SouthState Corporation Reports First Quarter 2024 Results, Declares Quarterly Cash Dividend

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Apr 25, 2024, 16:05 ET

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

SouthState Corporation Reports First Quarter 2024 Results

"In the midst of a transition year for the US economy, SouthState produced first quarter revenue and earnings per share in line with our guidance," commented John C. Corbett, SouthState's Chief Executive Officer. "Loans and deposits grew in the low-single digit percent range and asset quality remains stable with strong reserves. Our markets are resilient, and people are migrating to the South as an attractive place to live and grow a business."

Highlights of the first quarter of 2024 include:

Returns

Reported Diluted Earnings per Share ("EPS") of $1.50; Adjusted Diluted EPS (Non-GAAP) of $1.58
Net Income of $115.1 million; Adjusted Net Income (Non-GAAP) of $121.3 million
Return on Average Common Equity of 8.4%; Return on Average Tangible Common Equity (Non-GAAP) of 13.6% and Adjusted Return on Average Tangible Common Equity (Non-GAAP) of 14.4%*
Return on Average Assets ("ROAA") of 1.03% and Adjusted ROAA (Non-GAAP) of 1.08%*
Pre-Provision Net Revenue ("PPNR") per Weighted Average Diluted Share (Non-GAAP) of $2.28
Book Value per Share of $72.82; Tangible Book Value ("TBV") per Share (Non-GAAP) of $46.48

∗ Annualized percentages

Performance

Net Interest Income of $344 million; Core Net Interest Income (excluding loan accretion) (Non-GAAP) of $340 million
Net Interest Margin ("NIM"), non-tax equivalent of 3.40% and tax equivalent (Non-GAAP) of 3.41%
Net charge-offs of $2.7 million, or 0.03% annualized; $12.7 million Provision for Credit Losses ("PCL"), including release for unfunded commitments; total allowance for credit losses ("ACL") plus reserve for unfunded commitments of 1.60%
Noninterest Income of $72 million; Noninterest Income represented 0.64% of average assets for the first quarter of 2024
Recorded FDIC special assessment expense of $3.9 million
Efficiency Ratio of 58% and Adjusted Efficiency Ratio (Non-GAAP) of 56%

Balance Sheet

Loans increased $279 million, or 3% annualized, led by consumer real estate; ending loan to deposit ratio of 88%
Deposits increased $130 million, or 1% annualized
Total deposit cost of 1.74%, up 0.14% from prior quarter, resulting in a 33% cycle-to-date beta
Repurchased a total of 100,000 shares during 1Q 2024 at a weighted average price of $79.85
Strong capital position with Tangible Common Equity, Total Risk-Based Capital, Tier 1 Leverage, and Tier 1 Common Equity ratios of 8.2%, 14.4%, 9.6%, and 11.9%, 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 May 17, 2024 to shareholders of record as of May 10, 2024

Financial Performance

	Three Months Ended
(Dollars in thousands, except per share data)	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
INCOME STATEMENT	2024		2023		2023		2023		2023
Interest Income
Loans, including fees (1)	$	463,688	$	459,880	$	443,805	$	419,355	$	393,366
Investment securities, trading securities, federal funds sold and securities
purchased under agreements to resell		53,567		55,555		56,704		58,698		57,043
Total interest income		517,255		515,435		500,509		478,053		450,409
Interest Expense
Deposits		160,162		149,584		133,944		100,787		55,942
Federal funds purchased, securities sold under agreements
to repurchase, and other borrowings		13,157		11,620		11,194		15,523		13,204
Total interest expense		173,319		161,204		145,138		116,310		69,146
Net Interest Income		343,936		354,231		355,371		361,743		381,263
Provision for credit losses		12,686		9,893		32,709		38,389		33,091
Net Interest Income after Provision for Credit Losses		331,250		344,338		322,662		323,354		348,172
Noninterest Income		71,558		65,489		72,848		77,214		71,355
Noninterest Expense
Operating expense		240,923		245,774		238,042		240,818		231,093
Merger, branch consolidation, severance related and other expense (8)		4,513		1,778		164		1,808		9,412
FDIC special assessment		3,854		25,691		—		—		—
Total noninterest expense		249,290		273,243		238,206		242,626		240,505
Income before Income Taxes Provision		153,518		136,584		157,304		157,942		179,022
Income taxes provision		38,462		29,793		33,160		34,495		39,096
Net Income	$	115,056	$	106,791	$	124,144	$	123,447	$	139,926

Adjusted Net Income (non-GAAP) (2)
Net Income (GAAP)	$	115,056	$	106,791	$	124,144	$	123,447	$	139,926
Securities losses (gains), net of tax		—		2		—		—		(35)
Merger, branch consolidation, severance related and other expense, net of tax (8)		3,382		1,391		130		1,414		7,356
FDIC special assessment, net of tax		2,888		20,087		—		—		—
Adjusted Net Income (non-GAAP)	$	121,326	$	128,271	$	124,274	$	124,861	$	147,247

Basic earnings per common share	$	1.51	$	1.40	$	1.63	$	1.62	$	1.84
Diluted earnings per common share	$	1.50	$	1.39	$	1.62	$	1.62	$	1.83
Adjusted net income per common share - Basic (non-GAAP) (2)	$	1.59	$	1.69	$	1.63	$	1.64	$	1.94
Adjusted net income per common share - Diluted (non-GAAP) (2)	$	1.58	$	1.67	$	1.62	$	1.63	$	1.93
Dividends per common share	$	0.52	$	0.52	$	0.52	$	0.50	$	0.50
Basic weighted-average common shares outstanding		76,301,411		76,100,187		76,139,170		76,057,977		75,902,440
Diluted weighted-average common shares outstanding		76,660,081		76,634,100		76,571,430		76,417,537		76,388,954
Effective tax rate		25.05 %		21.81 %		21.08 %		21.84 %		21.84 %

Performance and Capital Ratios

	Three Months Ended
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2024			2023			2023			2023			2023
PERFORMANCE RATIOS
Return on average assets (annualized)		1.03	%		0.94	%		1.10	%		1.11	%		1.29	%
Adjusted return on average assets (annualized) (non-GAAP) (2)		1.08	%		1.13	%		1.10	%		1.12	%		1.35	%
Return on average common equity (annualized)		8.36	%		7.99	%		9.24	%		9.34	%		10.96	%
Adjusted return on average common equity (annualized) (non-GAAP) (2)		8.81	%		9.60	%		9.25	%		9.45	%		11.53	%
Return on average tangible common equity (annualized) (non-GAAP) (3)		13.63	%		13.53	%		15.52	%		15.81	%		18.81	%
Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) (3)		14.35	%		16.12	%		15.54	%		15.98	%		19.75	%
Efficiency ratio (tax equivalent)		58.48	%		63.43	%		54.00	%		53.59	%		51.41	%
Adjusted efficiency ratio (non-GAAP) (4)		56.47	%		56.89	%		53.96	%		53.18	%		49.34	%
Dividend payout ratio (5)		34.42	%		37.01	%		31.84	%		30.75	%		27.09	%
Book value per common share	$	72.82		$	72.78		$	68.81		$	69.61		$	69.19
Tangible book value per common share (non-GAAP) (3)	$	46.48		$	46.32		$	42.26		$	42.96		$	42.40

CAPITAL RATIOS
Equity-to-assets		12.3	%		12.3	%		11.6	%		11.8	%		11.7	%
Tangible equity-to-tangible assets (non-GAAP) (3)		8.2	%		8.2	%		7.5	%		7.6	%		7.5	%
Tier 1 leverage (6)		9.6	%		9.4	%		9.3	%		9.2	%		9.1	%
Tier 1 common equity (6)		11.9	%		11.8	%		11.5	%		11.3	%		11.1	%
Tier 1 risk-based capital (6)		11.9	%		11.8	%		11.5	%		11.3	%		11.1	%
Total risk-based capital (6)		14.4	%		14.1	%		13.8	%		13.5	%		13.3	%

Balance Sheet

	Ending Balance
(Dollars in thousands, except per share and share data)	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
BALANCE SHEET	2024		2023		2023		2023		2023
Assets
Cash and due from banks	$	478,271	$	510,922	$	514,917	$	552,900	$	558,158
Federal funds sold and interest-earning deposits with banks		731,186		487,955		814,220		960,849		1,438,504
Cash and cash equivalents		1,209,457		998,877		1,329,137		1,513,749		1,996,662

Trading securities, at fair value		66,188		31,321		114,154		56,580		16,039
Investment securities:
Securities held to maturity		2,446,589		2,487,440		2,533,713		2,585,155		2,636,673
Securities available for sale, at fair value		4,598,400		4,784,388		4,623,618		4,949,334		5,159,999
Other investments		187,285		192,043		187,152		196,728		217,991
Total investment securities		7,232,274		7,463,871		7,344,483		7,731,217		8,014,663
Loans held for sale		56,553		50,888		27,443		42,951		27,289
Loans:
Purchased credit deteriorated		1,031,283		1,108,813		1,171,543		1,269,983		1,325,400
Purchased non-credit deteriorated		4,534,583		4,796,913		5,064,254		5,275,913		5,620,290
Non-acquired		27,101,444		26,482,763		25,780,875		24,990,889		23,750,452
Less allowance for credit losses		(469,654)		(456,573)		(447,956)		(427,392)		(370,645)
Loans, net		32,197,656		31,931,916		31,568,716		31,109,393		30,325,497
Premises and equipment, net		512,635		519,197		516,583		518,353		517,146
Bank owned life insurance		997,562		991,454		984,881		979,494		967,750
Mortgage servicing rights		87,970		85,164		89,476		87,539		85,406
Core deposit and other intangibles		83,193		88,776		95,094		102,256		109,603
Goodwill		1,923,106		1,923,106		1,923,106		1,923,106		1,923,106
Other assets		778,244		817,454		996,055		875,694		940,666
Total assets	$	45,144,838	$	44,902,024	$	44,989,128	$	44,940,332	$	44,923,827

Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing	$	10,546,410	$	10,649,274	$	11,158,431	$	11,489,483	$	12,422,583
Interest-bearing		26,632,024		26,399,635		25,776,767		25,252,395		23,979,009
Total deposits		37,178,434		37,048,909		36,935,198		36,741,878		36,401,592
Federal funds purchased and securities
sold under agreements to repurchase		554,691		489,185		513,304		581,446		544,108
Other borrowings		391,812		491,904		391,997		792,090		1,292,182
Reserve for unfunded commitments		53,229		56,303		62,347		63,399		85,068
Other liabilities		1,419,663		1,282,625		1,855,295		1,471,509		1,351,873
Total liabilities		39,597,829		39,368,926		39,758,141		39,650,322		39,674,823

Shareholders' equity:
Common stock - $2.50 par value; authorized 160,000,000 shares		190,443		190,055		190,043		189,990		189,649
Surplus		4,230,345		4,240,413		4,238,753		4,228,910		4,224,503
Retained earnings		1,749,215		1,685,166		1,618,080		1,533,508		1,448,636
Accumulated other comprehensive loss		(622,994)		(582,536)		(815,889)		(662,398)		(613,784)
Total shareholders' equity		5,547,009		5,533,098		5,230,987		5,290,010		5,249,004
Total liabilities and shareholders' equity	$	45,144,838	$	44,902,024	$	44,989,128	$	44,940,332	$	44,923,827

Common shares issued and outstanding		76,177,163		76,022,039		76,017,366		75,995,979		75,859,665

Net Interest Income and Margin

	Three Months Ended
	Mar. 31, 2024					Dec. 31, 2023					Mar. 31, 2023
(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	$	668,349	$	8,254	4.97 %	$	814,244	$	10,029	4.89 %	$	759,239	$	8,921	4.77 %
Investment securities		7,465,735		45,313	2.44 %		7,382,800		45,526	2.45 %		8,232,582		48,122	2.37 %
Loans held for sale		42,872		681	6.39 %		28,878		552	7.58 %		23,123		402	7.05 %
Total loans held for investment		32,480,220		463,007	5.73 %		32,239,455		459,328	5.65 %		30,394,396		392,964	5.24 %
Total interest-earning assets		40,657,176		517,255	5.12 %		40,465,377		515,435	5.05 %		39,409,340		450,409	4.64 %
Noninterest-earning assets		4,353,987					4,572,255					4,695,138
Total Assets	$	45,011,163				$	45,037,632				$	44,104,478

Interest-Bearing Liabilities ("IBL"):
Transaction and money market accounts	$	19,544,019	$	117,292	2.41 %	$	18,957,647	$	107,994	2.26 %	$	16,874,909	$	40,516	0.97 %
Savings deposits		2,589,251		1,818	0.28 %		2,680,065		1,888	0.28 %		3,298,221		1,756	0.22 %
Certificates and other time deposits		4,282,749		41,052	3.86 %		4,294,555		39,702	3.67 %		3,114,354		13,670	1.78 %
Federal funds purchased		256,506		3,369	5.28 %		256,672		3,453	5.34 %		193,259		2,187	4.59 %
Repurchase agreements		280,674		1,358	1.95 %		265,839		1,458	2.18 %		373,563		666	0.72 %
Other borrowings		563,848		8,430	6.01 %		438,701		6,709	6.07 %		785,571		10,351	5.34 %
Total interest-bearing liabilities		27,517,047		173,319	2.53 %		26,893,479		161,204	2.38 %		24,639,877		69,146	1.14 %
Noninterest-bearing liabilities ("Non-IBL")		11,957,565					12,844,262					14,287,553
Shareholders' equity		5,536,551					5,299,891					5,177,048
Total Non-IBL and shareholders' equity		17,494,116					18,144,153					19,464,601
Total Liabilities and Shareholders' Equity	$	45,011,163				$	45,037,632				$	44,104,478
Net Interest Income and Margin (Non-Tax Equivalent)			$	343,936	3.40 %			$	354,231	3.47 %			$	381,263	3.92 %
Net Interest Margin (Tax Equivalent) (non-GAAP)					3.41 %					3.48 %					3.93 %
Total Deposit Cost (without Debt and Other Borrowings)					1.74 %					1.60 %					0.63 %
Overall Cost of Funds (including Demand Deposits)					1.83 %					1.69 %					0.75 %

Total Accretion on Acquired Loans (1)			$	4,287				$	3,870				$	7,398
Tax Equivalent ("TE") Adjustment			$	528				$	659				$	1,020


•	The remaining loan discount on acquired loans to be accreted into loan interest income totals $47.0 million as of March 31, 2024.

Noninterest Income and Expense

	Three Months Ended
	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
(Dollars in thousands)	2024		2023		2023		2023		2023
Noninterest Income:
Fees on deposit accounts	$	33,145	$	33,225	$	32,830	$	33,101	$	29,859
Mortgage banking income		6,169		2,191		2,478		4,354		4,332
Trust and investment services income		10,391		10,131		9,556		9,823		9,937
Securities (losses) gains, net		—		(2)		—		—		45
Correspondent banking and capital markets income		14,591		16,081		24,808		27,734		21,956
Expense on centrally-cleared variation margin		(10,280)		(12,677)		(11,892)		(8,547)		(8,362)
Total correspondent banking and capital markets income		4,311		3,404		12,916		19,187		13,594
Bank owned life insurance income		6,892		6,567		7,039		6,271		6,813
Other		10,650		9,973		8,029		4,478		6,775
Total Noninterest Income	$	71,558	$	65,489	$	72,848	$	77,214	$	71,355

Noninterest Expense:
Salaries and employee benefits	$	150,453	$	145,850	$	146,146	$	147,342	$	144,060
Occupancy expense		22,577		22,715		22,251		22,196		21,533
Information services expense		22,353		22,000		21,428		21,119		19,925
OREO and loan related expense (income)		606		948		613		(14)		169
Business development and staff related		5,799		7,492		5,995		6,672		5,957
Amortization of intangibles		5,998		6,615		6,616		7,028		7,299
Professional fees		3,115		7,025		3,456		4,364		3,702
Supplies and printing expense		2,540		2,761		2,623		2,554		2,640
FDIC assessment and other regulatory charges		8,534		8,325		8,632		9,819		6,294
Advertising and marketing		1,984		2,826		3,009		1,521		2,118
Other operating expenses		16,964		19,217		17,273		18,217		17,396
Merger, branch consolidation, severance related and other expense (8)		4,513		1,778		164		1,808		9,412
FDIC special assessment		3,854		25,691		—		—		—
Total Noninterest Expense	$	249,290	$	273,243	$	238,206	$	242,626	$	240,505

Loans and Deposits

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

	Ending Balance
(Dollars in thousands)	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
LOAN PORTFOLIO (7)	2024		2023		2023		2023		2023
Construction and land development * †	$	2,437,343	$	2,923,514	$	2,776,241	$	2,817,125	$	2,749,290
Investor commercial real estate*		9,752,529		9,227,968		9,372,683		9,187,948		8,957,507
Commercial owner occupied real estate		5,511,855		5,497,671		5,539,097		5,585,951		5,522,514
Commercial and industrial		5,544,131		5,504,539		5,458,229		5,378,294		5,321,306
Consumer real estate *		8,223,066		7,993,450		7,608,145		7,275,495		6,860,831
Consumer/other		1,198,386		1,241,347		1,262,277		1,291,972		1,284,694
Total Loans	$	32,667,310	$	32,388,489	$	32,016,672	$	31,536,785	$	30,696,142


*	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 $623.9 million, $715.5 million, $863.1 million, $928.4 million, and $893.7 million for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.

	Ending Balance
(Dollars in thousands)	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
DEPOSITS	2024		2023		2023		2023		2023
Noninterest-bearing checking	$	10,546,410	$	10,649,274	$	11,158,431	$	11,489,483	$	12,422,583
Interest-bearing checking		7,898,835		7,978,799		7,806,243		8,185,609		8,316,023
Savings		2,557,203		2,632,212		2,760,166		2,931,320		3,156,214
Money market		11,895,385		11,538,671		10,756,431		9,710,032		8,388,275
Time deposits		4,280,601		4,249,953		4,453,927		4,425,434		4,118,497
Total Deposits	$	37,178,434	$	37,048,909	$	36,935,198	$	36,741,878	$	36,401,592

Core Deposits (excludes Time Deposits)	$	32,897,833	$	32,798,956	$	32,481,271	$	32,316,444	$	32,283,095

Asset Quality

	Ending Balance
	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
(Dollars in thousands)	2024		2023		2023		2023		2023
NONPERFORMING ASSETS:
Non-acquired
Non-acquired nonaccrual loans and restructured loans on nonaccrual	$	106,189	$	110,467	$	105,856	$	104,772	$	68,176
Accruing loans past due 90 days or more		2,497		11,305		783		3,620		2,667
Non-acquired OREO and other nonperforming assets		1,589		711		449		227		186
Total non-acquired nonperforming assets		110,275		122,483		107,088		108,619		71,029
Acquired
Acquired nonaccrual loans and restructured loans on nonaccrual		63,451		59,755		57,464		60,734		52,795
Accruing loans past due 90 days or more		135		1,174		1,821		571		983
Acquired OREO and other nonperforming assets		655		712		378		981		3,446
Total acquired nonperforming assets		64,241		61,641		59,663		62,286		57,224
Total nonperforming assets	$	174,516	$	184,124	$	166,751	$	170,905	$	128,253

	Three Months Ended
	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
	2024		2023		2023		2023		2023
ASSET QUALITY RATIOS (7):
Allowance for credit losses as a percentage of loans		1.44 %		1.41 %		1.40 %		1.36 %		1.21 %
Allowance for credit losses, including reserve for unfunded commitments, as a percentage of loans		1.60 %		1.58 %		1.59 %		1.56 %		1.48 %
Allowance for credit losses as a percentage of nonperforming loans		272.62 %		249.90 %		269.98 %		251.86 %		297.42 %
Net charge-offs as a percentage of average loans (annualized)		0.03 %		0.09 %		0.16 %		0.04 %		0.01 %
Total nonperforming assets as a percentage of total assets		0.39 %		0.41 %		0.37 %		0.38 %		0.29 %
Nonperforming loans as a percentage of period end loans		0.53 %		0.56 %		0.52 %		0.54 %		0.41 %

Current Expected Credit Losses ("CECL")

Below is a table showing the roll forward of the ACL and UFC for the first quarter of 2024:

Allowance for Credit Losses ("ACL and UFC")

(Dollars in thousands)

NonPCD ACL

PCD ACL

Total ACL

UFC

Ending balance 12/31/2023

423,876

32,697

456,573

56,303

Charge offs

(4,829)

—

(4,829)

—

Acquired charge offs

(2,889)

(222)

(3,111)

—

Recoveries

2,703

—

2,703

—

Acquired recoveries

272

2,286

2,558

—

Provision (recovery) for credit losses

20,055

(4,295)

15,760

(3,074)

Ending balance 3/31/2024

439,188

30,466

469,654

53,229

Period end loans

31,636,027

1,031,283

32,667,310

N/A

Allowance for Credit Losses to Loans

1.39 %

2.95 %

1.44 %

N/A

Unfunded commitments (off balance sheet) *

8,160,594

Reserve to unfunded commitments (off balance sheet)

0.65 %


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

Conference Call

The Company will host a conference call to discuss its first quarter results at 9:00 a.m. Eastern Time on April 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 April 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)	Mar. 31, 2024			Dec. 31, 2023			Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023
Net income (GAAP)	$	115,056		$	106,791		$	124,144		$	123,447		$	139,926
Provision for credit losses		12,686			9,893			32,709			38,389			33,091
Tax provision		38,462			29,793			33,160			34,495			39,096
Merger, branch consolidation, severance related and other expense (8)		4,513			1,778			164			1,808			9,412
FDIC special assessment		3,854			25,691			—			—			—
Securities losses (gains)		—			2			—			—			(45)
Pre-provision net revenue (PPNR) (Non-GAAP)	$	174,571		$	173,948		$	190,177		$	198,139		$	221,480

Average asset balance (GAAP)	$	45,011,163		$	45,037,632		$	44,841,319		$	44,628,124		$	44,104,478
PPNR ROAA		1.56	%		1.53	%		1.68	%		1.78	%		2.04	%

Diluted weighted-average common shares outstanding		76,660			76,634			76,571			76,418			76,389
PPNR per weighted-average common shares outstanding	$	2.28		$	2.27		$	2.48		$	2.59		$	2.90

(Dollars in thousands)	Three Months Ended
CORE NET INTEREST INCOME (NON-GAAP)	Mar. 31, 2024			Dec. 31, 2023			Sep. 30, 2023			Jun. 30, 2023			Mar. 31, 2023
Net interest income (GAAP)	$	343,936		$	354,231		$	355,371		$	361,743		$	381,263
Less:
Total accretion on acquired loans		4,287			3,870			4,053			5,481			7,398
Core net interest income (Non-GAAP)	$	339,649		$	350,361		$	351,318		$	356,262		$	373,865

NET INTEREST MARGIN ("NIM"), TE (NON-GAAP)
Net interest income (GAAP)	$	343,936		$	354,231		$	355,371		$	361,743		$	381,263
Total average interest-earning assets		40,657,176			40,465,377			40,376,380			40,127,836			39,409,340
NIM, non-tax equivalent		3.40	%		3.47	%		3.49	%		3.62	%		3.92	%

Tax equivalent adjustment (included in NIM, TE)		528			659			646			698			1,020
Net interest income, tax equivalent (Non-GAAP)	$	344,464		$	354,890		$	356,017		$	362,441		$	382,283
NIM, TE (Non-GAAP)		3.41	%		3.48	%		3.50	%		3.62	%		3.93	%

	Three Months Ended
(Dollars in thousands, except per share data)	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
RECONCILIATION OF GAAP TO NON-GAAP	2024			2023			2023			2023			2023
Adjusted Net Income (non-GAAP) (2)
Net income (GAAP)	$	115,056		$	106,791		$	124,144		$	123,447		$	139,926
Securities losses (gains), net of tax		—			2			—			—			(35)
Merger, branch consolidation, severance related and other expense, net of tax (8)		3,382			1,391			130			1,414			7,356
FDIC special assessment, net of tax		2,888			20,087			—			—			—
Adjusted net income (non-GAAP)	$	121,326		$	128,271		$	124,274		$	124,861		$	147,247

Adjusted Net Income per Common Share - Basic (2)
Earnings per common share - Basic (GAAP)	$	1.51		$	1.40		$	1.63		$	1.62		$	1.84
Effect to adjust for securities losses (gains), net of tax		—			0.00			—			—			(0.00)
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.04			0.03			0.00			0.02			0.10
Effect to adjust for FDIC special assessment, net of tax		0.04			0.26			—			—			—
Adjusted net income per common share - Basic (non-GAAP)	$	1.59		$	1.69		$	1.63		$	1.64		$	1.94

Adjusted Net Income per Common Share - Diluted (2)
Earnings per common share - Diluted (GAAP)	$	1.50		$	1.39		$	1.62		$	1.62		$	1.83
Effect to adjust for securities losses (gains), net of tax		—			—			—			—			(0.00)
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.04			0.02			0.00			0.01			0.10
Effect to adjust for FDIC special assessment, net of tax		0.04			0.26			—			—			—
Adjusted net income per common share - Diluted (non-GAAP)	$	1.58		$	1.67		$	1.62		$	1.63		$	1.93

Adjusted Return on Average Assets (2)
Return on average assets (GAAP)		1.03	%		0.94	%		1.10	%		1.11	%		1.29	%
Effect to adjust for securities losses (gains), net of tax		—	%		0.00	%		—	%		—	%		(0.00)	%
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.02	%		0.01	%		—	%		0.01	%		0.06	%
Effect to adjust for FDIC special assessment, net of tax		0.03	%		0.18	%		—	%		—	%		—	%
Adjusted return on average assets (non-GAAP)		1.08	%		1.13	%		1.10	%		1.12	%		1.35	%

Adjusted Return on Average Common Equity (2)
Return on average common equity (GAAP)		8.36	%		7.99	%		9.24	%		9.34	%		10.96	%
Effect to adjust for securities losses (gains), net of tax		—	%		0.00	%		—	%		—	%		(0.00)	%
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.24	%		0.11	%		0.01	%		0.11	%		0.57	%
Effect to adjust for FDIC special assessment, net of tax		0.21	%		1.50	%		—	%		—	%		—	%
Adjusted return on average common equity (non-GAAP)		8.81	%		9.60	%		9.25	%		9.45	%		11.53	%

Return on Average Common Tangible Equity (3)
Return on average common equity (GAAP)		8.36	%		7.99	%		9.24	%		9.34	%		10.96	%
Effect to adjust for intangible assets		5.27	%		5.54	%		6.28	%		6.47	%		7.85	%
Return on average tangible equity (non-GAAP)		13.63	%		13.53	%		15.52	%		15.81	%		18.81	%

Adjusted Return on Average Common Tangible Equity (2) (3)
Return on average common equity (GAAP)		8.36	%		7.99	%		9.24	%		9.34	%		10.96	%
Effect to adjust for securities losses (gains), net of tax		—	%		0.00	%		—	%		—	%		(0.00)	%
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.25	%		0.10	%		0.01	%		0.11	%		0.58	%
Effect to adjust for FDIC special assessment, net of tax		0.21	%		1.50	%		—	%		—	%		—	%
Effect to adjust for intangible assets, net of tax		5.53	%		6.53	%		6.29	%		6.53	%		8.21	%
Adjusted return on average common tangible equity (non-GAAP)		14.35	%		16.12	%		15.54	%		15.98	%		19.75	%

Adjusted Efficiency Ratio (4)
Efficiency ratio		58.48	%		63.43	%		54.00	%		53.59	%		51.41	%
Effect to adjust for merger, branch consolidation, severance related and other expense (8)		(1.08)	%		(0.43)	%		(0.04)	%		(0.41)	%		(2.07)	%
Effect to adjust for FDIC special assessment		(0.93)	%		(6.11)	%		—	%		—	%		—	%
Adjusted efficiency ratio		56.47	%		56.89	%		53.96	%		53.18	%		49.34	%

Tangible Book Value Per Common Share (3)
Book value per common share (GAAP)	$	72.82		$	72.78		$	68.81		$	69.61		$	69.19
Effect to adjust for intangible assets		(26.34)			(26.46)			(26.55)			(26.65)			(26.79)
Tangible book value per common share (non-GAAP)	$	46.48		$	46.32		$	42.26		$	42.96		$	42.40

Tangible Equity-to-Tangible Assets (3)
Equity-to-assets (GAAP)		12.29	%		12.32	%		11.63	%		11.77	%		11.68	%
Effect to adjust for intangible assets		(4.08)	%		(4.11)	%		(4.15)	%		(4.16)	%		(4.18)	%
Tangible equity-to-tangible assets (non-GAAP)		8.21	%		8.21	%		7.48	%		7.61	%		7.50	%

Footnotes to tables:
(1)	Includes loan accretion (interest) income related to the discount on acquired loans of $4.3 million, $3.9 million, $4.1 million, $5.5 million, and $7.4 million during the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, 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, severance related and other expense, 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, severance related and other expense of $4.5 million, $1.8 million, $164,000, $1.8 million, and $9.4 million for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, 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 $3.9 million and $25.7 million for the quarters ended March 31, 2024 and December 31, 2023, respectively.
(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 GAAP measures to non-GAAP.
(4)	Adjusted efficiency ratio is calculated by taking the noninterest expense excluding merger, branch consolidation, severance related and other 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 $6.0 million, $6.6 million, $6.6 million, $7.0 million, and $7.3 million for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, 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)	March 31, 2024 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.
(8)	Includes pre-tax cyber incident costs of $4.4 million for the quarter ended March 31, 2024.

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) risks related to the ability of the Company to pursue its strategic plans which depend upon certain growth goals in our lines of business; (3) 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; (4) 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; (5) interest rate risk primarily resulting from our inability to effectively manage the risk, 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; (6) a decrease in our net interest income due to the interest rate environment; (7) liquidity risk affecting the Bank's ability to meet its obligations when they come due; (8) unexpected outflows of uninsured deposits may require us to sell investment securities at a loss; (9) potential deterioration in real estate values; (10) the loss of value of our investment portfolio could negatively impact market perceptions of us and could lead to deposit withdrawals; (11) price risk focusing on changes in market factors that may affect the value of traded instruments in "mark-to-market" portfolios; (12) transaction risk arising from problems with service or product delivery; (13) 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; (14) 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; (15) 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; (16) 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; (17) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards, and contractual obligations regarding data privacy and cybersecurity; (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 changes in federal and state laws, regulations and guidance relating to climate change; (23) excessive loan losses; (24) reputational risk and possible higher than estimated reduced revenue from previously announced or proposed regulatory changes in the Bank's consumer programs and products; (25) 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; (26) 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; (27) geopolitical risk from terrorist activities and armed conflicts that may result in economic and supply disruptions, and loss of market and consumer confidence; (28) the risks of fluctuations in market prices for SouthState common stock that may or may not reflect economic condition or performance of SouthState; (29) 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; (30) ownership dilution risk associated with potential acquisitions in which SouthState's stock may be issued as consideration for an acquired company; and (31) 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.

SOURCE SouthState Corporation