SouthState Corporation (“SouthState” or the “Company”) (NYSE: SSB) today released its unaudited results of operations and other financial information for the three-month and twelve-month periods ended December 31, 2024.
https://mma.prnewswire.com/media/2605100/SSB_Q4_2024_Earnings_Call.pdf?p=pdfthumbnail
“SouthState finished strong in 2024. We produced steady growth in loans and deposits and had a nice uptick in net interest margin and fees. The result was net income of $144 million and a 9% increase in PPNR over the third quarter, driven by 6% revenue growth”, commented John C. Corbett, SouthState's Chief Executive Officer. “We were also pleased to receive prompt regulatory approval of the IBTX acquisition, which allowed us to close ahead of schedule on January 1. With Independent Financial, our momentum carries forward into 2025. We will continue working to build a high-quality bank with scale in the fastest growing markets in the country.”
Highlights of the fourth quarter of 2024 include:
Returns
— Reported Diluted Earnings per Share (“EPS”) of $1.87; Adjusted Diluted EPS (Non-GAAP) of $1.93
— Net Income of $144.2 million; Adjusted Net Income (Non-GAAP) of $148.8 million
— Return on Average Common Equity of 9.7%; Return on Average Tangible Common Equity (Non-GAAP) of 15.1% and Adjusted Return on Average Tangible Common Equity(Non-GAAP) of 15.6%*
— Return on Average Assets (“ROAA”) of 1.23% and Adjusted ROAA (Non-GAAP) of 1.27%*
— Book Value per Share of $77.18; Tangible Book Value (“TBV”) per Share (Non-GAAP) of $51.11
Performance
— Net Interest Income of $370 million; Core Net Interest Income (excluding loan accretion) (Non-GAAP) of $367 million
— Net Interest Margin (“NIM”), non-tax equivalent and tax equivalent (Non-GAAP) of 3.48%
— Net charge-offs of $5.3 million, or 0.06% of average loans, annualized; $6.4 million of Provision for Credit Losses (“PCL”); total Allowance for Credit Losses (“ACL”) plus reserve for unfunded commitments of 1.51% of loans
— Noninterest Income of $81 million; Noninterest Income represented 0.69% of average assets for the fourth quarter of 2024*
— Efficiency Ratio of 56% and Adjusted Efficiency Ratio (Non-GAAP) of 54%
â^- Annualized percentages
Balance Sheet
— Loans increased $355 million, or 4% annualized, led by increases in commercial and industrial, and commercial owner occupied real estate; ending loan to deposit ratio of 89%
— Deposits increased $423 million, or 4% annualized
— Total loan yield of 5.76%, down 0.10% from prior quarter
— Total deposit cost of 1.75%, down 0.15% from prior quarter
— Strong capital position with Tangible Common Equity, Total Risk-Based Capital, Tier 1 Leverage, and Tier 1 Common Equity ratios of 8.8%, 15.0%, 10.0%, and 12.6%, respectively†
Mergers & Acquisitions
— Completed previously announced merger of Independent Bank Group, Inc. (“Independent”) on January 1, 2025
Other Subsequent Events
— SouthState Bank, N.A. (the “Bank”) entered into an agreement on January 8, 2025 with entities affiliated with Blue Owl Real Estate Capital, LLC to sell branch properties and enter into triple net lease agreements with such purchasers on those same properties effective upon the closing of the sale
— The Board of Directors of the Company declared a quarterly cash dividend on its common stock of $0.54 per share, payable on February 14, 2025 to shareholders of record as of February 7, 2025
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 2024 2024 2024 2024 2023 2024 2023Interest IncomeLoans, including fees (1) $ 489,709 $ 494,082 $ 478,360 $ 463,688 $ 459,880 $ 1,925,838 $ 1,716,405Investment securities, trading securities, federal funds sold and securitiespurchased under agreements to resell 59,096 50,096 52,764 53,567 55,555 215,524 228,001Total interest income 548,805 544,178 531,124 517,255 515,435 2,141,362 1,944,406Interest ExpenseDeposits 168,263 177,919 165,481 160,162 149,584 671,825 440,257Federal funds purchased, securities sold under agreementsto repurchase, and other borrowings 10,763 14,779 15,384 13,157 11,620 54,083 51,541Total interest expense 179,026 192,698 180,865 173,319 161,204 725,908 491,798Net Interest Income 369,779 351,480 350,259 343,936 354,231 1,415,454 1,452,608Provision (recovery) for credit losses 6,371 (6,971) 3,889 12,686 9,893 15,975 114,082Net Interest Income after Provision (Recovery) for Credit Losses 363,408 358,451 346,370 331,250 344,338 1,399,479 1,338,526Noninterest Income 80,545 74,934 75,225 71,558 65,489 302,262 286,906Noninterest ExpenseOperating expense 250,699 243,543 242,343 240,923 245,774 977,508 955,727Merger, branch consolidation, severance related and other expense (8) 6,531 3,304 5,785 4,513 1,778 20,133 13,162FDIC special assessment (621) – 619 3,854 25,691 3,852 25,691Total noninterest expense 256,609 246,847 248,747 249,290 273,243 1,001,493 994,580Income before Income Tax Provision 187,344 186,538 172,848 153,518 136,584 700,248 630,852Income tax provision 43,166 43,359 40,478 38,462 29,793 165,465 136,544Net Income $ 144,178 $ 143,179 $ 132,370 $ 115,056 $ 106,791 $ 534,783 $ 494,308Adjusted Net Income (non-GAAP) (2)Net Income (GAAP) $ 144,178 $ 143,179 $ 132,370 $ 115,056 $ 106,791 $ 534,783 $ 494,308Securities losses (gains), net of tax 38 – – – 2 38 (33)Merger, branch consolidation, severance related and other expense, net of tax (8) 5,026 2,536 4,430 3,382 1,391 15,374 10,291FDIC special assessment, net of tax (478) – 474 2,888 20,087 2,884 20,087Adjusted Net Income (non-GAAP) $ 148,764 $ 145,715 $ 137,274 $ 121,326 $ 128,271 $ 553,079 $ 524,653Basic earnings per common share $ 1.89 $ 1.88 $ 1.74 $ 1.51 $ 1.40 $ 7.01 $ 6.50Diluted earnings per common share $ 1.87 $ 1.86 $ 1.73 $ 1.50 $ 1.39 $ 6.97 $ 6.46Adjusted net income per common share – Basic (non-GAAP) (2) $ 1.95 $ 1.91 $ 1.80 $ 1.59 $ 1.69 $ 7.25 $ 6.90Adjusted net income per common share – Diluted (non-GAAP) (2) $ 1.93 $ 1.90 $ 1.79 $ 1.58 $ 1.67 $ 7.21 $ 6.86Dividends per common share $ 0.54 $ 0.54 $ 0.52 $ 0.52 $ 0.52 $ 2.12 $ 2.04Basic weighted-average common shares outstanding 76,360,935 76,299,069 76,251,401 76,301,411 76,100,187 76,303,351 76,050,730Diluted weighted-average common shares outstanding 76,957,882 76,805,436 76,607,281 76,660,081 76,634,100 76,762,354 76,479,557Effective tax rate 23.04% 23.24% 23.42% 25.05% 21.81% 23.63% 21.64%
Performance and Capital Ratios
Three Months Ended Twelve Months Ended Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31, 2024 2024 2024 2024 2023 2024 2023PERFORMANCE RATIOSReturn on average assets (annualized) 1.23 % 1.25 % 1.17 % 1.03 % 0.94 % 1.17 % 1.11 %Adjusted return on average assets (annualized) (non-GAAP) (2) 1.27 % 1.27 % 1.22 % 1.08 % 1.13 % 1.21 % 1.17 %Return on average common equity (annualized) 9.72 % 9.91 % 9.58 % 8.36 % 7.99 % 9.41 % 9.37 %Adjusted return on average common equity (annualized) (non-GAAP) (2) 10.03 % 10.08 % 9.94 % 8.81 % 9.60 % 9.73 % 9.94 %Return on average tangible common equity (annualized) (non-GAAP) (3) 15.09 % 15.63 % 15.49 % 13.63 % 13.53 % 14.98 % 15.87 %Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) (3) 15.56 % 15.89 % 16.05 % 14.35 % 16.12 % 15.47 % 16.80 %Efficiency ratio (tax equivalent) 55.73 % 56.58 % 57.03 % 58.48 % 63.43 % 56.93 % 55.50 %Adjusted efficiency ratio (non-GAAP) (4) 54.42 % 55.80 % 55.52 % 56.47 % 56.89 % 55.53 % 53.27 %Dividend payout ratio (5) 28.58 % 28.76 % 29.93 % 34.42 % 37.01 % 30.22 % 31.34 %Book value per common share $ 77.18 $ 77.42 $ 74.16 $ 72.82 $ 72.78Tangible book value per common share (non-GAAP) (3) $ 51.11 $ 51.26 $ 47.90 $ 46.48 $ 46.32CAPITAL RATIOSEquity-to-assets 12.7 % 12.8 % 12.4 % 12.3 % 12.3 %Tangible equity-to-tangible assets (non-GAAP) (3) 8.8 % 8.9 % 8.4 % 8.2 % 8.2 %Tier 1 leverage (6) 10.0 % 10.0 % 9.7 % 9.6 % 9.4 %Tier 1 common equity (6) 12.6 % 12.4 % 12.1 % 11.9 % 11.8 %Tier 1 risk-based capital (6) 12.6 % 12.4 % 12.1 % 11.9 % 11.8 %Total risk-based capital (6) 15.0 % 14.7 % 14.4 % 14.4 % 14.1 %
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 2024 2024 2024 2024 2023AssetsCash and due from banks $ 525,506 $ 563,887 $ 507,425 $ 478,271 $ 510,922Federal funds sold and interest-earning deposits with banks 866,561 648,792 609,741 731,186 487,955Cash and cash equivalents 1,392,067 1,212,679 1,117,166 1,209,457 998,877Trading securities, at fair value 102,932 87,103 92,161 66,188 31,321Investment securities:Securities held to maturity 2,254,670 2,301,307 2,348,528 2,446,589 2,487,440Securities available for sale, at fair value 4,320,593 4,564,363 4,498,264 4,598,400 4,784,388Other investments 223,613 211,458 201,516 187,285 192,043Total investment securities 6,798,876 7,077,128 7,048,308 7,232,274 7,463,871Loans held for sale 279,426 287,043 100,007 56,553 50,888Loans:Purchased credit deteriorated 862,155 913,342 957,255 1,031,283 1,108,813Purchased non-credit deteriorated 3,635,782 3,959,028 4,253,323 4,534,583 4,796,913Non-acquired 29,404,990 28,675,822 28,023,986 27,101,444 26,482,763Less allowance for credit losses (465,280) (467,981) (472,298) (469,654) (456,573)Loans, net 33,437,647 33,080,211 32,762,266 32,197,656 31,931,916Premises and equipment, net 502,559 507,452 517,382 512,635 519,197Bank owned life insurance 1,013,209 1,007,275 1,001,998 997,562 991,454Mortgage servicing rights 89,795 83,512 88,904 87,970 85,164Core deposit and other intangibles 66,458 71,835 77,389 83,193 88,776Goodwill 1,923,106 1,923,106 1,923,106 1,923,106 1,923,106Other assets 775,129 745,303 765,283 778,244 817,454Total assets $ 46,381,204 $ 46,082,647 $ 45,493,970 $ 45,144,838 $ 44,902,024Liabilities and Shareholders' EquityDeposits:Noninterest-bearing $ 10,192,117 $ 10,376,531 $ 10,374,464 $ 10,546,410 $ 10,649,274Interest-bearing 27,868,749 27,261,664 26,723,938 26,632,024 26,399,635Total deposits 38,060,866 37,638,195 37,098,402 37,178,434 37,048,909Federal funds purchased and securitiessold under agreements to repurchase 514,912 538,322 542,403 554,691 489,185Other borrowings 391,534 691,626 691,719 391,812 491,904Reserve for unfunded commitments 45,327 41,515 50,248 53,229 56,303Other liabilities 1,478,150 1,268,409 1,460,795 1,419,663 1,282,625Total liabilities 40,490,789 40,178,067 39,843,567 39,597,829 39,368,926Shareholders' equity:Common stock – $2.50 par value; authorized 160,000,000 shares 190,805 190,674 190,489 190,443 190,055Surplus 4,259,722 4,249,672 4,238,192 4,230,345 4,240,413Retained earnings 2,046,809 1,943,874 1,841,933 1,749,215 1,685,166Accumulated other comprehensive loss (606,921) (479,640) (620,211) (622,994) (582,536)Total shareholders' equity 5,890,415 5,904,580 5,650,403 5,547,009 5,533,098Total liabilities and shareholders' equity $ 46,381,204 $ 46,082,647 $ 45,493,970 $ 45,144,838 $ 44,902,024Common shares issued and outstanding 76,322,206 76,269,577 76,195,723 76,177,163 76,022,039
Net Interest Income and Margin
Three Months Ended Dec. 31, 2024 Sep. 30, 2024 Dec. 31, 2023(Dollars in thousands) Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/YIELD ANALYSIS Balance Expense Rate Balance Expense Rate Balance Expense RateInterest-Earning Assets:Federal funds sold and interest-earning deposits with banks $ 1,308,313 $ 14,162 4.31% $ 559,942 $ 6,462 4.59% $ 814,244 $ 10,029 4.89%Investment securities 7,144,438 44,934 2.50% 7,163,934 43,634 2.42% 7,382,800 45,526 2.45%Loans held for sale 179,803 2,304 5.10% 112,429 2,694 9.53% 28,878 552 7.58%Total loans held for investment 33,662,822 487,405 5.76% 33,387,675 491,388 5.86% 32,239,455 459,328 5.65%Total interest-earning assets 42,295,376 548,805 5.16% 41,223,980 544,178 5.25% 40,465,377 515,435 5.05%Noninterest-earning assets 4,214,390 4,373,250 4,572,255Total Assets $ 46,509,766 $ 45,597,230 $ 45,037,632Interest-Bearing Liabilities (“IBL”):Transaction and money market accounts $ 20,823,079 $ 121,239 2.32% $ 19,936,966 $ 129,613 2.59% $ 18,957,647 $ 107,994 2.26%Savings deposits 2,427,760 1,741 0.29% 2,453,886 1,893 0.31% 2,680,065 1,888 0.28%Certificates and other time deposits 4,517,047 45,283 3.99% 4,489,441 46,413 4.11% 4,294,555 39,702 3.67%Federal funds purchased 292,626 3,479 4.73% 304,582 4,178 5.46% 256,672 3,453 5.34%Repurchase agreements 261,373 1,382 2.10% 258,166 1,519 2.34% 265,839 1,458 2.18%Other borrowings 394,853 5,902 5.95% 611,247 9,082 5.91% 438,701 6,709 6.07%Total interest-bearing liabilities 28,716,738 179,026 2.48% 28,054,288 192,698 2.73% 26,893,479 161,204 2.38%Noninterest-bearing deposits 10,561,382 10,412,512 11,059,306Other noninterest-bearing liabilities 1,330,020 1,382,260 1,784,956Shareholders' equity 5,901,626 5,748,170 5,299,891Total Non-IBL and shareholders' equity 17,793,028 17,542,942 18,144,153Total Liabilities and Shareholders' Equity $ 46,509,766 $ 45,597,230 $ 45,037,632Net Interest Income and Margin (Non-Tax Equivalent) $ 369,779 3.48% $ 351,480 3.39% $ 354,231 3.47%Net Interest Margin (Tax Equivalent) (non-GAAP) 3.48% 3.40% 3.48%Total Deposit Cost (without Debt and Other Borrowings) 1.75% 1.90% 1.60%Overall Cost of Funds (including Demand Deposits) 1.81% 1.99% 1.69%Total Accretion on Acquired Loans (1) $ 2,887 $ 2,858 $ 3,870Tax Equivalent (“TE”) Adjustment $ 547 $ 486 $ 659
The remaining loan discount on acquired loans to be accreted into loan interest income totals $36.9 million as of December 31, 2024.
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) 2024 2024 2024 2024 2023 2024 2023Noninterest Income:Fees on deposit accounts $ 35,121 $ 33,986 $ 33,842 $ 33,145 $ 33,225 $ 136,094 $ 129,015Mortgage banking income 4,777 3,189 5,912 6,169 2,191 20,047 13,355Trust and investment services income 12,414 11,578 11,091 10,391 10,131 45,474 39,447Securities (losses) gains, net (50) – – – (2) (50) 43Correspondent banking and capital markets income 20,905 17,381 16,267 14,591 16,081 69,144 90,579Expense on centrally-cleared variation margin (7,350) (7,488) (11,407) (10,280) (12,677) (36,525) (41,478)Total correspondent banking and capital markets income 13,555 9,893 4,860 4,311 3,404 32,619 49,101Bank owned life insurance income 7,944 8,276 7,372 6,892 6,567 30,484 26,690Other 6,784 8,012 12,148 10,650 9,973 37,594 29,255Total Noninterest Income $ 80,545 $ 74,934 $ 75,225 $ 71,558 $ 65,489 $ 302,262 $ 286,906Noninterest Expense:Salaries and employee benefits $ 154,116 $ 150,865 $ 151,435 $ 150,453 $ 145,850 $ 606,869 $ 583,398Occupancy expense 22,831 22,242 22,453 22,577 22,715 90,103 88,695Information services expense 23,416 23,280 23,144 22,353 22,000 92,193 84,472OREO and loan related expense 1,416 1,358 1,307 606 948 4,687 1,716Business development and staff related 7,450 5,797 6,220 5,799 7,492 25,266 26,116Amortization of intangibles 5,326 5,327 5,744 5,998 6,615 22,395 27,558Professional fees 5,366 4,017 3,906 3,115 7,025 16,404 18,547Supplies and printing expense 2,729 2,762 2,526 2,540 2,761 10,558 10,578FDIC assessment and other regulatory charges 7,365 7,482 7,771 8,534 8,325 31,152 33,070Advertising and marketing 2,269 2,296 2,594 1,984 2,826 9,143 9,474Other operating expenses 18,415 18,117 15,243 16,964 19,217 68,738 72,103Merger, branch consolidation, severance related and other expense (8) 6,531 3,304 5,785 4,513 1,778 20,133 13,162FDIC special assessment (621) – 619 3,854 25,691 3,852 25,691Total Noninterest Expense $ 256,609 $ 246,847 $ 248,747 $ 249,290 $ 273,243 $ 1,001,493 $ 994,580
Loans and Deposits
The following table presents a summary of the loan portfolio by type:
Ending Balance(Dollars in thousands) Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,LOAN PORTFOLIO (7) 2024 2024 2024 2024 2023Construction and land development * † $ 2,184,327 $ 2,458,151 $ 2,592,307 $ 2,437,343 $ 2,923,514Investor commercial real estate* 9,991,482 9,856,709 9,731,773 9,752,529 9,227,968Commercial owner occupied real estate 5,716,376 5,544,716 5,522,978 5,511,855 5,497,671Commercial and industrial 6,222,876 5,931,187 5,769,838 5,544,131 5,504,539Consumer real estate * 8,714,969 8,649,714 8,440,724 8,223,066 7,993,450Consumer/other 1,072,897 1,107,715 1,176,944 1,198,386 1,241,347Total Loans $ 33,902,927 $ 33,548,192 $ 33,234,564 $ 32,667,310 $ 32,388,489
* 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 $386.2 million, $429.8 million, $544.2 million, $623.9 million, and $715.5 million for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively.
Ending Balance(Dollars in thousands) Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,DEPOSITS 2024 2024 2024 2024 2023Noninterest-bearing checking $ 10,192,116 $ 10,376,531 $ 10,374,464 $ 10,546,410 $ 10,649,274Interest-bearing checking 8,232,322 7,550,392 7,547,406 7,898,835 7,978,799Savings 2,414,172 2,442,584 2,475,130 2,557,203 2,632,212Money market 13,056,534 12,614,046 12,122,336 11,895,385 11,538,671Time deposits 4,165,722 4,654,642 4,579,066 4,280,601 4,249,953Total Deposits $ 38,060,866 $ 37,638,195 $ 37,098,402 $ 37,178,434 $ 37,048,909Core Deposits (excludes Time Deposits) $ 33,895,144 $ 32,983,553 $ 32,519,336 $ 32,897,833 $ 32,798,956
Asset Quality
Ending Balance Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,(Dollars in thousands) 2024 2024 2024 2024 2023NONPERFORMING ASSETS:Non-acquiredNon-acquired nonaccrual loans and restructured loans on nonaccrual $ 141,982 $ 111,240 $ 110,774 $ 106,189 $ 110,467Accruing loans past due 90 days or more 3,293 6,890 5,843 2,497 11,305Non-acquired OREO and other nonperforming assets 1,182 1,217 2,876 1,589 711Total non-acquired nonperforming assets 146,457 119,347 119,493 110,275 122,483AcquiredAcquired nonaccrual loans and restructured loans on nonaccrual 65,314 70,731 78,287 63,451 59,755Accruing loans past due 90 days or more – 389 916 135 1,174Acquired OREO and other nonperforming assets 1,583 493 598 655 712Total acquired nonperforming assets 66,897 71,613 79,801 64,241 61,641Total nonperforming assets $ 213,354 $ 190,960 $ 199,294 $ 174,516 $ 184,124
Three Months Ended Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, 2024 2024 2024 2024 2023ASSET QUALITY RATIOS (7):Allowance for credit losses as a percentage of loans 1.37% 1.39% 1.42% 1.44% 1.41%Allowance for credit losses, including reserve for unfunded commitments, as a percentage of loans 1.51% 1.52% 1.57% 1.60% 1.58%Allowance for credit losses as a percentage of nonperforming loans 220.94% 247.28% 241.19% 272.62% 249.90%Net charge-offs as a percentage of average loans (annualized) 0.06% 0.07% 0.05% 0.03% 0.09%Total nonperforming assets as a percentage of total assets 0.46% 0.41% 0.44% 0.39% 0.41%Nonperforming loans as a percentage of period end loans 0.62% 0.56% 0.59% 0.53% 0.56%
Current Expected Credit Losses (“CECL”)
Below is a table showing the roll forward of the ACL and UFC for the fourth quarter of 2024:
Allowance for Credit Losses (“ACL and UFC”)(Dollars in thousands) NonPCD ACL PCD ACL Total ACL UFCEnding balance 9/30/2024 $ 444,622 $ 23,359 $ 467,981 $ 41,515Charge offs (8,407) – (8,407) -Acquired charge offs (173) (1,357) (1,530) -Recoveries 2,140 – 2,140 -Acquired recoveries 1,759 778 2,537 -Provision (recovery) for credit losses 5,018 (2,459) 2,559 3,812Ending balance 12/31/2024 $ 444,959 $ 20,321 $ 465,280 $ 45,327Period end loans $ 33,040,772 $ 862,155 $ 33,902,927 N/AAllowance for Credit Losses to Loans 1.35% 2.36% 1.37% N/AUnfunded commitments (off balance sheet) * $ 7,780,323Reserve to unfunded commitments (off balance sheet) 0.58%
*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 9:00 a.m. Eastern Time on January 24, 2025. Callers wishing to participate may call toll-free by dialing (888) 350-3899 within the US and (646) 960-0343 for all other locations. The numbers for international participants are listed at https://events.q4irportal.com/custom/access/2324/. The conference ID number is 4200408. 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 24, 2025 on the Investor Relations section of SouthStateBank.com.
SouthState is a financial services company headquartered in Winter Haven, Florida. The Bank, 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, Virginia, Texas and Colorado. The Bank also serves clients coast to coast through its correspondent banking division. Additional information is available atSouthStateBank.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 EndedPRE-PROVISION NET REVENUE (“PPNR”) (NON-GAAP) Dec. 31, 2024 Sep. 30, 2024 Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023Net income (GAAP) $ 144,178 $ 143,179 $ 132,370 $ 115,056 $ 106,791Provision (recovery) for credit losses 6,371 (6,971) 3,889 12,686 9,893Tax provision 43,166 43,359 40,478 38,462 29,793Merger, branch consolidation, severance related and other expense (8) 6,531 3,304 5,785 4,513 1,778FDIC special assessment (621) – 619 3,854 25,691Securities losses 50 – – – 2Pre-provision net revenue (PPNR) (Non-GAAP) $ 199,675 $ 182,871 $ 183,141 $ 174,571 $ 173,948(Dollars in thousands) Three Months EndedCORE NET INTEREST INCOME (NON-GAAP) Dec. 31, 2024 Sep. 30, 2024 Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023Net interest income (GAAP) $ 369,779 $ 351,480 $ 350,259 $ 343,936 $ 354,231Less:Total accretion on acquired loans 2,887 2,858 4,386 4,287 3,870Core net interest income (Non-GAAP) $ 366,892 $ 348,622 $ 345,873 $ 339,649 $ 350,361NET INTEREST MARGIN (“NIM”), TE (NON-GAAP)Net interest income (GAAP) $ 369,779 $ 351,480 $ 350,259 $ 343,936 $ 354,231Total average interest-earning assets 42,295,376 41,223,980 41,011,662 40,657,176 40,465,377NIM, non-tax equivalent 3.48 % 3.39 % 3.43 % 3.40 % 3.47 %Tax equivalent adjustment (included in NIM, TE) 547 486 631 528 659Net interest income, tax equivalent (Non-GAAP) $ 370,326 $ 351,966 $ 350,890 $ 344,464 $ 354,890NIM, TE (Non-GAAP) 3.48 % 3.40 % 3.44 % 3.41 % 3.48 %
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 2024 2024 2024 2024 2023 2024 2023Adjusted Net Income (non-GAAP) (2)Net income (GAAP) $ 144,178 $ 143,179 $ 132,370 $ 115,056 $ 106,791 $ 534,783 $ 494,308Securities losses (gains), net of tax 38 – – – 2 38 (33)Merger, branch consolidation, severance related and other expense, net of tax (8) 5,026 2,536 4,430 3,382 1,391 15,374 10,291FDIC special assessment, net of tax (478) – 474 2,888 20,087 2,884 20,087Adjusted net income (non-GAAP) $ 148,764 $ 145,715 $ 137,274 $ 121,326 $ 128,271 $ 553,079 $ 524,653Adjusted Net Income per Common Share – Basic (2)Earnings per common share – Basic (GAAP) $ 1.89 $ 1.88 $ 1.74 $ 1.51 $ 1.40 $ 7.01 $ 6.50Effect to adjust for securities losses (gains), net of tax 0.00 – – – 0.00 0.00 (0.00)Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8) 0.07 0.03 0.05 0.04 0.03 0.20 0.14Effect to adjust for FDIC special assessment, net of tax (0.01) – 0.01 0.04 0.26 0.04 0.26Adjusted net income per common share – Basic (non-GAAP) $ 1.95 $ 1.91 $ 1.80 $ 1.59 $ 1.69 $ 7.25 $ 6.90Adjusted Net Income per Common Share – Diluted (2)Earnings per common share – Diluted (GAAP) $ 1.87 $ 1.86 $ 1.73 $ 1.50 $ 1.39 $ 6.97 $ 6.46Effect to adjust for securities losses (gains), net of tax 0.00 – – – 0.00 0.00 (0.00)Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8) 0.07 0.04 0.05 0.04 0.02 0.21 0.13Effect to adjust for FDIC special assessment, net of tax (0.01) – 0.01 0.04 0.26 0.04 0.26Adjusted net income per common share – Diluted (non-GAAP) $ 1.93 $ 1.90 $ 1.79 $ 1.58 $ 1.67 $ 7.21 $ 6.86Adjusted Return on Average Assets (2)Return on average assets (GAAP) 1.23 % 1.25 % 1.17 % 1.03 % 0.94 % 1.17 % 1.11 %Effect to adjust for securities losses (gains), net of tax 0.00 % – % – % – % 0.00 % 0.00 % (0.00) %Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8) 0.04 % 0.02 % 0.05 % 0.02 % 0.01 % 0.03 % 0.02 %Effect to adjust for FDIC special assessment, net of tax (0.00) % – % 0.00 % 0.03 % 0.18 % 0.01 % 0.04 %Adjusted return on average assets (non-GAAP) 1.27 % 1.27 % 1.22 % 1.08 % 1.13 % 1.21 % 1.17 %Adjusted Return on Average Common Equity (2)Return on average common equity (GAAP) 9.72 % 9.91 % 9.58 % 8.36 % 7.99 % 9.41 % 9.37 %Effect to adjust for securities losses (gains), net of tax 0.00 % – % – % – % 0.00 % 0.00 % (0.00) %Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8) 0.34 % 0.17 % 0.33 % 0.24 % 0.11 % 0.27 % 0.19 %Effect to adjust for FDIC special assessment, net of tax (0.03) % – % 0.03 % 0.21 % 1.50 % 0.05 % 0.38 %Adjusted return on average common equity (non-GAAP) 10.03 % 10.08 % 9.94 % 8.81 % 9.60 % 9.73 % 9.94 %Return on Average Common Tangible Equity (3)Return on average common equity (GAAP) 9.72 % 9.91 % 9.58 % 8.36 % 7.99 % 9.41 % 9.37 %Effect to adjust for intangible assets 5.37 % 5.72 % 5.91 % 5.27 % 5.54 % 5.57 % 6.50 %Return on average tangible equity (non-GAAP) 15.09 % 15.63 % 15.49 % 13.63 % 13.53 % 14.98 % 15.87 %Adjusted Return on Average Common Tangible Equity (2) (3)Return on average common equity (GAAP) 9.72 % 9.91 % 9.58 % 8.36 % 7.99 % 9.41 % 9.37 %Effect to adjust for securities losses (gains), net of tax 0.00 % – % – % – % 0.00 % 0.00 % (0.00) %Effect to adjust for merger, branch consolidation, severance related and other expense, net of tax (8) 0.34 % 0.18 % 0.32 % 0.25 % 0.10 % 0.27 % 0.20 %Effect to adjust for FDIC special assessment, net of tax (0.03) % – % 0.03 % 0.21 % 1.50 % 0.05 % 0.38 %Effect to adjust for intangible assets, net of tax 5.53 % 5.80 % 6.12 % 5.53 % 6.53 % 5.74 % 6.85 %Adjusted return on average common tangible equity (non-GAAP) 15.56 % 15.89 % 16.05 % 14.35 % 16.12 % 15.47 % 16.80 %Adjusted Efficiency Ratio (4)Efficiency ratio 55.73 % 56.58 % 57.03 % 58.48 % 63.43 % 56.93 % 55.50 %Effect to adjust for merger, branch consolidation, severance related and other expense (8) (1.31) % (0.78) % (1.36) % (1.08) % (0.43) % (1.14) % (0.76) %Effect to adjust for FDIC special assessment – % – % (0.15) % (0.93) % (6.11) % (0.26) % (1.47) %Adjusted efficiency ratio 54.42 % 55.80 % 55.52 % 56.47 % 56.89 % 55.53 % 53.27 %Tangible Book Value Per Common Share (3)Book value per common share (GAAP) $ 77.18 $ 77.42 $ 74.16 $ 72.82 $ 72.78Effect to adjust for intangible assets (26.07) (26.16) (26.26) (26.34) (26.46)Tangible book value per common share (non-GAAP) $ 51.11 $ 51.26 $ 47.90 $ 46.48 $ 46.32Tangible Equity-to-Tangible Assets (3)Equity-to-assets (GAAP) 12.70 % 12.81 % 12.42 % 12.29 % 12.32 %Effect to adjust for intangible assets (3.91) % (3.94) % (4.03) % (4.08) % (4.11) %Tangible equity-to-tangible assets (non-GAAP) 8.79 % 8.87 % 8.39 % 8.21 % 8.21 %
Footnotes to tables:(1) Includes loan accretion (interest) income related to the discount on acquired loans of $2.9 million, $2.9 million, $4.4 million, $4.3 million, and $3.9 million during the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively, and $14.4 million and $20.8 million during the twelve months ended December 31, 2024 and 2023, respectively.(2) Adjusted earnings, adjusted return on average assets, adjusted EPS, and adjusted return on average equity are non-GAAP measures and exclude the gains or losses on sales of securities, merger, branch consolidation, severance related and other expense, and FDIC special assessments. Management believes that non-GAAP adjusted measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. Adjusted earnings and the related adjusted return measures (non-GAAP) exclude the following from net income (GAAP) on an after-tax basis: (a) pre-tax merger, branch consolidation, severance related and other expense of $6.5 million, $3.3 million, $5.8 million, $4.5 million, and $1.8 million for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively, and $20.1 million and $13.2 million for the twelve months ended December 31, 2024 and 2023, respectively; (b) pre-tax net securities losses of $(50,000) and $(2,000) for the quarters ended December 31, 2024 and December 31, 2023, respectively, and pre-tax net losses of $(50,000) and pre-tax net gains of $43,000 for the twelve months ended December 31, 2024 and December 31, 2023, respectively; and (c) pre-tax FDIC special assessment of $(621,000), $619,000, $3.9 million, and $25.7 million for the quarters ended December 31, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively, and $3.8 million and $25.7 million for the twelve months ended December 31, 2024 and December 31, 2023, respectively.(3) The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets. The tangible returns on equity and common equity measures also add back the after-tax amortization of intangibles to GAAP basis net income. Management believes that these non-GAAP tangible measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. The sections titled “Reconciliation of GAAP to Non-GAAP” provide tables that reconcile GAAP measures to non-GAAP.(4) Adjusted efficiency ratio is calculated by taking the noninterest expense excluding merger, branch consolidation, severance related and other expense, FDIC special assessment and amortization of intangible assets, divided by net interest income and noninterest income excluding securities gains (losses). The pre-tax amortization expenses of intangible assets were $5.3 million, $5.3 million, $5.7 million, $6.0 million, and $6.6 million for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively, and $22.4 million and $27.6 million for the twelve months ended December 31, 2024, and 2023, 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) December 31, 2024 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 loans held for sale.(8) Includes pre-tax cyber incident costs of $329,000, $56,000, $3.5 million and $4.4 million for the quarters ended, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively, and $8.3 million for the twelve months ended December 31, 2024.
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 volatility risk, including inflation, potentially resulting in higher rates, deterioration in the credit markets, greater than expected noninterest expenses, excessive loan losses, or on the other hand lower rates, which also may have other negative consequences, which risks could be exacerbated by potential negative economic developments resulting from federal spending cuts and/or one or more federal budget-related impasses or actions; (2) risks related to the ability of the Company to pursue its strategic plans which depend upon certain growth goals in our lines of business; (3) risks related to the merger and integration of SouthState and Independent 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 Independent's operations into SouthState'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 Independent's businesses into SouthState's businesses, (iii) the amount of the costs, fees, expenses and charges related to the merger, and (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 ability to retain our culture and attract and retain qualified people as we grow and are located in new markets, and being able to offer competitive salaries and benefits, including flexibility of working remotely or in the office; (5) deposit attrition, client loss or revenue loss following completed mergers or acquisitions that may be greater than anticipated; (6) 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; (7) interest rate risk primarily resulting from our inability to effectively manage the risk, 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; (8) a decrease in our net interest income due to the interest rate environment; (9) liquidity risk affecting the Bank's ability to meet its obligations when they come due; (10) unexpected outflows of uninsured deposits may require us to sell investment securities at a loss; (11) potential deterioration in real estate values; (12) the loss of value of our investment portfolio could negatively impact market perceptions of us and could lead to deposit withdrawals; (13) price risk focusing on changes in market factors that may affect the value of traded instruments in “mark-to-market” portfolios; (14) transaction risk arising from problems with service or product delivery; (15) 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; (16) 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; (17) volatility in the financial services industry (including failures or rumors of failures of other depository institutions), along with actions taken by governmental agencies to address such turmoil, could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital; (18) the impact of competition with other financial institutions, including deposit and loan pricing pressures and the resulting impact, including as a result of compression to net interest margin; (19) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards, and contractual obligations regarding data privacy and cybersecurity; (20) 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 special FDIC assessments, the Consumer Financial Protection Bureau regulations or other guidance, and the possibility of changes in accounting standards, policies, principles and practices; (21) risks related to the legal, regulatory, and supervisory environment, including changes in financial services legislation, regulation, policies, or government officials or other personnel; (22) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (23) reputation risk that adversely affects earnings or capital arising from negative public opinion including the effects of social media on market perceptions of us and banks generally; (24) 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; (25) reputational and operational risks associated with environment, social and governance (ESG) matters, including the impact of changes in federal and state laws, regulations and guidance relating to climate change; (26) excessive loan losses; (27) reputational risk and possible higher than estimated reduced revenue from previously announced or proposed regulatory changes in the Bank's consumer programs and products; (28) operational, technological, cultural, regulatory, legal, credit and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash consideration; (29) catastrophic events such as hurricanes, tornados, earthquakes, floods or other natural or human disasters, including public health crises and infectious disease outbreaks, as well as any government actions in response to such events, 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) geopolitical risk from terrorist activities and armed conflicts that may result in economic and supply disruptions, and loss of market and consumer confidence; (31) the risks of fluctuations in market prices for SouthState common stock that may or may not reflect economic condition or performance of SouthState; (32) 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; (33) ownership dilution risk associated with potential acquisitions in which SouthState's stock may be issued as consideration for an acquired company; and (34) 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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