Bank deposits in Arkansas grew by 5 percent in the 12 months that ended June 30, according to the annual summary of deposits released Sept. 28 by the Federal Deposit Insurance Corp., a pace somewhat slower than the 5.4 percent growth in bank deposits nationally.
Total deposits statewide reached a record of $56.5 billion even as the number of separate bank charters and branch locations continued to decline.
Arvest Bank of Fayetteville, which achieved the top position in the state as measured by deposits in 2007, continued to stretch its lead by adding almost $523 million in deposits in a single year. Only 18 other banks in the state have that much in total deposits.
But an even bigger gain — $785 million — pushed Bank of America, the North Carolina powerhouse, from the fourth position in Arkansas in mid-2014 to No. 2 this year. BOA leapfrogged over Regions Bank of Birmingham, Alabama, and First Security Bank of Searcy. Despite a 4 percent drop in deposits, Regions retained a small lead on First Security, which continued to make deposit gains.
Bank of the Ozarks also experienced huge in-state deposit growth: $605 million, up almost 22 percent — and all of that and more was gained at the publicly traded bank’s main office in Little Rock.
Tyler Vance, chief operating officer for Bank of the Ozarks, said the bank has been adding thousands of checking accounts in Arkansas. But the whopping growth in deposits at the main office has more to do with winning bids on public deposits from state agencies and municipalities across the state, he said.
“With loan growth and additional loans being made, deposits tend to follow,” Vance told Arkansas Business shortly after the summary of deposits was released.
The FDIC’s summary of deposits is an accounting taken at midyear by the government agency that insures bank deposits. It is not a holistic report card on the health of a bank or of the banking industry — deposits are, after all, a liability for banks. But the summary of deposits is the only official report that provides Arkansas-specific trend data for multistate banks like Arvest, Regions and Bank of America.
More Money, Fewer Banks
Thanks to the acquisition of Delta Trust & Bank a year ago and the merger with the last of its sister charters in El Dorado, Russellville and Lake Village, Simmons First National Bank of Pine Bluff moved up a spot to No. 5, pushing Centennial Bank of Conway to No. 6. Both actually saw slight losses in deposits inside Arkansas while growing total deposits through acquisitions outside the state.
Simmons contributed to the contraction in the number of separate bank charters, both in-state and out-of-state, that operated in Arkansas: 129 as of June 30, down from 137 a year earlier. The number of bank offices continued a post-recession contraction, down by 23 to 1,365.
The bank now known as Bear State Bank also soaked up two charters in the year between June 30, 2014, and June 30, 2015. Its holding company — now Bear State Financial Inc., formerly First Federal Bancshares of Arkansas — traditionally operated a thrift at Harrison called First Federal Bank. In early 2014, Bear State Financial acquired First National Bank of Hot Springs and Heritage Bank of Jonesboro, and the three were combined on Feb. 13 into the Hot Springs charter. The combined bank was simultaneously renamed.
Also disappearing from the list of banks doing business in Arkansas were Decatur State Bank and 1st Bank of Texarkana, Texas.
Decatur State was collapsed into Grand Savings Bank of Grove, Oklahoma, on Dec. 29. Both Decatur State and Grand Savings Bank were owned by the Peterson Holding Co. of Decatur, and were brought back together by an investment group based in Oklahoma but dominated by Arkansas investors. Grand Bancorp Inc. bought Grand Savings Bank for $21.8 million in April 2013 and then paid $6 million for Decatur State.
1st Bank, which operated six branches in Arkansas, was acquired by Farmers Bank & Trust of Magnolia in January for $31.8 million.
Only one new bank entered the state in the 12 months ended June 30: Armstrong Bank of Muskogee, Oklahoma, which acquired Benefit Bank of Fort Smith on May 23, less than a year after Benefit converted from a thrift charter to a state-chartered commercial bank. Armstrong’s holding company, Ironhorse Financial Group Inc., paid $32.2 million in cash for Benefit Bank. Armstrong is still operating Benefit’s four Fort Smith branches but has closed a Van Buren branch, according to the FDIC.
Pending Deals
Two more Arkansas bank deals are pending: Farmers & Merchants Bank of Stuttgart’s $42.3 million cash purchase of the Bank of Fayetteville, which is scheduled to close on Nov. 30, and Citizens Bank of Batesville’s acquisition of Parkway Bank of Rogers, expected to close by the end of the year. No terms of that deal have been made public.
Mary Beth Brooks, president and CEO of the Bank of Fayetteville, confirmed last week what she hinted at when the F&M deal was announced in July: She won’t be staying on.
“I have had some really intriguing offers but I do not want to seriously consider anything until I have time to clear my head,” Brooks wrote in an email. “Unless I have a complete change of heart, I think I have had about as much fun as I can stand in the banking business.”
Bob Taylor, president and CEO of Parkway Bank and current president of the Arkansas Bankers Association, will become Citizens Bank’s regional CEO in northwest Arkansas and executive credit officer for the entire bank.
The Arkansas Influence
Nine Arkansas banks have branches out of state, and four of them are big enough to be important players in other states.
• Arvest Bank, No. 1 in Arkansas with almost $7.2 billion in in-state deposits representing 12.67 percent of the state’s total deposits, is also No. 4 in Oklahoma ($4.6 billion, 5.56 percent) and No. 20 in Missouri ($1.17 billion, 0.75 percent).
• Simmons First National Bank, No. 5 in Arkansas ($3.53 billion, 6.25 percent) is now the 12th-largest bank in Tennessee as ranked by deposits ($1.5 billion, 1.18 percent), thanks to its purchase of First State Bank of Union City. It is also No. 23 in Missouri with $1 billion in deposits there.
• Centennial Bank, No. 6 in Arkansas ($3.45 billion, 6.11 percent), was No. 31 in Florida with $2.2 billion in deposits as of June 30 (0.43 percent of the statewide market). Since then, Centennial’s publicly traded parent company, Home BancShares Inc., has completed the purchase of Bay Cities Bank of Tampa. When its $471.5 million in deposits are rolled into Centennial, the Conway bank could crack the top 25 in Florida.
• Bank of the Ozarks, No. 7 in Arkansas ($3.37 billion, 5.96 percent), has more than $1 billion in deposits in Texas (only good enough for No. 54 where everything is bigger) and another $747 million in Florida (No. 57). Its $688 million in Georgia deposits put it at No. 28 in that state, but BOZ announced last week an $800 million deal to purchase Community & Southern Bank of Atlanta, the No. 8 bank in Georgia in terms of deposits. (The combination is still likely to be No. 8.) Bank of the Ozarks is No. 33 in North Carolina ($578 million).