When we [initiated coverage](https://enduringequityresearch.com/2024/12/30/ssbk-navigating-q3-growth-with-acquisition-and-loan-portfolio-challenges/) back in December, we began with a HOLD rating. We set a price target of $43. After the conclusion of Q1 results, we maintain both metrics. Despite macroeconomic uncertainty persisting, SSBK has displayed impressive results with strong growth across the board. SSBK announced a [pending merger agreement](https://ir.southernstatesbank.net/news-releases/news-release-details/fb-financial-expand-alabama-and-georgia-merger-southern-states) with FB Financial Corporation ([NYSE: FBK](https://finance.yahoo.com/quote/FBK/)). This agreement was unanimously approved by both boards. It is expected to close in late Q3 or early Q4 2025.
If you want more additional info such as price target, data, and the entire macro overview (not necessary) it is located at my profile
\*I DO own shares in SSBK & regularly post about companies that may be of interest to the general community
# Key Drivers
* **Financial Performance:** SSBK continues their strong history of consistently impressive results with their sixth consecutive year of growth. Revenue grew to $26.5 million indicating growth of 20% as well as net income of $10.3 million and growth of 27.5%. Diluted EPS was $1.03 and grew by 14.5%. Despite economic conditions changing daily, net interest margin increased slightly to 3.75% with growth of 4.5% as well as net-interest income of $24.9 million (19.4%) and total non-interest income of $1.65 million (30.4%). The [acquisition of Century Bank](https://ir.southernstatesbank.net/news-releases/news-release-details/southern-states-bancshares-completes-acquisition-cbb-bancorp) on July 31, 2024, ensured a seamless transition. This acquisition contributed both organic and acquired growth throughout the quarter. The efficiency ratio stood at 46.42% indicating effective cost control measured with a good decline of -1%.
* **Strategic Acquisition With FB Financial Corporation:** On March 31, 2025, SSBK entered into a definitive merger agreement. As a result, SSBK shareholders will get 0.800 shares of FB Financial common stock for each share of SSBK. Based on FBK's closing stock price of $47.05 per share as of March 28, 2025, the implied transaction value is approximately $37.64 per SSBK share, or $381 million, in the aggregate. With Southern States closing stock price of $35.02 as of May 2, 2025, this implies upside of 7.4% for investors who hold the stock through the completion of the merger. At the time of the merger agreement, the agreed upon price represented a 17.5% premium to SSBK's stock closing price. As a result, the merger is expected to close in late Q3 or early Q4 2025, subject to regulatory approval.
For FBK, the pending merger agreement is a strategic acquisition. It will help to rejuvenate growth. This growth comes from a bank in SSBK that continues to showcase strength. Both banks are experiencing drastically different financial results. FBK has had three straight years of revenue, net income, and EPS declines. Q1 results have began to show a bounce back in performance. This may be a sign the bank has managed to overcome their difficulties in recent years.
# Risk Factors:
* **Economic Growth and Recession Risks:** The U.S. economy is potentially facing a notable slowdown. Real GDP contracted by 0.3% in Q1 2025, with forecasts for the year ranging between 1.1 & 1.8%, which would be a significant decline from the 2.8% growth seen in 2024. This deceleration is attributed to factors like elevated tariffs, diminished business investment, and waning consumer confidence. Major financial institutions, most notably [JP Morgan, have raised the probability of a U.S. recession](https://www.jpmorgan.com/insights/global-research/economy/recession-probability#:~:text=%E2%80%9CAnother%20important%20concern%20is%20that,long%20run%2C%E2%80%9D%20he%20added.&text=J.P.%20Morgan%20sees%20a%2060,by%20the%20end%20of%202025.) occurring within the year between 60% and 90%. While there are concerns from various institutions, the uncertainty due to rapidly changing environments makes predictions largely unreliable.
Hope this helps anyone interested in SSBK or FBK or the industry as whole & starts a conversation from the community!