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Simmons First boosts asset size more than 500% in 6 years

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Simmons First boosts asset size more than 500% in 6 years

Simmons First National Corp. recently announced the bank's 11th acquisition of a bank over the last six years, and management said more could come in the years ahead.

Including the acquisition of a couple asset managers, Simmons First has purchased 13 companies since 2013, a torrid pace that will more than sextuple the bank's total assets by the time it closes its most recent acquisition.

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The bank's latest deal will be its largest by asset size and expands its reach into Texas, a state in which the bank had zero presence prior to its buying spree. Simmons First's pending acquisition of Columbia, Mo.-based Landrum Co. will add $3.29 billion of assets to Simmons First's balance sheet and make it the No. 36 bank in Texas and No. 8 in Missouri by deposit share.

The bank's total assets will exceed $21 billion after the Landrum deal closes. Six years earlier, in the 2013 second quarter, the bank had nothing in Texas and $3.42 billion of assets overall. Over the course of its buying spree, the bank has beaten the banking industry writ large in the stock market with a total return of 119% through Sept. 11, compared to 91% total return for the SNL U.S. Bank and Thrift index.

During the Simmons' July 31 deal call for the Landrum purchase, Chairman and CEO George Makris said the bank plans to remain acquisitive.

"We believe there's still really good opportunities to grow our franchise through M&A, and we'll continue down that path," he said, according to a transcript. In addition to the acquisitions, he said the bank has grown its assets organically by $3.5 billion and plans to continue growing organically as well as through acquisitions. Makris highlighted banks focused on agricultural lending as a potential niche target.

"At the same time we're growing organically, we're growing through M&A. We think we can manage all of that concurrently," Makris said.

Simmons First has been able to maintain a profit margin and efficiency ratio that are in-line with its peers. As of the second quarter, the bank had a return on average assets of 1.30% over the previous 12 months, compared to a median return of 1.31% for banks with $10 billion to $50 billion of total assets. Simmons First's efficiency ratio was similarly in-line at 56.5%, compared to a median of 56.4% for its regional bank peers.

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