SouthState Bank Corporation (SSB) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with improved loan yields and noninterest income, a stable noninterest expense, and a solid CET1 ratio. Additionally, the dividend increase and potential share repurchases indicate confidence in future growth. The Q&A highlights positive loan growth prospects, especially in Texas, and a healthy capital position. Despite a charge-off related to First Brands, management's optimism about margin improvement and strategic hiring efforts suggest a positive outlook. Overall, the combination of strong fundamentals and strategic initiatives supports a positive sentiment.
Key Financial Performance
Earnings per share (EPS) $2.58, up 30% year-over-year. The increase is attributed to $34 million in revenue growth and solid expense control.
Return on tangible equity 20%, no specific year-over-year comparison provided, but reflects strong performance post-Independent Financial transaction.
Loan production Nearly $3.4 billion, with a 67% increase in Texas and Colorado since Q1 2025. Growth attributed to strategic focus and market opportunities.
Charge-offs 27 basis points for the quarter, primarily due to one larger C&I credit acquired with Atlantic Capital. Year-to-date charge-offs are 12 basis points, with a forecast of 10 basis points for the year.
Net interest income (NII) $600 million, up $22 million from Q2 2025, driven by $19 million in higher accretion.
Cost of deposits 1.91%, up 7 basis points from the prior quarter, influenced by sub debt outstanding during the quarter.
Loan yields 6.48%, improved by 15 basis points from Q2 2025, approximately 8 basis points below new origination rates.
Noninterest income $99 million, up $12 million year-over-year, driven by performance in the Capital Markets division and deposit fees.
Noninterest expense (NIE) $351 million, unchanged from Q2 2025, at the low end of guidance.
Efficiency ratio 46.9% for Q3 2025, bringing the year-to-date ratio to 48.7%.
CET1 (Common Equity Tier 1) 11.5%, reflecting a strong capital position.
Tangible book value (TBV) per share $54.48, more than $3 above the year-end 2024 level, despite the dilutive impact of the Independent Financial merger.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Earnings per share: Up 30% in the last year
Return on tangible equity: 20%
Loan production in Texas and Colorado: Up 67% since the first quarter of the year
Overlapping deposits in Southeast, Texas, and Colorado: $90 billion in deposits amidst consolidation
Loan production: Increased to nearly $3.4 billion in Q3
Net interest income: $600 million, up $22 million over Q2
Cost of deposits: 1.91%, up 7 basis points from prior quarter
Loan yields: 6.48%, improved by 15 basis points from Q2
Noninterest income: $99 million, up $12 million driven by Capital Markets and deposit fees
Efficiency ratio: 46.9% for Q3, 48.7% year-to-date
Net charge-offs: 12 basis points year-to-date, with one large $21 million charge-off in Q3
Strategic planning: Focused on banking landscape, deregulation, and market opportunities
Recruitment and growth: Regional presidents focused on recruiting bankers and organic growth for 2026
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Loan Charge-Offs: The company experienced a $21 million loan charge-off during the quarter, which is an abnormally large charge-off for them. This brings year-to-date net charge-offs to 12 basis points, higher than the 9 basis points it would have been without this loss.
Cost of Deposits and Funds: The cost of deposits increased to 1.91%, up 7 basis points from the prior quarter. Additionally, the overall cost of funds was impacted by a larger amount of subordinated debt outstanding for much of the quarter, which could pressure margins.
Credit Quality: While credit metrics are stable overall, the charge-off of a larger C&I credit acquired with Atlantic Capital indicates potential risks in acquired loan portfolios.
Strategic Execution Risks: The company is in the middle of strategic planning and aims to capitalize on market disruptions and consolidation opportunities. However, executing on these plans, including recruiting great bankers and growing organically, carries inherent risks.
Economic and Market Conditions: The company is operating in a competitive and consolidating market landscape, particularly in the Southeast, Texas, and Colorado. This environment could pose challenges in maintaining growth and profitability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Net Loan Growth: Loan pipelines across the company continue to grow, and net loan growth is expected to accelerate over the next few quarters.
Charge-offs: The credit team forecasts charge-offs to land in the neighborhood of 10 basis points for the year.
Market Opportunities: The company is positioned to capitalize on market disruptions, with $90 billion of overlapping deposits in the Southeast, Texas, and Colorado undergoing consolidation. Regional presidents are focused on recruiting bankers and growing the bank organically in 2026.
Net Interest Margin (NIM): The redemption of $405 million in subordinated debt is expected to have a net positive impact on NIM of approximately 4 basis points, all else equal.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you walk us through the excess accretion this quarter and provide insights on core margin, rate cuts, and pricing dynamics?
A:Stephen Young explained that higher accretion was observed due to early payoffs of 2020 and 2021 vintage loans with significant discounts. He provided guidance for NIM, expecting it to remain in the 3.80%-3.90% range for 2026. He also discussed assumptions on interest-earning assets, rate forecasts, loan accretion, and deposit beta. New loan production rates were 6.56% overall, with Texas and Colorado slightly higher at 6.79%.
Q:Can you provide an overview of the loan growth environment and expectations for the future?
A:Stephen Young stated that mid-single-digit growth is expected for the remainder of 2025, with 3.4% growth in the third quarter. Most growth is in C&I loans, with Texas showing the largest pipeline increase from $800 million to $1.2 billion. The company is focusing on hiring efforts to capitalize on market dislocation.
Q:What was the large charge related to First Brands, and how does it affect the portfolio?
A:John Corbett confirmed the charge was related to First Brands, the company's only supply chain finance credit. The full amount was charged off in the third quarter, and there was no prior reserve. The company will use this as a learning experience and does not have similar credits in the portfolio.
Q:What are your thoughts on CET1 levels and capital management, including buybacks?
A:William Matthews stated that CET1 is at 11.5% (10.8% including AOCI), within a healthy range of 11%-12%. The company is considering using capital for growth opportunities and share repurchases, with decisions made on a quarter-to-quarter basis.
Q:Can you quantify the accelerated accretion this quarter and provide a base level for future accretion?
A:Stephen Young explained that accretion was higher in July and early August due to outsized prepayments. The base level for accretion is expected to be $40-$50 million for the fourth quarter, aligning with expectations for 2026.
Q:What is the outlook for fees in the fourth quarter and next year?
A:Stephen Young noted that noninterest income was $99 million in the third quarter, driven by capital markets and correspondent banking. He expects a run rate of $370-$380 million for 2026, slightly below the third quarter's performance.
Q:How do rate cuts affect the core NIM, and what are the assumptions for deposit beta?
A:Stephen Young stated that each 25 basis point rate cut improves core NIM by 1-2 basis points. Deposit beta for the first 100 basis points of cuts was 38%, but the company expects it to stabilize at 27%-30% over time, with a lag.
Q:What are the implications of IBTX bankers adopting SouthState's business model?
A:John Corbett explained that IBTX bankers will transition to SouthState's P&L-based incentive system in 2026, focusing on PPNR growth. Adjustments will be made to encourage recruiting efforts without penalizing regional presidents for new hire costs.
Q:What is the outlook for the margin in 2026, including accretion and deposit beta?
A:Stephen Young confirmed that the 2026 margin outlook of 3.80%-3.90% includes $125 million of accretion and assumes a deposit beta of 27%-30%. The margin is expected to improve gradually by the end of 2026.
Q:What are the dynamics behind the increase in transaction and money market account costs?
A:Stephen Young attributed the increase to higher CD rates used to fund loan growth. He expects deposit costs to stabilize as rate cuts occur and the curve steadies.
Q:What is the outlook for NIE in the fourth quarter and 2026?
A:William Matthews guided NIE to be in the $345-$350 million range for the fourth quarter. For 2026, mid-single-digit growth is expected, driven by inflation and investments in organic growth initiatives.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the question about the tailwind duration for correspondent banking benefits from rate cuts. Stephen Young provided general historical context but did not specify the expected duration of benefits from upcoming rate cuts.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Atlantic Capital
Bank Conference
CFO SouthState
CI credit
Capital bank
Colorado president
Financial transaction
Instructions conference
Loan production
Nonaccruals basis
Payment Nonaccruals
Payoffs Loan
SouthState Bank
SouthState midst
SouthState share
bank Payment
bank color
bank number
bank position
banker bank
banking landscape
color number
conference Senior
consolidation Southeast
credit Atlantic
credit bank
credit neighborhood
date credit
deposit Payoffs
deposit SouthState
deregulation opportunity
disruption market
equity Independent
front year
harbor
infrastructure bank
landscape deregulation
laser
point charge
SSB Transcript
SouthState Bank Corporation (SSB) Q4 2025 Earnings Call Transcript
Positive1-23
The earnings call highlights strong loan growth, low net charge-offs, and a healthy capital position, indicating robust financial health. The company's strategic plan to capitalize on market opportunities and a broad capital return strategy, including share repurchases, further adds to the positive sentiment. Despite some unclear management responses, the overall outlook with optimistic guidance and growth initiatives suggests a positive stock price movement in the short term.
SouthState Bank Corporation (SSB) Q3 2025 Earnings Call Transcript
Positive10-23
The earnings call reveals strong financial performance with improved loan yields and noninterest income, a stable noninterest expense, and a solid CET1 ratio. Additionally, the dividend increase and potential share repurchases indicate confidence in future growth. The Q&A highlights positive loan growth prospects, especially in Texas, and a healthy capital position. Despite a charge-off related to First Brands, management's optimism about margin improvement and strategic hiring efforts suggest a positive outlook. Overall, the combination of strong fundamentals and strategic initiatives supports a positive sentiment.
SouthState Corporation (SSB) Q2 2025 Earnings Call Transcript
Positive7-25
The earnings call reveals strong financial performance with a high net interest margin, optimistic loan growth, and a stable expense outlook. The Q&A section supports this with positive sentiment on growth and deposit costs. Although there are uncertainties in regulatory impacts and talent acquisition, the overall guidance remains positive, with potential for higher dividends and buybacks. The absence of negative financial surprises and focus on organic growth further supports a positive sentiment.
SouthState Corporation (SSB) Q1 2025 Earnings Call Transcript
Unknown4-25
The earnings call reflects a balanced outlook. Strong financial metrics, including high NIM and ROE, are positive. However, the economic slowdown, tariff impacts, and competition present risks. The Q&A section revealed some unclear responses, particularly regarding loan marks and economic impacts, causing uncertainty. While the shareholder return plan and capital flexibility are positive, flat non-interest income guidance and economic concerns temper enthusiasm. Overall, the sentiment is neutral, with potential for minor fluctuations depending on economic developments and management's strategic execution.
SSB Slides
SSB Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
