Bank wants to boost commercial lending
Simmons First National Corp. announced Tuesday that it had set up an 11-member finance team to trigger the commercial and industrial lending efforts.
Simmons said the team will focus on commercial lending in specialty areas such as business aviation and marine finance and will provide its commercial finance clients with a “deeper banking relationship” with access to other banking services.
The team will be led by Lee Palm, who most recently served as president of commercial finance at a $ 50 billion Detroit institution, TCF Bank, where he developed an aviation-focused commercial lending effort. business, inland and rail navigation, trucking and other specialties. areas.
Another key member of the management team also joins Simmons from TCF Bank.
“Being able to add a full team with the expertise and skills that encompass all of the business lines needed to start operations represents a unique ‘plug and play’ opportunity that will allow us to get started immediately,” said Matt Reddin, Executive Vice President, President and Chief Banking Officer, said in a press release. “Equally important, we will be able to offer our commercial financial clients a deeper banking relationship with access to our full range of complementary commercial banking and wealth management products and services. ”
An analysis from Stephens Inc. released Tuesday said “the new team should help reverse organic growth trends (Simmons).”
Loan production has fallen in the past year, with core balances – the missing paycheck protection program loans – down 20%, according to the Stephens report. Median organic loan growth for other banks in the region was positive at 2%, Stephens noted.
Part of Simmons’ decline resulted from a strategic shift outside of certain industries, although “much of the contraction was due to higher loan repayment levels and a slowdown in new loan production during this period. period, “analyst Matt Olney wrote in Tuesday’s report.
Forming a team to focus on commercial loan production should boost organic loan production over time. “We don’t expect the new team to have an immediate material effect on short-term earnings, but will help support long-term C&I growth,” the report said, referring to commercial and industrial loans.
The Commercial Loans team will focus on equipment financing for business aviation, highway trucking, franchise financing and marine financing. Simmons said the initiative will expand and diversify its commercial banking capabilities, product offerings and customer base.
The persistent pandemic had no effect on the decision to start the effort now, Simmons said. The health and economic crisis may allow the bank to take advantage of certain loan opportunities to meet the business needs created by the pandemic. “In fact, in many cases, this team will help serve the industries needed to transport / distribute the goods and services that people and businesses need to operate during the pandemic,” said Ed Bilek, executive vice president and director of investor relations, in response to questions Tuesday.
In the second quarter, Simmons reported total loans of $ 11.4 billion, down from $ 14.6 billion in the second quarter of last year. Loans were also down from the $ 12.2 billion recorded in the first quarter of this year.
Bilek said on Tuesday that the bank’s commercial loan pipeline has grown for three consecutive quarters and Simmons is “cautiously optimistic that this trend is a positive sign for the future.”
Besides Palm, the management team includes Brian Shapiro and Lee Mulder.
Shapiro will be the group’s managing director, leading the shipping and shipping business, and Mulder will lead credit and risk.
Shapiro has over 30 years of experience in trade finance and leasing and most recently led the efforts of TCF Bank. Mulder has over 20 years of experience with JPMorgan Chase & Co. of New York and most recently Citizens Financial Group Inc. of Providence, RI
Simmons First has total assets of $ 23.4 billion. The company operates as Simmons Bank with 198 branches in six states, including 68 in Arkansas.