CenterState Bank (CSFL) FWP Free writing prospectus

1

Fixed Income

Investor Presentation

May 2020

Issuer Free Writing Prospectus

Filed Pursuant to Rule 433

Registration No. 333-238144

May 21, 2020

2

Information

in

this

presentation,

other

than

statements

of

historical

facts,

may

constitute

forward-looking

statements,

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

These

statements

include,

but

are

not

limited

to,

statements

about

the

benefits

of

the

proposed

merger

of

South

State

Corporation

(“South

State”)

and

CenterState

Bank

Corporation

(“CenterState”),

including

future

financial

and

operating

results

(including

the

anticipated

impact

of

the

transaction

on

South

State’s

and

CenterState’s

respective

earnings

and

tangible

book

value),

statements

related

to

the

expected

timing

of

the

completion

of

the

merger,

the

combined

company’s

plans,

objectives,

expectations

and

intentions,

and

other

statements

that

are

not

historical

facts.

Forward-looking

statements

may

be

identified

by

terminology

such

as

“may,”

“will,”

“should,”

“scheduled,”

“plans,”

“intends,”

“anticipates,”

“expects,”

“believes,”

“estimates,”

“potential,”

or

“continue”

or

negatives

of

such

terms

or

other

comparable

terminology.

All

forward-looking

statements

are

subject

to

risks,

uncertainties

and

other

factors

that

may

cause

the

actual

results,

performance

or

achievements

of

South

State

or

CenterState

to

differ

materially

from

any

results

expressed

or

implied

by

such

forward-looking

statements.

Such

factors

include,

among

others,

(1)

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,

(2)

disruption

to

the

parties’

businesses

as

a

result

of

the

announcement

and

pendency

of

the

merger,

(3)

the

occurrence

of

any

event,

change

or

other

circumstances

that

could

give

rise

to

the

termination

of

the

merger

agreement,

(4)

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,

(5)

the

failure

to

obtain

the

necessary

approvals

by

the

shareholders

of

South

State

or

CenterState,

(6)

the

amount

of

the

costs,

fees,

expenses

and

charges

related

to

the

merger,

(7)

the

ability

by

each

of

South

State

and

CenterState

to

obtain

required

governmental

approvals

of

the

merger

(and

the

risk

that

such

approvals

may

result

in

the

imposition

of

conditions

that

could

adversely

affect

the

combined

company

or

the

expected

benefits

of

the

transaction),

(8)

reputational

risk

and

the

reaction

of

each

company’s

customers,

suppliers,

employees

or

other

business

partners

to

the

merger,

(9)

the

failure

of

the

closing

conditions

in

the

merger

agreement

to

be

satisfied,

or

any

unexpected

delay

in

closing

the

merger,

(10)

the

possibility

that

the

merger

may

be

more

expensive

to

complete

than

anticipated,

including

as

a

result

of

unexpected

factors

or

events,

(11)

the

dilution

caused

by

South

State’s

issuance

of

additional

shares

of

its

common

stock

in

the

merger,

(12)

a

material

adverse

change

in

the

financial

condition

of

South

State

or

CenterState,

(13)

general

competitive,

economic,

political

and

market

conditions,

(14)

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

or

CenterState

and

its

customers

and

other

constituencies,

and

(15)

other

factors

that

may

affect

future

results

of

CenterState

and

South

State

including

changes

in

asset

quality

and

credit

risk;

the

inability

to

sustain

revenue

and

earnings

growth;

changes

in

interest

rates

and

capital

markets;

inflation;

customer

borrowing,

repayment,

investment

and

deposit

practices;

the

impact,

extent

and

timing

of

technological

changes;

capital

management

activities;

and

other

actions

of

the

Federal

Reserve

Board

and

legislative

and

regulatory

actions

and

reforms.

Additional

factors

which

could

affect

future

results

of

CenterState

and

South

State

can

be

found

in

the

registration

statement

on

Form

S-4,

as

amended,

as

well

as

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

with

the

SEC

and

available

on

the

SEC’s

website

at

http://www.sec.gov.

CenterState

and

South

State

disclaim

any

obligation

and

do

not

intend

to

update

or

revise

any

forward-looking

statements

contained

in

this

communication,

which

speak

only

as

of

the

date

hereof,

whether

as

a

result

of

new

information,

future

events

or

otherwise,

except

as

required

by

federal

securities

laws.

Additional

Information

and

Where

to

Find

It

CenterState

has

filed

a

registration

statement

(including

a

prospectus)

(File

No.

333-238144)

and

a

preliminary

prospectus

supplement

with

the

SEC

for

the

offering

to

which

this

presentation

relates.

Before

you

invest,

you

should

read

the

prospectus

and

the

preliminary

prospectus

supplement

in

that

registration

statement

and

the

other

documents

that

CenterState

has

filed

with

the

SEC

for

more

complete

information

about

the

company

and

the

offering.

You

may

get

these

documents

for

free

by

visiting

EDGAR

on

the

SEC’s

web

site

at

www.sec.gov.

Alternatively,

CenterState,

any

underwriter

or

any

dealer

participating

in

the

offering

will

arrange

to

send

you

copies

of

the

prospectus

and

the

preliminary

prospectus

supplement

relating

to

the

offering

if

you

request

it

by

contacting:

Keefe

Bruyette

&

Woods,

Inc.

at

(800)

966-1559

or

U.S.

Bancorp

Investments,

Inc.

at

(877)

558-2607.

Certain

information

contained

in

this

presentation

and

statements

made

orally

during

this

presentation

relate

to

or

are

based

on

publications

and

other

data

obtained

from

third

party

sources.

While

CenterState

believes

these

third

party

sources

to

be

reliable

as

of

the

date

of

this

presentation,

CenterState

has

not

independently

verified,

and

makes

no

representation

as

to

the

adequacy,

fairness,

accuracy

or

completeness

of,

any

information

obtained

from

such

third

party

sources.

Notes

Regarding

the

Use

of

Non-GAAP

Financial

Measures

This

presentation

contains

financial

information

determined

by

methods

other

than

in

accordance

with

accounting

principles

generally

accepted

in

the

United

States

of

America

(“GAAP”).

Management

uses

these

“non-GAAP”

measures

in

its

analysis

of

the

Company’s

performance.

Management

believes

these

non-GAAP

financial

measures

allow

for

better

comparability

of

period

to

period

operating

performance.

Additionally,

the

Company

believes

this

information

is

utilized

by

regulators

and

market

analysts

to

evaluate

a

company’s

financial

condition

and

therefore,

such

information

is

useful

to

investors.

These

disclosures

should

not

be

viewed

as

a

substitute

for

operating

results

determined

in

accordance

with

GAAP,

nor

are

they

necessarily

comparable

to

non-

GAAP

performance

measures

that

may

be

presented

by

other

companies.

A

reconciliation

of

the

non-GAAP

measures

used

in

this

presentation

to

the

most

directly

comparable

GAAP

measures

is

provided

in

the

Appendix

to

this

presentation.

Forward Looking Statements

3

Preliminary Term Sheet

Issuer

Security Offered

Security Rating

Structure

Issuance Type

Term

Call Date

Use of Proceeds

Joint Bookrunners

CenterState

Bank Corporation (Nasdaq: CSFL)

Holding Company Subordinated Debt Due 2030

BBB by Kroll Bond Rating Agency

Fixed-to-Floating Rate Subordinated Notes

SEC Registered

10 years

5 years

General Corporate Purposes

Keefe, Bruyette & Woods, U.S. Bancorp Investments, Inc.

4

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Presentation Contents

I. About CenterState Bank Corporation

II. Financial Highlights

III. Appendix

5

Merger Update

Progress

1/27

Announce

Strategic

Merger

of

Equals

1/28-2/9

Town Halls with Executive Leadership reached

~50% of employees

February

Integration

Kickoff and Team selection

Weekly

Integration Team Meetings

Weekly

Executive Team

Meetings

March

All Regulatory Applications Filed

3/5/20

Core Provider Selected

3/5/20

Named

Line

of

Business

and

Market

Leaders

4/20/20

S-4 Became

Effective

Next Steps

5/21/20

Shareholder Vote

3Q 20

Anticipated Close

2Q 21

Expected System Conversion

6

Proven Performance and Stability

~0.5% /

~0.6%

Cost of Total         

Deposits

~12.2%

Total

Capital

Ratio

(1)

~8.6%

TCE /

TA

(1)

~0.6% / ~0.8% 

NPAs / Loans +

OREO

Overview of Pro Forma Company

Source: Company documents, S&P Global Market Intelligence

Data as of or for the three months ended 3/31/20

Note: Nonperforming asset include nonaccrual loans, loans past due 90 days or more and still accruing, OREO / ORA

and performing restructured loans

(1)

Pro Forma for merger of equals with South State Corporation as of 3/31/20

(2)

Includes loans held for sale

(3)

Includes top 15 largest markets in the Southeast sorted by projected ’20 –

’25 population growth markets 

$35B

Assets

$24B

Gross Loans

(2)

$26B

Deposits

Meaningful Scale Through Partnership

(1)

Winter Haven

Tampa

Orlando

Charleston

Atlanta

Charlotte

Richmond

CSFL + SSB (304)

Dominant Southeast Franchise

(3)

300+

Branch

Locations

#8

Largest Bank

Headquartered in

the Southeast

10

15

Southeast Growth

Markets

of the

top

CSFL

+ SSB

7

$2.7

$3.6

$3.9

$5.1

$7.9

$7.8

$8.6

$8.9

$14.5

$14.7

$15.9

$16.6

$1.8

$2.1

$2.3

$2.4

$2.4

$3.8

$4.0

$5.1

$7.1

$12.3

$17.1

$18.6

$34.6

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Q1 2020

SSB

CSFL

Pro Forma

Proven Successful Acquirors

Source: Company documents, S&P Global Market Intelligence

Data as of 12/31 for each respective year; Q1 2020 data as of 3/31/20

Note: Total assets for targets as of fiscal year end before announcement date

(1)

FDIC-assisted acquisition

(2)

Whole bank acquisition

(3)

Branch deal

(4)

Pro Forma for merger of equals with South State Corporation

Peoples Bancorporation Inc.

~$0.5B Assets

(2)

Savannah Bancorp

Inc

~$1.0B Assets

(2)

First Financial

Holdings Inc

~$3.2B Assets

(2)

Southeastern Bank

Financial Corp             

~$1.8B Assets

(2)

Park Sterling Corp   

~$3.3B Assets

(2)

South State

Corporation +

CenterState

Bank

Corporation MOE

South State

Corporation +

CenterState

Bank

Corporation MOE

Community National

Bank at Bartow

<$0.1B Assets

(1)

Independent

National Bank

~$0.2B Assets

(1)

Federal Trust Corp

~$0.6B Assets

(2)

Central Florida State

Bank

<$0.1B Assets

(1)

First Guaranty Bank

& Trust Co of

Jacksonville

~$0.4B Assets

(1)

Gulfstream

Bancshares Inc.

~$0.6B Assets

(2)

First Southern

Bancorp Inc.

~$1.1B Assets

(2)

Community Bank of

South Florida Inc

~$0.5B Assets

(2)

Hometown of

Homestead

Banking Co.

~$0.3B Assets

(2)

Platinum Bank

Holding Co.

~$0.6B Assets

(2)

Gateway Financial

Holdings of

Florida Inc

~$0.8B Assets

(2)

HCBF Holding Co

Inc.

~$2.2B Assets

(2)

Sunshine Bancorp

Inc.

~$0.9B Assets

(2)

Charter Financial

Corp

~$1.6B Assets

(2)

National

Commerce Corp

~$4.2B Assets

(2)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Community Bank & Trust

~$1.1B Assets

(1)

Habersham Bank

~$0.4B Assets

(1)

BankMeridian, NA             

~$0.2B Assets

(1)

Total Assets Over Time ($B)

13 Bank of

America Corp.

Branches             

~$0.4B Deposits

(3)

(4)

Asset CAGR: 25.9%

Asset CAGR: 19.4%

8

Key Investment Highlights

High-Powered Franchise with Proven Business Model

Fortress Balance Sheet and Sound Capital Allocation

Conservative Credit Culture and Risk Management

Continued Investment in Technology and Mobile Banking

Track Record of Well-Executed Mergers and Acquisitions

Deep and Experienced Leadership Team

Diversified Footprint Across Attractive Southeast Markets

9

Deep and Experienced Management Team

Will Matthews

Chief Financial

Officer

Steve Young

Chief Strategy

Officer

Richard Murray

President

Robert Hill

Executive

Chairman

John Corbett

Chief Executive

Officer

John Pollok

SEVP and

Director

Renee Brooks

Chief Operating

Officer

Greg Lapointe

Chief Banking

Officer

10

Attractive Markets of Operation

Source: S&P Global Market Intelligence

Dollars in billions

Deposit data as of 6/30/19

Note: Blue bars denote markets in which the pro forma company operates

(1)

Includes all MSAs with population over 500,000 with pro forma deposits greater than $350 million

(2)

Top

15

largest

markets

in

the

Southeast

sorted

by

projected

’20

–

’25

population

growth

Meaningful Presence in 10

of the 15 most populous markets in the Southeast

Pro

Forma Company

15

Largest

Markets

in

the

Southeast

Sorted

by

Pop.

Growth

(2)

1.6%

1.9%

2.4%

2.6%

4.2%

4.7%

6.1%

6.1%

6.3%

6.4%

6.7%

6.8%

7.0%

7.7%

7.9%

Birmingham, AL

Memphis, TN

New Orleans, LA

Virginia Beach, VA

Richmond, VA

Washington, D.C.

Greenville, SC

Atlanta, GA

Miami, FL

Nashville, TN

Tampa, FL

Jacksonville, FL

Charlotte, NC

Raleigh, NC

Orlando, FL

Alabama

Georgia

Florida

South

Carolina

North

Carolina

Virginia

$0.4

$0.5

$1.7

$2.2

$1.2

$1.0

$0.7

$1.3

$0.9

$1.3

$0.4

$1.6

$1.1

$1.9

$0.6

Deposits by

Market

(1)

11

5.7%

6.0%

6.4%

0.60%

0.54%

0.48%

Peer-leading Pro Forma Demographics and Deposit Base

Pro

Forma

MRQ Cost of Deposits

(2)

Pro

Forma

Source: Company documents, S&P Global Market Intelligence

Includes all banks headquartered nationwide with total assets between $25 and $50 billion

(1)

Population growth deposit weighted by county; deposit data as of 6/30/19

(2)

Pro forma cost of deposits calculated by combining SSB and CSFL interest expense on average

deposits for the three months ended 3/31/20

2020 -

2025 Projected Population Growth

(1)

12

Southeast Deposit Market Share

Source: S&P Global Market Intelligence

Deposit and branch data as of 6/30/19; pro forma for announced transactions

Note: Deposits capped at $1.0B per branch; Southeast defined as AL, AR, FL, GA, KY, LA, MS, NC, SC,

TN, VA and WV

SE

Deposits

Market

Rank

Institution

($B)

Share

Branches

1

Truist Financial Corp.

$218.2

13.1

%

2,309

2

Wells Fargo & Co.

183.9

11.1

1,614

3

Bank of America Corp.

167.9

10.1

1,084

4

Regions Financial Corp.

77.8

4.7

1,176

5

JPMorgan Chase & Co.

65.0

3.9

716

6

First Horizon National Corp.

48.3

2.9

481

7

PNC Financial Services Group Inc.

37.4

2.3

615

8

Synovus Financial Corp.

33.8

2.0

295

9

First Citizens BancShares Inc.

30.7

1.8

503

10

Fifth Third Bancorp

25.8

1.6

364

Pro Forma

24.7

1.5

306

11

Toronto-Dominion Bank

22.0

1.3

258

12

Hancock Whitney Corp.

21.9

1.3

209

13

Capital One Financial Corp.

19.2

1.2

144

14

Citigroup Inc.

16.0

1.0

60

15

Pinnacle Financial Partners Inc.

14.8

0.9

113

16

United Bankshares Inc.

14.5

0.9

192

17

Ameris Bancorp

13.7

0.8

177

18

CenterState Bank Corp.

12.8

0.8

150

19

Banco Bilbao Vizcaya Argentaria SA

12.5

0.8

133

20

Atlantic Union Bankshares Corp.

12.3

0.7

147

21

United Community Banks Inc.

12.2

0.7

157

22

BancorpSouth Bank

12.0

0.7

228

23

South State Corp.

11.9

0.7

156

24

Home BancShares Inc.

10.9

0.7

165

25

Bank OZK

10.5

0.6

219

26

Trustmark Corp.

10.5

0.6

188

27

BankUnited Inc.

10.4

0.6

74

28

Renasant Corp.

10.2

0.6

173

29

Arvest Bank Group Inc.

9.6

0.6

122

30

TowneBank

9.3

0.6

44

13

COVID-19 Impact

Source: Company documents

(1)

Data as of 5/4/20

•

Branches limited to drive-through beginning 3/20

•

12 branches without drive-through open by appointment only

beginning 3/20

Alabama

“Safer at home”

until 5/22

10 of 10

branches open

Employees

•

Over 90% of non-branch

employees working remotely

•

Increased paid leave for

employees unable to work due

to lack of child or dependent

care

•

Branches restricted to drive

through traffic

•

Additional compensation for

employees with essential in-

office jobs

Customers

•

Began offering loan payment

deferrals, fee waivers for ATMs

and CD withdrawals

•

Increased mobile deposit limits

•

PPP loan ramp up for our small

business clients

•

Secured

SBA PPP funding for

nearly 9,600 loans totaling $1.3

billion

(1)

•

Funding for PPP through liquidity

on hand, deposit growth, and

potential use of FRB PPP facility

CenterState

COVID Response

South State COVID Response

Employees

•

Expanded

insurance coverage

for testing and treatment of

COVID-19

•

Increased paid leave for team

members unable to work due to

lack of child or dependent care

•

Paid leave for team members

under quarantine due to COVID-

19 exposure

•

Additional compensation for

team members with essential

in-office jobs

Customers

•

Expanded

communication

through digital channels (online,

mobile, app) to adjust to

reduced branch interaction

•

Record usage of digital channels

with no service disruption

•

65% increase in Mobile Deposits

•

30% increase in Consumer Loan

Applications

•

40% increase in Bank to Bank

Transfers

•

Secured funding for nearly 9,500

loans totaling ~$1.1 billion

(1)

•

Funding through deposit and

excess liquidity

•

Branches limited to drive-through beginning 3/19

•

~80% of employees working from home

Georgia

Shelter in Place

expired

4/29

18 of 18

branches open

Florida

Shelter in Place

expired

4/29

120 of 121

branches open

North

Carolina

Shelter in Place

expired 5/8

24 of 24

branches open

Virginia

Shelter in Place

until 6/10

7 of 7 branches

open

South

Carolina

Shelter in Place

lifted 5/4

92 of 93

branches open

Georgia

Shelter in Place

expired 4/29

30 of 31

branches open

14

Presentation Contents

I. About CenterState Bank Corporation

II. Financial Highlights

III. Appendix

15

Update of Pro Forma Financials

Source: Company documents

Data and purchase accounting entries are as of 3/31/20 and subject to change at closing

Pro Forma Balance Sheet & Reg. Capital

SSB

CSFL

P.A.A. &

SSB+CSFL

$ millions

3/31/20

3/31/20

Reclassifications

3/31/20

Assets:

Cash and equivalents

$1,263

$1,147

$2,410

Investment securities

$2,034

$2,443

$10

$4,487

Loans HFS

$72

$188

$260

Loans

$11,507

$12,027

$140

$23,674

Less allowance for credit losses

($145)

($159)

($304)

Loans, net

$11,362

$11,868

$23,370

Other real estate owned

$13

$10

($1)

$22

Goodwill

$1,003

$1,204

($850)

$1,357

Other intangible assets

$47

$87

$104

$238

Other Assets

$849

$1,649

($58)

$2,440

Total Assets

$16,643

$18,596

($655)

$34,584

Liabilities & Equity:

Deposits

$12,345

$14,121

$25

$26,491

Borrowings

$1,526

$538

$2,064

Subordinated debt

--

$49

$49

Trust Preferred

$116

$33

$149

Other Liabilities

$335

$985

$68

$1,388

Total Liabilities

$14,322

$15,726

$93

$30,141

Common Equity

$2,321

$2,870

($748)

$4,443

Total Equity

$2,321

$2,870

($748)

$4,443

Total Liabilities & Equity

$16,643

$18,596

($655)

$34,584

Balance Sheet Ratios

Tang. Common Equity / Tg. Assets

8.2%

9.1%

8.6%

C&D / Total RBC

75%

57%

66%

CRE / Total RBC

236%

276%

260%

Hold Co. Regulatory Capital

Leverage Ratio

9.6%

9.7%

9.1%

CET1 Ratio

11.1%

10.6%

10.9%

Tier 1 Capital Ratio

12.0%

10.6%

10.9%

Total Capital Ratio

12.7%

11.7%

12.2%

16

1Q 2020 Highlights –

Linked Quarter

Source: Company documents

Data for the three months ended each respective quarter

The

increase

in

nonperforming

assets

between

Q4

2019

and

Q1

2020

is

due

to

the

inclusion

of

PCD

non-accrual

loans

as

required

by

CECL

Nonperforming assets include nonaccrual loans, loans past due 90 days or more and still accruing, OREO / ORA and performing restructured loans

Loans exclude held for sale

Please see appendix for reconciliation of non-GAAP financial metrics

SSB

CSFL

Q4 2019

Q1 2020

QoQ Change

Q4 2019

Q1 2020

QoQ Change

Balance Sheet

Assets

$15,921

$16,643

4.5%

$17,142

$18,596

8.5%

Loans (excl. HFS)

11,435

11,579

1.3%

11,984

12,027

0.4%

Deposits

12,177

12,344

1.4%

13,136

14,121

7.5%

Loan / Deposit Ratio

93.4%

93.2%

(20)

bps

91.2%

85.2%

(606)

bps

Income Statement

Net Interest Income

$126.5

$128.0

1.2%

$157.9

$153.4

(2.8%)

Provision Expense

3.6

36.5

927.1%

3.0

44.9

1,396.7%

Noninterest Income

36.3

44.1

21.6%

50.3

55.8

10.9%

Noninterest Expense

99.1

103.1

4.0%

113.4

122.8

8.3%

Net Income

49.1

24.1

(50.9%)

71.1

35.4

(50.2%)

EPS - Diluted

$1.45

$0.71

(51.0%)

$0.56

$0.28

(50.0%)

Profitability

Adjusted ROAA

1.26%

0.69%

(57)

bps

1.66%

0.82%

(84)

bps

Adjusted ROATE

16.2%

9.5%

(672)

19.1%

9.9%

(920)

Net Interest Margin (FTE)

3.64%

3.68%

4

4.25%

4.17%

(8)

Adjusted Efficiency Ratio

60.7%

59.7%

(101)

52.1%

54.9%

280

Adjusted PTPP ROAA

1.59%

1.73%

14

2.18%

2.09%

(9)

Asset Quality

NPAs / Loans + OREO + ORA

0.41%

0.61%

20

bps

0.44%

0.81%

37

bps

ACL / Loans

0.54%

1.26%

72

0.34%

1.32%

98

NCOs / Average Loans

0.05%

0.05%

--

0.15%

0.05%

(10)

Capital

TCE / TA

8.88%

8.15%

(73)

bps

10.08%

9.10%

(98)

bps

Leverage Ratio

9.73%

9.56%

(17)

9.74%

9.65%

(9)

CET1 Ratio

11.30%

11.09%

(21)

11.34%

10.63%

(71)

Tier 1 Ratio

12.25%

12.03%

(22)

11.34%

10.63%

(71)

Total Capital Ratio

12.78%

12.72%

(6)

12.19%

11.65%

(54)

17

1.3%

1.0%

1.0%

1.0%

1.3%

3.2%

2.9%

2.9%

2.8%

2.8%

2016

2017

2018

2019

Q1 2020

NII / Avg. Assets

NIE / Avg. Assets

10.7%

10.1%

17.7%

16.2%

9.9%

15.2%

14.6%

20.5%

18.4%

9.9%

2016

2017

2018

2019

Q1 2020

ROATE

Adjusted ROATE

71%

61%

60%

59%

59%

58%

55%

51%

52%

55%

2016

2017

2018

2019

Q1 2020

Efficiency Ratio

Adjusted Efficiency Ratio

0.87%

0.88%

1.43%

1.42%

0.82%

1.25%

1.30%

1.67%

1.61%

0.82%

2016

2017

2018

2019

Q1 2020

ROAA

Adjusted ROAA

CenterState

Profitability

Source: Company documents

Data for the twelve months ended 12/31 for each respective year, Q1 2020 data for the three months

ended 3/31/20 (annualized for the quarter ended ROAA, ROATE and NII and NIE / Avg. Assets data)

Note: Please see appendix for reconciliation of non-GAAP financial metrics

(1)

Excluding non-recurring items

Return on Average Tangible Equity (%)

Efficiency Ratio (%)

Return on Average Assets (%)

Adjusted PTPP ROAA

NII and NIE / Avg. Assets (%)

(1)

1.66%

2.01%

2.20%

2.15%

2.09%

18

1.5%

1.3%

1.0%

0.9%

1.1%

3.4%

3.3%

2.9%

2.6%

2.7%

2016

2017

2018

2019

Q1 2020

NII / Avg. Assets

NIE / Avg. Assets

14.7%

9.6%

14.9%

15.1%

8.4%

15.9%

15.5%

16.8%

15.8%

9.5%

2016

2017

2018

2019

Q1 2020

ROATE

Adjusted ROATE

63%

67%

64%

63%

62%

63%

58%

59%

60%

60%

2016

2017

2018

2019

Q1 2020

Efficiency Ratio

Adjusted Efficiency Ratio

1.16%

0.77%

1.23%

1.21%

0.60%

1.26%

1.28%

1.39%

1.27%

0.69%

2016

2017

2018

2019

Q1 2020

ROAA

Adjusted ROAA

South State Profitability

Return on Average Assets (%)

Return on Average Tangible Equity (%)

Efficiency Ratio (%)

NII and NIE / Avg. Assets

(%)

(1)

Adjusted PTPP ROAA

Source: Company documents

Data for the twelve months ended 12/31 for each respective year, Q1 2020 data for the three months

ended 3/31/20 (annualized for the quarter ended ROAA, ROATE and NII and NIE / Avg. Assets data)

Note: Please see appendix for reconciliation of non-GAAP financial metrics

(1)

Excluding non-recurring items

1.73%

1.59%

1.85%

1.98%

1.94%

19

Net Interest Margin

Source: Company documents

Annual data as of or for the twelve months ended each respective year, quarterly data as of or for

the three months ended 3/31/20 (annualized for quarter ended data)

*Tax equivalent

Please see appendix for reconciliation of non-GAAP financial metrics

CenterState Net Interest Margin (%)

South State Net Interest Margin (%)

20

Diversified Revenue Streams

Source: Company documents

Data for the three months ended 3/31/20

(1)

Pro Forma for merger of equals with South State Corporation

Q1 2020 Total: $55.8 million

•

Total noninterest income grew 10.9% quarter over quarter

•

Mortgage banking income grew 20.4% from Q4 2019

•

Record quarter with $27.8 million of correspondent banking

income; a $4.5 million or 19.1% increase from Q4 2019

primarily driven by interest rate swaps and fixed income

revenue

CenterState

Noninterest Income

Pro Forma Noninterest Income

(1)

Pro Forma Q1 2020 Total: $99.9 million

21

Deposit Portfolio

Source: Company documents

Data as of 12/31 for each respective year, Q1 2020 data as of or for the three months ended 3/31/20

Note: Core deposits defined as total deposits less time deposits greater than $250,000

(1)

Pro Forma for merger of equals with South State Corporation

(2)

Pro forma cost of deposits calculated by combining SSB and CSFL interest expense on average deposits for

the three months ended 3/31/20

CSFL Standalone Deposit Composition (%)

Cost of Deposits:

0.60%

Total: $14.1B

Pro Forma Deposit Composition

(1)

(%)

Total: $26.5B

Core Deposits Over Time ($B)

$3.8

$5.4

$9.1

$12.5

$13.5

$25.6

$7.0

$11.3

$11.3

$11.9

$12.1

2016

2017

2018

2019

Q1 2020

Q1 2020

Pro Forma

CSFL

SSB

CSFL Standalone CAGR: 47.4%

•

~1.1 million Total Deposit Accounts

•

~772 thousand Checking Accounts

(1)

SSB Standalone CAGR: 18.1%

Standalone Core

Deposits:

95.8%

Pro Forma Core

Deposits:

96.7%

Pro Forma Cost

of Deposits

(2)

:

0.54%

22

57%

66%

276%

260%

Q1 2020

CSFL Standalone

Q1 2020

Pro Forma

C&D / TRBC

CRE / TRBC

Loan Portfolio

CSFL Standalone Loan Composition (%)

Pro Forma Loan Composition

(%)

Total: $12.0B

Yield on Loans &

Leases*: 5.36%

Source: Company documents, S&P Global Market Intelligence

Data as of or for the three months ended 3/31/20

Note: Excludes purchase accounting adjustments; Total loans excludes HFS

*Tax equivalent

(1)

Pro Forma for merger of equals with South State Corporation and includes preliminary purchase

accounting entries as of 3/31/20, which are subject to change at closing

(2)

Loan totals exclude loans held for sale

Loan Concentration (%)

Total: $23.7B

(1)

•

Less than 1% total exposure

to SNC’s, Leverage Lending,

Oil & Gas, and Aviation

•

99% of loan portfolio is in

footprint

•

Granular loan portfolio with

average loan size of $230

thousand

CSFL & SSB Loan Portfolio Highlights

•

Minimal exposure to Oil &

Gas, Aviation, Steel or Mining

•

Leverage Lending & SNC’s

exposure < $100 million

•

Over 98% of loan portfolio is

in footprint

•

Granular loan portfolio with

average loan size of $134

thousand

(2)

(2)

(1)

(2)

23

Industry Exposure

Source: Company documents

Data as of 3/31/20

Dollars in millions, unless otherwise noted

(1)

Excludes loans held for sale

Selected Industries

(% of total loan portfolio)

Lodging

$389

3.3%

Restaurants

307

2.6%

Retail CRE

1,632

13.8%

CenterState

Industry Exposure

(1)

South State Industry

Exposure

(1)

Selected Industries

(% of total loan portfolio)

Total Portfolio

$12.0B

Lodging

$590

5.1%

Restaurants

225

2.0%

Retail CRE

558

4.8%

Total Portfolio

$11.5B

24

Loan Deferral Requests

•

Proactively offered to customers

•

$2.2 billion in customer deferrals in process

•

Standard deferral is 90 days principal and interest

Source: Company documents

Data as of 4/30/20

Dollars in millions, unless otherwise noted

CenterState

Loan Deferrals

South State Loan Deferrals

•

Proactive communication with customers

•

$2.4 billion in customer deferrals in process

•

Commercial standard deferral is 90 days principal

and interest or 120 days principal

•

Consumer and Mortgage standard deferral is 120

days principal and interest

25

Lodging Portfolio

•

Lodging is $389 million

or 3.3% of loan portfolio

•

54% weighted average loan to value

•

Underwriting

policy is 65% loan to value; 1.5x DSC based on a

20-year amortization

•

Average loan amount of $1.7 million

•

72% of portfolio under deferral

(1)

•

Top 3 MSAs: Tampa, Jacksonville, Atlanta

Source: Company documents

Data as of 3/31/20, deferral data as of 4/30/20

Dollars in millions, unless otherwise noted

(1)

Includes approved/processed and considered deferrals

CenterState

Lodging Portfolio

South State Lodging Portfolio

•

Lodging is $590 million or 5.1% of loan portfolio

•

57% weighted average loan to value

•

Underwriting

policy is 80% loan to value; 1.4x DSC based

on a 20-year amortization

•

Average loan amount of $8.2 million

•

100% of portfolio under deferral

26

Restaurant Portfolio

•

Restaurant is $307 million or 2.6% of loan portfolio

•

55% weighted average loan to value

•

Underwriting policy is 75% loan to value; 1.4x DSC based on a

20-year amortization

•

Average loan amount $453

thousand

•

38% of portfolio

under deferral

(1)

Source: Company documents

Data as of 3/31/20, deferral data as of 4/30/20

Dollars in millions, unless otherwise noted

(1)

Includes approved/processed and considered deferrals

CenterState

Restaurant Portfolio

South State Restaurant Portfolio

•

Restaurant is $225 million or 2.0% of loan portfolio

•

66% weighted average loan to value

•

Average loan balance of real estate secured loans is $692 thousand

•

64% of portfolio under deferral

27

Retail CRE Portfolio

•

Retail CRE is $1.63 billion or 13.8% of loan portfolio

•

58% weighted average loan to value

•

Underwriting policy is 75% loan to value; 1.3x DSC based on a

20-year amortization

•

Average loan amount of $1.0

million

•

28% of portfolio

under deferral

(1)

Source: Company documents

Data as of 3/31/20, deferral data as of 4/30/20

Dollars in millions, unless otherwise noted

(1)

Includes approved/processed and considered deferrals

CenterState

Retail CRE

Portfolio

South State Retail CRE Portfolio

•

Retail CRE is $558 million or 4.8% of loan portfolio

•

59% weighted average loan to value

•

Underwriting policy is 80% loan to value; 1.35x DSC based on

a 20-year amortization

•

Average loan amount of $888 thousand

•

41% of portfolio under deferral

28

Credit Quality & Credit Risk Management

CSFL Net Charge Offs & Provision Expense

Source: Company documents

Data as of or for the twelve months ended 12/31 for each respective year; Q1 2020 data as of or for the three months ended 3/31/20

Dollars in millions

Note: The increase in nonperforming assets between Q4 2019 and Q1 2020 is due to the inclusion of PCD nonaccrual loans as required by CECL

Note: Nonperforming assets include nonaccrual loans, loans past due 90 days or more and still accruing, OREO / ORA and performing

restructured loans

CSFL

Nonperforming

Assets

/

Loans

+

OREO

+

ORA

SSB Nonperforming Assets / Loans + OREO + ORA

SSB Net Charge Offs & Provision Expense

NCOs

$mm

$0.2

($0.8)

$1.4

$9.7

$1.4

$3.3

$3.3

$4.9

$5.9

$1.3

29

Q4 2019

1/1/2020

Q1 2020

Loans

CRE and Other Inc. Producing Prop.

20,800

40,688

57,437

CRE-Owner Occup. and C&I

18,189

35,583

40,345

Consumer Mortgage

5,076

9,931

16,033

Home equity

4,310

8,432

12,050

Land

3,055

5,977

7,254

Mobile Home

2,176

4,257

4,458

Consumer Non Mobile Home

1,142

2,235

2,732

BEX and Micro

1,148

2,245

2,665

Overdrafts

561

1,098

855

Ready Reserves

231

451

513

Other

239

468

443

ACL-loan and lease losses

(1)

56,927

111,365

144,785

ACL-unfunded commitments

(1)

335

6,756

8,555

South State ACL / Total Loans (%)

Current Expected Credit Losses (CECL)

Source: Company documents

Data as of the three months ended each respective quarter

Dollars in millions unless otherwise noted

(1)

Beginning 1/1/20, calculation is based on current expected credit loss methodology

CenterState ACL / Total Loans (%)

CenterState ACL by Loan Type ($000s)

South State ACL by Loan Type ($000s)

Q4 2019

1/1/2020

Q1 2020

Loans

Commercial Real Estate

$18,552

$66,114

$103,629

Commercial, industr. & factored receiv.

11,282

16,201

13,649

Residential

4,257

18,690

23,083

Land, development & construction

2,496

9,507

14,439

Consumer & other

4,068

4,751

3,933

ACL-loan and lease losses

(1)

$40,655

$115,263

$158,733

ACL-unfunded commitments

(1)

--

$6,084

$7,110

30

Capital

Source: Company documents

Data as of 12/31 for each respective year, Q1 2020 data as of 3/31/20

(1)

Pro Forma for merger of equals with South State Corporation

CET1 Ratio (%)

Total Capital Ratio (%)

Tier 1 Ratio (%)

Leverage Ratio (%)

31

Holding Company Cash - CSFL

$33.6

CSFL Dividend Capacity from the Bank - Q1 2020*

184.0

Holding Company Cash - SSB

48.7

SSB Dividend Capacity from the Bank - Q1 2020*

10.0

SSB Unsecured Line of Credit**

25.0

Other

3.3

Pro Forma Sources of Liquidity

$304.6

Strong Pro Forma Liquidity Position

Source: Company documents

Dollars in millions

Data as of 3/31/20

*Includes data from 2018, 2019 and the three month ended 3/31/20

**$25.0 million unsecured line of credit with U.S. Bank, National Association ($0 drawn at 3/31/20)

CSFL Securities Portfolio

Pro Forma

Securities Portfolio

Holding Company Sources of Liquidity

•

In addition to the $26.5 billion of deposits

on a combined basis, CSFL and SSB have

access to the following additional sources of

funding at the bank:

o

FHLB borrowings

o

Fed funds

o

Brokered Funding

o

Fed discount window

Bank Level

Sources of Liquidity

32

Presentation Contents

I. About CenterState Bank Corporation

II. Financial Highlights

III. Appendix

33

CenterState Consolidated Financial Highlights

Source: Company documents

Note: The increase in nonperforming assets between Q4 2019 and Q1 2020 is due to the inclusion of

PCD nonaccrual loans as required by CECL

Note: Nonperforming assets include nonaccrual loans, loans past due 90 days or more and still

accruing, OREO / ORA and performing restructured loans

Year Ended December 31,

Quarter Ended,

($mm except per share data)

2016

2017

2018

2019

3/31/20

Summary Balance Sheet:

Total Assets

$5,079

$7,124

$12,338

$17,142

$18,596

Loans (excl. HFS)

3,430

4,773

8,341

11,984

12,027

Deposits

4,153

5,561

9,477

13,136

14,121

Loans / Deposits

82.6%

85.8%

88.0%

91.2%

85.2%

Performance Metrics:

Net Income

$42.3

$55.8

$156.4

$225.4

$35.4

Diluted EPS

0.88

0.95

1.76

1.87

0.28

Adjusted ROAA

1.25%

1.30%

1.67%

1.61%

0.82%

Adjusted ROATE

15.2%

14.6%

20.5%

18.4%

9.9%

Net Interest Margin (FTE)

4.20%

4.28%

4.39%

4.31%

4.17%

Adjusted Efficiency Ratio

57.7%

55.5%

51.4%

51.9%

54.9%

Non-interest Income / Total Revenue

26.4%

21.7%

20.3%

22.1%

26.7%

Dividends Per Share

$0.16

$0.24

$0.40

$0.44

$0.14

Asset Quality:

NPAs / Loans + OREO + ORA

1.15%

0.73%

0.43%

0.44%

0.81%

Reserves / Total Loans

0.79%

0.69%

0.48%

0.34%

1.32%

NPLs / Total Loans

0.59%

0.38%

0.29%

0.33%

0.66%

NCOs / Avg. Loans

0.01%

(0.02%)

0.02%

0.09%

0.05%

Capital Ratios:

TCE / TA

8.7%

9.1%

9.6%

10.1%

9.1%

Leverage Ratio

9.1%

9.8%

10.0%

9.7%

9.7%

CET1 Ratio

11.3%

11.5%

11.9%

11.3%

10.6%

Tier 1 Capital Ratio

11.8%

12.0%

12.3%

11.3%

10.6%

Total Capital Ratio

12.5%

12.6%

12.7%

12.2%

11.7%

34

South State Consolidated Financial Highlights

Year Ended December 31,

Quarter Ended,

Pro Forma

($mm except per share data)

2016

2017

2018

2019

3/31/20

3/31/20

Summary Balance Sheet:

Total Assets

$8,901

$14,467

$14,676

$15,921

$16,643

$34,584

Loans (excl. HFS)

6,684

10,623

11,018

11,375

11,507

23,674

Deposits

7,334

11,533

11,647

12,177

12,345

26,491

Loans  / Deposits

91.1%

92.1%

94.6%

93.4%

93.2%

89.4%

Performance Metrics:

Net Income

$101.3

$87.6

$178.9

$186.5

$24.1

--

Diluted EPS

4.18

2.93

4.86

5.36

0.71

--

Adjusted ROAA

1.26%

1.28%

1.39%

1.27%

0.69%

--

Adjusted ROATE

15.9%

15.5%

16.8%

15.8%

9.5%

--

Net Interest Margin (FTE)

4.22%

4.15%

4.09%

3.77%

3.68%

--

Adjusted Efficiency Ratio

62.9%

58.5%

59.1%

60.3%

59.7%

--

Non-interest Income / Total Revenue

27.2%

25.4%

22.2%

21.8%

25.6%

--

Dividends Per Share

$1.21

$1.32

$1.38

$1.67

$0.47

--

Asset Quality:

NPAs / Loans + OREO + ORA

0.58%

0.34%

0.37%

0.41%

0.61%

--

Reserves / Total Loans

0.60%

0.45%

0.51%

0.54%

1.26%

--

NPLs / Total Loans

0.29%

0.23%

0.26%

0.30%

0.49%

--

NCOs / Avg. Loans

0.06%

0.04%

0.05%

0.05%

0.05%

--

Capital Ratios:

TCE / TA

8.9%

9.2%

9.6%

8.9%

8.2%

8.6%

Leverage Ratio

9.9%

10.4%

10.7%

9.7%

9.6%

9.1%

CET1 Ratio

11.7%

11.6%

12.1%

11.3%

11.1%

10.9%

Tier 1 Capital Ratio

12.4%

12.6%

13.1%

12.3%

12.0%

10.9%

Total Capital Ratio

13.0%

13.0%

13.6%

12.8%

12.7%

12.2%

Source: Company documents

Note: The increase in nonperforming assets between Q4 2019 and Q1 2020 is due to the inclusion of

PCD nonaccrual loans as required by CECL

Note: Nonperforming assets include nonaccrual loans, loans past due 90 days or more and still

accruing, OREO / ORA and performing restructured loans

35

Kroll Ratings

Source: Kroll Bond Rating Agency

Entity

Type

Rating

Outlook

CenterState Bank Corporation

Senior Unsecured Debt

BBB+

Stable

Subordinated Debt

BBB

Stable

Short-Term Debt

K2

N/A

CenterState Bank

Deposit

A-

Stable

Senior Unsecured Debt

A-

Stable

Subordinated Debt

BBB+

Stable

Short-Term Deposit

K2

N/A

Short-Term Debt

K2

N/A

36

Historical Interest Coverage

Source: Company documents

Data as of 12/31 for each respective year; Q1 2020 data as of 3/31/20 

Dollars in thousands, unless otherwise noted

Note: Assumes all net proceeds from subordinated debt offering are downstreamed to the bank for

illustrative purposes

Please see appendix for reconciliation of non-GAAP financial metrics

For the Twelve Months Ended

Three Months Ended

PF for

PF for

$150mm

$150mm

Sub Debt

Sub Debt

Raise

Raise

12/31/16

12/31/17

12/31/18

12/31/19

12/31/19

3/31/20

3/31/20

Bank-Level Equity

$548,653

$903,882

$1,999,963

$2,967,040

$3,114,665

$2,961,145

$3,108,770

Consolidated Equity

552,457

904,750

1,971,344

2,896,718

2,896,718

2,870,252

2,870,252

Double Leverage Ratio

99%

100%

101%

102%

108%

103%

108%

Interest Coverage

Total Deposit Interest

$6,934

$11,079

$33,260

$83,099

$83,099

$19,836

$19,836

Total Debt Interest

2,406

4,704

14,290

16,505

24,755

3,570

5,633

Total Interest Expense

$9,340

$15,783

$47,550

$99,604

$107,854

$23,406

$25,469

Pre-tax Adjusted Income

92,934

121,104

231,782

332,326

324,076

44,508

42,446

Interest Coverage (Excluding Deposit Interest Expense)

42.5x

29.1x

19.5x

26.2x

17.4x

19.0x

12.1x

Interest Coverage (Including Deposit Interest Expense)

11.0x

8.7x

5.9x

4.3x

4.0x

2.9x

2.7x

37

CenterState

Non-GAAP Reconciliation

Source: Company documents

(1)

Tax benefit adjustment on net operating loss carryback available under the CARES Act

(2)

Annualized for quarter ended data

Year ended December 31,

Quarter Ended,

($ in thousands, except per share data)

2016

2017

2018

2019

Q4 2019

Q1 2020

Adjusted net income (non-GAAP)

Net Income (GAAP)

$42,341

$55,795

$156,435

$225,396

$71,132

$35,432

(Gain) loss on sale of AFS securities, net of tax

(9)

5

17

(19)

(10)

--

Gain on sale of deposits, net of tax

--

--

(465)

--

--

--

Gain on early extinguishment of debt, net of tax

(202)

--

--

--

--

--

Gain on sale of trust department, net of tax

--

(820)

--

--

--

--

Termination of FDIC loss share agreements, net of tax

11,514

--

--

--

--

--

Merger-related expenses, net of tax

7,325

8,879

26,584

29,856

122

2,332

Deferred tax asset write down

--

18,575

--

987

987

--

Tax benefit adjustments

(1)

--

--

--

--

--

(2,273)

Adjusted net income (non-GAAP)

$60,969

$82,434

$182,571

$256,220

$72,231

$35,491

Adjusted return on average assets (non-GAAP)

(2)

Return on average assets (GAAP)

0.87%

0.88%

1.43%

1.42%

1.63%

0.82%

Effect to adjust for merger-related expenses, net of tax

0.14%

0.14%

0.24%

0.18%

--

0.05%

Effect to adjust for gain on sale of trust department, net of tax

--

(0.01%)

--

--

--

--

Effect to adjust for termination of FDIC loss share agreements, net of tax

0.24%

--

--

--

--

--

Effect to adjust for deferred tax asset write down

--

0.29%

--

0.01%

0.03%

--

Effect to adjust for tax benefit adjustments

(1)

--

--

--

--

--

(0.05%)

Adjusted return on average assets (non-GAAP)

1.25%

1.30%

1.67%

1.61%

1.66%

0.82%

Return on average tangible equity (non-GAAP)

(2)

Net Income (GAAP)

$42,341

$55,795

$156,435

$225,396

$71,132

$35,432

Amortization of intangibles, net of tax

2,026

2,767

7,937

12,221

3,491

3,466

Adjusted net income for average tangible equity (non-GAAP)

$44,367

$58,562

$164,372

$237,617

$74,623

$38,898

Average stockholders' equity (GAAP)

$531,734

$819,626

$1,662,815

$2,667,709

$2,879,606

$2,882,644

Average noncontrolling interest

--

--

--

(5,909)

--

--

Average goodwill

(100,855)

(213,892)

(673,115)

(1,105,068)

(1,204,417)

(1,204,417)

Average core deposit intangible

(16,060)

(22,508)

(58,463)

(89,929)

(93,355)

(89,175)

Average other intangibles

(773)

(925)

(1,504)

(4,222)

(4,644)

(4,275)

Average tangible equity (non-GAAP)

$414,046

$582,301

$929,733

$1,462,581

$1,577,190

$1,584,777

Return on average tangible equity (non-GAAP)

10.72%

10.06%

17.68%

16.25%

18.77%

9.87%

38

CenterState

Non-GAAP Reconciliation (cont.)

Source: Company documents

(1)

Annualized for quarter ended data

(2)

Tax benefit adjustment on net operating loss carryback available under the CARES Act

Year ended December 31,

Quarter Ended,

($ in thousands, except per share data)

2016

2017

2018

2019

Q4 2019

Q1 2020

Return on average tangible equity (non-GAAP)

10.72%

10.06%

17.68%

16.25%

18.77%

9.87%

Effect to adjust for gain on sale of deposits, net of tax

--

--

(0.05%)

--

--

--

Effect to adjust for merger-related expenses, net of tax

1.77%

1.52%

2.86%

2.04%

0.03%

0.59%

Effect to adjust for gain on sale of trust department, net of tax

--

(0.14%)

--

--

--

--

Effect to adjust for termination of FDIC loss share agreements, net of tax

2.78%

--

--

--

--

--

Effect to adjust for early extinguishment of debt, net of tax

(0.05%)

--

--

--

--

--

Effect to adjust for deferred tax asset write down

--

3.19%

--

0.07%

0.25%

--

Effect

to

adjust

for

tax

benefit

adjustments

(2)

--

--

--

--

--

(0.58%)

Adjusted return on average tangible equity (non-GAAP)

15.22%

14.63%

20.49%

18.36%

19.05%

9.88%

Noninterest income (GAAP)

$64,369

$65,175

$105,127

$166,060

$50,329

$55,790

Gain on early extinguishment of debt

(308)

--

--

--

--

--

Gain on sale of deposits

--

--

(611)

--

--

--

Gain on sale of trust department

--

(1,224)

--

--

--

--

Adjusted non-interest income (non-GAAP)

$64,061

$63,951

$104,516

$166,060

$50,329

$55,790

Net interest income before provision (GAAP)

$179,325

$235,543

$413,082

$585,728

$157,925

$153,353

Total tax equivalent adjustment

3,459

5,716

2,521

2,063

564

685

Adjusted net interest income (non-GAAP)

$182,784

$241,259

$415,603

$587,791

$158,489

$154,038

Noninterest expense (GAAP)

$174,481

$186,485

$312,467

$446,907

$113,409

$122,772

Amortization of intangibles

(3,074)

(4,066)

(10,018)

(16,030)

(4,552)

(4,535)

Termination of FDIC loss share agreements

(17,560)

--

--

--

--

--

Merger and acquisition related expenses

(11,444)

(13,046)

(34,912)

(39,257)

(159)

(3,051)

Adjusted noninterest expense (non-GAAP)

$142,403

$169,373

$267,537

$391,620

$108,698

$115,186

Efficiency ratio (tax equivalent) (non-GAAP)

70.6%

60.9%

60.0%

59.3%

54.3%

58.5%

Adjusted efficiency ratio, tax equivalent (non-GAAP)

57.7%

55.5%

51.4%

51.9%

52.1%

54.9%

Efficiency ratio (tax equivalent) (non-GAAP)

(1)

Adjusted return on average tangible equity (non-GAAP)

39

Year ended December 31,

Quarter Ended,

($ in thousands, except per share data)

2016

2017

2018

2019

Q4 2019

Q1 2020

Tangible common equity (non-GAAP)

Total common stockholders' equity (GAAP)

$552,457

$904,750

$1,971,344

$2,896,718

$2,896,718

$2,870,252

Goodwill

(106,028)

(257,683)

(802,880)

(1,204,417)

(1,204,417)

(1,204,417)

Core deposit intangible

(15,510)

(24,063)

(66,225)

(91,157)

(91,157)

(87,295)

Other intangibles

(784)

(551)

(2,953)

(4,507)

(4,507)

(4,131)

Common tangible equity (non-GAAP)

$430,135

$622,453

$1,099,286

$1,596,637

$1,596,637

$1,574,409

Total assets (GAAP)

$5,078,559

$7,123,975

$12,337,588

$17,142,025

$17,142,025

$18,596,292

Goodwill

(106,028)

(257,683)

(802,880)

(1,204,417)

(1,204,417)

(1,204,417)

Core deposit intangible

(15,510)

(24,063)

(66,225)

(91,157)

(91,157)

(87,295)

Other intangibles

(784)

(551)

(2,953)

(4,507)

(4,507)

(4,131)

Total tangible assets (non-GAAP)

$4,956,237

$6,841,678

$11,465,530

$15,841,944

$15,841,944

$17,300,449

Common tangible equity to tangible assets (non-GAAP)

8.7%

9.1%

9.6%

10.1%

10.1%

9.1%

Net interest margin - FTE (non-GAAP)

(1)

Net interest margin (GAAP)

4.12%

4.18%

4.36%

4.29%

4.24%

4.15%

Effect for tax equivalent adjustments

0.08%

0.10%

0.03%

0.02%

0.01%

0.02%

Net interest margin - tax equivalent (non-GAAP)

4.20%

4.28%

4.39%

4.31%

4.25%

4.17%

Adjusted pre-tax pre-provision income (non-GAAP)

(1)

Net income (GAAP)

$42,341

$55,795

$156,435

$225,396

$71,132

$35,432

Income tax provision

21,910

53,480

41,024

67,698

20,665

6,025

Provision for credit losses

4,962

4,958

8,283

10,585

3,048

44,914

Credit loss for unfunded commitments

--

--

--

--

--

1,027

Gross loss (gain) on sale of securities available for sale

(13)

7

22

(25)

13

--

Gross merger-related expenses

11,444

13,046

34,912

39,257

159

3,051

Adjusted pre-tax pre-provision income (non-GAAP)

$80,644

$127,286

$240,676

$342,911

$95,017

$90,449

Adjusted pre-tax pre-provision return on average assets (non-GAAP)

1.66%

2.01%

2.20%

2.15%

2.18%

2.09%

CenterState

Non-GAAP Reconciliation (cont.)

Source: Company documents

(1)

Annualized for quarter ended data

40

Year ended December 31,

Quarter Ended,

($ in thousands, except per share data)

2016

2017

2018

2019

Q4 2019

Q1 2020

Pre-tax adjusted income (non-GAAP)

Net income (GAAP)

$42,341

$55,795

$156,435

$225,396

$71,132

$35,432

Income tax provision

21,910

53,480

41,024

67,698

20,665

6,025

Gross loss (gain) on sale of securities available for sale

(13)

7

22

(25)

13

--

Gross gain on sale of deposits

--

--

(611)

--

--

--

Gross gain on early extinguishment of debt

(308)

--

--

--

--

--

Gross gain on sale of trust department

--

(1,224)

--

--

--

--

Termination of FDIC loss share agreement

17,560

--

--

--

--

--

Gross merger-related expenses

11,444

13,046

34,912

39,257

159

3,051

Pre-tax adjusted income (non-GAAP)

$92,934

$121,104

$231,782

$332,326

$91,969

$44,508

CenterState

Non-GAAP Reconciliation (cont.)

Source: Company documents

41

South State Non-GAAP Reconciliation

Source: Company documents

(1)

Annualized for quarter ended data

Year ended December 31,

Quarter Ended,

($ in thousands, except per share data)

2016

2017

2018

2019

Q4 2019

Q1 2020

Adjusted earnings (non-GAAP)

Net income (GAAP)

$101,282

$87,554

$178,871

$186,483

$49,091

$24,110

Securities (gains) losses, net of tax

(81)

(946)

520

(2,173)

(20)

--

Other than temporary impairment (OTTI), net of tax

--

501

--

--

--

--

Early termination of FDIC LSA, net of tax

2,938

--

--

--

--

--

Provision for income taxes -

deferred tax asset revaluation

--

26,558

(990)

--

--

--

Merger and conversion related expense, net of tax

5,960

31,469

23,692

3,701

1,252

3,510

Pension plan termination expense, net of tax

--

--

--

7,641

--

--

FHLB prepayment fee, net of tax

--

--

--

107

--

--

Net adjusted earnings available to common shareholders (non-GAAP)

$110,099

$145,136

$202,093

$195,759

$50,323

$27,620

Adjusted return on average assets (non-GAAP)

(1)

Return on average assets (GAAP)

1.16%

0.77%

1.23%

1.21%

1.23%

0.60%

Effect to adjust for securities losses (gains), net of tax

(0.00%)

(0.01%)

0.00%

(0.01%)

--

--

Effect to adjust for other-than-temporary impairment (OTTI), net of tax

--

0.01%

--

--

--

--

Effect to adjust for FDIC LSA early termination

0.03%

--

--

--

--

--

Effect to adjust for provision for income taxes -

deferred tax asset revaluation

--

0.23%

(0.01%)

--

--

--

Effect to adjust for merger and conversion related expense, net of tax

0.07%

0.28%

0.17%

0.02%

0.03%

0.09%

Effect to adjust for pension plan termination expense, net of tax

--

--

--

0.05%

--

--

Effect to adjust for FHLB prepayment fee, net of tax

--

--

--

0.00%

--

--

Adjusted return on average assets (non-GAAP)

1.26%

1.28%

1.39%

1.27%

1.26%

0.69%

Return on average tangible equity (non-GAAP)

(1)

Return on average common equity (GAAP)

9.17%

5.26%

7.63%

7.89%

8.26%

4.15%

Effect to adjust for intangible assets

5.55%

4.37%

7.30%

7.22%

7.53%

4.20%

Return on average tangible equity (non-GAAP)

14.72%

9.63%

14.93%

15.11%

15.79%

8.35%

Adjusted return on average tangible equity (non-GAAP)

(1)

Return on average common equity (GAAP)

9.17%

5.26%

7.63%

7.89%

8.26%

4.15%

Effect to adjust for securities (gains) losses, net of tax

(0.01%)

(0.06%)

0.02%

(0.09%)

--

--

Effect to adjust for other-than-temporary impairment (OTTI), net of tax

--

0.03%

--

--

--

--

Effect to adjust for FDIC LSA early termination

0.27%

--

--

--

--

--

Effect to adjust for provision for income taxes -

deferred tax asset revaluation

--

2.13%

(0.06%)

--

--

--

Effect to adjust for merger and conversion related expense, net of tax

0.54%

1.89%

1.01%

0.16%

0.21%

0.60%

Effect to adjust for pension plan termination expense, net of tax

--

--

--

0.32%

--

--

Effect to adjust for intangible assets

5.97%

6.24%

8.16%

7.54%

7.70%

4.70%

Adjusted return on average tangible equity (non-GAAP)

15.94%

15.49%

16.76%

15.82%

16.17%

9.45%

42

Year ended December 31,

Quarter Ended,

($ in thousands, except per share data)

2016

2017

2018

2019

Q4 2019

Q1 2020

Adjusted efficiency ratio (non-GAAP)

Efficiency ratio (non-GAAP)

63.4%

66.5%

63.6%

62.5%

61.6%

62.1%

Effect to adjust for FDIC LSA early termination

(0.6%)

--

--

--

--

--

Effect to adjust for FHLB prepayment fee

--

--

--

(0.0%)

--

--

Effect to adjust for pension plan termination expense, net of tax

--

--

--

(1.5%)

--

--

Effect to adjust for merger and branch consolidation related expenses

(0.7%)

(8.0%)

(4.5%)

(0.7%)

(0.9%)

(2.4%)

Adjusted efficiency ratio (non-GAAP)

62.1%

58.5%

59.1%

60.3%

60.7%

59.7%

Tangible equity to tangible assets (non-GAAP)

Equity to assets (GAAP)

12.75%

15.96%

16.12%

14.90%

14.90%

13.95%

Effect to adjust for intangible assets

(3.87%)

(6.73%)

(6.56%)

(6.02%)

(6.02%)

(5.80%)

Tangible equity to tangible assets (non-GAAP)

8.9%

9.2%

9.6%

8.9%

8.9%

8.2%

Net interest margin - FTE (non-GAAP)

(1)

Net interest margin (GAAP)

4.18%

4.10%

4.07%

3.76%

3.63%

3.67%

Effect for tax equivalent adjustments

0.04%

0.05%

0.02%

0.01%

0.01%

0.01%

Net interest margin - tax equivalent (non-GAAP)

4.22%

4.15%

4.09%

3.77%

3.64%

3.68%

Adjusted pre-tax pre-provision income (non-GAAP)

(1)

Net income (GAAP)

$101,282

$87,554

$178,871

$186,483

$49,091

$24,110

Income tax provision

52,760

81,251

45,384

43,942

9,487

4,255

Provision for credit losses

6,819

11,890

13,783

12,777

3,557

36,533

Gross loss (gain) on sale of securities available for sale

(122)

(668)

655

(2,711)

(24)

--

Gross merger-related expenses

8,081

44,503

29,868

4,552

1,494

4,129

Adjusted pre-tax pre-provision income (non-GAAP)

$168,820

$224,530

$268,561

$245,043

$63,605

$69,027

Adjusted pre-tax pre-provision return on average assets (non-GAAP)

1.94%

1.98%

1.85%

1.59%

1.59%

1.73%

South State Non-GAAP Reconciliation (cont.)

Source: Company documents

(1)

Annualized for quarter ended data