SouthState (SSB) Q4 2024 earnings summary

Executive summary

• Reported Q4 2024 GAAP net income of $144.2M, adjusted net income of $148.8M, and diluted EPS of $1.87 (adjusted EPS $1.93), with a 9% increase in pre-provision net revenue over Q3 driven by 6% revenue growth.

• Loans and deposits both grew 4% annualized sequentially, with customer deposits up 9% annualized (excluding brokered CDs), and liquidity improved.

• Net interest margin (NIM) rose to 3.48% in Q4, up from 3.39% in Q3.

• Completed the acquisition of Independent Bank Group on January 1, 2025, ahead of schedule, with integration expected by Memorial Day.

• Announced a sale-leaseback transaction on 170 branches, unlocking $225 million in off-balance-sheet capital for future growth.

Financial highlights

• Net interest income for Q4 was $370 million; core net interest income (excluding loan accretion) was $367 million.

• Noninterest income reached $81 million (0.69% of average assets), with wealth management revenue at a record $45.5 million, up 15% year-over-year.

• Efficiency ratio improved to 56% (adjusted 54%), up 140 bps to 54.4% quarter-over-quarter.

• Net charge-offs were $5.3 million (0.06% of average loans, annualized) in Q4; full-year net charge-offs also 6 bps.

• Loans increased $355 million and deposits increased $423 million compared to Q3.

Outlook and guidance

• NIM expected between 3.60%-3.70% in Q1 2025, rising to 3.75%-3.85% by year-end due to loan repricing and potential securities restructuring.

• Mid-single-digit loan and deposit growth targeted for 2025, with customer deposits expected to drive funding.

• Non-interest income guidance remains at 50-55 bps of average assets, with potential upside if rate cuts occur.

• Expense guidance for early 2025: $355M-$365M per quarter, declining to $340M-$350M by Q4 as cost saves are realized.

• Management expects continued momentum into 2025 following the IBTX acquisition, focusing on building scale in high-growth markets.