Polk County’s SouthState completes $457 million sale of branches

SouthState Corp. has closed on a $457 million sale of 165 branches in six states.

The Polk County-based bank announced the closing in a Securities & Exchange Commission filing Thursday. The commercial real estate firm JLL, which advised SouthState on the deal, also issued a news release.

The deal to sell the 165-branch portfolio to the New York investment firm Blue Owl Real Estate Capital was completed Feb. 28.

The branches are spread out across Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. As part of the agreement, SouthState is leasing back the locations, signing 15-year, triple net leases on each. The leases will include three five-year renewal options and 2% annual rent increases.

SouthState, according to the SEC filing, agreed not to close any branch or exit any market included in the sale and will continue to operate the properties as bank branches with the same service offerings.

The deal, the bank says in the filing, “resulted in a pre-tax gain of approximately $229 million, after transaction related expenses.”

“This structure unlocks significant unrealized capital on our balance sheet, further enhancing our balance sheet strength and optionality, while the long-term leases solidify our commitment to our branch footprint across all geographies,” SouthState’s CEO John Corbett says in the JLL news release.

The deal was originally announced in January in an SEC filing as the sale of 170 branches. A SouthState spokesperson says in an email that "we were not certain at that point exactly which locations we would agree upon with the purchaser."

Winter Haven-based SouthState was created in 2020 when CenterState Bank and South State Bank merged. According to the Federal Deposit Insurance Corp., it currently operates 371 branches in eight states. It had $46.3 billion in assets as of Dec. 31.