Southstate Bank Corporation · NYSE:SSB

Southstate Bank — South State — Investor Presentation (September 2016)

50 slides from Southstate Bank's investor presentation, Sep 16, 2016

  1. Slide 1: Investor Presentation Second Quarter 2016

    South State Corporation Investor Presentation Second Quarter 2016

  2. Slide 2: Forward Looking Statements and Non GAAP Measures

    Forward Looking Statements and Non GAAP Measures 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

  3. Slide 3: South State Corporation: SSB

    South State Corporation: SSB Wilmington, Myrtle Beach, Georgetown, Charleston, Hilton Head Island, savanna,Assets - $8.7 Billion Loans - $6.4 Billion Deposits - $7.2 Billion Gainesville, Greenville, Charlotte, Atlanta, Athens, Columbia, Aiken, Augusta Florence 3 $ SOUTH STATE CORPORATION

  4. Slide 4: Market Performance Since 2009

    Market Performance Since 2009350.0300.0208.7 %174.4%250.0200.093.6%150.032.0%100.050.00.012/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15SSB Total Return SSB SNL Southeast U.S. Bank KRX4 See endnotes (1) $ SOUTH STATE CORPORATION

  5. Slide 5: 2nd Quarter 2016 Highlights

    2nd Quarter 2016 Highlights Net Income $24.5 million $1.01 per diluted share Return on Average Assets 1.13% Return on Average Tangible Equity 14.59% Operating Income $28.5 million $1.18 per diluted share Operating Return on Average Assets 1.32% Operating Return on Average Tangible Equity 16.85% Cash

  6. Slide 6: 2nd Quarter 2016 Highlights

    2nd Quarter 2016 Highlights Net Income $24.5 million $1.01 per diluted share Return on Average Assets 1.13% Return on Average Tangible Equity 14.59% Operating Income $28.5 million $1.18 per diluted share Operating Return on Average Assets 1.32% Operating Return on Average Tangible Equity 16.85% Cash

  7. Slide 7: 2nd Quarter 2016 Highlights

    2nd Quarter 2016 Highlights Net Loan Growth – 16.5% Annualized Non-Acquired Loan Growth - $344 million, 31% annualized Outpaced Acquired run-off by $253 million Non-Interest Bearing DDA Growth Increased $97 million to over $2.1 billion Asset Quality NPA’s/ Assets 0.53% Non-Acquired Net Charge-offs 0

  8. Slide 8: 2nd Quarter 2016 Highlights

    2nd Quarter 2016 Highlights Non Interest Income: $ 32.1 million Fees on Deposit Accounts21.5 Mortgage Banking5.6 Wealth Management4.9 Acquired Loan Recoveries2.0 Other Income2.5 FDIC Loss-Share Termination (4.4)8 $ SOUTH STATE CORPORATION

  9. Slide 9: Net Interest Margin

    Net Interest Margin$82.3 $83.0 $81.4 $81.6 $81.4 4.75%$85.0 80.075.04.54.52%4.32% 4.37%4.27%70.065.04.060.055.050.03.502Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 201645.0Net Interest Margin Net Interest Income9 See endnotes (2)In Millions $ SOUTH STATE CORPORATION

  10. Slide 10: Average Interest Earning Assets

    Average Interest Earning AssetsAssets (in Millions) 3/31/2016 6/30/2016 Net ChangeShort-Term Investments$ 475 $469 $(6)Investment Securities 1,022 975 (47)Loans - Acquired 1,736 1,645 (90)Loans - NonAcquired 4,330 4,624 294Total Loans 6,066 6,269 203Loans Held for Sale 34 38 4Total Interest Earning

  11. Slide 11: Branch Network

    Branch Network Total branches 12/31/2009 48 Acquired 135 Consolidated or sold (66) Total projected branches 12/31/2016 117 Average deposits per branch (in millions) Pro-forma for branch consolidations and sales 6/30/2009 $46 6/30/2016 61 11 See endnotes (3) $ SOUTH STATE CORPORATION

  12. Slide 12: Efficiency Ratio

    Efficiency Ratio%%%%%%68.0%65.062.063.2%64.4% 64.2% 64.1% 64.5%62.7% 63.2%61.2% 61.7%60.8%59.056.053.050.02Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016Efficiency Ratio Operating Efficiency Ratio (excluding one-time costs) 12 See endnotes (4) $ SOUTH STATE CORPORATION

  13. Slide 13: Earnings Per Diluted Share

    Earnings Per Diluted Share$ 5.004.003.002.001.00-2012 2013 2014 2015 2016 YTDEPS Operating EPS (Non - GAAP) 13 See endnotes (5)$4.11$4.31$3.75$3.16$3.08$2.49$2.38$2.03$2.22$2.02 $ SOUTH STATE CORPORATION

  14. Slide 14: Capital Adequacy

    Capital Adequacy % % % % % 15.0% 12.0 9.0 8.7% 8.8% 9.5% 9.2% 11.2% 10.8% 12.0% 11.7% 12.6% 12.8% 6.0 3.0 0.0 Tangible Common Equity/Assets Leverage Ratio CET 1 Ratio Tier 1 Capital Ratio Total Risk-Based Capital Ratio South State Corporation (6/30/2016) KRX Median (6/30/2016) 14 See endnotes (6) $

  15. Slide 15: Asset Quality

    Asset Quality % % 0% % % % % % % % % % % % % % % % 0% % 0% % 3.00% 2.50 2.00 1.5 1.00 0.50 0.00 2.68% 1.70% 0.74% 0.63% 0.38% 0.36% 5.00% 4.00 3.00 2.00 1.00 0.00 4.13% 2.50% 1.36% 1.02% 0.63% 0.53% 2011 2012 2013 2014 2015 2Q16 2011 2012 2013 2014 2015 2Q16 NCOs / Average Loans ALLL / NPLs NPAs / A

  16. Slide 16: Common Stock Dividends

    Common Stock Dividends 0 0 0 0 $ 1.25 1.00 .75 $0.68 $0.69 $0.74 $0.82 $0.98 $0.89 $0.31 .50 .25 $0.58 .00 2011 2012 2013 2014 2015 2016 YTD Dividend per Common Share 3Q16 Dividend Declared 16 See endnotes (8) $ SOUTH STATE CORPORATION

  17. Slide 17: Tangible Book Value + Cumulative Dividends

    Tangible Book Value + Cumulative Dividends $50.00 40.00 TOTAL RETURN 312% Cumulative Dividends TBV $40.83 30.00 $26.60 20.00 $16.08 10.00 $9.91 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16 17 $ SOUTH STATE CORPORATION

  18. Slide 18: Loan Portfolio Mix

    Loan Portfolio Mix $ 7,000 6,000 5,000 4,000 $3,631 $5,698 $5,723 $2,255 $2,833 $6,008 $1,787 $6,421 $1,604 3,000 2,000 1,000 $1,060 $2,571 $2,865 $3,468 $4,221 $4,817 0 2012 2013 2014 2015 2Q16 Non Acquired Acquired 18 See endnotes (9) 2016 YTD Net loan growth 14% annualized In $ SOUTH STATE CORPOR

  19. Slide 19: Total Loans by Type

    Total Loans by Type Other income producing property Other 1% 5% Cons non RE 8% Const/ land dev 9% Comml nonowner Linked Quarter Net Growth Const & Land Dev 65% C&I 10% Comml owner occupied 19% Total Loans $6,421 occupied 12% Consumer owner C & I 34 Comml Nonowner Occ 33 Consumer Non RE 12 occupied 2

  20. Slide 20: CRE Concentration

    CRE Concentration June 30, 2016 RegulatoryGuideline RemainingCapacity Balance % of RBC Balance % of RBC CRE $1.3 165% $2.4 300% $1.1 Construction Land & Development $0.6 73% $0.8 100% $0.2 Dollars in billions 20 See endnotes (10) $ SOUTH STATE CORPORATION

  21. Slide 21: Total Loans by Market

    Total Loans by Market Linked Quarter Net Growth Charlotte39% Inland SC26 Greenville24 Georgia10 Coastal 7 Charleston 6 21 $ SOUTH STATE CORPORATION

  22. Slide 22: Wealth Management

    Wealth Management 800+ Relationships 19,000+ Retail investment accounts 80+Team members $4,064 $3,940 $3,828 $3,406 $1,620 2Q16 2015 2014 2013 2012 Assets Under Management or Care in millions YTD See endnotes (11) $9,696 $20,117 $18,344 $12,661 $6,360 2Q16 2015 2014 2013 2012 Wealth Management Nonin

  23. Slide 23: Mortgage Banking

    Mortgage Banking $661 $1,379 $1,195 $1,668 $2,198 2Q16 2015 2014 2013 2012 Mortgage Production in millions YTD $9,818 $21,761 $16,170 $9,149 $12,545 2Q16 2015 2014 2013 2012 Mortgage Banking Noninterest Income in thousands YTD See endnotes (12) 23 $ SOUTH STATE CORPORATION

  24. Slide 24: M&A Update Southeastern Bank Financial

    M&A Update Southeastern Bank Financial Corporation $ SOUTH STATE CORPORATION

  25. Slide 25: Another Piece of the Puzzle

    Another Piece of the Puzzle GEORGIA SOUTH CAROLINA Greenville Columbia Charleston Savannah Atlanta Myrtle Beach Charlotte Raleigh NORTH CAROLINA Wilmington Augusta SSB Branch SBFC Branch Existing Markets New Market Aiken Pro Forma Highlights See endnotes (13) Assets $10.6 Bn Loans 7.4 Deposits 8.8 B

  26. Slide 26: A Stronghold in the Augusta Market

    A Stronghold in the Augusta Market Deposits Market Rank I nstitution ($mm) Share Branches Bank Branches GB&T 9 SB&T 3 Total 12 Assets: $1.9 billion Loans: 1.0 Deposits: 1.6 # Customers: 48,000 26 See endnotes (14) SBFC Highlights Augusta MSA Deposit Market Share Augusta –Richmond County, GA-SC MSA •

  27. Slide 27: Transaction Rationale

    Transaction Rationale Profitability • Low single-digit EPS accretion • Offsets impact of crossing $10.0 billion in assets • Minimal initial tangible book value dilution Soundness • Compatible culture with like-minded employees and managers • Comprehensive due diligence process and loan portfolio rev

  28. Slide 28: Crossing $10 Billion in Assets

    Crossing $10 Billion in Assets • We are continuing with other initiatives to help offset this lost revenue independent of this merger • Accelerates our growth over $10 billion Over $10 Billion Durbin Impact Through organic growth - Mid- 2018 Q3 2019 With this transaction closing - Q1 2017 Q3 2018 •

  29. Slide 29: Supplemental

    Supplemental South State Corporation

  30. Slide 30: Loan Portfolio Mix - 2Q 2016

    Loan Portfolio Mix - 2Q 2016 % 0% 0% % % 100% 80 6 4 20 0 Non Acquired Acquired Total 30 In millions $4,817 11% 12% $1,604 3% 10% 8% 9% $6,421 9% 12% 22% 19% 15% 16% 55% 31% 36% 8% 15% 9% Construction/Land Comml NonOwner Occ Comml Owner Occ Other Commercial Consumer Real Estate Other Consumer South

  31. Slide 31: Loan Portfolio Mix Trends

    Loan Portfolio Mix Trends % 0% 0% % % $3,631 $5,698 $5,723 $6,008 $6,421 100% 11% 8% 8% 8% 9% 10% 10% 11% 12% 14% 80 6 27% 20% 20% 20% 19% 14% 14% 14% 15% 4 18% 20 26% 38% 39% 38% 36% 4% 10% 9% 9% 9% 0 2012 2013 2014 2015 2Q16 31 In millions Construction/Land Comml NonOwner Occ Comml Owner Occ Other

  32. Slide 32: Transaction Deposit Mix

    Transaction Deposit Mix Account Balance in Millions Number of Accounts 109,510 accounts Non- Interest Bearing 70% Interest Bearing 30% 259,013 accounts Online Banking Mobile App users Mobile Deposits (monthly) ~ 196,000 users ~ 100,000 users (10% increase annualized) ~ 38,000 transactions (108% incr

  33. Slide 33: Investment Portfolio Mix

    Investment Portfolio Mix State & Municipal- HTM 1% State & Municipal AFS 12% U.S. Agency/GSE Debentures 10% SBA 7% Total Carrying Value $991 Million Agency Mortgage- Backed Securities 70% 33 See endnotes (16) Bank Fixed Income Portfolio (AFS & HTM) Tax Equivalent Yield 2.40% Weighted Average Life 3.

  34. Slide 34: Revenue Diversification

    Revenue Diversification Other 10% 24% 26% 23% 26% 28% 29% Trust & Investment Services 14% Mortgage Banking 15% 2016 YTD Fee Income $68 Million Deposit Accounts 61% 76% 74% 77% 74% 72% 71% 2011 2012 2013 2014 2015 2Q16 Net Interest Income Noninterest Income 34 See endnotes (17) South State Corporatio

  35. Slide 35: M&A History and Asset Growth

    M&A History and Asset Growth 2010 2011 2012 2013 2014 2015 2016 Community Bank & Trust $1.0 Bn Jan 29, 2010 Habersham Bank $360 MM Feb 18, 2011 BankMeridian, National Association $234 MM Jul 29, 2011 Peoples Bancorporation $546 MM Apr 24,2012 Savannah Bancorp, Inc $950 MM Dec 13,2012 First Financial

  36. Slide 36: Market Share

    Market Share Pro Forma Market Share (county) #1 to #5 Greater than #5 North Carolina High Point Releigh Asheville Charlotte Greenville Gainesville Athens Sourth Carolina Wilmington Atlanta Augusta Columbia Myrtle Beach Georgia Macon Charleston Georgia Savannah 36 See endnotes (18) South State Corpor

  37. Slide 37: South Carolina Market Share

    South Carolina Market Share 37 See endnotes (18) 1 Wells Fargo 19.9% • #1 exporter of passenger motor vehicles, tires, lawn mowers, and ball 2 Bank of America 14.7 and roller bearings 3 BB&T 10.3 • #1 among states for attracting jobs 4 First Citizens 9.0 from foreign investment, per capita, 5 South

  38. Slide 38: South Carolina Market Share

    South Carolina Market Share Charleston MSA Columbia MSA Greenville MSA 38 See endnotes (18) 1 Wells Fargo 18.1% 2 Bank of America 13.7 3 BB&T 11.6 4 TD Bank 9.6 5 SunTrust 6.0 6 South State Bank 5.3 7 First Citizens 5.2 8 United Community 4.6 9 Southern First 4.2 10 Travelers Rest 3.3 Total $14.8 Bi

  39. Slide 39: South Carolina Market Share

    South Carolina Market Share Hilton Head MSA Orangeburg MSA Georgetown MSA Florence MSA Greenwood MSA Sumter MSA 39 See endnotes (18) 1 Synovus 31.6% 2 Wells Fargo 22.0 3 BB&T 16.5 4 First Citizens 16.1 5 South State Bank 8.0 Total $852 Million 100% 1 Countybank 22.0% 2 Wells Fargo 17.6 3 Park Sterli

  40. Slide 40: Georgia Market Share

    Georgia Market Share Savannah MSA Augusta MSA Pro Forma Athens-Gainesville MSA Cornelia MSA 1 South State Bank 39.6% 2 United Community 22.2 3 Regions Bank 13.4 4 Bank of the Ozarks 11.9 5 Southern B & T 11.3 Total $799 Million 100% 40 See endnotes (18) 1 SunTrust 27.1% 2 Wells Fargo 18.1 3 Bank of

  41. Slide 41: North Carolina Market Share

    North Carolina Market Share Charlotte MSA Wilmington MSA 41 See endnotes (18) 1 Wells Fargo 19.8% 2 BB&T 15.1 3 Live Oak Bank 14.6 4 First Citizens 12.6 5 Bank of America 8.8 6 F.N.B. 7.1 7 PNC 5.7 8 SunTrust 4.1 9 TD Bank 3.2 10 South State Bank 2.7 Total $5.1 Billion 100% 1 Bank of America 73.7% 2

  42. Slide 42: Migration Trends by State

    Migration Trends by State Highest rates of net migration per 1,000 residents Florida 16.5 North Dakota 15.7 Nevada 13.0 Colorado 12.5 South Carolina 10.8 42 See endnotes (19) South State Corporation

  43. Slide 43: Demographic Highlights

    Demographic Highlights SC 5.40% Ranks #10 NC 4.93% Ranks #14 GA 4.84% Ranks #15 US 3.69% 43 See endnotes (20) MSA Population Growth Projected Change 2016- 2021 Myrtle Beach Charleston Hilton Head Charlotte Wilmington Savannah Greenville Columbia Augusta US 9.50% State Population Growth Projected Cha

  44. Slide 44: Economic Highlights

    Economic Highlights Population Growth Projected Change 2016-2021 5.36% South State MSA’s 3.69% US 44 NORTH CAROLINA SOUTH CAROLINA GEORGIA Gainesville Atlanta Athens Greenville Augusta Aiken Columbia Florence Wilmington Myrtle Beach Georgetown Charleston Hilton Head Island Savannah Gulfstream BOEING

  45. Slide 45: Unemployment Rates

    Unemployment Rates 14% 12 10 8 6 5.4% 5.1 4.9 4 4.9 2 0 National North Carolina South Carolina Georgia 45 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 See endnotes (21) South State Corporation

  46. Slide 46: Average Household Income

    Average Household Income North Carolina High Point Raleigh Asheville Charlotte Greenville Gainesville Athens Atlanta Columbia Wilmington Augusta Myrtel Beach Macon Georgia Gharleston Savnnah Georiga South Carolina South State Corp. Southeastern Bank Financial Corp. Average HHI$ 23,587-30,000 30,001-

  47. Slide 47: Analyst Coverage

    Analyst Coverage 47 FIG Partners Keefe, Bruyette & Woods NAB Research LLC Piper Jaffray Sandler O’Neill Stephens SunTrust Robinson Humphrey South State Corporation

  48. Slide 48: Endnotes

    Endnotes 1. Source: SNL Financial. SNL Southeast U.S. Bank index includes all major exchange traded banks headquartered in AL, AR, FL, GA, MS, NC, SC, TN, VA, and WV. The KBW Regional Bank Index (KRX) is a composition of 50 regionally diversified mid & small cap banking institutions in the U.S. and

  49. Slide 49: 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

  50. Slide 50: South State Corporation: SSB

    South State Corporation: SSB Wilmington, Myrtle Beach, Georgetown, Charleston, Hilton Head Island, savanna,Assets - $8.7 Billion Loans - $6.4 Billion Deposits - $7.2 Billion Gainesville, Greenville, Charlotte, Atlanta, Athens, Columbia, Aiken, Augusta Florence $ SOUTH STATE CORPORATION

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