SSB 10-K & 10-Q changes, risk factors and insider trading

We intend to continue to pursue a growth strategy for our business. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in pursuing such growth strategies. Our ability to continue to grow successfully will depend on a variety of factors, including economic conditions in the markets in which we operate as well as in the U.S. and globally; geopolitical factors resulting in tariffs or other trade disruptions, continued availability of desirable business opportunities; our ability to successfully recruit relationship managers and other front line business officers, the competitive responses from other financial and non-financial institution competitors in our market areas; the regulatory environment in which we operate, including supervisoryrisk andmanagement, capital and liquidity expectations and our compliance with heightened standards; our ability to continue to implement and improve our operational, credit, financial, management and other risk controls and processes and our reporting systems and procedures to manage a growing number of client relationships; and our ability to integrate any acquisitions and develop consistent policies throughout our various businesses. While we believe our market areas are among the highest growth areas in the country, and that we have the management, internal systems, and other resources in place to successfully manage our future growth, there can be no assurance growth opportunities will be available, or growth will be successfully managed. In addition, if we are unable to manage future expansion in our operations, we may experience regulatory, compliance or operational problems, have to slow the pace of growth, or have to incur additional expenditures beyond current projections to support such growth, any of which could adversely affect our business. Particularly in light of prevailing economic and competitive conditions, there can be no assurance that we will be able to expand our market presence in our existing markets or successfully enter new markets, or that any such expansion will not adversely affect our results of operations. Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations, and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs more slowly than anticipated or declines, our operating results could be materially adversely affected.

Our current strategic plan contains growth, investment, risk management and efficiency initiatives in order to create a better and more profitable Company and remain competitive with other bank and non-bank financial services providers. To achieve our strategic goals, we must successfully execute these initiatives. Our current initiatives include, but are not limited to, successfullyorganically integratinggrowing IBTX’sour business intoin our Company,core thereafter building upon our digital banking initiatives by continuing to implement real time paymentsmarket and expandingsurrounding our payment capabilities,areas, continuing to grow our middle market and larger corporate banking and correspondent divisions, implementing an AI strategy to be able to adopt appropriate AI capabilities internally and from vendors to enhance our efficiency with appropriate controls in place to maintain accuracy and reduce or eliminate bias; and building upon our digital banking initiatives by continuing to implement digital banking platforms and expanding our payment capabilities, including by being able to act as a reserve and issuer for stablecoins, continuing to enhance our technology and cybersecurity infrastructure and enhancing our risk management framework to comply with the OCC’s heightened standards.framework. While we have met our strategic initiatives in the past, there is no guarantee that these initiatives will be successful in supporting growth or achieving the expected efficiencies and revenue enhancements that we anticipate.

In addition, our net interest income may be adversely affected by resurgent inflationary pressures and new global supply chain challenges, fiscal policies, geopolitical matters, including as a result of changes in U.S. presidential administrations or Congress, the implementation of tariffs and other protectionist trade policies, weather events or other developments. While the rate of inflation for 20242025 was lower than that experienced earlier in eitherthe 2021, 2022 or 2023,decade, it continued to exceed the Federal Reserve’s two percent (2%) annual target. There is a risk that inflation may become higher or persist for longer periods of time and not decrease. We increased rates in response to the Federal Reserve’s interest rate increases, and decreased rates in response to Federal Reserve’s interest rate decreases and loan demand has beenincreased mutedover while2025 theacross longer-termour ratefootprint environmentbut becomesthere clearer.is no guarantee that this strong loan demand will continue. As interest rates rise, competition for deposits increased, leading to higher deposit costs and reduced liquidity, and as rates have fallen, deposit costs have been moderating, and liquidity has increased. Any new increase in interest rates to address inflationary pressures or otherwise could result in declines in demand for our banking products and services and could negatively impact, among other things, our liquidity, regulatory capital, goodwill and our growth strategy.

Continued inflation may impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention, and negatively impacting the demand for our products and services. Additionally, inflation may lead to a decrease in consumer and clients purchasing power and negatively affect the need or demand for our products and services. If significant inflation continues, our business could be negatively affected by, among other things, increased default rates leading to credit losses which could decrease our appetite for new credit extensions. These inflationary pressures could also result in missed earnings and budgetary projections.

In addition, events impacting the banking industry in 2023 resulted in significant disruption and volatility in the capital markets, reduced current valuations of securities portfolios and bank stocks, and decreased confidence in banks among depositors and other counterparties as well as investors. While these events occurred in the context of rapidly rising interest rates, and such rate increases and disruption and volatility has since abated, there remain unrealized losses in longer duration debt securities and loans held by banks, increased competition for deposits, and potentially an increased risk of a recession. A decrease in the supply of deposits or significant increase in competition for deposits could result in substantial increases in costs to retain and service deposits. In addition, increased adoption of consumer banking technology can result in reduced deposit stickiness due to the relative ease with which depositors may transfer deposits to a different depository institution in the event that confidence is lost in the Bank. The cost of resolving the bank failures in early 2023 prompted the FDIC to issue a special assessment to recover costs to the Deposit Insurance Fund, and such special assessments may continue to be imposed. Please see Item I – Part 1 – “Supervision and Regulation – FDIC Insurance Assessments and Depositor Preference” for further information.

In addition to serving clients better, investments in, and the effective use of, technology, including artificial intelligence, may increase efficiency and may enable financial institutions to reduce costs. AlthoughWe wehave adopted a formal AI Strategy and are making focused investments in AI tools and automation and other technology solutions to improve both our customer facing and back-office services and have strategically introduced artificial intelligence tools for internal efficiencies, investments may not be sufficient or provide the anticipated benefits or desired return. We can make no assurance that investments will be sufficient to increase efficiencies, retain existing customers or attract new customers in the future.

We must also effectively manage interest rate risk. Because mortgage loans typically have much longer maturities than deposits or other types of funding, rising interest rates can raise the cost of funding relative to the value of the mortgage loan. We manage this risk in part by holding adjustable rate mortgages in portfolios and through other means. Conversely, the value of our mortgage servicing assets may fall when interest rates fall, as borrowers refinance into lower rate loans. Given current rates, material reductions in rates may not be probable, but as rates rise, this risk increases, as evidenced by the March 2023 bank failures. There can be no assurance that we will successfully manage the lending and servicing businesses through all future interest rate environments.

Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our funding sources include core deposits, federal funds purchased, securities sold under repurchase agreements, non-core deposits, and short- and long-term debt. Other sources of liquidity are available to us should they be needed, including our ability to acquire additional non-core deposits, the issuance and sale of debt securities, a secured line of credit we have with U.S. Bank, advances from the Federal Home Loan Bank of Atlanta and the Federal Reserve Discount Window, and the issuance and sale of preferred or common securities in public or private transactions. Our access to funding sources in amounts adequate to finance or capitalize our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general, as evidenced by the March 2023 bank failures.general. Our ability to borrow could be impaired by factors that are not specific to us, such as further disruption in the financial markets or negative views and expectations about the prospects for the financial services industry in light of the recent turmoil faced by banking organizations and the continued deterioration in credit markets.

In connection with the IBTX Merger, we are integrating a larger balance sheet and funding structure, which may introduce complexities in liquidity management. If deposit growth does not meet expectations or funding costs rise unexpectedly, our ability to maintain adequate liquidity could be impacted. Further, effective management of liquidity risk includes, among other practices, establishing liquidity key risk indicators and related risk tolerances, maintaining a portfolio of high-quality liquid assets, building and maintaining loan collateral at the Federal Home Loan Bank of Atlanta and Federal Reserve Discount Window, cash flow forecasting, diversifying funding sources, designing and using stress testing scenarios, and implementing an operational contingency funding plan. Our failure to effectively manage our liquidity risk through one or more of these practices could lead to operational disruptions, financial losses, and reputational damage, resulting in an adverse effect on our business, financial condition, and results of operations.

The measure of our ACL is dependent on the interpretation of applicable accounting standards, as well as external events, including the IBTX Merger, the path of interest rates and inflation, market conditions, including recession risk and the possible impact on the unemployment rate and the performance of our loan portfolio, and other factors including the conflict in Ukraine, the conflicts in the middle east and tensions in the Americas and other geopolitical tensions, performance of the commercial real estate markets, and natural disasters such as hurricanes and flooding or pandemics such as COVID-19. We adopted the Financial Accounting Standards Board’s Current Expected Credit Loss, or CECL standard, in the first quarter of 2020. Under the CECL model, we are required to present certain financial assets carried at amortized cost, such as loans held for investment and held to maturity debt securities, at the net amount expected to be collected. The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount and certain management judgments over the life of the loan. This initial measurement took place as of January 1, 2020, at the time of our adoption of CECL.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. The Company also may be compelled to raise capital if regulatory or supervisory requirements change and as a result of the acquisition of IBTXIndependent may face further government scrutiny due to the increased size of the Company’s business. Our ability to raise capital, if needed, in the future to meet capital requirements or otherwise will depend on conditions in the capital markets at that time, which are outside our control, and on our financial performance. Accordingly, there is no assurance as to our ability to raise additional capital if needed on terms acceptable to us. If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth and acquisitions could be materially impaired.

The objectives of our risk management program and processes are to mitigate risk and loss to our organization. We have established an enterprise risk framework and program that are intended to identify, measure, monitor, report and analyze the types of risks to which we are subject across the organization and business lines, including liquidity risk, credit risk, strategic risk, market risk, interest rate risk, operational risk (including payments risk, BSAAML/AMLCFT risk, and model risk), cybersecurity risk, corporate governance and legal risk, compliance risk, strategic risk, and reputationalstrategic risk (including environmental and social risks), among others. We also assess new and emerging risks on our existing programs. However, this framework will evolve as we expectgrow toand become subjectmore to heightened expectations from the OCC as we grow above $50 billion in assets.complex. In addition, as with any risk management process, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. The ongoing developments in the financial services industry continue to highlight both the importance and some of the limitations of managing unanticipated risks. Any potential new regulations or modifications to existing regulations would also likely necessitate changes to our existing regulatory compliance and risk management infrastructure. If our risk management processes prove ineffective, we could suffer unexpected losses and could be materially adversely affected.

RisingChanging mortgage rates and adverse changes in mortgage market conditions could adversely impact our mortgage line of business.

Our mortgage line of business contributes significantly to our results of operations. The residential real estate mortgage lending business is sensitive to changes in interest rates, especially long-term interest rates. As interest rates increased during 2022 and 2023,increased, the demand for mortgages has decreased materially, and our mortgage volume has substantially decreased as well. While we have adjusted our business model in response to sellthese changes in demand, to, among other things, retain a larger percentageportion of our originations into the secondary market, the gain on saleour opportunitiesbalance have been smaller than in previous years. Further,sheet, the portion of our mortgage loans that are originated for our portfolio subjects the Company to increased interest rate risk. Additionally, the fair value of our mortgage servicing rights is sensitive to changes in interest rates and interest rate volatility. Any change in the fair value of our mortgage servicing rights may negatively impact earnings. As a result of these and other factors, our price and profitability targets for this business may not be met, reducing our results of operations in the line of business and our net income. Further, risk in the mortgage business is heightened due to external factors, such as compliance with regulations, historically low housing inventories restraining home sales, competitive alternatives, changing tax rates and strategies, economic conditions, and shifting market preferences, which could impact the profitability of these lines of business and have a material adverse effect on our businesses, and, in turn, our financial condition and results of operations.

Our business also is dependent on our employees as well as third-party service providers to process a large number of increasingly larger and more complex transactions. These risks will increase as we implement a real timereal-time payments platform. We could be materially and adversely affected if employees, clients, counterparties or other third parties caused an operational breakdown or failure, either as a result of human error, fraudulent manipulation or purposeful damage to any of our operations or systems.

If we are unable to offer our key management personnel long termlong-term incentive compensation, including restricted stock units and performance share units, as part of their total compensation package, we may have difficulty retaining such personnel, which would adversely affect our operations and financial performance.

The potential for operational risk exposure exists throughout our business and, as a result of our interactions with, and reliance on, third parties, is not limited to our own internal operational functions. We depend on our ability to process, record and monitor a large number of client transactions on a continuous basis. Further, third parties provide key components of our business infrastructure, such as our core processing, underwriting and servicing software, data collection and analysis, loan and deposit documents, compliance and risk software, product and service offerings, and internet connections and network access. As client, public and regulatory expectations regarding operational, information, and cyber securitycybersecurity have increased, we and our third-party service providers must continue to safeguard and monitor our operational and security systems and infrastructure for potential failures, threats, disruptions and breakdowns. Our business, financial, accounting, data processing, or other operating systems and facilities, or those of our third-party service providers, may stop operating properly or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond our control. Although we have information and cybersecurity policies and procedures, business continuity plans and other safeguards in place, our business operations may be adversely affected by significant and widespread failure of or disruption to our operational and security systems and infrastructure that support our businesses and clients. Any disruption or failure in our operational or security systems or infrastructure or the services provided by third parties, or any failure by us or these third parties to handle current or higher volumes of use, could adversely affect our ability to deliver products and services to our clients, process transactions and otherwise to conduct business.

Cyber-attacks, information security breaches, and other similar incidents, whether directed at us or third parties, may result in a material loss or have material consequences. Furthermore, the public perception that a cyber-attack on our systems has been successful, whether or not this perception is correct, may damage our reputation with customers and third parties with whom we do business. Hacking or other unauthorized disclosure of personal information and identity theft risks, in particular, could cause serious reputational harm. A successful penetration or circumvention of system security could cause us serious negative consequences, including our loss of customers and business opportunities, significant business disruption to our operations and business, misappropriation or destruction of our confidential, proprietary, personal or other information and/or that of our customers or other third parties, or damage to our or our customers’ and/or third parties’ computers or systems, and could result in a violation of applicable data privacy and cybersecurity laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs,costs and additional compliance costs, and could adversely impact our results of operations, liquidity and financial condition. We may not be insured against all types of losses as a result of cyber-attacks, information security breaches, and other similar incidents, and our insurer may deny coverage as to any future claim or insurance coverage may not be available on reasonable terms, or at all, or may be inadequate to cover all losses resulting from such incidents.

Our business growth, profitability and market share has been enhanced by us engaging in strategic mergers and acquisitions and de novo branching either within or contiguous to our existing footprint. WeWhile we are focused on organic growth strategies in order to capitalize on the growth of our core markets and possible disruption of competitor financial institutions that are undergoing mergers and acquisitions, we e may acquire other financial institutions or parts of financial institutions in the future and engage in lift outs of our banking teams or de novo branching. We may also consider and enter into or acquire new lines of business or offer new products or services, which may also use new sales channels, such as online and mobile banking. As part of our acquisition strategy, we seek companies that are culturally similar to us, have experienced management, and are in markets in which we operate or close to those markets so we can achieve economies of scale.

Nevertheless, thereThere is no assurance that market conditions will favor mergers or the financial feasibility of completing an acquisition, obtaining cost savings and operational efficiencies, or realizing merger synergies upon integration. Failure to achieve or delays in achieving anticipated benefits could result in a share price reduction as well as increased costs, decreases in the amount of expected revenues, and diversion of management’s time and energy and could materially and adversely affect the Company’s financial condition, results of operations, business and prospects. Further, there is no assurance that, following any future mergers or acquisitions, our integration efforts will be successful or our Company, after giving effect to the acquisition, will achieve increased revenues comparable to or better than our historical experience, and failure to realize such expected revenue increases, cost savings, increases in market presence or other benefits could have a material adverse effect on our financial conditions and results of operations.

While we seek continued organic growth, we anticipate continuing to evaluate merger and acquisition opportunities presented to us in our core markets, contiguous markets, and beyond. The number of financial institutions headquartered in our market areas in the Southeastern United States and across the country continues to decline through merger and other activity. We expect that other banking and financial services companies, many of which have significantly greater resources, will compete with us to acquire financial services businesses. This competition, as the number of appropriate merger targets decreases, could increase prices for potential acquisitions which could reduce our potential returns, and reduce the attractiveness of these opportunities to us. In addition, acquisitions are subject to various regulatory approvals, and if we fail to receive the appropriate regulatory approvals, we will not be able to consummate an acquisition that we believe is in our best interests. Among other things, our regulators consider our capital, liquidity, profitability, risk management, regulatory and fair lending compliance, including with respect to BSA and AMLcompliance obligations, consumer protection laws, CRA obligations, and levels of goodwill and intangibles when considering acquisition and expansion proposals. Any acquisition could be dilutive to our earnings and shareholders' equity per share of our common stock.

As of December 31, 2024,2025, we owned $6.8$8.7 billion of investment securities, which included $2.3$2.0 billion in held-to-maturityheld to maturity securities, $4.3$6.3 billion in available for sale securities and $223.6$353.4 million in other investments. The fair value of our investment securities may be adversely affected by market conditions, including changes in interest rates, and the occurrence of any events adversely affecting the issuer of particular securities in our investments portfolio. For available-for-saleavailable for sale securities, the unrealized gains and losses are recorded in equity, net of tax, in accumulated other comprehensive income (“AOCI”). The Company has elected to exclude AOCI from its regulatory capital calculations, however, after the failure of a few financial institutions in the first quarter of 2023, many investors are taking into consideration losses in available for sale securities included in AOCI along with losses in held to maturity securities, both of which are not included in our financialstatement statements,of income, in looking at the valuations of financial institutions.

We analyze each available for sale security quarterly on an individual basis to determine if there has been a decline in fair value below the amortized cost basis of the security to determine whether there is a credit loss associated with the decline in fair value. We consider the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral among other factors. We use a systematic methodology to determine the ACL for investment securities held to maturity. The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held to maturity portfolio. We consider the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the loanheld to maturity portfolio. Our estimate of the ACL involves a high degree of judgment; therefore, our process for determining expected credit losses my result in a range of expected credit losses. We monitor the held to maturity portfolio on a quarterly basis to determine whether a valuation account needs to be recorded. Because of changing economic and market conditions affecting issuers, we may be required to recognize expected credit losses on securities in future periods, which could have a material adverse effect on our business, financial condition or results of operations.

Following completion of the IBTXIndependent Merger, the Company reached $65$66 billion in assets.assets, Asrequiring athe result,Company it mustto bolster its risk management and governance framework to support a larger company consistent with the OCC’s heightened standards for larger institutions. These standards include established minimum standards for the design and implementation of the risk management framework and increased oversight and credible challenge by the Board of Directors over the Company’s risk profile and risk management practices. While we have been working to meet these heightened standards over the past twothree years, on December 23, 2025, the OCC approved a Notice of Proposed Rulemaking which willwould notincrease applythe untilthreshold Septemberfor 2026,applying the guidelines from $50 billion to $700 billion. In the event the standard remains in effect for institutions with $50 billion in assets, our existing enterprise risk framework and program may not be easily scalable to meet such heightened standards, thereby requiring lengthy or costly modifications to meet such standards. Further, the Company’s existing workforce may not be sufficient or have the requisite skillset to design, operate and manage the bolstered framework, thereby requiring the Company to expend financial resources to hire and/or train the necessary staff. The Company’s failure to meet such heightened standardsstandards, to the extent applicable, may expose it to regulatory enforcement actions and civil penalties which could have an adverse material impact on the Company’s business, financial condition, operations and reputation and could jeopardize the Company’s ability to pursue acquisition opportunities.

We operate in a highly regulated industry and are subject to examination, supervision, and comprehensive regulation by various agencies, including the Federal Reserve, the OCC, CFPB, and the FDIC. These laws, regulations, and rules are imposed primarily to protect depositors, the FDIC Deposit Insurance Fund, consumers, and the banking system as a whole. We also are regulated by the SEC and the Financial Industry Regulatory Authority, or FINRA, whose regulations are designed to protect investors. Our compliance with these regulations is costly and potentially restricts certain of our activities, including payment of dividends, mergers and acquisitions, investments, loans and interest rates charged, interest rates paid and deposits and locations of our offices. We are also subject to capital guidelines established by our regulators, which require us to maintain sufficient capital to support our growth. Regulation of the financial services industry has increased significantly since the global financial crisis. The laws and regulations applicable to the banking industry have been changing and could continue to change at any time. The extent and timing of any regulatory reformreform, as well as any effect on our business and financial results, are uncertain. Additionally, legislation or regulation may impose unexpected or unintended consequences, the impact of which is difficult to predict. Because government regulation greatly affects the business and financial results of all commercial banks and bank holding companies, our cost of compliance could adversely affect our ability to operate profitably.

In addition, we expect the Trump administration will seek to implement a regulatory reform agenda that is significantly different than that of the Biden Administration, including, for example, potentially freezing new regulations or hiring for federal agencies. The Trump Administration’s agenda also includes a heightened focus on immigration reform and the use of sanctions and export controls to encouragesupport U.S. economic growth.interests. We cannot predict future changes in the applicable laws, regulations and regulatory agency policies, including any changes resulting from changes in the U.S. presidential administration or U.S. Congress, such as with respect to proposed regulations on capital and long-term debt, or the interpretation or implementation of merger policies. Nevertheless, such changes may have a material impact on our business, financial condition and results of operations.

We face the risk of becoming subject to new or more stringent requirements in connection with the introduction of new regulations or modifications of existing regulations, which could require us to hold more capital or liquidity or have other adverse effects on our businesses or profitability. For example, the banking regulators proposed changes to the capital rules intended to bring the U.S. capital rules into conformance with the Basel Framework, which would require banking organizations with assets of $100 billion or more to face significantly increased capital requirements. While the proposed rule doesmay not affect the Company directly because it applies onlychange to bankingapply to organizations withlarger than $100 billion or more in assets, it may adversely impact the Company due to general regulatory and investor expectations for the Company and the Bank to hold additional capital or as a result of larger banking organizations making changes in response to the increased capital requirements, which could have a material impact on the Company’s financial results and business mix. Please see Item I – Part 1 – “Supervision and Regulation – Capital Requirements” for further information regarding the capital rule proposal.

Actions (if necessary) to increase capital,capital may adversely affect us. Our ability to raise additional capital, when and if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry and market condition, and governmental activities, many of which are outside our control, and on our financial condition and performance. Accordingly, we cannot assure you that we will be able to raise additional capital if needed or on terms acceptable to us. If we fail to meet these capital and other regulatory requirements, our financial condition, liquidity and results of operations would be materially and adversely affected.

Our failure to remain “well capitalized” for bank regulatory purposes could affect customer confidence, our ability to grow, our costs of funds, and FDIC insurance costs, our ability to pay dividends on common stock and make distributions on our trust preferred securities, our ability to make acquisitions, and our business, results of operations and financial condition. Under FDIC rules, if our subsidiary bank ceases to be a “well capitalized” institution for bank regulatory purposes, the interest rates that it pays and its ability to accept brokered deposits may be restricted. At December 31, 2024,2025, we had approximately $614.5$4.0 millionbillion of in-market CDARs and Insured Cash Sweep (“ICS”) reciprocal deposits, $1.9 billion of ICS brokered demand deposits, $1.7 billion in wholesale brokered time deposits, $23.6$83.6 million of in-marketother CDARsbrokered demand deposits, $2.5 billion of ICS deposits and approximately $53.4$45.9 million of deposits related to our prepaid card business, which are considered brokered deposits for regulatory purposes.

The banking agencies regularly conduct examinations of our business, including our compliance with applicable laws and regulations. If, as a result of an examination, a banking agency were to determine that the financial condition, capital resources, asset quality, asset concentration, earning prospects, management, liquidity, sensitivity to market risk, consumer compliance, or other aspects of any of our operations has become unsatisfactory, or that we or our management is in violation of any law or regulation, itthe agency could take a number or different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to change the asset composition of our portfolio or balance sheet, to assess civil money penalties against our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance. If we become subject to such regulatory actions, our business, results of operations and reputation may be negatively impacted.

The BSA and its implementing regulations require financial institutions to, among other duties, implement and maintain an effective AML/CFT compliance program and file suspicious activity and currency transaction reports when appropriate. The Bank is also subject to increased scrutiny from OFAC with respect to its compliance with the U.S. economic sanctions laws and regulations, which include, among other things, the prohibition against dealing with, and the need to block or freeze assets of, persons that are the subject of U.S. economic sanctions. Please see Item I – Part 1 – “Supervision and Regulation - Anti-Money Laundering Rules” and Item 1 – Part 1 – “Supervision and Regulation - OFAC Regulation” for further information regarding the Bank’s obligations under the BSA and its implementing regulations and U.S. economic sanctions laws and regulations, respectively.

If the Bank’s policies, procedures, and systems are deemed deficient, or the policies, procedures and systems of the financial institutions that we have already acquired or may acquire in the future are deficient, the Bank could be subject to liability, including fines and regulatory actions, which may include restrictions on its ability to pay dividends and the necessity and ability to obtain regulatory approvals to proceed with certain aspects of its business plan, including acquisition plans. Failure to maintain and implement an effective AML/CFT and/or santions compliance program could also have serious reputational consequences for the Bank. Any of these results could have a material adverse effect on the Bank’s business, financial condition, results of operations, and future prospects.

The FDIC insures deposits at FDIC-insured depository institutions, such as our subsidiary Bank, up to applicable limits. The amount of a particular institution’s deposit insurance assessment is based on that institution’s risk classification under an FDIC risk-based assessment system. The assessment base on which the Bank’s deposit insurance premiums is paid to the FDIC has been calculated based on its average consolidated total assets less its average equity. However, effective January 1, 2019, which was following the fourth consecutive quarter where the Bank’s total consolidated assets exceeded $10 billion, the FDIC started to useuses a performance score and loss-severity score to calculate the Bank’s initial FDIC assessment rate. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to its regulators. While our risk management processes are designed to reduce risk by maintaining capital levels and mitigating any supervisory concerns, we may be unable to control the amount of premiums that we are required to pay for FDIC insurance in the event of a new economic downturn and an increase in financial institution failures. For example, we incurred a special assessment of approximately $30$33.5 millionmillion, which includes the special assessment applicable to the deposits assumed from Independent on January, 1, 2025 and subject to the special assessment for the period subsequent to the acquisition date, by the FDIC to help recoup losses to the Deposit Insurance Fund resulting from bank failures in 2023. Any future increases in assessments or required prepayments in FDIC insurance premiums may materially adversely affect results of operations, including by reducing our profitability or limiting our ability to pursue business opportunities.

At December 31, 2024,2025, oura small number of institutional shareholders includedown threea fundssignificant owning approximately 29%portion of our common stock and they may exercise significant influence over us and their interests may be different from our other shareholders.

Based on their 13G13F forms filed for the year end December 31, 2024,2025, our shareholders include threetwo funds that collectively own approximately 29%20% of the outstanding shares of our common stock. The top ten institutional owners collectively own approximately 50%42% of our outstanding shares of common stock, as reported by S&P Global. While the federal banking laws require prior bank regulatory approval if shareholders owning in excess of 9.9% of a financial holding company’s outstanding voting shares desire to act in concert, these institutional owners nonetheless could vote the same way on matters submitted to our shareholders without being deemed to be acting in concert and, if so, could exercise significant influence over us and actions taken by our shareholders. Interests of institutional funds may be different from our other shareholders. Accordingly, given their collective ownership, the funds could have significant influence over whether or not a proposal submitted to our shareholders receives required shareholder approval.

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, 20242025 as compared to the year ended December 31, 2023,2024, and also analyzes our financial condition as of December 31, 20242025 as compared to December 31, 2023.2024. 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.liabilities or the net interest margin.

SouthState Bank Corporation is a financial holding company headquartered in Winter Haven, Florida,Florida. andDuring the third quarter of 2025, the Company was incorporatedredomiciled underto the lawsstate of Florida by merging SouthState Corporation, a South Carolina incorporation, 1985.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|Duncan-Williams Securities Corp. (“SouthState|Duncan-Williams”),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 Advisory,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. In 2023, theThe Bank formedoperates 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.

At December 31, 2024,2025, we had $46.4$67.2 billion in assets and 5,1006,317 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 aan sixeight (68) state footprint in Alabama, Florida, South Carolina, Texas, Georgia, Colorado, North Carolina, South CarolinaAlabama, 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.

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, and Birmingham, Alabama.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.

Our overall asset quality results remained strong during the year. Net charge offscharge-offs as a percentage of average loans decreasedincreased to 0.06% compared to 0.08%0.23% for the year ended December 31, 2023.2025 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 $29.2$97.9 million to $311.3 million at December 31, 2025 from $213.4 million at December 31, 20242024. fromNon-acquired $184.1NPAs increased $23.8 million to $170.2 million at December 31, 2023.2025 Non-acquired NPAs increased $24.0 million tofrom $146.5 million at December 31, 2024 from $122.5 million at December 31, 2023,2024, which was related to an increase in non-acquired nonperforming loans of $23.5$19.7 million. Non-acquired OREO and other NPAs increased by $471,000$4.1 million to $5.3 million as of December 31, 2025 compared to $1.2 million as of December 31, 2024 compared to $711,000 as of December 31, 2023.2024. Acquired NPAs increased $5.3$74.1 to $141.0 million toat December 31, 2025 from $66.9 million at December 31, 2024 from $61.6 million at December 31, 2023.2024. Acquired nonperforming loans increased $4.4$71.8 million and acquired OREO and other nonperforming assets increased $871,000.$2.3 million. Total NPAs as a percentage of total assets increasedremained 5flat basis points toat 0.46% at December 31, 20242025 compared to 0.41% atand December 31, 2023.2024. We continue to experience solid and stable asset quality numbers and ratios in 2024.2025.

We continue to remain well-capitalized with a total risk-based capital ratio of 15.0%13.8% and a Tier 1 leverage ratio of 10.0%,9.3%, as of December 31, 2024,2025, compared to 14.1%15.0% and 9.4%,10.0%, respectively, at December 31, 2023.2024. The improvementdecline in the total risk-based capital ratioratios was mainly due to totalthe effects on capital and assets from the acquisition of Independent. Total risk-based capital increasing 8.2%increased with the increase in equity resulting from the issuance of shares of common stock for the Independent acquisition, the net income of $534.8 million recognized induring 2024,2025, along with the increase in the allowance for credit losses and unfunded commitments of $20.1 million includable in Tier 2 capital. Total risk-weighted assets increased $657.1$15.8 million,billion, or 1.9%,43.7%, in 2024.2025. The improvementdecline in the Tier 1 leverage ratio was due to the increase in Tieraverage 1 capital of 9.3% with the increase in equityassets resulting from netthe incomeacquisition of $534.8 million recognized in 2024.Independent. Regulatory average assets used to calculate the Tier 1 leverage ratio increased $1.1$18.3 billion, or 2.6%,40.4%, in 2024.2025. We believe our current capital ratios position us well to grow both organically and through certain strategic opportunities. For further discussion of the Company’s financial condition as of December 31, 20242025 compared to December 31, 2023,2024, see Financial Condition section of this MD&A starting on page 77.73.

We account for acquisitions under FASB ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, and liabilities assumed, are recorded at fair value. This includes intangible assets identified as a result of the acquisition. ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires us to record purchased financial assets with credit deterioration (PCD assets), defined as a more-than-insignificant deterioration in credit quality since origination or issuance, at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no provision for credit losses affecting net income on acquisition ofacquired PCD assets. Changes in estimates of expected credit losses after acquisition are recognized as provision for credit loss expense (or recovery of credit losses) in subsequent periods as they arise. Any non-credit discount or premium resulting from acquiring a pool of purchased financial assets with credit deterioration shall be allocated to each individual asset. At the acquisition date, the initial allowance for credit losses determined on a collective basis shall be allocated to individual assets to appropriately allocate any non-credit discount or premium. The non-credit discount or premium, after the adjustment for the allowance for credit losses, shall be accreted into interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date.

One of the most significant judgments influencing the ACL is the macroeconomic forecasts from the third-party service provider. Changes in the economic forecasts may significantly affect the estimated credit losses which may potentially lead to materially different quantitatively modeled allowance levels from one reporting period to the next. Given the dynamic relationship between macroeconomic variables, it is difficult to estimate the impact of a change in any one individual variable on the ACL. SouthState uses a third-party service provider to support the economic forecast assumptions under CECL forecast by providing various levels of economic scenarios. These scenarios are weighted in accordance with management assessment of scenarios as well as expectations of the general market and industry conditions. To illustrate the sensitivity of these scenarios, if a 100% probability weighting was applied to the adverse scenario rather than using the probability-weighted three scenario approach, this would result in an increase in the ACL by approximately $224$208 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $104$122 million. The adverse scenario includes assumptions including, but not limited to, rising unemployment consistent with a recession, high levels of inflation and weakened consumer and business spending, elevated interest rates, tightening credit, widening Federal deficit, and continuedexacerbated geopolitical and trade tensions. Conversely, the upside scenario includes assumptions such as a stronger domestic economy, swift resolution of international conflicts and strengthening global economy, more than full employment, reduced political tensions, and other favorable assumptions. This sensitivity analysis and related impact on the ACL is a hypothetical analysis and is not intended to represent management’s judgments at December 31, 2024.2025.

Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed in a business combination. As of December 31, 20242025 and 2023,2024, the balance of goodwill was $3.1 billion and $1.9 billion.billion, respectively. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

Under the ASU Topic 350, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on the difference. The impairment charge will be limited to the amount of goodwill allocated to the reporting unit. An entity is able to perform an optional qualitative goodwill impairment assessment before proceeding to the quantitative step of determining whether the reporting unit’s carrying amount exceeds itits fair value.

We evaluated the carrying value of goodwill as of October 31, 2024,2025, our annual test date, and determined that more likely than not that no impairment charge was necessary as the fair value of the entity exceeded the carrying value. We will continue to monitor the impact of current economic conditions and other events on the Company’s business, operating results, cash flows and financial condition. If the current economic conditions and other events were to deteriorate and our stock price falls below current levels, we will have to reevaluate the impact on our financial condition and potential impairment of goodwill.

For information relating to recent accounting standards and pronouncements, see Note 1—Summary of Significant Accounting Policies to our audited consolidated financial statements entitled “Summary of Significant Accounting Policies.”

The Federal Reserve implemented a total rate cutcuts of 100175 basis-point, beginning with a 50 basis-point reduction in mid-September 2024. This was followed by twofive additional cuts of 25 basis-point each, one in early November 20242024, one in mid-December 2024, one in late October 2025, and the otherlatest one in mid-DecemberDecember 2024.2025. These rate cuts came after a series of rate hikes that began in March 2022, resulting in a target range of 4.25%3.50% to 4.50%3.75% at December 31, 2024.2025. As thea rate reductions occurred during the later part of the year 2024,result, the Company operated in a comparatively higherlower rate environment in 20242025 compared to 2023.2024.

Our noninterest income increased $15.4by $75.5 million, or 5.4%,25.0%, for the year ended December 31, 20242025 compared to 2023.2024. This change in total noninterest income resulted from the following:

Noninterest expense represents the largest expense category for ourthe company.Company. Noninterest expense increased $6.9$519.6 million, or 0.7%,51.9%, for the year ended December 31, 20242025 compared to 2023.2024. The change in total noninterest expense resulted from the following:

Our effective tax rate increaseddecreased to 23.63%23.22% at December 31, 2024,2025, compared to 21.64%23.63% for the year-ended December 31, 2023.2024. The increasedecrease was primarily due to thea inclusion of amortization of Low-Income Housing Tax Credit Investmentsdecrease in incomestate tax expense due to thestate adoptiontax planning and lowering of therelated proportionalstate amortizationapportionment methodin duringspecific the first quarter of 2024jurisdictions as well as the increase in tax-exempt income and an increase in pre-taxthe incomecash insurrender value of BOLI policies held by the current period.Bank. This benefit was partially offset by athe decreaseincrease in pretax book income and higher non-deductible executive compensation and TEFRAdisallowed interestFDIC expensepremiums disallowanceduring the current period, when compared to December 31, 2023.2024. For additional information refer to Note 11—Income Taxes in the consolidated financial statements.

The Company’s Chief Operating Decision Maker (“CODM”), the Executive Committee, consists of the Company’s senior executive management team, including the Chief Executive Officer, Chief Strategy Officer, President, Chief Financial Officer, Chief Operating Officer, Chief Risk Officer, Chief Credit Officer and other executives. The CODM generally meets monthly to assess performance of the General Banking Unit using a variety of figures, metrics and key performance indicators. In addition to net income and non-Tax Equivalent (“TE”) Net Interest Margin (“NIM”), the CODM considers Pre-Provision Net Revenue (“PPNR”) and TE NIM to make business decisions. The CODM monitors these profitability measures at each meeting, and is regularly featured in various investor presentations, earnings releases, and other internal management reports. These performance and profitability measures influence business decisions and allocation of resources within the General Banking Unit.

At December 31, 2024,2025, we had total assets of approximately $46.4$67.2 billion, consisting principally of $33.9$48.6 billion in total loans, before taking into account the allowance for credit losses of $465.3$585.2 million, $6.8$8.7 billion in investment securities, $1.4$3.2 billion in cash and cash equivalents and $1.9$3.1 billion in goodwill. Our liabilities at December 31, 20242025 totaled $40.5$58.1 billion, consisting principally of deposits of $38.1$55.1 billion ($10.2$13.4 billion in noninterest-bearing and $27.9$41.8 billion in interest-bearing), $879.9$554.7 million derivative liabilities and $906.4$1.3 millionbillion of short-term and long-term borrowings. At December 31, 2024,2025, our shareholders’ equity was $5.9$9.1 billion.

Our common equity to assets ratio increased to 12.7%13.5% in 2024,2025, compared to 12.3%12.7% in 2023.2024. The improvement during 20242025 was due to an increase in shareholders’ equity of 6.5%,53.8%, resulting from the items noted above, while total assets hadincreased a moderate increase of 3.3%.44.9%.

We have a trading portfolio associated with our Correspondent Bank Division and its subsidiary SouthState|Duncan-Williams. Securities. This portfolio is carried at fair value and realized and unrealized gains and losses are included in trading securities revenue, a component of Correspondent Banking and Capital Markets Income in our Consolidated Statements of Income. Securities purchased for this portfolio have primarily been municipal bonds, treasuries, mortgage-backed agency securities, and SBA securities, which are held for short periods of time and totaled $102.9$110.2 million and $31.3$102.9 million at December 31, 20242025 and 2023,2024, respectively.

At December 31, 2024,2025, the unrealized net loss of the available for sale investment securities portfolio was $808.6$382.8 million, or 15.8%,5.7%, below its amortized cost basis. Comparable valuations at December 31, 20232024 reflected an unrealized net loss of the available for sale investment portfolio of $776.6$808.6 million, or 14.0%,15.8%, below its amortized cost basis. The decrease in fairthe valueunrealized innet loss of the available for sale investment portfolio at December 31, 20242025 compared to December 31, 20232024 was attributabledue to principalthe paydowns,securities maturitiesrestructuring executed during the first quarter of 2025 and callsthe asimpact wellof as a higherlower interest raterates environment.on the value of the securities portfolio. At December 31, 2025, the unrealized net loss of the held to maturity investment securities portfolio was $315.2 million, or 15.4%, below its amortized cost basis. At December 31, 2024, the unrealized net loss of the held to maturity investment securities portfolio was $420.1 million, or 18.6%, below its amortized cost basis. At December 31, 2023, the unrealized net loss of the held to maturity investment securities portfolio was $402.7 million, or 16.2%, below its amortized cost basis.

As described above, the Company elected to classify some of its securities purchased as held to maturity at the time of purchase. The securities designated as held to maturity are securities the Company does not intend to sell and expects to hold through maturity. The securities consist of $147.3$132.9 million of agency securities, $2.1$1.9 billion of residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises and $49.8$46.1 million of Small Business Administration loan-backed securities. The following are highlights of our held to maturity portfolio:

At December 31, 2024,2025, we had 1,2141,073 investment securities (including both available for sale and held to maturity) in an unrealized loss position, which totaled $1.3$737.2 billion,million, compared to 1,2321,214 investment securities in an unrealized loss position, which totaled $1.2$1.3 billion at December 31, 2023.2024. See Note 1—Summary of Significant Accounting Policies and Note 3—Investment Securities in the consolidated financial statements for additional information.

Management evaluates securities for impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For securities designated as heldavailable for sale, credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component would be recognized through the provision for credit losses. Consideration is given to (1) the financial condition and near-term prospects of the issuer including looking at default and delinquency rates, (2) the outlook for receiving the contractual cash flows of the investments, (3) the extent to which the fair value has been less than cost, (4) our intent to hold the security as well as there being no requirement to sell the security, (5) the anticipated outlook for changes in the general level of interest rates, (6) credit ratings, (7) third-party guarantees, and (8) collateral values. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the investments. The Company performed an analysis that determined that the following securities have a zero expected credit loss: U.S. Treasury Securities, Agency-Backed Securities including securities issued by Ginnie Mae, Fannie Mae, FHLB, FFCB and SBA. All of the U.S. Treasury and Agency-Backed Securities have the full faith and credit backing of the United States Government or the credit backing of one of its agencies. Municipal securities and all other securities that do not have a zero expected credit loss are evaluated quarterly to determine whether there is a credit loss associated with a decline in fair value. All debt securities in an unrealized loss position as of December 31, 20242025 continue to perform as scheduled and we do not believe there is a credit loss or a provision for credit losses is necessary. Also, as part of our evaluation of our intent and ability to hold investments, we consider our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. We do not currently intend to sell the securities within the portfolioportfolio, and it is not more-likely-than-not that we will be required to sell the debt securities.

Also, as part of our evaluation of our intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, we consider our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. We do not currently intend to sell the securities within the portfolioportfolio, and it is not more-likely-than-not that we will be required to sell the debt securities. Changes in the above considerations may affect our intent in the future. See Note 1—Summary of Significant Account Policies for further discussion.

The balance of loans held for sale increased $228.5$65.9 million from December 31, 2023,2024, to $279.4$345.3 million on December 31, 2024.2025. Loans held for sale at December 31, 2025 and 2024 consisted of mortgage and SBA loans held for salesale. whileThe atincrease December 31, 2023,in loans held for sale consistedin only2025 ofwas mortgagedriven by an increase in SBA loans held for sale.sale as this line of business became more established in 2025.

During the third quarter of 2024, the Company began purchasing the guaranteed portions of SBA loans from third-party originators with the intent to aggregate the guaranteed portion of the SBA loans into pools with similar characteristics to create a security representing an interest in those pools through the SBA’s fiscal transfer agent. This new activity in SBA loans held for sale wastotaled the$283.9 mainmillion reasonat December 31, 2025, a $102.6 million increase from $181.3 million at December 31, 2024. See Note – 28 – SBA Loans Held for the significant increase in loans heldSale for salemore during 2024.information.

Mortgage loans held for sale totaled $61.4 million at December 31, 2025, a decrease from $98.1 million at December 31, 2024, an increase from $50.9 million at December 31, 2023.2024. Total mortgage production was $1.9$2.5 billion in 2024.2025. This compares to $2.2$1.9 billion 2023.2024. Mortgage production declinedincreased from 2023 and remained flat in 2024 as average mortgage rates have continueddeclined toin remain2025 highalong andwith housingthe inventoryeffects hasof remainedadding low.new markets with the acquisition of Independent on January 1, 2025. The percentage of mortgage production sold into the secondary market increaseddecreased in 20242025 to 58%37% from 40%58% in 2023.2024. The allocation of mortgage production between portfolio and secondary market depends on the Company’s liquidity, market spreads and rate changes during each period and will fluctuate over time.

Interest income from loans held for sale increased $4.7$12.1 million, or 228.4%180.3%, during 20242025 to $18.8 million from $6.7 million from $2.0 million in 2023.2024. This increase was due to an increase in the average balance of loans held for sale of $69.1$162.1 millionmillion, or 224.8%,162.4%, from $30.7 million for the year ended December 31, 2023 to $99.9 million for the year ended December 31, 2024.2024 to $262.0 million for the year ended December 31, 2025. Of this increase, $35.2$158.0 million was related to SBA loans held for sale and $33.9$4.2 million was related to mortgage loans held for sale. The yield on loans held for sale remained fairly stableincreased in 20242025 compared to 2023.2024. For year ended 20242025 the yield on loans held for sale was 6.71%7.17% compared to 6.63%6.71% in 2023.2024. This increase was driven by the higher average balance held of SBA loans held for sale in 2025 which have higher yields.

Our loan portfolio remains our largest category of interest-earning assets. At December 31, 2024,2025, total loans, excluding loans held for sale loans,sale, were $33.9$48.6 billion, which was an overall increase of $1.5$14.7 billion, or 4.7%,43.3%, from the balance at the end of 2023.2024. Non-acquired loan growth was $2.9$5.0 billion, or 11.0%16.9% for 2024,2025, driven by organic growth and renewals of acquired loans moved to our non-acquired loan portfolio. The loan growth was made up of a 22.2%28.9% increase in commercial and industrial loans, a 12.5%19.6% increase in commercial owner-occupied real estate loans, a 12.1% increase in consumer real estate loans, and a 7.4% increase in non-owner occupied real estate loans (including construction and land development loans)., a 12.6% increase in owner-occupied real estate loans, an 11.8% increase in consumer real estate loans and a 8.1% increase in other income producing property loans. Total acquired loans decreasedincreased by $1.4$9.7 billion, or 23.8%215.9% from the balance at the end of 2023.2024. TheThis decreaseincrease in acquired loans was due to the addition of $13.1 billion from the acquisition of Independent, net of offsets from paydowns and payoffs in both the PCD and Non-PCD loan categories along with renewals of acquired loans that were moved to our non-acquired loan portfolio. The loan growth was made up of a 333.2% increase in commercial non-owner occupied real estate loans (including construction and land development loans), a 433.0% increase in other income producing property loans, a 222.2% increase in commercial and industrial loans, a 109.4% increase in owner-occupied real estate loans, and a 101.3% increase in consumer real estate loans.

Total loan interest income was $1.9$3.0 billion in 2024,2025, an increase of $204.8$1.2 million,billion, or 11.9%,55.9%, compared to $1.7$1.9 billion in 2023.2024. This increase was due to both an increase in the average balance and an increase in the yield on the total loan portfolio in 2024.2025. The overall average balance in the loan portfolio increased $1.7$14.3 billion in 2024.2025. The average balance increased on the non-acquired loan portfolio increased $3.1 billion, offset by a $1.4 billion decline inand the acquired loan portfolio.portfolio $3.5 billion and $10.8 billion, respectively. The growth in the non-acquired loan portfolio average balance was due to normal organic growth and renewals of acquired loans. The declinegrowth in the acquired loan portfolio was due to the merger with Independent, net of paydowns and payoffs, along with renewals of acquired loans that were moved to our non-acquired loan portfolio. The overall yield on the loan portfolio increased by 33124 basis points in 2024.2025. This increase was due to a 43-basis2-basis point increasedecrease in the yield on the non-acquired portfolio and a 10-basis126-basis point increase in the yield on the acquired portfolio. The yield on the non-acquired loan portfolio increaseddecreased from 5.29% in 2023 to 5.72% in 20242024, to 5.70% in 2025 and the yield on the acquired loan portfolio increased from 6.10% in 2023 to 6.20% in 2024.2024, to 7.46% in 2025. The overall increase in the yieldsyield on the non-acquired loan portfolio and the acquired loan portfolio was primarily due to theadditional repricingloan ofaccretion loanson inacquired aIndependent higher interest rate environment for most of 2024 reflecting the rise in interest rates starting in March 2022 thru August 2023, then remaining unchanged until September 2024 when the rates began to decline.loans.

Total commercial non-owner-occupied loans of $9.4$16.7 billion, approximately 27.7%34.3% of the total loans held for investment, was the largest category of the loan portfolio as of December 31, 2024.2025. As of December 31, 2024,2025, approximately 95%94% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $9.4$16.7 billion, approximately $1.2$1.8 billion, or 4% of the total loans, represented our office segment. Approximately 95%96% of the office segment was located in the Company’s footprint and approximately 9% was located within the metropolitan or central business district. The weighted average Debt Service Coverage (“DSC”) was 1.62x and the loan-to-value was 57%. For additional discussion around classified commercial non-owner-occupied loans, refer to the “Nonperforming Assets” section in this MD&A.footprint.

Total non-acquired nonperforming loans were $145.3$165.0 million, or 0.49%0.48% of total non-acquired loans, an increase of approximately $23.5$19.7 million, or 19.3%,13.6%, from December 31, 2023.2024. The increase in nonperforming loans was driven primarily by an increase in consumer nonaccrual loans of $21.1$23.3 million, anoffset increaseby a decrease in commercial nonaccrual loans of $3.3$497,000, milliona and an increasedecrease in modified loans withto borrowers with financial difficulties on nonaccrual of $7.1$2.8 million,million offset byand a decrease in accruing loans past due 90 days or more of $8.0 million.$296,000. The increase in consumer nonaccrual loans year over year was primarily in first mortgage 1-4 family owner occupied loans. Acquired nonperforming loans were $65.3$137.1 million, or 1.45%0.96% of total acquired loans, an increase of $4.4,$71.8, or 7.2%109.9% from December 31, 2023.2024. The increase in acquired nonperforming loans was mainly driven by an increase in restructuredcommercial nonaccrual loans of $5.6$68.7 million, offsetan byincrease ain decreaseconsumer nonaccrual loans of $1.8 million, an increase in accruing loans past due 90 days or more of $1.2$1.9 million.million, offset by a decrease in restructured loans of $612,000. The majority of the increase in acquired commercial nonaccrual loans was due to the addition of $75.1 million in loans acquired in the merger with Independent, offset by a $6.4 million decline in legacy commercial nonaccrual loans. The $75.1 million in nonaccrual loans acquired were primarily commercial real estate and commercial and industrial loans.

The top ten nonaccrual loans at December 31, 20242025 totaled $69.3$96.1 million and consisted of threefour loans located in SouthTexas, Carolina, threetwo in North Carolina, threeone in Alabama, one in Florida, one in Georgia, and one in Florida.South Carolina. These loans comprise 33.4%32.3% of total nonaccrual loans at December 31, 2024,2025, with around 34%60% being real estate collateral dependent and the other 66%40% being non real estate. We currently hold a specific reserve against fourthree of these ten loans, totaling $18.5$15.9 million. The remaining sixseven loans do not carry a specific reserve due to carrying balances being below current collateral values.

As of December 31, 2024,2025, the Bank had a total of $36.1$195.0 million loans to borrowers experiencing financial difficulty. Of the $36.1$195.0 million, $29.3$189.5 million loans were currentcurrent, and $6.8$4.5 million loans were 30 to 89 days past due and $925,000 were 90 days past due.

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, in this Annual Report on Form 10-K for further detailed descriptions of our estimation process and methodology related to the ACL on loans.

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 the unemployment rate, gross domestic product,product the path of interest rates,growth, monetary and fiscal policy, inflation, thesupply residentialchain and commercial real estate markets,issues and global events like the Russian/Ukraine conflict and unrest in the middle east, and changes in global trade policy, as well as the volatility and magnitude of changes within those scenarios quarter over quarterquarter, 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 considersto adjust the alignmentselection of forecast assumptionsscenarios and weightings in relation to its economic outlook on a quarterly basis,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 averagemean lossof ratehistorical factors within four quarters using a straight-line approach. The Company generally uses an eight-quarter forecast and a four-quarter reversion period.

InThere spiteare ofseveral headwinds that continue to weigh on the rapideconomy, interest rate hikes experienced cycle-to-date,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. As of December 31, 2024,2025, management selected a baseline weighting of 40%, a 30%25% weighting for an upside scenario and a 30%35% weighting for the more severe scenario. The scenario weightings were unchanged from the prior quarter. Scenario weightings are generally expected to remain stable but are reviewed on a quarterly basis. TheWeightings scenariowere weightingsunchanged from the prior quarter and reflect a broadly neutral outlook with continued recognition of downside risks and elevated uncertainty in the economic forecast from persistentflat levelsjob of inflation and high interest rates. While employment figures still show resilience and actual loan losses remain at low levels, continued projected borrower weakness related togrowth, high interest rates, uncertainty,lack of clarity on trade policy impacts, and lingeringtightening chancescredit ofconditions. anImproved economicGDP downturn continue to moderate optimism in the path of the forecastgrowth and employment resilience kept expected losses mostlylargely flat. As a result, the Company recorded provision for credit losses of $16.0 million and net charge-offs of $18.2 million during 2024.stable.

At December 31, 2024,2025, the Company had a reserve on unfunded commitments of $45.3$69.6 million, which was recorded as a liability on the Consolidated Balance Sheet, compared to $56.3$45.3 million at December 31, 2023.2024. During the three and twelve months ended December 31, 2024,2025, the Company recorded an increase in the reserve for unfunded commitments of $1.1 million and $24.3 million, respectively. Of the $24.3 million of provision for credit losses recorded for unfunded commitments during the twelve months ended December 31, 2025, $12.1 million was related to the initial provision for unfunded commitments acquired from Independent and $12.2 million was for all other unfunded commitments. For the prior comparative period, the Company recorded an increase in the reserve for unfunded commitments of $3.8 million and a release for $11.0 million, respectively. For the prior comparative period, the Company recorded a release in the reserve for unfunded commitments of $6.0 million and $10.9 million, respectively. The provision for credit losses for unfunded commitments is based on the growth in unfunded loan commitments, production mix, and current forecast scenarios applied to our modeling to adequately capture growing economic recessionary risks. This amount was recorded in Provision (Recovery) 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 financialsfinancial assetassets during 2024.2025.

The ACL provides 2.211.94 times coverage of nonperforming loans at December 31, 2024.2025. Net charge offs to total average loans during the year ended December 31, 20242025 were 0.06%,0.23%, compared to 0.08%0.06% during the year ended December 31, 2023.2024. 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 twelve months ended December 31, 2025 were 0.11%. The ACL, including reserve for unfunded commitments, as a percentage of loans were 1.51%1.35% and 1.58%,1.51%, respectively, as of December 31, 20242025 and 2023.2024.

The following table provides the allocation, by segment, for expected credit losses for the year ended December 31, 2024.2025. While non-owner occupied CRE is the largest segment of our loan portfolio, the risk profile of the non-owner occupied CRE portfolio remains low and stable. We have a granular loan portfolio where the average loan size of the non-owner occupied CRE portfolio is less than $5$2.5 million. The weighted average loan to value for the non-owner occupied CRE portfolio was less than 60% as of December 31, 2024. Loans for the commercial office space, which are included in the non-owner occupied CRE portfolio, represent approximately 4% of the total outstanding portfolio with an average loan size of less than $2 million as of December 31, 2024.2025. Over 95%94% of these office spaces are located in the Company’s southeast footprint, of which approximately 83%72% mature in 20262027 or later.

The following table presents a summary of the changes in the ACL,ACL for the years ended December 31, 2024,2025, 20232024 and 20222023:

Our ongoing capital requirements have been met primarily through retained earnings, less the payment of cash dividends. As of December 31, 2024,2025, shareholders’ equity was $5.9$9.1 billion, aan decreaseincrease of $357.3$3.2 million,billion, or 6.5%,53.8%, compared to the balance at December 31, 2023.2024. The change from year-end 20232024 was mainly attributable to the issuance of $2.5 billion in stock related to the acquisition of Independent, net income of $534.8$798.7 million, an increase in the market value of securities available for sale, net of tax of $323.6 million and the recognition of equity based compensation of $28.0$37.0 million. These increases were offset by dividends paid on common shares of $161.6 million, a decrease in the market value of securities available for sale, net of tax, of $24.3 million recorded through AOCI, cumulative adjustment to retained earnings pursuant to the adoptions of ASU 2023-02 of $10.2$230.2 million and common stock repurchased under our stock repurchase plan and equity plans of $16.8$235.8 million.

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 MarchJune 31,30, 2026, are not necessarily indicative of the results for the year ending December 31, 20262026, or any future period.

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.Association, a national banking association.

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,There ourhave significantbeen accountingno material changes to those 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 forduring the yearsix months ended DecemberJune 31,30, 2025.2026, except as described below.

We reported consolidated net income of $225.8$230.0 million, or diluted earnings per share (“EPS”) of $2.28,$2.35, for the firstsecond quarter of 2026 as compared to consolidated net income of $89.1$215.2 million, or diluted EPS of $0.87,$2.11, in the comparable period of 2025, a 153.5%6.9% increase in consolidated net income and a 162.1%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 $136.7$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:

Our quarterly efficiency ratio improved to 51.1%50.0% in the firstsecond quarter of 2026 compared to 61.0%52.7% in the firstsecond quarter of 2025. The improvement in the efficiency ratio compared to the firstsecond quarter of 2025 was the result of a 12.2%4.1% decrease in noninterest expense (excluding amortization of intangibles) and a 4.9%1.2% increase in the total tax-equivalent net interest income and noninterest income. The decrease in noninterest expense was mainly due to thea 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 $18.1$7.2 million, aan decreaseincrease in interestservice expensecharges and fees on depositsdeposit accounts of $7.4$3.7 million and an increase in correspondent banking and capital markets income of $11.9$7.0 million.

Basic and diluted EPS were $2.29$2.36 and $2.28,$2.35, respectively, for the firstsecond quarter of 2026, compared to $0.88$2.12 and $0.87,$2.11, respectively, for the firstsecond quarter of 2025. The increase in basic and diluted EPS was due to a 153.5%6.9% increase in net income in the firstsecond quarter of 2026 compared to the same period in 2025 along withand a decrease in average basic common shares of 2.8%.4.1%. The increase in net income in the firstsecond quarter of 2026 was mainly attributable to acquisitionan relatedincrease expensesin resultingnon-interest from the Independent acquisition during the first quarterincome of 2025. These expenses included the initial provision for credit losses on Non-PCD loan portfolio and unfunded commitments of $92.1$9.9 million and thea $66.5$17.3 million decline in mergernon-interest expenses.expense. The decrease in average basic common shares was mainly due to the Company repurchasing 3.9approximately 4.9 million common shares through the Company’s stock buyback plan insince theJune open30, market over the last 12 months.2025.

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 firstsecond quarter of 2025, the Federal Reserve reduced the target federal funds rate by a total of 75 basis points.points, These rate cuts loweredlowering the target federal funds rate range to 3.50% to 3.75% as of MarchJune 31,30, 2026. Accordingly, interest rate conditions during the firstsecond quarter of 2026 were lower when compared to the firstsecond quarter of 2025, impacting both asset yields and funding costs. Some key highlights are outlined below:

The tabletables below summarizessummarize the analysis of changes in interest income and interest expense for the quarterthree and six months ended MarchJune 31,30, 20262026, and 2025 and net interest margin on a tax equivalent basis.basis:

Interest earned on loans held for investment decreased $3.1slightly million to $717.8 million induring the quarterthree and six months ended MarchJune 31,30, 20262026, compared tofrom the samecomparable periodperiods 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 MarchJune 31,30, 20262026, are outlined below:

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 firstsecond quarter of 2026 compared to the same period in 2025, while the cost of interest-bearing liabilities decreased, reflecting lower market interest rates andacross most deposit repricingand duringborrowing the period.categories. Some key highlights for the quarter ended MarchJune 31,30, 20262026, compared to the same period in 2025 include:

Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. Average noninterest-bearing deposits decreased $134.1$122.1 million, or 1.0%,0.9%, to $13.4$13.5 billion in the firstsecond quarter of 2026 compared to $13.5$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.

Noninterest income provides us with additional revenues that are significant sources of income. For the three months ended MarchJune 31,30, 20262026, and 2025, noninterest income comprised 15.1%14.4%, and 13.7%,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.

Noninterest income increased by $14.0 million, or 16.3%, during the firstsecond quarter of 2026 compared to the same period in 2025. This quarterly change in total noninterest income resulted from the following:

Noninterest expense decreased by $49.3$17.3 million, or 12.1%,4.6%, in the firstsecond quarter of 2026 compared to the same period in 2025. The quarterly decrease in total noninterest expense2025, primarily resulted from the following expenses:

Our effective tax rate was 22.50%23.07% for the three months ended MarchJune 31,30, 20262026, compared to 26.53%23.73% for the three months ended MarchJune 31,30, 2025. The decrease in the effective rate for the quarter, when compared to the same period in the prior year, iswas driven primarily by higher non-deductible executive compensationcompensation, as well as non-deductible merger expenses 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. 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 firstsecond quarter of 2026 compared to the samesecond periodquarter inof 2025.

As discussed in Note 2221 — 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.

Pre-Provision Net Revenue, Pre-Provision Net Revenue Per Share and Tax Equivalent Net Interest Margin

Our total assets increased by approximately $781.8$1.7 million,billion, or 1.2%,2.5%, from December 31, 20252025, to June 30, 2026, to approximately $68.0$68.9 billion at March 31, 2026.billion. Within total assets, cash and cash equivalents decreased by $305.4$822.2 million, or 9.6%,25.9%, and net loans increased by$2.2 $898.3 millionbillion, or 1.8%4.7%, andwhile investment securities increased by $193.3$205.7 million, or 2.2%2.4%, during the period. Within total liabilities, deposits grew $729.9$1.2 billion, or 2.2%, and federal funds purchased and securities sold under agreements to repurchase decreased by $48.7 million, or 1.3%.7.9%. Total corporate and subordinated debentures and other borrowings increased by $300.2 million, or 43.1%. Total shareholder’s equity decreasedincreased by $28.2$72.4 million, or 0.3%.0.8%. The decrease in cash and cash equivalents was due to the funding of investment securities and loan growth in the first quarterhalf of 2026. AllThe categoriesincrease ofin deposits increasedwas duringmainly therelated firstto quarteran of$871.8 2026million exceptincrease forin interest-bearing checking accounts and a $501.2 million increase in time deposits. The increase in loans was throughdriven by organic growth. Our loan to deposit ratio was 89%90% and 88% at MarchJune 31,30, 2026 and December 31, 2025, respectively, while our percentage of non-interest-bearingnoninterest-bearing deposit accounts to total deposits was 24% at both MarchJune 31,30, 20262026, and December 31, 2025.

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 MarchJune 31,30, 2026, investment securities totaled $8.9 billion, compared to $8.7 billion at December 31, 2025, an increase of $193.3$205.7 million, or 2.2%.2.4%. DuringThe Bank purchased $2.4 billion of investment securities during the threesix months ended MarchJune 31,30, 2026, we purchased $2.0 billion in available for sale investment securities2026 mostly from reinvesting funds provided by the paydowns, maturities and calls of investment securities. ThereThe increases in investment securities were nopartially salesoffset ofby availablereductions for sale or held to maturity securities during the quarter. The Company hadfrom maturities, redemptions,calls, calls,sales and paydowns of investment securities totaling $1.7$2.1 billion and the net amortization of premiums of $2.6$5.6 million.million during the six months ended June 30, 2026. At MarchJune 31,30, 2026, approximately 73.3%74.0% of the investment portfolio was classified as available for sale, approximately 22.5%21.9% was classified as held to maturity and 4.2%approximately 4.1% was classified as other investments.

At MarchJune 31,30, 2026, the unrealized net losslosses of the available for sale securities portfolio was $438.8$418.3 million, or 6.3%,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 MarchJune 31,30, 2026, the unrealized net loss of the held to maturity securities portfolio was $323.1$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. 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.

At MarchJune 31,30, 2026, we had 1,1351,129 investment securities,securities including both available for sale and held to maturitymaturity, in an unrealized loss position, which totaled $779.0$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 62,56 securities, while the total dollar amount of the unrealized loss increased by$41.8by million$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.

All investment securities in an unrealized loss position as of MarchJune 31,30, 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. 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.

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.

The following table presents a summary of our investment portfolio by contractual maturity and related yield as of MarchJune 31,30, 2026:

Approximately 86.5%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 13.3%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, Double A or Triple Ahigher category.

As of MarchJune 31,30, 2026, the portfolio had an effective duration of 4.654.63 years. We continue to monitor duration risk and seek to align actual duration withwithin theour targetrisk range.appetite.

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 MarchJune 31,30, 2026, we determined that there was no impairment on our other investment securities. As of MarchJune 31,30, 2026, other investment securities represented approximately $370.9$367.0 million, or 0.55%0.53% of total assets, and primarily consists of FHLB and FRB stock which totals to approximately $252.5$266.7 million, or 0.37%0.39% of total assets. There were no gains or losses on the sales of these securities for three and six months ended MarchJune 31,30, 20262026, and 2025, respectively.

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$191.1 million and $110.2 million at MarchJune 31,30, 2026, and December 31, 2025.

The balance of loans held for sale decreasedincreased $17.4$60.1 million from December 31, 20252025, to $327.9$405.4 million aton MarchJune 31,30, 2026. Loans held for sale at MarchJune 31,30, 2026,2026 and December 31, 2025 consisted of mortgage and SBA loans held for sale.

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$336.7 million at MarchJune 31,30, 2026 compared to $283.9 million at December 31, 2025. See Note 1918 —– SBA Loans Held for Sale for more information.

Mortgage loans held for sale totaled $48.1$68.7 million at MarchJune 31,30, 2026, aan decreaseincrease fromof $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. ThisThe comparesincrease in production from the prior quarter was due to $741both millionseasonal timing as there is normally more activity in home sales in the fourth quarter of 2025spring and $459summer millionalong with Company production growth initiatives in the first quarter of 2025. Mortgage production has remained relatively stable in the first quarter of 2026 asand mortgageexpanding ratesits declinedrevenue 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.producers. The percentage of mortgage production sold into the secondary market remainedincreased flat at 28% forin the firstsecond quarter of 2026 compared to the fourth quarter of 2025 and declined33% from 56%28% in the first quarter of 2025.2026. 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.

Total loans, net of deferred loan costs and fees (excluding mortgage loans held for sale), increased during the first six months of 2026 by $898.3$2.2 millionbillion, or 9.3% annualized, to $49.5$50.8 billion at MarchJune 31,30, 2026. Our non-acquired loan portfolio increased by $1.6$3.9 billion, or 18.6%22.7% annualized, mainly driven by organic growth and the migrationrenewals of loans from acquired loans asthat theyare renew.moved to our non-acquired loan portfolio. 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 othercommercial incomeowner-occupied producingreal estate loans led the way with $654.5$1.3 million, $401.0$676.9 million, $174.7$620.4 million, $147.4 million, $130.4 million, $37.3$605.2 million and $8.2$500.7 million in year-to-date loan growth, respectively, or 26.7%,27.0%, 22.5%,18.8%, 13.9%,17.2%, 8.2%, 28.4%, 9.4%65.6% and 6.5%19.8% annualized growth, respectively. The acquired loan portfolio decreased by $677.1$1.6 million.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 declineddecreased were commercial non-owner-occupied loans, commercial and industrial loans, construction and land development loans, commercial owner-occupied real estate loans, consumerconstruction owner-occupiedand land development loans and otherconsumer income producing propertyowner-occupied loans which decreased by $208.5$501.9 million, $196.5$479.8 million, $85.8$225.3 million, $80.2 million, $48.0$170.6 million and $39.2$113.8 million, respectively, during the quarter.first six months of 2026. Acquired loans as a percentage of total loans decreased to 27.4%24.7% and non-acquired loans as a percentage of the overall portfolio increased to 72.6%75.3% at MarchJune 31,30, 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.