RankingBanking 26 Digital - Flipbook - Page 21
19
South
If the Midwest is the proverbial tortoise, then
one might consider the South the hare. “The
South is a growth story,” Jonathan Hightower, a
partner at the law firm Fenimore Kay Harrison,
says of the region.
36%
29%
36%
Percent of U.S.
banks headquartered in the South
Percent of banks in
RankingBanking
Percent of banks
in top 25
The population of the South ticked up by 6%
from April 1, 2020, to July 1, 2025, according
to the U.S. Census Bureau. That’s almost double
best geographies in the country,” says Stephen
the nation’s population growth of 3.1%. Eight of
Young, the bank’s chief strategy officer.
the 15 fastest growing cities were based in two
But this breakneck growth has also meant
Southern states, Florida and Texas, and the re-
tumultuous downturns. The Southeast, which
gion’s gross domestic product surged 4.3% from
RankingBanking included in its Southern region,
2020 to 2024, according to Visa Business and
“is a market that can be more impacted by
Economic Insights. That compares with 3.6%
cyclical forces,” says Crowley, who noted that
growth for the entire U.S. economy. “The weather
the Southeast has been “ground zero for issues”
plays a huge factor, and we generally have
at times. For instance, the Atlanta metro area
business-friendly state and local governments,”
earned the nickname “The Ring of Death” during
Hightower says.
the 2007–09 financial crisis after dozens of com-
Nine of the 25 top performers were based in
six Southern states. That was the highest percentage of top performers of any of the regions.
Hightower notes that some of the best perform-
munity banks failed there.
Regulations were implemented in the aftermath
of that crisis, such as the accounting change
known as current expected credit losses, or
ing banks in the region are ones that can diversify
CECL. However, that hasn’t been fully tested yet
their loan portfolios away from CRE credits. That
since the industry hasn’t gone through another
allows these institutions to continue to serve their
credit cycle since then. “We thought Covid was
commercial clients as their banking needs grow
going to be the thing, and it wasn’t,” Baldwin
and become more sophisticated.
adds. “Charge-offs have been very low.”
Management at the $68.9 billion SouthState
The region, particularly Texas, has been an
Bank Corp. in Winter Haven, Florida, likes to tout
attractive location for acquisitions in recent
the various markets it is in across seven Southern
years. These deals have had slightly higher credit
states, plus Colorado. It recently entered Texas
marks on loan portfolios, which hints at concerns
through an acquisition, with Houston reporting
that the strong credit quality the industry has
the highest loan growth of any market for all of
seen over the last few years won’t last forever,
SouthState, management said during its first
Vernon says. But these deals have also produced
quarter earnings call. “When you look at the map
healthy premiums. That points to “confidence in
that has been built over the course of the last 15
the ability for the South to perform in the coming
or so years, that map is arguably in some of the
two-to-three-year period,” Vernon says.
