FOR IMMEDIATE
RELEASE |
Contact: Matt Funke, CFO |
|
(573)
778-1800 |
Southern Missouri Bancorp, Inc. (NASDAQ: SMBC, “Southern
Missouri”), the parent corporation of Southern Bank, and Gideon
Bancshares Company (“Gideon”), the 92% owner of First Commercial
Bank (“First Commercial”), today announced the signing of a
definitive merger agreement whereby Southern Missouri will acquire
Gideon in a stock and cash transaction.
Gideon operates ten locations in southeast Missouri. At March
31, 2018, Gideon’s consolidated assets were $223 million, including
loans, net of allowance, of $145 million, while deposits totaled
$176 million.
Southern Missouri reported consolidated assets at March 31,
2018, of approximately $1.8 billion, including loans, net, of $1.5
billion, and total deposits of $1.6 billion. On a pro forma basis,
the combined company’s total assets will be approximately $2.1
billion, with total loans, net, of $1.7 billion, and total deposits
of $1.8 billion.
Under the terms of the merger agreement, unanimously approved by
the boards of directors of Gideon and Southern Missouri, Gideon
shareholders will receive 2.0486 shares of Southern Missouri common
stock and $72.79 in cash for each share of Gideon common stock,
subject to adjustment for Gideon’s capital at closing and assuming
all minority shareholders of First Commercial exchange their
interest in First Commercial for Gideon stock prior to closing.
Based on the average closing price of $35.53 per share for Southern
Missouri common 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
$22.7 million.
“Southern Missouri has a long history in southeast Missouri and
we are pleased to add a number of very fine communities to those we
serve in the area. We are also excited to bring an expanded
presence to Dexter, Missouri, one of the markets we’ve served the
longest,” stated Greg Steffens, President and CEO of Southern
Missouri. “Several of First Commercial’s locations quite nicely
complement our existing network of community bank facilities in
Dexter, Sikeston, and Cape Girardeau, Missouri, and we look forward
to welcoming their customers and staff to our Southern Bank
family.”
Brett Dorton, President of First Commercial, is expected to join
the executive management team of Southern Bank. “I’ve been
privileged to serve First Commercial’s customers and team members
for many years, and we are proud of the legacy this organization
has built,” said Dorton. “As we join with Southern Bank, I’m
confident our customers will be provided the same personal service,
along with an expanded ability to meet their needs with useful
products and solutions. Southern Bank believes in community
banking, and will bring new resources to our communities.”
The deal value equates to 97.5% of Gideon’s capital, as
adjusted, at closing. “The consideration represents a multiple of
approximately 9.0 times Gideon’s projected earnings over the twelve
months ending December 31, 2019, including fully phased-in cost
synergies, which we estimate at 15%,” noted Steffens. “Tangible
book value per common share is expected to be diluted by
approximately 1% at closing, with a projected earnback period of
approximately one year, based on the crossover method. Excluding
nonrecurring transaction-related expenses, the acquisition is
anticipated to be immediately accretive to earnings per share, with
an increase of approximately 5% expected, once all cost savings are
realized.”
Southern Missouri and Gideon anticipate completion of the
transaction in the fourth calendar quarter of 2018, subject to
satisfaction of customary closing conditions, including regulatory
and shareholder approvals.
The firm of Yewell G. Lawrence served as legal advisor to
Gideon, while Silver, Freedman, Taff & Tiernan LLP served as
legal advisor to Southern Missouri.
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, the exchange transaction
involving the minority shareholders of Gideon 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 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:
Southern Missouri Bancorp, Inc. 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 Gideon, that also constitutes a prospectus of Southern
Missouri, which will be sent to the shareholders of Gideon. Gideon
shareholders are advised to read the proxy statement/prospectus
when it becomes available because it will contain important
information about Southern Missouri, Gideon, 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
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 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 Gideon upon written request to
Gideon Bancshares Company., Attn: Investor Relations, 304 North
Walnut, Dexter, Missouri 63841.
Participants in this
Transaction:
Southern Missouri, Gideon, and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from Gideon’s shareholders 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 2017 Annual Meeting of Shareholders filed with the SEC by
Southern Missouri on September 26, 2017. This definitive proxy
statement can be obtained free of charge from the sources indicated
above. Information about the directors and executive officers of
Gideon 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.
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