Mergers and Acquisitions (Tables)

12 Months Ended

Dec. 31, 2023

Atlantic Capital

Mergers and Acquisitions

Schedule of assets acquired, liabilities assumed, and fair value of total consideration transferred

			Initial			Subsequent
	As Recorded		Fair Value			Fair Value			As Recorded by
(Dollars in thousands)	by Atlantic Capital		Adjustments			Adjustments			the Company
Assets
Cash and cash equivalents	$	250,134	$	24	(a)	$	—		$	250,158
Investment securities		717,332		(13,622)	(b)		—			703,710
Loans, net of allowance and mark		2,394,256		(18,964)	(c)		(5,614)	(c)		2,369,678
Premises and equipment		16,892		2,608	(d)		—			19,500
Intangible assets		22,572		(1,781)	(e)		—			20,791
Bank owned life insurance		74,613		—			—			74,613
Deferred tax asset		30,231		2,273	(f)		(1,025)	(f)		31,479
Other assets		45,274		(1,277)	(g)		7,557	(g)		51,554
Total assets	$	3,551,304	$	(30,739)		$	918		$	3,521,483
Liabilities
Deposits:
Noninterest-bearing	$	1,411,671	$	—		$	—		$	1,411,671
Interest-bearing		1,616,970		—			—			1,616,970
Total deposits		3,028,641		—			—			3,028,641
Federal funds purchased and securities sold under agreements to repurchase		50,000		—			—			50,000
Other borrowings		74,131		4,286	(h)		—			78,417
Other liabilities		50,711		(2,075)	(i)		—			48,636
Total liabilities		3,203,483		2,211			—			3,205,694
Net identifiable assets acquired over (under) liabilities assumed		347,821		(32,950)			918			315,789
Goodwill		—		342,939			(918)			342,021
Net assets acquired over liabilities assumed	$	347,821	$	309,989		$	—		$	657,810
Consideration:
SouthState Corporation common shares issued										7,330,803
Purchase price per share of the Company's common stock									$	90.00
Company common stock issued ($659,772) and cash exchanged for fractional shares ($19)									$	659,791
Stock option conversion										1,135
Restricted stock unit conversion										2,870
Restricted stock awards conversion (unvested awards)										(5,986)
Fair value of total consideration transferred									$	657,810

Explanation of fair value adjustments:

(a)— Represents an adjustment to record time deposits with financial institutions at fair value (premium).

(b)— Represents the reversal of Atlantic Capital 's existing fair value adjustments of $17.2 million and the adjustment to record securities at fair value (discount) totaling $30.9 million (includes reclassification of all securities held as HTM to AFS totaling $237.6 million).

(c)— Represents approximately 1.40%, or $34.0 million, net credit discount of the loan portfolio and 2.24% total net discount, or $54.3 million, including non-credit discount, based on a third-party valuation. Also, includes a reversal of Atlantic Capital's ending allowance for credit losses of $22.1 million and $7.6 million of existing Atlantic Capital’s deferred fees and costs.

(d)— Represents the preliminary fair value adjustments of $2.6 million on fixed assets and leased assets.

(e)— Represents approximately $17.5 million, or 0.63%, of CDI amount and $3.2 million for SBA servicing asset based on a third-party valuation. Atlantic Capital’s pre-merger goodwill and servicing asset of $19.9 million and $2.6 million, respectively, were written-off.

(f)— Represents deferred tax asset related to fair value adjustments with effective tax rate of 23.9%, which includes an adjustment from Atlantic Capital’s effective tax rate to the Company’s effective tax rate. The difference in effective tax rates relates to state income taxes.

(g)— Represents the fair value adjustment (decrease) for low-income housing investments of $1.1 million, write-off of prepaid assets of $233,000, adjustments to receivables of $154,000 and fair value adjustment for Small Business Investment Company (“SBIC”) investments of $7.4 million.

(h)— Represents the reversal of the existing Atlantic Capital’s issuance costs on subordinated debt of $0.9 million and recording the fair value adjustment (premium) of $3.4 million, based on a third-party valuation.

(i)— Represents the reversal of $2.8 million of unfunded commitment liability at purchase date and the fair value adjustment to increase lease liabilities associated with rental facilities totaling $1.4 million. Also includes the reversal of uncertain tax liability of $0.7 million.