S-4 1 tm2227744d1_s4.htm FORM S-4

 

As filed with the Securities and Exchange Commission on November 1, 2022.

 

Registration No. 333-[·]

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM S-4 

REGISTRATION STATEMENT 

UNDER THE SECURITIES ACT OF 1933

 

SOUTHERN MISSOURI BANCORP, INC. 

(Exact name of registrant as specified in its charter)

 

Missouri

(State or other jurisdiction of incorporation

or organization)

 

6022

(Primary Standard Industrial

Classification Code Number)

 

43-1665523

(I.R.S. Employer Identification No.)

 

Southern Missouri Bancorp, Inc.

2991 Oak Grove Road

Poplar Bluff, Missouri 63901

(573) 778-1800

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
 

Greg A. Steffens

Chairman and Chief Executive Officer

Southern Missouri Bancorp, Inc.

2991 Oak Grove Road

Poplar Bluff, Missouri 63901

(573) 778-1800

(Name, address, including zip code and telephone number, including area code, of agent for service)

 

Copies of communications to:

 

MARTIN L. MEYROWITZ, P.C.

Silver, Freedman, Taff & Tiernan LLP

3299 K Street, N.W., Suite 100

Washington, D.C.  20007

Telephone: (202) 295-4500

C. ROBERT MONROE, ESQ.
Stinson LLP
1201 Walnut Street, Suite 2900
Kansas City, MO 64106
Telephone: (
816) 691-3351

 

 

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable following the effectiveness of this Registration Statement and upon consummation of the transactions described herein.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ¨

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and emerging growth company" in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer   ¨   Accelerated filer  x
  Non-accelerated filer     ¨ (Do not check if a smaller reporting company) Smaller reporting company   ¨
      Emerging growth company   ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction: 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)             ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ¨

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

 

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

 

PRELIMINARY—SUBJECT TO COMPLETION—DATED NOVEMBER 1, 2022

 

 

 

 

 

Joint Proxy Statement of Citizens Bancshares Co. and Southern Missouri Bancorp, Inc. 

Prospectus of Southern Missouri Bancorp, Inc.

 

 

 

MERGER PROPOSED - YOUR VOTE IS VERY IMPORTANT

 

Dear Shareholders of Citizens Bancshares Co. and Southern Missouri Bancorp, Inc.:

 

The boards of directors of Southern Missouri Bancorp, Inc., which we refer to as “Southern Missouri,” and Citizens Bancshares Co., which we refer to as “Citizens,” have each approved a merger of our two companies. Under the merger agreement, Citizens will merge with and into a subsidiary of Southern Missouri, which subsidiary will then merge with and into Southern Missouri with Southern Missouri being the surviving corporation, on the terms and conditions set forth in the merger agreement. Following completion of the mergers, Citizens’ wholly owned bank subsidiary, Citizens Bank and Trust Company, which we refer to as “CBTC,” will merge with and into Southern Missouri’s wholly owned bank subsidiary, Southern Bank, with Southern Bank being the surviving bank.

 

Under the terms of the merger agreement, each Citizens shareholder is projected to receive, at the election of the shareholder and subject to the proration and allocation procedures set forth in the merger agreement, either a fixed exchange ratio of 1.1448 shares of Southern Missouri common stock (with cash paid in lieu of a fractional share) or a cash payment of $53.50 for each share of Citizens voting and nonvoting common stock (collectively, “Citizens common stock”) owned, subject to adjustment based on Citizens’ capital and the total number of outstanding shares of Citizens immediately prior to closing. Based on Southern Missouri’s $52.65 closing price as of September 19, 2022, the last trading day before public announcement of the merger, the transaction’s indicated value was approximately $140.1 million, with merger consideration comprised of stock and cash at a 75:25 ratio. Additionally, all outstanding Citizens stock options that are unexercised prior to the effective time of the merger will be cashed out pursuant to the terms of the merger agreement. After completion of the merger, we expect that Citizens shareholders will own approximately 18% of the outstanding shares of common stock of Southern Missouri (disregarding any Southern Missouri common stock they may already own and assuming no outstanding Citizens stock options are exercised before completion of the merger).

 

The value of the cash consideration is fixed at $53.50 per share, however, the market value of the stock portion of the merger consideration to be paid to the holders of Citizens common stock who elect and receive stock rather than cash will fluctuate with the price of Southern Missouri common stock. There will not be any adjustment to the merger consideration for changes in the market price of shares of Southern Missouri common stock (except under limited circumstances as disclosed in the merger agreement). Based on the $52.65 per share closing price of Southern Missouri common stock on the NASDAQ Global Market on September 19, 2022, the last trading day before public announcement of the merger agreement, the value of the stock consideration was approximately $60.27. Based on the closing stock price of Southern Missouri common stock on the NASDAQ Global Stock Market on [·], 202[·], the latest practicable trading day before the printing of this joint proxy statement/prospectus, of $[·], the value of the stock consideration was approximately $[·]. We urge you to obtain current market quotations for Southern Missouri common stock (NASDAQ: trading symbol “SMBC”).

 

 

 

 

At a special meeting of Citizens shareholders to be held on [·], 202[·], Citizens voting common shareholders will be asked to (1) adopt the merger agreement and (2) approve a proposal to adjourn the Citizens special meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger agreement proposal. Approval of the merger agreement proposal requires the affirmative vote of the holders of two-thirds of the outstanding shares of Citizens common stock entitled to vote thereon and approval of the Citizens adjournment proposal requires the affirmative vote of a majority of the shares of Citizens common stock present in person or represented by proxy at the Citizens special meeting and entitled to vote on the Citizens adjournment proposal. Holders of Citizens nonvoting common stock are not entitled to, and are not being requested to, vote at the Citizens special meeting. At a special meeting of Southern Missouri shareholders to be held on [·], 202[·], Southern Missouri common shareholders will be asked to approve (1) the issuance of Southern Missouri common stock in connection with the merger and (2) a proposal to adjourn the Southern Missouri special meeting, if necessary or appropriate, to solicit additional proxies in favor of the share issuance proposal. Approval of each of the share issuance proposal and the Southern Missouri adjournment proposal requires the affirmative vote of a majority of the shares of Southern Missouri common stock present in person or represented by proxy at the Southern Missouri special meeting and entitled to vote on the proposals.

 

The Citizens board of directors unanimously recommends that Citizens shareholders vote "FOR" the merger agreement proposal and "FOR" the Citizens adjournment proposal. In considering the recommendations of the board of directors of Citizens, you should be aware that the directors and executive officers of Citizens have interests in the merger that are different from, or in addition to, the interests of Citizens shareholders generally. See the section entitled “Proposal 1 - The Merger Proposal—Interests of Citizens’ Directors and Executive Officers in the Merger” beginning on page 73 of this joint proxy statement/prospectus.

 

The Southern Missouri board of directors unanimously recommends that Southern Missouri shareholders vote "FOR" the share issuance proposal and "FOR" the Southern Missouri adjournment proposal.

 

This joint proxy statement/prospectus describes the special meetings, the documents related to the merger and other matters. Please carefully read this entire joint proxy statement/prospectus, including “Risk Factors,” beginning on page 22 of this joint proxy statement/prospectus, for a discussion of the risks relating to the proposed merger. You also can obtain information about Southern Missouri from documents that it has filed with the Securities and Exchange Commission.

 

 

Don Walsworth, Sr.
Chairman of the Board
of Citizens Bancshares Co.
Greg A. Steffens
Chairman and Chief Executive Officer
of Southern Missouri Bancorp, Inc.

 

Neither the Securities and Exchange Commission nor any state securities commission or any bank regulatory agency has approved or disapproved the shares of Southern Missouri stock to be issued in the merger or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

 

The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of Southern Missouri or Citizens, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

 

The date of this joint proxy statement/prospectus is [·], 202[·], and it is first being mailed or otherwise delivered to the shareholders of Citizens and Southern Missouri on or about [·], 202[·].

 

 

 

 

REFERENCES TO ADDITIONAL INFORMATION

 

This joint proxy statement/prospectus incorporates important business and financial information about Southern Missouri from documents filed with the Securities and Exchange Commission, or the SEC, which are not included in or delivered with this joint proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by Southern Missouri at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference in this joint proxy statement/prospectus, at no cost by contacting Southern Missouri Bancorp, Inc., Attn: Investor Relations, 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, or by telephone at (573) 778-1800.

 

In addition, if you need additional copies of this joint proxy statement/prospectus or need to obtain proxy cards or other information related to the Citizen’s proxy solicitation, you may contact Citizens, at Citizens Bancshares Co., Attn: Robert G. Wright, Executive Vice President and Corporate Secretary, 2041 Commerce Drive, Kearney, Missouri 64060; or by telephone at (816) 459-4024.

 

Citizens does not have a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, is not subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and accordingly does not file documents or reports with the SEC.

 

You will not be charged for any documents that you request. To obtain timely delivery of these documents, you must request them no later than five (5) business days before the date of the applicable special meeting. This means that Citizens shareholders requesting documents must do so by [·], in order to receive them before the Citizens special meeting, and Southern Missouri shareholders requesting documents must do so by [·], in order to receive them before the Southern Missouri special meeting. The section of this joint proxy statement/prospectus entitled “Where You Can Find More Information” has additional information about obtaining copies of documents that Southern Missouri has filed with the SEC.

 

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

 

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by Southern Missouri (File No. [·]), constitutes a prospectus of Southern Missouri under Section 5 of the Securities Act of 1933, as amended, which we refer to as the Securities Act, with respect to the shares of common stock, $0.01 par value per share, of Southern Missouri. which we refer to as Southern Missouri common stock, to be issued pursuant to the Agreement and Plan of Merger, dated as of September 20, 2022 (as it may be amended from time to time), by and among Southern Missouri, Southern Missouri Acquisition VI Corp., a wholly owned subsidiary of Southern Missouri, which we refer to as “Merger Sub,” and Citizens. This document also constitutes a proxy statement for Southern Missouri under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. It also constitutes a notice of special meeting with respect to the Southern Missouri special meeting. This document also constitutes a proxy statement of Citizens and also includes a notice with respect to the Citizens special meeting. These joint proxy materials are furnished in connection with the respective proxy solicitations being conducted by the boards of directors of Southern Missouri and Citizens.

 

You should rely only on the information contained in, or incorporated by reference into, this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated [·], and you should also assume that the information in this joint proxy statement/prospectus is accurate only as of such date. You should assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of the date of the document that includes such information. Neither the mailing of this joint proxy statement/prospectus to Citizens and Southern Missouri shareholders, nor the issuance by Southern Missouri of shares of Southern Missouri common stock in connection with the merger will create any implication to the contrary.

 

Southern Missouri supplied all information contained or incorporated by reference in this joint proxy statement/prospectus relating to Southern Missouri and Citizens supplied all information contained in this joint proxy statement/prospectus relating to Citizens. Information on the websites of Southern Missouri and Citizens, or any subsidiary of Southern Missouri or Citizens, is not part of this joint proxy statement/prospectus or incorporated by reference herein. You should not rely on that information in deciding how to vote.

 

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

 

See “Where You Can Find More Information” on page 133 and “Information About Southern Missouri Bancorp” on page 101 for more details relating to Southern Missouri, and “Information About Citizens Bancshares Co.” on page 102 for more details relating to Citizens.

 

 

 

 

CITIZENS BANCSHARES CO. 

7553 NW Barry Road 

Kansas City, MO. 64153 

(816) 459-4000

 

NOTICE OF SPECIAL MEETING OF 

CITIZENS BANCSHARES CO. SHAREHOLDERS

 

Date: [·]
Time: [·]
Place: [·]

 

To Citizens Bancshares Co. Shareholders:

 

We are pleased to notify you of and invite you to a special meeting of shareholders of Citizens Bancshares Co., which we refer to as “Citizens.” The special meeting will be held solely in a virtual meeting format via the internet at www.meetnow.global/M7SRQSK. If you plan to attend the special meeting, please follow the instructions in the "Questions and Answers About the Merger and Special Meetings” section of the attached joint proxy statement/prospectus. At the Citizens special meeting, holders of Citizens voting common stock will be asked to vote on the following matters:

 

·A proposal to approve the Agreement and Plan of Merger, dated as of September 20, 2022 (as it may be amended from time to time, the “merger agreement”), by and among Southern Missouri Bancorp, Inc., which we refer to as “Southern Missouri,” Southern Missouri Acquisition VI Corp., a wholly owned subsidiary of Southern Missouri, which we refer to as “Merger Sub,” and Citizens, pursuant to which Citizens will merge with and into Merger Sub, followed by a merger of Merger Sub with and into Southern Missouri (the “merger agreement proposal”); and

 

·A proposal to adjourn the Citizens special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement (the “Citizens adjournment proposal”).

 

Only holders of record of Citizens voting common stock as of the close of business on [·], which is the date that the Citizens board of directors has fixed as the record date for the Citizens special meeting, are entitled to vote at the Citizens special meeting and any adjournments or postponements thereof. Holders of Citizens nonvoting common stock are not entitled to, and are not being requested to, vote at the Citizens special meeting. Approval of the merger agreement proposal requires the affirmative vote of the holders of two-thirds of the outstanding shares of Citizens voting common stock entitled to vote thereon. Approval of the Citizens adjournment proposal requires the affirmative vote of a majority of the shares of Citizens common stock present in person or represented by proxy at the Citizens special meeting and entitled to vote on the Citizens adjournment proposal. Presence at the Citizens special meeting by means of remote communication as provided above shall constitute presence in person at the meeting. Each share of Citizens voting common stock entitles its holder to one vote.

 

Citizens’ board of directors has unanimously approved the merger agreement, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of Citizens and its shareholders, and recommends that holders of Citizens voting common stock vote “FOR” approval of the merger agreement proposal and “FOR” the Citizens adjournment proposal.

 

Your vote is very important. To ensure your representation at the Citizens special meeting, please (1) complete, sign, date and return the enclosed proxy card in the envelope provided or (2) follow the instructions provided on the proxy card to submit your proxy by telephone or through the Internet. If you hold your shares through a bank, broker or other nominee, you should direct the vote of your shares in accordance with the voting instructions received from your bank, broker or other nominee. Please vote promptly whether or not you expect to attend the Citizens special meeting.

 

Citizens has concluded that, in connection with the merger, holders of Citizens common stock have the right to exercise dissenters’ rights under Section 351.455 of the General and Business Corporation Law of Missouri and obtain payment of the “fair value” of their shares of Citizens common stock in lieu of the merger consideration that holders of Citizens common stock would otherwise receive pursuant to the merger agreement. This right to dissent is summarized in the accompanying joint proxy statement/prospectus beginning on page 78, and a copy of Section 351.455 is reprinted in full as Appendix B to the accompanying joint proxy statement/prospectus.

 

 

 

 

The enclosed joint proxy statement/prospectus provides a detailed description of the Citizens special meeting, the merger, the documents related to the merger and other matters. We urge you to read the joint proxy statement/prospectus, including the documents incorporated in the joint proxy statement/prospectus by reference, and its appendices carefully and in their entirety.

 

   

By Order of the Board of Directors

 

 

    Don Walsworth, Sr.
Chairman of the Board
of Citizens Bancshares Co.

 

[·]

Kansas City, MO

 

 

 

 

SOUTHERN MISSOURI BANCORP, INC.
2991 Oak Grove Road
Poplar Bluff, Missouri 63901
(573) 778-1800

 

NOTICE OF SPECIAL MEETING OF

SOUTHERN MISSOURI BANCORP, INC. SHAREHOLDERS

 

Date: [·]
Time: [·]
Place: [·]

 

To Southern Missouri Bancorp, Inc. Shareholders:

 

We are pleased to notify you of and invite you to a special meeting of shareholders of Southern Missouri Bancorp, Inc., which we refer to as “Southern Missouri.” At the Southern Missouri special meeting, holders of Southern Missouri common stock will be asked to vote on the following matters:

 

·A proposal to approve the issuance of Southern Missouri common stock pursuant to the Agreement and Plan of Merger, dated as of September 20, 2022 (as it may be amended from time to time), by and among Southern Missouri, Southern Missouri Acquisition VI Corp., a wholly owned subsidiary of Southern Missouri, which we refer to as “Merger Sub,” and Citizens Bancshares Co., which we refer to as “Citizens,” pursuant to which Citizens will merge with and into Merger Sub, followed by a merger of Merger Sub with and into Southern Missouri (the “share issuance proposal”); and

 

·A proposal to adjourn the Southern Missouri special meeting, if necessary or appropriate, to solicit additional proxies in favor of the share issuance proposal (the “Southern Missouri adjournment proposal”).

 

Only holders of record of Southern Missouri common stock as of the close of business on [·], which is the date that the Southern Missouri board of directors has fixed as the record date for the Southern Missouri special meeting, are entitled to vote at the Southern Missouri special meeting and any adjournments or postponements thereof. Approval of the share issuance proposal and the Southern Missouri adjournment proposal requires the affirmative vote of a majority of the shares of Southern Missouri common stock present in person or represented by proxy at the Southern Missouri special meeting and entitled to vote on the proposals. Each share of Southern Missouri common stock entitles its holder to one vote.

 

Southern Missouri’s board of directors has unanimously approved the merger agreement, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of Southern Missouri and its shareholders, and recommends that holders of Southern Missouri common stock vote “FOR” approval of the share issuance proposal and “FOR” the Southern Missouri adjournment proposal.

 

Your vote is very important. To ensure your representation at the Southern Missouri special meeting, please (1) complete, sign, date and return the enclosed proxy card in the envelope provided or (2) follow the instructions provided on the proxy card to submit your proxy by telephone or through the Internet. If you hold your shares through a bank, broker or other nominee, you should direct the vote of your shares in accordance with the voting instructions received from your bank, broker or other nominee. Please vote promptly whether or not you expect to attend the Southern Missouri special meeting.

 

The enclosed joint proxy statement/prospectus provides a detailed description of the Southern Missouri special meeting, the merger, the documents related to the merger and other matters. We urge you to read the joint proxy statement/prospectus, including the documents incorporated in the joint proxy statement/prospectus by reference, and its appendices carefully and in their entirety.

 

  By Order of the Board of Directors
   
 
  Greg A. Steffens
Chairman of the Board and Chief Executive Officer of Southern Missouri Bancorp, Inc.

 

[·

Poplar Bluff, MO

 

 

 

 

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS 1
SUMMARY 11
Regulatory Approvals 18
RISK FACTORS 22
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 28
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 30
THE SPECIAL MEETING OF CITIZENS SHAREHOLDERS 35
Date, Time and Place 35
Matters to be Considered 35
Record Date; Shares Outstanding and Entitled to Vote 35
Vote Required; Quorum 35
Solicitation and Revocation of Proxies 36
Dissenters’ Rights 37
Security Ownership of Certain Beneficial Owners and Management 37
THE SPECIAL MEETING OF SOUTHERN MISSOURI SHAREHOLDERS 39
Date, Time and Place 39
Matters to be Considered 39
Record Date; Shares Outstanding and Entitled to Vote 39
Vote Required; Quorum 39
Solicitation and Revocation of Proxies 40
Security Ownership of Certain Beneficial Owners and Management 41
THE MERGER 42
Terms of the Merger 42
Treatment of Citizens Stock Options 43
Background of the Merger 44
Recommendation of Citizens’ Board of Directors; Citizens’ Reasons for the Merger 46
Opinion of Citizens’ Financial Advisor 49
Recommendation of Southern Missouri’s Board of Directors; Southern Missouri’s Reasons for the Merger 61
Opinion of Southern Missouri’s Financial Advisor 62
Southern Missouri’s Board of Directors Following Completion of the Merger 73
Interests of Citizens’ Directors and Executive Officers in the Merger 73
Regulatory Approvals 78
Accounting Treatment 78
Dissenters’ Rights of Citizens Shareholders 78
Southern Missouri’s Dividend Policy 80
Public Trading Markets 80
Closing and Effective Time of the Merger 80
Conversion of Shares; Election and Exchange Procedures 80
Representations and Warranties 83
Covenants and Agreements 85

 

 

 

 

Shareholder Meetings and Recommendation of Citizens’ and Southern Missouri’s Boards of Directors 89
Agreement Not to Solicit Other Offers 89
Conditions to Complete the Merger 91
Termination of the Merger Agreement 91
Effect of Termination 93
Termination Fee 93
Expenses and Fees 94
Amendment, Waiver and Extension of the Merger Agreement 94
Voting Agreements 94
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER 95
Treatment of the Merger as a “Reorganization” 96
U.S. Federal Income Tax Consequences of the Merger to U.S. Holders 97
Potential Recharacterization of Gain as a Dividend 98
Receipt of Cash in Lieu of a Fractional Share of Southern Missouri Stock 99
Dissenting Shareholders 99
Net Investment Income Tax 99
Backup Withholding 99
Information Reporting 99
Material U.S. Federal Income Tax Consequences if the Merger Fails to Qualify as a Reorganization 100
INFORMATION ABOUT SOUTHERN MISSOURI BANCORP 101
INFORMATION ABOUT CITIZENS BANCSHARES CO. 102
General 102
Employees 102
Legal Proceedings 102
Competition 102
Market and Dividends 102
CITIZENS' MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 103
Citizens' Management’s Discussion and Analysis of Financial Condition and Results Of Operations - Years Ended December 31, 2021 and 2020 103
Citizens Management’s Discussion and Analysis of Financial Condition and Results Of Operations - Six Months Ended June 30, 2022 and 2021 119
DESCRIPTION OF SOUTHERN MISSOURI’S CAPITAL STOCK 126
General 126
Common Stock 126
Preferred Stock 126
Other Anti-Takeover Provisions 126
COMPARISON OF SHAREHOLDER RIGHTS 127
ADJOURNMENT OF THE SPECIAL MEETING 132
LEGAL MATTERS 133
EXPERTS 133
WHERE YOU CAN FIND MORE INFORMATION 133
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF CITIZENS BANCSHARES CO. F-1

 

 

 

 

APPENDICES

 

AAgreement and Plan of Merger, dated as of September 20, 2022, by and among Southern Missouri Bancorp, Inc., Southern Missouri Acquisition VI Corp. and Citizens Bancshares Co.

 

BSection 351.455 of the General and Business Corporation Law of Missouri, as amended

 

COpinion of D.A. Davidson & Co.

 

DOpinion of Piper Sandler & Co.

 

 

 

 

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

 

The following questions and answers briefly address certain commonly asked questions about the merger and the respective special meetings of shareholders of Southern Missouri and Citizens. These questions and answers, as well as the following summary, are not meant to be a substitute for the information contained in the remainder of this document, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this document. You should carefully read the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to this joint proxy statement/prospectus. For details about where you can find additional important information, please see the section of this joint proxy statement/prospectus entitled “Where You Can Find More Information.”

 

Unless the context otherwise requires, throughout this joint proxy statement/prospectus, “Southern Missouri” refers to Southern Missouri Bancorp, Inc. and its affiliates, “Citizens” refers to Citizens Bancshares Co. and its affiliate, and “we,” “us” and “our” refer collectively to Southern Missouri and Citizens.

 

Q: What is the merger?
   
A: Southern Missouri and Citizens have entered into an Agreement and Plan of Merger, dated as of September 20, 2022 (as it may be amended from time to time), by and among Southern Missouri, Southern Missouri Acquisition VI Corp., a wholly owned subsidiary of Southern Missouri, which we refer to as “Merger Sub,” and Citizens (which we refer to as the “merger agreement”), pursuant to which Citizens will merge with and into Merger Sub, with Merger Sub continuing as the surviving corporation and each outstanding share of Citizens common stock converting into the right to receive the merger consideration (we refer to this transaction as the “merger”).  Immediately following the merger, Merger Sub will merge with and into Southern Missouri, with Southern Missouri continuing as the surviving corporation (we refer to this transaction as the "holding company merger") and, following the holding company merger, Citizens’ wholly owned subsidiary bank, Citizens Bank and Trust Company (which we refer to as “CBTC”), will merge with and into Southern Missouri’s wholly owned subsidiary bank, Southern Bank, with Southern Bank continuing as the surviving bank (we refer to this transaction as the “bank merger”).  The merger, holding company merger and bank merger are sometimes collectively referred to herein as the “mergers.”  A copy of the merger agreement is attached to this joint proxy statement/prospectus as Appendix A.
   
Q: Why am I receiving this joint proxy statement/prospectus?
   
A:

We are delivering this document to you because you either are a shareholder of Citizens or Southern Missouri, and each of Citizens and Southern Missouri are sending these materials to solicit proxies of their respective shareholders entitled to vote on the matters to be considered at each company’s special meeting. This document is also a prospectus that is being delivered to Citizens shareholders because Southern Missouri is offering shares of its common stock to Citizens shareholders in connection with the merger.

 

The merger cannot be completed unless the holders of (i) Citizens voting common stock approve the merger agreement, which we refer to as the “merger agreement proposal,” by the affirmative vote of the holders of two-thirds of the outstanding shares of Citizens common stock entitled to vote thereon and (ii) Southern Missouri common stock, in accordance with NASDAQ rules, approve the issuance of Southern Missouri common stock pursuant to the merger agreement, which we refer to as the “share issuance proposal,” by the affirmative vote of a majority of the shares of Southern Missouri common stock present in person or represented by proxy at the Southern Missouri special meeting and entitled to vote on the share issuance proposal. A NASDAQ-listed company, such as Southern Missouri, is required to obtain shareholder approval prior to the issuance of shares of common stock if the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock.

 

A Citizens shareholder, Castle Creek Capital Partners, VI, LP (“Castle Creek”), which has a representative on the Citizens board of directors, beneficially owns an aggregate of 172,783 shares of Citizens voting common stock, an amount equal to approximately 9.9% of the outstanding voting common stock of Citizens. The directors and executive officers of Citizens collectively beneficially own an aggregate of 871,898 shares of Citizens voting common stock (excluding exercisable stock options), an amount equal to approximately 50.0% of the outstanding voting common stock of Citizens. Castle Creek and certain directors and executive officers of Citizens who collectively beneficially own shares of Citizens voting common stock entitling them to cast 966,161 votes (excluding exercisable stock options), constituting approximately 55.4% of Citizens’ outstanding voting shares, with respect to each proposal to be presented at the Citizens special meeting, entered into voting agreements with Southern Missouri on September 20, 2022, which we refer to as the Citizens voting agreements, pursuant to which they are required, subject to certain terms and conditions, to vote their shares of Citizens voting common stock in favor of the merger agreement proposal and the Citizens adjournment proposal. 

 

 

 

 

 

The directors and executive officers of Southern Missouri collectively beneficially own an aggregate of 1,589,021 shares of Southern Missouri common stock (excluding exercisable stock options), an amount equal to approximately 17.2% of the outstanding common stock of Southern Missouri. The directors and certain executive officers of Southern Missouri who collectively beneficially own shares of Southern Missouri common stock entitling them to cast 1,394,663 votes (excluding exercisable stock options), constituting approximately 15.1% of Southern Missouri’s outstanding voting shares, with respect to each proposal to be presented at the Southern Missouri special meeting, entered into voting agreements with Citizens on September 20, 2022, which we refer to as the Southern Missouri voting agreements, pursuant to which they are required, subject to certain terms and conditions, to vote their shares of Southern Missouri common stock in favor of the share issuance proposal and the Southern Missouri adjournment proposal.

 

The forms of the voting agreements are exhibits to the Merger Agreement, which is attached as Appendix A to this joint proxy statement/prospectus. For more information regarding the voting agreements, see “The Merger — Voting Agreements” beginning on page 94. 

   
Q: What will Citizens shareholders receive in the merger?
   
A:

Each share of Citizens common stock that is outstanding immediately prior to the merger, other than shares held by persons who have perfected dissenters’ rights under Missouri law and any shares owned by Southern Missouri or Citizens, will be converted into the right to receive promptly following completion of the merger, subject to the election and the proration and allocation procedures set forth in the merger agreement and described below, either: (1) cash or (2) a fixed exchange ratio of shares of Southern Missouri common stock, with cash paid in lieu of fractional shares.

 

Twenty-five percent (25%) of the aggregate merger consideration will be paid in cash and seventy-five percent (75%) will be paid in shares of Southern Missouri common stock. The cash consideration paid for each share of Citizens common stock, which we refer to as the “per share cash consideration,” will be $53.50. The stock consideration paid for each share of Citizens common stock, which we refer to as the “per share stock consideration,” will be 1.1448 shares of Southern Missouri common stock. Citizens shareholders who receive stock and would otherwise be entitled to a fractional share of Southern Missouri common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $46.68. Additionally, all outstanding Citizens stock options that are unexercised prior to the effective time of the merger will be cashed out pursuant to the terms of the merger agreement.

 

The per share cash consideration and per share stock consideration are subject to adjustment based on Citizens’ consolidated capital and also subject to any change in the number of outstanding shares of Citizens common stock immediately prior to the merger. For further information, see “The Merger — Terms of the Merger.”

 

Q: What will Southern Missouri shareholders receive in the merger?
   
A:

Southern Missouri shareholders will not be entitled to receive any merger consideration and will continue to hold the shares of Southern Missouri common stock that they held immediately prior to the completion of the merger. Following the merger, shares of Southern Missouri common stock will continue to be traded on NASDAQ under the symbol “SMBC.”

 

Q: Will the value of the merger consideration change between the date of this document and the time the merger is completed?
   
A:

Yes. The aggregate merger consideration the holders of Citizens common stock will receive in the merger is based on Citizens’ consolidated equity capital (as adjusted pursuant to the merger agreement) as of the last business day of the month immediately preceding the month in which the merger closing occurs. Accordingly, the aggregate merger consideration to be paid to the holders of Citizens common stock at closing will depend on several factors, including Citizens’ consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, including adjustments to accrue for expenses related to the merger not previously accrued. The per share cash consideration and the per share stock consideration are also subject to the number of shares of Citizens stock outstanding immediately prior to the closing. There will not be any adjustment to the merger consideration for changes in the market price of shares of Southern Missouri common stock (except under limited circumstances as disclosed in the merger agreement). We urge you to obtain current market quotations for Southern Missouri common stock (NASDAQ: trading symbol “SMBC”).

 
 

 

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Q: Is the value of the cash consideration  and the stock consideration the same?
   
A: No. The value of the cash consideration is fixed at $53.50 per share. The value of the stock consideration, which is 1.1448 shares of Southern Missouri common stock, will fluctuate with the market price of Southern Missouri common stock and will not be known at the time of the Citizens special meeting or prior to the election deadline, and may be more or less than the value of the cash consideration on the date of the special meeting, at the time an election is made and at the completion of the merger. Based on the $52.65 per share closing price of Southern Missouri common stock on the NASDAQ Global Market on September 19, 2022, the last trading day before public announcement of the merger agreement, the value of the stock consideration was approximately $60.27. Based on the closing stock price of Southern Missouri common stock on the NASDAQ Global Stock Market on [·], 202[·], the latest practicable trading day before the printing of this joint proxy statement/prospectus, of $[·], the value of the stock consideration was approximately $[·]. You should obtain current stock price quotations for Southern Missouri common stock.
   

Q:

 

What will be the procedure for Citizens shareholders electing the form of merger consideration?
A:

Not less than 20 business days prior to the anticipated election deadline, holders of Citizens common stock will be sent an election form. The election form will include transmittal materials containing instructions for surrendering their Citizens shares in connection with their elections. Unless Southern Missouri and Citizens agree otherwise, the election deadline will be 5:00 p.m. Central time on the date which Southern Missouri and Citizens agree is as near as practicable to three business days prior to the anticipated closing date of the merger.

 

The election form sent to holders of Citizens common stock will allow a holder to indicate the number of shares of Citizens common stock for which such holder desires to receive the stock consideration and the number of shares for which such holder desires to receive the cash consideration.

 

To make a valid election, a properly completed and signed election form and transmittal materials (including the certificates representing the holder’s shares, or a customary guarantee of delivery of such certificates from a member of any registered national securities exchange or a commercial bank or trust company in the United States), must actually be received by Southern Missouri’s exchange agent, at or prior to the election deadline.

   
Q: Can I submit an election form if I vote against the merger agreement proposal?
   
A: Yes, you can submit an election form even if you vote against the merger agreement proposal. Only Citizens shareholders will receive an election form.
   
Q: Can I change or revoke my election once it has been submitted?
   
A: Yes. You can change or revoke your election as to your desire to receive the stock consideration and/or the cash consideration with respect to all or a portion of your shares of Citizens common stock by delivering written notice to the exchange agent, accompanied by a properly completed and signed revised election form, prior to the election deadline.
   
Q: What happens if I do not make a valid election prior to the election deadline?
   
A: If you fail to submit a valid election form to the exchange agent prior to the election deadline, then you will be deemed to have made no election. Depending on the elections made by the other holders of Citizens common stock, you will receive shares of Southern Missouri common stock or cash for your shares of Citizens common stock, or a combination of both cash and shares.

 

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Q: Will I receive the form of merger consideration that I elect?
   
A:

You will receive the form of merger consideration that you elect if Citizens shareholders as a whole do not elect to receive more of that form of consideration than is available under the merger agreement. The merger agreement provides that the aggregate cash consideration that will be paid for shares of Citizens common stock is twenty-five percent (25%) of the aggregate merger consideration, with the remaining consideration, seventy-five percent (75%), consisting of shares of Southern Missouri common stock.

 

If Citizens shareholders elect to receive more of one form of consideration than is available, we will allocate the available amount ratably among the Citizens shareholders electing to receive that form of consideration, and those shareholders will receive the other form of consideration for the balance of their shares. Accordingly, you may receive a form of merger consideration that differs from your election.

   
Q:

How will Citizens stock options be treated in the merger?

 

A: All outstanding Citizens stock options that are unexercised prior to the effective time of the merger will be automatically canceled and converted into the right to receive cash equal to the amount by which $53.50 exceeds the option exercise price. As of the effective time of the merger, all Citizens stock options, whether or not vested or exercisable, will no longer be outstanding and shall automatically cease to exist, and the holder of Citizens stock options will cease to have any rights with respect to such Citizens stock options, except the right to receive the option consideration.  The option consideration will be paid in cash.
   
Q: When and where will the special meetings be held?
   
A:

The Citizens special meeting will be held solely in a virtual meeting format via the internet at www.meetnow.global/M7SRQSK, on [·],[·], 202[·], at [·][·].m., Central time.

 

The Southern Missouri special meeting will be held at Southern Missouri’s corporate headquarters located at 2991 Oak Grove Road, Poplar Bluff, Missouri, on [·],[·], 202[·], at [·][·].m., Central time.

   
Q: How can I attend the Citizens special meeting, which is a completely virtual meeting?
   
A: You are entitled to attend the Citizens special meeting if you were a holder of record of Citizens common stock as of the close of business on [·], 202[·] which is the date that the Citizens board of directors has fixed as the record date for the Citizens special meeting, or if you hold a valid proxy for the Citizens special meeting. The Citzens special meeting will be a completely virtual meeting of shareholders, and you will be able to attend the Citizens special meeting via the internet and submit your questions during the meeting by visiting www.meetnow.global/M7SRQSK. Participation in the Citizens special meeting virtually shall constitute presence in person at the meeting. You also will be able to vote any shares of Citizens voting common stock that you are entitled to vote electronically at the Citizens special meeting. To participate in the Citizens special meeting, you will need the 15-digit control number included on your proxy card. The Citizens special meeting webcast will begin promptly at [·]  [·].m., Central time on [·], 202[·]. We encourage you to access the Citizens special meeting prior to the start time. Online check-in will begin at [·][·].m., Central time, and you should allow ample time for the check-in procedures.
   
Q:

What if during the check-in time for the Citizens special meeting or during the meeting I have technical difficulties or trouble accessing the virtual meeting website?

   
A: Citizens will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call: [·] (Toll free—US and Canada); or [·] (Toll line—International).

 

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Q: What is being voted on at the special meetings?
   
A: At the Citizens special meeting, Citizens shareholders will be asked to vote in favor of the merger agreement proposal and the Citizens adjournment proposal. At the Southern Missouri special meeting, Southern Missouri shareholders will be asked to vote in favor of the share issuance proposal and the Southern Missouri adjournment proposal.
   
Q: Who is entitled to vote at the special meetings?
   
A:

Citizens Special Meeting. Holders of record of Citizens voting common stock at the close of business on [·], 202[·], which is the date that the Citizens board of directors has fixed as the record date for the Citizens special meeting, are entitled to vote at the Citizens special meeting. Each share of Citizens voting common stock that you own as of the close of business on the voting record date entitles you to one vote. Holders of Citizens nonvoting common stock are not entitled to, and are not being requested to, vote at the Citizens special meeting.

 

Southern Missouri Special Meeting. Holders of record of Southern Missouri common stock at the close of business on [·], 202[·], which is the date that the Southern Missouri board of directors has fixed as the record date for the Southern Missouri special meeting, are entitled to vote at the Southern Missouri special meeting. Each share of Southern Missouri common stock that you own as of the close of business on the voting record date entitles you to one vote. Southern Missouri does not have a class of nonvoting common stock; accordingly, all holders of Southern Missouri common stock as of the voting record date will be entitled to vote at the Southern Missouri special meeting.

 

Q: How do I vote?
   
A: After carefully reading and considering the information contained in this document, please follow the instructions that accompany your proxy card and cast your vote as soon as possible by internet, by telephone, or by returning your completed, signed, and dated proxy card in the enclosed envelope. You may also attend your company’s special meeting and vote in person (with respect to the Southern Missouri special meeting) or electronically (with respect to the virtual Citizens special meeting). Even if you are planning to attend the special meeting, both Citizens and Southern Missouri request that you cast your vote by internet, by telephone or by proxy card prior to the meeting. If your stock or shares are held in “street name,” through a bank, broker or other nominee, that institution will send you separate instructions describing the procedure for voting such shares. Please follow the voting instructions provided by your bank, broker or other nominee. Please note that you may not vote Citizens or Southern Missouri shares held in “street name” by returning a proxy card directly to Citizens or Southern Missouri, as applicable, or by voting in person or electronically, as the case may be, during the applicable special meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker or other nominee.
   
Q: What constitutes a quorum?
   
A: The presence of the holders of a majority of the outstanding shares entitled to vote at each special meeting constitutes a quorum. Presence may be in person or by proxy.  Participation in the Citizens special meeting virtually shall constitute presence in person at the Citizens special meeting. You will be considered part of the quorum if you vote by internet, if you vote by telephone, if you return a signed and dated proxy card, or if you vote in person at the special meeting. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum. Since none of the proposals to be voted on at either the Citizens special meeting or the Southern Missouri special meeting are routine matters for which brokers may have discretionary authority to vote, if you hold your shares in “street name,” failure to provide instructions to your bank, broker or other nominee on how to vote will result in your shares not being counted as represented for purposes of establishing a quorum at your company’s special meeting.
   
Q: What is the vote required to approve each proposal at the special meetings?
   
A: Citizens special meeting: To approve the merger agreement proposal, two-thirds of the shares of Citizens common stock entitled to vote thereon must be voted in favor of such proposal. Approval of the Citizens adjournment proposal requires the affirmative vote of a majority of the shares of Citizens common stock present in person or represented by proxy (by mail, telephone or Internet) at the Citizens special meeting and entitled to vote on the Citizens adjournment proposal. If you “ABSTAIN” from voting on the merger agreement proposal or the Citizens adjournment proposal, it will have the same effect as a vote AGAINST such proposal. If you fail to either submit a proxy or vote at the Citizens special meeting, or are a "street name" holder and fail to instruct your bank, broker or other nominee how to vote, it will have the same effect as a vote AGAINST the merger agreement proposal and no effect on the Citizens adjournment proposal.

 

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Concurrently with the execution of the merger agreement, Castle Creek, a large shareholder of Citizens that has a representative on the Citizens board of directors, and certain of Citizens other directors and executive officers, entered into the Citizens voting agreements pursuant to which they agreed to vote their shares of Citizens voting common stock in favor of the merger agreement proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Citizens common stock. The form of the Citizens voting agreement is an exhibit to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus. As of [·], 202[·], Castle Creek and the Citizens directors and executive officers who entered into the Citizens voting agreements beneficially owned an aggregate of 966,161 shares of Citizens voting common stock (excluding exercisable stock options), an amount equal to approximately 55.4% of the outstanding shares of Citizens voting common stock.

 

Southern Missouri special meeting: Approval of the share issuance proposal and the Southern Missouri adjournment proposal requires the affirmative vote of a majority of the shares of Southern Missouri common stock present in person or represented by proxy (by mail, telephone or Internet) at the Southern Missouri special meeting and entitled to vote on such proposals. If you “ABSTAIN” from voting for the share issuance proposal or the Southern Missouri adjournment proposal, it will have the same effect as a vote AGAINST such proposal. If you fail to either submit a proxy or vote at the Southern Missouri special meeting, or are a "street name" holder and fail to instruct your bank, broker or other nominee how to vote, it will have no effect on either the share issuance proposal or the Southern Missouri adjournment proposal.

 

Concurrently with the execution of the merger agreement, Southern Missouri directors and certain executive officers entered into the Southern Missouri voting agreements pursuant to which they agreed to vote their shares of Southern Missouri common stock in favor of the share issuance proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Southern Missouri common stock. The form of the Southern Missouri voting agreement is an exhibit to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus. As of [·], 202[·], the Southern Missouri directors and executive officers who entered into the Southern Missouri voting agreements beneficially owned an aggregate of 1,394,663 shares of Southern Missouri common stock (excluding exercisable stock options), an amount equal to approximately 15.1% of the outstanding shares of Southern Missouri common stock.

   
Q: Why is my vote important?
   
A: We cannot complete the merger unless Citizens shareholders approve the merger agreement proposal and Southern Missouri shareholders approve the share issuance proposal.  In addition, Southern Missouri is not required to complete the merger unless holders of less than 10% of the total shares of Citizens common stock are, or have the ability to become, dissenting shares, pursuant to the General and Business Corporation Law of Missouri (which we refer to as the “MGBCL”), meaning that holders of shares representing at least 90% of the shares of Citizens common stock outstanding immediately prior to the effective time of the merger have approved the merger agreement or otherwise allowed their dissenters’ rights to lapse under Missouri law.  
   
Q: What is the recommendation of the Citizens board of directors?
   
A:

After careful consideration, Citizens’ board of directors recommends that holders of Citizens voting common stock vote “FOR” the merger agreement proposal and “FOR” the Citizens adjournment proposal.

 

For a more complete description of the recommendation of the Citizens board of directors and Citizens’ reasons for the merger, see “The Merger —Recommendation of Citizens’ Board of Directors; Citizens’ Reasons for the Merger” beginning on page 46.

 

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Q: What is the recommendation of the Southern Missouri board of directors?
   
A:

After careful consideration, Southern Missouri’s board of directors recommends that holders of Southern Missouri common stock vote “FOR” the share issuance proposal and “FOR” the Southern Missouri adjournment proposal.

 

For a more complete description of the recommendation of the Southern Missouri board of directors and Southern Missouri’s reasons for the merger, see “The Merger — Recommendation of Southern Missouri’s Board of Directors; Southern Missouri’s Reasons for the Merger” beginning on page 61

   
Q: Can I change my proxy or voting instructions?
   
A: Yes. If you are a holder of record of Citizens voting common stock or Southern Missouri common stock, you may revoke your proxy at any time before it is voted by:

 

  · voting by internet at a later time but prior to your company’s special meeting,

 

  · signing and returning a proxy card with a later date,

 

  · delivering a written revocation to your company’s corporate secretary, or

 

  · attending your company’s special meeting and voting at the special meeting.

 

  Attendance at your company’s special meeting by itself will not automatically revoke your proxy. A revocation or later-dated proxy received by Citizens or Southern Missouri after the vote is taken at their respective special meetings will not affect your previously submitted proxy. Citizens’ corporate secretary’s mailing address is Citizens Bancshares Co., 2041 Commerce Drive, Kearney, Missouri 64060, Attention: Robert G. Wright, Executive Vice President and Corporate Secretary. Southern Missouri’s corporate secretary’s mailing address is: Southern Missouri Bancorp, Inc., 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, Attention: Charles R. Love, Corporate Secretary. If your shares are held in “street name” through a bank or broker, you should contact your bank or broker to change your voting instructions.
   
Q: What regulatory approvals are required to complete the merger?
   
A: In order to complete the mergers, Southern Missouri and Citizens must first obtain all regulatory approvals, consents and orders required in connection with the mergers. Accordingly, the parties must obtain the approval of or waiver by the Board of Governors of the Federal Reserve System, referred to as the Federal Reserve Board, and the approval of the Missouri Division of Finance, referred to as the “Missouri Division.” As of the date of this joint proxy statement/prospectus, Southern Missouri, Southern Bank, Citizens and CBTC have submitted applications and notifications to obtain the required regulatory approvals. There can be no assurances that such approvals will be received on a timely basis, or as to the ability of Southern Missouri, Southern Bank, Citizens and CBTC to obtain the approvals on satisfactory terms or the absence of litigation challenging such approvals. The regulatory approvals to which completion of the mergers are described in more detail under the section entitled “The Merger— Regulatory Approvals” beginning on page 78

 

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Q: What are the U.S. federal income tax consequences of the merger to Citizens shareholders?
   
A:

The mergers, taken as a whole, are intended to qualify as one or more tax-deferred “reorganizations” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”). Assuming the mergers qualify as a reorganization, the federal income tax consequences to U.S. holders of Citizens common stock will depend primarily on whether they exchange their shares of Citizens common stock solely for shares of Southern Missouri common stock, solely for cash or for a combination of shares of Southern Missouri common stock and cash. It is expected that U.S. holders of Citizens common stock will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their shares of Citizens common stock solely for shares of Southern Missouri common stock pursuant to the merger, except with respect to any cash received by a Citizens shareholder in lieu of a fractional share of Southern Missouri common stock. U.S. holders of Citizens common stock who exchange their shares solely for cash should recognize gain or loss on the exchange. U.S. holders of Citizens common stock who exchange their shares for a combination of Southern Missouri common stock and cash will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Southern Missouri common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of Citizens common stock in the merger exceeds such U.S. holder’s adjusted tax basis in the holder’s Citizens common stock surrendered and (ii) the amount of cash received by such U.S. holder of Citizens common stock (in each case excluding any cash received in lieu of a fractional share of Southern Missouri common stock, with the gain or loss on such fractional share determined separately, as discussed below under “Material U.S. Federal Income Tax Consequences of the Merger—Receipt of Cash in Lieu of a Fractional Share of Southern Missouri Stock”). Gain or loss is determined separately with respect to each block of Citizens common stock. If a U.S. holder receives a combination of shares of Southern Missouri common stock and cash (other than cash received in lieu of a fractional share of Southern Missouri common stock) in exchange for shares of Citizens common stock pursuant to the merger and determines that it has a loss with respect to any block of shares, such loss cannot be recognized as part of the merger and cannot be used to offset any gain realized on another block of shares. The actual federal income tax consequences to U.S. holders of Citizens common stock of electing to receive cash, shares of Southern Missouri common stock or a combination of cash and stock will not be ascertainable at the time Citizens shareholders make their election because it will not be known at that time how, or to what extent, the allocation and proration procedures will apply, nor will the actual values of the stock consideration and the cash consideration be known at that time. In addition, Citizens shareholders will recognize gain or loss if they exercise dissenters’ rights. Please see “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 95 for further discussion of the material U.S. federal income tax consequences of the merger.

 

Tax matters are complicated, and the tax consequences of the merger to a particular Citizens shareholder will depend in part on such shareholder’s individual circumstances. Accordingly, all holders of Citizens common stock should consult their own independent tax advisors regarding the particular tax consequences of the merger to them, including the applicability and effect of U.S. federal, state, local, foreign and other tax laws, tax return reporting requirements and the effect of any proposed changes in the tax laws.

   
Q: What risks should I consider before I vote on the merger?
   
A: We encourage you to read carefully the detailed information about the merger contained in this joint proxy statement/prospectus, including the section entitled “Risk Factors” beginning on page 22.
   
Q: Are holders of Citizens common stock entitled to dissenters’ rights?
   
A: Yes. The MGBCL permits a holder of Citizens common stock to dissent from the merger and obtain payment in cash of the “fair value” of his or her shares of Citizens common stock. To do this, a shareholder must follow all of the procedures of Section 351.455 of the MGBCL in order to preserve such shareholder’s statutory rights.  In general, a shareholder must: (i) before the vote on approval of the merger agreement proposal at the Citizens special meeting, file a written objection to the merger with Citizens; (ii) not vote FOR the merger agreement proposal; (iii) within 20 days following the effective date of the merger, file a written demand for payment with Southern Missouri; and (iv) state in the written demand the number of shares of Citizens common stock owned by such shareholder.  If a holder of Citizens common stock follows the required procedures, such shareholder’s only right will be to receive the “fair value” of such shareholder’s shares of Citizens common stock in cash.  Failure to observe any of these procedures could result in the total loss of dissenters' rights under Section 351.455.  A shareholder who loses his, her or its dissenters' rights would be bound by the merger agreement and would have to accept the merger consideration as provided by the merger agreement.  Copies of the applicable provisions of the MGBCL are attached to this joint proxy statement/ prospectus as Appendix B. See “The Merger—Dissenters’ Rights of Citizens Shareholders” beginning on page 78.

 

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Q: If I am a holder of Citizens common stock, should I send in my Citizens common stock certificates or evidence of my book-entry shares now?
   
A: No. Do not send in share certificates with your proxy form. As discussed above, not less than 20 business days prior to the anticipated election deadline, we will send an election form to holders of record of Citizens common stock. The election form will include transmittal materials containing instructions for exchanging and delivering your Citizens share certificates or evidence of book-entry shares (or affidavit of lost certificate) to the exchange agent in exchange for the merger consideration.  If you do not submit the initial election form before the merger is completed, the exchange agent for the merger will send you, promptly after the merger is completed, a transmittal letter with instructions for delivering your shares to the exchange agent. Computershare Trust Company, N.A. will act as exchange agent. See “The Merger — Conversion of Shares; Exchange Procedures” beginning on page 80.
   
Q: Whom may I contact if I cannot locate my Citizens common stock certificate(s)?
   
A: If you are unable to locate your original Citizens common stock certificate(s), you should contact Robert G. Wright, Citizens’ Executive Vice President and Corporate Secretary, at 2401 Commerce Drive, Kearney, MO 64060; or by telephone at (816) 459-4024.
   
Q: What should I do if I receive more than one set of voting materials?
   
A: Citizens shareholders and Southern Missouri shareholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold shares of Citizens  common stock or Southern Missouri  common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of Citizens  common stock or Southern Missouri  common stock and your shares are registered in more than one name, you will receive more than one proxy card. In addition, if you are a holder of both Citizens  common stock and Southern Missouri common stock, you will receive one or more separate proxy cards or voting instruction cards for each company. Please complete, sign, date and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this joint proxy statement/prospectus to ensure that you vote every share of Citizens common stock and/or Southern Missouri common stock that you own.
   
Q: When do you expect to complete the merger?
   
A: Southern Missouri and Citizens expect to complete the merger in the first calendar quarter of 2023, once all of the conditions to the merger are fulfilled. However, neither Southern Missouri nor Citizens can assure you of when or if the merger will be completed. We must first obtain the approval by Citizens shareholders of the merger agreement and Southern Missouri shareholders of the share issuance, obtain the necessary regulatory approvals and satisfy certain other closing conditions.
   
Q: What happens if the merger is not completed?
   
A: If the merger is not completed, holders of Citizens common stock will not receive any consideration for their shares of Citizens common stock in connection with the merger. Instead, Citizens will remain an independent company.  In addition, if the merger agreement is terminated in certain circumstances, a termination fee may be required to be paid by Citizens to Southern Missouri. See “The Merger — Termination Fee” beginning on page 93 for a complete discussion of the circumstances under which a termination fee will be payable.
   
Q: How will my rights as a Citizens shareholder differ following the merger?
   
A. Upon completion of the merger, holders of Citizens common stock who elect to and receive Southern Missouri common stock will become Southern Missouri shareholders and their rights as shareholders will be governed by Southern Missouri’s articles of incorporation and bylaws, as well as the MGBCL. The rights associated with Southern Missouri common stock are different from the rights associated with Citizens common stock. See “Comparison of Shareholder Rights” beginning on page 127.

 

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Q: Whom should I contact with questions or to obtain additional copies of this joint proxy statement/prospectus?
   
A: If you would like additional copies of this joint proxy statement/prospectus, or if you would like to ask any questions about the merger and related matters, you should contact:

 

For Citizens shareholders:   For Southern Missouri shareholders:

Citizens Bancshares Co.

Attn: Robert G. Wright, Executive Vice

President and Corporate Secretary

2041 Commerce Drive

Kearney, Missouri 64060

Telephone: (816) 459-4024

 

Southern Missouri Bancorp, Inc.

Attn: Investor Relations

2991 Oak Grove Road

Poplar Bluff, MO 63901

Telephone: (573) 778-1800

 

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SUMMARY

 

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. You should carefully read this entire document, including the appendices, and the other documents to which this document refers to fully understand the merger and the related transactions. A list of the documents incorporated by reference appears on page 133 under “Where You Can Find More Information.”

 

Information About the Companies (page 101 and 102)

 

Southern Missouri Bancorp, Inc. Southern Missouri, headquartered in Poplar Bluff, Missouri, is the holding company for Southern Bank. Southern Bank, founded in 1887, is a Missouri-chartered trust company with banking powers, providing products and services to the communities it serves through its headquarters and 50 branch locations in Missouri, Arkansas and Illinois. As of June 30, 2022, Southern Missouri had assets of $3.2 billion, deposits of $2.8 billion, and stockholders’ equity of $320.8 million.

 

Southern Missouri regularly evaluates opportunities to expand through acquisitions and conducts due diligence activities in connection with such opportunities. As a result, acquisition discussions and, in some cases, negotiations may take place at any time, and acquisitions involving cash, or our debt or equity securities, may occur.

 

Southern Missouri’s principal office is located at 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, and its telephone number is (573) 778-1800. Southern Missouri’s common stock is listed on the NASDAQ Global Market under the symbol “SMBC.”

 

Additional information about Southern Missouri and its subsidiaries is contained under “Information About Southern Missouri Bancorp” and is included in documents incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.”

 

Citizens Bancshares Co. Citizens, headquartered in Kansas City, Missouri, is the holding company for CBTC, a Missouri state-chartered trust company with banking powers. CBTC was founded and opened for business in 1889 and currently serves clients in Kansas City, St. Joseph and other communities throughout Northwest Missouri through its 14 branch locations. Citizens does not, as an entity, engage in separate business activities of a material nature apart from the activities it performs for CBTC. Its primary activities are to provide assistance in the management and coordination of CBTC’s financial resources. Citizens has no significant assets other than all of the outstanding shares of common stock of CBTC. Citizens derives its revenues primarily from the operations of CBTC in the form of dividends received from CBTC. As of June 30, 2022, Citizens had, on a consolidated basis, assets of $1.0 billion, deposits of $879.4 million, and shareholders’ equity of $94.3 million.

 

Citizens’ principal office is located at 7553 NW Barry Road, Kansas City, MO 64153; and its telephone number is (816) 459-4000. Citizens’ common stock is not listed or traded on any established securities exchange or quotation system.

 

For additional information about Citizens see “Information About Citizens Bancshares Co.”

 

The Merger and the Merger Agreement (page 42)

 

The terms and conditions of the merger are contained in the merger agreement, which is attached to this joint proxy statement/prospectus as Appendix A. We encourage you to read the merger agreement carefully, as it is the legal document that governs the merger.

 

In the merger, Citizens will merge with and into Merger Sub, a wholly owned subsidiary of Southern Missouri, with Merger Sub as the surviving entity after the merger. As a result of this merger, each outstanding share of Citizens common stock (other than dissenting and treasury shares) will be converted into the right to receive the merger consideration described below. Immediately following the merger, Merger Sub will merge with and into Southern Missouri with Southern Missouri as the surviving entity in the holding company merger. Following the holding company merger, Citizens’ wholly owned bank subsidiary, CBTC, will merge with and into Southern Missouri’s wholly owned bank subsidiary, Southern Bank, with Southern Bank as the surviving entity in the bank merger. As a result of the mergers, Citizens and CBTC will cease to exist as separate entities.

 

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The merger agreement proposal must be approved by two-thirds of the outstanding shares of Citizens common stock entitled to vote at the Citizens special meeting. The share issuance proposal requires the affirmative vote of a majority of shares of Southern Missouri common stock present in person or represented by proxy and entitled to vote on the matter.

 

As an inducement to Southern Missouri’s willingness to enter into the merger agreement, certain of the shareholders of Citizens, including certain directors and executive officers of Citizens, agreed to vote all of their shares of Citizens voting common stock in favor of the merger agreement proposal and the Citizens adjournment proposal at the Citizens special meeting. As of the date of this joint proxy statement/prospectus, the Citizens voting agreements covered 966,161 shares of Citizens common stock (excluding exercisable stock options), constituting approximately 55.4% of Citizens’ outstanding voting shares. Similarly, as an inducement to Citizens’ willingness to enter into the merger agreement, Southern Missouri’s directors and certain executive officers agreed to vote all of their shares of Southern Missouri common stock in favor of the share issuance proposal and the Southern Missouri adjournment proposal at the Southern Missouri special meeting. As of the date of this joint proxy statement/prospectus, the Southern Missouri voting agreements covered 1,394,663 shares of Southern Missouri common stock, constituting approximately 15.1% of Southern Missouri’s outstanding voting shares. The voting agreements terminate if the merger agreement is terminated in accordance with its terms. A copy of the form of the Citizens voting agreement and the Southern Missouri voting agreement is attached as Exhibit A and Exhibit C, respectively, to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus.

 

We expect the merger to be completed during the first calendar quarter of 2023. If the merger is not completed by June 30, 2023, either party may terminate the merger agreement, unless the failure to complete the merger is due to the failure of the party seeking to terminate the merger agreement to perform or observe the covenants and agreements set forth in the merger agreement; and provided, further, that if additional time is necessary in order to obtain any required regulatory approvals to complete the merger, then the termination date shall be automatically extended until August 31, 2023.

 

In the Merger, Holders of Citizens Common Stock Can Elect to Receive Either Shares of Southern Missouri Common Stock or Cash (page 42)

 

Each share of Citizens common stock outstanding immediately prior to the merger, other than shares held by persons who have perfected dissenters’ rights under Missouri law and any shares owned by Southern Missouri or Citizens, will be converted into the right to receive, subject to the election and the proration and allocation procedures set forth in the merger agreement and described below, either: (1) cash or (2) a fixed exchange ratio of shares of Southern Missouri common stock, with cash paid in lieu of fractional shares.

 

Twenty-five percent (25%) of the aggregate merger consideration will be paid in cash and seventy-five percent (75%) will be paid in shares of Southern Missouri common stock. The cash consideration paid for each share of Citizens common stock, which we refer to as the “per share cash consideration,” will be $53.50 and the stock consideration paid for each share of Citizens common stock, which we refer to as the “per share stock consideration,” will be 1.1448 shares, in each case subject to adjustment to Citizens’ consolidated capital and to any change in the number of outstanding shares of Citizens common stock immediately prior to the merger. Citizens shareholders who receive stock and would otherwise be entitled to a fractional share of Southern Missouri common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $46.68.

 

Each Citizens shareholder will receive the form of merger consideration he, she or it elects if Citizens shareholders in the aggregate do not elect to receive more of that form of consideration than is available under the merger agreement. The merger agreement provides that the aggregate cash consideration that will be paid for shares of Citizens stock will be twenty-five percent (25%) of the aggregate merger consideration, with the remaining merger consideration consisting of shares of Southern Missouri common stock. If the Citizens shareholders in the aggregate elect to receive more of one form of consideration than is available, we will allocate the available amount ratably among the Citizens shareholders electing to receive that form of consideration, and those shareholders will receive the other form of consideration for the balance of their shares, as applicable. Accordingly, you may receive a form of merger consideration that differs from your election.

 

Prior to the effective time of the merger, an election form with instructions for making your election as to the form of consideration that you prefer to receive in the merger will be sent to Citizens shareholders. The available elections, election procedures and deadline for making elections are described under the heading “The Merger — Conversion of Shares; Election and Exchange Procedures.” If you fail to submit a valid election form before the election deadline, then depending on the elections made by the other holders of Citizens common stock, you will receive shares of Southern Missouri common stock and/or cash for your shares of Citizens common stock.

 

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Southern Missouri’s common stock is listed on the NASDAQ Global Market under the symbol “SMBC.” Citizens’ common stock is not listed on an exchange or quoted on any automated services, and there is no established trading market for shares of Citizens common stock. The following table shows the closing sale prices of Southern Missouri common stock as reported on NASDAQ on, and the last known sales prices of Citizens common stock as of, September 19, 2022, the day immediately prior to the public announcement of the merger agreement, and [·], 202[·], the last practicable trading day before the printing of this joint proxy statement/prospectus. This table also shows the implied value of the merger consideration payable for each share of Citizens common stock that receives the per share stock consideration, calculated by multiplying the closing price of Southern Missouri common stock on those dates by the exchange ratio of 1.1448. The per share cash consideration is $53.50. Both the per share cash consideration and the per share stock consideration are subject to adjustment based on Citizens’ consolidated equity capital and a change in the number of shares of Citizens common stock outstanding immediately prior to the merger.

 

Date  Southern
Missouri Closing
Price
   Citizens
Common
Stock
Sales Price
   Implied Value
of Stock
Consideration
for One Share
of Citizens
Common
Stock
 
September 19, 2022  $52.65   $28.00(1)  $60.27 
[·], 202[·]  $[·]   $[·](1)  $[·] 

 

(1)    The last known sale of Citizens common stock occurred on November 10,2020.

 

Treatment of Citizens stock options (page 43)

 

All outstanding Citizens stock options that are unexercised prior to the effective time of the merger will be automatically canceled and converted into the right to receive cash equal to the amount by which $53.50 exceeds the option exercise price. As of the effective time of the merger, all Citizens stock options, whether or not vested or exercisable, will no longer be outstanding and shall automatically cease to exist, and the holder of Citizens stock options will cease to have any rights with respect to such Citizens stock option, except the right to receive the option consideration. The option consideration will be paid in cash.

 

Citizens Shareholders Will Own Approximately 18% of the Outstanding Southern Missouri Common Stock after the Merger (Page 23)

 

Based on the number of Southern Missouri and Citizens common shares outstanding as of [·], 202[·], Citizens shareholders will collectively own approximately 18% of the outstanding Southern Missouri common shares after the merger on a fully diluted basis (disregarding any Southern Missouri common stock they may already own and assuming no outstanding Citizens stock options are exercised before completion of the merger).

 

The Citizens Special Meeting (page 35)

 

The Citizens special meeting will be held solely in a virtual meeting format via the internet at www.meetnow.global/M7SRQSK on [·], 202[·], at [·] [·].m., Central time. At the Citizens special meeting, holders of Citizens voting common stock will be asked to vote on the following matters:

 

·the merger agreement proposal; and

 

·the Citizens adjournment proposal.

 

Only holders of record of Citizens voting common stock at the close of business on [·], 202[·], will be entitled to vote at the Citizens special meeting. Each share of Citizens voting common stock is entitled to one vote on the merger agreement proposal and the Citizens adjournment proposal. As of the record date, there were 1,745,258 shares of Citizens common stock entitled to vote at the Citizens special meeting. As of the record date, Citizens’ directors and executive officers and their affiliates were entitled to vote approximately 871,898 shares, or approximately 50.0% of the total outstanding shares, of Citizens voting common stock. Holders of Citizens nonvoting common stock are not entitled to, and are not being requested to, vote at the Citizens special meeting.

 

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To approve the merger agreement proposal, two-thirds of the shares of Citizens common stock entitled to vote thereon must be voted in favor of such proposal. Approval of the Citizens adjournment proposal requires the affirmative vote of a majority of the shares of Citizens common stock present in person or represented by proxy at the Citizens special meeting and entitled to vote on the Citizens adjournment proposal. If you “ABSTAIN” from voting on the merger agreement proposal or the Citizens adjournment proposal, it will have the same effect as a vote AGAINST such proposal. If you fail to either submit a proxy or attend and vote electronically at the Citizens special meeting, or are a "street name" holder and fail to instruct your bank, broker or other nominee how to vote, it will have the same effect as a vote AGAINST the merger agreement proposal and no effect on the Citizens adjournment proposal.

 

Concurrently with the execution of the merger agreement, Castle Creek, a large shareholder who has a representative of the Citizens board of directors, and certain other Citizens directors and executive officers entered into the Citizens voting agreements pursuant to which they agreed to vote their shares of Citizens voting common stock in favor of the merger agreement proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Citizens common stock. As of [·], 202[·], Castle Creek and the Citizens directors and executive officers who entered into the Citizens voting agreements beneficially owned an aggregate of 966,161 shares of Citizens voting common stock (excluding exercisable stock options), an amount equal to approximately 55.4% of the outstanding shares of Citizens voting common stock. For additional information regarding the voting agreements, see “The Merger — Voting Agreements.”

 

Concurrently with the execution of the merger agreement, Southern Missouri directors and certain executive officers entered into the Southern Missouri voting agreements pursuant to which they agreed to vote their shares of Southern Missouri common stock in favor of the share issuance proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Southern Missouri common stock. As of [·], 202[·], the Southern Missouri directors and executive officers who entered into the Southern Missouri voting agreements beneficially owned an aggregate of 1,394,663 shares of Southern Missouri common stock, an amount equal to approximately 15.1% of the outstanding shares of Southern Missouri common stock. For additional information regarding the voting agreements, see “The Merger — Voting Agreements.”

 

The Southern Missouri Special Meeting (page 39)

 

The Southern Missouri special meeting will be held on [·], 202[·], at [·] [·].m., local time, at Southern Missouri’s corporate headquarters located at 2991 Oak Grove Road, Poplar Bluff, Missouri. At the Southern Missouri special meeting, holders of Southern Missouri common stock will be asked to vote on the following matters:

 

·the share issuance proposal; and

 

·the Southern Missouri adjournment proposal.

 

Only holders of record of Southern Missouri common stock at the close of business on [·], 202[·], will be entitled to vote at the Southern Missouri special meeting. Each share of Southern Missouri common stock is entitled to one vote on the share issuance proposal and the Southern Missouri adjournment proposal. As of the record date, there were 9,229,151 shares of Southern Missouri common stock entitled to vote at the Southern Missouri special meeting. As of the record date, Southern Missouri’s directors and executive officers and their affiliates were entitled to vote approximately 1,589,021 shares, or approximately 17.2% of the total outstanding shares, of Southern Missouri common stock.

 

Approval of the share issuance proposal and the Southern Missouri adjournment proposal requires the affirmative vote of a majority of the shares of Southern Missouri common stock present in person or represented by proxy at the Southern Missouri special meeting and entitled to vote on such proposals. If you “ABSTAIN” from voting on the share issuance proposal or the Southern Missouri adjournment proposal, it will have the same effect as a vote AGAINST such proposals. If you fail to either submit a proxy (by mail, telephone or Internet) or vote at the Southern Missouri special meeting, or are a "street name" holder and fail to instruct your bank, broker or other nominee how to vote, it will have no effect on either the share issuance proposal or the Southern Missouri adjournment proposal.

 

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Concurrently with the execution of the merger agreement, Southern Missouri directors and certain executive officers entered into the Southern Missouri voting agreements pursuant to which they agreed to vote their shares of Southern Missouri common stock in favor of the share issuance proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Southern Missouri common stock. As of [·], 202[·], the Southern Missouri directors and executive officers who entered into the Southern Missouri voting agreements beneficially owned an aggregate of 1,394,663 shares of Southern Missouri common stock, an amount equal to approximately 15.1% of the outstanding shares of Southern Missouri common stock. For additional information regarding the voting agreements, see “The Merger — Voting Agreements.”

 

Recommendation of the Citizens Board of Directors and Reasons of Citizens for the Merger (page 46).

 

After careful consideration, Citizens’ board of directors has determined that the merger agreement and the transactions contemplated by the merger agreement, including the mergers, are advisable and in the best interests of Citizens and its common shareholders and has unanimously approved the merger agreement. Citizens’ board of directors recommends that holders of Citizens common stock vote “FOR” approval of the merger agreement proposal and “FOR” approval of the Citizens adjournment proposal. For the factors considered by Citizens’ board of directors in reaching its decision to approve the merger agreement, see “The Merger — Recommendation of Citizens’ Board of Directors; Citizens’ Reasons for the Merger.”

 

Recommendation of the Southern Missouri Board of Directors and Reasons of Southern Missouri for the Merger (page 61).

 

After careful consideration, Southern Missouri’s board of directors has determined that the merger agreement and the transactions contemplated by the merger agreement, including the mergers, are advisable and in the best interests of Southern Missouri and its common shareholders and has unanimously approved the merger agreement. Southern Missouri’s board of directors recommends that holders of Southern Missouri common stock vote “FOR” approval of the share issuance proposal and “FOR” approval of the Southern Missouri adjournment proposal. For the factors considered by Southern Missouri’s board of directors in reaching its decision to approve the merger agreement, see “The Merger — Recommendation of Southern Missouri’s Board of Directors; Southern Missouri’s Reasons for the Merger.”

 

Opinion of Citizens’ Financial Advisor (page 49)

 

Citizens retained D.A. Davidson & Co. (which we refer to as “D.A. Davidson”) to act as financial advisor to the Citizens board of directors in connection with Citizens’ consideration of a possible business combination. At the September 19, 2022, meeting at which Citizens’ board of directors considered the merger and the merger agreement, D.A. Davidson delivered to the board of directors its oral opinion, which was subsequently confirmed in writing, to the effect that, as of such date, the merger consideration was fair to the holders of Citizens common stock from a financial point of view.

 

The full text of D.A. Davidson’s opinion dated as of September 20, 2022, is attached as Appendix C to this joint proxy statement/prospectus. D.A. Davidson’s opinion was directed to the board of directors of Citizens in connection with its consideration of the merger and the merger agreement and does not constitute a recommendation to any shareholder of Citizens as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the merger and the merger agreement. D.A. Davidson’s opinion was directed only to the fairness, from a financial point of view, of the merger consideration to the holders of Citizens common stock and did not address the underlying business decision of Citizens to engage in the merger, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Citizens or the effect of any other transaction in which Citizens might engage. D.A. Davidson also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director or employee of Citizens or Southern Missouri, or any class of such persons, if any, relative to the compensation to be received in the merger by any other shareholder. D.A. Davidson’s opinion was approved by D.A. Davidson’s fairness opinion committee. D.A. Davidson’s opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by D.A. Davidson in rendering its opinion. The description of the opinion set forth above is qualified in its entirety by reference to the full text of the opinion.

 

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Opinion of Southern Missouri’s Financial Advisor (page 62)

 

Southern Missouri retained Piper Sandler & Co. (which we refer to as “Piper Sandler”) to act as financial advisor to the Southern Missouri board of directors in connection with Southern Missouri’s consideration of a possible business combination. At the September 20, 2022, meeting at which Southern Missouri’s board of directors considered the merger and the merger agreement, Piper Sandler delivered to the board of directors its oral opinion, which was subsequently confirmed in writing, to the effect that, as of such date, the merger consideration was fair, from a financial point of view, to Southern Missouri.

 

The full text of Piper Sandler’s opinion dated as of September 20, 2022, is attached as Appendix D to this joint proxy statement/prospectus. Piper Sandler’s opinion was directed to the board of directors of Southern Missouri in connection with its consideration of the merger and the merger agreement and does not constitute a recommendation to any shareholder of Southern Missouri as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the share issuance proposal. Piper Sandler’s opinion was directed only to the fairness, from a financial point of view, of the merger consideration to Southern Missouri and did not address the underlying business decision of Southern Missouri to engage in the merger, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Southern Missouri or the effect of any other transaction in which Southern Missouri might engage. Piper Sandler also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director or employee of Southern Missouri, or any class of such persons, if any, relative to the compensation to be received in the merger by any other shareholder, if any. Piper Sandler’s opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler in rendering its opinion. The description of Piper Sandler’s opinion set forth herein is qualified in its entirety by reference to the full text of the opinion.

 

Material U.S. Federal Income Tax Consequences of the Merger (page 95)

 

The mergers, taken as a whole, are intended to qualify as one or more tax-deferred “reorganizations” within the meaning of Section 368(a) of the Code. Assuming the mergers qualify as a reorganization, the federal income tax consequences to U.S. holders of Citizens common stock will depend primarily on whether they exchange their shares of Citizens common stock solely for shares of Southern Missouri common stock, solely for cash or for a combination of shares of Southern Missouri common stock and cash. It is expected that U.S. holders of Citizens common stock will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their shares of Citizens common stock solely for shares of Southern Missouri common stock pursuant to the merger, except with respect to any cash received by a Citizens shareholder in lieu of a fractional share of Southern Missouri common stock. U.S. holders of Citizens common stock who exchange their shares solely for cash should recognize gain or loss on the exchange. U.S. holders of Citizens common stock who exchange their shares for a combination of Southern Missouri common stock and cash generally will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Southern Missouri common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of Citizens common stock in the merger exceeds such U.S. holder’s adjusted tax basis in its Citizens common stock surrendered and (ii) the amount of cash received by such U.S. holder of Citizens common stock (excluding in each case any cash received in lieu of fractional shares of Southern Missouri common stock, with the gain or loss on such fractional share determined separately, as discussed under “Material U.S. Federal Income Tax Consequences of the Merger—Receipt of Cash in Lieu of a Fractional Share of Southern Missouri Stock”). Gain or loss is determined separately with respect to each block of Citizens common stock. If a U.S. holder receives a combination of shares of Southern Missouri common stock and cash (other than cash received in lieu of a fractional share of Southern Missouri common stock) in exchange for shares of Citizens common stock pursuant to the merger and determines that it has a loss with respect to any block of shares, such loss cannot be recognized as part of the merger and cannot be used to offset any gain realized on another block of shares. The actual federal income tax consequences to U.S. holders of Citizens common stock of electing to receive cash, shares of Southern Missouri common stock or a combination of cash and stock will not be ascertainable at the time Citizens shareholders make their election because it will not be known at that time how, or to what extent, the allocation and proration procedures will apply, nor will the actual values of the stock consideration and the cash consideration be known at that time.

 

For further information, see “Material U.S. Federal Income Tax Consequences of the Merger.”

 

The U.S. federal income tax consequences described above may not apply to all holders of Citizens common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your independent tax advisor for a full understanding of the particular tax consequences of the merger to you.

 

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Accounting Treatment (Page 78)

 

The merger will be accounted for as an acquisition of Citizens by Southern Missouri under the acquisition method of accounting in accordance with U.S. generally accepted accounting principles.

 

Holders of Citizens Common Stock Have Dissenters’ Rights in Connection with the Merger (page 78)

 

Under the MGBCL, any holder of Citizens common stock can dissent from the merger and elect to have the estimated fair value of his or her shares paid in cash instead of receiving the merger consideration under the merger agreement.

 

To assert dissenters' rights, a holder of such shares must satisfy all of the following conditions:

 

·deliver a written objection to the merger to Citizens before the vote on the merger agreement proposal;

 

·not vote in favor of the merger agreement proposal. The return of a signed proxy which does not specify a vote against the merger agreement proposal or a direction to abstain will constitute a waiver of the shareholder's right to dissent; and

 

·within 20 days following the effective date of the merger, file a written demand for payment with Southern Missouri and state in the written demand the number of shares of Citizens common stock owned by such shareholder.

 

A copy of the relevant sections of the MGBCL governing this process is attached to this joint proxy statement/prospectus as Appendix B.

 

The exercise of dissenters’ rights by holders of Citizens common stock will result in the recognition of gain or loss, as the case may be, for federal income tax purposes.

 

Citizens’ Executive Officers and Directors Have Interests in the Merger that Differ from Your Interests (page 73)

 

Citizens shareholders should be aware that Citizens’ directors and executive officers have interests in the merger and arrangements that are different from, or in addition to, those of Citizens shareholders generally. Citizens’ board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that Citizens shareholders vote in favor of approving the merger agreement.

 

These interests include the following:

 

·certain executive officers of Citizens and/or CBTC have employment or special compensation agreements with Citizens and CBTC that provide for cash payments in the event of a qualifying termination of employment (or, for those executives with special compensation arrangements, a diminution of the executive’s responsibilities, duties, title or pay) in connection with a change in control;

 

·outstanding stock options held by executive officers, all of which are currently exercisable, that are not exercised prior to the effective time will be cashed-out in connection with the merger based upon the difference between the cash merger consideration per share in the merger and the exercise price per share of the options;

 

·Southern Missouri has agreed to appoint one person who currently serves as a director of Citizens to be a director of Southern Missouri, for a term expiring at the 2025 annual meeting of shareholders of Southern Missouri, and a director of Southern Bank, in each case to be effective upon completion of the merger (such person has not yet been determined as of the date of this joint proxy statement/prospectus);

 

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·certain directors and executive officers of Citizens have delivered to Southern Missouri an executed voting agreement and a resignation, non-solicitation and non-disclosure agreement for no additional consideration; and

 

·Citizens’ directors and officers will be entitled to continued indemnification and liability insurance coverage following the merger.

 

For a more complete description of these interests, see “The Merger — Interests of Citizens’ Directors and Executive Officers in the Merger.”

 

Regulatory Approvals

 

Each of Southern Missouri and Citizens has agreed to cooperate with the other and use commercially reasonable best efforts to obtain all regulatory approvals required to complete the transactions contemplated by the merger agreement, including the merger, the holding company merger and the bank merger. These include approvals from the Federal Reserve Board and the Missouri Division. The U.S. Department of Justice may also review the impact of the mergers on competition.

 

As of the date of this joint proxy statement/prospectus, all applications and notices necessary to obtain all required regulatory approvals have been filed. There can be no assurance as to whether all required regulatory approvals will be obtained or the dates of the approvals. There also can be no assurance that the regulatory approvals received will not contain a condition or requirement that results in a failure to satisfy the conditions to closing set forth in the merger agreement. See “The Merger — Conditions to Complete the Merger.”

 

Conditions that Must be Satisfied or Waived for the Merger to Occur (page 91)

 

As more fully described in this joint proxy statement/prospectus and in the merger agreement, the completion of the merger is subject to a number of conditions being satisfied or, where legally permitted, waived. These conditions include:

 

·approval of the merger agreement proposal by Citizens’ shareholders and approval of the share issuance proposal by Southern Missouri shareholders;

 

·the filing by Southern Missouri with NASDAQ of a notification form for the listing of the shares of Southern Missouri common stock to be issued in the merger, and the non-objection by NASDAQ to such listing;

 

·the receipt of all required regulatory approvals without the imposition of any unduly burdensome condition upon Southern Missouri;

 

·the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus is a part;

 

·the absence of any order, injunction, decree or law, rule or regulation preventing or making illegal the completion of the mergers;

 

·subject to the standards set forth in the closing conditions in the merger agreement, the accuracy of the representations and warranties of Southern Missouri and Citizens on the date of the merger agreement and the closing date of the merger;

 

·performance in all material respects by each of Southern Missouri and Citizens of its obligations under the merger agreement;

 

·receipt by Citizens of certain third-party consents to the merger;

 

·the number of shares of Citizens common stock the holders of which have perfected dissenters’ rights under Missouri law shall be less than 10.0% of the total number of outstanding shares of Citizens common stock; and

 

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·receipt by each party of an opinion from such party’s tax counsel that the merger will qualify as a tax-free reorganization for U.S. federal income tax purposes.

 

We expect to complete the merger in the first calendar quarter of 2023. No assurance can be given, however, as to when or if the conditions to the merger will be satisfied or waived, or that the merger will be completed.

 

Non-Solicitation (page 89)

 

Citizens has agreed that it generally will not solicit or encourage any inquiries or proposals regarding other acquisition proposals by third parties. Citizens may respond to an unsolicited proposal if the board of directors of Citizens determines in good faith that the proposal constitutes or is reasonably likely to result in a transaction that is more favorable from a financial point of view to Citizens’ shareholders than the merger and that the board’s failure to respond would result in a violation of its fiduciary duties. Citizens must promptly notify Southern Missouri if it receives any other acquisition proposals.

 

Termination of the Merger Agreement (page 91)

 

The merger agreement can be terminated at any time prior to completion of the merger in the following circumstances:

 

·by mutual written consent of Southern Missouri and Citizens;

 

·by either Southern Missouri or Citizens if any governmental entity that must grant a required regulatory approval has denied approval of the mergers and such denial has become final and non-appealable or any governmental entity of competent jurisdiction has issued a final non-appealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the mergers, unless the failure to obtain a required regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement;

 

·by either Southern Missouri or Citizens if the merger has not been completed on or before June 30, 2023, unless the failure of the merger to be completed by that date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement; and provided, further, that if additional time is necessary in order to obtain any required regulatory approvals to complete the merger, then the termination date shall be automatically extended until August 31, 2023.

 

·by either Southern Missouri or Citizens (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement) if there is a breach of any of the covenants or agreements or any of the representations or warranties set forth in the merger agreement on the part of the other party which either individually or in the aggregate would result in, if occurring or continuing on the date the merger is completed, the failure of any closing condition of the terminating party and which is not cured within 20 days following written notice to the party committing such breach or by its nature or timing cannot be cured during such period;

 

·by Southern Missouri, if the board of directors of Citizens fails to recommend in this joint proxy statement/prospectus that its shareholders approve the merger agreement proposal, or the Citizens board of directors withdraws, modifies or makes or causes to be made any third party or public communication announcing an intention to modify or withdraw such recommendation in a manner adverse to Southern Missouri, or Citizens materially breaches any of its obligations relating to third-party acquisition proposals, or Citizens refuses to call or hold the Citizens special meeting, except as otherwise permitted in the merger agreement in circumstances not involving an acquisition proposal;

 

·by Citizens, if the board of directors of Southern Missouri fails to recommend in this joint proxy statement/prospectus that its shareholders approve the share issuance proposal, or the Southern Missouri board of directors (or committee thereof) withdraws, modifies or makes or causes to be made any third party or public communication announcing an intention to modify or withdraw such recommendation in a manner adverse to Citizens, or Southern Missouri refuses to call or hold the Southern Missouri special meeting;

 

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·by either Southern Missouri or Citizens, if the circumstances in the above two paragraphs are not applicable and (i) Citizens does not obtain its shareholder approval of the merger agreement proposal or (ii) Southern Missouri does not obtain its shareholder approval of the share issuance proposal;

 

·by Citizens prior to Citizens obtaining shareholder approval of the merger agreement in order to enter into an agreement with a third party with respect to an unsolicited superior acquisition proposal. An “acquisition proposal” means a tender or exchange offer, proposal for a merger, consolidation or other business combination involving Citizens or CBTC or any proposal or offer to acquire in any manner more than 24.99% of the voting power in, or more than 24.99% of the fair market value of the business, assets or deposits of, Citizens or CBTC. A “superior acquisition proposal” means a written acquisition proposal that the Citizens board of directors concludes in good faith to be more favorable from a financial point of view to its shareholders than the merger (after receiving the advice of its financial advisors, after taking into account the likelihood of consummation of such proposal on its terms, and after taking into account all legal, financial, regulatory and other aspects of such proposal), except that for purposes of the term “superior acquisition proposal,” references to “more than 24.99%” in the definition of “acquisition proposal” are replaced with references to “a majority”; or

 

Citizens may terminate the merger agreement if, at any time during the five-day period commencing on the 20th day prior to the closing date (the “Determination Date”), both of the following conditions are satisfied:

 

·the average of the daily closing prices of Southern Missouri common stock for the 20 consecutive trading days immediately preceding the Determination Date (the “Buyer Market Value”) is less than $42.02; and

 

·the number obtained by dividing the Buyer Market Value by $52.53 (the average of the daily closing prices of Southern Missouri common stock for the 20 consecutive trading days immediately preceding the execution of the merger agreement, is less than the number obtained by subtracting 0.20 from the average of the daily closing values of the Nasdaq Bank Index for the twenty (20) consecutive trading days preceding the Determination Date divided by the average of the daily closing values of the Nasdaq Bank Index for the twenty (20) consecutive trading days immediately preceding the execution of the merger agreement (the “Index Ratio”).

 

However, if Citizens chooses to exercise this termination right, Southern Missouri has the option, within five business days of receipt of notice from Citizens, to adjust the per share stock consideration and prevent termination under this provision.

 

Termination Fee (page 93)

 

Set forth below are the termination events that would result in Citizens being obligated to pay Southern Missouri a $5,500,000 termination fee:

 

·a termination by Southern Missouri based on (i) the board of directors of Citizens either failing to continue its recommendation that the Citizens shareholders approve the merger agreement proposal or adversely changing such recommendation, except as otherwise permitted in the merger agreement in circumstances not involving an acquisition proposal, or (ii) Citizens materially breaching the provisions of the merger agreement relating to third-party acquisition proposals;

 

·a termination by Citizens prior to it obtaining shareholder approval of the merger agreement in order to enter into an agreement with a third party with respect to an unsolicited superior acquisition proposal; or

 

·a termination by either Southern Missouri or Citizens as a result of the failure of Citizens’ shareholders to approve the merger agreement if prior to such termination there is publicly announced another acquisition proposal and within one year of termination Citizens or CBTC enters into a definitive agreement for or consummates an acquisition proposal (as defined above, except that references to “more than 24.99%” in the definition of “acquisition proposal” are replaced with references to “a majority”).

 

In the event Southern Missouri terminates the merger agreement as a result of a willful and material breach by Citizens of the provisions of the merger agreement relating to third-party acquisition proposals, Southern Missouri is not required to accept the termination fee from Citizens and may pursue alternate relief against Citizens.

 

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The Rights of Citizens Shareholders Will Change as a Result of the Merger (page 127)

 

The rights of holders of Citizens common stock will change as a result of the merger due to differences in Southern Missouri’s and Citizens’ governing documents. The rights of holders of Citizens common stock are governed by Missouri law and Citizens’ articles of incorporation and bylaws as amended to date, and those of Southern Missouri’s shareholders are governed by Missouri law and by Southern Missouri’s articles of incorporation and bylaws as amended to date. Upon completion of the merger, holders of Citizens common stock, to the extent they receive Southern Missouri common stock as merger consideration, will become shareholders of Southern Missouri, as the continuing legal entity in the merger, and their rights will be governed by Missouri law and by Southern Missouri’s articles of incorporation and bylaws.

 

See “Comparison of Shareholder Rights” for a description of the material differences in shareholder rights under each of the Southern Missouri and Citizens governing documents.

 

Citizens Shareholders Should Wait to Surrender Their Stock Certificates Until Receipt of the Election Form (page 80)

 

To receive the merger consideration, Citizens shareholders will need to surrender their Citizens common stock certificates. As discussed above, not less than 20 business days prior to the anticipated election deadline, Southern Missouri will send an election form to holders of record of Citizens common stock. The election form will include transmittal materials containing instructions for exchanging your Citizens stock certificates.

 

Please do not send in your stock certificates until you receive these instructions.

 

Risk Factors (page 22)

 

You should consider all the information contained in or incorporated by reference into this joint proxy statement/prospectus in deciding how to vote on the proposals presented in this joint proxy statement/prospectus. In particular, you should consider the factors under “Risk Factors.”

 

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RISK FACTORS

 

In addition to general investment risks and the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed under the section "Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote for the proposals presented in this joint proxy statement/prospectus. You should also read and consider the risks associated with the business of Southern Missouri because these risks will relate to the combined company. Descriptions of some of these risks can be found in Southern Missouri’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the SEC and other reports filed by Southern Missouri with the SEC and incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”

 

The aggregate merger consideration to be paid to the holders of Citizens common stock will depend on a number of factors.

 

Under the terms of the merger agreement, each Citizens shareholder is projected to receive, at the election of the shareholder and subject to the proration and allocation procedures set forth in the merger agreement, 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 number of outstanding shares of Citizens immediately prior to closing. Based on Southern Missouri’s $[] closing price on [], 2022 (the Southern Missouri common stock price), the transaction’s indicated value was approximately $[] million, with merger consideration comprised of stock and cash at a 72:25 ratio. Citizens shareholders who would otherwise be entitled to a fractional share of Southern Missouri common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $46.68.

 

The aggregate merger consideration to be paid to the holders of Citizens common stock will depend on several factors, including Citizens’ consolidated equity capital determined in accordance with U.S. Generally Accepted Accounting Principal (“GAAP”), with the exception of no adjustment of accumulated other comprehensive income from June 30, 2022 to the measurement date (the close of business on the last business day of the month immediately preceding the month in which the merger closing occurs), and the total amount of any of Citizens’ transaction expenses which have not been paid or accrued as of that date. In the event that Citizens’ consolidated equity capital is below $93.5 million as of the last business day of the month immediately preceding the closing of the merger, after taking into account transaction expenses, the aggregate merger consideration payable to holders of Citizens common stock will decrease. Conversely, if Citizens’ consolidated equity capital is above $95.0 million as of the last business day of the month immediately preceding the closing of the merger, after taking into account transaction expenses, the aggregate merger consideration payable to holders of Citizens common stock will increase. Accordingly, Citizens shareholders will not know at the time of its special meeting or the merger consideration election deadline the exact amount of merger consideration they will receive upon completion of the merger. See, The Merger — Terms of the Merger.”

 

Because the market price of Southern Missouri common stock will fluctuate, Citizens shareholders who elect to receive Southern Missouri common stock cannot be certain prior to the completion of the merger of the market value of the per share stock merger consideration they will receive.

 

The market value of the per share stock consideration to be paid to the holders of Citizens common stock who elect to receive Southern Missouri common stock as the merger consideration will fluctuate with the price of Southern Missouri common stock on the date Southern Missouri and Citizens announced the merger, on the date that this joint proxy statement/prospectus was mailed to Citizens shareholders, on the date of the Citizens special meeting, on the date elections regarding the form of merger consideration are made and on the date the merger is completed and thereafter. There will not be any adjustment to the per share stock consideration for changes in the market price of shares of Southern Missouri common stock, except for a change that would provide Citizens a termination right. See “ The Merger Termination of the Merger Agreement.” Stock price changes may result from a variety of factors, many of which are beyond the control of Southern Missouri and Citizens including, but not limited to, general market and economic conditions, changes in our respective businesses, operations and prospects and regulatory considerations. Therefore, you will not know at the time of the companies’ special meetings the precise market value of the per share stock consideration to be received by Citizens shareholders upon completion of the merger if Southern Missouri common stock is elected to be received as the merger consideration. We urge you to obtain current market quotations for Southern Missouri common stock (NASDAQ: trading symbol “SMBC”). There are no current market quotations for Citizens common stock because Citizens is a privately owned corporation and its common stock is not traded on any established public trading market.

  

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The market price of Southern Missouri common stock after the merger may be affected by factors different from those currently affecting the value of Citizens common stock.

  

Upon completion of the merger, holders of Citizens common stock may become holders of Southern Missouri common stock, based upon the election and allocation procedures discussed herein. Southern Missouri’s business differs in important respects from that of Citizens and, accordingly, the results of operations of Southern Missouri and the market price of Southern Missouri common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of Citizens.

 

Citizens shareholders might not receive the form of merger consideration that they elect.

 

Citizens shareholders will receive the form of merger consideration elected if the Citizens shareholders do not elect to receive more of that form of consideration than is available under the merger agreement. The merger agreement provides that the aggregate cash consideration that will be paid for shares of Citizens stock is twenty-five percent (25%) of the aggregate merger consideration, with the remaining consideration consisting of shares of Southern Missouri common stock. If Citizens shareholders elect to receive more of one form of consideration than is available, we will allocate the available amount ratably among the shareholders electing to receive that form of consideration, and those shareholders will receive the other form of consideration for the balance of their shares, as applicable. Accordingly, Citizens shareholders might receive a form of merger consideration that differs from that elected.

 

Citizens’ shareholders will have less influence as shareholders of Southern Missouri than as shareholders of Citizens.

 

Holders of Citizens common stock currently have the right to vote in the election of the board of directors of Citizens and on other matters affecting Citizens. Immediately following the merger, it is expected that the current shareholders of Citizens as a group who receive Southern Missouri common stock as merger consideration pursuant to the election and allocation procedures will hold an ownership interest of approximately 18% of the then outstanding Southern Missouri common stock. When the merger occurs, each holder of Citizens common stock who becomes a shareholder of Southern Missouri will have a percentage ownership of the combined organization much smaller than such shareholder’s percentage ownership of Citizens. Because of this, Citizens’ shareholders will have less influence on the management and policies of Southern Missouri than they now have on the management and policies of Citizens.

 

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on Southern Missouri following the merger.

 

Before the mergers may be completed, Southern Missouri and Citizens must obtain approvals from the Federal Reserve Board and the Missouri Division. Other approvals, waivers or consents from regulators may also be required. An adverse development in either party’s regulatory standing or other factors could result in an inability to obtain regulatory approvals or delay their receipt. Regulators may also impose conditions on the completion of the merger or the bank merger or require changes to the terms of the merger or the bank merger. While Southern Missouri and Citizens do not currently expect that any such conditions or changes will be imposed or required, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs on or limiting the revenues of Southern Missouri following the merger, any of which might have an adverse effect on Southern Missouri following the merger. Southern Missouri is not obligated to complete the merger if the regulatory approvals received in connection with the completion of the merger impose any unduly burdensome condition upon Southern Missouri. See “The Merger — Regulatory Approvals.”

 

Combining the two companies may be more difficult, costly or time consuming than expected, and the anticipated benefits and cost savings of the merger may not be realized.

 

The success of the merger, including anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine the businesses of Southern Missouri and Citizens. To realize these anticipated benefits and cost savings, after the completion of the merger, Southern Missouri expects to integrate Citizens’ business into its own. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect Southern Missouri’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. If Southern Missouri experiences difficulties with the integration process, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause Southern Missouri and/or Citizens to lose customers or cause customers to remove their accounts from Southern Missouri and/or Citizens and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Citizens and Southern Missouri during this transition period and on Southern Missouri for an undetermined period after completion of the merger. In addition, the actual cost savings of the merger could be less than anticipated.

 

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Citizens’ directors and executive officers have interests in the merger that may differ from the interests of Citizens’ shareholders.

 

Citizens’ shareholders should be aware that Citizens’ directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of Citizens’ shareholders generally. These interests and arrangements may create potential conflicts of interest. Citizens’ board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that Citizens’ shareholders vote in favor of approving the merger agreement. For a more complete description of these interests, see “The Merger — Interests of Citizens’ Directors and Executive Officers in the Merger.”

 

The merger agreement limits Citizens’ ability to pursue alternative acquisition proposals and requires Citizens to pay a termination fee of $5,500,000 under certain circumstances, including circumstances relating to alternative acquisition proposals.

 

The merger agreement generally prohibits Citizens from initiating, soliciting, encouraging or knowingly facilitating certain third-party acquisition proposals. See “The Merger — Agreement Not to Solicit Other Offers.” The merger agreement also provides that Citizens must pay Southern Missouri a termination fee of $5,500,000 if the merger agreement is terminated under certain circumstances, including Citizens’ failure to abide by its obligations under the merger agreement not to solicit alternative acquisition proposals. See “The Merger — Termination Fee.” These provisions might discourage a potential competing acquirer from considering or proposing an acquisition of all or a significant part of Citizens or CBTC at a greater value to Citizens’ shareholders than Southern Missouri has offered in the merger. The payment of the termination fee could also have an adverse effect on Citizens’ financial condition.

 

Termination of the merger agreement could negatively impact Citizens regardless of whether the $5,500,000 termination fee is payable.

 

If the merger agreement is terminated, there may be various negative consequences for Citizens regardless of whether the $5,500,000 termination fee is payable. For example, Citizens’ business may be impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the value of Citizens’ common stock could decline to the extent current values reflect an assumption that the merger will be completed.

 

The opinions received by the Southern Missouri and Citizens boards of directors from their respective financial advisors do not reflect any changes since the date of such opinions.

 

Neither the opinion delivered by D.A. Davidson to the Citizens board nor the opinion delivered by Piper Sandler to the Southern Missouri board speaks as of any date other than the date of such opinions, which was September 20, 2022. Neither D.A. Davidson’s opinion nor Piper Sandler’s opinion reflects changes that may occur or may have occurred after the date of such opinions, including changes to the operations and prospects of Citizens or Southern Missouri, changes in general market and economic conditions or regulatory or other factors. Changes in the operations and prospects of Citizens or Southern Missouri, general market and economic conditions and other factors that may be beyond the control of Citizens and Southern Missouri may alter the value of Citizens or Southern Missouri or the market price for shares of Citizens common stock or Southern Missouri common stock by the time the merger is completed. For a description of D.A. Davidson’s opinion, see “The Merger — Opinion of Citizens’ Financial Advisor” beginning on page 49. For a description of Piper Sandler’s opinion, see “The Merger  — Opinion of Southern Missouri’s Financial Advisor” beginning on page 62. For a description of the factors considered by the Citizens board in determining to approve the merger, see “The Merger  — Recommendation of Citizens’ Board of Directors; Citizens’ Reasons for the Merger” beginning on page 46. For a description of the factors considered by the Southern Missouri board in determining to approve the merger, see “The Merger — Recommendation of Southern Missouri’s Board of Directors; Southern Missouri’s Reasons for the Merger” beginning on page 61.

 

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Citizens will be subject to business uncertainties and contractual restrictions while the merger is pending.

 

Southern Missouri and Citizens have operated independently and, until the completion of the merger, will continue to operate independently. Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Citizens and consequently on Southern Missouri. These uncertainties may impair Citizens’ ability to attract, retain or motivate key personnel until the merger is consummated, and could cause customers and others that deal with Citizens to seek to change existing business relationships with Citizens. Retention of certain employees may be challenging during the pendency of the merger as certain employees may experience uncertainty about their future roles with Southern Missouri. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Southern Missouri, Southern Missouri’s business following the merger could be harmed. In addition, the merger agreement restricts Citizens from making certain acquisitions and taking other specified actions until the merger occurs without the consent of Southern Missouri. These restrictions may prevent Citizens from pursuing attractive business opportunities that may arise prior to the completion of the merger. See “The Merger —Covenants and Agreements-Conduct of Businesses Prior to the Completion of the Merger.”

 

If the merger is not completed, Citizens and Southern Missouri will have incurred substantial expenses without realizing the expected benefits of the merger.

 

The merger is subject to certain closing conditions, including the receipt of regulatory approvals, the approval of the merger agreement proposal by the shareholders of Citizens and approval of the share issuance proposal by the shareholders of Southern Missouri, as well as other conditions, some of which are beyond Southern Missouri’s and Citizens’ control. Neither Southern Missouri nor Citizens can predict when or whether these conditions will be satisfied. Citizens and Southern Missouri have incurred or will incur substantial expenses in connection with due diligence surrounding and the negotiation and completion of the transactions contemplated by the merger agreement. If the merger is not completed, Citizens and Southern Missouri would have to recognize these expenses without realizing the expected benefits of the merger.

 

The dissenters’ rights appraisal process is uncertain.

 

Citizens shareholders may or may not be entitled to receive more than the amount provided for in the merger agreement for their shares of Citizens common stock if they elect to exercise their right to dissent from the proposed merger, depending on the appraisal of the fair value of the Citizens common stock pursuant to the dissenting shareholder procedures under the MGBCL. See “The Merger — Dissenters’ Rights of Citizens Shareholders” beginning on page 78 and Appendix B to this joint proxy statement/prospectus. For this reason, the amount of cash that you might be entitled to receive should you elect to exercise your right to dissent from the merger may be more or less than the value of the merger consideration to be paid pursuant to the merger agreement. In addition, it is a condition to Southern Missouri’s obligation to complete the merger that the holders of not more than 10% of the outstanding shares of Citizens common stock exercise dissenters’ rights. The number of shares of Citizens common stock as to which dissenters’ rights will be exercised under the MGBCL is not known and, therefore, there is no assurance that this closing condition will be satisfied.

 

The merger may fail to qualify as a tax-free reorganization under the Internal Revenue Code.

 

The merger of Citizens into Merger Sub has been structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code. Neither Southern Missouri nor Citizens intends to request a ruling from the IRS with respect to the United States federal income tax consequences of the merger. If the merger fails to qualify as a tax-free reorganization, a Citizens shareholder would likely recognize gain or loss on each share of Citizens common stock exchanged in the merger in the amount of the difference between the fair market value of the Southern Missouri common stock or cash received by the Citizens shareholder in the exchange and the shareholder’s basis in the Citizens shares surrendered.

 

See “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 95 for a more detailed discussion of the federal income tax consequences of the transaction.

 

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The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus is illustrative only and the actual financial condition and results of operations after the merger may differ materially.

  

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what Southern Missouri's actual financial condition or results of operations would have been had the merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information reflects adjustments, which are based upon preliminary estimates, to record the Citizens identifiable tangible and intangible assets to be acquired and liabilities to be assumed at fair value and the resulting goodwill to be recognized. The purchase price allocation reflected in this joint proxy statement/prospectus is preliminary and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the consolidated assets and liabilities of Citizens as of the date of the completion of the merger. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this joint proxy statement/prospectus. For more information, please see the section entitled "Unaudited Pro Forma Condensed Combined Financial Information" beginning on page 30.

 

Sales of substantial amounts of Southern Missouri common stock in the open market by former Citizens shareholders could depress Southern Missouri’s stock price.

 

Shares of Southern Missouri common stock that are issued to Citizens shareholders in the merger will be freely tradable without restrictions or further registration under the Securities Act, except that shares of Southern Missouri common stock received by persons who are or become affiliates of Southern Missouri for purposes of Rule 144 under the Securities Act may be resold by them only in transactions permitted by Rule 144, or as otherwise permitted under the Securities Act. Based on the number of shares of Citizens common stock outstanding as of the Citizens record date (which excludes any assumed conversion of Citizens stock options or adjustments to the aggregate merger consideration), Southern Missouri currently expects to issue approximately 2,015,000 shares of Southern Missouri common stock in connection with the merger. If the merger is completed and if former shareholders of Citizens sell substantial amounts of Southern Missouri common stock in the public market following completion of the merger, the market price of Southern Missouri common stock may decrease. These sales might also make it more difficult for Southern Missouri to sell equity or equity-related securities at a time and price that it otherwise would deem appropriate.

 

Use of Southern Missouri’s common stock for future acquisitions or to raise capital may be dilutive to existing shareholders.

 

When Southern Missouri determines that appropriate strategic opportunities exist, it may acquire other financial institutions and related businesses, subject to applicable regulatory requirements. Southern Missouri may use Southern Missouri’s common stock for such acquisitions. Southern Missouri may also seek to raise capital for such acquisitions through selling additional common stock. It is possible that the issuance of additional common stock in such acquisitions or capital transactions may be dilutive to the interests of Southern Missouri’s existing shareholders. Southern Missouri may also sell additional shares of Southern Missouri common stock, or securities convertible into or exchangeable for such shares, in subsequent public or private offerings to raise capital. Future issuance of any new shares could cause further dilution in the value of outstanding shares of Southern Missouri common stock. Sales of substantial amounts of Southern Missouri common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of Southern Missouri common stock.

 

Southern Missouri may issue shares of preferred stock in the future, which could make it difficult for another company to acquire it or could otherwise adversely affect holders of its common stock, which could depress the price of our common stock.

 

Although there are currently no shares of Southern Missouri preferred stock issued and outstanding, Southern Missouri’s articles of incorporation authorize the issuance of up to 500,000 shares of one or more series of preferred stock. The board also has the power, without shareholder approval, to set the terms of any series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our common stock with respect to dividends or in the event of a dissolution, liquidation or winding up and other terms. In the event that Southern Missouri issues preferred stock in the future that has preference over its common stock with respect to payment of dividends or upon its liquidation, dissolution or winding up, or if Southern Missouri issues preferred stock with voting rights that dilute the voting power of its common stock, the rights of the holders or the market price of Southern Missouri common stock could be adversely affected. In addition, the ability of Southern Missouri’s board of directors to issue shares of preferred stock without any action on the part of its shareholders may impede a takeover of Southern Missouri and prevent a transaction perceived to be favorable to its shareholders.

 

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A large shareholder of Citizens will have board observation rights in Southern Missouri following completion of the merger.

 

Citizens is party to an agreement with Castle Creek, which beneficially owns an aggregate of 774,440 shares of Citizens common stock, representing approximately 33.0% of the total outstanding common stock of Citizens, pursuant to which, so long as Castle Creek continues to hold a designated minimum percentage of shares of Citizens common stock, Citizens is required, upon the request of Castle Creek, to cause to be elected or appointed to the Citizens and CBTC board of directors a person designated by Castle Creek. For so long as Castle Creek continues to hold the required minimum percentage of shares, but has not caused Citizens to elect or appoint a director to its boards, Citizens is required to invite a person designated by Castle Creek to attend, in a non-voting, nonparticipating observer capacity, all meetings of the Citizens and CBTC boards of directors and committees thereof. The agreement also provides for certain "gross-up" rights entitling such shareholder to prior notice of, and to participate in, future equity offerings of Citizens.

 

In connection with the merger, Southern Missouri entered into a letter agreement with Castle Creek, which will be effective upon consummation of the merger and replace the current agreement between such shareholder and Citizens. The new Southern Missouri agreement provides that Castle Creek will be entitled to have one representative appointed as a board observer to attend (in a nonvoting capacity) Southern Missouri and Southern Bank board of directors' meetings during the first two years following consummation of the merger, provided that Castle Creek continues to own at least 5% of Southern Missouri’s outstanding common stock. The Southern Missouri agreement also provides for certain "gross-up" rights entitling such shareholder to prior notice of, and to participate in, future equity offerings of Southern Missouri so long as Castle Creek continues to hold at least 5% of Southern Missouri’s outstanding common stock.

 

Assuming completion of the merger and that Castle Creek receives merger consideration consisting of 75% stock and 25% cash, Castle Creek is expected to own approximately 5.9% of Southern Missouri’s outstanding common stock immediately following the merger, and may own up to approximately 7.9% of Southern Missouri’s outstanding common stock if it receives the merger consideration consisting of all stock for its Citizens common stock.

 

Litigation may be filed against the board of directors of Southern Missouri or Citizens that could prevent or delay the completion of the merger or result in the payment of damages following completion of the merger.

 

In connection with the merger, it is possible that Southern Missouri shareholders or Citizens shareholders may file putative class action lawsuits against the board of directors of Southern Missouri or Citizens. Among other remedies, these shareholders could seek to enjoin the merger. The outcome of any such litigation is uncertain. If a dismissal is not granted or a settlement is not reached, such potential lawsuits could prevent or delay completion of the merger and result in substantial costs to Southern Missouri and Citizens, including any costs associated with indemnification obligations of Southern Missouri or Citizens. The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is consummated may adversely affect the combined company’s business, financial condition, results of operations, cash flows and market price.

 

Risk factors relating to Southern Missouri and its business.

 

Southern Missouri is, and will continue to be, subject to the risks described in Southern Missouri’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information” on page 133.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This joint proxy statement/prospectus contains or incorporates by reference a number of forward-looking statements regarding the financial condition, results of operations, earnings outlook and business prospects of Southern Missouri, Citizens and the potential combined company and may include statements for the period following the completion of the merger. You can identify many of these statements by looking for words such as “expects,” “projects,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible” and other similar expressions. Statements about the expected timing, completion and effects of the merger and all other statements in this joint proxy statement/prospectus or in the documents incorporated by reference in this joint proxy statement/prospectus other than historical facts constitute forward-looking statements.

 

Forward-looking statements involve certain risks and uncertainties. The ability of either Southern Missouri or Citizens to predict results or actual effects of its plans and strategies, or those of the combined company, is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” and those discussed in the filings of Southern Missouri that are incorporated into this joint proxy statement/prospectus by reference, as well as the following:

 

·the requisite regulatory and shareholder approvals for the merger might not be obtained or other conditions to completion of the merger might not be satisfied or waived;

 

·expected cost savings, synergies and other benefits from Southern Missouri's merger and acquisition activities, including the merger with Citizens, 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 failure to attract new customers and retain existing customers in the manner anticipated;

 

·reputational risks and the potential adverse reactions or changes to business, customer or employee relationships, including those resulting from the announcement or completion of the proposed merger;

 

·deposit attrition, operating costs, customer loss and business disruption following the transaction, including difficulties in maintaining relationships with employees, may be greater than expected;

 

·diversion of management time on merger-related issues;

 

·changes in Southern Missouri’s or Citizens’ stock price before closing, including as a result of its financial performance prior to closing or transaction-related uncertainty, or more generally due to broader stock market movements, and the performance of financial companies and peer group companies;

 

·the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the merger agreement;

 

·potential adverse impacts to economic conditions in Southern Missouri’s and Citizens’ local market areas, other markets where Southern Missouri or Citizens have lending relationships, or other aspects of Southern Missouri’s and Citizens’ 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 Southern Missouri and Citizens conduct operations;

 

·fluctuations in interest rates;

 

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·monetary and fiscal policies of the Federal Reserve Board 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;

 

·the ability to access cost-effective funding;

 

·the timely development of and acceptance of 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, as well as agricultural business conditions;

 

·demand for loans and deposits in the market areas of Southern Missouri and Citizens;

 

·legislative or regulatory changes that adversely affect Southern Missouri’s or Citizens’ business;

 

·changes in accounting principles, policies or guidelines;

 

·results of examinations of Southern Missouri and Citizens by their respective regulators, including the possibility that such regulators may, among other things, require an increase the reserve for loan losses or write-down of assets;

 

·the impact of technological changes; and

 

·the successful management of the risks involved in the foregoing.

 

Annualized, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results.

 

Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. For any forward-looking statements made in this joint proxy statement/prospectus or in any documents incorporated by reference into this joint proxy statement/prospectus, Southern Missouri and Citizens claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this joint proxy statement/prospectus or the date of the applicable document incorporated by reference in this joint proxy statement/prospectus. Southern Missouri and Citizens do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement/prospectus and attributable to Southern Missouri, Citizens or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this joint proxy statement/prospectus.

 

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UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Southern Missouri and Citizens and has been prepared to illustrate the financial effect of the merger. The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Southern Missouri and its subsidiaries and Citizens and its subsidiaries, as an acquisition by Southern Missouri of Citizens using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Citizens will be recorded by Southern Missouri at their respective fair values as of the date the merger is completed.

 

The unaudited pro forma condensed combined balance sheet gives effect to the transaction as if the transaction had occurred on June 30, 2022. The unaudited pro forma condensed combined income statement for the year ended June 30, 2022, gives effect to the transaction as if the transaction had become effective at July 1, 2021.

 

This unaudited pro forma condensed combined financial information reflects the merger of Citizens with and into Southern Missouri based upon estimated preliminary acquisition accounting adjustments. Actual adjustments will be made as of the effective date of the merger and, therefore, may differ from those reflected in the unaudited pro forma condensed combined financial information.

 

Southern Missouri and Citizens have different fiscal years. Citizens’ fiscal year ends on December 31 of each year and Southern Missouri’s fiscal year ends on June 30 of each year. As the fiscal years differed by more than 93 days, pursuant to SEC rules, Citizens’ financial information was adjusted for the purpose of preparing the unaudited pro forma condensed statements of income. The historical income statement information of Citizens used in the unaudited pro forma condensed combined statements of income for the year ended June 30, 2022, was prepared by taking the audited condensed combined income statement for the year ended December 31, 2021, subtracting the unaudited condensed combined income statement for the six months ended June 30, 2021, and adding the unaudited condensed combined income statement for the six months ended June 30, 2022.

 

The unaudited pro forma condensed combined financial information includes estimated adjustments to record Citizens’ assets and liabilities at their respective fair values based on Southern Missouri’s management’s best estimate using the information available at this time. The preliminary pro forma adjustments may be revised as additional information becomes available and as additional analyses are performed. The final allocation of the purchase price will be determined after the merger is completed and after the completion of a final analysis to determine the fair values of Citizens’ tangible and identifiable intangible assets and liabilities as of the closing date. The final purchase price adjustments may differ materially from the preliminary pro forma adjustments. Increases or decreases in the fair value of certain balance sheet amounts and other items of Citizens as compared to the information presented in this document may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact the statement of income due to adjustments in yield and/or amortization of adjusted assets and liabilities.

 

FASB issued ASU 2016-13, Financial Instruments – Credit Losses, also known as the current expected credit loss (“CECL”) standard, which requires that the measurement of all expected credit losses for financial assets reported at amortized cost and held at the reporting date be based on historical experience, current conditions, and reasonable and supportable forecasts. This standard requires financial institutions and other organizations to use forward-looking information to better inform their credit loss estimates. The standard was effective for Southern Missouri as of July 1, 2020, however it was not effective for Citizens. On July 1, 2020, Southern Missouri adopted the standard. Subsequent to its adoption, Southern Missouri no longer maintains the incurred loss model framework. Citizens is not required to adopt the standard until January 1, 2023. The pro forma balance sheet reflects an adjustment to estimate the impact of the application of ASU 2016-13 to the combined allowance for loan/credit losses as of June 30, 2022. The pro forma income statement reflects an adjustment as of July 1, 2021, to estimate the impact of the application of ASU 2016-13 to the combined provision for credit/loan losses.

 

Further, in addition to ASU 2016-13 noted above, Southern Missouri has not identified all adjustments necessary to conform Citizens’ accounting policies to Southern Missouri’s accounting policies. Upon completion of the merger, or as more information becomes available, Southern Missouri will perform a more detailed review of Citizens’ accounting policies. As a result of that review, differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined company’s financial information.

 

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The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus are presented for informational purposes only and do not necessarily reflect the financial results of the combined company had the companies actually been combined at the beginning of each period presented. This pro forma information is subject to risks and uncertainties including those discussed in the section of this joint proxy statement/prospectus entitled “Risk Factors” beginning on page 22. The adjustments included in this unaudited pro forma condensed combined financial information are preliminary and may be revised. This information also does not reflect the benefits of the expected cost savings and expense efficiencies, opportunities to earn additional revenue, potential impacts of current market conditions on revenues or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future. The following unaudited pro forma condensed combined financial information and related notes have been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of Southern Missouri, which are incorporated by reference in this joint proxy statement/prospectus, and Citizens, which have been included in this joint proxy statement/prospectus.

 

CONDENSED COMBINED PRO FORMA STATEMENTS OF FINANCIAL CONDITION (Unaudited)

For the year ended June 30, 2022

(in thousands)

 

   Southern Missouri   Citizens Bancshares   Pro Forma         
   Bancorp   Company   Adjustments       Pro Forma 
ASSETS                    
Cash and cash equivalents  $86,792   $237,395   $(34,009)  1   $290,178 
Interest-bearing time deposits   4,768    -    -        4,768 
Available-for-sale securities   235,394    240,868    -        476,262 
Non-marketable securities - Federal Home Loan Bank (FHLB) and Federal Reserve Bank stock   11,683    1,174    -        12,857 
Loans:                        
Loans receivable   2,719,390    471,355    (15,412)  2    3,175,333 
Allowance for credit losses   (33,192)   (6,389)   (945)  3    (40,526)
Loans receivable, net   2,686,198    464,966    (16,357)       3,134,807 
Premises and equipment, net   71,347    14,095    -   4    85,442 
Bank-owned life insurance - cash surrender value   48,705    21,511    -        70,216 
Goodwill   27,288    2,042    47,408   5    76,738 
Other intangible assets, net   8,175    427    10,899   6    19,501 
Accrued interest receivable, prepaid expenses, and other assets   34,432    20,929    (3,318)  7    52,043 
TOTAL ASSETS  $3,214,782   $1,003,407   $4,623       $4,222,812 
                         
LIABILITIES                        
Deposits  $2,815,075   $879,428   $(2,428)  8   $3,692,075 
Securities sold under agreements to repurchase   -    24,448    -        24,448 
Advances from FHLB   37,957    -    -        37,957 
Subordinated debt   23,055    -    -        23,055 
Accrued interest payable, accrued expenses, and other liabilities   17,923    5,256    6,929   9    30,108 
TOTAL LIABILITIES   2,894,010    909,132    4,501        3,807,643 
                         
STOCKHOLDERS' EQUITY                        
Common stock   98    26    (26)       98 
Additional paid-in capital   119,162    8,832    97,261        225,255 
Retained earnings   240,115    98,270    (109,966)       228,419 
Treasury stock   (21,116)   (4,900)   4,900        (21,116)
Accumulated other comprehensive loss   (17,487)   (7,953)   7,953        (17,487)
TOTAL STOCKHOLDERS' EQUITY   320,772    94,275    122   10    415,169 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $3,214,782   $1,003,407   $4,623       $4,222,812 

 

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CONDENSED COMBINED PRO FORMA STATEMENT OF INCOME (Unaudited)

For the Year Ended June 30, 2022
(in thousands, except for share and per share data)

 

   Southern Missouri   Citizens Bancshares   Pro Forma         
   Bancorp   Company   Adjustments       Pro Forma 
INTEREST INCOME                        
Loans  $111,495   $20,387   $8,048   11   $139,930 
Investment securities   2,197    2,280    2,074   12    6,551 
Mortgage-backed securities   2,738    1,262    -        4,000 
Other interest-earning assets   437    745    -        1,182 
TOTAL INTEREST INCOME   116,867    24,674    10,122        151,663 
                         
INTEREST EXPENSE                        
Deposits   11,822    1,308    2,088   13    15,218 
Securities sold under agreements to repurchase   -    -    -        - 
Advances from FHLB   792    -    -        792 
Notes due to shareholders   -    13    -        13 
Subordinated debt   686    -    -        686 
TOTAL INTEREST EXPENSE   13,300    1,321    2,088        16,709 
                         
NET INTEREST INCOME   103,567    23,353    8,034        134,954 
Provision for credit losses   1,487    (1,456)   6,112   14    6,143 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES   102,080    24,809    1,922        128,811 
                         
NONINTEREST INCOME                        
Deposit account charges and related fees   6,450    2,851    -        9,301 
Bank card transaction fees   4,224    3,124    -        7,348 
Net realized gains on sale of loans   1,598    348    -        1,946 
Earnings on bank owned life insurance   1,168    438    -        1,606 
Other income   7,763    3,223    -        10,986 
TOTAL NONINTEREST INCOME   21,203    9,984    -        31,187 
                         
NONINTEREST EXPENSE                        
Compensation and benefits   35,611    14,940    -        50,551 
Occupancy and equipment, net   9,248    4,924    -   4    14,172 
Data processing expense   5,996    1,008    -        7,004 
Telecommunication expense   1,273    593    -        1,866 
Deposit insurance premiums   743    375    -        1,118 
Legal and professional fees   1,362    809    -        2,171 
Advertising   1,496    411    -        1,907 
Postage and office supplies   823    390    -        1,213 
Intangible amortization   1,441    59    1,888   15    3,388 
Foreclosed property expenses/losses   522    506    -        1,028 
Other operating expense   4,864    4,318    -        9,182 
Merger-related expense   -    -    8,498   16    8,498 
TOTAL NONINTEREST EXPENSE   63,379    28,333    10,386        102,098 
                         
INCOME BEFORE INCOME TAXES   59,904    6,460    (8,464)       57,900 
                         
PROVISION FOR INCOME TAXES   12,735    1,369    (1,562)  17    12,542 
                         
NET INCOME   47,169    5,091   $(6,902)       45,358 
                         
Basic earnings per share available to common stockholders  $5.22   $2.17            $4.12 
Diluted earnings per share available to common stockholders  $5.21   $2.17            $4.11 
                         
Average shares outstanding - Basic   8,994,022    2,346,915    2,015,061        11,009,083 
Average shares outstanding - Diluted   9,011,144    2,346,915    2,015,061        11,026,205 

  

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Notes to Pro Forma Condensed Combined Financial Information (Unaudited)

 

1.Represents cash paid for 25% of outstanding common stock and all outstanding stock options.

 

2.Adjustment to reflect the preliminary estimate of fair value of acquired loans, including current interest rates and liquidity, as well as the fair value of future credit marks.

 

(in thousands)  June 30, 2022 
Estimate of fair value: acquired non-PCD loans  $(14,380)
Estimate of fair value: acquired PCD loans   (1,974)
Eliminate unrecognized loan origination expenses   (280)
Fair value adjustments to loans   (16,634)
Gross up of PCD loans   1,222 
Total pro forma adjustment to loans  $(15,412)

 

3.Adjustments to the allowance for credit losses include the following:

 

(in thousands)  June 30, 2022 
Reverse Citizens’ allowance for loan losses  $6,389 
Record CECL estimate for PCD loans   (1,222)
Record CECL estimate for non-PCD loans   (6,112)
Total pro forma adjustment to allowance for credit losses  $(945)

 

4.Acquired premises and equipment will be adjusted to fair value at the acquisition date, and any significant adjustments will be based on real estate appraisals, which are not yet available. These adjustments will impact occupancy expense through depreciation.

 

5.Adjustment to eliminate historical Citizens goodwill of $2.0 million and to establish $49.5 million of goodwill for amount of consideration paid in excess of fair value of assets received over liabilities assumed. The pro forma adjustments include the accounting entries to record the merger transaction under the acquisition method of accounting for business combinations. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill. Fair value adjustments included in the pro forma condensed combined financial information are based upon available information and certain assumptions which are considered reasonable, and will be revised as additional information becomes available.

 

The following table summarizes the determination of the purchase price consideration with a sensitivity analysis assuming 10, 20, or 30 percent increases or decreases in the price per share of Southern Missouri common stock from the September 19, 2022, baseline and the resulting impact on the preliminary goodwill.

 

Shares of Citizens outstanding   2,346,915 
Shares to be exchanged for stock   1,760,186 
Exchange ratio   1.1448 
Southern Missouri shares to be issued   2,015,061 
Price per share of Southern Missouri on September 19, 2022  $52.65 
Preliminary consideration for common stock  $106,092,962 
      
Shares to be exchanged for cash   586,729 
Cash consideration per share  $53.50 
Cash consideration for shares outstanding   31,390,002 
Cash settlement of options outstanding   2,618,750 
Total cash consideration  $34,008,752 

  

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(in thousands)  Purchase Price   Goodwill 
Up 30%  $171,930   $81,362 
Up 20%   161,320    70,753 
Up 10%   150,711    60,143 
As presented in pro forma financial information   140,102    49,534 
Down 10%   129,492    38,925 
Down 20%   118,883    28,315 
Down 30%   108,274    17,706 

  

6.Adjustment to reflect approximately $11.3 million of core deposit intangibles at the preliminary estimated fair value and eliminate historical Citizens’ intangible assets.

 

7.Adjustment of $(318,000) to net deferred tax assets due to the business combination and adjustment of $(3.0) million to the estimated fair value of foreclosed real estate.

 

8.Adjustment to reflect the preliminary estimate of fair value on time deposits.

 

9.Represents estimated after-tax merger costs of $6.9 million ($8.5 million, pre-tax), of which some costs will be recognized over time. These cost estimates for both Southern Missouri and Citizens are forward-looking. The type and amount of actual costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

 

10.Adjustment to eliminate $94.3 million in Citizens’ stockholders’ equity, reflect issuance of $106.1 million in Southern Missouri common stock, reflect estimated merger costs of $6.9 million, net of tax, and reflect provision for credit losses on non-PCD acquired loans of $4.8 million, net of tax.
  
11.Adjustment reflects the yield adjustment for interest income on loans.
  
12.Adjustment reflects the yield adjustment for interest income on securities.
  
13.Adjustment reflects the cost of funds adjustment for interest expense on deposits.
  
14.Adjustment to record provision for credit losses on non-PCD acquired loans.
  
15.Adjustment reflects the net increase in amortization of other intangible assets for the acquired other intangible assets.
  
16.Adjustment reflects the combined pre-tax merger-related transaction costs.
  
17.Adjustment represents income tax expense on the pro-forma adjustments at an estimated effective rate of 22%, generally. Some merger-related expense is assumed to not be tax-deductible.

 

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THE SPECIAL MEETING OF CITIZENS SHAREHOLDERS

  

This joint proxy statement/prospectus is being provided to the holders of Citizens common stock as part of a solicitation of proxies by the Citizens board of directors for use at the Citizens special meeting to be held at the time and place specified below and at any properly convened meeting following any adjournment or postponement thereof. This joint proxy statement/prospectus provides the holders of Citizens common stock with information they need to know to be able to vote or instruct their vote to be cast at the Citizens special meeting.

 

Date, Time and Place

 

This joint proxy statement/prospectus is provided to Citizens’ shareholders by Citizens’ board of directors for solicitation of proxies to be used at the special meeting of holders of Citizens common stock, which we refer to as the Citizens special meeting. The Citizens special meeting will be held solely in a virtual meeting format via the internet at www.meetnow.global/M7SRQSK on [], 202[], at [] [].m., Central time.

 

Matters to be Considered

 

At the Citizens special meeting, holders of Citizens voting common stock will be asked to consider and vote on the merger agreement proposal and the Citizens adjournment proposal. Completion of the merger is conditioned on, among other things, shareholder approval of the merger agreement proposal by the Citizens shareholders. Citizens shareholders should carefully read this document in its entirety for more detailed information regarding the merger agreement and the merger. Citizens shareholders are directed to the copy of the merger agreement attached as Appendix A to this joint proxy statement/prospectus.

 

Citizens’ board of directors believes the merger with Southern Missouri is in the best interests of Citizens and its shareholders. Accordingly, the Citizens board of directors unanimously recommends that Citizens shareholders vote “FOR” the merger agreement proposal and “FOR” the Citizens adjournment proposal.

 

Record Date; Shares Outstanding and Entitled to Vote

 

The Citizens board of directors has fixed the close of business on [], 202[] as the record date for determining the Citizens shareholders entitled to notice of and to vote at the Citizens special meeting. Only holders of Citizens voting common stock at the close of business on the Citizens record date are entitled to vote at the meeting. Each share of Citizens voting common stock on the Citizens record date is entitled to one vote on the merger agreement proposal and on the Citizens adjournment proposal. As of the close of business on the record date, there were 1,745,258 shares of Citizens voting common stock outstanding and entitled to vote, held of record by approximately 379 shareholders.

 

Holders of Citizens nonvoting common stock are not entitled to, and are not being requested to, vote at the Citizens special meeting.

 

Vote Required; Quorum

 

Approval of the merger agreement proposal requires the affirmative vote of the holders of at least two-thirds of the voting power of Citizens entitled to vote thereon. A quorum will exist at the Citizens special meeting if a majority of the voting power of Citizens is present in person or by proxy and entitled to vote. A properly executed proxy marked “ABSTAIN” will be counted for purposes of determining whether a quorum is present.

 

When the Citizens special meeting is held, if there are insufficient votes to approve the merger agreement proposal the meeting may be adjourned to allow solicitation of additional proxies. Approval of the Citizens adjournment proposal requires the affirmative vote of a majority of the shares of Citizens common stock present in person or represented by proxy at the Citizens special meeting and entitled to vote on the Citizens adjournment proposal.

 

If you “ABSTAIN” from voting on the merger agreement proposal or the Citizens adjournment proposal, it will have the same effect as a vote AGAINST such proposal. If you fail to either submit a proxy or attend and vote at the Citizens special meeting, or are a "street name" holder and fail to instruct your bank, broker or other nominee how to vote, it will have the same effect as a vote AGAINST the merger agreement proposal and no effect on the Citizens adjournment proposal.

 

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Brokers who hold shares in “street name” for a beneficial owner are allowed to vote at their discretion on “routine” proposals, even without voting instructions from beneficial owners. For proposals considered “non-routine,” however, brokers are not allowed to exercise voting discretion and cannot vote on those non-routine proposals unless the beneficial owner gives specific voting instructions. Citizens believes that the proposals to be voted on at the Citizens shareholder meetings are “non-routine” and that brokers therefore will not be able to vote without specific voting instructions. Accordingly, if you hold your Citizens’ shares in street name through a broker, bank, or other nominee and do not give voting instructions to the broker, bank, or other nominee, the broker, bank, or other nominee cannot vote your Citizens shares on the merger agreement proposal or the Citizens adjournment proposal.

  

Concurrently with the execution of the merger agreement, Castle Creek and certain of Citizens directors and executive officers entered into the Citizens voting agreements pursuant to which they agreed to vote their shares of Citizens voting common stock in favor of the merger agreement proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Citizens common stock. As of [·], 202[·], Castle Creek and the Citizens directors and executive officers who entered into the Citizens voting agreements beneficially owned an aggregate of 966,161 shares of Citizens voting common stock, an amount equal to approximately 55.4% of the outstanding shares of Citizens voting common stock.

 

Solicitation and Revocation of Proxies

 

A proxy card accompanies this joint proxy statement/prospectus. If you are a Citizens shareholder, your proxy is being solicited by the Citizens board of directors. Regardless of whether you attend the Citizens special meeting, the Citizens board of directors urges you to vote your shares by (1) the internet, (2) telephone, or (3) completing, signing, dating, and returning the enclosed proxy card as soon as possible. If you return your properly executed proxy card before the meeting and do not revoke it, the shares of Citizens voting common stock represented by the proxy card will be voted at the Citizens special meeting or adjournment thereof.

 

The Citizens common stock will be voted as specified on the proxy card. If you are a Citizens shareholder and you sign, date, and return a proxy card without stating how you want your shares to be voted, your shares will be voted “FOR” approval of the merger agreement proposal, and, if adjournment of the Citizens special meeting is necessary to allow time for solicitation of additional proxies, your shares will be voted “FOR” the Citizens adjournment proposal. Although Citizens’ board of directors currently does not expect any other proposals to be presented at the meeting, if any other proposals are properly presented, the Citizens voting common stock represented by properly executed proxy cards will, to the extent permitted by applicable law, be voted in the discretion of the persons named in the proxy card in accordance with their best judgment.

 

If you return a properly executed proxy card, you may revoke it at any time before a vote is taken at the Citizens special meeting by:

 

·filing a written notice of revocation with Robert G. Wright, Executive Vice President and Corporate Secretary of Citizens, at , 2041 Commerce Drive, Kearney, MO 64060,

 

·executing and returning another proxy card with a later date,

 

·casting a later internet or telephone vote relating to the same shares prior to the applicable deadline set forth on the proxy card, or

 

·attending the virtual Citizens special meeting and voting electronically at the meeting.

 

Attending the Citizens special meeting will not, by itself, revoke your proxy. If you instructed your broker, bank, or other nominee to vote your shares but you wish to change or revoke those voting instructions, you must follow your broker, bank, or other nominee’s directions for changing or revoking your vote.

 

Citizens will bear its own cost of solicitation of proxies. Proxies will be solicited by mail and may also be solicited by personal contact, telephone, facsimile, or electronic mail by Citizens’ directors, officers, and employees, none of whom will receive additional compensation for their solicitation activities. Citizens has also engaged [·], a proxy soliciting firm, to assist in the solicitation of proxies for a flat fee of $[·], a variable fee based on calls made by [·], and reimbursement of reasonable out-of-pocket expenses. Citizens will pay the standard charges and expenses of brokerage houses, voting trustees, banks, associations, and other custodians, nominees, and fiduciaries who are record holders of Citizens voting common stock not beneficially owned by them for forwarding this joint proxy statement/prospectus and other proxy solicitation materials to and obtaining voting instructions from the beneficial owners of Citizens common stock.

 

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Dissenters’ Rights

 

Holders of shares of Citizens common stock are entitled to dissenters’ rights under Section 351.455 of the MGBCL, provided they satisfy the special conditions set forth therein. For a more detailed discussion of your dissenters’ rights and the requirements for perfecting your dissenters’ rights, see “The Merger – Dissenters’ Rights of Citizens Shareholders.” In addition, a copy of Section 351.455 of the MGBCL is attached to this joint proxy statement/prospectus as Appendix B.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth the beneficial ownership of Citizens common stock as of [·], 202[·], the voting record date for the Citizens special meeting, by (i) each person or entity who is known by Citizens to beneficially own more than 5% of the outstanding shares of Citizens common stock, (ii) each director of Citizens, (iii) each executive officer of Citizens, and (iv) all directors and executive officers of Citizens as a group. Unless otherwise indicated, and subject to the Citizens voting agreements (see “The Merger — Voting Agreements”), management of Citizens believes that each person has sole voting and investment power over the shares indicated as owned by such person.

 

In computing the number of shares of common stock beneficially owned by a person or entity and the percentage ownership of that person or entity, shares of common stock subject to options held by that person or entity that are currently exercisable or exercisable within 60 days of [·], 202[·] are deemed to be outstanding. These shares are not deemed to be outstanding, however, for the purpose of computing the percentage ownership of any other person or entity.

 

The address of each of the beneficial owners, except where otherwise indicated, is the same address as Citizens. An asterisk (*) in the table indicates that an individual beneficially owns less than one percent of the outstanding shares specified of Citizens. As of [·], 202[·], there were 2,346,915 shares of Citizens common stock issued and outstanding, consisting of 1,745,258 shares of voting common stock and 601,657 shares of nonvoting common stock.

 

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Name of Beneficial Owner(1)  Number of Shares
of Voting
Common Stock
Beneficially
Owned(2)
   Percent of
Shares of
Voting
Common
Stock
Outstanding
   Percent of
Shares of
Common
Stock
Outstanding
 
Greater than 5% Shareholders (Excluding Directors)               
Castle Creek Partners VI  LP(3)   172,783    9.9%   33.0%
                
Directors               
William Young(4)   324,575    18.4%   13.7%
Don Walsworth Sr.   258,389    14.8%   11.0%
Don Walsworth Jr.   191,207    11.0%   8.1%
Roger Arwood   59,007    3.3%   2.5%
Edward Douglas   3,205    *    * 
James Gegg   7,263    *    * 
Gene Millard   1,400    *    * 
David Neal   7,503    *    * 
William Orscheln   2,950    *    * 
Patrick Thorne   37,424    2.1%   1.6%
Spencer Cohn(5)   ---    *    * 
                
Executive Officers (Excluding Directors)               
Jon L. Appleby   34,200    1.9%   1.4%
Joseph V. Christifano   9,000    *    * 
James H. Conley   10,667    *    * 
William Dippel   19,000    *    * 
Mark Eagleton   9,000    *    * 
Lawrence Taft   6,500    *    * 
Richard Viar   155    *    * 
Robert G. Wright   15,453    *    * 
                
All current directors and executive officers as a group (19 persons)   996,898    53.3%   40.3%

 

 

(1)In accordance with Rule 13d-3 of the Exchange Act, for purposes of this table, a person is deemed to be the beneficial owner of Citizens’ common stock if he or she has or shares voting or investment power with respect to such security, or has a right to acquire beneficial ownership at any time within 60 days from [·], 202[·]. As used herein, “voting power” is the power to vote or direct the voting of shares, and “investment power” is the power to dispose or direct the disposition of the shares. The shares set forth in this table include all shares held directly, as well as by spouses and minor children, in trust and in other forms of indirect ownership. The nature of beneficial ownership for shares shown in this column, unless otherwise noted, represents sole voting and investment power.

 

(2)Includes immediately exercisable options to acquire the following number of shares of voting common stock held by the following directors and executive officers: William Young – 19,000 shares; Roger Arwood – 30,000 shares; Jon L. Appleby – 25,000 shares; Joseph V. Christifano – 9,000 shares; James H. Conley – 9,000 shares; William Dippel – 9,000 shares; Mark Eagleton – 9,000 shares; Lawrence Taft – 6,000 shares; and Robert G. Wright – 9,000 shares. All current directors and executive officers as a group hold immediately exercisable options to acquire an aggregate of 125,000 shares of voting common stock. None of the directors or executive officers own nonvoting common stock.

 

(3)The address for Castle Creek Partners VI LP (“Castle Creek Fund VI”) is 11682 El Camino Real, Suite 320, San Diego, CA 92120. Based on information provided by Castle Creek Fund VI, Castle Creek Capital VI LLC, Castle Creek Fund VI’s general partner (“CCC VI LLC”), has the power to vote and power to dispose of the 172,783 shares of Citizens voting common stock owned by Castle Creek Fund VI. The number of shares reported in the table above excludes 601,657 shares of Citizens nonvoting common stock owned by Castle Creek Fund VI, as neither Castle Creek Fund VI nor CCC VI LLC has the right to acquire within the next 60 days Citizens voting common stock in respect of such nonvoting common stock.

 

(4)Includes 253,364 shares held by Young Partners LP, with respect to which Mr. Young has sole voting and investment power. These shares are pledged as collateral to secure a loan to Young Partners LP and other family entities. Also includes 52,211 shares owned by Mr. Young personally and as custodian for his children, as to which Mr. Young has sole voting and investment power. These shares are pledged as collateral to secure a loan to Mr. Young. Mr. Young also holds 19,000 vested stock options.

 

(5)Mr. Cohn is a principal at CCC VI LLC, which is the sole general partner of Castle Creek Fund VI, which entity owns 172,783 shares of Citizens voting common stock and 601,657 shares of Citizens nonvoting common stock. Mr. Cohn disclaims beneficial ownership of such shares held by Castle Creek Fund VI.

 

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THE SPECIAL MEETING OF SOUTHERN MISSOURI SHAREHOLDERS

  

This joint proxy statement/prospectus is being provided to the holders of Southern Missouri common stock as part of a solicitation of proxies by the Southern Missouri board of directors for use at the Southern Missouri special meeting to be held at the time and place specified below and at any properly convened meeting following any adjournment or postponement thereof. This joint proxy statement/prospectus provides the holders of Southern Missouri common stock with information they need to know to be able to vote or instruct their vote to be cast at the Southern Missouri special meeting.

 

Date, Time and Place

 

This joint proxy statement/prospectus is provided to Southern Missouri’s shareholders by Southern Missouri’s board of directors for solicitation of proxies to be used at the special meeting of holders of Southern Missouri’s common stock, which we refer to as the Southern Missouri special meeting. The Southern Missouri special meeting will be held at Southern Missouri’s corporate headquarters located at 2991 Oak Grove Road, Poplar Bluff, Missouri, on [·],[·], 202[·], at [·][·].m., Central time.

 

Matters to be Considered

 

At the Southern Missouri special meeting, holders of Southern Missouri common stock will be asked to consider and vote on the share issuance proposal and the Southern Missouri adjournment proposal. Completion of the merger is conditioned on, among other things, shareholder approval of the share issuance proposal by the Southern Missouri shareholders. Southern Missouri shareholders should carefully read this document in its entirety for more detailed information regarding the merger agreement and the merger, including the share issuance proposal. Southern Missouri shareholders are directed to the copy of the merger agreement attached as Appendix A to this joint proxy statement/prospectus.

 

Southern Missouri’s board of directors believes the merger with Citizens is in the best interests of Southern Missouri and its shareholders. Accordingly, the Southern Missouri board of directors unanimously recommends that Southern Missouri shareholders vote “FOR” the share issuance proposal and “FOR” the Southern Missouri adjournment proposal.

 

Record Date; Shares Outstanding and Entitled to Vote

 

The Southern Missouri board of directors has fixed the close of business on [·], 202[·] as the record date for determining the Southern Missouri shareholders entitled to notice of and to vote at the Southern Missouri special meeting. Only holders of Southern Missouri common stock at the close of business on the Southern Missouri record date are entitled to vote at the meeting. Each share of Southern Missouri common stock on the Southern Missouri record date is entitled to one vote on the share issuance proposal and on the Southern Missouri adjournment proposal. As of the close of business on the record date, there were 9,229,151 shares of Southern Missouri common stock outstanding and entitled to vote, held of record by [·] shareholders.

 

Vote Required; Quorum

 

Approval of the share issuance proposal requires the affirmative vote of the holders of a majority of the voting power of Southern Missouri common stock cast on the matter. A quorum will exist at the Southern Missouri special meeting if a majority of the voting power of Southern Missouri is present in person or by proxy and entitled to vote. A properly executed proxy card marked “ABSTAIN” will be counted for purposes of determining whether a quorum is present.

 

When the Southern Missouri shareholder meeting is held, if there are insufficient votes to approve the share issuance proposal the meeting may be adjourned to allow solicitation of additional proxies. The affirmative vote of the holders of a majority of the voting power of Southern Missouri common stock present at the meeting in person or by proxy and entitled to vote is necessary to approve the Southern Missouri adjournment proposal.

 

If you “ABSTAIN” from voting on the share issuance proposal or the Southern Missouri adjournment proposal, it will have the same effect as a vote AGAINST such proposal. If you fail to either submit a proxy or vote at the Southern Missouri special meeting, or are a "street name" holder and fail to instruct your bank, broker or other nominee how to vote, it will have no effect on either proposal.

 

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Brokers who hold shares in “street name” for a beneficial owner are allowed to vote at their discretion on “routine” proposals, even without voting instructions from beneficial owners. For proposals considered “non-routine,” however, brokers are not allowed to exercise voting discretion and cannot vote on those non-routine proposals unless the beneficial owner gives specific voting instructions. Southern Missouri believes that the proposals to be voted on at the Southern Missouri shareholder meetings are “non-routine” and that brokers therefore will not be able to vote without specific voting instructions. If you hold your Southern Missouri’s shares in street name through a broker, bank, or other nominee and do not give voting instructions to the broker, bank, or other nominee, the broker, bank, or other nominee cannot vote your Southern Missouri shares on the share issuance proposal or the Southern Missouri adjournment proposal.

 

Concurrently with the execution of the merger agreement, the directors and certain executive officers of Southern entered into the Southern Missouri voting agreements pursuant to which they agreed to vote their shares of Southern Missouri common stock in favor of the share issuance proposal and related matters, and to become subject to certain transfer restrictions with respect to their holdings of Southern Missouri common stock. As of [·], 202[·], the Southern Missouri directors and executive officers who entered into the Southern Missouri voting agreements beneficially owned an aggregate of 1,394,663 shares of Southern Missouri common stock, an amount equal to approximately 15.1% of the outstanding shares of Southern Missouri common stock.

 

Solicitation and Revocation of Proxies

 

A proxy card accompanies this joint proxy statement/prospectus. If you are a Southern Missouri shareholder, your proxy is being solicited by the Southern Missouri board of directors. Regardless of whether you attend the Southern Missouri special meeting, the Southern Missouri board of directors urges you to vote your shares by (1) the internet, (2) telephone, or (3) completing, signing, dating, and returning the enclosed proxy card as soon as possible. If you return your properly executed proxy card before the meeting and do not revoke it, the shares of Southern Missouri voting common stock represented by the proxy card will be voted at the Southern Missouri special meeting or adjournment thereof.

 

The Southern Missouri common stock will be voted as specified on the proxy card. If you are a Southern Missouri shareholder and you sign, date, and return a proxy card without stating how you want your shares to be voted, your shares will be voted “FOR” approval of the share issuance proposal, and, if adjournment of the Southern Missouri special meeting is necessary to allow time for solicitation of additional proxies, your shares will be voted “FOR” the Southern Missouri adjournment proposal. Although Southern Missouri’s board currently does not expect any other proposals to be presented at the meeting, if any other proposals are properly presented, the Southern Missouri common stock represented by properly executed proxy cards will, to the extent permitted by applicable law, be voted in the discretion of the persons named in the proxy card in accordance with their best judgment.

 

If you return a properly executed proxy card, you may revoke it at any time before a vote is taken at the Southern Missouri special meeting by:

 

  ·   filing a written notice of revocation with Charles R. Love, Corporate Secretary of Southern Missouri, at Southern Missouri’s corporate headquarters located at 2991 Oak Grove Road, Poplar Bluff, MO  63901,

 

  ·   executing and returning another proxy card with a later date,

 

  ·   casting a later internet or telephone vote relating to the same shares prior to the applicable deadline set forth on the proxy card, or

 

  ·  

attending the Southern Missouri special meeting and giving notice of revocation in person. 

 

Attending the Southern Missouri special meeting will not, by itself, revoke your proxy. If you instructed your broker, bank, or other nominee to vote your shares but you wish to change or revoke those voting instructions, you must follow your broker, bank, or other nominee’s directions for changing or revoking your vote.

 

Southern Missouri will bear its own cost of solicitation of proxies. Proxies will be solicited by mail and may also be solicited by personal contact, telephone, facsimile, or electronic mail by Southern Missouri’s directors, officers, and employees, none of whom will receive additional compensation for their solicitation activities. Southern Missouri will pay the standard charges and expenses of brokerage houses, voting trustees, banks, associations, and other custodians, nominees, and fiduciaries who are record holders of Southern Missouri common stock not beneficially owned by them for forwarding this joint proxy statement/prospectus and other proxy solicitation materials to and obtaining voting instructions from the beneficial owners of Southern Missouri common stock.

 

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Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth, as of [•], 202[•], the voting record date for the Southern Missouri special meeting, information regarding share ownership of:

 

·those persons or entities (or groups of affiliated person or entities) known by management to beneficially own more than five percent of Southern Missouri common stock other than directors and executive officers;

 

·each director of Southern Missouri;

 

·each executive officer of Southern Missouri named in the Summary Compensation Table appearing in its proxy statement filed with the SEC on September 26, 2022; and

 

·all current directors and executive officers of Southern Missouri as a group.

 

The address of each of the beneficial owners, except where otherwise indicated, is the same address as Southern Missouri. An asterisk (*) in the table indicates that an individual beneficially owns less than one percent of the outstanding common stock of Southern Missouri. As of [·], 202[·], there were 9,229,151 shares of Southern Missouri common stock issued and outstanding.

 

Beneficial Owners 

Number of Shares
Beneficially
Owned(1)

  

Percent of
Common Stock
Outstanding(8) %

 
Beneficial Owners of More Than 5% Other than Directors and Named Executive Officers          

FMR, LLC(2)

245 Summer Street

Boston, MA 02210

   608,620    6.6 

BlackRock, Inc. (3)

55 East 52nd Street

New York, New York 10055

   639,309    6.9 
Directors and Named Executive Officers          
Greg A. Steffens, Chairman & CEO(4) (5) (6)   292,381    3.2 
L. Douglas Bagby, Director and Vice-Chairman   27,000    * 
Sammy A. Schalk, Director   93,355    1.0 
Rebecca M. Brooks, Director   30,000    * 
Daniel L. Jones, Director   272,929    3.0 
Charles R. Love, Director and Secretary   25,700    * 
Dennis C. Robison, Director   16,888    * 
David J. Tooley, Director   50,000    * 
Todd E. Hensley, Director(4)   547,540    5.9 
David L. McClain, Director   ---    * 
Matthew T. Funke, President & Chief Administrative Officer(4) (6)   60,370    * 
Justin G. Cox, Regional President(4) (6)   22,007    * 
Mark E. Hecker, EVP & Chief Credit Officer(4) (6)   20,137    * 
Rick A. Windes, EVP & Chief Lending Officer(4) (6)   5,895    * 
Directors and executive officers as a group (18 persons)(7)   1,633,921    17.6 

  

 

(1) Unless otherwise indicated, and subject to the voting agreements entered into with Citizens in connection with the merger (see “The Merger — Voting Agreements”), management of Southern Missouri believes that each person has sole voting and dispositive power over the shares indicated as owned by such person.
(2) As reported by FMR LLC in a Schedule 13-G filed with the SEC on February 9, 2022, FMR LLC reported sole voting power over 244,064 shares and sole dispositive power over 608,620 shares.
(3) As reported by BlackRock, Inc. in a Schedule 13-G filed with the SEC on February 7, 2022. BlackRock, Inc. reported sole voting power over 613,205 shares and sole dispositive power over 639,309 shares.
(4) Included in the shares beneficially owned are options to purchase shares of Southern Missouri common stock exercisable within 60 days of [·], 202[·], as follows: Mr. Hensley – 10,000 shares; Mr. Steffens – 7,300 shares, Mr. Funke – 4,200 shares; Mr. Cox – 4,200 shares; Mr. Hecker – 4,200 shares; Mr. Windes – 2,600 shares.
(5) Includes 24,027 shares held as custodian for Mr. Steffens’ daughter.
(6) Includes 45,521 shares held by Mr. Steffens’ account, 14,720 shares held by Mr. Funke’s account, 10,857 shares held by Mr. Cox’s account, 1,172 shares held by Mr. Hecker’s account, and 1,095 shares held by Mr. Windes’ account under the Southern Bank 401(k) Retirement Plan.
(7) Includes shares held directly, as well as shares held jointly with family members, shares held in retirement accounts, held in a fiduciary capacity, held by certain of the group members’ families, or held by trusts of which the group member is a trustee or substantial beneficiary, with respect to which shares the group member may be deemed to have sole or shared voting and/or investment powers. This amount also includes options that are exercisable as of or within 60 days after [·], 202[·], to purchase 44,900 shares of Southern Missouri Bancorp common stock granted to directors and executive officers.
(8) Shares subject to options that are currently exercisable or that will become exercisable within 60 days of [·], 202[·] are deemed outstanding for purposes of calculating the percentage ownership of the person holding those options but are not treated as outstanding for purposes of calculating the percentage ownership of any other person.

 

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THE MERGER

 

The following is a description of certain material information about the merger and the merger agreement. The description in this section and elsewhere in this joint proxy statement/prospectus is subject to, and qualified in its entirety by reference to, the complete text of the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus and incorporated by reference herein. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read the merger agreement carefully, as it is the legal document that governs the merger.

 

The merger agreement and this summary of the material provisions of the merger agreement are not intended to provide you with any factual information about Southern Missouri or Citizens. Such information can be found elsewhere in this joint proxy statement/prospectus and in the public filings Southern Missouri makes with the SEC, as described in the section entitled “Where You Can Find More Information” beginning on page 133, and may supplement, update or modify the disclosures about Southern Missouri contained in the merger agreement. The merger agreement contains customary representations and warranties of Citizens and Southern Missouri. The assertions embodied in those representations and warranties are qualified by information contained in confidential disclosure schedules that the parties delivered in connection with the execution of the merger agreement. In addition, certain representations and warranties were made as of a specific date and may be subject to a contractual standard of materiality different from the standard of materiality generally applicable to statements made by a corporation to shareholders or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts.

 

You should not rely on the representations, warranties, covenants, or any description thereof as characterizations of the actual state of facts or condition of Southern Missouri or Citizens or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, and covenants may have changed since the date of the merger agreement and do not purport to be accurate as of the date of this joint proxy statement/prospectus. The representations and warranties and other provisions in the merger agreement should not be relied on by any persons as characterizations of the actual state of facts about Southern Missouri or Citizens at the time they were made or otherwise. Furthermore, the representations and warranties and other provisions of the merger agreement should be read only in conjunction with the information provided elsewhere in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 133.

 

Terms of the Merger

 

Each of Southern Missouri’s and Citizens’ board of directors has approved the merger agreement. The merger agreement provides for the merger of Citizens with and into Merger Sub, a wholly owned subsidiary of Southern Missouri, with Merger Sub as the surviving entity after the merger. As a result of this merger, each outstanding share of Citizens common stock (other than dissenting and treasury shares) will be converted into the right to receive the merger consideration described below. Immediately following the merger, Merger Sub will merge with and into Southern Missouri with Southern Missouri as the surviving entity after the holding company merger and, thereafter, Citizens’ wholly owned bank subsidiary, CBTC, will merge with and into Southern Missouri’s wholly owned bank subsidiary, Southern Bank, with Southern Bank as the surviving entity after the bank merger. As a result of the mergers, Citizens and CBTC will cease to exist as separate entities.

 

If the merger is completed, holders of Citizens common stock will be entitled to receive an aggregate merger consideration, subject to adjustment as discussed below, based on Citizens’ consolidated equity capital determined in accordance with GAAP as of the measurement date (the close of business on the last business day of the month immediately preceding the month in which the merger closing occurs), with the exception of no adjustment of accumulated other comprehensive income from June 30, 2022 to the measurement date, plus the after tax cost of the accrual of any Citizens transaction expenses which have not already been paid or accrued prior to that time (“Citizens’ Capital”). Citizens’ transaction expenses means the fees, expenses and costs (i) of accountants, financial advisors, legal counsel and other advisors incurred by Citizens and CBTC in connection with the mergers and the transactions contemplated by the merger agreement, and (ii) for any change in control payments and retention or other payments to any directors, officers or employees of Citizens or CBTC in connection with the mergers pursuant to the agreements between such persons and Citizens and CBTC.

 

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Adjustments to the assumed aggregate merger consideration:

 

·If Citizens’ Capital is greater than $95,000,000 (the “Minimum Capital Requirement”), the assumed aggregate merger consideration will be increased dollar for dollar by the amount of the excess.

 

·If Citizens’ Capital is less than the Minimum Capital Requirement but greater than or equal to $93,500,000, the assumed aggregate merger consideration will be decreased dollar for dollar by the amount by which the Minimum Capital Requirement exceeds Citizens’ Capital.

 

·If Citizens’ Capital is less than $93,500,000, then, in addition to the adjustment described in the immediately preceding bullet, the assumed aggregate merger consideration will be decreased by an amount equal to the product of (i) the difference between $93,500,000 and Seller’s Capital and (ii) 1.44.

 

If the merger had been completed on September 30, 2022, Citizens’ Capital would have been $93.7 million (as adjusted per the merger agreement), resulting in aggregate merger consideration of approximately $138.8 million.

 

Twenty-five percent (25%) of the merger consideration will be paid in cash and seventy-five percent (75%) will be paid in shares of Southern Missouri common stock, based on the election and allocation procedures outlined in the merger agreement. The per share cash consideration will be equal to $53.50, subject to adjustment based on changes to Citizens’ consolidated equity capital. The per share stock consideration will be 1.1448 shares of Southern Missouri common stock for each share of Citizens common stock, subject to adjustment based on changes to Citizens’ consolidated equity capital, with cash paid in lieu of any fractional share. Accordingly, if you held 100 shares of Citizens common stock immediately prior to the merger, you would receive $5,350.00 in cash ($53.50 x 100) if you made an all cash election, or 114 shares of Southern Missouri common stock (1.1448 x 100) plus $22.50 in cash in lieu of a fraction of a Southern Missouri share (0.48 x $46.88) if you made an all stock election, in both cases subject to the allocation procedures outlined in the merger agreement.

 

In addition to the potential adjustment to the assumed aggregate merger consideration discussed above, the per share cash consideration and the per share stock consideration are based on the number of shares of Citizens common stock outstanding immediately prior to the merger. To the extent that number changes from the amount outstanding as of the date of the merger agreement the per share cash consideration and the per share stock consideration will adjust accordingly. Furthermore, since the per share stock consideration is calculated based on a fixed exchange ratio of 1.1448 shares of Southern Missouri common stock for each outstanding share of Citizens common stock, the market value of the per share stock consideration to be paid to the holders of Citizens common stock who receive Southern Missouri common stock, based on the election and allocation procedures as set forth in the merger agreement, will fluctuate with the closing price of Southern Missouri common stock. There will not be any adjustment to the per share stock consideration for changes in the market price of shares of Southern Missouri common stock, except as discussed below. We urge you to obtain current market quotations for Southern Missouri common stock (NASDAQ: trading symbol “SMBC”).

 

Holders of Citizens common stock are being asked to approve the merger agreement proposal and holders of Southern Missouri common stock are being asked to approve the issuance of Southern Missouri common stock to be issue pursuant to the merger agreement, referred to as the share issuance proposal. See below for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.

 

Treatment of Citizens Stock Options

 

All outstanding Citizens stock options that are unexercised prior to the effective time of the merger will be automatically canceled and converted into the right to receive cash equal to the amount by which $53.50 exceeds the option exercise price. As of the effective time of the merger, all Citizens stock options, whether or not vested or exercisable, will no longer be outstanding and shall automatically cease to exist, and the holders of Citizens stock options will cease to have any rights with respect to such Citizens stock options, except the right to receive the option consideration.

 

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Background of the Merger

 

The Citizens board of directors periodically reviews, analyzes and discusses Citizens’ business strategy, performance, growth prospects and strategic alternatives in the context of enhancing long-term value and liquidity for Citizens’ shareholders. These strategic discussions have included various capital management strategies, potential acquisitions or investments and business combinations involving other financial institutions. In recent years, the Citizens board has focused on, among other things, the impact of changes in interest rates and challenging regulatory, compliance and competitive environments facing financial institutions generally, as well as the inherent challenges posed to banks of CBTC’s size and the continued trend of consolidation in the financial services industry. These challenges have included COVID-19, increasing government regulation, increasing expense burdens and commitments for technology and training, an interest rate environment that resulted in pressure on interest rate spreads and margins, and increasing competition in the delivery of financial products and services combined with increased customer expectations for the availability of sophisticated financial products and services from financial institutions. In recent years, it became increasingly apparent to Citizens’ senior management and the board of directors that, if Citizens were to remain independent, it would need to diversify and increase its lending, reduce expenses and grow substantially in order to achieve economies of scale and results of operations comparable to those of larger financial institutions in Missouri and Kansas. The Citizens board of directors has also focused in recent years on providing liquidity for Citizens' shareholders, including an investor in its nonvoting common stock, Castle Creek, that has rights to require Citizens to register the resale of its Citizens shares with the SEC after a specified date, currently the earlier of termination of the merger agreement, or August 31, 2023.

 

In January 2020, the Citizens board of directors retained D.A. Davidson, a nationally recognized investment banking firm that is regularly engaged as a financial adviser to community banks in connection with mergers, acquisitions and other corporate transactions, to be a consultant to Citizens. D.A. Davidson was retained to provide analysis on market trends and to provide advice on the potential sale of Citizens, acquisitions and divestitures. In the fall of 2020 Citizens undertook an exploratory process regarding a possible business combination transaction with other financial institutions. In addition, as part of the 2020 process, the board of directors formed a strategy committee (the "Committee") to work with D.A. Davidson in reviewing potential buyers for Citizens and meeting with the potential buyers as needed; however, the Committee was not authorized to accept or enter into any transactions. The Committee was to report to the board of directors of Citizens when appropriate. Citizens did not have any material discussions with Southern Missouri as part of this process. The exploratory process was ended by Citizens in March 2021.

 

In January 2022, D.A. Davidson was advised by the Citizens board of directors to start a process to find a potential merger partner. D.A. Davidson developed a confidential information memorandum ("CIM") based on Citizens' December 31, 2021 financials. D.A. Davidson waited until March 2022 to start sending the CIM out in order to have potential buyers execute non-disclosure agreements. Over 60 potential merger partners were ultimately contacted beginning in March 2022; 17 potential bidders entered into non-disclosure agreements and received the CIM.

 

In late April and early May, 2022, D.A. Davidson received five written, non-binding letters of intent from four different institutions (one bidder submitted two different letters of intent), one of which was Southern Missouri.

 

On May 12, 2022, the Committee met with Steve Nelson, a Managing Director at D.A. Davidson. Mr. Nelson presented a lengthy and in-depth slide presentation covering, among other things, market conditions, a list of potential buyers contacted, a review and discussion of the letters of intent, a detailed analysis of the four bidders that submitted letters of intent, and a discussion of the next steps to be taken. The Committee determined that the four bidders should be provided additional information about Citizens and CBTC, that Mr. Nelson should try and have the four bidders increase and finalize their respective bids, that a virtual data room should be set up for bidders to review Citizens’ information off-site, and that Mr. Nelson should arrange for meetings with representatives of the four bidders and the Committee over the next couple of weeks, to be followed by submission of final proposed letters of intent to Citizens. The Committee decided that after the meetings and depending upon the terms of the bids submitted, the Committee would select one potential bidder with whom to begin detailed due diligence and negotiate a definitive agreement exclusively.

 

Between May 20, 2022 and May 26, 2022, the Committee and a few other members of the Citizens board of directors met with representatives of each of the four bidders, including Southern Missouri, either in person or via video conference, with each of the bidders asking many questions regarding Citizens and CBTC. The members of the Committee and the board of directors who were present responded to the representatives of the bidders and answered their questions.

 

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On June 6, 2022, Mr. Nelson met with the Committee and provided an in-depth and detailed analysis regarding the four potential buyers and reviewed with the Committee the final letters of intent delivered by each potential buyer. Two of the potential buyers were cash only buyers and the other two offered cash and stock. Mr. Nelson reported that another potential buyer reentered the bidding but passed after not raising its offer. The two cash only bidders were credit unions that made bids to acquire CBTC, rather than Citizens. In reviewing their bids, the Committee considered that although their bids offered more consideration than the bid submitted by Southern Missouri, there would be adverse tax consequences to Citizens shareholders of the bids for CBTC rather than Citizens and there were significant regulatory constraints in Missouri that would apply to any proposed sale of CBTC to a credit union. After reviewing all the information presented by D.A. Davidson regarding the four potential buyers, the Committee elected to proceed with negotiations with one bidder, Southern Missouri.

 

On June 8, 2022, Citizens entered into an exclusivity agreement with Southern Missouri, the term of which was extended on July 29, 2022 and again on August 30, 2022. In June, July and August 2022, representatives of Southern Missouri performed additional due diligence on Citizens and CBTC, and Citizens performed additional due diligence on Southern Missouri.

 

On July 11, 2022, Silver, Freedman, Taff & Tiernan LLP (“Silver Freedman”), outside legal counsel to Southern Missouri, delivered the first draft of the merger agreement to Citizens’ outside legal counsel, Stinson LLP (“Stinson”), who forwarded the draft to Citizens and D.A. Davidson. On July 20, 2022, the Committee discussed the basic proposed terms of the definitive agreement with Stinson and discussed the process for executing on the merger with Southern Missouri. On July 27, 2022 and August 8, 2022, Stinson delivered its responses to the revised draft of the merger agreement to Silver Freedman and discussed with Silver Freedman the proposed changes. Silver Freedman circulated a revised draft on August 23, 2022, reflecting the comments from Citizens and Stinson.

 

On September 1, 2022, Stinson provided to Citizens a memorandum describing the fiduciary duties of the directors of Citizens in connection with the consideration of the proposed merger and other strategic alternatives, which updated a memorandum previously provided by Stinson prior to commencement of the 2022 process. On September 8, 2022, Silver Freedman delivered to Stinson, who forwarded it to D.A. Davidson and the Committee, a revised draft of the merger agreement. On September 14, 2022, D.A. Davidson sent information to the Committee, which information discussed the status of the transaction, the status of the negotiations, and findings in the reverse due diligence performed on Southern Missouri by Citizens. On September 14, 2022, Stinson delivered to Silver Freedman a revised draft of the merger agreement. On September 15, 2022 and September 19, 2022, Silver Freedman delivered to Stinson revised drafts of the merger agreement.

 

During August and September 2022, Silver Freedman and Sidley Austin LLP, counsel to Castle Creek, negotiated Castle Creek’s voting agreement and letter agreement, which included Castle Creek’s board observation rights and other matters.

 

On September 19, 2022, the board of directors of Citizens met with Stinson and D.A. Davidson. At this meeting, Stinson discussed the key points of the merger agreement and D.A. Davidson reviewed the financial aspects of the proposed merger and rendered to the Citizens board an opinion to the effect that, as of the date and subject to the matters, assumptions and limitations on the review undertaken by D.A. Davidson as set forth in such opinion, the merger consideration in the proposed merger was fair, from a financial point of view, to the shareholders and option holders of Citizens. Among other matters considered, the board of directors reviewed the specific terms of the merger agreement, the form and value of the consideration to be received by Citizens shareholders and option holders, the price and historical performance of Southern Missouri’s common stock, current market conditions including comparable bank M&A transactions, and the financial implications of the merger to Citizens shareholders. Following these discussions, review and analysis of materials provided to the boards of directors and discussion among the members of the boards of directors, the Citizens and CBTC boards of directors determined that the merger agreement, the merger and the other transactions contemplated thereby were advisable and in the best interests of Citizens and its shareholders, and the Citizens and CBTC boards of directors unanimously voted to approve and adopt the merger agreement, the merger and the other transactions contemplated thereby.

 

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On September 20, 2022, the Southern Missouri and Southern Bank boards of directors, together with representatives from Piper Sandler and Silver Freedman, met by teleconference for a special meeting of the boards of directors to consider the merger agreement and ancillary agreements. The Southern Missouri and Southern Bank boards were provided with a set of meeting materials in advance of the meeting, including substantially final drafts of the merger agreement and related transaction documents. Among other things, Mr. Steffens and the other executive officers of Southern Missouri discussed with the board of directors the terms of the proposed merger, the negotiations to date and the diligence undertaken by Southern Missouri and its advisors in respect of Citizens. Silver Freedman discussed with the Southern Missouri directors their fiduciary duties under applicable law. A representative of Silver Freedman reviewed with the Southern Missouri board of directors the material terms of the proposed definitive merger agreement and ancillary documents. At this meeting, Piper Sandler then reviewed the financial aspects of the proposed merger with the boards and rendered an opinion to the Southern Missouri board (as more fully described in the section captioned “The Merger– Opinion of Southern Missouri’s Financial Advisor”) to the effect that as of September 20, 2022 and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Piper Sandler as set forth in its opinion, the merger consideration in the proposed merger was fair, from a financial point of view, to Southern Missouri. Following these discussions, review and analysis of materials provided to the board of directors and discussion among the members of the board of directors, the Southern Missouri board of directors determined that the merger agreement, the merger and the other transactions contemplated thereby are advisable and in the best interests of Southern Missouri and its shareholders, and the Southern Missouri board of directors voted to approve and adopt the merger agreement, the merger and the other transactions contemplated thereby. In addition, the Southern Bank board of directors approved the merger of CBTC with and into Southern Bank.

 

On September 20, 2022, the merger agreement and ancillary agreements were executed and delivered by Southern Missouri and Citizens. The transaction was publicly announced in the afternoon of September 20, 2022.

 

Recommendation of Citizens’ Board of Directors; Citizens’ Reasons for the Merger

 

Citizens’ board of directors believes that the merger agreement and the transactions contemplated by the merger agreement, including the mergers, are advisable and in the best interests of Citizens and its shareholders. Accordingly, Citizens' board of directors has unanimously approved the merger and the merger agreement and unanimously recommends that Citizens' shareholders vote “FOR” approval of the merger agreement proposal.

 

In reaching its decision to approve the merger and the merger agreement, the Citizens board of directors consulted with its senior management and financial advisor with respect to the financial aspects and fairness of the merger consideration, from a financial point of view, to the shareholders and option holders of Citizens, and, with its outside legal counsel as to its legal duties and the terms of the merger agreement. The board believes that combining with Southern Missouri will create a stronger and more diversified organization that will provide significant benefits to Citizens' shareholders and customers.

 

The terms of the merger agreement, including the consideration to be paid to Citizens' shareholders, were the result of arm’s length negotiations between representatives of Citizens and representatives of Southern Missouri. In arriving at its determination to approve the merger agreement, Citizens' board of directors considered a number of factors, including the following material factors:

 

·its familiarity with and review of information concerning the business, results of operations, financial condition, competitive position and future prospects of Citizens;

 

·its review and discussions with Citizens’ management and advisors concerning Citizens’ due diligence examination of the business, results of operations, financial condition and competitive position of Southern Missouri;

 

·the current and prospective environment in which Citizens operates, including national, regional and local economic conditions, a potential recession, the competitive environment for banks, thrifts and other financial institutions generally, the increased regulatory burdens on financial institutions generally and the trend toward consolidation in the banking industry and in the financial services industry;

 

·that shareholders of Citizens will receive seventy-five percent (75%) of the merger consideration in shares of Southern Missouri common stock, which is listed on the NASDAQ Stock Market, contrasted with the absence of a public market for Citizens' common stock;

 

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·the ability of Citizens shareholders receiving shares of Southern Missouri common stock to participate in the future performance of the combined company’s business and in any synergies resulting from the merger;

 

·the expectation that the merger will be treated as a "reorganization" within the meaning of Section 368(a) of the Code with respect to the shares of Citizens common stock exchanged for Southern Missouri common stock;

 

·the results that Citizens could expect to obtain if it continued to operate independently, and the likely benefits to shareholders of that course of action, as compared with the value of the merger consideration offered by Southern Missouri and the prospects of the combined company;

 

·the ability of Southern Missouri to pay the aggregate merger consideration without a financing contingency and without the need to obtain financing to close the transaction;

 

·the ability of Southern Missouri to receive the requisite regulatory approvals in a timely manner;

 

·the exchange ratio and other financial terms of the merger and the merger agreement;

 

·the other terms and conditions of the merger agreement, including the parties' respective representations, warranties, covenants and other agreements, and the conditions to closing;

 

·that a merger with a larger company would provide the opportunity to realize economies of scale, increase efficiencies of operations and enhance the development of new products and services;

 

·that Citizens' directors and executive officers have financial interests in the merger in addition to their interests as Citizens shareholders, including financial interests that are the result of compensation arrangements with Citizens, and the manner in which such interests would be affected by the merger;

 

·that the cash portion of the merger consideration will be taxable to Citizens' shareholders upon completion of the merger;

 

·the fact that the merger agreement does not preclude a third party from making an unsolicited acquisition proposal to Citizens and that, under certain circumstances more fully described under “The Merger Agreement—Agreement Not to Solicit Other Offers” on page 89, Citizens may furnish non-public information to, and enter into discussions with, such a third party regarding a qualifying acquisition proposal;

 

·the presentation of D. A. Davidson to the Citizens board on September 19, 2022 and the written opinion, dated September 20, 2022, of D. A. Davidson to the Citizens board, as to the fairness, from a financial point of view and as of the date of the opinion, to the shareholders and option holders of Citizens of the merger consideration, as more fully described below under “Opinion of Citizens’ Financial Advisor;” and

 

·the existing rights of the holder of Citizens' nonvoting stock to require Citizens to register the resale of its shares with the SEC and the timeframe of such requirements.

 

The Citizens board of directors also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the proposed transaction, including, without limitation, the following:

 

·the risk that, because the number of shares of Southern Missouri common stock to be received in exchange for Citizens shares in the merger is based upon a fixed exchange ratio, the value of the stock consideration to be paid to Citizens shareholders would be adversely affected by a decrease in the trading price of Southern Missouri common stock prior to the closing of the merger;

 

·Citizens' shareholders will have less influence as shareholders of Southern Missouri;

 

·regulatory approvals may not be received;

 

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·combination of the two companies may be more difficult, costly, or time consuming than expected;

 

·certain provisions of the merger agreement prohibiting Citizens from soliciting, and limiting its ability to respond to, alternative acquisition proposals, and requiring the payment of a termination fee, limit Citizens' ability to pursue alternative acquisition proposals;

 

·the risk that Citizens will have to pay a $5,500,000 termination fee to Southern Missouri if the merger agreement is terminated under certain circumstances;

 

·termination of the merger agreement could negatively impact Citizens;

 

·if the merger is not completed, Citizens will have incurred substantial expenses without realizing the expected benefit of the merger;

 

·the merger may fail to qualify as a tax-free reorganization under the Code;

 

·the potential for diversion of management and employee attention, and for employee attrition, during the period following the announcement of the merger and prior to the completion of the merger, and the potential effect on Citizens' business and relations with customers, service providers and other stakeholders, whether or not the merger is completed;

 

·the restrictions on the conduct of Citizens' business prior to the completion of the merger, which are customary for merger agreements involving financial institutions, but which, subject to specific exceptions, could delay or prevent Citizens from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of Citizens absent the pending completion of the merger;

 

·the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating Citizens' and Southern Missouri's business, operations and workforce with those of Southern Missouri and Southern Bank; and

 

·other risks described herein under the heading "Risk Factors."

 

The foregoing discussion of the information and factors considered by the Citizens board of directors is not intended to be exhaustive but includes the material factors considered by the Citizens board of directors.  In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the board of directors of Citizens did not assign any relative or specific weight to different factors and individual directors may have given weight to different factors.  Based on the reasons stated above, the board of directors of Citizens believes that the merger is in the best interest of Citizens and its shareholders and therefore the board of directors of Citizens unanimously approved the merger agreement and the merger.

 

This summary of the reasoning of Citizens’ board of directors and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Statements."

 

CITIZENS’ BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE MERGER AGREEMENT PROPOSAL.

 

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Opinion of Citizens’ Financial Advisor

 

On January 15, 2020, Citizens entered into an engagement agreement with D.A. Davidson on an exclusive basis to render financial advisory and investment banking services to Citizens in connection with Citizens' review of its financial and strategic alternatives, including through purchase, sale, merger, joint venture or otherwise, and whether in one or more transactions, by means of a merger, consolidation, reorganization, spin-off, joint venture, partnership, tender offer, exchange offer, purchase, lease, licensing, strategic alliance or any other transaction of a like nature, regardless of form, with another person, corporation or business entity. As part of its engagement, D.A. Davidson agreed to assist Citizens in analyzing, structuring, negotiating and, if appropriate, effecting a transaction between Citizens and another person, corporation or business entity. D.A. Davidson also agreed to provide Citizens' board of directors with an opinion as to the fairness, from a financial point of view, to the holders of Citizens' common stock of the merger consideration to be paid to such holders in the proposed merger. Citizens engaged D.A. Davidson because D.A. Davidson is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with Citizens and its business. As part of its investment banking business, D.A. Davidson is continually engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

 

On September 19, 2022, Citizens' board of directors held a meeting to evaluate the proposed merger. At this meeting, D.A. Davidson reviewed the financial aspects of the proposed merger and rendered an opinion to Citizens' board that, as such date and based upon and subject to assumptions made, procedures followed, matters considered and limitations on the review undertaken, the merger consideration was fair, from a financial point of view, to such holders of Citizens common stock in the proposed merger.

 

The full text of D.A. Davidson’s written opinion, dated September 20, 2022, is attached as Appendix C to this joint proxy statement/prospectus and is incorporated herein by reference. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of such opinion. Citizens' common shareholders are urged to read the opinion in its entirety.

 

D.A. Davidson’s opinion speaks only as of the date of the opinion and D.A. Davidson undertakes no obligation to revise or update its opinion. The opinion is directed to Citizens' board of directors and addresses only the fairness, from a financial point of view, to the holders of Citizens' common stock of the merger consideration to be paid to such holders in the proposed merger and does not constitute a recommendation to shareholders of Citizens as to how any such shareholder should vote at the Citizens special meeting called to consider and vote upon the merger agreement proposal. The opinion does not address, and D.A. Davidson expresses no view or opinion with respect to, (i) the underlying business decision of Citizens to engage in the merger, (ii) the relative merits or effect of the merger as compared to any alternative business transactions or strategies that may be or may have been available to or contemplated by Citizens or Citizens' board of directors, or (iii) any legal, regulatory, accounting, tax or similar matters relating to Citizens, its shareholders or relating to or arising out of the merger. The opinion expresses no view or opinion as to any terms or other aspects of the merger, except for the merger consideration. Citizens and Southern Missouri determined the merger consideration through a negotiated process. The opinion does not express any view as to the amount or nature of the compensation to any of Citizens' or Southern Missouri’s officers, directors or employees, or any class of such persons, relative to the merger consideration, or with respect to the fairness of any such compensation. The opinion has been reviewed and approved by D.A. Davidson’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

 

D.A. Davidson has reviewed the registration statement on Form S-4 of which this joint proxy statement/prospectus is a part and consented to the inclusion of its opinion to Citizens' board of directors as Appendix C to this joint proxy statement/prospectus and to the references to D.A. Davidson and its opinion contained herein.

 

In connection with rendering its opinion, D.A. Davidson reviewed, among other things, the following:

 

·a draft of the merger agreement, dated September 15, 2022, which D.A. Davidson assumed to be substantially the same form as the executed merger agreement in all material respects;

 

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·certain publicly available business and financial information about Citizens and Southern Missouri and the industry in which they operate, public filings by Southern Missouri including its most recent Form 10-K, Form 10-Qs, press releases and certain publicly available research analysts’ reports for Southern Missouri;

 

·certain internal projections and other financial and operating data concerning the business, operations, and prospects of Citizens and Southern Missouri prepared by or at the direction of management of Citizens and Southern Missouri, as approved for D.A. Davidson’s use by Citizens and Southern Missouri;

 

·information relating to certain strategic, financial, tax, and operational benefits, including the estimated amount and timing of the cost savings and related expenses and synergies, expected to result from the merger, prepared by or at the direction of management of Citizens and Southern Missouri, as approved for D.A. Davidson’s use by Citizens and Southern Missouri;

 

·the past and current business, operations, financial condition, and prospects of Citizens and Southern Missouri, the strategic, financial, tax, and operational benefits expected to result from the merger, and other matters D.A. Davidson deemed relevant, with senior management of Citizens and Southern Missouri;

 

·the market, trading and operating characteristics of selected public companies and selected public bank holding companies in particular;

 

·the financial terms of certain other transactions in the financial institutions industry, to the extent publicly available;

 

·the current and historical market prices and trading activity of [Citizens common stock and] Southern Missouri common stock with that of certain other publicly-traded companies that D.A. Davidson deemed relevant;

 

·the pro forma financial effects of the merger, taking into consideration the amounts and timing of transaction costs, earnings estimates, potential cost savings, and other financial and accounting considerations in connection with the merger;

 

·the value of the merger consideration to the valuation derived by discounting future cash flows and a terminal value of Citizens' business based upon Citizens' internal financial forecasts at discount rates that D.A. Davidson deemed appropriate;

 

·the results of D.A. Davidson’s efforts on behalf of Citizens to solicit, at the direction of the board of directors of Citizens, indications of interest and definitive proposals from third parties with respect to a possible acquisition of Citizens; and

 

·other such financial studies, analyses, investigations, economic and market information that D.A. Davidson considered relevant including discussions with management and other representatives and advisors of Citizens and Southern Missouri concerning the business, financial condition, results of operations and prospects of Citizens and Southern Missouri.

 

In arriving at its opinion, D.A. Davidson has, with Citizens' consent, assumed and relied upon the accuracy and completeness of all information that was publicly available or supplied or otherwise made available to, discussed with or reviewed by or for D.A. Davidson. D.A. Davidson has not independently verified (nor has it assumed responsibility for independently verifying) such information or its accuracy or completeness. D.A. Davidson has relied on the assurances of management of Citizens that they are not aware of any facts or circumstances that would make any of such information, forecasts or estimates inaccurate or misleading. D.A. Davidson has not undertaken or been provided with any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Citizens. In addition, D.A. Davidson has not assumed any obligation to conduct, nor has it conducted, any physical inspection of the properties or facilities of Citizens, and has not been provided with any reports of such physical inspections. D.A. Davidson has assumed that there has been no material change in Citizens' business, assets, financial condition, results of operations, cash flows or prospects since the date of the most recent financial statements provided to D.A. Davidson.

 

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With respect to the financial projections and estimates (including information relating to the amounts and timing of the merger costs, cost savings, and revenue enhancements) provided to or otherwise reviewed by or for or discussed with D.A. Davidson, D.A. Davidson has been advised by management of Citizens and Southern Missouri, and have assumed with the consent of Citizens and Southern Missouri, that such projections and estimates were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Citizens and Southern Missouri as to the future financial performance of Citizens and Southern Missouri and the other matters covered thereby, and that the financial results reflected in such projections and estimates will be realized in the amounts and at the times projected. D.A. Davidson assumes no responsibility for and expresses no opinion as to these projections and estimates or the assumptions on which they were based. D.A. Davidson has relied on the assurances of management of Citizens and Southern Missouri that they are not aware of any facts or circumstances that would make any of such information, projections or estimates inaccurate or misleading.

 

D.A. Davidson does not specialize in the evaluation of loan and lease portfolios, classified loans or other real estate owned or in assessing the adequacy of the allowance for loan losses with respect thereto, and it did not make an independent evaluation or appraisal thereof, or of any other specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of Citizens or Southern Missouri or any of their respective subsidiaries. D.A. Davidson has not reviewed any individual loan or credit files relating to Citizens or Southern Missouri. D.A. Davidson has assumed, with Citizens' consent, that the respective allowances for loan and lease losses for both Citizens and Southern Missouri are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. D.A. Davidson did not make an independent evaluation of the quality of Citizens' or Southern Missouri’s deposit base, nor has it independently evaluated potential deposit concentrations or the deposit composition of Citizens or Southern Missouri. D.A. Davidson did not make an independent evaluation of the quality of Citizens' or Southern Missouri’s investment securities portfolio, nor has it independently evaluated potential concentrations in the investment securities portfolio of Citizens or Southern Missouri.

 

D.A. Davidson has assumed that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct in all respects material to its analysis, and that the merger will be consummated in accordance with the terms of the merger agreement, without waiver, modification or amendment of any term, condition or covenant thereof the effect of which would be in any respect material to D.A. Davidson’s analysis. D.A. Davidson also has assumed that all material governmental, regulatory or other consents, approvals, and waivers necessary for the consummation of the merger will be obtained without any material adverse effect on Citizens or the contemplated benefits of the merger.

 

D.A. Davidson has assumed in all respects material to its analysis that Citizens and Southern Missouri will remain as a going concern for all periods relevant to D.A. Davidson’s analysis. D.A. Davidson expresses no opinion regarding the liquidation value of Citizens and Southern Missouri or any other entity.

 

D.A. Davidson’s opinion is limited to the fairness, from a financial point of view, of the merger consideration to be paid to the holders of Citizens common stock in the proposed merger. D.A. Davidson does not express any view on, and its opinion does not address, any other term or aspect of the merger agreement or merger (including, without limitation, the form or structure of the merger) or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into in connection with the merger, or as to the underlying business decision by Citizens to engage in the merger. D.A. Davidson’s opinion does not take into account individual circumstances of specific holders with respect to control, voting or other rights which may distinguish such holders.

 

D.A. Davidson has not evaluated the solvency or fair value of Citizens or Southern Missouri under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. This opinion is not a solvency opinion and does not in any way address the solvency or financial condition of Citizens or Southern Missouri. D.A. Davidson is not expressing any opinion as to the impact of the merger on the solvency or viability of Citizens or Southern Missouri or the ability of Citizens or Southern Missouri to pay their respective obligations when they come due.

 

Set forth below is a summary of the material financial analyses performed by D.A. Davidson in connection with rendering its opinion. The summary of the analyses D.A. Davidson set forth below is not a complete description of the analysis underlying its opinion, and the order in which these analyses are described below is not indicative of any relative weight or importance given to those analyses by D.A. Davidson. The following summaries of financial analyses include information presented in tabular format. You should read these tables together with the full text of the summary financial analyses, as the tables alone are not a complete description of the analyses.

 

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Unless otherwise indicated, the following quantitative information, to the extent it is based on market data, is based on pricing and market data as of September 16, 2022, and is not necessarily indicative of market conditions after such date.

 

Implied Valuation Multiples for Citizens based on the merger consideration.

 

·D.A. Davidson reviewed the financial terms of the proposed transaction. As described in the merger agreement, each outstanding share of the common stock, of Citizens (the “Citizens common stock”), shall have the right to elect to receive cash equal to the per share cash consideration of $53.50 or the per share stock consideration of 1.1448 shares of Southern Missouri common stock, subject to the proration, allocation and adjustment provisions in the merger agreement, as to which adjustments D.A. Davidson expresses no opinion. Citizens has advised D.A. Davidson that the merger will qualify as a tax-free reorganization for U.S. federal income tax purposes. The terms and conditions of the merger are more fully set forth in the merger agreement. Based upon financial information as of June 30, 2022 and other financial and market information described below, D.A. Davidson calculated the following transaction ratios:

 

Transaction Ratios

 

   Aggregate   Per Share (1) 
Transaction Price / 2022A Net Income (2)   27.6x   27.1x
Transaction Price / 2023E Net Income (3)   15.0x   14.7x
Transaction Price / Book Value (6/30/2022)   149.3%   146.5%
Transaction Price / Tangible Book Value (6/30/2022)   153.4%   150.6%
Transaction Price / Core 8% Tangible Book Value (6/30/2022)   162.0%   158.7%
Tangible Book Premium / Core Deposits (6/30/2022) (4)   6.5%   5.3%

 

 

(1)Excludes the impact of options.
(2)Citizens financials calendarized to Southern Missouri for a 6/30/2022 fiscal year end.
(3)Financial projections for Citizens based on Citizens' management budgeted financials in fiscal year end 2023.
(4)Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits.

 

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Stock Price Performance of Southern Missouri. D.A. Davidson reviewed the history of the reported trading prices and volume of Southern Missouri common stock and certain stock indices, including the S&P 500, the S&P U.S. BMI Banks Index and the NASDAQ Bank Index. D.A. Davidson compared the stock price performance of Southern Missouri with the performance of the S&P 500, the S&P U.S. BMI Banks Index and the NASDAQ Bank Index as follows:

 

Year-To-Date

 

   Beginning Index Value on
12/31/2021
   Ending Index Value on
9/16/2022
 
S&P 500   100.0%   81.3%
S&P U.S. BMI Banks (1)   100.0%   82.3%
NASDAQ Bank   100.0%   85.4%
Southern Missouri   100.0%   101.5%

 

One Year Stock Performance

 

   Beginning Index Value on
9/16/2021
   Ending Index Value on
9/16/2022
 
S&P 500   100.0%   86.6%
S&P U.S. BMI Banks (1)   100.0%   86.2%
NASDAQ Bank   100.0%   95.3%
Southern Missouri   100.0%   120.9%

 

Post-COVID Stock Performance

 

   Beginning Index Value on
2/28/2020
   Ending Index Value on
9/16/2022
 
S&P 500   100.0%   131.1%
S&P U.S. BMI Banks (1)   100.0%   113.7%
NASDAQ Bank   100.0%   128.0%
Southern Missouri   100.0%   161.3%

 

Ten Year Stock Performance

 

   Beginning Index Value on
9/16/2012
   Ending Index Value on
9/16/2022
 
S&P 500   100.0%   265.1%
S&P U.S. BMI Banks (1)   100.0%   204.2%
NASDAQ Bank   100.0%   221.6%
Southern Missouri   100.0%   450.1%

 

 

(1) S&P U.S. BMI Banks Index (includes all Major Exchange (NYSE, NYSE American, NASDAQ) Banks and Thrifts in SNL's coverage universe) pricing as of 9/15/2022.

 

Contribution Analysis. D.A. Davidson analyzed the relative contribution of Citizens and Southern Missouri to certain financial and operating metrics for the pro forma combined company. Such financial and operating metrics included: (i) Citizens' net income calendarized for a fiscal year end June 30, 2022 and Citizens' estimated net income calendarized for a fiscal year end June 30, 2023, June 30, 2024 and June 30, 2025, based on Citizens management’s budgeted financials with Southern Missouri management adjustments; (ii) Southern Missouri’s net income for the fiscal year end June 30, 2022 and Southern Missouri’s estimated net income for the fiscal year end June 30, 2023, June 30, 2024 and June 30, 2025, based on Southern Missouri management estimates; (iii) total assets; (iv) total investment securities; (v) gross loans (including loans held for sale); (vi) loan loss reserve; (vii) deposits; and (viii) tangible common equity. The relative contribution analysis did not give effect to the impact of any synergies as a result of the proposed merger. The results of this analysis are summarized in the table below, which also compares the results of this analysis with the implied pro forma ownership percentages of Citizens' or Southern Missouri’s shareholders in the combined company based on the merger consideration:

 

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Contribution Analysis

 

           Pro Forma Contibution 
   Southern Missouri   Citizens   Southern Missouri   Citizens 
   ($ in thousands)   ($ in thousands)         
Income Statement                    
Net Income (2022A)  $46,971   $5,091    90.2%   9.8%
Net Income (2023E)  $43,540   $9,172    82.6%   17.4%
Net Income (2024E)  $48,387   $12,441    79.5%   20.5%
Net Income (2025E)  $56,949   $13,408    80.9%   19.1%
Pro Forma Net Income (2024E)*  $48,387   $22,119    68.6%   31.4%
Pro Forma Net Income (2025E)*  $56,949   $24,200    70.2%   29.8%
                     
Balance Sheet  6/30/2022   6/30/2022           
Total Assets  $3,215,694   $1,003,337    76.2%   23.8%
Total Cash  $91,577   $237,395    27.8%   72.2%
Total Investment Securities  $235,352   $240,868    49.4%   50.6%
Gross Loans, Incl. Loans HFS  $2,719,390   $471,356    85.2%   14.8%
Loan Loss Reserve  $33,193   $6,389    83.9%   16.1%
Deposits  $2,815,126   $879,428    76.2%   23.8%
Tangible Common Equity  $287,343   $91,722    75.8%   24.2%
                     
Average Contribution (Items Highlighted Above)             81.8%   18.2%
Median Contribution (Items Highlighted Above)             81.8%   18.2%
                     
Pro Forma Ownership Split in Merger Model             82.1%   17.9%
Pro Forma Ownership Split in 100% Stock Deal             78.0%   22.0%

 

Note: Citizens net income calendarized for a fiscal year end June 30, 2022 and Southern Missouri's estimated net income calendarized for a fiscal year end June 30, 2023, June 30, 2024, and June 30, 2025 based on Citizens' management budgeted financials with Southern Missouri management and Piper Sandler adjustments.

 

Citizens Comparable Companies Analysis.      D.A. Davidson used publicly available information to compare selected financial and market trading information for a group of 24 financial institutions selected by D.A. Davidson which: (i) were headquartered in Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota or Wisconsin; (ii) had their common stock listed on the NYSE, NASDAQ or an over-the-counter exchange; (iii) had Total Assets between $500.0 million and $3.0 billion; (iv) had Non-Performing Assets/Total Assets less than 2.0%; (v) had a Loan-to-Deposit Ratio less than 80.0%; (vi) had Tangible Common Equity/Tangible Assets greater than 8.0%. The 24 financial institutions were as follows:

 

 

Bank of Labor Bancshares Inc.

BankFinancial Corp

BNCCORP Inc.

CITBA Financial Corp.

Citizens National Corp.

Cmnty Bcshs (McArthur OH)

Commercial National Financial

Consumers Bancorp Inc.

Croghan Bancshares Inc.

Crystal Valley Financial Corp.

Farmers Bancorp (Frankfort IN)

FFW Corp.

First Bankers Trustshares Inc.

Foresight Fnl Group Inc.

Keweenaw Financial Corporation

Macatawa Bank Corp.

Ohio Valley Banc Corp.

Oxford Bank Corporation

Pontiac Bancorp

Redwood Financial Inc.

Security National Corp.

The Baraboo Bancorp.

Two Rivers Financial Grp Inc.

West Shore Bank

 

The analysis compared the financial condition and market performance of Citizens and the 24 financial institutions identified above based on publicly available financial and market trading information for Citizens and the 24 financial institutions as of and for the twelve-month or three-month period ended September 16, 2022. The analysis did not reflect the impact from pending acquisitions or acquisitions closed after September 16, 2022. The table below shows the results of this analysis (excluding the impact of earnings per share multiples considered not meaningful by D.A. Davidson).

 

 54 

 

 

Financial Condition and Performance

 

       Comparable Companies 
   Citizens (2)   Median   Average   Low   High 
Total Assets (in millions)  $1,003   $919   $1,018   $511   $2,781 
Loan / Deposit Ratio   53.6%   70.3%   66.6%   37.6%   79.7%
Non-Performing Assets / Total Assets (1)   1.85%   0.43%   0.45%   0.05%   1.40%
Tangible Common Equity Ratio   9.17%   8.49%   7.95%   1.98%   11.05%
Net Interest Margin (LTM)   2.52%   3.11%   3.06%   1.97%   3.60%
Cost of Deposits (LTM)   0.15%   0.16%   0.19%   0.03%   0.41%
Non-Interest Income / Total Assets (LTM)   0.91%   0.72%   0.88%   0.35%   2.73%
Efficiency Ratio (LTM)   84.3%   67.2%   68.1%   55.8%   86.2%
Return on Average Equity (LTM)   4.85%   9.67%   9.93%   4.97%   17.81%
Return on Average Assets (LTM)   0.51%   0.92%   0.94%   0.43%   1.55%

 

Market Performance Multiples

 

   Comparable Companies 
   Median   Average   Low   High 
Market Capitalization (in millions)  $86.9   $93.6   $7.2   $328.1 
Price Change (LTM)   (4.1)%   (5.2)%   (41.2)%   25.7%
Price Change (YTD)   (9.3)%   (10.2)%   (40.5)%   8.6%
Price / LTM Earnings   9.3x   10.5x   5.5x   21.8x
Price / Tangible Book Value   111.8%   109.9%   41.6%   162.6%
Price / Core 8% Tangible Book Value   110.6%   110.4%   67.1%   168.6%
Tangible Book Premium / Core Deposits (3)   0.96%   1.00%   (3.13)%   6.88%
Dividend Yield (Most Recent Quarter)   2.72%   3.98%   1.40%   29.30%
Average Daily Volume (in thousands)  $17   $50   $-   $427 

 

 

(1) Non-Performing Assets / Total Assets includes performing TDRs.
(2) Citizens Net Income based on Est. LTM Net Income available to common shareholders.
(3) Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits.

 

Southern Missouri Comparable Companies Analysis. D.A. Davidson used publicly available information to compare selected financial and market trading information for Southern Missouri and a group of 34 financial institutions selected by D.A. Davidson which: (i) were headquartered in Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota or Wisconsin; (ii) had their common stock listed on the NYSE or NASDAQ exchange; (iii) had Total Assets between $1.0 billion and $7.5 billion; (iv) had a Return on Average Assets greater than 1.0%; and (vi) were not pending merger targets. These 34 financial institutions were as follows:

 

 

Alerus Financial Corp.

Ames National Corp.

Bank First Corporation

Bridgewater Bancshares Inc.

Byline Bancorp Inc.

CF Bankshares Inc.

Citizens Community Bncp

Civista Bancshares Inc.

Community Trust Bancorp Inc.

CrossFirst Bankshares Inc.

Equity Bancshares Inc.

Farmers & Merchants Bancorp

Farmers National Banc Corp.

First Business Finl. Svcs. Inc

First Financial Corp.

First Mid Bancshares

German American Bancorp Inc.

Great Southern Bancorp Inc.

Hawthorn Bancshares Inc.

HBT Financial Inc.

Independent Bank Corp.

Lakeland Financial Corp.

Landmark Bancorp Inc.

LCNB Corp.

Limestone Bancorp Inc.

Middlefield Banc Corp.

Midland States Bancorp Inc.

Nicolet Bankshares Inc.

Pathward Financial Inc.

Peoples Bancorp Inc.

QCR Holdings Inc.

Republic Bancorp Inc.

United Bancshares Inc.

West Bancorp.

 

The analysis compared the financial condition and market performance of Southern Missouri and the 34 financial institutions identified above based on publicly available financial and market trading information for Southern Missouri and the 34 financial institutions as of and for the twelve-month or three-month period ended September 16, 2022. The analysis also compared the 2022 and 2023 earnings per share multiples for Southern Missouri and the 34 financial institutions identified above based on publicly available analyst earnings estimates for Southern Missouri and the 34 financial institutions. The analysis did not reflect the impact from pending acquisitions or acquisitions closed after September 16, 2022. The table below shows the results of this analysis (excluding the impact of earnings per share multiples considered not meaningful by D.A. Davidson).

 

 55 

 

 

Financial Condition and Performance

 

   Southern   Comparable Companies 
   Missouri   Median   Average   Low   High 
Total Assets (in millions)  $3,215   $4,169   $4,270   $1,111   $7,436 
Loan / Deposit Ratio   96.3%   84.7%   83.5%   59.2%   122.5%
Non-Performing Assets / Total Assets (1)   0.40%   0.33%   0.46%   0.01%   1.59%
Tangible Common Equity Ratio   9.32%   7.64%   7.80%   5.37%   13.55%
Net Interest Margin (LTM)   3.72%   3.36%   3.39%   2.68%   4.63%
Cost of Deposits (LTM)   0.46%   0.19%   0.21%   0.01%   0.61%
Non-Interest Income / Total Assets (LTM)   0.71%   0.87%   1.01%   0.17%   3.92%
Efficiency Ratio (LTM)   48.0%   56.9%   57.3%   41.0%   71.8%
Return on Average Equity (LTM)   15.44%   11.91%   12.59%   9.03%   20.47%
Return on Average Assets (LTM)   1.59%   1.27%   1.29%   1.00%   2.10%

 

Market Performance Multiples

 

   Southern   Comparable Companies 
   Missouri   Median   Average   Low   High 
Market Capitalization (in millions)  $488.6   $480.0   $540.2   $69.7   $1,962.0 
Price Change (LTM)   20.9%   6.2%   1.7%   (36.3)%   28.3%
Price Change (YTD)   1.5%   (7.9)%   (9.4)%   (45.0)%   19.3%
Price / LTM Earnings   10.2x   9.1x   9.6x   6.2x   20.3x
Price / Tangible Book Value   163.5%   140.0%   159.1%   95.6%   352.2%
Price / Core 8% Tangible Book Value   174.0%   144.8%   154.6%   92.1%   383.3%
Tangible Book Premium / Core Deposits (2)   7.09%   4.38%   5.35%   (0.76)%   27.85%
Dividend Yield (Most Recent Quarter)   1.51%   2.62%   2.80%   0.45%   5.95%
Average Daily Volume (in thousands)  $1,062   $1,277   $1,681   $60   $9,471 

 

 

(1) Non-Performing Assets / Total Assets includes performing TDRs.
(2) Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits.

 

Precedent Transactions Analysis. D.A. Davidson reviewed three sets of precedent merger and acquisition transactions. The sets of mergers and acquisitions included: (1) “Nationwide Transactions,” (2) “Midwest Transactions” and (3) “Kansas & Missouri Transactions”.

 

“Nationwide Transactions” included 26 transactions where the:

 

·selling company was a bank headquartered in the United States;

 

·selling company’s Total Assets were between $500.0 million and $3.0 billion;

 

·transaction was announced since the beginning of 2021;

 

·selling company’s Return on Average Assets over the last twelve months was greater than 0.00%;

 

·selling company’s Loan-to-Deposit Ratio was below 75%;

 

·transaction’s pricing information was publicly available;

 

·buying company was not an investor group; and

 

·transaction was not a merger of equals.

 

“Midwest Transactions” included 11 transactions where the:

 

·selling company was a bank headquartered in Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota or Wisconsin;

 

 56 

 

 

·selling company’s Total Assets were between $500.0 million and $3.0 billion;

 

·selling company’s Return on Average Assets over the last twelve months was greater than 0.00%;

 

·selling company’s Loan-to-Deposit Ratio was below 80%;

 

·transaction was announced since the beginning of 2021;

 

·transaction’s pricing information was publicly available;

 

·buying company was not an investor group; and

 

·transaction was not a merger of equals.

 

“Kansas & Missouri Transactions” included 13 transactions where the:

 

·selling company was a bank headquartered in Kansas or Missouri;

 

·selling company’s Total Assets were between $200.0 million and $5.0 billion;

 

·selling company’s Return on Average Assets over the last twelve months was greater than 0.00%;

 

·transaction was announced since the beginning of 2019;

 

·transaction’s pricing information was publicly available;

 

·buying company was not an investor group; and

 

·transaction was not a merger of equals.

 

The following tables set forth the transactions included in “Nationwide Transactions,” “Midwest Transactions” and “Kansas & Missouri Transactions” and are sorted by announcement date:

 

Nationwide Transactions

 

Announcement Date Buyer Target

8/18/2022*

7/27/2022*

7/26/2022*

7/25/2022*

6/13/2022*

6/01/2022*

5/12/2022*

5/04/2022*

4/18/2022

4/01/2022*

3/29/2022*

3/10/2022*

2/24/2022

11/01/2021

8/09/2021

7/27/2021

7/27/2021

7/26/2021

6/23/2021

6/03/2021

5/17/2021

4/22/2021

4/19/2021

3/29/2021

1/19/2021

1/13/2021

TowneBank

The First Bancshares, Inc.

Bank First Corporation

Somerset Savings Bank, SLA

CrossFirst Bankshares, Inc.

F.N.B. Corporation

DFCU Financial

Seacoast Banking Corp. of FL

National Bank Holdings Corp.

National Bank Holdings Corp.

Seacoast Banking Corp. of FL

Arizona Federal Credit Union

Origin Bancorp, Inc.

MidWestOne Financial Group

Arbor Bancorp, Inc.

CVB Financial Corp.

TriCo Bancshares

Old Second Bancorp, Inc.

Columbia Banking System

First Foundation Inc.

Equity Bancshares, Inc.

Colony Bankcorp, Inc.

Bank of Marin Bancorp

Peoples Bancorp Inc.

First Busey Corporation

BancorpSouth Bank

Farmers Bankshares, Inc.

Heritage SE Bancorp.

Hometown Bancorp, Ltd.

Regal Bancorp, Inc.

Farmers & Stockmens Bank

UB Bancorp

First Citrus Bancorporation

Drummond Banking Co.

Community Bancorporation

Bancshares of Jackson Hole, Inc.

Apollo Bancshares, Inc.

Horizon Community Bank

BT Holdings, Inc.

Iowa First Bancshares Corp.

FNBH Bancorp, Inc.

Suncrest Bank

Valley Republic Bancorp

West Suburban Bancorp

Bank of Commerce Holdings

TGR Financial, Inc.

American St. Bancshares

SouthCrest Financial Group, Inc.

American River Bncs.

Premier Financial Bancorp

Cummins-American Corp.

FNS Bancshares, Inc.

 

 

*Indicates the transaction was pending as of September 16, 2022.

 

 57 

 

 

Midwest Transactions

 

Announcement Date Buyer Target

7/26/2022*

1/19/2022

11/09/2021

11/01/2021

8/09/2021

8/03/2021

7/26/2021

6/23/2021

5/17/2021

1/27/2021

1/19/2021

Bank First Corporation

Bank First Corporation

QCR Holdings, Inc.

MidWestOne Financial Group

Arbor Bancorp, Inc.

Stock Yards Bancorp, Inc.

Old Second Bancorp, Inc.

Farmers National Banc Corp.

Equity Bancshares, Inc.

Stock Yards Bancorp, Inc.

First Busey Corporation

Hometown Bancorp, Ltd.

Denmark Bancshares, Inc.

Guaranty Federal Bancshares

Iowa First Bancshares Corp.

FNBH Bancorp, Inc.

Commonwealth Bancshares

West Suburban Bancorp

Cortland Bancorp

American St. Bancshares

Kentucky Bancshares, Inc.

Cummins-American Corp.

 

 

*Indicates the transaction was pending as of September 16, 2022.

 

Kansas & Missouri Transactions

 

Announcement Date Buyer Target

6/28/2022*

11/09/2021

9/28/2021

7/29/2021

5/17/2021

11/20/2020

9/28/2020

1/08/2020

9/25/2019

7/31/2019

5/31/2019

4/10/2019

1/16/2019

Landmark Bancorp, Inc.

QCR Holdings, Inc.

Southern Missouri Bancorp

First Mid Bancshares, Inc.

Equity Bancshares, Inc.

OakStar Bancshares, Inc.

First Mid Bancshares, Inc.

First Illinois Bancorp, Inc.

Central Bancompany, Inc.

Simmons First National Corp.

Dickinson Financial Corp. II

Central Bancompany, Inc.

Heartland Financial USA, Inc.

Freedom Bancshares, Inc.

Guaranty Federal Bancshares

Fortune Financial Corp.

Delta Bancshares Co.

American St. Bancshares

First Bancshares, Inc.

LINCO Bancshares, Inc.

Rockwood Bancshares

Platte County Bancshares

Landrum Company

KCB Bank

Liberty Bancorp, Inc.

Blue Valley Ban Corp.

 

 

*Indicates the transaction was pending as of September 16, 2022.

 

For each transaction referred to above, D.A. Davidson compared, among other things, the following implied ratios:

 

·transaction price compared to tangible book value, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;

 

·transaction price compared to core 8% tangible book value, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;

 

 58 

 

 

·transaction price compared to net income for the last twelve months, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction; and

 

·tangible book premium to core deposits, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction.

 

As illustrated in the following table, D.A. Davidson compared the proposed merger multiples to the multiples of the comparable transaction groups and other operating financial data where relevant. The table below sets forth the data for the comparable transaction groups as of the last twelve months ended prior to the transaction announcement and Citizens data for the last twelve months ended September 16, 2022.

 

Financial Condition and Performance

 

       Nationwide   Midwest   Kansas & Missouri 
   Citizens   Median   Average   Low   High   Median   Average   Low   High   Median   Average   Low   High 
Total Assets (in millions)  $1,003.3   $947.0   $1,170.0   $519.4   $2,972.4   $791.7   $1,099.6   $519.4   $2,972.4   $605.0   $784.6   $222.7   $3,291.6 
Return on Average Assets (LTM)   0.51%   0.98%   0.97%   0.42%   1.39%   0.97%   0.94%   0.42%   1.39%   1.00%   1.04%   0.27%   1.84%
Return on Average Equity (LTM)   4.85%   9.73%   9.91%   4.53%   15.79%   9.90%   9.36%   4.53%   14.43%   9.90%   10.16%   2.46%   18.33%
Tangible Common Equity Ratio   9.17%   8.37%   8.45%   4.74%   11.14%   8.94%   9.09%   7.31%   10.45%   9.23%   9.93%   6.88%   14.90%
Core Deposits / Deposits   98.4%   95.3%   94.8%   89.4%   99.6%   95.3%   95.4%   91.1%   99.5%   91.1%   90.2%   80.7%   98.0%
Loans / Deposits