SouthState Bank Corp

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) relates to the financial statements contained in this Quarterly Report beginning on page 3. For further information, refer to the MD&A appearing in the Annual Report on Form 10-K for the year ended December 31, 2024. Results for the three and six months ended June 30, 2025, are not necessarily indicative of the results for the year ending December 31, 2025, or any future period.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) relates to the financial statements contained in this Quarterly Report beginning on page 3. For further information, refer to the MD&A appearing in the Annual Report on Form 10-K for the year ended December 31, 2024. Results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results for the year ending December 31, 2025, or any future period.

Previous wording

Unless otherwise mentioned or unless the context requires otherwise, references to “SouthState,” the “Company,” “we,” “us,” “our” or similar references mean SouthState Corporation and its consolidated subsidiaries. References to the “Bank” means SouthState Corporation’s wholly owned subsidiary, SouthState Bank, National Association, a national banking association.

Current wording

Unless otherwise mentioned or unless the context requires otherwise, references to “SouthState,” the “Company,” “we,” “us,” “our” or similar references mean SouthState Bank Corporation and its consolidated subsidiaries. References to the “Bank” means SouthState Bank Corporation’s wholly owned subsidiary, SouthState Bank, National Association, a national banking association.

Previous wording

SouthState Corporation is a financial holding company headquartered in Winter Haven, Florida, and was incorporated under the laws of South Carolina in 1985. We provide a wide range of banking services and products to our customers through our Bank. The Bank operates SouthState|DuncanWilliamsSouthState|DuncanWilliams Securities Corp. (“SouthState|DuncanWilliamsSouthState|DuncanWilliams”), a registered broker-dealer headquartered in Memphis, Tennessee that serves primarily institutional clients across the U.S. in the fixed income business. The Bank also operates SouthState Advisory, Inc., a wholly-owned registered investment advisor, and Private Capital Management, LLC, also a wholly-owned registered investment advisor which it acquired through the Independent acquisition completed on January 1, 2025. The Bank, through its Corporate Billing Division, provides factoring, invoicing, collection and accounts receivable management services to transportation companies and automotive parts and service providers nationwide. In 2023, the Bank formed SSB First Street Corporation, an investment subsidiary headquartered in Wilmington, Delaware, to hold tax-exempt municipal investment securities as part of the Bank’s investment portfolio. The holding company also owns SSB Insurance Corp., a captive insurance subsidiary pursuant to Section 831(b) of the U.S. Tax Code.

Current wording

SouthState Bank Corporation is a financial holding company headquartered in Winter Haven, Florida. During the third quarter of 2025, the Company was redomiciled to the state of Florida through the merger of SouthState Corporation, a South Carolina corporation, with and into SouthState Bank Corporation, a Florida corporation wholly owned by SouthState Corporation prior to such merger and adopted its current name. We provide a wide range of banking services and products to our customers through our Bank. The Bank operates SouthState|DuncanWilliams Securities Corp. (“SouthState|DuncanWilliams”), a registered broker-dealer headquartered in Memphis, Tennessee that serves primarily institutional clients across the U.S. in the fixed income business. The Bank also operates SouthState Advisory, Inc., a wholly-owned registered investment advisor, and Private Capital Management LLC, also a wholly-owned registered investment advisor which it acquired through the Independent acquisition completed on January 1, 2025. The Bank, through its Corporate Billing Division, provides factoring, invoicing, collection and accounts receivable management services to transportation companies and automotive parts and service providers nationwide. In 2023, the Bank formed SSB First Street Corporation, an investment subsidiary headquartered in Wilmington, Delaware, to hold tax-exempt municipal investment securities as part of the Bank’s investment portfolio. The holding company also owns SSB Insurance Corp., a captive insurance subsidiary pursuant to Section 831(b) of the U.S. Tax Code.

Previous wording

At June 30, 2025, we had approximately $65.9 billion in assets and 6,306 full-time equivalent employees. Through our Bank branches, ATMs and online banking platforms, we provide our customers with a wide range of financial products and services, through an eight (8) state footprint in Alabama, Colorado, Florida, Georgia, North Carolina, South Carolina, Texas, and Virginia. These financial products and services include deposit accounts such as checking accounts, savings and time deposits of various types, safe deposit boxes, bank money orders, wire transfer and ACH services, brokerage services and alternative investment products such as annuities and mutual funds, trust and asset management services, loans of all types, including business loans, agriculture loans, real estate-secured (mortgage) loans, personal use loans, home improvement loans, automobile loans, manufactured housing loans, boat loans, credit cards, letters of credit, home equity lines of credit, treasury management services, and merchant services.

Current wording

At September 30, 2025, we had approximately $66.0 billion in assets and 6,259 full-time equivalent employees. Through our Bank branches, ATMs and online banking platforms, we provide our customers with a wide range of financial products and services, through an eight (8) state footprint in Alabama, Colorado, Florida, Georgia, North Carolina, South Carolina, Texas, and Virginia. These financial products and services include deposit accounts such as checking accounts, savings and time deposits of various types, safe deposit boxes, bank money orders, wire transfer and ACH services, brokerage services and alternative investment products such as annuities and mutual funds, trust and asset management services, loans of all types, including business loans, agriculture loans, real estate-secured (mortgage) loans, personal use loans, home improvement loans, automobile loans, manufactured housing loans, boat loans, credit cards, letters of credit, home equity lines of credit, treasury management services, and merchant services.

Previous wording

The following discussion describes our results of operations for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, and also analyzes our financial condition as of June 30, 2025, as compared to December 31, 2024. Like most financial institutions, we derive most of our income from interest we receive on our loans and investments. Our primary source of funds for making these loans and investments is our deposits, on which we may pay interest. Consequently, one of the key measures of our success is the amount of our net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our interest-bearing liabilities, such as deposits. Another key measure is the spread between the yield we earn on these interest-earning assets and the rate we pay on our interest-bearing liabilities.

Current wording

The following discussion describes our results of operations for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, and also analyzes our financial condition as of September 30, 2025, as compared to December 31, 2024. Like most financial institutions, we derive most of our income from interest we receive on our loans and investments. Our primary source of funds for making these loans and investments is our deposits, on which we may pay interest. Consequently, one of the key measures of our success is the amount of our net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our interest-bearing liabilities, such as deposits. Another key measure is the spread between the yield we earn on these interest-earning assets and the rate we pay on our interest-bearing liabilities.

Previous wording

In October 2024, the CFPB finalized a rule to implement Section 1033 of the Dodd-Frank Act, which would require certain entities, including the Company and the Bank, to, among other things, make available to a consumer, upon request, information in its control or possession concerning the consumer financial product or service that the consumer obtained from that entity. In general, the rule also requires, among other things, data providers holding a consumer account, such as the Bank, to establish a developer interface satisfying certain data security specifications and other standards, through which the data provider can receive requests for, and provide, specific types of data covered by the rule in electronic, usable form to authorized third parties, including data aggregators. Under the rule, data providers are prohibited from, among other things, charging consumers or third parties fees for processing these consumer data requests. The rule also places certain data security, authorization and other obligations on third parties accessing covered data from data providers, which could include the Company and the Bank when acting in certain capacities. The rule requires third parties to limit their collection, use, and retention of the data received to only what is reasonably necessary to provide the consumers’ requested product or service. The compliance date for a depository institution data provider that holds at least $10 billion in total assets but less than $250 billion in total assets is April 1, 2027; however, following the issuance of the rule, a lawsuit was filed to challenge the rule in court. In May 2025, the CFPB filed a motion for summary judgment in the litigation, in which the CFPB stated that it had concluded that the final rule exceeds the agency’s statutory authority. As a result, the CFPB requested that the court grant the plaintiffs’ motion for summary judgment and vacate the final rule. The district court has not yet ruled on the CFPB’s motion.

Current wording

In October 2024, the CFPB finalized a rule to implement Section 1033 of the Dodd-Frank Act, which would require certain entities, including the Company and the Bank, to, among other things, make available to a consumer, upon request, information in its control or possession concerning the consumer financial product or service that the consumer obtained from that entity. In general, the rule also requires, among other things, data providers holding a consumer account, such as the Bank, to establish a developer interface satisfying certain data security specifications and other standards, through which the data provider can receive requests for, and provide, specific types of data covered by the rule in electronic, usable form to authorized third parties, including data aggregators. Under the rule, data providers are prohibited from, among other things, charging consumers or third parties fees for processing these consumer data requests. The rule also places certain data security, authorization and other obligations on third parties accessing covered data from data providers, which could include the Company and the Bank when acting in certain capacities. The rule requires third parties to limit their collection, use, and retention of the data received to only what is reasonably necessary to provide the consumers’ requested product or service. The compliance date for a depository institution data provider that holds at least $10 billion in total assets but less than $250 billion in total assets is April 1, 2027; however, following the issuance of the rule, a lawsuit was filed to challenge the rule in court. In May 2025, the CFPB filed a motion for summary judgment in the litigation, in which the CFPB stated that it had concluded that the final rule exceeds the agency’s statutory authority. In July 2025, the CFPB filed a motion to stay the proceedings while it conducts a new rulemaking process, which was granted by the district court. In August 2025, the CFPB issued an advanced notice of proposed rulemaking to reconsider its final rule under Section 1033 of the Dodd-Frank Act.

Previous wording

On June 13, 2025, the Company issued $350.0 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2035. The subordinated notes initially bear interest at an initial rate of 7.00% per annum, commencing on December 13, 2025, until June 13, 2030, after which interest will be payable at a floating rate equal to SOFR plus 319 basis points. Interest is payable semi-annually during the fixed rate period and quarterly during the floating rate period, in arrears. See accompanying Note 21 — Borrowings to our consolidated financial statements.

Current wording

On June 13, 2025, the Company issued $350.0 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2035. The subordinated notes initially bear interest at an initial rate of 7.00% per annum, commencing on June 13, 2025, until June 13, 2030, after which interest will be payable at a floating rate equal to SOFR plus 319 basis points. Interest is payable semi-annually during the fixed rate period and quarterly during the floating rate period, in arrears. The Company used the proceeds to redeem $405.0 million of the Company’s outstanding subordinated debentures in the third quarter of 2025 that had reached its call date and the end of its fixed rate period. After these redemptions, the Company has $525.0 million in outstanding principal of subordinated debentures as of September 30, 2025. See accompanying Note 21 — Borrowings to our consolidated financial statements.

Previous wording

On January 8, 2025, the Bank entered into an agreement for the purchase and sale of real property (the “Sale Agreement”) with entities affiliated with Blue Owl Real Estate Capital LLC (“Blue Owl”), providing for the sale to entities affiliated with Blue Owl of certain bank branch properties owned and operated by the Bank. The branch properties are located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. Under the Sale Agreement, the Bank has agreed, concurrently with the closing of the sale of the branches, to enter into triple net lease agreements (the “Lease Agreements”) with entities affiliated with Blue Owl, pursuant to which the Bank will lease each of the Branches (the “Sale-leaseback Transaction”). The Company completed the Sale-leaseback Transaction on February 28, 2025. See accompanying Note 8 — Leases to our consolidated financial statements.

Current wording

On January 8, 2025, the Bank entered into an agreement for the purchase and sale of real property (the “Sale Agreement”) with entities affiliated with Blue Owl Real Estate Capital LLC (“Blue Owl”), providing for the sale to entities affiliated with Blue Owl of certain bank branch properties owned and operated by the Bank. The branch properties are located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. Pursuant to the Sale Agreement, the Bank, concurrently with the closing of the sale of the branches, entered into triple net lease agreements (the “Lease Agreements”) with entities affiliated with Blue Owl, pursuant to which the Bank will lease each of the Branches (the “Sale-leaseback Transaction”). The Company completed the Sale-leaseback Transaction on February 28, 2025. See accompanying Note 8 — Leases to our consolidated financial statements.

Previous wording

One of the most significant judgments influencing the ACL is the macroeconomic forecasts from the third-party service provider. Changes in the economic forecasts may significantly affect the estimated credit losses which may potentially lead to materially different quantitatively modeled allowance levels from one reporting period to the next. Given the dynamic relationship between macroeconomic variables, it is difficult to estimate the impact of a change in any one individual variable on the ACL. SouthState uses a third-party service provider to support the economic forecast assumptions under CECL forecast by providing various levels of economic scenarios. These scenarios are weighted in accordance with management assessment of scenarios as well as expectations of the general market and industry conditions. To illustrate the sensitivity of these scenarios, if a 100% probability weighting was applied to the adverse scenario rather than using the probability-weighted three scenario approach, this would result in an increase in the ACL by approximately $219 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $131 million. The adverse scenario includes assumptions including, but not limited to, rising unemployment consistent with a recession, high levels of inflation and weakened consumer and business spending, elevated interest rates, tightening credit, widening Federal deficit, and exacerbated geopolitical and trade tensions. Conversely, the upside scenario includes assumptions such as a stronger domestic economy, swift resolution of international conflicts and strengthening global economy, more than full employment, reduced political tensions, and other favorable assumptions. This sensitivity analysis and related impact on the ACL is a hypothetical analysis and is not intended to represent management’s judgments at June 30, 2025.

Current wording

One of the most significant judgments influencing the ACL is the macroeconomic forecasts from the third-party service provider. Changes in the economic forecasts may significantly affect the estimated credit losses which may potentially lead to materially different quantitatively modeled allowance levels from one reporting period to the next. Given the dynamic relationship between macroeconomic variables, it is difficult to estimate the impact of a change in any one individual variable on the ACL. SouthState uses a third-party service provider to support the economic forecast assumptions under CECL forecast by providing various levels of economic scenarios. These scenarios are weighted in accordance with management assessment of scenarios as well as expectations of the general market and industry conditions. To illustrate the sensitivity of these scenarios, if a 100% probability weighting was applied to the adverse scenario rather than using the probability-weighted three scenario approach, this would result in an increase in the ACL by approximately $216 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $127 million. The adverse scenario includes assumptions including, but not limited to, rising unemployment consistent with a recession, high levels of inflation and weakened consumer and business spending, elevated interest rates, tightening credit, widening Federal deficit, and exacerbated geopolitical and trade tensions. Conversely, the upside scenario includes assumptions such as a stronger domestic economy, swift resolution of international conflicts and strengthening global economy, more than full employment, reduced political tensions, and other favorable assumptions. This sensitivity analysis and related impact on the ACL is a hypothetical analysis and is not intended to represent management’s judgments at September 30, 2025.

Previous wording

We reported consolidated net income of $215.2 million, or diluted earnings per share (“EPS”) of $2.11, for the second quarter of 2025 compared to consolidated net income of $132.4 million, or diluted EPS of $1.73, in the comparable period of 2024, a 62.6% increase in consolidated net income and a 22.0% increase in diluted EPS. During the six months ended June 30, 2025, we reported consolidated net income of $304.3 million, or diluted EPS of $2.99, compared to consolidated net income of $247.4 million, or diluted EPS of $3.23, in the comparable period of 2024, a 23.0% increase in consolidated net income and a 7.4% decrease in diluted EPS. The $82.9 million increase in consolidated net income for the second quarter of 2025 compared to the same period of 2024 was the net result of the following items:

Current wording

We reported consolidated net income of $246.6 million, or diluted earnings per share (“EPS”) of $2.42, for the third quarter of 2025 compared to consolidated net income of $143.2 million, or diluted EPS of $1.86, in the comparable period of 2024, a 72.3% increase in consolidated net income and a 30.1% increase in diluted EPS. During the nine months ended September 30, 2025, we reported consolidated net income of $550.9 million, or diluted EPS of $5.41, compared to consolidated net income of $390.6 million, or diluted EPS of $5.09, in the comparable period of 2024, a 41.0% increase in consolidated net income and a 6.3% increase in diluted EPS. The $103.5 million increase in consolidated net income for the third quarter of 2025 compared to the same period of 2024 was the net result of the following items:

Previous wording

Our quarterly efficiency ratio decreased to 52.7% in the second quarter of 2025 compared to 57.0% in the second quarter of 2024. The decrease in the efficiency ratio compared to the second quarter of 2024 was the result of a 56.2% increase in the total of tax-equivalent net interest income and noninterest income being greater than a 44.4% increase in noninterest expense (excluding amortization of intangibles). The overall increase in both tax-equivalent net interest income and noninterest income and noninterest expense was due to the acquisition of Independent in the first quarter of 2025. The higher increase in tax-equivalent net interest income and noninterest income was due to the $264.3 million increase in interest income related to loans held for investment, which was mainly attributable to loans acquired in the acquisition of Independent.

Current wording

Our quarterly efficiency ratio decreased to 49.9% in the third quarter of 2025 compared to 56.6% in the third quarter of 2024. The decrease in the efficiency ratio compared to the third quarter of 2024 was the result of a 63.9% increase in the total of tax-equivalent net interest income and noninterest income being greater than a 44.5% increase in noninterest expense (excluding amortization of intangibles). The overall increase in both tax-equivalent net interest income and noninterest income and noninterest expense was due to the acquisition of Independent in the first quarter of 2025. The higher increase in tax-equivalent net interest income and noninterest income was due to the $285.9 million increase in interest income related to loans held for investment, which was mainly attributable to loans acquired in the acquisition of Independent.

Previous wording

Basic and diluted EPS were $2.12 and $2.11, respectively, for the second quarter of 2025, compared to $1.74 and $1.73, respectively, for the second quarter of 2024. The increase in basic and diluted EPS was due to a 62.6% increase in net income in the second quarter of 2025 compared to the same period in 2024. The effects from the increase in net income were partially offset by an increase in average basic common shares of 33.1%. The increase in net income in the second quarter of 2025 was mainly attributable to an increase in net interest income of $227.7 million derived from the interest-earning assets and interest-bearing liabilities acquired from Independent in the first quarter of 2025. The increase in average basic common shares was mainly due to the issuance of approximately 24.9 million shares of common stock related to the acquisition of Independent

Current wording

Basic and diluted EPS were $2.44 and $2.42, respectively, for the third quarter of 2025, compared to $1.88 and $1.86, respectively, for the third quarter of 2024. The increase in basic and diluted EPS was due to a 72.3% increase in net income in the third quarter of 2025 compared to the same period in 2024. The effects from the increase in net income were partially offset by an increase in average basic common shares of 32.7%. The increase in net income in the third quarter of 2025 was mainly attributable to an increase in net interest income of $248.2 million derived from the interest-earning assets and interest-bearing liabilities acquired from Independent in the first quarter of 2025. The increase in average basic common shares was mainly due to the issuance of approximately 24.9 million shares of common stock related to the acquisition of Independent.

Previous wording

Non-tax equivalent net interest income increased $227.7 million, or 65.0%, to $577.9 million in the second quarter of 2025 compared to $350.3 million in the same period in 2024. Interest-earning assets averaged $57.7 billion during the three months period ended June 30, 2025, compared to $41.0 billion for the same period in 2024, an increase of $16.7 billion, or 40.7%. Interest-bearing liabilities averaged $40.6 billion during the three months period ended June 30, 2025, compared to $27.7 billion for the same period in 2024, an increase of $12.9 billion, or 46.4%. Non-tax equivalent net interest income increased $428.3 million, or 61.7%, to $1.1 billion in the six months ended June 30, 2025, compared to $694.2 million in the same period in 2024. Interest-earning assets averaged $57.6 billion during the six months ended June 30, 2025, compared to $40.8 billion during the same period in 2024. Interest-bearing liabilities averaged $40.7 billion during the six months ended June 30, 2025, compared to $27.6 billion for the same period in 2024, an increase of $13.0 billion, or 47.2%.

Current wording

Non-tax equivalent net interest income increased $248.2 million, or 70.6%, to $599.7 million in the third quarter of 2025 compared to $351.5 million in the same period in 2024. Interest-earning assets averaged $58.7 billion during the three months period ended September 30, 2025, compared to $41.2 billion for the same period in 2024, an increase of $17.5 billion, or 42.5%. Interest-bearing liabilities averaged $41.4 billion during the three months period ended September 30, 2025, compared to $28.1 billion for the same period in 2024, an increase of $13.3 billion, or 47.6%. Non-tax equivalent net interest income increased $676.5 million, or 64.7%, to $1.7 billion in the nine months ended September 30, 2025, compared to $1.0 billion in the same period in 2024. Interest-earning assets averaged $58.0 billion during the nine months ended September 30, 2025, compared to $41.0 billion during the same period in 2024, an increase of $17.0 billion, or 41.5%. Interest-bearing liabilities averaged $40.9 billion during the nine months ended September 30, 2025, compared to $27.8 billion for the same period in 2024, an increase of $13.1 billion, or 47.4%.

Previous wording

The Federal Reserve implemented a total rate cut of 100 basis-point, beginning with a 50 basis-point reduction in mid-September 2024. This was followed by two additional cuts of 25 basis-point each, one in early November 2024 and the other in mid-December 2024. These rate cuts came after a series of rate hikes that began in March 2022, resulting in a target range of 4.25% to 4.50% at June 30, 2025. As a result, the Company operated in a comparatively lower rate environment for the three and six months ended June 30, 2025 compared to the same time periods in 2024. Some key highlights are outlined below:

Current wording

The Federal Reserve implemented a total rate cut of 125 basis-point, beginning with a 50 basis-point reduction in mid-September 2024. This was followed by three additional cuts of 25 basis-point each, one in early November 2024, one in mid-December 2024, and the latest one in mid-September 2025. These rate cuts came after a series of rate hikes that began in March 2022, resulting in a target range of 4.00% to 4.25% at September 30, 2025. As a result, the Company operated in a comparatively lower rate environment for the three and nine months ended September 30, 2025 compared to the same time periods in 2024. Some key highlights are outlined below:

Previous wording

The tables below summarize the analysis of changes in interest income and interest expense for the three and six months ended June 30, 2025, and 2024 and net interest margin on a tax equivalent basis:

Current wording

The tables below summarize the analysis of changes in interest income and interest expense for the three and nine months ended September 30, 2025, and 2024 and net interest margin on a tax equivalent basis:

Previous wording

The interest earned on investment securities increased by $29.7 million and $45.8 million, respectively, in the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024. This is a result of the Bank carrying a higher average balance in investment securities along with an increase in the yield on the investment portfolio in 2025 compared to the same period in 2024. The average balance of investment securities increased $1.3 billion and $1.1 billion, respectively, for the three and six months ended June 30, 2025, from the comparable periods in 2024, primarily due to the Company acquiring $1.6 billion in investment securities through the acquisition of Independent. These securities were subsequently sold during the first quarter 2025 with the proceeds reinvested into purchases of new securities that fit the Company’s investment strategy. The increase in investment securities related to the Independent acquisition was partially offset due to maturities and mortgage paydowns within the AFS and HTM investment portfolios. The yield on the investment securities increased 102 basis points and 79 basis points, respectively, during the three and six months ended June 30, 2025, compared to the same periods in 2024. The Company purchased investment securities, including the reinvestment of the Independent investment portfolio, at current market rates during the first quarter of 2025. The Company saw an improvement in the yield and risk weightings, as well as a shortened duration, of the investment portfolio for a full quarter during the current quarter as a result of the securities repositioning completed during the first quarter of 2025.

Current wording

The interest earned on investment securities increased by $32.4 million and $78.2 million, respectively, in the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024. This is a result of the Bank carrying a higher average balance in investment securities along with an increase in the yield on the investment portfolio in 2025 compared to the same period in 2024. The average balance of investment securities increased $1.5 billion and $1.2 billion, respectively, for the three and nine months ended September 30, 2025, from the comparable periods in 2024, primarily due to the Company acquiring $1.6 billion in investment securities through the acquisition of Independent. These securities were subsequently sold during the first quarter 2025 with the proceeds reinvested into purchases of new securities that fit the Company’s investment strategy. The increase in investment securities related to the Independent acquisition was partially offset due to maturities and mortgage paydowns within the AFS and HTM investment portfolios. The yield on the investment securities increased 107 basis points and 89 basis points, respectively, during the three and nine months ended September 30, 2025, compared to the same periods in 2024. The Company purchased investment securities, including the reinvestment of the Independent investment portfolio, at current market rates during the first quarter of 2025. The Company saw an improvement in the yield and risk weightings, as well as a shortened duration, of the investment portfolio for a full quarter during the current quarter as a result of the securities repositioning completed during the first quarter of 2025.

Previous wording

Interest earned on loans held for investment increased $264.3 million to $741.6 million and increased $522.2 million to $1.5 billion, respectively, during the three and six months ended June 30, 2025, from the comparable periods in 2024. Interest earned on loans held for investment included loan accretion income recognized during the three and six months ended June 30, 2025, and 2024 of $63.5 million, $125.3 million, $4.4 million and $8.7 million, respectively, an increase of $59.1 million and $116.6 million, respectively. Some key highlights for the quarter ended June 30, 2025, are outlined below:

Current wording

Interest earned on loans held for investment increased $285.9 million to $777.3 million and increased $808.2 million to $2.2 billion, respectively, during the three and nine months ended September 30, 2025, from the comparable periods in 2024. Interest earned on loans held for investment included loan accretion income recognized during the three and nine months ended September 30, 2025, and 2024 of $83.0 million, $208.3 million, $2.9 million and $11.5 million, respectively, an increase of $80.1 million and $196.8 million, respectively. Some key highlights for the quarter ended September 30, 2025, are outlined below:

Previous wording

The quarter-to-date average balance of interest-bearing liabilities increased by $12.9 billion, or 46.4%, in the second quarter of 2025 compared to the same period in 2024. The cost of interest-bearing liabilities decreased slightly to 2.60% compared to the same period in 2024, while the overall cost of funds, including demand deposits, slightly increased by 4 basis points to 1.94% in the second quarter of 2025, compared to the same period in 2024. Some key highlights for the quarter ended June 30, 2025, compared to the same period in 2024 include:

Current wording

The quarter-to-date average balance of interest-bearing liabilities increased by $13.3 billion, or 47.6%, in the third quarter of 2025 compared to the same period in 2024. The cost of interest-bearing liabilities decreased slightly to 2.70% compared to the same period in 2024, while the overall cost of funds, including demand deposits, slightly increased by 5 basis points to 2.04% in the third quarter of 2025, compared to the same period in 2024. Some key highlights for the quarter ended September 30, 2025, compared to the same period in 2024 include:

Previous wording

Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. Average noninterest-bearing deposits increased $3.1 billion, or 29.1%, to $13.6 billion in the second quarter of 2025 compared to $10.6 billion during the same period in 2024. The increase in the average balance of noninterest bearing deposits was primarily due to noninterest-bearing deposit balances assumed from Independent during the first quarter of 2025.

Current wording

Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. Average noninterest-bearing deposits increased $3.1 billion, or 30.1%, to $13.5 billion in the third quarter of 2025 compared to $10.4 billion during the same period in 2024. The increase in the average balance of noninterest bearing deposits was primarily due to noninterest-bearing deposit balances assumed from Independent during the first quarter of 2025.

Previous wording

Noninterest income provides us with additional revenues that are significant sources of income. For the three months ended June 30, 2025, and 2024, noninterest income comprised 13.1%, and 17.7%, respectively, of total net interest income and noninterest income. For the six months ended June 30, 2025, and 2024, noninterest income comprised 13.3%, and 17.5%, respectively, of total net interest income and noninterest income.

Current wording

Noninterest income provides us with additional revenues that are significant sources of income. For the three months ended September 30, 2025, and 2024, noninterest income comprised 14.2%, and 17.6%, respectively, of total net interest income and noninterest income. For the nine months ended September 30, 2025, and 2024, noninterest income comprised 13.6%, and 17.5%, respectively, of total net interest income and noninterest income.

Previous wording

Noninterest income increased by $11.6 million, or 15.4%, during the second quarter of 2025 compared to the same period in 2024. This quarterly change in total noninterest income resulted from the following:

Current wording

Noninterest income increased by $24.2 million, or 32.2%, during the third quarter of 2025 compared to the same period in 2024. This quarterly change in total noninterest income resulted from the following:

Previous wording

Noninterest income increased by $26.1 million, or 17.8%, during the six months ended June 30, 2025, compared to the same period in 2024. The categories and explanations for the fluctuations year-to-date, except the items discussed below, are similar to the ones noted above in the quarterly comparison.

Current wording

Noninterest income increased by $50.3 million, or 22.7%, during the nine months ended September 30, 2025, compared to the same period in 2024. The categories and explanations for the fluctuations year-to-date, except the items discussed below, are similar to the ones noted above in the quarterly comparison.

Previous wording

Noninterest expense increased by $126.3 million, or 50.8%, in the second quarter of 2025 compared to the same period in 2024. The quarterly increase in total noninterest expense primarily resulted from the following:

Current wording

Noninterest expense increased by $125.5 million, or 50.8%, in the third quarter of 2025 compared to the same period in 2024. The quarterly increase in total noninterest expense primarily resulted from the following:

Previous wording

Noninterest expense increased by $285.9 million, or 57.4%, during the six months ended June 30, 2025, compared to the same period in 2024. The categories and explanations for the fluctuations year-to-date, except the items discussed below, are similar to the ones noted above in the quarterly comparison.

Current wording

Noninterest expense increased by $411.3 million, or 55.2%, during the nine months ended September 30, 2025, compared to the same period in 2024. The categories and explanations for the fluctuations year-to-date, except the items discussed below, are similar to the ones noted above in the quarterly comparison.

Previous wording

Our effective tax rate was 23.73% for the three months ended June 30, 2025, compared to 23.42% for the three months ended June 30, 2024. The increase in the effective rate for the quarter, when compared to the same period in the prior year, is driven primarily by an increase in pretax book income as well as higher non-deductible executive compensation and disallowed FDIC premiums. This increase was partially offset by an increase in the cash surrender value of BOLI policies and an increase in tax-exempt income in the current quarter.

Current wording

Our effective tax rate was 23.25% for the three months ended September 30, 2025, compared to 23.24% for the three months ended September 30, 2024. The effective rate for the quarter was effectively flat when compared to the same period in the prior year, which is the result of an increase in pretax book income, an increase in tax-exempt interest income, and increase in the cash surrender value of BOLI policies. These increases were offset by an increase in non-deductible executive compensation and disallowed FDIC premiums.

Previous wording

Our effective tax rate for the first six months of the year was 24.57% compared to 24.19% for the first six months of 2024. The increase in the year-to-date effective tax rate compared to the same period of 2024 is due primarily to the increase in pretax book income and higher non-deductible executive compensation and disallowed FDIC premiums. This was partially offset by an increase in the cash surrender value of BOLI policies and an increase in tax-exempt income in the first six months of the current year, compared to 2024.

Current wording

Our effective tax rate for the first nine months of the year was 23.99% compared to 23.84% for the first nine months of 2024. The increase in the year-to-date effective tax rate compared to the same period of 2024 is due primarily to the increase in pretax book income and higher non-deductible executive compensation and disallowed FDIC premiums. This was partially offset by an increase in the cash surrender value of BOLI policies and an increase in tax-exempt income in the first nine months of the current year, compared to 2024.

Previous wording

Our total assets increased approximately $19.5 billion, or 42.1%, from December 31, 2024, to June 30, 2025, to approximately $65.9 billion. Within total assets, cash and cash equivalents increased by $2.1 billion, or 148.8%, and net loans increased $13.2 billion, or 39.5%, while investment securities increased $1.6 billion, or 24.0%, during the period. Within total liabilities, deposits grew $15.6 billion, or 41.1%, and federal funds purchased and securities sold under agreements to repurchase increased by $115.6 million, or 22.5%. Total borrowings increased by $708.2 million, or 180.9%. Total shareholder’s equity increased $2.9 billion, or 49.4%. The increases in total assets, cash and cash equivalents, investment securities, loans, deposits, other borrowings and equity were all primarily driven by the acquisition of Independent on January 1, 2025. The increase in cash and cash equivalents was also due to the cash received from the sale-leaseback transaction of approximately $456.4 million, an increase in deposits, excluding deposits assumed from Independent, of approximately $427.4 million, an increase in federal funds purchased and securities sold under agreements to repurchase of $115.6 million and due to the issuance of new subordinated debentures of $350.0 million in the second quarter of 2025. The increase in deposits, excluding deposits assumed from Independent, was mainly from the increases in interest-bearing checking and time deposit accounts. Our loan to deposit ratio was 88% and 89% at June 30, 2025 and December 31, 2024, respectively, while our percentage of noninterest-bearing deposit accounts to total deposits was 26% and 27%, respectively at June 30, 2025, and December 31, 2024.

Current wording

Our total assets increased approximately $19.7 billion, or 42.4%, from December 31, 2024, to September 30, 2025, to approximately $66.0 billion. Within total assets, cash and cash equivalents increased by $1.8 billion, or 125.9%, and net loans increased $13.8 billion, or 40.6%, while investment securities increased $1.7 billion, or 25.1%, during the period. Within total liabilities, deposits grew $16.0 billion, or 42.1%, and federal funds purchased and securities sold under agreements to repurchase increased by $79.2 million, or 15.4%. Total borrowings increased by $304.9 million, or 77.9%. Total shareholder’s equity increased $3.1 billion, or 53.0%. The increases in total assets, cash and cash equivalents, investment securities, loans, deposits, other borrowings and equity were all primarily driven by the acquisition of Independent on January 1, 2025. The increase in cash and cash equivalents was also due to the cash received from the sale-leaseback transaction of approximately $456.4 million, an increase in deposits, excluding deposits assumed from Independent, of approximately $803.7 million, and an increase in federal funds purchased and securities sold under agreements to repurchase of $79.2 million. The increase in deposits, excluding deposits assumed from Independent, was mainly due to increases in interest-bearing checking accounts and time deposit accounts. These increases were partially offset by cash used to fund net loan growth, excluding loans assumed from Independent, of $773.4 million. Our loan to deposit ratio was 88% and 89% at September 30, 2025 and December 31, 2024, respectively, while our percentage of noninterest-bearing deposit accounts to total deposits was 25% and 27%, respectively at September 30, 2025, and December 31, 2024.

Previous wording

We use investment securities, our second largest category of earning assets, to generate interest income, provide liquidity, fund loan demand or deposit liquidation, and to pledge as collateral for public funds deposits, repurchase agreements, derivative exposures and to augment borrowing capacity at the Federal Reserve Bank of Atlanta, and the Federal Home Loan Bank of Atlanta. At June 30, 2025, investment securities totaled $8.4 billion, compared to $6.8 billion at December 31, 2024, an increase of $1.6 billion, or 24.0%. During the first quarter of 2025, the Company acquired $1.6 billion in investment securities through the acquisition of Independent. A majority of these securities were subsequently sold during the quarter with the proceeds reinvested into securities that fit the Company’s investment strategy. The Company executed a securities repositioning during the first quarter 2025 and sold investment securities with a book value of approximately $1.8 billion at a loss of $228.8 million and used the proceeds to purchase new securities. This securities repositioning improved the yield and risk weightings and shortened the duration of the investment portfolio. The Bank purchased $3.6 billion of investment securities during thesix months ended June 30, 2025 from reinvesting funds provided by the sales of securities acquired from Independent and proceeds from the sale of securities involved in the repositioning strategy. The increases in investment securities from the acquisition and purchases were partially offset as a result of maturities, calls, sales and paydowns of investment securities totaling $3.7 billion and a reduction from the net amortization of premiums of $5.4 million during the six months ended June 30, 2025. Of the $3.6 billion in purchases of investment securities during the quarter, $3.5 billion were available-for-sale securities and $117.4 million were other investment securities. There were no purchases of held to maturity securities during the quarter. During the six months ended June 30, 2025, we purchased $33.3 million of capital stock of the Federal Home Loan Bank of Atlanta classified as other investment securities on the Balance Sheet and sold back $45.1 million. At June 30, 2025, approximately 70.3% of the investment portfolio was classified as available for sale, approximately 25.5% was classified as held to maturity and approximately 4.2% was classified as other investments.

Current wording

We use investment securities, our second largest category of earning assets, to generate interest income, provide liquidity, fund loan demand or deposit liquidation, and to pledge as collateral for public funds deposits, repurchase agreements, derivative exposures and to augment borrowing capacity at the Federal Reserve Bank of Atlanta, and the Federal Home Loan Bank of Atlanta. At September 30, 2025, investment securities totaled $8.5 billion, compared to $6.8 billion at December 31, 2024, an increase of $1.7 billion, or 25.1%. During the first quarter of 2025, the Company acquired $1.6 billion in investment securities through the acquisition of Independent. A majority of these securities were subsequently sold during the quarter with the proceeds reinvested into securities that fit the Company’s investment strategy. The Company executed a securities repositioning during the first quarter 2025 and sold investment securities with a book value of approximately $1.8 billion at a loss of $228.8 million and used the proceeds to purchase new securities. This securities repositioning improved the yield and risk weightings and shortened the duration of the investment portfolio. The Bank purchased $5.2 billion of investment securities during the nine months ended September 30, 2025 from reinvesting funds provided by the sales of securities acquired from Independent and proceeds from the sale of securities involved in the repositioning strategy. The increases in investment securities from the acquisition and purchases were partially offset as a result of maturities, calls, sales and paydowns of investment securities totaling $5.3 billion and a reduction from the net amortization of premiums of $8.2 million during the nine months ended September 30, 2025. All of the $1.6 billion in purchases of investment securities during the quarter were available-for-sale securities. There were no purchases of held to maturity securities during the quarter. During the nine months ended September 30, 2025, we purchased $33.3 million of capital stock of the Federal Home Loan Bank of Atlanta classified as other investment securities on the Balance Sheet and sold back $45.1 million. At September 30, 2025, approximately 71.0% of the investment portfolio was classified as available for sale, approximately 24.7% was classified as held to maturity and approximately 4.3% was classified as other investments.

Previous wording

At June 30, 2025, the unrealized net losses of the available for sale securities portfolio was $498.8 million, or 7.8%, below its amortized cost basis, compared to an unrealized net loss of $808.6 million, or 15.8%, at December 31, 2024. At June 30, 2025, the unrealized net loss of the held to maturity securities portfolio was $364.2 million, or 17.0%, below its amortized cost basis, compared to an unrealized net loss of $420.1 million, or 18.6%, at December 31, 2024.

Current wording

At September 30, 2025, the unrealized net losses of the available for sale securities portfolio was $425.5 million, or 6.6%, below its amortized cost basis, compared to an unrealized net loss of $808.6 million, or 15.8%, at December 31, 2024. At September 30, 2025, the unrealized net loss of the held to maturity securities portfolio was $331.2 million, or 15.8%, below its amortized cost basis, compared to an unrealized net loss of $420.1 million, or 18.6%, at December 31, 2024.

Previous wording

At June 30, 2025, we had 1,098 inves tment securities including both available for sale and held to maturity, in an unrealized loss position, which totaled $885.4 million. At December 31, 2024, we had 1,214 investment securities, including both available for sale and held to maturity, in an unrealized loss position, which totaled $1.3 billion. The total number of investment securities with an unrealized loss position decreased by 116 securities, while the total dollar amount of the unrealized loss decreased by$344.1 million. The reduction in the number of securities in a loss position and level of unrealized losses was mainly due to the securities repositioning strategy completed during the first quarter of 2025 where we sold certain available-for-sale investment securities and recognized the losses and reinvested the proceeds in investment securities at current market prices. The reduction was also due to changes in interest rates during the first six months of 2025.

Current wording

At September 30, 2025, we had 1,078 inves tment securities including both available for sale and held to maturity, in an unrealized loss position, which totaled $787.4 million. At December 31, 2024, we had 1,214 investment securities, including both available for sale and held to maturity, in an unrealized loss position, which totaled $1.2 billion. The total number of investment securities with an unrealized loss position decreased by 136 securities, while the total dollar amount of the unrealized loss decreased by $442.1 million. The reduction in the number of securities in a loss position and level of unrealized losses was mainly due to the securities repositioning strategy completed during the first quarter of 2025 where we sold certain available-for-sale investment securities and recognized the losses and reinvested the proceeds in investment securities at current market prices. The reduction was also due to changes in interest rates during the first nine months of 2025.

Previous wording

Approxim ately 86.7% (based on amortized cost) of the investment portfolio is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities. These securities may be pledged to the Federal Home Loan Bank of Atlanta or the Federal Reserve Bank of Atlanta Discount Window. Approximately 12.9% (based on amortized cost) of the investment portfolio is comprised of municipal securities. A portion of the municipal bond portfolio may be pledged to the Federal Home Loan Bank of Atlanta subject to their credit approval. Approximately 99% of the municipal bond portfolio has ratings in the Double A or Triple A category.

Current wording

Approximately 86.7% (based on amortized cost) of the investment portfolio is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities. These securities may be pledged to the Federal Home Loan Bank of Atlanta or the Federal Reserve Bank of Atlanta Discount Window. Approximately 13.0% (based on amortized cost) of the investment portfolio is comprised of municipal securities. A portion of the municipal bond portfolio may be pledged to the Federal Home Loan Bank of Atlanta subject to their credit approval. Approximately 99% of the municipal bond portfolio has ratings in the Double A or Triple A category.

Previous wording

As of June 30, 2025, the portfolio had an effective duration of 5.15 years. We continue to monitor duration risk and seek to align actual duration with the target range.

Current wording

As of September 30, 2025, the portfolio had an effective duration of 4.67 years. We continue to monitor duration risk and seek to align actual duration with the target range.

Previous wording

Other investment securities include primarily our investments in FHLB and FRB stock with no readily determinable market value. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of June 30, 2025, we determined that there was no impairment on our other investment securities. As of June 30, 2025, other investment securities represented approximately $357.5 million, or 0.54% of total assets, and primarily consists of FHLB and FRB stock which totals $252.5 million, or 0.38% of total assets. There were no gains or losses on the sales of these securities for three and six months ended June 30, 2025, and 2024, respectively.

Current wording

Other investment securities include primarily our investments in FHLB and FRB stock with no readily determinable market value. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of September 30, 2025, we determined that there was no impairment on our other investment securities. As of September 30, 2025, other investment securities represented approximately $366.2 million, or 0.55% of total assets, and primarily consists of FHLB and FRB stock which totals $252.5 million, or 0.38% of total assets. There were no gains or losses on the sales of these securities for three and nine months ended September 30, 2025, and 2024, respectively.

Previous wording

We have a trading portfolio associated with our Correspondent Banking Division and the Bank’s subsidiary, SouthState|DuncanWilliams. This portfolio is carried at fair value and realized and unrealized gains and losses are included in trading securities revenue, a component of Correspondent Banking and Capital Markets Income in our Consolidated Statements of Income. Securities purchased for this portfolio have primarily been municipal bonds, treasuries and mortgage-backed agency securities, which are held for short periods of time and totaled $95.3 million and $102.9 million at June 30, 2025 and December 31, 2024.

Current wording

We have a trading portfolio associated with our Correspondent Banking Division and the Bank’s subsidiary, SouthState|DuncanWilliams. This portfolio is carried at fair value and realized and unrealized gains and losses are included in trading securities revenue, a component of Correspondent Banking and Capital Markets Income in our Consolidated Statements of Income. Securities purchased for this portfolio have primarily been municipal bonds, treasuries and mortgage-backed agency securities, which are held for short periods of time and totaled $107.5 million and $102.9 million at September 30, 2025 and December 31, 2024.

Previous wording

The balance of loans held for sale increased $39.6 million from December 31, 2024, to $319.0 million on June 30, 2025. Loans held for sale at June 30, 2025 and December 31, 2024 consisted of mortgage and SBA loans held for sale.

Current wording

The balance of loans held for sale increased $67.2 million from December 31, 2024, to $346.7 million on September 30, 2025. Loans held for sale at September 30, 2025 and December 31, 2024 consisted of mortgage and SBA loans held for sale.

Previous wording

During the third quarter of 2024, the Company began purchasing the guaranteed portions of SBA loans from third-party originators with the intent to aggregate the guaranteed portion of the SBA loans into pools with similar characteristics to create a security representing an interest in those pools through the SBA’s fiscal transfer agent. SBA loans held for sale totaled $247.9 millionat June 30, 2025 compared to $181.3 million at December 31, 2024. See Note – 20 – SBA Loans Held for Sale for more information.

Current wording

During the third quarter of 2024, the Company began purchasing the guaranteed portions of SBA loans from third-party originators with the intent to aggregate the guaranteed portion of the SBA loans into pools with similar characteristics to create a security representing an interest in those pools through the SBA’s fiscal transfer agent. SBA loans held for sale totaled $278.3 millionat September 30, 2025 compared to $181.3 million at December 31, 2024. See Note – 20 – SBA Loans Held for Sale for more information.

Previous wording

Mortgage loans held for sale totaled $71.0 million at June 30, 2025, a decrease of $27.1 million compared to $98.1 million at December 31, 2024. Total mortgage production was $672 million in the second quarter of 2025. This compares to $459 million in the first quarter of 2025 and $552 million in the second quarter of 2024. Mortgage production has increased as mortgage rates declined slightly during the quarter along with the seasonal nature of home sales during the spring and summer months. The percentage of mortgage production sold into the secondary market decreased in the second quarter of 2025 to 37% from 56% in the first quarter of 2025 and from 59% in the second quarter of 2024. The allocation of mortgage production between portfolio and secondary market depends on the Company’s liquidity, market spreads and rate changes during each period and will fluctuate over time.

Current wording

Mortgage loans held for sale totaled $68.4 million at September 30, 2025, a decrease of $29.7 million compared to $98.1 million at December 31, 2024. Total mortgage production was $612 million in the third quarter of 2025. This compares to $672 million in the second quarter of 2025 and $506 million in the third quarter of 2024. Mortgage production increased from the third quarter in 2024 as average mortgage rates were lower in third quarter of 2025 compared to the same period in 2024. Mortgage production declined in the third quarter of 2025 compared to the second quarter of 2025 even with average mortgage rates being lower. The decline in production compared to the previous quarter is due to uncertainty in the economy, low housing inventory and high housing prices. The percentage of mortgage production sold into the secondary market decreased in the third quarter of 2025 to 34% from 37% in the second quarter of 2025 and from 58% in the third quarter of 2024. The allocation of mortgage production between portfolio and secondary market depends on the Company’s liquidity, market spreads and rate changes during each period and will fluctuate over time.

Previous wording

Total loans, net of deferred loan costs and fees (excluding loans held for sale), increased by $13.4 billion, or 79.5% annualized, to $47.3 billion at June 30, 2025. Our non-acquired loan portfolio increased by $2.0 billion, or 13.4% annualized, mainly driven by organic growth. Commercial non-owner-occupied loans, commercial and industrial loans, consumer owner-occupied loans, commercial owner-occupied real estate, and home equity loans led the way with $700.0 million, $571.7 million, $317.9 million, $294.1 million and $110.2 million in year-to-date loan growth, respectively, or 18.3%, 20.5%, 9.8%, 13.1% and 16.4% annualized growth, respectively. The acquired loan portfolio increased by $11.4 billion, or 511.3% annualized. This increase in acquired loans was due to the addition of $13.1 billion from the acquisition of Independent, net of offsets from paydowns and payoffs in both the PCD and Non-PCD loan categories along with renewals of acquired loans that were moved to our non-acquired loan portfolio. The main categories that increased were commercial non-owner-occupied loans, commercial and industrial loans, commercial owner-occupied real estate loans, construction and land development loans, consumer owner-occupied loans and other income producing property loans which increased by $5.6 billion, $1.7 billion, $1.5 billion, $1.1 billion, $867.7 million and $681.1 million, respectively, year-to-date. Acquired loans as a percentage of total loans increased to 33.6% and non-acquired loans as a percentage of the overall portfolio decreased to 66.4% at June 30, 2025. This compares to acquired loans as a percentage of total loans of 13.3% and non-acquired loans as a percentage of total loans of 86.7% at December 31, 2024.

Current wording

Total loans, net of deferred loan costs and fees (excluding loans held for sale), increased by $13.8 billion, or 54.3% annualized, to $47.7 billion at September 30, 2025. Our non-acquired loan portfolio increased by $3.2 billion, or 14.7% annualized, mainly driven by organic growth and renewals of acquired loans that are moved to our non-acquired loan portfolio. Commercial non-owner-occupied loans, commercial and industrial loans, consumer owner-occupied loans and commercial owner-occupied real estate loans led the way with $1.6 million, $935.8 million, $478.0 million and $409.0 million in year-to-date loan growth, respectively, or 27.3%, 22.3%, 9.7% and 12.1% annualized growth, respectively. The acquired loan portfolio increased by $10.5 billion, or 313.3% annualized. This increase in acquired loans was due to the addition of $13.1 billion from the acquisition of Independent, net of offsets from paydowns and payoffs in both the PCD and Non-PCD loan categories along with renewals of acquired loans that were moved to our non-acquired loan portfolio. The main categories that increased were commercial non-owner-occupied loans, commercial and industrial loans, commercial owner-occupied real estate loans, consumer owner-occupied loans, construction and land development loans, and other income producing property loans which increased by $5.4 billion, $1.5 billion, $1.4 billion, $818.4 million, $791.0 million and $636.4 million, respectively, year-to-date. Acquired loans as a percentage of total loans increased to 31.5% and non-acquired loans as a percentage of the overall portfolio decreased to 68.5% at September 30, 2025. This compares to acquired loans as a percentage of total loans of 13.3% and non-acquired loans as a percentage of total loans of 86.7% at December 31, 2024.

Previous wording

Total commercial non-owner-occupied loans of $15.6 billion, approximately 33.1% of the total loans held for investment, was the largest category of the loan portfolio as of June 30, 2025. As of June 30, 2025, approximately 93% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $15.6 billion, approximately $1.8 billion, or 4% of the total loans, represented our office segment. Approximately 96% of the office segment was located in the Company’s footprint.

Current wording

Total commercial non-owner-occupied loans of $16.3 billion, approximately 34.3% of the total loans held for investment, was the largest category of the loan portfolio as of September 30, 2025. As of September 30, 2025, approximately 93% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $16.3 billion, approximately $1.8 billion, or 4% of the total loans, represented our office segment. Approximately 96% of the office segment was located in the Company’s footprint.

Previous wording

Despite numerous headwinds, the U.S. has thus far avoided a recession, although an inverted yield curve such as observed in the current interest rate environment often portends a coming recession, however, downside risks to the outlook remain. Management continues to use a blended forecast scenario of the baseline, upside, and more severe scenario, depending on the circumstances and economic outlook. For the quarter ending June 30, 2025, management selected a baseline weighting of 40%, a 25% weighting for an upside scenario and a 35% weighting for the more severe scenario. Scenario weightings are generally expected to remain stable but are reviewed on a quarterly basis. The shift in scenario weightings reflects a mostly neutral stance but recognition of downside risks and higher levels of uncertainty in the economic forecast from persistent levels of inflation, high interest rates, lack of clarity on trade and fiscal policy impacts, and tightening credit conditions conducive of a mild recession. While employment figures still show resilience and actual loan losses remain at low levels, continued projected borrower weakness related to high interest rates, uncertainty, and lingering chances of an economic downturn continue to moderate optimism in the path of the forecast and kept expected losses mostly flat. The Company recorded a total provision for credit losses of $7.5 million for the second quarter of 2025. The Company recorded a provision for credit losses of $5.1 million and $2.4 million for funded loans and unfunded commitments, respectively, during the second quarter of 2025.

Current wording

There are several headwinds that continue to weigh down the economy, but the U.S. has thus far avoided a recession. Management continues to use a blended forecast scenario of the baseline, upside, and more severe scenario, depending on the circumstances and economic outlook. For the quarter ending September 30, 2025, management selected a baseline weighting of 40%, a 25% weighting for an upside scenario and a 35% weighting for the more severe scenario. Scenario weightings are generally expected to remain stable but are reviewed on a quarterly basis. Weightings were not changed from the prior quarter and reflect a mostly neutral stance but recognition of downside risks and higher levels of uncertainty in the economic forecast from flat job growth, high interest rates, lack of clarity on trade policy impacts, and tightening credit conditions. Improved GDP growth and employment resilience kept expected losses mostly flat. The Company recorded a total provision for credit losses of $5.1 million for the third quarter of 2025. The Company recorded a provision for credit losses of $1.2 million and $3.9 million for funded loans and unfunded commitments, respectively, during the third quarter of 2025.