Reliance Backers Poised For Turnaround Reward from Simmons Deal

Simmons First National Corp. cracked the Top 10 of Missouri's largest bank franchises with its acquisition of Reliance Bancshares Inc. of Des Peres.

The $170 million acquisition of Reliance Bancshares Inc. will produce a well-rounded footprint in the St. Louis metro with the addition of 22 full-service locations for Simmons First National Corp. of Pine Bluff.

“I don’t think we could’ve walked up to a map and put pins in better places than they are,” said George Makris, Simmons chairman and CEO.

Four of the Reliance branches are in Illinois, a new state for Simmons. The $1.5 billion-asset Reliance Bank is headquartered in the western St. Louis suburb of Des Peres (pronounced locally as Duh-PAYR).

Simmons entered the St. Louis market in September 2012 through the FDIC-assisted purchase of Truman Bank in nearby Clayton.

The combination of the three former Truman offices with Reliance will result in the 10th largest banking franchise in Missouri based on in-state deposits of more than $2 billion.

Reliance nearly went the way of Truman. A big serving of the credit for saving the bank is given to Tom Brouster, a veteran turnaround artist who joined Reliance in 2012.

After the bank recorded a loss of $82 million during 2009-11, Brouster took the company private and orchestrated a recapitalization effort to restore its balance sheet. He stands to be well rewarded in the 4 million-share stock swap deal with Simmons, which includes $62.7 million in cash.

Brouster owns nearly 21 percent of Reliance Bancshares individually or through trusts and family trusts. The holdings equate to 837,600 shares of Simmons stock worth more than $22.6 million, based on a value of $27 per share.

Brouster, chairman of Reliance, controls more than 62 percent of the bank in total. He holds voting proxies on additional shares, stock options, warrants and convertible notes representing more than 42.4 percent.

Another substantial block of shares is owned by the family of Gary Parker, the Central Oil founder who helped launch Reliance in April 1999. Largely through an array of nine trusts, the Parker family owns more than 18.7 percent of Reliance that represent 748,800 shares of Simmons stock worth more than $20.2 million.

Reliance Bank, Des Peres, Missouri
Total Assets: $1.5 billion    Net Income: $12.1 million
Equity Capital: $155.2 million    Staff: 175
Footprint: 22 full-service locations in the St. Louis Metro area with 18 in Missouri and four in Illinois
(As of Sept. 30)

Dollars in thousands except where noted.
Source: Federal Deposit Insurance Corp.