SouthState Q1 Earnings & Revenues Top Estimates, Expenses Rise

SouthState Corporation SSB reported first-quarter 2025 adjusted earnings per share of $2.15, which surpassed the Zacks Consensus Estimate of $1.43. The bottom line also increased 36.1% from the prior-year quarter. The results excluded certain notable items.

Results benefited from a rise in NII and non-interest income. However, higher expenses and provisions were headwinds.
Net income attributable to common shareholders was $89.1 million, down 22.6% year over year.

SouthState’s Revenues & Expenses

Total revenues in the quarter were $630.6 million, up 51.8% year over year. The top line outpaced the Zacks Consensus Estimate by 2.4%.

NII was $544.5 million, up 58.3% from the year-ago quarter. The net interest margin rose to 3.85% from 3.41% in the prior-year quarter.

Non-interest income was $86.1 million, up 20.3% from the prior year quarter. The rise was driven by almost all components except for other income and net securities losses.

Non-interest expenses increased significantly to $408.8 million from $249.3 million in the year-ago quarter. The rise was mainly due to an increase in the merger, branch consolidation, severance-related and other restructuring expenses.

The efficiency ratio (TE) increased to 60.97% from 58.48% in the year-ago quarter. A rise in the efficiency ratio indicates a decline in profitability.

SSB’s Loans & Deposits

As of March 31, 2025, net loans were $46.1 billion, up 37.9% from the prior-quarter end. Total deposits were $53.3 billion, which rose 40.1% sequentially.

SouthState’s Asset Quality

Provision for credit losses was $100.6 million, which increased significantly from 12.7 million in the prior-year quarter.

Allowance for credit losses as a percentage of loans was 1.33%, down 11 bps year over year. The ratio of annualized net charge-offs to total average loans was 0.38%, up from 0.03% in the year-ago quarter.

Non-performing loans to total loans were 0.58%, up 5 bps from the prior-year quarter.

SSB’s Capital Ratios & Profitability Ratios

As of March 31, 2025, the Tier I leverage ratio was 8.9%, down from 9.6% in the year-ago quarter. Tier 1 common equity ratio decreased to 11% from the prior-year quarter’s 11.9%.

At the end of the first quarter, the annualized return on average assets was 0.56%, down from the year-ago period’s 1.03%. 

Return on average common equity was 4.29% compared with 8.36% in the prior-year quarter.

SouthState’s Capital Distribution

The company declared a quarterly cash dividend on its common stock of 54 cents per share, payable on May 16, 2025, to shareholders of record as of May 9, 2025.

SSB’s Developments in Q1

SouthState closed the previously announced acquisition of Independent Bank Group, Inc. on Jan. 1, 2025.

SSB also executed a sale-leaseback transaction in the first quarter, resulting in a gain of $229 million, net of transaction costs. The company completed securities portfolio restructuring in the reported quarter with a total net loss of $229 million.

Our Take on SouthState

SSB ended the first quarter on a positive note, with the top and bottom lines rising year over year. Rising NII and non-interest income will continue to support its financials in the future. Rising loan and deposit balances look encouraging. However, high expenses due to inorganic expansion efforts will likely hamper its bottom line. 

SouthState Corporation Price, Consensus and EPS Surprise

SouthState Corporation price-consensus-eps-surprise-chart | SouthState Corporation Quote

Currently, SSB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Finance Stocks

Capital One’s COF first-quarter 2025 adjusted earnings of $4.06 per share outpaced the Zacks Consensus Estimate of $3.66. Also, the figure reflected a jump of 26% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The primary drivers for COF’s solid performance were an improvement in NII and robust card spend in the latter part of the quarter. The decline in provisions was another major tailwind.

Ally Financial’s ALLY first-quarter 2025 adjusted earnings of 58 cents per share handily surpassed the Zacks Consensus Estimate of 43 cents. Also, the bottom line reflected a jump of 41.5% from the year-ago quarter.

Results benefited from a rise in net finance revenues and lower provisions. However, lower other revenues, higher non-interest expenses, and a decline in net finance receivables and loans and deposits were the undermining factors.

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This article originally published on Zacks Investment Research (zacks.com).

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