Takeover #1 for 2020-our 33rd in last 3 years

a 51% gianer form initial buy recommendation! The stock was on the buy list all the way up untillast Friday.

Southern Missouri Bancorp, Inc. (NASDAQ: SMBC, “Southern Missouri”), the parent corporation of Southern Bank, and Central Federal Bancshares, Inc. (“Central”), the parent corporation of Central Federal Savings & Loan Association, today announced the signing of a definitive merger agreement whereby Southern Missouri will acquire Central in an all-cash transaction. As part of the transaction, Central Federal will be merged with and into Southern Bank.

Central operates one location in Rolla, Missouri. At September 30, 2019, Central’s consolidated assets were $69 million, including loans, net of allowance, of $53 million, while deposits totaled $46 million.

Southern Missouri operates 47 locations in Missouri, Arkansas, and Illinois, and reported consolidated assets at September 30, 2019, of approximately $2.3 billion, including loans, net, of $1.9 billion, and total deposits of $1.9 billion.

Under the terms of the merger agreement, unanimously approved by the boards of directors of Central and Southern Missouri, Central shareholders will receive $15.90 in cash for each share of Central common stock, subject to adjustment for Central’s capital at closing. The deal is valued at approximately $24.0 million, inclusive of the retirement of debt outstanding under Central’s Employee Stock Ownership Plan.

“Southern Missouri itself was originally a savings and loan association, and we retain an understanding of the needs and expectations of the customers of these organizations, as well as the commitment to service by their team members,” stated Greg Steffens, President and CEO of Southern Missouri. “We’re very excited to have the opportunity to serve Rolla, Missouri, and we look forward to welcoming the customers and staff of Central Federal Savings & Loan to our Southern Bank family.”

William Stoltz, President and Chief Executive Officer of Central, said, “We are truly excited to be merging with Southern Missouri, an institution that has served the financial needs of America’s Heartland for over 130 years, in a transaction that will benefit our shareholders, our customers, our employees and our community. The merger will provide our customers with a greatly expanded array of products, services and locations.”

The deal value is intended to approximate 100% of Central’s expected book value, adjusted for certain transaction expenses, at closing. “Tangible book value per common share is expected to be diluted by slightly less than 1% at closing, with a projected earnback period of approximately two years, based on the crossover method,” noted Steffens. “Excluding nonrecurring transaction-related expenses, the acquisition is anticipated to be accretive to earnings per share within six months of closing, but even after fully achieving our projected cost savings, which are targeted at 50%, accretion will only improve earnings per share by a negligible amount. While this is a very low-risk transaction for us, its ultimate success will be based not on these near-term statistics, but on our ability to meaningfully grow Central’s role in the Rolla market over time. As the home to the Missouri University of Science and Technology, a nationally-recognized, highly-selective institution focusing on a number of fields of study that will drive economic growth in coming decades, we see the Rolla community as poised for growth and one where we expect our products and services to be well-received.”

Southern Missouri and Central anticipate completion of the transaction late in the second calendar quarter of 2020, subject to satisfaction of customary closing conditions, including regulatory and shareholder approvals.

Posted to Banking on Profit on Jan 17, 2020 — 10:01 AM
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