| Leases |
Note 7 — Leases As of June 30, 2026, and December 31, 2025, we had operating right-of-use (“ROU”) assets of $503.2 million and $507.1 million, respectively, and operating lease liabilities of $525.2 million and $525.3 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 20 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 | | Six Months Ended | | | | June 30, | | June 30, | | (Dollars in thousands) | | 2026 | | 2025 | | 2026 | | 2025 | | Lease Cost Components: | | | | | | | | | | | | | | Amortization of ROU assets – finance leases | | $ | 116 | | $ | 116 | | $ | 231 | | $ | 231 | | Interest on lease liabilities – finance leases | | | 5 | | | 7 | | | 10 | | | 14 | | Operating lease cost (cost resulting from lease payments) | | | 17,334 | | | 15,914 | | | 34,065 | | | 25,283 | | Short-term lease cost | | | 195 | | | 425 | | | 397 | | | 780 | | Variable lease cost (cost excluded from lease payments) | | | 1,395 | | | 1,560 | | | 2,344 | | | 2,315 | | Total lease cost | | $ | 19,045 | | $ | 18,022 | | $ | 37,047 | | $ | 28,623 | | Supplemental Cash Flow and Other Information Related to Leases: | | | | | | | | | | | | | | Finance lease – operating cash flows | | $ | 4 | | $ | 7 | | $ | 10 | | $ | 14 | | Finance lease – financing cash flows | | | 123 | | | 121 | | | 246 | | | 242 | | Operating lease – operating cash flows (fixed payments) | | | 14,341 | | | 14,277 | | | 28,979 | | | 22,864 | | Operating lease – operating cash flows (net change asset/liability) | | | (6,249) | | | (6,437) | | | (12,630) | | | (11,422) | | New ROU assets – operating leases | | | 36,501 | | | 7,705 | | | 38,319 | | | 397,318 | | Weighted – average remaining lease term (years) – finance leases | | | 1.99 | | | 2.95 | | | 1.99 | | | 2.95 | | Weighted – average remaining lease term (years) – operating leases | | | 12.26 | | | 12.80 | | | 12.26 | | | 12.80 | | Weighted – average discount rate - finance leases | | | 1.8% | | | 1.7% | | | 1.8% | | | 1.7% | | Weighted – average discount rate - operating leases | | | 6.4% | | | 6.4% | | | 6.4% | | | 6.4% | | | | | | | | | | | | | | | | Operating lease payments due: | | | | | | | | | | | | | | 2026 (excluding 6 months ended June 30, 2026) | | | | | | | | $ | 29,067 | | | | | 2027 | | | | | | | | | 60,135 | | | | | 2028 | | | | | | | | | 61,553 | | | | | 2029 | | | | | | | | | 61,078 | | | | | 2030 | | | | | | | | | 59,570 | | | | | Thereafter | | | | | | | | | 518,519 | | | | | Total undiscounted cash flows | | | | | | | | | 789,922 | | | | | Discount on cash flows | | | | | | | | | (264,713) | | | | | Total operating lease liabilities | | | | | | | | $ | 525,209 | | | | |
Terms and conditions are similar to those real estate operating leases described above. Lease classifications from the acquired institutions were retained. At June 30, 2026, 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 June 30, 2026, we had three operating leases that had not yet commenced for approximately $4.4 million. Equipment Lessor SouthState has an Equipment Finance Group which does business directly with customers and primarily focuses on serving the construction and utility segments. The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at June 30, 2026, and December 31, 2025: | | | | | | | | | | | | | | June 30, | | December 31, | | (Dollars in thousands) | | 2026 | | 2025 | | Direct financing leases: | | | | | | | | Lease receivables | | $ | 205,742 | | $ | 92,927 | | Guaranteed residual values | | | 5,697 | | | 4,212 | | Unguaranteed residual values | | | 16,528 | | | 11,335 | | Initial direct costs | | | 7,191 | | | 3,502 | | Less: Unearned income | | | (35,510) | | | (17,690) | | Total net investment in direct financing leases | | $ | 199,648 | | $ | 94,286 | |
The following table summarizes direct financing lease income recorded for the three and six months ended June 30, 2026, and remaining lease payment receivable for each of the next five years: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | (Dollars in thousands) | | 2026 | 2025 | | 2026 | | 2025 | Direct financing lease income | | | | | | | | | | | | | Interest income | | $ | 2,938 | | $ | 890 | | $ | 5,167 | | $ | 1,519 | Remaining lease payments receivable: | | | | | | | | | | | | | 2026 (excluding 6 months ended June 30, 2026) | | $ | 26,626 | | | | | | | | | | 2027 | | | 47,248 | | | | | | | | | | 2028 | | | 39,882 | | | | | | | | | | 2029 | | | 41,177 | | | | | | | | | | 2030 | | | 29,511 | | | | | | | | | | Thereafter | | | 26,995 | | | | | | | | | | Total undiscounted lease receivable | | | 211,439 | | | | | | | | | | Less: unearned interest income | | | (35,510) | | | | | | | | | | Net lease receivables | | $ | 175,929 | | | | | | | | | |
See Note 1 — Summary of Significant Accounting Policies, under the “Leases” section, of the 2025 Form 10-K, on accounting for leases.
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