Arvest To Acquire Bear State Financial In $391 Million Deal

Aug 22, 2017

Fayetteville-based Arvest Bank is acquiring Little Rock-based Bear State Bank in a deal valued at $391 million that is expected to close no later than the first quarter of 2018, and will push Arvest to almost $20 billion in assets.

The deal was announced early Tuesday and equals $10.28 per share of Bear State stock.

Thinly-traded Bear State shares (NASDAQ: BSF) closed Monday at $9.20 and were up almost 11% in Tuesday morning trading. During the past 52 weeks, the share price ranged between $8.65 and $10.95.

Bear State Bank operates 42 branches, three technology centers equipped with interactive teller machines and three loan production offices in Arkansas, Missouri and Oklahoma.

Bear State has been on a growth spurt in recent quarters. For the period ended June 30, Bear State reported second-quarter earnings of $6.7 million, compared with earnings of $4.5 million in the second quarter of 2016. The bank posted record revenue of $23.4 during the quarter, an increase of 12% from a year ago. First quarter income was up 47% over the same quarter in 2016, and full year 2016 net income totaled $17.5 million, up 65% compared with 2015 net income.

The bank ended the second quarter of 2017 with total assets of $2.24 billion, up 12% compared with the same period in 2016.

Prior to June 2014, Bear State was First Federal Bancshares of Arkansas. In May 2011, Bear State Financial Holdings invested $46.3 million in First Federal to recapitalize the bank. Bear State Chairman Richard Massey led the Bear State group and brought a new management team to the bank. In June 2014, the bank changed its name to Bear State Financial.

Arvest is privately held with Jim Walton, son of Wal-Mart Stores cofounders Helen and Sam Walton, serving as chairman and CEO of Arvest Bank Group. The bank has more than 250 bank branches in Arkansas, Oklahoma, Missouri and Kansas that operates in 16 locally managed markets. The bank posted $17.298 billion in assets at end of second quarter.

Arvest noted in its release announcing the news that “all those employed by Bear State on the date of contract closing will become employees of Arvest Bank.”