Simmons Bank CEO talks Delta Trust buyout, merger activity

story by Roby Brock, a TCW content partner and owner of Talk Business
roby@talkbusiness.net

Simmons First National Corp. CEO George Makris said recent moves have put his bank in a stronger position to serve customers and he sees significant growth for the Pine Bluff-based financial institution in the near future.

Last week, Simmons announced it would acquire Little Rock-based Delta Trust and Bank, a move that added nine locations to Simmons’ bank footprint in southeast, central and northwest Arkansas. More importantly, the $66 million deal will bring new trust, investment, mortgage and insurance products to Simmons customers.

Coming off the retail expansion of last fall’s $53.6 million acquisition of Little Rock-based Metropolitan National Bank, Makris said Delta Trust is a huge complementary move.

“What Delta brings to the table are the other lines of business that maybe Metropolitan didn’t specialize in like trust, investments and insurance,” Makris said in a Talk Business & Politics interview this week.

When the Delta Trust buyout closes later this year, Simmons First will have roughly $3.5 billion in trust management under its roof. Makris said Delta Trust’s small bank location footprint may only result in the closure of one Little Rock branch.

MERGERS & ACQUISITIONS ACTIVITY
For Makris, who officially took over as Simmons CEO in January after the long tenure of Tommy May, he’s quickly putting his stamp on the banking outfit. He said market share has been a major part of Simmons First’s acquisition strategy in state.

“In central Arkansas, our share was obviously not where we wanted it to be. So as we take a look at acquisitions, it is to build our franchise in those growth markets.”

That includes out-of-state markets, such as Missouri and Kansas where Simmons previously conducted FDIC-assisted transactions. Makris said the bank is now positioned for organic growth or acquisition growth in the future with a host of new products.

“We really would like to fill in our footprint in Missouri and Kansas. We have a strategy now for de novo growth. We’ve got some really good bankers in those markets,” he said. “We need a little more scale in those markets to be able to do some of the things that we really want to do.”

Makris said due to Simmons’ legacy in southeast Arkansas, there is appeal to look at smaller banks in agricultural communities, perhaps more on a one-on-one basis.

“There are a lot of private banks that are just tired of what’s going on in the industry today,” Makris said. “In many cases, we see private banks that have aging management and not a real good succession plan.”

Those banks typically have boards of directors who must contribute money into a local bank’s capital in order to help in maintain sufficient margins. Of course, they’d prefer to be receiving dividend checks, Makris said.

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He also said recent regulatory burdens stemming from the Dodd-Frank reform bill is also impacting community banks and forcing many of them to reconsider their long-term futures.

“Management that may not have a great succession plan, boards who have changed their focus for their wealth, and regulatory fatigue are the three main drivers of a lot of the M&A activity we see today.”

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