SouthState Bank Corp
For the period ended Jun 30, 2026. Filed Jul 31, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 31, 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-Q
Period ended 2026-03-31; filed 2026-05-01.
0001104659-26-053548
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-31.
0001104659-26-089026
Item 2. 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 162 previous paragraphs and 138 current paragraphs.
60 unchanged; 58 reworded; 20 added; 42 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 117 previous and 107 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 (20)
Current report
SouthState utilizes economic forecasts provided by a third-party service provider and applies probability weightings to multiple economic scenarios based on management's assessment of economic and market conditions. As a sensitivity analysis, applying a 100% weighting to the adverse scenario would increase the ACL by approximately $176 million, while applying a 100% weighting to the upside scenario would decrease the ACL by approximately $122 million. The adverse scenario reflects recessionary economic conditions, while the upside scenario reflects stronger-than-expected economic performance. This analysis is hypothetical and does not represent management's estimate of expected credit losses as of June 30, 2026.
Current report
The following table presents selected financial figures and ratios for the three and six months ended June 30, 2026 and 2025:
Current report
●Denotes a non-GAAP financial measure. The section titled “Reconciliation of GAAP to non-GAAP” below provides a table that reconciles GAAP measures to non-GAAP measures.
Current report
The decline in non-tax equivalent and the Tax Equivalent (“TE”) net interest margin of 24 basis points in the second quarter of 2026 compared to the same quarter of 2025 primarily reflected lower yields on interest‑earning assets, driven by reduced loan accretion income and a lower interest rate environment, partially offset by lower funding costs and balance‑sheet mix changes.
Current report
The interest earned on investment securities increased in the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to a higher average balance in investment securities and a modest increase in the yield on the investment portfolio. The average balance of investment securities for the three and six months ended June 30, 2026 increased by approximately $699.9 million and $797.2 million, respectively, compared to the same periods in 2025. The Company has increased the size of the investment securities portfolio commensurate with the growth in the balance sheet. The improvement in the yield, as well as a shortened duration of the investment portfolio is a result of the reinvestment and repositioning strategies executed in the first quarter of 2025.
Current report
Interest earned on loans held for investment decreased slightly during the three and six months ended June 30, 2026, from the comparable periods in 2025. Some key highlights for the quarter ended June 30, 2026, are outlined below:
Current report
Noninterest income increased during the six months ended June 30, 2026 compared to the same period in 2025. 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 report
Noninterest expense decreased by $66.6 million, or 8.5%, during the six months ended June 30, 2026, compared to the same period in 2025. The categories and explanations for the year-to-date fluctuations are generally consistent with those discussed in the quarterly comparison above, except as noted below.
Current report
Our effective tax rate for the first six months of the year was 22.79% compared to 24.57% for the first six months of 2025. The decrease in the year-to-date effective tax rate compared to the same period of 2025 was due primarily to a reduction in non-deductible executive compensation, an increase in tax-exempt interest income and a decrease in non-deductible FDIC premiums. In addition to these items, there was a $5.6 million remeasurement of the Company’s deferred tax balances resulting from the acquisition of Independent in the first quarter of 2025.
Current report
Management continues to utilize a probability-weighted blend of baseline, upside, and adverse economic scenarios in estimating expected credit losses. For the quarter ended June 30, 2026, management maintained scenario weightings of 40% baseline, 20% upside, and 40% adverse. Although the June economic forecast reflected increased concern regarding inflation, interest rates, energy prices, and geopolitical developments, forecast assumptions and their impact on modeled losses remained generally consistent with the prior quarter. Management believes a moderate weighting toward adverse conditions remains appropriate given continued economic uncertainty, notwithstanding generally stable credit conditions and macroeconomic forecasts. The Company recorded a total provision for credit losses of $15.9 million for the second quarter of 2026.
Current report
At June 30, 2026, the Company had a reserve on unfunded commitments of $76.5 million, which was recorded as a liability on the Consolidated Balance Sheet, compared to $69.2 million at March 31, 2026, and $69.6 million at December 31, 2025. During the three and six months ended June 30, 2026, the Company recorded an increase in the reserve for unfunded commitments of $7.3 million and $6.9 million, respectively. For the prior comparative period, the Company recorded an increase in the reserve for unfunded commitments of $2.4 million and $19.4 million, respectively. Of the $19.4 million of provision for credit losses recorded for unfunded commitments during the six months ended June 30, 2025, $12.1 million was related to the initial provision for unfunded commitments acquired from Independent and $7.3 million was for all other unfunded commitments.
Current report
The following tables present summary of ACL for the three and six months ended June 30, 2026, and 2025:
Current report
Total interest-bearing deposits increased $1.1 billion to $42.9 billion at June 30, 2026, from $41.8 billion at December 31, 2025. Interest-bearing checking accounts increased $871.8 million and time deposits increased by $501.2 billion while money market accounts decreased by $220.6 million during the first half of 2026. The growth in interest-bearing checking accounts was mainly through an increase in reciprocal and brokered checking accounts of $870.0 million while the growth in time deposits was mainly through an increase in brokered accounts of $525.0 million. The Company has allowed some higher costing local deposits run off in 2026, replacing them with brokered deposits at lower interest rates. Average interest-bearing deposits increased $1.1 billion to $42.1 billion for the quarter ended June 30, 2026 compared to the quarter ended December 31, 2025. The increase in average interest-bearing deposits from the fourth quarter of 2025 was due to a $1.5 billion increase in interest-bearing checking accounts and money market accounts including $917.2 million in brokered interest-bearing checking accounts. For more information on the composition of our total deposits, see Note 8 — Deposits. Due to the competitive nature for in-market deposits and higher costs, the Company has allowed some higher costing local deposits to run-off in 2026 and increased its use of brokered deposits to fund loan growth in 2026.
Current report
Federal funds purchases related to the Correspondent Banking Division and securities sold under agreements to repurchase were $569.5 million at June 30, 2026, a $48.7 million decrease from December 31, 2025. Corporate and subordinated debentures increased by $213,000 to $696.7 million. The Company borrowed $300.0 million in short term FHLB borrowings in the second quarter of 2026 which made up the balance in other borrowings at June 30, 2026. The Company had no FHLB borrowings at December 31, 2025.
Current report
During the six months ended June 30, 2026, the Company continued to operate within its established liquidity risk limits. At June 30, 2026, key internal liquidity metrics, including the loan-to-deposit ratio and reliance on noncore funding, remained within policy limits and consistent with expectations. Total available borrowing capacity, including access to the Federal Home Loan Bank, Federal Reserve facilities, and unsecured federal funds lines, remained stable compared with December 31, 2025.
Current report
Liquidity was also provided by growth in deposits and short term FHLB advances. Total deposits were $56.3 billion at June 30, 2026, an increase of $1.2 billion from $55.1 billion at December 31, 2025. Included in total deposits as of June 30, 2026 and December 31, 2025, we had $2.3 billion and $1.7 billion, respectively, of traditional, out–of–market brokered time deposits, $2.6 billion and $2.0 billion, respectively, in brokered interest-bearing checking and money market accounts and $4.3 billion and $4.0 billion, respectively, of reciprocal deposits. For more information on changes in deposits, see Interest-Bearing Liabilities and Noninterest-Bearing Deposits sections of the MD&A.
Current report
The table and discussion below describes our Primary Funding Sources and their relationship to uninsured deposits as of June 30, 2026.
Current report
The Company’s primary interest rate risk exposures continue to include repricing risk, option risk, basis risk, and yield curve risk. During the six months ended June 30, 2026, changes in earnings at risk and EVE sensitivity measures were primarily driven by loan and deposit growth, changes in deposit mix or betas, securities portfolio activity, or shifts in funding.
Current report
Management uses deposit beta assumptions in its interest rate risk models and may apply overlays to reflect current market conditions. Based On the Company’s deposit mix at June 30, 2026, the assumed deposit beta was 38.7%.
Current report
The updated interest rate sensitivity analysis is presented below. Overall, the Company’s exposure to changes in interest rates remains within internal policy limits/consistent with risk appetite, and management continues to monitor and manage interest rate risk in accordance with the framework described in the 2025 Form 10-K.
Removed paragraphs (42)
Previous report
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.
Previous report
We have pursued, and continue to pursue, a growth strategy that focuses on organic growth, supplemented by acquisitions of select financial institutions, or branches in certain market areas.
Previous report
Of course, there are risks inherent in all loans, as such, we maintain an allowance for credit losses, otherwise referred to herein as ACL, to absorb probable losses on existing loans that may become uncollectible. We establish and maintain this allowance by charging a provision for credit losses against our operating earnings. In the following discussion, we have included a detailed discussion of this process.
Previous report
In addition to earning interest on our loans and investments, we earn income through fees and other services we charge to our customers. We incur costs in addition to interest expense on deposits and other borrowings, the largest of which is salaries and employee benefits. We describe the various components of this noninterest income and noninterest expense in the following discussion.
Previous report
The following sections also identify significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements. We encourage you to read this discussion and analysis in conjunction with the financial statements and the related notes and the other statistical information also included in this report.
Previous report
Capital Management
Previous report
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 Note 21 — Stock Repurchase Program to our consolidated financial statements.
Previous report
The following is a summary of our allowance for credit losses (“ACL”) critical accounting policy, which is highly dependent on estimates, assumptions and judgments.
Previous report
The ACL reflects management’s estimate of the portion of the amortized cost of loans and unfunded commitments that it does not expect to collect. Management has a methodology determining its ACL for loans held for investment and certain off-balance-sheet credit exposures. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the loan portfolio. The Company’s estimate of its ACL involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in a range of expected credit losses. It is possible that others, given the same information, may at any point in time reach a different reasonable conclusion. The Company’s ACL recorded on the balance sheet reflects management’s best estimate within the range of expected credit losses. The Company recognizes in net income the amount needed to adjust the ACL for management’s current estimate of expected credit losses. See Note 2 — Summary of Significant Accounting Policies for further detailed descriptions of our estimation process and methodology related to the ACL. See also Note 6 — Allowance for Credit Losses and “Allowance for Credit Losses (ACL) on Loans and Certain Off-Balance-Sheet Credit Exposures” in this MD&A.
Previous report
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 byapproximately $194 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL byapproximately $137 million. Theadverse 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 March 31, 2026.
Previous report
Non-Tax Equivalent (“TE”) net interest income increased $17.1 million, or 3.1%, to $561.6 million in the first quarter of 2026 compared to $544.5 million in the same period in 2025. Interest earning assets averaged $60.2 billion during the three months ended March 31, 2026 compared to $57.5 billion for the same period in 2025, an increase of $2.7 billion, or 4.7%. Interest bearing liabilities averaged $42.8 billion during the three months ended March 31, 2026 compared to $40.8 billion for the same period in 2025, an increase of $2.1 billion, or 5.1%. Despite a decline in net interest margin, net interest income increased year over year as growth in average interest‑earning assets more than offset the impact of lower asset yields.
Previous report
The interest earned on investment securities increased by $18.1 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. 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 2026 compared to the same period in 2025. The average balance of investment securities for the three months ended March 31, 2026 increased $895.6 million from the comparable period in 2025 due to the reinvestment of the securities acquired from the Independent acquisition along with the Company’s repositioning strategy of legacy investment securities in the first quarter of 2025. In the first quarter of 2026, the investment securities from these transactions were held for a full quarter while during the period of the transactions in 2025 the investment securities were only held for a partial quarter. The yield on the total investment securities increased 50 basis points during the three months ended March 31, 2026 compared to the same period in 2025. The Company saw an improvement in the yield of the investment portfolio as a result of the securities repositioning completed during the first quarter of 2025.
Previous report
Interest earned on loans held for investment decreased $3.1 million to $717.8 million in the quarter ended March 31, 2026 compared to the same period in 2025. The decrease in interest income primarily reflects the continued runoff of acquired loans and related accretion income, while yields on the non‑acquired loan portfolio remained stable. Some key highlights for the quarter ended March 31, 2026 are outlined below:
Previous report
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”), PPNR Per Share 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 report
Annualized
Previous report
Management considers forward-looking information in estimating expected credit losses. The Company subscribes to a third-party service which provides a quarterly macroeconomic baseline outlook and alternative scenarios for the United States economy. The baseline, along with the evaluation of alternative scenarios, is used by management to determine the best estimate within the range of expected credit losses. Management evaluates the appropriateness of the reasonable and supportable forecast scenarios and takes into consideration the scenarios in relation to actual economic and other data, such as gross domestic product growth, monetary and fiscal policy, inflation, supply chain issues and global events like the Russian/Ukraine conflict, unrest in middle east, and changes in global trade policy, as well as the volatility and magnitude of changes within those scenarios quarter over quarter, and consideration of conditions within the Bank’s operating environment and geographic area. Additional forecast scenarios may be weighted along with the baseline forecast to arrive at the final reserve estimate. While periods of relative economic stability should generally lead to stability in forecast scenarios and weightings to estimate credit losses, periods of instability can likewise require management to adjust the selection of scenarios and weightings, in accordance with the accounting standards. For the contractual term that extends beyond the reasonable and supportable forecast period, the Company reverts to the long term mean of historical factors within four quarters using a straight-line approach. The Company generally uses an eight-quarter forecast and a four-quarter reversion period.
Previous report
There are several headwinds that continue to weigh on the economy, though 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 March 31, 2026, management selected a baseline weighting of 40%, an upside scenario weighting of 20% and a more severe scenario weighting of 40%. Scenario weightings are generally expected to remain stable but are reviewed on a quarterly basis. The more severe scenario weighting increased by 5%, and the upside scenario decreased by 5%, to reflect events occurring subsequent to and not captured in the otherwise improved economic forecast, around the conflict in Iran and the market reaction to military escalation. Without a shift, the forecast changes inferred a level of economic improvement that does not align with Management’s outlook, which includes continued recognition of downside risks and elevated uncertainty in the economic forecast from high interest rates, inflation, lack of clarity on trade impacts from policy and geopolitical conflicts, and tightening credit conditions. Employment resilience and improvement in the commercial real estate markets kept expected losses largely stable. The Company recorded a total provision for credit losses of $10.8 million for the first quarter of 2026.
Previous report
The following table presents a summary of the changes in the ACL, for the three months ended March 31, 2026, and 2025:
Previous report
Total interest-bearing deposits increased by $454.8 million, or 4.4% annualized, to $42.2 billion at March 31, 2026 from $41.8 billion at December 31, 2025. Interest-bearing checking accounts increased $281.1 million, savings accounts increased by $20.8 million and money market accounts increased by $262.5 million during the first quarter of 2026. The growth in interest-bearing checking accounts and money market accounts was mainly through reciprocal and brokered checking accounts. Time deposits decreased $109.5 million during the quarter which was driven by $143.8 million decline in brokered time deposits. Federal funds purchases related to the Correspondent Banking Division and securities sold under agreements to repurchase were $643.4 million at March 31, 2026, a $25.2 million increase from December 31, 2025. Corporate and subordinated debentures declined by $107,000 to $696.6 million.
Previous report
Due to competitive pressures to retain deposits, the Company has not lowered rates the full rate decreases on interest-bearing deposit accounts. Average interest-bearing deposits increased $2.2 billion to $41.5 billion in the quarter ended March 31, 2026 compared to the same period in 2025. The increase in average interest-bearing deposits from the first quarter of 2025 was mainly due to a $1.9 billion increase in brokered interest-bearing checking accounts, including brokered money market accounts. For more information on the composition of our total deposits, see Note 8 — Deposits.
Previous report
The following table shows the changes in shareholders’ equity during the three months ended March 31, 2026.
Previous report
Under current regulations, the Company and the Bank are subject to a minimum ratio of common equity Tier 1 capital (“CET1”) to risk-weighted assets of 4.5% and a minimum required ratio of Tier 1 capital to risk-weighted assets of 6%. The minimum required leverage ratio is 4%. The minimum required total capital to risk-weighted assets ratio is 8%. Refer to Note 16— Capital Ratios for more information regarding Company and Bank’s regulatory capital compliance requirements.
Previous report
The ALCO has established key risk indicators to monitor liquidity and interest rate risk. The key risk indicators are reviewed and approved by the ALCO on an annual basis. The liquidity key risk indicators include the loan to deposit ratio (policy limit not to exceed 100%), net noncore funding dependence ratio (policy limit not to exceed 30%), on-hand liquidity to total liabilities ratio (policy limit not to fall below 5%), the percentage of securities pledged to total securities (policy limit not to exceed 85%), primary liquidity to uninsured deposits excluding collateralized deposits (policy limit to maintain a minimum of 95%), primary liquidity to uninsured deposits including collateralized deposits (policy limit to maintain a minimum of 80%) and the ratio of brokered deposits to total deposits (policy limit not to exceed 15%). As of March 31, 2026, the Company was operating within its liquidity policy limits.
Previous report
Asset liquidity is maintained by the maturity structure of loans, investment securities and other short-term investments. Management has policies and procedures governing the length of time to maturity on loans and investments. Normally, changes in the earning asset mix are of a longer-term nature and are not used for day-to-day corporate liquidity needs.
Previous report
Our liabilities provide liquidity on a day-to-day basis. Daily liquidity needs are met from deposit levels or from our use of federal funds purchased, securities sold under agreements to repurchase, interest-bearing deposits at other banks and other short-term borrowings. We engage in routine activities to retain deposits intended to enhance our liquidity position. These routine activities include various measures, such as the following:
Previous report
Our non-acquired loan portfolio increased during the three months ended March 31, 2026 by approximately $1.6 billion, or approximately 18.6% annualized, compared to the balance at December 31, 2025. The increase from December 31, 2025, was mainly related to organic growth and renewals of acquired loans that are moved to our non-acquired loan portfolio. The acquired loan portfolio decreased by $677.1 million from the balance at December 31, 2025 due to principal paydowns, charge-offs, foreclosures and renewals of acquired loans.
Previous report
As discussed previously and presented below, the Bank maintains credit facilities with the Federal Home Loan Bank of Atlanta and the Federal Reserve Bank of Atlanta. The table below compares Primary Funding Sources to uninsured deposits as of March 31, 2026.
Previous report
Through the operations of our Bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. We manage the credit risk on these commitments by subjecting them to normal underwriting and risk management processes. We believe that we have adequate sources of liquidity to fund commitments that are drawn upon by the borrowers. In addition to commitments to extend credit, we also issue standby letters of credit, which are assurances to third parties that they will not suffer a loss if our customer fails to meet its contractual obligation to the third-party. Although our experience indicates that many of these standby letters of credit will expire unused, through our various sources of liquidity, we believe that we will have the resources to meet these obligations should the need arise.
Previous report
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.
Previous report
In addition to adequate liquidity, the Company and Bank are considered well capitalized by all regulatory capital standards as the Company and the Bank were significantly above the required capital levels as of March 31, 2025. The Company’s tier 1 leverage ratio, CET 1 risk-based capital ratio and total risk-based capital ratio were 9.38%, 11.27% and 13.69%, respectively, at March 31, 2026. The Bank’s Tier 1 leverage ratio, CET 1 risk-based capital ratio and total risk-based capital ratio were 10.27%, 12.33% and 13.44%, respectively, at March 31, 2026. As permitted, we elected to exclude accumulated other comprehensive income related to available for sale securities from Tier 1, CET 1 and total risk-based capital; however, even if our unrealized losses as of March 31, 2026 in our available for sale and held to maturity investment portfolios were recognized by selling the portfolios for liquidity purposes, all else being equal, our regulatory capital ratios would remain well in excess of the minimum standards and continue to be in the “well capitalized” regulatory classification.
Previous report
Our contingency funding plan describes several potential stages based on stressed liquidity levels. Liquidity key risk indicators are reported to the Board of Directors on a quarterly basis. As noted previously, we maintain various wholesale sources of funding. If our deposit retention efforts were to be unsuccessful, we would use these alternative sources of funding. Under such circumstances, depending on the external source of funds, our interest cost would vary based on the range of interest rates charged. This could increase our cost of funds, impacting our net interest margin and net interest spread.
Previous report
Our interest rate risk principally consists of reprice, option, basis, and yield curve risk. Reprice risk results from differences in the maturity or repricing characteristics of asset and liability portfolios. Option risk arises from embedded options in the investment and loan portfolios such as investment securities calls and loan prepayment options. Option risk also exists since deposit customers may withdraw funds at their discretion in response to general market conditions, competitive alternatives to existing accounts or other factors. The exercise of such options may result in higher costs or lower revenue. Basis risk refers to the potential for changes in the underlying relationship between market rates or indices, which subsequently result in narrowing spreads on interest-earning assets and interest-bearing liabilities. Basis risk also exists in administered rate liabilities, such as interest-bearing checking accounts, savings accounts, and money market accounts where the price sensitivity of such products may vary relative to general markets rates. Yield curve risk refers to adverse consequences of nonparallel shifts in the yield curves of various market indices that impact our assets and liabilities.
Previous report
We use simulation analysis as a primary method to assess earnings at risk and equity at risk due to assumed changes in interest rates. Management uses the results of its various simulation analyses in combination with other data and observations to formulate strategies designed to maintain interest rate risk within risk tolerances.
Previous report
Simulation analysis involves the use of several assumptions including, but not limited to, the timing of cash flows such as the terms of contractual agreements, investment security calls, loan prepayment speeds, deposit attrition rates, the interest rate sensitivity of loans and deposits relative to general market rates, and the behavior of interest rates and spreads. The assumptions for loan prepayments, deposit decay, and nonstable deposit balances are derived from models that use historical bank data. These models are independently validated. Equity at risk simulation uses assumptions regarding discount rates that value cash flows. Simulation analysis is highly dependent on model assumptions that may vary from actual outcomes. Key simulation assumptions are subject to sensitivity analysis to assess the impact of assumption changes on earnings at risk and equity at risk. Model assumptions are reviewed by our Assumptions Committee. While the Bank is continuously refining its modeling methodology, the core principles of the methodology have remained stable over for several years.
Previous report
Earnings at risk is defined as the percentage change in net interest income due to assumed changes in interest rates. Earnings at risk is generally used to assess interest rate risk over relatively short time horizons.
Previous report
Equity at risk is defined as the percentage change in the net economic value of assets and liabilities due to changes in interest rates compared to a base net economic value. The discounted present value of all cash flows represents our economic value of equity. Equity at risk is generally considered a measure of the long-term interest rate exposures of the balance sheet at a point in time.
Previous report
The earnings simulation models consider our contractual agreements with regard to investments, loans, deposits, borrowings, and derivatives as well as a number of behavioral assumptions applied to certain assets and liabilities.
Previous report
Mortgage banking derivatives used in the ordinary course of business consist of forward sales contracts and interest rate lock commitments on residential mortgage loans. These derivatives involve underlying items, such as interest rates, and are designed to mitigate risk. Derivatives are also used to hedge mortgage servicing rights. For additional information see Note 15 — Derivative Financial Instruments in the consolidated financial statements.
Previous report
From time to time, we execute interest rate swaps to hedge some of our interest rate risks. Under these arrangements, the Company enters into a variable rate loan with a client in addition to a swap agreement. The swap agreement effectively converts the client’s variable rate loan into a fixed rate loan. The Company then enters into a matching swap agreement with a third-party dealer to offset its exposure on the customer swap. The Company may also execute interest rate swap agreements that are not specific to client loans. As of March 31, 2026, the Company had a series of short-term interest rate hedges to address monthly accrual mismatches related to the Company’s ARC program related to tenor mismatches related to SOFR. For additional information on these derivatives refer to Note 15 — Derivative Financial Instruments in the consolidated financial statements.
Previous report
Our interest rate risk key indicators are applied to a static balance sheet using forward rates from the Moody’s Baseline Scenario. The Company will also use other rate forecasts, including, but not limited to, Moody’s Consensus Scenario. This Base Case Scenario assumes the maturity composition of asset and liability rollover volumes is modeled to approximately replicate current consolidated balance sheet characteristics throughout the simulation. These treatments are consistent with the Company’s goal of assessing current interest rate risk embedded in its current balance sheet. The Base Case Scenario assumes that maturing or repricing assets and liabilities are replaced at prices referencing forward rates derived from the selected rate forecast consistent with current balance sheet pricing characteristics. Key rate drivers are used to price assets and liabilities with sensitivity assumptions used to price non-maturity deposits. The sensitivity assumptions for the pricing of non-maturity deposits are subjected to sensitivity analysis no less frequently than on an annual basis.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Reworded paragraphs (58)
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, 2025. Results for the three months ended March 31, 2026, are not necessarily indicative of the results for the year ending December 31, 2026 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, 2025. The MD&A section in this Form 10-Q discusses updates to the Company’s business since the year ended December 31, 2025. Results for the three and six months ended June 30, 2026, are not necessarily indicative of the results for the year ending December 31, 2026, 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 Bank Corporation and its consolidated subsidiaries. References to the “Bank” means SouthState Bank Corporation’s wholly owned subsidiary, SouthState Bank, National 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 Bank Corporation is a financial holding company headquartered in Winter Haven, Florida. We provide a wide range of banking services and products to our customers through our Bank. The Bank operates SouthState Securities Corp. (“SouthState Securities”), a full-service registered broker dealer headquartered in Memphis, Tennessee. The services offered by SouthState Securities are complementary to the Bank’s correspondent banking and capital markets businesses and provide additional opportunities to the Bank’s client base. The Bank also operates SouthState Private Capital Management LLC (“SouthState PCM”), a wholly-owned registered investment advisor, which offers support to the Bank’s wealth management line of business. 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.
Current wording
SouthState Bank Corporation is a financial holding company headquartered in Winter Haven, Florida. We provide a wide range of banking services and products to our customers through our Bank. There have been no material changes to the Company’s business or organizational structure during the six months ended June 30, 2026, except as described below. During the second quarter of 2026, the Company completed the legal dissolution of one of its subsidiaries, SSB Insurance Corp., a captive insurance subsidiary pursuant to Section 831(b) of the U.S. Tax Code. The Company’s business structure remains otherwise unchanged.
Previous wording
At March 31, 2026, we had $68.0 billion in assets and 6,390 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.
Current wording
At June 30, 2026, we had approximately $68.9 billion in assets and 6,431 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.
Previous wording
The following discussion describes our results of operations for the quarter ended March 31, 2026, compared to the quarter ended March 31, 2025, and also analyzes our financial condition as of March 31, 2026, as compared to December 31, 2025. 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 six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, and also analyzes our financial condition as of June 30, 2026, as compared to December 31, 2025.
Previous wording
Our consolidated financial statements are prepared based on the application of accounting policies in accordance with GAAP and follow general practices within the banking industry. Our financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions and judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues and expenses. Differences in the application of these policies could result in material changes in our consolidated financial position and consolidated results of operations and related disclosures. Understanding our accounting policies is fundamental to understanding our consolidated financial position and consolidated results of operations. Accordingly, our significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in Note 2 — Summary of Significant Accounting Policies and Note 3 — Recent Accounting and Regulatory Pronouncements of our consolidated financial statements in this Quarterly Report on Form 10-Q and in Note 1 — Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
Our consolidated financial statements are prepared based on the application of accounting policies in accordance with GAAP and follow general practices within the banking industry. Our financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions and judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues and expenses. Differences in the application of these policies could result in material changes in our consolidated financial position and consolidated results of operations and related disclosures. Understanding our accounting policies is fundamental to understanding our consolidated financial position and consolidated results of operations. There have been no material changes to those policies during the six months ended June 30, 2026, except as described below.
Previous wording
We reported consolidated net income of $225.8 million, or diluted earnings per share (“EPS”) of $2.28, for the first quarter of 2026 as compared to consolidated net income of $89.1 million, or diluted EPS of $0.87, in the comparable period of 2025, a 153.5% increase in consolidated net income and a 162.1% increase in diluted EPS. The $136.7 million increase in consolidated net income was the net result of the following items:
Current wording
We reported consolidated net income of $230.0 million, or diluted earnings per share (“EPS”) of $2.35, for the second quarter of 2026 compared to consolidated net income of $215.2 million, or diluted EPS of $2.11, in the comparable period of 2025, a 6.9% increase in consolidated net income and a 11.4% increase in diluted EPS. During the six months ended June 30, 2026, we reported consolidated net income of $455.8 million, or diluted EPS of $4.64, compared to consolidated net income of $304.3 million, or diluted EPS of $2.99, in the comparable period of 2025, a 49.8% increase in consolidated net income and a 55.2% increase in diluted EPS. The $14.8 million increase in consolidated net income for the second quarter of 2026 compared to the same period of 2025 was the net result of the following items:
Previous wording
Our quarterly efficiency ratio improved to 51.1% in the first quarter of 2026 compared to 61.0% in the first quarter of 2025. The improvement in the efficiency ratio compared to the first quarter of 2025 was the result of a 12.2% decrease in noninterest expense (excluding amortization of intangibles) and a 4.9% increase in the total tax-equivalent net interest income and noninterest income. The decrease in noninterest expense was mainly due to the merger related expenses related to the Independent acquisition completed in the first quarter of 2025. The increase in the total of tax-equivalent net interest income and noninterest income was mainly due to an increase in investment securities interest income of $18.1 million, a decrease in interest expense on deposits of $7.4 million and an increase in correspondent banking and capital markets income of $11.9 million.
Current wording
Our quarterly efficiency ratio improved to 50.0% in the second quarter of 2026 compared to 52.7% in the second quarter of 2025. The improvement in the efficiency ratio compared to the second quarter of 2025 was the result of a 4.1% decrease in noninterest expense (excluding amortization of intangibles) and a 1.2% increase in the total tax-equivalent net interest income and noninterest income. The decrease in noninterest expense was mainly due to a decline in merger related expenses related to the Independent acquisition completed in the first quarter of 2025. The increase in the total of tax-equivalent net interest income and noninterest income was mainly due to an increase in investment securities interest income of $7.2 million, an increase in service charges and fees on deposit accounts of $3.7 million and an increase in correspondent banking and capital markets income of $7.0 million.
Previous wording
Basic and diluted EPS were $2.29 and $2.28, respectively, for the first quarter of 2026, compared to $0.88 and $0.87, respectively, for the first quarter of 2025. The increase in basic and diluted EPS was due to a 153.5% increase in net income in the first quarter of 2026 compared to the same period in 2025 along with a decrease in average basic common shares of 2.8%. The increase in net income in the first quarter of 2026 was mainly attributable to acquisition related expenses resulting from the Independent acquisition during the first quarter of 2025. These expenses included the initial provision for credit losses on Non-PCD loan portfolio and unfunded commitments of $92.1 million and the $66.5 million inmerger expenses. The decrease in average basic common shares was mainly due to the Company repurchasing 3.9 million common shares through the buyback plan in the open market over the last 12 months.
Current wording
Basic and diluted EPS were $2.36 and $2.35, respectively, for the second quarter of 2026, compared to $2.12 and $2.11, respectively, for the second quarter of 2025. The increase in basic and diluted EPS was due to a 6.9% increase in net income in the second quarter of 2026 compared to the same period in 2025 and a decrease in average basic common shares of 4.1%. The increase in net income in the second quarter of 2026 was mainly attributable to an increase in non-interest income of $9.9 million and a $17.3 million decline in non-interest expense. The decrease in average basic common shares was mainly due to the Company repurchasing approximately 4.9 million shares through the Company’s stock buyback plan since June 30, 2025.
Previous wording
Since the first quarter of 2025, the Federal Reserve reduced the target federal funds rate by a total of 75 basis points. These rate cuts lowered the target federal funds rate range to 3.50% to 3.75% as of March 31, 2026. Accordingly, interest rate conditions during the first quarter of 2026 were lower when compared to the first quarter of 2025, impacting both asset yields and funding costs. Some key highlights are outlined below:
Current wording
Net interest income is the Company’s principal source of income and a key driver of overall financial performance. Net interest income and net interest margin are affected by the level and mix of interest-earning assets and interest-bearing liabilities, as well as changes in long-term and short-term market interest rates. Since the second quarter of 2025, the Federal Reserve reduced the target federal funds rate by a total of 75 basis points, lowering the target federal funds rate range to 3.50% to 3.75% as of June 30, 2026. Accordingly, interest rate conditions during the second quarter of 2026 were lower compared to the second quarter of 2025, impacting both asset yields and funding costs.
Previous wording
The table below summarizes the analysis of changes in interest income and interest expense for the quarter ended March 31, 2026 and 2025 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 six months ended June 30, 2026, and 2025 and net interest margin on a tax equivalent basis:
Previous wording
The quarter-to-date average balance of interest-bearing liabilities increased $2.1 billion, or 5.1%, in the first quarter of 2026 compared to the same period in 2025. The cost of interest-bearing liabilities decreased by 21 basis points to 2.42% and the overall cost of funds, including demand deposits, decreased by 13 basis points to 1.84% in the first quarter of 2026 compared to the same period in 2025, reflecting lower market interest rates and deposit repricing during the period. Some key highlights for the quarter ended March 31, 2026 compared to the same period in 2025 include:
Current wording
The quarter-to-date average balance of interest-bearing liabilities increased in the second quarter of 2026 compared to the same period in 2025, while the cost of interest-bearing liabilities decreased, reflecting lower market interest rates across most deposit and borrowing categories. Some key highlights for the quarter ended June 30, 2026, compared to the same period in 2025 include:
Previous wording
Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. Average noninterest-bearing deposits decreased $134.1 million, or 1.0%, to $13.4 billion in the first quarter of 2026 compared to $13.5 billion during the same period in 2025. The decrease in the average balance of noninterest bearing deposits primarily reflects a continued shift in customer funds to interest‑bearing transactional and money market deposit accounts.
Current wording
Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. Average noninterest-bearing deposits decreased $122.1 million, or 0.9%, to $13.5 billion in the second quarter of 2026 compared to $13.6 billion during the same period in 2025. The decrease in the average balance of noninterest bearing deposits primarily reflects a continued shift in customer funds to interest‑bearing transactional and money market deposit accounts.
Previous wording
Noninterest income provides us with additional revenues that are significant sources of income. For the three months ended March 31, 2026 and 2025, noninterest income comprised 15.1% and 13.7%, 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 June 30, 2026, and 2025, noninterest income comprised 14.4%, and 13.1%, respectively, of total net interest income and noninterest income. For the six months ended June 30, 2026, and 2025, noninterest income comprised 14.8%, and 13.3%, respectively, of total net interest income and noninterest income.
Previous wording
Noninterest income increased by $14.0 million, or 16.3%, during the first quarter of 2026 compared to the same period in 2025. This quarterly change in total noninterest income resulted from the following:
Current wording
Noninterest income increased during the second quarter of 2026 compared to the same period in 2025. This quarterly change in total noninterest income resulted from the following:
Previous wording
Noninterest expense decreased by $49.3 million, or 12.1%, in the first quarter of 2026 compared to the same period in 2025. The quarterly decrease in total noninterest expense primarily resulted from the following:
Current wording
Noninterest expense decreased by $17.3 million, or 4.6%, in the second quarter of 2026 compared to the same period in 2025, primarily resulted from the following expenses:
Previous wording
Our effective tax rate was 22.50% for the three months ended March 31, 2026 compared to 26.53% for the three months ended March 31, 2025. The decrease in the effective rate for the quarter, when compared to the same period in the prior year, is driven primarily by higher non-deductible executive compensation related to the acquisition of Independent, as well as non-deductible merger expense, and one-time expense of $5.6 million related to the remeasurement of the Company’s deferred tax balances resulting from the acquisition of Independent and new blended income tax rate recognized in the first quarter of 2025 compared to 2026. This was partially offset by an increase in pre-tax book income in the first quarter of 2026 compared to the same period in 2025.
Current wording
Our effective tax rate was 23.07% for the three months ended June 30, 2026, compared to 23.73% for the three months ended June 30, 2025. The decrease in the effective rate for the quarter, when compared to the same period in the prior year, was driven primarily by higher non-deductible executive compensation, as well as non-deductible merger expenses related to the acquisition of Independent in 2025 compared to 2026. In addition, there was an increase in tax-exempt interest income in the current quarter compared to the same period in 2025. This was partially offset by an increase in pre-tax book income in the second quarter of 2026 compared to the second quarter of 2025.
Previous wording
As discussed in Note 22 —Segment Reporting, the Company’s operations are managed and financial performance is evaluated on an organization-wide basis, and the Company’s banking and finance operations are considered by management to constitute one reportable operating segment, the General Banking Unit.
Current wording
As discussed in Note 21 — Segment Reporting, the Company’s operations are managed and financial performance is evaluated on an organization-wide basis, and the Company’s banking and finance operations are considered by management to constitute one reportable operating segment, the General Banking Unit. There have been no material changes to the Company’s segment structure during the six months ended June 30, 2026.
Previous wording
Pre-Provision Net Revenue, Pre-Provision Net Revenue Per Share and Tax Equivalent Net Interest Margin
Current wording
Pre-Provision Net Revenue and Tax Equivalent Net Interest Margin
Previous wording
Our total assets increased by approximately $781.8 million, or 1.2%, from December 31, 2025 to approximately $68.0 billion at March 31, 2026. Within total assets, cash and cash equivalents decreased by $305.4 million, or 9.6%, loans increased by $898.3 million or 1.8% and investment securities increased by $193.3 million, or 2.2% during the period. Within total liabilities, deposits grew $729.9 million, or 1.3%. Total shareholder’s equity decreased by $28.2 million, or 0.3%. The decrease in cash and cash equivalents was due to the funding of investment securities and loan growth in the first quarter of 2026. All categories of deposits increased during the first quarter of 2026 except for time deposits. The increase in loans was through organic growth. Our loan to deposit ratio was 89% and 88% at March 31, 2026 and December 31, 2025, respectively, while our percentage of non-interest-bearing deposit accounts to total deposits was 24% at both March 31, 2026 and December 31, 2025.
Current wording
Our total assets increased approximately $1.7 billion, or 2.5%, from December 31, 2025, to June 30, 2026, to approximately $68.9 billion. Within total assets, cash and cash equivalents decreased by $822.2 million, or 25.9%, and net loans increased $2.2 billion, or 4.7%, while investment securities increased $205.7 million, or 2.4%, during the period. Within total liabilities, deposits grew $1.2 billion, or 2.2%, and federal funds purchased and securities sold under agreements to repurchase decreased by $48.7 million, or 7.9%. Total corporate and subordinated debentures and other borrowings increased by $300.2 million, or 43.1%. Total shareholder’s equity increased $72.4 million, or 0.8%. The decrease in cash and cash equivalents was due to the funding of investment securities and loan growth in the first half of 2026. The increase in deposits was mainly related to an $871.8 million increase in interest-bearing checking accounts and a $501.2 million increase in time deposits. The increase in loans was driven by organic growth. Our loan to deposit ratio was 90% and 88% at June 30, 2026 and December 31, 2025, respectively, while our percentage of noninterest-bearing deposit accounts to total deposits was 24% at both June 30, 2026, and December 31, 2025.
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 March 31, 2026, investment securities totaled $8.9 billion, compared to $8.7 billion at December 31, 2025, an increase of $193.3 million, or 2.2%. During the three months ended March 31, 2026, we purchased $2.0 billion in available for sale investment securities mostly from reinvesting funds provided by the paydowns, maturities and calls of investment securities. There were no sales of available for sale or held to maturity securities during the quarter. The Company had maturities, redemptions, calls, and paydowns of investment securities totaling $1.7 billion and net amortization of premiums of $2.6 million. At March 31, 2026, approximately 73.3% of the investment portfolio was classified as available for sale, approximately 22.5% was classified as held to maturity and 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 June 30, 2026, investment securities totaled $8.9 billion, compared to $8.7 billion at December 31, 2025, an increase of $205.7 million, or 2.4%. The Bank purchased $2.4 billion of investment securities during the six months ended June 30, 2026 mostly from reinvesting funds provided by the paydowns, maturities and calls of investment securities. The increases in investment securities were partially offset by reductions from maturities, calls, sales and paydowns of investment securities totaling $2.1 billion and the net amortization of premiums of $5.6 million during the six months ended June 30, 2026. At June 30, 2026, approximately 74.0% of the investment portfolio was classified as available for sale, approximately 21.9% was classified as held to maturity and approximately 4.1% was classified as other investments.
Previous wording
At March 31, 2026, the unrealized net loss of the available for sale securities portfolio was $438.8 million, or 6.3%, below its amortized cost basis, compared to an unrealized net loss of $382.8 million, or 5.7%, at December 31, 2025. At March 31, 2026, the unrealized net loss of the held to maturity securities portfolio was $323.1 million, or 16.1%, below its amortized cost basis, compared to an unrealized net loss of $315.2 million, or 15.4%, at December 31, 2025. The increase in the unrealized net loss in the available for sale investment portfolio of $56.0 and the held to maturity portfolio of $7.9 million was due to recent changes in market interest rates and lower expectations of future Federal Reserve Bank rate reductions.
Current wording
At June 30, 2026, the unrealized net losses of the available for sale securities portfolio was $418.3 million, or 6.0%, below its amortized cost basis, compared to an unrealized net loss of $382.8 million, or 5.7%, at December 31, 2025. At June 30, 2026, the unrealized net loss of the held to maturity securities portfolio was $314.7 million, or 16.1%, below its amortized cost basis, compared to an unrealized net loss of $315.2 million, or 15.4%, at December 31, 2025.
Previous wording
At March 31, 2026, we had 1,135 investment securities, including both available for sale and held to maturity in an unrealized loss position, which totaled $779.0 million. 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. The total number of investment securities with an unrealized loss position increased by 62, while the total dollar amount of the unrealized loss increased by$41.8 million The increase in the number of securities in a loss position and level of unrealized losses during the quarter was mainly due to recent changes in market interest rates and lower expectations of future Federal Reserve Bank rate reductions.
Current wording
At June 30, 2026, we had 1,129 inves tment securities including both available for sale and held to maturity, in an unrealized loss position, which totaled $747.0 million. 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. The total number of investment securities with an unrealized loss position increased by 56 securities, while the total dollar amount of the unrealized loss increased by $9.8 million. The increase in the number of securities in a loss position and level of unrealized losses during the quarter was mainly due to recent changes in market interest rates and lower expectations of future Federal Reserve Bank rate reductions.
Previous wording
All investment securities in an unrealized loss position as of March 31, 2026, continue to perform as scheduled. We have evaluated the securities and have determined that the decline in fair value, relative to its amortized cost, is not due to credit-related factors. In addition, we have the ability and intent to hold these securities within the portfolio until maturity or until the value recovers, and we believe that it is more likely than not that we will not be required to sell these securities prior to recovery. We continue to monitor all of our securities with a high degree of scrutiny. There can be no assurance that we will not conclude in future periods that conditions existing at that time indicate some or all of our securities may be sold or would require a charge to earnings as a provision for credit losses in such periods. Any charges as a provision for credit losses related to investment securities could impact cash flow, tangible capital or liquidity. See Note 2 — Summary of Significant Accounting Policies and Note 4 — Securities for further discussion on the application of ASU 2016-13 on the investment securities portfolio.
Current wording
All investment securities in an unrealized loss position as of June 30, 2026, continue to perform as scheduled. We have evaluated the securities and have determined that the decline in fair value, relative to its amortized cost, is not due to credit-related factors. In addition, we have the ability and intent to hold these securities within the portfolio until maturity or until the value recovers, and we believe that it is more likely than not that we will not be required to sell these securities prior to recovery. We continue to monitor all of our securities with a high degree of scrutiny. There can be no assurance that we will not conclude in future periods that conditions existing at that time indicate some or all of our securities may be sold or would require a charge to earnings as a provision for credit losses in such periods. Any charges as a provision for credit losses related to investment securities could impact cash flow, tangible capital or liquidity.
Previous wording
As securities held for investment are purchased, they are designated as held to maturity or available for sale based upon our intent, which incorporates liquidity needs, interest rate expectations, asset/liability management strategies, and capital requirements. Although securities classified as available for sale may be sold from time to time to meet liquidity or other needs, it is not our normal practice to trade this segment of the investment securities portfolio. From time to time, the Bank may execute transactions to reposition the investment portfolio, as we did during the quarter ended March 31, 2025. Such activity has not expanded the broad asset classes used by the Bank. While management generally holds these assets on a long-term basis or until maturity, any short-term investments or securities available for sale could be converted at an earlier point, depending partly on changes in interest rates and alternative investment opportunities.
Current wording
As securities held for investment are purchased, they are designated as held to maturity or available for sale based upon our intent, which incorporates liquidity needs, interest rate expectations, asset/liability management strategies, and capital requirements. Although securities classified as available for sale may be sold from time to time to meet liquidity or other needs, it is not our normal practice to trade this segment of the investment securities portfolio. While management generally holds these assets on a long-term basis or until maturity, any short-term investments or securities available for sale could be converted at an earlier point, depending partly on changes in interest rates and alternative investment opportunities.
Previous wording
Approximately 86.5% (based on amortized cost) of the investment portfolio (excluding other investment securities) 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 13.3% (based on amortized cost) of the investment portfolio (excluding other investment securities) 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 Single A, Double A or Triple A category.
Current wording
Approximately 85.9% (based on amortized cost) of the investment portfolio (excluding other investment securities) 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 13.8% (based on amortized cost) of the investment portfolio (excluding other investment securities) 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 Single A or higher category.
Previous wording
As of March 31, 2026, the portfolio had an effective duration of 4.65 years. We continue to monitor duration risk and seek to align actual duration with the target range.
Current wording
As of June 30, 2026, the portfolio had an effective duration of 4.63 years. We continue to monitor duration risk and seek to align duration within our risk appetite.
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 March 31, 2026, we determined that there was no impairment on our other investment securities. As of March 31, 2026, other investment securities represented approximately $370.9 million, or 0.55% of total assets, and primarily consists of FHLB and FRB stock which totals to approximately $252.5 million, or 0.37% of total assets. There were no gains or losses on the sales of these securities for three months ended March 31, 2026 and 2025, 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 June 30, 2026, we determined that there was no impairment on our other investment securities. As of June 30, 2026, other investment securities represented approximately $367.0 million, or 0.53% of total assets, and primarily consists of FHLB and FRB stock which totals $266.7 million, or 0.39% of total assets. There were no gains or losses on the sales of these securities for three and six months ended June 30, 2026, and 2025, respectively.
Previous wording
We have a trading portfolio associated with our Correspondent Banking 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 and mortgage-backed agency securities, which are held for short periods of time and totaled $117.6 million and $110.2 million at March 31, 2026, and December 31, 2025.
Current wording
We have a trading portfolio associated with our Correspondent Banking 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 and mortgage-backed agency securities, which are held for short periods of time and totaled $191.1 million and $110.2 million at June 30, 2026, and December 31, 2025.
Previous wording
The balance of loans held for sale decreased $17.4 million from December 31, 2025 to $327.9 million at March 31, 2026. Loans held for sale at March 31, 2026, and December 31, 2025 consisted of mortgage and SBA loans held for sale.
Current wording
The balance of loans held for sale increased $60.1 million from December 31, 2025, to $405.4 million on June 30, 2026. Loans held for sale at June 30, 2026 and December 31, 2025 consisted of mortgage and SBA loans held for sale.
Previous wording
The Company purchases 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 $279.8 million at March 31, 2026 compared to $283.9 million at December 31, 2025. See Note 19 — SBA Loans Held for Sale for more information.
Current wording
The Company purchases 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 $336.7 millionat June 30, 2026 compared to $283.9 million at December 31, 2025. See Note 18 – SBA Loans Held for Sale for more information.
Previous wording
Mortgage loans held for sale totaled $48.1 million at March 31, 2026, a decrease from $61.4 million at December 31, 2025. Total mortgage production was $661 million in the first quarter of 2026. This compares to $741 million in the fourth quarter of 2025 and $459 million in the first quarter of 2025. Mortgage production has remained relatively stable in the first quarter of 2026 as mortgage rates declined slightly through most of the quarter. However, mortgage rates increased the last half of March 2026 in reaction to the economic effects of the conflict in the Middle East. The percentage of mortgage production sold into the secondary market remained flat at 28% for the first quarter of 2026 compared to the fourth quarter of 2025 and declined from 56% in the first quarter of 2025. 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 $68.7 million at June 30, 2026, an increase of $7.3 million compared to $61.4 million at December 31, 2025. Total mortgage production was $1.0 billion in the second quarter of 2026 compared to $661 million in the first quarter of 2026. The increase in production from the prior quarter was due to both seasonal timing as there is normally more activity in home sales in the spring and summer along with Company production growth initiatives in 2026 and expanding its revenue producers. The percentage of mortgage production sold into the secondary market increased in the second quarter of 2026 to 33% from 28% in the first quarter of 2026. 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 mortgage loans held for sale), increased by $898.3 million to $49.5 billion at March 31, 2026. Our non-acquired loan portfolio increased by $1.6 billion, or 18.6% annualized, driven by organic growth and the migration of loans from acquired loans as they renew. Commercial non-owner-occupied loans, commercial and industrial loans, commercial owner-occupied real estate loans, consumer owner-occupied loans, construction and land development loans, home equity loans and other income producing loans led the way with $654.5 million, $401.0 million, $174.7 million, $147.4 million, $130.4 million, $37.3 million and $8.2 million in year-to-date loan growth, respectively, or 26.7%, 22.5%, 13.9%, 8.2%, 28.4%, 9.4% and 6.5% annualized growth, respectively. The acquired loan portfolio decreased by $677.1 million. This decline in acquired loans was due to 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 declined were commercial non-owner-occupied loans, commercial and industrial loans, construction and land development loans, commercial owner-occupied real estate loans, consumer owner-occupied loans and other income producing property loans which decreased by $208.5 million, $196.5 million, $85.8 million, $80.2 million, $48.0 million and $39.2 million, respectively, during the quarter. Acquired loans as a percentage of total loans decreased to 27.4% and non-acquired loans as a percentage of the overall portfolio increased to 72.6% at March 31, 2026. This compares to acquired loans as a percentage of total loans of 29.2% and non-acquired loans as a percentage of total loans of 70.8% at December 31, 2025.
Current wording
Total loans, net of deferred loan costs and fees (excluding loans held for sale), increased during the first six months of 2026 by $2.2 billion, or 9.3% annualized, to $50.8 billion at June 30, 2026. Our non-acquired loan portfolio increased by $3.9 billion, or 22.7% 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, construction and land development loans and commercial owner-occupied real estate loans led the way with $1.3 million, $676.9 million, $620.4 million, $605.2 million and $500.7 million in year-to-date loan growth, respectively, or 27.0%, 18.8%, 17.2%, 65.6% and 19.8% annualized growth, respectively. The acquired loan portfolio decreased by $1.6 billion, or 23.1% annualized. This decline in acquired loans was due to 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 decreased were commercial non-owner-occupied loans, commercial and industrial loans, commercial owner-occupied real estate loans, construction and land development loans and consumer owner-occupied loans which decreased by $501.9 million, $479.8 million, $225.3 million, $170.6 million and $113.8 million, respectively, during the first six months of 2026. Acquired loans as a percentage of total loans decreased to 24.7% and non-acquired loans as a percentage of the overall portfolio increased to 75.3% at June 30, 2026. This compares to acquired loans as a percentage of total loans of 29.2% and non-acquired loans as a percentage of total loans of 70.8% at December 31, 2025.
Previous wording
Total commercial non-owner-occupied loans of $17.1 billion, approximately 34.5% of the total loans held for investment, was the largest category of the loan portfolio as of March 31, 2026. As of March 31, 2026, approximately 94% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $17.1 billion, approximately $1.8 billion, or 4% of the total loans, represented our office segment. Approximately 95% of the office segment was located in the Company’s footprint.
Current wording
Total commercial non-owner-occupied loans of $17.5 billion, approximately 34.4% of the total loans held for investment, was the largest category of the loan portfolio as of June 30, 2026. As of June 30, 2026, approximately 93% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $17.5 billion, approximately $1.8 billion, or 4% of the total loans, represented our office segment. Approximately 95% of the office segment was located in the Company’s footprint.
Previous wording
The ACL reflects management’s estimate of losses that will result from the inability of our borrowers to make required loan payments. The Company records loans charged off against the ACL and subsequent recoveries, if any, increase the ACL when they are recognized. Please see Note 1 — Summary of Significant Accounting Policies, under the “ACL – Loans” section, of our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 2 — Significant Accounting Policies in this Quarterly Report on Form 10-Q for further detailed descriptions of our estimation process and methodology related to the ACL on loans.
Current wording
The ACL reflects management’s estimate of losses that will result from the inability of our borrowers to make required loan payments. The Company records loans charged off against the ACL and subsequent recoveries, if any, increase the ACL when they are recognized. In addition, the Company has a variety of assets that have a component that qualifies as an off-balance sheet exposure. These primarily include undrawn portions of revolving lines of credit and standby letters of credit.
Previous wording
As of March 31, 2026, the balance of the ACL was $585.9 million or 1.18% of total loans. The ACL increased $0.7 million from the balance of $585.2 million recorded at December 31, 2025. The net increase during the first quarter of 2026 included an $11.2 million provision for credit loss and $10.5 million in net charge-offs. During the three months ended March 31, 2026, the Company recorded a provision for credit losses based on loan growth and current forecasts applied to our modeling to adequately capture growing economic recessionary risks.
Current wording
As of June 30, 2026, the balance of the ACL was $586.7 million or 1.15% of total loans. The ACL increased $0.8 million from the balance of $585.9 million recorded at March 31, 2026 and increased $1.5 million from the balance of $585.2 million recorded at December 31, 2025. The increase during the second quarter of 2026 included $8.6 million in provision for credit losses and $7.8 million in net charge-offs. The increase during the six months ended June 30, 2026 included $19.8 million in provision for credit losses and $18.4 million in net charge-offs.
Previous wording
At March 31, 2026, the Company had a reserve for unfunded commitments of $69.2 million, which was recorded as a liability on the Consolidated Balance Sheet, compared to $69.6 million at December 31, 2025. The decrease of $0.4 million was recorded in Provision for Credit Losses on the Consolidated Statements of Income. The Company did not have an allowance for credit losses or record a provision for credit losses on investment securities or other financial assets during the first three months of 2026.
Current wording
The Company did not have an allowance for credit losses or record a provision for credit losses on investment securities or other financial asset during the six months ended June 30, 2026.
Previous wording
The ACL provides 1.94 times coverage of nonperforming loans at March 31, 2026. Net charge-offs to the total average loans during the three months ended March 31, 2026 were 0.09%. We continued to experience solid and stable asset quality numbers and ratios as of March 31, 2026.
Current wording
The ACL provides 2.14 times coverage of nonperforming loans at June 30, 2026. Net charge-offs to total average loans during the three and six months ended June 30, 2026, were 0.06% and 0.07%, respectively. Net charge-offs, excluding acquisition date charge-offs recorded for PCD loans acquired from Independent, to total average loans during thethree and six months ended June 30, 2025, were 0.06% and 0.05%, respectively. We continue to experience solid and stable asset quality numbers and ratios as of June 30, 2026.
Previous wording
The following table provides the allocation of expected credit losses by loan segment and each loan segment as a percentage of the total loan portfolio as of March 31, 2026:
Current wording
The following table provides the allocation for expected credit losses by loan segment and each loan segment as a percentage of total loans as of June 30, 2026:
Previous wording
The following table presents a summary of net charge-off ratios (annualized) by loan segment, for the quarters ended March 31, 2026 and 2025:
Current wording
The following table presents a summary of net charge off ratios (annualized) by loan segment, for the three and six months ended June 30, 2026, and 2025:
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Previous report — wording carried elsewhere
The Company has a variety of assets that have a component that qualifies as an off-balance sheet exposure. These primarily include undrawn portions of revolving lines of credit and standby letters of credit. Please see MD&A, under the “Financial Condition”, “Allowance for Credit Losses (“ACL”)” section, of our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 2 — Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q for further detailed descriptions of our estimation process and methodology related to the ACL on certain off-balance-sheet credit exposures.
Previous report — wording carried elsewhere
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 $55.9 billion in total deposits at March 31, 2026, approximately 70% were insured or collateralized. The Bank has a granular deposit base comprised ofover 1.4 million accounts, with an average deposit size of $39,000. Approximately 24% of total deposits are noninterest-bearing.