SouthState Corporation (SSB) Earnings

Management highlights

### Recruitment - related - Progress on expanding commercial banking sales force: In the last six months, the commercial banking team grew by about 7%. There's an opportunity to expand the commercial banking team by 10 - 15% in the next couple of years, but may slow the pace of hiring in the next few months in some areas to focus on assimilation. ### Loan growth - related - Loan pipelines have grown 50% since last summer. Loan growth was 8% in the fourth quarter and 7.5% in the first quarter. The loan pipeline at quarter end was up 33% compared with year end, with significant growth in Texas and Colorado, and Houston had the highest loan growth in the company this quarter. ### Share buybacks - related - Repurchased nearly 4% of shares outstanding since the beginning of the third quarter at an average price of $95.28. Viewed as an attractive use of excess capital. ### AI - related - Enthusiastically embracing AI, deploying more co - pilot licenses, training bankers at the individual user level, researching and beginning to deploy AI tools from major software providers at the department level, and looking to re - engineer processes at the enterprise level

Guidance

### Margin guidance - Originally expected NIM to be in the 380 - 390 range, but actual was 379. Assumptions for the year include interest - earning assets average in $61 - $62 billion range, rate forecast changed with market removing rate cuts, loan accretion forecast unchanged at $125 million for full year 2026, and deposit cost expected to be in mid - 170s. Now expect NIM to be in the 375 - 380 range, with NIM on high end if growth is mid - single digit and lower end if growth is high single digit but net interest income higher. ### NIE guidance - No changes to NIE guidance for the remainder of the year, but NIE could move up with greater success in recruiting efforts ### Loan growth guidance - Previous loan growth guidance for 2026 was mid to upper single digit, and there's a decent chance of being on the higher end

Segment performance

Net interest margin was 379, slightly below the guidance range of 380 - 390. This was mainly due to deposit costs being a few basis points higher than expected and loan yields being slightly below new loan production coupons. Loan growth was strong with loans increasing by 896 million, representing a 7.5% annualized growth rate. Texas and Colorado led the loan growth. Non - interest income was 100 million, which was at the high end of the 55 - 60 basis points guidance range. Net charge - offs were $10 million, matching the provision for credit losses. In terms of capital, 1.5 million shares were repurchased in the quarter at a weighted average price of $100.84. CET1 ended at 11.3%, TCE was 8.64%, and tangible book value per share was $56.90. Revenue contribution: Loan growth was a significant part of the overall financial performance, with Texas and Colorado having a major impact on loan production

Risks & headwinds

### Deposit cost risks - Uncertainty due to competitive dynamics in the deposit market and rate changes which can affect deposit costs. ### Capital rule risks - Potential impact of new capital rules on capital levels, with an estimated roughly 7% reduction in risk - weighted assets and 85 basis point positive impact on CET1 levels, but need to study further. ### Credit risks - Concerns in lower income consumer segment and small business SBA loans (due to floating rates and 5% rate shock), although government guarantee on 75% of SBA loans provides some protection; also, potential pressure on NDFI lending segments but low exposure

Analyst Q&A

• Q: Catherine Mueller at KBW asked about margin, specifically if the 380 - 390 range is still fair and deposit pressures.

  A: Steve explained margin components including interest - earning assets, rate forecast, loan accretion, and deposit costs, stating NIM expected to be in 375 - 380 range

• Q: John McDonald at Truist Securities asked about loan growth, what gives confidence in high end of guidance and deposit cost color.

  A: John Corbett talked about broad - based loan growth, pipeline growth, and Steve provided details on new money rates, CD rates, and deposit mix

• Q: Steven Scouten at Piper Sandler asked about NIM guidance change and hiring plans.

  A: Steve characterized NIM guidance change factors and John Corbett updated on hiring progress and plans

• Q: Anthony Elion at JPMorgan asked about expense outlook and hiring slowdown.

  A: Will talked about expense trends and John Corbett explained hiring slowdown is about assimilation

• Q: Michael Rose at Raymond James asked about non - interest income fees and correspondent business.

  A: Steve provided non - interest income fee details and John Corbett gave correspondent business update

• Q: Janet Lee at TD Bank asked about investment securities and AI cost.

  A: Relevant person talked about securities portfolio and AI cost and impact

• Q: Gary Tanner at DA Davidson asked about new capital rules and deposit account fees.

  A: Relevant person talked about new capital rules impact and Steve gave deposit account fee trend view

• Q: Ben Gerlinger at Citi asked about correspondent banking and mortgage.

  A: Relevant person gave correspondent banking details and Will talked about mortgage MSR evaluation

• Q: David Chivarini at Jefferies asked about deposit growth outlook and credit quality.

  A: Relevant person talked about deposit growth challenges and credit quality view

• Q: Dave Bishop at Hubby Group asked about credit in NDFI lending segments.

  A: Relevant person talked about NDFI lending segment credit and assimilation of new bankers