Item 2.02 Results of Operations and Financial Condition
On April 23, 2020, CenterState Bank Corporation (NASDAQ: CSFL) (the "Company" or
"CenterState") issued a press release announcing certain financial results and
additional information. A copy of the press release is furnished with this Form
8-K.
CenterState and South State Corporation (NASDAQ: SSB) ("South State") will host
a joint conference call on Friday, April 24, 2020 at 10 a.m. (EST) to discuss
both companies' first quarter 2020 results. In light of the announced merger,
CenterState and South State have decided to host a joint conference call in
order to facilitate the sharing of information that may be of interest to
investors in both companies. Investors may call in (toll free) by dialing (877)
506-9272 (passcode 10140091; host: Will Matthews, CFO).
Alternatively, individuals may listen to the live webcast of the presentation by
visiting the link at CenterState's website at www.centerstatebanks.com. An audio
replay of the live webcast is expected to be available by the evening of April
24, 2020 at CenterState's website located in the subsection "Presentations"
under the heading "News and Market Data."
In accordance with General Instruction F, the press release attached to this
Current Report on Form 8-K as Exhibit 99.1, shall not be deemed to be "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or otherwise subject to the liability of that section, and
shall not be incorporated by reference into any registration statement or other
document filed under the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
Item 7.01 Regulation FD Disclosure
On April 23, 2020, the Company also made available the presentation
("Presentation") prepared for use with the press release during the earnings
conference call on April 24, 2020. Attached hereto and incorporated herein as
Exhibit 99.2 is the text of that presentation.
The information contained in this Item 7.01 of this Current Report, including
the information set forth in the Presentation filed as Exhibit 99.2 to, and
incorporated in, this Current Report, is being "furnished" and shall not be
deemed to be "filed" for purposes of Section 18 of the Exchange Act, or
otherwise subject to the liability of that section, and shall not be
incorporated by reference into any registration statement or other document
filed under the Securities Act or the Exchange Act, except as shall be expressly
set forth by specific reference in such filing.
Item 8.01 Other Events
Second Quarter 2020 Shareholder Dividend
The Board of Directors of the Company declared a quarterly cash dividend on its
common stock of $0.14 per share. The dividend is payable on May 15, 2020 to
shareholders of record as of May 8, 2020.
Supplemental to the "Risk Factors" Section in the Company's 2019 Annual Report
and to the Item 1A in the 2019 Form 10-K
As a company operating in the financial services industry, the businesses and
operations of the Company may be adversely affected in numerous and complex
ways, including as a result of adverse economic conditions, natural and human
disasters or other international or domestic calamities, including the global
coronavirus pandemic.
The Company's businesses and operations are sensitive to general business and
economic conditions in the United States. Uncertainty about federal fiscal
monetary and related policies, the medium and long-term fiscal outlook of the
federal government, and future tax rates is a concern for businesses, consumers
and investors in the United States. Changes in any of these policies are
influenced by macroeconomic conditions and other factors that are beyond the
control of the Company.
In addition, adverse economic, social and political conditions in the United
States and in foreign countries, including adverse conditions resulting from
natural disasters, acts of terrorism, outbreaks of hostilities or other domestic
or international calamities, epidemics and pandemics, and other matters beyond
the control of the Company, and the government policy responses to such
conditions, could have an adverse effect on the businesses, financial condition,
results of operations, prospects and trading prices of the Company during the
time the proposed merger with South State is pending and the combined company
following the completion of the proposed merger.
The recent global coronavirus outbreak could harm the business, financial
condition and results of operations of the Company during the time the merger is
pending and the combined company following the completion of the merger. In
December 2019, a novel strain of coronavirus, COVID-19, was reported in Wuhan,
China. The coronavirus has since spread rapidly to other countries, including
the United States, and the World Health Organization formally declared the
coronavirus outbreak a pandemic in March 2020. Global health concerns relating
to the coronavirus pandemic have been weighing on the macroeconomic environment,
leading to lower interest rates, depressed equity market valuations, heightened
financial market volatility and significant disruption in banking and other
financial activity in the areas in which the Company operates and in a broad
range of industries in which the customers of the Company operate. The financial
performance of the Company generally, and in particular the ability of borrowers
to pay interest on and repay principal of outstanding loans and the value of
collateral securing those loans, as well as demand for loans and other products
and services that each company offers and whose success it relies on to drive
growth, is highly dependent upon the business environment in the primary
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markets in which it operates and in the United States as a whole. Unfavorable
market conditions and uncertainty due to the coronavirus pandemic may result in
a deterioration in the credit quality of borrowers, an increase in the number of
loan delinquencies, defaults and charge-offs, additional provisions for loan
losses, adverse asset values of the collateral securing loans and an overall
material adverse effect on the quality of the loan portfolio of the Company and
the combined company following the completion of the proposed merger with South
State. In addition, following the coronavirus outbreak in December 2019 and
January 2020, market interest rates have declined significantly. On March 3,
2020, the Federal Open Market Committee (''FOMC'') reduced the target federal
funds rate by 50 basis points to 1.00% to 1.25%. Subsequently on March 16, 2020,
the FOMC further reduced the target federal funds rate by an additional 100
basis points to 0.00% to 0.25%. These reductions in interest rates, and
continued fluctuations in the interest rate environment as a result of changes
in monetary policies of the Federal Reserve Board, including in connection with
efforts to address the economic fallout from the coronavirus outbreak, could
have significant adverse effects on the earnings, financial condition and
results of operations of the Company during the time the proposed merger with
South State is pending and the combined company following the completion of the
proposed merger. The extent to which the coronavirus impacts the businesses of
the Company will depend on future developments in the United States and around
the world, which are highly uncertain and cannot be predicted, including new
information which may emerge concerning the severity of the coronavirus and the
actions required to contain and treat it, among others. There can be no
assurance that efforts by the Company during the time the proposed merger with
South State is pending and the combined company following the completion of the
proposed merger to address the adverse impacts of the coronavirus will be
effective. If the Company is unable to recover from a business disruption on a
timely basis, the Company's business, financial condition and results of
operations may be adversely affected. The coronavirus outbreak could also delay,
increase the costs of, or otherwise adversely affect, the integration of the
businesses of the two companies following the completion of the proposed merger
and make it more difficult for the combined company to realize anticipated
synergies and cost savings in the amounts estimated or in the time frame
contemplated or at all. All of these factors could be detrimental to the Company
and the combined company's businesses, and the interplay between these factors
can be complex and unpredictable.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
Exhibit Press Release dated April 23, 2020
99.1
Exhibit First Quarter 2020 Earnings Call Presentation
99.2
Exhibit Cover Page Interactive Data File (embedded within the
104 Inline XBRL document)
Cautionary Statements Regarding Forward-Looking Information
Information in this Current Report, other than statements of historical facts,
may constitute forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include, but are not
limited to, statements about the benefits of the proposed merger of South State
and CenterState, including future financial and operating results (including the
anticipated impact of the transaction on South State's and CenterState's
respective earnings and tangible book value), statements related to the expected
timing of the completion of the merger, the combined company's plans,
objectives, expectations and intentions, and other statements that are not
historical facts. Forward-looking statements may be identified by terminology
such as "may," "will," "should," "scheduled," "plans," "intends," "anticipates,"
"expects," "believes," "estimates," "potential," or "continue" or negatives of
such terms or other comparable terminology.
All forward-looking statements are subject to risks, uncertainties and other
factors that may cause the actual results, performance or achievements of South
State or CenterState to differ materially from any results expressed or implied
by such forward-looking statements. Such factors include, among others, (1) the
risk that the cost savings and any revenue synergies from the merger may not be
fully realized or may take longer than anticipated to be realized, (2)
disruption to the parties' businesses as a result of the announcement and
pendency of the merger, (3) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger agreement,
(4) the risk that the integration of each party's operations will be materially
delayed or will be more costly or difficult than expected or that the parties
are otherwise unable to successfully integrate each party's businesses into the
other's businesses, (5) the failure to obtain the necessary approvals by the
shareholders of South State or CenterState, (6) the amount of the costs, fees,
expenses and charges related to the merger, (7) the ability by each of South
State and CenterState to obtain required governmental approvals of the merger
(and the risk that such approvals may result in the imposition of conditions
that could adversely affect the combined company or the expected benefits of the
transaction), (8) reputational risk and the reaction of each company's
customers, suppliers, employees or other business partners to the merger, (9)
the failure of the closing conditions in the merger agreement to be satisfied,
or any unexpected delay in closing the merger, (10) the possibility that the
merger may be more expensive to complete than anticipated, including as a result
of unexpected factors or events, (11) the dilution caused by South State's
issuance of additional shares of its common stock in the merger, (12) a material
adverse change in the financial condition of South State or CenterState, (13)
general competitive, economic, political and market conditions, (14) major
catastrophes such as earthquakes, floods or other natural or human disasters,
including infectious disease outbreaks, including the recent outbreak of a novel
strain of coronavirus, a respiratory illness, the related disruption to local,
regional and global economic activity and financial markets, and the impact that
any of the foregoing may have on South State or CenterState and its customers
and other constituencies, and (15) other factors that may affect
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future results of CenterState and South State including changes in asset quality
and credit risk; the inability to sustain revenue and earnings growth; changes
in interest rates and capital markets; inflation; customer borrowing, repayment,
investment and deposit practices; the impact, extent and timing of technological
changes; capital management activities; and other actions of the Federal Reserve
Board and legislative and regulatory actions and reforms. Additional factors
which could affect future results of CenterState and South State can be found in
the registration statement on Form S-4, as amended, as well as South State's
Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K, and CenterState's Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case
filed with the SEC and available on the SEC's website at
http://www.sec.gov. CenterState and South State disclaim any obligation and do
not intend to update or revise any forward-looking statements contained in this
communication, which speak only as of the date hereof, whether as a result of
new information, future events or otherwise, except as required by federal
securities laws.
Important Information About the Merger and Where to Find It
South State has filed a registration statement on Form S-4 and an amendment
thereto with the SEC to register the shares of South State's common stock that
will be issued to CenterState's shareholders in connection with the
transaction. The registration statement contains a joint proxy statement of
South State and CenterState that also constitutes a prospectus of South State.
The registration statement on Form S-4, as amended, was declared effective by
the SEC on April 20, 2020, and South State and CenterState commenced mailing the
definitive joint proxy statement/prospectus to their respective shareholders on
or about April 20, 2020. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS (AS WELL
ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR
INCORPORATED BY REFERENCE INTO THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS)
BECAUSE SUCH DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED
MERGER AND RELATED MATTERS. Investors and security holders may obtain free
copies of these documents and other documents filed with the SEC by South State
or CenterState through the website maintained by the SEC at http://www.sec.gov
or by contacting the investor relations department of South State or CenterState
at:
South State Corporation CenterState Bank Corporation
520 Gervais Street 1101 First Street South, Suite 202
Columbia, SC 29201-3046 Winter Haven, FL 33880
Attention: Investor Relations Attention: Investor Relations
(800) 277-2175
(863) 293-4710
Participants in Solicitation
South State, CenterState and certain of their directors and executive officers
may be deemed participants in the solicitation of proxies from the shareholders
of each of South State and CenterState in connection with the
merger. Information regarding the directors and executive officers of South
State and CenterState and other persons who may be deemed participants in the
solicitation of the shareholders of South State or of CenterState in connection
with the merger is contained in the definitive joint proxy statement/prospectus
related to the proposed merger. Information about the directors and executive
officers of South State and their ownership of South State common stock can also
be found in South State's definitive proxy statement in connection with its 2019
annual meeting of shareholders, as filed with the SEC on March 6, 2019, and
other documents subsequently filed by South State with the SEC, including, but
not limited to, Amendment No. 1 to South State's Annual Report on Form 10-K/A,
as filed with the SEC on March 6, 2020. Information about the directors and
executive officers of CenterState and their ownership of CenterState common
stock can also be found in CenterState's definitive proxy statement in
connection with its 2020 annual meeting of shareholders, as filed with the SEC
on March 10, 2020, and other documents subsequently filed by CenterState with
the SEC. Additional information regarding the interests of such participants is
included in the definitive joint proxy statement/prospectus and other relevant
documents regarding the merger filed with the SEC.
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