Simmons First to Buy Delta Trust for $66M

by Mark Friedman and Lance Turner  on Monday, Mar. 24, 2014 3:45 pm  

J. French Hill

Simmons First National Corp. of Pine Bluff is buying privately held Delta Trust & Banking Corp. of Little Rock, the pair announced Monday. 

Per the deal, publicly traded Simmons First will acquire all the outstanding common stock of Delta Trust in a transaction valued at about $66 million. The valuation is based on Simmons First's Friday closing price (Nasdaq: SFNC) and "subject to potential adjustments." The price is 1.6 times Delta's total equity capital of $40.6 million as of Dec. 31.

Delta Trust reported net income of $4.3 million in 2013, almost identical to its net income of $4.37 million in 2012.

"[Delta CEO] French Hill and his team have developed a successful and well-respected financial services franchise," George A. Makris, Simmons First's chairman and CEO, said in a news release. "In addition to the growth opportunities afforded Simmons Bank, we look forward to expanding our Simmons Trust services, and offering investment management and insurance products throughout the markets we serve.

"We believe the acquisition will enhance our ability to offer a full range of financial services to our customers including wealth management, consumer and commercial financing needs, and asset protection," Makris said.

Executives expect the deal to close in the third quarter.

"We are excited that our expertise in the strategic areas of investment brokerage, trust administration and insurance sales along with our experienced commercial bankers in all three Arkansas markets are going to be able to join the dynamic, growing Simmons franchise," Hill said in the news release. "Our employees will have expanded career opportunities as Simmons expands its reach in Arkansas and its new locations in Missouri and Kansas."

In a conference call decribing the deal, Makris said he expects some bank branches to close as a result of the merger. "We're not at a point to say which ones," he said.

Still, Makris called the purchase "a great fit."

In Delta Trust, Simmons First is getting an $431.4 million-asset lender that has nine offices in Arkansas: three in Little Rock, two in northwest Arkansas and four in south Arkansas. Delta Trust just last week announced a new office under construction in Conway.

The deal is the second for an Arkansas bank by publicly traded Simmons in less than a year. In November, the publicly traded bank holding company bought Metropolitan National Bank of Little Rock for $53.6 million out of the bankruptcy estate of Rogers Bancshares Inc.

In the conference call, Makris reiterated previous statements that Simmons is on the lookout for acquisitions.



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