SouthState Bank Corporation (SSB) Earnings & Analysis

Latest quarter

SouthState’s third-quarter adjusted earnings per share were $2.30, below the $2.39 consensus. Revenue as counted for the consensus was $685.4 million, also below the $690.8 million estimate.

SouthState reported quarterly revenue of $958.8 million, down from $980.8 million a year earlier. The filing showed net income fell to $223.8 million from $246.6 million, while diluted earnings per share declined to $2.30 from $2.42.

The filing attributed the decline in net income mainly to lower net interest and noninterest income and a higher provision for credit losses. SouthState said the provision rose to $20.3 million from $5.1 million, primarily because loan production and net loan growth increased. Loan production reached $4.9 billion, compared with $3.4 billion a year earlier.

SouthState said its net interest margin declined by 28 basis points from the prior-year quarter, principally because yields on interest-earning assets fell. The filing attributed lower noninterest income in part to reduced correspondent banking and capital markets income, including less demand from commercial borrowers to convert variable-rate loans to fixed rates.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO John Corbett said loans and deposits each grew 9% annualized in the third quarter. Commercial and industrial lending led loan growth, and Corbett said the bank had expanded its commercial relationship banker workforce by 10% over the preceding year. Those bankers had originated about $1 billion in new loans, he said.

Corbett said the loan pipeline had pulled back as rates rose. He attributed some of the quarter’s loan production to new hires and said commercial and industrial loans were up 13% year over year. For the fourth quarter, he expected loan growth in the mid-single digits, with full-year growth in the high single digits.

On pricing, Corbett said competition and the speed of the rise in the yield curve could compress loan spreads between a fixed-rate commitment and closing. He said, “My guess is most of it is tied to the fact of how rapidly the yield curves moved up.”

Corbett said the net interest margin held flat with the second quarter at 3.78%, reflecting a shift toward floating-rate loans. Those loans represented 39% of the portfolio, and he said the strategy should help stabilize the margin if the Federal Reserve continues raising rates.

CFO William Matthews said third-quarter noninterest expense rose from the second quarter, primarily because of employee compensation. He cited higher incentive accruals and salaries, as well as lower deferred loan costs. The revenue-producer hiring initiative had cost approximately $15 million year to date, including recruiting and business development, he said.

Asked about the expense outlook, Matthews said hiring had proceeded ahead of expectations and that the company was still finalizing its budgets. He also said the bank was likely to be at the lower end of its 40% to 60% total payout ratio range in 2027.

Guidance

Corbett said SouthState’s prior full-year 2026 loan growth guidance was in the mid- to high-single-digit range; he now expects growth in the high single digits. Matthews said the annual budget for the revenue-producer hiring effort had been about $14 million, but he now expects the full-year cost to be $21 million to $22 million.