Canceled Plans Behind Chapter 11 Filing by Holding Companies / of American National Bank
Wolfe, Lou Anne, THE JOURNAL RECORD
If that transaction had been completed, American Southwest would have owned National Bancshares, which owns 80 percent of American National Bancshares Inc., which owns 100 percent American National Bank of Midwest City. This amounts to a two-tier holding company.
However, those acquisition plans were called off, according to Andrew J. Haswell Jr., advisory director for American Southwest and chairman of National Bancshares.
That change was a contributing factor to the Chapter 11 bankruptcy petitions filed Monday in U.S. Bankruptcy Court by National Bancshares and American National Bancshares.
Another factor was a proposed American Southwest public offering, which was not completed.
The decision was reached over a period of about three months, Haswell said.
National Bancshares and American National Bancshares have a common board of directors, with Haswell as chairman.
Last November, American Southwest filed a registration statement with the U.S. Securities Exchange Commission for a public offering and announced it would sell up to 1 million shares at $8.50 per share.
In addition, the organizers filed a request for approval as a new bank holding company with the Federal Reserve Bank in Kansas City.
American Southwest said at the time it would pay the group of stockholders which owns Mercantile Bank $3.5 million for their shares.
The American Southwest company is now basically a shell, and the deal to purchase the banks was never consummated, Haswell said Tuesday.
The proposed public offering by American Southwest was dropped because of such factors as market conditions, ability to find purchasers for the stock, and financial conditions of the makeup of the banks and their structures, Haswell said.
"It was mostly the market for a publicly-owned multibank holding company," he said. "The securities business changes from day to day. It gradually became unfeasible."
Archer L. Brock, president and chief executive officer of Mercantile Bank, said American Southwest failed to exercise its option to purchase the bank, which expired Dec. 31.
"Under the circumstances, I think everything worked out just fine," he said. "I'm not disappointed."
Asked if he would pursue a multibank arrangement in the future, Brock said:
"We look at every deal as it comes up. We're bankers primarily, but at the same time we're good listeners."
Brock was listed as a director of American Southwest at the time of the November announcement, along with Haswell, Charles Morrison, chairman of the executive committee at American National Bank; Don F. Duffield, president and chief executive officer of American National Bank; and F. Dale Crabtree, one of the larger shareholders in National Bancshares.
Haswell said the transaction would have been "wonderful" if it had been accomplished.
"It would have reduced the holding company debt, cashed out the preferred stock of the top company, and injected working capital into (American National) Bank," he said. "It just didn't get done."
The two holding companies for the Midwest City bank financed the legal fees, printing bills and accounting bills paid in preparation for the public offering, Haswell said. …