Pine Bluff-based Simmons First National Corp. will acquire Community First Bancshares of Tennessee in a $243.4 million deal announced Tuesday (May 6). The all-stock transaction will add two board members to Simmons First board of directors.
Simmons recently completed its $53.6 million acquisition of Little Rock-based Metropolitan National Bank in April. It also announced it would acquire Little Rock-based Delta Trust & Bank for $66 million in March.
Community First Bancshares is the holding company for First State Bank and is headquartered in Union City, Tennessee. According to a statement from Simmons First, First State Bank is the fifth largest bank in Tennessee in terms of deposits. Community First was founded in 1877 and has 32 branches in western Tennessee and a newer footprint in Nashville and Knoxville.
“We are excited to welcome the associates and customers of First State Bank and its subsidiaries to the Simmons Family. As Simmons continues to expand its community banking strategy, it is important that we seek partners that have common goals, experience, and reputations as excellent corporate citizens. First State certainly fits that criteria,” said George Makris, Simmons First Chairman and CEO. “The leadership of First State throughout its 127 years has built a franchise focused on meeting the financial service needs of its customers in the markets it serves. We believe this partnership will enhance the customer experience for both Simmons and First State customers.”
The transaction is expected to be immediately accretive to the company’s diluted core earnings per common share and should close in the fourth quarter of 2014.
In a conference call with analysts on Tuesday afternoon, Makris said that the banks compliment each other. Community First and Simmons First have large market shares in rural, agricultural markets.
Makris said that access to capital, similar cultures, and no market overlap made the transaction attractive.
Makris also said that he did not expect many job cuts at Community First as part of the deal.
He also said the bank would spend time over the next year to study whether or not to change the “First State” brand to Simmons First. Makris said “First State” is a top-notch brand in the market and he felt Simmons’ market research might direct it to keep the name versus changing it.
In response to another analyst question, Makris said integration of Metropolitan, Delta Trust and now Community First would be “a top priority” for the bank moving forward.
Simmons First shares (NASDAQ: SFNC) closed trading Tuesday at $36.66. The company’s stock has traded between $24.06 and $39.05 during the past year.