Consolidation: 2 Banks Form $246M Lender

Bank of Salem (Google Maps)

Sister banks owned by Smith Associated Banking Corp. of Hot Springs are merging operations to create a $246 million-asset lender.

The $62.8 million-asset Security Bank of Stephens (Ouachita County) will be folded into the Bank of Salem (Fulton County).

The lone Security Bank office will keep its name and operate as a branch of the $183.3 million-asset Bank of Salem, established in 1908.

Ownership of the banks is split 50/50 between G.R. “Buck” Smith, president of both banks, and Courtney B. Miller of Hot Springs.

Originally chartered as Stephens Security Bank in 1946, the financial institution holds a distinction as the only bank formed by a loan courtesy of the G.I. Bill. That $5,000 loan provided naval veteran Floyd Bryan with the capital to launch the bank.

Texas Duo

Little Rock’s Bank OZK is expanding its branch network in Texas with a pair of locations. The $36 billion-asset lender is redeveloping offices once occupied by competitors in Austin and Houston.

A former JP Morgan Chase Bank branch at 3520 W. Slaughter Lane will become Bank OZK’s second full-service office in Austin. The $47.8 billion-deposit market is home to a competitive field of 55 banks that include three Arkansas lenders.

Of the three, Bank OZK holds the biggest share of deposits with $90.4 million (0.19%),  followed by Little Rock’s Encore Bank with $72.3 million (0.15%) and Conway’s Centennial Bank with $32.7 million (0.07%).

The largest Arkansas bank is working on its fifth location in the $242 billion-deposit Houston market. Bank OZK will operate at 14561 Northwest Freeway, a former branch of Beaumont’s Community Bank of Texas.

Among 75 banks in the market, two Arkansas lenders are on the ground in Houston: Bank OZK, with deposits of $264.7 million (0.11%), and Simmons Bank of Pine Bluff,  with deposits of $168.6 million (0.07%).

The addition of the new Austin and Houston offices will boost Bank OZK’s count of full-service locations in Texas to 24.

Bank OZK entered the Houston and Austin markets through a $21.5 million purchase on March 6, 2014. The doorway was the $300 million-asset Bancshares Inc. and its Omnibank franchise.