Gary Head, Investors Find Bank Charter to Buy

In honor of this week’s emphasis on banking and finance, we offer you the following tale. You may need a scorecard to keep track of the players.

Gary Head, former president of Arvest Bank at Fayetteville, and other investors in the newly formed White River Bancshares Co. have found a friendly banker willing to sell them an existing charter.

It’s the 71-year-old charter of First Bank of South Arkansas at Camden.

But first Searcy W. Harrell, CEO of family-owned Harrell Bancshares there in Camden, will have to collapse First Bank of South Arkansas’ $91.1 million in assets into the holding company’s other bank charter, Calhoun County Bank at Hampton.

An application to do just that has been filed with the Arkansas State Bank Department. Harrell tells us that the company chose to keep the charter of the smaller ($32.8 million) Calhoun County Bank because it is older, founded in 1907.

Head confirmed that — provided regulators approve — the deal should be done in time for White River Bancshares to open its Signature Bank in March.

Sign Here

Head was bragging to us that White River had raised “a lot” of capital for what is essentially a startup bank, despite the 1933 charter date.

He wouldn’t say how much, but if you start thinking in the neighborhood of $40 million, you won’t be too far off. Could be more than that by the time the subscription closes on Dec. 16.

An early investor, as has been widely reported, is Community First Bancshares of Harrison, led by W. King Gladden. Community First has a 20 percent stake in White River.

But here’s more news: Home Bancshares of Conway has matched Community First’s investment. Johnny Allison, chairman of Home Bancshares, confirmed that the fast-growing parent of First State Bank of Conway is satisfying an itch to get into the northwest Arkansas market by hitching on with Signature Bank.

“You know everyone’s running to northwest Arkansas, and our question was whether to acquire someone up there or do we de novo?” Allison told Whispers.

In the end, he said, Home Bancshares decided there was a third option.

“I think someone’s going to be the last person on the chain letter up there, and we think Gary Head’s the person we want to ride with,” Allison said. “His partner list is the ‘Who’s Who’ of northwest Arkansas.”

And maybe south Arkansas. Head said Searcy Harrell and his son, Jon, will have a continuing relationship with White River Bancshares beyond the sale of the bank charter. But whether that means they are among the investors he just wouldn’t say.

Future Options

The investment by Home Bancshares, Allison said, will also give White River investors the future option of being acquired by a company that will be publicly traded.

Home Bancshares will be going public by 2006 because its investment in both Twin City Bank of North Little Rock and Community Bank of Cabot has resulted in a pool of more than 500 shareholders, the threshold at which the Securities & Exchange Commission requires private companies to start filing the same disclosures as a public company. And there’s no point in taking on the expense without giving investors the liquidity of a ready market for their stock.

To that end, Home Bancshares filed an application with the State Bank Department last week to take control of TCBancorp Inc., Twin City Bank’s holding company, in a stock-swap merger that still has to be approved by shareholders at a meeting in January.

We’re also hearing that Home Bancshares is on the verge of yet another bank acquisition.

We’ll keep you posted on that.