Posted 5/14/2010 06:20 pm
Updated 2 years ago
Simmons First National Bank, a subsidiary of Simmons First National Corp. of Pine Bluff, has acquired about $96.6 million in assets of Southwest Community Bank of Springfield, Mo.
The Missouri Division of Finance closed Southwest Community on Friday afternoon and the Federal Deposit Insurance Corp. was named the receiver.
Southwest Community Bank had a single branch. Simmons First National will pay the FDIC a 0.5 percent premium to assume all the deposits and the Arkansas bank has "agreed to purchase essentially all of the assets" of the failed bank, the FDIC's news release states. The Missouri bank had about $102.5 million in deposits as of March 31. Simmons said assets were purchased at a discount of 9.5 percent.
The FDIC and Simmons entered into a loss-share transaction on $66.8 million of the failed bank's assets. Simmons will share in the losses on the asset pools covered under the loss-share agreement.
"The FDIC will reimburse Simmons First for 80 percent of the losses it incurs on the disposition of loans and foreclosed real estate," according to a news release issued by Simmons.
"The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers," the FDIC said.
The agreement is similar to an agreement made between the FDIC and Arvest Bank of Fayetteville, which acquired SolutionsBank of Overland Park, Kan., in late December.
Simmons, publicly traded on the Nasdaq under the ticker symbol SFNC, announced in March it would close nine branches throughout Arkansas.
The holding company operates eight separate charters in Arkansas, and heretofore has had no out-of-state offices.
Simmons reported first quarter net income of $5 million, down about 5.4 percent from the same period a year prior. The holding company had $3.15 billion in assets as of March 31, and total deposits of $2.5 billion.
In a prepared statement, Simmons' chairman and CEO J. Thomas May said: "This acquisition is the first of several that we anticipate making over the next two to three years, which is the reason we raised $70.5 million in additional capital in November, 2009. It represents a good first step in expanding beyond the borders of Arkansas. In addition to our statewide footprint, the Springfield market compliments the footprint expansion Simmons First consummated along highway 65 into North Central Arkansas in 2004, and our presence in Northwest and Northeast Arkansas. We believe the Missouri market, in general, and the Springfield market, in particular, present good opportunities for our franchise."
Southwest Community Bank will reopen on Monday as Simmons First National.
CORRECTED: An earlier version of this story stated Southwest Community had $96.6 million in deposits and $102.5 million in assets. The above version has been corrected.