SouthState (SSB)

Regional banking company SouthState (NYSE:SSB) reported Q4 CY2025 results beating Wall Street’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.

Company Overview

With roots dating back to the Great Depression era of 1933, SouthState (NYSE:SSB) is a financial holding company that provides banking services, wealth management, and correspondent banking services across six southeastern states.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

SouthState competes with other regional banks operating in the southeastern United States, including Truist Financial (NYSE:TFC), Regions Financial (NYSE:RF), First Horizon (NYSE:FHN), and Synovus Financial (NYSE:SNV).

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Luckily, SouthState’s revenue grew at an exceptional 18.7% compounded annual growth rate over the last five years. Its growth beat the average banking company and shows its offerings resonate with customers, a helpful starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. SouthState’s annualized revenue growth of 24.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, SouthState reported magnificent year-on-year revenue growth of 52.5%, and its $686.9 million of revenue beat Wall Street’s estimates by 3.7%.

Net interest income made up 81.4% of the company’s total revenue during the last five years, meaning SouthState barely relies on non-interest income to drive its overall growth.

Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.

The underlying profitability of top-line growth determines the actual bottom-line impact. Banking institutions measure this dynamic using the efficiency ratio, which is calculated by dividing non-interest expenses like personnel, facilities, technology, and marketing by total revenue.

Markets understand that a bank’s expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It’s somewhat counterintuitive, but a lower efficiency ratio is better.

Over the last five years, SouthState’s efficiency ratio has swelled by 12.6 percentage points, going from 67.2% to 53.3%. Said differently, the company’s expenses have grown at a slower rate than revenue, which typically signals prudent management.

SouthState’s efficiency ratio came in at 49.7% this quarter, beating analysts’ expectations by 235 basis points (100 basis points = 1 percentage point).

For the next 12 months, Wall Street expects SouthState to rein in some of its expenses as it anticipates an efficiency ratio of 51.9%.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

SouthState’s EPS grew at a remarkable 15% compounded annual growth rate over the last five years. However, this performance was lower than its 18.7% annualized revenue growth, telling us the company became less profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For SouthState, its two-year annual EPS growth of 17.8% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, SouthState reported adjusted EPS of $2.47, up from $1.93 in the same quarter last year. This print beat analysts’ estimates by 8.3%. Over the next 12 months, Wall Street expects SouthState’s full-year EPS of $9.50 to shrink by 1.7%.

Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

SouthState’s TBVPS grew at a solid 6.4% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 10.2% annually over the last two years from $46.33 to $56.27 per share.

Over the next 12 months, Consensus estimates call for SouthState’s TBVPS to grow by 12% to $63.02, mediocre growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, SouthState has averaged a Tier 1 capital ratio of 11.8%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, SouthState has averaged an ROE of 9.6%, uninspiring for a company operating in a sector where the average shakes out around 7.5%. We’re optimistic SouthState can turn the ship around given its success in other measures of financial health.

We enjoyed seeing SouthState beat analysts’ revenue expectations this quarter. We were also happy its net interest income narrowly outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $100.56 immediately after reporting.

Updated: January 22, 2026 at 11:17 PM EST

Are you wondering whether to buy SouthState or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

We think SouthState is a solid business. First off, its revenue growth was exceptional over the last five years. And while its projected EPS for the next year is lacking, its net interest income growth was exceptional over the last five years. On top of that, its improving efficiency ratio shows the business has become more productive.

SouthState’s P/B ratio based on the next 12 months is 1x. Looking at the banking landscape right now, SouthState trades at a pretty interesting price. If you trust the business and its direction, this is an ideal time to buy.

Wall Street analysts have a consensus one-year price target of $114.68 on the company (compared to the current share price of $103.10), implying they see 11.2% upside in buying SouthState in the short term.