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SouthStateCorp.

ISIN: US8404411097

WKN: A116V6

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SouthStateCorp. · ISIN: US8404411097 · PR Newswire (ID: 20240125CL21246)

PR Newswire

Short Seller

Technical Analysis

25 January 2024 10:05PM

SouthState Corporation Reports Fourth Quarter 2023 Results, Declares Quarterly Cash Dividend

WINTER HAVEN, Fla., Jan. 25, 2024 /PRNewswire/ -- SouthState Corporation (NYSE: SSB) today released its unaudited results of operations and other financial information for the three-month and twelve-month periods ended December 31, 2023.

"We ended a year that demonstrated the resilience of the SouthState deposit franchise in the face of unprecedented change. In addition, loans grew 7% and we materially built our reserve", commented John C. Corbett, SouthState's Chief Executive Officer. "While we remain cautious of the lag effects of the recent rate increases, we see tremendous opportunity coming out of the cycle. Since the pandemic, Florida has grown by over one million people and SouthState benefits from operating in 4 of the 5 fastest growing states in the country. We are in a great position to deliver outsized results for our shareholders, and I want to thank our team for their hard work and service to our clients during 2023."

Highlights of the fourth quarter of 2023 include:

Returns

Reported Diluted Earnings per Share ("EPS") of $1.39; Adjusted Diluted EPS (Non-GAAP) of $1.67
Net Income of $106.8 million; Adjusted Net Income (Non-GAAP) of $128.3 million
Return on Average Common Equity of 8.0%; Return on Average Tangible Common Equity (Non-GAAP) of 13.5% and Adjusted Return on Average Tangible Common Equity (Non-GAAP) of 16.1%*
Return on Average Assets ("ROAA") of 0.94% and Adjusted ROAA (Non-GAAP) of 1.13%*
Pre-Provision Net Revenue ("PPNR") per Weighted Average Diluted Share (Non-GAAP) of $2.27
Book Value per Share of $72.78; Tangible Book Value ("TBV") per Share (Non-GAAP) of $46.32

∗ Annualized percentages

Performance

Net Interest Income of $354 million; Core Net Interest Income (excluding loan accretion) (Non-GAAP) of $350 million
Net Interest Margin ("NIM"), non-tax equivalent of 3.47% and tax equivalent (Non-GAAP) of 3.48%
Net charge-offs of $7.3 million, or 0.09% annualized; $9.9 million Provision for Credit Losses ("PCL"), including release for unfunded commitments; total allowance for credit losses ("ACL") plus reserve for unfunded commitments of 1.58%; year-to-date net charge-offs of $24.9 million, or 0.08%
Noninterest Income of $65 million, down $7 million compared to the prior quarter, primarily due to a decrease in correspondent banking and capital markets income; Noninterest Income represented 0.58% of average assets for the fourth quarter of 2023
Recorded FDIC special assessment expense of $26 million
Efficiency Ratio of 63% and Adjusted Efficiency Ratio (Non-GAAP) of 57%

Balance Sheet

Loans increased $372 million, or 5% annualized, led by consumer real estate; ending loan to deposit ratio of 87%
Deposits increased $114 million, or 1% annualized, despite a $339 million decline in brokered CDs; excluding brokered CDs, deposits increased $453 million, or 5% annualized, from prior quarter
Total deposit cost of 1.60%, up 0.16% from prior quarter, resulting in a 30% cycle-to-date beta
Repurchased a total of 100,000 shares during 4Q 2023 at a weighted average price of $67.45
Strong capital position with Tangible Common Equity, Total Risk-Based Capital, Tier 1 Leverage, and Tier 1 Common Equity ratios of 8.2%, 14.1%, 9.4%, and 11.8%, respectively†

† Preliminary

Subsequent Events

The Board of Directors of the Company declared a quarterly cash dividend on its common stock of $0.52 per share, payable on February 16, 2024 to shareholders of record as of February 9, 2024

Financial Performance


	Three Months Ended										Twelve Months Ended
(Dollars in thousands, except per share data)	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Dec. 31,		Dec. 31,
INCOME STATEMENT	2023		2023		2023		2023		2022		2023		2022
Interest Income
Loans, including fees (1)	$	459,880	$	443,805	$	419,355	$	393,366	$	359,552	$	1,716,405	$	1,178,026
Investment securities, trading securities, federal funds sold and securities
purchased under agreements to resell		55,555		56,704		58,698		57,043		64,337		228,001		218,999
Total interest income		515,435		500,509		478,053		450,409		423,889		1,944,406		1,397,025
Interest Expense
Deposits		149,584		133,944		100,787		55,942		19,945		440,257		36,984
Federal funds purchased, securities sold under agreements
to repurchase, and other borrowings		11,620		11,194		15,523		13,204		7,940		51,541		24,370
Total interest expense		161,204		145,138		116,310		69,146		27,885		491,798		61,354
Net Interest Income		354,231		355,371		361,743		381,263		396,004		1,452,608		1,335,671
Provision for credit losses		9,893		32,709		38,389		33,091		47,142		114,082		81,855
Net Interest Income after Provision for Credit Losses		344,338		322,662		323,354		348,172		348,862		1,338,526		1,253,816
Noninterest Income		65,489		72,848		77,214		71,355		63,392		286,906		309,247
Noninterest Expense
Operating expense		245,774		238,042		240,818		231,093		227,957		955,727		898,813
Merger, branch consolidation and severance related expense		1,778		164		1,808		9,412		1,542		13,162		30,888
FDIC special assessment		25,691		—		—		—		—		25,691		—
Total noninterest expense		273,243		238,206		242,626		240,505		229,499		994,580		929,701
Income before Income Taxes Provision		136,584		157,304		157,942		179,022		182,755		630,852		633,362
Income taxes provision		29,793		33,160		34,495		39,096		39,253		136,544		137,313
Net Income	$	106,791	$	124,144	$	123,447	$	139,926	$	143,502	$	494,308	$	496,049

Adjusted Net Income (non-GAAP) (2)
Net Income (GAAP)	$	106,791	$	124,144	$	123,447	$	139,926	$	143,502	$	494,308	$	496,049
Securities losses (gains), net of tax		2		—		—		(35)		—		(33)		(24)
Initial provision for credit losses - NonPCD loans and UFC from ACBI, net of tax		—		—		—		—		—		—		13,492
Merger, branch consolidation and severance related expense, net of tax		1,391		130		1,414		7,356		1,211		10,291		24,163
FDIC special assessment, net of tax		20,087		—		—		—		—		20,087		—
Adjusted Net Income (non-GAAP)	$	128,271	$	124,274	$	124,861	$	147,247	$	144,713	$	524,653	$	533,680

Basic earnings per common share	$	1.40	$	1.63	$	1.62	$	1.84	$	1.90	$	6.50	$	6.65
Diluted earnings per common share	$	1.39	$	1.62	$	1.62	$	1.83	$	1.88	$	6.46	$	6.60
Adjusted net income per common share - Basic (non-GAAP) (2)	$	1.69	$	1.63	$	1.64	$	1.94	$	1.91	$	6.90	$	7.16
Adjusted net income per common share - Diluted (non-GAAP) (2)	$	1.67	$	1.62	$	1.63	$	1.93	$	1.90	$	6.86	$	7.10
Dividends per common share	$	0.52	$	0.52	$	0.50	$	0.50	$	0.50	$	2.04	$	1.98
Basic weighted-average common shares outstanding		76,100,187		76,139,170		76,057,977		75,902,440		75,639,640		76,050,730		74,550,708
Diluted weighted-average common shares outstanding		76,634,100		76,571,430		76,417,537		76,388,954		76,326,777		76,479,557		75,181,305
Effective tax rate		21.81 %		21.08 %		21.84 %		21.84 %		21.48 %		21.64 %		21.68 %

Performance and Capital Ratios


	Three Months Ended															Twelve Months Ended
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,		Dec. 31,
	2023			2023			2023			2023			2022			2023		2022
PERFORMANCE RATIOS
Return on average assets (annualized)		0.94	%		1.10	%		1.11	%		1.29	%		1.28	%	1.11	%	1.12	%
Adjusted return on average assets (annualized) (non-GAAP) (2)		1.13	%		1.10	%		1.12	%		1.35	%		1.29	%	1.17	%	1.20	%
Return on average common equity (annualized)		7.99	%		9.24	%		9.34	%		10.96	%		11.41	%	9.37	%	9.84	%
Adjusted return on average common equity (annualized) (non-GAAP) (2)		9.60	%		9.25	%		9.45	%		11.53	%		11.50	%	9.94	%	10.59	%
Return on average tangible common equity (annualized) (non-GAAP) (3)		13.53	%		15.52	%		15.81	%		18.81	%		20.17	%	15.87	%	17.16	%
Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) (3)		16.12	%		15.54	%		15.98	%		19.75	%		20.33	%	16.80	%	18.40	%
Efficiency ratio (tax equivalent)		63.43	%		54.00	%		53.59	%		51.41	%		47.96	%	55.50	%	54.21	%
Adjusted efficiency ratio (non-GAAP) (4)		56.89	%		53.96	%		53.18	%		49.34	%		47.63	%	53.27	%	52.34	%
Dividend payout ratio (5)		37.01	%		31.84	%		30.75	%		27.09	%		26.40	%	31.34	%	29.54	%
Book value per common share	$	72.78		$	68.81		$	69.61		$	69.19		$	67.04
Tangible book value per common share (non-GAAP) (3)	$	46.32		$	42.26		$	42.96		$	42.40		$	40.09

CAPITAL RATIOS
Equity-to-assets		12.3	%		11.6	%		11.8	%		11.7	%		11.6	%
Tangible equity-to-tangible assets (non-GAAP) (3)		8.2	%		7.5	%		7.6	%		7.5	%		7.2	%
Tier 1 leverage (6)		9.4	%		9.3	%		9.2	%		9.1	%		8.7	%
Tier 1 common equity (6)		11.8	%		11.5	%		11.3	%		11.1	%		11.0	%
Tier 1 risk-based capital (6)		11.8	%		11.5	%		11.3	%		11.1	%		11.0	%
Total risk-based capital (6)		14.1	%		13.8	%		13.5	%		13.3	%		13.0	%

Balance Sheet


	Ending Balance
(Dollars in thousands, except per share and share data)	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
BALANCE SHEET	2023		2023		2023		2023		2022
Assets
Cash and due from banks	$	510,922	$	514,917	$	552,900	$	558,158	$	548,387
Federal funds sold and interest-earning deposits with banks		487,955		814,220		960,849		1,438,504		764,176
Cash and cash equivalents		998,877		1,329,137		1,513,749		1,996,662		1,312,563

Trading securities, at fair value		31,321		114,154		56,580		16,039		31,263
Investment securities:
Securities held to maturity		2,487,440		2,533,713		2,585,155		2,636,673		2,683,241
Securities available for sale, at fair value		4,784,388		4,623,618		4,949,334		5,159,999		5,326,822
Other investments		192,043		187,152		196,728		217,991		179,717
Total investment securities		7,463,871		7,344,483		7,731,217		8,014,663		8,189,780
Loans held for sale		50,888		27,443		42,951		27,289		28,968
Loans:
Purchased credit deteriorated		1,108,813		1,171,543		1,269,983		1,325,400		1,429,731
Purchased non-credit deteriorated		4,796,913		5,064,254		5,275,913		5,620,290		5,943,092
Non-acquired		26,482,763		25,780,875		24,990,889		23,750,452		22,805,039
Less allowance for credit losses		(456,573)		(447,956)		(427,392)		(370,645)		(356,444)
Loans, net		31,931,916		31,568,716		31,109,393		30,325,497		29,821,418
Premises and equipment, net		519,197		516,583		518,353		517,146		520,635
Bank owned life insurance		991,454		984,881		979,494		967,750		964,708
Mortgage servicing rights		85,164		89,476		87,539		85,406		86,610
Core deposit and other intangibles		88,776		95,094		102,256		109,603		116,450
Goodwill		1,923,106		1,923,106		1,923,106		1,923,106		1,923,106
Other assets		817,454		996,055		875,694		940,666		923,195
Total assets	$	44,902,024	$	44,989,128	$	44,940,332	$	44,923,827	$	43,918,696

Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing	$	10,649,274	$	11,158,431	$	11,489,483	$	12,422,583	$	13,168,656
Interest-bearing		26,399,635		25,776,767		25,252,395		23,979,009		23,181,967
Total deposits		37,048,909		36,935,198		36,741,878		36,401,592		36,350,623
Federal funds purchased and securities
sold under agreements to repurchase		489,185		513,304		581,446		544,108		556,417
Other borrowings		491,904		391,997		792,090		1,292,182		392,275
Reserve for unfunded commitments		56,303		62,347		63,399		85,068		67,215
Other liabilities		1,282,625		1,855,295		1,471,509		1,351,873		1,477,239
Total liabilities		39,368,926		39,758,141		39,650,322		39,674,823		38,843,769

Shareholders' equity:
Common stock - $2.50 par value; authorized 160,000,000 shares		190,055		190,043		189,990		189,649		189,261
Surplus		4,240,413		4,238,753		4,228,910		4,224,503		4,215,712
Retained earnings		1,685,166		1,618,080		1,533,508		1,448,636		1,347,042
Accumulated other comprehensive loss		(582,536)		(815,889)		(662,398)		(613,784)		(677,088)
Total shareholders' equity		5,533,098		5,230,987		5,290,010		5,249,004		5,074,927
Total liabilities and shareholders' equity	$	44,902,024	$	44,989,128	$	44,940,332	$	44,923,827	$	43,918,696

Common shares issued and outstanding		76,022,039		76,017,366		75,995,979		75,859,665		75,704,563

Net Interest Income and Margin


	Three Months Ended
	Dec. 31, 2023					Sep. 30, 2023					Dec. 31, 2022
(Dollars in thousands)	Average		Income/		Yield/	Average		Income/		Yield/	Average		Income/		Yield/
YIELD ANALYSIS	Balance		Expense		Rate	Balance		Expense		Rate	Balance		Expense		Rate
Interest-Earning Assets:
Federal funds sold and interest-earning deposits with banks	$	814,244	$	10,029	4.89 %	$	822,805	$	10,831	5.22 %	$	1,849,877	$	16,491	3.54 %
Investment securities		7,382,800		45,526	2.45 %		7,714,079		45,873	2.36 %		8,286,894		47,846	2.29 %
Loans held for sale		28,878		552	7.58 %		34,736		517	5.90 %		25,633		401	6.21 %
Total loans, excluding PPP		32,234,772		459,316	5.65 %		31,799,469		443,275	5.53 %		29,480,843		359,120	4.83 %
Total PPP loans		4,683		12	1.02 %		5,291		13	0.97 %		12,489		31	0.98 %
Total loans held for investment		32,239,455		459,328	5.65 %		31,804,760		443,288	5.53 %		29,493,332		359,151	4.83 %
Total interest-earning assets		40,465,377		515,435	5.05 %		40,376,380		500,509	4.92 %		39,655,736		423,889	4.24 %
Noninterest-earning assets		4,572,255					4,464,939					4,774,158
Total Assets	$	45,037,632				$	44,841,319				$	44,429,894

Interest-Bearing Liabilities ("IBL"):
Transaction and money market accounts	$	18,957,647	$	107,994	2.26 %	$	18,291,300	$	93,465	2.03 %	$	17,044,865	$	16,901	0.39 %
Savings deposits		2,680,065		1,888	0.28 %		2,845,250		1,919	0.27 %		3,536,330		1,021	0.11 %
Certificates and other time deposits		4,294,555		39,702	3.67 %		4,413,855		38,560	3.47 %		2,444,361		2,023	0.33 %
Federal funds purchased		256,672		3,453	5.34 %		236,732		3,128	5.24 %		186,232		1,694	3.61 %
Repurchase agreements		265,839		1,458	2.18 %		303,339		1,163	1.52 %		363,336		253	0.28 %
Other borrowings		438,701		6,709	6.07 %		456,187		6,903	6.00 %		435,806		5,993	5.46 %
Total interest-bearing liabilities		26,893,479		161,204	2.38 %		26,546,663		145,138	2.17 %		24,010,930		27,885	0.46 %
Noninterest-bearing liabilities ("Non-IBL")		12,844,262					12,965,744					15,427,380
Shareholders' equity		5,299,891					5,328,912					4,991,584
Total Non-IBL and shareholders' equity		18,144,153					18,294,656					20,418,964
Total Liabilities and Shareholders' Equity	$	45,037,632				$	44,841,319				$	44,429,894
Net Interest Income and Margin (Non-Tax Equivalent)			$	354,231	3.47 %			$	355,371	3.49 %			$	396,004	3.96 %
Net Interest Margin (Tax Equivalent) (non-GAAP)					3.48 %					3.50 %					3.99 %
Total Deposit Cost (without Debt and Other Borrowings)					1.60 %					1.44 %					0.21 %
Overall Cost of Funds (including Demand Deposits)					1.69 %					1.52 %					0.29 %

Total Accretion on Acquired Loans (1)			$	3,870				$	4,053				$	7,350
Tax Equivalent ("TE") Adjustment			$	659				$	646				$	2,397

(1) The remaining loan discount on acquired loans to be accreted into loan interest income totals $51.3 million as of December 31, 2023.

Noninterest Income and Expense


	Three Months Ended										Twelve Months Ended
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Dec. 31,		Dec. 31,
(Dollars in thousands)	2023		2023		2023		2023		2022		2023		2022
Noninterest Income:
Fees on deposit accounts	$	33,225	$	32,830	$	33,101	$	29,859	$	33,612	$	129,015	$	124,810
Mortgage banking income (loss)		2,191		2,478		4,354		4,332		(545)		13,355		17,790
Trust and investment services income		10,131		9,556		9,823		9,937		9,867		39,447		39,019
Securities (losses) gains, net		(2)		—		—		45		—		43		30
Correspondent banking and capital markets income		16,081		24,808		27,734		21,956		16,760		90,579		92,910
Expense on centrally-cleared variation margin		(12,677)		(11,892)		(8,547)		(8,362)		(8,451)		(41,478)		(14,155)
Total correspondent banking and capital markets income		3,404		12,916		19,187		13,594		8,309		49,101		78,755
Bank owned life insurance income		6,567		7,039		6,271		6,813		6,723		26,690		24,311
Other		9,973		8,029		4,478		6,775		5,426		29,255		24,532
Total Noninterest Income	$	65,489	$	72,848	$	77,214	$	71,355	$	63,392	$	286,906	$	309,247

Noninterest Expense:
Salaries and employee benefits	$	145,850	$	146,146	$	147,342	$	144,060	$	140,440	$	583,398	$	554,704
Occupancy expense		22,715		22,251		22,196		21,533		22,412		88,695		89,501
Information services expense		22,000		21,428		21,119		19,925		19,847		84,472		79,701
OREO and loan related (income) expense		948		613		(14)		169		78		1,716		369
Business development and staff related		7,492		5,995		6,672		5,957		5,851		26,116		20,133
Amortization of intangibles		6,615		6,616		7,028		7,299		8,027		27,558		33,205
Professional fees		7,025		3,456		4,364		3,702		3,756		18,547		15,331
Supplies and printing expense		2,761		2,623		2,554		2,640		2,411		10,578		9,621
FDIC assessment and other regulatory charges		8,325		8,632		9,819		6,294		6,589		33,070		23,033
Advertising and marketing		2,826		3,009		1,521		2,118		2,669		9,474		8,888
Other operating expenses		19,217		17,273		18,217		17,396		15,877		72,103		64,327
Merger, branch consolidation and severance related expense		1,778		164		1,808		9,412		1,542		13,162		30,888
FDIC special assessment		25,691		—		—		—		—		25,691		—
Total Noninterest Expense	$	273,243	$	238,206	$	242,626	$	240,505	$	229,499	$	994,580	$	929,701

Loans and Deposits

The following table presents a summary of the loan portfolio by type:


	Ending Balance
(Dollars in thousands)	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
LOAN PORTFOLIO (7)	2023		2023		2023		2023		2022
Construction and land development * †	$	2,923,514	$	2,776,241	$	2,817,125	$	2,749,290	$	2,860,360
Investor commercial real estate*		9,227,968		9,372,683		9,187,948		8,957,507		8,769,201
Commercial owner occupied real estate		5,497,671		5,539,097		5,585,951		5,522,514		5,460,193
Commercial and industrial		5,504,539		5,458,229		5,378,294		5,321,306		5,313,483
Consumer real estate *		7,993,450		7,608,145		7,275,495		6,860,831		6,475,210
Consumer/other		1,241,347		1,262,277		1,291,972		1,284,694		1,299,415
Total Loans	$	32,388,489	$	32,016,672	$	31,536,785	$	30,696,142	$	30,177,862

* Single family home construction-to-permanent loans originated by the Company's mortgage banking division are included in construction and land development category until completion. Investor commercial real estate loans include commercial non-owner occupied real estate and other income producing property. Consumer real estate includes consumer owner occupied real estate and home equity loans.

† Includes single family home construction-to-permanent loans of $715.5 million, $863.1 million, $928.4 million, $893.7 million, and $904.1 million, for the quarters ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.


	Ending Balance
(Dollars in thousands)	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
DEPOSITS	2023		2023		2023		2023		2022
Noninterest-bearing checking	$	10,649,274	$	11,158,431	$	11,489,483	$	12,422,583	$	13,168,656
Interest-bearing checking		7,978,799		7,806,243		8,185,609		8,316,023		8,955,519
Savings		2,632,212		2,760,166		2,931,320		3,156,214		3,464,351
Money market		11,538,671		10,756,431		9,710,032		8,388,275		8,342,111
Time deposits		4,249,953		4,453,927		4,425,434		4,118,497		2,419,986
Total Deposits	$	37,048,909	$	36,935,198	$	36,741,878	$	36,401,592	$	36,350,623

Core Deposits (excludes Time Deposits)	$	32,798,956	$	32,481,271	$	32,316,444	$	32,283,095	$	33,930,637

Asset Quality


	Ending Balance
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
(Dollars in thousands)	2023		2023		2023		2023		2022
NONPERFORMING ASSETS:
Non-acquired
Non-acquired nonaccrual loans and restructured loans on nonaccrual	$	110,467	$	105,856	$	104,772	$	68,176	$	44,671
Accruing loans past due 90 days or more		11,305		783		3,620		2,667		2,358
Non-acquired OREO and other nonperforming assets		711		449		227		186		245
Total non-acquired nonperforming assets		122,483		107,088		108,619		71,029		47,274
Acquired
Acquired nonaccrual loans and restructured loans on nonaccrual		59,755		57,464		60,734		52,795		59,554
Accruing loans past due 90 days or more		1,174		1,821		571		983		1,992
Acquired OREO and other nonperforming assets		712		378		981		3,446		922
Total acquired nonperforming assets		61,641		59,663		62,286		57,224		62,468
Total nonperforming assets	$	184,124	$	166,751	$	170,905	$	128,253	$	109,742


	Three Months Ended
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
	2023		2023		2023		2023		2022
ASSET QUALITY RATIOS (7):
Allowance for credit losses as a percentage of loans		1.41 %		1.40 %		1.36 %		1.21 %		1.18 %
Allowance for credit losses, including reserve for unfunded commitments, as a percentage of loans		1.58 %		1.59 %		1.56 %		1.48 %		1.40 %
Allowance for credit losses as a percentage of nonperforming loans		249.90 %		269.98 %		251.86 %		297.42 %		328.29 %
Net charge-offs (recoveries) as a percentage of average loans (annualized)		0.09 %		0.16 %		0.04 %		0.01 %		0.01 %
Total nonperforming assets as a percentage of total assets		0.41 %		0.37 %		0.38 %		0.29 %		0.25 %
Nonperforming loans as a percentage of period end loans		0.56 %		0.52 %		0.54 %		0.41 %		0.36 %

Current Expected Credit Losses ("CECL")

Below is a table showing the roll forward of the ACL and UFC for the fourth quarter of 2023:

Allowance for Credit Losses ("ACL and UFC")

(Dollars in thousands)

NonPCD ACL

PCD ACL

Total ACL

UFC

Ending balance 9/30/2023

409,850

38,106

447,956

62,347

Charge offs

(8,398)

—

(8,398)

—

Acquired charge offs

(1,307)

(768)

(2,075)

—

Recoveries

1,416

—

1,416

—

Acquired recoveries

788

948

1,736

—

Provision (recovery) for credit losses

21,527

(5,589)

15,938

(6,044)

Ending balance 12/31/2023

423,876

32,697

456,573

56,303

Period end loans

31,279,676

1,108,813

32,388,489

N/A

Allowance for Credit Losses to Loans

1.36 %

2.95 %

1.41 %

N/A

Unfunded commitments (off balance sheet) *

8,457,055

Reserve to unfunded commitments (off balance sheet)

0.67 %

* Unfunded commitments exclude unconditionally cancelable commitments and letters of credit.

Conference Call

The Company will host a conference call to discuss its fourth quarter results at 9:00 a.m. Eastern Time on January 26, 2024. Callers wishing to participate may call toll-free by dialing (888) 350-3899 within the US and (646) 960-0343 for all other locations. The numbers for international participants are listed at https://events.q4irportal.com/custom/access/2324/. The conference ID number is 4200408. Alternatively, individuals may listen to the live webcast of the presentation by visiting SouthStateBank.com. An audio replay of the live webcast is expected to be available by the evening of January 26, 2024 on the Investor Relations section of SouthStateBank.com.

SouthState Corporation is a financial services company headquartered in Winter Haven, Florida. SouthState Bank, N.A., the Company's nationally chartered bank subsidiary, provides consumer, commercial, mortgage and wealth management solutions to more than one million customers throughout Florida, Alabama, Georgia, the Carolinas and Virginia. The Bank also serves clients coast to coast through its correspondent banking division. Additional information is available at SouthStateBank.com.

Non-GAAP Measures

Statements included in this press release include non-GAAP measures and should be read along with the accompanying tables that provide a reconciliation of non-GAAP measures to GAAP measures. Although other companies may use calculation methods that differ from those used by SouthState for non-GAAP measures, management believes that these non-GAAP measures provide additional useful information, which allows readers to evaluate the ongoing performance of the Company. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP.


(Dollars and shares in thousands, except per share data)	Three Months Ended
PRE-PROVISION NET REVENUE ("PPNR") (NON-GAAP)	Dec. 31, 2023			Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022
Net income (GAAP)	$	106,791		$	124,144		$	123,447		$	139,926		$	143,502
Provision for credit losses		9,893			32,709			38,389			33,091			47,142
Tax provision		29,793			33,160			34,495			39,096			39,253
Merger, branch consolidation and severance related expense		1,778			164			1,808			9,412			1,542
FDIC special assessment		25,691			—			—			—			—
Securities losses (gains)		2			—			—			(45)			—
Pre-provision net revenue (PPNR) (Non-GAAP)	$	173,948		$	190,177		$	198,139		$	221,480		$	231,439

Average asset balance (GAAP)	$	45,037,632		$	44,841,319		$	44,628,124		$	44,104,478		$	44,429,894
PPNR ROAA		1.53	%		1.68	%		1.78	%		2.04	%		2.07	%

Diluted weighted-average common shares outstanding		76,634			76,571			76,418			76,389			76,327
PPNR per weighted-average common shares outstanding	$	2.27		$	2.48		$	2.59		$	2.90		$	3.03


(Dollars in thousands)	Three Months Ended
CORE NET INTEREST INCOME (NON-GAAP)	Dec. 31, 2023			Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022
Net interest income (GAAP)	$	354,231		$	355,371		$	361,743		$	381,263		$	396,004
Less:
Total accretion on acquired loans		3,870			4,053			5,481			7,398			7,350
Core net interest income (Non-GAAP)	$	350,361		$	351,318		$	356,262		$	373,865		$	388,654

NET INTEREST MARGIN ("NIM"), TE (NON-GAAP)
Net interest income (GAAP)	$	354,231		$	355,371		$	361,743		$	381,263		$	396,004
Total average interest-earning assets		40,465,377			40,376,380			40,127,836			39,409,340			39,655,736
NIM, non-tax equivalent		3.47	%		3.49	%		3.62	%		3.92	%		3.96	%

Tax equivalent adjustment (included in NIM, TE)		659			646			698			1,020			2,397
Net interest income, tax equivalent (Non-GAAP)	$	354,890		$	356,017		$	362,441		$	382,283		$	398,401
NIM, TE (Non-GAAP)		3.48	%		3.50	%		3.62	%		3.93	%		3.99	%


	Three Months Ended															Twelve Months Ended
(Dollars in thousands, except per share data)	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,			Dec. 31,
RECONCILIATION OF GAAP TO NON-GAAP	2023			2023			2023			2023			2022			2023			2022
Adjusted Net Income (non-GAAP) (2)
Net income (GAAP)	$	106,791		$	124,144		$	123,447		$	139,926		$	143,502		$	494,308		$	496,049
Securities losses (gains), net of tax		2			—			—			(35)			—			(33)			(24)
PCL - NonPCD loans and UFC, net of tax		—			—			—			—			—			—			13,492
Merger, branch consolidation and severance related expense, net of tax		1,391			130			1,414			7,356			1,211			10,291			24,163
FDIC special assessment, net of tax		20,087			—			—			—			—			20,087			—
Adjusted net income (non-GAAP)	$	128,271		$	124,274		$	124,861		$	147,247		$	144,713		$	524,653		$	533,680

Adjusted Net Income per Common Share - Basic (2)
Earnings per common share - Basic (GAAP)	$	1.40		$	1.63		$	1.62		$	1.84		$	1.90		$	6.50		$	6.65
Effect to adjust for securities losses (gains)		0.00			—			—			(0.00)			—			(0.00)			(0.00)
Effect to adjust for PCL - NonPCD loans and UFC, net of tax		—			—			—			—			—			—			0.19
Effect to adjust for merger, branch consolidation and severance related expense, net of tax		0.03			0.00			0.02			0.10			0.01			0.14			0.32
Effect to adjust for FDIC special assessment, net of tax		0.26			—			—			—			—			0.26			—
Adjusted net income per common share - Basic (non-GAAP)	$	1.69		$	1.63		$	1.64		$	1.94		$	1.91		$	6.90		$	7.16

Adjusted Net Income per Common Share - Diluted (2)
Earnings per common share - Diluted (GAAP)	$	1.39		$	1.62		$	1.62		$	1.83		$	1.88		$	6.46		$	6.60
Effect to adjust for securities losses (gains)		0.00			—			—			(0.00)			—			(0.00)			(0.00)
Effect to adjust for PCL - NonPCD loans and UFC, net of tax		—			—			—			—			—			—			0.18
Effect to adjust for merger, branch consolidation and severance related expense, net of tax		0.02			0.00			0.01			0.10			0.02			0.14			0.32
Effect to adjust for FDIC special assessment, net of tax		0.26			—			—			—			—			0.26			—
Adjusted net income per common share - Diluted (non-GAAP)	$	1.67		$	1.62		$	1.63		$	1.93		$	1.90		$	6.86		$	7.10

Adjusted Return on Average Assets (2)
Return on average assets (GAAP)		0.94	%		1.10	%		1.11	%		1.29	%		1.28	%		1.11	%		1.12	%
Effect to adjust for securities losses (gains)		0.00	%		—	%		—	%		(0.00)	%		—	%		(0.00)	%		(0.00)	%
Effect to adjust for PCL - NonPCD loans and UFC, net of tax		—	%		—	%		—	%		—	%		—	%		—	%		0.03	%
Effect to adjust for merger, branch consolidation and severance related expense, net of tax		0.01	%		—	%		0.01	%		0.06	%		0.01	%		0.02	%		0.05	%
Effect to adjust for FDIC special assessment, net of tax		0.18	%		—	%		—	%		—	%		—	%		0.04	%		—	%
Adjusted return on average assets (non-GAAP)		1.13	%		1.10	%		1.12	%		1.35	%		1.29	%		1.17	%		1.20	%

Adjusted Return on Average Common Equity (2)
Return on average common equity (GAAP)		7.99	%		9.24	%		9.34	%		10.96	%		11.41	%		9.37	%		9.84	%
Effect to adjust for securities losses (gains)		0.00	%		—	%		—	%		(0.00)	%		—	%		(0.00)	%		(0.00)	%
Effect to adjust for PCL - NonPCD loans and UFC, net of tax		—	%		—	%		—	%		—	%		—	%		—	%		0.27	%
Effect to adjust for merger, branch consolidation and severance related expense, net of tax		0.11	%		0.01	%		0.11	%		0.57	%		0.09	%		0.19	%		0.48	%
Effect to adjust for FDIC special assessment, net of tax		1.50	%		—	%		—	%		—	%		—	%		0.38	%		—	%
Adjusted return on average common equity (non-GAAP)		9.60	%		9.25	%		9.45	%		11.53	%		11.50	%		9.94	%		10.59	%

Return on Average Common Tangible Equity (3)
Return on average common equity (GAAP)		7.99	%		9.24	%		9.34	%		10.96	%		11.41	%		9.37	%		9.84	%
Effect to adjust for intangible assets		5.54	%		6.28	%		6.47	%		7.85	%		8.76	%		6.50	%		7.32	%
Return on average tangible equity (non-GAAP)		13.53	%		15.52	%		15.81	%		18.81	%		20.17	%		15.87	%		17.16	%

Adjusted Return on Average Common Tangible Equity (2) (3)
Return on average common equity (GAAP)		7.99	%		9.24	%		9.34	%		10.96	%		11.41	%		9.37	%		9.84	%
Effect to adjust for securities losses (gains)		0.00	%		—	%		—	%		(0.00)	%		—	%		(0.00)	%		(0.00)	%
Effect to adjust for PCL - NonPCD loans and UFC, net of tax		—	%		—	%		—	%		—	%		—	%		—	%		0.27	%
Effect to adjust for merger, branch consolidation and severance related expense, net of tax		0.10	%		0.01	%		0.11	%		0.58	%		0.10	%		0.20	%		0.48	%
Effect to adjust for FDIC special assessment, net of tax		1.50	%		—	%		—	%		—	%		—	%		0.38	%		—	%
Effect to adjust for intangible assets		6.53	%		6.29	%		6.53	%		8.21	%		8.82	%		6.85	%		7.81	%
Adjusted return on average common tangible equity (non-GAAP)		16.12	%		15.54	%		15.98	%		19.75	%		20.33	%		16.80	%		18.40	%

Adjusted Efficiency Ratio (4)
Efficiency ratio		63.43	%		54.00	%		53.59	%		51.41	%		47.96	%		55.50	%		54.21	%
Effect to adjust for merger, branch consolidation and severance related expense		(0.43)	%		(0.04)	%		(0.41)	%		(2.07)	%		(0.33)	%		(0.76)	%		(1.87)	%
Effect to adjust for FDIC special assessment		(6.11)	%		—	%		—	%		—	%		—	%		(1.47)	%		—	%
Adjusted efficiency ratio		56.89	%		53.96	%		53.18	%		49.34	%		47.63	%		53.27	%		52.34	%

Tangible Book Value Per Common Share (3)
Book value per common share (GAAP)	$	72.78		$	68.81		$	69.61		$	69.19		$	67.04
Effect to adjust for intangible assets		(26.46)			(26.55)			(26.65)			(26.79)			(26.95)
Tangible book value per common share (non-GAAP)	$	46.32		$	42.26		$	42.96		$	42.40		$	40.09

Tangible Equity-to-Tangible Assets (3)
Equity-to-assets (GAAP)		12.32	%		11.63	%		11.77	%		11.68	%		11.56	%
Effect to adjust for intangible assets		(4.11)	%		(4.15)	%		(4.16)	%		(4.18)	%		(4.31)	%
Tangible equity-to-tangible assets (non-GAAP)		8.21	%		7.48	%		7.61	%		7.50	%		7.25	%

Certain prior period information has been reclassified to conform to the current period presentation, and these reclassifications have no impact on net income or equity as previously reported.

Footnotes to tables:
(1)	Includes loan accretion (interest) income related to the discount on acquired loans of $3.9 million, $4.1 million, $5.5 million, $7.4 million, and $7.3 million during the quarters ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
(2)	Adjusted earnings, adjusted return on average assets, adjusted EPS, and adjusted return on average equity are non-GAAP measures and exclude the gains or losses on sales of securities, merger, branch consolidation and severance related expense, initial PCL on nonPCD loans and unfunded commitments from acquisitions, and FDIC special assessments. Management believes that non-GAAP adjusted measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. Adjusted earnings and the related adjusted return measures (non-GAAP) exclude the following from net income (GAAP) on an after-tax basis: (a) pre-tax merger, branch consolidation and severance related expense of $1.8 million, $164,000, $1.8 million, $9.4 million, and $1.5 million for the quarters ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively; (b) pre-tax net securities (losses) gains of $(2,000) and $45,000 for the quarters ended December 31, 2023 and March 31, 2023, respectively; and (c) pre-tax FDIC special assessment of $25.7 million for the quarter ended December 31, 2023.
(3)	The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets. The tangible returns on equity and common equity measures also add back the after-tax amortization of intangibles to GAAP basis net income. Management believes that these non-GAAP tangible measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. The sections titled "Reconciliation of GAAP to Non-GAAP" provide tables that reconcile non-GAAP measures to GAAP.
(4)	Adjusted efficiency ratio is calculated by taking the noninterest expense excluding merger, branch consolidation and severance related expense, FDIC special assessment and amortization of intangible assets, divided by net interest income and noninterest income excluding securities gains (losses). The pre-tax amortization expenses of intangible assets were $6.6 million, $6.6 million, $7.0 million, $7.3 million, and $8.0 million for the quarters ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
(5)	The dividend payout ratio is calculated by dividing total dividends paid during the period by the total net income for the same period.
(6)	December 31, 2023 ratios are estimated and may be subject to change pending the final filing of the FR Y-9C; all other periods are presented as filed.
(7)	Loan data excludes mortgage loans held for sale.

Cautionary Statement Regarding Forward Looking Statements

Statements included in this communication, which are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on, among other things, management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and SouthState. Words and phrases such as "may," "approximately," "continue," "should," "expects," "projects," "anticipates," "is likely," "look ahead," "look forward," "believes," "will," "intends," "estimates," "strategy," "plan," "could," "potential," "possible" and variations of such words and similar expressions are intended to identify such forward-looking statements.

SouthState cautions readers that forward-looking statements are subject to certain risks, uncertainties and assumptions that are difficult to predict with regard to, among other things, timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, the following: (1) economic downturn risk, potentially resulting in deterioration in the credit markets, inflation, greater than expected noninterest expenses, excessive loan losses and other negative consequences, which risks could be exacerbated by potential negative economic developments resulting from federal spending cuts and/or one or more federal budget-related impasses or actions; (2) interest rate risk primarily resulting from the interest rate environment, the number and pace of interest rate increases, and their impact on the Bank's earnings, including from the correspondent and mortgage divisions, housing demand, the market value of the Bank's loan and securities portfolios, and the market value of SouthState's equity; (3) volatility in the financial services industry (including failures or rumors of failures of other depository institutions), along with actions taken by governmental agencies to address such turmoil, could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital; (4) the impact of increasing digitization of the banking industry and movement of customers to on-line platforms, and the possible impact on the Bank's results of operations, customer base, expenses, suppliers and operations; (5) controls and procedures risk, including the potential failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures; (6) potential deterioration in real estate values; (7) the impact of competition with other financial institutions, including deposit and loan pricing pressures and the resulting impact, including as a result of compression to net interest margin; (8) risks relating to the ability to retain our culture and attract and retain qualified people, which could be exacerbated by the continuing work from remote environment; (9) credit risks associated with an obligor's failure to meet the terms of any contract with the Bank or otherwise fail to perform as agreed under the terms of any loan-related document; (10) risks related to the ability of the Company to pursue its strategic plans which depend upon certain growth goals in our lines of business; (11) liquidity risk affecting the Bank's ability to meet its obligations when they come due; (12) risks associated with an anticipated increase in SouthState's investment securities portfolio, including risks associated with acquiring and holding investment securities or potentially determining that the amount of investment securities SouthState desires to acquire are not available on terms acceptable to SouthState; (13) unexpected outflows of uninsured deposits may require us to sell investment securities at a loss; (14) the loss of value of our investment portfolio could negatively impact market perceptions of us and could lead to deposit withdrawals; (15) price risk focusing on changes in market factors that may affect the value of traded instruments in "mark-to-market" portfolios; (16) transaction risk arising from problems with service or product delivery; (17) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; (18) regulatory change risk resulting from new laws, rules, regulations, accounting principles, proscribed practices or ethical standards, including, without limitation, the possibility that regulatory agencies may require higher levels of capital above the current regulatory-mandated minimums and including the impact of special FDIC assessments, the Consumer Financial Protection Bureau regulations or other guidance, and the possibility of changes in accounting standards, policies, principles and practices; (19) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (20) reputation risk that adversely affects earnings or capital arising from negative public opinion including the effects of social media on market perceptions of us and banks generally; (21) cybersecurity risk related to the dependence of SouthState on internal computer systems and the technology of outside service providers, as well as the potential impacts of internal or external security breaches, which may subject the Company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events; (22) reputational and operational risks associated with environment, social and governance (ESG) matters, including the impact of recently passed state legislation and proposed federal and state regulatory guidance and regulation relating to climate change; (23) greater than expected noninterest expenses; (24) excessive loan losses; (25) reputational risk and possible higher than estimated reduced revenue from previously announced changes in the Bank's consumer overdraft programs and other deposit products; (26) the risks of fluctuations in market prices for SouthState common stock that may or may not reflect economic condition or performance of SouthState; (27) the payment of dividends on SouthState common stock, which is subject to legal and regulatory limitations as well as the discretion of the board of directors of SouthState, SouthState's performance and other factors; (28) ownership dilution risk associated with potential acquisitions in which SouthState's stock may be issued as consideration for an acquired company; (29) operational, technological, cultural, regulatory, legal, credit and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash consideration; (30) catastrophic events such as hurricanes, tornados, earthquakes, floods or other natural or human disasters, including public health crises and infectious disease outbreaks, as well as any government actions in response to such events, and the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on SouthState and its customers and other constituencies; (31) geopolitical risk from terrorist activities and armed conflicts that may result in economic and supply disruptions, and loss of market and consumer confidence; and (32) other factors that may affect future results of SouthState, as disclosed in SouthState's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed by SouthState with the U.S. Securities and Exchange Commission ("SEC") and available on the SEC's website at http://www.sec.gov, any of which could cause actual results to differ materially from future results expressed, implied or otherwise anticipated by such forward-looking statements.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. SouthState does not undertake any obligation to update or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

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SouthState Corporation Reports Fourth Quarter 2023 Results, Declares Quarterly Cash Dividend

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