Breaking Down SouthState Corporation (SSB) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and looking for a clear picture of a bank's financial stability? Have you considered how factors like net income of $144 million and a 9% increase in PPNR might influence your investment decisions? With SouthState's Q4 2024 results revealing steady growth in loans and deposits, alongside a notable uptick in net interest margin and fees, it's crucial to understand the underlying financial metrics. Dive in to explore key insights that can help you assess the financial health of SouthState Corporation (SSB) and make informed choices.

SouthState Corporation (SSB) Revenue Analysis

SouthState Corporation's financial health is crucial for investors to assess its stability and growth potential. A key aspect of this assessment involves understanding the corporation's revenue streams, their composition, and their performance over time.

SouthState Corporation (SSB) reported total revenues of $2.04 billion for the year 2024. This figure reflects the sum of net interest income and noninterest income.

The primary revenue sources for SouthState Corporation can be broken down as follows:

• Net Interest Income: Represents the difference between the revenue generated from interest-earning assets (like loans) and the expense incurred from interest-bearing liabilities (like deposits).
• Noninterest Income: Includes various fees, service charges, and other income sources apart from interest.

For the year 2024:

• Net interest income was $1.5 billion.
• Noninterest income totaled $542.8 million.

Here is a breakdown of the changes in revenue streams:

• Net Interest Income: Decreased by $222.4 million for the year 2024 compared to the previous year.
• Noninterest Income: Increased by $17.5 million for the year 2024 compared to the previous year.

In summary, SouthState Corporation's revenue streams can be viewed in the following table:

Investors can further explore the composition and trends related to SouthState Corporation by reading: Exploring SouthState Corporation (SSB) Investor Profile: Who’s Buying and Why?

SouthState Corporation (SSB) Profitability Metrics

Assessing SouthState Corporation's (SSB) financial health requires a close look at its profitability metrics. This analysis includes gross profit, operating profit, and net profit margins, as well as trends in profitability over time. Additionally, comparing these ratios with industry averages and analyzing operational efficiency provides a comprehensive view.

For the fourth quarter of 2024, SouthState reported a net income of $144.2 million. The bank's performance also showed a 9% increase in pre-provision net revenue (PPNR) over the third quarter, which was supported by 6% revenue growth.

Key profitability metrics for SouthState Corporation include:

• Net Interest Income: $370 million
• Core Net Interest Income (excluding loan accretion): $367 million
• Net Interest Margin (NIM): 3.48%
• Return on Average Assets (ROAA): 1.23% (Adjusted ROAA: 1.27%)
• Return on Average Common Equity: 9.7%
• Return on Average Tangible Common Equity: 15.1% (Adjusted: 15.6%)
• Efficiency Ratio: 56% (Adjusted Efficiency Ratio: 54%)

Here's a summary of SouthState's financial performance metrics for the third quarter of 2024:

• Net Income: $143.2 million (Adjusted Net Income: $145.7 million)
• Return on Average Assets (ROAA): 1.25% (Adjusted ROAA: 1.27%)
• Return on Average Common Equity: 9.9%
• Return on Average Tangible Common Equity: 15.6% (Adjusted: 15.9%)
• Net Interest Income: $351 million
• Net Interest Margin (NIM): 3.40%
• Efficiency Ratio: 57% (Adjusted: 56%)

The first quarter of 2024 saw the following results:

• Net Income: $115.1 million (Adjusted Net Income: $121.3 million)
• Return on Average Assets (ROAA): 1.03% (Adjusted ROAA: 1.08%)
• Return on Average Common Equity: 8.4%
• Return on Average Tangible Common Equity: 13.6% (Adjusted: 14.4%)
• Net Interest Income: $344 million
• Net Interest Margin (NIM): 3.41%

SouthState's revenue for the quarter ending December 31, 2024, was $629 million, reflecting an 8.34% increase year-over-year. The annual revenue for 2024 totaled $2.444 billion, a 9.52% increase from 2023. In 2023, the annual revenue was $2.231 billion, marking a 30.77% increase from 2022. The net profit margin for the quarter ending September 30, 2024, was 20.75%. The average net profit margin for 2023 was 25.62%, a 13.56% decrease from 2022.

Here is a table summarizing SouthState's key profitability metrics over the recent years:

For more insights into SouthState Corporation, explore Exploring SouthState Corporation (SSB) Investor Profile: Who’s Buying and Why?

SouthState Corporation (SSB) Debt vs. Equity Structure

Understanding SouthState Corporation's (SSB) financial health requires a close examination of its debt and equity structure. This involves analyzing the levels of debt the company holds, comparing its debt-to-equity ratio against industry benchmarks, and understanding recent financing activities.

As of the fiscal year 2024, SouthState Corporation's financial statements provide key insights into its debt profile. While specific long-term and short-term debt figures fluctuate, it is essential to consider them in the context of the company’s overall asset size and operational scale. Investors often scrutinize these figures to assess the company's leverage and ability to meet its obligations.

The debt-to-equity ratio is a critical metric for evaluating SSB's financial leverage. This ratio indicates the proportion of debt and equity used to finance the company's assets. A lower ratio generally suggests a more conservative financial structure, while a higher ratio may indicate greater financial risk. Comparing SSB’s debt-to-equity ratio with those of its peers in the banking industry provides valuable context. Here's what to consider:

• Industry Benchmarks: Compare SSB’s ratio against the average debt-to-equity ratios of similar-sized banks.
• Historical Trends: Analyze how the ratio has changed over the past few years to identify any trends in SSB’s financing strategy.

Recent activities such as debt issuances, credit ratings, and refinancing play a significant role in shaping SouthState Corporation’s debt profile. Credit ratings, assigned by agencies like Moody's and Standard & Poor's, reflect the creditworthiness of the company. Recent ratings and any changes to them can influence investor confidence and borrowing costs.

Balancing debt and equity is crucial for sustainable growth. SouthState strategically manages its capital structure to optimize financial flexibility and shareholder value. Here’s a breakdown of factors influencing this balance:

• Growth Opportunities: Debt financing might be preferred for funding significant expansion projects or acquisitions.
• Market Conditions: Favorable interest rates can make debt financing more attractive.
• Regulatory Requirements: Banks must adhere to specific capital adequacy ratios, influencing their mix of debt and equity.

Understanding how SouthState Corporation (SSB) navigates these elements provides critical insights for investors. For further information on investor behavior and stock performance, check out: Exploring SouthState Corporation (SSB) Investor Profile: Who’s Buying and Why?

SouthState Corporation (SSB) Liquidity and Solvency

Analyzing SouthState Corporation's financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations.

Key metrics and trends provide insights into SSB's financial stability. Understanding these elements is crucial for investors aiming to gauge the company's risk profile and long-term viability. For further insights into the company’s guiding principles, review Mission Statement, Vision, & Core Values of SouthState Corporation (SSB).

Assessing SouthState Corporation's Liquidity:

Liquidity ratios offer a snapshot of SouthState Corporation's capacity to cover its immediate liabilities. Two critical ratios for this assessment are the current ratio and the quick ratio.

• Current Ratio: This ratio measures a company's ability to pay off its current liabilities with its current assets. A higher current ratio generally indicates greater liquidity.
• Quick Ratio: Also known as the acid-test ratio, the quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. This ratio excludes inventories from current assets, providing a more conservative measure of liquidity.

Analysis of working capital trends is also vital. Working capital, calculated as current assets minus current liabilities, represents the funds available for a company's day-to-day operations. Monitoring changes in working capital can reveal whether a company's liquidity position is improving or deteriorating.

Cash flow statements provide a comprehensive view of all cash inflows and outflows. Examining the trends in operating, investing, and financing cash flows can highlight potential liquidity concerns or strengths.

• Operating Cash Flow: Cash generated from the company's core business activities.
• Investing Cash Flow: Cash used for investments in assets like property, plant, and equipment.
• Financing Cash Flow: Cash from debt, equity, and dividends.

Here is an overview of what to look for in cash flow statements:

• Positive Operating Cash Flow: Indicates the company is generating enough cash from its operations to cover its expenses.
• Negative Investing Cash Flow: Suggests the company is investing in its future growth.
• Financing Activities: A mix of debt and equity can indicate how the company is funding its operations and growth.

SouthState Corporation (SSB) Valuation Analysis

Determining whether SouthState Corporation (SSB) is overvalued or undervalued requires a multifaceted approach, considering various financial ratios, stock performance, and analyst opinions. Key metrics include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, alongside stock price trends, dividend yields, and analyst ratings.

As of April 2025, up-to-date financial data for SouthState Corporation is essential for an accurate valuation assessment. Here's how these elements typically come into play:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of SouthState Corporation's earnings. A higher P/E ratio might suggest overvaluation if it's significantly above the industry average or the company's historical P/E.
• Price-to-Book (P/B) Ratio: The P/B ratio compares SouthState Corporation's market capitalization to its book value of equity. It can help investors determine whether the stock is trading at a premium to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio assesses the company's total value (debt and equity) relative to its earnings before interest, taxes, depreciation, and amortization. It's useful for comparing companies with different capital structures.

To illustrate, let’s consider some hypothetical, yet realistic, figures based on the 2024 fiscal year:

These values would need to be benchmarked against industry peers and SouthState Corporation's historical averages to provide a meaningful valuation assessment. For instance, a P/E ratio of 14.5x might be considered fair if the average P/E for regional banks is similar, but it could signal overvaluation if the historical average for SouthState Corporation has been closer to 10x.

Stock price trends also provide valuable insights. A consistent upward trend over the past 12 months could reflect positive investor sentiment, while a downward trend might indicate concerns about the company's performance or broader economic conditions. Consider that the stock price has increased by 15% over the last year, which could suggest growing investor confidence.

If applicable, dividend yield and payout ratios are also important. A stable or increasing dividend yield can attract income-seeking investors, while a sustainable payout ratio indicates the company's ability to maintain its dividend payments. For example, if SouthState Corporation has a dividend yield of 2.5% with a payout ratio of 40%, it suggests a reasonable return and the capacity to sustain those dividends.

Finally, analyst consensus plays a significant role. Ratings of 'buy,' 'hold,' or 'sell' reflect the overall sentiment of financial analysts who cover SouthState Corporation. A consensus of 'buy' ratings suggests that analysts believe the stock is undervalued, while 'hold' or 'sell' ratings might indicate the opposite. As an example, if 60% of analysts rate the stock as a 'buy,' it generally signals a positive outlook.

Keep in mind to further explore SouthState Corporation, consider reading: Exploring SouthState Corporation (SSB) Investor Profile: Who’s Buying and Why?

SouthState Corporation (SSB) Risk Factors

SouthState Corporation (SSB) faces a variety of risks that could significantly impact its financial health and strategic objectives. These risks can be broadly categorized into credit and market risks, operational risks, and strategic risks.

Credit and Market Risks:

• Interest Rate Risk: With a $13.4 billion loan portfolio sensitivity, SouthState faces potential earnings volatility due to fluctuations in interest rates.
• Credit Concentration: A significant 37.8% of SouthState's total loans are in commercial real estate, exposing the company to sector-specific economic vulnerabilities.
• Loan Default Risk: Non-performing loans account for 0.49% of total loans, indicating a potential for asset quality deterioration.

Operational Risks:

• Cybersecurity Threats: The company has an estimated $5.2 million annual risk exposure due to potential financial impacts from cybersecurity incidents.
• Technology Infrastructure: SouthState anticipates costs of around $18.3 million for technology infrastructure upgrades.
• Regulatory Compliance: The company incurs approximately $12.7 million annually in regulatory compliance expenses.

Strategic Risks:

• Market Consolidation: SouthState faces pressures from regional banking market consolidation.
• Digital Transformation: Investments in digital banking transformation amount to $22.5 million.
• Competition: The company operates in a competitive landscape with 15 direct regional banking competitors.

To delve deeper into SouthState Corporation, explore Exploring SouthState Corporation (SSB) Investor Profile: Who’s Buying and Why?

Internal and External Risks:

SouthState Corporation's (SSB) financial stability is influenced by both internal and external risk factors. These encompass industry competition, regulatory changes, and broader market conditions. The merger with Independent Bank Group introduces integration risks related to operations, management, and systems. Challenges include potential employee and customer attrition, operational disruptions, and inconsistencies in standards. External factors, such as economic conditions and market competition, could impede the realization of merger benefits. Increased indebtedness post-merger may strain financial flexibility, affecting the stock price and overall financial health.

Mitigation Strategies:

SouthState employs several strategies to mitigate risks and maintain financial stability:

• Risk Management Programs: Overseeing risk management policies to identify, measure, and mitigate major risks, including emerging threats.
• Compliance with Regulations: Monitoring compliance with BSA, Anti-Money Laundering (AML) laws, and OFAC requirements.
• Cybersecurity Measures: Implementing measures to address cybersecurity risks and protect data and systems.
• Business Continuity Planning: Developing business continuity programs to address outages, incidents, and disaster recovery.
• Strategic Planning: Pursuing strategic plans that depend on growth goals and adapting to changing market conditions.

Financial Risk Metrics:

Key financial risk metrics provide insights into SouthState's financial health and risk exposure:

Operational and Strategic Risks:

SouthState faces operational challenges such as higher costs in specific market segments compared to national competitors. The cost-to-income ratio is 62.3%, compared to the industry average of 58.5%. Operating expenses total $1.2 billion, higher than the industry average of $945 million.

The company is actively investing in technology and digital banking services. Compliance costs for regional banks have increased, with projected additional expenses of $18.3 million for SouthState in 2024. Key compliance areas include regulatory reporting, risk management, and anti-money laundering.

Statements from Earnings Reports:

According to the Q4 2024 earnings report, SouthState finished strong with steady growth in loans and deposits. Net income was reported at $144 million, with a 9% increase in PPNR (pre-provision net revenue) over the third quarter, driven by 6% revenue growth.

Additional Factors:

• Economic Volatility: Risks related to economic volatility, including inflation and potential deterioration in credit markets.
• Strategic Plans: Risks related to the ability of the company to pursue its strategic plans and growth goals.
• Merger Integration: Challenges and risks associated with the merger and integration of Independent Bank Group.
• Regulatory Landscape: Impact of governmental policies and regulatory changes on the company's business and financial results.

SouthState Corporation (SSB) Growth Opportunities

SouthState Corporation (SSB) demonstrates significant potential for future growth through strategic initiatives and market positioning. Breaking Down SouthState Corporation (SSB) Financial Health: Key Insights for Investors

Key growth drivers for SouthState Corporation (SSB) include:

• Total loan portfolio: $34.2 billion as of Q4 2023.
• Net interest income: $798.4 million for fiscal year 2023.
• Commercial banking segment expansion.

SouthState's revenue for the year 2024 was $1.70 billion, representing a 4.69% growth. In the quarter ending December 31, 2024, the revenue was $443.95 million, with an 8.33% growth.

Market expansion strategies include:

• Southeast United States: Projected growth of 7.2% with an investment of $125 million.
• Florida Market: Projected growth of 9.5% with an investment of $87 million.
• Digital Banking: Projected growth of 12.3% with an investment of $65 million.

Strategic initiatives by SouthState Corporation (SSB):

• Digital transformation investment: $45 million.
• Technology infrastructure upgrade.
• Enhanced digital banking platforms.

SouthState is set to release its Q4 2024 earnings on January 24, 2025. The consensus estimate for Q4 2024 revenue is $434.64 million, and the earnings are expected to be $1.63 per share. The full year 2024's revenue is expected to be $1.70 billion and the earnings are expected to be $6.74 per share. Revenue estimates for SouthState Corp have declined from $1.71 billion to $1.70 billion for the full year 2024 and increased from $2.42 billion to $2.45 billion for 2025 over the past 90 days. Earnings estimates have increased from $6.40 per share to $6.74 per share for the full year 2024 and increased from $5.96 per share to $6.33 per share for 2025 over the past 90 days.

Analysts predict a promising outlook for 2025, even amidst potential industry-wide challenges. The acquisition of Independent Bank is expected to create synergies, enhance market reach, and generate cost savings, contributing to SouthState's growth in the coming years.

SouthState Corporation completed its acquisition of Independent Bank Group, Inc. on January 1, 2025. The combined company has expanded its presence in Texas and Colorado, increasing its asset size to approximately $65 billion. As a result of the merger, Independent Bank Group, Inc. will cease to exist as a separate legal entity, leading to the suspension of its common stock from NASDAQ and the deregistration of its securities.

The merger combines SouthState's strength in the southeastern U.S. with IBTX's presence in Texas, creating a broader footprint and enhancing customer access to banking services.

SouthState's acquisition of Independent Bank, strong service reputation, and solid execution in 2024 bode well for 2025, despite potential sector-wide loan growth and rate challenges.

SouthState plans to support underserved communities with an $8.3 billion plan over five years (2025-2029) across eight states, including Florida, Texas, the Carolinas, Georgia, Colorado, Alabama, and Virginia.

Analysts forecast SouthState to grow earnings and revenue by 24.6% and 18.6% per annum respectively. EPS is expected to grow by 14% per annum. Return on equity is forecast to be 11.1% in 3 years.

The average analyst rating for SouthState stock from 10 stock analysts is 'Strong Buy', indicating expectations of very strong performance and significant outperformance of the market in the near future.

Citigroup upgraded their outlook for SouthState from Neutral to Buy on January 27, 2025. As of December 23, 2024, the average one-year price target for SouthState is $121.83/share. The forecasts range from a low of $107.06 to a high of $141.75.

SouthState faces competition from national banks, super-regional banks, smaller community banks, and non-traditional internet-based banks. They compete for deposits and loans with commercial banks and credit unions, as well as other financial intermediaries and investment alternatives.

Key growth metrics and future projections can be summarized as follows: