On a pro forma basis, the proposed Landmark and Triumph transactions will create the ninth largest bank in Tennessee (based upon deposit market share) while vaulting Simmons’ ranking in Memphis, TN, from 35th to sixth and in Nashville, TN, from 20th to 15th.
“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,” George A. Makris Jr., chairman and CEO of Simmons First National, said. “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. 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. We’re very excited to welcome our newest partners to the Simmons organization.”
“We believe the opportunity to join the Simmons team is very positive for Landmark’s stakeholders,” James Farrell, chairman, president and CEO of Landmark Community Bank, 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. With access to Simmons’ broader array of consumer and commercial products, combined with their leading-edge digital capabilities, we will be able to provide greater benefits to our customers and the communities we serve.”
Simmons has a history of supporting the communities it serves. The Simmons First Foundation serves youth in the fields of education and healthcare across the bank’s footprint. The foundation also supports underserved, low-to-moderate income families by funding housing and environmental initiatives. Since 2014, the bank’s contributions have totaled more than $13 million. Beginning in 2021, the foundation is utilizing a new $3 million endowment for environmentally focused grants with interests in conservation and other agricultural projects. In connection with the proposed transactions, Simmons is reviewing plans for expanding its branch coverage in Memphis, TN.
“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,” William J. Chase Jr., president and CEO of Triumph Bancshares, said. “In addition to being able to offer our clients a wider breadth of banking products and services, we will have a greater capacity to lend while continuing to deliver the same excellent customer service and active community involvement.”
Simmons’ proposed transaction with Landmark includes consideration consisting of a mixture of cash and Simmons’ common stock valued at approximately $146.3 million (based on the company’s June 4 closing price), subject to certain conditions and potential adjustments. Simmons’ proposed transaction with Triumph also includes consideration consisting of a mixture of cash and Simmons’ common stock valued at approximately $131.6 million (based on the company’s June 4 closing price), subject to certain conditions and potential adjustments. The cash consideration in both proposed transactions will be used primarily for payments to Landmark’s and Triumph’s respective option holders.
The combined purchase price for the proposed transactions is estimated at approximately 147% of the combined tangible book value of Landmark and Triumph (as of March 31). Simmons estimates the proposed transactions, on a combined basis, to be approximately 7.5% accretive to earnings per share in 2022 (excluding one-time transaction expenses) and slightly accretive to tangible book value per share (including the impact of one-time transaction expenses and CECL “day two” accounting). Simmons expects to achieve cost savings of approximately 40% of Landmark’s and Triumph’s combined operating non-interest expense base through operational and administrative efficiency improvements. While revenue synergies have been identified, they have not been included in estimates.
The proposed transactions, which have been approved by the organizations’ respective boards of directors, are subject to the approval of Landmark’s shareholders (in the case of the Landmark proposed transaction) and Triumph’s shareholders (in the case of the Triumph proposed transaction), regulatory approval and other customary closing conditions. Simmons expects to close the proposed transactions during Q4/21.
Stephens served as financial advisor to Simmons, Mercer Capital Management provided Simmons with fairness opinions and Covington & Burling served as Simmons’ legal advisor. Olsen Palmer served as financial advisor to Landmark, while Baker, Donelson, Bearman, Caldwell & Berkowitz served as Landmark’s legal advisor. Southard Financial served as financial advisor to Triumph, while Farris Bobango served as Triumph’s legal advisor.
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