Market for Bank Buys Begins to Warm Up

by Gwen Moritz  on Monday, May. 7, 2012 12:00 am  

(Note: A correction has been made to this story. See the end of the story for more.)

Loan demand may still be cool, but the frozen market for buying and selling banks - without FDIC assistance - is beginning to warm up.

Just as bankers like J. Thomas May, CEO of Simmons First National Corp., have predicted, small community banks are finding merger partners, in part to spread out the costs of compliance with new federal regulations. (See related story.)

When 2011 drew to a close, 127 banks were chartered in Arkansas. Since then, that number has been reduced by one and two other bank acquisitions are in the works.

(Click here for a list of list of Arkansas-chartered banks, ranked by assets as of Dec. 31, 2011. A spreadsheet is also available.)

In February, State Holding Co., controlled by the Harry Hastings Jr. family of Little Rock, collapsed its two bank charters - Eagle Bank & Trust and Heber Springs State Bank - into one. The company kept the 1919 Heber Springs charter but moved it to Little Rock and gave it the Eagle Bank name.

Heber Springs State Bank was the 50th-largest bank as of Dec. 31, with assets of almost $210 million. Eagle Bank was No. 82 with $137.7 million. A March 31 call report for the combined institution had not yet been filed with the Federal Financial Institutions Examination Council last week, but Eagle Bank is now likely to be among the 35 largest banks chartered in Arkansas.

The first conventional bank acquisition in Arkansas since 2009 is happening in south Arkansas: Fordyce Bank & Trust Co. is in the process of buying the Bank of Rison. Despite being the smallest bank in the state, with assets of barely $30 million as of Dec. 31, the Bank of Rison was profitable last year ($331,000), which is more than 13 larger Arkansas banks can claim.

(Click here for a list of least profitable banks.)

Despite its profitability, the sale is valued at exactly book value, $5.4 million.
Later in the year, Mathias Bancshares of Springdale, the one-bank holding company that owns First State Bank of Northwest Arkansas, expects to purchase troubled Decatur State Bank. Decatur State was the least profitable bank in the state last year, losing $12.7 million on assets of $166 million.

Terms of the deal with the Peterson Holding Co. of Decatur have not been released, but the sale will not reduce the number of bank charters in the state. Mathias Bancshares, led by Sam Mathias, intends to retain the separate charter of Decatur State Bank and continue to operate it as such.

The List
Arvest Bank of Fayetteville, which boasts the oldest charter in the state (1871), dwarfs all other banks chartered in Arkansas with assets of $12.5 billion as of Dec. 31.



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