Louisiana’s Largest Credit Union Signs First Bank Purchase Agreement
Louisiana’s largest credit union, the $2 billion Barksdale Federal Credit Union in Bossier City, La., announced Thursday that it has signed an agreement to buy the $73.7 million HomeBank of Arkansas in Portland, Arkansas. .
Financial terms of the purchase and support agreement were not disclosed. This is Barksdale FCU’s first bank purchase.
Founded in 1908, HomeBank’s 25 employees operate five branches that serve approximately 1,000 customers.
In 2015, the bank’s 2011 FDIC consent order was terminated. However, in 2019, the FDIC issued a second 20-page consent order against HomeBank. Some of the issues regulators asked the financial institution to address included maintaining qualified management, board oversight, policy reimbursements for insider spending, internal audit controls, restrictions on dividends and cash/asset/liability management. The order also required the bank to correct violations of law and regulation noted in its review report, develop a budget and profit plan, and not engage in new lines of business. without the permission of the Regional Manager and the Commissioner of the FDIC.
In 2020, HomeBank recorded a net loss of $419,000 and an ROA of 0.60%. At the end of 2021, the bank posted a net loss of $50,000 and an ROA of 0.07%, according to FDIC financial performance reports.
Specializing in commercial loans, HomeBank manages a loan portfolio of $52.8 million and capital of $7.3 million.
“We believe the structure and policies we have put in place with our operation will satisfy the elements of the consent order,” said Barksdale FCU President and CEO Patrick Gullatt. “Furthermore, by moving them (the bank) into our operations, we can gain efficiencies and make them more profitable.”
Additionally, Gullatt noted that the acquisition will open up a new market to grow membership and lending as he plans to continue to operate the bank’s five branches in Damascus, Portland, Greenbrier, Marshall and Little Rock, the largest city in Arkansas.
“We met with their employees, and they do a good job of taking care of their customers,” he said. “We feel like the communities they serve are very similar to the communities we serve in Louisiana, and that will be fine with us. We see the opportunities in the markets the bank serves, and those are the types of markets we serve, so we believe we could be successful. »
Subject to regulatory and shareholder approvals, the acquisition is expected to close in the third quarter.
Barksdale FCU’s 409 employees operate 25 branches in northern and central Louisiana and Longview, Texas, serving more than 155,000 members.