Southstate Bank Corporation · NYSE:SSB
Southstate Bank — South State — East Coast Financial Services Conference 2017
43 slides from Southstate Bank's conference presentation, Nov 16, 2017
Slide 1: Investor Presentation, East Coast Financial Services Conference
SOUTH STATE CORPORATION Investor Presentation East Coast Financial Services Conference November 15, 2017
Slide 2: Forward Looking Statements
Forward Looking Statements Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 . The words "may," "will," "anticipate," "could," "should," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "project" and "intend," as well as othe
Slide 3: South State Corporation: SSB
South State Corporation: SSB •Roanoke •Raleigh •Norfolk •Virginia Beach •Murfreesboro •Knoxville •Asheville •Charlotte •Fayetteville •Chattanooga •Greenville •Atlanta •Athens •Columbia •Wilmington •Augusta •Macon •Columbus •Montgomery •Charleston •Savannah •panama City •Tallahassee •Jacksonville •Ga
Slide 4: Market Performance Since 2009
Market Performance Since 2009 350 300 250 200 150 100 50 0 -50 -100 282% 234% 145% 101% 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 --SSB SSB Total Return –SNL Southeast U.S. Bank --KRX 4 SOUTH STATE CORPORATION Source: SNL Financial as of 10/30/17
Slide 5: How We Operate the Company
How We Operate the Company Leadership Culture Growth Profitability Soundness Values 5 SOUTH STATE CORPORATION
Slide 6: 3rd Quarter 2017 Highlights
3rd Quarter 2017 Highlights •:• Net Income $35.0 million $1.19 per diluted share Return on Average Assets 1.25% Return on Average Tangible Equity 14.93% •: Adjusted* Net Income $35.7 million • • • $1.22 per diluted share Adjusted* Return on Average Assets 1.28% Adjusted* Return on Average Tangible E
Slide 7: 3rd Quarter 2017 Highlights
3rd Quarter 2017 Highlights •:• Net Loan Growth of $84 million, 4% Annualized •:• Efficiency Ratio - 59.5% •:• Adjusted* Efficiency Ratio - 58.4% •:• Asset Quality NPA's / Assets Non-Acquired Net Charge-offs • • 0.30% 0.04% 7 * Adjusted is a Non-GAAP financial measure that excludes the impact of bra
Slide 8: Net Interest Margin
Net Interest Margin $ 81.2 $ 80.6 $ 97.4 $ 99.0 $ 100.3 4.18% 4.09% 4.20% 4.13% 4.11% 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Net Interest Margin -Net Interest Income SOUTH STATE CORPORATION Dollars in millions 8
Slide 9: 3rd Quarter Highlights: Noninterest Income
3rd Quarter Highlights 2017 Noninterest Income Change 6/30/2017 9/30/2017 Fees on Deposit Accounts $ $ $ 22.1 22.4 0.3 Mortgage Banking (1.7) 5.2 3-5 Wealth Management (0.1) 6.4 6.3 Acquired Loan Recoveries 2.2 (0.3) 1.9 Other Income (0.1) 1.5 1.4 Total Adjusted* Noninterest Income (1.9) $ $ 37-4 35
Slide 10: Average Interest Earning Assets
Average Interest Earning Assets %of Earning %of Earning Assets Short-Term Investments Assets Assets Change 6/30/2017 9/30/2017 (98) 2.7% $ 267 1.7% $ 169 $ Investment Securities (40) 14.3 1,395 13.9 1,355 Loans -Acquired (160) 2,264 2,104 23.2 21.4 Loans-Non-acquired 62.5 6,124 5,776 348 59.3 Total
Slide 11: Branch Network
Branch Network Total branches 12/31/2009 Acquired Consolidated or sold Total branches 9/30/17 48 147 (66) 129 Average deposits per branch (in 6/30/2009 9/30/2017 millions) $46 70 SOUTH STATE CORPORATION 11
Slide 12: Efficiency Ratio
Efficiency Ratio 77.5% 65.8% 62.8% 62.0% 61.6% 59.7% 59.5% 8 % 58.4% 62.3% 61.7% 3Q 2016 4Q 2016 Efficiency Ratio 1Q 2017 2Q 2017 3Q 2017 •Adjusted* Efficiency Ratio 12 SOUTH STATE CORPORATION * adjusted is a non-GAAP financial measure that excludes the impact of branch consolidation, merger related
Slide 13: Earnings Per Diluted Share
Earnings Per Diluted Share $ 2.38 $ 3.16 $ 3.08 $ 4.11 $ 4.18 $ 2.90 $ 4.55 $ 4.31 $ 3.75 $3.55 2015 2016 YTD 2017 2013 2014 •EPS •Adjusted* EPS (Non-GAAP) SOUTH STATE CORPORATION *Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, and
Slide 14: Capital Adequacy
Capital Adequacy 12.9% 12.1% 11.0% 9.4% 8.9% Tangible Common Equity / Assets Leverage Ratio CET 1 Ratio Tier 1 Capital Ratio Total Risk-Based Capital Ratio South State Corporation (9/30/17) •KRX Median (9/30/2017) $SOUTH STATE CORPORATION 14 Source: SNL Financial and Company filings.
Slide 15: Asset Quality
Asset Quality NPLs / Loans(1) NPAs / Assets(2) 1.70% 0.74% 0.63% 0.38% 0.29% 0.23% 2012 2013 2014 2015 2016 3Q 2017 2.50% 1.36% 1.02% 0.63% 0.43% 0.30% 2012 2013 2014 2015 2016 3Q 2017 ALLL / NPLs(3) NCOs / Average Loans(4) 71.5% 81.2% 121.1% 181.8% 250.7% 322.1% 2012 2013 2014 2015 2016 3Q 2017 0.7
Slide 16: Common Stock Dividends
Common Stock Dividends $1.21 $0.99 $0.98 $0.82 $0.74 $0.69 2012 2013 2014 2015 2016 YTD 2017* $ 16 • 3Q 2017 dividend declared 10/18/2017, with a record date of 11/10/2017, and payable11/17/2017. SOUTH STATE CORPORATION
Slide 17: Tangible Book Value + Cumulative Dividends
Tangible Book Value + Cumulative Dividends $50.00 1% $45.03 $41.60 40.00 30.00 20.00 10.00 2013 2014 2015 2016 YTD 2017 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Cumulative Dividends TBV $SOUTH STATE CORPORATION 17 15 year increase of 28 cagr 9.3% $11.82 $17.93 $29.17
Slide 18: Loan Portfolio Mix
Loan Portfolio Mix $8,268 $6,684 $6,008 $5,698 $3,631 2012 2013 2014 Non Acquired 2015 Acquired* 2016 3Q 2017 Dollars in millions *Acquired loans are net of discounts. SOUTH STATE CORPORATION 18 $1,060 $2,255 $2,833 $1,443 $2,038 $6,008 $1,787 $2,571 $2,865 $3,468 $4,221 $5,241 $6,230 $5,723
Slide 19: Total Loans by Type
Total Loans by Type Other 0.2% Other Income Producing Property 4.0% Linked Quarter Net Growth Commercial Real Estate Owner Occupied Commercial Real Estate Non-owner Occupied Commercial Non-owner Occupied 15.296 11 Total Loans $8,268 million C&I 11 Commercial Owner Occupied 19.096 Consumer Real Estat
Slide 20: CRE Concentration
CRE Concentration Regulatory Guideline Capacity 9/30/2017 Balance % of RBC* Balance % of RBC* CRE $2.1 $1.2 300% Construction Land & Development $0.2 $0.9 S0% $1.1 100% 195% $3.3 80% Dollars in billions *concentration limits calculated with bank level total risk based capital RBC). 20 $SOUTH STATE C
Slide 21: Total Loans by Market
Total Loans by Market Inland SC 14% Linked Quarter Net Growth North Georgia 26% Savannah 15 Charleston 16% Charlotte 8 North Georgia 6% Charleston 8 Coastal 8 $SOUTH STATE CORPORATION 21 COASTAL 10% Augusta 12% other 6% savannah 6% charlotte 15% Greenville 15%
Slide 22: Wealth Management
Wealth Management Assets Under Management or Care (millions) Noninterest Income (thousands) 2012 2012 $6,360 2013 2013 $12,661 2014 $3,828 2014 $18,344 2015 $3,940 2015 $20,117 2016 2016 $4,171 3Q 2017 YTD 2017 $18,703 $4,967 900+ Relationships 20,000+ Retail investment accounts 110+ Team members •
Slide 23: Mortgage Banking
Mortgage Banking Production millions Noninterest Income thousands 2012 2012 $2,198 2013 2013 2014 2014 2015 2015 $21,761 2016 2016 YTD 2017 3Q 2017 $1,206 • • • • Mortgage Market Share -#3 in South Carolina* Retail Mortgage: 81originators (8 new in 2017) Online mortgage application process Servicing
Slide 24: M&A Update: Park Sterling Corporation
SOUTH STATE CORPORATION M&A Update Park Sterling Corporation
Slide 25: Park Sterling Merger Overview
Park Sterling Merger Overview Increases density and depth in current markets and extends footprint into Virginia Management continuity and improved team talent across entire franchise Treasury and Capital Markets Platform Improved market share position in several metropolitan markets Meaningfully en
Slide 26: Park Sterling Transaction Highlights
Park Sterling Transaction Highlights 4th Quarter 2017 0.14 shares of SSB common stock for each share of PSTB common stock 100% stock 80% SSB / 20% PSTB 2 Directors to be appointed to SSB's Board of Directors, including Jim Cherry • Net credit mark of $49·5 million • Gross credit mark of $61million (
Slide 27: Pro Forma Overview
Pro Forma Overview Pro Forma Highlights(1) Richmond Assets Loans Deposits Branches Loans/Deposits Market Cap $14.4 bn 10.7 11.5 169(2) VIRGINIA NORTH CAROLINA Raleigh • 90% $3.3 bn Athens GEORGIA STATE 1) Source: SNL Financial. Pro forma highlights exclude purchase accounting adjustments.27 2) Inclu
Slide 28: Pro Forma Market Share
Pro Forma market share combined counties of operation Rank Institution Branches Deposits Market share Dollars in billions source: SNL Financial. Deposit data as of 6/30/17. Includes combined counties of operation for ssb and pstb; excludes money center or super regional bank branches with greater th
Slide 29: C&I Markets
C&I Markets Top 25 MSAs by C&I Sales Rank Market Name Total C&I Sales Total C&I Businesses 1. Atlanta-sandy Springs-Roswell, GA $183.6 35,686 2. Washington-Arlington-Alexandria, DC-VA-MD-WV 116.9 31,466 3 Charlotte-Concord-Gastonia, NC-SC 90.2 15,854 4. Virginia beach-Norfolk-Newport News, VA-NC 50.
Slide 30: Appendix
SOUTH STATE CORPORATION Appendix
Slide 31: Crossing $10 Billion
Crossing $10 Billion South State crossed $10 billion in total assets January 2017 with the Southeastern Bank Financial Corporation Merger. Durbin Impact • Cap on interchange fees imposed by the Durbin amendment results in -45% reduction in related revenue Effective for South State beginning July 201
Slide 32: M&A History and Asset Growth
M&A History and Asset Growth Community Bank & Trust $1.0 Bn Jan-2010 Peoples Bancorporation $546 MM Apr-2012 Savannah Bancorp, Inc $950 MM Dec-2012 Bank of America Branch Acquisition $438 MM Aug-2015 Park Sterling Corporation $3.3 Bn Expected Q4 2017 2010 2011 2012 2013 2014 2015 2016 2017 $3.6 Bn $
Slide 33: Loan Portfolio Mix - 3Q 2017
Loan Portfolio Mix-3Q 2017 $6,230 12% 15% 21% 16% 30% 6% $2,038 6% 15% 13% 43% 9% $8,268 11% 15% 19% 15% 33% 7% Non Acquired •Other Consumer •Other Commercial Commercial Nonowner Occupied Acquired Total Consumer Real Estate •Commercial Owner Occupied •Construction/Land 33 Dollars In millions SOUTH S
Slide 34: Pre and Post Crisis Loan Mix
Pre and Post Crisis Loan Mix 12/31/2008 22.3% 18.3 14.3 10.9 9/30/2017 33.2% 19.1 15.2 10.9 Consumer Owner Occupied Commercial Owner Occupied Commercial Income Producing Commercial Non-Real Estate Construction Land Consumer Non-Real Estate Other Income Producing Loans in Transit/ Misc. { 8.0 15.1 4.
Slide 35: Stratification of Loan Portfolio
Stratification of Loan Portfolio 100% 80 60 40 20 0 29,465 71,661 Average Loan Size All Loans Commercial Mortgage Consumer $116 298 197 28 <$100 $100 - $999 $1,000+ # of Active Notes 12/31/2010 9/30/2017 Dollars In thousands SOUTH STATE CORPORATION 35
Slide 36: Transaction Deposit Mix
Transaction Deposit Mix Dollar Balance Number of Accounts Non Interest Bearing $2,506 31% Interest Bearing 41% Interest Bearing $5,465 69% Non-Interest Bearing 59% -228,00 accounts Dollars in millions Includes DDA’s, NOW’s IOLTA's, and l031exchange deposits. SOUTH STATE CORPORATION 36 Online Bankin
Slide 37: Investment Portfolio Mix
Investment Portfolio Mix State & Municipal HTM 1% Bank Fixed Income Portfolio Agency Mortgage Backed Securities 67% (AFS&HTM) Tax Equivalent Yield Weighted Average Life Modified Duration Total Carrying Value $1.3 Billion State & Municipal AFS 15% SBA 10% 2.6% 4.0 years 3.6 U.S. Agency/GSE Debentur
Slide 38: Revenue Diversification
Revenue Diversification Other 7% Trust & Investment Services 18% Mortgage Banking 13% 3Q YTD Fee Income $109 Million Deposit Accounts 62% 26% 23% 26% 28% 30% 27% 74% 77% 74% 72% 70% 73% 3Q 2017 2012 2013 2014 2015 2016 noninterest Income Net Interest Income 38 Total Income=Net Interest Income + Noni
Slide 39: Demographic Highlights
Demographic Highlights MSA Population Growth Projected Change 2018 - 2023 Myrtle Beach Charleston Hilton Head Charlotte Wilmington Savannah Greenville Columbia Augusta us State Population Growth Projected Change 2018 - 2023 South Carolina Georgia North Carolina us $ Source: SNLFinancialasofl0/30/17.
Slide 40: Economic Highlights
Economic Highlights Raleigh Charlotte Greenville Gainesville Atlanta Athens Augusta Columbia Savannah Hilton Head Charleston BOEING Myrtle Beach Wilmington Gulfstream Volvo 40 85 95 40 77 26 85 20 95 75 16 SoUTH STATE CORPORATION 40
Slide 41: Analyst Coverage
Analyst Coverage Brean Capital FIG Partners Keefe, Bruyette & Woods NAB Research LLC Piper Jaffray Sandler O'Neill Stephens SunTrust Robinson Humphrey SoUTH STATE CORPORATION 41
Slide 42: Investor Contacts
Investor Contacts Robert R. Hill, Jr. Chief Executive Officer John C. Pollok Senior Executive Vice President and Chief Financial Officer / Chief Operating Officer James C. Mabry IV Executive Vice President Investor Relations and Mergers & Acquisitions $ SOUTH STATE CORPORATION SoUTH STATE CORPORATIO
Slide 43: South State Corporation
S SouTH STATE CORPORATION
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