Raymond James upgrades South State as deal checks the boxes

Raymond James upgraded South State (SSB) to Outperform from Market Perform with a $90 price target. The analyst says the company’s acquisition of Independent Bank (IBTX) “checks essentially all the boxes” investors are looking for in a deal, including double-digit earnings accretion. The cultural aspects of the deal are “very compelling,” as the conservative credit cultures at both SouthState and Independent Bank have led to best-in-class metrics for several years, the analyst tells investors in a research note. As such, the firm now views South State’s risk/reward positively and sees potential upside to its pro forma modeling with Independent Bank “under-earning given its liability-sensitive balance sheet, reduced growth, and ongoing fixed asset repricing story.”