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

PR Newswire

Thu, Jan 23, 2025, 2:05 PM 9 min read

"SouthState finished strong in 2024. We produced steady growth in loans and deposits and had a nice uptick in net interest margin and fees. The result was net income of $144 million and a 9% increase in PPNR over the third quarter, driven by 6% revenue growth", commented John C. Corbett, SouthState's Chief Executive Officer. "We were also pleased to receive prompt regulatory approval of the IBTX acquisition, which allowed us to close ahead of schedule on January 1. With Independent Financial, our momentum carries forward into 2025. We will continue working to build a high-quality bank with scale in the fastest growing markets in the country."

Highlights of the fourth quarter of 2024 include:

Returns

Reported Diluted Earnings per Share ("EPS") of $1.87; Adjusted Diluted EPS (Non-GAAP) of $1.93
Net Income of $144.2 million; Adjusted Net Income (Non-GAAP) of $148.8 million
Return on Average Common Equity of 9.7%; Return on Average Tangible Common Equity (Non-GAAP) of 15.1% and Adjusted Return on Average Tangible Common Equity (Non-GAAP) of 15.6%*
Return on Average Assets ("ROAA") of 1.23% and Adjusted ROAA (Non-GAAP) of 1.27%*
Book Value per Share of $77.18; Tangible Book Value ("TBV") per Share (Non-GAAP) of $51.11

Performance

Net Interest Income of $370 million; Core Net Interest Income (excluding loan accretion) (Non-GAAP) of $367 million
Net Interest Margin ("NIM"), non-tax equivalent and tax equivalent (Non-GAAP) of 3.48%
Net charge-offs of $5.3 million, or 0.06% of average loans, annualized; $6.4 million of Provision for Credit Losses ("PCL"); total Allowance for Credit Losses ("ACL") plus reserve for unfunded commitments of 1.51% of loans
Noninterest Income of $81 million; Noninterest Income represented 0.69% of average assets for the fourth quarter of 2024*
Efficiency Ratio of 56% and Adjusted Efficiency Ratio (Non-GAAP) of 54%

∗ Annualized percentages

Balance Sheet

Loans increased $355 million, or 4% annualized, led by increases in commercial and industrial, and commercial owner occupied real estate; ending loan to deposit ratio of 89%
Deposits increased $423 million, or 4% annualized
Total loan yield of 5.76%, down 0.10% from prior quarter
Total deposit cost of 1.75%, down 0.15% from prior quarter
Strong capital position with Tangible Common Equity, Total Risk-Based Capital, Tier 1 Leverage, and Tier 1 Common Equity ratios of 8.8%, 15.0%, 10.0%, and 12.6%, respectively†

† Preliminary

Mergers & Acquisitions

Completed previously announced merger of Independent Bank Group, Inc. ("Independent") on January 1, 2025

Other Subsequent Events

SouthState Bank, N.A. (the "Bank") entered into an agreement on January 8, 2025 with entities affiliated with Blue Owl Real Estate Capital, LLC to sell branch properties and enter into triple net lease agreements with such purchasers on those same properties effective upon the closing of the sale
The Board of Directors of the Company declared a quarterly cash dividend on its common stock of $0.54 per share, payable on February 14, 2025 to shareholders of record as of February 7, 2025

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	2024		2024		2024		2024		2023		2024		2023
Interest Income
Loans, including fees (1)	$	489,709	$	494,082	$	478,360	$	463,688	$	459,880	$	1,925,838	$	1,716,405
Investment securities, trading securities, federal funds sold and securities
purchased under agreements to resell		59,096		50,096		52,764		53,567		55,555		215,524		228,001
Total interest income		548,805		544,178		531,124		517,255		515,435		2,141,362		1,944,406
Interest Expense
Deposits		168,263		177,919		165,481		160,162		149,584		671,825		440,257
Federal funds purchased, securities sold under agreements
to repurchase, and other borrowings		10,763		14,779		15,384		13,157		11,620		54,083		51,541
Total interest expense		179,026		192,698		180,865		173,319		161,204		725,908		491,798
Net Interest Income		369,779		351,480		350,259		343,936		354,231		1,415,454		1,452,608
Provision (recovery) for credit losses		6,371		(6,971)		3,889		12,686		9,893		15,975		114,082
Net Interest Income after Provision (Recovery) for Credit Losses		363,408		358,451		346,370		331,250		344,338		1,399,479		1,338,526
Noninterest Income		80,545		74,934		75,225		71,558		65,489		302,262		286,906
Noninterest Expense
Operating expense		250,699		243,543		242,343		240,923		245,774		977,508		955,727
Merger, branch consolidation, severance related and other expense (8)		6,531		3,304		5,785		4,513		1,778		20,133		13,162
FDIC special assessment		(621)		—		619		3,854		25,691		3,852		25,691
Total noninterest expense		256,609		246,847		248,747		249,290		273,243		1,001,493		994,580
Income before Income Tax Provision		187,344		186,538		172,848		153,518		136,584		700,248		630,852
Income tax provision		43,166		43,359		40,478		38,462		29,793		165,465		136,544
Net Income	$	144,178	$	143,179	$	132,370	$	115,056	$	106,791	$	534,783	$	494,308

Adjusted Net Income (non-GAAP) (2)
Net Income (GAAP)	$	144,178	$	143,179	$	132,370	$	115,056	$	106,791	$	534,783	$	494,308
Securities losses (gains), net of tax		38		—		—		—		2		38		(33)
Merger, branch consolidation, severance related and other expense, net of tax (8)		5,026		2,536		4,430		3,382		1,391		15,374		10,291
FDIC special assessment, net of tax		(478)		—		474		2,888		20,087		2,884		20,087
Adjusted Net Income (non-GAAP)	$	148,764	$	145,715	$	137,274	$	121,326	$	128,271	$	553,079	$	524,653

Basic earnings per common share	$	1.89	$	1.88	$	1.74	$	1.51	$	1.40	$	7.01	$	6.50
Diluted earnings per common share	$	1.87	$	1.86	$	1.73	$	1.50	$	1.39	$	6.97	$	6.46
Adjusted net income per common share - Basic (non-GAAP) (2)	$	1.95	$	1.91	$	1.80	$	1.59	$	1.69	$	7.25	$	6.90
Adjusted net income per common share - Diluted (non-GAAP) (2)	$	1.93	$	1.90	$	1.79	$	1.58	$	1.67	$	7.21	$	6.86
Dividends per common share	$	0.54	$	0.54	$	0.52	$	0.52	$	0.52	$	2.12	$	2.04
Basic weighted-average common shares outstanding		76,360,935		76,299,069		76,251,401		76,301,411		76,100,187		76,303,351		76,050,730
Diluted weighted-average common shares outstanding		76,957,882		76,805,436		76,607,281		76,660,081		76,634,100		76,762,354		76,479,557
Effective tax rate		23.04 %		23.24 %		23.42 %		25.05 %		21.81 %		23.63 %		21.64 %

Performance and Capital Ratios

	Three Months Ended															Twelve Months Ended
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Dec. 31,		Dec. 31,
	2024			2024			2024			2024			2023			2024		2023
PERFORMANCE RATIOS
Return on average assets (annualized)		1.23	%		1.25	%		1.17	%		1.03	%		0.94	%	1.17	%	1.11	%
Adjusted return on average assets (annualized) (non-GAAP) (2)		1.27	%		1.27	%		1.22	%		1.08	%		1.13	%	1.21	%	1.17	%
Return on average common equity (annualized)		9.72	%		9.91	%		9.58	%		8.36	%		7.99	%	9.41	%	9.37	%
Adjusted return on average common equity (annualized) (non-GAAP) (2)		10.03	%		10.08	%		9.94	%		8.81	%		9.60	%	9.73	%	9.94	%
Return on average tangible common equity (annualized) (non-GAAP) (3)		15.09	%		15.63	%		15.49	%		13.63	%		13.53	%	14.98	%	15.87	%
Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) (3)		15.56	%		15.89	%		16.05	%		14.35	%		16.12	%	15.47	%	16.80	%
Efficiency ratio (tax equivalent)		55.73	%		56.58	%		57.03	%		58.48	%		63.43	%	56.93	%	55.50	%
Adjusted efficiency ratio (non-GAAP) (4)		54.42	%		55.80	%		55.52	%		56.47	%		56.89	%	55.53	%	53.27	%
Dividend payout ratio (5)		28.58	%		28.76	%		29.93	%		34.42	%		37.01	%	30.22	%	31.34	%
Book value per common share	$	77.18		$	77.42		$	74.16		$	72.82		$	72.78
Tangible book value per common share (non-GAAP) (3)	$	51.11		$	51.26		$	47.90		$	46.48		$	46.32

CAPITAL RATIOS
Equity-to-assets		12.7	%		12.8	%		12.4	%		12.3	%		12.3	%
Tangible equity-to-tangible assets (non-GAAP) (3)		8.8	%		8.9	%		8.4	%		8.2	%		8.2	%
Tier 1 leverage (6)		10.0	%		10.0	%		9.7	%		9.6	%		9.4	%
Tier 1 common equity (6)		12.6	%		12.4	%		12.1	%		11.9	%		11.8	%
Tier 1 risk-based capital (6)		12.6	%		12.4	%		12.1	%		11.9	%		11.8	%
Total risk-based capital (6)		15.0	%		14.7	%		14.4	%		14.4	%		14.1	%

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	2024		2024		2024		2024		2023
Assets
Cash and due from banks	$	525,506	$	563,887	$	507,425	$	478,271	$	510,922
Federal funds sold and interest-earning deposits with banks		866,561		648,792		609,741		731,186		487,955
Cash and cash equivalents		1,392,067		1,212,679		1,117,166		1,209,457		998,877

Trading securities, at fair value		102,932		87,103		92,161		66,188		31,321
Investment securities:
Securities held to maturity		2,254,670		2,301,307		2,348,528		2,446,589		2,487,440
Securities available for sale, at fair value		4,320,593		4,564,363		4,498,264		4,598,400		4,784,388
Other investments		223,613		211,458		201,516		187,285		192,043
Total investment securities		6,798,876		7,077,128		7,048,308		7,232,274		7,463,871
Loans held for sale		279,426		287,043		100,007		56,553		50,888
Loans:
Purchased credit deteriorated		862,155		913,342		957,255		1,031,283		1,108,813
Purchased non-credit deteriorated		3,635,782		3,959,028		4,253,323		4,534,583		4,796,913
Non-acquired		29,404,990		28,675,822		28,023,986		27,101,444		26,482,763
Less allowance for credit losses		(465,280)		(467,981)		(472,298)		(469,654)		(456,573)
Loans, net		33,437,647		33,080,211		32,762,266		32,197,656		31,931,916
Premises and equipment, net		502,559		507,452		517,382		512,635		519,197
Bank owned life insurance		1,013,209		1,007,275		1,001,998		997,562		991,454
Mortgage servicing rights		89,795		83,512		88,904		87,970		85,164
Core deposit and other intangibles		66,458		71,835		77,389		83,193		88,776
Goodwill		1,923,106		1,923,106		1,923,106		1,923,106		1,923,106
Other assets		775,129		745,303		765,283		778,244		817,454
Total assets	$	46,381,204	$	46,082,647	$	45,493,970	$	45,144,838	$	44,902,024

Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing	$	10,192,117	$	10,376,531	$	10,374,464	$	10,546,410	$	10,649,274
Interest-bearing		27,868,749		27,261,664		26,723,938		26,632,024		26,399,635
Total deposits		38,060,866		37,638,195		37,098,402		37,178,434		37,048,909
Federal funds purchased and securities
sold under agreements to repurchase		514,912		538,322		542,403		554,691		489,185
Other borrowings		391,534		691,626		691,719		391,812		491,904
Reserve for unfunded commitments		45,327		41,515		50,248		53,229		56,303
Other liabilities		1,478,150		1,268,409		1,460,795		1,419,663		1,282,625
Total liabilities		40,490,789		40,178,067		39,843,567		39,597,829		39,368,926

Shareholders' equity:
Common stock - $2.50 par value; authorized 160,000,000 shares		190,805		190,674		190,489		190,443		190,055
Surplus		4,259,722		4,249,672		4,238,192		4,230,345		4,240,413
Retained earnings		2,046,809		1,943,874		1,841,933		1,749,215		1,685,166
Accumulated other comprehensive loss		(606,921)		(479,640)		(620,211)		(622,994)		(582,536)
Total shareholders' equity		5,890,415		5,904,580		5,650,403		5,547,009		5,533,098
Total liabilities and shareholders' equity	$	46,381,204	$	46,082,647	$	45,493,970	$	45,144,838	$	44,902,024

Common shares issued and outstanding		76,322,206		76,269,577		76,195,723		76,177,163		76,022,039

Net Interest Income and Margin

	Three Months Ended
	Dec. 31, 2024					Sep. 30, 2024					Dec. 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	$	1,308,313	$	14,162	4.31 %	$	559,942	$	6,462	4.59 %	$	814,244	$	10,029	4.89 %
Investment securities		7,144,438		44,934	2.50 %		7,163,934		43,634	2.42 %		7,382,800		45,526	2.45 %
Loans held for sale		179,803		2,304	5.10 %		112,429		2,694	9.53 %		28,878		552	7.58 %
Total loans held for investment		33,662,822		487,405	5.76 %		33,387,675		491,388	5.86 %		32,239,455		459,328	5.65 %
Total interest-earning assets		42,295,376		548,805	5.16 %		41,223,980		544,178	5.25 %		40,465,377		515,435	5.05 %
Noninterest-earning assets		4,214,390					4,373,250					4,572,255
Total Assets	$	46,509,766				$	45,597,230				$	45,037,632

Interest-Bearing Liabilities ("IBL"):
Transaction and money market accounts	$	20,823,079	$	121,239	2.32 %	$	19,936,966	$	129,613	2.59 %	$	18,957,647	$	107,994	2.26 %
Savings deposits		2,427,760		1,741	0.29 %		2,453,886		1,893	0.31 %		2,680,065		1,888	0.28 %
Certificates and other time deposits		4,517,047		45,283	3.99 %		4,489,441		46,413	4.11 %		4,294,555		39,702	3.67 %
Federal funds purchased		292,626		3,479	4.73 %		304,582		4,178	5.46 %		256,672		3,453	5.34 %
Repurchase agreements		261,373		1,382	2.10 %		258,166		1,519	2.34 %		265,839		1,458	2.18 %
Other borrowings		394,853		5,902	5.95 %		611,247		9,082	5.91 %		438,701		6,709	6.07 %
Total interest-bearing liabilities		28,716,738		179,026	2.48 %		28,054,288		192,698	2.73 %		26,893,479		161,204	2.38 %
Noninterest-bearing deposits		10,561,382					10,412,512					11,059,306
Other noninterest-bearing liabilities		1,330,020					1,382,260					1,784,956
Shareholders' equity		5,901,626					5,748,170					5,299,891
Total Non-IBL and shareholders' equity		17,793,028					17,542,942					18,144,153
Total Liabilities and Shareholders' Equity	$	46,509,766				$	45,597,230				$	45,037,632
Net Interest Income and Margin (Non-Tax Equivalent)			$	369,779	3.48 %			$	351,480	3.39 %			$	354,231	3.47 %
Net Interest Margin (Tax Equivalent) (non-GAAP)					3.48 %					3.40 %					3.48 %
Total Deposit Cost (without Debt and Other Borrowings)					1.75 %					1.90 %					1.60 %
Overall Cost of Funds (including Demand Deposits)					1.81 %					1.99 %					1.69 %

Total Accretion on Acquired Loans (1)			$	2,887				$	2,858				$	3,870
Tax Equivalent ("TE") Adjustment			$	547				$	486				$	659

The remaining loan discount on acquired loans to be accreted into loan interest income totals $36.9 million as of December 31, 2024.

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)	2024		2024		2024		2024		2023		2024		2023
Noninterest Income:
Fees on deposit accounts	$	35,121	$	33,986	$	33,842	$	33,145	$	33,225	$	136,094	$	129,015
Mortgage banking income		4,777		3,189		5,912		6,169		2,191		20,047		13,355
Trust and investment services income		12,414		11,578		11,091		10,391		10,131		45,474		39,447
Securities (losses) gains, net		(50)		—		—		—		(2)		(50)		43
Correspondent banking and capital markets income		20,905		17,381		16,267		14,591		16,081		69,144		90,579
Expense on centrally-cleared variation margin		(7,350)		(7,488)		(11,407)		(10,280)		(12,677)		(36,525)		(41,478)
Total correspondent banking and capital markets income		13,555		9,893		4,860		4,311		3,404		32,619		49,101
Bank owned life insurance income		7,944		8,276		7,372		6,892		6,567		30,484		26,690
Other		6,784		8,012		12,148		10,650		9,973		37,594		29,255
Total Noninterest Income	$	80,545	$	74,934	$	75,225	$	71,558	$	65,489	$	302,262	$	286,906

Noninterest Expense:
Salaries and employee benefits	$	154,116	$	150,865	$	151,435	$	150,453	$	145,850	$	606,869	$	583,398
Occupancy expense		22,831		22,242		22,453		22,577		22,715		90,103		88,695
Information services expense		23,416		23,280		23,144		22,353		22,000		92,193		84,472
OREO and loan related expense		1,416		1,358		1,307		606		948		4,687		1,716
Business development and staff related		7,450		5,797		6,220		5,799		7,492		25,266		26,116
Amortization of intangibles		5,326		5,327		5,744		5,998		6,615		22,395		27,558
Professional fees		5,366		4,017		3,906		3,115		7,025		16,404		18,547
Supplies and printing expense		2,729		2,762		2,526		2,540		2,761		10,558		10,578
FDIC assessment and other regulatory charges		7,365		7,482		7,771		8,534		8,325		31,152		33,070
Advertising and marketing		2,269		2,296		2,594		1,984		2,826		9,143		9,474
Other operating expenses		18,415		18,117		15,243		16,964		19,217		68,738		72,103
Merger, branch consolidation, severance related and other expense (8)		6,531		3,304		5,785		4,513		1,778		20,133		13,162
FDIC special assessment		(621)		—		619		3,854		25,691		3,852		25,691
Total Noninterest Expense	$	256,609	$	246,847	$	248,747	$	249,290	$	273,243	$	1,001,493	$	994,580

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)	2024		2024		2024		2024		2023
Construction and land development * †	$	2,184,327	$	2,458,151	$	2,592,307	$	2,437,343	$	2,923,514
Investor commercial real estate*		9,991,482		9,856,709		9,731,773		9,752,529		9,227,968
Commercial owner occupied real estate		5,716,376		5,544,716		5,522,978		5,511,855		5,497,671
Commercial and industrial		6,222,876		5,931,187		5,769,838		5,544,131		5,504,539
Consumer real estate *		8,714,969		8,649,714		8,440,724		8,223,066		7,993,450
Consumer/other		1,072,897		1,107,715		1,176,944		1,198,386		1,241,347
Total Loans	$	33,902,927	$	33,548,192	$	33,234,564	$	32,667,310	$	32,388,489

* 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 $386.2 million, $429.8 million, $544.2 million, $623.9 million, and $715.5 million for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively.

	Ending Balance
(Dollars in thousands)	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
DEPOSITS	2024		2024		2024		2024		2023
Noninterest-bearing checking	$	10,192,116	$	10,376,531	$	10,374,464	$	10,546,410	$	10,649,274
Interest-bearing checking		8,232,322		7,550,392		7,547,406		7,898,835		7,978,799
Savings		2,414,172		2,442,584		2,475,130		2,557,203		2,632,212
Money market		13,056,534		12,614,046		12,122,336		11,895,385		11,538,671
Time deposits		4,165,722		4,654,642		4,579,066		4,280,601		4,249,953
Total Deposits	$	38,060,866	$	37,638,195	$	37,098,402	$	37,178,434	$	37,048,909

Core Deposits (excludes Time Deposits)	$	33,895,144	$	32,983,553	$	32,519,336	$	32,897,833	$	32,798,956

Asset Quality

	Ending Balance
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
(Dollars in thousands)	2024		2024		2024		2024		2023
NONPERFORMING ASSETS:
Non-acquired
Non-acquired nonaccrual loans and restructured loans on nonaccrual	$	141,982	$	111,240	$	110,774	$	106,189	$	110,467
Accruing loans past due 90 days or more		3,293		6,890		5,843		2,497		11,305
Non-acquired OREO and other nonperforming assets		1,182		1,217		2,876		1,589		711
Total non-acquired nonperforming assets		146,457		119,347		119,493		110,275		122,483
Acquired
Acquired nonaccrual loans and restructured loans on nonaccrual		65,314		70,731		78,287		63,451		59,755
Accruing loans past due 90 days or more		-		389		916		135		1,174
Acquired OREO and other nonperforming assets		1,583		493		598		655		712
Total acquired nonperforming assets		66,897		71,613		79,801		64,241		61,641
Total nonperforming assets	$	213,354	$	190,960	$	199,294	$	174,516	$	184,124


	Three Months Ended
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
	2024		2024		2024		2024		2023
ASSET QUALITY RATIOS (7):
Allowance for credit losses as a percentage of loans		1.37 %		1.39 %		1.42 %		1.44 %		1.41 %
Allowance for credit losses, including reserve for unfunded commitments, as a percentage of loans		1.51 %		1.52 %		1.57 %		1.60 %		1.58 %
Allowance for credit losses as a percentage of nonperforming loans		220.94 %		247.28 %		241.19 %		272.62 %		249.90 %
Net charge-offs as a percentage of average loans (annualized)		0.06 %		0.07 %		0.05 %		0.03 %		0.09 %
Total nonperforming assets as a percentage of total assets		0.46 %		0.41 %		0.44 %		0.39 %		0.41 %
Nonperforming loans as a percentage of period end loans		0.62 %		0.56 %		0.59 %		0.53 %		0.56 %

Current Expected Credit Losses ("CECL")

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

Allowance for Credit Losses ("ACL and UFC")

(Dollars in thousands)

NonPCD ACL

PCD ACL

Total ACL

UFC

Ending balance 9/30/2024

444,622

23,359

467,981

41,515

Charge offs

(8,407)

—

(8,407)

—

Acquired charge offs

(173)

(1,357)

(1,530)

—

Recoveries

2,140

—

2,140

—

Acquired recoveries

1,759

778

2,537

—

Provision (recovery) for credit losses

5,018

(2,459)

2,559

3,812

Ending balance 12/31/2024

444,959

20,321

465,280

45,327

Period end loans

33,040,772

862,155

33,902,927

N/A

Allowance for Credit Losses to Loans

1.35 %

2.36 %

1.37 %

N/A

Unfunded commitments (off balance sheet) *

7,780,323

Reserve to unfunded commitments (off balance sheet)

0.58 %

* 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 24, 2025. 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 24, 2025 on the Investor Relations section of SouthStateBank.com.

SouthState is a financial services company headquartered in Winter Haven, Florida. The Bank, 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, Virginia, Texas and Colorado. 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, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Net income (GAAP)	$	144,178		$	143,179		$	132,370		$	115,056		$	106,791
Provision (recovery) for credit losses		6,371			(6,971)			3,889			12,686			9,893
Tax provision		43,166			43,359			40,478			38,462			29,793
Merger, branch consolidation, severance related and other expense (8)		6,531			3,304			5,785			4,513			1,778
FDIC special assessment		(621)			—			619			3,854			25,691
Securities losses		50			—			—			—			2
Pre-provision net revenue (PPNR) (Non-GAAP)	$	199,675		$	182,871		$	183,141		$	174,571		$	173,948

(Dollars in thousands)	Three Months Ended
CORE NET INTEREST INCOME (NON-GAAP)	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Net interest income (GAAP)	$	369,779		$	351,480		$	350,259		$	343,936		$	354,231
Less:
Total accretion on acquired loans		2,887			2,858			4,386			4,287			3,870
Core net interest income (Non-GAAP)	$	366,892		$	348,622		$	345,873		$	339,649		$	350,361

NET INTEREST MARGIN ("NIM"), TE (NON-GAAP)
Net interest income (GAAP)	$	369,779		$	351,480		$	350,259		$	343,936		$	354,231
Total average interest-earning assets		42,295,376			41,223,980			41,011,662			40,657,176			40,465,377
NIM, non-tax equivalent		3.48	%		3.39	%		3.43	%		3.40	%		3.47	%

Tax equivalent adjustment (included in NIM, TE)		547			486			631			528			659
Net interest income, tax equivalent (Non-GAAP)	$	370,326		$	351,966		$	350,890		$	344,464		$	354,890
NIM, TE (Non-GAAP)		3.48	%		3.40	%		3.44	%		3.41	%		3.48	%

	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	2024			2024			2024			2024			2023			2024			2023
Adjusted Net Income (non-GAAP) (2)
Net income (GAAP)	$	144,178		$	143,179		$	132,370		$	115,056		$	106,791		$	534,783		$	494,308
Securities losses (gains), net of tax		38			—			—			—			2			38			(33)
Merger, branch consolidation, severance related and other expense, net of tax (8)		5,026			2,536			4,430			3,382			1,391			15,374			10,291
FDIC special assessment, net of tax		(478)			—			474			2,888			20,087			2,884			20,087
Adjusted net income (non-GAAP)	$	148,764		$	145,715		$	137,274		$	121,326		$	128,271		$	553,079		$	524,653

Adjusted Net Income per Common Share - Basic (2)
Earnings per common share - Basic (GAAP)	$	1.89		$	1.88		$	1.74		$	1.51		$	1.40		$	7.01		$	6.50
Effect to adjust for securities losses (gains), net of tax		0.00			—			—			—			0.00			0.00			(0.00)
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.07			0.03			0.05			0.04			0.03			0.20			0.14
Effect to adjust for FDIC special assessment, net of tax		(0.01)			—			0.01			0.04			0.26			0.04			0.26
Adjusted net income per common share - Basic (non-GAAP)	$	1.95		$	1.91		$	1.80		$	1.59		$	1.69		$	7.25		$	6.90

Adjusted Net Income per Common Share - Diluted (2)
Earnings per common share - Diluted (GAAP)	$	1.87		$	1.86		$	1.73		$	1.50		$	1.39		$	6.97		$	6.46
Effect to adjust for securities losses (gains), net of tax		0.00			—			—			—			0.00			0.00			(0.00)
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.07			0.04			0.05			0.04			0.02			0.21			0.13
Effect to adjust for FDIC special assessment, net of tax		(0.01)			—			0.01			0.04			0.26			0.04			0.26
Adjusted net income per common share - Diluted (non-GAAP)	$	1.93		$	1.90		$	1.79		$	1.58		$	1.67		$	7.21		$	6.86

Adjusted Return on Average Assets (2)
Return on average assets (GAAP)		1.23	%		1.25	%		1.17	%		1.03	%		0.94	%		1.17	%		1.11	%
Effect to adjust for securities losses (gains), net of tax		0.00	%		—	%		—	%		—	%		0.00	%		0.00	%		(0.00)	%
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.04	%		0.02	%		0.05	%		0.02	%		0.01	%		0.03	%		0.02	%
Effect to adjust for FDIC special assessment, net of tax		(0.00)	%		—	%		0.00	%		0.03	%		0.18	%		0.01	%		0.04	%
Adjusted return on average assets (non-GAAP)		1.27	%		1.27	%		1.22	%		1.08	%		1.13	%		1.21	%		1.17	%

Adjusted Return on Average Common Equity (2)
Return on average common equity (GAAP)		9.72	%		9.91	%		9.58	%		8.36	%		7.99	%		9.41	%		9.37	%
Effect to adjust for securities losses (gains), net of tax		0.00	%		—	%		—	%		—	%		0.00	%		0.00	%		(0.00)	%
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.34	%		0.17	%		0.33	%		0.24	%		0.11	%		0.27	%		0.19	%
Effect to adjust for FDIC special assessment, net of tax		(0.03)	%		—	%		0.03	%		0.21	%		1.50	%		0.05	%		0.38	%
Adjusted return on average common equity (non-GAAP)		10.03	%		10.08	%		9.94	%		8.81	%		9.60	%		9.73	%		9.94	%

Return on Average Common Tangible Equity (3)
Return on average common equity (GAAP)		9.72	%		9.91	%		9.58	%		8.36	%		7.99	%		9.41	%		9.37	%
Effect to adjust for intangible assets		5.37	%		5.72	%		5.91	%		5.27	%		5.54	%		5.57	%		6.50	%
Return on average tangible equity (non-GAAP)		15.09	%		15.63	%		15.49	%		13.63	%		13.53	%		14.98	%		15.87	%

Adjusted Return on Average Common Tangible Equity (2) (3)
Return on average common equity (GAAP)		9.72	%		9.91	%		9.58	%		8.36	%		7.99	%		9.41	%		9.37	%
Effect to adjust for securities losses (gains), net of tax		0.00	%		—	%		—	%		—	%		0.00	%		0.00	%		(0.00)	%
Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8)		0.34	%		0.18	%		0.32	%		0.25	%		0.10	%		0.27	%		0.20	%
Effect to adjust for FDIC special assessment, net of tax		(0.03)	%		—	%		0.03	%		0.21	%		1.50	%		0.05	%		0.38	%
Effect to adjust for intangible assets, net of tax		5.53	%		5.80	%		6.12	%		5.53	%		6.53	%		5.74	%		6.85	%
Adjusted return on average common tangible equity (non-GAAP)		15.56	%		15.89	%		16.05	%		14.35	%		16.12	%		15.47	%		16.80	%

Adjusted Efficiency Ratio (4)
Efficiency ratio		55.73	%		56.58	%		57.03	%		58.48	%		63.43	%		56.93	%		55.50	%
Effect to adjust for merger, branch consolidation, severance related and other expense (8)		(1.31)	%		(0.78)	%		(1.36)	%		(1.08)	%		(0.43)	%		(1.14)	%		(0.76)	%
Effect to adjust for FDIC special assessment		—	%		—	%		(0.15)	%		(0.93)	%		(6.11)	%		(0.26)	%		(1.47)	%
Adjusted efficiency ratio		54.42	%		55.80	%		55.52	%		56.47	%		56.89	%		55.53	%		53.27	%

Tangible Book Value Per Common Share (3)
Book value per common share (GAAP)	$	77.18		$	77.42		$	74.16		$	72.82		$	72.78
Effect to adjust for intangible assets		(26.07)			(26.16)			(26.26)			(26.34)			(26.46)
Tangible book value per common share (non-GAAP)	$	51.11		$	51.26		$	47.90		$	46.48		$	46.32

Tangible Equity-to-Tangible Assets (3)
Equity-to-assets (GAAP)		12.70	%		12.81	%		12.42	%		12.29	%		12.32	%
Effect to adjust for intangible assets		(3.91)	%		(3.94)	%		(4.03)	%		(4.08)	%		(4.11)	%
Tangible equity-to-tangible assets (non-GAAP)		8.79	%		8.87	%		8.39	%		8.21	%		8.21	%

Footnotes to tables:

(1)	Includes loan accretion (interest) income related to the discount on acquired loans of $2.9 million, $2.9 million, $4.4 million, $4.3 million, and $3.9 million during the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively, and $14.4 million and $20.8 million during the twelve months ended December 31, 2024 and 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 $6.5 million, $3.3 million, $5.8 million, $4.5 million, and $1.8 million for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively, and $20.1 million and $13.2 million for the twelve months ended December 31, 2024 and 2023, respectively; (b) pre-tax net securities losses of $(50,000) and $(2,000) for the quarters ended December 31, 2024 and December 31, 2023, respectively, and pre-tax net losses of $(50,000) and pre-tax net gains of $43,000 for the twelve months ended December 31, 2024 and December 31, 2023, respectively; and (c) pre-tax FDIC special assessment of $(621,000), $619,000, $3.9 million, and $25.7 million for the quarters ended December 31, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively, and $3.8 million and $25.7 million for the twelve months ended December 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 $5.3 million, $5.3 million, $5.7 million, $6.0 million, and $6.6 million for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively, and $22.4 million and $27.6 million for the twelve months ended December 31, 2024, and 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)	December 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 loans held for sale.
(8)	Includes pre-tax cyber incident costs of $329,000, $56,000, $3.5 million and $4.4 million for the quarters ended, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively, and $8.3 million for the twelve months ended December 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 volatility risk, including inflation, potentially resulting in higher rates, deterioration in the credit markets, greater than expected noninterest expenses, excessive loan losses, or on the other hand lower rates, which also may have 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 related to the merger and integration of SouthState and Independent including, among others, (i) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (ii) the risk that the integration of Independent's operations into SouthState's operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate Independent's businesses into SouthState's businesses, (iii) the amount of the costs, fees, expenses and charges related to the merger, and (iv) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the merger; (4) risks relating to the ability to retain our culture and attract and retain qualified people as we grow and are located in new markets, and being able to offer competitive salaries and benefits, including flexibility of working remotely or in the office; (5) deposit attrition, client loss or revenue loss following completed mergers or acquisitions that may be greater than anticipated; (6) 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; (7) 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; (8) a decrease in our net interest income due to the interest rate environment; (9) liquidity risk affecting the Bank's ability to meet its obligations when they come due; (10) unexpected outflows of uninsured deposits may require us to sell investment securities at a loss; (11) potential deterioration in real estate values; (12) the loss of value of our investment portfolio could negatively impact market perceptions of us and could lead to deposit withdrawals; (13) price risk focusing on changes in market factors that may affect the value of traded instruments in "mark-to-market" portfolios; (14) transaction risk arising from problems with service or product delivery; (15) 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; (16) 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; (17) 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; (18) 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; (19) 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; (20) 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; (21) risks related to the legal, regulatory, and supervisory environment, including changes in financial services legislation, regulation, policies, or government officials or other personnel; (22) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (23) 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; (24) 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; (25) 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; (26) excessive loan losses; (27) reputational risk and possible higher than estimated reduced revenue from previously announced or proposed regulatory changes in the Bank's consumer programs and products; (28) 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; (29) 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; (30) geopolitical risk from terrorist activities and armed conflicts that may result in economic and supply disruptions, and loss of market and consumer confidence; (31) the risks of fluctuations in market prices for SouthState common stock that may or may not reflect economic condition or performance of SouthState; (32) 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; (33) ownership dilution risk associated with potential acquisitions in which SouthState's stock may be issued as consideration for an acquired company; and (34) 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.

Cision

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