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One Bank & Trust: Sell or Build Capital Base

2 min read

Little Rock’s One Bank & Trust continues to operate under an unusual arrangement more than four years after the ouster of its owner and CEO, Layton “Scooter” Stuart.

The $310 million-asset lender has no stockholders in the normal sense. The U.S. Treasury beneficially controls OneFinancial Corp., the bank’s insolvent parent company.

However, Uncle Sam has adopted a passive position regarding its control of the OneFinancial shares, assuming the role of a debtor rather than an equity holder.

OneFinancial is still on the hook to repay $17.3 million it received from Treasury’s Capital Purchase Program back in June 2009. Many a quarter has passed since One Bank delivered dividends toward that debt.

All told, Uncle Sam has received nearly $7.7 million in connection with OneFinancial through interest payments and a settlement with the estate of Stuart, who died in March 2013.

Money from his life insurance proved to be a fiscal lifesaver for One Bank, although operational losses remain a quarterly norm.

That situation isn’t expected to change in the final quarter of 2016.

“Well, we’re going to lose money, but we’re continuing to make progress,” said Jerry Pavlas, brought in as One Bank CEO after Stuart’s forced exit in 2012.

A capital raise or sale remains on the table of possibilities for the bank.

“We’re looking to get to 9-10 percent tier one capital,” Pavlas said.

Making that mark would require doubling its current tally, more than $13 million.

One Bank & Trust, Little Rock
Staff: 73
Full-Service Locations: Little Rock 7; North Little Rock, 1
(All dollars in thousands)

  Total Assets Equity Capital Noncurrent Loans Net Income
Sept. 30, 2012 $454,486 $26,770 $16,287 -$1,154
Dec. 31 $439,726 $22,872 $15,462 -$4,145
March 31, 2013 $423,098 $19,918 $16,908 -$2,954
June 30 $400,793 $18,746 $19,768 -$707
Sept. 30 $393,018 $16,404 $19,735 -$1,306
Dec. 31 $378,531 $14,737 $17,260 -$1,686
March 31, 2014 $377,206 $13,763 $8,113 -$1,195
June 30 $374,964 $16,792 $11,265 **$2,399
Sept. 30 $358,038 $16,855 $9,687 #$106
Dec. 31 $343,464 $15,578 $5,117 -$898
March 31, 2015 $332,652 $14,066 $5,611 -$1,474
June 30 $326,129 *$12,785 $6,416 ##$167
Sept. 30 $329,386 $18,939 $8,995 +$5,553
Dec. 31 $325,945 $17,599 $6,429 -$922
March 31, 2016 $324,365 $16,736 $5,975 -$1,356
June 30 $316,624 $15,081 $3,662 -$2,079
Sept. 30 $310,666 $13,576 $2,498 -$1,299

*Reflects net unrealized loss of $978,000 on available-for-sale securities.
**Reflects a $3 million extraordinary item, money released from seized assets of Scooter Stuart held by the U.S. government. The cash reimbursed One Bank for premiums paid on the life insurance policy of Stuart, former owner and CEO of One Bank.
#Reflects a $1 million settlement the bank received in a lawsuit against Travelers Indemnity Co., an affiliate of St. Paul Mercury Insurance Co. The dispute was tied to One Bank’s efforts to collect $2 million on its financial institution bond for coverage that included “dishonesty of employees.”
##Reflects a $403,000 gain on the sale of mortgages on the secondary market.
+Reflects a $6,916,000 extraordinary item, final settlement release of seized assets of Scooter Stuart held by the U.S. government.

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