Bear State conversion hits hiccup in Branson

If the old adage, “The customer is always right,” is correct, then Branson businessman Jeff Lansman has reason to be irritated with Bear State Bank.

The president and CEO of Lansman International Inc. discovered last month his business account had stopped automatically paying bills following a late February system conversion from a Metropolitan National Bank location in Hollister.

Lansman and his wife, operators of two Ozark Quilts & More stores in Branson, were told they wouldn’t have access to their account for a couple of days before the Feb. 22 transition, but then things would be back to normal. But when access returned, Jeff Lansman said all of their bill pay information was gone.

Among the casualties were a rent payment and a forgotten business-insurance premium.

“My wife, who is out of the country right now, called me the other day and said, ‘You know what’s not getting paid: our insurance.’ It normally gets paid on the fifth of the month, so that’s (almost) a month late,” he said on March 24.

A spokeswoman for the bank said the incident was an anomaly and has been addressed.

“This is one of the smoothest transitions we’ve had,” said Shelly Lofton, chief marketing officer for holding company Bear State Financial Inc. (Nasdaq: BSF).

Lofton said only “a few” customers reported similar problems, declining to quantify issues from this or previous mergers.

Bear State Bank agreed to acquire Springfield-based Metropolitan National Bank in June in a $70 million cash-and-stock deal. Lofton said logos and signage were strategically changed ahead of the late-February account conversion, so tellers and bank representatives could set expectations with customers. Also, she said the bank mailed at least three letters preparing clients for a weekend without account access and a new start as a Bear State client.

The hiccup with the Lansmans’ account caused the couple to switch banks. They planned to open accounts at The Bank of Missouri.

A big hassle was related to Monina Lansman’s regular giving to a few nonprofits.

“The problem is she had five or six different charities she was sending money to every month that she didn’t have all the information for,” Jeff Lansman said. “They all got cut off.”

He said they’re working with a Bear State representative who has given him a spreadsheet with bill pay information, minus specific account numbers.

Lansman, who also is an electrical engineer working as president and CEO of Ozark Global Engineering Inc., said he doesn’t understand how account information was lost.

“Before we change any software anywhere, we back everything up. So, you should be able to go back immediately and pull that up,” he said.

After the Metropolitan National buyout was announced last year, Bear State board Chairman Richard Massey said achieving economies of scale and growing Bear State into Missouri were key objectives.

The combined companies hold assets of roughly $2 billion. When former Metropolitan National CEO Mark McFatridge was tapped for the top executive post at Bear State in October, Massey said the company was still seeking to hit an asset “sweet spot” of $3 billion-$5 billion.

The Metropolitan National buyout came about a year after Bear State’s acquisition of Hot Springs, Ark.-based First National Security Co., the holding company of First National Bank of Hot Springs and Heritage Bank of Jonesboro. The move signaled the merger of three bank charters in early 2015.

As banks struggle to grow in a post-Great Recession world, particularly midsize banks such as Metropolitan National and Little Rock, Ark.-based Bear State Bank, one viable option is acquisition. That means even isolated incidents can add up.

According to FIG Partners, a research firm specializing in community banks, bank mergers increased nearly 20 percent between 2013 and 2015 to around 250 a year. The value of the deals is on the rise, too, jumping last year to roughly $742 million through early December from $560 million in average assets in 2013.

McFatridge is not alone in feeling pressure to grow. In the first quarter of 2015, Pine Bluff, Ark.-based Simmons First National Corp. (Nasdaq: SFNC) finalized its $206.9 million purchase of Springfield-based Liberty Bancshares Inc., which was followed up by the third-quarter closing of another local firm, Ozark Trust and Investment Corp., the parent company of Trust Company of the Ozarks, for $20.7 million. In January, Great Southern Bancorp Inc. (Nasdaq: GSBC) finalized its purchase of Cincinnati-based Fifth Third Bank’s St. Louis branches, deposits and loans. Since 1990, Great Southern Bank has grown its loan portfolio – thanks, in part, to the acquisition of several failed banks since the recession – to $3.3 billion in eight states from roughly $360 million primarily in southwest Missouri, according to Springfield Business Journal archives.

According to Bank Director’s 2016 Bank M&A Survey, two-thirds of the 260 bank-executive respondents said they believe their banks need to grow significantly. Almost half of survey participants said their bank has been involved in a merger since 2008, and 62 percent said the current environment is favorable for acquisitions.