WINTER HAVEN, Fla.,
April 28, 2021 /PRNewswire/ --
SouthState Corporation (NASDAQ: SSB) today released its unaudited
results of operations and other financial information for the
three-month period ended March 31,
2021.
The Company reported consolidated net income of $2.06 per diluted common share for the three
months ended March 31, 2021, compared
to $1.21 per diluted common share for
the three months ended December 31,
2020, and compared to $0.71
per diluted common share one year ago.
Adjusted net income (non-GAAP) totaled $2.17 per diluted share for the three months
ended March 31, 2021, compared to
$1.44 per diluted share, in the
fourth quarter of 2020, and compared to $0.82 per diluted share one year ago.
Adjusted net income in the first quarter of 2021 excludes
$7.8 million of merger-related and
branch closure costs (after-tax). In the fourth quarter of
2020, adjusted net income excluded $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 related to the ability to
carryback tax losses under the CARES Act.
Highlights of the first quarter of 2021 include:
Returns
- Reported & adjusted diluted Earnings per Share ("EPS") of
$2.06 and $2.17 (Non-GAAP), respectively
- Recorded a negative provision for credit losses of $58.4 million compared to $18.2 million in provision expense in the prior
quarter
- Reported & adjusted Return on Average Tangible Common
Equity of 21.2% (Non-GAAP) and 22.2% (Non-GAAP), respectively
- Pre-Provision Net Revenue ("PPNR") of $140 million, or 1.48% PPNR ROAA (Non-GAAP)
- Book value per share of $66.42
increased by $0.93 per share compared
to the prior quarter
- Tangible book value ("TBV") per share of $42.02 (Non-GAAP), up $4.01, or 10.5% from the year ago figure
Performance
- Net interest margin ("NIM", tax equivalent) of 3.12%, down 2
basis points from prior quarter
- Recognized $10.4 million in loan
accretion compared to $12.7 million
in the prior quarter
- Recognized $20.4 million in
PPP net deferred loan fee income compared to $16.6 million in the prior quarter
- Total deposit cost of 0.15% down 2 basis points from prior
quarter
- Noninterest income of $96.3
million, 1.02% of assets
Balance Sheet / Credit
- Total deposits increased $1.7
billion with core deposit growth totaling $2.0 billion, or 30.3% annualized; 33.3% of
deposits are noninterest-bearing
- Loans, excluding PPP loans, decreased $185.0 million, or 3.3% annualized, centered in
$131.1 million decline in consumer
real estate loans and home equity lines of credit; C&I loans
grew for the third consecutive quarter
- Total PPP loans grew by $12.3
million, including the addition of $731.8 million round 2 PPP loans
- Net loan recoveries of $21,000,
or 0.00% annualized
- Loan deferrals totaled $186.3
million, or 0.83% of the total loan portfolio, excluding PPP
loans and held for sale loans as of March
31, 2021
Other Events
- Completed Duncan-Williams, Inc. acquisition on February 1, 2021
- Consolidated 4 branch locations in the first quarter
- Declared a cash dividend on common stock of $0.47 per share, payable on May 21, 2021 to
shareholders of record as of May 14,
2021
- Received board and regulatory approval to redeem $25 million of subordinated debt and $38.5 million of trust preferred securities
assumed from CenterState Bank Corporation ("CSFL"); Management
intends to redeem by the next quarterly interest distribution date
and expects to accelerate approximately $11
million of unamortized fair value discount related to the
trust preferred securities
"We are pleased to begin 2021 with solid results in the first
quarter", said John C. Corbett,
Chief Executive Officer. "Our longstanding focus on asset
quality has benefited us through this environment, with four
consecutive quarters with minimal to no net loan losses. The
improvement in the economy and in economic forecasts led us to
release loss reserves in the quarter, aiding our net income, though
we continue to have a solid reserve position should the economic
recovery falter. We are also pleased to have expanded our
Correspondent division with the February
1 addition of the Duncan Williams team to the company."
"South State's balance sheet is strong and continues to
strengthen with annualized total deposit growth of 23% for the
quarter and Tangible Book Value growth of 10.5% compared to last
year," said Robert R. Hill, Jr.,
Executive Chairman. "This foundation, coupled with strong fee
businesses, has us well-positioned for the future."
First Quarter 2021
Financial Performance
|
|
|
Three Months
Ended
|
(Dollars in
thousands, except per share data)
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
March
31,
|
INCOME
STATEMENT
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
including fees (1)
|
|
$
|
259,967
|
|
$
|
269,632
|
|
$
|
280,825
|
|
$
|
167,707
|
|
$
|
133,034
|
Investment securities, trading securities, federal funds sold and
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
purchased under
agreements to resell
|
|
|
18,509
|
|
|
16,738
|
|
|
14,469
|
|
|
12,857
|
|
|
14,766
|
Total interest
income
|
|
|
278,476
|
|
|
286,370
|
|
|
295,294
|
|
|
180,564
|
|
|
147,800
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
11,257
|
|
|
13,227
|
|
|
15,154
|
|
|
12,624
|
|
|
14,437
|
Federal
funds purchased, securities sold under agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to repurchase, and
other borrowings
|
|
|
5,221
|
|
|
7,596
|
|
|
9,792
|
|
|
5,383
|
|
|
5,350
|
Total interest
expense
|
|
|
16,478
|
|
|
20,823
|
|
|
24,946
|
|
|
18,007
|
|
|
19,787
|
Net interest
income
|
|
|
261,998
|
|
|
265,547
|
|
|
270,348
|
|
|
162,557
|
|
|
128,013
|
Provision (benefit) for credit losses
|
|
|
(58,420)
|
|
|
18,185
|
|
|
29,797
|
|
|
151,474
|
|
|
36,533
|
Net interest
income after provision for credit losses
|
|
|
320,418
|
|
|
247,362
|
|
|
240,551
|
|
|
11,083
|
|
|
91,480
|
Noninterest
income
|
|
|
96,285
|
|
|
97,871
|
|
|
114,790
|
|
|
54,347
|
|
|
44,132
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
operating expense
|
|
|
218,702
|
|
|
219,719
|
|
|
215,225
|
|
|
134,634
|
|
|
103,118
|
Merger and/or branch
consolid. expense
|
|
|
10,009
|
|
|
19,836
|
|
|
21,662
|
|
|
40,279
|
|
|
4,129
|
SWAP termination
expense
|
|
|
—
|
|
|
38,787
|
|
|
—
|
|
|
—
|
|
|
—
|
Federal Home Loan Bank
advances prepayment fee
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
199
|
|
|
—
|
Total noninterest
expense
|
|
|
228,711
|
|
|
278,398
|
|
|
236,887
|
|
|
175,112
|
|
|
107,247
|
Income before
provision for income taxes
|
|
|
187,992
|
|
|
66,835
|
|
|
118,454
|
|
|
(109,682)
|
|
|
28,365
|
Income taxes (benefit)
provision
|
|
|
41,043
|
|
|
(19,401)
|
|
|
23,233
|
|
|
(24,747)
|
|
|
4,255
|
Net income
(loss)
|
|
$
|
146,949
|
|
$
|
86,236
|
|
$
|
95,221
|
|
$
|
(84,935)
|
|
$
|
24,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (non-GAAP) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
|
$
|
146,949
|
|
$
|
86,236
|
|
$
|
95,221
|
|
$
|
(84,935)
|
|
$
|
24,110
|
Securities gains, net
of tax
|
|
|
—
|
|
|
(29)
|
|
|
(12)
|
|
|
—
|
|
|
—
|
Income taxes benefit -
carryback tax loss
|
|
|
—
|
|
|
(31,468)
|
|
|
—
|
|
|
—
|
|
|
—
|
FHLB prepayment
penalty, net of tax
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
154
|
|
|
—
|
SWAP termination
expense, net of tax
|
|
|
—
|
|
|
31,784
|
|
|
—
|
|
|
—
|
|
|
—
|
Initial provision for
credit losses - NonPCD loans and UFC
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,212
|
|
|
—
|
Merger and/or branch
consolid. expense, net of tax
|
|
|
7,824
|
|
|
16,255
|
|
|
17,413
|
|
|
31,191
|
|
|
3,510
|
Adjusted net
income (non-GAAP)
|
|
$
|
154,773
|
|
$
|
102,824
|
|
$
|
112,622
|
|
$
|
38,622
|
|
$
|
27,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per common share
|
|
$
|
2.07
|
|
$
|
1.22
|
|
$
|
1.34
|
|
$
|
(1.96)
|
|
$
|
0.72
|
Diluted
earnings per common share
|
|
$
|
2.06
|
|
$
|
1.21
|
|
$
|
1.34
|
|
$
|
(1.96)
|
|
$
|
0.71
|
Adjusted
net income per common share - Basic (non-GAAP) (2)
|
|
$
|
2.18
|
|
$
|
1.45
|
|
$
|
1.59
|
|
$
|
0.89
|
|
$
|
0.82
|
Adjusted
net income per common share - Diluted (non-GAAP) (2)
|
|
$
|
2.17
|
|
$
|
1.44
|
|
$
|
1.58
|
|
$
|
0.89
|
|
$
|
0.82
|
Dividends per common share
|
|
$
|
0.47
|
|
$
|
0.47
|
|
$
|
0.47
|
|
$
|
0.47
|
|
$
|
0.47
|
Basic
weighted-average common shares outstanding
|
|
|
71,009,209
|
|
|
70,941,200
|
|
|
70,905,027
|
|
|
43,317,736
|
|
|
33,566,051
|
Diluted
weighted-average common shares outstanding
|
|
|
71,484,490
|
|
|
71,294,864
|
|
|
71,075,866
|
|
|
43,317,736
|
|
|
33,804,908
|
Adjusted
diluted weighted-average common shares outstanding*
|
|
|
71,484,490
|
|
|
71,294,864
|
|
|
71,075,866
|
|
|
43,606,333
|
|
|
33,804,908
|
Effective tax rate
|
|
|
21.83%
|
|
|
(29.03)%
|
|
|
19.61%
|
|
|
22.56%
|
|
|
15.00%
|
Adjusted
effective tax rate
|
|
|
21.83%
|
|
|
18.05%
|
|
|
19.61%
|
|
|
22.56%
|
|
|
15.00%
|
|
*Adjusted diluted
weighted average common shares was calculated with the result of
adjusted net income (non-GAAP).
|
Performance and
Capital Ratios
|
|
|
|
Three Months
Ended
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (annualized)
|
|
|
1.56%
|
|
|
0.90%
|
|
|
1.00%
|
|
|
(1.49)%
|
|
|
0.60%
|
Adjusted return on
average assets (annualized) (non-GAAP) (2)
|
|
|
1.64%
|
|
|
1.08%
|
|
|
1.18%
|
|
|
0.68%
|
|
|
0.69%
|
Return on average
equity (annualized)
|
|
|
12.71%
|
|
|
7.45%
|
|
|
8.31%
|
|
|
(11.78)%
|
|
|
4.15%
|
Adjusted return on
average equity (annualized) (non-GAAP) (2)
|
|
|
13.39%
|
|
|
8.88%
|
|
|
9.83%
|
|
|
5.36%
|
|
|
4.75%
|
Return on average
tangible common equity (annualized) (non-GAAP) (3)
|
|
|
21.16%
|
|
|
13.05%
|
|
|
14.66%
|
|
|
(19.71)%
|
|
|
8.35%
|
Adjusted return on
average tangible common equity (annualized) (non-GAAP) (2)
(3)
|
|
|
22.24%
|
|
|
15.35%
|
|
|
17.14%
|
|
|
10.23%
|
|
|
9.45%
|
Efficiency ratio (tax
equivalent)
|
|
|
61.06%
|
|
|
73.59%
|
|
|
58.91%
|
|
|
78.37%
|
|
|
60.37%
|
Adjusted efficiency
ratio (non-GAAP) (4)
|
|
|
58.27%
|
|
|
57.52%
|
|
|
53.30%
|
|
|
59.76%
|
|
|
57.98%
|
Dividend payout ratio
(5)
|
|
|
22.72%
|
|
|
38.67%
|
|
|
35.01%
|
|
|
N/A
|
|
|
65.70%
|
Book value per common
share
|
|
$
|
66.42
|
|
$
|
65.49
|
|
$
|
64.34
|
|
$
|
63.35
|
|
$
|
69.40
|
Tangible book value
per common share (non-GAAP) (3)
|
|
$
|
42.02
|
|
$
|
41.16
|
|
$
|
39.83
|
|
$
|
38.33
|
|
$
|
38.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets
|
|
|
11.9%
|
|
|
12.3%
|
|
|
12.1%
|
|
|
11.9%
|
|
|
14.0%
|
Tangible
equity-to-tangible assets (non-GAAP) (3)
|
|
|
7.9%
|
|
|
8.1%
|
|
|
7.8%
|
|
|
7.6%
|
|
|
8.2%
|
Tier 1 leverage (6)
*
|
|
|
8.5%
|
|
|
8.3%
|
|
|
8.1%
|
|
|
13.3%
|
|
|
9.5%
|
Tier 1 common equity
(6) *
|
|
|
12.1%
|
|
|
11.8%
|
|
|
11.5%
|
|
|
10.7%
|
|
|
11.0%
|
Tier 1 risk-based
capital (6) *
|
|
|
12.1%
|
|
|
11.8%
|
|
|
11.5%
|
|
|
10.7%
|
|
|
12.0%
|
Total risk-based
capital (6) *
|
|
|
14.5%
|
|
|
14.2%
|
|
|
13.9%
|
|
|
12.9%
|
|
|
12.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
branches
|
|
|
281
|
|
|
285
|
|
|
305
|
|
|
305
|
|
|
155
|
Number of employees
(full-time equivalent basis)
|
|
|
5,210
|
|
|
5,184
|
|
|
5,266
|
|
|
5,369
|
|
|
2,583
|
|
*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
|
|
|
|
Ending
Balance
|
(Dollars in
thousands, except per share and share data)
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
BALANCE
SHEET
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
due from banks
|
|
$
|
392,556
|
|
$
|
363,306
|
|
$
|
344,389
|
|
$
|
380,661
|
|
$
|
259,579
|
Federal
Funds Sold and interest-earning deposits with banks
|
|
|
5,581,581
|
|
|
4,245,949
|
|
|
4,127,250
|
|
|
3,983,047
|
|
|
1,003,257
|
Cash and cash
equivalents
|
|
|
5,974,137
|
|
|
4,609,255
|
|
|
4,471,639
|
|
|
4,363,708
|
|
|
1,262,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading securities,
at fair value
|
|
|
83,947
|
|
|
10,674
|
|
|
-
|
|
|
494
|
|
|
-
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities held-to-maturity
|
|
|
1,214,313
|
|
|
955,542
|
|
|
-
|
|
|
-
|
|
|
-
|
Securities available for sale, at fair value
|
|
|
3,891,490
|
|
|
3,330,672
|
|
|
3,561,929
|
|
|
3,137,718
|
|
|
1,971,195
|
Other
investments
|
|
|
161,468
|
|
|
160,443
|
|
|
185,199
|
|
|
133,430
|
|
|
62,994
|
Total investment securities
|
|
|
5,267,271
|
|
|
4,446,657
|
|
|
3,747,128
|
|
|
3,271,148
|
|
|
2,034,189
|
Loans held for
sale
|
|
|
352,997
|
|
|
290,467
|
|
|
456,141
|
|
|
603,275
|
|
|
71,719
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased credit
deteriorated
|
|
|
2,680,466
|
|
|
2,915,809
|
|
|
3,143,822
|
|
|
3,323,754
|
|
|
311,271
|
Purchased non-credit
deteriorated
|
|
|
8,433,913
|
|
|
9,458,869
|
|
|
10,557,907
|
|
|
11,577,833
|
|
|
1,632,700
|
Non-acquired
|
|
|
13,377,086
|
|
|
12,289,456
|
|
|
11,536,086
|
|
|
10,597,560
|
|
|
9,562,919
|
Less allowance for credit losses
|
|
|
(406,460)
|
|
|
(457,309)
|
|
|
(440,159)
|
|
|
(434,608)
|
|
|
(144,785)
|
Loans, net
|
|
|
24,085,005
|
|
|
24,206,825
|
|
|
24,797,656
|
|
|
25,064,539
|
|
|
11,362,105
|
Other real estate
owned ("OREO")
|
|
|
11,471
|
|
|
11,914
|
|
|
13,480
|
|
|
18,016
|
|
|
7,432
|
Premises and
equipment, net
|
|
|
569,171
|
|
|
579,239
|
|
|
626,259
|
|
|
627,943
|
|
|
312,151
|
Bank owned life
insurance
|
|
|
562,624
|
|
|
559,368
|
|
|
556,475
|
|
|
556,807
|
|
|
233,849
|
Mortgage servicing
rights
|
|
|
54,285
|
|
|
43,820
|
|
|
34,578
|
|
|
25,441
|
|
|
26,365
|
Core deposit and
other intangibles
|
|
|
153,861
|
|
|
162,592
|
|
|
171,637
|
|
|
170,911
|
|
|
46,809
|
Goodwill
|
|
|
1,579,758
|
|
|
1,563,942
|
|
|
1,566,524
|
|
|
1,603,383
|
|
|
1,002,900
|
Other
assets
|
|
|
1,035,805
|
|
|
1,305,120
|
|
|
1,377,849
|
|
|
1,419,691
|
|
|
282,556
|
Total assets
|
|
$
|
39,730,332
|
|
$
|
37,789,873
|
|
$
|
37,819,366
|
|
$
|
37,725,356
|
|
$
|
16,642,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
|
10,801,812
|
|
$
|
9,711,338
|
|
$
|
9,681,095
|
|
$
|
9,915,700
|
|
$
|
3,367,422
|
Interest-bearing
|
|
|
21,639,598
|
|
|
20,982,544
|
|
|
20,288,859
|
|
|
20,041,585
|
|
|
8,977,125
|
Total deposits
|
|
|
32,441,410
|
|
|
30,693,882
|
|
|
29,969,954
|
|
|
29,957,285
|
|
|
12,344,547
|
Federal funds
purchased and securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
sold
under agreements to repurchase
|
|
|
878,581
|
|
|
779,666
|
|
|
706,723
|
|
|
720,479
|
|
|
325,723
|
Other
borrowings
|
|
|
390,323
|
|
|
390,179
|
|
|
1,089,637
|
|
|
1,089,279
|
|
|
1,316,100
|
Reserve for unfunded
commitments
|
|
|
35,829
|
|
|
43,380
|
|
|
43,161
|
|
|
21,051
|
|
|
8,555
|
Other
liabilities
|
|
|
1,264,369
|
|
|
1,234,886
|
|
|
1,446,478
|
|
|
1,445,412
|
|
|
326,943
|
Total liabilities
|
|
|
35,010,512
|
|
|
33,141,993
|
|
|
33,255,953
|
|
|
33,233,506
|
|
|
14,321,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock - $2.50 par value; authorized 80,000,000 shares
|
|
|
177,651
|
|
|
177,434
|
|
|
177,321
|
|
|
177,268
|
|
|
83,611
|
Surplus
|
|
|
3,772,248
|
|
|
3,765,406
|
|
|
3,764,482
|
|
|
3,759,166
|
|
|
1,584,322
|
Retained
earnings
|
|
|
770,952
|
|
|
657,451
|
|
|
604,564
|
|
|
542,677
|
|
|
643,345
|
Accumulated other comprehensive income (loss)
|
|
|
(1,031)
|
|
|
47,589
|
|
|
17,046
|
|
|
12,739
|
|
|
9,765
|
Total shareholders' equity
|
|
|
4,719,820
|
|
|
4,647,880
|
|
|
4,563,413
|
|
|
4,491,850
|
|
|
2,321,043
|
Total liabilities and shareholders' equity
|
|
$
|
39,730,332
|
|
$
|
37,789,873
|
|
$
|
37,819,366
|
|
$
|
37,725,356
|
|
$
|
16,642,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued
and outstanding
|
|
|
71,060,446
|
|
|
70,973,477
|
|
|
70,928,304
|
|
|
70,907,119
|
|
|
33,444,236
|
Net Interest
Income and Margin
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
March 31,
2020
|
(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
|
|
$4,757,717
|
|
$989
|
|
0.08%
|
|
$4,509,137
|
|
$1,098
|
|
0.10%
|
|
$538,310
|
|
$1,452
|
|
1.08%
|
Investment
securities
|
|
4,683,152
|
|
17,520
|
|
1.52%
|
|
4,070,218
|
|
15,641
|
|
1.53%
|
|
2,022,726
|
|
13,314
|
|
2.65%
|
Loans held for
sale
|
|
298,970
|
|
1,991
|
|
2.70%
|
|
382,115
|
|
2,328
|
|
2.42%
|
|
41,812
|
|
331
|
|
3.18%
|
Total loans,
excluding PPP
|
|
22,612,722
|
|
232,770
|
|
4.17%
|
|
22,701,841
|
|
245,273
|
|
4.30%
|
|
11,439,676
|
|
132,703
|
|
4.67%
|
Total PPP
loans
|
|
1,879,367
|
|
25,206
|
|
5.44%
|
|
2,189,696
|
|
22,031
|
|
4.00%
|
|
-
|
|
-
|
|
0.00%
|
Total loans
|
|
24,492,089
|
|
257,976
|
|
4.27%
|
|
24,891,536
|
|
267,304
|
|
4.27%
|
|
11,439,676
|
|
132,703
|
|
4.67%
|
Total interest-earning
assets
|
|
34,231,928
|
|
278,476
|
|
3.30%
|
|
33,853,006
|
|
286,371
|
|
3.37%
|
|
14,042,524
|
|
147,800
|
|
4.23%
|
Noninterest-earning
assets
|
|
4,013,482
|
|
|
|
|
|
4,174,105
|
|
|
|
|
|
2,010,409
|
|
|
|
|
Total
Assets
|
|
$38,245,410
|
|
|
|
|
|
$38,027,111
|
|
|
|
|
|
$16,052,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and money
market accounts
|
|
$14,678,248
|
|
$5,387
|
|
0.15%
|
|
14,038,057
|
|
$6,675
|
|
0.19%
|
|
5,976,771
|
|
$7,682
|
|
0.52%
|
Savings
deposits
|
|
2,780,361
|
|
434
|
|
0.06%
|
|
2,667,211
|
|
505
|
|
0.08%
|
|
1,323,770
|
|
650
|
|
0.20%
|
Certificates and
other time deposits
|
|
3,672,818
|
|
5,436
|
|
0.60%
|
|
3,805,708
|
|
6,047
|
|
0.63%
|
|
1,642,749
|
|
6,105
|
|
1.49%
|
Federal funds
purchased and repurchase agreements
|
|
852,277
|
|
351
|
|
0.17%
|
|
754,457
|
|
435
|
|
0.23%
|
|
328,372
|
|
615
|
|
0.75%
|
Other
borrowings
|
|
390,043
|
|
4,870
|
|
5.06%
|
|
876,781
|
|
7,161
|
|
3.25%
|
|
887,431
|
|
4,735
|
|
2.15%
|
Total interest-bearing
liabilities
|
|
22,373,747
|
|
16,478
|
|
0.30%
|
|
22,142,214
|
|
20,823
|
|
0.37%
|
|
10,159,093
|
|
19,787
|
|
0.78%
|
Noninterest-bearing
liabilities ("Non-IBL")
|
|
11,184,514
|
|
|
|
|
|
11,277,541
|
|
|
|
|
|
3,557,492
|
|
|
|
|
Shareholders'
equity
|
|
4,687,149
|
|
|
|
|
|
4,607,356
|
|
|
|
|
|
2,336,348
|
|
|
|
|
Total Non-IBL and
shareholders' equity
|
|
15,871,663
|
|
|
|
|
|
15,884,897
|
|
|
|
|
|
5,893,840
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
|
$38,245,410
|
|
|
|
|
|
$38,027,111
|
|
|
|
|
|
$16,052,933
|
|
|
|
|
Net Interest
Income and Margin (Non-Tax Equivalent)
|
|
|
$261,998
|
|
3.10%
|
|
|
|
$265,548
|
|
3.12%
|
|
|
|
$128,013
|
|
3.67%
|
Net Interest
Margin (Tax Equivalent)
|
|
|
|
|
|
3.12%
|
|
|
|
|
|
3.14%
|
|
|
|
|
|
3.68%
|
Total Deposit Cost
(without Debt and Other Borrowings)
|
|
|
|
0.15%
|
|
|
|
|
|
0.17%
|
|
|
|
|
|
0.46%
|
Overall Cost of
Funds (including Demand Deposits)
|
|
|
|
|
0.21%
|
|
|
|
|
|
0.26%
|
|
|
|
|
|
0.59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Accretion on
Acquired Loans (1)
|
|
|
|
$10,416
|
|
|
|
|
|
$12,686
|
|
|
|
|
|
$10,931
|
|
|
TEFRA (included in
NIM, Tax Equivalent)
|
|
|
|
$1,286
|
|
|
|
|
|
$1,663
|
|
|
|
|
|
$530
|
|
|
The remaining loan discount on acquired loans to be accreted
into loan interest income totals $87.3
million and the remaining net deferred fees on PPP loans
totals $33.3 million as of
March 31, 2021.
Noninterest Income
and Expense
|
|
|
|
Three Months
Ended
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
(Dollars in
thousands)
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Noninterest
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees on
deposit accounts
|
|
$
|
25,282
|
|
$
|
25,153
|
|
$
|
24,346
|
|
$
|
16,679
|
|
$
|
18,141
|
Mortgage
banking income
|
|
|
26,880
|
|
|
25,162
|
|
|
48,022
|
|
|
18,371
|
|
|
14,647
|
Trust
and investment services income
|
|
|
8,578
|
|
|
7,506
|
|
|
7,404
|
|
|
7,138
|
|
|
7,389
|
Securities gains, net
|
|
|
-
|
|
|
35
|
|
|
15
|
|
|
-
|
|
|
-
|
Correspondent banking and capital market income
|
|
|
28,748
|
|
|
27,751
|
|
|
26,432
|
|
|
10,067
|
|
|
493
|
Bank
owned life insurance income
|
|
|
3,300
|
|
|
3,341
|
|
|
4,127
|
|
|
1,381
|
|
|
2,530
|
Other
|
|
|
3,498
|
|
|
8,923
|
|
|
4,444
|
|
|
711
|
|
|
932
|
Total Noninterest Income
|
|
$
|
96,286
|
|
$
|
97,871
|
|
$
|
114,790
|
|
$
|
54,347
|
|
$
|
44,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
$
|
140,361
|
|
$
|
138,982
|
|
$
|
134,919
|
|
$
|
81,720
|
|
$
|
60,978
|
Swap
termination expense
|
|
|
-
|
|
|
38,787
|
|
|
-
|
|
|
-
|
|
|
-
|
Occupancy expense
|
|
|
23,331
|
|
|
23,496
|
|
|
23,845
|
|
|
15,959
|
|
|
12,287
|
Information services expense
|
|
|
18,789
|
|
|
19,527
|
|
|
18,855
|
|
|
12,155
|
|
|
9,306
|
FHLB prepayment
penalty
|
|
|
-
|
|
|
56
|
|
|
-
|
|
|
199
|
|
|
-
|
OREO
expense and loan related
|
|
|
1,002
|
|
|
728
|
|
|
1,146
|
|
|
1,107
|
|
|
587
|
Business
development and staff related
|
|
|
3,371
|
|
|
3,835
|
|
|
2,599
|
|
|
1,447
|
|
|
2,244
|
Amortization of intangibles
|
|
|
9,164
|
|
|
9,760
|
|
|
9,560
|
|
|
4,665
|
|
|
3,007
|
Professional fees
|
|
|
3,274
|
|
|
4,306
|
|
|
4,385
|
|
|
2,848
|
|
|
2,494
|
Supplies
and printing expense
|
|
|
2,670
|
|
|
2,809
|
|
|
2,755
|
|
|
1,610
|
|
|
1,505
|
FDIC
assessment and other regulatory charges
|
|
|
3,771
|
|
|
3,403
|
|
|
2,849
|
|
|
2,403
|
|
|
2,058
|
Advertising and marketing
|
|
|
1,740
|
|
|
1,544
|
|
|
1,203
|
|
|
531
|
|
|
814
|
Other
operating expenses
|
|
|
11,229
|
|
|
11,329
|
|
|
13,109
|
|
|
10,189
|
|
|
7,838
|
Branch
consolidation and merger expense
|
|
|
10,009
|
|
|
19,836
|
|
|
21,662
|
|
|
40,279
|
|
|
4,129
|
Total Noninterest Expense
|
|
$
|
228,711
|
|
$
|
278,398
|
|
$
|
236,887
|
|
$
|
175,112
|
|
$
|
107,247
|
Loans and
Deposits
|
|
The following table
presents a summary of the loan portfolio by type (dollars in
thousands):
|
|
|
|
Ending
Balance
|
(Dollars in
thousands)
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
LOAN
PORTFOLIO
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Construction and land
development
|
|
$
|
1,888,901
|
|
$
|
1,899,066
|
|
$
|
1,840,111
|
|
$
|
1,999,062
|
|
$
|
1,105,308
|
Investor commercial
real estate
|
|
|
6,489,580
|
|
|
6,518,771
|
|
|
6,565,869
|
|
|
6,671,554
|
|
|
2,699,067
|
Commercial owner
occupied real estate
|
|
|
4,826,651
|
|
|
4,842,092
|
|
|
4,846,020
|
|
|
4,762,520
|
|
|
2,177,738
|
Commercial and
industrial, excluding PPP
|
|
|
3,141,643
|
|
|
3,113,685
|
|
|
3,067,399
|
|
|
3,005,030
|
|
|
1,418,421
|
Consumer real
estate
|
|
|
5,313,597
|
|
|
5,444,731
|
|
|
5,658,984
|
|
|
5,799,653
|
|
|
3,423,887
|
Consumer/other
|
|
|
885,320
|
|
|
912,327
|
|
|
907,711
|
|
|
924,995
|
|
|
682,469
|
Subtotal
|
|
|
22,545,692
|
|
|
22,730,672
|
|
|
22,886,094
|
|
|
23,162,814
|
|
|
11,506,890
|
PPP loans
|
|
|
1,945,773
|
|
|
1,933,462
|
|
|
2,351,721
|
|
|
2,336,333
|
|
|
-
|
Total
Loans
|
|
$
|
24,491,465
|
|
$
|
24,664,134
|
|
$
|
25,237,815
|
|
$
|
25,499,147
|
|
$
|
11,506,890
|
The following table
presents a summary of the deposit types (dollars in
thousands):
|
|
|
|
Ending
Balance
|
(Dollars in
thousands)
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
DEPOSITS
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Noninterest-bearing
checking
|
|
$
|
10,801,812
|
|
$
|
9,711,338
|
|
$
|
9,681,095
|
|
$
|
9,915,700
|
|
$
|
3,367,422
|
Interest-bearing
checking
|
|
|
7,369,066
|
|
|
6,955,575
|
|
|
6,414,905
|
|
|
6,192,915
|
|
|
2,963,679
|
Savings
|
|
|
2,906,673
|
|
|
2,694,010
|
|
|
2,618,877
|
|
|
2,503,514
|
|
|
1,337,730
|
Money
market
|
|
|
7,884,132
|
|
|
7,584,353
|
|
|
7,404,299
|
|
|
7,196,456
|
|
|
3,029,769
|
Time
deposits
|
|
|
3,479,727
|
|
|
3,748,605
|
|
|
3,850,778
|
|
|
4,148,700
|
|
|
1,645,947
|
Total
Deposits
|
|
$
|
32,441,410
|
|
$
|
30,693,881
|
|
$
|
29,969,954
|
|
$
|
29,957,285
|
|
$
|
12,344,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Deposits
(excludes Time Deposits)
|
|
$
|
28,961,683
|
|
$
|
26,945,276
|
|
$
|
26,119,176
|
|
$
|
25,808,585
|
|
$
|
10,698,600
|
Asset
Quality
|
|
|
|
Ending
Balance
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
(Dollars in
thousands)
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
NONPERFORMING
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-acquired
nonperforming loans
|
|
$
|
21,034
|
|
$
|
29,171
|
|
$
|
22,463
|
|
$
|
22,883
|
|
$
|
23,912
|
Non-acquired OREO and
other nonperforming assets
|
|
|
654
|
|
|
688
|
|
|
825
|
|
|
1,689
|
|
|
941
|
Total non-acquired
nonperforming assets
|
|
|
21,688
|
|
|
29,859
|
|
|
23,288
|
|
|
24,572
|
|
|
24,853
|
Acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired nonperforming
loans
|
|
|
80,024
|
|
|
77,668
|
|
|
89,974
|
|
|
100,399
|
|
|
32,791
|
Acquired OREO and
other nonperforming assets
|
|
|
11,292
|
|
|
11,568
|
|
|
12,904
|
|
|
16,987
|
|
|
6,802
|
Total acquired
nonperforming assets
|
|
|
91,316
|
|
|
89,236
|
|
|
102,878
|
|
|
117,386
|
|
|
39,593
|
Total nonperforming
assets
|
|
$
|
113,004
|
|
$
|
119,095
|
|
$
|
126,166
|
|
$
|
141,958
|
|
$
|
64,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
ASSET QUALITY
RATIOS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses as a percentage of loans
|
|
|
1.66%
|
|
|
1.85%
|
|
|
1.74%
|
|
|
1.70%
|
|
|
1.26%
|
Allowance for credit
losses as a percentage of loans, excluding PPP loans
|
|
|
1.80%
|
|
|
2.01%
|
|
|
1.92%
|
|
|
1.88%
|
|
|
N/A
|
Allowance for credit
losses as a percentage of nonperforming loans *
|
|
|
402.20%
|
|
|
428.04%
|
|
|
391.47%
|
|
|
352.53%
|
|
|
255.34%
|
Net (recoveries)
charge-offs as a percentage of average loans
(annualized)
|
|
|
(0.00)%
|
|
|
0.01%
|
|
|
0.01%
|
|
|
0.00%
|
|
|
0.05%
|
Total nonperforming
assets as a percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of total
assets *
|
|
|
0.28%
|
|
|
0.32%
|
|
|
0.33%
|
|
|
0.38%
|
|
|
0.39%
|
Nonperforming loans
as a percentage of period end loans *
|
|
|
0.41%
|
|
|
0.43%
|
|
|
0.45%
|
|
|
0.48%
|
|
|
0.49%
|
|
* With the merger
with CSFL on June 7, 2020, the amount of acquired nonaccrual loans
increased by approximately $69.9 million during the second quarter
of 2020.
|
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 first quarter of
2021:
|
|
|
|
Allowance for
Credit Losses ("ACL & UFC")
|
|
|
NonPCD
ACL
|
|
PCD
ACL
|
|
Total
|
|
UFC
|
Ending Balance
12/31/2020
|
|
$
|
315,470
|
|
$
|
141,839
|
|
$
|
457,309
|
|
$
|
43,380
|
Charge
offs
|
|
|
(1,947)
|
|
|
-
|
|
|
(1,947)
|
|
|
-
|
Acquired charge
offs
|
|
|
(570)
|
|
|
(857)
|
|
|
(1,427)
|
|
|
-
|
Recoveries
|
|
|
1,024
|
|
|
-
|
|
|
1,024
|
|
|
-
|
Acquired
recoveries
|
|
|
956
|
|
|
1,415
|
|
|
2,371
|
|
|
-
|
Provision for credit
losses
|
|
|
(30,676)
|
|
|
(20,194)
|
|
|
(50,870)
|
|
|
(7,551)
|
Ending balance
3/31/2021
|
|
$
|
284,257
|
|
$
|
122,203
|
|
$
|
406,460
|
|
$
|
35,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period end loans
(includes PPP Loans)
|
|
$
|
21,810,999
|
|
$
|
2,680,466
|
|
$
|
24,491,465
|
|
|
N/A
|
Reserve to Loans
(includes PPP Loans)
|
|
|
1.30%
|
|
|
4.56%
|
|
|
1.66%
|
|
|
N/A
|
Period end loans
(excludes PPP Loans)
|
|
$
|
19,865,226
|
|
$
|
2,680,466
|
|
$
|
22,545,692
|
|
|
N/A
|
Reserve to Loans
(excludes PPP Loans)
|
|
|
1.43%
|
|
|
4.56%
|
|
|
1.80%
|
|
|
N/A
|
Unfunded commitments
(off balance sheet) *
|
|
|
|
|
|
|
|
|
|
|
$
|
4,859,717
|
Reserve to unfunded
commitments (off balance sheet)
|
|
|
|
|
|
|
|
|
|
|
|
0.74%
|
|
* Unfunded
commitments excludes unconditionally cancelable commitments and
letters of credit.
|
Conference Call
The Company will announce its first quarter 2021 earnings
results in a news release after the market closes on April 28, 2021. At 10:00 a.m. Eastern Time on April 29, 2021, the Company will host a
conference call to discuss its first quarter results. Callers
wishing to participate may call toll-free by dialing
877-506-9272. The number for international participants is
(412) 380-2004. The conference ID number
is 10153950. Alternatively, individuals may listen to
the live webcast of the presentation by visiting
SouthStateBank.com. An audio replay of the live webcast is
expected to be available by the evening of April 29, 2021 on the Investor Relations section
of SouthStateBank.com.
SouthState Corporation is a financial services
company headquartered in Winter Haven,
Florida. SouthState Bank, N.A., the Company's nationally
chartered bank subsidiary, provides consumer, commercial, mortgage
and wealth management solutions to more than one million customers
throughout Florida, Alabama, Georgia, the Carolinas and Virginia. The Bank also serves clients coast
to coast through its correspondent banking division. Additional
information is available at SouthStateBank.com.
Non-GAAP Measures
Statements included in this press release include non-GAAP
measures and should be read along with the accompanying tables that
provide a reconciliation of non-GAAP measures to GAAP
measures. 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 in
thousands)
|
|
|
|
|
|
|
|
|
PRE-PROVISION NET
REVENUE ("PPNR") (NON-GAAP)
|
|
Mar. 31,
2021
|
|
Dec. 31,
2020
|
|
Sept. 30,
2020
|
|
June 30,
2020
|
Net income (loss)
(GAAP)
|
|
$
146,949
|
|
$
86,236
|
|
$
95,221
|
|
$
(84,935)
|
PCL legacy
SSB
|
|
(58,420)
|
|
18,185
|
|
29,797
|
|
31,259
|
PCL legacy CSB NonPCD
and UFC - Day 1
|
|
-
|
|
-
|
|
-
|
|
119,079
|
PCL legacy CSB for
June, 2020
|
|
-
|
|
-
|
|
-
|
|
1,136
|
Tax provision
(benefit)
|
|
41,043
|
|
(19,401)
|
|
23,233
|
|
(24,747)
|
Merger-related
costs
|
|
10,009
|
|
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
|
|
$
139,581
|
|
$
143,664
|
|
$
169,898
|
|
$
157,061
|
|
|
|
|
|
|
|
|
|
SSB average asset
balance (GAAP)
|
|
$
38,245,410
|
|
$
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
|
|
|
|
|
|
|
|
|
|
PPNR
ROAA
|
|
1.48%
|
|
1.50%
|
|
1.79%
|
|
1.68%
|
|
|
Three Months
Ended
|
(Dollars in
thousands, except per share data)
|
|
Mar.
31,
|
|
Dec.
31
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
RECONCILIATION OF
GAAP TO NON-GAAP
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Adjusted Net
Income (non-GAAP) (2)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
|
$146,949
|
|
$86,236
|
|
$95,221
|
|
$(84,935)
|
|
$24,110
|
Securities gains, net
of tax
|
|
—
|
|
(29)
|
|
(12)
|
|
—
|
|
—
|
PCL - NonPCD loans
& unfunded commitments
|
|
—
|
|
—
|
|
—
|
|
92,212
|
|
—
|
Swap termination
expense, net of tax
|
|
—
|
|
31,784
|
|
—
|
|
—
|
|
—
|
Provision (Benefit) for
income taxes - carryback tax loss
|
|
—
|
|
(31,468)
|
|
—
|
|
—
|
|
—
|
FHLB prepayment
penalty, net of tax
|
|
—
|
|
46
|
|
—
|
|
154
|
|
—
|
Merger and branch
consolidation/acq. expense, net of tax
|
|
7,824
|
|
16,255
|
|
17,413
|
|
31,191
|
|
3,510
|
Adjusted net income
(non-GAAP)
|
|
$154,773
|
|
$102,824
|
|
$112,622
|
|
$38,622
|
|
$27,620
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income per Common Share - Basic (2)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share - Basic (GAAP)
|
|
$2.07
|
|
$1.22
|
|
$1.34
|
|
$(1.96)
|
|
$0.72
|
Effect to adjust for
securities gains
|
|
—
|
|
(0.00)
|
|
(0.00)
|
|
—
|
|
—
|
Effect to adjust for
PCL - NonPCD loans & unfunded commitments
|
|
—
|
|
—
|
|
—
|
|
2.13
|
|
—
|
Effect to adjust for
swap termination expense, net of tax
|
|
—
|
|
0.45
|
|
—
|
|
—
|
|
—
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
|
—
|
|
(0.44)
|
|
—
|
|
—
|
|
—
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
|
—
|
|
0.00
|
|
—
|
|
0.00
|
|
—
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.11
|
|
0.23
|
|
0.25
|
|
0.72
|
|
0.10
|
Adjusted net income
per common share - Basic (non-GAAP)
|
|
$2.18
|
|
$1.45
|
|
$1.59
|
|
$0.89
|
|
$0.82
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income per Common Share - Diluted (2)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share - Diluted (GAAP)
|
|
$2.06
|
|
$1.21
|
|
$1.34
|
|
$(1.96)
|
|
$0.71
|
Effect to adjust for
securities gains
|
|
—
|
|
(0.00)
|
|
(0.00)
|
|
—
|
|
—
|
Effect to adjust for
PCL - NonPCD loans & unfunded commitments
|
|
—
|
|
—
|
|
—
|
|
2.11
|
|
—
|
Effect to adjust for
swap termination expense, net of tax
|
|
—
|
|
0.45
|
|
—
|
|
—
|
|
—
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
|
—
|
|
(0.44)
|
|
—
|
|
—
|
|
—
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
|
—
|
|
0.00
|
|
—
|
|
0.00
|
|
—
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.11
|
|
0.23
|
|
0.24
|
|
0.72
|
|
0.11
|
Effect of adjusted
weighted ave shares due to adjusted net income
|
|
—
|
|
—
|
|
—
|
|
0.02
|
|
—
|
Adjusted net income
per common share - Diluted (non-GAAP)
|
|
$2.17
|
|
$1.44
|
|
$1.58
|
|
$0.89
|
|
$0.82
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return of
Average Assets (2)
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (GAAP)
|
|
1.56%
|
|
0.90%
|
|
1.00%
|
|
(1.49)%
|
|
0.60%
|
Effect to adjust for
securities gains
|
|
—%
|
|
(0.00)%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
PCL - NonPCD loans & unfunded commitments
|
|
—%
|
|
—%
|
|
—%
|
|
1.62%
|
|
—%
|
Effect to adjust for
swap termination expense
|
|
—%
|
|
0.33%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
|
—%
|
|
(0.33)%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
|
—%
|
|
0.00%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.08%
|
|
0.18%
|
|
0.18%
|
|
0.55%
|
|
0.09%
|
Adjusted return on
average assets (non-GAAP)
|
|
1.64%
|
|
1.08%
|
|
1.18%
|
|
0.68%
|
|
0.69%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return of
Average Equity (2)
|
|
|
|
|
|
|
|
|
|
|
Return on average
equity (GAAP)
|
|
12.71%
|
|
7.45%
|
|
8.31%
|
|
(11.78)%
|
|
4.15%
|
Effect to adjust for
securities gains
|
|
—%
|
|
0.00%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
PCL - NonPCD loans & unfunded commitments
|
|
—%
|
|
—%
|
|
—%
|
|
12.79%
|
|
—%
|
Effect to adjust for
swap termination expense
|
|
—%
|
|
2.74%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
|
—%
|
|
(2.72)%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
|
—%
|
|
(0.00)%
|
|
—%
|
|
0.02%
|
|
—%
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.68%
|
|
1.41%
|
|
1.52%
|
|
4.33%
|
|
0.60%
|
Adjusted return on
average equity (non-GAAP)
|
|
13.39%
|
|
8.88%
|
|
9.83%
|
|
5.36%
|
|
4.75%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on
Average Common Tangible Equity (2) (3)
|
|
|
|
|
|
|
|
|
Return on average
common equity (GAAP)
|
|
12.71%
|
|
7.45%
|
|
8.31%
|
|
(11.78)%
|
|
4.15%
|
Effect to adjust for
securities gains
|
|
—%
|
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
PCL - NonPCD loans & unfunded commitments
|
|
—%
|
|
—%
|
|
—%
|
|
12.79%
|
|
—%
|
Effect to adjust for
swap termination expense
|
|
—%
|
|
2.74%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
benefit for income taxes - carryback tax loss
|
|
—%
|
|
(2.72)%
|
|
—%
|
|
—%
|
|
—%
|
Effect to adjust for
FHLB prepayment penalty, net of tax
|
|
—%
|
|
—%
|
|
—%
|
|
0.02%
|
|
—%
|
Effect to adjust for
merger & branch consol./acq expenses, net of tax
|
0.68%
|
|
1.40%
|
|
1.52%
|
|
4.32%
|
|
0.60%
|
Effect to adjust for
intangible assets
|
|
8.85%
|
|
6.48%
|
|
7.31%
|
|
4.88%
|
|
4.70%
|
Adjusted return on
average common tangible equity (non-GAAP)
|
|
22.24%
|
|
15.35%
|
|
17.14%
|
|
10.23%
|
|
9.45%
|
|
|
Three Months
Ended
|
(Dollars in
thousands, except per share data)
|
|
Mar.
31,
|
|
Dec.
31
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
RECONCILIATION OF
GAAP TO NON-GAAP
|
|
2021
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
Adjusted
Efficiency Ratio (4)
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
|
61.06%
|
|
73.59%
|
|
58.91%
|
|
78.37%
|
|
60.37%
|
Effect to adjust for
merger and branch consolidation related expenses
|
(2.79)%
|
|
(16.07)%
|
|
(5.61)%
|
|
(18.61)%
|
|
(2.39)%
|
Adjusted efficiency
ratio
|
|
58.26%
|
|
57.52%
|
|
53.30%
|
|
59.76%
|
|
57.98%
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book
Value Per Common Share (3)
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share (GAAP)
|
|
$
66.42
|
|
$
65.49
|
|
$
64.34
|
|
$
63.35
|
|
$
69.40
|
Effect to adjust for
intangible assets
|
|
(24.40)
|
|
(24.33)
|
|
(24.51)
|
|
(25.02)
|
|
(31.39)
|
Tangible book value
per common share (non-GAAP)
|
|
$
42.02
|
|
$
41.16
|
|
$
39.83
|
|
$
38.33
|
|
$
38.01
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
Equity-to-Tangible Assets (3)
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets
(GAAP)
|
|
11.88%
|
|
12.30%
|
|
12.07%
|
|
11.91%
|
|
13.95%
|
Effect to adjust for
intangible assets
|
|
(4.02)%
|
|
(4.20)%
|
|
(4.24)%
|
|
(4.35)%
|
|
(5.80)%
|
Tangible
equity-to-tangible assets (non-GAAP)
|
|
7.86%
|
|
8.10%
|
|
7.83%
|
|
7.56%
|
|
8.15%
|
Certain prior period information has been reclassified to
conform to the current period presentation, and these
reclassifications had no impact on net income or equity as
previously reported.
Footnotes to tables:
(1)
|
Includes loan
accretion (interest) income related to the discount on acquired
loans of $10.4 million, $12.7 million, $22.4 million, $10.1
million and $10.9 million, respectively, during the five quarters
above.
|
|
|
(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, FHLB Advances prepayment
penalty, initial provision for credit losses on non-PCD loans and
unfunded commitments, 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 $10.0 million, $19.8 million,
$21.7 million, $40.3 million and $4.1 million, for the quarters
ended March 31, 2021, December 31, 2020, September 30, 2020, June
30, 2020 and March 31, 2020, respectively; (b) net securities gains
of $35,000 and $15,000 for the quarters ended December 31, 2020 and
September 30, 2020, respectively; (c) FHLB prepayment penalty of
$56,000 and $199,000 for the quarters ended December 31, 2020 and
June 30, 2020, respectively; (d) swap termination expense of $38.8
million for the quarter ended December 31, 2020; (e) tax carryback
losses under the CARES Act of $31.5 million for the quarter ended
December 31, 2020; and (f) initial provision for credit losses on
non-PCD loans and unfunded commitments of $119.1 million for the
quarter ended June 30, 2020.
|
|
|
(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 Non-GAAP to GAAP" provide tables that
reconcile non-GAAP measures to GAAP.
|
|
|
(4)
|
Adjusted efficiency
ratio is calculated by taking the noninterest expense excluding
swap termination expense, branch consolidation cost and merger
cost, tax carryback losses under the CARES Act, amortization of
intangible assets, and the FHLB prepayment penalty divided by net
interest income and noninterest income excluding securities gains
(losses). The pre-tax amortization expense of intangible assets
were $9.2 million, $9.8 million, $9.6 million, $4.7 million and
$3.0 million, for the quarters ended March 31, 2021, December 31,
2020, September 30, 2020, June 30, 2020 and March 31, 2020,
respectively.
|
|
|
(5)
|
The dividend payout
ratio is calculated by dividing total dividends paid during the
period by the total net income for the same period.
|
|
|
(6)
|
March 31, 2021 ratios
are estimated and may be subject to change pending the final filing
of the FR Y-9C; all other periods are presented as
filed.
|
|
|
(7)
|
Loan data excludes
mortgage loans held for sale.
|
Cautionary Statement Regarding Forward Looking
Statements
Statements included in this communication, which are not
historical in nature are intended to be, and are hereby identified
as, forward-looking statements for purposes of the safe harbor
provided by Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements are based on, among other things, management's beliefs,
assumptions, current expectations, estimates and projections about
the financial services industry, the economy and SouthState. Words
and phrases such as "may," "approximately," "continue," "should,"
"expects," "projects," "anticipates," "is likely," "look ahead,"
"look forward," "believes," "will," "intends," "estimates,"
"strategy," "plan," "could," "potential," "possible" and variations
of such words and similar expressions are intended to identify such
forward-looking statements. South State 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 continued 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) risks relating to the
continued impact of the Covid19 pandemic on the company, including
possible impact to the company and its employees from contacting
Covid19, and to efficiencies and the control environment due to the
continued work from home environment and to our results of
operations due to government stimulus and other interventions to
blunt the impact of the pandemic; (5) 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, (6) 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; (7) potential deterioration in real estate
values; (8) 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, (9) risks
relating to the ability to retain our culture and attract and
retain qualified people; (10) 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; (11) risks related to the ability of the
company to pursue its strategic plans which depend upon certain
growth goals in our lines of business; (12) liquidity risk
affecting the Bank's ability to meet its obligations when they come
due; (13) 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; (14) price risk focusing on changes in market
factors that may affect the value of traded instruments in
"mark-to-market" portfolios; (15) transaction risk arising from
problems with service or product delivery; (16) compliance risk
involving risk to earnings or capital resulting from violations of
or nonconformance with laws, rules, regulations, prescribed
practices, or ethical standards; (17) 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 CARES Act, the Consumer
Financial Protection Bureau regulations, and the possibility of
changes in accounting standards, policies, principles and
practices, including changes in accounting principles relating to
loan loss recognition (CECL); (18) strategic risk resulting from
adverse business decisions or improper implementation of business
decisions; (19) reputation risk that adversely affects earnings or
capital arising from negative public opinion; (20) 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; (21) reputational and operational risks associated with
environment, social and governance matters; (22) greater than
expected noninterest expenses; (23) excessive loan losses; (24)
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; (25 the risks of fluctuations in market prices for
SouthState common stock that may or may not reflect economic
condition or performance of SouthState; (26) 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; (27) ownership dilution risk associated with potential
acquisitions in which South State's stock may be issued as
consideration for an acquired company; (28) 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; (29) 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; (30) terrorist activities risk that
results in loss of consumer confidence and economic disruptions;
and (31) other factors that may affect future results of
SouthState, as disclosed in SouthState's Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form
8-K, filed by SouthState with the U.S. Securities and Exchange
Commission ("SEC") and available on the SEC's website at
http://www.sec.gov, any of which could cause actual results to
differ materially from future results expressed, implied or
otherwise anticipated by such forward-looking statements.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
SouthState does not undertake any obligation to update or otherwise
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as required by
federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised
against placing undue reliance on such statements.
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SOURCE SouthState Corporation