Simmons First National Corp. has reached an agreement to acquire The Landrum Co., a Columbia, Mo., bank holding company that has $3.3 billion in assets.
The deal will be the largest acquisition for the Pine Bluff financial institution.
Landrum is the parent company of Landmark Bank, which has 39 branches in Missouri, Oklahoma and Texas.
Simmons has $17.9 billion in assets and has 216 branches in those states as well as branches in Arkansas, Kansas, Illinois, Tennessee and Colorado.
The acquisition will give Simmons, one of the state's three publicly traded banks, a total of $21.2 billion in assets, trailing only Bank OZK, which reported last month that it has $22.9 billion in assets. The state's third-largest publicly traded bank, Home BancShares, the holding company for Centennial Bank, reported $15.3 billion in total assets.
According to the terms of the agreement announced Wednesday, Simmons will acquire all of the outstanding capital stock of Landrum in an all-stock transaction, which Simmons valued at $433.9 million.
George Makris Jr., chairman and chief executive officer for Simmons, said in a conference call that the acquisition makes sense strategically for his institution, which shares some of the same geographic markets with Landmark.
"The Landmark footprint is very similar to Simmons -- a good mix of growth markets and more mature markets," he said.
Those include Columbia, recently named one of the 10 best places to live in the United States, and the Sherman/Dennison, Texas, market, which Makris said has a "great balance of fast-paced growth and affordable living."
He also said the acquisition of Landmark branches in south-central Missouri will connect Simmons' branches in southwest Missouri and north Arkansas and "provide a stable, well-integrated customer base."
Makris said the acquisition also makes financial sense.
"The Landmark franchise has a strong base of core deposits and a loan-deposit ratio that will give us room to grow," he said.
Kevin Gibbens, the president and chief executive officer for Landrum, said in a news release that his bank was "extremely excited" about becoming part of Simmons, which he called an "impressive regional bank" with a track record for successful mergers.
Joining the larger bank also will allow Landmark to tap additional products and services for customers in addition to greater lending capabilities, he said.
"I am convinced this strategic transaction represents the best path forward for our customers, associates and shareholders alike," Gibbens said.
Garland Binns Jr., a banking attorney with the Little Rock firm of Dover Dixon Horne, said Wednesday that he didn't see any downside to the deal.
"It looks like a very favorable transaction to both Simmons and to Landrum Company," he said. "Landrum is $3.3 billion in total assets and now they'll become part of a much larger organization and be stronger with more resources available.
"With Simmons being here in Arkansas, those locations -- that's in their footprint and should be accretive to their earnings very shortly."
The way the transaction is structured also helps both parties, Binns said.
"It is an all-stock acquisition, meaning they didn't have to pay any cash," he said. "That's very favorable to Simmons and it's very favorable to the shareholders of Landrum Company in that they'll get a cash-free exchange and won't suffer any adverse tax consequences in connection with the transaction."
The acquisition is the second Simmons announced this year and the 11th since 2013.
In April, the bank announced that it was acquiring another Missouri banking institution, Reliance Bankshares Inc., with total assets of $1.5 billion.
Before that, Simmons last acquired three banks in 2017. They included Southwest Bancorp. Inc. of Oklahoma, with $2.4 billion in assets, and First Texas BHC Inc. of Texas, with $2 billion in assets.
Completion of the latest transaction is expected to be completed in the fourth quarter. It is subject to approval of Landrum shareholders, regulatory approves and other closing conditions, according to the news release. After closing, Landmark is expected to continue operations as a separate Simmons subsidiary for an interim period until it is merged into Simmons.
Simmons' stock fell 4 cents Wednesday to close at $25.75 in trading on the Nasdaq exchange.
A Section on 08/01/2019