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SouthState Bank Extends Reach Acquiring Independent Bank Group

June 11, 2024 News

SouthState Bank is the largest bank headquartered in Florida. It has recently taken a big leap into Texas and Colorado by acquiring the Independent Bank Group. The Independent Bank Group has $19 billion in assets and 92 branches in some of the largest markets in Colorado and Texas. 

The $2 billion purchase, still awaiting approval, increases SouthState’s assets to $65 billion. SouthState Bank’s stock previously traded on the NASDAQ, but is now on the New York Stock Exchange since 2023 (SSB). It was selling at nearly $80 a share in mid-May of 2024. 

Rendering of SouthState’s eventual move to Downtown Tampa, FL.

“It’s an exciting time for us to grow the bank to get some good markets,” said Dale Dreyer, executive vice president and division president of the Central Florida region for SouthState. Dryer previously was regional president of CenterState, which was founded in Polk County. 

When the acquisition is finalized early next year, SouthState will have 343 branches and more than 6,000 employees.  

“We’re excited to welcome them into the SouthState family,” he said.  

A Merger and An Acquisition

The 2020 merger of CenterState Bank and SouthState Bank made sense: SouthState and CenterState management teams were well-known to each other and both operated under a decentralized model that empowers local bankers to make decisions for their clients. It also allowed CenterState to provide more products and services to its clients. 

In addition, the two banks had no geographic overlap, serving 10 of the 15 largest MSAs (metropolitan statistical areas) in Florida, Virginia, North Carolina, South Carolina, Georgia and Alabama. 

SouthState President John Corbett’s philosophy, Dreyer said, was to move into similar-sized markets in high-growth areas like Tennessee or Texas. 

“We look at the MSAs and feel like if you’re in a high-growth area, it helps the economy,” he said. “Whenever businesses are being formed, people move into town, spaces like houses and shopping centers are being built for them – that’s all good for the economy.” 

The acquisition now puts SouthState in 12 of the 15 fastest-growing MSAs in the U.S., he said. “That fits our operating model of trying to go to high growth states.” 

Independent also shares SouthState’s belief in decentralized authority. So, every decision made doesn’t need to go through headquarters first. 

“SouthState has over 40 regions, each run by a market president,” Dreyer said. “They’re involved in local chambers and economic development groups. They are Kiwanians and Rotarians. You really know what’s going on in your local markets, and you make 80% of decisions. Independent operates the same way we do. They fit our operating model and culture.” 

The Preparation

Technology was the biggest part in preparing for the purchase.  

“In banking these days, you have to be omnichannel, you have to have tech capabilities for the person who wants to pay bills on a Saturday afternoon or at 4 a.m.” Dreyer said. “We’ve gone from being under $1 billion locally to a $45 billion bank. Along the way we’ve had to invest in more technology.” 

The bank increased its spending on technology 75% — almost $70 million more a year – since 2020 to stay current, partnering with some of the best-in-class type platforms. He said, “We needed to upgrade technology and absorb the merger of equals.” These upgrades include planning for future growth as well.  

Now, its customer-care center has state-of-the-art technology, human resources, new platforms and more. “All of these platforms help business clients with new areas banks are going into, like instantaneous payments. We are one of a few banks our size that have that. Those are things that are attractive to Independent Bank. We have had to continue to invest heavily in technology to keep information safe and to do business easily if a client wants to.” 

As the bank grows, it spreads costs over a bigger client base so it can continue to move toward Gold Standards, Dreyer said. “Every year we update to make sure we use the technology as efficiently as we can.” 

Benefits in Polk

Staying up to date with tech helps customers in Polk County. SouthState is in the homestretch of rolling out two or three new systems that will make many processes easier, like opening new accounts, Dreyer said.  

In addition to having more access to ATMs, commercial clients will have a big advantage, he said. “In Polk we have a huge transportation logistics hub because it’s convenient to transport out of our market, and we export out of here to states we’re in. Doing business in those markets makes it convenient for business-to-business transactions. Now, if a local client wants to do business in Dallas, they can work with a bank there – it will be considered an in-market deal once the acquisition closes.” 

“A lot of our customers travel, so instead of having access to 200 branches in the Southeast, we now have a branch network in Colorado and most of the big markets in Texas.” 

Independent Bank Group

Much of the current leadership at Independent Bank Group are preparing to retire. This is one reason for the sale of the high-performing bank, which has offices in large markets like Dallas, Houston, San Antonio, Fort Collins and Denver

“A lot of other leaders there are stepping up to manage those markets,” Dreyer said. “It will be about a year to do the system conversion. We don’t want to overload employees.”

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