SouthState Q1 Earnings & Revenues Top Estimates, Expenses Rise

Core Viewpoint - SouthState Corporation reported strong first-quarter 2025 results with adjusted earnings per share of $2.15, exceeding estimates and reflecting a 36.1% year-over-year increase, despite a decline in net income attributable to common shareholders [1][9]. Group 1: Financial Performance - Total revenues for the quarter reached $630.6 million, marking a 51.8% increase year over year and surpassing estimates by 2.4% [2]. - Net interest income (NII) was $544.5 million, up 58.3% from the previous year, with the net interest margin rising to 3.85% from 3.41% [2]. - Non-interest income increased to $86.1 million, a 20.3% rise from the prior year, driven by most components except for other income and net securities losses [2]. Group 2: Expenses and Efficiency - Non-interest expenses surged to $408.8 million from $249.3 million in the year-ago quarter, primarily due to merger-related and restructuring costs [3]. - The efficiency ratio increased to 60.97% from 58.48% year over year, indicating a decline in profitability [3]. Group 3: Loans and Deposits - As of March 31, 2025, net loans totaled $46.1 billion, a 37.9% increase from the prior quarter, while total deposits rose to $53.3 billion, up 40.1% sequentially [4]. Group 4: Asset Quality - Provision for credit losses was $100.6 million, significantly up from $12.7 million in the prior-year quarter [5]. - The allowance for credit losses as a percentage of loans was 1.33%, down 11 basis points year over year, while the ratio of annualized net charge-offs to total average loans increased to 0.38% from 0.03% [5]. Group 5: Capital Ratios and Profitability - As of March 31, 2025, the Tier I leverage ratio was 8.9%, down from 9.6% in the prior year, and the Tier 1 common equity ratio decreased to 11% from 11.9% [6]. - The annualized return on average assets was 0.56%, down from 1.03% in the previous year, and return on average common equity was 4.29%, compared to 8.36% in the prior-year quarter [6]. Group 6: Capital Distribution - The company declared a quarterly cash dividend of 54 cents per share, payable on May 16, 2025, to shareholders of record as of May 9, 2025 [7]. Group 7: Recent Developments - SouthState completed the acquisition of Independent Bank Group, Inc. on January 1, 2025, and executed a sale-leaseback transaction resulting in a gain of $229 million, net of transaction costs [8].