Southern Missouri Bancorp, Inc. (NASDAQ: SMBC, "Southern
Missouri"), the parent corporation of Southern Bank, and Citizens
Bancshares Co. ("Citizens"), the parent company of Citizens Bank
and Trust Company, today announced the signing of a definitive
merger agreement whereby Southern Missouri will acquire Citizens in
a stock and cash transaction.
Citizens operates 14 banking centers throughout greater Kansas
City, St. Joseph and Northwest Missouri. At June 30, 2022,
Citizens’ consolidated assets were $1.0 billion, including net
loans of $465 million, while deposits totaled $879 million.
Southern Missouri reported total assets at June 30, 2022, of
$3.2 billion, including net loans of $2.7 billion, and total
deposits of $2.8 billion. On a pro forma basis, following the
acquisition, the combined company's total assets will approximate
$4.5 billion, with net loans of $3.3 billion, and total deposits of
$3.8 billion. The combined company will operate 65 locations in
Missouri, Arkansas, Illinois, and Kansas.
Greg Steffens, Chairman and Chief Executive Officer of Southern
Missouri, commented, “Southern Missouri Bancorp is very pleased to
announce this partnership with Citizens. Citizens’ franchise covers
excellent communities, including the Kansas City metropolitan area.
They have developed a strong deposit base and have a long history
of serving their customers, which will be a great addition to our
continued growth. Additionally, a presence in Kansas City helps
transform Southern Missouri into a more significant statewide
player in Missouri as we continue to build long-term shareholder
value.”
“This merger provides an opportunity for Citizens to join forces
with a growing organization, while remaining committed to community
banking,” said Roger Arwood, President and Chief Executive Officer
of Citizens. “We look forward to the opportunities and benefits
this combination will bring to our customers and communities, in
terms of a larger legal lending limit and broader branch coverage
across Missouri.”
Matt Funke, President and Chief Administrative Officer for
Southern Missouri, added, “In addition to the long-term strategic
importance of access to these new markets, Citizens provides us
with immediate benefits from their excellent deposit base, and a
concentration of short-duration instruments on the asset side of
their balance sheet. Their deposit base will help us to manage our
cost of funds, and the structure of their assets will help us
manage our interest rate risk in this environment of rapidly
changing interest rates.”
Under the terms of the merger agreement, unanimously approved by
the boards of both entities, Citizens’ shareholders will have the
right to elect either a fixed exchange ratio of 1.1448 shares of
Southern Missouri common stock or a cash payment of $53.50 for each
Citizens’ share, subject to adjustment based on Citizens’ capital
and the total outstanding shares of Citizens at closing. Based on
Southern Missouri's average closing stock price of $52.53 over the
20-day trading period ended September 19, 2022, the aggregate
transaction value is approximately $140 million.
The deal value equates to 150% of Citizens’ tangible capital at
June 30, 2022, represents a 5.9% premium to core deposits, and is a
multiple of 7.1 times Citizens’ projected forward earnings
including fully phased-in cost savings, which are estimated at 35%.
Excluding certain one-time merger charges, including Southern
Missouri's additional provision for credit losses as required under
ASU 2016-13 ("CECL''), the transaction is anticipated to be
accretive to earnings per share by approximately 5% in our fiscal
year ended June 30, 2023, and by 17% in our fiscal year ended June
30, 2024. Tangible book value per common share is expected to be
diluted by approximately 8% at closing, with a projected earnback
period of less than 2.75 years, based on the crossover method.
Southern Missouri and Citizens anticipate completion of the
transaction early in the first calendar quarter of 2023, subject to
satisfaction of customary closing conditions, including regulatory
and shareholder approvals for both parties.
Piper Sandler & Co. acted as financial advisor and Silver,
Freedman, Taff & Tiernan LLP served as legal advisor to
Southern Missouri. D.A. Davidson & Co. acted as financial
advisor and Stinson LLP served as legal advisor to Citizens.
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:
Southern Missouri Bancorp, Inc. will file a registration
statement on Form S-4 with the SEC, as well as other relevant
documents, in connection with the proposed transaction. The
registration statement will include a joint proxy statement of
Citizens and Southern Missouri that also constitutes a prospectus
of Southern Missouri, which will be sent to the shareholders of
Citizens and Southern Missouri. Shareholders of both
parties are advised to read the joint proxy
statement/prospectus and any other relevant documents that will be
filed with the SEC carefully and in their entirety when
they become
available because they
will contain important information
about Southern
Missouri, Citizens,
and the proposed
transaction. When filed, this document and other
documents relating to the merger filed by Southern Missouri 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
Southern Missouri's website at www.bankwithsouthern.com under the
tab "Investor Relations" and then under "SEC Filings."
Alternatively, these documents, when available, can be obtained
free of charge from Southern Missouri 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 Citizens upon written request to Citizens
Bancshares Co., Attn: Bob Wright, 100 NE State Hwy 92, Smithville,
Missouri, 64089.
Participants in
this Transaction:
Southern Missouri, Citizens, and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers
of Southern Missouri may be found in the definitive proxy statement
of Southern Missouri relating to its 2021 Annual Meeting of
Shareholders filed with the SEC by Southern Missouri on September
20, 2021. This definitive proxy statement can be obtained free of
charge from the sources indicated above. Information about the
directors and executive officers of Citizens will be included in
the joint proxy statement/prospectus when filed with the SEC.
Additional information regarding the interests of these
participants will also be included in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the proposed transaction when they become
available.
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 Southern
Missouri's merger and acquisition activities, including this
acquisition and Southern Missouri'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; potential adverse impacts to economic conditions in the
Company's local market areas, other markets where the Company has
lending relationships, or other aspects of the Company's business
operations or financial markets, generally, resulting from the
ongoing COVID-19 pandemic and any governmental or societal
responses thereto; 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 markets, as
well as agricultural business conditions; demand for loans and
deposits in our market area; legislative or regulatory changes that
adversely affect our business; changes in accounting principles,
policies, or guidelines; 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.
Matt Funke, President
573-778-1800
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