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Number of Smallest of the Small Banks Continues to Dwindle in Arkansas

3 min read
Smallest Banks Dwindle 128699
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Twenty years ago, banks with less than $70 million in total assets accounted for more than a third of the 205 banks based in Arkansas.

The 1999 census of the state’s small banks was pared from 79 to 22 a decade later.

Since 2009, continued attrition that extended to Arkansas banks of all sizes further reduced the headcount of the smallest of the small.

SEE: Small Arkansas Banks Plow Onward in Face of Attrition

Three of the 10 remaining banks under the $70 million mark are in various stages of exiting the scene as independent financial institutions.

Two south Arkansas lenders, Bank of Prescott and Crossett’s First State Bank, are in the process of selling in separate transactions.

The $67 million-asset Bank of Prescott is on track to merge before the end of the year with the $1.6 billion-asset Farmers Bank & Trust of Magnolia.

The $32.9 million-asset First State Bank remains on tap to sell to Capital Bancorp Inc. of Delhi, Louisiana.

In northeast Arkansas, Marked Tree’s First Delta Bank is less than a month away from rebranding after its $8.4 million sale to Armor Bank of Forrest City.

Four months after the sale, the conversion from First Delta to Armor is set for Nov. 15.

Built on the foundation of the $48 million-asset Forrest City Bank, Armor Bank investors led by the Mark Waldrip family have grown the small franchise in two years to more than $100 million in total assets through capital investment and moves into new markets.

In 2018, Armor made its first market leap from its St. Francis County base into Little Rock.

The First Delta acquisition will push Armor toward total assets of $160 million as the bank explores other opportunities around the state.

Chad May, CEO of Armor, isn’t averse to other small bank deals to expand the company.

“We would definitely be interested if it fit,” May said. “First Delta was a very clean, well-run bank with excess liquidity.

“Our goal is definitely to grow across the state. It’s a fluid situation. We’re looking while executing our business model.”

He adds that while Armor is working a plan to build a footprint around Arkansas, there remains space for small independent banks to operate successfully while traveling a less aggressive path.

“Scale certainly helps, but it depends on the business model,” May said. “If you have a long-tenured bank with a good solid base, you could be $55 million and be profitable, operating very efficiently and doing well for your shareholders.”

The winnowing wrought by bank consolidation during the past 20 years has cut into the number of locally owned lenders.

Since 1999, 32 communities scattered around the state lost their hometown bank as investors opted to cash out rather than push onward in the 21st century.


Smallest Banks in Arkansas

Smallest Banks Dwindle 128699
()
    Total Assets*
    June 30, 2019 June 30, 2009
1 Security Bank, Stephens $69,154 $40,423
2 Bank of Prescott** $67,003 $69,447
3 Bank of Lake Village $66,070 $57,821
4 Riverside Bank, Sparkman $61,270 $61,989
5 First Natural State Bank, McGehee $59,072 $46,553
6 First Delta Bank, Marked Tree# $58,380 $48,934
7 Bank of Bearden $52,930 $33,606
8 Merchants & Planters Bank, Clarendon $41,228 $36,725
9 First State Bank, Crossett** $32,974 $36,764
10 Community State Bank, Bradley $21,109 $18,941
* In thousands.
** In process of selling
# In process of folding into Armor Bank
Source: Federal Deposit Insurance Corp.

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