Florida is still a prime destination for Centennial Bank in Conway, Ark., even as well-heeled acquirers move in and drive up bank prices.

The $3 billion-asset bank, a subsidiary of Home BancShares Inc., on Friday picked up two more failed Florida banks, Coastal Community Bank in Panama City Beach and Bayside Savings Bank in Port Saint Joe.

This brings to four the number of seized banks in the state that Centennial has taken over this year — 20% of the 20 failures in 2010. In March, Centennial acquired Old Southern Bank in Orlando and Key West Bank, a thrift.

Though some buyers have started backing away from deals with Federal Deposit Insurance Corp. assistance in the Sunshine State as bidding competition has raised prices, Centennial still views this as the perfect time to expand in the state by acquiring failed banks.

"It's our time, and the opportunity to come in here is now," C. Randall Sims, the chief executive of Centennial Bank and its parent company, said in an interview Monday. "Florida still has some unbelievable places that are a little bit of paradise."

Centennial has had a presence in the Keys for 17 years, but this year marked its expansion into new markets in the state with the deals in Orlando and the Panhandle area.

The bank's Florida regional president, Tracy French, said in an interview Monday that "quite a bit" of Centennial's Arkansas customer base visits markets in Florida where the company is expanding.

Sandler O'Neill & Partners LP estimated that, with the latest acquisitions, Centennial's Florida branches would account for roughly 40% of the company's overall base.

Florida "has a good deposit growth still, and over time there will be a good lending market," said Andrew W. Stapp, a senior analyst at B. Riley & Co. Inc.

In fact, Sims said, he would not mind it if Centennial ends up with a larger presence in Florida than in its home state. Florida has a strong "possibility of organic growth after the FDIC-assisted acquisitions have been cleared out," he said.

Yet this may not happen for some time because Florida remains a hotbed of failures. The number of bank failures in the state through July jumped 400% from the same period in 2009 — 20 so far this year compared with four a year earlier.

As measured by Texas ratios, "there are only a handful of healthy ones" in the state, said Joseph Fenech, an analyst at Sandler O'Neill. The large number of failures has "enabled some banks in slower-growth markets who avoided the excess housing boom to go into states like Florida," he said.

TD Bank and Iberiabank of Louisiana are among the handful of out-of-state banks that have made several FDIC-assisted deals in Florida so far this year. Iberiabank on July 23 picked up its third failed bank in the state among five it has acquired nationwide since the financial crisis started, buying Sterling Bank in Lantana with $408 million of assets. The FDIC entered into a loss-sharing arrangement on $244.3 million, or 60%, of the failed bank's assets.

All this activity has made Florida a more expensive destination for companies like Centennial, which raised more than $107 million in capital last year to buy failed banks. "A couple of banks came in and just threw havoc into the bidding process," Sims said.

Specifically, pricing escalated after TD Bank on April 16 won the bidding for three Florida banks, including Riverside National Bank of Florida — one of the largest failures in the state — by agreeing to a 50/50 loss-share agreement with the FDIC.

"TD came in with an unbelievable bid and just blew us all away," Sims said.

Though Centennial plans to continue bidding on failed banks, it will not get overly aggressive. "We are not interested in opening our balance sheet and risking our assets," Sims said.

After Centennial bought failed banks a week apart in March, activity subsided, raising investors' worries that the company would be unable to deploy its new capital fast enough, Fenech said. The latest failed-bank deals, he said, "will be [a sign] of relief."

With the most recent acquisitions, which added 13 branches and $444 million of assets, Centennial has 32 branches in Florida and 49 in Arkansas.

Sims said he would not be surprised if the bank adds 20 Florida branches during the next year but added that this is unlikely to happen until economic conditions settle down in the state.

As for open-bank deals, Centennial is "out there looking," he said, "but I don't think the time is quite right. … I think the time is at hand with the FDIC's assistance."

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