Home BancShares (HOMB) in Conway, Ark., has agreed to buy Liberty Bancshares of Jonesboro.

The $4.2 billion-asset company will pay $280 million in cash and stock for the $2.9 billion-asset Liberty. Home said it plans to repurchase all of Liberty's Small Business Lending Fund preferred stock held by the Treasury Department shortly after completing the acquisition.

The acquisition will create a company with $7.1 billion in assets, $4.5 billion in loans and $5.6 billion in deposits. Home will also have 151 branches in Arkansas, Florida and southern Alabama and will become the second-biggest bank based in Arkansas, as determined by deposit market share.

"It's exciting to be a part of the largest in-state banking transaction in the history of Arkansas," Randy Sims, Home's chief executive, said in a press release late Tuesday. "This combination will double the number of Arkansas branches for Centennial Bank from 46 to 92 locations."

Home has been an active bank buyer. It acquired Premier Bank in Tallahassee, Fla., last year in a bankruptcy court auction.

The acquisition is expected to close by the fourth quarter.

Analysts at Keefe, Bruyette & Woods wrote in a research note on mergers and acquisitions last week that Home's "management commented there are more M&A opportunities than time or money. We believe a deal is likely near term."


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