Whos Next? (EDITORS NOTE)

The recent news that another Northwest Arkansas bank is being sold marks the second announcement of a local sale in the past three months.

Parkway Bank of Rogers announced Oct. 14 it’s selling to The Citizens Bank, a lender based in Batesville that entered the market earlier this year with an LPO in Fayetteville.

In July, Farmers & Merchants Bank of Stuttgart announced its entry into the market when it agreed to buy The Bank of Fayetteville.

Both of those acquisitions should be approved before the year’s end. Some say there are other banks in the market that need to be acquired, but a man who is in the know believes this isn’t the beginning of a trend.

Randy Dennis is president of DD&F Consulting Group of Little Rock, the financial advisor for hundreds of bank purchases, including the Parkway-Citizens deal.

He says that deal may be the last involving a Northwest Arkansas-based bank that we see for a while. Some smaller banks may be ripe for the picking, in the opinion of some, but for a variety of reasons, they won’t attract much interest.

“I just don’t know that there is a lot left up there to acquire,” Dennis said. “Phil (Citizens Bank CEO Phil Baldwin) really got one of the last opportunities.”

Is Northwest Arkansas overbanked? The answer can’t be determined precisely, but Dennis disagreed with the suggestion, maintaining that the two-county area is well-served.

There will always be room for niche banking in the market, he said. Parkway, for example, is primarily a construction lender. Farmers & Merchants is heavy in farm lending, but will be greatly diversified with the BOF acquisition.

Whether you see it as overserved or a well-served bank market, I think what you also see with all this merger activity is the strong desire by lenders to enter or expand their presence in Northwest Arkansas, which is viewed as a growing market.

That’s something that’s not difficult to agree on.