Benefit Bank Transaction Set At $32M

The proposed sale of Fort Smith’s Benefit Bank represents a cash transaction of nearly $32.2 million. Ironhorse Financial Group Inc. of Muskogee, Oklahoma, intends to merge the $195 million-asset lender into its Armstrong Bank, which operates 17 full-service locations in eastern and northern Oklahoma.

The combined assets of the two banks total more than $857 million. The purchase of Benefit is expected to close in March or April. Plans call for a name change to Armstrong Bank before the end of May.

Gary Andrews, regional president with Armstrong Bank, will oversee the Arkansas operations.

Andrews began his banking career with Armstrong as a management trainee in 1984.

Armstrong is founded on the 104-year-old charter of Vian State Bank. The current name refers to its chief stockholder and chairman of the board: Dr. Sinclair Armstrong Jr.

The retired Fort Smith urologist controls 68 percent of Ironhorse Financial, which also owns the $466 million-asset Republic Bank & Trust of Norman, Oklahoma.

All told, Ironhorse will have total assets of more than $1.3 billion after the Benefit Bank acquisition.

Benefit was founded as a federal savings bank in November 1999 and converted to a state bank last June. There will be no carryover from its board of directors to Armstrong Bank.

Benefit Shareholders

Benefit Bank is owned by Benefit Financial Group Inc., whose ownership is dominated by Fort Smith folks.

Among its roster of investors are alumni of Superior Federal Bank, acquired in 1992 by Boatmen’s Bancshares Inc. of St. Louis.

The list of Benefit Financial shareholders includes:

• Lyn Coleman, a 10.76 percent stake worth $3.46 million.
• Leo Anhalt, president of the general contracting firm of SSI Inc., and his wife, Barbara, a 6.58 percent stake worth nearly $2.12 million.
• Bruce McNeill, former chairman and chief executive officer of Superior Federal Bank, and his wife, Jean, a 6.41 percent stake worth $2.06 million.
• Rod Coleman, president of ERC Properties Inc., and his wife, Kathy, a 6.25 percent stake worth $2.01 million.
• Joe Edwards, president of Benefit Bank and a former president and CEO of Superior Federal, and his wife, Judy, a 5.68 percent stake worth nearly $1.83 million.
• Carl Friddle, dentist, and his wife, Sandra, a 5.63 percent stake worth $1.81 million.
• Keith Gibson, president of Lavaca Telephone Co., a 3.21 percent stake worth $1.03 million.
• George Jacobs, director at Benefit Financial, a 2.81 percent stake worth about $904,000.
• John Taylor, principle with Sterne Agee & Leach, a 2.79 percent stake worth $897,500.
• Alan Hill, chief financial officer and senior vice president of Benefit Bank, a 0.55 percent stake worth about $177,000.

Historical footnote: The purchase of the $700 million-asset Superior Federal by Boatmen’s was a voluntary supervisory conversion that involved a $28 million capital infusion.

The Superior Federal franchise is now part of Arvest Bank of Fayetteville, the result of a conventional $211 million cash transaction in 2003 through affiliates of Arvest Bank Group.

*All dollars in thousands