Bank of Rison Poised for $5.4 Million Sale

by George Waldon  on Monday, Apr. 23, 2012 12:00 am  

Fordyce Bank & Trust Co. is in the process of buying the smallest bank in Arkansas: Bank of Rison (Cleveland County).

The deal for the $30.1 million-asset lender weighs in at $5.4 million. Bank of Rison operates out of one location with a staff of six.

The bank produced a profit of $331,000 and a return on equity of 6 percent during 2011. Six of its largest shareholders are:

* James Hopson of Rison, 22.8 percent worth $1.23 million.

* LBM 99 Trust of Fayetteville, Lee and Brian Moore trustees, 21.25 percent worth nearly $1.15 million.

* Ira Moore III of Little Rock, 4.25 percent worth $229,500.

* Judy Caruthers of Little Rock, 3.45 percent worth $186,300.

* Hershel R. Garner Trust of Rison and Irene H. Searcy Revocable Trust of Sun City, Ariz., each with 3 percent worth $162,000.

The $123.1 million-asset Fordyce Bank & Trust has operated a branch in Rison since 1994. The company, with a staff of 40, also has full-service locations in Fordyce, Pine Bluff and White Hall.

When completed, the transaction will mark the first conventional bank buy in Arkansas since 2009.

Three deals closed that year: First National Bank of Hot Springs bought Heritage Bank of Jonesboro, November 2009; Farmers & Merchants Bank of Stuttgart purchased First National Bank of Marianna, June 2009; First Security Bank of Searcy acquired Union Bank of Benton, April 2009.

The acquisition of the Bank of Rison is financed with $2.7 million cash from Fordyce Bank & Trust and a $1.5 million loan from Simmons First National Bank of Pine Bluff .

The remaining $1.2 million cash will come from FBT Banshares Inc., the Fordyce bank's holding company.

Texas Ratios

Two Arkansas lenders generated Texas Ratios higher than 200 based on year-end numbers: Decatur State Bank at 208 and Little Rock's Metropolitan National Bank at 201. Lest we forget: The lower-is-better ratio was originally developed to analyze the credit quality of lenders during the financial meltdown of Texas banks and S&Ls during the 1980s.

The ratio compares the amount of loans at risk and the amount of owned real estate with the amount a lender has on hand to cover any losses, in the form of equity capital and loan loss reserves.

Both banks are operating under consent orders with bank regulators. Decatur State Bank's agreement with the Federal Deposit Insurance Corp. dates back to Nov. 18.

Other real estate owned, property recovered from failed mortgages, totaled $3.6 million at Decatur State Bank at Dec. 31. Total nonaccrual loans at the $165 million-asset lender amounted to almost $21 million.

Metropolitan recently entered a new, less restrictive consent order with the Office of the Comptroller of the Currency. It replaces the order the bank has operated under since May 22, 2008.

The new order covers five articles of improvement instead of the original seven. Higher capital ratios and fewer nonperforming assets are the bank's two areas most in need of improvement.

Metropolitan carried OREO valued at nearly $108.3 million on its books at year-end. Nonaccrual loans at the $1 billion-asset lender totaled $77.3 million.

 

 

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