Southstate Bank Corporation · NYSE:SSB
Southstate Bank — Merger or Acquisition (May 2024)
30 slides from Southstate Bank's merger presentation, May 20, 2024
Slide 1: SouthState Acquisition of Independent Bank Group
SouthState Acquisition of Independent Bank Group GROWTH MARKETS. COMMON CULTURE. BETTER TOGETHER. May 20, 2024
Slide 2: Cautionary Note Regarding Forward Looking Statements
C A U T I O N A R Y N O T E R E G A R D I N G F O R W A R D L O O K I N G S T AT E M E N T S This communication contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made purs
Slide 3: The WHY, The WHAT, The HOW
The WHY To invest in the entrepreneurial spirit, pursue excellence and inspire a greater purpose. The WHAT The HOW Guiding Principles Core Values Local Market Leadership Our business model supports the unique character of the communities we serve and encourages decision making by the banker that is
Slide 4: Growth Company in High-Growth Markets
VISION • Growth Company in High-Growth Markets Better not just Bigger • Distinct Geographic Business Model Ownership Culture • A Leadership Academy Growing Leaders GROWTH MARKETS. COMMON CULTURE. BETTER TOGETHER. 4
Slide 5: Transaction Rationale
T R A N S A C T I O N R AT I O N A L E • Creates a $65 billion financial institution in the best growth markets in the United States Strategically • Diversifies footprint into similar high-growth markets with a base of deep local connections Compelling • Joins two granular customer bases with a hist
Slide 6: Population Migration to the South
P O P U L AT I O N M I G R AT I O N T O T H E S O U T H Top 10 States Net Domestic Migration 1. Florida 818,762 2. Texas 656,220 3. North Carolina 310,189 4. South Carolina 248,055 5. Arizona 218,247 6. Tennessee 207,097 7. Georgia 185,752 8. Idaho 104,313 9. Alabama 96,538 10. Oklahoma 80,064 Sourc
Slide 7: Creating the South's Leading Regional Bank
C R E AT I N G T H E S O U T H ’ S L E A D I N G R E G I O N A L B A N K Enhanced Scale Through Partnership(1) Pro Forma Branch Footprint Projected Population Growth $65B $48B $55B Top 20% of U.S. MSAs highlighted in blue Assets Loans Deposits Colorado Virginia Dominant Southern Franchise Oklahoma N
Slide 8: Positioned for the Future in the Best U.S. Growth Markets
POSITIONED FOR THE FUTURE IN THE BEST U.S. GROWTH MARKETS Pro Forma Deposit Footprint Fort Collins $1.1 Denver Colorado Colorado $1.5 Springs Colorado Front Range $0.5 31 Branches Pro Forma Richmond Virginia Deposits by State North Carolina Raleigh Florida 27% Tennessee Oklahoma $2.4 Texas 22% Texas
Slide 9: Financial Impact
F I N A N C I A L I M PA C T Earnings and TBV Impact Strong Capital and Liquidity Excluding Excluding (1) GAAP Rate Marks/CDI Rates/CDI/CECL 10.4% 12.8% 89% 27.3% 20.4% 16.5% CET1 Ratio Total Risk-Based Capital Ratio Loan-to-Deposit Ratio 2025 EPS 2025 EPS 2025 EPS Accretion(2) Accretion(2) Accretio
Slide 10: Pro Forma Performance vs. Peers
PRO FORMA PERFORMANCE VS. PEERS 2025E ROAA (%) Benefit to SouthState 1.53 1.45 +22 1.35 1.34 1.26 1.23 1.18 1.14 1.12 1.11 1.08 1.05 1.05 1.04 1.01 1.00 0.99 0.82 0.82 0.81 0.80 0.77 0.64 0.34 bps Pro Peer Forma(1) Median 2025E ROATCE (%) 18.0 17.5 16.2 15.9 15.9 15.1 +440 14.5 14.4 14.0 13.9 13.7 1
Slide 11: Model Assumptions & Diligence
Model Assumptions & Diligence
Slide 12: Deal Overview
DEAL OVERVIEW • Independent Bank Group, Inc. to merge into SouthState Corporation; Independent Bank to merge into SouthState Bank Transaction Structure • 100% stock consideration • Fixed exchange ratio 0.60x SSB shares for each IBTX share • Per Share Consideration: $48.51, equivalent to 10% premium(
Slide 13: Financial Assumptions
FINANCIAL ASSUMPTIONS • Based on consensus estimates for remaining periods of 2024 and 2025 with 5% and 5% annual long-term net income growth for Earnings Projections SouthState and Independent, respectively Merger Costs • $175 million pre-tax merger expenses fully reflected in pro forma TBV dilutio
Slide 14: Comprehensive Due Diligence Process
COMPREHENSIVE DUE DILIGENCE PROCESS Diligence Focus Areas Due Diligence Overview Focus Points • Completed a coordinated comprehensive due diligence review with 160+ internal bank employees from SouthState & Independent, along with 50+ outside professionals and attorneys Credit & Enterprise Risk Unde
Slide 15: History of Resilient Credit
H I S TO RY O F R E S I L I E N T C R E D I T Net Charge-Offs / Average Loans 2.50% Peak NCOs: 1.94% SSB Peak NCOs: 1.89% 2.00% IBTX SSB Peer Group 1.50% 1.00% 0.50% Peak NCOs: 0.31% 0.19% 0.03% 0.00% 0.00% '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 Q1 '24 Non-Performing Loa
Slide 16: Independent Bank: Commercial Real Estate Portfolio Details
I N D E P E N D E N T B A N K : C O M M E R C I A L R E A L E S T AT E P O R T F O L I O D E T A I L S NOOCRE Composition Diversified and Granular CRE Portfolio $6.6B Total $33.1M $1.7M 4.3% Top 10 Loan Balance Largest Loan Average Loan Size Relationships / Miscellaneous Total Loans Retail 3% Mulitf
Slide 17: Prepared for Growth Through Significant Tech Investments
P R E PA R E D F O R G R O W T H T H R O U G H S I G N I F I C A N T T E C H I N V E S T M E N T S Expanded Capabilities & Scale Consumer Mobile/Online Increased Annual Tech Spend by ~$68 million or 76% since 2020* Replaced and/or added 20+ Best in Class Platforms *Actual 2020 Annual Tech Spend comp
Slide 18: Commitment to Our Communities
CO M M I T M E N T TO O UR CO M M UN I T I E S > 20,400 Combined volunteer service hours > $100 Million Combined community development investments and grants to foster economic development and affordable housing projects > $547 Million Combined community development loans > $582 Million Combined aff
Slide 19: Commitment to Our Communities
CO M M I T M E N T TO O UR CO M M UN I T I E S • Federally qualified health center striving to eliminate racial and socio-economic disparities in underserved communities • Independent Bank provided seed money to start the clinic in 2019 and raised money to build the flagship 25,000 square foot build
Slide 20: The Combined Company
T H E C O M B I N E D C O M PA N Y Fort Collins $65B $8.2B Denver Total Assets Market Cap Colorado Springs Richmond Colorado Virginia Raleigh Tennessee North Carolina Oklahoma Greenville Arkansas Charlotte $48B $55B Texas Atlanta Columbia Huntsville Birmingham Wilmington Myrtle Beach Dallas Mississi
Slide 21: Appendix
Appendix
Slide 22: Independent Bank Group, Inc. Snapshot
I N D E P E N D E N T B A N K G R O U P, I N C . S N A P S H O T Denver Strong Asset Growth A Unique Community Bank Growth Story ~23% 10-Year Compound • Founder-led organization Annual Growth Rate • High community involvement • Conservative credit culture with history of resilient asset quality • Gr
Slide 23: Best in Class: Growth Markets
BEST IN CLASS: GROWTH MARKETS Demographic Profile of the South Banking Universe(1) ’24 – ’29 Projected Population Growth (%) Bubble Size 5.4% 5.7% 5.5% Represents 7.0% Total Assets 2.4% 6.0% SSB IBTX Pro Forma National Average '24 - '29 Projected Population Growth 5.0% ’24 – ’29 Projected Median HHI
Slide 24: Pro Forma Loan Composition
PRO FORMA LOAN COMPOSITION Loan Composition SouthState Corporation(1) Independent Bank Group, Inc.(1) Pro Forma Company Total Loans: $32.7B Total Loans: $14.6B Total Loans: $47.4B 1-4 Family 1-4 Consumer & 1-4 Family 11% Consumer & Other Family Other 21% Consumer & Other CRE & 18% 4% Other CRE & 5%
Slide 25: Pro Forma Deposit Composition
PRO FORMA DEPOSIT COMPOSITION Deposit Composition SouthState Corporation Independent Bank Group, Inc. Pro Forma Company Total Deposits: $37.3B Total Deposits: $15.7B Total Deposits: $53.0B Jumbo CDs Jumbo CDs (>$250K) Non-interest Non-interest Bearing (>$250K) Non-interest Bearing 3% Bearing 29% Jum
Slide 26: Ongoing Capital Generation
O N G O I N G C A P I T A L G E N E R AT I O N Combined Earnings and Capital Ratios At Close(1) Cost Savings(2) Interest Rate Marks(2) SSB 2025E Earnings $526.9 8.6% IBTX 2025E Earnings $167.0 ~$293 million Leverage Ratio 2025 After-tax Run-Rate Cost Savings(3) $70.5 Core Earnings Power $764.4 accre
Slide 27: Illustrative Pro Forma Earnings Accretion Reconciliation
I L L U S T R AT I V E P R O F O R M A E A R N I N G S A C C R E T I O N R E C O N C I L I AT I O N Illustrative Fully Phased-In 2025E EPS Accretion(1) Dollars in millions; excluding per share data 2025E SSB Earnings (Mean Consensus Estimates GAAP) $526.9 IBTX Earnings (Mean Consensus Estimates GAAP
Slide 28: Tangible Book Value Dilution Reconciliation
T A N G I B L E B O O K V A L U E D I L U T I O N R E C O N C I L I AT I O N Tangible Book Value Dilution Detail Calculation of Intangibles Created Millions of $ Millions Shares $ Per Share $ Millions SSB Tangible Book Value at Close (3/31/2025) $3,881.5 76.2 $50.95 Aggregate Transaction Value $2,00
Slide 29: Additional Information
A D D I T I O N A L I N F O R M AT I O N NO OFFER OR SOLICITATION This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer
Slide 30: Growth Markets. Common Culture. Better Together.
GROWTH MARKETS. COMMON CULTURE. BETTER TOGETHER.