Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify stocks with strong momentum by focusing on key metrics [2] Group 2: SouthState (SSB) Performance - SouthState currently has a Momentum Style Score of A and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [3][4] - Over the past week, SSB shares increased by 5.82%, outperforming the Zacks Financial - Miscellaneous Services industry, which rose by 3.24% [6] - In the last quarter, SSB shares rose by 12.15%, and over the past year, they increased by 21.41%, compared to the S&P 500's gains of 10.83% and 14.92%, respectively [7] Group 3: Trading Volume and Earnings Outlook - SSB's average 20-day trading volume is 1,567,230 shares, which is a bullish indicator when combined with rising stock prices [8] - Recent earnings estimate revisions for SSB show one upward revision for the current fiscal year, increasing the consensus estimate from $8.03 to $8.13 [10] - For the next fiscal year, there has been one upward revision with no downward revisions, indicating positive earnings outlook [10] Group 4: Conclusion - Given the strong performance metrics and positive earnings outlook, SSB is positioned as a promising momentum pick for investors [12]

Core Insights - SouthState Corporation (NYSE: SSB) has experienced disappointing performance since September, trailing behind regional peers despite not having committed significant errors [1] Group 1: Company Performance - The shares of SouthState Corporation have underperformed compared to regional banks since the last analysis [1] - The investment strategy focuses on long-term, buy-and-hold approaches, particularly in high-quality earnings stocks [1] Group 2: Investment Strategy - The investment approach emphasizes dividend and income stocks, indicating a preference for stable returns [1]

Financial Performance - Consolidated net income for Q1 2025 was $89.1 million, a 22.6% decrease from $115.1 million in Q1 2024, with diluted EPS dropping 42.0% to $0.87 [218]. - Interest income increased by $291.3 million, driven by a $14.4 billion rise in average loan balances and a 52 basis point increase in yield [218]. - Interest expense rose by $90.7 million, primarily due to an increase in average interest-bearing deposits of $12.9 billion and a 10 basis point rise in average cost [219]. - Noninterest income grew by $14.5 million, mainly from service charges and investment services, attributed to the Independent acquisition [222]. - Noninterest expense surged by $159.5 million, with a significant portion due to merger-related costs and restructuring expenses from the Independent acquisition [222]. - The efficiency ratio increased to 61.0% in Q1 2025 from 58.5% in Q1 2024, reflecting a 58.2% rise in noninterest expenses [219]. - Return on average assets declined to 0.56% in Q1 2025 from 1.03% in Q1 2024, primarily due to a 22.6% decrease in net income [223]. - The return on average tangible equity (non-GAAP) for the three months ended March 31, 2025, was 8.99%, down from 13.63% in the same period of 2024 [329]. - The net income (GAAP) for the three months ended March 31, 2025, was $89,080 thousand, a decrease from $115,056 thousand in 2024 [329]. Asset and Liability Management - As of March 31, 2025, SouthState Corporation had total assets of $65.1 billion and employed 6,405 full-time equivalent employees [202]. - Total assets increased by approximately $18.8 billion, or 40.4%, to approximately $65.1 billion at March 31, 2025, largely due to the acquisition of Independent [245]. - Total deposits reached $53.3 billion at March 31, 2025, an increase of $15.3 million from $38.1 billion at December 31, 2024, largely attributed to the $15.2 billion in deposits acquired from Independent [300]. - Interest-bearing deposits surged by $11.7 billion, or 170.4% annualized, to $39.6 billion at March 31, 2025, primarily due to the acquisition of Independent [283]. - Noninterest-bearing deposits increased to $13.8 billion at March 31, 2025, up from $10.2 billion at December 31, 2024, with $3.9 billion attributed to the Independent acquisition [285]. - The loan to deposit ratio was 88% at March 31, 2025, down from 89% at December 31, 2024 [245]. - Total loans increased by $12.9 billion to $46.8 billion as of March 31, 2025, with non-acquired loans growing by $642.4 million, or 8.9% annualized [264]. - The acquired loan portfolio rose by $12.2 billion, primarily due to the acquisition of Independent, contributing $13.1 billion [264]. - The average balance of interest-bearing deposits increased by $12.9 billion, contributing to an increase in interest expense by $85.8 million [232]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses (ACL) reflects management's estimate of uncollectible loans, with significant judgments influenced by macroeconomic forecasts [216]. - As of March 31, 2025, the Allowance for Credit Losses (ACL) was $623.7 million, representing 1.33% of total loans, an increase of $158.4 million from $465.3 million at December 31, 2024 [272]. - The Company recorded a total provision for credit losses of $100.6 million for Q1 2025, including an initial provision of $80.0 million for Non-PCD loans acquired from Independent [270]. - The net charge-offs to total average loans for the three months ended March 31, 2025, were 0.38%, compared to 0.03% for the same period in 2024 [274]. - The ACL provides 2.29 times coverage of nonperforming loans as of March 31, 2025 [274]. - Total nonperforming assets increased to $280.4 million, or 0.60% of total loans and repossessed assets, as of March 31, 2025, representing a 31.4% increase from December 31, 2024 [280]. - Total nonperforming loans rose to $272.2 million, or 0.58% of total loans, marking a 31.4% increase from December 31, 2024 [280]. Acquisition and Integration - The Company completed the acquisition of Independent Bank Group, Inc. on January 1, 2025, in an all-stock transaction valued at $2.5 billion, issuing 24,858,731 shares of its common stock [209]. - The Company has pursued a growth strategy focusing on organic growth and selective acquisitions of financial institutions [204]. - The Company issued $2.5 billion in stock related to the acquisition of Independent during the first quarter of 2025 [287]. - The integration of Independent's operations into SouthState's may be delayed or more costly than expected, with risks of deposit attrition and client loss [330]. - The Company is pursuing an all-stock merger with Independent, which may face risks related to cost savings and revenue synergies not being fully realized [330]. Regulatory and Economic Environment - The Company is evaluating the potential impacts of new regulatory rules from the CFPB, which may affect its operations and data management practices [213]. - Economic volatility risks include potential higher rates and inflation, which could negatively impact credit markets and noninterest expenses [330]. - Regulatory changes may require higher capital levels, impacting the company's ability to pursue acquisition opportunities [334]. - Geopolitical and economic uncertainties could affect consumer confidence and loan payment patterns, potentially leading to increased charge-offs [339]. Investment Portfolio - Investment securities totaled $8.4 billion at March 31, 2025, an increase of $1.6 billion, or 23.5%, with $1.6 billion acquired through the Independent acquisition [246]. - The investment securities portfolio (excluding trading securities) rose by $1.6 billion during the first quarter of 2025, with $1.6 billion acquired through the Independent acquisition [298]. - The company conducted a securities repositioning, selling approximately $1.8 billion in investment securities at a loss of $228.8 million [229]. - The total investment securities amounted to $8.395 billion, with a yield of 3.25% [253]. - Approximately 83.6% of the investment portfolio is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities [255]. Risks and Challenges - The company faces interest rate risks that could decrease net interest income, affecting earnings from correspondent and mortgage divisions [330]. - Inflationary pressures may negatively impact profitability and demand for the company's products and services [330]. - The company is exposed to cybersecurity risks due to reliance on internal systems and third-party technology, which could lead to financial losses [333]. - The company is at risk from competition in the financial services industry, which may compress net interest margins [339]. - Catastrophic events and public health crises could disrupt economic activity and impact the company's operations and customer base [339].

SouthState (SSB) Q1 2025 Earnings Call April 25, 2025 10:27 PM ET Company Participants William Matthews - CFO & Executive VPJohn Corbett - CEO and DirectorMichael Rose - Managing DirectorSteven Young - Chief Strategy OfficerCatherine Mealor - Managing DirectorStephen Scouten - Managing DirectorRussell Gunther - Managing DirectorJared Shaw - Managing DirectorChristopher Marinac - Director of Research Conference Call Participants None - Analyst Operator Thank you for standing by. My name is Eric, and I will b ...

SouthState Corporation (SSB) reported first-quarter 2025 adjusted earnings per share of $2.15, which surpassed the Zacks Consensus Estimate of $1.43. The bottom line also increased 36.1% from the prior-year quarter. The results excluded certain notable items.Results benefited from a rise in NII and non-interest income. However, higher expenses and provisions were headwinds.Net income attributable to common shareholders was $89.1 million, down 22.6% year over year.SouthState’s Revenues & ExpensesTotal revenu ...

Core Insights - SouthState (SSB) reported a revenue of $630.64 million for the quarter ended March 2025, marking a 51.8% increase year-over-year and exceeding the Zacks Consensus Estimate by 2.35% [1] - The earnings per share (EPS) for the quarter was $2.15, up from $1.58 in the same quarter last year, resulting in an EPS surprise of 50.35% compared to the consensus estimate of $1.43 [1] Financial Metrics - Net Interest Margin (Non-Tax Equivalent) was reported at 3.8%, slightly above the estimated 3.6% [4] - The Efficiency Ratio stood at 61%, higher than the average estimate of 57% [4] - Total nonperforming assets were $280.44 million, exceeding the estimated $251.43 million [4] - Net charge-offs as a percentage of average loans (annualized) were 0.4%, compared to the estimated 0.1% [4] - Average Balance of Total interest-earning assets was $57.50 billion, below the estimated $58.46 billion [4] - Net Interest Income was reported at $544.55 million, surpassing the average estimate of $516.19 million [4] - Total Noninterest Income was $86.09 million, slightly below the estimated $88.27 million [4] - Net interest income, tax equivalent (Non-GAAP) was $545.33 million, exceeding the average estimate of $528.97 million [4] Stock Performance - SouthState's shares have returned -5.6% over the past month, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

SouthState (SSB) came out with quarterly earnings of $2.15 per share, beating the Zacks Consensus Estimate of $1.43 per share. This compares to earnings of $1.58 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of 50.35%. A quarter ago, it was expected that this bank holding company would post earnings of $1.73 per share when it actually produced earnings of $1.93, delivering a surprise of 11.56%. Over the last four quarters, th ...

[First Quarter 2025 Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) SouthState's Q1 2025 marked strategic transformations including the IBTX acquisition, sale-leaseback, and securities restructuring, resulting in adjusted EPS of $2.15 and a 3.85% net interest margin - The CEO described Q1 2025 as a "strategic reset" significantly improving the company's earnings profile, driven by the IBTX acquisition, a sale-leaseback, and a securities restructure which boosted the **net interest margin to 3.85%**[3](index=3&type=chunk) Q1 2025 Key Performance Metrics | Metric | Value | | :--- | :--- | | Diluted EPS (GAAP) | $0.87 | | Adjusted Diluted EPS (Non-GAAP) | $2.15 | | Net Income (GAAP) | $89.1 million | | Adjusted Net Income (Non-GAAP) | $219.3 million | | Net Interest Margin (NIM, TE) | 3.85% | | Adjusted ROAA (Non-GAAP) | 1.38% | | Adjusted ROATCE (Non-GAAP) | 19.9% | | Adjusted Efficiency Ratio (Non-GAAP) | 50% | - Key strategic transactions completed in Q1 2025 include the acquisition of Independent Bank Group, a sale-leaseback generating a **$229 million gain**, and a securities portfolio restructuring resulting in a **$229 million net loss**[6](index=6&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.54 per share**, payable on May 16, 2025[6](index=6&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) Q1 2025 saw net interest income rise to $544.5 million, total assets grow to $65.1 billion, and strong adjusted performance ratios [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) In Q1 2025, SouthState reported net interest income of $544.5 million, with GAAP net income of $89.1 million and adjusted net income of $219.3 million Q1 2025 Income Statement Highlights (vs. Q4 2024) | Metric (in thousands) | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Net Interest Income | $544,547 | $369,779 | | Provision for credit losses | $100,562 | $6,371 | | Total Noninterest Income | $86,088 | $80,545 | | Total Noninterest Expense | $408,826 | $256,609 | | Net Income (GAAP) | $89,080 | $144,178 | | Adjusted Net Income (Non-GAAP) | $219,282 | $148,764 | | Diluted EPS (GAAP) | $0.87 | $1.87 | | Adjusted Diluted EPS (Non-GAAP) | $2.15 | $1.93 | [Performance and Capital Ratios](index=3&type=section&id=Performance%20and%20Capital%20Ratios) Q1 2025 adjusted performance ratios were strong, with ROAA at 1.38% and ROATCE at 19.85%, and robust capital ratios including an 11.0% Tier 1 Common Equity ratio Key Performance and Capital Ratios (Q1 2025 vs Q4 2024) | Ratio | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Adjusted ROAA (Non-GAAP) | 1.38% | 1.27% | | Adjusted ROATCE (Non-GAAP) | 19.85% | 15.56% | | Adjusted Efficiency Ratio (Non-GAAP) | 50.24% | 54.42% | | Tangible Book Value per Share | $50.07 | $51.11 | | Tier 1 Common Equity Ratio | 11.0% | 12.6% | | Total Risk-Based Capital Ratio | 13.7% | 15.0% | [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, total assets increased to $65.1 billion, with loans at $46.1 billion and deposits at $53.3 billion, primarily due to the IBTX acquisition Balance Sheet Highlights (as of March 31, 2025 vs. Dec 31, 2024) | Metric (in thousands) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $65,135,454 | $46,381,204 | | Loans, net | $46,143,042 | $33,437,647 | | Total Deposits | $53,337,615 | $38,060,866 | | Goodwill | $3,088,059 | $1,923,106 | | Total Shareholders' Equity | $8,624,361 | $5,890,415 | - The Independent acquisition added **$13.1 billion in loans** and **$15.2 billion in deposits**[27](index=27&type=chunk) [Detailed Financial Analysis](index=5&type=section&id=Detailed%20Financial%20Analysis) This section details the company's financial performance, including net interest margin expansion, noninterest income and expense, loan and deposit growth, and asset quality metrics post-acquisition [Net Interest Income and Margin](index=5&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest margin expanded by 37 basis points to 3.85% in Q1 2025, driven by a 6.25% total loan yield and $61.8 million in loan accretion income Net Interest Margin Analysis (Q1 2025 vs Q4 2024) | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Net Interest Margin (TE, Non-GAAP) | 3.85% | 3.48% | | Total Loan Yield | 6.25% | 5.76% | | Total Deposit Cost | 1.89% | 1.75% | | Loan Accretion Income (in thousands) | $61,798 | $2,887 | - The remaining loan discount on acquired loans to be accreted into future interest income totals **$457.1 million** as of March 31, 2025[11](index=11&type=chunk) [Noninterest Income and Expense](index=6&type=section&id=Noninterest%20Income%20and%20Expense) Total noninterest income for Q1 2025 was $86.1 million, heavily influenced by offsetting one-time items, while noninterest expense rose to $408.8 million due to merger costs and expanded workforce - Noninterest income was significantly impacted by a **$229.3 million gain on a sale-leaseback**, which was nearly offset by a **$228.8 million net loss on securities**[13](index=13&type=chunk) Noninterest Expense Breakdown (Q1 2025 vs Q4 2024) | Expense Category (in thousands) | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Salaries and employee benefits | $195,811 | $154,116 | | Occupancy expense | $35,493 | $22,831 | | Merger and restructuring expense | $68,006 | $6,531 | | **Total Noninterest Expense** | **$408,826** | **$256,609** | [Loan and Deposit Composition](index=7&type=section&id=Loan%20and%20Deposit%20Composition) At the end of Q1 2025, total loans reached $46.8 billion and total deposits grew to $53.3 billion, driven by the IBTX acquisition, with core deposits comprising $46.2 billion Loan Portfolio by Type (March 31, 2025) | Loan Category (in thousands) | Balance | | :--- | :--- | | Investor commercial real estate | $16,822,119 | | Consumer real estate | $9,838,952 | | Commercial and industrial | $8,106,484 | | Commercial owner occupied real estate | $7,417,116 | | Construction and land development | $3,497,909 | | **Total Loans** | **$46,766,732** | Deposit Composition (March 31, 2025) | Deposit Category (in thousands) | Balance | | :--- | :--- | | Money market | $17,447,738 | | Noninterest-bearing checking | $13,757,255 | | Interest-bearing checking | $12,034,973 | | Time deposits | $7,158,242 | | **Total Deposits** | **$53,337,615** | [Asset Quality and Credit Losses](index=8&type=section&id=Asset%20Quality%20and%20Credit%20Losses) Asset quality metrics in Q1 2025 reflect the Independent Bank portfolio addition, with nonperforming assets at 0.43% of total assets and an ACL of 1.33% of total loans Asset Quality Ratios (March 31, 2025) | Ratio | Value | | :--- | :--- | | Nonperforming assets as a % of total assets | 0.43% | | Nonperforming loans as a % of period end loans | 0.58% | | Allowance for credit losses as a % of loans | 1.33% | | Net charge-offs as a % of average loans (annualized) | 0.38% | | Net charge-offs (excl. acquisition date charge-offs) as a % of avg. loans | 0.04% | - The Allowance for Credit Losses (ACL) increased from **$465.3 million** to **$623.7 million**, primarily due to initial provisions for acquired loans from Independent[18](index=18&type=chunk) - The company recorded **$39.4 million in acquisition date charge-offs** on acquired PCD loans from Independent to conform with its own charge-off policies[6](index=6&type=chunk)[18](index=18&type=chunk) [Company and Shareholder Information](index=9&type=section&id=Company%20and%20Shareholder%20Information) This section provides details for investors, including the announcement of a quarterly dividend and information regarding the upcoming earnings conference call, and a brief overview of company operations [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Board of Directors declared a quarterly cash dividend of $0.54 per share, payable on May 16, 2025, to shareholders of record as of May 9, 2025 Q1 2025 Dividend Information | | Details | | :--- | :--- | | Dividend per Share | $0.54 | | Record Date | May 9, 2025 | | Payment Date | May 16, 2025 | [Conference Call Information](index=9&type=section&id=Conference%20Call%20Information) SouthState will host a conference call to discuss its Q1 2025 financial results on April 25, 2025, at 9:00 a.m. Eastern Time, with webcast access available on the investor relations website - A conference call to discuss Q1 2025 results is scheduled for **April 25, 2025, at 9:00 a.m. Eastern Time**[21](index=21&type=chunk) - SouthState Corporation is headquartered in Winter Haven, Florida, serving over one million customers across Florida, Alabama, Georgia, the Carolinas, Virginia, Texas, and Colorado through its bank subsidiary[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles GAAP results to non-GAAP measures, which management uses to provide a clearer view of ongoing performance by adjusting for securities losses, sale-leaseback gains, merger expenses, and initial credit loss provisions Reconciliation of GAAP to Adjusted Net Income (Q1 2025, in thousands) | Description | Amount | | :--- | :--- | | **Net Income (GAAP)** | **$89,080** | | Securities losses, net of tax | $178,639 | | Gain on sale leaseback, net of tax | ($179,004) | | Initial PCL - Non-PCD loans & UFC, net of tax | $71,892 | | Merger & restructuring expense, net of tax | $53,094 | | Deferred tax asset remeasurement | $5,581 | | **Adjusted Net Income (Non-GAAP)** | **$219,282** | Reconciliation of GAAP to Adjusted Diluted EPS (Q1 2025) | Description | Amount | | :--- | :--- | | **Diluted EPS (GAAP)** | **$0.87** | | Effect of securities losses | $1.76 | | Effect of gain on sale leaseback | ($1.76) | | Effect of initial PCL | $0.71 | | Effect of merger & restructuring expense | $0.52 | | Effect of deferred tax remeasurement | $0.05 | | **Adjusted Diluted EPS (Non-GAAP)** | **$2.15** | - Management uses non-GAAP measures like Adjusted Net Income, Adjusted EPS, Tangible Book Value, and Adjusted Efficiency Ratio to provide additional useful information by excluding items such as merger costs, securities gains/losses, and other one-time events[23](index=23&type=chunk)[27](index=27&type=chunk) [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) The report includes forward-looking statements subject to significant risks and uncertainties, including economic volatility, merger integration, interest rate, credit, cybersecurity, and regulatory risks, with no commitment to updates - The report contains forward-looking statements based on management's current beliefs and assumptions, which are not guarantees of future performance[28](index=28&type=chunk) - Key risks that could cause actual results to differ include economic volatility, inflation, merger and integration risks with Independent Bank Group, interest rate, credit, and liquidity risks, competition, regulatory changes, cybersecurity, and geopolitical risks[29](index=29&type=chunk) - SouthState cautions readers not to place undue reliance on forward-looking statements and undertakes no obligation to update them[30](index=30&type=chunk)

Company Overview - SouthState (SSB) is expected to report earnings for the quarter ended March 2025 on April 24, 2025, with a consensus EPS estimate of $1.43, reflecting a year-over-year decline of 9.5% [3] - Revenue is anticipated to be $604.47 million, which represents a significant increase of 45.5% compared to the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] - The Most Accurate Estimate for SouthState is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -23.21%, suggesting a bearish outlook from analysts [10] Historical Performance - SouthState has a history of beating consensus EPS estimates, having done so in the last four quarters, with the most recent surprise being +11.56% when it reported earnings of $1.93 against an expectation of $1.73 [12][13] Industry Comparison - In the Zacks Financial - Miscellaneous Services industry, Virtu Financial (VIRT) is expected to report earnings of $1.14 per share for the same quarter, indicating a year-over-year increase of 50% [17] - Virtu Financial's revenue is projected to be $460.2 million, up 25.4% from the previous year [17] - Despite a recent 2.3% downward revision in the consensus EPS estimate for Virtu Financial, a higher Most Accurate Estimate has resulted in a positive Earnings ESP of 3.08%, suggesting a likely earnings beat [18]

Group 1 - SouthState Bank has established a presence in Nashville, Tennessee, by hiring an experienced team to expand its operations in the region [1] - Cameron Wells has been appointed as division president, bringing over 20 years of experience in the banking sector, particularly in the Middle Tennessee market [1] - The bank aims to serve its Commercial and Middle Market customers in Nashville, leveraging its reputation for providing remarkable customer experiences [1] Group 2 - Will Hatfield has joined SouthState as director of Middle Market Banking, bringing 12 years of experience in Commercial and Small Business Banking [2] - Kelsea Lamia has been appointed as a Commercial banker, contributing 14 years of banking experience to the Nashville team [3] Group 3 - SouthState Corporation is headquartered in Winter Haven, Florida, and operates a nationally chartered bank subsidiary that serves over 1.5 million customers across multiple states [4]