story by Roby Brock, a TCW content partner and owner of Talk Business
Simmons First National Corp. will acquire Little Rock-based Delta Trust & Banking Corp. for roughly $66 million. The Pine Bluff-based bank said it has entered into a definitive agreement and plan of merger with Delta Trust.
According to the terms of the agreement, Simmons First will acquire all of the outstanding common stock of Delta Trust in a transaction valued at approximately $66 million, subject to potential adjustments. The transaction is expected to be accretive to the company’s diluted earnings per common share for the first 12 months after the transaction closes and thereafter.
The transaction is the second in less than a year for Simmons First, which acquired Little Rock-based Metropolitan National Bank in September 2013 for $53.6 million.
“French Hill and his team have developed a successful and well-respected financial services franchise. In addition to the growth opportunities afforded Simmons Bank, we look forward to expanding our Simmons Trust services, and offering investment management and insurance products throughout the markets we serve,” said George A. Makris, Jr, Simmons First Chairman and CEO. “We believe the acquisition will enhance our ability to offer a full range of financial services to our customers including wealth management, consumer and commercial financing needs, and asset protection.”
Delta Trust & Bank has assets of approximately $431 million; loans of $319 million; deposits of $377 million and total equity of $40.6 million. It has nine banking locations in Little Rock, northwest Arkansas, and south Arkansas, and is building a new location in Conway.
“We are excited that our expertise in the strategic areas of investment brokerage, trust administration and insurance sales along with our experienced commercial bankers in all three Arkansas markets are going to be able to join the dynamic, growing Simmons franchise,” said Delta Trust founder and CEO French Hill. Hill continued, “Our employees will have expanded career opportunities as Simmons expands its reach in Arkansas and its new locations in Missouri and Kansas.”
Completion of the transaction is expected in the third quarter of 2014.
Under the terms of the agreement, each outstanding share of common stock and equivalents of Delta Trust will be converted, at the election of each Delta Trust shareholder, into the right to receive shares of the company’s common stock or the right to receive cash, all subject to certain conditions and potential adjustments, provided that the cash portion of the merger consideration paid to Delta Trust shareholders will be limited to approximately $10 million.
The number of shares to be issued is fixed with an exchange ratio of 15.1428 shares of Simmons First (NASDAQ: SFNC) stock for each share of Delta Trust stock or cash of $545.14 per share of Delta Trust stock.
Shares of Simmons First closed trading on Monday (March 24) at $37.47 per share. The company’s stock has traded between $23.16 and $38.54 per share during the last year.