Growth-focused Simmons First National Corp. said Wednesday it has entered into a definitive stock purchase agreement with Citizens National Bancorp Inc. to acquire Citizens National Bank (CNB) of Athens, Tenn.
According to the terms of the deal, Pine Bluff-based Simmons will acquire all of the outstanding common stock of CNB in a transaction valued at approximately $77 million based on the company’s May 17, 2016, closing price. The purchase price will consist of 835,741 shares of Simmons common stock and $40.3 million in cash.
“We’re pleased to welcome the customers and associates of Citizens National Bank to the Simmons family,” George Makris Jr., Simmons chairman and CEO said in the statement. “As we continue to expand our community banking strategy, it’s important that we find partners who have common goals, experience, culture and reputations as excellent corporate citizens. Throughout the bank’s 108 years, the CNB leadership has built a franchise focused on meeting the financial service needs of its customers in the markets it serves. We value that legacy and plan to continue to provide high levels of quality customer service.”
CNB operates nine financial centers in eastern Tennessee with assets of $552 million, loans of $352 million, deposits of $473 million and trust assets of $217 million.
“CNB is excited about the strategic partnership with Simmons Bank,” said Paul Willson, the CNB chairman. “Both institutions have their roots in rural markets and have successfully served the banking needs of their customers for more than 100 years.”
Simmons, which was represented by Keefe, Bruyette & Woods Inc., said the acquisition is expected to be completed in the fourth quarter of 2016 and is subject to certain closing conditions, including approval by the shareholders of Citizens and customary regulatory approvals. After closing, CNB is expected to continue operating as a separate bank subsidiary of the company for an interim period until it’s merged into Simmons Bank.
The CNB acquisition will push Simmons closer to the $10 billion asset mark, the regulatory baseline between super-community banks and larger regional banking groups. The Pine Bluff-based banking group, whose profits jumped nearly 170% to $23.5 million in the first quarter, now has assets of $7.6 billion.
Simmons’ main rivals in central Arkansas, Home Bancshares and Bank of the Ozarks, recently neared or breached the $10 billion mark. At the end of the first quarter, Home Bancshares assets were just below the $10 billion milestone. Little Rock-based Bank of the Ozarks topped the $10 billion mark in late 2015 and now has assets exceeding $11.4 billion.
Since 2010, Simmons has closed several acquisitions that have more than doubled the south Arkansas bank’s asset value. Those acquisitions, mostly through the FDIC-failed bank auction, have also expanded Simmons’ banking reach across Arkansas, Kansas, Missouri and Tennessee.
At the close of business Wednesday, Simmons’ shares (NASDAQ: SFNC) closed at $45.79, up $1.89, ore more than 4.3%. During the past 52 weeks the share price has ranged from a $58.75 high to a $38.30 low.