Southstate Bank Corporation · NYSE:SSB
Southstate Bank — South State — Q1 2015 Earnings Presentation
52 slides from Southstate Bank's earnings presentation, May 4, 2015
Slide 1: Investor Presentation First Quarter 2015
Investor Presentation First Quarter 2015
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements Statements included in this report 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 21E of the Securities Exchange Act of 1934.
Slide 3: South State Corporation: SSB
South State Corporation: SSB Assets - $8.0 Billion Largest Bank Holding Company Headquartered in South Carolina Loans - $5.7 Billion Deposits - $6.6 Billion GEORGIA Charlotte Wilmington Myrtle Beach Hilton Head Island Savannah Atlanta Florence Columbia Athens Gainesville Georgetown Charleston Greenv
Slide 4: Market Performance Since 2009
Market Performance Since 2009 Pricing as of 4/22/15 See endnotes (1) 0.0 50.0 100.0 150.0 200.0 250.0 300.0 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 SSB Total Return SSB KRX Carolina Peers Georgia Peers 175.1% 150.2% (17.3%) 82.9% 78.9%
Slide 5: How We Operate the Company
How We Operate the Company
Slide 6: Strategic Focus: Path to $5.00
Path to $5.00 Phase II - Efficiencies Focus on Organic Loan Growth M&A Strategy Strategic Focus
Slide 7: Banking Landscape
63 67 200 Banking Landscape 330 Banks across GA, NC, and SC Distribution of Banks 270 $500 mm $500mm - $1.0 bn $1.0 bn - $5.0 bn > $5 bn 6 24 30
Slide 8: 1st Quarter 2015 Highlights
Net Income of $23.9 million $0.99 per diluted share Return on Average Assets 1.23% Return on Average Tangible Equity 16.21% Cash dividend of $0.24 per common share 1st Quarter 2015 Highlights
Slide 9: 1st Quarter 2015 Highlights
1st Quarter 2015 Highlights Asset Quality improvement NPA’s 0.89% Net Charge-offs (Recoveries) -0.01% Acquired non-credit impaired Charge-offs 0.56% Strong Organic Growth Loans: 13.7% linked quarter Non-Interest Bearing DDA: up 28.6% linked quarter
Slide 10: 1st Quarter 2015 Highlights
1st Quarter 2015 Highlights Margin expanded to 4.78% Non Interest Income : $ 26.5 million Deposit Accounts $ 15.7 Mortgage Banking $ 6.6 Wealth Management $ 4.9 Negative Accretion $ (3.2)
Slide 11: Average Interest Earning Assets
Average Interest Earning Assets Assets 12/31/2014 3/31/2015 Net Change Short-Term Investments $ 381.5 $ 371.2 $ ( 10.3) Investment Securities 819.6 815.3 ( 4.3) Loans - Acquired 2,298.5 2,193.8 (104.7) Loans - Non-Acquired 3,382.8 3,513.0 130.2 Total Loans $ 5,681.3 $ 5,706.8 $ 25.5 Loans Held for S
Slide 12: S$ SouTH STATE
S$ SouTH STATE CORPORATION
Slide 13: Branch Initiatives: Consolidation and Sale
CONSOLIDATION Announced consolidation of 14 branch and ATM locations Deposits $208 million Cost savings ~ $4.5 million (annualized) by 2016 One-time Costs $4.5 million Incurred in 2Q & 3Q 2015 Branch Initiatives SALE Branches Loris Little River Loans ~ $7.8 million Deposits ~ $32.0 million Deposit P
Slide 14: Rounding Out Our Footprint
Rounding Out Our Footprint Source: SNL Financial SSB Acquired BAC Branch Orangeburg Charlotte Florence Columbia Greenwood Greenville Savannah Charleston Myrtle Beach Wilmington Hilton Head SSB Acquired Branch Branch Closures Branch Sale
Slide 15: Branch Purchase Market Highlights
Branch Purchase Market Highlights Acquired 13 branches and 34 ATMs South Carolina 12 Georgia 1 Deposits $580 million Loans $3 million Customers ~ 86,000 Average branch size has ~$45 million in deposits Average branch age ~ 45 years Employees 96 Counties with Market Overlap: Florence 2 Branches Lexin
Slide 16: Pro Forma Deposit Portfolio
Pro Forma Deposit Portfolio South State Bank Acquired Branches Pro Forma Cost of Total Deposits: 0.12% Cost of Total Deposits: 0.10% Deposit Composition Amount % of Total Demand Deposits $1,757,302 26.5 % NOW Accounts 1,539,977 23.2 Money Market & Savings 2,146,084 32.4 Retail Time Deposits 1,190,29
Slide 17: Transaction Rationale
Transaction Rationale Entrance into 6 new markets Meaningful in-market expansion Strong core deposit funding Strategic Rationale Immediately EPS accretive Low cost funding Mid-single digit accretive in 2016 Internal Rate of Return ~ 30% Attractive Financial Returns Maintain strong pro forma capital
Slide 18: Transaction Terms
Transaction Terms 13 Branches & 34 ATMs - 12 in Central South Carolina - 1 in Northeast Georgia Branch Purchase $580 million (estimated) Deposits Acquired $7 million (estimated) Fixed Assets $3 million (estimated) Loans Acquired 5.5% Deposit Premium $31.6 million (estimated) Deal Value Customary reg
Slide 19: ‘S SOUTH STATE
‘S SOUTH STATE CORPORATION
Slide 20: Capital
Capital See endnotes (2) * 3/31/2015 Estimate * * *
Slide 21: S$ SouTH STATE
S$ SouTH STATE CORPORATION
Slide 22: Operating Earnings Per Share
Operating Earnings Per Share See Endnotes (3)
Slide 23: Net Interest Margin
Net Interest Margin See endnotes (4)
Slide 24: Efficiency Ratio
Efficiency Ratio See endnotes (5)
Slide 25: Common Stock Dividends
Common Stock Dividends See endnotes (6) $0.47
Slide 26: S$ SouTH STATE
S$ SouTH STATE CORPORATION
Slide 27: Loan Portfolio Mix
Loan Portfolio Mix In Millions $2,617 $2,841 $3,613 $5,687 $5,715 See endnotes (7) $5,705
Slide 28: Total Loans by Type
Total Loans by Type Linked Quarter Organic Growth Comml Non Owner Occ: 37% Consumer Owner Occ: 34% Comml Owner Occ: 8% Other Inc Producing: 9% Consumer Non RE: 13%
Slide 29: Total Loans by Market
Total Loans by Market Linked Quarter Organic Growth Charleston 38% Charlotte 17% Georgia 19% Upstate SC 13%
Slide 30: Wealth Management
Wealth Management Solid Foundation 850+ Relationships 19,000+ Retail Investment A/C 90+ Team members Focus Drive organic sales Leverage our banking partners Seek operational efficiencies Active risk mitigation See endnotes (8) $4,008 $3,828 $3,406 $1,620 2015 2014 2013 2012 Assets Under Management (
Slide 31: Mortgage Banking
Solid Foundation Mortgage Market Share - #4 in SC Retail Mortgage: 66 originators Wholesale Mortgage: Focus in SC, NC, GA & southeast VA markets Portfolio Servicing: $2.4 Billion Best execution model to agencies and investors Mortgage Focus Streamline mortgage channels into one operating system Plat
Slide 32: S$ SouTH StaTE
S$ SouTH StaTE CORPORATION
Slide 33: Index: Supplemental Information
Index Supplemental Information Loan Portfolio Mix .. 34 Investment Portfolio 35 Revenue Diversification .36 M&A/Asset Growth 37 Market Demographics .....38 Analyst Recommendations ......50
Slide 34: Loan Portfolio Mix - 1Q 2015
Loan Portfolio Mix - 1Q 2015 $186 $1,932 $5,705 In Millions
Slide 35: Bank Investment Portfolio Mix
Bank Investment Portfolio Mix Bank Fixed Income Portfolio (AFS & HTM) Tax Equivalent Yield Weighted Average Life Modified Duration Total Carrying Value 2.61% 3.18 2.93 $ 814,802 See endnotes (9)
Slide 36: Revenue Diversification
Revenue Diversification 2015 YTD Fee Income (12) $29.7 Million See endnotes (10) 1Q14 2Q14 3Q14 4Q14 1Q15 80% 77% 77% 76% 75% 20% 23% 23% 24% 25% Net Interest Income Non Interest Income
Slide 37: M&A History and Asset Growth
M&A History and Asset Growth 2009 2010 2011 2012 $2.7 bn $3.6 bn $3.9 bn $5.1 bn 2013 $7.9 bn Community Bank & Trust $1.0 Bn Jan 29, 2010 Habersham Bank $360 MM Feb 18, 2011 BankMeridian, National Association $234 MM Jul 29, 2011 Peoples Bancorporation $546 MM Apr 24,2012 Savannah Bancorp, Inc $950
Slide 38: Market Share
Market Share See endnotes (11)
Slide 39: South Carolina Market Share
1 Wells Fargo 19.8 2 Bank of America 13.7 3 BB&T 10.4 4 First Citizens 9.4 5 South State Bank 6.9 Total $69.9 Billion 100% See endnotes (11) South Carolina Market Share - #1 in Tire Manufacturing - Successful implementation of Inland Port - 1,200+ International firms have facilities in SC
Slide 40: South Carolina Market Share: Charleston, Columbia, Greenville
South Carolina Market Share Charleston MSA Columbia MSA Greenville MSA 1 Wells Fargo 23.0 2 South State Bank 15.2 3 Bank of America 13.8 4 First Citizens 6.7 5 Synovus 6.1 Total $10.3 Billion 100% 1 Wells Fargo 30.6 2 Bank of America 24.8 3 BB&T 13.3 4 First Citizens 10.0 8 South State Bank 2.3 Tota
Slide 41: South Carolina Market Share: Hilton Head, Orangeburg, Georgetown
South Carolina Market Share Hilton Head MSA Orangeburg MSA Georgetown MSA 1 Wells Fargo 18.2 2 South State Bank 16.5 3 Bank of America 10.2 4 CoastalSouth 9.1 5 BB&T 7.4 Total $3.5 Billion 100% 1 South State Bank 38.6 2 First Citizens 25.3 3 Bank of America 10.6 4 FMB of SC 8.8 5 BB&T 7.2 Total $900
Slide 42: Georgia Market Share
Georgia Market Share Savannah MSA Cornelia MSA Athens-Gainesville MSA 1 South State Bank 43.3 2 United Community 22.1 3 Southern B&T 11.4 4 Regions Bank 10.3 5 Certus Bank 6.9 Total $767million 100% See endnotes (11) 1 SunTrust 22.8 2 Wells Fargo 21.5 3 Bank of America 12.5 4 South State Bank 9.5 5
Slide 43: North Carolina Market Share
North Carolina Market Share Charlotte MSA Wilmington MSA 1 Wells Fargo 22.3 2 BB&T 16.4 3 First Citizens 13.8 4 Live Oak Bank 9.6 8 South State Bank 3.2 Total $4.4 Billion 100% See endnotes (11) 1 Bank of America 71.8 2 Wells Fargo 18.8 3 BB&T 2.8 4 Fifth Third 1.0 South State Bank 0.3 Total $201 Bi
Slide 44: Demographic Highlights
Demographic Highlights See endnotes (12) 3.52% 5.00% 4.93% 4.51% US SC NC GA State Population Growth - Projected Change 2015 - 2020 3.52% 5.04% 5.31% 6.22% 6.59% 6.84% 8.21% 8.40% 8.89% US Greenville Columbia Savannah Charlotte Wilmington Hilton Head Charleston Myrtle Beach MSA Population Growth - P
Slide 45: Select MSA Markets
Select MSA Markets Market Rank Deposit Market Share (%) Projected Population Change 2015-2020 (%) Orangeburg, SC 1 38.6 (0.35) Charleston-North Charleston, SC 2 15.2 8.40 Hilton Head Island-Bluffton-Beaufort, SC 2 16.5 8.21 Savannah, GA 4 9.6 6.22 Greenville-Anderson-Mauldin, SC 6 5.4 5.04 Myrtle Be
Slide 46: Economic Highlights
Economic Highlights Clemson 3.52% 5.97% US South State MSA's Population Growth Projected Change 2015 - 2020
Slide 47: Unemployment Data
Unemployment Data 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 National North Carolina South Carolina Georgia 6.3% 6.7 % 5.4 % 5.5 %
Slide 48: South Carolina Real Estate Markets
South Carolina Real Estate Markets Number of Residential Homes, Condos & Villas Sold Median Price of Residential Homes (in Thousands) Average Days on the Market (DOM) Mar-14 YTD Mar-15 YTD % Change Mar-14 YTD Mar-15 YTD % Change Mar-14 YTD Mar-15 YTD % Change Beaufort 305 325 6.6 % $173 $189 9.2% 17
Slide 49: Median Household Income
Median Household Income See endnotes (15)
Slide 50: Analyst Recommendations
Analyst Recommendations Analyst Fourth Quarter 2014 Recommendation Keefe, Bruyette & Woods OUTPERFORM BB&T Capital Markets BUY Sterne Agee BUY SunTrust Robinson Humphrey BUY Wunderlich Securities BUY FIG Partners MARKET-PERFORM Sandler O’Neill HOLD
Slide 51: Investor Contacts
Investor Contacts 520 Gervais Street Columbia, South Carolina 29201 800-277-2175 www.southstatebank.com Robert R. Hill, Jr. Chief Executive Officer John C. Pollok Senior Executive Vice President and Chief Financial Officer / Chief Operating Officer
Slide 52: Endnotes
Endnotes Source: SNL Financial. Pricing performance show from 12/31/09 -4/22/15. Peers include all major exchange traded banks headquartered in North or South Carolina with total assets between $500 million and $10.0 billion. Georgia peers include all major exchange traded banks headquartered in Geo