News Column

South State Corporation Reports Operating Results of $0.92 per share; Increases Quarterly Cash Dividend

August 16, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- South State Corporation (NASDAQ: SSB) released its unaudited results of operations and other financial information for the three-month and six-month periods ended June 30, 2014. Highlights of the second quarter 2014 include the following: Net income available to common shareholders of $17.9 million, or $0.74 diluted EPS in 2Q 2014, up 13.3%, compared to $15.8 million, or $0.66 diluted EPS in 1Q 2014, and up 43.2% from $12.5 million, or $0.74 diluted EPS in 2Q 2013; Operating earnings of $22.2 million, which exclude merger and branding expenses and include preferred stock dividends, or $0.92 diluted operating EPS in 2Q 2014, up 12.1%, compared to $19.8 million, or $0.82 diluted operating EPS in 1Q 2014, and up 69.1% from $13.1 million, or $0.77 diluted operating EPS in 2Q 2013; Rebranded and changed the name to South State Corporation and South State Bank; Return on average assets was 0.91% annualized in 2Q 2014 compared to 0.86% in 1Q 2014 and 0.99% in 2Q 2013; Operating return on average assets was 1.12% annualized in 2Q 2014 compared to 1.06% in 1Q 2014 and 1.04% in 2Q 2013; Return on average tangible common equity was 13.6% annualized in 2Q 2014 compared to 12.6% in 1Q 2014, and 13.5% in 2Q 2013; Operating return on average tangible common equity was 16.6% in 2Q 2014 compared to 15.5% in 1Q 2014 and 14.1% in 2Q 2013; Tangible common equity per share increased by $1.02 during the second quarter to $24.13; Net charge-offs of non-acquired loans increased to 0.17% annualized in 2Q 2014, compared to 0.05% annualized in 1Q 2014 and decreased from 0.40% annualized in 2Q 2013; Operating efficiency ratio decreased to 63.6% in 2Q2014, compared to 64.1% in 1Q2014 and 63.8% in 2Q2013; Legacy loan growth for 2Q 2014 was $194.7 million or 26.1% annualized. Quarterly Cash Dividend The Board of Directors of South State Corporation has declared a quarterly cash dividend of $0.21 per share payable on its common stock. This per share amount is $0.01 per share, or 5.0% higher than the dividend paid in the immediately preceding quarter and is $0.02 per share, or 10.5%, higher than a year ago. The dividend will be payable on August 22, 2014 to shareholders of record as of August 15, 2014. Second Quarter 2014 Financial Performance Please refer to the accompanying tables for detailed comparative data on results of operations and financial results. The Company reported consolidated net income available to common shareholders of $17.9 million, or $0.74 per diluted common share for the three months ended June 30, 2014 up from $15.8 million, or $0.66 per diluted common share for the three months ended March 31, 2014. This $2.1 million increase was primarily the result of improved noninterest income, lower noninterest expense, and the elimination of the preferred stock dividend with the redemption of the preferred stock in March of 2014. These three improvements were offset by lower net interest income, higher provision for loan losses and higher provision for income taxes in terms of dollars (same effective tax rate).

"The second quarter was highlighted by very strong organic loan growth of $195 million. This was complemented by improved growth and profitability in mortgage banking, wealth management, and bankcard services," said Robert R. Hill, Jr., CEO of South State Corporation. "I am especially pleased with our operating return on tangible common equity of 16.6% and our increase in tangible book value per share by $1.02. The combination of the merger with First Financial, good credit quality, and strong organic growth resulted in operating earnings of $22.2 million, a 69% increase over the second quarter of 2013." Asset Quality During the second quarter of 2014, the Company's trend of improved asset quality continued, excluding acquired loans and acquired other real estate owned (OREO), as nonperforming loans declined by $2.1 million, or 5.7%. Non-acquired nonperforming assets (NPAs) as a percentage of total non-acquired loans and repossessed assets declined to 1.39% compared to 1.66% in the first quarter of 2014. NPAs, excluding acquired NPAs, declined by $5.3 million from the first quarter 2014 level.

At June 30, 2014, the allowance for non-acquired loan losses was $35.4 million or 1.12% of non-acquired period-end loans. The current allowance for loan losses provides 1.00 times coverage of period-end non-acquired nonperforming loans, up from 0.93 times at the end of the first quarter of 2014. Net charge-offs within the non-acquired portfolio were $1.3 million for the quarter or 0.17% annualized, up from the first quarter of 2014 of $332,000 or 0.05% annualized, and down from the second quarter of 2013 of $2.6 million or 0.40% annualized.

Keywords for this news article include: Investment and Finance, South State Corporation.

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Source: Investment Weekly News


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