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].

Financial Data and Key Metrics Changes - In 2024, the company achieved a record annual net income of $206 million, a 24% increase from the previous year, with a return on equity of 16.2%, up from 14.7% in 2023 [19][11] - The commercial portfolio grew by 18%, reaching $10 billion, while deposits increased by 23% for year-end closing balances and 33% in average balances for the year [7][8] - The net interest income for the year reached $259 million, an 11% increase from the prior year, with a stable net interest margin of 2.47% [34][10] Business Line Data and Key Metrics Changes - The credit portfolio stood at approximately $11.2 billion, reflecting an 18% increase year-over-year, driven by a loan growth of $1.2 billion or 16% [24][22] - Fee income reached unprecedented levels, growing by 37% compared to the previous year, with letters of credit fees totaling $26.5 million for the year, up 24% year-over-year [35][36] Market Data and Key Metrics Changes - The company noted strong growth in Brazil, the Dominican Republic, and Guatemala, indicating robust expansion and diversification in these markets [7] - The deposit base closed at $5.4 billion at year-end, representing 54% of total financial liabilities, with significant increases from corporate clients [26] Company Strategy and Development Direction - The company is currently in the second phase of its five-year strategic plan, focusing on expanding its product offerings and deploying technological platforms [15][17] - The trade finance platform is 56% complete and expected to launch in the second half of the year, aimed at enhancing transaction processing capabilities [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in adapting to changes in the trade environment, particularly regarding the implications of U.S. foreign policy on Latin America [44][45] - Projections for 2025 include a commercial portfolio growth of 10% to 12% and average deposits expected to increase by 15% to 17% [50] Other Important Information - The company maintained a strong capital ratio with a tier one capital ratio of 15.5%, well within its defined target [10] - The board approved an increase in the quarterly dividend from $0.50 to $0.625 per share, reflecting confidence in the company's earnings trajectory [31] Q&A Session Summary Question: Can you comment on NIM contraction estimate for 2025? - Management indicated that tighter lending spreads and competitive market conditions are contributing factors, with expectations of continued pressure [60][62] Question: What are the potential drivers for the loan structuring syndication business? - Management noted a strong pipeline and historical growth in syndication fees, driven by project finance and enhanced structuring capabilities [63][64] Question: How do you see the current tariffs affecting the company's outlook? - Management expressed confidence in the resilience of the Mexican portfolio, with stress tests indicating low leverage among key clients [70][71] Question: What is the expected target for provisions in 2025? - Management projected reserves for 2025 to be in the $17 to $20 million range, similar to 2024 levels [95] Question: What countries are expected to lead portfolio growth in 2025? - Management indicated balanced growth across countries, with a focus on Mexico and potential opportunities in Central America and Argentina [92][94]