SouthState Bank (NYSE:SSB) executives used the company’s fourth-quarter 2025 earnings call to highlight a year marked by the integration of Independent Financial and a return to stronger organic growth late in the year, while outlining expectations for net interest margin stability, continued hiring of revenue producers, and disciplined but flexible capital returns.
Management says integration risk is “in the rearview mirror”
CEO John Corbett said 2025 represented a successful first year following the May 2024 announcement of the Independent Financial acquisition, which expanded SouthState into Texas and Colorado. Corbett noted the company navigated regulatory approvals and systems conversions and is now “enjoying the rewards” of the integration.
From a financial standpoint, Corbett said that excluding merger costs, 2025 earnings per share increased by more than 30%, while tangible book value per share rose at a double-digit rate despite day-one dilution from the deal. He also cited an 11% dividend increase and share repurchases as part of the year’s capital actions.
Q4 results: balance sheet growth and fee strength, with higher performance-related costs
Will Matthews said the company closed the year with “a good quarter” that included pre-provision net revenue (PP&R) of $323 million and earnings per share of $2.47. For full-year 2025, Matthews reported PP&R of $1.27 billion and EPS of $9.50, with return on tangible common equity of approximately 20%.
In the fourth quarter compared with the third quarter, Matthews said strength in balance sheet growth and non-interest income was partly offset by higher non-interest expense, much of it “driven by performance.” Key metrics and drivers discussed on the call included:
- Tax-equivalent net interest margin (NIM): 3.86%, in line with management’s guidance; cost of deposits was 1.82%.
- Accretion income: $50 million, down $33 million from Q3; management said roughly $260 million of loan discount remains to be accreted into income.
- Net interest income: $581 million, down $19 million from Q3 due to lower accretion; excluding accretion, net interest income rose $14 million.
- Loan and deposit growth: loans and deposits grew at an 8% annualized rate during the quarter, and cash/Fed Funds Sold levels were up nearly $500 million.
- Non-interest income: $106 million, up $7 million, driven primarily by a $31 million quarter from the correspondent capital markets division.
Matthews said the quarter’s higher non-interest expense reflected increased performance and commission-based compensation (up a combined $6 million from Q3), as well as higher marketing and business development spending (up a combined $6 million). Even with the increase, Matthews said the efficiency ratio remained below 50% for both the quarter and the year.
2026 outlook: NIM range reiterated; expenses to rise with added revenue producers
In response to analyst questions, CFO Steve Young reiterated prior NIM guidance, saying management still expects NIM to be “between 3.80% and 3.90%” in 2026. Young described four key variables: average interest-earning assets, the rate forecast, loan accretion, and deposit beta.
Young said average interest-earning assets are still expected in the $61 billion to $62 billion range for 2026, with Q1 starting around $60 billion to $60.5 billion due to seasonal municipal deposits rolling off. He cited a forecast of three rate cuts and loan accretion income of $125 million for 2026. On deposit pricing, Young reiterated a 27% deposit beta assumption to grow deposits and fund loan growth, with deposit costs expected to average around 1.75% in Q1.
Matthews also reiterated expense expectations tied to growth initiatives. He said management expects 2026 non-interest expense to rise about 4% from 2025’s $1.407 billion base, reflecting both inflationary pressures and the company’s plan to “lean into” expanding revenue producers. In Q&A, he attributed Q4 expense pressure to performance-driven incentives, typical fourth-quarter seasonality, and increased business development and advertising tied to hiring and growth initiatives.
Corbett added that the company is operating in a period of significant market disruption, citing management’s calculation that $118 billion of bank deposits in its MSAs will go through a conversion over the next year or so. He said SouthState has roughly 550 to 600 commercial relationship managers and would be comfortable increasing that figure by 10% to 15% over the next year or two, noting that expectation is included in the company’s expense guidance.
Loan growth: pipeline at about $5 billion; Texas and Colorado momentum highlighted
Corbett said organic growth was slower early in 2025 but strengthened as pipelines built through the year and “many of those deals hit the books in Q4.” Management said the company ended the year with a loan pipeline of about $5 billion, up from roughly $3.4 billion earlier in the spring.
Corbett reported record quarterly production of $3.9 billion in Q4, up 16% versus Q3, and reiterated guidance for “mid to upper single-digit” loan growth in 2026. He said reaching the upper end of that range could be supported by improving momentum in investor commercial real estate and continued pipeline growth in Texas and Colorado.
On regional details, management said Texas and Colorado combined produced $888 million of loans in Q4, 15% higher than Q3’s $775 million. The company also said that full-year 2025 production in those markets increased 10% compared with 2024. Corbett noted that of the 26 commercial relationship managers added in Q4, 17 were in Texas and Colorado.
On loan pricing and repricing, Young said the legacy bank has about $4.3 billion of fixed-rate loans repricing over the next 12 months around 5%, versus Q4 new loan origination rates of 6.06%. For the Independent book, he cited about $2 billion coming due over the next four quarters, repricing down from about 7.25% (the discount rate) to around 6.25%, noting yields are “higher out of Texas and Colorado.” He also said new loan production rates in Texas and Colorado were 6.31% in Q4.
Capital return and credit: buybacks stepped up; credit metrics described as stable
Corbett said the company was “more aggressive” with share repurchases in Q4 due to what management viewed as a disconnect between fundamental performance and valuation. Matthews said SouthState repurchased 2 million shares in the quarter at an average price of $90.65. Management also said the board authorized a new repurchase plan adding 5 million shares to the 560,000 shares remaining under the prior authorization.
Matthews said that combining buybacks with dividends brought the total payout ratio to just shy of 100% for the quarter, though management indicated that level is not expected to be sustained long term. In Q&A, management described capital return decisions as quarter-by-quarter and suggested a more typical total payout ratio (dividends plus repurchases) could fall in the 40% to 60% range depending on conditions, including growth, share price, and economic outlook.
On capital and credit, Matthews said capital ratios remained “very healthy,” with a tangible common equity ratio of 8.8% and CET1 of 11.4% at year-end. He cited a $6.6 million provision expense in Q4, net charge-offs of nine basis points for the quarter (11 basis points for the year), and said reserve levels are adequate. Management also addressed an increase in substandard loans, attributing it to a handful of multifamily properties in lease-up; Corbett said 99% of substandard loans excluding NPAs are current and cited a weighted average loan-to-value of 52% on those multifamily credits.
About SouthState Bank (NYSE:SSB)
SouthState Bank (NYSE: SSB) is a bank holding company headquartered in Winter Haven, Florida, that provides a range of commercial and retail banking services. Through its subsidiary, SouthState Bank, the company serves businesses, institutions and individuals with deposit, lending and treasury management solutions. Its core business lines include commercial and industrial loans, commercial real estate lending, consumer mortgages and home equity loans.
In addition to traditional lending and deposit products, SouthState Bank offers specialized services such as treasury and cash management, merchant services, payment solutions and online banking.
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