SOUTHSIDE BANCSHARES INC 8-K

What Happened

• Southside Bancshares, Inc. (via its subsidiary Southside Bank) filed an 8-K on Feb. 20, 2026 disclosing a split-dollar life insurance agreement with CEO and President Keith Donahoe, effective Feb. 19, 2026. Under the agreement the Bank will own and be beneficiary of certain life insurance policies on Mr. Donahoe and is entitled to the policies’ cash surrender value plus portions of net death benefits above the amounts payable to Donahoe’s beneficiary.
• The filing also notes the Board acknowledged the upcoming retirement of director Michael J. Bosworth effective at the Company’s 2026 Annual Meeting on May 14, 2026, due to the Company’s mandatory age requirement. The Board approved reducing its size (and the Bank Board’s size) from 14 to 13 members effective at that meeting.

Key Details

• Effective date of the Split Dollar Agreement: February 19, 2026; 8-K filed Feb. 20, 2026.
• Death benefit while employed: beneficiary receives $2,100,000 (adjusted annually for inflation).
• Post-termination death benefit (after meeting vesting conditions): beneficiary may receive 1.5× CEO’s final-year base salary, capped at the net death proceeds.
• After retirement the Bank will pay an annual gross-up bonus to the CEO to cover federal income tax on the economic benefit and the gross-up itself.
• Director Michael J. Bosworth has served on the Company Board since 2017; his retirement is not due to any disagreement with management or the Board.

Why It Matters

• Compensation and benefits: The split-dollar arrangement creates defined insurance-related benefits for the CEO and a continuing tax-related payment obligation (the gross-up) after retirement, which could affect future compensation expense for the Bank.
• Balance sheet/cashflow implications: The Bank will own the policies and is entitled to cash surrender value and portions of death proceeds—this may represent an asset (and potential future cash receipt) and a contingent obligation depending on policy performance and timing.
• Governance: The scheduled director retirement and approved reduction in board size slightly change Board composition ahead of the 2026 Annual Meeting; the filing states the retirement is age-related and not a dispute.
• Investors should review Exhibit 99.1 (the Split Dollar Agreement) for full contract terms and monitor future disclosures for any related expense recognition or material changes.