Simmons First to buy Oklahoma bank in cash-and-stock deal worth $564 million, deal expands operations to seven states

by Wesley Brown ( 190 views 

Simmons First National Corp. announced after Wednesday’s closing bell it had entered into an agreement to acquire Stillwater, Okla.-based Southwest Bancorp Inc. in a cash-and-stock deal valued at more than $564 million, the two publicly-traded banks announced.

The deal, one the largest in the Pine Bluff banking group’s history, would easily push the growth-oriented Arkansas financial concern well over the $10 billion mark, the key financial touchstone established by the Dodd-Frank Wall Street Reform and Consumer Protection act as the regulatory baseline between super-community banks and larger regional banking groups.

“We are excited to welcome the customers and associates of Bank SNB to the Simmons family.  This transaction provides Simmons with an incredible opportunity to enter new markets in new states – Oklahoma, Colorado, and Texas – and grow our operations in Kansas,” Simmons Chairman and CEO  George Makris Jr. said of the year-ending deal.

Southwest Bancorp was organized in 1981 and reported assets of $2.5 billion at the end of the third quarter. Its operating subsidiary, Bank SNB, was chartered in 1894 and offers commercial and deposit services from offices in Oklahoma, Kansas, Texas and Colorado.

The fast-growing Oklahoma community bank was previously known as Stillwater National Bank and Trust Company, but changed its name to Bank SNB nearly three years ago. Immediately prior to the name change, the Stillwater National Bank merged on Nov. 15, 2013 with Southwest Bancorp’s main subsidiary, the Bank of Kansas, and created what is now known as Bank SNB.

“We at Southwest Bancorp are thrilled about the merger of our company with Simmons,” said Mark Funke, SBI’s President and CEO. “After much consideration of our strategic options, it became clear that partnering with Simmons – a premier financial institution that still appreciates the advantages of the community banking model – presents the best long-term opportunity for our associates, customers, and shareholders alike. We’re eager to experience all the benefits of the combined franchises.”

According to the terms of the deal, which is expected to close in the third quarter of 2017, shareholders of SBI’s common stock will have the right to receive 0.3903 shares of the Simmons First’s common stock and $5.11 in cash, subject to certain conditions and potential adjustments.

After closing, which is subject to approval by shareholders of both companies and state and federal regulatory endorsements, SNB is expected to continue operations as a separate bank subsidiary of Simmons for an interim period until it is merged into Simmons Bank.

“The leadership of Bank SNB, quarterbacked by Mark Funke, has been dedicated to building a brand known for excellence in customer service. They’ve been highly successful, and we look forward to their continued involvement in the combined organization,” Makris said.

Once combined, Funk is expected to continue as the new head of the Southwest Division of Simmons Bank, where he will oversee the Pine Bluff’s banking group’s operations in Oklahoma, Texas, Colorado and Kansas. As of today, Simmons has operations in Arkansas, Kansas, Missouri and Tennessee.

On Nov. 17, Simmons First also announced a deal to acquire Jackson, Tenn.-based Hardeman County Investment Company Inc. and its wholly-owned subsidiary, First South Bank, for $72 million. That deal is expected to close early next year and will increase the Arkansas community bank’s assets and deposits by $464 million and $373 million, respectively.

The SNB deal would create a regional bank giant headquartered in Pine Bluff with branch offices in seven states and combined assets of $11.1 billion, a loan portfolio worth $7.5 billion, and deposits totaling nearly $9 billion. That would also allow Simmons First to leapfrog Conway-based Home Bancshares Inc. as the state’s third largest bank.

According to the third quarter ranking by Banks Street Partners (BSP) LLC, Bank of the Ozarks is now the largest bank in Arkansas with $18.4 billion in assets. Arvest Bank, which has held the top position for more than a decade, is now the state’s second largest bank with $17 million in assets. Centennial Bank and Simmons are third and fourth in the quarterly BSP ranking with assets of $9.7 billion and $7.6 billion, respectively.

At Wednesday’s close on the NASDAQ stock exchange, Simmons First shares closed at flat at $64.75. Southwest Bancorp’s shares close at $23.80, down 50 cents or 2.06%. Given Simmons First closing price today, Funke’s cash-and-stock holdings from the deal would be worth nearly $11.5 million.