UPDATE: First Federal to Acquire First National of Hot Springs, Heritage Bank of Jonesboro

First Federal Bancshares of Arkansas, the publicly traded parent company of First Federal Bank of Harrison, announced Monday a deal to acquire First National Security Co., the holding company for First National Bank of Hot Springs and Heritage Bank in Jonesboro.

Christopher Wewers, who succeeded Dabbs Cavin as CEO of First Federal Bancshares on Monday, told Arkansas Business that First National Security shareholders would receive shares of First Federal Stock (Nasdaq:FFBH) valued at just under $50 million plus $74 million in cash.

Some of the cash - Wewers would not reveal how much - will come from new equity invested in First Federal by members of Bear State Financial Holdings, the equity investment company that recapitalized struggling First Federal in 2011. Details will be filed with the Securities & Exchange Commission on Tuesday, Wewers said.

In the meantime, he would say only that the price being paid was a premium on the book value of First National and Heritage Bank, which will continue to be operated as separate charters. Wewers praised the skills of First National President Jason Lenderman and Heritage President Steve May, who will remain in place.

"These are talented, talented, talented bankers," he said.

The combination will almost triple First Federal Bancshares's assets to about $1.4 billion and expand its branch network to 44 in Arkansas and two in southeast Oklahoma. First Federal Bank had assets of almost $550 million as of March 31, while First National had assets approaching $710 million and Heritage had almost $200 million.

First National Security's chairman, John H. Hendrix, and CEO Daniel C. Horton, will join First Federal's board of directors.

More: Read Arkansas Business' 2005 profile of Hendrix and First National Security.

The deal is expected to close in the fourth quarter of 2013.

The announcement marks the second big Jonesboro bank deal within a week. On Tuesday, Home BancShares Inc. of Conway announced a $280 million deal to acquire Wallace Fowler's Liberty Bank of Arkansas Inc. of Jonesboro, which will create the second-biggest bank headquartered in Arkansas.