Simmons First National Corporation (NASDAQ: SFNC) (“Simmons” or
“Company”) and Spirit of Texas Bancshares, Inc. (NASDAQ: STXB)
(“Spirit”) announced today the execution of a definitive merger
agreement (the “Merger Agreement”) pursuant to which Simmons will
acquire Spirit, and its wholly-owned subsidiary, Spirit of Texas
Bank SSB (the “Proposed Transaction”), in a transaction consisting
of a mixture of cash and Simmons’ common stock with an aggregate
value of approximately $581 million, based on the Simmons’ closing
stock price of $31.73 on November 17, 2021.
Under the terms and subject to the conditions of
the Merger Agreement, shares of Spirit’s common stock and Spirit’s
restricted stock units will be converted into the right to receive
shares of Simmons’ common stock, and Spirit’s stock options and
warrants will be cashed out.
Spirit is a Texas-based bank holding company
that operates 37 locations primarily in the Texas Triangle – the
fastest growing megaregion in the U.S. consisting of the
Dallas-Fort Worth, Houston, San Antonio and Austin metropolitan
areas – with additional locations in the Bryan-College Station,
Corpus Christi and Tyler metropolitan areas, along with offices in
North Central and South Texas. As of September 30, 2021, Spirit had
total assets of $3.2 billion, total loans of $2.3 billion and total
deposits of $2.7 billion.
Financial highlights for Simmons, Spirit and on
a pro forma basis are shown below (unaudited as of September 30,
2021, except where otherwise noted):
($ in billions) |
Simmons |
Spirit of Texas |
Pro Forma |
Assets |
$25.1 |
$3.2 |
$28.2 |
Loans |
12.4 |
2.3 |
14.6 |
Deposits |
19.6 |
2.7 |
22.3 |
Branches |
209 |
37 |
246 |
Texas market share rank (1) |
47th |
38th |
26th |
Source: S&P
Global Market Intelligence; (1) Based on deposit market share data
as of June 30, 2021 Note: Simmons data includes the pro forma
results of Landmark Community Bank and Triumph Bancshares, Inc.
which were acquired by the Company on October 8, 2021. |
“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,”
said George Makris, Jr., Simmons’ Chairman and CEO. “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.”
Makris added, “In addition to cultural and
geographic synergies, the financial metrics of this merger are
consistent with our stated M&A parameters and strategy of
partnering with high-quality banks within our current footprint
that represent an efficient use of our capital and deliver on our
commitment of building long-term value for our shareholders. We’re
very pleased to welcome our newest partners to the Simmons
organization, including Dean Bass, who will join our board shortly
after closing as an independent director, and David M. McGuire, who
will provide leadership as a key member of our executive team in
Texas.”
Dean O. Bass, Chairman and CEO of Spirit,
commented, “The foundation of Spirit was built upon offering
products and services that meet our customers financial needs and
delivering an exceptional customer experience that is supported by
a diverse and experienced team who are positioned in some of the
most attractive markets in the Heart of Texas. By joining forces
with Simmons, we recognize the opportunity to align with a partner
that shares our passion for providing high-quality customer
service, the increased capacity to lend by leveraging a larger
balance sheet and access to a broader array of products and
services, including leading-edge digital capabilities. We believe
the opportunity to join the Simmons team is very positive for our
organization and will provide greater benefits to our customers and
the communities we serve.”
The Proposed Transaction culminates an eventful
year for Simmons. In October, Simmons completed the acquisitions
and conversions of Tennessee based Landmark Community Bank
(“Landmark”) and Triumph Bancshares, Inc. (“Triumph”), the parent
company of Triumph Bank. Based on FDIC deposit market share data as
of June 30, 2021, prior to the Landmark and Triumph acquisitions,
Simmons Bank ranked as the 11th largest bank in Tennessee. On a pro
forma basis (including Landmark and Triumph Bank deposits at June
30, 2021), Simmons Bank now ranks as the 8th largest bank in
Tennessee, the 7th largest bank in the Memphis metropolitan area
and the 14th largest bank in the Nashville metropolitan area based
on FDIC deposit market share data as of June 30, 2021.
Under the terms of the Merger Agreement, Simmons
will issue approximately 18,325,000 shares of its common stock,
subject to certain conditions and potential adjustments, including
substituting cash for Simmons’ common stock to the extent necessary
to cash out Spirit’s stock options and warrants. The Proposed
Transaction is estimated to be accretive to Simmons’ earnings per
share by approximately $0.22 per share (9.8 percent) in 2023. The
estimated transaction returns are consistent with Simmons’ stated
acquisition criteria pertaining to tangible book value and targeted
internal rates of return. Simmons expects to achieve cost savings
of approximately 35 percent of Spirit’s noninterest expense base,
with approximately 50 percent achieved in 2022 and 100 percent
thereafter. While revenue synergies have been identified, they have
not been included in any estimates or projections.
The Proposed Transaction, which was approved by
the boards of directors of Spirit and Simmons, is subject to
approval by Spirit’s shareholders, regulatory approval and other
customary closing conditions. Pending the satisfaction of these
approvals and other conditions, Simmons expects to close the
Proposed Transaction during the second quarter of 2022.
Keefe, Bruyette & Woods, A Stifel Company
served as financial advisor to Simmons, and Covington & Burling
LLP served as Simmons’ legal advisor. Stephens Inc. served as
financial advisor to Spirit, and Hunton Andrews Kurth LLP served as
Spirit’s legal advisor.
Simmons First National
CorporationSimmons First National Corporation (NASDAQ:
SFNC) is a Mid-South based financial holding company whose
principal subsidiary, Simmons Bank, operates more than 200
financial centers in Arkansas, Missouri, Tennessee, Texas, Oklahoma
and Kansas. Founded in 1903, Simmons Bank offers comprehensive
financial solutions delivered with a client-centric approach.
Simmons Bank was named to Forbes’ list of “World’s Best Banks” for
the second consecutive year and ranked among the top 30 banks in
Forbes’ list of “America’s Best Banks” for 2021. Additional
information about Simmons and Simmons Bank can be found on our
website at simmonsbank.com, by following @Simmons_Bank on Twitter
or by visiting our newsroom.
Spirit of Texas Bancshares,
Inc.Spirit of Texas Bancshares, Inc. (NASDAQ: STXB),
through its wholly-owned subsidiary, Spirit of Texas Bank SSB (the
"Bank"), provides a wide range of relationship-driven commercial
banking products and services tailored to meet the needs of
businesses, professionals and individuals. The Bank has 37
locations in the Houston, Dallas/Fort Worth, Bryan/College Station,
Austin, San Antonio-New Braunfels, Corpus Christi, Austin and Tyler
metropolitan areas, along with offices in North Central and South
Texas. Please visit www.sotb.com for more information.
Conference CallSimmons’
management will host a conference call on Friday, November 19,
beginning at 9:00 a.m. Central Time regarding the announcement of
the Merger Agreement. Interested parties can listen to this call by
dialing toll-free (866)-298-7926 (United States and Canada only)
and asking for the Simmons First National Corporation conference
call, conference ID 2777331. In addition, the call will be
available live or in recorded version on the Company’s website at
simmonsbank.com under “Investor Relations.” The recorded version
will be available for at least 60 days.
Additional information regarding the Proposed
Transaction is provided in a supplemental presentation available
under the “Investor Relations” page of the Company’s website at
simmonsbank.com.
Forward-Looking
StatementsCertain statements contained in this press
release may not be based on historical facts and should be
considered “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements may be identified by reference to a
future period(s) or by the use of forward-looking terminology, such
as “anticipate,” “believe,” “budget,” “contemplate,” “continue,”
“estimate,” “expect,” “foresee,” “intend,” “indicate,” “target,”
“plan,” positions,” “prospects,” “project,” “predict,” or
“potential,” by future conditional verbs such as “could,” “may,”
“might,” “should,” “will,” or “would,” or by variations of such
words or by similar expressions. These forward-looking statements
include, without limitation, statements relating to the impact the
Company and Spirit expect the Proposed Transaction to have on the
combined entities’ operations, financial condition and financial
results, and the Company’s and Spirit’s expectations about their
ability to obtain regulatory approvals and Spirit’s shareholder
approval, their ability to successfully integrate the combined
businesses and the amount of cost savings and other benefits the
Company and Spirit expect to realize as a result of the Proposed
Transaction. The forward-looking statements may also include,
without limitation, those relating to the Company’s and Spirit’s
predictions or expectations of future business or financial
performance as well as goals and objectives for future operations,
financial and business trends, business prospects, and management's
outlook or expectations for future growth, revenue, expenses,
assets, capital levels, liquidity levels, asset quality,
profitability, earnings, accretion, customer service, investment in
digital channels, or other future financial or business
performance, strategies or expectations, the impacts of the
COVID-19 pandemic and the ability of the Company and Spirit to
manage the impacts of the COVID-19 pandemic, capital resources,
market risk, plans for investments in securities, effect of future
litigation, acquisition strategy, legal and regulatory limitations
and compliance and competition.
These forward-looking statements involve risks
and uncertainties, and may not be realized due to a variety of
factors, including, without limitation: changes in the Company’s
and Spirit’s operating, acquisition, or expansion strategy; the
effects of future economic conditions (including unemployment
levels and slowdowns in economic growth), governmental monetary and
fiscal policies, as well as legislative and regulatory changes,
including in response to the COVID-19 pandemic; changes in interest
rates; possible adverse rulings, judgements, settlements, and other
outcomes of pending or future litigation; the ability to obtain
regulatory approvals and meet other closing conditions to the
Proposed Transaction; delay in closing the Proposed Transaction;
difficulties and delays in integrating the Spirit business or fully
realizing cost savings and other benefits of the Proposed
Transaction; changes in the Company’s share price before closing;
the outcome of any legal proceedings that may be instituted against
the Company or Spirit as a result of the Proposed Transaction or
otherwise; the occurrence of any event, change or other
circumstance that could give rise to the right of one or both
parties to terminate the Agreement; business disruption following
the Proposed Transaction; the reaction to the Proposed Transaction
of the companies’ customers, employees and counterparties;
uncertainty as to the extent of the duration, scope, and impacts of
the COVID-19 pandemic on the Company, Spirit and the Proposed
Transaction; and other relevant risk factors, which may be detailed
from time to time in the Company’s and Spirit’s press releases and
filings with the U.S. Securities and Exchange Commission (the
“SEC”). Many of these factors are beyond the Company’s and Spirit’s
ability to predict or control, and actual results could differ
materially from those in the forward-looking statements due to
these factors and others. In addition, as a result of these and
other factors, the Company’s and Spirit’s past financial
performance should not be relied upon as an indication of future
performance.
The Company and Spirit believe the assumptions
and expectations that underlie or are reflected in any
forward-looking statements, expressed or implied, in this press
release are reasonable, based on information available to the
Company and Spirit on the date of this press release. However,
given the described uncertainties and risks, the Company and Spirit
cannot guarantee its future performance or results of operations or
whether the Company’s and Spirit’s future performance will differ
materially from the performance reflected in or implied by its
forward-looking statements, and you should not place undue reliance
on these forward-looking statements. All forward-looking
statements, expressed or implied, included in this press release
are expressly qualified in their entirety by the cautionary
statements contained or referred to herein. Any forward-looking
statement speaks only as of the date of this press release, and
neither the Company nor Spirit undertakes any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Important Additional Information and
Where to Find ItThis press release does not constitute an
offer to sell or the solicitation of an offer to buy any securities
or a solicitation of any vote or approval with respect to the
Proposed Transaction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities
Act of 1933, as amended, and no offer to sell or solicitation of an
offer to buy shall be made in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
In connection with the Proposed Transaction, the
Company will file with the SEC a registration statement on Form S-4
(the “Registration Statement”) to register the shares of Company
common stock that will be issued to Spirit shareholders in the
Proposed Transaction. The Registration Statement will include a
proxy statement of Spirit and a prospectus of the Company (the
“Proxy Statement/Prospectus”), and the Company and/or Spirit may
file with the SEC other relevant documents concerning the Proposed
Transaction. The definitive Proxy Statement/Prospectus will be
mailed to shareholders of Spirit. SHAREHOLDERS ARE URGED TO READ
THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN ITS ENTIRETY
WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC BY THE COMPANY AND/OR SPIRIT, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Free copies of the Proxy Statement/Prospectus,
as well as other filings containing information about the Company
and Spirit, may be obtained at the SEC’s Internet site
(http://www.sec.gov), when they are filed by the Company or Spirit.
You will also be able to obtain these documents, when they are
filed, free of charge, from the Company at simmonsbank.com under
the heading “Investor Relations” or from Spirit at www.sotb.com
under the “Investor Relations” link. Copies of the Proxy
Statement/Prospectus can also be obtained, when it becomes
available, free of charge, by directing a request to the Company at
Simmons First National Corporation, 501 Main Street, Pine Bluff,
Arkansas 71601, Attention: Ed Bilek, Director of Investor
Relations, Email: ed.bilek@simmonsbank.com or ir@simmonsbank.com,
Telephone: (870) 541-1000; or by directing a request to Spirit at
Spirit of Texas Bancshares, Inc., 1836 Spirit of Texas Way, Conroe,
Texas 77301, Attention: Corporate Secretary, Email:
jgoleman@sotb.com, Telephone: (936) 521-1836.
Participants in the
SolicitationThe Company, Spirit, and certain of their
respective directors, executive officers and employees may be
deemed to be participants in the solicitation of proxies from the
shareholders of Spirit in connection with the Proposed Transaction.
Information about the Company’s directors and executive officers is
available in its proxy statement for its 2021 annual meeting of
shareholders, which was filed with the SEC on April 15, 2021.
Information about Spirit’s directors and executive officers is
available in its proxy statement for its 2021 annual meeting of
shareholders, which was filed with the SEC on April 9, 2021.
Information regarding all of the persons who may, under the rules
of the SEC, be deemed participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the Proxy
Statement/Prospectus regarding the Proposed Transaction and other
relevant materials to be filed with the SEC when they become
available. Free copies of these documents may be obtained as
described in the preceding paragraph.
Investor and Media Contact |
|
Ed Bilek |
Ken Dennard/Natalie Hairston |
EVP, Director of Investor Relations |
Dennard Lascar Investor Relations |
Simmons First National Corporation |
STXB@dennardlascar.com |
ed.bilek@simmonsbank.com |
713.529.6600 |
205.612.3378 (mobile) |
|
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