ANDREW MOREAU/OPINION

Simmons' 2-bank buy expands presence in Nashville area

Nashville and Atlanta today are two of the nation's hottest banking markets, although Arkansas banks have been limited participants so far. That could change with Simmons First National Corp.'s planned purchase of two community banks in Tennessee.

The southern cities "remain two of the most vibrant banking markets in the country," Stephens Inc. noted in an industry report last week.

Simmons First National Corp. announced two weeks ago it will spend $278 million to buy the two Tennessee community banks, expanding its presence in Nashville with the deals. The bank also will increase its deposits statewide, with market share increasing from 13th to 9th.

At the same time, the purchase of Landmark Community Bank and Triumph Bancshares Inc. will move Simmons' deposit market share in Nashville from 20th to 15th when the deals close in the fourth quarter. Simmons' acquisitions are one of six purchases of banks in the South in the past few weeks.

In a separate report, Stephens praised the acquisitions while having some reservations.

"We like that SFNC is focused on tuck-in acquisitions and not further expanding its footprint," banking analyst Matt Olney wrote. "We remain cautious on SFNC's loan growth near term but believe this deal could potentially drive stronger growth in 2022 should SFNC add new producers to its Tennessee market."

In announcing the acquisitions, Simmons noted the banks would become immediately accretive, increasing earnings per share by about 7.5% in the first year.

The deals moved Stephens to raise its earnings per share estimate from $1.98 in 2022 to $2.14. This year's estimate remains essentially the same, with a slight decrease from $2.01 per share to $2. The bank's stock price target increased to $34 from $32.

While increasing Simmons' share in the hot Nashville market, the deals will have a large impact in Memphis, where the bank will move from 35th in deposit market share to 6th. The acquired deposits will represent 8% of Simmons' deposits after the deals close.

Landmark has deposits of $840 million and a $797 million loan portfolio, a mix of 36% commercial and 64% consumer. The bank has total assets of $1 billion.

Triumph Bank has deposits of $751 million and its loan portfolio is $695 million, a mix of 76% commercial and 24% consumer. It has total assets of $894 million.

ACCELERATOR OFF & RUNNING

Over at the Little Rock Venture Center, the organization's sixth FIS accelerator program is in full swing with its largest-ever female cohort. Ten financial technology companies, including BankLabs of Little Rock, are participating in the 12-week program.

The accelerator is supported financially and technically by FIS, the world's largest global provider dedicated to banking and payments technology.

FIS really began in Little Rock in 1968 as Systematics Inc., founded by University of Arkansas grad Walter Smiley, who needed funding to build the operation.

He turned to the Stephens family, and then head of Stephens Inc., Jackson T. Stephens, agreed to invest $400,000. Stephens Inc. also was a big investor in Alltel Corp.

In 1990, Systematics was acquired by Alltel Information Services, an Alltel subsidiary that provided back office and banking software to customers. AIS was bought by title insurance giant Fidelity National Financial in 2003. That company was renamed Fidelity Information Services (FIS).

In announcing this year's cohort, Venture Center Executive Director Wayne Miller reminded participants that fintech entrepreneurship began in Little Rock more than 50 years ago.

"Fintech began right here in the state of Arkansas in 1968 with the founding of Systematics," Miller said. "We don't want you to ever forget that."

Today, FIS is a Fortune 500 company with operations in more than 50 countries and processes more than $75 billion in financial transactions. The company has annual revenues of more than $14 billion.

The FIS fintech accelerator program is focused on identifying and fostering startup financial technology firms with promising, high-potential technologies that advance the way the world pays, banks and invests. The 2021 program received applications from fintech companies in the United States and 29 other countries.

During the pandemic year, the Venture Center and financial leaders learned that promoting entrepreneurship was more important than ever, Miller said.

"Innovation and entrepreneurship go on regardless," he noted of the health and economic crisis. "In fact, they thrive during challenging times."

Thirty percent of this year's cohort features products and services created by female founders. The 2021 program again will be conducted virtually and began June 7.

"The future of fintech will be [affected] by innovators that bring forward breakthrough technology ideas that have real-world value for financial services organizations," Ariel Mendiola, head of FIS Ventures, said in a news release. "That's the spirit of innovation we look for each year in our accelerator program, and we are seeing it again with this year's applicants."

The program will feature demo day on Aug. 26, when each of the participating firms will present their refined solutions to hundreds of leading financial institutions, potential investors and industry participants.

The 10 selected fintech companies and their focus areas are:

• Array of New York delivers credit-monitoring services.

• Atomic of Salt Lake City provides authentication/direct deposit services.

• Bankifi of Manchester, England, offers banking-as-a-service.

• Informed.IQ of San Francisco offers automation products.

• Long Game of San Francisco provides financial wellness offerings.

• OakNorth Americas of New York offers lending products.

• Railz of Toronto provides data-as-a-service.

• TaxStatus of Atlanta has authentication/lending services.

• Vymo, with operations in New York, Bangalore and Singapore, offers customer relationship management products.

FATHER'S DAY BLUES

Just in time for Father's Day, personal financial website WalletHub issued a new survey last week to help determine the best states for men who play a dual role as parent and provider.

WalletHub compared the 50 states and the District of Columbia across 23 key indicators of friendliness toward working fathers. The data examine concerns including the average length of the workday for males, child-care costs and the share of men in good or better health.

Arkansas didn't fare too well for its dads.

Conditions for working fathers in Arkansas ranked 42nd in the nation. The state was listed as one of the worst in the nation -- ranked 47th -- with the highest percentage of children living in poverty with a father present.

Other key findings for Arkansas' dads: the state ranked 44th in male life expectancy and 41st in physically active men.

The top ranking for the state? Thirty-first in the male uninsured rate.

More information is available at wallethub.com.

Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at [email protected] or at 501-378-3567.

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