First Federal Bancshares of Arkansas Inc. said the closing of the agreement between it and the Little Rockbased financial group pouring a planned $46.3 million into the savings-and-loan holding company was finalized Tuesday.
Shareholders had approved the agreement Friday at a special stockholders meeting. The vote authorized a 1-for-5 reverse split of the company’s stock, agreed to alter the board of directors and approved an omnibus incentive program.
In the transaction Tuesday, Bear State Financial Holdings received 15.43 million shares of First Federal Bancshares’ common stock and a warrant to buy an additional 2 million shares of the preferred stock issued under the Toxic Assets Recovery Program Capital Purchase Program for an additional $6 million.
The investment agreement also authorized a rights offering that will occur on or around May 12 to eligible stockholders who owned company stock on March 23. Those stockholders will be able to buy up to $8.7 million in company stock at $3 per share.
Bear State will buy any remaining shares not sold in the rights offering, a news release stated Tuesday.
Shares of First Federal closed Tuesday at $2.63, down 9 cents or 3.31 percent, on the Nasdaq exchange. It has traded between 94 centsand $3.95 in the past year.
First Federal reported a $439,000 loss for the quarter that ended Dec. 31, with a loss per share of 10 cents. Assets were $600.05 million, down from $731.07 million at the end of 2009.
First Federal was sanctioned by the Office of Thrift Supervision in April 2010. It lost nearly $30 million in 2009 and through September of last year.
The company’s new board of directors was named as part of the closing announcement.
Rick Massey, a Westrock Capital Partners LLC partner and spokesman for its subsidiary Bear State, is chairman.
Other board members are Scott Ford, a Westrock Capital partner; Aaron Clark of The Stephens Group; and Dabbs Cavin, who becomes the company’s and bank’s president as of Tuesday.
First Federal board members John Paul Hammerschmidt, Frank Conner, and former bank and company President Larry Brandt will continue as board members with Hammerschmidt as chairman emeritus.
Brandt will continue aschief executive officer, Tommy Richardson will assume the role of executive vice president and chief administrative officer, and Sherri Billings will remain chief financial officer.
New senior management includes Christopher Wewers as executive vice president and chief operating officer and J. Russell Guerra as executive vice president and chief lending officer, according to the news release.
The bank, founded in 1934, operates 18 full-service branches, a loan-production office and 29 ATMs in northcentral and Northwest Arkansas.
Business, Pages 25 on 05/04/2011