Johnny Allison Plays Market for Gains After Brexit 'Bank Sale'

Johnny Allison Plays Market for Gains After Brexit 'Bank Sale'
Johnny Allison (Mauren Kennedy)

Johnny Allison, the Home BancShares Inc. chairman for whom the word “colorful” was invented, loves the banking game. And it is a game to him, he said in an interview last week, albeit a serious one.

If he weren’t occupied with maintaining fiscal discipline at HBI — his primary role now that he’s not CEO — he’d still want to keep his hand in the banking business.

“If I retired tomorrow, I would consider a bank fund. I would consider having a fund that invested in banks,” he said in an interview for an upcoming feature in Arkansas Business.

And he thinks he could do well with it since he knows a lot about bank stocks all over the country.

The U.K.’s June 23 vote to leave the European Union, which sent a brief shockwave through the U.S. stock market, presented him with an opportunity to do some bank investing.

“I couldn’t buy my own bank stock” — Home BancShares was in a quiet period before its earnings release last Thursday — “so I just bought Simmons,” Allison said. “I mean, they beat up Simmons too. But there’s no reason to beat up Simmons; there’s no reason to beat up [Bank of the] Ozarks; there’s no reason to beat us up.”

And he predicted that the market would figure that out too.

Allison bought “only” a half-million dollars’ worth of Simmons First National Corp. stock when it was “on sale” — it bottomed out at $42.54 on the Monday after the surprise results of the “Brexit” vote became clear on June 24. By July 12, it had bounced above its pre-Brexit level, briefly topping $49.

Allison hadn’t taken his profits. “I’m not a trader,” he said. He just added the new shares to the holding he already had from Simmons’ acquisition of Delta Bank & Trust, where Allison was a minority stockholder. “It’s a good bank,” he said.

“My point is, how many times do they put Bank of the Ozarks, Home BancShares and Simmons on sale? We were on sale!”