Westrock Sets Sights on More Banking Deals

by George Waldon  on Monday, Feb. 28, 2011 12:00 am  

"We didn't want this to be exclusively a Little Rock group of people," said Massey. "Other investors are in northwest and north Arkansas."

He and Cavin declined to name the other 18 or so Bear State investors.

"I've been watching and had an interest in First Federal for years," Massey said. "I met Larry [Brandt, president and CEO of First Federal] way back when. I just like the communities they're in, and they have hard-working people, everything you like."


'A Big Write-Down'

The deal got rolling when Massey contacted Frank Conner, a First Federal director and former chief financial officer at American Freightways Corp., the Harrison less-than-truckload carrier that was sold a decade ago to FedEx Corp. for $1.2 billion.

Since last April, First Federal has labored under a cease-and-desist order from the Office of Thrift Supervision that accompanied its restated 2009 earnings. That recalculation added nearly $20 million to the loss column and pushed the total loss for the year to more than $45 million.

"It became apparent that the company had taken a big write-down," Massey said. "It looked like they were going to need new capital."

Massey had a business relationship with Conner that dated back to his days at the Rose Law Firm doing work for American Freightways.

Massey's pitch regarding First Federal: "We love this franchise, and if you're in the mind to raise more capital, we'd love to be your partner."

Discussions began in earnest last summer, along with a thorough examination of First Federal's loan portfolio and roster of real estate holdings.

"When you're going to recapitalize a troubled bank, the analysis has to focus on their loan assets," Massey said. "We pored over those in a pretty focused fashion."



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