Heartland, One Bank See More Red in 3Q

by George Waldon  on Monday, Nov. 6, 2017 12:00 am   2 min read

Two Little Rock banks in need of capital are traveling divergent paths in search of balance sheet stability.

One Bank & Trust continues to look for a buyer or investors to resolve its deteriorating capital. A foreclosure sale of stock this summer provided an avenue of a different sort for Heartland Bank.

Heartland recorded a loss of $2 million in the third quarter and more than $13.8 million through the first nine months of 2017. The red ink reduced the bank’s total equity capital to $6.7 million.

The $182 million-asset lender began the quarter as an independent bank but became an asset of Simmons Bank of Pine Bluff. Simmons became the owner through stock securing a bad loan to Heartland’s parent company, Rock Bancshares Inc.

Since the change of ownership, the headcount of Heartland staffers has fallen from 37 to 27. Larry Bates, a Simmons staffer since 1996, now holds the posts of chairman, president and CEO at Heartland.

Bates was most recently executive vice president of specialty lending for Simmons. He was tapped to oversee Heartland because of his experience helping Simmons manage its failed-bank acquisitions.

Meanwhile, One Bank lost $1 million during the third quarter. The loss reduced total equity capital to $8.4 million.

The third-quarter results pushed the total loss for the year to nearly $3.3 million. One Bank ended the third quarter with a tier one leverage ratio of less than 3.2 percent. A lender with a ratio below 4 percent is considered undercapitalized, and less than 3 percent is deemed to be significantly undercapitalized.

By comparison, Heartland’s tier one leverage ratio was less than 3.5 percent as of Sept. 30.

Rocked by bad loans and mismanagement, One Bank hasn’t produced a normal quarterly profit since the Office of the Comptroller of the Currency ousted Layton “Scooter” Stuart in September 2012.

Back then, total assets at the bank Stuart owned and controlled as CEO stood at nearly $454.5 million. Five years later, total assets have eroded by 39 percent to less than $277.2 million.

 

 

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