Simmons First expands into St. Louis metro with Reliance acquisition
Simmons First National Corp. announced Tuesday (Nov. 13) a deal to acquire Reliance Bancshares in a cash and stock deal valued at around $214 million. Reliance has assets of $1.5 billion and operates 22 branches in the St. Louis metro. By comparison, Simmons reports $16.3 billion in assets.
The deal continues a trend of growth through acquisition for the Pine Bluff-based bank. More than a year ago, Simmons completed two of the biggest acquisitions in the company’s history, paying just over $1 billion. In September 2017, Simmons completed its previously announced acquisitions of Stillwater, Okla.-based Southwest Bancorp Inc. and parent company Bank SNB, and First Texas BHC Inc., or Southwest Bank of Fort Worth. The out-of-state acquisitions helped to double Simmons’ first quarter earnings to $51.3 million, up from $22.1 million in the previous year.
“After taking some time to fully integrate our 2017 acquisitions, we are now pleased to announce the next chapter of Simmons’ M&A story,” George Makris, Jr., Simmons’ chairman and CEO, said in a statement. “Reliance is an impressive banking franchise led by an extremely accomplished and respected financial services executive, Tom Brouster. By adding Reliance Bank’s 20-plus branches to the Simmons Bank footprint, we will substantially enhance our retail presence within the St. Louis market, where we’ve already seen success in our commercial lending efforts. Our desire is to be a strong, supportive, full-service financial institution for the people, businesses, and organizations of St. Louis; and I am confident that we have teamed with another great banking partner to achieve that goal. We look forward to officially welcoming Reliance Bank’s customers and associates to the Simmons family.”
The deal calls for 4 million shares of Simmons Financial to go to holders of Reliance’s common stock, a $62.7 million cash payment, and $42 million swap of Reliance’s preferred stock for certain Simmons’ preferred stock. Simmons officials said the deal should close in the second quarter of 2019. Reliance will be merged into Simmons, and will not operate as a separate unit.
Simmons’ shares (NASDAQ: SFNC) closed Tuesday at $27.27, up five cents. During the past 52 weeks the share price has ranged between $33.45 and $24.58.
Acquisitions in recent years has boosted the bank’s financial performance. For the period ended Sept. 30, Simmons reported net income of $55.2 million, or 59 cents per share, up 91.3% compared to $28.9 million or 44 cents per share in the same period of 2017. The quarterly results, posted Oct. 22, included after-tax merger-related expenses and “branch right-sizing costs” of $1.3 million related to key acquisitions in 2017.
Net income for the first nine months of the year was $160.1 million, well ahead of the $74 million in the same period of 2017.
Simmons operates in Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee, and Texas.