South State (US:SSB)2026-02-20 13:28Financial Overview - As of December 31, 2025, SouthState Bank Corporation had approximately $67.2 billion in assets, $48.6 billion in loans, and $55.1 billion in deposits[17]. - The market capitalization of SouthState Bank Corporation was approximately $9.3 billion as of December 31, 2025[17]. - The deposit portfolio was comprised of 24% noninterest-bearing deposits and 76% interest-bearing deposits as of December 31, 2025[27]. Loan Portfolio Composition - The loan portfolio consisted of 58% commercial real estate loans ($28.0 billion), 21% residential real estate loans ($10.5 billion), 19% commercial and industrial loans ($9.2 billion), and 2% other consumer loans ($1.0 billion)[21][22][23][24]. - As of December 31, 2025, total reported loans for construction, land development, and other land were 35.2% of the Bank's total Tier 1 capital plus the allowance for credit losses[98]. - Total reported loans secured by multifamily and non-farm nonresidential properties were 271.8% of the Bank's total Tier 1 capital plus the allowance for credit losses[98]. Employee and Workforce Management - As of December 31, 2025, the company had 6,190 full-time employees, an increase from 4,986 in 2024, with a voluntary turnover rate of 11.82% for all team members[46]. - The company hired 1,786 team members during fiscal year 2025, with 96.98% of employees located in its eight-state branch footprint[46]. - Approximately 25.7% of employees work effectively from remote locations, supported by flexible work options[54]. Regulatory Environment - The company is subject to extensive regulation and supervision under federal and state law, affecting its business operations and earnings[58]. - The Bank is subject to limitations on loans to affiliates, with individual loans capped at 10% of the Bank's capital and surplus, and total transactions limited to 20%[67]. - The company must maintain compliance with capital requirements set by federal banking agencies, which may require higher capital levels based on size and risk profile[84]. Capital and Liquidity Management - The required CET1 risk-based capital ratio is 4.5%, with a capital conservation buffer of 2.5%, necessitating a minimum CET1 capital ratio of 7% to avoid restrictions on capital distributions[87]. - As of December 31, 2025, the Company's Tier 1 leverage ratio was 9.26%, significantly above the minimum requirement of 4%[92]. - The company may need to raise additional capital in the future to meet regulatory requirements, but there is no assurance that such capital will be available on acceptable terms[168]. Strategic Growth and Mergers - The company aims to grow organically and through strategic mergers and acquisitions, focusing on institutions that enhance its footprint and market diversification[34]. - The Independent Merger, completed on January 1, 2025, is expected to yield synergies such as enhanced revenues and cost savings, but its success depends on effective integration[132]. - Future expansion strategies may include mergers and acquisitions, with a focus on organic growth and acquiring culturally similar financial institutions[205]. Risk Management - The company must manage credit risk effectively, as any failure could adversely affect its financial condition and results of operations[160]. - The company faces operational risks, including fraud and errors, which could lead to financial losses and reputational harm[177]. - The anticipated benefits from strategic initiatives may not be fully realized, potentially affecting future profitability[135]. Technology and Innovation - The company plans to implement an AI strategy to enhance operational efficiency and reduce bias, alongside expanding digital banking capabilities[135]. - The company continues to invest significantly in information technology and cybersecurity systems, including cloud-based applications, to enhance functionality and security, improve operating efficiency, and streamline client experience[190]. - The adoption of artificial intelligence tools is expected to enhance efficiency, but it also introduces risks related to errors and compliance with regulations[151]. Economic and Market Conditions - Inflation remains a concern, with the rate for 2025 exceeding the Federal Reserve's 2% target, potentially impacting profitability and consumer purchasing power[141]. - The cost of funds may increase due to competitive pressures and economic conditions, affecting profitability and liquidity[143]. - The mortgage line of business is sensitive to interest rate changes, with a substantial decrease in mortgage volume as interest rates increased, potentially impacting profitability targets[172]. Corporate Social Responsibility - The Corporate Social Responsibility Report for 2025 highlights the company's commitment to environmental and corporate stewardship initiatives[56]. - The company has committed to building a diverse workforce and enhancing corporate stewardship through various initiatives and councils established over the past five years[47]. Cybersecurity and Data Privacy - The company is subject to extensive data privacy and cybersecurity regulations, including the Gramm-Leach-Bliley Act, which requires the implementation of a comprehensive cybersecurity program[114]. - Cybersecurity risks have increased significantly, with potential exposure to cyber-attacks and information security breaches that could adversely affect business operations and reputation[196]. - The company experienced a cybersecurity incident in February 2024, leading to a pending class action lawsuit, although no material losses have been reported to date[203].