SouthState Bank NYSE: SSB executives highlighted strong profitability, continued loan growth momentum, and an active share repurchase program during the company’s first quarter 2026 earnings call, while also acknowledging a slightly softer-than-expected net interest margin driven by higher deposit costs.
Quarterly performance and 2026 priorities
CEO John Corbett said the company generated a return on assets of 1.37% and a return on tangible common equity of 17.6% in the quarter. Looking ahead through 2026, Corbett outlined four priorities: expanding the commercial banking sales force, delivering “meaningful organic growth,” retiring shares at attractive valuations, and implementing artificial intelligence tools across the company.
On hiring, Corbett said SouthState aims to expand its commercial banking team by 10%–15% over the next couple of years, citing market disruption from consolidation and what he described as a more favorable yield curve environment for balance sheet growth. Over the past six months, the company has grown its commercial banking team by about 7%, though Corbett said the bank may slow hiring in the next few months to focus on assimilation, particularly in Texas and Colorado.
Loan growth accelerates; Texas and Colorado stand out
Management emphasized that organic loan growth remained strong. Corbett said loan pipelines have grown 50% since last summer, contributing to annualized loan growth of 8% in the fourth quarter and 7.5% in the first quarter. He added that pipelines grew again in the first quarter, giving the company confidence moving forward and increasing the chances that 2026 loan growth lands on the higher end of its mid- to upper-single-digit guidance.
CFO William Matthews reported loans grew $896 million in the quarter, equating to a 7.5% annualized growth rate, while average loans grew at a 6.5% annualized rate. He said every banking group grew loans in the first quarter, led by Texas and Colorado.
Corbett provided more detail in response to analyst questions, saying first-quarter loan production was “very similar” to the prior quarter’s record level, near $4 billion, with growth broad-based by product and geography. He cited investor CRE and C&I growth of about 9% each, and mid-single-digit growth in single-family residential owner-occupied lending.
On regional performance, Corbett said loan production in Texas and Colorado more than doubled year over year, rising from $500 million in the first quarter of 2025 to $1.1 billion in the first quarter of 2026. He added that Houston posted the highest loan growth of any market in the company during the quarter. Florida and South Carolina each produced roughly $640 million, with Greenville the strongest market in South Carolina.
Pipeline growth was another focal point. Corbett said the pipeline increased 33% during the quarter to $6.4 billion from $4.8 billion at year-end, and noted the company “did not drain the pipeline” despite robust production. He later added that the pipeline has doubled from $3.2 billion a year ago, with about two-thirds of the growth coming from Florida, Texas, and Colorado. The mix has shifted, with commercial real estate representing about 45% of the pipeline versus 35% a year earlier, though Corbett said C&I remains the majority.
Margin misses guidance; outlook revised lower amid deposit competition and growth
Matthews said the company’s net interest margin was 3.79%, slightly below the 3.80%–3.90% range management had guided to. He attributed the miss primarily to deposit costs coming in a few basis points higher than expected, despite a six-basis-point improvement from the prior quarter.
Loan yields were 5.96% compared with new loan production coupons of 6.09%. Matthews also noted $38.8 million of accretion income, in line with expectations but $11.5 million below fourth-quarter levels. Excluding accretion, net interest margin rose one basis point. Net interest income totaled $562 million, down $19 million from the fourth quarter, with $12.6 million of that decline attributed to day-count impact.
Chief Strategy Officer Steve Young revised margin expectations lower, telling analysts that based on updated assumptions, management would expect net interest margin to be in a 3.75%–3.80% range. Young said the change reflected a combination of factors, including stronger growth expectations and higher deposit competition, as well as a shift in rate expectations. He noted the bank had previously anticipated three rate cuts entering 2026 but has now removed rate cuts from its forecast.
Young described deposit cost expectations in the “mid-170s,” and said that if growth is mid-single-digit, management would expect margin to be on the high end of the range, while higher (high single-digit) growth could push margin toward the lower end, with net interest income higher due to larger earning assets.
In discussing deposit trends, Young said the bank raised about $400 million in new money during the quarter, with new money market rates at 2.68% and new and renewed CDs at 3.69%. Excluding seasonal runoff in public funds, he said customer deposits grew 7%, or about $850 million, led by business deposits, which rose 10% on treasury management activity. He also noted deposit costs vary by region, with the legacy Southeast footprint in the “mid-140s,” while Texas and Colorado were around the “210 range,” which management believes can come down over time as products and treasury management deepen.
Young said competition increased late in the quarter, with new money market rates moving from the 2.40% range to around 3%, adding that the outlook depends on the path of rates and funding markets.
Fees, expenses, capital, and credit quality
Non-interest income totaled $100 million, which Matthews said was at the high end of management’s guidance range. He cited strength in capital markets and wealth, while seasonally lighter deposit fees were offset by stronger mortgage revenue, aided by an increase in the mortgage servicing rights asset value net of the hedge. Matthews later quantified the MSR valuation benefit as a positive $4.5 million impact in the quarter.
Young said the company continues to model non-interest income to average assets in the 55–60 basis-point range, despite posting 61 basis points in the quarter, noting the asset base is growing. He also said correspondent revenue came in at $24.4 million for the quarter, consistent with the company’s expectation of roughly $25 million per quarter on average. Addressing volatility in the business, Young said he does not view $30 million per quarter as a reliable run rate at this stage, though he pointed to potential product additions—such as commodities-related support for the energy business and more FX hedging—as possible longer-term contributors.
Non-interest expense was $359.5 million, which Matthews said was in line with expectations. Looking ahead, he said there were no changes to non-interest expense guidance, which management has framed at roughly 4% for the year, while noting typical seasonal patterns such as higher FICA and 401(k) costs early in the year and base-pay increases that typically take effect July 1.
On credit, Matthews said net charge-offs were $10 million, or nine basis points annualized, matched by the provision for credit losses. He added that non-accrual and substandard loans were down slightly and that payment performance remains “very good.” Corbett said the company has “little to no concern” about loss content in investor CRE problem loans, citing weighted average loan-to-values of 56% and stating that 98% are current, including non-accruals. He said areas being watched include lower-income consumer weakness and some small business loans, particularly floating-rate SBA credits, while noting the government guarantee covers 75% of SBA exposure.
Capital return remained a prominent theme. Corbett said the company has repurchased nearly 4% of shares outstanding since the beginning of the third quarter at an average price of $95.28. Matthews reported SouthState repurchased 1.5 million shares during the quarter at a weighted average price of $100.84, bringing total repurchases over the last two quarters to 3.5 million shares. Shares outstanding were 97.9 million at quarter end versus 101.5 million a year earlier.
Matthews said the first-quarter payout ratio was higher than the company expects to maintain long term, but management saw it as “an opportune time” to be more active. He reiterated a medium- to long-term payout ratio framework of 40%–60% and said management targets an 11%–12% CET1 range. CET1 ended the quarter at 11.3%, tangible common equity was 8.64%, and tangible book value per share was $56.90. Matthews said tangible book value per share rose nearly $7, or 14%, from a year earlier, and the TCE ratio improved 39 basis points year over year despite higher capital return activity.
Matthews also told analysts that the company’s preliminary analysis of potential new capital rules suggested roughly a 7% reduction in risk-weighted assets, which would translate to about an 85 basis-point positive impact on CET1, though he said regulatory limits are not the sole determinant of capital management given internal stress testing and rating agency considerations.
AI adoption: early use cases, longer runway for measurable efficiency
Corbett said the bank is expanding its use of AI, including deploying more Microsoft Copilot licenses, implementing tools from major software providers at the department level, and exploring process redesign at the enterprise level to improve speed and scalability.
On costs, Corbett said AI-related expense “on the margin is not that high,” noting that many tools are embedded in existing software. He shared an example from a factoring business where an AI tool reduced invoice processing time dramatically and improved accuracy. Matthews added that the bank is monitoring efficiency over the next 18–24 months by tracking the ratio of revenue producers to support personnel, with the goal that support staffing remains relatively flat as revenue producers grow.
About SouthState Bank NYSE: SSB
SouthState Bank NYSE: SSB is a bank holding company headquartered in Winter Haven, Florida, that provides a range of commercial and retail banking services. Through its subsidiary, SouthState Bank, the company serves businesses, institutions and individuals with deposit, lending and treasury management solutions. Its core business lines include commercial and industrial loans, commercial real estate lending, consumer mortgages and home equity loans.
In addition to traditional lending and deposit products, SouthState Bank offers specialized services such as treasury and cash management, merchant services, payment solutions and online banking.
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