Today's Paper Obits Best of Northwest Arkansas MIKE MASTERSON: Earned trust Style Today's Photos Crime Puzzles
ADVERTISEMENT
ADVERTISEMENT
story.lead_photo.caption A pedestrian passes One Bank & Trust headquarters Monday at 300 W. Capitol Ave., in downtown Little Rock. First National Bank of Paragould on Monday announced the purchase of One Bank, which markets itself as onebanc. - Photo by John Sykes Jr.

First National Bank in Paragould, the eighth-largest bank in Arkansas with $1.3 billion in assets, has agreed to acquire One Bank & Trust of Little Rock, the Paragould bank said Monday.

The purchase will give First National $1.5 billion in assets and 20 locations, including six One Bank offices in Little Rock and North Little Rock.

Terms of the deal were not disclosed. The sale is expected to close this fall.

First National is "a very strong financial institution," said Garland Binns, a Little Rock banking attorney.

"This is a really smart move on their part," Binns said.

One Bank & Trust, which does business as onebanc, has $274 million in assets. It lost almost $11 million over the past two years, and it has been undercapitalized in recent years. Its tier 1 capital as a percentage of average assets -- its capitalization rate -- was 2.7 percent last year. Regulators typically order a bank to raise more capital or sell the bank if its capitalization rate falls below 2 percent.

"First National has had a long-standing goal of expanding into the Central Arkansas region and One Bank provides us the perfect platform to accomplish this," Will Brewer, First National's vice chairman, said in a statement.

First National was founded 129 years ago, and One Bank opened 61 years ago, said Jerry Pavlas, One Bank's chief executive officer.

One Bank's employees will continue to serve its customers as part of First National, Pavlas said.

First National has offices in northeast Arkansas, Northwest Arkansas and now central Arkansas among its 20 locations.

It acquired the Northwest Arkansas branches from Pine Bluff-based Simmons First National Bank after Simmons acquired Metropolitan National Bank of Little Rock.

First National bought only the buildings from Simmons and didn't get the assets or customers, said Randy Dennis, president of DD&F Consulting Group of Little Rock.

"But the [One Bank purchase] actually gives them customers here," Dennis said. "This gives them a good starting point."

There had been a lot of interest in buying One Bank, Dennis said.

In April last year, there were at least four Arkansas banks that had an interest in bidding on One Bank, according to an order in a federal government lawsuit against One Financial Corp., the bank's holding company.

The four banks were Bank of England, First Financial Banc Corp. of El Dorado, Home BancShares of Conway and Arvest Bank of Fayetteville.

"One Bank was complicated in that you still had the federal government's Treasury Department involved because of the debt that came through [the Troubled Asset Relief Program]," Dennis said. "[Pavlas] and his team have done yeoman's work keeping the bank operational. Apparently First National of Paragould was the only one that was willing to put up with, shall we say, the attention."

The sale ends one of the worst banking chronicles in Arkansas.

In September 2012, One Bank was hit with its third federal regulatory sanction in 21 months. At the time, Layton Stuart -- chairman, chief executive officer and owner of One Bank for more than 17 years -- was forced out of the bank by regulators.

Among a myriad of allegations, Stuart was accused in 2015 of making misrepresentations to the federal government to induce it to invest $17.3 million in Troubled Asset Relief Program funds to One Bank's holding company.

The government claimed a significant portion of the money was used to personally benefit Stuart, his family and his conspirators.

Stuart died in March 2013.

The government sued several One Bank executives in the fallout of the bank's troubles, but only one executive was convicted. Former Vice President Gary Rickenbach pleaded guilty in 2016 to a charge of misprision, which is an act to conceal a crime. He was ordered to perform 100 hours of community service.

Albert Solaroli, who received a $1.5 million line of credit from One Bank that he used to buy two Porsches and repay a debt, pleaded guilty to a money laundering charge in connection with a $120,000 wire transfer from One Bank to a Florida bank. He was sentenced to a year and a day in federal prison.

Business on 04/24/2018

Print Headline: Troubled LR bank agrees to sale

Sponsor Content

Comments

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT