Magnolia Banking Makes Texas Play in $31.8M Deal

A $31.8 million intrastate transaction will give Magnolia Banking Corp. a presence in Texas and push its asset total to about $1.2 billion.

The holding company of $884 million-asset Farmers Bank & Trust of Magnolia should complete the purchase of First National Bancshares of Hempstead County Inc. of Hope before year’s end. First National is the parent company of the $310.3 million-asset 1st Bank of Texarkana, Texas.

The five biggest First National shareholders will divvy up $30.4 million of the all-cash deal: Bruce Gottwald Jr., 57.61 percent worth $18.4 million; John Hays, 12.27 percent worth $3.8 million; Thomas Hays III, 11.82 percent worth

$3.7 million; Daniel Hays 2012 Trust, 10.69 percent worth $3.3 million; and Betty Jo Hays, 4 percent worth $1.25 million.

The transaction represented a book value multiple of about 1.35 when it was announced earlier this summer.

The Texas bank is built on the bones of three Arkansas banks and is the product of a 2006 restructuring that entailed relocating and renaming an Arkansas bank charter and consolidating with two others.

The charter of First National Bank of Lewisville was moved to Texas and merged with the operations of First National Bank of Hope and Bank of Blevins.

1st Bank, Texarkana, Texas
Total Assets: $310,297
Net Income: $2,724
Dividends: $1,600
Staff: 98
Full-service locations: Hope, Blevins (Hempstead County), Lewisville (Lafayette County) and Texarkana in Arkansas and Texarkana and New Boston in Texas.

(All dollars in thousands)