the new company with Seacoast. Is that something that you'll be looking to grow and pursue on the global international side? I would describe it like this, Brady. You know, when we looked at it, one of our key focuses was to make sure we understood what they were doing there, and we came away incredibly impressed, actually. Mm-hmm. They've done a great job with the compliance group around that. It's a small portion of the portfolio, you know, less than a third of the big bank is focused on it. It's very tight, and it's primarily a word-of-mouth business. I don't know that we'll sort of look to expand that in the near term, but we will be bolting it on to Seacoast and we will be continuing to operate that business. But our focus will be on growing out commercial banking primarily and on domestic operators in Miami-Dade. Okay. All right. International is less than a third of Apollo's loans. What sort of global or international loans are they doing? Is it a specific niche or what are the global loans actually? Yeah. I'll clarify. It's less than a third of the deposit base. On the loan side, it's nearly all domestic operators. It's, you know, above 90% is lending in the US. The vast majority and primary of the assets are in the United States. Got it. Okay. You know, the mark, I know some of it is, or half of it is the CECL double count, but I mean, this is a big mark on this target of almost 5%. Is there something that you're particularly looking at here when you're putting on a mark of that size? I think I heard you guys in your comments say kind of included a more of a recessionary scenario. I can see why that's pushing it up. Is there anything you're kind of keeping your eye on here from a loan point of view that would have caused such a kind of large mark here? We have no concerns. If you look at the PCD piece, you'll see almost very little specific reserves. The loan-to-values here are very good. Primarily is we ran an S3 downside Moody's scenario on the book just as a purely out of conservatism. I don't know, Tracey, if you have anything you'd add to that. Yeah. It was just to take a conservative approach. Yeah, sure. I think what you see in the transaction numbers includes the impact of that CECL double count, which obviously is meaningful. Also there's a meaningful percentage of the portfolio that's non-owner occupied income producing commercial real estate, which is a segment that carries a relatively higher mark. You know, as with any potential transaction, we completed really a robust credit due diligence process. In this case, our work included examining loan files for over 70% of the total loan balance. Based on that diligence, we estimated expected losses. We identified about 10% of the portfolio as PCD, meaning they demonstrated evidence of credit deterioration since origination. Those specifically identified PCD loans were examined for the extent to which cash flows and collateral would be available to offset losses. In nearly every case, there was adequate collateral such that no specific reserve was required. Really you're looking at the non-PCD population with a modeled expected losses by segment. And we use assumptions from, the Moody's economic forecast, and in this case, you know, leaned into the S3 recession scenario, just generating a, you know, a level of conservatism in the mark that we think would be appropriate. We'll update all of those valuations at the closing date. The environment may certainly look different at the time, but, yeah, we think it fits with our credit profile. Yeah. Essentially, we just wanted to lock in the downside risk rate given the inverted curve and other things you're starting to hear in the marketplace. That's why we took the mark we took. Yeah. Okay. Yeah. That's understandable. You know, this is a bank that has a decent amount of CRE, which I get it's South Florida, especially Miami. But are there any kind of notable, you know, niches within CRE that this bank is more involved than others like, you know, office or retail? Like, do they have any sort of specialty CRE that's outside or is this kind of more diversified and just typical South Florida CRE? Yeah. In our diligence, we looked at, you know, a large proportion of the loans and the CRE book includes a mix of property types and industry categories. Really, the distribution looks much like the Seacoast portfolio. Certainly fits within the credit risk appetite. There's no specialty items I think we would call out. Yeah. Top four sort of asset classes are office, retail, medical, and hotel, which lines up pretty close to most community banks. Okay. It's very much just simply a community bank operating in Miami-Dade County. Looks a lot like any other community bank. Okay. Then finally for me, you know, the ownership structure is just unique at this target with, you know, 15% owned by this minority investor, and then the exchange ratios are different depending on who owns it. Any additional color on kind of that unique ownership base and why the exchange ratios are different? Yeah. I hope maybe I can simplify my description. Really, there was an agreement between the holding company shareholders and the minority owners that each group would receive consideration that reflected their proportional percentage ownership of the common shares of the bank. Since there are option holders and warrant holders at the holding company, the minority interest holders at the bank received a slightly higher exchange ratio to offset the value of those options and just keep the ownership proportional. Okay. The 15% minority ownership, is that something that when the bank was founded in 2010, was that in place or is that something that's happened along the way? That's been in place since the founding. Yep. Okay. All right. Great. Thanks for the color, guys. Thank you, Brady. Thank you. That's all the time we have for questions at this time. I will now turn the call back over to Mr. Shaffer for closing remarks. Thank you, Vanessa, and thank you all for joining us this morning. We're excited about the opportunity here. I think there's meaningful growth opportunity as we enter the market, and I'm looking forward to working with Eddie and the Apollo team. It's exciting times ahead. Thank you all for your time this morning. Thank you, ladies and gentlemen. This concludes our conference. We thank you for participating. You may now disconnect.