First Federal Bancshares of Arkansas (FFBH) in Harrison has agreed to buy First National Security in Hot Springs, Ark.
First Federal will pay about $134 million in cash and stock for the $955 million-asset First National, according to a
First Federal plans to raise about $20 million by selling roughly 500,000 shares of common stock to five members of Bear State Financial Holdings, an investor group that owns a majority stake in First Federal, at $7.90 a share. Each of the five investors will also receive warrants to buy more than 35,000 shares at the same price as part of the transaction, according to the $548 million-asset company's regulatory filing.
The merger will nearly triple First Federal's assets. Its branches will also increase to 48 from 15. First National Security is the parent of the $245 million-asset Heritage Bank in Jonesboro, Ark., and the $710 million-asset First National Bank in Hot Springs.
The management of First National's banks will remain in place after the merger and all three banks will continue to operate separately, Arkansas Business
The merger comes just weeks after the Federal Reserve Board terminated a cease-and-desist order with First Federal. The 2010 order restricted the company's ability to issue debt or make stock transactions, according to a
Bear State paid $46.3 million for a majority interest in First Federal in early 2011, a price that included a $6 million