Johnny Allison has personally made a lot of money in Texas, but his bank has been noticeably absent from the Lone Star State. That could soon change.

Allison, chairman of Home Bancshares in Conway, Ark., spent several years working out more than 8,000 loans for mobile homes in Texas that he bought from the Resolution Trust Corp. after the energy bust in the late 1980s.

Seeing Texas at its worst has kept Allison from taking his $7.2 billion-asset company there as oil prices increased, even though a strong energy sector helped make the state one of the hottest banking markets in recent years. He is, however, warming up to deals as oil prices, and the Texas premium long associated with the state's banks, plummet.

"I've said I'd rather buy into Texas when oil is at $50 a barrel than at $110 because I was there when oil went from $50 to $10," he said in an interview. "Texas isn't as oil dependent as it was back then … but right now we're sitting back and waiting to see what could happen. It could generate some real M&A opportunities."

Falling oil prices have prompted a lot of questions about the economic future of Texas and other states that have benefitted from a robust energy sector. Analysts say it is likely premature to make too many predictions. Lower prices are a mixed bag — they hurt producers, but they benefit other sectors such as petrochemical and manufacturing, and the overall economy can benefit.

Perhaps one of the most relevant and tangible effect thus far has been on the stock price of banks in Texas. Since Nov. 26, publicly traded banks in Texas have lost nearly 13% of their market value at a time when the overall banking sector — as measured by the KBW Regional Bank Index — is down 4.6%.

"The Texas bank premium that has been built up over the last few years has been significantly eroded over the last couple of months," said Michael Rose, an analyst at Raymond James.

Such erosion could change the landscape of Texas bank M&A, since so much consolidation has been predicated on the high-flying stocks of the state's acquirers. The currency of those banks — essentially their bargaining power -is now less impressive.

"It certainly has had an impact on the buyers at least in the short term," said C.K. Lee, a managing partner at Commerce Street Capital, a Dallas investment bank. "The impact on the currency has certainly taken a bite out of the ability to pay. … We've certainly tried to build in refreshed pricing expectations in our conversations."

At the same time, the reasons for selling — regulation, a lack of scale, liquidity needs — haven't changed. In fact, prolonged lower energy prices could sharpen those reasons.

"If there's a more challenging economic environment over the next 12 to 24 months, it is more likely to bring even more banks to market," Lee said.

Enter buyers like Home, which trades at 329% of its tangible book value. The company's stock price has fallen 4.4% since Nov. 26. Allison said he has historically avoided Texas because any past deals would have been dilutive, adding that such transactions are as awkward as "kissing your sister."

As multiples in Texas fall, "it might make some sense to do a deal or two down there," Allison said. "My multiple has come down some, but it hasn't been killed."

Similarly, George Gleason, chairman and chief executive of Bank of the Ozarks in Little Rock, Ark., is also on the hunt for potential plays tied to falling oil prices. The $6.6 billion-asset company, which already operates in Texas, managed to find a deal there last year that priced below tangible book value. Gleason declined an interview, but confirmed his interest via email.

"Bank of the Ozarks continues to be very bullish on Texas and our future there," Gleason wrote. "In regards to the recent drop in oil prices, if anything, we are hopeful that the drop will create additional M&A opportunities for us."

Other banks could see falling oil prices as a chance to enter Texas, said Brett Rabatin, an analyst with Sterne Agee. The same could be said of banks already in the state that have lacked a competitive currency.

"For the banks that wanted to do deals in Texas but didn't have the Texas valuation, this could be a chance at even footing," Rabatin said. "It opens the door to those who don't want to pay big premiums or maybe didn't have the currency to compete."

Still, Lee said some out-of-state interest could be tempered by fears of what could happen.

"The market is a bit of a question mark, and that has probably blunted some of the interest from outsiders and non-typical buyers, Lee said. "I think a lot of folks are just waiting until they see how this shakes out in the next 90 to 120 days."

The impact of falling oil prices could influence other metrics that are important to would-be acquirers. If prices stay low, delinquencies could rise, which could encourage some banks to sell under duress.

Rabatin has run stress tests on banks with large energy exposure to see what could happen if defaults tick up. In a note earlier this week, he wrote that, even in at "the severely adverse level, all of the banks screened would remain profitable."

But not all would go unscathed.

Allison said he talked to a banker last year about a potential deal. He asked the executive what the price of oil would need to be for his portfolio to be stressed.

"Oil was at about $85 then," Allison said. The banker "said problems would come at $65, but he didn't think that would happen ever. Well, now it is less than $50."

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