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Item 1.01 | | | Entry into a Material Definitive Agreement |
On November 15, 2021, SouthState Corporation (the “Company”) entered into an amendment and restatement to its Credit Agreement (the “Agreement”) with U.S. Bank National Association (the “Lender”) dated October 28, 2013. The Agreement provides for a $100.0 million unsecured line of credit to the Company. The maturity date of the Agreement is November 14, 2022, provided that the Agreement may be extended subject to the approval of the Lender.
Borrowings by the Company under the Agreement will bear interest at a rate per annum equal to 1.40% plus monthly reset term SOFR Rate, adjusted for any reserve requirement and any subsequent costs arising from a change in law, as described in further detail in the Agreement. For a period of not less than 30 consecutive days during each 12-month period of the Agreement, the Company must prepay so much of the aggregate outstanding principal amount of loans as is necessary to reduce the aggregate outstanding amount of loans to an amount equal to zero dollars at all times during such 30-day period. The Company currently has no outstanding loans under the Agreement.
Under the terms of the Agreement, each quarter, the Company is required to pay an unused commitment fee in an amount equal to the “Commitment Fee Percentage” times the difference between the outstanding revolving loan commitments and the average daily principal balance of loans outstanding under the Agreement. As the average balance outstanding increases, the unused commitment fee decreases. The applicable Commitment Fee Percentage shall be, for any fiscal quarter (or portion thereof), (a) 0.35%, if the average aggregate balance of certain U.S. Bank convertible money market deposit account and eurodollar investments of the Company and its bank subsidiaries for such fiscal quarter (the “Investment Balance”) is less than $50.0 million, (b) 0.15%, if the Investment Balance for such fiscal quarter is equal to or greater than $50.0 million but less than $100.0 million, and (c) 0.00%, if the Investment Balance for such fiscal quarter is equal to or greater than $100.0 million.
The Agreement contains customary representations, warranties, covenants and events of default, including, without limitation, financial covenants requiring that the Company (i) maintain a total risk-based capital ratio not less than 11.00% as of the last day of any fiscal quarter, (ii) maintain a “well-capitalized” status at all times, (iii) not permit the Company’s non-performing assets to tangible capital ratio to exceed 12.00%, (iv) with respect to the Company, maintain a Fixed Charge Coverage Ratio of not less than 1.35 to 1, at the end of each fiscal quarter, and (v) at all times remain in Material compliance with all regulatory rules and requirements of or imposed by the OCC and all other Regulatory Authorities (vi) with respect to the Company, at all times maintain liquidity of not less than $25.0 million. In addition, the Agreement includes a covenant with respect to the Company that limits subordinated holding company indebtedness, subject to certain exceptions, including a basket for up to $600.0 million of such indebtedness.
Capitalized terms used in this Form 8-K but not defined herein shall have the meanings ascribed to them in the Agreement. The foregoing summary of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
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Item 2.03 | | | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The relevant disclosure set forth in Item 1.01 above is incorporated herein by reference in response to this Item 2.03.
