Southstate Bank Corporation · NYSE:SSB
Southstate Bank — South State — Investor Presentation (September 2015)
42 slides from Southstate Bank's investor presentation, Sep 28, 2015
Slide 1: Investor Presentation Second Quarter 2015
Investor Presentation Second 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 - $8.1 Billion Largest Bank Holding Company Headquartered in South Carolina Loans - $5.8 Billion Deposits - $6.7 Billion
Slide 4: Market Performance Since 2009
Market Performance Since 2009 See endnotes (1) 183.9% 97.8% (7.1%) 213.1%
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
Banking Landscape 325 Banks across GA, NC, and SC Distribution of Banks 266 198 61 66 As of 6/30/2015 < $500 mm $500mm - $1.0 bn $1.0 bn - $5.0 bn > $5 bn 6 26 27
Slide 8: 2nd Quarter 2015 Highlights
Record Operating Earnings of $26.3 million $1.09 per diluted share Operating Return on Average Assets 1.32% Operating Return on Average Tangible Equity 16.9% Cash dividend of $0.25 per common share Net Income of $24.9 million, $1.03 per diluted share 2nd Quarter 2015 Highlights
Slide 9: 2nd Quarter 2015 Highlights
2nd Quarter 2015 Highlights Net Loan Growth – 6% Annualized Strong Non-Acquired Loan Growth - $202 million, 22% annualized Outpaced Acquired run-off by $84 million Strong Non-Interest Bearing DDA Growth Increased $88 million – 20% annualized Continued Asset Quality improvement NPA’s 0.81% Non-Acquir
Slide 10: 2nd Quarter 2015 Highlights
2nd Quarter 2015 Highlights Margin down 3 bp to 4.75% Yield on earning assets decline mostly offset by cost of funds decline Non Interest Income : $ 30.1 million vs. $26.5 million linked quarter Fees on Deposit Accounts $ 17.7 Mortgage Banking $ 7.1 Wealth Management $ 5.1 Amortization of $(2.0) FDI
Slide 11: Branch Purchase Transaction Rationale
Branch Purchase 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 pr
Slide 12: Capital
Capital 15.00% . 11.83% 1 - 11.08% | 12.00% | 9.68% 9.5556 | 9.00% x 8.71% | | 6.00% ] | 3.00% | | | | | | 0.00% : : Tangible Common Leverage Ratio CET 1 Ratio Tier 1 Capital Ratio Total Risk-Based Equity/Assets Capital Ratio South State Corporation KRX Median
Slide 13: Operating Earnings Per Share
Operating Earnings Per Share See Endnotes (3)
Slide 14: Net Interest Margin
Net Interest Margin See Endnotes (4) In Millions
Slide 15: Efficiency Ratio
Efficiency Ratio 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 71.5% 165.4% 2Q 2014 "Efficiency Ratio 71.0% 69.3% 64.5% 65.1% 65.0% 63.2% 61.2% 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Operating Efficiency Ratio (excluding one-time items) $ Soutu Stare
Slide 16: Common Stock Dividends
Common Stock Dividends See endnotes (6) $0.47 $0.72
Slide 17: Loan Portfolio Mix
Loan Portfolio Mix In Millions $2,617 $2,841 $3,613 $5,687 $5,723 See endnotes (7) $5,789
Slide 18: Total Loans by Type
Total Loans by Type Linked Quarter Organic Growth C & I: 40% Cons Non RE: 29% Cons Owner Occ: 25% Comml Owner Occ: 22% Total Loans $5,789
Slide 19: Total Loans by Market
Total Loans by Market Linked Quarter Organic Growth Georgia 54% Charleston 47% Upstate SC 16% Coastal 11%
Slide 20: Wealth Management
Wealth Management Solid Foundation 850+ Relationships 19,000+ Retail Investment A/C 90+ Team members See endnotes (8) YTD $4,036 $3,828 $3,406 $1,620 2015 2014 2013 2012 Assets Under Management (Care) in millions $9,985 $18,344 $12,661 $6,360 2Q15 2014 2013 2012 Total Revenue in thousands
Slide 21: Mortgage: Solid Foundation
Solid Foundation Mortgage Market Share - #4 in SC Retail Mortgage: 65 originators Exit Wholesale Mortgage on Oct 1st Portfolio Servicing: $2.4 Billion – outsourcing by year-end Mortgage $733 $1,195 $1,310 $2,198 2Q15 2014 2013 2012 Mortgage Production in millions YTD $13,715 $16,170 $9,149 $12,545 2
Slide 22: South State Corporation
S$ SouTH StaTE CORPORATION
Slide 23: Loan Portfolio Mix - 2Q 2015
Loan Portfolio Mix - 2Q 2015 $2,001 $5,789 In Millions 13%
Slide 24: Core Deposit Mix
Core Deposit Mix Online Banking ~ 173,000 users Mobile Deposits (monthly) ~ 21,000 transactions Number of Accounts Interest Bearing $1,489 Non - Interest Bearing $1,918 Account Balance in Millions Interest Bearing 31% Non - Interest Bearing 69%
Slide 25: Bank Investment Portfolio Mix
Bank Investment Portfolio Mix See endnotes (9) Bank Fixed Income Portfolio (AFS & HTM) Tax Equivalent Yield 2.65% Weighted Average Life 3.58 Modified Duration 3.26 Total Carrying Value $847.4 Million Total Investments Short-Term $ 437.5 Fixed Income 847.4 Equity Securities 13.0 Total $ 1,697.9
Slide 26: Revenue Diversification
Revenue Diversification See endnotes (10) 2Q14 3Q14 4Q14 1Q15 2Q15 77% 77% 76% 75% 73% 23% 23% 24% 25% 27% Net Interest Income
Slide 27: M&A History and Asset Growth
M&A History and Asset Growth 2011 $3.9 bn 2014 $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 First Financial Holdings, Inc. $3.2 Bn July 26, 2013 2010 2013 Peoples Bancorporation $546 MM Apr 24,2012 Sav
Slide 28: Market Share
Market Share See endnotes (11)
Slide 29: South Carolina Market Share
1 Wells Fargo 19.8 2 Bank of America 13.0 3 BB&T 10.4 4 First Citizens 9.4 5 South State Bank 7.6 6 TD Bank 5.0 7 Synovus 3.7 8 SunTrust 3.1 9 United Community 1.4 10 Carolina Financial 1.2 Total $69.9 Billion 100% See endnotes (11) South Carolina Market Share # 1 in Tire Manufacturing Successful im
Slide 30: South Carolina Market Share by MSA
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 6 BB&T 5.8 7 Carolina Financial 5.2 8 Southcoast Financial 3.3 9 Bank of SC 3.2 10 BNC Bancorp 2.9 Total $10.3 Billion 100% 1 We
Slide 31: South Carolina Market Share by MSA
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 49.2 2 First Citizens 25.3 3 FMB of SC 8.8 4 BB&T 7.2 5 First National 5.0 Total $897 m
Slide 32: Georgia Market Share
Georgia Market Share Savannah 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 $767 million 100% See endnotes (11) 1 SunTrust 22.8 2 Wells Fargo 21.5 3 Bank of America 12.5 4 South State Bank 9.6 5 Ameris Bank 7.0 6 BB&T 6.6 7 FCB Fi
Slide 33: 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 5 Bank of America 9.4 6 PNC 6.7 7 SunTrust 4.4 8 South State Bank 3.2 9 First Bancorp 3.2 10 TD Bank 3.0 Total $4.4 Billion 100% See endnotes (11) 1 Bank of America 71.8
Slide 34: 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 35: Select MSA Markets
Select MSA Markets Market Rank Deposit Market Share (%) Projected Population Change 2015-2020 (%) Orangeburg, SC 1 49.2 (0.35) Charleston-North Charleston, SC 2 15.2 8.40 Hilton Head Island-Bluffton-Beaufort, SC 2 16.5 8.21 Florence, SC 2 14.7 1.90 Savannah, GA 4 9.6 6.22 Sumter, SC 5 7.8 2.22 Green
Slide 36: Population Growth Projected Change 2015-2020
Wilmington SOUTH CAROLINA Georgetown Myrtle Beach Charleston Savannah Hilton Head Island Atlanta Athens Gainesville Greenville Columbia Florence GEORGIA NORTH CAROLINA Population Growth Projected Change 2015-2020 Economic Highlights Greenwood 3.52% 5.13% US South State MSA's
Slide 37: Unemployment Data
Unemployment Data See endnotes (14) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 National North Carolina South Carolina Georgia 6.4 % 6.0% 5.9% 5.3 %
Slide 38: 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) Jul-14 YTD Jul-15 YTD % Change Jul-14 YTD Jul-15 YTD % Change Jul-14 YTD Jul-15 YTD % Change Beaufort 873 956 9.5% $186 $200 7.4% 178
Slide 39: Median Household Income
Median Household Income See endnotes (16)
Slide 40: Analyst Recommendations
Analyst Recommendations Analyst Second Quarter 2015 Recommendation Keefe, Bruyette & Woods OUTPERFORM SunTrust Robinson Humphrey BUY FIG Partners MARKET-PERFORM Sandler O’Neill HOLD
Slide 41: Endnotes
Endnotes Source: SNL Financial. Pricing performance show from 12/31/09 -8/10/15. 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
Slide 42: 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 James C. Mabry IV Executive Vice President Investor