# SouthState Bank Corp (SSB) FY 2024 MD&A Verbatim Item 7 Management's Discussion and Analysis from SouthState Bank Corp's 10-K for fiscal year 2024. SEC filing source: https://www.sec.gov/Archives/edgar/data/764038/000155837025001274/ssb-20241231x10k.htm Accession: 0001558370-25-001274 Filing date: 2025-02-21 Report date: 2024-12-31 Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Company profile: /company/SSB/ All MD&A years: /company/SSB/mda/ Previous year: /company/SSB/mda/fy2023/ (FY 2023) Next year: /company/SSB/mda/fy2025/ (FY 2025) Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 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, and the economy. 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, those risks listed under “Summary of Risk Factors” starting on page 23 of this Report. 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. 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. Like most banking 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 most of which we pay interest. Consequently, one of the key measures of our success is the amount of 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. ​ There are risks inherent in all loans, so we maintain an allowance for credit losses to absorb our estimate of probable losses on existing loans that may become uncollectible. We establish and maintain this allowance by recording a provision or recovery for credit losses against our earnings. In the following section, 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. ​ ​ 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. 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. We provide a wide range of banking services and products to our customers through our Bank. The Bank operates SouthState|Duncan-Williams Securities Corp. (“SouthState|Duncan-Williams”), 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. 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 December 31, 2024, we had $46.4 billion in assets and 5,100 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 a six (6) state footprint in Alabama, Florida, Georgia, North Carolina, South Carolina 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 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. Net income available to the common shareholders was up $40.5 million, or 8.2%, in 2024 compared to 2023. For further discussion of the Company’s results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, see Results of Operations section of this MD&A starting on page 68. ​ At December 31, 2024, we had total assets of approximately $46.4 billion compared to approximately $44.9 billion at December 31, 2023. See the Financial Condition section of this MD&A starting on page 77 for a more detailed description of the change in our balance sheet. ​ ​ ​ 64 Table of Contents Our overall asset quality results remained strong during the year. Net charge offs as a percentage of average loans decreased to 0.06% compared to 0.08% for the year ended December 31, 2023. The total nonperforming assets (“NPAs”) increased by $29.2 million to $213.4 million at December 31, 2024 from $184.1 million at December 31, 2023. Non-acquired NPAs increased $24.0 million to $146.5 million at December 31, 2024 from $122.5 million at December 31, 2023, which was related to an increase in non-acquired nonperforming loans of $23.5 million. Non-acquired OREO and other NPAs increased by $471,000 to $1.2 million as of December 31, 2024 compared to $711,000 as of December 31, 2023. Acquired NPAs increased $5.3 million to $66.9 million at December 31, 2024 from $61.6 million at December 31, 2023. Acquired nonperforming loans increased $4.4 million and acquired OREO and other nonperforming assets increased $871,000. Total NPAs as a percentage of total assets increased 5 basis points to 0.46% at December 31, 2024 compared to 0.41% at December 31, 2023. We continue to experience solid and stable asset quality numbers and ratios in 2024. ​ Our efficiency ratio was 56.9% for the year ended December 31, 2024 compared to 55.5% for the same period in 2023. The increase of our efficiency ratio was due to both a $6.9 million increase in noninterest expense and a $21.8 million decrease in total net interest income and noninterest income. The increase in noninterest expense was mainly due to an increase in salaries and employee benefits of $23.5 million, an increase in information service expense of $7.7 million, and an increase in merger, branch consolidation, severance related and other expense of $7.0 million, offset by a decrease in the FDIC special assessment expense of $21.8 million, a decrease in amortization of intangible of $5.2 million, and a decrease in other noninterest expense of $4.9 million in 2024. The decrease in total net interest income and noninterest income was due to a decline in net interest income of $37.2 million as the increase in interest expense exceeded the increase in interest income, as deposits repriced in the higher interest rate environment, along with deposits moving to higher costing money market accounts and interest-bearing checking accounts from noninterest-bearing checking accounts and savings accounts during 2024. ​ We continue to remain well-capitalized with a total risk-based capital ratio of 15.0% and a Tier 1 leverage ratio of 10.0%, as of December 31, 2024, compared to 14.1% and 9.4%, respectively, at December 31, 2023. The improvement in the total risk-based capital ratio was mainly due to total risk-based capital increasing 8.2% with the increase in equity resulting from net income of $534.8 million recognized in 2024, along with the increase in the allowance for credit losses and unfunded commitments of $20.1 million includable in Tier 2 capital. Total risk-weighted assets increased $657.1 million, or 1.9%, in 2024. The improvement in the Tier 1 leverage ratio was due to the increase in Tier 1 capital of 9.3% with the increase in equity resulting from net income of $534.8 million recognized in 2024. Regulatory average assets used to calculate the Tier 1 leverage ratio increased $1.1 billion, or 2.6%, in 2024. We believe our current capital ratios position us well to grow both organically and through certain strategic opportunities. For further discussion of the Company’s financial condition as of December 31, 2024 compared to December 31, 2023, see Financial Condition section of this MD&A starting on page 77. Recent Events Independent Bank Group, Inc. (“Independent”) Merger ​ On January 1, 2025, the Company acquired all of the outstanding common stock of Independent, a Texas-based corporation, the bank holding company for Independent Bank, in a stock transaction. Pursuant to the Merger Agreement, 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. ​ 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. Under the Sale Agreement, the Bank has agreed, concurrently with the closing of the sale of the branches, to enter 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 expects the Sale-leaseback Transaction to close in the first quarter of 2025 and is subject to Blue Owl performing satisfactory due diligence on the branches. ​ 65 Table of Contents 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 with Note 30 – Subsequent Events to our audited consolidated financial statements. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared based on the application of accounting policies in accordance with generally accepted accounting principles (“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 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. 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. ​ ​ 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. 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 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. 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 $224 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 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 continued geopolitical 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 December 31, 2024. 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 December 31, 2024 and 2023, the balance of goodwill was $1.9 billion. 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, 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 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. Income Taxes and Deferred Tax Assets ​ Income taxes are provided for the tax effects of the transactions reported in our consolidated financial statements and consist of taxes currently due plus deferred taxes related to differences between the tax basis and accounting basis of certain assets and liabilities. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. The Company determines the realization of deferred tax assets by considering all positive and negative evidence available, including the impact of recent operating results, future reversals of taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards and tax planning strategies. Determining whether deferred tax assets are realizable is subjective and requires the use of significant judgment. A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company and its subsidiaries file a consolidated federal income tax return. Additionally, income tax returns are filed by the Company or its subsidiaries in various state and local jurisdictions based on the Company’s footprint. The tax laws and regulations in each jurisdiction are complex and may be subject to different interpretations by the Company and the relevant taxing authorities. Therefore, the Company is required to exercise judgment in determining tax accruals and evaluating the Company’s tax positions, including evaluating uncertain tax positions. See Note 1—Summary of Significant Accounting Policies and Note 11—Income Taxes to the consolidated financial statements for further details and discussion. Recent Accounting Standards and Pronouncements For information relating to recent accounting standards and pronouncements, see Note 1 to our audited consolidated financial statements entitled “Summary of Significant Accounting Policies.” Results of Operations Consolidated net income available to common shareholders increased by $40.5 million, or 8.2%, to $534.8 million for the year ended December 31, 2024 compared to $494.3 million for the year ended December 31, 2023. Below are key highlights of our results of operations during 2024: [[GREPCENT_TABLE]] [["","\u25cf","A $197.0 million increase in interest income, resulting from a $209.4 million increase in interest income from loans and loans held for sale, offset by a $8.0 million decrease in interest income from investment securities, and a $4.5 million decrease in interest income on federal funds sold, securities purchased under agreement to resell and interest-bearing deposits. The increase in interest income in loans was due to 33 basis point increase in loan yields as loans continued to reprice higher during 2024 from the comparatively lower rate environment than in 2022 and in 2023. The increase in interest income from loans is also due to the increase in the average balance of non-acquired loans of $3.1 billion through organic loan growth of loans held for investment and acquired loans renewing. The Federal Reserve Bank decreased its federal funds rate by 100 basis points for the first time since early 2022. However, the rate cuts occurred during the third and fourth quarters of 2024, the first 50 basis-point rate cut in mid-September 2024, followed by two additional cuts of 25 basis-point each, one in early November 2024 and the other in mid-December 2024. The decline in interest income from investment securities was mainly due to the decline in average balance of $578.7 million. The rate cuts in 2024 were the primary driver of the 44-basis point yield decline in securities purchased under agreement to resell and interest-bearing deposits;"]] [[/GREPCENT_TABLE]] ​ 68 Table of Contents [[GREPCENT_TABLE]] [["","\u25cf","A $234.1 million increase in interest expense, primarily resulted from a $231.6 million increase in interest expense from deposits, a $3.2 million increase in interest expense from federal funds purchased, and a $1.5 million increase in interest expense in securities sold under agreements to repurchase, offset by a $2.4 million decrease in interest expense from other borrowings. The increase in interest expense from deposits was due to deposits repricing in the comparatively higher interest rate environment during 2024 along with growth in money market and time deposits which generally have higher rates than other deposits. The average cost of deposits, excluding noninterest-bearing deposits, increased by 73 basis points compared to 2023;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","A $98.1 million decrease in the provision for credit losses, as the Company recorded a provision for credit losses of $16.0 million in 2024 compared to $114.1 million in 2023. During 2024, we recorded a lower provision for credit losses as economic forecasts improved with inflation moderating and interest rates declining during the current period;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","A $15.4 million increase in noninterest income, which resulted primarily due to an increase in mortgage banking income of $6.7 million, an increase in trust and investment services income of $6.0 million, an increase in other noninterest income of $6.0 million, an increase in debit, prepaid, ATM and merchant card related income of $4.0 million, an increase in bank owned life insurance of $3.8 million, and an increase in fees on deposit accounts of $3.1 million. These increases were offset by a decline in correspondent banking and capital market income of $16.5 million (See Noninterest Income section on page 73 for further discussion);"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","A $6.9 million increase in noninterest expense, resulted primarily from a $23.5 million increase in salaries and employee benefits expense, a $7.7 million increase information services expenses, a $7.0 million increase in merger, branch consolidation, severance related and other expense, and a $3.0 million increase in OREO expense and loan related expense. These increases were offset by a $21.8 million decrease in FDIC assessment and other regulatory charges, a $5.2 million decrease in amortization expense of intangible assets, a $4.4 million decrease in other noninterest expense, and a $2.1 million decrease in professional fees (See Noninterest Expense section on page 75 for further discussion); and"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Higher income tax provision of $28.9 primarily due to the change in pre-tax book income between the two years. The Company recorded pre-tax book income of $700.2 million in 2024 compared to pre-tax book income of $630.9 million in 2023. The increase was also due to the effects of the Company adopting ASU 2023-02 in the first quarter of 2024 whereby it applied the proportional amortization method of accounting related to its low-income housing tax credits partnerships (\u201cLIHTC\u201d). With the adoption of ASU 2023-02, the amortization of the LIHTCs is now recorded within Provision for Income Taxes rather than Other Noninterest Expense on the Consolidated Statements of Income. LIHTC amortization totaled $14.4 million during 2024. The change in the accounting method, in addition to other items recorded during the year, increased our effective tax rate for 2024 compared to 2023. The Company\u2019s effective tax rate was 23.63% for the year ended December 31, 2024 compared to 21.64% for the year ended December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Basic earnings per common share increased 7.8% to $7.01 in 2024, from $6.50 in 2023 and increased 5.4% from $6.65 in 2022."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Diluted earnings per common share increased 7.9% to $6.97 in 2024, from $6.46 in 2023, and increased 5.6% from $6.60 in 2022."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Return on average assets was 1.17% in 2024, an increase compared to 1.11% in 2023, and a slight decrease in 2023 compared to 1.12% in 2022. The increase in 2024 compared to 2023 resulted from the increase in net income of $40.5 million, or 8.2%, to $534.8 million being greater than the increase in total average assets of $981.1 million, or 2.2%, to $45.6 billion in 2024. The increase in 2023 compared to 2022 was driven by both the increase in total average assets along with the decrease in net income."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Return on average common shareholders\u2019 equity increased to 9.41% in 2024, compared to 9.37% in 2023, and decreased in 2023 from 9.84% in 2022. The increase in 2024 compared to 2023 was due to the increase in net income by 8.2%, or $40.5 million, to $534.8 million was greater than the growth in average common shareholders\u2019 equity of 7.7%, or $408.6 million. The decrease in 2023 compared to 2022 was driven by the growth in average common shareholders\u2019 equity and decline in net income."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Our dividend payout ratio was 30.22% for 2024 compared with 31.34% in 2023 and 29.54% in 2022. The decrease in the dividend payout ratio in 2024 compared to 2023 was due to the increase in net income available to common shareholders of 8.2%, or $40.5 million, exceeded the increase in total dividends paid during 2024 of 4.3%, or $6.7 million. The increase in the dividend payout ratio in 2023 compared to 2022 was due to the increase in total dividends paid during 2023 of 5.8%, or $8.4 million, while the net income available to common shareholders decreased 0.4%, or $1.7 million."]] [[/GREPCENT_TABLE]] 69 Table of Contents Net Interest Income ​ Net interest income is the largest component of our net income. Net interest income is the difference between income earned on interest-earning assets and interest paid on deposits and borrowings. Net interest income is determined by the yields earned on interest-earning assets, rates paid on interest-bearing liabilities, the relative balances of interest-earning assets and interest-bearing liabilities, the degree of mismatch, and the maturity and repricing characteristics of interest-earning assets and interest-bearing liabilities. Net interest income divided by average interest-earning assets represents our net interest margin. The Federal Reserve implemented a total rate cut of 100 basis-point, beginning with a 50 basis-point reduction in mid-September 2024. This was followed by two additional cuts of 25 basis-point each, one in early November 2024 and the other in mid-December 2024. These rate cuts came after a series of rate hikes that began in March 2022, resulting in a target range of 4.25% to 4.50% at December 31, 2024. As the rate reductions occurred during the later part of the year 2024, the Company operated in a comparatively higher rate environment in 2024 compared to 2023. 2024 compared to 2023 Net interest income and net interest margin are highlighted for the year ended December 31, 2024, compared to 2023: [[GREPCENT_TABLE]] [["","\u25cf","The non-tax equivalent and the Tax Equivalent (\u201cTE\u201d) net interest margin decreased by 19 basis points and 20 basis points, respectively, in 2024 compared to 2023. The net interest margin decreased primarily due to the increase in the cost of interest-bearing liabilities of 70 basis points outweighing the increase in the yield on interest earning assets of 33 basis points. The increase in the cost of interest-bearing liabilities lagged the increase in yield on interest-earning assets during the rising interest rate cycle but accelerated during latter half of 2023 and into 2024."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Overall, our yield on interest-earning assets in 2024 increased 33 basis points from 2023, primarily due to higher yields on a majority of interest-earning assets, including loans held for investment, investments securities, and loans held for sale, as the Federal Reserve Bank interest rate hikes during 2023 and 2024 continue to impact these rates. Our net interest margin benefitted from higher yields on loans held for investment of 33 basis points and an increase in the average balance of $1.7 billion, as this loan category is our highest yielding loan category. This increase was offset by a decline in the average balances of investment securities of $578.7 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The average cost of interest-bearing liabilities in 2024 compared to 2023 increased 70 basis points. This increase was driven by the effects from the relatively higher rate environment on the repricing of all deposit accounts, federal funds purchased, securities purchased with agreement to repurchase, and trust preferred corporate debt. The average cost of interest-bearing deposits increased 73 basis points as the cost increase occurred across all deposit categories as a result of the higher rate environment and a change in the deposit mix. Our deposits have shifted from lower-costing savings and transaction accounts to higher-costing money market accounts as the depositors have sought higher yields. The average cost of securities sold with agreements to repurchase and federal funds purchased increased by 80 basis points and 13 basis points, respectively, while the average cost of corporate and subordinated debentures increased by 7 basis points. Other borrowings, consisting of FHLB advances had an average cost of 5.55% during 2024 compared to 5.08% during 2023. Our overall cost of funds, including noninterest-bearing deposits, was 1.88% for the year 2024, compared to 1.30% for the year 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Our net interest income decreased by $37.2 million, or 2.6%, to $1.4 billion during 2024 compared to 2023, as our interest expense increased $234.1 million while interest income increased $197.0 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Our interest income increased by $197.0 million led by higher non-acquired loan interest income of $283.5 million due to a higher average balance of $3.1 billion, and a higher yield of 43 basis points. Interest income on loans held for sale increased by $4.7 million due to a higher average balance of $69.1 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","These increases in interest income were partially offset by lower interest income on acquired loans of $78.7 million, investment securities of $8.0 million, and lower interest income on federal funds sold and repurchase agreements of $4.5 million. Contributing to this reduction are lower average balances of $1.4 billion, $578.7 million and $18.2 million in acquired loans, investment securities and federal funds sold and repurchase agreements, respectively. The effects from the decline in average balances were partially offset by the increases in yields of 10 basis points on acquired loans and 8 basis points on loans held for sale."]] [[/GREPCENT_TABLE]] ​ 70 Table of Contents [[GREPCENT_TABLE]] [["","o","Our interest expense increased by of $234.1 million in 2024 compared to 2023, due primarily to an increase in interest expense on interest-bearing deposits of $231.6 million, which was attributable to an increase in the average cost of 73 basis points, and an increase in the average balances of $2.0 billion. As noted above, the increase in expense on interest-bearing deposit was significantly impacted by the change in mix from lower costing savings and transaction deposit accounts to higher costing money market and certificate and other time deposit accounts as customer sought higher yields and competition for these deposits increased during 2024. Interest expense on federal funds purchased, repurchase agreements and corporate and subordinated debentures increased $3.2 million, $1.5 million, and $257,000, respectively, due to increases in the average costs of 13 basis points, 80 basis points, and 7 basis points, respectively."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","During 2024, we recorded lower interest expense related to other borrowings of $2.4 million, due to a decrease in the average balance of $63.8 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Average interest-earning assets increased $1.2 billion, or 3.0%, to $41.3 billion in 2024 compared to 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The increase in the average balance on non-acquired loan portfolio of $3.1 billion was due to organic growth and renewals of matured acquired loans that are moved to our non-acquired loan portfolio."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The increase in the average balance of loans held for sale of $69.1 million was primarily due to the SBA loans purchased from third-party originators in 2024. The Company began purchasing and pooling the guaranteed portion of SBA loans during the third quarter of 2024."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The decrease in the average balance on the acquired loan portfolio of $1.4 billion was due to paydowns, pay-offs and renewals of acquired loans that are moved to our non-acquired loan portfolio."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The average balance in investment securities decreased by $578.7 million. The decrease in average was primarily a result of maturities, calls and paydowns on available for sale and held to maturity securities of $511.6 million, and $228.5 million, respectively, during the year, along with sales of available for sale securities of $2.0 million. In addition, the unrealized gain/loss position on available for sale securities decreased $32.0 million. These decreases were partially offset by purchases of available for sale securities of $96.8 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The average balance on federal funds sold, securities purchased under agreements to resell and other interest earning deposits decreased $18.2 million. The average balance was lower in 2024 as the Company used liquidity to fund loan growth."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Average interest-bearing liabilities increased $2.0 billion, or 7.6%, to $28.0 billion in 2024 compared to 2023"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The average balance of interest-bearing deposits increased $2.0 billion primarily due to increases in money market and time deposit accounts of $2.6 billion and $352.6 million, respectively. These increases were offset by decreases in the average balance of transaction and savings accounts of $469.3 million and $468.0 million, respectively. During 2024, as customers sought higher yields driving the increased balances in money market and tine deposit accounts that have higher rates."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The average balance of federal funds purchased increased $55.4 million and repurchase agreements decreased $50.2 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The average balance of other borrowings decreased by $63.8 million. The Company utilized short-term FHLB advance throughout 2023 and until the third quarter of 2024 as deposits markets became more competitive. All of the outstanding balance was subsequently paid-off during the fourth quarter of 2024."]] [[/GREPCENT_TABLE]] ​ 71 Table of Contents Table 1—Yields on Average Interest-Earning Assets and Rates on Average Interest-Bearing Liabilities [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended December 31,"],["\u200b","\u200b","2024","\u200b","2023","\u200b","2022"],["\u200b","\u200b","\u200b","\u200b","\u200b","Interest","\u200b","Average","\u200b","\u200b","\u200b","\u200b","Interest","\u200b","Average","\u200b","\u200b","\u200b","\u200b","Interest","\u200b","Average"],["\u200b","\u200b","Average","\u200b","Earned/","\u200b","Yield/","\u200b","Average","\u200b","Earned/","\u200b","Yield/","\u200b","Average","\u200b","Earned/","\u200b","Yield/"],["(Dollars in thousands)","","Balance","","Paid","","Rate","","Balance","","Paid","","Rate","","Balance","","Paid","","Rate"],["Assets","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Interest\u2011earning assets:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non\u2011acquired loans, net of unearned income (1)","\u200b","$","27,920,075","\u200b","$","1,595,916","","5.72","%","$","24,813,599","\u200b","$","1,312,452","","5.29","%","$","19,094,680","\u200b","$","769,766","","4.03","%"],["Acquired loans, net","\u200b","","5,212,144","\u200b","","323,225","","6.20","%","","6,589,692","\u200b","","401,914","","6.10","%","","8,361,454","\u200b","","405,578","","4.85","%"],["Loans held for sale","\u200b","","99,857","\u200b","","6,697","","6.71","%","","30,740","\u200b","","2,039","","6.63","%","","64,684","\u200b","","2,682","","4.15","%"],["Investment securities (2):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Taxable","\u200b","","6,435,688","\u200b","","155,470","","2.42","%","","7,014,604","\u200b","","162,907","","2.32","%","","7,569,603","\u200b","","149,790","","1.98","%"],["Tax\u2011exempt","\u200b","","813,960","\u200b","","22,928","","2.82","%","","813,695","\u200b","","23,455","","2.88","%","","874,255","\u200b","","22,361","","2.56","%"],["Federal funds sold and securities purchased under agreements to resell and time deposits","\u200b","","817,853","\u200b","","37,126","","4.54","%","","836,068","\u200b","","41,639","","4.98","%","","3,917,233","\u200b","","46,848","","1.20","%"],["Total interest\u2011earning assets","\u200b","","41,299,577","\u200b","","2,141,362","","5.18","%","","40,098,398","\u200b","","1,944,406","","4.85","%","","39,881,909","\u200b","","1,397,025","","3.50","%"],["Noninterest\u2011earning assets:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cash and due from banks","\u200b","","437,084","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","471,418","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","550,733","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Other assets","\u200b","","4,366,169","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","4,486,196","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","4,361,927","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Allowance for loan losses","\u200b","","(465,809)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","(400,051)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","(314,094)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total noninterest\u2011earning assets","\u200b","","4,337,444","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","4,557,563","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","4,598,566","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total assets","\u200b","$","45,637,021","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","44,655,961","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","44,480,475","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Liabilities","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Interest\u2011bearing liabilities:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Deposits","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Transaction and money market accounts","\u200b","$","19,991,510","\u200b","$","488,865","","2.45","%","$","17,843,581","\u200b","$","307,692","","1.72","%","$","17,515,277","\u200b","$","27,408","","0.16","%"],["Savings deposits","\u200b","","2,493,636","\u200b","","7,282","","0.29","%","","2,961,654","\u200b","","7,514","","0.25","%","","3,529,142","\u200b","","1,781","","0.05","%"],["Certificates and other time deposits","\u200b","","4,394,644","\u200b","","175,678","","4.00","%","","4,042,052","\u200b","","125,051","","3.09","%","","2,673,000","\u200b","","7,795","","0.29","%"],["Federal funds purchased","\u200b","","281,031","\u200b","","14,646","","5.21","%","","225,642","\u200b","","11,457","","5.08","%","","278,251","\u200b","","3,744","","1.35","%"],["Securities sold with agreements to repurchase","\u200b","\u200b","267,713","\u200b","\u200b","5,622","\u200b","2.10","%","\u200b","317,879","\u200b","\u200b","4,132","\u200b","1.30","%","\u200b","395,141","\u200b","\u200b","759","\u200b","0.19","%"],["Corporate and subordinated debentures","\u200b","\u200b","391,729","\u200b","\u200b","23,874","\u200b","6.09","%","\u200b","392,099","\u200b","\u200b","23,617","\u200b","6.02","%","\u200b","386,154","\u200b","\u200b","19,294","\u200b","5.00","%"],["Other borrowings","\u200b","","179,235","\u200b","","9,941","","5.55","%","","243,014","\u200b","","12,335","","5.08","%","","10,959","\u200b","","573","","5.23","%"],["Total interest\u2011bearing liabilities","\u200b","","27,999,498","\u200b","","725,908","","2.59","%","","26,025,921","\u200b","","491,798","","1.89","%","","24,787,924","\u200b","","61,354","","0.25","%"],["Noninterest\u2011bearing liabilities:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Noninterest\u2011bearing deposits","\u200b","","10,515,850","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","11,777,053","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","13,481,876","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Other liabilities","\u200b","","1,435,705","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","1,575,621","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","1,170,394","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total noninterest\u2011bearing liabilities","\u200b","","11,951,555","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","13,352,674","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","14,652,270","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Shareholders\u2019 equity","\u200b","","5,685,968","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","5,277,366","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","5,040,281","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total noninterest\u2011bearing liabilities and shareholders\u2019 equity","\u200b","","17,637,523","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","18,630,040","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","19,692,551","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total liabilities and shareholders\u2019 equity","\u200b","$","45,637,021","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","44,655,961","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","44,480,475","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest spread","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","2.59","%","\u200b","\u200b","\u200b","\u200b","\u200b","","2.96","%","\u200b","\u200b","\u200b","\u200b","\u200b","","3.25","%"],["Net interest income and margin (non\u2011taxable equivalent)","\u200b","\u200b","\u200b","\u200b","$","1,415,454","","3.43","%","\u200b","\u200b","\u200b","$","1,452,608","","3.62","%","\u200b","\u200b","\u200b","$","1,335,671","","3.35","%"],["TEFRA (included in net interest margin, tax equivalent)","\u200b","\u200b","\u200b","\u200b","\u200b","2,192","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","3,023","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","8,876","\u200b","\u200b","\u200b"],["Net interest income and margin (taxable equivalent)","\u200b","\u200b","\u200b","\u200b","$","1,417,646","","3.43","%","\u200b","\u200b","\u200b","$","1,455,631","","3.63","%","\u200b","\u200b","\u200b","$","1,344,547","","3.37","%"],["Total Deposit Cost (without corporate and subordinated debentures and other borrowings)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","1.80","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","1.20","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","0.10","%"],["Overall Cost of Funds (including interest-bearing deposits)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","1.88","%","\u200b","\u200b","\u200b","\u200b","\u200b","","1.30","%","\u200b","\u200b","\u200b","\u200b","\u200b","","0.16","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","Nonaccrual loans are included in the above analysis."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(2)","Investment securities (taxable and tax-exempt) include trading securities."]] [[/GREPCENT_TABLE]] 72 Table of Contents Table 2—Volume and Rate Variance Analysis [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2024 Compared to 2023","\u200b","2023 Compared to 2022"],["\u200b","\u200b","Increase (Decrease) due to","\u200b","Increase (Decrease) due to"],["(Dollars in thousands)","","Volume (1)","","Rate (1)","","Total","","Volume(1)","","Rate(1)","","Total"],["Interest income on:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non\u2011acquired loans, net of unearned income (2)","\u200b","$","164,309","\u200b","$","119,155","\u200b","$","283,464","\u200b","$","230,547","\u200b","$","312,139","\u200b","$","542,686","\u200b"],["Acquired loans (2)","\u200b","","(84,018)","\u200b","","5,329","\u200b","","(78,689)","\u200b","","(85,941)","\u200b","","82,277","\u200b","","(3,664)","\u200b"],["Loans held for sale","\u200b","","4,585","\u200b","","73","\u200b","","4,658","\u200b","","(1,407)","\u200b","","764","\u200b","","(643)","\u200b"],["Investment securities:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Taxable","\u200b","","(13,445)","\u200b","","6,008","\u200b","","(7,437)","\u200b","","(10,983)","\u200b","","24,100","\u200b","","13,117","\u200b"],["Tax exempt (3)","\u200b","","8","\u200b","","(535)","\u200b","","(527)","\u200b","","(1,549)","\u200b","","2,643","\u200b","","1,094","\u200b"],["Federal funds sold and securities purchased under agreements to resell and time deposits","\u200b","","(907)","\u200b","","(3,606)","\u200b","","(4,513)","\u200b","","(36,849)","\u200b","","31,640","\u200b","","(5,209)","\u200b"],["Total interest income","\u200b","","70,532","\u200b","","126,424","\u200b","","196,956","\u200b","","93,818","\u200b","","453,563","\u200b","","547,381","\u200b"],["Interest expense on:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Deposits","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Transaction and money market accounts","\u200b","","37,039","\u200b","","144,134","\u200b","","181,173","\u200b","","514","\u200b","","279,770","\u200b","","280,284","\u200b"],["Savings deposits","\u200b","","(1,187)","\u200b","","955","\u200b","","(232)","\u200b","","(286)","\u200b","","6,019","\u200b","","5,733","\u200b"],["Certificates and other time deposits","\u200b","","10,877","\u200b","","39,750","\u200b","","50,627","\u200b","","3,992","\u200b","","113,264","\u200b","","117,256","\u200b"],["Federal funds purchased","\u200b","","2,812","\u200b","","377","\u200b","","3,189","\u200b","","(708)","\u200b","","8,421","\u200b","","7,713","\u200b"],["Securities sold under agreements to repurchase","\u200b","\u200b","(652)","\u200b","\u200b","2,142","\u200b","\u200b","1,490","\u200b","\u200b","(149)","\u200b","\u200b","3,522","\u200b","\u200b","3,373","\u200b"],["Other borrowings","\u200b","","(3,631)","\u200b","","1,494","\u200b","","(2,137)","\u200b","","11,907","\u200b","","4,178","\u200b","","16,085","\u200b"],["Total interest expense","\u200b","","45,258","\u200b","","188,852","\u200b","","234,110","\u200b","","15,270","\u200b","","415,174","\u200b","","430,444","\u200b"],["Net interest income","\u200b","$","25,274","\u200b","$","(62,428)","\u200b","$","(37,154)","\u200b","$","78,548","\u200b","$","38,389","\u200b","$","116,937","\u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","The rate/volume variance for each category has been allocated on the same basis between rate and volumes."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(2)","Nonaccrual loans are included in the above analysis."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(3)","Tax exempt income is not presented on a taxable-equivalent basis in the above analysis."]] [[/GREPCENT_TABLE]] Noninterest Income and Expense Noninterest income provides us with additional revenues that are significant sources of income. In 2024, 2023, and 2022, noninterest income comprised 17.6%, 16.5%, and 18.8%, respectively, of total net interest income and noninterest income. Table 3—Noninterest Income for the Three Years [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","Year Ended December 31,"],["(Dollars in thousands)","","","2024","","2023","","2022"],["Service charges on deposit accounts","\u200b","\u200b","$","91,333","\u200b","$","88,271","\u200b","$","82,165","\u200b"],["Debit, prepaid, ATM and merchant card related income","\u200b","\u200b","","44,761","\u200b","","40,744","\u200b","","42,645","\u200b"],["Mortgage banking income","\u200b","\u200b","","20,047","\u200b","","13,355","\u200b","","17,790","\u200b"],["Trust and investment services income","\u200b","\u200b","","45,474","\u200b","","39,447","\u200b","","39,019","\u200b"],["Correspondent banking and capital markets income","\u200b","\u200b","\u200b","32,619","\u200b","\u200b","49,101","\u200b","\u200b","78,755","\u200b"],["Securities (losses) gains, net","\u200b","\u200b","","(50)","\u200b","","43","\u200b","","30","\u200b"],["SBA income","\u200b","\u200b","","16,226","\u200b","","13,929","\u200b","","15,636","\u200b"],["Bank owned life insurance income","\u200b","\u200b","\u200b","30,484","\u200b","\u200b","26,690","\u200b","\u200b","24,311","\u200b"],["Other","\u200b","\u200b","","21,368","\u200b","","15,326","\u200b","","8,896","\u200b"],["Total noninterest income","\u200b","\u200b","$","302,262","\u200b","$","286,906","\u200b","$","309,247","\u200b"]] [[/GREPCENT_TABLE]] ​ 2024 compared to 2023 Our noninterest income increased $15.4 million, or 5.4%, for the year ended December 31, 2024 compared to 2023. This change in total noninterest income resulted from the following: [[GREPCENT_TABLE]] [["","\u25cf","Service charges on deposit accounts were higher in 2024 by $3.1 million, or 3.5%, compared to 2023. The increase was mainly attributable to a $1.7 million increase in overdraft fees and a $1.0 million increase in account maintenance fees in 2024 compared to 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Debit, prepaid, ATM and merchant card related income increased by $4.0 million, or 9.9%, in 2024 compared to 2023. The increase in debit, ATM, prepaid and merchant card related income was mainly attributable to an increase in bankcard income of $2.8 million and a decrease in card and ATM system related expense of $1.4 million."]] [[/GREPCENT_TABLE]] 73 Table of Contents [[GREPCENT_TABLE]] [["","\u25cf","Mortgage banking income increased by $6.7 million, or 50.1%, which comprised of a $6.7 million, or 82.5%, increase in secondary market mortgage income, offset by a $16,000, or 0.3%, decrease in mortgage servicing related income. Mortgage production declined from $2.2 billion in 2023 to $1.9 billion in 2024 with relatively higher mortgage rates continuing during 2024. During 2024, we sold 58% of our mortgage production to the secondary market versus 40% in 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","During 2024, mortgage income from the secondary market comprised of a $5.4 million increase in gain on sale of mortgage loans, which is net of the commission expense related to mortgage production, and a $2.5 million increase in the fair value of MBS forward trades, offset by the change in fair value of the pipeline of $1.0 million and a $193,000 decrease in the fair value of loans held for sale. Mortgage commission expense was $11.3 million during 2024 compared to $8.6 million during 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","The slight decrease in mortgage servicing related income, net of the hedge, during 2024 was due to a $237,000 decrease in the change in fair value of the MSR including decay, offset by a $221,000 increase in servicing fee income. The decrease in fair value of the MSR in 2024 was primarily due to a decrease in gains on the MSR hedge of $5.3 million and a $386,000 decrease due to a decline in MSR decay, offset by an increase in the change in fair value from interest rates of $5.5 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Trust and investment services income increased $6.0 million, or 15.3%, in 2024 compared to 2023. The increase was primarily due to an increase in fee earned as the average assets under management increased $1.1 billion, or 13.9%, and an increase in number of relationships under management from December 31, 2024 to December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Correspondent banking and capital markets income decreased by $16.5 million, or 33.6%, from 2023. The decline was primarily related to a decrease of $20.9 million in income generated from the sale of customer swap ARC hedges during 2024 compared to 2023, due to the higher interest rate environment in 2024. The decline was offset by a $5.0 million decrease in the expense attributable to the variation margin payments for centrally cleared swaps where we recorded an expense of $36.5 million related to variation margin payments in 2024 compared to an expense of $41.5 million in 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","SBA income increased by $2.3 million, or 16.5%, compared to 2023. The increase was primarily attributable to an increase in gains on sale of SBA loans of $2.3 million due to an increase in the volume of loans sold of 8% in 2024."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Bank owned life insurance income increased $3.8 million, or 14.2%, in 2024 compared to 2023. This increase was primarily due to higher death proceeds on BOLI policies received during 2024 compared to 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Other income increased by $6.0 million, or 39.4%, in 2024 compared to 2023. This increase was primarily due to approximately $5.2 million of income recognized on federal tax refunds received during the second quarter of 2024 for net operating loss carrybacks filed in 2021, and approximately $876,000 resulting from the release of accrued expense attributable to UTPs."]] [[/GREPCENT_TABLE]] ​ 74 Table of Contents Table 4—Noninterest Expense for the Three Years [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended December 31,"],["(Dollars in thousands)","","2024","","2023","","2022"],["Salaries and employee benefits","\u200b","$","606,869","\u200b","$","583,398","\u200b","$","554,704","\u200b"],["Occupancy expense","\u200b","","90,103","\u200b","","88,695","\u200b","","89,501","\u200b"],["Information services expense","\u200b","","92,193","\u200b","","84,472","\u200b","","79,701","\u200b"],["OREO and loan related expense","\u200b","","4,687","\u200b","","1,716","\u200b","","369","\u200b"],["Amortization of intangibles","\u200b","","22,395","\u200b","","27,558","\u200b","","33,205","\u200b"],["Business development and staff related expense","\u200b","","25,266","\u200b","","25,055","\u200b","","19,015","\u200b"],["Supplies and printing","\u200b","","3,531","\u200b","","3,575","\u200b","","2,871","\u200b"],["Postage expense","\u200b","\u200b","7,027","\u200b","\u200b","7,003","\u200b","\u200b","6,750","\u200b"],["Professional fees","\u200b","","16,404","\u200b","","18,547","\u200b","","15,331","\u200b"],["FDIC assessment and other regulatory charges","\u200b","","31,152","\u200b","","33,070","\u200b","","23,033","\u200b"],["FDIC special assessment","\u200b","\u200b","3,852","\u200b","\u200b","25,691","\u200b","\u200b","\u2014","\u200b"],["Advertising and marketing","\u200b","","9,143","\u200b","","9,474","\u200b","","8,888","\u200b"],["Merger, branch consolidation, severance related and other expense","\u200b","","20,133","\u200b","","13,162","\u200b","","30,888","\u200b"],["Other","\u200b","","68,738","\u200b","","73,164","\u200b","","65,445","\u200b"],["Total noninterest expense","\u200b","$","1,001,493","\u200b","$","994,580","\u200b","$","929,701","\u200b"]] [[/GREPCENT_TABLE]] ​ 2024 compared to 2023 Noninterest expense represents the largest expense category for our company. Noninterest expense increased $6.9 million, or 0.7%, for the year ended December 31, 2024 compared to 2023. The change in total noninterest expense resulted from the following: [[GREPCENT_TABLE]] [["","\u25cf","Salaries and employee benefits increased $23.5 million, or 4.0%, in 2024 compared to 2023. The increase was primarily driven by an increase in salaries of approximately $12.8 million resulting from merit increases. In addition, employee benefit costs increased approximately by $10.1 million, resulting from higher Supplemental Executive Retirement Plans (\u201cSERP\u201d) and employer payroll tax related expenses. SERP costs were lower in 2023 because of the impact of interest rates on the 2023 annual SERP liability adjustment due to increases in interest rates. Incentive expense increased by $7.8 million during 2024. These increases were partially offset by a decrease in commissions of $7.2 million, which is mainly attributable to lower commissions related to the correspondent banking division resulting from lower bond sales and lower income from the ARC hedging program."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Occupancy expense increased $1.4 million, or 1.6%, in 2024 compared to 2023. The increase was primarily due to increases in branch maintenance and repair expenses."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Information services expense increased $7.7 million, or 9.1%, in 2024 compared to 2023. The increase was due to additional cost associated with outsourced business processing services and the Company updating online banking and data communication related services as it grows in size and complexity."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","OREO expense and loan related expense increased $3.0 million, or 173.1%, in 2024 compared to 2023, which was primarily due to approximately a $1.8 million increase in loan related expenses including legal, tax and other costs, and a $1.2 million increase in losses on sales of OREO and bank property held for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Amortization of intangibles, which is related to the Company\u2019s prior mergers, decreased $5.2 million, or 18.7%."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Professional fees decreased $2.1 million, or 11.6%, in 2024 compared to 2023. This decrease was primarily due to a decrease in consulting related fees totaling $2.9 million, offset by an increase in audit and tax advisory related fees of $1.3 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","FDIC assessment and other regulatory charges, excluding the FDIC special assessment, decreased $1.9 million, or 5.8%. The decrease in the FDIC assessment was primarily attributed to a lower assessment rate, reflecting the Bank\u2019s strengthened capital position year-over-year."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","The Company accrued a total of $3.8 million in 2024 related to the FDIC\u2019s special assessment introduced in 2023 compared to a total of $25.7 million in 2023. The FDIC levied the special assessment to recover losses to the FDIC\u2019s Deposit Insurance Fund resulting from the bank failures that occurred in early 2023. The Bank increased its accrual of the FDIC special assessment during the first and second quarter of 2024 based upon estimates of losses provided by the FDIC at that time. Subsequently, the FDIC announced a projected reduction in the special assessment rate, which resulted in a reduction of assessment accrual by approximately $621,000."]] [[/GREPCENT_TABLE]] ​ 75 Table of Contents [[GREPCENT_TABLE]] [["","\u25cf","Merger, branch consolidation and severance related expense increased $7.0 million, or 53.0% in 2024 compared to 2023. The increase was primarily due to an increase in costs associated with the cybersecurity incident of approximately $8.3 million along with an increase in merger costs of approximately $5.6 million. These increases were offset by a decrease in restructuring and other one-time costs of $5.6 million."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Other noninterest expense decreased $4.4 million, or 6.0%, compared to 2023. This decrease was primarily driven by a reduction in expense of approximately $9.6 million due to the amortization of LIHTCs recorded in income tax expense effective January 1, 2024 following the adoption of ASU 2023-02, along with approximately a $6.5 million decrease in fraud charge-offs and other insurance and miscellaneous operational charge-off related expenses. These decreases were offset by a $12.8 million increase in earnings credit expense to Homeowners Association (\u201cHOA\u201d) customers. The Bank provides a credit to HOA customers based on the average deposit balances held that reduces fees for other services provided."]] [[/GREPCENT_TABLE]] ​ Income Tax Expense Our effective tax rate increased to 23.63% at December 31, 2024, compared to 21.64% for the year-ended December 31, 2023.  The increase was primarily due to the inclusion of amortization of Low-Income Housing Tax Credit Investments in income tax expense due to the adoption of the proportional amortization method during the first quarter of 2024 as well as an increase in pre-tax income in the current period. This was partially offset by a decrease in non-deductible executive compensation and TEFRA interest expense disallowance compared to December 31, 2023. For additional information refer to Note 11—Income Taxes in the consolidated financial statements. Segment Reporting As discussed in Note 28—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. ​ 76 Table of Contents The table below provides PPNR and TE NIM information of the General Banking Unit. Table 5— Pre-Provision Net Revenue and Tax Equivalent Net Interest Margin [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended December 31,","\u200b"],["(Dollars in thousands)","","2024","","2023","","2022"],["Revenue, Adjusted (Non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest income (GAAP) (a)","\u200b","$","1,415,454","\u200b","$","1,452,608","\u200b","$","1,335,671","\u200b"],["Plus:","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Noninterest income","\u200b","\u200b","302,262","\u200b","\u200b","286,906","\u200b","\u200b","309,247","\u200b"],["Revenue (GAAP)","\u200b","$","1,717,716","\u200b","$","1,739,514","\u200b","$","1,644,918","\u200b"],["Less:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Securities (losses) gains, net","\u200b","\u200b","(50)","\u200b","\u200b","43","\u200b","\u200b","30","\u200b"],["Revenue, adjusted (Non-GAAP)","\u200b","$","1,717,766","\u200b","$","1,739,471","\u200b","$","1,644,888","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["PPNR, Adjusted (Non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Revenue, adjusted (Non-GAAP)","\u200b","$","1,717,766","\u200b","$","1,739,471","\u200b","$","1,644,888","\u200b"],["Less:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Noninterest expense","\u200b","\u200b","1,001,493","\u200b","\u200b","994,580","\u200b","\u200b","929,701","\u200b"],["PPNR (Non-GAAP)","\u200b","$","716,273","\u200b","$","744,891","\u200b","$","715,187","\u200b"],["Plus:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Merger, branch consolidation, severance related and other expense","\u200b","\u200b","20,133","\u200b","\u200b","13,162","\u200b","\u200b","30,888","\u200b"],["FDIC special assessment","\u200b","\u200b","3,852","\u200b","\u200b","25,691","\u200b","\u200b","\u2014","\u200b"],["PPNR, adjusted (Non-GAAP)","\u200b","$","740,258","\u200b","$","783,744","\u200b","$","746,075","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net Interest Margin, Tax Equivalent (\"TE\") (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Average interest earning assets (b)","\u200b","$","41,299,577","\u200b","$","40,098,398","\u200b","$","39,881,909","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest margin, non-TE ((a)/(b)) (GAAP)","\u200b","\u200b","3.43%","\u200b","\u200b","3.62%","\u200b","\u200b","3.35%","\u200b"],["TE adjustment (c)","\u200b","\u200b","2,192","\u200b","\u200b","3,023","\u200b","\u200b","8,876","\u200b"],["Net interest margin, TE (((a)+(c))/(b)) (non-GAAP)","\u200b","\u200b","3.43%","\u200b","\u200b","3.63%","\u200b","\u200b","3.37%","\u200b"]] [[/GREPCENT_TABLE]] Financial Condition Overview ​ At December 31, 2024, we had total assets of approximately $46.4 billion, consisting principally of $33.9 billion in total loans, before taking into account the allowance for credit losses of $465.3 million, $6.8 billion in investment securities, $1.4 billion in cash and cash equivalents and $1.9 billion in goodwill. Our liabilities at December 31, 2024 totaled $40.5 billion, consisting principally of deposits of $38.1 billion ($10.2 billion in noninterest-bearing and $27.9 billion in interest-bearing), $879.9 million derivative liabilities and $906.4 million of short-term and long-term borrowings. At December 31, 2024, our shareholders’ equity was $5.9 billion. ​ At December 31, 2023, we had total assets of approximately $44.9 billion, consisting principally of $32.4 billion in total loans, before taking into account the allowance for credit losses of $456.6 million, $7.5 billion in investment securities, $1.0 billion in cash and cash equivalents and $1.9 billion in goodwill. 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. At December 31, 2023, our shareholders’ equity was $5.5 billion. ​ Book value per common share was $77.18 at the end of 2024, an increase from $72.78 at the end of 2023. Book value per common share increased in 2024 as shareholder equity increased by 6.5% while common shares outstanding only increased by 0.4%. The primary reasons for an increase in shareholder’s equity of $357.3 December 31, 2024 were due to net income of $534.8 million and a $24.4 million increase in accumulated other comprehensive loss related to unrealized losses on available for sale securities and post-retirement benefit plans. 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. The improvement during 2024 was due to an increase in shareholders’ equity of 6.5%, resulting from the items noted above, while total assets had a moderate increase of 3.3%. 77 Table of Contents Trading Securities We have a trading portfolio associated with our Correspondent Bank Division and its subsidiary SouthState|Duncan-Williams. 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, mortgage-backed agency securities, and SBA securities, which are held for short periods of time and totaled $102.9 million and $31.3 million at December 31, 2024 and 2023, respectively. 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 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 December 31, 2024 and 2023, investment securities totaled $6.8 billion and $7.5 billion, respectively. For the year ended December 31, 2024, average investment securities were $7.1 billion, or 17.6% of average earning assets, compared with $7.7 billion, or 19.5% of average earning assets for the year ended December 31, 2023. The expected average life of the investment portfolio at December 31, 2024 was approximately 7.73 years, compared with 7.87 years at December 31, 2023. See Note 1—Summary of Significant Accounting Policies in the audited consolidated financial statements for our accounting policy on investment securities. As securities are purchased, they are designated as held to maturity or available for sale based upon our intent, which considers liquidity needs, interest rate expectations, asset/liability management strategies, and capital requirements. The following table presents the reported values of investment securities for the past two years: Table 6—Values of Investment Securities [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,"],["(Dollars in thousands)","","2024","","2023"],["Held to Maturity (amortized cost):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Government agencies","\u200b","$","147,272","\u200b","$","197,267","\u200b"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","1,297,543","\u200b","\u200b","1,438,102","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","411,721","\u200b","\u200b","444,883","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","348,338","\u200b","\u200b","354,055","\u200b"],["Small Business Administration loan-backed securities","\u200b","\u200b","49,796","\u200b","\u200b","53,133","\u200b"],["Total held to maturity","\u200b","$","2,254,670","\u200b","$","2,487,440","\u200b"],["Available for Sale (fair value):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Treasuries","\u200b","\u200b","10,656","\u200b","\u200b","73,890","\u200b"],["U.S. Government agencies","\u200b","\u200b","150,418","\u200b","\u200b","224,706","\u200b"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","1,377,525","\u200b","\u200b","1,558,306","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","459,095","\u200b","\u200b","527,422","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","","1,040,555","\u200b","","1,024,170","\u200b"],["State and municipal obligations","\u200b","","945,723","\u200b","","977,461","\u200b"],["Small Business Administration loan-backed securities","\u200b","","310,112","\u200b","","371,686","\u200b"],["Corporate securities","\u200b","","26,509","\u200b","","26,747","\u200b"],["Total available for sale","\u200b","","4,320,593","\u200b","","4,784,388","\u200b"],["Total other investments","\u200b","","223,613","\u200b","","192,043","\u200b"],["Total investment securities","\u200b","$","6,798,876","\u200b","$","7,463,871","\u200b"]] [[/GREPCENT_TABLE]] During 2024, our total investment securities decreased $665.0 million, or 8.9%, from December 31, 2023. During 2024, we purchased $236.9 million of securities, $96.8 million classified as available for sale and $140.1 million classified as other investments. These purchases were offset by maturities, paydowns, sales and calls of investment securities totaling $886.9 million. Net amortization of premiums were $19.3 million for the year ended December 31, 2024. 78 Table of Contents At December 31, 2024, the unrealized net loss of the available for sale investment securities portfolio was $808.6 million, or 15.8%, 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. The decrease in fair value in the available for sale investment portfolio at December 31, 2024 compared to December 31, 2023 was attributable to principal paydowns, maturities and calls as well as a higher interest rate environment. At December 31, 2024, the unrealized net loss of the held to maturity investment securities portfolio was $420.1 million, or 18.6%, below its amortized cost basis. At December 31, 2023, the unrealized net loss of the held to maturity investment securities portfolio was $402.7 million, or 16.2%, below its amortized cost basis. Table 7—Credit Ratings of Investment Securities [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","","\u200b","","","\u200b","","\u200b","","","\u200b","","","\u200b"],["\u200b","\u200b","Amortized","\u200b","Fair","\u200b","Unrealized","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(Dollars in thousands)","\u200b","Cost","\u200b","Value","\u200b","Net Gain (Loss)","\u200b","AAA \u2013 A","\u200b","Not Rated"],["December 31, 2024","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Treasuries","\u200b","$","10,654","\u200b","$","10,656","\u200b","$","2","\u200b","$","10,654","\u200b","$","\u2014","\u200b"],["U.S. Government agencies","\u200b","\u200b","316,479","\u200b","\u200b","274,192","\u200b","\u200b","(42,287)","\u200b","\u200b","316,479","\u200b","\u200b","\u2014","\u200b"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises *","\u200b","\u200b","2,957,394","\u200b","\u200b","2,433,864","\u200b","\u200b","(523,530)","\u200b","\u200b","92","\u200b","\u200b","2,957,302","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises *","\u200b","\u200b","969,009","\u200b","\u200b","798,759","\u200b","\u200b","(170,250)","\u200b","\u200b","\u2014","\u200b","\u200b","969,009","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises *","\u200b","","1,582,911","\u200b","\u200b","1,316,502","\u200b","\u200b","(266,409)","\u200b","\u200b","20,484","\u200b","","1,562,427","\u200b"],["State and municipal obligations","\u200b","","1,117,330","\u200b","\u200b","945,723","\u200b","\u200b","(171,607)","\u200b","\u200b","1,114,793","\u200b","","2,537","\u200b"],["Small Business Administration loan-backed securities","\u200b","","401,610","\u200b","\u200b","348,915","\u200b","\u200b","(52,695)","\u200b","\u200b","401,610","\u200b","","\u2014","\u200b"],["Corporate securities","\u200b","\u200b","28,499","\u200b","\u200b","26,509","\u200b","\u200b","(1,990)","\u200b","\u200b","\u2014","\u200b","\u200b","28,499","\u200b"],["\u200b","\u200b","$","7,383,886","\u200b","$","6,155,120","\u200b","$","(1,228,766)","\u200b","$","1,864,112","\u200b","$","5,519,774","\u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","*","Agency mortgage-backed securities (\u201cMBS\u201d), agency collateralized mortgage-obligations (\u201cCMO\u201d) and agency commercial mortgage-backed securities (\u201cCMBS\u201d) are guaranteed by the issuing government-sponsored enterprise (\u201cGSE\u201d) 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 \u201cTriple-A.\u201d 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."]] [[/GREPCENT_TABLE]] Held to maturity As described above, the Company elected to classify some of its securities purchased as held to maturity at the time of purchase. 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. The following are highlights of our held to maturity portfolio: [[GREPCENT_TABLE]] [["","\u25cf","Total amortized cost of held to maturity portfolio totaled $2.3 billion"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","The balance of securities held to maturity represented 4.9% of total assets at December 31, 2024."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","No purchases or sales of held to maturity investment securities in 2024; maturities, calls and paydowns totaled $228.5 million in 2024."]] [[/GREPCENT_TABLE]] ​ 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. At December 31, 2024, investment securities with a fair value and amortized cost of $4.3 billion and $5.1 billion, respectively, were classified as available for sale. 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. The following are highlights of our available for sale securities: [[GREPCENT_TABLE]] [["","\u25cf","Total securities available for sale decreased $463.8 million, or 9.7%, from the balance at December 31, 2023. The unrealized gain/loss position on the investment portfolio decreased $32.0 million and net amortization of premiums was $15.0 million during 2024. We purchased $96.8 million of available for sale investment securities in 2024, partially offset by maturities, calls and paydowns totaling $511.5 million and sales totaling $2.0 million in 2024. The sales in 2024 were mainly related to restructuring our portfolio to fit our investment strategy and risk profile."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","The balance of securities available for sale represented 9.3% of total assets at December 31, 2024 and 10.7% of total assets at December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Interest income earned on all investment securities in 2024 was $178.4 million, a decrease of $8.0 million, or 4.3%, from $186.4 million in 2023. The decrease was due to an increase in the yield on investment securities while the total average balance decreased $578.7 million. Total average securities balances decreased $578.7 million in 2024, contributing to the lower interest income earned on all investment securities. The volume decrease was offset by an 8 basis points increase in the yield on investments, to 2.5%."]] [[/GREPCENT_TABLE]] ​ 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 $1.3 billion, compared to 1,232 investment securities in an unrealized loss position, which totaled $1.2 billion at December 31, 2023. See Note 1—Summary of Significant Accounting Policies and Note 3—Investment Securities in the consolidated financial statements for additional information. Management evaluates securities for impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For securities designated as held for sale, credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component would be recognized through the provision for credit losses. Consideration is given to (1) the financial condition and near-term prospects of the issuer including looking at default and delinquency rates, (2) the outlook for receiving the contractual cash flows of the investments, (3) the extent to which the fair value has been less than cost, (4) our intent to hold the security as well as there being no requirement to sell the security, (5) the anticipated outlook for changes in the general level of interest rates, (6) credit ratings, (7) third-party guarantees, and (8) collateral values. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the investments. The Company performed an analysis that determined that the following securities have a zero expected credit loss: U.S. Treasury Securities, Agency-Backed Securities including securities issued by Ginnie Mae, Fannie Mae, FHLB, FFCB and SBA. All of the U.S. Treasury and Agency-Backed Securities have the full faith and credit backing of the United States Government or the credit backing of one of its agencies. Municipal securities and all other securities that do not have a zero expected credit loss are evaluated quarterly to determine whether there is a credit loss associated with a decline in fair value. 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. Also, as part of our evaluation of our intent and ability to hold investments, 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 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. Changes in the above considerations may affect our intent in the future. See Note 1—Summary of Significant Account Policies for further discussion. 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 December 31, 2024, other investment securities represented approximately $223.6 million, or 0.48% of total assets and primarily consisted of FRB and FHLB stock, which totaled $150.3 million and $18.1 million, respectively. There were no gains or losses on the sales of these securities during 2024 or 2023. Table 8—Maturity Distribution and Yields of Investment Securities [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Due In","\u200b","Due After","\u200b","Due After","\u200b","Due After","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","1 Year or Less","\u200b","1 Thru 5 Years","\u200b","5 Thru 10 Years","\u200b","10 Years","\u200b","Total"],["(Dollars in thousands)","","Amount","","Yield","","Amount","","Yield","","Amount","","Yield","","Amount","","Yield","","Amount","","Yield"],["Held to Maturity (amortized cost)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Government agencies","\u200b","$","14,365","\u200b","2.32","%","$","\u2014","\u200b","\u2014","%","$","132,907","\u200b","1.73","%","$","\u2014","\u200b","\u2014","%","$","147,272","\u200b","1.79","%"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","132,075","\u200b","1.96","\u200b","\u200b","1,165,468","\u200b","1.80","\u200b","\u200b","1,297,543","\u200b","1.82","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","411,721","\u200b","2.55","\u200b","\u200b","411,721","\u200b","2.55","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","36,431","\u200b","0.94","\u200b","\u200b","168,758","\u200b","1.49","\u200b","\u200b","143,149","\u200b","1.58","\u200b","\u200b","348,338","\u200b","1.47","\u200b"],["Small Business Administration loan-backed securities","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","49,796","\u200b","1.26","\u200b","\u200b","49,796","","1.26","\u200b"],["Total held to maturity","\u200b","$","14,365","\u200b","2.32","%","$","36,431","\u200b","0.94","%","$","433,740","\u200b","1.71","%","$","1,770,134","\u200b","1.94","%","$","2,254,670","","1.88","%"],["Available for Sale (fair value)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Government treasuries","\u200b","$","10,656","\u200b","4.33","%","$","\u2014","\u200b","\u2014","%","$","\u2014","\u200b","\u2014","%","$","\u2014","\u200b","\u2014","%","$","10,656","\u200b","4.33","%"],["U.S. Government agencies","\u200b","\u200b","49,763","\u200b","2.35","\u200b","\u200b","21,989","\u200b","1.63","\u200b","\u200b","78,666","\u200b","1.69","\u200b","\u200b","\u2014","\u200b","\u2014","\u200b","\u200b","150,418","","1.88","\u200b"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","69","\u200b","2.77","\u200b","\u200b","6,211","\u200b","2.18","\u200b","\u200b","135,096","\u200b","2.43","\u200b","\u200b","1,236,149","\u200b","2.00","\u200b","\u200b","1,377,525","\u200b","2.04","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","101","\u200b","2.71","\u200b","\u200b","4,801","\u200b","2.41","\u200b","\u200b","7,033","\u200b","2.30","\u200b","\u200b","447,160","\u200b","2.15","\u200b","\u200b","459,095","\u200b","2.16","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","13,504","\u200b","4.26","\u200b","\u200b","201,943","\u200b","2.71","\u200b","\u200b","588,082","\u200b","2.01","\u200b","\u200b","237,026","\u200b","1.78","\u200b","\u200b","1,040,555","\u200b","2.10","\u200b"],["State and municipal obligations (1)","\u200b","","2,969","\u200b","3.51","\u200b","","32,090","\u200b","3.11","\u200b","","161,600","\u200b","2.53","\u200b","","749,064","\u200b","2.84","\u200b","","945,723","","2.79","\u200b"],["Small Business Administration loan-backed securities","\u200b","","8,603","\u200b","2.67","\u200b","","34,079","\u200b","3.72","\u200b","","77,595","\u200b","3.69","\u200b","","189,835","\u200b","2.33","\u200b","","310,112","","2.80","\u200b"],["Corporate securities","\u200b","","\u2014","\u200b","\u2014","\u200b","","10,379","\u200b","8.04","\u200b","","15,280","\u200b","4.15","\u200b","","850","\u200b","4.50","\u200b","","26,509","","5.60","\u200b"],["Total available for sale","\u200b","$","85,665","\u200b","2.97","%","$","311,492","\u200b","2.94","%","$","1,063,352","\u200b","2.27","%","$","2,860,084","\u200b","2.25","%","$","4,320,593","\u200b","2.31","%"],["Total other investments (2)","\u200b","$","\u2014","\u200b","\u2014","%","$","\u2014","\u200b","\u2014","%","$","\u2014","\u200b","\u2014","%","$","223,613","\u200b","3.55","%","$","223,613","","3.55","%"],["Total investment securities","\u200b","$","100,030","\u200b","2.88","%","$","347,923","\u200b","2.74","%","$","1,497,092","\u200b","2.11","%","$","4,853,831","\u200b","2.20","%","$","6,798,876","","2.21","%"],["Percent of total","\u200b","","2","%","\u200b","\u200b","","5","%","\u200b","\u200b","","22","%","\u200b","\u200b","","71","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cumulative percent of total","\u200b","","2","%","\u200b","\u200b","","7","%","\u200b","\u200b","","29","%","\u200b","\u200b","","100","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","The expected average life for U.S. Government agencies is 5.35 years; 6.55 years for held to maturity and 4.30 years for available for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(2)","The expected average life for residential mortgage-backed securities issued by U.S. government agencies or sponsored enterprises is 7.06 years; 7.28 years for held to maturity and 6.89 years for available for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(3)","The expected average life for residential collateralized mortgage-obligations securities issued by U.S. government agencies or sponsored enterprises is 7.37 years; 8.11 years for held to maturity and 6.83 years for available for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(4)","The expected average life for commercial mortgage-backed securities issued by U.S. government agencies or sponsored enterprises is 6.27 years; 6.77 years for held to maturity and 6.13 years for available for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(5)","Weighted average yields on tax-exempt income have been presented on a taxable-equivalent basis, assuming a federal tax rate of 21.00% and a state tax rate of 4.95%, which is net of federal tax benefit in the above table. These yields were calculated using coupon interest and adjusting for discount accretion and premium amortization, where applicable."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(6)","The expected average life for state and municipal obligations is 13.94 years."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(7)","The expected average life for Small Business Administration loan-backed securities is 4.61 years; 5.06 years for held to maturity and 4.54 years for available for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(8)","The expected average life for corporate securities is 5.99 years."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(9)","The expected average life for US Treasuries is 0.10 years."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(10)","FRB, FHLB and other non-marketable equity securities have no set maturity date and are classified in \u201cDue after 10 Years.\u201d"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(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)."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(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."]] [[/GREPCENT_TABLE]] 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. 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. A portion of the municipal bond portfolio may be pledged to the Federal Home Loan Bank of Atlanta subject to their credit approval. Approximately 98% of the municipal bond portfolio has ratings in the Double A or Triple A category. ​ 81 Table of Contents As of December 31, 2024, the portfolio had an effective duration of 6.39 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: Table 9—Investment Portfolio Duration [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31, 2024","\u200b","December 31, 2023","\u200b"],["(Dollars in thousands, duration in years)","","Amount","","Duration","","Amount","","Duration","\u200b"],["Held to Maturity (amortized cost)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Government agencies","\u200b","$","147,272","\u200b","5.85","\u200b","$","197,267","\u200b","5.03","\u200b"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","1,297,543","\u200b","5.94","\u200b","\u200b","1,438,102","\u200b","6.40","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","411,721","\u200b","6.76","\u200b","\u200b","444,883","\u200b","6.24","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","348,338","\u200b","6.12","\u200b","\u200b","354,055","\u200b","4.06","\u200b"],["Small Business Administration loan-backed securities","\u200b","\u200b","49,796","\u200b","9.12","\u200b","\u200b","53,133","\u200b","6.95","\u200b"],["Total held to maturity","\u200b","$","2,254,670","\u200b","6.18","\u200b","$","2,487,440","\u200b","5.94","\u200b"],["Available for Sale (fair value)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Treasuries","\u200b","$","10,656","\u200b","0.10","\u200b","$","73,890","\u200b","0.35","\u200b"],["U.S. Government agencies","\u200b","\u200b","150,418","\u200b","3.95","\u200b","\u200b","224,706","\u200b","3.41","\u200b"],["Residential mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","1,377,525","\u200b","5.73","\u200b","\u200b","1,558,306","\u200b","6.12","\u200b"],["Residential collateralized mortgage-obligations issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","459,095","\u200b","6.00","\u200b","\u200b","527,422","\u200b","5.69","\u200b"],["Commercial mortgage-backed securities issued by U.S. government","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["agencies or sponsored enterprises","\u200b","\u200b","1,040,555","\u200b","5.35","\u200b","\u200b","1,024,170","\u200b","3.73","\u200b"],["State and municipal obligations","\u200b","","945,723","","10.08","\u200b","","977,461","","8.62","\u200b"],["Small Business Administration loan-backed securities","\u200b","","310,112","\u200b","5.09","\u200b","","371,686","\u200b","3.81","\u200b"],["Corporate securities","\u200b","","26,509","\u200b","1.27","\u200b","","26,747","\u200b","2.45","\u200b"],["Total available for sale","\u200b","$","4,320,593","\u200b","6.47","\u200b","$","4,784,388","\u200b","5.65","\u200b"]] [[/GREPCENT_TABLE]] ​ Loans Held for Sale ​ The balance of loans held for sale increased $228.5 million from December 31, 2023, to $279.4 million on December 31, 2024. Loans held for sale at December 31, 2024 consisted of mortgage and SBA loans held for sale while at December 31, 2023, loans held for sale consisted only of mortgage 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. This new activity in SBA loans held for sale was the main reason for the significant increase in loans held for sale during 2024. ​ During 2024, the Company purchased approximately $591.0 million in guaranteed portions of SBA loans. During 2024, the Company pooled approximately $353.5 million of the guaranteed portions of SBA loans into securities selling approximately $329.3 million into the secondary market. The Company also sold approximately $25.6 million in individual loans during the year. The Company held approximately $181.3 million in the guaranteed portion of SBA loans for sale at December 31, 2024. The Company also separately originates SBA loans and sells the guaranteed portions of these loans into the secondary market. During 2024, 2023 and 2022, the Company sold approximately $118.1 million, $109.3 million and $112.8 million, respectively, in guaranteed portions of SBA loans originated at the Bank and recognized gains of $11.8 million, $9.5 million and $10.3 million, respectively. ​ Mortgage loans held for sale totaled $98.1 million at December 31, 2024, an increase from $50.9 million at December 31, 2023. Total mortgage production was $1.9 billion in 2024. This compares to $2.2 billion 2023. Mortgage production declined from 2023 and remained flat in 2024 as mortgage rates have continued to remain high and housing inventory has remained low. The percentage of mortgage production sold into the secondary market increased in 2024 to 58% from 40% in 2023. 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. 82 Table of Contents Interest income from loans held for sale increased $4.7 million, or 228.4% during 2024 to $6.7 million from $2.0 million in 2023. This increase was due to an increase in the average balance of loans held for sale of $69.1 million or 224.8%, from $30.7 million for the year ended December 31, 2023 to $99.9 million for the year ended December 31, 2024. Of this increase, $35.2 million was related to SBA loans held for sale and $33.9 million was related to mortgage loans held for sale. The yield on loans held for sale remained fairly stable in 2024 compared to 2023. For year ended 2024 the yield on loans held for sale was 6.71% compared to 6.63% in 2023. ​ See Note 1—Summary of Significant Accounting Policies, under Loans Held for Sale section for more information. Loan Portfolio Our loan portfolio remains our largest category of interest-earning assets. At December 31, 2024, total loans, excluding held for sale loans, were $33.9 billion, which was an overall increase of $1.5 billion, or 4.7%, from the balance at the end of 2023. Non-acquired loan growth was $2.9 billion, or 11.0% for 2024, driven by organic growth and renewals of acquired loans moved to our non-acquired loan portfolio. The loan growth was made up of a 22.2% increase in commercial and industrial loans, a 12.5% increase in commercial owner-occupied real estate loans, a 12.1% increase in consumer real estate loans, and a 7.4% increase in non-owner occupied real estate loans (including construction and land development loans). Total acquired loans decreased by $1.4 billion, or 23.8% from the balance at the end of 2023. The decrease in acquired loans was due to 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. Average total loans outstanding during 2024 were $33.1 billion, an increase of $1.7 billion, or 5.5%, over the 2023 average of $31.4 billion. (For further discussion of the Company’s acquired loan accounting, see Note 1—Summary of Significant Accounting Policies, Note 2—Mergers and Acquisitions, Note 4—Loans and Note 5—Allowance for Credit Losses in the consolidated financial statements.) The following table presents a summary of the loan portfolio by category (excludes loans held for sale): Table 10—Distribution of Loans by Type [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,"],["(Dollars in thousands)","","2024","","2023"],["Acquired loans:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Acquired - non-purchased credit deteriorated loans:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non\u2011owner-occupied real estate (1)","\u200b","$","1,355,452","\u200b","$","1,866,809","\u200b"],["Consumer real estate (2)","\u200b","","619,208","\u200b","","724,463","\u200b"],["Commercial owner-occupied real estate","\u200b","","912,760","\u200b","","1,115,539","\u200b"],["Commercial and industrial","\u200b","","579,883","\u200b","","863,584","\u200b"],["Other income producing property","\u200b","","111,394","\u200b","","148,361","\u200b"],["Consumer","\u200b","","56,879","\u200b","","77,930","\u200b"],["Other","\u200b","\u200b","206","\u200b","\u200b","227","\u200b"],["Total acquired - non-purchased credit deteriorated loans","\u200b","\u200b","3,635,782","\u200b","\u200b","4,796,913","\u200b"],["Acquired - purchased credit deteriorated loans (PCD):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non\u2011owner-occupied real estate (3)","\u200b","\u200b","355,891","\u200b","\u200b","454,776","\u200b"],["Consumer real estate (2)","\u200b","","168,737","\u200b","","197,162","\u200b"],["Commercial owner-occupied real estate","\u200b","","266,288","\u200b","","349,755","\u200b"],["Commercial and industrial","\u200b","","21,451","\u200b","","39,951","\u200b"],["Other income producing property","\u200b","","24,013","\u200b","","35,358","\u200b"],["Consumer","\u200b","","25,775","\u200b","","31,811","\u200b"],["Total acquired \u2011 purchased credit deteriorated loans (PCD)","\u200b","\u200b","862,155","\u200b","\u200b","1,108,813","\u200b"],["Total acquired loans","\u200b","\u200b","4,497,937","\u200b","\u200b","5,905,726","\u200b"],["Non-acquired loans:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non\u2011owner-occupied real estate (4)","\u200b","\u200b","9,856,716","\u200b","\u200b","9,173,563","\u200b"],["Consumer real estate (2)","\u200b","","7,927,024","\u200b","","7,071,825","\u200b"],["Commercial owner-occupied real estate","\u200b","","4,537,328","\u200b","","4,032,377","\u200b"],["Commercial and industrial","\u200b","","5,621,542","\u200b","","4,601,004","\u200b"],["Other income producing property","\u200b","","472,343","\u200b","","472,615","\u200b"],["Consumer","\u200b","","979,945","\u200b","","1,123,909","\u200b"],["Other loans","\u200b","","10,092","\u200b","","7,470","\u200b"],["Total non\u2011acquired loans","\u200b","\u200b","29,404,990","\u200b","\u200b","26,482,763","\u200b"],["Total loans (net of unearned income)","\u200b","$","33,902,927","\u200b","$","32,388,489","\u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","Includes $37.5 million and $135.8 million of construction and land development loans at December 31, 2024 and 2023, respectively."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(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."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(3)","Includes $5.9 million and $9.5 million of construction and land development loans at December 31, 2024 and 2023, respectively."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(4)","Includes $2.1 billion and $2.8 billion of construction and land development loans at December 31, 2024 and 2023, respectively."]] [[/GREPCENT_TABLE]] 83 Table of Contents The following highlights of our loan portfolio as of December 31, 2024 compared to December 31, 2023: [[GREPCENT_TABLE]] [["","\u25cf","Non-acquired loans were $29.4 billion, or 86.7% of total loans at December 31, 2024. This compares to non-acquired loans of $26.5 billion, or 81.8% at December 31, 2023. The increase in non-acquired loans of $2.9 billion was due to organic growth and renewals of acquired loans that were moved to the non-acquired loan portfolio. Acquired loans were $4.5 billion, or 13.3% of total loans at December 31, 2024. This compares to acquired loans of $5.9 billion, or 18.2%, at December 31, 2023. The $1.4 billion decrease in acquired loans was due to principal payments, charge offs, foreclosures and renewals of acquired loans that were moved to our non-acquired loan portfolio."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Non-acquired loans secured by non-owner occupied and consumer real estate were $17.8 billion and comprised 52.5% of the total loan portfolio at December 31, 2024. This was an increase of $1.5 billion, or 9.5%, over December 31, 2023. At December 31, 2024, acquired loans secured by non-owner occupied and consumer real estate were $2.5 billion and comprised 7.4% of the total loan portfolio. This was a decrease of $743.9 million, or 22.9%, over December 31, 2023. Between both the non-acquired and acquired portfolios, 59.8% of loans were non-owner occupied and consumer real estate loans."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Of the non-acquired real estate loans at December 31, 2024, $9.9 billion, or 29.1% of the loan portfolio were secured by non-owner occupied real estate. Loans secured by consumer real estate were $7.9 billion, or 23.4% of the total loan portfolio at December 31, 2024. This compared to loans secured by non-owner occupied real estate of $9.2 billion, or 28.3%, and loans secured by consumer real estate of $7.1 billion, or 21.8% of the loan portfolio at December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Of the acquired real estate loans, $1.7 billion, or 5.0% of the loan portfolio were secured by non-owner occupied real estate at December 31, 2024. Loans secured by consumer real estate were $787.9 million, or 2.3% of the loan portfolio. This compared to acquired loans secured by non-owner occupied real estate of $2.3 billion, or 7.2%, and loans secured by consumer real estate of $921.6 million, or 2.8% of the loan portfolio at December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Included within loans secured by non-owner occupied real estate noted above are construction and land development loans. Total construction and land development loans were $2.2 billion at December 31, 2024 compared to $2.9 billion at December 31, 2023. Construction and land development loans are more susceptible to a risk of loss during a downturn in the business cycle."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Non-acquired construction and land development loans declined $637.3 million to $2.1 billion in 2024 from $2.8 billion at December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Acquired construction and land development loans declined $101.9 million to $43.4 million in 2024 from $145.3 million at December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Total consumer real estate loans were comprised of $7.1 billion in consumer owner occupied loans and $1.6 billion in home equity line loans at December 31, 2024. This compares to $6.6 billion in consumer owner occupied loans and $1.4 billion in home equity line loans at December 31, 2023. During 2024, the consumer real estate loan portfolio increased by $721.5 million from December 31, 2023 through organic growth."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Non-acquired loans secured by consumer real estate were comprised of $6.6 billion in consumer owner occupied loans and $1.4 billion in home equity loans at December 31, 2024. At December 31, 2023, we had $5.9 billion in consumer owner occupied loans and $1.1 billion in home equity loans in the non-acquired loan portfolio."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Acquired loans secured by consumer real estate are comprised of $574.0 million in consumer owner occupied loans and $213.9 million in home equity loans at December 31, 2024. At December 31, 2023, we had $666.6 million in consumer owner occupied loans and $255.0 million in home equity loans in the acquired loan portfolio."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Non-acquired and acquired commercial owner-occupied real estate loans were $4.5 billion, or 13.4%, and $1.2 billion, or 3.5%, respectively, of the total loan portfolio at December 31, 2024 compared to $4.0 billion, or 12.5%, and $1.5 billion, or 4.5%, respectively, of the loan portfolio at December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Non-acquired commercial owner-occupied real estate loans increased $505.0 million through organic growth and renewals of acquired loans."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Acquired commercial owner-occupied real estate loans decreased $286.2 million due to principal payments, charge offs, foreclosures and renewals of acquired loans that were moved to our non-acquired loan portfolio from December 31, 2023 compared to December 31, 2024."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Non-acquired and acquired commercial and industrial loans were $5.6 billion, or 16.6%, and $601.3 million, or 1.8%, respectively, of the total loan portfolio at December 31, 2024 compared to $4.6 billion, or 14.2%, and $903.5 million, or 2.8%, respectively, of the loan portfolio at December 31, 2023."]] [[/GREPCENT_TABLE]] 84 Table of Contents [[GREPCENT_TABLE]] [["","\u25fe","Non-acquired commercial and industrial loans increased $1.0 billion during 2024 from December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25fe","Acquired commercial and industrial loans decreased $302.2 million from December 31, 2023 compared to December 31, 2024."]] [[/GREPCENT_TABLE]] Total loan interest income was $1.9 billion in 2024, an increase of $204.8 million, or 11.9%, compared to $1.7 billion in 2023. This increase was due to both an increase in the average balance and an increase in the yield on the total loan portfolio in 2024. The overall average balance in the loan portfolio increased $1.7 billion in 2024. The average balance on the non-acquired loan portfolio increased $3.1 billion, offset by a $1.4 billion decline in the acquired loan portfolio. The growth in the non-acquired loan portfolio average balance was due to normal organic growth and renewals of acquired loans. The decline in the acquired loan portfolio was due to paydowns and payoffs, along with renewals of acquired loans that were moved to our non-acquired loan portfolio. The overall yield on the loan portfolio increased by 33 basis points in 2024. This increase was due to a 43-basis point increase in the yield on the non-acquired portfolio and a 10-basis point increase in the yield on the acquired portfolio. The yield on the non-acquired loan portfolio increased from 5.29% in 2023 to 5.72% in 2024 and the yield on the acquired loan portfolio increased from 6.10% in 2023 to 6.20% in 2024. The increase in the yields on the non-acquired loan portfolio and the acquired loan portfolio was due to the repricing of loans in a higher interest rate environment for most of 2024 reflecting the rise in interest rates starting in March 2022 thru August 2023, then remaining unchanged until September 2024 when the rates began to decline. The table below shows the contractual maturity of the non-acquired loan portfolio at December 31, 2024. Table 11—Maturity Distribution of Non-acquired Loans [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","","\u200b","\u200b","","1 Year","","Maturity","","Maturity","\u200b","Over"],["(Dollars in thousands)","\u200b","Total","\u200b","or Less","\u200b","1 to 5 Years","\u200b","5 to 15 Years","\u200b","15 Years"],["Non\u2011owner-occupied real estate","\u200b","$","9,856,716","\u200b","$","1,259,640","\u200b","$","4,930,914","\u200b","$","3,304,198","\u200b","$","361,964","\u200b"],["Consumer real estate","\u200b","","7,927,024","\u200b","","61,675","\u200b","","362,443","\u200b","","1,124,707","\u200b","","6,378,199","\u200b"],["Commercial owner-occupied real estate","\u200b","","4,537,328","\u200b","","267,205","\u200b","","1,689,246","\u200b","","2,427,121","\u200b","","153,756","\u200b"],["Commercial and industrial","\u200b","","5,621,542","\u200b","","1,381,476","\u200b","","2,150,779","\u200b","","1,498,470","\u200b","","590,817","\u200b"],["Other income producing property","\u200b","","472,343","\u200b","","52,914","\u200b","","267,671","\u200b","","78,379","\u200b","","73,379","\u200b"],["Consumer","\u200b","","979,945","\u200b","","98,084","\u200b","","329,554","\u200b","","298,108","\u200b","","254,199","\u200b"],["Other loans","\u200b","","10,092","\u200b","","10,092","\u200b","","\u2014","\u200b","","\u2014","\u200b","","\u2014","\u200b"],["Total non\u2011acquired loans","\u200b","$","29,404,990","\u200b","$","3,131,086","\u200b","$","9,730,607","\u200b","$","8,730,983","\u200b","$","7,812,314","\u200b"]] [[/GREPCENT_TABLE]] Table 12—Non-Acquired Loans Due After One Year - Fixed or Floating [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","","\u200b","\u200b","","\u200b","\u200b","\u200b"],["(Dollars in thousands)","\u200b","Fixed Rate","\u200b","Variable Rate","\u200b"],["Non\u2011owner-occupied real estate","\u200b","$","3,040,876","\u200b","$","5,556,200","\u200b"],["Consumer real estate","\u200b","","3,407,022","\u200b","","4,458,327","\u200b"],["Commercial owner-occupied real estate","\u200b","","2,528,089","\u200b","","1,742,034","\u200b"],["Commercial and industrial","\u200b","","2,970,593","\u200b","","1,269,473","\u200b"],["Other income producing property","\u200b","","278,954","\u200b","","140,475","\u200b"],["Consumer","\u200b","","865,556","\u200b","","16,305","\u200b"],["Total non\u2011acquired loans","\u200b","$","13,091,090","\u200b","$","13,182,814","\u200b"]] [[/GREPCENT_TABLE]] ​ 85 Table of Contents The table below shows the contractual maturity of the acquired non-purchased credit deteriorated loan portfolio at December 31, 2024. Table 13—Maturity Distribution of Acquired Non-purchased Credit Deteriorated Loans [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","","\u200b","\u200b","","1 Year","","Maturity","","Maturity","\u200b","Over"],["(Dollars in thousands)","\u200b","Total","\u200b","or Less","\u200b","1 to 5 Years","\u200b","5 to 15 Years","\u200b","15 Years"],["Non\u2011owner-occupied real estate","\u200b","$","1,355,452","\u200b","$","167,702","\u200b","$","709,405","\u200b","$","455,199","\u200b","$","23,146","\u200b"],["Consumer real estate","\u200b","","619,208","\u200b","","23,412","\u200b","","135,673","\u200b","","126,689","\u200b","","333,434","\u200b"],["Commercial owner-occupied real estate","\u200b","","912,760","\u200b","","76,408","\u200b","","415,231","\u200b","","374,751","\u200b","","46,370","\u200b"],["Commercial and industrial","\u200b","","579,883","\u200b","","32,149","\u200b","","239,342","\u200b","","226,690","\u200b","","81,702","\u200b"],["Other income producing property","\u200b","","111,394","\u200b","","14,453","\u200b","","35,391","\u200b","","41,473","\u200b","","20,077","\u200b"],["Consumer","\u200b","","56,879","\u200b","","3,661","\u200b","","9,945","\u200b","","39,318","\u200b","","3,955","\u200b"],["Other","\u200b","\u200b","206","\u200b","\u200b","206","\u200b","\u200b","\u2014","\u200b","","\u2014","\u200b","\u200b","\u2014","\u200b"],["Total acquired - non-purchased credit deteriorated loans","\u200b","$","3,635,782","\u200b","$","317,991","\u200b","$","1,544,987","\u200b","$","1,264,120","\u200b","$","508,684","\u200b"]] [[/GREPCENT_TABLE]] Table 14—Acquired Non-PCD Loans Due After One Year - Fixed or Floating [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","","\u200b","\u200b","","\u200b","\u200b","\u200b"],["(Dollars in thousands)","\u200b","Fixed Rate","\u200b","Variable Rate","\u200b"],["Non\u2011owner-occupied real estate","\u200b","$","316,630","\u200b","$","871,120","\u200b"],["Consumer real estate","\u200b","","192,662","\u200b","","403,134","\u200b"],["Commercial owner-occupied real estate","\u200b","","331,131","\u200b","","505,221","\u200b"],["Commercial and industrial","\u200b","","357,399","\u200b","","190,335","\u200b"],["Other income producing property","\u200b","","26,276","\u200b","","70,665","\u200b"],["Consumer","\u200b","","51,370","\u200b","","1,848","\u200b"],["Total acquired - non-purchased credit deteriorated loans","\u200b","$","1,275,468","\u200b","$","2,042,323","\u200b"]] [[/GREPCENT_TABLE]] The table below shows the contractual maturity of the acquired purchased credit deteriorated loan portfolio at December 31, 2024. Table 15—Maturity Distribution of Acquired Purchased Credit Deteriorated Loans [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","","\u200b","\u200b","","1 Year","","Maturity","","Maturity","\u200b","Over"],["(Dollars in thousands)","\u200b","Total","\u200b","or Less","\u200b","1 to 5 Years","\u200b","5 to 15 Years","\u200b","15 Years"],["Non\u2011owner-occupied real estate","\u200b","$","355,891","\u200b","$","34,578","\u200b","$","173,463","\u200b","$","126,462","\u200b","$","21,388","\u200b"],["Consumer real estate","\u200b","","168,737","\u200b","","7,175","\u200b","","25,525","\u200b","","36,550","\u200b","","99,487","\u200b"],["Commercial owner-occupied real estate","\u200b","","266,288","\u200b","","36,777","\u200b","","114,068","\u200b","","104,865","\u200b","","10,578","\u200b"],["Commercial and industrial","\u200b","","21,451","\u200b","","3,314","\u200b","","10,947","\u200b","","5,280","\u200b","","1,910","\u200b"],["Other income producing property","\u200b","","24,013","\u200b","","1,805","\u200b","","4,471","\u200b","","12,310","\u200b","","5,427","\u200b"],["Consumer","\u200b","","25,775","\u200b","","450","\u200b","","5,463","\u200b","","19,681","\u200b","","181","\u200b"],["Total acquired \u2011 purchased credit deteriorated loans (PCD)","\u200b","$","862,155","\u200b","$","84,099","\u200b","$","333,937","\u200b","$","305,148","\u200b","$","138,971","\u200b"]] [[/GREPCENT_TABLE]] Table 16—Acquired PCD Loans Due After One Year - Fixed or Floating [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","","\u200b","\u200b","","\u200b","\u200b","\u200b"],["(Dollars in thousands)","\u200b","Fixed Rate","\u200b","Variable Rate","\u200b"],["Non\u2011owner-occupied real estate","\u200b","$","53,631","\u200b","$","267,682","\u200b"],["Consumer real estate","\u200b","","75,801","\u200b","","85,761","\u200b"],["Commercial owner-occupied real estate","\u200b","","76,553","\u200b","","152,958","\u200b"],["Commercial and industrial","\u200b","","11,880","\u200b","","6,257","\u200b"],["Other income producing property","\u200b","","4,849","\u200b","","17,359","\u200b"],["Consumer","\u200b","","25,311","\u200b","","14","\u200b"],["Total acquired \u2011 purchased credit deteriorated loans (PCD)","\u200b","$","248,025","\u200b","$","530,031","\u200b"]] [[/GREPCENT_TABLE]] ​ ​ 86 Table of Contents Total commercial non-owner-occupied loans of $9.4 billion, approximately 27.7% of the total loans held for investment, was the largest category of the loan portfolio as of December 31, 2024. As of December 31, 2024, approximately 95% of the commercial non-owner-occupied portfolio was located within the Company’s footprint. Of the $9.4 billion, approximately $1.2 billion, or 4% of the total loans, represented our office segment. Approximately 95% of the office segment was located in the Company’s footprint and approximately 9% was located within the metropolitan or central business district. The weighted average Debt Service Coverage (“DSC”) was 1.62x and the loan-to-value was 57%. For additional discussion around classified commercial non-owner-occupied loans, refer to the “Nonperforming Assets” section in this MD&A. The following table presents the top eight loan segments of the commercial non-owner-occupied loan category (excluding loans held for sale). The loan segments in the table below are determined by the call code, used for the Bank’s regulatory reporting requirements issued by the FDIC for the FFIEC 041, also referred to as the Call Report. Table 17—Commercial Non-Owner-Occupied Loans [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Commercial Non-Owner-Occupied Loans","\u200b","Net Book","\u200b","Average","\u200b","Weighted-","\u200b","Weighted-Average","\u200b","\u200b","% of","\u200b","\u200b","% of Substandard &","\u200b","\u200b","% of","\u200b","\u200b"],["(Dollars in thousands)","\u200b","Balance (1)","","Loan Size","\u200b","Average DSC (2)","\u200b","Loan-to-Value (3)","\u200b","\u200b","Non-Accrual","\u200b","\u200b","Accruing","\u200b","\u200b","Special Mention","\u200b","\u200b"],["December 31, 2024","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Loan Type:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Retail","\u200b","$","2,105,708","\u200b","$","1,709","\u200b","1.77","\u200b","52","%","\u200b","0.1","%","\u200b","0.45","%","\u200b","0.30","%","\u200b"],["Multifamily","\u200b","\u200b","1,582,996","\u200b","\u200b","3,541","\u200b","1.47","\u200b","51","%","\u200b","\u2014","%","\u200b","8.87","%","\u200b","11.12","%","\u200b"],["Warehouse/Industrial","\u200b","\u200b","1,291,637","\u200b","\u200b","1,794","\u200b","1.67","\u200b","57","%","\u200b","\u2014","%","\u200b","4.43","%","\u200b","2.57","%","\u200b"],["Office","\u200b","\u200b","1,194,571","\u200b","\u200b","1,379","\u200b","1.62","\u200b","57","%","\u200b","1.22","%","\u200b","13.25","%","\u200b","1.53","%","\u200b"],["Hotel","\u200b","\u200b","998,654","\u200b","\u200b","4,801","\u200b","2.06","\u200b","55","%","\u200b","0.1","%","\u200b","6.31","%","\u200b","3.02","%","\u200b"],["Other","\u200b","\u200b","564,354","\u200b","\u200b","1,357","\u200b","1.56","\u200b","56","%","\u200b","\u2014","%","\u200b","10.63","%","\u200b","3.80","%","\u200b"],["Medical","\u200b","\u200b","551,440","\u200b","\u200b","1,734","\u200b","1.71","\u200b","57","%","\u200b","\u2014","%","\u200b","1.35","%","\u200b","0.33","%","\u200b"],["Self Storage","\u200b","\u200b","456,314","\u200b","\u200b","3,651","\u200b","1.48","\u200b","54","%","\u200b","\u2014","%","\u200b","11.8","%","\u200b","3.68","%","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","Net book balance in each segment that represents 2% or more of commercial non-owner-occupied portfolio as of December 31, 2024."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(2)","Weighted average DSC information from the Company\u2019s December 31, 2023, stress test using commitment balances, totaling approximately $6.1 billion. The Weighted average DSC information excludes loans below $1.5 million, unless part of a larger relationship."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(3)","Weighted-average Loan-to-Value as of December 31, 2024."]] [[/GREPCENT_TABLE]] ​ 87 Table of Contents Nonperforming Assets (“NPAs”) The level of risk elements in the loan portfolio, OREO and other nonperforming assets for the past two years is shown below: Table 18—Nonperforming Assets [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","December 31,"],["(Dollars in thousands)","\u200b","","2024","","2023"],["Non-acquired:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Nonaccrual loans","\u200b","\u200b","$","134,867","\u200b","$","110,467","\u200b"],["Accruing loans past due 90 days or more","\u200b","\u200b","","3,293","\u200b","","11,305","\u200b"],["Modified loans to a borrower experiencing financial difficulty \u2013 nonaccrual","\u200b","\u200b","","7,115","\u200b","","\u2014","\u200b"],["Total non-acquired nonperforming loans","\u200b","\u200b","","145,275","\u200b","","121,772","\u200b"],["Other real estate owned (\u201cOREO\u201d) (1) (2)","\u200b","\u200b","","648","\u200b","","228","\u200b"],["Other nonperforming assets (3)","\u200b","\u200b","","534","\u200b","","483","\u200b"],["Total OREO and other nonperforming assets excluding acquired assets","\u200b","\u200b","","1,182","\u200b","","711","\u200b"],["Total nonperforming assets excluding acquired assets","\u200b","\u200b","","146,457","\u200b","","122,483","\u200b"],["Acquired:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Nonaccrual loans (4)","\u200b","\u200b","","58,923","\u200b","","58,916","\u200b"],["Accruing loans past due 90 days or more","\u200b","\u200b","","\u2014","\u200b","","1,174","\u200b"],["Modified loans to a borrower experiencing financial difficulty \u2013 nonaccrual","\u200b","\u200b","\u200b","6,391","\u200b","\u200b","839","\u200b"],["Total acquired nonperforming loans","\u200b","\u200b","","65,314","\u200b","","60,929","\u200b"],["Acquired OREO and other nonperforming assets:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Acquired OREO (1) (5)","\u200b","\u200b","","1,505","\u200b","","609","\u200b"],["Other acquired nonperforming assets (3)","\u200b","\u200b","","78","\u200b","","103","\u200b"],["Total acquired OREO and other nonperforming assets","\u200b","\u200b","","1,583","\u200b","","712","\u200b"],["Total acquired nonperforming assets","\u200b","\u200b","","66,897","\u200b","","61,641","\u200b"],["Total nonperforming assets","\u200b","\u200b","$","213,354","\u200b","$","184,124","\u200b"],["Excluding acquired assets:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total nonperforming assets as a percentage of total loans and repossessed assets (6)","\u200b","\u200b","","0.50","%","","0.46","%"],["Total nonperforming assets as a percentage of total assets (7)","\u200b","\u200b","","0.32","%","","0.27","%"],["Nonperforming loans as a percentage of period end loans (6)","\u200b","\u200b","","0.49","%","","0.46","%"],["Including acquired assets:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total nonperforming assets as a percentage of total loans and repossessed assets (6)","\u200b","\u200b","","0.63","%","","0.57","%"],["Total nonperforming assets as a percentage of total assets (7)","\u200b","\u200b","","0.46","%","","0.41","%"],["Nonperforming loans as a percentage of period end loans (6)","\u200b","\u200b","","0.62","%","","0.56","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(1)","Consists of real estate acquired as a result of foreclosure. Excludes certain property no longer intended for bank use."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(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."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(3)","Consists of non-real estate foreclosed assets, such as repossessed vehicles."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(4)","Includes nonaccrual loans that are purchase credit deteriorated (PCD loans)."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(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."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(6)","Loan data excludes mortgage loans held for sale."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","(7)","For purposes of this calculation, total assets include all assets (both acquired and non-acquired)."]] [[/GREPCENT_TABLE]] Total non-acquired nonperforming loans were $145.3 million, or 0.49% of total non-acquired loans, an increase of approximately $23.5 million, or 19.3%, from December 31, 2023. The increase in nonperforming loans was driven primarily by an increase in consumer nonaccrual loans of $21.1 million, an increase in commercial nonaccrual loans of $3.3 million and an increase in modified loans with borrowers with financial difficulties on nonaccrual of $7.1 million, offset by a decrease in accruing loans past due 90 days or more of $8.0 million. The increase in consumer nonaccrual loans year over year was primarily in first mortgage 1-4 family owner occupied loans. Acquired nonperforming loans were $65.3 million, or 1.45% of total acquired loans, an increase of $4.4, or 7.2% from December 31, 2023. The increase in acquired nonperforming loans was mainly driven by an increase in restructured loans of $5.6 million, offset by a decrease in accruing loans past due 90 days or more of $1.2 million. ​ 88 Table of Contents The top ten nonaccrual loans at December 31, 2024 totaled $69.3 million and consisted of three loans located in South Carolina, three in North Carolina, three in Georgia, and one in Florida. These loans comprise 33.4% of total nonaccrual loans at December 31, 2024, with around 34% being real estate collateral dependent and the other 66% being non real estate. We currently hold a specific reserve against four of these ten loans, totaling $18.5 million. The remaining six loans do not carry a specific reserve due to carrying balances being below current collateral values. As of December 31, 2024, the Bank had a total of $36.1 million loans to borrowers experiencing financial difficulty. Of the $36.1 million, $29.3 million loans were current and $6.8 million loans were 30 to 89 days past due. Allowance for Credit Losses (“ACL”) on Loans and Certain Off-Balance-Sheet Credit Exposure 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. 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 the unemployment rate, gross domestic product, the path of interest rates, monetary and fiscal policy, inflation, the residential and commercial real estate markets, and global events like the Russian/Ukraine conflict and unrest in middle east, 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, management considers the alignment of forecast assumptions and weightings in relation to its economic outlook on a quarterly basis, 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 average loss rate within four quarters using a straight-line approach. The Company generally uses an eight-quarter forecast and a four-quarter reversion period. In spite of the rapid interest rate hikes experienced cycle-to-date, 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. As of December 31, 2024, management selected a baseline weighting of 40%, a 30% weighting for an upside scenario and a 30% weighting for the more severe scenario. The scenario weightings were unchanged from the prior quarter. Scenario weightings are generally expected to remain stable but are reviewed on a quarterly basis. The scenario weightings reflect continued recognition of downside risks in the economic forecast from persistent levels of inflation and high interest rates. While employment figures still show resilience and actual loan losses remain at low levels, continued projected borrower weakness related to high interest rates, uncertainty, and lingering chances of an economic downturn continue to moderate optimism in the path of the forecast and kept expected losses mostly flat. As a result, the Company recorded provision for credit losses of $16.0 million and net charge-offs of $18.2 million during 2024. 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 Note 1—Summary of Significant Accounting Policies in this Report on Form 10-K for further detailed descriptions of our estimation process and methodology related to the ACL on certain off-balance-sheet credit exposures. As of December 31, 2024 and 2023, the liabilities recorded for expected credit losses on unfunded commitments were $45.3 million and $56.3 million, respectively. The current adjustment to the ACL for unfunded commitments is recognized through the Provision for Credit Losses in the Consolidated Statements of Income. ​ ​ 89 Table of Contents As of December 31, 2024, the balance of the ACL was $465.3 million, or 1.37%, of total loans. For the year ended December 31, 2024, the ACL increased $8.7 million from the balance of $456.6 million at December 31, 2023. The increase in ACL of $8.7 million included $27.0 million of provision for credit losses, and $18.2 million in net charge-offs. For both the three and twelve months ended December 31, 2024, the Company recorded provision for credit losses due to loan growth and current forecasts applied to our modeling to adequately capture growing economic recessionary risks. As of December 31, 2023, the balance of the ACL was $456.6 million or 1.41% of total loans. For the year ended December 31, 2023, the ACL increased $100.1 million from the balance of $356.4 million at December 31, 2022. The increase in ACL of $100.1 million included $125.0 million of provision for credit losses, and $24.9 million in net charge-offs. For both the three and twelve months ended December 31, 2023, the Company recorded provision for credit losses due to loan growth and current forecasts applied to our modeling to adequately capture growing economic recessionary risks. At December 31, 2024, the Company had a reserve on unfunded commitments of $45.3 million, which was recorded as a liability on the Consolidated Balance Sheet, compared to $56.3 million at December 31, 2023. During the three and twelve months ended December 31, 2024, the Company recorded an increase in the reserve for unfunded commitments of $3.8 million and a release for $11.0 million, respectively. For the prior comparative period, the Company recorded a release in the reserve for unfunded commitments of $6.0 million and $10.9 million, respectively. The provision for credit losses for unfunded commitments is based on the growth in unfunded loan commitments, production mix, and current forecast scenarios applied to our modeling to adequately capture growing economic recessionary risks. This amount was recorded in Provision (Recovery) for Credit Losses on the Consolidated Statements of Income. 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. Net charge offs to total average loans during the year ended December 31, 2024 were 0.06%, compared to 0.08% during 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. While non-owner occupied CRE is the largest segment of our loan portfolio, the risk profile of the non-owner occupied CRE portfolio remains low and stable. We have a granular loan portfolio where the average loan size of the non-owner occupied CRE portfolio is less than $5 million. 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 $2 million as of December 31, 2024. Over 95% of these office spaces are located in the Company’s southeast footprint, of which approximately 83% mature in 2026 or later. Table 19—Allocation of the Allowance by Segment [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","December 31, 2024","\u200b","December 31, 2023","\u200b"],["(Dollars in thousands)","","","Amount","","% *","","Amount","","% *"],["Residential Mortgage Senior","\u200b","\u200b","$","42,687","","22.4","%","$","78,052","","21.8","%"],["Residential Mortgage Junior","\u200b","\u200b","","432","","0.1","%","","745","","0.0","%"],["Revolving Mortgage","\u200b","\u200b","","14,845","","4.8","%","","10,942","","4.6","%"],["Residential Construction","\u200b","\u200b","","9,298","","1.1","%","","5,024","","2.1","%"],["Other Construction and Development","\u200b","\u200b","","65,553","","5.2","%","","65,772","","6.8","%"],["Consumer","\u200b","\u200b","","17,484","","3.1","%","","23,331","","3.8","%"],["Multifamily","\u200b","\u200b","\u200b","22,279","\u200b","4.7","%","\u200b","13,766","\u200b","2.7","%"],["Municipal","\u200b","\u200b","\u200b","1,197","\u200b","2.3","%","\u200b","900","\u200b","2.3","%"],["Owner-Occupied Commercial Real Estate","\u200b","\u200b","\u200b","78,753","\u200b","16.9","%","\u200b","71,580","\u200b","16.9","%"],["Non-Owner-Occupied Commercial Real Estate","\u200b","\u200b","\u200b","111,538","\u200b","23.1","%","\u200b","137,055","\u200b","23.8","%"],["Commercial and Industrial","\u200b","\u200b","","101,214","","16.3","%","","49,406","","15.1","%"],["Total","\u200b","","$","465,280","","100.0","%","$","456,573","","100.0","%"]] [[/GREPCENT_TABLE]] *     Loan balance in each category expressed as a percentage of total loans. ​ 90 Table of Contents The following table presents a summary of net charge off ratios by loan segment, for the year ended December 31, 2024 and 2023: Table 20—Disaggregated Net Recovery (Charge Off) Ratio by Segment [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended"],["\u200b","\u200b","December 31, 2024","\u200b","December 31, 2023"],["(Dollars in thousands)","\u200b","Net Recovery (Charge Off)","\u200b","Average Balance","\u200b","Net Recovery (Charge Off) Ratio","","Net Recovery (Charge Off)","\u200b","Average Balance","\u200b","Net Recovery (Charge Off) Ratio"],["Residential Mortgage Senior","\u200b","$","(379)","\u200b","$","7,369,909","\u200b","(0.01)","%","\u200b","$","735","\u200b","$","6,399,401","\u200b","0.01","%"],["Residential Mortgage Junior","\u200b","","222","\u200b","","18,642","\u200b","1.19","%","\u200b","","108","\u200b","","12,142","\u200b","0.89","%"],["Revolving Mortgage","\u200b","","949","\u200b","","1,546,347","\u200b","0.06","%","\u200b","","1,073","\u200b","","1,422,717","\u200b","0.08","%"],["Residential Construction","\u200b","","(263)","\u200b","","517,782","\u200b","(0.05)","%","\u200b","","128","\u200b","","823,952","\u200b","0.02","%"],["Other Construction and Development","\u200b","","(868)","\u200b","","1,970,675","\u200b","(0.04)","%","\u200b","","462","\u200b","","1,981,715","\u200b","0.02","%"],["Consumer","\u200b","","(5,664)","\u200b","","1,139,980","\u200b","(0.50)","%","\u200b","","(9,795)","\u200b","","1,253,419","\u200b","(0.78)","%"],["Multifamily","\u200b","\u200b","66","\u200b","\u200b","1,234,870","\u200b","0.01","%","\u200b","\u200b","41","\u200b","\u200b","857,100","\u200b","0.00","%"],["Municipal","\u200b","\u200b","\u2014","\u200b","\u200b","761,195","\u200b","\u2014","%","\u200b","\u200b","\u2014","\u200b","\u200b","733,406","\u200b","\u2014","%"],["Owner-Occupied Commercial Real Estate","\u200b","\u200b","(380)","\u200b","\u200b","5,554,828","\u200b","(0.01)","%","\u200b","\u200b","812","\u200b","\u200b","5,531,908","\u200b","0.01","%"],["Non-Owner-Occupied Commercial Real Estate","\u200b","\u200b","1,184","\u200b","\u200b","7,889,448","\u200b","0.02","%","\u200b","\u200b","658","\u200b","\u200b","7,608,018","\u200b","0.01","%"],["Commercial and Industrial","\u200b","","(13,111)","\u200b","","5,128,543","\u200b","(0.26)","%","\u200b","","(19,088)","\u200b","","4,779,513","\u200b","(0.40)","%"],["Total","\u200b","$","(18,244)","\u200b","$","33,132,219","\u200b","(0.06)","%","","$","(24,866)","\u200b","$","31,403,291","\u200b","(0.08)","%"]] [[/GREPCENT_TABLE]] The following table presents a summary of the changes in the ACL, for the years ended December 31, 2024, 2023 and 2022: Table 21—Summary of the Changes in ACL [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended December 31,"],["\u200b","\u200b","2024","\u200b","2023","\u200b","2022"],["\u200b","\u200b","Non-PCD","\u200b","PCD","\u200b","\u200b","\u200b","Non-PCD","\u200b","PCD","\u200b","\u200b","\u200b","Non-PCD","\u200b","PCD","\u200b","\u200b"],["(Dollars in thousands)","\u200b","Loans","\u200b","Loans","\u200b","Total","\u200b","Loans","\u200b","Loans","\u200b","Total","\u200b","Loans","\u200b","Loans","\u200b","Total"],["Allowance for credit losses at January 1","","$","423,876","\u200b","$","32,697","\u200b","$","456,573","\u200b","$","309,606","\u200b","$","46,838","\u200b","$","356,444","\u200b","$","225,227","\u200b","$","76,580","\u200b","$","301,807","\u200b"],["ACL - PCD loans for ACBI merger","","","\u2014","\u200b","\u200b","\u2014","\u200b","","\u2014","\u200b","","\u2014","\u200b","\u200b","\u2014","\u200b","","\u2014","\u200b","","\u2014","\u200b","\u200b","13,758","\u200b","","13,758","\u200b"],["Loans charged-off","","","(30,347)","\u200b","\u200b","(4,723)","\u200b","","(35,070)","\u200b","","(39,077)","\u200b","\u200b","(1,571)","\u200b","","(40,648)","\u200b","","(17,332)","\u200b","\u200b","(6,114)","\u200b","","(23,446)","\u200b"],["Recoveries of loans previously charged off","","","12,433","\u200b","\u200b","4,393","\u200b","","16,826","\u200b","","9,987","\u200b","\u200b","5,795","\u200b","","15,782","\u200b","","12,140","\u200b","\u200b","7,033","\u200b","","19,173","\u200b"],["Net (charge-offs) recoveries","","","(17,914)","\u200b","\u200b","(330)","\u200b","","(18,244)","\u200b","","(29,090)","\u200b","\u200b","4,224","\u200b","","(24,866)","\u200b","","(5,192)","\u200b","\u200b","919","\u200b","","(4,273)","\u200b"],["Initial provision for credit losses - ACBI","","","\u2014","\u200b","\u200b","\u2014","\u200b","","\u2014","\u200b","","\u2014","\u200b","\u200b","\u2014","\u200b","","\u2014","\u200b","","13,697","\u200b","\u200b","\u2014","\u200b","","13,697","\u200b"],["Provision (recovery) for credit losses","\u200b","","38,997","\u200b","\u200b","(12,046)","\u200b","","26,951","\u200b","","143,360","\u200b","\u200b","(18,365)","\u200b","","124,995","\u200b","","75,874","\u200b","\u200b","(44,419)","\u200b","","31,455","\u200b"],["Balance at end of period","","$","444,959","\u200b","$","20,321","\u200b","$","465,280","\u200b","$","423,876","\u200b","$","32,697","\u200b","$","456,573","\u200b","$","309,606","\u200b","$","46,838","\u200b","$","356,444","\u200b"],["\u200b","","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Total loans, net of unearned income:","","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["At period end","\u200b","$","33,902,927","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","32,388,489","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","$","30,177,862","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Average","\u200b","","33,132,219","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","31,403,291","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","27,456,134","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net charge-offs as a percentage of average loans (annualized)","\u200b","","0.06","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","0.08","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","0.02","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Allowance for credit losses as a percentage of period end loans","\u200b","","1.37","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","1.41","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","1.18","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Allowance for credit losses as a percentage of period end non-performing loans (\u201cNPLs\u201d)","\u200b","","220.94","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","249.90","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","328.29","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"]] [[/GREPCENT_TABLE]] *      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. Customer deposits are categorized as either noninterest-bearing deposits or interest-bearing deposits. Noninterest-bearing deposits (or demand deposits) are transaction accounts that provide us with “interest-free” sources of funds. Interest-bearing deposits include savings deposit, interest-bearing transaction accounts, certificates of deposits, and other time deposits. Interest-bearing transaction accounts include NOW, HSA, IOLTA, and Market Rate checking accounts. The Company uses brokered time deposits as a secondary source of deposits to supplement its primary source through organic growth of deposits from our customers. During 2024, overall deposits increased $1.0 million, or 2.7%, to $38.1 billion from 2023. The increase was driven by growth in money market accounts of $1.5 billion and interest-bearing checking deposits of $253.5 million. These increases were partially offset by declines in noninterest-bearing checking deposits of $457.2 million, savings deposits of $218.0 million, and time deposits of $84.2 million, including a decrease in brokered deposits of $104.3 million. During 2024, there was an increase in the balance of higher yielding money market as customers shifted funds from noninterest-bearing deposits and savings accounts to gain flexibility and benefit from higher yields in a comparatively higher rate environment. 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. In the fourth quarter of 2024, the Company began to reduce its interest rates on deposit products as the Federal Reserve Bank began reducing its federal funds target rate in September 2024. The federal funds target rate declined 100 basis points from September 2024 to December 2024. The Company also saw a reduction in its brokered deposits from $1.1 billion at September 30, 2024 to $614.5 million at December 31, 2024. The Company saw growth in its in-market deposits in the fourth quarter of 2024, and therefore allowed maturing brokered time deposits to run off. The following table presents total deposits for the two years at December 31: Table 22—Total Deposits [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,"],["(Dollars in thousands)","","2024","","2023"],["Noninterest-bearing deposits","\u200b","$","10,192,116","\u200b","$","10,649,274","\u200b"],["Savings deposits","\u200b","","2,414,172","\u200b","","2,632,212","\u200b"],["Interest\u2011bearing demand deposits","\u200b","","21,288,856","\u200b","","19,517,470","\u200b"],["Total savings and interest\u2011bearing demand deposits","\u200b","","23,703,028","\u200b","","22,149,682","\u200b"],["Certificates of deposit","\u200b","","4,161,095","\u200b","","4,245,382","\u200b"],["Other time deposits","\u200b","","4,627","\u200b","","4,571","\u200b"],["Total time deposits","\u200b","","4,165,722","\u200b","","4,249,953","\u200b"],["Total deposits","\u200b","$","38,060,866","\u200b","$","37,048,909","\u200b"]] [[/GREPCENT_TABLE]] The following are key highlights regarding overall changes in total deposits: [[GREPCENT_TABLE]] [["","\u25cf","Total deposits increased $1.0 billion, or 2.7%, for the year ended December 31, 2024, compared to 2023."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","o","Noninterest-bearing deposits (demand deposits) decreased by $457.2 million, or 4.3%, for the year ended December 31, 2024, when compared with December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Money market (Market Rate Checking) and other interest-bearing demand deposits increased $1.8 billion, or 9.1%, for the year ended December 31, 2024"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Savings deposits decreased $218.0 million, or 8.3%, when compared with December 31, 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","At December 31, 2024, and 2023, core deposits (total deposits excluding time deposits) represented 89% of total deposits."]] [[/GREPCENT_TABLE]] The following are key highlights regarding overall growth in average total deposits: [[GREPCENT_TABLE]] [["","\u25cf","Total deposits averaged $37.4 billion in 2024, an increase of $771.3 million, or 2.1%, from 2023."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","o","Average interest-bearing deposits increased by $2.0 billion, or 8.2%, to $26.9 billion in 2024 compared to 2023. The increase in average interest-bearing deposits was due an increase in money market and other interest-bearing demand deposits of $2.1 billion, or 12.0% in 2024."]] [[/GREPCENT_TABLE]] ​ 92 Table of Contents [[GREPCENT_TABLE]] [["","o","Average noninterest-bearing demand deposits decreased by $1.3 billion, or 10.7%, to $10.5 billion in 2024 compared to 2023. Customers moved funds from noninterest-bearing demand deposits to money market and interest-bearing demand deposits with the higher rate environment in 2023 and a majority of 2024."]] [[/GREPCENT_TABLE]] The following table provides a maturity distribution of certificates of deposit of $250,000 or more for the next twelve months as of December 31: Table 23—Maturity Distribution of Certificates of Deposits of $250 Thousand or More [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,","\u200b","December 31,","\u200b","\u200b","\u200b"],["(Dollars in thousands)","","2024","","2023","","% Change"],["Within three months","\u200b","$","707,894","\u200b","$","549,888","","28.7","%"],["After three through six months","\u200b","","243,784","\u200b","","166,344","","46.6","%"],["After six through twelve months","\u200b","","118,763","\u200b","","165,126","","(28.1)","%"],["After twelve months","\u200b","","23,234","\u200b","","45,855","","(49.3)","%"],["\u200b","\u200b","$","1,093,675","\u200b","$","927,213","","18.0","%"]] [[/GREPCENT_TABLE]] At December 31, 2024 and 2023, the Company estimates that it has approximately $14.7 billion and $14.2 billion, respectively, in uninsured deposits. The amounts above are estimates and are based on the same methodologies and assumptions used for the Bank’s regulatory reporting requirements by the FDIC for the Call Report. The following table provides a maturity distribution of uninsured time deposits for the next twelve months as of December 31, 2024 and 2023: Table 24—Maturity Distribution of Uninsured Time Deposits [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,","\u200b","\u200b"],["(Dollars in thousands)","","2024","","2023","","% Change"],["Within three months","\u200b","$","343,644","\u200b","$","285,760","","20.3","%"],["After three through six months","\u200b","","117,784","\u200b","","77,094","","52.8","%"],["After six through twelve months","\u200b","","75,513","\u200b","","84,876","","(11.0)","%"],["After twelve months","\u200b","","13,984","\u200b","","29,855","","(53.2)","%"],["\u200b","\u200b","$","550,925","\u200b","$","477,585","","15.4","%"]] [[/GREPCENT_TABLE]] Short-Term Borrowed Funds Our short-term borrowed funds consist of federal funds purchased and securities sold under repurchase agreements, FRB borrowings on a secured line of credit, short-term FHLB Advances and the U.S. 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. 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. Bank line of credit at each year-end, the average amount outstanding during each period and the weighted average interest rates on year-end and average balances. Short-term FHLB advances has a maturity of less than one year and the FRB borrowings and U.S. Bank line of credit has a daily maturity. 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. 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. As of December 31, 2024, shareholders’ equity was $5.9 billion, a decrease of $357.3 million, or 6.5%, compared to the balance at December 31, 2023. The change from year-end 2023 was mainly attributable to net income of $534.8 million and the recognition of equity based compensation of $28.0 million. These increases were offset by dividends paid on common shares of $161.6 million, a decrease in the market value of securities available for sale, net of tax, of $24.3 million recorded through AOCI, cumulative adjustment to retained earnings pursuant to the adoptions of ASU 2023-02 of $10.2 million and common stock repurchased under our stock repurchase plan and equity plans of $16.8 million. ​ The following shows the changes in shareholders’ equity during 2024: Table 25—Changes in Shareholders’ Equity [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b"],["(Dollars in thousands)","\u200b","\u200b","\u200b"],["Total shareholders' equity at December 31, 2023","","$","5,533,098"],["Net income","\u200b","\u200b","534,783"],["Cumulative adjustment pursuant to adoption of ASU 2023-02","\u200b","\u200b","(10,246)"],["Dividends paid on common shares ($2.12 per share)","\u200b","\u200b","(161,597)"],["Dividends paid on restricted stock units","\u200b","\u200b","(1,297)"],["Net decrease in market value of securities available for sale, net of deferred taxes","\u200b","\u200b","(24,336)"],["Net decrease in market value of post retirement plan, net of deferred taxes","\u200b","\u200b","(49)"],["Stock options exercised","\u200b","\u200b","5,580"],["Employee stock purchases","\u200b","\u200b","2,959"],["Equity based compensation","\u200b","\u200b","28,000"],["Common stock repurchased pursuant to stock repurchase plan","\u200b","\u200b","(7,985)"],["Common stock repurchased - equity plans","\u200b","\u200b","(8,773)"],["Stock issued in lieu of cash - directors fees","\u200b","\u200b","278"],["Total shareholders' equity at December 31, 2024","\u200b","$","5,890,415"]] [[/GREPCENT_TABLE]] On April 27, 2022, the Company’s Board of Directors approved the 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 Company’s 2021 Stock Repurchase Plan for a total authorization of 4.12 million shares. During 2024, the Company repurchased a total of 100,000 shares at a weighted average price of $79.85 per share pursuant to the 2022 Stock Repurchase Program. As of December 31, 2024, the 2022 Stock Repurchase Plan expired. We are subject to regulations with respect to certain risk-based capital ratios. These risk-based capital ratios measure the relationship of capital to a combination of balance sheet and off-balance sheet risks. The values of both balance sheet and off-balance sheet items are adjusted based on the rules to reflect categorical credit risk. In addition to the risk-based capital ratios, the regulatory agencies have also established a leverage ratio for assessing capital adequacy. The leverage ratio is equal to Tier 1 capital divided by total consolidated on-balance sheet assets (minus amounts deducted from Tier 1 capital). The leverage ratio does not involve assigning risk weights to assets. ​ Specifically, we are required to maintain the following minimum capital ratios: ​ [[GREPCENT_TABLE]] [["","\u25cf","a CET1, risk-based capital ratio of 4.5%;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","a Tier 1 risk-based capital ratio of 6%;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","a total risk-based capital ratio of 8%; and"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","a leverage ratio of 4%."]] [[/GREPCENT_TABLE]] 94 Table of Contents Under the current capital rules, Tier 1 capital includes two components: CET1 capital and additional Tier 1 capital. The highest form of capital, CET1 capital, consists solely of common stock (plus related surplus), retained earnings, accumulated other comprehensive income, otherwise referred to as AOCI, and limited amounts of minority interests that are in the form of common stock. Additional Tier 1 capital is primarily comprised of noncumulative perpetual preferred stock and Tier 1 minority interests. Tier 2 capital generally includes the allowance for loan losses up to 1.25% of risk-weighted assets, qualifying preferred stock, subordinated debt, trust preferred securities and qualifying tier 2 minority interests, less any deductions in Tier 2 instruments of an unconsolidated financial institution. AOCI is presumptively included in CET1 capital and often would operate to reduce this category of capital. When the current capital rules were first implemented, the Bank exercised its one-time opportunity at the end of the first quarter of 2015 for covered banking organizations to opt out of much of this treatment of AOCI, allowing us to retain our pre-existing treatment for AOCI. In order to avoid restrictions on capital distributions or discretionary bonus payments to executives, a banking organization must maintain a “capital conservation buffer” on top of its minimum risk-based capital requirements. This buffer must consist solely of Tier 1 Common Equity, but the buffer applies to all three risk-based measurements (CET1, Tier 1 capital and total capital), resulting in the following effective minimum capital plus capital conservation buffer ratios: (i) a CET1 capital ratio of 7.0%, (ii) a Tier 1 risk-based capital ratio of 8.5%, and (iii) a total risk-based capital ratio of 10.5%. The Bank is also subject to the regulatory framework for prompt corrective action, which identifies five capital categories for insured depository institutions (well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized) and is based on specified thresholds for each of the three risk-based regulatory capital ratios (CET1, Tier 1 capital and total capital) and for the leverage ratio. The federal banking agencies revised their regulatory capital rules to (i) address the implementation of CECL; (ii) provide an optional three-year phase-in period for the adoption date adverse regulatory capital effects that banking organizations are expected to experience upon adopting CECL; and (iii) require the use of CECL in stress tests beginning with the 2020 capital planning and stress testing cycle for certain banking organizations that are subject to stress testing. CECL became effective for us on January 1, 2020 and the Company applied the provisions of the standard using the modified retrospective method as a cumulative-effect adjustment to retained earnings. Related to the implementation of ASU 2016-13, we recorded additional allowance for credit losses for loans of $54.4 million, deferred tax assets of $12.6 million, an additional reserve for unfunded commitments of $6.4 million and an adjustment to retained earnings of $44.8 million. Instead of recognizing the effects on regulatory capital from ASU 2016-13 at adoption, the Company initially elected the option for recognizing the adoption date effects on the Company’s regulatory capital calculations over a three-year phase-in. The three-year phase-in period ended at December 31, 2024. ​ In response to the COVID-19 pandemic in 2020, the federal banking agencies issued a final rule for additional transitional relief to regulatory capital related to the impact of the adoption of CECL. The Company chose the five-year transition method and is deferring the recognition of the effects from the adoption date and the CECL difference for the first two years of application. The modified CECL transitional amount was fixed as of December 31, 2021, and that amount began the three-year phase out in the first quarter of 2022 with the final 25% phased out in 2024. At December 31, 2024 and 2023, approximately $15.3 million and $30.5 million, respectively, was added to Tier 1 capital at the Company and Bank as a result of the modified CECL transition. 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. Table 26—Capital Adequacy Ratios The following table presents our consolidated capital ratios under the applicable capital rules: [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,"],["(In percent)","","2024","","2023","","2022"],["Common equity Tier 1 risk-based capital","\u200b","12.62","%","11.75","%","10.96","%"],["Tier 1 risk\u2011based capital","","12.62","%","11.75","%","10.96","%"],["Total risk\u2011based capital","","14.96","%","14.08","%","12.97","%"],["Tier 1 leverage","","10.04","%","9.42","%","8.72","%"]] [[/GREPCENT_TABLE]] ​ ​ 95 Table of Contents 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 all improved compared to December 31, 2023. 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. Total risk-based capital increased 8.5% and 8.2% at both the Bank and Company, respectively, with the increase in equity resulting from net income recognized during the current period, along with a slight increase in the allowance for credit losses and unfunded commitments includable in Tier 2 capital. 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%. Our capital ratios are currently 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 Company pays cash dividends to shareholders from its assets, which are mainly provided by dividends from its banking subsidiary. However, certain restrictions exist regarding the ability of its banking subsidiary to transfer funds to the Company in the form of cash dividends, loans or advances. 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. 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. We used these funds and excess cash to pay our dividend to shareholders of $161.6 million and repurchase shares of our common stock on the open market totaling $8.0 million. The following table provides the amount of dividends and payout ratios for the years ended December 31, 2024, 2023 and 2022: Table 27—Dividends Paid to Common Shareholders [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended December 31,"],["(Dollars in thousands)","","2024","","2023","","2022"],["Dividend payments to common shareholders","\u200b","$","161,597","\u200b","$","154,919","\u200b","$","146,486","\u200b"],["Dividend payout ratios","\u200b","","30.22","%","","31.34","%","","29.54","%"]] [[/GREPCENT_TABLE]] We retain earnings to have capital sufficient to grow our loan and investment portfolios and to support certain acquisitions or other business expansion opportunities. The dividend payout ratio is calculated by dividing dividends paid during the year by net income for the year. 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 an 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 not to exceed 95%), primary liquidity to uninsured deposits including collateralized deposits (policy limit not to exceed 80%) and the ratio of brokered deposits to total deposits (policy limit not to exceed 15%). 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. 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: [[GREPCENT_TABLE]] [["","\u25cf","Emphasizing relationship banking to new and existing customers, where borrowers are encouraged and normally expected to maintain deposit accounts with our Bank;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Pricing deposits, including certificates of deposit, at rate levels that will attract and /or retain balances of deposits that will enhance our Bank\u2019s asset/liability management and net interest margin requirements; and"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","Continually working to identify and introduce new products that will attract customers or enhance our Bank\u2019s appeal as a primary provider of financial services."]] [[/GREPCENT_TABLE]] Our non-acquired loan portfolio increased by approximately $2.9 billion, or approximately 11.0%, compared to the balance at December 31, 2023. The increase in the non-acquired loan portfolio was due to organic growth and renewals of acquired loans that are moved to our non-acquired loan portfolio. The acquired loan portfolio decreased by $1.4 billion, or 23.8%, from the balance at December 31, 2023 from principal paydowns, charge-offs, foreclosures and renewals of acquired loans. For more detail around the changes in the loan portfolio see the Loan Portfolio section in MD&A starting on page 83. Our investment securities portfolio (excluding trading securities) decreased $665.0 million, or approximately 8.9%, compared to the balance at December 31, 2023. The decrease in investment securities during 2024 was a result of maturities, calls, sales and paydowns of investment securities totaling $886.9 million, a decrease in the market value of the available for sale investment securities of $32.0 million and a reduction from the net amortization of premiums of $19.3 million. These decreases were partially offset by purchases of available for sale investment securities totaling $96.8 million and other investment securities of $176.4 million. There were no purchases or sales of held to maturity securities during the year. For the purchases of other investment securities, $140.1 million of the purchases were related to capital stock with the Federal Home Loan Bank of which we sold back $144.9 million during 2024. The activity in the purchases and sales of the Federal Home Loan Bank Capital Stock was due to activity with FHLB borrowings during the year. The Bank pledges a portion of its investment portfolio 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 December 31, 2024, the bank pledged 44.8% of the market value of its available for sale and held to maturity investment portfolios. As of December 31, 2024, the Bank had unpledged securities with a market value of $3.4 billion. These securities included Treasury, Agency, Agency MBS, Municipals and Corporate securities. ​ Total cash and cash equivalents increased $393.2 million in 2024 to $1.4 billion at December 31, 2024, compared to $1.0 billion at December 31, 2023. The increase in cash and cash equivalents was primarily due to the increase in deposits of $1.0 billion along with the decline in investments of $665.0 million resulting from maturities and pay downs of mortgage-backed securities partially offset by a net increase in loans of $1.5 billion during 2024. ​ ​ 97 Table of Contents At December 31, 2024 and December 31, 2023, we had $614.5 million and $719.7 million of traditional, out–of-market brokered time deposits, respectively. At December 31, 2024 and December 31, 2023, we had $2.5 billion and $2.2 billion, respectively, of reciprocal deposits. Total deposits were $38.1 billion at December 31, 2024, an increase of $1.0 billion from $37.0 billion at December 31, 2023. Our deposit growth since December 31, 2023 included an increase in money market accounts of $1.5 billion and an increase in interest-bearing checking accounts of $253.5 million. These increases were offset by declines in demand deposit, savings accounts, and time deposits of $457.2 million, $218.0 million and $84.2 million, respectively. As customers moved funds from noninterest bearing checking, and savings accounts, seeking higher yields in the rising rate environment, the Company’s balance in higher costing interest-bearing checking accounts and in-market money market deposit accounts including reciprocal insured money market accounts, increased. The decrease in time deposits was mostly due to a $105.2 million decline in brokered time deposits as these deposits were replaced by growth in in-market deposits. The Company raised interest rates on most interest-bearing deposit products during 2024 due to competitive pressures to retain deposits. Total short-term borrowings at December 31, 2024 were $514.9 million consisting of $260.2 million in federal funds purchased, $254.7 million in securities sold under agreements to repurchase. The Company paid off all of its FHLB short term borrowings in the fourth quarter of 2024 as this funding source was replaced by growth from in-market deposits. Total long-term borrowings at December 31, 2024 were $391.5 million and consisted of trust preferred securities and subordinated debentures. 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. ​ The Bank has a granular deposit base comprised of over 1.3 million accounts, with an average deposit size of $30,000. The top ten and twenty deposit relationships comprise approximately 2.6% and 3.8% of total deposits. Approximately 27% of total deposits are noninterest-bearing. ​ The Bank supplements its in-market deposits with brokered deposits. While the Bank has a policy limit for brokered time deposits of no more than 15% of total deposits, it has operated well below this policy limit. At December 31, 2024, brokered time deposits totaled $614.5 million, or 1.6% of total deposits. During calendar year 2024, the highest ratio of brokered time deposits to total deposits at a month end was 2.8% or $1.1 billion at September 30, 2024. The Company did not renew its maturing brokered deposits in the fourth quarter of 2024 as these deposits were replaced by growth in in-market deposits. ​ As discussed below, the Bank maintains credit facilities with the Federal Home Loan Bank of Atlanta and the Federal Reserve Bank of Atlanta. The table below compares Primary Funding Sources to uninsured deposits as of December 31, 2024. Table 28—Primary Funding Sources to Uninsured Deposits [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(Dollars in millions)","\u200b","Available Capacity","\u200b","\u200b"],["Federal Home Loan Bank of Atlanta","\u200b","$","6,845","\u200b","\u200b"],["Federal Reserve Bank of Atlanta Discount Window","\u200b","\u200b","1,772","\u200b","\u200b"],["Cash and cash equivalents","\u200b","\u200b","1,392","\u200b","\u200b"],["Fair value of securities that can be pledged","\u200b","\u200b","2,507","\u200b","\u200b"],["Total primary sources","\u200b","$","12,516","\u200b","\u200b"],["Uninsured deposits, excluding collateralized deposits","\u200b","$","11,758","\u200b","\u200b"],["Uninsured and collateralized deposits","\u200b","$","14,686","\u200b","\u200b"],["Coverage ratio, uninsured deposits","\u200b","\u200b","106.4","%","\u200b"],["Coverage ratio, uninsured and collateralized deposits","\u200b","\u200b","85.2","%","\u200b"],["Ratio of uninsured and collateralized deposits to total deposits","\u200b","\u200b","38.5","%","\u200b"]] [[/GREPCENT_TABLE]] ​ ​ 98 Table of Contents 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 December 31, 2024, the Bank had a total FHLB credit facility of $6.8 billion, with no outstanding borrowings in short-term FHLB advances and $3.3 million FHLB letters of credit outstanding at year-end, leaving $6.8 billion in availability on the FHLB credit facility. At December 31, 2024, the Bank had $1.8 billion of credit available at the Federal Reserve Bank’s discount window and federal funds credit lines of $275.0 million with no balances outstanding at year-end. The Bank also has an internal limit on brokered deposits of 15% of total deposits, which would allow capacity of $5.7 billion at December 31, 2024. 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. 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. 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. 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. 99 Table of Contents 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 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. 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 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. 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. ​ ​ 100 Table of Contents 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 December 31, 2024, the Company was operating within it interest rate key risk indicator policy limits. ​ ​ During 2024, the beta assumption applied to total deposits increased to reflect changes in deposit mix. 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 December 31, 2024, the total deposit beta assumption was 35.9%. 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. 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. 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. The percentage changes in EVE due to a 200-basis point increase or decrease in interest rates were 4.7% decrease and 0.8% 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 December 31, 2024. ​ 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. Table 29—Rate Shock Analysis – Net Interest Income [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b"],["Percentage Change in Net Interest Income over One Year","\u200b"],["Up 100 basis points","\u200b","1.1","%","\u200b"],["Down 100 basis points","\u200b","(1.7)","%","\u200b"],["Down 200 basis points","\u200b","(4.3)","%","\u200b"],["Down 300 basis points","\u200b","(8.6)","%","\u200b"],["Down 400 basis points","\u200b","(13.0)","%","\u200b"]] [[/GREPCENT_TABLE]] Asset Credit Risk and Concentrations The quality of our interest-earning assets is maintained through our management of certain concentrations of credit risk. We review each individual earning asset including investment securities and loans for credit risk. To facilitate this review, we have established credit and investment policies that include credit limits, documentation, periodic examination, and follow-up. 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. 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 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. 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 $1.2 billion at December 31, 2024. Based on this criteria, we had seven such credit concentrations at December 31, 2024, including loans secured by 1st mortgage 1-4 family owner occupied residential property (including condos and home equity lines) of $9.5 billion, loans to lessors of nonresidential buildings (except mini warehouses) of $5.5 billion, loans secured by business assets including accounts receivable, inventory and equipment of $3.0 billion, loans to lessors of residential buildings (investment properties and multi-family) of $2.9 billion, loans secured by jumbo (original loans greater than $766,550) 1st mortgage 1-4 family owner occupied residential property of $2.7 billion, loans secured by owner occupied office buildings (including medical office buildings) of $2.0 billion, and loans secured by owner occupied nonresidential buildings (excluding office buildings) of $1.9 billion. 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 December 31, 2024, the Bank’s CDL concentration ratio was 40.9% and its CRE concentration ratio was 219.6%. At December 31, 2023, the Bank’s CDL concentration ratio was 59.7% and its CRE concentration ratio was 236.5%. As of December 31, 2024 and 2023, 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. Effect of Inflation and Changing Prices The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measure of financial position and results of operations in terms of historical dollars, without consideration of changes in the relative purchasing power over time due to inflation. Unlike most other industries, the majority of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates generally have a more significant effect on a financial institution’s performance than does the effect of inflation. Interest rates do not necessarily change in the same magnitude as the prices of goods and services. 102 Table of Contents While the effect of inflation on banks is normally not as significant as is its influence on those businesses which have large investments in plant and inventories, it does have an effect. During periods of high inflation, there are normally corresponding increases in money supply, and banks will normally experience above average growth in assets, loans and deposits. Also, general increases in the prices of goods and services will result in increased operating expenses. Inflation also affects our Bank’s customers and may result in an indirect effect on our Bank’s business. Contractual Obligations The following table presents payment schedules for certain of our contractual obligations as of December 31, 2024. Long-term debt obligations totaling $391.5 million include trust preferred junior subordinated debt and corporate subordinated debt. Operating and finance lease obligations of $122.6 million and $1.7 million, respectively, pertain to banking facilities. Certain lease agreements include payment of property taxes and insurance and contain various renewal options. Additional information regarding leases is contained in Note 19—Leases of the audited consolidated financial statements. Table 30—Obligations [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","Less Than","\u200b","1 to 3","\u200b","3 to 5","\u200b","More Than"],["(Dollars in thousands)","","Total","","1 Year","","Years","","Years","","5 Years"],["Long\u2011term debt obligations *","\u200b","$","391,534","\u200b","$","\u2014","\u200b","$","\u2014","\u200b","$","\u2014","\u200b","$","391,534","\u200b"],["Short-term debt obligations *","\u200b","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b","\u200b","\u2014","\u200b"],["Finance lease obligations","\u200b","\u200b","1,676","\u200b","\u200b","486","\u200b","\u200b","962","\u200b","\u200b","228","\u200b","\u200b","\u2014","\u200b"],["Operating lease obligations","\u200b","","122,613","\u200b","","16,335","\u200b","","30,445","\u200b","","26,529","\u200b","","49,304","\u200b"],["Total","\u200b","$","515,823","\u200b","$","16,821","\u200b","$","31,407","\u200b","$","26,757","\u200b","$","440,838","\u200b"]] [[/GREPCENT_TABLE]] *     Represents principal maturities.