Arvest gets Fed approval for $391 million Bear State deal

Fayetteville-based Arvest Bank’s $391 million acquisition of Bear State Financial Inc. of Little Rock has cleared the last major regulatory hurdle after the Federal Reserve approved the Aug. 22 deal with a few key stipulations.

The Federal Reserve Board on Monday (April 2) announced its approval of the deal under section 3 of the Bank Holding Company Act of 1956, allowing Arvest Bank and its parent companies, Arvest Bank Group Inc. and Arvest Holdings Inc., to acquire Bear State and its subsidiaries.

The Fed also approved the applications, under section 18(c) of the Federal Deposit Insurance Act and section 9 of the Federal Reserve Act, which allows Arvest to acquire Bear State Bank and its branch locations in Arkansas, Missouri and Oklahoma.

With those federal approvals, Arvest and Bear have received all required regulatory consents for the previously-announced deal already signed by shareholders of both Arkansas banks. Arvest and Bear State now anticipate closing the deal on or around April 20, company officials said.

Still, to satisfy the Federal Reserve’s order of approval, Bear State agreed to sell First Financial Bank of El Dorado and both Bear State Bank branches in Mena. The two Mena branches had deposits totaling nearly $58 million and loans of about $30 million as of Feb. 28. The closing of the sale of the Mena branches is expected to occur within 180 days following the closing of the merger with Arvest. Bear State and First Financial Bank will provide additional information to customers in Mena affected by the divestiture of those branches.

Following the merger, Arvest’s total asset value will near $20 billion, just behind Little Rock-based Bank of the Ozarks, the state’s largest bank holding company. Arvest and Bear State customers will not notice any immediate changes after the deal closes, officials said. Later this year, Bear State’s branding will change to Arvest Bank with the conversion of systems expected to occur later in 2018.

Before Bear State announced its surprise deal with Arvest in the third quarter, the Little Rock community bank had been on a growth spurt after the former Harrison-based First Federal Bancshares moved its corporate headquarters to central Arkansas. Ahead of the merger, Bear State operated 42 branches, three technology centers equipped with interactive teller machines and three loan production offices in Arkansas, Missouri and Oklahoma.

In the second quarter of 2017, Bear State reported second-quarter earnings of $6.7 million on record revenue of $23.4 million, a spike of 12% from a year ago.

Arvest has operations in 18 of the 34 markets where Bear State operates. The new cities and towns for Arvest in Arkansas are: Ashdown, De Queen, Dierks, Glenwood, Jonesboro, Manila, Monette, Mount Ida, Nashville and Waldron. In Missouri the new cities and towns are Golden City, Kimberling City, Lamar and Marshfield; and Broken Bow and Idabel in Oklahoma.

Bear State will add to Arvest’s growing portfolio of more than 250 bank branches in Arkansas, Oklahoma, Missouri and Kansas that operate in 16 markets. The Fayetteville bank posted $17.298 billion in assets at the end of the second quarter. Arvest is privately held with Jim Walton, son of Walmart Inc. co-founders Helen and Sam Walton, serving as chairman and CEO of Arvest Bank Group.