We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Southern Missouri (SMBC) Up on Fortune Financial Buyout
Read MoreHide Full Article
Southern Missouri Bancorp Inc. (SMBC - Free Report) acquired Fortune Financial Corporation in a stock and cash transaction (at a 60:40 ratio) worth $31.7 million. Since this announcement, shares of Southern Missouri have gained 1.1%.
Following the completion of the deal, the combined entity now operates from 52 locations across Missouri, Arkansas and Illinois.
Greg Steffens, president and CEO, Southern Missouri said, “We want to welcome the FortuneBank team members and customers to the Southern Bank family. We are looking forward to being a part of these growing markets in the St. Louis MSA and want to become a dependable partner for our customers there by placing an emphasis on impeccable customer service and innovative technology. We’re excited to help people do big things in and around St. Louis.”
Terms
Per the deal terms, each share of Fortune Financial stock held immediately before the merger completion is being exchanged for 0.3025 shares of Southern Missouri stock or $13.31 in cash (as adjusted on Fortune Financial’s capital and total number of shares outstanding immediately before the deal closure) per shareholder discretion, subject to the proration and allocation processes set forth in the merger agreement.
Daniel Jones, founder, chairman and CEO, Fortune Financial, joined the boards of directors of Southern Missouri and Southern Bank.
Financial Benefits
Per previous disclosure during the deal announcement, Southern Missouri expects the deal to be 8.8% accretive to its fiscal 2022 (ended Jun 30) earnings and 9.1% to fiscal 2023 earnings. This excludes certain one-time merger-related charges, including Southern Missouri’s additional provision for credit losses as required under CECL. The deal is anticipated to result in 30% cost savings. Additionally, at closure, the tangible book value per common share is expected to be diluted 3.8%.
Conclusion
The deal will aid Southern Missouri to foray into the St. Louis, MO, Metropolitan Statistical Area as Fortune Financial operates two branches in Jefferson and St. Louis Counties in the state. On a pro forma basis, following the completion of the deal, the consolidated company will have total assets of $3.2 billion, total net loans of $2.6 billion and total deposits of $2.8 billion.
At a time when all the banks, big or small, face a low interest rate environment and are trying to improve the revenue mix with technology upgrades, such opportunistic buyouts are becoming a norm. In 2020, Southern Missouri had acquired Central Federal Bancshares, Inc. for $22 million. Such strategic expansion moves are expected to be accretive to earnings and support profitability.
In the past six months, shares of Southern Missouri have rallied 18%, outperforming the industry’s growth of 10.4%.
Several companies from the finance sector are making consolidation efforts to improve competencies to counter the low interest-rate environment.
Citizens Financial Group, Inc. (CFG - Free Report) closed the acquisition of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A., N.A. on Feb 18, 2022.
The acquisition, which was announced in May 2021, expands Citizens Financial’s physical footprint in numerous strategic markets, including New York, and adds more than 800,000 customer accounts.
Webster Financial Corporation (WBS - Free Report) inked a definitive agreement to acquire Bend Financial, Inc., a cloud-based health savings accounts (HSA) solution provider.
The buyout will help HSA Bank, a Webster Bank division, to leverage Bend Financial's client-facing experience that utilizes cloud-native technology and user-centered design. This will offer a modern and simplified approach to HSA management and engagement.
To amplify its ambit of e-commerce offerings to companies of all sizes in any industry, Fidelity National Information Services (FIS - Free Report) announced that it acquired Payrix, an innovative financial technology firm. Terms of the deal are undisclosed. The acquisition is not expected to affect FIS’s fourth-quarter and 2021 financial results.
Pioneering in issuing, deposit, lending, business-to-business and global payments solutions, Fidelity will integrate its portfolio of banking and payments assets with Payrix’s cutting-edge embedded payments solutions to create state-of-the-art and differentiated experiences for businesses of any size.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Southern Missouri (SMBC) Up on Fortune Financial Buyout
Southern Missouri Bancorp Inc. (SMBC - Free Report) acquired Fortune Financial Corporation in a stock and cash transaction (at a 60:40 ratio) worth $31.7 million. Since this announcement, shares of Southern Missouri have gained 1.1%.
Following the completion of the deal, the combined entity now operates from 52 locations across Missouri, Arkansas and Illinois.
Greg Steffens, president and CEO, Southern Missouri said, “We want to welcome the FortuneBank team members and customers to the Southern Bank family. We are looking forward to being a part of these growing markets in the St. Louis MSA and want to become a dependable partner for our customers there by placing an emphasis on impeccable customer service and innovative technology. We’re excited to help people do big things in and around St. Louis.”
Terms
Per the deal terms, each share of Fortune Financial stock held immediately before the merger completion is being exchanged for 0.3025 shares of Southern Missouri stock or $13.31 in cash (as adjusted on Fortune Financial’s capital and total number of shares outstanding immediately before the deal closure) per shareholder discretion, subject to the proration and allocation processes set forth in the merger agreement.
Daniel Jones, founder, chairman and CEO, Fortune Financial, joined the boards of directors of Southern Missouri and Southern Bank.
Financial Benefits
Per previous disclosure during the deal announcement, Southern Missouri expects the deal to be 8.8% accretive to its fiscal 2022 (ended Jun 30) earnings and 9.1% to fiscal 2023 earnings. This excludes certain one-time merger-related charges, including Southern Missouri’s additional provision for credit losses as required under CECL. The deal is anticipated to result in 30% cost savings. Additionally, at closure, the tangible book value per common share is expected to be diluted 3.8%.
Conclusion
The deal will aid Southern Missouri to foray into the St. Louis, MO, Metropolitan Statistical Area as Fortune Financial operates two branches in Jefferson and St. Louis Counties in the state. On a pro forma basis, following the completion of the deal, the consolidated company will have total assets of $3.2 billion, total net loans of $2.6 billion and total deposits of $2.8 billion.
At a time when all the banks, big or small, face a low interest rate environment and are trying to improve the revenue mix with technology upgrades, such opportunistic buyouts are becoming a norm. In 2020, Southern Missouri had acquired Central Federal Bancshares, Inc. for $22 million. Such strategic expansion moves are expected to be accretive to earnings and support profitability.
In the past six months, shares of Southern Missouri have rallied 18%, outperforming the industry’s growth of 10.4%.
Image Source: Zacks Investment Research
Currently, Southern Missouri carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Firms
Several companies from the finance sector are making consolidation efforts to improve competencies to counter the low interest-rate environment.
Citizens Financial Group, Inc. (CFG - Free Report) closed the acquisition of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A., N.A. on Feb 18, 2022.
The acquisition, which was announced in May 2021, expands Citizens Financial’s physical footprint in numerous strategic markets, including New York, and adds more than 800,000 customer accounts.
Webster Financial Corporation (WBS - Free Report) inked a definitive agreement to acquire Bend Financial, Inc., a cloud-based health savings accounts (HSA) solution provider.
The buyout will help HSA Bank, a Webster Bank division, to leverage Bend Financial's client-facing experience that utilizes cloud-native technology and user-centered design. This will offer a modern and simplified approach to HSA management and engagement.
To amplify its ambit of e-commerce offerings to companies of all sizes in any industry, Fidelity National Information Services (FIS - Free Report) announced that it acquired Payrix, an innovative financial technology firm. Terms of the deal are undisclosed. The acquisition is not expected to affect FIS’s fourth-quarter and 2021 financial results.
Pioneering in issuing, deposit, lending, business-to-business and global payments solutions, Fidelity will integrate its portfolio of banking and payments assets with Payrix’s cutting-edge embedded payments solutions to create state-of-the-art and differentiated experiences for businesses of any size.