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Leases

9 Months Ended

Sep. 30, 2025

Note 8 — Leases

As of September 30, 2025, and December 31, 2024, we had operating right-of-use (“ROU”) assets of $480.6 million and $95.8 million, respectively, and operating lease liabilities of $491.6 million and $103.9 million, respectively. We maintain operating leases on land and buildings for some of our operating centers, branch facilities and ATM locations. Most leases include one or more options to renew, with renewal terms extending up to 13 years. The exercise of renewal options is based on the sole judgment of management and what they consider to be reasonably certain given the environment today. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to us if the option is not exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2025		2024		2025		2024
Lease Cost Components:
Amortization of ROU assets – finance leases	$	117	$	117	$	348	$	350
Interest on lease liabilities – finance leases		6		8		20		26
Operating lease cost (cost resulting from lease payments)		15,708		4,025		40,991		12,658
Short-term lease cost		528		144		1,308		467
Variable lease cost (cost excluded from lease payments)		898		704		3,213		2,457
Total lease cost	$	17,257	$	4,998	$	45,880	$	15,958
Supplemental Cash Flow and Other Information Related to Leases:
Finance lease – operating cash flows	$	6	$	8	$	20	$	26
Finance lease – financing cash flows		122		120		363		357
Operating lease – operating cash flows (fixed payments)		13,938		4,450		36,802		12,862
Operating lease – operating cash flows (net change asset/liability)		(6,330)		(3,436)		(17,752)		(10,103)
New ROU assets – operating leases		2,646		—		399,965		9,093
Weighted – average remaining lease term (years) – finance leases		2.71		3.69		2.71		3.69
Weighted – average remaining lease term (years) – operating leases		12.49		8.63		12.49		8.63
Weighted – average discount rate - finance leases		1.8%		1.7%		1.8%		1.7%
Weighted – average discount rate - operating leases		6.4%		3.4%		6.4%		3.4%

Operating lease payments due:
2025 (excluding 9 months ended September 30, 2025)					$	14,116
2026						57,848
2027						56,862
2028						56,706
2029						55,848
Thereafter						536,093
Total undiscounted cash flows						777,473
Discount on cash flows						(285,869)
Total operating lease liabilities					$	491,604

As of September 30, 2025, the Company held a small number of finance leases assumed in connection to the CenterState merger completed in 2020. These leases are all real estate leases. Terms and conditions are similar to those real estate operating leases described above. Lease classifications from the acquired institutions were retained. At September 30, 2025, we did not maintain any leases with related parties and determined that the number and dollar amount of our equipment leases was immaterial. As of September 30, 2025, we had one additional operating lease that has not yet commenced for approximately $28.2 million.

Sale-leaseback Transaction

On February 28, 2025, the Bank completed a sale-leaseback transaction 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 165 bank branch properties owned and operated by the Bank (collectively, the “Branches”). The Branches are located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. The sales price for the Branches was $467.2 million, and the Company recorded a gain on sale of the Branches of $229.3 million (net of transaction costs). Pursuant to the Sale Agreement, the Bank, concurrently with the closing of the sale of the Branches, entered 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”). Each of the Lease Agreements has initial terms of 15 years and provides the Bank with three consecutive renewal options of five years each. The Lease Agreements also include a 2% annual rent escalation during the initial term and the renewal terms. With the Sale-leaseback Transaction, the Company recorded additional lease right of use assets of $361.1 million.

Equipment Lessor

SouthState has an Equipment Finance Group which goes to market through intermediaries. The Equipment Finance Group primarily focuses on serving the construction and utility segments. Lease terms typically range from 24 months to 120 months. At the end of the lease term, the lessee has the option to renew the lease, return the equipment, or purchase the equipment. In the event the equipment is returned, there is a remarketing agreement with the intermediary to sell the equipment. The Equipment Finance Group offers the following lease products: TRAC Leases, Split-TRAC Leases, and FMV Leases. Direct finance equipment leases are included in commercial and industrial loans category, which is included in the Non-acquired Loans on the Consolidated Balance Sheets.

The estimated residual values for direct finance leases are established by an approved intermediary who utilizes internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. FMV and Split-TRAC leases have residual risk due to their unguaranteed residual value whereas TRAC leases have a guaranteed residual value. Expected credit losses on direct financing leases and the related estimated residual values are included in the Commercial and Industrial loan segment for the ACL.

The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at September 30, 2025, and December 31, 2024:



	September 30,		December 31,
(Dollars in thousands)	2025		2024
Direct financing leases:
Lease receivables	$	72,289	$	24,584
Guaranteed residual values		3,669		1,057
Unguaranteed residual values		8,997		5,245
Initial direct costs		2,994		2,640
Less: Unearned income		(14,436)		(7,362)
Total net investment in direct financing leases	$	73,513	$	26,164

The following table summarizes direct financing lease income recorded for the three and nine months ended September 30, 2025, and remaining lease payment receivable for each of the next five years:

Three Months Ended

Nine Months Ended

September 30,

(Dollars in thousands)

2025

2024

2025

2024

Direct financing lease income

Interest income

1,100

260

2,619

652

Remaining lease payments receivable:

2025 (excluding 9 months ended September 30, 2025)

4,746

2026

14,899

2027

15,832

2028

15,291

2029

13,243

Thereafter

11,947

Total undiscounted lease receivable

75,958

Less: unearned interest income

(14,436)

Net lease receivables

61,522

See Note 1 — Summary of Significant Accounting Policies, under the “Leases” section, of our Annual Report on Form 10-K for the year ended December 31, 2024, on accounting for leases.