RankingBanking 26 Digital - Flipbook - Page 25
23
study, that put SouthState in a new asset class,
with CenterState Bank Corp. Today, much of the
where it ranked third among public banks above
bank’s executive team, including Murray, CEO and
$50 billion in assets. The annual list ranks banks
Chair John Corbett and Chief Strategy Officer
based on four metrics: return on average total
Stephen Young, has CenterState roots. Those bank
assets, return on average tangible common equity,
leaders point to SouthState’s local leadership
tangible common equity to tangible assets, and
model, where decision-making is made close to
nonperforming assets to loans and other real
customers, as the source of its success. And now,
estate owned. This year’s study uses 2025 results.
they’re pivoting to focus more on organic growth
SouthState’s success on this year’s list was
through hiring and building teams to expand and
largely due to its high profitability: With a ROAA
deepen their reach in those valuable markets.
of 1.48%, only East West Bancorp in Pasadena,
California, rated higher for that metric in the $50
“Local Really Does Matter”
billion-plus tier. SouthState’s capital adequacy
The bank’s 21 division presidents report to
was in the top quartile for its category, with an
Murray, and each of them make decisions for
8.76% tangible common equity ratio.
their respective geographies. “They decide how
Much of the 2025 profitability can be attribut-
we go to market. They decide how we price loans,
ed to the Independent acquisition. Despite a tepid
how we price deposits, where we’re going to put
reaction from the markets, the deal was a finan-
branches, how many branches we’re going to have,
cial boon for SouthState due to cost saves, deal
how many people we’re going to have, who are
accounting, prepayments on the acquired entity’s
the right people,” says Murray. “Local really does
loans and increased scale, says Stephen Scouten,
matter.”
managing director at Piper Sandler & Co. But
The model recognizes that different markets
even with the accretion from the deal, South-
have different dynamics, say bank leaders. That
State had a solid year. “They’ve got a diversified
can be particularly beneficial if a bank jumps into
income stream. It’s not just about lending money
a new geography, says Patrick Vernon, an advisory
to certain businesses,” says Christopher Marinac,
partner at Crowe, a professional services firm.
director of research at Brean Capital. “They’ve
He uses an analogy to another industry where
got a diverse customer base. They’ve obviously
localized decision-making is necessary. “If I had
diversified the map.”
a grocery store chain and I stocked all my stores
The Independent deal offers a glimpse into
the exact same, I’m not going to be successful,” he
what works at SouthState, which over the years
says. “But at a baseline, I’ve got leadership setting
has expanded into high-growth markets — from
the strategy about how we’re going to manage
its Florida home base into the Carolinas, Georgia,
inventory.”
Alabama and more recently, Texas and Tennessee.
For example, SouthState leans on private
“We’re in a spot where the economic activity is
banking in Palm Beach, Florida, one of the
greater than that of the nation as a whole,” says
wealthiest enclaves in the country. Further inland
SouthState’s president, Richard Murray IV. “We
in Okeechobee, the focus is on small business
have a better opportunity to grow, better oppor-
and retail. “Both are profitable for very different
tunity to participate in that economic activity.”
reasons,” says Young. “Our job at corporate is to
Acquisitions have fueled much of that growth.
provide the platform, and then they deliver.”
A longtime acquirer, SouthState more than
Scouten points to the bank’s low-cost deposit
doubled in size in 2020 via a merger of equals
base — around 10% to 20% below peers — as
