ACBI - SouthState Bank Has The Growth Potential But Improved Profitability Would Be A Big Help

• After a challenging 2021, SouthState posted a good pre-provision profit beat to close the year, as well as strong loan origination growth.
• It will take a little while for SouthState's net interest margin to rebound, but rate sensitivity is well above average and the bank is leveraged to fast-growing loan markets.
• Improved profitability (better opex efficiency) would be a big help to sentiment, but I expect M&A to remain a significant growth driver.
• I think SouthState has above-average beat-and-raise potential and I like the basic thesis here, but it's hard for me to see the shares as significantly undervalued now.

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