Southern Missouri Bancorp Inc. in Poplar Bluff, Mo., is entering northeast Arkansas by buying a $30.5 million-asset bank that has been under a regulatory order for more than a year.
The $453.3 million-asset Southern Missouri announced last week that it would acquire Southern Bank of Commerce in Paragould, Ark., in a cash deal. The price and the timing of the closing were not disclosed.
As part of the deal, Southern Missouri is requesting that the Arkansas State Bank Dept. and the Federal Reserve Board terminate a December 2007 written agreement with Southern Bank of Commerce. The agreement had required a management study, an improved lending and loan review policy and better compliance with anti-money laundering rules, among other things.
It was unclear how many of those problems have been resolved. At yearend, Southern Bank of Commerce's noncurrent loans made up 9.16% of its total, up from 3.63% a year earlier, according to data from the Federal Deposit Insurance Corp. Its problem loans are comprised primarily of single-family mortgages and commercial real estate. While the bank was well capitalized at yearend, its ratios had dropped significantly from a year earlier. Its total risk-based capital ratio was 10.63% as of Dec. 31, compared to 17.5% a year earlier.
Southern Missouri plans to merge Southern Bank of Commerce into its Missouri Bank & Trust Co. Lindley Smith, president and chief executive officerof Southern Bank of Commerce, would become Southern Missouri's president for the northeast Arkansas region, according to a press release.
Southern Missouri has 10 branches near the Missouri border with Arkansas. With this deal, it would pick up four branches just across the state line.
"While this acquisition represents an addition to our asset base of less than 10%," Southern Missouri President and CEO Greg Steffens said in a statement, "we think that entry into these northeast Arkansas markets could trigger significant growth over time."
Southern Missouri received $9.55 million from the Treasury Department's Troubled Asset Relief Program in December.