On Monday, Nov. 19, the Southwest Bank signs disappeared, replaced with those of Simmons Bank, marking the most public change since the Pine Bluff, Arkansas-based banking group purchased the Fort Worth bank in 2017.
Simmons announced the merger with Fort Worth-based First Texas BHC Inc., Southwest Bank’s parent, and Stillwater, Oklahoma-based Southwest Bancorp Inc. in January 2017 under which Simmons acquired all of the outstanding common stock of the two banks in a transaction valued at approximately $462 million.
The new signs may be the most visual change as part of the merger, but there are other changes coming as Simmons grows not only it’s regional presence, but transitions from its roots as more of a rural-based institution, said Terry Smith, Fort Worth/Dallas regional chairman for Simmons.
“They had a little bit of presence in some bigger markets like Nashville and Kansas City and St. Louis, but those were small, a small presence there,” he said. “This was their first big foray into a major market, Dallas/Fort Worth. You don’t get much bigger than that. There’s only four markets in the United States that are bigger than Fort Worth/Dallas. So, we wanted to take some time and continue to utilize the Southwest Bank brand and the Bank SND brand … to kind of soft introduce, if you will, by attaching the Simmons name to the established brands of Southwest Bank and Bank SND.”
Smith said more changes will be happening behind the scenes at the bank.
“We have recently kicked off a program internally that we call the Next Generation Bank program and over the next three or four years we’re going to spend right at $100 million on systems upgrades,” he said.
Smith said that when all the bank platforms were integrated it was on Simmons legacy technology platform that was designed for a more rural agriculture consumer-based bank.
“The system that Simmons had been running historically really needed to be upgraded to handle both the current level of customer base we have and also our growth plans,” he said, as Simmons approaches $17 billion in assets.
On Nov. 13, Simmons announced a deal to buy Reliance Bancshares Inc. near St. Louis for approximately $172 million and Smith said the company likely isn’t done with acquisitions.
“Our plans are to continue to grow, so we needed more sophisticated systems both from an accounting and compliance standpoint but more importantly, from a customer facing standpoint,” he said, noting that customers in these larger markets require state-of-the-art technology and products.
“So that’s where we’re headed with this. Those contracts have been executed and we have begun as of two weeks ago the processes of readying the infrastructure for those upgrades, which will start immediately. The bulk of the customer facing upgrades will be completed by the end of 2019,” he said.
With 13 locations and about $2 billion in assets in the Fort Worth area and only three locations in Dallas, Smith said he suspects the growth opportunities will be organic in Fort Worth. In the Dallas area, the company will likely be looking for acquisitions, he said.
In Fort Worth, Simmons will continue to build on Southwest Bank’s heritage as a bank with close ties to the real estate industry.
“We are going to continue to have that focus,” he said. “That’s obviously a business we know very well. We got deep industry contacts and knowledge in that market.”
But the merger with Simmons means that the bank can do business with existing customers and “lets us do business with customers that we couldn’t before as a standalone bank, because we didn’t have the capacity, we didn’t have the capital and now we do. That’s the big positive that’s come out of this merger.”
The intent going forward is to layer in a more diversified line of products, Smith said.
“We’re expanding in a business lending, C&I (commercial and industrial) lending space which is that’s a real plus where everybody wants that new business and that’s where talent acquisition will be a big focus for us and it’ll help us with organic growth,” he said.
Simmons has to approximately $16.3 billion in assets (as of Sept. 30, 2018) and today operates approximately 200 branch locations throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas. Simmons is the subsidiary bank for Simmons First National Corporation (NASDAQ: SFNC), a publicly traded bank holding company.