PR Newswire | Oct 27, 2021 04:02PM EDT

Cash Dividend

10/27 15:01 CDT

SouthState Corporation Reports Third Quarter 2021 Results, Declares Quarterly Cash Dividend WINTER HAVEN, Fla., Oct. 27, 2021

WINTER HAVEN, Fla., Oct. 27, 2021 /PRNewswire/ -- SouthState Corporation (NASDAQ: SSB) today released its unaudited results of operations and other financial information for the three-month and nine-month periods ended September 30, 2021.

The Company reported consolidated net income of $1.74 per diluted common share for the three months ended September 30, 2021, compared to $1.39 per diluted common share for the three months ended June 30, 2021, and compared to $1.34 per diluted common share one year ago.

Adjusted net income (non-GAAP) totaled $1.94 per diluted share for the three months ended September 30, 2021, compared to $1.87 per diluted share for the three months ended June 30, 2021, and compared to $1.58 per diluted share one year ago. Adjusted net income in the third quarter of 2021 excludes $14.1 million of merger-related costs (after-tax).

"I'm pleased with our progress in the third quarter, particularly our 10% annualized loan growth (excluding PPP loans)," said John C. Corbett, Chief Executive Officer. "New loan production reached a record of $2.6 billion, up 72% from a year ago. Additionally, planned cost savings from the recent systems conversion and a $5.8 million increase in core net interest income contributed to an increase of our pre-provision net revenue to $132.3 million. With surplus cash on our balance sheet, the pending acquisition of Atlantic Capital Bank in Atlanta and strong population growth in the Southeast, we are well positioned as we head into 2022."

Highlights of the third quarter of 2021 include:

Returns

* Reported & adjusted diluted Earnings per Share ("EPS") of $1.74 and $1.94 (Non-GAAP), respectively * Recorded a negative provision for credit losses of $38.9 million compared to a negative provision for credit losses of $58.8 million in the prior quarter * Reported & adjusted Return on Average Tangible Common Equity of 16.9% (Non-GAAP) and 18.7% (Non-GAAP), respectively * Pre-Provision Net Revenue ("PPNR") of $132.3 million (Non-GAAP), or 1.29% PPNR ROAA (Non-GAAP) * Book value per share of $68.55 increased by $0.95 per share compared to the prior quarter * Tangible book value ("TBV") per share of $43.98 (Non-GAAP), up $4.15, or 10.4% from a year ago quarter

Performance

* Core net interest income (non-GAAP) (excluding loan accretion and deferred fees on PPP) increased $5.8 million from prior quarter * Total deposit cost of 0.09%, down 3 basis points from prior quarter * Noninterest income of $87.0 million, up $8.0 million compared to the prior quarter, primarily due to a $5.4 million increase in mortgage banking income and $2.2 million increase in deposit fee income

Balance Sheet / Credit

* Loans, excluding PPP loans, increased $573.3 million, or 10.0% annualized, centered in $336.9 million growth in commercial and industrial loans and $215.5 million growth in investor commercial real estate, commercial owner occupied real estate, and single family construction to permanent loans (which are included in the construction and land development loans category) * Total deposits increased $318.2 million, or 3.8% annualized, with core deposit growth totaling $662.7 million, or 8.8% annualized * 33.8% of deposits are noninterest-bearing * Net loan charge-offs of $46 thousand, or 0.00% annualized

Capital Returns

* Repurchased 485,491 shares during 3Q 2021 and approximately 120,000 shares in October 2021, at a weighted average price of $74.71, bringing total 2021 repurchases to approximately 1.31 million shares

Subsequent Events

* Received OCC approval for the Atlantic Capital Bancshares, Inc. ("ACBI") merger, awaiting FRB and ACBI shareholders' approvals * Declared a cash dividend on common stock of $0.49 per share, payable on November 19, 2021 to shareholders of record as of November 12, 2021

Financial Performance



Three Months Ended Nine Months Ended

(Dollars in thousands, except per share data) Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30,

INCOME STATEMENT 2021 2021 2021 2020 2020 2021 2020

Interest income

Loans, including fees (1) $246,065 $246,177 $259,967 $269,632 $280,825 $752,209 $581,566

Investment securities, trading securities, federal funds sold and securities

purchased under agreements to resell 25,384 21,364 18,509 16,738 14,469 65,257 42,092

Total interest income 271,449 267,541 278,476 286,370 295,294 817,466 623,658

Interest expense

Deposits 7,267 9,537 11,257 13,227 15,154 28,061 42,215

Federal funds purchased, securities sold under agreements

to repurchase, and other borrowings 4,196 4,874 5,221 7,596 9,792 14,291 20,525

Total interest expense 11,463 14,411 16,478 20,823 24,946 42,352 62,740

Net interest income 259,986 253,130 261,998 265,547 270,348 775,114 560,918

(Recovery) provision for credit losses (38,903) (58,793) (58,420) 18,185 29,797 (156,116) 217,804

Net interest income after (recovery) provision for credit losses 298,889 311,923 320,418 247,362 240,551 931,230 343,114

Noninterest income 87,010 79,020 96,285 97,871 114,790 262,315 213,269

Noninterest expense

Pre-tax operating expense 214,672 218,707 218,702 219,719 215,225 652,080 452,977

Merger and/or branch consolid. expense 17,618 32,970 10,009 19,836 21,662 60,598 66,070

Extinguishment of debt cost - 11,706 - - - 11,706 -

SWAP termination expense - - - 38,787 - - -

Federal Home Loan Bank advances prepayment fee - - - 56 - - 199

Total noninterest expense 232,290 263,383 228,711 278,398 236,887 724,384 519,246

Income before provision for income taxes 153,609 127,560 187,992 66,835 118,454 469,161 37,137

Income taxes (benefit) provision 30,821 28,600 41,043 (19,401) 23,233 100,464 2,741

Net income $122,788 $98,960 $146,949 $86,236 $95,221 $368,697 $34,396



Adjusted net income (non-GAAP) (2)

Net income (GAAP) $122,788 $98,960 $146,949 $86,236 $95,221 $368,697 $34,396

Securities gains, net of tax (51) (28) - (29) (12) (79) (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 14,083 25,578 7,824 16,255 17,413 47,485 52,114

Extinguishment of debt cost, net of tax - 9,081 - - - 9,081 -

Adjusted net income (non-GAAP) $136,820 $133,591 $154,773 $102,824 $112,622 $425,184 $178,864



Basic earnings per common share $1.75 $1.40 $2.07 $1.22 $1.34 $5.22 $0.70

Diluted earnings per common share $1.74 $1.39 $2.06 $1.21 $1.34 $5.19 $0.69

Adjusted net income per common share - Basic (non-GAAP) (2) $1.95 $1.89 $2.18 $1.45 $1.59 $6.02 $3.63

Adjusted net income per common share - Diluted (non-GAAP) (2) $1.94 $1.87 $2.17 $1.44 $1.58 $5.98 $3.60

Dividends per common share $0.49 $0.47 $0.47 $0.47 $0.47 $1.43 $1.41

Basic weighted-average common shares outstanding 70,066,235 70,866,193 71,009,209 70,941,200 70,905,027 70,643,289 49,330,267

Diluted weighted-average common shares outstanding 70,575,726 71,408,888 71,484,490 71,294,864 71,075,866 71,108,204 49,635,882

Effective tax rate 20.06% 22.42% 21.83% (29.03)% 19.61% 21.41% 7.38%

Adjusted effective tax rate 20.06% 22.42% 21.83% 18.05% 19.61% 21.41% 7.38%

Performance and Capital Ratios



Three Months Ended Nine Months Ended

Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30,

2021 2021 2021 2020 2020 2021 2020

PERFORMANCE RATIOS

Return on average assets (annualized) 1.20 % 1.00 % 1.56 % 0.90 % 1.00 %1.25 %0.18 %

Adjusted return on average assets (annualized) (non-GAAP) (2) 1.34 % 1.35 % 1.64 % 1.08 % 1.18 %1.44 %0.93 %

Return on average equity (annualized) 10.21% 8.38 % 12.71% 7.45 % 8.31 %10.41 %1.41 %

Adjusted return on average equity (annualized) (non-GAAP) (2) 11.37% 11.31% 13.39% 8.88 % 9.83 %12.01 %7.31 %

Return on average tangible common equity (annualized) (non-GAAP) (3) 16.86% 14.12% 21.16% 13.05% 14.66%17.34 %3.51 %

Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) 18.68% 18.74% 22.24% 15.35% 17.14%19.85 %13.58 %(3)

Efficiency ratio (tax equivalent) 64.22% 76.28% 61.06% 73.59% 58.91%66.99 %64.60 %

Adjusted efficiency ratio (non-GAAP) (4) 59.16% 62.88% 58.27% 57.52% 53.30%60.05 %56.07 %

Dividend payout ratio (5) 27.94% 33.65% 22.72% 38.67% 35.01%27.39 %188.71 %

Book value per common share $ 68.55 $ 67.60 $ 66.42 $ 65.49 $ 64.34

Tangible book value per common share (non-GAAP) (3) $ 43.98 $ 43.07 $ 42.02 $ 41.16 $ 39.83



CAPITAL RATIOS

Equity-to-assets 11.7 % 11.8 % 11.9 % 12.3 % 12.1 %

Tangible equity-to-tangible assets (non-GAAP) (3) 7.8 % 7.8 % 7.9 % 8.1 % 7.8 %

Tier 1 leverage (6) * 8.1 % 8.1 % 8.5 % 8.3 % 8.1 %

Tier 1 common equity (6) * 11.9 % 12.1 % 12.2 % 11.8 % 11.5 %

Tier 1 risk-based capital (6) * 11.9 % 12.1 % 12.2 % 11.8 % 11.5 %

Total risk-based capital (6) * 13.7 % 14.1 % 14.5 % 14.2 % 13.9 %



OTHER DATA

Number of branches 281 281 281 285 305

*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) Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,

BALANCE SHEET 2021 2021 2021 2020 2020

Assets

Cash and due from banks $597,321 $529,434 $392,556 $363,306 $344,389

Federal Funds Sold and interest-earning deposits with banks 5,701,002 5,875,078 5,581,581 4,245,949 4,127,250

Cash and cash equivalents 6,298,323 6,404,512 5,974,137 4,609,255 4,471,639



Trading securities, at fair value 61,294 89,925 83,947 10,674 -

Investment securities:

Securities held-to-maturity 1,641,485 1,189,265 1,214,313 955,542.00 -

Securities available for sale, at fair value 4,631,554 4,369,159 3,891,490 3,330,672 3,561,929

Other investments 160,592 160,607 161,468 160,443 185,199

Total investment securities 6,433,631 5,719,031 5,267,271 4,446,657 3,747,128

Loans held for sale 242,813 171,447 352,997 290,467 456,141

Loans:

Purchased credit deteriorated 2,255,874 2,434,259 2,680,466 2,915,809 3,143,822

Purchased non-credit deteriorated 6,554,647 7,457,950 8,433,913 9,458,869 10,557,907

Non-acquired 14,978,428 14,140,869 13,377,086 12,289,456 11,536,086

Less allowance for credit losses (314,144) (350,401) (406,460) (457,309) (440,159)

Loans, net 23,474,805 23,682,677 24,085,005 24,206,825 24,797,656

Other real estate owned ("OREO") 3,687 5,039 11,471 11,914 13,480

Premises and equipment, net 569,817 568,473 569,171 579,239 626,259

Bank owned life insurance 778,552 773,452 562,624 559,368 556,475

Mortgage servicing rights 60,922 57,351 54,285 43,820 34,578

Core deposit and other intangibles 136,584 145,126 153,861 162,592 171,637

Goodwill 1,581,085 1,581,085 1,579,758 1,563,942 1,566,524

Other assets 1,262,195 1,177,751 1,035,805 1,305,120 1,377,849

Total assets $40,903,708$40,375,869$39,730,332$37,789,873$37,819,366



Liabilities and Shareholders' Equity

Deposits:

Noninterest-bearing $11,333,881$11,176,338$10,801,812$9,711,338 $9,681,095

Interest-bearing 22,226,677 22,066,031 21,639,598 20,982,544 20,288,859

Total deposits 33,560,558 33,242,369 32,441,410 30,693,882 29,969,954

Federal funds purchased and securities

sold under agreements to repurchase 859,736 862,429 878,581 779,666 706,723

Other borrowings 326,807 351,548 390,323 390,179 1,089,637

Reserve for unfunded commitments 28,289 30,981 35,829 43,380 43,161

Other liabilities 1,335,377 1,130,919 1,264,369 1,234,886 1,446,478

Total liabilities 36,110,767 35,618,247 35,010,512 33,141,993 33,255,953



Shareholders' equity:

Common stock - $2.50 par value; authorized 160,000,000 shares 174,795 175,957 177,651 177,434 177,321

Surplus 3,693,622 3,720,946 3,772,248 3,765,406 3,764,482

Retained earnings 925,044 836,584 770,952 657,451 604,564

Accumulated other comprehensive income (loss) (520) 24,136 (1,031) 47,589 17,046

Total shareholders' equity 4,792,941 4,757,623 4,719,820 4,647,880 4,563,413

Total liabilities and shareholders' equity $40,903,708$40,375,869$39,730,332$37,789,873$37,819,366



Common shares issued and outstanding 69,918,037 70,382,728 71,060,446 70,973,477 70,928,304

Net Interest Income and Margin



Three Months Ended

Sep. 30, 2021 Jun. 30, 2021 Sep. 30, 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 and interest-earning deposits with banks$6,072,760 $2,199 0.14% $5,670,674 $1,350 0.10% $4,406,376 $1,215 0.11%

Investment securities 6,084,812 23,185 1.51% 5,371,985 20,014 1.49% 3,227,988 13,254 1.63%

Loans held for sale 184,547 1,307 2.81% 281,547 1,977 2.82% 556,670 4,151 2.97%

Total loans, excluding PPP 22,937,207 226,0833.91% 22,588,076 225,6644.01% 23,021,394 260,5274.50%

Total PPP loans 939,111 18,675 7.89% 1,719,323 18,536 4.32% 2,291,238 16,147 2.80%

Total loans held for investment 23,876,318 244,7584.07% 24,307,399 244,2004.03% 25,312,632 276,6744.35%

Total interest-earning assets 36,218,437 271,4492.97% 35,631,605 267,5413.01% 33,503,666 295,2943.51%

Noninterest-earning assets 4,375,329 4,201,147 4,361,551

Total Assets $40,593,766 $39,832,752 $37,865,217



Interest-Bearing Liabilities:

Transaction and money market accounts $15,908,784$3,110 0.08% $15,453,940$4,513 0.12% $13,671,430$7,853 0.23%

Savings deposits 3,126,055 241 0.03% 2,995,871 453 0.06% 2,561,605 584 0.09%

Certificates and other time deposits 3,256,488 3,916 0.48% 3,408,778 4,571 0.54% 4,016,437 6,717 0.67%

Federal funds purchased and repurchase agreements 860,810 259 0.12% 914,641 323 0.14% 710,369 509 0.29%

Other borrowings 334,256 3,937 4.67% 368,897 4,551 4.95% 1,089,399 9,283 3.39%

Total interest-bearing liabilities 23,486,393 11,463 0.19% 23,142,127 14,411 0.25% 22,049,240 24,946 0.45%

Noninterest-bearing liabilities ("Non-IBL") 12,333,922 11,951,384 11,259,916

Shareholders' equity 4,773,451 4,739,241 4,556,061

Total Non-IBL and shareholders' equity 17,107,373 16,690,625 15,815,977

Total Liabilities and Shareholders' Equity $40,593,766 $39,832,752 $37,865,217

Net Interest Income and Margin (Non-Tax Equivalent) $259,9862.85% $253,1302.85% $270,3483.21%

Net Interest Margin (Tax Equivalent) 2.86% 2.87% 3.22%

Total Deposit Cost (without Debt and Other Borrowings) 0.09% 0.12% 0.20%

Overall Cost of Funds (including Demand Deposits) 0.13% 0.17% 0.31%



Total Accretion on Acquired Loans (1) $5,243 $6,292 $22,445

Total Deferred Fees on PPP Loans $16,369 $14,232 $8,533

TEFRA (included in NIM, Tax Equivalent) $1,477 $1,424 $734

The remaining loan discount on acquired loans to be accreted into loan(1) interest income totals $75.7 million and the remaining net deferred fees on PPP loans totals $9.5 million as of September 30, 2021.

Noninterest Income and Expense



Three Months Ended Nine Months Ended

Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30,

(Dollars in thousands) 2021 2021 2021 2020 2020 2021 2020

Noninterest Income:

Fees on deposit accounts $26,130 $23,936 $25,282 $25,153 $24,346 $75,348 $59,166

Mortgage banking income 15,560 10,115 26,880 25,162 48,022 52,555 81,040

Trust and investment services income 9,150 9,733 8,578 7,506 7,404 27,461 21,931

Securities gains, net 64 36 - 35 15 100 15

Correspondent banking and capital market income 25,164 25,877 28,748 27,751 26,432 79,789 36,992

Bank owned life insurance income 5,132 5,047 3,300 3,341 4,127 13,478 8,038

Other 5,810 4,276 3,498 8,923 4,444 13,584 6,087

Total Noninterest Income $87,010 $79,020 $96,286 $97,871 $114,790$262,315$213,269



Noninterest Expense:

Salaries and employee benefits $136,969$137,379$140,361$138,982$134,919$414,709$277,617

Swap termination expense - - - 38,787 - - -

Occupancy expense 23,135 22,844 23,331 23,496 23,845 69,310 52,091

Information services expense 18,061 19,078 18,789 19,527 18,855 55,928 40,317

FHLB prepayment penalty - - - 56 - - 199

OREO expense and loan related 1,527 240 1,002 728 1,146 2,769 2,840

Business development and staff related 4,424 4,305 3,371 3,835 2,599 12,100 6,290

Amortization of intangibles 8,543 8,968 9,164 9,760 9,560 26,675 17,232

Professional fees 2,415 2,301 3,274 4,306 4,385 7,990 9,727

Supplies and printing expense 2,310 2,500 2,670 2,809 2,755 7,480 5,870

FDIC assessment and other regulatory charges 4,245 4,931 3,841 3,403 2,849 13,017 7,310

Advertising and marketing 2,185 1,659 1,740 1,544 1,203 5,584 2,548

Other operating expenses 10,858 14,502 11,159 11,329 13,109 36,518 31,135

Branch consolidation and merger expense 17,618 32,970 10,009 19,836 21,662 60,598 66,070

Extinguishment of debt cost - 11,706 - - - 11,706 -

Total Noninterest Expense $232,290$263,383$228,711$278,398$236,887$724,384$519,246

Loans and Deposits



The following table presents a summary of the loan portfolio by type (dollars in thousands):



Ending Balance

(Dollars in thousands) Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,

LOAN PORTFOLIO 2021 2021 2021 2020 2020

Construction and land development* $2,032,731 $1,947,646 $1,888,240 $1,890,846 $1,829,345

Investor commercial real estate* 7,131,192 7,094,109 6,978,326 7,007,146 7,050,104

Commercial owner occupied real estate 4,988,490 4,895,189 4,817,346 4,832,697 4,836,405

Commercial and industrial, excluding PPP 3,458,520 3,121,625 3,140,893 3,112,848 3,066,551

Consumer real estate* 4,733,567 4,748,693 4,835,567 4,974,808 5,195,978

Consumer/other 943,243 907,181 885,320 912,327 907,711

Subtotal 23,287,743 22,714,443 22,545,692 22,730,672 22,886,094

PPP loans 501,206 1,318,635 1,945,773 1,933,462 2,351,721

Total Loans $23,788,949$24,033,078$24,491,465$24,664,134$25,237,815

As a result of the conversion of legacy CenterState's core system to theCompany's core system completed in 2Q 2021, several loans were reclassified toconform with the Company's loan segmentation, most notably residentialinvestment loans which were reclassed from consumer real estate to investorcommercial real estate. All periods prior to 2Q 2021 presented above wererevised to conform with the current loan segmentation.

* Single family home construction-to-permanent loans originated by theCompany's mortgage banking division are included in construction and landdevelopment category until completion. Investor commercial real estate loansinclude commercial non-owner occupied real estate and other income producingproperty. Consumer real estate includes consumer owner occupied real estateand home equity loans.



Ending Balance

(Dollars in thousands) Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,

DEPOSITS 2021 2021 2021 2020 2020

Noninterest-bearing checking $11,333,881$11,176,338$10,801,812$9,711,338 $9,681,095

Interest-bearing checking 7,920,236 7,651,433 7,369,066 6,955,575 6,414,905

Savings 3,201,543 3,051,229 2,906,673 2,694,010 2,618,877

Money market 8,110,162 8,024,117 7,884,132 7,584,353 7,404,299

Time deposits 2,994,736 3,339,252 3,479,727 3,748,605 3,850,778

Total Deposits $33,560,558$33,242,369$32,441,410$30,693,881$29,969,954



Core Deposits (excludes Time Deposits)$30,565,822$29,903,117$28,961,683$26,945,276$26,119,176

Asset Quality

Ending Balance

Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,

(Dollars in thousands) 2021 2021 2021 2020 2020

NONPERFORMING ASSETS:

Non-acquired

Non-acquired nonperforming loans $25,529 $16,624 $21,034 $29,171 $22,463

Non-acquired OREO and other nonperforming assets 364 695 654 688 825

Total non-acquired nonperforming assets 25,893 17,319 21,688 29,859 23,288

Acquired

Acquired nonperforming loans 64,672 69,053 80,024 77,668 89,974

Acquired OREO and other nonperforming assets 3,804 4,777 11,292 11,568 12,904

Total acquired nonperforming assets 68,476 73,830 91,316 89,236 102,878

Total nonperforming assets $94,369 $91,149 $113,004$119,095$126,166



Three Months Ended

Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,

2021 2021 2021 2020 2020

ASSET QUALITY RATIOS:

Allowance for credit losses as a percentage of loans 1.32% 1.46% 1.66% 1.85% 1.74%

Allowance for credit losses as a percentage of loans, excluding PPP loans 1.35% 1.54% 1.80% 2.01% 1.92%

Allowance for credit losses as a percentage of nonperforming loans 348.27% 408.98% 402.20% 428.04% 391.47%

Net (recoveries) charge-offs as a percentage of average loans (annualized) 0.00% 0.03% (0.00)% 0.01% 0.01%

Total nonperforming assets as a percentage of total assets 0.23% 0.23% 0.28% 0.32% 0.33%

Nonperforming loans as a percentage of period end loans 0.38% 0.36% 0.41% 0.43% 0.45%

Current Expected Credit Losses ("CECL")



Below is a table showing the roll forward of the ACL and UFC for the third quarter of 2021:

Allowance for Credit Losses ("ACL & UFC")

NonPCD ACL PCD ACL Total UFC

Ending Balance 6/30/2021 $245,368 $105,033 $350,401 $30,981

Charge offs (2,722) - (2,722) -

Acquired charge offs (558) (567) (1,125) -

Recoveries 1,512 - 1,512 -

Acquired recoveries 540 1,749 2,289 -

Provision for credit losses (22,759) (13,452) (36,211) (2,692)

Ending balance 9/30/2021 $221,381 $92,763 $314,144 $28,289



Period end loans (includes PPP Loans) $21,533,075$2,255,874$23,788,949 N/A

Reserve to Loans (includes PPP Loans) 1.03% 4.11% 1.32% N/A

Period end loans (excludes PPP Loans) $21,031,869$2,255,874$23,287,743 N/A

Reserve to Loans (excludes PPP Loans) 1.05% 4.11% 1.35% N/A

Unfunded commitments (off balance sheet) * $5,497,678

Reserve to unfunded commitments (off balance sheet) 0.51%

* Unfunded commitments exclude unconditionally cancelable commitments andletters of credit.

Conference Call

The Company will host a conference call to discuss its third quarter results at 10:00 a.m. Eastern Time on October 28, 2021. Management from Atlantic Capital Bancshares, Inc. will participate in this call to provide some commentary on its financial results for the quarter. Callers wishing to participate may call toll-free by dialing 844-200-6205. The number for international participants is (929) 526-1599. The conference ID number is 311263. 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 October 28, 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)Sep. 30, 2021 Jun. 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sep 30, 2020

Net income (GAAP) $ 122,788 $ 98,960 $ 146,949 $ 86,236 $95,221

(Recovery) provision for credit losses (38,903) (58,793) (58,420) 18,185 29,797

Tax provision (benefit) 30,821 28,600 41,043 (19,401) 23,233

Merger-related costs 17,618 32,970 10,009 19,836 21,662

Extinguishment of debt costs - 11,706 - - -

Securities gains (64) (36) - (35) (15)

FHLB advance prepayment cost - - - 56 -

Swap termination cost - - - 38,787 -

Pre-provision net revenue (PPNR) (Non-GAAP) $ 132,260 $ 113,407 $ 139,581 $ 143,664 $169,898



Average asset balance (GAAP) $ 40,593,766 $ 39,832,752 $ 38,245,410 $ 38,027,111 $37,865,217



PPNR ROAA 1.29 % 1.14 % 1.48 % 1.50 % 1.79 %



Three Months Ended Nine Months Ended

(Dollars in thousands, except per share data) Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30,

RECONCILIATION OF GAAP TO NON-GAAP 2021 2021 2021 2020 2020 2021 2020

Adjusted Net Income (non-GAAP) (2)

Net income (GAAP) $122,788 $98,960 $146,949 $86,236 $95,221 $368,697 $34,396

Securities gains, net of tax (51) (28) - (29) (12) (79) (12)

PCL - NonPCD loans & unfunded commitments - - - - - - 92,212

Swap termination expense, net of tax - - - 31,784 - - -

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 14,083 25,578 7,824 16,255 17,413 47,485 52,114

Extinguishment of debt cost, net of tax - 9,081 - - - 9,081 -

Adjusted net income (non-GAAP) $136,820 $133,591 $154,773 $102,824 $112,622 $425,184 $178,864



Adjusted Net Income per Common Share - Basic (2)

Earnings per common share - Basic (GAAP) $1.75 $1.40 $2.07 $1.22 $1.34 $5.22 $0.70

Effect to adjust for securities gains (0.00) (0.00) - (0.00) (0.00) (0.00) (0.00)

Effect to adjust for PCL - NonPCD loans & unfunded commitments - - - - - - 1.87

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 0.20 0.36 0.11 0.23 0.25 0.67 1.06

Effect to adjust for extinguishment of debt cost - 0.13 - - - 0.13 -

Adjusted net income per common share - Basic (non-GAAP) $1.95 $1.89 $2.18 $1.45 $1.59 $6.02 $3.62



Adjusted Net Income per Common Share - Diluted (2)

Earnings per common share - Diluted (GAAP) $1.74 $1.39 $2.06 $1.21 $1.34 $5.19 $0.69

Effect to adjust for securities gains (0.00) (0.00) - (0.00) (0.00) (0.00) (0.00)

Effect to adjust for PCL - NonPCD loans & unfunded commitments - - - - - - 1.86

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 0.20 0.35 0.11 0.23 0.24 0.66 1.06

Effect to adjust for extinguishment of debt cost - 0.13 - - - 0.13 -

Adjusted net income per common share - Diluted (non-GAAP) $1.94 $1.87 $2.17 $1.44 $1.58 $5.98 $3.60



Adjusted Return on Average Assets (2)

Return on average assets (GAAP) 1.20 % 1.00 % 1.56 % 0.90 % 1.00 % 1.25 % 0.18 %

Effect to adjust for securities gains (0.00) % (0.00) % - % (0.00) % (0.00) % (0.00) % (0.00) %

Effect to adjust for PCL - NonPCD loans & unfunded commitments - % - % - % - % - % - % 0.48 %

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 % - % - % 0.00 %

Effect to adjust for merger & branch consol./acq expenses, net of tax 0.14 % 0.26 % 0.08 % 0.18 % 0.18 % 0.16 % 0.27 %

Effect to adjust for extinguishment of debt cost - % 0.09 % - % - % - % 0.03 % - %

Adjusted return on average assets (non-GAAP) 1.34 % 1.35 % 1.64 % 1.08 % 1.18 % 1.44 % 0.93 %



Adjusted Return on Average Equity (2)

Return on average equity (GAAP) 10.21 % 8.38 % 12.71 % 7.45 % 8.31 % 10.41 % 1.41 %

Effect to adjust for securities gains (0.00) % (0.00) % - % (0.00) % (0.00) % (0.00) % (0.00) %

Effect to adjust for PCL - NonPCD loans & unfunded commitments - % - % - % - % - % - % 3.77 %

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) % - % - % 0.01 %

Effect to adjust for merger & branch consol./acq expenses, net of tax 1.16 % 2.16 % 0.68 % 1.41 % 1.52 % 1.34 % 2.12 %

Effect to adjust for extinguishment of debt cost - % 0.77 % - % - % - 0.26 % - %

Adjusted return on average equity (non-GAAP) 11.37 % 11.31 % 13.39 % 8.88 % 9.83 % 12.01 % 7.31 %



Adjusted Return on Average Common Tangible Equity (2) (3)

Return on average common equity (GAAP) 10.21 % 8.38 % 12.71 % 7.45 % 8.31 % 10.41 % 1.41 %

Effect to adjust for securities gains (0.00) % (0.00) % - % (0.00) % (0.00) % (0.00) % (0.00) %

Effect to adjust for PCL - NonPCD loans & unfunded commitments - % - % - % - % - % - % 3.77 %

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 - % - % - % - % - % - % 0.01 %

Effect to adjust for merger & branch consol./acq expenses, net of tax 1.17 % 2.16 % 0.68 % 1.40 % 1.52 % 1.34 % 2.13 %

Effect to adjust for extinguishment of debt cost - % 0.77 % - % - % - 0.26 % - %

Effect to adjust for intangible assets 7.30 % 7.43 % 8.85 % 6.48 % 7.31 % 7.84 % 6.26 %

Adjusted return on average common tangible equity (non-GAAP) 18.68 % 18.74 % 22.24 % 15.35 % 17.14 % 19.85 % 13.58 %





Three Months Ended Nine Months Ended

(Dollars in thousands, except per share data) Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30,

RECONCILIATION OF GAAP TO NON-GAAP 2021 2021 2021 2020 2020 2021 2020

Adjusted Efficiency Ratio (4)

Efficiency ratio 64.22 % 76.28 % 61.06 % 73.59 % 58.91 % 66.99 % 64.60 %

Effect to adjust for merger and branch consolidation related expenses (5.06) % (13.38)% (2.79) % (16.07)% (5.61) % (6.94)% (8.52)%

Adjusted efficiency ratio 59.16 % 62.88 % 58.26 % 57.52 % 53.30 % 60.05 % 56.07 %



Tangible Book Value Per Common Share (3)

Book value per common share (GAAP) $68.55 $67.60 $66.42 $65.49 $64.34

Effect to adjust for intangible assets (24.57) (24.53) (24.40) (24.33) (24.51)

Tangible book value per common share (non-GAAP) $43.98 $43.07 $42.02 $41.16 $39.83



Tangible Equity-to-Tangible Assets (3)

Equity-to-assets (GAAP) 11.72 % 11.78 % 11.88 % 12.30 % 12.07 %

Effect to adjust for intangible assets (3.87) % (3.94) % (4.02) % (4.20) % (4.24) %

Tangible equity-to-tangible assets (non-GAAP) 7.85 % 7.84 % 7.86 % 8.10 % 7.83 %

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 $5.2 million, $6.3 million, $10.4 million, $12.7 million, and $22.4 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, extinguishment of debt cost 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(2) 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 $17.6 million, $33.0 million, $10.0 million, $19.8 million, and $21.7 million for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively; (b) net securities gains of $64,000, $36,000, $35,000 and $15,000 for the quarters ended September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020, respectively; (c) FHLB prepayment penalty of $56,000 for the quarter ended December 31, 2020; and (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.

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, extinguishment of debt cost, tax carryback losses under the CARES Act, amortization of intangible assets, and the FHLB prepayment(4) penalty divided by net interest income and noninterest income excluding securities gains (losses). The pre-tax amortization expenses of intangible assets were $8.5 million, $9.0 million, $9.2 million, $9.8 million, and $9.6 million, for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 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.

September 30, 2021 ratios are estimated and may be subject to change(6) 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. 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 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, (3) risks related to the merger and integration of SouthState and Atlantic Capital 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) disruption to the parties' businesses as a result of the announcement and pendency of the merger, (iii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, (iv) 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, (v) the failure to obtain the necessary approvals by the shareholders of SouthState or Atlantic Capital, (vi) the amount of the costs, fees, expenses and charges related to the merger, (vii) the ability by each of SouthState and Atlantic Capital to obtain required governmental approvals of the merger (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), (viii) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the merger, (ix) the failure of the closing conditions in the merger agreement to be satisfied, or any unexpected delay in closing the merger, (x) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (xi) the dilution caused by SouthState's issuance of additional shares of its common stock in the merger, (xii) general competitive, economic, political and market conditions, and (xiii) other factors that may affect future results of Atlantic Capital and SouthState including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency and legislative and regulatory actions and reforms (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 Atlantic Capital 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 SouthState'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 Covid19 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; (31) risks related to the proposed merger of SouthState and Atlantic Capital, 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) disruption to the parties' businesses as a result of the announcement and pendency of the merger, (iii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, (iv) 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, (v) the failure to obtain the necessary approvals by the shareholders of SouthState or Atlantic Capital, (vi) the amount of the costs, fees, expenses and charges related to the merger, (vii) the ability by each of SouthState and Atlantic Capital to obtain required governmental approvals of the merger (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), (viii) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the merger, (ix) the failure of the closing conditions in the merger agreement to be satisfied, or any unexpected delay in closing the merger, (x) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (xi) the dilution caused by SouthState's issuance of additional shares of its common stock in the merger, (xii) general competitive, economic, political and market conditions, and (xiii) other factors that may affect future results of Atlantic Capital and SouthState including changes in asset quality and credit risk, and (32) 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