The combined total assets of Poplar Bluff-based Southern Missouri Bancorp have reached $4.5 billion with the recent merger with Citizens Bank and Trust Company.
The approximately $140 million transaction makes Southern Bank the 12th largest in deposit market share in Missouri, according to a press release from the company.
It is also the eighth largest bank headquartered in Missouri.
Bank officials announced the merger deal was signed Sept. 20 and following the acquisition, the combined company assets approximate $4.5 billion, with $3.8 billion in total deposits. Southern Missouri acquired Citizens in a stock and cash transaction.
“Southern Missouri Bancorp is very pleased to announce this partnership with Citizens. Citizens’ franchise covers excellent communities, including the Kansas City metropolitan area,” said Greg Steffens, chairman and chief executive officer of Southern Missouri. “They have developed a strong deposit base and have a long history of serving their customers, which will be a great addition to our continued growth.
“Additionally, a presence in Kansas City helps transform Southern Missouri into a more significant statewide player in Missouri as we continue to build long-term shareholder value.”
This deal marks Southern Bank’s expansion into Kansas City, following growth in February into St. Louis through a merger with FortuneBank, officials said.
Southern Bank was established by depositors in 1887 as Poplar Bluff Loan and Building. With assets of $100,000, it was created to provide financing for the customers purchasing homes. It began to expand outside of Poplar Bluff in 1969, company officials have previously told the Daily American Republic. Its first branch was located in Dexter.
Southern became a publicly traded stock company in 1994, a move that helped grow the company, officials said in 2018.
Citizens operates 14 banking centers throughout greater Kansas City, St. Joseph and Northwest Missouri.
The combined company will now operate 65 locations in Missouri, Arkansas, Illinois and Kansas.
“In addition to the long-term strategic importance of access to these new markets, Citizens provides us with immediate benefits from their excellent deposit base, and a concentration of short-duration instruments on the asset side of their balance sheet,” said Matt Funke, president and chief administrative officer for Southern Missouri. “Their deposit base will help us to manage our cost of funds, and the structure of their assets will help us manage our interest rate risk in this environment of rapidly changing interest rates.”
At June 30, Citizens’ consolidated assets were $1.0 billion, including net loans of $465 million, while deposits totaled $879 million, according to company officials.
Southern Missouri reported total assets at June 30 of $3.2 billion, including net loans of $2.7 billion, and total deposits of $2.8 billion.
On a pro forma basis, following the acquisition, the combined company’s total assets will approximate $4.5 billion, with net loans of $3.3 billion, and total deposits of $3.8 billion.
“This merger provides an opportunity for Citizens to join forces with a growing organization, while remaining committed to community banking,” said Roger Arwood, president and chief executive officer of Citizens. “We look forward to the opportunities and benefits this combination will bring to our customers and communities, in terms of a larger legal lending limit and broader branch coverage across Missouri.”
Based on Southern Missouri’s average closing stock price of $52.53 over the 20-day trading period ended Sept. 19, the aggregate transaction value is approximately $140 million, the company reported.
The deal value equates to 150% of Citizens’ tangible capital at June 30, represents a 5.9% premium to core deposits, and is a multiple of 7.1 times Citizens’ projected forward earnings including fully phased-in cost savings, which are estimated at 35%.
Poplar Bluff is home to the headquarters of not only Southern Bank, but also First Missouri State Bank, Ozark Federal Credit Union, First Midwest Bank and Sterling Bank.