Southern Missouri Bancorp in Poplar Bluff has agreed to buy Citizens Bancshares in Kansas City, Mo.
The $3.2 billion-asset Southern Missouri said in a press release Wednesday that it will pay $140 million in cash and stock for the $1 billion-asset parent of Citizens Bank and Trust Co. The deal, which is expected to close in the first quarter, priced Citizens at 150% of its tangible book value.
Citizens has 14 branches, $465 million of loans and $879 million of deposits.
“Citizens’ franchise covers excellent communities, including the Kansas City metropolitan area,” Greg Steffens, Southern Missouri’s chairman and CEO, said in the release.
Citizens has “developed a strong deposit base and have a long history of serving their customers, which will be a great addition to our continued growth,” Steffens added. “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.”
Southern Missouri plans to cut about 35% of Citizens annual noninterest expenses. The company expects to incur $8.6 million of merger-related expenses.
The transaction is expected to be 5% accretive to Southern Missouri’s earnings per share for the fiscal year ending on June 30, excluding merger-related charges. It should be 17% accretive the following year.
Southern Missouri said it should take less than three years to earn back an estimated 8% dilution to its tangible book value.
Piper Sandler and Silver, Freedman, Taff & Tiernan advised Southern Missouri. D.A. Davidson and Stinson advised Citizens.