Does the SouthState Bank Merger Signal a New Value Opportunity for Investors in 2025?

• Wondering if SouthState Bank is an overlooked bargain or priced just right? Let's dive into what the numbers are saying about its value and where it might be headed next.
• Despite a tricky year with a -17.3% return, SouthState Bank’s stock has shown hints of volatility with a 3.1% gain this past week.
• Investors are buzzing after SouthState Bank announced a strategic merger with a regional peer this quarter, along with news that regulators have completed their review. These developments have added momentum and could reshape the growth outlook.
• When it comes to valuation checks, SouthState Bank scores 4 out of 6, meaning it's undervalued on four key measures. Next, we’ll compare different ways to assess value, but stick around for a smarter angle you won't want to miss by the end of this article.

Find out why SouthState Bank's -17.3% return over the last year is lagging behind its peers.

Approach 1: SouthState Bank Excess Returns Analysis

The Excess Returns valuation model focuses on how effectively a company puts its equity capital to work, comparing the returns SouthState Bank earns above the basic cost of capital. This approach looks at the value added by strong management and efficient capital allocation, measuring how much profit the bank produces for each dollar of equity.

For SouthState Bank, the numbers paint an encouraging picture. The company’s latest Book Value stands at $89.14 per share, while analysts estimate Stable Earnings Per Share (EPS) of $9.77, based on projected future Return on Equity from eight analysts. The Cost of Equity is $8.03 per share, meaning the bank is generating an Excess Return of $1.74 per share above that threshold. The Average Return on Equity is a healthy 9.97%. Furthermore, the Stable Book Value is projected at $97.99 per share, supported by forecasts from nine analysts.

Based on these figures, the Excess Returns model calculates an intrinsic value for SouthState Bank’s shares that is 32.6% higher than the current price. This result may indicate undervaluation, particularly when considering the solid fundamentals shown by key Excess Returns measures.

Result: UNDERVALUED

Our Excess Returns analysis suggests SouthState Bank is undervalued by 32.6%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for SouthState Bank.

Approach 2: SouthState Bank Price vs Earnings

For profitable companies like SouthState Bank, the Price-to-Earnings (PE) ratio stands out as a practical valuation metric. It gives investors a quick snapshot of how much they are paying for each dollar of the bank’s earnings. A higher PE often reflects higher growth expectations or lower perceived risk, while a lower PE may indicate slower growth or greater uncertainty. What counts as a "normal" or "fair" PE ratio depends largely on industry outlook, growth potential, and overall risk profile.

Currently, SouthState Bank trades at a PE ratio of 13x, which is just a touch above the industry average of 11.4x and peers at 12.7x. This puts the stock slightly above the typical range for the Banks sector, though not by a wide margin. The “Fair Ratio,” Simply Wall St’s proprietary PE benchmark, for SouthState Bank sits at 13.8x. This metric stands out because, unlike straightforward peer comparisons, it factors in the company’s projected earnings growth, profit margins, market cap, industry specific trends, and even unique risks.

Looking at the numbers, SouthState Bank’s current PE multiple of 13x lands almost exactly where the Fair Ratio suggests it should, implying the market is pricing in the correct blend of risk and reward. The PE is neither stretched nor discounted in any meaningful way.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1433 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your SouthState Bank Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. Narratives are stories investors create to explain what they believe about a company’s future and why, blending real-world context with projected numbers like future revenue, profit margins, and fair value. This approach connects SouthState Bank’s unique business story to a living forecast, then directly to an up-to-date fair value estimate. This makes it easier to see if current prices make sense.

More than just a static score, Narratives on Simply Wall St’s Community page are simple for anyone to use and are updated dynamically as new information, such as earnings or news, becomes available. This gives investors the ability to quickly compare their fair value with the current share price and spot opportunities. For example, some SouthState Bank Narratives see franchise momentum, loan growth, and successful acquisitions contributing toward a fair value estimate of around $116 per share. Others focus on risks like narrowing net interest margins or sector volatility and assign a far lower fair value. What is your narrative, and how does it compare?

Do you think there's more to the story for SouthState Bank? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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