Core Viewpoint - SouthState Corporation (SSB) has shown strong performance with an 11.6% increase in shares over the past three months, outperforming the industry growth of 6.8% and its peers [1][8] Financial Performance - The Federal Reserve's recent interest rate cuts are expected to ease funding pressures and stabilize deposit costs, benefiting banks like SouthState [4] - SouthState's net interest income (NII) has achieved a five-year compound annual growth rate (CAGR) of 22.9% through 2024, with continued improvement in the first half of 2025 [5] - The net interest margin (NIM) improved in the first half of 2025 due to balance sheet optimization, despite a decline in 2024 from elevated funding costs [5][6] - Revenue growth is projected to continue, with estimates suggesting a year-over-year increase of 51.93% for 2025 and 4.76% for 2026 [9][10] Growth Strategies - SouthState has expanded its market presence through acquisitions, including the significant acquisition of Independent Bank in January 2025, which increased total assets to $65.1 billion [10][11] - The company has maintained strong organic growth, with a revenue CAGR of 21.5% over the past five years, continuing into the first half of 2025 [6][7] Liquidity and Shareholder Returns - SouthState has a solid liquidity position, with total debt of $1.2 billion against cash and cash equivalents of $3.5 billion as of June 30, 2025 [12] - The company has consistently raised dividends since 2020, with a recent hike of 11.1% in July 2025, resulting in a payout ratio of 26% and a five-year annualized dividend growth of 3.30% [13][16] Risks and Concerns - Elevated non-interest expenses have shown a CAGR of 16.6% from 2019 to 2024, driven by various operational costs [18] - The loan portfolio is heavily concentrated in real estate, with 72.9% of loans having real estate as collateral, increasing exposure to commercial real estate risks [20][21] Valuation - SouthState's trailing price-to-book (P/B) ratio of 1.15X is below the industry average of 1.88X, indicating that shares are trading at a discount compared to peers [23]

Core Insights - SouthState Bank has launched instant payment solutions for its Treasury customers, allowing them to send and receive payments in real-time [2][3] - Over the past year, the bank processed more than 600,000 instant payment transactions, totaling over $400 million [2][3] Group 1: Instant Payment Solutions - The new instant payment solutions are designed to enhance cash flow management, secure transactions, and improve reconciliation processes for businesses [3] - Instant payments are facilitated through two networks: The Clearing House's Real-Time Payments (RTP) and the Federal Reserve's FedNow, ensuring secure and encrypted transactions [6] - The instant payments adhere to the global ISO 20022 standard, which simplifies data integration into enterprise and accounting systems, leading to increased efficiency [7] Group 2: Customer Impact - Hourly, a payroll startup, participated in the pilot program and highlighted the significant impact of instant payments on employee satisfaction, allowing payments to be made within 15 seconds [4][5] - The bank aims to expand instant payment offerings beyond Treasury customers in the future [7] Group 3: Company Overview - SouthState Bank Corporation, headquartered in Winter Haven, Florida, provides a range of financial services to over 1.5 million customers across multiple states [8]

Core Insights - SouthState Bank has expanded its workforce by hiring over 20 experienced bankers to enhance service capabilities across nine states [2][26] - The bank emphasizes the importance of team members as its greatest asset, highlighting the collaborative spirit of the new hires [2] - Several promotions within the bank have been announced, including key positions in Private Wealth and municipal underwriting [3] New Hires - The new hires include professionals with diverse backgrounds and extensive experience in various banking sectors, enhancing SouthState's service offerings [2][5][6] - Notable new hires include Steve Stagg, Blake Freeman, and Frank Cupersmith, each bringing significant industry experience [4][5][6] Promotions - Key promotions include David Kirkpatrick as managing director of Private Wealth and Jason Ware as head of municipal underwriting [3] - Additional promotions in South Carolina include Trent Drafts and Scott Ferguson to commercial market executive roles [3] Market Expansion - SouthState is establishing a presence in Nashville, Tennessee, as part of its strategic expansion efforts [29] - The bank aims to leverage the expertise of its new team in Nashville to enhance its market position in Tennessee [29] Company Overview - SouthState Bank Corporation is headquartered in Winter Haven, Florida, and serves over 1.5 million customers across multiple states [26] - The bank offers a range of financial services, including consumer, commercial, mortgage, and wealth management solutions [26]

Core Viewpoint - SouthState (SSB) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based solely on a company's changing earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [1][2]. - Changes in future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements, influenced by institutional investors [4]. SouthState's Earnings Outlook - The recent upgrade for SouthState signifies an improvement in the company's underlying business, which is expected to drive stock appreciation [5]. - Analysts have raised their earnings estimates for SouthState, with the Zacks Consensus Estimate increasing by 6.6% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong track record of performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - SouthState's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Financial Performance - Consolidated net income for Q2 2025 was $215.2 million, a 62.6% increase from $132.4 million in Q2 2024, with diluted EPS rising to $2.11 from $1.73[241]. - Interest income increased by $309.4 million, driven by a $14.3 billion rise in average loan balances and a 51 basis point increase in yield[241]. - The efficiency ratio improved to 52.7% in Q2 2025 from 57.0% in Q2 2024, attributed to a 56.2% increase in tax-equivalent net interest income and noninterest income[242]. - Non-tax equivalent net interest income rose by $227.7 million, or 65.0%, to $577.9 million in Q2 2025 compared to $350.3 million in Q2 2024[247]. - The return on average assets increased to 1.34% in Q2 2025 from 1.17% in Q2 2024, primarily due to a $82.9 million increase in net income[244]. - For the three months ended June 30, 2025, net income increased by 62.6%, primarily due to higher net interest income from the acquisition of Independent[249]. - The return on average tangible equity (non-GAAP) for Q2 2025 was 18.17%, compared to 15.49% in Q2 2024[367]. - Net income (GAAP) for the first half of 2025 was $304.3 million, up from $247.4 million in the same period of 2024[367]. Acquisition and Growth Strategy - 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[224]. - SouthState's growth strategy focuses on organic growth supplemented by selective acquisitions of financial institutions or branches[217]. - The company assumed $12.0 billion in interest-bearing deposits from the Independent acquisition in Q1 2025, contributing to the increase in average balances[241]. - Total shareholder's equity increased by $2.9 billion, or 49.4%, primarily due to the Independent acquisition[272]. - The merger with Independent is expected to yield cost savings and revenue synergies, although there are risks related to integration and realization of these benefits[368]. Credit Losses and Allowance - The allowance for credit losses (ACL) reflects management's estimate of uncollectible loans, with significant judgments influenced by macroeconomic forecasts[235]. - The Company recorded a total provision for credit losses of $7.5 million for the second quarter of 2025, with $5.1 million for funded loans and $2.4 million for unfunded commitments[301]. - As of June 30, 2025, the balance of the Allowance for Credit Losses (ACL) was $621.0 million, representing 1.31% of total loans, a decrease of $2.7 million from the previous quarter[303]. - The Company experienced net charge-offs to total average loans of 0.06% and 0.05% for the three and six months ended June 30, 2025, respectively, compared to 0.05% and 0.04% for the same periods in 2024[305]. - The expected credit losses allocation as of June 30, 2025, included $165.2 million for Non-Owner-Occupied Commercial Real Estate, which accounted for 27.9% of total expected credit losses[307]. Deposits and Liquidity - Total deposits reached $53.7 billion at June 30, 2025, an increase of $15.6 billion from $38.1 billion at December 31, 2024, mainly due to deposits acquired in the Independent acquisition[334]. - Interest-bearing deposits rose by $12.1 billion to $40.0 billion at June 30, 2025, compared to $27.9 billion at December 31, 2024, primarily due to the acquisition of Independent[317]. - Noninterest-bearing deposits rose to $13.7 billion at June 30, 2025, an increase of $3.5 billion from $10.2 billion at December 31, 2024, with $3.9 billion attributed to the Independent acquisition[319]. - The coverage ratio for uninsured deposits was 100.4%, indicating strong liquidity management[341]. - The total primary sources of liquidity available to the Company amounted to $21.563 billion, including $10.159 billion at the Federal Reserve Bank's discount window[341]. Investment Securities - The total investment securities amounted to $8.43 billion, with a fair value of $7.09 billion as of June 30, 2025[276]. - Approximately 86.7% of the investment portfolio, based on amortized cost, is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities[283]. - The investment securities portfolio increased by $1.6 billion in the six months ended June 30, 2025, primarily due to the Independent acquisition and new purchases[332]. - The Company recorded a net loss of $228.8 million on the sales of investment securities during the first quarter of 2025[262]. - The Company recorded a gain of $229.3 million on the sale of bank properties from a sale-leaseback transaction completed in February 2025[262]. Regulatory and Economic Environment - The company is subject to regulatory changes, including a new CFPB rule requiring data providers to make consumer financial data available to authorized third parties by April 1, 2027[229]. - The Company continues to face downside risks due to persistent inflation, high interest rates, and tightening credit conditions, which have moderated optimism in the economic forecast[301]. - The Company is monitoring economic volatility risks, including inflation and interest rate changes, which could impact profitability[368]. Noninterest Income and Expenses - Noninterest income increased by $11.6 million, or 15.4%, during the second quarter of 2025 compared to the same period in 2024, totaling $86.8 million[260]. - Noninterest expense increased by $126.3 million, or 50.8%, in Q2 2025 compared to Q2 2024, totaling $375.1 million[263]. - Salaries and employee benefits rose by $48.7 million, or 32.2%, in Q2 2025, primarily due to the addition of Independent employees[263]. - Occupancy expense surged by $19.1 million, or 84.9%, in Q2 2025, driven by increased lease and maintenance costs[263].

Core Insights - SouthState Corporation (SSB) reported second-quarter 2025 adjusted earnings per share of $2.30, exceeding the Zacks Consensus Estimate of $2.00, and reflecting a 28.5% increase year over year [1][7] - Net income attributable to common shareholders was $215.2 million, up 62.6% year over year [1] Revenue and Expenses - Total revenues for the quarter reached $664.8 million, marking a 56.2% increase year over year and surpassing the Zacks Consensus Estimate by 3.9% [2] - Net interest income (NII) was $577.9 million, up 65% from the prior-year quarter, with the net interest margin rising to 4.02% from 3.44% [2] - Non-interest income was $86.8 million, reflecting a 15.4% increase year over year, driven by most components except for other income and net securities losses [2] - Non-interest expenses surged by 50.8% to $375.1 million, primarily due to merger, branch consolidation, severance-related, and other restructuring expenses [3] Loans and Deposits - As of June 30, 2025, net loans stood at $46.6 billion, up 1.1% from the prior quarter, while total deposits were $53.7 billion, showing a marginal increase [4] Asset Quality - Provision for credit losses was $7.5 million, a significant increase of 92.9% from the prior-year quarter [5] - Allowance for credit losses as a percentage of loans was 1.31%, down 11 basis points year over year [5] - The ratio of annualized net charge-offs to total average loans was 0.21%, up from 0.05% in the year-ago quarter [5] - Non-performing loans to total loans were 0.63%, an increase of 4 basis points from the prior-year quarter [5] Capital Ratios and Profitability Ratios - As of June 30, 2025, the Tier I leverage ratio was 9.2%, down from 9.7% in the year-ago quarter [6] - The Tier 1 common equity ratio decreased to 11.2% from 12.1% in the prior-year quarter [6] - The annualized return on average assets was 1.34%, up from 1.17% in the year-ago period [6] - Return on average common equity was 9.93%, compared to 9.58% in the prior-year quarter [6] Capital Distribution - The company increased its quarterly cash dividend on common stock by 11.1% to 60 cents per share, payable on August 15, 2025, to shareholders of record as of August 8, 2025 [8] Overall Assessment - SSB ended the second quarter positively, with both top and bottom lines rising year over year, supported by increasing NII and non-interest income [9] - Rising loan and deposit balances are encouraging, although high expenses from inorganic expansion efforts may pressure the bottom line [9]

Financial Data and Key Metrics Changes - The bank's earnings accelerated as forecasted, with a significant increase in loan production from approximately $2 billion in Q1 to over $3 billion in Q2, representing a 57% increase [6][11] - Adjusted for merger costs, the return on assets was 1.45% and return on tangible common equity was nearly 20% [9][11] - Net interest income grew by $33 million over Q1, with a cost of deposits at 1.84%, a five basis point improvement from Q1 [12][13] - Non-interest income remained stable at $87 million, with an efficiency ratio of 49.1% [14][15] - Tangible book value per share increased by 8.5% year-over-year to $51.96 [16] Business Line Data and Key Metrics Changes - Loan production in Texas and Colorado increased by 35%, with non-PCD loans growing by about $200 million [6][9] - The bank's retail bank ranks in the top quartile of J.D. Power's Net Promoter Score, indicating a superior customer experience [10] Market Data and Key Metrics Changes - The bank is now established in the fastest-growing markets in the country, specifically Texas and Colorado [8][9] - The loan pipeline increased significantly, with a 45% increase in Q1 and an additional 31% in Q2 [30] Company Strategy and Development Direction - The company aims to build a strong presence in the best geographical areas with a focus on organic growth and shareholder value [7][8] - The management is focused on leveraging the successful integration of Independent Financial to enhance growth opportunities [11][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving yield curve and its potential to accelerate organic growth [11] - The bank's capital position is strong, allowing for an 11% increase in dividends and potential share repurchases [16][85] Other Important Information - The bank's asset quality remains stable, with low credit costs and strong loss absorption capacity [15][16] - The management highlighted the importance of recruiting talent, having added 47 revenue producers in Q2 [50][66] Q&A Session Summary Question: Outlook for margin and deposit costs - Management indicated strong net interest margin performance and expects deposit costs to remain manageable despite growth [20][34] Question: Loan growth and paydowns - Paydowns returned to normal levels in Q2, and management expects continued loan origination funding [36] Question: Interest rate sensitivity - The bank expects a one to two basis point improvement in overall margin for every 25 basis point cut in rates [40] Question: Regulatory environment and growth - Management believes they have time to build infrastructure before facing regulatory changes, with a focus on organic growth [54] Question: Expense outlook and revenue synergies - Management confirmed no change to prior expense guidance and noted positive retention of key talent post-merger [58][65]

Financial Data and Key Metrics Changes - The bank's earnings accelerated as forecasted, with a significant increase in loan production from approximately $2 billion in Q1 to over $3 billion in Q2, representing a 57% increase [5] - Adjusted for merger costs, the return on assets was 1.45% and return on tangible common equity was nearly 20% in Q2 [7][9] - The tangible book value per share increased by 8.5% year-over-year to $51.96, despite the dilutive impacts of the merger [14] Business Line Data and Key Metrics Changes - Loan production in Texas and Colorado increased by 35%, with non-PCD loans growing by about $200 million [5] - Net interest income grew by $33 million over Q1, with a cost of deposits improving to 1.84%, a five basis point improvement [10] - Non-interest income remained stable at $87 million, with improvements in correspondent business offset by a slight decline in mortgage revenue [12] Market Data and Key Metrics Changes - The loan pipeline increased significantly, with a 45% increase in Q1 and an additional 31% in Q2, indicating strong momentum in loan origination [29] - The bank's asset size reached $66 billion, positioning it well for investments in technology and risk management [6] Company Strategy and Development Direction - The company aims to build a strong presence in the fastest-growing markets by focusing on Texas and Colorado, which are seen as key geographies for growth [6] - The management emphasized the importance of organic growth and the potential for share repurchases, given the current capital position [14][85] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving yield curve and its potential to accelerate organic growth [9] - The outlook for net interest margin (NIM) is expected to remain between 3.8% and 3.9% for the remainder of the year, with potential for improvement in 2026 [24] Other Important Information - The board approved an 11% increase in dividends, reflecting confidence in earnings growth and capital levels [9][84] - The integration of Independent Financial was completed successfully, allowing the company to focus on growth opportunities [6] Q&A Session Summary Question: Outlook for margin and potential for expansion - Management indicated that the net interest margin was strong at 4.02% and expects it to remain stable with no significant changes to guidance [20][22] Question: Loan growth and paydowns - Paydowns returned to normal levels in Q2, and the company is funding around 60% of loan production, indicating potential for future growth [36] Question: Interest rate sensitivity and NIM guidance - Management expects a 1-2 basis point improvement in overall margin for every 25 basis point cut, with a focus on legacy loan repricing [39][41] Question: Capital allocation and buyback opportunities - The company is considering share repurchases due to its strong capital position and believes in the potential for consistent dividend increases [84][86]

Financial Performance - SouthState Corporation reported diluted Earnings per Share (EPS) of $2.11, with an adjusted diluted EPS (non-GAAP) of $2.30[32] - Pre-Provision Net Revenue (PPNR) reached $314.1 million[32] - Year-over-year PPNR per share growth (non-GAAP) was 29%[32] - Net interest margin, tax equivalent, increased to 4.02%, up 0.17% from the prior quarter[32] Balance Sheet & Loan Portfolio - Loans increased by $501 million, representing a 4% annualized growth[32] - Deposits increased by $359 million, representing a 3% annualized growth[32] - Total loans amounted to $47.3 billion, with investor CRE comprising 36% of the portfolio[44] - Noninterest-bearing checking deposits totaled $13.7 billion[48] Asset Quality & Capital - Net charge-offs to loans stood at 0.06%[54] - Tangible Common Equity (TCE) ratio was 8.5%[63] - Total investment portfolio was $8.1 billion[78] Market & Geographic Expansion - SouthState is ranked as the 5 largest regional bank in the South[7] - The company operates in 12 of the 15 fastest-growing U S MSAs[7] - Top states for net domestic migration include Florida with 872,722 and Texas with 747,730[23]

Core Insights - SouthState (SSB) reported a revenue of $664.77 million for the quarter ended June 2025, marking a 56.2% increase year-over-year and exceeding the Zacks Consensus Estimate by 3.96% [1] - The earnings per share (EPS) for the quarter was $2.30, up from $1.79 in the same quarter last year, representing a 15% surprise over the consensus EPS estimate of $2.00 [1] Financial Performance Metrics - Net charge-offs as a percentage of average loans were 0.2%, higher than the average estimate of 0.1% [4] - The efficiency ratio stood at 52.8%, better than the average estimate of 55.6% [4] - Net interest margin (non-tax equivalent) was reported at 4%, exceeding the average estimate of 3.8% [4] - Average balance of total interest-earning assets was $57.71 billion, slightly below the average estimate of $57.91 billion [4] - Total nonperforming assets amounted to $323.84 million, higher than the average estimate of $277.62 million [4] - Net interest income (tax equivalent, non-GAAP) was $578.62 million, surpassing the average estimate of $552.04 million [4] - Total noninterest income was $86.82 million, slightly below the average estimate of $87.97 million [4] - Net interest income was reported at $577.95 million, compared to the average estimate of $551.17 million [4] - Mortgage banking income was $5.94 million, lower than the average estimate of $8.56 million [4] - Fees on deposit accounts reached $37.87 million, exceeding the average estimate of $36.44 million [4] - Trust and investment services income was $14.42 million, slightly above the average estimate of $14 million [4] - Total correspondent banking and capital market income was $13.77 million, higher than the average estimate of $10.99 million [4] Stock Performance - SouthState shares have returned +9.4% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]