Simmons announces $462 million deal with Texas bank, third deal in three months will push assets over $13 billion mark

Simmons First National Bank on Monday (Jan. 23) announced its third out-of-state acquisition in less than three months, entering into a $462 million stock-and-cash deal with a Texas bank that will balloon the Pine Bluff banks’ total assets to more than $13 billion by the end of 2017.

After the close of business on Monday, Simmons First officials said the bank entered into a definitive agreement and plan of merger with First Texas BHC Inc., a privately held Fort Worth-based bank with deposits of $1.5 billion and assets of $2 billion.

According to terms of the deal, Simmons will acquire all of the outstanding common stock of First Texas in a transaction valued at approximately $462 million, based on the Arkansas’ bank price as of Friday (Jan. 20).  Simmons stock (NASDAQ: SFNC) closed Monday at $60.65, up 35 cents a share.

“We are thrilled to welcome the customers and associates of Southwest Bank to the Simmons family,” said Simmons Chairman and CEO George Makris Jr. “Late last year, Simmons announced its introduction into the Texas markets with our proposed acquisition of Bank SNB.  We now have the opportunity to substantially grow our presence in the Fort Worth metropolitan area by joining with one of the best run, most respected financial organizations in Texas.”

First Texas is the parent company of Southwest Bank, which has 16 branch locations in Fort Worth, Dallas, Arlington, Burleson, Grapevine, Mansfield and Saginaw and mortgage operations in Fort Worth, Dallas and Austin. Founded in 2006 by Texas banking executive Vernon Bryant, First Texas is the largest, locally-owned independent bank in Tarrant County. According to local press reports, Bryant has been involved in the Texas banking community more than 20 years before taking the reins as First Texas chairman and CEO just over a decade ago.

“We at First Texas are excited about the strategic partnership with Simmons. Simmons is a top-notch, fast-growing regional bank,” Bryan said. “With that comes additional products and services, as well as a larger balance sheet, that can only result in substantial benefits for our customers.  Since First Texas began, our focus has always been on the customer, and I know that as part of the Simmons team we will continue that legacy.”

Simmons’ announced an even larger deal on Dec. 14 when it entered into an agreement to acquire Stillwater, Okla.-based Southwest Bancorp Inc. in a cash-and-stock deal valued at more than $564 million. That deal, one the largest in the Pine Bluff banking group’s history, is expected to close in the third quarter.

Publicly traded 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.

That deal was preceded by an agreement in November to acquire Hardeman County Investment Company Inc., a Jackson, Tenn.-based financial firm that owns First South Bank. The transaction, valued at $72.2 million, is expected to close in the first quarter.

Altogether, the three recent deals would push Simmons assets to more than $13 billion, allowing the Arkansas regional bank to leapfrog Conway-based Home Bancshares as the state’s third largest financial concern and push it even closer to Bank of the Ozark and Arvest at the top. More importantly, the recent acquisitions would also 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.

Once the deal is completed, First Texas’s shareholders and other equity rights holders will receive, in the aggregate, 6.5 million shares of Simmons’ common stock and $70 million in cash, all subject to certain conditions and potential adjustments. Completion of the First Texas deal is expected during the third quarter of 2017 and is subject to certain closing conditions, including approval by the shareholders of First Texas and Simmons, as well as customary regulatory approvals. After closing, Southwest is expected to continue operations as a separate bank subsidiary of Simmons for an interim period until it is merged into Simmons Bank.

One interesting note is that the operating subsidiaries of First Texas and SNB acquisitions both have nearly identical names, Southwest Bank and Southwest Bancorp. Makris said the First Texas “Southwest Bank brand” is very well known and respected, and represents a legacy of quality banking service.

“Because of that legacy, we will retain the Southwest Bank brand,” he said.

Marke Funke, president and CEO of Southwest Bancorp in Oklahoma, 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. It is not known if Bryant will stay with Simmons once the deal is completed.

As of Monday, Simmons has operations in Arkansas, Kansas, Missouri and Tennessee.