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Any such forward-looking statements we may make are subject to the safe harbor rules. Please review the forward-looking disclaimer and safe harbor language in the press release and presentation for more information about our forward-looking statements and risks and uncertainties which may affect us. Now I'll turn the call over to you, John.
Thanks, Will. Good morning, everyone, and thank you for joining us. SouthState delivered another strong quarter. We generated a return on assets of 1.36% and a return on tangible common equity of 17.6%, which extends the consistent high performance over the last several quarters. Our results reflect solid balance sheet growth, stable margins, improving efficiency, and continued strength in credit quality. As we reach the midpoint of 2026, I'm encouraged by the progress we're making against the four priorities we outlined at the beginning of the year. Attracting top talent, growing the balance sheet, creating value through disciplined capital allocation, and building artificial intelligence capabilities throughout the company. Starting with talent. SouthState's culture continues to be a differentiator. In a period of meaningful disruption across many of our markets, bankers are looking for a platform that empowers local decision-making, values long-term relationships, and creates opportunities for growth.
Our division presidents have successfully expanded our commercial banking sales force by more than 10% in just the last three quarters, and we continue to be impressed by both the quality and diversity of talent joining the franchise. These are experienced relationship managers who understand our markets, fit our culture, and position us for future growth. That recruiting success is an investment in the company's future, and it's directly supporting our second priority, meaningful balance sheet growth. Over the last year, loans have grown 8% and deposits have grown 5%, both within the range of guidance we provided. There's been considerable discussion this quarter around the balance between growth and incremental profitability, and that's an important conversation, and frankly, it's one that we have every quarter. Our responsibility as capital managers is to balance three objectives simultaneously, soundness, profitability, and growth.
We don't optimize for one quarter. We optimize for long-term shareholder value. That requires discipline, judgment, particularly when opportunities are abundant. One thing we're confident in is that we'd rather operate in vibrant, growing markets than be forced to manufacture growth where it doesn't naturally exist. Strong markets give us options. They allow us to be selective, compete where we have advantages, and build profitable relationships that create value over many years. Our bankers and our footprint continue to provide those opportunities. Equally important, we're maintaining our commitment to soundness. Asset quality improved during the quarter with non-performing assets declining 14%, and net charge-offs remaining exceptionally low at just 6 basis points. Credit metrics continue to reflect the disciplined underwriting culture that has long been a hallmark of SouthState. Turning to capital allocation.
We remain confident that SouthState represents an attractive investment at today's valuations. Over the last year, we've repurchased nearly 5% of our shares outstanding while also increasing the dividend and maintaining a CET1 capital ratio above 11%. We view share repurchases as one of several tools available to create shareholder value; when our stock trades at levels that we consider attractive relative to the long-term earnings power of the franchise, we intend to be opportunistic. While repurchase activity slowed a little during the second quarter, our philosophy hasn't changed. We expect to continue returning capital in a disciplined manner, likely at a pace more consistent with our previously communicated 40%-60% capital return framework. Finally, artificial intelligence remains an area of significant focus and opportunity. Our objective is to empower every department to identify opportunities where this technology can improve speed, quality, and scale.
Today, we're already seeing productivity gains in areas such as credit operations, fraud management, call center support, and through the continued adoption of our internally developed small language model. When I step back and I look at the quarter, I see a team that's aligned and executing. We're growing, we're maintaining strong credit quality, we're investing in talent and technology, and we're continuing to allocate capital in ways that we believe will create long-term shareholder value. I want to thank our teammates for what they accomplished this quarter, and I'm optimistic about the opportunities ahead. With that, I'll turn it back over to you, Will, to walk through the quarter in more detail.
Thanks, John. Our net interest margin of 378 basis points was down a basis point from Q1 and in line with our 375-380 basis points guidance. Deposit costs were unchanged at 176 basis points, also in line with our guidance. Loan yields of 591 basis points were down 5 basis points from Q1, accretion income of $33 million was down $6 million from Q1. Excluding accretion, loan yields were up a basis point, and NIM was up 4 basis points. One side note about accretion. We often get questions about that number, rarely about core deposit intangible amortization, a non-cash expense resulting from purchase accounting rules. Slide 11 in our deck shows quarterly margin, accretion income, and CDI amortization expense. I'll note that our quarterly CDI amortization number of $21 million is getting close to our quarterly accretion number; I expect those lines to cross in the next four to five quarters. Additionally, I'll point out that our Q2 2026 EPS, excluding both accretion income and CDI amortization expense, was up 13% versus the second quarter of 2025.
Net interest income of $576 million was up $14 million from Q1. In comparing to Q1, the $6 million positive impact of the extra day in the quarter matched the $6 million decline in accretion income. As John noted, we had a record quarter for loan growth and loan production, with loan growth of $1.35 billion equating to an 11% annualized rate, matching the growth rate in average loans. Over 76% of our loan production in the quarter had a floating rate. Our Florida banking group led the company in loan growth dollars this quarter; every one of our banking groups had good growth. Pipelines continue to be strong, though down slightly from March 31 levels. They remain well above other recent quarters. Non-interest income of $97 million, or 57 basis points of average assets, was within our guidance range of 55-60 basis points, and $3 million below Q1's levels, as higher deposit fees were offset by lower mortgage revenue.
Non-interest expenses of $358 million were slightly better than guided. We had higher deferred loan origination costs due to the record quarter for loan production, but this was offset by higher incentive accruals and commission expenses, holding compensation costs flat with Q1 levels. Looking to the remainder of the year, we have no changes to our 2026 non-interest expense guidance for the year. Consensus estimates for non-interest expense are a bit above $1.46 billion, and this is in line with our 2026 guidance of 4% growth over 2025 levels. John noted the continuation of our successful record of low net charge-offs. This quarter's 6 basis points makes eight out of the last nine quarters where our net charge-offs have been below 10 basis points. Provision expense of $16 million was primarily driven by the quarter's loan growth. We had a nice reduction in non-performing assets and in our classified loans, and payment performance remains very good.
We continue to feel good about our credit quality. Turning to capital, we repurchased 1 million shares in the quarter at a weighted average price of $97.62, for a 68% total payout ratio including dividends. This brings our year-to-date total to 2.5 million shares repurchased for an 80% total payout ratio year-to-date. We continue to expect to generate solid growth, so our longer-term total payout ratio guidance remains in the 40%-60% range, as John stated. Even with a higher capital return posture and 11% loan growth in the quarter, capital levels remained very healthy. CET1 ended at 11.1%, TCE was 8.7%, and our tangible book value per share ended at $58.72, which is up 13% from the year-ago level, a period in which we repurchased over 4.9 million shares, or approximately 5% of the company. Operator, we'll now take questions.
分析師問答
We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the roster. Your first question comes from Stephen Scouten with Piper Sandler. Your line is open. Please go ahead.
Yeah, good morning. Thank you. Maybe if I could start on NIM trends moving forward, if you continue to grow loans at this kind of high single digit, low double digit pace, and what you're seeing on deposit costs specifically within that dynamic.
Sure. Good morning, Stephen. Net interest margin this quarter was 378 basis points versus our guide last quarter of 375-380 basis points, right in line. Last quarter, we grew $900 million of interest-earning assets with only 1 basis point of contraction; I think that was a real win going forward. Deposit costs were flat at 176 basis points and within our guidance. Going forward, nothing has changed in our guidance. We expect to continue to grow. The format we usually use around interest-earning assets is the same as last quarter. We see the growth that John talked about continuing in that mid to upper single digit range. We have no rate cuts nor rate hikes in our forecast, and we expect a stable NIM. Some dynamics are working in our favor: repricing of our existing book, for loans and securities, and the new production rates. All of that to say we continue to expect NIM, if rates remain flat through 2027, to continue to be in that 375-380 basis points range.
Okay. Helpful. I know you guys talked about this ongoing conversation industry-wide and internally, the push-pull between growth and net interest income and NIM. Given your 2026 focus of driving meaningful balance sheet growth, I would presume that you guys, if you had to weight one more to the other, would say a couple of basis points on NIM compression would be okay as long as you're growing good customers, loans, and NII. Is that fair in terms of your mindset?
Yeah, that's exactly right, Stephen. We set out a plan for this year to expand the team, and we're successfully doing that. They're producing for us. New hires that we've had have contributed $600 million of new loan production so far, and they have a $1.5 billion pipeline behind that. We've got lots of opportunities to grow. Every day when we make loan decisions, we're doing it based upon a risk-adjusted return on capital. We see opportunities continuing to grow, and we'll make the trade-offs that make sense to us from a capital management standpoint.
Got it. Just last for me, from a deposit growth standpoint, it seems like traditionally there's a little bit more of a pickup in the back half of the year seasonally in terms of deposit growth. Would you expect that deposit growth would more closely match loan growth in the back half of the year? How do you think about the pressure on deposit costs as you manage that balance?
Sure. That's right. There's seasonality in our book. Typically the second and third quarters have seasonality: second quarter because of tax payments, third quarter because public fund flows move before they start to move back up. Underlying those trends, there's a lot of good deposit activity. As we think about that mid- to upper-single digit loan growth, we're going to fund it for the rest of the year somewhere in that mid- to upper-single digits. I would say deposit growth will probably be in the mid-single digit over the next quarter or so, and then move toward the upper-single digits in the last part of the year based on seasonality.
Okay, great. Thanks for all the color. Appreciate it, guys. Congrats on a great quarter.
Thank you, Stephen.
Your next question comes from the line of John McDonald with Truist Securities. Your line is open. Please go ahead.
Good morning. Thanks. I was hoping to follow up on the last question around deposits. Inside of that outlook for the back half of the year, Steve, what do you see in terms of deposit mix, in terms of non-interest bearing versus interest bearing? There were some different dynamics between kind of the end of period and average this quarter that I assume was kind of some seasonality. Just a little bit of color, maybe what happened this quarter on that mix and what you see for the back half. Thanks.
Sure, John. This quarter we had 5% average deposit growth quarter-over-quarter. We also had 5% non-interest-bearing deposit growth quarter-over-quarter. From time to time, there are seasonality effects on the last day of the quarter; we don't see that as a negative trend, just a particular day. As we think about deposit mix, and deposit costs within our NIM guidance, we were able to keep deposit costs flat this quarter. If we continue to grow loans at this pace, deposit costs will move up a little. If we grow in that mid-single digit range over the next quarter or two, we should be able to keep those costs contained, and that's part of our margin guidance. Non-interest-bearing deposits: if you look at our Treasury Management activity beneath the noise, we've grown Treasury Management accounts this year about 16% annualized year-to-date, and our year-to-date balances annualized have grown 8%. Underneath all the things that you don't get to see, there's a lot of good growth in those areas.
Great. Maybe we could ask John for some color on loan growth. Maybe speak a little bit to the sustainability of the strength you saw this quarter and where it's coming from, whether new markets, legacy markets. Any color on that would be helpful.
Yeah, John. We've guided this year to mid to high single digits, and we communicated last quarter that, based on pipeline strength, we could wind up on the higher end of that guide, and we did. We've grown 8% year-over-year. This year, we've grown 9% annualized. I feel like we're on track for the guidance we gave. The growth is broad-based across all our markets. From a dollar standpoint, the greatest contributors are the states where we have the largest presence: Florida, Texas, and South Carolina. From a percentage standpoint, Atlanta saw strong C&I growth in the second quarter, as did Virginia and Alabama. In the first half of the year versus the back half, we saw a little higher and more elevated C&I seasonal pay-downs in the first half and more CRE growth. We expect that to shift in the second half, with more pickup in C&I and more planned CRE payoffs on the back half. That's the underlying mix shift we see in our pipelines.
Great. Thank you.
Your next question comes from the line of Hannah Wynn with KBW. Your line is open. Please go ahead.
Hi, good morning. Stepping in for Catherine Mealor. I wanted to start off on expenses. Your expenses came in strong this quarter, and I know you guys are working on hiring initiatives as well and kept your guide at 4%. I was wondering where you're seeing the pricing of these new hires as markets become more competitive and where you expect expenses to trend for the back half of the year, as you guys have been relatively flat so far in the first half to 4% for the full year would be a pretty big ramp.
Hannah, good morning. You're right. We have had success in recruiting, and it's a competitive market. We believe we offer a value proposition beyond just compensation, in terms of our culture, our operating structure, and ownership culture, which helps recruiting in disrupted markets. Regarding non-interest expense, one factor that helped on the compensation line is that with higher loan production, you have more deferred origination costs that offset comp expense and are amortized over the life of the loan. That was a help in the second quarter, somewhat offset by incentive accruals and higher commission expense, which held compensation flat with Q1. We expect good production in the back half of the year. Hires from the first and second quarter will be in the run rate for full quarters. Also, our merit increases for most of the company begin July 1; that's an inflationary comp number. All that baked in is why I'm holding steady with the 4% year-over-year guide, which is pretty much where consensus has it in the $4.60 to $4.65 billion range. We still feel good with that guide. There are obviously factors that can cause it to vary a little as you get near the end of the year, such as incentives and loan production levels, but that's how we think about it.
Great. Thank you. Then my other question is on, I know you mentioned in your opening remarks keeping capital return in the 40%-60% range, and I was just wondering if you could give a little more color on the timing and expectations for share repurchases that you see for the rest of the year.
That's a good question. I'm going to stick with our 40%-60% guide. We make decisions influenced by the environment and our capital posture. We think we're in a position to invest in growth and expect to continue doing that. We have taken advantage of weaker share prices over the last year and been more active. If you look back over the last year trailing 12 months, our payout ratio is 75%, and that includes a quarter last year where we only bought back 440,000 shares. The last three quarters, the trailing nine months payout ratio is much higher; that's not sustainable if we want to maintain CET1 in the 11%-12% range and still expect mid to high single-digit loan growth. Other than that, that's about as specific as we can get.
Okay, great. Sounds good. Thank you so much.
Your next question comes from Michael Rose with Raymond James. Your line is open. Please go ahead.
Hey, good morning, guys. Thanks for taking my questions. Maybe just on the loan pipeline and growth in generation. Can you talk about how some of the newer bankers that you've hired over the past year or two have performed versus expectations? Just trying to get a sense of the momentum levels and how that translates or compares to what's going on in your legacy markets versus the expansionary markets. Thanks.
Yeah, Michael. We aimed to take advantage of disruption in our markets. We asked our division presidents to increase the commercial relationship manager team by 15%-20% and be opportunistic over the next couple of years. We're up now over 10% in just three quarters. We are tracking loan production and pipelines of those hires. Through three quarters they've contributed $600 million of loan production and have a $1.5 billion pipeline. The most success we've seen is in Texas, led by Dan Strodel; they've expanded the sales force by 25% in Texas. As we work through the next few quarters, we expect the Southeast to continue to pick up on hiring. To be able to produce $600 million from the new team, I feel like they've hit the ground running.
Okay. Very helpful. Then maybe just one. I hear you on the return of the 40%-60% total payout ratio. I did notice that cash to assets is low, I think around 2.5%. Any concerns around the ability to fund ongoing buybacks? Obviously nice to see the dividend increase. Thanks.
Yeah, Michael. No, there's nothing around that. Historically we run cash to assets in the 2%-3% range; that's normal. As it relates to buybacks, cash is not a limiting factor.
Cash is not a component of that decision-making process.
All right, I'll step back. Thanks, guys.
Your next question comes from the line of Janet Lee with TD Cowen. Your line is open. Please go ahead.
Good morning.
Good morning.
Good to see your deposit costs being relatively stable. Are you suggesting that your NIM guide is assuming deposit costs increase a little bit from here, or stay relatively stable through year-end? Just want to clarify your comments there.
Sure. We think deposit costs will move up a little over the rest of the year, depending on how long rates stay flat. With growth, incremental deposit cost will be marginally higher, which over time adds to deposit costs. This past quarter we also had repricing of the old book. I would expect deposit costs to move up a little; it's within our guidance and can be offset by repricing of other assets, which is why we get stable NIM.
Right. If rates hike, does NIM have an upward bias or could it come in at the high end if we get a hike? Is that a fair assumption?
It's a good question. Our interest rate position is asset sensitive. If the Fed hikes 25 basis points but the curve doesn't change materially, it's probably reasonably neutral. If everything moves up 25 or 50 basis points across the curve, that's accretive to NIM. We get asset repricing and a better curve in that scenario. If there's a bear flattener, it's probably a wash. If there's a significant upward shock, that would be positive for NIM.
Thank you. If I can squeeze in one more: fee income trajectory has been down the past couple of quarters. How should we think about the growth trajectory here, and where do you see the most upside in terms of growth? What's a good growth rate for fee income in 2026 and perhaps beyond?
On page 12 we summarize our non-interest income over the last four quarters; it's slightly bumpy. The $97 million this quarter was 57 basis points of assets. Our guide remains 55-60 basis points. Year-over-year, second quarter is up 11%, much of that because of correspondent revenue growth. I would stick with 55-60 basis points as the right number. As we grow assets, non-interest income should grow, and from a percentage perspective, expect us somewhere in the middle of that range. No change in guidance.
Correspondent banking: is it relatively stable based on what you're seeing in the markets?
That's right. We've guided to $25 million gross a quarter; last quarter was $24.4 million and this quarter $24.8 million. Things can change relative to the curve, but right now we have a pretty good run rate and feel good about it.
Got it. Thank you.
Your next question comes from Gary Tenner with D.A. Davidson. Your line is open. Please go ahead.
Thanks. Good morning. Wanted to ask a follow-up on the components of loan growth in the back half of the year, particularly in the construction segment, which was obviously a pretty significant contributor. Does the comment about commercial real estate payoffs extend to construction, or should we assume that we're in a phase right now where you had this build of commitments to construction that are going to continue to fund up and drive net growth there for the next several quarters?
Gary, construction is down about 10% from this time last year. We saw an increase this quarter, driven by owner-occupied construction projects for C&I clients and some multifamily construction. We have a number of planned payoffs of multifamily in the back half of 2026; that's part of the normal cycle and will pay off on schedule. We expect pickup in C&I areas in the back half, while planned CRE payoffs will occur. Some C&I pay-downs this quarter were seasonal, including energy clients who, with high oil prices, have strong cash flows and have been paying down lines, and reductions in capital call lines. We think that business will pick back up in the back half. Overall our guidance remains mid to high single digit loan growth and could be on the higher end.
Got it. Thanks. Just a question about the allowance. If you look over the past five quarters since Q1 last year, the allowance is down 32 basis points. The allowance to loans is down 30 basis points to 130 basis points. What's the glide path you see for this given a positive economic environment? Where do you see this trending the next few quarters?
Gary, absent significant changes in the Moody's expectations for unemployment, CRE price index, and other loss drivers that impact the model, we expect the recent downward trend to continue. We've seen downward pressure from migration of loans from purchase credit deteriorated to non-PCD loans, as PCD loans carry a higher reserve. On the other hand, higher rates have put slight upward pressure because prepayment models show slowing, which impacts reserves. Our provisioning this quarter was primarily for loan growth. Regarding scenario weightings, we model three scenarios and typically weighted them 40-30-30. About a year ago we moved to a more pessimistic weighting and have been at 40-20-40 for the last few quarters. Over time we expect to revert to 40-30-30, but given uncertainty in the economy, including geopolitical issues, we've elected to be slightly more conservative. So absent a big change in the economic forecast, we see slight downward pressure from here.
Thanks. Appreciate it.
Your next question comes from the line of Anthony Elian with JPMorgan. Your line is open. Please go ahead.
Hi, everyone. On deposit costs, can you give us a bit more color on what you're seeing on competition? I think last quarter you mentioned you saw more competition towards the end of the quarter and that new money rates started in the 2.40% range and ended at 3%. Is that still a dynamic you're seeing?
Anthony, an update on those statistics: this quarter we raised a little over $470 million in new money at an average of 2.68%. The trend toward the end of last quarter has calmed, and we're at about 2.68% on new money. On the retail side, we had about $1.1 billion in new and renewed CDs last quarter; the average rate on renewals was 3.52%, compared with 3.69% in Q1. So retail new money and CD rates have calmed a bit from earlier volatility.
On correspondent, in the past you've talked about initiatives and products in the pipeline that could drive an increase in that revenue stream. Could you give us an update on those products and timing for a lift from that business? Thank you.
Sure. We have a few things in process. One is commodity hedging, which extends our energy business; we're in testing and ensuring risk controls are in place. I would characterize that as a 2027 event. We also have FX initiatives for commercial clients that are targeted for a 2027 go-live. We're testing, but 2027 is the likely timing. There won't be any significant change to guidance this year; as we get into the fourth quarter, we'll be able to provide better timing for 2027 initiatives.
Thank you.
Your next question comes from the line of Ben Gerlinger with Citigroup. Your line is open. Please go ahead.
Hi. I know you guys have had really good loan growth production from hirings and legacy team members as well. I was curious, have payoffs slowed more than what you're anticipating, largely from the merger or in Texas? Just trying to think about the pace of growth or the dynamics, considering one is filling the bucket and one is emptying. How has that emptying part trended relative to past expectations?
Yeah. The Texas-Colorado franchise went through a conversion a year ago and was inwardly focused and distracted, so production and payoffs weren't providing much growth then. Now they're growing at the same rate as the rest of the Southeast franchise, around 10%-11% excluding specialty lines. This quarter we actually saw more payoffs than prior quarters, tied to C&I activity such as energy and capital call lines; we don't view that as a trend. We expect that business to pick back up in the back half of the year.
Got it. Okay. That's helpful. I wanted to dovetail off Anthony's question on correspondent banking. Is the efficiency ratio for that business uniquely different than the bank? If that grows, should we expect a higher pace of expenses, albeit equal?
That's correct. Some portions, like fixed-income processing, have a higher efficiency ratio, perhaps in the 70% range, while other products are closer to 40%. As we grow that revenue base, I would expect to grow the expense base, but not at a one-to-one rate; roughly speaking, you might grow expenses at half the growth rate of the revenue for a simple estimate. It's not capital-intensive, and even with a higher efficiency ratio it's an attractive business.
Right. No issues there. Just wanted to double-check, considering your initiatives are 2027. I appreciate the time. Thank you, guys.
Thank you.
Your next question comes from the line of David Chiaverini with Jefferies. Your line is open. Please go ahead.
Hi. Thanks for taking the questions. I had a follow-up on NIM. Appreciate slide 11 laying out the accretion income. With the downward trend in accretion income and you're holding the NIM guide flat at 3.75%-3.80%, it implies the core NIM should show a nice increase. Can you talk about the drivers behind that core NIM expansion?
Sure. Your point is well taken. As accretion moves down, loan repricing moves in, shifting from reported to core NIM. We have about $6 billion of loans that will reprice within the next year or so; depending on floating or fixed, we estimate roughly 45-50 basis points of repricing on that book. Also about $1 billion of securities will pay back and can be reinvested at higher yields, depending on the curve. As legacy loans from 2021 and 2022, many five-year loans, roll off at coupons in the 3%-4% range and are repriced in the sixes, that shifts the bucket from lower accretion to higher core yield.
Very helpful. Thank you. You touched on my follow-up. I was going to ask about the rate on new production. It sounds like it's in the sixes.
Yes. Part of it depends on floating-fixed mix. This quarter our loan production was 76% floating and 24% fixed. We've increased the floating portion of the overall loan portfolio: a year ago 32% of loans were floating, now 38%. That gives us more interest rate sensitivity in a positive way and makes our earnings stream more stable if rates go up.
Very helpful. Thank you.
Your next question comes from the line of Dave Bishop with Hovde Group. Your line is open. Please go ahead.
Good morning. Following up on comments about some of the strongest growth, I think you mentioned Virginia and Alabama. As I look at the branch map, there's not as much critical mass there. Are those regions where you may target or circle back for additional banker lift-outs? Any new markets you might be targeting for additional expansion?
We like the markets we're in and want depth and density in those markets. If Bobby Cowgill, who runs Virginia for us, has opportunities to expand and recruit commercial RMs, we'll do it. We built out Hampton Roads a few years ago and have had success. We did expand to Nashville with a loan production office about a year to year and a half ago with Cameron Wells, and he's doing well. No new markets on the horizon; we want to build depth and density in current markets.
Got it. Appreciate the call.
Your next question comes from the line of Samuel Varga with UBS. Your line is open. Please go ahead.
Hey, good morning. Just wanted to go back to the balance sheet discussion a little bit. This quarter with the loan growth you had, the loan-to-deposit ratio went up just north of 90%. With cash down, there's less opportunity to not pair fund with deposits. If loan growth outpaces deposits, where can that loan-to-deposit ratio go? What sort of governor do you have on that?
We have been conservative on loan-to-deposit. Early in a cycle you might start the ratio in the mid-70s; later in a cycle you typically move into the 90% range. We would likely let it go as high as about 92%, but not much higher. That's part of the guide: we'll fund the loan portfolio with deposits. As new bankers bring in customers, over time deposit growth will help fund loans. That's how to view our funding approach.
Great. Thank you, Steve. Then on the competitive landscape, in Texas and Colorado, are you seeing more pressure from the deposit side or the loan spread side?
I would say it's more on the deposit side in those markets. For example, CD rates in Texas and Colorado are a bit higher than in the Southeast, roughly 25 basis points higher, so we feel more pressure on deposit pricing in those markets.
Great. Thanks for taking my questions.
We have reached the end of the Q&A session. I will now turn the call back over to John Corbett for closing remarks.
All right. Thank you. I just want to end by thanking our team. We're executing successfully on the four goals we laid out last year. SouthState's financial performance is among the top quartile in our peer group. The plan's working, and as you've heard throughout the call today, our guidance from prior quarters is basically unchanged. I want to thank you for joining us this morning; feel free to reach out with any follow-up questions, and I hope you have a great day.
This concludes today's call. Thank you for attending. You may now disconnect.