When it comes to acquisitions, cash is king when a credit union is the buyer. With no stock to offer in a tax-sheltering exchange, credit unions have shown a willingness to pay more, even for smaller banks.
That generous disposition was on display when Barksdale Federal Credit Union of Bossier City, Louisiana, agreed to pay $11.8 million for the $65.2 million-asset HomeBank of Arkansas.
Using HomeBank’s equity capital of $7.4 million as a base, that price represented a transaction multiple of 1.6 times book value.
The Oct. 14 sale omitted the bank’s charter, which was relinquished to the Arkansas State Bank Department.
No one profited from that sale more than John Stacks, chairman, president and CEO of Peoples Home Holding Inc.
Stacks owned more than 54.2% of the corporation, HomeBank’s holding company. His 137,910 shares carried a value that topped $6.4 million in the transaction with Barksdale Federal.
Other Stacks family members with Peoples Home ownership included three sons. Ryan, a bank director and attorney, received $148,560. Court, a bank director and loan officer with HomeBank, collected $90,000. Garrison Stacks received $59,000.
Jerold Brock of Greenbrier held the second-largest position in Peoples Home, nearly 9% worth $1 million. Wilson Daniel Jaykosz Jr. and Alex Russell, both residents of Boca Raton, Florida, each owned 6.7% stakes worth $797,000.
Source: National Credit Union Administration
Other Peoples Home investors included two board members: Roy Montgomery, owner of Montgomery Engineering & Consulting in Greenbrier, 3% worth $358,600; and Tracy Bush, project manager with JFG Holdings LLC of Damascus, 0.76% worth $90,200. John Stacks is president and owner of JFG Holdings.
The last shareholder to join the transaction was John Pugh, who held the remaining 800 shares in the bank not owned by Peoples Home.
After People’s Home signed the sales agreement with Barksdale Federal in February, Pugh agreed to exchange his bank shares for holding company stock. That nearly 3.2% stake was worth $377,000 when the deal closed.
The extended Pugh family had substantial ownership in three Ashley County banks that sold during the past 25 years. Known for their extensive farming acreage and agribusiness holdings in southeast Arkansas, the Pughs helped establish the Bank of Parkdale in 1910, which morphed into Delta Trust & Bank in 1998.
They also had sizable stakes in two Portland banks 9 miles up U.S. 165 from Parkdale: Portland Bank, founded in 1900 and recast as Parkway Bank in 2004, along with HomeBank’s predecessor, established as Peoples Bank in 1908.