SouthState Bank Corp
For the period ended Dec 31, 2025. Filed Feb 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 20, 2026
SSB$104.11-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001558370-25-001274
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-20.
0001104659-26-017884
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 227 previous paragraphs and 221 current paragraphs.
139 unchanged; 75 reworded; 6 added; 13 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 148 previous and 147 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Our efficiency ratio was 53.1% for the year ended December 31, 2025 compared to 56.9% for the same period in 2024. The improvement of our efficiency ratio was due to the result of a 56.1% increase in the total of tax-equivalent net interest income and noninterest income being greater than a 45.7% 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 2025. The higher increase in tax-equivalent net interest income and noninterest income was due to the $1.1 billion increase in interest income related to loans held for investment, which was mainly attributable to loans acquired in the acquisition of Independent in 2025.
Current report
During 2025, our total investment securities increased $1.9 billion, or 28.2%, from December 31, 2024. The Company acquired $1.6 billion in investment securities through the acquisition of Independent. A majority of these securities were subsequently sold with the proceeds reinvested into securities that fit the Company’s investment strategy. The Company also executed a securities repositioning 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.
Current report
The Company purchased $7.1 billion of investment securities during the year ended December 31, 2025, funded by maturities, calls, and paydowns, along with reinvestment of proceeds from 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, and paydowns of investment securities totaling $7.0 billion and a reduction from the net amortization of premiums of $11.0 million during the year ended December 31, 2025. All of the $7.1 billion in purchases of investment securities during the year ended December 31, 2025, were classified as available for sale securities or other investment securities. There were no purchases of held to maturity securities during the year ended December 31, 2025.
Current report
On January 11, 2026, the Board of Directors of the Company approved the 2026 Repurchase Plan. This 2026 Repurchase Plan authorization replaces the Company’s pre-existing authorization previously approved in January 2025, under which 560,000 shares remained available for repurchase, and which was cancelled in connection with the Board’s approval of the 2026 Repurchase Plan.
Current report
Total cash and cash equivalents increased $1.8 billion in 2025 to $3.2 billion at December 31, 2025, compared to $1.4 billion at December 31, 2024. The increase in cash and cash equivalents was 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 $1.9 billion, and an increase in federal funds purchased and securities sold under agreements to repurchase of $103.3 million. The increase in deposits, excluding deposits assumed from Independent, was mainly due to increases in interest-bearing checking accounts (including money market accounts) and brokered time deposits. These increases were partially offset by cash used to fund net loan growth, excluding loans assumed from Independent, of $1.6 billion and by cash used to fund investment growth, excluding investments assumed from Independent, of $325.9 million.
Current report
Deposit flows are significantly influenced by general and local economic conditions, changes in prevailing interest rates, internal pricing decisions, and competition. Our deposits are primarily obtained from depositors located around our branch footprint, and we believe that we have attractive opportunities to capture additional retail and commercial deposits in our markets, in addition to having access to brokered deposits. Of the $55.1 billion in total deposits at December 31, 2025, approximately 70% were insured or collateralized. The Bank has a granular deposit base comprised of over 1.4 million accounts, with an average deposit size of $39,000. Approximately 24% of total deposits are nonin terest-bearing at December 31, 2025.
Removed paragraphs (13)
Previous report
Our efficiency ratio was 56.9% for the year ended December 31, 2024 compared to 55.5% for the same period in 2023. The increase of our efficiency ratio was due to both a $6.9 million increase in noninterest expense and a $21.8 million decrease in total net interest income and noninterest income. The increase in noninterest expense was mainly due to an increase in salaries and employee benefits of $23.5 million, an increase in information service expense of $7.7 million, and an increase in merger, branch consolidation, severance related and other expense of $7.0 million, offset by a decrease in the FDIC special assessment expense of $21.8 million, a decrease in amortization of intangible of $5.2 million, and a decrease in other noninterest expense of $4.9 million in 2024. The decrease in total net interest income and noninterest income was due to a decline in net interest income of $37.2 million as the increase in interest expense exceeded the increase in interest income, as deposits repriced in the higher interest rate environment, along with deposits moving to higher costing money market accounts and interest-bearing checking accounts from noninterest-bearing checking accounts and savings accounts during 2024.
Previous report
Independent Bank Group, Inc. (“Independent”) Merger
Previous report
On January 1, 2025, the Company acquired all of the outstanding common stock of Independent, a Texas-based corporation, the bank holding company for Independent Bank, in a stock transaction. Pursuant to the Merger Agreement, shareholders of Independent received 0.60 shares of the Company’s common stock in exchange for each share of Independent stock resulting in the Company issuing 24,858,731 shares of its common stock. In total, the purchase price for Independent was $2.5 billion.
Previous report
Sale-leaseback Transaction
Previous report
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 expects the Sale-leaseback Transaction to close in the first quarter of 2025 and is subject to Blue Owl performing satisfactory due diligence on the branches.
Previous report
During 2024, our total investment securities decreased $665.0 million, or 8.9%, from December 31, 2023. During 2024, we purchased $236.9 million of securities, $96.8 million classified as available for sale and $140.1 million classified as other investments. These purchases were offset by maturities, paydowns, sales and calls of investment securities totaling $886.9 million. Net amortization of premiums were $19.3 million for the year ended December 31, 2024.
Previous report
During 2024, the Company purchased approximately $591.0 million in guaranteed portions of SBA loans. During 2024, the Company pooled approximately $353.5 millionof the guaranteed portions of SBA loans into securities selling approximately $329.3 million into the secondary market. The Company also sold approximately $25.6 million in individual loans during the year. The Company held approximately $181.3 million in the guaranteed portion of SBA loans for sale at December 31, 2024. The Company also separately originates SBA loans and sells the guaranteed portions of these loans into the secondary market. During 2024, 2023 and 2022, the Company sold approximately $118.1 million, $109.3 million and $112.8 million, respectively, in guaranteed portions of SBA loans originated at the Bank and recognized gains of $11.8 million, $9.5 million and $10.3 million, respectively.
Previous report
During 2024, overall deposits increased $1.0 million, or 2.7%, to $38.1 billion from 2023. The increase was driven by growth in money market accounts of $1.5 billion and interest-bearing checking deposits of $253.5 million. These increases were partially offset by declines in noninterest-bearing checking deposits of $457.2 million, savings deposits of $218.0 million, and time deposits of $84.2 million, including a decrease in brokered deposits of $104.3 million. During 2024, there was an increase in the balance of higher yielding money market as customers shifted funds from noninterest-bearing deposits and savings accounts to gain flexibility and benefit from higher yields in a comparatively higher rate environment. The Company raised interest rates on most interest-bearing deposit products (in particular money market accounts and time deposit specials) during 2023 and the first half of 2024 due to competitive pressures to retain deposits. In the fourth quarter of 2024, the Company began to reduce its interest rates on deposit products as the Federal Reserve Bank began reducing its federal funds target rate in September 2024. The federal funds target rate declined 100 basis points from September 2024 to December 2024. The Company also saw a reduction in its brokered deposits from $1.1 billion at September 30, 2024 to $614.5 million at December 31, 2024. The Company saw growth in its in-market deposits in the fourth quarter of 2024, and therefore allowed maturing brokered time deposits to run off.
Previous report
The federal banking agencies revised their regulatory capital rules to (i) address the implementation of CECL; (ii) provide an optional three-year phase-in period for the adoption date adverse regulatory capital effects that banking organizations are expected to experience upon adopting CECL; and (iii) require the use of CECL in stress tests beginning with the 2020 capital planning and stress testing cycle for certain banking organizations that are subject to stress testing. CECL became effective for us on January 1, 2020 and the Company applied the provisions of the standard using the modified retrospective method as a cumulative-effect adjustment to retained earnings. Related to the implementation of ASU 2016-13, we recorded additional allowance for credit losses for loans of $54.4 million, deferred tax assets of $12.6 million, an additional reserve for unfunded commitments of $6.4 million and an adjustment to retained earnings of $44.8 million. Instead of recognizing the effects on regulatory capital from ASU 2016-13 at adoption, the Company initially elected the option for recognizing the adoption date effects on the Company’s regulatory capital calculations over a three-year phase-in. The three-year phase-in period ended at December 31, 2024.
Previous report
In response to the COVID-19 pandemic in 2020, the federal banking agencies issued a final rule for additional transitional relief to regulatory capital related to the impact of the adoption of CECL. The Company chose the five-year transition method and is deferring the recognition of the effects from the adoption date and the CECL difference for the first two years of application. The modified CECL transitional amount was fixed as of December 31, 2021, and that amount began the three-year phase out in the first quarter of 2022 with the final 25% phased out in 2024. At December 31, 2024 and 2023, approximately $15.3 million and $30.5 million, respectively, was added to Tier 1 capital at the Company and Bank as a result of the modified CECL transition. Had the Company elected not to apply the modified CECL transitional amount to its Tier 1 capital, the Company and Bank would have still been considered well capitalized as of December 31, 2024 and 2023.
Previous report
Total cash and cash equivalents increased $393.2 million in 2024 to $1.4 billion at December 31, 2024, compared to $1.0 billion at December 31, 2023. The increase in cash and cash equivalents was primarily due to the increase in deposits of $1.0 billion along with the decline in investments of $665.0 million resulting from maturities and pay downs of mortgage-backed securities partially offset by a net increase in loans of $1.5 billion during 2024.
Previous report
The Bank has a granular deposit base comprised of over 1.3 million accounts, with an average deposit size of $30,000. The top ten and twenty deposit relationships comprise approximately 2.6% and 3.8% of total deposits. Approximately 27% of total deposits are noninterest-bearing.
Previous report
We consider concentrations of credit to exist when, pursuant to regulatory guidelines, the amounts loaned to a multiple number of borrowers engaged in similar business activities which would cause them to be similarly impacted by general economic conditions represents 25% of total Tier 1 capital plus regulatory adjusted allowance for credit losses of the Company, or $1.2 billion at December 31, 2024. Based on this criteria, we had seven such credit concentrations at December 31, 2024, including loans secured by 1st mortgage 1-4 family owner occupied residential property (including condos and home equity lines) of $9.5 billion, loans to lessors of nonresidential buildings (except mini warehouses) of $5.5 billion, loans secured by business assets including accounts receivable, inventory and equipment of $3.0 billion, loans to lessors of residential buildings (investment properties and multi-family) of $2.9 billion, loans secured by jumbo (original loans greater than $766,550) 1st mortgage 1-4 family owner occupied residential property of $2.7 billion, loans secured by owner occupied office buildings (including medical office buildings) of $2.0 billion, and loans secured by owner occupied nonresidential buildings (excluding office buildings) of $1.9 billion. The risk for these loans and for all loans is managed collectively through the use of credit underwriting practices developed and updated over time. The loss estimate for these loans is determined using our standard ACL methodology.
Reworded paragraphs (75)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes SouthState Corporation and its subsidiary’s results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, and also analyzes our financial condition as of December 31, 2024 as compared to December 31, 2023. Like most banking 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 most of which we pay interest. Consequently, one of the key measures of our success is the amount of 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 Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes SouthState Bank Corporation and its subsidiary’s results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024, and also analyzes our financial condition as of December 31, 2025 as compared to December 31, 2024. Like most banking 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 most of which we pay interest. Consequently, one of the key measures of our success is the amount of 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 or the net interest margin.
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|Duncan-Williams Securities Corp. (“SouthState|Duncan-Williams”), 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. 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 by merging SouthState Corporation, a South Carolina corporation, with and into SouthState Bank Corporation, a Florida corporation that was wholly-owned by SouthState Corporation prior to such merger, and adopting its name. We provide a wide range of banking services and products to our customers through our Bank. The Bank operates SouthState Securities, 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 PCM, Inc., a wholly-owned registered investment advisor. 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. The Bank operates 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 December 31, 2024, we had $46.4 billion in assets and 5,100 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 a six (6) state footprint in Alabama, Florida, Georgia, North Carolina, South Carolina 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 December 31, 2025, we had $67.2 billion in assets and 6,317 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 Florida, South Carolina, Texas, Georgia, Colorado, North Carolina, Alabama, 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
We also operate a correspondent banking and capital markets division within our national bank subsidiary, of which the majority of its bond salesmen, traders and operational personnel are housed in facilities located in Atlanta, Georgia, Memphis, Tennessee, Walnut Creek, California, and Birmingham, Alabama. This division’s primary revenue generating activities are related to its capital markets division, which includes commissions earned on fixed income security sales, fees from hedging services, loan brokerage fees and consulting fees for services related to these activities; and its correspondent banking division, which includes spread income earned on correspondent bank deposits (i.e., federal funds purchased) and correspondent bank checking account deposits and fees from safe-keeping activities, bond accounting services for correspondents, asset/liability consulting related activities, international wires, and other clearing and corporate checking account services.
Current wording
We also operate a correspondent banking and capital markets division within our national bank subsidiary, of which the majority of its bond salesmen, traders and operational personnel are housed in facilities located in Atlanta, Georgia, Birmingham, Alabama, Memphis, Tennessee, and Walnut Creek, California. This division’s primary revenue generating activities are related to its capital markets division, which includes commissions earned on fixed income security sales, fees from hedging services, loan brokerage fees and consulting fees for services related to these activities; and its correspondent banking division, which includes spread income earned on correspondent bank deposits (i.e., federal funds purchased) and correspondent bank checking account deposits and fees from safe-keeping activities, bond accounting services for correspondents, asset/liability consulting related activities, international wires, and other clearing and corporate checking account services.
Previous wording
We earned net income of $534.8 million, or $6.97 diluted earnings per share (“EPS”), during 2024 compared to net income of $494.3 million, or $6.46 diluted EPS, in 2023. Net income available to the common shareholders was up $40.5 million, or 8.2%, in 2024 compared to 2023. For further discussion of the Company’s results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, see Results of Operations section of this MD&A starting on page 68.
Current wording
We earned net income of $798.7 million, or $7.87 diluted earnings per share (“EPS”), during 2025 compared to net income of $534.8 million, or $6.97 diluted EPS, in 2024. Net income available to the common shareholders was up $263.9 million, or 49.3%, in 2025 compared to 2024. For further discussion of the Company’s results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024, see Results of Operations section of this MD&A starting on page 65.
Previous wording
At December 31, 2024, we had total assets of approximately $46.4 billion compared to approximately $44.9 billion at December 31, 2023. See the Financial Condition section of this MD&A starting on page 77 for a more detailed description of the change in our balance sheet.
Current wording
At December 31, 2025, we had total assets of approximately $67.2 billion compared to approximately $46.4 billion at December 31, 2024. See the Financial Condition section of this MD&A starting on page 73 for a more detailed description of the change in our balance sheet.
Previous wording
Our overall asset quality results remained strong during the year. Net charge offs as a percentage of average loans decreased to 0.06% compared to 0.08% for the year ended December 31, 2023. The total nonperforming assets (“NPAs”) increased by $29.2 million to $213.4 million at December 31, 2024 from $184.1 million at December 31, 2023. Non-acquired NPAs increased $24.0 million to $146.5 million at December 31, 2024 from $122.5 million at December 31, 2023, which was related to an increase in non-acquired nonperforming loans of $23.5 million. Non-acquired OREO and other NPAs increased by $471,000 to $1.2 million as of December 31, 2024 compared to $711,000 as of December 31, 2023. Acquired NPAs increased $5.3 million to $66.9 million at December 31, 2024 from $61.6 million at December 31, 2023. Acquired nonperforming loans increased $4.4 million and acquired OREO and other nonperforming assets increased $871,000. Total NPAs as a percentage of total assets increased 5 basis points to 0.46% at December 31, 2024 compared to 0.41% at December 31, 2023. We continue to experience solid and stable asset quality numbers and ratios in 2024.
Current wording
Our overall asset quality results remained strong during the year. Net charge-offs as a percentage of average loans increased to 0.23% for the year ended December 31, 2025 compared to 0.06% for the year ended December 31, 2024. Net charge-offs, excluding acquisition date charge-offs recorded for PCD loans acquired from Independent of $56.7 million, to total average loans, during the year ended December 31, 2025 were 0.11%. The increase in charge-offs excluding acquisition date charge-offs on PCD loans acquired from Independent in 2025 was mainly due to one commercial and industrial charge-off recorded in the third quarter of 2025 of $21.5 million. If this individual charge-off was also excluded, net charge-offs as a percentage of average loans would have been 0.07% for the year 2025, a 0.01% increase compared to the year ended December 31, 2024. The total nonperforming assets (“NPAs”) increased by $97.9 million to $311.3 million at December 31, 2025 from $213.4 million at December 31, 2024. Non-acquired NPAs increased $23.8 million to $170.2 million at December 31, 2025 from $146.5 million at December 31, 2024, which was related to an increase in non-acquired nonperforming loans of $19.7 million. Non-acquired OREO and other NPAs increased by $4.1 million to $5.3 million as of December 31, 2025 compared to $1.2 million as of December 31, 2024. Acquired NPAs increased $74.1 to $141.0 million at December 31, 2025 from $66.9 million at December 31, 2024. Acquired nonperforming loans increased $71.8 million and acquired OREO and other nonperforming assets increased $2.3 million. Total NPAs as a percentage of total assets remained flat at 0.46% at December 31, 2025 and December 31, 2024. We continue to experience solid and stable asset quality numbers and ratios in 2025.
Previous wording
We continue to remain well-capitalized with a total risk-based capital ratio of 15.0% and a Tier 1 leverage ratio of 10.0%, as of December 31, 2024, compared to 14.1% and 9.4%, respectively, at December 31, 2023. The improvement in the total risk-based capital ratio was mainly due to total risk-based capital increasing 8.2% with the increase in equity resulting from net income of $534.8 million recognized in 2024, along with the increase in the allowance for credit losses and unfunded commitments of $20.1 million includable in Tier 2 capital. Total risk-weighted assets increased $657.1 million, or 1.9%, in 2024. The improvement inthe Tier 1 leverage ratio was due to the increase in Tier 1 capital of 9.3%with the increase in equity resulting from net income of $534.8 million recognized in 2024. Regulatory average assets used to calculate the Tier 1 leverage ratio increased $1.1 billion, or 2.6%, in 2024. We believe our current capital ratios position us well to grow both organically and through certain strategic opportunities. For further discussion of the Company’s financial condition as of December 31, 2024 compared to December 31, 2023, see Financial Condition section of this MD&A starting on page 77.
Current wording
We continue to remain well-capitalized with a total risk-based capital ratio of 13.8% and a Tier 1 leverage ratio of 9.3%, as of December 31, 2025, compared to 15.0% and 10.0%, respectively, at December 31, 2024. The decline in the capital ratios was mainly due to the effects on capital and assets from the acquisition of Independent. Total risk-based capital increased with the increase in equity resulting from the issuance of shares of common stock for the Independent acquisition, the net income recognized during 2025, along with the increase in the allowance for credit losses and unfunded commitments includable in Tier 2 capital. Total risk-weighted assets increased $15.8 billion, or 43.7%, in 2025. The decline inthe Tier 1 leverage ratio was due to the increase in average assets resulting from the acquisition of Independent. Regulatory average assets used to calculate the Tier 1 leverage ratio increased $18.3 billion, or 40.4%, in 2025. We believe our current capital ratios position us well to grow both organically and through certain strategic opportunities. For further discussion of the Company’s financial condition as of December 31, 2025 compared to December 31, 2024, see Financial Condition section of this MD&A starting on page 73.
Previous wording
On February 11, 2025, the Company received Federal Reserve Board’s supervisory nonobjection on the 2025 stock repurchase program (the “2025 Repurchase Program”), which was previously approved by the Board of Directors of the Company, contingent upon receipt of such supervisory nonobjection. The 2025 Repurchase Program authorizes the Company to repurchase up to 3,000,000 shares, or up to approximately three percent, of the Company’s outstanding shares of common stock as of January 2, 2025. See accompanying with Note 30 – Subsequent Events to our audited consolidated financial statements.
Current wording
On January 11, 2026, the Board of Directors of the Company approved the 2026 Repurchase Plan authorizing the Company to repurchase up to 5,560,000 shares of the Company’s common stock. This 2026 Repurchase Plan authorization replaces the Company’s pre-existing authorization approved in January 2025, under which 560,000 shares remained available for repurchase, and which was cancelled in connection with the Board’s approval of the 2026 Repurchase Plan. See accompanying with Note 31—Subsequent Events to our audited consolidated financial statements.
Previous wording
We account for acquisitions under FASB ASC Topic 805,Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, and liabilities assumed, are recorded at fair value. ASU 2016-13,Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires us to record purchased financial assets with credit deterioration (PCD assets), defined as a more-than-insignificant deterioration in credit quality since origination or issuance, at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no provision for credit losses affecting net income on acquisition of PCD assets. Changes in estimates of expected credit losses after acquisition are recognized as provision for credit loss expense (or recovery of credit losses) in subsequent periods as they arise. Any non-credit discount or premium resulting from acquiring a pool of purchased financial assets with credit deterioration shall be allocated to each individual asset. At the acquisition date, the initial allowance for credit losses determined on a collective basis shall be allocated to individual assets to appropriately allocate any non-credit discount or premium. The non-credit discount or premium, after the adjustment for the allowance for credit losses, shall be accreted into interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date.
Current wording
We account for acquisitions under FASB ASC Topic 805,Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, and liabilities assumed, are recorded at fair value. This includes intangible assets identified as a result of the acquisition. ASU 2016-13,Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires us to record purchased financial assets with credit deterioration (PCD assets), defined as a more-than-insignificant deterioration in credit quality since origination or issuance, at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no provision for credit losses affecting net income on acquired PCD assets. Changes in estimates of expected credit losses after acquisition are recognized as provision for credit loss expense (or recovery of credit losses) in subsequent periods as they arise. Any non-credit discount or premium resulting from acquiring a pool of purchased financial assets with credit deterioration shall be allocated to each individual asset. At the acquisition date, the initial allowance for credit losses determined on a collective basis shall be allocated to individual assets to appropriately allocate any non-credit discount or premium. The non-credit discount or premium, after the adjustment for the allowance for credit losses, shall be accreted into interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date.
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 $224 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $104 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 continued geopolitical 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 December 31, 2024.
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 $208 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $122 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 December 31, 2025.
Previous wording
Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed in a business combination. As of December 31, 2024 and 2023, the balance of goodwill was $1.9 billion. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.
Current wording
Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed in a business combination. As of December 31, 2025 and 2024, the balance of goodwill was $3.1 billion and $1.9 billion, respectively. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.
Previous wording
Under the ASU Topic 350, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on the difference. The impairment charge will be limited to the amount of goodwill allocated to the reporting unit. An entity is able to perform an optional qualitative goodwill impairment assessment before proceeding to the quantitative step of determining whether the reporting unit’s carrying amount exceeds it fair value.
Current wording
Under the ASU Topic 350, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on the difference. The impairment charge will be limited to the amount of goodwill allocated to the reporting unit. An entity is able to perform an optional qualitative goodwill impairment assessment before proceeding to the quantitative step of determining whether the reporting unit’s carrying amount exceeds its fair value.
Previous wording
We evaluated the carrying value of goodwill as of October 31, 2024, our annual test date, and determined that no impairment charge was necessary as the fair value of the entity exceeded the carrying value. We will continue to monitor the impact of current economic conditions and other events on the Company’s business, operating results, cash flows and financial condition. If the current economic conditions and other events were to deteriorate and our stock price falls below current levels, we will have to reevaluate the impact on our financial condition and potential impairment of goodwill.
Current wording
We evaluated the carrying value of goodwill as of October 31, 2025, our annual test date, and determined that more likely than not that no impairment charge was necessary as the fair value of the entity exceeded the carrying value. We will continue to monitor the impact of current economic conditions and other events on the Company’s business, operating results, cash flows and financial condition. If the current economic conditions and other events were to deteriorate and our stock price falls below current levels, we will have to reevaluate the impact on our financial condition and potential impairment of goodwill.
Previous wording
For information relating to recent accounting standards and pronouncements, see Note 1 to our audited consolidated financial statements entitled “Summary of Significant Accounting Policies.”
Current wording
For information relating to recent accounting standards and pronouncements, see Note 1—Summary of Significant Accounting Policies to our audited consolidated financial statements entitled “Summary of Significant Accounting Policies.”
Previous wording
Consolidated net income available to common shareholders increased by $40.5 million, or 8.2%, to $534.8 million for the year ended December 31, 2024 compared to $494.3 million for the year ended December 31, 2023. Below are key highlights of our results of operations during 2024:
Current wording
Consolidated net income available to common shareholders increased by $263.9 million, or 49.3%, to $798.7 million for the year ended December 31, 2025, compared to $534.8 million for the year ended December 31, 2024. Below are key highlights of our results of operations during 2025:
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 December 31, 2024. As the rate reductions occurred during the later part of the year 2024, the Company operated in a comparatively higher rate environment in 2024 compared to 2023.
Current wording
The Federal Reserve implemented total rate cuts of 175 basis-point, beginning with a 50 basis-point reduction in mid-September 2024. This was followed by five additional cuts of 25 basis-point each, one in early November 2024, one in mid-December 2024, one in late October 2025, and the latest one in December 2025. These rate cuts came after a series of rate hikes that began in March 2022, resulting in a target range of 3.50% to 3.75% at December 31, 2025. As a result, the Company operated in a comparatively lower rate environment in 2025 compared to 2024.
Previous wording
Noninterest income provides us with additional revenues that are significant sources of income. In 2024, 2023, and 2022, noninterest income comprised 17.6%, 16.5%, and 18.8%, respectively, of total net interest income and noninterest income.
Current wording
Noninterest income provides us with additional revenues that are significant sources of income. In 2025, 2024, and 2023, noninterest income comprised 14.1%, 17.6%, and 16.5%, respectively, of total net interest income and noninterest income.
Previous wording
Our noninterest income increased $15.4 million, or 5.4%, for the year ended December 31, 2024 compared to 2023. This change in total noninterest income resulted from the following:
Current wording
Our noninterest income increased by $75.5 million, or 25.0%, for the year ended December 31, 2025 compared to 2024. This change in total noninterest income resulted from the following:
Previous wording
Noninterest expense represents the largest expense category for our company. Noninterest expense increased $6.9 million, or 0.7%, for the year ended December 31, 2024 compared to 2023. The change in total noninterest expense resulted from the following:
Current wording
Noninterest expense represents the largest expense category for the Company. Noninterest expense increased $519.6 million, or 51.9%, for the year ended December 31, 2025 compared to 2024. The change in total noninterest expense resulted from the following:
Previous wording
Our effective tax rate increased to 23.63% at December 31, 2024, compared to 21.64% for the year-ended December 31, 2023. The increase was primarily due to the inclusion of amortization of Low-Income Housing Tax Credit Investments in income tax expense due to the adoption of the proportional amortization method during the first quarter of 2024 as well as an increase in pre-tax income in the current period. This was partially offset by a decrease in non-deductible executive compensation and TEFRA interest expense disallowance compared to December 31, 2023. For additional information refer to Note 11—Income Taxes in the consolidated financial statements.
Current wording
Our effective tax rate decreased to 23.22% at December 31, 2025, compared to 23.63% for the year-ended December 31, 2024. The decrease was primarily due to a decrease in state tax expense due to state tax planning and lowering of related state apportionment in specific jurisdictions as well as the increase in tax-exempt income and an increase in the cash surrender value of BOLI policies held by the Bank. This benefit was partially offset by the increase in pretax book income and higher non-deductible executive compensation and disallowed FDIC premiums during the current period, when compared to 2024. For additional information refer to Note 11—Income Taxes in the consolidated financial statements.
Previous wording
The Company’s Chief Operating Decision Maker (“CODM”), the Executive Committee, consists of the Company’s senior executive management team, including the Chief Executive Officer, Chief Strategy Officer, President, Chief Financial Officer, Chief Operating Officer, Chief Risk Officer, and other executives. The CODM generally meets monthly to assess performance of the General Banking Unit using a variety of figures, metrics and key performance indicators. In addition to net income and non-Tax Equivalent (“TE”) Net Interest Margin (“NIM”), the CODM considers Pre-Provision Net Revenue (“PPNR”) and TE NIM to make business decisions. The CODM monitors these profitability measures at each meeting, and is regularly featured in various investor presentations, earnings releases, and other internal management reports. These performance and profitability measures influence business decisions and allocation of resources within the General Banking Unit.
Current wording
The Company’s Chief Operating Decision Maker (“CODM”), the Executive Committee, consists of the Company’s senior executive management team, including the Chief Executive Officer, Chief Strategy Officer, President, Chief Financial Officer, Chief Operating Officer, Chief Risk Officer, Chief Credit Officer and other executives. The CODM generally meets monthly to assess performance of the General Banking Unit using a variety of figures, metrics and key performance indicators. In addition to net income and non-Tax Equivalent (“TE”) Net Interest Margin (“NIM”), the CODM considers Pre-Provision Net Revenue (“PPNR”) and TE NIM to make business decisions. The CODM monitors these profitability measures at each meeting, and is regularly featured in various investor presentations, earnings releases, and other internal management reports. These performance and profitability measures influence business decisions and allocation of resources within the General Banking Unit.
Previous wording
At December 31, 2023, we had total assets of approximately $44.9 billion, consisting principally of $32.4 billion in total loans, before taking into account the allowance for credit losses of $456.6 million, $7.5 billion in investment securities, $1.0 billion in cash and cash equivalents and $1.9 billion in goodwill. Our liabilities at December 31, 2023 totaled $39.4 billion, consisting principally of deposits of $37.0 billion ($10.6 billion in noninterest-bearing and $26.4 in interest-bearing) and short-term and long-term borrowings of $881.1 million. At December 31, 2023, our shareholders’ equity was $5.5 billion.
Current wording
At December 31, 2025, we had total assets of approximately $67.2 billion, consisting principally of $48.6 billion in total loans, before taking into account the allowance for credit losses of $585.2 million, $8.7 billion in investment securities, $3.2 billion in cash and cash equivalents and $3.1 billion in goodwill. Our liabilities at December 31, 2025 totaled $58.1 billion, consisting principally of deposits of $55.1 billion ($13.4 billion in noninterest-bearing and $41.8 billion in interest-bearing), $554.7 million derivative liabilities and $1.3 billion of short-term and long-term borrowings. At December 31, 2025, our shareholders’ equity was $9.1 billion.
Previous wording
At December 31, 2024, we had total assets of approximately $46.4 billion, consisting principally of $33.9 billion in total loans, before taking into account the allowance for credit losses of $465.3 million, $6.8 billion in investment securities, $1.4 billion in cash and cash equivalents and $1.9 billion in goodwill. Our liabilities at December 31, 2024 totaled $40.5 billion, consisting principally of deposits of $38.1 billion ($10.2 billion in noninterest-bearing and $27.9 billion in interest-bearing), $879.9 million derivative liabilities and $906.4 million of short-term and long-term borrowings. At December 31, 2024, our shareholders’ equity was $5.9 billion.
Current wording
At December 31, 2024, we had total assets of approximately $46.4 billion, consisting principally of $33.9 billion in total loans, before taking into account the allowance for credit losses of $465.3 million, $6.8 billion in investment securities, $1.4 billion in cash and cash equivalents and $1.9 billion in goodwill. Our liabilities at December 31, 2024 totaled $40.5 billion, consisting principally of deposits of $38.1 billion ($10.2 billion in noninterest-bearing and $27.9 in interest-bearing) and short-term and long-term borrowings of $906.4 million. At December 31, 2024, our shareholders’ equity was $5.9 billion.
Previous wording
Book value per common share was $77.18 at the end of 2024, an increase from $72.78 at the end of 2023. Book value per common share increased in 2024 as shareholder equity increased by 6.5% while common shares outstanding only increased by 0.4%. The primary reasons for an increase in shareholder’s equity of $357.3 December 31, 2024 were due to net income of $534.8 million and a $24.4 million increase in accumulated other comprehensive loss related to unrealized losses on available for sale securities and post-retirement benefit plans. These increases were partially offset by declines in shareholders equity resulting from dividends paid to shareholders of $161.6 million, common stock repurchased from officers and directors for income taxes owed on their vested shares of restricted stock of $8.8 million, and common stock repurchased in the open market of $8.0 million.
Current wording
Book value per common share was $91.38 at the end of 2025, an increase from $77.18 at the end of 2024. Book value per common share increased in 2025 as shareholder equity increased by $3.2 billion, or 53.8%, while common shares outstanding increased by 29.9%. The primary reason for an increase in shareholders’ equity was primarily due to the acquisition of Independent. The Company issued $2.5 billion in stock related to the acquisition of Independent.
Previous wording
Our common equity to assets ratio increased to 12.7% in 2024, compared to 12.3% in 2023. The improvement during 2024 was due to an increase in shareholders’ equity of 6.5%, resulting from the items noted above, while total assets had a moderate increase of 3.3%.
Current wording
Our common equity to assets ratio increased to 13.5% in 2025, compared to 12.7% in 2024. The improvement during 2025 was due to an increase in shareholders’ equity of 53.8%, resulting from the items noted above, while total assets increased 44.9%.
Previous wording
We have a trading portfolio associated with our Correspondent Bank Division and its subsidiary SouthState|Duncan-Williams. 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, mortgage-backed agency securities, and SBA securities, which are held for short periods of time and totaled $102.9 million and $31.3 million at December 31, 2024 and 2023, respectively.
Current wording
We have a trading portfolio associated with our Correspondent Bank Division and its subsidiary SouthState Securities. 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, mortgage-backed agency securities, and SBA securities, which are held for short periods of time and totaled $110.2 million and $102.9 million at December 31, 2025 and 2024, respectively.
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 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 December 31, 2024 and 2023, investment securities totaled $6.8 billion and $7.5 billion, respectively. For the year ended December 31, 2024, average investment securities were $7.1 billion, or 17.6% of average earning assets, compared with $7.7 billion, or 19.5% of average earning assets for the year ended December 31, 2023. The expected average life of the investment portfolio at December 31, 2024 was approximately 7.73 years, compared with 7.87 years at December 31, 2023. See Note 1**—**Summary of Significant Accounting Policies in the audited consolidated financial statements for our accounting policy on investment securities.
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 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 December 31, 2025 and 2024, investment securities totaled $8.7 billion and $6.8 billion, respectively. For the year ended December 31, 2025, average investment securities were $8.4 billion, or 14.3% of average earning assets, compared with $7.1 billion, or 17.6% of average earning assets for the year ended December 31, 2024. The expected average life of the investment portfolio at December 31, 2025 was approximately 5.83 years, compared with 7.73 years at December 31, 2024. See Note 1**—**Summary of Significant Accounting Policies in the audited consolidated financial statements for our accounting policy on investment securities.
Previous wording
At December 31, 2024, the unrealized net loss of the available for sale investment securities portfolio was $808.6 million, or 15.8%, below its amortized cost basis. Comparable valuations at December 31, 2023 reflected an unrealized net loss of the available for sale investment portfolio of $776.6 million, or 14.0%, below its amortized cost basis. The decrease in fair value in the available for sale investment portfolio at December 31, 2024 compared to December 31, 2023 was attributable to principal paydowns, maturities and calls as well as a higher interest rate environment. At December 31, 2024, the unrealized net loss of the held to maturity investment securities portfolio was $420.1 million, or 18.6%, below its amortized cost basis. At December 31, 2023, the unrealized net loss of the held to maturity investment securities portfolio was $402.7 million, or 16.2%, below its amortized cost basis.
Current wording
At December 31, 2025, the unrealized net loss of the available for sale investment securities portfolio was $382.8 million, or 5.7%, below its amortized cost basis. Comparable valuations at December 31, 2024 reflected an unrealized net loss of the available for sale investment portfolio of $808.6 million, or 15.8%, below its amortized cost basis. The decrease in the unrealized net loss of the available for sale portfolio at December 31, 2025 compared to December 31, 2024 was due to the securities restructuring executed during the first quarter of 2025 and the impact of lower interest rates on the value of the securities portfolio. At December 31, 2025, the unrealized net loss of the held to maturity investment securities portfolio was $315.2 million, or 15.4%, below its amortized cost basis. At December 31, 2024, the unrealized net loss of the held to maturity investment securities portfolio was $420.1 million, or 18.6%, below its amortized cost basis.
Previous wording
As described above, the Company elected to classify some of its securities purchased as held to maturity at the time of purchase. The securities designated as held to maturity are securities the Company does not intend to sell and expects to hold through maturity. The securities consist of $147.3 million of agency securities, $2.1 billion of residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises and $49.8 million of Small Business Administration loan-backed securities. The following are highlights of our held to maturity portfolio:
Current wording
As described above, the Company elected to classify some of its securities as held to maturity at the time of purchase. The securities designated as held to maturity are securities the Company does not intend to sell and expects to hold through maturity. The securities consist of $132.9 million of agency securities, $1.9 billion of residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises and $46.1 million of Small Business Administration loan-backed securities. The following are highlights of our held to maturity portfolio:
Previous wording
Securities available for sale consist of debentures of government sponsored entities, state and municipal bonds, residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises, Small Business Administration loan-backed securities and corporate securities. At December 31, 2024, investment securities with a fair value and amortized cost of $4.3 billion and $5.1 billion, respectively, were classified as available for sale. The adjustment for net unrealized losses of $808.6 million between the carrying value of these securities and their amortized cost has been reflected, net of tax, in the Consolidated Balance Sheet as a component of Accumulated Other Comprehensive Loss. The following are highlights of our available for sale securities:
Current wording
Securities available for sale consist of debentures of government sponsored entities, state and municipal bonds, residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises, Small Business Administration loan-backed securities and corporate securities. At December 31, 2025, investment securities with a fair value and amortized cost of $6.3 billion and $6.7 billion, respectively, were classified as available for sale. The adjustment for net unrealized losses of $382.8 million between the carrying value of these securities and their amortized cost has been reflected, net of tax, in the Consolidated Balance Sheet as a component of Accumulated Other Comprehensive Loss. The following are highlights of our available for sale securities:
Previous wording
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, compared to 1,232 investment securities in an unrealized loss position, which totaled $1.2 billion at December 31, 2023. See Note 1—Summary of Significant Accounting Policies and Note 3—Investment Securities in the consolidated financial statements for additional information.
Current wording
At December 31, 2025, we had 1,073 investment securities (including both available for sale and held to maturity) in an unrealized loss position, which totaled $737.2 million, compared to 1,214 investment securities in an unrealized loss position, which totaled $1.3 billion at December 31, 2024. See Note 1—Summary of Significant Accounting Policies and Note 3—Investment Securities in the consolidated financial statements for additional information.
Previous wording
Management evaluates securities for impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For securities designated as held for sale, credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component would be recognized through the provision for credit losses. Consideration is given to (1) the financial condition and near-term prospects of the issuer including looking at default and delinquency rates, (2) the outlook for receiving the contractual cash flows of the investments, (3) the extent to which the fair value has been less than cost, (4) our intent to hold the security as well as there being no requirement to sell the security, (5) the anticipated outlook for changes in the general level of interest rates, (6) credit ratings, (7) third-party guarantees, and (8) collateral values. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the investments. The Company performed an analysis that determined that the following securities have a zero expected credit loss: U.S. Treasury Securities, Agency-Backed Securities including securities issued by Ginnie Mae, Fannie Mae, FHLB, FFCB and SBA. All of the U.S. Treasury and Agency-Backed Securities have the full faith and credit backing of the United States Government or the credit backing of one of its agencies. Municipal securities and all other securities that do not have a zero expected credit loss are evaluated quarterly to determine whether there is a credit loss associated with a decline in fair value. All debt securities in an unrealized loss position as of December 31, 2024 continue to perform as scheduled and we do not believe there is a credit loss or a provision for credit losses is necessary. Also, as part of our evaluation of our intent and ability to hold investments, we consider our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. We do not currently intend to sell the securities within the portfolio and it is not more-likely-than-not that we will be required to sell the debt securities.
Current wording
Management evaluates securities for impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For securities designated as available for sale, credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component would be recognized through the provision for credit losses. Consideration is given to (1) the financial condition and near-term prospects of the issuer including looking at default and delinquency rates, (2) the outlook for receiving the contractual cash flows of the investments, (3) the extent to which the fair value has been less than cost, (4) our intent to hold the security as well as there being no requirement to sell the security, (5) the anticipated outlook for changes in the general level of interest rates, (6) credit ratings, (7) third-party guarantees, and (8) collateral values. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the investments. The Company performed an analysis that determined that the following securities have a zero expected credit loss: U.S. Treasury Securities, Agency-Backed Securities including securities issued by Ginnie Mae, Fannie Mae, FHLB, FFCB and SBA. All of the U.S. Treasury and Agency-Backed Securities have the full faith and credit backing of the United States Government or the credit backing of one of its agencies. Municipal securities and all other securities that do not have a zero expected credit loss are evaluated quarterly to determine whether there is a credit loss associated with a decline in fair value. All debt securities in an unrealized loss position as of December 31, 2025 continue to perform as scheduled and we do not believe there is a credit loss or a provision for credit losses is necessary. Also, as part of our evaluation of our intent and ability to hold investments, we consider our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. We do not currently intend to sell the securities within the portfolio, and it is not more-likely-than-not that we will be required to sell the debt securities.
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 December 31, 2024, other investment securities represented approximately $223.6 million, or 0.48% of total assets and primarily consisted of FRB and FHLB stock, which totaled $150.3 million and $18.1 million, respectively. There were no gains or losses on the sales of these securities during 2024 or 2023.
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 December 31, 2025, other investment securities represented approximately $353.4 million, or 0.53% of total assets and primarily consisted of FRB and FHLB stock, which totaled $234.4 million and $18.1 million, respectively. There were no gains or losses on the sales of these securities during 2025 or 2024.
Previous wording
Approximately 85.2% 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 or Bank Term Funding Program. Approximately 14.4% 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 98% of the municipal bond portfolio has ratings in the Double A or Triple A category.
Current wording
Approximately 84.1% 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 or Bank Term Funding Program. Approximately 11.6% 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 December 31, 2024, the portfolio had an effective duration of 6.39 years. We continue to monitor duration risk and seek to align actual duration with the target range.
Current wording
As of December 31, 2025, the portfolio had an effective duration of 4.60 years. We continue to monitor duration risk and seek to align actual duration with the target range.
Previous wording
The balance of loans held for sale increased $228.5 million from December 31, 2023, to $279.4 million on December 31, 2024. Loans held for sale at December 31, 2024 consisted of mortgage and SBA loans held for sale while at December 31, 2023, loans held for sale consisted only of mortgage loans held for sale.
Current wording
The balance of loans held for sale increased $65.9 million from December 31, 2024, to $345.3 million on December 31, 2025. Loans held for sale at December 31, 2025 and 2024 consisted of mortgage and SBA loans held for sale. The increase in loans held for sale in 2025 was driven by an increase in SBA loans held for sale as this line of business became more established in 2025.
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. This new activity in SBA loans held for sale was the main reason for the significant increase in loans held for sale during 2024.
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 $283.9 million at December 31, 2025, a $102.6 million increase from $181.3 million at December 31, 2024. See Note – 28 – SBA Loans Held for Sale for more information.
Previous wording
Mortgage loans held for sale totaled $98.1 million at December 31, 2024, an increase from $50.9 million at December 31, 2023. Total mortgage production was $1.9 billion in 2024. This compares to $2.2 billion 2023. Mortgage production declined from 2023 and remained flat in 2024 as mortgage rates have continued to remain high and housing inventory has remained low. The percentage of mortgage production sold into the secondary market increased in 2024 to 58% from 40% in 2023. 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 $61.4 million at December 31, 2025, a decrease from $98.1 million at December 31, 2024. Total mortgage production was $2.5 billion in 2025. This compares to $1.9 billion 2024. Mortgage production increased from 2024 as average mortgage rates have declined in 2025 along with the effects of adding new markets with the acquisition of Independent on January 1, 2025. The percentage of mortgage production sold into the secondary market decreased in 2025 to 37% from 58% in 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
Interest income from loans held for sale increased $4.7 million, or 228.4% during 2024 to $6.7 million from $2.0 million in 2023. This increase was due to an increase in the average balance of loans held for sale of $69.1 million or 224.8%, from $30.7 million for the year ended December 31, 2023 to $99.9 million for the year ended December 31, 2024. Of this increase, $35.2 million was related to SBA loans held for sale and $33.9 million was related to mortgage loans held for sale. The yield on loans held for sale remained fairly stable in 2024 compared to 2023. For year ended 2024 the yield on loans held for sale was 6.71% compared to 6.63% in 2023.
Current wording
Interest income from loans held for sale increased $12.1 million, or 180.3%, during 2025 to $18.8 million from $6.7 million in 2024. This increase was due to an increase in the average balance of loans held for sale of $162.1 million, or 162.4%, from $99.9 million for the year ended December 31, 2024 to $262.0 million for the year ended December 31, 2025. Of this increase, $158.0 million was related to SBA loans held for sale and $4.2 million was related to mortgage loans held for sale. The yield on loans held for sale increased in 2025 compared to 2024. For year ended 2025 the yield on loans held for sale was 7.17% compared to 6.71% in 2024. This increase was driven by the higher average balance held of SBA loans held for sale in 2025 which have higher yields.
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Current report — wording carried from elsewhere
Our ongoing philosophy is to remain in a liquid position, as reflected by such indicators as the composition of our earning assets, typically including some level of reverse repurchase agreements; federal funds sold; balances at the Federal Reserve Bank; and/or other short-term investments; asset quality; well-capitalized position; and profitable operating results. Cyclical and other economic trends and conditions can disrupt our desired liquidity position at any time. We expect that these conditions would generally be of a short-term nature. Under such circumstances, we expect our reverse repurchase agreements and federal funds sold positions, or balances at the Federal Reserve Bank, if any, to serve as the primary source of immediate liquidity. We could draw on additional alternative immediate funding sources from lines of credit extended to us from our correspondent banks. The Bank may also access funds from borrowing facilities established with the Federal Home Loan Bank of Atlanta and the discount window of the Federal Reserve Bank of Atlanta.