Updated: Winner, Loser in Simmons Charters Consolidation

by Arkansas Business Staff  on Monday, Mar. 10, 2014 12:00 am  

Assessments, either to state or federal regulators, are based on the bank’s total assets, which means Simmons First National Bank will be paying a higher assessment to its federal regulators but presumably less than the six separate charters were paying the state.

"As a regulator, I really hate it," State Bank Commissioner Candace Franks told Whispers last week, praising mightily the quality of the Simmons banks and their management. But she also allowed that if she were the banker making the decision, she might do the same.

While the State Bank Department’s coffers will suffer from this particular bank rollup, Franks said she didn’t expect to have to reduce the size of her staff. That’s because other Arkansas state-chartered banks — she specifically mentioned Centennial, Arvest and Bank of the Ozarks — have been acquiring assets at a clip, increasing the asset base against which the department makes its assessment.

Expensive Luxury

A multibank holding company was once a status symbol, evidence that a banking concern had grown too large to be contained by provincial branching laws. But relaxed laws and tougher regulation have made multiple charters an expensive anachronism, something BOZ gave up in 1999, Arvest in 2002 and Centennial parent Home BancShares in 2009.

The number of multibank holding companies in Arkansas peaked at 33 back in 1993, and by 1997 First Commercial Corp. of Little Rock owned 28 separate bank charters in Arkansas and surrounding states.

Now there are only nine multibank companies in the state, and only Simmons and First Bank Corp of Fort Smith have more than two charters. (First Bank Corp has three — First National Bank of Fort Smith, Citizens Bank & Trust of Van Buren and National Bank of Sallisaw, Okla. — and, like Simmons’, they are a mix of state and national charters.)

Until last fall, in preparation for its acquisition of Metropolitan National Bank of Little Rock, Simmons was operating eight separate charters. Simmons First Bank of Northwest Arkansas, whose footprint had significant overlap with Metropolitan’s, was rolled into Simmons First National Bank on Nov. 2, and Metropolitan followed on Nov. 26.

The official conversion date of Metropolitan's systems to Simmons First National's is March 21.

Speaking of Metropolitan …

Whispers notes that Simmons’ CEO George Makris deployed one of the most familiar assets acquired along with Metropolitan in the announcement explaining the charter consolidation:

"Our local management and Community Boards of Directors are committed to maintaining our nearby and neighborly service and this change will allow them more opportunity to meet the needs of our customers and the communities we serve."

We always liked that slogan and wonder if we might be hearing it again soon.



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