The Chapter 11 filing by Little Rock’s Allcorp Inc. in July marks the third Arkansas bank holding company to enter bankruptcy court in four years.
Allcorp is the parent company for the smallest bank in the state: $16.3 million-asset Community State Bank of Bradley (Lafayette County).
The biggest debt listed in Allcorp’s bankruptcy petition is more than $1.2 million owed on a loan from Heartland Bank of Little Rock. The loan, which originally totaled $2.1 million, financed the purchase of the bank in September 2010.
The reorganization petition is tied to the bank’s inability to generate adequate dividends for Allcorp to service its debt.
Allcorp is the second holding company taken into bankruptcy under similar circumstances by the father-son team of Lex and Alex Golden. Their Acme Holding Co., parent company of Allied Bank of Mulberry (Crawford County), is entering its 29th month in bankruptcy court.
An Aug. 15 order by federal regulators is expected to make moot Acme’s languishing Chapter 11 reorganization-turned-Chapter 7 liquidation. The Federal Reserve Bank of St. Louis gave the Goldens 30 days to come up with a plan to rebuild Allied’s severely depleted capital or to sell the bank.
Translation: The Goldens’ days at Allied Bank are on a 30-day countdown, and regulators will be installing new ownership/management.
Bad loans have battered Allied for more than five years and eroded its tier one equity capital to $1.3 million as of June 30. Past regulatory actions have blamed poor loan review and credit underwriting for the bank’s problems.
Allied recorded a 1.8 percent capital ratio during the second quarter, the lowest of all financial institutions in Arkansas. Community State Bank’s capital ratio, by comparison, is 14.3 percent.
Acme’s bankruptcy in April 2014 trailed nine months behind the Chapter 11 filing of Rogers Bancshares Inc., parent company of Metropolitan National Bank.
The subsequent auction of Metropolitan stock to Simmons Bank of Pine Bluff followed a less contentious path than Acme Holding. The same goes for the repayment of personally guaranteed loans secured by bank stock.
About $8 million owed to Centennial Bank of Conway, on a loan secured by Metropolitan shares and guaranteed by Doyle Rogers Sr., was repaid before the 2013 auction.
It took a year for Chambers Bank of Danville to obtain a $2 million judgment against Lex Golden and his wife, Ellen, for some of the Acme debt they personally guaranteed. Their son, Alex, is listed as a co-debtor on the $1.2 million Allcorp loan from Heartland.
Community State Bank’s tier one equity capital totals nearly $2.3 million.
Ownership of Allcorp largely is divided between Alex Golden, president of the holding company, and Lex Golden, Allcorp chairman and CEO. Each owns 39.28 percent.
Jacksonville investors Frank Swift Jr. and Michelle Andrews each hold a 4.62 percent stake. Trusts for the children of Alex Golden and his sister, Amy McCay, each hold 4.37 percent. Rounding out the ownership are three more Jacksonville investors who have 1.15 percent shares: William/Pamela Hall, Terry/Tonia Weatherford and the Rice Family Living Trust, led by Susan Rice.
Community State Bank
Bradley
Total Assets: $16.3 million
Salaries: $139,000
Net Income: $54,000
Dividends: $17,000
Staff: 6
(As of June 30)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
| Total Assets | $24,875 | $30,141 | $29,360 | $24,674 | $19,336 | $17,308 |
| Salaries | $234 | $252 | $351 | $296 | $258 | $269 |
| Staff | 7 | 7 | 8 | 7 | 6 | 6 |
| Net Income | $265 | $186 | $325 | $18 | $323 | $55 |
| Dividends | $124 | $100 | $310 | 0 | $650 | $149 |
| Efficiency Ratio | 61.10% | 59.95% | 61.75% | 88.33% | 88.18% | 90.31% |
Source: Federal Deposit Insurance Corp. All dollars in thousands.