SouthState Bank Corp: Form 10-Q for the period ended Sep 30, 2025

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, 2024. Results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results for the year ending December 31, 2025, 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, a national banking association.

Overview

SouthState Bank Corporation is a financial holding company headquartered in Winter Haven, Florida. During the third quarter of 2025, the Company was redomiciled to the state of Florida through the merger of SouthState Corporation, a South Carolina corporation, with and into SouthState Bank Corporation, a Florida corporation wholly owned by SouthState Corporation prior to such merger and adopted its current name. We provide a wide range of banking services and products to our customers through our Bank. The Bank operates SouthState|DuncanWilliams Securities Corp. (“SouthState|DuncanWilliams”), a registered broker-dealer headquartered in Memphis, Tennessee that serves primarily institutional clients across the U.S. in the fixed income business. The Bank also operates SouthState Advisory, Inc., a wholly-owned registered investment advisor, and Private Capital Management LLC, also a wholly-owned registered investment advisor which it acquired through the Independent acquisition completed on January 1, 2025. The Bank, through its Corporate Billing Division, provides factoring, invoicing, collection and accounts receivable management services to transportation companies and automotive parts and service providers nationwide. In 2023, the Bank formed SSB First Street Corporation, an investment subsidiary headquartered in Wilmington, Delaware, to hold tax-exempt municipal investment securities as part of the Bank’s investment portfolio. The holding company also owns SSB Insurance Corp., a captive insurance subsidiary pursuant to Section 831(b) of the U.S. Tax Code.

At September 30, 2025, we had approximately $66.0 billion in assets and 6,259 full-time equivalent employees. Through our Bank branches, ATMs and online banking platforms, we provide our customers with a wide range of financial products and services, through an eight (8) state footprint in Alabama, Colorado, Florida, Georgia, North Carolina, South Carolina, Texas, and Virginia. 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, Memphis, Tennessee, Walnut Creek, California, and Birmingham, Alabama. This division’s primary revenue generating activities are related to its capital markets division, which includes commissions earned on fixed income security sales, fees from hedging services, loan brokerage fees and consulting fees for services related to these activities; and its correspondent banking division, which includes spread income earned on correspondent bank deposits (i.e., federal funds purchased) and correspondent bank checking account deposits and fees from safe-keeping activities, bond accounting services for correspondents, asset/liability consulting related activities, international wires, and other clearing and corporate checking account services.

We have pursued, and continue to pursue, a growth strategy that focuses on organic growth, supplemented by acquisitions of select financial institutions, or branches in certain market areas.

The following discussion describes our results of operations for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, and also analyzes our financial condition as of September 30, 2025, as compared to December 31, 2024. Like most financial institutions, we derive most of our income from interest we receive on our loans and investments. Our primary source of funds for making these loans and investments is our deposits, on which we may pay interest. Consequently, one of the key measures of our success is the amount of our net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our interest-bearing liabilities, such as deposits. Another key measure is the spread between the yield we earn on these interest-earning assets and the rate we pay on our interest-bearing liabilities.

Of course, there are risks inherent in all loans, as such, we maintain an allowance for credit losses, otherwise referred to herein as ACL, to absorb probable losses on existing loans that may become uncollectible. We establish and maintain this allowance by charging a provision for credit losses against our operating earnings. In the following discussion, we have included a detailed discussion of this process.

In addition to earning interest on our loans and investments, we earn income through fees and other services we charge to our customers. We incur costs in addition to interest expense on deposits and other borrowings, the largest of which is salaries and employee benefits. We describe the various components of this noninterest income and noninterest expense in the following discussion.

The following sections also identify significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements. We encourage you to read this discussion and analysis in conjunction with the financial statements and the related notes and the other statistical information also included in this report.

Recent Events

Completion of Redomicile

On August 31, 2025, the Company completed its previously announced redomicile of SouthState Corporation, a South Carolina corporation, to the State of Florida, through the merger of SouthState Corporation with and into SouthState Bank Corporation, a Florida corporation wholly owned by SouthState Corporation prior to such merger.

Governmental and Regulatory Environment

It is uncertain how the rapid changes initiated by the Trump Administration will impact our business going forward. These include the impact of tariffs, immigration reform, and changes at the agencies that regulate us, including the modification, rescission, withdrawal or changes to the approach and enforcement of, rules and guidance relating to us.

In October 2024, the CFPB finalized a rule to implement Section 1033 of the Dodd-Frank Act, which would require certain entities, including the Company and the Bank, to, among other things, make available to a consumer, upon request, information in its control or possession concerning the consumer financial product or service that the consumer obtained from that entity. In general, the rule also requires, among other things, data providers holding a consumer account, such as the Bank, to establish a developer interface satisfying certain data security specifications and other standards, through which the data provider can receive requests for, and provide, specific types of data covered by the rule in electronic, usable form to authorized third parties, including data aggregators. Under the rule, data providers are prohibited from, among other things, charging consumers or third parties fees for processing these consumer data requests. The rule also places certain data security, authorization and other obligations on third parties accessing covered data from data providers, which could include the Company and the Bank when acting in certain capacities. The rule requires third parties to limit their collection, use, and retention of the data received to only what is reasonably necessary to provide the consumers’ requested product or service. The compliance date for a depository institution data provider that holds at least $10 billion in total assets but less than $250 billion in total assets is April 1, 2027; however, following the issuance of the rule, a lawsuit was filed to challenge the rule in court. In May 2025, the CFPB filed a motion for summary judgment in the litigation, in which the CFPB stated that it had concluded that the final rule exceeds the agency’s statutory authority. In July 2025, the CFPB filed a motion to stay the proceedings while it conducts a new rulemaking process, which was granted by the district court. In August 2025, the CFPB issued an advanced notice of proposed rulemaking to reconsider its final rule under Section 1033 of the Dodd-Frank Act.

Subordinated Debenture Issuance

On June 13, 2025, the Company issued $350.0 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2035. The subordinated notes initially bear interest at an initial rate of 7.00% per annum, commencing on June 13, 2025, until June 13, 2030, after which interest will be payable at a floating rate equal to SOFR plus 319 basis points. Interest is payable semi-annually during the fixed rate period and quarterly during the floating rate period, in arrears. The Company used the proceeds to redeem $405.0 million of the Company’s outstanding subordinated debentures in the third quarter of 2025 that had reached its call date and the end of its fixed rate period. After these redemptions, the Company has $525.0 million in outstanding principal of subordinated debentures as of September 30, 2025. See accompanying Note 21 — Borrowings to our consolidated financial statements.

Capital Management

On February 11, 2025, the Company received Federal Reserve Board’s supervisory nonobjection on the 2025 stock repurchase program (the “2025 Repurchase Program”), which was previously approved by the Board of Directors of the Company, contingent upon receipt of such supervisory nonobjection. The 2025 Repurchase Program authorizes the Company to repurchase up to 3,000,000 shares, or up to approximately three percent, of the Company’s outstanding shares of common stock as of January 2, 2025. See accompanying Note 22 — Stock Repurchase Program to our consolidated financial statements.

Sale-leaseback Transaction

On January 8, 2025, the Bank entered into an agreement for the purchase and sale of real property (the “Sale Agreement”) with entities affiliated with Blue Owl Real Estate Capital LLC (“Blue Owl”), providing for the sale to entities affiliated with Blue Owl of certain bank branch properties owned and operated by the Bank. The branch properties are located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. Pursuant to the Sale Agreement, the Bank, concurrently with the closing of the sale of the branches, entered into triple net lease agreements (the “Lease Agreements”) with entities affiliated with Blue Owl, pursuant to which the Bank will lease each of the Branches (the “Sale-leaseback Transaction”). The Company completed the Sale-leaseback Transaction on February 28, 2025. See accompanying Note 8 — Leases to our consolidated financial statements.

Independent Bank Group, Inc. (“Independent”) Merger

On January 1, 2025, the Company acquired Independent, a Texas-based corporation, the bank holding company for Independent Bank, in an all-stock transaction. Pursuant to the Agreement dated May 17, 2024, shareholders of Independent received 0.60 shares of the Company’s common stock in exchange for each share of Independent stock resulting in the Company issuing 24,858,731 shares of its common stock. In total, the purchase price for Independent was $2.5 billion. See accompanying Note 4 — Mergers and Acquisitions to our consolidated financial statements.

Critical Accounting Policies

Our consolidated financial statements are prepared based on the application of accounting policies in accordance with GAAP and follow general practices within the banking industry. Our financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions and judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues and expenses. Differences in the application of these policies could result in material changes in our consolidated financial position and consolidated results of operations and related disclosures. Understanding our accounting policies is fundamental to understanding our consolidated financial position and consolidated results of operations. Accordingly, our significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in Note 2 — Summary of Significant Accounting Policies and Note 3 — Recent Accounting and Regulatory Pronouncements of our consolidated financial statements in this Quarterly Report on Form 10-Q and in Note 1 — Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended December 31, 2024.

The following is a summary of our allowance for credit losses (“ACL”) critical accounting policy, which is highly dependent on estimates, assumptions and judgments.

Business Combinations

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

A purchased financial asset that does not qualify as a PCD asset is accounted for similar to an originated financial asset. Generally, this means that an entity recognizes the allowance for credit losses for non-PCD assets through net income at the time of acquisition. In addition, both the credit discount and non-credit discount or premium resulting from acquiring a pool of purchased financial assets that do not qualify as PCD assets shall be allocated to each individual asset. This combined discount or premium shall be accreted into interest income using the effective yield method.

For further discussion of our loan accounting and acquisitions, see Note 1 — Summary of Significant Accounting Policies, Note 2 — Mergers and Acquisitions, Note 4 — Loans and Note 5 — Allowance for Credit Losses to the audited consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2024.

Allowance for Credit Losses (ACL)

The ACL reflects management’s estimate of the portion of the amortized cost of loans and unfunded commitments that it does not expect to collect. Management has a methodology determining its ACL for loans held for investment and certain off-balance-sheet credit exposures. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the loan portfolio. The Company’s estimate of its ACL involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in a range of expected credit losses. It is possible that others, given the same information, may at any point in time reach a different reasonable conclusion. The Company’s ACL recorded on the balance sheet reflects management’s best estimate within the range of expected credit losses. The Company recognizes in net income the amount needed to adjust the ACL for management’s current estimate of expected credit losses. See Note 2 — Summary of Significant Accounting Policies for further detailed descriptions of our estimation process and methodology related to the ACL. See also Note 7 — Allowance for Credit Losses and “Allowance for Credit Losses (ACL) on Loans and Certain Off-Balance-Sheet Credit Exposures” in this MD&A.

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 $216 million. Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $127 million. The adverse scenario includes assumptions including, but not limited to, rising unemployment consistent with a recession, high levels of inflation and weakened consumer and business spending, elevated interest rates, tightening credit, widening Federal deficit, and exacerbated geopolitical and trade tensions. Conversely, the upside scenario includes assumptions such as a stronger domestic economy, swift resolution of international conflicts and strengthening global economy, more than full employment, reduced political tensions, and other favorable assumptions. This sensitivity analysis and related impact on the ACL is a hypothetical analysis and is not intended to represent management’s judgments at September 30, 2025.

Goodwill and Other Intangible Assets

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 September 30, 2025 and December 31, 2024, the balance of goodwill was $3.1 billion and $1.9 billion, respectively. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

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

We evaluated the carrying value of goodwill as of October 31, 2024, our annual test date, and determined that no impairment charge was necessary as the fair value of the entity exceeded the carrying value. We will continue to monitor the impact of current economic conditions and other events on the Company’s business, operating results, cash flows and financial condition. If the current economic conditions and other events were to deteriorate and our stock price falls below current levels for a prolonged period, we will have to reevaluate the impact on our financial condition and potential impairment of goodwill.

Core deposit intangibles and client list intangibles consist primarily of amortizing assets established during the acquisition of other banks. This includes whole bank acquisitions and the acquisition of certain assets and liabilities from other financial institutions. Core deposit intangibles represent the estimated value of long-term deposit relationships acquired in these transactions. Client list intangibles represent the value of long-term client relationships for the correspondent banking and wealth and trust management business. These costs are amortized over the estimated useful lives, such as deposit accounts in the case of core deposit intangible, on a method that we believe reasonably approximates the anticipated benefit stream from this intangible. The estimated useful lives are periodically reviewed for reasonableness.

Results of Operations

Overview

We reported consolidated net income of $246.6 million, or diluted earnings per share (“EPS”) of $2.42, for the third quarter of 2025 compared to consolidated net income of $143.2 million, or diluted EPS of $1.86, in the comparable period of 2024, a 72.3% increase in consolidated net income and a 30.1% increase in diluted EPS. During the nine months ended September 30, 2025, we reported consolidated net income of $550.9 million, or diluted EPS of $5.41, compared to consolidated net income of $390.6 million, or diluted EPS of $5.09, in the comparable period of 2024, a 41.0% increase in consolidated net income and a 6.3% increase in diluted EPS. The $103.5 million increase in consolidated net income for the third quarter of 2025 compared to the same period of 2024 was the net result of the following items:

• A $337.5 million increase in interest income, resulting from a $288.3 million increase in interest income from loans and loans held for sale, a $32.4 million increase in interest income from investment securities, and a $16.8 million increase in interest income on federal funds sold, securities purchased under agreement to resell and interest-bearing deposits. The increase in interest income from loans was due to a $14.4 billion increase in average balance of loans and loans held for sale along with a 61-basis point increase in yield. The increase in average balance was mainly due to the loans acquired in the Independent acquisition of $13.1 billion in the first quarter of 2025 along with the organic loan growth in 2024 and 2025. The increase in the loan yield was mainly due to the loan accretion recognized for the loan portfolio acquired from Independent. The increase in interest income from investments securities was due to a $1.5 billion increase in the average balance and a 107 basis point increase in the yield. The increase in the average balance in the investment portfolio was also due to the Independent acquisition and the increase in the yield was due to the effect of the investment bond restructuring completed in the first quarter of 2025. The increase in interest income on federal funds sold, securities purchased under agreements to resell and interest-bearing deposits was due to a $1.7 billion increase in the average balance;
• An $89.3 million increase in interest expense, which mainly resulted from a $79.4 million increase in interest expense from deposits, a $529,000 decrease in interest expense in federal funds purchased and securities sold under agreements to repurchase, and $10.5 million increase in interest in other borrowings. The increase in interest expense from deposits resulted from an increase in the average balance of interest-bearing deposits of $12.9 billion. The increase in the average balance was mainly due to $12.0 billion of interest-bearing deposits assumed from Independent in the first quarter of 2025. The average cost on interest-bearing deposits declined by 7 basis points in the current quarter compared to the third quarter in 2024. The increase in interest expense from corporate and subordinated debentures and other borrowings was due to an increase in the average balance of $363.7 million as the Company assumed $360.5 million in corporate and subordinated debentures from the Independent acquisition along with the Company issuing $350.0 million in new subordinated debentures in June 2025. These increases were partially offset by a reduction in the average balance of borrowings from the Federal Home Loan Bank of $219.6 million as the Company had no Federal Home Loan Bank borrowings in the third quarter of 2025. The Company also redeemed $405.0 million in subordinated debentures in the latter half of the third quarter of 2025;
• A $12.1 million increase in the provision for credit losses, as the Company recorded a provision for credit losses of $5.1 million in the third quarter of 2025 while releasing provision for credit losses of ($7.0) million in the third quarter of 2024. While a more stable forecast and higher quarterly charge offs contributed to a positive provision for credit losses during the third quarter of 2025, a reduction in construction unfunded commitments and improvement in macroeconomic drivers drove a release in provision for credit losses during the third quarter of 2024;
• An $24.2 million increase in noninterest income due primarily from an increase in correspondent banking and capital market income of $11.3 million, in trust and investment services income of $2.6 million, service charges on deposit accounts of $3.2 million, in debit, prepaid, ATM and merchant card related income of $5.4 million, mortgage banking income of $2.3 million and in bank owned life insurance income of $2.3 million. These increases were offset by a decline in other noninterest income of $726,000 and SBA income of $2.2 million. The increases in service charge on deposit account, debit, prepaid, ATM and merchant card related income, trust and investment services income and bank owned life insurance income were mainly due to the acquisition of Independent in the first quarter of 2025. The decline in SBA income was mainly attributable to lower production and loan sales. See Noninterest Income section on page 68 for further discussion;
• A $125.5 million increase in noninterest expense, which resulted primarily from an increase in salaries and employee benefits of $48.3 million, in merger, branch consolidation, severance-related, and other expense of $17.6 million, in amortization of intangibles of $18.1 million, in occupancy expense of $18.6 million, in information services expense of $5.7 million, in business development and staff related expense of $4.0 million and in other noninterest expense of $5.6 million. These increases were mainly due to expenses resulting from the Independent acquisition in the first quarter of 2025. OREO and loan related expense increased $4.1 million during the third quarter of 2025 compared to the same period in 2024 due mainly to write-downs of OREO of $5.1 million. See Noninterest Expense section on page 70 for further discussion; and
• Higher income tax provision of $31.4 million is mostly due to higher pretax book income between the two quarters. The Company recorded pretax book income of $321.4 million in the third quarter of 2025 compared to pretax book income of $186.5 million in the third quarter of 2024. Our effective tax rate was 23.25% for the three months ended September 30, 2025, compared to 23.24% for the three months ended September 30, 2024. See Income Tax Expense section on page 71 for further discussion.

Our quarterly efficiency ratio decreased to 49.9% in the third quarter of 2025 compared to 56.6% in the third quarter of 2024. The decrease in the efficiency ratio compared to the third quarter of 2024 was the result of a 63.9% increase in the total of tax-equivalent net interest income and noninterest income being greater than a 44.5% increase in noninterest expense (excluding amortization of intangibles). The overall increase in both tax-equivalent net interest income and noninterest income and noninterest expense was due to the acquisition of Independent in the first quarter of 2025. The higher increase in tax-equivalent net interest income and noninterest income was due to the $285.9 million increase in interest income related to loans held for investment, which was mainly attributable to loans acquired in the acquisition of Independent.

Basic and diluted EPS were $2.44 and $2.42, respectively, for the third quarter of 2025, compared to $1.88 and $1.86, respectively, for the third quarter of 2024. The increase in basic and diluted EPS was due to a 72.3% increase in net income in the third quarter of 2025 compared to the same period in 2024. The effects from the increase in net income were partially offset by an increase in average basic common shares of 32.7%. The increase in net income in the third quarter of 2025 was mainly attributable to an increase in net interest income of $248.2 million derived from the interest-earning assets and interest-bearing liabilities acquired from Independent in the first quarter of 2025. The increase in average basic common shares was mainly due to the issuance of approximately 24.9 million shares of common stock related to the acquisition of Independent.

Selected Figures and Ratios

(Dollars in thousands)

* Denotes a non-GAAP financial measure. The section titled “Reconciliation of GAAP to non-GAAP” below provides a table that reconciles GAAP measures to non-GAAP measures.

• For the three months ended September 30, 2025, the return on average assets increased compared to the same period in 2024. This increase was primarily due to the increase in net income of $103.5 million, or 72.3%, which was mainly due to an increase in net interest income of $248.2 million in the third quarter of 2025 attributable to the acquisition of Independent in the first quarter of 2025. The effects on the return on average assets from the increase in net income were partially offset by an increase in average assets of 43.6% for the three months ended September 30, 2025 compared to the same period in 2024. This increase was mainly due to the $17.0 billion in assets acquired in the acquisition of Independent in the first quarter of 2025. For the nine months ended September 30, 2025, the return on average assets declined slightly as average assets increased 42.9% while net income increased by 41.0% compared to the same period in 2024. The lower increase in net income was due to costs associated with the acquisition of Independent including the initial provision for credit losses for Non-PCD loans and unfunded commitments of $92.1 million and a $99.7 million increase in merger, branch consolidation, severance-related, and other expense during the current year compared to the comparable period in 2024.
• For the three months ended September 30, 2025, the return on average equity and the return on average tangible equity increased compared to the same period in 2024. This increase was primarily due to higher net income of 72.3% offset by the effects from an increase in average equity of 54.3% and in average tangible equity of 42.7%. The increase in net income was mainly attributable to higher net interest income resulting from the acquisition of Independent in the first quarter of 2025. The higher average equity and average tangible equity was mainly attributable to common stock issued in the acquisition of Independent. For the nine months ended September 30, 2025, the return on average equity decreased due to a 54.3% increase in average equity while net income increased 41.0%. The increase in net income was lower than the increase in equity for the nine months ended September 30, 2025 due to the initial provision for credit losses and merger related expenses recorded during the first quarter of 2025 for the acquisition of Independent.
• The equity to assets ratio was 13.64% for the quarter ended September 30, 2025, an increase of 0.83% from September 30, 2024. This increase resulted primarily from common stock issued with the acquisition of Independent and the net income earned during the last twelve months being greater than the increase in total assets of 43.3% from September 30, 2024.
• Dividend payout ratios were 24.59% and 30.89% for the three and nine months periods ending September 30, 2025, respectively, and 28.76% and 30.82% for the three and nine months periods ending September 30, 2024, respectively. The decrease in the dividend payout ratio for the three months period ending September 30, 2025, was due to the 72.3% increase in net income being greater than the increase in dividends paid during the current quarter of 47.3% compared to the same period in 2024. The dividend payout ratio for the nine months period ending September 30, 2025, increased due to a net income increase of 41.0% compared to an increase in total dividends paid of 41.4% when compared to the same period in 2024. The increase in dividends paid was due to the increase in outstanding common shares in 2025 resulting from the issuance of 24.9 million shares of common stock for the acquisition of Independent in the first quarter of 2025 along with the Company increasing its dividend per share from $0.54 to $0.60 in the third quarter of 2025.

Net Interest Income and Margin

Non-tax equivalent net interest income increased $248.2 million, or 70.6%, to $599.7 million in the third quarter of 2025 compared to $351.5 million in the same period in 2024. Interest-earning assets averaged $58.7 billion during the three months period ended September 30, 2025, compared to $41.2 billion for the same period in 2024, an increase of $17.5 billion, or 42.5%. Interest-bearing liabilities averaged $41.4 billion during the three months period ended September 30, 2025, compared to $28.1 billion for the same period in 2024, an increase of $13.3 billion, or 47.6%. Non-tax equivalent net interest income increased $676.5 million, or 64.7%, to $1.7 billion in the nine months ended September 30, 2025, compared to $1.0 billion in the same period in 2024. Interest-earning assets averaged $58.0 billion during the nine months ended September 30, 2025, compared to $41.0 billion during the same period in 2024, an increase of $17.0 billion, or 41.5%. Interest-bearing liabilities averaged $40.9 billion during the nine months ended September 30, 2025, compared to $27.8 billion for the same period in 2024, an increase of $13.1 billion, or 47.4%.

The Federal Reserve implemented a total rate cut of 125 basis-point, beginning with a 50 basis-point reduction in mid-September 2024. This was followed by three additional cuts of 25 basis-point each, one in early November 2024, one in mid-December 2024, and the latest one in mid-September 2025. These rate cuts came after a series of rate hikes that began in March 2022, resulting in a target range of 4.00% to 4.25% at September 30, 2025. As a result, the Company operated in a comparatively lower rate environment for the three and nine months ended September 30, 2025 compared to the same time periods in 2024. Some key highlights are outlined below:

• The non-tax equivalent and the Tax Equivalent (“TE”) net interest margin increased by 66 basis points in the third quarter of 2025 compared to the same quarter of 2024. The increase in net interest margin was primarily attributable to a 71-basis point rise in the yield on interest earning assets, while the cost of interest-bearing liabilities remained stable.
• Non-TE yield on interest-earning assets for the third quarter of 2025 increased 71 basis points to 5.96% from the comparable period in 2024 due to higher yields on investments securities and loans held for investment. The yield on investment securities increased due to the investment bond restructuring completed in the first quarter of 2025. The yield on loans increased primarily due to loan accretion recognized during the third quarter of 2025 of approximately $83.0 million, which was mainly attributable to the loan portfolio acquired from Independent. In addition, the average balance of the higher yielding acquired loans increased by $10.4 billion, the average balance of non-acquired loans increased by $3.8 billion, and the average balance of investment securities increased by $1.5 billion, mainly due to balances acquired from Independent.
• The average cost of interest-bearing liabilities for the third quarter of 2025 decreased slightly to 2.70%, compared to the same period in 2024. The average cost of corporate and subordinated debentures increased by 185 basis points, primarily driven by higher interest expense incurred resulting from a $583.3 million increase in average balances. The increase in average balances includes the assumption of $360.5 million in corporate and subordinated debentures in connection with the Independent acquisition, as well as the issuance of $350.0 million in aggregate principal amount of subordinated notes during the second quarter of 2025. These increases were partially offset by the redemption of $405.0 million of subordinated debentures that occurred during the latter half of the third quarter of 2025. The cost increase was offset by lower costs associated with other borrowings, federal funds purchased, securities sold with agreements to repurchase, and decreases across all deposit categories, reflecting the comparatively lower rate environment. The Company had no other borrowings outstanding as of the end of the third quarter 2025. Accordingly, no interest cost was recognized for other borrowings during the third quarter of 2025. This compares to a cost of 5.57% for the comparable period in 2024. The average cost of federal funds purchased decreased by 111 basis points, despite a $27.1 million increase in average balance. The average cost of securities sold with agreements to repurchase also decreased by 19 basis points, even as the average balance increased by $23.2 million. In addition, the average cost of interest-bearing deposits decreased by 7 basis points, despite a $12.9 billion increase in the average balance. Our overall cost of funds, including noninterest-bearing deposits, was 2.04% for the three months ended September 30, 2025, compared to 1.99% for the three months ended September 30, 2024.

The tables below summarize the analysis of changes in interest income and interest expense for the three and nine months ended September 30, 2025, and 2024 and net interest margin on a tax equivalent basis:

(Dollars in thousands)

(Dollars in thousands)

(1) Investment securities (taxable) and (tax-exempt) include trading securities.

Investment Securities

The interest earned on investment securities increased by $32.4 million and $78.2 million, respectively, in the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024. This is a result of the Bank carrying a higher average balance in investment securities along with an increase in the yield on the investment portfolio in 2025 compared to the same period in 2024. The average balance of investment securities increased $1.5 billion and $1.2 billion, respectively, for the three and nine months ended September 30, 2025, from the comparable periods in 2024, primarily due to the Company acquiring $1.6 billion in investment securities through the acquisition of Independent. These securities were subsequently sold during the first quarter 2025 with the proceeds reinvested into purchases of new securities that fit the Company’s investment strategy. The increase in investment securities related to the Independent acquisition was partially offset due to maturities and mortgage paydowns within the AFS and HTM investment portfolios. The yield on the investment securities increased 107 basis points and 89 basis points, respectively, during the three and nine months ended September 30, 2025, compared to the same periods in 2024. The Company purchased investment securities, including the reinvestment of the Independent investment portfolio, at current market rates during the first quarter of 2025. The Company saw an improvement in the yield and risk weightings, as well as a shortened duration, of the investment portfolio for a full quarter during the current quarter as a result of the securities repositioning completed during the first quarter of 2025.

Loans

Interest earned on loans held for investment increased $285.9 million to $777.3 million and increased $808.2 million to $2.2 billion, respectively, during the three and nine months ended September 30, 2025, from the comparable periods in 2024. Interest earned on loans held for investment included loan accretion income recognized during the three and nine months ended September 30, 2025, and 2024 of $83.0 million, $208.3 million, $2.9 million and $11.5 million, respectively, an increase of $80.1 million and $196.8 million, respectively. Some key highlights for the quarter ended September 30, 2025, are outlined below:

• Our non-TE yield on total loans increased 62 basis points in the third quarter of 2025 compared to the same period in 2024 due to a 6 basis-point decrease in the yield on the non-acquired loan portfolio and a 185 basis-point increase in the yield on the acquired loan portfolio.
• The yield on the acquired loan portfolio increased from 6.17% in the third quarter of 2024 to 8.02% in the same period in 2025, while interest income on the acquired loan portfolio increased by $233.6 million during the same period.
• The interest income on acquired loans increased by $233.6 million, due to a $10.4 billion increase in the average balance during the third quarter of 2025 compared to the same period in 2024. The average balance increased due to loans acquired from Independent, which was offset by paydowns, pay-offs and renewals of acquired loans that were moved to our non-acquired loan portfolio. The yield increased primarily due to loan accretion of approximately $78.9 million recognized for the loan portfolio acquired from Independent during the third quarter of 2025.
• The yield on the non-acquired loan portfolio decreased 6 basis points to 5.74% in the third quarter of 2025 compared to 5.80% in the same period in 2024. Interest income on the non-acquired loan portfolio increased $52.4 million during the same period.
• The increase in interest income on non-acquired loans was attributable to a higher average balance of $3.8 billion through organic loan growth and renewals of matured acquired loans that were moved to our non-acquired loan portfolio. The decline in yield on non-acquired loans primarily reflects the impact of new and renewed loans originating at lower rates in the current rate environment compared to the same period in 2024.

Interest-Bearing Liabilities

The quarter-to-date average balance of interest-bearing liabilities increased by $13.3 billion, or 47.6%, in the third quarter of 2025 compared to the same period in 2024. The cost of interest-bearing liabilities decreased slightly to 2.70% compared to the same period in 2024, while the overall cost of funds, including demand deposits, slightly increased by 5 basis points to 2.04% in the third quarter of 2025, compared to the same period in 2024. Some key highlights for the quarter ended September 30, 2025, compared to the same period in 2024 include:

• The cost of interest-bearing deposits was 2.56% for the third quarter of 2025 compared to 2.63% for the same period in 2024.
• Interest expense on interest-bearing deposits increased by $79.4 million in the third quarter of 2025 compared to the same period in 2024 as interest expense on all interest-bearing deposit accounts increased, primarily due to an increase in the average balance of deposit accounts as a result of the balances assumed from the Independent acquisition. Interest expense on transaction and money market accounts, savings, certificates and other time deposits increased by $58.0 million, $47,000, and $21.3 million, respectively.
• The average balance of interest-bearing deposits increased by $12.9 billion, as average balances on all interest-bearing deposit accounts increased, which drove up interest expense. The increases in the average balance of transaction and money market accounts, savings, certificates and other time deposits were $9.7 billion, $425.6 million and $2.8 billion, respectively.
• The cost of federal funds purchased decreased 111 basis points. The decline in the yield compared to the same period in 2024 was primarily driven by a lower interest rate environment, as the interest expense decreased by $538,000 while the average balance grew by $27.1 million.
• The cost of securities sold under agreements to repurchase was 2.15% for the third quarter of 2025 compared to 2.34% for the same period in 2024, driven by the effects from the lower interest environment. While the average balance grew by $23.2 million, interest expense only increased by $8,000.
• The cost of corporate and subordinated debentures increased by 185 basis points to 7.95% for the three months ended September 30, 2025, also driven by the effects from the increase in the average balance of $583.3 million. The Company assumed $360.5 million in corporate and subordinated debentures from the Independent acquisition during the first quarter of 2025 and issued $350.0 million in aggregate principal amount of subordinated notes during the second quarter of 2025. These increases were partially offset by the redemption of $405.0 million of subordinated debentures that occurred during the latter half of the third quarter of 2025. The increase in the average balance resulted in an increase in interest expense of $13.5 million.
• The Company had no other borrowings outstanding as of the end of the third quarter 2025 and no interest cost was recognized during the third quarter of 2025. The cost was 5.57% for the comparable period in 2024.

We continue to monitor and adjust rates paid on deposit products as part of our strategy to manage our net interest margin. Interest-bearing liabilities include interest-bearing transaction accounts, savings deposits, CDs, other time deposits, federal funds purchased, and other borrowings. Interest-bearing transaction accounts include NOW, HSA, Interest on Lawyers’ Trust Accounts (“IOLTA”), and Market Rate checking accounts.

Noninterest-Bearing Deposits

Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. Average noninterest-bearing deposits increased $3.1 billion, or 30.1%, to $13.5 billion in the third quarter of 2025 compared to $10.4 billion during the same period in 2024. The increase in the average balance of noninterest bearing deposits was primarily due to noninterest-bearing deposit balances assumed from Independent during the first quarter of 2025.

Noninterest Income

Noninterest income provides us with additional revenues that are significant sources of income. For the three months ended September 30, 2025, and 2024, noninterest income comprised 14.2%, and 17.6%, respectively, of total net interest income and noninterest income. For the nine months ended September 30, 2025, and 2024, noninterest income comprised 13.6%, and 17.5%, respectively, of total net interest income and noninterest income.

(Dollars in thousands)

Noninterest income increased by $24.2 million, or 32.2%, during the third quarter of 2025 compared to the same period in 2024. This quarterly change in total noninterest income resulted from the following:

• Service charges on deposit accounts were higher by $3.2 million, or 13.6%, during the third quarter of 2025 compared to the same period in 2024. The increase was mainly attributable to deposit accounts assumed from Independent.
• Debit, prepaid, ATM and merchant card related income was higher by $5.4 million, or 52.2%, in the third quarter of 2025 compared to the same period in 2024. The increase in debit, ATM, prepaid and merchant card related income was mainly due to higher bank card and ATM related fee income $2.9 million and lower card and ATM system expense of $2.4 million.
• Trust and investment services income for the third quarter of 2025 increased by $2.6 million, or 22.3%, from the third quarter of 2024, as assets under management have increased by $1.4 billion, or 15.8%, in that same time frame. The trust and investment services income increased during the third quarter of 2025, primarily due to higher asset values and the addition of new clients through wealth management services provided by Private Capital Management LLC, which became the Bank’s wholly owned subsidiary through the Company’s acquisition of Independent during the first quarter of 2025.
• Correspondent banking and capital markets income in the third quarter of 2025 increased by $11.3 million, or 114.3%, compared to the same quarter in 2024. The increase was primarily related to an increase of $3.6 million in income generated from the sale of customer swap ARC hedges during the third quarter of 2025 compared to the third quarter of 2024, resulting from the comparatively lower interest rate environment in 2025. The increase was also due to the expense attributable to the variation margin payments for centrally cleared swaps where we recorded an expense of $4.3 million related to variation margin payments in the third quarter of 2025 compared to an expense of $7.5 million in the third quarter of 2024.

Noninterest income increased by $50.3 million, or 22.7%, during the nine months ended September 30, 2025, compared to the same period in 2024. The categories and explanations for the fluctuations year-to-date, except the items discussed below, are similar to the ones noted above in the quarterly comparison.

• Mortgage banking income increased by $3.9 million, or 25.3%, in 2025 compared to 2024, a $2.0 million, or 17.4%, increase in secondary market mortgage income and a $1.8 million, or 51.4%, increase in mortgage servicing related income, net of hedge. Mortgage production increased from $1.5 billion in the first nine months of 2024 to $1.7 billion in the first nine months of 2025 with slightly lower mortgage rates in 2025 compared to the same period in 2024. We allocated a lower percentage of mortgage production to the secondary market in 2025 compared to the same period in 2024 as the percentage allocated decreased in 2025 compared to 2024 from 57% to 41%. 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 is expected to fluctuate year to year.
• Mortgage income from the secondary market increased by $2.0 million between the comparable periods resulting from a $4.0 million increase in the gain on sale of mortgage loans, which is net of the commission expense related to mortgage production, offset primarily by decreases in the fair value of MBS forward trades of $1.2 million. Mortgage commission expense was $6.0 million in 2025 compared to $8.7 million in 2024.
• The mortgage servicing related income, net of the hedge, increased by $1.8 million in 2025. The increase was mainly due to a $1.7 million increase in the change in fair value of the MSR, including decay. The increase in fair value of the MSR between the comparable periods was primarily due to an increase from gains/losses on the MSR hedge of $4.1 million, offset by a decrease in the change in fair value from interest rates of $2.8 million.
• During the first quarter of 2025, the Company recorded net losses of $228.8 million on the sales of investment securities, excluding the sales of investment securities acquired from Independent.
• The Company recorded a gain on the sale of bank properties of $229.3 million, net of transaction costs, from a sale-leaseback transaction completed in February 2025.
• SBA income decreased by $4.8 million, or 39.8%, during 2025 compared to the same period in 2024. SBA income includes changes in the fair value of the servicing asset, loan servicing fees and gains on sale of SBA loans. The decrease was primarily attributable to lower gains on the sale of SBA loans of $4.3 million.
• Bank owned life insurance income increased by $7.4 million, or 32.9%, in 2025 compared to the same period in 2024. The increase was primarily due to the acquisition of bank owned life insurance assets from Independent. The income on the bank owned life insurance assets increased approximately $6.1 million. In addition, death benefit proceeds increased approximately $1.3 million in 2025 compared to the same period in 2024.
• Other income decreased by $7.9 million, or 42.5%, in 2025 compared to the same period in 2024. During the second quarter of 2024, the Company recognized approximately $5.2 million of income from federal tax refunds received during the second quarter of 2024 for net operating loss carrybacks filed in 2021. In addition, the Bank recognized approximately $3.0 million in credits from an external vendor in 2024.

Noninterest Expense

(Dollars in thousands)

Noninterest expense increased by $125.5 million, or 50.8%, in the third quarter of 2025 compared to the same period in 2024. The quarterly increase in total noninterest expense primarily resulted from the following:

• Salaries and employee benefits increased $48.3 million, or 32.0%, in the third quarter of 2025 compared to the same period in 2024. The increase was primarily associated with the addition of Independent employees during the first quarter of 2025. Salaries increased by $25.9 million resulting from both merit increases and an increase in the number of employees, along with higher commission and incentive expense of $13.4 million and higher employee benefits from higher FICA tax paid and medical insurance expense of $9.0 million.
• Occupancy expense increased $18.6 million, or 83.8% in the third quarter of 2025 compared to the same period in 2024. The increase was primarily due to increases in lease expense and branch maintenance and repair expenses of $14.9 million and $4.4 million, respectively.
• Information services expense increased $5.7 million, or 24.5%, in the third quarter of 2025 compared to the same period in 2024. The increase was due to additional costs associated with the Company updating systems and expenses associated with transferring, managing, and processing data as it grows in size and complexity.
• OREO and loan related expense increased $4.1 million in the third quarter of 2025 compared to the same period in 2024, which was primarily due to approximately a $3.2 million increase in losses on sales of OREO and bank property held for sale.
• Amortization of intangibles increased by $18.1 million, which is related to the Independent acquisition.
• Business development and staff related expense increased $3.4 million, or 60.7%, in the third quarter of 2025 compared to the same period in 2024, due mainly to the increase in employees resulting from the Independent acquisition and additional employee travel and entertainment.
• Merger, branch consolidation, severance-related, and other expense increased $17.6 million to $20.9 million in the third quarter of 2025 compared to the same period in 2024. Of the $20.9 million of expense recognized in the third quarter of 2025, approximately $20.8 million pertains to the Independent acquisition.
• Other noninterest expense increased by $6.7 million, or 36.4%, in the third quarter of 2025 compared to the same period in 2024. The increase primarily resulted from a $4.2 million increase in miscellaneous expense, largely due to increases in earnings credit expense to Homeowners Association (“HOA”) customers of $2.3 million. The Bank provides a credit to HOA customers based on the average deposit balances held that reduces fees for other services provided. Additional increases included approximately $1.5 million increase in donations and $1.1 million increase in other miscellaneous operational expenses.

Noninterest expense increased by $411.3 million, or 55.2%, during the nine months ended September 30, 2025, compared to the same period in 2024. The categories and explanations for the fluctuations year-to-date, except the items discussed below, are similar to the ones noted above in the quarterly comparison.

• Professional fees increased $3.3 million, or 30.1%, in 2025 compared to 2024. This increase was primarily due to an increase in legal fees totaling $2.6 million.
• FDIC assessment and other regulatory charges increased $7.3 million, or 30.7%, in 2025 compared to 2024. The increase in the FDIC assessment was primarily due to an increase in the FDIC assessment rate to bring the overall FDIC insurance fund to 1.35 times total deposits by the end of 2028. The increase also reflects changes in the Company’s size and complexity along with the effects from the increase in the Company’s classified assets.
• The FDIC’s special assessment expense decreased by $4.5 million as the FDIC announced a projected reduction in the special assessment rate in late 2024, resulting in no additional accrual recorded during 2025. The Company accrued a total of $4.5 million during the first half of 2024 based on the anticipation of a higher assessment that may be allocated to the Bank at that time.

Income Tax Expense

Our effective tax rate was 23.25% for the three months ended September 30, 2025, compared to 23.24% for the three months ended September 30, 2024. The effective rate for the quarter was effectively flat when compared to the same period in the prior year, which is the result of an increase in pretax book income, an increase in tax-exempt interest income, and increase in the cash surrender value of BOLI policies. These increases were offset by an increase in non-deductible executive compensation and disallowed FDIC premiums.

Our effective tax rate for the first nine months of the year was 23.99% compared to 23.84% for the first nine months of 2024. The increase in the year-to-date effective tax rate compared to the same period of 2024 is due primarily to the increase in pretax book income and higher non-deductible executive compensation and disallowed FDIC premiums. This was partially offset by an increase in the cash surrender value of BOLI policies and an increase in tax-exempt income in the first nine months of the current year, compared to 2024.

Segment Reporting

As discussed in Note 23 — 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.

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

The table below provides PPNR and TE NIM information of the General Banking Unit.

Pre-Provision Net Revenue and Tax Equivalent Net Interest Margin

(Dollars in thousands)

Analysis of Financial Condition

Summary

Our total assets increased approximately $19.7 billion, or 42.4%, from December 31, 2024, to September 30, 2025, to approximately $66.0 billion. Within total assets, cash and cash equivalents increased by $1.8 billion, or 125.9%, and net loans increased $13.8 billion, or 40.6%, while investment securities increased $1.7 billion, or 25.1%, during the period. Within total liabilities, deposits grew $16.0 billion, or 42.1%, and federal funds purchased and securities sold under agreements to repurchase increased by $79.2 million, or 15.4%. Total borrowings increased by $304.9 million, or 77.9%. Total shareholder’s equity increased $3.1 billion, or 53.0%. The increases in total assets, cash and cash equivalents, investment securities, loans, deposits, other borrowings and equity were all primarily driven by the acquisition of Independent on January 1, 2025. The increase in cash and cash equivalents was also due to the cash received from the sale-leaseback transaction of approximately $456.4 million, an increase in deposits, excluding deposits assumed from Independent, of approximately $803.7 million, and an increase in federal funds purchased and securities sold under agreements to repurchase of $79.2 million. The increase in deposits, excluding deposits assumed from Independent, was mainly due to increases in interest-bearing checking accounts and time deposit accounts. These increases were partially offset by cash used to fund net loan growth, excluding loans assumed from Independent, of $773.4 million. Our loan to deposit ratio was 88% and 89% at September 30, 2025 and December 31, 2024, respectively, while our percentage of noninterest-bearing deposit accounts to total deposits was 25% and 27%, respectively at September 30, 2025, and December 31, 2024.

Investment Securities

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 September 30, 2025, investment securities totaled $8.5 billion, compared to $6.8 billion at December 31, 2024, an increase of $1.7 billion, or 25.1%. During the first quarter of 2025, the Company acquired $1.6 billion in investment securities through the acquisition of Independent. A majority of these securities were subsequently sold during the quarter with the proceeds reinvested into securities that fit the Company’s investment strategy. The Company executed a securities repositioning during the first quarter 2025 and sold investment securities with a book value of approximately $1.8 billion at a loss of $228.8 million and used the proceeds to purchase new securities. This securities repositioning improved the yield and risk weightings and shortened the duration of the investment portfolio. The Bank purchased $5.2 billion of investment securities during the nine months ended September 30, 2025 from reinvesting funds provided by the sales of securities acquired from Independent and proceeds from the sale of securities involved in the repositioning strategy. The increases in investment securities from the acquisition and purchases were partially offset as a result of maturities, calls, sales and paydowns of investment securities totaling $5.3 billion and a reduction from the net amortization of premiums of $8.2 million during the nine months ended September 30, 2025. All of the $1.6 billion in purchases of investment securities during the quarter were available-for-sale securities. There were no purchases of held to maturity securities during the quarter. During the nine months ended September 30, 2025, we purchased $33.3 million of capital stock of the Federal Home Loan Bank of Atlanta classified as other investment securities on the Balance Sheet and sold back $45.1 million. At September 30, 2025, approximately 71.0% of the investment portfolio was classified as available for sale, approximately 24.7% was classified as held to maturity and approximately 4.3% was classified as other investments.

At September 30, 2025, the unrealized net losses of the available for sale securities portfolio was $425.5 million, or 6.6%, below its amortized cost basis, compared to an unrealized net loss of $808.6 million, or 15.8%, at December 31, 2024. At September 30, 2025, the unrealized net loss of the held to maturity securities portfolio was $331.2 million, or 15.8%, below its amortized cost basis, compared to an unrealized net loss of $420.1 million, or 18.6%, at December 31, 2024.

The following is the combined amortized cost and fair value of investment securities available for sale and held for maturity, aggregated by credit quality indicator:

(Dollars in thousands)

* Agency mortgage-backed securities (“MBS”), agency collateralized mortgage-obligations (“CMO”) and agency commercial mortgage-backed securities (“CMBS”) are guaranteed by the issuing government-sponsored enterprise (“GSE”) as to the timely payments of principal and interest. Except for Government National Mortgage Association securities, which have the full faith and credit backing of the United States Government, the GSE alone is responsible for making payments on this guaranty. While the rating agencies have not rated any of the MBS, CMO and CMBS issued, senior debt securities issued by GSEs are rated consistently as “Triple-A.” Most market participants consider agency MBS, CMOs and CMBSs as carrying an implied Aaa rating (S&P rating of AA+) because of the guarantees of timely payments and selection criteria of mortgages backing the securities. We do not own any private label mortgage-backed securities. The balances presented under the ratings above reflect the amortized cost of the investment securities.

At September 30, 2025, we had 1,078 investment securities including both available for sale and held to maturity, in an unrealized loss position, which totaled $787.4 million. At December 31, 2024, we had 1,214 investment securities, including both available for sale and held to maturity, in an unrealized loss position, which totaled $1.2 billion. The total number of investment securities with an unrealized loss position decreased by 136 securities, while the total dollar amount of the unrealized loss decreased by $442.1 million. The reduction in the number of securities in a loss position and level of unrealized losses was mainly due to the securities repositioning strategy completed during the first quarter of 2025 where we sold certain available-for-sale investment securities and recognized the losses and reinvested the proceeds in investment securities at current market prices. The reduction was also due to changes in interest rates during the first nine months of 2025.

All investment securities in an unrealized loss position as of September 30, 2025, 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 5 — Investment 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. 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 September 30, 2025:

(Dollars in thousands)

(1) Yields on tax exempt income have been presented on a taxable equivalent basis in the table above.

(2) FRB, FHLB and other non-marketable equity securities have no set maturity date and are classified in “Due after 10 Years.”

(3) The total values presented in the table above represent total fair value for available for sale and amortized cost for held to maturity.

Approximately 86.7% (based on amortized cost) of the investment portfolio is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities. These securities may be pledged to the Federal Home Loan Bank of Atlanta or the Federal Reserve Bank of Atlanta Discount Window. Approximately 13.0% (based on amortized cost) of the investment portfolio is comprised of municipal securities. A portion of the municipal bond portfolio may be pledged to the Federal Home Loan Bank of Atlanta subject to their credit approval. Approximately 99% of the municipal bond portfolio has ratings in the Double A or Triple A category.

As of September 30, 2025, the portfolio had an effective duration of 4.67 years. We continue to monitor duration risk and seek to align actual duration with the target range.

The following table presents a summary of our investment portfolio duration for the periods presented:

(Dollars in thousands, duration in years)

Other Investments

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 September 30, 2025, we determined that there was no impairment on our other investment securities. As of September 30, 2025, other investment securities represented approximately $366.2 million, or 0.55% of total assets, and primarily consists of FHLB and FRB stock which totals $252.5 million, or 0.38% of total assets. There were no gains or losses on the sales of these securities for three and nine months ended September 30, 2025, and 2024, respectively.

Trading Securities

We have a trading portfolio associated with our Correspondent Banking Division and the Bank’s subsidiary, SouthState|DuncanWilliams. 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 $107.5 million and $102.9 million at September 30, 2025 and December 31, 2024.

Loans Held for Sale

The balance of loans held for sale increased $67.2 million from December 31, 2024, to $346.7 million on September 30, 2025. Loans held for sale at September 30, 2025 and December 31, 2024 consisted of mortgage and SBA loans held for sale.

During the third quarter of 2024, the Company began purchasing the guaranteed portions of SBA loans from third-party originators with the intent to aggregate the guaranteed portion of the SBA loans into pools with similar characteristics to create a security representing an interest in those pools through the SBA’s fiscal transfer agent. SBA loans held for sale totaled $278.3 million at September 30, 2025 compared to $181.3 million at December 31, 2024. See Note – 20 – SBA Loans Held for Sale for more information.

Mortgage loans held for sale totaled $68.4 million at September 30, 2025, a decrease of $29.7 million compared to $98.1 million at December 31, 2024. Total mortgage production was $612 million in the third quarter of 2025. This compares to $672 million in the second quarter of 2025 and $506 million in the third quarter of 2024. Mortgage production increased from the third quarter in 2024 as average mortgage rates were lower in third quarter of 2025 compared to the same period in 2024. Mortgage production declined in the third quarter of 2025 compared to the second quarter of 2025 even with average mortgage rates being lower. The decline in production compared to the previous quarter is due to uncertainty in the economy, low housing inventory and high housing prices. The percentage of mortgage production sold into the secondary market decreased in the third quarter of 2025 to 34% from 37% in the second quarter of 2025 and from 58% in the third quarter of 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.

Loans

The following table presents a summary of the loan portfolio by category (excludes loans held for sale):

(Dollars in thousands)

Total loans, net of deferred loan costs and fees (excluding loans held for sale), increased by $13.8 billion, or 54.3% annualized, to $47.7 billion at September 30, 2025. Our non-acquired loan portfolio increased by $3.2 billion, or 14.7% annualized, mainly driven by organic growth and renewals of acquired loans that are moved to our non-acquired loan portfolio. Commercial non-owner-occupied loans, commercial and industrial loans, consumer owner-occupied loans and commercial owner-occupied real estate loans led the way with $1.6 million, $935.8 million, $478.0 million and $409.0 million in year-to-date loan growth, respectively, or 27.3%, 22.3%, 9.7% and 12.1% annualized growth, respectively. The acquired loan portfolio increased by $10.5 billion, or 313.3% annualized. This increase 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 main categories that increased were commercial non-owner-occupied loans, commercial and industrial loans, commercial owner-occupied real estate loans, consumer owner-occupied loans, construction and land development loans, and other income producing property loans which increased by $5.4 billion, $1.5 billion, $1.4 billion, $818.4 million, $791.0 million and $636.4 million, respectively, year-to-date. Acquired loans as a percentage of total loans increased to 31.5% and non-acquired loans as a percentage of the overall portfolio decreased to 68.5% at September 30, 2025. This compares to acquired loans as a percentage of total loans of 13.3% and non-acquired loans as a percentage of total loans of 86.7% at December 31, 2024.

Total commercial non-owner-occupied loans of $16.3 billion, approximately 34.3% of the total loans held for investment, was the largest category of the loan portfolio as of September 30, 2025. As of September 30, 2025, approximately 93% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $16.3 billion, approximately $1.8 billion, or 4% of the total loans, represented our office segment. Approximately 96% of the office segment was located in the Company’s footprint.

The following table presents the top eight loan segments of the commercial non-owner-occupied loan category (excluding loans held for sale). The loan segments in the table below are determined by the call code, used for the Bank’s regulatory reporting requirements issued by the FDIC for the FFIEC 041, also referred to as the Call Report.

(Dollars in thousands)

(1) Net book balance in each segment that represents 2% or more of commercial non-owner-occupied portfolio as of September 30, 2025.

Allowance for Credit Losses (ACL) on Loans and Certain Off-Balance-Sheet Credit Exposures

The ACL reflects management’s estimate of losses that will result from the inability of our borrowers to make required loan payments. The Company records loans charged off against the ACL and subsequent recoveries, if any, increase the ACL when they are recognized. Please see Note 1 — Summary of Significant Accounting Policies, under the “ACL – Loans” section, of our Annual Report on Form 10-K for the year ended December 31, 2024, and Note 2 — Significant Accounting Policies in this Quarterly Report on Form 10-Q for further detailed descriptions of our estimation process and methodology related to the ACL on loans.

Management considers forward-looking information in estimating expected credit losses. The Company subscribes to a third-party service which provides a quarterly macroeconomic baseline outlook and alternative scenarios for the United States economy. The baseline, along with the evaluation of alternative scenarios, is used by management to determine the best estimate within the range of expected credit losses. Management evaluates the appropriateness of the reasonable and supportable forecast scenarios and takes into consideration the scenarios in relation to actual economic and other data, such as gross domestic product growth, monetary and fiscal policy, inflation, supply chain issues and global events like the Russian/Ukraine conflict and unrest in middle east, and changes in global trade policy, as well as the volatility and magnitude of changes within those scenarios quarter over quarter, and consideration of conditions within the Bank’s operating environment and geographic area. Additional forecast scenarios may be weighted along with the baseline forecast to arrive at the final reserve estimate. While periods of relative economic stability should generally lead to stability in forecast scenarios and weightings to estimate credit losses, periods of instability can likewise require management to adjust the selection of scenarios and weightings, in accordance with the accounting standards. For the contractual term that extends beyond the reasonable and supportable forecast period, the Company reverts to the long term mean of historical factors within four quarters using a straight-line approach. The Company generally uses an eight-quarter forecast and a four-quarter reversion period.

There are several headwinds that continue to weigh down the economy, but the U.S. has thus far avoided a recession. Management continues to use a blended forecast scenario of the baseline, upside, and more severe scenario, depending on the circumstances and economic outlook. For the quarter ending September 30, 2025, management selected a baseline weighting of 40%, a 25% weighting for an upside scenario and a 35% weighting for the more severe scenario. Scenario weightings are generally expected to remain stable but are reviewed on a quarterly basis. Weightings were not changed from the prior quarter and reflect a mostly neutral stance but recognition of downside risks and higher levels of uncertainty in the economic forecast from flat job growth, high interest rates, lack of clarity on trade policy impacts, and tightening credit conditions. Improved GDP growth and employment resilience kept expected losses mostly flat. The Company recorded a total provision for credit losses of $5.1 million for the third quarter of 2025. The Company recorded a provision for credit losses of $1.2 million and $3.9 million for funded loans and unfunded commitments, respectively, during the third quarter of 2025.

The Company has a variety of assets that have a component that qualifies as an off-balance sheet exposure. These primarily include undrawn portions of revolving lines of credit and standby letters of credit. Please see MD&A, under the “Financial Condition”, “Allowance for Credit Losses (“ACL”)” section, of our Annual Report on Form 10-K for the year ended December 31, 2024, and Note 2 — Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q for further detailed descriptions of our estimation process and methodology related to the ACL on certain off-balance-sheet credit exposures.

As of September 30, 2025, the balance of the ACL was $590.1 million or 1.24% of total loans. The ACL decreased $30.9 million from the balance of $621.0 million recorded at June 30, 2025. The decrease during the third quarter of 2025 included $1.2 million in provision for credit losses and $32.2 million in net charge-offs.

At September 30, 2025, the Company had a reserve on unfunded commitments of $68.5 million, which was recorded as a liability on the Consolidated Balance Sheet, compared to $64.7 million at June 30, 2025, and $45.3 million at December 31, 2024. During the three and nine months ended September 30, 2025, the Company recorded an increase in the reserve for unfunded commitments of $3.8 million and $23.2 million, respectively. Of the $23.2 million of provision for credit losses recorded for unfunded commitments during the nine months ended September 30, 2025, $12.1 million was related to the initial provision for unfunded commitments acquired from Independent and $11.1 million was for all other unfunded commitments. For the prior comparative period, the Company recorded a decrease in the reserve for unfunded commitments of $8.7 million and $14.8 million, respectively, during the three and nine months ended September 30, 2024. The Company did not have an allowance for credit losses or record a provision for credit losses on investment securities or other financial asset during the nine months ended September 30, 2025.

The ACL provides 1.96 times coverage of nonperforming loans at September 30, 2025. Net charge-offs to total average loans during the three and nine months ended September 30, 2025, were 0.27% and 0.29%, respectively, compared to net charge-offs to total average loans of 0.07% and 0.05%, respectively, during the three and nine months ended September 30, 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 nine months ended September 30, 2025 were 0.12%. There were no acquisition date charge-offs recorded in the third quarter of 2025. The increase in charge-offs in the third quarter was mainly due to one commercial and industrial charge-off in the third quarter of $21.5 million. If this individual charge-off was excluded, net charge-offs as a percentage of average loans would have been 0.09% for the third quarter, a 0.03% increase from the second quarter. We continued to experience solid and stable asset quality numbers and ratios as of September 30, 2025.

The following table provides the allocation, by segment, for expected credit losses as of September 30, 2025:

(Dollars in thousands)

* Loan balance in each category expressed as a percentage of total loans.

The following table presents a summary of net charge off ratios (annualized) by loan segment, for the three and nine months ended September 30, 2025, and 2024:

(Dollars in thousands)

(Dollars in thousands)

The following tables present summary of ACL for the three and nine months ended September 30, 2025, and 2024:

(Dollars in thousands)

(Dollars in thousands)

Nonperforming Assets (“NPAs”)

The following table summarizes our nonperforming assets for the past five quarters:

(Dollars in thousands)

(1) Consists of real estate acquired as a result of foreclosure.

(2) Consists of non-real estate foreclosed assets, such as repossessed vehicles.

(3) Includes nonaccrual loans that are purchase credit deteriorated (PCD loans).

(4) Loan data excludes mortgage loans held for sale.

(5) For purposes of this calculation, total assets include all assets (both acquired and non-acquired).

(6) Excludes non-acquired bank premises held for sale of $8.6 million, $900,000, $2.9 million, $3.3 million, and $5.2 million as of September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024, and September 30, 2024, respectively, that is now separately disclosed on the balance sheet.

(7) Excludes acquired bank premises held for sale of $0 million, $78.5 million, $72.0 million, $0, and $0 million as of September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024, and September 30, 2024, respectively, that is now separately disclosed on the balance sheet.

Total nonperforming assets were $320.8 million, or 0.67% of total loans and repossessed assets, at September 30, 2025, an increase of $107.5 million, or 50.4%, from December 31, 2024. Total nonperforming loans were $301.7 million, or 0.63%, of total loans, at September 30, 2025, an increase of $91.1 million, or 43.3%, from December 31, 2024. Non-acquired nonperforming loans increased by $5.8 million from December 31, 2024. The increase in non-acquired nonperforming loans was driven primarily by an increase in consumer nonaccrual loans of $15.8 million, an increase in accruing loans past due 90 days or more of $1.1 million, offset by a decline in commercial nonaccrual loans of $9.3 million and a decline in modified loans to a borrower experiencing financial difficulty of $1.8 million. The net increase of 15.8 million year-to-date in nonacquired consumer loans occurred primarily in the third quarter, which increased $10.2 million from June 30, 2025. The majority of these loans are 1-4 family residential loans. Acquired nonperforming loans increased $85.3 million from December 31, 2024. The increase in the acquired nonperforming loan balances was due primarily to an increase in commercial nonaccrual loans of $78.3 million, an increase in consumer nonaccrual loans of $6.6 million, an increase in accruing loans past due 90 days or more of $891,000, offset by a decline in modified loans to a borrower experiencing financial difficulty of $534,000. The majority of the increase in acquired commercial nonaccrual loans was due to the addition of $83.3 million in loans acquired in the merger with Independent, offset by a $5.0 million decline in legacy commercial nonaccrual loans. The $83.3 million in loans acquired were primarily commercial real estate and commercial and industrial loans.

Interest-Bearing Liabilities

Interest-bearing liabilities include interest-bearing transaction accounts, savings deposits, CDs, other time deposits, federal funds purchased, securities sold under agreements to repurchase and other borrowings. Interest-bearing transaction accounts include NOW, HSA, Interest on Layers’ Trust Accounts (“IOLTA”), and Market Rate checking accounts.

Total interest-bearing deposits increased $12.8 billion to $40.6 billion at September 30, 2025, from $27.9 billion at December 31, 2024. This increase was mainly driven by interest-bearing deposits of $8.7 billion as of September 30, 2025 acquired from Independent on January 1, 2025. Interest-bearing checking accounts increased $4.7 billion during the first nine months of 2025, which was driven by $2.8 billion as of September 30, 2025 in interest-bearing checking accounts acquired in the Independent acquisition. The additional growth in interest-bearing checking accounts was mainly through reciprocal and brokered interest-bearing checking accounts. Savings accounts increased by $439.2 million during the first nine months of 2025, which was driven by $430.1 million as of September 30, 2025 in savings accounts acquired in the Independent acquisition. Money market accounts increased $4.2 billion during the first nine months of 2025, which was driven by $3.6 billion as of September 30, 2025 in money market accounts acquired in the Independent acquisition. Time deposits increased $3.5 billion during the first nine months of 2025, which was driven by $1.9 billion as of September 30, 2025 in time deposits acquired in the Independent acquisition. The additional growth in time deposits was due to an increase in brokered time deposits of $1.6 billion during 2025 as the Company has let some higher costing local deposits run off. Federal funds purchased related to the Correspondent Banking Division and securities sold under agreements to repurchase were $594.1 million at September 30, 2025, a $79.2 million increase from December 31, 2024. Corporate and subordinated debentures increased by $304.9 million to $696.4 million at September 30, 2025. This increase was mainly due to $360.5 million in corporate and subordinated debentures assumed in the Independent acquisition. The Company also issued $350.0 million in new subordinated debt in the second quarter of 2025 and subsequently paid-off $405.0 million in subordinated debt in the third quarter of 2025 that had reached its call date and the end of its fixed rate period.

As noted above, the Company has allowed some higher costing local deposits run off in 2025 and replaced the deposits with brokered and other out of market deposits at lower interest rates. Average interest-bearing deposits increased $12.9 billion to $39.8 billion during the three months ended September 30, 2025 compared to the same period in 2024, mainly due to the acquisition of Independent. For the nine months ended September 30, 2025 compared to the same period in 2024 the increase was similar at $12.8 billion. For more information on the composition of our total deposits, see Note 9 — Deposits.

Noninterest-Bearing Deposits

Noninterest-bearing deposits are transaction accounts that provide our Bank with “interest-free” sources of funds. At September 30, 2025, the period end balance of noninterest-bearing deposits was $13.4 billion, an increase of $3.2 billion compared to the balance at December 31, 2024 of $10.2 billion. At September 30, 2025, the period-end balance of noninterest-bearing deposits included $3.2 billion assumed in the Independent acquisition. Noninterest-bearing deposits, excluding the deposits assumed during the quarter, have remained flat from December 31, 2024, increasing only $2.9 million. Average noninterest-bearing deposits were $13.5 billion for the third quarter of 2025 compared to $13.6 billion during the second quarter of 2025 and $10.4 billion during the third quarter of 2024. The increase in the average noninterest bearing deposits from the comparable quarter ended September 30, 2024 was due to the deposits assumed in the Independent acquisition.

Uninsured Deposits

The Company had estimated approximately 38.6% and 38.7%, respectively, of uninsured deposits over total deposits at September 30, 2025 and December 31, 2024. Total uninsured deposits at September 30, 2025 included uninsured deposits related to the Independent deposit base acquired in the first quarter of 2025. The amounts above are estimates and are based on the same methodologies and assumptions used for the Bank’s regulatory reporting requirements issued by the FDIC for the FFIEC 041, also referred to as the Call Report.

Capital Resources

Our ongoing capital requirements have been met primarily through retained earnings, less the payment of cash dividends. During the first quarter of 2025, the Company issued $2.5 billion in stock related to the acquisition of Independent. As of September 30, 2025, shareholders’ equity was $9.0 billion, an increase of $3.1 billion, or 53.0%, from December 31, 2024.

The following table shows the changes in shareholders’ equity during 2025:

(Dollars in thousands)

The Company repurchased 440,000 shares at a weighted average price of $97.29 per share pursuant to the 2025 Stock Repurchase Program during the third quarter of 2025. The number of shares to be purchased and the timing of the purchases are based on a variety of factors, including, but not limited to, the level of cash balances, general business conditions, regulatory requirements, the market price of our common stock, and the availability of alternative investment opportunities. As of September 30, 2025, a total of 2,560,000 authorized shares remains available for repurchase.

Under current regulations, the Company and the Bank are subject to a minimum ratio of common equity Tier 1 capital (“CET1”) to risk-weighted assets of 4.5% and a minimum required ratio of Tier 1 capital to risk-weighted assets of 6%. The minimum required leverage ratio is 4%. The minimum required total capital to risk-weighted assets ratio is 8%. Refer to Note 17 — Capital Ratios for more information regarding Company and Bank’s regulatory capital compliance requirements.

The well-capitalized minimums and the Company’s and the Bank’s regulatory capital ratios for the following periods are reflected below:

The Company’s and Bank’s Common equity Tier 1 risk-based capital, Tier 1 risk-based capital and total risk-based capital and Tier 1 leverage ratios as of September 30, 2025 all declined compared to December 31, 2024. The capital ratios declined mainly due to the effects on capital and assets from the acquisition of Independent. Tier 1 capital increased by 28.6% and 33.3% at both the Company and Bank, respectively, with the increase in equity resulting from the issuance of shares of common stock for the Independent acquisition and the net income recognized during the first nine months of 2025. Total risk-based capital increased by 32.1% and 32.8% at both the Company and Bank, respectively, with the increase in equity resulting from the issuance of shares of common stock for the Independent acquisition, the net income recognized during the first nine months of 2025 along with the increase in the allowance for credit losses and unfunded commitments includable in Tier 2 capital. Both regulatory risk-based assets and quarterly average assets increased in the first nine months of 2025 when compared to the fourth quarter with average assets for both the Company and Bank increasing by 38% and risk-based assets increasing by 41%. The increases in both average assets and risk-based assets were mainly due to the assets acquired in the Independent acquisition during the first quarter of 2025. Our capital ratios are currently well in excess of the minimum standards and continue to be in the “well capitalized” regulatory classification.

Liquidity

Liquidity refers to our ability to generate sufficient cash to meet our financial obligations, which arise primarily from the withdrawal of deposits, extension of credit and payment of operating expenses. Liquidity risk is the risk that the Bank’s financial condition or overall safety and soundness is adversely affected by an inability (or perceived inability) to meet its obligations. Our Asset Liability Management Committee (“ALCO”) is charged with the responsibility of monitoring policies designed to ensure acceptable composition of our asset/liability mix. Two critical areas of focus for ALCO are interest rate sensitivity and liquidity risk management. We have employed our funds in a manner to provide liquidity from both assets and liabilities sufficient to meet our cash needs.

The ALCO has established key risk indicators to monitor liquidity and interest rate risk. The key risk indicators are reviewed and approved by the ALCO on an annual basis. The liquidity key risk indicators include the loan to deposit ratio (policy limit not to exceed 100%), net noncore funding dependence ratio (policy limit not to exceed 30%), on-hand liquidity to total liabilities ratio (policy limit not to fall below 5%), the percentage of securities pledged to total securities (policy limit not to exceed 85%), primary liquidity to uninsured deposits excluding collateralized deposits (policy limit to maintain a minimum of 95%), primary liquidity to uninsured deposits including collateralized deposits (policy limit to maintain a minimum of 80%) and the ratio of brokered deposits to total deposits (policy limit not to exceed 15%). As of September 30, 2025, the Company was operating within its liquidity policy limits.

Asset liquidity is maintained by the maturity structure of loans, investment securities and other short-term investments. Management has policies and procedures governing the length of time to maturity on loans and investments. Normally, changes in the earning asset mix are of a longer-term nature and are not used for day-to-day corporate liquidity needs.

Our liabilities provide liquidity on a day-to-day basis. Daily liquidity needs are met from deposit levels or from our use of federal funds purchased, securities sold under agreements to repurchase, interest-bearing deposits at other banks and other short-term borrowings. We engage in routine activities to retain deposits intended to enhance our liquidity position. These routine activities include various measures, such as the following:

• Emphasizing relationship banking to new and existing customers, where borrowers are encouraged and normally expected to maintain deposit accounts with our Bank;
• Pricing deposits, including certificates of deposit, at rate levels that will attract and /or retain balances of deposits that will enhance our Bank’s asset/liability management and net interest margin requirements; and
• Continually working to identify and introduce new products that will attract customers or enhance our Bank’s appeal as a primary provider of financial services.

Our non-acquired loan portfolio increased in the nine months ended September 30, 2025 by approximately $3.2 billion, or approximately 14.7% annualized, compared to the balance at December 31, 2024. The increase from December 31, 2024 was mainly related to organic growth and renewals of acquired loans that are moved to our non-acquired loan portfolio. The acquired loan portfolio increased by $10.5 billion from the balance at December 31, 2024 due to acquisition of the Independent loan portfolio of $13.1 billion during the first quarter of 2025. The acquired loans portfolio had reductions totaling $2.5 billion through principal paydowns, charge-offs, foreclosures and renewals of acquired loans during the first nine months of 2025.

Our investment securities portfolio (excluding trading securities) increased by $1.7 billion in the nine months ended September 30, 2025, compared to the balance at December 31, 2024. Increases in the investment securities portfolio came from $1.6 billion in securities acquired in the Independent acquisition and $5.2 billion in investment securities purchased during the first nine months of 2025, including securities purchased from reinvesting funds provided by the sales of securities acquired from Independent and the securities repositioning completed during the first quarter of 2025. The securities repositioning improved the yield and shortened the duration of the investment portfolio. The increases in investment securities from the acquisition and purchases were partially offset as a result of maturities, calls, sales and paydowns of investment securities totaling $5.3 billion and a reduction from the net amortization of premiums of $8.2 million. The net unrealized loss of the available for sale securities decreased during the first nine months of 2025 by $383.1 million mainly through the securities repositioning and the recognition of losses in the portfolio. Of the $5.2 billion in purchases of investment securities during the quarter, $5.1 billion were in available for sale securities and $117.4 million were in other investment securities. There were no purchases of held to maturity securities during the quarter. Other investment securities purchased were mainly related to capital stock with the Federal Home Loan Bank and Federal Reserve Bank of which we sold back $45.1 million during 2025. The purchases in the Federal Home Loan Bank Stock and Federal Reserve Bank Stock during the quarter were mainly due to stock holding requirements related to the Independent acquisition. The Bank pledges a portion of its available for sale and held to maturity investment portfolios for a variety of purposes, including, but not limited to, collateral for public funds and credit with the Federal Home Loan Bank of Atlanta. As of September 30, 2025, the bank pledged 67.5% of the market value of its available-for-sale and held-to-maturity investment portfolios. As of September 30, 2025, the Bank had unpledged securities with a market value of $2.5 billion. These securities included Agency, Agency MBS, Municipals and Corporate securities.

Total cash and cash equivalents were $3.1 billion at September 30, 2025 compared to $1.4 billion at December 31, 2024. The increase in cash and cash equivalents was also due to the cash received from the sale-leaseback transaction of approximately $456.4 million, an increase in deposits, excluding deposits assumed from Independent, of approximately $803.7 million, and an increase in federal funds purchased and securities sold under agreements to repurchase of $79.2 million. The increase in deposits, excluding deposits assumed from Independent, was mainly due to increases in interest-bearing checking accounts and time deposit accounts. These increases were partially offset by cash used to fund net loan growth, excluding loans assumed from Independent, of $773.4 million.

At September 30, 2025, and December 31, 2024, we had $2.2 billion and $614.5 million of traditional, out–of–market brokered time deposits, respectively. At September 30, 2025, and December 31, 2024, we had $3.8 billion and $2.5 billion, respectively, of reciprocal deposits. At September 30, 2025, we also had $1.5 billion in brokered interest-bearing checking and money market accounts. The Company has allowed some higher costing local deposits run off in 2025 and replaced the deposits with brokered and other out of market deposits at lower interest rates. Total deposits were $54.1 billion at September 30, 2025, an increase of $16.0 billion from $38.1 billion at December 31, 2024. Our deposit growth since December 31, 2024 was mainly attributable to the deposits acquired in the Independent acquisition of $15.2 billion. See further discussion on changes in deposits in the Interest-Bearing Liabilities and Noninterest-Bearing Deposits section of this MD&A. Total short-term borrowings at September 30, 2025, were $594.1 million, consisting of $337.4 million in federal funds purchased and $256.7 million in securities sold under agreements to repurchase. Total long-term borrowings, consisting of trust preferred securities and subordinated debentures, increased by $304.9 million to $696.4 million at September 30, 2025. This increase was mainly due to $360.5 in corporate and subordinated debentures assumed in the Independent acquisition. The Company also issued $350.0 million in new subordinated debt in the second quarter of 2025 and subsequently paid-off $405.0 million in subordinated debt in the third quarter of 2025 that had reached its call date and the end of its fixed rate period. To the extent that we employ other types of non-deposit funding sources, typically to accommodate retail and correspondent customers, we continue to take in shorter maturities of such funds. Our current approach may provide an opportunity to sustain a low funding rate or possibly lower our cost of funds but could also increase our cost of funds if interest rates rise.

Deposit flows are significantly influenced by general and local economic conditions, changes in prevailing interest rates, internal pricing decisions, and competition. Our deposits are primarily obtained from depositors located around our branch footprint, and we believe that we have attractive opportunities to capture additional retail and commercial deposits in our markets, in addition to having access to brokered deposits. Of the $54.1 billion in total deposits at September 30, 2025, approximately 69% were insured or collateralized. The Bank has a granular deposit base comprised of over 1.4 million accounts, with an average deposit size of $38,000. Approximately 25% of total deposits are noninterest-bearing.

As discussed previously and presented below, the table below compares Primary Funding Sources to uninsured deposits as of September 30, 2025.

(Dollars in millions)

Through the operations of our Bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. We manage the credit risk on these commitments by subjecting them to normal underwriting and risk management processes. We believe that we have adequate sources of liquidity to fund commitments that are drawn upon by the borrowers. In addition to commitments to extend credit, we also issue standby letters of credit, which are assurances to third parties that they will not suffer a loss if our customer fails to meet its contractual obligation to the third-party. Although our experience indicates that many of these standby letters of credit will expire unused, through our various sources of liquidity, we believe that we will have the resources to meet these obligations should the need arise.

Our ongoing philosophy is to remain in a liquid position, as reflected by such indicators as the composition of our earning assets, typically including some level of reverse repurchase agreements; federal funds sold; balances at the Federal Reserve Bank; and/or other short-term investments; asset quality; well-capitalized position; and profitable operating results. Cyclical and other economic trends and conditions can disrupt our desired liquidity position at any time. We expect that these conditions would generally be of a short-term nature. Under such circumstances, we expect our reverse repurchase agreements and federal funds sold positions, or balances at the Federal Reserve Bank, if any, to serve as the primary source of immediate liquidity. We could draw on additional alternative immediate funding sources from lines of credit extended to us from our correspondent banks. The Bank may also access funds from borrowing facilities established with the Federal Home Loan Bank of Atlanta and the discount window of the Federal Reserve Bank of Atlanta.

At September 30, 2025, the Bank had a total FHLB credit facility of $5.6 billion, with no outstanding borrowings in short-term FHLB advances and $17.8 million in secured credit exposure at quarter-end, leaving $5.6 billion in availability on the FHLB credit facility. At September 30, 2025, the Bank had $12.0 billion of credit available at the Federal Reserve Bank’s discount window and federal funds credit lines of $300.0 million with no balances outstanding at September 30, 2025. The Bank has $2.5 billion in market value of unpledged securities at September 30, 2025, that can be pledged to attain additional funds if necessary. The Bank also has an internal limit on brokered deposits of 15% of total bank deposits, which would allow capacity of $8.1 billion at September 30, 2025. The Bank had $3.9 billion of outstanding brokered deposits at the end of the quarter-end leaving $4.2 billion in available capacity as per the internal policy limit of 15% of total bank deposits. All of the primary sources noted in the table above and the brokered deposit remaining available capacity would provide an additional $24.6 billion in funding if we needed additional liquidity. We can also consider actions such as deposit promotions to increase core deposits. The Company has a $100.0 million unsecured line of credit with U.S. Bank National Association with no balance outstanding at September 30, 2025. We believe that our liquidity position continues to be adequate and readily available.

In addition to adequate liquidity, the Company and Bank are considered well capitalized by all regulatory capital standards as the Company and the Bank were significantly above the required capital levels as of September 30, 2025. The Company’s tier 1 leverage ratio, CET 1 risk-based capital ratio and total risk-based capital ratio were 9.36%, 11.48% and 13.98%, respectively, at September 30, 2025. The Bank’s Tier 1 leverage ratio, CET 1 risk-based capital ratio and total risk-based capital ratio were 10.28%, 12.62% and 13.76%, respectively, at September 30, 2025. As permitted, we elected to exclude accumulated other comprehensive income related to available for sale securities from Tier 1, CET 1 and total risk-based capital; however, even if our unrealized losses as of September 30, 2025 in our available for sale and held to maturity investment portfolios were recognized by selling the portfolios for liquidity purposes, all else being equal, our regulatory capital ratios would remain well in excess of the minimum standards and continue to be in the “well capitalized” regulatory classification.

Our contingency funding plan describes several potential stages based on stressed liquidity levels. Liquidity key risk indicators are reported to the Board of Directors on a quarterly basis. As noted previously, we maintain various wholesale sources of funding. If our deposit retention efforts were to be unsuccessful, we would use these alternative sources of funding. Under such circumstances, depending on the external source of funds, our interest cost would vary based on the range of interest rates charged. This could increase our cost of funds, impacting our net interest margin and net interest spread.

Asset-Liability Management and Market Risk Sensitivity

Our earnings and the economic value of equity vary in relation to the behavior of interest rates and the accompanying fluctuations in market prices of certain of our financial instruments. We define interest rate risk as the risk to earnings and equity arising from the behavior of interest rates. These behaviors include increases and decreases in interest rates as well as continuation of the current interest rate environment.

Our interest rate risk principally consists of reprice, option, basis, and yield curve risk. Reprice risk results from differences in the maturity or repricing characteristics of asset and liability portfolios. Option risk arises from embedded options in the investment and loan portfolios such as investment securities calls and loan prepayment options. Option risk also exists since deposit customers may withdraw funds at their discretion in response to general market conditions, competitive alternatives to existing accounts or other factors. The exercise of such options may result in higher costs or lower revenue. Basis risk refers to the potential for changes in the underlying relationship between market rates or indices, which subsequently result in narrowing spreads on interest-earning assets and interest-bearing liabilities. Basis risk also exists in administered rate liabilities, such as interest-bearing checking accounts, savings accounts, and money market accounts where the price sensitivity of such products may vary relative to general markets rates. Yield curve risk refers to adverse consequences of nonparallel shifts in the yield curves of various market indices that impact our assets and liabilities.

We use simulation analysis as a primary method to assess earnings at risk and equity at risk due to assumed changes in interest rates. Management uses the results of its various simulation analyses in combination with other data and observations to formulate strategies designed to maintain interest rate risk within risk tolerances.

Simulation analysis involves the use of several assumptions including, but not limited to, the timing of cash flows such as the terms of contractual agreements, investment security calls, loan prepayment speeds, deposit attrition rates, the interest rate sensitivity of loans and deposits relative to general market rates, and the behavior of interest rates and spreads. The assumptions for loan prepayments, deposit decay, and nonstable deposit balances are derived from models that use historical bank data. These models are independently validated. Equity at risk simulation uses assumptions regarding discount rates that value cash flows. Simulation analysis is highly dependent on model assumptions that may vary from actual outcomes. Key simulation assumptions are subject to sensitivity analysis to assess the impact of assumption changes on earnings at risk and equity at risk. Model assumptions are reviewed by our Assumptions Committee. While the Bank is continuously refining its modeling methodology, the core principles of the methodology have remained stable over for several years.

Earnings at risk is defined as the percentage change in net interest income due to assumed changes in interest rates. Earnings at risk is generally used to assess interest rate risk over relatively short time horizons.

Equity at risk is defined as the percentage change in the net economic value of assets and liabilities due to changes in interest rates compared to a base net economic value. The discounted present value of all cash flows represents our economic value of equity. Equity at risk is generally considered a measure of the long-term interest rate exposures of the balance sheet at a point in time.

The earnings simulation models consider our contractual agreements with regard to investments, loans, deposits, borrowings, and derivatives as well as a number of behavioral assumptions applied to certain assets and liabilities.

Mortgage banking derivatives used in the ordinary course of business consist of forward sales contracts and interest rate lock commitments on residential mortgage loans. These derivatives involve underlying items, such as interest rates, and are designed to mitigate risk. Derivatives are also used to hedge mortgage servicing rights. For additional information see Note 16 — Derivative Financial Instruments in the consolidated financial statements.

From time to time, we execute interest rate swaps to hedge some of our interest rate risks. Under these arrangements, the Company enters into a variable rate loan with a client in addition to a swap agreement. The swap agreement effectively converts the client’s variable rate loan into a fixed rate loan. The Company then enters into a matching swap agreement with a third-party dealer to offset its exposure on the customer swap. The Company may also execute interest rate swap agreements that are not specific to client loans. As of September 30, 2025, the Company had a series of short-term interest rate hedges to address monthly accrual mismatches related to the Company’s ARC program and its transition from LIBOR to SOFR after June 30, 2023. For additional information on these derivatives refer to Note 16 — Derivative Financial Instruments in the consolidated financial statements.

Our interest rate risk key indicators are applied to a static balance sheet using forward rates from the Moody’s Baseline Scenario. The Company will also use other rate forecasts, including, but not limited to, Moody’s Consensus Scenario. This Base Case Scenario assumes the maturity composition of asset and liability rollover volumes is modeled to approximately replicate current consolidated balance sheet characteristics throughout the simulation. These treatments are consistent with the Company’s goal of assessing current interest rate risk embedded in its current balance sheet. The Base Case Scenario assumes that maturing or repricing assets and liabilities are replaced at prices referencing forward rates derived from the selected rate forecast consistent with current balance sheet pricing characteristics. Key rate drivers are used to price assets and liabilities with sensitivity assumptions used to price non-maturity deposits. The sensitivity assumptions for the pricing of non-maturity deposits are subjected to sensitivity analysis no less frequently than on an annual basis.

Interest rate shocks are applied to the Base Case on an instantaneous basis. Our policy establishes the use of upward and downward interest rate shocks applied in 100 basis point increments through 400 basis points. We calculate smaller rate shocks as needed. At times, market conditions may result in assumed rate movements that will be deemphasized. For example, during a period of ultra-low interest rates, certain downward rate shocks may be impractical. The model simulation results produced from the Base Case Scenario and related instantaneous shocks for changes in net interest income and changes in the economic value of equity are referred to as the Core Scenario Analysis and constitute the policy key risk indicators for interest rate risk when compared to risk tolerances. As of September 30, 2025, the Company was operating within its interest rate key risk indicator policy limits.

During 2024 and for the nine months ended September 30, 2025, the beta assumption applied to deposits increased to reflect changes in deposit mix. From the beginning of the upward rate cycle, our deposit costs increased from five basis points to one hundred and ninety basis points. During that period, the federal funds rate increased 525 basis points, which implies a 35% beta. Management recognizes the difficulty in using historical data to forecast deposit betas in the current environment. For internal purposes, and based on the deposit mix as of September 30, 2025, the total deposit beta assumption was 44.3%. For internal forecasting, management will apply overlays to certain assumptions to adjust for current market conditions rather than use assumptions modeled over longer periods of time.

The following interest rate risk metrics are derived from analysis using the Moody’s Baseline Scenario published in October 2025 as the Base Case Scenario. As of September 30, 2025, the earnings simulations indicated that the year 1 impact of an instantaneous 100 basis point parallel increase / decrease in rates would result in an estimated 1.7% increase (up 100) and 1.9% decrease (down 100) in net interest income.

We use Economic Value of Equity (“EVE”) analysis as an indicator of the extent to which the present value of our capital could change, given potential changes in interest rates. This measure also assumes a static balance sheet (Base Case Scenario) with rate shocks applied as described above. At September 30, 2025, the percentage change in EVE due to a 100-basis point increase or decrease in interest rates was 1.8% decrease and 0.7% increase, respectively. The percentage changes in EVE due to a 200-basis point increase or decrease in interest rates were 4.4% decrease and 0.4% increase, respectively. Downward shocks are constrained on various balance sheet categories due to the inability to price products below floors or zero. This is particularly meaningful given the cost of deposits as of September 30, 2025.

The analysis below reflects a Base Case and shocked scenarios that assume a static balance sheet projection where volume is added to maintain balances consistent with current levels. Base Case assumes new and repricing volumes reference forward rates derived from the Moody’s Baseline rate forecast. Instantaneous, parallel, and sustained interest rate shocks are applied to the Base Case scenario over a one-year time horizon.

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Deposit Concentrations

As of September 30, 2025, and December 31, 2024, we have no material concentration of deposits from any single customer or group of customers. We have no significant portion of our deposits concentrated within a single industry or group of related industries. We do not believe there are any material seasonal factors that would have a material adverse effect on us. The total deposit balances held by top 10 and 20 deposit holders were below 4% and 6%, respectively, of the Company’s quarterly average total deposit balances at September 30, 2025. We do not have any foreign deposits.

Concentration of Credit Risk

Each category of earning assets has a certain degree of credit risk. We use various techniques to measure credit risk. Credit risk in the investment portfolio can be measured through bond ratings published by independent agencies. In the investment securities portfolio, the investments consist of U.S. government-sponsored entity securities, tax-free securities, or other securities having ratings of “AAA” to “Not Rated”. All securities, with the exception of those that are not rated, were rated by at least one of the nationally recognized statistical rating organizations. The credit risk of the loan portfolio can be measured by historical experience. We maintain our loan portfolio in accordance with credit policies that we have established. Although the Bank has a diversified loan portfolio, a substantial portion of our borrowers’ abilities to honor their contracts is dependent upon economic conditions within our geographic footprint and the surrounding regions.

We consider concentrations of credit to exist when, pursuant to regulatory guidelines, the amounts loaned to a multiple number of borrowers engaged in similar business activities which would cause them to be similarly impacted by general economic conditions represents 25% of total Tier 1 capital plus regulatory adjusted allowance for credit losses of the Company, or $1.6 billion at September 30, 2025. Based on this criteria, we had eight such credit concentrations at September 30, 2025, including loans to lessors of nonresidential buildings (except mini-warehouses) of $10.3 billion, loans secured by owner-occupied office buildings (including medical office buildings) of $2.4 billion, loans secured by owner-occupied nonresidential buildings (excluding office buildings) of $2.8 billion, loans to lessors of residential buildings (investment properties and multi-family) of $4.4 billion, loans secured by 1st mortgage 1-4 family owner-occupied residential property (including condos and home equity lines) of $10.8 billion, loans secured by jumbo loans (original loans greater than limit) of $3.2 billion, and loans secured by business assets including accounts receivable, inventory and equipment of $3.3 billion. The Company also has purchased commercial and industrial syndication and participation loans of $2.4 billion, some of which are also included in the business assets loans noted above. The risk for these loans and for all loans is managed collectively through the use of credit underwriting practices developed and updated over time. The loss estimate for these loans is determined using our standard ACL methodology.

After the adoption of CECL in the first quarter of 2020, banking regulators established guidelines for calculating credit concentrations. Banking regulators set the guidelines for construction, land development and other land loans to total less than 100% of total Tier 1 capital less modified CECL transitional amount plus ACL (CDL concentration ratio) and for total commercial real estate loans (construction, land development and other land loans along with other non-owner-occupied commercial real estate and multifamily loans) to total less than 300% of total Tier 1 capital less modified CECL transitional amount plus ACL (CRE concentration ratio). Both ratios are calculated by dividing certain types of loan balances for each of the two categories by the Bank’s total Tier 1 capital less modified CECL transitional amount plus ACL. At September 30, 2025, and December 31, 2024, the Bank’s CDL concentration ratio was 37.6% and 40.9%, respectively, and its CRE concentration ratio was 272.1% and 219.6%, respectively. As of September 30, 2025, the Bank was below the established regulatory guidelines. When a bank’s ratios are in excess of one or both of these loan concentration ratios guidelines, banking regulators generally require an increased level of monitoring in these lending areas by bank management. Therefore, we monitor these two ratios as part of our concentration management processes.

Reconciliation of GAAP to Non-GAAP

The return on average tangible equity is a non-GAAP financial measure that excludes the effect of the average balance of intangible assets and adds back the after-tax amortization of intangibles to GAAP basis net income. Management believes these non-GAAP financial measures provide additional information that is useful to investors in evaluating our performance and capital and may facilitate comparisons with other institutions in the banking industry as well as period-to-period comparisons. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, are not audited, and may not be comparable to other similarly titled financial measures used by other companies. Investors should not consider non-GAAP measures in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP.

(Dollars in thousands)

Cautionary Note Regarding Any Forward-Looking Statements

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

Risks relating to our Business and Business Strategy

• Economic volatility risk, as a result of monetary, fiscal and trade law policies, such as tariffs, and inflation, potentially resulting in higher rates, deterioration in the credit markets, greater than expected noninterest expenses, excessive loan losses and other negative consequences, or on the other hand, lower rates, which also may have other negative consequences, which risks could be exacerbated by potential negative economic developments resulting from federal spending cuts and/or one or more federal budget-related impasses or actions;
• Risks relating to the merger and integration of SouthState and Independent, including, among others, (i) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (ii) the risk that the integration of Independent’s operations into SouthState’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate Independent’s businesses into SouthState’s businesses, (iii) the amount of the costs, fees, expenses and charges related to the merger, (iii) the risk of deposit attrition, client loss or revenue loss that may be greater than anticipated, and (iv) reputational risk and the reaction of each company’s customers, supplies, employees or other business partners to the merger;
• Risks related to the ability of the Company to pursue its strategic plans which depend upon certain growth goals in our lines of business which are dependent on a variety of factors including economic conditions in the U.S. and globally, geopolitical factors including tariffs, competition, and the regulatory environment;
• Interest rate risk and a decrease in our net interest income primarily resulting from our inability to effectively manage the risk, and its impact on the Bank’s earnings, including from the correspondent and mortgage divisions, housing demand and changes in mortgage conditions, the market value of the Bank’s loan and securities portfolios, and the market value of SouthState’s equity;
• Inflationary risks negatively impacting our business and profitability, earnings and budgetary projections, or demand for our products and services;
• Risks related to the costs of funds and our profitability and liquidity, and changes in our deposit mix and growth;
• Compliance, reputational and operational risks related to implementing new lines of business or new products and services and our failure to successfully manage such risks;
• The impact of increasing digitization of the banking industry and movement of customers to on-line platforms, and the possible impact on the Bank’s results of operations, customer base, expenses, suppliers and operations;
• Risks related to the potential deterioration in real estate values and other adverse changes in mortgage conditions, higher risks inherent in a loan portfolio that includes commercial real estate loans, environmental risks in our lending activities, and risks that appraisals used in deciding whether to make a loan that is secured by real estate not ensuring the value of the real property collateral;
• Risks related to (i) our ability to effectively manage credit risk, interest rate risk and liquidity risk affecting the Bank’s ability to meet its obligations when they come due; and (ii) an obligor’s failure to meet the terms of any contract with the Bank or otherwise fail to perform as agreed under the terms of any loan-related document;
• The results of our most recent stress tests not accurately predicting the impact on our financial condition if the economy were to deteriorate;
• The impact of the Current Expected Credit Loss standard, merger activity, and global events on our allowance for credit losses;
• Risks related to maintaining adequate levels of capital to support our operations and the availability of additional capital when needed due to our size and continued pace of growth;
• Controls and procedures risk, including the potential failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures;
• Reputational and operational risks associated with sustainability, stewardship and governance matters, including the impact of state legislation and inconsistent federal and state regulatory guidance and regulation;
• Risks related to losses arising from errors, omissions or fraudulent behavior by employees, clients, counterparties and third parties;
• Increased risk from the adoption and use of artificial intelligence tools by us and our third party vendors and service providers, including risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients, counterparties or other third parties;
• Risks related to our reliance on and our ability to retain our culture and attract, retain, develop, and motivate qualified and highly skilled personnel as we grow and are located in new markets, and being able to offer competitive salaries and benefits, including flexibility of working remotely or in the office;
• Cybersecurity risk related to the dependence of SouthState on internal computer systems and the technology of outside service providers, as well as the potential impacts of internal or external security breaches, which may subject the Company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events;
• Transaction risk arising from problems with service or product delivery, and strategic risk resulting from adverse business decisions or improper implementation of business decisions;
• Reputation risk that adversely affects earnings or capital arising from negative public opinion including the effects of social media on market perceptions of us and banks generally;
• Operational, technological, cultural, regulatory, legal, credit and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash consideration;
• Risks related to unexpected outflows of uninsured deposits requiring us to sell investment securities at a loss, price risks focusing on changes in market factors that may affect the value of traded instruments in “mark-to-market” portfolios, and the loss of value of our investment portfolio negatively impacting market perceptions of us, possibly resulting in deposit withdrawals;
• Risks relating to consumers opting not to use banks to complete their financial transactions; and
• Reputational risk and possible higher than estimated reduced revenue from previously announced or proposed regulatory changes in the Bank’s consumer programs and products.

Risks relating to the Regulatory Environment

• Risks related to the heightened expectations of regulatory agencies exposing the Company 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;
• Regulatory change risk resulting from new laws, rules, regulations, accounting principles, proscribed practices or ethical standards, including, without limitation, the possibility that regulatory agencies may require higher levels of capital above the current regulatory-mandated minimums, the impact of special FDIC assessments, the effects of Consumer Financial Protection Bureau regulations or other guidance, changes in policies and standards for regulatory review of bank mergers, challenges to our income tax provision following changes to tax laws, regulations or interpretations, and the possibility of changes in accounting standards, policies, principles and practices;
• Compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards, and contractual obligations regarding data privacy and cybersecurity; and
• Risks relating to the legal, regulatory and supervisory environment, including periodic examination and scrutiny by a number of banking agencies and any adjustments to our business resulting from such examinations, changes in financial services legislation and capital regulatory requirements, regulations, policies or government officials or other personnel.

Risks relating to our Common Stock

• Risks related to state law and provisions in our articles of incorporation or bylaws that make it more difficult for another company to purchase us; and
• Risks related to: (i) shares of our Common Stock not being insured deposits and losing value; (ii) future capital needs resulting in dilution of shareholder investment; (iii) our ability to pay dividends which is subject to legal and regulatory limitations as well as the discretion of the board of directors of SouthState, SouthState’s performance and other factors; (iv) dilution in our common stock resulting from issuing stock as consideration in a potential merger or acquisition, future capital needs, or increased trading volume in our common stock in the public market; (v) rights of our holders of our junior subordinated debentures that are senior to those of our common shareholders; (vi) volatility of our stock price stock that may or may not reflect economic condition or performance of SouthState; and (vii) our institutional shareholders, exercising significant influence over us and having interests that differ from our other shareholders.

Risks relating to Economic Conditions and Other Outside Forces

• Geopolitical and economic risks and market volatility associated with the political and economic environment and uncertainty surrounding the potential legal, regulatory, and policy changes resulting from a new U.S. presidential administration, changes in the fiscal and monetary policies of the federal government and its agencies, and changes to and instability in global economic conditions and geopolitical matters, including as a result of possible tariffs or other trade disruptions;
• Risks related to a slowdown in economic growth or a resumption of recessionary economic conditions impacting inflationary pressures and interest rates to dampen demand could adversely affect consumer confidence, loan payment patterns, and our charge-offs and the provision for credit losses;
• Volatility in the financial services industry (including failures or rumors of failures of other depository institutions), along with actions taken by governmental agencies to address such turmoil, could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital;
• The impact of competition with other financial institutions, including deposit and loan pricing pressures and the resulting impact, including as a result of compression to net interest margin;
• Catastrophic events such as hurricanes, tornados, earthquakes, floods or other natural or human disasters, including public health crises and infectious disease outbreaks, as well as any government actions in response to such events, and the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on SouthState and its customers and other constituencies; and
• Risks that lawsuits, legal proceedings, information-gathering requests, investigations, and proceedings by governmental and self-regulatory agencies result in significant civil or criminal penalties, including monetary penalties, damages, adverse judgments, settlements, fines, injunctions, restrictions on the way the Company and the Bank conduct their business, or reputational harm.

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

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

There have been no material changes in our quantitative and qualitative disclosures about market risk as of September 30, 2025, from those disclosures presented in our Annual Report on Form 10-K for the year ended 2024.

Evaluation of Disclosure Controls and Procedures

SouthState’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of SouthState’s disclosure controls and procedures as of September 30, 2025, in accordance with Rule 13a-15 of the Securities Exchange Act of 1934. We applied our judgment in the process of reviewing these controls and procedures, which, by their nature, can provide only reasonable assurance regarding our control objectives. Based upon that evaluation, our Chief Executive Officer and the Chief Financial Officer concluded that SouthState’s disclosure controls and procedures as of September 30, 2025, were effective to provide reasonable assurance regarding our control objectives.

The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control over Financial Reporting

During the first quarter of 2025, Independent merged into SouthState Bank Corporation. We integrated Independent into our overall internal control over financial reporting processes during the second quarter of 2025. Except for changes made in connection with this integration of Independent, there has been no change in our internal control over financial reporting during the nine months ended September 30, 2025, that has materially affected, or is likely to materially affect, our internal control over financial reporting.

Investing in shares of our common stock involves certain risks, including those identified and described in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as well as cautionary statements contained in this Quarterly Report on Form 10-Q, including those under the caption “Cautionary Note Regarding Any Forward-Looking Statements” set forth in Part I, Item 2. of this Quarterly Report on Form 10-Q, risks and matters described elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the SEC.

There have been no material changes to the risk factors disclosed in Item 1A. of Part I in our Annual Report on Form 10-K for the year ended December 31, 2024.