[TAMMCORP,SOUTHERN MISSOURI BANCSHARES, INC. LOGO] | | [SOUTHERN MISSOURI BANCORP, INC. LOGO] |
MERGER PROPOSED - YOUR VOTE IS VERY IMPORTANT
Dear Tammcorp,Southern Missouri Bancshares, Inc. Shareholder:
The boards of directors of Southern Missouri Bancorp, Inc., which we refer to as "Southern Missouri,"Bancorp," and Tammcorp,Southern Missouri Bancshares, Inc., which we refer to as "Tammcorp,"SM Bancshares," have each approved a merger of our two companies. Under the merger agreement, TammcorpSM Bancshares will merge with and into Southern Missouri,Bancorp, with Southern MissouriBancorp being the surviving corporation.corporation, on the terms and conditions set forth in the merger agreement. Following completion of the merger, Tammcorp's 91%SM Bancshares' wholly owned bank subsidiary, CapahaSouthern Missouri Bank of Marshfield, which we refer to as "SMB," will merge with and into Southern Missouri'sBancorp's wholly owned bank subsidiary, Southern Bank, with Southern Bank being the surviving bank.
If the merger is completed, holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times Tammcorp'sSM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, adjusted for certain of Tammcorp'sSM Bancshares' transaction expenses, minus (2) $162,000, which represents the amount to be paid by Southern Missouri pursuant to a non-competition agreement with an executive officer of Tammcorp that will become effective upon completionexcess, if any, of the merger.cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000. As of March 31,September 30, 2017, Tammcorp'sSM Bancshares' consolidated equity capital, as adjusted for its estimated transaction expenses,and contract termination costs, was $16.1$10.9 million. Based on this amount, if the merger were completed in AprilOctober 2017, the aggregate merger consideration would be $22.4$15.3 million (($16.1($10.9 million x 1.4) - $162,000). One-halfTwenty-five percent (25%) of the merger consideration will be paid in cash and one-halfseventy-five percent (75%) will be paid in shares of Southern MissouriBancorp common stock.
The cash consideration paid for each share of TammcorpSM Bancshares common stock, and for each share of Tammcorp Class A preferred stock (on an as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation), which we refer to as the "per share cash consideration," will be equal to 50%25% of the aggregate merger consideration divided by the sum of (1) the number of shares of TammcorpSM Bancshares common stock issued and outstanding immediately prior to the merger assuming all minority shareholders of Capaha Bank participate in the share exchange described below and (2) the aggregate number of shares of Tammcorp common stock into which shares of Tammcorp Class A preferred stock are convertible.merger. The stock consideration paid for each share of TammcorpSM Bancshares common stock, and for each share of Tammcorp Class A preferred stock (on an as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation), which we refer to as the "per share stock consideration," will be a number of shares of Southern MissouriBancorp common stock equal to three times the per share cash consideration divided by $31.80, the average closing price of Southern MissouriBancorp common stock for the 20 trading day period ending on and including the fifth trading day before the day of completionpreceding August 17, 2017 (the date of the merger agreement), which we refer to as the "average Southern MissouriBancorp common stock price."
The number of shares of Southern Missouri common stock issuable as the per share stock consideration will fluctuate with the market price of Southern Missouri common stock and will not be known at the time Tammcorp shareholders vote on the merger agreement. On January 11, 2017, the closing price of Southern Missouri common stock immediately prior to the public announcement of the merger agreement was $33.76, and on ___________________, 2017, the most recent trading day practicable before the printing of this proxy statement/prospectus, the closing price of Southern Missouri common stock was $_____. You should obtain current stock price quotations for Southern Missouri common stock. Southern Missouri common stock is listed on the NASDAQ Global Market under the symbol "SMBC." Neither Tammcorp common stock nor Tammcorp Class A preferred stock is listed or traded on any established securities exchange or quotation system.
Assuming the aggregate merger consideration is $22.4of $15.3 million, and that all minority shareholders of Capaha Bank participate in the share exchange described below, based on the number of shares of Tammcorp common stock and Tammcorp Class A preferred stock currently outstanding the per share cash consideration would be $1,634.34. In this case, if the average Southern Missouri common stock price were $33.76,$96.95 and the per share stock consideration would consist of 48.4105be 9.1467 shares of Southern MissouriBancorp common stock and if the average Southern Missourifor each share of SM Bancshares common stock price were $____, theoutstanding. The per share stock consideration to be issued at the 9.1467 exchange ratio would consistrepresent approximately $290.87 in value for each share of ___ sharesSM Bancshares common stock, which, when added to the $96.95 per share cash merger consideration, equates to approximately $387.82 in value for each share of Southern MissouriSM Bancshares common stock. SM Bancshares shareholders who would otherwise be entitled to a fractional share of Bancorp common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $31.80.
As stated above, the aggregate merger consideration the holders of SM Bancshares common stock will receive in the merger is based on SM Bancshares' consolidated equity capital (as adjusted pursuant to the merger agreement) as of the last business day of the month immediately preceding the month in which the merger closing occurs. Accordingly, the aggregate merger consideration to be paid to the holders of SM Bancshares common stock at closing will depend on a number of factors, including SM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, the total amount of SM Bancshares' transaction expenses and the final cost of contract termination charges of SM Bancshares triggered as a result of the merger. In addition, since the stock portion of the merger consideration is calculated based on $31.80 (the average Bancorp common stock price), the market value of the stock portion of the merger consideration to be paid to the holders of SM Bancshares common stock will vary from the closing price of Bancorp common stock on the date Bancorp and SM Bancshares announced the merger, on the date that this proxy
statement/prospectus is mailed to SM Bancshares shareholders, on the date of the SM Bancshares special meeting and on the date the merger is completed and thereafter. However, there will not be any adjustment to the merger consideration for changes in the market price of shares of Bancorp common stock. Therefore, you will not know at the time of the special meeting the precise aggregate merger consideration or the market value of the stock portion of the merger consideration you will receive upon completion of the merger. We urge you to obtain current market quotations for Bancorp common stock (NASDAQ: trading symbol "SMBC").
As described in the accompanying proxy statement/prospectus, the completion of the merger is subject to customary conditions, including approval of the merger agreement by Tammcorp'sSM Bancshares' shareholders and the receipt of regulatory approvals. In addition, it is a condition to Southern Missouri's obligation to complete the merger that a share exchange transaction by Tammcorp be consummated with the shareholders of Capaha Bank holding at least 80% of the outstanding shares of Capaha Bank's common stock not owned by Tammcorp, whereby such minority shareholders will become holders of Tammcorp common stock immediately prior to the merger. Assuming consummation of the share exchange transaction and completion of the merger, the minority shareholders of Capaha Bank will be entitled to receive the merger consideration payable under the merger agreement.
TammcorpSM Bancshares will hold a special meeting of its shareholders to vote on the merger agreement. Approval of the merger agreement by TammcorpSM Bancshares shareholders requires the affirmative vote of the holders of two-thirds of the outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock, voting together as a single class.stock. A failure to vote will have the same effect as voting against the merger agreement. In addition to voting on the merger agreement, at the special meeting, TammcorpSM Bancshares shareholders will vote on a proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger agreement, which we sometimes refer to as the "adjournment proposal."
The TammcorpSM Bancshares board of directors has carefully considered the merger and the terms of the merger agreement and believes that the completion of the merger on the terms set forth in the merger agreement is in the best interest of TammcorpSM Bancshares and its shareholders. Accordingly, the TammcorpSM Bancshares board of directors recommends that holders of TammcorpSM Bancshares common stock and Class A preferred stock vote "FOR" approval of the merger agreement proposal and "FOR" the adjournment proposal. In considering the recommendations of the board of directors of Tammcorp,SM Bancshares, you should be aware that the directors and executive officers of TammcorpSM Bancshares have interests in the merger that are different from, or in addition to, the interests of TammcorpSM Bancshares shareholders generally. See the section entitled "The Merger—Interests of Tammcorp'sSM Bancshares' Directors and Executive Officers in the Merger" beginning on page __31 of this proxy statement/prospectus.
This proxy statement/prospectus describes the special meeting, the documents related to the merger and other matters. Please carefully read this entire proxy statement/prospectus, including "Risk Factors," beginning on page 1613 of this proxy statement/prospectus, for a discussion of the risks relating to the proposed merger. You also can obtain information about Southern MissouriBancorp from documents that it has filed with the Securities and Exchange Commission.
| | |
| | John R. Abercrombie |
| | President and Chief Executive OfficerKent O. Hyde, Chairman |
| | Tammcorp,Southern Missouri Bancshares, Inc. |
Neither the Securities and Exchange Commission nor any state securities commission or any bank regulatory agency has approved or disapproved the shares of Southern MissouriBancorp stock to be issued in the merger or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.
The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of Southern MissouriBancorp or Tammcorp,SM Bancshares, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
The date of this proxy statement/prospectus is _________________,December 8, 2017, and it is first being mailed or otherwise delivered to the shareholders of TammcorpSM Bancshares on or about _________________,December 13, 2017.
Tammcorp, Inc.
One South MainSOUTHERN MISSOURI BANCSHARES, INC.
1292 Banning Street
Cape Girardeau,Marshfield, MO 6370365706
(573) 331-7100(417) 859-1292
Notice of Special Meeting of Tammcorp, Inc. ShareholdersNOTICE OF SPECIAL MEETING OF
SOUTHERN MISSOURI BANCSHARES, INC. SHAREHOLDERS
| |
Date: | _________________, 2017January 15, 2018 |
Time: | _____ _.m.10:00 a.m., local time
|
Place: | 109 Independence1292 Banning Street, Cape Girardeau,Marshfield, MO 6370365706 |
To Tammcorp,Southern Missouri Bancshares, Inc. Shareholders:
We are pleased to notify you of and invite you to a special meeting of shareholders of Tammcorp,Southern Missouri Bancshares, Inc., which we refer to as "SM Bancshares." At the special meeting, holders of TammcorpSM Bancshares common stock and Class A preferred stock will be asked to vote on the following matters:
· | A proposal to approve the Agreement and Plan of Merger, dated as of January 11,August 17, 2017, by and between Southern Missouri Bancorp, Inc., which we refer to as "Bancorp," Southern Missouri Acquisition Corp., which we refer to as "Merger Sub," and Tammcorp, Inc.,SM Bancshares, pursuant to which TammcorpSM Bancshares will merge with and into Southern Missouri;Bancorp; and |
· | A proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement. |
Only holders of record of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock as of the close of business on _________________,December 8, 2017 are entitled to vote at the special meeting and any adjournments or postponements of the special meeting. Approval of the merger agreement proposal requires the affirmative vote of the holders of two-thirds of the outstanding shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock, voting together as a single class.stock. The adjournment proposal will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal. Each share of TammcorpSM Bancshares common stock entitles its holder to one vote, and each share of Tammcorp Class A preferred stock entitles its holder to one vote.
Tammcorp'sSM Bancshares' board of directors has unanimously approved the merger agreement, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of TammcorpSM Bancshares and its shareholders, and unanimously recommends that holders of TammcorpSM Bancshares common stock and Class A preferred stock vote "FOR" approval of the merger agreement proposal and "FOR" the adjournment proposal.
Your vote is very important. We cannot complete the merger unless Tammcorp'sSM Bancshares' shareholders approve the merger agreement.
To ensure your representation at the special meeting, please complete and return the enclosed proxy card. Whether or not you expect to attend the special meeting in person, please vote promptly.
TammcorpSM Bancshares has concluded that, in connection with the merger, holders of TammcorpSM Bancshares common stock and Class A preferred stock have the right to exercise dissenters' rights under Sections 11.65 and 11.70Section 351.455 of the IllinoisGeneral and Business Corporation Act,Law of Missouri, which we sometimes refer to as the "IBCA,"MGBCL," and obtain payment of the "fair value" of their shares of TammcorpSM Bancshares common stock and Class A preferred stock in lieu of the merger consideration that holders of TammcorpSM Bancshares common stock and Class A preferred stock would otherwise receive pursuant to the merger agreement. This right to dissent is summarized in the accompanying proxy statement/prospectus on page _____,32, and copiesa copy of Sections 11.65 and 11.70 areSection 351.455 is reprinted in full as Appendix B to the accompanying proxy statement/prospectus.
The enclosed proxy statement/prospectus provides a detailed description of the special meeting, the merger, the documents related to the merger and other matters. We urge you to read the proxy statement/prospectus,
including the documents incorporated in the proxy statement/prospectus by reference, and its appendices carefully and in their entirety.
We look forward to hearing from you.
| | By Order of the Board of Directors |
| | |
| | |
| | John R. Abercrombie |
| | President and Chief Executive OfficerKent O. Hyde, Chairman |
| | Tammcorp,Southern Missouri Bancshares, Inc. |
_________________,December 13, 2017
Cape Girardeau,Marshfield, MO
YOUR VOTE IS VERY IMPORTANTIMPORTANT!
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE VOTE PROMPTLY BY RETURNING THE ENCLOSED PROXY CARD.
REFERENCES TO ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information about Southern MissouriBancorp from documents filed with the Securities and Exchange Commission, or the SEC, that are not included in or delivered with this proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by Southern MissouriBancorp at no cost from the SEC's website at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference in this proxy statement/prospectus, at no cost by contacting Southern Missouri Bancorp, Inc., Attn: Investor Relations, 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, or by telephone at (573) 778-1800.
You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five business days before the date of Tammcorp'sSM Bancshares' special meeting of shareholders. This means that TammcorpSM Bancshares shareholders requesting documents must do so by _________________, 2017,January 8, 2018, in order to receive them before the special meeting.
In addition, if you have questions about the merger or the special meeting, need additional copies of this proxy statement/prospectus or need to obtain proxy cards or other information related to the proxy solicitation, you may contact Tammcorp,SM Bancshares, at the following address:
TAMMCORP,SOUTHERN MISSOURI BANCSHARES, INC.
Attn: President and Chief Executive OfficerJerry Morgan
One South Main1292 Banning Street
Cape Girardeau, Missouri 63701Marshfield, MO 65706
TammcorpSM Bancshares does not have a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, is not subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and accordingly does not file documents or reports with the SEC.
You should rely only on the information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated _________________,December 8, 2017, and you should assume that the information in this proxy statement/prospectus is accurate only as of such date. You should assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of the date of the document that includes such information. Neither the mailing of this proxy statement/prospectus to TammcorpSM Bancshares shareholders nor the issuance by Southern MissouriBancorp of shares of Southern MissouriBancorp common stock in connection with the merger will create any implication to the contrary.
Southern MissouriBancorp supplied all information contained or incorporated by reference in this proxy statement/prospectus relating to Southern MissouriBancorp and TammcorpSM Bancshares supplied all information contained in this proxy statement/prospectus relating to Tammcorp.SM Bancshares. Information on the websites of Southern MissouriBancorp and Tammcorp,SM Bancshares, or any subsidiary of Southern MissouriBancorp or Tammcorp,SM Bancshares, is not part of this proxy statement/prospectus or incorporated by reference herein. You should not rely on that information in deciding how to vote.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
See "Where You Can Find More Information" on page _____63 and "Information About Southern Missouri"Missouri Bancorp" on page ___52 for more details relating to Southern Missouri,Bancorp, and "Information About Tammcorp"Southern Missouri Bancshares" on page _____52 for more details relating to Tammcorp.SM Bancshares.
TABLE OF CONTENTS
Page
| Page |
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING | 1 |
| |
SUMMARY | 76 |
| |
RISK FACTORS | 1713 |
| |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | 2217 |
| |
SELECTED HISTORICAL FINANCIAL AND COMPARATIVE UNAUDITED PRO FORMA PER SHARE DATA | 2419 |
| |
Selected Historical Financial Data of Southern MissouriBancorp | 2419 |
| |
Comparative Unaudited Pro Forma Per Common Share Data | 2721 |
| |
THE SPECIAL MEETING | 2922 |
| |
THE MERGER | 3326 |
| |
Terms of the Merger | 3326 |
| |
Background of the Merger | 3427 |
Tammcorp's | |
SM Bancshares' Reasons for the Merger; Recommendation of Tammcorp'sSM Bancshares' Board of Directors | 3527 |
Southern Missouri's | |
Bancorp's Reasons for the Merger | 3729 |
Opinion of Sheshunoff – Financial Advisor to Tammcorp | 39 |
Southern Missouri'sBancorp's Board of Directors Following Completion of the Merger | 4531 |
| |
Interests of Tammcorp'sSM Bancshares' Directors and Executive Officers in the Merger | 4531 |
Regulatory Approvals | 46 |
Accounting Treatment | 4632 |
| |
Dissenters' Rights of TammcorpSM Bancshares Shareholders | 4732 |
Southern Missouri's | |
Bancorp's Dividend Policy | 4833 |
| |
Public Trading Markets | 4934 |
| |
THE MERGER AGREEMENT | 5035 |
| |
Structure of the Merger | 5035 |
| |
Merger Consideration | 5035 |
| |
Closing and Effective Time of the Merger | 5135 |
| |
Conversion of Shares; Exchange Procedures | 5136 |
| |
Letter of Transmittal | 5236 |
| |
Representations and Warranties | 5337 |
| |
Covenants and Agreements | 5539 |
| |
Shareholder Meeting and Recommendation of Tammcorp'sSM Bancshares' Boards of Directors | 5943 |
| |
Agreement Not to Solicit Other Offers | 5943 |
Exchange Offer for Minority Shareholders of Capaha Bank | 60 |
Conditions to Complete the Merger | 6044 |
| |
Termination of the Merger Agreement | 6145 |
| |
Effect of Termination | 6246 |
| |
Termination Fee | 6246 |
| |
Expenses and Fees | 6346 |
| |
Amendment, Waiver and Extension of the Merger Agreement | 6346 |
| |
Voting Agreement | 6347 |
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER | 6447 |
| |
Treatment of the Merger as a "Reorganization" | 6548 |
| |
U.S. Federal Income Tax Consequences of the Merger to U.S. Holders | 6649 |
| |
Potential Recharacterization of Gain as a Dividend | 6750 |
| |
Receipt of Cash in Lieu of a Fractional Share of Southern MissouriBancorp Stock | 6750 |
| |
Dissenting Shareholders | 6850 |
| |
Net Investment Income Tax | 6851 |
| |
Backup Withholding | 6851 |
| |
Information Reporting | 6851 |
| |
INFORMATION ABOUT SOUTHERN MISSOURI BANCORP | 6952 |
| |
INFORMATION ABOUT TAMMCORPSOUTHERN MISSOURI BANCSHARES | 6952 |
| |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF TAMMCORPSM BANCSHARES | 7053 |
| |
COMPARATIVE MARKET PRICES AND DIVIDENDS ON COMMON STOCK | 7154 |
| |
DESCRIPTION OF SOUTHERN MISSOURI'SBANCORP'S CAPITAL STOCK | 7255 |
| |
General | 7255 |
| |
Common Stock | 7255 |
| |
Preferred Stock | 7255 |
| |
Other Anti-Takeover Provisions | 7355 |
| |
COMPARISON OF SHAREHOLDER RIGHTS | 7356 |
| |
LEGAL MATTERS | 8062 |
| |
EXPERTS | 8062 |
| |
WHERE YOU CAN FIND MORE INFORMATION | 8063 |
APPENDICES
| A | Agreement and Plan of Merger, dated as of January 11,August 17, 2017, by and between Southern Missouri Bancorp, Inc., Southern Missouri Acquisition Corp. and Tammcorp,Southern Missouri Bancshares, Inc. |
| B | Sections 11.65 and 11.70Section 351.455 of the IllinoisGeneral and Business Corporation ActLaw of Missouri, as amended |
| C | Opinion of Sheshunoff, LLC |
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
The following are questions that you may have about the merger and the special meeting of TammcorpSM Bancshares shareholders, and brief answers to those questions. We urge you to read carefully the entire proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger and the special meeting. Additional important information is contained in the documents incorporated by reference into this proxy statement/prospectus. See "Where You Can Find More Information."
Unless the context otherwise requires, throughout this proxy statement/prospectus, "Southern Missouri""Bancorp" refers to Southern Missouri Bancorp, Inc., "Tammcorp""SM Bancshares" refers to Tammcorp,Southern Missouri Bancshares, Inc. and "we," "us" and "our" refers collectively to Southern MissouriBancorp and Tammcorp.SM Bancshares.
Q: | What is the merger? |
| |
A: | Southern MissouriBancorp and TammcorpSM Bancshares have entered into an Agreement and Plan of Merger, dated as of January 11,August 17, 2017 (which we refer to as the "merger agreement"), pursuant to which TammcorpSM Bancshares will be mergedmerge with and into Southern Missouri Acquisition Corp. (which we refer to as "Merger Sub"), with Southern MissouriSM Bancshares continuing as the surviving corporation and each outstanding share of SM Bancshares converted into the right to receive the merger consideration (we refer to this transaction as the "merger"). Immediately following the merger, SM Bancshares will merge with and into Bancorp, with Bancorp continuing as the surviving corporation (we refer to this transaction as the "merger""holding company merger"). Following the merger, Tammcorp's 91% and SM Bancshares' wholly owned subsidiary bank, CapahaSouthern Missouri Bank (which we refer to as "SMB"), will merge with and into Southern Missouri'sBancorp's wholly owned subsidiary bank, Southern Bank, with Southern Bank continuing as the surviving bank (we refer to this transaction as the "bank merger"). The merger, holding company merger and bank merger are sometimes collectively referred to herein as the "mergers." A copy of the merger agreement is attached to this proxy statement/prospectus as Appendix A.
|
| |
Q: | Why am I receiving this proxy statement/prospectus? |
| |
A: | We are delivering this document to you because you are a shareholder of TammcorpSM Bancshares and this document is a proxy statement being used by Tammcorp'sSM Bancshares' board of directors to solicit proxies of its shareholders in connection with approval of the merger agreement (which we sometimes refer to as the "merger agreement proposal"). This document is also a prospectus that is being delivered to TammcorpSM Bancshares shareholders because Southern MissouriBancorp is offering shares of its common stock to TammcorpSM Bancshares shareholders in connection with the merger. |
| |
| The merger cannot be completed unless the holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock approve the merger agreement proposal by the affirmative vote of the holders of two-thirds of the outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock, voting together as a single class.stock. |
| |
Q: | In addition to the merger agreement proposal, what else are TammcorpSM Bancshares shareholders being asked to vote on? |
| |
A: | TammcorpSM Bancshares is soliciting proxies from holders of its common stock and Class A preferred stockwith respect to one additional proposal. This additional proposal is to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger agreement proposal (which we sometimes refer to as the "adjournment proposal"). Completion of the merger is not conditioned upon approval of the adjournment proposal.
|
| |
Q: | What will TammcorpSM Bancshares shareholders receive in the merger? |
| |
A: | If the merger is completed, holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times Tammcorp'sSM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, adjusted for certain of Tammcorp'sSM Bancshares' transaction expenses, minus (2) $162,000, which represents the amount to be paid by Southern Missouri pursuant to a non-competition agreement with an executive officer of Tammcorp that will become effective upon completionexcess, if any, of the merger.cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000. As of March 31,September 30, 2017, Tammcorp'sSM Bancshares' consolidated equity capital, as adjusted for its estimated transaction |
| expenses and contract termination costs, was $16.1$10.9 million. Based on this amount, if the merger were completed in AprilOctober 2017, the aggregate merger consideration would be $22.4$15.3 million (($16.1($10.9 million x 1.4) - $162,000). One-halfTwenty-five percent (25%) of the merger consideration will be paid in cash and one-halfseventy-five (75%) will be paid in shares of Southern MissouriBancorp common stock. |
| |
| The cash consideration paid for each share of TammcorpSM Bancshares common stock, and for each share of Tammcorp Class A preferred stock (on an as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation), which we refer to as the "per share cash consideration," will be equal to 50%25% of the aggregate merger consideration divided by the sum of (1) the number of shares of TammcorpSM Bancshares common stock issued and outstanding immediately prior to the merger assuming all minority shareholders of Capaha Bank participate in the share exchange described below and (2) the aggregate number of shares of Tammcorp common stock into which shares of Tammcorp Class A preferred stock are convertible.merger. The stock consideration paid for each share of TammcorpSM Bancshares common stock, and for each share of Tammcorp Class A preferred stock (on an as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation), which we refer to as the "per share stock consideration," will be a number of shares of Southern MissouriBancorp common stock equal to three times the per share cash consideration divided by $31.80, the average closing price of Southern MissouriBancorp common stock for the 20 trading day period ending on and including the fifth trading day before the day of completionpreceding August 17, 2017 (the date of the merger agreement), which we refer to as the "average Southern MissouriBancorp common stock price." TammcorpSM Bancshares shareholders who would otherwise be entitled to a fractional share of Southern MissouriBancorp common stock will instead receive an amount in cash equal to the fractional share interest multiplied by the average Southern Missouri common stock price. |
| The number of shares of Southern Missouri common stock issuable as the per share stock consideration will fluctuate with the market price of Southern Missouri common stock and will not be known at the time Tammcorp shareholders vote on the merger agreement. On January 11, 2017, the closing price of Southern Missouri common stock immediately prior to the public announcement of the merger agreement was $33.76, and on ___________________, 2017, the most recent trading day practicable before the printing of this proxy statement/prospectus, the closing price of Southern Missouri common stock was $_____. You should obtain current stock price quotations for Southern Missouri common stock. Southern Missouri common stock is listed on the NASDAQ Global Market under the symbol "SMBC." Neither Tammcorp common stock nor Tammcorp Class A preferred stock is listed or traded on any established securities exchange or quotation system. |
| |
| Assuming the aggregate merger consideration is $22.4 million and that all minority shareholders of Capaha Bank participate in the share exchange described below, based on the number of shares of Tammcorp common stock and Tammcorp Class A preferred stock currently outstanding the per share cash consideration would be $1,634.34. In this case, if the average Southern Missouri common stock price were $33.76, the per share stock consideration would consist of 48.4105 shares of Southern Missouri common stock, and if the average Southern Missouri common stock price were $____, the per share stock consideration would consist of ___ shares of Southern Missouri common stock. |
| |
| $31.80. For further information, see "The Merger Agreement—Merger Consideration." |
| |
Q: | How will the merger affect the minority shareholders of Capaha Bank? |
| |
A: | It is a condition to Southern Missouri's obligation to complete the merger that a share exchange transaction by Tammcorp be consummated with the minority shareholders of Capaha Bank holding at least 80% of the outstanding shares of Capaha Bank's common stock not owned by Tammcorp, whereby such minority shareholders will become holders of Tammcorp common stock immediately prior to the merger. Assuming consummation of the share exchange transaction and completion of the merger, the minority shareholders of Capaha Bank will be entitled to receive the merger consideration payable under the merger agreement. |
| After the completion of the merger, if there are any minority shareholders of Capaha Bank who did not participate in the share exchange transaction, Southern Missouri will adopt a new or amended plan of merger for the bank merger providing for the shares of Capaha Bank common stock owned by such non-participating minority shareholders to be converted into the right to receive consideration payable by Southern Missouri that is identical in form and amount to the merger consideration that such non-participating minority shareholders would have been entitled to receive under the merger agreement had they participated in the exchange transaction, subject to their rights under the Illinois Savings Bank Act to demand payment of the value of their shares of Capaha Bank common stock. |
| |
Q: | Are the minority shareholders of Capaha Bank entitled to vote on the merger agreement? |
| |
A: | No, because they will not be shareholders of Tammcorp as of the voting record date for the special meeting and will not become shareholders of Tammcorp unless and until the exchange transaction is consummated, which is expected to occur immediately prior to the merger. In connection with being asked to participate in the exchange transaction, Tammcorp will provide the minority shareholders of Capaha Bank with a copy of this proxy statement/prospectus and an offering circular that describes the exchange offer, the merger and other pertinent information. |
| |
Q: | How does Tammcorp'sSM Bancshares' board of directors recommend that I vote at the special meeting? |
| |
A: | After careful consideration, Tammcorp'sSM Bancshares' board of directors unanimously recommends that holders of TammcorpSM Bancshares common stock and Class A preferred stock vote "FOR" the merger agreement proposal and "FOR" the adjournment proposal. |
| |
| John R. Abercrombie, President
All the directors and Chief Executive Officerexecutive officers of Tammcorp, hasSM Bancshares have entered into a voting agreementagreements with Southern MissouriBancorp pursuant to which he hasthey have agreed to vote histheir shares of TammcorpSM Bancshares common stock and Class A preferred stockbeneficially owned in favor of the merger agreement. SM Bancshares' directors and executive officers and their affiliates were entitled to vote approximately 18,931 shares of SM Bancshares' common stock, or approximately 48.1% of the total outstanding shares of SM Bancshares common stock as of the date of this proxy statement/prospectus. For more information regarding the voting agreement,agreements, see "The Merger Agreement—Voting Agreement"Agreements" beginning on page 47_____.. |
| |
| For a more complete description of Tammcorp'sSM Bancshares' reasons for the merger and the recommendations of the TammcorpSM Bancshares board of directors, see "The Merger—Tammcorp'sSM Bancshares' Reasons for the Merger; Recommendation of Tammcorp'sSM Bancshares' Board of Directors" beginning on page __.27. |
| |
Q: | When and where is the special meeting? |
| |
A: | The special meeting will be held at 109 Independence1292 Banning Street, Cape Girardeau, Missouri 63703,Marshfield, MO 65706, on _________________, 2017,January 15, 2018, at ______10:00 a.m., local time. |
| |
Q: | What do I need to do now? |
| |
A: | After you have carefully read this proxy statement/prospectus and have decided how you wish your shares to be voted, please complete, sign, and date your proxy card and mail it in the enclosed postage-paid return envelope as soon as possible. |
Q: | Who is entitled to vote? |
| |
A: | Holders of record of TammcorpSM Bancshares common stock and Class A preferred stock at the close of business on _________________,December 8, 2017, which is the date that the TammcorpSM Bancshares board of directors has fixed as the record date for the special meeting, are entitled to vote at the special meeting. |
| |
Q: | What constitutes a quorum? |
| |
A: | With regard to the merger agreement proposal, theThe presence at the special meeting, in person or by proxy, of the holders of a majority of the total outstanding shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will constitute a quorum for the transaction of business on the merger agreement |
| proposal. With regard to the adjournment proposal the presence at the special meeting, in person or by proxy, of the holders of a majority of the outstanding shares of Tammcorp common stock and Tammcorp Class A preferred stock will constitute a quorum for the transaction of business on the adjournment proposal. Abstentions and broker non-votes will be treated as shares that are present at the meeting for the purpose of determining the presence of a quorum. |
| |
Q: | What is the vote required to approve each proposal at the special meeting? |
| |
A: | Merger agreement proposal: To approve the merger agreement proposal, two-thirds of the shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock entitled to vote thereon (voting together as a single class) must be voted in favor of such proposal. If you mark "ABSTAIN" on your proxy or fail to submit a proxy and fail to vote in person at the special meeting, it will have the same effect as a vote "AGAINST" the merger agreement proposal. |
| |
| Adjournment proposal: The adjournment proposal will be approved if the votes cast in favor of such proposal at the special meeting exceed the votes cast in opposition to such proposal. If you mark "ABSTAIN" on your proxy or fail to submit a proxy and fail to vote in person at the special meeting, it will have no effect on the adjournment proposal. |
| |
Q: | Why is my vote important? |
| |
A: | If you do not vote by proxy or attend the special meeting in person, it will be more difficult for TammcorpSM Bancshares to obtain the quorums required to transact business at the special meeting. In addition, the failure of a holder of TammcorpSM Bancshares common stock or Class A preferred stock to submit a proxy or vote in person at the special meeting, as well as an abstention, will have the same effect as a vote "AGAINST" the merger agreement proposal at the special meeting. The merger agreement must be approved by the affirmative vote of the holders of two-thirds of the shares of TammcorpSM Bancshares common stock and Class A preferred stock entitled to vote on the merger agreement proposal, voting together as a single class.proposal. |
| |
Q: | Can I attend the special meeting and vote my shares in person? |
| |
A: | Yes. All shareholders of TammcorpSM Bancshares are invited to attend the special meeting. Holders of record of TammcorpSM Bancshares common stock and Class A preferred stock can vote in person at the special meeting. If you wish to vote in person at the special meeting and you are a shareholder of record, you should bring the enclosed proxy card and proof of identity. At the appropriate time during the special meeting, the shareholders present will be asked whether anyone wishes to vote in person. You should raise your hand at this time to receive a ballot to record your vote. Even if you plan to attend the special meeting, we encourage you to vote by proxy to save us the expense of further proxy solicitation efforts. |
| |
Q: | Can I change my proxy or voting instructions? |
| |
A: | Yes. If you are a holder of record of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock you may revoke your proxy at any time before it is voted by (1) signing and returning a proxy card with a later date, (2) delivering a written revocation to Tammcorp'sSM Bancshares' Corporate Secretary or (3) attending the TammcorpSM Bancshares special meeting in person and voting by ballot at the special meeting. Attendance at the special meeting by itself will not automatically revoke your proxy. A revocation or later-dated proxy received by TammcorpSM Bancshares after the vote is taken at the special meeting will not affect your previously submitted proxy. The mailing address for Tammcorp's President and Chief Executive OfficerSM Bancshares' Corporate Secretary is: Tammcorp,Southern Missouri Bancshares, Inc., Attention: President and Chief Executive Officer, One South MainCorporate Secretary, 1292 Banning Street, Cape Girardeau,Marshfield, MO 63703.65706. |
| |
Q: | Will TammcorpSM Bancshares be required to submit the proposal to approve the merger agreement to its shareholders even if Tammcorp'sSM Bancshares' board of directors has withdrawn or modified its recommendation? |
| |
A: | Yes. Unless the merger agreement is terminated before the special meeting, TammcorpSM Bancshares is required to submit the proposal to approve the merger agreement to its shareholders even if Tammcorp'sSM Bancshares' board of directors has withdrawn or modified its recommendation. |
| |
Q: | What are the U.S. federal income tax consequences of the merger to TammcorpSM Bancshares shareholders? |
| |
A: | The merger ismergers, taken as a whole, are intended to qualify as aone or more tax-deferred "reorganization""reorganizations" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the "Code"). Assuming the merger qualifiesmergers qualify as a reorganization, a U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock generally will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Southern MissouriBancorp common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock in the merger exceeds such U.S. holder's adjusted tax basis in the holder's TammcorpSM Bancshares common stock or Class A preferred stock surrendered and (ii) the amount of cash received by such U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock (in each case excluding any cash received in lieu of fractional shares of Southern MissouriBancorp common stock, with the gain or loss on such fractional share determined separately, as discussed below under "Material U.S. Federal Income Tax Consequences of the Merger—Receipt of Cash in Lieu of a Fractional Share of Southern MissouriBancorp Stock"). Gain or loss is determined separately with respect to each block or class of TammcorpSM Bancshares common stock, and a loss realized on one block or class of shares may not be used to offset a gain realized on another block or class of shares in the merger. |
| |
| It is a condition to the completion of the merger that Southern MissouriBancorp and TammcorpSM Bancshares each receive written opinions from their respective legal counseltax advisor a written opinion to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. |
| |
| All holders of TammcorpSM Bancshares common stock and Class A preferred stock should consult their own independent tax advisors regarding the particular tax consequences of the merger to them, including the applicability and effect of U.S. federal, state, local, foreign, and other tax laws. |
| |
Q: | Are holders of TammcorpSM Bancshares common stock and Class A preferred stock entitled to dissenters' rights? |
| |
A: | Yes. The IllinoisGeneral and Business Corporation ActLaw of Missouri (which we refer to as the "IBCA""MGBCL") permits a holder of TammcorpSM Bancshares common stock or Class A preferred stock to dissent from the merger and obtain payment in cash of the "fair value" of his or her shares of TammcorpSM Bancshares common stock or Class A preferred stock. To do this, thea shareholder must follow specificall of the procedures including deliveringof Section 351.455 of the MGBCL in order to preserve his or her statutory rights. In general, a shareholder must: (i) before the vote on approval of the merger agreement proposal at the special meeting, file a written objection to the merger with SM Bancshares; (ii) not vote FOR the merger agreement proposal; (iii) within 20 days following the effective date of the merger, file a written demand for payment for his or herwith the Bancorp; and (iv) state in the written demand the number of shares if the merger is effectuated to Tammcorp before the shareholder vote on the merger agreement is taken and not voting his or her shares in favor of the merger agreement.SM Bancshares common stock owned by such shareholder. If a holder of TammcorpSM Bancshares common stock or Class A preferred stock follows the required procedures, his or her only right will be to receive the "fair value" of his or her shares of TammcorpSM Bancshares common stock or Class A preferred stock in cash. If a holderAny failure to observe any of Tammcorp common stockthese procedures could result in the total loss of dissenters' rights under Section 351.455. A shareholder who lost his or Class A preferred stock thinks that he or she may desireher dissenters' rights would be bound by the merger agreement and would have to dissent, then such person should not send in a proxy unless it is marked to vote againstaccept the merger consideration as provided by the merger agreement. Copies of the applicable provisions of the IBCAMGBCL are attached to this proxy statement/prospectus as Appendix B. See "The Merger—Dissenters' Rights of TammcorpSM Bancshares Shareholders." |
| |
Q: | If I am a holder of TammcorpSM Bancshares common stock or Class A preferred stock in certificated form, should I send in my TammcorpSM Bancshares common stock certificates now? |
| |
A: | No. Please do not send in your TammcorpSM Bancshares common stock certificates with your proxy. After completion of the merger, the exchange agent will send you instructions for exchanging certificates for TammcorpSM Bancshares common stock or Class A preferred stock for the merger consideration. See "The Merger Agreement—Conversion of Shares; Exchange Procedures." |
| |
Q: | What should I do if I hold my shares of TammcorpSM Bancshares common stock or Class A preferred stock in book-entry form? |
| |
A: | You are not required to take any special additional actions if your shares of TammcorpSM Bancshares common stock or Class A preferred stock are held in book-entry form. After the completion of the merger, the exchange agent will send you instructions for exchanging your shares for the merger consideration. See "The Merger Agreement—Conversion of Shares; Exchange Procedures." |
| |
Q: | Whom may I contact if I cannot locate my TammcorpSM Bancshares common stock certificate(s)? |
| |
A: | If you are unable to locate your original TammcorpSM Bancshares common stock certificate(s), you should contact John R. Abercrombie, Tammcorp'sPaula Honeycutt, SM Bancshares' Senior Vice President, and Chief Executive Officer, at (573) 331-7100.(417) 840-7815. |
| |
Q: | What should I do if I receive more than one set of voting materials? |
| |
A: | TammcorpSM Bancshares shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you are a holder of record of TammcorpSM Bancshares common stock or Class A preferred stock and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this proxy statement/prospectus to ensure that you vote every share of TammcorpSM Bancshares common stock and Class A preferred stock that you own.
|
| |
Q: | When do you expect to complete the merger? |
| |
A: | Southern MissouriBancorp and TammcorpSM Bancshares expect to complete the merger late in the secondfirst quarter of 20172018, once all of the conditions to the merger are fulfilled. However, neither Southern MissouriBancorp nor TammcorpSM Bancshares can assure you of when or if the merger will be completed. We must first obtain the approval by TammcorpSM Bancshares shareholders of the merger agreement, obtain necessary regulatory approvals and satisfy certain other closing conditions, including consummation by Tammcorp of the share exchange transaction with the minority shareholders of Capaha Bank holding at least 80% of the outstanding shares of Capaha Bank's common stock not owned by Tammcorp.conditions. |
| |
Q: | What happens if the merger is not completed? |
| |
A: | If the merger is not completed, holders of TammcorpSM Bancshares common stock and Class A preferred stock will not receive any consideration for their shares in connection with the merger. Instead, TammcorpSM Bancshares will remain an independent company and the minority shareholders of Capaha Bank will retain their ownership interests in Capaha Bank.company. In addition, if the merger agreement is terminated in certain circumstances, a termination fee may be required to be paid by TammcorpSM Bancshares to Southern Missouri.Bancorp. See "The Merger Agreement—Termination Fee" beginning on page _____46 for a complete discussion of the circumstances under which a termination fee will be payable. |
| |
Q: | Whom should I call with questions? |
| |
A: | If you have any questions concerning the merger or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus or need help voting your shares of TammcorpSM Bancshares common stock or Class A preferred stock, please contact John R. Abercrombie, Tammcorp'sPaula Honeycutt, SM Bancshares' Senior Vice President, and Chief Executive Officer, at (573) 331-7100.(417) 840-7815. |
SUMMARY
This summary highlights selected information from this proxy statement/prospectus and may not contain all of the information that is important to you. You should carefully read this entire document, including the appendices, and the other documents to which this document refers to fully understand the merger and the related transactions. A list of the documents incorporated by reference appears on page 63_____under "Where You Can Find More Information."
The Merger and the Merger Agreement (pages _____26 and _____)35)
The terms and conditions of the merger are contained in the merger agreement, which is attached to this proxy statement/prospectus as Appendix A. We encourage you to read the merger agreement carefully, as it is the legal document that governs the merger.
In the merger, TammcorpSM Bancshares will merge with and into Southern Missouri,Merger Sub, a wholly owned subsidiary of Bancorp, with Southern Missouri beingSM Bancshares as the surviving corporation. Followingentity after the merger. As a result of this merger, each outstanding share of SM Bancshares common stock (other than dissenting and treasury shares) will be converted into the right to receive the merger Tammcorp's 91% owned subsidiary bank, Capaha Bank,consideration described below.
Immediately following the merger, SM Bancshares will merge with Southern Missouri'sand into Bancorp with Bancorp as the surviving entity and SM Bancshares' wholly owned bank subsidiary, SMB, will merge with and into Bancorp's wholly owned bank subsidiary, Southern Bank, in the bank merger, with Southern Bank beingas the surviving bank.entity after the bank merger. As a result of the mergers, SM Bancshares and SMB will cease to exist as separate entities.
In the Merger, Holders of TammcorpSM Bancshares Common Stock and Class A Preferred Stock Will Receive Shares of Southern MissouriBancorp Common Stock and Cash (page _____)35)
If the merger is completed, holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times Tammcorp'sSM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, adjusted for certain of Tammcorp'sSM Bancshares' transaction expenses, minus (2) $162,000, which represents the amount to be paid by Southern Missouri pursuant to a non-competition agreement with an executive officer of Tammcorp that will become effective upon completionexcess, if any, of the merger.cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000. As of March 31,September 30, 2017, Tammcorp'sSM Bancshares' consolidated equity capital, as adjusted for its estimated transaction expenses and contract termination charges, was $16.1$10.9 million. Based on this amount, if the merger were completed in AprilOctober 2017, the aggregate merger consideration would be $22.4$15.3 million (($16.1($10.9 million x 1.4) - $162,000). One-halfTwenty-five percent (25%) of the merger consideration will be paid in cash and one-halfseventy-five percent (75%) will be paid in shares of Southern MissouriBancorp common stock.
The per share cash consideration will be equal to 50%25% of the aggregate merger consideration divided by the sum of (1) the number of shares of TammcorpSM Bancshares common stock issued and outstanding immediately prior to the merger assuming all minority shareholders of Capaha Bank agree to exchange their shares of Capaha Bank common stock for shares of Tammcorp common stock immediately prior to the merger and (2) the aggregate number of shares of Tammcorp common stock into which shares of Tammcorp Class A preferred stock are convertible.merger. The per share stock consideration will be a number of shares of Southern MissouriBancorp common stock equal to three times the per share cash consideration divided by $31.80, the average Southern MissouriBancorp common stock price. Tammcorp shareholders who would otherwise be entitled to a fractional share of Southern Missouri common stock will instead receive an amount in cash equal to the fractional share interest multiplied by the average Southern Missouri common stock price.
The number of shares of Southern Missouri common stock issuable as the per share stock consideration will fluctuate with the market price of Southern Missouri common stock and will not be known at the time Tammcorp shareholders vote on the merger agreement. On January 11, 2017, the closing price of Southern Missouri common stock immediately prior to the public announcement of the merger agreement was $33.76, and on ___________________, 2017, the most recent trading day practicable before the printing of this proxy statement/prospectus, the closing price of Southern Missouri common stock was $_____. You should obtain current stock price quotations for Southern Missouri common stock. Southern Missouri common stock is listed on the NASDAQ Global Market under the symbol "SMBC." Neither Tammcorp common stock nor Tammcorp Class A preferred stock is listed or traded on any established securities exchange or quotation system.
Assuming the aggregate merger consideration is $22.4$15.3 million, and that all minority shareholders of Capaha Bank agree to exchange their shares of Capaha Bank common stock for shares of Tammcorp common stock
immediately prior to the merger,per share cash consideration, based on the number of shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock currently outstanding, the per share cash consideration would be $1,634.34. In this case, if the average Southern Missouri common stock price were $33.76,$96.95 and the per share stock consideration, based on the $31.80 average Bancorp common stock price, would consist of 48.41059.1467 shares of Southern Missouri common stock, and if the average Southern Missouri common stock price were $____, the per share stock consideration would consist of ___ shares of Southern MissouriBancorp common stock.
A portion of the cash merger consideration equal to the unpaid balance of principal and accrued interest with respect to certain of Capaha Bank's lending relationships, net of amounts charged off by Capaha Bank prior to the merger or held by Capaha Bank as special or designated loan loss reserves at the time of the merger, will be withheld by Southern Missouri from the per share cash consideration on a pro rata basis and deposited into escrow with Southern Bank. The escrowed amount, currently anticipated to be approximately $___, will be disbursed following the final resolution of the loans, first to Southern Missouri in the amount of any losses incurred by it on the loans plus all income attributable to that portion of the escrowed funds, with any remaining escrowed funds then being disbursed to Tammcorp shareholders as a second installment of the per share cash consideration.
Southern Missouri'sBancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC". Neither Tammcorp'sSM Bancshares' common stock nor its Class A preferred stock is not listed on an exchange or quoted on any automated services, and there is no established trading market for shares of TammcorpSM Bancshares common stock or Class A preferred stock. The following table shows the closing sale prices of Southern MissouriBancorp common stock as reported on NASDAQ on, and the last known sales prices of TammcorpSM Bancshares common stock and Class A preferred stock as of, January 11,August 17, 2017, immediately prior to the public announcement of the merger agreement, and ___________________,December 4, 2017, the last practicable trading day before the printing of this proxy statement/prospectus. This table also shows the implied value of the merger consideration payable for each share of TammcorpSM Bancshares common stock, and Class A preferred stock (on an as-converted basis to sharescalculated by multiplying the closing price of TammcorpBancorp common stock in accordance with Tammcorp's articleson those dates by the exchange ratio of incorporation), calculated by assuming that9.1467 for the aggregatestock portion of the base merger consideration, is $22.4 million and adding to that all minority shareholdersamount $96.95 for the cash portion of Capaha Bank agree to exchange their sharesthe merger consideration.
Date | | Bancorp Closing Price | | SM Bancshares Common Stock Sales Price | | Implied Value of Merger Consideration for One Share of SM Bancshares Common Stock |
| | | | | | |
August 17, 2017 | | $31.23 | | $309.19 (1) | | $382.60 |
December 4, 2017 | | $39.44 | | $309.19 (1) | | $457.70 |
| | | | | | |
(1)The last known sale of Capaha BankSM Bancshares common stock for shares of Tammcorp common stock immediately prior to the merger and basedoccurred on the number of shares of Tammcorp common stock and Tammcorp Class A preferred stock currently outstanding. One-half of this value will be paid in cash and one-half will be paid in shares of Southern Missouri common stock, with cash paid in lieu of fractional Southern Missouri shares.
Date | | Southern Missouri Closing Price | | Tammcorp Common Stock Sales Price | | Tammcorp Class A Preferred Stock Sales Price | | Implied Value of Merger Consideration for One Share of Tammcorp Common Stock or Class A Preferred Stock(3) |
| | | | | | | | |
January 11, 2017 | | $ | 33.76 | | $2,350.00 (1) | | $211.86 (2) | | $3,268.68 |
___________________, 2017 | | $_____ | | $______ (1) | | $_____ (2) | | $ _____ |
| | | | | | | | | |
(1)
| The last known sale of Tammcorp common stock occurred on April 8, 2016. |
(2)
| The last known sale of Tammcorp Class A preferred stock occurred on October 12, 2012. |
(3)
| For each share of Tammcorp Class A preferred stock, on an as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation. |
February 15, 2017.
TammcorpSM Bancshares Will Hold a Special Meeting of Shareholders on _________________, 2017January 15, 2018 (page _____)22)
A special meeting of Tammcorp'sSM Bancshares' shareholders will be held on _________________, 2017,January 15, 2018, at _____ _.m.10:00 a.m., local time, at 109 Independence1292 Banning Street, Cape Girardeau, Missouri 63703.Marshfield, MO 65706. At the special meeting, holders of TammcorpSM Bancshares common stock and Class A preferred stock will be asked to vote on the following matters:
· | the merger agreement proposal; and |
· | the adjournment proposal. |
Only holders of record of TammcorpSM Bancshares common stock and Class A preferred stock at the close of business on _________________,December 8, 2017 will be entitled to vote at the special meeting. Each share of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock is entitled to one vote on the merger agreement proposal and the
adjournment proposal. As of the record date, there were 7,43339,356 shares of Tammcorp stock, consisting of 6,017 shares of TammcorpSM Bancshares common stock and 1,416 shares of Tammcorp Class A preferred stock entitled to vote at the special meeting. Holders of Tammcorp common stock and Tammcorp Class A preferred stock vote together as a single class. As of the record date, Tammcorp'sSM Bancshares' directors and executive officers and their affiliates were entitled to vote approximately 4,79318,931 shares of Tammcorp'sSM Bancshares' common stock and 258 shares of Class A preferred stock, or approximately 68.0%48.1% of the total combined outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock. This includes
Concurrent with the 3,553 shares of Tammcorp common stock and 258 shares of Tammcorp Class A preferred stock, or approximately 51.3%execution of the total combined outstanding shares of Tammcorp common stockmerger agreement, each SM Bancshares director and Class A preferred stock, covered byexecutive officer entered into a voting agreement with Mr. Abercrombie described below. Tammcorp expects that all of its directors and executive officers and their affiliates willBancorp under which they have agreed, among other things, (i) to vote their shares in favor of the merger agreement proposal. Assuming this occurs, approval of the merger agreement is assured.
Concurrent with the execution of the merger agreement, John R. Abercrombie, Tammcorp's Presidentproposal, and Chief Executive Officer, entered into a voting agreement with Southern Missouri under which he generally has agreed (1) to vote or cause to be voted in favor of the merger agreement proposal all shares of Tammcorp common stock and Class A preferred stock of which he is the record or beneficial owner as of the date of the voting agreement and (2)(ii) subject to limited exceptions, not to sell or otherwise dispose of any of these shares of TammcorpSM Bancshares common stock or Class A preferred stockbeneficially owned as of the date of such voting agreement until after the approval of the merger agreement by the shareholders of Tammcorp.SM Bancshares. For additional information regarding the voting agreement, see "The Merger Agreement—Voting Agreement."
To approve the merger agreement proposal, two-thirds of the shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock entitled to vote thereon (voting together as a single class) must be voted in favor of such proposal. The adjournment proposal will be approved if the votes cast by holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock in favor of such proposal exceed the votes cast in opposition to such proposal. If you mark "ABSTAIN" on your proxy, or fail to submit a proxy and fail to vote in person at the special meeting, it will have the same effect as a vote "AGAINST" the merger agreement proposal. If you mark "ABSTAIN" on your proxy, or fail to submit a proxy and fail to vote in person at the special meeting, it will have no effect on the adjournment proposal.
Tammcorp'sSM Bancshares' Board of Directors Unanimously Recommends that TammcorpSM Bancshares Shareholders Vote "FOR" the Approval of the Merger Agreement Proposal and the Adjournment Proposal (page _____)27).
After careful consideration, Tammcorp'sSM Bancshares' board of directors has determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger,mergers, are advisable and in the best interests of TammcorpSM Bancshares and its common and Class A preferred shareholders and has unanimously approved the merger agreement. Tammcorp'sSM Bancshares' board of directors unanimously recommends that holders of TammcorpSM Bancshares common stock and Class A preferred stock vote "FOR" the approval of the merger agreement proposal and "FOR" approval of the adjournment proposal. For the factors considered by Tammcorp'sSM Bancshares' board of directors in reaching its decision to approve the merger agreement, see "The Merger—Tammcorp'sSM Bancshares' Reasons for the Merger; Recommendation of Tammcorp'sSM Bancshares' Board of Directors."
Opinion of Tammcorp's Financial Advisor (page _____ and Appendix C)
In connection with its consideration of the merger agreement, on January 11, 2017, the Tammcorp board of directors received financial advice and presentations regarding the financial aspects of the merger from Sheshunoff & Co. (which we refer to as "Sheshunoff"), and received Sheshunoff's oral opinion, which opinion was confirmed by delivery of a written opinion, dated January 11, 2017, to the effect that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in its opinion, the merger consideration was fair, from a financial point of view, to the holders of Tammcorp common and Class A preferred stock. The full text of Sheshunoff's written opinion is attached as Appendix C to this proxy statement/prospectus. You should read the opinion in its entirety for a discussion of, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Sheshunoff in rendering its opinion. This written opinion is addressed to the Tammcorp board of directors, is directed only to the merger consideration and does not constitute a recommendation to any Tammcorp shareholder as to how such shareholder should vote with respect to the merger proposal or any other matter.
Material U.S. Federal Income Tax Consequences of the Merger (page _____)47)
The merger ismergers taken as a whole are intended to qualify as aone or more tax-deferred "reorganization""reorganizations" within the meaning of Section 368(a) of the Code. Assuming the merger qualifiesmergers qualify as a reorganization, a U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock generally will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Southern MissouriBancorp common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock in the merger exceeds such U.S. holder's adjusted tax basis in its TammcorpSM Bancshares common stock or Class A preferred stock surrendered and (ii) the amount of cash received by such U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock (in each case excluding(excluding any cash received in lieu of fractional shares of Southern MissouriBancorp common stock, with the gain or loss on such fractional share determined separately, as discussed under "Material U.S. Federal Income Tax Consequences of the Merger—Receipt of Cash in Lieu of a Fractional Share of Southern MissouriBancorp Stock"). Gain or loss is determined separately with respect to each block or class of TammcorpSM Bancshares common stock, and a loss realized on one block or class of shares may not be used to offset a gain realized on another block or class of shares in the merger.
It is a condition to the completion of the merger that Southern MissouriBancorp and TammcorpSM Bancshares each receive written opinions from their respective legal counseltax advisor a written opinion to the effect that the mergermergers taken as a whole will qualify as a reorganization within the meaning of Section 368(a) of the Code.
For further information, see "Material U.S. Federal Income Tax Consequences of the Merger."
The U.S. federal income tax consequences described above may not apply to all holders of TammcorpSM Bancshares common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your independent tax advisor for a full understanding of the particular tax consequences of the merger to you.
Holders of TammcorpSM Bancshares Common Stock and Class A Preferred Stock Have Dissenters' Rights in Connection with the Merger (page _____)32)
Under the IBCA,MGBCL, any holder of TammcorpSM Bancshares common stock or Class A preferred stock can dissent from the merger and elect to have the estimated fair value of his or her shares paid in cash instead of receiving the merger consideration under the merger agreement.
To assert dissenters' rights, a holder of such shares must satisfy the following conditions:
· | deliver a written demand for paymentobjection to Tammcorpthe merger to SM Bancshares before the vote on the merger agreement; andagreement proposal; |
· | not vote in favor of the merger agreement.agreement proposal. The return of a signed proxy which does not specify a vote against the merger agreement proposal or a direction to abstain will constitute a waiver of the shareholder's right to dissent.dissent; and |
· | within 20 days following the effective date of the merger, file a written demand for payment with Bancorp and state in the written demand the number of shares of SM Bancshares common stock owned by such shareholder. |
A copy of the relevant sections of the IBCAMGBCL governing this process is attached to this proxy statement/prospectus as Appendix B.
The exercise of dissenters' rights by holders of TammcorpSM Bancshares common stock or Class A preferred stock will result in the recognition of gain or loss, as the case may be, for federal income tax purposes.
Tammcorp'sSM Bancshares' Executive Officers and Directors Have Interests in the Merger that Differ from Your Interests (page _____)31)
TammcorpSM Bancshares shareholders should be aware that Tammcorp'sSM Bancshares' directors and executive officers have interests in the merger and arrangements that are different from, or in addition to, those of TammcorpSM Bancshares shareholders generally. Tammcorp'sSM Bancshares' board of directors was aware of these interests and considered these
interests, among other matters, when making its decision to approve the merger agreement, and in recommending that TammcorpSM Bancshares shareholders vote in favor of approving the merger agreement.
These interests include the following:
· | Certain executive officers of TammcorpSM Bancshares may be eligible for severance benefits following the closing of the merger pursuant to the merger agreement and related documents, a portion of which will effectively be paid out of the merger consideration. |
· | John R. Abercrombie, President and Chief Executive Officer of Tammcorp, is expected to become a director of Southern Missouri and Southern Bank following the merger. |
· | Certain executive officers of Capaha Bank may be eligible to receive a retention bonus out of a pool, not to exceed in the aggregate $500,000, for the purpose of retaining such employees prior to and after closing the merger.documents. |
· | Continued indemnification and liability insurance coverage following the merger for Tammcorp'sSM Bancshares' directors and officers. |
For a more complete description of these interests, see "The Merger—Interests of Tammcorp'sSM Bancshares' Directors and Executive Officers in the Merger."
Regulatory Approvals
Each of Southern MissouriBancorp and TammcorpSM Bancshares has agreed to cooperate with the other and use commercially reasonable best efforts to obtain all regulatory approvals required to complete the transactions contemplated by the merger agreement, including the merger, the holding company merger and the bank merger. These include approvals from the Board of Governors of the Federal Reserve System, which we refer to as the Federal Reserve Board, and the Missouri Division of Finance, which we refer to as the Missouri Division, and the Illinois Department of Financial and Professional Regulation, which we refer to as the Illinois Department.Division. The U.S. Department of Justice may also review the impact of the merger and the bank mergermergers on competition.
As of the date of this proxy statement/prospectus, all applications and notices necessary to obtain all required regulatory approvals have been filed. There can be no assurance as to whether all required regulatory approvals will be obtained or the dates of the approvals. There also can be no assurance that the regulatory approvals received will not contain a condition or requirement that results in a failure to satisfy the conditions to closing set forth in the merger agreement. See "The Merger Agreement—Conditions to Complete the Merger."
Conditions that Must be Satisfied or Waived for the Merger to Occur (page _____)44)
As more fully described in this proxy statement/prospectus and in the merger agreement, the completion of the merger is subject to a number of conditions being satisfied or, where legally permitted, waived. These conditions include:
· | approval of the merger agreement by Tammcorp'sSM Bancshares' shareholders; |
· | the filing by Southern MissouriBancorp with NASDAQ of a notification form for the listing of the shares of Southern MissouriBancorp common stock to be issued in the merger, and the non-objection by NASDAQ to such listing; |
· | the receipt of all required regulatory approvals without the imposition of any unduly burdensome condition upon Southern Missouri;Bancorp; |
· | the effectiveness of the registration statement on Form S-4 of which this proxy statement/prospectus is a part; |
· | the absence of any order, injunction, decree or law, rule or regulation preventing or making illegal the completion of the merger or the bank merger; |
· | subject to the standards set forth in the closing conditions in the merger agreement, the accuracy of the representations and warranties of Southern MissouriBancorp and TammcorpSM Bancshares on the date of the merger agreement and the closing date of the merger; |
· | performance in all material respects by each of Southern MissouriBancorp and TammcorpSM Bancshares of its obligations under the merger agreement, including Tammcorp's consummation of the offer to the minority shareholders of Capaha Bank to exchange each of their shares of Capaha Bank common stock for shares of Tammcorp common stock immediately prior to the merger, with at least 80% of the Capaha minority shareholders participating in the exchange; agreement; |
· | receipt by TammcorpSM Bancshares of certain third party consents to the merger; |
· | the number of shares of TammcorpSM Bancshares common stock and Class A preferred stock the holders of which have perfected dissenters' rights under IllinoisMissouri law shall be less than 5.0% of the total number of outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock; and |
· | receipt by each of Southern MissouriBancorp and TammcorpSM Bancshares of ana written opinion from its legal counseltheir respective tax advisor as to certain U.S. federal income tax matters. |
We expect to complete the merger in the secondfirst quarter of 2017.2018. No assurance can be given, however, as to when or if the conditions to the merger will be satisfied or waived, or that the merger will be completed.
Non-Solicitation (page _____)43)
TammcorpSM Bancshares has agreed that it generally will not solicit or encourage any inquiries or proposals regarding other acquisition proposals by third parties. TammcorpSM Bancshares may respond to an unsolicited proposal if the board of directors of TammcorpSM Bancshares determines in good faith that the proposal constitutes or is reasonably likely to result in a transaction that is more favorable from a financial point of view to Tammcorp'sSM Bancshares' shareholders than the merger and that the board's failure to respond would result in a violation of its fiduciary duties. TammcorpSM Bancshares must promptly notify Southern MissouriBancorp if it receives any other acquisition proposals.
Termination of the Merger Agreement (page _____)45)
The merger agreement can be terminated at any time prior to completion of the merger in the following circumstances:
· | by mutual written consent of Southern MissouriBancorp and Tammcorp;SM Bancshares; |
· | by either Southern MissouriBancorp or TammcorpSM Bancshares if any governmental entity that must grant a required regulatory approval has denied approval of the merger or bank merger and such denial has become final and non-appealable or any governmental entity of competent jurisdiction has issued a final non-appealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the merger or bank merger, unless the failure to obtain a required regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement; |
· | by either Southern MissouriBancorp or TammcorpSM Bancshares if the merger has not been completed on or before JulyMarch 31, 2017,2018, unless the failure of the merger to be completed by that date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement; |
· | by either Southern MissouriBancorp or TammcorpSM Bancshares (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement) if there is a breach of any of the covenants or agreements or any of the representations or warranties set forth in the merger agreement on the part of the other party which either individually or in the aggregate would result in, if occurring or continuing on the date the merger is completed, |
| completed; the failure of any closing condition of the terminating party and which is not cured within 20 days following written notice to the party committing such breach or by its nature or timing cannot be cured during such period; |
· | by Southern Missouri,Bancorp, if the board of directors of TammcorpSM Bancshares fails to recommend in this proxy statement/prospectus that its shareholders approve the TammcorpSM Bancshares merger proposal, or the TammcorpSM Bancshares board of directors withdraws, modifies or makes or causes to be made any third party or public communication announcing an intention to modify or withdraw such recommendation in a manner adverse to Southern Missouri,Bancorp, or TammcorpSM Bancshares materially breaches any of its obligations relating to third-party acquisition proposals; |
· | by either Southern MissouriBancorp or Tammcorp,SM Bancshares, if the immediately above circumstances are not applicable and TammcorpSM Bancshares does not obtain shareholder approval of the merger agreement at the special meeting; or |
· | by TammcorpSM Bancshares prior to TammcorpSM Bancshares obtaining shareholder approval of the merger agreement in order to enter into an agreement with a third party with respect to an unsolicited superior acquisition proposal. An "acquisition proposal" means a tender or exchange offer, proposal for a merger, consolidation or other business combination involving TammcorpSM Bancshares or Capaha BankSMB or any proposal or offer to acquire in any manner more than 24.99% of the voting power in, or more than 24.99% of the fair market value of the business, assets or deposits of, TammcorpSM Bancshares or Capaha Bank.SMB. A "superior acquisition proposal" means a written acquisition proposal that the TammcorpSM Bancshares board of directors concludes in good faith to be more favorable from a financial point of view to its shareholders than the merger (after receiving the advice of its financial advisors, after taking into account the likelihood of consummation of such proposal on its terms, and after taking into account all legal, financial, regulatory and other aspects of such proposal), except that for purposes of the term "superior acquisition proposal," references to "more than 24.99%" in the definition of "acquisition proposal" are replaced with references to "a majority." |
Termination Fee (page _____)46)
Set forth below are the termination events that would result in TammcorpSM Bancshares being obligated to pay Southern MissouriBancorp a $1.0 million$450,000 termination fee:
· | a termination by Southern MissouriBancorp based on (i) the board of directors of TammcorpSM Bancshares either failing to continue its recommendation that the TammcorpSM Bancshares shareholders approve the TammcorpSM Bancshares merger proposal or adversely changing such recommendation or (ii) TammcorpSM Bancshares materially breaching the provisions of the merger agreement relating to third party acquisition proposals; |
· | a termination by TammcorpSM Bancshares prior to it obtaining shareholder approval of the merger agreement in order to enter into an agreement with a third party with respect to an unsolicited superior acquisition proposal; or |
· | a termination by either Southern MissouriBancorp or TammcorpSM Bancshares as a result of the failure of Tammcorp'sSM Bancshares' shareholders to approve the merger agreement if prior to such termination there is publicly announced another acquisition proposal and within one yearnine months of termination TammcorpSM Bancshares or Capaha BankSMB enters into a definitive agreement for or consummates an acquisition proposal (as defined above, except that references to "more than 24.99%" in the definition of "acquisition proposal" are replaced with references to "a majority"). |
In the event Southern MissouriBancorp terminates the merger agreement as a result of a willful and material breach by TammcorpSM Bancshares of the provisions of the merger agreement relating to third party acquisition proposals, Southern MissouriBancorp is not required to accept the termination fee from TammcorpSM Bancshares and may pursue alternate relief against Tammcorp.
SM Bancshares.
The Rights of TammcorpSM Bancshares Shareholders Will Change as a Result of the Merger (page 56_____))
The rights of holders of TammcorpSM Bancshares common stock and Class A preferred stock will change as a result of the merger due to differences in applicable state lawsBancorp's and in Southern Missouri's and Tammcorp'sSM Bancshares' governing documents. The rights of holders of TammcorpSM Bancshares common stock and Class A preferred stock are governed by IllinoisMissouri law and Tammcorp'sSM Bancshares' articles of incorporation and bylaws as amended to date, and those of Southern Missouri'sBancorp's shareholders are governed by Missouri law and by Southern Missouri'sBancorp's articles of incorporation and bylaws as amended to date. Upon completion of the merger, holders of TammcorpSM Bancshares common stock and Class A preferred stock will become shareholders of Southern Missouri,Bancorp, as the continuing legal entity in the merger, and their rights will be governed by Missouri law and by Southern Missouri'sBancorp's articles of incorporation and bylaws.
See "Comparison of Shareholder Rights" for a description of the material differences in shareholder rights under each of the Southern MissouriBancorp and TammcorpSM Bancshares governing documents.
Information About the Companies (pages _____ and _____)(page 52)
Southern Missouri Bancorp, Inc.
Southern Missouri,Bancorp, headquartered in Poplar Bluff, Missouri, is the holding company for Southern Bank. Southern Bank, founded in 1887, is a Missouri-chartered trust company with banking powers, providing products and services to the communities it serves through its headquarters, 3237 full-service branch offices and three limited-service branch offices. As of December 31, 2016, Southern MissouriSeptember 30, 2017, Bancorp had assets of $1.5$1.8 billion, deposits of $1.21.5 billion, and stockholders' equity of $130.4177.0 million.
Southern MissouriBancorp regularly evaluates opportunities to expand through acquisitions and conducts due diligence activities in connection with such opportunities. As a result, acquisition discussions and, in some cases, negotiations may take place at any time, and acquisitions involving cash or our debt or equity securities may occur.
Southern Missouri'sBancorp's principal office is located at 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, and its telephone number is (573) 778-1800. Southern Missouri'sBancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC."
Additional information about Southern MissouriBancorp and its subsidiaries is contained under "Information About Southern Missouri"Missouri Bancorp" and is included in documents incorporated by reference in this proxy statement/prospectus. See "Where You Can Find More Information."
TammcorpSouthern Missouri Bancshares, Inc.
Tammcorp, Inc.,SM Bancshares, headquartered in MarshfieldTamms, Illinois,, Missouri, was formed as an Illinois corporation in 1980 foris the purpose of becoming a holding company for Capaha Bank, an IllinoisSMB, a Missouri state savingschartered bank. TammcorpSMB was chartered as a Missouri state bank in 1997 and operates two locations in Marshfield, Missouri. SM Bancshares does not, as an entity, engage in separate business activities of a material nature apart from the activities it performs for Capaha Bank.SMB. Its primary activities are to provide assistance in the management and coordination of Capaha Bank'sSMB's financial resources. TammcorpSM Bancshares has no significant assets other than 91%100% of the outstanding shares of common stock of Capaha Bank. TammcorpSMB. SM Bancshares derives its revenues primarily from the operations of Capaha BankSMB in the form of dividends received from Capaha Bank.
Capaha Bank was chartered as an Illinois state savings bank in 1955. The main office of Capaha Bank is located in Tamms, Illinois. Capaha Bank operates five branch offices, with a branch located in each of Alexander and Union Counties in Illinois, and with three branches located in Cape Girardeau County, Missouri.SMB. As of December 31, 2016, TammcorpSeptember 30, 2017, SM Bancshares had, on a consolidated basis, total assets of approximately $198.5$90.0 million, total deposits of approximately $176.9 million, total loans (net of allowance for loan losses) of approximately $157.0$72.6 million, and total shareholders'stockholders' equity of approximately $16.6 million.$11.0 million.
Tammcorp'sSM Bancshares' principal office is located at One South Main1292 Banning Street, Cape Girardeau, Missouri 63703,Marshfield, MO 65706, and its telephone number is (573) 331-7100(417) 859-1292. Tammcorp'sSM Bancshares' common stock is not listed or traded on any established securities exchange or quotation system.
For additional information about TammcorpSM Bancshares see "Information About Tammcorp.Southern Missouri Bancshares."
TammcorpSM Bancshares Shareholders Should Wait to Surrender Their Stock Certificates Until After the Merger
To receive your merger consideration, you will need to surrender your TammcorpSM Bancshares common stock certificates. If the merger is completed, the exchange agent appointed by Southern MissouriBancorp will send you written instructions for exchanging your stock certificates. The exchange agent will be Computershare, Southern Missouri'sBancorp's stock transfer agent, or an unrelated bank or trust company reasonably acceptable to Tammcorp.SM Bancshares.
Please do not send in your stock certificates until you receive these instructions.
Risk Factors (page _____)13)
You should consider all the information contained in or incorporated by reference into this proxy statement/prospectus in deciding how to vote on the proposals presented in this proxy statement/prospectus. In particular, you should consider the factors under "Risk Factors."
In addition to general investment risks and the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the section "Cautionary Statement Regarding Forward-Looking Statements," you should carefully consider the following risk factors in deciding how to vote for the proposals presented in this proxy statement/prospectus. You should also read and consider the risks associated with the business of Southern MissouriBancorp because these risks will relate to the combined company. Descriptions of some of these risks can be found in Southern Missouri'sBancorp's Annual Report on Form 10-K for the fiscal year ended June 30, 20162017 filed with the SEC and other reports filed by Southern MissouriBancorp with the SEC and incorporated by reference into this proxy statement/prospectus. See "Where You Can Find More Information."
HoldersThe aggregate merger consideration to be paid to the holders of TammcorpSM Bancshares common stock and Class A preferred stock cannot be certainwill depend on a number of the market value of the stock portion of the merger consideration they will receive.factors.
If the merger is completed, holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times Tammcorp'sSM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, adjusted for certain of Tammcorp'sSM Bancshares' transaction expenses, minus (2) $162,000, which represents the amount to be paid by Southern Missouri pursuant to a non-competition agreement with an executive officer of Tammcorp that will become effective upon completionexcess, if any, of the merger.cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000. As of March 31,September 30, 2017, Tammcorp'sSM Bancshares' consolidated equity capital, as adjusted for its estimated transaction expenses,pursuant to the merger agreement, was $16.1$10.9 million. Based on this amount, if the merger were completed in AprilOctober 2017, the aggregate merger consideration would be $22.4$15.3 million (($16.1($10.9 million x 1.4) – $162,000). One-halfTwenty-five percent (25%) of the merger consideration will be paid in cash and one-halfseventy-five percent (75%) will be paid in shares of Southern MissouriBancorp common stock.
The per share cashaggregate merger consideration to be paid to the holders of SM Bancshares common stock will be equal to 50%depend on a number of factors, including SM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, the total amount of SM Bancshares' transaction expenses and the final cost of contract termination charges of SM Bancshares triggered as a result of the merger. In the event that SM Bancshares' consolidated equity capital decreases between now and the effective date of the merger, or estimated transaction expenses and/or contract termination costs are higher than estimated, the aggregate merger consideration divided by the sumpayable to holders of (1) the number of shares of TammcorpSM Bancshares common stock issuedwill decrease. Conversely, if SM Bancshares' consolidated equity capital increases between now and outstanding immediately prior tothe effective date of the merger, assuming all minority shareholdersor estimated transaction expenses are less than estimated, the aggregate merger consideration payable to holders of Capaha Bank agree to exchange their shares of Capaha BankSM Bancshares common stock for shareswill increase. Accordingly, SM Bancshares shareholders will not know at the time of Tammcorp common stock immediately prior to the special meeting the exact amount of merger and (2)consideration they will receive upon completion of the aggregate number of shares of Tammcorp common stock into which shares of Tammcorp Class A preferred stock are convertible. The per share stock consideration will be a number of shares of Southern Missouri common stock equal to the per share cash consideration divided by the average Southern Missouri common stock price.merger.
The number of shares of Southern Missouri common stock issuable as the per share stock consideration will fluctuate withBecause the market price of Southern MissouriBancorp common stock and will notfluctuate, holders of SM Bancshares common stock cannot be known atcertain prior to the time Tammcorp shareholders vote oncompletion of the merger agreement. On January 11, 2017,of the market value of the stock portion of the merger consideration they will receive.
The market value of the stock portion of the merger consideration to be paid to the holders of SM Bancshares common stock will vary from the closing price of Southern MissouriBancorp common stock immediately prior toon the public announcement ofdate Bancorp and SM Bancshares announced the merger, agreement was $33.76, and on ___________________, 2017, the most recent trading day practicable before the printing ofdate that this proxy statement/prospectus the closing price of Southern Missouri common stock was $_____. You should obtain current stock price quotations for Southern Missouri common stock. Southern Missouri common stock is listedmailed to SM Bancshares shareholders, on the NASDAQ Global Market underdate of the symbol "SMBC." Neither Tammcorp common stock nor Tammcorp Class A preferred stockSM Bancshares special meeting and on the date the merger is listed or traded oncompleted and thereafter. However, there will not be any established securities exchange or quotation system.
Assuming the aggregate merger consideration is $22.4 million and that all minority shareholders of Capaha Bank agree to exchange their shares of Capaha Bank common stock for shares of Tammcorp common stock immediately prioradjustment to the merger based onconsideration for changes in the numbermarket price of shares of TammcorpBancorp common stock and Tammcorp Class A preferred stock currently outstanding the per share cash consideration would be $1,634.34. In this case, if the average Southern Missouri common stock price were $33.76, the per share stock consideration would consist of 48.4105 shares of Southern Missouri common stock, and if the average Southern Missouri common stock price were $____, the per share stock consideration would consist of ___ shares of Southern Missouri common stock.
Stock price changes may result from a variety of factors, thatmany of which are beyond the control of Southern MissouriBancorp and Tammcorp,SM Bancshares including, but not limited to, general market and economic conditions, changes in our respective businesses, operations and prospects and regulatory considerations. Therefore, you will not know at the time of the special meeting the precise market value of the stock portion of the merger consideration you will receive upon completion of the merger. TammcorpSM Bancshares is not generally permitted to terminate the merger agreement or re-solicit the
vote of TammcorpSM Bancshares shareholders solely because of changes in the market prices of Southern Missouri'sBancorp's common stock. You shouldWe urge you to obtain current market quotations for shares of Southern MissouriBancorp common stock.stock (NASDAQ: trading symbol "SMBC"). There are no current market quotations for SM Bancshares common stock because SM Bancshares is a privately owned corporation and its common stock is not traded on any established public trading market.
The market price of Southern MissouriBancorp common stock after the merger may be affected by factors different from those currently affecting the value of TammcorpSM Bancshares common stock.
Upon completion of the merger, holders of TammcorpSM Bancshares common stock and Class A preferred stock will become holders of Southern MissouriBancorp common stock. Southern Missouri'sBancorp's business differs in important respects from that of Tammcorp,SM Bancshares, and, accordingly, the results of operations of Southern MissouriBancorp and the market price of Southern MissouriBancorp common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of Tammcorp.SM Bancshares.
Tammcorp'sSM Bancshares' shareholders will have less influence as shareholders of Southern MissouriBancorp than as shareholders of Tammcorp.SM Bancshares.
Holders of TammcorpSM Bancshares common stock [and Class A preferred stock] currently have the right to vote in the election of the board of directors of TammcorpSM Bancshares and on other matters affecting Tammcorp.SM Bancshares. Immediately following the merger, it is expected that the current shareholders of TammcorpSM Bancshares as a group will hold an ownership interest of approximately 4.0%4.0% of the then outstanding Southern MissouriBancorp common stock. When the merger occurs, each holder of TammcorpSM Bancshares common stock and Class A preferred stock will become a shareholder of Southern MissouriBancorp with a percentage ownership of the combined organization much smaller than such shareholder's percentage ownership of Tammcorp.SM Bancshares. Because of this, Tammcorp'sSM Bancshares' shareholders will have less influence on the management and policies of Southern MissouriBancorp than they now have on the management and policies of Tammcorp.
The shares of Southern Missouri common stock to be received by holders of Tammcorp common stock and Class A preferred stock for the stock portion of the merger consideration will have rights different from the shares of Tammcorp common stock and Class A preferred stock.
Upon completion of the merger, holders of Tammcorp common stock and Class A preferred stock will become Southern Missouri shareholders and their rights as Southern Missouri shareholders will be governed by Missouri law and by Southern Missouri's articles of incorporation and bylaws. The rights associated with Tammcorp common stock and Tammcorp Class A preferred stock, which are governed by Illinois law and Tammcorp's articles of incorporation and bylaws, are different from the rights associated with Southern Missouri common stock. See "Comparison of Shareholder Rights" for a discussion of the different rights associated with Southern Missouri common stock.
SM Bancshares.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on Southern MissouriBancorp following the merger.
Before the merger and the bank merger may be completed, Southern MissouriBancorp and TammcorpSM Bancshares must obtain approvals from the Federal Reserve Board and the Missouri Division and the Illinois Department.Division. Other approvals, waivers or consents from regulators may also be required. An adverse development in either party's regulatory standing or other factors could result in an inability to obtain regulatory approvals or delay their receipt. Regulators may also impose conditions on the completion of the merger or the bank merger or require changes to the terms of the merger or the bank merger. While Southern MissouriBancorp and TammcorpSM Bancshares do not currently expect that any such conditions or changes will be imposed or required, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs on or limiting the revenues of Southern MissouriBancorp following the merger, any of which might have an adverse effect on Southern MissouriBancorp following the merger. Southern MissouriBancorp is not obligated to complete the merger if the regulatory approvals received in connection with the completion of the merger impose any unduly burdensome condition upon Southern Missouri.Bancorp. See "The Merger—Regulatory Approvals."
Combining the two companies may be more difficult, costly or time consuming than expected, and the anticipated benefits and cost savings of the merger may not be realized.
Southern Missouri and Tammcorp have operated independently and, until the completion of the merger, will continue to operate independently. The success of the merger, including anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine the businesses of Southern MissouriBancorp and Tammcorp.SM Bancshares. To realize these anticipated benefits and cost savings, after the completion of the merger, Southern MissouriBancorp expects to integrate Tammcorp'sSM Bancshares' business into its own. It is possible that the integration process could result in the loss of key employees, the disruption of each company's ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect Southern Missouri'sBancorp's ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. If Southern MissouriBancorp experiences difficulties with the integration process, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause Southern MissouriBancorp and/or TammcorpSM Bancshares to lose customers or cause customers to remove their accounts from Southern MissouriBancorp and/or TammcorpSM Bancshares and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of TammcorpSM Bancshares and Southern MissouriBancorp during this transition period and on Southern MissouriBancorp for an undetermined period after completion of the merger. In addition, the actual cost savings of the merger could be less than anticipated.
The fairness opinion obtained by Tammcorp's board of directors from its financial advisor will not reflect changes in circumstances between signing the merger agreement and completion of the merger.
Tammcorp's board of directors has not obtained an updated opinion as of the date of this proxy statement/prospectus from Sheshunoff, Tammcorp's financial advisor. Changes in the operations and prospects of Southern Missouri or Tammcorp, general market and economic conditions and other factors which may be beyond the control of Southern Missouri and Tammcorp, and on which Sheshunoff's fairness opinion was based, may alter the value of Southern Missouri or Tammcorp or their respective stocks by the time the merger is completed. Sheshunoff's opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion. Because Tammcorp currently does not anticipate asking its financial advisor to update its opinion, the opinion does not address the fairness of the merger consideration, from a financial point of view, at the time the merger is completed. For a description of the opinion that Tammcorp's board of directors received from its financial advisor, please refer to "The Merger—Opinion of Sheshunoff & Co. –Financial Advisor to Tammcorp." For a description of the other factors considered by the boards of directors of Southern Missouri and Tammcorp in determining to approve the merger agreement, please refer to "The Merger—Southern Missouri's Reasons for the Merger" and "The Merger—Tammcorp's Reasons for the Merger; Recommendation of Tammcorp's Board of Directors."
Tammcorp's
SM Bancshares' directors and executive officers have interests in the merger that may differ from the interests of Tammcorp'sSM Bancshares' shareholders.
Tammcorp'sSM Bancshares' shareholders should be aware that Tammcorp'sSM Bancshares' directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of Tammcorp'sSM Bancshares' shareholders generally. These interests and arrangements may create potential conflicts of interest. Tammcorp'sSM Bancshares' board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that Tammcorp'sSM Bancshares' shareholders vote in favor of approving the merger agreement.
These interests include continued indemnification and liability insurance coverage following the following:
· | Certain executive officers of Tammcorp may be eligible for severance benefits following the closing of the merger pursuant to the merger agreement and related documents, a portion of which will effectively be paid out of the merger consideration.
|
· | John R. Abercrombie, President and Chief Executive Officer of Tammcorp, is expected to become a director of Southern Missouri and Southern Bank following the merger. |
· | Certain executive officers of Capaha Bank may be eligible to receive a retention bonus out of a pool, not to exceed in the aggregate $500,000, for the purpose of retaining such employees prior to and after closing the merger. |
· | Continued indemnification and liability insurance coverage following the merger for Tammcorp'smerger for SM Bancshares' directors and officers. |
For a more complete description of these interests, see "The Merger—Interests of Tammcorp'sSM Bancshares' Directors and Executive Officers in the Merger."
The merger agreement limits Tammcorp'sSM Bancshares' ability to pursue alternative acquisition proposals and requires TammcorpSM Bancshares to pay a termination fee of $1.0 million$450,000 under certain circumstances, including circumstances relating to alternative acquisition proposals.
The merger agreement generally prohibits TammcorpSM Bancshares from initiating, soliciting, encouraging or knowingly facilitating certain third-party acquisition proposals. See "The Merger Agreement—Agreement Not to Solicit Other Offers." The merger agreement also provides that TammcorpSM Bancshares must pay Southern MissouriBancorp a termination fee of $1.0 million$450,000 if the merger agreement is terminated under certain circumstances, including Tammcorp'sSM Bancshares' failure to abide by its obligations under the merger agreement not to solicit alternative acquisition proposals. See "The Merger Agreement—Termination Fee." These provisions might discourage a potential competing acquirer from considering or proposing an acquisition of all or a significant part of TammcorpSM Bancshares or Capaha BankSMB at a greater value to Tammcorp'sSM Bancshares' shareholders than Southern MissouriBancorp has offered in the merger. The payment of the termination fee could also have an adverse effect on Tammcorp'sSM Bancshares' financial condition.
Termination of the merger agreement could negatively impact TammcorpSM Bancshares regardless of whether the $1.0 million$450,000 termination fee is payable.
If the merger agreement is terminated, there may be various negative consequences for TammcorpSM Bancshares regardless of whether the $1.0 million$450,000 termination fee is payable. For example, Tammcorp'sSM Bancshares' business may be impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the value of Tammcorp'sSM Bancshares' common stock or Class A preferred stock could decline to the extent current values reflect an assumption that the merger will be completed.
TammcorpSM Bancshares will be subject to business uncertainties and contractual restrictions while the merger is pending.
Southern MissouriBancorp and TammcorpSM Bancshares have operated independently and, until the completion of the merger, will continue to operate independently. Uncertainty about the effect of the merger on employees and customers may have an adverse effect on TammcorpSM Bancshares and consequently on Southern Missouri.Bancorp. These uncertainties may impair Tammcorp'sSM Bancshares' ability to attract, retain or motivate key personnel until the merger is consummated, and could cause customers and others that deal with TammcorpSM Bancshares to seek to change existing business relationships with Tammcorp.SM Bancshares. Retention of certain employees may be challenging during the pendency of the merger even with the ability of Tammcorp to provide retention bonuses to some employees, as certain employees may experience uncertainty about their future roles with Southern Missouri.Bancorp. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Southern Missouri, Southern Missouri'sBancorp, Bancorp's business following the merger could be harmed. In addition, the merger agreement restricts TammcorpSM Bancshares from making certain acquisitions and taking other specified actions until the merger occurs without the consent of Southern Missouri.Bancorp. These restrictions may prevent TammcorpSM Bancshares from pursuing attractive business opportunities that may arise prior to the completion of the merger. See "The Merger Agreement—Covenants and Agreements-Conduct of Businesses Prior to the Completion of the Merger."
If the merger is not completed, TammcorpSM Bancshares will have incurred substantial expenses without realizing the expected benefits of the merger.
The merger is subject to certain closing conditions, including the receipt of regulatory approvals, the approval of the merger agreement by Tammcorp'sSM Bancshares' shareholders, the consummation of the exchange by Tammcorp of shares of its common stock for at least 80% of the shares of the common stock of Capaha Bank held by the minority shareholders of Capaha Bank, as well as other conditions, some of which are beyond Southern Missouri'sBancorp's and Tammcorp'sSM Bancshares' control. Neither Southern MissouriBancorp nor TammcorpSM Bancshares can predict when or whether these conditions will be satisfied. TammcorpSM Bancshares has incurred or will incur substantial expenses in connection with due diligence surrounding and the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of preparing, printing and mailing this proxy statement/prospectus.agreement. If the merger is not completed, TammcorpSM Bancshares would have to recognize these expenses without realizing the expected benefits of the merger.
The dissenters' rights appraisal process is uncertain.
TammcorpSM Bancshares shareholders may or may not be entitled to receive more than the amount provided for in the merger agreement for their shares of
TammcorpSM Bancshares common
stock and Class A preferred stock if they elect to exercise their right to dissent from the proposed merger, depending on the appraisal of the fair value of the
TammcorpSM Bancshares common
stock and Class A preferred stock pursuant to the dissenting shareholder procedures under the
IBCA.MGBCL. See "The Merger—Dissenters' Rights of
TammcorpSM Bancshares Shareholders" beginning on page
_____32 and
Appendix B to this proxy statement/prospectus. For this reason, the amount of cash that you might be entitled to receive should you elect to exercise your right to dissent from the merger may be more or less than the value of the merger consideration to be paid pursuant to the merger agreement. In addition, it is a condition to
Southern Missouri'sBancorp's obligation to complete the merger that the holders of not more than 5% of the outstanding shares of
TammcorpSM Bancshares common
stock and Class A preferred stock exercise dissenters' rights. The number of shares of
TammcorpSM Bancshares common
stock and Class A preferred stock as to which dissenters' rights will be exercised under the
IBCAMGBCL is not known and, therefore, there is no assurance that this closing condition will be satisfied.
Risk factors relating to Southern MissouriBancorp and Southern Missouri'sits business.
Southern MissouriBancorp is, and will continue to be, subject to the risks described in Southern Missouri'sBancorp's Annual Report on Form 10-K for the fiscal year ended June 30, 2016,2017, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this proxy statement/prospectus. See "Where You Can Find More Information" on page _____.63.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus contains or incorporates by reference a number of forward-looking statements regarding the financial condition, results of operations, earnings outlook and business prospects of Southern Missouri, TammcorpBancorp, SM Bancshares and the potential combined company and may include statements for the period following the completion of the merger. You can find many of these statements by looking for words such as "expects," "projects," "anticipates," "believes," "intends," "estimates," "strategy," "plan," "potential," "possible" and other similar expressions. Statements about the expected timing, completion and effects of the merger and all other statements in this proxy statement/prospectus or in the documents incorporated by reference in this proxy statement/prospectus other than historical facts constitute forward-looking statements.
Forward-looking statements involve certain risks and uncertainties. The ability of either Southern MissouriBancorp or TammcorpSM Bancshares to predict results or actual effects of its plans and strategies, or those of the combined company, is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under "Risk Factors" and those discussed in the filings of Southern MissouriBancorp that are incorporated into this proxy statement/prospectus by reference, as well as the following:
· | the requisite regulatory approvals and the approval of Tammcorp'sSM Bancshares' shareholders for the merger might not be obtained the exchange transaction involving the minority shareholders of Capaha Bank might not be consummated, and other conditions to completion of the merger might not be satisfied or waived; |
· | expected cost savings, synergies and other benefits from Southern Missouri'sBancorp's merger and acquisition activities, including the merger with Tammcorp,SM Bancshares, might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; |
· | the strength of the United States economy in general and the strength of the local economies in which we conduct operations; |
· | fluctuations in interest rates and in real estate values; |
· | monetary and fiscal policies of the Federal Reserve Board and the U.S. Government and other governmental initiatives affecting the financial services industry; |
· | the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; |
· | the ability to access cost-effective funding; |
· | the timely development of and acceptance of new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; |
· | fluctuations in real-estate values and both residential and commercial real estate market conditions; |
· | demand for loans and deposits in the market areas of Southern MissouriBancorp and Tammcorp;SM Bancshares; |
· | legislative or regulatory changes; |
· | results of examinations of Southern MissouriBancorp and TammcorpSM Bancshares by their respective regulators, including the possibility that such regulators may, among other things, require an increase the reserve for loan losses or write-down of assets; |
· | the impact of technological changes; |
· | the successful management of the risks involved in the foregoing. |
Any forward-looking statements are based upon management's beliefs and assumptions at the time they are made.
For any forward-looking statements made in this proxy statement/prospectus or in any documents incorporated by reference into this proxy statement/prospectus, Southern MissouriBancorp and TammcorpSM Bancshares claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this proxy statement/prospectus or the date of the applicable document incorporated by reference in this proxy statement/prospectus. Southern MissouriBancorp and TammcorpSM Bancshares do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this proxy statement/prospectus and attributable to Southern Missouri, TammcorpBancorp, SM Bancshares or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this proxy statement/prospectus.
SELECTED HISTORICAL FINANCIAL AND COMPARATIVE
UNAUDITED PRO FORMA PER SHARE DATA
Selected Historical Financial Data of
Southern MissouriBancorpThe following tables set forth selected historical financial and other data of Southern MissouriBancorp for the periods and at the dates indicated. The information at June 30, 20162017 and 20152016 and for the fiscal years ended June 30, 2017, 2016 2015 and 20142015 is derived in part from and should be read together with the audited consolidated financial statements and notes thereto of Southern MissouriBancorp incorporated by reference into this proxy statement/prospectus from Southern Missouri'sBancorp's Annual Report on Form 10-K for the fiscal year ended June 30, 2016.2017. The information as of June 30, 2015, 2014 2013 and 20122013 and for the fiscal years ended June 30, 20132014 and 20122013 is derived in part from audited consolidated financial statements and notes thereto of Southern MissouriBancorp that are not incorporated by reference into or attached to this proxy statement/prospectus.
| | At December 31, | | | At June 30, | | | At September 30, | | | At June 30, | |
| | 2016 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | | 2017 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
| | (In thousands) | | | (In thousands) | |
Financial Condition Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 1,492,349 | | | $ | 1,403,910 | | | $ | 1,300,064 | | | $ | 1,021,422 | | | $ | 796,391 | | | $ | 739,189 | | | $ | 1,763,491 | | | $ | 1,707,712 | | | $ | 1,403,910 | | | $ | 1,300,064 | | | $ | 1,021,422 | | | $ | 796,391 | |
Loans receivable, net | | | 1,209,836 | | | | 1,135,453 | | | | 1,053,146 | | | | 801,056 | | | | 647,166 | | | | 583,465 | | | | 1,449,560 | | | | 1,397,730 | | | | 1,135,453 | | | | 1,053,146 | | | | 801,056 | | | | 647,166 | |
Mortgage-backed securities | | | 73,414 | | | | 71,231 | | | | 70,054 | | | | 58,151 | | | | 16,714 | | | | 19,253 | | | | 78,569 | | | | 78,275 | | | | 71,231 | | | | 70,054 | | | | 58,151 | | | | 16,714 | |
Cash, interest-bearing deposits | | | | | | | | | | | | | | | | | | | | | | | | | |
and investment securities | | | 89,567 | | | | 81,270 | | | | 78,258 | | | | 88,658 | | | | 77,059 | | | | 90,568 | | |
Cash, interest-bearing deposits and investment securities | | | | 94,961 | | | | 97,674 | | | | 81,270 | | | | 78,258 | | | | 88,658 | | | | 77,059 | |
Deposits | | | 1,211,816 | | | | 1,120,693 | | | | 1,055,242 | | | | 785,801 | | | | 632,379 | | | | 584,814 | | | | 1,471,690 | | | | 1,455,597 | | | | 1,120,693 | | | | 1,055,242 | | | | 785,801 | | | | 632,379 | |
Borrowings | | | 130,044 | | | | 137,301 | | | | 92,126 | | | | 111,033 | | | | 52,288 | | | | 50,142 | | | | 94,281 | | | | 56,849 | | | | 137,301 | | | | 92,126 | | | | 111,033 | | | | 52,288 | |
Subordinated debt | | | 14,800 | | | | 14,753 | | | | 14,658 | | | | 9,727 | | | | 7,217 | | | | 7,217 | | | | 14,872 | | | | 14,848 | | | | 14,753 | | | | 14,658 | | | | 9,727 | | | | 7,217 | |
Stockholders' equity | | | 130,353 | | | | 125,966 | | | | 132,643 | | | | 111,111 | | | | 101,829 | | | | 94,728 | | | | 177,035 | | | | 173,083 | | | | 125,966 | | | | 132,643 | | | | 111,111 | | | | 101,829 | |
| | For the Three Months Ended September 30, | | | For the Fiscal Years Ended June 30, | |
| | 2017 | | | 2016 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
| | (In thousands) | |
Operating Data: | | | | | | | | | | | | | | | | | | | | | |
Interest income | | $ | 18,411 | | | $ | 15,105 | | | $ | 61,488 | | | $ | 56,317 | | | $ | 55,301 | | | $ | 40,471 | | | $ | 36,291 | |
Interest expense | | | 3,308 | | | | 2,529 | | | | 10,366 | | | | 9,365 | | | | 8,766 | | | | 7,485 | | | | 7,501 | |
Net interest income | | | 15,103 | | | | 12,576 | | | | 51,122 | | | | 46,952 | | | | 46,535 | | | | 32,986 | | | | 28,790 | |
Provision for loan losses | | | 868 | | | | 925 | | | | 2,340 | | | | 2,494 | | | | 3,185 | | | | 1,646 | | | | 1,716 | |
Net interest income after provision for loan losses | | | 14,235 | | | | 11,651 | | | | 48,782 | | | | 44,458 | | | | 43,350 | | | | 31,340 | | | | 27,074 | |
Noninterest income | | | 3,271 | | | | 2,575 | | | | 11,084 | | | | 9,758 | | | | 8,659 | | | | 6,132 | | | | 4,468 | |
Noninterest expense | | | 10,755 | | | | 9,159 | | | | 38,252 | | | | 32,686 | | | | 32,285 | | | | 23,646 | | | | 17,521 | |
Income before income taxes | | | 6,751 | | | | 5,067 | | | | 21,614 | | | | 21,530 | | | | 19,724 | | | | 13,826 | | | | 14,021 | |
Income taxes | | | 1,889 | | | | 1,358 | | | | 6,062 | | | | 6,682 | | | | 6,056 | | | | 3,745 | | | | 3,954 | |
Net income | | | 4,862 | | | | 3,709 | | | | 15,552 | | | | 14,848 | | | | 13,668 | | | | 10,081 | | | | 10,067 | |
Less: effective dividend on preferred stock | | | --- | | | | --- | | | | --- | | | | 85 | | | | 200 | | | | 200 | | | | 345 | |
Net income available to common stockholders | | $ | 4,862 | | | $ | 3,709 | | | $ | 15,552 | | | $ | 14,763 | | | $ | 13,468 | | | $ | 9,881 | | | $ | 9,722 | |
Basic earnings per share available to common stockholders(1) | | $ | 0.57 | | | $ | 0.50 | | | $ | 2.08 | | | $ | 1.99 | | | $ | 1.84 | | | $ | 1.49 | | | $ | 1.48 | |
Diluted earnings per share available to common stockholders(1) | | $ | 0.56 | | | $ | 0.50 | | | $ | 2.07 | | | $ | 1.98 | | | $ | 1.79 | | | $ | 1.45 | | | $ | 1.44 | |
Dividends per share(1) | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.40 | | | $ | 0.36 | | | $ | 0.34 | | | $ | 0.32 | | | $ | 0.30 | |
| | At or For the Three Months Ended September 30, | | | At or For the Fiscal Years Ended June 30, | |
| | 2017 | | | 2016 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
| | (In thousands) | |
Key Operating Ratios and Other Data: | | | | | | | | | | | | | | | | | | | | | |
Performance ratios: | | | | | | | | | | | | | | | | | | | | | |
Return on assets (net income to average total assets) | | | 1.12 | % | | | 1.03 | % | | | 1.05 | % | | | 1.11 | % | | | 1.07 | % | | | 1.09 | % | | | 1.32 | % |
Return on average common equity (net income available to common stockholders divided by average common equity) | | | 11.11 | | | | 11.64 | | | | 11.70 | | | | 12.34 | | | | 12.48 | | | | 11.55 | | | | 12.34 | |
Average equity to average assets | | | 10.10 | | | | 8.87 | | | | 8.96 | | | | 9.40 | | | | 10.04 | | | | 11.43 | | | | 12.92 | |
Interest rate spread (spread between weighted average rate on all interest- earning assets and all interest-bearing liabilities) | | | 3.66 | | | | 3.70 | | | | 3.64 | | | | 3.69 | | | | 3.81 | | | | 3.68 | | | | 3.85 | |
Net interest margin (net interest income as a percentage of average interest- earning assets) | | | 3.79 | | | | 3.81 | | | | 3.74 | | | | 3.80 | | | | 3.92 | | | | 3.81 | | | | 4.02 | |
Noninterest expense to average assets | | | 2.48 | | | | 2.55 | | | | 2.58 | | | | 2.45 | | | | 2.53 | | | | 2.56 | | | | 2.29 | |
Average interest-earning assets to average interest-bearing liabilities | | | 116.80 | | | | 113.09 | | | | 113.13 | | | | 114.38 | | | | 115.39 | | | | 114.26 | | | | 116.68 | |
Allowance for loan losses to gross loans(2) | | | 1.12 | | | | 1.19 | | | | 1.10 | | | | 1.20 | | | | 1.15 | | | | 1.14 | | | | 1.28 | |
Allowance for loan losses to non- performing loans(2) | | | 626.70 | | | | 287.40 | | | | 481.65 | | | | 243.66 | | | | 323.35 | | | | 663.37 | | | | 583.41 | |
Net charge-offs (recoveries) to average outstanding loans during the period | | | 0.01 | | | | 0.09 | | | | 0.05 | | | | 0.09 | | | | 0.01 | | | | 0.10 | | | | 0.13 | |
Ratio of nonperforming assets to total assets(2) | | | 0.34 | | | | 0.56 | | | | 0.37 | | | | 0.64 | | | | 0.64 | | | | 0.43 | | | | 0.58 | |
Common shareholder dividend payout ratio (common dividends as a percentage of earnings available to common shareholders | | | 19.44 | | | | 20.06 | | | | 19.14 | | | | 18.12 | | | | 18.69 | | | | 21.44 | | | | 20.31 | |
| | At September 30, | | | At June 30, | |
| | 2017 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
| | (In thousands) | |
Other Data: | | | | | | | | | | | | | | | | | | |
Number of: | | | | | | | | | | | | | | | | | | |
Real Estate Loans | | | 6,836 | | | | 6,800 | | | | 5,554 | | | | 5,428 | | | | 4,459 | | | | 3,637 | |
Deposit Accounts | | | 72,925 | | | | 72,186 | | | | 60,839 | | | | 58,927 | | | | 43,159 | | | | 31,980 | |
Full service offices | | | 38 | | | | 39 | | | | 33 | | | | 32 | | | | 22 | | | | 17 | |
Limited service offices | | | 3 | | | | 3 | | | | 3 | | | | 3 | | | | 3 | | | | 1 | |
________________
(1) | All share and per share amounts have been adjusted for the two-for-one common stock split in the form of a 100% common stock dividend paid January 30, 2015. |
(2) At end of period.
| | For the six months ended December 31, | | | For the Fiscal Years Ended June 30, | |
| | 2016 | | | 2015 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | |
| | (In thousands) | |
Operating Data: | | | | | | | | | | | | | | | | | | | | | |
Interest income | | $ | 30,188 | | | $ | 28,207 | | | $ | 56,317 | | | $ | 55,301 | | | $ | 40,471 | | | $ | 36,291 | | | $ | 38,965 | |
Interest expense | | | 5,039 | | | | 4,602 | | | | 9,365 | | | | 8,766 | | | | 7,485 | | | | 7,501 | | | | 9,943 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | 25,149 | | | | 23,605 | | | | 46,952 | | | | 46,535 | | | | 32,986 | | | | 28,790 | | | | 29,022 | |
Provision for loan losses | | | 1,581 | | | | 1,114 | | | | 2,494 | | | | 3,185 | | | | 1,646 | | | | 1,716 | | | | 1,785 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 23,568 | | | | 22,491 | | | | 44,458 | | | | 43,350 | | | | 31,340 | | | | 27,074 | | | | 27,237 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest income | | | 5,275 | | | | 4,992 | | | | 9,758 | | | | 8,659 | | | | 6,132 | | | | 4,468 | | | | 4,063 | |
Noninterest expense | | | 17,865 | | | | 16,154 | | | | 32,686 | | | | 32,285 | | | | 23,646 | | | | 17,521 | | | | 16,605 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income before income taxes | | | 10,978 | | | | 11,329 | | | | 21,530 | | | | 19,724 | | | | 13,826 | | | | 14,021 | | | | 14,695 | |
Income taxes | | | 3,093 | | | | 3,485 | | | | 6,682 | | | | 6,056 | | | | 3,745 | | | | 3,954 | | | | 4,597 | |
Net income | | | 7,885 | | | | 7,844 | | | | 14,848 | | | | 13,668 | | | | 10,081 | | | | 10,067 | | | | 10,098 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Less: charge for early redemption of preferred stock issued at a discount | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | 94 | |
Less: effective dividend on preferred stock | | | --- | | | | 85 | | | | 85 | | | | 200 | | | | 200 | | | | 345 | | | | 424 | |
Net income available to common stockholders | | | 7,885 | | | | 7,759 | | | | 14,763 | | | | 13,468 | | | | 9,881 | | | | 9,722 | | | | 9,580 | |
Basic earnings per share available to common stockholders(2) | | $ | 1.06 | | | $ | 1.05 | | | $ | 1.99 | | | $ | 1.84 | | | $ | 1.49 | | | $ | 1.48 | | | $ | 1.71 | |
Diluted earnings per share available to common stockholders(2) | | | 1.06 | | | | 1.04 | | | | 1.98 | | | | 1.79 | | | | 1.45 | | | | 1.44 | | | | 1.66 | |
Dividends per share(2) | | | 0.20 | | | | 0.18 | | | | 0.36 | | | | 0.34 | | | | 0.32 | | | | 0.30 | | | | 0.24 | |
| | At or for the six months ended December 31, | | | At or For the Fiscal Years Ended June 30, | |
| | 2016 | | | 2015 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | |
| | | | | | | | | | | | | | | | | | | | | |
Key Operating Ratios and Other Data: | | | | | | | | | | | | | | | | | | | | | |
Performance ratios: | | | | | | | | | | | | | | | | | | | | | |
Return on assets (net income to average total assets) | | | 1.08 | % | | | 1.20 | % | | | 1.11 | % | | | 1.07 | % | | | 1.09 | % | | | 1.32 | % | | | 1.37 | % |
Return on average common equity (net income available to common stockholders divided by average common equity) | | | 12.26 | | | | 13.28 | | | | 12.34 | | | | 12.48 | | | | 11.55 | | | | 12.34 | | | | 15.15 | |
Average equity to average assets | | | 8.82 | | | | 9.79 | | | | 9.40 | | | | 10.04 | | | | 11.43 | | | | 12.92 | | | | 11.18 | |
Interest rate spread (spread between weighted average rate on all interest- earning assets and all interest-bearing liabilities) | | | 3.66 | | | | 3.76 | | | | 3.69 | | | | 3.81 | | | | 3.68 | | | | 3.85 | | | | 3.90 | |
Net interest margin (net interest income as a percentage of average interest- earning assets) | | | 3.76 | | | | 3.88 | | | | 3.80 | | | | 3.92 | | | | 3.81 | | | | 4.02 | | | | 4.12 | |
Noninterest expense to average assets | | | 2.45 | | | | 2.46 | | | | 2.45 | | | | 2.53 | | | | 2.56 | | | | 2.29 | | | | 2.25 | |
Average interest-earning assets to average interest-bearing liabilities | | | 112.75 | | | | 114.98 | | | | 114.38 | | | | 115.39 | | | | 114.26 | | | | 116.68 | | | | 115.19 | |
Allowance for loan losses to gross loans(1) | | | 1.22 | | | | 1.21 | | | | 1.20 | | | | 1.15 | | | | 1.14 | | | | 1.28 | | | | 1.27 | |
Allowance for loan losses to non- performing loans(1) | | | 265.02 | | | | 339.31 | | | | 243.66 | | | | 323.35 | | | | 663.37 | | | | 583.41 | | | | 312.38 | |
Net charge-offs (recoveries) to average outstanding loans during the period | | | 0.06 | | | | 0.04 | | | | 0.09 | | | | 0.01 | | | | 0.10 | | | | 0.13 | | | | 0.13 | |
Ratio of nonperforming assets to total assets(1) | | | 0.60 | | | | 0.57 | | | | 0.64 | | | | 0.64 | | | | 0.43 | | | | 0.58 | | | | 0.54 | |
Common shareholder dividend payout ratio (common dividends as a percentage of earnings available to common shareholders | | | 18.91 | | | | 17.22 | | | | 18.12 | | | | 18.69 | | | | 21.44 | | | | 20.31 | | | | 13.40 | |
| | At | | | | | | | | | | | | | | | | |
| | December 31, | | | At June 30, | |
| | 2016 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | |
Other Data: | | | | | | | | | | | | | | | | | | |
Number of: | | | | | | | | | | | | | | | | | | |
Real Estate Loans | | $ | 5,670 | | | $ | 5,554 | | | $ | 5,428 | | | $ | 4,459 | | | $ | 3,637 | | | $ | 3,583 | |
Deposit Accounts | | | 61,399 | | | | 60,839 | | | | 58,927 | | | | 43,159 | | | | 31,980 | | | | 31,307 | |
Full service offices | | | 33 | | | | 33 | | | | 32 | | | | 22 | | | | 17 | | | | 17 | |
Limited service offices | | | 3 | | | | 3 | | | | 3 | | | | 3 | | | | 1 | | | | 1 | |
Loan production offices | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
_____________________
(1)At end of period.
(2)All share and per share amounts have been adjusted for the two-for-one common stock plit in the form of a 100% common stock dividend paid January 30, 2015.
Comparative Unaudited Pro Forma Per Common Share Data
The table below sets forth the book value per common share, cash dividends per common share, and basic and diluted earnings per common share data for each of
Southern MissouriBancorp and
TammcorpSM Bancshares on a historical basis, for
Southern MissouriBancorp on a pro forma combined basis and on a pro forma combined basis for
TammcorpSM Bancshares equivalent shares. The pro forma
TammcorpSM Bancshares equivalent shares data shows the effect of the merger from the perspective of an owner of
TammcorpSM Bancshares common stock. The pro forma combined and pro forma combined equivalent shares information give effect to the merger as if the merger had been effective on the date presented in the case of the book value per common share data, and as if the merger had been effective as of July 1,
2015,2016, in the case of the cash dividends paid per common share and earnings per common share data. The pro forma data combine the historical results of
TammcorpSM Bancshares into
Southern Missouri'sBancorp's consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair value adjustments and other merger-related activity, they are not indicative of what could have occurred had the merger taken place on July 1,
2015.2016.The pro forma financial information in the table below is provided for illustrative purposes, does not include any projected cost savings, revenue enhancements or other possible financial benefits of the merger to the combined company and does not attempt to suggest or predict future results. This information also does not necessarily reflect what the historical financial condition or results of operations of the combined company would have been had Southern MissouriBancorp and TammcorpSM Bancshares been combined as of the dates and for the periods shown.
| | Southern Missouri Historical | | | Tammcorp Historical | | | Pro Forma Combined Amounts for Southern Missouri | | | Pro Forma Tammcorp Equivalent Shares(1) | |
Book value per common share at December 31, 2016 | | $ | 17.58 | | | $ | 2,412.19 | | | $ | 18.26 | (2) | | $ | 2,441.79 | |
Book value per common share at June 30, 2016 | | $ | 17.02 | | | $ | 2,404.16 | | | $ | 17.72 | (2) | | $ | 2,417.42 | |
| | | | | | | | | | | | | | | | |
Cash dividends paid per common share for the | | | | | | | | | | | | | | | | |
six months ended December 31, 2016 | | $ | 0.20 | | | $ | 6.30 | | | $ | 0.20 | (3) | | $ | 18.21 | |
Cash dividends paid per common share for the | | | | | | | | | | | | | | | | |
twelve months ended June 30, 2016 | | $ | 0.36 | | | $ | 12.60 | | | $ | 0.36 | (3) | | $ | 32.78 | |
| | | | | | | | | | | | | | | | |
Basic earnings per common share for the | | | | | | | | | | | | | | | | |
six months ended December 31, 2016 | | $ | 1.06 | | | $ | 36.37 | | | $ | 1.12 | (4) | | $ | 101.54 | |
Basic earnings per common share for the | | | | | | | | | | | | | | | | |
twelve months ended June 30, 2016 | | $ | 1.99 | | | $ | 176.49 | | | $ | 2.17 | (4) | | $ | 197.79 | |
| | | | | | | | | | | | | | | | |
Diluted earnings per common share for the | | | | | | | | | | | | | | | | |
six months ended December 31, 2016 | | $ | 1.06 | | | $ | 36.37 | | | $ | 1.11 | (4) | | $ | 101.21 | |
Diluted earnings per common share for the | | | | | | | | | | | | | | | | |
twelve months ended June 30, 2016 | | $ | 1.98 | | | $ | 176.49 | | | $ | 2.16 | (4) | | $ | 197.06 | |
| | Bancorp Historical | | | SM Bancshares Historical | | | Pro Forma Combined Amounts for Bancorp | | | Pro Forma SM Bancshares Equivalent Shares(1) | |
Book value per common share at September 30, 2017 | | $ | 20.65 | | | $ | 278.66 | | | $ | 21.06 | (2) | | $ | 289.58 | |
Book value per common share at June 30, 2017 | | $ | 20.19 | | | $ | 273.91 | | | $ | 20.61 | (2) | | $ | 285.46 | |
| | | | | | | | | | | | | | | | |
Cash dividends paid per common share for the | | | | | | | | | | | | | | | | |
three months ended September 30, 2017 | | $ | 0.11 | | | | --- | | | $ | 0.11 | (3) | | $ | 1.01 | |
Cash dividends paid per common share for the | | $ | 0.40 | | | $ | 15.00 | (5) | | $ | 0.40 | (3) | | $ | 3.66 | |
twelve months ended June 30, 2017 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Basic earnings per common share for the | | | | | | | | | | | | | | | | |
three months ended September 30, 2017 | | $ | 0.57 | | | $ | 5.84 | | | $ | 0.58 | (4) | | $ | 5.31 | |
Basic earnings per common share for the | | $ | 2.08 | | | $ | 26.73 | | | $ | 2.15 | (4) | | $ | 19.67 | |
twelve months ended June 30, 2017 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Diluted earnings per common share for the | | | | | | | | | | | | | | | | |
three months ended September 30, 2017 | | $ | 0.56 | | | $ | 5.84 | | | $ | 0.58 | (4) | | $ | 5.31 | |
Diluted earnings per common share for the | | $ | 2.07 | | | $ | 26.73 | | | $ | 2.14 | (4) | | $ | 19.57 | |
twelve months ended June 30, 2017 | | | | | | | | | | | | | | | | |
_______________________________________________________
(1) | Calculated by multiplying the Pro Forma Combined Amounts for Southern MissouriBancorp by an assumedthe estimated exchange ratio for the stock portion of the merger consideration of 45.529.1467 shares of Southern MissouriBancorp common stock for each share of TammcorpSM Bancshares common stock, and each share of Tammcorp Class A preferred stock (on an as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation), which is based on Southern Missouri's closingthe average Bancorp common stock price of $35.38 as reported by NASDAQ on December 31, 2016,$31.80, and, solely in the case of the book value per common share at June 30, 20162017 and December 31, 2016,September 30, 2017, adding to that result cash consideration per share assumed to be $1,610.58.$96.95. See "The Merger Agreement—Merger Consideration." |
(2) | Calculated by dividing the total pro forma combined Southern MissouriBancorp and TammcorpSM Bancshares equity by total pro forma combined common shares outstanding at the end of the period. |
(3) | Represents the historical cash dividends per share paid by Southern MissouriBancorp for the period. |
(4) | Pro forma earnings per common share are based on pro forma combined net income and pro forma combined weighted average shares outstanding during the period. |
(5) | SM Bancshares pays a cash dividend to its common shareholders annually following the end of each calendar year. This amount reflects the annual cash dividend paid by SM Bancshares to its shareholders in 2017 for the calendar year ended 2016. |
THE SPECIAL MEETING
This proxy statement/prospectus is being provided to the holders of TammcorpSM Bancshares common stock and Class A preferred stock as part of a solicitation of proxies by the TammcorpSM Bancshares board of directors for use at the special shareholders' meeting to be held at the time and place specified below and at any properly convened meeting following any adjournment or postponement thereof. This proxy statement/prospectus provides the holders of TammcorpSM Bancshares common stock and Class A preferred stock with information they need to know to be able to vote or instruct their vote to be cast at the special meeting.
Date, Time and Place
The special meeting of holders of TammcorpSM Bancshares common stock and Class A preferred stock will be held at the Corporate Training Center, 109 Independence1292 Banning Street, Cape Girardeau, Missouri 63703,Marshfield, MO 65706, on [●], 2017,January 15, 2018, at [●] [a.m./p.m.]10:00 a.m., Central Time.
Purpose of the TammcorpSM Bancshares Special Meeting
At the special meeting, holders of TammcorpSM Bancshares common stock and Class A preferred stock will be asked to consider and vote on a proposal to approve the merger agreement (which we refer to as the "merger agreement proposal") and a proposal to adjourn the special meeting, if necessary or appropriate to solicit additional proxies in favor of the merger agreement proposal (which we refer to as the "adjournment proposal"). Completion of the merger is conditioned on, among other things, shareholder approval of the merger agreement.
Recommendation of the TammcorpSM Bancshares Board of Directors
On January 11,August 16, 2017, the TammcorpSM Bancshares board of directors unanimously determined that the merger and the other transactions contemplated by the merger agreement are in the best interests of TammcorpSM Bancshares and its shareholders and it approved the merger agreement and the merger transactions contemplated therein.
Accordingly, the TammcorpSM Bancshares board of directors unanimously recommends that TammcorpSM Bancshares shareholders vote "FOR" the merger agreement proposal and "FOR" the adjournment proposal.
Holders of TammcorpSM Bancshares common stock and Class A preferred stock should carefully read this proxy statement/prospectus, including the documents incorporated by reference, and the Appendices in their entirety for more detailed information concerning the merger and the transactions contemplated by the merger agreement.
Record Date; Shareholders Entitled to Vote
The record date for the special meeting is [��],December 8, 2017. Only record holders of shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock at 5:00 p.m. Central Time, or the close of business, on the record date are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement thereof. At the close of business on the record date, the only holders of outstanding securities of Tammcorp with a right to vote at the special meeting were holders of its common stock and holders of its Class A preferred stock. As of the record date, there were 6,01739,356 shares of TammcorpSM Bancshares common stock and 1,416 shares of Tammcorp Class A preferred stock issued and outstanding. Each share of TammcorpSM Bancshares common stock and Class A preferred stock outstanding on the record date is entitled to one vote on the merger agreement proposal and on the adjournment proposal. The affirmative vote of the holders of at least two-thirds (2/3) of the total outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock, voting together as a single class, is required to approve the merger agreement proposal. For the adjournment proposal to be approved, the votes cast in favor of such proposal must exceed the votes cast against such proposal.
TammcorpSM Bancshares Shares Subject to a Voting Agreement
John R. Abercrombie,Each of the Presidentdirectors and Chief Executive Officerexecutive officers of Tammcorp,SM Bancshares has entered into an agreement to vote the shares of TammcorpSM Bancshares common stock and Class A preferred stock which are owned or
controlled by himsuch individual in favor of approval of the merger agreement.agreement proposal. As of the record date, 3,55318,931 shares of TammcorpSM Bancshares common stock and 258 shares of Tammcorp Class A preferred stock, or approximately 51.3%48.1% of the total combined outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock entitled to vote at the special meeting which vote together as a single class, are bound by the voting agreement.
Voting by Tammcorp's Directors and Executive Officers
As of the record date for the special meeting, Tammcorp's directors and executive officers and their affiliates were entitled to vote 4,793 shares of Tammcorp common stock and 258 shares of Tammcorp Class A preferred stock, or approximately 68.0% of the total combined outstanding shares of Tammcorp common stock and Class A preferred stock, which vote together as a single class. This includes the 3,553 shares of Tammcorp common stock and 258 shares of Tammcorp Class A preferred stock, or approximately 51.3% of the total combined outstanding shares of Tammcorp common stock and Class A preferred stock, covered by the voting agreement with Mr. Abercrombie. Tammcorp expects that all of its directors and executive officers and their affiliates will vote their shares in favor of the merger agreement proposal. Assuming this occurs, approval of the merger agreement is assured.
Quorum and Adjournment
No business may be transacted at the special meeting unless a quorum is present. Shareholders who hold shares representing at least a majority of each class of the shares entitled to vote at the special meeting must be present in person or represented by proxy to constitute a quorum, but the holders of at least two-thirds (2/3) of the total outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock must be present, either in person or by proxy at the special meeting, in order to take action on the merger agreement proposal. The affirmative vote of the holders of at least two-thirds (2/3) of the
outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock, voting together as a single class, is required to approve the merger agreement.agreement proposal. As a result, if shares representing at least two-thirds of the total outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock as of the record date are not present at the special meeting, the presence of a quorum will still not permit the merger agreement proposal to be approved at the special meeting.
All shares of TammcorpSM Bancshares common stock and Class A preferred stock represented at the special meeting, including shares that are represented but that vote to abstain, will be treated as present for purposes of determining the presence or absence of a quorum.
Required Vote
The affirmative vote of the holders of at least two-thirds (2/3) of the issued and outstanding shares of TammcorpSM Bancshares common stock and its Class A preferred stock, voting together as a single class, is required to approve the merger agreement proposal. Failures to vote and abstentions will have the same effect as a vote against this proposal. The adjournment proposal will be approved if the votes cast by holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock in favor of such proposal exceed the votes cast against such proposal. Failures to vote and abstentions will have no effect on this proposal.
Voting of Proxies by Holders of Record
If you were a record holder of TammcorpSM Bancshares common stock or Class A preferred stock at the close of business on the record date, a proxy card is enclosed for your use. TammcorpSM Bancshares requests that you vote your shares as promptly as possible by submitting your proxy card by mail using the enclosed return envelope. When the accompanying proxy card is returned properly executed, the shares of TammcorpSM Bancshares common stock and/or Class A preferred stock represented by it will be voted at the special meeting or any adjournment or postponement thereof in accordance with the instructions contained in the proxy card.
If a proxy card is returned without an indication as to how the shares of TammcorpSM Bancshares common stock represented by it are to be voted with regard to a particular proposal, such shares will be voted "FOR" the merger agreement proposal and "FOR" the adjournment proposal.
At the date hereof, Tammcorp'sSM Bancshares' board of directors has no knowledge of any business that will be presented for consideration at the special meeting and that would be required to be set forth in this proxy statement/prospectus or the related proxy card other than the merger agreement proposal and the adjournment proposal.
No other matter can be considered or voted upon at the special meeting.
Your vote is important. Accordingly, if you were a record holder of TammcorpSM Bancshares common stock or Class A preferred stock on the record date for the special meeting, please sign and return the enclosed proxy card whether or not you plan to attend the special meeting in person.
Attending the Meeting; Voting in Person
Only record holders of TammcorpSM Bancshares common stock and Class A preferred stock on the record date and their duly appointed proxies may attend the special meeting. All attendees must present government-issued photo identification (such as a driver's license or passport) for admittance. The additional items, if any, that attendees must bring to gain admittance to the special meeting depend on whether they are shareholders of record or proxy holders. A TammcorpSM Bancshares shareholder who holds shares of TammcorpSM Bancshares common stock directly registered in such shareholder's name who desires to attend the special meeting in person should bring government-issued photo identification. No cameras, recording equipment or other electronic devices will be allowed in the meeting room.
A shareholder who holds shares in "street name" through a broker, bank, trustee or other nominee (referred to in this proxy statement/prospectus as a "beneficial owner") who desires to attend the special meeting in person must bring proof of beneficial ownership as of the record date, such as a letter from the broker, bank, trustee or other
nominee that is the record owner of such beneficial owner's shares, a brokerage account statement or the voting instruction form provided by the broker.
A person who holds a validly executed proxy entitling such person to vote on behalf of a record owner of TammcorpSM Bancshares shares who desires to attend the special meeting in person must bring the validly executed proxy naming such person as the proxy holder, signed by the TammcorpSM Bancshares shareholder of record, and proof of the signing shareholder's record ownership as of the record date.
Revocation of Proxies
A TammcorpSM Bancshares shareholder entitled to vote at the special meeting may revoke a proxy at any time before it is voted at the special meeting by taking any of the following three actions:
· | delivering written notice of revocation to Corporate Secretary, c/o Tammcorp,Southern Missouri Bancshares, Inc., One South Main1292 Banning Street, Cape Girardeau, Missouri 63703;Marshfield, MO 65706; |
· | delivering a duly executed proxy card bearing a later date than the proxy that such shareholder desires to revoke; or |
· | attending the special meeting and voting in person. |
Merely attending the special meeting will not, by itself, revoke your proxy; you must vote at the special meeting using forms provided at the meeting for that purpose. The last valid vote TammcorpSM Bancshares receives before or at the special meeting is the vote that will be counted.
If you hold your shares in "street name" through a bank or broker, you must contact such bank or broker if you desire to revoke your proxy.
Solicitation of Proxies
The TammcorpSM Bancshares board of directors is soliciting proxies for the special meeting from holders of TammcorpSM Bancshares common stock and Class A preferred stock entitled to vote at the special meeting. In accordance with the merger
agreement, TammcorpSM Bancshares will pay its own cost of soliciting proxies from its shareholders includingand Bancorp will pay the costcosts of printing and mailing this proxy statement/prospectus. In addition to solicitation of proxies by mail, proxies may be solicited by Tammcorp'sSM Bancshares' officers, directors and regular employees, without additional remuneration, by personal interview, telephone or other means of communication.
TammcorpSM Bancshares will make arrangements with brokerage houses, custodians, nominees and fiduciaries to forward proxy solicitation materials to beneficial owners of TammcorpSM Bancshares common stock or Class A preferred stock. TammcorpSM Bancshares may reimburse these brokerage houses, custodians, nominees and fiduciaries for their reasonable expenses incurred in forwarding the proxy materials.
Abstentions and shares held through a broker or nominee that are voted on any matter are included in determining whether a quorum exists at the special meeting. Brokers that are members of the New York Stock Exchange ("NYSE") or NASDAQ Stock Market, as holders of record, are permitted to vote on certain routine matters in their discretion, but not on non-routine matters. The merger agreement proposal and the adjournment proposal are non-routine matters. Accordingly, if you hold shares of TammcorpSM Bancshares common stock in "street name" and do not provide voting instructions to your broker that is a member of the NYSE or the NASDAQ Stock Market, those shares will not be voted on the merger agreement proposal or the adjournment proposal unless you receive a proxy from that broker that will allow you to vote the shares in person at the special meeting.
Adjournments
Any adjournment of the special meeting may be made from time to time if the approval of the holders of a majority of voting shares who are present or represented by proxy at the special meeting is obtained, whether or not a quorum exists, without further notice other than by an announcement made at the special meeting (unless a new record date is fixed). If a quorum is not present at the special meeting, or if a quorum is present at the special
meeting but there are not sufficient votes at the time of the special meeting to approve the proposals, then TammcorpSM Bancshares shareholders may be asked to vote on a proposal to adjourn the special meeting so as to permit solicitation of additional proxies (referred to above as the "adjournment proposal").
Dissenters' Rights
Holders of shares of TammcorpSM Bancshares common stock and Class A preferred stock are entitled to dissenters' rights under Sections 11.65 and 11.70Section 351.455 of the IBCA,MGBCL, provided they satisfy the special conditions and conditions set forth therein. For a more detailed discussion of your dissenters' rights and the requirements for perfecting your dissenters' rights, see "The Merger – Dissenters' Rights of TammcorpSM Bancshares Shareholders." In addition, copiesa copy of Sections 11.65 and 11.70Section 351.455 of the IBCA areMGBCL is attached to this proxy statement/prospectus as Appendix B.
The following discussion contains certain information about the merger. The discussion is subject, and qualified in its entirety by reference, to the merger agreement attached as
Appendix A to this proxy statement/prospectus and incorporated herein by reference. We urge you to read carefully this entire proxy statement/prospectus, including the merger agreement attached as
Appendix A, for a more complete understanding of the merger.
Each of Southern Missouri'sBancorp's and Tammcorp'sSM Bancshares' board of directors has approved the merger agreement. The merger agreement provides for the merger of TammcorpSM Bancshares with and into Southern Missouri,Merger Sub, a wholly owned subsidiary of Bancorp, with Southern Missouri continuingSM Bancshares as the surviving corporation inentity after the merger. FollowingAs a result of this merger, each outstanding share of SM Bancshares common stock (other than dissenting and treasury shares) will be converted into the completion ofright to receive the merger Tammcorp's 91% owned bank subsidiary, Capaha Bank,consideration described below. Immediately following the merger, SM Bancshares will merge with and into Southern Missouri'sBancorp with Bancorp as the surviving entity and SM Bancshares' wholly owned bank subsidiary, SMB, will merge with and into Bancorp's wholly owned bank subsidiary, Southern Bank, with Southern Bank continuing as the resulting institution insurviving entity after the bank merger. As a result of the mergers, SM Bancshares and SMB will cease to exist as separate entities.
If the merger is completed, holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times Tammcorp'sSM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, adjusted for certain of Tammcorp'sSM Bancshares' transaction expenses, minus (2) $162,000, which represents the amount to be paid by Southern Missouri pursuant to a non-competition agreement with an executive officer of Tammcorp that will become effective upon completionexcess, if any, of the merger.cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000. As of March 31,September 30, 2017, Tammcorp'sSM Bancshares' consolidated equity capital, as adjusted for its estimated transaction expenses and contract termination costs, was $16.1$10.9 million. Based on this amount, if the merger were completed in AprilOctober 2017, the aggregate merger consideration would be $22.4$15.3 million (($16.1($10.9 million x 1.4) - $162,000). One-halfTwenty-five percent (25%) of the merger consideration will be paid in cash and one-halfseventy-five percent (75%) will be paid in shares of Southern MissouriBancorp common stock.
The per share cash consideration will be equal to 50%25% of the aggregate merger consideration divided by the sum of (1) the number of shares of TammcorpSM Bancshares common stock issued and outstanding immediately prior to the merger assuming all minority shareholders of Capaha Bank participate in the share exchange transaction described below and (2) the aggregate number of shares of Tammcorp common stock into which shares of Tammcorp Class A preferred stock are convertible.merger. The per share stock consideration will be a number of shares of Southern MissouriBancorp common stock equal to three times the per share cash consideration divided by $31.80, the average Southern MissouriBancorp common stock price. TammcorpAssuming aggregate merger consideration of $15.3 million, the per share cash consideration, based on the number of shares of SM Bancshares common stock currently outstanding, would be $96.95 and the per share stock consideration would be fixed at 9.1467 shares of Bancorp common stock for each share of SM Bancshares common stock outstanding. The per share stock consideration to be issued at the 9.1467 exchange ratio would represent approximately $290.87 in value for each share of SM Bancshares common stock, which, when added to the $96.95 per share cash merger consideration, equates to approximately $387.82 in value for each share of SM Bancshares common stock. SM Bancshares shareholders who would otherwise be entitled to a fractional share of Southern MissouriBancorp common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $31.80.
Under the average Southern Missouri common stock price.
The number ofabove scenario, if you held 100 shares of Southern Missouri common stock issuable as the per share stock consideration will fluctuate with the market price of Southern Missouri common stock and will not be known at the time Tammcorp shareholders vote on the merger agreement. On January 11, 2017, the closing price of Southern Missouri'sSM Bancshares common stock immediately prior to the public announcementmerger, you would receive $9,695 in cash ($96.95 x 100) and 914 shares of Bancorp common stock (9. 1467 x 100) plus $21.31 in cash in lieu of a fraction of a Bancorp share (0.67 x $31.80).
As stated above, the aggregate merger consideration the holders of SM Bancshares common stock will receive in the merger is based on SM Bancshares' consolidated equity capital (as adjusted pursuant to the merger agreement) as of the last business day of the month immediately preceding the month in which the merger closing occurs. Accordingly, the aggregate merger consideration to be paid to the holders of SM Bancshares common stock at closing will depend on a number of factors, including SM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, the total amount of SM Bancshares' transaction expenses and the final cost of contract termination charges of SM Bancshares triggered as a result of the merger. In addition, since the stock portion of the merger agreement was $33.76, andconsideration is calculated based on ___________________, 2017,$31.80 (the average Bancorp common stock price), the most recent trading day practicable beforemarket value of the printingstock portion of this proxy statement/prospectus,the merger consideration to be paid to the holders of SM Bancshares common stock will vary from the closing price of Southern MissouriBancorp common stock was $_____. You should obtain current stock price quotations for Southern Missouri common stock. Southern Missouri common stock is listed on the NASDAQ Global Market underdate Bancorp and SM Bancshares announced the symbol "SMBC." Neither Tammcorp common stock nor Tammcorp Class A preferred stock is listed or traded on any established securities exchange or quotation system.
Assuming the aggregate merger, consideration is $22.4 million and that all minority shareholders of Capaha Bank participate in the share exchange transaction described below, based on the number of shares of Tammcorp common stock and Tammcorp Class A preferred stock currently outstanding the per share cash consideration would be $1,634.34. Indate that this case, if the average Southern Missouri common stock price were $33.76, the per share stock consideration would consist of 48.4105 shares of Southern Missouri common stock, and if the average Southern Missouri common stock price were $____, the per share stock consideration would consist of ___ shares of Southern Missouri common stock.proxy
It
statement/prospectus is a conditionmailed to Southern Missouri's obligation to completeSM Bancshares shareholders, on the date of the SM Bancshares special meeting and on the date the merger that a share exchange transaction by Tammcorpis completed and thereafter. However, there will not be consummated with the minority shareholders of Capaha Bank holding at least 80% of the outstanding shares of Capaha Bank's common stock not owned by Tammcorp, whereby such minority shareholders will become holders of Tammcorp common stock immediately prior to the merger. Assuming consummation of the share exchange transaction and completion of the merger, the minority shareholders of Capaha Bank will be entitled to receive the merger consideration payable under the merger agreement.
After the completion of the merger, if there are any minority shareholders of Capaha Bank who did not participate in the share exchange transaction, Southern Missouri will adopt a new or amended plan of merger for the bank merger providing for the shares of Capaha Bank common stock owned by such non-participating minority shareholders to be converted into the right to receive consideration payable by Southern Missouri that is identical in form and amountadjustment to the merger consideration that such non-participating minority shareholders would have been entitled to receive underfor changes in the market price of shares of Bancorp common stock. Therefore, you will not know at the time of the special meeting the precise aggregate merger consideration or the market value of the stock portion of the merger agreement had they participated in the exchange transaction, subject to their rights under the Illinois Savings Bank Act to demand paymentconsideration you will receive upon completion of the value of their shares of Capaha Bankmerger. We urge you to obtain current market quotations for Bancorp common stock.stock (NASDAQ: trading symbol "SMBC").
Holders of
TammcorpSM Bancshares common
stock and Tammcorp Class A preferred stock are being asked to approve the merger
agreement.agreement proposal. See "The Merger Agreement" for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.
In connection with the ongoing consideration and evaluation of its long-term strategic alternatives and prospects, Tammcorp'sSM Bancshares's board of directors and executive management team have considered and regularly reviewed the strategic direction and business objectives of its consolidated organization as part of their continuous efforts to enhance value to its shareholders and other constituencies.shareholders. This strategic planning exercise generally included an evaluation of the merits and drawbacks of (i) continuing to operate as an independent institution, (ii) expansion through the strategic acquisition of other institutions and branch offices, and (iii) entering into a strategic merger with another financial institution. These considerations focused on, among other things, prospects and developments in the current regulatory environment, in the economy generally and in financial markets, for financial institutions generally and for Tammcorp,SM Bancshares, in particular, as well as conditions and ongoing consolidation in the financial services industry. In furtherance of these objectives, TammcorpSM Bancshares has evaluated a number of strategic opportunities over the past several years.
As a result of an ongoing desire to provide shareholder liquidity and a perceived recent improvement in market pricing for larger community bank franchises in Missouri, in March 2016, Tammcorp'sSM Bancshares's board of directors engaged a financial advisorconsultant to assist it in evaluatinghelp advise the prospectboard of merging Tammcorp into a larger institution. During April 2016the value of the SM Bancshares stock and following several preliminary meetings and discussions between Tammcorp'sthe value of SMB.
SM Bancshares's board worked with SM Bancshares's executive management and representatives of Sheshunoff, on May 19, 2016, Tammcorp formally engaged Sheshunoff to act as its financial advisor and to assist the board of directors in exploring a possible business combination transaction with other interested institutions.
In accordance with the directives of Tammcorp's board, representatives of Sheshunoff worked with Tammcorp's executive management to prepare bid solicitation materials. Sheshunoff initially contacted 26 institutions that it believed might be possible merger partners for Tammcorp. From amongreceived proposals from several prospective purchasers. SM Bancshares reviewed those contacted, 13 institutions expressed an interest in further exploring a potential acquisition of, or combination with Tammcorp.offers. After entering into confidentiality agreements and conducting preliminary diligence, threetwo of the contacted institutionsprospective purchasers submitted formal offers.
With the assistance of Sheshunoff, Tammcorp'sSM Bancshares's board of directors and executive management reviewed the offers and determined that Southern Missouri'sBancorp's offer, consisting of merger consideration payable 50%25% in cash and 50%75% in shares of Southern Missouri's publicly-tradedBancorp's publicly traded common stock, would be in the best interests of TammcorpSM Bancshares and its shareholders. On September 12, 2016, TammcorpMarch 21, 2017, SM Bancshares and Southern MissouriBancorp entered into a non-binding letter of intent, providing for the material terms of the proposed merger, and also providing that TammcorpSM Bancshares would not solicit offers from organizations other than Southern MissouriBancorp for a period of 60 days while TammcorpSM Bancshares and Southern
MissouriBancorp completed mutual due diligence and worked toward negotiation and preparation of a definitive merger agreement. Following execution of the letter of intent, the parties established virtual electronic data rooms to facilitate due diligence investigation. Over the next several months, TammcorpSM Bancshares and Southern MissouriBancorp worked to complete their respective due diligence investigations.
TammcorpSM Bancshares received the first draft of the merger agreement from Southern MissouriBancorp on October 18, 2016June 1, 2017 and the parties negotiated the financial terms of the transaction and the merger agreement over the next several months. On January 11,August 16, 2017, Tammcorp'sSM Bancshares's board of directors met to consider and discuss the terms of the merger agreement and the merger. Tammcorp's board of directors also considered the proposed exchange offer whereby minority shareholders of Capaha would be given an opportunity to exchange their shares of Capaha common stock for shares of Tammcorp common stock prior to the merger, and thereby receive the same consideration as Tammcorp shareholders in connection with the merger. At the January 11, 2017 meeting, Sheshunoff reviewed the financial aspects of the transaction and discussed on a preliminary basis the fairness opinion to be delivered by Sheshunoff prior to execution of the merger agreement. Following its presentation, Sheshunoff delivered its opinion, dated January 11, 2017, to Tammcorp's board of directors, to the effectwhich were unanimously approved at that as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Sheshunoff as set forth in its opinion, the aggregate merger consideration was fair, from a financial point of view, to Tammcorp's shareholders. Thereafter, Tammcorp's board of directors approved the merger agreement. Southern Missouri's board of directors separately approved the merger agreement on January 6, 2017.meeting.
On January 11,August 17, 2017, TammcorpSM Bancshares and Southern MissouriBancorp entered into the merger agreement and Southern MissouriBancorp issued a press release announcing the proposed merger.
Tammcorp'sSM Bancshares' Reasons for the Merger; Recommendation of
Tammcorp'sSM Bancshares' Board of Directors
Tammcorp'sSM Bancshares' board of directors believes that the merger is in the best interest of TammcorpSM Bancshares and its shareholders. Accordingly, Tammcorp'sSM Bancshares' board of directors has unanimously approved the merger and the merger agreement and unanimously recommends that Tammcorp'sSM Bancshares' shareholders vote "FOR" approval of the merger agreement.agreement proposal.
In approving the merger agreement, Tammcorp'sSM Bancshares' board of directors consulted with Sheshunoffmanagement with respect to the financial aspects and fairness of the merger consideration, from a financial point of view, to the holders of shares of TammcorpSM Bancshares common stock and Class A preferred stock, and with its outside legal counsel as to its legal duties and the terms of the merger agreement. The board believes that combining with Southern MissouriBancorp will create a stronger and more diversified organization that will provide significant benefits to Tammcorp'sSM Bancshares' shareholders and customers alike.
The terms of the merger agreement, including the consideration to be paid to Tammcorp'sSM Bancshares' shareholders, were the result of arm's length negotiations between representatives of TammcorpSM Bancshares and representatives of Southern Missouri.Bancorp. In arriving at its determination to approve the merger agreement, Tammcorp'sSM Bancshares' board of directors considered a number of factors, including the following material factors:
· | Tammcorp'sSM Bancshares' board of directors' familiarity with and review of information concerning the business, results of operations, financial condition, competitive position and future prospects of Tammcorp;SM Bancshares and Bancorp compared to the risks and challenges associated with the operation of SM Bancshares' business as an independent entity; |
· | the current and prospective environment in which TammcorpSM Bancshares operates, including national, regional and local economic conditions, the competitive environment for banks, thrifts and other financial institutions generally and the increased regulatory burdens on financial institutions generally and the trend toward consolidation in the banking industry and in the financial services industry; |
· | the financial presentation of Sheshunoff and the opinion of Sheshunoff, dated as of January 11, 2017, that, as of January 11, 2017, and subject to the assumptions, limitations and qualifications set forth in the opinion, the total aggregate merger consideration to be received from Southern Missouri, consisting of cash and Southern Missouri common stock, having a then-estimated aggregate value of approximately $23.2 million, is fair, from a financial point of view, to the shareholders of Tammcorp (see "—Opinion of Sheshunoff—Financial Advisor to Tammcorp," beginning on page [●]);management; |
· | that shareholders of TammcorpSM Bancshares will receive one-halfseventy-five percent (75%) of the merger consideration in shares of Southern MissouriBancorp common stock, which is listed on the NASDAQ Stock Market, contrasted with the absence of a public market for Tammcorp'sSM Bancshares' common stock and Class A preferred stock; |
· | the treatment of the mergermergers as a "reorganization" within the meaning of Section 368(a) of the Code with respect to the shares of TammcorpSM Bancshares common stock and Class A preferred stock exchanged for Southern MissouriBancorp common stock; |
· | the results that TammcorpSM Bancshares could expect to obtain if it continued to operate independently, and the likely benefits to shareholders of that course of action, as compared with the value of the merger consideration offered by Southern Missouri; |
· | that minority shareholders of Capaha Bank, following the share exchange transaction with Tammcorp, will have the opportunity to receive a value equivalent to that received by the shareholders of Tammcorp in connection with the merger;Bancorp; |
· | the ability of Southern MissouriBancorp to pay the aggregate merger consideration without a financing contingency and without the need to obtain financing to close the transaction; |
· | the ability of Southern MissouriBancorp to receive the requisite regulatory approvals in a timely manner; |
· | the terms and conditions of the merger agreement, including the parties' respective representations, warranties, covenants and other agreements, and the conditions to closing; |
· | that a merger with a larger holding company would provide the opportunity to realize economies of scale, increase efficiencies of operations and enhance the development of new products and services; |
· | that Tammcorp'sSM Bancshares' directors and executive officers have financial interests in the merger in addition to their interests as TammcorpSM Bancshares shareholders including financial interests that are the result of compensation arrangements with Tammcorp, and the manner in which such interests would be affected by the merger; |
· | that the cash portion of the merger consideration will be taxable to Tammcorp'sSM Bancshares' shareholders upon completion of the merger; |
· | the requirement that TammcorpSM Bancshares conduct its business in the ordinary course and the other restrictions on the conduct of the Tammcorp'sSM Bancshares' business before completion of the merger, which may delay or prevent TammcorpSM Bancshares from undertaking business opportunities that may arise before completion of the merger; and |
· | that under the merger agreement TammcorpSM Bancshares cannot solicit competing proposals for the acquisition of Tammcorp.SM Bancshares. |
The TammcorpSM Bancshares board of directors also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the proposed transaction, including, without limitation, the following:
· | the potential risk of diverting management attention and resources from the operation of Tammcorp'sSM Bancshares' business towards the completion of the merger; |
· | the restrictions on the conduct of Tammcorp'sSM Bancshares' business prior to the completion of the merger, which are customary for merger agreements involving financial institutions, but which, subject to specific exceptions, could delay or prevent TammcorpSM Bancshares from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of TammcorpSM Bancshares absent the pending completion of the merger; |
· | the possibility that TammcorpSM Bancshares will have to pay a $1 million$450,000 termination fee to Southern MissouriBancorp if the merger agreement is terminated under certain circumstances; |
· | the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating Tammcorp'sSM Bancshares' and Capaha Bank'sSMB's business, operations and workforce with those of Southern Missouri;Bancorp; |
· | the merger-related costs and expenses; |
· | the other risks described under the heading "Risk Factors." |
The foregoing discussion of the information and factors considered by the TammcorpSM Bancshares board of directors is not intended to be exhaustive, but includes the material factors considered by the TammcorpSM Bancshares board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the board of directors of TammcorpSM Bancshares did not assign any relative or specific weight to different factors and individual directors may have given weight to different factors. Based on the reasons stated above, the board of directors of TammcorpSM Bancshares believes that the merger is in the best interest of TammcorpSM Bancshares and its shareholders and therefore the board of directors of TammcorpSM Bancshares unanimously approved the merger agreement and the merger.
This summary of the reasoning of Tammcorp'sSM Bancshares' board of directors and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Statements."
TAMMCORP'SSM BANCSHARES' BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.AGREEMENT PROPOSAL.
Southern Missouri'sBancorp's Reasons for the Merger
After careful consideration, at a meeting held on January 6,August 17, 2017, Southern Missouri'sBancorp's board of directors unanimously determined that the merger agreement, including the merger and the other transactions contemplated thereby, is in the best interests of Southern MissouriBancorp and its shareholders.
In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Southern MissouriBancorp board of directors consulted with Southern MissouriBancorp management, as well as its legal advisors, and considered a number of factors, including the following material factors:
· | its knowledge of Tammcorp'sSM Bancshares' business, operations, financial condition, earnings and prospects, taking into account the results of Southern Missouri'sBancorp's due diligence review of TammcorpSM Bancshares and Capaha Bank,SMB, including Southern Missouri'sBancorp's assessments of their credit policies, asset quality, adequacy of loan loss reserves, interest rate risk and litigation; |
· | the fact that an acquisition of Tammcorp and Capaha Bank would enable Southern Missouri to expand its strategic presence through six bank offices in the attractive southeast Missouri and southern Illinois market areas; |
· | the reports of Southern Missouri management concerning the operations and financial condition of Tammcorp and the pro forma financial impact of the merger; |
· | the fact that an acquisition of SM Bancshares and SMB would enhance Bancorp's strategic presence in the Springfield, Missouri Metropolitan Statistical Area and would be helpful to its continued growth in that market, which has been a key to the company's growth over recent years; |
· | the reports of Bancorp management concerning the operations and financial condition of SM Bancshares and the pro forma financial impact of the merger; |
· | the strength of Capaha Bank'sSMB's management team; |
· | the fact that Tammcorp'sSM Bancshares' and Capaha Bank'sSMB's shareholders would own approximately 4.0 %4.0% of the outstanding shares of Southern MissouriBancorp common stock immediately following the merger (assuming all Capaha Bank minority shareholders agree to exchange their Capaha Bank shares for Tammcorp shares immediately prior to the merger);merger; |
· | the interests of Tammcorp'sSM Bancshares' directors and executive officers in the merger, in addition to their interests generally as shareholders, as described under "—Interests of Tammcorp'sSM Bancshares' Directors and Executive Officers in the Merger"; |
· | the fact that Tammcorp'sSM Bancshares' and Southern Missouri'sBancorp's management teams share a common business vision and commitment to their respective customers, shareholders, employees and other constituencies; |
· | the belief of Southern Missouri'sBancorp's management that the merger will be accretive to Southern Missouri'sBancorp's earnings under accounting principles generally accepted in the United States, commonly referred to as "GAAP"; |
· | the fact that the merger is likely to provide an increase in shareholder value, including the benefits of a stronger strategic position; |
· | the anticipated pro forma impact of the merger on the combined company, including potential synergies, and the expected impact on financial metrics such as earnings and tangible equity per share, as well as on regulatory capital levels; |
· | the likelihood of a successful integration of Tammcorp'sSM Bancshares' and Capaha Bank'sSMB's business, operations and workforce with those of Southern Missouri;Bancorp; |
· | the regulatory and other approvals required in connection with the transaction and the likelihood such approvals would be received in a timely manner and without unacceptable conditions; and |
· | the financial and other terms of the merger agreement, including the merger consideration, tax treatment and termination fee provisions, which the Southern MissouriBancorp board reviewed with its outside legal advisors. |
The Southern MissouriBancorp board of directors also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the proposed transaction, including, without limitation, the following:
· | the potential risk of diverting management attention and resources from the operation of Southern Missouri'sBancorp's business towards the completion of the merger; |
· | the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating Tammcorp'sSM Bancshares' and Capaha Bank'sSMB's business, operations and workforce with those of Southern Missouri;Bancorp; |
· | the merger-related costs and expenses; |
· | the fact that the stock portion of the merger consideration consists of an exchange ratio that floats and, therefore, the number of shares of Southern Missouri common stock to be issued in the merger is not fixed at this time; and |
· | the other risks described under the heading "Risk Factors." |
The foregoing discussion of the information and factors considered by the Southern MissouriBancorp board of directors is not intended to be exhaustive, but includes the material factors considered by the Southern MissouriBancorp board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the
merger agreement, the Southern MissouriBancorp board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The Southern MissouriBancorp board of directors considered all these factors as a whole, including discussions with, and questioning of, Southern Missouri'sBancorp's management and Southern Missouri'sBancorp's legal advisors, and overall considered the factors to be favorable to, and to support, its determination.
Southern Missouri'sBancorp's board of directors unanimously approved the merger agreement.
This summary of the reasoning of Southern Missouri'sBancorp's board of directors and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Statements."
Opinion of Sheshunoff – Financial Advisor to Tammcorp
Tammcorp retained Sheshunoff to provide an opinion as to the fairness from a financial viewpoint to Tammcorp's shareholders of the merger consideration to be received by the shareholders of Tammcorp. As part of its investment banking business, Sheshunoff is regularly engaged in the valuation of securities in connection with mergers and acquisitions and valuations for estate, corporation and other purposes. Tammcorp retained Sheshunoff based upon Sheshunoff's experience as a financial advisor in mergers and acquisitions and knowledge of financial institutions.
On January 11, 2017, Sheshunoff rendered its opinion to the board of directors of Tammcorp that, as of such date, the merger consideration was fair, from a financial point of view, to the shareholders of Tammcorp. The full text of the fairness opinion which sets forth, among other things, assumptions made, procedures followed, matters considered, and limitations on the review undertaken, is attached as Appendix C to this proxy statement/prospectus. You are urged to read Sheshunoff's fairness opinion carefully and in its entirety. The fairness opinion is addressed to the board of directors of Tammcorp and does not constitute a recommendation to any shareholder of Tammcorp as to how he or she should vote at the special meeting of shareholders of Tammcorp.
In connection with the fairness opinion, Sheshunoff:
· | Reviewed the latest version of the merger agreement provided to it; |
· | Discussed the terms of the merger agreement with the management of Tammcorp and Tammcorp's legal counsel; |
· | Conducted conversations with management of Tammcorp regarding the recent and projected financial performance of Tammcorp; |
· | Evaluated the financial condition of Tammcorp based upon a review of regulatory reports for the five-year period ended December 31, 2015 and interim period through September 30, 2016, and internally-prepared financial reports for Tammcorp for the interim period through December 31, 2016; |
· | Compared Tammcorp Inc.'s recent operating results with those of certain other banks in the Midwest Region of the United States as defined by SNL Financial and in Missouri and Illinois that have recently been acquired; |
· | Compared the pricing multiples for Tammcorp in the merger to recent acquisitions of banks in the Midwest Region of the United States as defined by SNL Financial and in Missouri and Illinois with similar characteristics to Tammcorp; |
· | Analyzed the present value of the after-tax cash flows based on projections on a stand-alone basis approved by Tammcorp through the five-year period ending September 30, 2021; |
· | Reviewed the potential pro forma impact of the merger on the combined company's results and certain financial performance measures of Tammcorp and Southern Missouri; |
· | Discussed certain matters regarding Southern Missouri's regulatory standing, financial performance, and business prospects with Southern Missouri's executives and representatives; |
· | Reviewed certain internal and publicly available information regarding Southern Missouri that Sheshunoff deemed relevant; |
· | Compared Southern Missouri's recent operating results and pricing multiples with those of certain other publicly traded banks in the Midwest Region, as defined by SNL Financial, that Sheshunoff deemed relevant; |
· | Compared the historical stock price data and trading volume of Southern Missouri to certain relevant indices; and |
· | Performed such other analyses deemed appropriate. |
For the purposes of its opinion, Sheshunoff assumed and relied upon, without independent verification, the accuracy and completeness of the information provided to it by Tammcorp in conjunction with this opinion. Sheshunoff assumed that any projections provided by or approved by Tammcorp were reasonably prepared on a basis reflecting the best currently available estimates and judgments of Tammcorp's management. Sheshunoff assumed such forecasts and projections will be realized in the amounts and at times contemplated thereby.
Sheshunoff did not make an independent evaluation of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets or liabilities) of Tammcorp or Southern Missouri nor was Sheshunoff furnished with any such appraisal. Sheshunoff assumed that any off-balance-sheet activities of Tammcorp or Southern Missouri will not materially and adversely impact the future financial position or results of operations of Southern Missouri after the merger. Sheshunoff is not an expert in the evaluation of loan portfolios for the purposes of assessing the adequacy of the allowance for loan and lease losses and assumed that such allowances for Tammcorp and Southern Missouri are, respectively, adequate to cover such losses.
Sheshunoff assumed that the merger agreement, as provided to Sheshunoff, will be without any amendment or waiver of, or delay in the fulfillment of, any terms or conditions set forth in the terms provided to Sheshunoff or any subsequent development that would have a material adverse effect on Tammcorp or Southern Missouri and thereby on the results of its analyses. Sheshunoff assumed that any and all regulatory approvals, if required, will be received in a timely fashion and without any conditions or requirements that could adversely affect the operations or financial condition of Southern Missouri after the completion of the merger.
The fairness opinion is necessarily based on economic, market, regulatory, and other conditions as in effect on, and the information made available to Sheshunoff as of January 11, 2017.
In rendering its fairness opinion, Sheshunoff performed a variety of financial analyses. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Consequently, Sheshunoff's fairness opinion is not readily susceptible to partial analysis or summary description. Moreover, the evaluation of fairness, from a financial point of view, of the merger consideration is to some extent subjective, based on the experience and judgment of Sheshunoff, and not merely the result of mathematical analysis of financial data. Sheshunoff did not attribute particular weight to any analysis or factors considered by it. Accordingly, notwithstanding the separate factors summarized below, Sheshunoff believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the factors considered, without considering all analyses and factors, could create an incomplete view of the evaluation process underlying its opinion. The ranges of valuations resulting from any
particular analysis described below should not be taken to be Sheshunoff's view of the actual value of Tammcorp, Southern Missouri or the combined entity.
In performing its analyses, Sheshunoff made numerous assumptions with respect to industry performance, business and economic conditions and other matters, many of which are beyond the control of Tammcorp or Southern Missouri The analyses performed by Sheshunoff are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. In addition, Sheshunoff's analyses should not be viewed as determinative of the opinion of the board of directors or the management of Tammcorp with respect to the value of Tammcorp or Southern Missouri or to the fairness of the merger consideration.
The following is a summary of the analyses performed by Sheshunoff in connection with its opinion. The discussion utilizes financial information concerning Tammcorp and Southern Missouri as of September 30, 2016 that is believed to be reliable, accurate, and complete; however, Sheshunoff cannot guarantee the reliability, accuracy, or completeness of any such publicly available information.
Pursuant to the merger agreement, Southern Missouri has agreed to exchange cash and common stock, having an aggregate value estimated at $23.2 million at the time Sheshunoff delivered its opinion, for all of the outstanding shares of common and preferred stock of Tammcorp as well as all minority shares of Capaha Bank not owned by Tammcorp. In issuing its opinion, Sheshunoff estimated that the consideration would consist of approximately $11.6 million in cash and $11.6 million in common stock of Southern Missouri. Per the merger agreement, the number of common shares of Southern Missouri to be issued will be based in part upon the average closing price of Southern Missouri common stock for the 20 consecutive trading days ending on and including the fifth trading day immediately preceding the merger closing date. The value and the composition of the total merger consideration may be adjusted pursuant to the terms of the merger agreement and the aggregate amount stated above is based upon various assumptions including closing date and transaction expense amounts.
Tammcorp Discounted Cash Flow Analysis: Using discounted cash flow analysis, Sheshunoff estimated the present value of the future after-tax cash flow streams that Tammcorp could produce on a stand-alone basis through September 30, 2021 under various circumstances, assuming that it performed in accordance with the projections provided by Tammcorp's management.
Sheshunoff estimated the terminal value for Tammcorp at the end of September 30, 2021 by (1) multiplying the final period projected earnings by one plus the assumed annual long-term growth rate of the earnings of Tammcorp of 4.0% (or 1.04) and (2) dividing this product by the difference between the required rates of return shown below and the assumed annual long-term growth rate of earnings of 4.0% in (1) above. Sheshunoff discounted the annual cash flow streams (defined as all earnings in excess of that which is required to maintain a tangible common equity to tangible asset ratio of 8.0%) and the terminal values using discount rates ranging from 12.0% to 14.0%. The discount rate range was chosen to reflect different assumptions regarding the required rates of return of Tammcorp and the inherent risk surrounding the underlying projections. This discounted cash flow analysis indicated a range of values per share of $1,942.23 to $2,523.77 as shown in the table below compared to the estimated merger consideration of $3,369.31 per share.
| | Discount Rate | | | | |
| | | 14.0 | % | | | 13.0 | % | | | 12.0 | % |
Present value (in thousands) | | $ | 11,888.00 | | | $ | 13,464.00 | | | $ | 15,448.00 | |
Present value (per diluted share) | | $ | 1,942.23 | | | $ | 2,199.60 | | | $ | 2,523.77 | |
Analysis of Selected Transactions: Sheshunoff performed an analysis of premiums paid in selected recently announced acquisitions of banking organizations with comparable characteristics to Tammcorp. Two sets of transactions were selected to ensure a thorough analysis.
The first set of comparable transactions consisted of a group of selected transactions for banks and thrifts in the United States, for which pricing data was available, with the following characteristics: targets with headquarters in the Midwest with total assets between $50 million and $1 billion that were announced since January 1, 2015,
reporting a return on average assets between 0.0% and 1.0%, and a non-performing assets to total assets ratio less than 4%. These comparable transactions consisted of 34 mergers and acquisitions of banks and thrifts with total assets ranging between $51.4 million and $980.6 million that were announced between January 6, 2015 and October 11, 2016. The analysis yielded multiples of the purchase prices in these transactions as summarized below:
| | Price/ Book (x) | | | Price/Tg Book (x) | | | Price/ 8% Tg Book (x) | | | Price/ LTM** Earnings (x) | | | Price/ Assets (%) | | | Price/ Deposits (%) | | | Premium/ Deposits (%) | |
Maximum | | | 3.47 | | | | 3.47 | | | | 2.56 | | | | 48.3 | | | | 24.0 | | | | 30.8 | | | | 13.5 | |
Minimum | | | 0.56 | | | | 0.57 | | | | 0.61 | | | | 5.2 | | | | 4.1 | | | | 4.5 | | | | (14.2 | ) |
Median | | | 1.22 | | | | 1.30 | | | | 1.41 | | | | 19.6 | | | | 13.3 | | | | 16.3 | | | | 3.9 | |
Tammcorp, Inc. | | | 1.39 | | | | 1.44 | | | | 1.41 | | | | 17.6 | | | | 12.0 | | | | 14.0 | | | | 3.9 | |
** Last-twelve-months
The Price to Assets, Price to Deposits and Premium to Deposits ratios are based on the aggregate merger consideration, including the portion payable to the minority shareholders of Capaha Bank, assuming all of such shareholders exchange their shares of Capaha common stock for Tammcorp common stock immediately prior to the merger. The other ratios are also based on the aggregate merger consideration but exclude the portion payable to the minority shareholders of Capaha Bank who become shareholders of Tammcorp immediately prior to the merger pursuant to the share exchange transaction.
The transaction value multiples exceed the medians of the Midwest regional group on a price to book and price to tangible book basis and are in line with the group on price to 8% book and premium to deposits basis. The transaction value multiples are slightly below the medians for the Midwest regional group on a price to LTM earnings due to slightly higher ROAA for Tammcorp and slightly below the median for price to assets and price to deposits due primarily to Tammcorp exhibiting much lower capital levels compared to the median levels.
The second set of comparable transactions consisted of a group of selected transactions for banks and thrifts headquartered in either Missouri or Illinois, for which pricing data was available, with the following characteristics: deals that were announced since January 1, 2014, a return on average assets between 0.0% and 1.0%, and targets with headquarters in non-major MSAs. These comparable transactions consisted of six mergers and acquisitions of banks and thrifts with total assets ranging between $20.1 million and $442.4 million that were announced between February 25, 2014 and November 15, 2016. The analysis yielded multiples of the purchase prices in these transactions as summarized below:
| | Price/ Book (x) | | | Price/Tg Book (x) | | | Price/ 8% Tg Book (x) | | | Price/ LTM** Earnings (x) | | | Price/ Assets (%) | | | Price/ Deposits (%) | | | Premium/ Deposits (%) | |
Maximum | | | 1.28 | | | | 1.38 | | | | 1.63 | | | | 42.4 | | | | 25.7 | | | | 32.6 | | | | 6.4 | |
Minimum | | | 1.07 | | | | 1.10 | | | | 1.15 | | | | 18.5 | | | | 8.5 | | | | 10.2 | | | | 1.3 | |
Median | | | 1.18 | | | | 1.20 | | | | 1.26 | | | | 32.6 | | | | 12.1 | | | | 14.0 | | | | 2.4 | |
Tammcorp, Inc. | | | 1.39 | | | | 1.44 | | | | 1.41 | | | | 17.6 | | | | 12.0 | | | | 14.0 | | | | 3.9 | |
** Last-twelve-months
The Price to Assets, Price to Deposits and Premium to Deposits ratios are based on the aggregate merger consideration, including the portion payable to the minority shareholders of Capaha Bank, assuming all of such shareholders exchange their shares of Capaha common stock for Tammcorp common stock immediately prior to the merger. The other ratios are also based on the aggregate merger consideration but exclude the portion payable to the minority shareholders of Capaha Bank who become shareholders of Tammcorp immediately prior to the merger pursuant to the share exchange transaction.
The median pricing multiples in the comparable transactions were in line with or lower than those in the merger except for the median price to LTM earnings due to much higher ROAA for Tammcorp than the median.
Contribution Analysis: Sheshunoff reviewed the relative contributions of Tammcorp and Southern Missouri to the combined company based on regulatory data as of September 30, 2016 for Tammcorp and Southern Missouri. Sheshunoff compared the pro forma ownership interests (which excludes the cash component of the merger) of Tammcorp and Southern Missouri of 4.4% and 95.6%, respectively, to: (1) total assets of 11.7% and 88.3%, respectively; (2) total loans of 11.5% and 88.5%, respectively; (3) total deposits of 12.4% and 87.6%, respectively; (4) net interest income of 12.7% and 87.3%, respectively; (5) non-interest income of 18.2% and 81.8%, respectively; (6) non-interest expenses of 16.3% and 83.7%, respectively; (7) September 30, 2016 LTM earnings of 8.5% and 91.5%, respectively; and (8) total tangible equity of 10.6% and 89.4%, respectively. The contribution analysis shows that the ownership of Tammcorp shareholders in the combined company is less than the contribution of the components listed (with the exception of earnings) due largely to the considerable amount of cash consideration in the merger. The contributions are shown in the following table.
($000) | | Assets | | | % | | | Loans | | | % | | | Deposits | | | % | |
Southern Missouri | | $ | 1,469,812 | | | | 88.3 | % | | $ | 1,203,772 | | | | 88.5 | % | | $ | 1,167,350 | | | | 87.6 | % |
Tammcorp | | $ | 193,843 | | | | 11.7 | % | | $ | 156,965 | | | | 11.5 | % | | $ | 165,414 | | | | 12.4 | % |
Combined Company | | $ | 1,663,655 | | | | 100.0 | % | | $ | 1,360,737 | | | | 100.0 | % | | $ | 1,332,764 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | LTM Net Interest Income | | | % | | | LTM Non-Interest Income | | | % | | | LTM Non-Interest Expenses | | | % | |
Southern Missouri | | $ | 47,822 | | | | 87.3 | % | | $ | 9,389 | | | | 81.8 | % | | $ | 33,545 | | | | 83.7 | % |
Tammcorp | | $ | 6,966 | | | | 12.7 | % | | $ | 2,084 | | | | 18.2 | % | | $ | 6,540 | | | | 16.3 | % |
Combined Company | | $ | 54,788 | | | | 100.0 | % | | $ | 11,473 | | | | 100.0 | % | | $ | 40,085 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Earnings | | | % | | | Shares | | | % | | | Common Tg. Equity | | | % | |
Southern Missouri | | $ | 14,887 | | | | 91.5 | % | | | 7,436,866 | | | | 95.6 | % | | $ | 121,239 | | | | 89.4 | % |
Tammcorp | | $ | 1,383 | | | | 8.5 | % | | | 340,537 | | | | 4.4 | %* | | $ | 14,315 | | | | 10.6 | % |
Combined Company | | $ | 16,270 | | | | 100.0 | % | | | 7,777,403 | | | | 100.0 | % | | $ | 135,554 | | | | 100.0 | % |
*Deal is only for 50% stock | | | | | |
Note: Financials as of September 30, 2016; LTM defined as last twelve months |
Pro Forma Financial Impact: Sheshunoff analyzed the pro forma impact of the merger on estimated earnings per share, book value per share and tangible book value per share for the twelve-month periods ending December 31, 2017 through 2021 (assumes a March 31, 2017 closing date) based on the projections provided by Tammcorp's management for Tammcorp on a stand-alone basis assuming pre-tax cost savings of $1.6 million phased in by 2019 (the end of the second year after completion of the transaction).
The analysis indicated pro forma consolidated earnings per share dilution of $9.27 per share or 4.0% in year one and accretion of $29.14 per share or 9.3% by year five compared to estimated earnings per share for Tammcorp on a stand-alone basis. The earnings accretion is greatly affected by the cash consideration to be received, so for comparative purposes on the earnings per share comparison, the merger was treated as an all-stock transaction. The implied book value (including the cash portion of the merger consideration) per share accretion in the merger was $232.04 per share or 9.4% in year one and the implied book value dilution was $335.88 per share or 9.5% by year five. Book value per share is significantly accretive on a stand-alone basis. Initial accretion diminishes because the analysis assumes no rate of return on the cash consideration. The analysis indicated pro forma dividends per share accretion of $5.12 per share or 34.9% in year one and accretion of $13.05 per share or 88.8% by year five compared to estimated dividends per share for Tammcorp on a stand-alone basis. The analysis of whether the merger consideration is accretive or dilutive to Tammcorp based on the above measures and the amounts of such accretion or dilution is sensitive to the composition of the merger consideration and the accounting assumptions to be made by Southern Missouri.
Comparable Company Analysis: Sheshunoff compared the operating and market results of Southern Missouri to the results of other publicly traded banking companies. The comparable publicly traded companies in the Midwest Region of the United States (as defined by SNL Financial) were selected primarily on the basis of location and total asset size. Southern Missouri was compared to banks with total assets between $1 billion and $5 billion that were headquartered in the Midwest Region of the United States (as defined by SNL Financial). The data for the following table is based on GAAP financial information as of September 30, 2016 provided by SNL Financial. Some of the ratios presented are proprietary to SNL Financial and may not strictly conform to the common industry determination.
| | Southern Missouri Bancorp, Inc. | | | Peer Group Median | |
| | (%) | | | (%) | |
Return on Average Assets | | | 1.09 | | | | 0.97 | |
Return on Average Equity | | | 12.05 | | | | 9.15 | |
Net Interest Margin | | | 3.79 | | | | 3.52 | |
Efficiency Ratio | | | 57.0 | | | | 63.0 | |
Tangible Equity to Tangible Assets | | | 8.30 | | | | 9.58 | |
Loan Loss Reserves to Loans | | | 1.19 | | | | 1.14 | |
Ratio of Non-performing Assets to Total Assets | | | 1.10 | | | | 0.93 | |
Risk Based Capital Ratio | | | 11.9 | | | | 13.8 | |
Southern Missouri's performance as measured by its return on average assets and return on average equity was higher than that of its peer group median level. Southern Missouri's net interest margin was stronger than its peers with its efficiency ratio also being stronger than its peers. Southern Missouri's tangible capital level was slightly lower to its peers, while its asset quality, as measured by its ratio of non-performing assets to total assets, was slightly weaker than the peer group median. Its ratio of loan loss reserves to loans was slightly higher than the median peer group level, while its Risk Based Capital Ratio was lower than the peer group median.
Sheshunoff compared Southern Missouri's trading results to the peer group. The results are summarized in the following table. The data for the following table is based on publicly available GAAP financial information and market data as of January 5, 2017 provided by SNL Financial.
| | Southern Missouri Bancorp, Inc. | | | Peer Group Median | |
| | | | | | |
Market Price as a Multiple of Stated Book Value | | | 1.98 | x | | | 1.51 | x |
Market Price as a Multiple of Stated Tangible Book Value | | | 2.10 | x | | | 1.75 | x |
Market Price as a Multiple of LTM Earnings | | | 17.1 | x | | | 17.4 | x |
Market Price as a Percent of Assets | | | 17.3 | % | | | 16.7 | % |
Dividend Yield | | | 1.61 | % | | | 1.94 | % |
Dividend Payout | | | 18.5 | % | | | 28.5 | % |
Southern Missouri's price-to-book multiples as measured by its market price as a multiple of stated book value and its market price as a multiple of stated tangible book value were higher than the comparable peer group medians. Southern Missouri's price-to-earnings multiple, as shown by the price as a multiple of LTM earnings through September 30, 2016, was slightly lower compared to its peers. Southern Missouri's market price to assets ratio was slightly higher than that of its peers. Southern Missouri's dividend yield and dividend payout ratio were both lower than its peers as of September 30, 2016.
Sheshunoff compared selected stock market results of Southern Missouri to the KBW Nasdaq Regional Bank index and the SNL Midwest U.S. Bank index for all publicly traded banks over the past three-month, one year and three-year period. Southern Missouri's common stock price generally performed above that of each index from
the beginning of January 2013. From November 2016 to January 2017, Southern Missouri's stock price has generally performed better than the SNL Midwest U.S. Bank index and the KBW Nasdaq Regional Bank index.
No company or transaction used in the comparable company and comparable transaction analysis is identical to Tammcorp, Southern Missouri, or Southern Missouri as the surviving corporation in the merger. Accordingly, an analysis of the results of the foregoing necessarily involves complex considerations and judgments concerning differences in financial and operational characteristics of Tammcorp and Southern Missouri and other factors that could affect the public trading value of the companies to which they are being compared. Mathematical analysis (such as determining the average or median) is not in and of itself a meaningful method of using comparable transaction data or comparable company data.
Pursuant to its engagement letter with Tammcorp, Sheshunoff will receive a fee of $25,000 for the fairness opinion that is not contingent on the closing of the merger and an additional fee contingent upon consummation of the merger equal to 1.25% of the aggregate merger consideration, reduced by the $25,000 fairness opinion fee and further reduced proportionately for any amount of the aggregate merger consideration that is withheld and deposited by Southern Missouri into escrow pending the resolution of certain of Capaha Bank's lending relationships. In addition, Tammcorp agreed to reimburse Sheshunoff for its reasonable out-of-pocket expenses. Tammcorp also agreed to indemnify and hold harmless Sheshunoff and its officers and employees against certain liabilities in connection with its services under the engagement letter, except for liabilities resulting from the negligence, violation of law or regulation, or bad faith of Sheshunoff or any matter for which Sheshunoff may have strict liability.
The fairness opinion is directed only to the question of whether the merger consideration is fair from a financial perspective to the shareholders of Tammcorp and does not constitute a recommendation to any Tammcorp shareholder to vote in favor of the merger agreement. No limitations were imposed on Sheshunoff regarding the scope of its investigation or otherwise by Tammcorp.
Based on the results of the various analyses described above, Sheshunoff concluded that the merger consideration to be paid by Southern Missouri pursuant to the merger agreement is fair to the shareholders of Tammcorp from a financial point of view.
Southern Missouri'sBancorp's Board of Directors Following Completion of the Merger
Following completion of the merger and the bank merger,mergers, the directors of Southern Missouri and Southern Bank will be the directors of Southern MissouriBancorp and Southern Bank immediately prior to the mergereffective time will constitute the boards of directors of Bancorp as the surviving corporation and Southern Bank as the bank merger, with the expected addition of John R. Abercrombie, current Chairman, President and Chief Executive Officer of Tammcorp and Capaha Bank.resulting institution, respectively.
Interests of
Tammcorp'sSM Bancshares' Directors and Executive Officers in the Merger
In considering the recommendation of the
TammcorpSM Bancshares board of directors to vote for the merger agreement proposal, you should be aware that the directors and officers of
TammcorpSM Bancshares have interests in the merger that are in addition to, or different from, their interests as shareholders of
Tammcorp.SM Bancshares. The board of
TammcorpSM Bancshares was aware of these interests and considered them in approving the merger agreement.
These interests include:Indemnification. Southern MissouriBancorp has agreed to indemnify the directors and officers of TammcorpSM Bancshares prior to the effective time of the merger for five years following the merger against all losses, claims, damages, costs, expenses (including reasonable attorneys' fees), liabilities or judgments or amounts that are paid in settlement (which settlement shall require the prior written consent of Southern Missouri,Bancorp, which consent shall not be unreasonably withheld) of or in connection with any claim, action, suit, proceeding, investigation or other legal proceeding, whether civil, criminal, administrative or investigative or investigation, in which an indemnified party is, or is threatened to be made, a party or witness or arising out of the fact that such person is or was a director or officer of TammcorpSM Bancshares if such claim pertains to any matter of fact arising, existing or occurring at or before the effective time of the merger to the fullest extent permitted under Tammcorp'sSM Bancshares' articles of incorporation and bylaws, to the extent permitted by applicable law.
Salary Continuation Agreements. Capaha Bank and several of its officers have previously entered into salary continuation agreements. The agreements provide for payments to the officers upon a change in control or termination of employment. Payments have been accrued and Southern MissouriAdditionally, Bancorp has agreed to make a change in control payments under the salary continuation agreements to John Abercrombie, Chairman, President and Chief Executive Officer of Tammcorp and Capaha Bank, Danny Essner, Executive Vice President of Capaha Bank, Kevin Essner, Senior Vice President of Capaha Bank, and Patricia Holley, Senior Vice President and Chief Financial Officer. The estimated aggregate payments under these agreements are $1.1 million, and, to the extent not previously accrued by Tammcorp and already reflected in its capital, will be deducted from Tammcorp's capital for purposes of calculating the merger consideration to be paid to all of Tammcorp's shareholders.
Non-Competition Agreements. Southern Missouri has entered into a non-competition agreement with Mr. Danny Essner, which will become effective as of the effective date of the merger. Mr. Essner has agreed to certain non-competition and non-solicitation obligations that will extend for a period of two years following the merger. In exchange for these agreements, Southern Missouri has agreed to pay Mr. Essner a lump sum amount equal to $162,000. This amount will be deducted from the aggregate merger consideration to be paid to all shareholders of Tammcorp in connection with the merger.
Southern Missouri has also entered into a non-competition agreement with Timothy Goodman, which will become effective as of the effective date of the merger. Mr. Goodman has agreed to certain non-competition and non-solicitation obligations that will extend for a period of one year following the merger.
Board Service. In connection with the merger, Southern Missouri has agreed to cause John Abercrombie to be appointed as a director of Southern Missouri at the effective time, with a term to expire at the 2019 annual meeting of Southern Missouri shareholders. It is expected that Mr. Abercrombie also will be appointed as a director of Southern Bank following the merger. Mr. Abercrombie will receive compensation similar to that paid to the other non-employee directors of Southern Missouri and Southern Bank.
Retention Bonuses
A retention bonus pool, not to exceed $500,000, has been set up by Tammcorp in connection with the merger agreement for the purpose of retaining certain employees of Capaha Bankpurchase prior to and following the effective time of the merger. Executivemerger a five-year "tail" policy under its current directors' and officers' liability and insurance policy, which will provide insurance coverage post-merger for the officers and directors of Capaha Bank may be included in the list of employees eligible for such bonuses. The after-tax cost of the bonuses to be paid under this arrangement will be deducted from Tammcorp's capital in determining the merger consideration.SM Bancshares and SMB.
Each of Southern MissouriBancorp and TammcorpSM Bancshares has agreed to cooperate with the other and use commercially reasonable best efforts to obtain all regulatory approvals required to complete the transactions contemplated by the merger agreement, including the merger and the bank merger. These include approvals from the Federal Reserve Board and the Missouri Division and the Illinois Department.Division. The U.S. Department of Justice may also review the impact of the merger and the bank merger on competition.
As of the date of this proxy statement/prospectus, all applications and notices necessary to obtain all required regulatory approvals have been filed. There can be no assurance as to whether all required regulatory approvals will be obtained or the dates of the approvals. There also can be no assurance that the regulatory approvals received will not contain a condition or requirement that results in a failure to satisfy the conditions to closing set forth in the merger agreement. See "The Merger Agreement—Conditions to Complete the Merger."
In accordance with current accounting guidance, the
mergermergers will be accounted for using the acquisition method of accounting in accordance with FASB Topic 805, "Business Combinations." The result of this is that the assets and liabilities of
Southern MissouriBancorp will be carried forward at their recorded amounts, the historical operating results will be unchanged for the prior periods being reported on and the assets and liabilities of
TammcorpSM Bancshares will be
adjusted to fair value at the date of the merger.mergers. In addition, all identified intangibles will be recorded at fair value and included as part of the net assets acquired. To the extent that the purchase price, consisting of cash plus the number of shares of Southern MissouriBancorp common stock to be issued to former TammcorpSM Bancshares shareholders, at fair value, exceeds the fair value of the net assets, including identifiable intangibles, of TammcorpSM Bancshares at the merger date of the mergers, that amount will be reported as goodwill. In accordance with current accounting guidance, goodwill will not be amortized but will be evaluated for impairment annually. Identified intangibles will be amortized over their estimated lives. Further, the acquisition method of accounting results in the operating results of TammcorpSM Bancshares being included in the operating results of Southern MissouriBancorp beginning from the date of completion of the merger.mergers.
Dissenters' Rights of
TammcorpSM Bancshares Shareholders
General. Under Illinois law, as a holderSection 351.455 of Tammcorp common stock and/or Class A preferred stock, youMGBCL, SM Bancshares shareholders who do not vote in favor of the merger agreement proposal and who follow the procedures summarized below will have the right to dissent from the merger and be paidobtain payment in cash of the fair value of yourtheir shares of TammcorpSM Bancshares common stock, as of the day prior to the date of the SM Bancshares' special meeting, in cash.the event of the consummation of the merger. However, SM Bancshares may elect to terminate the merger agreement if holders of 5% or more of SM Bancshares outstanding common stock exercise dissenters' rights. No holder of SM Bancshares common stock dissenting from the merger will be entitled to the merger consideration or any dividends or other distributions unless and until the holder fails to perfect or effectively withdraws or loses his or her right to dissent from the merger agreement. If you are contemplating exercising your right to dissent, we urge you to read carefully the provisions of Sections 11.65 and 11.70Section 351.455 of the IBCA,MGBCL, which are attached to this proxy statement/prospectus as Appendix B, and consult with your legal counsel before exercising or attempting to exercise these rights. The following discussion describes the steps you must take if you want toHolders of SM Bancshares common stock receiving cash upon exercise your right to dissent.of dissenters' rights may recognize gain for federal income tax purposes. See "Federal Income Tax Consequences" on page 47.
ANY SHAREHOLDER WHO WISHES TO EXERCISE DISSENTERS' RIGHTS OR WHO WISHES TO PRESERVE HIS OR HER RIGHT TO DO SO SHOULD REVIEW APPENDIX B CAREFULLY AND CONSULT HIS OR HER LEGAL ADVISOR. FAILURE TO TIMELY AND PROPERLY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.
How
A SM Bancshares shareholder may assert dissenters' rights only by complying with all of the following requirements:
(1) The shareholder must deliver to Exercise and Perfect Your Right to Dissent. To exercise your right to dissent from the merger, you must:
· | prior to the special meeting, provide Tammcorp with a written demand for payment for your shares; and |
· | not vote your shares of Tammcorp stock in favor of the merger agreement. |
If you intend to dissent from the Merger, you should send your written demand to:
Tammcorp, Inc.
145 Russell Avenue
Tamms, Illinois 62988
Attention: President and Secretary
If you vote your shares of Tammcorp stock, either by proxySM Bancshares prior to the special meeting or in person at the special meeting a written objection to the merger agreement. The written objection should be delivered or mailed in favortime to arrive before the vote is taken on the merger agreement proposal at the special meeting to Southern Missouri Bancshares, Inc., 1292 Banning Street, Marshfield, MO 65706, Attention: Corporate Secretary. The written objection must be made in addition to, and separate from, any proxy or other vote against adoption of the merger agreement youproposal. Neither a vote against, a failure to vote for, nor an abstention from voting will lose yoursatisfy the requirement that a written objection be delivered to SM Bancshares before the vote on the merger agreement proposal is taken. Unless a shareholder files the written objection as provided above, he or she will not have any dissenters' rights of appraisal.
(2) The shareholder must not vote in favor of adoption of the merger agreement. The return of a signed proxy which does not specify a vote against the merger agreement proposal or a direction to abstain will constitute a waiver of the shareholder's right to dissent from the merger. Within tendissent.
(3) The shareholder must deliver to Bancorp within twenty days after which the date on whicheffective time of the merger is effective or 30 days after you deliver written demand for payment to Tammcorp, whichever is later, Southern Missouri will send you a statement setting forth its opinion as to the estimated fair value of your shares, Tammcorp's latest fiscal year-end balance sheet, a statement of income for that year and the latest available interim financial statements and a commitment to pay for your shares at the estimated fair value thereof upon your transmittal to Southern Missouri of the certificate(s) representing your Tammcorp stock.
Your Estimate of the Fair Value of Your Tammcorp Shares and Demand for Payment. If you disagree with the opinion of Southern Missouri as to the estimated fair value of your shares of Tammcorp stock or the amount of interest due, you must, within 30 days of the date the notice was delivered or mailed to you, send Southern Missouri a written estimate of the fair value of your shares of Tammcorp stock, including the estimated fair value and amount of interest due and demand payment for the difference between your estimate of fair value and interest due and the amount paid by Southern Missouri.
Your written estimate and any other notice addressed to Southern Missouri must be sent to:
Southern Missouri Bancorp, Inc.
2991 Oak Grove Road
Poplar Bluff, Missouri 63901
Attention: Secretary
In estimating the fair value of your shares, you should refer to the definition of "fair value" in Section 11.70(j) of the IBCA, a copy of which is included in Appendix B, attached hereto.
Southern Missouri's Actions upon Receipt of Your Demand for Payment. If, within 60 days from delivery to Southern Missouri of the notification of your estimate of fair value of the shares and interest due, Southern Missouri and you have not agreed in writing upon the fair value of the shares and interest due, Southern Missouri must either pay you the difference in value demanded by you, with interest, or file a petition in the circuit court of Tamms County, Illinois, requesting the court to determine the fair value of the shares and interest due. Southern Missouri will make all dissenters, whether or not residents of Illinois, whose demands remain unsettled parties to the proceeding as an action against their shares and all parties will be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law. Failure of Southern Missouri to commence an action pursuant to Section 11.70(f) of the IBCA will not limit or affect the right of the dissenting shareholders to otherwise commence an action as permitted by law.
Commencement of Legal Proceedings if a Demand for Payment Remains Unsettled. The court will determine if you have complied with applicable dissenters' rights provisions and if you have become entitled to a valuation of and payment for your shares of Tammcorp stock. Each dissenter made a party to the proceeding is entitled to judgment for the amount, if any, by which the court finds that the fair value of his or her shares, plus interest, exceeds the amount paid by Southern Missouri. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The court will determine all costs of the proceeding, including the reasonable compensation and expenses of the appraisers, if any, appointed by the court, but will exclude the fees and expenses of counsel and experts for the respective parties.
If the fair value of your shares as determined by the court materially exceeds the amount which Southern Missouri estimated to be the fair value of the shares, then all or any part of the costs may be assessed against Southern Missouri. If the amount which you estimated to be the fair value of your shares materially exceeds the fair value of the shares as determined by the court, then all or any part of the costs may be assessed againstyou. The court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable.
Rights as a Shareholder. If you have made a written demand for payment of the fair value of yourhis or her shares of TammcorpSM Bancshares common stock you retainas of the day prior to the date on which the vote for the merger agreement proposal was taken. That demand must include a statement of the number of shares of SM Bancshares common stock owned.
The demand must be mailed or delivered to Southern Missouri Bancorp, Inc. at 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, Attn: Greg A. Steffens, President and Chief Executive Officer. Any shareholder who fails to make a written demand for payment within the twenty-day period after the effective time will be conclusively presumed to have consented to the merger agreement and will be bound by the terms thereof. Neither a vote against the merger agreement nor the written objection referred to in clause (1) above satisfies the written demand requirement referred to in this clause (3).
A beneficial owner of shares of SM Bancshares common stock who is not the record owner may not assert dissenters' rights. If the shares of SM Bancshares common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, or by a nominee, the written demand asserting dissenters' rights must be executed by the fiduciary or nominee. If the shares of SM Bancshares common stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be executed by all other rightsjoint owners. An authorized agent, including an agent for two or more joint owners, may execute the demand for a shareholder of record; however, the agent must identify the record owner and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner.
If within thirty days of the effective time the value of a dissenting shareholder's shares of SM Bancshares common stock is agreed upon between the shareholder until those rights are cancelledand Bancorp, Bancorp will make payment to the shareholder within ninety days of the effective time, upon the shareholder's surrender of his or modifiedher SM Bancshares common stock certificates. Upon payment of the agreed value, the dissenting shareholder will cease to have any interest in such shares or in Bancorp.
If the dissenting shareholder and Bancorp do not agree on the fair value of the shares within thirty days after the effective time, the dissenting shareholder may, within sixty days after the expiration of the thirty days, file a petition in any court of competent jurisdiction within Butler County, Missouri asking for a finding and a determination of the fair value of the shares. The dissenting shareholder is entitled to judgment against Bancorp for the amount of the fair value as of the day prior to the date on which such vote was taken adopting the merger agreement, together with interest thereon to the date of judgment. The judgment is payable only upon and simultaneously with the surrender to the Bancorp of the SM Bancshares common stock certificates representing said shares. Upon payment of the judgment, the dissenting shareholder shall cease to have any interest in such shares or in Bancorp. Unless the dissenting shareholder files a petition within the allotted time frame, the shareholder and all persons claiming under the shareholder will be conclusively presumed to have adopted and ratified the merger agreement, and will be bound by the consummationterms thereof.
The right of a dissenting shareholder to be paid the fair value for his or her shares will cease if the shareholder fails to comply with the procedures of Section 351.455 or if the merger agreement is terminated for any reason.
It is a condition to the completion of the merger.merger that the holders of less than 5% of SM Bancshares' outstanding common stock exercise dissenters' rights.
THE PROCESSPRECEDING IS QUALIFIED IN ITS ENTIRETY BY THE TEXT OF EXERCISING DISSENTERS' RIGHTS REQUIRES STRICT COMPLIANCE WITH TECHNICAL REQUIREMENTS. THOSE INDIVIDUALS OR ENTITIES WISHING TO DISSENT FROM THE MERGER SHOULD CONSULT WITH THEIR OWN LEGAL COUNSEL IN CONNECTION WITH COMPLIANCE UNDER THE IBCA.APPRAISAL PROVISIONS OF SECTION 351.455. A COPY OF THAT STATUTE IS ATTACHED HERETO AS APPENDIX B AND IS INCORPORATED HEREIN BY REFERENCE. TO THE EXTENT THERE ARE ANY INCONSISTENCIES BETWEEN THE FOREGOING SUMMARY AND THE APPLICABLE PROVISIONS OF THE IBCA,MGBCL, THE IBCAMGBCL WILL CONTROL.
Southern Missouri's
Bancorp's Dividend Policy
The holders of Southern MissouriBancorp common stock receive cash dividends if and when declared by the Southern MissouriBancorp board of directors out of legally available funds. The timing and amount of cash dividends depends on Southern Missouri'sBancorp's earnings, capital requirements, financial condition, cash on hand and other relevant factors. Southern MissouriBancorp also has the ability to receive dividends or capital distributions from its bank subsidiary, Southern Bank. There are regulatory restrictions on the ability of Southern Bank to pay dividends. As a bank holding company, Southern Missouri'sBancorp's ability to pay dividends is subject to the guidelines of the Federal Reserve Board regarding capital adequacy and dividends and
limitations under Missouri law. Southern MissouriBancorp currently pays a quarterly cash dividend of $0.10$0.11 per share on its outstanding common stock. No assurances can be given that
cash dividends will not be reduced or eliminated in future periods. For additional information, see "Comparative Market Prices and Dividends on Common Stock."
Southern Missouri'sBancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC." The shares of Southern MissouriBancorp common stock issuable in the merger for shares of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock will be listed on NASDAQ. Neither Tammcorp'sSM Bancshares' common stock nor Tammcorp's Class A preferred stock is not listed on an exchange or quoted on any automated services, and there is no established trading market for shares of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock.
The following describes certain aspects of the merger,mergers, including certain material provisions of the merger agreement. The following description of the merger agreement is subject to, and qualified in its entirety by reference to, the merger agreement, which is attached to this proxy statement/prospectus as Appendix A and is incorporated by reference into this proxy statement/prospectus. We urge you to read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.
The merger agreement provides for the merger of TammcorpSM Bancshares with and into Southern Missouri,Merger Sub, a wholly owned subsidiary of Bancorp, with Southern Missouri continuingSM Bancshares as the surviving corporation ofentity after the merger. FollowingAs a result of this merger, each outstanding share of SM Bancshares common stock (other than dissenting and treasury shares) will be converted into the completion ofright to receive the merger Tammcorp's 91% owned subsidiary bank, Capaha Bank,consideration described below. Immediately following the merger, SM Bancshares will merge with and into Southern Missouri'sBancorp with Bancorp as the surviving entity and SM Bancshares' wholly owned bank subsidiary, SMB, will merge with and into Bancorp's wholly owned bank subsidiary, Southern Bank, with Southern Bank continuing as the surviving institution inentity after the bank merger. As a result of the mergers, SM Bancshares and SMB will cease to exist as separate entities.
If the merger is completed, Tammcorp shareholdersholders of SM Bancshares common stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times Tammcorp'sSM Bancshares' consolidated equity capital as of the last business day of the month immediately preceding the month in which the merger closing occurs, adjusted for certain of Tammcorp'sSM Bancshares' transaction expenses, minus (2) $162,000, which represents the amount to be paid by Southern Missouri pursuant to a non-competition agreement with an executive officer of Tammcorp that will become effective upon completionexcess, if any, of the merger. One-halfcost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000. Twenty-five percent (25%) of the merger consideration will be paid in cash and one-halfseventy-five percent (75%) will be paid in shares of Southern MissouriBancorp common stock.
At the effective time of the merger, each share of TammcorpSM Bancshares common stock and each share of Tammcorp Class A preferred stock (on an assumed as-converted basis to shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation) that is issued and outstanding immediately prior to the completion of the merger, excluding shares of TammcorpSM Bancshares common stock and Class A preferred stock that are owned by TammcorpSM Bancshares or Southern MissouriBancorp (other than shares held in a fiduciary or agency capacity for third parties and other than shares held in respect of a debt previously contracted) and shares with respect to which dissenters' rights have been perfected, will be converted into the right to receive the following:
· | a cash amount, which we refer to as the "per share cash consideration," equal to the quotient of (1) 50%25% of the aggregate merger consideration divided by (2) the sum of (A) the number of shares of TammcorpSM Bancshares common stock that will be issued and outstanding immediately prior to the closing of the merger assuming all of the minority shareholders of Capaha Bank exchange their shares of Capaha Bank common stock for shares of Tammcorp common stock immediately prior to the merger pursuant to the exchange transaction described below and (B) the aggregate number of shares of Tammcorp common stock into which the outstanding shares of Tammcorp Class A preferred stock are convertible pursuant to Tammcorp's articles of incorporation;merger; and |
· | a number of shares of Southern MissouriBancorp common stock, which we refer to as the "per share stock consideration" equal to the quotient ofthree times the per share cash consideration divided by $31.80, the average closing price of Southern MissouriBancorp common stock for the 20 trading day period ending on and including the fifth trading day before the day of completionpreceding August 17, 2017 (the date of the merger agreement), which we refer to as the "average Southern MissouriBancorp common stock price." |
As discussed under "—Conversion of Shares; Exchange Procedures-Portion of Cash Consideration to Be Held in Escrow," a portion of the cash merger consideration, withheld from the per share cash consideration on a pro rata basis, will be deposited into escrow at closing pending the resolution of certain of Capaha Bank's lending relationships, with the escrowed funds first being used to cover any losses incurred by Southern Missouri on the related loans and any remaining funds then being disbursed to Tammcorp shareholders as a second installment of the per share cash consideration.
The number of shares of Southern MissouriBancorp common stock issuable as the per share stock consideration will fluctuate with the market price of Southern MissouriBancorp common stock and will not be known at the time TammcorpSM Bancshares shareholders vote on the merger agreement. Southern MissouriBancorp will not issue any fractional shares of Southern MissouriBancorp common stock in the merger. TammcorpSM Bancshares shareholders who would otherwise be entitled to a fractional share of Southern MissouriBancorp common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $31.80,the average Southern MissouriBancorp common stock price.
As of March 31, 2017, Tammcorp's consolidated equity capital, as adjusted for its estimated transaction expenses, was $16.1 million. Based on this amount, if the merger were to be completed in April 2017, the aggregate merger consideration would be $22.4 million (($16.1 million x 1.4) - $162,000). Using the number of shares of Tammcorp common stock and Tammcorp Class A preferred stock currently outstanding, and assuming that all of the minority shareholders of Capaha Bank exchange their shares of Capaha Bank common stock for shares of Tammcorp common stock immediately prior to the merger, the per share cash consideration would be $1,634.34. In this case, if the average Southern Missouri common stock price were $33.76, which was the closing price of Southern Missouri common stock on January 11, 2017 immediately prior to the public announcement of the merger agreement, the per share stock consideration would consist of 48.4105 shares of Southern Missouri common stock, and if the average Southern Missouri common stock price were $____, which was the closing price of Southern Missouri common stock on ___, 2017, the most recent trading day practicable before the printing of this proxy statement/prospectus, the per share stock consideration would consist of ___ shares of Southern Missouri common stock.
Under the above scenario, if you held 100 shares of Tammcorp common stock immediately prior to the merger or a number of shares of Tammcorp Class A preferred stock that were convertible into 100 shares of Tammcorp common stock immediately prior to the merger, you would receive $163,434 in cash ($1,634.34 x 100) and either 4,841 shares of Southern Missouri common stock (48.4105 x 100) plus $1.69 in cash in lieu of a fraction of a Southern Missouri share (0.05 x $33.76), if the average Southern Missouri common stock price were $33.76, or ____ shares of Southern Missouri common stock (0.__ x 1,000) plus $___ in cash in lieu of a fraction of a Southern Missouri share (0.___ x $___), if the average Southern Missouri common stock price were $___
Closing and Effective Time of the Merger
The merger will be completed only if all conditions to the consummation of the merger set forth in the merger agreement are either satisfied or waived. See "—Conditions to Complete the Merger." The closing of the
merger will occur on a date mutually agreed upon by the parties which will coordinate with the date scheduled with Southern Missouri'sBancorp's data processor for the conversion of Tammcorp'sSM Bancshares' data (but not earlier than five business days) after the satisfaction or waiver of all conditions to completion of the merger (other than those that by their nature are to be satisfied or waived at the closing of the merger), subject to extension by mutual agreement of the parties. It currently is anticipated that the closing of the merger will occur in the secondfirst quarter of 2017,2018, subject to the receipt of regulatory approvals and other closing conditions.
The merger will become effective as set forth in the articles of merger to be filed with the Secretary of State of the State of Missouri and the Secretary of State of the State of Illinois.Missouri.
No assurances can be given as to when or if the merger will be completed.
Conversion of Shares; Exchange Procedures
The conversion of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock into the right to receive the merger consideration will occur automatically at the effective time of the merger. Prior to the effective time of the merger, Southern MissouriBancorp will appoint its transfer agent or an unrelated bank or trust company reasonably acceptable to TammcorpSM Bancshares to act as exchange agent for the exchange of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock for the merger consideration.
Within five days after completion of the merger, the exchange agent will mail to each holder of record of a certificate previously representing shares of TammcorpSM Bancshares common stock or Class A preferred stock that have been converted into the right to receive the merger consideration: (1) a letter of transmittal and (2) instructions for surrendering certificates in exchange for the merger consideration, any cash in lieu of a fractional share of Southern MissouriBancorp common stock and any dividends or distributions to which such holder is entitled. Conforming procedures will be used for any shares of TammcorpSM Bancshares common stock and Class A preferred stock held in book-entry form.
If a certificate for shares of TammcorpSM Bancshares common stock or Class A preferred stock has been lost, stolen or destroyed, the exchange agent will issue the merger consideration payable in respect of those shares upon (1) receipt of an affidavit of that fact by the claimant and (2) if required by Southern MissouriBancorp or the exchange agent, the posting by the claimant of a bond in an amount Southern MissouriBancorp or the exchange agent reasonably determines is necessary as indemnity against any claim that may be made against it with respect to such certificate.
After completion of the merger, there will be no further transfers on the stock transfer books of TammcorpSM Bancshares of shares of TammcorpSM Bancshares common stock or Class A preferred stock that were issued and outstanding immediately prior to the effective time of the merger other than to settle transfers that occurred prior to the effective time.
Tax Withholding
Southern MissouriBancorp or the exchange agent will be entitled to deduct and withhold from any cash consideration payable under the merger agreement to any holder of TammcorpSM Bancshares common stock or Class A preferred stock the amounts it is required to deduct and withhold under the Code or any provision of state, local or foreign tax law. If any such amounts are withheld and paid over to the appropriate governmental authority, these amounts will be treated for all purposes of the merger agreement as having been paid to the persons from whom they were withheld.
No Portion of Cash Consideration Expected to be Held in Escrow
The merger agreement provides that a portion of the cash merger consideration equal to any unpaid balance of principal and accrued interest with respect to certain of Capaha Bank's lending relationships, net of amounts charged off by Capaha Bank prior to the merger or held by Capaha Bank as special or designated loan loss reserves at the time of the merger, will be withheld by Southern Missouri from the per share cash consideration on a pro rata basis and deposited into escrow with Southern Bank. The escrowed amount, if any, will be disbursed following the final resolution of the loans, first to Southern Missouri in the amount of any losses incurred by it on the loans plus all income attributable to that portion of the escrowed funds, with any remaining escrowed funds then being disbursed to Tammcorp shareholders as a second installment of the per share cash consideration. Based on the current resolution status of the loans, it is not expected that any portion of the cash merger consideration will be held in escrow following the merger.
Dividends and Distributions
No dividends or other distributions declared with respect to Southern MissouriBancorp common stock will be paid to the holder of any unsurrendered shares of TammcorpSM Bancshares common stock or Class A preferred stock until the holder surrenders such shares in accordance with the merger agreement. After the surrender of such shares in accordance with the merger agreement, the record holder thereof will be entitled to receive any such dividends or other distributions with a record date after the effective time of the merger, without any interest, which had previously become payable with respect to the whole shares of Southern MissouriBancorp common stock which the shares of TammcorpSM Bancshares common stock or Class A preferred stock have been converted into the right to receive under the merger agreement.
Representations and Warranties
The representations and warranties described below and included in the merger agreement were made only for purposes of the merger agreement and as of specific dates, may be subject to limitations, qualifications or exceptions agreed upon by the parties, including those included in confidential disclosures made for the purposes of, among other things, allocating contractual risk between Southern MissouriBancorp and TammcorpSM Bancshares rather than establishing matters as facts, and may be subject to standards of materiality that differ from those standards relevant to TammcorpSM Bancshares shareholders. You should not rely on the representations, warranties, or any description thereof as characterizations of the actual state of facts or condition of Southern Missouri, TammcorpBancorp, SM Bancshares or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in public disclosures by Southern MissouriBancorp that are incorporated by reference into this proxy statement/prospectus. The representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this proxy statement/prospectus and in the documents incorporated by reference into this proxy statement/prospectus. See "Where You Can Find More Information."
The merger agreement contains customary representations and warranties of each of Southern MissouriBancorp and TammcorpSM Bancshares relating to their respective businesses. The representations and warranties in the merger agreement do not survive completion of the merger.
The representations and warranties made by each of TammcorpSM Bancshares and Southern MissouriBancorp in the merger agreement relate to a number of matters, including the following:
· | due organization and qualification; |
· | authority relative to execution and delivery of the merger agreement and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger or bank merger; |
· | required governmental and other regulatory filings, consents and approvals in connection with the merger and the bank merger; |
· | financial statements and the absence of certain changes or events; |
· | in the case of Southern Missouri,Bancorp, SEC reports; |
· | reports to regulatory authorities and absence of agreements with regulatory authorities; |
· | compliance with applicable laws; |
· | in the case of Tammcorp,SM Bancshares, certain contracts; |
· | in the case of Tammcorp,SM Bancshares, no broker's fees payable in connection with the merger; |
· | employee benefit matters and labor matters; |
· | the accuracy of information supplied for inclusion in this proxy statement/prospectus and other documents; |
· | inapplicability of takeover statutes; |
· | risk management instruments; |
· | the accuracy of corporate record books; |
· | in the case of SM Bancshares, insurance matters; |
· | accounting and internal controls; |
· | in the case of Southern Missouri,Bancorp, the availability of sources of capital and authorized shares of common stock sufficient to pay the merger consideration; |
· | loan matters and allowance for loan losses; |
· | related party transactions; |
· | absence of actions or circumstances that would prevent the merger or the bank merger from qualifying as a "reorganization" under Section 368(a) of the Code; |
· | in the case of Tammcorp, receipt of a fairness opinion from its financial advisor and the absence of any amendment or rescission thereof; |
· | the proper administration of fiduciary accounts; |
· | in the case of Tammcorp,SM Bancshares, the absence of an action or a failure to act by any present or former director, officer, employee or agent of TammcorpSM Bancshares or any of its subsidiaries that would give rise to a claim for indemnification by such individual; and |
· | no representation or warranty is misleading. |
Southern MissouriBancorp also has represented to TammcorpSM Bancshares that Southern MissouriBancorp does not own any TammcorpSM Bancshares stock other than shares of TammcorpSM Bancshares common stock held in trust accounts, managed or similar accounts or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties.
Certain representations and warranties of Southern MissouriBancorp and TammcorpSM Bancshares are qualified as to "materiality" or "material adverse effect." For purposes of the merger agreement, a "material adverse effect," when used in reference to either Southern Missouri, TammcorpBancorp, SM Bancshares or the combined company following the merger, means:
(1) | a material adverse effect on the business, properties, results of operations or financial condition of such party and its subsidiaries taken as a whole (provided that a material adverse effect will not be deemed to include the impact of (A) changes, after the date of the merger agreement, in GAAP or applicable regulatory accounting requirements, (B) changes, after the date of the merger agreement, in laws, rules or regulations of general applicability to companies in the industries in which such party and its |
| subsidiaries operate, or interpretations thereof by courts or governmental entities, (C) changes, after the date of the merger agreement, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally, (D) public disclosure of the transactions contemplated by the merger agreement or actions or inactions expressly required by the merger agreement or that are taken with the prior written consent of the other party in contemplation of the transactions contemplated by the merger agreement, or (E) a decline in the trading price of a party's common stock or the failure, in and of itself, of a party to meet earnings projections, but not, in either case, including the underlying causes thereof; except, with respect to subclauses (A), (B), or (C), to the extent that the effects of such change are materially disproportionately adverse to the business, properties, assets, liabilities, results of operations or financial condition of such party and its subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its subsidiaries operate); or |
(2) | a material adverse effect on the ability of such party or its financial institution subsidiary to timely consummate the transactions contemplated by the merger agreement. |
Conduct of Businesses Prior to the Completion of the Merger
Pursuant to the merger agreement, each of TammcorpSM Bancshares and Southern MissouriBancorp has agreed to certain restrictions on its activities until the merger is completed or terminated. In general, each party has agreed that, except as otherwise permitted by the merger agreement, or as required by applicable law or a governmental entity or with the prior written consent of the other party, it will, and will cause each of its subsidiaries to:
· | use reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships and not take any action reasonably likely to impair its ability to perform any of its obligations under the merger agreement; and |
· | not take any action that would, or is reasonably likely to, cause the merger or the bank merger to fail to qualify as a reorganization under Section 368(a) of the Code and not knowingly take any action that is intended or is reasonably likely to result in any of the conditions to the completion of the merger not being satisfied or a material violation of any provision of the merger agreement; |
Southern MissouriBancorp has also agreed that it will not pay or declare any extraordinary dividends (other than dividends from Southern Bank to Southern Missouri)Bancorp), and it will not and will not permit any of its subsidiaries to amend its articles of incorporation or bylaws or other governing documents in a manner that would materially and adversely affect the benefits of the merger to the holders of TammcorpSM Bancshares common stock or Class A preferred stock. Southern MissouriBancorp will, however, reserve a sufficient number of shares of its common stock to pay the stock portion of the merger consideration, and will use its best efforts to cause the shares of Southern MissouriBancorp common stock to be issued in the merger to be authorized for listing on NASDAQ. In addition, Southern MissouriBancorp has agreed that it will not enter into any agreement, arrangement or understanding with respect to a merger, acquisition, consolidation, share exchange or similar business combination involving Southern MissouriBancorp and/or a subsidiary of Southern Missouri,Bancorp, where the effect of such agreement, arrangement or understanding, or the consummation of the transactions contemplated thereby, would be reasonably likely to or does result in the termination of the merger agreement, materially delay or jeopardize the receipt of any required regulatory approval for the merger or bank merger or the filing of any regulatory application, or cause the anticipated tax treatment of the merger or the bank merger to be unavailable; however, this provision does not prohibit any transaction that by its terms contemplates the consummation of the merger in accordance with the merger agreement and which treats holders of TammcorpSM Bancshares common stock, upon completion of the merger and their receipt of Southern MissouriBancorp common stock, in the same manner as the holders of Southern MissouriBancorp common stock.
TammcorpSM Bancshares has also agreed that it will, and will cause each of its subsidiaries to, conduct its business in the ordinary and usual course. TammcorpSM Bancshares has further agreed that it will not, and will not permit any of its subsidiaries to, do any of the following without the prior written consent of Southern Missouri:Bancorp:
· | issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of TammcorpSM Bancshares common stock or rights to acquire stock or permit any additional shares of TammcorpSM Bancshares common stock to become subject to grants of employee or director stock options, other rights or similar stock-based employee rights other than shares of Tammcorp common stock to be issued in connection with the exchange offer to Capaha Bank minority shareholders or the conversion of any shares of Tammcorp Class A preferred stock into shares of Tammcorp common stock in accordance with Tammcorp's articles of incorporation;rights; |
· | except as specified in the disclosure schedules to the merger agreement, pay or declare any dividends or other distributions on TammcorpSM Bancshares common stock or Class A preferred stock; |
· | adjust, split, combine, redeem, reclassify, purchase or otherwise acquire any shares of Tammcorp'sSM Bancshares' capital stock, other ownership interests or rights to acquire stock; |
· | enter into, modify, renew, or terminate any employment, severance or similar agreement or arrangement with any director, officer, employee or independent contractor, or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments) other than (A) normal increases in compensation to employees and (B) individual cash bonuses in accordance with past practice; and (C) a retention bonus pool not to exceed $500,000 in the aggregate for purposes of retaining certain individuals prior to and after the merger; |
· | except as required by law or to satisfy a previously disclosed contractual obligation existing as of the date of the merger agreement, establish, modify or terminate any employee benefit plan or take action to accelerate the vesting of benefits under any employee benefit plan; |
· | sell, transfer, lease, encumber or otherwise dispose of or discontinue any of its assets, deposits, business or properties or intellectual property, except in the ordinary course of business consistent with past practice in a transaction that is not material to TammcorpSM Bancshares and its subsidiaries taken as a whole; |
· | acquire the assets, business, deposits or properties of any other entity, other than pursuant to foreclosure or acquisition of control in a fiduciary capacity or in satisfaction of debts previously contracted in each case in the ordinary and usual course of business consistent with past practice; |
· | except as specified in the disclosure schedules to the merger agreement, sell or acquire any loans (excluding residential mortgage loans originated for resale in the ordinary course of business), loan participations (excluding sales of participations that have been offered to Southern MissouriBancorp on Tammcorp'sSM Bancshares' standard terms and that Southern MissouriBancorp has declined to purchase) or servicing rights; |
· | amend its governing documents; |
· | implement or adopt any change in its accounting principles, practices or methods, except as may be required by accounting principles generally accepted in the United States or regulatory accounting principles; |
· | enter into, materially modify or terminate any material contract, other than in the ordinary course of business consistent with past practice; |
· | except in the ordinary course of business consistent with past practice, settle any claim, action or proceeding, except for any claim, action or proceeding that does not involve precedent for other material claims, actions or proceedings and that involve solely money damages in an amount, individually or in the aggregate for all such settlements, that is not material to TammcorpSM Bancshares and its subsidiaries taken as a whole; |
· | foreclose upon any real property without obtaining a phase one environmental report, except for one- to four-family non-agricultural residential properties of five acres or less which TammcorpSM Bancshares does not have reason to believe might be in violation of or require remediation under environmental laws; |
· | in the case of Capaha Bank,SMB, (i) voluntarily make a material change in its deposit mix; (ii) increase or decrease the interest rate paid on its time deposits or certificates of deposit except in a manner consistent with past practice and competitive factors in the marketplace; (iii) incur any material liability or obligation |
| relating to retail banking and branch merchandising, marketing and advertising activities and initiatives except in the ordinary course of business consistent with past practice; (iv) open any new branch of deposit taking facility; or (v) close or relocate any existing branch or other facility; |
· | acquire any investment securities outside of the limits specified in the merger agreement; |
· | except as specified in the disclosure schedules to the merger agreement or for emergency repairs or replacements, make capital expenditures outside the limits and commitments and exceptions specifiedother than in the merger agreement;ordinary course of business consistent with past practices; |
· | materially change its loan underwriting policies or make loans or extensions of credit in excess of amounts specified in the merger agreement; |
· | invest in any new or existing joint venture, partnership or similar activity or any new real estate development or construction activity, other than by way of foreclosures or acquisitions of control in a fiduciary capacity or in satisfaction of debts previously contracted, in each case in the ordinary and usual course of business consistent with past practice ;practice; |
· | materially change its interest rate and other risk management policies and practices; |
· | except as specified in the disclosure schedules to the merger agreement, incur any debt for borrowed funds other than advances, repurchase agreements and other borrowing from the Federal Home Loan Bank of Chicago and the Federal Reserve Bank of St. Louis in the ordinary course of business with a term of one year or less, or incur, assume, guarantee or otherwise become subject to any obligations or liabilities of any other person, other than in the ordinary course of business and subject to the restrictions set forth in the merger agreement; |
· | enter into, modify or renew any lease or license other than in the ordinary course of business consistent with past practice and involving an amount in excess of the limit in the merger agreement, |
· | permit the lapse of any intellectual property rights; |
· | create any lien on any of its assets or properties, other than the pledge of assets to secure public deposits and in connection with securing advances, repurchase agreements and other borrowings in the ordinary course of business; |
· | make charitable contributions in excess of limits specified in the merger agreement; |
· | except as required by GAAP, regulatory accounting principles or by a regulatory authority, make a change in policy respect to loan loss reserves and charge-offs, asset/liability management or any other material matter; |
· | develop, market or implement any new products or lines of business; or |
· | agree or commit to do any of the foregoing. |
Regulatory Matters
Southern MissouriBancorp and TammcorpSM Bancshares have agreed to cooperate with each other and use their commercially reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, and to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by the merger agreement. Southern MissouriBancorp and TammcorpSM Bancshares have also agreed to furnish each other with all information reasonably necessary or advisable in connection with any statement, filing, notice or application to any governmental entity in connection with the merger and the bank merger, as well as to keep each other apprised of the status of matters related to the completion of the transactions contemplated by the merger agreement and to advise the other upon receiving any communication from any governmental entity whose approval is required for
the merger or bank merger that causes the receiving party to believe that there is a reasonable likelihood that any required regulatory approval will not be obtained or may be materially delayed, or that any such approval may contain a condition or requirement that is deemed unduly burdensome by Southern MissouriBancorp including any condition that would increase the minimum regulatory capital requirements of Southern MissouriBancorp or Southern Bank.
Employee Benefit Plan Matters
Following the effective time of the merger, Southern MissouriBancorp will cause Southern Bank to maintain employee benefit plans and compensation opportunities for the benefit of employees who are full-time employees of Capaha BankSMB on the merger closing date (referred to below as "covered employees") that provide employee benefits and compensation opportunities which, in the aggregate, are substantially comparable and equivalent to the employee benefits and compensation opportunities that are made available on a uniform and non-discriminatory basis to similarly situated employees of Southern Bank. Until such time as covered employees participate in the benefit plans and compensation opportunities that are made available to similarly situated employees of Southern Bank, a covered employee's continued participation in the employee benefit plans and compensation opportunities of Capaha BankSMB will be deemed to satisfy this provision of the merger agreement. In no event will any covered employee be eligible to participate in any closed or frozen plan of Southern MissouriBancorp or its subsidiaries.
To the extent that a covered employee becomes eligible to participate in a Southern MissouriBancorp benefit plan, Southern Bank will cause the plan to recognize full-time years of prior service from the date of the most recent hire of such covered employee with Capaha Bank,SMB, for purposes of eligibility, participation, vesting and, except under any plan that determines benefits on an actuarial basis, for benefit accrual, but only to the extent such service was recognized immediately prior to the merger closing date under a comparable TammcorpSM Bancshares benefit plan in which such covered employee was eligible to participate immediately prior to completion of the merger. This recognition of service will not duplicate any benefits of a covered employee with respect to the same period of service.
With respect to any Southern MissouriBancorp benefit plan that is a health, dental, vision or other welfare plan in which any covered employee is eligible to participate for the plan year in which such covered employee is first eligible to participate, Southern Bank will use commercially reasonable best efforts to cause any pre-existing condition limitations or eligibility waiting periods to be waived with respect to the covered employee to the extent such pre-existing condition was or would have been covered under a TammcorpSM Bancshares benefit plan in which such covered employee participated immediately prior to the effective time of the merger.
TammcorpSM Bancshares has agreed to take, and cause its subsidiaries to take, all actions requested by Southern MissouriBancorp that may be necessary or appropriate to (i) cause one or more TammcorpSM Bancshares benefit plans to terminate as of the effective time of the merger, or as of the date immediately preceding the effective time of the merger, (ii) cause benefit accruals and entitlements under any TammcorpSM Bancshares benefit plan to cease as of the effective time of the merger, or as of the date immediately preceding the effective time, (iii) cause the continuation on and after the effective time of the merger of any contract, arrangement or insurance policy relating to any TammcorpSM Bancshares benefit plan for such period as may be requested by Southern Missouri,Bancorp, and (iv) facilitate the merger of any TammcorpSM Bancshares benefit plan into any employee benefit plan maintained by Southern MissouriBancorp or a Southern MissouriBancorp subsidiary.
Full-time employees of Capaha BankSMB who are not executive officers, are not otherwise entitled to contractual or other severance or change in control benefits and are involuntarily terminated by Southern Bank without cause at the time of or within one year following the closing of the merger will be paid by Southern Bank a
severance benefit equal to one week of base pay for each year of full-time employment at Capaha BankSMB with a maximum payment of 13 weeks base pay, subject to such employees executing and not revoking a release of all employment claims.
Director and Officer Indemnification and Insurance
For a period of five years following the merger, and to the maximum extent permitted by Tammcorp'sSM Bancshares' articles of incorporation and bylaws and applicable law, Southern MissouriBancorp has agreed to indemnify and hold harmless the directors and officers of TammcorpSM Bancshares and Capaha BankSMB for all losses and claims incurred by these individuals in their capacity as such and arising out of or relating to matters existing or occurring at or prior to completion of the merger (including the transactions contemplated by the merger agreement).
Additionally, the merger agreement requires TammcorpBancorp to purchase prior to the effective time of the merger a three-yearfive-year "tail" policy under its current directors' and officers' liability and insurance policy, which will provide insurance coverage post-merger for the officers and directors of TammcorpSM Bancshares and Capaha Bank.SMB. The cost of this policy mayshall not exceed 200% of Tammcorp'sSM Bancshares' current annual premium for directors' and officers' insurance. If the tail policy cannot be obtained for this amount, then Southern MissouriBancorp will authorize Tammcorp to pay the required premium cost to obtain as much comparable insurance as is available for this amount. Instead of providing this insurance coverage, Tammcorp at the request of Southern Missouri will, prior to the effective time of the merger, purchase a prepaid tail policy for directors' and officers' liability insurance for a longer term (not to exceed five years) without being subject to a limitation on the cost of insurance.
Shareholder Meeting and Recommendation of
Tammcorp'sSM Bancshares' Boards of Directors
TammcorpSM Bancshares has agreed to cause its board of directors to call a special meeting of shareholders for the purpose of voting upon the merger agreement within 40 days after notice of the meeting is given to TammcorpSM Bancshares shareholders. TammcorpSM Bancshares has further agreed to use its commercially reasonable best efforts to convene and hold the meeting on its scheduled date obtain the approval of the merger agreement by TammcorpSM Bancshares shareholders at that meeting. In addition, TammcorpSM Bancshares has agreed to include in this proxy statement/prospectus and in all other communications with TammcorpSM Bancshares shareholders the recommendation of Tammcorp'sSM Bancshares' board of directors that TammcorpSM Bancshares shareholders approve the merger agreement, subject to the board's ability to withdraw or modify that recommendation as described under "—Agreement Not to Solicit Other Offers.
Notwithstanding any change in recommendation by the board of directors of Tammcorp,SM Bancshares, unless the merger agreement has been terminated in accordance with its terms, TammcorpSM Bancshares is required to convene the TammcorpSM Bancshares special meeting and to submit the merger agreement to a vote of its shareholders.
Agreement Not to Solicit Other Offers
TammcorpSM Bancshares has agreed that, from the date of the merger agreement until the effective time of the merger or, if earlier, the termination of the merger agreement, it will not, and will cause its subsidiaries not to: (i) initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect to, or engage in any discussions or negotiations concerning, or provide to any person any confidential or nonpublic information concerning, Tammcorp'sSM Bancshares' and its subsidiaries' business, properties or assets with respect to an acquisition proposal; or (ii) have any discussions with any person or entity relating to an acquisition proposal. An "acquisition proposal" means a tender or exchange offer, proposal for a merger, consolidation or other business combination involving TammcorpSM Bancshares or Capaha BankSMB or any proposal or offer to acquire in any manner more than 24.99% of the voting power in, or more than 24.99% of the fair market value of the business, assets or deposits of, TammcorpSM Bancshares or Capaha Bank,SMB, other than the merger and the bank merger.
If TammcorpSM Bancshares receives an unsolicited written acquisition proposal prior to shareholder approval of the merger agreement that Tammcorp'sSM Bancshares' board of directors determines in good faith will constitute or result in a transaction that is more favorable from a financial point of view to the shareholders of TammcorpSM Bancshares than the merger with Southern MissouriBancorp (referred to as a "superior proposal"), TammcorpSM Bancshares may provide confidential information to and negotiate with the third party that submitted such acquisition proposal if the TammcorpSM Bancshares board of directors
determines in good faith, after consulting with counsel, that the failure to do so would violate the board's fiduciary duties. In order to constitute a superior proposal, an acquisition proposal to acquire voting power in, or a portion of the business, assets or deposits of, TammcorpSM Bancshares or Capaha BankSMB must be for a majority of such voting power or a majority of the fair market value of such business, assets or deposits. TammcorpSM Bancshares must promptly advise Southern MissouriBancorp of any acquisition proposal received and keep it apprised of any related developments.
The merger agreement generally prohibits the TammcorpSM Bancshares board of directors from withdrawing or modifying in a manner adverse to Southern MissouriBancorp the board's recommendation that Tammcorp'sSM Bancshares' shareholders vote to approve the merger agreement (referred to as a "change in recommendation"). At any time prior to the approval of the merger agreement by Tammcorp'sSM Bancshares' shareholders, however, the TammcorpSM Bancshares board of directors may effect a change in recommendation in response to a bona fide written unsolicited acquisition proposal that the board determines in good faith, after consultation with outside legal counsel, constitutes a superior proposal. The TammcorpSM Bancshares board of directors may not make a change in recommendation in response to a superior proposal, or terminate the merger agreement to pursue a superior proposal, unless it has given Southern MissouriBancorp at least four business days to propose a modification to the merger agreement and, after considering any such proposed modification, the TammcorpSM
Bancshares board of directors determines in good faith, after consultation with counsel, that the proposal continues to constitute a superior proposal.
If Southern MissouriBancorp terminates the merger agreement based on a change in recommendation by the TammcorpSM Bancshares board of directors or TammcorpSM Bancshares terminates the merger agreement to pursue a superior proposal, TammcorpSM Bancshares will be required to pay Southern MissouriBancorp a termination fee of $1.0 million$450,000 in cash. See "-Termination of the Merger Agreement" and "-Termination Fee."
Exchange Offer for Minority Shareholders of Capaha Bank
In connection with the merger and the bank merger, Tammcorp has agreed under the merger agreement to offer all shareholders of Capaha Bank other than itself, which in total represents approximately 9.0% of the outstanding shares of Capaha Bank common stock, the opportunity to exchange each of their shares of common stock of Capaha Bank for shares of Tammcorp common stock, which newly issued shares of Tammcorp common stock will, upon completion of the merger, be converted into the right to receive the merger consideration. It is intended that the exchange will occur immediately prior to the consummation of the merger, such that if the merger is not consummated the exchange will not be consummated.
Tammcorp will provide the minority shareholders of Capaha Bank with an offering circular that describes the terms of the exchange offer, the merger and other pertinent information. The form of stock exchange agreement to be entered into by Tammcorp with the minority shareholders of Capaha Bank who wish to participate in the share exchange transaction is included as Exhibit D to the merger agreement, a copy of which is attached to this proxy statement/prospectus as Appendix A.
After the completion of the merger, if there are any minority shareholders of Capaha Bank who did not participate in the share exchange transaction, Southern Missouri will adopt a new or amended plan of merger for the bank merger providing for the shares of Capaha Bank common stock owned by such non-participating minority shareholders to be converted into the right to receive consideration payable by Southern Missouri that is identical in form and amount to the merger consideration that such non-participating minority shareholders would have been entitled to receive under the merger agreement had they participated in the exchange transaction, subject to their rights under the Illinois Savings Bank Act to demand payment of the value of their shares of Capaha Bank common stock. Under these circumstances, it is uncertain as to how soon after the merger the bank merger will occur; absent these circumstances, the bank merger is expected to occur immediately after the merger.
Conditions to Complete the Merger
Southern Missouri'sBancorp's and Tammcorp'sSM Bancshares' respective obligations to complete the merger are subject to the satisfaction or, to the extent legally permitted, waiver of the following conditions:
· | the approval of the merger agreement by Tammcorp'sSM Bancshares' shareholders; |
· | to the extent required, the filing by Southern MissouriBancorp with NASDAQ of a notification form for the listing of the shares of Southern MissouriBancorp common stock to be issued in the merger, and the non-objection by NASDAQ to such listing; |
· | the effectiveness of the registration statement of which this proxy statement/prospectus is a part, and the absence of any stop order (or proceedings for that purpose initiated or threatened and not withdrawn); |
· | the absence of any order, injunction, decree or law preventing or making illegal the completion of the merger or the bank merger; |
· | accuracy, as of the date of the merger agreement and as of the closing date of the merger, of the representations and warranties made by Southern MissouriBancorp and TammcorpSM Bancshares to the extent specified in the merger agreement, and the receipt by each party of an officer's certificate from the other party to that effect; |
· | the performance by the other party in all material respects of all obligations required to be performed by it under the merger agreement and the receipt by each party of an officer's certificate from the other party to that effect; and |
· | receipt by each party of an opinion of its legal counseltax advisor to the effect that on the basis of facts, representations and assumptions set forth or referred to in such opinion, the mergermergers taken as a whole will qualify as a "reorganization"one or more "reorganizations" within the meaning of Section 368(a) of the Code. |
The following are additional conditions to Southern Missouri'sBancorp's obligation to complete the merger:
· | the receipt of all necessary regulatory authorizations, consents, orders or approvals, including from the Federal Reserve Board and the Missouri Division, and the Illinois Department, necessary to consummate the merger and the bank merger, without the imposition of any condition or requirement, which individually or in the aggregate, is deemed unduly burdensome by Southern Missouri,Bancorp, including any condition that would increase the minimum regulatory capital requirements of Southern MissouriBancorp or Southern Bank, and such authorizations, consents, orders and approvals shall remain in full force and effect and all statutory waiting period in respect thereof shall have expired; |
· | the holders of less than 5.0% of the outstanding shares of TammcorpSM Bancshares common stock and Class A preferred stock shall have exercised dissenters' rights under IllinoisMissouri law; |
· | receipt by TammcorpSM Bancshares of all designated third party consents; and |
· | Tammcorp shall have entered into the exchange agreement with the holders of at least 80% of the outstanding shares of common stock of Capaha Bank not owned by Tammcorp and completed the exchange offer and issuance of shares of Tammcorp common stock to such holders in accordance with the exchange agreement. |
Neither Southern MissouriBancorp nor TammcorpSM Bancshares can provide assurance as to when or if all of the conditions to the merger can or will be satisfied or waived by the appropriate party.
Termination of the Merger Agreement
The merger agreement can be terminated at any time prior to completion of the merger in the following circumstances:
· | by mutual written consent of Southern MissouriBancorp and Tammcorp;SM Bancshares; |
· | by either Southern MissouriBancorp or Tammcorp,SM Bancshares, if any governmental entity that must grant a required regulatory approval has denied approval of the merger or bank merger and such denial has become final and non-appealable or any governmental entity of competent jurisdiction has issued a final non-appealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the merger or bank merger, unless the failure to obtain a required regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement; |
· | by either Southern MissouriBancorp or Tammcorp,SM Bancshares, if the merger has not been completed on or before JulyMarch 31, 2017,2018, unless the failure of the merger to be completed by that date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement; |
· | by either Southern MissouriBancorp or TammcorpSM Bancshares (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement), if there is a breach of any of the covenants or agreements or any of the representations or warranties set forth in the merger agreement on the part of the other party which, either individually or in the aggregate, would constitute, if occurring or continuing on the merger closing date, the failure of a closing condition of the terminating party and which is not cured within 20 days following written notice to the party committing such breach, or which by its nature or timing cannot be cured during such period; |
· | by Southern Missouri,Bancorp, if the board of directors of TammcorpSM Bancshares fails to recommend in this proxy statement/prospectus that its shareholders approve the merger agreement, or the TammcorpSM Bancshares board of directors withdraws, modifies or makes or causes to be made any third party or public communication announcing an intention to modify or withdraw such recommendation in a manner adverse to Southern Missouri,Bancorp, or TammcorpSM Bancshares materially breaches any of its obligations relating to third party acquisition proposals; |
· | by either Southern MissouriBancorp or Tammcorp,SM Bancshares, if the special meeting of TammcorpSM Bancshares shareholders has been held (including any postponement or adjournment thereof) and the required vote to approve the merger agreement has not been obtained; provided in the case of a termination by TammcorpSM Bancshares that TammcorpSM Bancshares has complied in all material respects with its obligations under the merger agreement, including with respect to its board of directors recommending approval of the merger agreement and the non-solicitation of third party acquisition proposals; |
· | by TammcorpSM Bancshares prior to TammcorpSM Bancshares obtaining shareholder approval of the merger agreement in order to enter into an agreement with respect to a third party superior unsolicited acquisition proposal, provided TammcorpSM Bancshares has not committed a material breach of its obligations with respect to third party acquisition proposals and concurrently with such termination pays Southern MissouriBancorp a termination fee of $1.0 million$450,000 in cash. |
If the merger agreement is terminated, it will become void and have no effect, except that (1) both Southern MissouriBancorp and TammcorpSM Bancshares will remain liable for any liabilities or damages arising out of its willful breach of any provision of the merger agreement except, in the case of Tammcorp,SM Bancshares, if the termination fee is paid, and (2) designated provisions of the merger agreement will survive the termination, including those relating to payment of fees and expenses.
Southern MissouriBancorp will be entitled to a termination fee of $1.0 million$450,000 from TammcorpSM Bancshares if the merger agreement is terminated under the following circumstances:
· | a termination by Southern MissouriBancorp based on (i) the board of directors of TammcorpSM Bancshares either failing to continue its recommendation that the TammcorpSM Bancshares shareholders approve the merger agreement or adversely changing such recommendation or (ii) TammcorpSM Bancshares materially breaching the provisions of the merger agreement relating to third party acquisition proposals; |
· | a termination by TammcorpSM Bancshares prior to obtaining shareholder approval of the merger agreement in order to enter into an agreement with a third party with respect to an unsolicited superior acquisition proposal as described above; or |
· | a termination by either Southern MissouriBancorp or TammcorpSM Bancshares as a result of the failure of Tammcorp'sSM Bancshares' shareholders to approve the merger agreement if prior to such termination there is publicly announced another acquisition proposal and within one yearnine months of termination TammcorpSM Bancshares or Capaha BankSMB enters into a definitive agreement for or consummates an acquisition proposal. For purposes of this bullet point, an acquisition proposal to acquire voting power in, or a portion of the business, assets or deposits of, TammcorpSM Bancshares or Capaha BankSMB must be for a majority of such voting power or a majority of the fair market value of such business, assets or deposits. |
In the event Southern MissouriBancorp terminates the merger agreement as a result of a willful and material breach by TammcorpSM Bancshares of the provisions of the merger agreement relating to third party acquisition proposals, Southern MissouriBancorp is not required to accept the termination fee from TammcorpSM Bancshares and may pursue alternate relief against Tammcorp.SM Bancshares.
All fees and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring such fee or expense, except that the costs and expenses of printing and mailing this proxy statement/prospectus will be paid by Tammcorp and all filing and other fees paid to the SEC in connection with the merger will be paid by Southern Missouri.Bancorp.
Amendment, Waiver and Extension of the Merger Agreement
Subject to compliance with applicable law, the merger agreement may be amended by the parties at any time before or after approval of the merger agreement by the shareholders of Tammcorp,SM Bancshares, except that after approval of the merger agreement by the shareholders of Tammcorp,SM Bancshares, there may not be, without further approval of such shareholders, any amendment of the merger agreement that requires further approval of such shareholders under applicable law.
At any time prior to completion of the merger, the parties may, to the extent legally allowed, extend the time for the performance of any of the obligations or other acts of the other party, waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered pursuant to the merger agreement, and waive compliance with any of the agreements or satisfaction of any conditions contained in the merger agreement.
As an inducement to Southern MissouriBancorp to enter into the merger agreement, John R. Abercrombie, the Chairman, Presidenteach of SM Bancshares' directors and Chief Executive Officer of Tammcorp and Capaha Bank,executive officers has entered into a voting agreement with Southern MissouriBancorp with respect to the shares of TammcorpSM Bancshares common stock and Class A preferred stock he owns.beneficially owned by them. The following summary of the voting agreement is qualified in its entirety by reference to the form of voting agreement, a copy of which is attached as Exhibit A to the merger agreement, which is included in Appendix A to this proxy statement/prospectus.
Pursuant to the voting agreement, Mr. Abercrombieeach of the directors and executive officers of SM Bancshares has agreed:
· | to vote, or cause to be voted, all of his or her shares of TammcorpSM Bancshares common stock and Class A preferred stock in favor of approval of the merger agreement;agreement proposal; and |
· | not to sell, transfer or otherwise dispose of any such shares of TammcorpSM Bancshares common stock until after shareholder approval of the merger agreement, excluding (i) a transfer where the transferee has agreed in writing to abide by the terms of the voting agreement in a form reasonably satisfactory to Southern Missouri,Bancorp, (ii) a transfer by will or operation of law, or (iii) a transfer made with the prior written consent of Southern Missouri.Bancorp. |
The obligations under the voting agreement will terminate on the first to occur of: (i) the termination of the merger agreement, (ii) the approval of the merger agreement by Tammcorp'sSM Bancshares' shareholders, (iii) an amendment to the merger agreement which reduces the amount of or alters the form of the merger consideration, or (iv) the parties' mutual agreement to terminate the voting agreement.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following summary describes generally the material U.S. federal income tax consequences of the merger to U.S. holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock. The term "U.S. holder" means a beneficial owner of shares of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock that is, for U.S. federal income tax purposes:
· | an individual citizen or resident of the United States; |
· | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States or any of its political subdivisions; |
· | a trust that (i) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes; or |
· | an estate that is subject to U.S. federal income taxation on its income regardless of its source. |
This discussion is based upon current provisions of the Code, the U.S. Treasury Regulations promulgated thereunder, judicial decisions and published positions of the Internal Revenue Service (the "IRS"), all as in effect as of the date of this document, and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change or interpretation could affect the continued accuracy of the statements and conclusions set forth in this discussion.
This discussion is for general information only and does not purport to address all aspects of U.S. federal income taxation that may be relevant to particular holders of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock in light of their particular facts and circumstances. This discussion addresses only U.S. holders of TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock that hold such stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property held for investment). This summary does not address any tax consequences of the merger under any state, local, or foreign laws or any federal laws other than those pertaining to income tax, nor does it address any considerations in respect of any withholding required pursuant to the Foreign Account Tax Compliance Act of 2010 (including the U.S.
Treasury Regulations issued thereunder and intergovernmental agreements entered into pursuant thereto). This discussion does not address considerations that may be relevant to particular holders of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock in light of their individual circumstances or to holders of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock that are subject to special rules, including, without limitation, holders that are: (i) banks and other financial institutions; (ii) subchapter S corporations, entities or arrangements treated as partnerships for U.S. federal income tax purposes or other pass-through entities and investors therein; (iii) retirement plans; (iv) individual retirement accounts or other tax-deferred accounts; (v) holders who are liable for the alternative minimum tax; (vi) insurance companies; (vii) mutual funds; (viii) holders who actually or constructively own more than 5% of TammcorpSM Bancshares common stock; (ix) holders who acquired their shares in exchange for shares of Capaha Bank'sSMB's common stock; (x) tax-exempt organizations; (xi) dealers in securities or currencies; (xii) traders in securities that elect to use a mark-to-market method of accounting; (xiii) persons that hold TammcorpSM Bancshares common stock as part of a straddle, hedge, constructive sale, conversion or other integrated transaction; (xiv) regulated investment companies; (xv) real estate investment trusts; (xvi) former citizens or former
residents of the United States; (xvii) U.S. holders whose "functional currency" is not the U.S. dollar; (xviii) "controlled foreign corporations"; (xix) "passive foreign investment companies"; (xx) holders that exercise dissenters' rights; and (xxi) holders who acquired their shares of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock through the exercise of a stock option, through a tax qualified retirement plan or otherwise as compensation.
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock, the tax treatment of a person treated as a partner in that partnership generally will depend upon the status of the partner and the activities of the partnership. Persons that for U.S. federal income tax purposes are treated as partners in partnerships holding shares of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock should consult their own tax advisors about the tax consequences of the merger to them.
ALL HOLDERS OF TAMMCORPSM BANCSHARES COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
In connection with the filing with the SEC of the registration statement on Form S-4 of which this proxy statement/prospectus is a part, Silver, Freedman, Taff & Tiernan LLP, tax counsel to Southern Missouri,Bancorp, has rendered its tax opinion to Southern MissouriBancorp and Fenimore, Kay, HarrisonCarnahan, Evans, Cantwell & Ford, LLP,Brown, P.C., tax counsel to Tammcorp,SM Bancshares, has rendered its tax opinion to TammcorpSM Bancshares addressing the U.S. federal income tax consequences of the merger as described below. The discussion below of the material U.S. federal income tax consequences of the merger serves, insofar as such discussion constitutes statements of United States federal income tax law or legal conclusions, as the opinion of each of Silver, Freedman, Taff & Tiernan LLP and Fenimore, Kay, HarrisonCarnahan, Evans, Cantwell & Ford, LLPBrown, P.C. as to the material U.S. federal income tax consequences of the merger to the U.S. holders of TammcorpSM Bancshares common stock and Class A preferred stock. In rendering their respective tax opinions, each counsel relied upon representations and covenants, including those contained in certificates of officers of Southern MissouriBancorp and Tammcorp,SM Bancshares, reasonably satisfactory in form and substance to each such counsel. If any of the representations or assumptions upon which the opinions are based are inconsistent with the actual facts, the U.S. federal income tax consequences of the merger could be adversely affected. Copies of the tax opinions are attached as Exhibits 8.1 and 8.2 to the Registration Statement on Form S-4.
Treatment of the Merger as a "Reorganization"
The parties intend for the mergermergers, taken as a whole, to be treated as a "reorganization"one or more "reorganizations" for U.S. federal income tax purposes. The obligations of the parties to complete the merger are conditioned on, among other things, the receipt by TammcorpSM Bancshares and Southern MissouriBancorp of tax opinions from Fenimore, Kay, HarrisonCarnahan, Evans, Cantwell & Ford, LLPBrown, P.C. and Silver, Freedman, Taff & Tiernan LLP, respectively, each dated and based on the facts and law existing as of the closing date of the merger, that for U.S. federal income tax purposes the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. In addition, the obligation of each of Fenimore, Kay, HarrisonCarnahan, Evans, Cantwell & Ford, LLPBrown, P.C. and Silver, Freedman, Taff & Tiernan LLP to deliver such opinions is conditioned on the merger satisfying the statutory and regulatory requirements of a "reorganization," including the "continuity of proprietary interest" requirement. That requirement generally will be satisfied if Southern MissouriBancorp common stock constitutes at least 40% of the value of the total consideration to be paid or deemed paid in the merger.
In the opinion of Fenimore, Kay, HarrisonCarnahan, Evans, Cantwell & Ford, LLPBrown, P.C. and Silver, Freedman, Taff & Tiernan LLP, in reliance on representation letters provided by TammcorpSM Bancshares and Southern MissouriBancorp and upon customary factual assumptions, as well as certain covenants and undertakings of TammcorpSM Bancshares and Southern Missouri,Bancorp, the mergermergers taken as a whole will qualify as a "reorganization"one or more "reorganizations" within the meaning of Section 368(a) of the Code. If any of such representations, assumptions, covenants or undertakings are or become incorrect, incomplete, or inaccurate, or are violated, the validity of the opinions described above may be affected, and the U.S. federal income tax consequences of the merger could differ materially from those described below. Neither Southern MissouriBancorp nor TammcorpSM Bancshares has sought, and neither of them will seek, any ruling from the IRS regarding any matters relating to the merger, and the opinions described above will not be binding on the IRS or any court. Consequently, there can be no assurance that the IRS will not assert, or that a court would not sustain, a position contrary to any of the conclusions set forth in such opinions or below.
U.S. Federal Income Tax Consequences of the Merger to U.S. Holders
Subject to the qualifications and limitations set forth above, the material U.S. federal income tax consequences of the merger to U.S. holders will be as follows:
· | No gain or loss will be recognized by Southern MissouriBancorp or TammcorpSM Bancshares as a result of the merger. |
· | A U.S. holder who receives a combination of shares of Southern MissouriBancorp common stock and cash (other than cash received in lieu of fractional shares of Southern MissouriBancorp common stock) in exchange for shares of TammcorpSM Bancshares common stock pursuant to the merger generally will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Southern MissouriBancorp common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of TammcorpSM Bancshares common stock exceeds such U.S. holder's adjusted tax basis in its TammcorpSM Bancshares common stock surrendered and (ii) the amount of cash received by such U.S. holder of TammcorpSM Bancshares common stock (in each case excluding any cash received in lieu of fractional shares of Southern MissouriBancorp common stock, which will be treated as discussed below). This gain generally will be capital gain and will be long-term capital gain if the holding period for the shares of TammcorpSM Bancshares common stock exchanged is more than one year at the time of completion of the merger. |
· | A U.S. holder who receives a combination of shares of Southern Missouri common stock and cash (other than cash received in lieu of fractional shares of Southern Missouri common stock) in exchange for shares of Tammcorp Class A preferred stock pursuant to the merger generally will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Southern Missouri common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of Tammcorp Class A preferred stock exceeds such U.S. holder's adjusted tax basis in its Tammcorp Class A preferred stock surrendered and (ii) the amount of cash received by such U.S. holder of Tammcorp Class A preferred stock (in each case excluding any cash received in lieu of fractional shares of Southern Missouri common stock, which will be treated as discussed below). This gain generally will be capital gain and will be long-term capital gain if the holding period for the shares of Tammcorp Class A preferred stock exchanged is more than one year at the time of completion of the merger. |
· | The aggregate tax basis of the Southern MissouriBancorp common stock received by a U.S. holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock in the merger (including any fractional shares of Southern MissouriBancorp common stock deemed received and exchanged for cash, as described below) will be the same as the aggregate tax basis of the TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock for which it is exchanged, decreased by the amount of cash received in the merger (other than cash received in lieu of a fractional share of Southern MissouriBancorp common stock), and increased by the amount of gain recognized on the exchange, other than with respect to cash received in lieu of a fractional share of Southern MissouriBancorp common stock (regardless of whether such gain is classified as capital gain or as dividend income, as discussed below under "—Potential Recharacterization of Gain as a Dividend"). |
· | The holding period of Southern MissouriBancorp common stock received in exchange for shares of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock (including fractional shares of Southern MissouriBancorp common stock deemed received and exchanged for cash, as described below) will include the holding period of the TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock for which it is exchanged. |
If a U.S. holder of TammcorpSM Bancshares common stock acquired different blocks or classes of TammcorpSM Bancshares common stock at different times or at different prices, any gain or loss will be determined separately with respect to each block or class of TammcorpSM Bancshares common stock, and such U.S. holder's tax basis and holding period in its shares of Southern MissouriBancorp stock may be determined with reference to each block or class of Tammcorp stock, in each case with the gain or loss, tax basis and holding period with respect to the TammcorpSM Bancshares common stock determined separately from the Tammcorp Class A
preferred stock. A loss realized on one block or class of shares may not be used to offset a gain realized on another block or class of shares in the merger. U.S. holders should consult their own tax advisors with regard to identifying the tax bases or holding periods of the particular shares of Southern MissouriBancorp stock received in the merger.
Potential Recharacterization of Gain as a Dividend
Any gain recognized by a U.S. holder of TammcorpSM Bancshares common stock or Class A preferred stock in connection with the merger generally will be capital gain unless such holder's receipt of cash has the effect of a distribution of a dividend, in which case the gain will be treated as a dividend to the extent of such holder's ratable share of Tammcorp'sSM Bancshares' accumulated earnings and profits, as calculated for U.S. federal income tax purposes. For purposes of determining whether your receipt of cash has the effect of a distribution of a dividend, you will be treated as if you first exchanged all of your TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock solely in exchange for Southern MissouriBancorp common stock and then Southern MissouriBancorp immediately redeemed a portion of that stock for the cash that you actually received in the merger (referred to herein as the "deemed redemption"). Receipt of cash will generally not have the effect of a dividend to you if such receipt is "not essentially equivalent to a dividend" or "substantially disproportionate," each within the meaning of Section 302(b) of the Code. In order for the deemed redemption to be "not essentially equivalent to a dividend," the deemed redemption must result in a "meaningful reduction" in your deemed percentage stock ownership of Southern MissouriBancorp following the merger. The determination generally requires a comparison of the percentage of the outstanding stock of Southern MissouriBancorp that you are considered to have owned immediately before the deemed redemption to the percentage of the outstanding stock of Southern MissouriBancorp that you own immediately after the deemed redemption. The IRS has indicated in rulings that any reduction in the interest of a minority shareholder that owns a small number of shares in a publicly and widely held corporation and that exercises no control over corporate affairs would result in capital gain (as opposed to dividend) treatment. For purposes of applying the foregoing tests, a shareholder will be deemed to own the stock the shareholder actually owns and the stock the shareholder constructively owns under the attribution rules of Section 318 of the Code. Under Section 318 of the Code, a shareholder will be deemed to own the shares of stock owned by certain family members, by certain estates and trusts of which the shareholder is a beneficiary, and by certain affiliated entities, as well as shares of stock subject to an option actually or constructively owned by the shareholder or such other persons. If, after applying these tests, the deemed redemption results in a capital gain, the capital gain will be long-term if your holding period for your TammcorpSM Bancshares common stock is more than one year as of the date of the exchange. If, after applying these tests, the deemed redemption results in the gain recognized being classified as a dividend, such dividend will be treated as either ordinary income or qualified dividend income. Any gain treated as qualified dividend income will be taxable to you at the long-term capital gains rate, provided you held the shares giving rise to such income for more than 60 days during the 121-day period beginning 60 days before the effective time of the merger. The determination as to whether you will recognize a capital gain or dividend income as a result of your exchange of TammcorpSM Bancshares common stock for a combination of Southern MissouriBancorp common stock and cash in the merger is complex and is determined on a shareholder-by-shareholder basis. Accordingly, we urge you to consult your own tax advisor with respect to any such determination that is applicable to your individual situation.
Receipt of Cash in Lieu of a Fractional Share of
Southern MissouriBancorp Stock
A U.S. holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock who receives cash in lieu of a fractional share of Southern MissouriBancorp common stock will generally be treated as having received the fractional share pursuant to the merger and then as having exchanged the fractional share for cash in a redemption by Southern Missouri.Bancorp. As a result, such U.S. holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock will generally recognize gain or loss equal to the difference between the amount of cash received and the tax basis in its fractional share interest as set forth above. The gain or loss recognized by the U.S. holders described in this paragraph will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the date of the exchange, the U.S. holder's holding period for the relevant share is greater than one year. The deductibility of capital losses is subject to limitations.
If you are a holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock and you perfect your dissenters' rights with respect to your shares of such stock, you will generally recognize capital gain or loss equal to the difference between the amount of cash received in exchange for those shares and your tax basis in those shares. Any taxable gain or loss to a shareholder on the exchange of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock will generally be treated as either long-term or short-term capital gain or loss depending on such shareholder's holding period for such stock. The tax consequences of cash received may vary depending upon your individual circumstances. Each holder of Tammcorp SM Bancshares common
stock who contemplates exercising statutory dissenters' rights should consult its tax adviser as to the possibility that all or a portion of the payment received pursuant to the exercise of such rights will be treated as dividend income.
Net Investment Income Tax
A holder of TammcorpSM Bancshares common stock or Class A preferred stock that is an individual is subject to a 3.8% tax on the lesser of: (1) his or her "net investment income" for the relevant taxable year, or (2) the excess of his or her modified adjusted gross income for the taxable year over a certain threshold (between $125,000 and $250,000 depending on the individual's U.S. federal income tax filing status). Estates and trusts are subject to similar rules. Net investment income generally would include any capital gain recognized in connection with the merger (including any gain treated as a dividend), as well as, among other items, other interest, dividends, capital gains and rental or royalty income received by such individual. Holders of TammcorpSM Bancshares common stock or Class A preferred stock should consult their tax advisors as to the application of this additional tax to their circumstances.
Payments of cash, including cash received in lieu of a fractional share of Southern MissouriBancorp common stock, to a U.S. holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock pursuant to the merger may, under certain circumstances, be subject to information reporting and backup withholding (currently at a rate of 28%) unless the U.S. holder provides proof of an applicable exemption or, in the case of backup withholding, furnishes its taxpayer identification number and otherwise complies with all applicable requirements of the backup withholding rules. Certain holders (such as corporations and non-U.S. holders) are exempt from backup withholding. Holders exempt from backup withholding may be required to comply with certification requirements and identification procedures in order to establish an exemption from information reporting and backup withholding or otherwise avoid possible erroneous backup withholding. Any amounts withheld from payments to a U.S. holder under the backup withholding rules are not additional tax and generally will be allowed as a refund or credit against the U.S. holder's U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
A U.S. holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock who receives Southern MissouriBancorp common stock as a result of the merger may be required to retain records pertaining to the merger. Each U.S. holder of TammcorpSM Bancshares common stock or Tammcorp Class A preferred stock who is required to file a U.S. federal income tax return and who is a "significant holder" that receives Southern MissouriBancorp common stock in the merger will be required to file a statement with such U.S. holder's U.S. federal income tax return for the year in which the merger is completed in accordance with Treasury Regulations Section 1.368-3(b). Such statement must set forth the fair market value, determined immediately before the exchange, of all the TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock exchanged pursuant to the merger, and the holder's adjusted tax basis, determined immediately before the exchange, in its TammcorpSM Bancshares common stock and Tammcorp Class A preferred stock. A "significant holder" is a holder of TammcorpSM Bancshares common stock who, immediately before the merger, owned at least 1% (by vote or value) of the outstanding stock of TammcorpSM Bancshares or securities of TammcorpSM Bancshares with a basis of at least $1.0 million.
This discussion does not address U.S. federal income tax consequences that may vary with, or are contingent upon, individual circumstances. Moreover, it does not address any non-income tax or any foreign, state or local tax consequences of the merger. Tax matters are very complicated, and the tax consequences of the merger to you will depend upon the facts of your particular situation. Accordingly, we strongly urge you to consult with your tax advisor to determine the particular federal, state, local or foreign income or other tax consequences to you of the merger.
INFORMATION ABOUT SOUTHERN MISSOURI
BANCORPSouthern Missouri,Bancorp, headquartered in Poplar Bluff, Missouri, is athe bank holding company forof Southern Bank. Southern Bank, founded in 1887, is a Missouri state-chartered, community-focused financial institution providing relationship banking through 3638 locations in Missouri, Arkansas and Arkansas,Illinois, as well as online/mobile channels. As of December 31, 2016, Southern MissouriSeptember 30, 2017, Bancorp had assets of $1.5$1.8 billion, deposits of $1.2$1.5 billion, and stockholders' equity of $130.4 million.$177.0 million.
As a bank holding company, Southern Missouri Bancorp Inc. is regulated by the Federal Reserve Board. As a Missouri state-chartered trust company with banking powers, and a member of the Federal Reserve System, Southern Bank's primary regulators are the Missouri Department of Finance and the Federal Reserve Board.
The principal business of Southern Bank consists primarily of attracting retail deposits from the general public and using such deposits along with wholesale funding from the Federal Home Loan Bank of Des Moines, and to a lesser extent, brokered deposits, to invest to one-to-four-family residential mortgage loans, mortgage loans secured by commercial real estate, commercial non-mortgage business loans, and consumer loans. These funds are also used to purchase mortgage-backed and related securities, U.S. Government Agency obligations, municipal bonds, and other permissible investments.
Southern Bank offers a variety of deposit accounts for individuals and businesses. Deposits are its primary source of funds for its lending and investing activities.
Southern MissouriBancorp regularly evaluates opportunities to expand through acquisitions and conducts due diligence activities in connection with such opportunities. As a result, acquisition discussions and, in some cases, negotiations, may take place at any time, and acquisitions involving cash or our debt or equity securities may occur.
Southern Missouri'sBancorp's principal office is located at 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, and its telephone number is (573) 778-1800. Southern Missouri'sBancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC."
Additional information about Southern MissouriBancorp and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See "Where You Can Find More Information."
INFORMATION ABOUT
TAMMCORPSOUTHERN MISSOURI BANCSHARESTammcorp, Inc.SM Bancshares was formed as an Illinoisa Missouri corporation in 19801997 for the purpose of becoming a holding company for Capaha Bank, an IllinoisSMB, a Missouri state savingschartered bank. TammcorpSM Bancshares does not, as an entity, engage in separate business activities of a material nature apart from the activities it performs for Capaha Bank.SMB. Its primary activities are to provide assistance in the management and coordination of Capaha Bank'sSMB's financial resources. TammcorpSM Bancshares has no significant assets other than all of the outstanding common stock of Capaha Bank. TammcorpSMB. SM Bancshares derives its revenues primarily from the operations of Capaha BankSMB in the form of dividends received from Capaha Bank.SMB.
Capaha BankSMB was chartered as an Illinoisa Missouri state savings bank in 1955. The1997. SMB's operation are conducted through two locations, its main office and a branch office, both of Capaha Bank iswhich are located in Tamms, Illinois. Capaha Bank operates five branch offices, with a branch located in each of Alexander and Union Counties in Illinois, and with three branches located in Cape Girardeau County,Marshfield, Missouri. As of December 31, 2016, TammcorpSeptember 30, 2017, SM Bancshares had, on a consolidated basis, total assets of approximately $198.5$90.0 million, total deposits of approximately $176.9$72.6 million, total loans (net of allowance for loan losses) of approximately $157.0$69.0 million, and total shareholders' equity of approximately $16.6$11.0 million. TammcorpSM Bancshares does not file reports with the SEC. TammcorpSM Bancshares does, however, voluntarily provide certain financial reports including annual audited financial statements, to its shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF
TAMMCORPSM BANCSHARESThe following table sets forth certain information regarding the beneficial ownership of TammcorpSM Bancshares common stock and Class A preferred stock as of [●],December 8, 2017, by (1) each director and executive officer of Tammcorp,SM Bancshares, (2) each person who is known by TammcorpSM Bancshares to own beneficially 5% or more of the voting common stock of Tammcorp,SM Bancshares, and (3) all directors and executive officers as a group. Unless otherwise indicated, based on information furnished by such shareholders, management of TammcorpSM Bancshares believes that each person has sole voting and dispositive power over the shares indicated as owned by such person. The address of each listed shareholder is c/o Tammcorp,Southern Missouri Bancshares, Inc., One South Main1292 Banning Street, Cape Girardeau, Missouri 63703.Marshfield, MO 65706.
Name of Beneficial Owner | | Amount and nature of beneficial ownership | | | Percent of class(1) | |
5% or Greater Shareholders: | | | | | | |
Benton Hill Investment Co., Inc. | | | 1,200 | | | | 16.1 | % |
| | | | | | | | |
Directors and Executive Officers: | | | | | | | | |
John R. Abercrombie | | | 3,811 | | | | 51.3 | % |
Kevin J. Essner | | | 40 | | | | * | |
Timothy C. Goodman | | | 1,200 | (2) | | | 16.1 | % |
All directors and executive officers, as a group (three persons) | | | 5,051 | | | | 68.0 | % |
Name of Beneficial Owner | | Number of SM Bancshares common stock beneficially owned | | | Percent of class(1) | |
| | | | | | |
Don Babb, Director | | | 5,104 | | | | 13.0 | % |
John Brooks, Director | | | 128 | | | | * | |
Don Crawford, Director | | | 3,480 | | | | 8.8 | % |
Jerry Morgan, Director and Chief Executive Officer | | | 3,420 | | | | 8.8 | % |
Paula Honeycutt, Director and Senior Vice President | | | 1,059 | | | | 2.7 | % |
Kent Hyde, Chairman of the Board | | | 2,796 | | | | 7.1 | % |
James Moore, Director | | | 2,442 | | | | 6.2 | % |
Chris Owens, Director and President | | | 3 | | | | * | |
Link Stevens, Director | | | 499 | | | | 1.3 | % |
All directors and executive officers, as a group (nine persons) | | | 18,931 | | | | 48.1 | % |
* Equals less than 1%
(1)Percentage ownership based on 6,01739,356 shares of TammcorpSM Bancshares common stock outstanding and 1,416 shares of Class A preferred stock outstanding as of [●], 2017, or a total of 7,433 shares, which vote together as a single classoutstanding.
(2)Represents shares held of record by Benton Hill Investment Co., Inc. and which are voted by Mr. Goodman.
COMPARATIVE MARKET PRICES AND DIVIDENDS ON COMMON STOCK
Southern MissouriBancorp common stock is listed on the NASDAQ Global Market under the symbol "SMBC." The following table presents the high and low closing prices for the Southern Missouri'sBancorp's common stock for the six months ended December 31, 2016 and the years ended September 30, 2016 and 2015.periods indicated.
| | Stock Price | | | | |
| | High | | | Low | | | Dividends per Share | |
2017 Quarters: | | | | | | | | | |
Second Quarter (ended 12/31/16) | | $ | 36.59 | | | $ | 24.30 | | | $ | 0.100 | |
First Quarter (ended 9/30/16) | | | 25.20 | | | | 23.84 | | | | 0.100 | |
| | | | | | | | | | | | |
2016 Quarters: | | | | | | | | | | | | |
Fourth Quarter (ended 6/30/16) | | $ | 24.86 | | | $ | 22.79 | | | $ | 0.090 | |
Third Quarter (ended 3/31/16) | | | 24.02 | | | | 22.95 | | | | 0.090 | |
Second Quarter (ended 12/31/15) | | | 24.40 | | | | 21.26 | | | | 0.090 | |
First Quarter (ended 9/30/15) | | | 21.50 | | | | 18.75 | | | | 0.090 | |
| | | | | | | | | | | | |
2015 Quarters: | | | | | | | | | | | | |
Fourth Quarter (ended 6/30/15) | | $ | 19.49 | | | $ | 18.44 | | | $ | 0.085 | |
Third Quarter (ended 3/31/15) | | | 19.95 | | | | 18.11 | | | | 0.085 | |
Second Quarter (ended 12/31/14) | | | 20.57 | | | | 17.54 | | | | 0.085 | |
First Quarter (ended 9/30/14) | | | 18.05 | | | | 17.40 | | | | 0.085 | |
| | Stock Price | | | | |
| | High | | | Low | | | Dividends per Share | |
Fiscal 2018 Quarters: | | | | | | | | | |
Second Quarter (through December 4, 2017) | | $ | 40.24 | | | $ | 35.89 | | | $ | 0.11 | |
First Quarter (ended 9/30/17) | | | 36.49 | | | | 31.02 | | | | 0.11 | |
| | | | | | | | | | | | |
Fiscal 2017 Quarters: | | | | | | | | | | | | |
Fourth Quarter (ended 6/30/17) | | $ | 36.01 | | | $ | 30.30 | | | $ | 0.10 | |
Third Quarter (ended 3/31/17) | | | 36.88 | | | | 31.51 | | | | 0.10 | |
Second Quarter (ended 12/31/16) | | | 36.59 | | | | 24.30 | | | | 0.10 | |
First Quarter (ended 9/30/16) | | | 25.20 | | | | 23.84 | | | | 0.10 | |
| | | | | | | | | | | | |
Fiscal 2016 Quarters: | | | | | | | | | | | | |
Fourth Quarter (ended 6/30/16) | | $ | 24.86 | | | $ | 22.79 | | | $ | 0.09 | |
Third Quarter (ended 3/31/16) | | | 24.02 | | | | 22.95 | | | | 0.09 | |
Second Quarter (ended 12/31/15) | | | 24.40 | | | | 21.26 | | | | 0.09 | |
First Quarter (ended 9/30/15) | | | 21.50 | | | | 18.75 | | | | 0.09 | |
Southern Missouri'sBancorp's cash dividend payout policy is continually reviewed by management and the Board of Directors. Southern MissouriBancorp intends to continue its policy of paying quarterly dividends; however future dividend payments will depend upon a number of factors, including capital requirements, regulatory limitations, Southern Missouri'sBancorp's financial condition, results of operations and Southern Bank's ability to pay dividends to Southern Missouri. Southern MissouriBancorp. Bancorp relies upon dividends originating from Southern Bank to accumulate earnings for payment of cash dividends to stockholders.
Tammcorp has historically paidSM Bancshares pays a cash dividend to its common shareholders equal to $3.15annually following the end of each calendar year which equaled $20.00 per share for the year ended December 31, 2015 and a cash dividend to holders of its Class A preferred stock equal to $18.00$15.00 per share.share for the year ended December 31, 2016. The factors affecting Tammcorp'sSM Bancshares' ability to pay cash dividends to its shareholders are similar to those affecting Southern Missouri'sBancorp's ability to pay dividends itto its shareholders. In addition, the merger agreement prohibits TammcorpSM Bancshares from increasing the amount of dividends paid to its shareholders without Southern Missouri'sBancorp's prior written consent.
On January 10,August 17, 2017, the day prior to the public announcement of the merger agreement, the high and low sales prices of shares of Southern MissouriBancorp common stock as reported on NASDAQ were $33.45$31.49 and $32.70,$31.20, respectively. On ___________________,December 4, 2017, the last trading daylastest practicable date before the printing of this proxy statement/prospectus, the high and low sales prices of shares of Southern MissouriBancorp common stock as reported on NASDAQ were $______$40.80 and $______,$39.39, respectively.
As of ___________________,December 4, 2017, the last date prior to printing this proxy statement/prospectus for which it was practicable to obtain this information for Southern MissouriBancorp and Tammcorp, respectively,SM Bancshares, there were approximately 236253 registered holders of Southern MissouriBancorp common stock 24and 42 registered holders of TammcorpSM Bancshares common stock and three registered holders of Tammcorp Class A preferred stock.
TammcorpSM Bancshares shareholders are advised to obtain a current market quotation for Southern Missouri'sBancorp's common stock. Current market quotations for Tammcorp'sSM Bancshares' common stock and Class A preferred stock are not available. The market price of Southern MissouriBancorp common stock will fluctuate between the date of this proxy statement/prospectus and the date of completion of the merger. No assurance can be given concerning the market price of Southern MissouriBancorp common stock before or after the effective date of the merger. Changes in the market price of Southern MissouriBancorp common stock prior to the completion of the merger will affect the value of the stock portion of the merger consideration that holders of TammcorpSM Bancshares common stock and Class A preferred stock will receive upon completion of the merger.
DESCRIPTION OF
SOUTHERN MISSOURI'SBANCORP'S CAPITAL STOCK
The following information regarding the material terms of Southern Missouri'sBancorp's capital stock is qualified in its entirety by reference to Southern Missouri'sBancorp's articles of incorporation.
Southern Missouri'sBancorp's authorized capital stock currently consists of:
· | 12,000,000 shares of common stock, $0.01 par value per share; and |
· | 500,000 shares of preferred stock, $0.01 par value per share. |
As of December
31, 2016,4, 2017, there were
7,450,0418,588,338 shares of
Southern MissouriBancorp common stock issued and outstanding. No shares of
Southern MissouriBancorp preferred stock are currently outstanding.
Southern Missouri'sBancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC."
Each share of Southern MissouriBancorp common stock has the same relative rights and is identical in all respects with each other share of Southern MissouriBancorp common stock. Common shareholders of Southern MissouriBancorp do not have the right to vote cumulatively in the election of directors. Subject to any prior rights of the holders of preferred shares, each outstanding Southern MissouriBancorp common shares is entitled to such dividends as may be declared from time to time by Southern Missouri'sBancorp's board of directors out of legally available funds. In the event of Southern Missouri'sBancorp's liquidation, dissolution or winding up, common shareholders will be entitled to their proportionate share of any assets remaining after payment of liabilities and any amounts due to the holders of preferred stock. Southern MissouriBancorp common shareholders have no preemptive rights and no right to convert of exchange their shares of common stock into any other securities.
Southern Missouri'sBancorp's board of directors is authorized, generally without shareholder approval, to issue from time to time up to 500,000 shares of preferred stock (none of which are currently outstanding) in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred shares, including voting rights, dividend rights, conversion rights, terms of redemption, liquidation preference, sinking fund terms and the number of shares constituting any series or the designation of a series. Southern Missouri'sBancorp's board of directors may, generally without shareholder approval, issue preferred shares with voting and conversion rights that could adversely affect the voting power of common shareholders. Any preferred shares issued would also rank senior to southern Missouri'sBancorp's common stock as to rights upon liquidation, winding-up or dissolution. The issuance of convertible preferred shares could have the effect of delaying, deferring or preventing a change in control of Southern Missouri. Southern MissouriBancorp. Bancorp has no present plans to issue any preferred shares.
Other Anti-Takeover Provisions
In addition to the ability to issue common and preferred stock without shareholder approval,
Southern Missouri'sBancorp's charter and bylaws contain a number of provisions which may have the effect of delaying, deferring or preventing a change in control of
Southern Missouri.Bancorp. See "Comparison of Shareholder Rights."
COMPARISON OF SHAREHOLDER RIGHTS
Tammcorp is incorporated under the laws of the State of Illinois. Southern Missouri isSM Bancshares and Bancorp are both incorporated under the laws of the State of Missouri. The rights of holders of Tammcorp stock are governed by the laws of the state of Illinois and Tammcorp's articles of incorporation and bylaws. The rights of holders of Southern MissouriSM Bancshares common stock are governed by the laws of the state of Missouri and Southern Missouri'sSM Bancshares' articles of incorporation and bylaws. The rights of holders of Bancorp stock are governed by the laws of the state of Missouri and Bancorp's articles of incorporation and bylaws. Consequently, after the merger, the rights of former shareholders of TammcorpSM Bancshares who receive shares of Southern MissouriBancorp common stock in the merger will be determined by reference to Southern Missouri'sBancorp's articles of incorporation and bylaws and Missouri law.
This section describes certain differences between the rights of TammcorpSM Bancshares shareholders and Southern MissouriBancorp shareholders, including those which may be material. This section does not include a complete description of all differences among the rights of these shareholders, nor does it include a complete description of the specific rights of these shareholders. In addition, the identification of some of the differences in the rights of these shareholders is not intended to indicate that other differences that are equally important do not exist. The discussion in this section is qualified in its entirety by reference to the General and Business Corporation Law of Missouri (which we refer to as the MGBCL) and the IBCA,MGBCL, and to Southern Missouri'sBancorp's articles of incorporation and bylaws and Tammcorp'sSM Bancshares' articles of incorporation and bylaws. Copies of Southern Missouri'sBancorp's articles of incorporation and bylaws have been filed by Southern MissouriBancorp with the SEC. See "Where You Can Find More Information." Copies of Tammcorp'sSM Bancshares' articles of incorporation and bylaws are available upon written request from [●].
to Jerry Morgan, Chief Executive Officer, Southern Missouri Bancshares, Inc., 1292 Banning Street, Marshfield, MO 65706, or by phone at (417) 859-1292.
TAMMCORP | SOUTHERN MISSOURI | |
|
Capitalization: |
|
The articles of incorporation of TammcorpSM Bancshares authorize 221,500100,000 shares of capital stock, which is made up of (i) 20,000 sharessolely of common stock, $1.00 par value per share; (ii) 1,500 shares of Tammcorp Class A preferred stock, $180.00 par value per share; and (iii) 200,000 shares of undesignated preferred stock, $0.01 par value per share. As of December 31, 2016,September 30, 2017, there were 6,01739,356 shares of TammcorpSM Bancshares common stock and 1,416 shares of Tammcorp Class A preferred stock issued and outstanding. No shares of Tammcorp undesignated preferred stock are currently issued or outstanding. The board of directors is authorized to provide for the issuance of undesignated preferred stock in one or more classes or series and to fix the rights, designations, preferences related thereto.
| | The articles of incorporation of Southern MissouriBancorp authorize 12,000,000 shares of common stock, par value $0.01 per share, and 500,000 shares of preferred stock, par value $.01 per share. As of December 31, 2016,September 30, 2017, there were 7,450,0418,591,363 shares of Southern MissouriBancorp common stock and no shares of Southern MissouriBancorp preferred stock issued and outstanding. Southern Missouri'sBancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC."
Southern Missouri'sBancorp's board of directors is authorized to provide for the issuance of preferred stock in one or more classes or series and to fix the rights, designations, preferences related thereto.
|
Corporate Governance: |
|
The rights of the Tammcorp shareholders are governed by Illinois law and the articles of incorporation and bylaws of Tammcorp. | The rights of the Southern MissouriSM Bancshares shareholders are governed by Missouri law and the articles of incorporation and bylaws of Southern Missouri.SM Bancshares. | | The rights of the Bancorp shareholders are governed by Missouri law and the articles of incorporation and bylaws of Bancorp. |
| |
Convertibility of Stock: |
|
The common stock of TammcorpSM Bancshares is not convertible into any other securities of Tammcorp.SM Bancshares. The Tammcorp Class A preferred stock is convertible, at the election of the holder, at any time into a number of shares of Tammcorp common stock having a fair market value at the time of conversion equal to the par value of the Class A preferred stock that is being converted. The procedure for converting shares of the Tammcorp Class A preferred stock into shares of Tammcorp common stock is set forth in Tammcorp's articles of incorporation.
| | The common stock of Southern MissouriBancorp is not convertible into any other securities of Southern Missouri.Bancorp. |
| | |
| |
Preemptive Rights: |
Preemptive Rights: |
Preemptive rights are denied pursuant to Tammcorp'sSM Bancshares' articles of incorporation. | | Preemptive rights are denied pursuant to Southern Missouri'sBancorp's articles of incorporation. |
| |
Election of Directors: |
| |
Tammcorp'sSM Bancshares' articles of incorporation provide that the number of directors shall be three,nine, or such other number as may be fixed from time to time in the manner provided in the company's bylaws. TammcorpSM Bancshares currently has threenine directors.
The bylaws of TammcorpSM Bancshares provide that all elections for directors are to be determined by a plurality of the votes cast. Holders The bylaws of Tammcorp common stock and its Class A preferred stock vote together asSM Bancshares provide that, with the exception of board vacancies, directors shall be elected at the annual meeting of the shareholders for a single classone-year term. Shareholders of SM Bancshares are not entitled to cumulate votes in the election of directors. | | Southern Missouri'sBancorp's articles of incorporation provide that Southern MissouriBancorp will have the number of directors as may be fixed from time to time by its board of directors, provided that such number may not be less than five or more than 15. Southern MissouriBancorp currently has nine directors.
Shareholders of Southern MissouriBancorp are not entitled to cumulate votes in the election of directors. Except with respect to any directors who may be elected by any class or series of Southern MissouriBancorp preferred stock, Southern |
TAMMCORP | SOUTHERN MISSOURI |
| |
The bylaws of Tammcorp provide that, with the exception of board vacancies, directors shall be elected at the annual meeting of the shareholders for a one-year term. Shareholders of Tammcorp are not entitled to cumulate votes in the election of directors.
| Missouri'sBancorp's board of directors is divided into three classes, each of which contains one-third of the members of the board. The members of each class are elected for a term of three years, with the terms of office of all members of one class expiring each year so that approximately one-third of the total number of directors is elected each year. |
| |
Removal of Directors and Board Vacancies: |
| |
Tammcorp'sSM Bancshares' bylaws provide that the shareholders have the power by an affirmative vote of a majority of the outstanding shares then entitled to vote for the election of directors at any regular meeting or special meeting expressly called for that purpose, to remove any director from office, with or without cause.
Tammcorp'sSM Bancshares' bylaws also provide that, if the office of any director is or becomes vacant by reason of death, resignation, removal, or due to an increase in the number of directors, a majority of the surviving or remaining directors, though less than a quorum, may appoint a director to fill the vacancy until a successor has been duly elected at an annual meeting of Tammcorp'sSM Bancshares' shareholders.
| | Southern Missouri'sBancorp's articles of incorporation provide that any director or the entire board of directors may be removed from office only for cause and only upon the affirmative vote of the holders of least 80% of the total votes to which all of the shares then entitled to vote at a meeting of shareholders called for an election of directors are entitled, provided that if less than the entire board is to be removed, no individual director may be removed if the votes cast against his or her removal would be sufficient to elect him or her as a director if cumulatively voted in an election of directors.
Southern Missouri'sBancorp's articles of incorporation also provide that any vacancy on the board shall be filled by a majority of the directors then in office (even if less than quorum). Any director elected to fill a vacancy in any class will have a term that expires at the next election of directors by the shareholders.
Southern Missouri'sBancorp's articles of incorporation provide further that any increase or decrease in the number of directors is to be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible.
|
Amendment of Governing Documents: |
| |
Tammcorp'sSM Bancshares' articles of incorporation generally may be amended at any annual or special meeting of the TammcorpSM Bancshares shareholders by a vote of a majority of the
| | Bancorp's articles of incorporation generally may be amended upon approval by its board of directors and the holders of a majority of the outstanding shares of |
| | |
| | |
shares which are issued and outstanding and entitled to vote, except where a higher percentage is required by the articles of incorporation or by law. The provision of Tammcorp'sSM Bancshares' articles of incorporation which limits personal liability of Tammcorp'sSM Bancshares' directors may not be amended except upon the affirmative vote of the holders of two-thirds or more of the issued and outstanding shares of TammcorpSM Bancshares common stock which are entitled to vote. Holders of Tammcorp common stock and its Class A preferred stock will vote together as a single class on any proposal to amend Tammcorp's articles of incorporation. Tammcorp'sSM Bancshares' bylaws may be amended by the affirmative vote of a majority of the company's board of directors.
| Southern Missouri's articles of incorporation generally may be amended upon approval by its board of directors and the holders of a majority of the outstanding shares of Southern Missouri | Bancorp common stock. The amendment of the provisions of Southern Missouri'sBancorp's articles of incorporation pertaining to certain business combinations requires the approval of the holders of at least 80% of the voting power of the outstanding shares of stock entitled to vote generally in the election of directors, voting as a single class, and the holders of at least a majority of the voting power of the outstanding shares of such stock not beneficially owned by any interested shareholder or its affiliates and associates, voting together as a single class. In addition, an amendment of the provisions of Southern Missouri'sBancorp's articles of incorporation relating to the number, classification, election and removal of directors also requires the affirmative vote of the holders of at least 80% of the total votes to which all of the shares then |
TAMMCORP | SOUTHERN MISSOURI |
| |
| entitled to vote at a meeting of shareholders called for an election of directors are entitled, unless the amendment has been approved by Southern Missouri'sBancorp's board of directors by a 66 2/3% vote. Southern Missouri'sBancorp's bylaws may be amended either by its board of directors, by a vote of two-thirds of the board, or by Southern Missouri'sBancorp's shareholders, by the vote of the holders of at least 80% of the outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class.
|
| |
Shareholder Actions; Vote Requirements; Voting Limitations: |
| |
Tammcorp's bylaws provide that each shareholder shall have one vote for each share of stock entitled to vote under the provisions of the articles of incorporation (which includes shares of Tammcorp common stock and its Class A preferred stock) that are registered in such shareholder's name in the records of Tammcorp. All matters, except as otherwise required by law, Tammcorp's articles of incorporation or bylaws, shall be determined by a majority of the votes cast.
Under Illinois law, the affirmative vote of the holders of at least two-thirds of the outstanding shares of the corporation entitled to vote is required to approve a merger or other fundamental business transaction.
Each share of Tammcorp common stock has one vote for each matter properly brought before the shareholders. Each share of Tammcorp Class A preferred stock has one vote (voting together as a single class with the common shareholders) for each matter properly brought before a shareholders' meeting.
Tammcorp's bylaws provide that special shareholders' meetings may be called by Tammcorp's Chairman of the Board (if any), its President, or by the vote of a majority of Tammcorp's board of directors. Special meetings of Tammcorp's shareholders may also be called by any shareholder owing at least one-fifth of all of the issued and outstanding shares of capital stock of the Tammcorp which are entitled to vote for the election of directors.
|
Missouri law and Southern Missouri'sSM Bancshares' bylaws provide that on all matters, the affirmative vote of the holders of a majority of the shares entitled to vote with respect to the matter and represented in person or by proxy at a meeting of stockholders at which a quorum is present, will be the act of the shareholders unless the vote of a greater number is required by law, the articles of incorporation, or the bylaws. Under Missouri law, the affirmative vote of the holders of at least two-thirds of the outstanding shares of the corporation entitled to vote is required to approve a merger or other fundamental business transaction. Southern Missouri'sThe MGBCL contains a business combination statute that prohibits a business combination between a corporation and an interested shareholder (one who beneficially owns 20% or more of the corporation's outstanding voting stock or who is an affiliate or associate of the corporation and at any time within the previous five years was the beneficial owner of 20% or more of the corporation's outstanding voting stock) for a period of five years after the interested shareholder first becomes an interested shareholder, unless the business combination or the acquisition of stock that resulted in the interested shareholder becoming an interested shareholder is approved by the board of directors on or before the date that the interested shareholder became an
| | Missouri law and Bancorp's bylaws provide that on all matters, the affirmative vote of the holders of a majority of the shares entitled to vote with respect to the matter and represented in person or by proxy at a meeting of stockholders at which a quorum is present, will be the act of the shareholders unless the vote of a greater number is required by law, the articles of incorporation, or the bylaws. Under Missouri law, the affirmative vote of the holders of at least two-thirds of the outstanding shares of the corporation entitled to vote is required to approve a merger or other fundamental business transaction. Bancorp's articles of incorporation provides that certain business combinations (for example, mergers or consolidations, significant asset sales and significant stock issuances) involving "interested shareholders" of Southern MissouriBancorp require, in addition to any vote required by law, the approval of (i) the holders of at least 80% of the voting power of the outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class, and (ii) the holders of at least a majority of the voting power of the outstanding shares of such stock not beneficially owned by the interested shareholder and its affiliates and associates, voting together as a single class, unless a majority of the whole board has approved a memorandum of understanding |
| | |
| | |
interested shareholder or unless the corporation has exempted itself from the statute pursuant to a provision in its original articles of incorporation or, subject to certain conditions, a shareholder-approved bylaw amendment. After the five-year period has elapsed, a corporation subject to the statute may not consummate a business combination with an interested shareholder unless the transaction has been approved by the holders of a majority of the voting stock excluding shares beneficially owned by the interested shareholder and its affiliates and associates. This approval requirement need not be met if certain fair price and terms criteria have been satisfied. We are subject to the Missouri business combination statute. Each share of SM Bancshares common stock has one vote for each matter properly brought before the shareholders. The MGBCL contains a control share acquisition statute which, in general terms, provides that where a shareholder acquires issued and outstanding shares of a corporation's voting stock (referred to as control shares) within one of several specified ranges (one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more), approval by shareholders of the control share acquisition must be obtained before the acquiring shareholder may vote the control shares. The required shareholder vote is a majority all votes entitled to be cast, excluding "interested shares," defined as shares held by the acquiring person, officers of the corporation and employees who are also directors of the corporation. A corporation may opt-out of the control share statute through a provision in its articles of incorporation or bylaws, which we have not done. Accordingly, the Missouri control share acquisition statute applies to acquisitions of shares of our common stock. SM Bancshares' bylaws provide that special meetings of shareholders may only be called by SM Bancshares' board of directors. | | with the interested shareholder with respect to, or on substantially the same terms as, the proposed business combination prior to the time the interested shareholder became an interested shareholder. An "interested shareholder" for purposes of this provision generally means a person who is a 10% or greater shareholder of Southern MissouriBancorp or who is an affiliate or associate of Southern MissouriBancorp and at any time within the prior two years was a 5% or greater shareholder of Southern Missouri.Bancorp. The MGBCL contains a business combination statute that prohibits a business combination between a corporation and an interested shareholder (one who beneficially owns 20% or more of the corporation's |
| outstanding voting stock or who is an affiliate or associate of the corporation and at any time within the previous five years was the beneficial owner of 20% or more of the corporation's outstanding voting stock) for a period of five years after the interested shareholder first becomes an interested shareholder, unless the business combination or the acquisition of stock that resulted in the interested shareholder becoming an interested shareholder is approved by the board of directors on or before the date that the interested shareholder became an interested shareholder or unless the corporation has exempted itself from the statute pursuant to a provision in its original articles of incorporation or, subject to certain conditions, a shareholder-approved bylaw amendment. After the five-year period has elapsed, a corporation subject to the statute may not consummate a business combination with an interested shareholder unless the transaction has been approved by the holders of a majority of the voting stock excluding shares beneficially owned by the interested shareholder and its affiliates and associates. This approval requirement need not be met if certain fair price and terms criteria have been satisfied. We are subject to the Missouri business combination statute. Each share of Southern MissouriBancorp common stock has one vote for each matter properly brought before the shareholders, provided that under Southern Missouri'sBancorp's articles of incorporation, any person who beneficially owns in excess of 10% of the outstanding shares of Southern MissouriBancorp common stock may not vote the excess shares without the prior approval of a majority of the whole board (defined as the total number of directors Southern MissouriBancorp would have if there were no vacancies on its board). The MGBCL contains a control share acquisition statute which, in general terms, provides that where a shareholder acquires issued and outstanding shares of a corporation's voting stock (referred to as control shares) within one of several specified ranges (one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more), approval by |
| | |
| | shareholders of the control share acquisition must be obtained before the acquiring shareholder may vote the control shares. The required shareholder vote is a majority all votes entitled to be cast, excluding "interested shares," defined as shares held by the acquiring person, officers of the corporation and employees who are also directors of the corporation. A corporation may opt-out of the control share statute through a provision in its articles of incorporation or bylaws, which we have not done. Accordingly, the Missouri control share acquisition statute applies to acquisitions of shares of our common stock. |
| |
| Southern Missouri'sBancorp's bylaws provide that special meetings of shareholders may only be called by Southern Missouri'sBancorp's board of directors. |
| |
Indemnification; Limitation of Director Liability: |
| |
Tammcorp'sSM Bancshares' articles of incorporation permit TammcorpSM Bancshares to agree to the terms and conditions upon which any director, officer, employee or agent of TammcorpSM Bancshares may be indemnified.
Tammcorp'sSM Bancshares' bylaws require the corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Tammcorp)SM Bancshares) by reason of the fact that such person is or was a director or officer of the Tammcorp,SM Bancshares, or is or was serving at the request of the TammcorpSM Bancshares as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorney fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Tammcorp,SM Bancshares, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
With respect to actions by or in the right of Tammcorp,SM Bancshares, the bylaws provide that TammcorpSM Bancshares must indemnify any person who was or is a party or is threatened to be made a party to such an action because of the fact that such person is or was a director or officer of Tammcorp,SM Bancshares, or is or was serving at the request of Tammcorp,SM Bancshares, as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise against expenses, including attorney fees and amounts paid in settlement, actually and reasonably incurred by such person in connection with the defense or settlement of the action or suit if he or she acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of Tammcorp. Notwithstanding the foregoing, no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for gross negligence or willful misconduct in the performance of his or her duty to Tammcorp unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability and in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity | | Southern Missouri'sBancorp's articles of incorporation require Southern MissouriBancorp to indemnify any present or former director or executive officer of Southern MissouriBancorp or any subsidiary of Southern MissouriBancorp against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid in settlement and reasonably incurred by such person in connection with any threatened, pending or completed civil, criminal, administrative or investigative action, suit, proceeding or claim (including any action by or in the right of Southern MissouriBancorp or a subsidiary) by reason of the fact that such person is or was serving in such capacity; provided, however, that no such person may be indemnified on account of (i) conduct which is finally adjudged to have been knowingly fraudulent or deliberately dishonest or to have constituted willful misconduct, or (ii) an accounting for profits pursuant to Section 16(b) of the Exchange Act. Southern Missouri'sBancorp's articles of incorporation permit Southern Missouri,Bancorp, to the extent its board of directors deems appropriate, to indemnify any present or former nonexecutive officer, or employee or agent of Southern MissouriBancorp or any subsidiary or any person who was serving at the request of Southern MissouriBancorp as a director, officer, employee or agent of another entity against any and all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement and reasonably incurred by such person in connection with any threatened, pending or completed civil, criminal, administrative or investigative action, suit, proceeding or claim (including any action by or in the right of Southern MissouriBancorp or a subsidiary) by reason of the fact that such person is or was serving in such capacity; provided, however, that no such person may be indemnified on account of (i) conduct which is finally adjudged to have been knowingly fraudulent or deliberately dishonest or to have constituted willful misconduct, or (ii) an accounting for profits pursuant to Section 16(b) of the Exchange Act.
|
| | |
| |
or settlement of the action or suit if he or she acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of SM Bancshares. Notwithstanding the foregoing, no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for gross negligence or willful misconduct in the performance of his or her duty to SM Bancshares unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability and in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. Tammcorp'sSM Bancshares' bylaws permit (but do not require) it to give further indemnity, in addition to the indemnity required above, to any person who is or was a director, officer, employee, or agent, or to any person who is or was serving at the request of TammcorpSM Bancshares as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, provided such further indemnity is either (i) authorized, directed, or provided for in Tammcorp'sSM Bancshares' articles of incorporation; (ii) authorized, directed, or provided for in bylaws or in any agreement of TammcorpSM Bancshares which has been adopted by the shareholders of Tammcorp,SM Bancshares, and provided further that no such indemnity shall indemnify any person from or on account of such person's conduct which has been finally adjudged to have been knowingly fraudulent, deliberately dishonest, or willful misconduct.
The articles of incorporation provides that no director of TammcorpSM Bancshares will be personally liable to TammcorpSM Bancshares or its shareholders for breach of fiduciary duty as a director, except for liability of a director for (i) a breach of a director's duty of loyalty to TammcorpSM Bancshares or its shareholders, (ii) an act or omission not in good faith that constitutes a breach of duty of the director to TammcorpSM Bancshares or an act or omission that involves intentional misconduct or a knowing violation of the law, (iii) a transaction from which a director receives an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's office, or (iv) an act or omission for which the liability of a director is expressly provided for by an applicable statute. | | accounting for profits pursuant to Section 16(b) of the Exchange Act. |
| | |
Advance Notice Regarding Shareholder Proposals and Shareholder Nominations of Candidates for Election to the Board of Directors: |
| |
Tammcorp'sSM Bancshares' articles of incorporation and bylaws do not require advance notice regarding shareholder proposals or shareholder nominations of candidates for election of to Tammcorp'sSM Bancshares' board of directors at its annual shareholder meetings. | | Southern Missouri'sBancorp's bylaws provide that it must receive written notice of any shareholder proposal for business at an annual meeting of shareholders not less than 90 days or more than 120 days before the anniversary of the
|
| | |
| | |
annual shareholder meetings. | | preceding year's annual meeting. If the date of the current year annual meeting is advanced by more than 20 days or delayed by more than 60 days from the anniversary date of the preceding year's annual meeting, Southern MissouriBancorp must receive written notice of the proposal no earlier than the close of business on the 120th day prior to the date of the annual meeting and no later than the close of business on the later of the 90th day prior to the annual meeting or the 10th day following the day on which notice of the date of the meeting is mailed or public announcement of the date of the meeting date is first made, whichever occurs first. Southern Missouri'sBancorp's bylaws also provide that it must receive written notice of any shareholder director
|
| |
| nomination for a meeting of shareholders not less than 90 days or more than 120 days before the date of the meeting. If, however, less than 100 days' notice or prior public announcement of the date of the meeting is given or made to shareholders, Southern MissouriBancorp must receive notice of the nomination no later than the tenth day following the day on which notice of the date of the meeting is mailed or public announcement of the date of the meeting date is first made, whichever occurs first. |
The validity of the shares of Southern MissouriBancorp common stock to be issued in connection with the merger has been passed upon by Silver, Freedman, Taff & Tiernan LLP, Washington, D.C. Certain U.S. federal income tax consequences of the merger have been passed upon by Silver, Freedman, Taff & Tiernan LLP, Washington, D.C., and by Fenimore, Kay, HarrisonCarnahan, Evans, Cantwell & Ford, LLP, Austin, Texas.Brown, P.C., Springfield, Missouri.
The consolidated financial statements of Southern Missouri Bancorp Inc. appearing in Southern Missouri Bancorp, Inc.'sBancorp's Annual Report (Form 10-K) as of and for the years ended June 30, 20162017 and 20152016 and for each year in the three-year period ended June 30, 20162017 have been audited by BKD, LLP, an independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Southern MissouriBancorp files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy these filings at the public reference room of the SEC located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Southern Missouri'sBancorp's SEC filings are also available to the public from commercial document retrieval services and at the web site maintained by the SEC at "www.sec.gov." You may also obtain copies of this information by mail from the Public Reference Section of the SEC, at 100 F Street, N.W., Washington, D.C. 20549, at prescribed rates.
Southern MissouriBancorp filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933 with respect to the shares of Southern MissouriBancorp common stock to be issued in the merger to the holders of TammcorpSM Bancshares common stock and Class A preferred stock. This proxy statement/prospectus is a part of that registration statement and constitutes a prospectus of Southern Missouri
Bancorp in addition to being a proxy statement of TammcorpSM Bancshares for the special meeting of Tammcorp'sSM Bancshares' shareholders. As permitted by SEC rules, this proxy statement/prospectus does not contain all the information contained in the registration statement or the exhibits to the registration statement. The additional information may be inspected and copied as set forth above.
The SEC permits the incorporation by reference of information regarding Southern MissouriBancorp into this proxy statement/prospectus, which means that important business and financial information about Southern MissouriBancorp can be disclosed to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this document, and later information that Southern MissouriBancorp files with the SEC will update and supersede that information. This document incorporates by reference the documents set forth below that Southern MissouriBancorp has previously filed with the SEC and all documents filed by Southern MissouriBancorp with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this proxy statement/prospectus and before the date of the special meeting.
Southern MissouriBancorp Filings (SEC file number 000-23406)
This proxy statement/prospectus incorporates by reference the documents listed below that Southern MissouriBancorp has previously filed with the SEC (excluding any portion of these documents that has been furnished to and deemed not to be filed with the SEC).
Report(s) | | Period(s) of Report(s) or Date(s) Filed |
· Annual Report on Form 10-K | | For the fiscal year ended June 30, 20162017 |
· Quarterly Reports on Form 10-Q | | For the quarters ended September 30, 2016 and December 31, 20162017 |
· Current Reports on Form 8-K | | Filed on July 20, 2016, July 27, 2016, September 22, 2016,August 21, 2017, October 19, 2016, November 1, 2016, November 21, 2016, January 13, 2017, January 19, 2017 and April 20,November 1, 2017 |
Except where the context otherwise indicates, Southern MissouriBancorp supplied all information contained or incorporated by reference in this document relating to Southern MissouriBancorp and TammcorpSM Bancshares supplied all information contained in this proxy statement/prospectus relating to Tammcorp.SM Bancshares.
You can obtain any of the documents incorporated by reference from the SEC. The documents incorporated by reference also are available from us without charge. Exhibits will not be sent, however, unless those exhibits have specifically been incorporated by reference into this document. You can obtain documents incorporated by reference into this document by writing or telephoning Southern MissouriBancorp at the address and telephone number that follows:
Southern MissouriBancorp Documents | |
Attention: Investor Relations | |
Southern Missouri Bancorp, Inc. | |
2991 Oak Grove Road | |
Poplar Bluff, Missouri 2880163901 | |
(573) 778-1800 | |
If you would like to request documents from Southern Missouri,Bancorp, you must do so by _________________, 2017January 8, 2018 to receive them before the special meeting of Tammcorp'sSM Bancshares' shareholders.
Neither Southern MissouriBancorp nor TammcorpSM Bancshares has authorized anyone to give any information or make any representation about the merger or the companies that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that have been incorporated in this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. The information contained in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus unless the information specifically indicates that another date applies.