South State (US:SSB) ZACKSยท2025-10-23 16:20Core Insights - SouthState Corporation (SSB) reported third-quarter 2025 adjusted earnings per share of $2.58, exceeding the Zacks Consensus Estimate of $2.20, and reflecting a 35.8% increase year-over-year [1][8] - The results were driven by a rise in net interest income (NII) and non-interest income, along with the successful integration of Independent Bank, acquired in January 2025 [1][10] - However, higher expenses and provisions posed challenges to overall performance [1][10] Revenues & Expenses - Total revenues for the quarter reached $698.8 million, marking a 63.9% year-over-year increase and surpassing the Zacks Consensus Estimate by 6.7% [3][8] - NII was reported at $599.7 million, up 70.6% from the previous year, with the net interest margin increasing to 4.06% from 3.40% [3][4] - Non-interest income amounted to $99.1 million, reflecting a 32.2% increase year-over-year [3] - Non-interest expenses rose significantly by 50.8% to $372.3 million, primarily due to merger and restructuring costs related to the Independent Bank acquisition [4][8] - The efficiency ratio improved to 49.88% from 56.58% in the prior-year quarter, indicating enhanced profitability [4] Loans & Deposits - As of September 30, 2025, net loans stood at $47.1 billion, showing a nearly 1% increase from the prior quarter [5] - Total deposits were $54.1 billion, with a slight sequential rise [5] Asset Quality - Provision for credit losses was $5.1 million, compared to provision benefits of $6.9 million in the prior-year quarter [6] - The allowance for credit losses as a percentage of loans decreased to 1.24%, down 15 basis points year-over-year [6] - The ratio of annualized net charge-offs to total average loans increased to 0.27%, up from 0.07% in the prior-year quarter [6] - Non-performing loans to total loans rose to 0.63%, an increase of seven basis points from the prior-year quarter [6] Capital Ratios & Profitability Ratios - As of September 30, 2025, the Tier I leverage ratio was 9.4%, down from 10% in the prior-year quarter [9] - The Tier 1 common equity ratio decreased to 11.5% from 12.4% in the prior-year quarter [9] - The annualized return on average assets was 1.49%, up from 1.25% in the year-ago period [9] - Return on average common equity improved to 11.04% compared to 9.91% in the prior-year quarter [9] Overall Assessment - SSB concluded the third quarter positively, with both top and bottom lines showing year-over-year growth [10] - The increase in NII and non-interest income is expected to support future financial performance [10] - The growth in loan and deposit balances is viewed as encouraging [10] - The acquisition of Independent Bank enhances SSB's presence in rapidly growing U.S. Metropolitan Statistical Areas [10] - However, elevated expenses from expansion efforts may impact profitability in the near term [10]