KBRA Affirms Ratings for SouthState Bank Corporation

KBRA affirms the senior unsecured debt rating of A-, the subordinated debt rating to BBB+, and the short-term debt rating of K2 for Winter Haven, Florida-based SouthState Bank Corporation (NASDAQ: SSB) ("the company"). KBRA also affirms the deposit and senior unsecured debt ratings of A, the subordinated debt rating of A-, and the short-term deposit and debt ratings of K1 for its main subsidiary, SouthState Bank, National Association. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

SSB’s ratings reflect its evolution into one of the largest regional banking franchises in the Southeastern U.S., with meaningful scale and density in attractive growth markets, further enhanced by its 2025 expansion into Texas and Colorado. While growth over the past decade has been largely acquisition-driven, the company has consistently generated durable pre-provision earnings across economic cycles, supported by a low-cost deposit franchise, strong asset quality, solid core profitability, and diversified fee income. The deposit base remains a key credit strength, characterized by granular funding and 24% noninterest-bearing deposits, contributing to a total cost of deposits that ranks within the top quartile of lowest-cost funding among KBRA-rated banks. Earnings have also benefited from the successful integration of the Independent Bank Group, Inc. (IBTX) acquisition and realization of cost synergies, reflected in adjusted ROAs consistently above 1.0% and peer levels.

The company's asset quality profile remains a key credit strength, supported by strong credit performance relative to peers. Over the past five and a half years, SSB has reported average net charge-offs of just 8 bps, materially outperforming peers despite significant M&A-driven growth. While nonperforming assets have tracked closer to peer levels, criticized and classified assets have shown modest upward migration as credit trends normalize from historically benign post-GFC conditions. Nevertheless, overall credit metrics continue to compare favorably with peers, reflecting sound underwriting and disciplined risk management.

SSB’s capital profile reflects solid levels aligned with its risk profile and strategic objectives. Historically, capital ratios have remained generally in line with peers, as management has deployed capital for acquisitions followed by disciplined rebuilding periods. The 1Q25 acquisition reduced CET1 by approximately 160 bps to 11.0%; however, the ratio improved to 11.3% by 1Q26. Management continues to balance capital rebuilding with organic growth initiatives and measured share repurchase activity.

Rating Sensitivities

Given the level of the existing ratings, we do not anticipate rating momentum for SSB over the medium term. A change in capital management policies inconsistent with the risk profile of the company or a material decline in core earnings due to worse than peer credit challenges could cause rating reevaluation.

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