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Heartland Bank Braces For 2016

2 min read

Heartland Bank of Little Rock and its parent company, Rock Bancshares Inc., have started 2016 amid changes in management, board membership and more.

Attention has turned from delivering dividends to building capital as nonaccrual loans mushroomed from $3.6 million in the first quarter of 2015 to more than $34 million at year-end.

Heartland recorded a nearly $4.7 million loss in the fourth quarter. Turmoil in the energy sector and issues with a couple of local borrowers are bruising the bank’s loan portfolio, according to Richard O’Brien, chairman, president and CEO of Heartland Bank.

Walter Quinn, a leading shareholder at the $241 million-asset bank, stepped down as chairman, president and CEO of Rock Bancshares as well as director at Heartland.

O’Brien took over Quinn’s roles at the holding company on an interim basis.

“He’s taken an indefinite leave of absence to focus on some of his personal business issues,” O’Brien said. “We fully expect him to be back.”

Quinn was unable to work out a settlement to satisfy delinquent debts associated with soured oil patch investments. That impasse resulted in Prosperity Bank of El Campo, Texas, filing a $4.9 million consent judgment against Quinn.

Also named in the Nov. 13 judgment are Quinn Investments Ltd., Quinn Management Co., RX Finance LLC, Rock Exploration LLC, Rock Oil & Gas LLC, QF Holdings LLC, The Quinn Living Trust and the Walter Quinn Irrevocable Family Heritage Trust.

Preceding Quinn’s hiatus was the exodus of three directors last year.

Dr. Mark van Overbeek resigned on June 12 as chairman of Heartland Bank and as a Rock Bancshares director.

Overbeek, of Incline Village, Nevada, held a 17.3 percent stake in Rock Bancshares that was second only to Quinn’s 52.3 percent.

Mark Brockinton, managing director of Aon Risk Solutions Transportation & Logistics Practice in Little Rock, resigned as a director at Heartland and the holding company on Sept. 29. Steve Didion, a California investment banker, followed suit on Dec. 31.

New directors at both the bank and the holding company are Judy Lawton, CFO and chief operating officer at Heartland; and Matt Keil, partner at the Texarkana law firm of Keil & Goodson.

O’Brien said that except for Quinn, the other changes had been planned for more than a year. Accompanying the change of directors was a suspension of dividends as Heartland braces for loan problems.

“There will be no shareholder dividend for the quarter ending Dec. 31, 2015, and I feel it unrealistic to expect any shareholder dividends over the next couple of quarters,” O’Brien told shareholders in a letter last month. “For a company that has prided itself on never having missed a quarterly dividend, that is a bitter pill to swallow.”

Never is a mighty long time.

According to regulatory filings, Heartland had an impressive 38-quarter run of delivering dividends totaling more than $33.2 million.

Heartland Bank by The Numbers

  Total Assets* Total Loans* Bank Dividends* Net Income*
2014 $234,403 $182,947 $8,273 $7,431
2013 $208,005 $173,598 $7,065 $6,383
2012 $194,988 $151,853 $4,468 $5,346
2011 $186,005 $147,410 $3,896 $3,670
2010 $162,438 $128,377 $1,101 $2,857
2009 $133,933 $103,140 $1,183 $1,802
2008 $111,472 $79,202 $1,186 $893
2007 $100,917 $66,634 $981 $1,241
2006 $88,563 $56,990 $581 $1,401

* In thousands

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