SouthState Bank Corp

Notes to Consolidated Financial Statements (unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, otherwise referred to as GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

The consolidated balance sheet at December 31, 2025, has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by GAAP for complete financial statements.

Note 2 — Summary of Significant Accounting Policies

The information contained in the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), as filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2026, should be referenced when reading these unaudited consolidated financial statements. Unless otherwise mentioned or unless the context requires otherwise, references herein to “SouthState,” the “Company,” “we,” “us,” “our” or similar references mean SouthState Bank Corporation and its consolidated subsidiaries. References to the “Bank” or “SouthState Bank” means SouthState Bank Corporation’s wholly owned subsidiary, SouthState Bank, National Association, a national banking association.

The significant accounting policies of the Company are described in Note 1 to the Consolidated Financial Statements in the 2025 Form 10-K. There have been no material changes to those policies during thenine months ended September 30, 2026.

Note 3 — Recent Accounting and Regulatory Pronouncements

Accounting Standards Adopted

There were no accounting standards adopted during the nine months ended September 30, 2026 that had a material effect on our consolidated financial statements.

Issued But Not Yet Adopted Accounting Standards

Subsequent to the filing of the Company’s 2025 Form 10-K, no accounting standards were issued that are expected to have a material effect on the Company’s consolidated financial statements.

Note 4 — Investment Securities

The following is the amortized cost and fair value of investment securities held to maturity:

The following is the amortized cost and fair value of investment securities available for sale:

The following is the amortized cost and carrying value of other investment securities:

The Company’s other investment securities consist of non-marketable equity and other securities that have no readily determinable market value. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of September 30, 2026, the Company has determined that there wasno impairment on its other investment securities.

The amortized cost and fair value of debt securities at September 30, 2026, by contractual maturity are detailed below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

During the three and nine months ended September 30, 2026, there wereno sales of securities available for sale. During the three months ended September 30, 2025, there wereno sales of securities available for sale. During the first quarter of 2025, the Company sold a portion of the available for sale investment securities acquired from Independent and recognizedno gain or loss on these investment securities as each security was marked to fair value at the acquisition date. During the first quarter of 2025, in addition to the sale of the investment securities acquired from Independent, the Company executed an investment portfolio restructuring and sold $1.8 billion of available for sale investment securities from its existing investment securities portfolio.

The following table provides additional details of the available for sale investment securities sold during thenine months ended September 30, 2025:

There wereno sales of held to maturity securities during thethree and nine months ended September 30, 2026 or September 30, 2025.

The Company had 1,273 securities with gross unrealized losses at September 30, 2026. Information pertaining to our securities with gross unrealized losses at September 30, 2026, and December 31, 2025, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is as follows:

The Company’s valuation methodology for securities impairment is disclosed in Note 1 — Summary of Significant Accounting Policies, under the “Investment Securities” section, of the 2025 Form 10-K. All debt securities in an unrealized loss position as of September 30, 2026, continue to perform as scheduled and management does not believe there is a provision for credit losses is necessary. Management does not currently intend to sell the securities within the portfolio, and it is not more-likely-than-not that the Company will be required to sell the debt securities.

The Company follows its nonaccrual policy by reversing interest income in the income statement when the Company determines the interest for held to maturity securities is uncollectible. Therefore, management excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on the investment securities and does not record an allowance for credit losses on accrued interest receivable. As of September 30, 2026, and December 31, 2025, the accrued interest receivables for all investment securities recorded in Other Assets were$45.8 million and$38.9 million, respectively.

At September 30, 2026, investment securities with a market value of $4.8 billion and a carrying value of $5.2 billion were pledged to secure public funds deposits and for other purposes required and permitted by law (excluding securities pledged to secure repurchase agreement disclosed in Note 19 — Short-Term Borrowings, under the “Securities Sold Under Agreements to Repurchase (“Repurchase agreements”)” section). Of the $5.2 billion carrying value of investment securities pledged, $5.1 billion were pledged to secure public funds deposits, $22.4 million were pledged to secure FHLB advances, and $73.8 million were pledged to secure interest rate swap positions with correspondent banks. At December 31, 2025, investment securities with a market value of $5.2 billion and a carrying value of $5.5 billion were pledged to secure public funds deposits and for other purposes required and permitted by law. Of the $5.5 billion carrying value of investment securities pledged,$5.2 billion were pledged to secure public funds deposits, $182.2 million were pledged to secure FHLB advances and $83.3 million were pledged to secure interest rate swap positions with correspondent banks.

Trading Securities

At September 30, 2026 and December 31, 2025, trading securities, at estimated fair value, were as follows:

Net (losses) gains on trading securities for thethree and nine months ended September 30, 2026, and 2025, were as follows:

Note 5 — Loans

The following is asummary of total loans:

(1)

Construction and land development includes loans for both commercial construction and development, as well as loans for 1-4 family residential construction and lot loans.

(2)

Consumer owner-occupied real estate includes loans on both 1-4 family owner-occupied property, as well as loans collateralized by 1-4 family owner-occupied properties with a business intent.

The above table reflects the loan portfolio at the amortized cost basis for the periods September 30, 2026, and December 31, 2025, to include net deferred costs of $104.1 million and $97.0 million, respectively, and unamortized discount related to loans acquiredof $159.3 million and $259.5 million, respectively. Accrued interest receivables of $198.7 million and $186.5 million, respectively, are accounted for separately and reported inother assets for the periods September 30, 2026, and December 31, 2025.

For a description of the Company’s loan risk grading system, including the definitions of Pass, Special Mention, Substandard, and Doubtful, refer to Note 4 to the Consolidated Financial Statements in the 2025 Form 10‑K.

The following table presents the credit risk profile by risk grade of commercial loans by origination year as of and for the period ending September 30, 2026:

The following table presents the credit risk profile by risk grade of commercial loans by origination year as of and for the period ending December 31, 2025:

For the consumer segment, delinquency of a loan is determined by past due status. Consumer loans are automatically placed on nonaccrual status once the loan is 90 days past due. Construction and land development loans are on 1-4 family residential properties and lots.

The following table presents the credit risk profile by past due status of consumer loans by origination year as of and for the period ending September 30, 2026:

The following table presents the credit risk profile by past due status of total loans by origination year as of and for the period ending September 30, 2026:

The following table presents the credit risk profile by past due status of consumer loans by origination year as of and for the period ending December 31, 2025:

The following table presents the credit risk profile by past due status of total loans by origination year as of and for the period ending December 31, 2025:

The following table presents an aging analysis of past due accruing loans, segregated by class, as of September 30, 2026 and December 31, 2025:

The following table is a summary of information pertaining to nonaccrual loans by class, including loans modified for borrowers with financial difficulty as of September 30, 2026, and December 31, 2025:

(1)

Greater than 90 days accruing and non-accrual with no allowance loans at September 30, 2026.

There is no interest income recognized during the period on nonaccrual loans. The Company follows its nonaccrual policy by reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. Loans on nonaccrual status in which there is no allowance assigned are individually evaluated loans that do not carry a specific reserve. See Note 1 — Summary of Significant Accounting Policies of the 2025 Form 10-K for further detailed descriptions on individually evaluated loans.

The following is a summary of collateral dependent loans, by type of collateral, and the extent to which they are collateralized during the period:

The Bank designates individually evaluated loans on non-accrual with a net book balance exceeding the designated threshold as collateral dependent loans. Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the ACL. The Bank has adopted the collateral maintenance practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for selling costs, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The Bank’s threshold for individually evaluated loans is $1.0 million. The changes above in collateral percentage are generally due to appraisal value updates or changes in the number of loans within the asset class and collateral type. Overall collateral dependent loans decreased$21.1 million during the nine months ended September 30, 2026.

Loans on nonaccrual status at the date of modification are initially classified as nonaccrual. Loans on accruing status at the date of modification are initially classified as accruing if the note is reasonably assured of repayment and performance is expected in accordance with its modified terms. Such loans may be designated as nonaccrual loans subsequent to the modification date if reasonable doubt exists as to the collection of interest or principal under the modification agreement. Nonaccrual loans are returned to accruing status when there is economic substance to the modification, there is documented credit evaluation of the borrower’s financial condition, the remaining balance is reasonably assured of repayment in accordance with its modified terms, and the borrower has demonstrated sustained repayment performance in accordance with the modified terms for a reasonable period of time (generally a minimum ofsix months). See Note 1 — Summary of Significant Accounting Policies of the 2025 Form 10-K for how such modifications are factored into the determination of the ACL for the periods presented above.

The following tables present loans designated as modifications made to borrowers experiencing financial difficulty during thethree and nine months ended September 30, 2026, and 2025, respectively. The loans are segregated by type of modification and asset class, indicating the financial effect of the modifications. There wereno interest rate reduction modifications for thethree months ended September 30, 2026 and 2025. There wereno combination interest rate reduction and payment delay modifications for thethree and nine months ended September 30, 2026. There wereno combination term extension and payment delay modifications modifications for the three months ended September 30, 2026 and 2025.

The Bank on occasion will enter into modification agreements which extend the maturity payoff on a loan or reduce the interest rate for borrowers willing to continue to pay, to minimize losses for the Bank. At September 30, 2026, the Company had $7.1 million in remaining commitments to lend additional funds on loans to borrowers experiencing financial difficulty and modified during the current reporting period.

The following table presents the changes in status of loans modified within the previous twelve months to borrowers experiencing financial difficulty, as of September 30, 2026 and 2025, by type of modification. The subsequent defaults were all due to past due status greater than 60 days.

The following table depicts the performance of loans modified within the previous twelve months to borrowers experiencing financial difficulty, as of September 30, 2026 and 2025:

Note 6 — Allowance for Credit Losses(ACL)

The following tables present a disaggregated analysis of activity in the allowance for credit losses for thethree and nine months ended September 30, 2026 and 2025:

(1)

The Day 1 loan charge-offs for Independent loans were recorded to conform with the Company’s charge-off policies and practices.

(2)

A provision for credit losses for unfunded commitments of $5.8 million inthe third quarter of 2026, compared to a provision for credit losses of $3.8 million recorded during thethird quarter of 2025 for the allowance for credit losses for unfunded commitments that is not included in the above table.

(1)

The Day 1 loan charge-offs for Independent, inclusive of measurement period adjustments, recorded to conform with the Company’s charge-off policies and practices.

(2)

A provision for credit losses of $12.7 million was recorded during the first nine months of 2026. This compares to a provision for credit losses of $23.2 million during the first nine months of 2025, including $12.1 million for the initial provision for credit losses recorded for unfunded commitments acquired from Independent during the first quarter of 2025, that is not included in the above table.

Note 7 — Leases

As of September 30, 2026, and December 31, 2025, we had operating right-of-use (“ROU”) assets of$501.8 million and$507.1 million, respectively, and operating lease liabilities of$526.7 million and$525.3 million, respectively. We maintain operating leases on land and buildings for some of our operating centers, branch facilities and ATM locations. Most leases include one or more options to renew, with renewal terms extending up to 20 years. The exercise of renewal options is based on the sole judgment of management and what we consider to be reasonably certain given the environment today. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to us if the option is not exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.

Terms and conditions are similar to those real estate operating leases described above. Lease classifications from the acquired institutions were retained. At September 30, 2026, we did not maintain any leases with related parties and determined that the number and dollar amount of our equipment leases was immaterial. As of September 30, 2026, we hadtwo operating leases that hadnot yet commenced for approximately$1.9 million.

Equipment Lessor

SouthState has an Equipment Finance Group which does business directly with customers and primarily focuses on serving the construction and utility segments. The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at September 30, 2026, and December 31, 2025:

The following table summarizes direct financing lease income recorded for the three and nine months ended September 30, 2026, and remaining lease payment receivable for each of the next five years:

See Note 1 — Summary of Significant Accounting Policies, under the “Leases” section, of the 2025 Form 10-K, on accounting for leases.

Note 8 — Deposits

Our total deposits as of September 30, 2026, and December 31, 2025, are comprised of the following:

At September 30, 2026, and December 31, 2025, we had$2.1 billion in certificates of deposits greater than $250,000.

Note 9 — Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted-average shares of common stock outstanding during each period, excluding non-vested restricted shares. Our diluted earnings per share is based on the weighted-average shares of common stock outstanding during each period plus the maximum dilutive effect of common stock issuable upon exercise of stock options or vesting of restricted stock units. Stock options and unvested restricted stock units are considered common stock equivalents and are only included in the calculation of diluted earnings per common share when their effect is dilutive.

The following table sets forth the computation of basic and diluted earnings per common share for thethree and nine months ended September 30, 2026 and 2025:

Note 10 — Share-Based Compensation

For a description of the Company’s share‑based compensation plans, including equity plan structure and Restricted Stock Units (“RSUs”) program mechanics, refer to Note 17 to the Consolidated Financial Statements in the 2025 Form 10‑K.

Stock Options

Activity in the Company’s stock option plans is summarized in the following table:

Restricted Stock Units (“RSUs”)

Outstanding RSUs for thenine months ended September 30, 2026, are summarized in the following table:

If maximum performance is achieved pursuant to the 2024, 2025 and 2026 Long Term Incentive performance-based RSU grants, an additional 133,514 shares in total may be issued by the Company at the end of thethree-year performance periods.

As of September 30, 2026, there was $40.8 million of total unrecognized compensation cost at target related to nonvested RSUs granted under the plan. This cost is expected to be recognized over a weighted-average period of 1.25 years as of September 30, 2026. The total fair value of RSUs vested and released during the nine months ended September 30, 2026, was$41.8 million.

Note 11 — Commitments and Contingent Liabilities

In the normal course of business, we make various commitments and incur certain contingent liabilities, which are not reflected in the accompanying financial statements. The commitments and contingent liabilities include guarantees, commitments to extend credit, and standby letters of credit. At September 30, 2026, commitments to extend credit and standby letters of credit totaled$15.2 billion. As of September 30, 2026, the liability recorded for expected credit losses on unfunded commitments, excluding unconditionally cancellable exposures and letters of credit, was$82.3 million and recorded on the Balance Sheet. See Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements in the 2025 Form 10-K for discussion of liability recorded for expected credit losses on unfunded commitments.

For a description of the Company’s commitments and contingencies, including litigation risks arising from our normal business activities and whole bank acquisitions, as well as background related to the previously disclosed cyber incident, refer to Note 20 to the Consolidated Financial Statements in the 2025 Form 10-K. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, as of September 30, 2026, any such liability is not expected to have a material effect on our consolidated financial statements.

Cyber Incident Litigation. On April 3, 2024, a putative class action lawsuit was filed against the Bank in the U.S. District Court for the Middle District of Florida, Tampa Division (the “Original Suit”). The plaintiff, who purported to represent the class of individuals harmed by alleged actions and/or omissions by the Bank in connection with the cybersecurity incident that was detected on February 6, 2024 (the “Cyber Incident”, as previously reported in the Form 8-K filed with the SEC on February 9, 2024), asserted a variety of common law and statutory claims seeking monetary damages, injunctive relief and other related relief related to the potential unauthorized access by third parties to personal identifiable information. While the Original Suit was voluntarily dismissed, the same plaintiffs as well as additional plaintiffs initiated litigation that named the Bank as a defendant. These cases were consolidated into one putative class action against the Bank in the Circuit Court for Polk County, Florida (the “Cyber Incident Suit”).

During the first quarter of 2026, the parties agreed to settle the Cyber Incident Suit, subject to court approval, pursuant to which the Company agreed to fund documented losses and pay attorneys’ fees, administration costs, and credit monitoring fees. On June 24, 2026, the court entered an order granting final approval to the settlement (the “Final Order”). The settlement was paid from the Company’s cyber insurance coverage in the third quarter of 2026 in accordance with the Final Order, and the matter has been dismissed.

Other commitments and contingencies were not materially different from those disclosed in the 2025 Form 10-K.

Note 12 — Fair Value

GAAP defines fair value and establishes a framework for measuring and disclosing fair value. Fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. For a detailed description of the Company’s fair value measurement framework, including valuation methodologies and the classification of financial instruments within the fair value hierarchy, refer to Note 23 to the Consolidated Financial Statements in the 2025 Form 10‑K.

The tables below present the Company’s fair value measurements as of September 30, 2026 and December 31, 2025. There wereno transfers into or out of Level 3 during the periods presented.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis:

Fair Value Option

The Company has elected the fair value option for mortgage loans held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. The Company also has opted for the fair value option for the SBA servicing asset, as it is the industry-preferred method for valuing such assets.

The following table summarizes the difference between the fair value and the unpaid principal balance of mortgage loans held for sale and the changes in fair value of these loans:

Changes in Level 1, 2 and 3 Fair Value Measurements

There wereno changes in hierarchy classifications of Level 3 assets or liabilities for thenine months ended September 30, 2026. A reconciliation of the beginning and ending balances of the MSRs recorded at fair value on a recurring basis for thenine months ended September 30, 2026, is as follows. The changes in fair value of the MSRs are recorded in Mortgage Banking Income on the Consolidated Statements of Income.

A reconciliation of the beginning and ending balances of the SBA servicing asset, a Level 3 asset recorded at fair value on a recurring basis for the period ending September 30, 2026, is as follows. The changes in fair value of the SBA servicing asset are recorded in in SBA Income on the Consolidated Statements of Income.

There wereno unrealized losses included in accumulated other comprehensive income related to Level 3 financial assets and liabilities at September 30, 2026.

See Note 17 — Mortgage Loan Servicing, Origination, and Mortgage Loans Held for Sale for information about recurring Level 3 fair value measurements of mortgage servicing rights.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The tables below present the recorded amount of assets and liabilities measured at fair value on a nonrecurring basis:

For an individually evaluated loan, the fair value of collateral is measured based on appraisal or third-party valuation when the loan is placed on nonaccrual. For OREO and bank properties held for sale, the fair value is initially recorded based on external appraisals at the time of transfer. These assets recorded at fair value on a nonrecurring basis are updated on at least an annual basis.

Quantitative Information about Level 3 Fair Value Measurement

Fair Value of Financial Instruments

The estimated fair value, and related carrying amount, of our financial instruments are as follows:

Note 13 — Accumulated Other Comprehensive Income (Loss)

The changes in each component of accumulated other comprehensive income (losses), net of tax, for thethree and nine months ended September 30, 2026 and 2025, were as follows:

The table below presents the reclassifications out of accumulated other comprehensive income (loss), net of tax:

Note 14 — Derivative Financial Instruments

The Company uses certain derivative instruments to meet the needs of customers as well as to manage the interest rate risk associated with certain transactions. Additional information regarding our Company’s derivative strategy and related programs are described in Note 26 to the Consolidated Financial Statements included in the 2025 Form 10-K.

The following table summarizes the derivative financial instruments used by the Company as of September 30, 2026, and December 31, 2025:

(1)

The fair value of the interest rate swap derivative assets was reduced by $868.1 million and $333.7 million at September 30, 2026 and December 31, 2025, respectively, in variation margin payments applicable to swaps centrally cleared through LCH and CME.

The following table summarizes the derivative assets and derivative liabilities related to the counterparties on our interest rate swaps subject to master netting agreements where the Company has elected to net the fair values. The Company has elected to not offset cash collateral against the netted derivative assets and liabilities subject to master netting agreements.

• As of September 30, 2026, and December 31, 2025, counterparties provided $46.6 million and $25.9 million, respectively, of cash collateral to the Company to secure swap asset positions that were not centrally cleared, which is included in Interest-bearing Deposits within Total Liabilities on the Consolidated Balance Sheets. Counterparties also pledged $24.3 million and $28.1 million, respectively, as of September 30, 2026, and December 31, 2025 in investment securities to secure swap asset positions that were not centrally cleared. The Company provided $2.4 million and $1.7 million, respectively, to counterparties to secure swap positions that were not centrally cleared as of September 30, 2026, and December 31, 2025.

Balance Sheet Fair Value Hedge

As of September 30, 2026, and December 31, 2025, the Company maintained loan swaps, with an aggregate notional amount of$2.6 million accounted for as fair value hedges. The amortized cost basis of the loans being hedged were $2.6 million as of September 30, 2026, and December 31, 2025.

Non-designated Hedges of Interest Rate Risk

Customer Swap

The Company offers interest rate swaps to certain customers to enable them to convert variable-rate loan payments to fixed-rate and simultaneously enters into an offsetting swap with a third-party counterparty. As these interest rate swaps do not meet hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. As of September 30, 2026, and December 31, 2025, the interest rate swaps had an aggregate notional amount of approximately$31.7 billion and$29.6 billion, respectively. At September 30, 2026, the fair value of the interest rate swap derivatives is recorded in Other Assets at$117.9 million and in Other Liabilities at$982.5 million. The fair value of derivative assets at September 30, 2026, was reduced by $868.1 million in variation margin payments applicable to swaps centrally cleared through LCH and CME. At December 31, 2025, the fair value of the interest rate swap derivatives was recorded in Other Assets at$221.7 million and Other Liabilities at$554.4 million. The fair value of derivative assets at December 31, 2025, was reduced by $333.7 million in variation margin payments applicable to swaps centrally cleared through LCH and CME. All changes in fair value are recorded through earnings within Correspondent and Capital Markets Income, a component of Noninterest Income on the Consolidated Statements of Income. There were net gains of $1.2 million and $2.4 million recorded on these derivatives for thethree and nine months ended September 30, 2026, respectively. There was a net gain of $81,000 and a net loss of $150,000 recorded on these derivatives for thethree and nine months ended September 30, 2025, respectively. As of September 30, 2026, we provided$329.0 million of cash collateral on the customer swaps, which is included in Cash and Cash Equivalents on the Consolidated Balance Sheets as Deposits in Other Financial Institutions (Restricted Cash). We also provided $64.3 million in investment securities at market value as collateral on the customer swaps which is included in Investment Securities – available for sale on the Consolidated Balance Sheets. Counterparties provided$46.6 million of cash collateral to the Company to secure swap asset positions that were not centrally cleared, which is included in Interest-bearing Deposits within Total Liabilities on the Consolidated Balance Sheets.

Balance Sheet Economic Hedge

As of September 30, 2026 and December 31, 2025, the Company maintained an aggregate notional amount of $4.4 billion and $2.5 billion, respectively, in short-term interest rate hedges that were accounted for as economic hedges. These derivatives protect the Company from interest rate risk caused by changes in the term and daily SOFR accrual mismatches. The fair value of these hedges is recorded in either Other Assets or in Other Liabilities depending on the position of the hedge with the offset recorded in Correspondent Banking and Capital Market Income, a component of Noninterest Income on the Consolidated Statements of Income. There were no material net income impacts for these derivatives for three andnine months ended September 30, 2026 or 2025.

Mortgage Banking

The Company uses certain derivatives in connection with its mortgage banking activities, primarily to manage exposure related to mortgage servicing rights and the mortgage loan pipeline. The Company does not designate these instruments as accounting hedges.

Mortgage Servicing Rights (“MSRs”)

On September 30, 2026, we had derivative financial instruments outstanding with notional amounts totaling$224.0 million related to MSRs, compared to$192.0 million on December 31, 2025. The estimated net fair value of the open contracts related to the MSRs was a loss of$5.2 million at September 30, 2026, compared to a gain of$69,000 at December 31, 2025.

Mortgage Pipeline

The following table presents our notional value of forward sale commitments and the fair value of those obligations along with the fair value of the mortgage pipeline related to the held for sale portfolio:

Note 15 — Capital Ratios

The following table presents actual and required capital ratios as of September 30, 2026, and December 31, 2025 for the Company and the Bank under the current capital rules.

As of September 30, 2026, and December 31, 2025, the capital ratios of the Company and the Bank were in excess of the minimum regulatory requirements and exceeded the thresholds for the “well capitalized” regulatory classification. For a description of the Company’s regulatory capital framework, refer to Note 24 and Item 1, “Business,” in the 2025 Form 10-K.

Note 16 — Goodwill and Other Intangible Assets

The carrying amount of goodwill was$3.1 billion, at September 30, 2026, and December 31, 2025. The Company’s other intangible assets, consisting of core deposit intangibles and client list intangibles are included on the face of the balance sheet.

The Company last completed its annual valuation of the carrying value of its goodwill as of October 31, 2025 and determined it was more likely than not there wasno impairment of the Company’s goodwill. Management continues to monitor the impact of market conditions on the Company’s business, operating results, cash flows and/or financial condition.

The following is a summary of gross carrying amounts and accumulated amortization of other intangible assets:

Amortization expense totaled$20.6 million and $63.0 million, for the three and nine months ended September 30, 2026, respectively, compared to$23.4 million and $71.3 million for the three and nine months ended September 30, 2025, respectively. Other intangibles, except for SBA servicing assets which are carried at fair value, are amortized using either the straight-line method or an accelerated basis over their estimated useful lives, with lives generally betweentwo and 15 years. The SBA servicing assets are carried at fair value and along with goodwill, are not amortized.

Estimated amortization expense for other intangibles for each of the next five quarters is as follows:

Note 17 — Mortgage Loan Servicing, Origination, and Mortgage Loans Held for Sale

The portfolio of residential mortgages serviced for others, which is not included in the accompanying Consolidated Balance Sheets, was$6.5 billion and $6.6 billion, respectively, as of September 30, 2026, and December 31, 2025. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts and disbursing payments to investors. The amounts of contractually specified servicing fees we earned during the three and nine months ended September 30, 2026, and September 30, 2025, were$4.1 million, $12.4 million, $4.2 million, $12.7 million, respectively. Servicing fees are recorded in Mortgage Banking Income in our Consolidated Statements of Income.

At September 30, 2026, and December 31, 2025, MSRs were$102.0 million and$84.0 million on our Consolidated Balance Sheets, respectively. MSRs are recorded at fair value with changes in fair value recorded as a component of Mortgage Banking Income in the Consolidated Statements of Income. The market value adjustments related to MSRs recorded in Mortgage Banking Income for thethree and nine months ended September 30, 2026, and September 30, 2025, were gains of $11.2 million and losses of $20.6 million compared with losses of $412,000 and $5.2 million, respectively. The Company has used various free standing derivative instruments to mitigate the income statement effect of changes in fair value resulting from changes in market values, in addition to changes in valuation inputs and assumptions related to MSRs.

See Note 12 — Fair Value for the changes in fair value of MSRs. The following table presents the changes in the fair value of the MSR and offsetting hedge.

The characteristics and sensitivity analysis of the MSRs are included in the following table:

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the residential MSRs is calculated without changing any other assumption, while in reality changes in one factor may result in changes in another, which may either magnify or counteract the effect of the change. The derivative instruments utilized by the Company would serve to reduce the estimated impacts to fair value included in the table above.

Mortgage loan sales were$249.4 million and $664.7 million for the three and nine months ended September 30, 2026, respectively, compared to$207.7 million and $751.7 million for the three and nine months ended September 30, 2025, respectively. Of the total mortgage loans sold for the three and nine months ended September 30, 2026, the Bank sold$153.4 million and $425.3 million, or 61.5% and 64.0%, respectively, with the servicing rights retained by the Bank, compared to$149.8 million and $490.0 million, or 72.1% and 65.2%, respectively, of the total mortgage loans sold for the three and nine months ended September 30, 2025.

The Bank retains no beneficial interests in these sales but may retain the servicing rights for the loans sold. The risks related to the sold loans with the retained servicing rights due to a representation or warranty violation such as noncompliance with eligibility or servicing requirements, or customer fraud, that should have been identified in a loan file review are disclosed in Note 1 — Summary of Significant Accounting Policies, under the “Loans Held for Sale” section, of the Company’s 2025 Form 10-K.

Mortgage loans held for sale have historically been comprised of residential mortgage loans awaiting sale in the secondary market, which generally settle in 15 to 45 days. Mortgage loans held for sale were$49.3 million and$61.4 million at September 30, 2026, and December 31, 2025, respectively. Please see Note 12 — Fair Value, under the “Fair Value Option”, section in this Quarterly Report on Form 10-Q for summary of the fair value and the unpaid principal balance of loans held for sale and the changes in fair value of these loans.

Note 18 — Small Business Administration (“SBA”) Loans Held for Sale

The Company purchases the guaranteed portions of SBA loans from third-party originators. The guaranteed portions of SBA loans purchased by the Company are aggregated into pools with similar characteristics to create a security representing an interest in those pools through the SBA’s fiscal transfer agent (“FTA”). The individual guaranteed portions of the SBA loans may also be sold prior to pooling into a security. The guaranteed portion of the SBA loans are pooled and securities representing interests in that pool are issued, the Company sells the pooled securities into the secondary market.

At September 30, 2026 and 2025, the Company held approximately $247.5 million and $278.3 million, respectively, of the guaranteed portion of SBA loans for sale. The following table details additional SBA activity for the periods presented.

The Company also separately originates SBA loans and sells the guaranteed portions of these loans into the secondary market. The following table details the guaranteed portion of SBA loans for the periods presented.

Note 19 — Short-Term Borrowings

Securities Sold Under Agreements to Repurchase (“Repurchase agreements”)

Repurchase agreements represent funds received from customers, generally on an overnight or continuous basis, which are collateralized by investment securities owned or, at times, borrowed and re-hypothecated by the Company. At September 30, 2026, and December 31, 2025, our repurchase agreements totaled$217.2 million and$311.4 million, respectively. These borrowings were collateralized with government, government-sponsored enterprise, or state and political subdivision-issued securities with a market value of$268.5 million and$331.5 million at September 30, 2026, and December 31, 2025, respectively. Declines in the value of the collateral would require us to increase the amounts of securities pledged.

Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) Borrowing

The Company has, from time to time, entered into borrowing agreements with the FHLB and FRB. Borrowings under these agreements are collateralized by stock in the FHLB, qualifying first and second mortgage residential loans, investment securities, and commercial real estate loans under a blanket-floating lien.

As of September 30, 2026, the Company had outstanding FHLB borrowings of $300.0 million andno FHLB borrowings as of December 31, 2025. Net eligible loans of the Company pledged via a blanket lien to the FHLB for advances and letters of credit at September 30, 2026, were approximately $9.5 billion (collateral value of $6.0 billion) and investment securities and cash pledged were approximately $27.1 million (collateral value of $18.4 million). This allows the Company a total borrowing capacity at the FHLB of approximately $6.0 billion. After accounting for the secured collateral required totaling $18.3 million and $300.0 million in outstanding FHLB advances, the Company had unused net credit available with the FHLB in the amount of approximately $5.7 billion at September 30, 2026. The Company also has a total borrowing capacity at the FRB of $11.9 billion at September 30, 2026, secured by a blanket lien on $16.0 billion (collateral value of $11.9 billion) in net eligible loans of the Company. The Company hadno outstanding borrowings with the FRB at September 30, 2026, or December 31, 2025.

Note 20 — Stock Repurchase Program

On January 21, 2026, the Board of Directors of the Company approved a stock repurchase plan for the repurchase of up to 5,560,000 shares of the Company’s common stock (the “2026 Repurchase Plan”). The 2026 Repurchase Plan replaces the Company’s 2025 stock repurchase program (the "2025 Repurchase Plan"), under which 560,000 shares remained available for repurchase. The 2025 Repurchase Plan was cancelled in connection with the Board’s approval of the 2026 Repurchase Plan. During thenine months ended September 30, 2026, the Company repurchased atotal of 2,750,000 shares at a weighted average price of $100.02 per share (including commission paid) pursuant to the 2026 Repurchase Plan. Based on the shares repurchased through the 2026 Repurchase Plan during 2026, the Company accrued an estimated excise tax of approximately $2.4 million at September 30, 2026 to be paid in 2027. This excise tax of 1% on the fair market value of corporate stock repurchased was enacted under the Inflation Reduction Act of 2022 for stock repurchases and is recorded against surplus in shareholders’ equity when accrued. During thenine months ended September 30, 2025, the Company repurchased 440,000 shares at a weighted average price of $97.29 per share pursuant to the 2025 Repurchase Plan.

The Company repurchased 94,500 and 113,025 shares at a cost of $9.6 million and$11.5 million, respectively, during thenine months ended September 30, 2026, and 2025 under other arrangements whereby directors or officers surrender shares to the Company to cover the option cost for stock option exercises or tax liabilities resulting from the vesting of restricted stock awards or restricted stock units.

Note 21 — Segment Reporting

The table below provides net income and net interest margin information about the General Banking Unit. The most significant expenses to the General Banking Unit are deposit and other borrowing interest expense as well as employee compensation. For a description of the Company’sreportable segments and related framework, refer to Note 29 to the Consolidated Financial Statements in the Company’s 2025 Form 10‑K.

Note 22 — Subsequent Events

Stock Repurchases

Subsequent to September 30, 2026, the Company repurchased 81,654 shares of the Company’s common stock pursuant to the 2026 Repurchase Plan at a weighted average price of $104.72 per share. As of October 29, 2026, the Company may repurchase up to an additional 2,728,346 shares of common stock under the 2026 Repurchase Plan.

Fourth Quarter 2026 Quarterly Cash Dividend Declaration

On October 21, 2026, the Company announced the declaration of a quarterly cash dividend on its common stock at $0.66 per share. The dividend is payable on November 13, 2026, to shareholders of record as of November 6, 2026.