The would-be buyers of the smallest bank in Arkansas have withdrawn their application to acquire Community State Bank of Bradley.
However, the move reflects a reshuffling of players, not a waning of the group’s interest in the $14.5 million-asset lender.
“We’re not done with it,” said Jeff Hobbs, who is leading the purchase effort. “We’ll regroup and refile.”
The acquisition group intended to pay $2.35 million for the Lafayette County bank, which operates with a staff of six. Community State recorded a $14,000 loss through the first nine months of 2017.
The proposed investors included Hobbs, a branch manager for First National Bank of Hughes Springs, Texas, and former president of Bloomberg State Bank in Atlanta, Texas; Taylor Chandler, senior vice president and commercial loan officer at City Bank in Plano; and Derick Murway, president of Montage Development, an upscale homebuilder in Southlake, Texas.
Hobbs said a new investor will be joining the group, and the acquisition will now involve acquiring the stock of the bank’s parent company, Allcorp Inc.
Allcorp entered bankruptcy court 18 months ago, filing Chapter 11 to stave
off a foreclosure by Little Rock’s Heartland Bank. Allcorp owes Heartland $1.3 million, a debt secured by the holding company’s ownership of Community State Bank.
If the $2.35 million price holds and the Heartland debt is repaid, about $1 million would remain for Allcorp shareholders.
Most of the stock is owned by Alex Golden, president of the holding company, and Lex Golden, Allcorp chairman and CEO. Each owns 39.28 percent, worth a combined $785,600 after the Heartland loan is repaid.
Most of that money would go to repay two loans totaling $537,037 and secured by the Allcorp stock. The loans are held by Riverside Bank of Sparkman (Dallas County), which also holds a second mortgage of $208,714 on Lex Golden’s Little Rock home.
All three Riverside loans are linked with the Chapter 7 bankruptcy of Golden and his wife, Ellen, listing assets of $1.9 million and total liabilities of $7.7 million.
Simmons Bank of Pine Bluff stepped into the shoes of Heartland in August after taking over the $182 million-asset bank’s capital stock through a foreclosure auction.
The stock was collateral for a Simmons loan to Heartland’s parent company, Rock Bancshares Inc.
“We think we can have this done by March,” Hobbs said of the Allcorp-Community State deal. “It’s going to benefit Simmons. I appreciate them being patient with us.”