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What changed in SouthState Bank Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SouthState Bank Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+397 added−439 removedSource: 10-K (2025-02-21) vs 10-K (2024-03-04)

Top changes in SouthState Bank Corp's 2024 10-K

397 paragraphs added · 439 removed · 305 edited across 1 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

305 edited+92 added−134 removed131 unchanged
Biggest changeThe following table presents a summary of net charge off ratios by loan segment, for the year ended December 31, 2023 and 2022: Table 18—Disaggregated Net Recovery (Charge Off) Ratio by Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2023 ​ December 31, 2022 (Dollars in thousands) ​ Net Recovery (Charge Off) ​ Average Balance ​ Net Recovery (Charge Off) Ratio Net Recovery (Charge Off) ​ Average Balance ​ Net Recovery (Charge Off) Ratio Residential Mortgage Senior ​ $ 735 ​ $ 6,399,401 ​ 0.01 % ​ $ 1,036 ​ $ 4,792,864 ​ 0.02 % Residential Mortgage Junior ​ 108 ​ 12,142 ​ 0.89 % ​ 212 ​ 13,835 ​ 1.53 % Revolving Mortgage ​ 1,073 ​ 1,422,717 ​ 0.08 % ​ 3,536 ​ 1,294,044 ​ 0.27 % Residential Construction ​ 128 ​ 823,952 ​ 0.02 % ​ (13) ​ 756,730 ​ (0.00) % Other Construction and Development ​ 462 ​ 1,981,715 ​ 0.02 % ​ 1,100 ​ 1,669,834 ​ 0.07 % Consumer ​ (9,795) ​ 1,253,419 ​ (0.78) % ​ (7,788) ​ 1,151,578 ​ (0.68) % Multifamily ​ ​ 41 ​ ​ 857,100 ​ 0.00 % ​ ​ — ​ ​ 588,305 ​ — % Municipal ​ ​ — ​ ​ 733,406 ​ — % ​ ​ — ​ ​ 685,538 ​ — % Owner Occupied Commercial Real Estate ​ ​ 812 ​ ​ 5,531,908 ​ 0.01 % ​ ​ (649) ​ ​ 5,330,711 ​ (0.01) % Non-Owner Occupied Commercial Real Estate ​ ​ 658 ​ ​ 7,608,018 ​ 0.01 % ​ ​ 213 ​ ​ 6,998,540 ​ 0.00 % Commercial and Industrial ​ (19,088) ​ 4,779,513 ​ (0.40) % ​ (1,920) ​ 4,174,155 ​ (0.05) % Total ​ $ (24,866) ​ $ 31,403,291 ​ (0.08) % $ (4,273) ​ $ 27,456,134 ​ (0.02) % ​ ​ 89 Table of Contents The following table presents a summary of the changes in the ACL, for the years ended December 31, 2023, 2022 and 2021: Table 19—Summary of the Changes in ACL ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ Non-PCD ​ PCD ​ ​ ​ Non-PCD ​ PCD ​ ​ ​ Non-PCD ​ PCD ​ ​ (Dollars in thousands) ​ Loans ​ Loans ​ Total ​ Loans ​ Loans ​ Total ​ Loans ​ Loans ​ Total Allowance for credit losses at January 1 $ 309,606 ​ $ 46,838 ​ $ 356,444 ​ $ 225,227 ​ $ 76,580 ​ $ 301,807 ​ $ 315,470 ​ $ 141,839 ​ $ 457,309 ​ ACL - PCD loans for ACBI merger — ​ ​ — ​ — ​ — ​ ​ 13,758 ​ 13,758 ​ — ​ ​ — ​ — ​ Loans charged-off (39,077) ​ ​ (1,571) ​ (40,648) ​ (17,332) ​ ​ (6,114) ​ (23,446) ​ (14,391) ​ ​ (2,508) ​ (16,899) ​ Recoveries of loans previously charged off 9,987 ​ ​ 5,795 ​ 15,782 ​ 12,140 ​ ​ 7,033 ​ 19,173 ​ 7,778 ​ ​ 6,022 ​ 13,800 ​ Net (charge-offs) recoveries (29,090) ​ ​ 4,224 ​ (24,866) ​ (5,192) ​ ​ 919 ​ (4,273) ​ (6,613) ​ ​ 3,514 ​ (3,099) ​ Initial provision for credit losses - ACBI — ​ ​ — ​ — ​ 13,697 ​ ​ — ​ 13,697 ​ — ​ ​ — ​ — ​ Provision (recovery) for credit losses ​ 143,360 ​ ​ (18,365) ​ 124,995 ​ 75,874 ​ ​ (44,419) ​ 31,455 ​ (83,630) ​ ​ (68,773) ​ (152,403) ​ Balance at end of period $ 423,876 ​ $ 32,697 ​ $ 456,573 ​ $ 309,606 ​ $ 46,838 ​ $ 356,444 ​ $ 225,227 ​ $ 76,580 ​ $ 301,807 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans, net of unearned income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At period end ​ $ 32,388,489 ​ ​ ​ ​ ​ ​ ​ $ 30,177,862 ​ ​ ​ ​ ​ ​ ​ $ 23,928,166 ​ ​ ​ ​ ​ ​ ​ Average ​ 31,403,291 ​ ​ ​ ​ ​ ​ ​ 27,456,134 ​ ​ ​ ​ ​ ​ ​ 24,118,512 ​ ​ ​ ​ ​ ​ ​ Net charge-offs as a percentage of average loans (annualized) ​ 0.08 % ​ ​ ​ ​ ​ ​ 0.02 % ​ ​ ​ ​ ​ ​ 0.01 % ​ ​ ​ ​ ​ ​ Allowance for credit losses as a percentage of period end loans ​ 1.41 % ​ ​ ​ ​ ​ ​ 1.18 % ​ ​ ​ ​ ​ ​ 1.26 % ​ ​ ​ ​ ​ ​ Allowance for credit losses as a percentage of period end non-performing loans (“NPLs”) ​ 249.90 % ​ ​ ​ ​ ​ ​ 328.29 % ​ ​ ​ ​ ​ ​ 375.94 % ​ ​ ​ ​ ​ ​ * Net charge-offs at December 31, 2023, 2022 and 2021 include automated overdraft protection (“AOP”) and insufficient fund (“NSF”) principal net charge-offs of $6.8 million, $6.5 million and $4.6 million, respectively, that are included in the consumer classification above. ** Average loans, net of unearned income does not include loans held for sale. 3 Deposits We rely on deposits by our customers as the primary source of funds for the continued growth of our loan and investment securities portfolios.
Biggest changeTable 19—Allocation of the Allowance by Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ (Dollars in thousands) Amount % * Amount % * Residential Mortgage Senior ​ ​ $ 42,687 22.4 % $ 78,052 21.8 % Residential Mortgage Junior ​ ​ 432 0.1 % 745 0.0 % Revolving Mortgage ​ ​ 14,845 4.8 % 10,942 4.6 % Residential Construction ​ ​ 9,298 1.1 % 5,024 2.1 % Other Construction and Development ​ ​ 65,553 5.2 % 65,772 6.8 % Consumer ​ ​ 17,484 3.1 % 23,331 3.8 % Multifamily ​ ​ ​ 22,279 ​ 4.7 % ​ 13,766 ​ 2.7 % Municipal ​ ​ ​ 1,197 ​ 2.3 % ​ 900 ​ 2.3 % Owner-Occupied Commercial Real Estate ​ ​ ​ 78,753 ​ 16.9 % ​ 71,580 ​ 16.9 % Non-Owner-Occupied Commercial Real Estate ​ ​ ​ 111,538 ​ 23.1 % ​ 137,055 ​ 23.8 % Commercial and Industrial ​ ​ 101,214 16.3 % 49,406 15.1 % Total ​ $ 465,280 100.0 % $ 456,573 100.0 % * Loan balance in each category expressed as a percentage of total loans. ​ 90 Table of Contents The following table presents a summary of net charge off ratios by loan segment, for the year ended December 31, 2024 and 2023: Table 20—Disaggregated Net Recovery (Charge Off) Ratio by Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 ​ December 31, 2023 (Dollars in thousands) ​ Net Recovery (Charge Off) ​ Average Balance ​ Net Recovery (Charge Off) Ratio Net Recovery (Charge Off) ​ Average Balance ​ Net Recovery (Charge Off) Ratio Residential Mortgage Senior ​ $ (379) ​ $ 7,369,909 ​ (0.01) % ​ $ 735 ​ $ 6,399,401 ​ 0.01 % Residential Mortgage Junior ​ 222 ​ 18,642 ​ 1.19 % ​ 108 ​ 12,142 ​ 0.89 % Revolving Mortgage ​ 949 ​ 1,546,347 ​ 0.06 % ​ 1,073 ​ 1,422,717 ​ 0.08 % Residential Construction ​ (263) ​ 517,782 ​ (0.05) % ​ 128 ​ 823,952 ​ 0.02 % Other Construction and Development ​ (868) ​ 1,970,675 ​ (0.04) % ​ 462 ​ 1,981,715 ​ 0.02 % Consumer ​ (5,664) ​ 1,139,980 ​ (0.50) % ​ (9,795) ​ 1,253,419 ​ (0.78) % Multifamily ​ ​ 66 ​ ​ 1,234,870 ​ 0.01 % ​ ​ 41 ​ ​ 857,100 ​ 0.00 % Municipal ​ ​ — ​ ​ 761,195 ​ — % ​ ​ — ​ ​ 733,406 ​ — % Owner-Occupied Commercial Real Estate ​ ​ (380) ​ ​ 5,554,828 ​ (0.01) % ​ ​ 812 ​ ​ 5,531,908 ​ 0.01 % Non-Owner-Occupied Commercial Real Estate ​ ​ 1,184 ​ ​ 7,889,448 ​ 0.02 % ​ ​ 658 ​ ​ 7,608,018 ​ 0.01 % Commercial and Industrial ​ (13,111) ​ 5,128,543 ​ (0.26) % ​ (19,088) ​ 4,779,513 ​ (0.40) % Total ​ $ (18,244) ​ $ 33,132,219 ​ (0.06) % $ (24,866) ​ $ 31,403,291 ​ (0.08) % The following table presents a summary of the changes in the ACL, for the years ended December 31, 2024, 2023 and 2022: Table 21—Summary of the Changes in ACL ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ Non-PCD ​ PCD ​ ​ ​ Non-PCD ​ PCD ​ ​ ​ Non-PCD ​ PCD ​ ​ (Dollars in thousands) ​ Loans ​ Loans ​ Total ​ Loans ​ Loans ​ Total ​ Loans ​ Loans ​ Total Allowance for credit losses at January 1 $ 423,876 ​ $ 32,697 ​ $ 456,573 ​ $ 309,606 ​ $ 46,838 ​ $ 356,444 ​ $ 225,227 ​ $ 76,580 ​ $ 301,807 ​ ACL - PCD loans for ACBI merger — ​ ​ — ​ — ​ — ​ ​ — ​ — ​ — ​ ​ 13,758 ​ 13,758 ​ Loans charged-off (30,347) ​ ​ (4,723) ​ (35,070) ​ (39,077) ​ ​ (1,571) ​ (40,648) ​ (17,332) ​ ​ (6,114) ​ (23,446) ​ Recoveries of loans previously charged off 12,433 ​ ​ 4,393 ​ 16,826 ​ 9,987 ​ ​ 5,795 ​ 15,782 ​ 12,140 ​ ​ 7,033 ​ 19,173 ​ Net (charge-offs) recoveries (17,914) ​ ​ (330) ​ (18,244) ​ (29,090) ​ ​ 4,224 ​ (24,866) ​ (5,192) ​ ​ 919 ​ (4,273) ​ Initial provision for credit losses - ACBI — ​ ​ — ​ — ​ — ​ ​ — ​ — ​ 13,697 ​ ​ — ​ 13,697 ​ Provision (recovery) for credit losses ​ 38,997 ​ ​ (12,046) ​ 26,951 ​ 143,360 ​ ​ (18,365) ​ 124,995 ​ 75,874 ​ ​ (44,419) ​ 31,455 ​ Balance at end of period $ 444,959 ​ $ 20,321 ​ $ 465,280 ​ $ 423,876 ​ $ 32,697 ​ $ 456,573 ​ $ 309,606 ​ $ 46,838 ​ $ 356,444 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans, net of unearned income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At period end ​ $ 33,902,927 ​ ​ ​ ​ ​ ​ ​ $ 32,388,489 ​ ​ ​ ​ ​ ​ ​ $ 30,177,862 ​ ​ ​ ​ ​ ​ ​ Average ​ 33,132,219 ​ ​ ​ ​ ​ ​ ​ 31,403,291 ​ ​ ​ ​ ​ ​ ​ 27,456,134 ​ ​ ​ ​ ​ ​ ​ Net charge-offs as a percentage of average loans (annualized) ​ 0.06 % ​ ​ ​ ​ ​ ​ 0.08 % ​ ​ ​ ​ ​ ​ 0.02 % ​ ​ ​ ​ ​ ​ Allowance for credit losses as a percentage of period end loans ​ 1.37 % ​ ​ ​ ​ ​ ​ 1.41 % ​ ​ ​ ​ ​ ​ 1.18 % ​ ​ ​ ​ ​ ​ Allowance for credit losses as a percentage of period end non-performing loans (“NPLs”) ​ 220.94 % ​ ​ ​ ​ ​ ​ 249.90 % ​ ​ ​ ​ ​ ​ 328.29 % ​ ​ ​ ​ ​ ​ * Net charge-offs at December 31, 2024, 2023 and 2022 include automated overdraft protection (“AOP”) and insufficient fund (“NSF”) principal net charge-offs of $2.8 million, $6.8 million and $6.5 million, respectively, that are included in the consumer classification above. ** Average loans, net of unearned income does not include loans held for sale. 3 ​ ​ 91 Table of Contents Deposits We rely on deposits by our customers as the primary source of funds for the continued growth of our loan and investment securities portfolios.
Accordingly, our significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in Note 1 of our audited consolidated financial statements. The following is a summary of our critical accounting policies that are highly dependent on estimates, assumptions and judgments.
Accordingly, our significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in Note 1—Summary of Significant Accounting Policies of our audited consolidated financial statements. The following is a summary of our critical accounting policies that are highly dependent on estimates, assumptions and judgments.
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.
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 an acceptable composition of our asset/liability mix.
We encourage you to read this discussion and analysis in conjunction with the financial statements and the related notes and the other information included in this Report. Overview SouthState is a financial holding company headquartered in Winter Haven, Florida, and was incorporated under the laws of South Carolina in 1985.
We encourage you to read this discussion and analysis in conjunction with the financial statements and the related notes and the other information included in this Report. Overview SouthState Corporation is a financial holding company headquartered in Winter Haven, Florida, and was incorporated under the laws of South Carolina in 1985.
Of this amount, we repurchased 1,312,038 shares, at an average price of $83.99 per share (excluding cost of commissions) for a total of $110.2 million during 2022. ​ ​ 58 Table of Contents On April 27, 2022, the Company’s Board of Directors approved a new stock repurchase program (“2022 Stock Repurchase Program”) authorizing the Company to repurchase up to 3,750,000 of the Company’s common shares along with the remaining authorized shares of 370,021 from the 2021 Stock Repurchase Plan for a total authorization of 4,120,021 shares.
Of this amount, we repurchased 1,312,038 shares, at an average price of $83.99 per share (excluding cost of commissions) for a total of $110.2 million during 2022. ​ ​ 61 Table of Contents On April 27, 2022, the Company’s Board of Directors approved a new stock repurchase program (“2022 Stock Repurchase Program”) authorizing the Company to repurchase up to 3,750,000 of the Company’s common shares along with the remaining authorized shares of 370,021 from the 2021 Stock Repurchase Plan for a total authorization of 4,120,021 shares.
We do not currently intend to sell the securities within the portfolio and it is not more-likely-than-not that we will be required to sell the debt securities. ​ 79 Table of Contents Also, as part of our evaluation of our intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, we consider our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position.
We do not currently intend to sell the securities within the portfolio and it is not more-likely-than-not that we will be required to sell the debt securities. ​ 80 Table of Contents Also, as part of our evaluation of our intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, we consider our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position.
We 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 $1.2 billion at December 31, 2023.
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 $1.2 billion at December 31, 2024.
Bank National Association with no balance outstanding at December 31, 2023. We believe that our liquidity position continues to be adequate and readily available. ​ 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. We maintain various wholesale sources of funding.
Bank National Association with no balance outstanding at December 31, 2024. We believe that our liquidity position continues to be adequate and readily available. ​ 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. We maintain various wholesale sources of funding.
Federal funds purchased and securities sold under agreements to repurchase most typically have maturities within one to three days from the transaction date. Certain of these borrowings have no defined maturity date. Note 11 — Other Borrowings in our audited financial statements provide provides a profile of short-term FHLB advances, FRB borrowings and the U.S.
Federal funds purchased and securities sold under agreements to repurchase most typically have maturities within one to three days from the transaction date. Certain of these borrowings have no defined maturity date. Note 10 — Other Borrowings in our audited financial statements provide provides a profile of short-term FHLB advances, FRB borrowings and the U.S.
Should the Company need to sell its available for sale and held to maturity securities for liquidity purposes and recognize the unrealized losses as of December 31, 2023 through earnings, all else equal, our capital ratios would remain well in excess of the minimum standards and continue to be in the “well capitalized” regulatory classification.
Should the Company need to sell its available for sale and held to maturity securities for liquidity purposes and recognize the unrealized losses as of December 31, 2024 through earnings, all else equal, our capital ratios would remain well in excess of the minimum standards and continue to be in the “well capitalized” regulatory classification.
The total deposit balances held by top 10 and 20 deposit holders were below 5% of the Company’s average total deposit balances at December 31, 2023 and 2022. 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.
The total deposit balances held by top 10 and 20 deposit holders were below 5% of the Company’s average total deposit balances at December 31, 2024 and 2023. 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.
On an annual basis, the Board approves the Company’s Information Security Policy and Program which provides a layered approach to cybersecurity, and includes administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of customer information in accordance with applicable law. ​ ​ 53 Table of Contents The Company’s Chief Information Security Officer (“CISO”) is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Company’s Chief Risk Officer (“CRO”), who oversees and supervises the risk function, including the information security, compliance, legal, operational (which includes business continuity, model risk, and third party risk functions) and enterprise risk areas.
On an annual basis, the Board approves the Company’s Information Security Policy and Program which provides a layered approach to cybersecurity, and includes administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of customer information in accordance with applicable law. ​ The Company’s Chief Information Security Officer (“CISO”) is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Company’s Chief Risk Officer (“CRO”), who oversees and supervises the risk function, including the information security, compliance, legal, operational (which includes business continuity, model risk, and third party risk functions) and enterprise risk areas.
Bank line of credit. Note 10 — Federal Funds Purchased and Securities Sold Under Agreements to Repurchase in our audited financial statements provides a profile of these funds at each year-end, the average amounts outstanding during each period, the maximum amounts outstanding at any month-end, and the weighted average interest rates on year- end and average balances in each category.
Bank line of credit. Note 9 — Federal Funds Purchased and Securities Sold Under Agreements to Repurchase in our audited financial statements provides a profile of these funds at each year-end, the average amounts outstanding during each period, the maximum amounts outstanding at any month-end, and the weighted average interest rates on year- end and average balances in each category.
Based upon that evaluation, our Chief Executive Officer and the Chief Financial Officer concluded that SouthState’s disclosure controls and procedures as of December 31, 2023, were effective to provide reasonable assurance regarding our control objectives. Management’s Report on Internal Control over Financial Reporting is included on page F- 1 of this Report.
Based upon that evaluation, our Chief Executive Officer and the Chief Financial Officer concluded that SouthState’s disclosure controls and procedures as of December 31, 2024, were effective to provide reasonable assurance regarding our control objectives. Management’s Report on Internal Control over Financial Reporting is included on page F- 1 of this Report.
The weighted average loan to value for the non-owner occupied CRE portfolio was less than 60% as of December 31, 2023. Loans for the commercial office space, which are included in the non-owner occupied CRE portfolio, represent approximately 4% of the total outstanding portfolio with an average loan size of less than $2 million as of December 31, 2023.
The weighted average loan to value for the non-owner occupied CRE portfolio was less than 60% as of December 31, 2024. Loans for the commercial office space, which are included in the non-owner occupied CRE portfolio, represent approximately 4% of the total outstanding portfolio with an average loan size of less than $2 million as of December 31, 2024.
Pursuant to the November 2020 Amendments, we elect to provide disclosures consistent with the amendments to Regulation S-K, Item 301, which eliminate the requirement to provide selected financial data in comparative tabular form for each of the last five fiscal years. ​ ​ ​ ​ ​ 59 Table of Contents Item 7.
Pursuant to the November 2020 Amendments, we elect to provide disclosures consistent with the amendments to Regulation S-K, Item 301, which eliminate the requirement to provide selected financial data in comparative tabular form for each of the last five fiscal years. ​ ​ ​ ​ ​ 62 Table of Contents Item 7.
The Company also maintains cybersecurity insurance provided by carriers that can provide additional technical, legal, and consultation services in the event of a security event that requires additional staff or expertise, including attorneys, forensic accountants, and public relations professionals, among others. ​ In addition to assessing our own cybersecurity preparedness, we also identify, evaluate and manage cybersecurity risks associated with use of third-party vendors and service providers.
The Company also maintains cybersecurity insurance provided by carriers that can provide additional technical, legal, and consultation services in the event of a security event that requires additional staff or expertise, including attorneys, forensic accountants, and public relations professionals, among others. ​ 57 Table of Contents In addition to assessing our own cybersecurity preparedness, we also identify, evaluate and manage cybersecurity risks associated with use of third-party vendors and service providers .
Long-Term Borrowed Funds Our long- term borrowed funds consist of trust preferred junior subordinated debt and corporate subordinated debt. Note 11 — Other Borrowings in our audited financial statements provides a profile of these funds at each year- end, the balance at year end, the interest rate at year end and the weighted average interest rate for long-term borrowings.
Long-Term Borrowed Funds Our long- term borrowed funds consist of trust preferred junior subordinated debt and corporate subordinated debt. Note 10 — Other Borrowings in our audited financial statements provides a profile of these funds at each year- end, the balance at year end, the interest rate at year end and the weighted average interest rate for long-term borrowings.
(12) The total values presented in the table above represent the total fair value of available for sale securities and amortized cost for held to maturity. Approximately 85.4% of the investment portfolio is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities.
(12) The total values presented in the table above represent the total fair value of available for sale securities and amortized cost for held to maturity. Approximately 85.2% of the investment portfolio is comprised of U.S. Treasury securities, U.S. Government agency securities, and U.S. Government Agency Mortgage-backed securities.
We describe the various components of this noninterest income and noninterest expense in the following discussion. ​ ​ 60 Table of Contents The following section also identifies significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements.
We describe the various components of this noninterest income and noninterest expense in the following discussion. ​ ​ 63 Table of Contents The following section also identifies significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements.
As of December 31, 2023, 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 1.0% increase (up 100) and 1.7% 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.
As of December 31, 2024, 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 1.1% increase (up 100) and 1.7% 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.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 is included in Item 8 of this Report under the heading “Management’s Report on Internal Controls Over Financial Reporting.” Our independent auditors have issued an audit report on management’s assessment of internal controls over financial reporting.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 is included in Item 8 of this Report under the heading “Management’s Report on Internal Controls Over Financial Reporting.” Our independent auditors have issued an audit report on management’s assessment of internal controls over financial reporting.
The adjustment for net unrealized losses of $776.6 million between the carrying value of these securities and their amortized cost has been reflected, net of tax, in the Consolidated Balance Sheet as a component of Accumulated Other Comprehensive Loss.
The adjustment for net unrealized losses of $808.6 million between the carrying value of these securities and their amortized cost has been reflected, net of tax, in the Consolidated Balance Sheet as a component of Accumulated Other Comprehensive Loss.
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 December 31, 2023, in accordance with Rule 13a- 15 of the Securities Exchange Act of 1934.
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 December 31, 2024, in accordance with Rule 13a- 15 of the Securities Exchange Act of 1934.
Our assessment of risks associated with use of third-party vendors and service providers is part of our overall cybersecurity risk management framework. ​ ​ 54 Table of Contents The Board has ultimate oversight responsibility for the Company’s risk management and recognizes the importance of protecting the data provided by the Company’s customers and employees and devotes considerable time and attention to overseeing the strategies the Company employs to protect our data and systems and to mitigate against cybersecurity risk.
Our assessment of risks associated with use of third-party vendors and service providers is part of our overall cybersecurity risk management framework. ​ The Board has ultimate oversight responsibility for the Company’s risk management and recognizes the importance of protecting the data provided by the Company’s customers and employees and devotes considerable time and attention to overseeing the strategies the Company employs to protect our data and systems and to mitigate against cybersecurity risk.
As of December 31, 2023, 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 28—Derivative Financial Instruments in the consolidated financial statements.
As of December 31, 2024, 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 26—Derivative Financial Instruments in the consolidated financial statements.
All debt securities in an unrealized loss position as of December 31, 2023 continue to perform as scheduled and we do not believe there is a credit loss or a provision for credit losses is necessary.
All debt securities in an unrealized loss position as of December 31, 2024 continue to perform as scheduled and we do not believe there is a credit loss or a provision for credit losses is necessary.
Table 7—Maturity Distribution and Yields of Investment Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due In ​ Due After ​ Due After ​ Due After ​ ​ ​ ​ ​ ​ ​ 1 Year or Less ​ 1 Thru 5 Years ​ 5 Thru 10 Years ​ 10 Years ​ Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Held to Maturity (amortized cost) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
Table 8—Maturity Distribution and Yields of Investment Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due In ​ Due After ​ Due After ​ Due After ​ ​ ​ ​ ​ ​ ​ 1 Year or Less ​ 1 Thru 5 Years ​ 5 Thru 10 Years ​ 10 Years ​ Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Held to Maturity (amortized cost) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
As part of the Risk Committee’s responsibility for monitoring key business and regulatory risks, the Risk Committee receives from our CISO quarterly reports and materials which include a review of cybersecurity and information technology key risk indicators, test results and related remediation, and any recent cybersecurity threats or incidents and how the Company is managing those threats or incidents.
As part of the Risk Committee’s responsibility for monitoring key business and regulatory risks, the Risk Committee receives from both our Chief Information Officer and CISO quarterly reports and materials which include a review of cybersecurity and information technology key risk indicators, test results and related remediation, and any recent cybersecurity threats or incidents and how the Company is managing those threats or incidents.
See Note 1—Summary of Significant Accounting Policies for further detailed descriptions of our estimation process and methodology related to the ACL. See also Note 5—Allowance for Credit Losses and “Provision for Credit Losses” in this MD&A. ​ 63 Table of Contents One of the most significant judgments influencing the ACL is the macroeconomic forecasts from the third-party service provider.
See Note 1—Summary of Significant Accounting Policies for further detailed descriptions of our estimation process and methodology related to the ACL. See also Note 5—Allowance for Credit Losses and “Provision for Credit Losses” in this MD&A. One of the most significant judgments influencing the ACL is the macroeconomic forecasts from the third-party service provider.
Had the Company elected not to apply the modified CECL transitional amount to its Tier 1 capital, the Company and Bank would have still been considered well capitalized as of December 31, 2023 and 2022.
Had the Company elected not to apply the modified CECL transitional amount to its Tier 1 capital, the Company and Bank would have still been considered well capitalized as of December 31, 2024 and 2023.
Excludes certain property no longer intended for bank use. (2) Excludes non-acquired bank premises held for sale of $9.0 million and $14.3 million as of December 31, 2023 and 2022, respectively, that is now separately disclosed on the balance sheet. (3) Consists of non-real estate foreclosed assets, such as repossessed vehicles.
Excludes certain property no longer intended for bank use. (2) Excludes non-acquired bank premises held for sale of $3.3 million and $9.0 million as of December 31, 2024 and 2023, respectively, that is now separately disclosed on the balance sheet. (3) Consists of non-real estate foreclosed assets, such as repossessed vehicles.
Our CISO has over 18 years of experience in information technology leadership, eight years of which is experience in leading information security oversight, and others on our information security team have various information security degrees and certifications within applicable disciplines.
Our CISO has over 20 years of experience in information technology leadership, eight years of which is experience in leading information security oversight, and others on our information security team have various information security degrees and certifications within applicable disciplines.
If the current economic conditions and other events were to deteriorate and our stock price falls below current levels, we will have to reevaluate the impact on our financial condition and potential impairment of goodwill. ​ Core deposit intangibles and client list intangibles consist primarily of amortizing assets established during the acquisition of other banks.
If the current economic conditions and other events were to deteriorate and our stock price falls below current levels, we will have to reevaluate the impact on our financial condition and potential impairment of goodwill. ​ ​ 67 Table of Contents Core deposit intangibles and client list intangibles consist primarily of amortizing assets established during the acquisition of other banks.
This measure also assumes a static balance sheet (Base Case Scenario) with rate shocks applied as described above. At December 31, 2023, the percentage change in EVE due to a 100-basis point increase or decrease in interest rates was 2.6% decrease and 1.0% increase, respectively.
This measure also assumes a static balance sheet (Base Case Scenario) with rate shocks applied as described above. At December 31, 2024, the percentage change in EVE due to a 100-basis point increase or decrease in interest rates was 2.0% decrease and 1.0% increase, respectively.
(9) The expected average life for US Treasuries is 0.36 years. (10) FRB, FHLB and other non-marketable equity securities have no set maturity date and are classified in “Due after 10 Years.” (11) The expected average life for the total investment securities portfolio is 7.87 years (not including FRB, FHLB and corporate stock with no maturity date).
(9) The expected average life for US Treasuries is 0.10 years. (10) FRB, FHLB and other non-marketable equity securities have no set maturity date and are classified in “Due after 10 Years.” (11) The expected average life for the total investment securities portfolio is 7.76 years (not including FRB, FHLB and corporate stock with no maturity date).
These securities may be pledged to the Federal Home Loan Bank of Atlanta or the Federal Reserve Bank of Atlanta Discount Window or Bank Term Funding Program. Approximately 14.2% of the investment portfolio is comprised of municipal securities.
These securities may be pledged to the Federal Home Loan Bank of Atlanta or the Federal Reserve Bank of Atlanta Discount Window or Bank Term Funding Program. Approximately 14.4% of the investment portfolio is comprised of municipal securities.
Each issuance of trust preferred junior subordinated debt has a maturity of 30 years, but we can call the debt at any time without penalty. Capital and Dividends Our ongoing capital requirements have been met primarily through retained earnings, less the payment of cash dividends.
Each issuance of trust preferred junior subordinated debt has a maturity of 30 years, but we can call the debt at any time without penalty. ​ 93 Table of Contents Capital and Dividends Our ongoing capital requirements have been met primarily through retained earnings, less the payment of cash dividends.
This Report entitled “Report of Independent Registered Public Accounting Firm” appears in Item 8. Item 9B. Other Informatio n. During the three months ended December 31, 2023, no directors or officers adopted or terminated a “Rule 10b5­-1 trading arrangement” or a “non-Ruel 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K.
This Report entitled “Report of Independent Registered Public Accounting Firm” appears in Item 8. Item 9B. Other Informatio n. During the three months ended December 31, 2024, no directors or officers adopted or terminated a “Rule 10b5­-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K.
The Bank also has $3.5 billion in market value of unpledged securities at December 31, 2023 that can be pledged to attain additional funds if necessary. 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.
The Bank also has $3.4 billion in market value of unpledged securities at December 31, 2024 that can be pledged to attain additional funds if necessary. 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.
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 condensed consolidated financial statements. ​ Allowance for Credit Losses or 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.
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. ​ ​ 66 Table of Contents Allowance for Credit Losses or 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.
(2) Includes loans on both 1-4 family owner occupied property, as well as loans collateralized by 1-4 family owner occupied property with a business intent. (3) Includes $9.5 million and $46.5 million of construction and land development loans at December 31, 2023 and 2022, respectively.
(2) Includes loans on both 1-4 family owner occupied property, as well as loans collateralized by 1-4 family owner occupied property with a business intent. (3) Includes $5.9 million and $9.5 million of construction and land development loans at December 31, 2024 and 2023, respectively.
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 $263.8 million.
To illustrate the sensitivity of these scenarios, if a 100% probability weighting was applied to the adverse scenario rather than using the probability-weighted three scenario approach, this would result in an increase in the ACL by approximately $224 million.
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. ​ The Bank has a granular deposit base comprised of over 1.4 million accounts, with an average deposit size of $27,000.
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. ​ The Bank has a granular deposit base comprised of over 1.3 million accounts, with an average deposit size of $30,000.
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 Consensus Scenario published in January 2024 as the Base Case.
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 January 2025 as the Base Case Scenario.
Introduction The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes SouthState Corporation and its subsidiary’s results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, and the year ended December 31, 2022 as compared to the year ended December 31, 2021, and also analyzes our financial condition as of December 31, 2023 as compared to December 31, 2022.
Introduction The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes SouthState Corporation and its subsidiary’s results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, and also analyzes our financial condition as of December 31, 2024 as compared to December 31, 2023.
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: Table 8—Investment Portfolio Duration ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ (Dollars in thousands, duration in years) Amount Duration Amount Duration ​ Held to Maturity (amortized cost) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
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: Table 9—Investment Portfolio Duration ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ (Dollars in thousands, duration in years) Amount Duration Amount Duration ​ Held to Maturity (amortized cost) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
The federal banking agencies have issued policy statements which provide that bank holding companies and insured banks should generally pay dividends only out of current earnings. ​ During 2023, the Bank paid dividends to SouthState totaling $180.0 million. The Bank was not required to obtain approval of the OCC to pay these dividends.
The federal banking agencies have issued policy statements which provide that bank holding companies and insured banks should generally pay dividends only out of current earnings. ​ During 2024, the Bank paid dividends to SouthState totaling $168.0 million. The Bank was not required to obtain approval of the OCC to pay these dividends.
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 the past two years.
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.
The approval of the OCC is required if the total of all dividends declared by the Bank in any calendar year exceeds the total of its net profits for that year combined with its retained net profits for the preceding two years, less any required transfers to surplus. During 2023, the Bank paid dividends to SouthState totaling $180.0 million.
The approval of the OCC is required if the total of all dividends declared by the Bank in any calendar year exceeds the total of its net profits for that year combined with its retained net profits for the preceding two years, less any required transfers to surplus. During 2024, the Bank paid dividends to SouthState totaling $168.0 million.
(4) In cludes nonaccrual loans that are purchase credit deteriorated (PCD loans). (5) Excludes acquired bank premises held for sale of $3.4 million as of December 31, 2023 and 2022, that is now separately disclosed on the balance sheet. (6) Loan data excludes mortgage loans held for sale.
(4) In cludes nonaccrual loans that are purchase credit deteriorated (PCD loans). (5) Excludes acquired bank premises held for sale of $0 and $3.4 million as of December 31, 2024 and 2023, respectively, that is now separately disclosed on the balance sheet. (6) Loan data excludes mortgage loans held for sale.
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 earned net income of $494.3 million, or $6.46 diluted earnings per share (“EPS”), during 2023 compared to net income of $496.0 million, or $6.60 diluted EPS, in 2022.
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 earned net income of $534.8 million, or $6.97 diluted earnings per share (“EPS”), during 2024 compared to net income of $494.3 million, or $6.46 diluted EPS, in 2023.
In addition, we examine these portfolios for exposure to concentration in any one industry, government agency, or geographic location. ​ 100 Table of Contents Deposit Concentrations At December 31, 2023 and 2022, we have no material concentration of deposits from any single customer or group of customers.
In addition, we examine these portfolios for exposure to concentration in any one industry, government agency, or geographic location. ​ 101 Table of Contents Deposit Concentrations At December 31, 2024 and 2023, we have no material concentration of deposits from any single customer or group of customers.
Changes in Internal Controls There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. ​ 103 Table of Contents Management’s Report on Internal Controls over Financial Reporting We are responsible for establishing and maintaining adequate internal control over financial reporting.
Changes in Internal Controls There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. Management’s Report on Internal Controls over Financial Reporting We are responsible for establishing and maintaining adequate internal control over financial reporting.
We adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , on January 1, 2020 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.
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.
The expected average life of the investment portfolio at December 31, 2023 was approximately 7.87 years, compared with 7.96 years at December 31, 2022. See Note 1 — Summary of Significant Accounting Policies in the audited consolidated financial statements for our accounting policy on investment securities.
The expected average life of the investment portfolio at December 31, 2024 was approximately 7.73 years, compared with 7.87 years at December 31, 2023. See Note 1 — Summary of Significant Accounting Policies in the audited consolidated financial statements for our accounting policy on investment securities.
Financial Statements and Supplementary Dat a. ​ ​ ​ ​ Index to Financials Statements Page ​ ​ Management’s Report on Internal Control Over Financial Reporting F-1 Report of Independent Registered Public Accounting Firm (Ernst & Young LLP, Birmingham, Alabama, PCAOB Firm ID No. 42) F-2 Report of Independent Registered Public Accounting Firm (FORVIS, LLP, Atlanta, Georgia, PCAOB Firm ID No. 686) F-5 SouthState Corporation Consolidated Financial Statements ​ Consolidated Balance Sheets at December 31, 2023 and December 31, 2022 F-6 Consolidated Statements of Income for the Years Ended December 31, 2023, 2022 and 2021 F-7 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023, 2022 and 2021 F-8 Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2023, 2022 and 2021 F-9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021 F-10 Notes to Consolidated Financial Statements F-11 ​ Item 9.
Financial Statements and Supplementary Dat a. ​ ​ ​ ​ Index to Financials Statements Page ​ ​ Management’s Report on Internal Control Over Financial Reporting F-1 Report of Independent Registered Public Accounting Firm (Ernst & Young LLP, Birmingham, Alabama, PCAOB Firm ID No. 42) F-2 Report of Independent Registered Public Accounting Firm (Forvis Mazars, LLP, Atlanta, Georgia, PCAOB Firm ID No. 686) F-5 SouthState Corporation Consolidated Financial Statements ​ Consolidated Balance Sheets at December 31, 2024 and December 31, 2023 F-6 Consolidated Statements of Income for the Years Ended December 31, 2024, 2023 and 2022 F-7 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024, 2023 and 2022 F-8 Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2024, 2023 and 2022 F-9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F-10 Notes to Consolidated Financial Statements F-12 ​ 103 Table of Contents Item 9.
The stock performance graph assumes $100 was invested in our common stock and the above indexes on December 31, 2018.
The stock performance graph assumes $100 was invested in our common stock and the above indexes on December 31, 2019.
The securities designated as held to maturity are securities the Company does not intend to sell and expects to hold through maturity. The securities consist of $197.3 million of agency securities, $2.2 billion of residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises and $53.1 million of Small Business Administration loan-backed securities.
The securities designated as held to maturity are securities the Company does not intend to sell and expects to hold through maturity. The securities consist of $147.3 million of agency securities, $2.1 billion of residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises and $49.8 million of Small Business Administration loan-backed securities.
For example, in 2023, the Bank engaged a third-party cybersecurity consultant to conduct a review of the Company’s information security and cybersecurity program in relation to overall threat trends and specific factors affecting the Bank’s cyber risk profile. The review assisted management in enhancing the Company’s cyber-risk reduction efforts, including updating Bank’s cybersecurity strategy and program.
For example, in 2023, the Bank engaged a third-party cybersecurity consultant to conduct a review of the Company’s information security and cybersecurity program in relation to overall threat trends and specific factors affecting the Bank’s cyber risk profile, and in 2024, a third-party cybersecurity consultant reviewed the Company’s vulnerability management program These reviews assisted management in enhancing the Company’s cyber-risk reduction efforts, including updating Bank’s cybersecurity strategy and program.
Total construction and land development loans were $2.9 billion at December 31, 2023 compared to $2.9 billion at December 31, 2022.
Total construction and land development loans were $2.2 billion at December 31, 2024 compared to $2.9 billion at December 31, 2023.
The Company did not have an allowance for credit losses or record a provision for credit losses on investment securities or other financials asset during 2023. ​ The ACL provides 2.50 times coverage of nonperforming loans at December 31, 2023.
The Company did not have an allowance for credit losses or record a provision for credit losses on investment securities or other financials asset during 2024. ​ The ACL provides 2.21 times coverage of nonperforming loans at December 31, 2024.
For additional information see Note 28—Derivative Financial Instruments in the consolidated financial statements. ​ 98 Table of Contents 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.
For additional information see Note 26—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.
As of December 31, 2023, 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.
As of December 31, 2024, the Company was operating within its liquidity policy limits. 96 Table of Contents 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.
Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $137.3 million.
Conversely, if a 100% probability weighting was applied to the upside scenario, this would result in a decrease in the ACL by approximately $104 million.
The table below compares Primary Funding Sources to uninsured deposits as of December 31, 2023.
The table below compares Primary Funding Sources to uninsured deposits as of December 31, 2024.
We used these funds primarily to pay dividends to shareholders of approximately $154.9 million in 2023. 57 Table of Contents Stock Performance Graph ​ The following stock performance graph compares SouthState’s cumulative total shareholder return on our common stock over the most recent five-year period with the NASDAQ Composite and the KBW NASDAQ Regional Banking Index, an index that comprises performance of U.S. companies that do business as regional banks or thrifts.
We used these funds primarily to pay dividends to shareholders of approximately $161.6 million in 2024. 60 Table of Contents Stock Performance Graph ​ The following stock performance graph compares SouthState’s cumulative total shareholder return on our common stock over the most recent five-year period with the NASDAQ Composite and the KBW NASDAQ Regional Banking Index, an index that comprises performance of U.S. companies that do business as regional banks or thrifts.
Our bank owns 204 properties and leases 106 properties , most of which are used as branch locations, mortgage loan production offices, wealth management offices or for housing operational units in Alabama, Florida, Georgia, North Carolina, South Carolina, and Virginia.
As of December 31, 2024, our bank owns 204 properties and leases 107 properties, most of which are used as branch locations, mortgage loan production offices, wealth management offices or for housing operational units in Alabama, Florida, Georgia, North Carolina, South Carolina, and Virginia.
The following table presents the reported values of investment securities for the past two years: Table 5—Values of Investment Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (Dollars in thousands) 2023 2022 Held to Maturity (amortized cost): ​ ​ ​ ​ ​ ​ ​ U.S.
The following table presents the reported values of investment securities for the past two years: Table 6—Values of Investment Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (Dollars in thousands) 2024 2023 Held to Maturity (amortized cost): ​ ​ ​ ​ ​ ​ ​ U.S.
The Company raised interest rates on most interest-bearing deposit products (in particular money market accounts and time deposit specials) during 2023 due to competitive pressures to retain deposits.
The Company raised interest rates on most interest-bearing deposit products (in particular money market accounts and time deposit specials) during 2023 and the first half of 2024 due to competitive pressures to retain deposits.
The following are highlights of our held to maturity portfolio: ● Total amortized cost of held to maturity portfolio totaled $2.5 billion ● The balance of securities held to maturity represented 5.5% of total assets at December 31, 2023. ● No purchases or sales of held to maturity investment securities in 2023; maturities, calls and paydowns totaled $190.8 million in 2023. ​ 78 Table of Contents Available for sale Securities available for sale consist of debentures of government sponsored entities, state and municipal bonds, residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises, Small Business Administration loan-backed securities and corporate securities.
The following are highlights of our held to maturity portfolio: ● Total amortized cost of held to maturity portfolio totaled $2.3 billion ● The balance of securities held to maturity represented 4.9% of total assets at December 31, 2024. ● No purchases or sales of held to maturity investment securities in 2024; maturities, calls and paydowns totaled $228.5 million in 2024. ​ 79 Table of Contents Available for sale Securities available for sale consist of debentures of government sponsored entities, state and municipal bonds, residential and commercial mortgage-backed securities issued by U.S government agencies or sponsored enterprises, Small Business Administration loan-backed securities and corporate securities.
Our liabilities at December 31, 2023 totaled $39.4 billion, consisting principally of deposits of $37.0 billion ($10.6 billion in noninterest-bearing and $26.4 billion in interest-bearing), $804.5 million derivative liabilities and $981.1 million of short-term and long-term borrowings.
Our liabilities at December 31, 2023 totaled $39.4 billion, consisting principally of deposits of $37.0 billion ($10.6 billion in noninterest-bearing and $26.4 in interest-bearing) and short-term and long-term borrowings of $881.1 million.
In 2022, the Company did not repurchase any shares through the 2022 Stock Repurchase Program. During 2023, the Company repurchased a total of 100,000 shares at a weighted average price of $67.48 per share pursuant to the 2022 Stock Repurchase Program.
In 2022, the Company did not repurchase any shares through the 2022 Stock Repurchase Program. The Company repurchased a total of 100,000 shares at a weighted average price of $67.48 per share in 2023, and a total of 100,000 shares at a weighted average price of $79.85 per share in 2024 pursuant to the 2022 Stock Repurchase Program.
At December 31, 2023, the unrealized net loss of the available for sale investment securities portfolio was $776.6 million, or 14.0%, below its amortized cost basis. Comparable valuations at December 31, 2022 reflected an unrealized net loss of the available for sale investment portfolio of $889.3 million, or 14.3%, below its amortized cost basis.
Comparable valuations at December 31, 2023 reflected an unrealized net loss of the available for sale investment portfolio of $776.6 million, or 14.0%, below its amortized cost basis.
Item 7A. Quantitative and Qualitative Disclosure s about Market Risk. See “Asset-Liability Management and Market Risk Sensitivity” on page 98 in Management’s Discussion and Analysis of Financial Condition and Results of Operations for quantitative and qualitative disclosures about market risk. ​ ​ 102 Table of Contents Item 8.
Item 7A. Quantitative and Qualitative Disclosure s about Market Risk. See “Asset-Liability Management and Market Risk Sensitivity” on page 99 in Management’s Discussion and Analysis of Financial Condition and Results of Operations for quantitative and qualitative disclosures about market risk. Item 8.
These increases were partially offset by declines resulting from dividends paid to shareholders of $154.9 million, common stock repurchased from officers and directors for income taxes owed on their vested shares of restricted stock of $9.3 million, and common stock repurchased in the open market of $6.7 million. ​ Our common equity to assets ratio increased to 12.3% in 2023, compared to 11.6% in 2022.
These increases were partially offset by declines in shareholders equity resulting from dividends paid to shareholders of $161.6 million, common stock repurchased from officers and directors for income taxes owed on their vested shares of restricted stock of $8.8 million, and common stock repurchased in the open market of $8.0 million. ​ Our common equity to assets ratio increased to 12.7% in 2024, compared to 12.3% in 2023.
All of these ratios mainly improved due to net income recognized during 2023 of $494.3 million. Tier 1 capital increased 8.6% and 9.8% at the Bank and Company, respectively, with the increase in equity resulting from the net income recognized during the current period.
All of these ratios improved due to net income recognized during 2024 of $534.8 million. Tier 1 capital increased 8.9% and 9.3% at the Bank and Company, respectively, with the increase in equity resulting from net income recognized during the current period.
The Bank had $719.7 million of outstanding brokered deposits at the end of the year leaving $4.8 billion in available capacity as per the internal policy limit of 15% of total deposits. All of these resources would provide an additional $14.0 billion in funding if we needed additional liquidity.
The Bank had $614.5 million of outstanding brokered deposits at the end of the year leaving $5.1 billion in available capacity as per the internal policy limit of 15% of total deposits. All of these resources would provide an additional $14.0 billion in funding if we needed additional liquidity.
Both regulatory risk-based assets and quarterly average assets remained reasonably flat in the fourth quarter of 2023 compared to the fourth quarter of 2022 with average assets for the both Company and Bank increasing 1.6% and risk-based assets increasing 2.3%.
Both regulatory risk-based assets and quarterly average assets remained flat in the fourth quarter of 2024 compared to the fourth quarter of 2023 with average assets for the both Company and Bank increasing 2.6% and risk-based assets increasing 1.9%.
ACL, including reserve for unfunded commitments, as a percentage of loans were 1.58% and 1.40%, respectively, as of December 31, 2023 and 2022. ​ 88 Table of Contents The following table provides the allocation, by segment, for expected credit losses for the year ended December 31, 2023.
ACL, including reserve for unfunded commitments, as a percentage of loans were 1.51% and 1.58%, respectively, as of December 31, 2024 and 2023. ​ The following table provides the allocation, by segment, for expected credit losses for the year ended December 31, 2024.

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