Trio Gathers New Money to Relaunch Capital Bank as Encore

Trio Gathers New Money to Relaunch Capital Bank as Encore
An executive triumvirate is guiding the transformation of Capital Bank into Encore Bank. From left, Chris Roberts, chairman and CEO; Phillip Jett, vice chairman and president; and Burt Hicks, senior executive vice president, chief operating officer and general counsel. (Karen E. Segrave)

A procession of meetings has filled the past 40 days for Chris Roberts, with many more to come. In addition to assembling an executive team and hiring more staffers at Capital Bank, Roberts has busied himself calling on prospective investors.

As chairman and CEO, he is leading the campaign to rebrand and relaunch the Little Rock bank with a $50 million stock offering. The 50-year-old banker considers his recent move from Simmons Bank to Capital Bank to be a curtain call on his 27-year lending career.

Along the way, Roberts was president of Delta Trust & Bank in Little Rock, founding CEO of Little Rock’s Centennial Bank and most recently EVP of wealth management and private banking at Simmons.

“This is my last performance,” Roberts said, a phrase that inspired the bank’s pending name change.

He intends to deploy the new moniker and new money to transform the $161 million-asset Capital Bank into a large community bank, Encore Bank.

“We’re trying to raise capital all over Arkansas,” said Phillip Jett, who joined Roberts at the bank in March as vice chairman and president.

Visits to Dallas and Nashville, Tennessee, are on tap to court new investors as well. The plan is to expand the shareholder roster from a couple dozen to between 300 and 400.

“We’re calling on our small army of investors to help drive business to us,” Roberts said. “Our model is to leverage our shareholders and our team’s contacts to grow the bank.”

Biggest Shareholders
Capital Bancshares Inc.
Boyd Rothwell 23.7%
Warren and Martha Stephenson 14%
Claude and Mary Ballard 9.4%
M&P Community Bancshares Inc.* 7.7%
Joseph Park IRA and J&S Park Investment Co. LLC** 6%
Jack Hartsell 5.3%
Dr. Joseph Murphy 5%
*Holding company of Newport’s Merchants & Planters Bank
**Combined ownership stake

Little Rock investors dominate Capital Bank’s current roster of stockholders that includes two banking organizations: M&P Community Bancshares Inc. and Riverside Bank of Sparkman (Dallas County).

M&P, holding company for the $264 million-asset Merchants & Planters Bank of Newport, owns 7.7 percent. The $62 million-asset Riverside Bank holds a 2.7 percent stake in Capital Bancshares.

As part of the Capital-to-Encore transition, Roberts and Jett will buy a large portion of shares held by the bank’s largest stockholders: Boyd Rothwell and Warren Stephenson. Together, they hold a near 40 percent stake in Capital Bancshares, the bank’s parent company.

Roberts first met with Stephenson and Rothwell to talk about joining the bank to do some strategic work. Those talks evolved into the current reshaping of Capital Bank.

Roberts marks the fifth executive to lead the bank during its 21-year run.

Last year, the top post had a revolving-door quality as three bankers came and went at Capital Bank. In June, Troy Duke succeeded his twin brother, Tracy, who had replaced Kyle Patton earlier in 2018.

Patton had held the posts of president and CEO at Capital Bank since early 2003. He was promoted from senior vice president to replace the bank’s founding president and CEO, Joe B. Ford.

Capital Bank will open a second office in May to expand beyond its west Little Rock headquarters. The 922-SF leased facility is at 5100 Kavanaugh Blvd. in the Heights area of Little Rock

“We will be branch light and relying on technology,” Roberts said of plans to selective roll out brick and mortar.

“We want to take the bank to our customers through an app online or meet them with a branch,” added Burt Hicks, senior EVP, chief operating officer and general counsel at Capital Bank.

Before moving to Capital, Hicks was president and CEO of the Simmons First Investment Group. Jett was president of IberiaBank’s central and northwest Arkansas markets.

Roberts, Jett and Hicks all sported blue wristbands with the “We win together” credo during a visit. The elastic message reflects the group’s efforts to establish a new mindset with a staff that has grown from nine to 20 since January.

“We have the opportunity to really hone in on our culture,” Jett said. “We want to make sure that every staffer has an ownership stake in the bank. This will be literal shares, so that their efforts are aligned with ours.”

Banks Take Different Paths

Little Rock’s Capital Bank is one of two banks remaining from the six-member Arkansas de novo class of 1997. Capital began operations Sept. 8, the fifth of the new lenders to open shop that year.

Investors opened their wallets to the tune of $28 million to capitalize the six new banks during 1996-97. Capital Bank was launched with $3.9 million.

Four classmates sold while Batesville’s First Community Bank and Capital Bank have followed very different growth trajectories.

Total assets at First Community stood at $64 million at the end of its first full year of operation in 1998. At year-end 2018, the bank’s tally stood at $1.4 billion.

Capital Bank reported $37 million in total assets at Dec. 31, 1998. The bank finished 2018 at $161 million.

New Banks Opened in 1997
In chronological order by opening date

    Capitalization CEO
Jan. 27 Pinnacle Bank, Little Rock $7.3M Bob Althoff
May 5 Alliance Bank, Hot Springs $4.1M David Bartlett
July 25 River Valley Bank, Russellville $3.3M James Biggers
Aug. 4 First Community Bank, Batesville $3.4M Dale Cole
Sept. 8 Capital Bank, Little Rock $3.9M Joseph B. Ford
Oct. 30 Community First Bank, Harrison $6M William King Gladden