Makris

A similar history, a foundation in agriculture lending and growth potential attracted Arkansas-based Simmons First National Corp. to buy Community First Bancshares Inc. of Union City and its $1.9 billion subsidiary First State Bank, says Simmons’ Chairman and CEO George A. Makris.

The $243.4 million deal was the third and largest of four announced by Simmons between September and May, only one of which has been completed.

The currency will be Simmons’ shares, which trade on the NASDAQ under the symbol SFNC, and the stock swap is expected to close in the fourth quarter.

“I told their folks that if you put a mirror in front of Simmons you would see First State, and I really think that,” Makris says.

Both financial institutions started more than 100 years ago in rural areas – Community First in Union City in northwest Tennessee, and Simmons in Pine Bluff in southeast Arkansas – with both focusing on agriculture lending.

“We both also have expanded into more metropolitan growth markets doing extremely well,” he said. “We just think it’s a great marriage, and we’re going to continue to help them grow.”

First State “is a true community bank,” and offers variety of services, Makris says.

With a strong presence in northwestern Tennessee for more than 100 years, First State has locations across Tennessee, including in the Memphis, Nashville and Knoxville metropolitan areas, and Makris sees growth potential in Middle and East Tennessee.

Makris notes First State has a few lines of business that Simmons plans to incorporate into its banks in Arkansas and Missouri, and, in return, some business lines now being offered by Simmons will likely be offered to Tennessee customers.

“They do a great job of consumer finance and they are great SBA lenders,” he says, a reference to the U.S. Small Business Administration programs that guarantee certain types of commercial loans.

“If you are starting a business these days, that’s a good thing because traditional banking as you know it from 30 years ago, where you walked in and your good buddy let you borrow to start a business, just doesn’t happen very much anymore without some kind of SBA guarantee.”

Simmons is looking at expanding its credit-card portfolio and its trust business into Tennessee, Makris explains.

“We have nationwide a $188 million credit card portfolio – excellent, great rewards … so we’re going to take our credit cards over there … They’ve got a retail customer base we think we can benefit from.”

He also said Simmons First Trust Co. is the largest trust company in Arkansas and plans to offer wealth management programs in Tennessee. “We do that awfully well, and First State just dabbles in that a bit.

“That’s a brand new line of business for them.”

Eventually, the merger will offer First State customers “a complete line of financial services, so from your banking career through your estate planning and even through wealth preservation, we can be your bank.”

A year ago, at the mid-point of 2013, Simmons First National Corp. had $3.5 billion in assets spread, in an expensive anachronism, across eight separate charters around Arkansas.

The flagship charter, Simmons First National Bank of Pine Bluff, had won its bids to acquire four failing banks in FDIC-assisted deals in 2010 and 2012, and those moved the bank outside its home state and into Missouri and Kansas.

By the end of this year, Simmons expects its asset base to be in the $8 billion range, and it will have two subsidiary charters: Simmons First National, into which the other seven Arkansas charters are being merged, and First State Bank of Union City.

“I think Simmons is changing,” says Randy Dennis, president of DD&F Consulting Group, a Little Rock bank consulting firm.

The big changes that doubled Simmons’ size began last fall, when Makris had the title of CEO-elect in anticipation of the year-end retirement of J. Thomas May.

His selection to succeed May came as a surprise: Makris had been a member of the Simmons board of directors for 15 years, but he had never been a banker before. His career had been running his family’s Anheuser-Busch distributorship in Pine Bluff.

He stepped to the front of a bankruptcy auction in September and outbid Arvest Bank of Fayetteville (Arkansas’ largest bank, owned by the Walton family of Wal-Mart fame) and a private equity group called Ford Financial Fund III of Dallas for the right to acquire Metropolitan National Bank of Little Rock.

That deal, which added nearly $1 billion in assets, closed in November and came with the naming rights for the tallest building in Arkansas, putting the Pine Bluff bank’s name on the Little Rock skyline for the first time.