Simmons First Eyes Opportunity Backed with $70 Million Offering

by George Waldon  on Monday, Jan. 18, 2010 12:00 am  

Tommy May describes Simmons as a patient buyer.

Simmons First National Corp. of Pine Bluff is poised for aggressive action on the acquisition trail heading into 2010.

The bank holding company known for its conservative ways amassed a $70 million war chest last month through a well-received stock offering that boosted its capital to super-surplus status.

"Obviously, we're talking about offensive capital," said Chairman and CEO Tommy May. (See sidebar on May.)

Flush with cash, the management team at the $3 billion-asset concern is shopping for acquisitions that could boost total assets by as much as $1.5 billion during the next few years.

Simmons First has entered the fifth year of a 10-year plan to transform itself from a small super community bank to a mid-sized super community bank through opportunities in Arkansas and surrounding states.

Depending on what deals reach fruition, Simmons First could buy as many as five community banks in the $200 million-$300 million-asset range. The deals could come in the form of conventional transactions.

May said the greater opportunities during the next 18 months lie with FDIC-assisted transactions, and the company is looking to buy failed banks in good markets.

"We believe that in this particular market there will be opportunities to continue with merger and acquisitions," he said. "We have a history of being very patient. Even though we've raised all of this money, we are willing to be very patient."

Simmons First is frequently mentioned as a potential buyer of Little Rock's Metropolitan National Bank, which has endured a combined $53 million loss during the past seven quarters.

The closest that May will come to the possibilities of a Metropolitan Bank transaction in the coming weeks is: "Central Arkansas creates a significant opportunity for us."

Metropolitan's 10.4 percent market share in Pulaski County deposits, third largest, stands in marked contrast to Simmons First's 1.23 percent stake at No. 17.

On The Road
May led a four-man executive team on an early November whirlwind road show in advance of the stock offering. The group made 40 presentations to 50 investment groups in 10 states in six days.

He said the groups embraced the company's conservative culture and were happy to hear the bank's profitable story amid the financial chaos nationally. A steady performer, Simmons First's annual return on average equity has only fluctuated between 9.23-11.57 percent since 2001.

 

 

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