SouthState Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 13, 2025 (
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Item 1.01. | Entry into a Material Definitive Agreement. | ||||||
On January 8, 2025, SouthState Bank, N.A. (the “Bank”), a wholly-owned subsidiary of SouthState Corporation (the “Company”), entered into an agreement for the purchase and sale of real property (the “Sale Agreement”) with entities affiliated with Blue Owl Real Estate Capital LLC (collectively, “Blue Owl”), providing for the sale to entities affiliated with Blue Owl of approximately 170 bank branch properties owned and operated by the Bank, (the “Branches”) for an aggregate cash purchase price of approximately $475 million. The Branches are located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.
Under the Sale Agreement, the Bank has agreed, concurrently with the closing of the sale of the Branches, to enter into triple net lease agreements (the “Lease Agreements”) with entities affiliated with Blue Owl, pursuant to which the Bank will lease each of the Branches (the “Sale-leaseback Transaction”). Each of the Lease Agreements will have initial terms of fifteen years. Each Lease Agreement will provide the Bank with three consecutive renewal options of five years each. The Lease Agreements also will include a 2% annual rent escalation during the initial term and the renewal terms. The Bank will not close any Branches or exit any markets as part of the Sale-leaseback Transaction.
The Company expects the Sale-leaseback Transaction to close in the first quarter of 2025 and is subject to Blue Owl performing satisfactory due diligence on the Branches. The number of Branches sold, the aggregate purchase price, and the resultant financial impact are subject to revision during the due diligence period prior to closing, and could be higher or lower than the numbers cited herein.
The Sale-leaseback Transaction is expected to result in a pre-tax gain of approximately $225 million (after transaction related expenses). Aggregate first year rent payments under the Lease Agreements will be approximately $36 million pretax, with GAAP rent expense of approximately $40 million under lease accounting standards. This expense will be partially offset by the elimination of approximately $8 million in depreciation expense on the buildings. Additionally, the Company expects to earn higher interest income through the investment of the proceeds.
The Company anticipates using the proceeds generated from the Sale-leaseback Transaction for general corporate purposes. Additionally, the Company will continue to evaluate a potential sale of a portion of its securities portfolio that is currently in a loss position. If such a securities sale were consummated, the expected loss from such a sale could offset some or all of the gain realized on the Branch sales.
The foregoing description of the Sale Agreement and the Lease Agreements is a summary and is qualified in its entirety by the agreements, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
Cautionary Statement Regarding Forward Looking Statements
This communication contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and other related federal securities laws. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, including information regarding the expected timing of the closing of the Sale-leaseback Transaction, the number and the value of the Branches that will be sold in the Sale-leaseback Transaction, the risk the Sale-leaseback Transaction will not be consummated and expectations regarding the financial impacts of the Sale-leaseback Transaction. Such statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. The forward-looking statements that the Company makes are based on its current plans, estimates, expectations, ambitions and assumptions regarding the Sale-leaseback Transaction, the economy and other future conditions.
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Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are beyond the control of the Company. The Company’s actual results following the Sale-leaseback Transaction may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Many possible events or factors could affect the Company’s future financial results and performance and could cause those results or performance to differ materially from those expressed in the forward-looking statements. In addition to factors previously disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”), the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the due diligence results, the expenses that reduce the pre-tax net gain recognized on the sale of the Branches, changes in management’s assumptions, and material changes in interest rates.
These factors are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company’s results.
The Company urges you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company. As a result of these and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement may differ materially from the anticipated results expressed or implied in that forward-looking statement. Any forward-looking statement made in this communication or made by the Company in any report, filing, document or information incorporated by reference in this communication, speaks only as of the date on which it is made. The Company undertakes no obligation to update any such forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes that these assumptions or bases have been chosen in good faith and that they are reasonable. However, the Company cautions you that assumptions as to future occurrences or results almost always vary from actual future occurrences or results, and the differences between assumptions and actual occurrences and results can be material. Therefore, the Company cautions you not to place undue reliance on the forward-looking statements contained in this filing or incorporated by reference herein.
If the Company updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. Further information regarding the Company and factors which could affect the forward-looking statements contained herein can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/764038/000155837024002302/ssb-20231231x10k.htm), and its other filings with the SEC.
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules (or similar attachments) upon request by the SEC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SOUTHSTATE CORPORATION | ||
(Registrant) | ||
By: | /s/ William E. Matthews, V | |
Dated: January 13, 2025
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