Arkansas Public Companies See Mixed Stock Results After Recession

by Jan Cottingham  on Monday, Jul. 22, 2013 12:00 am  

The truckload market continues to be challenging, Delco said. He noted that since about 2007, “J.B. Hunt has shrunk its over-the-road trucking fleet by 70 percent.”

Despite a disappointing performance during the past six years, the stock of Arkansas’ other trucking companies — particularly Arkansas Best and USA Truck — has shown good growth since the first of 2013, reinforcing the caveat that examining share performance during a particular time is somewhat arbitrary.

Banking

Two publicly traded Arkansas bank stocks have experienced big increases during our six-year window from July 2, 2007, to July 1, 2013. Bank of the Ozarks has seen its share price rise 224.97 percent, from an adjusted close of $12.63 to $43.57. The stock of Home BancShares of Conway has increased 188.54 percent, from an adjusted $8.88 to $25.96. (Both companies have enjoyed 2-for-1 stock splits since the recession, Bank of the Ozarks in August 2011 and Home BancShares in May of this year.)

The banks’ healthy performance has led them to expand their footprints and buy banks throughout the country, with Home BancShares’ recently announced $280 million deal to buy Liberty Bancshares of Jonesboro coming in as the largest in-state banking transaction in Arkansas history.

And though the shares of Simmons First National Bank of Pine Bluff and First Federal Bancshares of Arkansas Inc. of Harrison haven’t fared as well, those companies also have been in a position to grow their business.

Matt Olney, also an analyst at Stephens, covers Bank of the Ozarks, Home BancShares and Simmons. “The Arkansas banks have performed very well in general,” he said.

He cited three factors in their success, the resilience of the Arkansas economy, real estate in the state holding its value relative to other parts of the U.S. and the banks’ growth strategies, “whether it’s the failed bank acquisitions, live bank acquisitions or organic growth.”

They were able to move beyond Arkansas because “they had good balance sheets and their credit quality was strong,” Olney said.

“As I travel to the money centers, whether it’s New York or Boston, I get the question all the time: Why are there so many strong banks in Arkansas when the state’s so small?”

Randy Dennis, president of DD&F Consulting Group, a Little Rock bank consulting firm, noted of First Federal Bancshares that it had recapitalized within the six-year window (in 2011) and was poised to continue to grow. In fact, First Federal has announced a $129 million deal to buy First National Security Corp. and its two banks, First National Bank of Hot Springs and Heritage Bank in Jonesboro.

 

 

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