SouthState Corp issues $350M in subordinated notes

SouthState Corporation (NYSE:SSB), a regional banking institution with an $8.8 billion market capitalization, has entered into an agreement with U.S. Bank Trust Company, National Association, as trustee, to issue $350 million in subordinated notes, according to an 8-K filing with the Securities and Exchange Commission today. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimates, with strong fundamentals supported by 13 consecutive years of dividend increases.

The issuance involves 7.000% Fixed-to-Floating Rate Subordinated Notes due 2035 under an indenture dated June 13, 2025. These notes will initially bear interest at a rate of 7.000% per annum, payable semiannually until June 13, 2030. Following this date, the interest will convert to a floating rate based on the secured overnight financing rate (SOFR) plus 319 basis points, payable quarterly.

SouthState Corporation may opt to redeem the notes at various times as outlined in the indenture. The offering was made pursuant to an effective shelf registration statement previously filed by the company.

This financial move is part of SouthState’s broader strategy to manage its capital and financing needs. The notes offer investors a fixed return up to 2030, after which the return adjusts with market conditions. The company’s ability to redeem the notes provides flexibility in its long-term financial planning. With a conservative debt-to-equity ratio of 0.3 and nine analysts recently revising earnings estimates upward, InvestingPro data suggests strong financial health. Discover more insights about SSB’s financial position and growth potential with InvestingPro’s comprehensive research report, part of its coverage of over 1,400 US stocks.

The indenture and supplemental indenture, which include the form of notes and opinions of counsel, are attached as exhibits to the 8-K filing and provide detailed legal terms of the notes and the obligations of the issuer.

Investors and stakeholders can refer to the full 8-K filing for a comprehensive understanding of the terms and conditions associated with this debt issuance. The legal documentation attached to the filing offers further insights into the contractual aspects of the notes and the obligations they entail for SouthState Corporation. The company maintains a healthy P/E ratio of 14.01 and has consistently paid dividends for 29 consecutive years, demonstrating long-term financial stability.

In other recent news, SouthState Corporation reported its Q1 2025 earnings, significantly surpassing expectations with an earnings per share (EPS) of $2.15, compared to the forecasted $0.88. The company also achieved revenues of $630.64 million, exceeding the anticipated $611.62 million. Alongside these financial results, SouthState Corporation entered a $350 million underwriting agreement to sell 7.000% Fixed-to-Floating Rate Subordinated Notes due 2035, as part of a registered public offering. This move aligns with the company’s broader financial strategy to enhance its capital structure.

Analysts have been active in their assessments of SouthState Corporation. Keefe, Bruyette & Woods maintained an Outperform rating on the company’s stock, citing strong profitability metrics and a successful integration with Independent Bank (NASDAQ:INDB) of Texas. Jefferies initiated coverage with a Buy rating, highlighting SouthState’s expanding presence in Southern U.S. markets and its strong credit quality. Meanwhile, Citi adjusted its price target for SouthState, lowering it to $113 from $123, while maintaining a Buy rating, citing recent underperformance and high expectations around earnings.

These developments reflect SouthState Corporation’s strategic initiatives and financial performance, which have been closely monitored by analysts and investors. The company’s ability to maintain a solid net interest margin and its strong capital base are seen as positive indicators for its future performance. As SouthState continues to integrate new acquisitions and navigate market conditions, its financial strategies and analyst ratings will remain key areas of focus for investors.

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