Home Execs Sell Off Shares

Corporate insiders are selling stock just like everyone else these days. George Gleason II, for instance, recently raised a bit over $3 million by selling 103,000 shares of Bank of the Ozarks stock.

Still, that was less than 5 percent of Gleason’s personal stake in BOZ. Compare that with the recent sell-off of Home BancShares Inc. stock by Chris Roberts, president and CEO of HBI’s Centennial Bank of Little Rock.

Roberts woke up on Oct. 20 with direct ownership of 92,943 shares of HBI stock and started selling. By Oct. 29, he had sold every share for just under $2.45 million.  

On Halloween, he raised another $235,000 by selling every share of HBI stock in his IRA, his wife’s IRA and his kids’ trust funds.

In the end, all the Home BancShares stock Roberts owns is the 8,082 shares held in escrow for two years as part of the sale of Centennial Bank to Home BancShares.

Home, you may remember, was a 20 percent stakeholder in White River Bancshares Inc. of Fayetteville, the holding company for Signature Bank of Arkansas. Home announced it would sell the stake for $19.9 million in late November of 2007.

Now, Chris Roberts wasn’t the only HBI insider selling stock in late October and early November, but no one else cleared all the HBI stock — ticker symbol HOMB — out of his portfolio. Here’s what recent Securities & Exchange Commission filings show:

• Director Gene Cauley of Little Rock sold the most shares, about 70 percent of his stock between Oct. 29 and Nov. 6. Specifically, he sold 278,118 shares for $7.44 million, leaving him with 108,311 shares worth about $2.75 million (plus another 32,147 shares worth about $800,000 in escrow for two years).

• Director and hedge fund manager Alex Leiblong sold 47,074 shares for $1.21 million, and his wife also sold 3,916 shares for $101,555. Leiblong still owns about 170,000 shares (worth $4.33 million) and the Key Colony Fund he manages owns 370,332 ($9.44 million).

• President and COO Ron Strother raised $678,072 by selling 25,000 shares, leaving him with just 30,000 shares owned directly and another 5,100 in his 401(k).

• CFO Randy Mayor realized more than $275,000 by exercising options for 13,255 shares at $6.79 per share and selling them at $27.58 per share. Nice.
• On Oct. 22, director William G. Thompson sold 2,500 shares he owned directly for $66,250, and his business, Thompson Brothers LLC, did the same. On Nov. 4, Thompson and Thompson Brothers each sold another 2,500 shares, raising another $65,775 each.
• Brian Davis, director of financial reporting for Home BancShares, sold 580 shares for $15,942.

Why would so many Home BancShares insiders decide to sell so much stock at the same time?

Roberts didn’t return our call seeking comment, and Cauley threatened to file an injunction over an e-mail informing him that Arkansas Business was planning to report on his stock sales.
However, it should be noted that Standard & Poors announced on Oct. 28 that Home BancShares would become part of its SmallCap 600 index. The next day, more than 1.6 million shares of HOMB stock were traded as index funds adjusted their lineups. Average daily volume is less than 100,000 shares.  

It looks like insiders took advantage of the sudden demand to sell big chunks of stock without dragging down the price.