Home BancShares to Buy a Florida Bank in Chapter 11

Community banking

Capitol Bancorp Files for Bankruptcy Protection

The Lansing, Mich., company has turned to court to try and recapitalize itself. The move would leave all existing stakeholders with a 53% equity stake in the company. Capitol, meanwhile, is still searching for an investor to take the other 47%.

By Robert Barba

August 10
Community banking

For Arkansas' Centennial Bank, Florida Remains a 'Bit of Paradise'

Florida is still a prime destination for Centennial Bank in Conway, Ark., even as well-heeled acquirers move in and drive up bank prices.

By Rachel Witkowski

August 2
M&A

Small-Bank Chiefs Detect Signs of Life in M&A

Some sellers are asking for a lot and buyers have to be careful in vetting targets, but deal activity should increase given the economic pressures and the number of talks going on behind the scenes, some community bank CEOs say.

By Matthew Monks

July 27

Home BancShares (HOMB) in Conway, Ark., is getting creative as it continues to bulk up in Florida.

The $4.1 billion-asset company has agreed to purchase the common stock of Premier Bank in Tallahassee for roughly $1.4 million in cash. Premier's holding company, Premier Bank Holding, filed for Chapter 11 bankruptcy protection in Florida on Tuesday.

Home BancShares' attempt to buy Premier will be conducted through the bankruptcy process, and other banks are able file competing bids, Home BancShares said Tuesday in a filing with the Securities and Exchange Commission. Home BancShares, as the stalking horse, would be paid as much as $550,000 if another bidder were to prevail.

Filing for bankruptcy has been promoted as a possible way for bank holding companies to recapitalize, but it has rarely been used. Capitol Bancorp (CRBC) in Lansing, Mich., said last week that it had filed for Chapter 11 after failing to recapitalize its struggling banks and that it would continue to sell its banks to bring in capital. Nearly two years ago investors bought the banking unit of AmericanWest Bancorp in Spokane, Wash., out of bankruptcy.

The $282 million-asset Premier, which has six branches in Tallahassee and the surrounding area, has struggled with soured loans in recent years. It had nonperforming assets of 9.7% and a return on assets of negative 0.24% at March 31, according to the Federal Deposit Insurance Corp. Premier had a net operating loss of $177,000 in the quarter ended March 31. It had almost $6 million of outstanding common stock at March 31, according to the FDIC.

Premier would be merged into Home BancShares' bank, Centennial Bank, which bought six failed banks in 2010, all of them in Florida. Centennial in February bought 17 branches along the Gulf Coast and the Florida Panhandle from Park National (PRK) in Newark, Ohio, in a purchase-and-assumption agreement.

John Allison, the chairman of Home BancShares, had said his company was eyeing acquisitions. In recent months it had talks with four potential takeover candidates, and deals were likely with at least two of them, Allison said in July.

"We are excited about the opportunity to expand our footprint in the Tallahassee area," Allison said in a press release Tuesday. "This is a great fit and allows us to provide expanded service to our current customers. If approved, Premier customers will now have access to 28 Centennial locations throughout the Florida Panhandle."

The deal is expected to close in the fourth quarter.

Jackie Stewart

Executive Editor, American Banker Magazine

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