Ready to grow, Home BancShares gets off to a good start in Texas

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Being happy may just be the start for Home BancShares Inc. in Texas.

Conway Bank said on Wednesday it would pay $ 919 million in shares to buy Happy Bancshares Inc. from Amarillo, Texas. The deal, expected to close in the first quarter of next year, anchors Home BancShares in the heart of Texas and gives the lender a solid foundation to expand its operations in the state with additional merger and acquisition opportunities.

More so, the Bank of Arkansas says it is “creating a dominant southern institution across the Channel,” noting its strong presence in the Florida market, the largest and most productive market in the United States. Home BancShares. After closing, Home BancShares predicts it will have approximately $ 24 billion in assets, $ 14 billion in loans and $ 19 billion in deposits.

With a $ 919 million acquisition, Home is making a Texas-sized bet that it can deliver solid results when it integrates the Western neighbor into its operations.

“If we can do as well as the Florida panhandle did for us, we’re going to pull the tail a bit and do extremely well,” said Terry French, President and CEO of Centennial Bank. in a conference call with industry analysts after the deal. has been announced.

The jump over the border now places Home BancShares in two of the country’s fastest growing states. The 2020 census revealed that Texas was the third fastest growing state in the country over the past decade with population growth of almost 16%. Florida ranked seventh with a population growth of 14.6%.

Texas on its own offers a rich target environment – the acquisition includes banks in Austin, Fort Worth and suburban San Antonio. World Population Review ranks these cities among the five fastest growing metropolitan areas in the United States.

Indeed, the Interstate-35 corridor connecting Austin to San Antonio has exploded over the past decade. For example, the town of New Braunfels at the northeastern tip of San Antonio, grew 56%, according to 2021 census data.

In addition to a growing population, Texas offers a banking market that is “fragmented and should offer more M&A opportunities” for Home BancShares, banking analysts at Stephens Inc. reported of the transaction. Analysts noted that the Texas market has 31 banks with assets ranging from $ 2 billion to $ 10 billion, compared to just 14 combined in Arkansas and Florida, Home’s two largest historical markets.

Home BancShares adds a proven Happy Bancshares acquisition team. The Texas bank has expanded its panhandle operations primarily through acquisitions, buying four banks with assets ranging from $ 58 million to $ 795 million since January 2020. John Allison, president and CEO of Home, knows the Texan market well, having served as a director of First Commercial Corp., which operated in the state.

In a presentation related to the deal, Home BancShares said the transaction provides an “opportunity to better compete in future Texas consolidations.”

Allison noted that consolidating and integrating the two companies is the primary focus at this time, although future purchases are under consideration. “We are constantly looking for mergers and acquisitions,” he told bank analysts on Wednesday’s call.

All of these factors produce a warm welcome for the combined operations of Home and Happy.

On Thursday, Stephens increased its earnings per share for the combined company from $ 1.58 to $ 1.65 for 2022 and increased its 2023 EPS forecast from $ 1.66 to $ 1.80. The investment banking firm also raised Home BancShares’ price target to $ 29 per share, from $ 27.

BANKING ORIENTATION

Executives at Little Rock Venture Center and Simmons Bank are hosting a lunchtime workshop on Tuesday to help small businesses learn more about building an effective relationship with their bank.

The hour-long session will include topics such as determining exactly what a bank needs from small business owners and the factors that influence lending.

Small business owners will learn to speak the language of bankers so that traders can get a head start on the process when applying for loans.

Simmons’ panel will include Dee Davenport, senior vice president and trust manager; Carole J. Smith, Senior Vice President and Head of Business Development; and David Stogsdill, regional market manager.

OFFICE SALE

Acadia Properties of Little Rock purchased an office building at 11219 Financial Center Parkway for $ 2.15 million.

Acadia, registered in Ali Raja’s name, purchased the 32,767 square foot multi-tenant Financial Park Place building near the 630-430 Interstate interchange in West Little Rock.

Hermitage Development Corp., which sold the property, was represented by Clark Irwin at Colliers of Arkansas. Acadia was represented by Reed Gibbons with RPM Group.

“This property obviously benefits from its excellent visibility from Financial Center Parkway and from its freeway access,” Irwin said in a statement. In addition, the office market west of Little Rock continues to perform well in central Arkansas MSA, making it a good investment property for its new owners.

MORE MONEY AVAILABLE

The US Small Business Administration is increasing the amount borrowers can request through the agency’s covid economic disaster loan program.

Starting October 8, small business owners, including farms and nonprofits in all U.S. states, can apply for up to $ 2 million under the initiative. Loans were limited to $ 500,000.

Loans come directly from the SBA and must be repaid. Low-interest, fixed-rate loans are designed to help small businesses weather the economic damage caused by the pandemic by providing working capital to cover operating expenses. Loans have a 30-year term and payments can be deferred for the first two years, but interest will accrue.

Working capital includes regular payments for operating expenses such as payroll, rent or mortgage, utilities, and other ordinary business expenses. Loans can also be used to pay off commercial debts incurred at any time.

For more information or to apply, visit covid19relief.sba.gov.

Ideas for columns or recommendations? Any thoughts or reflections to pursue? Contact me at amoreau@adgnewsroom.com or at 501-378-3567.


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