SouthState Corporation Reports Third Quarter 2021 Results, Declares Quarterly Cash Dividend

Published: Oct. 27, 2021 at 3:01 PM CDT

WINTER HAVEN, Fla., Oct. 27, 2021 /PRNewswire/ -- SouthState Corporation (NASDAQ: SSB) today released its unaudited results of operations and other financial information for the three-month and nine-month periods ended September 30, 2021.

SouthState Corporation Reports Third Quarter 2021 Results
SouthState Corporation Reports Third Quarter 2021 Results

The Company reported consolidated net income of $1.74 per diluted common share for the three months ended September 30, 2021, compared to $1.39 per diluted common share for the three months ended June 30, 2021, and compared to $1.34 per diluted common share one year ago.

Adjusted net income (non-GAAP) totaled $1.94 per diluted share for the three months ended September 30, 2021, compared to $1.87 per diluted share for the three months ended June 30, 2021, and compared to $1.58 per diluted share one year ago.  Adjusted net income in the third quarter of 2021 excludes $14.1 million of merger-related costs (after-tax).

"I'm pleased with our progress in the third quarter, particularly our 10% annualized loan growth (excluding PPP loans)," said John C. Corbett, Chief Executive Officer.  "New loan production reached a record of $2.6 billion, up 72% from a year ago.  Additionally, planned cost savings from the recent systems conversion and a $5.8 million increase in core net interest income contributed to an increase of our pre-provision net revenue to $132.3 million.  With surplus cash on our balance sheet, the pending acquisition of Atlantic Capital Bank in Atlanta and strong population growth in the Southeast, we are well positioned as we head into 2022."

Highlights of the third quarter of 2021 include:

Returns

  • Reported & adjusted diluted Earnings per Share ("EPS") of $1.74 and $1.94 (Non-GAAP), respectively
  • Recorded a negative provision for credit losses of $38.9 million compared to a negative provision for credit losses of $58.8 million in the prior quarter
  • Reported & adjusted Return on Average Tangible Common Equity of 16.9% (Non-GAAP) and 18.7% (Non-GAAP), respectively
  • Pre-Provision Net Revenue ("PPNR") of $132.3 million (Non-GAAP), or 1.29% PPNR ROAA (Non-GAAP)
  • Book value per share of $68.55 increased by $0.95 per share compared to the prior quarter
  • Tangible book value ("TBV") per share of $43.98 (Non-GAAP), up $4.15, or 10.4% from a year ago quarter

Performance

  • Core net interest income (non-GAAP) (excluding loan accretion and deferred fees on PPP) increased $5.8 million from prior quarter
  • Total deposit cost of 0.09%, down 3 basis points from prior quarter
  • Noninterest income of $87.0 million, up $8.0 million compared to the prior quarter, primarily due to a $5.4 million increase in mortgage banking income and $2.2 million increase in deposit fee income

Balance Sheet / Credit

  • Loans, excluding PPP loans, increased $573.3 million, or 10.0% annualized, centered in $336.9 million growth in commercial and industrial loans and $215.5 million growth in investor commercial real estate, commercial owner occupied real estate, and single family construction to permanent loans (which are included in the construction and land development loans category)
  • Total deposits increased $318.2 million, or 3.8% annualized, with core deposit growth totaling $662.7 million, or 8.8% annualized
  • 33.8% of deposits are noninterest-bearing
  • Net loan charge-offs of $46 thousand, or 0.00% annualized

Capital Returns

  • Repurchased 485,491 shares during 3Q 2021 and approximately 120,000 shares in October 2021, at a weighted average price of $74.71, bringing total 2021 repurchases to approximately 1.31 million shares

Subsequent Events

  • Received OCC approval for the Atlantic Capital Bancshares, Inc. ("ACBI") merger, awaiting FRB and ACBI shareholders' approvals
  • Declared a cash dividend on common stock of $0.49 per share, payable on November 19, 2021 to shareholders of record as of November 12, 2021

Financial Performance
















































Three Months Ended


Nine Months Ended


(Dollars in thousands, except per share data)


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Sep. 30,


Sep. 30,


INCOME STATEMENT


2021


2021


2021


2020


2020


2021


2020


Interest income























   Loans, including fees (1)


$

246,065


$

246,177


$

259,967


$

269,632


$

280,825


$

752,209


$

581,566


   Investment securities, trading securities, federal funds sold and securities























      purchased under agreements to resell



25,384



21,364



18,509



16,738



14,469



65,257



42,092


Total interest income



271,449



267,541



278,476



286,370



295,294



817,466



623,658


Interest expense























   Deposits



7,267



9,537



11,257



13,227



15,154



28,061



42,215


   Federal funds purchased, securities sold under agreements























      to repurchase, and other borrowings



4,196



4,874



5,221



7,596



9,792



14,291



20,525


Total interest expense



11,463



14,411



16,478



20,823



24,946



42,352



62,740


Net interest income



259,986



253,130



261,998



265,547



270,348



775,114



560,918


  (Recovery) provision for credit losses



(38,903)



(58,793)



(58,420)



18,185



29,797



(156,116)



217,804


Net interest income after (recovery) provision for credit losses



298,889



311,923



320,418



247,362



240,551



931,230



343,114


Noninterest income



87,010



79,020



96,285



97,871



114,790



262,315



213,269


Noninterest expense























Pre-tax operating expense



214,672



218,707



218,702



219,719



215,225



652,080



452,977


Merger and/or branch consolid. expense



17,618



32,970



10,009



19,836



21,662



60,598



66,070


Extinguishment of debt cost





11,706









11,706




SWAP termination expense









38,787








Federal Home Loan Bank advances prepayment fee









56







199


Total noninterest expense



232,290



263,383



228,711



278,398



236,887



724,384



519,246


Income before provision for income taxes



153,609



127,560



187,992



66,835



118,454



469,161



37,137


Income taxes (benefit) provision



30,821



28,600



41,043



(19,401)



23,233



100,464



2,741


Net income


$

122,788


$

98,960


$

146,949


$

86,236


$

95,221


$

368,697


$

34,396

























Adjusted net income (non-GAAP) (2)























Net income (GAAP)


$

122,788


$

98,960


$

146,949


$

86,236


$

95,221


$

368,697


$

34,396


Securities gains, net of tax



(51)



(28)





(29)



(12)



(79)



(12)


Income taxes benefit - carryback tax loss









(31,468)








FHLB prepayment penalty, net of tax









46







154


SWAP termination expense, net of tax









31,784








Initial provision for credit losses - NonPCD loans and UFC















92,212


Merger and/or branch consolid. expense, net of tax



14,083



25,578



7,824



16,255



17,413



47,485



52,114


Extinguishment of debt cost, net of tax





9,081









9,081




Adjusted net income (non-GAAP)


$

136,820


$

133,591


$

154,773


$

102,824


$

112,622


$

425,184


$

178,864

























   Basic earnings per common share


$

1.75


$

1.40


$

2.07


$

1.22


$

1.34


$

5.22


$

0.70


   Diluted earnings per common share


$

1.74


$

1.39


$

2.06


$

1.21


$

1.34


$

5.19


$

0.69


   Adjusted net income per common share - Basic (non-GAAP) (2)


$

1.95


$

1.89


$

2.18


$

1.45


$

1.59


$

6.02


$

3.63


   Adjusted net income per common share - Diluted (non-GAAP) (2)


$

1.94


$

1.87


$

2.17


$

1.44


$

1.58


$

5.98


$

3.60


   Dividends per common share


$

0.49


$

0.47


$

0.47


$

0.47


$

0.47


$

1.43


$

1.41


   Basic weighted-average common shares outstanding



70,066,235



70,866,193



71,009,209



70,941,200



70,905,027



70,643,289



49,330,267


   Diluted weighted-average common shares outstanding



70,575,726



71,408,888



71,484,490



71,294,864



71,075,866



71,108,204



49,635,882


   Effective tax rate



20.06%



22.42%



21.83%



(29.03)%



19.61%



21.41%



7.38%


   Adjusted effective tax rate



20.06%



22.42%



21.83%



18.05%



19.61%



21.41%



7.38%


Performance and Capital Ratios














































Three Months Ended


Nine Months Ended





Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Sep. 30,


Sep. 30,





2021


2021


2021


2020


2020


2021


2020



PERFORMANCE RATIOS






















Return on average assets (annualized)



1.20

%


1.00

%


1.56

%


0.90

%


1.00

%

1.25

%

0.18

%


Adjusted return on average assets (annualized) (non-GAAP) (2)



1.34

%


1.35

%


1.64

%


1.08

%


1.18

%

1.44

%

0.93

%


Return on average equity (annualized)



10.21

%


8.38

%


12.71

%


7.45

%


8.31

%

10.41

%

1.41

%


Adjusted return on average equity (annualized) (non-GAAP) (2)



11.37

%


11.31

%


13.39

%


8.88

%


9.83

%

12.01

%

7.31

%


Return on average tangible common equity (annualized) (non-GAAP) (3)



16.86

%


14.12

%


21.16

%


13.05

%


14.66

%

17.34

%

3.51

%


Adjusted return on average tangible common equity (annualized) (non-GAAP) (2) (3)



18.68

%


18.74

%


22.24

%


15.35

%


17.14

%

19.85

%

13.58

%


Efficiency ratio (tax equivalent)



64.22

%


76.28

%


61.06

%


73.59

%


58.91

%

66.99

%

64.60

%


Adjusted efficiency ratio (non-GAAP) (4)



59.16

%


62.88

%


58.27

%


57.52

%


53.30

%

60.05

%

56.07

%


Dividend payout ratio (5)



27.94

%


33.65

%


22.72

%


38.67

%


35.01

%

27.39

%

188.71

%


Book value per common share


$

68.55


$

67.60


$

66.42


$

65.49


$

64.34







Tangible book value per common share (non-GAAP) (3)


$

43.98


$

43.07


$

42.02


$

41.16


$

39.83





























CAPITAL RATIOS






















Equity-to-assets



11.7

%


11.8

%


11.9

%


12.3

%


12.1

%






Tangible equity-to-tangible assets (non-GAAP) (3)



7.8

%


7.8

%


7.9

%


8.1

%


7.8

%






Tier 1 leverage (6) *



8.1

%


8.1

%


8.5

%


8.3

%


8.1

%






Tier 1 common equity (6) *



11.9

%


12.1

%


12.2

%


11.8

%


11.5

%






Tier 1 risk-based capital (6) *



11.9

%


12.1

%


12.2

%


11.8

%


11.5

%






Total risk-based capital (6) *



13.7

%


14.1

%


14.5

%


14.2

%


13.9

%




























OTHER DATA






















Number of branches



281



281



281



285



305








*The regulatory capital ratios presented above include the assumption of the transitional method relative to the CARES Act in relief of COVID-19
pandemic on the economy and financial institutions in the United States.  The referenced relief allows a total five-year "phase in" of the CECL
impact on capital and relief over the next two years for the impact on the allowance for credit losses resulting from COVID-19.

Balance Sheet




































Ending Balance


(Dollars in thousands, except per share and share data)


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


BALANCE SHEET


2021


2021


2021


2020


2020


Assets

















   Cash and due from banks


$

597,321


$

529,434


$

392,556


$

363,306


$

344,389


   Federal Funds Sold and interest-earning deposits with banks



5,701,002



5,875,078



5,581,581



4,245,949



4,127,250


Cash and cash equivalents



6,298,323



6,404,512



5,974,137



4,609,255



4,471,639



















Trading securities, at fair value



61,294



89,925



83,947



10,674




Investment securities:

















   Securities held-to-maturity



1,641,485



1,189,265



1,214,313



955,542.00




   Securities available for sale, at fair value



4,631,554



4,369,159



3,891,490



3,330,672



3,561,929


   Other investments



160,592



160,607



161,468



160,443



185,199


               Total investment securities



6,433,631



5,719,031



5,267,271



4,446,657



3,747,128


Loans held for sale



242,813



171,447



352,997



290,467



456,141


Loans:

















Purchased credit deteriorated



2,255,874



2,434,259



2,680,466



2,915,809



3,143,822


Purchased non-credit deteriorated



6,554,647



7,457,950



8,433,913



9,458,869



10,557,907


Non-acquired



14,978,428



14,140,869



13,377,086



12,289,456



11,536,086


    Less allowance for credit losses



(314,144)



(350,401)



(406,460)



(457,309)



(440,159)


               Loans, net



23,474,805



23,682,677



24,085,005



24,206,825



24,797,656


Other real estate owned ("OREO")



3,687



5,039



11,471



11,914



13,480


Premises and equipment, net



569,817



568,473



569,171



579,239



626,259


Bank owned life insurance



778,552



773,452



562,624



559,368



556,475


Mortgage servicing rights



60,922



57,351



54,285



43,820



34,578


Core deposit and other intangibles



136,584



145,126



153,861



162,592



171,637


Goodwill



1,581,085



1,581,085



1,579,758



1,563,942



1,566,524


Other assets



1,262,195



1,177,751



1,035,805



1,305,120



1,377,849


                Total assets


$

40,903,708


$

40,375,869


$

39,730,332


$

37,789,873


$

37,819,366



















Liabilities and Shareholders' Equity

















Deposits:

















   Noninterest-bearing


$

11,333,881


$

11,176,338


$

10,801,812


$

9,711,338


$

9,681,095


   Interest-bearing



22,226,677



22,066,031



21,639,598



20,982,544



20,288,859


               Total deposits



33,560,558



33,242,369



32,441,410



30,693,882



29,969,954


Federal funds purchased and securities

















   sold under agreements to repurchase



859,736



862,429



878,581



779,666



706,723


Other borrowings



326,807



351,548



390,323



390,179



1,089,637


Reserve for unfunded commitments



28,289



30,981



35,829



43,380



43,161


Other liabilities



1,335,377



1,130,919



1,264,369



1,234,886



1,446,478


               Total liabilities



36,110,767



35,618,247



35,010,512



33,141,993



33,255,953



















Shareholders' equity:

















   Common stock - $2.50 par value; authorized 160,000,000 shares



174,795



175,957



177,651



177,434



177,321


   Surplus



3,693,622



3,720,946



3,772,248



3,765,406



3,764,482


   Retained earnings



925,044



836,584



770,952



657,451



604,564


   Accumulated other comprehensive income (loss)



(520)



24,136



(1,031)



47,589



17,046


               Total shareholders' equity



4,792,941



4,757,623



4,719,820



4,647,880



4,563,413


               Total liabilities and shareholders' equity


$

40,903,708


$

40,375,869


$

39,730,332


$

37,789,873


$

37,819,366



















Common shares issued and outstanding



69,918,037



70,382,728



71,060,446



70,973,477



70,928,304


Net Interest Income and Margin






















































Three Months Ended




Sep. 30, 2021


Jun. 30, 2021


Sep. 30, 2020


(Dollars in thousands)


Average


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/


YIELD ANALYSIS


Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


Rate


Interest-Earning Assets:


























Federal funds sold and interest-earning deposits with banks


$

6,072,760


$

2,199


0.14%


$

5,670,674


$

1,350


0.10%


$

4,406,376


$

1,215


0.11%


Investment securities



6,084,812



23,185


1.51%



5,371,985



20,014


1.49%



3,227,988



13,254


1.63%


Loans held for sale



184,547



1,307


2.81%



281,547



1,977


2.82%



556,670



4,151


2.97%


Total loans, excluding PPP



22,937,207



226,083


3.91%



22,588,076



225,664


4.01%



23,021,394



260,527


4.50%


Total PPP loans



939,111



18,675


7.89%



1,719,323



18,536


4.32%



2,291,238



16,147


2.80%


Total loans held for investment



23,876,318



244,758


4.07%



24,307,399



244,200


4.03%



25,312,632



276,674


4.35%


     Total interest-earning assets



36,218,437



271,449


2.97%



35,631,605



267,541


3.01%



33,503,666



295,294


3.51%


Noninterest-earning assets



4,375,329








4,201,147








4,361,551







     Total Assets


$

40,593,766







$

39,832,752







$

37,865,217

































Interest-Bearing Liabilities:


























Transaction and money market accounts


$

15,908,784


$

3,110


0.08%


$

15,453,940


$

4,513


0.12%


$

13,671,430


$

7,853


0.23%


Savings deposits



3,126,055



241


0.03%



2,995,871



453


0.06%



2,561,605



584


0.09%


Certificates and other time deposits



3,256,488



3,916


0.48%



3,408,778



4,571


0.54%



4,016,437



6,717


0.67%


Federal funds purchased and repurchase agreements



860,810



259


0.12%



914,641



323


0.14%



710,369



509


0.29%


Other borrowings



334,256



3,937


4.67%



368,897



4,551


4.95%



1,089,399



9,283


3.39%


     Total interest-bearing liabilities



23,486,393



11,463


0.19%



23,142,127



14,411


0.25%



22,049,240



24,946


0.45%


Noninterest-bearing liabilities ("Non-IBL")



12,333,922








11,951,384








11,259,916







Shareholders' equity



4,773,451








4,739,241








4,556,061







     Total Non-IBL and shareholders' equity



17,107,373








16,690,625








15,815,977







     Total Liabilities and Shareholders' Equity


$

40,593,766







$

39,832,752







$

37,865,217







Net Interest Income and Margin (Non-Tax Equivalent)





$

259,986


2.85%





$

253,130


2.85%





$

270,348


3.21%


Net Interest Margin (Tax Equivalent)








2.86%








2.87%








3.22%


Total Deposit Cost (without Debt and Other Borrowings)








0.09%








0.12%








0.20%


Overall Cost of Funds (including Demand Deposits)








0.13%








0.17%








0.31%




























Total Accretion on Acquired Loans (1)





$

5,243







$

6,292







$

22,445




Total Deferred Fees on PPP Loans





$

16,369







$

14,232







$

8,533




TEFRA (included in NIM, Tax Equivalent)





$

1,477







$

1,424







$

734






(1)

The remaining loan discount on acquired loans to be accreted into loan interest income totals $75.7 million and the remaining net deferred fees on PPP loans totals $9.5 million as of September 30, 2021.

Noninterest Income and Expense
















































Three Months Ended


Nine Months Ended




Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Sep. 30,


Sep. 30,


(Dollars in thousands)


2021


2021


2021


2020


2020


2021


2020


Noninterest Income:























   Fees on deposit accounts


$

26,130


$

23,936


$

25,282


$

25,153


$

24,346


$

75,348


$

59,166


   Mortgage banking income



15,560



10,115



26,880



25,162



48,022



52,555



81,040


   Trust and investment services income



9,150



9,733



8,578



7,506



7,404



27,461



21,931


   Securities gains, net



64



36





35



15



100



15


   Correspondent banking and capital market income



25,164



25,877



28,748



27,751



26,432



79,789



36,992


   Bank owned life insurance income



5,132



5,047



3,300



3,341



4,127



13,478



8,038


   Other



5,810



4,276



3,498



8,923



4,444



13,584



6,087


         Total Noninterest Income


$

87,010


$

79,020


$

96,286


$

97,871


$

114,790


$

262,315


$

213,269

























Noninterest Expense:























   Salaries and employee benefits


$

136,969


$

137,379


$

140,361


$

138,982


$

134,919


$

414,709


$

277,617


   Swap termination expense









38,787








   Occupancy expense



23,135



22,844



23,331



23,496



23,845



69,310



52,091


   Information services expense



18,061



19,078



18,789



19,527



18,855



55,928



40,317


   FHLB prepayment penalty









56







199


   OREO expense and loan related



1,527



240



1,002



728



1,146



2,769



2,840


   Business development and staff related



4,424



4,305



3,371



3,835



2,599



12,100



6,290


   Amortization of intangibles



8,543



8,968



9,164



9,760



9,560



26,675



17,232


   Professional fees



2,415



2,301



3,274



4,306



4,385



7,990



9,727


   Supplies and printing expense



2,310



2,500



2,670



2,809



2,755



7,480



5,870


   FDIC assessment and other regulatory charges



4,245



4,931



3,841



3,403



2,849



13,017



7,310


   Advertising and marketing



2,185



1,659



1,740



1,544



1,203



5,584



2,548


   Other operating expenses



10,858



14,502



11,159



11,329



13,109



36,518



31,135


   Branch consolidation and merger expense



17,618



32,970



10,009



19,836



21,662



60,598



66,070


   Extinguishment of debt cost





11,706









11,706




         Total Noninterest Expense


$

232,290


$

263,383


$

228,711


$

278,398


$

236,887


$

724,384


$

519,246


Loans and Deposits


















The following table presents a summary of the loan portfolio by type (dollars in thousands):






















Ending Balance


(Dollars in thousands)


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


LOAN PORTFOLIO


2021


2021


2021


2020


2020


Construction and land development*


$

2,032,731


$

1,947,646


$

1,888,240


$

1,890,846


$

1,829,345


Investor commercial real estate*



7,131,192



7,094,109



6,978,326



7,007,146



7,050,104


Commercial owner occupied real estate



4,988,490



4,895,189



4,817,346



4,832,697



4,836,405


Commercial and industrial, excluding PPP



3,458,520



3,121,625



3,140,893



3,112,848



3,066,551


Consumer real estate*



4,733,567



4,748,693



4,835,567



4,974,808



5,195,978


Consumer/other



943,243



907,181



885,320



912,327



907,711


Subtotal



23,287,743



22,714,443



22,545,692



22,730,672



22,886,094


PPP loans



501,206



1,318,635



1,945,773



1,933,462



2,351,721


Total Loans


$

23,788,949


$

24,033,078


$

24,491,465


$

24,664,134


$

25,237,815



As a result of the conversion of legacy CenterState's core system to the Company's core system completed in 2Q 2021, several loans were reclassified to conform with the Company's loan segmentation, most notably residential investment loans which were reclassed from consumer real estate to investor commercial real estate.  All periods prior to 2Q 2021 presented above were revised to conform with the current loan segmentation.


* Single family home construction-to-permanent loans originated by the Company's mortgage banking division are included in construction and land development category until completion.  Investor commercial real estate loans include commercial non-owner occupied real estate and other income producing property.  Consumer real estate includes consumer owner occupied real estate and home equity loans.




















Ending Balance


(Dollars in thousands)


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


DEPOSITS


2021


2021


2021


2020


2020


Noninterest-bearing checking


$

11,333,881


$

11,176,338


$

10,801,812


$

9,711,338


$

9,681,095


Interest-bearing checking



7,920,236



7,651,433



7,369,066



6,955,575



6,414,905


Savings



3,201,543



3,051,229



2,906,673



2,694,010



2,618,877


Money market



8,110,162



8,024,117



7,884,132



7,584,353



7,404,299


Time deposits



2,994,736



3,339,252



3,479,727



3,748,605



3,850,778


Total Deposits


$

33,560,558


$

33,242,369


$

32,441,410


$

30,693,881


$

29,969,954



















Core Deposits (excludes Time Deposits)


$

30,565,822


$

29,903,117


$

28,961,683


$

26,945,276


$

26,119,176


Asset Quality



















Ending Balance




Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


(Dollars in thousands)


2021


2021


2021


2020


2020


NONPERFORMING ASSETS:

















Non-acquired

















Non-acquired nonperforming loans


$

25,529


$

16,624


$

21,034


$

29,171


$

22,463


Non-acquired OREO and other nonperforming assets



364



695



654



688



825


Total non-acquired nonperforming assets



25,893



17,319



21,688



29,859



23,288


Acquired

















Acquired nonperforming loans



64,672



69,053



80,024



77,668



89,974


Acquired OREO and other nonperforming assets



3,804



4,777



11,292



11,568



12,904


Total acquired nonperforming assets



68,476



73,830



91,316



89,236



102,878


Total nonperforming assets


$

94,369


$

91,149


$

113,004


$

119,095


$

126,166





















Three Months Ended




Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,




2021


2021


2021


2020


2020


ASSET QUALITY RATIOS:

















Allowance for credit losses as a percentage of loans



1.32%



1.46%



1.66%



1.85%



1.74%


Allowance for credit losses as a percentage of loans, excluding PPP loans



1.35%



1.54%



1.80%



2.01%



1.92%


Allowance for credit losses as a percentage of nonperforming loans



348.27%



408.98%



402.20%



428.04%



391.47%


Net (recoveries) charge-offs as a percentage of average loans (annualized)



0.00%



0.03%



(0.00)%



0.01%



0.01%


Total nonperforming assets as a percentage of total assets



0.23%



0.23%



0.28%



0.32%



0.33%


Nonperforming loans as a percentage of period end loans



0.38%



0.36%



0.41%



0.43%



0.45%


 

Current Expected Credit Losses ("CECL")





















Below is a table showing the roll forward of the ACL and UFC for the third quarter of 2021:





Allowance for Credit Losses ("ACL & UFC")




NonPCD ACL


PCD ACL


Total


UFC


Ending Balance 6/30/2021


$

245,368


$

105,033


$

350,401


$

30,981


Charge offs



(2,722)





(2,722)




Acquired charge offs



(558)



(567)



(1,125)




Recoveries



1,512





1,512




Acquired recoveries



540



1,749



2,289




Provision for credit losses



(22,759)



(13,452)



(36,211)



(2,692)


Ending balance 9/30/2021


$

221,381


$

92,763


$

314,144


$

28,289
















Period end loans (includes PPP Loans)


$

21,533,075


$

2,255,874


$

23,788,949



N/A


Reserve to Loans (includes PPP Loans)



1.03%



4.11%



1.32%



N/A


Period end loans (excludes PPP Loans)


$

21,031,869


$

2,255,874


$

23,287,743



N/A


Reserve to Loans (excludes PPP Loans)



1.05%



4.11%



1.35%



N/A


Unfunded commitments (off balance sheet) *











$

5,497,678


Reserve to unfunded commitments (off balance sheet)












0.51%



* Unfunded commitments exclude unconditionally cancelable commitments and letters of credit.

Conference Call

The Company will host a conference call to discuss its third quarter results at 10:00 a.m. Eastern Time on October 28, 2021.  Management from Atlantic Capital Bancshares, Inc. will participate in this call to provide some commentary on its financial results for the quarter.  Callers wishing to participate may call toll-free by dialing 844-200-6205.  The number for international participants is (929) 526-1599.  The conference ID number is 311263.   Alternatively, individuals may listen to the live webcast of the presentation by visiting SouthStateBank.com.   An audio replay of the live webcast is expected to be available by the evening of October 28, 2021 on the Investor Relations section of SouthStateBank.com.

SouthState Corporation is a financial services company headquartered in Winter Haven, Florida.  SouthState Bank, N.A., the Company's nationally chartered bank subsidiary, provides consumer, commercial, mortgage and wealth management solutions to more than one million customers throughout Florida, Alabama, Georgia, the Carolinas and Virginia.  The Bank also serves clients coast to coast through its correspondent banking division.  Additional information is available at SouthStateBank.com.

Non-GAAP Measures

Statements included in this press release include non-GAAP measures and should be read along with the accompanying tables that provide a reconciliation of non-GAAP measures to GAAP measures.  Management believes that these non-GAAP measures provide additional useful information, which allows readers to evaluate the ongoing performance of the Company.  Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company.  Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results or financial condition as reported under GAAP.






















(Dollars in thousands)





















PRE-PROVISION NET REVENUE ("PPNR") (NON-GAAP)


Sep. 30, 2021



Jun. 30, 2021



Mar. 31, 2021



Dec. 31, 2020



Sep 30, 2020


Net income (GAAP)


$

122,788



$

98,960



$

146,949



$

86,236



$

95,221


(Recovery) provision for credit losses



(38,903)




(58,793)




(58,420)




18,185




29,797


Tax provision (benefit)



30,821




28,600




41,043




(19,401)




23,233


Merger-related costs



17,618




32,970




10,009




19,836




21,662


Extinguishment of debt costs






11,706











Securities gains



(64)




(36)







(35)




(15)


FHLB advance prepayment cost












56





Swap termination cost












38,787





Pre-provision net revenue (PPNR) (Non-GAAP)


$

132,260



$

113,407



$

139,581



$

143,664



$

169,898























Average asset balance (GAAP)


$

40,593,766



$

39,832,752



$

38,245,410



$

38,027,111



$

37,865,217























PPNR ROAA



1.29

%



1.14

%



1.48

%



1.50

%



1.79

%
































Three Months Ended



Nine Months Ended


(Dollars in thousands, except per share data)


Sep. 30,



Jun. 30,



Mar. 31,



Dec. 31,



Sep. 30,



Sep. 30,



Sep. 30,


RECONCILIATION OF GAAP TO NON-GAAP


2021



2021



2021



2020



2020



2021



2020


Adjusted Net Income (non-GAAP) (2)





























Net income (GAAP)


$

122,788



$

98,960



$

146,949



$

86,236



$

95,221



$

368,697



$

34,396


Securities gains, net of tax



(51)




(28)







(29)




(12)




(79)




(12)


PCL - NonPCD loans & unfunded commitments





















92,212


Swap termination expense, net of tax












31,784











Benefit for income taxes - carryback tax loss












(31,468)











FHLB prepayment penalty, net of tax












46










154


Merger and branch consolidation/acq. expense, net of tax



14,083




25,578




7,824




16,255




17,413




47,485




52,114


Extinguishment of debt cost, net of tax






9,081













9,081





Adjusted net income (non-GAAP)


$

136,820



$

133,591



$

154,773



$

102,824



$

112,622



$

425,184



$

178,864































Adjusted Net Income per Common Share - Basic (2)





























Earnings per common share - Basic (GAAP)


$

1.75



$

1.40



$

2.07



$

1.22



$

1.34



$

5.22



$

0.70


Effect to adjust for securities gains



(0.00)




(0.00)







(0.00)




(0.00)




(0.00)




(0.00)


Effect to adjust for PCL - NonPCD loans & unfunded commitments





















1.87


Effect to adjust for swap termination expense, net of tax












0.45











Effect to adjust for benefit for income taxes - carryback tax loss












(0.44)











Effect to adjust for FHLB prepayment penalty, net of tax












0.00










0.00


Effect to adjust for merger & branch consol./acq expenses, net of tax



0.20




0.36




0.11




0.23




0.25




0.67




1.06


Effect to adjust for extinguishment of debt cost






0.13













0.13





Adjusted net income per common share - Basic (non-GAAP)


$

1.95



$

1.89



$

2.18



$

1.45



$

1.59



$

6.02



$

3.62































Adjusted Net Income per Common Share - Diluted (2)





























Earnings per common share - Diluted (GAAP)


$

1.74



$

1.39



$

2.06



$

1.21



$

1.34



$

5.19



$

0.69


Effect to adjust for securities gains



(0.00)




(0.00)







(0.00)




(0.00)




(0.00)




(0.00)


Effect to adjust for PCL - NonPCD loans & unfunded commitments





















1.86


Effect to adjust for swap termination expense, net of tax












0.45











Effect to adjust for benefit for income taxes - carryback tax loss












(0.44)











Effect to adjust for FHLB prepayment penalty, net of tax












0.00










0.00


Effect to adjust for merger & branch consol./acq expenses, net of tax



0.20




0.35




0.11




0.23




0.24




0.66




1.06


Effect to adjust for extinguishment of debt cost






0.13













0.13





Adjusted net income per common share - Diluted (non-GAAP)


$

1.94



$

1.87



$

2.17



$

1.44



$

1.58



$

5.98



$

3.60































Adjusted Return on Average Assets (2)





























Return on average assets (GAAP)



1.20

%



1.00

%



1.56

%



0.90

%



1.00

%



1.25

%



0.18

%

Effect to adjust for securities gains



(0.00)

%



(0.00)

%



%



(0.00)

%



(0.00)

%



(0.00)

%



(0.00)

%

Effect to adjust for PCL - NonPCD loans & unfunded commitments



%



%



%



%



%



%



0.48

%

Effect to adjust for swap termination expense



%



%



%



0.33

%



%



%



%

Effect to adjust for benefit for income taxes - carryback tax loss



%



%



%



(0.33)

%



%



%



%

Effect to adjust for FHLB prepayment penalty, net of tax



%



%



%



0.00

%



%



%



0.00

%

Effect to adjust for merger & branch consol./acq expenses, net of tax



0.14

%



0.26

%



0.08

%



0.18

%



0.18

%



0.16

%



0.27

%

Effect to adjust for extinguishment of debt cost



%



0.09

%



%



%



%



0.03

%



%

Adjusted return on average assets (non-GAAP)



1.34

%



1.35

%



1.64

%



1.08

%



1.18

%



1.44

%



0.93

%






























Adjusted Return on Average Equity (2)





























Return on average equity (GAAP)



10.21

%



8.38

%



12.71

%



7.45

%



8.31

%



10.41

%



1.41

%

Effect to adjust for securities gains



(0.00)

%



(0.00)

%



%



(0.00)

%



(0.00)

%



(0.00)

%



(0.00)

%

Effect to adjust for PCL - NonPCD loans & unfunded commitments



%



%



%



%



%



%



3.77

%

Effect to adjust for swap termination expense



%



%



%



2.74

%



%



%



%

Effect to adjust for benefit for income taxes - carryback tax loss



%



%



%



(2.72)

%



%



%



%

Effect to adjust for FHLB prepayment penalty, net of tax



%



%



%



(0.00)

%



%



%



0.01

%

Effect to adjust for merger & branch consol./acq expenses, net of tax



1.16

%



2.16

%



0.68

%



1.41

%



1.52

%



1.34

%



2.12

%

Effect to adjust for extinguishment of debt cost



%



0.77

%



%



%






0.26

%



%

Adjusted return on average equity (non-GAAP)



11.37

%



11.31

%



13.39

%



8.88

%



9.83

%



12.01

%



7.31

%






























Adjusted Return on Average Common Tangible Equity (2) (3)





























Return on average common equity (GAAP)



10.21

%



8.38

%



12.71

%



7.45

%



8.31

%



10.41

%



1.41

%

Effect to adjust for securities gains



(0.00)

%



(0.00)

%



%



(0.00)

%



(0.00)

%



(0.00)

%



(0.00)

%

Effect to adjust for PCL - NonPCD loans & unfunded commitments



%



%



%



%



%



%



3.77

%

Effect to adjust for swap termination expense



%



%



%



2.74

%



%



%



%

Effect to adjust for benefit for income taxes - carryback tax loss



%



%



%



(2.72)

%



%



%



%

Effect to adjust for FHLB prepayment penalty, net of tax



%



%



%



%



%



%



0.01

%

Effect to adjust for merger & branch consol./acq expenses, net of tax



1.17

%



2.16

%



0.68

%



1.40

%



1.52

%



1.34

%



2.13

%

Effect to adjust for extinguishment of debt cost



%



0.77

%



%



%






0.26

%



%

Effect to adjust for intangible assets



7.30

%



7.43

%



8.85

%



6.48

%



7.31

%



7.84

%



6.26

%

Adjusted return on average common tangible equity (non-GAAP)



18.68

%



18.74

%



22.24

%



15.35

%



17.14

%



19.85

%



13.58

%

































Three Months Ended



Nine Months Ended


(Dollars in thousands, except per share data)


Sep. 30,



Jun. 30,



Mar. 31,



Dec. 31,



Sep. 30,



Sep. 30,



Sep. 30,


RECONCILIATION OF GAAP TO NON-GAAP


2021



2021



2021



2020



2020



2021



2020


Adjusted Efficiency Ratio (4)





























Efficiency ratio



64.22

%



76.28

%



61.06

%



73.59

%



58.91

%



66.99

%



64.60

%

Effect to adjust for merger and branch consolidation related expenses



(5.06)

%



(13.38)

%



(2.79)

%



(16.07)

%



(5.61)

%



(6.94)

%



(8.52)

%

Adjusted efficiency ratio



59.16

%



62.88

%



58.26

%



57.52

%



53.30

%



60.05

%



56.07

%






























Tangible Book Value Per Common Share (3)





























Book value per common share (GAAP)


$

68.55



$

67.60



$

66.42



$

65.49



$

64.34










Effect to adjust for intangible assets



(24.57)




(24.53)




(24.40)




(24.33)




(24.51)










Tangible book value per common share (non-GAAP)


$

43.98



$

43.07



$

42.02



$

41.16



$

39.83







































Tangible Equity-to-Tangible Assets (3)





























Equity-to-assets (GAAP)



11.72

%



11.78

%



11.88

%



12.30

%



12.07

%









Effect to adjust for intangible assets



(3.87)

%



(3.94)

%



(4.02)

%



(4.20)

%



(4.24)

%









Tangible equity-to-tangible assets (non-GAAP)



7.85

%



7.84

%



7.86

%



8.10

%



7.83

%









Certain prior period information has been reclassified to conform to the current period presentation, and these reclassifications had no impact on net income or equity as previously reported.

Footnotes to tables:

(1)

Includes loan accretion (interest) income related to the discount on acquired loans of $5.2 million, $6.3 million, $10.4 million, $12.7 million, and $22.4 million, respectively, during the five quarters above.



(2)

Adjusted earnings, adjusted return on average assets, adjusted EPS, and adjusted return on average equity are non-GAAP measures and exclude the gains or losses on sales of securities, FHLB Advances prepayment penalty, initial provision for credit losses on non-PCD loans and unfunded commitments, income tax benefit related to the carryback of tax losses under the CARES Act, swap termination expense, extinguishment of debt cost and merger and branch consolidation related expense.  Management believes that non-GAAP adjusted measures provide additional useful information that allows readers to evaluate the ongoing performance of the company.  Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company.  Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results or financial condition as reported under GAAP.  Adjusted earnings and the related adjusted return measures (non-GAAP) exclude the following from net income (GAAP) on an after-tax basis:  (a) pre-tax merger and branch consolidation related expense of $17.6 million, $33.0 million, $10.0 million, $19.8 million, and $21.7 million for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively; (b) net securities gains of $64,000, $36,000, $35,000 and $15,000 for the quarters ended September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020, respectively; (c) FHLB prepayment penalty of $56,000 for the quarter ended December 31, 2020; and (d) swap termination expense of $38.8 million for the quarter ended December 31, 2020; (e) tax carryback losses under the CARES Act of $31.5 million for the quarter ended December 31, 2020.



(3)

The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets.  The tangible returns on equity and common equity measures also add back the after-tax amortization of intangibles to GAAP basis net income.  Management believes that these non-GAAP tangible measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities.  Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company.  Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results or financial condition as reported under GAAP. The sections titled "Reconciliation of Non-GAAP to GAAP" provide tables that reconcile non-GAAP measures to GAAP.



(4)

Adjusted efficiency ratio is calculated by taking the noninterest expense excluding swap termination expense, branch consolidation cost and merger cost, extinguishment of debt cost, tax carryback losses under the CARES Act, amortization of intangible assets, and the FHLB prepayment penalty divided by net interest income and noninterest income excluding securities gains (losses). The pre-tax amortization expenses of intangible assets were $8.5 million, $9.0 million, $9.2 million, $9.8 million, and $9.6 million, for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.



(5)

The dividend payout ratio is calculated by dividing total dividends paid during the period by the total net income for the same period.



(6)

September 30, 2021 ratios are estimated and may be subject to change pending the final filing of the FR Y-9C; all other periods are presented as filed.



(7)

Loan data excludes mortgage loans held for sale.

Cautionary Statement Regarding Forward Looking 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 Exchange Act of 1934. Forward-looking statements are based on, among other things, management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and SouthState. Words and phrases such as "may," "approximately," "continue," "should," "expects," "projects," "anticipates," "is likely," "look ahead," "look forward," "believes," "will," "intends," "estimates," "strategy," "plan," "could," "potential," "possible" and variations of such words and similar expressions are intended to identify such forward-looking statements. SouthState cautions readers that forward-looking statements are subject to certain risks, uncertainties and assumptions that are difficult to predict with regard to, among other things, timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, the following: (1) economic downturn risk, potentially resulting in deterioration in the credit markets, greater than expected noninterest expenses, excessive loan losses and other negative consequences, which risks could be exacerbated by potential continued negative economic developments resulting from the Covid19 pandemic, or from federal spending cuts and/or one or more federal budget-related impasses or actions; (2) interest rate risk primarily resulting from the low interest rate environment and historically low yield curve primarily due to government programs in place under the CARES Act and otherwise in response to the Covid19 pandemic, and their impact on the Bank's earnings, including from the correspondent and mortgage divisions, housing demand, the market value of the bank's loan and securities portfolios, and the market value of SouthState's equity; (3) risks related to the merger and integration of SouthState and CSFL including, among others, (i) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (ii) the risk that the integration of each party's operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party's businesses into the other's businesses, (iii) the amount of the costs, fees, expenses and charges related to the merger, (iv) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the merger, (3) risks related to the merger and integration of SouthState and Atlantic Capital including, among others, (i) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (ii) disruption to the parties' businesses as a result of the announcement and pendency of the merger, (iii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, (iv) the risk that the integration of each party's operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party's businesses into the other's businesses, (v) the failure to obtain the necessary approvals by the shareholders of SouthState or Atlantic Capital, (vi) the amount of the costs, fees, expenses and charges related to the merger, (vii) the ability by each of SouthState and Atlantic Capital to obtain required governmental approvals of the merger (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction),  (viii) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the merger, (ix) the failure of the closing conditions in the merger agreement to be satisfied, or any unexpected delay in closing the merger, (x) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (xi) the dilution caused by SouthState's issuance of additional shares of its common stock in the merger, (xii) general competitive, economic, political and market conditions, and (xiii) other factors that may affect future results of Atlantic Capital and SouthState including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency and legislative and regulatory actions and reforms (4) risks relating to the continued impact of the Covid19 pandemic on the company, including possible impact to the company and its employees from contacting Covid19, and to efficiencies and the control environment due to the continued work from home environment and to our results of operations due to government stimulus and other interventions to blunt the impact of the pandemic; (5) the impact of increasing digitization of the banking industry and movement of customers to on-line platforms, and the possible impact on the Bank's results of operations, customer base, expenses, suppliers and operations; (6) controls and procedures risk, including the potential failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures; (7) potential deterioration in real estate values; (8) the impact of competition with other financial institutions, including pricing pressures (including those resulting from the CARES Act) and the resulting impact, including as a result of compression to net interest margin; (9) risks relating to the ability to retain our culture and attract and retain qualified people; (10) credit risks associated with an obligor's failure to meet the terms of any contract with the bank or otherwise fail to perform as agreed under the terms of any loan-related document; (11) risks related to the ability of the company to pursue its strategic plans which depend upon certain growth goals in our lines of business; (12) liquidity risk affecting the Bank's ability to meet its obligations when they come due; (13) risks associated with an anticipated increase in SouthState's investment securities portfolio, including risks associated with acquiring and holding investment securities or potentially determining that the amount of investment securities SouthState desires to acquire are not available on terms acceptable to SouthState; (14) price risk focusing on changes in market factors that may affect the value of traded instruments in "mark-to-market" portfolios; (15) transaction risk arising from problems with service or product delivery; (16) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; (17) regulatory change risk resulting from new laws, rules, regulations, accounting principles, proscribed practices or ethical standards, including, without limitation, the possibility that regulatory agencies may require higher levels of capital above the current regulatory-mandated minimums and including the impact of the CARES Act, the Consumer Financial Protection Bureau regulations, and the possibility of changes in accounting standards, policies, principles and practices, including changes in accounting principles relating to loan loss recognition (CECL); (18) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (19) reputation risk that adversely affects earnings or capital arising from negative public opinion; (20) cybersecurity risk related to the dependence of SouthState on internal computer systems and the technology of outside service providers, as well as the potential impacts of internal or external security breaches, which may subject the company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events; (21) reputational and operational risks associated with environment, social and governance matters; (22) greater than expected noninterest expenses; (23) excessive loan losses; (24) potential deposit attrition, higher than expected costs, customer loss and business disruption associated with the Atlantic Capital integration, and potential difficulties in maintaining relationships with key personnel; (25) the risks of fluctuations in market prices for SouthState common stock that may or may not reflect economic condition or performance of SouthState; (26) the payment of dividends on SouthState common stock, which is subject to legal and regulatory limitations as well as the discretion of the board of directors of SouthState, SouthState's performance and other factors; (27) ownership dilution risk associated with potential acquisitions in which SouthState's stock may be issued as consideration for an acquired company; (28) operational, technological, cultural, regulatory, legal, credit and other risks associated with the exploration, consummation and integration of potential future acquisition, whether involving stock or cash consideration; (29) major catastrophes such as hurricanes, tornados, earthquakes, floods or other natural or human disasters, including infectious disease outbreaks, including the ongoing Covid19 pandemic, and the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on SouthState and its customers and other constituencies; (30) terrorist activities risk that results in loss of consumer confidence and economic disruptions; (31) risks related to the proposed merger of SouthState and Atlantic Capital, including, among others, (i) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (ii) disruption to the parties' businesses as a result of the announcement and pendency of the merger, (iii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, (iv) the risk that the integration of each party's operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party's businesses into the other's businesses, (v) the failure to obtain the necessary approvals by the shareholders of SouthState or Atlantic Capital, (vi) the amount of the costs, fees, expenses and charges related to the merger, (vii) the ability by each of SouthState and Atlantic Capital to obtain required governmental approvals of the merger (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), (viii) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the merger, (ix) the failure of the closing conditions in the merger agreement to be satisfied, or any unexpected delay in closing the merger, (x) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (xi) the dilution caused by SouthState's issuance of additional shares of its common stock in the merger, (xii) general competitive, economic, political and market conditions, and (xiii) other factors that may affect future results of Atlantic Capital and SouthState including changes in asset quality and credit risk, and (32) other factors that may affect future results of SouthState, as disclosed in SouthState's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed by SouthState with the U.S. Securities and Exchange Commission ("SEC") and available on the SEC's website at http://www.sec.gov, any of which could cause actual results to differ materially from future results expressed, implied or otherwise anticipated by such forward-looking statements.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. SouthState does not undertake any obligation to update or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

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