Bank Buy Pushes Total Assets Beyond $210 Million at Allied Bank

The father-son banking team of Lex and Alex Golden last month completed the purchase of Community State Bancshares Inc., holding company for the $24 million-asset Community State Bank of Bradley (Lafayette County).

The $3.15 million buy pushed total assets controlled by the Golden family north of $210 million when combined with their Allied Bank franchise. The conventional bank acquisition is a rarity these days in a market dominated by FDIC-assisted transactions.

"I bet that’s the only bank to sell in that fashion this year," said Lex Golden of the Community State deal.

The purchase coincides with an expansion of Allied Bank, which has enjoyed a record-setting period of growth since 2007. Total assets increased nearly 45 percent during the 30 months ended June 30.

Alex Golden, CEO of Allied Bank, attributes much of the $58 million windfall to the financial shake-up at other lenders.

Allied was among the beneficiaries of market flux after some banks were unable to renew funding agreements with customers or were forced by regulators to pare loan portfolios.

The addition of business from competitors curtailing their lending activity joined clientele drawn to Allied’s blend of high-tech, old-style banking.

"We enjoy figuring out deals that other people don’t have the time or inclination to do," said Alex Golden.

"We make a living off the crumbs from other people’s tables," Lex Golden said.

Allied Bank is on track for a show-stopping year, generating a $1.8 million profit through the first half of the year. The lender has produced annual profits ranging from $1.2 million to $1.8 million since 2005.

Allied Bank is completing a branch location in the Heights area of Little Rock and should have a loan production office open in Jacksonville before year’s end.

Alex Golden believes the visibility afforded by the 5701 Kavanaugh Blvd. location, which doubles as a storefront for his mother’s Little Rock antique business, helped draw business when it opened 18 months ago. The mercantile vibe of the bank-shop combo is in keeping with the small-town motif of Allied’s holdings.

For now, ownership of the Bradley bank remains separate but likely will be rolled into Allied Bank’s Acme Holding Co. eventually. Allied Bank is founded on two venerable small-town lenders: Bank of Mulberry (Crawford County), purchased in 1986, and Bank of Mansfield (Sebastian County), bought in 2001.

Full-service branches were developed in Little Rock (1999), Ozark (2002), Alma (2005) and Van Buren (2006). The addition of five Community State staffers increases the total employee count to 59.

"We’re pretty efficient," Lex Golden said. "We don’t have a big office."

The ownership structure of Acme Holding is dominated by an employee stock ownership plan, which controls nearly 80 percent of the stock. When employees retire, their stake in the ESOP is repurchased by Acme.

"Everybody who works at the bank owns a piece of the bank," Lex Golden said. "It’s a helluva 401(k)."

Allied Bank reported net equity of nearly $15.5 million as of June 30.

Internet Banking Pioneers

Allied Bank was in the forefront of Arkansas lenders to roll out Internet banking, with JustBankIt.com in 2000. Alex Golden said Allied remains committed to cyberbanking although it hasn’t developed into as big a component of operations as envisioned 10 years ago.

"It’s a good tool, but it still has a few drawbacks," Golden said. "It’s a good information gatherer and way to communicate. I’m looking to expand in that area. Technology is a big part of our business. It’s nice because we’re small enough that change isn’t difficult. It’s not like moving heaven and earth."

Allied launched a Little Rock mortgage lending and real estate title company subsidiary with a twist in 2008. However, Mortgage Bank of Arkansas, led by Walt Terry and Conan Watters, closed its doors after only two years.

The venture operated on a commission structure double that of industry averages with a business model similar to that popularized by the Re/Max realty franchise, geared to attract high-volume producers.

"The landscape had changed so much [Terry and Watters] decided to join a larger outfit," Alex Golden said. "But the outcome could’ve been worse. It ended up being two years of work and not making much money, rather than two years of work and losing money."

Family Choice

Alex Golden succeeded his father as CEO in January 2008 after serving as president since August 2000. These days, Lex Golden carries the titles of chief lending officer and advisory director.

While in grad school at the University of Arkansas at Fayetteville, Alex Golden was mulling over his career options when his father approached him.

"I actually applied around, and he asked me if I wanted to do something with him," Alex Golden said. "I told him I wanted to think about it.

"I remember him looking at me funny and saying, ‘You got to think about it?’"

The younger Golden weighed the options of striking out on his own or fast-tracking his business experience through the family business.

The decision to join the bank allowed him the opportunity to make his mark on the company by championing technological efficiencies, and it paid dividends that he didn’t anticipate.

"What I’ve enjoyed most is working with my dad and getting to know him at a level most don’t get to know their parents," said Alex Golden.

His sister, Amy, contributes to the company in an accounting role he once held. The siblings both worked in Mulberry as part of the business before returning home to Little Rock.

Alex Golden also lived in Fort Smith for five years, enabling him to more efficiently split time between the Mulberry and the then-newly acquired Bank of Mansfield.

In 2003, the Goldens made an unsuccessful run to expand north and enter the Madison County market. That deal involved purchasing majority ownership of Madison Corp., holding company for Madison Bank & Trust of Kingston.

Instead of Acme purchasing the 67 percent stake held by Roland and Rose Willshire, a lender in neighboring Carroll County ended up buying Madison Corp.

First National Bank of Green Forest paid about $3.2 million for the $29 million-asset financial institution. Lex Golden held a 14.15 percent stake in Madison Corp., worth about $452,800.

Seven years earlier, the Goldens had come close to selling Bank of Mulberry to Chambers Bancshares of Danville, led by Johnny Chambers.

"Through a series of events, we decided not to do it, and Johnny was gracious to let us out of the deal," Lex Golden said. "We rededicated ourselves to growing the bank."

Alex Golden believes the company is poised for continued success with its small-town base backed by modern technology. Helping position Allied Bank for the future has provided him with satisfaction when looking back on his choice to enter banking through Bank of Mulberry.

"I’ve never regretted it," Golden said. "It’s made for a pretty interesting career."

Allied Bank

                    *2010            2009         2008         2007        2006         2005

Total assets   $189,233    $174,126    $143,454   $130,951   $121,471   $119,199

Net income      $1,872       $1,736       $1,864      $1,880      $1,426      $1,244

*As of June 30. All figures in thousands.

Locations                                                 

Mansfield                       Jan. 1, 1901

Mulberry                        March 4, 1902

Little Rock Downtown      March 8, 1999

Ozark                             Aug. 20, 2002

Alma                              May 4, 2005

Van Buren                      March 20, 2006

Little Rock Heights          March 9, 2009

July 1986

Lex Golden, CEO and president of North Little Rock’s First American Bancshares Inc., buys the Bank of Mulberry (Crawford County) for $2.3 million. The deal is a spinoff from Little Rock’s Hunt & Howell Bancshares Inc. acquiring First American Bancshares, which briefly owned the Bank of Mulberry.

Hunt & Howell Bancshares, led by trucking magnate J.B. Hunt and M. David Howell, retains the $240 million-asset First American Bank of North Little Rock and two $50 million-asset First American bank charters in Little Rock and Hot Springs.

At the time of the transaction, Bank of Mulberry had total assets of less than $20 million.

September 1996

A deal to acquire the $25 million-asset Bank of Mulberry by Chambers Bancshares of Danville is called off. The $3.27 million purchase already had received regulatory approval, but both parties decided to not follow through during the 90-day waiting period. The proposed acquisition included paying Lex Golden a five-year consulting agreement of $720,000 and a five-year non-compete agreement of $600,000.

Golden remains the majority stockholder in Acme Holding Co., which controls Bank of Mulberry.

March 1999

Bank of Mulberry opens a full-service branch at 1022 W. Capitol Ave. in downtown Little Rock, possibly the first Arkansas bank to take advantage of the statewide branching law.

October 2000

Bank of Mulberry launches JustBankIt.com, among the first online banking platforms in Arkansas.

September 2001

Acme Holding Co., parent company of Bank of Mulberry, buys Mansfield Bankstock Inc. for $6.8 million. The corporation is the holding company of the $38 million-asset Bank of Mansfield (Sebastian County).

April 2002

Bank of Mulberry and the Bank of Mansfield are merged to form Allied Bank.

September 2010

Allcorp Inc. of Little Rock, an affiliate of Acme Holding, buys Community State Bancshares Inc. for $3.1 million. CSB is the holding company for the $24 million-asset Community State Bank of Bradley (Lafayette County).