SouthState Bank Corporation

Hello and welcome to the South State Corporation Q4 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during this time, simply press star 1 on your telephone keypad. I will now turn the conference over to Will Matthews. Please go ahead.

Good morning, and welcome to South State's fourth quarter 2023 earnings call. This is Will Matthews, and I'm here with John Corbett, Steve Young, and Jeremy Lucas. John and I will provide some brief prepared remarks, and then we'll open it up for questions. As always, a copy of our earnings release and presentation slides are on our investor relations website. Before we begin our remarks, I want to remind you that comments we make may include forward-looking statements within the meaning of the federal securities laws and regulations. Any such forward-looking statements we may make are subject to the safe harbor rules. Please review the forward-looking disclaimer and safe harbor language in the press release and presentation for more information about our forward-looking statements and risks and uncertainties which may affect us. Now I'll turn the call over to John Corbett, our CEO.

Thanks, Will. Good morning, everybody. Thank you for joining us. You can see in the earnings release that South State delivered a solid quarter that was consistent with our guidance. High level, it was another quarter of steady loan and customer deposit growth with mid-single-digit growth in both. NIM dipped a couple basis points but is leveling off. And capital ratios are growing nicely. The end of the year is always a time for reflection. As we look back on 2023 and specifically the turmoil last spring, It was a period that demonstrated the resilience of South State, particularly the resilience of our granular deposit franchise, the resilience of our asset quality, and the resilience of the high-growth markets where we operate. The new census report was issued last month, and not surprising, Florida, South Carolina, North Carolina, and Georgia were all in the top five fastest-growing states in the country during 2023. And since the pandemic, Over a million people have moved to Florida. Sal State is a company that was forged during the Great Recession, during a decade of rapid consolidation. The culmination of that period was a merger of equals announced four years ago this month. That significant event in our history was an opportunity to catch our breath and spend a couple years to retool the guts of the bank. specifically in the areas of technology and risk management. Our goal was to strengthen the infrastructure without sacrificing our decentralized and entrepreneurial culture. It was painstaking work that affected every area of the bank. We upgraded 20 different technology platforms and increased our annual technology spend by 76%. Annual spending on technology in 2024 is estimated to be $68 million more than it was in 2020. On the risk management side, our program has matured to meet the heightened expectations of the OCC. We upgraded with experienced professionals from the big banks and strengthened the three lines of defense. During the first couple years, those technology and risk management changes took a toll on our employees and impacted the customer experience. But it was short-term pain for long-term gain. So with a larger bank infrastructure in place, our focus pivoted in 2023 to making our employees' and customers' lives better. We needed to refine the new technology so that it was serving us rather than the other way around. And I think we've been largely successful. Employee engagement is now back to the top quartile of our peers, and we're beginning to leverage the power of the new technology. Now in 2024, As we approach the end of the COVID era, and hopefully a more normal yield curve, we believe we can deliver outsized shareholder returns in the future. It's a future that's possible because of the hard work over the last few years. So I'll close by thanking our team for preparing us for this next chapter. I'll pass it back to Will now to walk you through the details on the quarter.