South Carolina Banks

South Carolina banks posted a 1.01% return on assets in Q1 2026, up 5 basis points from 0.95% in Q4 2025 and 20 basis points from 0.81% in Q1 2025, the highest ROA in the series shown. The year-over-year improvement of 20 basis points outpaced the quarter-over-quarter gain of 5 basis points, indicating the profitability expansion is decelerating but remains positive. The cohort's ROA trails the national benchmark of 1.20% by 19 basis points, a gap that reflects the state's banking mix and competitive dynamics relative to the broader FDIC-insured universe.

The profitability improvement is driven by two related forces. The efficiency ratio fell to 65.70% in Q1 2026 from 68.53% in Q4 2025, a 2.83 percentage point improvement, and from 71.45% a year earlier, a 5.75 percentage point improvement. The year-over-year pace of efficiency gains is accelerating, suggesting revenue growth is outpacing expense growth at an increasing rate. Net interest margin held stable at 3.64% in Q1 2026, up 3 basis points from 3.61% in Q4 2025 and 18 basis points from 3.46% in Q1 2025. The quarter-over-quarter NIM expansion is minimal, while the year-over-year gain of 18 basis points indicates the margin-widening cycle is decelerating. The cohort's NIM sits 18 basis points below the national benchmark of 3.82%, compressed by the funding-cost dynamics reflected in the NIB share data.

The efficiency ratio shows meaningful specialization divergence within the FDIC banking universe. Mortgage specialists posted a 76.96% efficiency ratio, 12.81 percentage points above the national 64.14%, while Credit Card specialists achieved 54.43%, 9.71 percentage points below national. Agricultural specialists at 59.51% and International specialists at 57.89% also outperformed the national benchmark. The South Carolina cohort's 65.70% efficiency ratio sits 1.55 percentage points above the national 64.14%, suggesting the state's banking mix skews toward higher-cost business models relative to the national average. If the current quarterly pace of efficiency improvement (2.83 percentage points per quarter over the two quarters shown) continues, the cohort would reach the national benchmark by Q2 2026.

South Carolina banks' asset growth accelerated to 6.34% year-over-year in Q1 2026 from 5.87% in Q4 2025, a 7.94 percentage point acceleration in the growth rate. Year-over-year, asset growth decelerated from 6.64% in Q1 2025 to 6.34% in Q1 2026, a 4.53 percentage point deceleration. The cohort's asset growth outpaces the national benchmark of 5.15% by 1.18 percentage points, indicating South Carolina banks are expanding balance sheets more aggressively than the broader FDIC-insured universe. The quarter-over-quarter acceleration signals renewed expansion momentum entering 2026, though the year-over-year deceleration suggests the longer-term growth trajectory is moderating.

Loan growth and deposit growth both accelerated quarter-over-quarter but decelerated year-over-year, creating a mixed growth profile. Loan growth accelerated to 7.06% year-over-year in Q1 2026 from 6.73% in Q4 2025, a 4.92 percentage point acceleration, but decelerated from 7.64% in Q1 2025, a 7.62 percentage point deceleration. Deposit growth accelerated to 5.44% year-over-year from 5.22% in Q4 2025, a 4.15 percentage point acceleration, but decelerated sharply from 7.16% in Q1 2025, a 24.04 percentage point deceleration. The mechanical relationship is clear: loan growth is outpacing deposit growth on a year-over-year basis (7.06% versus 5.44%), driving the loan-to-deposit ratio higher over the trailing twelve months. However, deposit growth is decelerating more sharply than loan growth when measured against the year-earlier baseline, suggesting the funding franchise is normalizing after a period of elevated deposit accumulation.

The growth profile shows no tier or specialization gradient data for the South Carolina cohort, but the national specialization mix provides context. Commercial banks, representing 56.1% of the FDIC-insured universe, posted 0.72% delinquency and 3.92% NIM, while Agricultural banks at 21.3% of the universe posted 0.63% delinquency and 3.84% NIM. The South Carolina cohort's 7.06% loan growth and 5.44% deposit growth both exceed national benchmarks of 6.20% and 5.02%, respectively, suggesting the state's banking mix is skewed toward higher-growth specializations or asset bands. If loan growth continues to outpace deposit growth at the current spread of 1.62 percentage points, the loan-to-deposit ratio will rise 1.62 percentage points annually, reaching the national benchmark of 76.38% within two years.

South Carolina banks' delinquency rate held stable at 0.33% in Q1 2026, down 2 basis points from 0.35% in Q4 2025 and effectively unchanged from 0.32% in Q1 2025 (a 0 basis point year-over-year change after rounding). The cohort's delinquency rate sits 37 basis points below the national benchmark of 0.70%, marking South Carolina banks as among the lowest-delinquency states in the FDIC-insured universe. The quarter-over-quarter stability and year-over-year stability signal credit quality remains strong and is not deteriorating despite accelerating loan growth.

Two related metrics reinforce the credit-quality picture. The nonperforming asset ratio held stable at 0.21% in Q1 2026, down 1 basis point from 0.23% in Q4 2025 and effectively unchanged from 0.21% in Q1 2025. The cohort's NPA ratio sits 30 basis points below the national benchmark of 0.51%, consistent with the delinquency gap. Tier 1 capital increased to 16.35% in Q1 2026 from 16.20% in Q4 2025, a 14 basis point improvement, and from 15.89% in Q1 2025, a 45 basis point improvement. The year-over-year capital build of 45 basis points outpaced the quarter-over-quarter gain of 14 basis points, indicating the capital accumulation is decelerating but remains positive. The cohort's Tier 1 capital sits 2.09 percentage points above the national benchmark of 14.26%, providing a substantial cushion above regulatory minimums.

The risk profile shows meaningful specialization divergence within the FDIC banking universe. Credit Card specialists posted 2.57% delinquency, 1.87 percentage points above the national 0.70%, while Agricultural specialists at 0.63% and Commercial specialists at 0.72% tracked closer to the national average. The South Carolina cohort's 0.33% delinquency rate is half the national benchmark, suggesting the state's banking mix skews away from higher-risk specializations such as Credit Card or Consumer lending. The combination of stable delinquency, stable NPA ratios, and rising Tier 1 capital indicates South Carolina banks are building capital buffers while maintaining strong credit quality, a risk profile that supports continued loan growth without material deterioration in asset quality.

South Carolina banks' loan-to-deposit ratio decreased to 73.64% in Q1 2026 from 73.98% in Q4 2025, a decline of 0.34 percentage points quarter-over-quarter. Year-over-year, the ratio increased 1.14 percentage points from 72.50% in Q1 2025. The cohort's LDR remains 2.74 percentage points below the national benchmark of 76.38%, signaling a more conservative lending posture relative to the broader FDIC-insured banking universe. The quarter-over-quarter decline reflects deposit franchise expansion outpacing loan deployment; the year-over-year increase suggests a gradual shift toward higher loan utilization over the trailing twelve months.

Two forces are driving the LDR move. Deposit growth accelerated to 5.44% year-over-year in Q1 2026 from 5.22% in Q4 2025, a 4.15 percentage point acceleration in the growth rate. Loan growth also accelerated, rising to 7.06% year-over-year from 6.73% in Q4 2025, a 4.92 percentage point acceleration. However, when measured against the year-earlier baseline, deposit growth decelerated from 7.16% in Q1 2025 to 5.44% in Q1 2026, a 24.04 percentage point deceleration, while loan growth decelerated from 7.64% to 7.06%, a 7.62 percentage point deceleration. The mechanical relationship is clear: deposit growth is slowing more sharply than loan growth on a year-over-year basis, compressing the LDR over the longer horizon but expanding it quarter-over-quarter as the funding base continues to grow.

Noninterest-bearing deposit share held stable at 20.84% in Q1 2026, up 5 basis points from 20.79% in Q4 2025 and down 15 basis points from 20.99% a year earlier. The cohort's NIB share sits 75 basis points below the national benchmark of 21.60%. The year-over-year decline in NIB share reflects a continuation of the industry-wide trend toward interest-bearing deposits, though the quarter-over-quarter stability suggests the shift may be plateauing. Net interest income as a percentage of revenue decreased to 0.17% from 0.49% in Q4 2025, a 0.32 percentage point decline, but increased 6 basis points from 0.11% a year earlier. The quarter-over-quarter decline warrants attention as a potential indicator of noninterest revenue volatility or seasonal factors affecting the revenue mix.