Southstate Bank Corporation · NYSE:SSB
Southstate Bank — South State — Q1 2020 Earnings Presentation
24 slides from Southstate Bank's earnings presentation, Apr 24, 2020
Slide 1: Earnings Call 1Q 2020
1 Earnings Call 1Q 2020 Friday, April 24, 2020
Slide 2: Forward Looking Statements
2 Forward Looking Statements 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
Slide 3: COVID-19 Response
3 COVID-19 Response Team • Expanded insurance coverage for testing and treatment of COVID-19 • Increased paid leave for team members unable to work due to lack of child or dependent care • Paid leave for team members under quarantine due to COVID-19 exposure • Additional compensation for team member
Slide 4: COVID-19 Impact
4 COVID-19 Impact Virginia Shelter in Place until 6/10 7 of 7 branches Open North Carolina Shelter in Place until 4/30 24 of 24 branches open Georgia Shelter in Place until 4/30 30 of 31 branches open South Carolina Shelter in Place until TBD 92 of 93 branches open • Branches limited to drive-throug
Slide 5: Merger Update
5 Merger Update Progress Next Steps 1/28-2/9 Town Halls with Executive Leadership reached ~50% of employees February Integration Kickoff and Team selection Weekly Integration Team Meetings Weekly Executive Team Meetings March All Regulatory Applications Filed 3/5/20 Core Provider Selected 3/5/20 Nam
Slide 6: Credit Update
Credit Update SS SouTH STATE
Slide 7: Payroll Protection Program (PPP)
7 Payroll Protection Program (PPP) • Extended Credit to Customers and Non-Customers • Secured funding for nearly 6,000 loans totaling ~$900 million1 • Funding through deposit growth and excess liquidity • Capacity to accommodate additional demand should program be expanded 1) As of 4/17/20
Slide 8: Loan Portfolio Summary
8 Loan Portfolio Summary • Actively managing exposures in Lodging, Restaurants, and Retail • Minimal exposure to Oil & Gas, Aviation, Steel or Mining • Shared National Credits and Leveraged Lending combined exposure <$100 million • Over 98% of loan portfolio is in footprint • Granular loan portfolio
Slide 9: Industry Exposure
9 Commercial 61% Consumer 12% Mortgage 27% Industry Exposure Total Portfolio $11.5 Billion Selected Industries (% of total loan portfolio) Lodging $590 5.1% Retail CRE 558 4.8 Restaurants 225 2.0 Dollars in millions. Data as of 3/31/20.
Slide 10: Loan Deferrals
10 Loan Deferrals(1) Commercial $2,044 Consumer $28 Mortgage $236 $4 $8 $146 $240 $144$131 $99 $242$220 $164$154$123$115 $89 $64 $51 $48 $32 $95 $39 $21 $35 $20 $12 $12 Daily Request Volume • $2.3 billion total loans under deferral • Proactive communication with customers • Commercial standard defer
Slide 11: Lines of Credit
11 Lines of Credit $1,193 $1,192 $1,200 $1,215 $1,220 $1,210 $1,208 $1,211 $1,203 $1,210 $1,204 $1,195 40.7% 40.7% 40.9% 41.4% 41.6% 41.4% 41.3% 41.5% 41.3% 41.6% 41.3% 41.0% 29-Feb 9-Mar 16-Mar 23-Mar 27-Mar 30-Mar 31-Mar 6-Apr 9-Apr 13-Apr 16-Apr 17-Apr Total Balance Utilization Dollars in million
Slide 12: Lodging Portfolio
12 Lodging Portfolio • Lodging is $590 million or 5.1% of the total loan portfolio • Average loan balance is $8.2 million • 100% of lodging portfolio under deferral • Weighted average LTV of 57% Marriott $234 Hilton $221 Other National Brand $72 Independent $63 Dollars in millions. Data as of 3/31/2
Slide 13: Restaurant Portfolio
13 Restaurant Portfolio Owner Occupied Real Estate $61 Non-Owner Occupied Real Estate $121 Non-Real Estate $43 • Restaurants are $225 million or 2.0% of the total loan portfolio • Average loan balance of real estate secured loans is $692,000 • 59% of restaurant portfolio is under deferral • Weighted
Slide 14: Retail Portfolio
14 Retail Portfolio Owner Occupied $122 Non-Owner Occupied $436 • Retail CRE is $558 million or 4.8% of the total loan portfolio • Average loan balance is $888,000 • 37% of Retail CRE portfolio is under deferral • Weighted average LTV of 59% Dollars in millions. Data as of 3/31/20.
Slide 15: 1Q20 Financial Highlights
15 1Q20 Financial Highlights
Slide 16: Highlights – Linked Quarter
16 Highlights – Linked Quarter 16 * Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, and securities gains or losses. 4Q19 1Q20 GAAP Net Income $49.1 $24.1 EPS $1.45 $0.71 Return on Average Assets 1.23% 0.60% Return on Average Tangibl
Slide 17: Net Interest Margin
17 Net Interest Margin 3.92% 3.82% 3.73% 3.64% 3.68% $114.1 $118.0 $119.3 $119.0 $117.0 $123.3 $127.2 $127.4 $126.5 $128.0 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Net Interest Margin NII - Excluding Accretion Net Interest Income Dollars in millions.
Slide 18: Average Interest Earning Assets
18 Average Interest Earning Assets Average Balance % of Earning Assets 4Q 2019 % of Earning Assets 1Q 2020 Net Change Short-Term Investments 4.1% 574 $ 3.8% 538 $ (36) $ Investment Securities 13.5% 1,889 14.4% 2,023 134 Loans - Acquired 15.8% 2,224 14.4% 2,016 (208) Loans - Non-Acquired 64.6% 9,073
Slide 19: Acquired Loans
19 Acquired Loans 14.4% 12.5% 10.3% 6.4% 7.4% 4% 8% 12% 16% 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20 Accretion / Total Interest Income Dollars in millions. Income Statement (Yields Annualized) Contractual Interest Accretion Total Income Contractual Yield Total Yield 1Q 2020 $24.9 $10.9 $35.8 4.9
Slide 20: Acquired Loan Portfolio
20 Acquired Loan Portfolio Dollars in millions. As of March 31, 2020 UPB Discount Carrying Value Percentage $344.1 ($32.8) $311.3 9.5% 1,652.0 (19.4) 1,632.6 1.2% $1,996.1 ($52.2) $1,943.9 2.6% (A) Represents a non-credit discount Credit Deteriorated Non-Credit Deteriorated Total Acquired Loans (A)
Slide 21: Noninterest Income
21 Noninterest Income 4Q 2019 1Q 2020 Net Change Fees on Deposit Accounts 19.2 $ 18.1 $ (1.1) $ Mortgage Banking 3.7 14.6 10.9 Wealth Management 6.9 7.4 0.5 Acquired Loan Recoveries 2.2 - (2.2) Other Income 4.3 4.0 (0.3) Total Noninterest Income 36.3 $ 44.1 $ 7.8 $ 1st Quarter 2020 Highlights Dollar
Slide 22: Noninterest Expense
22 1st Quarter 2020 Highlights Dollars in millions. * Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, and securities gains or losses. Noninterest Expense 4Q 2019 1Q 2020 Net Change Salaries and Benefits 58.2 $ 61.0 $ 2.8 $ Informati
Slide 23: Efficiency Ratio
23 Efficiency Ratio 63.2% 66.9% 58.4% 61.6% 62.1% 62.5% 59.8% 58.4% 60.7% 59.7% 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Efficiency Ratio Adjusted* Efficiency Ratio * Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, and securities gai
Slide 24: Tangible Book Value
24 Tangible Book Value $37.15 $37.85 $38.20 $39.13 $38.01 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20