Southstate Bank Corporation · NYSE:SSB
Southstate Bank — South State — SunTrust Robinson Humphrey 2018 Financial Services Conference
39 slides from Southstate Bank's conference presentation, May 21, 2018
Slide 1: Investor Presentation – SunTrust Robinson Humphrey 2018 Financial Services Conference
Investor Presentation SunTrust Robinson Humphrey 2018 Financial Services Conference May 22,2018
Slide 2: Forward Looking Statements
ForwardLooking 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 the Securities Act of 1933 and Section 21E of the Securities
Slide 3: South State Corporation: SSB
South State Corporation: SSB Richmond Raleigh Greenville Charlotte Wilmington Columbia Atlanta Myrtle Beach Augusta Charleston Hilton Head Savannah 64 85 95 40 95 77 40 81 20 16 26 3
Slide 4: How We Operate the Company
How We Operate the Company Growth Profitability Soundness 4
Slide 5: 1Q 2018 Highlights
1Q 2018 Highlights GAAP $42.3 million $1.15 1.19% 14.69 67.24 Adjusted $51.2 million $1.39 1.44% 17.60 60.72 Net Income EPS Return Return on Average Assets on Average Tangible Equity Efficiency Ratio 5 *Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger
Slide 6: Capital Adequacy
Capital Adequacy 13.4% 13.3% 12.9% Tangible Common Equity / Tangible Assets Leverage Ratio CET1 Ratio Tier 1 Capital Ratio Total Risk-Based Capital Ratio SSB (3/31/18) KRX Median (3/31/18) 6 Source: S&P Global Market Intelligence and Company filings. South State Corporation 3/31/18 ratios are estima
Slide 7: Asset Quality
Asset Quality NPLs / Loans(1) NPAs / Assets(2) 1.36% 0.74% 0.23% 0.21% 2013 2014 2015 2016 2017 1Q 18 2013 2014 2015 2016 2017 1Q 18 NCOs / Average Loans(4) ALLL / NPLs(3) 316.0% 293.0% 0.41% 0.06% 0.04% 0.02% 2013 2014 2015 2016 2017 1Q 18 2013 2014 2015 2016 2017 1Q 18 1) NPLs / Loans = Non-acquir
Slide 8: CRE Concentration
CRE Concentration 3/31/2018 Regulatory Balance Guideline Capacity Balance % ofRBC* % of RBC* CRE $3.2 222% $4.3 300% $1.1 Construction $1.3 88% $1.4 100% $0.1 Land & Development 8 Dollars in billions * Concentration limits calculated based upon bank level total Risk Based Capital (RBC).
Slide 9: Funding Composition
Funding Composition Cost of Funds 0.31% Interest-bearing deposits $8,542 Q1 17 Q4 17 Q1 18 Noninterest-bearing deposits $3,121 Loans to Deposits 92% 91% 91% 90% 87% Other borrowings $216 Federal funds purchased and repurchase agreements $358 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 9 Dollars in millions 0.21%
Slide 10: Earnings Per Diluted Share
Earnings PerDiluted Share $4.85 $4.31 $4.18 $4.11 2014 2015 2016 2017 1Q 2018 EPS Adjusted* EPS (Non-GAAP) 10 * Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, and securities gains or losses, deferred tax asset revaluation, and FDIC
Slide 11: Net Interest Margin
Net Interest Margin $129.0 $112.3 $100.3 $99.0 $97.4 4.22% 4.20% 4.18% 4.13% 4.11% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 Net Interest Margin Net Interest Income 11 Dollars in millions
Slide 12: 1st Quarter 2018 Noninterest Income
1st Quarter 2018Noninterest Income 12/31/2017 3/31/18 Change Fees on Deposit Accounts $ 23.6 $ 25.5 $ 1.9 Mortgage Banking 3.7 4.9 1.2 Wealth Management 6.7 7.5 0.8 Acquired Loan Recoveries 2.9 3.0 0.1 Other Income 2.1 2.6 0.5 Total Adjusted* Noninterest Income $ 39.0 $ 43.5 $ 4.5 Dollars in million
Slide 13: Efficiency Ratio
Efficiency Ratio 77.5% 67.2% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 Efficiency Ratio Adjusted* Efficiency Ratio 13 * Adjusted is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, and securities gains or losses. 68.5% 62.0%62.8% 56.9% 60.7% 59.7%
Slide 14: Common Stock Dividends
Common Stock Dividends $1.32 2012 2013 2014 2015 2016 2017 YTD 2018 2Q18 Dividend Declared* Dividend per Common Share 14 * 2Q 2018 dividend of $0.34 declared 4/19/2018 with a record date of 5/11/2018 and paid 5/18/2018. $1.21 $0.67 $0.98 $0.82 $0.74 $0.69 $0.34 $0.33
Slide 15: Tangible Book Value + Cumulative Dividends
Tangible Book Value + Cumulative Dividends $50.00 40.00 30.00 $19.78 20.00 10.00 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TBV 2013 2014 2015 2016 20171Q 18 Cumulative Dividend 15 $45.31 $46.08 $29.73 $13.46 15 year increase of 242%
Slide 16: SSB Footprint Market Share
SSBFootprint Market Share Rank 1 Institution Wells Fargo & Co. Deposits Market Share 20.2% $ 36.3 Bank of America Corp. 2 24.5 22.0 13.6 3 BB&T Corp. 12.2 First Citizens BancShares Inc. 5 11.4 6.3 6 SunTrust Banks Inc. 11.1 6.2 8 United Community Banks Inc. 4.5 2.5 7 Synovus Financial Corp. 4.5 2.5
Slide 17: Economic Highlights
Economic Highlights Richmond Raleigh Greenville Charlotte Wilmington Columbia Atlanta Myrtle Beach Augusta Charleston Hilton Head Savannah 64 85 95 40 40 77 95 26 85 20 16 South State Corporation 17
Slide 18: South Carolina Population Growth
South Carolina Population Growth Projected Change 2018 - 2023 Charleston • • • # 3 Market Share $1.7 Billion Deposits 24 Branches South Carolina Myrtle Beach Charleston Hilton Head Greenville Columbia US 9.96% in Market Greenville • • • # 5 Market Share $1 Billion Deposits 17 Branches in Market Gree
Slide 19: North Carolina Population Growth
North Carolina Population Growth Projected Change 2018 - 2023 North Carolina Charlotte Raleigh 8.08% • • • # 6 Market Share $1.7 Billion Deposits 25 Branches Charlotte in Market Wilmington US Wilmington • • • # 8 Market Share $193 Million 4 Branches Deposits in Market Raleigh Charlotte Wilmington 19
Slide 20: Georgia Population Growth
Georgia Population Growth Projected Change 2018 - 2023 Georgia Augusta Savannah 6.60% • • • # 2 Market Share $1.4 Billion Deposits in Market 12 Branches Augusta US Savannah • • • # 4 Market Share $544 Million 7 Branches Deposits in Market Atlanta Augusta Savannah 20 Source: S&P Global Market Intelli
Slide 21: Virginia
Virginia Richmond + #10 Market Share + $455 Million Deposits in Market + 8 Branches Population Growth Projected Change 2018 - 2023 Vechia, I 3.705 Xichrond | 4.20% 1s I 2.50: 21 scuce: $80 Gio! Market teigence ‘S SOUTH STATE CORPORATION
Slide 22: Appendix
Appendix SOUTH STATE CORPORATION
Slide 23: Average Interest Earning Assets
AverageInterest Earning Assets % of % of Earning Assets 2.0% Earning Assets 1.3% Net Change Assets Short-Term Investments 4Q 2017 1Q 2018 $ 216 $ 166 $ (50) Investment Securities 13.5 1,459 13.4 1,666 207 Loans – Acquired 25.4 2,740 32.1 4,008 1,268 Loans – Non-acquired 58.7 6,342 52.9 6,597 255 Loa
Slide 24: Loan Portfolio Mix
Loan Portfolio Mix $10,623 $10,635 2013 2014 2015 Non Acquired 2016 Acquired* 2017 1Q 18 24 Dollars in millions *Acquired loans are net of discounts. $6,684 $4,131 $3,872 $6,763 $6,008 $5,698$5,723 $1,443 $6,492 $1,787 $2,833 $2,255 $5,241 $4,221 $3,468 $2,865
Slide 25: Acquired Loan Portfolio
AcquiredLoan Portfolio As of March 31, 2018 Carrying Va lue Average Balance Accretable Yield/Discount Balance Sheet UPB Discount $ 673.8 $ (76.5) $ 597.3 $ 603.6 $129.8 Credit Impaired 3,330.2 (55.3) 3,274.9 3,404.2 55.3 Non-Credit Impaired $4,004.0 $(131.8) $3,872.2 $4,007.8 $185.1 Total First Quar
Slide 26: Total Loans by Type
Total Loans by Type 3/31/2018 Other Income Producing Property 4.2% Cons Other 0.2% er Non-real Esta 5. Construction/ Land Development 11.9% C&I 11.6% Commercial Non-owner Occupied 18.2% Total Loans $10.64 billion Commercial Owner Occupied 17.9% Consumer Real Estate 30.6% 26
Slide 27: Pre and Post Crisis Loan Composition
PreandPost Crisis Loan Composition 12/31/2008 22.3% 18.3 14.3 10.9 3/31/2018 30.6% 17.9 18.2 11.6 Consumer Owner Occupied Commercial Commercial Commercial Owner Occupied Income Producing Non-Real Estate 11.9% Consumer Non-Real Estate Other Income Producing Loans in Transit/ Misc. 4.0 7.1 _ 5.4 4.2 0
Slide 28: Stratification of Loan Portfolio
Stratification of Loan Portfolio 100% Average Loan Size All Loans Commercial Mortgage Consumer $124 317 215 28 80 60 40 < $100 $100 - $999 20 $1,000+ # of Active Notes 0 12/31/2010 12/31/2017 28 Dollars In thousands 86,526 29,465
Slide 29: Investment Portfolio Composition
Investment Portfolio Composition State & Municipal-HTM 1% Bank Fixed Income Portfolio State & Municipal AFS 12% (AFS & HTM) Agency Mortgage-Backed Securities 70% Tax Equivalent Yield Weighted Average Life 2.6% 4.7 years 3.7 Total Carrying Value $1.64 Billion Effective Duration SBA 12% U.S. Agency/GS
Slide 30: Transaction Deposit Composition
Transaction Deposit Composition Dollar Balance Number of Accounts ~367,000 accounts Interest Bearing 59% Non-Interest Bearing $3,121 32% Non-Interest Bearing 41% Interest Bearing $6,772 68% ~259,000 accounts Dollars in millions Includes DDA’s, NOW’s, IOLTA’s, and 1031 exchange deposits. *Excludes le
Slide 31: Revenue Composition
Revenue Composition Other 13% Tr Investment Services 17% 1Q 18 Fee Income $44 Million Deposit Accounts 59% Mortgage Banking 11% 20132014 2015 2016 2017 1Q 18 Noninterest Income Net Interest Income 31 Total Income = Net Interest Income + Noninterest Income excluding negative accretion of indemnificat
Slide 32: Wealth Management
Wealth Management Assets Under Management (millions) or Care Noninterest Income (thousands) 2013 2013 2014 2014 2015 2015 117 2016 2016 4 2017 2017 $5,113 $25,401 1Q 18 1Q 18 $5,468 32 $12,661 $18,344 $20, $19,76 $7,514 $3,406 $3,828 $3,940 $4,171
Slide 33: Mortgage Banking
Mortgage Banking Production (millions) Noninterest Income (thousands) 2013 $1,668 2013 2014 2014 170 2015 2015 379 $21,761 2016 2016 404 $20,547 2017 2017 1,577 954 1Q 18 1Q 18 33 * Source: S&P Global Market Intelligence $9,149 $16, $17, $4,948 $1,195 $1, $1, $ $369
Slide 34: Branch Network
Branch Network Total branches 12/31/2009 Acquired Consolidated or sold Total branches 3/31/2018 48 201 (70) 179 Average deposits 6/30/2009 3/31/2018 per branch (in millions) $46 65 34
Slide 35: M&A History and Asset Growth
M&A History and Asset Growth Peoples Bancorporation $546 MM April 2012 Community Bank & Trust $1.0 Bn Savannah Bancorp, Inc $950 MM December 2012 Bank of America Branch Acquisition $438 MM Park Sterling Corporation $3.3 Bn January 2010 August 2015 December 2017 2010 2011 2012 2013 2014 2015 2016 201
Slide 36: Market Performance Since 2009
Market Performance Since 2009 300% 255% 225 208% 150 146% 113% 75 0 -75 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 SSB SSB Total Return SNL Southeast U.S. Bank KRX 36 Source: S&P Global Market Intelligence South State Corporation
Slide 37: Analyst Coverage
Analyst Coverage Brean Capital FIG Partners Keefe, Bruyette & Woods Piper Jaffray Sandler O’Neill Stephens SunTrust Robinson Humphrey 37
Slide 38: 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 520 Gervais Street Columbia, South Carolina 2920
Slide 39: South State Corporation
SOUTH STATE ‘CORPORATION
South State — SunTrust Robinson Humphrey 2018 Financial Services Conference on 6ix