OREANDA-NEWS. August 21, 2017. 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.