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.

"That seems to have resonated with the investment community more than at any other time," May said. "One investor remarked, 'You know, yesterday I doubt if I even knew where Arkansas was, but it's refreshing to hear a story like yours.' "

Accompanying May on the road show were David Bartlett, president and chief operating officer; Robert Fehlman, executive vice president and chief financial officer; and Marty Casteel, executive vice president; and a rotating cast of Stephens Inc. executives.

Little Rock's Stephens serves as lead book-runner and Stifel Nicolaus & Co. of St. Louis serves as joint book-runner for the Simmons stock offering. Raymond James & Associates Inc. of St. Petersburg, Fla., serves as co-manager.

May is pleased with the outcome of the stock offering after toying with the idea of participating in a $60 million Capital Purchase Plan offered by the U.S. Treasury as part of the bank bailout of 2008-09. The fourth largest banking franchise in Arkansas, Simmons First made up of eight community banks in Pine Bluff, Rogers, El Dorado, Jonesboro, Lake Village, Russellville, Searcy and Hot Springs.

May quotes Louis Ramsay Jr., a mentor and predecessor at Simmons First: "We don't do extraordinary things. We do ordinary things extraordinarily well."

The company's credit card operations have a national reputation for low interest rates, accompanied by picky underwriting standards.

"And proud of it," May said.

The flagship bank, corporate headquarters and branches in Pine Bluff are home to about 450 of the 1,118 Simmons First jobs. The recent stock offering gave rise to a new bout of worry that the company might move from downtown Pine Bluff.

May said any new acquisitions could only add to the local corporate staff and pose no threat to relocation.

"Any concerns that this expansion will hurt the local community are misguided," he said.

Simmons First Bank of Northwest Arkansas in Rogers weathered the trials of its real estate market fairly well compared to other lenders in that part of the state.

"The challenges of northwest Arkansas obviously are all about an overbuilt market," May said. "Amazingly enough, the overall economy is still relatively good. Housing is overbuilt, but it's going to get better. It's all about absorption."

How much longer will it take to find equilibrium?

"We're going to be living with this for the next two to three years," May said. "Our company has been blessed in that we have transitioned with this recession very well."

 

 

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