Hello, and welcome to the SouthState Corporation Q4 2022 Earnings Conference Call. I would now like to turn the conference over to Will Matthews, CFO. Please proceed.

Good morning, and welcome to SouthState's fourth quarter 2022 earnings call. This is Will Matthews, and I am here with John Corbett, Steve Young, and Jeremy Lucas. John and I will make a few prepared remarks, and then we'll open it up for questions. As always, a copy of the earnings release and the presentation slides are located on our website on the Investor Relations tab. 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 will turn the call over to John Corbett, our CEO.

Thank you, Will. Good morning, everybody. Thanks for joining our call. We're really proud of our team and the momentum that's been building throughout 2022. I think that 2021 was a year where we were taking the time to plant the seeds for the future, and 2022 was a year where those seeds began to take root and to grow, and that growth is reflected in the results that we announced last night. During the fourth quarter, PPNR per share increased 11% over the third quarter. That took us to a PPNR return on assets over 2% and a return on tangible equity of 20%. We set aside $47 million in reserves, but incurred less than $1 million in charge-offs. So credit quality metrics continue to be excellent, and Will can walk you through the impacts of the Moody's economic forecast later in the call. Total loans grew 19% annualized in the quarter, and over the last few years, we've recruited some of the best middle-market bankers in the Southeast, and that team is doing a great job as C&I loans specifically grew at 27% annualized. In the period, deposits declined 6% annualized, and we've still got balance sheet flexibility with an 83% loan to deposit ratio. Our total cost of deposits landed at 21 basis points, and so far this cycle, our cumulative total deposit beta is only 5%. If you step back and look at the full year for 2022, PPNR per share was up 36% over 2021. Loans grew 17%, deposits decreased 5%, and as we right-sized the balance sheet, net interest margin expanded 120 basis points. Over the entire year, we set aside $82 million in loan loss provisions but only incurred $4 million in charge-offs. So we strengthened our reserves in 2022 to prepare for a likely economic slowdown in 2023. In addition to organic growth, our integration team successfully completed the Atlantic Capital conversion last summer, and our Atlanta bankers are doing a terrific job in a dynamic market. The Census Bureau released their latest population report last month. We updated a Census Bureau map on Page six of the deck that breaks out the four regions of the country. And since the pandemic began in 2020, 1.7 million people in the Western states, the Northeast, and the Midwest sold their homes, packed their bags, and moved to the South, and of the 1.7 million people that moved to the South, two-thirds of them landed in our SouthState markets. Based on the latest census reports, SouthState continues to do business in four of the six fastest-growing states in the country, with Florida ranking number one as the fastest growing state in the country last year. As we think about the economy and the year ahead, it seems to us that the Fed is getting what it wanted. The economy is slowing, and loan pipelines are shrinking. So we don't know if 2023 will be a soft landing, a mild, or a moderate recession, but what we believe is that regardless of the direction of the economy, based on the level of population migration, the South will outperform other areas of the country. We believe in the power of compounding over time, so our aspiration has always been to grow everything good in the bank at a compounded annual growth rate of 10% a year over a cycle. Three years ago this week, we announced the merger of equals of CenterState and SouthState and began the integration process, coincidentally right when the pandemic hit. It's obviously been a volatile three years of monetary policy since the merger announcement, and our growth has been uneven, but if you look back over the last three years, and if you smooth out the irregularities of the cycle, we've grown at the pace that we planned. Deposits have grown at a compounded annual growth rate of 13% since the merger announcement, and loans have grown at a compounded annual growth rate of 9% a year since the merger announcement. So our team is executing on our plan, and we're now witnessing the earnings power of their hard work. So I'll close by congratulating and thanking all of our team members from our IT team that made big improvements to our digital offerings, to our risk management areas that have strengthened our defenses, to our bankers that generated $13 billion of new loans during the year, and our branch employees that have cared for our clients through countless changes. You've done a great job in a challenging environment. So Will, I'll turn it over to you.

Thank you, John, and I'll echo your comments. The team's really done a great job executing in this environment, leading to great results for the quarter and the year. We had another very strong quarter and net interest revenue with a tax equivalent NIM of 3.99% up 41 basis points from the third quarter and core net interest income up $36 million. Our loan yields improved by 45 basis points, and our cost of total deposits rose by 13 basis points versus the third quarter. As we noted last quarter, we expect our deposit beta to increase from this point forward. Non-interest income totaled $63 million down $10 million from Q3. A few items I'll mention impacting non-interest income. We wrote down the value of our MSR asset by $3.2 million, which led to negative mortgage division revenue for the quarter. We also wrote down our SBA servicing rights asset by $900,000 for a combined $4.1 million write-down on servicing assets in the quarter. You'll also note that we began applying settle-to-market accounting for a variation margin collateral on exchange-cleared swaps to net against the swap asset or liability. That resulted in a decrease in deposits and swap assets on the balance sheet and a decrease in the corresponding interest expense and non-interest income with no effect on net income, and to help with your models, we've adjusted prior periods accordingly as noted on Page 11 of the release. Mortgage production fell in the quarter to approximately $700 million with 81% of the volume being portfolio. Looking forward, expectations from mortgage production in 2023 remain muted across the industry. We expect ours to also be down significantly from 2022, but we expect our percentage of secondary market production to increase. Correspondent income continued to be somewhat challenged in this rate environment. Service charge income showed a seasonal lift, and our wealth management division closed out another strong year. Non-interest expenses of $228 million were up slightly from Q3 with no big swings versus the prior quarter. Looking to 2023, we currently estimate NIE in the $950 million range with the first quarter being in the low $230 million. That would represent an increase of approximately 5% from 2022 if normalized for 12 months of Atlantic Capital. I will note that there are of course factors in our business lines and in loan production that can cause the NIE number to increase or decrease through the year due to the impact on commissions, incentives, and deferred loan costs. On the balance sheet, the $1.3 billion in loan growth John mentioned was centered in single-family residential, CRE, and CRE construction and C&I loans. Although we're starting to see some slight increased usage on commercial lines, line of credit utilization remains about 5% below pre-pandemic levels. Expectations for loan growth in 2023 are in the mid-single digit percent range as we're seeing pipelines and pre-flight discussions decline and a general sense of cautiousness among borrowers. Deposits declined approximately $600 million in the quarter. So coupled with loan growth, our cash and fed funds position declined $1.6 billion to end the quarter at $1.3 billion. We continued to have very little wholesale funding with only $150 million in brokerage CDs and no FHLB advances at year-end. Our risk-based regulatory capital ratios were essentially flat compared to Q3, and our TCE ratio improved approximately 40 basis points to 7.2%. Ending TBV per share rose back above $40 to end the year. Turning to credit, as John noted, we continue to have excellent credit results, though we recorded a higher provision expense due to economic forecast changes. We had minimal net charge-offs for the quarter, one and two basis points respectively, and in fact, excluding DDA overdraft charge-offs, we had net loan recoveries for both the quarter and the year. NPLs were up $8 million ending at 36 basis points of loans caused by a $9 million increase in acquired SBA NPLs, which are generally 75% government-guaranteed. So net unguaranteed NPLs were almost flat. As John mentioned, criticized and classified assets were down significantly with a $12 million decline in substandard loans and an $85 million decline in special mention loans. Our $47 million in provision expense was up $23 million from Q3 and was not due to a deterioration in credit, but rather due primarily to changes in economic forecast with growth as a secondary factor. $33 million of this provision expense was for loan losses, and $14 million was for the reserve for unfunded commitments. As noted on Slide 31, the ending reserve was 118 basis points of loans with another $67 million in the reserve for unfunded commitments. The combined total was a percentage of loans that is up approximately nine basis points from Q3. Finally, I'll note that we've included some additional credit information on loan categories of interest in Slides 33 and 34. Operator, we'll now take questions.

Our first question today comes from Stephen Scouten from Piper Sandler. Your line is now open.

Thank you. Good morning, everyone. I guess maybe if I could start just with a question around residential mortgage and what you would expect to see that do on balance sheet, and that's been a nice additive portion of growth, but I think you just said, Will, you might have more mortgage going to the secondary market next year. What's the driver of that? Is that pricing, or is that more that you're reaching more of a concentration limit on your balance sheet? How can we think about that, the interplay there on mortgage?

Yeah. Hey, it's Steven. Steve, yeah, it's been a really nice year for residential mortgage, and if you think about the volatility in that business, particularly with the rates, it's changed a lot since the beginning of the year. I think at the beginning of the year, the 30-year fixed-rate mortgage was somewhere in the 3% to 3.25%. It hit a high of about 7%, I think 7%, 7.5%, in the late third quarter. We have a slide in the deck which talks, I think it's Page 15 in the deck, and it describes sort of the balance sheet growth over the last three years in residential mortgage. And what you'll see in that graph if you look at it is when rates were very low in 2020 and early '21, we strengthened the residential portfolio and then sold a lot of our production in the secondary market when rates or when gain on sale margins were high. Then you can see as rates started rising, we started putting more of that on our balance sheet. So if you kind of looked at our three-year cycle, we grew about $950 million, but we shrank some and we grew some depending on the balance sheet management side. So it was about 6% CAGR over the course of a three-year period. As we sort of normalize that, I would think that our residential mortgage will grow about the same as the rest of our loan book, and I think we got to mid-single digits. So just to kind of give you some perspective, we've grown 6% CAGR over the course of a three-year period. But clearly, residential rates have come down, and the secondary market is a little bit more attractive than it was a few months ago.

Okay, that makes a lot of sense. Thanks, Steve. And then I think last quarter you said an 80% to 85% kind of loan-to-deposit ratio by year-end '23. Obviously, we're already at that 83% level. So do you think that moves higher than that 85% range at this point? And then is the 24% cycle deposit beta still the right number to think about, or given how much outperformance you've had to date do you think it's better than that?

This is Steve again. Regarding our loan-to-deposit ratio, I want to discuss our guidance, which hasn’t changed much. Our starting point has shifted slightly on the deposit side, resulting in a somewhat higher deposit rate. For 2023, our goal is to achieve mid-single-digit loan growth while keeping deposits relatively flat or maybe slightly increasing. Looking at the broader picture, I know you're interested in the question about margin. John mentioned it during the call, and we're pleased with our margin expansion this year. We have a presentation slide that outlines the progression of net interest margin from the fourth quarter of last year to this quarter, reflecting an increase of 120 basis points. I’ve never witnessed such a significant change in my career, with this quarter's NIM reaching 41 basis points. As for the margin guidance for 2023, I will provide the same outlook we shared in October with one update. When considering the margin, there are three key factors: the size of interest-earning assets, interest rate assumptions, and the deposit beta assumption. In October, we projected around $40 billion in average interest-earning assets for 2023. We're starting slightly smaller but expect to be a bit larger, so there won’t be any changes to that guidance. In our last earnings call, the Moody's consensus forecast indicated that fed funds would peak at 4.75% in 2023. That forecast has since shifted to a peak of 5%, followed by a 25 basis point decrease by the fourth quarter. Averaging it out, it’s essentially the same for 2023. Regarding our deposit data, our cycle-to-deposit beta is at 5%, while historically, it was 24%. We continue to model the same deposit beta as the lifecycle. With the interest rate forecast and deposit beta, we anticipate deposit costs to be around 1.15% to 1.25% in the latter half of the year, approximately 100 basis points up from where we stood last quarter. We believe that 40% to 50% of this will materialize in the first quarter, with the rest occurring over the year. During our last call, we guided a net interest margin range of 3.60% to 3.80% for 2023. Our assumptions haven’t really changed, and we are raising our NIM guidance to a range of 3.70% to 3.90% for 2023. This adjustment is primarily due to a 10 basis point reclassification of interest costs related to swap collateral now recorded as noninterest income. Our net interest income projection increases by 10 basis points, which results in an equivalent decrease in noninterest income, keeping total revenue consistent. Overall, our guidance remains similar with this geographical shift. I hope this comprehensive response clarifies our perspective for 2023.

Yes. Extremely helpful color, Steve. And if I could just squeeze in one last one. Just maybe more high level here. John, you noted three years since you announced the larger merger of equals here, and you still have an advantage currency, and as you said, in really some of the markets in the country. But if you were to do incremental M&A over the next, let's call it, two years, what would be, do you think, your focus there? Is it still deepening further in your current markets? Would you look to expand into other strong Southeast markets? Or how do you think about the franchise over the next couple of years?

Certainly, Stephen. This question was posed last quarter, and our stance on M&A remains unchanged. As we approach 2023, we anticipate that M&A activity will be relatively slow for a few reasons. Currently, there is limited clarity regarding the regulatory approval process and potential recession risks. The entire industry is likely to experience a slowdown in M&A in 2023. However, we believe that activity may increase towards the year's end as banks begin to consider future earnings. With an inverted yield curve, it is probable that earnings will stabilize in 2024, which could lead to a more favorable attitude toward M&A. We have structured the company to operate in high-growth markets, and typically, the types of targets that make the most sense for us are those that are about 10% to one third of our size, preferably in our existing high-growth markets. This approach allows for easier synergies, especially since we operate in four of the six fastest-growing states in the nation. If we were to explore opportunities outside our current footprint, we would seek similar growth characteristics. Notably, the GDP of the six states we operate in would rank as the fourth-largest globally, providing us with ample opportunities within our existing locations.

Our next question comes from Catherine Mealor from KBW. Your line is now open.

I want to follow up on the deposit beta discussion. Your betas have been remarkable, and maintaining them at around 24% will certainly set an industry-leading standard. Can you explain why your beta is not accelerating as much as some of your peers? I believe a lot of this is due to your deposit composition, particularly with a significant amount in checking and a very diverse portfolio. We’re witnessing betas increase across the industry, so can you clarify the reasons for your different performance? Additionally, are you anticipating any changes to your deposit composition, particularly regarding the balance of CDs, checking, and DDAs? It would also be helpful to understand the betas within each deposit category to highlight how your mix contributes to this better performance, especially if some of your higher-cost categories are experiencing similar betas as the competitors.

Sure, Catherine. It's Steve, and that's quite a complex question, but I believe I understand what you're asking. Let me refer back to Page 18, which discusses our deposits. You've mentioned some key points, so I'll try to elaborate on that. 61% of our deposits are in checking accounts, which typically serve as warehouse accounts for commercial, small business, and retail segments. In comparison, our peers have 43%. I would highlight this as a primary reason we believe the overall deposit beta stands at 24%. When examining the different segments, it's not solely commercial, small business, or retail; it's nearly equally divided among all three, and you can observe the varying average checking balances. That said, it is certainly challenging in terms of deposits, and the most sensitive accounts to interest rate changes will be money markets and CDs. Like others, we are experiencing similar pressures. Looking ahead to the next year, if we expect to finish with rates about 100 basis points higher than today, we believe that 40% to 50% of that increase will occur in the first quarter. The reasoning behind this is our noticeable pressure on the money market and CD fronts. As of January 1, we raised rates across the board. Consequently, that area of the balance sheet is expected to be more sensitive to rate changes compared to our checking accounts. Our goal, of course, is to continue attracting core clients to safeguard our deposit franchise, which, as you know, is the most crucial part of our balance sheet. While we are aware of the rate volatility and changes in the yield curve over the past year, we are optimistic about our total cycle beta. Assuming the Fed pauses its rate hikes in the next quarter, we expect to see a lag in the impact. It will continue to increase, but we are confident in our position, and our net interest margin guidance reflects that. I hope this information is helpful.

And Catherine, it's Will. I would just elaborate a little bit. Obviously, this cycle is a little different than ones we've seen in the past. And we're giving you our best estimates based on what we see thus far, but we're certainly out there balancing the same battle everyone else is. We do feel like we entered it with a really healthy core deposit base and mix. And we've really allowed our market leaders, who are closest to the customers, to negotiate with clients on a one-off basis rather than us trying to make all the decisions from headquarters. So that's our strategy thus far. Hopefully, we'll be successful and have a setup somewhat like last time, but it is a different environment. Of course, we acknowledge that.

That's really helpful. My other question pertains to the reclassification of the interest cost of the swap collateral that you disclosed this quarter, which is approximately $8.4 million and has been increasing as rates rise over the past few quarters. If we are trying to project what that number will be, is it likely to remain steady at $8.4 million, assuming the Fed makes a couple more hikes? And once it stabilizes, will that be the expected level, or will fluctuations in rates impact that figure in the coming quarters?

Yes, Catherine. There are really two components to consider, and it's not straightforward to predict. The first factor is the amount of collateral we post, which is primarily influenced by the 10-year treasury rate. The second factor is the cost of that collateral, which depends on the Fed funds rate. Currently, the 10-year treasury is around 2%, serving as a neutral point. As rates decrease, we post less collateral, and the tender rate also drops. Conversely, when the Fed funds rate changes, the corresponding interest will adjust as well. Thus, predicting this is somewhat challenging. Steve's estimates suggested around $10 million per quarter in relation to margin dollars, referencing the earlier 10 basis point remark. However, this is still somewhat speculative at this stage.

Great. Okay. I guess my main thought was that this isn't going away, and it's part of the guidance for the net interest margin. I believe it should remain stable moving forward, which is beneficial.

Yes. Catherine, I'd just say that it's about $800 million at the end of the quarter, give or take a little bit. And if we're to close to a 5% Fed funds rate, that's about $40 million a year, and that's sort of the assumption, and that's the 10 basis points on assets.

Got it. That makes sense. Okay. Perfect. And then maybe my last question is just on the fee outlook. Has anything changed? The correspondent has been a little bit lighter than expected outside the reclass. So just any kind of thoughts on your forward guidance for fees as we enter '23?

Yes, fee income was just over $63 million, which is 57 basis points of assets. Our previous guidance was between 60 basis points and 70 basis points. As Will mentioned earlier, we encountered some one-off events in mortgage servicing, SBA servicing, and asset write-downs amounting to about $4.1 million or $4.2 million, along with an additional $8.5 million from the reclass of central collateral. Excluding those factors, it would have been around 68 basis points. We're currently in the middle of the range. However, when comparing the fourth quarter to the future, we anticipate that until the Fed halts rate increases and interest-sensitive businesses like mortgage and core deposits stabilize, we expect it to be in a similar range of 55 to 65 basis points of assets. This does not indicate a decline of 10 basis points. If the Fed does cease rate hikes, we expect the figures to start increasing again, bringing noninterest income to average assets back towards 60 to 70 basis points. We are currently navigating a transition period where net interest margin has increased significantly, while noninterest income has declined. My expectation is that once the Fed stops raising rates, noninterest income will begin to recover in the latter half of the year if our interest rate forecast holds true.

Our next question comes from Michael Rose from Raymond James. Your line is now open.

Just on the expenses, just a couple of questions. Can you just remind us what the expectation is for the FDIC expense pickup is this quarter? And if you can kind of remind us what you're assuming for annual merit increases like in the first quarter? Just trying to get kind of a level set as we think about just kind of the first quarter within the context of roughly $950 million of NIE for the year.

Yes, Michael. I don't have the precise FDIC insurance expense model in my head, so I can't answer that part of the question. We've modeled essentially a 4% merit increase across the footprint. And we do have some new hires. We're investing in a number of parts of our business across the footprint as a result of our strategic planning and strategic initiatives process that we just completed in the fall. And so there's some new hires coming in as well on some of that. And that will come in throughout the course of the year as those initiatives begin, but all that's baked into that $950 million number that I referenced and expecting something in the low $230 million in the first quarter. Like I said in my prepared remarks, and you know this, but there are factors that can cause that to move around a little bit. I mean, loan production moving up or down will impact deferred loan costs. Production versus incentive goals will affect incentive compensation, things like that. So those are all variables that are in there, but that's our best estimate at this point.

Perfect. And then just moving to credit. Obviously, you guys built the reserve this quarter. It seems obviously changing a little bit of the modeling inputs, but it seems pretty conservative, especially with criticized classified moving actually down again Q-on-Q. Is there anything that when you look out at the portfolio that kind of worries you? There's been a lot of talk around office and commercial real estate, maybe construction to some degree. I think this was asked every quarter. But just generally, how are you guys feeling about credit? And assuming the backdrop continues to soften or deteriorate, would we expect to see that reserve ratio continue to kind of grind higher under those pretenses?

Michael, it's John. I can maybe start on the asset quality. If Will has an opinion on CECL, I know I can tackle that. But as you mentioned, the asset quality is remarkably good right now. I mean, charge-offs are 1 basis point is really all DDAs. So we've had net recoveries, loan recoveries in the quarter and in last year. Non-accruals did pick up, but it's almost entirely, as Will said, government-guaranteed SBA. So the nonguaranteed portion is basically flat. We've added some slides, too, Michael, you might be interested in Page 33 and 34 that kind of breaks out our underwriting loan-to-value debt service coverages on commercial real estate and then also our consumer portfolio. But as far as the areas that we kind of are focused on and we think could be challenging in the next year or two; small business naturally is one. I mentioned that pickup in SBA loans. But fortunately, we've got the guarantees there. But if you think about the pressure on small businesses with wage inflation, rent inflation, and interest rate costs, that's an area to watch. It's very small for us, a couple of hundred million dollars, but the assisted living area with COVID continues to be something that we're working through, some weakness there. And on office, the metrics are all great right now for us. But there is this social demographic shift that's going on. We look at our office book, and it's about 4.4% of the total loan portfolio. Right now, we're at a 62% loan-to-value and a 1.67x debt service coverage. So it underwrites fine. I think the advantage for us on office is that we've done mostly smaller properties. 78% of them are under 150,000 square feet. And our average office loan is only $1.3 million. So 90% of the portfolio in office for us doesn't mature until 2025 or after. So hopefully, the office shift will be a slow-moving train, and our clients and us will be able to react as the market shifts. But those are the areas we're watching so far. We haven't seen the deterioration or past dues are stable, and special mention classifieds are coming down.

Yes. On the CECL point, Michael, I guess a couple of things. One, our CECL model utilizes loss data from every bank we've acquired, excluding five or six banks dating back to 2004. And this is both of the companies making up our merger of equals. And that's about 60 or 61 banks in total, I think. Our loss drivers really vary by loan type, but they include South Atlantic region unemployment, the housing price index year-over-year change, the CRE price index year-over-year change, apartment rental vacancy rate, and GDP for the South Atlantic region. So our future reserve levels or our future provisioning expense is going to depend upon changes in forecast for those loss drivers as well as our actual net losses, which, of course, brings down the reserve. We continue to be more conservative in our outlook than Moody's. Our reserve is about 20% to 25% higher than it would be under the straight Moody's baseline scenario, though Moody's has gotten a little more conservative showing more economic weakening this quarter. I don't think it's appropriate for me to comment on the validity of an accounting standard of FASB makes the rules, and we live by them. But if you look at our company over the last three years and you sum up the absolute value of our provision expense, positive and negative, you get something north of $500 million. And over the same three-year period, we've had cumulative net charge-offs of something around $12 million. I'm not suggesting that 1.5 basis points a year is a sustainable net charge-off level. But I think, in our view, what's more important is not so much how much provision expense we have, but rather how much money we lose in net charge-offs because until we charge it off, the provision expense really just moves from one form of capital to another.

I appreciate that, John, and I also appreciate the slides you included at the end; I forgot to mention those at the beginning of my question. It's good to hear. I have one last question for clarification. The NIM guidance is increasing slightly, correct? If so, could you share what the expectation is for scheduled accretion this year?

Yes, Michael. Yes, that's right, all-in NIM between 3.70% and 3.90% for the year. The accretion, of course, I think in the fourth quarter was around $7 million, $7.5 million. I think we are modeling that around $20 million for the full year of 2023. So it comes down a little bit. But all that's factored in the entire cut.

Yes, to clarify, the change was primarily due to the geographic adjustment related to the collateral. As Steve mentioned earlier, I want to emphasize that while our guidance for the net interest margin has increased, there's a corresponding decrease in noninterest income, leading to total revenue essentially remaining consistent with our guidance from last quarter.

Our next question comes from David Bishop from Hovde Group.

Appreciate the guidance in terms of the expectations for loan growth. Obviously, you guys have had entered fourth quarter with plenty of excess liquidity or planned liquidity, took down cash a bit. How should we think about the funding of that loan growth? Is that securities runoff, a little bit more cash? Did you get a little bit more aggressive on wholesale borrowings? Just curious how you're thinking about the funding of the growth this year.

Yes, David. This is Steve. We expect mid-single digits, around $1.5 billion in loan growth for 2023. We're anticipating about $800 million to $900 million coming off the investment portfolio, which we will use as cash. For deposits, we project a flattening trend of about $500 million to $600 million for the year. Regarding deposits, as Will noted, we had roughly $150 million in broker deposits at the end of the year, which has been there for three or four years, and we had no wholesale borrowings from the Federal Home Loan Bank. Looking back, at the end of 2019, we had a bit over $1 billion in broker and FHLB combined. It wouldn’t be surprising if we reach a similar level in the next 12 months. Overall, we're expecting deposits to remain approximately flat with a slight uptick.

Okay. Appreciate that. And then curious, just a final question for me. In terms of onboarding of new loans this quarter, just curious where you're seeing new loan yields on new production this quarter versus last.

Yes. David, our new loan production, I don't have in front of me the fourth quarter. I think in December, it was approaching 6% or so on the new loan production. I think our overall portfolio yield as a spot day at the end of the quarter was a little less than 5%, but close to 5%. So essentially, your portfolio is around 5%. I think we ended in line with the quarter was around 43% I think was the average. I think our ending was a little less than 5%, and we're putting on loans close to 6%, give or take.

There are no further questions at this time, so I'll hand you back over to John Corbett.

All right. So thank you, and those are good questions. As always, we appreciate your interest in joining us on a busy earnings call morning. So appreciate that. If you have any follow-up questions in your models, don't hesitate to give us a ring. Hope you guys have a great day.

That concludes today's SouthState Corporation Q4 2022 earnings conference call. You may now disconnect your lines.