PR Newswire | Jan 27, 2021 04:06PM EST

Quarterly Cash Dividend

01/27 15:05 CST

SouthState Corporation Reports Fourth Quarter 2020 Results and Declares Quarterly Cash Dividend WINTER HAVEN, Fla., Jan. 27, 2021

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) 15.35% 17.14% 10.23% 9.45% 16.17% 14.14% 15.82%(5)

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 77,668 89,974 100,399 32,791 11,114non-credit impaired loans only) *

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 2.01% 1.92% 1.88% N/A N/Aloans, excluding PPP loans

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 428.04% 391.47% 352.53% 255.34% N/Anonperforming loans *

Net charge-offs on non-acquired loans as a N/A N/A N/A N/A 0.06%percentage of average (annualized) (1)

Net charge-offs as a percentage of average loans 0.01% 0.01% 0.00% 0.05% N/A(annualized)

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 0.43% 0.45% 0.48% 0.49% 0.30%loans *

*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