Offerings Surpass $700M in 2022

AcreTrader launched a $3,896,640-$4,329,600 offering for its first Tasmanian investment: Natone Creek Farm, 422 acres that has produced wheat, broccoli and carrots.
AcreTrader launched a $3,896,640-$4,329,600 offering for its first Tasmanian investment: Natone Creek Farm, 422 acres that has produced wheat, broccoli and carrots. (Acretrader)

Banking and real estate proved to be popular venues for in-state offerings that attracted more than $700 million in private investments during 2022. Five Arkansas bank holding companies together raised more than $226 million to further their financial ambitions.

Encore Bancshares Inc., led by CEO Chris Roberts, made the single largest private investment offering captured in the 2022 list. The parent company of Little Rock’s Encore Bank raised more than $171.8 million between May and December and saw its headcount of shareholders increase to 1,957.

Encore launched the private placement stock offering to raise $130 million and along the way bumped the ceiling to $200 million. That effort followed stock offerings of $50 million in 2019 and $90 million in 2021.

The sale of stock has helped fuel the growth of Encore into the sixth-largest bank in Arkansas by assets and No. 343 nationwide. The $2.7 billion-asset lender touts itself as the fastest organically growing bank in the country, a claim that has gone unchallenged.

“You won’t see us grow as much as we have in the past,” Roberts said. “We’ll probably be closer to $700 million to $1 billion in asset growth for 2023.”

In addition to boosting its legal lending limit, the influx of capital replenishes the treasury to meet the ever-increasing payroll that stood at more than $28 million and 306 staffers in 20 markets through the first nine months of 2022.

Encore is expanding its footprint of 13 full-service offices in Arkansas and Texas along with single locations in Springfield, Missouri; Tampa, Florida, and Charleston, South Carolina.

At last count, the bank is operating eight loan production offices scattered across seven states. Encore intends to convert those operations into full-service branches.

Those markets range from North Carolina in Charlotte, Raleigh and Winston-Salem to Colorado in Denver and Boulder. In between are offices in Arlington, Texas; Nashville, Tennessee; and Greenville, South Carolina.

“Now, we’re in the second phase,” Roberts said of the shift from building Encore’s capital and shareholder base. “We’re focused on earnings and building scale in each of those markets. But we won’t say we won’t go to any more markets.”

Instead of raising equity, four bank holding companies chose to raise funds through debt offerings: Chambers Bancshares Inc. in Danville, $30 million; First State Banking Corp. in Russellville, $10 million; M&F Financial Corp. in Dumas, $9 million; and Commercial Bancshares Inc. in Texarkana, $6 million.

The holding companies are associated with the $1.2 billion-asset Chambers Bank, the $500 million-asset First State Bank, the $226 million-asset Merchants & Farmers Bank and the $300 million-asset Commercial National Bank in Texarkana, Texas.

Mike Donnell, chief operating officer of Chambers Bancshares and president of Chambers Bank, said that of the $30 million raised about $19 million was pushed down to the bank as capital, about $8 million was used to pay off corporate debt and the balance was retained as cash.

Bank Holding Company Private Offerings in 2022

Bank holding company private offerings

1. Encore Bancshares Inc., Little Rock
2. Chambers Bancshares Inc., Danville
3. First State Banking Corp., Russellville
4. M&F Financial Corp., Dumas
5. Commercial Bancshares Inc., Texarkana

Real Estate Plays

Fayetteville’s AcreTrader amassed 41 different private investments during 2022 totaling $125.4 million.

All but one are tied to real estate acquisitions.

“The $21 million offering for AcreTrader Inc. is the Series B funding in the company,” said Michael Iseman, AcreTrader’s director of operations. “All the rest are separate investments in farms or timber tracts.”

Much of the corporate investment is devoted to advancing the technology tools on AcreTrader’s platform for mapping and analytics to make agri-related property investing even easier to understand and evaluate.

Starting with traditional cropland in the United States, the company’s real estate offerings expanded to include fruit and nut orchards in 2020-21 and timberland last year.

A $7.4 million offering launched in December is putting a 3,209 timbered tract in play in southwest Arkansas. The Sevier County property, known as Rolling Fork Timber, features a mixed stand of hardwood and pine.

While U.S. properties in the Midwest, Southeast and West still dominate AcreTrader’s menu, the company’s playing field has gone global with several investments on the other side of the world.

What began with Burnett River Citrus Orchards in 2021 led to AcreTrader’s fourth Australian deal: Natone Creek Farm, 422 acres that have produced wheat, broccoli and carrots.

The $3,896,640-$4,329,600 offering launched in December is the company’s first Tasmanian investment. 

“Most of the farms you see up on our platform are brought to us by farmers as a source of capital,” Iseman said. “For investors, it’s an opportunity to diversify.

“It’s exciting to see the pieces prove out. Land has been a good investment over time, especially in infla-tionary times. We’re encouraged to see the growth as more people get comfortable with real estate and technology.”

During 2022, the Tempus family of real estate investment funds raised $92.2 million spread across five portfolios.

“It was a big year for us,” said Dan Andrews, CEO of Little Rock’s Tempus Realty Partners. “We had more activity last year than we’ve ever had, and we hope it carries over into this year.”

The largest pool of money gathered was collected for Tempus Evergreen Inc., more than $23.4 million out of a $100 million offering.

The first property to enter the Tempus Evergreen portfolio was the 148,200-SF Transplace office building in Rogers. The $65 million acquisition in July was made in conjunction with the launch of the fund.

“We’re putting high-quality assets in there that we intend to hold for a long time for long-term growth and income,” Andrews said of the real estate investment trust.

Tempus Portfolio IV LLC completed a $20 million capital raise to purchase primarily industrial properties supported by long-term leases by small- and mid-sized companies across the country.

Tempus WW Portfolio LLC focused its $19 million investment on 15 truck service centers with a combined 458,297 SF sold and leased back by W.W. Williams of Dublin, Ohio.

The funding provided the equity for the $39.2 million purchase of the properties in Alabama, Michigan, Arizona, Georgia, Nevada, Ohio, South Carolina and Texas. 

The $16 million Tempus Eden Prairie SF-Huntington LLC was leveraged to buy and fund the redevelopment of the 259,000-SF Shutter-fly campus in Eden Prairie, Minnesota, a $23.4 million sale-leaseback deal.

The investment also included the $6.7 million purchase of the 129,826-SF former Huntington Bank office building in Columbus, Ohio.

In another sale-leaseback deal, Tempus New Albany LB LLC raised $12.7 million toward the $42 million acquisition of the 236,070-SF headquarters of specialty women’s retailer Lane Bryant in New Albany, Ohio.