Home BancShares in Conway, Ark., has found another opportunity in the failure of Doral Bank.
The $7.4 billion-asset Home announced late Wednesday that it had acquired $289.1 million in national commercial real estate loans from private-equity firm J.C. Flowers & Co., adding that it plans to open a loan-production office in New York. J.C. Flowers had picked up the portfolio when regulators closed the $6 billion-asset Doral on Feb. 27.
Doral was based in San Juan, Puerto Rico, but had mainland operations, including offices in New York and Florida. Home bought Doral's five branches in Florida from when the bank failed as part of a deal with Popular Inc. John W. Allison, Home's chairman, said in an interview at that time that his company was also linked to an unsuccessful bid that would have landed the failed bank's New York operations.
Home didn't disclose the price it paid J.C. Flowers for the loans, though it said that the deal would be immediately accretive to earnings. The loans average $12 million each, have a 6% average weighted yield and a weighted average loan-to-value of less than 50%.
Home said the loans, previously part of the Doral Property Finance portfolio, will be housed in a division of its Centennial Bank that has been named Centennial Commercial Finance Group. The group will be managed by Christopher Poulton, who previously served as an executive vice president for Doral's U.S. operations. The division will service the existing loans and originate new ones through a national lending platform that will focus on commercial real estate and commercial-and-industrial loans.
Poulton has "extensive knowledge of the acquired loan pool and growth potential," Home said in Wednesday's release. The company also hired Nick Santoro, who was a senior managing director at Doral Property Finance.
"We are very excited to welcome Christopher, Nick and the newly created Centennial CFG team to Centennial," Allison said in the release. "This is an attractive financial opportunity which will allow us to immediately grow our loan portfolio, increase income and enhance our franchise."
Home, which has notified state regulators in Arkansas and New York about its plans for the loan production office, said it expects the office to open on April 23.