PR Newswire | Apr 28, 2021 04:06PM EDT

Quarterly Cash Dividend

04/28 15:05 CDT

SouthState Corporation Reports First Quarter 2021 Results and Declares Quarterly Cash Dividend WINTER HAVEN, Fla., April 28, 2021

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 resultof 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) 22.24% 15.35% 17.14% 10.23% 9.45%(3)

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 thetransitional method relative to the CAREs Act in relief of COVID-19pandemic on the economy and financial institutions in the United States. Thereferenced relief allows a total five-year "phase in" of the CECLimpact on capital and relief over the next two years for the impact on theallowance 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 (dollarsin 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 inthousands):

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 nonaccrualloans increased by approximately $69.9 million during the second quarter of2020.

Current Expected Credit Losses ("CECL")

Effective January 1, 2020, the Company adopted ASU 2016-13 ("CECL"), whichaffects the allowance for credit losses and the liability for unfundedcommitments ("UFC"). Below is a table showing the roll forward of the ACL andUFC 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 andletters 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:

Includes loan accretion (interest) income related to the discount on(1) 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.

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(2) 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.

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(3) 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.

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(4) 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