Simmons First National Corp. of Pine Bluff is continuing its shopping spree by announcing a $243.4 million deal to buy Community First Bancshares Inc. of Union City, Tennessee, and its $1.9 billion subsidiary bank, First State Bank.
The stock-swap transaction, which is expected to close in the fourth quarter, will be Simmons' first foray into the Volunteer State. First State, with 32 offices, is the fifth-largest bank headquartered in Tennessee by assets but the 10th largest by deposits in a market dominated by First Tennessee Bank of Memphis and out-of-state powerhouses like Regions, SunTrust and Bank of America.
The transaction is expected to be immediately accretive to Simmons' earnings, the bank said in announcing the deal. First State recorded net income of $18.5 million in 2013 and $17.7 million in 2012.
“We are excited to welcome the associates and customers of First State Bank and its subsidiaries to the Simmons Family. As Simmons continues to expand its community banking strategy, it is important that we seek partners that have common goals, experience, and reputations as excellent corporate citizens. First State certainly fits that criteria,” Chairman and CEO George A. Makris Jr. said in the official announcement.
Union City, the home office of First State Bank and Community First, is a town of about 11,000 residents two hours northeast of Memphis, on the Kentucky border north of Jackson. But First State's branches stretch nearly 400 miles from Memphis to Knoxville, including 10 in Nashville and its suburbs. In a conference call on Tuesday afternoon, Makris told stock analysts that First State's loan growth had been driven by the Nashville and Knoxville metropolitan statistical areas, although growth has also come in its traditional markets on the east side of the state.
The newly acquired branches will continue to operate under the First State Bank name for some time. Makris said in the conference call that he was "not real optimistic" that changing the name to Simmons First would be well accepted in the Tennessee market, although there would be cost savings if they could eventually be incorporated under the same brand as the rest of the company's operations.
Simmons completed the acquisition of Metropolitan National Bank of Little Rock in November. Its announced acquisition of nine-branch, $431 million-asset Delta Trust & Bank, which has its corporate offices in Little Rock, is expected to close in the third quarter. Between now and August, Simmons will collapse six small state-chartered banks in Arkansas into its flagship national bank charter; together, the holding company has $4.4 billion in assets, 88 branches in Arkansas and nine branches each in Missouri and Kansas.
Simmons was advised in the Tennessee deal by Sterne Agee & Leach Inc. and the law firm of Quattlebaum Grooms Tull & Burrow of Little Rock. Community First Bancshares was advised by Keefe Bruyette & Woods Inc. and the law firm of Baker Donelson Bearman Caldwell & Berkowitz.
