Arkansas Eyes Upon Texas Lending
Arkansas interested in Texas loans |  Arkansas Business News

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The lure of Texas is attracting the attention of more Arkansas banks. This heightened focus is particularly evident among some of the state’s largest lenders.

Of Arkansas’ three publicly traded banking companies, Conway’s Home BancShares Inc., the parent company of Centennial Bank, made the latest and loudest move to Texas.

“It’s not that we haven’t been interested in Texas or that we haven’t paid attention to it,” said Tracy French, president and CEO of Centennial Bank, which owns $18 billion in assets. “The interest has always been there.”

Announced last year, the $919 million stock exchange acquisition of the Happy State Bank franchise will put Centennial Bank as the No. 1 bank in Arkansas on the ground in Texas.

Happy State Bank, with $6.8 billion in assets, operates on a 35-county footprint, heavy in panhandle markets big and small, with Amarillo and Lubbock topping the list. Happy’s reach extends southeast to Austin, New Braunfels and Fredericksburg in central Texas and east to the Dallas-Fort Worth area.

The bank recorded interest income of $229 million and a profit of $100 million in 2021.

French described the Happy purchase as an effective and efficient way to enter Texas in a big way.

“Patience paid off for us,” he said. “We are ready to intervene.”

Like the land area differential between Arkansas and Texas, so does the size of the two states’ banking markets.

Total bank deposits in Arkansas exceed $94.5 billion. In Texas, the deposit tally in Dallas County alone is $297 billion.

Simmons First National Corp. of Pine Bluff built its Texas franchise through a series of acquisitions that began in October 2017 with the $462 million stock swap deal for Southwest Bank of Fort Worth and its 16 locations. full service.

In July 2019, Simmons Bank’s parent company added seven Texas branches north of Dallas as part of the $434 million purchase of Landmark Bank of Columbia, Missouri.

The pending $581 million purchase of Spirit of Texas Bank in College Station includes 38 banking offices that include San Antonio, Austin and the Houston metro area.

Beyond the scope of the new Texas locations, the deal is expected to make Simmons the largest Arkansas-based bank, with total assets of more than $28 billion. Simmons’ moves to Texas are part of a 2013 expansion plan to enter new markets of opportunity such as the Oklahoma City, St. Louis and Nashville, Tennessee metropolitan areas.

“We’ve been successful in buying banks in these growing markets, and we haven’t been disappointed,” said George Makris, Simmons president and CEO.

“The migration from the coasts to the Dallas-Fort Worth area is even more attractive to us now. We see this as a long-term game for the growth of our business.”

Of the current line of banks from Arkansas to Texas, the OZK bank in Little Rock is the oldest. Its loan origination office in Frisco became a full-service branch in June 2004.

This Texas startup has grown into five loan origination offices and 23 full-service locations, housing more than $2.3 billion in deposits.

“We saw it early and took advantage of it early,” George Gleason, chairman and CEO of Bank OZK, said of Texas. “It’s a very important market for us, and we expect it to continue to grow in importance.”

The $26.5 billion asset lender built its franchise in Texas largely through branch development. It augmented that organic effort in March 2014 with the $21.5 million purchase of Bancshares Inc., Omnibank’s parent company, a $301 million Houston asset.

“Texas’ economy has become increasingly robust,” Gleason said. “It created an increased interest in Texas.”

Like Bank OZK, Farmers Bank & Trust of Magnolia deployed a combination of branching and buying to grow its footprint in Texas.

Farmers started with a branch in Texarkana in March 2012 and later purchased 1st Bank of Texarkana, with assets of $331 million, for $31.8 million in January 2015.

Since then, Farmers has moved deeper into East Texas, developing branches on the northern edge of the Dallas-Fort Worth market in Prosper in October 2016 and in Paris last year.

“In Texas, we just discovered that the markets are dominated by bigger banks and that we can apply the community banking model, and it’s been really well received,” said Chris Gosnell, president and CEO of Farmers Bank & Trust.

“We favor a personal banker approach. When we arrive, we give money and volunteer hours back to the community, and we have the technology that the biggest players have.

Gosnell said while there are more lenders vying for business in Texas, Farmers’ responsive community banking platform is working well.

“There are more loan applications from borrowers who aren’t as rate sensitive, and frankly there isn’t as much competition, strange as that may seem,” he said. declared. “Clients can get a loan approved in two weeks with Farmers, while the process takes longer with other lenders.”

Three Arkansas banks doing business in Texas haven’t ventured down the acquisition trail to pursue their Lone Star State aspirations. Instead, Encore Bank of Little Rock, Bodcaw Bank of Stamps, and Diamond Bank of Murfreesboro opened new branches there.

Korey Keith, president and CEO of Bodcaw Bank, with $168 million in assets, said the full-service Texarkana branch it opened six months ago is not part of a strategic expansion into East Texas.

“At the moment we don’t have any plans outside of that,” Keith said. “Texarkana is kind of a regional hub for southwestern Arkansas, and we have a lot of people doing business there. It made sense to go there with a team and open an office.

Last year, Encore Bank began rolling out four Texas offices in Austin, Dallas, Fort Worth and San Antonio. Arlington and Plano are on the drawing board for 2022.

Diamond Bank opened its only Texas branch in Texarkana in July 2017.


First forays into Texas

★ Small rocks OZK Bank opened a Frisco branch in June 2004

Farmers’ Bank and Trust of Magnolia opened a Texarkana branch in March 2012

Diamond Bank of Murfreesboro opened a Texarkana branch in July 2017

★ Pine Bluff’s Simmons First National Corp. acquired Southwest Bank of Fort Worth and its 16 full-service locations in a $462 million stock-for-cash exchange in October 2017

★ Small rocks Still Bank opened a branch in Austin in August 2021

Bodcaw Bank of Stamps opened a Texarkana branch in September 2021

★ Conway’s Home BancShares Inc.parent company of Centennial Bankbought Happy State Bank and its 62 full-service locations in a $919 million stock exchange in April 2022


Looking back

Lenders from 25 states are part of a competitive group of 487 banks with offices in Texas, a $1.5 trillion deposit market. This number represents a strong dose of consolidation and an influx of new players compared to 1994.

At the time, there were 1,061 banks in Texas. Only three of these lenders were headquartered out of state. None were from Arkansas.

Arkansas banks have made earlier inroads into Texas. The first agreement dates back to 1987, when the regulatory landscape was changing to allow interstate banking agreements.

In Texarkana, State First Financial Corp. crossed State Line Avenue in Texas to buy American National Bank. Arkansas Bank Holding was headed by Ben Sandefur.

His 2018 obituary noted that as CEO of State First National Bank, “he brokered the first interstate bank merger in Texas.”

In 1988, a holding company of Little Rock Bank created the Union National Bank of Texas. A subsidiary of The Union of Arkansas Corp., Austin’s bank was built on the bones of the failed BancFirst Westlake.

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