by Lance Turner
Posted 9/5/2013 07:42 pm
Updated 7 months ago
Simmons First National Corp. of Pine Bluff and Arvest Bank of Fayetteville have come forward as bidders for Metropolitan National Bank of Little Rock, according to legal notices and documents filed this week.
Simmons First has submitted a bid of at least $16.9 million to acquire Metropolitan National Bank of Little Rock, the minimum required to overbid the "stalking horse" bidder, Ford Financial Fund II of Dallas, the according to a document filed Wednesday with the U.S. Securties & Exchange Commission. Arvest's intention to bid was apparently filed with the Federal Reserve Bank of St. Louis sometime last week and disclosed in a legal notice placed in the Arkansas Democrat-Gazette's Thursday newspaper.
"Simmons First, if it is successful in its attempt to acquire MNB, will combine the operations of MNB with Simmons First National Bank and continue to provide the highest quality customer service throughout the combined service area," the publicly traded bank holding company told the SEC.
Metropolitan is being offered for sale through the bankruptcy of its holding company, Rogers Bancshares Inc. The historic auction, the first of its kind in Arkansas banking history, starts at 9 a.m. Sept. 9. A hearing before Bankruptcy Judge James Mixon is scheduled for Sept. 12 to consider approval of the winning bid.
It is unclear if any other companies have submitted bids. As a publicly traded company, Simmons is required to notify the SEC of any "material event" that investors should know about.
Arvest, the largest bank chartered in Arkansas, is privately held. The legal notice did include a dollar figure, sating only that Arvest "intends to apply to the Federal Reserve Board for permission to merge with Metropolitan National Bank."
Simmons, Arvest and any other bidders will compete for Metropolitan against Ford Financial Fund II, a $750 million investment fund out of Dallas led by Gerald J. Ford and Carl B. Webb, which has offered $16 million for 100 percent of the bank's stock. Metropolitan announced Ford's offer in July.
As the stalking horse in the bankruptcy reorganization, Ford Financial will have the opportunity to match a more favorable bid submitted by other entities. If Ford ends up being outbid, Rogers Bancshares will have to pay Ford a $640,000 "break-up fee," which will also require the judge's approval.
The Metropolitan auction comes after years of suffering from problem loans in northwest Arkansas, which led to almost $100 million in losses beginning in 2008. The bank remains under a supervisory agreement with the Office of the Comptroller of the Currency, filed in May 2008.
Metropolitan had worked since 2009 to find a partner to recapitalize the bank. Other banks also circled, conducting due diligence to possibly make an acquisition offer or be prepared to buy should the bank fail and the FDIC swoop in.
Ultimately, the bank reached a deal with the Ford Fund. On July 30, the fund said that, in addition to the $16 million in cash it offered for Metropolitan, it planned to make a $74.2 million capital contribution to the bank — enough to recapitalize it to the level required by federal regulators.
Metropolitan had assets of $1.03 billion and equity capital of $65.7 million as of March 31. It reported net income $1.28 million in the second quarter of 2013, $662,000 in the first quarter and $761,000 in the fourth quarter of 2012.
Simmons First National is a $3.6 billion financial holding company with 91 offices in 54 communities, in Arkansas, Kansas and Missouri.
Simmons, which trades on the Nasdaq exchange under the symbol SFNC, has made no secret of its desire to grow through acquisition. Last year, it won a bid to acquire Excel Bank in Sedalia, Mo., in an FDIC-assisted deal. It made two FDIC-assisted acquisitions in 2010, one in Springfield, Mo., and one in the Kansas City suburb of Olathe, Kan.
With assets exceeding $11 billion, Arvest is the largest bank in Arkansas. Owned by Wal-Mart founders the Walton family, it has more than 240 locations that are part of 16 locally managed banks in in Arkansas, Missouri, Oklahoma and Kansas.
Earlier this year, Arvest closed on its purchase of 29 bank branches in four states, including Arkansas, from Bank of America Corp.