Southern Missouri Bancorp, Inc. (NASDAQ: SMBC, "Southern
Missouri"), the parent corporation of Southern Bank, and Peoples
Service Company ("Peoples"), which is the 80% owner of Peoples
Banking Company ("PBC"), which is the 100% owner of Peoples Bank of
the Ozarks, today announced the signing of a definitive merger
agreement whereby Southern Missouri will acquire Peoples in a stock
and cash transaction. The minority shareholders of PBC will
be entitled to receive the merger consideration payable under the
terms of the merger agreement.
Peoples operates ten branches in Christian, Greene, Stone,
Taney, and Webster counties in southwest Missouri. Eight of
these branches are located in the Springfield, Missouri,
Metropolitan Statistical Area (MSA). At December 31, 2013,
Peoples' consolidated assets were $275 million, including loans,
net, of $191 million, while deposits totaled $230
million.
Southern Missouri, following its February 21, 2014, acquisition
of Citizens State Bankshares of Bald Knob, Inc., Bald Knob,
Arkansas (the parent corporation of Citizens State Bank), would
have reported total assets at December 31, 2013, of approximately
$1.0 billion, including loans, net, of $760 million, and total
deposits of $792 million, on a pro forma basis.
After Southern Missouri's acquisition of Peoples, the combined
company's total assets will approximate $1.3 billion, with total
loans, net, of $951 million, and total deposits of $1.0
billion. The combined company will operate 35 branches in
southern Missouri and northeast and north central Arkansas.
Under the terms of the merger agreement, unanimously approved by
the boards of both entities, Peoples Service Company shareholders
will receive 0.3289 shares of Southern Missouri common stock and
$10.90 in cash for each share of Peoples common stock, subject to
adjustment based on Peoples' capital at closing. Based on the
average closing price of $33.13 per share for Southern Missouri
stock over the most recent 20 trading days, the deal is valued at
approximately $22.9 million. As part of the merger, Southern
Missouri will also assume approximately $6.5 million in
subordinated debt and retire $2.9 million in other debt.
"Southern Missouri Bancorp and Southern Bank are delighted
to announce this merger with an organization having deep roots in
southwest Missouri," stated Greg Steffens, President and CEO of
Southern Missouri. "We have great respect for Peoples Bank of
the Ozarks, we're excited to welcome their employees to our family,
and we look forward to serving their customers."
"We have been interested for some time in expanding our
presence in and around Springfield, Missouri," explained Steffens,
"and we first began working towards that in mid-2010, with the
opening of a loan production office in that market. We have
experienced strong loan growth in what is now a full-service
facility in Springfield, but this partnership provides a great
opportunity to build on that with Peoples' substantial retail
presence in the market." At December 31, 2013, loans
originated out of Southern Missouri's location in Springfield
totaled approximately $128 million.
Todd Hensley, Chairman and CEO of Peoples, is expected to join
the board of directors for the combined entity. "Peoples
Service Company is the culmination of approximately 40 years of my
family's involvement in the community banking industry," commented
Mr. Hensley. "Southern Missouri Bancorp is a community-focused
partner that can help us both leverage the strength of our
franchise and continue to thrive in the ever-changing banking
environment. We believe the proposed combination will provide
improved service and product choices to our customers and even
greater opportunity to our associates. We feel this partnership
truly offers a win-win result for everyone: our communities, our
customers, and our associates."
"This transaction marks the most significant strategic move for
Southern Missouri during my tenure with the company, which began in
1998" noted Steffens. "Our management team and board of
directors believe that every acquisition should make good financial
sense for Southern Missouri shareholders, and in this instance, we
expect the transaction to be immediately accretive to earnings per
share, after transaction-related expenses, and to be accretive to
tangible book value after four years. Our investors may note
that this period is longer than we've been willing to accept in
other transactions; however, we believe that the strategic
opportunities this merger affords our organization will prove to
make it a wise investment."
Southern Missouri and Peoples anticipate completion of the
transaction in the third calendar quarter of 2014, subject to
satisfaction of customary closing conditions, including regulatory
and shareholder approvals, and consummation of an exchange
transaction involving the minority shareholders of PBC.
Sandler O'Neill + Partners, L.P. acted as financial advisor and
Patton Boggs LLP served as legal advisor to Peoples, while Silver,
Freedman, Taff & Tiernan LLP served as legal advisor to
Southern Missouri.
Conference Call:
Southern Missouri will host a conference call on Friday,
February 28, 2014, at 11:00 a.m., central time (12:00 noon, eastern
time) to review the information provided in this press
release. The call will be available live to interested
parties by calling 1-888-317-6016 in the United States (Canada:
1-855-669-9657, international: 1-412-317-6016). Telephone
playback will be available one hour following the conclusion of the
call, through March 16, 2014. The playback may be accessed by
dialing 1-877-344-7529 (Canada: 1-855-669-9658, international:
1-412-317-0088), and using the conference passcode 10042047.
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" within the meaning of the Private
Securities Litigation Reform Act of 1995 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,
the exchange transaction involving the minority shareholders of PBC
might not be consummated, 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 recently completed 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.
CONTACT: Matt Funke, CFO (573) 778-1800
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