SouthState Profit Rises as Loan Growth Offsets Margin Pressure
Ending loans climbed 11% on an annualized basis to $50.85 billion.
SouthState Bank (SSB), the regional bank, reported higher second-quarter profit as loan growth and lower expenses outweighed continued pressure on lending yields. Net income increased to $230.0 million from $225.8 million in the first quarter and $215.2 million a year earlier.
Diluted earnings rose to $2.35 a share from $2.28 sequentially and $2.30 a year earlier. Reported earnings per share increased 11% year over year, while adjusted earnings rose 2%. Pre-provision net revenue increased to $314.9 million from $302.2 million in the prior quarter.
Net interest income rose 3% sequentially to $575.9 million, though it remained slightly below the year-earlier total. The non-tax-equivalent net interest margin held at 3.78% from the first quarter and narrowed from 4.02% a year earlier. Average investment loans increased to $50.25 billion, while their yield declined to 5.91%.
Loan growth centered on real estate. Consumer real-estate loans increased $460 million sequentially, construction and land-development loans rose $390 million, and investor commercial real-estate loans added $358 million. Commercial-and-industrial loans were little changed.
Deposits increased $474 million from the first quarter and 5% from a year earlier to $56.35 billion, taking the ending loan-to-deposit ratio to 90%. The mix shifted toward interest-bearing accounts as noninterest-bearing checking declined $200 million sequentially and interest-bearing checking rose $591 million. Total deposit cost held at 1.76% from the first quarter and improved from 1.84% a year earlier.
Noninterest income declined to $96.7 million as mortgage-banking income fell, partly offset by higher deposit-account fees. Noninterest expense decreased to $357.7 million, helping the efficiency ratio improve to 50.00% from 51.05% in the first quarter and 52.75% a year earlier. Provision for credit losses rose to $15.9 million, although net charge-offs and nonperforming assets declined sequentially.
The board raised the quarterly dividend 10% to $0.66 a share, putting the payout 22% above its year-earlier level. Tangible book value increased 13% from a year earlier to $58.72 a share despite the repurchase of nearly 5% of outstanding shares over that period.