SOUTH STATE Corp (Form: 8-K, Received: 07/31/2020 06:25:28)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2020

SOUTH STATE CORPORATION

(Exact name of registrant as specified in its charter)

South Carolina

(State or Other Jurisdiction

of Incorporation)

001-12669

(Commission File Number)

57-0799315

(IRS Employer

Identification No.)

1101 First Street South, Suite 202,

Winter Haven, FL

(Address of principal executive offices)

33880

(Zip Code)

(863) 293-4710

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $2.50 per share	SSB	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On July 30, 2020, South State Corporation (“South State” or the “Company”) issued a press release announcing its financial results for the second quarter and three months ended June 30, 2020, along with certain other financial information. Copies of the Company’s press release and presentation are attached as Exhibit 99.1 and 99.2, respectively, to this report and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure

On July 30, 2020, the Company also made available the presentation (“Presentation”) prepared for use with the press release during the earnings conference call on July 31, 2020. Attached hereto and incorporated herein as Exhibit 99.2 is the text of that presentation.

The information contained in this Item 7.01 of this Current Report, including the information set forth in the Presentation filed as Exhibit 99.2 to, and incorporated in, this Current Report, is being "furnished" and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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 South State. 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. South State 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 negative economic developments resulting from federal spending cuts and/or one or more federal budget-related impasses or actions; (2) increased expenses, loss of revenues, and increased regulatory scrutiny associated with our total assets having exceeded $10.0 billion; (3) 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; (4) ownership dilution risk associated with potential acquisitions in which South State’s stock may be issued as consideration for an acquired company; (5) potential deterioration in real estate values; (6) 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; (7) 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; (8) interest risk involving the effect of a change in interest rates on the bank’s earnings, the market value of the bank’s loan and securities portfolios, and the market value of South State’s equity; (9) liquidity risk affecting the bank’s ability to meet its obligations when they come due; (10) risks associated with an anticipated increase in South State’s investment securities portfolio, including risks associated with acquiring and holding investment securities or potentially determining that the amount of investment securities South State desires to acquire are not available on terms acceptable to South State; (11) price risk focusing on changes in market factors that may affect the value of traded instruments in “mark-to-market” portfolios; (12) transaction risk arising from problems with service or product delivery; (13) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; (14) 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 recently enacted CARES Act, the Consumer Financial Protection Bureau rules and regulations, and the possibility of changes in accounting standards, policies, principles and practices, including changes in accounting principles relating to loan loss recognition (CECL); (15) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (16) reputation risk that adversely affects earnings or capital arising from negative public opinion; (17) terrorist activities risk that results in loss of consumer confidence and economic disruptions; (18) cybersecurity risk related to the dependence of South State on internal computer systems and the technology of outside service providers, as well as the potential impacts of third party security breaches, subjects each company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events; (19) greater than expected noninterest expenses; (20) noninterest income risk resulting from the effect of regulations that prohibit financial institutions from charging consumer fees for paying overdrafts on ATM and one-time debit card transactions, unless the consumer consents or

opts‑in to the overdraft service for those types of transactions; (21) excessive loan losses; (22) failure to realize synergies and other financial benefits from, and to limit liabilities associated with, mergers and acquisitions within the expected time frame; (23) potential deposit attrition, higher than expected costs, customer loss and business disruption associated with merger and acquisition integration, including, without limitation, and potential difficulties in maintaining relationships with key personnel; (24) the risks of fluctuations in market prices for South State common stock that may or may not reflect economic condition or performance of South State; (25) the payment of dividends on South State common stock is subject to regulatory supervision as well as the discretion of the board of directors of South State, South State’s performance and other factors; (26) 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; (27) major catastrophes such as earthquakes, floods or other natural or human disasters, including infectious disease outbreaks, including the recent outbreak of a novel strain of coronavirus, a respiratory illness, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on South State and its customers and other constituencies; and (28) risks related to the merger of South State and CenterState, 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, and (29) other factors that may affect future results of South State and CenterState, as disclosed in South State’s Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and CenterState’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case filed by South State or CenterState, as applicable, 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. South State 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.

The combined historical information referred to in the Presentation as the “Combined Business Basis” is presented based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustment. The Combined Business Basis financial information included in the release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to the Presentation.

Item 9.01 Financial Statements and Exhibits

	(d)		Exhibits:

	Exhibit No.		Description

	Exhibit 99.1		Press release dated July 30, 2020

	Exhibit 99.2		Presentation for South State Corporation Earnings Call

	Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SOUTH STATE CORPORATION
	(Registrant)

	By:	/s/ William E. Matthews, V
		William E. Matthews, V
		Senior Executive Vice President and
		Chief Financial Officer

Date: July 30, 2020

Exhibit 99.1

SSC_NEWSRELEASE_CORP

For Immediate Release

Media Contact:

Jackie Smith (803) 231-3486

South State Corporation Reports Second Quarter 2020 Results and

Declares Quarterly Cash Dividend

WINTER HAVEN, FL—July 30, 2020—South State Corporation (NASDAQ: SSB) today released its unaudited results of operations and other financial information for the three-month and six-month period ended June 30, 2020.

The Company reported consolidated net loss of ($1.96) per diluted common share for the three months ended June 30, 2020, compared to net income of $0.71 per diluted common share for the three months ended March 31, 2020. Contributing to the net loss was the initial provision for credit losses (“PCL”) recorded on acquired non-purchase credit deteriorated (“NonPCD”) loans and unfunded commitments (“UFC”) which totaled $119 million, pre-tax, and merger-related costs of $40 million, pre-tax.

Adjusted net income (non-GAAP) totaled $0.89 per diluted share for the three months ended June 30, 2020, compared to $0.82 per diluted share, in the first quarter of 2020, and compared to $1.40 per diluted share in the year ago period. Adjusted net income includes two primary adjustments: (1) the initial PCL on NonPCD loans and UFC of $92 million, after-tax, and (2) merger-related costs of $31 million, after-tax.

Highlights of the second quarter included:

●

Closed the merger of equals with CenterState Bank Corporation (“CSFL”) on June 7^th (see page 7 for additional details).

●

After recording a total loan loss provision expense of $151 million, $119 million of which was for the CenterState acquired NonPCD loans and unfunded commitments (the initial provision), and after $40 million in merger-related costs, the company reported a net loss of ($85 million) for the quarter, resulting in an ROAA of (1.49%), annualized. The initial provision expense on the acquired NonPCD loans is a result of the accounting requirements for mergers under the Current Expected Credit Loss (“CECL”) standard, which became effective in 2020.

●

The quarter’s results only include the operations of CenterState for the final 23 days of the quarter. On a combined historical basis^* (as if the companies had been merged for the full quarter, a Non-GAAP measure), Pre-Provision Net Revenue (“PPNR”) was $157 million, for a 1.68% PPNR ROAA. On the same combined basis, the Company had record revenue for the quarter.

●

Strong core deposit growth.

●

Minimal net charge-offs of $101,000, or 0.00% annualized.

●

Significant allowance for credit losses and credit marks on the balance sheet due to provision for credit losses and required purchase accounting marks.

●

Ending tangible book value (“TBV”) per share of $38.33, up $0.32 from Q1.

“We are pleased to have closed our merger of equals between South State and CenterState on June 7th”, said John C. Corbett, Chief Executive Officer. “While accounting rules under the recently-implemented CECL standard required us to book a large provision for credit loss expense on the closing of the merger, leading us to report a net loss for the quarter, I am very pleased with the underlying fundamental operating performance of the Company.”

* The combined historical information presented is based on the reported GAAP results of the Company for three-month period ended June 30, 2019 and historical GAAP results of CenterState for the period from April 1, 2020 through June 7, 2020. The combined historical financial information set forth in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby.

“53 days into our merger, we are off to a solid start,” said Robert R. Hill, Jr., Executive Chairman. “We are building a sound, profitable, and growing company and I am pleased with our team’s progress to date.”

“In a quarter in which over 90% of our employees are working from home, the team produced record revenues”, Corbett continued. “And, while we are operating in an uncertain economic environment due to the pandemic, our credit metrics remain at strong levels, with low past dues, minimal charge-offs, and low non-performing assets. The underlying performance of the business, the loss absorption capacity existing on the balance sheet post-merger, and the way our team has performed give me great confidence in the future.”

COVID-19 Response

Our team continues to respond impressively to the challenges presented by the COVID-19 pandemic. The health and safety of our employees and customers remain our top priority. We continue to adjust our operations to adhere to CDC and local government recommendations in the markets we serve. Our branch drive-through locations remain open and our digital channels have been key in delivery of essential banking services to customers. Many of our support personnel continue to work from home.

Loan / Deposit Growth

As of June 30, 2020, we have assisted our customers with over 19,000 Paycheck Protection Program (“PPP”) loans with an outstanding balance of $2.3 billion. We have recognized $7.3 million in deferred loan fees, net of costs related to these loans in the income statement, and have another $66.6 million net to be recognized over the life of these loans. During the second quarter, net loans grew $15.3 billion due to the merger with CenterState and the PPP loans. With the merger as well as strong customer deposit growth, total deposits ended the quarter up $17.6 billion, including core deposit growth of $15.1 billion.

Quarterly Cash Dividend and 2020 Annual Meeting of Shareholders

The Company’s Board of Directors declared a common stock dividend of $0.47 per share, payable on August 21, 2020 to shareholders of record as of August 14, 2020.

The Board of Directors also established that the Company’s 2020 Annual Meeting of Shareholders will be held on Wednesday, September 30, 2020, at 10:00 a.m., Eastern Time, at One Buckhead Plaza, 3060 Peachtree Road, N.W., Atlanta, Georgia 30305. The record date for the determination of shareholders of the Company entitled to receive notice of and to vote at the 2020 Annual Meeting shall be the close of business on Monday, August 10, 2020. Because the date of the 2020 Annual Meeting differs by more than thirty days from the anniversary date of the 2019 Annual Meeting of Stockholders, which was held on April 25, 2019, the deadlines for any shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and for any shareholder nomination or proposal outside of Rule 14a-8, as listed in the Company’s 2019 Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2019, are no longer applicable. Pursuant to the Company’s bylaws and Rule 14a-5(f) of the Exchange Act, the Company is hereby providing notice of the revised deadlines for such proposals via this Form 8-K.

To be considered for inclusion in this year’s proxy materials for the 2020 Annual Meeting, shareholder proposals must be submitted in writing by August 9, 2020. In addition to complying with this deadline, shareholder proposals intended to be considered for inclusion in the Company’s proxy materials for the 2020 Annual Meeting must also comply with the Company’s bylaws and all applicable rules and regulations promulgated by the SEC under the Exchange Act. Additionally, any shareholder who intends to submit a proposal regarding a director nomination or who intends to submit a proposal regarding any other matter of business at the 2020 Annual Meeting to be included in the Company’s proxy materials for the 2020 Annual Meeting must also ensure that notice of any such nomination or proposal (including any additional information specified in the bylaws) is received by the Corporate Secretary at the Company’s principal executive offices on or before the close of business on August 9, 2020. The August 9, 2020 deadline will also apply in determining whether notice of a shareholder proposal is timely for purposes of exercising discretionary voting authority with respect to proxies under Rule 14a-4(c)(1) of the Exchange Act. Further, under the Company’s bylaws, shareholder proposals not intended for inclusion in 2020 Annual Meeting proxy statement pursuant to Rule 14a-8 but intended to be raised at the 2020 Annual Meeting must be received no later than August 9, 2020, and must comply with the procedural, informational and other requirements outlined in the Company’s bylaws.

Any shareholder proposal for inclusion in the Company’s proxy materials, notice of proposed business to be brought before the 2020 Annual Meeting or director nomination should be sent to: Corporate Secretary, South State Corporation, 1101 First Street South, Winter Haven, Florida 33880.

Second Quarter 2020 Financial Performance


	Three Months Ended															Six Months Ended
(Dollars in thousands, except per share data)	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,
INCOME STATEMENT	2020			2020			2019			2019			2019			2020			2019
Interest income
Loans, including fees (6)	$	167,707		$	133,034		$	132,615		$	134,953		$	135,388		$	300,741		$	267,222
Investment securities, federal funds sold and securities purchased under agreements to resell		12,857			14,766			14,839			15,048			14,594			27,623			26,150
Total interest income		180,564			147,800			147,454			150,001			149,982			328,364			293,372
Interest expense
Deposits		12,624			14,437			15,227			16,655			17,393			27,061			34,038
Federal funds purchased, securities sold under agreements to repurchase, and other borrowings		5,383			5,350			5,771			5,973			5,410			10,732			8,888
Total interest expense		18,007			19,787			20,998			22,628			22,803			37,793			42,926
Net interest income		162,557			128,013			126,456			127,373			127,179			290,571			250,446
Provision for credit losses		151,474			36,533			3,557			4,028			3,704			188,007			5,192
Net interest income after provision for loan losses		11,083			91,480			122,899			123,345			123,475			102,564			245,254
Noninterest income		54,347			44,132			36,307			37,582			37,618			98,479			69,676
Pre-tax operating expense		134,634			103,118			99,134			96,364			97,803			237,753			194,928
Merger and/or branch consolid. expense		40,279			4,129			1,494			—			2,078			44,408			3,058
Federal Home Loan Bank advances prepayment fee		199			—			—			—			—			199			134
Pension plan termination expense		—			—			—			—			9,526			—			9,526
Total noninterest expense		175,112			107,247			100,628			96,364			109,407			282,360			207,646
(Loss) income before provision for income taxes		(109,682)			28,365			58,578			64,563			51,686			(81,317)			107,284
Provision for income taxes		(24,747)			4,255			9,487			12,998			10,226			(20,492)			21,457
Net (loss)income	$	(84,935)		$	24,110		$	49,091		$	51,565		$	41,460		$	(60,825)		$	85,827

Adjusted net income (non-GAAP) (3)
Net income (loss) (GAAP)	$	(84,935)		$	24,110		$	49,091		$	51,565		$	41,460		$	(60,825)		$	85,827
Securities gains, net of tax		—			—			(20)			(349)			(1,371)			—			(1,803)
FHLB prepayment penalty		154			—			—			—			—			154			107
Pension plan termination expense, net of tax		—			—			—			—			7,641			—			7,641
Initial provision for credit losses - NonPCD loans and UFC		92,212			—			—			—			—			92,212			—
Merger and/or branch consolid. expense		31,191			3,510			1,252			—			1,667			34,701			2,449
Adjusted net income (non-GAAP)	$	38,622		$	27,620		$	50,323		$	51,216		$	49,397		$	66,242		$	94,221

Basic (loss) earnings per common share	$	(1.96)		$	0.72		$	1.46		$	1.51		$	1.18		$	(1.58)		$	2.43
Diluted (loss)earnings per common share	$	(1.96)		$	0.71		$	1.45		$	1.50		$	1.17		$	(1.58)		$	2.42
Adjusted net income per common share - Basic (non-GAAP) (3)	$	0.89		$	0.82		$	1.49		$	1.50		$	1.41		$	1.72		$	2.67
Adjusted net income per common share - Diluted (non-GAAP) (3)	$	0.89		$	0.82		$	1.48		$	1.49		$	1.40		$	1.72		$	2.66
Dividends per common share	$	0.47		$	0.47		$	0.46		$	0.43		$	0.40		$	0.94		$	0.78
Basic weighted-average common shares outstanding		43,317,736			33,566,051			33,677,851			34,056,771			35,089,129			38,438,535			35,267,574
Diluted weighted-average common shares outstanding		43,317,736			33,804,908			33,964,216			34,300,206			35,299,747			38,438,535			35,461,383
Adjusted diluted weighted-average common shares outstanding *		43,606,333			33,804,908			33,964,216			34,300,206			35,299,747			38,793,092			35,461,383
Effective tax rate		22.56	%		15.00	%		16.20	%		20.13	%		19.78	%		25.20	%		20.00	%

* Adjusted diluted weighted average common shares was calculated with the result of adjusted net income (non-GAAP).

The Company reported consolidated net loss of ($84.9) million, or ($1.96) per diluted common share for the three-months ended June 30, 2020, a decrease of $109.0 million, or $2.67 per diluted common share, from the first quarter of 2020. The net loss in the second quarter of 2020 was the result of the initial PCL recorded on the acquired NonPCD loans and the merger-related cost incurred from the merger with CSFL. Weighted-average diluted shares increased by 9.5 million shares, or 28.1%, compared to the first quarter of 2020, due primarily to the merger with CSFL in early June, in which the Company issued 37.3 million shares. Net interest income increased by $34.5 million, compared to the first quarter of 2020, on lower interest expense of $1.8 million and higher interest income of $32.8 million. The PCL increased by $114.9 million, due to the PCL on NonPCD loans and unfunded commitments associated with CSFL. Noninterest income was up $10.2 million compared to first quarter of 2020 to $54.3 million in the second quarter of 2020, due to the strong results from mortgage banking and correspondent banking and capital markets income. Correspondent banking was added to the Company from the merger with CSFL and contributed $8.3 million in the month of June. Noninterest expense was higher in the second quarter of 2020 compared to the first quarter of 2020 by $67.9 million due primarily to higher salaries and employee benefits totaling $20.7 million and higher merger-related costs of $36.2 million. Adjusted noninterest expense was up approximately 30% over first quarter 2020, which relates directly to the addition of CSFL operating expense in the month of June. The efficiency ratio and adjusted efficiency ratio were 80.5% and 61.9% in 2Q 2020, respectively, compared to 62.1% and 59.7% in 1Q 2020, respectively.

Current Expected Credit Losses (“CECL”)

Effective January 1, 2020, the Company adopted ASU 2016-13 (“CECL”), which impact the allowance for loan losses and the liability for UFC. CECL requires that any allowance for credit losses (“ACL”) related to NonPCD loans be charged to the income statement. Therefore, during the second quarter of 2020, the Company recorded $119.1 million in provision for credit losses related to

acquired CSFL NonPCD loans and UFC. Below is a table showing the roll forward of the ACL and UFC for the second quarter of 2020:


	Allowance for Credit Losses ("ACL & UFC")
	NonPCD ACL			PCD ACL			UFC			Total
Ending balance 3/31/2020	$	137,376		$	7,409		$	8,555		$	153,340
ACL - PCD loans from CSFL					150,946						150,946
Initial provision for credit losses - CSFL		109,442						9,637			119,079
Charge offs		(1,638)									(1,638)
Acquired charge offs		(728)			(65)						(793)
Recoveries		1,206									1,206
Acquired recoveries		351			773						1,124
Provision for credit losses		34,292			(4,756)			2,859			32,395
Ending balance 6/30/2020	$	280,301		$	154,307		$	21,051		$	455,659

Period end loans (includes PPP Loans)	$	22,175,393		$	3,323,754		$	25,499,147		$	25,499,147
Reserve to Loans (includes PPP Loans)		1.26	%		4.64	%		0.08	%		1.79	%
Period end loans (excludes PPP Loans)	$	19,839,060			N/A		$	23,162,814		$	23,162,814
Reserve to Loans (excludes PPP Loans)		1.41	%		N/A			0.09	%		1.97	%

The ACL related to all loans totals $434.6 million compared to $144.8 million at March 31, 2020, and was recorded as a contra asset on its own line within the balance sheet, while the liability for UFC of $21.1 million was recorded on its own line in the liabilities section of the balance sheet. The total provision for credit losses, including the initial provision for credit losses – CSFL, totaled $151.5 million for the second quarter of 2020 and was recorded in the income statement, accordingly. In the first quarter of 2020, the provision for credit losses totaled $36.5 million.

Income Tax Expense

During the second quarter of 2020, our effective tax rate increased to 22.56% from 15.00% in the first quarter of 2020 and from 19.78% in the second quarter of 2019. The primary reason for the increase in the effective tax rate compared to the first quarter of 2020 was a pre-tax book loss that was generated during the current quarter. This along with the other rate reducing items also shown in the first quarter of the year increased the benefit that was recorded for the quarter. This is also what drove the increase in the rate from the second quarter of 2019, along with additional federal tax credits available in the current quarter.

Balance Sheet and Capital

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


	Ending Balance
	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
BALANCE SHEET	2020		2020		2019		2019		2019
Assets
Cash and cash equivalents	$	4,363,708	$	1,262,836	$	688,704	$	719,194	$	851,971
Investment securities:
Securities available for sale, at fair value		3,138,212		1,971,195		1,956,047		1,813,134		1,717,276
Other investments		133,430		62,994		49,124		49,124		49,124
Total investment securities		3,271,642		2,034,189		2,005,171		1,862,258		1,766,400
Loans held for sale		603,275		71,719		59,363		87,393		47,796
Loans:
Acquired - PCD		3,323,754		311,271		356,782		390,714		419,961
Acquired - NonPCD		11,577,833		1,632,700		1,760,427		1,965,603		2,180,281
Non-acquired		10,597,560		9,562,919		9,252,831		8,928,512		8,621,327
Less allowance for loan losses		(434,608)		(144,785)		(56,927)		(54,937)		(53,590)
Loans, net		25,064,539		11,362,105		11,313,113		11,229,892		11,167,979
Bank property held for sale		25,541		5,412		5,425		8,424		5,785
Other real estate owned ("OREO")		18,016		7,432		6,539		4,991		8,721
Premises and equipment, net		627,943		312,151		317,321		323,506		321,348
Bank owned life insurance		556,807		233,849		234,567		233,206		231,708
Deferred tax asset		107,532		46,365		31,316		27,844		28,240
Mortgage servicing rights		25,441		26,365		30,525		28,674		30,332
Core deposit and other intangibles		170,911		46,809		49,816		53,083		56,351
Goodwill		1,603,383		1,002,900		1,002,900		1,002,900		1,002,900
Other assets		1,286,618		230,779		176,332		170,717		163,806
Total assets	$	37,725,356	$	16,642,911	$	15,921,092	$	15,752,082	$	15,683,337

Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing	$	9,915,700	$	3,367,422	$	3,245,306	$	3,307,532	$	3,255,906
Interest-bearing		20,041,585		8,977,125		8,931,790		8,716,255		8,666,374
Total deposits		29,957,285		12,344,547		12,177,096		12,023,787		11,922,280

Federal funds purchased and securities sold under agreements to repurchase		720,479		325,723		298,741		269,072		298,029
Other borrowings		1,089,279		1,316,100		815,936		815,771		816,414
Reserve for unfunded commitments		21,051		8,555		335		335		335
Other liabilities		1,445,411		326,943		255,971		292,161		272,301
Total liabilities		33,233,506		14,321,868		13,548,079		13,401,126		13,309,359

Shareholders' equity:
Preferred stock - $.01 par value; authorized 10,000,000 shares		—		—		—		—		—
Common stock - $2.50 par value; authorized 160,000,000 shares		177,268		83,611		84,361		84,757		86,839
Surplus		3,759,166		1,584,322		1,607,740		1,617,004		1,676,229
Retained earnings		542,677		643,345		679,895		646,325		609,444
Accumulated other comprehensive income		12,739		9,765		1,017		2,870		1,466
Total shareholders' equity		4,491,850		2,321,043		2,373,013		2,350,956		2,373,978
Total liabilities and shareholders' equity	$	37,725,356	$	16,642,911	$	15,921,092	$	15,752,082	$	15,683,337

Common shares issued and outstanding		70,907,119		33,444,236		33,744,385		33,902,726		34,735,587

At June 30, 2020, the Company’s total assets were $37.7 billion, an increase of $21.1 billion from March 31, 2020, and an increase of 126.7%. The changes in each line item during the quarter were primarily the result of the merger with CSFL. Below are highlights:

Cash and cash equivalents increased by $3.1 billion, due to the deposits that many customers have placed with the Company through the Paycheck Protection Program from both South State and CenterState, and the disposition of securities at CenterState prior to the merger.

Investment securities portfolio increased by $1.2 billion, and totaled $3.3 billion, representing 8.7% of total assets.

Non-interest bearing deposits increased by $6.5 billion.

Interest bearing deposits grew by $11.1 billion.

Other borrowings decreased by $500.0 million due to repaying $300.0 million of FHLB advances and $200.0 million Federal Reserve borrowings.

Equity increased by $2.2 billion from the following: (a) the Company issued 37.3 million shares at $60.27 per share in the merger with CSFL totaling $2.2 billion, (b) other comprehensive income increased by $3.0 million and (c) impact of stock awards increased equity by $6.7 million, which were offset by (d) quarterly dividend of $15.7 million, (e) the quarterly net loss of $84.9 million.

The Company’s book value per common share decreased to $63.35 per share at June 30, 2020, compared to $69.40 per share at March 31, 2020 and $68.34 at June 30, 2019. TBV per common share increased by $0.32 per share to $38.33 at June 30, 2020, compared to $38.01 at March 31, 2020, and increased by $0.48 per share, or 1.3%, from $37.85 at June 30, 2019. Total equity (capital) increased by $2.2 billion as a result of the merger with CSFL in June.

Merger with CSFL

The merger with CSFL closed on June 7, 2020, ahead of our original expectation of the third quarter of 2020 and despite the many challenges faced in the current environment. The Company issued 37,271,069 shares using an exchange ratio of 0.3001. The total purchase price was $2.262 billion. The initial (preliminary) allocation of the purchase price to the fair value of assets and liabilities acquired was completed and is included the following table:


South State Corporation					Fair Value of
CenterState Bank Corporation					Net Assets
Merger Date of June 7, 2020					Acquired at
	As Recorded		Fair Value		Date of
(Dollars in thousands)	by CSFL		Adjustments		Acquisition
Assets
Cash and cash equivalents	$	2,566,450	$	—	$	2,566,450
Investment securities		1,188,403		5,507		1,193,910
Loans held for sale		453,578		—		453,578
Loans		12,969,091		(48,342)		12,920,749
Premises and equipment		324,396		2,392		326,788
Intangible assets		1,294,211		(1,163,349)		130,862
Other real estate owned and repossessed assets		10,849		(791)		10,058
Bank owned life insurance		333,053		—		333,053
Deferred tax asset		54,123		(8,681)		45,442
Other assets		1,061,136		(604)		1,060,532
Total assets	$	20,255,290	$	(1,213,868)	$	19,041,422

Liabilities
Deposits:
Noninterest-bearing	$	5,291,443	$	—	$	5,291,443
Interest-bearing		10,312,370		19,702		10,332,072
Total deposits		15,603,813		19,702		15,623,515

Federal funds purchased and securities sold under agreements to repurchase		401,546		—		401,546
Other borrowings		278,900		(7,401)		271,499
Other liabilities		1,088,048		(4,592)		1,083,456
Total liabilities		17,372,307		7,709		17,380,016
Net identifiable assets acquired over liabilities assumed		2,882,983		(1,221,577)		1,661,406
Goodwill		600,483		600,483
Net assets acquired over liabilities assumed	$	2,882,983	$	(621,094)	$	2,261,888

Consideration:
South State Corporation common shares issued						37,271,069
Purchase price per share of the Company's common stock					$	60.27
Company common stock issued and cash exchanged for fractional shares					$	2,246,401
Stock Option Conversion						8,080
Restricted Stock Conversion						7,407
Fair value of total consideration transferred					$	2,261,888

Below are observations of the merger between the Company and CSFL:

●

Goodwill was approximately $815.0 million less than announced in January 2020, due primarily to the stock price decline from $85.52 on January 24, 2020 to $60.27 at closing.

●

Core deposit intangible of 1.75%, or $190.5 million was modeled compared to actual result of 1.14% (pre-tax), or $125.9 million.

●

The fair value adjustments for the loans (excluding PPP loans acquired) resulted in $269.1 million discount, or 2.26%, compared to $130.0 million, or 1.1%, originally modeled.

●

On track to achieve approximately $80.0 million of cost saves, or 10%, of the combined entity’s noninterest expense.

●

Merger cost incurred during the first and second quarters have been as expected.

●

We are now fully focused on the integration and conversion aspects of the combined company and expect the core conversion to occur in the second quarter of 2021.

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


	Ending Balance
	June 30,		March 31,		December 31,		September 30,		June 30,
LOAN PORTFOLIO		2020		2020		2019		2019		2019
Commercial non-owner occupied real estate:
Construction and land development	$	1,999,062	$	1,105,308	$	1,016,692	$	1,024,627	$	956,548
Commercial non-owner occupied		6,021,317		2,371,371		2,322,590		2,356,335		2,397,240
Total commercial non-owner occupied real estate		8,020,379		3,476,679		3,339,282		3,380,962		3,353,788
Consumer real estate:
Consumer owner occupied		4,421,247		2,665,405		2,704,405		2,757,424		2,759,920
Home equity loans		1,378,406		758,482		758,020		773,363		778,234
Total consumer real estate		5,799,653		3,423,887		3,462,425		3,530,787		3,538,154
Commercial owner occupied real estate		4,762,520		2,177,738		2,158,701		2,093,795		2,047,933
Commercial and industrial		5,341,363		1,418,421		1,386,303		1,261,527		1,271,464
Other income producing property		650,237		327,696		346,554		361,879		367,353
Consumer non real estate		916,623		674,791		662,883		654,422		641,276
Other		8,372		7,678		13,892		1,457		1,601
Total loans	$	25,499,147	$	11,506,890	$	11,370,040	$	11,284,829	$	11,221,569

Performance and Capital Ratios


	Three Months Ended															Six Months Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,		June 30,
PERFORMANCE RATIOS	2020			2020			2019			2019			2019			2020		2019
Return on average assets (annualized)		-1.49	%		0.60	%		1.23	%		1.31	%		1.08	%	-0.63	%	1.14	%
Adjusted return on average assets (annualized) (non-GAAP) (3)		0.68	%		0.69	%		1.26	%		1.30	%		1.28	%	0.68	%	1.26	%
Return on average equity (annualized)		-11.78	%		4.15	%		8.26	%		8.70	%		6.98	%	-4.67	%	7.29	%
Adjusted return on average equity (annualized) (non-GAAP) (3)		5.36	%		4.75	%		8.47	%		8.64	%		8.32	%	5.09	%	8.01	%
Return on average tangible common equity (annualized) (non-GAAP) (5)		-19.71	%		8.35	%		15.79	%		16.62	%		13.38	%	-7.52	%	14.01	%
Adjusted return on average tangible common equity (annualized) (non-GAAP) (3) (5)		10.23	%		9.45	%		16.17	%		16.51	%		15.79	%	9.83	%	15.30	%
Efficiency ratio (tax equivalent)		80.52	%		62.11	%		61.64	%		58.40	%		66.87	%	72.32	%	65.10	%
Adjusted efficiency ratio (non-GAAP) (7)		61.91	%		59.72	%		60.73	%		58.40	%		59.78	%	60.89	%	61.12	%
Dividend payout ratio (2)		N/A			65.70	%		31.62	%		28.48	%		33.89	%	N/A		32.03	%
Book value per common share	$	63.35		$	69.40		$	70.32		$	69.34		$	68.34
Tangible common equity per common share (non-GAAP) (5)	$	38.33		$	38.01		$	39.13		$	38.20		$	37.85

CAPITAL RATIOS
Equity-to-assets		11.91	%		13.95	%		14.90	%		14.92	%		15.14	%
Tangible equity-to-tangible assets (non-GAAP) (5)		7.56	%		8.15	%		8.88	%		8.81	%		8.99	%
Tier 1 common equity (4) *		10.7	%		11.0	%		11.3	%		11.2	%		11.6	%
Tier 1 leverage (4) *		13.3	%		9.5	%		9.7	%		9.7	%		10.0	%
Tier 1 risk-based capital (4) *		10.7	%		12.0	%		12.3	%		12.2	%		12.6	%
Total risk-based capital (4) *		12.9	%		12.7	%		12.8	%		12.7	%		13.1	%

OTHER DATA
Number of branches		305			155			155			157			156
Number of employees (full-time equivalent basis)		5,369			2,583			2,547			2,544			2,544

* The regulatory capital ratios presented above include the assumption of the transitional method relative to recent legislation by Congress 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.

Asset Quality


	Ending Balance
	June 30,		Mar. 31,		Dec. 31,		Sept 30,		June 30,
(Dollars in thousands)	2020		2020		2019		2019		2019
NONPERFORMING ASSETS:
Non-acquired
Non-acquired nonperforming loans	$	22,883	$	23,912	$	22,816	$	19,187	$	15,605
Non-acquired OREO and other nonperforming assets		1,689		941		1,011		1,464		1,321
Total non-acquired nonperforming assets		24,572		24,853		23,827		20,651		16,926
Acquired
Acquired nonperforming loans (2019 periods acquired non-credit impaired loans only) *		100,399		32,791		11,114		9,596		9,985
Acquired OREO and other nonperforming assets		16,987		6,802		5,848		7,207		7,680
Total acquired nonperforming assets		117,386		39,593		16,962		16,803		17,665
Total nonperforming assets *	$	141,958	$	64,446	$	40,789	$	37,454	$	34,591


	Three Months Ended
	June 30,		Mar. 31,		Dec. 31,		Sept 30,		June 30,
	2020		2020		2019		2019		2019
ASSET QUALITY RATIOS:
Allowance for non-acquired loan losses as a percentage of non-acquired loans (1)	N/A		N/A		0.62	%	0.62	%	0.62	%
Allowance for credit losses as a percentage of loans	1.70	%	1.26	%	N/A		N/A		N/A
Allowance for credit losses as a percentage of loans, excluding PPP loans	1.88	%	N/A		N/A		N/A		N/A
Allowance for non-acquired loan losses as a percentage of non-acquired nonperforming loans	N/A		N/A		249.50	%	286.32	%	343.42	%
Allowance for credit losses as a percentage of nonperforming loans *	352.53	%	255.34	%	N/A		N/A		N/A
Net charge-offs on non-acquired loans as a percentage of average (annualized) (1)	N/A		N/A		0.06	%	0.05	%	0.02	%
Net charge-offs as a percentage of average loans (annualized)	0.00	%	0.05	%	N/A		N/A		N/A
Net charge-offs on acquired loans as a percentage of average acquired loans (annualized) (1)	N/A		N/A		-0.01	%	0.15	%	0.25	%
Total nonperforming assets as a percentage of total assets *	0.38	%	0.39	%	0.26	%	0.24	%	0.22	%
Nonperforming loans as a percentage of period end loans *	0.48	%	0.49	%	0.30	%	0.25	%	0.23	%

* Total nonperforming assets now include nonaccrual loans that are purchase credit deteriorated (PCD loans). In prior periods, these loans, which were called acquired credit impaired (“ACI”) loans were excluded from nonperforming assets. The adoption of CECL resulted in the discontinuation of the pool-level accounting for ACI loans and replaced it with loan-level evaluation for PCD nonaccrual status. The Company’s nonperforming loans increased by $21.0 million in the first quarter of 2020 from these loans. The Company has not assumed or taken on any additional risk relative to these assets. With the merger with CSFL, the amount of acquired nonaccruals loans increased by approximately $69.9 million. Lastly, nonperforming assets have been reduced by former bank property held for sale. Prior to the merger, the Company included this information in nonperforming assets but is now reported as a separate item on the balance sheet. All periods have been reclassified to reflect this change.

Total nonperforming assets increased by $77.5 million to $141.9 million, representing 0.38% of total assets, a decrease of 1 basis point compared to March 31, 2020. The increase was due primarily to the merger with CSFL and the addition of the nonaccrual loans and OREO acquired. Non-acquired non-performing loans decreased by $1.0 million during the second quarter of 2020 to $22.9 million at June 30, 2020. The ACL as a percentage of total nonperforming loans was 353% at June 30, 2020, up from 255% of total nonperforming loans at March 31, 2020.

At June 30, 2020, the ACL was $434.6 million, or 1.70%, of period end loans. Additionally, unfunded commitments have a reserve of $21.1 million, or 0.08% of period end loans. The ACL was $144.8 million, or 1.26%, of period end loans at March 31, 2020. Net charge-offs totaled $101,000, or 0.00%, annualized of average total loans, in the second quarter of 2020 compared to $1.3 million, or 0.05%, annualized in the first quarter of 2020.

During the second quarter of 2020, the provision for credit losses totaled $151.5 million for the loan portfolio compared to $36.5 million for the provision for credit losses, in the first quarter of 2020. The significant increase in the second quarter of 2020, was the result of the merger with CSFL and the initial provision for credit losses recorded on NonPCD loans acquired, the unfunded commitment liability related to CSFL, and the additional PCL related to non-acquired South State loans totaled $28.4 million. This initial PCL on NonPCD acquired loans totaled $119.1 million. With the adoption of CECL, non-acquired unfunded commitments reserve related to the South State portfolio was increased by $2.9 million through the provision for credit losses during the second quarter of 2020.

Total OREO increased during the second quarter of 2020 to $18.0 million, or $10.6 million from the balance at March 31, 2020, due to the merger with CSFL.

Net Interest Income and Margin


	Three Months Ended
	June 30, 2020						March 31, 2020						June 30, 2019
(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, reverse repo, and time deposits	$	2,033,910	$	432	0.09	%	$	538,310	$	1,452	1.08	%	$	602,351	$	3,426	2.28	%
Investment securities (taxable)		1,426,206		10,920	3.08	%		1,851,052		11,915	2.59	%		1,429,378		9,551	2.68	%
Investment securities (tax-exempt)		881,265		1,505	0.69	%		171,674		1,399	3.28	%		191,686		1,617	3.38	%
Loans held for sale		203,267		1,498	2.96	%		41,812		331	3.18	%		33,804		337	4.00	%
Loans		15,717,387		166,209	4.25	%		11,439,676		132,703	4.67	%		11,156,942		135,051	4.86	%
Total interest-earning assets		20,262,035		180,564	3.58	%		14,042,524		147,800	4.23	%		13,414,161		149,982	4.48	%
Noninterest-earning assets		2,636,890						2,010,409						2,004,786
Total Assets	$	22,898,925					$	16,052,933					$	15,418,947

Interest-Bearing Liabilities:
Transaction and money market accounts	$	8,132,276	$	5,096	0.25	%	$	5,976,771	$	7,682	0.52	%	$	5,515,060	$	9,632	0.70	%
Savings deposits		1,699,377		336	0.08	%		1,323,770		650	0.20	%		1,354,812		1,252	0.37	%
Certificates and other time deposits		2,321,684		7,192	1.25	%		1,642,749		6,104	1.49	%		1,749,782		6,509	1.49	%
Federal funds purchased and repurchase agreements		415,304		391	0.38	%		328,372		615	0.75	%		281,187		673	0.96	%
Other borrowings		1,216,884		4,992	1.65	%		887,431		4,735	2.15	%		677,858		4,737	2.80	%
Total interest-bearing liabilities		13,785,525		18,007	0.53	%		10,159,093		19,786	0.78	%		9,578,699		22,803	0.95	%
Noninterest-bearing liabilities		6,212,957						3,557,492						3,458,506
Shareholders' equity		2,900,443						2,336,348						2,382,742
Total Non-IBL and shareholders' equity		9,113,400						5,893,840						5,841,248
Total liabilities and shareholders' equity	$	22,898,925					$	16,052,933					$	15,419,947
Net interest income and margin (NON-TAX EQUIV.)			$	162,557	3.23	%			$	128,014	3.67	%			$	127,179	3.80	%
Net interest margin (TAX EQUIVALENT)					3.24	%					3.68	%					3.82	%
Total Deposit Cost of Funds					0.29	%					0.48	%					0.59	%
Overall Cost of Funds (including demand deposits)					0.37	%					0.59	%					0.71	%

Non-taxable equivalent net interest income was $162.6 million for the second quarter of 2020, an increase of $34.5 million from the first quarter of 2020. The increase resulted from higher interest income of $32.8 million, which was the result of our merger with CSFL in early June, thereby increasing the average balances of all assets. Total interest expense declined by $1.8 million, even with the average balances increasing. This was the result of the current low rate environment and the reduction in interest credited on deposit accounts and other borrowings. Loan interest income included $10.1 million of loan interest income accretion in the second quarter of 2020 compared to $10.9 million in the first quarter of 2020. The higher accretion in the first quarter of 2020 was directly related to the adoption of CECL and elimination of loan pools, resulting in an acceleration of the recognition of the loan discount. The yield on the acquired loan portfolio declined to 5.08% compared 7.14% in the first quarter of 2020; while the non-acquired loan portfolio declined to 3.84% from 4.14% in the first quarter of 2020. The average balance of loans increased by $4.3 billion in the second quarter of 2020, as a result of the merger with CSFL and PPP loans.

Tax-equivalent net interest margin declined by 44 basis points from the first quarter of 2020 and declined by 58 basis points from the second quarter of 2019. These declines are directly attributable to the current economic environment from the COVID19 pandemic and the stimulus from the CARES Act. Average balances increased due to the merger with CSFL in early June. In response to the COVID pandemic, the Company reduced interest rates on both loans and deposits, and the second quarter of 2020 reflects many of the rate reductions that were initiated in March of 2020. During the second quarter of 2020, the Company’s average total assets increased to $22.9 billion, an increase of $6.8 billion from the first quarter of 2020, and an increase of $7.5 billion from the second quarter of 2019. Average earning assets totaled $20.3 billion up $6.2 billion from first quarter of 2020, and up $6.8 billion from the

second quarter of 2019. Average interest-bearing liabilities totaled $13.8 billion at June 30, 2020, an increase of $3.6 billion from March 31, 2020; and up $4.2 billion from June 30, 2019. Average non-interest bearing liabilities increased by $2.7 billion, from March 31, 2020, to $6.2 billion; and was up $2.8 billion from June 30, 2019. Including the impact of noninterest bearing deposits, the Company’s overall cost of funds declined to 37 basis points for the second quarter of 2020 compared to 59 basis points in the first quarter of 2020, and decreased from 71 basis points in the year ago period.

Acquired Loans and Loan Accretion

With the adoption of CECL, loan accretion, accretable yield, and the related discounts are now consistently accounted for within the balance sheet and income statement. Acquired loans reflected the following results in the second quarter of 2020:

●

Contractual interest income totaled $56.5 million, or 4.31% yield.

●

Loan accretion totaled $10.1 million, compared to $10.9 million in the first quarter of 2020. The amount of accretion recognized in June related to the CSFL loan portfolio totaled $2.9 million.

●

Including the loan accretion, total interest income was $66.6 million on acquired loans resulting in 5.08% yield during the second quarter of 2020.

Below is a table of the remaining discount on acquired loans, which will be accreted into loan interest income over the contractual life of the loan and includes the additional discount recorded from the merger with CSFL (dollars in thousands):


Unrecognized discount on acquired loans
Beginning balance, March 31, 2020	$	52,200
Additional discount from the CSFL merger		118,710
Loan accretion recognized in 2Q 2020		(10,108)
Ending balance, June 30, 2020	$	160,802

Noninterest Income and Expense


	Three Months Ended										Six Months Ended
	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		June 30,
(Dollars in thousands)	2020		2020		2019		2019		2019		2020		2019
Noninterest income:
Fees on deposit accounts	$	16,679	$	18,141	$	19,161	$	19,725	$	18,741	$	34,820	$	36,549
Mortgage banking income		18,371		14,647		3,757		6,115		5,307		33,018		7,692
Trust and investment services income		7,138		7,389		6,935		7,320		7,720		14,527		14,989
Securities gains, net		—		—		24		437		1,709		—		2,250
Correspondent banking and capital market income		10,067		493		1,357		690		861		10,560		846
Bank owned life insurance income		1,381		2,530		1,361		1,498		1,339		3,911		2,901
Recoveries of fully charged off acquired loans		—		—		2,232		1,401		1,347		—		3,214
Other		711		932		1,480		396		594		1,643		1,235
Total noninterest income	$	54,347	$	44,132	$	36,307	$	37,582	$	37,618	$	98,479	$	69,676

Noninterest expense:
Salaries and employee benefits	$	81,720	$	60,978	$	58,218	$	59,551	$	58,547	$	142,698	$	116,978
Pension plan termination expense		—		—		—		—		9,526		-		9,526
Occupancy expense		15,959		12,287		12,113		11,883		11,849		28,246		23,461
Information services expense		12,155		9,306		8,919		8,878		8,671		21,462		17,680
FHLB prepayment penalty		199		—		—		—		—		199		134
OREO expense and loan related		1,107		587		1,013		597		881		1,694		1,632
Business development and staff related		1,447		2,244		2,905		2,018		2,171		3,691		4,459
Amortization of intangibles		4,665		3,007		3,267		3,268		3,268		7,672		6,549
Professional fees		2,848		2,494		2,862		2,442		2,781		5,342		5,021
Supplies, printing and postage expense		1,610		1,505		1,464		1,418		1,495		3,115		2,999
FDIC assessment and other regulatory charges		2,403		2,058		1,327		228		1,455		4,461		2,990
Advertising and marketing		531		814		1,491		1,052		959		1,345		1,766
Other operating expenses		10,189		7,838		5,555		5,029		5,726		18,027		11,393
Branch consolid. or merger / convers related exp.		40,279		4,129		1,494		—		2,078		44,408		3,058
Merger and branding related expense		—		—		—		—		—		—		—
Total noninterest expense	$	175,112	$	107,247	$	100,628	$	96,364	$	109,407	$	282,360	$	207,646

Noninterest income totaled $54.3 million for the second quarter of 2020 compared to $44.1 million in the first quarter of 2020, an increase of $10.2 million. The largest variance came from the addition of correspondent banking income from the CSFL merger, which resulted in an increase of $8.3 million and capital markets income improved by $1.3 million. Mortgage banking income improved by $3.7 million from the gain on sale of mortgage loans in secondary market of $13.0 million, which was partially offset by the MSR, net of the hedge, of $9.3 million. These increases were partially offset by decreases in fees on deposit accounts of $1.5 million, primarily from lower NSF fees, lower Bank owned life insurance income primarily from a death claim received in the first quarter of 2020 that totaled $1.2 million and lower wealth income of $251,000. The impact of CSFL on the second quarter reflects only 23 days of June.

Compared to the second quarter of 2019, noninterest income increased by $16.7 million due to the impact of correspondent banking and capital markets income discussed above and improved mortgage banking income which increased by $13.0 million. Secondary market mortgage income was up $18.4 million from the increase in the mortgage pipeline and the higher margin; offset partially by MSR, net of the hedge, which decreased by $5.4 million. These increases were offset by the following: no securities gains or losses in 2Q 2020 compared to a gain of $1.7 million, no recoveries from acquired loans (which now flow through the allowance for credit losses) resulted in a $1.3 million decrease, and a decline in service charges on deposit accounts of $2.0 million, reflective of higher deposit balances and less NSF fees.

Noninterest expense was $175.1 million in the second quarter of 2020, an increase of $67.9 million from $107.2 million in the first quarter of 2020. The increase was primarily related to the addition of expense from the merger with CSFL. Merger-related costs totaled $40.3 million for the quarter and was an increase $36.2 million from the first quarter of 2020. The other line items of noninterest expense reflect approximately a 30% increase in the aggregate reflective of the expenses incurred with the addition of CSFL in the

second quarter. Adjusted noninterest expense totaled $134.6 million in 2Q 2020, which was $31.5 million higher than first quarter of 2020, and resulted in an adjusted efficiency ratio of 61.9% compared to 59.7%, in first quarter of 2020.

Compared to the second quarter of 2019, noninterest expense was higher by $65.7 million. The net increase was primarily due the merger with CSFL in June 2020, and includes $38.2 million of additional merger-related or branch consolidation cost. Adjusted noninterest expense (non-GAAP) increased $36.8 million, compared to the second quarter of 2019.

Conference Call

South State Corporation (NASDAQ:SSB) will announce its second quarter 2020 earnings results in a news release after the market closes on July 30, 2020. At 10 a.m. Eastern Time on July 31, 2020, South State will host a conference call to discuss its second quarter results. Callers wishing to participate may call toll-free by dialing 877-506-9272. The number for international participants is 412-380-2004. The conference ID number is 10146098. Participants can also listen to the live audio webcast through the Investor Relations section of www.SouthStateBank.com. A replay will be available beginning July 31, 2020 by 2:00 p.m. Eastern Time until 9:00 a.m. on August 14, 2020. To listen to the replay, dial 877-344-7529 or 412-317-0088. The passcode is 10146098.

***************

South State Corporation (NASDAQ: SSB) is a financial services company headquartered in Winter Haven, Florida. South State 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 which 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.


Pre-provision net revenue (in thousands)	June 30, 2020
Net loss (GAAP)	$	(84,935)
PCL legacy SSB		31,259
PCL legacy CSB NonPCD and UFC - Day 1		119,079
PCL legacy CSB for June		1,136
Tax provision (benefit)		(24,747)
Merger-related costs		40,279
FHLB advance prepayment cost		199
CSB pre-merger PPNR		74,791
Pre-provision net revenue (PPNR) Non-GAAP	$	157,061
SSB average asset balance June 30, 2020 (GAAP)	$	22,898,925
CSB average asset balance pre-merger		14,604,081
Total average balance June 30, 2020 (Non-GAAP)	$	37,503,006	1.68	% ROAA PPNR

	Three Months Ended															Six Months Ended
(Dollars in thousands, except per share data)	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
RECONCILIATION OF GAAP TO Non-GAAP	2020			2020			2019			2019			2019			2020			2019
Adjusted net income (non-GAAP) (3)
Net income (loss) (GAAP)	$	(84,935)		$	24,110		$	49,091		$	51,565		$	41,460		$	(60,825)		$	85,827
Securities gains, net of tax		—			—			(20)			(349)			(1,371)			—			(1,803)
PCL - NonPCD loans & unfunded commitments		92,212			—			—			—			—			92,212			—
Pension plan termination expense, net of tax		—			—			—			—			7,641			—			7,641
FHLB prepayment penalty, net of tax		154			—			—			—			—			154			107
Merger and branch consolidation/acq. expense, net of tax		31,191			3,510			1,252			—			1,667			34,701			2,449
Adjusted net income (non-GAAP)	$	38,622		$	27,620		$	50,323		$	51,216		$	49,397		$	66,242		$	94,221

Adjusted net income per common share - Basic (3)
Earnings (loss) per common share - Basic (GAAP)	$	(1.96)		$	0.72		$	1.46		$	1.51		$	1.18		$	(1.58)		$	2.43
Effect to adjust for securities gains		—			—			(0.01)			(0.01)			(0.04)			—			(0.05)
Effect to adjust for PCL - NonPCD loans & unfunded commitments		2.13			—			—			—			—			2.40			—
Effect to adjust for pension plan termination expense, net of tax		—			—			—			—			0.22			—			0.22
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		0.72			0.10			0.04			—			0.05			0.90			0.07
Adjusted net income per common share - Basic (non-GAAP)	$	0.89		$	0.82		$	1.49		$	1.50		$	1.41		$	1.73		$	2.67

Adjusted net income per common share - Diluted (3)
Earnings (loss) per common share - Diluted (GAAP)	$	(1.96)		$	0.71		$	1.45		$	1.50		$	1.17		$	(1.58)		$	2.42
Effect to adjust for securities gains		—			—			(0.01)			(0.01)			(0.04)			—			(0.05)
Effect to adjust for PCL - NonPCD loans & unfunded commitments		2.11			—			—			—			—			2.38			—
Effect to adjust for pension plan termination expense, net of tax		—			—			—			—			0.22			—			0.22
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		0.72			0.11			0.04			—			0.05			0.89			0.07
Effect of adjusted weighted ave shares due to adjusted net income		0.02			0.01
Adjusted net income per common share - Diluted (non-GAAP)	$	0.89		$	0.82		$	1.48		$	1.49		$	1.40		$	1.71		$	2.66

Adjusted Return of Average Assets (3)
Return on average assets (GAAP)		-1.49	%		0.60	%		1.23	%		1.31	%		1.08	%		-0.63	%		1.14	%
Effect to adjust for securities gains		0.00	%		0.00	%		0.00	%		-0.01	%		-0.04	%		0.00	%		-0.02	%
Effect to adjust for PCL - NonPCD loans & unfunded commitments		1.62	%		0.00	%		0.00	%		0.00	%		0.00	%		0.95	%		0.00	%
Effect to adjust for pension plan termination expense, net of tax		0.00	%		0.00	%		0.00	%		0.00	%		0.20	%		0.00	%		0.10	%
Effect to adjust for FHLB prepayment penalty, net of tax		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Effect to adjust for merger & branch consol./acq expenses, net of tax		0.55	%		0.09	%		0.03	%		0.00	%		0.04	%		0.36	%		0.04	%
Adjusted return on average assets (non-GAAP)		0.68	%		0.69	%		1.26	%		1.30	%		1.28	%		0.68	%		1.26	%

Adjusted Return of Average Equity (3)
Return on average equity (GAAP)		-11.78	%		4.15	%		8.26	%		8.70	%		6.98	%		-4.67	%		7.29	%
Effect to adjust for securities gains		0.00	%		0.00	%		0.00	%		-0.06	%		-0.23	%		0.00	%		-0.15	%
Effect to adjust for PCL - NonPCD loans & unfunded commitments		12.79	%		0.00	%		0.00	%		0.00	%		0.00	%		7.08	%		0.00	%
Effect to adjust for pension plan termination expense, net of tax		0.00	%		0.00	%		0.00	%		0.00	%		1.29	%		0.00	%		0.65	%
Effect to adjust for FHLB prepayment penalty, net of tax		0.02	%		0.00	%		0.00	%		0.00	%		0.00	%		0.01	%		0.01	%
Effect to adjust for merger & branch consol./acq expenses, net of tax		4.33	%		0.60	%		0.21	%		0.00	%		0.28	%		2.67	%		0.20	%
Adjusted return on average equity (non-GAAP)		5.36	%		4.75	%		8.47	%		8.64	%		8.32	%		5.09	%		8.00	%

Adjusted Return on Average Common Tangible Equity (3) (5)
Return on average common equity (GAAP)		-11.78	%		4.15	%		8.26	%		8.70	%		6.98	%		-4.67	%		7.29	%
Effect to adjust for securities gains		0.00	%		0.00	%		0.00	%		-0.06	%		-0.23	%		0.00	%		-0.15	%
Effect to adjust for PCL - NonPCD loans & unfunded commitments		12.79	%		0.00	%		0.00	%		0.00	%		0.00	%		7.08	%		0.00	%
Effect to adjust for pension plan termination expense, net of tax		0.00	%		0.00	%		0.00	%		0.00	%		1.29	%		0.00	%		0.65	%
Effect to adjust for FHLB prepayment penalty, net of tax		0.02	%		0.00	%		0.00	%		0.00	%		0.00	%		0.01	%		0.01	%
Effect to adjust for merger & branch consol./acq expenses, net of tax		4.32	%		0.60	%		0.21	%		0.00	%		0.28	%		2.67	%		0.21	%
Effect to adjust for intangible assets		4.88	%		4.70	%		7.70	%		7.87	%		7.47	%		4.74	%		7.29	%
Adjusted return on average common tangible equity (non-GAAP)		10.23	%		9.45	%		16.17	%		16.51	%		15.79	%		9.83	%		15.30	%

Adjusted efficiency ratio (5)
Efficiency ratio		80.52	%		62.11	%		61.64	%		58.40	%		66.87	%
Effect to adjust for merger and branch consolidation related expenses		-18.61	%		-2.39	%		-0.91	%		0.00	%		-7.09	%
Adjusted efficiency ratio		61.91	%		59.72	%		60.73	%		58.40	%		59.78	%

Tangible Book Value Per Common Share (5)
Book value per common share (GAAP)	$	63.35		$	69.40		$	70.32		$	69.34		$	68.34
Effect to adjust for intangible assets		(25.02)			(31.39)			(31.19)			(31.14)			(30.49)
Tangible book value per common share (non-GAAP)	$	38.33		$	38.01		$	39.13		$	38.20		$	37.85

Tangible Equity-to-Tangible Assets (5)
Equity-to-assets (GAAP)		11.91	%		13.95	%		14.90	%		14.92	%		15.14	%
Effect to adjust for intangible assets		-4.35	%		-5.80	%		-6.02	%		-6.11	%		-6.15	%
Tangible equity-to-tangible assets (non-GAAP)		7.56	%		8.15	%		8.88	%		8.81	%		8.99	%

Footnotes to tables:

(1)	Loan data excludes mortgage loans held for sale.

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

(3)

Adjusted earnings, adjusted return on average assets, and adjusted return on average equity are non-GAAP measures and exclude the after-tax effect of gains on acquisitions, gains or losses on sales of securities, 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 $40.3 million, $4.1 million, $1.5 million, and $2.1 million, for the quarters ended June 30, 2020, March 31, 2020, December 31, 2019, and June 30, 2019, respectively; (b) securities (losses) gains, net of $24,000, $437,000, and $1.7 million, for the quarters ended December 31, 2019, September 30, 2019, and June 30, 2019, respectively; (c) Pension plan termination expense of $9.5 million for the quarter ended June 30, 2019; and (d) FHLB prepayment penalty of $199,000 and $134,000 for the quarter ended June 30, 2020 and March 31, 2019.

(4)	June 30, 2020 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.

(5)

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.

(6)	Includes loan accretion (interest) income related to the discount on acquired loans of $10.1 million, $10.9 million $7.4 million, $8.1 million, and $9.1 million, respectively, during the five quarters above.

(7)	Adjusted efficiency ratio is calculated by taking the noninterest expense excluding branch consolidation cost and merger cost, pension plan termination and the FHLB prepayment penalty divided by net interest income and noninterest income excluding securities gains (losses).

Cautionary Statement Regarding Forward Looking Statements

with service or product delivery; (13) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; (14) 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 recently enacted CARES Act, the Consumer Financial Protection Bureau rules and regulations, and the possibility of changes in accounting standards, policies, principles and practices, including changes in accounting principles relating to loan loss recognition (CECL); (15) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (16) reputation risk that adversely affects earnings or capital arising from negative public opinion; (17) terrorist activities risk that results in loss of consumer confidence and economic disruptions; (18) cybersecurity risk related to the dependence of South State on internal computer systems and the technology of outside service providers, as well as the potential impacts of third party security breaches, subjects each company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events; (19) greater than expected noninterest expenses; (20) noninterest income risk resulting from the effect of regulations that prohibit financial institutions from charging consumer fees for paying overdrafts on ATM and one-time debit card transactions, unless the consumer consents or opts‑in to the overdraft service for those types of transactions; (21) excessive loan losses; (22) failure to realize synergies and other financial benefits from, and to limit liabilities associated with, mergers and acquisitions within the expected time frame; (23) potential deposit attrition, higher than expected costs, customer loss and business disruption associated with merger and acquisition integration, including, without limitation, and potential difficulties in maintaining relationships with key personnel; (24) the risks of fluctuations in market prices for South State common stock that may or may not reflect economic condition or performance of South State; (25) the payment of dividends on South State common stock is subject to regulatory supervision as well as the discretion of the board of directors of South State, South State’s performance and other factors; (26) 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; (27) major catastrophes such as earthquakes, floods or other natural or human disasters, including infectious disease outbreaks, including the recent outbreak of a novel strain of coronavirus, a respiratory illness, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on South State and its customers and other constituencies; and (28) risks related to the merger of South State and CenterState, 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, and (29) other factors that may affect future results of South State and CenterState, as disclosed in South State’s Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and CenterState’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case filed by South State or CenterState, as applicable, 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.

NEW MICROSOFT WORD DOCUMENT_SLIDE001.GIF

Earnings Call 2Q 2020 Friday, July 31, 2020 Exhibit 99.2

NEW MICROSOFT WORD DOCUMENT_SLIDE002.GIF

Disclaimer 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 South State. 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. South State 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 negative economic developments resulting from federal spending cuts and/or one or more federal budget-related impasses or actions; (2) increased expenses, loss of revenues, and increased regulatory scrutiny associated with our total assets having exceeded $10.0 billion; (3) 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; (4) ownership dilution risk associated with potential acquisitions in which South State’s stock may be issued as consideration for an acquired company; (5) potential deterioration in real estate values; (6) 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; (7) 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; (8) interest risk involving the effect of a change in interest rates on the bank’s earnings, the market value of the bank’s loan and securities portfolios, and the market value of South State’s equity; (9) liquidity risk affecting the bank’s ability to meet its obligations when they come due; (10) risks associated with an anticipated increase in South State’s investment securities portfolio, including risks associated with acquiring and holding investment securities or potentially determining that the amount of investment securities South State desires to acquire are not available on terms acceptable to South State; (11) price risk focusing on changes in market factors that may affect the value of traded instruments in “mark-to-market” portfolios; (12) transaction risk arising from problems with service or product delivery; (13) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; (14) 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 recently enacted CARES Act, the Consumer Financial Protection Bureau rules and regulations, and the possibility of changes in accounting standards, policies, principles and practices, including changes in accounting principles relating to loan loss recognition (CECL); (15) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (16) reputation risk that adversely affects earnings or capital arising from negative public opinion; (17) terrorist activities risk that results in loss of consumer confidence and economic disruptions; (18) cybersecurity risk related to the dependence of South State on internal computer systems and the technology of outside service providers, as well as the potential impacts of third party security breaches, subjects each company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events; (19) greater than expected noninterest expenses; (20) noninterest income risk resulting from the effect of regulations that prohibit financial institutions from charging consumer fees for paying overdrafts on ATM and one-time debit card transactions, unless the consumer consents or opts‑in to the overdraft service for those types of transactions; (21) excessive loan losses; (22) failure to realize synergies and other financial benefits from, and to limit liabilities associated with, mergers and acquisitions within the expected time frame; (23) potential deposit attrition, higher than expected costs, customer loss and business disruption associated with merger and acquisition integration, including, without limitation, and potential difficulties in maintaining relationships with key personnel; (24) the risks of fluctuations in market prices for South State common stock that may or may not reflect economic condition or performance of South State; (25) the payment of dividends on South State common stock is subject to regulatory supervision as well as the discretion of the board of directors of South State, South State’s performance and other factors; (26) 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; (27) major catastrophes such as earthquakes, floods or other natural or human disasters, including infectious disease outbreaks, including the recent outbreak of a novel strain of coronavirus, a respiratory illness, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on South State and its customers and other constituencies; and (28) risks related to the merger of South State and CenterState, 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, and (29) other factors that may affect future results of South State and CenterState, as disclosed in South State’s Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and CenterState’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case filed by South State or CenterState, as applicable, 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. South State 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. The combined historical information referred to in this presentation as the “Combined Business Basis” is presented based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustment. The Combined Business Basis financial information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation.

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How We Operate the Company Soundness Profitability Growth

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South State – CenterState Merger of Equals Winter Haven Tampa Orlando Charleston Atlanta Charlotte Richmond SSB (305) Merger of equals closed ahead of schedule creating a premier $38 billion southeast franchise $25 billion in loans $30 billion in deposits Record revenue quarter on a combined business basis in midst of MOE and pandemic Strategic rationale more compelling in a COVID low interest rate environment Team building and integration of board and management well underway

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Quarterly Highlights Strong and consistent Pre-Provision Net Revenue (“PPNR”) performance across the two combined companies Significant loss absorption capacity exists through allowance and credit marks Credit metrics remain solid, with low losses and low past dues Liquidity at bank and holding company very strong $4.3 billion cash/FFS at bank $294 million cash at parent company Completion of $200 million sub debt offering at CenterState in May, prior to MOE closing CECL merger accounting and $151 million provision expense, $120 million of which was for acquired non-PCD loans & UFC (day 1 impact plus Q2 expense), led to reported net loss

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Quarterly Highlights (cont’d) Record quarter for Mortgage and Correspondent/Capital Markets Q2 20 Provision expense for acquired non-PCD loans & UFC = $2.15 in EPS(1) Q2 20 Merger-related expenses = $0.72 in EPS(1) Unrealized cost saves of $80 million = $0.87 per share(1) upon full realization (expected Q3 21 after system conversion) Diluted, net of tax; The EPS (diluted) impact measures are non-GAAP measures - See reconciliation of GAAP to Non-GAAP measures in Appendix

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Combined Business Basis Historical Pre-Provision Net Revenue (“PPNR”)(1) Dollars in millions Adjusted PPNR is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, securities gains or losses, FHLB Advances prepayment penalty ($199 thousand) and pension plan termination expenses - See reconciliation of GAAP to Non-GAAP measures in Appendix The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. $156 $162 $159 $158 $157 $- $50 $100 $150 $200 2Q19 3Q19 4Q19 1Q20 2Q20 $ in millions

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Bridge from Historical Combined Business Basis PPNR(1) to Reported Dollars in millions Adjusted PPNR is a Non-GAAP financial measure that excludes the impact of branch consolidation, merger related expenses, securities gains or losses, FHLB Advances prepayment penalty ($199 thousand) and pension plan termination expenses - See reconciliation of GAAP to Non-GAAP measures in Appendix The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. GAAP Net Loss $(85) The image part with relationship ID rId4 was not found in the file.

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Loss Absorption Capacity – June 30,2020 Dollars in millions Excludes PPP loans and loan held for sale Includes mark on CSFL loans and prior SSB acquisitions Q2 2020 % of Total Loans (1) Allowance for Credit Losses (“ACL”) Non-PCD ACL $280.3 PCD ACL 154.3 Total ACL $434.6 1.88% Reserve for Unfunded Commitments Reserve for unfunded commitments $21.1 0.09% Total ACL plus Reserve for Unfunded Commitments $455.7 1.97% Unrecognized Discount – Acquired Loans(2) $160.8 0.69% Total Loss Absorption Capacity $616.5 2.66% Total Loans Held for Investment(1) $23,163

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Tangible Book Value per Share(1) The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets - See reconciliation of GAAP to Non-GAAP measures in Appendix $37.85 $38.20 $39.13 $38.01 $38.33 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20

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Tangible Book Value per Share(1) $(1.30) Provision for Loan Losses – Acquired Non- PCD Loans & UFC (“double count”) $(119,079) Tax Benefit (22.56%) $26,864 Impact of Provision Expense – Acquired Non-PCD Loans, net of tax $(92,215) Shares Outstanding 70,907 Impact on Tangible Book Value per Share $(1.30) Impact of Provision Expense for Acquired Non-PCD Loans & UFC (“Double Count”) The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets - See reconciliation of GAAP to Non-GAAP measures in Appendix $38.01 $38.33 1Q 20 2Q 20

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Financial Highlights - Reported

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1Q20 2Q20 GAAP Net Income (Loss) $24.1 $(84.9) EPS (Diluted) $0.71 $(1.96) Return on Average Assets 0.60% (1.49)% Non-GAAP* Return on Average Tangible Common Equity 8.35% (19.71)% Non-GAAP, Adjusted* Net Income $27.6 $38.6 EPS $0.82 $0.89 Return on Average Assets 0.69% 0.68% Return on Average Tangible Common Equity 9.45% 10.23% Cash dividend per common share $0.47 $0.47 Highlights – Linked Quarter Dollars in millions, except per share data * 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; other adjusted figures presented are also a Non-GAAP financial measure that excludes the impact of merger related expenses, provision for credit losses for Non-PCD loans and unfunded commitments and FHLB prepayment penalty - See reconciliation of GAAP to Non-GAAP measures in Appendix

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Balance Sheet (unaudited) Dollars in millions ASSETS 1Q 2020 2Q 2020 Cash and cash equivalents $ 1,263 $ 4,364 Securities 2,034 3,272 Loans held for sale 72 603 Loans 11,507 25,499 Less allowance for credit losses (145) (435) Loans, net 11,362 25,064 Goodwill & intangibles 1,050 1,774 Other assets 862 2,648 Total assets $ 16,643 $ 37,725 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits $ 12,345 $ 29,957 Borrowings 1,642 1,810 Other liabilities 335 1,466 Total liabilities $ 14,322 $ 33,233 Total shareholders' equity $ 2,321 $ 4,492 Total liabilities and shareholders' equity $ 16,643 $ 37,725

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Capital Ratios Preliminary * The tangible measures are non-GAAP measures and exclude the effect of period end balance of intangible assets - See reconciliation of GAAP to Non-GAAP measures in Appendix 1Q 2020 2Q 2020(1) Tangible Common Equity* 8.2% 7.6% Tier 1 Leverage 9.5% 13.3% Tier 1 Common Equity 11.0% 10.7% Tier 1 Risk-Based Capital 12.0% 10.7% Total Risk-Based Capital 12.7% 12.9% Bank CRE Concentration Ratio 235% 251% 15

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Net Interest Margin Dollars in millions * Tax equivalent Tax equivalent NIM and NII excluding total loan accretion are Non-GAAP financial measures - See reconciliation of GAAP to Non-GAAP measures in Appendix 3.82% 3.73% 3.64% 3.68% 3.24% $127.2 $127.4 $126.5 $128.0 $162.6 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 Net Interest Margin* Net Interest Income

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Combined Business Basis Historical Performance

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Combined Business Basis Revenue Composition * Noninterest income and total revenue adjusted by securities gains or losses - See reconciliation of GAAP to Non-GAAP measures in Appendix The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. 79% 77% 77% 74% 72% 21% 23% 23% 26% 28% 0.69% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 0 0 0 1 1 1 1 2Q19 3Q19 4Q19 1Q20 2Q20 NIM / Revenue* Noninterest Income* / Revenue* Avg. 10-year UST

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Combined Business Basis Net Interest Margin Dollars in millions The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. 4.14% 3.96% 3.94% 3.94% 3.38% 2.8% 3.0% 3.2% 3.4% 3.6% 3.8% 4.0% 4.2% $200 $210 $220 $230 $240 $250 $260 $270 $280 $290 $300 2Q19 3Q19 4Q19 1Q20 2Q20 $ in millions NIM NIM

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Combined Business Basis Noninterest Income Dollars in millions * Noninterest income and total revenue adjusted by securities gains or losses - See reconciliation of GAAP to Non-GAAP measures in Appendix The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. $74 $86 $87 $100 $108 0.92% 1.04% 1.04% 1.19% 1.16% $0 $20 $40 $60 $80 $100 $120 2Q19 3Q19 4Q19 1Q20 2Q20 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% $ in millions Noninterest Income* Noninterest Income* / Avg Assets

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Combined Business Basis Efficiency Ratio(1) Efficiency Ratio and Adjusted Efficiency Ratio are Non-GAAP financial measures; Adjusted Efficiency Ratio also excludes the impact of branch consolidation, merger related expenses, securities gains or losses, FHLB Advances prepayment penalty and pension plan termination expenses and amortization expense on intangible assets (legacy CSFL only) – See Historical Income Statements in Appendix The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. 64% 61% 58% 60% 80% 55% 55% 56% 57% 58% 2Q19 3Q19 4Q19 1Q20 2Q20 Efficiency Ratio Adjusted Efficiency Ratio

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Combined Business Basis Loans(1) Dollars in billions Excludes loans held for sale The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. $22.9 $23.2 $23.4 $23.5 $23.2 $2.3 $22.9 $23.2 $23.4 $23.5 $25.5 $0 $5 $10 $15 $20 $25 $30 2Q19 3Q19 4Q19 1Q20 2Q20 $ in billions Originated & Acquired PPP

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Combined Business Basis Deposits Dollars in billions The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. $7.2 $7.3 $7.4 $7.3 $9.9 $4.5 $4.4 $4.5 $4.6 $6.2 $9.1 $9.3 $9.5 $9.6 $9.7 $4.1 $4.1 $4.0 $3.9 $4.1 $25.0 $25.1 $25.4 $25.5 $30.0 $- $5 $10 $15 $20 $25 $30 $35 2Q19 3Q19 4Q19 1Q20 2Q20 $ in billions DDA NOW MMA & Savings CDs

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Combined Business Basis Investments & FFS Dollars in billions * Fed funds and interest-earning deposits; excludes noninterest-earning deposits The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. All Combined Business Basis financial information should be reviewed in connection the historical information of the Company and CenterState, as applicable, included in the Appendix to this presentation. $3.8 $3.8 $4.1 $4.4 $3.3 $1.0 $0.7 $0.7 $1.0 $4.0 11.5% 11.6% 12.4% 12.4% 8.7% $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 2Q19 3Q19 4Q19 1Q20 2Q20 0% 2% 4% 6% 8% 10% 12% 14% $ in billions Investments Cash & FFS* Investments / Assets

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Asset Quality

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Asset Quality Average and period-end loan balances exclude loans held for sale and PPP loans Net Charge-Offs (“C/Os”) (annualized) & Past Dues 0.05% 0.00% 0.00% 0.10% 0.20% Q1 2020 Q2 2020 Net C/Os / Avg . Loans 27 1,070 0x 500x 1,000x 1,500x Q1 2020 Q2 2020 ACL Coverage of Net C/Os 0.20% 0.17% 0.00% 0.10% 0.20% 0.30% 0.40% Q1 2020 Q2 2020 Past Dues / Total Loans

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Asset Quality (cont’d) Dollars in millions Nonperforming Loans & Nonperforming Assets 255% 353% 0% 100% 200% 300% 400% 500% Q1 2020 Q2 2020 Allowance coverage of Nonperforming Loans ACL Coverage 0.39% 0.38% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% Q1 2020 Q2 2020 Nonperforming Assets Nonperforming Assets / Total Assets

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Loans – Industry Exposures(1) Selected Industries (% of total loan portfolio) Lodging $974 4.2% Restaurants $505 2.2% Retail CRE $2,215 9.6% Dollars in millions, unless otherwise noted Excludes loans held for sale and PPP loans Total Portfolio $23.2 Billion Commercial 71% Mortgage 19% Consumer 10%

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Lodging Portfolio 57% weighted average loan to value Lodging is $974 million or 4.2% of loan portfolio(1) 62% of portfolio under deferral(2) Top 3 MSA’s: Charleston, Greenville, Charlotte Dollars in millions Loan portfolio excluding loans held for sale and PPP loans As of 7/24/20, including anticipated 2nd deferrals Hilton $267 Marriott $249 Destination/ Resort $145 IHG $98 Choice $69 Wyndham $41 Hyatt $35 Other national brands $70

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Restaurant Portfolio 55% weighted average loan to value Restaurant is $505 million or 2.2% of loan portfolio(1) 28% of portfolio under deferral(2) Top 3 MSA’s: Orlando, Atlanta, Charleston Dollars in millions Loan portfolio excluding loans held for sale and PPP loans As of 7/24/20, including anticipated 2nd deferrals 30 Owner Occupied Real Estate $275 Non - Owner Occupied Real Estate $157 CDL $11 Non - RE Secured $62

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Retail CRE Portfolio 57% weighted average loan to value Retail CRE is $2.2 billion or 9.6% of loan portfolio(1) 19% of portfolio under deferral(2) Top 3 MSA’s: Orlando, Miami, Tampa Dollars in millions Loan portfolio excluding loans held for sale and PPP loans As of 7/24/20, including anticipated 2nd deferrals Non - Owner Occupied Real Estate , $1,750 Owner Occupied Real Estate , $406 CDL $59

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Loan Deferrals(1) Dollars in millions, unless otherwise noted Excludes loans held for sale and PPP loans * As of July 24, 2020, including anticipated 2nd deferrals $3,511 $3,771 $4,107 $2,741 14.99% 16.19% 17.45% 11.65% 0.00% 5.00% 10.00% 15.00% 20.00% $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Apr-20 May-20 Jun-20 Jul-20* $ in millions Total Deferrals % of Total Loans

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Appendix

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PPP Update Over 19,500 SBA loans ~$2.4 Billion(1) Total fees of ~$90 million (3.71% average), with $16 million in capitalized origination costs/fees paid $7 million net fees recognized in Q2; Unrecognized net fees of $67 million at June 30, 2020 Maturity of our PPP loans: 2 years 53 basis points impact of PPP on TCE ratio (temporarily expanded balance sheet)(2) On-site enhancement pay for branches and support area employees of ~$2.4 million Total production as of June 30, 2020 The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets - See reconciliation of GAAP to Non-GAAP measures in Appendix for the impact of PPP on TCE ratio

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Consumer Digital Services 2Q20 Quarterly Comparison

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Consumer Digital Services 2Q20 Quarterly Comparison (cont’d) Zelle became live end of Q2 of 2019 for Person-to-Person payments resulting in a higher transaction volume in comparison to previously reported quarters

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South State only Dollars in thousands Consumer Digital Services 2Q20 Consumer & Mortgage Loans 705 1,108 0 200 400 600 800 1,000 1,200 1,400 Online Consumer Loan Production Units 2020 YTD 2019 505 $25,877 $39,973 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $ in thousands Online Consumer Loans $ (1) 2020 YTD 2019 $ 18,892 23 31 43 57 75 79 17 13 20 26 24 25 27 28 32 42 32 28 0 10 20 30 40 50 60 70 80 90 100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mortgage Direct Production Units 2020 2019 $7,560 $6,491 $10,508 $15,435 $16,763 $17,254 $0 $4,000 $8,000 $12,000 $16,000 $20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $ in thousands Mortgage Direct Production $ (1) 2020 2019

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2nd Quarter 2020 Highlights Noninterest Income 1Q 2020 2Q 2020 Net Change Fees on Deposit Accounts $ 18.1 $ 16.7 $ (1.4) Correspondent Banking / Capital Markets 0.5 10.1 9.6 Mortgage Banking 14.6 18.3 3.7 Wealth Management 7.4 7.1 (0.3) Other Income 3.5 2.1 (1.4) Total Noninterest Income $ 44.1 $ 54.3 $ 10.2 Dollars in millions Noninterest Income

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2nd Quarter 2020 Highlights Dollars in millions * Adjusted is a Non-GAAP financial measure that excludes the impact of merger related expenses and FHLB Advances prepayment penalty - See reconciliation of GAAP to Non-GAAP measures in Appendix (1) FHLB Advances prepayment penalty was $199 thousand Noninterest Expense Noninterest Expense 1Q 2020 2Q 2020 Net Change Salaries and Benefits $ 61.0 $ 81.7 $ 20.7 Information Services Expenses 9.3 12.2 2.9 OREO and Loan Related Expenses 0.6 1.1 0.5 Net Occupancy Expenses & FFE 12.3 16.0 3.7 Amortization of intangibles 3.0 4.7 1.7 Professional Fees & Marketing 3.3 3.4 0.1 Other 13.6 15.5 1.9 Total Adjusted* Noninterest Expense $ 103.1 $ 134.6 $ 31.5 Consolidation and Merger Related Costs 4.1 40.3 36.2 FHLB Advances Prepayment Penalty - 0.2 0.2 Total Noninterest Expense $ 107.2 $ 175.1 $ 67.9

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Average Interest Earning Assets Dollars in millions Quarterly averages Average Balance % of Earning Assets 1Q 2020 % of Earning Assets 2Q 2020 Net Change Short-Term Investments 3.8% $538 10.0% $2,035 $1,497 Investment Securities 14.4% 2,023 11.4% 2,307 284 Loans – Acquired 14.4% 2,016 26.0% 5,271 3,255 Loans – Non-acquired 67.1% 9,424 51.6% 10,446 1,022 Total Loans 81.5% $11,440 77.6% $15,717 $4,277 Loans Held for Sale 0.3% 42 1.0% 203 161 Total Interest Earning Assets $14,043 $20,262 $6,219

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Merger-Related Expenses/Deal Costs(1) $40.2 million incurred during Q2 2020 $36.6 million recognized on CSFL side, pre-merger System conversion scheduled for Q2 2021 Cost save realization process on track Dollars in thousands, unless otherwise noted Only includes SSB/CSFL merger-related expenses Merger-related expense occurred pre-merger CSFL(2) SSB Total MRE Q1 2020 $ 3,076 $ 4,114 $ 7,190 4/1-6/7 33,526 33,526 Q2 2020 40,229 40,229 YTD $ 36,602 $ 44,343 $ 80,945

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PCD Loan Criteria • Loans graded Watch, Special Mention, or Substandard • Loans on Non-Accrual • Partial Charge Down • TDR • Specific Reserve • Over 30 days past due as of merger close date • DTI exceptions of 43% or higher • Supervisory LTV exceptions • Low Credit Scores (less than 640 for secured loans and less than 680 for unsecured loans) • 2 or more 30 day past due notices, or any 60/90 day notice over past 24 months • Serviced by Special Assets • All hotel loans (severe Covid-19 impact) • All loans granted a Covid-19 payment deferral

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Significant Purchase Accounting Marks(1) CenterState (“CSFL”) Estimated 6/7/2020 Loan Portfolio Merger Accounting Impacts ~$151 million credit mark on PCD loans (~4.9%) Non-PCD credit mark of ~$109 million and total interest premium of ~$8 million totaling ~$101 million to be accreted into interest income over time Day 2 entries include a PCL for Non-PCD loans of ~$109 million and ~$10 million for UFC’s Allowance for Credit Losses (“ACL”) for acquired loans estimated to increase by ~$260 million Core Deposit Intangible: ~$126 million (~1.14%(4) of avg. core deposits) CDs: Premium of ~$20.2 million Dollars in millions, unless otherwise noted Marks are preliminary Excludes PPP loans and loans held for sale Gross PCD loan balance Pre-tax Loan Balance(2) % of Total Credit Mark Interest Mark Total Mark PCD loans ~$3.1B(3) ~26% ~$(150.9mm) ~4.9% ~$(17.6mm) ~0.6% ~$(168.5mm) ~5.4% Non-PCD loans ~$8.7B ~74% ~$(108.8mm) ~1.3% ~$8.3mm ~(0.1)% ~$(100.5mm) ~1.2% ~$11.8B ~$(259.7mm) ~2.2% ~$(9.3mm) ~0.1% ~$(269.0mm) ~2.3%

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On Acquired Assets, Assumed Liabilities and Exchanged Consideration Estimated Fair Value Recorded(1) Initial As Recorded Fair Value As Recorded by (Dollars in thousands) by CSFL Adjustments the Company Assets Cash and cash equivalents $ 2,566,450 $ — $ 2,566,450 Investment securities 1,188,403 5,507 (a) 1,193,910 Loans held for sale 453,578 — 453,578 Loans, net of allowance and mark 12,969,091 (48,342) (b) 12,920,749 Premises and equipment 324,396 2,392 (c) 326,788 Intangible assets 1,294,211 (1,163,349) (d) 130,862 OREO and repossessed assets 10,849 (791) (e) 10,058 Bank owned life insurance 333,053 — 333,053 Deferred tax asset 54,123 (8,681) (f) 45,442 Other assets 1,061,136 (604) (g) 1,060,532 Total assets $ 20,255,290 $ (1,213,868) $ 19,041,422 Liabilities Deposits: Noninterest-bearing $ 5,291,443 $ — $ 5,291,443 Interest-bearing 10,312,370 19,702 (h) 10,332,072 Total deposits 15,603,813 19,702 15,623,515 Federal funds purchased and securities sold under agreements to repurchase 401,546 — 401,546 Other borrowings 278,900 (7,401) (i) 271,499 Other liabilities 1,088,048 (4,592) (j) 1,083,456 Total liabilities 17,372,307 7,709 17,380,016 Net identifiable assets acquired over (under) liabilities assumed 2,882,983 (1,221,577) 1,661,406 Goodwill — 600,483 600,483 Net assets acquired over liabilities assumed $ 2,882,983 $ (621,094) $ 2,261,889 Consideration: South State Corporation common shares issued 37,271,069 Purchase price per share of the Company's common stock $ 60.27 Company common stock issued ($2,246,327) and cash exchanged for fractional shares ($74) $ 2,246,401 Stock option conversion 8,080 Restricted stock conversion 7,407 Fair value of total consideration transferred $ 2,261,888 Dollars in millions, except per share data Fair value adjustments are preliminary

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On Acquired Assets, Assumed Liabilities and Exchanged Consideration (cont’d) Estimated Fair Value Recorded(1) Explanation of fair value adjustments (a)— Represents the reversal of CSFL's existing fair value adjustments of $40.7 million and the adjustment to record securities at fair value (premium) totaling $46.2 million (includes reclassification of all securities held as HTM to AFS totaling $175.7 million). (b)— Represents approximately 2.19%, or $269.1 million, total mark of the loan portfolio including a 2.11%, or $259.7 million credit mark, based on a third party valuation. Also, includes the reversal of CSFL's ending allowance for credit losses of $158.2 million and fair value adjustments of $62.6 million. (c)— Represents the MTM adjustment of $2.4 million on leased assets. (d)— Represents approximately a 1.14% core deposit intangible(2), or $125.9 million from a third party valuation. This amount is net of $84.9 million existing core deposit intangible and $1.2 billion of existing goodwill from CSFL’s prior transactions that was reversed. (e)— Represents the reversal of prior valuation reserves of $878,000 and recorded new valuation reserves of $1.7 million on both OREO and other repossessed assets. (f)— Represents deferred tax assets related to fair value adjustments with effective tax rate of 22.0%. This includes an adjustment from the CSFL rate to our rate. The difference in rates relates to state income taxes. (g)— Represents fair value adjustment of bank property held for sale of $3.8 million and a fair adjustment of a lease receivable of $116,000. These amounts are offset by a fair value negative adjustment for investment in low income housing of $3.3 million. (h)— Represents estimated premium for fixed maturity time deposits of $20.2 million partially offset by the reversal of existing CSFL fair value adjustments related to time deposit marks from other merger transactions of $546,000. (i)— Represents the recording of a discount of $12.5 million on TRUPs from a third party valuation partially offset by the reversal of the existing CSFL discount on TRUPs and other debt of $5.1 million. (j)— Represents the reversal of an existing $7.1 million unfunded commitment reserve at purchase date partially offset by a fair value adjustment to increase lease liabilities associated with rental facilities totaling $2.5 million. Fair value adjustments are preliminary Pre-tax

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Historical Income Statements Combined Company Basis (Unaudited) Dollars in thousands Through June 7, 2020 Does not include purchase accounting adjustments The combined historical information referred to in this presentation as the “Combined Company Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL (1) Combined Net income as reported (GAAP) 127,179 $ 158,681 $ 285,860 $ 127,373 $ 154,947 $ 282,320 $ 126,456 $ 157,925 $ 284,381 $ 128,013 $ 153,353 $ 281,366 $ 162,557 $ 111,624 $ 274,181 $ Provision for credit losses 3,704 2,792 6,496 4,028 3,692 7,720 3,557 3,048 6,605 36,533 44,914 81,447 151,474 185 151,659 Net interest income after credit loss provision 123,475 155,889 279,364 123,345 151,255 274,600 122,899 154,877 277,776 91,480 108,439 199,919 11,083 111,439 122,522 Total noninterest income 37,618 37,943 75,561 37,582 48,488 86,070 36,307 50,329 86,636 44,132 55,790 99,922 54,347 94,271 148,618 Total noninterest expense 109,407 121,989 231,396 96,364 127,036 223,400 100,628 113,409 214,037 107,247 122,772 230,019 175,112 132,703 307,815 Income before income tax 51,686 71,843 123,529 64,563 72,707 137,270 58,578 91,797 150,375 28,365 41,457 69,822 (109,682) 73,007 (36,675) Income tax provision 10,226 16,721 26,947 12,998 17,006 30,004 9,487 20,665 30,152 4,255 6,025 10,280 (24,747) 19,218 (5,529) Earnings attributable to noncontrolling interest - 599 599 - 603 603 - - - - - - - - - Net income as reported (GAAP) 41,460 $ 54,523 $ 95,983 $ 51,565 $ 55,098 $ 106,663 $ 49,091 $ 71,132 $ 120,223 $ 24,110 $ 35,432 $ 59,542 $ (84,935) $ 53,789 $ (31,146) $ Jun. 30, 2020 Mar. 31, 2020 Dec. 31, 2019 Sep. 30, 2019 Jun. 30, 2019

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Historical Income Statements Combined Company Basis (Unaudited) (cont’d) Dollars in thousands Through June 7, 2020 Does not include purchase accounting adjustments The combined historical information referred to in this presentation as the “Combined Company Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL (1) Combined Net interest income (GAAP) 127,179 $ 158,681 $ 285,860 $ 127,373 $ 154,947 $ 282,320 $ 126,456 $ 157,925 $ 284,381 $ 128,013 $ 153,353 $ 281,366 $ 162,557 $ 111,624 $ 274,181 $ Plus: Noninterest income 37,618 37,943 75,561 37,582 48,488 86,070 36,307 50,329 86,636 44,132 55,790 99,922 54,347 94,271 148,618 Less: Gain (loss) on sale of securities 1,709 (5) 1,704 437 - 437 24 (13) 11 - - - - 40,276 40,276 Total revenue, adjusted (non-GAAP) 163,088 $ 196,629 $ 359,717 $ 164,518 $ 203,435 $ 367,953 $ 162,739 $ 208,267 $ 371,006 $ 172,145 $ 209,143 $ 381,288 $ 216,904 $ 165,619 $ 382,523 $ Less: Noninterest expense 109,407 121,989 231,396 96,364 127,036 223,400 100,628 113,409 214,037 107,247 122,772 230,019 175,112 132,703 307,815 PPNR (Non-GAAP) 53,681 $ 74,640 $ 128,321 $ 68,154 $ 76,399 $ 144,553 $ 62,111 $ 94,858 $ 156,969 $ 64,898 $ 86,371 $ 151,269 $ 41,792 $ 32,916 $ 74,708 $ Adjustments: Merger-related expenses - 15,739 15,739 - 16,994 16,994 - 159 159 4,129 3,051 7,180 40,279 32,690 72,969 FHLB prepayment penalty - - - - - - - - - - - - 199 9,185 9,384 Branch consolidation and cost save initiatives 2,078 - 2,078 - - - 1,494 - 1,494 - - - - - - Pension plan termination expense 9,526 - 9,526 - - - - - - - - - - - - Non-recurring items 11,604 15,739 27,343 - 16,994 16,994 1,494 159 1,653 4,129 3,051 7,180 40,478 41,875 82,353 PPNR, Adjusted (Non-GAAP) 65,285 $ 90,379 $ 155,664 $ 68,154 $ 93,393 $ 161,547 $ 63,605 $ 95,017 $ 158,622 $ 69,027 $ 89,422 $ 158,449 $ 82,270 $ 74,791 $ 157,061 $ Jun. 30, 2020 Mar. 31, 2020 Dec. 31, 2019 Sep. 30, 2019 Jun. 30, 2019

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Historical Efficiency Ratios Combined Company Basis (Unaudited) (cont’d) Dollars in thousands Through June 7, 2020 Does not include purchase accounting adjustments Legacy CSFL also adjusted noninterest expense by intangible assets’ amortization expenses for the adjusted efficiency ratios, which were approximately $4.4, $4.2, $4.6, $4.5 and $2.9 million for Q2 19, Q3 19, Q4 19, Q1 20 and Q2 20 (through June 7), respectively The combined historical information referred to in this presentation as the “Combined Company Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in this release has not been prepared in accordance with Article 11 of Regulation S-X, and therefore does not reflect any of the pro forma adjustments that would be required thereby. SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL Combined (2) SSB CSFL (1) Combined Noninterest expense (GAAP) 109,407 121,989 231,396 96,364 127,036 223,400 100,628 113,409 214,037 107,247 122,772 230,019 175,112 132,703 307,815 Net interest income (GAAP) 127,179 158,681 285,860 127,373 154,947 282,320 126,456 157,925 284,381 128,013 153,353 281,366 162,557 111,624 274,181 Tax Equivalent ("TE") adjustments 521 495 1,016 496 491 987 503 564 1,067 530 685 1,215 579 495 1,074 Net interest income, TE (non-GAAP) 127,700 159,176 286,876 127,869 155,438 283,307 126,959 158,489 285,448 128,543 154,038 282,581 163,136 112,119 275,255 Noninterest income (GAAP) 37,618 37,943 75,561 37,582 48,488 86,070 36,307 50,329 86,636 44,132 55,790 99,922 54,347 94,271 148,618 Less: Gain (loss) on sale of securities 1,709 (5) 1,704 437 - 437 24 (13) 11 - - - - 40,276 40,276 Adjusted noninterest income (non-GAAP) 35,909 37,948 73,857 37,145 48,488 85,633 36,283 50,342 86,625 44,132 55,790 99,922 54,347 53,995 108,342 Efficiency Ratio (Non-GAPP) 67% 62% 64% 58% 62% 61% 62% 54% 58% 62% 59% 60% 81% 80% 80% Noninterest expense (GAAP) 109,407 121,989 231,396 96,364 127,036 223,400 100,628 113,409 214,037 107,247 122,772 230,019 175,112 132,703 307,815 Less Adjustments: Non-recurring items (3) 11,604 20,174 31,778 - 21,223 21,223 1,494 4,711 6,205 4,129 7,586 11,715 40,478 44,761 85,239 Adjusted noninterest expense (non-GAAP) 97,803 101,815 199,618 96,364 105,813 202,177 99,134 108,698 207,832 103,118 115,186 218,304 134,634 87,942 222,576 Adjusted Efficiency Ratio (Non-GAPP) 60% 52% 55% 58% 52% 55% 61% 52% 56% 60% 55% 57% 62% 53% 58% Jun. 30, 2020 Mar. 31, 2020 Dec. 31, 2019 Sep. 30, 2019 Jun. 30, 2019

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Non-GAAP Reconciliations Tangible Book Value per Share & Tangible Common Equity (“TCE”) Ratio Dollars in thousands, except for per share data Tangible Book Value per Share 2Q19 3Q19 4Q19 1Q20 2Q20 Shareholders' common equity (excld. preferred stock) $ 2,373,978 $ 2,350,956 $ 2,373,013 $ 2,321,043 $4,491,850 Less: Intangible assets 1,059,251 1,055,983 1,052,716 1,049,709 1,774,294 Tangible shareholders' common equity (excld. preferred stock) $ 1,314,727 $ 1,294,973 $ 1,320,297 $ 1,271,334 $2,717,556 Common shares issued and outstanding 34,735,587 33,902,726 33,744,385 33,444,236 70,907,119 Tangible Book Value per Common Share (Non-GAAP) $ 37.85 $ 38.20 $ 39.13 $ 38.01 $ 38.33 Tangible Common Equity ("TCE") Ratio 1Q20 2Q20 Shareholders' equity (GAAP) $ 2,321,043 $ 4,491,850 Less: Intangible assets 1,049,709 1,774,294 Tangible common equity (non-GAAP) $ 1,271,334 $ 2,717,556 Total assets (GAAP) 16,642,911 37,725,356 Less: Intangible assets 1,049,709 1,774,294 Tangible asset (non-GAAP) $ 15,593,202 $ 35,951,062 TCE Ratio (Non-GAAP) 8.2% 7.6% 49

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Non-GAAP Reconciliations Return on Average Tangible Common Equity 1Q20 2Q20 Net income (loss) (GAAP) $ 24,110 $ (84,935) Plus: Amortization of intangibles 3,007 4,665 Effective tax rate, excluding DTA write-off 15% 23% Amortization of intangibles, net of tax 2,556 3,612 Net income plus after-tax amortization of intangibles (non-GAAP) $ 26,666 $ (81,323) Average shareholders' common equity, excluding preferred stock $ 2,336,348 $ 2,900,443 Less: Average intangible assets 1,051,491 1,240,650 Average tangible common equity $ 1,284,857 $ 1,659,793 Return on Average Tangible Common Equity (Non-GAAP) 8.35% (19.71%) Dollars in thousands 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.

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Adjusted Net Income (Loss) 1Q20 2Q20 Net income (loss) (GAAP) $ 24,110 $ (84,935) Plus: Merger and branch consolidation related expense, net of tax 3,510 31,191 Provision for credit losses - Non-PCD loans & UFC - 92,212 FHLB advances prepayment penalty, net of tax - 154 Adjusted Net Income (Loss) (Non-GAAP) $ 27,620 $ 38,622 Adjusted EPS 1Q20 2Q20 Diluted weighted-average common shares 33,805 43,606 Net income (loss) (GAAP) $ 24,110 $ (84,935) Plus: Merger and branch consolidation related expense, net of tax 3,510 31,191 Provision for credit losses - Non-PCD loans & UFC - 92,212 FHLB advances prepayment penalty, net of tax - 154 Adjusted net income(Non-GAAP) $ 27,620 $ 38,622 Adjusted EPS, Diluted (Non-GAAP) $ 0.82 $ 0.89 Non-GAAP Reconciliations Adjusted Net Income (Loss) & Adjusted Earnings Per Share (“EPS”) Dollars in thousands, except for per share data

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Non-GAAP Reconciliations Adjusted Return on Average Assets & Average Tangible Common Equity Adjusted Return on Average Assets 1Q20 2Q20 Net operating earnings (non-GAAP) $ 27,620 $ 38,622 Total average assets 16,052,933 22,898,925 Adjusted Return on Average Assets (Non-GAAP) 0.69% 0.68% Adjusted Return on Average Tangible Common Equity 1Q20 2Q20 Net operating earnings (non-GAAP) $ 27,620 $ 38,622 Plus: Amortization of intangibles, net of tax 2,556 3,612 Net operating earnings plus after-tax amortization of intangibles (non-GAAP) $ 30,176 $ 42,234 Average tangible common equity $ 1,284,857 $ 1,659,793 Adjusted Return on Average Tangible Common Equity (Non-GAAP) 9.45% 10.23% Dollars in thousands 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.

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Non-GAAP Reconciliations Net Interest Margin, Tax Equivalent Dollars in thousands, unless otherwise noted 2Q19 3Q19 4Q19 1Q20 2Q20 Net interest income (GAAP) $ 127,179 $ 127,373 $ 126,456 $ 128,013 $162,557 Tax equivalent adjustments 521 496 503 530 579 Net interest income (tax equivalent) (Non-GAAP) $ 127,700 $ 127,869 $ 126,959 $ 128,543 $163,136 Average earning assets $ 13,415,161 $13,595,944 $13,834,211 $14,042,524 $20,262,035 Net Interest Margin, Tax Equivalent (Non-GAAP) 3.82% 3.73% 3.64% 3.68% 3.24%

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Non-GAAP Reconciliations Acquired Non-PCD Provision and Merger Expense Impact to EPS (Non-GAAP) Dollars in millions, except per share data Diluted At effective tax rate of 22.56% 2Q20 Net Loss (GAAP) $ (84,935) Weighted average common shares outstanding 43,318 Earnings Per Share ("EPS"), diluted $ (1.96) Q2 Provision expense on acquired non-PCD & UFC, net of tax(1) (93,094) EPS Impact $ (2.15) Q2 Merger expense, net of tax(1) (31,192) EPS Impact $ (0.72) Q3 projected weighted average common shares outstanding 71,011 Projected cost saves, net of tax(1) $ 61,952 EPS Impact $ 0.87

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Non-GAAP Reconciliations PPP Impact to TCE (Non-GAAP) Dollars in millions 2Q20 Shareholders' equity (GAAP) $ 4,492 Less: Intangible assets 1,774 Tangible common equity (non-GAAP) $ 2,718 Total assets (GAAP) 37,725 Less: Intangible assets 1,774 Tangible asset (non-GAAP) $ 35,951 Tangible Common Equity ("TCE") ratio (non-GAAP) 7.56% Tangible asset (non-GAAP) $ 35,951 Less: PPP loans 2,336 Adjusted tangible asset (non-GAAP) $ 33,614 Adjusted TCE ratio (non-GAAP) 8.08% PPP Impact to TCE (Non-GAAP) 0.53%

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