0001649749-26-000040
SEC filingStrong quarter driven by the Southern States merger, with net income up 46% and margin expansion from higher loan yields and lower deposit costs.
Net income for the first quarter of 2026 was $57.5 million, a 46% increase from $39.4 million in the prior-year quarter, primarily driven by the Southern States merger. The merger contributed higher average balances of loans held for investment and an expanded deposit base, which supported net interest income growth. Diluted earnings per share rose to $1.10 from $0.84, reflecting the improved profitability.
Net interest margin improved as higher loan yields and a decline in the average cost of interest-bearing deposits more than offset the impact of lower yields on securities. The company's focus on growing noninterest-bearing and low-cost deposits, as part of its liquidity management strategy, helped reduce funding costs. The Southern States merger also contributed to a larger, lower-cost deposit base.
Total noninterest income increased due to higher other income, service charges on deposit accounts, and investment services and trust income, partially offset by a decline in mortgage banking income. The increase in service charges was primarily attributable to the expansion of the branch network from the Southern States merger. Noninterest expense increased, reflecting merger-related costs and higher headcount from the acquisition, though specific expense figures are not disclosed in the authoritative packet.
Commercial and industrial loans, which are typically made to small and medium-sized businesses for working capital and operating needs, are generally repaid from operating cash flows and collateralized by inventory, accounts receivable, equipment, and personal guarantees. The company's credit quality remains stable, supported by disciplined underwriting and the diversified loan portfolio.
Management uses risk-based capital ratios to assess capital quality and believes these measures are useful for investors. The company expects to maintain adequate liquidity to meet client cash flow requirements. Historical results are not necessarily indicative of future performance, but the Southern States merger positions the company for continued growth in its markets.