The pending sale of three Mississippi County branches opens the door for the Arkansas exodus of SouthBank of Huntsville, Alabama.
The deal, awaiting regulatory approval, encompasses about $42 million in deposits and branches in Blytheville, Manila and Osceola.
The trio represents the fifth-largest franchise in the $552 million-deposit Mississippi County market and will provide new territory for the owner in waiting: Cross County Bank of Wynne.
The SouthBank branches will operate under the name that the $224 million-asset lender uses outside Cross County: First Commercial Bank.
The locations represent the bones of Osceola’s $37 million-asset Commonwealth Savings & Loan Association, acquired in December 1990, and the former Blytheville branch of Little Rock’s First Federal of Arkansas, purchased in July 1991.
The Commonwealth transaction was the second in a series of distressed thrift acquisitions used to assemble what would become SouthBank.
The effort began in May 1990 with Fidelity Federal Savings Bank of Corinth, Mississippi, and was followed in 1994 with First Federal Savings & Loan Association of Durham, North Carolina.
“Through successful strategic management, SouthBank and its holding company, Commonwealth Savingshares Corp., turned these acquired institutions into successful, profitable and community-oriented financial institutions.”
That current marketing claim stands in stark contrast to its financial track record.
SouthBank has not turned an annual profit since 2007, and combined losses have totaled nearly $22.2 million during 2008-14.
Looking deeper into its history, the lender has recorded losses in 13 out of the past 23 years. Mixed in with the steady flow of red ink is a 2010 cease-and-desist order by federal regulators.
Most recently, the thrift lost more than $1.7 million through the first half of 2015. After the Cross County deal closes, only four locations in Alabama will remain from multistate holdings that once included a Tennessee operation.
SouthBank reached a high point of $541.7 million in total assets with a staff of 343 in 2000. These days the waning count is $107.6 million supported by 53 staffers.