Home BancShares Becomes 4th Arkansas Bank to Pay Back TARP Money

Home BancShares Inc. of Conway, the parent company of Centennial Bank, became the fourth Arkansas-based financial institution to come out from under the federal TARP program when it bought back the $50 million in preferred shares sold to the U.S. Treasury at the beginning of 2009.

In the ensuing two and a half years, Home BancShares (Nasdaq: HOMB) paid taxpayers more than $5.8 million in dividends.

"The money we received from our participation in the TARP program served its purpose of providing us with additional stabilization during these tough economic times," Chairman John Allison said in a news release announcing the buy-back, which was completed July 6.

Allison, who in 2010 told shareholders that Home BancShares participated in the federal bailout program because "[e]veryone was taking TARP money," had signaled in January that the company would probably buy back the shares sometime during 2011.

Nine Arkansas banks sold preferred shares to the Treasury in the TARP program called Capital Purchase Program.

  • Bank of the Ozarks (Nasdaq: OZRK), the first to go for the money, returned $75 million to the Treasury in November 2009 after less than a year in the program. BOZ paid more than $3.35 million in dividends during that time.
  • Southern Bancorp Inc. of Arkadelphia bought back its $11 million in preferred stock last August, having paid dividends of $855,556.
  • As part of its recapitalization of struggling First Federal Bancshares of Arkansas Inc. (Nasdaq: FFBH), the investment group of Bear State Financial Holdings LLC struck a deal to buy back the Harrison thrift's $16.5 million worth of shares for the bargain price of $6 million. First Federal had paid $570,625 in dividends but had then missed five quarterly payments totaling $1.03 million.
The five banking companies that have not yet redeemed their TARP shares are:
  • Liberty Bancshares Inc. of Jonesboro, which received $57.5 million in January 2009 and has paid $7.24 million in dividends.
  • Rogers Bancshares of Little Rock, the holding company for Metropolitan National Bank, which received $25 million in January 2009. Metropolitan paid $738,021 in dividends by August 2009 but has since missed seven quarterly dividend payments totaling $2.38 million.
  • Corning Savings & Loan Association, which sold $638,000 worth of shares to the Treasury in February 2009 and has since paid dividends of $8,695.
  • White River Bancshares Co. of Fayetteville, the holding company of Signature Bank of Arkansas, which received $16.8 million in February 2009. Signature Bank paid dividends of $1.59 million but has now missed two quarterly payments totaling $457,800.
  • Community First Bancshares Inc. of Harrison, which received $12.7 million in April 2009 and has since paid $1.47 million in dividends.
Three other Arkansas banks sold the Treasury subordinated debentures rather than preferred stock:
  • Chambers Bancshares Inc. of Danville, which received $19.817 million in May 2009 and has since paid $3.26 million in interest;
  • OneFinancial Corp. of Little Rock, the holding company of One Bank & Trust, which received $17.3 million in June 2009 and has since paid $2.73 million in interest; and
  • Riverside Bancshares of Little Rock, which received $1.1 million in May 2009 and has since paid $184,580 in interest.