Southern Bancorp Inc. of Arkadelphia said Wednesday that it will acquire Farmers Bank of Hamburg (Ashley County) in a $4.5 million cash-and-stock deal.
Like many small banks, Farmers has struggled with consistent profitability since 2008. The $41.1 million-asset lender recorded net income of $238,000 that year, its best in the post meltdown era.
The bank, supported by a dozen staffers, reported a $73,000 loss through the first nine months of 2016.
Bruce Timmons, Southern Bancorp's market president for Eudora, will assume responsibility for the Hamburg market after the deal is completed. Timmons lives in Hamburg and is a 43-year banking veteran.
Kenny Allbritton, the current Farmers Bank president, will stay aboard following the merger.
The acquisition will expand the footprint of Southern Bancorp into Ashley County. Southern Bancorp is a Community Development Financial Institution with 44 locations in eight Arkansas counties and nine Mississippi counties. It has $1.1 billion in assets.
"The Hamburg community fits well into the Southern Bancorp target market," Southern Bancorp CEO Darrin Williams said in a news release. "We look forward to bringing our unique brand of banking to the area, which combines traditional banking products and services with financial development offerings such as financial education, credit and homebuyer counseling, and free tax preparation among others."
Southern said the deal aligns with its mission to "create economic opportunity through increased access to capital" and financial services in underserved communities. It's also "representative of a larger growth plan aimed at increasing Southern Bancorp's footprint," the company said.
"Our shareholders are excited to join the Southern Bancorp family, not only because of what it will mean for our customers in terms of new products and services, but also because of Southern Bancorp's mission focus, which will be a great asset to our community," said Jack Shell, Farmers' board chairman.