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Making waves: Boatmen's Bancshares enters Arkansas waters in a $29 million deal.

On March 20, one of the largest banking holding companies in the country officially made its entry into Arkansas.

Executives from Boatmen's Bancshares Inc. of St. Louis and Superior Federal Bank of Forth Smith met in St. Louis to complete a $29 million deal.

With a flurry of signatures, the largest thrift in Arkansas became part of the growing Boatmen's empire.

The day also marked the 61st birthday of the Boatmen's chairman, president and chief executive officer, Andrew Craig III. But the birthday went by unnoticed, which is in keeping with Craig's personality. Even though he is one of the most powerful bankers in America, he maintains a low profile.

Boatmen's purchase of the $700 million asset thrift should have little impact on day-to-day operations at Superior Federal.

"We don't anticipate any changes," Craig says. "We will continue operating Superior Federal as a savings bank. We're impressed with the leadership and operations."

The only leadership change will be the addition of Gregory Curl, a Boatmen's executive vice president, to the Superior Federal board.

The range of services undoubtedly will expand over time, but Superior Federal's name will stay the same.

"That's their method of operation," says Bruce McNeil, Superior Federal's chief executive officer. "They're an acquisition-minded company, but they like to leave control at the local level."

How quickly has Boatmen's grown?

The holding company had assets of $3.5 billion in 1984. Executives are forecasting that assets will total $23 billion by the end of the year. That's an average annual increase of almost 70 percent during an eight-year period.

The expansion includes acquisitions in Illinois, Missouri, Tennessee, Oklahoma and Arkansas.

Counting the Superior Federal purchase, Boatmen's has bought $9.2 billion in assets in deals worth $642 million since 1988.

Boatmen's also has two deals pending for $4.6 billion of assets in Iowa, New Mexico and Texas. The total purchase price should be about $471 million.

"We have a full platter right now, and we'll be working to assimilate these new assets," says Craig, who flew to Fort Smith March 24 to visit Superior Federal headquarters.

"They intend to be one of the major players in the central United States," McNeil says.

At last count, Boatmen's was the 36th-largest bank holding company in the nation. In terms of capital strength, Boatmen's was among the five largest.

The acquisition strengthens Boatmen's retail base because Superior Federal has more checking accounts than any financial institution in Arkansas. Residential mortgages represent Superior Federal's main lending activity.

Superior Federal has 29 locations in 19 Arkansas cities. The cities with multiple locations and number of branches in each are Little Rock (4), Fort Smith (4), Conway (2), Fayetteville (2), North Little Rock (2) and Van Buren (2). There is one branch each in Harrison, Marshall, Russellville, Paris, Danville, Waldron, Mena, Morrilton, Lonoke, Benton, Brinkley, Carlisle and England.

Superior Federal reported a $4.8 million profit in fiscal 1991 and had a delinquency rate on loans that is half the national average.

But some problems began in the 1980s when the Federal Savings and Loan Insurance Corp. asked Superior Federal to take over three failed thrifts. Superior Federal gained $31 million of regulatory goodwill to take over Commonwealth Federal Savings & Loan in Little Rock, First Federal Savings & Loan in Morrilton and Guaranty Savings & Loan Association in Harrison.

The intangible assets became a financial millstone when accounting procedures were changed in August 1989. As a mutual company, Superior Federal was, in effect, owned by its customers. To facilitate a recapitalization, the thrift had to convert into a stock company, which is what Boatmen's acquired.

The $29 million capital infusion from Boatmen's balanced the regulatory scales.

The first contact with Boatmen's came with a telephone call in April at a time when the holding company was expanding into Oklahoma. By early December, a 10-member team from Boatmen's had begun inspecting Superior Federal branches.

Three other suitors came calling on Superior Federal, but no one is stepping forward to name who those potential buyers were.

Boatmen's Buys

Superior Federal is the fourth major acquisition Boatmen's has made during the past three years.

In December 1988, Boatmen's bought Centerre Bancorporation of St. Louis in a $467 million stock swap. Boatmen's issued 14.3 million shares of stock to take over its competitor. Centerre, a publicly traded corporation, had $5 billion in assets at the time.

Two years later, Boatmen's paid $27 million for the deposits of Community Federal Savings & Loan, the largest thrift in St. Louis. Boatmen's retained 75 percent of Community Federal's $2.3 billion deposit base in the Resolution Trust Corp.-assisted acquisition and let the federal government keep the S&L's $1.4 billion loan portfolio.

Boatmen's also kept 10 of Community Federal's 29 locations in east Missouri. It shut down the rest.

In August 1991, Boatmen's paid $86 million for First Interstate Bank of Oklahoma in Oklahoma City, the third-largest bank in the state. The $900 million asset bank, renamed Boatmen's First National Bank of Oklahoma, reported a $7.6 million loss for the quarter that ended Sept. 30. It was the only significant loss among Boatmen's chain of 33 banks during the third quarter.

Earlier this month, Boatmen's paid $33 million for Founders Bancorporation Inc., a $300 million asset holding company in Oklahoma City. The addition of Founders will make Boatmen's the second-largest bank in Oklahoma.

Boatmen's should close on a $134 million stock swap for First Interstate of Iowa Inc. in early April. First Interstate is a $1.2 billion asset publicly traded company based in Des Moines.

In the fall, Boatmen's is expected to complete a $337 million stock swap for another publicly traded bank holding company, Sunwest Financial Services Inc. of Albuquerque, N.M. The holding company has $3.4 billion in assets and controls 30 percent of the bank assets in New Mexico.

Sunwest also has a bank in El Paso, Texas. It would mark Boatmen's initial foray into that state.

Inside Info

The ownership of Boatmen's Bancshares is divided into two classes of stock -- 34.7 million shares of common stock and 13,059 shares of series B preferred stock.

Various Boatmen's subsidiaries hold 19.4 percent (6.7 million shares) of the corporation's common stock in a trustee or executor capacity.

Counting stock options, directors and officers as a group own or control 2 percent of the common stock.

Five stockholders own more than 5 percent of Boatmen's series B preferred stock. They are:

* Ben Glassman of St. Louis (15.5 percent).

* George Howard Jr. of Mount Vernon, Ill. (9.6 percent).

* Mabel Howard of Mount Vernon (8.4 percent).

* Helen Lucille Powers of Mount Vernon (7.5 percent).

* Allie Rollinson of Dix, III. (6.5 percent).

The top nine executives at Boatmen's were paid salaries totaling $3.8 million in 1990. At the top of the list was Craig. He was paid $983,960, followed by:

* Samuel Hayes III, vice chairman of Boatmen's Bancshares and president and CEO of Boatmen's National Bank of St. Louis, $665,815.

* John Peters MacCarthy, vice chairman of Boatmen's Bancshares and chairman and CEO of Boatmen's Trust Co., $489,975.

* John Brennan, executive vice president, $407,805.

* James Kienker, EVP and chief financial officer, $319,184.

From 1987-90, those five executives received large cash bonuses. The bonuses were $549,100 for Craig; $328,000 for Hayes; $208,000 for MacCarthy; $194,904 for Brennan; and $160,720 for Kienker.

Boatmen's has paid dividends to its stockholders continuously since 1873. That kind of performance and the recent growth of the corporation is attracting attention across the country.

And with Boatmen's new presence in Arkansas, talk is increasing that the company would like an even larger foothold at Little Rock.

Expect to hear much more from the St. Louis banking giant in the years to come.

The Big Men At Boatmen's

Andrew B. Craig III, 61,

* Chairman, president, chief executive officer and director of Boatmen's Bancshares Inc.

* 1990 Salary: $983,960

A native of Buffalo, N.Y., Craig came to Boatmen's Bancshares as president and director in 1985.

He became chief executive officer of the holding company in 1988 and chairman in 1989.

Before moving to St. Louis, Craig was president and director of BancOhio National Bank from 1983-85. National City Corp. of Cleveland bought the Columbus, Ohio-based financial institution in 1985.

Prior to that, Craig worked at Manufacturers & Traders Trust in Buffalo, N.Y., from 1957-83. He was named president, CEO and a director in 1974.

Craig is a director of the Anheuser-Busch Cos., Petrolite Corp., Automobile Club of Missouri, Arts and Education Council of Greater St. Louis, Barnes Hospital and the St. Louis Symphony Society.

He attended Cornell University at Ithaca, N.Y., from 1950-54 and graduated from University of Buffalo in 1955. Craig served in the Army for two years.

Samuel B. Hayes III, 55,

* Vice chairman and director of Boatmen's Bancshares. Chairman, president, CEO and a director at Boatmen's National Bank of St. Louis. Director of Boatmen's Trust Co.

* 1990 Salary : $665,815

Hayes, a native of Morristown, N.J., came to Boatmen's in 1986. Prior to that, he had served as president, chief operating officer and director at the Bank of Oklahoma and BancOklahoma Corp. since 1977.

Hayes held various positions with Citicorp of New York. He was a division manager overseeing 150 branches and a regional credit officer in Sydney, Australia.

He served in the Army for six months after college and was recalled to active duty during the Berlin Crisis of 1961.

Hayes graduated from Yale University at New Haven, Conn., in 1959 and from the New York University Graduate School of Business in 1962.

He is a director of the St. Louis Municipal Theatre, a commissioner of the St. Louis Science Center and a trustee at St. Louis University.

John Peters MacCarthy, 58,

* Vice chairman and director of Boatmen's Bancshares. Chairman, CEO and director of Boatmen's Trust Co.

* 1990 Salary: $489,975

MacCarthy, a St. Louis native, came aboard at Boatmen's in 1988 following the sale of Centerre Bancorporation of St. Louis.

He joined Centerre as company secretary in 1969 and was promoted to director in 1975, senior vice president in 1978, vice chairman in 1979 and president in 1983.

MacCarthy also was an executive at Centerre Trust Co., where he became company secretary in 1969, executive vice president and director in 1972, president and chief operating officer in 1975 and CEO in 1979. He also was elected president and CEO of Centerre Bank in 1985.

MacCarthy worked at the St. Louis law firm of Bryan Cave McPheeters & Roberts from 1959-68 after having graduated with honors from Princeton University at Princeton, N.J., in 1954 and the Harvard University Law School at Cambridge, Mass., in 1959.

MacCarthy is a director of Union Electric Co., a trustee of Washington University at St. Louis and president emeritus of the St. Louis Art Museum board.
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Article Details
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Author:Waldon, George
Publication:Arkansas Business
Date:Mar 30, 1992
Previous Article:The S&L witch-hunt: officers, directors of Arkansas thrifts feeling Resolution Trust Corp.'s sting.
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