Company Announcements

SouthState Corporation Reports Fourth Quarter 2022 Results, Declares Quarterly Cash Dividend

WINTER HAVEN, Fla. , Jan. 26, 2023 /PRNewswire/ -- SouthState Corporation (NASDAQ: SSB) today released its unaudited results of operations and other financial information for the three-month and twelve-month periods ended December 31, 2022.

"The resilience of SouthState's deposit franchise drove our performance in the 4th quarter and in 2022," said John C. Corbett, Chief Executive Officer.  "With a cumulative deposit beta of 5% and a total cost of deposits of 21 basis points, our net interest margin expanded 120 basis points in 2022 and our PPNR per share increased 60% from the same quarter last year.  In addition to the strength of the deposit franchise, our loan portfolio grew 19% annualized in the current quarter and asset quality metrics remain pristine.  With the benefit of continued population migration to our southeast markets, our team is energized about the prospects for 2023 and the years ahead."

Highlights of the fourth quarter of 2022 include:

Returns

  • Reported Diluted Earnings per Share ("EPS") of $1.88; Adjusted Diluted EPS (Non-GAAP) of $1.90
  • Net Income of $143.5 million; Adjusted Net Income (Non-GAAP) of $144.7 million
  • Return on Average Common Equity of 11.4% and Reported Return on Average Tangible Common Equity (Non-GAAP) of 20.2%; Adjusted Return on Average Tangible Common Equity (Non-GAAP) of 20.3%*
  • Return on Average Assets ("ROAA") of 1.28%; Adjusted ROAA (Non-GAAP) of 1.29%*
  • Pre-Provision Net Revenue ("PPNR") per weighted average diluted share (Non-GAAP) of $3.03, up 11% from the prior quarter's $2.74 and up 60% from $1.89 in the year ago quarter
  • Book Value per Share of $67.04 increased by $2.01 per share compared to the prior quarter
  • Tangible Book Value ("TBV") per Share (Non-GAAP) of $40.09, up $2.12 from the prior quarter

∗ Annualized percentages

Performance

  • Net Interest Income of $396 million; Core Net Interest Income (excluding loan accretion and deferred fees on PPP) (Non-GAAP) increased $36 million from prior quarter
  • Net Interest Margin ("NIM"), non-tax equivalent and tax equivalent (Non-GAAP) of 3.96% and 3.99%, respectively, up 41 basis points from prior quarter
  • Noninterest Income of $63 million down $10 million compared to the prior quarter due to correspondent banking and capital markets income and mortgage banking; Noninterest Income represented 0.57% of average assets for the fourth quarter of 2022
  • Noninterest Expense, excluding merger and branch consolidation related expense (Non-GAAP), increased $1 million compared to the prior quarter
  • 5.5% revenue growth with 0.5% expense growth generated 5.0% operating leverage in the quarter
  • Efficiency Ratio improved to 48% from the prior quarter's 53%; Adjusted Efficiency Ratio (Non-GAAP) improved to 48% from the prior quarter's 50%
  • $47.1 million Provision for Credit Losses ("PCL") driven by changing economic forecasts and loan portfolio growth, in spite of net loan recoveries and only $873 thousand in total net charge-offs (including DDA charge-offs)

Balance Sheet

  • Loans increased $1.3 billion, or 19% annualized, led by consumer real estate, commercial and industrial, and construction and land development loans; ending loan to deposit ratio of 83%
  • Deposits declined $559 million, or 6% annualized; total deposit cost was 0.21%, up 13 basis points from prior quarter
  • Began applying settle-to-market accounting to variation margin payments for centrally cleared swaps, resulting in an offset of $824 million recorded with market value of derivatives in Other Assets and $8.5 million of interest cost during the current quarter.  Refer to the non-interest income table on page 6 and note 8 on page 11 for more details. 

Subsequent Events

  • The Board of Directors of the Company declared a quarterly cash dividend on its common stock of $0.50 per share, payable on February 17, 2023 to shareholders of record as of February 10, 2023 

 

Financial Performance



Three Months Ended


Twelve Months Ended


(Dollars in thousands, except per share data)


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Dec. 31,


Dec. 31,


INCOME STATEMENT


2022


2022


2022


2022


2021


2022


2021


Interest income























   Loans, including fees (1)


$

359,552


$

312,856


$

272,000


$

233,617


$

238,310


$

1,178,026


$

990,519


   Investment securities, trading securities, federal funds sold and securities























      purchased under agreements to resell (8)



64,337



63,476



54,333



36,854



29,063



218,999



94,285


Total interest income



423,889



376,332



326,333



270,471



267,373



1,397,025



1,084,804


Interest expense























   Deposits (8)



19,945



7,534



4,914



4,591



5,121



36,984



33,182


   Federal funds purchased, securities sold under agreements























      to repurchase, and other borrowings



7,940



6,464



5,604



4,362



4,156



24,370



18,447


Total interest expense



27,885



13,998



10,518



8,953



9,277



61,354



51,629


Net interest income (8)



396,004



362,334



315,815



261,518



258,096



1,335,671



1,033,175


  Provision (recovery) for credit losses



47,142



23,876



19,286



(8,449)



(9,157)



81,855



(165,273)


Net interest income after provision (recovery) for credit losses



348,862



338,458



296,529



269,967



267,253



1,253,816



1,198,448


Noninterest income (8)



63,392



73,053



86,756



86,046



91,902



309,247



354,252


Noninterest expense























Operating expense



227,957



226,754



225,779



218,324



217,392



898,813



869,473


Merger and branch consolidation related expense



1,542



13,679



5,390



10,276



6,645



30,888



67,242


Extinguishment of debt cost















11,706


Total noninterest expense



229,499



240,433



231,169



228,600



224,037



929,701



948,421


Income before provision for income taxes



182,755



171,078



152,116



127,413



135,118



633,362



604,279


Income taxes provision



39,253



38,035



32,941



27,084



28,272



137,313



128,736


Net income


$

143,502


$

133,043


$

119,175


$

100,329


$

106,846


$

496,049


$

475,543

























Adjusted net income (non-GAAP) (2)























Net income (GAAP)


$

143,502


$

133,043


$

119,175


$

100,329


$

106,846


$

496,049


$

475,543


Securities gains, net of tax





(24)







(2)



(24)



(81)


Initial provision for credit losses - NonPCD loans and UFC from ACBI, net of tax









13,492





13,492




Merger and branch consolidation related expense, net of tax



1,211



10,638



4,223



8,092



5,255



24,163



52,740


Extinguishment of debt cost, net of tax















9,081


Adjusted net income (non-GAAP)


$

144,713


$

143,657


$

123,398


$

121,913


$

112,099


$

533,680


$

537,283

























   Basic earnings per common share


$

1.90


$

1.76


$

1.58


$

1.40


$

1.53


$

6.65


$

6.76


   Diluted earnings per common share


$

1.88


$

1.75


$

1.57


$

1.39


$

1.52


$

6.60


$

6.71


   Adjusted net income per common share - Basic (non-GAAP) (2)


$

1.91


$

1.90


$

1.64


$

1.71


$

1.61


$

7.16


$

7.63


   Adjusted net income per common share - Diluted (non-GAAP) (2)


$

1.90


$

1.89


$

1.62


$

1.69


$

1.59


$

7.10


$

7.58


   Dividends per common share


$

0.50


$

0.50


$

0.49


$

0.49


$

0.49


$

1.98


$

1.92


   Basic weighted-average common shares outstanding



75,639,640



75,605,960



75,461,157



71,447,429



69,651,334



74,550,708



70,393,262


   Diluted weighted-average common shares outstanding



76,326,777



76,182,131



76,094,198



72,110,746



70,289,971



75,181,305



70,888,896


   Effective tax rate



21.48 %



22.23 %



21.66 %



21.26 %



20.92 %



21.68 %



21.30 %


 

Performance and Capital Ratios



Three Months Ended


Twelve Months Ended





Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Dec. 31,


Dec. 31,





2022


2022


2022


2022


2021


2022


2021



PERFORMANCE RATIOS






















Return on average assets (annualized) (8)



1.28

%


1.17

%


1.05

%


0.95

%


1.03

%

1.12

%

1.19

%


Adjusted return on average assets (annualized) (non-GAAP) (2) (8)



1.29

%


1.27

%


1.09

%


1.15

%


1.08

%

1.20

%

1.35

%


Return on average common equity (annualized)



11.41

%


10.31

%


9.36

%


8.24

%


8.84

%

9.84

%

10.01

%


Adjusted return on average common equity (annualized) (non-GAAP) (2)



11.50

%


11.13

%


9.69

%


10.01

%


9.28

%

10.59

%

11.31

%


Return on average tangible common equity (annualized) (non-GAAP) (3)



20.17

%


17.99

%


16.59

%


13.97

%


14.63

%

17.16

%

16.64

%


Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) (3)



20.33

%


19.36

%


17.15

%


16.79

%


15.30

%

18.40

%

18.68

%


Efficiency ratio (tax equivalent)



47.96

%


53.14

%


54.92

%


62.99

%


61.27

%

54.21

%

65.55

%


Adjusted efficiency ratio (non-GAAP) (4)



47.63

%


50.02

%


53.59

%


60.05

%


59.39

%

52.34

%

59.88

%


Dividend payout ratio (5)



26.40

%


28.44

%


31.03

%


33.71

%


32.02

%

29.54

%

28.43

%


Book value per common share


$

67.04


$

65.03


$

66.64


$

68.30


$

69.27







Tangible book value per common share (non-GAAP) (3)


$

40.09


$

37.97


$

39.47


$

41.05


$

44.62





























CAPITAL RATIOS






















Equity-to-assets (8)



11.6

%


11.1

%


11.0

%


11.2

%


11.5

%






Tangible equity-to-tangible assets (non-GAAP) (3) (8)



7.2

%


6.8

%


6.8

%


7.1

%


7.7

%






Tier 1 leverage (6) (8) *



8.7

%


8.4

%


8.0

%


8.5

%


8.1

%






Tier 1 common equity (6) (8) *



11.0

%


11.0

%


11.1

%


11.4

%


11.8

%






Tier 1 risk-based capital (6) (8) *



11.0

%


11.0

%


11.1

%


11.4

%


11.8

%






Total risk-based capital (6) (8) *



13.0

%


13.0

%


13.0

%


13.3

%


13.6

%






*

The regulatory capital ratios presented above include the assumption of the transitional method relative to the CARES Act in relief of COVID-19 pandemic on the economy and financial institutions in the United States.  The referenced relief allows a total five-year "phase in" of the CECL impact on capital and relief over the next two years for the impact on the allowance for credit losses resulting from COVID-19.

 

 Balance Sheet



Ending Balance


(Dollars in thousands, except per share and share data)


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


BALANCE SHEET


2022


2022


2022


2022


2021


Assets

















   Cash and due from banks


$

548,387


$

394,794


$

561,516


$

588,372


$

476,653


   Federal funds sold and interest-earning deposits with banks (8)



764,176



2,529,415



4,259,490



5,604,419



6,244,918


Cash and cash equivalents



1,312,563



2,924,209



4,821,006



6,192,791



6,721,571



















Trading securities, at fair value



31,263



51,940



88,088



74,234



77,689


Investment securities:

















   Securities held to maturity



2,683,241



2,738,178



2,806,465



2,827,769



1,819,901


   Securities available for sale, at fair value



5,326,822



5,369,610



5,666,008



5,924,206



5,193,478


   Other investments



179,717



179,755



179,815



179,258



160,568


               Total investment securities



8,189,780



8,287,543



8,652,288



8,931,233



7,173,947


Loans held for sale



28,968



34,477



73,880



130,376



191,723


Loans:

















Purchased credit deteriorated



1,429,731



1,544,562



1,707,592



1,939,033



1,987,322


Purchased non-credit deteriorated



5,943,092



6,365,175



6,908,234



7,633,824



5,890,069


Non-acquired



22,805,039



20,926,566



19,319,440



16,983,570



16,050,775


    Less allowance for credit losses



(356,444)



(324,398)



(319,708)



(300,396)



(301,807)


               Loans, net



29,821,418



28,511,905



27,615,558



26,256,031



23,626,359


Other real estate owned ("OREO")



1,023



2,160



1,431



3,290



2,736


Premises and equipment, net



520,635



531,160



562,781



568,332



558,499


Bank owned life insurance



964,708



960,052



953,970



942,922



783,049


Mortgage servicing rights



86,610



90,459



87,463



83,339



65,620


Core deposit and other intangibles



116,450



125,390



132,694



140,364



128,067


Goodwill



1,923,106



1,922,525



1,922,525



1,924,024



1,581,085


Other assets (8)



922,172



980,557



854,506



829,786



928,111


                Total assets


$

43,918,696


$

44,422,377


$

45,766,190


$

46,076,722


$

41,838,456



















Liabilities and Shareholders' Equity

















Deposits:

















   Noninterest-bearing


$

13,168,656


$

13,660,244


$

14,337,018


$

14,052,332


$

11,498,840


   Interest-bearing (8)



23,181,967



23,249,545



24,097,601



24,598,679



23,555,989


               Total deposits



36,350,623



36,909,789



38,434,619



38,651,011



35,054,829


Federal funds purchased and securities

















   sold under agreements to repurchase



556,417



557,802



669,999



770,409



781,239


Other borrowings



392,275



392,368



392,460



405,553



327,066


Reserve for unfunded commitments



67,215



52,991



32,543



30,368



30,510


Other liabilities (8)



1,477,239



1,588,241



1,196,144



1,044,973



841,872


               Total liabilities



38,843,769



39,501,191



40,725,765



40,902,314



37,035,516



















Shareholders' equity:

















   Common stock - $2.50 par value; authorized 160,000,000 shares



189,261



189,191



189,103



189,403



173,331


   Surplus



4,215,712



4,207,040



4,195,976



4,214,897



3,653,098


   Retained earnings



1,347,042



1,241,413



1,146,230



1,064,064



997,657


   Accumulated other comprehensive loss



(677,088)



(716,458)



(490,884)



(293,956)



(21,146)


               Total shareholders' equity



5,074,927



4,921,186



5,040,425



5,174,408



4,802,940


               Total liabilities and shareholders' equity


$

43,918,696


$

44,422,377


$

45,766,190


$

46,076,722


$

41,838,456



















Common shares issued and outstanding



75,704,563



75,676,445



75,641,322



75,761,018



69,332,297


 

Net Interest Income and Margin



Three Months Ended




Dec. 31, 2022


Sep. 30, 2022


Dec. 31, 2021


(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 (8)


$

1,849,877


$

16,491


3.54 %


$

3,403,421


$

18,190


2.12 %


$

5,934,353


$

2,216


0.15 %


Investment securities



8,286,894



47,846


2.29 %



8,705,657



45,286


2.06 %



6,945,952



26,847


1.53 %


Loans held for sale



25,633



401


6.21 %



47,119



620


5.22 %



206,920



1,526


2.93 %


Total loans, excluding PPP



29,480,843



359,120


4.83 %



28,267,741



312,172


4.38 %



23,445,336



230,337


3.90 %


Total PPP loans



12,489



31


0.98 %



27,236



64


0.93 %



363,083



6,447


7.04 %


Total loans held for investment



29,493,332



359,151


4.83 %



28,294,977



312,236


4.38 %



23,808,419



236,784


3.95 %


     Total interest-earning assets (8)



39,655,736



423,889


4.24 %



40,451,174



376,332


3.69 %



36,895,644



267,373


2.88 %


Noninterest-earning assets (8)



4,774,158








4,534,539








4,328,068







     Total Assets


$

44,429,894







$

44,985,713







$

41,223,712

































Interest-Bearing Liabilities ("IBL"):


























Transaction and money market accounts (8)


$

17,044,865


$

16,901


0.39 %


$

17,503,416


$

5,353


0.12 %


$

16,492,540


$

2,230


0.05 %


Savings deposits



3,536,330



1,021


0.11 %



3,621,493



488


0.05 %



3,267,366



135


0.02 %


Certificates and other time deposits



2,444,361



2,023


0.33 %



2,627,280



1,693


0.26 %



2,889,741



2,756


0.38 %


Federal funds purchased



186,232



1,694


3.61 %



240,814



1,312


2.16 %



493,776



107


0.09 %


Repurchase agreements



363,336



253


0.28 %



376,985



194


0.20 %



390,212



150


0.15 %


Other borrowings



435,806



5,993


5.46 %



392,427



4,958


5.01 %



326,921



3,899


4.73 %


     Total interest-bearing liabilities (8)



24,010,930



27,885


0.46 %



24,762,415



13,998


0.22 %



23,860,556



9,277


0.15 %


Noninterest-bearing liabilities ("Non-IBL") (8)



15,427,380








15,101,738








12,568,742







Shareholders' equity



4,991,584








5,121,560








4,794,414







     Total Non-IBL and shareholders' equity



20,418,964








20,223,298








17,363,156







     Total Liabilities and Shareholders' Equity


$

44,429,894







$

44,985,713







$

41,223,712







Net Interest Income and Margin (Non-Tax Equivalent) (8)





$

396,004


3.96 %





$

362,334


3.55 %





$

258,096


2.78 %


Net Interest Margin (Tax Equivalent) (non-GAAP) (8)








3.99 %








3.58 %








2.79 %


Total Deposit Cost (without Debt and Other Borrowings)








0.21 %








0.08 %








0.06 %


Overall Cost of Funds (including Demand Deposits)








0.29 %








0.14 %








0.10 %




























Total Accretion on Acquired Loans (1)





$

7,350







$

9,550







$

7,707




Total Deferred Fees on PPP Loans





$







$







$

5,655




Tax Equivalent ("TE") Adjustment





$

2,397







$

2,345







$

1,734




(1)  The remaining loan discount on acquired loans to be accreted into loan interest income totals $72.1 million as of December 31, 2022.

 

Noninterest Income and Expense



Three Months Ended


Twelve Months Ended




Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Dec. 31,


Dec. 31,


(Dollars in thousands)


2022


2022


2022


2022


2021


2022


2021


Noninterest Income:























   Fees on deposit accounts


$

34,480


$

31,188


$

33,658


$

28,902


$

30,293


$

128,228


$

105,641


   Mortgage banking (loss) income



(545)



2,262



5,480



10,594



12,044



17,790



64,599


   Trust and investment services income



9,867



9,603



9,831



9,718



9,520



39,019



36,981


   Securities gains, net





30







2



30



102


   Correspondent banking and capital market income (8)



16,760



20,552



27,604



27,994



30,216



92,910



110,005


   Interest on centrally-cleared variation margin (8)



(8,451)



(4,125)



(1,536)



(44)



8



(14,155)



43


   Total Correspondent banking and capital market income (8)



8,309



16,427



26,068



27,950



30,224



78,755



110,048


   Bank owned life insurance income



6,723



6,082



6,246



5,260



4,932



24,311



18,410


   Other



4,558



7,461



5,473



3,622



4,887



21,114



18,471


         Total Noninterest Income (8)


$

63,392


$

73,053


$

86,756


$

86,046


$

91,902


$

309,247


$

354,252

























Noninterest Expense:























   Salaries and employee benefits


$

140,440


$

139,554


$

137,037


$

137,673


$

137,321


$

554,704


$

552,030


   Occupancy expense



22,412



22,490



22,759



21,840



22,915



89,501



92,225


   Information services expense



19,847



20,714



19,947



19,193



18,489



79,701



74,417


   OREO and loan related expense (income)



78



532



(3)



(238)



(740)



369



2,029


   Business development and staff related



5,851



5,090



4,916



4,276



4,577



20,133



16,677


   Amortization of intangibles



8,027



7,837



8,847



8,494



8,517



33,205



35,192


   Professional fees



3,756



3,495



4,331



3,749



2,639



15,331



10,629


   Supplies and printing expense



2,411



2,621



2,400



2,189



2,179



9,621



9,659


   FDIC assessment and other regulatory charges



6,589



6,300



5,332



4,812



4,965



23,033



17,982


   Advertising and marketing



2,669



2,170



2,286



1,763



2,375



8,888



7,959


   Other operating expenses



15,877



15,951



17,927



14,573



14,155



64,327



50,674


   Merger and branch consolidation related expense



1,542



13,679



5,390



10,276



6,645



30,888



67,242


   Extinguishment of debt cost















11,706


         Total Noninterest Expense


$

229,499


$

240,433


$

231,169


$

228,600


$

224,037


$

929,701


$

948,421


 

Loans and Deposits

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



Ending Balance


(Dollars in thousands)


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


LOAN PORTFOLIO


2022


2022


2022


2022


2021


Construction and land development *


$

2,860,360


$

2,550,552


$

2,527,062


$

2,316,313


$

2,029,216


Investor commercial real estate*



8,769,201



8,641,316



8,393,630



8,158,457



7,432,503


Commercial owner occupied real estate



5,460,193



5,426,216



5,421,725



5,346,583



4,970,116


Commercial and industrial, excluding PPP



5,303,379



4,962,616



4,760,355



4,447,279



3,516,485


Consumer real estate *



6,475,210



5,977,120



5,505,531



4,988,736



4,806,958


Consumer/other



1,299,415



1,263,362



1,279,790



1,179,697



928,240


Total loans, excluding PPP



30,167,758



28,821,182



27,888,093



26,437,065



23,683,518


PPP loans



10,104



15,121



47,173



119,362



244,648


Total Loans


$

30,177,862


$

28,836,303


$

27,935,266


$

26,556,427


$

23,928,166


* Single family home construction-to-permanent loans originated by the Company's mortgage banking division are included in construction and land development category until completion.  Investor commercial real estate loans include commercial non-owner occupied real estate and other income producing property.  Consumer real estate includes consumer owner occupied real estate and home equity loans.


† Includes single family home construction-to-permanent loans of $904.1 million, $881.3 million, $795.7 million, $733.7 million, and $686.5 million for the quarters ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, respectively.

 



Ending Balance


(Dollars in thousands)


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


DEPOSITS


2022


2022


2022


2022


2021


Noninterest-bearing checking


$

13,168,656


$

13,660,244


$

14,337,018


$

14,052,332


$

11,498,840


Interest-bearing checking



8,955,519



8,741,447



8,953,332



9,275,208



9,018,987


Savings



3,464,351



3,602,560



3,616,819



3,479,743



3,350,547


Money market (8)



8,342,111



8,369,826



8,823,025



9,015,186



8,376,380


Time deposits



2,419,986



2,535,712



2,704,425



2,828,542



2,810,075


Total Deposits (8)


$

36,350,623


$

36,909,789


$

38,434,619


$

38,651,011


$

35,054,829



















Core Deposits (excludes Time Deposits) (8)


$

33,930,637


$

34,374,077


$

35,730,194


$

35,822,469


$

32,244,754


 

Asset Quality



Ending Balance




Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


(Dollars in thousands)


2022


2022


2022


2022


2021


NONPERFORMING ASSETS:

















Non-acquired

















Non-acquired nonaccrual loans and restructured loans on nonaccrual


$

44,671


$

34,374


$

20,716


$

19,582


$

18,700


Accruing loans past due 90 days or more



2,358



2,358



1,371



22,818



4,612


Non-acquired OREO and other nonperforming assets



245



114



93



464



590


Total non-acquired nonperforming assets



47,274



36,846



22,180



42,864



23,902


Acquired

















Acquired nonaccrual loans and restructured loans on nonaccrual



59,554



61,866



63,526



59,267



56,718


Accruing loans past due 90 days or more



1,992



1,430



4,418



12,768



251


Acquired OREO and other nonperforming assets



922



2,234



1,577



3,118



2,875


Total acquired nonperforming assets



62,468



65,530



69,521



75,153



59,844


Total nonperforming assets


$

109,742


$

102,376


$

91,701


$

118,017


$

83,746


 



Three Months Ended




Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,




2022


2022


2022


2022


2021


ASSET QUALITY RATIOS:

















Allowance for credit losses as a percentage of loans



1.18 %



1.12 %



1.14 %



1.13 %



1.26 %


Allowance for credit losses as a percentage of loans, excluding PPP loans



1.18 %



1.14 %



1.15 %



1.14 %



1.27 %


Allowance for credit losses as a percentage of nonperforming loans



328.29 %



324.30 %



355.11 %



262.50 %



375.94 %


Net charge-offs (recoveries) as a percentage of average loans (annualized)



0.01 %



(0.02) %



0.03 %



0.04 %



0.02 %


Total nonperforming assets as a percentage of total assets



0.25 %



0.23 %



0.20 %



0.26 %



0.20 %


Nonperforming loans as a percentage of period end loans



0.36 %



0.35 %



0.32 %



0.43 %



0.34 %


 

Current Expected Credit Losses ("CECL")

Below is a table showing the roll forward of the ACL and UFC for the fourth quarter of 2022:



Allowance for Credit Losses ("ACL and UFC")




NonPCD ACL


PCD ACL


Total ACL


UFC


Ending balance 9/30/2022


$

270,919


$

53,479


$

324,398


$

52,991


Charge offs



(3,783)





(3,783)




Acquired charge offs



(331)



(553)



(884)




Recoveries



2,290





2,290




Acquired recoveries



827



677



1,504




Provision (recovery) for credit losses



39,684



(6,765)



32,919



14,224


Ending balance 12/31/2022


$

309,606


$

46,838


$

356,444


$

67,215
















Period end loans (includes PPP Loans)


$

28,748,131


$

1,429,731


$

30,177,862



N/A


Reserve to Loans (includes PPP Loans)



1.08 %



3.28 %



1.18 %



N/A


Period end loans (excludes PPP Loans)


$

28,738,027


$

1,429,731


$

30,167,758



N/A


Reserve to Loans (excludes PPP Loans)



1.08 %



3.28 %



1.18 %



N/A


Unfunded commitments (off balance sheet) *











$

10,173,471


Reserve to unfunded commitments (off balance sheet)












0.66 %


* Unfunded commitments exclude unconditionally cancelable commitments and letters of credit.

Conference Call

The Company will host a conference call to discuss its fourth quarter results at 10:00 a.m. Eastern Time on January 27, 2023.  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 040590.   Alternatively, individuals may listen to the live webcast of the presentation by visiting SouthStateBank.com.  An audio replay of the live webcast is expected to be available by the evening of January 27, 2023 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.  Although other companies may use calculation methods that differ from those used by SouthState for non-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 and shares in thousands, except per share data)


Three Months Ended


PRE-PROVISION NET REVENUE ("PPNR") (NON-GAAP)


Dec. 31, 2022



Sep. 30, 2022



Jun. 30, 2022



Mar. 31, 2022



Dec. 31, 2021


Net income (GAAP)


$

143,502



$

133,043



$

119,175



$

100,329



$

106,846


Provision (recovery) for credit losses



47,142




23,876




19,286




(8,449)




(9,157)


Tax provision



39,253




38,035




32,941




27,084




28,272


Merger and branch consolidation related expense



1,542




13,679




5,390




10,276




6,645


Securities gains






(30)










(2)


Pre-provision net revenue (PPNR) (Non-GAAP)


$

231,439



$

208,603



$

176,792



$

129,240



$

132,604























Average asset balance (GAAP)


$

44,429,894



$

44,985,713



$

45,576,742



$

42,907,268



$

41,223,712


PPNR ROAA



2.07

%



1.84

%



1.56

%



1.22

%



1.28

%






















   Diluted weighted-average common shares outstanding



76,327




76,182




76,094




72,111




70,290


PPNR per weighted-average common shares outstanding


$

3.03



$

2.74



$

2.32



$

1.79



$

1.89


 

(Dollars in thousands)


Three Months Ended


CORE NET INTEREST INCOME (NON-GAAP)


Dec. 31, 2022



Sep. 30, 2022



Jun. 30, 2022



Mar. 31, 2022



Dec. 31, 2021


Net interest income (GAAP) (8)


$

396,004



$

362,334



$

315,815



$

261,518



$

258,096


Less:





















Total accretion on acquired loans



7,350




9,550




12,770




6,741




7,707


Total deferred fees on PPP loans









8




983




5,655


Core net interest income (Non-GAAP)


$

388,654



$

352,784



$

303,037



$

253,794



$

244,734























NET INTEREST MARGIN ("NIM"), TAX EQUIVALENT (NON-GAAP)





















Net interest income (GAAP) (8)


$

396,004



$

362,334



$

315,815



$

261,518



$

258,096


Total average interest-earning assets (8)



39,655,736




40,451,174




40,899,365




38,564,661




36,895,644


NIM, non-tax equivalent (8)



3.96

%



3.55

%



3.10

%



2.75

%



2.78

%






















Tax equivalent adjustment (included in NIM, tax equivalent)



2,397




2,345




2,249




1,885




1,734


Net interest income, tax equivalent (Non-GAAP) (8)


$

398,401



$

364,679



$

318,064



$

263,403



$

259,830


NIM, tax equivalent (Non-GAAP) (8)



3.99

%



3.58

%



3.12

%



2.77

%



2.79

%

 

 



Three Months Ended



Twelve Months Ended


(Dollars in thousands, except per share data)


Dec. 31,



Sep. 30,



Jun. 30,



Mar. 31,



Dec. 31,



Dec. 31,



Dec. 31,


RECONCILIATION OF GAAP TO NON-GAAP


2022



2022



2022



2022



2021



2022



2021


Adjusted Net Income (non-GAAP) (2)





























Net income (GAAP)


$

143,502



$

133,043



$

119,175



$

100,329



$

106,846



$

496,049



$

475,543


Securities gains, net of tax






(24)










(2)




(24)




(81)


PCL - NonPCD loans and UFC, net of tax












13,492







13,492





Merger and branch consolidation related expense, net of tax



1,211




10,638




4,223




8,092




5,255




24,163




52,740


Extinguishment of debt cost, net of tax





















9,081


Adjusted net income (non-GAAP)


$

144,713



$

143,657



$

123,398



$

121,913



$

112,099



$

533,680



$

537,283































Adjusted Net Income per Common Share - Basic (2)





























Earnings per common share - Basic (GAAP)


$

1.90



$

1.76



$

1.58



$

1.40



$

1.53



$

6.65



$

6.76


Effect to adjust for securities gains






(0.00)










(0.00)




(0.00)




(0.00)


Effect to adjust for PCL - NonPCD loans and UFC, net of tax












0.19







0.19





Effect to adjust for merger and branch consolidation related expense, net of tax



0.01




0.14




0.06




0.12




0.08




0.32




0.74


Effect to adjust for extinguishment of debt cost





















0.13


Adjusted net income per common share - Basic (non-GAAP)


$

1.91



$

1.90



$

1.64



$

1.71



$

1.61



$

7.16



$

7.63































Adjusted Net Income per Common Share - Diluted (2)





























Earnings per common share - Diluted (GAAP)


$

1.88



$

1.75



$

1.57



$

1.39



$

1.52



$

6.60



$

6.71


Effect to adjust for securities gains






(0.00)










(0.00)




(0.00)




(0.00)


Effect to adjust for PCL - NonPCD loans and UFC, net of tax












0.19







0.18





Effect to adjust for merger and branch consolidation related expense, net of tax



0.02




0.14




0.05




0.11




0.07




0.32




0.74


Effect to adjust for extinguishment of debt cost





















0.13


Adjusted net income per common share - Diluted (non-GAAP)


$

1.90



$

1.89



$

1.62



$

1.69



$

1.59



$

7.10



$

7.58































Adjusted Return on Average Assets (2)





























Return on average assets (GAAP) (8)



1.28

%



1.17

%



1.05

%



0.95

%



1.03

%



1.12

%



1.19

%

Effect to adjust for securities gains



%



(0.00)

%



%



%



(0.00)

%



(0.00)

%



(0.00)

%

Effect to adjust for PCL - NonPCD loans and UFC, net of tax



%



%



%



0.13

%



%



0.03

%



%

Effect to adjust for merger and branch consolidation related expense, net of tax



0.01

%



0.10

%



0.04

%



0.07

%



0.05

%



0.05

%



0.14

%

Effect to adjust for extinguishment of debt cost



%



%



%



%



%



%



0.02

%

Adjusted return on average assets (non-GAAP) (8)



1.29

%



1.27

%



1.09

%



1.15

%



1.08

%



1.20

%



1.35

%






























Adjusted Return on Average Common Equity (2)





























Return on average common equity (GAAP)



11.41

%



10.31

%



9.36

%



8.24

%



8.84

%



9.84

%



10.01

%

Effect to adjust for securities gains



%



(0.00)

%



%



%



(0.00)

%



(0.00)

%



(0.00)

%

Effect to adjust for PCL - NonPCD loans and UFC, net of tax



%



%



%



1.11

%



%



0.27

%



%

Effect to adjust for merger and branch consolidation related expense, net of tax



0.09

%



0.82

%



0.33

%



0.66

%



0.44

%



0.48

%



1.11

%

Effect to adjust for extinguishment of debt cost



%



%



%



%



%



%



0.19

%

Adjusted return on average common equity (non-GAAP)



11.50

%



11.13

%



9.69

%



10.01

%



9.28

%



10.59

%



11.31

%






























Return on Average Common Tangible Equity (3)





























Return on average common equity (GAAP)



11.41

%



10.31

%



9.36

%



8.24

%



8.84

%



9.84

%



10.01

%

Effect to adjust for intangible assets



8.76

%



7.68

%



7.23

%



5.73

%



5.79

%



7.32

%



6.63

%

Return on average tangible equity (non-GAAP)



20.17

%



17.99

%



16.59

%



13.97

%



14.63

%



17.16

%



16.64

%






























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





























Return on average common equity (GAAP)



11.41

%



10.31

%



9.36

%



8.24

%



8.84

%



9.84

%



10.01

%

Effect to adjust for securities gains



%



(0.00)

%



%



%



(0.00)

%



(0.00)

%



(0.00)

%

Effect to adjust for PCL - NonPCD loans and UFC, net of tax



%



%



%



1.11

%