SOUTHWEST GEORGIA FINANCIAL CORP. Item 8.01. Other Events.
The following disclosures supplement the disclosures contained in the definitive proxy statement/prospectus, datedFebruary 18, 2020 (the "Proxy Statement"), which was filed bySouthwest Georgia Financial Corporation ("SGB") with theU.S. Securities and Exchange Commission (the "SEC") onFebruary 20, 2020 and mailed on or aboutFebruary 21, 2020 to SGB's shareholders of record as of the close of business onFebruary 12, 2020 in connection with the previously announced proposed acquisition of SGB byFirst Bancshares, Inc. ("First Bancshares"). Subject to the terms and conditions of the Agreement and Plan of Merger (the "Merger Agreement"), dated as ofDecember 18, 2019 , by and between SGB and First Bancshares, SGB will merge with and into First Bancshares (the "Merger"), with First Bancshares continuing as the surviving entity. OnFebruary 28, 2020 , SGB received a letter on behalf of an alleged shareholder alleging that SGB and its directors violated their fiduciary duties including by issuing allegedly misleading disclosures in connection with the Merger (the "Demand"). While SGB believes that the disclosures set forth in the Proxy Statement comply fully with applicable law, to resolve the alleged shareholder's claims and moot the disclosure claims, to avoid nuisance, potential expense, and delay and to provide additional information to SGB's shareholders, SGB has determined to voluntarily supplement the Proxy Statement with the below disclosures. In light of the supplemental disclosures, the Demand is being withdrawn. Nothing in the below supplemental disclosure shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein or in the Proxy Statement. To the contrary, SGB denies all allegations that any additional disclosure was, or is, required. SUPPLEMENT TO PROXY STATEMENT The following information supplements the Proxy Statement and should be read in connection with the Proxy Statement, which should be read in its entirety. To the extent that information herein differs from or updates information contained in the Proxy Statement, the information contained herein supersedes the information contained in the Proxy Statement. All page references in the information below are to pages in the Proxy Statement, and terms used below have the meanings set forth in the Proxy Statement, unless otherwise defined below. Background of the Merger The disclosure under the heading "THE MERGER-Background of the Merger" is hereby supplemented by deleting the fourth sentence of the third paragraph on page 36 of the Proxy Statement and replacing it with the following:
After discussing the revised proposal from First Bancshares and the final
proposal from
The disclosure under the heading "THE MERGER-Background of the Merger" is hereby supplemented by deleting the fourth paragraph on page 36 of the Proxy Statement and replacing it with the following: Through the remainder ofNovember 2019 and during the first two weeks ofDecember 2019 , SGB continued to make additional due diligence materials available to First Bancshares and its representatives, and SGB's management and its representatives participated in discussions about due diligence as well as the future employment of certain SGB officers with First Bancshares and its representatives. The disclosure under the heading "THE MERGER-Background of the Merger" is hereby supplemented by adding the following sentences after the last sentence of the second paragraph following the word release on page 37 of the Proxy Statement:
Both nondisclosure agreements of The First and
Opinion of SGB's Financial Advisor
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-First Bancshares Comparable Companies Analysis" is hereby supplemented by deleting the table listing 10 financial institutions at the bottom of page 43 of the Proxy Statement and replacing it with the following:
Financial and performance data as of or for the last twelve months ended
NASDAQ and Over-the-Counter Southeast Financial Institutions with Total Assets
Financial and Performance Figures
Trading Data
Price/
LTM LTM Current
Total NPAs/ Core Core LTM Eff. LTM '19 '20 MRQ '20 Div.
Assets Assets TCE Ratio ROAA(1) ROAE(1) NIM Ratio Market ADV EPS EPS EPS TBV TBV Assets Yield Company Name Ticker State ($000 ) (%)
(%) (%) (%) (%) (%) Cap. ($mm) (shares) (x) (x) (x) (%) (%) (%) (%) City Holding Company
CHCO WV 4,957,717 1.02 10.93 1.86 14.78 3.61 49.6 1,344.8 53,554 17.5 15.4 15.9 254.3 225.3 27.1 2.76 Carter Bank & Trust
CARE VA 4,020,076 4.58 10.48 0.73 6.58 3.04 65.2 598.6 122,877 22.5 21.4 17.3 144.1 131.1 14.9 -
Franklin Financial Network,
Inc. FSB TN 3,818,324 0.09 10.25 0.75 8.11 2.83 58.5 517.9 61,906 23.0 16.8 12.5 132.3 120.2 13.5 0.68 HomeTrust Bancshares, Inc. HTBI NC 3,655,309 1.04
10.62 0.85 7.16 3.40 66.3 473.6 41,308 17.5 18.9 16.3 124.3 120.5 13.1 1.04 Capital City Bank Group, Inc. CCBG FL 2,934,513 0.81
8.31 1.02 9.68 3.83 71.8 513.5 41,844 16.8 17.4 17.0 216.9 198.2 17.5 1.70Southern National Bancorp of Virginia, Inc. SONA VA 2,698,915 0.26 10.09 1.31 10.01 3.46 52.7 403.6 60,764 12.7 11.4 12.2 154.5 134.2 14.9 2.16 Atlantic Capital Bancshares, Inc. ACBI GA 2,410,198 0.77 12.80 1.15 9.32 3.63 55.1 414.1 79,121 8.9 16.3 15.4 137.4 128.6 17.4 - SmartFinancial, Inc. SMBK TN 2,390,485 0.18
9.88 1.11 8.92 4.05 61.7 327.1 39,740 12.5 14.5 13.8 143.1 136.0 13.7 0.85 Summit Financial Group, Inc. SMMF WV 2,323,609 2.46
9.53 1.36 13.24 3.65 53.7 341.0 10,973 11.0 12.1 11.7 156.4 147.6 14.8 2.18 First Community Bankshares, Inc. FCBC VA 2,205,047 1.16 11.40 1.63 10.83 4.67 55.8 483.6 30,040 12.9 14.2 14.2 201.2 194.9 21.9 3.22
Source:
(1) LTM Core ROAA and ROAE defined by
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-First Bancshares Comparable Companies Analysis" is hereby supplemented by deleting the table listing 18 financial institutions at the bottom of page 44 of the Proxy Statement and replacing it with the following:
Financial and performance data as of or for the last twelve months ended
NASDAQ and Over-the-Counter
Financial and Performance Figures
Price/
LTM LTM Current
Total NPAs/ Core Core LTM Eff. LTM '19 '20 MRQ '20 Div.
Assets Assets TCE Ratio ROAA(1) ROAE(1) NIM Ratio Market ADV EPS EPS EPS TBV TBV Assets Yield
Company Name Ticker State ($000 ) (%) (%) (%) (%) (%) (%) Cap. ($mm) (shares) (x) (x) (x) (%) (%) (%) (%)Great Southern BanCorp., Inc. GSBC MO 4,972,160 0.21 11.85 1.55 13.43 4.01 52.7 911.9 34,653 12.6 12.5 13.6 154.7 145.7 18.3 2.12 Lakeland Financial Corp. LKFN IN 4,948,155 0.50 11.72 1.74 15.75 3.43 44.7 1,258.8 62,328 14.8 15.1 15.8 217.3 NA 25.4 2.43 BanCorp., Inc. TBBK DE 4,943,536 0.19
9.74 1.29 13.36 3.34 65.0 755.6 203,632 13.2 12.4 11.0 156.9 134.7 15.3 - Bryn Mawr Bank Corp.
BMTC PA 4,828,641 0.40 8.60 1.39 11.13 3.66 60.1 824.3 71,223 13.8 13.5 13.1 207.4 182.0 17.1 2.54 Camden National Corp.
CAC ME 4,520,315 0.30 8.44 1.31 12.72 3.17 55.6 692.8 40,132 12.7 12.7 13.5 186.0 168.8 15.4 2.63 Peoples BanCorp. Inc.
PEBO OH 4,396,148 0.61 9.77 1.46 11.03 3.76 61.5 701.7 44,688 13.1 11.9 12.5 172.8 160.4 16.2 3.95
German American BanCorp., Inc. GABC IN 4,355,882 0.31 10.16 1.51 12.44 3.87 56.9 943.3 48,354 16.5 15.1 15.0 219.8 194.5 21.7 1.92
First Mid Bancshares, Inc. FMBH IL 3,837,729 0.75 10.50 1.40 10.90 3.72 56.0 596.3 29,857 12.9 12.2 13.0 153.2 139.1 15.5 2.24
Mercantile Bank Corp. MBWM MI 3,710,380 0.84
9.67 1.34 12.12 3.84 58.9 605.1 40,414 12.8 13.5 14.7 171.1 159.4 16.3 2.92
IBCP MI 3,550,837 1.58 8.71 1.27 12.66 3.86 66.1 512.4 86,674 12.6 10.8 11.6 167.2 152.0 14.4 3.16
First Defiance Financial
Corp.. FDEF OH 3,350,724 0.75 9.67 1.53 12.33 3.99 59.1 615.6 78,460 12.8 12.6 12.1 196.1 178.8 18.4 2.82 Heritage Commerce Corp. HTBK CA 3,182,471 0.44
9.74 1.61 13.38 4.36 49.9 768.4 265,951 11.8 12.4 12.5 187.8 187.0 17.7 3.70 Nicolet Bankshares, Inc. NCBS WI 3,105,671 0.35 10.28 1.74 13.26 4.17 55.1 784.8 26,272 13.6 15.3 15.6 227.9 196.1 22.5 - RBB BanCorp. RBB CA 2,820,302 0.39 11.98 1.40 10.57 3.73 48.2 423.5 54,276 11.2 11.0 10.5 128.5 116.8 15.0 1.89 Southern National BanCorp. of Virginia, Inc. SONA VA 2,698,915 0.26
10.09 1.31 10.01 3.46 52.7 403.6 60,764 12.7 11.4 12.2 154.5 134.2 14.9 2.16 Sierra BanCorp.
BSRR CA 2,635,960 0.63 10.39 1.35 12.07 4.22 58.3 447.6 30,936 13.1 12.9 13.7 165.5 151.0 17.0 2.60 Old Second BanCorp., Inc. OSBC IL 2,614,315 0.76
9.59 1.35 14.62 4.11 59.7 388.1 65,272 10.2 10.4 11.2 156.1 133.2 14.8 0.31 Bank of Marin BanCorp.
BMRC CA 2,592,071 0.48 11.65 1.36 10.72 4.04 54.8 626.8 25,559 18.4 19.2 19.3 211.7 195.2 24.3 1.81
Source:
(1) LTM Core ROAA and ROAE defined by
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-First Bancshares Comparable Companies Analysis" is hereby supplemented by deleting the table listing 14 financial institutions at the bottom of page 45 of the Proxy Statement and replacing it with the following:
Financial and performance data as of or for the last twelve months ended
NASDAQ and Over-the-CounterU.S. Financial Institutions with Total Assets$250.0 Million -$750 Million , Core ROAA .75% - 1.10%, NPAs/Assets less than 1.00%, and had ADV greater than 500 Financial and Performance Figures Trading Data Price/ LTM LTM LTM Current Total NPAs/ Core Core LTM Eff. LTM Div. Assets Assets TCE Ratio ROAA(1) ROAE(1) NIM Ratio Market Cap. ADV EPS TBV Assets Yield Company Name Ticker State ($000 ) (%) (%) (%) (%) (%) (%) ($mm) (shares) (x) (%) (%) (%) Fauquier Bankshares, Inc. FBSS VA 726,339 0.80 9.08 0.96 10.87 3.78 73.6 77.1 2,210 11.3 116.8 10.6 2.46 Bank of the James Financial Group, Inc. BOTJ VA 708,114 0.63 8.62
0.78 9.23 3.82 74.9 66.2 3,547 11.9 108.7
9.4 1.58 American Riviera Bank ARBV CA 697,267 0.01 10.00
1.00 9.42 4.36 65.2 97.8 1,147 15.3 143.7 14.3 - Summit State Bank SSBI CA 680,840 0.44 9.15 0.92 9.11 3.65 65.7 77.8 4,475 13.6 125.8 11.4 3.74Juniata Valley Financial Corp. JUVF PA 667,107 0.49 9.79 0.95 8.78 3.57 77.2 100.4 1,163 18.0 155.8 15.0 4.48 ChoiceOne Financial Services, Inc. COFS MI 663,589 0.89 10.91 1.05 8.48 3.68 71.7 235.5 4,620 19.8 166.6 17.8 2.46 Virginia National Bankshares Corp. VABK VA 660,790 0.40 11.33 1.04 9.18 3.69 64.1 101.0 1,134 14.5 135.0 15.3 3.20 Jonestown Bank and Trust Co. JNES PA 629,663 0.98 9.03
0.83 9.19 3.78 70.6 58.4 1,710 11.5 102.7
9.3 3.15 Consumers Bancorp, Inc. CBKM OH 565,187 0.16 9.38
1.03 11.23 3.61 71.5 51.8 1,723 9.5 97.7
9.2 2.86 US Metro Bank USMT CA 507,248 - 11.12 1.05 8.54 4.01 63.5 59.1 5,423 12.6 104.7 11.6 -Community Bank of the Bay CBYA.A CA 491,389 0.18 11.10 0.89 7.60 4.23 65.6 59.4 1,557 15.8 115.6 12.8 - Farmers and Merchants Bancshares, Inc. FMFG MD 434,506 0.49 11.28 1.09 9.87 3.68 63.1 54.0 1,738 11.6 110.2 12.4 2.85River Valley Community Bancorp RVCB CA 419,308 - 9.07 0.89 10.49 3.26 59.4 45.7 1,621 12.0 120.2 10.9 - Quaint Oak Bancorp, Inc. QNTO PA 293,820 0.94 8.43 0.88 10.07 3.22 71.3 27.9 698 11.9 115.2 9.7 2.53
Source:
(1) LTM Core ROAA and ROAE defined by
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial
Advisor-Summary of Merger Consideration and Implied Transaction
Metrics-Precedent Transaction Analysis" is hereby supplemented by deleting the
table at the top of page 47 (Southeast Transactions) of the Proxy Statement and
replacing it with the following:
Transaction Price/
Premium/
LTM Core
Announce Earnings TBV Assets Deposits
Buyer Name/ Target Name Target State Date (x) (%) (%) (%)SmartFinancial, Inc./Progressive Financial Group, Inc. TN 10/29/19 27.0 124.9 14.2 4.2 Reliant Bancorp, Inc./First Advantage Bancorp TN 10/23/19 17.9 152.3 16.8 9.8 Banco de Credito e Inversiones SA/Executive Banking Corp. FL 09/25/19 22.2 176.2 16.5 9.5 Reliant Bancorp, Inc./Tennessee Community Bank Holdings, Inc. TN 09/16/19 15.4 144.0 15.3 7.3 First Community Bankshares, Inc./Highlands Bankshares, Inc. VA 09/11/19 25.0 155.2 15.2 7.3 Community First Bancshares, Inc. (MHC)/ABB Financial Group, Inc. GA 08/20/19 14.9 158.1 13.1 9.4 First Financial Banc Corp./First National Corp. of Wynne AR 07/25/19 12.7 153.6 18.4 9.0First Bancshares, Inc. /First Florida Bancorp, Inc. FL 07/22/19 17.3 176.6 18.7 13.7 Carolina Financial Corp./Carolina Trust BancShares, Inc. NC 07/15/19 21.8 162.4 16.2 9.7 Blue Ridge Bankshares, Inc./Virginia Community Bankshares, Inc. VA 05/14/19 21.7 182.4 17.8 9.7 BancorpSouth Bank/Summit Financial Enterprises, Inc. FL 03/05/19 14.3 173.1 21.3 11.5 United Community Banks, Inc./First Madison Bank & Trust GA
02/05/19 11.4 171.5 20.1 14.2
Source:
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-Precedent Transaction Analysis" is hereby supplemented by deleting the table at the bottom of page 47 (U.S. Transactions) of the Proxy Statement and replacing it with the following: Transaction Price/ Premium/ LTM Core Transaction Value Earnings TBV Assets Deposits
Buyer Name/ Target Name Target State Announce Date ($mm) (x) (%) (%)
(%)
Reliant Bancorp, Inc./First Advantage Bancorp TN 10/23/19 124.0 17.9 152.3 16.8 9.8 Centreville Bank/PB Bancorp, Inc. CT 10/22/19 115.5 25.4 147.8 21.5 NA Community Bank System, Inc./Steuben Trust Corp. NY 10/21/19 108.8 15.4 170.8 18.9 11.6 Glacier Bancorp, Inc./State Bank Corp. AZ 09/30/19 135.3 15.6 212.7 19.9 NA Banco de Credito e Inversiones SA/Executive Banking Corp. FL 09/25/19 75.0 22.2 176.2 16.5 9.5 First Financial Bankshares, Inc./TB&T Bancshares, Inc. TX 09/19/19 207.6 19.4 297.1 33.3 28.0 First Community Bankshares, Inc./Highlands Bankshares, Inc. VA 09/11/19 93.2 25.0 155.2 15.2 7.3 Associated Banc-Corp/First Staunton Bancshares, Inc. IL 07/25/19 76.3 16.7 126.9 14.1 4.1 Wintrust Financial Corp./SBC, Inc. IL 07/25/19 90.5 12.3 180.4 15.2 9.5 South Plains Financial, Inc./West Texas State Bank TX 07/25/19 76.1 15.9 147.0 17.7 6.8First Bancshares, Inc. /First Florida Bancorp, Inc. FL 07/22/19 84.3 17.3 176.6 18.7 13.7 Carolina Financial Corp./Carolina Trust BancShares, Inc. NC 07/15/19 100.1 21.8 162.4 16.2 9.7 ACNB Corp./Frederick County Bancorp, Inc. MD 07/02/19 62.3 21.8 172.2 14.1 8.3 Nicolet Bankshares, Inc./Choice Bancorp, Inc. WI 06/27/19 72.1 14.5 201.6 16.7 19.5 BancFirst Corp./Pegasus Bank TX 04/24/19 122.0 17.1 258.6 19.6 13.9 ChoiceOne Financial Services, Inc./County Bank Corp MI 03/25/19 89.0 12.9 150.5 14.4 5.7 Liberty Bank/SBT Bancorp, Inc. CT 03/21/19 71.4 17.3 203.2 14.9 9.2 BancorpSouth Bank/Summit Financial Enterprises, Inc. FL 03/05/19 100.3 14.3 173.1 21.3 11.5 German American Bancorp, Inc./Citizens First Corp. KY 02/21/19 68.1 14.2 148.5 14.3 6.8 Community Bank System, Inc./Kinderhook Bank Corp. NY
01/22/19 93.2 17.1 184.3 14.7 9.1
Source:
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-Merger Premium Analysis" is hereby supplemented by replacing the second sentence of the first paragraph under such heading on page 48 of the Proxy Statement with the sentence below: The 36 companies and premiums included in our premium analysis are listed in the table below and include all transactions announced with selling banks and thrifts with total assets less than$1.0 billion and with common stock listed on the NASDAQ and over-the-counter exchanges at the time of announcement.
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-Merger Premium Analysis" is hereby supplemented by deleting the table under such heading on page 48 of the Proxy Statement and replacing it with the following:
One-Day
Merger
Buyer Name / Target Name Premium
1 BV Financial, Inc. (MHC)/MB Bancorp, Inc.
-3.9
2 Citizens Financial Services, Inc./MidCoast Community Bancorp, Inc. 2.6
3 Banner Corp./AltaPacific Bancorp
3.5
4Santa Cruz County Bank/Lighthouse Bank
8.3
5 1stConstitution Bancorp/Shore Community Bank
11.0
6 ChoiceOne Financial Services, Inc./County Bank Corp
11.9
7 ConnectOne Bancorp, Inc./Bancorp of New Jersey, Inc.
12.6
8 FCN Banc Corp./DSA Financial Corp.
13.2
9Heritage Commerce Corp/Presidio Bank
17.6
10 German American Bancorp, Inc./Citizens First Corp.
17.8
11 Bank of Southern California, National Association/CalWest Bancorp 17.8 12 Investors Bancorp, Inc./Gold Coast Bancorp, Inc.
21.8
13 First Citizens BancShares, Inc./First South Bancorp, Inc.
22.3
14 First Community Bankshares, Inc./Highlands Bankshares, Inc. 22.5 15 Reliant Bancorp, Inc./First Advantage Bancorp
23.6
16 Glacier Bancorp, Inc./State Bank Corp.
25.8
17 Heartland Financial USA, Inc./Blue Valley Ban Corp.
32.2
18Centreville Bank/PB Bancorp, Inc.
33.2
19Cambridge Bancorp/Wellesley Bancorp, Inc.
37.0
20Lewis & Clark Bank/Clatsop Community Bank
37.1
21 Community Bank System, Inc./Steuben Trust Corp.
39.2
22 Carolina Financial Corp./Carolina Trust BancShares, Inc.
39.4
23 First Financial Corp./HopFed Bancorp, Inc.
40.8
24 ACNB Corp./Frederick County Bancorp, Inc.
41.5
25 Nicolet Bankshares, Inc./Choice Bancorp, Inc.
43.8
26Liberty Bank/SBT Bancorp, Inc.
44.3
27 OceanFirst Financial Corp./Country Bank Holding Co., Inc.
44.6
28First Waterloo Bancshares, Inc. /Best Hometown Bancorp, Inc. 48.6 29Corporate America Family Credit Union/Ben Franklin Financial, Inc. 57.4 30 Blue Ridge Bankshares, Inc./Virginia Community Bankshares, Inc. 59.4 31Teachers Credit Union/New Bancorp, Inc.
67.2
32BayCom Corp/Grand Mountain Bancshares, Inc.
70.0
33Central BanCo ., Inc./Liberty Bancorp, Inc.
73.2
34 Community Bank System, Inc./Kinderhook Bank Corp.
74.4
35 Columbia Financial, Inc. (MHC)/Stewardship Financial Corp.
77.0
36 C&F Financial Corp./Peoples Bankshares, Inc. 94.3 Median 35.1 25th Percentile 17.8 75th Percentile 45.6 First Bancshares / SGB 59.1
Sources:
The disclosure under the heading "THE MERGER-Opinion of SGB's Financial Advisor-Summary of Merger Consideration and Implied Transaction Metrics-Net . . .
© Edgar Online, source
