Sinclair Financial sells to executive

Sinclair Financial Group is how Stevens Financial Group, according to Damian Sinclair, former owner of the company.

The finance company is doing business simply as SFG after being sold in July 1999 to Clarence Stevens Jr., its president, treasurer and chief financial officer. Stevens is now the president and chief executive officer of SFG, and Sinclair will stay on as a consultant for the company for the next two years.

Stevens, who is a CPA, served as SFG's president, treasurer and CFO for a year before acquiring the company. Stevens' background includes heading the international accounting division of Commercial Credit on the East Coast, and auto financing for a Fortune 50 company.

"We had talked since the day Clarence interviewed for the position of CFO that I would give him the chance to eventually acquire the company. We went ahead and made the deal after a year because I decided it was time for me to acquire a bank," Sinclair said. Sinclair declined to disclose the selling price of SFG.

Sinclair is the new owner of the former Northwest National Bank in Gravette, Ark., now known as Sinclair National Bank. The change of control of the bank was approved by federal regulators Feb. 29. Sinclair said he approached the former owners about purchasing the bank in December 1999.

"We always had intended for years to acquire a bank," Sinclair said. "I decided to find a bank to buy somewhere, hopefully close to Springfield, and I found one in Arkansas, just across the Missouri line."

Northwest National was started by Kim Hendren, a former state senator, as a family operation in 1996 and was owned by the Hendren family. Sinclair purchased the bank from the Hendrens for $2.75 million and invested another $2 million in capital in the bank. Sinclair said the bank lost money every year since its inception. Its assets as of June 1999 were slightly more than $17 million.

SNB's shareholders are Damian Sinclair, Susan Sinclair and former Great Southern Vice Chairman Don Gibson. Its board of directors comprises the Sinclairs, Gibson, Richard Wilson, who is Great Southern's former senior vice president and chief financial officer, and Kent Chambers, who stayed on from Northwest National as cashier.

Gibson replaced Northwest Nat-ional's president and will run the bank from Springfield. Wilson joined SNB as its CFO and chief lending officer and will also work from Springfield. Sinclair said the board is still evaluating whether to add employees or services. Other staffing changes are not planned at the bank, which has 12 employees and a branch in Bella Vista. SNB and SFG will have a relationship, Sinclair said.

"SFG is going to provide a lot of servicing. The bank will also buy some loans on occasion from SFG," Sinclair said. "We don't think we're geographically locked into northwest Arkansas ... we expect to do a lot of business in the Springfield area. The focus of the bank is going to be on affordable housing loans. We expect to be one of the larger affordable housing lenders in Arkansas and Missouri, and eventually branch into Oklahoma."

Sinclair's Maine venture, Sinclair Bank & Trust, closed last summer after a year in operation. Sinclair Bank & Trust was chartered in August 1998 as the nation's first uninsured wholesale bank and was an affiliate of SFG.

"We didn't know at the time whether being an uninsured institution would accomplish our goals. We tried it; it didn't," Sinclair said. "It did not do well with the public ... the FDIC insurance really was important, even though it didn't provide coverage for the larger CDs and things over $100,000. People still wanted an institution that was part of the FDIC insurance fund."

The Sinclairs and two other investors owned the Maine bank, which was chartered as an uninsured bank as a result of Maine's 1997 Universal Bank Charter Act.

The act allows banks, savings banks and thrifts to share one another's powers and established a new charter for wholesale financial institutions, also known as "woofies," which are set up by nonbanks or holding companies and do not accept retail deposits or accept retail insurance.

Uninsured banks also do not accept deposits of less than $100,000, and depositors must have a net worth of $1 million or have reported income of at least $200,000 for two straight years.

When Sinclair Bank & Trust opened, Sinclair said its purpose was to complement SFG and allow it to expand in a regulatory environment and offer more products. He also said the uninsured bank would eventually book SFG's loans and SFG would service those loans.

"We thought that possibly the bank could accomplish the depositing goals for larger deposits, yet at the same time still provide exemptions for real estate lending, etc., etc., because it was a bank and it provided a lot of exemptions by going across state lines for lending activities," Sinclair said.