SouthState Bank (SSB) risk factors, 2025 10-K

Risks relating to our Business and Business Strategy

1. 01We face risks and uncertainties related to our Merger with IBTX
2. 02The Company may not be able to integrate successfully the companies or to realize the anticipated benefits of the Merger
3. 03The Company will continue to incur substantial expenses related to the IBTX Merger and the integration
4. 04We may not realize the benefits we anticipate from the pending sale-leaseback transaction with Blue Owl Real Estate Capital
5. 05Our business strategy includes continued growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
6. 06We may not realize the expected benefits from our strategic initiatives, either in whole or in part, which could negatively impact our future profitability
7. 07We may be unable to anticipate changes in market interest rates, which are affected by many factors beyond our control including but not limited to inflation, monetary and fiscal policy, money supply, recessionary pressures, unemployment and other changes that affect domestic and foreign financial markets
8. 08Inflation could negatively impact our business and our profitability
9. 09Our cost of funds may increase as a result of general economic conditions, FDIC insurance assessments, interest rates and competitive pressures
10. 10The implementation of new lines of business or new products and services may subject us to additional risk
11. 11Technological changes, including artificial intelligence and online and mobile banking, have the potential of disrupting our business model, and we may have fewer resources than many competitors to invest in technological improvements
12. 12A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could hurt our business
13. 13Our loan portfolio includes commercial and commercial real estate loans that may have higher risks
14. 142) total reported loans secured by multifamily and non-farm nonresidential properties and loans for construction, land development, and other land equal 300% or more of total risk-based capital (as of December 31, 2024, our bank ratio was 219.6%)
15. 15We are subject to the risk of default by our clients and counterparties
16. 16If we fail to effectively manage credit risk and interest rate risk, our business and financial condition will suffer
17. 17A lack of liquidity and/or ineffective liquidity management practices could affect our operations and jeopardize our financial condition
18. 18The results of our most recent stress tests may not accurately predict the impact on our financial condition if the economy were to deteriorate
19. 19The Current Expected Credit Loss (“CECL”) standard and merger activity may result in increased volatility and further increases in our allowance for credit losses (“ACL”)
20. 20Our size and continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed
21. 21Our processes for managing risk may not be effective in mitigating risk or losses to us
22. 22Rising mortgage rates and adverse changes in mortgage market conditions could adversely impact our mortgage line of business
23. 23Our recent results may not be indicative of our future results
24. 24We are subject to environmental risks in our lending activities
25. 25While we use appraisals in deciding whether to make a loan that is secured by real estate, they do not ensure the value of the real property collateral
26. 26We are subject to losses due to errors, omissions or fraudulent behavior by our employees, clients, counterparties or other third parties
27. 27The adoption and use of artificial intelligence tools by us and our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients, or counterparties, or other third parties
28. 28We are subject to sustainability, stewardship and governance risks that could adversely affect our reputation and/or our business, operations, and earnings
29. 29Our business could suffer if we fail to maintain our culture and attract and retain experienced people
30. 30If we are unable to offer our key management personnel long term incentive compensation, including restricted stock units and performance share units, as part of their total compensation package, we may have difficulty retaining such personnel, which would adversely affect our operations and financial performance
31. 31We rely on the performance of highly skilled personnel and if we are unable to attract, retain, develop and motivate our human capital in the form of well-qualified employees, our business and results of operations could be harmed
32. 32We may not be able to successfully implement current or future information technology and cybersecurity system enhancements and operational initiatives, which could adversely affect our business operations and profitability
33. 33A failure of or disruption to our operational or security systems or infrastructure, or those of our third-party service providers, could disrupt our business, damage our reputation, increase our costs and cause losses
34. 34We face cybersecurity risks from cyber-attacks, information security breaches and other similar incidents that could result in the disclosure of confidential and other information (including personal information), adversely affect our business or reputation, and create significant legal and financial exposure
35. 35We may face risks with respect to future expansion
36. 36Attractive acquisition opportunities may not be available to us in the future
37. 37Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
38. 38Our accounting policies and processes are critical to how we report our financial condition and results of operations and require our management to make estimates about matters that are uncertain
39. 39The value of securities in our investment portfolio may decline in the future
40. 40Consumers may decide not to use banks to complete their financial transactions
41. 41Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance

Risks relating to the Regulatory Environment

1. 42As the Company grows, the heightened expectations of regulatory agencies may expose us to additional regulatory risk
2. 43We are subject to extensive regulation that could limit or restrict our activities
3. 44Recent regulatory proposals may increase capital and liquidity risks
4. 45We are subject to examination and scrutiny by a number of banking agencies and, depending upon the findings and determinations of these agencies, we may be required to make adjustments to our business that could adversely affect us
5. 46The Bank is subject to the Bank Secrecy Act and other anti-money laundering statutes and regulations, and any deemed deficiency by the Bank with respect to these laws could result in significant liability and have material impact on our business strategy
6. 47The Bank is subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to material penalties and other sanctions
7. 48Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition
8. 49The Federal Reserve may require us to commit capital resources to support the Bank
9. 50We could be subject to changes in tax laws, regulations and interpretations or challenges to our income tax provision
10. 51We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and cybersecurity, which could increase the cost of doing business, compliance risks and potential liability

Risks relating to our Common Stock

1. 52State law and provisions in our articles of incorporation or bylaws could make it more difficult for another company to purchase us, even though such a purchase may increase shareholder value
2. 53In many cases, shareholders may receive a premium for their shares if we are purchased by another company. State law and our articles of incorporation and bylaws could make it difficult for anyone to purchase us without the approval of our Board of Directors
3. 54Shares of our Common Stock are not insured deposits and may lose value
4. 55Future capital needs could result in dilution of shareholder investment
5. 56The trading volume in our common stock and the sale of substantial amounts of our common stock in the public market could depress the price of our common stock
6. 57Our ability to pay dividends is limited and we may be unable to pay future dividends
7. 58Holders of our junior subordinated debentures have rights that are senior to those of our common shareholders
8. 59Our stock price may be volatile, which could result in losses to our investors and litigation against us
9. 60At December 31, 2024, our shareholders included three funds owning approximately 29% of our common stock and they may exercise significant influence over us and their interests may be different from our other shareholders

Risks relating to Economic Conditions and other Outside Forces

1. 61Changes and instability in global economic conditions and geopolitical matters could have a material adverse effect on our business, financial condition and results of operations
2. 62A slowdown in economic growth or a resumption of recessionary economic conditions could have an adverse effect on our business in the future
3. 63The soundness of other financial institutions could adversely affect us
4. 64Our business is subject to the success of the local economies where we operate
5. 65Natural disasters, adverse weather or manmade events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations
6. 66We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts
7. 67Market volatility could adversely affect our operations or ability to access capital
8. 68Competition from financial institutions and other financial service providers may adversely affect our profitability
9. 69The fiscal and monetary policies of the federal government and its agencies could have a material adverse effect on our earnings
10. 70We are or may become involved from time to time in suits, legal proceedings, information-gathering requests, investigations, and proceedings by governmental and self-regulatory agencies that may lead to adverse consequences