First Federal Bancshares Gets $46.3 Million Bear State Investment

First Federal Bancshares of Arkansas Inc. of Harrison on Tuesday got a $46.3 million infusion of new capital. The company completed the planned investment by Bear State Financial Holdings LLC, representing a group of Arkansas businessmen.

Bear State, a limited liability company, received more than 15.4 million shares of common stock and a warrant to purchase an additional two million shares in the thrift holding company.

First Federal also effected a 1-for-5 reverse stock split of all outstanding shares of common stock, which will be reflected at the opening of trade tomorrow on Nasdaq, where it trades in the symbol FFBH.

Shareholders of struggling First Federal approved the recapitalization plan on Friday. The deal gives Bear State majority ownership of the company.

According to a First Federal news release (PDF), Bear State also acquired all 16,500 shares of the company's preferred stock previously issued to the United States Department of the Treasury under the TARP Capital Purchase Program and the related warrant for total cash consideration of $6 million.

At the closing, Bear State tendered these shares and the related warrant for cancellation and received a $6 million credit toward the purchase price of the company's common stock.

Leadership changes accompanying the recapitalization include Rick Massey serving as chairman of the board.

Additional new board appointees are Scott Ford, the former Alltel Corp. CEO and a partner at Westrock Capital Partners; Aaron Clark of The Stephens Group; and Dabbs Cavin, who is joining as president of the holding company and bank.

Continuing as board members are John Paul Hammerschmidt, with the new title of chairman emeritus; Larry Brandt, who remains as chief executive officer; and Frank Conner.

Senior management will be augmented by industry veterans Chris Wewers, executive vice president and chief operating officer, and Rusty Guerra, executive vice president, chief lending officer. Tommy Richardson is executive vice president and chief administrative officer, and Sherri Billings will remain chief financial officer.