SouthState Q2 Earnings Beat Estimates, Revenues Miss on Lower NII

Net income (GAAP basis) was $230 million, up 6.9% from $215.2 million in the year-ago quarter.

SouthState’s Revenues Decline, Expenses Fall

Total revenues for the quarter were $672.7 million, representing a 1.2% year-over-year decline. Also, the top line missed the Zacks Consensus Estimate of $677.2 million.

NII was $575.9 million, down marginally from the year-ago quarter. NIM declined to 3.78% from 4.02% in the prior-year quarter.

Non-interest income was $96.7 million, up 11.4% from the prior-year quarter. The increase was mainly driven by higher fees on deposit accounts, correspondent banking and capital markets income, trust and investment services income, and bank-owned life insurance income. This was partly offset by lower mortgage banking income and other income.

Non-interest expenses declined 4.6% to $357.7 million. The decrease was mainly due to the absence of merger, branch consolidation, severance-related and other expenses, along with lower information services expenses, OREO and loan-related expenses, the amortization of intangibles, and FDIC assessment and other regulatory charges. This was partly offset by higher salaries and employee benefits, occupancy expenses, business development and staff-related expenses, and other operating expenses.

The efficiency ratio decreased to 50% from 52.75% in the year-ago quarter. A decline in the efficiency ratio indicates a rise in profitability.

SSB’s Loans & Deposits Rise

As of June 30, 2026, net loans were $50.3 billion, up 2.8% from the prior quarter. Total deposits were $56.3 billion, which rose 0.8% sequentially.

SouthState’s Asset Quality: Mixed Bag

In the reported quarter, the company recorded a provision for credit losses of $15.9 million, up from $7.5 million in the prior-year quarter.

Allowance for credit losses as a percentage of loans was 1.15%, down 16 basis points year over year. The ratio of annualized net charge-offs to total average loans was 0.06%, down from 0.21% in the year-ago quarter.

Non-performing loans to total loans were 0.54%, down from 0.63% in the previous-year quarter. Total non-performing assets declined to $287.4 million from $323.8 million in the year-ago quarter.

SSB’s Capital Ratios Mixed, Profitability Ratios Improve

As of June 30, 2026, the Tier I leverage ratio was 9.4%, up from 9.2% in the year-ago quarter. The Tier 1 common equity ratio decreased to 11.1% from the prior-year quarter’s 11.2%.

At the end of the second quarter, the annualized return on average assets was 1.36%, up from the year-ago period’s 1.34%. Return on average common equity was 10.19% compared with 9.93% in the prior-year quarter.

SSB Capital Distribution Update

The company increased its quarterly cash dividend on its common stock from 60 cents per share to 66 cents. The dividend is payable Aug. 14, 2026, to shareholders of record as of Aug. 7, 2026

Our Take on SouthState

SouthState’s growth in non-interest income, along with higher loan and deposit balances, is expected to support its financial performance. Lower expenses and improving asset quality trends are additional positives. However, pressure on NII and NIM, along with higher provisions, remains concerning.

Currently, SSB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Banks

Commerce Bancshares Inc.’s CBSH second-quarter 2026 earnings of $1.10 per share surpassed the Zacks Consensus Estimate of $1.04. The bottom line reflected a rise of 1% from the prior-year quarter.

CBSH’s results primarily benefited from higher NII and a rise in non-interest income. The sequential rise in loan balances acted as a tailwind. However, higher expenses and provisions hurt CBSH’s results to some extent.

F.N.B. Corporation FNB reported second-quarter 2026 earnings of 42 cents per share, which matched the Zacks Consensus Estimate. The bottom line jumped 16.7% year over year.

FNB’s results primarily benefited from higher NII, a rise in non-interest income and lower provisions. Higher average loans and deposits were other positives. However, higher non-interest expenses hurt the results to some extent.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research