8-K/A

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

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FORM 8-K/A ****

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported)       January 20, 2023

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SOUTHERN MISSOURI BANCORP, INC.

(Exact name of registrant as specified in its charter)

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Missouri	000-23406	43-1665523
(State or other	(Commission File No.)	(IRS Employer
jurisdiction of incorporation)		Identification Number)

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2991 Oak Grove Road, Poplar Bluff, Missouri	63901
(Address of principal executive offices)	(Zip Code)

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Registrant's telephone number, including area code:    (573) 778-1800

N/A

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SMBC	The NASDAQ Stock Market LLC

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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​ Explanatory Note

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As previously disclosed, effective January 20, 2023, Southern Missouri Bancorp, Inc. (“Southern Missouri”) acquired Citizens Bancshares Co. (“Citizens”) pursuant to the Agreement and Plan of Merger, dated as of September 20, 2022, by and among Southern Missouri, Southern Missouri Acquisition VI Corp (“Merger Sub”) and Citizens. At closing, Citizens merged with and into Merger Sub, followed by the merger of Merger Sub with and into Southern Missouri (collectively, the “Merger”). This Amendment on Form 8-K/A (“Form 8-K/A”) is being filed to amend Item 9.01 of Southern Missouri’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2023 (the “Original Form 8-K”) in order to include the historical financial statements of Citizens required by Item 9.01(a) of Form 8-K and the pro forma financial information required by Item 9.01(b) of Form 8-K. Except as described in this Form 8-K/A, all other information in the Original Form 8-K remains unchanged.

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Item 9.01  Financial Statements and Exhibits

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(a)

The audited consolidated balance sheets of Citizens as of December 31, 2021 and 2020 and audited consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to such financial statements are included as Exhibit 99.2 to this report and incorporated by reference from the amendment to Southern Missouri’s Registration Statement on S-4 filed with the Securities and Exchange Commission on November 4, 2022.

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The unaudited consolidated balance sheets of Citizens as of September 30, 2022 and December 31, 2021, the unaudited consolidated statements of income and comprehensive income of Citizens for the nine months ended September 30, 2022 and 2021, the unaudited consolidated statements of changes in stockholders' equity of Citizens for the nine months ended September 30, 2022 and 2021, and the unaudited consolidated statements of cash flows of Citizens for the nine months ended September 30, 2022 and 2021 are included as Exhibit 99.3 to this report and incorporated herein by reference.

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(b)

The unaudited pro forma condensed combined consolidated balance sheet of Southern Missouri as of September 30, 2022, the unaudited pro forma condensed combined consolidated statement of income for the three month period ended September 30, 2022, giving effect to the Merger as if it had occurred on July 1, 2022, and the unaudited pro forma condensed combined statement of income of Southern Missouri for the year ended June 30, 2022, giving effect to the Merger as if it had occurred on July 1, 2021, as well as the accompanying notes thereto, are included as Exhibit 99.4 to this report, and incorporated herein by reference.

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(c)	Not applicable.

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(d)	The following exhibits are included with this report:

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Exhibit No.		Description
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23.2	​	Consent of RSM US LLP
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99.3	​	Unaudited consolidated balance sheets of Citizens as of September 30, 2022 and December 31, 2021 and unaudited consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows of Citizens for the nine months ended September 30, 2022 and 2021
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99.4	​	Unaudited pro forma condensed combined balance sheet of Southern Missouri as of September 30, 2022 and unaudited pro forma condensed combined statements of income of Southern Missouri for the three months ended September 30, 2022 and year ended June 30, 2022
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104	​	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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​ SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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	SOUTHERN MISSOURI BANCORP, INC.
Date: May 9, 2023	By:	/s/ Greg A. Steffens
		Greg A. Steffens
		Chairman and Chief Executive Officer

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Exhibit 23.2

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Consent of Independent Auditor

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We consent to the inclusion in this Current Report on Form 8-K/A of Southern Missouri Bancorp, Inc. of our report dated March 23, 2022, relating to the consolidated financial statements of Citizens Bancshares Company.

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/s/ RSM US LLP

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Kansas City, Missouri

May 9, 2023

Exhibit 99.3

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CITIZENS BANCSHARES COMPANY

UNAUDITED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

(Dollars in thousands)

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​	​	​	​	​	​	​
​	​	​	September 30, 2022	​	​	December 31, 2021
​	​	​	​	​	​	​
​	​	​	​	​	​	​
Assets	​	​	​	​	​	​
Cash and due from banks	​	$	257,081	​	$	248,448
Securities available for sale	​	​	228,710	​	​	208,759
Loans, net	​	​	453,069	​	​	465,348
Cash surrender value of life insurance	​	​	21,622	​	​	21,295
Premises and equipment, net	​	​	14,135	​	​	14,705
Accrued interest receivable	​	​	2,896	​	​	2,116
Other real estate owned	​	​	6,428	​	​	7,383
Federal Home Loan Bank stock	​	​	1,174	​	​	1,183
Deferred income taxes, net	​	​	6,849	​	​	5,047
Other assets	​	​	6,930	​	​	6,832
TOTAL ASSETS	​	$	998,894	​	$	981,116
​	​	​	​	​	​	​
Liabilities and Stockholders' Equity	​	​	​	​	​	​
Deposits	​	​	​	​	​	​
Non-interest bearing	​	$	211,366	​	$	251,586
NOW, money market, and savings	​	​	535,285	​	​	456,384
Certificates of deposit	​	​	122,052	​	​	135,492
Total deposits	​	​	868,703	​	​	843,462
Securities sold under agreement to repurchase	​	​	29,444	​	​	27,621
Accrued interest payable	​	​	67	​	​	80
Other liabilities	​	​	5,673	​	​	6,304
TOTAL LIABILITIES	​	​	903,887	​	​	877,467
​	​	​	​	​	​	​
​	​	​	​	​	​	​
Common stock, $0.01 par value; 5,000,000 shares authorized; 2,561,600 shares issued; 2,346,915 shares outstanding September 30, 2022 and December 31, 2021, respectively	​	​	26	​	​	26
Additional paid-in capital	​	​	8,832	​	​	8,832
Retained earnings	​	​	101,510	​	​	97,798
Treasury stock, at cost (September 30, 2022 and December 31, 2021, 214,685 shares)	​	​	(4,900)	​	​	(4,900)
Accumulated other comprehensive (loss) income	​	​	(10,461)	​	​	1,893
TOTAL STOCKHOLDERS' EQUITY	​	​	95,007	​	​	103,649
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	​	$	998,894	​	$	981,116

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CITIZENS BANCSHARES COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND SEPTEMBER 30, 2021

(Dollars in thousands)

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​	​	​	​	​	​	​
​	​	​	Nine Months ended
​	​	​	September 30, 2022	​	​	September 30, 2021
​	​	​	​	​	​	​
Interest Income:	​	​	​	​	​	​
Loans, including fees	​	$	16,100	​	$	16,799
Securities	​	​	3,937	​	​	2,340
Federal funds sold and other	​	​	1,771	​	​	232
TOTAL INTEREST INCOME	​	​	21,808	​	​	19,371
Interest Expense:	​	​	​	​	​	​
Deposits	​	​	1,414	​	​	1,280
Securities sold under agreement to repurchase and federal funds purchased	​	​	99	​	​	28
Other borrowings	​	​	9	​	​	473
TOTAL INTEREST EXPENSE	​	​	1,522	​	​	1,781
NET INTEREST INCOME	​	​	20,286	​	​	17,590
Provision for loan losses	​	​	51	​	​	(1,927)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	​	​	20,235	​	​	19,517
Noninterest income:	​	​	​	​	​	​
Service charges and fees	​	​	2,210	​	​	1,912
Wealth Management fees	​	​	1,613	​	​	1,730
Net gain on sale of securities	​	​	-	​	​	1,835
Net gain on sale of premises and equipment	​	​	72	​	​	35
Net gain on sale of other real estate	​	​	43	​	​	-
Increase in cash surrender value of life insurance	​	​	327	​	​	827
Other income	​	​	3,381	​	​	2,782
TOTAL NONINTEREST INCOME	​	​	7,646	​	​	9,121
Noninterest expense:	​	​	​	​	​	​
Salaries and employee benefits	​	​	10,743	​	​	10,624
Occupancy	​	​	3,590	​	​	3,826
FDIC assessments	​	​	235	​	​	310
Expenses on other real estate owned	​	​	132	​	​	502
Professional fees	​	​	527	​	​	377
Telephone, postage, and delivery	​	​	583	​	​	675
Advertising and marketing	​	​	283	​	​	225
Office supplies	​	​	93	​	​	107
Other operating expense	​	​	3,894	​	​	4,422
TOTAL NONINTEREST EXPENSE	​	​	20,080	​	​	21,068
INCOME BEFORE INCOME TAXES	​	​	7,801	​	​	7,570
Income Taxes	​	​	1,743	​	​	1,572
NET INCOME	​	$	6,058	​	$	5,998

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CITIZENS BANCSHARES COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND SEPTEMBER 30, 2021

(Dollars in thousands)

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​	​	​	​	​	​	​
​	​	​	Nine months ended
​		​	September 30, 2022		​	September 30, 2021
​	​	​	​	​	​	​
Net Income	​	$	6,058	​	$	5,998
Other comprehensive income (loss):	​	​		​	​
Unrealized holding losses arising during the period before tax	​	​	(16,448)	​	​	(3,476)
Tax benefit related to other comprehensive loss	​	​	4,094	​	​	865
Other comprehensive loss, net of tax	​	​	(12,354)	​	​	(2,611)
Comprehensive (Loss) Income	​	$	(6,296)	​	$	3,387

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CITIZENS BANCSHARES COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND SEPTEMBER 30, 2021

(Dollars in thousands)

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​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	For the nine months ended September 30, 2021
​		​	​	​		Additional	​		​	​	​	​	​	​	Accumulated Other	​	​	Total
​		​	Common	​		Paid-In	​		Retained	​		Treasury	​		Comprehensive	​		Stockholders'
​		​	Stock	​		Capital	​		Earnings	​		Stock	​		Income (Loss)	​		Equity
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
BALANCE AS OF DECEMBER 31, 2020	​	$	26	​	$	8,832	​	$	91,083	​	$	(4,900)	​	$	5,578	​	$	100,619
Net Income	​	​	-	​	​	-	​	​	5,998	​	​	-	​	​	-	​	​	5,998
Other comprehensive loss	​	​	-	​	​	-	​	​	-	​	​	-	​	​	(2,611)	​	​	(2,611)
BALANCE AS OF SEPTEMBER 30, 2021	​	$	26	​	$	8,832	​	$	97,081	​	$	(4,900)	​	$	2,967	​	$	104,006
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	For the nine months ended September 30, 2022
​		​	​	​		Additional	​		​	​	​	​	​	​	Accumulated Other	​	​	Total
​		​	Common	​		Paid-In	​		Retained	​		Treasury	​		Comprehensive	​		Stockholders'
​		​	Stock	​		Capital	​		Earnings	​		Stock	​		Income (Loss)	​		Equity
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
BALANCE AS OF DECEMBER 31, 2021	​	$	26	​	$	8,832	​	$	97,798	​	$	(4,900)	​	$	1,893	​	$	103,649
Net Income	​	​	-	​	​	-	​	​	6,058	​	​	-	​	​	-	​	​	6,058
Other comprehensive loss	​	​	-	​	​	-	​	​	-	​	​	-	​	​	(12,354)	​	​	(12,354)
Dividend	​	​	-	​	​	-	​	​	(2,346)	​	​	-	​	​	-	​	​	(2,346)
BALANCE AS OF SEPTEMBER 30, 2022	​	$	26	​	$	8,832	​	$	101,510	​	$	(4,900)	​	$	(10,461)	​	$	95,007

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CITIZENS BANCSHARES COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND SEPTEMBER 30, 2021

(Dollars in thousands)

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​	​	​	​	​	​	​
​	​	​	Nine months ended
​	​	​	September 30,
​	​	​	2022		​	2021
​	​	​	​	​	​	​
Cash Flows From Operating Activities:	​	​	​	​	​	​
Net Income	​	$	6,058	​	$	5,998
Adjustments to reconcile net income to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation	​	​	966	​	​	1,084
Provision for loan losses	​	​	51	​	​	(1,927)
Net gain on sale of other real estate	​	​	(43)	​	​	-
Write down on other real estate	​	​	-	​	​	350
Amortization of core deposit intangible	​	​	44	​	​	44
Net gain on sale of premises and equipment	​	​	(72)	​	​	(35)
Amortization of deferred loan origination costs, net of fees	​	​	(40)	​	​	(946)
Net amortization of securities	​	​	521	​	​	267
Net gain on sale of securities	​	​	-	​	​	(1,835)
Increase in cash surrender value of life insurance	​	​	(327)	​	​	(326)
Gain on redemption of life insurance	​	​	-	​	​	822
Deferred income taxes	​	​	2,292	​	​	954
Net increase in accrued interest receivable and other assets	​	​	(922)	​	​	(1,308)
Net decrease in accrued interest payable and other liabilities	​	​	(644)	​	​	(380)
Net cash provided by operating activities	​	​	7,884	​	​	2,762
​	​	​	​	​	​	​
Cash flows from investing activities:	​	​		​	​
Securities available for sale:	​	​	​	​	​	​
Purchases	​	​	(55,651)	​	​	-
Maturities, prepayments, and calls	​	​	18,731	​	​	22,393
Proceeds from sales	​	​	-	​	​	21,790
Net decrease in loans	​	​	12,270	​	​	32,309
Proceeds from sales of other real estate	​	​	998	​	​	-
Net change in Federal Home Loan Bank stock	​	​	9	​	​	(109)
Purchase of premises and equipment	​	​	(470)	​	​	(590)
Proceeds from sale of premises and equipment	​	​	144	​	​	2,867
Net cash (used in) provided by investing activities	​	​	(23,969)	​	​	78,660
​	​	​	​	​	​	​
Cash flows from financing activities:	​	​		​	​
Net increase in deposits	​	​	25,241	​	​	33,887
Net increase in securities sold under agreement to repurchase	​	​	1,823	​	​	823
Repayment of note payable	​	​	-	​	​	(12,500)
---	---	---	---	---	---	---
Dividends paid on common stock	​	​	(2,346)	​	​	-
Net cash provided by financing activities	​	​	24,718	​	​	22,210
​	​	​	​	​	​	​
Net increase in cash and due from banks	​	$	8,633	​	$	103,632
​	​	​	​	​	​	​
​	​	​	​	​	​	​
Beginning cash and due from banks	​	​	248,448	​	​	196,163
​	​	​	​	​	​	​
Ending cash and due from banks	​	$	257,081	​	$	299,795
​	​	​	​	​	​	​
​	​	​	​	​	​	​
​	​	​	​	​	​	​
​	​	​	​	​	​	​
Supplemental Information	​	​		​	​
Interest paid	​	$	1,535	​	$	1,697
Income taxes paid, net	​	​	828	​	​	228

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Exhibit 99.4

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

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On January 20, 2023, Southern Missouri Bancorp, Inc. (“Southern Missouri”) completed its previously announced acquisition of Citizens Bancshares Co. (“Citizens”) pursuant to the Agreement and Plan of Merger, dated September 20, 2022 (the “Merger Agreement”), by and among Southern Missouri, Southern Missouri Acquisition VI Corp (“Merger Sub”), a wholly owned subsidiary of Southern Missouri, and Citizens under which Citizens merged with and into Merger Sub, followed by the merger of Merger Sub with and into Southern Missouri (collectively, the “Merger”). Citizens was the parent company of Citizens Bank & Trust Company, which became a wholly owned subsidiary of Southern Missouri upon completion of the Merger and was subsequently merged with and into Southern Bank, a wholly owned subsidiary of Southern Missouri.

As a result of the Merger, each share of Citizens common stock held immediately prior to completion of the Merger was exchanged for 1.1755 shares of Southern Missouri common stock or $54.93 in cash (as adjusted based on Citizens’ capital and the total number of shares outstanding immediately prior to closing) at the election of the Citizens’ shareholders, subject to the proration and allocation procedures set forth in the Merger Agreement. Southern Missouri paid approximately $133.2 million in Merger consideration, inclusive of cash settlement of Citizens stock options, comprised of stock and cash at a 74:26 ratio.

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The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Southern Missouri and Citizens and has been prepared to illustrate the financial effect of the Merger. The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Southern Missouri and its subsidiaries and Citizens and its subsidiaries, as an acquisition by Southern Missouri of Citizens using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Citizens will be recorded by Southern Missouri at their respective fair values as of the date the Merger was completed.

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The unaudited pro forma condensed combined balance sheet gives effect to the transaction as if the transaction had occurred on September 30, 2022. The unaudited pro forma condensed combined income statements for the three-month period ended September 30, 2022, give effect to the transaction as if the transaction had become effective at July 1, 2022. The unaudited pro forma condensed combined income statement for the year ended June 30, 2022, gives effect to the transaction as if the transaction had become effective at July 1, 2021.

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This unaudited pro forma condensed combined financial information reflects the Merger based upon estimated acquisition accounting adjustments. Actual adjustments will be made as of the effective date of the Merger and, therefore, may differ from those reflected in the unaudited pro forma condensed combined financial information.

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Southern Missouri and Citizens have different fiscal years. Citizens’ fiscal year ends on December 31 of each year and Southern Missouri’s fiscal year ends on June 30 of each year. As the fiscal years differed by more than 93 days, pursuant to the rules of the Securities and Exchange Commission, Citizens’ financial information was adjusted for the purpose of preparing the unaudited pro forma condensed combined statements of income for the year ended June 30, 2022. The historical income statement information of Citizens used in the unaudited pro forma condensed combined statements of income for the year ended June 30, 2022, was prepared by taking the audited condensed combined income statement for the year ended December 31, 2021, subtracting the unaudited condensed combined income statement for the six months ended June 30, 2021, and adding the unaudited condensed combined income statement for the six months ended June 30, 2022.

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The determination of the fair values of Citizens’ assets and liabilities has been based on the net tangible and intangible assets of Citizens that existed as of the date of completion of the transaction. The value of the final purchase price of the Merger was based on the closing price of Southern Missouri common stock on the closing date of the Merger, with respect to the stock portion of the merger consideration. The closing price of Southern Missouri common stock of $47.32 on January 20, 2023, was used for purposes of presenting the unaudited pro forma condensed combined consolidated balance sheet at September 30, 2022.

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The unaudited pro forma condensed combined financial information includes estimated adjustments to record Citizens’ assets and liabilities at their respective fair values based on Southern Missouri’s management’s best estimate using the information available at this time. The pro forma adjustments may be revised as additional information becomes available and as additional analyses are performed. Increases or decreases in the fair value of certain balance sheet amounts and other items of Citizens as compared to the information presented in this document may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact the statement of income due to adjustments in yield and/or amortization of adjusted assets and liabilities.

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FASB issued ASU 2016-13, Financial Instruments – Credit Losses, also known as the current expected credit loss (“CECL”) standard, which requires that the measurement of all expected credit losses for financial assets reported at amortized cost and held at the reporting date be based on historical experience, current conditions, and reasonable and supportable forecasts. This standard requires financial institutions and other organizations to use forward-looking information to better inform their credit loss estimates. The standard was effective for Southern Missouri as of July 1, 2020, however it did not become effective for Citizens until January 1, 2023. Subsequent to its adoption, Southern Missouri ceased to maintain the incurred loss model framework. The pro forma balance sheet reflects an adjustment to estimate the impact of the application of ASU 2016-13 to the combined allowance for loan/credit losses as of September 30, 2022. The pro forma income statements reflect an adjustment as of the beginning of each period presented, to estimate the impact of the application of ASU 2016-13 to the combined provision for credit/loan losses.

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Further, in addition to ASU 2016-13 noted above, Southern Missouri has not identified all adjustments necessary to conform Citizens accounting policies to Southern Missouri’s accounting policies. As more information becomes available, Southern Missouri will perform a more detailed review of Citizens’ accounting policies. As a result of that review, differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined company’s financial information.

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The unaudited pro forma condensed combined financial information included are presented for informational purposes only and do not necessarily reflect the financial results of the combined company had the companies actually been combined at the beginning of each period presented. The adjustments included in this unaudited pro forma condensed combined financial information are preliminary and may be revised. This information also does not reflect the benefits of the expected cost savings and expense efficiencies, opportunities to earn additional revenue, potential impacts of current market conditions on revenues or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the Merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future. The following unaudited pro forma condensed combined consolidated financial information and related notes have been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of Southern Missouri contained in its Annual Report on Form 10-K for the fiscal year ended June 30, 2022 and its Quarterly Report on Form 10-K for the quarterly period ended September 30, 2022, filed with the Securities and Exchange Commission, and the historical consolidated financial statements and related notes of Citizens included in this Current Report on Form 8-K/A.

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CONDENSED COMBINED PRO FORMA STATEMENTS OF FINANCIAL CONDITION (Unaudited)

As of September 30, 2022

(in thousands)

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​	​	​	​	​	​	​	​	​	​	​	​	​
​		Southern Missouri			Citizens Bancshares			Pro Forma				​
​	​	Bancorp		​	Company		​	Adjustments		​	Pro Forma
ASSETS		​			​			​		​	​
Cash and cash equivalents	​	$	47,718	​	$	257,081	​	$	(34,761)	^1^​	$	270,038
Interest-bearing time deposits	​		2,018	​		—	​		—	​		2,018
Available-for-sale securities	​		235,116	​		228,710	​		—	​		463,826
Non-marketable securities - Federal Home Loan Bank and Federal Reserve Bank stock	​		19,290	​		1,174	​		—	​		20,464
​	​	​	​	​	​	​	​	​	​	​	​	​
Loans receivable	​		2,976,609	​		459,485	​		(13,546)	^2^​		3,422,548
Allowance for credit losses	​		(37,418)	​		(6,416)	​		118	^3^​		(43,716)
Loans receivable, net	​		2,939,191	​		453,069	​		(13,428)	​		3,378,832
Premises and equipment, net	​		70,550	​		14,135	​		7,039	^4^​		91,724
Bank-owned life insurance - cash surrender value	​		49,024	​		21,622	​		—	​		70,646
Goodwill	​		27,288	​		2,042	​		22,091	^5^​		51,421
Other intangible assets	​		7,787	​		490	​		23,839	^6^​		32,116
Accrued interest receivable, prepaid expenses, and other assets	​		46,861	​		20,571	​		(4,926)	^7^​		62,506
TOTAL ASSETS	​	$	3,444,843	​	$	998,894	​	$	(146)	​	$	4,443,591
​	​	​	​	​	​	​	​	​	​	​	​	​
LIABILITIES	​			​			​			​
Deposits	​	$	2,851,013	​	$	898,147	​	$	95	^8^​	$	3,749,255
Federal Home Loan Bank (FHLB) advances	​		224,973	​		—	​		—	​		224,973
Subordinated debt	​		23,068	​		—	​		—	​		23,068
Accrued interest payable, accrued expenses, and other liabilities	​		19,389	​		5,740	​		8,968	^9^​		34,097
TOTAL LIABILITIES	​		3,118,443	​		903,887	​		9,063	​		4,031,393
​	​	​	​	​	​	​	​	​	​	​	​	​
STOCKHOLDERS' EQUITY	​			​			​			​
Common stock	​		98	​		26	​		(26)	​		98
Additional paid-in capital	​		119,216	​		8,832	​		89,578	​		217,626
Retained earnings	​		247,780	​		101,510	​		(114,122)	​		235,168
Treasury Stock	​		(21,116)	​		(4,900)	​		4,900	​		(21,116)
Accumulated other comprehensive loss	​		(19,578)	​		(10,461)	​		10,461	​		(19,578)
TOTAL STOCKHOLDERS’ EQUITY	​		326,400	​		95,007	​		(9,209)	^10^​		412,198
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	​	$	3,444,843	​	$	998,894	​	$	(146)	​	$	4,443,591

​

​

​

​

​

CONDENSED COMBINED PRO FORMA STATEMENTS OF INCOME (Unaudited)

For the three-month period ended September 30, 2022

(in thousands, except for share and per share data)

​

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​		Southern Missouri			Citizens Bancshares			Pro Forma				​
​	​	Bancorp		​	Company		​	Adjustments		​	Pro Forma
INTEREST INCOME		​			​			​			​
Loans	​	$	33,180	​	$	6,447	​	$	1,718	^11^​	$	41,345
Investment securities	​		665	​		997	​		594	^12^​		2,256
Mortgage-backed securities	​		990	​		720	​		—	​		1,710
Other interest-earning assets	​		162	​		1,250	​		—	​		1,412
TOTAL INTEREST INCOME	​		34,997	​		9,414	​		2,312	​		46,723
​	​	​	​	​	​	​	​	​	​	​	​	​
INTEREST EXPENSE	​			​			​
Deposits	​		5,761	​		837	​		23	^13^​		6,621
Advances from FHLB Des Moines	​		438	​		—	​		—	​		438
Notes due to shareholders	​		—	​		3	​		—	​		3
Subordinated debt	​		290	​		—	​		—	​		290
TOTAL INTEREST EXPENSE	​		6,489	​		840	​		23	​		7,352
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INTEREST INCOME	​		28,508	​		8,574	​		2,289	​		39,371
Provision for loan losses	​		5,056	​		22	​		6,966	^14^​		12,044
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	​		23,452	​		8,552	​		(4,677)	​		27,327
​	​	​	​	​	​	​	​	​	​	​	​	​
NONINTEREST INCOME	​			​			​			​
Deposit account charges and related fees	​		1,777	​		797	​		—	​		2,574
Bank credit transaction fees	​		1,018	​		875	​		—	​		1,893
Loan late charges	​		122	​		—	​		—	​		122
Loan servicing fees	​		312	​		19	​		—	​		331
Other loan fees	​		882	​		—	​		—	​		882
Net realized gains on sale of loans	​		292	​		—	​		—	​		292
Earnings on bank owned life insurance	​		318	​		111	​		—	​		429
Other income	​		793	​		570	​		—	​		1,363
TOTAL NONINTEREST INCOME	​		5,514	​		2,372	​		—	​		7,886
​	​	​	​	​	​	​	​	​	​	​	​	​
NONINTEREST EXPENSE	​			​			​			​
Compensation and benefits	​		9,752	​		3,453	​		—	​		13,205
Occupancy and equipment, net	​		2,447	​		1,200	​		59	^15^​		3,706
Data processing expense	​		1,445	​		258	​		—	​		1,703
Telecommunication expense	​		331	​		137	​		—	​		468
Deposit insurance premiums	​		215	​		75	​		—	​		290
Legal and professional fees	​		411	​		314	​		—	​		725
Advertising	​		449	​		105	​		—	​		554
Postage and office supplies	​		213	​		96	​		—	​		309
Intangible amortization	​		402	​		15	​		699	^16^​		1,116
Foreclosure property expenses/losses	​		(41)	​		57	​		—	​		16
Other operating expense	​	​	1,296	​	​	980	​	​	—	​	​	2,276
Merger-related expense	​		—	​		—	​		8,748	^17^​		8,748
TOTAL NONINTEREST EXPENSE	​		16,920	​		6,690	​		9,506	​		33,116
​	​	​	​	​	​	​	​	​	​	​	​	​
INCOME BEFORE INCOME TAXES	​		12,046	​		4,234	​		(14,183)	​		2,097
​	​	​	​	​	​	​	​	​	​	​	​	​
PROVISION FOR INCOME TAXES	​		2,443	​		994	​		(2,765)	^18^​		672
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INCOME	​		9,603	​		3,240	​		(11,418)	​		1,425
​	​	​	​	​	​	​	​	​	​	​	​	​
Less: distributed and undistributed earnings allocated to participating securities	​	​	(43)	​	​	-	​	​	-	​	​	(43)
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	​	$	9,560	​	$	3,240	​	$	(11,418)	​	$	1,382
​	​	​	​	​	​	​	​	​	​	​	​	​
Basic earnings per share available to common stockholders	​	$	1.04	​	$	1.38	​	​	​		$	0.12
Diluted earnings per share available to common stockholders	​	$	1.04	​	$	1.38	​	​	​		$	0.12
​	​	​	​	​	​	​	​	​	​	​	​	​
Average shares outstanding - Basic	​		9,187,857	​		2,346,915	​		2,079,678	​		11,267,535
Average shares outstanding - Diluted	​		9,210,467	​		2,346,915	​		2,079,678	​		11,290,145

​

​

CONDENSED COMBINED PRO FORMA STATEMENTS OF INCOME (Unaudited)

For the Year Ended June 30, 2022

(in thousands, except for share and per share data)

​

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​		Southern Missouri			Citizens Bancshares			Pro Forma				​
​	​	Bancorp		​	Company		​	Adjustments		​	Pro Forma
INTEREST INCOME		​			​			​			​
Loans	​	$	111,495	​	$	20,387	​	$	5,521	^11^​	$	137,403
Investment securities	​		2,197	​		2,280	​		2,378	^12^​		6,855
Mortgage-backed securities	​		2,738	​		1,262	​		—	​		4,000
Other interest-earning assets	​		437	​		745	​		—	​		1,182
TOTAL INTEREST INCOME	​		116,867	​		24,674	​		7,899	​		149,440
​	​	​	​	​	​	​	​	​	​	​	​	​
INTEREST EXPENSE	​			​			​
Deposits	​		11,822	​		1,308	​		37	^13^​		13,167
Advances from FHLB Des Moines	​		792	​		—	​		—	​		792
Notes due to shareholders	​		—	​		13	​		—	​		13
Subordinated debt	​		686	​		—	​		—	​		686
TOTAL INTEREST EXPENSE	​		13,300	​		1,321	​		37	​		14,658
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INTEREST INCOME	​		103,567	​		23,353	​		7,862	​		134,782
Provision for loan losses	​		1,487	​		(1,456)	​		6,966	^14^​		6,997
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	​		102,080	​		24,809	​		896	​		127,785
​	​	​	​	​	​	​	​	​	​	​	​	​
NONINTEREST INCOME	​			​			​			​
Deposit account charges and related fees	​		6,450	​		2,851	​		—	​		9,301
Bank credit transaction fees	​		4,224	​		3,124	​		—	​		7,348
Net realized gains on sale of loans	​		1,598	​		348	​		—	​		1,946
Net realized gains on sale of available for sale securities	​		—	​		—	​		—	​		—
Earnings on bank owned life insurance	​		1,168	​		438	​		—	​		1,606
Other income	​		7,763	​		3,223	​		—	​		10,986
TOTAL NONINTEREST INCOME	​		21,203	​		9,984	​		—	​		31,187
​	​	​	​	​	​	​	​	​	​	​	​	​
NONINTEREST EXPENSE	​			​			​			​
Compensation and benefits	​		35,611	​		14,940	​		—	​		50,551
Occupancy and equipment, net	​		9,248	​		4,924	​		235	^15^​		14,407
Data processing expense	​		5,996	​		1,008	​		—	​		7,004
Telecommunication expense	​		1,273	​		593	​		—	​		1,866
Deposit insurance premiums	​		743	​		375	​		—	​		1,118
Legal and professional fees	​		1,362	​		809	​		—	​		2,171
Advertising	​		1,496	​		411	​		—	​		1,907
Postage and office supplies	​		823	​		390	​		—	​		1,213
Intangible amortization	​		1,441	​		59	​		2,796	^16^​		4,296
Foreclosure property expenses/losses	​		522	​		506	​		—	​		1,028
Other operating expense	​	​	4,864	​	​	4,318	​	​	—	​	​	9,182
Merger-related expense	​		—	​		—	​		8,748	^17^​		8,748
TOTAL NONINTEREST EXPENSE	​		63,379	​		28,333	​		11,779	​		103,491
​	​	​	​	​	​	​	​	​	​	​	​	​
INCOME BEFORE INCOME TAXES	​		59,904	​		6,460	​		(10,883)	​		55,481
​	​	​	​	​	​	​	​	​	​	​	​	​
PROVISION FOR INCOME TAXES	​		12,735	​		1,369	​		(2,039)	^18^​		12,065
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INCOME	​		47,169	​		5,091	​		(8,844)	​		43,416
​	​	​	​	​	​	​	​	​	​	​	​	​
Less: distributed and undistributed earnings allocated to participating securities	​	​	195	​	​	-	​	​	-	​	​	195
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	​	$	46,974	​	$	5,091	​	$	(8,844)	​	$	43,221
​	​	​	​	​	​	​	​	​	​	​	​	​
Basic earnings per share available to common stockholders	​	$	5.22	​	$	2.17	​	​	​		$	3.93
Diluted earnings per share available to common stockholders	​	$	5.21	​	$	2.17	​	​	​		$	3.92
​	​	​	​	​	​	​	​	​	​	​	​	​
Average shares outstanding - Basic	​		8,994,022	​		2,346,915	​		2,015,061	​		11,009,083
Average shares outstanding - Diluted	​		9,011,144	​		2,346,915	​		2,015,061	​		11,026,205

​

Notes to Pro Forma Condensed Combined Financial Information (Unaudited)

​

1.	Represents cash paid for 25% of outstanding common stock and all outstanding stock options.

​

2.	Adjustment to reflect the preliminary estimate of fair value of acquired loans, including current interest rates and liquidity, as well as the fair value of future credit marks.

​

​	​	​	​
(in thousands)		September 30, 2022
Estimate of fair value: acquired non-PCD loans	​	$	(12,078)
Estimate of fair value: acquired PCD loans	​		(2,056)
Eliminate unrecognized loan origination expenses	​		(533)
Fair value adjustments to loans	​		(14,667)
Gross up of PCD loans	​		1,121
Total pro forma adjustment to loans	​	$	(13,546)

​

3.	Adjustments to the allowance for credit losses include the following:

​

​	​	​	​
(in thousands)		September 30, 2022
Reverse Citizens’ allowance for loan losses	​	$	6,416
Record CECL estimate for PCD loans	​		(1,121)
Record CECL estimate for non-PCD loans	​		(5,177)
Total pro forma adjustment to allowance for credit losses	​		118

​

4.	Reflects adjustments to acquired premises and equipment based primarily on real estate appraisals.

​

5.

Adjustment to eliminate historical Citizens goodwill of $2.0 million and to establish $24.1 million of goodwill for amount of consideration paid in excess of fair value of assets received over liabilities assumed. The pro forma adjustments include the accounting entries to record the transaction under the acquisition method of accounting for business combinations. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill. Fair value adjustments included in the pro forma financial statements are based upon available information and certain assumptions which are considered reasonable, and will be revised as additional information becomes available.

​

The following table summarizes the determination of the purchase price consideration based on the $47.32 closing price of Southern Missouri common stock on January 20, 2023.

​

​	​	​	​
Shares of Citizens outstanding		​	2,358,915
Shares to be exchanged for stock		​	1,769,186
Exchange ratio		​	1.1755
Southern Missouri shares to be issued		​	2,079,678
Price per share of Southern Missouri on January 20, 2023	​	$	47.32
Preliminary consideration for common stock	​	$	98,410,363
​	​	​	​
Shares to be exchanged for cash	​		587,729
Cash consideration per share	​	$	54.93
Cash consideration for shares outstanding	​		32,393,814
Cash settlement of options outstanding	​		2,367,350
Total cash consideration	​	$	34,761,164

​

​

6.	Adjustment to reflect approximately $24.3 million of core deposit and trust services intangible at the estimated fair value and to eliminate historical Citizens’ intangible assets.

​

7.	Adjustment of $(2.2) million to net deferred tax assets due to the business combination and adjustment of $(2.7) million to the estimated fair value of foreclosed real estate.

​

8.	Adjustment to reflect the estimate of fair value on time deposits.

​

9.

Represents CECL estimate for off-balance sheet credit exposures of $1.8 million and estimated after-tax merger costs of $7.2 million ($8.7 million, pre-tax), of which some costs will be recognized over time. These cost estimates for both Southern Missouri and Citizens are forward-looking. The type and amount of actual costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

​

10.	Adjustment to eliminate $95.0 million in Citizens’ stockholders’ equity, reflect issuance of $98.4 million in Southern Missouri common stock, reflect estimated merger costs of $7.2 million, net of tax, and reflect provision for credit losses on non-PCD acquired loans of $2.6 million and off-balance sheet credit exposures of $5.4 million, net of tax.

​

11.	Adjustment reflects the yield adjustment for interest income on loans.

​

12.	Adjustment reflects the yield adjustment for interest income on securities.

​

13.	Adjustment reflects the cost of funds adjustment for interest expense on deposits.

​

14.	Adjustment to record provision for credit losses on non-PCD acquired loans and off-balance sheet credit exposures.

​

15.	Adjustment to depreciation expense to reflect adjustment to carrying value of facilities.

​

16.	Adjustment reflects the net increase in amortization of core deposit intangible and other intangible assets.

​

17.	Adjustment reflects the combined pre-tax merger-related transaction costs.

​

18.	Adjustment represents income tax expense on the pro-forma adjustments at an estimated effective rate of 22%, generally. Some merger-related expense is assumed to not be tax-deductible.