Regional banking company SouthState (NYSE: SSB) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 52.5% year on year to $686.9 million. Its non-GAAP profit of $2.47 per share was 8.3% above analysts’ consensus estimates.

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StockStory’s Take

SouthState’s fourth quarter reflected the successful integration of its large-scale acquisition of Independent Bank, with management attributing both earnings and tangible book value growth to smooth operational execution and disciplined expansion. John Corbett, CEO, highlighted that “the SouthState team successfully navigated through that initial period of high risks, the regulatory approvals and the systems conversions, and now we're on the other side, enjoying the rewards of a well-choreographed integration.” Management emphasized that momentum accelerated late in the year, particularly in loan and deposit growth, as pipelines built steadily and new markets contributed to business development.

Looking ahead, SouthState’s guidance is anchored in expectations for mid- to upper-single-digit loan growth, stable net interest margin, and continued efficiency from recent investments in both talent and technology. Management sees opportunity in further expanding its commercial banking teams, especially in Texas and Colorado, and plans to keep investing in revenue producers and digital platforms. CFO Steve Young stated, “We're always investing in the tech platform and the other platforms, but what's different this year... is that we are very intentional about investing in revenue producers.”

Key Insights from Management’s Remarks

Management credited the quarter’s performance to effective acquisition integration, robust hiring initiatives, and growth in new geographic markets, while also leaning on selective capital returns to shareholders.

• Acquisition integration completed: Management reported that the integration of Independent Bank progressed on schedule, with all major system conversions and regulatory approvals finalized, reducing operational risk and enabling a focus on growth initiatives.
• Loan and deposit growth momentum: Organic loan and deposit balances both grew at an annualized 8% pace in Q4, driven by a record $3.9 billion in loan production and an expanding pipeline, especially in Texas and Colorado, which saw production up 15% over the previous quarter.
• Commercial banker hiring surge: SouthState added 26 commercial relationship managers in Q4, with 17 in Texas and Colorado, supporting the expansion of its lending and deposit base in those regions. Management aims to increase commercial bankers by 10-15% over the next year or two.
• Noninterest income strength: The correspondent Capital Markets division delivered one of its strongest quarters, benefiting from interest rate volatility and increased activity in interest rate swaps and fixed income, although management expects some normalization in coming quarters.
• Share repurchases and capital return: SouthState repurchased 2 million shares in Q4 and authorized an additional 5.56 million shares for buyback. Management described this as opportunistic, given the perceived disconnect between fundamental performance and share valuation, but does not expect the nearly 100% payout ratio to persist.

Drivers of Future Performance

SouthState’s outlook for 2026 is shaped by disciplined loan growth, continued investment in talent, and leveraging new technology to improve operational efficiency and revenue diversification.

• Targeted loan growth in new markets: Management expects mid- to upper-single-digit loan growth, with further momentum possible if commercial real estate lending and business development in Texas and Colorado continue to accelerate. These markets are now benefiting from expanded platforms and new product offerings.
• Operational investments and hiring: SouthState plans to continue hiring commercial bankers, targeting a 10-15% increase, and to selectively add talent in capital markets and specialty areas like SBA securitizations and foreign exchange. These hires are intended to drive organic growth but may pressure expenses as new teams are onboarded.
• Margin and expense discipline: Management projects net interest margin to remain between 3.80% and 3.90%, assuming stable deposit pricing and moderate interest rate cuts. Expenses are expected to rise about 4% in 2026, reflecting elevated performance compensation and continued investments in technology and business development.

Catalysts in Upcoming Quarters

In the upcoming quarters, our analyst team will be closely watching (1) whether SouthState can sustain organic loan and deposit growth in its expanded Texas and Colorado markets, (2) the pace and effectiveness of commercial banker hiring and integration into new business lines, and (3) the ability to maintain expense discipline despite ongoing investments in digital platforms and revenue producers. The trajectory of noninterest income from capital markets will also be a key signal.

SouthState currently trades at $99.46, down from $100.56 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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