Simmons First National Comes of Age in Market

It used to be that college students looked to Simmons First National Bank of Northwest Arkansas for a loan to get through school. Now many of those customers are apparently coming back for the loans they need to get through life.

Two expansions in three years, the additions of eight area locations, and $125 million in new assets have enabled Simmons to do something that could only make most Northwest Arkansas bankers salivate — increase its market share.

Simmons, a subsidiary of publicly traded Simmons First National Corp. of Pine Bluff, has seen its share of the $4.2 billion in deposits throughout Washington and Benton counties grow from 2.01 percent ($73 million) in 1998 to 4.44 percent ($187.7 million) last year. During the same time, Simmons’ student loans have remained fairly constant.

But the local division’s commercial lending has simultaneously taken off 50 to 60 percent, or about $45 million. It’s a sign that the bank is achieving the critical mass necessary to move from a small retail institution to a lender that can seriously impact business.

Joe Mills, CEO of Simmons in Northwest Arkansas, said the 1999 merger with Bank of Lincoln and 2000 acquisition of six local branches of First Financial Bank in El Dorado gave Simmons the infrastructure to mature.

First Financial’s six branches came with $44 million in assets and $33 million in deposits. Bank of Lincoln’s two had $75 million in assets and $54 million in deposits.

Mills hinted that Simmons may even be interested in more acquisitions as the tight market shakes out.

“Certainly, without those deals it would have taken a lot more time to double our market share and to have the kind of good growth that we’ve had,” Mills said. “They enabled us to get to a size that’s necessary to serve all of Northwest Arkansas. It’s our strategic plan to grow internally and externally. If the right opportunities come around, we could be a player in that process.”

Simmons entered the two-county market 12 years ago with about $22 million in local assets. As of early September, that figure had grown to $207 million.

The net income for Simmons’ Northwest Arkansas group in 2001 was $485,000, or 3 percent of the corporation’s $16.5 million total. Local net interest income ($6.9 million) plus non-interest income ($1.7 million) was $8.6 million, or that same percent of the corporation’s $100 million total.

J. Thomas May — chairman, president and CEO of Simmons First National Corp. — said the northwest division has become a company bright spot. The $2 billion overall corporation boasts 65 locations in 34 communities that stretch diagonally across Arkansas like a beauty queen’s sash.

“The merger of Lincoln and purchase of First Financial’s centers in Northwest Arkansas have certainly increased our ability to serve our customers in that region,” May said. “Joe Mills and his team have spent a great deal of time integrating the three institutions into one common culture, and we are very pleased with their success.”

Simmons’ Northwest Arkansas offices stretch from Bella Vista to Lincoln. And the market’s ample opportunities have made it easy for Simmons to keep those facilities staffed.

Dennis Ferguson was president of Simmons First Bank of Dumas for 18 years until transferring to the Northwest Arkansas division in August of 2001. Although he said he wishes a lot of friends and family could have moved with him, the difference between Northwest Arkansas and the Delta is “daylight and dark.”

“It was a no brainer,” Ferguson said. “Everyone said why in the world would you want to leave a bank that was one of the most profitable in Simmons organization, where you could play golf everyday if you wanted to. We had an ROA [return on assets] of about 2.02 for the first 11 months of 2001.

“But because of the economy in Northwest Arkansas and Simmons’ position in the market, the growth potential is unlimited.”

Bank Digestion

Two First Financial locations — one a hundred yards south of the Northwest Arkansas Mall on Joyce Boulevard and another on Springdale’s Sunset Avenue — were sold almost immediately after the 2000 acquisition. Simmons already had two locations within a mile of the mall, and the First Financial facility in Springdale was directly across the street from another Simmons branch.

But Simmons integrated all 50 of First Financial’s employees into its other branches so that no one was left without a job. Harry Blair was a vice president for First Financial, focusing on construction and commercial lending in 2000.

Now a vice president of Simmons in Northwest Arkansas, he said the transition was smooth.

“Everyone is apprehensive about change,” Blair said. “All of the staff was concerned. There had been several bank acquisitions in the past here where someone came in and said nothing was going to change and everyone would keep their jobs, then three months later they laid everyone off.

“But Simmons came in and did everything they said they were going to do. The two banks’ philosophies are real similar, but the acquisition has worked out better than before because now we’re a larger bank with much more local lending authority.”

Blair said at First Financial the local branches had the authority to lend up to $750,000 without approval from a corporate loan committee. With Simmons, that’s up to $1 million which enables him to serve more commercial clients fast.

“I keep about 60 to 65 construction loans going all of the time now because I’m able to maintain with the builders,” Blair said.

All of the former Bank of Lincoln’s locations were kept and its former president, Loyd Swope, serves as special assistant to Mills and sits on Simmons of Northwest Arkansas’ board.

Old School

Mills’ family has been in Rogers since the Civil War. He represents the family’s third generation to graduate from Rogers High School, a community where almost on a nightly basis he can be seen doing everything from flipping burgers at the Benton County Fair to helping with charities such as United Way or Polo in the Ozarks.

Employees from the receptionist to loan officers at Simmons of Northwest Arkansas’ Rogers headquarters are quick to offer a handshake, cup of coffee or friendly conversation to anyone who darkens the door. Mills hometown charm has become Simmons motto personified: “Treat every customer the way you want to be treated when you’re a customer.”

“Everyone’s money is the same color, and we treat everyone the same,” Mills said. “We’re big enough to meet our commercial customers’ needs, but small enough to know their names. We also want to earn their trust. Although we want everyone’s business, we’re going to tell you if your long-term vision and ours aren’t a good fit.

“If a company’s vision is to take a lot of risks and leverage themselves in a way that we believe is too risky, we’re going to advise them to visit one of our competitors … We’re a little old school, but we believe the best way to grow a business is through good fundamental financials.”

Simmons First Bank of NWA Board of Directors

Director — Title — Affiliation

Dennis Ferguson of Rogers— Exec. vice president — Simmons First of NWA
Dorothy Hanby of Springdale — Owner — Dorothy Hanby CPA

Joe Mills of Rogers— CEO — Simmons First of NWA
Craig Hunt of Pine Bluff — Exec. vice president — Simmons First National Bank

Lloyd Swope of Rogers — Asst. to the president — Simmons First of NWA
Sonya Yates of Fayetteville — President — Casey Jones Land Co.
Jim Tull of Rogers — Treasurer, CFO — Crafton Tull & Associates

Source: the bank