SouthState (SSB)

Regional banking company SouthState (NYSE:SSB) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 63.9% year on year to $698.8 million. Its non-GAAP profit of $2.58 per share was 17.2% 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 incredible 21.1% compounded annual growth rate over the last five years. Its growth surpassed the average banking company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. SouthState’s annualized revenue growth of 17.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 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 63.9%, and its $698.8 million of revenue beat Wall Street’s estimates by 6.5%.

Net interest income made up 80.8% 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 11.4 percentage points, going from 67.2% to 54.5%. 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 49.9% this quarter, beating analysts’ expectations by 367 basis points (100 basis points = 1 percentage point). This result was 6.7 percentage points better than the same quarter last year.

For the next 12 months, Wall Street expects SouthState to rein in some of its expenses as it anticipates an efficiency ratio of 51.8%.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

SouthState’s EPS grew at an astounding 13.4% compounded annual growth rate over the last five years. However, this performance was lower than its 21.1% 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 12.5% is similar to its five-year trend, implying strong and stable earnings power.

In Q3, SouthState reported adjusted EPS of $2.58, up from $1.90 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects SouthState’s full-year EPS of $8.96 to grow 2.6%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. 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 6.5% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 13.5% annually over the last two years from $42.27 to $54.48 per share.

Over the next 12 months, Consensus estimates call for SouthState’s TBVPS to grow by 11.6% to $60.79, top-notch 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) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, SouthState has averaged an ROE of 9.4%, healthy for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This shows SouthState has a decent competitive moat.

We were impressed by how significantly SouthState blew past analysts’ net interest income expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 1.2% to $95 immediately following the results.

Updated: December 4, 2025 at 11:44 PM EST

When considering an investment in SouthState, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

SouthState possesses a number of positive attributes. 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 believe in the company and its growth potential, now is an opportune time to buy shares.

Wall Street analysts have a consensus one-year price target of $114.04 on the company (compared to the current share price of $92.07), implying they see 23.9% upside in buying SouthState in the short term.