The transaction would help expand Simmons into Austin, Houston, San Antonio, Corpus Christi and Bryan-College Station markets
Simmons First National to buy Spirit of Texas. (Credit: Aymanejed from Pixabay.)
Simmons First National has agreed to acquire Spirit of Texas Bancshares, together with its subsidiary Spirit of Texas Bank SSB, in a transaction valued at around $581m.
The consideration, comprising a mixture of cash and shares from Simmons’ common stock, is based on the closing price of Simmons’ common stock of $31.73, on 17 November 2021.
Simmons is expected to issue around 18,325,000 shares of its common stock, subject to certain conditions and adjustments.
Spirit is a Texas-based bank holding company with operations across 37 locations predominantly in the Texas Triangle, a region which includes Dallas-Fort Worth, Houston, San Antonio and Austin metropolitan areas.
It also has additional locations in the Bryan-College Station, Corpus Christi and Tyler metropolitan areas.
The bank holding company had a total of $3.2bn in assets, $2.3bn worth loans and total deposits valuing $2.7bn, as of 30 September 2021.
The proposed transaction was approved by the boards of directors of Spirit and Simmons.
Closing of the merger is expected during the second quarter of 2022, subject to approval by Spirit’s shareholders, regulatory approval and other customary closing conditions.
Simmons chairman and CEO George Makris Jr. said: “Spirit is a highly regarded, high performing bank with whom we share a common philosophy – providing outstanding customer service and developing deep and long-lasting relationships with the clients and communities that we serve and where we live.
“Strengthening our Texas franchise has been a strategic priority and to partner with Spirit not only enhances our current footprint, but also establishes a platform for growth in Houston, Austin, San Antonio and College Station.
“These markets have been among the fastest growing in the nation in terms of population and economic activity and projections call for this trend to continue. We believe this merger places us in an advantageous position to capture future growth in the Lone Star State.”
With the transaction, Simmons is expected to expand its presence into Austin, Houston, San Antonio, Corpus Christi and Bryan-College Station markets.
Simmons said that the transaction will be accretive to its earnings per share in 2023, by around $0.22 per share or 9.8%.
Keefe, Bruyette & Woods, A Stifel Company served as financial advisor, and Covington & Burling as legal advisor to Simmons on the transaction.
Stephens served as financial advisor, and Hunton Andrews Kurth as legal advisor to Spirit.
Last month, Simmons has completed the acquisition of Tennessee-based Landmark Community Bank and conversion of Triumph Bancshares.