DEF: SouthState Corp Seeks Shareholder Approval for Florida Re-domiciliation, Executive Pay

SouthState Corporation is asking shareholders to vote on key proposals including a change in domicile from South Carolina to Florida, executive compensation, and the election of directors at the upcoming annual meeting.

Summary

• SouthState Corporation is holding its Annual Shareholders Meeting on April 23, 2025, to vote on several key proposals.
• Shareholders will elect 15 directors, approve executive compensation in an advisory vote, and approve a change in domicile from South Carolina to Florida.
• They will also ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025.
• The Board of Directors recommends voting FOR all company proposals.
• The company highlights its 2024 accomplishments, including the acquisition of Independent Bank Group, Inc., which created a $65 billion regional bank.
• SouthState reported net income of $535 million, or $6.97 per diluted share, and adjusted net income of $553 million, or $7.21 per diluted share.
• The company achieved a return on average tangible common equity of 15% and an adjusted return on average tangible common equity of 15.5%.
• Tangible book value per share increased by 10.3% to $51.11 as of December 31, 2024.
• SouthState's stock value increased by 18% in 2024, outperforming the Keefe Bruyette & Woods Regional Bank Index.
• The company experienced 4.7% annualized loan growth and 2.7% annualized deposit growth, with a net interest margin of 3.43% in 2024.
• Employee engagement remained high at 83%, compared to 75% in the financial services industry.
• SouthState was recognized as one of America's best midsize companies by TIME and a best bank to work for by American Banker.
• The company's executive compensation program is performance-based, aligning executive pay with shareholder returns and discouraging excessive risk-taking.
• The average tenure of independent director nominees is 3.8 years, with 87% being independent, 27% women, and 13% ethnically diverse.
• The company has a formal director succession process focused on diversity and relevant skills.
• The Board has waived the retirement age for Douglas J. Hertz, the Independent Board Chair, for a one-year period.
• The company has a Compensation Recoupment Policy compliant with SEC and NYSE rules.
• The company's Risk Appetite Statement is set at an overall Moderate level.
• The company's Chief Risk Officer reports to both the CEO and the Board Risk Committee.
• The company has a Corporate Stewardship Council and publishes a Corporate Social Responsibility Report.
• The company is proposing a change in domicile from South Carolina to Florida, believing the FBCA is more developed and robust.
• The company believes the change in domicile will provide greater flexibility in mergers and acquisitions.
• The company intends for the Domicile Merger to qualify as a reorganization under Section 368(a)(1)(F) of the Code.
• The company's CEO pay ratio is 90.1 to 1, with the CEO's annual total compensation at $6,221,068.46 and the median employee's at $69,066.80.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic growth initiatives, indicating a favorable investment perspective.

Positives

• Acquisition of Independent Bank Group, Inc. expands SouthState's presence and asset size.
• Strong financial performance in 2024, including increased net income and tangible book value per share.
• Outperformance of the Keefe Bruyette & Woods Regional Bank Index demonstrates strong stock performance.
• High employee engagement indicates a positive work environment.
• Recognition as a top company by TIME and American Banker enhances the company's reputation.
• Performance-based executive compensation aligns management interests with shareholder value.
• Formal director succession process ensures a diverse and skilled Board.
• The company has a Compensation Recoupment Policy compliant with SEC and NYSE rules.
• The company has a Corporate Stewardship Council and publishes a Corporate Social Responsibility Report.

Risks

• The company's Risk Appetite Statement is set at an overall Moderate level.
• The company's Chief Risk Officer reports to both the CEO and the Board Risk Committee.
• The company has a Corporate Stewardship Council and publishes a Corporate Social Responsibility Report.

Future Outlook

The company aims to leverage opportunities to provide a best-in-class customer experience while maintaining soundness, profitability, and growth.

Management Comments

• At SouthState, our goal is to take advantage of opportunities to provide a best-in-class customer experience that is balanced by our responsibility to do the right thing.
• We want to provide freedom within a framework: being nimble with accountability.

Industry Context

The document references the Keefe Bruyette & Woods Regional Bank Index (KBW) as a benchmark for performance, indicating SouthState's focus on competing within the regional banking sector.

Comparison to Industry Standards

• The document compares SouthState's employee engagement of 83% to the financial services industry average of 75%.
• The document compares SouthState's performance to the Keefe Bruyette & Woods Regional Bank Index (KBW).
• The document lists a peer group of banks with assets ranging from $13.2 billion to $131.8 billion, market capitalization of $1.8 billion to $16.2 billion and revenue of $521 million to $4.7 billion.

Corporate Governance

Related Party Transactions

• The Bank has loan and deposit relationships with some of the directors of the Company and the Bank and loan, deposit, and fee-for-service relationships with some of the companies with which the directors are associated, as well as with some members of the immediate families of the directors.
• Mr. Corbett, our Chief Executive Officer, is the brother-in-law of Mr. Young, our Chief Strategy Officer.

Stakeholder Impact

• Shareholders: Potential for increased value through strategic growth and efficient operations.
• Employees: Positive work environment and opportunities for growth.
• Customers: Access to a broader range of services and a best-in-class customer experience.
• Communities: Continued investment and support.

Next Steps

• Shareholders to vote on the proposals at the Annual Meeting on April 23, 2025.
• If approved, the company will proceed with the re-domiciliation to Florida.

Key Dates