Paid $ 6.6M to FDIC, Centennial says

Centennial Bank of Conway, which is owned by Home BancShares, said it has paid the Federal Deposit Insurance Corp. $ 6.6 million to end the bank’s loss share agreement with the regulator.

Centennial had loss share agreements with the FDIC in connection with six failed banks it bought in 2010.

The decision to terminate the loss share agreements early, announced Wednesday, is a “sound financial decision” for Centennial, John Allison, chairman of Home BancShares, said in a prepared statement. Centennial will be able to keep all recoveries from future bad loans by the failed banks instead of sharing them with the FDIC, Allison said.

With the loss share agreements, the FDIC took 80 percent of the losses Centennial would have incurred on the disposition of covered loans and foreclosed real estate. The agreements were made available to banks willing to buy other failed banks.