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Simmons (SFNC) Announces Deals to Buy Landmark and Triumph
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Simmons First National Corporation (SFNC - Free Report) has agreed to acquire Collierville, TN-based Landmark Community Bank, and Memphis, TN-based Triumph Bancshares, Inc., using a mix of cash and stock. The proposed deals (on a combined basis) will likely lead to the creation of the 9th largest bank in Tennessee, based on deposit market share.
Completion of the transactions, expected in fourth-quarter 2021, is subject to shareholder and regulatory approvals, and other customary closing conditions.
Simmons’ chairman and CEO, George A. Makris, Jr., stated, “Landmark and Triumph are two successful, local community banks who share our philosophy of a strong credit culture, significant community involvement and a passion for delivering excellent customer service. The opportunity to combine forces with these two institutions also highly complements our existing footprint in Tennessee and enhances our scale in two of our key growth markets – Memphis and Nashville.”
Makris added, “In addition to cultural and geographic synergies, the financial metrics of these mergers are compelling and consistent with our M&A strategy of partnering with high-quality banks within our current footprint that represent an efficient use of our capital and delivers on our commitment of building long-term value for our shareholders.”
James “Jake” Farrell, the president and CEO of Landmark, said, “We are excited to become part of the Simmons organization, and we look forward to using Simmons’ resources to strengthen and expand our business while continuing to provide locally focused banking services to our customers.”
Triumph’s president and CEO, William J. Chase, Jr., commented, “For years, Triumph Bank has put its clients at the center of its focus, and partnering with Simmons provides our organization with the ability to continue to grow with our clients and meet their changing needs.”
Transaction Details and Financial Impact
Subject to certain conditions and potential adjustments, the Landmark deal is valued at $146.3 million, while the Triumph deal is valued at $131.6 million.
The total purchase price for the combined deals is estimated at 147% of the tangible book value of Landmark and Triumph as of Mar 31, 2021.
Notably, the cash used in the transactions will be paid to the option holders of both companies.
The combined transactions, excluding one-time transaction expenses, are projected to be 7.5% accretive to Simmons’ earnings per share in 2022. Then again, including the impact of one-time transaction expenses and CECL “day two” accounting, the transactions are expected to be slightly accretive to tangible book value per share.
Moreover, through operational and administrative efficiency improvements, Simmons expects to achieve cost savings of 40% of Landmark’s and Triumph’s combined operating non-interest expense base.
So far this year, shares of Simmons have gained 44.7% compared with 37.2% growth recorded by the industry.
In a bid to remain competitive amid the current scenario, consolidation within the banking sector has been on the rise. Banks are using this as a means to dodge heightened costs of regulatory compliance and increased investments in technology.
Recently, Old National Bancorp (ONB - Free Report) and First Midwest Bancorp, Inc. entered an all-stock merger of equals deal worth $6.5 billion, which is expected to close in late 2021 or early 2022, subject to the approval of regulatory bodies and shareholders.
Also, United Bankshares, Inc. (UBSI - Free Report) has entered an all-stock merger deal worth $303.3 million with the parent company of Essex Bank, Community Bankers Trust Corporation.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Simmons (SFNC) Announces Deals to Buy Landmark and Triumph
Simmons First National Corporation (SFNC - Free Report) has agreed to acquire Collierville, TN-based Landmark Community Bank, and Memphis, TN-based Triumph Bancshares, Inc., using a mix of cash and stock. The proposed deals (on a combined basis) will likely lead to the creation of the 9th largest bank in Tennessee, based on deposit market share.
Completion of the transactions, expected in fourth-quarter 2021, is subject to shareholder and regulatory approvals, and other customary closing conditions.
Simmons’ chairman and CEO, George A. Makris, Jr., stated, “Landmark and Triumph are two successful, local community banks who share our philosophy of a strong credit culture, significant community involvement and a passion for delivering excellent customer service. The opportunity to combine forces with these two institutions also highly complements our existing footprint in Tennessee and enhances our scale in two of our key growth markets – Memphis and Nashville.”
Makris added, “In addition to cultural and geographic synergies, the financial metrics of these mergers are compelling and consistent with our M&A strategy of partnering with high-quality banks within our current footprint that represent an efficient use of our capital and delivers on our commitment of building long-term value for our shareholders.”
James “Jake” Farrell, the president and CEO of Landmark, said, “We are excited to become part of the Simmons organization, and we look forward to using Simmons’ resources to strengthen and expand our business while continuing to provide locally focused banking services to our customers.”
Triumph’s president and CEO, William J. Chase, Jr., commented, “For years, Triumph Bank has put its clients at the center of its focus, and partnering with Simmons provides our organization with the ability to continue to grow with our clients and meet their changing needs.”
Transaction Details and Financial Impact
Subject to certain conditions and potential adjustments, the Landmark deal is valued at $146.3 million, while the Triumph deal is valued at $131.6 million.
The total purchase price for the combined deals is estimated at 147% of the tangible book value of Landmark and Triumph as of Mar 31, 2021.
Notably, the cash used in the transactions will be paid to the option holders of both companies.
The combined transactions, excluding one-time transaction expenses, are projected to be 7.5% accretive to Simmons’ earnings per share in 2022. Then again, including the impact of one-time transaction expenses and CECL “day two” accounting, the transactions are expected to be slightly accretive to tangible book value per share.
Moreover, through operational and administrative efficiency improvements, Simmons expects to achieve cost savings of 40% of Landmark’s and Triumph’s combined operating non-interest expense base.
So far this year, shares of Simmons have gained 44.7% compared with 37.2% growth recorded by the industry.
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our Take
In a bid to remain competitive amid the current scenario, consolidation within the banking sector has been on the rise. Banks are using this as a means to dodge heightened costs of regulatory compliance and increased investments in technology.
Recently, Old National Bancorp (ONB - Free Report) and First Midwest Bancorp, Inc. entered an all-stock merger of equals deal worth $6.5 billion, which is expected to close in late 2021 or early 2022, subject to the approval of regulatory bodies and shareholders.
Also, United Bankshares, Inc. (UBSI - Free Report) has entered an all-stock merger deal worth $303.3 million with the parent company of Essex Bank, Community Bankers Trust Corporation.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>