Simmons First acquires nearly $300 million in assets of St. Louis-area bank

Simmons First National Corp. of Pine Bluff announced Friday it has expanded into the St. Louis market when its wholly-owned bank subsidiary, Simmons First National Bank, acquired approximately $282.3 million in assets of Truman Bank of Clayton from the Federal Deposit Insurance Corp.

Truman Bank was closed Friday by the Missouri Division of Finance, which appointed the FDIC as receiver.

Of the $282 million in assets acquired, Simmons First National Bank entered into a purchase and assumption agreement with the FDIC to purchase $219 million in assets and assume substantially all of the deposits and other liabilities, at a discount of $20.9 million and no deposit premium, a bank spokesman said.

The remaining $63 million in assets acquired were through a loan sale agreement with the FDIC, at a 12 percent discount. The final valuation and purchase price of acquired assets and liabilities will be determined upon completion of valuation processes.

“This acquisition is the third of several that we anticipate making over the next several years, which is the reason we raised $70.5 million in additional capital in November 2009,” said J. Thomas May, Simmons chairman and CEO. “In May 2010 we announced the purchase of Southwest Community Bank in Springfield, Mo., which was a good first step for expanding beyond the borders of Arkansas. In October of the same year we announced the acquisition of Security Savings Bank in Olathe, Kan., with four locations in the Kansas City Metropolitan area, three in Salina, Kan., and two in Wichita, Kan.

“Obviously, our expansion into the St. Louis market complements our existing presence in Springfield and Kansas City. Simmons First has built its franchise around a community banking philosophy and this acquisition is a natural extension of that strategy.”

Truman Bank in recent years encountered high levels of commercial and residential real estate loans that went into default.

The Board of Governors of the Federal Reserve System determined that as of Oct. 30 Truman Bank was undercapitalized, and that the bank had failed to submit an acceptable capital restoration plan.

In an April 20 order, the Federal Reserve ordered Truman Bank to increase its equity by selling shares, selling the bank or merging with another insured institution.

As part of the purchase agreement, the FDIC and the Pine Bluff bank entered into a loss share agreement covering approximately $118 million in loans and other real estate. The FDIC has agreed to reimburse Simmons First for 80 percent of the losses it may incur on the loans and sale of foreclosed real estate on all covered assets.

The four branches acquired are located in Clayton, St. Peters, Crestwood and Normandy. The four St. Louis area locations will open during normal banking hours today as financial centers of Simmons First National Bank, a Simmons spokesman said, and all former Truman Bank customers will be able to conduct banking business as usual and will automatically become depositors of Simmons First, with deposits insured by the FDIC.

“We welcome our new customers and associates in St. Louis to the Simmons First family,” said May. “Our 109 year old franchise has been built around a community banking philosophy. Our associates are committed to treating the customer the way we want to be treated when we are the customer. This is the same commitment that we will deliver to the customers of the former Truman Bank.”

Simmons First National Corp. is a $3.6 billion Arkansas based financial holding company with eight community banks in Pine Bluff, Lake Village, Jonesboro, Rogers, Searcy, Russellville, El Dorado and Hot Springs. The eight banks conduct financial operations from 92 offices, of which 88 are financial centers, in 51 communities, including its newly acquired Missouri locations.