2024 Annual Report
2024 Letter to Shareholders
Dear fellow
The mood in the banking industry in 2024 started and ended with optimism, although there were a few bumps along the way in the spring. The excess stimulus of theCOVID era continued to fade, inflation cooled to morenormal levels and the
In addition to the rate cuts, our country elected a new President and a new
At
1Forsoundness, we ended the year with healthy capital levels and loan loss reserves. Asset quality remained clean. We experienced only six basis points of net charge-offs in 2024, far below industry norms. And as
We are building staffing, controls, and computersystems that monitor operational risks, liquidity levels, credit quality, and capital adequacy. We are making these investments in close consultation with our regulatory partners and subject-matter experts. This level of sophistication will allow our company to continue growing without getting ahead of our skis.
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2Profitabilitywas a challenge early in the year as we wrestled with the inverted yield curve. However, our granular, low-cost checking account franchise carried the day and allowed us to end the year with a retuon assets of 1.2% and a retuon tangible commonequity of 15%. As we move into 2025, our profitability will benefit as lower fixed rate assets mature andreset at materially higher interest rates.
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3As we contemplated the economics of an inverted yield curve, we decided that a moderate rate ofgrowthwas appropriate for 2024. We planned on mid-single digit growth in loans, and we landed at 5% growth for the year. As the yield curve begins to steepen, we envision a retuto normal growth rates in both loans and deposits.
SouthState is positioned in 12 of the 15 fastest growing MSAs inthe United States and our prospects for growth are as good as any bank in the country.As we navigated the COVID era and the sudden increase in interest rates, our balanced approach tosoundness, profitability and growth paid off. During2024,
SouthState shares increased in value by 18% compared to the KBW NASDAQ Regional Banking Index that was up 10%. Not only didSouthState shares outperform the benchmark in 2024, but our shares have outperformed the benchmark for three consecutive years in a row. In that period,SouthState shares have outperformed the regional bank index by 29%.Over the years, our strategy has not changed. Simply put, we are striving to position
SouthState in the best geographies, with the best scale, and with the best business model. It feels like a commonsense approach to us but one that requires constant focus and daily
nurturing. As we considered our options to advance this strategy, we concluded that a combination with Independent Financial in
The announcement we made in May was a partnership that has been in the works since 2019.
As we think about achieving the best scale, we are attempting to remain in the regulatory sweet spot. We need to have the appropriate scale to afford the expensive technology and risk management systems tobe relevant, without crossing a more difficult regulatory threshold until we are ready. Today, that more difficultregulatory threshold is
And finally, we are striving to build the best businessmodel that attracts, motivates, compensates, and inspires the best team of bankers in
There are many reasons to be optimistic about the future - a better yield curve, lower regulation, and prospects for economic growth. With this tailwind,
As always, we are grateful for the support of our owners.
We thank you for your trust, for your confidence, and foryour investment in
Chief Executive Officer
Please read the following disclosure along with the annual shareholder letter.
Forward Looking Statement:This Report contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks and uncertainties. Although we believe that the expectations reflected in this discussion are reasonable, actualresults may be materially different. Please refer to the Company's Annual Report on Form 10-K for the year-ended
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