Simmons First to acquire Tennessee bank in a $243.4 million deal

The acquisition activity for Pine Bluff, Ark,-based Simmons First National Corp. continues with the bank on Tuesday (May 6) announcing a $243.4 million deal to acquire Community First Bancshares based in Union City, Tenn.

The Community First deal comes less than two months after Simmons announced the $66 million acquisition of Little Rock-based Delta Trust and Bank, and comes less than a year after Simmons’ $53.6 million bid to buy Little Rock-based Metropolitan National Bank out of a bankruptcy process.

In a recent interview with Talk Business, Simmons First CEO George Makris Jr. hinted that the next moves might be in Kansas or Missouri.

“We really would like to fill in our footprint in Missouri and Kansas. We have a strategy now for de novo growth. We’ve got some really good bankers in those markets,” Makris said in the interview. “We need a little more scale in those markets to be able to do some of the things that we really want to do.”

Simmons said Tuesday that the Community First deal would immediately boost earnings. The deal is expected to close in the fourth quarter, and is subject to regulatory approvals.

"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," Makris said in the statement. "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."

Simmons noted that the deal would provide the bank with an “Entrance” to the Nashville metro area.

As of March 31, Community First had $1.9 billion in assets, held $1.1 billion in loans and had $1.6 billion in deposits, and operated 32 “Financial Centers” in the state. According to the Simmons statement, the bank is the fifth largest bank based in Tennessee according to deposits. Union City is in the northwest corner of Tennessee.

As of March 31, Simmons First National was a $4.4 billion financial holding company with operations in Arkansas, Kansas and Missouri. Pine Bluff-based Simmons First posted first quarter net income of $4.35 million compared to $5.94 million one year ago. However after settling one-time charges associated with its acquisition of Metropolitan National Bank, Simmons First’s core earnings were $7.48 million for the quarter compared to $6.08 million one year ago.

"We at First State are excited about the strategic merger of our company with Simmons. The philosophy and strategic plan of Simmons mirrors that of First State in many ways," Community First President and CEO, John Clark said in the Simmons statement. "Both institutions are over one hundred years old with roots in rural markets and have completed successful expansions into faster growing metropolitan markets. Each places a strong emphasis on asset quality, stability of earnings and excellent regulatory relationships."

Simmons shares (NASDAQ: SFNC) were trading late afternoon at $36.66, down eight cents. During the past 52 weeks, the price of the thinly traded shares has ranged from a $39.05 high to a $24.06 low.