SouthState Bank Corp (SSB)

Overview

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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.

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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.

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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.

Recent Events

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Governmental and Regulatory Environment

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We continue to assess regulatory and other changes being made by the Trump Administration and its impact on our business. This includes the impact of the Iran conflict, immigration reform, tariff changes and changes in regulation and supervision, including the proposal, modification, rescission, or withdrawal of regulation or guidance, or changes in supervisory approaches and enforcement of rules and guidance applicable to us, including those described below.

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On March 19, 2026, the Federal Reserve, OCC and FDIC jointly issued two joint notices of proposed rulemaking to modernize the U.S. regulatory capital framework. The proposals include a new expanded risk-based approach to calculating risk-weighted assets, which applies to the largest and most internationally active banks, and revisions to the existing standardized approach to calculating risk-based assets, which applies to Category III and IV institutions and smaller banking organizations, such as the Bank (the “Standardized Approach Proposal”). The Standardized Approach Proposal would improve the calibration and risk sensitivity of risk weights. The timing and content of any final rules, and the potential effects of any final rules on the Bank, remain uncertain.

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Critical Accounting Policies

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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.

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Allowance for Credit Losses (ACL)

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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.

Results of Operations

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Overview

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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:

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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.

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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.

Selected Figures and Ratios

The following table presents selected financial figures and ratios for the three and six months ended June 30, 2026 and 2025:

●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.

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Net Interest Income and Margin

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Net interest income is the Company’s principal source of income and a key driver of overall financial performance. Net interest income and net inte

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements included in this Report, which are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward looking statements are based on, among other things, management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, and the economy. Words and phrases such as “may,” “approximately,” “continue,” “should,” “expects,” “projects,” “anticipates,” “is likely,” “look ahead,” “look forward,” “believes,” “will,” “intends,” “estimates,” “strategy,” “plan,” “could,” “potential,” “possible” and variations of such words and similar expressions are intended to identify such forward-looking statements. We caution readers that forward-looking statements are subject to certain risks, uncertainties and assumptions that are difficult to predict with regard to, among other things, timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, those risks listed under “Summary of Risk Factors” starting on page 22 of this Report.

For any forward-looking statements made in this Report or in any documents incorporated by reference into this Report, we claim the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. All forward-looking statements speak only as of the date they are made and are based on information available at that time. We do not undertake any obligation to update or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. All subsequent written and oral forward-looking statements by us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Additional information with respect to factors that may cause actual results to differ materially from those contemplated by our forward looking statements may also be included in other reports that we file with the SEC. We caution that the foregoing list of risk factors is not exclusive and not to place undue reliance on forward looking statements.

Introduction

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes SouthState Bank Corporation and its subsidiary’s results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024, and also analyzes our financial condition as of December 31, 2025 as compared to December 31, 2024. Like most banking institutions, we derive most of our income from interest we receive on our loans and investments. Our primary source of funds for making these loans and investments is our deposits, on most of which we pay interest. Consequently, one of the key measures of our success is the amount of net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our interest-bearing liabilities, such as deposits. Another key measure is the spread between the yield we earn on these interest-earning assets and the rate we pay on our interest-bearing liabilities or the net interest margin.

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There are risks inherent in all loans, so we maintain an allowance for credit losses to absorb our estimate of probable losses on existing loans that may become uncollectible. We establish and maintain this allowance by recording a provision or recovery for credit losses against our earnings. In the following section, we have included a detailed discussion of this process.

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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.

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The following section also identifies 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 information included in this Report.

Overview

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

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At December 31, 2025, we had $67.2 billion in assets and 6,317 full-time equivalent employees. Through our Bank branches, ATMs and online banking platforms, we provide our customers with a wide range of financial products and services, through an eight (8) state footprint in Florida, South Carolina, Texas, Georgia, Colorado, North Carolina, Alabama, and Virginia. These financial products and services include deposit accounts such as checking accounts, savings and time deposits of various types, safe deposit boxes, bank money orders, wire transfer and ACH services, brokerage services and alternative investment products such as annuities and mutual funds, trust and asset management services, loans of all types, including business loans, agriculture loans, real estate-secured (mortgage) loans, personal use loans, home improvement loans, automobile loans, manufactured housing loans, boat loans, credit cards, letters of credit, home equity lines of credit, treasury management services, and merchant services.

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We also operate a correspondent banking and capital markets division within our national bank subsidiary, of which the majority of its bond salesmen, traders and operational personnel are housed in facilities located in Atlanta, Georgia, Birmingham, Alabama, Memphis, Tennessee, and Walnut Creek, California. This division’s primary revenue generating activities are related to its capital markets division, which includes commissions earned on fixed income security sales, fees from hedging services, loan brokerage fees and consulting fees for services related to these activities; and its correspondent banking division, which includes spread income earned on correspondent bank deposits (i.e., federal funds purchased) and correspondent bank checking account deposits and fees from safe-keeping activities, bond accounting services for correspondents, asset/liability consulting related activities, international wires, and other clearing and corporate checking account services.

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We earned net income of $798.7 million, or $7.87 diluted earnings per share (“EPS”), during 2025 compared to net income of $534.8 million, or $6.97 diluted EPS, in 2024. Net income available to the common shareholders was up $263.9 million, or 49.3%, in 2025 compared to 2024. For further discussion of the Company’s results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024, see Results of Operations section of this MD&A starting on page 65.

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At December 31, 2025, we had total assets of approximately $67.2 billion compared to approximately $46.4 billion at December 31, 2024. See the Financial Condition section of this MD&A starting on page 73 for a more detailed description of the change in our balance sheet.

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Our overall asset quality results remained strong during the year. Net charge-offs as a percentage of average loans increased to 0.23% for the year ended December 31, 2025 compared to 0.06% for the year ended December 31, 2024. Net charge-offs, excluding acquisition date charge-offs recorded for PCD loans acquired from Independent of $56.7 million, to total average loans, during the year ended December 31, 2025 were 0.11%. The increase in charge-offs excluding acquisition date charge-offs on PCD loans acquired from Independent in 2025 was mainly due to one commercial and industrial charge-off recorded in the third quarter of 2025 of $21.5 million. If this individual charge-off was also excluded, net charge-offs as a percentage of average loans would have been 0.07% for the year 2025, a 0.01% increase compared to the year ended December 31, 2024. The total nonperforming assets (“NPAs”) increased by $97.9 million to $311.3 million at December 31, 2025 from $213.4 million at December 31, 2024. Non-acquired NPAs increased $23.8 million to $170.2 million at December 31, 2025 from $146.5 million at December 31, 2024, which was related to an increase in non-acquired nonperforming loans of $19.7 million. Non-acquired OREO and other NPAs increased by $4.1 million to $5.3 million as of December 31, 2025 compared to $1.2 million as of December 31, 2024. Acquired NPAs increased $74.1 to $141.0 million at December 31, 2025 from $66.9 million at December 31, 2024. Acquired nonperforming loans increased $71.8 million and acquired OREO and other nonperforming assets increased $2.3 million. Total NPAs as a percentage of total assets remained flat at 0.46% at December 31, 2025 and December 31, 2024. We continue to experience solid and stable asset quality numbers and ratios in 2025.

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Our efficiency ratio was 53.1% for the year ended December 31, 2025 compared to 56.9% for the same period in 2024. The improvement of our efficiency ratio was due to the result of a 56.1% increase in the total of tax-equivalent net interest income and noninterest income being greater than a 45.7% increase in noninterest expense, excluding amortization of intangibles. The overall increase in both tax-equivalent net interest income and noninterest income and noninterest expense was due to the acquisition of Independent in 2025. The higher increase in tax-equivalent net interest income and noninterest income was due to the $1.1 billion increase in interest income related to loans held for investment, which was mainly attributable to loans acquired in the acquisition of Independent in 2025.

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We continue to remain well-capitalized with a total risk-based capital ratio of 13.8% and a Tier 1 leverage ratio of 9.3%, as of December 31, 2025, compared to 15.0% and 10.0%, respectively, at December 31, 2024. The decline in the capital ra

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