Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) (“SMBC”), the parent
corporation of Southern Bank, and Southern Missouri Bancshares,
Inc. (“Bancshares”), the parent corporation of Southern Missouri
Bank of Marshfield, today announced the signing of a definitive
merger agreement whereby SMBC will acquire Bancshares in a stock
and cash transaction.
Bancshares operates two locations in Marshfield, Missouri. At
June 30, 2017, Bancshares’ consolidated assets were $91.6 million,
including loans, net, of $69.1 million, while deposits totaled
$73.6 million.
SMBC reported consolidated assets at June 30, 2017, of
approximately $1.7 billion, including loans, net, of $1.4 billion,
and total deposits of $1.5 billion. On a pro forma basis, following
the acquisition, the combined company’s total assets will be
approximately $1.8 billion, with total loans, net, of $1.5 billion,
and total deposits of $1.5 billion. The combined company will
operate 43 locations in Missouri, Arkansas, and Illinois.
Subject to adjustment for Bancshares capital at closing,
Bancshares shareholders will receive 9.0393 shares of SMBC common
stock and $95.82 in cash for each share of Bancshares common stock.
Based on the average closing price of $31.80 per share for SMBC
stock over the most recent 20 trading days ending on and including
the fifth trading day prior to execution of the definitive merger
agreement, the deal is valued at approximately $15.1 million.
“We are excited to add Marshfield to the communities we serve in
southwest Missouri,” stated Greg Steffens, President and CEO of
SMBC. “Southern Missouri Bank of Marshfield is an organization
we’ve been familiar with for some time, and we have a great deal of
respect for the way they go about their core business and their
dedication to their community. We’ve also been familiar with the
Marshfield market for some time. We are currently already serving
some significant relationships in the community, we have key
personnel who are intimately familiar with this part of the
Springfield, Missouri, Metropolitan Statistical Area (MSA), which
has been a key to our company’s growth over recent years, and we
believe this acquisition will be very helpful to our continued
solid growth in that market.”
“Our core group of shareholders organized and started the bank
in 1997,” noted Kent Hyde, Chairman of Bancshares. “Marshfield and
the surrounding communities have been very good to us. We have had
numerous opportunities in the past few years where other banks were
interested in partnering with our organization. We believe Southern
Bank is the best fit for our community, employees, and
shareholders. They started as a local bank in a small community and
have not forgotten this special way of doing business.”
“Our primary motivation for partnering with Southern Missouri
Bancshares is to gain the opportunity to serve an outstanding
community through our community banking business model, which we
believe will perform very well here” Steffens added. “Each
strategic partnership we evaluate offers different opportunities to
us. Some, like this one in the Marshfield community, offer
intangibles that don’t readily translate into financial metrics
that fully explain the value of the partnership for us, but we are
no less confident in the outlook in this situation.” The deal value
equates to 140% of Bancshares’ capital, as adjusted, at closing,
represents a 7.0% premium to core deposits, and is a multiple of
13.3 times Bancshares’ projected earnings over the twelve months
ended December 31, 2018, including fully phased-in cost synergies.
Tangible book value per common share is expected to be diluted by a
nominal amount at closing, with a projected earnback period of
approximately one year, based on the crossover method. The
transaction is anticipated to be accretive to earnings per share
beginning in calendar 2019, though the improvement is nominal.
SMBC and Bancshares anticipate completion of the transaction in
the first calendar quarter of 2018, subject to satisfaction of
customary closing conditions, including regulatory and shareholder
approvals.
Lowther Johnson Attorneys at Law, LLC served as legal advisor to
Bancshares, while Silver, Freedman, Taff & Tiernan LLP served
as legal advisor to SMBC.
Forward-Looking Information:
Except for the historical information contained herein, the
matters discussed in this press release may be deemed to be
forward-looking statements that are subject to known and unknown
risks, uncertainties, and other factors that could cause the actual
results to differ materially from the forward-looking statements,
including: the requisite regulatory and shareholder approvals for
this acquisition might not be obtained, or other conditions to
completion of the transaction might not be satisfied or waived;
expected cost savings, synergies and other benefits from SMBC’s
merger and acquisition activities, including this acquisition and
SBMC’s other acquisitions, might not be realized within the
anticipated time frames or at all, and costs or difficulties
relating to integration matters, including but not limited to
customer and employee retention, might be greater than expected;
the strength of the United States economy in general and the
strength of the local economies in which we conduct operations;
fluctuations in interest rates and in real estate values; monetary
and fiscal policies of the Board of Governors of the Federal
Reserve System and the U.S. Government and other governmental
initiatives affecting the financial services industry; the risks of
lending and investing activities, including changes in the level
and direction of loan delinquencies and write-offs and changes in
estimates of the adequacy of the allowance for loan losses; our
ability to access cost-effective funding; the timely development of
and acceptance of our new products and services and the perceived
overall value of these products and services by users, including
the features, pricing and quality compared to competitors' products
and services; fluctuations in real estate values and both
residential and commercial real estate market conditions; demand
for loans and deposits in our market area; legislative or
regulatory changes that adversely affect our business; results of
examinations of us by our regulators, including the possibility
that our regulators may, among other things, require us to increase
our reserve for loan losses or to write-down assets; the impact of
technological changes; and our success at managing the risks
involved in the foregoing. Any forward-looking statements are based
upon management’s beliefs and assumptions at the time they are
made. We undertake no obligation to publicly update or revise any
forward-looking statements or to update the reasons why actual
results could differ from those contained in such statements,
whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the
forward-looking statements discussed might not occur, and you
should not put undue reliance on any forward-looking
statements.
No Offer or Solicitation:
This press release is being provided for informational purposes
only and does not constitute (i) an offer to purchase, nor a
solicitation of an offer to sell, subscribe for or buy any
securities, (ii) an offer to exchange any securities or (iii) the
solicitation of any vote for approval of any transaction. There
shall not be any offer, solicitation, sale or exchange of any
securities in any state or other jurisdiction in which such offer,
solicitation, sale, or exchange is not permitted.
Additional Information:
SMBC will file a registration statement on Form S-4 with the SEC
in connection with the proposed transaction. The registration
statement will include a proxy statement of Bancshares, that also
constitutes a prospectus of SMBC, which will be sent to the
shareholders of Bancshares. Bancshares shareholders are advised to
read the proxy statement/prospectus when it becomes available
because it will contain important information about SMBC,
Bancshares, and the proposed transaction. When filed, this document
and other documents relating to the merger filed by SMBC can be
obtained free of charge from the SEC’s website at www.sec.gov.
These documents also can be obtained free of charge by accessing
SMBC’s investor relations website at
http://investors.bankwithsouthern.com, then navigating to “SEC
Filings.” Alternatively, these documents, when available, can
be obtained free of charge from SMBC upon written request to
Southern Missouri Bancorp, Inc., Attn: Investor Relations, 2991 Oak
Grove Road, Poplar Bluff, Missouri 63901 or by calling (573)
778-1800 or from Bancshares upon written request to Southern
Missouri Bancshares, Inc., Attn: Investor Relations, 1292 Banning
Street, Marshfield, Missouri 65706.
Participants in this
Transaction:
SMBC, Bancshares, and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from Bancshares’ shareholders in connection
with the proposed transaction. Information about the directors and
executive officers of SMBC may be found in the definitive proxy
statement of SMBC relating to its 2016 Annual Meeting of
Shareholders filed with the SEC by Southern Missouri on September
27, 2016. This definitive proxy statement can be obtained free of
charge from the sources indicated above. Information about the
directors and executive officers of Bancshares will be included in
the proxy statement/prospectus when filed with the SEC. Additional
information regarding the interests of these participants will also
be included in the proxy statement/prospectus regarding the
proposed transaction when it becomes available.
Matt Funke, CFO
573-778-1800
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