Southern Missouri Bancorp in Poplar Bluff, Missouri, agreed to acquire Citizens Bancshares in Kansas City, Missouri, for $140 million in cash and stock.
The $3.2 billion-asset Southern Missouri said the acquisition would give it entrance to the state's largest city as well as Northwest Missouri more broadly. The expansion furthers Southern Missouri's efforts to become a prominent statewide bank, executives said in a release announcing the deal after markets closed Tuesday. The companies expect the deal to close in the first quarter of 2023.
"Citizens' franchise covers excellent communities, including the Kansas City metropolitan area. 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," Greg Steffens, chairman and CEO of Southern Missouri, said in the release.
"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," Steffens said.
The combined company's assets would total approximately $4.5 billion, with net loans of $3.3 billion and total deposits of $3.8 billion. The merged bank would operate 65 branches across Missouri and in neighboring parts of Arkansas, Illinois and Kansas.
The deal value equates to 150% of Citizens Bancshares' tangible capital, and it represents a 5.9% premium to core deposits, the companies said.
Southern Missouri projected the transaction would be accretive to its earnings per share by about 5% in its fiscal year ending June 30, 2023, and by 17% the following fiscal year.
Tangible book value per common share is expected to be diluted by about 8% at closing, with a projected earn-back period of less than three years.
