As filed with the Securities and Exchange Commission on November 17, 2017

Registration No. 333-_______

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

SOUTHERN MISSOURI BANCORP, INC.

(Exact name of registrant as specified in its charter)

COPIES TO:

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable following the effectiveness of this Registration Statement and upon completion of the merger described in this Registration Statement.

If the securities being registered on this Form are being offered in connection with formation of a holding company and there is compliance with General Instruction G, check the following box. □

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  □

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and emerging growth company" in Rule 12b-2 of the Exchange Act.

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 7(a)(2)(B) of the Securities Act. □

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

 

 

 

 

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effec-tive date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

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MERGER PROPOSED - YOUR VOTE IS VERY IMPORTANT

Dear Southern Missouri Bancshares, Inc. Shareholder:

The boards of directors of Southern Missouri Bancorp, Inc., which we refer to as "Bancorp," and Southern Missouri Bancshares, Inc., which we refer to as "SM Bancshares," have each approved a merger of our two companies.  Under the merger agreement, SM Bancshares will merge with and into Bancorp, with Bancorp being the surviving corporation, on the terms and conditions set forth in the merger agreement. Following completion of the merger, SM Bancshares' wholly owned bank subsidiary, Southern Missouri Bank of Marshfield, which we refer to as "SMB," will merge with and into Bancorp's wholly owned bank subsidiary, Southern Bank, with Southern Bank being the surviving bank.

If the merger is completed, holders of SM Bancshares common stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times SM 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 SM Bancshares' transaction expenses, minus (2) the excess, if any, of the cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000.  As of September 30, 2017, SM Bancshares' consolidated equity capital, as adjusted for estimated transaction and contract termination costs, was $10.9 million.   Based on this amount, if the merger were completed in October 2017, the aggregate merger consideration would be $15.3 million ($10.9 million x 1.4).  Twenty-five percent (25%) of the merger consideration will be paid in cash and seventy-five percent (75%) will be paid in shares of Bancorp common stock.

The cash consideration paid for each share of SM Bancshares common stock, which we refer to as the "per share cash consideration," will be equal to 25% of the aggregate merger consideration divided by the number of shares of SM Bancshares common stock issued and outstanding immediately prior to the merger.  The stock consideration paid for each share of SM Bancshares common stock, which we refer to as the "per share stock consideration," will be a number of shares of Bancorp common stock equal to three times the per share cash consideration divided by $31.80, the average closing price of Bancorp common stock for the 20 trading day period ending on and including the fifth trading day preceding August 17, 2017 (the date of the merger agreement), which we refer to as the "average Bancorp common stock price."

Assuming aggregate merger consideration of $15.3 million, the per share cash consideration would be $96.95 and the per share stock consideration would be 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 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 SM Bancshares' shareholders and the receipt of regulatory approvals. 

SM Bancshares will hold a special meeting of its shareholders to vote on the merger agreement. Approval of the merger agreement by SM Bancshares shareholders requires the affirmative vote of the holders of two-thirds of the outstanding shares of SM Bancshares common 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, SM 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 SM 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 SM Bancshares and its shareholders. Accordingly, the SM Bancshares board of directors recommends that holders of SM Bancshares common stock vote "FOR" approval of the merger agreement proposal and "FOR" the adjournment proposal.  In considering the recommendations of the board of directors of SM Bancshares, you should be aware that the directors and executive officers of SM Bancshares have interests in the merger that are different from, or in addition to, the interests of SM Bancshares shareholders generally. See the section entitled "The Merger—Interests of SM 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 13 of this proxy statement/prospectus, for a discussion of the risks relating to the proposed merger. You also can obtain information about Bancorp from documents that it has filed with the Securities and Exchange Commission.

Neither the Securities and Exchange Commission nor any state securities commission or any bank regulatory agency has approved or disapproved the shares of Bancorp 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 Bancorp or 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 [•], 2017, and it is first being mailed or otherwise delivered to the shareholders of SM Bancshares on or about [•], 2017.

 

 

 

SOUTHERN MISSOURI BANCSHARES, INC.

1292 Banning Street
Marshfield, MO 65706

(417) 859-1292

NOTICE OF SPECIAL MEETING OF

SOUTHERN MISSOURI BANCSHARES, INC. SHAREHOLDERS

To Southern Missouri Bancshares, Inc. Shareholders:

We are pleased to notify you of and invite you to a special meeting of shareholders of Southern Missouri Bancshares, Inc., which we refer to as "SM Bancshares."  At the special meeting, holders of SM Bancshares common stock will be asked to vote on the following matters:

·

A proposal to approve the Agreement and Plan of Merger, dated as of 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 SM Bancshares, pursuant to which SM Bancshares will merge with and into 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 SM Bancshares common stock as of the close of business on [•], 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 SM Bancshares common 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 SM Bancshares common stock entitles its holder to one vote.

SM 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 SM Bancshares and its shareholders, and unanimously recommends that holders of SM Bancshares common 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 SM 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.

SM Bancshares has concluded that, in connection with the merger, holders of SM Bancshares common stock have the right to exercise dissenters' rights under Section 351.455 of the General and Business Corporation Law of Missouri, which we sometimes refer to as the "MGBCL," and obtain payment of the "fair value" of their shares of SM Bancshares common stock in lieu of the merger consideration that holders of SM Bancshares common 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 a copy of Section 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.

[•], 2017

Marshfield, MO

YOUR VOTE IS VERY IMPORTANT!

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 Bancorp 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 Bancorp 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 SM Bancshares' special meeting of shareholders.  This means that SM Bancshares shareholders requesting documents must do so by [•], 2017, 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 SM Bancshares, at the following address:

SOUTHERN MISSOURI BANCSHARES, INC.

Attn: Jerry Morgan
1292 Banning Street
Marshfield, MO 65706

SM 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 [•], 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 SM Bancshares shareholders nor the issuance by Bancorp of shares of Bancorp common stock in connection with the merger will create any implication to the contrary.

Bancorp supplied all information contained or incorporated by reference in this proxy statement/prospectus relating to Bancorp and SM Bancshares supplied all information contained in this proxy statement/prospectus relating to SM Bancshares. Information on the websites of Bancorp and SM Bancshares, or any subsidiary of Bancorp or 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 Bancorp" on page 52 for more details relating to Bancorp, and "Information About Southern Missouri Bancshares" on page 52 for more details relating to SM Bancshares.

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

APPENDICES

A

Agreement and Plan of Merger, dated as of August 17, 2017, by and between Southern Missouri Bancorp, Inc., Southern Missouri Acquisition Corp. and Southern Missouri Bancshares, Inc.

B

Section 351.455 of the General and Business Corporation Law of Missouri, as amended

 

 

 

 

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 SM 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, "Bancorp" refers to Southern Missouri Bancorp, Inc.,  "SM Bancshares" refers to Southern Missouri Bancshares, Inc. and "we," "us" and "our" refers collectively to Bancorp and SM Bancshares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Bancorp because these risks will relate to the combined company. Descriptions of some of these risks can be found in Bancorp's Annual Report on Form 10-K for the fiscal year ended June 30, 2017 filed with the SEC and other reports filed by Bancorp with the SEC and incorporated by reference into this proxy statement/prospectus.  See "Where You Can Find More Information."

The aggregate merger consideration to be paid to the holders of SM Bancshares common stock will depend on a number of factors.

If the merger is completed, holders of SM Bancshares common stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times SM 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 SM Bancshares' transaction expenses, minus (2) the excess, if any, of the cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000.  As of September 30, 2017, SM Bancshares' consolidated equity capital, as adjusted pursuant to the merger agreement, was $10.9 million.   Based on this amount, if the merger were completed in October 2017, the aggregate merger consideration would be $15.3 million ($10.9 million x 1.4).  Twenty-five percent (25%) of the merger consideration will be paid in cash and seventy-five percent (75%) will be paid in shares of Bancorp common stock.

The aggregate merger consideration to be paid to the holders of SM Bancshares common stock 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 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 payable to holders of SM Bancshares common stock will decrease.  Conversely, if SM Bancshares' consolidated equity capital increases between now and the effective date of the merger, or estimated transaction expenses are less than estimated, the aggregate merger consideration payable to holders of SM Bancshares common stock will increase.  Accordingly, SM Bancshares shareholders will not know at the time of the special meeting the exact amount of merger consideration they will receive upon completion of the merger.

Because the market price of Bancorp common stock will fluctuate, holders of SM Bancshares common stock cannot be certain prior to the completion of the merger 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 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.  Stock price changes may result from a variety of factors, many of which are beyond the control of Bancorp and 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. SM Bancshares is not generally permitted to terminate the merger agreement or re-solicit the vote of SM Bancshares shareholders solely because of changes in the market prices of Bancorp's common stock.  We urge you to obtain current market quotations for Bancorp common 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 Bancorp common stock after the merger may be affected by factors different from those currently affecting the value of SM Bancshares common stock.

Upon completion of the merger, holders of SM Bancshares common stock will become holders of Bancorp common stock. Bancorp's business differs in important respects from that of SM Bancshares, and, accordingly, the results of operations of Bancorp and the market price of Bancorp common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of SM Bancshares.

SM Bancshares' shareholders will have less influence as shareholders of Bancorp than as shareholders of SM Bancshares.

Holders of SM Bancshares common stock currently have the right to vote in the election of the board of directors of SM Bancshares and on other matters affecting SM Bancshares.  Immediately following the merger, it is expected that the current shareholders of SM Bancshares as a group will hold an ownership interest of approximately 4.0% of the then outstanding Bancorp common stock. When the merger occurs, each holder of SM Bancshares common stock will become a shareholder of Bancorp with a percentage ownership of the combined organization much smaller than such shareholder's percentage ownership of SM Bancshares.  Because of this, SM Bancshares' shareholders will have less influence on the management and policies of Bancorp than they now have on the management and policies of 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 Bancorp following the merger.

Before the merger and the bank merger may be completed, Bancorp and SM Bancshares must obtain approvals from the Federal Reserve Board and the Missouri 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 Bancorp and SM 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 Bancorp following the merger, any of which might have an adverse effect on Bancorp following the merger.  Bancorp 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 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.

The success of the merger, including anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine the businesses of Bancorp and SM Bancshares. To realize these anticipated benefits and cost savings, after the completion of the merger, Bancorp expects to integrate SM 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 Bancorp's ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. If Bancorp 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 Bancorp and/or SM Bancshares to lose customers or cause customers to remove their accounts from Bancorp and/or SM 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 SM Bancshares and Bancorp during this transition period and on Bancorp for an undetermined period after completion of the merger. In addition, the actual cost savings of the merger could be less than anticipated.

 

 

 

SM Bancshares' directors and executive officers have interests in the merger that may differ from the interests of SM Bancshares' shareholders.

SM Bancshares' shareholders should be aware that SM Bancshares' directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of SM Bancshares' shareholders generally. These interests and arrangements may create potential conflicts of interest. SM 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 SM Bancshares' shareholders vote in favor of approving the merger agreement. These interests include continued indemnification and liability insurance coverage following the merger for SM Bancshares' directors and officers.

For a more complete description of these interests, see "The Merger—Interests of SM Bancshares' Directors and Executive Officers in the Merger."

The merger agreement limits SM Bancshares' ability to pursue alternative acquisition proposals and requires SM Bancshares to pay a termination fee of $450,000 under certain circumstances, including circumstances relating to alternative acquisition proposals.

The merger agreement generally prohibits SM 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 SM Bancshares must pay Bancorp a termination fee of $450,000 if the merger agreement is terminated under certain circumstances, including SM 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 SM Bancshares or SMB at a greater value to SM Bancshares' shareholders than Bancorp has offered in the merger. The payment of the termination fee could also have an adverse effect on SM Bancshares' financial condition.

Termination of the merger agreement could negatively impact SM Bancshares regardless of whether the $450,000 termination fee is payable.

If the merger agreement is terminated, there may be various negative consequences for SM Bancshares regardless of whether the $450,000 termination fee is payable. For example, SM 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 SM Bancshares' common stock could decline to the extent current values reflect an assumption that the merger will be completed.

SM Bancshares will be subject to business uncertainties and contractual restrictions while the merger is pending.

Bancorp and SM 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 SM Bancshares and consequently on Bancorp. These uncertainties may impair SM Bancshares' ability to attract, retain or motivate key personnel until the merger is consummated, and could cause customers and others that deal with SM Bancshares to seek to change existing business relationships with SM Bancshares.  Retention of certain employees may be challenging during the pendency of the merger as certain employees may experience uncertainty about their future roles with Bancorp. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Bancorp, Bancorp's business following the merger could be harmed.  In addition, the merger agreement restricts SM Bancshares from making certain acquisitions and taking other specified actions until the merger occurs without the consent of Bancorp. These restrictions may prevent SM 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, SM 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 SM Bancshares' shareholders, as well as other conditions, some of which are beyond Bancorp's and SM Bancshares' control.  Neither Bancorp nor SM Bancshares can predict when or whether these conditions will be satisfied. SM 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.  If the merger is not completed, SM Bancshares would have to recognize these expenses without realizing the expected benefits of the merger.

The dissenters' rights appraisal process is uncertain.

SM Bancshares shareholders may or may not be entitled to receive more than the amount provided for in the merger agreement for their shares of SM Bancshares common stock if they elect to exercise their right to dissent from the proposed merger, depending on the appraisal of the fair value of the SM Bancshares common stock pursuant to the dissenting shareholder procedures under the MGBCL. See "The Merger—Dissenters' Rights of SM 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 Bancorp's obligation to complete the merger that the holders of not more than 5% of the outstanding shares of SM Bancshares common stock exercise dissenters' rights.  The number of shares of SM Bancshares common stock as to which dissenters' rights will be exercised under the MGBCL is not known and, therefore, there is no assurance that this closing condition will be satisfied.

Risk factors relating to Bancorp and its business.

Bancorp is, and will continue to be, subject to the risks described in Bancorp's Annual Report on Form 10-K for the fiscal year ended June 30, 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 Bancorp, 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 Bancorp or SM 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 Bancorp that are incorporated into this proxy statement/prospectus by reference, as well as the following:

·	the requisite regulatory approvals and the approval of SM Bancshares' shareholders for the merger might not be obtained and other conditions to completion of the merger might not be satisfied or waived;

·

expected cost savings, synergies and other benefits from Bancorp's merger and acquisition activities, including the merger with 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 Bancorp and SM Bancshares;

·	legislative or regulatory changes;

·	results of examinations of Bancorp and SM 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, Bancorp and SM 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. Bancorp and SM 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 Bancorp, 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 Bancorp

The following tables set forth selected historical financial and other data of Bancorp for the periods and at the dates indicated. The information at June 30, 2017 and 2016 and for the fiscal years ended June 30, 2017, 2016 and 2015 is derived in part from and should be read together with the audited consolidated financial statements and notes thereto of Bancorp incorporated by reference into this proxy statement/prospectus from Bancorp's Annual Report on Form 10-K for the fiscal year ended June 30, 2017.  The information as of June 30, 2015, 2014 and 2013 and for the fiscal years ended June 30, 2014 and 2013 is derived in part from audited consolidated financial statements and notes thereto of Bancorp that are not incorporated by reference into or attached to this proxy statement/prospectus.

		At September 30,				At June 30,
		2017				2017				2016				2015				2014				2013
		(In thousands)
Financial Condition Data:
Total assets		$	1,763,491			$	1,707,712			$	1,403,910			$	1,300,064			$	1,021,422			$	796,391
Loans receivable, net			1,449,560				1,397,730				1,135,453				1,053,146				801,056				647,166
Mortgage-backed securities			78,569				78,275				71,231				70,054				58,151				16,714
Cash, interest-bearing deposits and investment securities			94,961				97,674				81,270				78,258				88,658				77,059
Deposits			1,471,690				1,455,597				1,120,693				1,055,242				785,801				632,379
Borrowings			94,281				56,849				137,301				92,126				111,033				52,288
Subordinated debt			14,872				14,848				14,753				14,658				9,727				7,217
Stockholders' equity			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.

 

 

 

 

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 Bancorp and SM Bancshares on a historical basis, for Bancorp on a pro forma combined basis and on a pro forma combined basis for SM Bancshares equivalent shares. The pro forma SM Bancshares equivalent shares data shows the effect of the merger from the perspective of an owner of SM 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, 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 SM Bancshares into Bancorp'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, 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 Bancorp and SM Bancshares been combined as of the dates and for the periods shown.

____________________________

(1)	Calculated by multiplying the Pro Forma Combined Amounts for Bancorp by the estimated exchange ratio for the stock portion of the merger consideration of 9.1467 shares of Bancorp common stock for each share of SM Bancshares common stock, which is based on the average Bancorp common stock price of $31.80, and, solely in the case of the book value per common share at June 30, 2017 and September 30, 2017, adding to that result cash consideration per share assumed to be $96.95.  See "The Merger Agreement—Merger Consideration."
(2)	Calculated by dividing the total pro forma combined Bancorp and SM 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 Bancorp 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 SM Bancshares common stock as part of a solicitation of proxies by the SM 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 SM Bancshares common 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 SM Bancshares common stock will be held at the 1292 Banning Street, Marshfield, MO 65706, on [•], 2017, at [•], Central Time.

Purpose of the SM Bancshares Special Meeting

At the special meeting, holders of SM Bancshares common 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 SM Bancshares Board of Directors

On August 16, 2017, the SM Bancshares board of directors unanimously determined that the merger and the other transactions contemplated by the merger agreement are in the best interests of SM Bancshares and its shareholders and it approved the merger agreement and the merger transactions contemplated therein.  Accordingly, the SM Bancshares board of directors unanimously recommends that SM Bancshares shareholders vote "FOR" the merger agreement proposal and "FOR" the adjournment proposal.

Holders of SM Bancshares common 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 [•], 2017.  Only record holders of shares of SM Bancshares common 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.  As of the record date, there were 39,356 shares of SM Bancshares common stock issued and outstanding.  Each share of SM Bancshares common stock 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 SM Bancshares common stock 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.

SM Bancshares Shares Subject to a Voting Agreement

Each of the directors and executive officers of SM Bancshares has entered into an agreement to vote the shares of SM Bancshares common stock which are owned or controlled by such individual in favor of approval of the merger agreement proposal.  As of the record date, 18,931 shares of SM Bancshares common stock, or approximately 48.1% of the total combined outstanding shares of SM Bancshares common stock entitled to vote at the special meeting are bound by the voting agreement.

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 SM Bancshares common 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 SM Bancshares common stock is required to approve the merger agreement proposal. As a result, if shares representing at least two-thirds of the total outstanding shares of SM Bancshares common 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 SM Bancshares common 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 SM Bancshares common stock 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 SM Bancshares common 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 SM Bancshares common stock at the close of business on the record date, a proxy card is enclosed for your use.  SM 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 SM Bancshares common 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 SM 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, SM 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 SM Bancshares common 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 SM Bancshares common 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, attendees must bring to gain admittance to the special meeting depend on whether they are shareholders of record or proxy holders. A SM Bancshares shareholder who holds shares of SM 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 SM 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 SM Bancshares shareholder of record, and proof of the signing shareholder's record ownership as of the record date.

Revocation of Proxies

A SM 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 Southern Missouri Bancshares, Inc., 1292 Banning Street, 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 SM 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 SM Bancshares board of directors is soliciting proxies for the special meeting from holders of SM Bancshares common stock entitled to vote at the special meeting.  In accordance with the merger agreement, SM Bancshares will pay its own cost of soliciting proxies from its shareholders and Bancorp will pay the costs of printing and mailing this proxy statement/prospectus.  In addition to solicitation of proxies by mail, proxies may be solicited by SM Bancshares' officers, directors and regular employees, without additional remuneration, by personal interview, telephone or other means of communication.

SM Bancshares will make arrangements with brokerage houses, custodians, nominees and fiduciaries to forward proxy solicitation materials to beneficial owners of SM Bancshares common stock. SM 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 SM 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 SM 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 SM Bancshares common stock are entitled to dissenters' rights under Section 351.455 of the 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 SM Bancshares Shareholders."   In addition, a copy of Section 351.455 of the MGBCL is attached to this proxy statement/prospectus as Appendix B.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE MERGER

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.

Terms of the Merger

Each of Bancorp's and SM Bancshares' board of directors has approved the merger agreement. The merger agreement provides for the merger of SM Bancshares with and into Merger Sub, a wholly owned subsidiary of Bancorp, with SM Bancshares as the surviving entity 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 consideration described below.  Immediately following the merger, SM Bancshares will merge with and 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, with Southern Bank as the surviving 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 SM Bancshares common stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times SM 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 SM Bancshares' transaction expenses, minus (2) the excess, if any, of the cost of contract termination charges of SM Bancshares triggered as a result of the merger over $175,000.  As of September 30, 2017, SM Bancshares' consolidated equity capital, as adjusted for its estimated transaction expenses and contract termination costs, was $10.9 million.   Based on this amount, if the merger were completed in October 2017, the aggregate merger consideration would be $15.3 million ($10.9 million x 1.4).  Twenty-five percent (25%) of the merger consideration will be paid in cash and seventy-five percent (75%) will be paid in shares of Bancorp common stock.

The per share cash consideration will be equal to 25% of the aggregate merger consideration divided by the number of shares of SM Bancshares common stock issued and outstanding immediately prior to the merger.  The per share stock consideration will be a number of shares of Bancorp common stock equal to three times the per share cash consideration divided by $31.80, the average Bancorp common stock price.  Assuming 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 Bancorp common stock will instead receive an amount in cash equal to the fractional share interest multiplied by $31.80.

Under the above scenario, if you held 100 shares of SM Bancshares common stock immediately prior to the merger, 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 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").

Holders of SM Bancshares common stock are being asked to approve the merger 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.

Background of the Merger

In connection with the ongoing consideration and evaluation of its long-term strategic alternatives and prospects, SM 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.  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 SM Bancshares, in particular, as well as conditions and ongoing consolidation in the financial services industry.  In furtherance of these objectives, SM 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, SM Bancshares's board of directors engaged a consultant to help advise the board of the value of the SM Bancshares stock and the value of SMB.

SM Bancshares's board worked with SM Bancshares's executive management and received proposals from several prospective purchasers.  SM Bancshares reviewed those offers.  After entering into confidentiality agreements and conducting preliminary diligence, two of the prospective purchasers submitted formal offers.

SM Bancshares's board of directors and executive management reviewed the offers and determined that Bancorp's offer, consisting of merger consideration payable 25% in cash and 75% in shares of Bancorp's publicly traded common stock, would be in the best interests of SM Bancshares and its shareholders.  On March 21, 2017, SM Bancshares and Bancorp entered into a non-binding letter of intent, providing for the material terms of the proposed merger, and also providing that SM Bancshares would not solicit offers from organizations other than Bancorp for a period of 60 days while SM Bancshares and Bancorp 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, SM Bancshares and Bancorp worked to complete their respective due diligence investigations.

SM Bancshares received the first draft of the merger agreement from Bancorp on June 1, 2017 and the parties negotiated the financial terms of the transaction and the merger agreement over the next several months.  On August 16, 2017, SM Bancshares's board of directors met to consider and discuss the terms of the merger agreement and the merger, which were unanimously approved at that meeting.

On August 17, 2017, SM Bancshares and Bancorp entered into the merger agreement and Bancorp issued a press release announcing the proposed merger.

SM Bancshares' Reasons for the Merger; Recommendation of SM Bancshares' Board of Directors

SM Bancshares' board of directors believes that the merger is in the best interest of SM Bancshares and its shareholders.  Accordingly, SM Bancshares' board of directors has unanimously approved the merger and the merger agreement and unanimously recommends that SM Bancshares' shareholders vote "FOR" approval of the merger agreement proposal.

 

 

 

In approving the merger agreement, SM Bancshares' board of directors consulted with management with respect to the financial aspects and fairness of the merger consideration, from a financial point of view, to the holders of shares of SM Bancshares common 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 Bancorp will create a stronger and more diversified organization that will provide significant benefits to SM Bancshares' shareholders and customers alike.

The terms of the merger agreement, including the consideration to be paid to SM Bancshares' shareholders, were the result of arm's length negotiations between representatives of SM Bancshares and representatives of Bancorp.  In arriving at its determination to approve the merger agreement, SM Bancshares' board of directors considered a number of factors, including the following material factors:

·

SM Bancshares' board of directors' familiarity with and review of information concerning the business, results of operations, financial condition, competitive position and future prospects of 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 SM 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 management;

·	that shareholders of SM Bancshares will receive seventy-five percent (75%) of the merger consideration in shares of Bancorp common stock, which is listed on the NASDAQ Stock Market, contrasted with the absence of a public market for SM Bancshares' common stock;

·	the treatment of the mergers as a "reorganization" within the meaning of Section 368(a) of the Code with respect to the shares of SM Bancshares common stock exchanged for Bancorp common stock;

·	the results that SM 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 Bancorp;

·	the ability of Bancorp to pay the aggregate merger consideration without a financing contingency and without the need to obtain financing to close the transaction;

·	the ability of Bancorp 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 SM Bancshares' directors and executive officers have financial interests in the merger in addition to their interests as SM Bancshares shareholders 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 SM Bancshares' shareholders upon completion of the merger;

·

the requirement that SM Bancshares conduct its business in the ordinary course and the other restrictions on the conduct of the SM Bancshares' business before completion of the merger, which may delay or prevent SM Bancshares from undertaking business opportunities that may arise before completion of the merger; and

 

 

 

 

 

·	that under the merger agreement SM Bancshares cannot solicit competing proposals for the acquisition of SM Bancshares.

The SM 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 SM Bancshares' business towards the completion of the merger;

·

the restrictions on the conduct of SM 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 SM Bancshares from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of SM Bancshares absent the pending completion of the merger;

·	the possibility that SM Bancshares will have to pay a $450,000 termination fee to Bancorp if the merger agreement is terminated under certain circumstances;

·	the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating SM Bancshares' and SMB's business, operations and workforce with those of 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 SM Bancshares board of directors is not intended to be exhaustive, but includes the material factors considered by the SM 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 SM 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 SM Bancshares believes that the merger is in the best interest of SM Bancshares and its shareholders and therefore the board of directors of SM Bancshares unanimously approved the merger agreement and the merger.

This summary of the reasoning of SM 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."

SM BANCSHARES' BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT PROPOSAL.

Bancorp's Reasons for the Merger

After careful consideration, at a meeting held on August 17, 2017, Bancorp'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 Bancorp and its shareholders.

In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Bancorp board of directors consulted with Bancorp management, as well as its legal advisors, and considered a number of factors, including the following material factors:

·

its knowledge of SM Bancshares' business, operations, financial condition, earnings and prospects, taking into account the results of Bancorp's due diligence review of SM Bancshares and SMB, including Bancorp's assessments of their credit policies, asset quality, adequacy of loan loss reserves, interest rate risk and litigation;

 

 

 

 

 

·	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 SMB's management team;

·	the fact that SM Bancshares' and SMB's shareholders would own approximately 4.0% of the outstanding shares of Bancorp common stock immediately following the merger;

·	the interests of SM Bancshares' directors and executive officers in the merger, in addition to their interests generally as shareholders, as described under "—Interests of SM Bancshares' Directors and Executive Officers in the Merger";

·	the fact that SM Bancshares' and Bancorp's management teams share a common business vision and commitment to their respective customers, shareholders, employees and other constituencies;

·	the belief of Bancorp's management that the merger will be accretive to Bancorp'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 SM Bancshares' and SMB's business, operations and workforce with those of 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 Bancorp board reviewed with its outside legal advisors.

The Bancorp 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 Bancorp's business towards the completion of the merger;

·	the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating SM Bancshares' and SMB's business, operations and workforce with those of Bancorp;

·	the merger-related costs and expenses; and

·	the other risks described under the heading "Risk Factors."

The foregoing discussion of the information and factors considered by the Bancorp board of directors is not intended to be exhaustive, but includes the material factors considered by the Bancorp board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the

 

 

 

merger agreement, the Bancorp 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 Bancorp board of directors considered all these factors as a whole, including discussions with, and questioning of, Bancorp's management and Bancorp's legal advisors, and overall considered the factors to be favorable to, and to support, its determination.

Bancorp's board of directors unanimously approved the merger agreement.

This summary of the reasoning of Bancorp'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."

Bancorp's Board of Directors Following Completion of the Merger

Following completion of the mergers, the directors of Bancorp and Southern Bank immediately prior to the effective time will constitute the boards of directors of Bancorp as the surviving corporation and Southern Bank as the resulting institution, respectively.

Interests of SM Bancshares' Directors and Executive Officers in the Merger

In considering the recommendation of the SM Bancshares board of directors to vote for the merger agreement proposal, you should be aware that the directors and officers of SM Bancshares have interests in the merger that are in addition to, or different from, their interests as shareholders of SM Bancshares.  The board of SM Bancshares was aware of these interests and considered them in approving the merger agreement.

Bancorp has agreed to indemnify the directors and officers of SM 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 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 SM 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 SM Bancshares' articles of incorporation and bylaws, to the extent permitted by applicable law.

Additionally, Bancorp has agreed to purchase prior to the effective time of the merger 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 SM Bancshares and SMB.

Regulatory Approvals

Each of Bancorp and SM 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.  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."

 

 

 

Accounting Treatment

In accordance with current accounting guidance, the mergers 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 Bancorp 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 SM Bancshares will be adjusted to fair value at the date of the 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 Bancorp common stock to be issued to former SM Bancshares shareholders, at fair value, exceeds the fair value of the net assets, including identifiable intangibles, of SM Bancshares at the 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 SM Bancshares being included in the operating results of Bancorp beginning from the date of completion of the mergers.

Dissenters' Rights of SM Bancshares Shareholders

Under Section 351.455 of MGBCL, 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 and obtain payment in cash of the fair value of their shares of SM Bancshares common stock, as of the day prior to the date of the SM Bancshares' special meeting, in 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 Section 351.455 of the 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.  Holders of SM Bancshares common stock receiving cash upon exercise 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.

A SM Bancshares shareholder may assert dissenters' rights only by complying with all of the following requirements:

(1)  The shareholder must deliver to SM Bancshares prior to or at the special meeting a written objection to the merger agreement.  The written objection should be delivered or mailed in time 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 proposal.  Neither a vote against, a failure to vote for, nor an abstention from voting will satisfy 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.

(3)  The shareholder must deliver to Bancorp within twenty days after the effective time of the merger a written demand for payment of the fair value of his or her shares of SM Bancshares common stock as 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 joint 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 and Bancorp, Bancorp will make payment to the shareholder within ninety days of the effective time, upon the shareholder's surrender of his or her 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 terms 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 that the holders of less than 5% of SM Bancshares' outstanding common stock exercise dissenters' rights.

THE PRECEDING IS QUALIFIED IN ITS ENTIRETY BY THE TEXT OF THE 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 MGBCL, THE MGBCL WILL CONTROL.

Bancorp's Dividend Policy

The holders of Bancorp common stock receive cash dividends if and when declared by the Bancorp board of directors out of legally available funds.  The timing and amount of cash dividends depends on Bancorp's earnings, capital requirements, financial condition, cash on hand and other relevant factors.  Bancorp 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, Bancorp'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.  Bancorp currently pays a quarterly cash dividend of $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."

Public Trading Markets

Bancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC." The shares of Bancorp common stock issuable in the merger for shares of SM Bancshares common stock will be listed on NASDAQ.  SM Bancshares' common stock is not listed on an exchange or quoted on any automated services, and there is no established trading market for shares of SM Bancshares common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE MERGER AGREEMENT

The following describes certain aspects of the 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.

Structure of the Merger

The merger agreement provides for the merger of SM Bancshares with and into Merger Sub, a wholly owned subsidiary of Bancorp, with SM Bancshares as the surviving entity 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 consideration described below.  Immediately following the merger, SM Bancshares will merge with and 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, with Southern Bank as the surviving entity after the bank merger. As a result of the mergers, SM Bancshares and SMB will cease to exist as separate entities.

Merger Consideration

If the merger is completed, holders of SM Bancshares common stock will be entitled to receive aggregate merger consideration equal to (1) 1.4 times SM 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 SM Bancshares' transaction expenses, minus (2) the excess, if any, of the cost 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 seventy-five percent (75%) will be paid in shares of Bancorp common stock.

At the effective time of the merger, each share of SM Bancshares common stock that is issued and outstanding immediately prior to the completion of the merger, excluding shares of SM Bancshares common stock that are owned by SM Bancshares or Bancorp (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 25% of the aggregate merger consideration divided by the number of shares of SM Bancshares common stock that will be issued and outstanding immediately prior to the closing of the merger; and

·

a number of shares of Bancorp common stock, which we refer to as the "per share stock consideration" equal to the three times the per share cash consideration divided by $31.80, the average closing price of Bancorp common stock for the 20 trading day period ending on and including the fifth trading day preceding August 17, 2017 (the date of the merger agreement), which we refer to as the "average Bancorp common stock price."

The number of shares of Bancorp common stock issuable as the per share stock consideration will fluctuate with the market price of Bancorp common stock and will not be known at the time SM Bancshares shareholders vote on the merger agreement.  Bancorp will not issue any fractional shares of Bancorp common stock in the merger.  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, the average Bancorp common stock price.

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 Bancorp's data processor for the conversion of SM 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 first quarter of 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.

No assurances can be given as to when or if the merger will be completed.

Conversion of Shares; Exchange Procedures

The conversion of SM Bancshares common 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, Bancorp will appoint its transfer agent or an unrelated bank or trust company reasonably acceptable to SM Bancshares to act as exchange agent for the exchange of SM Bancshares common stock for the merger consideration.

Letter of Transmittal

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 SM Bancshares common 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 Bancorp common stock and any dividends or distributions to which such holder is entitled. Conforming procedures will be used for any shares of SM Bancshares common stock held in book-entry form.

If a certificate for shares of SM Bancshares common 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 Bancorp or the exchange agent, the posting by the claimant of a bond in an amount Bancorp 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 SM Bancshares of shares of SM Bancshares common 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

Bancorp or the exchange agent will be entitled to deduct and withhold from any cash consideration payable under the merger agreement to any holder of SM Bancshares common 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.

Dividends and Distributions

No dividends or other distributions declared with respect to Bancorp common stock will be paid to the holder of any shares of SM Bancshares common 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 Bancorp common stock which the shares of SM Bancshares common 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 Bancorp and SM Bancshares rather than establishing matters as facts, and may be subject to standards of materiality that differ from those standards relevant to SM 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 Bancorp, 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 Bancorp 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 Bancorp and SM 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 SM Bancshares and Bancorp in the merger agreement relate to a number of matters, including the following:

·	due organization and qualification;

·	capitalization;

·	subsidiaries;

·	corporate powers;

·	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 Bancorp, SEC reports;

·	legal proceedings;

·	reports to regulatory authorities and absence of agreements with regulatory authorities;

·	compliance with applicable laws;

·	in the case of SM Bancshares, certain contracts;

·	in the case of 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;

·	environmental matters;

·	tax matters;

·	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 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;

·	properties;

·	investment securities;

·	intellectual property;

·	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;

·	the proper administration of fiduciary accounts;

·	in the case of SM Bancshares, the absence of an action or a failure to act by any present or former director, officer, employee or agent of SM 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.

Bancorp also has represented to SM Bancshares that Bancorp does not own any SM Bancshares stock other than shares of SM 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 Bancorp and SM 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 Bancorp, 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

 

 

 

 

Covenants and Agreements

Conduct of Businesses Prior to the Completion of the Merger

Pursuant to the merger agreement, each of SM Bancshares and Bancorp 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;

Bancorp has also agreed that it will not pay or declare any extraordinary dividends (other than dividends from Southern Bank to 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 SM Bancshares common stock. Bancorp 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 Bancorp common stock to be issued in the merger to be authorized for listing on NASDAQ.  In addition, Bancorp 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 Bancorp and/or a subsidiary of 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 SM Bancshares common stock, upon completion of the merger and their receipt of Bancorp common stock, in the same manner as the holders of Bancorp common stock.

SM Bancshares has also agreed that it will, and will cause each of its subsidiaries to, conduct its business in the ordinary and usual course.  SM 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 Bancorp:

 

 

 

Regulatory Matters

Bancorp and SM 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.  Bancorp and SM 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 Bancorp including any condition that would increase the minimum regulatory capital requirements of Bancorp or Southern Bank.

Employee Benefit Plan Matters

Following the effective time of the merger, Bancorp will cause Southern Bank to maintain employee benefit plans and compensation opportunities for the benefit of employees who are full-time employees of SMB 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 SMB 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 Bancorp or its subsidiaries.

To the extent that a covered employee becomes eligible to participate in a Bancorp 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 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 SM 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 Bancorp 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 SM Bancshares benefit plan in which such covered employee participated immediately prior to the effective time of the merger.

SM Bancshares has agreed to take, and cause its subsidiaries to take, all actions requested by Bancorp that may be necessary or appropriate to (i) cause one or more SM 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 SM 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 SM Bancshares benefit plan for such period as may be requested by Bancorp, and (iv) facilitate the merger of any SM Bancshares benefit plan into any employee benefit plan maintained by Bancorp or a Bancorp subsidiary.

Full-time employees of SMB 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 SMB 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 SM Bancshares' articles of incorporation and bylaws and applicable law, Bancorp has agreed to indemnify and hold harmless the directors and officers of SM Bancshares and SMB 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 Bancorp to purchase prior to the effective time of the merger 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 SM Bancshares and SMB. The cost of this policy shall not exceed 200% of SM Bancshares' current annual premium for directors' and officers' insurance.  If the tail policy cannot be obtained for this amount, then Bancorp will pay the required premium cost to obtain as much comparable insurance as is available for this amount.

Shareholder Meeting and Recommendation of SM Bancshares' Boards of Directors

SM 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 SM Bancshares shareholders.  SM 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 SM Bancshares shareholders at that meeting.  In addition, SM Bancshares has agreed to include in this proxy statement/prospectus and in all other communications with SM Bancshares shareholders the recommendation of SM Bancshares' board of directors that SM 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 SM Bancshares, unless the merger agreement has been terminated in accordance with its terms, SM Bancshares is required to convene the SM Bancshares special meeting and to submit the merger agreement to a vote of its shareholders.

Agreement Not to Solicit Other Offers 

SM 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, SM 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 SM Bancshares or SMB 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, SM Bancshares or SMB, other than the merger and the bank merger.

If SM Bancshares receives an unsolicited written acquisition proposal prior to shareholder approval of the merger agreement that SM 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 SM Bancshares than the merger with Bancorp (referred to as a "superior proposal"), SM Bancshares may provide confidential information to and negotiate with the third party that submitted such acquisition proposal if the SM 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, SM Bancshares or SMB must be for a majority of such voting power or a majority of the fair market value of such business, assets or deposits.  SM Bancshares must promptly advise Bancorp of any acquisition proposal received and keep it apprised of any related developments.

The merger agreement generally prohibits the SM Bancshares board of directors from withdrawing or modifying in a manner adverse to Bancorp the board's recommendation that SM 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 SM Bancshares' shareholders, however, the SM 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 SM 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 Bancorp at least four business days to propose a modification to the merger agreement and, after considering any such proposed modification, the SM

 

 

 

Bancshares board of directors determines in good faith, after consultation with counsel, that the proposal continues to constitute a superior proposal.

If Bancorp terminates the merger agreement based on a change in recommendation by the SM Bancshares board of directors or SM Bancshares terminates the merger agreement to pursue a superior proposal, SM Bancshares will be required to pay Bancorp a termination fee of $450,000 in cash.  See "-Termination of the Merger Agreement" and "-Termination Fee."

Conditions to Complete the Merger

Bancorp's and SM 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 SM Bancshares' shareholders;

·	to the extent required, the filing by Bancorp with NASDAQ of a notification form for the listing of the shares of Bancorp 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 Bancorp and SM 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 tax advisor to the effect that on the basis of facts, representations and assumptions set forth or referred to in such opinion, the mergers taken as a whole will qualify as one or more "reorganizations" within the meaning of Section 368(a) of the Code.

The following are additional conditions to Bancorp'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, 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 Bancorp, including any condition that would increase the minimum regulatory capital requirements of Bancorp 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 SM Bancshares common stock shall have exercised dissenters' rights under Missouri law;

·	receipt by SM Bancshares of all designated third party consents; and

 

 

 

 

Neither Bancorp nor SM 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 Bancorp and SM Bancshares;

·

by either Bancorp or 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 Bancorp or SM Bancshares, if the merger has not been completed on or before March 31, 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 Bancorp or SM 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 Bancorp, if the board of directors of SM Bancshares fails to recommend in this proxy statement/prospectus that its shareholders approve the merger agreement, or the SM 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 Bancorp, or SM Bancshares materially breaches any of its obligations relating to third party acquisition proposals;

·

by either Bancorp or SM Bancshares, if the special meeting of SM 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 SM Bancshares that SM 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 SM Bancshares prior to SM 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 SM Bancshares has not committed a material breach of its obligations with respect to third party acquisition proposals and concurrently with such termination pays Bancorp a termination fee of $450,000 in cash.

 

 

 

 

Effect of Termination

If the merger agreement is terminated, it will become void and have no effect, except that (1) both Bancorp and SM 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 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.

Termination Fee

Bancorp will be entitled to a termination fee of $450,000 from SM Bancshares if the merger agreement is terminated under the following circumstances:

·

a termination by Bancorp based on (i) the board of directors of SM Bancshares either failing to continue its recommendation that the SM Bancshares shareholders approve the merger agreement or adversely changing such recommendation or (ii) SM Bancshares materially breaching the provisions of the merger agreement relating to third party acquisition proposals;

·	a termination by SM 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 Bancorp or SM Bancshares as a result of the failure of SM Bancshares' shareholders to approve the merger agreement if prior to such termination there is publicly announced another acquisition proposal and within nine months of termination SM Bancshares or SMB 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, SM Bancshares or SMB 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 Bancorp terminates the merger agreement as a result of a willful and material breach by SM Bancshares of the provisions of the merger agreement relating to third party acquisition proposals, Bancorp is not required to accept the termination fee from SM Bancshares and may pursue alternate relief against SM Bancshares.

Expenses and Fees

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 and all filing and other fees paid to the SEC in connection with the merger will be paid by 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 SM Bancshares, except that after approval of the merger agreement by the shareholders of 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.

 

 

 

Voting Agreement

As an inducement to Bancorp to enter into the merger agreement, each of SM Bancshares' directors and executive officers has entered into a voting agreement with Bancorp with respect to the shares of SM Bancshares common stock 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, each 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 SM Bancshares common stock in favor of approval of the merger agreement proposal; and

·

not to sell, transfer or otherwise dispose of any such shares of SM 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 Bancorp, (ii) a transfer by will or operation of law, or (iii) a transfer made with the prior written consent of 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 SM 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 SM Bancshares common stock. The term "U.S. holder" means a beneficial owner of shares of SM Bancshares common 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 SM Bancshares common stock in light of their particular facts and circumstances. This discussion addresses only U.S. holders of SM Bancshares common 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 SM Bancshares common stock in light of their individual circumstances or to holders of SM Bancshares common 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 SM Bancshares common stock; (ix) holders who acquired their shares in exchange for shares of SMB'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 SM 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 SM Bancshares common 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 SM Bancshares common 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 SM Bancshares common stock should consult their own tax advisors about the tax consequences of the merger to them.

ALL HOLDERS OF SM 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 Bancorp, has rendered its tax opinion to Bancorp and Carnahan, Evans, Cantwell & Brown, P.C., tax counsel to SM Bancshares, has rendered its tax opinion to SM 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 Carnahan, Evans, Cantwell & Brown, P.C. as to the material U.S. federal income tax consequences of the merger to the U.S. holders of SM Bancshares common stock. In rendering their respective tax opinions, each counsel relied upon representations and covenants, including those contained in certificates of officers of Bancorp and 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 mergers, taken as a whole, to be treated as 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 SM Bancshares and Bancorp of tax opinions from Carnahan, Evans, Cantwell & Brown, 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 Carnahan, Evans, Cantwell & Brown, 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 Bancorp 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 Carnahan, Evans, Cantwell & Brown, P.C. and Silver, Freedman, Taff & Tiernan LLP, in reliance on representation letters provided by SM Bancshares and Bancorp and upon customary factual assumptions, as well as certain covenants and undertakings of SM Bancshares and Bancorp, the mergers taken as a whole will qualify as 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 Bancorp nor SM 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 Bancorp or SM Bancshares as a result of the merger.

·

A U.S. holder who receives a combination of shares of Bancorp common stock and cash (other than cash received in lieu of fractional shares of Bancorp common stock) in exchange for shares of SM 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 Bancorp common stock (determined as of the effective time of the merger) and cash received by such U.S. holder of SM Bancshares common stock exceeds such U.S. holder's adjusted tax basis in its SM Bancshares common stock surrendered and (ii) the amount of cash received by such U.S. holder of SM Bancshares common stock (in each case excluding any cash received in lieu of fractional shares of Bancorp 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 SM Bancshares common stock exchanged is more than one year at the time of completion of the merger.

·

The aggregate tax basis of the Bancorp common stock received by a U.S. holder of SM Bancshares common stock in the merger (including any fractional shares of Bancorp common stock deemed received and exchanged for cash, as described below) will be the same as the aggregate tax basis of the SM Bancshares common 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 Bancorp 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 Bancorp 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 Bancorp common stock received in exchange for shares of SM Bancshares common stock (including fractional shares of Bancorp common stock deemed received and exchanged for cash, as described below) will include the holding period of the SM Bancshares common stock for which it is exchanged.

If a U.S. holder of SM Bancshares common stock acquired different blocks of SM Bancshares common stock at different times or at different prices, any gain or loss will be determined separately with respect to each block of SM Bancshares common stock, and such U.S. holder's tax basis and holding period in its shares of Bancorp stock may be determined with reference to each block of SM Bancshares common stock.  A loss realized on one block of shares may not be used to offset a gain realized on another block 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 Bancorp stock received in the merger.

 

 

 

Potential Recharacterization of Gain as a Dividend 

Any gain recognized by a U.S. holder of SM Bancshares common 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 SM 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 SM Bancshares common stock solely in exchange for Bancorp common stock and then Bancorp 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 Bancorp following the merger. The determination generally requires a comparison of the percentage of the outstanding stock of Bancorp that you are considered to have owned immediately before the deemed redemption to the percentage of the outstanding stock of Bancorp 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 SM 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 SM Bancshares common stock for a combination of Bancorp 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 Bancorp Stock

A U.S. holder of SM Bancshares common stock who receives cash in lieu of a fractional share of Bancorp 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 Bancorp. As a result, such U.S. holder of SM Bancshares common 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.

Dissenting Shareholders

If you are a holder of SM Bancshares common 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 SM Bancshares common 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 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 SM Bancshares common 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 SM Bancshares common stock should consult their tax advisors as to the application of this additional tax to their circumstances.

Backup Withholding

Payments of cash, including cash received in lieu of a fractional share of Bancorp common stock, to a U.S. holder of SM Bancshares common stock pursuant to the merger may, under certain circumstances, be subject to 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 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.

Information Reporting

A U.S. holder of SM Bancshares common stock who receives Bancorp common stock as a result of the merger may be required to retain records pertaining to the merger. Each U.S. holder of SM Bancshares common stock who is required to file a U.S. federal income tax return and who is a "significant holder" that receives Bancorp 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 SM Bancshares common stock exchanged pursuant to the merger, and the holder's adjusted tax basis, determined immediately before the exchange, in its SM Bancshares common stock. A "significant holder" is a holder of SM Bancshares common stock who, immediately before the merger, owned at least 1% (by vote or value) of the outstanding stock of SM Bancshares or securities of SM 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 BANCORP

Bancorp, headquartered in Poplar Bluff, Missouri, is the bank holding company of Southern Bank. Southern Bank, founded in 1887, is a Missouri state-chartered, community-focused financial institution providing relationship banking through 38 locations in Missouri, Arkansas and Illinois, as well as online/mobile channels. As of September 30, 2017, Bancorp had assets of $1.8 billion, deposits of $1.5 billion, and stockholders' equity of $177.0 million.

As a bank holding company, Bancorp 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.

Bancorp 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.

Bancorp's principal office is located at 2991 Oak Grove Road, Poplar Bluff, Missouri 63901, and its telephone number is (573) 778-1800.  Bancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC."

Additional information about Bancorp and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See "Where You Can Find More Information."

INFORMATION ABOUT SOUTHERN MISSOURI BANCSHARES

SM Bancshares was formed as a Missouri corporation in 1997 for the purpose of becoming a holding company for SMB, a Missouri state chartered bank.  SM Bancshares does not, as an entity, engage in separate business activities of a material nature apart from the activities it performs for SMB.  Its primary activities are to provide assistance in the management and coordination of SMB's financial resources.  SM Bancshares has no significant assets other than all of the outstanding common stock of SMB.  SM Bancshares derives its revenues primarily from the operations of SMB in the form of dividends received from SMB.

SMB was chartered as a Missouri state bank in 1997.  SMB's operation are conducted through two locations, its main office and a branch office, both of which are located in Marshfield, Missouri.  As of September 30, 2017, SM Bancshares had, on a consolidated basis, total assets of approximately $90.0 million, total deposits of approximately $72.6 million, total loans (net of allowance for loan losses) of approximately $69.0 million, and total shareholders' equity of approximately $11.0 million.  SM Bancshares does not file reports with the SEC.  SM Bancshares does, however, voluntarily provide certain financial reports to its shareholders.

 

 

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF SM BANCSHARES

The following table sets forth certain information regarding the beneficial ownership of SM Bancshares common stock as of [•], 2017, by (1) each director and executive officer of SM Bancshares, (2) each person who is known by SM Bancshares to own beneficially 5% or more of the voting common stock of SM Bancshares, and (3) all directors and executive officers as a group. Unless otherwise indicated, based on information furnished by such shareholders, management of SM 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 Southern Missouri Bancshares, Inc., 1292 Banning Street, Marshfield, MO 65706.

*   Equals less than 1%

(1)  Percentage ownership based on 39,356 shares of SM Bancshares common stock outstanding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPARATIVE MARKET PRICES AND DIVIDENDS ON COMMON STOCK

Bancorp 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 Bancorp's common stock for the periods indicated.

		Stock Price
		High				Low				Dividends per Share
Fiscal 2018 Quarters:
Second Quarter (through November _, 2017)		$	[•	]		$	[•	]		$	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

 

Bancorp's cash dividend payout policy is continually reviewed by management and the Board of Directors.  Bancorp 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, Bancorp's financial condition, results of operations and Southern Bank's ability to pay dividends to Bancorp.  Bancorp relies upon dividends originating from Southern Bank to accumulate earnings for payment of cash dividends to stockholders.

SM Bancshares pays a cash dividend to its common shareholders annually following the end of each calendar year which equaled $20.00 per share for the year ended December 31, 2015 and $15.00 per share for the year ended December 31, 2016.  The factors affecting SM Bancshares' ability to pay cash dividends to its shareholders are similar to those affecting Bancorp's ability to pay dividends to its shareholders.  In addition, the merger agreement prohibits SM Bancshares from increasing the amount of dividends paid to its shareholders without Bancorp's prior written consent.

On August 17, 2017, the day prior to the public announcement of the merger agreement, the high and low sales prices of shares of Bancorp common stock as reported on NASDAQ were $31.49 and $31.20, respectively. On [•], 2017, the last trading day before the printing of this proxy statement/prospectus, the high and low sales prices of shares of Bancorp common stock as reported on NASDAQ were $[•] and $[•], respectively.

As of [•], 2017, the last date prior to printing this proxy statement/prospectus for which it was practicable to obtain this information for Bancorp and SM Bancshares, respectively, there were approximately [•] registered holders of Bancorp common stock, [•] registered holders of SM Bancshares common stock.

SM Bancshares shareholders are advised to obtain a current market quotation for Bancorp's common stock. Current market quotations for SM Bancshares' common stock are not available. The market price of Bancorp 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 Bancorp common stock before or after the effective date of the merger.  Changes in the market price of Bancorp common stock prior to the completion of the merger will affect the value of the stock portion of the merger consideration that holders of SM Bancshares common stock will receive upon completion of the merger.

 

 

 

DESCRIPTION OF BANCORP'S CAPITAL STOCK

The following information regarding the material terms of Bancorp's capital stock is qualified in its entirety by reference to Bancorp's articles of incorporation.

General

Bancorp'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 [•], 2017, there were [•] shares of Bancorp common stock issued and outstanding. No shares of Bancorp preferred stock are currently outstanding. Bancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC."

Common Stock

Each share of Bancorp common stock has the same relative rights and is identical in all respects with each other share of Bancorp common stock. Common shareholders of Bancorp 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 Bancorp common shares is entitled to such dividends as may be declared from time to time by Bancorp's board of directors out of legally available funds.  In the event of Bancorp'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.  Bancorp common shareholders have no preemptive rights and no right to convert of exchange their shares of common stock into any other securities.

Preferred Stock

Bancorp'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.  Bancorp'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 Bancorp'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 Bancorp.  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, Bancorp's charter and bylaws contain a number of provisions which may have the effect of delaying, deferring or preventing a change in control of Bancorp. See "Comparison of Shareholder Rights."

 

 

 

COMPARISON OF SHAREHOLDER RIGHTS

SM Bancshares and Bancorp are both incorporated under the laws of the State of Missouri.  The rights of holders of SM Bancshares common stock are governed by the laws of the state of Missouri and SM 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 SM Bancshares who receive shares of Bancorp common stock in the merger will be determined by reference to Bancorp's articles of incorporation and bylaws and Missouri law.

This section describes certain differences between the rights of SM Bancshares shareholders and Bancorp 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 MGBCL, and to Bancorp's articles of incorporation and bylaws and SM Bancshares' articles of incorporation and bylaws.   Copies of Bancorp's articles of incorporation and bylaws have been filed by Bancorp with the SEC. See "Where You Can Find More Information." Copies of SM Bancshares' articles of incorporation and bylaws are available upon written request to Jerry Morgan, Chief Executive Officer, Southern Missouri Bancshares, Inc., 1292 Banning Street, Marshfield, MO 65706, or by phone at (417) 859-1292.

SM BANCSHARES		BANCORP
Capitalization:
The articles of incorporation of SM Bancshares authorize 100,000 shares of capital stock, which is made up solely of common stock, $1.00 par value per share. As of September 30, 2017, there were 39,356 shares of SM Bancshares common stock issued and outstanding.		The articles of incorporation of Bancorp 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 September 30, 2017, there were 8,591,363 shares of Bancorp common stock and no shares of Bancorp preferred stock issued and outstanding. Bancorp's common stock is listed on the NASDAQ Global Market under the symbol "SMBC." Bancorp'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 SM Bancshares shareholders are governed by Missouri law and the articles of incorporation and bylaws of 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 SM Bancshares is not convertible into any other securities of SM Bancshares.		The common stock of Bancorp is not convertible into any other securities of Bancorp.

 

 

 

SM BANCSHARES		BANCORP
Preemptive Rights:
Preemptive rights are denied pursuant to SM Bancshares' articles of incorporation.		Preemptive rights are denied pursuant to Bancorp's articles of incorporation.
Election of Directors:
SM Bancshares' articles of incorporation provide that the number of directors shall be nine, or such other number as may be fixed from time to time in the manner provided in the company's bylaws.  SM Bancshares currently has nine directors. The bylaws of SM Bancshares provide that all elections for directors are to be determined by a plurality of the votes cast.   The bylaws of SM Bancshares 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 SM Bancshares are not entitled to cumulate votes in the election of directors.		Bancorp's articles of incorporation provide that Bancorp 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.  Bancorp currently has nine directors.   Shareholders of Bancorp 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 Bancorp preferred stock, Bancorp'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:
SM 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.   SM 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 SM Bancshares' shareholders.		Bancorp'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.   Bancorp'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.   Bancorp'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:
SM Bancshares' articles of incorporation generally may be amended at any annual or special meeting of the SM 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

 

 

 

SM BANCSHARES		BANCORP
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 SM Bancshares' articles of incorporation which limits personal liability of SM 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 SM Bancshares common stock which are entitled to vote. SM Bancshares' bylaws may be amended by the affirmative vote of a majority of the company's board of directors.		Bancorp common stock. The amendment of the provisions of Bancorp'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 Bancorp'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 entitled to vote at a meeting of shareholders called for an election of directors are entitled, unless the amendment has been approved by Bancorp's board of directors by a 66 2/3% vote.   Bancorp's bylaws may be amended either by its board of directors, by a vote of two-thirds of the board, or by Bancorp'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:
Missouri law and SM 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.   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		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 Bancorp 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

 

 

 

 

SM BANCSHARES		BANCORP
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 Bancorp or who is an affiliate or associate of Bancorp and at any time within the prior two years was a 5% or greater shareholder of 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 Bancorp common stock has one vote for each matter properly brought before the shareholders, provided that under Bancorp's articles of incorporation, any person who beneficially owns in excess of 10% of the outstanding shares of Bancorp 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 Bancorp 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

 

 

 

 

SM BANCSHARES		BANCORP
		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.   Bancorp's bylaws provide that special meetings of shareholders may only be called by Bancorp's board of directors.
Indemnification; Limitation of Director Liability:
SM Bancshares' articles of incorporation permit SM Bancshares to agree to the terms and conditions upon which any director, officer, employee or agent of SM Bancshares may be indemnified.   SM 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 SM Bancshares) by reason of the fact that such person is or was a director or officer of the SM Bancshares, or is or was serving at the request of the SM 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 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 SM Bancshares, the bylaws provide that SM 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 SM Bancshares, or is or was serving at the request of 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		Bancorp's articles of incorporation require Bancorp to indemnify any present or former director or executive officer of Bancorp or any subsidiary of Bancorp 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 Bancorp 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.   Bancorp's articles of incorporation permit Bancorp, to the extent its board of directors deems appropriate, to indemnify any present or former nonexecutive officer, or employee or agent of Bancorp or any subsidiary or any person who was serving at the request of Bancorp 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 Bancorp 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

 

 

 

 

 

 

 

SM BANCSHARES		BANCORP
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.   SM 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 SM 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 SM Bancshares' articles of incorporation; (ii) authorized, directed, or provided for in bylaws or in any agreement of SM Bancshares which has been adopted by the shareholders of 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 SM Bancshares will be personally liable to SM 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 SM Bancshares or its shareholders, (ii) an act or omission not in good faith that constitutes a breach of duty of the director to SM 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:
SM Bancshares' articles of incorporation and bylaws do not require advance notice regarding shareholder proposals or shareholder nominations of candidates for election to SM Bancshares' board of directors at its		Bancorp'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

 

 

 

 

 

SM BANCSHARES		BANCORP
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, Bancorp 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. Bancorp'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, Bancorp 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.

 

 

LEGAL MATTERS

The validity of the shares of Bancorp 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 Carnahan, Evans, Cantwell & Brown, P.C., Springfield, Missouri.

EXPERTS

The consolidated financial statements of Bancorp appearing in Bancorp's Annual Report (Form 10-K) as of and for the years ended June 30, 2017 and 2016 and for each year in the three-year period ended June 30, 2017 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

Bancorp 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. Bancorp'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.

Bancorp filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933 with respect to the shares of Bancorp common stock to be issued in the merger to the holders of SM Bancshares common stock.  This proxy statement/prospectus is a part of that registration statement and constitutes a prospectus of

 

 

 

Bancorp in addition to being a proxy statement of SM Bancshares for the special meeting of SM 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 Bancorp into this proxy statement/prospectus, which means that important business and financial information about Bancorp 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 Bancorp files with the SEC will update and supersede that information. This document incorporates by reference the documents set forth below that Bancorp has previously filed with the SEC and all documents filed by Bancorp 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.

This proxy statement/prospectus incorporates by reference the documents listed below that Bancorp 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).

Except where the context otherwise indicates, Bancorp supplied all information contained or incorporated by reference in this document relating to Bancorp and SM Bancshares supplied all information contained in this proxy statement/prospectus relating to 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 Bancorp at the address and telephone number that follows:

If you would like to request documents from Bancorp, you must do so by [•], 201[•] to receive them before the special meeting of SM Bancshares' shareholders.

Neither Bancorp nor SM 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.

 

---

RECITALS			A-1
ARTICLE I THE MERGER			A-1
	1.1	The Merger.	A-1
	1.2	Effective Time	A-2
	1.3	Effects of the Merger	A-2
	1.4	Conversion of Stock.	A-2
	1.5	Incorporation Documents and By-Laws of the Surviving Company.	A-4
	1.6	Directors and Officers	A-4
	1.7	The Bank Merger	A-4
ARTICLE II DELIVERY OF MERGER CONSIDERATION			A-4
	2.1	Exchange Agent	A-4
	2.2	Deposit of Merger Consideration	A-4
	2.3	Delivery of Merger Consideration	A-5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER			A-6
	3.1	Organization and Standing.	A-7
	3.2	Capitalization	A-7
	3.3	Subsidiaries	A-7
	3.4	Corporate Power	A-8
	3.5	Authority; No Violation	A-8
	3.6	Consents and Approvals	A-9
	3.7	Financial Reports; Absence of Certain Changes or Events.	A-9
	3.8	Litigation	A-10
	3.9	Regulatory Matters.	A-10
	3.10	Compliance with Laws	A-10
	3.11	Material Contracts; Defaults	A-11
	3.12	Brokers Fees.	A-12
	3.13	Employee Benefit Plans.	A-12
	3.14	Labor Matters.	A-14
	3.15	Seller Information	A-14
	3.16	Takeover Laws	A-14
	3.17	Environmental Matters	A-14
	3.18	Tax Matters	A-14
	3.19	Risk Management Instruments	A-15
	3.20	Books and Records	A-15

	3.21	Insurance	A-15
	3.22	No Registration Obligation	A-15
	3.23	Accounting and Internal Controls.	A-15
	3.24	Properties	A-16
	3.25	Allowance for Loan Losses	A-16
	3.26	Material Interests of Certain Persons.	A-16
	3.27	Indemnification	A-17
	3.28	Loan Portfolio	A-17
	3.29	Securities Portfolio	A-18
	3.30	Intellectual Property	A-18
	3.31	Seller Information	A-18
	3.32	Reorganization	A-18
	3.33	Fiduciary Business.	A-18
	3.34	Indemnification	A-18
	3.35	Representations Not Misleading	A-18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER			A-19
	4.1	Organization and Standing.	A-19
	4.2	Capitalization.	A-19
	4.3	Subsidiaries	A-19
	4.4	Corporate Power	A-19
	4.5	Corporate Authority	A-20
	4.6	Consents and Approvals; No Defaults.	A-20
	4.7	Financial Reports and SEC Documents; Absence of Certain Changes or Events.	A-20
	4.8	Litigation	A-21
	4.9	Regulatory Matters"	A-21
	4.10	Compliance with Laws.	A-22
	4.11	Employee Benefit Plans.	A-22
	4.12	Labor Matters	A-24
	4.13	Takeover Laws	A-24
	4.14	Environmental Matters	A-24
	4.15	Tax Matters	A-24
	4.16	Risk Management Instruments	A-25
	4.17	Books and Records	A-25
	4.18	Insurance	A-25
	4.19	Funds Available	A-25

	4.20	Allowance for Loan Losses	A-25
	4.21	Loan Portfolio	A-25
	4.22	Securities Portfolio	A-26
	4.23	Reorganization	A-26
	4.24	Buyer Information	A-26
	4.25	Fiduciary Business	A-26
	4.26	Ownership of Seller Capital Stock	A-26
	4.27	Representations Not Misleading	A-27
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS			A-27
	5.1	Forbearances of Seller	A-27
	5.2	Forbearances of Buyer	A-30
ADDITIONAL AGREEMENTS			A-30
	6.1	Regulatory Matters.	A-30
	6.2	Access to Information; Current Information; Consultation.	A-32
	6.3	Shareholder Meeting	A-33
	6.4	Reservation of Buyer Common Stock; Nasdaq Listing.	A-33
	6.5	Employee Matters.	A-33
	6.6	Officers' and Directors' Insurance; Indemnification.	A-34
	6.7	No Solicitation.	A-35
	6.8	Notification of Certain Matters	A-36
	6.9	Correction of Information	A-36
	6.10	System Integration	A-37
	6.11	Coordination; Integration	A-37
	6.12	Delivery of Agreements	A-37
	6.13	Press Releases	A-37
ARTICLE VII  CONDITIONS PRECEDENT			A-37
	7.1	Conditions to Each Party's Obligations	A-37
	7.2	Conditions to Obligations of Buyer	A-37
	7.3	Conditions to Obligations of Seller	A-39
ARTICLE VIII TERMINATION AND AMENDMENT			A-39
	8.1	Termination	A-39
	8.2	Effect of Termination	A-40
	8.3	Fees and Expenses	A-40
	8.4	Termination Fee.	A-41
	8.5	Amendment	A-41
	8.6	Extension; Waiver	A-41

ARTICLE IX GENERAL PROVISIONS			A-41
	9.1	Closing	A-41
	9.2	Nonsurvival of Representations, Warranties and Agreements	A-41
	9.3	Notices	A-42
	9.4	Interpretation	A-42
	9.5	Counterparts	A-43
	9.6	Entire Agreement	A-43
	9.7	Governing Law	A-43
	9.8	Publicity	A-43
	9.9	Assignment; Third Party Beneficiaries	A-43
	9.10	Specific Performance; Time of the Essence	A-43

Definition	Page
Acceptable Confidentiality Agreement	A-35
Acquisition Proposal	A-36
Aggregate Merger Consideration	A-2
Agreement	A-1
Articles of Merger	A-2
Average Closing Price	A-2
Bank Merger	A-2
Bank Merger Certificates	A-4
Bank Plan of Merger	A-4
Buyer	A-1
Buyer Common Stock	A-2
Buyer Compensation and Benefit Plans	A-22
Buyer Consultants	A-22
Buyer Directors	A-22
Buyer Disclosure Schedule	A-19
Buyer Employees	A-22
Buyer ERISA Affiliate	A-23
Buyer ERISA Affiliate Plan	A-23
Buyer Pension Plan	A-22
Buyer's SEC Documents	A-20
Cancelled Shares	A-3
Certificate	A-2
Change in Recommendation	A-36
Claim	A-36
Closing	A-41
Closing Date	A-41
Code	A-1
Confidentiality Agreement	A-33
Covered Employees	A-33
Dissenting Shares	A-3
Division	A-9
DPC Common Shares	A-3
Effective Time	A-2
Enforceability Exception	A-8
Exchange Agent	A-4
Exchange Agent Agreement	A-4
Exchange Fund	A-5
FDIC	A-8
Federal Reserve Board	A-9
FHLB	A-8
Form S-4	A-9
GAAP	A-7
GBCLM	A-1
Governmental Entity	A-9
Insurance Amount	A-34
Intellectual Property	A-18
Letter of Transmittal	A-5

Loans	A-17
Material Adverse Effect	A-7
Measuring Date	A-3
Merger	A-1
Merger Sub	A-1
Mergers	A-1
Missouri Secretary of State	A-2
Nasdaq	A-2
Outstanding Seller Common Stock	A-2
Parties	A-1
Per Share Cash Consideration	A-2
Per Share Stock Consideration	A-2
Previously Disclosed	A-6, A-19
Proxy Statement	A-9
Regulatory Authorities	A-10
Requisite Regulatory Approvals	A-38
SEC	A-9
Second Articles of Merger	A-4
Second Effective Time	A-4
Second Step Merger	A-1
Seller	A-1
Seller Articles	A-7
Seller Board Recommendation	A-32
Seller Bylaws	A-7
Seller Common Stock	A-2
Seller Compensation and Benefit Plans	A-12
Seller Confidential Information	A-35
Seller Consultants	A-12
Seller Contracts	A-11
Seller Directors	A-12
Seller Disclosure Schedule	A-6
Seller Employees	A-12
Seller ERISA Affiliate	A-12
Seller ERISA Affiliate Plan	A-12
Seller Financial Statements	A-9
Seller Indemnified Party	A-35
Seller Individuals	A-35
Seller Pension Plan	A-12
Seller Representatives	A-35
Seller Shareholder Approval	A-8
Seller Shareholder Meeting	A-33
Seller's Capital	A-3
SMB	A-1
Southern Bank	A-1
Subsidiary	A-7
Superior Proposal	A-36
Surviving Bank	A-4
Surviving Company	A-1
Surviving Corporation	A-1
Takeover Laws	A-14
Tax	A-15

Tax Return	A-15
Taxes	A-15
Termination Fee	A-41
Transaction Expenses	A-3
Trust Account Common Shares	A-3
Unduly Burdensome Condition	A-38
Voting Agreement	A-1