SouthState Corporation Reports First Quarter 2024 Results, Declares Quarterly Cash Dividend

Published

WINTER HAVEN, Fla., April 25, 2024 /PRNewswire/ -- SouthState Corporation (NYSE: SSB) today released its unaudited results of operations and other financial information for the three-month period ended March 31, 2024.

SouthState Corporation Reports First Quarter 2024 Results

"In the midst of a transition year for the US economy, SouthState produced first quarter revenue and earnings per share in line with our guidance," commented John C. Corbett, SouthState's Chief Executive Officer.  "Loans and deposits grew in the low-single digit percent range and asset quality remains stable with strong reserves. Our markets are resilient, and people are migrating to the South as an attractive place to live and grow a business."

Highlights of the first quarter of 2024 include:

Returns

  • Reported Diluted Earnings per Share ("EPS") of $1.50; Adjusted Diluted EPS (Non-GAAP) of $1.58
  • Net Income of $115.1 million; Adjusted Net Income (Non-GAAP) of $121.3 million
  • Return on Average Common Equity of 8.4%; Return on Average Tangible Common Equity (Non-GAAP) of 13.6% and Adjusted Return on Average Tangible Common Equity (Non-GAAP) of 14.4%*
  • Return on Average Assets ("ROAA") of 1.03% and Adjusted ROAA (Non-GAAP) of 1.08%*
  • Pre-Provision Net Revenue ("PPNR") per Weighted Average Diluted Share (Non-GAAP) of $2.28
  • Book Value per Share of $72.82; Tangible Book Value ("TBV") per Share (Non-GAAP) of $46.48

∗ Annualized percentages

Performance

  • Net Interest Income of $344 million; Core Net Interest Income (excluding loan accretion) (Non-GAAP) of $340 million
  • Net Interest Margin ("NIM"), non-tax equivalent of 3.40% and tax equivalent (Non-GAAP) of 3.41%
  • Net charge-offs of $2.7 million, or 0.03% annualized; $12.7 million Provision for Credit Losses ("PCL"), including release for unfunded commitments; total allowance for credit losses ("ACL") plus reserve for unfunded commitments of 1.60%
  • Noninterest Income of $72 million; Noninterest Income represented 0.64% of average assets for the first quarter of 2024
  • Recorded FDIC special assessment expense of $3.9 million
  • Efficiency Ratio of 58% and Adjusted Efficiency Ratio (Non-GAAP) of 56%

Balance Sheet

  • Loans increased $279 million, or 3% annualized, led by consumer real estate; ending loan to deposit ratio of 88%
  • Deposits increased $130 million, or 1% annualized
  • Total deposit cost of 1.74%, up 0.14% from prior quarter, resulting in a 33% cycle-to-date beta
  • Repurchased a total of 100,000 shares during 1Q 2024 at a weighted average price of $79.85
  • Strong capital position with Tangible Common Equity, Total Risk-Based Capital, Tier 1 Leverage, and Tier 1 Common Equity ratios of 8.2%, 14.4%, 9.6%, and 11.9%, respectively†

† Preliminary

Subsequent Events

  • The Board of Directors of the Company declared a quarterly cash dividend on its common stock of $0.52 per share, payable on May 17, 2024 to shareholders of record as of May 10, 2024

Financial Performance

Three Months Ended

(Dollars in thousands, except per share data)

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

INCOME STATEMENT

2024

2023

2023

2023

2023

Interest Income

   Loans, including fees (1)

$

463,688

$

459,880

$

443,805

$

419,355

$

393,366

   Investment securities, trading securities, federal funds sold and securities

      purchased under agreements to resell

53,567

55,555

56,704

58,698

57,043

Total interest income

517,255

515,435

500,509

478,053

450,409

Interest Expense

   Deposits

160,162

149,584

133,944

100,787

55,942

   Federal funds purchased, securities sold under agreements

      to repurchase, and other borrowings

13,157

11,620

11,194

15,523

13,204

Total interest expense

173,319

161,204

145,138

116,310

69,146

Net Interest Income

343,936

354,231

355,371

361,743

381,263

  Provision for credit losses

12,686

9,893

32,709

38,389

33,091

Net Interest Income after Provision for Credit Losses

331,250

344,338

322,662

323,354

348,172

Noninterest Income

71,558

65,489

72,848

77,214

71,355

Noninterest Expense

Operating expense

240,923

245,774

238,042

240,818

231,093

Merger, branch consolidation, severance related and other expense (8)

4,513

1,778

164

1,808

9,412

FDIC special assessment

3,854

25,691

Total noninterest expense

249,290

273,243

238,206

242,626

240,505

Income before Income Taxes Provision

153,518

136,584

157,304

157,942

179,022

Income taxes provision

38,462

29,793

33,160

34,495

39,096

Net Income

$

115,056

$

106,791

$

124,144

$

123,447

$

139,926

Adjusted Net Income (non-GAAP) (2)

Net Income (GAAP)

$

115,056

$

106,791

$

124,144

$

123,447

$

139,926

Securities losses (gains), net of tax

2

(35)

Merger, branch consolidation, severance related and other expense, net of tax (8)

3,382

1,391

130

1,414

7,356

FDIC special assessment, net of tax

2,888

20,087

Adjusted Net Income (non-GAAP)

$

121,326

$

128,271

$

124,274

$

124,861

$

147,247

   Basic earnings per common share

$

1.51

$

1.40

$

1.63

$

1.62

$

1.84

   Diluted earnings per common share

$

1.50

$

1.39

$

1.62

$

1.62

$

1.83

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

$

1.59

$

1.69

$

1.63

$

1.64

$

1.94

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

$

1.58

$

1.67

$

1.62

$

1.63

$

1.93

   Dividends per common share

$

0.52

$

0.52

$

0.52

$

0.50

$

0.50

   Basic weighted-average common shares outstanding

76,301,411

76,100,187

76,139,170

76,057,977

75,902,440

   Diluted weighted-average common shares outstanding

76,660,081

76,634,100

76,571,430

76,417,537

76,388,954

   Effective tax rate

25.05 %

21.81 %

21.08 %

21.84 %

21.84 %

 

Performance and Capital Ratios

Three Months Ended

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

2024

2023

2023

2023

2023

PERFORMANCE RATIOS

Return on average assets (annualized)

1.03

%

0.94

%

1.10

%

1.11

%

1.29

%

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

1.08

%

1.13

%

1.10

%

1.12

%

1.35

%

Return on average common equity (annualized)

8.36

%

7.99

%

9.24

%

9.34

%

10.96

%

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

8.81

%

9.60

%

9.25

%

9.45

%

11.53

%

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

13.63

%

13.53

%

15.52

%

15.81

%

18.81

%

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

14.35

%

16.12

%

15.54

%

15.98

%

19.75

%

Efficiency ratio (tax equivalent)

58.48

%

63.43

%

54.00

%

53.59

%

51.41

%

Adjusted efficiency ratio (non-GAAP) (4)

56.47

%

56.89

%

53.96

%

53.18

%

49.34

%

Dividend payout ratio (5)

34.42

%

37.01

%

31.84

%

30.75

%

27.09

%

Book value per common share

$

72.82

$

72.78

$

68.81

$

69.61

$

69.19

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

$

46.48

$

46.32

$

42.26

$

42.96

$

42.40

CAPITAL RATIOS

Equity-to-assets

12.3

%

12.3

%

11.6

%

11.8

%

11.7

%

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

8.2

%

8.2

%

7.5

%

7.6

%

7.5

%

Tier 1 leverage (6)

9.6

%

9.4

%

9.3

%

9.2

%

9.1

%

Tier 1 common equity (6)

11.9

%

11.8

%

11.5

%

11.3

%

11.1

%

Tier 1 risk-based capital (6)

11.9

%

11.8

%

11.5

%

11.3

%

11.1

%

Total risk-based capital (6)

14.4

%

14.1

%

13.8

%

13.5

%

13.3

%

 

Balance Sheet

Ending Balance

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

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

BALANCE SHEET

2024

2023

2023

2023

2023

Assets

   Cash and due from banks

$

478,271

$

510,922

$

514,917

$

552,900

$

558,158

   Federal funds sold and interest-earning deposits with banks

731,186

487,955

814,220

960,849

1,438,504

Cash and cash equivalents

1,209,457

998,877

1,329,137

1,513,749

1,996,662

Trading securities, at fair value

66,188

31,321

114,154

56,580

16,039

Investment securities:

   Securities held to maturity

2,446,589

2,487,440

2,533,713

2,585,155

2,636,673

   Securities available for sale, at fair value

4,598,400

4,784,388

4,623,618

4,949,334

5,159,999

   Other investments

187,285

192,043

187,152

196,728

217,991

               Total investment securities

7,232,274

7,463,871

7,344,483

7,731,217

8,014,663

Loans held for sale

56,553

50,888

27,443

42,951

27,289

Loans:

Purchased credit deteriorated

1,031,283

1,108,813

1,171,543

1,269,983

1,325,400

Purchased non-credit deteriorated

4,534,583

4,796,913

5,064,254

5,275,913

5,620,290

Non-acquired

27,101,444

26,482,763

25,780,875

24,990,889

23,750,452

    Less allowance for credit losses

(469,654)

(456,573)

(447,956)

(427,392)

(370,645)

               Loans, net

32,197,656

31,931,916

31,568,716

31,109,393

30,325,497

Premises and equipment, net

512,635

519,197

516,583

518,353

517,146

Bank owned life insurance

997,562

991,454

984,881

979,494

967,750

Mortgage servicing rights

87,970

85,164

89,476

87,539

85,406

Core deposit and other intangibles

83,193

88,776

95,094

102,256

109,603

Goodwill

1,923,106

1,923,106

1,923,106

1,923,106

1,923,106

Other assets

778,244

817,454

996,055

875,694

940,666

                Total assets

$

45,144,838

$

44,902,024

$

44,989,128

$

44,940,332

$

44,923,827

Liabilities and Shareholders' Equity

Deposits:

   Noninterest-bearing

$

10,546,410

$

10,649,274

$

11,158,431

$

11,489,483

$

12,422,583

   Interest-bearing

26,632,024

26,399,635

25,776,767

25,252,395

23,979,009

               Total deposits

37,178,434

37,048,909

36,935,198

36,741,878

36,401,592

Federal funds purchased and securities

   sold under agreements to repurchase

554,691

489,185

513,304

581,446

544,108

Other borrowings

391,812

491,904

391,997

792,090

1,292,182

Reserve for unfunded commitments

53,229

56,303

62,347

63,399

85,068

Other liabilities

1,419,663

1,282,625

1,855,295

1,471,509

1,351,873

               Total liabilities

39,597,829

39,368,926

39,758,141

39,650,322

39,674,823

Shareholders' equity:

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

190,443

190,055

190,043

189,990

189,649

   Surplus

4,230,345

4,240,413

4,238,753

4,228,910

4,224,503

   Retained earnings

1,749,215

1,685,166

1,618,080

1,533,508

1,448,636

   Accumulated other comprehensive loss

(622,994)

(582,536)

(815,889)

(662,398)

(613,784)

               Total shareholders' equity

5,547,009

5,533,098

5,230,987

5,290,010

5,249,004

               Total liabilities and shareholders' equity

$

45,144,838

$

44,902,024

$

44,989,128

$

44,940,332

$

44,923,827

Common shares issued and outstanding

76,177,163

76,022,039

76,017,366

75,995,979

75,859,665

 

Net Interest Income and Margin

Three Months Ended

Mar. 31, 2024

Dec. 31, 2023

Mar. 31, 2023

(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

$

668,349

$

8,254

4.97 %

$

814,244

$

10,029

4.89 %

$

759,239

$

8,921

4.77 %

Investment securities

7,465,735

45,313

2.44 %

7,382,800

45,526

2.45 %

8,232,582

48,122

2.37 %

Loans held for sale

42,872

681

6.39 %

28,878

552

7.58 %

23,123

402

7.05 %

Total loans held for investment

32,480,220

463,007

5.73 %

32,239,455

459,328

5.65 %

30,394,396

392,964

5.24 %

     Total interest-earning assets

40,657,176

517,255

5.12 %

40,465,377

515,435

5.05 %

39,409,340

450,409

4.64 %

Noninterest-earning assets

4,353,987

4,572,255

4,695,138

     Total Assets

$

45,011,163

$

45,037,632

$

44,104,478

Interest-Bearing Liabilities ("IBL"):

Transaction and money market accounts

$

19,544,019

$

117,292

2.41 %

$

18,957,647

$

107,994

2.26 %

$

16,874,909

$

40,516

0.97 %

Savings deposits

2,589,251

1,818

0.28 %

2,680,065

1,888

0.28 %

3,298,221

1,756

0.22 %

Certificates and other time deposits

4,282,749

41,052

3.86 %

4,294,555

39,702

3.67 %

3,114,354

13,670

1.78 %

Federal funds purchased

256,506

3,369

5.28 %

256,672

3,453

5.34 %

193,259

2,187

4.59 %

Repurchase agreements

280,674

1,358

1.95 %

265,839

1,458

2.18 %

373,563

666

0.72 %

Other borrowings

563,848

8,430

6.01 %

438,701

6,709

6.07 %

785,571

10,351

5.34 %

     Total interest-bearing liabilities

27,517,047

173,319

2.53 %

26,893,479

161,204

2.38 %

24,639,877

69,146

1.14 %

Noninterest-bearing liabilities ("Non-IBL")

11,957,565

12,844,262

14,287,553

Shareholders' equity

5,536,551

5,299,891

5,177,048

     Total Non-IBL and shareholders' equity

17,494,116

18,144,153

19,464,601

     Total Liabilities and Shareholders' Equity

$

45,011,163

$

45,037,632

$

44,104,478

Net Interest Income and Margin (Non-Tax Equivalent)

$

343,936

3.40 %

$

354,231

3.47 %

$

381,263

3.92 %

Net Interest Margin (Tax Equivalent) (non-GAAP)

3.41 %

3.48 %

3.93 %

Total Deposit Cost (without Debt and Other Borrowings)

1.74 %

1.60 %

0.63 %

Overall Cost of Funds (including Demand Deposits)

1.83 %

1.69 %

0.75 %

Total Accretion on Acquired Loans (1)

$

4,287

$

3,870

$

7,398

Tax Equivalent ("TE") Adjustment

$

528

$

659

$

1,020

The remaining loan discount on acquired loans to be accreted into loan interest income totals $47.0 million as of March 31, 2024.

 

Noninterest Income and Expense

Three Months Ended

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

(Dollars in thousands)

2024

2023

2023

2023

2023

Noninterest Income:

   Fees on deposit accounts

$

33,145

$

33,225

$

32,830

$

33,101

$

29,859

   Mortgage banking income

6,169

2,191

2,478

4,354

4,332

   Trust and investment services income

10,391

10,131

9,556

9,823

9,937

   Securities (losses) gains, net

(2)

45

   Correspondent banking and capital markets income

14,591

16,081

24,808

27,734

21,956

   Expense on centrally-cleared variation margin

(10,280)

(12,677)

(11,892)

(8,547)

(8,362)

   Total correspondent banking and capital markets income

4,311

3,404

12,916

19,187

13,594

   Bank owned life insurance income

6,892

6,567

7,039

6,271

6,813

   Other

10,650

9,973

8,029

4,478

6,775

         Total Noninterest Income

$

71,558

$

65,489

$

72,848

$

77,214

$

71,355

Noninterest Expense:

   Salaries and employee benefits

$

150,453

$

145,850

$

146,146

$

147,342

$

144,060

   Occupancy expense

22,577

22,715

22,251

22,196

21,533

   Information services expense

22,353

22,000

21,428

21,119

19,925

   OREO and loan related expense (income)

606

948

613

(14)

169

   Business development and staff related

5,799

7,492

5,995

6,672

5,957

   Amortization of intangibles

5,998

6,615

6,616

7,028

7,299

   Professional fees

3,115

7,025

3,456

4,364

3,702

   Supplies and printing expense

2,540

2,761

2,623

2,554

2,640

   FDIC assessment and other regulatory charges

8,534

8,325