Financial Data and Key Metrics Changes - For the fourth quarter, the company reported net income of $21 million, an increase of $16.1 million or 327.2% compared to the previous quarter [9] - Diluted earnings per share for the fourth quarter were $0.70, an increase of $0.54 per share linked quarter [9] - For the full year 2025, net income was $69.2 million, a decrease of $19.3 million or 21.8% compared to 2024 [10] - The net interest margin expanded to 2.98%, an increase of four basis points from the previous quarter [16] Business Line Data and Key Metrics Changes - Loans as of December 31 totaled $4.18 billion, a linked-quarter increase of $52.7 million or 1.1% [10] - New loan production for the fourth quarter was approximately $327 million, down from $500 million in the third quarter [4] - Non-performing assets increased by $2.6 million during the fourth quarter but remained low at 0.45% of total assets [7] Market Data and Key Metrics Changes - The Texas economy is anticipated to grow at a faster pace than the overall projected U.S. growth rate [8] - The loan pipeline rebounded to just over $2 billion after dipping to $1.5 billion mid-quarter [6] Company Strategy and Development Direction - The company is focused on restructuring its available-for-sale securities to enhance future net interest income and provide balance sheet flexibility [3] - There is an ongoing initiative to build out a data platform to improve insights into raw data across multiple systems [24] - The company remains open to strategic acquisitions, particularly in key markets like Dallas and Houston [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the loan growth environment, despite challenges from payoffs and construction project maturities [41] - The company anticipates a positive margin outlook for the first quarter, with expectations for improvement as the year progresses [39] Other Important Information - The company plans to redeem $93 million of subordinated notes due in 2030, which is expected to positively impact net interest margin [15] - The efficiency ratio improved to 52.28% as of December 31, down from 52.99% [18] Q&A Session Summary Question: Details on the 7% expense growth budget for 2026 - Management indicated that the budget includes additional expenses related to software projects and hiring strategies [21][22] Question: Thoughts on M&A activity in Texas - Management confirmed that they are open to strategic acquisitions, particularly in areas where they have loan production offices [29][30] Question: Expectations for first quarter margin - Management expects a positive margin outlook, although it may be muted initially due to a one-time charge [36][39] Question: Loan growth expectations - Management anticipates loan production to exceed previous levels, despite headwinds from payoffs [41][42] Question: Buyback strategy moving forward - Management plans to be opportunistic with stock buybacks, balancing this with potential acquisitions [44] Question: Fee income outlook for 2026 - Management expects a significant increase in fee income, particularly from trust and brokerage services [47][48] Question: Future actions regarding the securities portfolio - Management will continue to be opportunistic with the securities portfolio, monitoring rates closely [50] Question: M&A opportunities related to market disruptions - Management is actively looking for opportunities arising from market disruptions, both in terms of clients and talent [51]

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]