Southern Missouri Bancorp lines up deal in its home state

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Southern Missouri Bancorp in Poplar Bluff has agreed to buy Central Federal Bancshares in Rolla, Mo.

The $2.3 billion-asset Southern Missouri said in a press release Friday that it will pay $24 million in cash for the $69 million-asset Central. The deal, which is expected to close last in the second quarter, values Central at 100% of its tangible book value.

Central has one branch, $53 million in loans and $46 million in deposits.

“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,” Greg Steffens, the company’s president and CEO, said in the release.

“While this is a very low-risk transaction for us, its ultimate success will be based … on our ability to meaningfully grow Central’s role in the Rolla market over time,” Steffens added.

It should take about two years for Southern Missouri to earn back an expected 1% dilution to its tangible book value. Excluding merger-related expenses, the deal should be accretive to Southern Missouri’s earnings per share within six months of closing.

Southern Missouri plans to cut about half of Central’s annual noninterest expenses.

Keefe, Bruyette & Woods and Lewis Rice advised Central. Silver, Freedman, Taff & Tiernan advised Southern Missouri.

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