** Brokerage Raymond James raises regional U.S. bank South State SSB.N to "strong buy" from "outperform"; cuts PT to $115 from $120

** "Credit protection from marking Independent Bank's balance sheet along with legacy SSB’s strong underwriting track record should assuage fears if an economic downturn materializes," says brokerage

** SSB acquired Texas-based smaller rival Independent Bank Group for about $2 bln in May last year

** Brokerage says net interest margin expansion from deal synergies should provide relatively less EPS downside versus many peers

** As of last close, SSB shares down 7.3% YTD, compared with a 4.2% decline in S&P 500 .SPX index

(Reporting by Ateev Bhandari in Bengaluru)

((Ateev.Bhandari@thomsonreuters.com; ))