SouthState Bank Corp (SSB) November 6, 2026 Conference Transcript

Good morning, everyone. Happy Friday. We'll kick things off this morning with South State Bank Corporation, SSB. South State Corporation operates as a community-oriented, full-service commercial bank with a strong focus on small and mid-sized business lending and a retail banking footprint in the southeast region, where they have roughly $40 billion of deposits from the Carolinas down to Florida. In Texas, roughly $9 billion of deposits, and up in Colorado, $4 billion. The company's last acquisition of Independent Bank closed in early 2025 and is valued at about $2.5 billion. Market cap today, $10 billion. Bank has total assets of $70 billion in roughly 350 branches. We're pleased to have John Corbett, chairman and CEO with us today. John has been with the organization since 1999, became the CEO of Center State in 2015, and has led the combined company since the 2020 merger. On my left with John today is Steve Young, South State's chief strategy officer. Steve wears a number of hats across the organization, including strategic planning, wealth management, and balance sheet management, and he also plays an active role in M&A. Great to have both of you with us this morning. I think John's going to kick it off with some prepared comments and a presentation and then we'll sit down for the Q&A.

All right. Thank you, Terry. Good morning. This is our first time at the Boston Bank Analyst meeting, and I kind of feel like the kid at Thanksgiving that finally grows up big enough that they can sit at the adult big boy table. So, Gerard, thank you for the invitation, allowing us to be here. Late 1990s. I was a 30-year-old commercial banker in Central Florida, worked for a large national bank that had been part of the M&A wave in the 1990s in Florida, and the bank was going through growing pains. It's the bank... I had participated in that M&A wave, and they were trying to figure out how to reorganize the bank, and they hired outside consultants to come in from New York and reorganize the company. And it seemed like, as a 30-year-old banker in a local market, that every reorganization that occurred moved the decision-making further and further away from the client. The clients were becoming more frustrated, which meant the bankers were becoming more frustrated, and I was very fortunate and blessed to work with a mentor of mine by the name of Ernie Penner, who was the regional president of Central Florida, and he came, he says, John, it looks like you're frustrated, I'm frustrated too, why don't we go out and start our own bank, which I didn't know you could do that at 30 years old, but in the 1990s in Florida, You could start a bank with $5 million in capital. We didn't have $5 million in capital, but we passed the hat around town, and largely based upon Ernie's credibility in the market, we raised the money, started the bank in early 2000s. Our premise was that if we focused on four fundamental things, we could create a lot of value for our clients, for our team, and ultimately for our shareholders. Those four theses revolved around, number one, we wanted to be a growth company. We wanted to be a growth company that built scale in our markets, built on relationship, low-cost deposits. Number two, we wanted to position the bank and situate it in the fast-growing suburbs. At that time, it was the suburbs around Orlando and Tampa, Florida. We just felt like there was a rising tide that was occurring in those markets. Number three, going back to the consultants centralizing things at the bank we were at and taking away the empowerment of the local market, we wanted a business model that was more entrepreneurial and put decision-making closer to the client. And then fourth and finally, we wanted to have a bank that performed at an elite level, a top quartile level, and that meant everything from asset quality metrics to earnings and return metrics, client satisfaction, employee engagement, and ultimately shareholder return. So, it's been gratifying, looking back over the last three decades, to see how that company and that vision evolved to a scale far greater than we ever imagined. If you think about the deposit franchise that we've built, the way we look at the company. In the map, is that many of these metropolitan areas that we operate in have grown to such an extent that they're merging together. The suburban markets are becoming part of the metro markets. So Orlando to Tampa, along the I-4 corridor, that's an area that we hold a number three deposit market share on banks that are regional banks under $250 billion. But where we live in between that, we kind of call that downtown or Lampa as those markets have merged together. The same thing if you go up to Atlanta and the I-85 corridor from Atlanta to Greenville to Charlotte, North Carolina, that's become Charlanta and that super region. And we hold a number three market share amongst regional banks there. Colorado, Front Range, number two. Texas Triangle, number four. And then perhaps the market that we have the strongest scale in is in coastal areas of Charleston, Savannah, Hilton Head, number one market share with nine banks. Somebody asked Warren Buffett one time what the secret to his wealth was, and he said, the secret to my wealth started... When I won the ovarian lottery, And it was simply the fact that he was born in the United States of America in a place where business creativity, entrepreneurship was strong, and he could invest in that growth. And I kind of feel that way about the career of many of our bankers. We were just blessed and fortunate to grow up in the banking business in Florida that was a fast-growing market. What this map shows you, it's the Census Bureau map of domestic migration in the United States since the COVID area. These have always been fast-growing markets in the Southeast and Texas, but since COVID, that growth has just accelerated. And if you think about where South State markets are the most prominent, the first is Florida. That is our largest market. The second is Texas, and the third is in South Carolina, and that's where the majority of the domestic migration has occurred in the United States, with Florida number one, Texas two, and the Carolinas number three. Back to this local leadership model about getting decision-making closer to the client. We wanted to build a entrepreneurial system and we wanted to empower bankers more than they were in a larger national type of organization. So how do you do that? How do you empower and equip frontline bankers? Well one way is to give them income statement control. And if you give them income statement control, there's a lot of freedom that comes with that. But there's also income statement accountability. And so it's really about taking a regional president and rather than diminishing the role to be that of a sales manager, elevating that role so they think like a CEO and they think like a shareholder. And we feel like if you do that and you can attract the best bankers, you'll ultimately attract the best clients. And after three decades, we're now seeing that in our client satisfaction ratings, top quartile, J.D. Power, Net Promoter Score, top quartile on commercial for Coalition Greenwich. And we're really proud of the top decile ranking of employee engagement of financial institutions in the United States. And if you do those things right, if you take care of your team members, you take care of your clients, ultimately, that leads to great financial returns and durable financial returns. If you look at the return on assets for South State over a one-year period, a five-year period, a 20-year period, consistently outperformed the peer group. And that financial return performance is built on low-cost funding, lower than peers for each of those periods, 1 year, 5 year, 20 years, and superior credit. And consistently better than peers over a one-year, five-year, and 20-year period. And at the end of the day, if you do this right, it ultimately drives what you care about in your laptops there today, which is driving earnings per share growth. And tangible book value growth. And if you look here over the last 20 years, despite a series of M&A deals, the company has had an earnings per share growth rate, CAGR, 8%. That's double the earnings per share growth rate of the peer group. And you say, well, gosh, if you're doing a lot of M&A, it's easy to drive EPS up, but you're probably diluting tangible book value per share. With a series of deals. And if you look, our tangible book value per share growth, again, double that of the peer group that we sit in. And if you do those things right, you build tangible book value over time, ultimately it's going to lead into superior shareholder returns. And if you look at the peer group of 16 banks that make our peer group, the shareholder returns are in the top quartile over multiple cycles. So turning to 2026 priorities. You know, 2024 was when we announced the independent financial deal, which was Texas and Colorado. 2025 was the year that we converted and integrated that deal in the summer. And, you know, early 2025, we had the tariffs, we had integrations, we had conversions, growth was slowing down somewhat. And so as we thought about 2026. And we thought about our company stepping back from M&A. At the same time, super regional banks were leaning into M&A. It was creating a lot of disruption in our markets. And we calculated with the deals that were announced in 2025, there were $124 billion of deposits that were going to go through a systems conversion. Not in the total amount in our states, but in the MSAs that we had branches, $124 billion. So wouldn't this be a great time during all that creative destruction process of M&A? To expand and invest in the sales force of the company. So we had a goal. We said, let's see if we can invest and expand the commercial relationship management team by 15 to 20% over a two-year period. And here we are, we're one year into that two-year plan, and we're already up about 13% increase in commercial RMs in our geography. I feel like that's been a success that's exceeded our expectations. The other thing, back to early 2025 with the tariffs and low single-digit growth, we wanted to get the growth engine going. When you go through an M&A deal and integration, the way I kind of look at it is you've got to get through the relationship-building side first, then you've got to work your way through the conversion second, and then you've got to get the growth machine up and running. So we wanted to prove to the market that the organic growth nature of our company would continue. And so we've gone, in the last year, From low single to mid-single-digit growth to this year operating at a high single-digit growth. The last year, loans have grown 9% year-over-year, and deposits have grown 7% year-over-year. We also knew that following a sizable acquisition, those of you in the investment community typically take a wait-and-see approach. Let's see how they do. Let's see if they can hit the numbers. First year, we had 32% earnings per share growth, shortened the earn-back period from roughly a two-year announcement to probably closer to a one-year earn-back, but there's always skepticism, you know, can you integrate, can you move into a new market, and so we had a lot of confidence. That we were succeeding in that integration effort. The company had very strong earnings. 2025, return on tangible equity was 20%. And we said, we know the stock valuation is going to lag, so let's lean in. Let's use some of these earnings that we've generated in this deal. And we repurchased 5% of the company starting a year ago. And now over the last year, the stock's up about 20%. So from a timing standpoint, we felt like that was the appropriate time to really lean in. So repurchase 5% of the shares, which also equated to retiring 20% of the shares that we issued in connection with the acquisition in the last year. And then finally, a year ago, artificial intelligence was a big deal, but it wasn't near the big deal it is today, and we were working on generative AI solutions for our company, new generative engine optimization for our website, and these types of things. So that would be a fourth priority for the company, and we can talk about those as we proceed. So, Terry, maybe we could move to the fire side.

Yeah, that was great. Thank you, John. You talked a lot about operating in markets with high population growth, net in-migration, but that also has brought with it competition. So how do you think about growth over the short term, the longer term, and as you think about your 2027 focus a year from now, how do you think growth is going to look?

Yeah, competition's nothing new here. Everybody's talking about increased competition. You know, I look back over the last 30 years, if you go pre-financial crisis, there were 315 banks operating in Florida. There were 300 banks operating in Georgia. Two-thirds of those banks are gone since the financial crisis. So yeah, there's new entrants. In the scheme of things, the competition really is not anything that we haven't faced in the past. We've always aspired to grow everything good in the bank at a 10% rate. That's an aspirational level. This year, we're coming close to that on the loan side. We guided in 2026 to mid to upper single digit growth. We've achieved that on the upper end. In the short term, we did see the big spike in interest rates in September, and we saw our pipelines dip a little bit. We started the year with a loan pipeline about $4.8 billion. Pipeline surged in the first quarter to $6.5 billion. And since that time, we've pulled through a lot of those deals. After the third quarter, the pipeline dipped about 14%. But we're still a little bit higher than we were at the beginning of the year. So, you know, given those fact pattern, we kind of see probably mid-single-digit growth in the fourth quarter. But we think as we move into 2027, it's kind of back to that range of mid to upper single-digit growth.

Perfect. And can you discuss some of your lines of business with a broader reach outside of traditional banking activities, and what are the opportunities, and how do you manage the risk?

Sure. Good morning, everyone. Glad to be with you. We've got, you know, I'll just highlight one line of business that's more of a fee line of business that we have that's a bit unique to us, is our correspondent capital markets area. We've been in that business. Since 2008, so the financial crisis in 2008, we got into that business, and it's been a really great fee generator for us. We don't really, it's really operational risk and not credit risk. We don't take credit risk in that, but really two or three things that we do in that line of business, which over the years have built up. We went from zero clients to about 1,200 financial institutions and asset managers, but we do fixed income for banks and asset managers. We've been doing that for 17, 18 years. We do interest rate swaps. We do payments, which would be sort of FX payments. And then we're adding some products like commodities and other things. So anyway, that's been a really good line of business. You know, that business over the years, it's a little bit rate sensitive. So when, you know, 2020, 2021, I think those fee income businesses hit a little over 100 million of revenue. This last year, it was around 90 million of revenue. So it's a significant line of business. It's a little different than what's normal. I would say for us, it helps us relative to interest rates. So if you think about net interest margin, we've always seen it as a hedge. So when rates go up... Typically our net interest margin goes up and does a little bit better. That business does a little bit worse in the short run. And as rates fall, this business does a little bit better and kind of helps hold up the revenue.

Perfect. And on the NIM, it's running mid to high 370s. How do you think about the repricing of deposits over the near term, and what's your thoughts about the margin going forward?

Sure, and we just talked about this on the call. You know, there's a lot of movement in rates, but I guess for us, there's really about two or three key things that we're thinking about relative to our margin. And so if I kind of walk you back to quarter two, I think our deposit costs were $176, so call it $175-ish. And then they started raising rates in September. You know, if you kind of think through the aspects of NIM, it's really, you know, now we have two rate hikes in our forecast. So September already happened. We think there's one coming in December. And really, on that, it's floating rate loans, which is about 39% of our book, versus sort of exception price deposits. We're trying to manage, you know, as those floating rate loans go up, that's about $20 billion versus the exception price. There's probably a basis point or two of, we're pretty neutral, but probably a basis point or two positive to NIM. The second is just the fixed asset repricing, which is a big piece of our story. We've got about $5 billion of legacy loans that aren't marked that are coming due over the next five quarters that are fixed repricing that are about $5.15 or so in coupon. And depending on where the yield curve is, when those reprice, there's a percentage point or so ahead of that, maybe a percent and a half, depending on how steep the curve is. And then, you know, we have a securities book. So that continues to reprice about a billion dollars a year. So those, you know, those are components. And then the third component is just around new production. And of course, as we get a steeper yield curve, that's better. We get a flatter yield curve, not as much. But all those components, there's some, you know, people talk about the NIM versus NII debate, and there certainly is some of that there. But if you kind of think about the fixed asset repricing over the next 18 or 12 to 18 months, it's pretty powerful. Assuming we keep this yield curve.

Perfect. Maybe one more for me, and then I'll open it up to the audience. You closed the independent acquisition early 2025, entering Texas, Colorado. How's the integration going? Other banks have maybe stumbled a little bit for a number of reasons. How are you doing as a new entrant in that market?

Yeah, you know, I look at it as a merger, as a marriage of people, not a combination of PowerPoints and spreadsheets. And the dating relationship that we had with David Brooks from Independent that founded that bank 36 years prior was about a six-year-long dating relationship. In fact, when we got close to announcing the deal, the only time we could meet was on Valentine's Day, and we met at a steakhouse, and they brought us a rose. So we had a long dating relationship, David and I. And, you know, the way I mentioned it earlier that you can measure success in a deal like that is, first of all, can you build relationships with the team? I knew I had a close relationship with David, but would our teams come together? So, one of the things that we've learned through many acquisitions is the importance of extending that dating relationship from the CEO down to the front line market leaders. One of our strongest leaders that was president of the state of Florida, he was getting close to retirement. It's named Mark Thompson. He and his wife, Rebecca, moved to Dallas a year before we had the conversion, and his job was to be the highest paid party planner in the state of Texas. And we didn't want him talking about business. We just wanted him inviting groups of five or six bankers from Charlotte, Tampa, Atlanta, and small groups meeting five or six of the bankers from Independent and just sharing stories about their family, getting to know people. So I think Mark did a fantastic job in that relationship building process. All of the geographic leaders at Independent that started with us are still there today. So we did a great job, I believe Mark did, with the relationship building with Dan Strodel, his counterpart in Texas. We got through the conversion. Then can you get the growth coming back at the end? And we do. We've now got the Texas-Colorado markets growing at the same pace that the bank is growing in the southeast. And we have this hiring initiative. And the goal was to grow 15 to 20 percent in two years. Texas is leading the way. They've expanded their commercial sales force by 22% in just one year.

Any questions in the audience? Work all the way down. Thank you. In the back.

Tony O'Leon, JP Morgan. A follow-up on the correspondent business, can you just talk about some of the products you have in the pipeline that over time could result in upside to the, I think you mentioned, 100 million of revenue they're generating today?

Sure, Tony. Thanks for the question. We've been in the FX business for a long time, but we weren't into the hedging part of that business, so we were just doing spot trades and have been doing that for 17, 18 years. We're rolling out a platform. I think it's April, maybe May, somewhere in there, that will allow us to do hedging for our commercial clients and also for other banks. And so that should roll out at that point in time. We've been ramping up for that over the last year. The other piece is commodities. We have an energy book that we now have in Texas because of the independent acquisition. Of course, those clients need some energy hedging. It's very similar to the risk profile that we do with our interest rate swaps, and so the framework is very similar. So those two things are things that we're putting together this next year. Over time, we would like to connect. We have a public finance group in our capital markets area. We have all these municipalities throughout our footprint. We'd love to be able to connect those two together. So over time, we think there's some synergies there, but those are a couple of things that we're rolling out.

Thank you. And then, John, on M&A, you talked about the history of M&A that the company has done. How do we balance the organic growth, the opportunities you have in your footprint today with the history of the company doing deals, this sort of two-year window that banks likely have for doing deals? Thank you.

Yeah, Tony, the way I think about our journey as a company over these three decades, there was about a 15-year period there that was marked by two crises as bookends. And the financial crisis in 2008, Silicon Valley crisis, that was our period of crisis and consolidation. And that's how we built the scale. That's how we positioned the company and the markets that we wanted to be in. We've done that now. We're in the markets we want to be in. We're really not looking to expand to other states. The last four or five years have been infrastructure build since 2020 to 2024, and we used M&A to help pay for that infrastructure build, change out all the technology. Now we're at a place where the company's doing great. I mean, the growth profile is great. The earnings profile is great. The cultural components of the company are great. And M&A is just not as valuable to us today as it was in that period of crisis and consolidation. So now, can we take the efforts that we put into M&A and put into expanding the sales force of the company to stay front-footed on growth and create operating leverage through that sales force expansion? So that's the thinking. Thank you, Tony.

Hey, guys. Good morning. Steven Scout and Piper Sandler. So, John, maybe continuing on that with the increase in the sales force, does this become maybe something like... A well-noted peer of yours may be more of a flywheel from a hiring perspective moving forward versus the traditional M&A track record. And how does your business model kind of being regional president-focused and the kind of in-market profitability metrics you guys target kind of help you to do that maybe better than others could?

Yes, Stephen, this is nothing new. I mean, organic recruiting, we've been doing this since we started 30 years ago, but we were doing it hand in hand with the M&A strategy. Now that the M&A strategy has largely achieved the things that we wanted to achieve, we're, like I said, we're more front-footed on the organic growth. I felt like this last year, because of the disruption in the market, that's when we set a bigger goal to grow 15 or 20 percent in a couple years. I think moving forward, probably the long-term business-as-usual expansions, probably more in that 5% to 10% expansion a year. And right now, a lot of this is balancing loan growth, deposit growth, DIM, and the types of bankers that we're seeking to attract to the company would be types of bankers that have more deposit-rich kind of businesses. We have a homeowners association business where we've got about $2.5 billion in deposits. That's something we'd like to invest in. We just hired a gentleman that was a former banker, CEO of a government contracting business to kind of help us start that line of business. So this is nothing new. It was kind of a surge in the last year. I see it kind of slowing back down as we balance loan and deposit growth, keeping our loan and deposit ratio roughly where it is. But back to the model, I do think that our model is attractive to bankers in the market. You know, every organization as it develops has to decide where is the star that the solar system revolves around in your organization. And in some organizations, it's the executives on the 40th floor. And some organizations, you know, it's totally risk driven. In our organization, the star that the planets revolve around is these regional presidents. And I think having that authority, empowerment at the local market and accountability is attractive. It's attractive for folks that are competitive and, you know, that want to win.

Maybe just one other would be, noting that M&A is probably the least of your priorities from a capital deployment perspective, but if we get indexing changes to regulatory thresholds, does that change the dynamics for you at all or the thought process of building scale in the midst of that?

Not really, because the scale we built has achieved what we wanted it to achieve from a return standpoint, and a technology rebuild standpoint. Right now, the level for Category 4, $100 billion, we're $70 billion in size. It seems like there's a fair amount of consensus to move that up on an inflation basis. We'll see. Hopefully, we'll hear something in the next three or four months. But it does not change our thinking. Even at a hundred billion dollars, if it stays where it is, you know, we can continue on this path for many years before we face that hurdle.

Hi, Ryan Kenney with Morgan Stanley. So the treasury management platform seems to be resonating, 700 million of new deposits in the third quarter from treasury-related accounts. Can you walk through the strategy in treasury management, how the product has evolved over time, and any investment that needs to be made going forward, especially as you try to expand the low-cost deposit franchise into the independent bank footprint in Texas and Colorado? Thanks.

Sure. Yeah, Ryan, I think it's, as John mentioned, it's been maybe a five-year journey. Some of that is the technology platform. So a few years ago, I guess it's almost been five years ago, we reinstituted a new charging management platform throughout the footprint, which was helpful because, you know, before you have the technology, you really can't sell the product no matter how great a banker. So you need the people and you need the product. And so you take that technology investment, so now we think we can compete with anyone that technology is as good as J.B. Morgan or others. So then the second piece was our focus on middle market banking. A few years ago, we hired several middle market bankers and sort of worked more on the C&I side of things. And it takes a few years to kind of get moving, but that's really starting to take charge. And then I think the third thing... is just related to the new footprint. Remember, an independent at the Texas and Colorado area, they really didn't have a very good platform, and they would have admitted that, which doesn't allow you to hire the C&I bankers that allow you to build treasury. So over the last year, we did our conversion about a year ago. It's almost been 18 months ago, so it was Memorial Day 2025. So now we've had a little bit of momentum. It takes you about 90 days to get through that, but now you're starting to sell those products and those new footprints, which they really didn't have a great solution. You know, if you think about, so that's sort of the evolution over the last five years. You know, in the future, we're investing, you know, we'll see where all this goes, but we're investing in tokenized deposits. We're one of the founding members of the Cary Network. Not sure where all that's heading, but we want to be front-footed in case, you know, commercial payments start moving in that direction.

And then, just as a follow-up, are you seeing deposit competition, especially for low-cost deposits, increase more in certain parts of your footprint, like Texas, Colorado, or is it pretty intense throughout the footprint?

Yeah, that's funny. I guess the way I would describe it... If you think about Texas and probably Texas and Colorado both, there's been some new entrants into those markets, as you all know. But, of course, there were already entrants into that market. You know, there were already one bank already, and now we're taking two banks into one bank again. So, you know, it's the same number of entrants. But typically, when people go through conversions, and we've done it ourselves over the 25 of them over the last 24, 25 years, People do promotional pricing and those kinds of things to get the client from here to there. We've seen a lot of that in some of those new markets. My guess is over time that gets a bit more rational because they get through sort of the conversion in the 90 days afterwards. So I don't think there's maybe some intense pricing right now, but I don't know that that's a long-term thing. I think it's always, you know, deposit competition, loan competition is pretty always intense. But if you look at the returns that we're putting up and others are putting up, it's pretty reasonable. I mean, you know, the returns are good, and it doesn't seem like it's getting worse.

Great, thank you.

Thank you. Hello, Janet Lee from TD Cowan. As you've transitioned the legacy independent bankers onto the South State model, have you already seen the change in banker behavior and productivity that you've hoped for? And does the changing data center development backdrop, just any second order implications from the evolving landscape, does that change any outlook for the growth opportunities in Texas versus other states?

Yeah, Janet, good morning. Yeah, so the bankers that have joined us, those four regional presidents, plus the chief banking officer out there, Dan Strodel, you know, they're looking at the model that South State provides for them, and they see their role and status being elevated in the company from a sales manager kind of role to acting as a CEO and thinking about CEO decisions and loan pricing, deposit pricing. Much of that was driven from the top down in their prior life. So in some respects, it's exciting to them. In some respects, they're not sure how that might affect their incentive plans, and we're going to work through all of those issues with them. But they are starting to think more about profitability. They're thinking more about pricing rather than just strictly growth. To the data center question, we've been studying this for several months, just thinking about, you know, the old adage, anytime there's anything growing like a weed, you know, is it a weed? And from a credit standpoint, we've looked at our nine states, you know, where data centers are being constructed, and it's really concentrated in two or three states. There's nothing in Florida, there's really nothing in Colorado or South Carolina. It is Texas, it's northern Virginia, we're really more southern Virginia, but then it's also Atlanta. Some areas in Georgia, but by far, Texas is the greatest. So one of the things we started asking our underwriters and credit folks to do in the last several months is looking at the potential of a sugar high in those markets that the second-order effect, the third-order effect, you know, think about the electricians that are doing business there or the concrete providers that are doing business there. They may be providing materials and labor and supplies to the data center construction itself, or their competitors are providing those services, and therefore they're able to charge higher margins, and maybe they're over-earning because of this short-term construction increase that will come down. I've heard others say it. We've seen it in our own book. We've got a couple clients that have hotels in those markets where a data center contractor will come in and they'll lease the hotel for two years. They'll write a check for $10 million just so they have a place to house the construction workers. That doesn't feel durable to me and sustainable, so we've tried to put that mindset in our credit underwriters to be wary of the potential over-earning that is occurring in those markets. But, yeah, who knows what the implications will be, but clearly there's an anti-construction of data center biases, and for us, it's that Dallas-Austin corridor that we've got to be careful with.

John, one of your fourth priorities for this year was AI. Can you just talk about the efficiency gains you're seeing because of those investments, and how does that impact bank M&A integration, and how do you use that as an advantage?

Yeah, you know, we meet with investors all the time and they want a specific answer to, is your efficiency ratio going to go down 3% or 4% or 1%? And it's so early in all this to figure that out with a precise answer. Let me tell you how we're thinking about it, Terry, and how we're communicating it through the company. I talked about the 15-year period of crisis and consolidation. And the last five years of that at South State have been infrastructure built, you know, replacing all of our key platforms with the Fortune 500 platforms, the Snowflakes, the Salesforce, the Workdays, Service Nows, all those types of things. Well, during that build-out period of time, as we get into budget season, which we're in right now, we have been growing the FTE count in our support areas, our risk area, our IT area. And it's been growing at a rate that's considerably faster than we've been growing the sales force of the company. Each year, Steve, you know, it's probably 6%, 7%, 8% sometimes FTE count growth. So the way we're communicating this through the budget process right now is our expectation is now that that build out is largely complete and we've got the benefits of AI that are percolating throughout the company, The expectation is that our support FTEs will run flat in 2027 and potentially beyond that. And we'll continue to add to the Salesforce FTEs and create positive leverage and efficiencies that way. Encouragingly, our support folks understand the power of AI. They've seen it in use cases, both generative and agenic, and they're bought in to that goal of keeping the FTE flat. I think it's also an important cultural approach to the company. Instead of having folks that are concerned that we're going to have a 10% layoff or a 20% layoff in the support area, by saying flat, it's a commitment. If you're doing a great job in our support area, we're going to find a home for you, but we're not going to continue the growth rate that we've seen in the last five years of 5%, 6%, 7%, 8% FTE growth.

And I would just add just the focus for our team is the revenue producer. We're going to add those, we're going to keep support flat, and that's going to create operating leverage over time, which eventually will hit the efficiency ratio.

That's great. Well, I think we're out of time. I want to thank you both for your attendance this year. Thank you. Thank you.