According to the article, the deal is anticipated to close during Q3 2009. Southern Bancorp entered into its agreement with First Delta less than two weeks after announcing it would take over the troubled Timberland Bank of El Dorado, AR.
A March 27 article in the Arkansas Gazette reported that Southern Bancorp will pay more than $5 million for Timberland Bank, which has approximately $140 million in assets. Timberland Bank, however, has been under a cease-and-desist order from the Federal Deposit Insurance Corp. since July 2008.
Unlike Timberland Bank, First Delta Bankshares is healthy, with both of its banks, First National Bank of Blytheville and Bank of Trumann, showing solid return on assets. First National Bank will continue to operate as a separate charter once the acquisition is completed. Bank of Trumann's charter status remains up in the air.
The article in the Arkansas Gazette said Southern Bancorp received $11 million in January 2009 as part of the Troubled Asset Recovery Program (TARP). In that article, Southern CEO Phillip Baldwin said the money would be used to buy banks that would reach disadvantaged areas in south Arkansas. Southern is looking for more banks to acquire.
The company's website says Southern's mission is to focus on "the specific needs of the region" through financing community and development efforts within a 50-mile radius of Southern bank branches. Previous acquisitions brought Elk Horn Bank and Trust in Arkadelphia; First Bank of the Delta in Helena-West Helena, AR and Delta Southern Bank in Clarksdale, MS into the community development bank's fold.
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