Community First Bancshares Exits TARP In the Black

by George Waldon  on Monday, Mar. 10, 2014 12:00 am  

Did taxpayers lose money on the most recent Arkansas lender to exit the TARP program? No.

The U.S. Treasury ended up with nearly $3.7 million more than it “loaned” to Community First Bancshares Inc. of Harrison.

The $12.7 million that Uncle Sam invested in Community First was accomplished with preferred stock and warrants issued through the Capital Purchase Program.

The holding company of Community First Bank made dividend payments of nearly $3.3 million on the preferred shares since receiving the CPP investment on April 3, 2009.

The preferred shares and warrants were auctioned in early February for $13.2 million.

Was Community First the buyer?

The U.S. Treasury isn’t saying, and David Morton, CEO of the $461 million-asset bank, couldn’t be reached for comment.

Community First has remained profitable, through the Great Recession and beyond, with annual net income ranging as high as $5.8 million in 2013 to as low as $724,000 in 2009.

The TARP scorecard among Arkansas participants exiting the program in-cludes a mix of winners and losers.

Corning Savings & Loan Association produced a net gain of $21,705 for the U.S. Treasury from dividend payments and when its preferred shares and warrants were auctioned on Nov. 30, 2012.

The $42 million-asset thrift in Clay County now goes by Riverbank Savings & Loan, a name adopted in October.

Rogers Bancshares Inc. of Little Rock cost taxpayers $24.2 million. The $25 million it received from Uncle Sam was used to prop up Little Rock’s Metropolitan National Bank.

The bankruptcy of Rogers Bancshares last year led to the $53.6 million auction of Metropolitan to Simmons First National Corp. of Pine Bluff.

First Federal Bancshares of Arkansas Inc. of Harrison left a $9.9 million loss in its wake in 2011 after new money entered the ownership picture.

Bear State Financial Holdings LLC of Little Rock acquired controlling interest and recapitalized the company in a transaction that included a 1-for-5 reverse stock split, retiring TARP debt and investing $40.3 cash.

First Federal is in the process of changing its name to Bear State Financial Inc.

That move coincides with the $78 million cash-stock swap purchase of First National Security Co., the holding company for First National Bank of Hot Springs and Heritage Bank in Jonesboro.

The combination will almost triple First Federal assets from $548 million to about $1.5 billion and expand its branch network to 44 in Arkansas and two in southeast Oklahoma.

 

 

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