Simmons First National in Pine Bluff, Ark., has agreed to buy the parent of First South Bank in Jackson, Tenn.
The $8.2 billion-asset Simmons First said in a press release Thursday that it will pay $72.2 million in cash and stock for the $464 million-asset Hardeman County Investment Co. The deal, which is expected to close in the first quarter, values Hardeman at 164% of its tangible book value.
First South has 10 branches, $260 million in loans and $372 million in deposits.
The acquisition "presents a great opportunity for additional growth with expanded products and services in markets very important to our company," George Makris Jr., Simmons' chairman and chief executive, said in the release. "The addition of First South Bank strengthens our presence in western Tennessee."
Simmons said it expects to incur about $6 million in merger-related expenses, though it also plans to reduce Hardeman's annual noninterest expenses by $5.3 million. The deal should be slightly accretive to Simmons' earnings next year. It should take less than three years to earn back the expected 1.5% dilution to Simmons' tangible book value.
Simmons was advised by Keefe, Bruyette & Woods. Hardeman was advised by Olsen Palmer.