SouthState Corporation (SSB, Financial) has significantly improved its earnings profile through a series of strategic actions in the first quarter of the year. The company successfully completed its acquisition of IBTX in January, followed by a sale-leaseback transaction and a strategic shift in securities in March.
These initiatives have played a crucial role in enhancing SouthState's financial metrics, notably pushing its net interest margin to a robust 3.85%. This improvement is attributed to the advantageous restructuring of its securities portfolio and competitive deposit pricing strategies.
With these strategic maneuvers, SouthState has bolstered its profitability and fortified its balance sheet, positioning the company with substantial liquidity and strong capital reserves. This proactive approach ensures SouthState is well-prepared to navigate potential challenges in the economic environment.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for SouthState Corp (SSB, Financial) is $118.10 with a high estimate of $130.00 and a low estimate of $95.00. The average target implies an upside of 31.59% from the current price of $89.75. More detailed estimate data can be found on the SouthState Corp (SSB) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, SouthState Corp's (SSB, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SouthState Corp (SSB, Financial) in one year is $131.13, suggesting a upside of 46.11% from the current price of $89.75. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SouthState Corp (SSB) Summary page.
SSB Key Business Developments
Release Date: January 24, 2025
- Total Revenue Growth: 6% increase in total revenue for the quarter.
- Pre-Provision Net Revenue (PPNR): 9% increase for the quarter.
- Loan Growth: 4.2% annualized increase in loans for the quarter; 5% growth for the year.
- Deposit Growth: 4.5% annualized increase in deposits for the quarter; over 9% excluding brokered CDs; 3% growth for the year.
- Net Interest Margin (NIM): Improved by 8 basis points to 3.48%.
- Net Interest Income: Increased by $18 million over Q3.
- Noninterest Income: $80 million, up almost $6 million from Q3.
- Wealth Revenue: Record year with $45.5 million in revenue, up 15% over the prior year.
- Noninterest Expenses: Increased by $7 million to $250.7 million for the quarter.
- Efficiency Ratio: Improved by 140 basis points to 54.4%.
- Net Charge-Offs: $5 million for the quarter, 6 basis points annualized.
- Provision Expense: $6 million for the quarter.
- Allowance to Loans Ratio: Over 1.5%.
- Nonperforming Assets (NPAs): 63 basis points, up 6 basis points from year-end 2023.
- Common Equity Tier 1 (CET1) Ratio: 12.6% at year-end.
- Return on Average Assets (ROAA): 1.27% for Q4; 1.21% for the full year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SouthState Corp (SSB, Financial) experienced a 9% annualized growth in customer deposits, excluding brokered CDs, indicating strong deposit growth.
- The company reported a 9% increase in pre-provision net revenue (PPNR) for the quarter, driven by a 6% increase in total revenue.
- SouthState Corp (SSB) successfully completed a sale-leaseback transaction, unlocking approximately $225 million of off-balance sheet capital.
- The acquisition of Independent Financial was completed ahead of schedule, with regulatory approval received in December and closing on January 1.
- The company maintained a healthy capital position with a CET1 ratio of 12.6% and a full-year return on average assets (ROAA) of 1.21%.
Negative Points
- Noninterest expenses increased by $7 million in the quarter, reaching the high end of guidance at $250.7 million.
- The efficiency ratio, although improved, still stands at 54.4%, indicating room for further operational efficiency.
- Nonperforming assets (NPAs) increased to 63 basis points, up 6 basis points from the previous year-end levels.
- There was a noted increase in substandard loans, primarily due to interest rate impacts rather than expected losses.
- The company faces challenges in maintaining its net interest margin (NIM) amidst fluctuating interest rates and deposit costs.
