Bank OREO Adds Up In Washington County

by George Waldon  on Monday, Jan. 27, 2014 12:00 am  

Washington County properties still held as "other real estate owned" by publicly traded Arkansas banks include (from left) the All Star Sports Arena in Springdale, an 11,000-SF home on Lovers Lane in Fayetteville and six ranch-style condominiums and 82 lots in The Pines at Springwoods, also in Fayetteville.

“Our philosophy is pretty much the same everywhere,” said Craig Hunt, president of Simmons First National Bank of Pine Bluff. “We want to dispose of the property as soon as we can for a reasonable price. We have current appraisals and up-to-date information on all the properties we own and have them all listed for sale.

“We have reduced the price of some to move them. We’re trying to actively market everything we have got.”

Simmons First Bank of Northwest Arkansas of Rogers was the company’s lender in the Washington County market until Nov. 2, when its separate bank charter was consolidated into the flagship operation in Pine Bluff.

Simmons took on $67 million of new OREO when it acquired Little Rock’s Metropolitan National Bank with a winning bid of $53.6 million in a bankruptcy court auction. As of Nov. 25, Metropolitan’s OREO became Simmons’ OREO.

“We have transitioned all that property into Simmons First National Bank,” Hunt said. “We have a group that is actively working to manage and dispose of that property. When we acquired Metropolitan, we valued the property at what we could market it for at the time we made our acquisition. In some cases, that may be less than what Metropolitan had it on their books for. That may help us move it.”

Centennial Bank of Conway inherited much of its Washington County OREO.

When Home BancShares Inc. of Conway purchased the parent company of Jonesboro’s Liberty Bank of Arkansas, the deal came with $34.7 million worth of OREO.

That property was folded into Centennial Bank’s OREO portfolio.

Back in 2009, Gene Cauley’s Coco Mountain Ranch property in Fayetteville was tied to three Centennial Bank loans totaling more than $15 million.

The Coco Mountain property remains the single largest line item of Washing-ton County OREO for Centennial.

The new management at First Federal Bank of Harrison took an aggressive stance toward OREO pricing after the Bear State Financial recapitalization in 2011.

“We took a substantial write-down at the end of 2011 on a lot of that property in the Benton and Washington county markets,” said Tom Fritsche, executive vice president and chief lending officer at First Federal Bank. “It was about a $9 million write-down.



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