The biggest U.S. bank acquisition signed in 2024 just became the first to close in 2025.
SouthState Corp. dotted the i's and crossed the t's on its $2 billion, all-stock purchase of Independent Bank Group, completing the merger on Jan. 1. The deal, which
Merger and acquisition conversations between the banks first started about 12 months ago, when two longtime friends — Independent Chairman and CEO David Brooks and SouthState CEO John Corbett — met for coffee in New York City. The deal passed a
Corbett said in a prepared statement Thursday that it had been a "pleasure" working with Independent.
"Together, we will continue building our company with an entrepreneurial business model in the fastest growing markets in the country," Corbett said.
With the completion of the deal, Brooks, along with two other board members from Texas-based Independent, joined SouthState's roster of directors. Brooks, who will stay on at the Florida company for at least two years, will also receive a lump sum payment of nearly $18 million in connection with the merger, per the agreement.
Several other executives from Independent will also join SouthState to help integrate or lead certain business lines.
To pay for Independent, SouthState issued 24.9 million shares at $80.85 each — the closing price of the stock when the deal was hatched last May.
SouthState's stock price was down 2.36% Thursday, trading at $97.13. The bank's share value has gone up about 17% since the deal was announced. Investors from Independent now own about one-quarter of SouthState's common stock.
Independent had previously been active as a bank buyer, but it decided to sell itself when it seemed like there wasn't enough runway to grow safely without an infrastructure overhaul,
"Our company has always been focused on how to create scale, and do it in a way that creates a lot of shareholder value that we can't get on our own," Brooks said. "If I could have done it with my platform, I would have done it. But we didn't see the right opportunities."
The acquisition pushes SouthState to $65 billion of assets, crossing the $50 billion threshold that increases regulatory requirements. The company has been investing in technology and risk management capabilities for the last four years to prepare for the heightened standards.
UBS analyst Nicholas Holowko initiated coverage of SouthState a few weeks ago with a "buy" rating, writing that the bank had "sought after returns in a sought after market." Stephen Scouten, an analyst at Piper Sandler, wrote in a December note that the bank is a "high-quality franchise" and maintained his "overweight" rating.
The Independent acquisition will increase SouthState's balance-sheet liability sensitivity, Scouten said, which he called "highly unique in today's market." He added that shareholders will "benefit from seeing the fruit" of the deal if the Fed continues to cut interest rates, as cheaper deposits would help ease the compression on the bank's net interest margin.
SouthState Corp. plans to purchase Independent Bank Group in a $2 billion deal, marking an end to the latter bank's long run of buying companies. Chairman and CEO David Brooks pointed to a challenging interest rate environment and heightened regulatory scrutiny as reasons he decided to sell.
UBS' Holowko wrote in his note that the acquisition comes at an "advantageous time," adding that he thinks SouthState is "well positioned for the rest of this rate cycle." The rapid rise of interest rates a few years ago put pressure on banks' profitability, as the costs of deposits rose faster than the revenue derived from loans.
Holowko said that the fact that the Independent acquisition didn't
SouthState's purchase of Independent also could be a bellwether for a turning tide in bank M&A.
In recent years, declining stock prices and a tricky rate environment made it more difficult for banks to cut deals worth their while, and the Biden administration's 2021 call for enhanced regulatory scrutiny also slowed dealmaking.
Deal activity started to
