Simmons First National Corp. expects to more than double its assets to $20 billion within three years, the Pine Bluff bank's chief executive said during a conference call Tuesday.
Simmons said on Monday that it has agreed to buy First Texas BHC, the parent of Southwest Bank of Fort Worth.
That gives Simmons, which has $8.4 billion in assets, three announced acquisitions that are expected to close in late summer or fall -- First South Bank of Jackson, Tenn., Bank SNB of Stillwater, Okla., and Southwest Bank of Fort Worth. When the purchases close, they will push Simmons' assets to more than $13.5 billion, which would make Simmons the third-largest bank in the state behind Little Rock-based Bank of the Ozarks and Arvest Bank of Fayetteville.
Simmons will spend most of this year integrating those banks into its systems, said George Makris, Simmons' chairman and chief executive officer.
Simmons' "dance card is full right now," Makris said.
"It is probably unrealistic for us to announce any other acquisition until late 2017 at the earliest," he said. "But we certainly continue to expect to have productive discussions with other potential partners. That would include [in existing markets] and in new territories."
With the pending deals, Simmons has some "attractive markets" where it needs to fill in with other locations, Makris said.
Assuming the acquisition market stays like it is today and good opportunities are available, Simmons should be a $20 billion regional bank in three years, Makris said.
"I don't think we have any aspirations today to be a $50 billion bank in the next three to five years," Makris said in answer to a question. "It's much more important to us to find the right partner than it is to meet some artificially established asset size. We will just continue steady growth as we find merger partners over the next three years."
Growing to $20 billion in assets will require that Simmons' stock remain strong, said Garland Binns, a Little Rock banking attorney.
"Their stock price puts them in a position to continue to grow and expand," Binns said. "Assuming that their currency remains at this level or higher, I can see [Simmons] growing to $20 billion although it is a lot to consolidate into the existing entity."
Simmons' stock closed at $61.40 Tuesday, up 75 cents, in trading on the Nasdaq exchange.
Southwest Bank has branches in the North Texas area including Fort Worth, Arlington, Burleson, Dallas and Grapevine. Southwest Bank has about $2 billion in assets.
"That is a great acquisition for Simmons," Binns said. "That is really a growth area in the state of Texas."
The purchase complements the earlier acquisition of Bank SNB, a $2.5 billion bank with offices in Texas, Binns said.
The Southwest Bank purchase will add $1.5 billion in deposits to Simmons' Texas deposit base of about $200 million from the Bank SNB purchase, Matt Olney, a banking analyst in Little Rock with Stephens Inc., said in a research brief Tuesday. The new purchase also adds 16 branches to Simmons' base of five Bank SNB branches.
"Due to its attractive North Texas markets, impressive loan growth outlook and deep community roots, we suspect that [Southwest Bank] was likely a highly pursued [acquisition] target by multiple potential acquirers," said Olney, who owns no stock in Simmons.
The purchase of Southwest Bank will increase the trajectory of Simmons' growth, Makris said.
The Fort Worth bank has been successful in commercial real estate lending, Makris said.
"Their [commercial real estate] concentration is fairly significant," Makris said. "They are very, very good at what they do. In fact, we have been participating in some [commercial real estate] loans with Southwest Bank for the last several months. We've become very familiar with their underwriting standards."
Makris reiterated his frustration with the delay in the purchase of First South Bank in Tennessee. Simmons announced the agreement to purchase the Jackson bank late last year. Simmons had first expected to close the deal early this year but now anticipates the earliest closing would be in the third quarter.
The delay is attributed to a protest comment filed on the final day for public comments with federal regulators. The comment caused Simmons' application to be removed from the Federal Reserve Bank in St. Louis, and it now will be processed in Washington, D.C.
Business on 01/25/2017