Stockmens Bank grows with opportune merger


Rob Alexander isn’t worried about his legacy, but the Colorado Springs banker has likely enhanced the reputation he’ll eventually leave behind.

The 54-year-old chairman and CEO of Stockmens Bank is merging his company with the larger but less successful First Home Bank of Mountain Grove, Mo.

“The problem with little banks is they often don’t survive when their owners move on,” Alexander said. “This merger allows Stockmens to survive Rob. It gets us to that level where we’re big enough to survive when I walk away or I’m gone.

“I wanted that option for my great employees, for our stockholders and for our customers.”

Stockmens has assets of about $120 million, while First Home Bank lists assets of $219 million.

“Stockmens has a lot of assets that are off the balance sheet,” Alexander said. “It won’t be immediate, but when those are added, it’ll get us closer to $400 million. Small banks have been in the $200 million or less category, but I believe in the next 10 years they’ll need to be in the half-a-billion range.”

This was a transaction forged by two people who were already doing business together. Alexander is on the board of directors of First Bancshares Inc., the parent company of First Home Bank, and has owned stock in FBSI since 2007.

Regulatory approval came during the last two weeks, Alexander said.

“While it might appear that merger activity is speeding up in Colorado, the pace hasn’t significantly increased,” said Don Childears, president and CEO of the Colorado Bankers Association. “Rather, the activity has begun moving from rural areas closer into the Front Range where it gets more attention.

“That said, we expect to see the trend of mergers continue due to regulatory pressure and compliance burdens that are particularly difficult and costly for small banks.  Lastly, smaller banks are faced with the challenge of succession planning for both issues of who will own and manage the bank.”

The deal will take place in two parts. FBSI will purchase Stockmens Bank in an all-stock transaction. That should become official about June 30, Alexander said. First Home Bank then will merge with Stockmens Bank about Sept. 30 and officially operate under the Stockmens name.

“We hope those are final right about the end of each quarter,” Alexander said.

He will gain controlling interest in the holding company and First Home Bank. He’ll become chairman of FBSI while remaining chairman and CEO of Stockmens. Brad Weaver will remain chairman and CEO of First Home Bank, which might retain that name for familiarity reasons in Missouri.

“This is a good thing for FBSI and First Home Bank,” Weaver said. “It’s a typical merger of two partners. I don’t see any downside in this merger for customers of either bank. This will allow us to be a little more competitive.”

The merger offers two other big advantages for Stockmens Bank. FBSI is traded publicly and the improved assets allow for additional growth.

“Acquisition is always on the table,” Alexander said. “I don’t decide to grow and try to force deals; I look for great opportunities. I decided this was a great opportunity.”

As of March 31, First Home Bank’s adjusted book value per share was $11.41. Stockmens adjusted book value per share was $5,229.17.

“[First Home Bank] was a sick puppy,” Alexander said. “Brad is good at cleaning a sick bank and he’s done a great job operating it. He’ll be working for me, but he’s on the board for another couple of years, for sure. I like Brad, and I have a great deal of respect for him.”

Customers of Stockmens Bank, located at 25 N. Cascade Ave. in downtown Colorado Springs, won’t be affected, Alexander said.

“I don’t think they’ll know any difference except, for the first time, they could buy stock in our company,” he said. “A lot of customers have asked me through the years when they would be able to buy stock.”

The deal was in the works for about 18 months, but Alexander had considered it for even longer.

“I’ve wrestled with the pros and cons for several years,” he said. “I decided the risk was worth it.”

The only unusual aspect of the merger, he said, is “geography.”

“That’s really the only negative factor, that First Home Bank is [800] miles away,” Alexander said.

Mountain Grove is 67 miles east of Springfield, Mo., site of one of the eight branch locations, and the other six are spread across small towns in south central Missouri: Ava, Crane, Forsyth, Gainesville, Marshfield and Sparta.

“I’m a small-town guy and I can really relate to that area,” said Alexander, who raised his three adult daughters with Ann, his wife of 29 years, on a commercial ranch about an hour northeast of the Springs in Elbert County. “First Home Bank has a bunch of small branches in rural communities, and it just seemed like a good fit.”

Alexander’s familiarity with Weaver, whom he helped bring to First Home Bank six years ago, helped seal the deal.

“I do a lot of commercial loans, business and agriculture,” Alexander said. “They do a lot of retail and consumer stuff. This diversifies our loan portfolio.” n CSBJ