Muskogee, Okla-based Armstrong Bank has entered the Fort Smith and Northwest Arkansas banking markets with the planned acquisition of Benefit Bank. Terms were not disclosed in the statement issued Monday (Dec. 29), and the deal is expected to close in the first quarter of 2015.
Technically the deal is between Ironhorse Financial Group, the parent company of Armstrong Bank, and Benefit Financial Group. The banks are expected to fully merge operations and change signs on Benefit Bank locations until mid 2015.
“We have wanted to be in Arkansas for some time and could not have found a better partner than Benefit Bank,” Dr. Sinclair Armstrong, board chairman of Armstrong Bank, said in a statement. “We have a strong retail franchise of branch offices just across the state line so this presents a great expansionary opportunity for us. We are similar in our approach to community banking which makes this a good fit for both banks. I want to assure Benefit banking customers that we are committed to continue to provide the same excellent customer service they have come to expect.”
Armstrong Bank, established in 1934, has 17 banking locations in northern and eastern Oklahoma along the Interstate 40 corridor. Benefit Bank, organized in 1999, has four full-service branches in the Fort Smith area and a loan production office in Springdale.
According to the statement, customers of Benefit Bank and Armstrong Bank will receive notifications in advance of changes to their accounts. Until the transaction is complete and the two banks are merged, Benefit Bank customers should continue to conduct business as usual.
Rod Coleman, chairman and CEO of Benefit Bank, told The City Wire he and the bank owners were not wanting to sell the bank to a large regional bank or publicly held financial company, but found it palatable to sell to another community bank.
“There is a family that owns it (Armstrong) and is interested in being a local, a community bank,” Coleman said. “Dr. Armstrong grew up here (Fort Smith) and … it was just a great opportunity for all of our goals to be met.”
In the official statement from Armstrong, Coleman also noted the “community” aspect of the deal.
“Armstrong Bank is a financially sound community bank with a long and rich history of community involvement and personalized customer service. We wouldn’t have it any other way for our customers and employees,” Coleman said in the statement.
Based on asset size, Armstrong is almost 3.5 times larger than Benefit Bank. As of Sept. 30, Armstrong had $652.777 million in assets and $556.606 million in deposits. Armstrong posted net income of $12.284 million through the first three quarters of 2014, ahead of the $10.985 during the same period in 2013, and well ahead of the $8.832 million during the same period of 2012.
Benefit Bank had $187.4 million in assets as of Sept. 30. Net income for the bank during the first three quarters of 2014 was $761,000, below the $830,000 during the same period of 2013 and more than the $585,000 during the same period of 2012.
Benefit Bank has a 3.61% of marketshare by deposits in the Fort Smith metro as of June 30, 2014. The bank also has a loan production office in Northwest Arkansas.