What is the End Game? (Opinion)

The recent announcement that Home BancShares Inc. has reached a definitive agreement to buy Liberty Bancshares Inc. in a $280 million deal was well received on Wall Street.

Shares of the publicly traded HBI initially jumped as much as 13 percent.

Additionally, research firm Wunderlich upgraded the company’s stock to “buy” from “hold,” and upped its price target from $20.50 to $29.

“I looked down at my iPhone sitting there in a meeting the following day [after the merger announcement] and the stock went up $2,” Home BancShares vice chairman Bunny Adcock recalled. “Never had that happen in my life. We never dreamed we’d be here.”

Adcock and Johnny Allison, chairman of Home BancShares, started the bank holding company just 15 years ago. The “here” Adcock mentioned is the reality that the company is now a $7 billion banking organization.

In an industry as ripe for mergers and acquisitions as regional banking, many would do well to follow the path of HBI, which has been acquiring troubled banks along the Gulf Coast and in Florida for the last three years.

By adding resources, regional lenders are getting in a better position to take on national banks, which aren’t seen in a very good light by consumers right now.

Could that mean Home BancShares, soon to be a clear No. 2 in Arkansas, has an end game that would eventually vault it past Arkansas market leader Arvest Bank of Fayetteville?

Don’t count on it, but don’t bet against it, either. HBI executive Davy Carter said surpassing the $10 billion mark in assets is something the company would be very cautious about because of the Dodd-Frank Regulation Act mess.

“But,” he added, “the thing I have learned about working for Johnny is you never say never.”