Louisiana’s Largest Credit Union Signs First Bank Buy Deal

Louisiana’s largest credit union, the $2 billion Barksdale Federal Credit Union in Bossier City, La., said Thursday it signed an agreement to buy the $73.7 million HomeBank of Arkansas in Portland, Ark.

The financial terms of the purchase and assumption deal were not disclosed. This is Barksdale FCU’s first bank purchase.

Founded in 1908, HomeBank’s 25 employees operate five branches that serve about 1,000 customers.

In 2015, the bank’s 2011 FDIC Consent Order was terminated. However, in 2019, the FDIC issued a second 20-page Consent Order against HomeBank. Some of the issues that regulators directed the financial institution to address included retaining qualified management, board supervision, policy reimbursements for insider expenses, internal audit controls, dividend restrictions and liquidity/asset/liability management. The order also required the bank to correct violations of law and regulation noted in its report of examination, develop a budget and profit plan, and not to engage in any new lines of business without permission from the FDIC regional director and commissioner.

In 2020, HomeBank posted a net loss of $419,000 and an ROA of 0.60%. At the end of 2021, the bank recorded a net loss of $50,000 and an ROA of 0.07%, according to FDIC financial performance reports.

Specializing in commercial lending, HomeBank manages a $52.8 million loan portfolio and $7.3 million in capital.

“We believe that the structure and policies we have in place with our operation will satisfy the consent order items,” Barksdale FCU President/CEO Patrick Gullatt said. “Plus, by moving them (the bank) into our operations, we’ll be able to gain more efficiencies and make it more profitable.”

What’s more, Gullatt noted the acquisition will open a new market to grow membership and loans as he plans to keep operating the bank’s five branches in Damascus, Portland, Greenbrier, Marshall and Little Rock, Arkansas’ largest city.

“We’ve met with their employees, and they do a good job of taking care of their customers,” he said. “We feel like the communities they serve are a lot like the communities we serve in Louisiana, and that will be a good fit for us. We see the opportunities in the markets the bank serves, and they are the types of markets we serve so we think we could be successful.”

Pending regulatory and shareholder approvals, the acquisition is expected to close during the third quarter.

Barksdale FCU’s 409 employees operate 25 branches throughout north and central Louisiana and in Longview, Texas, serving more than 155,000 members.