SUNDAY, MAY 13, 2018 No 2018 buys on to-do lists for 3 lenders

But state banks haven’t yet ruled out more acquisitions

Leaders of Arkansas’ three publicly traded banks say they are not expecting to close on any bank acquisitions this year.

But they say they haven’t given up on the idea.

It is not on Simmons First National Corp.’s agenda this year to close any acquisitions that haven’t already been announced, George Makris, chairman and chief executive officer, said in a conference call last month.

“We’re very focused on making sure that our integration of Southwest Bank [of Fort Worth, Texas] and Bank SNB [of Stillwater, Okla.] go as planned,” Makris said. “We’re also very interested in establishing a base performance for Simmons in the third and fourth quarters and that’s our real focus for the rest of this year.”

Despite that, Makris acknowledged that Pine Bluffbased Simmons is having “very healthy discussions right now” with potential acquisition targets.

The low stock price of Home BancShares, the parent company of Centennial Bank, makes it difficult to pursue an acquisition, said John Allison, chairman of the Conway bank.

“However, we are talking to some companies,” Allison said in a conference call last month.

Allison was so frustrated with the low stock price — it closed at $22.22 on April 19 when the annual meeting was held — that he called Stephens Inc. and bought 20,000 shares for an investment of more than $440,000.

“I don’t know why it’s so low,” Allison told shareholders at the annual meeting last month. “It will fix itself. It won’t stay there forever.”

The stock was slowly moving up last week, rising about 7 percent since April 19.

Allison set a goal at Home BancShares to earn $2 a share this year.

To get to $2 a share in earnings, Home BancShares needs to have about $1 billion in loan growth with some reduction in expenses, Allison said.

The bank’s nearly 280 lenders “understand the charge” to hit $2 a share in earnings, he said.

Allison said he told Chris Poulton, president of Centennial Commercial Finance Group in the New York branch, to increase loans about $300 million this year.

“Then if the rest of the [branches] do about $600

● million that will get us our number for $2 [earnings per share this year],” he said. “That’s our goal. We will get it.”

The top priority for Bank of the Ozarks continues to be growing loans and deposits even without acquisitions, the Little Rock bank said when it released its firstquarter earnings last month.

Still, the bank’s management said that acquisitions provide opportunities to augment robust organic growth, meaning growth from sources other than purchased banks.

“We expect to continue to be disciplined in our acquisition strategy,” the management team said in a statement prepared in conjunction with first-quarter results.

Buying banks has been the norm for Arkansas’ publicly traded banks from 2010, when hundreds of banks across the country began to fail, through 2017, the last year that any of the three banks announced an acquisition.

Bank of the Ozarks has purchased 15 other banks since 2010, an average of 2.1 a year.

Simmons made 13 acquisitions since 2010, an average of 1.9 a year.

Home BancShares made 17 acquisitions, or 2.4 a year, from 2010 to 2017.

With more than $22 billion in assets at the end of the first quarter, Bank of the Ozarks is the 58th largest bank in the country, George Gleason, chairman and chief executive officer, said at the bank’s annual meeting last week. It is also the largest bank in Arkansas.

Simmons was the thirdlargest bank in Arkansas with $15.6 billion in the first quarter, behind Bank of the Ozarks and privately owned Arvest Bank.

Home BancShares is the fourth-largest bank in the state with $14.3 billion in assets to end the first quarter.

At the Bank of the Ozarks annual meeting, shareholders approved the name change to Bank OZK. The bank estimates the change will cost between $15 million and $25 million in one-time expenses during the third quarter this year, primarily because of marketing, rebranding and related expenses.

The bank anticipates that it will receive regulatory approval for the new name in mid-July.