New family ownership and the acquisition of a new headquarters mark 2023 as a momentous year for Stone Bank.
The cash sale of the bank, which closed in April at an estimated $88 million, ushered in Randall, Kendall and Michael Combs as board members and owners. The brothers acquired sole family ownership of the $741 million-asset bank through their MO/ARK Bancshares Inc. of Hollister, Missouri.
The Combs brothers bring to the table a legacy of small-town banking founded in southern Missouri and a resume of hotel and commercial real estate development.
The trio own 100% of three Missouri banks through their Alton Bancshares Inc.: the $167 million-asset Table Rock Community Bank in Kimberling City, $150 million-asset First Community Bank of the Ozarks in Branson and the $117 million-asset Bank of Alton. They plan to merge the Kimberling City and Branson banks in November under the Table Rock name.
The brothers own more than 95% of another lender: the $211 million-asset Bank of Grandin. All told, the Combs family of banks operates a dozen offices in southern Missouri.
What are the aspirations of the Combs brothers for their Arkansas acquisition, which more than doubles the size of their combined bank holdings?
“We haven’t talked specifics about entering new markets, but we’ve had conversations about expanding in the future,” said Kendall Combs, chairman of the board at Stone Bank as well as Alton Bancshares.
For now, an immediate focus is getting things squared away at the bank’s new Little Rock headquarters acquired in June.
“We’d like to be in it yesterday,” Combs said.
But it likely will be a year from now before the makeover of the former Bank OZK offices at 12615 Chenal Parkway is complete. More on that $9.5 million purchase later.
While the Little Rock staff is starting the early process of pivoting to new quarters, no transition was necessary for the bank management team after the sale to the Combs brothers.
The executive leadership remains intact with Marnie Oldner as CEO, Nick Roach as president and chief lending officer and Stephen Ragland as CFO.
“The big picture is we’d like for her to stay a long time,” Kendall Combs said of Oldner. “She hasn’t given us a timeline to retire, and we’d like to keep her for as long as we can. They make a really good team, so we’d like to keep the team together.”
Combs made the rounds to the bank’s Little Rock, White Hall, Mountain View, Harrison, DeWitt and Gillett offices to meet and greet staffers after striking the deal to buy the bank.
“We’re super impressed with the management team that Marnie and Nick put together,” he said. “All of them are excited to come into work every day, and it seems like they would jump through a wall for Marnie and Nick.”
While visiting the six locations, Combs assured the staff that there would be no major changes at Stone Bank as part of the new ownership.
“He wanted to make sure everyone was comfortable at that point in the game,” Ragland said. “His communication was that his family is buying a great bank and that they wanted to leave it alone.”
The Combs brothers are second-generation bank investors. Their father, Donald, worked his way up from teller to CEO during his 12 years at the Bank of Thayer. He joined Bank of Grandin in 1973 as president and CEO and continued working there until his retirement in 2004.
“My dad was in banking for 60 years before he passed away,” Kendall Combs said.
Donald Combs led the family into ownership at Alton Bank in 1988 followed by First Community Bank of the Ozarks in 2012. He served on the board of directors at both banks.
The company purchased Table Rock Community Bank in Kimberling City, 18 miles west of Branson, in June 2022 — a deal that led to the Stone Bank acquisition.
Little Rock’s DD&F Consulting Group, which had a hand in the Table Rock transaction, contacted Kendall Combs about the Arkansas opportunity.
“They called one day and said, ‘I don’t know if you would be interested or not …,’” said Combs, who stays busy between banks and hotels.
In 1993, he struck his first hotel deal with the Gazebo Inn, a 73-room property on the Branson strip next to the Andy Williams Theater. “It got out of hand from there,” Combs said of his hotel investing.
He has built, bought and sold 40 hotels over the past three decades by his count.
“We don’t have as many as we did,” Combs said. “At one time, we had seven hotels in Branson. In December, we sold our last one, the 472-room Radisson Hotel Branson. It’s the first time I haven’t had a hotel in Branson in nearly 30 years.”
These days, the Combs portfolio consists of 10 hotels with two more in development. The properties in Texas, Colorado and Oklahoma operate under the Hilton, Marriott and IHG banners.
Randy Dennis, president and CEO of DD&F Consulting, considered it a pleasure doing business with Kendall Combs.
“His family are just delightful folks, and they run four successful banks,” Dennis said.
“He is just a great person to work with. He’s straight up, friendly and an open book when you talk to him.
“He wants to do a fair deal for everyone and not rip anyone’s head off. He’s tough when he needs to be but will give when he needs to give.”
Ready to Cash Out
Chartered in Mountain View and headquartered in Little Rock, Stone Bank was built on the foundation of the smallest bank in Arkansas: First National Bank of Altheimer.
The bank registered total assets of $10.7 million when it sold to a new group of investors in April 2009.
Founded in its namesake Jefferson County community in April 1955, the new investors renamed and relaunched First National as Ozark Heritage Bank and moved its charter 140 miles north to Mountain View.
Since undergoing an ownership overhaul and capital infusion 14 years ago, the lender has grown to rank among the 25 largest in Arkansas. Stone Bank stands at No. 24 among 82 banks chartered in Arkansas, whether measured by assets ($741 million) or deposits ($582 million).
Since reporting a record profit of $11.2 million last year, the bank tallied net income of nearly $4.4 million through the first half of 2023.
After enduring a stumbling start of profitability, boardroom drama, enhanced regulatory scrutiny and a shakeout of investors, the bank hit its stride in 2018 followed by four successive years of record profits.
“Investors were ready to get cashed out,” Oldner said of the decision to market the bank in 2022.
Helping accelerate Stone Bank’s growth was the nearly $10.3 million stock swap-cash purchase of DBT Financial Corp., parent company of the $88.9 million-asset DeWitt Bank & Trust completed in September 2019.
A capital raise of $12.5 million in 2018 set the stage for the bank’s golden run during 2019-22.
“We talked about a vision for the next five-10 years,” Oldner said. “Do we operate as is or take more opportunities to expand? Expand. They liked that.”
Oldner sold investors on achieving a goal of growing total assets to $500 million by 2020. In the second quarter of that year, the bank reached $560 million, double its year-end 2017 total.
“I don’t think they were disappointed,” said Oldner, who oversaw the rebranding to Stone Bank in August 2015 and the financial turnaround that followed.
J.T. Compton, an original investor in Ozark Heritage/Stone Bank, wondered what he had gotten himself into when the venture started off so poorly.
“It looked like we weren’t going to be able to turn it around,” said Compton, whose family held a controlling stake in the bank.
“Looking back on it all, if I did not know what I know now, I would’ve been tickled to death to get out of it.
“We had problems at first but ended up with a good management team that stayed with us.”
Before taking the leadership reins in 2011, Oldner first worked with the bank in a consulting role, providing management assessment.
“That’s when I became involved with the bank,” she said. “A year later, I agreed to come on [as CEO].
“In the beginning: We can get over this problem. Anything is overcomeable. You just have to work at it. I’m real proud of what we’ve been able to do.”
Stone Bank acquired the former Bank OZK Building to meet its current space needs but also to accommodate future growth.
“What’s our workforce going to look like six years from now?” said Kirby Williams, EVP of marketing and retail banking at Stone Bank.
The Little Rock operation is home to 60 staffers who work out of 18,000 SF of leased space in the Three Financial Centre Building at 900 S. Shackleford Road.
With 38,710 SF under roof, the new west Little Rock quarters could eventually house as many as 100 on the first two floors.
Shelter Insurance operates a claims office on the third floor, which it will continue to lease for another six years.
Stone Bank took possession of the property on Sept. 15, and early birds are already setting up shop in the former Bank OZK lobby. The facility sports four drive-through lanes and a 24-hour automated teller.
Bank officials hope to have the full migration of staffers complete in 12 months or so.
The facade will undergo alterations that will encompass constructing a new glass-enshrouded entryway, adding more windows on the south side of the building and changing the roof color from Bank OZK red to gray.
“The changes will be striking,” Williams said.