WINTER HAVEN, Fla.,
Jan. 27, 2021 /PRNewswire/
-- SouthState Corporation (NASDAQ: SSB) today released its
unaudited results of operations and other financial information for
the three-month and twelve-month period ended December 31, 2020.
The Company reported consolidated net income of $1.21 per diluted common share for the three
months ended December 31, 2020,
compared to $1.34 per diluted common
share for the three months ended September
30, 2020, and compared to $1.45 per diluted common share one year
ago. During the fourth quarter of 2020, the Company incurred
$38.8 million in swap termination
expense (pre-tax) and $19.8 million
in merger-related and branch closure expense (pre-tax). These
charges were partially offset by an income tax benefit of
$31.5 million related to the ability
to carryback tax losses under the CARES Act.
Adjusted net income (non-GAAP) totaled $1.44 per diluted share for the three months
ended December 31, 2020, compared to
$1.58 per diluted share, in the third
quarter of 2020, and compared to $1.48 per diluted share one year ago.
Adjusted net income in the fourth quarter of 2020 excludes
$16.3 million of merger-related and
branch closure costs (after-tax), $31.8
million in swap termination expense (after-tax), and
$31.5 million of income tax benefit
referenced above. In the third quarter of 2020, adjusted net
income excludes $17.4 million in
merger-related costs (after-tax).
Highlights of the fourth quarter of 2020 include:
Returns
- Reported & adjusted diluted Earnings per Share ("EPS") of
$1.21 and $1.44 (Non-GAAP), respectively.
- Reported & adjusted Return on Average Tangible Common
Equity of 13.1% (Non-GAAP) and 15.4% (Non-GAAP), respectively.
- Pre-Provision Net Revenue ("PPNR") of $144 million, or 1.50% PPNR ROAA (Non-GAAP).
- Book value per share of $65.49
increased by $1.15 per share compared
to the prior quarter.
- Tangible book value ("TBV") per share of $41.16, up $1.33
from prior quarter (Non-GAAP).
Performance
- Net interest margin ("NIM", tax equivalent) of 3.14% down 8
basis points from prior quarter.
- Recognized $12.7 million in loan
accretion compared to $22.4 million
in the prior quarter.
- Recognized $16.6 million in PPP
net deferred loan fees compared to $8.5
million in the prior quarter.
- Total deposit cost of 0.17% down 3 basis points from prior
quarter.
- Noninterest income of $98
million.
-
- Mortgage revenue declined $22.9
million compared to the prior quarter, caused by fair value
accounting on lower mortgage pipeline and loans held for sale.
- Production and cash gain on sale margins remained strong.
Balance Sheet / Credit
- Loans declined by $573.7 million,
or 9.0% annualized, centered in $418.3
million in Paycheck Protection Program ("PPP") loan
reductions.
- Loans, excluding PPP loans, decreased $155.4 million, or 2.7% annualized, including a
$203 million decline in residential
mortgage loans.
- Total deposits increased $723.9
million with core deposit growth totaling $826.1 million, or 12.6% annualized.
- Net charge-offs of $816,000, or
0.01% annualized, bringing the full year net charge-offs to
$2.8 million, or 0.01%
annualized.
- Loan deferrals totaled $255.2
million, or 1.12% of the total loan portfolio, excluding PPP
loans and held for sale loans as of December
31, 2020.
Other Events
- Consolidated 20 branch locations in the fourth quarter with 4
scheduled to be consolidated in the first quarter of 2021.
- Paid off $700.0 million in FHLB
advances in early December.
- Recognized income tax benefit of $31.5
million related to the ability to carryback tax losses from
CARES Act.
- Declared a cash dividend on common stock of $0.47 per share, payable on February 19, 2021 to shareholders of record as of
February 12, 2021.
- On January 27, 2021, the Board
approved the authorization of a new 3.5 million share Company stock
repurchase plan which expires in two years.
"We are pleased to close 2020 with another solid quarter", said
John C. Corbett, Chief Executive
Officer. "Our diverse revenue streams continue to help offset
the pressures of the historically low interest rate environment,
and our longstanding strategic focus on soundness as a core value
continues to help us report good credit quality metrics. We
look forward to 2021 and our system conversion in the second
quarter."
"A year to the day after announcing our merger of equals, I am
pleased to see the results of our partnership continue to pay off
for our shareholders," said Robert R. Hill,
Jr., Executive Chairman. "We have achieved solid
results in Soundness, Profitability and Growth this year. I
could not be more pleased with our merger and how SouthState is
positioned for the future."
Fourth Quarter 2020 Financial Performance
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(Dollars in
thousands, except per share data)
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
INCOME
STATEMENT
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
including fees (6)
|
$
269,632
|
|
$
280,825
|
|
$
167,707
|
|
$
133,034
|
|
$
132,615
|
|
$
851,198
|
|
$
534,790
|
Investment securities, federal funds sold and securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
purchased under
agreements to resell
|
16,738
|
|
14,469
|
|
12,857
|
|
14,766
|
|
14,839
|
|
58,830
|
|
56,037
|
Total interest
income
|
286,370
|
|
295,294
|
|
180,564
|
|
147,800
|
|
147,454
|
|
910,028
|
|
590,827
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
13,227
|
|
15,154
|
|
12,624
|
|
14,437
|
|
15,227
|
|
55,442
|
|
65,920
|
Federal
funds purchased, securities sold under agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to repurchase, and
other borrowings
|
7,596
|
|
9,792
|
|
5,383
|
|
5,350
|
|
5,771
|
|
28,121
|
|
20,632
|
Total interest
expense
|
20,823
|
|
24,946
|
|
18,007
|
|
19,787
|
|
20,998
|
|
83,563
|
|
86,552
|
Net interest
income
|
265,547
|
|
270,348
|
|
162,557
|
|
128,013
|
|
126,456
|
|
826,465
|
|
504,275
|
Provision for credit losses ("PCL")
|
18,185
|
|
29,797
|
|
151,474
|
|
36,533
|
|
3,557
|
|
235,989
|
|
12,777
|
Net interest
income after provision for credit losses
|
247,362
|
|
240,551
|
|
11,083
|
|
91,480
|
|
122,899
|
|
590,476
|
|
491,498
|
Noninterest
income
|
97,871
|
|
114,790
|
|
54,347
|
|
44,132
|
|
36,307
|
|
311,140
|
|
143,565
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
expense
|
219,719
|
|
215,225
|
|
134,634
|
|
103,118
|
|
99,134
|
|
672,696
|
|
390,426
|
Merger
and/or branch consolid. expense
|
19,836
|
|
21,662
|
|
40,279
|
|
4,129
|
|
1,494
|
|
85,906
|
|
4,552
|
SWAP
termination expense
|
38,787
|
|
--
|
|
--
|
|
--
|
|
--
|
|
38,787
|
|
--
|
Federal
Home Loan Bank advances prepayment fee
|
56
|
|
--
|
|
199
|
|
--
|
|
--
|
|
255
|
|
134
|
Pension plan
termination expense
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
9,526
|
Total noninterest
expense
|
278,398
|
|
236,887
|
|
175,112
|
|
107,247
|
|
100,628
|
|
797,644
|
|
404,638
|
Income (loss)
before provision for income taxes
|
66,835
|
|
118,454
|
|
(109,682)
|
|
28,365
|
|
58,578
|
|
103,972
|
|
230,425
|
Income
taxes (benefit) provision
|
(19,401)
|
|
23,233
|
|
(24,747)
|
|
4,255
|
|
9,487
|
|
(16,660)
|
|
43,942
|
Net income
(loss)
|
$
86,236
|
|
$
95,221
|
|
$
(84,935)
|
|
$
24,110
|
|
$
49,091
|
|
$
120,632
|
|
$
186,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (non-GAAP) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
$
86,236
|
|
$
95,221
|
|
$
(84,935)
|
|
$
24,110
|
|
$
49,091
|
|
$
120,632
|
|
$
186,483
|
Securities gains, net
of tax
|
(29)
|
|
(12)
|
|
--
|
|
--
|
|
(20)
|
|
(41)
|
|
(2,173)
|
Income taxes benefit
- carryback tax loss
|
(31,468)
|
|
--
|
|
--
|
|
--
|
|
--
|
|
(31,468)
|
|
--
|
FHLB prepayment
penalty, net of tax
|
46
|
|
--
|
|
154
|
|
--
|
|
--
|
|
200
|
|
107
|
Pension plan
termination expense, net of tax
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
7,641
|
SWAP
termination expense, net of tax
|
31,784
|
|
--
|
|
--
|
|
--
|
|
--
|
|
31,784
|
|
|
Initial provision for
credit losses - NonPCD loans and UFC
|
--
|
|
--
|
|
92,212
|
|
--
|
|
--
|
|
92,212
|
|
--
|
Merger
and/or branch consolid. expense
|
16,255
|
|
17,413
|
|
31,191
|
|
3,510
|
|
1,252
|
|
68,369
|
|
3,701
|
Adjusted net
income (non-GAAP)
|
$
102,824
|
|
$
112,622
|
|
$
38,622
|
|
$
27,620
|
|
$
50,323
|
|
$
281,688
|
|
$
195,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per common share
|
$
1.22
|
|
$
1.34
|
|
$
(1.96)
|
|
$
0.72
|
|
$
1.46
|
|
$
2.20
|
|
$
5.40
|
Diluted
earnings (loss) per common share
|
$
1.21
|
|
$
1.34
|
|
$
(1.96)
|
|
$
0.71
|
|
$
1.45
|
|
$
2.19
|
|
$
5.36
|
Adjusted
net income per common share - Basic (non-GAAP) (3)
|
$
1.45
|
|
$
1.59
|
|
$
0.89
|
|
$
0.82
|
|
$
1.49
|
|
$
5.14
|
|
$
5.36
|
Adjusted
net income per common share - Diluted (non-GAAP) (3)
|
$
1.44
|
|
$
1.58
|
|
$
0.89
|
|
$
0.82
|
|
$
1.48
|
|
$
5.12
|
|
$
5.66
|
Dividends per common share
|
$
0.47
|
|
$
0.47
|
|
$
0.47
|
|
$
0.47
|
|
$
0.46
|
|
$
1.88
|
|
$
5.63
|
Basic
weighted-average common shares outstanding
|
70,941,200
|
|
70,905,027
|
|
43,317,736
|
|
33,566,051
|
|
33,677,851
|
|
54,755,518
|
|
34,560,544
|
Diluted
weighted-average common shares outstanding
|
71,294,864
|
|
71,075,866
|
|
43,317,736
|
|
33,804,908
|
|
33,964,216
|
|
55,062,748
|
|
34,797,444
|
Adjusted
diluted weighted-average common shares outstanding *
|
71,294,864
|
|
71,075,866
|
|
43,606,333
|
|
33,804,908
|
|
33,964,216
|
|
55,062,748
|
|
34,797,444
|
Effective tax rate
|
-29.03%
|
|
19.61%
|
|
22.56%
|
|
15.00%
|
|
16.20%
|
|
-16.02%
|
|
19.07%
|
Adjusted
effective tax rate
|
18.05%
|
|
19.61%
|
|
22.56%
|
|
15.00%
|
|
16.20%
|
|
14.24%
|
|
19.07%
|
*Adjusted diluted weighted average common shares was calculated
with the result of adjusted net income (non-GAAP).
As compared with 3Q 2020:
- Income taxes declined by $42.6
million due primarily to the recognition of a one-time
benefit of $31.5 million related to
the ability to carryback tax losses under the CARES Act, and lower
income tax provision totaling $11.2
million on lower pretax income of $51.6 million.
- For further discussion, please refer to the sections below
titled "Net Interest Income and Margin", "Non-interest Income and
Expense", and "Current Expected Credit Losses
("CECL")".
Performance and Capital Ratios
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
PERFORMANCE
RATIOS
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Return on average
assets (annualized)
|
0.90%
|
|
1.00%
|
|
-1.49%
|
|
0.60%
|
|
1.23%
|
|
0.42%
|
|
1.21%
|
Adjusted return on
average assets (annualized) (non-GAAP) (3)
|
1.08%
|
|
1.18%
|
|
0.68%
|
|
0.69%
|
|
1.26%
|
|
0.98%
|
|
1.27%
|
Return on average
equity (annualized)
|
7.45%
|
|
8.31%
|
|
-11.78%
|
|
4.15%
|
|
8.26%
|
|
3.35%
|
|
7.89%
|
Adjusted return on
average equity (annualized) (non-GAAP) (3)
|
8.88%
|
|
9.83%
|
|
5.36%
|
|
4.75%
|
|
8.47%
|
|
7.81%
|
|
8.28%
|
Return on average
tangible common equity (annualized) (non-GAAP) (5)
|
13.05%
|
|
14.66%
|
|
-19.71%
|
|
8.35%
|
|
15.79%
|
|
6.67%
|
|
15.11%
|
Adjusted return on
average tangible common equity (annualized) (non-GAAP) (3)
(5)
|
15.35%
|
|
17.14%
|
|
10.23%
|
|
9.45%
|
|
16.17%
|
|
14.14%
|
|
15.82%
|
Efficiency ratio (tax
equivalent)
|
76.26%
|
|
61.39%
|
|
80.52%
|
|
62.11%
|
|
61.64%
|
|
69.84%
|
|
62.52%
|
Adjusted efficiency
ratio (non-GAAP) (7)
|
60.19%
|
|
55.78%
|
|
61.91%
|
|
59.72%
|
|
60.73%
|
|
58.90%
|
|
61.80%
|
Dividend payout ratio
(2)
|
38.67%
|
|
35.01%
|
|
N/A
|
|
65.70%
|
|
31.62%
|
|
81.45%
|
|
30.94%
|
Book value per common
share
|
$
65.49
|
|
$
64.34
|
|
$
63.35
|
|
$
69.40
|
|
$
70.32
|
|
|
|
|
Tangible common
equity per common share (non-GAAP) (5)
|
$
41.16
|
|
$
39.83
|
|
$
38.33
|
|
$
38.01
|
|
$
39.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets
|
12.30%
|
|
12.07%
|
|
11.91%
|
|
13.95%
|
|
14.90%
|
|
|
|
|
Tangible
equity-to-tangible assets (non-GAAP) (5)
|
8.10%
|
|
7.83%
|
|
7.56%
|
|
8.15%
|
|
8.88%
|
|
|
|
|
Tier 1 common equity
(4) *
|
11.8%
|
|
11.5%
|
|
10.7%
|
|
11.0%
|
|
11.3%
|
|
|
|
|
Tier 1 leverage (4)
*
|
8.3%
|
|
8.1%
|
|
13.3%
|
|
9.5%
|
|
9.7%
|
|
|
|
|
Tier 1 risk-based
capital (4) *
|
11.8%
|
|
11.5%
|
|
10.7%
|
|
12.0%
|
|
12.3%
|
|
|
|
|
Total risk-based
capital (4) *
|
14.2%
|
|
13.9%
|
|
12.9%
|
|
12.7%
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
branches
|
285
|
|
305
|
|
305
|
|
155
|
|
155
|
|
|
|
|
Number of employees
(full-time equivalent basis)
|
5,184
|
|
5,266
|
|
5,369
|
|
2,583
|
|
2,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*The regulatory capital ratios presented above include the
assumption of the transitional method relative to the CAREs Act in
relief of COVID-19 pandemic on the economy and financial
institutions in the United States. The referenced relief
allows a total five-year "phase in" of the CECL impact on capital
and relief over the next two years for the impact on the allowance
for credit losses resulting from COVID-19.
Balance Sheet and Capital
(dollars in
thousands, except per share and share data)
|
Ending
Balance
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
BALANCE
SHEET
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
4,609,255
|
|
$
4,471,639
|
|
$
4,363,708
|
|
$
1,262,836
|
|
$
688,704
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
Securities held to maturity
|
955,542
|
|
-
|
|
-
|
|
-
|
|
-
|
Securities available for sale, at fair value
|
3,330,672
|
|
3,561,929
|
|
3,137,718
|
|
1,971,195
|
|
1,956,047
|
Trading
securities
|
10,674
|
|
-
|
|
494
|
|
-
|
|
-
|
Other
investments
|
160,443
|
|
185,199
|
|
133,430
|
|
62,994
|
|
49,124
|
Total investment securities
|
4,457,331
|
|
3,747,128
|
|
3,271,642
|
|
2,034,189
|
|
2,005,171
|
Loans held for
sale
|
290,467
|
|
456,141
|
|
603,275
|
|
71,719
|
|
59,363
|
Loans:
|
|
|
|
|
|
|
|
|
|
Acquired -
PCD
|
2,915,809
|
|
3,143,761
|
|
3,323,754
|
|
311,271
|
|
356,782
|
Acquired -
NonPCD
|
9,458,869
|
|
10,557,968
|
|
11,577,833
|
|
1,632,700
|
|
1,760,427
|
Non-acquired
|
12,289,456
|
|
11,536,086
|
|
10,597,560
|
|
9,562,919
|
|
9,252,831
|
Less allowance for credit losses
|
(457,309)
|
|
(440,159)
|
|
(434,608)
|
|
(144,785)
|
|
(56,927)
|
Loans, net
|
24,206,825
|
|
24,797,656
|
|
25,064,539
|
|
11,362,105
|
|
11,313,113
|
Bank property held
for sale
|
36,006
|
|
24,504
|
|
25,541
|
|
5,412
|
|
5,425
|
Other real estate
owned ("OREO")
|
11,914
|
|
13,480
|
|
18,016
|
|
7,432
|
|
6,539
|
Premises and
equipment, net
|
579,239
|
|
626,259
|
|
627,943
|
|
312,151
|
|
317,321
|
Bank owned life
insurance
|
559,368
|
|
556,475
|
|
556,807
|
|
233,849
|
|
234,567
|
Deferred tax
asset
|
63,222
|
|
107,500
|
|
107,532
|
|
46,365
|
|
31,316
|
Mortgage servicing
rights
|
43,820
|
|
34,578
|
|
25,441
|
|
26,365
|
|
30,525
|
Core deposit and
other intangibles
|
162,592
|
|
171,637
|
|
170,911
|
|
46,809
|
|
49,816
|
Goodwill
|
1,563,942
|
|
1,566,524
|
|
1,603,383
|
|
1,002,900
|
|
1,002,900
|
Other
assets
|
1,205,892
|
|
1,245,845
|
|
1,286,618
|
|
230,779
|
|
176,332
|
Total assets
|
$
37,789,873
|
|
$
37,819,366
|
|
$
37,725,356
|
|
$
16,642,911
|
|
$
15,921,092
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
9,711,338
|
|
$
9,681,095
|
|
$
9,915,700
|
|
$
3,367,422
|
|
$
3,245,306
|
Interest-bearing
|
20,982,544
|
|
20,288,859
|
|
20,041,585
|
|
8,977,125
|
|
8,931,790
|
Total deposits
|
30,693,882
|
|
29,969,954
|
|
29,957,285
|
|
12,344,547
|
|
12,177,096
|
Federal funds
purchased and securities
|
|
|
|
|
|
|
|
|
|
sold
under agreements to repurchase
|
779,666
|
|
706,723
|
|
720,479
|
|
325,723
|
|
298,741
|
Other
borrowings
|
390,179
|
|
1,089,637
|
|
1,089,279
|
|
1,316,100
|
|
815,936
|
Reserve for unfunded
commitments
|
43,380
|
|
43,161
|
|
21,051
|
|
8,555
|
|
335
|
Other
liabilities
|
1,234,886
|
|
1,446,478
|
|
1,445,411
|
|
326,943
|
|
255,971
|
Total liabilities
|
33,141,993
|
|
33,255,953
|
|
33,233,506
|
|
14,321,868
|
|
13,548,079
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock - $.01 par value; authorized 10,000,000
shares
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
Common
stock - $2.50 par value; authorized 160,000,000 shares
|
177,434
|
|
177,321
|
|
177,268
|
|
83,611
|
|
84,361
|
Surplus
|
3,765,406
|
|
3,764,482
|
|
3,759,166
|
|
1,584,322
|
|
1,607,740
|
Retained
earnings
|
657,451
|
|
604,564
|
|
542,677
|
|
643,345
|
|
679,895
|
Accumulated other comprehensive income
|
47,589
|
|
17,046
|
|
12,739
|
|
9,765
|
|
1,017
|
Total shareholders' equity
|
4,647,880
|
|
4,563,413
|
|
4,491,850
|
|
2,321,043
|
|
2,373,013
|
Total liabilities and shareholders' equity
|
$
37,789,873
|
|
$
37,819,366
|
|
$
37,725,356
|
|
$
16,642,911
|
|
$
15,921,092
|
|
|
|
|
|
|
|
|
|
|
Common shares issued
and outstanding
|
70,973,477
|
|
70,928,304
|
|
70,907,119
|
|
33,444,236
|
|
33,744,385
|
Net Interest Income and Margin
|
Three Months
Ended
|
|
December 31,
2020
|
|
September 30,
2020
|
|
December 31,
2019
|
(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,
reverse repo, and time deposits
|
$
4,509,137
|
|
$
1,098
|
|
0.10%
|
|
$
4,406,376
|
|
$
1,215
|
|
0.11%
|
|
$
573,957
|
|
$
2,337
|
|
1.62%
|
Investment
securities
|
4,070,218
|
|
15,641
|
|
1.53%
|
|
3,227,988
|
|
13,254
|
|
1.63%
|
|
1,889,311
|
|
12,502
|
|
2.63%
|
Loans held for
sale
|
382,115
|
|
2,328
|
|
2.42%
|
|
556,670
|
|
4,151
|
|
2.97%
|
|
73,541
|
|
664
|
|
3.58%
|
Total loans,
excluding PPP
|
22,701,841
|
|
245,273
|
|
4.30%
|
|
23,021,395
|
|
260,527
|
|
4.50%
|
|
11,297,402
|
|
131,951
|
|
4.63%
|
Total PPP
loans
|
2,189,696
|
|
22,031
|
|
4.00%
|
|
2,291,238
|
|
16,147
|
|
2.80%
|
|
|
|
|
|
|
Total
loans
|
24,891,536
|
|
267,304
|
|
4.27%
|
|
25,312,632
|
|
276,674
|
|
4.35%
|
|
11,297,401
|
|
131,951
|
|
4.63%
|
Total interest-earning
assets
|
33,853,006
|
|
286,371
|
|
3.37%
|
|
33,503,666
|
|
295,294
|
|
3.51%
|
|
13,834,210
|
|
147,454
|
|
4.23%
|
Noninterest-earning
assets
|
4,174,105
|
|
|
|
|
|
4,361,551
|
|
|
|
|
|
2,024,648
|
|
|
|
|
Total
Assets
|
$
38,027,111
|
|
|
|
|
|
$
37,865,217
|
|
|
|
|
|
$
15,858,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and money
market accounts
|
$
14,038,057
|
|
$
6,675
|
|
0.19%
|
|
$
13,671,430
|
|
$
7,853
|
|
0.23%
|
|
$
5,768,724
|
|
$
8,010
|
|
0.55%
|
Savings
deposits
|
2,667,211
|
|
505
|
|
0.08%
|
|
2,570,500
|
|
584
|
|
0.09%
|
|
1,313,991
|
|
769
|
|
0.23%
|
Certificates and
other time deposits
|
3,805,708
|
|
6,047
|
|
0.63%
|
|
4,007,542
|
|
6,717
|
|
0.67%
|
|
1,684,633
|
|
6,448
|
|
1.52%
|
Federal funds
purchased and repurchase agreements
|
754,457
|
|
435
|
|
0.23%
|
|
710,369
|
|
509
|
|
0.29%
|
|
290,287
|
|
590
|
|
0.81%
|
Other
borrowings
|
876,781
|
|
7,161
|
|
3.25%
|
|
1,089,399
|
|
9,283
|
|
3.39%
|
|
815,847
|
|
5,181
|
|
2.52%
|
Total interest-bearing
liabilities
|
22,142,214
|
|
20,823
|
|
0.37%
|
|
22,049,240
|
|
24,946
|
|
0.45%
|
|
9,873,482
|
|
20,998
|
|
0.84%
|
Noninterest-bearing
liabilities
|
11,277,541
|
|
|
|
|
|
11,259,916
|
|
|
|
|
|
3,628,741
|
|
|
|
|
Shareholders'
equity
|
4,607,356
|
|
|
|
|
|
4,556,061
|
|
|
|
|
|
2,356,636
|
|
|
|
|
Total Non-IBL and
shareholders' equity
|
15,884,897
|
|
|
|
|
|
15,815,977
|
|
|
|
|
|
5,985,377
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
38,027,111
|
|
|
|
|
|
$
37,865,217
|
|
|
|
|
|
$
15,858,859
|
|
|
|
|
Net interest
income and margin (NON-TAX EQUIV.)
|
|
|
$
265,548
|
|
3.12%
|
|
|
|
$
270,348
|
|
3.21%
|
|
|
|
$
126,456
|
|
3.63%
|
Net interest
margin (TAX EQUIVALENT)
|
|
|
|
|
3.14%
|
|
|
|
|
|
3.22%
|
|
|
|
|
|
3.64%
|
Total Deposit Cost
of Funds
|
|
|
|
|
0.17%
|
|
|
|
|
|
0.20%
|
|
|
|
|
|
0.50%
|
Overall Cost of
Funds (including demand deposits)
|
|
|
|
|
0.26%
|
|
|
|
|
|
0.31%
|
|
|
|
|
|
0.63%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Accretion on
acquired loans (6)
|
|
|
$
12,686
|
|
|
|
|
|
$
22,445
|
|
|
|
|
|
$
7,416
|
|
|
TEFRA (included in
NIM, tax equivalent)
|
|
|
$
1,663
|
|
|
|
|
|
$
734
|
|
|
|
|
|
$
521
|
|
|
The remaining loan discount on acquired loans which will be
accreted into loan interest income totals $97.7 million and the remaining net deferred fees
on PPP loans totals $36.7 million as
of December 31, 2020.
Noninterest Income and Expense
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
|
Dec.
31,
|
(Dollars in
thousands)
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees on
deposit accounts
|
$
25,153
|
|
$
24,346
|
|
$
16,679
|
|
$
18,141
|
|
$
19,161
|
|
$
84,319
|
|
$
75,435
|
Mortgage
banking income
|
25,162
|
|
48,022
|
|
18,371
|
|
14,647
|
|
3,757
|
|
106,202
|
|
17,564
|
Trust
and investment services income
|
7,506
|
|
7,404
|
|
7,138
|
|
7,389
|
|
6,935
|
|
29,437
|
|
29,244
|
Securities gains, net
|
35
|
|
15
|
|
--
|
|
--
|
|
24
|
|
50
|
|
2,711
|
Correspondent banking and capital market income
|
27,751
|
|
26,432
|
|
10,067
|
|
493
|
|
1,357
|
|
64,743
|
|
2,892
|
Bank
owned life insurance income
|
3,341
|
|
4,127
|
|
1,381
|
|
2,530
|
|
1,361
|
|
11,379
|
|
6,005
|
Recoveries of fully charged off acquired loans
|
--
|
|
--
|
|
--
|
|
--
|
|
2,232
|
|
--
|
|
6,847
|
Other
|
8,923
|
|
4,444
|
|
711
|
|
932
|
|
1,480
|
|
15,010
|
|
2,867
|
Total noninterest income
|
$
97,871
|
|
$
114,790
|
|
$
54,347
|
|
$
44,132
|
|
$
36,307
|
|
$
311,140
|
|
$
143,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
$
138,982
|
|
$
134,919
|
|
$
81,720
|
|
$
60,978
|
|
$
58,218
|
|
$
416,599
|
|
$
234,747
|
Pension
plan termination expense
|
-
|
|
-
|
|
-
|
|
-
|
|
--
|
|
-
|
|
9,526
|
SWAP
termination expense
|
38,787
|
|
-
|
|
-
|
|
-
|
|
--
|
|
38,787
|
|
--
|
Occupancy expense
|
23,496
|
|
23,845
|
|
15,959
|
|
12,287
|
|
12,113
|
|
75,587
|
|
47,457
|
Information services expense
|
19,527
|
|
18,855
|
|
12,155
|
|
9,306
|
|
8,919
|
|
59,843
|
|
35,477
|
FHLB
prepayment penalty
|
56
|
|
--
|
|
199
|
|
--
|
|
--
|
|
255
|
|
134
|
OREO
expense and loan related
|
728
|
|
1,146
|
|
1,107
|
|
587
|
|
1,013
|
|
3,568
|
|
3,242
|
Business
development and staff related
|
3,835
|
|
2,599
|
|
1,447
|
|
2,244
|
|
2,905
|
|
10,125
|
|
9,382
|
Amortization of intangibles
|
9,760
|
|
9,560
|
|
4,665
|
|
3,007
|
|
3,267
|
|
26,992
|
|
13,084
|
Professional fees
|
4,306
|
|
4,385
|
|
2,848
|
|
2,494
|
|
2,862
|
|
14,033
|
|
10,325
|
Supplies, printing and postage expense
|
2,809
|
|
2,755
|
|
1,610
|
|
1,505
|
|
1,464
|
|
8,679
|
|
5,881
|
FDIC
assessment and other regulatory charges
|
3,403
|
|
2,849
|
|
2,403
|
|
2,058
|
|
1,327
|
|
10,713
|
|
4,545
|
Advertising and marketing
|
1,544
|
|
1,203
|
|
531
|
|
814
|
|
1,491
|
|
4,092
|
|
4,309
|
Other
operating expenses
|
11,329
|
|
13,109
|
|
10,189
|
|
7,838
|
|
5,555
|
|
42,465
|
|
21,977
|
Branch
consolid. or merger / convers related exp.
|
19,836
|
|
21,662
|
|
40,279
|
|
4,129
|
|
1,494
|
|
85,906
|
|
4,552
|
Total noninterest expense
|
$
278,398
|
|
$
236,887
|
|
$
175,112
|
|
$
107,247
|
|
$
100,628
|
|
$
797,644
|
|
$
404,638
|
As compared with 3Q 2020:
- Noninterest income declined by $16.9
million due to lower mortgage banking income of $22.9 million, primarily caused by fair value
accounting on lower balances in the mortgage pipeline and loans
held for sale.
- This decline was partially offset by higher correspondent
banking and capital markets income, fees on deposit accounts, and
other income.
- Noninterest expense increased by $41.5
million due primarily to $38.8
million swap termination cost. This was incurred on three
cash flow hedges, which were terminated in early December.
- Salaries and employee benefits were higher by $4.1 million due primarily to payroll taxes and
additional incentives.
- Merger-related and branch consolidation cost declined by
$1.8 million.
Loans and Deposits
The following table presents a summary of the loan portfolio by
type (dollars in thousands):
|
|
Ending
Balance
|
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
March
31,
|
|
Dec.
31,
|
|
LOAN
PORTFOLIO
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land
development
|
|
$
1,899,066
|
|
$
1,840,111
|
|
$
1,999,062
|
|
$
1,105,308
|
|
$
1,016,692
|
|
Commercial non-owner
occupied real estate
|
|
5,931,323
|
|
5,936,372
|
|
6,021,317
|
|
2,371,371
|
|
2,322,590
|
|
Commercial
owner occupied real estate
|
|
4,842,092
|
|
4,846,020
|
|
4,762,520
|
|
2,177,738
|
|
2,158,701
|
|
Consumer owner
occupied real estate
|
|
4,108,042
|
|
4,311,186
|
|
4,421,247
|
|
2,665,405
|
|
2,704,405
|
|
Home equity
loans
|
|
1,336,689
|
|
1,347,798
|
|
1,378,406
|
|
758,482
|
|
758,020
|
|
Commercial and
industrial
|
|
3,113,685
|
|
3,067,399
|
|
3,005,030
|
|
1,418,421
|
|
1,386,303
|
|
Other income
producing property
|
|
587,448
|
|
629,497
|
|
650,237
|
|
327,696
|
|
346,554
|
|
Consumer non
real estate
|
|
894,334
|
|
900,171
|
|
916,623
|
|
674,791
|
|
662,883
|
|
Other
|
|
17,993
|
|
7,540
|
|
8,372
|
|
7,678
|
|
13,892
|
|
Subtotal
|
|
22,730,672
|
|
22,886,094
|
|
23,162,814
|
|
11,506,890
|
|
11,370,040
|
|
PPP
loans
|
|
1,933,462
|
|
2,351,721
|
|
2,336,333
|
|
-
|
|
-
|
|
Total
loans
|
|
$
24,664,134
|
|
$
25,237,815
|
|
$
25,499,147
|
|
$
11,506,890
|
|
$
11,370,040
|
|
The following table presents a summary of the deposit types
(dollars in thousands):
|
|
Ending
Balance
|
|
|
Dec.
31,
|
Sept.
30,
|
June
30,
|
March
31,
|
Dec.
31,
|
DEPOSITS
|
|
2020
|
2020
|
2020
|
2020
|
2019
|
|
|
|
|
|
|
|
Type
|
|
|
|
|
|
|
Demand
deposits
|
|
$
9,711,338
|
$
9,681,095
|
$
9,915,700
|
$
3,367,422
|
$
3,245,306
|
Interest bearing
deposits
|
|
6,955,575
|
6,414,905
|
6,192,915
|
2,963,679
|
2,989,467
|
Savings
|
|
2,694,010
|
2,618,877
|
2,503,514
|
1,337,730
|
1,309,896
|
Money
market
|
|
7,584,353
|
7,404,299
|
7,196,456
|
3,029,769
|
2,977,029
|
Time
deposits
|
|
3,748,605
|
3,850,778
|
4,148,700
|
1,645,947
|
1,655,398
|
|
|
|
|
|
|
|
Total
deposits
|
|
$
30,693,881
|
$
29,969,954
|
$
29,957,285
|
$
12,344,547
|
$
12,177,096
|
|
|
|
|
|
|
|
Core deposits
(excludes CDs)
|
|
26,945,276
|
26,119,176
|
25,808,585
|
10,698,600
|
10,521,698
|
Asset Quality
|
Ending
Balance
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
(Dollars in
thousands)
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
NONPERFORMING
ASSETS:
|
|
|
|
|
|
|
|
|
|
Non-acquired
|
|
|
|
|
|
|
|
|
|
Non-acquired
nonperforming loans
|
$
29,171
|
|
$
22,463
|
|
$
22,883
|
|
$
23,912
|
|
$
22,816
|
Non-acquired OREO and
other nonperforming assets
|
688
|
|
825
|
|
1,689
|
|
941
|
|
1,011
|
Total non-acquired
nonperforming assets
|
29,859
|
|
23,288
|
|
24,572
|
|
24,853
|
|
23,827
|
Acquired
|
|
|
|
|
|
|
|
|
|
Acquired
nonperforming loans (2019 periods acquired non-credit impaired
loans only) *
|
77,668
|
|
89,974
|
|
100,399
|
|
32,791
|
|
11,114
|
Acquired OREO and
other nonperforming assets
|
11,568
|
|
12,904
|
|
16,987
|
|
6,802
|
|
5,848
|
Total acquired
nonperforming assets
|
89,236
|
|
102,878
|
|
117,386
|
|
39,593
|
|
16,962
|
Total
nonperforming assets *
|
$
119,095
|
|
$
126,166
|
|
$
141,958
|
|
$
64,446
|
|
$
40,789
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
ASSET QUALITY
RATIOS:
|
|
|
|
|
|
|
|
|
|
Allowance for
non-acquired loan losses as a
|
|
|
|
|
|
|
|
|
|
percentage of
non-acquired loans (1)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
0.62%
|
Allowance for credit
losses as a percentage of loans
|
1.85%
|
|
1.74%
|
|
1.70%
|
|
1.26%
|
|
N/A
|
Allowance for credit
losses as a percentage of loans, excluding PPP loans
|
2.01%
|
|
1.92%
|
|
1.88%
|
|
N/A
|
|
N/A
|
Allowance for
non-acquired loan losses as a
|
|
|
|
|
|
|
|
|
|
percentage of
non-acquired nonperforming loans
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
249.50%
|
Allowance for credit
losses as a percentage of nonperforming loans *
|
428.04%
|
|
391.47%
|
|
352.53%
|
|
255.34%
|
|
N/A
|
Net charge-offs on
non-acquired loans as a percentage of average (annualized)
(1)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
0.06%
|
Net charge-offs as a
percentage of average loans (annualized)
|
0.01%
|
|
0.01%
|
|
0.00%
|
|
0.05%
|
|
N/A
|
Net charge-offs on
acquired loans as a percentage
|
|
|
|
|
|
|
|
|
|
of average
acquired loans (annualized) (1)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
-0.01%
|
Total nonperforming
assets as a percentage
|
|
|
|
|
|
|
|
|
|
of total
assets *
|
0.32%
|
|
0.33%
|
|
0.38%
|
|
0.39%
|
|
0.26%
|
Nonperforming loans
as a percentage of period end loans *
|
0.43%
|
|
0.45%
|
|
0.48%
|
|
0.49%
|
|
0.30%
|
*Total nonperforming assets now include nonaccrual loans that
are purchase credit deteriorated ("PCD loans"). Prior to
January 1, 2020, these loans, which
were called acquired credit impaired ("ACI") loans, were excluded
from nonperforming assets. The adoption of CECL resulted in
the discontinuation of the pool-level accounting for ACI loans and
replaced it with loan-level evaluation for PCD nonaccrual
status. The Company's nonperforming loans increased by
$21.0 million in the first quarter of
2020 from these loans. The Company has not assumed or taken
on any additional risk relative to these assets. With the
merger with CSFL on June 7, 2020, the
amount of acquired nonaccruals loans increased by approximately
$69.9 million during the second
quarter of 2020.
As compared with 3Q 2020:
- Total OREO decreased by $1.6
million to $11.9 million.
- Net charge-offs totaled $816,000,
or 0.01% annualized, as a percentage of average loans, compared to
$594,000, or 0.01% annualized.
- Total allowance for credit losses ("ACL") was $457.3 million, or 1.85% of period end loans
compared to $440.2 million, or
1.74%.
- ACL for unfunded commitments was $43.4
million, or 0.93% of the unfunded commitments (off balance
sheet) compared to $43.2 million, or
0.94%.
- The provision for credit losses declined $11.6 million.
- Total nonperforming assets decreased $7.1 million to $119.1
million, representing 0.32% of total assets, a decline of 1
basis point. The decrease was $5.6
million in nonperforming loans and $1.5 million in other nonperforming
assets.
Current Expected Credit Losses ("CECL")
Effective January 1, 2020, the
Company adopted ASU 2016-13 ("CECL"), which affects the allowance
for credit losses and the liability for unfunded commitments
("UFC"). Below is a table showing the roll forward of the ACL
and UFC for the fourth quarter of 2020:
|
|
Allowance for
Credit Losses ("ACL & UFC")
|
|
|
NonPCD
ACL
|
PCD
ACL
|
Total
|
|
UFC
|
Ending balance
9/30/2020
|
|
$
286,506
|
$
153,653
|
$
440,159
|
|
$
43,161
|
Charge
offs
|
|
(2,031)
|
|
(2,031)
|
|
|
Acquired charge
offs
|
|
(203)
|
(2,072)
|
(2,275)
|
|
|
Recoveries
|
|
939
|
|
939
|
|
|
Acquired
recoveries
|
|
1,086
|
1,465
|
2,551
|
|
|
Provision for credit
losses
|
|
29,173
|
(11,207)
|
17,966
|
|
219
|
Ending balance
12/31/2020
|
|
$
315,470
|
$
141,839
|
$
457,309
|
|
$
43,380
|
|
|
|
|
|
|
|
Period end loans
(includes PPP Loans)
|
|
$
21,748,325
|
$
2,915,809
|
$
24,664,134
|
|
N/A
|
Reserve to Loans
(includes PPP Loans)
|
|
1.45%
|
4.86%
|
1.85%
|
|
N/A
|
Period end loans
(excludes PPP Loans)
|
|
$
19,814,863
|
$
2,915,809
|
$
22,730,672
|
|
N/A
|
Reserve to Loans
(excludes PPP Loans)
|
|
1.59%
|
4.86%
|
2.01%
|
|
N/A
|
Unfunded commitments
(off balance sheet) *
|
|
|
|
|
|
$
4,670,868
|
Reserve to unfunded
commitments (off balance sheet)
|
|
|
|
|
|
0.93%
|
* Unfunded commitments excludes unconditionally cancelable
commitments and letters of credit.
- Net charge offs of NonPCD loans totaled $209,000 for the quarter and for PCD loans
totaled $607,000.
- The provision for credit losses recorded during the fourth
quarter reflects an $11.2 million
decline in the ACL related to PCD loans primarily from $226 million in loan payments.
- The provision for credit losses recorded during the fourth
quarter reflects a $29.2 million
increase in the ACL related to NonPCD loans primarily from the
blending of two forecasted economic scenarios. The use of two
forecast scenarios allowed for the consideration of the uncertainty
around the rising cases of the COVID19 pandemic and resultant
additional expected credit losses in the NonPCD loan
portfolio.
- The ACL for unfunded commitments totals $43.4 million, or 0.93% of the unfunded
commitment balance compared to 0.94% at September 30, 2020.
Merger with CSFL
The merger with CSFL closed on June
7, 2020. The Company issued 37,271,069 shares using an
exchange ratio of 0.3001. The total purchase price was
$2.257 billion. The initial
(preliminary) allocation of the purchase price to the fair value of
assets and liabilities acquired was completed as of June 30, 2020. Below is a table that
reflects that initial allocation of the purchase price and
additional measurement period adjustments recorded during the third
and fourth quarter of 2020:
South State
Corporation
|
|
|
|
|
|
|
|
|
|
Fair Value
of
|
CenterState Bank
Corporation
|
|
|
|
|
|
3Q
2020
|
|
4Q
2020
|
|
Net
Assets
|
Merger Date of
June 7, 2020
|
|
|
|
Initial
|
|
Measurement
|
|
Measurement
|
|
Acquired
at
|
|
|
As
Recorded
|
|
Fair
Value
|
|
Period
|
|
Period
|
|
Date
of
|
(Dollars in
thousands)
|
|
by
CSFL
|
|
Adjustments
|
|
Adjustments
|
|
Adjustments
|
|
Acquisition
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,566,450
|
|
$
--
|
|
|
|
|
|
$
2,566,450
|
Investment
securities
|
|
1,188,403
|
|
5,507
|
|
--
|
|
--
|
|
1,193,910
|
Loans held for
sale
|
|
453,578
|
|
--
|
|
|
|
|
|
453,578
|
Loans
|
|
12,969,091
|
|
(48,342)
|
|
29,834
|
|
--
|
|
12,950,583
|
Premises and
equipment
|
|
324,396
|
|
2,392
|
|
5,999
|
|
(2,490)
|
|
330,297
|
Intangible
assets
|
|
1,294,211
|
|
(1,163,349)
|
|
10,000
|
|
--
|
|
140,862
|
Other real estate
owned and repossessed assets
|
|
10,849
|
|
(791)
|
|
(49)
|
|
--
|
|
10,009
|
Bank owned life
insurance
|
|
333,053
|
|
--
|
|
|
|
|
|
333,053
|
Deferred tax
asset
|
|
54,122
|
|
(8,681)
|
|
(8,952)
|
|
750
|
|
37,239
|
Other
assets
|
|
950,813
|
|
(604)
|
|
26
|
|
--
|
|
950,235
|
Total
assets
|
|
$
20,144,966
|
|
$
(1,213,868)
|
|
$
36,858
|
|
$
(1,740)
|
|
$
18,966,216
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
5,291,443
|
|
$
--
|
|
$
--
|
|
$
--
|
|
$
5,291,443
|
Interest-bearing
|
|
10,312,370
|
|
19,702
|
|
--
|
|
--
|
|
10,332,072
|
Total
deposits
|
|
15,603,813
|
|
19,702
|
|
--
|
|
--
|
|
15,623,515
|
Federal funds
purchased and securities
|
|
|
|
|
|
|
|
|
|
sold under agreements
to repurchase
|
|
401,546
|
|
--
|
|
--
|
|
--
|
|
401,546
|
Other
borrowings
|
|
278,900
|
|
(7,401)
|
|
--
|
|
--
|
|
271,499
|
Other
liabilities
|
|
977,725
|
|
(4,592)
|
|
--
|
|
857
|
|
973,990
|
Total
liabilities
|
|
17,261,984
|
|
7,709
|
|
--
|
|
857
|
|
17,270,550
|
Net identifiable
assets acquired over liabilities assumed
|
|
2,882,982
|
|
(1,221,577)
|
|
36,858
|
|
(2,597)
|
|
1,695,666
|
Goodwill
|
|
|
|
600,483
|
|
(36,858)
|
|
(2,583)
|
|
561,042
|
Net assets acquired
over liabilities assumed
|
|
$
2,882,982
|
|
$
(621,094)
|
|
$
--
|
|
$
(5,180)
|
|
$
2,256,708
|
|
|
|
|
|
|
|
|
|
|
|
Consideration:
|
|
|
|
|
|
|
|
|
|
|
South State
Corporation common shares issued
|
|
|
|
|
|
|
|
37,271,069
|
Purchase price per
share of the Company's common stock
|
|
|
|
|
|
$
60.27
|
Company common stock
issued and cash
|
|
|
|
|
|
|
|
|
exchanged for
fractional shares
|
|
|
|
|
|
|
|
|
|
$
2,246,401
|
Stock Option
Conversion
|
|
|
|
|
|
|
|
|
|
2,900
|
Restricted Stock
Conversion
|
|
|
|
|
|
|
|
|
|
7,407
|
Fair value of total
consideration transferred
|
|
|
|
|
|
|
|
$
2,256,708
|
The measurement period adjustments during the fourth quarter of
2020 related to the merger between the Company and CSFL include the
following:
- Goodwill was reduced by $2.6
million with the measurement period adjustments recorded in
the fourth quarter of 2020, and resulted in total goodwill from the
merger with CSFL of $561.0
million.
- Adjusted the discount rate applied to the bank owned life
insurance split dollar liability, which increased the liability, by
$857,000.
- Adjusted the fair value of certain premises where updated
information was received, which totaled $2.5
million.
- Adjusted deferred tax asset by $750,000 for these adjustments noted above.
- The purchase price (consideration transferred) decreased by
$5.2 million to $2.9 million for stock options assumed and
converted in the merger. The stock options assumed reflect their
intrinsic value based upon a Black Scholes valuation.
In addition, with respect to the merger and conversion:
- Merger-related and branch closure cost incurred during the
fourth quarter totaled $19.8 million,
pre-tax; and included contract terminations, professional fees,
branch closure cost, and severance and support incentives to
personnel.
- The merger integration, conversion, and cost savings
identification process remains on schedule.
Conference Call
The Company will announce its fourth quarter 2020 earnings
results in a news release after the market closes on January 27, 2021. At 10:00 a.m. Eastern Time on January 28, 2021, the Company will host a
conference call to discuss its fourth quarter results.
Callers wishing to participate may call toll-free by dialing
877-506-9272. The number for international participants is
(412) 680-2004. The conference ID number is 10151303.
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 28, 2021 on the Investor
Relations section of SouthStateBank.com.
South State Corporation is a financial services
company headquartered in Winter Haven,
Florida. South State 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. 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.
Pre-provision net
revenue (in thousands)
|
|
Dec. 31,
2020
|
Sept. 30,
2020
|
June 30,
2020
|
|
|
|
|
|
|
|
Netincome (loss)
(GAAP)
|
|
$
86,236
|
$
95,221
|
$
(84,935)
|
|
PCL legacy
SSB
|
|
18,185
|
29,797
|
31,259
|
|
PCL legacy CSB NonPCD
and UFC - Day 1
|
|
-
|
-
|
119,079
|
|
PCL legacy CSB for
June
|
|
-
|
-
|
1,136
|
|
Tax provision
(benefit)
|
|
(19,401)
|
23,233
|
(24,747)
|
|
Merger-related
costs
|
|
19,836
|
21,662
|
40,279
|
|
Securities
gain
|
|
(35)
|
(15)
|
-
|
|
FHLB advance
prepayment cost
|
|
56
|
-
|
199
|
|
Swap termination
cost
|
|
38,787
|
|
|
|
CSB pre-merger
PPNR
|
|
-
|
-
|
74,791
|
|
|
|
|
|
|
|
Pre-provision net
revenue (PPNR) Non-GAAP
|
|
$
143,664
|
$
169,898
|
$
157,061
|
|
|
|
|
|
|
|
SSB average asset
balance (GAAP)
|
|
$
38,027,111
|
$
37,865,217
|
$
22,898,925
|
|
CSB average asset
balance pre-merger
|
|
|
|
14,604,081
|
|
Total average balance
June 30, 2020 (Non-GAAP)
|
|
|
|
$
37,503,006
|
|
|
|
|
|
|
|
ROAA
PPNR
|
|
1.50%
|
1.79%
|
1.68%
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(Dollars in
thousands, except per share data)
|
Dec.
31
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Dec.
31
|
|
Dec.
31,
|
RECONCILIATION OF
GAAP TO Non-GAAP
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted net
income (non-GAAP) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
$
86,236
|
|
$
95,221
|
|
$
(84,935)
|
|
$
24,110
|
|
$
49,091
|
|
$
120,632
|
|
$
186,483
|
Securities gains, net
of tax
|
(29)
|
|
(12)
|
|
--
|
|
--
|
|
(20)
|
|
(41)
|
|
(2,173)
|
PCL - NonPCD loans
& unfunded commitments
|
--
|
|
--
|
|
92,212
|
|
--
|
|
--
|
|
92,212
|
|
--
|
Pension plan
termination expense, net of tax
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
7,641
|
Swap termination
expense, net of tax
|
31,784
|
|
|
|
|
|
|
|
|
|
31,784
|
|
|
Provision (Benefit)
for income taxes - carryback tax loss
|
(31,468)
|
|
|
|
|
|
|
|
|
|
(31,468)
|
|
|
FHLB prepayment
penalty, net of tax
|
46
|
|
--
|
|
154
|
|
--
|
|
--
|
|
200
|
|
107
|
Merger and branch
consolidation/acq. expense, net of tax
|
16,255
|
|
17,413
|
|
31,191
|
|
3,510
|
|
1,252
|
|
68,369
|
|
3,701
|
Adjusted net income
(non-GAAP)
|
$
102,824
|
|
$
112,622
|
|
$
38,622
|
|
$
27,620
|
|
$
50,323
|
|
$
281,688
|
|
$
195,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income per common share - Basic (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share - Basic (GAAP)
|
$
1.22
|
|
$
1.34
|
|
$
(1.96)
|
|
$
0.72
|
|
$
1.46
|
|
$
2.20
|
|
5.40
|
Effect to adjust for
securities gains
|
(0.00)
|
|
(0.00)
|
|
--
|
|
--
|
|
(0.01)
|
|
(0.00)
|
|
(0.06)
|
Effect to adjust for PCL - NonPCD loans & unfunded
commitments
|
--
|
|
--
|
|
2.13
|
|
--
|
|
-
|
|
1.68
|
|
-
|
Effect to adjust for
pension plan termination expense, net of tax
|
--
|
|
--
|
|
--
|
|
--
|
|
-
|
|
--
|
|
0.22
|
Effect to adjust for
swap termination expense, net of tax
|
0.45
|
|
|
|
|
|
|
|
|
|
0.58
|
|
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
(0.44)
|
|
|
|
|
|
|
|
|
|
(0.57)
|
|
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
0.00
|
|
--
|
|
0.00
|
|
--
|
|
-
|
|
0.00
|
|
0.00
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.23
|
|
0.25
|
|
0.72
|
|
0.10
|
|
0.04
|
|
1.25
|
|
0.11
|
Adjusted net income
per common share - Basic (non-GAAP)
|
$
1.45
|
|
$
1.59
|
|
$
0.89
|
|
$
0.82
|
|
$
1.49
|
|
$
5.14
|
|
$
5.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income per common share - Diluted (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share - Diluted (GAAP)
|
$
1.21
|
|
$
1.34
|
|
$
(1.96)
|
|
$
0.71
|
|
$
1.45
|
|
$
2.19
|
|
$
5.36
|
Effect to adjust for
securities gains
|
(0.00)
|
|
(0.00)
|
|
--
|
|
--
|
|
(0.01)
|
|
(0.00)
|
|
(0.06)
|
Effect to adjust for
swap termination expense, net of tax
|
0.45
|
|
|
|
|
|
|
|
|
|
0.58
|
|
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
(0.44)
|
|
|
|
|
|
|
|
|
|
(0.57)
|
|
|
Effect to adjust for PCL - NonPCD loans & unfunded
commitments
|
--
|
|
--
|
|
2.11
|
|
--
|
|
-
|
|
1.67
|
|
--
|
Effect to adjust for
pension plan termination expense, net of tax
|
--
|
|
--
|
|
--
|
|
--
|
|
-
|
|
--
|
|
0.22
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
--
|
|
--
|
|
0.00
|
|
--
|
|
-
|
|
0.00
|
|
0.00
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.23
|
|
0.24
|
|
0.72
|
|
0.11
|
|
0.04
|
|
1.24
|
|
0.11
|
Effect of adjusted
weighted ave shares due to adjusted net income
|
-
|
|
-
|
|
0.02
|
|
|
|
|
|
-
|
|
-
|
Adjusted net income
per common share - Diluted (non-GAAP)
|
$
1.44
|
|
$
1.58
|
|
$
0.89
|
|
$
0.82
|
|
$
1.48
|
|
$
5.12
|
|
$
5.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return of
Average Assets (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return
on average assets (GAAP)
|
0.90%
|
|
1.00%
|
|
-1.49%
|
|
0.60%
|
|
1.23%
|
|
0.42%
|
|
1.21%
|
Effect
to adjust for swap termination expense
|
0.33%
|
|
|
|
|
|
|
|
|
|
0.12%
|
|
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
-0.33%
|
|
|
|
|
|
|
|
|
|
-0.11%
|
|
|
Effect to adjust for
securities gains
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
-0.01%
|
Effect to adjust for PCL - NonPCD loans & unfunded
commitments
|
0.00%
|
|
0.00%
|
|
1.62%
|
|
0.00%
|
|
0.00%
|
|
0.32%
|
|
0.00%
|
Effect to adjust for
pension plan termination expense, net of tax
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.05%
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.18%
|
|
0.18%
|
|
0.55%
|
|
0.09%
|
|
0.03%
|
|
0.23%
|
|
0.02%
|
Adjusted return on
average assets (non-GAAP)
|
1.08%
|
|
1.18%
|
|
0.68%
|
|
0.69%
|
|
1.26%
|
|
0.98%
|
|
1.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return of
Average Equity (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return
on average equity (GAAP)
|
7.45%
|
|
8.31%
|
|
-11.78%
|
|
4.15%
|
|
8.26%
|
|
3.35%
|
|
7.89%
|
Effect to adjust for
securities gains
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
-0.09%
|
Effect
to adjust for swap termination expense
|
2.74%
|
|
|
|
|
|
|
|
|
|
0.88%
|
|
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
-2.72%
|
|
|
|
|
|
|
|
|
|
-0.87%
|
|
|
Effect to adjust for PCL - NonPCD loans & unfunded
commitments
|
0.00%
|
|
0.00%
|
|
12.79%
|
|
0.00%
|
|
0.00%
|
|
2.56%
|
|
0.00%
|
Effect to adjust for
pension plan termination expense, net of tax
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.32%
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
0.00%
|
|
0.00%
|
|
0.02%
|
|
0.00%
|
|
0.00%
|
|
0.01%
|
|
0.01%
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
1.41%
|
|
1.52%
|
|
4.33%
|
|
0.60%
|
|
0.21%
|
|
1.88%
|
|
0.15%
|
Adjusted return on
average equity (non-GAAP)
|
8.88%
|
|
9.83%
|
|
5.36%
|
|
4.75%
|
|
8.47%
|
|
7.81%
|
|
8.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on
Average Common Tangible Equity (3) (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return
on average common equity (GAAP)
|
7.45%
|
|
8.31%
|
|
-11.78%
|
|
4.15%
|
|
8.26%
|
|
3.35%
|
|
7.89%
|
Effect to adjust for
securities gains
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
-0.09%
|
Effect
to adjust for swap termination expense
|
2.74%
|
|
|
|
|
|
|
|
|
|
3.51%
|
|
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
-2.72%
|
|
|
|
|
|
|
|
|
|
-0.87%
|
|
|
Effect to adjust for PCL - NonPCD loans & unfunded
commitments
|
0.00%
|
|
0.00%
|
|
12.79%
|
|
0.00%
|
|
0.00%
|
|
2.56%
|
|
0.00%
|
Effect to adjust for
pension plan termination expense, net of tax
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.32%
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
0.00%
|
|
0.00%
|
|
0.02%
|
|
0.00%
|
|
0.00%
|
|
0.01%
|
|
0.00%
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
1.40%
|
|
1.52%
|
|
4.32%
|
|
0.60%
|
|
0.21%
|
|
1.90%
|
|
0.16%
|
Effect to adjust for
intangible assets
|
6.48%
|
|
7.31%
|
|
4.88%
|
|
4.70%
|
|
7.70%
|
|
3.68%
|
|
7.54%
|
Adjusted return on
average common tangible equity (non-GAAP)
|
15.35%
|
|
17.14%
|
|
10.23%
|
|
9.45%
|
|
16.17%
|
|
14.14%
|
|
15.82%
|
|
Three Months
Ended
|
|
(Dollars in
thousands, except per share data)
|
Dec.
31
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
RECONCILIATION OF
GAAP TO Non-GAAP
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
efficiency ratio (5)
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
76.26%
|
|
61.39%
|
|
80.52%
|
|
62.11%
|
|
61.64%
|
|
Effect to adjust for
one-time related costs and benefits
|
-16.07%
|
|
-5.61%
|
|
-18.61%
|
|
-2.39%
|
|
-0.91%
|
|
Adjusted efficiency
ratio
|
60.19%
|
|
55.78%
|
|
61.91%
|
|
59.72%
|
|
60.73%
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book
Value Per Common Share (5)
|
|
|
|
|
|
|
|
|
|
|
Book
value per common share (GAAP)
|
$
65.49
|
|
$
64.34
|
|
$
63.35
|
|
$
69.40
|
|
$
70.32
|
|
Effect to adjust for
intangible assets
|
(24.33)
|
|
(24.51)
|
|
(25.02)
|
|
(31.39)
|
|
(31.19)
|
|
Tangible book value
per common share (non-GAAP)
|
$
41.16
|
|
$
39.83
|
|
$
38.33
|
|
$
38.01
|
|
$
39.13
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
Equity-to-Tangible Assets (5)
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets (GAAP)
|
12.30%
|
|
12.07%
|
|
11.91%
|
|
13.95%
|
|
14.90%
|
|
Effect to adjust for
intangible assets
|
-4.20%
|
|
-4.24%
|
|
-4.35%
|
|
-5.80%
|
|
-6.02%
|
|
Tangible
equity-to-tangible assets (non-GAAP)
|
8.10%
|
|
7.83%
|
|
7.56%
|
|
8.15%
|
|
8.88%
|
|
Footnotes to tables:
(1) Loan data excludes mortgage loans held for
sale.
(2) The dividend payout ratio is calculated by
dividing total dividends paid during the period by the total net
income for the same period.
(3) Adjusted earnings, adjusted return on average
assets, and adjusted return on average equity are non-GAAP measures
and exclude the after-tax effect of gains on acquisitions, gains or
losses on sales of securities, income tax benefit related to the
carryback of tax losses under the CARES Act, swap termination
expense, and merger and branch consolidation related expense.
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 and branch consolidation related
expense of $19.8 million,
$21.7 million, $40.3 million, $4.1
million, and $1.5 million, for
the quarters ended December 31, 2020,
September 30, 2020, June 30, 2020, March 31,
2020, and December 31, 2019,
respectively; (b) securities (losses) gains, net of $35,000, $15,000,
and $24,000, for the quarters ended
December 31, 2020, September 30, 2020, and December 31, 2019, respectively; (c) FHLB
prepayment penalty of $56,000 and $199,000 for the quarters ended
December 31, 2020 and June 30, 2020; (d) swap termination expense
for the quarter ended December 31, 2020, of $38.8 million; and (e)
$31.5 million of tax carryback losses under the CARES Act for the
quarter ended December 31, 2020.
(4) December 31, 2020
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.
(5) 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 Non-GAAP to
GAAP" provide tables that reconcile non-GAAP measures to GAAP.
(6) Includes loan accretion (interest) income
related to the discount on acquired loans of $12.7 million, $22.4
million, $10.1 million
$10.9 million, and $7.4 million, respectively, during the five
quarters above.
(7) Adjusted efficiency ratio is calculated by
taking the noninterest expense excluding swap termination expense,
branch consolidation cost and merger cost, pension plan termination
and the FHLB prepayment penalty divided by net interest income and
noninterest income excluding securities gains (losses).
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, greater than expected noninterest expenses,
excessive loan losses and other negative consequences, which risks
could be exacerbated by potential negative economic developments
resulting from the Covid19 pandemic, or from federal spending cuts
and/or one or more federal budget-related impasses or actions; (2)
interest rate risk primarily resulting from the low interest rate
environment and historically low yield curve primarily due to
government programs in place under the CARES Act and otherwise in
response to the Covid19 pandemic, 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)
risks related to the merger and integration of SouthState and
CSFL 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 each party'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 each party's businesses into the other's businesses,
(iii) the amount of the costs, fees, expenses and charges related
to the merger, (iv) reputational risk and the reaction of each
company's customers, suppliers, employees or other business
partners to the merger, (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 pricing
pressures (including those resulting from the CARES Act) and the
resulting impact, including as a result of compression to net
interest margin; (8) 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; (9) liquidity risk affecting the Bank's
ability to meet its obligations when they come due; (10) 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; (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)
compliance risk involving risk to earnings or capital resulting
from violations of or nonconformance with laws, rules, regulations,
prescribed practices, or ethical standards; (14) 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 the
recently enacted CARES Act, the Consumer Financial Protection
Bureau rules and regulations, and the possibility of changes in
accounting standards, policies, principles and practices, including
changes in accounting principles relating to loan loss recognition
(CECL); (15) strategic risk resulting from adverse business
decisions or improper implementation of business decisions; (16)
reputation risk that adversely affects earnings or capital arising
from negative public opinion; (17) terrorist activities risk that
results in loss of consumer confidence and economic disruptions;
(18) 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; (19) greater than expected
noninterest expenses; ; (20) excessive loan losses; ((21) potential
deposit attrition, higher than expected costs, customer loss and
business disruption associated with the CSFL integration, and
potential difficulties in maintaining relationships with key
personnel; (22) the risks of fluctuations in market prices for
SouthState common stock that may or may not reflect economic
condition or performance of SouthState; (23) 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; (24) ownership dilution risk associated with potential
acquisitions in which SouthState's stock may be issued as
consideration for an acquired company; (25) ;operational,
technological, cultural, regulatory, legal, credit and other risks
associated with the exploration, consummation and integration of
potential future acquisition, whether involving stock or cash
consideration; (26) major catastrophes such as hurricanes,
tornados, earthquakes, floods or other natural or human disasters,
including infectious disease outbreaks, including the ongoing
COVID-19 pandemic, 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; and (27) other factors that may
affect future results of SouthState and CenterState, as disclosed
in SouthState's Annual Report on Form 10-K, as amended, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K, and
CenterState's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and Current Reports on Form 8-K, in each case filed by
SouthState or CenterState, as applicable, 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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SOURCE SouthState Corporation